Gyrodyne Co. of America, Inc.

National Labor Relations Board - Board Decisions

Jun 4, 1973

203 N.L.R.B. 1120 (N.L.R.B. 1973)

1120 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Gyrodyne Company of America , Inc. and International
Union, United Automobile, Aerospace & Agricultur-
al Implement Workers of America, UAW. Case 29-
CA-57
June 4, 1973
SECOND SUPPLEMENTAL DECISION
BY CHAIRMAN MILLER AND MEMBERS FANNING AND
PENELLO
On March 12, 1968, the National Labor Relations
Board issued a Decision and Order I in the above-
entitled proceeding in which it adopted the findings,
conclusions , and recommendations of Trial Examin-
er 2 Arthur E. Reyman as contained in his Trial
Examiner's Decision of January 21, 1966. The Board
therein accepted the Trial Examiner's credibility reso-
lutions and concluded , among other things , that Re-
spondent had not engaged in conduct in violation of
Section 8(aXl) and (3) of the National Labor Rela-
tions Act as alleged. Subsequently, the Charging Party
filed with the United States Court of Appeals for the
District of Columbia Circuit a petition for review of
the Board's Order dismissing the complaint.
Thereafter, on November 5, 1969, the court handed
down its opinion' in which it stated that certain of
Respondent 's records , subpenaed by the General
Counsel but not produced by Respondent, appeared
clearly relevant to the issues in the case. The case was
remanded , and the Board , on October 8, 1970 , issued
its Supplemental Decision ° setting forth its reasons
for not drawing an "adverse inference" from
Respondent's failure to produce certain documents
pursuant to a subpoena duces tecum. Thereafter, the
Charging Party again filed with the United States
Court of Appeals for the District of Columbia a peti-
tion for review of the Board's Supplemental Decision.
On January 25, 1972, the court handed down its opin-
ion S in which it reiterated its position that the docu-
ments in issue were relevant to the case and that the
Board should, subject to certain conditions, draw an
adverse inference from the failure of the Respondent
to produce its "rehiring records." In its opinion, the
court directed the Board to "allow the company 30
days to produce the rehiring records." In accord with
the court's opinion, the Board, by order dated April
i 170 NLRB 236
2 Although the title of "Trial Examiner" was changed to "Administrative
Law Judge" effective August 19, 1972, the designation Trial Examiner in
reference to Mr. Arthur E. Reyman has been retained herein for purposes
of clarity.
3 419 F .2d 686 (C.A.D C , 1969)
4 185 NLRB 934.
3 459 F .2d 1329 (C A.D.C , 1972).
26, 1972, reopened the record herein and remanded
the case for hearing before an Administrative Law
Judge. Pursuant to the remand, a hearing was held
before Administrative Law Judge Abraham H. Mailer
on June 26 and 28, 1972, at Brooklyn, New York, and
on July 25 and 27, 1972, at Centerreach, New York.
On December 29, 1972, the Administrative Law Judge
issued his Supplemental Decision. Thereafter, the Re-
spondent, the General Counsel, and the Charging
Party filed exceptions with supporting briefs.
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 penultimate issue involved in this case is the
legality of the Respondent's actions in discharging
and laying off certain employees in June 1964. The
General Counsel and the Charging Party maintain
that the terminations were because of union activity
while the Respondent contends that the terminations
resulted from "cost-cutting" increased efficiency and
the conversion from proto-type manufacturing to pro-
duction line manufacturing.6
After an extensive hearing spanning many days and
encompassing the testimony of numerous witnesses in
the intitial proceeding, Trial Examiner Reyman is-
sued his Decision wherein he found that the Respon-
dent had not violated the Act in discharging or laying
off the named employees. Critical to the Trial
Examiner's decision was that aspect of Respondent's
defense relating to "cost-cutting." Thus, any records
of Respondent relating to its "rehiring" or "hiring"
during the critical period immediately following the
layoffs would be germane to the case. At the hearing,
Respondent, while submitting substantial portions of
the records covered by the subpena, did not submit
those documents covering the hiring or rehiring re-
cords for the critical period. The failure of Respon-
dent to produce these subpenaed records was raised
as an issue at the hearing. At the time, the Trial Exam-
iner had before him the testimony of Respondent's
officials that there was no hiring or rehiring during the
critical period. In view of the Respondent's failure to
produce the records, the Trial Examiner, at one point
during the hearing, indicated that he would draw an
adverse inference from the failure of the possessor of
the records to produce the same. However, in his De-
cision, the Trial Examiner did not draw any adverse
6 Prior to the original hearing herein, the Respondent was served with a
subpoena duces tecum, requesting, inter aha
Names and last known addresses of all persons hired or rehired by
Respondent in the period January I, 1964, through December 31, 1964,
in the following classifications and departments . packager ; packager,
[sic] drones , transmissions or blades, inspector , shipping, receiving,
packaging, expediter, inspector, mechanical , technician , electronic,
test, operator, drill press, technician , calibration ; mechanic, blade; ma-
chinist , lather, packager
203 NLRB No. 164
GYRODYNE CO.
inference , relying instead on the credited testimony of
Respondent 's officials that there had been no "hiring"
or "rehiring" during the critical period.
The case, in this posture , as noted above , went to
the court of appeals . In its most recent remand giving
rise to the instant proceedings the court took the posi-
tion that the Board should have drawn an adverse
inference from a failure by Respondent to produce
the "rehiring" records . The court directed the Board
to reject Respondent 's cost-cutting defense unless the
Respondent within 30 days produced its hiring or
rehiring records . In addition , the court directed that
in evaluating Respondent 's other defenses the Board
should take into account the fact that the testimony
of Papadakos , Respondent 's president , "has been
thoroughly impeached ," if the cost-cutting defense is
stricken . Following the court 's remand , a hearing was
held before Administrative Law Judge Mailer where-
in the subpenaed material was made available. The
hearing , which opened on June 26 , 1972, was thereaf-
ter continued for several days to allow the General
Counsel and counsel for the Charging Party to exam-
ine the records produced by Respondent in answer to
the subpena . Counsel for the Charging Party spent
several days examining Respondent 's records , includ-
ing therein those records pertaining to Respondent's
"hiring" and "rehiring" practices during the critical
period . The record shows and the Administrative Law
Judge found that , after examining the record , neither
the General Counsel nor the Charging Party submit-
ted any evidence from the proffered records to show
that the Respondent had "hired " or "rehired" any
employees after the termination of the alleged discri-
minatees . As the case now stands, the testimony of
Papadakos and other supervisory personnel on the
Respondent 's "cost-cutting" defense has been fully
corroborated . The record does not show why the Re-
spondent refused to submit the subpenaed evidence at
the earlier hearing , and we can only speculate as to
why Trial Examiner Reyman did not draw an adverse
inference from the Respondent's failure to produce
the records since there was substantial testimony on
the "rehiring" issue . In any event , the record clearly
establishes that Respondent 's records were not with-
held for the purpose of suppressing evidence that
would have been unfavorable to Respondent's "cost-
cutting" defense , with regard to "hires" during the
critical period.
Notwithstanding his conclusion that there was no
"hiring" or "rehiring" during the critical period, the
Administrative Law Judge weighed the question of
certain transfers and layoffs in the "blade" depart-
ment. Thus , relying on the fact that three union mem-
bers had been laid off in that department while other
employees of lesser seniority were either transferred in
1121
or returned to it from sick leave , as well as the fact that
certain employees received pay increases , the Admin-
istrative Law Judge concluded that these factors con-
tradict Respondent's defense of "cost-cutting" as to
the blade department . We do not agree . The record in
the earlier hearing clearly shows that Respondent was
relying on at least three reasons for the layoffs.
Respondent 's defenses were that selections were
based on the fact that its operations were converted
from proto-type production to mass production, that
increased efficiency was desired , and that per unit
costs would be reduced . At no time did the Respon-
dent claim that all selections were predicated on lack
of seniority or deficiencies in the employees laid off.
To the contrary, the record clearly shows that
Respondent 's witnesses were aware of the fact that
some of the laid-off employees were in one sense or
another superior to those retained and that many of
them had more seniority than those retained. These
factors were fully developed on the initial record and
were considered by Trial Examiner Reyman in his
initial decision , wherein he credited the testimony of
Respondent 's witnesses as to their reasons for select-
ing one employee for retention and one for layoff.
Since the initial record clearly shows that there were
transfers in and out of various departments , we do not
believe that the documents relied on by the Adminis-
trative Law Judge , documents that merely confirm
that which was already conceded by Respondent,
justify a conclusion that the three named employees
were selected for layoff in violation of the Act. As the
court itself noted in its remand , the Board , "in evalu-
ating these other defenses [increased efficiencies and
production changeovers] ...should take into ac-
count" the lack of a cost-cutting defense . As the "cost-
cutting" defense found by Trial Examiner Reyman is
clearly supported by the record, we affirm such find-
ing. Contrary to the Administrative Law Judge' s find-
ing, we conclude that the subsequent transfer of
employees into the "blade" department does not ne-
gate the Respondent's "cost-cutting" defense.
During the course of the hearing before the Admin-
istrative Law Judge , the Respondent produced, and
the General Counsel and Charging Party' s counsel
examined , voluminous records . Among these records
were personnel files of the employees . After examina-
tion of these records, the General Counsel and the
Charging Party requested that the Administrative
Law Judge allow into evidence certain exhibits which
allegedly would prove that certain "leadmen" in
Respondent 's employ were supervisors within the
meaning of the Act . The Administrative Law Judge,
relying on the scope of the Board's remand order
directing the hearing, refused to allow into evidence
these proffered documents.
1122 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
After the close of the hearing, the General Counsel
and the Charging Party each filed a motion to con-
form Board Order to mandate of court of appeals,
seeking therein to have the Board expand its remand
order for the purpose of allowing the proffered evi-
dence to be received by the Administrative Law
Judge. These motions were denied on the ground that
they were in effect premature exceptions of the Ad-
ministrative Law Judge 's ruling at the hearing. The
denials were without prejudice to renewal following
the issuance of the Administrative Law Judge's Deci-
sion . Following the issuance of that Decision, the
General Counsel and the Charging Party have re-
newed their motions to put into evidence those re-
cords they contend have a bearing on the supervisory
status of certain leadmen.
We agree with the Administrative Law Judge's rul-
ing on this issue. Our remand order was specifically
directed at receiving evidence on the Respondent's
"hiring" practices during the "critical period" in-
volved herein. In our opinion, this is what the court
of appeals directed the Board to do. In its opinion, the
court of appeals referred to the "hiring" or "rehiring"
issue no less than 20 times, and careful analysis of the
opinion clearly shows that its entire tenor and direc-
tion was toward the "cost-cutting" defense.
The Board, in its remand to the Administrative Law
Judge, followed the very precise directions of the
court of appeals. The opinion of the court of appeals
leaves little doubt but that the documents sought un-
der its remand to the Board were the "hiring" or "re-
hiring" records. In view of this fact the Board in its
remand to the Administrative Law Judge was equally
precise , limiting the hearing to those documents relat-
ing to the "hiring" or "rehiring" practices of the Re-
spondent . In these circumstances , we affirm the
Administrative Law Judge's ruling rejecting the prof-
fered evidence.
At the same time , mindful of the court 's repeated
admonitions in this case we have given additional
consideration to the General Counsel 's and the
Charging Party's aforementioned motions . We have
concluded that even if we were to accept the proffered
evidence, it would not support a result different from
that which we have previously reached in this case.
The documents in question are records from the
personnel files of various employees . On their face,
these documents contain at various places references
to various individuals with the title of supervisor. The
particular named individuals were also identified as
leadmen at the original hearing herein . During the
course of the original hearing , one of the issues litigat-
ed was the supervisory status of various leadmen. The
testimony and evidence concerning the supervisory
status of these individuals and their functions was
extensive . They were frequently referred to in the tes-
timony as "supervisors" on the one hand, and else-
where as "leadmen." There is no question but that the
leadmen, as a group, stood slightly higher in the pro-
duction process than the other employees. Yet, the
record clearly shows that, on the whole, their job func-
tions involved the same type work as the other pro-
duction employees. In our opinion the fact that they
were frequently referred to as "supervisors" by many
of the witnesses , as well as in the various documents
proffered, is not controlling, since the record shows
that they were engaged in day-to-day production
work, which included the making of routine assign-
ments of work and recordkeeping. We affirm our orig-
inal finding that the individuals in question are not
supervisors within the meaning of Section 2(11) of the
Act. In reaching this conclusion, we are not unmind-
ful of the court of appeals' theory that oral testimony
contradicted by documentary evidence may become
impeached testimony. While this theory might very
well have been applicable to the "cost-cutting" de-
fense advanced by Respondent's managing officials,
we do not believe that the documents submitted in
support of the motion would be sufficient to impeach
the substantive testimony of the leadman. We have
carefully reexamined the record in the light of these
contentions and are of the opinion that the leadmen
as a group testified in a frank and forthright manner
without any attempt to understate their work respon-
sibilities. In fact, the testimony of several of the lead-
men might, in other circumstances, favor a finding of
supervisory status.
While we might have reached a different conclusion
than the Trial Examiner as to the supervisory status
of Morel and, perhaps of Southworth and Manico, it
is noted that in any event, the Trial Examiner in the
main credited the denials of these alleged supervisors
with respect to the alleged conduct attributed to them
by the alleged discriminatees. Thus, the Board had
before it then, as now, the question of whether certain
unlawful conduct was engaged in and, if so, whether
the conduct complained of was the action of a super-
visor. Merely proving the supervisory status of the
individual does not prove that the unlawful conduct
has been committed. Trial Examiner Reyman had
extensive and, at almost all points, conflicting testi-
mony before him. The testimony of some of the al-
leged discriminatees bordered on the incredible.
Portions of their testimony appear to have been de-
signed to meet the exigencies of the moment. The
record shows that after due deliberation, as noted
above, Trial Examiner Reyman resolved credibility
issues in favor of Respondent 's witnesses . While the
Board might have reached different conclusions as to
the supervisory status of some of the leadmen, the
Board was of the opinion then, as it is now, that there
is nothing in the record that would support a reversal
GYRODYNE CO.
of Trial Examiner Reyman's credibility resolutions,'
and his ultimate conclusion that Respondent had not
violated the Act. In conclusion, we find that a recon-
sideration of the issue of the alleged supervisory status
of the leadmen would not lead to a different result in
this case, and, therefore, we deny the General
Counsel's and the Charging Party's motion to reopen
the record for purposes of receiving the proffered evi-
dence relating to the supervisory status of
Respondent's leadmen. Accordingly we adhere to our
original Decision and Order.
7 Standard Dry Wall Products, Inc, 91 NLRB 544, enfd. 188 F.2d 362 (C.A.
3, 1951).
SUPPLEMENTAL DECISION
ABRAHAM H. MALLER, Administrative Law Judge: The
current phase of the instant proceeding was initiated on
April 26, 1972, by the issuance by the Board of an order
reopening and remanding proceedings to Regional Director
for hearing. This case is over 7 years old and has been before
the Board and the Court of Appeals for the District of
Columbia on two prior occasions.'
The complaint issued on February 15, 1965, charged Re-
spondent with unfair labor practices in violation of Section
8(a)(1) and (3) of the Act. The latter involved the discharge
of a number of employees allegedly for union membership.
One of the defenses urged by the Respondent was that the
discharges were effected pursuant to an effort by the Re-
spondent to cut costs in the manufacture of helicopters for
the U.S. Navy; that such an effort was made pursuant to
letters from the President of the United States and the Sec-
retary of Defense.
Prior to the original hearing, the General Counsel had
issued and served upon the Respondent a subpoena duces
tecum calling for the production of certain of Respondent's
employment records. The Respondent did not honor the
subpena . Despite Respondent's failure to do so , the Trial
Examiner hearing the case did not draw any inference ad-
verse to the Respondent and recommended that the com-
plaint be dismissed. The Board adopted the Trial
Examiner's Decision .2 The Charging Party thereupon ap-
pealed to the Court of Appeals for the District of Colum-
bia which issued an opinion and order remanding the case
to the Board to "(1) explain its failure to draw the requested
inferences, (2) draw the inferences and explain the conse-
quences, or (3) require production of the records."3
Upon remand, the Board refused to draw any inference
adverse to the Respondent and set forth its rationale. The
Charging Party again appealed to the Court of Appeals for
the District of Columbia. On January 25, 1972, the court of
appeals handed down its opinion in which it stated that it
i Original Board Decision 170 NLRB 236; opinion and order remanding
case to the Board International Union, United Automobile, Aerospace, and
Agricultural Implement Workers oJAmerica (UA W) v. N. L. R. B., 419 F.2d 686
(C.A.D.C., 1969); supplemental Decision 185 NLRB 934; opinion and order
remanding case to the Board 459 F.2d 1329 (C A.D.C., 1972).
2 170 NLRB 236.
3 419 F 2d at 687.
1123
considered the subpenaed material critical to the case and
that it was of the opinion that the Board should have drawn
an adverse inference from Respondent's failure to produce
the subpenaed material. Accordingly, the court remanded
the case to the Board for further proceedings; specifically,
to reopen the record to afford the Respondent one last
chance to respond to the subpena by submitting the materi-
al originally sought therein and not produced at the hearing
before the Trial Examiner. The court directed that the Re-
spondent be given 30 days to produce the subpenaed "rehir-
ing records," holding that if the Respondent did not, within
the time period, come forward with such evidence, the
Board should strike Respondent's cost-cutting defense, and
reconsider the case on the merits taking into consideration
the factor that Respondent's defense of "cost-cutting" has
been stricken and the testimony of Respondent's president,
Papadakos, relating thereto has been "thoroughly im-
peached."4.
Following this remand, the Board issued its order on
April 26, directing that a hearing be held "for the purpose
of receiving into evidence the subpenaed records of
Respondent's `hiring' practice during the critical period in
accordance with the court's opinion and remand, but also
including any testimony of witnesses of any of the parties
hereto who may wish to present evidence relating to the
authenticity and accuracy of the evidence to be received
under this Order." The order further provided that "upon
conclusion of such hearing, the Trial Examiner shall pre-
pare and serve on the parties a supplemental decision con-
taining findings of fact based upon the evidence received
...." Thereafter, the case was assigned to me, and pur-
suant to notice a hearing was held on June 26 and 28 at
Brooklyn, New York, and on July 25 and 27, 1972, at Cen-
terreach, New York. All parties were represented at the
hearing and were afforded full opportunity to be heard.
At the hearing, Respondent produced voluminous re-
cords, and I adjourned the hearing to afford the General
Counsel and the Charging Party ample opportunity to ex-
amine such records. When the hearing resumed, the Gener-
al Counsel and the Charging Party presented a stipulation
as to the contents of certain records relating to the transfers
of employees, and the Respondent introduced evidence
with regard to such records.
Thereafter, the Charging Party and the General Counsel
announced that they had found among Respondent's re-
cords evidence which bore on another issue in the original
case, viz: That a major reason for the Board's conclusion
that the Respondent did not violate Section 8(a)(3) of the
Act with regard to 17 of 30 of the alleged discriminatees was
the Trial Examiner's finding, adopted by the Board, that
Respondent's leadmen were not supervisors, hence their
knowledge of the union activities of the dischargees was not
chargeable to the Respondent who did not otherwise have
knowledge of such union activity; the Board's finding with
respect to the leadmen's status was also a premise for the
dismissal of numerous violations of Section 8(a)(1) of the
Act in which these so-called leadmen participated; and
since the newly discovered evidence demonstrates that they
were in fact supervisors, their conduct is chargeable to the
Respondent. The Charging Party and the General Counsel
4 459 F.2d 1329, 1348.
1124 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
contended that a review of the records which the Respon-
dent had been suppressing for 7 years demonstrates: that
the leadmen effectively recommended employees for hire,
effectively recommended wage increases , normally ap-
praised work of employees for the purpose of determining
whether wage increases were to be given , often initiated a
notice of termination, and thus began the process of sepa-
rating employees, and reviewed the performance of proba-
tionary employees at the completion of the 90-day
probation period; in a number of documents, the Respon-
dent has listed these leadmen as foremen; and a very sub-
stantial wage disparity existed between the leadmen on the
one hand and other employees on the other. The Charging
Party and General Counsel contended that they have a right
to present the foregoing evidence because they are entitled
to be in the position in which they would have been, had the
Respondent complied with the subpena during the original
hearing. They therefore moved for leave to present the fore-
going evidence.
After careful consideration, I denied the motion, pointing
out that the hearing called for by the Board's order of April
26 was limited to "receiving into evidence the subpoenaed
records of Respondent's `hiring' practice during the critical
period in accordance with the Court's opinion and re-
mand." In response to the contention of the Charging Party
and General Counsel that the Board's order has construed
too narrowly the opinion of the court of appeals, I stated,
assuming arguendo that there was merit to this contention,
it was beyond my authority to revise the Board's order
which was clear and explicit on its face, and that I was
bound by it.
The Charging Party and General Counsel announced
that they would take a special appeal to the Board from my
ruling and would move to reopen the record to receive the
evidence they desired to offer. In order to enable the Charg-
ing Party and General Counsel to present appropriately this
issue to the Board, I permitted them to make a lengthy offer
of proof of the foregoing, and I closed the hearing.
Neither party filed a special appeal from my ruling. How-
ever, on August 25, the Charging Party filed with the Board
a motion to conform Board order to mandate of the court
of appeals. On September 11, the General Counsel filed a
motion to conform Board order to court of appeals mandate
and joinder to Charging Party's motion to conform to
court's mandate. On November 10, the Board issued an
order denying the motions as premature, stating that the
motions of the Charging Party and the General Counsel
were in effect an attempt to take exception to a not yet
issued decision of an Administrative Law Judge. The order
noted that the denial was without prejudice, and with leave
to file the motions anew upon the issuance of the Adminis-
trative Law Judge's decision, in their entirety c: by incorpo-
ration by reference, in any exceptions thereafter filed by the
Charging Party or the General Counsel.
Pending consideration by the Board of the aforesaid mo-
tions , the time for filing briefs was extended at request of
the parties. On December 8, the General Counsel filed a
motion, and brief in support thereof, renewing his motion
that the Board's order reopening the proceeding be con-
strued as permitting the admission into evidence of the sub-
penaed records and documents relating to the status of
leadmen as supervisors. On the same day, the Charging
Party filed a memorandum commenting briefly on the evi-
dence received and adopting the motion and supporting
brief of the General Counsel . Also filed on December 8 was
a memorandum of law submitted by the Respondent, in-
cluding proposed findings of fact and conclusions of law.
Upon consideration of the foregoing , and pursuant to the
Board 's order of April 26, I make the following:
I RULING ON THE MOTIONS TO PERMIT
THE INTRODUCTION OF EVIDENCE RELATING TO
THE ALLEGED SUPERVISORY STATUS OF LEADMEN
As indicated above the General Counsel and the Charg-
ing Party have renewed their motions to permit the intro-
duction into evidence of subpenaed records and documents
as to the alleged supervisory status of the leadmen. The
motions are denied. As I stated at the hearing, the Board's
order of April 26 was limited to "receiving into evidence the
subpoenaed records of Respondent's `hiring' practice dur-
ing the critical period in accordance with the Court's opin-
ion and remand." The proffered evidence relating to the
alleged supervisory status of the leadmen is plainly beyond
the scope of the Board's order. Were I to receive the prof-
fered evidence, I would be revising and enlarging the
Board's order. This is plainly beyond my authority. The
argument that the Board construed too narrowly the opin-
ion of the court of appeals is one which is not properly
addressed to me, but should be addressed to the Board. In
sum, the Board's order of April 26 is clear and explicit on
its face, and I am bound by it.
The argument that the proffered records are admissible
under the provisions of Section 102.48 (d)(1) of the Board's
Rules and Regulations as newly discovered evidence does
not require a different conclusion. Were the hearing before
me held pursuant to an order reopening the case generally,
the evidence would be clearly admissible. Indeed, if the
Board's order had reopened the proceeding for the purpose
of receiving into evidence all of the subpenaed records, the
proffered evidence would be admissible without regard to
Section 102.48. But such is not the order pursuant to which
I held the hearing. As I have pointed out, the hearing was
ordered "for the purpose of receiving into evidence the sub-
poenaed records of Respondent's `hiring' practice...." In
view of all the foregoing, I adhere to my ruling and deny the
motions.
11 FINDINGS OF FACT
A. Compliance With the
Subpeona Duces Tecum
Neither the General Counsel nor the Charging Party con-
tends that the Respondent has failed to comply fully with
the subpoena duces tecum. Accordingly, I find that the Re-
spondent has fully complied therewith.
B. As to the Cost-Cutting defense
It should be noted at the outset, that after examining the
records produced by the Respondent, the General Counsel
and the Charging Party did not present any evidence that
the Respondent hired or rehired any employees after the
GYRODYNE CO.
termination of the alleged discriminatees. However, as bear-
ing on the Respondent's cost-cutting defense , the General
Counsel and the Charging Party introduced evidence relat-
ing to the staffing of the blade department after the termina-
tion of three employees in that department, viz, Schmidt,
Bentivegna, and Fluellen.
In the original proceeding, the Respondent took the posi-
tion that the discharge of the three-named employees in the
blade department was the result of its effort to cut costs. The
records produced by the Respondent in the reopened pro-
ceeding demonstrate that,on the date of the termination of
these three employees, the Respondent transferred to the
blade department three employees (Rogers, Jacobi III, and
Schiel) from the manufacturing-machine shop. Subsequent-
ly, on August 24, Respondent transferred employee Cole-
man to the blade department from manufacturing-airframe
and final assembly administration department. On Septem-
ber 14, Respondent transferred to the blade department
employee Kailer from manufacturing-machine shop, ad-
ministration department. Also, on July 20, Costa and Max-
im, employees in the blade department, returned to that
department from leaves of absence.' On July 22, Dekker,
also employed in the blade department returned to that
department from a medical leave of absence which began
on March 23, 1964. In the case of Dekker, a notation in his
personnel file stated that although the Company's physician
had approved his return to work, "Mr. Dekker is still tempo-
rarily required to wear a surgical device which might limit
his work performance in any unusually strenuous activity.
If possible, therefore, please arrange Mr. Dekker's assign-
ments so that he may avoid unusually heavy work for the
next three-four weeks."
From a document entitled "Critical Department Analysis
May 1, 1964 to December 31, 1964," introduced by the
Respondent, it appears that in wood blade-inspection where
Schmidt had been employed Respondent employed four
men on May 1, 1964, three on July 1, and the staff remained
constant at three through December 31, 1964.6 Other sec-
tions of the blade department show the following: In blade
laminate cutting , Respondent had employed two men on
May 1, 1964. The number remained constant until August
30, when it increased to three, then went back to two on
October 30, and remained at that figure until December 31,
1964. In laminate glue Iayup, Respondent employed six men
on May 1, 1964. The number was reduced to five on July
1, went back to six on July 31, down to five on August 30,
four on September 28, and remained at four through De-
cember 31, 1964. In routing , where Bentivegna had been
employed, the Respondent employed eight men on May 1,
1964. The number of employees increased to nine on July
31; to 10 on -August 30, and remained constant at 10
through December 31, 1964. In hand contouring, Respon-
dent employed six men on May 1, 1964. With the termina-
tion of Fluellen and another employee, the number was
reduced to four on July 1, but increased to five on July 31,
3 Costa had been on a medical leave of absence since May 28, 1964,
Maxim likewise since May 26, 1964.
6 On September 22, one employee , Roeder , was laid off, but another em-
ployee, Raftery, was transferred from another department the next day to
take his place.
1125
and remained at that number through December 31, 1964.
In finishing, Respondent employed two men on May 1,
1964. The number of employees was increased to three on
July 1; to four on July 31; to five on August 30; to six on
October 30, and remained at six through December 31,
1964.
Returning to the eight employees who were either trans-
ferred to the blade department or returned from leaves of
absence, the record shows that on July 20, 1964, less than
a month after the termination of the three alleged discrimi-
natees, seven of the eight received pay increases ranging
from 10 to 25 cents per hour.
Respondent argues that the foregoing evidence should be
disregarded because it is outside the scope of the purpose
for which the case was reopened viz, the production of
evidence of new hires or rehires. I do not agree. While the
Board reopened the proceeding to receive evidence of
Respondent's "hiring" practice, it would be unrealistic, in
the posture of the case, to disregard the fact that Respon-
dent maintained the staffing level of the blade department
by transfers from other departments. In essence, the issue
in the reopened proceeding is whether the Respondent's
records contradict the defense that the terminations were
occasioned by the effort to cut costs. Thus, if Respondent
had hired new employees or rehired old ones after the termi-
nations, such evidence would disprove the defense. But the
continued level of staffing of the blade department, and
indeed the enlargement of the blade department staff, after
the terminations by transfers from other departments is as
relevant as if it were accomplished by hires or rehires.?
As previously noted seven of the eight employees who
either were transferred to the blade department or returned
thereto received pay increases less than a month after the
terminations of Schmidt, Bentivegna, and Fluellen. This
action is inconsistent with the contention that the termina-
tion of the three employees was occasioned by cutting of
costs. The Respondent argues that the wage increases could
be considered to be an incentive to the employees to meet
the need of operating the department with fewer employees.
The argument might have validity if, in fact, the Respon-
dent attempted to operate the blade department with fewer
employees. But as pointed out above, the Respondent's own
evidence demonstrates that the number of employees in the
Blade Department did not decrease. To the contrary, it
increased.
In view of the foregoing, I find that Respondent's records
contradict its defense that Schmidt, Bentivegna, and Fluel-
len were terminated because Respondent was attempting to
cut costs .8
7 The Respondent does not contend that the transferees and employees
returning from leaves of absence had greater seniority than the alleged discri-
minatees. Indeed, the opposite is true Thus , Schmidt and Bentivegna had
more seniority than all but one of the transferees and more seniority than the
men returning from leaves of absence . Fluellen had more seniority than four
of the eight men in the combined categories
8 Pursuant to the Board's direction to "prepare a supplemental decision
containing findings of fact based upon the evidence received ," I make no
recommendations as to the effect of my findings upon the Board's original
Decision To do so would be to go beyond the scope of the Board's Order.
The effect of the findings of fact upon the Board's original Decision is
appropriately a matter for the Board 's consideration.