Engineered Control Systems, Inc.

National Labor Relations Board - Board Decisions

Mar 29, 1985

274 N.L.R.B. 1308 (N.L.R.B. 1985)

1308 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Engineered Control Systems, Inc. and International
Brotherhood of Electrical Workers, Local 1969.
Case 20-CA-18539
29 March 1985
"(b) Unlawfully sponsoring a petition to decerti-
fy the Union as exclusive bargaining representa-
tive."
2. Substitute the attached notice for that of the
administrative law judge.
DECISION AND ORDER
BY CHAIRMAN DOTSON AND MEMBERS
HUNTER AND DENNIS
On 17 October 1984 Administrative Law Judge
Jay R. Pollack issued the attached decision. The
Respondent filed exceptions and a supporting brief
The General Counsel filed a response brief and a
limited exception to the remedy.
The Board has considered the decision and the
record in light of the exceptions and briefs and has
decided to affirm the judge's rulings, findings, i and
conclusions and to adopt the recommended Order
as modified.2
ORDER
The National Labor Relations Board adopts the
recommended Order of the administrative law
judge as modified below and orders that the Re-
spondent, Engineered Control Systems, Inc., Menlo
Park, California, its officers, agents, successors, and
assigns, shall take the action set forth in the Order
as modified.
1. Insert the following as paragraph 1(b) and re-
letter the subsequent paragraphs.
' The General Counsel did not allege that the Respondent violated the
Act with respect to the Respondent's president Frank Palacios' conduct
on 29 July 1983, which conduct gave rise to the decertification petition
filed by employee Robert Pearson on 5 August 1983 Therefore, we do
not adopt the judge's finding that Palacios gave unlawful support to the
filing of that petition
The Respondent excepts, inter alia, to the finding that it violated the
Act by withdrawing recognition from the Union on 30 September when
the parties' contract expired It contends that the 5 August decertification
petition justified its conduct because the petition demonstrated that the
Union had lost majority support, that since the petition predated any
unfair labor practices committed by the Respondent it was free of taint
and, irrespective of any intervening unfair labor practices, remained a
viable basis for measuring the Union's majority status on the contract's
expiration The Respondent's contentions fail for two reasons First, the 5
August petition was signed by only one employee, Pearson As of 30
September the Respondent had three employees, Pearson and the Lopez
brothers, Dave and Dan Thus, as of the date of the Respondent's with-
drawal of recognition, the petition constituted a basis for doubting the
continued support for the Union of at most one-third of the unit-an in-
sufficient basis standing alone to justify the Respondent's actions Second,
the Respondent's unlawful conduct after the 5 August petition was such
that it may well have been the reason for Pearson's alleged continued re-
fusal to support the Union Accordingly, the Respondent cannot rely on
this earlier expression of opposition to the Union to support its withdraw-
al of recognition
2 In adopting the judge's finding that the Respondent violated Sec
8(a)(1) of the Act by soliciting the October 1983 decertification petition,
we do not rely on Pearson's testimony that he would not have filed the
petition without Palacios' intervention
The judge inadvertently failed to provide a remedy for this violation
The General Counsel has excepted to this failure We Shall modify the
recommended Order and notice to include the appropriate remedial lan-
guage
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.
Section 7 of the Act gives employees these rights.
To organize
To form, join, or assist any union
To bargain collectively through representa-
tives of their own choice
To act together for other mutual aid or pro-
tection
To choose not to engage in any of these
protected concerted activities.
WE WILL NOT fail or refuse to bargain collec-
tively with International Brotherhood of Electrical
Workers Local 1969 with respect to the rates of
pay, wages, hours of employment, and other terms
and conditions of employment of our employees in
the following appropriate unit:
All full-time and regular part-time sub-fore-
men, wiremen, and shop helpers; excluding all
other employees, guards, and supervisors as
defined by the Act.
WE WILL NOT refuse to recognize the Union as
the exclusive representative for purposes of collec-
tive bargaining of the employees in the unit de-
scribed above.
WE WILL NOT deal directly with employees in
derogation of the Union's status as the exclusive
bargaining representative and WE WILL NOT threat-
en to close our business rather than sign an agree-
ment with the Union.
WE WILL NOT unilaterally change the terms and
conditions of employment of our employees, unilat-
erally discontinue payments to the pension fund,
and unilaterally discontinue the seniority and recall
provisions of our expired collective-bargaining
agreement without first giving the Union an oppor-
tunity to bargain over such matters.
WE WILL NOT induce our employees to file or
otherwise sponsor a petition to decertify the Union
as their exclusive bargaining representative.
274 NLRB No. 191
ENGINEERED CONTROL SYSTEMS 1309
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 recognize and bargain collectively
with the Union as the collective -bargaining repre-
sentative of all employees in the appropriate bar-
gaining unit described above.
WE WILL offer Dan Lopez immediate and full
reinstatement to his former job or, if that job no
longer exists , to a substantially equivalent position,
with full seniority , privileges , and benefits, and
make him whole for any losses he may have suf-
fered because of our failure to recall him , with in-
terest
WE WILL expunge from our files any reference
to our failure to recall Lopez in October 1983, and
notify him in writing that this has been done and
that evidence of our unlawful refusal to recall him
will not be used as a basis for future personnel
action against him.
WE WILL make whole our employees for any
loss of pension benefits which may have resulted
from our unfair labor practices , and pay the appro-
priate interest on such amounts of money.
ENGINEERED CONTROL SYSTEMS, INC.
DECISION
STATEMENT OF THE CASE
JAY R POLLACK, Administrative Law Judge . I heard
this case in trial at San Francisco , California , on May 22
and July 17, 1984 Pursuant to a charge filed against En-
gineered Control Systems, Inc (Respondent ) by Interna-
tional Brotherhood of Electrical Workers Union, Local
1969 (the Union ) on November 22, 1983, the Acting Re-
gional Director for Region 20 of the National Labor Re-
lations Board issued a complaint against Respondent on
January 31 , 1984, alleging that Respondent has violated
Section 8 (a)(1) and (5) of the National Labor Relations
Act (the Act).
The parties have been afforded full opportunity to
appear, to introduce relevant evidence , to examine and
cross-examine witnesses , and to file briefs The parties
waived the filing of posttrial briefs and argued the case
orally. Based on the entire record , and from my observa-
tion of the witnesses and their demeanor , I make the fol-
lowing
that Respondent at all times material herein has been an
employer engaged in and affecting commerce within the
meaning of Section 2 (2), (6), and (7) of the Act
The complaint alleges, the answer admits , and I find
that the Union is a labor organization within the meaning
of Section 2(5) of the Act
11 THE ALLEGED UNFAIR LABOR PRACTICES
A Background and Issues
Since at least 1979, Respondent and the Union have
been parties to a series of collective -bargaining agree-
ments covering the terms and conditions of employment
of Respondent 's employees in an agreed - upon unit i The
last collective -bargaining agreement was in effect from
October 1, 1980, through September 30, 1983 By letter
dated July 26, 1983 , the Union gave notice of its inten-
tion to open the existing agreement for the purpose of
negotiating a succeeding agreement On July 29, Re-
spondent notified the Union that John Sullivan, vice
president and manager of manufacturing , would serve as
its representative for negotiations On September 21, Sul-
livan met with Gordon Hill , business manager-financial
secretary , the Union 's negotiator . The parties did not
reach agreement on a succeeding contract and, on Sep-
tember 30 , Respondent terminated its agreement with the
Union . On October 3, Respondent made certain changes
in the terms and conditions of employment of its employ-
ees. Thereafter on October 12, a decertification petition
was filed by Robert Pearson, asserting that the employ-
ees no longer desired representation by the Union That
petition was subsequently withdrawn 2
Within this factual framework , the General Counsel
contends that Respondent violated Section 8(a)(1) of the
Act through its president Frank Palacios , by telling em-
ployees that Respondent would never bargain with the
Union and that Respondent would close its business
rather than sign with the Union; promised employees in-
creased wages if they withdrew support from the Union;
and solicited employees to sign a petition seeking decerti-
fication of the Union Further, the General Counsel con-
tends that Respondent violated Section 8(a)(5) of the Act
by withdrawing recognition from the Union , directly
dealing with employees in derogation of the Union's rep-
resentative status and by unilaterally changing certain
terms and conditions of employment of employees in the
bargaining unit The General Counsel contends that after
the expiration of the contract , Respondent unlawfully
changed the job assignments of employees in the catego-
ry of helpers, ceased making payments to the pension
plan required by the 1980-1983 collective -bargaining
FINDINGS OF FACT AND CONCLUSIONS
I JURISDICTION
Respondent is a California corporation engaged in
Menlo Park in the custom manufacture of electronic con-
trol panels During its fiscal year ending July 1, 1983,
Respondent purchased and received at its Menlo Park fa-
cility, goods and materials valued in excess of $50,000 di-
rectly from suppliers located outside the State of Califor-
nia The complaint alleges, the answer admits , and I find
The parties agree and I find the following contractual unit appropri-
ate for the purposes of collective bargaining within the meaning of Sec
9(b) of the Act
All full-time and regular part - time sub-foremen , wiremen , and shop
helpers, excluding all other employees , guards, and supervisors as de-
fined by the Act
2 The petition in Case 20-RD- 1829 was filed by Pearson on October
12, 1983 , and withdrawn on May 18, 1984, with the approval of the Re-
gional Director Earlier on August 5, 1983, Pearson had filed a petition in
Case 20-RD- 1813, and withdrew that petition on September 13, 1983, at
the solicitation of the Regional Director
1310 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
agreement; and failed to follow the procedure for the
recall of employees from layoff Respondent denies that
it has violated the Act and contends that it had no duty
to bargain with the Union after August 5, 1983. Further,
Respondent contends that its failure to recall the employ-
ee in question, Dan Lopez, was consistent with the re-
cently expired contract and that it did not engage in the
violations of Section 8(a)(1) as alleged in the complaint.
Finally, Respondent contends that even if it engaged in
violations of the Act, its conduct had no effect on the
decertification petition and the employees' withdrawal of
support from the Union.
B Events Leading Up to the August 5 Petition
In 1983 Respondent was experiencing economic prob-
lems. The number of jobs it successfully bid was down
drastically. This resulted in a decrease in the number of
employees in the bargaining unit and frequent periods of
layoff. For example, in July 1983, at the time the parties
exchanged opening letters for a succeeding contract,
only one employee (Robert Pearson) was working and
one other (Dan Lopez) retained recall rights.
Dan Lopez was on layoff between April 25 and
August 29, 1983 In mid-July, Lopez called Robert Pear-
son, then a subforeman, 3 to discuss the prospects of
Lopez' return to work. Pearson and Lopez discussed the
possibility that Respondent would not sign another con-
tract with the Union and the possibility of Pearson and
Lopez doing subcontracting work for Respondent.
Lopez, while on layoff, was performing work as an inde-
pendent contractor and discussed the possibility of form-
ing a partnership with Pearson. The matter of decertifi-
cation was raised in the context of the two employees
having to decertify the Union before they could subcon-
tract with Respondent. It is not clear who raised the sub-
ject of decertification 4
A few days after this conversation with Pearson,
Lopez received a telephone call from Pearson. Pearson
told Lopez that he (Pearson) "had done a dumb thing."
Pearson said that he was discussing Respondent's finan-
cial problems with Frank Palacios, Respondent's presi-
dent, and that Pearson had mentioned decertifying the
Union to Palacios Lopez suggested that Pearson discuss
subcontracting with Robert Woldt, Respondent's market-
ing manager, who had the responsibility for bidding jobs.
Pearson said he would talk with Woldt. According to
Pearson, he phoned Lopez after he had filed the petition
and apologized for doing a "dumb thing." According to
Pearson the dumb thing was filing the petition without
Lopez' "help or cooperation."
While Pearson testified that Palacios did not pressure
him to file the petition, he testified that he did not know
what a petition was before talking to Palacios in July.
Pearson approached Palacios to discuss the possibility of
Respondent subcontracting work to Pearson and Lopez.
3 The parties stipulated that Pearson was an employee within the
meaning of the Act until approximately October 10, 1983, when he was
promoted and became a supervisor within the meaning of the Act
" Although Pearson testified that Lopez first supported the idea of de-
certification and later had a change of heart, he did not deny the conver-
sation as testified to by Lopez According to Pearson, he had many such
conversations with Lopez and could not recall the specifics
Neither Palacios nor Pearson testified as to the specifics
of the conversation However, Pearson testified that Pa-
lacios gave him a decertification form to fill out Re-
spondent's secretary then filled out a sample form and
Pearson copied that information on a blank form in his
own handwriting The decertification petition was dock-
eted by the Regional Director on August 5, 1983. How-
ever, the petition was filed less than 60 days prior to the
expiration of the contract and pursuant to the Board's
"insulated period" rule,5 the Regional Director solicited
withdrawal of the petition as untimely Pearson with-
drew the petition with the Regional Director's approval
on September 13 Palacios testified that he had no discus-
sions with Pearson regarding the petition and did not aid
Pearson in the filing of the petition Palacios' denials are
not credited.
C The Events Leading Up to the Expiration of the
Contract
During the middle of August, while on layoff, Lopez
went to see Palacios to discuss the bargaining proposals
and the possibility of subcontracting work for Respond-
ent Lopez began by telling Palacios that the Union's
contract proposals (submitted in late July) were only
proposals and that everything was negotiable. Palacios
asked how they could improve on the present contract.
Lopez said he did not know but that "anything is negoti-
able." Palacios told Lopez about Respondent's financial
problems and said that if he had to sign a contract, he
would be forced to close the doors or go out of business.
Lopez then asked if a contract could not be obtained,
could a side deal be worked out so that he and Pearson
could do subcontracting for Respondent Palacios said
that the Union would have to be decertified before that
could happen. Lopez asked if there was a way to sub-
contract without decertifying the Union and Palacios
said that would be against the law. Lopez said if it were
proven to him that Respondent was in a bad financial
position, he would go along with decertifying the Union.
Lopez asked what the subcontracting rates would be and
Palacios answered $18 an hour. Lopez then asked why
Palacio could not pay the same rate under a union con-
tract and Palacios said that the restrictions in the union
contract were "strangling" him Lopez suggested that
the contract be amended and Palacios answered that he
had tried to amend the contract but it was not possible
Palacios asked if Lopez had seen the decertification peti-
tion and then showed Lopez a blank petition form.
Lopez said he did not want to decertify the Union.
Lopez said he would like to see something worked out
and would speak with the other employees Palacios
5 Under the "insulated period" rule, the parties to a contract which is
approaching its expiration date are provided with a 60-day "insulated
penod" immediately preceding and including the expiration date to nego-
tiate and execute a new contract. See, e g , Electric Boat Division, 158
NLRB 956 (1964), Deluxe Metal Furniture Co, 121 NLRB 995 (1958).
The purpose of the rule is to avoid as much disruption of labor relations
as possible dunng the contract term The rule is also designed to prevent
"the threat of overhanging rivalry and uncertainty" dunng the bargaining
period and to elimimate the possibility for employees to wait and see how
bargaining is proceeding and use another union as a threat to force their
current representatives into unreasonable demands.
ENGINEERED CONTROL SYSTEMS
asked why, since Lopez agreed to his wage offer, Lopez
would not want to decertify the Union Lopez said it
was not a matter of mistrusting Palacios but rather that
Lopez felt more secure with a contract. Palacios said his
"people" would be contacting Lopez. Lopez said he
wanted to discuss these matters with some people before
agreeing to decertify the Union.
After this discussion with Palacios, Lopez went to
report to Pearson about his meeting with Palacios Pala-
cios approached the two employees and told them that
the meeting (between Palacios and Lopez) had not taken
place
Palacios testified that he had a conversation with
Lopez just prior to the employee's return to work on
August 29. Lopez had the Union's contract proposals
with him and told Palacios that the proposals should not
be taken too seriously According to Palacios, Lopez
wanted to know if Palacios would subcontract work to
Lopez and Pearson. Palacios told Lopez that in the past
he had subcontracted work to former employees. Lopez
asked what Palacios would be willing to pay and Pala-
cios answered that it depended on the type of work in-
volved. Palacios said that Respondent had been greatly
underbid in recent times and told Lopez of an instance
where a competitor had won the contract with a bid of
only $18 an hour Palacios told Lopez that if Lopez had
a company of his own, Respondent would subcontract
work to him but Palacios said that he could not do it
now because the Company had a legal obligation to ne-
gotiate with the Union. Lopez then asked if Palacios
would subcontract to him after the contract expired. Pa-
lacios answered that he would have to negotiate with the
Union after the contract expired for a period of 1 year.
Palacios then showed Lopez the decertification petition
filed by Pearson and said that it was not easy to decerti-
fy the Union According to Palacios, Lopez knew that
Pearson had already withdrawn the petition 6
I have decided to credit Lopez' testimony over that of
Palacios First, Lopez appeared to be a more credible
witness than Palacios. Second, Lopez' testimony was
consistent with documentary evidence and the credible
testimony of other witnesses On the other hand, Pala-
cios' testimony was inconsistent with the credible evi-
dence and was logically improbable under the circum-
stances of the case Thus, Palacios is not credited unless
his testimony is consistent with other credited testimony.
As stated above, on August 26, 1983, Lopez was
called by Pearson to return to work on August 29.
Lopez told Pearson that he had various jobs to finish
which would cause him to be late for work often and oc-
casionally absent. Pearson said that Lopez could return
to work under such conditions. Pearson corroborated
Lopez' testimony that he had agreed that Lopez could
report to work under these conditions Further, Pearson
testified that Sullivan, his immediate supervisor, had
agreed to this arrangement. Thereafter, on September 13,
Lopez' brother Dave was rehired to perform wire and
assembly work Both Dave and Dan Lopez were laid off
on October 7.
6 In fact the petition was not withdrawn until September 13, 1983
1311
As mentioned earlier, Respondent had designated Sul-
livan as its negotiator. On September 21, Hill met with
Sullivan to discuss a succeeding contract. Sullivan told
Hill that the Company was experiencing financial prob-
lems and explained that the Company needed relief in
the form of utilizing a "shop worker type of employee "
Hill said if the Company had more employees something
like that might be worked out The parties discussed ex-
tending the current agreement 6 months and then negoti-
ating again after reassessing the Company's financial po-
sition Hill said he would check with the employees to
ascertain whether they would agree to a 6-month exten-
sion Hill said he would inform Sullivan of the employ-
ees' decision.
After speaking with Sullivan, Hill talked to Lopez and
Pearson. The employees told Hill that they thought the
Company might not have enough work for them and
that they might be working on a subcontract basis Hill
gave his opinion that the employees would be more
secure with a union contract. The employees said they
would have to think it over Hill then told Sullivan that
the employees needed more time to decide whether they
wanted a 6-month extension and that Hill would notify
Sullivan of the employees' decision in about a week.
Approximately September 28, Hill called Lopez and
asked whether the employees would agree to a 6-month
contract extension. Lopez said that the extension would
be okay. Hill called Sullivan, during the first week of
October, and told him that the employees had agreed to
a 6-month contract extension and that Hill had prepared
such an agreement for Sullivan's signature Sullivan an-
swered that he did not have the authority to agree to an
extension and would have to talk to Palacios. Sullivan
agreed to talk to Palacios and get back to Hill. Hill
called Sullivan numerous times thereafter but never re-
ceived a return call. Finally, in November 1983, the
Union filed the instant unfair labor practice charge.
On September 26, Lopez received a memorandum ad-
dressed to him and Pearson concerning a job project of
Respondent's. On September 28 Lopez and Pearson re-
ceived another memorandum from Woldt concerning the
same project. Lopez took the memoranda home and
compared them with the job specifications to determine
whether he and Pearson could submit a labor bid to
Woldt. Lopez and Pearson determined that 'the project
was too big and did not make a bid or offer to subcon-
tract the job Pearson testified that Woldt gave the
memoranda to him and Lopez to obtain an amount of
labor hours for that project. According to Pearson,
Woldt was responding to his inquiries about subcontract-
ing work Palacios denied any knowledge of the memo-
randa from Woldt to Pearson and Lopez. Woldt was not
called to testify in this case.
On September 29, Lopez approached Palacios and said
that he was no longer interested in subcontracting and
that he agreed to the 6-month extension of the union
contract. According to Lopez, Palacios asked, "what ex-
tension?" Lopez answered the 6-month contract exten-
sion agreed to by Hill and Sullivan Palacios said that
Lopez was mistaken Palacios then called Sullivan over
and asked whether Sullivan had agreed to an extension.
1312 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Sullivan said he had so agreed and Palacios began to
argue with Sullivan, Dave Lopez testified that he heard
Palacios say that he (Palacios) was not aware of any ex-
tension Dave heard Dan tell Palacios that Hill and Sulli-
van had agreed to an extension. Sullivan then confirmed
that he had agreed to a 6-month extension of the con-
tract. Palacios said he could not agree to a contract and
went to Sullivan's office to discuss the matter with Sulli-
van Neither Palacios nor Sullivan denied this conversa-
tion as testified to by Dan and Dave Lopez.
Sullivan notified the Union, by letter dated September
30, that Respondent was terminating the contract Ac-
cording to Sullivan, Palacios took over negotiations in
late September or early October However, Palacios and
Sullivan concede that there were no conversations be-
tween the Union and Respondent after Hill asked Sulli-
van to sign the 6-month extension
On September 30, Lopez approached Palacios and
asked what would happen on Monday, October 3, if the
union contract expired Palacios said he would talk to
Lopez on Monday Lopez asked why Palacios could not
agree to an extension and Palacios said that if he had to
sign a contract with the Union, he would be forced to
close his doors. Palacios said "if God came down and
told me to sign a contract, I would have to say no."
Lopez said he thought Palacios did not want to work
out an alternative union contract that would enable the
Company to survive Palacios answered that it was a
matter of opinion and Lopez said his opinion was pretty
close to the truth On October 3, Palacios approached
Lopez and said that they could now talk about wages.
According to Lopez, Palacios offered a pay increase and
Lopez said he had to discuss it with Hill. Palacios an-
swered that the "offer is still there " Lopez testified that
he received a wage increase before he was laid off on
October 7. Respondent's records reveal that Lopez was
paid the same wage rate during his last week of employ-
ment, however, his take home pay increased because no
deductions were taken out of his pay According to Pala-
cios, Lopez was taken off Respondent's payroll and paid
as an independent contractor after the payroll period
ending September 27 Palacios first testified that Pearson
made such an agreement with Lopez with the approval
of Palacios Palacios later testified that he had no recol-
lection of such an agreement but had reconstructed it
based on the records showing no payroll deductions for
Lopez after September 27. Dave Lopez testified that he
heard Palacios tell Dan that he could not agree to a con-
tract extension, and that he would have to close his
doors Palacios admitted that he said he would have to
close his doors if he signed a union agreement and that
he said that if God told him to sign a contract, he would
not sign the contract. According to Palacios, he ex-
plained that he could not compete with nonunion manu-
facturers with a union contract and that if he signed a
union contract, the result would be closing his doors.
On October 7, Sullivan laid off both Dan and Dave
Lopez due to a lack of work 7 Sullivan told both Lo-
pezes that he expected to be able to recall them in a
week or two On approximately October 12, Respondent
hired a former employee instead of recalling Dan Lopez.
According to Palacios and Sullivan, Lopez was not re-
called because of his habit of reporting late for work and
that the employee hired in his stead had a better attitude.
Lopez was told by Pearson, then a supervisor, that Pala-
cios and Sullivan did not want him recalled to work
However, Pearson gave Lopez no reason for that action.
The collective-bargaining agreement provided.
SENIORITY
Section 1. Definition. In laying off, recalling or
promoting, where merit and ability are equal, the
principle of seniority shall prevail.
Section 3. Suspension of Seniority In determining
seniority, no deductions shall be made for any time
lost because of illness, approved leave of absence,
accident, injury or layoff, unless these conditions or
combination thereof exceed twelve (12) continuous
months
Any employee resigning or being discharged for
cause shall immediately forfeit all seniority previ-
ously accrued.
Section 6. Recall. Recall privileges shall be to the
employee's current classification held prior to the
downgrade and shall be maintained from the effec-
tive date of such downgrade in accordance with the
provisions of Section 3 of this Article. If subse-
quently laid off, recall privileges to the downgrade
classification shall be maintained for a period of
time in accordance with the provisions of Section 3
of this Article.
The same application of seniority shall prevail as
provided in Section 1 of this Article in recalling
employees on layoff and they shall be recalled in
the order of most seniority, i.e., "the last out, first
in" rule.
Finally, after the expiration of the contract, Respond-
ent ceased making payments to the pension trust fund re-
quired by the collective-bargaining agreement and
changed the job duties of the employees in the job classi-
fication of helpers No notice was given to the Union of
these changes. According to Palacios and Sullivan, they
were awaiting a written contract proposal from Hill. As
indicated earlier Palacios and Sullivan are not credited
on this point.
PRELIMINARY CONCLUSIONS
1. The starting point for analysis is the applicable law
regarding a union's presumption of majority stemming
from its collective-bargaining agreement. Sahara-Tahoe
Hotel, 241 NLRB 106, 107-108 (1979), enfd. 648 F.2d
553 (9th Cir. 1980)•
It is well settled that the existence of a prior con-
tract, lawful on its face, raises a dual presumption of
The General Counsel does not allege a violation in regard to the the Act in failing to recall Dan Lopez pursuant to the expired collective-
layoff However, the General Counsel alleges that Respondent violated bargaining agreement
ENGINEERED CONTROL SYSTEMS 1313
majority-a presumption that the Union was the
majority representative at the time the contract was
executed, and a presumption that its majority con-
tinued at least through the life of the contract Fol-
lowing the expiration of the contract, the presump-
tion continues and, though rebuttable, the burden of
rebutting it rests on the party who would do so. To
withdraw recognition lawfully, either this presump-
tion must be overcome by competent evidence that
the Union in fact did not represent a majority at the
time of the withdrawal, or the Employer must es-
tablish on the basis of objective facts that it had a
reasonable doubt as to the Union's continuing ma-
jority status. This latter test, which Respondent
claims it meets, requires more than mere evidence
of the Employer's subjective state of mind. For the
test to be met, the assertion must be supported by
objective considerations, that is, some reasonable
ground for believing that the Union has lost its ma-
jority status. [Citations omitted.]
The defense that the Union no longer enjoys majority
status can only be raised in a context free of unfair labor
practices. Western Truck Services, 252 NLRB 688, 691
(1980); Chet Monez Ford, 241 NLRB 349 (1979) See also
Eastern Washington Distributing Co., 261 NLRB 1149,
1152-53 (1975), The theory being that the employer's
misconduct may well have induced the union's loss of
majority. Frank Bros. Co. v. NLRB, 321 US 702, 705-
706 (1944). As will be discussed below, Respondent com-
mitted various unfair labor practices designed to under-
mine the status of the Union as exclusive bargaining rep-
resentative prior to the expiration of the contract and its
withdrawal of recognition from the Union on September
30, 1983.
2. Section 8(a)(5) creates an obligation on the part of
an employer to bargain with an incumbent union as the
exclusive bargaining representative of its employees in
the matter of wages, hours, terms and conditions of em-
ployment It may not attempt to circumvent the exclu-
sive status of the bargaining agent by attempting to deal
directly with its represented employees. Medo Photo
Supply Corp. v. NLRB, 321 U S. 678 (1944).
In the instant case, in response to a question, Palacios
told Lopez that he would be willing to subcontract with
Lopez if the Union were decertified Palacios told Lopez
it would be illegal for him to subcontract with employ-
ees if the Union was not decertified. Palacios discussed
an $18-an-hour labor figure and said that "his people"
would contact Lopez Further, Palacios showed Lopez a
petition and sought to induce Lopez to decertify the
Union Palacios was well aware of the unlawful nature
of these conversations as evidenced by his statements to
Lopez and Pearson that the discussions "never existed."
Shortly after this discussion with Lopez, Woldt present-
ed Pearson and Lopez with an opportunity to bid on a
job project of Respondent's. The same labor figure men-
tioned by Palacios to Lopez was utilized by Woldt in his
presentation to Lopez and Pearson Notwithstanding that
Lopez and Pearson initiated the idea of subcontracting, I
find that Respondent unlawfully bypassed the Union by
directly bargaining with Lopez and Pearson. Guardian
Ambulance Service, 225 NLRB 1127, 1132 (1977), Taft
Broadcasting Co., 264 NLRB 185 (1982).
3 As found earlier, on September 30, Palacios told
Lopez that if he had to sign a union contract he would
have to "close his doors" and that even if "God told
[him] to sign a contract, [he] would have to say no." The
Board and the courts have recognized the right of an
employer to make a prediction as to the precise effects
he believes unionization will have on his company. See,
e.g., NLRB v. Gissel Packing Co, 395 U S 575, 618
(1969), Bacchus Wine Cooperative, 251 NLRB 1552, 1559
(1980). However, the prediction must be carefully
phrased on the basis of objective fact to convey an em-
ployer's belief as to demonstrably probable consequences
beyond his control. Here, Palacios' comments were not
limited to the consequences of agreeing to any particular
contract or contract language, rather in the context of
bypassing the Union, he implied that any agreement with
the Union would cause him to close his business. Thus,
when Lopez suggested that any unfavorable terms could
be negotiated, Palacios still insisted on decertification
and insisted that he would close his business rather than
reach an agreement with the Union Accordingly, I find
Palacios' remarks to constitute an unlawful threat to
close his business in order to undermine the Union as ex-
clusive majority representative
4. On September 30, Respondent notified the Union
that it was terminating the collective-bargaining agree-
ment Thereafter on October 3, the first day following
the expiration of the contract, Respondent unilaterally
changed Lopez' status from employee to independent
contractor,8 and ceased making payments to the pension
trust funds. Thereafter, Respondent changed the work
duties of the employees in the classification of helper
Accordingly, I find that Respondent withdrew recogni-
tion from the Union on September 30 upon expiration of
the contract Since Respondent committed violations of
the Act designed to undermine the Union as exclusive
bargaining representative of its employees, I find that
Respondent cannot benefit from such unfair labor prac-
tices by withdrawing recognition from the Union 9 Ac-
cordingly I find that Respondent violated Section 8(a)(5)
and (1) of the Act when it withdrew recognition from
the Union.1° Further, I find that Respondent violated
Section 8(a)(5) and (1) when it unilaterally discontinued
payment to the pension fund without first bargaining
with the Union See, e g., NLRB v. Sky Wolf Sales, 470
F.2d 827, 830 (9th Cir 1972); Hen House Market No. 3,
175 NLRB 596 (1965), enfd 428 F.2d 133 (8th Cir
1970) Similarly, Respondent violated Section 8(a)(5) and
8 On October 3, Palacios made Lopez an offer of a wage increase but
Lopez insisted on first discussing the matter with his union representa-
tives
9 See , e g , Western Truck Services, supra, Chet Monez Ford, supra
10 Respondent 's argument that there is no causal connection between
the unfair labor practices and the Union's loss of majority status is with-
out merit The unfair labor practices herein were specifically designed to
undermine the majority status of the Union Further, the unfair labor
practices took place in a bargaining unit consisting of only two or three
employees and were directed to all employees At the very least, Re-
spondent's unfair labor practices created an atmosphere where the desires
of the employees as to union representation could not be fairly evaluated
1314 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
(1) by unilaterally changing the work duties of the em-
ployees in the classification of helper and unilaterally
changing a unit employee to an "independent contrac-
tor "
5. As discussed earlier, Respondent unlawfully with-
drew recognition from the Union on September 30 and
apparently felt free to disregard the existing terms and
conditions of employment. Lopez, who had previously
been given preference for recall under the contract, was
denied such preference after the unlawful withdrawal of
recognition. Lopez was given no reason for the refusal to
recall him
At the instant hearing, Respondent argued that the re-
fusal to recall Lopez was consistent with the expired
contract I find that argument unconvincing. During the
time period Respondent considered itself bound to the
bargaining agreement , Lopez was recalled to work, pur-
suant to seniority rights, notwithstanding commitments
which caused him to be late for work. Prior to the expi-
ration of the contract, Lopez' attendance problem was
not considered a sufficient reason to deny him seniority
rights. The only difference from Lopez' recall in August
and, the failure to recall him in October was that Re-
spondent felt it was no longer bound by its contract with
the Union. Accordingly, I draw the inference that Re-
spondent, believing itself free from the restrictions of a
union contract, decided not to recall Lopez. The argu-
ment that such action was consistent with the contract
was an afterthought for the purpose of this legal pro-
ceeding Accordingly, I find that the failure to recall
Lopez back to work on or about October 12 was another
unlawful unilateral change, consistent with the other
changes made by Respondent after September 30.
As indicated earlier, the General Counsel argued that
the failure to recall Lopez violated Section 8(a)(5) and
(1) of the Act The General Counsel conceded that the
layoff was lawful and did not allege a violation of Sec-
tion 8(a)(3) in the failure to recall Lopez Thus, there
was no allegation that the failure to recall Lopez was un-
lawfully motivated.
Since there was no allegation that the failure to recall
Lopez was unlawfully motivated, and because an unlaw-
ful unilateral change, even though motivated by econom-
ic considerations, is violative of Section 8(a)(5), I have
not applied the Board's Wright Line test i i Under the
Wright Line test , after the General Counsel proves that
the employee's protected conduct was a substantial or a
motivating factor in the discharge decision, the employer
can avoid being held in violation of the Act by proving
that the employee would have lost his job in any event
While the Wright Line test applies to a refusal to rehire
case as well as a discharge case, 12 the instant case does
not involve a question of motive. Rather, the questions
presented here were whether Lopez would have re-
ceived seniority rights and whether Lopez would have
been recalled pursuant to those seniority rights, under
the collective bargaining agreement The answer to both
questions is in the affirmative The business consider-
ations favoring hiring another employee instead of Lopez
are not material to the question of whether Respondent
violated its duty to bargain with the Union prior to insti-
tuting any unilateral change in the recall procedure See,
e.g., M & M Contractors, 262 NLRB 1472 (1982)
6. I find that Respondent further violated the Act in
the solicitation of the second decertification petition in
October. According to Pearson, Palacios "suggested"
that he file the petition and "prodded him into it " Pear-
son testified that he would have not filed the petition
without Palacios' intervention Further, this conduct
took place at the same time Palacios and Pearson were
discussing Pearson's new wage rate In fact, Pearson was
made a supervisor and given a wage increase Although
there is no evidence that Pearson's promotion or wage
increase was connected to the filing of the petition, it is
clear that the petition would not have been filed without
Palacios' support Respondent had withdrawn recogni-
tion from the Union and had instituted unilateral changes
prior to the filing of the petition Moreover, Palacios had
given unlawful support to the filing of the earlier untime-
ly petition in August. 13
CONCLUSIONS OF LAW
1. Respondent Engineered Control Systems, Inc is an
employer engaged in commerce and in a business affect-
ing commerce within the meaning of Section 2(2), (6),
and (7) of the Act
2. The Union , International Brotherhood of Electrical
Workers Union, Local 1969, is a labor organization
within the meaning of Section 2(5) of the Act
3. Respondent has engaged in unfair labor practices in
violation of Section 8(a)(5) and (1) of the Act by directly
dealing with employees in derogation of the Union's
status as bargaining representative and telling employees
that it would close its business rather than sign an agree-
ment with the Union, by withdrawing recognition from
the Union on September 30, 1983; by unilaterally chang-
ing the terms and conditions of employment of its em-
ployees; by failing and refusing to recall its employee
Dan Lopez, and by unilaterally discontinuing payments
to the pension funds as required by its collective-bargain-
ing agreement that expired September 30, 1983
4. Respondent has engaged in unfair labor practices in
violation of Section 8(a)(1) of the Act by unlawfully
sponsoring a petition to decertify the Union as exclusive
bargaining representative.
5. The unfair labor practices of Respondent as de-
scribed above affect commerce within the meaning of
Section 2(6) and (7) of the Act.
i' 251 NLRB 1083 (1980), enfd 662 F 2d 899 (1st Cir 1981), cert
denied 455 US 989 (1982) The Supreme Court approved the Wright
Line test in NLRB v Transportation Management Corp, 462 US 393
(1983)
12 See , e g , NLRB v Mount Desert Island Hospital, 695 F 2d 634, 639
(1st Cir 1982)
i 9 The General Counsel did not allege a violation of the Act regarding
Palactos' conduct on July 29 which gave rise to the decertification peti-
tion filed on August 5 Therefore, I make no independent finding of a
violation However, I have considered such evidence in concluding that
Respondent was engaged in a course of conduct designed to undermine
the Union's status as exclusive bargaining representative
ENGINEERED CONTROL SYSTEMS 1315
THE REMEDY
Having found that Respondent, Engineered Control
Systems, Inc , has engaged in certain unfair labor prac-
tices, I shall recommend that it be ordered to cease and
desist therefrom and that it take certain affirmative
action to effectuate the policies of the Act
Respondent shall be required to offer Dan Lopez rein-
statement to his former job or, if that position no longer
exists, to a substantially equivalent position, without prej-
udice to his seniority or other rights and privileges and
to make him whole for any losses he may have suffered
as a result of the unlawful refusal to recall him in the
manner set forth in F W. Woolworth Co, 90 NLRB 289
(1950), with interest computed in the manner set forth in
Florida Steel Corp., 231 NLRB 651 (1977). See generally
Isis Plumbing Co, 138 NLRB 716 (1962)
I shall recommend that Respondent be ordered to
resume recognition and bargaining with International
Brotherhood of Electrical Workers Union, Local 1969
Further, Respondent shall make whole its employees for
any losses suffered by the discontinuance of pension pay-
ments by paying to the appropriate pension funds the
amounts due under the benefit trust fund agreement In-
terest, if any, shall be paid in accordance with the provi-
sions of the employee benefit fund agreement. See West-
ern Truck Services, supra; Merryweather Optical Co., 240
NLRB 1213 (1979)
On July 17, 1984, Respondent's counsel stated at trial
that Respondent was no longer operating its Menlo Park
facility I leave to the compliance stage of this proceed-
ing the determination of the extent to which Respondent
is able to comply with the remedial order
On these findings of fact and conclusions of law and
on the entire record, I issue the following recommend-
edi4
ORDER
The Respondent, Engineered Control Systems, Inc,
Menlo Park, California, its officers, agents, successors,
and assigns, shall
I Cease and desist from
(a) Failing and refusing to bargain collectively with
International Brotherhood of Electrical Workers Union,
Local 1969, with respect to the rates of pay, wages,
hours of employment, and other terms and conditions of
employment of the employees in the appropriate unit de-
scribed below
All full-time and regular part -time sub-foremen,
wiremen, and shop helpers, excluding all other em-
ployees, guards , and supervisors as defined by the
Act
(c) Dealing directly with employees in derogation of
the Union's status as the exclusive bargaining representa-
tive and threatening to close its business rather than sign
an agreement with the Union
(d) Unilaterally changing the terms and conditions of
its employees, unilaterally discontinuing payments to' the
pension fund, and unilaterally discontinuing the seniority
and recall provisions of its expired collective-bargaining
agreement without first giving the Union an opportunity
to bargain over such matters
(f) In any like or related manner interfering with, re-
straining, or coercing employees in the exercise of the
rights guaranteed to them by Section 7 of the Act
2. Take the following affirmative action which is nec-
essary to effectuate the purposes of the Act
(a) Recognize and bargain collectively with the Union
as the collective-bargaining representative of all employ-
ees in the appropriate bargaining unit described above.
(b) Offer Dan Lopez full and immediate reinstatement
to his former job or, if that job no longer exists, to a sub-
stantially equivalent position, with full seniority, privi-
leges, and benefits and make him whole for any losses he
may have suffered because of the failure to recall him in
accordance with the provisions set forth in the section of
this decision entitled "The Remedy "
(c) Expunge from its files any reference to the failure
to recall Lopez in October 1983, and notify him in writ-
ing that this has been done and that evidence of this un-
lawful refusal to recall him will not be used as a basis for
future personnel action against him.
(d) Make whole its employees for any loss of pension
benefits which may have resulted from Respondent's
unfair labor practices, and pay the appropriate interest
on such amounts of money, as more fully described in
the section of this decision entitled "The Remedy "
(e) Post at its Menlo Park, California facilities copies
of the attached notice marked "Appendix 1115 Copies of
the notice, on forms provided by the Regional Director
for Region 20, after being signed by the Respondent's
authorized representative, shall be posted by the. Re-
spondent immediately upon receipt and maintained for 60
consecutive days in conspicuous places including all
places where notices to employees are customarily
posted. Reasonable steps shall be taken by the Respond-
ent to ensure that the notices are not altered, defaced, or
covered by any other material.is
(f) Preserve and, on request, make available to the
Board or its agents for examination and copying, all pay-
roll records, social security payment records, timecards,
personnel records and reports, and all other records nec-
essary to analyze the amount of backpay due under, the
terms of this Order.
(b) Refusing to recognize the Union as the exclusive
representative for purposes of collective bargaining of
the employees in the unit described above.
14 All outstanding motions inconsistent with this recommended Order
hererby are denied If no exceptions are filed as provided by Sec 102 46
of the Board's Rules and Regulations, the findings, conclusions, and rec-
ommended Order shall, as provided in Sec 102 48 of the Rules, be adopt-
ed by the Board and all objections to them shall be deemed waived for
all purposes
15 If this Order is enforced by a Judgment of a United States Court of
Appeals, the words in the notice reading "Posted by Order of the Na-
tional Labor Relations Board" shall read "Posted Pursuant to a Judgment
of the United States Court of Appeals Enforcing an Order of the Nation-
al Labor Relations Board "
16 If Respondent does not resume operations, copies of the above-rnen-
tioned notice shall be mailed to all sub-foremen, wiremen and shop help-
ers employed by Respondent during the period from August 1983 to July
1984 at their homes See Morin Grand Prix Motors Corp, 261 NLRB 1156
(1982)
1316 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
(g) Notify the Regional Director in writing within 20
days from the date of this Order what steps the Re-
spondent has taken to comply