Eastman Kodak Co.Download PDFNational Labor Relations Board - Board DecisionsApr 28, 1969175 N.L.R.B. 626 (N.L.R.B. 1969) Copy Citation 626 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Texas , Eastma4 . Company , Division of Eastman Kodak • Company, and Caddo Construction Company, Successors to Hychem Constructors, Inc.,and Plumbers,and Steamfitters Local No. 301, United Association of Journeymen and Apprentices of the Plmhbing and Pipe Fitting Industry of the United States and Canada, AFL-CIO, Petitioner. Case 16-RC-4475 April 28, 1969 DECISION, ORDER, AND SECOND' DIRECTION OF ELECTION BY MEMBERS FANNING, JENKINS, AND ZAGORIA We begin with a statement of the most recent procedural developments and the present posture of this case . On January 23, 1968, we issued a Decision on Review and Direction of Election in this case,' directing an election in a unit of pipefitters, pipefitter helpers, and welders employed by Hychem Constructors, Inc., at the Longview, Texas, plant of the Texas Eastman Company. In the Decision, the National Labor Relations Board found that Texas Eastman Company maintained a contract with Hudson Engineering Corporation pursuant to which Hychem, as Hudson 's subcontractor, was engaged in performing construction work at the said Longview plant. The Board also found, under the facts presented throughout the proceedings, that the Texas Eastman Company was not a joint employer of Hychem's employees. On February 2, 1968, Hychem Constructors, Inc., and Hudson Engineering Corporation filed with the Regional Director for Region 16 of the National Labor Relations Board a Motion to Dismiss the petition herein on the ground that, by letter dated April 20, 1967, Texas Eastman Company terminated its construction contract with Hudson Engineering Corporation, effective on May 1, 1967,2 and that since April 29, 1967, no employee of Hychem Constructors, Inc., or Hudson Engineering Corporation has been assigned by either of said companies to perform any work at the said Texas Eastman Company plant at Longview, Texas.' By letter dated February 5, 1968, counsel for Texas Eastman Company confirmed that its construction contract was terminated after notice had been served upon it by Hudson Engineering Corporation on April 12, 1967. Counsel for Texas Eastman further advised that Caddo Construction Company, a wholly owned subsidiary of Eastman Kodak Company, has been formed to undertake the work previously performed by Hudson; and that Caddo has hired a substantial number of former employees of Hudson-Hychem. 'Hychem Constructors, Inc., 169 NLRB No. 38. 'At no point during the proceedings on review was the Board eve advised of the termination of the construction contract between Texa Eastman Company and Hudson Engineering Corporation. On February 5, 1968, Texas Eastman Company filed with the Regional Director for Region 16 a Motion to Dismiss the petition as to Texas Eastman Company, pursuant to the finding in the Board's Decision on Review and Direction of Election that the Texas Eastman Company was not a joint employer of the employees in the requested unit. On March 26, 1968, the Board issued a Notice to Show Cause: why Texas Eastman Company, Division of Eastman Kodak Company, and Caddo Construction Company, a wholly owned subsidiary of Eastman Kodak Company, should not be substituted as successors to Hychem Constructors, Inc., and Hudson Engineering Corporation, as the single employer or joint employers in the unit found appropriate in the Board's Decision on Review and Direction of Election issued on January 23, 1968;' why said Decision should not be amended accordingly; and why Texas Eastman's Motion to Dismiss the petition should not be denied. 'Such substitution would constitute a dismissal of the petition as to Hudson and Hychem. Texas Eastman filed with the Board on April 4, 1968, its Response to the Board's Notice to Show Cause, contending that upon termination of the Hudson-Hychem contract some Hychem employees obtained employment with another contractor (Brown and Root) performing construction work for Texas Eastman, while other Hychem employees were hired by Caddo Construction Company, a wholly owned subsidiary of Texas Eastman which was established to continue the construction previously performed by Hudson-Hychem; that Caddo cannot be found a successor to Hudson-Hychem, in view of the lack of evidence (owing to the failure to conduct a hearing) concerning changes in the construction operation, ownership of the companies, and other factors; that Texas Eastman, even if found a successor, is entitled to a new hearing on the issue of the appropriate unit; and that such a hearing would reveal an operation different from that on which the prior unit determination was based and, hence, require a different unit determination. Also on April 4, 1968, the Petitioner filed with the Board a Statement in Support of Substitution of Texas Eastman and Caddo as Successor-Employer or Successor-Joint Employers, asserting that Caddo is admittedly Hychem's successor; that it offered employment to all of Hychem's employees; and that the Caddo operation was identical to that of Hychem previously, the change being a "paper transfer," and Caddo and Texas Eastman appearing 'Neither the Request for Review filed by Texas Eastman Company on April 13, 1967, nor its Brief in Support of Review filed May 24, 1967, revealed this change To the contrary, Texas Eastman 's brief stated that its "Request for Review heretofore filed sufficiently states the facts . . in support of its position." 175 NLRB No. 105 TEXAS EASTMAN COMPANY 627. to be joint employers. On May 23, 1968, the Board ordered that the record "be reopened and that a further hearing be held for the purpose of resolving the issues raised by Texas Eastman' s Response to Notice to Show Cause" and remanded the case to the Regional Director for Region 16 for the purpose of such hearing. - The hearing was held on July 30 and 31, 1968, before Hearing Officer Thomas P. Sheridan. After the hearing was closed, the Regional Director for Region 16 transferred the case to the Board. Thereafter, Texas Eastman Company and Caddo Construction Company jointly filed a timely brief. Pursuant to the provisions of Section 3(b) of the National, Labor Relations Act, as amended, the National Labor Relations Board has delegated its powers in connection with this case to a three-member panel. The Board has reviewed the rulings of the Hearing Officer made at the hearing and finds that no prejudicial error was committed. The rulings are hereby affirmed. The Board has considered the entire record in this case with respect to the issues raised by Texas Eastman Company's Response to the Notice to Show Cause, including the brief of Texas Eastman and Caddo, and makes the following findings and conclusions: The Successorship and Joint Employer _ Questions Our test for determining whether an employer is a successor employer, is whether the employing industry remains essentially the same after a transfer." Under this identity-of-enterprise standard, we conclude that Caddo and Texas Eastman are successors to Hudson -Hychem, relying particularly on the evidence summarized herein, and the record as a whole. On April 12, 1967,' Hudson notified Texas Eastman by letter that it intended to terminate its contract under which Hudson's subsidiary, Hychem, performed construction for Texas Eastman. The letter stated that the effective date of termination would occur in 90 days. On April 18, Hychem posted a notice to all its employees which advised them of Hudson's letter to Texas Eastman, and that Texas Eastman had "accepted." On April 20, Texas Eastman wrote Hudson, acknowledging receipt of the April 12 letter, and changing the effective date of termination from July 12 to May 1. Also on April 20, Caddo was incorporated as a wholly owned subsidiary of Texas Eastman. On the same date, Caddo mailed a letter to all former Hychem employees, with employment applications enclosed. 'Valleydale Packers, Inc., 162 NLRB 1486, 1490 . See also West Suburban Transit Lines, Inc., 158 NLRB 794, 797; Perma Vinyl Corporation , 164 NLRB No. 119 , pages 4-5, enfd. sub nom . U. S. Pipe and Foundry Co. v. N.L.R.B., 397 F .2d 554 (C.A. 5, 1968); Pargament Fidler, Inc, 173 NLRB No. 102. The letters offered each addressee employment with Caddo, and also said, in part: The contract between Texas Eastman Company and Hudson Engineering Corporation will end on May 1, 1967. The work at Texas Eastman's plant which was formerly contracted to Hychem will be carried on by Caddo Construction Company .... The letter also instructed those interested in working for Caddo to report on April 24, with their completed applications, to a Caddo representative at the North Gate clock station on the property of Texas Eastman's plant. The Hychem-Caddo applicants reported as instructed, and the Caddo representatives accepted the applications. On April 25, representatives of Texas Eastman's Industrial Relations Department began meeting with the applicants in groups of 20. These representatives, including Texas Eastman's Director of Industrial Relations, explained to the applicants "that they were being offered employment with [Caddo, and told] a little bit of the philosophy of what we hoped to do in the construction business at the Texas Eastman Plant site." The Texas Eastman representatives also explained Caddo's wage structure and job classifications; distributed copies of a statement of Caddo's personnel policies and employee benefits program;' and discussed Caddo's employee benefits program in detail. Afterward, Texas Eastman representatives individually interviewed, and then hired, those interested in working for Caddo. The new hires were instructed to report for work May 1. Texas Eastman and Caddo witnesses conceded that, as noted above, the offer of employment was made to all Hychem employees; that all accepted; and that all the Hychem supervisors likewise were offered, and accepted, jobs with Caddo. No one else was hired by Caddo at that time. On May 1, Texas Eastman and Caddo executed a construction contract.' Pursuant to this agreement, Caddo resumed construction of the same project 'All dates herein refer to 1967, except where otherwise indicated `Concerning wage policy, this statement said , in relevant part "It is our intention to- (1) Pay wages equal to or above those paid in the area for similar work performed under comparable conditions of employment and requiring like responsibility , experience , effort and skill . . (2) give consideration to fairness between the rates paid for various classes of work between work groups." 'Under the terms of this contract t Caddo will do such structural , mechanical , electrical , instrumentation, piping above and underground , buildings and other related construction work including repair, replacement and maintenance as may be authorized by Eastman from time to time on its plant site near Longview , Texas. 2. All authorizations for work under this contract will be in writing by Eastman furnishing to Caddo in each case the necessary detail drawings, specifications, location plan and other instruction as prepared by Eastman or by other engineering contractors doing work in Eastman's behalf. Caddo will be advised of Eastman's schedules for completions of the work , subject , however , to any changes in such schedules as may be dictated by Caddo's work force. n s s r s 8. This contract constitutes the entire agreement between the parties for the construction work herein stated and supersedes all prior agreements, written and oral, relating thereto. s r s s n 628 DECISIONS OF NATIONAL LABOR RELATIONS BOARD previously being built by Hudson-Hychem.x Caddo's offices on the Texas Eastman property are those which were formerly occupied by Hychem. Frank Traylor, formerly Hychem's office manager, and its supervisor of the toolroom and the field clerk, was employed in the same capacities by Caddo. He brought his whole staff with him to Caddo. On the basis of the foregoing and the record as a whole, we are satisfied that Texas Eastman and Caddo are Hudson-Hychem's successors under the identity-of-enterprise test mentioned above. Thus, Caddo was created, and entered a construction contract with, Texas Eastman the very day the Hudson-Hychem contract was terminated. Caddo solicited, interviewed, and hired all Hychem employees. It hired no one else. This Caddo work force performed the same work,' on the identical project, at the precise location, for the same "customer," as they had previously done under Hychem. And the performance of this essentially identical enterprise was virtually uninterrupted by the mere transfer of employees. Our conclusion that Texas Eastman and Caddo are successors to Hudson-Hychem is not affected by the fact that Caddo's hourly employees were paid at a slightly higher scale than they had earned at Hychem, or because after the transfer, they worked under modified personnel policies; for nothing in the record persuades us that these factors in any way altered the identity of the enterprise. Similarly, it is true that Texas Eastman owned no Hudson-Hychem stock; that there were no corporate officers common to both companies; that neither Texas Eastman nor Caddo purchased any assets from Hudson-Hychem, or assumed any contract or other obligations of the latter; that neither made any agreement with Hudson-Hychem to employ any Hudson-Hychem personnel; that Hudson is still in business although Hychem is no longer an operating company; that Caddo had no relationship or dealings of any kind with Hudson-Hychem; and that Texas Eastman made no payment to Hudson-Hychem as a result of the contract termination, except the settlement of accounts. These facts, however, are not controlling - either singly or collectively - since it is not the form of the transfer which controls but, as stated above, whether the employing industry remained essentially the same." Here, it did. There has been "no change in any essential attribute of the employment relationship."" For this reason, a question affecting commerce still exists concerning the representation of Caddo's employees. We shall, therefore, herein 'George Prendergast , Jr., assistant secretary of Texas Eastman and also assistant secretary of Caddo , estimated at the hearing that the cost of the amount of construction remaining to be performed beyond May 1, when the contract with Hudson was terminated and that with Caddo was executed, was "approximately a million and six hundred thousand dollars, in round dollars"; and that the continuation of that construction was still being performed by Caddo. 'Not only did the work force continue to perform plant construction, but individual employees had substantially identical assignments. See discussion of the unit question , infra. amend the Decision on Review and Direction of Election to reflect the successorship, by substituting Texas Eastman Company, Division of Eastman Kodak, and Caddo Construction Company for Hychem Constructors, Inc.' 2 Our Order shall name not only Caddo, but also Texas Eastman, as successors to Hychem, because the parent and its subsidiary exert joint control over Caddo employees and are, hence, joint employers. Thus, as already stated, Texas Eastman officials administered the hiring of the ex-Hychem employees for Caddo, explaining to them wage rates, job classifications, company policies and benefits;" Caddo's offices are located on the property of the Texas Eastman plant at Longview; and Texas Eastman assigns work to Caddo, and polices the performance of the work.14 In addition, the Texas Eastman Industrial Relations Department holds training classes for Caddo supervisors, and has veto power over the discipline of Caddo employees; Caddo's employee seniority policies are determined by Texas Eastman; Caddo does work for no one other than Texas Eastman; Eastman Kodak Company, of which Texas Eastman is - a division, owns all the Caddo stock; the Board of Directors of Caddo are all Texas Eastman employees; and all of Caddo's officers are employees of Eastman Kodak or one of its subdivisions.' S The Unit Question In our January 23, 1968, Decision and Direction of Election in this case, we found appropriate a unit composed of: All pipefitters, pipefitter helpers, and welders employed by Hychem Constructors, Inc., at the Longview, Texas, plant of Texas Eastman Company, a Division of Eastman Kodak Company, excluding office clerical employees, professional employees, all other employees, watchmen, guards, and supervisors as defined in the Act. '°Valleydale Packers, Inc., supra "Allan W Fleming, Inc, 91 NLRB 612, 614 , Barker Automation, Inc, 132 NLRB 794, 796. See also Wackenhut Corporation v. International Union, United Plant Guard Workers of America, 332 F.2d 954, 958 (C.A 9); United Steelworkers of America v Reliance Universal Inc of Ohio, 335 F.2d 891, 894 (C A. 3), Monroe Sander Corporation v Livingston, 377 F 2d 6, 11-12 (C A 2) "See the Fleming and Barker cases, supra, fn. 11 Cf. Valleydale Packers, Inc, supra (successor assumes duty to bargain), and Perma Vinyl Corporation , supra (successor bound, under circumstances , to remedy unfair labor practices). "Texas Eastman' s Director of Industrial Relations testified that these policies were "essentially the same" as those established for another Eastman Kodak subsidiary several years ago "Based on the quoted material in fn. 7, supra , and the record as a whole. "Even if Texas Eastman and Caddo were not successors to Hychem, we would in any event substitute them as the Employer-in-interest , because they received notice of this proceeding, appeared , and litigated the issues, and the record supports their joint employer capacity . They cannot, therefore , be prejudiced by such substitution . See New Laxton Coal Company, 134 NLRB 927; cf. John Davis Enterprises, 104 NLRB 584, 586, fn. 3. TEXAS EASTMAN COMPANY 629 This determination was based on the lack of bargaining history, the absence of any other labor organization seeking to represent these employees on any other basis, and the fact that the pipefitters, pipefitter helpers and welders were found to be a "readily identifiable and homogeneous grouping of construction tradesmen with a community of interest separate and apart from other employees." The last finding, in turn, was based particularly on the following considerations: The separate organization of the pipefitting department under its own supervision; the high wages of the pipefitters and welders; their on-the-job training; the special skills required for their work; the fact that they spent more than one-half their time in pipefitting duties (including the great majority of the most difficult pipefitting assignments and all pipe welding); and the fact that other skilled groups spent significantly less than half their time in pipefitting work (usually in the lower skilled pipefitting assignments and this, frequently, in abnormal circumstances). Texas Eastman and Caddo now contend that the above-described unit is not appropriate. Instead, they urge, the only unit now appropriate is "all hourly paid employees performing work for Caddo at Texas Eastman's plant in Longview, Texas." To establish this claim, they recite: (1) Caddo has no formal or systematic apprenticeship program; (2) Caddo, for the purpose of maintaining a stable work force, effects substantial interchange of employees and duties across traditional or formal craft lines; (3) Caddo groups all employees into four job classifications, each with a different hourly wage rate,'' and each encompassing employees of what were, under Hychem, the several crafts; (4) Caddo has no department of pipefitters, or any other department based on a primary skill, separately organized as such; and (5) Caddo has no general foremen supervising all employees of a particular primary skill. We think this unit contention, and the asserted bases on which it rests, are without merit. We have examined the record as a whole, and find it deficient in evidence that, as compared with the situation under Hychem, any appreciable change has occurred in either the day-to-day work performed by the employees petitioned for, or in the proportion of pipefitters' work they do." Indeed, the contrary appears - that the nature and quantity of their work is substantially identical to that which they performed under Hychem; and the same is true of the other employees. In this context, we think two factors relied on by the Employers - the four employee classifications, and the crew organization - are too tenuous a basis for a different unit determination; for the first is a renaming of jobs only, while the latter affects merely where employees report for work, not what they do. Similarly, we are not persuaded that the lack of any general foreman supervising all employees of a particular primary skill - a lack described in the Employer's brief - represents more than an illusory change.18 In sum , we find that the factors relied on in our original unit determination for Hychem employees, remain substantially unchanged.19 For this reason we find that unit still appropriate.20 ORDER It is hereby ordered that the unit found appropriate herein be, and it hereby is, amended by inserting before the word "Hychem" the words "Texas Eastman Company, Division of Eastman Kodak Company, and Caddo Construction Company, successors to." [Second Direction of Election=' omitted from publication.] "These are general construction mechanic ($4.25); construction mechanic ($3.75); mechanic helper ($2.25); and laborer ($2.00 and $1 .95). These rates were made effective May 1, 1967, and were subsequently increased. "We based this finding primarily on the testimony of Caddo's construction superintendent , Wilson, taken as a whole. Wilson held the same position at Hychem , and is the only witness who testified at both the last and the present hearing. Frequently he compared the Caddo operation with that of Hychem. See, e .g., fn. 19, infra. Our finding in this regard is not swayed by certain evidence which appears to indicate that , in some instances , pipefitters or other employees of a particular craft might work under a foreman of a different craft; for the record is silent as to the scope and nature of the supervision - e.g., as to whether these foremen are competent to pass on the quality of the (pipefitters ') work , or whether the foremen in fact direct their performance of it , or evaluate the work. "Thus, Wilson testified that specific crew foremen supervise crews whose craft lines are essentially preserved. "When, on cross-examination, Wilson was asked squarely to describe what changes Caddo implemented , after May 1, in the way it performed the work formerly done by Hychem, he could identify only two : (1) greater attention is paid , under Caddo's operation, to safety rules and plant safety; and (2) Caddo uses the personnel to perform slightly more maintenance work which, he estimated, now consumes about 10 percent of the time of Caddo employees. "Texas Eastman and Caddo claim that a unit determination herein based on any evidence from the record in this case except that adduced at the present hearing, denies them procedural due process of law . We think there is no merit to this contention , for their own principal witness, Wilson, admitted that the operation under Caddo, and the duties of its employees , were not substantially different from the situation which previously existed under Hychem . See, e.g., fn. 19 . Accordingly, the considerations on which we based our original unit determination are dispositive now; and from this follows the same unit determination. See New Laxton Coal Company, supra. "An election eligibility list, containing the names and addresses of all the eligible voters , must be filed by the Employers with the Regional Director for Region 16 within 7 days after the date of this Decision, Order, and Second Direction of Election. The Regional Director shall make the list available to all parties to the election . No extension of time to file this list shall be granted by the Regional Director except in extraordinary circumstances . Failure to comply with this requirement shall be grounds for setting aside the election whenever proper objections are filed . Excelsior Underwear Inc., 156 NLRB 1236. Copy with citationCopy as parenthetical citation