H. B. Design & Mfg., Inc.

National Labor Relations Board - Board Decisions

Jul 16, 1990

299 N.L.R.B. 73 (N.L.R.B. 1990)

H B DESIGN & MFG 73
H. B. Design & Mfg., Inc. and Local Lodge No. 28,
International Brotherhood of Boilermakers,
Iron Ship Builders, Blacksmiths, Forgers and
Helpers, AFL-CIO. Case 22-CA-16183
July 16, 1990
DECISION AND ORDER
BY CHAIRMAN STEPHENS AND MEMBERS
CRACRAFT AND OVIATT
On December 27, 1989, Administrative Law
Judge D Barry Moms issued the attached deci-
sion The General Counsel filed exceptions and a
supporting bnef
The National Labor Relations Board has delegat-
ed its authonty in this proceeding to a three-
member panel
The Board has considered the decision and the
record in light of the exceptions and bnef and has
decided to affirm the judge's rulmgs, fuldmgs, 1 and
conclusions only to the extent consistent with this
Decision and Order
On November 14, 1988, the Respondent pur-
chased the assets, mventory, and equipment of
J W Runge & Co (Runge) Followmg the pur-
chase, the Respondent continued to manufacture
the same product as its predecessor, from the same
location and with the same customers At the time
of purchase, the Respondent employed 11 employ-
ees from its predecessor's work force of 15 Based
on these facts, the judge found the Respondent to
be the legal successor to Runge 2
Runge had been party to successive collective-
bargaining agreements with Local Lodge No 316,
International Brotherhood of Boilermakers, Iron
Ship Builders, Blacksmiths, Forgers and Helpers,
AFL-CIO (Local 316), the most recent of which
was effective from February 27, 1987, through
February 26, 1990 Effective Apnl 1988, Local 316
merged with Local Lodge No 28, International
Brotherhood of Boilermakers, Iron Ship Builders,
Blacksmiths, Forgers and Helpers, AFL-CIO
(Local 28) In November or December 1988, the
business manager of Local 28 made a demand for
recognition on the Respondent Despite bemg in-
formed of the merger, the Respondent refused to
recognize Local 28
Pnor to the purchase of Runge, the Respond-
ent's presidents assured the Runge employees that
1 No exceptions have been filed to the judge's finding that the Re-
spondent violated Sec 8(aX1) of the Act by Interrogating employees con-
cerning their union activities
2 No exceptions have been filed to this finding
3 The Respondent's president was employed as the general manager of
Runge
they would have jobs with the Respondent, with-
out indicating that they would be expected to work
under different terms and conditions of employ-
ment Following the purchase, the Respondent's
president again met with the employees and at that
time informed them of changes in their terms and
conditions of employment 4 Thereafter, the Re-
spondent ceased making pension fund contnbutions
required under Runge's contract with Local 316,
and stopped deducting union dues as required
under that contract Several months later the Re-
spondent granted a wage mcrease to its employees
All these changes were accomplished without
notice to Local 28 and without bargaining The
judge found that these changes would constitute
unlawful unilateral changes under NLRB v Burns
Security Services, 406 U S 272 (1972), if the Re-
spondent had been required to bargain with Local
28 5
The judge concluded, however, that the Re-
spondent was not obligated to bargain with Local
28 The judge correctly set forth the Board's well-
established position that mergers between unions at
the local or International level are valid when it is
shown (1) that the members of the constituent
unions were given an opportunity to consider and
vote on the proposed change through a democratic
process and (2) that the identity of the representa-
tive remains essentially unchanged See, eg, F W
Woolworth Go, 285 NLRB 854 (1987) The judge
found that the Respondent had failed to meet its
burden of demonstrating a lack of due process in
the election m this case The judge found further,
however, that the record was "barren of sufficient
evidence for a finding that the identity of the rep-
resentative remains essentially unchanged" In the
absence of such a showing, the judge concluded
that the Respondent had no duty to recognize or
bargain with Local 28, and therefore did not vio-
late the Act by unilaterally implementing changes
in the unit employees' terms and conditions of em-
ployment
The General Counsel contends in his exceptions
that the judge erred in allocating to the General
Counsel the burden of demonstrating continuity of
bargaining representative following the merger
The General Counsel argues that the burden of af-
firmatively demonstratmg a change in identity is
properly allocated to the party making such a
claim We agree The party seeking to avoid an
4 These changes Included diminished holiday and vacation benefits
'No exceptions have been filed to this finding Under Burns, when It is
perfectly clear that a successor employer plans to retain the old employ-
ees and makes no mention of changes in employment conditions, the suc-
cessor is obligated to bargam concerning initial terms and conditions of
employment See, e g • Fremont Ford, 289 NLRB 1290, 1294 (1988)
299 NLRB No 12
74 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
otherwise binding bargaining obligation by assert-
ing a change in the bargaining representative fol-
lowing a merger bears the burden of demonstrating
that change National Posters, 289 NLRB 468
(1988), Insulfab Plastics, 274 NLRB 817, 821 (1985),
enfd 789 F 2d 961 (1st Cir 1986)
The Respondent has failed to present any evi-
dence to demonstrate a change in identity of the
bargaining representative Local 316 and Local 28
are affiliated with the same International union
Further, the International representative to Local
316 also assisted Local 28, following the merger,
by meeting with the Respondent and demanding
recognition The business manager of Local 28 also
testified that the collective-bargaining agreement
between Local 316 and Runge came under his di-
rection in early 1988 and that the Respondent's em-
ployees continued to be dues-paying members of
Lo'cal 28 despite the Respondent's failure to deduct
union dues In the absence of a showing by the Re-
spondent of any evidence of a lack of continuity
between Local 316 and Local 28 following merger,
we find that the Respondent violated Section
8(a)(5) and (1) of the Act by failing and refusing to
bargain collectively with Local 28 and by unilater-
ally implementing changes in its unit employees'
terms and conditions of employment
. , AMENDED CONCLUSIONS OF LAW
1 Delete paragraph 5
2 Insert the following as paragraphs 3 and 4 and
renumber the subsequent paragraphs
"(3) At all times material, Local Lodge No 28,
International Brotherhood of Boilermakers, Iron
Ship Builders, Blacksmiths, Forgers and Helpers,
AFL-CIO (Local 28) has been the exclusive repre-
sentative for purposes of collective bargaining in
the following unit, which is a unit appropnate for
collective bargaining within the meaning of Section
9(b) of the Act
"All employees regularly employed at Re-
spondent's Jersey City facility excluding office
and clerical employees, guards, watchmen,
temporary employees, engineers, draftsmen,
part-time employees who work less than 20
hours per week, salesmen, and supervisors as
defined in the Act
"(4) By refusing on request to recognize and bar-
gain collectively with Local 28 and by unilaterally
ceasing to make pension fund contnbutions and
unilaterally changing wages, vacation, and holiday
benefits, the Respondent violated Section 8(a)(5)
and (1) of the Act"
AMENDED REMEDY
Having found that the Respondent has engaged
in certain 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
We shall order the Respondent to recognize and,
on request, bargain collectively with Local 28 as
the exclusive representative of all employees in the
above-named appropriate unit concerning rates of
pay, wages, hours, and other terms and conditions
of employment and, if an understanding is reached,
embody the understanding in a signed agreement
We shall further order the Respondent to rescind,
on request, its unilateral changes in vacation, holi-
day, and pension benefits, and any other terms and
conditions of employment, and to make all affected
unit employees whole for losses, if any, they in-
curred by virtue of the Respondent's unilateral
changes to their wages, fnnge benefits, and other
terms and conditions of employment in accordance
with Ogle Protection Service, 183 NLRB 682 (1970),
with interest as prescribed in New Horizons for the
Retarded, 283 NLRB 1173 (1987) The Respondent
shall remit all payments it owes to the employee
pension fund and reimburse its employees in the
manner set forth in Kraft Plumbing di Heating, 252
NLRB 891 fn 2 (1980), enfd mem 661 F 2d 940
(9th Cir 1981), for any expenses resulting from the
Respondent's failure to make these payments Any
additional amount due the pension fund shall be de-
termined in the manner set forth in Merryweather
Optical Go, 240 NLRB 1213, 1216 fn 7 (1979)
ORDER
The National Labor Relations Board orders that
the Respondent, H B Design & Mfg, Inc. Jersey
City, New Jersey, its officers, agents, successors,
and assigns, shall
1 Cease and desist from
(a) Refusing to recognize and bargain collective-
ly with Local Lodge No 28, International Brother-
hood of Boilermakers, Iron Ship Builders, Black-
smiths, Forgers and Helpers, AFL-CIO as the ex-
clusive bargaining representative of employees in
the following appropnate unit
All employees regularly employed at Respond-
ent's Jersey City facility excluding office and
clencal employees, guards, watchmen, tempo-
rary employees, engineers, draftsmen, part-
time employees who work less than 20 hours
per week, salesmen, and supervisors as defined
in the Act
(b) Unilaterally changing wages, holiday, and va-
cation benefits, and any other terms and conditions
H B DESIGN & MFG 75
of employment of bargaining unit employees, and
unilaterally ceasing to make pension fund contribu-
tions
(c) Interrogating employees for activities protect-
ed by Section 7 of the Act
(d) In any like or related manner interfering
with, restraining, or coercing employees in the ex-
ercise of the rights guaranteed them by Section 7
of the Act
2 Take the following affirmative action neces-
sary to effectuate the policies of the Act
(a) On request, bargain with the above-named
labor organization as the exclusive representative
of all employees in the above-described appropriate
unit concerning rates of pay, wages, hours, and
other terms and conditions of employment and, if
an understanding is reached, embody the under-
standing in a signed agreement
(b) On request of Local 28, rescind its unilateral
changes in the unit employees' holiday, vacation,
and pension fund benefits, and any other terms and
conditions of employment implemented in Novem-
ber 1988, 6 and make affected employees whole for
any losses they may have suffered as a result of
these unilateral changes from November 1988 until
it negotiates in good faith with Local 28 to agree-
ment or to impasse, in the manner set forth in the
remedy section of the decision
(e) Remit all payments to the unit employees'
pension fund that it unilaterally ceased to make and
make the fund whole in the manner set forth in the
remedy section of the decision and make all pay-
ments until it negotiates in good faith with Local
28 to agreement or to impasse
(d) Post at its facility in Jersey City, New Jersey,
copies of the attached notice marked "Appendix "7
Copies of the notice, on forms provided by the Re-
gional Director for Region 22, after being signed
by the Respondent's authorized representative,
shall be posted by the Respondent immediately
upon receipt and maintained for 60 consecutive
days in conspicuous places including all places
where notices to employees are customarily posted
Reasonable steps shall be taken by the Respondent
to ensure that the notices are not altered, defaced,
or covered by any other material
(e) Notify the Regional Director in writing
within 20 days from the date of this Order what
steps the Respondent has taken to comply
6 Nothing herein shall be construed as requiring the Respondent to
reduce current wage levels See Mr Clean of Nevada, Inc , 288 NLRB
895 fn 7 (1988)
7 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 Nation-
al Labor Relations Board" shall read "Posted Pursuant to a Judgment of
the United States Court of Appeals Enforcing an Order of the National
Labor Relations Board"
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 violated the National Labor Relations Act
and has ordered us to post and abide by this notice
WE WILL NOT refuse to recognize and bargain in
good faith with Local Lodge No 28, International
Brotherhood of Boilermakers, Iron Ship Builders,
Blacksmiths, Forgers and Helpers, AFL-CIO as
the exclusive bargaining representative of employ-
ees in the following appropriate unit
All employees regularly employed at our
Jersey City facility excluding office and cleri-
cal employees, guards, watchmen, temporary
employees, engineers, draftsmen, part-time em-
ployees who work less than 20 hours per
week, salesmen, and supervisors as defined in
the Act
WE WILL NOT unilaterally change wages, holi-
day, and vacation benefits, and any other terms and
conditions of employment for bargaining unit em-
ployees, and we will not unilaterally cease making
pension fund contributions
WE WILL NOT interrogate employees for activi-
ties protected by Section 7 of the National Labor
Relations Act
WE WILL NOT in any like or related manner
interfere with, restrain, or coerce you in the exer-
cise of rights guaranteed you by Section 7 of the
Act
WE WILL, on request, bargain with Local 28 as
the exclusive representative of all employees in the
above-described bargaining unit concerning rates of
pay, wages, hours, and other terms and conditions
of employment and, if an understanding is reached,
embody the understanding in a signed agreement
WE WILL rescind, on request of Local 28, the
unilateral changes we implemented in our unit em-
ployees' holiday, vacation, and pension fund bene-
fits, and any other terms and conditions of employ-
ment, and WE WILL make affected employees
whole for any losses they may have suffered as a
result of our unilateral changes
WE WILL remit all payments to the unit employ-
ees' pension fund that we unilaterally ceased to
make, and make all payments until we negotiate in
good faith with Local 28 to agreement or to im-
passe
H B DESIGN & MFG , INC
76 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
Olivia Garcia Boullt, Esq , for the General Counsel
Henry Benson, of Jersey City, New Jersey, for the Re-
spondent
Daniel V Kearney, of Bayonne, New Jersey, for the
Charging Party
DECISION
STATEMENT OF THE CASE
D BARRY MORRIS, Administrative Law Judge This
case was heard before me in Newark, New Jersey, on
June 12, 1989 1 Upon a charge filed on February 22, a
complaint was issued on March 31, alleging that H B
Design & Mfg, Inc (Respondent) violated Section
8(a)(1) and (5) of the National Labor Relations Act (the
Act) Respondent filed an answer denying the commis-
sion of the alleged unfair labor practices
The parties were given full opportunity to participate,
produce evidence, examine and cross-examine witnesses,
argue orally, and file briefs A brief was filed by the
General Counsel
On the entire record of the case, including my obser-
vation of the demeanor of the witnesses, I make the fol-
lowing
FINDINGS OF FACT
I JURISDICTION
Respondent, a New Jersey corporation with an office
and place of business in Jersey City, is engaged in the
manufacture of heat exchangers Respondent admitted,
that based upon a projection of its operations since No-
vember 14, 1988, it annually sells and ships from its New
Jersey facility goods, valued in excess of $50,000, to cus-
tomers located outside the State of New Jersey I find
that Respondent is an employer engaged in commerce
within the meaning of Section 2(2), (6), and (7) of the
Act In addition, based upon the evidence in the record,
I find that Local Lodge No 28 (Local 28), International
Brotherhood of Boilermakers, Iron Ship Builders, Black-
smiths, Forgers and Helpers, AFL-CIO (IBB) is a labor
organization within the meaning of Section 2(5) of the
Act
II THE ALLEGED UNFAIR LABOR PRACTICES
A The Issues
The issues in this proceeding are
1 Is Respondent the legal successor to J W Runge &
Co ?
2 Is Local 28 the successor of Local 3169
3 Did the Respondent engage in the unfair labor prac-
tices alleged m the complaint?
B The Facts
1 Respondent is the legal successor of Runge
On November 14, 1988, Respondent purchased the
assets, mcludmg the inventory and equipment of J W
All dates refer to 1989 unless otherwise specified
Runge & Co Respondent presently has the same custom-
ers as the predecessor, and the equipment and inventory
purchased by Respondent remained in the same location
and is being used to manufacture heat exchangers, the
same product manufactured by the predecessor At the
time of the purchase Runge had approximately 15 em-
ployees When Respondent commenced its operations, it
began with 11 employees, all of whom had previously
worked for Runge The only other employee hired by
Respondent was the wife of Henry Benson, Respondent's
president and owner, who was hired as a receptionist
and bookkeeper Benson himself had previously been
general manager of Runge All of the other employees
continued in the same positions they previously held
with Runge
The Board has evolved a set of criteria to determine
whether legal successorship exists The relevant ques-
tions include
(1) whether there has been a substantial continuity
of the same business operations, (2) whether the
new employer uses the same plant, (3) whether he
has the same or substantially the same work force,
(4) whether the same jobs exist under the same
working conditions, (5) whether he employs the
same supervisors, (6) whether he uses the same ma-
chinery, equipment, and methods of production, and
(7) whether he manufactures the same product or
offers the same services J-P Mfg, Inc , 194 NLRB
965, 968 (1972), Band-Age, Inc , 217 NLRB 449,
452-453 (1975), enfd 534 F 2d 1 (1st Cu- 1976)
Based on the above, Respondent clearly meets the cri-
teria necessary for it to be deemed the legal successor of
Runge
2 Bargaining relationship
Runge and Local No 316, IBB (Local 316) had been
parties to collective-bargaining agreements since 1972,
the most recent of which is effective from February 27,
1987, through February 26, 1990 Local 316 and Local
28 merged effective April 1988 2
Prior to the purchase of Runge by Respondent,
Benson met with Runge employees, advising them of his
progress in the negotiations to purchase the Company
Several days after the purchase, Benson again met with
the employees and for the first time informed them of
changes in their benefits Local 28 had not been given
notice of any changes in the terms and conditions of em-
ployment nor had Respondent bargained with Local 28
After the purchase, Respondent ceased making pension
contributions and stopped deducting union dues In Feb-
ruary 1989 Respondent granted a wage increase, without
notifying or negotiating with Local 28
In November or December 1988 Daniel Kearney, busi-
ness manager of Local 28, had a discussion with Benson,
at which time Local 28 made a demand for recognition
2 Charles Thompson, IBB International representative, testified that the
merger hearings were held in the fall of 1988 and employers were not
notified until then However, the merger was "backdated" to be effective
as of Apnl 1988
H B DESIGN & MFG 77
Respondent refused to recognize the Union In January
1989 Benson, Kearney, and Thompson met The union
representatives told Benson that there had been a merger
and Local 28 had taken the place of Local 316 Benson
replied that he did not consider Respondent to be the
legal successor of Runge and for that reason he did not
believe that Respondent was bound to the contract
In NLRB v Burns Security Services, 406 U S 272
(1972), the Supreme Court made it clear that a successor
is entitled to set the initial terms of employment on
which it will hire the predecessor's employees However,
in cases where the successor plans to retain the old em-
ployees, and makes no mention of changes in employ-
ment conditions, the Board has held that the successor
must bargain concerning initial terms and conditions of
employment Royal Vending Services, 275 NLRB 1222,
1227-1228 (1985) As admitted by Benson, at the time he
told the Runge employees that they had jobs with the
new company, he did not make any changes in their
terms and conditions of employment After the purchase,
Benson for the first time informed the employees of
changes in their benefits and in February 1989 he in-
creased their wages In the event Respondent would be
required to bargain with the Union, these would consti-
tute unlawful unilateral changes
3 Successorship of the Union
Thompson testified concerning the relationship be-
tween Local 28 and Local 316, as follows
In 1988 approximately in Apnl, it became apparent
to me as the service representative to Local 316,
that their membership had dwindled and their ex-
penses were exceeding their income and it was evi-
dent that m a short period of time they would not
be able to survive I took the steps that are neces-
sary in such cases to protect the interest of the
members and made a recommendation after discus-
sion with Mr Kearney of Local 28 that a por-
tion of the membership be transfered into Local 28
[and] the remainder be merged into Local 638
Thompson further testified that members of Local 316
employed at Runge were notified in writing that a hear-
ing was to be held regarding the proposed merger and
that the merger was accomplished in accordance with
the International's constitution
The Board has long held that mergers between unions
at the local or International level are valid when it is
shown that the members of the constituent unions were
given an opportunity to consider and vote on the pro-
posed change through a democratic process and when
the identity of the representative remains essentially un-
changed F W Woolworth Co, 285 NLRB 854 (1987)
Thompson testified that the merger was accomplished in
accordance with the International's constitution and that
members of Local 316 employed at Runge were notified
in writing that a hearing was to be held regarding the
proposed merger In addition, Kearney testified that after
the merger Respondent's employees expressed their
desire to remain members of Local 28 As stated in Insul-
fob Plastics, 274 NLRB 817, 821 (1985), enfd 789 F 2d
961 (1st Cir 1986), the burden of establishing the irregu-
larity of an affiliation election falls upon the Respondent
I believe that Respondent has not shown that the constit-
uent unions were not given an opportunity to consider
and vote on the proposed change through a democratic
process
4 Continuity of identity
As stated above, for the merger to be effective, it must
also be shown that the identity of the representative re-
mains essentially unchanged This record contains virtu-
ally no evidence concerning the nature of Local 28 or of
its predecessor, Local 316 Basically the only evidence is
the testimony of Thompson that a "portion" of the mem-
bership of Local 316 was transferred into Local 28 with
the remainder being merged into Local 638 In addition,
Thompson testified that both Local 316 and Local 28 are
affiliated with the IBB In Insulfab Plastics, supra, 274
NLRB at 823, in discussing the substantial continuity of
the bargaining agent, the Board pointed out that both
before and after the merger the union had the "same offi-
cers, the same members, the same constitution, the same
bank account and the same dues" In National Posters,
289 NLRB 468, 471 (1988), the Board stated
In making assessments of bargaining "continuity,"
however, the Board has not expressly created pre-
sumptions about the particular nature of the modifi-
cation, but rather has generally examined each case
to determine the effect of the changes, if any, on
the essential identity of the bargaining representa-
tive "[S]tructure, administration, officers, assets,
membership, autonomy, bylaws, size, and temtonal
jurisdiction," NLRB v Pearl Bookbinding Co, 517
F 2d 1108, 1111 (1st Cir 1985), have all come under
scrutiny, while none of these factors has been de-
nominated as critical or dispositive, it is obvious
that some are of more significance than others
In this record there has been no consideration of any
of the above-mentioned factors The only testimony is
that both Local 28 and Local 316 belong to the same
International and that a "portion" of the Local 316 mem-
bers transferred into Local 28 Indeed, the testimony that
only a "portion" of the Local 316 members were trans-
ferred into Local 28 might of itself indicate that substan-
tial continuity does not exist In any event, the record is
barren of sufficient evidence for a finding that the identi-
ty of the representative remains essentially unchanged
Accordingly, I am constrained to find that Respondent
has no duty to recognize or bargain with Local 28
5 Interrogation
During February 1989 Local 28 representatives met
with Benson, at which time the employees were also
present The Union met separately with the employees
and Benson testified that the union representatives told
him they had taken a vote among the employees and that
the employees had voted for the Union The record
shows that a few days later Benson asked the employees
individually about the vote and "the men said they had
78 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
not voted for the union" I find that Benson's interroga-
tion of his employees regarding their vote violated Sec-
tion 8(a)(1) of the Act
CONCLUSIONS OF LAW
1 H B Design & Mfg, Inc is an employer engaged
in commerce within the meaning of Section 2(2), (6), and
(7) of the Act
2 Local Lodge No 28, IBB is a labor organization
within the meaning of Section 2(5) of the Act
3 By interrogating employees concerning their union
activities, Respondent has engaged in unfair labor prac-
tices within the meaning of Section 8(a)(1) of the Act
4 The aforesaid unfair labor practices constitute unfair
labor practices affecting commerce within the meaning
of Section 2(6) and (7) of the Act
5 The Respondent did not violate the Act in any
other manner alleged in the complaint
THE REMEDY
Having found that Respondent has engaged in certain
unfair labor practices, I find it necessary to order Re-
spondent to cease and desist therefrom and to take cer-
tam affirmative action designed to effectuate the policies
of the Act
[Recommended Order omitted from publication ]