Fulton Bellows & Components, Inc.

National Labor Relations Board - Board Decisions

Nov 8, 2005

345 N.L.R.B. 1226 (N.L.R.B. 2005)

DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
345 NLRB No. 103
1226
Fulton Bellows & Components, Inc. and its Trustee in
Bankruptcy, Ann Mostoller and International
Association of Machinists and Aerospace Work-
ers, AFL–CIO and United Steelworkers of
America, District 9. Cases 10–CA–34295 and 10–
CA–34301.
November 8, 2005
DECISION AND ORDER
BY CHAIRMAN BATTISTA AND MEMBERS LIEBMAN
AND SCHAUMBER
The General Counsel seeks default judgment in this
case on the ground that the Respondent has failed to file
an answer to the consolidated complaint. Upon a charge
filed by International Association of Machinists and
Aerospace Workers, AFL–CIO on March 11, 2003, and a
charge filed by United Steelworkers of America, District
9 on March 17, 2003, the General Counsel issued a con-
solidated complaint on March 31, 2005 against Fulton
Bellows and Components, Inc., and Ann Mostoller, its
Trustee in Bankruptcy, collectively the Respondent, al-
leging that it has violated Section 8(a)(1) and (5) and
8(d) of the Act. The Respondent failed to file an answer.
On May 5, 2005, the General Counsel filed a Motion
for Default Judgment with the Board. On May 11, 2005,
the Board issued an order transferring the proceeding to
the Board and a Notice to Show Cause why the motion
should not be granted. The Respondent filed no response.
The former counsel of the Respondent filed a special
appearance and response to the notice to show cause.
Former counsel represents that the Respondent has filed
for bankruptcy, its assets have been sold, it no longer
employs any employees, and that the case should be
closed administratively because further proceedings
could not result in an effective remedy. In addition, for-
mer counsel argues that the alleged unfair labor practices
were the subject of an arbitration proceeding decided in
the Respondent’s favor and that the General Counsel
erred in failing to defer to the arbitrator’s ruling pursuant
to Spielberg Mfg. Co., 112 NLRB 1080 (1955), and Olin
Corp., 268 NLRB 573 (1984).1 Former counsel also
asserts that the Bankruptcy Trustee is not an employer
under Section 2(2) of the Act and has no obligation to
respond, citing San Bernadino Dental Group, 302 NLRB
135 (1991).
According to the General Counsel’s brief in response,
the Respondent ceased to exist as an employing entity of
the unit employees on August 3, 2003 but continues to

1 In further support of this contention, former counsel subsequently
submitted a notice of supplemental authority drawing the Board’s atten-
tion to its recent decision in Smurfit-Stone Container Corp., 344 NLRB
No. 82 (2005).
exist as an entity for the remedial purposes of the Na-
tional Labor Relations Act and the Bankruptcy Code. In
addition, the General Counsel disputes former counsel’s
contention that Spielberg/Olin deferral was appropriate
here and notes that the Respondent has not argued for
deferral. The General Counsel asserts that the Board has
authority to proceed against the Respondent and the
Bankruptcy trustee under the circumstances of this case,
and that the question of whether assets will be available
to remedy an unfair labor practice finding is an issue yet
to be determined by the Bankruptcy court.
Ruling on Motion for Default Judgment
Section 102.20 of the Board’s Rules and Regulations
provides that the allegations in the complaint shall be
deemed admitted if an answer is not filed within 14 days
of the complaint, unless good cause is shown. In addi-
tion, the complaint affirmatively states that unless an
answer is filed within 14 days of service, all the allega-
tions in the complaint will be considered admitted.
As noted above, there was no answer filed by anyone
as to the complaint. A response to the Notice to Show
Cause was filed by former counsel to the Respondent.
However, neither the Respondent nor any current counsel
has filed a response. Consequently, we treat this case as
one in which there has been no Respondent response to
the General Counsel’s complaint or the Motion. Accord-
ingly, we grant that Motion.2
We appreciate the efforts of former counsel to Re-
spondent to bring certain matters to our attention. How-
ever, in the absence of any indication that they reflect the
position of the Respondent, we think that it is unwar-
ranted to rely on such arguments as a basis for denial of
the General Counsel’s otherwise unopposed motion.3

2 However, because one of former counsel’s contentions involved
the issue of Board jurisdiction, and because the General Counsel him-
self dealt with that issue, we shall address it. Based on the General
Counsel’s Motion, it is apparent that the Respondent is currently sub-
ject to Chapter 7 proceedings in bankruptcy. The institution of bank-
ruptcy proceedings does not deprive the Board of jurisdiction or author-
ity to entertain and process an unfair labor practice case to its final
disposition. See Cardinal Services, 295 NLRB 933 fn. 2 (1989), and
cases cited there. Board proceedings fall within the exception to the
automatic stay provisions of the bankruptcy code for proceedings by a
governmental unit to enforce its police or regulatory powers. See id.,
and cases cited therein; NLRB v. 15th Avenue Iron Works, Inc., 964
F.2d 1336, 1337 (2d Cir. 1992). Accord: Aherns Aircraft, Inc. v.
NLRB, 703 F.2d 23 (1st Cir. 1983).
3 In Member Schaumber’s view, the assertion by former counsel to
the Respondent that there may be no assets to satisfy the remedy pro-
vided herein is troubling because, if true, it suggests that the Board’s
decision may have no practical significance. However, there is nothing
before the Board to show that a liquidation has taken place and that
there are no assets. He also finds that San Bernadino Dental Group,
302 NLRB 135 (1991) does not support former counsel’s contention
that a Chapter 7 Trustee has no obligation to respond to a complaint. In
FULTON BELLOWS & COMPONENTS, INC. 1227
On the entire record, the Board makes the following
FINDINGS OF FACT
I. JURISDICTION
At all material times, the Respondent, a Delaware cor-
poration, had an office in Knoxville, Tennessee, where it
engaged in the manufacture of metal, hydro formed, and
welded bellows and assemblies for industrial customers.
During the 12-month period preceding August 3, 2004, a
representative period, the Respondent, in conducting its
business operations, derived gross revenues in excess of
$500,000, and shipped in interstate commerce from its
Knoxville, Tennessee facility products, goods, and mate-
rials valued in excess of $50,000 directly to points lo-
cated outside the State of Tennessee.
We find that the Respondent is an employer engaged
in commerce within the meaning of Section 2(2), (6), and
(7) of the Act, and that International Association of Ma-
chinists and Aerospace Workers, Local Lodge 555 (Ma-
chinists Union), and United Steelworkers of America,
Local Lodge 5341(Steelworkers Union) are labor organi-
zations within the meaning of Section 2(5) of the Act.
II. ALLEGED UNFAIR LABOR PRACTICES
The following employees of the Respondent constitute
a unit appropriate for purposes of collective bargaining
within the meaning of Section 9(b) of the Act:
Tool and Die Makers, Model and Instrument Makers,
Precision Machinists, Machinists, Tool and Die Grind-
ers, Hydraulic Plate Makers, Instrument Men, Mainte-
nance Mechanic-Electricians, Maintenance Mechanic-
Plumbers, Maintenance Mechanic-Welders, Mainte-
nance Mechanic-Electricians and Lubricators, Appren-
tices, and Systems Maintenance Mechanics.
At all material times, the Machinists Union, by virtue
of Section 9(a) of the Act, has been the exclusive collec-
tive-bargaining representative of the unit described
above. This recognition has been embodied in succes-
sive collective-bargaining agreements, the most recent of
which was effective by its terms from October 26, 1999
to October 25, 2004.

San Bernadino Dental Group, the complaint was filed against a bank-
ruptcy trustee alleging that the trustee’s actions were unlawful. The
Board held that the trustee was not authorized to operate the business
and therefore did not violate the Act by failing and refusing to bargain
with the union. In the present case, the complaint alleges that the trustee
is responsible for remedying the alleged unfair labor practices, all of
which are alleged to have occurred prior to her appointment. San Ber-
nadino Dental Group does not deprive the Board of its authority to act
under these circumstances. Cf. Wheels Transportation Services, 340
NLRB 1085 (2003) (trustee having authority to continue business is
alter ego and properly a respondent).
All of the Respondent’s employees described within
and covered by the collective-bargaining agreement be-
tween the Respondent and the Steelworkers Union, effec-
tive by its terms from October 16, 1999 to October 15,
2004, constitute a unit appropriate for the purposes of
collective bargaining within the meaning of Section 9(b)
of the Act. At all material times, the Steelworkers Union,
by virtue of Section 9(a) of the Act, has been the exclu-
sive collective-bargaining representative of the unit de-
scribed in that collective–bargaining agreement.
The collective-bargaining agreements described above
between the Respondent and the Unions both require that
the Respondent provide medical benefits to the bargain-
ing unit employees. On or about March 1, 2003, the Re-
spondent changed the contractual medical benefits de-
scribed in the collective-bargaining agreements unilater-
ally and without the Unions’ consent. The subject set
forth above relates to terms and conditions of employ-
ment of the employees in the units described above, and
is a mandatory subject for the purposes of collective bar-
gaining.
CONCLUSION OF LAW
By the acts and conduct described above, the Respon-
dent has been failing and refusing to bargain collectively
and in good faith with the Machinists Union and the
Steelworkers Union as the exclusive collective-
bargaining representatives of separate units of its em-
ployees, and has thereby engaged in unfair labor prac-
tices affecting commerce within the meaning of Section
8(a)(1) and (5) and 8(d) and Section 2(6) and (7) of the
Act.
REMEDY
Having found that the Respondent has engaged in cer-
tain unfair labor practices, we shall order it to cease and
desist and to take certain affirmative action designed to
effectuate the policies of the Act. Specifically, having
found that the Respondent has failed to adhere to the
medical benefits provisions of the collective-bargaining
agreements, we shall order the Respondent to adhere to
those contract provisions and to reimburse unit employees
for any expenses ensuing from the Respondent’s changes
to the medical benefits, as set forth in Kraft Plumbing &
Heating, 252 NLRB 891 fn. 2 (1980), enfd. 661 F.2d 940
(9th Cir. 1981), with interest as prescribed in New Hori-
zons for the Retarded, 283 NLRB 1173 (1987).
ORDER
The National Labor Relations Board orders that the
Respondent, Fulton Bellows & Components, Inc.,
Knoxville, Tennessee, and its trustee in bankruptcy,
Ann Mostoller, their officers, agents, successors, and
assigns, shall
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD1228
1. Cease and desist from
(a) Refusing to abide by the terms of the collective-
bargaining agreements with the International Association
of Machinists and Aerospace Workers, Local Lodge 555
and United Steelworkers of America, Local Lodge 5341
by changing the medical benefits of its unit employees.
(b) In any like or related manner interfering with, re-
straining, 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
effectuate the policies of the Act.
(a) Abide by the terms of the collective-bargaining
agreements with International Association of Machinists
and Aerospace Workers, Local Lodge 555 and United
Steelworkers of America, Local Lodge 5341 by restoring
the contractual medical benefits.
(b) Make employees whole for all increased cost to
them for medical benefits in excess of their costs under
the contractual medical benefits plan, including expenses
incurred as a result of the change in medical benefits,
with interest, in the manner set forth in the remedy sec-
tion of this decision.
(c) Preserve and, within 14 days of a request, or such
additional time as the Regional Director may allow for
good cause shown, provide at a reasonable place desig-
nated by the Board or its agents, all payroll records, so-
cial security payment records, timecards, personnel re-
cords and reports, and all other records, including an
electronic copy of such records if stored in electronic
form, necessary to analyze the amount of backpay or
costs due under the terms of this Order.
(d) Within 14 days after service by the Region, dupli-
cate and mail, at its own expense, and after being signed
by the Respondent's authorized representative, copies of
the attached notice marked “Appendix”4 to the Unions
and to any unit employees who were employed by the
Respondent on or after March 1, 2003.

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.”
(e) Within 21 days after service by the Region, file
with the Regional Director a sworn certification of a re-
sponsible official on a form provided by the Region at-
testing to the steps 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
The National Labor Relations Board has found that we vio-
lated Federal labor law and has ordered us to post and obey
this notice.
FEDERAL LABOR LAW GIVES YOU THE RIGHT TO
Form, join, or assist a union
Choose representatives to bargain with us on
your behalf
Act together with other employees for your bene-
fit and protection
Choose not to engage in any of these protected
activities.
WE WILL NOT refuse to abide by the terms of the col-
lective-bargaining agreements with the International As-
sociation of Machinists and Aerospace Workers, Local
Lodge 555 and United Steelworkers of America, Local
Lodge 5341 by changing the medical benefits of our unit
employees.
WE WILL NOT in any like or related manner interfere
with, restrain, or coerce you in the exercise of the rights
set forth above.
WE WILL abide by the terms of the collective-
bargaining agreements with International Association of
Machinists and Aerospace Workers, Local Lodge 555
and United Steelworkers of America, Local Lodge 5341
by restoring the contractual medical benefits.
WE WILL make our unit employees whole for all in-
creased cost to them for medical benefits in excess of
their costs under the contractual medical benefits plan,
including expenses incurred as a result of the change in
medical benefits, with interest.
FULTON BELLOWS & COMPONENTS, INC.