Freedman Die Cutters, Inc.

National Labor Relations Board - Board Decisions

Sep 30, 2003

340 N.L.R.B. 422 (N.L.R.B. 2003)

DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 422
Freedman Die Cutters, Inc. and Local 107, Paper,
Allied-Industrial, Chemical and Energy Work-
ers International Union, AFL–CIO. Case 29–
CA–25110
September 30, 2003
DECISION AND ORDER
BY MEMBERS LIEBMAN, SCHAUMBER, AND
WALSH
On February 14, 2003, Administrative Law Judge Joel
P. Biblowitz issued the attached decision. The Respon-
dent filed exceptions.
The National Labor Relations Board has delegated 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 has decided to affirm the
judge’s rulings,1 findings, and conclusions and to adopt
the recommended Order.
ORDER
The National Labor Relations Board adopts the rec-
ommended Order of the administrative law judge and
orders that the Respondent, Freedman Die Cutters, Inc.,
Long Island City, New York, its officers, agents, succes-
sors, and assigns, shall take the action set forth in the
Order.

Jonathon Chait, Esq., for the General Counsel.
Jeffrey Russ, Esq., for the Respondent.
George Kirschenbaum, Esq. (Vladeck, Waldman, Elias & Eng-
elhard), for the Charging Party.
DECISION
STATEMENT OF THE CASE
JOEL P. BIBLOWITZ, Administrative Law Judge. This
case was heard by me on January 29, 2003, in Brooklyn, New
York. The complaint, which issued on November 7, 2002,1 and
was based on an unfair labor practice charge that was filed on
August 19 by Local 107, Paper, Allied-Industrial, Chemical and
Energy Workers International Union, AFL–CIO (the Union),
alleges that Freedman Die Cutters, Inc. (Respondent), ceased
operations at its facility and laid off all of its unit employees
without prior notice to the Union, and without affording the
Union an opportunity to bargain with the Respondent regarding

1 No exceptions were filed to the judge’s grant of the General Coun-
sel’s motion for partial default judgment regarding pars. 3, 6, 7, and 8
of the complaint. We adopt the judge’s grant of default judgment with
respect to complaint pars. 4 and 5.
With respect to complaint par. 5, which alleges the Union’s labor
organization status within the meaning of Sec. 2(5) of the Act, Member
Schaumber finds the Respondent’s answer sufficient to raise an issue
for hearing. However, he finds that the General Counsel met the bur-
den of proof on this issue by other undisputed factual allegations of the
complaint and by evidence adduced at the hearing.
1 Unless indicated otherwise, all dates referred to relate to the year
2002.
the effects of the plant closing on the unit employees, in viola-
tion of Section 8(a)(1) and (5) of the Act.
FINDINGS OF FACT
I. BACKGROUND
Counsel for the Respondent, in his answer dated December
16, 2002, stated, inter alia: “Neither admits nor denies the con-
clusory allegations set forth in paragraphs 3, 4, 5, 6, 7, 8, 12,
and 13 of the complaint and submits that General Counsel has
the burden of proving, by appropriate factual evidence, such
conclusory allegations.”2 After receiving Respondent’s answer,
counsel for the General Counsel, by fax dated December 18,
forwarded to counsel for the Respondent a copy of Sec. 102.20
of the Board’s Rules and Regulations. By further fax to coun-
sel for the Respondent dated December 24, counsel for the
General Counsel stated:

This confirms our telephone conversation of December
20, 2002, in which I explained to you the deficiencies in
your answer to the complaint in the referenced case.
I have discussed the matter with David Pollack, Re-
gional Attorney for Region 29. To summarize the Re-
gion’s position, your answer is insufficient because, under
Section 102.20 of the NLRB Rules, you must “specifically
admit, deny or explain each of the facts alleged in the
complaint.” By neither admitting nor denying the allega-
tions in paragraphs 3, 4, 5, 6, 7, 8, 12 and 13, you have
failed to answer these allegations of the complaint. If you
fail to amend your answer in advance of the trial, we will
move for summary judgment with respect to these allega-
tions.
Another copy of Section 102.20 of the NLRB Rules is
enclosed for your convenience.

The Respondent did not amend its answer and at the com-
mencement of the hearing counsel for the General Counsel
moved for partial summary judgment as to paragraphs 3, 4, 5,
6, 7, 8, 12, and 13 of the complaint because Respondent’s an-
swer did not comply with Section 102.20 of the Board’s Rules
and Regulations. That section provides: “The respondent shall
specifically admit, deny or explain each of the facts alleged in
the complaint, unless the respondent is without knowledge, in
which case the respondent shall so state, such statement operat-
ing as a denial.” In defense of his answer, counsel for the Re-
spondent defended that the Board’s Rules do not really require
an admission or a denial to conclusory allegations. I pointed
out to him that not all of the complaint allegations involved
therein were conclusory allegations and, regardless, the Board’s
Rules and Regulations clearly state that respondents must spe-
cifically admit or deny each allegation of the complaint. As the
Respondent neither admitted nor denied paragraphs 3, 4, 5, 6, 7,
8, 12, and 13, even after counsel for the General Counsel noti-
fied him that his answer to these allegations was insufficient,
the allegations contained therein that follow, shall be deemed to
be admitted:

2 In addition, Respondent’s answer contains no response to pars. 1,
2, and 9 of the complaint.
340 NLRB No. 46
FREEDMAN DIE CUTTERS, INC. 423
1. The charge in this proceeding was filed by the Un-
ion on August 19, 2002, and served by regular mail on Re-
spondent on August 20, 2002.
2. At all material times, Respondent, a domestic cor-
poration, with its principal place of business located at 30-
02 48th Avenue, Long Island City, New York, herein
called the Long Island City facility, has been engaged in
the business of embossing and die cutting.
3. During the past 12 month period, which period is
representative of its annual operations in general, Respon-
dent, in the course and conduct of its business operations
described above in paragraph 2, purchased and received at
its Long Island City facility goods, supplies and materials
valued in excess of $50,000 directly from points located
outside the State of New York.
4. At all material times, Respondent has been an em-
ployer within the meaning of Section 2(2), (6), and (7) of
the Act.
5. At all material times, the Union has been a labor
organization within the meaning of Section 2(5) of the
Act.
6. The following employees of Respondent, herein
called the Unit, constitute a unit appropriate for the pur-
pose of collective-bargaining within the meaning of Sec-
tion 9(b) of the Act:

All manufacturing employees, excluding executives,
salesmen, office employees, construction employees,
and sample department employees, guards and super-
visors as defined in the Act.

7. At all material times, the Union has been the desig-
nated collective-bargaining representative of the Unit, and
has been recognized as such representative by Respondent.
Such recognition has been embodied in successive collec-
tive bargaining agreements between the Union and Re-
spondent, the most recent of which is effective, by its
terms, for the period February 1, 2000 through January 31,
2003.
8. At all material times, the Union, by virtue of Sec-
tion 9(a) of the Act, has been the exclusive collective-
bargaining representative of the employees in the Unit.
9. On or about August 13, 2002, Respondent ceased
operations at its Long Island City facility, and laid off all
the employees in the Unit.

Although the Respondent’s “Neither admits nor denies . . .”
response also applies to paragraphs 12 and 13, the conclusory
paragraphs alleging that by the acts described in paragraphs 9
through 11, the Respondent has violated Section 8(a)(1) and (5)
of the Act and that these unfair labor practices affect commerce
within the meaning of Section 2(6) and (7) of the Act, it would
be unfair to the Respondent to assume that by its answer it
meant for these paragraphs to be admitted.
II. THE FACTS AND ANALYSIS
The Union has been the collective-bargaining representative
of the unit employees at the Long Island City facility since, at
least, 1990. Marian Rice is the president of the Union; Michael
Fisher, an international representative for the International,
services the Respondent for the Union. David Halpern is the
Respondent’s president.
Fisher testified that in May or June he received a call from
“Danny,” the Union’s shop steward at the facility, saying that
he heard rumors that the facility was going to close. On about
the following day, Fisher went to the facility and he and Danny
spoke to Halpern. He asked Halpern if there was any truth to
the rumor that the facility would be moving and Halpern an-
swered “no.” Fisher then said that if there was any intention to
move, Halpern should notify the Union and Halpern said that
he would.
The next time this issue arose was on August 13 when Fisher
received a message saying that when the Respondent’s employ-
ees arrived at the Long Island City facility that day, they found
the doors at the facility were locked and signs said that the
facility was closed. Fisher drove to the facility with Rice and
when they arrived they saw the signs on the door saying that it
was closed. He and Rice went inside and Fisher saw movers
removing the machinery from the facility. He asked Halpern,
“What’s going on?” Halpern said that he had to close because
he owed money to the Internal Revenue Service, and that he
was selling his equipment. Fisher asked Halpern why he didn’t
first notify the Union and Halpern said, “I had to do it this
way.” When Fisher asked him how long he knew that he was
going to close, Halpern said that he knew for 2 or 3 weeks. The
Respondent had not previously notified the Union that it was
going to close, nor did it offer the Union an opportunity to bar-
gain about the closing or its effects on the unit employees.
Rice, likewise, testified that she wasn’t aware that the facility
was being closed until the telephone call and her visit to the
facility with Fisher on August 13. Prior to the date, the Re-
spondent had not informed her of the fact that it was going to
close, nor did it offer to negotiate about the effects of the clos-
ing on its unit employees.
Halpern testified that the Respondent owes Internal Revenue
Service $1.6 million and received in evidence was a Notice of
Federal Tax Lien Filing to the Respondent, dated November 15,
stating that the Respondent owed about $1.6 million. In addi-
tion, he testified: “I received notice in the mail, certified letter,
that the landlord was going to seize and padlock our premises.”
He did not testify as to when he received this letter or whether
there were earlier letters or notifications from the landlord as
well.
The sole allegation is that the Respondent violated Section
8(a)(1) and (5) of the Act because it terminated operations on
August 13 without affording the Union an opportunity to bar-
gain with the Respondent regarding the effects of the plant
closing. The Board and the Courts have long held that a union
must be given an opportunity to bargain about the effects of a
termination, or a partial termination of an employer’s operation,
that affects its members. First National Maintenance Corp. v.
NLRB, 452 U.S. 666 (1981). This means that an employer must
give the union representing its employees, timely notice of a
planned closure or termination. Daniel I. Burk Enterprises, 313
NLRB 1263, 1268 (1994), stated:

Compliance with the preimplementation notice requirement
has been excused only in the cases of emergency, such as the
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 424
sudden refusal of the employer’s bank to continue extending
credit; the unanticipated denial of an employer’s loan request;
a bankruptcy trustee’s closure of a business and termination of
employees on learning serious mismanagement . . . existed.”

(Citations omitted.)
The violation is quite clear. When the employees reported to
work on August 13 they were notified that the business was
closed and that they were terminated. When the employees
reported this to the Union that was the first that the Union
learned of the termination. The Respondent defends that it had
to close because it owed Internal Revenue Service $1.6 million
and that its landlord took its machinery for nonpayment of rent.
However, the Respondent’s situation does not bring it within
any of the exceptions referred to in Daniel I. Burk, supra. Al-
though Halpern testified that he owed money to Internal Reve-
nue and his landlord, he did not testify as to when he was noti-
fied by his landlord that he was taking his machinery and clos-
ing him down for nonpayment of rent. It is reasonable to as-
sume that Halpern received notice of nonpayment of rent prior
to August 13, probably a few months earlier, which would have
given him plenty of time to notify the Union and offer to bar-
gain about the effects of the upcoming closing. At a minimum,
Halpern could have notified the Union 2 to 3 weeks before the
closing when, according to what he told Fisher, he was first
aware of the situation. I therefore find that the Respondent has
failed to give the Union notice of its closing, and failed to give
the Union an opportunity to bargain about the effects of the
closing on the unit employees, in violation of Section 8(a)(1)
and (5) of the Act.
CONCLUSIONS OF LAW
1. Respondent has been an employer engaged in commerce
within the meaning of Section 2(2), (6), and (7) of the Act.
2. The Union has been a labor organization within the mean-
ing of Section 2(5) of the Act.
3. By terminating the operation at its Long Island City facil-
ity, without prior notice to the Union, and without giving the
Union an opportunity to bargain about the effects of the closing
on the unit employees represented by the Union, the Respon-
dent violated Section 8(a)(1) and (5) of the Act.
REMEDY
Having found that the Respondent has engaged in certain un-
fair labor practices in violation of Section 8(a)(1) and (5) of the
Act, I shall recommend that it be ordered to cease and desist
therefrom and to take certain affirmative action designed to
effectuate the purposes of the Act. As a result of the Respon-
dent’s unlawful failure to provide the Union with notice of its
cessation of operations and termination of its union-represented
employees at a time when the Union would have had an ade-
quate opportunity to bargain effectively over the effects thereof
on the employees it represented, I recommend the Respondent
be ordered to comply with the remedies set forth in Transma-
rine Navigation Corp., 170 NLRB 389 (1968). I therefore rec-
ommend Respondent be ordered to pay to each of the employ-
ees on its active payroll on August 13, 2002, backpay at the rate
of their normal wages on that date from 5 days after the date the
Board issues its Order in this case until the occurrence of the
earliest of the following conditions: (1) the date Respondent
bargains to agreement with the Union concerning the effects of
the cessation of operations on its union-represented employees;
(2) a bona fide impasse in bargaining; (3) the failure of the
Union to request bargaining within 5 days of the issuance of the
Board’s Order, or to commence negotiations within 5 days of
Respondent’s notice of desire to bargain with the Union; or (4)
the subsequent failure of the Union to bargain in good faith; but
in no event shall the sum paid to the employees exceed the
amount he or she would have earned as wages from August 13,
2002, the date Respondent ceased operations to the time he or
she secured equivalent employment elsewhere, or the date on
which Respondent should have offered to bargain, whichever
occurs sooner; provided, however, that in no event shall this
sum be less than the employees would have earned for a 2-
week period at the normal rate of their normal wages when last
in Respondent’s employ. Interest on all such sums shall be
paid in the manner prescribed in New Horizons for the Re-
tarded, 283 NLRB 1173 (1987).
On these findings of fact, conclusions of law and on the en-
tire record, I issue the following recommended3
ORDER
The Respondent, Freedman Die Cutters, Inc., Long Island
City, New York, its officers, agents, successors, and assigns,
shall
1. Cease and desist from
(a) Failing to timely notify and bargain with the Union as the
exclusive collective-bargaining representative of its employees
in the appropriate unit set out below with respect to the effects
on those employees of its decision to cease operations and ter-
minate their employment:

All manufacturing employees, excluding executives, sales-
men, office employees, construction employees, and sample
department employees, guards and supervisors as defined in
the Act.

(b) In any like or related manner interfering with, restraining
or coercing employees in the exercise of the rights guaranteed
them by Section 7 of the Act.
2. Take the following affirmative action necessary to effec-
tuate the policies of the Act.
(a) Pay the terminated employees their normal wages for the
period set forth in the remedy section of this decision.
(b) On request, bargain in good faith with the Union con-
cerning the effects on the unit employees of its decision to
cease operations and terminate its union represented employ-
ees.
(c) Preserve and, within 14 days of a request, or such addi-
tional time as the Regional Director may allow for good cause
shown, provide at a reasonable place designated by the Board
or its agents, all payroll records, social security payment re-
cords, timecards, personnel records and reports, and all other

3 If no exceptions are filed as provided by Sec. 102.46 of the
Board’s Rules and Regulations, the findings, conclusions, and recom-
mended Order shall, as provided in Sec. 102.48 of the Rules, be
adopted by the Board and all objections to them shall be deemed
waived for all purposes.
FREEDMAN DIE CUTTERS, INC. 425
records, including an electronic copy of such records if stored
in electronic form, necessary to analyze the amount of backpay
due under the terms of this Order.
(d) Within 14 days after service by the Region, post at its fa-
cility in Long Island City, New York, copies of the attached
notice marked “Appendix.”4 Copies of the notice, on forms
provided by the Regional Director for Region 29, after being
signed by the Respondent’s authorized representative, shall be
posted by the Respondent immediately on receipt and main-
tained for 60 consecutive days in conspicuous places including
all places where notices to employees are customarily posted.
Reasonable steps shall be taken by the Respondent to ensure
that the notices are not altered, defaced, or covered by any other
material. As the Respondent has terminated its business and
closed the facility involved in these proceedings, the Respon-
dent shall duplicate and mail, at its own expense, a copy of the
notice to all current employees and former employees em-
ployed by the Respondent at any time since August 13, 2002.
(e) Within 21 days after service by the Region, file with the
Regional Director a sworn certification of a responsible official
on a form provided by the Region attesting to the steps that the
Respondent has taken to comply.

APPENDIX
NOTICE TO EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government

4 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 Judg-
ment of the United States Court of Appeals Enforcing an Order of the
National Labor Relations Board.”
The National Labor Relations Board has found that we violated
Federal labor law and has ordered us to post and obey this no-
tice.

WE WILL NOT fail and refuse to give timely notice to, and
to bargain with, Local 107, Paper, Allied-Industrial, Chemical
and Energy Workers International Union, AFL–CIO, your ex-
clusive collective-bargaining representative, in the unit set forth
below, with respect to the effects that our decision to cease
operations and terminate your employment had on you. The
unit is:

All manufacturing employees, excluding executives, sales-
men, office employees, construction employees, and sample
department employees, 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 exercise of the rights guaranteed
you by Section 7 of the Act.
WE WILL, on request, bargain with the Union with regard to
the effects our decision to cease operations and terminate your
employment had on you.
WE WILL pay to all of our unit employees who were termi-
nated on August 13, 2002, when we ceased operations and
terminated our employees, their normal wages for a period
specified by the National Labor Relations Board, with interest
on the sums due.
FREEDMAN DIE CUTTERS, INC.