225 N.L.R.B. 1253 (N.L.R.B. 1976)

Graphic Arts International Union, AFL-CIO

National Labor Relations Board - Board DecisionsSep 9, 1976

225 N.L.R.B. 1253 (N.L.R.B. 1976)

GRAPHIC ARTS INTERNATIONAL UNION, AFL-CIO 1253 Graphic Arts International Union, AFL-CIO; and Lo- cal #277, Graphic Arts International Union, AFL- CIO (S & M Rotogravure Service, Inc.) and Kahle Printing Company Graphic Arts International Union, AFL-CIO; and Lo- cal #277, Graphic Arts International Union, AFL- CIO (Mueller Color Plate Co.) and Kahle Printing Company. Cases 30-CC-239 and 30-CC-245 September 9, 1976 SUPPLEMENTAL DECISION BY CHAIRMAN MURPHY AND MEMBERS FANNING AND PENELLO On January 14, 1976, the Board issued its original Decision and Order herein,' finding that the Respon- dent Unions did not engage in secondary boycotts against certain front-end shops which had subcon- tracted with Kable Printing Company to perform ro- togravure preparatory work, as those shops were al- lied with Kable in the labor dispute between the latter and its employees. In sustaining the Unions' "ally" defense, a majority of the Board Members participating held that the General Counsel had failed to adduce "clear and convincing" proof as to the permanency of Kable's announced closing of its rotogravure preparatory operations. On March 25, 1976, the United States Court of Appeals for the Seventh Circuit remanded this pro- ceeding 2 with directions that the Board apply the correct evidentiary standard in assessing the suffi- ciency of the General Counsel's proof; namely: whether or not "upon the preponderance of the testi- mony taken" it has been shown that Kable's an- nounced closing was indeed permanent The court likewise directed the Board to make and expressly state its findings with respect to Kable's intent and good faith in deciding to discontinue its aforesaid operations. Thereafter, having accepted the court's remand, we issued a notice to the parties, requesting state- ments of position. Such statements have been filed by the Respondent Unions and by Kable Printing Company, the Charging Party herein. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the Na- tional Labor Relations Board has delegated its au- thority in this proceeding to a three-member panel The Board has given full consideration to the 222 NLRB 280 2 Sub nom Kable Printing Company v N L R B, unpublished order in Case 76-1038 views of the court and has similarly considered the parties' statements of position. For reasons more ful- ly set forth below, we find that the General Counsel has not proven by a preponderance of the testimony adduced that Kable's announced decision to discon- tinue its rotogravure preparatory operations has re- sulted in a permanent cessation of these operations so as to overcome the ally defense interposed by the Respondent Unions. Further, we do not believe that the well-intentioned motives of Kable in reaching its decision warrant a different finding. At the outset, we accept as fact for the purposes of this Decison that Kable decided to discontinue the work involved in this controversy, after efforts to persuade its striking employees to return to work failed, for valid economic reasons related to its com- petitive position in the industry and to profitability, and not as a bargaining strategem to force capitula- tion by the Unions in their labor dispute with Kable. But Kable's good faith is not the relevant consider- ation. We are not faced here with determining the legality of Kable's conduct in seeking to subcontract the work in controversy. Clearly, Kable has the right by all legitimate means to assure that its commit- ments to its customers are met, to seek additional customers, and, otherwise, to pursue business as usu- al, notwithstanding the labor dispute between it and the Union. Thus, Kable has the right to hire strike- breakers, to subcontract out the work involved in the dispute, or, if necessity demands, to attempt to do both. Likewise, the Unions have the right to engage in concerted protected activity to counter the struck Employer's efforts. Kable concedes that it continues to perform and has maintained the capacity to perform much of the work here in question. However, it attributes its unactualized intent to transfer permanently all of the controversial rotogravure preparatory operations to subcontractors and the performance of residual pre- paratory work as being caused by the effectiveness of the Unions' counter moves which necessitates reten- tion of a limited production capacity. It asserts that the short duration of its agreements with subcontrac- tors and the lack of specificity are occasioned by the absence of those contractors' proven ability, which also explains the "high profile" of Kable's so-called quality control personnel who were engaged to over- see the work of the subcontractors. The continued chroming and stripping of cylinders at Kable's facili- ty and the marking up of proofs, which was previous- ly done by Kable's striking employees, were ex- plained for the most part as necessitated by a lack of subcontrator capability. Accepting the foregoing assertions and explana- tions, we are satisfied that Kable has not gone out of 225 NLRB No. 186 1254 DECISIONS OF NATIONAL LABOR RELATIONS BOARD the business of furnishing finished rotogravure work to its customers. Significant in our view is the fact that throughout this controversy, Kable has main- tained in all its essential characteristics the same rela- tionships with its customers as it had previously, un- der contractual arrangements which establish Kable as the sole producer of its customers' printed materi- als. In the beginning, Kable authored arrangements, nominally between its customers and front-end shops, in an attempt to have the struck work per- formed without drawing those shops into the contro- versy as allies of Kable. Those efforts proved unsuc- cessful.' Thereafter, Kable dealt directly with the front-end shops as subcontractors, while maintaining the traditional form and content of its contracts with customers. These contracts call for the production of finished materials, and encompass all phases of the work entailed in the production of same, including rotogravure preparatory work, printing, binding, and distribution. Clearly, by so contracting, Kable as- sumes liability for any failure in contract perfor- mance. It can hardly be said in such circumstances that Kable, which continues to contract for the per- formance of rotogravure preparatory work with cus- tomers seeking this service and stands ready to as- sume the risks attendant upon failure to perform such contracts, has hired additional engravers for quality control purposes, and continues to chrome and strip cylinders and to mark up proofs, has per- manently gone out of the rotogravure preparatory portion of its business, It still sells and furnishes roto- gravure services and products to its customers. The fact that it has determined to subcontract all or sub- stantially of the rotogravure production work does not alter the fact that it is the work of the striking employees that has been contracted out. The fact that the decision to do so, and do so on a permanent basis, was a good-faith business decision necessitated in part or in whole as a response to conditions grow- ing out of the Unions' strike in support of their refus- al to accept Kable's bargaining proposals concerning terms and conditions under which such work would be performed by Kable's employees, can hardly take it out of the category of struck work, at least during 3 The unions' ally defense was sustained by this Board in 3 prior decisions which were affirmed by the court of appeals in opinions handed down on August 17. 1976 See Mount Morris Graphic Arts I nternational Union Local No 91-P (GA I U) (Blackhawk Engraving Co), 219 NLRB 1030 (1975), affd 540 F 2d 1296 (C A 7, 1976) See also Graphic Arts International Union (GA I U) Local #277, and Graphic Arts International Union, AFL-CIO (S & M Rotogravure Services, inc ), 219 NLRB 1053 (1975), and Local No 245, Graphic Arts International Union, AFL-CIO (Graphicscans Corporation), 220 NLRB 407 (1975), both cases affd sub nom Kahle Printing Co v N L R B, 540 F 2d 1304 (C A 7, 1976) the time the labor dispute between Kable and Re- spondents continues. Accordingly, and upon due consideration of all the circumstances disclosed in the record, including the circumstances that the sub- contractors, S & M and Mueller, admittedly were aware of the strike when they agreed to do the work involved, and Kable devised and originated the con- tracts with them in order to meet contractual obliga- tions imperiled by the strike, we find that the Gener- al Counsel has failed to establish that Kable Printing Company has discontinued its rotogravure business. Accordingly, we find that the General Counsel has not overcome the Unions' ally defense to unlawful secondary conduct allegations and we shall, there- fore, reaffirm our dismissal of the complaints herein in their entirety. CHAIRMAN MURPHY, dissenting: Having dissented vigorously from the original de- cision reached by my colleagues in this proceeding, I am no more satisfied that my colleagues, having abandoned the inappropriate evidentiary burden they earlier placed on the General Counsel, have now done justice in this case. While paying lipservice to the appropriate "preponderance of the evidence" standard, my colleagues insist upon the result previ- ously reached. However, there can be no reasonable doubt that the Unions' ally defense must fail on the state of this record. It is clear, upon examination of the facts, that Ka- ble has done everything it could do to implement its announced decision to terminate rotogravure prepa- ratory operations. I need not discuss or belabor those facts which were considered in my earlier dissent. Indeed, my colleagues themselves seem to recognize the precarious state of their position by substituting a different rationale to reach the result to which they seem unalterably committed. Specifically, my colleagues' labored reference to the content of contracts between Kable and its cus- tomers necessarily precludes finding that Kable can ever permanently close down its struck operations so long as contracts with its customers encompass all phases of the work entailed in the production of printed materials. By this holding, my colleagues have, without so stating, found that the ally doctrine applies in situations where a struck employer has, in fact, permanently closed down its struck operations. I find this extension of the ally doctrine to be wholly unsupportable by logic, Board precedent, or judicial acceptance. Accordingly, I dissent no less vigorously than be- fore.