G. T. & E. Data Services Corp.

National Labor Relations Board - Board Decisions

Dec 23, 1971

194 N.L.R.B. 719 (N.L.R.B. 1971)

G. T. & E. DATA SERVICES CORP. 719
G. T. & E. Data Services Corporation and Interna-
tional Brotherhood of Electrical Workers, Local
No. 89, AFL-CIO. Case 19-CA-4639
December 23, 1971
DECISION AND ORDER
BY CHAIRMAN MILLER AND MEMBERS
FANNING AND KENNEDY
On February 19, 1971, Trial Examiner James R.
Hemingway issued the attached Decision in this
proceeding. Thereafter, General Counsel filed excep-
tions and a supporting brief, and the Respondent filed
an answering brief.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the
National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
The Board has considered the record and the Trial
Examiner's Decision in light of the exceptions and
briefs, and finds merit in the General Counsels
exceptions to certain findings and conclusions of the
Trial Examiner as described below. Save only in the
respects hereafter indicated, the Board affirms the
rulings, findings and conclusions of the Trial Examin-
er and adopts his recommended Order.
1. Preliminary Statement
As appears from the Trial Examiner's Decision, the
complaint alleges that Respondent violated Section
8(a)(5) of the Act by refusing to honor the Charging
Party's unqualified demand that it assume a contract
made with the immediately precedent employer of
Respondent's data processing employees. The prede-
cessor employer was General Telephone Company of
the Northwest, and is herein called General
Northwest.' The complaint describes Respondent as
a "successor-employer" of the employees involved
and grounds its 8(a)(5) allegation on the theory of the
Board's decision in the William J. Burns International
Detective Agency, Inc., 182 NLRB 348, hereinafter
called the Burns case.2
The Trial Examiner found the General Counsel's
basic premise-that Respondent's relationship to the
employees involved was that of a "successor-
employer"-to be unsupported. As this finding
removed the complaint's 8(a)(5) allegation from the
purview of the rule enunciated in Burns, the Trial
Examiner dismissed the complaint.
Although we also conclude that the complaint
should be dismissed, we arrive at this conclusion by a
different route. In our view, General Counsel sus-
tained his basic premise that Respondent was a
"successor-employer" of the employees involved, but
failed to establish that Respondent violated Section
8(a)(5) by the conduct attributed to it by the
complaint. Our findings follow.
2. The "successor-employer" issue
A. The relevant facts are not in dispute. General
Northwest and Respondent are two of a number of
wholly owned subsidiary companies of General
Telephone and Electronic Corporation; herein called
General Corporation. Among other activities, Gener-
al Corporation, the parent company, provides,
through a number of its subsidiary companies,
telephone services in various parts of the United
States. General Northwest, a Washington corpora-
tion, is one such subsidiary company. It is engaged in
the business of providing telephone services to
customers in Washington and Oregon. It employs
about 3,000 nonmanagerial employees at Everett,
Washington, all of whom were represented by the
Charging Party, herein called the Union, on all dates
here material.
Respondent, a Delaware corporation, has its princi-
pal offices in Tampa, Florida. It came into being in
1967 as a result of a business decision made by
General Corporation. It was established with the
object of providing data processing services to
General Corporation's various operating telephone
subsidiaries and to other unrelated commercial
customers. It now operates through 12 computer
centers located in various parts of the United States,
only one of which, the Northwest Data Processing
Center, here called the Northwest Center, is involved
here. This Center is located in Everett, Washington,
about 2 miles distant from General Northwest's
offices. It is housed in a building on which construc-
tion was completed in early 1970. Respondent there
performs substantially all of the data processing work
which General Northwest had ,previously been per-
forming on its own. Although the Northwest Center
was not formally opened for operations until January
1, 1970, business arrangements looking to that
transfer were begun early in 1968, and included the
following steps:
In April 1968, Respondent purchased from IBM the
data processing equipment which General Northwest
had then been using under a lease agreement with
IBM. Respondent then supplanted IBM as General
Northwest's lessor under a separate agreement. The
contract between them was effective for a term of 1
1 For the purposes of uniformity, this decision adopts the Trial
Examiner's abbreviated nomenclature.
2 Enforcement of Burns was denied, in part, by the Second Circuit
Court of Appeals, 441 F.2d 911 The Supreme Court has since granted
certiorari, 404 U S. 822 (October 12, 1971).
194 NLRB No. 102
720 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
year, but either party had a right to cancel on 60 days'
notice.
In June 1968, General Northwest restructured its
operations so as to set up a separate data processing
department. It transferred to that new department
those employees, about 60 -in number, who had
previously been performing the-data processing work
as part of the accounting department. It then
appointed Benjamin Scott, an employee of Respon-
dent, as director of its data processing department.
Although Scott continued to be paid by Respondent,
he became accountable to the vice president-control-
ler of General Northwest for the operation of the data
processing department. Scott was replaced by Leland
Cisney, another employee of Respondent, under the
same arrangement of pay and accountability until the
ultimate transfer of the data processing work to
Respondent was finally effectuated. When Respon-
dent's Northwest Center was finally opened, in
January 1970, Cisney became regional director of that
center.
Respondent began recruitment for the Northwest
Center employee complement about December 15,
1969. At that time, Gordon Wood, Respondent's
personnel director, journeyed from Respondent's
main offices at Tampa, Florida, to Everett, Washing-
ton, and spoke to the data processing employees at
General Northwest on the subject. Wood told the
employees that Respondent's computer center would
take over the data processing department's duties,
effective January 1, 1970, and that the employees were
free to transfer to the new center or to remain with
General Northwest. Wood made it clear that the
employees who accepted jobs with Respondent would
suffer no financial detriment and no loss of the
seniority privileges accruing to them under the
seniority policies uniformly applicable to all employ-
ees of General Corporation's corporate family.
On January 1, 1970, when the data processing
function of General Northwest was formally trans-
ferred to Respondent, all of General Northwest's data
processing supervisory and management personnel,
and all of the nonmanagerial data processing employ-
ees, except one, transferred to Respondent and
became its employees. The parties stipulated that the
21 nonmanagerial employees who transferred consti-
tuted substantially the entire rank-and-file work force
of Respondent at its Northwest Center.
From January 1 to January 23, 1970, when
Respondent's new facility was completed, the data
3 Among these customers are insurance companies, construction firms,
and other data processing and management information businesses.
4 However, Respondent has made more definitive job classifications,
introduced some newer equipment, reevaluated and changed some
procedures in the interest of greater efficiency, and eliminated personal
pickup and delivery of data material
5 In actual fact, the employees transferred over to Respondent at a
processing employees remained at work on General
Northwest's premises, but on Respondent's payroll.
Upon completion of its facility, Respondent moved
all its operations and the machines and employees
there.
Since January 1, 1970, Respondent has expanded its
operations to include 628 new customers, in addition
to General Northwest, as subscribers to services
supplied by the Northwest Center.3 The transferred
employees are performing the work involved in the
new business as well as the work for General
Northwest. Their actual functions are the same as
those they had at General Northwest and they
perform these functions under the same supervision
and on the very same IBM machines .4 While
Respondent pays the employees substantially the
same amount of wages as they had been getting at
General Northwest, it does so under a different pay
rate and allowance system.5 It has continued to
provide seniority benefits under substantially the
same seniority arrangements as they had at General
Northwest, and to provide for pensions. The pension
benefit plan, however, is different than that in effect
at General Northwest.
B. In evaluating the foregoing facts for purposes
of resolving the "successor-employer" issue, the Trial
Examiner gave significant weight to the fact that
Respondent was organized to conduct a data process-
ing operation with business objectives differing
substantially from those of General Northwest.
Relying on the differences in such objectives, the Trial
Examiner concluded that a substantial change in the
"employing industry" had taken place; and he
accordingly rejected General Counsel's position that
Respondent was the "successor-employer" of the
employees it took over from General Northwest.
The basic error in the Trial Examiner's conclusion
arises, in our view, from a misreading of the Board's
"employing industry" concepts. In defining and
applying the "employing industry" concepts, the
Board, with court approval, has always found that
more significant weight should be attached to facts
demonstrative of "the continued nature of the
employment [of a particular group of employees
involved] rather than to the source of such
employment."6 The Board has therefore held that
where an allegedly "new" employer takes over a
portion of the operations of a predecessor enterprise,
and continues these operations without hiatus, and
with substantially the same employees, it is, as a
different rate of pay, although there was no loss of income . Thus General
Northwest employees receive a "telephone concession rate," which gives
them telephone service at a discount . Respondent gave those employees
who transferred a "transfer allowance ," equivalent to, and in compensation
for, the loss of this " telephone concession rate."
6 N L R,B v McFarland, 306 F.2d 219, 220 (C A 10), enfg. 131 NLRB
745
G. T. & E. DATA SERVICES CORP. 721
matter of industrial reality, the "successor-employer"
of the employees involved. We have so held even
though, unlike the situation here before us, the "new"
employer has no business affiliation with his prede-
cessor and no common operational interests.7
Adherence to the principle described above re-
quires, in our view, a finding that Respondent is, in
fact, the "successor-employer" of the data processing
employees that it took over from General Northwest
in order to perform its data processing work. Such
finding is supported by the undisputed evidence that
despite their transfer from the payroll of General
Northwest to that of the Respondent, the employees
have continued to engage, without any hiatus, in
essentially the same computer functions, on the very
same machines, under the same supervision, and for
essentially the same major customer. Moreover, the
employees now perform their duties at a location 2
miles from the principal offices of General Northwest,
in Everett, Washington, the former workplace, and
also the one from which Respondent conducted its
business for 3 weeks after its formal takeover of these
operations.
Furthermore, while it is true that Respondent has a
corporate existence separate from that of General
Northwest, both it and General Northwest are
creatures of the same parent corporation. Indeed, it
appears that General Corporation created the Res-
pondent for business reasons intimately connected
with those of operating subsidiaries which, like
General Northwest, are engaged in furnishing tele-
phone services to the public. We note, in passing, that
nearly 55 percent of all the employees engaged by
Respondent at its 12 computer centers came, initially,
from General Corporation's subsidiary telephone
companies.
To be sure, the differences in the scope and
character of the business operations of Respondent,
on the one hand, and those of General Northwest, on
the other, form part of the relevant circumstances to
be considered here. But, they do not, in our view,
outweigh the factors outlined above which plainly
point to the conclusion that Respondent's status with
respect to the employees involved was, at all times
relevant, that of a successor-employer within the
meaning of the Board's applicable concepts. We so
find.
3. The alleged 8(a)(5)
By letter dated January 2, 1971, the Union made an
unqualified demand on Respondent that it apply to its
employees the provisions of the then current bargain-
ing contract between the Union and General North-
west. That contract was appended to the Union's
letter and covered a unit extending in scope to all
nonmanagerial employees. Its expiration date was
December 1, 1971. By letter dated January 12, 1971,
Respondent formally rejected the Union's demand,
and on January 27, 1971, the Union filed the charges
initiating this proceeding.
The complaint's 8(a)(5) allegations, as amended at
the hearing by stipulation of the parties, pose a single
question and no other: Did Respondent's rejection of
the Union's January 2 demand violate Section 8(a)(5)
of the Act? As already noted, we answer this question
in favor of Respondent-and this, for the reasons that
follow.
In litigating his case, General Counsel acted wholly
on the assumption that a finding of Respondent's
successor-employer relationship to the employees
involved would operate, ipso facto, to validate the
Union's demand and to require Respondent's compli-
ance therewith. General Counsel argues that his
theory of the alleged 8(a)(5) violation is consistent
with the teaching of Burns. We do not agree.
In the Burns case we held that, in normal circum-
stances, a successor-employer is required to take over
his predecessor's collective-bargaining agreement.
But we there enunciated and applied the rule in a
situation in which the contract had been negotiated
on behalf of employees in a bargaining unit which
continued in existence unaltered under the successor-
employer. We plainly anticipated, in our decision, the
existence of dissimilar situations in which successor-
employers could not be expected to abide by this rule,
and, as evidenced by subsequent cases, we have
refused, accordingly, to apply the rule in a mechanis-
tic fashion.8
We have examined the collective-bargaining agree-
ment at issue in this case, and, in agreement with the
Respondent, we conclude that it would be inappropri-
ate to require its application to Respondent's opera-
tions. It is undisputed that the contract was negotiated
by the Union on behalf of some 3,000 operations and
maintenance employees who perform duties in a
variety of job classifications for General Northwest,
and that, at the time it was executed, the data
processing employees constituted less than 1 percent
of the employee. complement. Furthermore,,while it is
true that a separate group of data processing
employees may constitute a unit appropriate for the
purposes of collective bargaining,9 we note that, under
the contract, there is nothing that separately identifies
or provides for the data processing employees, as
7 See, e.g., Ranch-Way, Inc., 183 NLRB No 116, enfd. 445 F 2d 625 8 See, e.g, Emerald Maintenance, Inc., 188 NLRB No. 139
(C A. 10). 9 Safeway Stores, 174 NLRB No 189.
722 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
opposed to other employees who had the same job
classifications. 10
Even more importantly, however, we find that many
of the substantive provisions of the agreement are
tailored to employees who form the complement of a
large, publicly regulated, telephone enterprise, and
could not, as a practical matter, be made applicable,
as written, at Respondent's operation. We note, for
example, that the contract's seniority provisions,11
which are vital to employee job rights and also to
effective contract administration, contain detailed
and carefully worked out interweaving of the relative
rights of employees in the event of promotions,
transfers, and layoffs. The segment of the predeces-
sor's entire work force which these particular employ-
ees comprised were not treated as a single isolated
unit, but rather had certain rights extending well
beyond their immediate bailiwick, and in turn other
employees were grouped together with them in many
instances where relative rights to promotion or job
security were involved. In still another part of the
agreement, we note, pension plan provisions for this
group of employees were specifically tied to General
Northwest's "Plan for Employees' Pensions." These
and other portions of the agreement would clearly no
longer fit the circumstances now applicable, and
substantial renegotiation of basic provisions of the
agreement would therefore be required.
It may well be true that Respondent could, with
some modification, grant the employees wages and
other benefits similar to those now provided in the
bargaining contract, and, indeed, there is some
evidence that it made an effort to do so. However,
nothing in our Burns case, or in any other case,
suggests that we will apportion the successorship
obligations with respect to union contracts, as
conceived in Burns, on a pro tanto basis.12 For to do so
would result in our making a new contract for the
parties, contrary to the concept of free collective
bargaining.13
In view of the narrow scope of the issue framed by
the amended complaint and its litigation, our conclu-
sion that Respondent could not, without modifica-
tions, apply to its data processing employees all of the
terms of the contract between General Northwest and
the Union requires that the complaint be, and it
hereby is, dismissed.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor
Relations Board adopts as its Order the recommend-
ed Order of the Trial Examiner and hereby orders that
the complaint herein be, and it hereby is, dismissed in
its entirety.
10 Cf Soloman Johnsky d/b/a Avenue Meat Center, 184 NLRB No 94;
Ranch - Way, Inc, supra, In. 2.
11 Under Article X of the contract (G C. Exh . 9) there are two types of
seniority , "Accredited Seniority" and "Local Seniority." Section 10.1
explains that "Accredited Seniority" is equivalent to system seniority or
company seniority Section- 10 .2 defines "Local Seniority" as the length of
continuous service in a classification in an office , exchange or permanent
headquarters.
1 2 Cf. S-H Food Service, Inc, 183 NLRB No. 124.
13 There was no indication in the Union 's letter, and there is no
evidence in the record, that the Union ever requested Respondent to
negotiate with it for any other contract.
TRIAL EXAMINER'S DECISION
STATEMENT OF THE CASE
JAMES R. HEMINGwAY, Trial Examiner: Upon a charge
filed on January 27, 1970, by International Brotherhood of
Electrical Workers, Local No. 89, AFL-CIO, herein called
the Union, a complaint issued on October 8, 1970 , alleging
a violation of Section 8(a)(5) and (1) of the National Labor
Relations Act, as amended , 29 U.S .C. Sec . 151, et seq.,
herein called the Act. Respondent's answer, filed on
November 2, 1970, denied the allegations of unfair labor
practices.
Pursuant to notice , a hearing was held before me in
Seattle , Washington, on December 3, 1970. The issue
presented was whether or not, when 21 employees out of a
collective-bargaining unit of some 3 ,000 employees were
permitted to transfer to Respondent from an affiliated
corporation , the Respondent was a successor bound by the
terms of the collective -bargaining agreement between the
Union and the former employer. The parties were given an
opportunity to file briefs . Briefs were received from the
General Counsel and the Respondent and have been
considered.
From my observation of the witnesses and upon the
entire record in the case , I make the following:
FINDINGS OF FACT
1. THE BUSINESS OF RESPONDENT
Respondent , a Delaware corporation , incorporated in
1967, is a wholly owned subsidiary of General Telephone &
Electronics Corporation (herein called General Corpora-
tion). General Corporation has other subsidiary corpora-
tions which are engaged in providing telephone service in
various States of the United States. Among other such
subsidiaries, which are either wholly owned or controlled
by General Corporation, is the wholly owned subsidiary,
General Telephone Company of the Northwest, Inc.
(herein called General Northwest), which has its headquar-
ters in Everett , Washington, and which furnishes telephone
services in the States of Washington and Oregon.
Respondent is engaged in developing and furnishing data
processing services to telephone company subsidiaries of
General Corporation as well as to unrelated customers.
Respondent, which has its home office in Tampa, Florida,
has four major computer centers, one in Tampa, Florida,
one in Erie, Pennsylvania , one in Fort Wayne, Indiana, and
one in San Angelo, Texas. In addition , it has lesser facilities
in Everett, Washington; Lexington , Kentucky; Marion,
G. T. & E. DATA SERVICES CORP. 723
Ohio; Grinnell, Iowa; Durham, North Carolina; and
Johnstown, New York.
In the course of its business operations, Respondent
annually performs services to its parent and affiliated
companies equal to or exceeding $500,000 and purchases
and causes to be transported directly across state lines
goods and materials valued in excess of $50,000.
Jurisdiction of the Board is conceded. I find that the
Board has jurisdiction and that it will effectuate the policies
of the Act to assert jurisdiction in this case.
intending to accomplish the change in September 1968,
"but inasmuch as it was tied in with the need for floor space
and the building requirements, the original intent was
postponed until later, or actually until the first part of
1970." Meanwhile, Respondent was erecting a new building
in Everett, which was ready for occupancy sometime in
January 1970.
2. Transfer of data processing functions in
January 1970
II. THE LABOR ORGANIZATION AND ITS AGREEMENT
WITH GENERAL NORTHWEST
It is conceded that the Union is a labor organization
within the meaning of the Act. It is also conceded that the
Union is the collective-bargaining representative for
approximately 3,000 employees in a unit described in its
latest collective-bargaining agreement (having a term
extending from December 1, 1968, to December 1, 1971), as
all employees of General Northwest, exclusive of superviso-
ry, confidential, and professional employees, as defined by
the Labor Management Relations Act of 1947. The
agreement contains a union-shop clause, a checkoff
provision, and an agreement that the successors and assigns
of the parties should be bound by the terms and conditions
of the agreement.
III. UNFAIR LABOR PRACTICES
A. Data Processing
1. Data Processing before 1970 at General
Northwest
From 1960, or perhaps even earlier,' General Northwest
had leased computer equipment from one of two unrelated
companies. Data processing was then under the accounting
department. After the formation of the Respondent in 1967,
it acquired title to previously leased machines. In 1968,
General Northwest entered into a leasing agreement with
Respondent for the equipment which the former had
previously leased from the unrelated company. About the
same time, it created a separate data processing department
under a supervisor who was paid by Respondent. The 1968
leasing agreement was terminable after 1 year on 60 days'
notice by either party. About 22 employees of General
Northwest performed the data processing services for that
company on the leased equipment. From late June 1969,
the regional data processing director of the northwest
region of Respondent was Leland Cisney, who was also
data processing director for General Northwest 2 Cisney's
salary was paid by Respondent. Don Solle, vice president
and controller of General Northwest, testified, and I credit
his testimony, that General Northwest had considered a
change to have Respondent exclusively perform the data
processing services for General Northwest as early as 1968,
.1 An exhibit in evidence recites that General Northwest was
incorporated on March 31, 1964 However, Don Solle, vice president and
controller of General Northwest, testified that he had been employed by
that company for 20 years and that General Northwest had leased IBM
machines from 1960 to 1968 and had converted from Remington Rand
equipment in 1959
On December 15, 1969, Gordon Wood, Respondent's
director of personnel, with offices in Tampa, Florida, held a
meeting at Everett, Washington, at which he told the
employees in the data processing department of General
Northwest how the Respondent got started and of a need in
the area of General Northwest for its services and of its
plans to take over the data processing functions.3 In
response to questions, he told the employees that they were
free to choose whether to transfer or to remain with
General Northwest, that they would receive the same pay if
they transferred, that they would not lose their seniority if
they transferred, but that they would not be under the
Union's contract if they transferred and so would not carry
over their rights in the pension plan under the Union's
contract but would be under Respondent's pension plan.
He told them that the transfer would be made as of January
1, 1970.
On January 1, 1970, 21 of the 22 data processing
employees voluntarily transferred to the payroll of
Respondent. The remaining one chose to stay with General
Northwest and was assigned to other work. The 21,
however, although on Respondent's payroll, remained and
worked in the same space where they had been working
until January 23, 1970, when the data processing machines
were transferred to the Respondent's new building, which
was located about 2 miles from the building of General
Northwest. Then, supervisory and nonsupervisory employ-
ees moved to the new building. The 21 nonsupervisory
employees constituted Respondent's full complement
thereof at that time. Although the job designations of these
employees was changed by Respondent, they continued to
perform substantially the same functions for Respondent
that they had been performing for General Northwest.
Such change as did take place in their work was partly due
to the impracticality of making personal pickups or delivery
of data material, partly due to the fact that Respondent
acquired one or more pieces of a newer or more advanced
type of equipment, and in part due to the fact that
Respondent altered some procedures to keep closer track of
the data material delivered by, or being returned to,
General Northwest.
Over a period of time, Respondent made service
contracts with some outside customer , and, because of this,
a few employees acquired some new functions. I conclude,
however, that this fact did not appreciably alter the nature
2 Preceding Cisney was Ben Scott , who was an employee of
Respondent, paid by the Respondent although he was functioning for
General Northwest
3 Employees had heard earlier of a plan eventually to put all data
processing under the Respondent.
724 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
of the work performed by the employees, and they were still
able to perform the work within their regular hours of
employment. I also conclude that the greater part of
Respondent's services in the northwestern area extended to
the needs of General Northwest.
On April 9, 1970, General Northwest filed with the
Washington Utilities and Transportation Commission a
required "Application for Approval of Affiliated Interest
Contract" with Respondent. In this application, General
Northwest stated that it was its opinion that "the hiring of
computer services from a telephone-oriented computer
company will provide even greater advantages than the
leasing method" which the commission had approved in
1968. The record does not disclose the date of approval of
their application by the commission, if that took place
before the hearing at all. From this fact, it seems apparent
that, in first effecting a transfer of its data process functions
to Respondent, General Northwest anticipated no opposi-
tion from the state commission to the transfer.
B. The Appropriateness of the Unit and the Union's
Majority therein
The Union's collective-bargaining agreement with Gen-
eral Northwest describes the appropriate unit as "all
employees exclusive of supervisory, confidential and
professional employees as defined by the Labor Manage-
ment Relations Act of 1947." The complaint, however,
describes the appropriate unit as:
All machine clerks, senior clerks, and storeroom men
employed by the Respondent at its Everett, Washing-
ton, operation, excluding office clerical employees,
professional employees, guards, and supervisors as
defined by the Act.
This description apparently was intended exclusively to
cover the data processing employees hired by Respondent
as of January 1970, as will be hereinafter related.
The Union's majority in the larger unit, described in its
collective-bargaining agreement, is not contested. Since the
Union's contract contains a union-shop clause, it may be
presumed that, on January 2, 1970, the date of requested
recognition, all employees in the unit described in the
collective-bargaining agreement were members of the
Union. It would follow that all employees in the smaller
unit described in the complaint would also be members at
that time. If Respondent was bound, as a successor, to the
terms of the Union's agreement with General Northwest,
subsequent loss of majority would be immaterial 4
C. Request and Refusal to Recognize Union
On January 2, 1970, the Union wrote a letter to
Respondent's director of personnel in Tampa, Florida,
enclosing a copy of its agreement with General Northwest
and notifying him that the Union considered Respondent
to be bound, as a successor, to the terms of its agreement
with General Northwest, with particular reference to the
4 Respondent sought to introduce evidence of loss of majority in the
unit described in the complaint as well as evidence that Respondent had
filed an employer's petition for an election The evidence was rejected as
irrelevant to the issues based on the theory of successorship. See Ranch-
Way Inc, 183 NLRB No 116
5 In fact, the other employees of Respondent were too remote to be
union-shop and checkoff provisions. Respondent's director
of personnel replied by letter dated January 12, 1970,
stating that it was a corporation engaged in the business of
furnishing data processing and business information
services to the public in a multistate area, that it was not a
public utility, was entirely separate and distinct, as a
corporate entity, from General Northwest, which was
merely one of many customers being served by Respondent
throughout the United States, denied that it was a
successor, asserted that it had not assumed any obligations,
and did not feel that it was bound by the terms of that
agreement.
D. Arguments and Conclusions
The General Counsel argues that, after the Respondent
took over the data -processing department of General
Northwest, there was a continuation of the employing
industry as to the employees involved and that the
employees involved, while not a separate unit in the past,
did constitute an identifiable group with General North-
west "inasmuch as they, together with the unrepresented
technical, administrative, and supervisory employees
[connected with data processing] constituted the entire data
processing department of General Northwest and, after
transfer, were not integrated with other employees of
Respondent." 5
The General Counsel also considers significant the fact
that from January 1 to 23, 1970, Respondent operated the
data processing department at the premises of General
Northwest with no appearance of'change. I find this fact to
be of no great significance, however.6 It had been
contemplated by General Northwest and by the Respon-
dent as early as 1968, when the lease agreement was entered
into, that Respondent would, when space became available
for it, remove the data processing functions to its own
premises. Meanwhile the data processing department was
under the supervision of an employee on Respondent's own
payroll. However, since the data processing employees,
themselves, were on the payroll of General Northwest prior
to 1970, Respondent could not readily claim that they were
not in the collective-bargaining unit described in the
Union's agreement of December 1968, and this fact creates
the problem here.
Respondent, in its brief, points to evidence, which I find
to be fact, that marks it as a separate corporation unrelated
to General Northwest. It has no interlocking directorate
and no common officers with the latter. Their personnel
policies are separately determined, and Respondent, doing
business on a national scale, unlike General Northwest, is
not a public utility but is engaged in a different business,
the furnishing of services not only to subsidiaries of
General Corporation but also to the general public.
Two aspects of this case render the problems relatively
more difficult. The first is the fact that, although
Respondent is a separate corporation, the hand that
appropriately in the same unit with the employees taken over from General
Northwest. In Lloyd A Fry Roofing Co, 176 NLRB No. 136, the argument
of absorption into a larger group of the successor's employees was rejected
for this very reason
6 See Northwest Galvanizing Company, 168 NLRB 26
G. T. & E. DATA SERVICES CORP. 725
controls it (General Corporation) is the same as that which
controls General Northwest. If Respondent were in a
wholly unrelated type of operation, as for example a chain
of merchandise stores, that control by the same holding
company would be of no significance. But although the
Respondent is not a public utility company itself, General
Corporation or its directors caused it to be brought into
existence with the primary purpose of improving the
operations, and reducing expenses, of General Corpora-
tion's operating subsidiary utility companies, including
General Northwest. Respondent's services to the general
public, therefore, appear to be an incidental, rather than the
prime, reason for Respondent's existence. Thus, the
purpose for which Respondent was incorporated-to serve
utility companies wholly owned by General
Corporation-does give Respondent an appearance of an
arm of such utility companies within the area of each, and
gives rise to a possible argument based thereon .7 Actually,
however, the General Counsel's theory is exclusively one of
successorship. He never once suggested that the case be
considered from the standpoint of a single-integrated
business . Because of this, as well as because evidence of
common control is lacking, I conclude that it is not, in any
event.
Another facet of this case involves the question of
whether, as a matter of law, a union agreement with one
employer extends to another employer when the latter does
not take over the entire business embracing the existing unit
but takes over only a segment of such business and hires
that portion of the unit employees who worked in that
segment of the business. The Respondent contends that,
where a unit is split, the Board should not bind as a
successor the employer taking over only part of the unit.
The General Counsel argues that the Respondent should be
considered a successor who is bound by the terms of the
Union's agreement under the doctrine announced in
William J. Burns Detective Agency, 182 NLRB No. 50,
because, although only a fragment of the unit was being
broken off from the entire unit and taken over by the
Respondent, that fragment was an identifiable group while
it was at General Northwest. It was, in fact, the entire data
processing department. Respondent asserts that "there
appear to be no reported decisions whatever in which the
Board has found successorship where the affected enter-
prise did not encompass the whole of a certified or
recognized employee unit," and it distinguishes the cases of
Ranch-Way, Inc., 183 NLRB No. 116, and Solomon
Johnsky, d/b/a Avenue Meat Center, 184 NLRB No. 94, on
the ground that, in those cases, the contract in one case and
a local appendix in the other recognized the segment
transferred as a separate and distinct unit. I find neither
case to be controlling here for the additional reason that in
those cases the primary business of the predecessors, was,
itself, carried on by the successor, a fact not present here, as
will be taken up hereinbelow.
A case which might have thrown some light on the
problem of a split unit is that of N.L.R.B. v. Lloyd A. Fry
Roofing Company, Inc., 435 F.2d 848 (C.A. 5), 76 LRRM
2001, where the court remanded the case to the Board to
determine the effect of dividing the unit between two
employers. In that case, the predecessor operated a paper
company making both tissue paper and felt paper. The
union won an election for a unit embracing both. A day or
so before the certification, the predecessor closed down its
tissue paper operation and terminated all tissue paper
employees. A couple of months later, the predecessor sold
the felt paper operation, including the plant, inventory, and
equipment, to the buyer. The latter closed the plant for
repairs and renovations for about 3 weeks. Then it began to
hire, and first among those it hired were former employees
of the predecessor. Only one employee hired had not
worked for the predecessor and he worked for the buyer for
but 3 days. About 10 days later , the union requested
recognition and bargaining on the basis of its certification.
The buyer refused. In an unfair labor practice case, the
buyer argued that, to require it to bargain, would amount to
"splitting" the previous single tissue paper and felt paper
unit into two parts since there was nothing to prevent the
seller or someone else from reactivating the tissue paper
operation. The Trial Examiner concluded that his findings
could not be based on a contingency which had not
materialized but noted that proper procedures existed for
reopening the matter if the tissue paper operation was
reactivated by the seller . After the Trial Examiner's
Decision had issued and while the case was pending before
the Board, the seller reactivated the tissue paper operation.
The buyer then sought to reopen the case but was
unsuccessful, the Board taking the position that the
reactivation of that operation was irrelevant because it took
place after the alleged violation of the Act. The circuit court
remanded the case to the Board to consider the effect of the
splitting of the unit and the reactivating of the tissue paper
operation. As of this writing, the Board has not issued a
supplemental decision.
However, even if the Board had decided that a unit could
be divided between predecessor and successor, that would
not, by itself, resolve the issue here presented. It will be
observed that in cases where successorship is found, it is
also found that there is a continuation of the same
"employing industry." This does not mean that slight
variations in the nature of the business or unit would alter
the case .8 But it does mean that the industry's purpose for
existing in such cases is perpetuated after a transfer of title .'a
Here, what changed hands was a single operation of many
in the industry of General Northwest-the industry of a
telephone utility. The industry itself or a major part thereof
was not transferred. Considering the fact that the
transferred operation had been performed on Respondent's
machines, which were merely leased to General Northwest
(under a lease which was contemplated to be terminated
when Respondent would have its own premises), that
Respondent supervised the operation itself (although the
supervised employees were those of General Northwest),
and that Respondent removed its own machines rather
7 Cf. Standard Plumbing and Heating Company, Inc, 185 NLRB No. 63; 9 A transfer of a major part of the employing industry without a transfer
N.L.R B. v Herman Bros. Pet Supply, 325 F 2d 68 (C.A 6) of title appears to be the distinguishing factor in Joe Robertson & Son, Inc
8 S-H Food Service, Inc, 183 NLRB No. 124; Bachrodt Chevrolet Co., and NJ. Drywall Company, Inc., 174 NLRB No 160, where no
183 NLRB No 151, Polytech, Incorporated, 186 NLRB No 148; Zayre successorship was found. The division of an appropriate unit was not really
Corp., 170 NLRB No. 190; Will Coach Lines, Inc, 175 NLRB No. 87. considered there.
726 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
than those of General Northwest when the lease was
terminated, after which Respondent performed the same
operation on those machines at its own building, although
manning those machines with employees who had formerly
worked for General Northwest, but who formed an
extremely small proportion of the collective-bargaining
unit, and who have never had an opportunity to vote on
whether or not they wish to be represented in a separate
unit, I reach the conclusion that, on the unique facts of this
case, Respondent was not a successor to the business of
General Northwest.1° Accordingly, I find that Respondent
has not committed the unfair labor practice alleged.
Upon the foregoing findings of fact, I make the
following:
CONCLUSIONS OF LAW
1. Respondent is engaged in commerce within the
meaning of Section 2(6) and (7) of the Act.
2. The Union is a labor organization within the
meaning of Section 2(5) of the Act.
3. Respondent has not engaged in unfair labor practices
within the meaning of Section 8(a)(5) or (1) of the Act.
Upon the foregoing findings of fact, conclusions of law,
and the entire record, and pursuant to Section 10(c) of the
Act, I hereby issue the following recommended: 11
ORDER
The complaint is dismissed in its entirety.
10 If Respondent were bound as a successor it would not , in any event, the Rules and Regulations of the National Labor Relations Board, the
be because of the clause in the collective -bargaining agreement purporting findings , conclusions , and recommended Order herein shall , as provided in
to make it binding on successors of the parties since the Respondent did Section 102 48 of the Rules and Regulations , be adopted by the Board and
not sign the agreement. Joe Robertson & Son, Inc, 174 NLRB No. 160 become its findings , conclusions, and Order, and all objections thereto
11 In the event no exceptions are filed as provided by Section 102.46 of shall be deemed waived for all purposes.