Ellary Lace Corp.

National Labor Relations Board - Board Decisions

Aug 14, 1969

178 N.L.R.B. 73 (N.L.R.B. 1969)

ELLARY LACE CORP.
Ellary Lace Corp . and Amalgamated Lace
Operatives of America . Case lO-CA-7443
August 14, 1969
DECISION AND ORDER
BY CHAIRMAN MCCULLOCH AND MEMBERS
JENKINS AND ZAGORIA
On May 15, 1969, Trial Examiner Leo F.
Lightner issued his Decision in the above-entitled
proceeding, finding that the Respondent had not
engaged in certain unfair labor practices alleged in
the complaint, and recommending that the
complaint be dismissed in its entirety, as set forth in
the attached Trial Examiner's Decision. Thereafter,
the General Counsel and the Charging Party filed
exceptions to the Trial Examiner's Decision, and
supporting briefs.
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 Trial
Examiner made at the hearing and finds that no
prejudicial error was committed. The rulings are
hereby affirmed. The Board has considered the Trial
Examiner's Decision, the exceptions and briefs, and
the entire record in this case, and hereby adopts the
findings, conclusions, and recommendations of the
Trial Examiner.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor
Relations Board hereby adopts as its Order the
Recommended Order of the Trial Examiner, and
hereby orders that the complaint herein be, and it
hereby is, dismissed in its entirety.
TRIAL EXAMINER'S DECISION
STATEMENT OF THE CASE
LEO F. LIGHTNER, Trial Examiner : This proceeding was!
heard before me in Athens , Tennessee , on December 4,
1968, and March 12, 1969, on the complaint of General
Counsel, as amended , and the answer , as amended, of
Ellary Lace Corp., herein called the Respondent.' The
amended complaint alleges violations of Section 8(a)(5)
and (1) and Section 2(6) and (7) of the Labor
Management Relations Act, 1947, as amended , 61 Stat.
136, herein called the Act . The parties waived oral
argument and briefs filed by the General Counsel,
Charging Party, and Respondent have been carefully
considered.
'A charge herein was filed on August 6 , 1968, and amended on August
26, 1968. A complaint was issued on October 23, 1968, and amended
during the hearing herein.
73
Upon the entire record, and from my observation of the
witness, ' I make the following:
FINDINGS AND CONCLUSIONS
1. THE BUSINESS OF THE RESPONDENT
Respondent is a Tennessee corporation, maintaining an
office and plant at Sweetwater, Tennessee, where it is
engaged in the manufacture and sale of lace products.
Respondent, on a projected basis over a period of 12
months, from its initial entry into business, on July 8,
1968, a representative period, will sell and ship products
valued in excess of $50,000 from its Sweetwater,
Tennessee, plant directly to points located outside the
State of Tennessee. The complaint alleges, the answer
denies,' and I find Respondent is an employer engaged in
commerce within the meaning of Section 2(6) and (7) of
the Act.4
II. THE LABOR ORGANIZATION INVOLVED
Amalgamated Lace Operatives of America, herein
referred to as the Union , is a labor organization within
the meaning of Section 2(5) of the Act.
III. THE ALLEGED UNFAIR LABOR PRACTICES
The Issue
The principal issue raised by the pleadings and litigated
at the hearing are whether Respondent is a "successor,"
within the meaning of Board decisions, to Tennessee
Valley Fabrics Corporation, herein referred to as TV, and,
by reason thereof, was required to bargain with the
Union, pursuant to the request of the latter, on and after
July 24, 1968. Respondent denies the commission of any
unfair labor practices.
Background
There is no dispute as to the background facts herein
set forth.
TV began operating a plant, at Sweetwater, Tennessee,
in 1950 , where it manufactured lace. The two categories of
lace are described as coarse gauge , which is manufactured
from cotton and cotton goods , and fine gauge , which is
manufactured from nylon . Subsequently , in April, 1965,
TV opened. a subsidiary plant at"Tellico Plains, Tennessee.
At all times , during the operation of these plants, the
officers of TV were: C. J. Mozur, president ; Herb Rubin,
vice president; Mrs. Mozur , secretary ; Carole Kustrup,
treasurer; and Marion Register , assistant treasurer. The
board of directors was comprised of those named with the
exception of Register.
On May 19, 1966 , United Steelworkers of America,
AFL-CIO, filed a Petition for Election , Case 10-RC-6712,
for the P & M unit , at TV 's Sweetwater plant . The unit
approximated 111 employees.' A consent election
agreement was entered into on June 10, 1966, and
approved by the Regional Director on June 13. A tally of
ballots, indicating a majority voted for the Union, on July
The bulk of the record is by stipulation of facts and exhibits . Only one
witness was called.
'While the original answer denied the commerce allegations , during the
hearing , by stipulation , Respondent admitted them.
'Siemons Mailing Service . 122 NLRB 81.
'While of no consequence , TV employed approximately 50 in the Tellico
plant , in P & M work.
178 NLRB No. I I
74 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
1, resulted in a certification being issued on July 12, 1966.
No objections were filed.
Inconclusive negotiations ensued and, in February 1967,
the Union commenced an economic strike. Picketing, at
the Sweetwater plant, has continued ever since.
Subsequently, after the employees voted to disaffiliate
from Local 6638, United Steelworkers of America, and to
affiliate with the Amalgamated Lace Operatives of
America, the Union filed a petition for amendment of
certification, on May 1, 1967. Pursuant to a notice to
show cause, the Employer filed a statement in opposition.
On May 29, 1967, the Regional Director granted the
requested amendment of certification, substituting the
Union herein, as the collective-bargaining representative.
No motion for reconsideration was filed. In November,
1967, TV notified the Union that it was ceasing
manufacture at the Sweetwater plant. TV ceased
manufacturing, at both plants, on or prior to December 1,
1967. Termination notices were issued to all striking and
non-striking employees, on December 1, except two
watchmen, noting "ceased operations."
Prior to December 1, 1967, TV owned and occupied the
entire plant at Sweetwater and no other company had
space or offices at that plant. Prior to December 1, 1967,
while TV had a subsidiary at Tellico Plains, the main
office for the two plants was at Sweetwater. On
approximately December 1, 1967, an organization
identified as Tellico Laces Corporation' leased the Tellico
Plains plant. It also leased a portion of the Sweetwater
plant, described as 2,250 sq. ft. in the machine shop, 550
sq. ft. in the drafting room, 2,500 sq. ft. in the warping
space, a total of 5,300 sq. ft., in a plant with a total of
approximately 50,000 sq. ft. Tellico vacated the warping
space in July, 1968, after Respondent herein commenced
operations, and the drafting space the following month,
but continues to lease the machine shop. Tellico produces
coarse gauge lace only.
Prior to December 1, 1967, TV had 19 coarse gauge
machines at Sweetwater, and 10 at Tellico.' TV also had
12 fine gauge lace machines, on December 1, 1967, 10 of
which were in Sweetwater and 2 in Tellico. While one of
the latter was, thereafter, converted to coarse gauge, both
are in storage at Sweetwater. Two lace mending, or
sewing machines, are also in storage at Sweetwater, in
space not rented by Respondent. However, it is inferred
they are used by Respondent, as explicated infra.
Tellico purchased inventory, raw material and supplies,
from TV, in a total amount approximating $135,000, over
a 7-month period.
It is undisputed that Tellico hired some of the former
TV employees, while the strike was continuing at
Sweetwater, including some who had been engaged in the
fine lace manufacture, for the manufacture of coarse lace
at Tellico. General Counsel asserted the work done by
Tellico, at Sweetwater, was work formerly performed by
'While the identity of the owners of Tellico Laces Corporation, herein
referred to as Tellico, is obscure , it is noted that the statement of Harold
M. Humphreys, one of the attorneys for Mozur, identified the organization
as being headed by a Mr Charles Hall, who is described as mayor of
Tellico Plains . Absent evidence to the contrary, I find it reasonable to infer
that the purchasers were strangers to the sellers, and that the sale was an
arm's length transaction.
'Since it is undisputed that TV presently has in storage, at Sweetwater,
coarse gauge machines , winders, bobbins, pattern cards and yarn, in space
not rented by Tellico or Respondent , it is inferred the coarse gauge
machines in storage number 19.
members of the Union' s bargaining unit . However, a
charge filed by the Union, in Case 10-CA-7203, asserting
that Tellico was the alter ego of TV was dismissed, by the
Regional Director, after investigation, and, upon appeal,
the dismissal was sustained. Another charge, alleging a
violation of Section 8(a)(5), by Tellico, identified as Case
10-CA-7319, resulted in a dismissal, by the Regional
Director. This action was likewise appealed, and the
dismissal was sustained.' It is inferred that the action of
the Regional Director in both cases preceded the advent of
Respondent herein, although at least one of the appeals
was not decided until October 18, 1968.
The demise of C. J. Mozur occurred on April 18, 1968.
The office of president of TV has since remained vacant.
Mozur and his wife were the sole stockholders of TV.
Mrs. Mozur and the Trenton National Bank of New
Jersey were named executors of the Mozur estate.
Respondent commenced operations, at the Sweetwater
plant, on July 8, 1968. Respondent is owned by its four
officers, who are identified as: Sheffield Novik, president,
Thomas Elliott, vice president; Benjamin Silverberg,
secretary; and Sal Lavore, treasurer. The four named are
the board of directors.
On July 1, 1968, Respondent leased, from TV, 7,800
sq. ft., in the south end of the building, 800 sq. ft. of the
office area, with provision for ingress and egress, and use
of restrooms, lunchroom, and parking areas. Respondent
also leased, with an option to purchase, 10 fine gauge
machines ' together with spares and two lace mending
machines . The leased portion, in the plant, is separated
from the balance of the plant by a black barrier sheet.
Respondent is engaged solely in the production of fine
gauge lace. It is undisputed that the owners and officers of
Respondent are strangers to the owners and officers of
TV.
In December, 1967, TV posted two 4 by 8 foot signs, at
its Sweetwater plant, advertising that its building and all
machinery were for sale, that a prospective purchaser
should contact C. J. Mozur, at Mozur Laces Corporation,
and listing the telephone number in New York City, New
York. These signs were removed on approximately the
same date that Respondent began its operation. TV also
listed its machinery for sale with dealers in used textile
machinery, as their sales agents.
TV formerly and Respondent, since its inception,
employed Mozur Laces Corporation as their exclusive
sales agent , or outlet.10
Marion H. Register, identified supra as assistant
treasurer of TV, was general manager or plant manager of
TV, at Sweetwater , commencing August, 1966, until the
plant closure . Karl Yena, manager of the TV plant at
Tellico, was Register ' s assistant , until December 1, 1967,
and thereafter became plant manager for Tellico. After
December 1, 1967, Register remained on TV's payroll, in
a caretaker capacity, at a salary of $25 a week . Between
the dates of December 1, 1967, and July 5, 1968, Register
also worked for Tellico as a consultant . Commencing July
8, 1968, Register became general manager or plant
'I find of no consequence General Counsel 's assertion that an 8(a)(3) and
(I) charge, involving the discharge of 18 employees , by TV , was dismissed
by the Regional Director , whose action was affirmed on appeal.
'Identified as machine Nos 21, 22, 25, 26, 27, 28, 29, 30, 31, and 32.
"While General Counsel asserted the same law firm represented TV and
Respondent , I fail to perceive how the identity or continuity of outside
counsel constitutes a factor or should be given any weight , as evidence of
probative value, in determining the existence or absence of a
"successorship ," under the principles enunciated by the Board No
misconduct, by counsel, is asserted
ELLARY LACE CORP. 75
manager for Respondent, at Sweetwater.
Since the plant closure, TV has continued the
employment of two watchmen, for the protection of the
unleased portions of its Sweetwater plant. When TV was
in operation, it had five office employees, consisting of
Register and four clerical employees, and did its
bookkeeping and had a teletype facility at Sweetwater.
After closure, TV retained its office at Sweetwater for the
limited purpose of back correspondence. Commencing
July 8, 1968, Respondent leased a portion of the office
space, and two desks. Respondent's bookkeeping is done
in New York City, but its payroll is paid at Sweetwater.
The office complement of Respondent consists of Register
and one secretary.
After the closure of the TV plant, either Register or
Allen, identified as the maintenance engineer for TV and,
later, for Respondent, were available to show the
premises. More recently, inquiries relative to leasing the
remainder of the plant are directed to the attorney, in
Chattanooga, who is a law partner of the attorney for the
Respondent herein.
TV shares office space in New York City with Mozur
Laces Corporation, sales agent for Respondent.
Respondent's office in New York City is at a different
location. When TV ceased operations there were no
unfilled customer orders. There is no contention that
Respondent filled any customer orders for TV. In July
and August 1968, Respondent purchased $30,583.73 worth
of yarn from TV. When Respondent attempted to make
its first purchase of yarn from a supplier, it found it had
not established its credit. Thereupon, TV purchased the
yarn and resold it to Respondent. Since that time
Respondent has purchased its own yarn.
Respondent manufactures the same fine gauge products
which TV formerly manufactured at Sweetwater. The
production methods used by Respondent have been
improved, over the production methods used by TV, at
Sweetwater, to achieve a better operation by employing
new techniques. TV operated both at Sweetwater and
Tellico, but all drafting and warping for both facilities was
performed at Sweetwater. After December 1, 1967, Tellico
hired those employees of TV who had been on TV's
payroll, in drafting and warping, and these employees
continued to be employed at Sweetwater, in the space
provided for drafting and warping under Tellico's lease
from TV, as it related to the Sweetwater plant, on a
month -to-month basis . Respondent uses no drafting
employees, but has a contractual arrangement whereby
Respondent's drafting is done by the employees of Tellico.
However, this work is limited to correcting patterns,
making work sheets and punching pattern cards.
Respondent receives patterns from its customers, together
with instructions. These are transmitted to Tellico, and
are transposed, by Tellico employees, on to IBM cards, or
pattern cards, by punching holes into the cards. These
cards , or patterns , are then sent to Respondent and placed
on the machines for manufacture. This is done subject to
a contract between Respondent and Tellico, as Tellico is
the only one in the area with the essential machines to
accomplish this work. No designing is done by
Respondent, nor by Tellico for Respondent.
When TV operated, at Sweetwater, its employees were
paid on an hourly base rate, plus an incentive. Respondent
operates on a similar pay schedule . However, while the
base rates of Respondent's employees are only slightly
higher than the last base rates for TV employees, the
incentive rates are substantially higher than TV's last
incentive rates, and result in approximately 25 percent
getting gross pay for fine gauged machine operators."
During the year of 1967, TV, at Sweetwater, had a fine
gauge lace production approximating 15 percent of its
total production, and its man hours requisite for that
production was in approximately the same percentage.
Prior to 1967 the percentage may have been as low as 10
percent, for both categories. While TV's Tellico plant
operated two 10-yard fine gauge machines, Respondent
has not operated these two machines.
At the time TV closed its plant, at Sweetwater, it was
employing approximately 45 to 50 employees, all but 8 of
whom were members of the bargaining unit, or
appropriate unit. It is reasonable to infer that these 37 to
42 employees were crossing the picket line, which existed
at that time. Twenty-three of the employees, employed at
the time of TV's plant closure, commenced working for
Tellico at Tellico Plains, and of these 19 were in the
appropriate unit. When Respondent commenced
operations, in July 1968, these 23 employees returned to
work at the Sweetwater plant, for Respondent.12
The Alleged Refusal to Bargain
Successorship
It is undisputed that on July 24, 1968, the Union, by its
attorney, by letter, advised Respondent that the Union
represented a majority of the P & M employees of TV,
having been designated as bargaining agent, as the result
of the Regional Director's action of May 29, 1967, supra.
The Union asserted that it considered Respondent to be a
successor, or alter ego, of TV and therefore obligated to
bargain with the Union for a collective-bargaining
agreement covering the designated employees of TV. The
letter concluded by requesting a meeting for the purpose
of negotiations. The Union's letter was received, by
Respondent, on July 27. Respondent made no response to
the demand. Respondent did not institute RM
"Respondent , in my view , correctly urges it did not participate in TV's
negotiations with the Union in June and November 1967, and had no
knowledge of a disagreement over the economic package, including
incentive pay.
General Counsel asserted the relevancy and materiality relate to his
amendment to par. 16, of the complaint , in which it is alleged that
Respondent ' s refusal to bargain converted the economic strike to an unfair
labor practice strike.
"The employees , prior to employment , successively filled out
applications for employment by Tellico, and later for employment by
Respondent.
General Manager Register related that he acquired employees for
Respondent , in part , by advising Yena, manager at Tellico, and Register's
former assistant, that Register desired to employ some of the employees
who had formerly worked at the Sweetwater plant and were at that time
working at the Tellico plant . Yena agreed to cooperate , by advising the
employees interested to make application at the Sweetwater plant . Register
related that as a result of the assistance of Yena "word got around town,"
in Sweetwater, and he received applications from former TV employees
who were not working at Tellico and also from individuals who had never
worked for TV or Tellico. Register acknowledged that no notice was
placed either at the plant, or in any newspaper, or transmitted to the
Union , that Respondent was seeking applications for employment . Register
acknowledged that Respondent did not take any steps to notify former TV
employees who had not crossed the picket line of the availability of
employment.
Register acknowledged that union representatives were stationing
themselves outside the plant , at the time of this hiring . In Register's words
they were not carrying picket signs, except spasmodically , but the pickets,
inferentially with picket signs, were sitting in cars outside the plant.
Register acknowledged that he contacted one or two individuals who had
never worked for TV or Tellico, who were subsequently employed.
76 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
proceedings, or request the Union to institute RC
proceedings. Respondent made no other representations to
the Union. Specifically, Respondent never communicated
to the Union its asserted doubt as to whether the Union
represented a majority of Respondent's employees.
The complaint alleges, and General Counsel and
Charging Party urge, as a unit appropriate for the
purposes of bargaining, within the meaning of Section 9(b)
of the Act, the following:
All production and maintenance employees, including
plant clerical employees and quality control employees
of Tennessee Valley Fabrics Corporation, employed at
its plant at Sweetwater, Tennessee, but excluding office
clerical employees, guards and supervisors as defined in
the Act.
In view of the prior action by the Regional Director, in
Case l0-RC-6712, supra, there is no doubt the unit
described was an appropriate unit while TV continued in
operation. The existence of the unit, as described, under
Respondent's operation is a different question, for reasons
explicated infra.
The existence of majority representation, by the Union,
is predicated upon the Board's presumption of continuing
majority, according to General Counsel and Charging
Party.
The complaint alleges that Respondent- purchased
property and equipment from TV; uses equipment
formerly used by TV; is engaged in substantially the same
business of manufacturing and selling lace products; and
employs the same employees and supervisors. The
evidence relative to these allegations appears as follows.
TV's production was 85 percent coarse gauge lace and
15 percent fine gauge lace in 1967, with a ratio of 90
percent and 10 percent, respectively, in prior years
Respondent produces only fine gauge lace.
TV used 19 coarse gauge machines at Sweetwater and
10 at Tellico, it also used 10 fine gauge machines at
Sweetwater and 2 at Tellico. Respondent uses the 10 fine
gauge machines at Sweetwater. In the Sweetwater plant,
TV had 50,000 sq. ft. of space, which may have included
office space for five employees. Respondent uses 7,800 sq.
ft. in the plant and 800 sq. ft. of office space, under its
lease. In addition, Respondent uses 30 sq. ft. in the
shipping department, and 40 sq. ft. in the mending area.
The size of the Tellico plant is obscure.
TV had warping, drafting, and machine-shop
employees. These functions were taken over by Tellico,
and the space used for them, in Sweetwater, was rented by
Tellico, on a month-to-month basis. Tellico discontinued
use of the warping and drafting space shortly after
Respondent commenced operations. Respondent does no
drafting or warping. Respondent receives patterns from
customers, which are transposed to IBM cards, by Tellico
for Respondent.
TV had a nonsupervisory complement of approximately
111 to 115 at the time of the election, July 1, 1966, at
Sweetwater. This number was reduced, by reason of the
strike, to between 37 and 42," unit employees, when TV
ceased operations, on December 1, 1967. TV had 50
nonsupervisory employees at Tellico. Respondent, on July
27, 1968, the date of the Union's request for bargaining,
had 17 nonsupervisory employees doing work formerly
performed by unit employees.1° Employee classifications,
to the extent used in the fine gauge lace operations,
remain the same
"While the parties stipulated this fact, Joint Exhibit (8) lists only 28 who
returned during the strike , and 5 hired as replacements.
No charge was filed asserting that Respondent engaged
in discriminatory conduct, violative of Section 8(a)(3), in
its selection and hiring of employees, in July 1968.15
TV had 12 supervisors, when it ceased operations,
including Register. Respondent has 7 supervisors,
including Register. Register, F. W. Lovin, Paul Stallcup,
and Mabel Kelley were supervisors at TV, and have been
supervisors for Respondent, since the promotion of Kelley,
supra. J. D. Thomas, Mildred French, and Betty Colquitt,
were unit employees for TV, and are supervisors for
Respondent. Thus, only 4 of 12, who were supervisors for
TV, are supervisors for Respondent.
Mozur Laces, whose New York office is at the same
location as TV's New York office, was and is the sole
sales outlet for the products of TV, Tellico, and
Respondent. Neither TV nor Respondent used or use a
trade name for their merchandise.
Contentions of the Parties and Concluding Findings
The Board has recently summarized some of the factors
to be considered in determining "successorship," in the
Will Coach case.16 The Board noted that it has long been
established that a change in ownership in an enterprise
does not automatically extinguish the rights of employees
or their representatives, or absolve the new owner from
any duty to recognize the union which represented its
predecessor's employees, or to comply with any of the
terms of a labor contract, covering those employees, since
it is the "employing industry" which the Act seeks to
regulate. N.L.R.B v. Colten, d/b/a Kiddie Kover Mfg.,
Co., 105 F.2d 179, 183 (C.A. 6). The predecessor's
obligations may devolve on the successor in certain
circumstances. Critical questions in determining the extent
of the new employer's obligations are whether there has
been a "substantial continuity of identity in the business
"Of these 17 4, E J Borden, Nelson, Haun, and Mabel Kelley, had
been supervisors when employed by TV, (Kelley was promoted to
supervisor in September 1968); 4, Boyd Clark, Carolyn Clark, H G
Borden, and Dixon, were new employees ; 1, Sara Ann Colquitt, was hired
by TV, as a replacement , during the strike ; 1, Walker Humphreys,
returned to work at TV during the strike , his name has a line drawn
through it, from which, I infer, he quit before TV ceased operations, 6,
James Tallent, James Filyaw, Edgar Raby , Pearl Jenkins, Georgia Gabrel,
and Sam Wiseman , returned to work at TV during the strike and were
employed when TV ceased operations , 1, Mary Gallant, inferentially went,
on strike and did not return to work prior to December 1, 1967 Thus, 9 of!
17, were former supervisors , new employees , or hired as a replacement!
during the strike In addition , I quit before TV ceased operations
All of these employees were hired on July 8, 15, 22, or 24, 1968. It is
reasonable to infer , from the undisputed assertions of Register , that most
or all of the former TV employees had been employed by Tellico, at
Tellico Plains, in the interim period or a substantial portion of it
"Some 24 other individuals , including 10 who had worked for TV, filed
applications for employment by Respondent, and were not employed
On May 7, 1968, Charging Party, by letter, asserted, with concurrence
of counsel for General Counsel and Respondent , that the 24 applications
were submitted between the dates of June 12 and July 17, 1968, that none
"of the individual applicants" came to the plant or crossed the picket line
during the period covered by the dates of their applications; and
Respondent ' s plant did not open for operations until July 8, 1968
Since those working on and after July 8, 1968, did cross a picket line,
according to undisputed evidence, I must infer the amendment to the
stipulation , which relates to a Joint Exhibit listing applicants who were not
employed by Respondent , is confined to that group, and does not
encompass applicants who were employed
1 bWill Coach Lines, Inc., 175 NLRB No. 87
I am not unmindful of the fact that the Board has recently conducted
extensive oral argument in a series of cases involving successorship. The
facts in the cases under consideration appear distinguishable from the facts
in the within case.
ELLARY LACE CORP.
enterprise" or "the enterprise remains substantially the
same," after the change in ownership. John Wiley &
Sons, Inc. v. Livingston, 376 U.S. 543; Cruse Motors,
Inc., 105 NLRB 242, 247. The basic question has also
been described as "whether Respondent continued
essentially the same operation, with substantially the same
employee unit " Maintenance , Incorporated, 148
NLRB 1299, 1301, Glenn Goulding, d/b/a Fed Mart,
165 NLRB No. 22. In attempting to answer these critical
questions and determine whether a new employer is a
"successor employer" obligated to bargain with the union
which represented his predecessor's employees, the Board
and the courts consider many factors. What combination
of factors is controlling is not always easy to determine,
but prime considerations are the continuation of the
business without substantial interruption, in such a form
as to make the bargaining unit readily discernible, with
some or all of the former employees employed at their old
jobs. Overnight Transportation Company v. N.L.R.B.,
372, F.2d 765 (C.A. 4); Randolph Rubber Company, Inc,
152 NLRB 496; Firchau Logging Company, Inc., 126
NLRB 1215, 122.
In the Thomas Cadillac case" the Board found an
absence of "successorship" where two separate purchasers
began separate businesses with only a small fraction of the
predecessor's employees. The Board found merit in
Respondent's contention that they were new and
independent business entities, markedly different from the
former operation, which encompassed a multibranch unit.
The Board found that neither of the new employers
employed a significant number of the predecessor's
employees and that the supervisory hierarchy bears little
resemblence to that formerly existing.
General Counsel, in his brief, relies on cases in which
the Board found a successorship by reason of continuity of
the "employing industry." These cases are inapposite.1e
Charging Party, in urging a finding of successorship,
relies on Maintenance, Inc., supra, Randolph Rubber Co.,
152 NLRB 496, and Die Supply Corp., 160 NLRB 1326.
I find these cases inapposite."
"Thomas Cadillac , Inc, 170 NLRB No 92
"E.g. Johnson Ready-Mix Co., 142 NLRB 437 ( Board certification I
week before bankruptcy of predecessor, 3-day break in operations,
successor employed majority of predecessor ' s unit, and non-unit,
employees, in same classifications , successor continued same business,
serving same customers, no substantial changes in the operating entity.);
Maintenance , Inc. supra (90 percent of work force were employed by
predecessor , substantially identical operations , servicing the same facilities
for the same customer in substantially the same manner at the same work
situs, "The critical question is not whether Respondent succeeded to
[predecessor) corporate identity or physical assets, but whether Respondent
continued essentially the same operation , with substantially the same
employee unit whose duly certified bargaining representative was entitled
to statutory recognition at the time Respondent took over " ); Northwest
Glove Co , 74 NLRB 1697 (Hiatus of 1 month , while partnership
dissolved , succeeded by one partner as corporate owner; same plant,
equipment, and product ; employees recalled , as needed , according to
seniority .); Downtown Bakery Corp, 139 NLRB 1352 (Successor
employed all employees and supervisors of predecessor , predecessor's
business continued at same location , handling same products, no doubt of
union majority raised in good faith.)
"See preceding footnote re Maintenance , Inc. In Randolph Rubber
respondent : by purchase , acquired all the physical assets of predecessor,
and hired all of predecessor ' s employees , later recalling some from layoff;
it continued manufacture of the same product , using the same machinery,
it also employed some of predecessor's supervisory staff In addition, the
Board found the union had established its majority by obtaining new
checkoff authorization cards Id at 499 Die Supply was primarily a
matter involving plant relocation.
77
General Counsel urges that the hiatus, between TV's
closure and Respondent's commencement is insufficient to
destroy the continuity of the "employing industry." Cases
cited in support of this contention are inapposite.20
Charging Party urges: " ... the time interval did not
affect any of the factors required to establish the
substantial continuation of a successor employer status."
The factors are enumerated as place, equipment,
supervisory staff, employees, work classifications, pay
schedules, product, operation, suppliers, and sales outlet.
Charging Party asserts they all remained the same, after
Respondent commenced operations. This premise is
contrary to the undisputed facts set forth supra.
General Counsel also urges that Respondent
discriminatorily hired only former employees of the
predecessor who had not struck. No allegation of
discriminatory hiring appears in the complaint. No such
contention was litigated herein." I find no merit in
General Counsel's assertion that Register and Novik, by
reason of picketing, were aware that "the strikers
continued (to) claim" their jobs. Likewise, since it was
neither alleged, nor litigated, as a violation, I find no
merit in the assertion of General Counsel that Respondent
unilaterally raised wages far in excess of what TV had
offered the Union during negotiations.22
Charging Party asserts it represented a majority in the
bargaining unit, when demand for bargaining was made,
on July 27, 1968. Charging Party correctly cites the
Board's well-established presumption of continued
majority during the certification year, which expired
herein in July 1967. It is also clear that this presumption
is rebuttable thereafter. Celanese Corporation of America,
95 NLRB 664, 672-673. 23 The undisputed facts are that
when TV ceased operations some of the employees
obtained employment at Tellico, having made application
therefor. When Respondent commenced operations, 7
months later, it obtained applications from former TV
employees and others, and selected employees on a
nondiscriminatory basis insofar as this record reveals. I
have found, supra fn. 14, that 8 of 17 employees were
"E.g. John Wiley & Sons, Inc. v Livingston , 376 U.S. 543, 548, treats
with the duty of a successor , where two corporations are merged, to
arbitrate under an existing collective-bargaining agreement between a
union and the former employer; Chemrock Corporation , 151 NLRB 1074,
treats with the efforts of a successor to replace an existing
collective-bargaining agreement with individual bargaining . Neither case
involves the matter of hiatus
"I believe General Counsel , unfortunately and inadvertently,
misinterprets a statement of Register . He asserts in his brief, page 17, that
"Register admitted contacting a few people who were never separated from
the TV payroll (tr. 67) " The statement actually appears at it. 62.
However , Joint Stipulation 10 includes. TV retains two watchmen on its
payroll to watch its portion of the Sweetwater plant facility. (tr. 94) Joint
Stipulation 19 is. In December 1967, TV sent or otherwise distributed
termination notices to all employees of TV' s striking and non-striking
employees with the exception of the two watchmen who continued in the
employ of TV Each termination slip which was dated December 1, 1967,
read ceased operations . (tr. 102) Since this stipulation followed the
appearance of Register , I must infer those "never separated ," who are
unidentified , were supervisory and not unit employees.
"For the reasons stated , I find it unnecessary to treat with Charging
Party's similar assertions, in its brief. I am unable to infer , or find, from
the evidence that Respondent "went out of its way to avoid employing
union supporters by making no offer of employment to the union workers
and keeping from them knowledge of job opportunities ." Rand McNally,
Standard Highway Mileage Guide , reports Tellico Plains population as
794, Sweetwater as 4,145. Only 50 employees appear to have been the
complement at Tellico. Cf Wiese Plow Welding Co , Inc, 123 NLRB 616,
Small Plant Doctrine
"The Board held, inter alia . Competent evidence may be introduced to
demonstrate that, in fact , the union did not represent a majority of the
78 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
former supervisors and new employees, and one was hired,
as a replacement during the strike. I am unable to find an
absence of a basis for a good-faith doubt by Respondent
under these circumstances."
I find no evidence of probative value which would
support a finding that the strike, which started on
February 20, 1967, was prolonged by Respondent's
unlawful refusal to bargain on and after July 27, 1968, as
alleged in the amendment to paragraph 16 of the
complaint. I will, accordingly, recommend dismissal of
those allegations.
Respondent correctly urges that the Board has held that
to find successorship supporting a bargaining obligation,
the totality of the circumstances must warrant a finding
that the purchase-sale transaction was merely a change in
the ownership of an existing and continuing business
operation. Northwest Galvanizing Co., 168 NLRB No. 6
Respondent correctly calls attention to the variations
and modifications between the former operation of TV
and the present operation of Respondent, as well as the
substantial diminution in plant space, machines, work
force, supervisory staff, and total production in dollar
value.
I agree, for reasons explicated by General Counsel, in
his brief, that Respondent is foreclosed, by Board
Regulations, from litigating the question of the propriety
of the Regional Director granting an amended
certification to the Union herein, on May 29, 1967 25
General Counsel and Charging Party have proceeded
on an erroneous premise set forth as allegations in
paragraph 4 of the complaint that, inter alia: Respondent
is engaging in substantially the same business, as was
formerly conducted by TV, actually fine lace production,
in dollar volume, was only 10 percent of TV's total
business, except 1967 when it was 15 percent, Respondent
employs substantially the same employees and supervisors,
actually TV employed 1 l 1 to 115 at Sweetwater and 50 at
Tellico, prior to the strike, and 37 to 42 unit employees at
Sweetwater when it ceased operations, Respondent
employed 17 nonsupervisory employees on the date of the
demand for recognition, the supervisory staff of 12 at TV
was reduced to 7 by Respondent, with substantial changes
in identity.
General Counsel and Charging Party inaccurately
assert , by reliance on cases involving "substantial
continuity" that Respondent is a successor of TV, by
reason of the 66 employing industry " doctrine of the
Board No case is cited where, as here , there was a
complete and final closing of business , by TV, including
discharge and termination of all employees , except a
caretaker and two watchmen , and a hiatus of 7 months.
Thereafter, a new operation was commenced by an
arm's-length purchaser , who: confined the space used to
approximately one-sixth of the plant area, machines which
produced only 10 percent of predecessor ' s business, in
dollar volume ; did no warping , drafting , pattern making,
or machine repair, formerly performed by TV;
reemployed , as supervisors , only 4 of 12 former
supervisors , and only 17 employees as compared to the
former complement of I 1 1-115.
On the basis of the entire record , for the reasons set
forth , I find Respondent is not a successor to Tennessee
Valley Fabrics Corporation , and was not , as a successor,
under a duty to bargain with the Union , on and after July
27, 1968, and did not by reason of its failure to bargain
engage in conduct violative of the provisions of Section
8(a)(5) and (1) of the Act.26
Upon the foregoing findings of fact and upon the entire
record in the case , I make the following:
Conclusions of Law
1. Respondent is an employer within the meaning of
Section 2(2) of the Act and is engaged in commerce
within the meaning of Section 2(6) and (7) of the Act.
2. Amalgamated Lace Operatives of America is a labor
organization within the meaning of Section 2(5) of the
Act.
3. Respondent did not unlawfully refuse to bargain, on
and after July 27, 1968, and did not, thereby, convert the
economic strike, which commenced February 20, 1967,
into an unfair labor practice strike.
4. Respondent is not a successor to Tennessee Valley
Fabrics Corporation and has not engaged in unfair labor
practices within the meaning of Section 8(a)(5) and (1) of
the Act, as alleged in the complaint.
employees at the time of the alleged refusal to bargain . A direct corollary
of this proposition is that after a certificate is a year old , as in cases where
there is no certificate , the employer can, without violating the Act, refuse
to bargain with a union on the ground that it doubts the union ' s majority,
provided that the doubt is in good faith td. at 672
The Board explicated its meaning of an employer questioning a union's
majority in good faith, as It can only be answered in the light of the
totality of all the circumstances involved in a particular case But among
such circumstances , two factors would seem to be essential prerequisites to
any finding that the employer raised the majority issue in good faith in
cases in which a union has been certified There must , first of all, have
been some reasonable ground for believing that the union had lost its
majority status since its certification . And, secondly, the majority issue
must not have been raised by the employer in a context of illegal antiunion
activities, or other conduct by the employer aimed at causing disaffection
from the union or indicating that in raising the majority issue the employer
was merely seeking to gain time in which to undermine the union Id , at
673
RECOMMENDED ORDER
Upon the basis of the above findings of fact and
conclusions of law, I recommend that the complaint be
dismissed in its entirety.
There is not a scintilla of evidence herein of Respondent engaging in
illegal antiunion activity, or seeking overtly or covertly to undermine the
Union
24Cf Tallakson Ford, Inc, 171 NLRB No 67
21N.L R B Rules and Regulations, Series 8, as amended, Sec 102 67(f),
provides The parties may , at any time , waive their right to request review.
Failure to request review shall preclude such parties from relitigating, in
any related subsequent unfair labor practice proceeding , any issue which
was, or could have been , raised in the representation proceeding
"Cf Lori-Ann of Miami, Inc, 137 NLRB 1099, 1108, 'ett seq.