Eltec Corp.

National Labor Relations Board - Board Decisions

Nov 19, 1987

286 N.L.R.B. 890 (N.L.R.B. 1987)

890 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
Plymouth Stamping Division , Eltec Corporation and
Local 985, United Automobile , Aerospace and
Agricultural Implement Workers of America
(UAW). Cases 7-CA-17416 and 7-CA-19179
19 November 1987
DECISION AND ORDER
BY CHAIRMAN DOTSON AND MEMBERS
JOHANSEN AND STEPHENS
On 3 December 1982 Administrative Law Judge
Elbert D. Gadsden issued the attached decision.
The Respondent filed exceptions and a supporting
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 the
record in light of the exceptions and brief and has
decided to affirm the judge's rulings, findings,' and
conclusions only to the extent consistent with this
Decision and Order.
1. The judge found that the Respondent violated
Section 8(a)(5) and (1) of the Act by failing to give
the Union adequate notice and a meaningful oppor-
tunity to bargain over its decision to transfer and
subcontract its parts assembly operation. Contrary
to our dissenting colleague, and for reasons set
forth below, we agree with the judge that the Re-
spondent violated the Act as alleged.2
In Otis Elevator Co., 269 NLRB 891 (1984), de-
cided under the guidance of the Supreme Court's
opinion in First National Maintenance Corp. v.
NLRB, 452 U.S. 666 (1981), the Board, in the plu-
rality opinion of Chairman Dotson and Member
Hunter, stated that the critical factor in determin-
ing whether a management decision is subject to
mandatory bargaining under Section 8(d) is "the es-
sence of the decision itself, i.e., whether it turns
upon a change in the nature or direction of the
business , or turns upon labor cost; not its effect on
employees nor a union's ability to offer alterna-
tives." Id. at 892. We find that the decision at issue
here was subject to mandatory bargaining under
any of the views expressed in Otis Elevator, includ-
ing under the analysis set forth in the plurality
opinion. We base this finding on our conclusion
that the decision turned upon labor costs within the
i The Respondent has excepted to some of the ,fudge's credibility find-
ings The Board 's established policy is not to overrule an administrative
law judge's credibility resolutions unless the clear preponderance of all
the relevant evidence convinces us that they are incorrect Standard Dry
Wall Products, 91 NLRB 544 (1950), enfd 188 F 2d 362 (3d Cir 1951)
We have carefully examined the record and find no basis for reversing
the findings
2 The consolidated complaint contains no allegations that the Respond-
ent unlawfully failed or refused to bargain with the Union concerning the
effects of its decision to subcontract its parts assembly operation
meaning of Otis Elevator, and not, as argued by our
dissenting colleague, upon a fundamental change in
the nature and direction of the Respondent's busi-
ness. 3
The Respondent engages in the stamping, sale,
and distribution of automotive parts and related
products in Plymouth, Michigan. Since about 1960,
the Union has been the exclusive collective-bar-
gaining representative of the Respondent's produc-
tion and maintenance employees. The parties' most
recent collective-bargaining agreement was effec-
tive from 1 September 1977 to 1 September 1980.
Commencing about 1977 the Respondent experi-
enced serious financial problems. As a result, in
August 1979, the Respondent sought midterm eco-
nomic concessions involving wages, COLA, and
health benefits as part of its "Company Economic
Survival Proposals." When the parties failed to
reach an agreement on the requested concessions,
the Company withheld the COLA due 10 Septem-
ber 1979 and put a "wage moratorium" into effect.
The Union immediately grieved the matter and
won relief from the Respondent's action.
On 11 February 19804 the Respondent met with
the Union's bargaining committee and gave written
notice that, due to business and economic reasons,
it planned to terminate its parts assembly operation
on Friday, 15 February. The parts assembly divi-
sion constituted one of the Respondent's two major
operations, employing about 25 of approximately
75 total employees. The notice further provided
that employees assigned to the affected division
would be transferred or laid off according to the
collective-bargaining agreement. The notice con-
cluded with the statement, "We are prepared to
discuss this matter with you further." On learning
of the Respondent's plans, the Union requested a
meeting with the Company and its attorney, which
meeting the Company advised could not be sched-
uled until 14 February.
During the meeting held on 14 February, the Re-
spondent informed the Union that the layoffs
would be plantwide, based on seniority. Either
during that meeting or immediately afterwards, the
Respondent gave the union representatives a
"Notice" listing 24 employees who were to be
placed "on indefinite layoff' at the end of their 15
February shift. The notice stated that the layoff
was "due to the termination of assembly operations
3 The judge referred to the Respondent's actions interchangeably as a
decision to transfer and subcontract its parts assembly operation and as a
decision to terminate that operation As the Board emphasized in Otis El-
evator, the appellation attached to a decision is not determinative con-
cerning whether an obligation to bargain exists Accordingly, for the pur-
pose of consistency, we will refer to the Respondent's decision as one to
subcontract its parts assembly operation
4 All dates refer to 1980 unless otherwise indicated
286 NLRB No. 85
ELTEC CORP. 891
at Plymouth Stamping , effective at the end of the
afternoon shift on Friday, February 15, 1980." At
the 14 February meeting , Vice President Taylor
explained that the Company's economic problems
resulted from a 25-percent decline in sales, non-
competitive wage rates and benefits for parts as-
sembly employees, burdensome Michigan business
taxes, and high workmen's compensation and un-
employment taxes. When the Union asked what
could be done to keep the parts assembly jobs in-
plant, the Respondent indicated that it would need
substantial wage reductions, a freeze on COLA's,
reduced health benefits, a decrease in paid holi-
days, changes in the grievance procedure, and
relief from various work rules. The Respondent in-
sisted on a response regarding the economic con-
cessions by 15 February. The Union argued that
that was not possible as the parties had discussed
concessions in August 1979 and the Respondent
had never opened its books. When the Union ques-
tioned whether the decision regarding, the move
was final, the Respondent stated its decision was
not irreversible but maintained that, for economic
reasons, it needed an answer by the next morning.
The Union requested a delay until 18 February (the
following Monday) to allow its president to return
to the area and to hold a scheduled membership
meeting . After such consultations, the Union stated
it would get back to the Respondent's representa-
tives.
In a letter dated 14 February, received by the
Respondent on 20 February, the Union requested
information regarding the specifics of the Respond-
ent's decision. In the meantime, on 15 February,
the Respondent's attorney, not having heard from
the Union, advised the Respondent to proceed with
the move. The parts assembly equipment was
moved on 16 and 17 February to Stamtec Corpora-
tion in Ohio, 90 miles away. The move cost
$14,000.
When asked at the hearing what plans the Re-
spondent made prior to February 1980 regarding
its parts assembly operation, Taylor responded that,
after deciding to subcontract the work, the Re-
spondent commenced negotiations for a building
space lease in Wauseon, Ohio„ in late 1979 and
early 1980. In mid-January, Stamtec was incorpo-
rated and a lease agreement was consummated.5
Advertisements for jobs at the new location ap-
peared 12 February. Taylor further testified that,
prior to the equipment transfer, a 2-week "stock.
S Taylor was a 38-percent stockholder of Stamtec Although Taylor
had no ownership interest in the Respondent, the record shows that that
corporation was owned by Taylor's father The parties stipulated at the
hearing that the Respondent and Stamtec were separate ,and distinct com-
panies There is no evidence that Stamtec was formed for any purpose
other than to perform parts assembly work
pile" of completed parts was manufactured to
assure continuity of supply to the Respondent's
customers while Stamtec geared up for production.
Despite the prior arrangements, the Respondent's
11 March response to the Union's 14 February
letter stated that the Company's plans did not
become final until 15 February and that finalization
was prompted by "outside commitments" and the
fact that the "Company had not received any af-
firmative response from the Union pursuant to the
meetings on Monday, February 11 and Thursday,
February 14." The letter further stated that al-
though the Company was proceeding with its
plans, its decision was not "finalized" in the sense
that it was irreversible nor in the sense that the
Company was unprepared to consider other alter-
natives. In this regard, the letter continued, the
"Company has been fully prepared to discuss this
matter with the Union, and remains available to do
so." In addition, the letter reiterated the reasons for
the removal of the parts assembly operation. Re-
garding labor costs, the letter stated: "The assem-
bly operations are labor intensive and the costs
(wages/benefits) associated with supporting this
labor group have made the Company non-competi-
tive in bidding on existing and future projects
. . . . [T]he Company has attempted to alleviate
this problem through automation in the past."
During the hearing, the parties entered into a
stipulation stating in part that, "the parts assembly
operations performed at Plymouth Stamping . . .
and . . . terminated on February 16, 1980, have
been contracted out to the Stamtec Corporation."
On 1 March the Respondent and Stamtec formally
entered into an "Equipment Lease and Option to
Purchase" agreement under which Stamtec leased
from the Respondent the equipment transferred to
its location in February. According to the agree-
ment: "It is understood between the parties that the
equipment subject to this lease is intended to be
used by Stamtec in the production of stampings
and other parts for Eltec at Stamtec's production
facilities . . . under subcontract for customers for
Eltec. . . ." In the event of default by Stamtec, the
Respondent retained the right to terminate the
lease and repossess its equipment. The Respondent
acknowledged that it retained the purchase orders
for the parts assembly work to monitor quality
control and retain customers. The agreement also
provided that as of 1 July, Stamtec had the option
to purchase the leased equipment.
Analyzing the above facts in light of the plurali-
ty opinion in Otis Elevator, we find that the Gener-
al Counsel established that the Respondent's deci-
sion turned on labor costs. Thus, the first an-
nouncement of the Respondent's plans to subcon-
892 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
tract its parts assembly operation came on the heels
of unsuccessful attempts to obtain economic con-
cessions from the Union. Further, the Respondent
admitted when it met with the Union on 14 Febru-
ary that its decision was based on specific enumer-
ated factors, including labor costs. The level of im-
portance the Respondent attached to labor costs
was made clear at that meeting when the Respond-
ent stated that the Union's agreement to substantial
wage reductions, a freeze on COLA's, reduced
health benefits, a decrease in paid holidays, changes
in the grievance procedure, and relief from various
existing work rules would keep the parts assembly
jobs in the plant.6 Further, even after moving the
parts assembly equipment, the Respondent in-
formed the Union on several occasions preceding
the sale of the equipment on 1 July that the deci-
sion was neither final nor irreversible, that it was
prepared to discuss alternatives, and that it had the
ability to secure the return of the equipment. These
facts lead us to conclude that had the Respondent
obtained the specific cost concessions it desired, it
would not have transferred its parts assembly oper-
ation despite the considerable arrangements previ-
ously made to effect the transfer. We find this con-
clusion supported by the Respondent's statements
on 14 February and thereafter that the move was
not irreversible, by the temporary nature of the ini-
tial arrangement, and by the repeated assertions
that the equipment could be returned. Further, al-
though the Respondent also cited economic factors
unrelated to labor costs as reasons for its actions, it
in essence conceded that it could cope with these
adverse factors if concessions were granted. This
case is therefore distinguishable from Inland Steel
Container Co., 275 NLRB 929, 936-937 (1985),
enfd. sub nom. Steelworkers Local 2179 v. NLRB,
822 F.2d 559 (5th Cir. 1987), where the employer's
plant relocation decision turned primarily on the
need to replace an obsolete and deteriorating plant
facility to solve serious quality control problems
that were injuring the employer's business.
Consistent with our ruling above, we disagree
with our dissenting colleague's position that the
Respondent's action represented a "significant
B Our dissenting colleague attempts to justify his failure to attach any
significance to the 14 February meeting by finding that "neither the exact
contents of the parties' exchanges nor the precise nature of the conces-
sions is entirely clear From all accounts , concessions appear to have
been discussed only in vague, general terms " Nevertheless, no matter
how general the parties' discussion , it cannot be denied that the conces-
sions demanded by the Respondent to keep the parts assembly operation
in-plant fell squarely within the category of labor costs
We also note that the Respondent did not merely state , without any
commitment , that it would consider the Union's proposals, but explicitly
affirmed that appropriate bargaining concessions would result in the parts
assembly operations being retained Any ambiguity regarding the full
scope of such concessionary bargaining is inadequate to rebut the Gener-
al Counsel's showing that the decision in fact "turned upon" labor costs
change in operations" so as to fall outside the
scope of mandatory bargaining. Clearly, inherent in
any subcontracting situation are "changes," the
most common of which is that the original employ-
ees might no longer perform the subject work.
However, the Board recognized in Otis Elevator
that the act of subcontracting does not automatical-
ly signify a change in the nature or direction of an
enterprise that exempts the decision from mandato-
ry bargaining . Thus, we find here that from 15
February until the parts assembly equipment was
sold on 1 July,7 the Respondent subcontracted the
subject work in a manner that did not significantly
alter the Respondent's business. Both before and
after 15 February the Respondent engaged in the
business of performing parts assembly work for its
customers. In fact, a stockpile of assembled goods
was prepared specifically to avoid a break in conti-
nuity to existing customers. Although the parts as-
sembly work was performed by Stamtec employ-
ees, the Respondent retained both its customers'
purchase orders and the right of quality control.
Further, by retaining ownership rights to the
equipment leased to Stamtec, the Respondent was
not required to engage in a substantial capital re-
structuring. As above, we note also the temporary
nature of the initial arrangement between the Re-
spondent and Stamtec and the repeated representa-
tions that the equipment could be returned.
Accordingly, we find that the Respondent's deci-
sion to subcontract its parts assembly operation
turned upon labor costs within the meaning of the
plurality opinion in Otis Elevator. Indeed, as stated
above, we find that the Respondent's decision was
subject to mandatory bargaining under any of the
views expressed in that case. 8 Thus, on the basis of
r This limitation on the duration of the unlawful conduct is explained
below in the amended remedy section
9 In Otis Elevator, former Member Dennis established a two-step test
for use in determining whether a certain management decision is a man-
datory subject of bargaining. "[T]he General Counsel must prove (1) that
a factor over which the union has control was significant consideration in
the employer's decision, and (2) that the benefit for the collective-bar-
gaining process outweighs the burden on the business" The burden ele-
ments to be considered in applying the second part of the test include'
extent of capital commitment, extent of changes in operations, and the
need for speed, flexibility, or confidentiality In the instant case, the facts
clearly show that labor costs (a factor over which the Union has control)
were a significant factor in the Respondent's decision Addressing the
burden elements, the facts establish that the Respondent's decision to sub-
contract did not involve a substantial capital commitment and did not
depend on a need for confidentiality Concerning flexibility, the Respond-
ent remained willing, even after incurring some $14,000 in moving ex-
penses, to consider alternatives to the subcontracting plan Further, the
Respondent's postmove statements that the decision was not irreversible
show that, while the Respondent sought a rapid response to its conces-
sion proposals on 14 February, the factor of speed was not an obstacle to
resolution through bargaining Accordingly, under former Member
Dennis' view, it would appear that the benefit derived from the bargain-
ing process in this case outweighed the burden bargaining would have
imposed on the Respondent in the operation of its business
Continued
ELTEC CORP. 893
this analysis of the facts we affirm the judge's con-
clusion that the Respondent violated Section
8(a)(5) and (1) of the Act by failing to afford the
Union a reasonable opportunity to bargain about
the decision affecting its parts assembly division.9
2. The judge found that since about 15 Decem-
ber the Respondent engaged in surface bargaining
in violation of Section 8(a)(5) and (1) of the Act,
that the Respondent's failure to bargain in good
faith converted the economic strike commenced by
the Union on 9 September into an unfair labor
practice strike, and that the strikers were entitled
to full reinstatement rights. We find merit in the
Respondent's exceptions to these findings and, for
the following reasons, reverse the judge's conclu-
sions.1 ° The pertinent facts are set forth below.
On 15 August the parties commenced negotia-
tions for a new collective-bargaining agreement to
succeed the one due to expire 1 September. Be-
tween 15 August and 12 March 1981, the parties
conducted approximately 24 bargaining sessions,
eight of which were attended by a Federal media-
tor.1 1 During this period the Respondent presented
Former Member Zimmerman stated in Otis Elevator that he would find
bargaining over an employer's decision to relocate work to be mandatory
when the decision is amenable to resolution through collective bargain-
ing He further stated that a decision may be amenable to resolution
through bargaining where the decision is related to overall enterprise
costs not limited specifically to labor costs Here, the Respondent's re-
peated attempts to obtain substantial concessions demonstrate that the
Union could reasonably have been expected to respond to the Respond-
ent's concerns and alter the Respondent 's decision
e We find no merit in the Respondent 's cllaim that it in fact offered the
Union a reasonable opportunity to bargain over this decision Its 24-hour
ultimatum , delivered on 14 February, that the move would go forward
unless the Union was willing to agree to "substantial " cuts in wages and
benefits was not a reasonable offer to bargain, even assuming , as the Re-
spondent contends , that it was not asking that the Union give it specific
final figures on 15 February As noted, the Union's president and princi-
pal bargaining representative was out of town, and the other union repre-
sentatives not unreasonably wished to consult him and to obtain some
more information from the Respondent about the need for such substan-
tial concessions at that point The record makes clear that the Respond-
ent was itself in possession of facts that would have made it possible to
give the Union earlier notice of its intent to subcontract the parts assem-
bly operation
The Respondent 's offers to bargain about the decision after it had
moved out the machinery and laid off employees similarly do not satisfy
the bargaining obligation See Metropolitan Teletronies Corp, 279 NLRB
957, 958-959 ( 1986), enfd per cunam 819 F 2d 1130 (2d Cir 1987) (offer
to bargain over effects of a decision not meaningful if made after the deci-
sion has been implemented ) If the Respondent were correct in its argu-
ment that its postimplementation offers to bargain were sufficient because
the action in question was "reversible ," then employers would be free to
cut wages and bargain afterwards on the theory that they might agree to
restore the wage cuts after bargaining We know of no authority for the
proposition that such after-the-fact bargaining satisfies the statutory bar-
gaining obligation
10 The consolidated complaint alleges that the Respondent 's bad-faith
bargaining , commencing about 15 December, converted the employee's
strike into an unfair labor practice strike Accordingly, because it was
neither alleged nor litigated , we find it unnecessary to determine whether
the Respondent 's earlier unlawful failure to bargain in , good faith regard-
ing its decision to transfer and subcontract its parts assembly work im-
pacted on the employees ' strike
I I The Federal mediator attended the sessions held on 23 September,
21 and 27 October, 25 November, and 4 December 1980, and 15 January,
six written proposals whereas the Union presented
two.' 2 On 8 September the parties executed a doc-
ument entitled "Memorandum of Agreement (Non-
economic Items)," confirming their agreement on
such matters as temporary transfers, attendance
control, and employee files, and indicating that "all
other non-economic issues are resolved." 13 Despite
this agreement, the union membership voted that
evening to reject the Respondent's latest proposal
and to commence strike activities the following
day.
The judge found that the parties engaged in hard
bargaining between 28 August and 4 December,
but that after 15 December the Respondent en-
gaged in surface bargaining without a good-faith
intent to reach agreement. The judge concluded
that the Respondent reneged on items previously
agreed to, constantly changed its bargaining pro-
posals without offering substantiated reasons or jus-
tification, offered no probative financial data to
support its claims of deteriorating business condi-
tions, and failed to make any significant concession
(with the exception of a qualified concession re-
garding amnesty for striking employees). Our
review of the record reveals insufficient evidence
to support the judge's findings.
We note at the outset that Section 8(d) of the
Act requires an employer to meet at reasonable
times with the representative of its employees and
confer in good faith with respect to wages, hours,
and other terms and conditions of employment.
However, as the Board has frequently stated, "[I]t
must be remembered that Section 8(d) does not
`compel either party to agree to a proposal or re-
quire the making of a concession . . . .' Thus, the
Board does not, `either directly or indirectly,
compel concessions or otherwise sit in judgment
upon the substantive terms of collective bargaining
agreements,"' 14 absent unusual circumstances not
present here.' 5 In determining whether a party has
negotiated in good faith, it is necessary to scruti-
nize the totality of its conduct. Regarding a party's
conduct during negotiations accompanied by strike
26 February, and 4 March 1981 The latter two sessions were also attend-
ed by a state mediator
12 The Respondent's proposals were dated 15 August, 25 August, 5
September , 5 November, and 15 December 1980 and 12 March 1981 The
union proposals were presented 15 August 1980 and 26 February 1981
13 By 4 September the Respondent had withdrawn several of its ongi-
nal proposals including those seeking a 4-day workweek and changes in
layoff and overtime equalization procedures
14 Chevron Chemical Co, 261 NLRB 44, 46 (1982), citing NLRB v.
American National Insurance Co, 343 U S 395, 404 (1952), see also Barry-
Wehmiller Co., 271 NLRB 471, 472 (1984)
is Chevron, supra at 46 and fns 6, 10 Chairman Dotson would not in
any event attempt to evaluate the reasonableness of a party's bargaining
proposals Allbritton Communications, 271 NLRB 201, 205 fn 13 (1984),
enfd 766 F 2d 812 (3d Cir 1985), cert denied 474 U S 1081 ( 1986).
Accord Struthers Wells Corp v NLRB, 721 F 2d 465, 470 (3d Or 1983)
894 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
activities, the Board has stated, "While a compa-
ny's change of negotiating posture may be evi-
dence of bad faith, the total circumstances must be
considered. Where an employer's economic power
increases through the successful weathering of a
striker, it is not unlawful for the employer to use
its new-found strength to secure contract terms
that it deems beneficial." 16
We find the Respondent engaged in hard but
lawful bargaining and that any stiffening of its bar-
gaining position during the course of negotiations
reflected its then current economic condition and
its ability to survive the Union's strike. Crucial to
these findings are the negotiation sessions held after
15 December. However, because certain facts need
clarification and others were overlooked by the
judge, we find it necessary here to examine a
number of earlier bargaining sessions. In addition, a
review of the Respondent's wage and medical in-
surance proposals is required because our analysis
of the facts differs from that of the judge, who in
large part relied on his evaluation of these propos-
als in reaching his conclusions.
Since at least 1977, the Respondent has been
plagued by economic difficulties. When negotia-
tions commenced, its financial condition was criti-
cal. The Respondent's financial problems largely
resulted from a deepening automotive recession
characterized by plummeting sales . According to
the Respondent's financial reports, it experienced in
fiscal 198017 a $1.9 million downturn in sales
volume, or about a 25-percent drop compared with
its already reduced sales levels of the preceding
year. The Union's internally prepared auditor's
report of 26 August, based on financial data pro-
vided by the Respondent, summarized the Compa-
ny's economic situation as follows: "Eltec sustained
moderate to heavy losses in three out of the last
four fiscal years . . . . The losses have drained the
company of working capital and forced it to rely
increasingly on banks for financial support, leaving
it top-heavy with debts and in a somewhat precari-
ous financial position." The Union's report indicat-
ed that the decline in sales was aggravated by high
interest expenses and concluded, in assessing the
company's prospects, that "it definitely needs
higher (sales) volume to survive."18
Indeed, long before preparation of the internal
auditor's report the Union was aware of the Re-
spondent's financial troubles. Numerous employees
were laid off in 1978 due to production cutbacks
18 O'Malley Lumber Co., 234 NLRB 1171, 1179-1180 (1978), Pipe Line
Development Co, 272 NLRB 48 (1984)
17 The Respondent 's fiscal year ends on 30 April
18 Interim financial statements reveal cumulative losses increasing from
$189,572 on 30 September 1979 to $459,098 on 29 February 1980
resulting from a continuous decrease in customer
orders. In the fall of 1979, the Respondent present-
ed to the Union its "Company Economic Survival
Proposals," in which it requested substantial
plantwide wage and benefit concessions. Although
the parties then discussed these proposals, no
agreement was reached.
In its initial contract proposal of 15 August, the
Respondent requested "significant" wage and
fringe benefit reductions, amounting to approxi-
mately $3 per man hour in overall labor cost sav-
ings . The Union requested financial data to substan-
tiate the Respondent's claim of economic hardship
and, on 18 August, the Union was provided with
audited financial statements and Federal income tax
returns for the Respondent's fiscal years 1977,
1978, 1979, and 1980. On 25 August the Respond-
ent also provided the Union with its interim finan-
cial statement of 30 June. The Respondent's 25
August proposal suggested a $3 wage reduction for
production employees, a 50-cent reduction for
maintenance-skilled trade employees, and retention
of current wages for toolroom employees. The pro-
posal also indicated that if the Union agreed to re-
ductions in other benefits, e.g., holidays, medical
insurance , or pension contributions, the proposed
wage reductions could be less, so long as the over-
all $3 labor cost reduction objective was met.
During the 3 September bargaining session, the
parties thoroughly discussed the Company's eco-
nomic condition, using as a basis for their discus-
sions the aforementioned UAW auditor's report on
26 August. Although the report concluded that the
Company was in a "somewhat precarious financial
position," the Respondent, by correcting certain
numerical inaccuracies in the report, revealed that
its financial situation was considerably more bleak
than indicated in that report. During the next few
sessions, the Respondent decreased its proposed
wage reduction for production employees. What is
not clear in the judge's analysis, however, is that in
making these "changes" the Respondent requested
as an offset greater reductions in other benefits
such that the Respondent's proposals were consist-
ent at all times with its initial $3 target. On 8 Sep-
tember, as mentioned above, the union membership
voted to reject the Respondent's proposals and to
commence strike activities.
The Respondent continued its operation despite
the strike, initially using supervisory personnel and
family members to perform the duties of its striking
employees. About 21 October, however, the Re-
spondent informed the Union that it had begun to
hire strike replacements. On 27 October the Union
asked whether the Respondent would settle on its 5
September proposal, but the Respondent reminded
ELTEC CORP 895
the Union that that offer had previously been re-
jected. The Respondent further indicated that it
had lost a substantial amount o1' business due to the
strike, that it had to reexamine its bargaining posi-
tion, and that its original $3 overall labor cost re-
duction proposal was "firm."19 The Union request-
ed that the Company prepare a new proposal. On 5
November, nearly 2 months after the strike began,
the Respondent submitted a new wage proposal,
again in line with its original $ 3 goal.:; ° When the
Respondent again informed the Union that certain
changes were required due to a rapidly deteriorat-
ing financial condition, the Union requested docu-
mentary proof. On 7 November the Respondent
furnished the Union with updated financial state-
ments.
The record shows, contrary to the judge's find-
ings , that the Union did not agree on 4 December
to the Respondent's 5 November wage proposal,
but instead proposed a $1.25-"across-the-board" re-
duction. At this meeting, and also on 25 Novem-
ber, the Respondent informed the Union that the 5
November proposal, which had not been agreed to,
was no longer in effect and that the Company was
interested in wage rates equivalent to those re-
ceived by the strike replacements . When the Re-
spondent further informed the Union that it desired
to retain the replacements, the Union responded
that the Company would have to change its posi-
tion on that issue if it wanted an agreement. De-
spite the Union's knowledge that the 5 November
proposal was "off the table," it unsuccessfully at-
tempted to obtain partial agreement on that propos-
al at the 11 December bargaining session.21
The Respondent's proposal of 15 December did
not represent an abrupt change in the Company's
bargaining position, as argued by the General
Counsel and impliedly found by the judge. The
proposal, discussed in detail at the 15 January 1981
session, contained production wage rates that were
19 The judge stated that the Respondent "stuck to its $3 reduction
demand to get its rates competitive in the parts assembly operation."
(ALJ decision , sec III ,C, par 6 ,e) We note that this reference to the
parts assembly operation and other similar references are inaccurate be-
cause that work had not been performed by the Respondent since Febru-
ary, when that work was transferred to Stanitec Corporation in Wauseon,
Ohio The record shows, however, that the Respondent did mention a
need for more competitive production rates and , based on this need, the
Company consistently rejected the $l -"across-the-board" wage reduction
the Union had offered since 8 Septembei Although the Respondent
clearly indicated its position on this matter, the Union proposed its
"across-the-board" reductions in the next few sessions
20 Contrary to the judge 's findings, the record establishes that the Re-
spondent 's 5 November proposal suggested a $2 wage reduction for pro-
duction employees , $ 1 reduction for maintenance -skilled trade employees,
and current wages for toolroom employees According to the undisputed
testimony of Respondent Attorney Hooth, these reductions, coupled with
other labor cost-savings proposals , amounted to an overall $2 92 reduc-
tion
21 The Union also demanded on 11 December the termination of all
strike replacements, a demand rejected by the Respondent
the same as those discussed during the negotiation
sessions held between 25 November and 11 De-
cember, maintenance-skilled trade rates that had re-
mained unchanged since the 5 November proposal,
and toolroom rates that reflected the Respondent's
initial proposal. Regarding the increasingly impor-
tant issue of replacements, the proposal offered am-
nesty for all striking employees who did not
engage in picket line misconduct and demanded the
right to retain replacements. As the Respondent
argues, its 15 December proposal was consistent
with its desire to obtain an agreement with which
it could economically survive and which reflected
its perceived strengthened bargaining position.
As found by the judge, the Union on 10 March
1981 agreed to the Respondent's 15 December
wage proposal as modified in minor respects during
the sessions of 26 February and 4 March 1981. The
Respondent's last formal proposal, that of 12
March 1981, incorporated the parties' wage pack-
age agreement.
Our analysis of the facts establishes that the Re-
spondent did not bargain in bad faith with respect
to wages. At the outset of negotiations, the Re-
spondent thoroughly reviewed the financial records
forming the basis for its wage reduction proposals
and throughout negotiations substantiated its claim
of economic hardship by furnishing the Union with
all requested financial data. The record also reveals
that the Respondent's wage and fringe benefit
offers, though "changing" in their composition, at
all times were consistent with the Company's ini-
tially proposed $3 target. Finally, the facts show
that the Union, at no time agreeing to an entire
wage package, attempted on occasion to obtain
agreement on proposals it knew had been with-
drawn.
By 12 March, at which time negotiations effec-
tively ceased, the parties had reached agreement on
most disputed issues, including wages, cost-of-
living adjustments ' 22 optical insurance , random
days, sick and accident disability insurance, life in-
surance,23 holidays, vacation pay, pensions,24 arbi-
22 Although the Union on 28 August agreed to discontinuance of the
COLA , it attempted on 21 October to obtain agreement to freeze the
COLA for 1 year On 12 November the Union again agreed to its discon-
tinuation
23 Although the judge mentions various dates, the record indicates that
the issues of optical insurance, random days, sick and accident disability
insurance , and life insurance were resolved on 11 September
24 The Respondent initially proposed a decrease in the amount of pen-
sion contributions However, on 5 November the Respondent yielded to
the Union 's demand that current contribution rates be continued The Re-
spondent 's 15 December proposal, although offering to contribute only
on behalf of prestrike employees , did not alter the agreed-on rates. In
citing a portion of the General Counsel's brief, the judge included a ref-
erence to an "announcement" by the Respondent on 14 May 1981 that
pension contributions would be suspended for 1 year We note that the
Continued
896 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
tration procedures and expenses, and the term of
the contract. The outstanding issues were hospital
and medical insurance and the right to retain re-
placements. Regarding insurance, an issue relied on
in large part by the judge in reaching his conclu-
sions, the record establishes that the Respondent
proposed initially and until 5 November an MVF-1
plan with Master Medical, but with the deletion of
drug and dental riders. Contrary to the judge, we
find that the Union did not agree to this proposal
on either 11 September or 12 November. Rather,
on 12 November the Union demanded MVF-1 with
the deletion of Master Medical but the inclusion of
drug and dental riders. Throughout the remaining
sessions , contrary to the judge's findings, the par-
ties at no time reached agreement on this matter;
the major area of disagreement involved drug and
dental coverage. Both parties' proposals changed
constantly, with the Respondent suggesting such
options as MVF-3 with 50/50 copayments or $113
towards individual employee plans , and the Union
suggesting various partial contributions towards
drug and dental riders.25
After 15 January 1981, the subject of strike re-
placements undoubtedly became the major issue
separating the parties.26 By 10 March 1981, the
parties ' positions were firm: the Union stated there
would be no agreement unless all strikers were
granted amnesty and returned to work and the Re-
spondent demanded the right to retain the replace-
ments while granting the strikers amnesty and pref-
erential hiring rights.
Reviewing the "totality of circumstances," we
find that the Respondent engaged in lawful hard
bargaining compatible with the economic realities
confronting it. Further, the alleged substitution of
regressive terms occurred here in the context of
alleged comment was made outside the scope of negotiations while the
parties were attending an injunction proceeding involving allegations of
picket line misconduct Further , it is unclear precisely what the statement
was, to whom it applied , and whether any suspension was limited to the
duration of the strike Thus, we find the alleged statement of no proba-
tive value regarding the issue of bad faith Further , we note that the
judge failed to rule on an allegation in the complaint that about 14 May
1981 the Respondent unilaterally repudiated an existing obligation to
maintain contributions to an employee pension fund In the absence of ex-
ceptions, we find it unnecessary to rule on that complaint allegation
25 The Respondent's 15 December proposal did not offer an MVF-2
plan as found by the judge, but continued to propose an MVF-1 plan
Further, contrary to the judge , we find that the Union at no time agreed
to relinquish drug and dental coverage
We find insufficient evidence to support the judge's statement that on
12 May the Union agreed to choose between MVF-3 coverage or its
equivalent On the contrary , the record establishes that by letter dated 26
March 1981 the Respondent informed the Union that it could obtain in-
surance from carriers other than Blue Cross/Blue Shield at costs it
planned to allocate for insurance purposes , but which would result in in-
creased benefits . The parties thereafter met to discuss this development
and the Respondent provided the Union with a description of a policy
under consideration
26 At the end of December , the Respondent informed the strike re-
placements that they would be considered permanent employees
strike and picketing activities. As stated above, it is
not unlawful for a party to take advantage of a
shift in economic strength in order to seek more fa-
vorable contract terms.27 The Respondent, prior to
changing its proposals (all of which changes were
explained in detail to the Union), assessed its eco-
nomic situation in light of its ability to continue in
operation. As noted in Hickinbotham Bros. Ltd., "A
strike is a two-edged sword. Depending upon how
it affects the employer's operations, the strikers
may gain concessions or they may lose concessions
previously obtained."28 Although the judge ap-
pears to have viewed the Respondent's reasons for
changing its proposals as insufficient justification
for its actions, we are not similarly persuaded.
Again, as stated in Hickinbotham, "it is immaterial
whether the Union, the General Counsel or [the
judge] find these reasons totally persuasive."29
What is important is whether they are "so illogi-
cal" as to warrant the conclusion that by offering
them the Respondent demonstrated an intent to
frustrate the bargaining process and avoid reaching
agreement. 3 ° The judge did not conclude, nor do
we, that the Respondent's proposals were so harsh,
vindictive, or otherwise unreasonable as to con-
clude they were proffered in bad faith. 31 In sum,
we find that the Respondent, having weathered the
strike, was free to use its stronger bargaining posi-
tion to obtain more desirable contractual terms.32
Apart from the proposals themselves, our con-
clusion that the Respondent fulfilled its bargaining
obligation is supported by other evidence. In this
regard, we note that the Respondent met regularly
and frequently with the Union over a period of 7
months, reached agreement early in negotiations on
all noneconomic matters, furnished requested finan-
cial information, agreed to the presence and assist-
ance of mediators, made numerous written and oral
proposals and considered all union proposals, of-
fered justification for its bargaining positions, and
otherwise met its procedural obligations.33 Ac-
27 Hickinbotham Bros. Ltd, 254 NLRB 96 (1981), Atlas Metal Parts Co.
v NLRB, 660 F 2d 304 (7th Cir 1981); O'Malley Lumber Co, supra.
28 Hickinbotham, supra at 102
29 Id at 102-103
20 Id at 103
a i Chevron, supra, 261 NLRB at 46 and fn 10
32 The record shows, as outlined above, that many of the Respondent's
proposals were not in fact "regressive" at all but rather were consistent
with earlier offers
32 The Respondent excepted to the judge's finding that its attorney
stated he was instructed to engage essentially in "take-away bargaining."
As the Board noted in Allbritton Communications, supra, 271 NLRB at
206, "To lend too close an ear to the bluster and banter of negotiations
would frustrate the Act's strong policy of fostering free and open com-
munications between the parties " (Citations omitted) We find that this
alleged statement did not go so far as to belie the hard but real bargain-
ing that accompanied it
ELTEC CORP. 897
cordingly, we dismiss the allegation that the Re-
spondent violated Section 8(a)(5) of the Act by
failing to bargain in good faith. Because we find
that the Respondent's bargaining conduct was
lawful, we conclude, contrary to the judge, that
the strikers remained economic strikers.
3. The judge found that the Respondent violated
Section 8(a)(5) of the Act by failing and refusing to
furnish the Union with financial information re-
quested on several occasions in "late 1979 and
early 1980" notwithstanding that the complaint al-
leged a violation in this regard only after 15 De-
cember.34 We find merit in the Respondent's ex-
ceptions to this finding. We disagree with the
judge's conclusion that this issue was fully litigated
during the hearing. Despite the fact that some evi-
dence was produced regarding information requests
during the above time period, we are not satisfied
that the Respondent had sufficient notice that any
failure to furnish information pursuant to those re-
quests was a litigable issue in this proceeding. We
note particularly that during the hearing the Gen-
eral Counsel specifically disavowed any intent to
litigate whether the Respondent failed to furnish fi-
nancial information prior to 15 December. Accord-
ingly, we reverse these findings of the judge.
The Respondent further excepted to the judge's
finding that during the contract negotiations of
1980-1981, the Respondent failed to furnish the
Union with financial data to substantiate its claim
that its business conditions were deteriorating. We
find merit in these exceptions. Although the com-
plaint alleges a violation after 15 December, we
note that throughout negotiations the Respondent
complied with the Union's requests for financial
data. In addition to the information discussed
above with respect to nego tiations , the record
shows, for example, that on 5 September the Union
requested information regarding the cost of Blue
Cross/Blue Shield medical coverage and sick and
accident weekly benefit coverage. The information
was provided that day.35 On these facts we con-
clude that the Respondent did not fail or refuse to
provide the Union with financial information after
15 December or at any other time.
94 The Union requested financial data in late 1979 following the Re-
spondent 's plea for economic relief and in early 1980 following the Re-
spondent 's announcement that it planned to discontinue its parts assembly
operation
35
We note that the Respondent also furnished the Union with noneco-
nomic information on request For instance , on 19 January 1981 the Re-
spondent complied with the Union 's request for the names of strikers
who allegedly engaged in picket line misconduct On 26 February 1981
the Respondent provided the Union with information regarding the
number of replacement employees hired since the commencement of the
strike Finally , on 9 October 1981 the Respondent furnished the Union
with a list of its job classifications and the number of employees in each
position pursuant to the Union 's request of 20 October 1981
AMENDED REMEDY
As noted above, we have affirmed the judge's
finding that the Respondent violated Section
8(a)(5) and (1) of the Act by unlawfully failing to
bargain in good faith with the Union regarding its
decision to transfer and subcontract its parts assem-
bly operation. Accordingly, we agree with that
portion of the judge's recommended remedy order-
ing the Respondent to cease and desist from engag-
ing in such conduct. However, contrary to the
judge, we do not believe that, in the circumstances
of this case, the Respondent should be ordered to
bargain collectively with the Union on request re-
garding the decision to subcontract. As discussed
below, we find that the Respondent lawfully sold
the parts assembly equipment several months after
the work was subcontracted and ceased its parts as-
sembly operation. Accordingly, we shall not re-
quire the Respondent to engage in a meaningless
gesture by ordering it to bargain about a decision
that subsequent events, i.e., the sale, have overtak-
en. However, to ensure the Respondent's adher-
ence to its bargaining obligations and to effectuate
the policies of the Act, we shall order the Re-
spondent, on request, to bargain collectively with
the Union regarding any like decisions entailing
mandatory subjects of bargaining. Further, al-
though we agree with the judge's recommendation
that the Respondent pay backpay to 24 employees
who were laid off as a result of the Respondent's
decision to subcontract its parts assembly oper-
ation, we shall limit the backpay remedy so as to
be applicable only for losses incurred from the date
of the layoff until 1 July 1980, the date the Re-
spondent sold the parts assembly equipment.
The facts establish, as set forth above, that fol-
lowing the layoff of 24 employees on 15 February
1980,36 the Respondent transferred its parts assem-
bly equipment to Stamtec. At that time, the Re-
spondent acknowledged that, although the work
was contracted out to Stamtec, it retained the pur-
chase orders for the parts assembly work so that
quality control could be monitored and customers
retained. However, on 1 July, Stamtec exercised an
option contained in its agreement with the Re-
spondent to purchase the equipment leased since
February. There is no further evidence as to
Eltec's business relationship with Stamtec follow-
96 In his recommended Order, the judge erroneously listed the names
of the employees laid off on 15 February 1980 when referring to the rein-
statement rights of strikers found by the judge to be unfair labor practice
strikers The revised Order corrects the error as it relates to the 24 laid-
off employees However, as we have concluded that the strikers re-
mained economic strikers in light of our conclusion that the Respondent
did not engage in bad-faith bargaining, the revised Order deletes all refer-
ences to the reinstatement rights of the strikers
898 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
ing the purchase of this equipment and the General
Counsel has not attempted to refute the Respond-
ent's claim that as of 1 July 1980 it had made final
its decision to terminate the assembly operation and
get out of the assembly business.
We find that the sale of the Respondent's parts
assembly equipment to Stamtec on 1 July resulted
in an operational change that is properly character-
ized as a partial closing within the meaning of First
National Maintenance Corp. v. NLRB, 452 U.S. 666
(1981). The sale amounted to a substantial restruc-
turing of the Respondent's ownership of and con-
trol over plant equipment and resulted in a
"change in the scope and direction of the enter-
prise . . . akin to the decision whether to be in
business at all."37 The Respondent's business was
fundamentally altered when, as a result of the sale
of the parts assembly equipment, complete owner-
ship and control were shifted to Stamtec. Follow-
ing the sale, the Respondent no longer performed
parts assembly work for its customers, and indeed
did not even have the equipment to do such work.
The capital transactions involved in the sale were
substantial, as evidenced by the fact that the Re-
spondent received about $132,000 for its parts as-
sembly equipment. Under First National Mainte-
nance, the Respondent's action represents a major
entrepreneurial decision not amenable to resolution
through the collective-bargaining process.38 Conse-
quently, we conclude that the Respondent's breach
of its obligation to bargain with the Union con-
cerning its decision regarding its parts assembly op-
erations ceased as of 1 July. Accordingly, we shall
order the Respondent to make whole the employ-
ees laid off as a result of the Respondent's decision
to subcontract its parts assembly work by payment
of backpay, including fringe benefits but less inter-
im earnings, from 15 February 1980, the date of the
layoff, through 30 June 1980, the last day during
which the Respondent engaged in the parts assem-
bly business. Backpay is to be computed in the
manner set forth in F. W. Woolworth Co., 90
NLRB 289 (1950), with interest to be computed in
the manner prescribed in New Horizons for the Re-
tarded.39 We shall also order that the Respondent
establish a preferential hiring list of all employees
laid off on 15 February. Should the Respondent
resume parts assembly operations in the Plymouth,
3' First National Maintenance Corp, supra at 677
38 See also Summit Tooling Co, 195 NLRB 479, 480 (1972), Kingwood
Mining Co., 210 NLRB 844, 845 (1974)
39 In accordance with our decision in New Horizons for the Retarded,
283 NLRB 1173 (1987), interest on and after 1 January 1987 shall be
computed at the "short-term Federal rate" for the underpayment of taxes
as set out in the 1986 amendment to 26 US C § 6621 Interest on
amounts accrued prior to 1 January 1987 (the effective date of the 1986
amendment to 26 U S C § 6621) shall be computed in accordance with
Florida Steel Corp, 231 NLRB 651 (1977)
Michigan area, we shall order it to offer reinstate-
ment to these employees and to bargain with the
Union on request regarding the terms and condi-
tions of employment of individuals employed to
perform such unit work.40 Further, in view of the
fact that the Respondent no longer conducts parts
assembly operations at its Plymouth location, we
shall order the Respondent to mail to each employ-
ee laid off as a result of its decision to subcontract
the parts assembly work, as well as post at its
Plymouth, Michigan location, copies of the at-
tached notice marked "Appendix."
ORDER
The National Labor Relations Board orders that
the Respondent, Plymouth Stamping Division,
Eltec Corporation, Plymouth, Michigan, its offi-
cers, agents, successors, and assigns, shall
1. Cease and desist from
(a) Refusing to bargain collectively and in good
faith with Local 985, United Automobile, Aero-
space and Agricultural Implement Workers of
America, UAW (the Union), as the exclusive repre-
sentative of its employees in the appropriate unit
set forth below, concerning decision entailing man-
datory subjects of bargaining. The appropriate unit
is:
All full-time and regular part-time production
and maintenance employees employed by Re-
spondent at is facility located at 315 West Ann
Arbor Road, Plymouth, Michigan, including
leaders, and shipping and receiving employees;
but excluding office clerical employees, techni-
cal employees, professional employees, and
guards and supervisors as defined in the Act.
(b) In any like or related manner interfering
with, restraining, or coercing employees in the ex-
ercise of the rights guaranteed them by Section 7
of the Act.
2. Take the following affirmative action neces-
sary to effectuate the policies of the Act.
(a) On request, bargain collectively and in good
faith with the Union as the exclusive bargaining
representative of all employees in the appropriate
unit described above with respect to decisions en-
tailing mandatory subjects of bargaining.
(b) Make whole the employees listed below who
were laid off as a result of the subcontracting of
the Respondent's parts assembly work by payment
of backpay, at the rate of their normal wages, in-
cluding fringe benefits, when last in the Respond-
ent's employ, from 15 February 1980, the date of
the layoff, through 30 June 1980, the last day
40 Summit Tooling Co, supra at 480-481
ELTEC CORP 899
during which the Respondent engaged in the parts notices are not altered, defaced, or covered by any
assembly business. Backpay is to be computed in other material.
the manner set forth in the amended remedy sec- (f) Notify the Regional Director in writing
tion of this decision. The names of employees laid within 20 days from the date of this Order what
off on 15 February 1980 are as follows: steps the Respondent has taken to comply.
Wilson Holifield
Roy Bartlett
Sherman Little
Eugene Reed
Rosalie Owens
Michael McColloch
William Odom
David Hudson
John Sharkany
Henry Honeycutt
Barry Isaacson
Kyle Evans
Billy 'Wilson
Fred Ratledge
Donald Uhrich
Myron Severson
Mitko Jancevski
Waltraud Teas
Elzbieta Wilson
Carlton Falk
David Buford
Bobby Main
Ruben Davis
Lottie Davis
(c) Establish a preferential hiring list of all em-
ployees laid off as a result of the Respondent's de-
cision to subcontract its parts assembly work and,
if parts assembly operations are ever resumed in
Plymouth, Michigan, or in the Plymouth, Michigan
area, offer reinstatement to those employees to
their former or substantially equivalent positions,
and bargain with the Union, on request, without
prejudice to the employees' seniority or other
rights.
(d) Preserve and, on request, make available to
the Board or its agents for examination and copy-
ing, all payroll records, social security payment
records, timecards, personnel records and reports,
and all other records necessary to analyze the
amount of backpay due under the terms of this
Order.
(e) Post at its facility in Plymouth, Michigan,
copies of the attached notice marked "Appendix"
and mail copies thereof to all employees of the Re-
spondent who were laid off as a result of the Re-
spondent's decision to subcontract its parts assem-
bly work.4 r Copies of the notice, on forms provid-
ed by the Regional Director for Region 7, after
being signed by the Respondent's authorized repre-
sentative . Thereafter, a copy shall be mailed by the
Respondent to each of the laid-off employees listed
above, and additional copies shall be posted by the
Respondent immediately upon receipt and main-
tained for 60 consecutive days in conspicuous
places including all places where notices to em-
ployees are customarily posted. Reasonable steps
shall be taken by the Respondent to ensure that the
41 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 Nation-
IT IS FURTHER ORDERED that the complaint is
dismissed insofar as it alleges violations not found
in this decision.
CHAIRMAN DOTSON, concurring and dissenting.
I agree with my colleagues, for the reasons
stated by them, that the Respondent did not violate
Section 8(a)(5) of the Act by engaging in surface
bargaining or by failing to provide the Union with
financial information. I disagree, however, with
their adopting of the judge's finding that the Re-
spondent violated Section 8(a)(5) by failing to bar-
gain in good faith with the Union regarding its de-
cision to transfer and subcontract its parts assembly
operation.
In Otis Elevator Co., 269 NLRB 891 (1984), the
Board determined that management decisions that
affect the scope, direction, or nature of an enter-
prise are excluded from the limited mandatory bar-
gaining obligation of Section 8(d) of the Act. As
stated in Otis, the critical factor in determining
whether a management decision is subject to man-
datory bargaining is "the essence of the decision
itself, i.e., whether it turns upon a change in the
nature or direction of the business, or turns upon
labor costs; not its effect on employees nor a
union's ability to offer alternatives." Id. at 892. Ap-
plying that analysis to the facts of this case,' I find
that the Respondent's decision to transfer and sub-
contract its parts assembly operations turned not
upon labor costs but upon a significant change in
the nature and direction of the business and there-
fore was not subject to mandatory bargaining.
Reviewing the reasons for the Respondent's ac-
tions, it is evident that the decision did not turn
upon labor costs, although such costs were consid-
ered in the decision-making process. By subcon-
tracting one of its two major operations, the Re-
spondent was attempting to restore its enterprise to
economic viability, a prospect threatened by rapid-
ly diminishing sales in a depressed industry, abnor-
mally high interest expenses, noncompetitive
wages, and an unfavorable business environment
resulting from high state taxes.2 The facts establish
that the decision at issue here clearly turned upon a
fundamental change in the scope, nature, and direc-
tion of the Respondent's enterprise, particularly in
light of the contemplated sale of the parts assembly
al Labor Relations Board " shall read "Posted Pursuant to a Judgment of i The facts are fully set out in the majority opinion.
the United States Court of Appeals Enforcing an Order of the National 2 I note that there is no allegation or evidence that the Respondent's
Labor Relations Board " actions were motivated by union animus
900 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
operation. Through this sale, the Respondent expe-
rienced a substantial capital restructuring and
ceased to be engaged in the parts assembly busi-
ness.3
I recognize that labor costs were among the con-
siderations that resulted in the Respondent's deci-
sion to alter the scope of its business. I also recog-
nize that after the Respondent informed the Union
of its plans to transfer its parts assembly operations,
the Respondent exhibited a willingness to discuss
concessions with the Union. However, I find that
the Respondent's general statement to the Union
regarding its willingness to talk about the transfer
are insufficient to establish that the decision turned
upon labor costs. In reaching this conclusion, I
note that the Respondent "retained no control over
the equipment or the employees in the subcontrac-
tors' . . . system" and "no alter ego or other sham
devices were employed to disguise a unilateral re-
duction in labor costs in an operation over which
the employer maintained surreptious control."4
Furthermore, the Respondent would have a con-
tinuing relationship with the Union that represent-
ed the remaining employees, amounting to more
than half of the original work force. In response to
the Union's demand that the Respondent bargain
over the announced change, the Respondent at-
tempted to accommodate its employees' collective-
bargaining representative. As the Respondent ad-
vised the Union, it was prepared to discuss such
matters as the reasons for the change, effects of the
transfer, relocation of employees, any rights affect-
ed employees may have under the collective-bar-
gaining agreement , and "other alternatives." Fur-
ther, there is no evidence that the Respondent's al-
leged attempts to gain concessions prior to the
transfer were restricted to its parts assembly em-
ployees.5 Thus, the Respondent's willingess to
confer with the Union regarding that, from all ap-
pearances, would affect the entire unit does not es-
tablish that the decision to transfer and subcontract
the parts assembly operation turned upon labor costs
in that operation.6 To decide otherwise might dis-
a My colleagues recognize that the transfer and subcontracting of the
parts assembly operation was but one step in the eventual sale of that op-
eration Thus , even though my colleagues find that the Respondent un-
lawfully failed to bargain in good faith over the subcontracting decision,
they agree that in light of the sale of the operation , the Respondent need
not "engage in a meaningless gesture" by bargaining "about a decision
that subsequent events, i e , the sale, have overtaken "
4 Otis, supra at 893
5 Regarding the parties' discussions of concessions of 14 February, I
note that neither the exact contentions of the parties' exchanges nor the
precise nature of the concessions is entirely clear From all accounts, con-
cessions appear to have been discussed only in vague , general terms.
6 As mentioned above, the Board stated in Otis that the critical factor
in determining whether a decision is a mandatory subject of bargaining is
not "a union's ability to offer alternatives " In this regard, I note that it is
questionable whether the Union, which did not exhibit a willingness to
assist the Respondent economically in the past , could have granted con-
courage employers from voluntarily conferring
with their employees' collective-bargaining repre-
sentative regarding permissive subjects of bargain-
ing, particularly when an employer engages in such
actions as part of an attempt to salvage a failing en-
terprise.
Accordingly, I conclude that the Respondent
had no obligation to bargain with the Union re-
garding its decision to transfer and subcontract its
parts assembly operation, a decision that turned
upon a fundamental change in the scope, nature,
and direction of the enterprise.
cessions large enough to compensate for losses resulting from the Re-
spondent 's rapidly diminishing sales The Board is in no position to deter-
mine in this case whether the granting of concessions offered a feasible
alternative to the Respondent 's decision As the Supreme Court stated in
First National Maintenance, 452 U.S 666 at 682 ( 1981) "If labor costs are
an important factor in a failing operation management will have an
incentive to confer voluntarily with the Union to seek concessions that
may make continuing the business profitable." Nonetheless , the Court
found in that case that the factor of labor costs was insufficient to bung
the employer's decision to partially close its business within the applica-
tion of Sec 8(d)
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 and
in good faith with Local 985, United Automobile,
Aerospace and Agricultural Implement Workers of
America, UAW, as the exclusive representative of
our employees in the appropriate unit set forth
below concerning decisions entailing mandatory
subjects of bargaining. The appropriate unit is:
All full-time and regular part-time production
and maintenance employees employed by us at
our facility located at 315 West Ann Arbor
Road, Plymouth, Michigan, including leaders,
and shipping and receiving employees; but ex-
cluding office clerical employees, technical
employees, professional employees, and guards
and supervisors as defined in the Act.
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 collectively and in
good faith with the Union with respect to decisions
entailing mandatory subjects of bargaining.
ELTEC CORP. 901
WE WILL make whole the unit employees listed
below , who were laid off as a result of our decision
to subcontract our parts assembly work , by paying
them backpay , including fringe benefits but less in-
terim earnings , with interest , from the date of their
layoffs on 15 February through 30 June 1980, the
last day during which we were engaged in the
parts assembly business:
Wilson Holifield
Roy Bartlett
Sherman Little
Eugene Reed
Rosalie Owens
Michael McColloch
William Odom
David Hudson
John Sharkany
Henry Honeycutt
Barry Isaacson
Kyle Evans
Billy Wilson
Fred Ratledge
Donald Uhrich
Myron Severson
Mitko Jancevski
Waltraud Tews
Elzbieta Wilson
Carlton Falk
David Buford
Bobby Main
Ruben Davis
Lottie Davis
WE WILL establish a preferential hiring list of all
employees laid off as a result of our decision to
subcontract our parts assembly work . If the parts
assembly operation is resumed by us in Plymouth,
Michigan , or anywhere in the Plymouth , Michigan
area, we will at that time offer reinstatement to
those employees to their former positions or, if
such positions do not exist , to substantially equiva-
lent positions , and bargain with the Union, on re-
quest, without prejudice to the employees ' seniority
or other rights.
PLYMOUTH STAMPING DIVISION,
ELTEC CORPORATION
Dwight R. Kirksey, Esq., for the General Counsel.
William L. Hooth, Esq. and James Perry, Esq. (Cox &
Hooth, P.C.), of Troy, Michigan, for the Respondent.
Edwin G. Fabre, Esq., of Detroit , Michigan, for the
Charging Party.
DECISION
STATEMENT OF THE CASE
ELBERT D. GADSDEN , Administrative Law Judge. On
unfair labor practice charges filed on February 4 and
April 10 , 1980, respectively , by Local 985 , United Auto-
mobile , Aerospace and Agricultural Implement Workers
of America (UAW) (the Union or the Charging Party)
against Plymouth Stamping Division, Eltec Corporation
(Respondent), an order consolidating cases , complaint
and notice of hearing was issued by the Regional Direc-
tor for Region 7 , on behalf of the General Counsel, on
May 29, 1981.
In substance the consolidated complaint alleges that on
a certain date Respondent for the first time notified its
assembly employees that it was terminating its parts as-
sembly operation within 4 days , and that they would be
laid off at the end of the second shift on that date; that
said employees were in fact laid off accordingly ; that on
the next and fifth day , Respondent had its parts assembly
equipment moved from its Plymouth , Michigan plant to
Stamtec Corporation located in Wauseon , Ohio , without
affording the Union a meaningful opportunity to negoti-
ate and bargain about the matter ; that at various times
during December 1980 through May 1981 , Respondent
engaged in surface bargaining without any intent to
reach an agreement with the Union , and continually
failed to furnish financial information requested by the
Union to explain its need and request to the Union for
monetary relief; that Respondent unilaterally repudiated
an existing negotiated obligation to maintain contribu-
tions to the employees' pension fund ; and that since some
employees went on strike , Respondent has prolonged the
strike by the above -described unfair labor practices, in
violation of Section 8(a)(1) and (5), respectively, of the
Act.
On June 10 , 1981, Respondent filed an answer in
which it denied committing any of the unfair labor prac-
tices set forth in the consolidated complaint.
The hearing in the above matter was held before me in
Detroit, Michigan , on April 26 , May 11-14 , and June 15
and 16, 1982. Briefs have been received from counsel for
the General Counsel , counsel for the Charging Party,
and counsel for the Respondent , respectively, which
have been carefully considered.
On the entire record in this case and from my observa-
tion of the witnesses , I make the following
FINDINGS OF FACT
I. JURISDICTION
Plymouth Stamping Division , Eltec Corporation (the
Respondent), is, and has been at all times material, a cor-
poration organized under , and existing by virtue of, the
laws of the State of Michigan.
At all times material, Respondent has maintained its
principal office and place of business at 315 West Ann
Arbor Road , Plymouth , Michigan, where it has been and
is now engaged in stamping , sale, and distribution of au-
tomative parts and related products. During the year
ending December 31, 1980, which is a representative
period , Respondent, in the course and conduct of its
business operations, had gross revenues in excess of
$500,000 and purchased and caused to be transported and
delivered at its Plymouth plant , steel valued in excess of
$50,000 , which was transported and delivered to its
Plymouth plant directly from points located outside the
State of Michigan.
The complaint alleges, the Respondent admits, and I
find that Respondent is engaged in commerce within the
meaning of Section 2(6) and (7) of the Act.
II. THE LABOR ORGANIZATION INVOLVED
The complaint alleges, the Respondent admits, and I
find that Local 985 , United Automobile , Aerospace and
Agricultural Implement Workers of America (UAW)
(the Union or the Charging Party ) is, and has been at all
902 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
times material , a labor organization within the meaning
of Section 2(5) of the Act.
III. THE ALLEGED UNFAIR LABOR PRACTICES
A. Background Facts
At its plant in Plymouth, Michigan, Respondent is and
has been engaged in the stamping , sale, and distribution
of automotive parts and related products. Approximately
25 of its employees were employed in a parts assembly
operation. They also helped constitute a unit appropriate
for purposes of collective bargaining as follows:
All full-time and regular part-time production and
maintenance employees employed by Respondent at
its facility located at 315 West Ann Arbor Road,
Plymouth , Michigan including leaders and shipping
and receiving employees ; but excluding office cleri-
cal employees, technical employees, professional
employees and guards and supervisors as defined in
the Act.
I. Effective immediately a moratorium on all con-
tractual wage increases (A.I.F. & C.O.L.A.) for a
period of one year , until September 1, 1980 and
except for skilled trades a $0.50 per hour wage re-
duction.
II. Effective October 1, 1979 a change in Blue
Cross and Blue Shield coverage or convert to the
Health Alliance Plan an H.M.O.
A. Blue Cross and Blue Shield major changes:
(1) MVF-III
(a) Hospital coverage for four months instead
of current twelve months (Master Medical would
pick up coverage after four months).
(b) Hospitalization costs $50.00 deductable [sic]
instead of current 100% coverage.
(c) Employee pays 20% (80/20 plan) of doctor
fees instead of current 100% coverage.
(d) No dependent children coverage (19 to 25
years olds).
Since about 1960 and thereafter, Local 985 (the Union)
has been designated the exclusive collective -bargaining
representative of Respondent 's employees in the above-
described unit and the Union has been recognized as
such representative by the Respondent, which has been
embodied in successive collective-bargaining agreements,
the most recent of which was effective by its term for
the period September 1, 1977, to September 1, 1980.
At all times material , the following named persons oc-
cupied the positions following their respective names,
and have been and are now supervisors of the Respond-
ent, within the meaning of Section 2(11) of the Act, and
are agents within the meaning of Section 2(13) of the
Act: Richard Taylor, general manager and vice presi-
dent; Rex Smith , sales manager; James McLean, sales en-
gineer until February 15, 1980; and Ed Austin, oper-
ations manager , until February 15, 1980 , when McLean
terminated their employment with Respondent at the
close of business.' At the trial paragraph 12(b) of the
complaint was amended to insert a comma after the
word "place," and to add after the word "Ohio," "and
subcontracted said assembly operations to Stamtec[sic]."
B. Informal and Formal Communications Between
Respondent and the Union
In August 1979, Respondent had approximately 75
bargaining unit employees of which about 25 were parts
assembly employees. About August 28, 1979, Respond-
ent's vice president and general manager, Richard
Taylor, met with the bargaining committee of the unit
employees and presented them with company economic
survival proposals (G.C. Exh . 8) requesting economic
relief from the Union as follows:
Agreement is needed on the four following propos-
als:
' The facts set forth above are undisputed and are not in conflict in the
record
(2) Master Medical same as current.
(3) Prescription drug is $3.00 co-pay instead of
$2.00 co-pay.
(4) Dental services that were covered 90% or
100% would change to 50%.
B. Health Alliance Plan has approximately same
coverage as current except that employee must go
to H.A.P. approved clinics and hospitals for treat-
ment to be covered.
The above proposal also included recommended changes
in the contract as well as stated reasons for the entire
proposal (G.C. Exh. 8).
Subsequently, during a grievance meeting on Septem-
ber 6, 1979, President Taylor asked Local 985 president
and servicing representative, John Ellis, to lend his as-
sistance to the bargaining committee to grant Respond-
ent such concessions as forgoing a wage increase and
COLA payment due the first payday in September 1979,
changes in the Blue Cross/Blue Shield insurance plan,
and changes in some work rules . Ellis advised Taylor
that the Union would have to see its books before it
could consider the proposal and Taylor agreed that the
UAW's auditors could contact Respondent' s accountants
to advise what financial information it needed.
On September 10, 1979, when the increases were due,
Respondent posted a notice to employees on the bulletin
board, which read as follows:
Until the current discussions between the Compa-
ny and the Union, regarding the four "Company
Economic Survival Proposals " reach a conclusion,
we must, regretfully , put the wage moratorium part
of these proposals in effect. This move is necessitat-
ed for the reasons outlined in the "Company Eco-
nomic Survival Proposals" of August 28, 1979.
No further implementation of these proposals is
planned until the Company and the Union discus-
ELTEC CORP 903
lions are completed by the end of September. Your
understanding and cooperation during these difficult
times is appreciated.
Consequently, Respondent did not pay the scheduled
wage and COLA increases pursuant to the contract on
September 10, 1979, and the Union filed a grievance on
September 12, 1979, as a consequence thereof. The
Union and the Company met on the grievance on Octo-
ber 10, 1979, during which time, legal counsel and chief
negotiator for the Respondent, William L. Hooth and
Union Representative John Ellis got into a dispute as to
how the Company was to comply with the Union's re-
quest for financial information. Ellis charged the Compa-
ny with having failed to furnish the information and the
Company contended that it thought the union auditors
were going to contact the Company. Ellis said he sent
the Company a letter and that letter was clear. Hooth
said the letter was not clear.
However, I particularly observed that the Union's
letter (R. Exh. 20) states in closing, "Please contact me if
you have any questions." The letter was signed by John
Ellis with an enclosure and copy to Milton Williams.
The record does not show, however, that the Respond-
ent ever indicated to the Union, between the letter of re-
quest and the grievance meeting an October 10, that it
had a question concerning the information requested.
Moreover, it is clear that Ellis' complaint during the
grievance meeting on October 10, about the Union not
having received the requested Financial information,
clearly evidenced an affirmation of the Union's Septem-
ber 14 request for such information. Ellis also com-
plained about the Company's failure to pay the sched-
uled wage and cost-of-living increase and the Respond-
ent decided and thereafter paid the increases in Decem-
ber 1979. The record does not show that the Respondent
made any effort to contact the Union for the purpose of
submitting the requested information. Because the Union
did not receive the requested financial information at any
time prior to February, it did not grant economic con-
cessions as requested by the Company.
The undisputed evidence further established that on
the request of the company vice president, Richard
(Dick) Taylor, the union acting steward and recording
secretary, Mildred McCullum, and other bargaining com-
mittee members Mike Lipshu and Ellen Petty met with
Vice President Taylor and Plant Superintendent Karl
Klafee on February 11, 1980. At that time the committee
was given a written notice (G.C. Exh. 2), which advised
that the Respondent planned to terminate its parts assem-
bly operation at the conclusion of the second shift on
Friday, February 15, 1980; that the toolroom and staffing
operations would not be affected; that assembly oper-
ation employees would either be transferred or laid off in
accordance with the union agreement; and that this
action was necessary as a result of the Company's busi-
ness and economic situation as had been previously dis-
cussed with the Union. The notice added: "We are pre-
pared to discuss this matter with you further." It was
signed by General Manager Richard Taylor.
McCullum and her committee were "'shocked" and
management agreed to meet with them at a later time.
Vice president of Local 985, Rollie Cary, who informed
McCuilum that he would be willing to meet with them,
directed her to request management to have its attorney
present. Management agreed with the request but ad-
vised that the attorney would not be available until
Thursday, February 14, 1980, and the Union agreed with
that date. Present at the February 14 meeting for the
Union were Mildred McCullum, Ellen Petty; Mike
Lipshu, Milton Williams, chief steward; Miriam Elston;
and Rollie Cary, vice president of the Union. John Ellis
was on vacation for 8 days and was not to return until
Monday, February 18. Present for the Respondent were
Attorney James Perry; Karl Klafee, superintendent;
Richard Taylor, vice president; and Ed Austin.
President Taylor advised the committee that the layoff
would be plantwide, based on seniority. He explained the
Company's economic problems by pointing out that
there had been a 25-percent decline in sales ; that the
wage rates for parts assembly were no longer competi-
tive; that taxes for doing business in Michigan was bur-
densome; and that workmen's compensation cost was
high.
Carey testified that he asked Taylor who was going to
retain the purchase order for the product line (work to
be performed) and when was the decision made to termi-
nate parts assembly, but Taylor only responded that the
Company had to have an answer by the next working
day, February 15, 1980. Cary said he then asked Taylor
if the machines were going to be sold but the latter did
not answer. Cary said he told Attorney Perry that the
Company was totally ignoring and flaunting the recogni-
tion clause of the contract and that there were certain
legal requirements for plant movement. The Company
denied plant movement, but contended it was selling it.
He advised the Company that it still had to sit down
with the Union and bargain to an impasse, that under
law the Company had not done that, and that the Com-
pany cannot move the jobs without bargaining with the
Union. The committee then discussed which employees
would be affected by the move.
Miriam Elston testified that the committee asked the
Respondent during the February 14 meeting what could
be done to keep the assembly parts jobs in the shop. She
said the Company stated that the Union would have to
give it substantial wage reductions, a freeze in COLA, a
reduction in some benefits, and a relief in company work
rules. Elston's testimony was essentially corroborated by
committee member Mildred McCullum.
Because the Company insisted that it receive an
answer from the Union on economic concessions by the
next day (February 15), Cary said he told the Company
that was impossible; that the Union and the Company
had a meeting in August about union concessions, reduc-
tions, etc., but that the Company had not opened its
books and he understood that the Company had not
completed the proper form sent to it by the union audi-
tors. He then asked the Company if the decision to move
the jobs was irreversible and the Company said, "No,"
but it had to have an answer by the next morning, for
economic reasons. Cary said he then told Taylor that
Ellis had talked to the Company about concessions in
904 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
August 1979 and he requested Respondent to wait until
Ellis returned from vacation on Monday or Tuesday,
February 18 or 19, because the Union did not have
enough time, plus it had a membership meeting at 3 p.m.
on the same afternoon (February 14). Cary told the
Company he would get back with it but he personally
did not get back to the Company. Cary's testimony is es-
sentially corroborated by bargaining committee members
Mildred McCullum and Miriam Elston.
While Cary did not personally get back with the Com-
pany as he indicated, he stated that he did see the re-
sponse (G.C. Exh. 5) sent to the Company on the same
date and allegedly mailed on February 14, 1980, which
read as follows:
Please be advised that the Union is requesting infor-
mation relative to the Company's plans to perma-
nently terminate all parts assembly operations at the
Plymouth Stamping Plant as follows:
1. A detailed statement of all reasons the Compa-
ny is contemplating the sale of parts assembly oper-
ations.
2. When did the Company make their decision.
3. When was the decision finalized.
4. Where is the work going and what Company
is buying the operation.
5. The relationship between Plymouth Stamping
and the Company who is buying the operation.
(Attach a copy of an agreement or letter of under-
standing that Plymouth Stamping has entered into
with the respective purchaser.)
6. How many jobs will be available at the new
site.
7. The rate of pay and benefits available at the
new site.
In addition, the Union is requesting a complete
audit of the Plymouth Stamping books to prove
your claim that the Company's business is experi-
encing "tenuous financial difficulties."
Awaiting your written reply, I remain
Sincerely,
Miriam Elston
International Rep. Region
la, UAW
Miriam Elston testified that her letter dated February 14
(G.C. Exh. 5) was sent to Respondent by certified mail
on February 14, 1980.
The record shows that the above letter from the
Union (G.C. Exh. 8) is company-stamped dated February
20, 1980, the date on which Respondent's President
Taylor testified the Company actually received it.
Miriam Elston further testified that after talking with
the Union's general counsel she thereafter filed charges
with the National Labor Relations Board on February
14, 1980. On February 15, 1980, the Respondent either
posted or delivered a copy of the following notice to the
employees named therein:
The following employees are placed on indefinite
lay-off effective at the end of their regular shift,
Friday, February 15, 1980:
Wilson Holified Billy Wilson
Roy Bartlett Fred Ratledge
Sherman Little Donald Uhrich
Eugene Reed Myron Severson
Rosalie Owens Mitko Jancevski
Michael McColloch Waltraud Tews
William Odom Elzbieta Wilson
David Hudson Carlton Falk
John Sharkany David Buford
Henry Honeycutt Bobby Main
Barry Isaacson Ruben Davis
Kyle Evans Lottie Davis
This lay-off is due to the termination of assembly
operations at Plymouth Stamping, effective at the
end of the afternoon shift on Friday, February 15,
1980.
Vice President and General Manager Richard Taylor
testified that the arrangements to actually move the ma-
chinery from Plymouth to Stamtec in Wauseon, Ohio,
were made during the late afternoon of Friday, February
15, and the machinery was actually moved on Saturday,
February 16. However, he changed his answer to say the
arrangements to move the equipment were made on Feb-
ruary 8 or 11, 1980. He acknowledged that the first time
he or the Respondent advised the Union of its plan to
move the parts assembly operation was during the meet-
ing held on Monday, February 11, 1980. He further testi-
fied that if the Union had said it was willing to negotiate
concessions, it would not have been necessary to move
the operation on February 15, and a move would not
have occurred. He said that what made a decision from
the Union on its request urgent was the deteriorating
business situation and the logistics of moving the oper-
ation so as not break continuity of operation. Although
the equipment was shipped to Ohio on February 16 and
17, Respondent did not commence shipping parts until
March 1, 1980. Vice President Taylor admitted that it
sold its equipment to Stamtec in July 1980 pursuant to a
lease arrangement made in March 1980. There were no
further discussions between the Respondent and the
Union regarding the termination and move of the parts
operation after the grievance meeting on February 29,
1980, until the parties commenced to bargain for a new
contract in August 1980.
On cross-examination Hooth testified that he became
involved in the Respondent's negotiations on August 28,
1979 and specifically in the meeting of September 6,
1979. He acknowledged that in the August and Septem-
ber 6 meetings, the Union advised Respondent it would
have to see its books before it could consider or make
any economic concessions. He further acknowledged
that said request was also made by the Union in writing.
The Company was willing to make the data available but
the Union did not look at it.
When shown a letter addressed to the Respondent
dated September 14, 1979 (R. Exh. 20), in which the
ELTEC CORP 905
Union's auditors requested Respondent to provide it with
financial data specified on an enclosed sheet, further re-
questing the Respondent to contact it if the Respondent
had any questions, Hooth acknowledged the letter and
stated that Respondent did not provide the information
requested because it did not deem the letter to be a re-
quest to send the Union the subject data, in view of what
the arrangements were. It is particularly rioted that the
Respondent did not contact the Union to inquire about
arrangements nor did it invite the auditor to come to its
offices for such data.
Hooth admitted that the Company did not comply
with the contract by not implementing the wage increase
due September 1, and included on the check due Sep-
tember 9, 10, or 11. When the increase did not appear on
the check on September 9, 10, 11, the Union filed a
grievance on September 12. The Company still did not
implement the increase and Ellis called Hooth on Octo-
ber 10. Hooth admitted that he knew on February 14
that Ellis was on vacation and that the Union had re-
quested the Respondent to wait until Ellis returned
before moving the equipment, but he and the Company
did not see any reason to do that.
Hooth acknowledged that when Taylor informed him
that the Company had not heard from the Union on Feb-
ruary 15, he advised the Company to go forward with its
plans to move the parts assembly operation, although he
knew that the Union had requested the Company to wait
until its chief negotiator Ellis returned from vacation on
Monday or Tuesday, February 18 or 19, 1980. When
Hooth reached Ellis on February 20, he testified he
made it clear to Ellis that the move to Ohio decision was
not final; that their Company was still willing to talk and
could move the equipment back from Ohio. He does not
recall whether Ellis asked him to bring the equipment
back from Ohio, but he may have. He further acknowl-
edged that there were no commitments or reasons the
equipment was actually moved on February 16.
On cross-examination Hooth acknowledged that Re-
spondent may have placed a help wanted ad in the
"Fulton County Exposition," a Wauseon, Ohio newspa-
per on February 12, 1980. He also acknowleged that on
February 29, Union President Ellis said the only way the
problem could be rectified was to return the work from
Ohio to Plymouth Stamping. Ellis wgs the Union's chief
negotiator with the Company (Taylor) for the past 12
years, except when he was ill. He did not appear and tes-
tify in this proceeding because he died suddenly on
Sunday, April 25, 1982, the night before the trial in this
proceeding commenced.
The record shows, that on Saturday and Sunday, Feb-
ruary 16 and 17, 1980, respectively, Respondent dis-
mounted, and using five semitrucks, removed and trans-
ported all of its parts assembly machinery and equipment
from its Plymouth plant, 90 miles away to Stamtec, a
company in Wauseon, Ohio, at an approximate cost of
$14,000. Vice President Taylor became a 38-percent
shareholder in Stamtec in January 1980, at which time he
commenced to negotiate a building lease for Stamtec,
and arranged the lease of Respondent's machinery valued
in excess of $132,000.
In response to the Union's letter of February 14, 1980,
requesting information regarding the Respondent's move
of the parts assembly operations, counsel for the Re-
spondent's letter dated March 11, 1980 (G.C. Exh. 6), re-
iterated the same reasons for its moving the parts assem-
bly operations that Respondent gave to the bargaining
committee on March 14, 1980. In a further explanation of
the move, the letter (G.C. Exh. 6) continued in pertinent
part as follows:
2/3. The Company did not complete its plans to
move the assembly equipment until Friday, Febru-
ary 15. This action was prompted by the fact that
outside commitments had to be finalized at that
time , and also by the fact that the Company had not
received any affirmative response from the Union
pursuant to the meetings on Monday, February 11
and Thursday, February 14.
Even though the Company has proceeded with
its plans to terminate the assembly operations and
effectuate the lay-off of employees as announced,
the Company's decision is not "finalized" in the
sense that it is irreversible nor in the sense that the
Company is unprepared to consider other alterna-
tives. In this regard, the Company has been fully
prepared to discuss this matter with the Union, and
remains available to do so.
The purchase agreement between Plymouth
Stamping and Stamptec [sic] has not been complet-
ed in all respects.
6/7. Stamptec [sic] Corporation projects a work
force of approximately 25 employees (excluding
office employees). At present, approximately 8-10
employees have been hired.
Wage rates and benefits have not been finalized.
Presently, the starting hourly rate for production
employees is $3.50 and $5.50 for a maintenance em-
ployee.
With respect to your request for a "complete
audit of the Plymouth Stamping books, " I am not
sure precisely what information you are seeking.
However, we are certainly prepared to provide rel-
evant financial data assuming , of course, that the
Union is requesting this information for the pur-
poses of continued negotiations. If you will contact
me directly I shall make the necessary arrange-
ments.
Findings and Conclusions
Based on the foregoing essentially undisputed and
credited evidence, I conclude and find as follows:
1. During the effective life of the current collective-
bargaining agreement on August 28, 1979, Respondent
made a request to the Union in its company economic
survival proposal (G.C. Exh. 8) for economic relief.
2. During the same occasion on August 28, the Union
advised the Respondent that it would have to see its
books before it could consider its request.
3. During a grievance meeting on September 6, the
Company asked the Union's chief negotiator, Ellis, to
assist the bargaining unit in considering to grant the
906 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
Company's economic concessions, which included forgo-
ing a wage increase and COLA payment due about Sep-
tember 10, changes in Blue Cross, and changes in compa-
ny work rules. Union Representative Ellis stated that the
Union would have to look at the Company's books
before it could respond, and the Respondent agreed.
4. In a letter to the Respondent dated September 14,
1979, the Union outlined the specific financial informa-
tion it requested for consideration.
5. When the Company met with the Union's bargain-
ing committee on October 10, 1979, it still had not fur-
nished the information previously requested on August
28, September 6, and more particularly in the Union's
September 14 letter. Nor did the Respondent at any time
before February 11, 1980, furnish the Union with the re-
quested financial information. Additionally, Respondent
had not contacted or made any inquiry of the Union or
its auditors about the requested financial data.
6. When the Union did not respond to its request to
grant the economic concession to the Respondent, the
Respondent announced that it would not pay scheduled
wage increases due the first payday in September 1979,
which it did not pay as the contract provided, until after
Union President Ellis protested the action.
7. Because the Respondent did not receive the eco-
nomic concessions it requested from the Union during its
meeting with the union representatives on October 10, it
proceeded to arrange to subcontract its parts assembly
work to Stamtec Corporation of Wauseon, Ohio, in
which Vice President Richard Taylor became a 38-per-
cent stockholder in January 1980. Thereafter, on Febru-
ary 8, 1980, the Company arranged to move its parts as-
sembly equipment and operation to Stamtec in Wauseon,
Ohio.
8. On February 11, 1980, without having afforded the
Union a meaningful and adequate opportunity to bargain
on the matter, Respondent, for the first time announced
to the Union's bargaining committee, in the absence of its
chief negotiator Ellis, that it was terminating its parts as-
sembly operation effective the end of the second shift on
Friday, February 15, 1980; that employees in the parts
assembly operation would be laid off in accordance with
the contract; and that the Company was taking this
action as a result of its economic situation previously dis-
cussed with the Union.
9. The union committee was shocked by the action
contemplated by the Company and requested a meeting
with the Company and the Company's attorney, which
the Company advised could not be scheduled until
Thursday, February 14. When the parties met on Febru-
ary 14, the Union requested Respondent to delay its de-
cision to terminate the parts assembly operation until its
chief negotiator, John Ellis, returned from vacation on
Monday, February 18, 1980. Respondent said it had to
have an answer on the requested economic relief by the
end of the second shift on Friday, February 15. Al-
though the Union advised that it would get back to the
Respondent, it did not do so before the end of the work-
day on February 15.
10. I credit the corroborated testimony of bargaining
committee member Elston to the effect that during the
February 14 meeting , the committee asked Respondent
what would have to be done to keep the parts assembly
operation at Plymouth. The Company replied, grant the
economic relief it requested by the next day, February
15. Still not having received the financial data it request-
ed, the Union advised the Company that such a decision
was impossible by the next day.
11. In a letter dated February 14, 1980 (G.C. Exh. 5),
which the Union said it mailed on the same date (Febru-
ary 14) but Respondent said it did not receive until Feb-
ruary 20, the Union made several inquiries about the as-
sembly move and renewed its request for a complete
audit of Respondent's books with the object of verifying
Respondent's contentions about its economic difficulties.
12. Not having received a response to its request for
economic concessions from the Union at the close of
business on Friday, February 15, Respondent, without
notifying and affording the Charging Party a meaningful
and adequate opportunity to negotiate and bargain as the
exclusive representative of its unit employees, transport-
ed its parts assembly equipment (valued at $132,000) and
the entire operation on February 16 and 17, 1980, 90
miles away to Wauseon , Ohio , at an approximate cost of
$15,000.
13. The Respondent acknowledged that it did not fur-
nish the Union with the financial information requested
by the Union. In fact, the Respondent stated that it did
not deem it necessary to furnish the Union with the re-
quested financial information.
It is therefore clear from the foregoing undisputed
findings that Respondent made its plan to subcontract its
parts assembly work probably as early as late December
1979 or early January 1980, since President Taylor
became a 38 -percent stockholder in January 1980. It is
highly unlikely that Taylor's stock ownership occurred
overnight. Similarly, although Vice President Taylor
said Respondent made its decision to transfer and sublet
its assembly operation in February 1980, it may be rea-
sonably inferred from such facts that such arrangements
for such a massive and expensive undertaking occurred
at an even earlier date. This is particularly true when it
is observed that President Taylor first testified that Re-
spondent made its decision to tranfer the parts assembly
on the day it notified the Union (February 11, 1980)
about its plan and abruptly changed his testimony of the
date to February 8. after he realized how questionable
his answer was in view of the proximity of the date of
actual transfer . In any event , Respondent 's announce-
ment was a fait accompli, as the General Counsel con-
tends, in view of Respondent's December and January
arrangements to transfer the operation and its decision to
do so on or before February 8, 1980. Thus, it is abun-
dantly clear from such evidence that Respondent did not
earnestly intend to bargain with the Union on its assem-
bly transfer decision, which from all appearances was a
permanent and irrevocable decision. ABC Trans-National
Transport, 247 NLRB 240 (1980), and American Needle &
Novelty Co., 206 NLRB 534 (1973).
Although Respondent told the Union after February
16, 1980, it was still available and willing to talk about its
implement decision transferring the parts assembly oper-
ation, Hooth did not deny on cross-examination that the
ELTEC CORP 907
Union (Ellis, deceased union president) asked the Re-
spondent during its February 28 or 29 meetings to return
the parts assembly operation to Plymouth . It is clear
from the record that Respondent did not return the as-
sembly operation , and its general statement about its
availability and willingness to talk about the transfer was
not a specific offer to bargain about the decision or about
the employees affected thereby . ABC Trans-National
Transport, supra.
In view of these well -supported findings , I further
conclude and find that by failing to give the Union ade-
quate notice and a meaningful and adequate opportunity
to negotiate and bargain on its unilateral decision to
transfer and subcontract its parts assembly operation to
Stamtec Corporation , and by 5 days thereafter , actually
transferring and subcontracting said parts assembly oper-
ation to Stamtec , the Respondent failed and refused to
bargain with the Union , as the exclusive representative
of its unit employees , in violation of Section 8(a)(5) and
(1) of the Act.
Counsel for Respondent argues in his brief that neither
Respondent's unilateral transfer decision nor its acutal
transfer and subcontracting of its parts assembly oper-
ation during the life of the contract was a mandatory
subject of bargaining . However , from my reading of Fi-
berboard Corp. v. NLRB, 379 U . S. 203 ( 1964), and the
Board 's decision in American Needle , the Court as well as
the Board have reached a conclusion opposite that advo-
cated by Respondent . As the Board said in American
Needle , supra:
The fact that here the Respondent transferred the
work from one location to another , rather than sub-
contracting the work as in Fiberboard, does not
change the result . It is well settled that an employer
has an obligation to bargain concerning a decision
to relocate unit work . Thus, in Weltronic, supra, a
case very similar on its facts to the instant case, the
Board found the employer acted unlawfully when
without bargaining he moved unit work from one
plant to another with the ultimate result that 14 em-
ployees were laid off. [Footnote omitted.]
Hence , in the case here , Respondent transferred the
work and its equipment to another location (Wauseon,
Ohio) and subcontracted the same work performed on
the same equipment , in accordance with the same proce-
dure , by different employees , resulting in the layoff of 24
employees . Consequently , I find that Respondent's deci-
sion to transfer , and its actual transfer and subcontracting
of its parts assembly operation was a statutory and man-
datory subject of bargaining . American Needle, supra.
The fact that Respondent gave the Union almost 5 days'
advance notice of its decision to terminate and transfer
its parts assembly operation was clearly inadequate
notice and time for the Union to engage in meaningful
bargaining with the Respondent . The Board has found an
8(a)(5) violation where the employer gave the union 8
days' advance notice of its decision to transfer unit work.
Royal Typewriter Co., 209 NLRB 1006 (1974).
In support of its contention that Respondent offered its
assembly unit employees an opportunity to bargain on its
decision to transfer the operation , counsel for the Re-
spondent cites U. S. Contractors, Inc., 257 NLRB 1180
(1981). However , there , unlike here, the company had
not announced to the union that it had irrevocably de-
cided to end its custodial operation , but simply recited a
series of factors that indicated that result , and requested
discussion on the subject with the union . The union
abruptly ended the meeting with the statement "there
was nothing left to discuss ." Here , on the contrary, Re-
spondent unqualifiedly and irrevocably announced to the
bargaining committee of its unit employees on February
11, that it was terminating its parts assembly operation
and laying off its assembly employees at the close of the
second shift on February 15. Although the Respondent
had already made and announced the decision , the bar-
gaining representatives requested a meeting with the Re-
spondent to discuss the decision . It was only after the
Respondent had implemented its decision on February 16
and 17, when Union President Ellis expressed hopeless-
ness by stating "it is after the fact now ." Nevertheless, at
that time Ellis still requested Respondent to return the
assembly operation to Plymouth.
Although it is not alleged in the complaint that Re-
spondent failed and refused to furnish financial informa-
tion requested by the Union on several occasions in late
1979 and early 1980, to enable the Union to intelligently
consider Respondent 's request for economic relief, the
issue was nevertheless fully litigated here . Not only was
the issue litigated but the evidence is abundantly clear
that the requested information was relevant and essential
for the Union to intelligently determine if and how much
relief was needed by Respondent, and if and how much
the employees were able or willing to grant . Moreover,
the Union was the exclusive bargaining representative of
the appropriate unit employees while the bargaining
agreement was still effective . Consequently , Respondent
was legally obligated to furnish the requested data and
its failure and refusal to do so , prevented the Union from
effectively discharging its representative duties to its
members, in violation of Section 8(a)(5) of the Act.
C. Respondent Engaged in Surface Bargaining
1. The Respondent and the Union entered into a col-
lective-bargaining agreement (G.C. Exh . 7) effective Sep-
tember 1, 1977, through August 31, 1980. The parties
commenced negotiations for a new agreement on August
28, 1980.
2. At the August 28, 1980 negotiation session the par-
ties discussed Respondent 's proposal, which had been
submitted to the Union a few days before . The Union
presented a counterproposal on temporary transfers and
agreed to hold all wages for 1 year . The Company pre-
sented a counterproposal on transfers and $3 reduction in
benefits.
3. The next negotiation session was held on September
2, 1980, and the Union rejected the shared cost of $800
for arbitration and indicated that it would go on strike
before accepting it.
4. The auditors ' report from the Union (R. Exh. 24)
was discussed at the September 3 meeting , when the
Company proposed a $2 reduction in wages and $1 re-
908 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
duction in benefits for all employees. The Company also
presented a new proposal on transfers . The parties met
with the Federal mediator, Maurice Chagnon. The
Union indicated a willingness to move on Blue
Cross/Blue Shield. The strike was still in progress and
the plant was operating with supervisory personnel and
family members.
5. During the negotiating session on September 4, all
noneconomic issues were resolved and a strike thus far
was adverted.
6. However, in the session on September 5, the parties
were in a deadlock and the Union wanted to go on strike
Monday, September 8. The Company agreed to continue
operations through September 8 and stood on its $2 re-
duction for production and $1 for all employees.
a. During the September 8 negotiating session , the par-
ties discussed Respondent's September 5 proposal (G.C.
Exh. 12) during which Taylor explained the Company's
financial situation, and told the Union "that is it" (take it
or leave it). The membership met and discussed the
Company's proposal (G.C. Exh. 12) and voted to reject
it and decided to go on strike the next day, September 9.
Hooth, counsel and chief negotiator for the Respondent,
testified he presented the memorandum of agreement
(G.C. Exh . 16) on the noneconomic issues and the parties
agreed.
b. At the September 11 negotiating meeting , the Com-
pany rejected the Union's September 5 proposal. The
parties talked about the Company's September 5 propos-
al (G.C. Exh. 12). The Union agreed to the Company's
demands on "A," "B," "D," and 5 random days. The
parties agreed to obtain additional information on the dif-
ferences in converage between the BVF-1 and the BVF-
2 of Blue Cross/Blue Shield insurance plan.
c. On October 4, Respondent instituted legal proceed-
ings for injunctive relief against union conduct. The
Union assured the court that it would take steps to con-
trol exuberance on the picket line and the Respondent
agreed to forebear its quest for an injunction.
d. On October 21, the parties met with Federal Media-
tor Chagnon. The Union made an off-the-record propos-
al of a reduction of 1 across-the-board, COLA freeze
with a reopener in 3 years. The parties did not agree.
The Company commenced hiring replacements.
e. On October 27, Federal Mediator Chagnon was
present. According to Hooth's testimony, the Company
stuck to its $3-reduction demand to get its rates competi-
tive in the parts assembly operation. When Union Repre-
sentative Ellis asked the Company was it prepared to
settle on its September 5 proposal, Hooth said that was
the Respondent's proposal but the Union had rejected it.
Ellis accused the Company of not bargaining in good
faith. The Union made a proposal on holidays and the
Company said it would get back to the Union on the
subject.
f. At the November 5 meeting , the Company presented
a new proposal (G.C. Exh. 13), which was different from
its September 5 proposal (G.C. Exh. 12) as follows:
(1) Increased its wage reduction demand by 50 cents,
from $2 to $2.50 for production groups.
(2) Increased its wage reduction demand by 50 cents
for maintenance and skilled trades, all because the Com-
pany 's financial statement had reflected a $150,000 loss.
The Company said it was still losing money and the
strike was not helping the situation. The Union asked to
see the financial statement that day and the Company
said it was not available but that the Union could pick it
up the next day. The Union did subsequently receive the
financial statement . The Union nevertheless agreed to the
Company 's October 27 proposal on holidays and pen-
sions.
g. On November 12, the Union made a counterproposal
to the Company 's November 5 proposal (G.C. Exh. 13)
for a $1 wage reduction across-the-board for all employ-
ees, instead of a $2 reduction for production employees
and a $1 reduction for maintenance and skilled trades, as
proposed by the Company . The Company 's item 2, No-
vember 5 proposal for no increase in COLA was agreed
on by the Union. The Union agreed to the Company's
item 3 , November 5 proposal on Blue Cross/Blue Shield.
The Union met the Company on its 3B-sick and acci-
dent, and its 3C-life and accident proposals . The Union
agreed to discontinue optical insurance . The Union had
previously agreed to the Company 's holidays, and the
random days and pension proposal. The Union rejected
the Company 's proposal on item 7-vacation and entitle-
ments because the Company rejected the Union 's propos-
al for a $2000-arbitration expense fund, unless the Re-
spondent returned the parts assembly work from Ohio.
The Union agreed to a 2-year agreement and said if it
were acceptable to the Company , the strikers could
return to work the next day. The Company said that was
not acceptable.
h. On November 25, the parties met with the mediator
and the Union had a new proposal with $1 . 25 reduction.
The Company (Hooth) told the Union he did not know
if the Company 's proposal of September 5 was still out-
standing because business was considerably worse, but he
would talk to the Company about it.
i. During the December 4 session , the Union agreed to
the Respondent 's demand of a $2 cut in production
wages but was advised by Hooth that the Union's No-
vember 5 proposal was rejected because the Company
was opposed to an across -the-board reduction and that
their $1.25 was a long way from $3 . Ellis wanted a 3-
year contract , freeze all fringe benefits, a 50-cent reduc-
tion across the board in wages for all employees, no
COLA, an economic reopener after 1 year and fringes,
with the Company 's willingness to open its books to the
Union . The Union also proposed a $2000 -arbitration re-
imbursement fund and the return of the parts assembly
operations from Ohio. Hooth further advised the bar-
gaining committee that the Company was beginning to
hire replacements and that the Respondent was now in
the area of $6.50 for the production group to make the
rate more competitive . He explained that the Company
wanted an agreement for 1 year . The Company was now
paying workers $6.50 to start . The Company was now at
a $6.50-per-hour proposal and reconsidering its position
on the Christmas holiday item and the Company did not
want to terminate its replacement employees . The Union
said it could not agree to the Company's keeping the re-
placements.
ELTEC CORP.
j. During the December 11 session the Union presented
a counterproposal to the Company's November 5 pro-
posal for $2 reduction for production workers by agree-
ing to the $2 reduction, and also agreed to $1 reduction
for maintenance and skilled trades . The Union also
agreed to the change for trades and skilled trades, sick
and accident insurance , and on the arbitration issue the
Union moved from $800 to agreeing that it would pay its
own arbitration expenses . The Union agreed to reduce
the 2-year reopener to a 1-year reopener , for amnesty for
all strikers and the termination of Al replacements. The
Respondent rejected its proposal and would be asking
for more.
k. In the January 15, 1981 session , the Company pro-
posed increasing its wage reduction for production em-
ployees from $2 to $3 with no change in other group
wage reductions . The Union was shocked . The Company
further proposed that the Blue Cross/Blue Shield be
changed from MVF-l plan to MVF-2, no dental, no
drug and delete the master medical out of the November
5 proposal . It also changed its position on sick and acci-
dent and a $5000 reduction in life insurance . The Union
met the Company's demand on these changes . The Com-
pany agreed to the Union's Christmas bonus for $275 in-
crease but it changed on its Christmas shutdown item.
The Company agreed to keep its pension contribution
proposal , but only for current employees as of Septem-
ber 9, 1980, and not for new hirees . The Company in-
cluded a demand , number 10 , to retain replacements. It
also included a demand , number 11 , amnesty for all strik-
ers except those who had engaged in picket line miscon-
duct ; the proposal did not identi ry strike rs nor describe
what constituted misconduct . The Company also pro-
posed a demand , number 12 , on supervisors performing
work in the grievance procedure , all because the Compa-
ny was losing money . The Company did not present any
proof (financial data) of further losses. The Union reject-
ed the Company's November 15 proposal . This session
was called by the mediator and Hooth responded to the
discussion regarding the Company's not granting amnes-
ty to employees who were involved in the picket line
misconduct . In a letter dated January 19, 1981 (R. Exh.
26), in which he identified 10 employees. who were in-
volved in what the Company described as picket line
misconduct sufficient to warrant termination or other ap-
propriate disciplinary action . The letter does not describe
the nature of the misconduct . Hooth further stated that
an agreement regarding the status of these employees
would have to be included as part of the final settlement.
1. In the March 4, next session , Hooth advised that the
Company's position was the same as stated and modified
in the December 15 meeting . He testified that he over-
head a Bill Battle, regional director , respond "that the
Union would just have to run the replacements out."
This statement was not corroborated or further explained
and I do not attribute to it any probative significance or
relevance in resolving the issues here.
in. In the March 10 session , the Union agreed to the
Respondent 's December 15 wage proposal and accepted
the Blue Cross/Blue Shield proposal . Hooth said he did
not respond to the Union's acceptance at that time be-
909
cause he wanted to discuss the replacement issue with
the Company.
n. In the March 12 meeting, Hooth presented a compa-
ny proposal (G.C. Exh. 15) in which the Company
granted New Year's Eve, as the employees had request-
ed. The Company would retain replacements but would
rehire strikers from a preferential hiring list . There were
seven openings at this time . The Company agreed to
grant amnesty and Hooth added, provided the pending
National Labor Relations Board charges be settled.
Union President Ellis got upset and stated that the only
proposal that was acceptable was the mediator' s proposal
of February 26, but he would take the Company's March
12 proposal (R. Exh. 28) to the membership, although he
was sure it would be rejected.
With Respect to Negotiations
Hooth acknowledged that the Union requested finan-
cial data from it for the August negotiations and that if
furnished said information on August 18, 1980. He said
the Company agreed to furnish the information to the
UAW auditors because the Company 's financial situation
was so critical at that time.
Hooth acknowledged that in the December 11, 1980
meeting, the Union met the wage reduction of the Respond-
ent's proposal of November 5, but he rejected it, telling
them that on December 4, the Company was no longer
at that position . At that juncture , he contends the Union
had not met the Respondent 's November 5 proposal and
the issues of replacement and amnesty were outstanding.
The Company changed its position on wages on one
other occasion after the meeting on January 15 , 1981, in
the meeting on March 4, 1981.
Hooth further testified that after he received the union
auditor 's report in August 1980, he pointed out to the
committee that the report was inaccurate ; that instead of
Respondent 's losses being $135,000 they were in fact a
half million dollars ; that the 19-percent lost in sales re-
ferred only to die sales , which were not stamping busi-
ness. The loss in stamping sales was 25 or 26 percent (R.
Exh. 24). Hooth further testified that the Company noti-
fied the replacements that they were permanent employ-
ees around the end of December 1980.
Millie McCullum testified that on the afternoon before
or after the second negotiating meeting with manage-
ment she heard Delores Cunningham ask Hooth "what
are you doing to us? [E]verytime we come near an
agreement . . . then you go meet with Dick and then
you come back and take it away ." Hooth replied that he
had instructions not to give but to take away. Delores
asked him whom were from , and Hooth said , "Taylor."
She further testified that between February 16 and April
1980, she heard Ellis ask the Company (Taylor) on at
least two occasions to return the assembly work from
Wauseon, Ohio , was persuaded by the demeanor of
McCullum, as well as by other credited testimony and
the record and circumstantial evidence that her testimo-
ny was truthful and it is credited.
A careful review of the respective positions of the par-
ties expressed in their written and oral proposals and
counterproposals during their informal discussions and
910 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
bargaining sessions between August 28 and December 4,
1980, reveals that the parties were, in my judgment, en-
gaged in hard bargaining, which became harder after the
employees went on strike on September 9, 1980. The
record nevertheless shows that on September 11, the
Union agreed to several significant items of the Compa-
ny's September 5 proposal (G.C. Exh. 12, items A, B, D,
and 5 random days). However, the Company presented a
new proposal (G.C. Exh. 13) on November 5, 1980.
Without the Company revoking and without the
Union verbally rejecting the Company's September 5,
$2-wage-reduction proposal (G.C. Exh. 12) on Novem-
ber 12, the Union made a counterproposal of $1-wage re-
duction for all employees and agreed to item 2 (COLA)
and item 3 (Blue Cross/Blue Shield, of the Company's
November 5 proposal. The Union also agreed to item 3
(Blue Cross/Blue Shield) and item 3B (sickness and acci-
dent insurance) of the Company's November 5 proposal
(G.C. Exh. 13).
On November 25, the Union made another wage-bene-
fit reduction proposal of $1.25 for all workers, and the
Company's representative said he would talk it over with
the Company.
On December 4, the Union agreed to the Company's
November 5 wage-benefit reduction proposal of $2 for
production employees, but the Company advised the
Union that its November 5 proposal was rejected be-
cause the Company was opposed to an across-the-board
reduction; and that the Company was now at a $6.50-
per-hour proposal.
On December 15, the Company demanded an addition-
al $1-wage-benefit reduction, and the record shows that
the bargaining posture of the parties was and continued
as essentially enumerated by the General Counsel in his
brief to me as follows:
2. Union agreed to a $1 cut from maintenance and
no cut from tool room wages on December 11, and
then the Employer demanded larger cuts orally on
March 4 and in writing on March 12; 3. Parties had
agreed to settle S & A benefits at $120/week on
September 11, but the Employer suddently [sic] de-
manded termination of such benefits in its Decem-
ber 15 proposal; 4. Union acceded to MVF 1 plan
on November 12, then the Employer MVF 3 plan
on March 4, and when Union finally agreed to
choose between MVF 3 or equivalent on May 12,
the Employer withdrew offer of MVF 3 on May
14; 5. The Union agreed with the Employer on Sep-
tember I1 to keep life insurance at the present level
($13 G), then the Employer demanded a reduction
of benefits to $8 G on December 15; 6. On Novem-
ber 5 the Employer agreed to increase Christmas
bonus by $275.00 in exchange for reduction of paid
holidays from 15 to 6, then on December 15 it de-
manded an end to the bonus (but added 2 more paid
holidays, and later one more); 7. The parties agreed
on November 12 to maintain the present pension
contribution at $.34/hour, then on December 15,
the Employer proposed to remove post-strike hirees
from coverage and on May 14, announced a suspen-
sion of all contributions for 1 year; 8. The parties
agreed to a 2 year contract on November 12, and
then the Employer moved for a 1 year contract on
December 15. The only compensatory proposal
made by the Employer on December 15, when 6 of
the 8 "take-aways" occurred was to add 2 paid holi-
days. Two of the other "take-aways" were intro-
duced on March 12; the Employer's concessions
were to grant striker amnesty and to add 1 paid hol-
iday. It should be noted that the Employer has ac-
cused the strikers of nothing very serious in the
way of misconduct and the strike, up until the mass
picketing of May 8, was fairly peaceful. Granting
"amnesty" on May 12, was not much of a meaning-
ful concession, therefore. The most recent "take-
aways" occurred on May 14, and no compensatory
offers were made. It is not clear what practical
impact the Employer's announcement regarding sus-
pended pensions contributions has while striker [sic]
continues. Arguably, the Union already agreed to
oust post-strike hirees (i.e., replacements) from pen-
sion plan . See Unions proposal of February 26,
1981.
Conclusions
As previously indicated , it is observed that the parties
reached agreement fairly early in their bargaining ses-
sions on transfers , holidays, arbitration fund, and vaca-
tions . By November 12, the Union had made concessions
to relinquish drug and dental coverage , COLA, the opti-
cal plan , random days , and the Christmas bonus. On De-
cember 4 and 11 , the Union finally moved from its previ-
ously $1 - and $1.25-reduction position for all employees,
and agreed to a $2-wage-benefit reduction for production
employees . The Company , on the other hand, moved
from its original August $3 -wage-benefit to $2 on No-
vember 5 , but after the Union agreed to its $2 proposal
on December 4 and 11, Respondent increased its demand
to the original demand of $3 , and at a later date , further
increased its reduction demand , allegedly to get its pro-
duction rates competitive . The Company 's position oscil-
lated on the effective term of the contract or wage ro-
pener from 2 to 1 year , or on when the 1 year was to
commence again allegedly because business was getting
worse . Respondent did not provide updated financial
data to substantiate its repetitive contention, in this
regard.
By January 15, the Company changed the already
agreed on Blue Cross/Blue Shield, master medical, and
modified its pension contribution proposal . It demanded
to retain replacements , agreed to amnesty for strikers,
except those involved in picket line misconduct , and in-
cluded a demand on supervisors performing work in
grievance proceedings . The Respondent did not present
any financial data or any reasons to justify its changed
and new bargaining positions.
Section 8(d) and Section 8(a)(5) of the Act require
management and the bargaining representative of its em-
ployees "to meet at reasonable times and confer in good
faith with respect to wages , hours, and other terms and
conditions of employment." The courts have held that
this duty requires the parties to "approach the bargaining
ELTEC CORP 911
table with an open mind and purpose to reach an agree-
ment consistent with the respective rights of the parties."
L. L. Majure Transport Co. v. NLRB, 198 F.2d 735 (5th
Cir. 1952). More specifically, as the court said in NLRB
v. Herman Sausage Co, 275 F.2d 229, 232 (5th Cir. 1960):
[O]ne must recognize as well that bad faith is pro-
hibited though done with sophistication and finesse.
Consequently, to sit at a bargaining table, or to sit
almost forever, or to make concessions here and
there, could be the very means by which to conceal
a purposeful strategy to make bargaining futile or
fail Hence, we have said in more colorful language
it takes more than mere "surface bargaining," or
"shadow boxing to a draw," or "giving the Union a
runaround while purporting to be meeting with the
Union for purpose of collective bargaining."
Because the Union in the instant proceeding has made
considerable concessions on COLA, the optical plan,
random days, and the Christmas bonus, the "that is it"
(take it or leave it) or all or nothing-at-all approach by
which the Company rejected the union proposals and
counterproposals, reneging on items already agreed on
and presenting and changing its own bargaining propos-
als and counterproposals, taking a harder and harder bar-
gaining position since December 115, 1980, without offer-
ing any substantiated reasons or justifications therefor,
and finally only making a qualified concession to the one
outstanding issue on amnesty, such conduct clearly con-
stituted surface bargaining by Respondent, without a
good-faith intent to reach a final agreement. Carpenters
Local 1780, 244 NLRB 277, 281 (1979), and Metlox Mfg.
Co., 225 NLRB 1317, 1323 (1976).
Whenever the Respondent reneged on bargaining
issues already agreed on, its explanation for such action
was that business was getting worse or it was trying to
make its parts assembly operation competitive. Respond-
ent offered no probative financial data to support these
contentions, which I do not credit, and I find in the ab-
sence of such probative reasons or justifications that Re-
spondent's conducts obstructed the collective-bargaining
process. NLRB v. Insurance Agents' International Union
(Prudential Insurance), 361 U.S. 477, 498 (1960).
I further conclude and find that by embarking on its
course of surface bargaining on and subsequent to De-
cember 15, 1980, Respondent frustated the Union in an
effort to bargain in good faith and prolonged the strike
commenced on September 9, 1980, thereby converting
the economic strikers into unfair labor practice strikers
(as of December 15) entitled to full reinstatement rights.
National Fresh Fruit & Vegetable Co., 227 NLRB 2014
(1977); C & E Stores, 221 NLRB 1321, 1322 (1976).
IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES
ON COMMERCE
The activities of the Respondent set forth in section
III, above, occurring in close connection with its oper-
ations as described in section I, above, have a close, inti-
mate, and a substantial relationship to trade, traffic, and
commerce among the several States, and tend to lead to
labor disputes burdening and obstructing commerce and
the free flow of commerce.
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 protected rights, by unilaterally deciding
and actually terminating its parts assembly operation,
without first notifying, consulting with, and affording the
Union, the exclusive bargaining representative of its unit
employees, a reasonable and adequate opportunity to
bargain about its decision and action, and Respondent
has failed and refused to bargain with the Union in viola-
tion of Section 8(a)(1) and (5) of the Act, the recommend
Order will provide that Respondent cease and desist
from engaging in such conduct, and that it make those
laid-off employees whole for any loss of earnings occa-
sioned by its unlawful conduct, within the meaning of
and in accord with the Board's decision in F. W. Wool-
worth Co., 90 NLRB 289 (1950), and Florida Steel Corp.,
231 NLRB 651 (1977),2 except as specifically modified
by the wording of such recommended Order.
Because of the character of the unfair practices found,
the recommended Order will provide that Respondent
cease and desist from or in any like or related manner
interfering with, restraining, and coercing employees in
the exercise of their rights guaranteed by Section 7 of
the Act. NLRB v. Entwistle Mfg. Co., 120 F.2d 532, 536
(4th Cir. 1941).
On the basis of the above findings of fact, and on the
entire record in this case, I make the following
CONCLUSIONS OF LAW
1. Plymouth Stamping Division, Eltec Corporation
(the Respondent) is an employer engaged commerce
within the meaning of Section 2(6) and (7) of the act.
2. Local 985, United Automobile, Aerospace and Agri-
cultural Implement Workers of America (UAW) is and
has been at all times material a labor organization within
the meaning of Section 2(5) of the Act.
3. By failing and refusing to furnish the Union with fi-
nancial information for its consideration in determinng if
or how much economic (financial) relief the Union was
able or willing to grant, at the Employer's requests, Re-
spondent has violated Section 8(a)(1) and (5) of the Act.
4 By unilaterally deciding and actually terminating its
parts assembly operation without first notifying, consult-
ing with, and affording the Union (Local 985) reasonable
and adequate opportunity to bargain with it about its de-
cision and action, the Respondent has violated Section
8(a)(1) and (5) of the Act.
5. By constantly changing its bargaining position and
increasing its demands without making any significant
concessions while the Union was making nearly all of
2 See generally Isis Plumbing Co, 138 NLRB 716 (1962)
912 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
the concessions , the Respondent has engaged in surface Union and has prolonged the strike thereby converting
bargaining , in bad faith , in violation of Section 8(a)(5) of the economic strikers into unfair labor practice strikers
the Act. since December 15, 1980.
6. By engaging in such surface bargaining the Re- [Recommended Order omitted from publication.]
spondent has frustrated the good-faith efforts of the