Hahn Motors Inc., And Hahn Truck Sales & Service Corp.Download PDFNational Labor Relations Board - Board DecisionsMay 6, 1987283 N.L.R.B. 901 (N.L.R.B. 1987) Copy Citation HAHN MOTORS 901 Hahn Motors, Inc., and Hahn Truck Sales & Serv- NLRB v. Al Bryant, Inc., 711 F.2d 543 (3d Cir. ice Corp . and United Steelworkers of America , 1983), enfg . 260 NLRB 128 (1982). Accordingly, as AFL-CIO-CLC. Case 4-CA-13275 6 May 1987 DECISION AND ORDER BY MEMBERS JOHANSEN, BABSON, AND STEPHENS On 30 September -1983 Administrative Law Judge Joel A. Harmatz issued the attached deci- sion. The Respondent filed exceptions and a sup- porting brief, and the General Counsel filed cross- exceptions and a brief in 'support. The National Labor Relations Board has delegat- ed its authority in this _ proceeding to a three- member panel. The Board has considered the decision and the record in light of the exceptions and briefs and has decided to affirm the judge's rulings, findings, and conclusions and 'to adopt the recommended Order. In adopting the judge's findings of violations and his finding that the Respondents, Hahn Motors, Inc. (HMI or Hahn Motors) and Hahn Truck Sales & Service Corp.' (HTS or Hahn Sales), are a single employer, we find it unnecessary to reach the ques- tion whether an alter ego relationship exists. In making the 'single employer finding we rely, as did the judge, on Robert Stavin's role as chief execu- tive officer in each company; his exercise of virtu- ally unrestricted operational, financial, administra- tive, and labor relations control over both compa- nies; the substantially similar ownership of both companies, i.e., Robert Stavin and his wife Marion owning Hahn Sales outright as, well as 35 percent of Hahn Motors, with practically the entire remain- der inuring to the beneficial , interest of Marion Stavin, her mother, and her sister;" and the interre- lation of the two companies' operations, as evi- denced by the functional integration of their busi- nesses, the extensive financial and operational sup- port provided Hahn Sales by Hahn Motors, the centralized telephone ' and accounting systems, and the deliberate extension of Hahn_ Motors' goodwill to Hahn Sales by virtue of Stavin's.letters of intro- duction to customers, the similarity , of their corpo- rate , names, and the use of the same company sta- tionery and corporate logos. We find that these factors establish that Hahn Motors and Hahn Sales do not maintain an arm 's-length relationship such as is found among unintegrated companies. See i Of the 1000 shares of HMI stock, Robert and Marion Stavin own 384 outright with Marion Stavin possessing beneficial interest in one-half of a trust whose corpus includes 510 shares. The next largest , singly owned block is held outright by Robert Stavin's mother -in-law, Mrs. R, J. Stein- hauer. Only four shares are owned by individuals not related to the Sta- vms noted, we find that HMI and HTS constitute a single employer. Further, we find that the relocation of the serv- ice department employees to a new facility did not destroy the community of interests that had existed within the plantwide Hahn Motors unit to justify depriving these employees of continued representa- tion. Indeed, the only, significant difference in working conditions that the relocated employees experienced was the move to a different facility 7 miles away. At the time Hahn Sales commenced operations, all its employees were former Hahn Motors service department unit employees. Those employees shared single unit status with the other Hahn Motors employees and were represented by the Union until Stavin formed Hahn Sales. As Hahn Sales employees, they continued to work the same hours under the same clock numbers they had used at Hahn Motors and to perform substantially the same work they had performed as service de- partment employees, using much of the same equipment and skills, and working under the same immediate supervisor, Harry Close.. 2 The work performed at the two facilities continues to be highly integrated, with Hahn Motors manufactur- ing the parts used by Hahn Sales and Hahn Sales performing predelivery and warranty work on Hahn Motors-produced trucks. Employees at both locations are covered by a single life and medical insurance policy and the employees of Hahn Sales enjoy the same benefits as the Hahn Motors em- ployees. We find that these factors demonstrate that the Hahn Sales employees continue to share a commu- nity of interests with the existing Hahn Motors unit and that the Respondent's efforts to fragment that unit by unilaterally imposing a geographic separa- tion of 7 miles is inadequate to defeat the service employees' right to continued union representation. Accordingly, we find that the Respondents unlaw- fully failed to continue to recognize the Union as the bargaining representative of the unit employees 2 Thus, day-to-day supervision has remained unchanged . At Hahn Motors these employees had been under the direct supervision of Close, who was the "service department" manager there. At Hahn Sales they continued under his direct supervision as its "general manager " Further- more, the former service department employees of Halm Motors who ac- cepted jobs with Hahn Sales were not required to file new employment applications. Despite the fact that the service employees are now performing their duties at Hahn Sales rather than Hahn Motors, the differences between their duties and those performed by the production and maintenance em- ployees have remained unchanged . It is also important to bear in mind that the question here is not whether the service employees might also constitute a separate appropriate unit. It is whether the overall unit're- mamed an appropriate unit when the Respondent moved the employees 7 miles down the road. 283 NLRB No. 141 902 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD working at the Hahn Sales location and to apply the contract terms to them.3 ORDER The National Labor Relations Board adopts the recommended Order of the administrative law judge and orders that the Respondents, Hahn Motors, Inc., Hamburg, Pennsylvania, and Hahn Truck -Sales & Service Corp., Shartlesville, Penn- sylvania, their officers, agents, successors, and as- signs, shall take the action set forth in the Order. 3 Because we have adopted the judge's finding that the Respondent's relocation of a part of the established unit does not relieve it of its obliga- tion to recognize and apply the contract to the new site, we place no reliance on the judge's separate analysis under the now-overruled Mil- waukee Spring Division, 265 NLRB 206 (1982). See Milwaukee Spring Divi- sion, 268 NLRB 601 (1984), affil. sub nom Auto Workers v. NLRB, 765 F 2d 175 (D.C. Cir 1985). Daniel E. Halevy, Esq., for the General Counsel. Robert -T Miller, Esq., of Reading, Pennsylvania, for the Respondent. DECISION STATEMENT OF THE CASE JOEL A. HARMATZ, Administrative Law Judge. This proceeding was heard by me in Reading, Pennsylvania, on, April 14, 1983, on an initial unfair labor practice charge filed on October 15, 1982, and a complaint issued on November 29, 1982, alleging that Hahn Motors, Inc. and Hahn Truck Sales & Service Corp. (the Respondent) constitute an alter ego and single employer within the meaning of the Act, and that the Respondent violated Section 8(a)(5) and (1) of the Act by dealing directly with certain employees in the appropriate collective-bar- gaining unit, and further violated Section 8(a)(1), (3), and (5) of the Act by relocating these employees and refusing to apply the applicable collective-bargaining agreement at the new worksite. In its timely filed answer the Re- spondent denied that any unfair labor practices were committed. After close of the hearing, briefs were filed on behalf of the General Counsel and the Respondent. On the entire record in this proceeding,' including my opportunity directly to observe the witnesses while testi- fying and their demeanor,2 and on consideration of the posthearing briefs, it is found as follows ' Certain errors in the transcript are noted and corrected 2 The fact that my credibility rulings are accompanied by objective ra- tionale does not discount, but merely serves to reinforce, impressions gained from my first-hand observation of the witnesses Furthermore, al- though it should go without saying, testimony, whether or not contra- dicted, is rejected by implication to the extent that it includes matters that might not be reconciled with expressly credited evidence. Cf Her- bert F. Darling Inc., 267 NLRB 476 (1983) FINDINGS OF FACT 1. THE LABOR ORGANIZATION INVOLVED The complaint alleges, the answer admits, and I find that United Steelworkers of America, AFL-CIO-CLC is a labor organization within the meaning of Section 2(5) of the Act. II. JURISDICTION AND THE SINGLE EMPLOYER ISSUE A. Preliminary Statement Hahn Motors, Inc. (HMI) is, and has been at all times material, a Pennsylvania corporation engaged, in the manufacture, sale, and distribution of firefighting appara- tus from its facility located in Hamburg, Pennsylvania. Prior to May 1, 1982,3 the operations of HMI included a service department. During that same period, 'United Steelworkers of America, AFL-CIO-CLC represented a production and maintenance unit, numbering some 100 employees, including 7 who were assigned to the service department. These employees at that time were covered by a collective-bargaining agreement not scheduled to expire until April 30, 1984. On May 1, 1982, a new corporation, Hahn Truck Sales & Service Corp. (HTS) commenced operations in Shartlesville, Pennsylvania, only 6-8 miles distant from Hamburg. This new firm, as of the date of the hearing and since the inception of, its operations, has been en- gaged almost exclusively in "servicing" firefighting equipment. Contemporaneous with the opening of HTS' Shartles- ville facility, HMI terminated ' its service operations. Prior thereto, however, all seven of the latter's service employees were offered employment with HTS; six ac- cepted. HTS refused to recognize the Union or honor HMI's subsisting collective-bargaining agreement as binding with respect to .these Shartlesville employees. The resulting partial curtailment of the established bar- gaining relationship is challenged by the instant com- plaint on the premise that HMI and HTS constitute an alter ego or, single employer and, hence, all that was in- volved was a single entity's relocation of unit work to a nearby, newly established facility. See, e.g., Westwood Import Co., 251 NLRB 1213 (1980), enfd. 681 F.2d 664 (9th Cir. 1982). It also is argued that the removal of the service operation was designed to evade bargaining and that the Respondent thereby violated Section' 8(a)(1), (3), and (5) of the Act. See, e.g., Los Angeles Marine Hard- ware Co., 235 NLRB 720 (1978); Milwaukee Spring Divi- sion , 265 NLRB 206 (1982); Oak Cliff-Golman Bakery Co., 207 NLRB 1063 (1973). By way of remedy, it is urged that the ,Respondent be directed to recognize the Union at the Shartlesville site, and to apply the existing collective-bargaining agreement to the employees at that location, while making them whole for lost benefits. Also sought is compensation for the Union with respect to dues not remitted on behalf of employees who had- exe-cuted valid checkoff authorizations. 3 Unless otherwise indicated all dates refer to 1982 HAHN MOTORS On behalf of the defense it is asserted that the two firms possessed qualities of independence , sufficient to negate alter ego or single employer status, and , hence, HMI simply terminated the service end of its business, action that is not subject to any obligation to bargain under either the Supreme Court's decision in First Na- tional Maintenance Corp. v. NLRB, 452 U . S. 666 (1981), or the management-prerogative clause of the subsisting agreement. The "single employer-alter ego" issue is plainly deter- minative here . Thus, neither the pleadings, controlling precedent , the manner in which this proceeding was liti- gated, nor the posthearing briefs „suggest that this com- plaint might be salvaged if HMI and HTS are deemed legally independent persons in the statutory sense. Indeed, the jurisdictional allegations appear to concede the point . For the commerce facts are alleged, and ad- mitted , under conditions presupposing that HTS and HMI are a single entity, and there is no basis for ascer- taining whether either firm independently met the Board 's jurisdictional standards . Clearly , dismissal of the complaint on that ground alone would be impelled should the General Counsel fail to establish that HTS and HMI constitute a single entity.4 At the same time, the Respondent raises a number of defenses that would lack vitality and require no consider- ation if single employer status is substantiated. Within this category is the Respondent 's reliance on First Na- tional Maintenance Corp. v. 1VLRB, supra, and other cases reconciling management 's right to terminate a segment of its business . For, if HMI and HTS are deemed to be a single entity, this case would involve a transfer within a single enterprise , rather than a discontinuance, of the service operation. Hence, First National Maintenance would be plainly inapposite . Falling within that same cat- egory would be the Respondent's further contention that, by virtue of article 6 of the contract with HMI, the Union waived its interest in collective bargaining with respect to the events in issue here . In this regard, section I thereof ; in material part, merely recites as follows: The management of the plant and the direction of the working force including . . . the right to relieve employees from duty because of lack of work or for other legitimate reasons . . . the right to determine the extent to which the plant shall, be operated, the products to be manufactured , the method of manu- facturing . . . and to extend, limit or curtail its op- eration, is vested exclusively in+ the Company. Here again, if HTS and HMI are to be regarded as a single entity, the matter under scrutiny would be limited to a "relocation" or "transfer" of unit work, action which transcends the broad, general language of the above-cited management -prerogative clause. Under long- standing Board policy, a waiver on the part of a labor organization under such a generalized provision is not to 4 The admission of jurisdiction in the Respondent 's answer, considering the manner in which the pleadings are framed, only admits that both firms collectively are engaged in commerce It is an admission condi- tioned on the ability of the General Counsel to substantiate the single em- ployer allegation 903 be "lightly inferred ." Rather , it must be manifested by "clear and unmistakable" evidence . See, e .g., Park-Ohio Industries, 257 NLRB 413-414 (1981). Thus, for the above reasons, the waiver defense as well as that arising under the Supreme Court decision in First National Maintenance, supra , will prove either su- perfluous or nonmeritorious depending on final resolu- tion of the single employer issue, and, hence, there will be no further discussion of either. B. Conclusions on the Single Employer Issue The principles pertaining to analysis of single employ- er issues were summarized recently by the Third Circuit Court of Appeals as follows:- Four criteria have been used by the Board in de- termining whether separate entities constitute a single employer : interrelation of operations, common management, centralized control of labor relations, and common ownership . Radio & Televi- sion Broadcast Technicians Local Union 1264 v. Broadcast Service of Mobile, Inc., 380 U.S. 255, 256 .... The Board finds no one factor controlling, al- though it has stressed the first three factors, particu- larly centralized control of labor relations, which tend to show "operational integration.". . . Ulti- mately, single employer status depends on all the circumstances of the case and is characterized by absence of an "arm's length relationship found among unintegrated companies." On this record , as shall be seen, little question arises in the area of centralized control or operational interde- pendence. As for ownership and control„ as of May 1, 1982, the members of the board of directors of HMI were : Robert Stavin; Marion Stavin (Robert Stavin's wife); Thomas F . Confer, Esq. (president of Hamburg Savings & Trust); Lulu Ann Sheetz (Marion Stavin's sister); and Mrs. R. J. Steinhauer (Marion Stavin's mother). Of the 1100 shares of outstanding HMI stock , Robert Stavin and his wife , Marion , own 384 outright, with the latter also possessing beneficial interest in one-half of a trust, whose corpus included 510 shares. Of the remain- ing outstanding shares, only 4 are owned by individuals who are not related to the Stavins , and the next largest singly owned block is the 146 held outright by Robert Stavin's mother-in-law, R. J. Steinhauer. The board of directors of HTS consisted solely of Robert and Marion Stavin , who jointly owned 100 per- cent of that firms outstanding stock. Robert Stavin and Larry Hummer were president and secretary-treasurer, respectively , of both firms, with Stavin serving as presi- dent and Larry Hummer secretary-treasurers 5 NLRB v. Al Bryant, Inc., 711 F 2d 543, 551 (3d Cir. 1983) 6 Robert Stavin testified that with respect to HMI he and Hummer were the only corporate officers This testimony was afforded while Stavin had access to the articles of incorporation and bylaws of HMI. Nonetheless, the parties entered a stipulation to the effect that Frank Cle- ments was HMI's vice-president of manufacturing , a fact confii med by Clements' own testimony Beyond this, the only other difference between Continued 904 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD As would seem to be characteristic of corporations having strong familial ties, emergence of HTS did not create differences in ultimate control , nor was the busi- ness objective of the overall venture altered materially. Thus, prior to the establishment of HTS, HMI was en- gaged in the manufacture of fire trucks on a fully inte- grated basis, including production, service, sales, and dis- tribution. With the establishment of HTS, the service ac- tivity was splintered off from HMI and transferred to HTS. However, day-to-day supervision of those engaged in service operations remained unchanged. Harry Close was transferred from his former job as "service depart- ment" manager to become "gener" al manager" of HTS. Six service department employees of HMI, formerly su- pervised by Close, were offered, accepted, and granted employment, without need for the filing of new employ- ment applications. They continued under the direct, im- mediate supervision of Close. As suggested, the move did not involve any real, sub- stantive change in authority at the highest level. As president of both firms, Stavin's control continued. His domination of the affairs of HMI and HTS is evident from the fact that it was his-decision to acquire the real property, to establish a separate corporation, to spin off the service function previously provided through HMI to the new corporation, and to retain Harry Close as general manager'of this latter operation. Stavin also had the final say, in the area of labor rela- tions.? He signed the collective-bargaining agreement covering the production and maintenance unit. Admit- tedly, it was his decision to offer the HMI service de- partment employees jobs with HTS, and it was he who conceived the terms and conditions under which 'they would work, including the fact that neither the collec- tive-bargaining agreement nor the Union's status as ex- clusive employee representative would be honored at HTS. Common control is also manifested by the degree to which HMI and HTS are integrated in both administra- tive and operational areas . Thus, the service department of HMI historically was engaged in three basic functions. The first entailed inspection and predelivery repair work on newly manufactured fire trucks. The second involved servicing Hahn vehicles still under warranty. The' third consisted of service and repair operations with respect to out-of-warranty fire trucks manufactured by HMI.' Only on occasion would the HMI service department work on alien vehicles, i.e., fire trucks manufactured by a compet- the corporate officers of HMI and HTS is signified in the Respondent's brief, in which it is suggested that an individual named Phil Rossi is HMI's vice president in charge of engineering Nowhere is this represen- tation confirmed on the record 7 Stavin, in an unpersuasive attempt to mitigate his influence over deal- ings with the Union, testified that Clements and Hummer over the years had "a free hand in this area " He acknowledged that, as president, the "buck" stopped with him, but then attempted to turn this aside, indicat- ing that he always went along with Hummer and Clements, never over- riding them. Notwithstanding the Respondent's testimony to the con- trary, from observation of Stavin, I was impressed with the relative strength of his presence and I stand convinced that he was the abiding, dominant influence within both HMI and HTS with respect to the eco- nomic destiny of employees of both firms itor.8 Stavin testified that through HTS it was his intent to establish a complete truck service business, incorporat- ing the operations formerly provided through HMI, but at a level expanded to include alien fire trucks and com- mercial tractor-trailer rigs. The latter would be solicited from an interstate highway and other routes proximate to the Shartlesville site.9 However, Stavin admitted that, as of the date of the hearing, HTS had been engaged exclu- sively in the servicing of "fire equipment and apparatus." Thus, HTS as established will carry on many services identical to those historically performed by HMI. Indeed, insofar as HMI clientele or potential customers are involved, HTS will continue to represent a vital link between HMI and the reputation in the market place for serviceability of HMI products. For example, final in- spection of vehicles manufactured by HMI now is per- formed by HTS. In the course of those functions, service personnel of HTS, as was true at HMI, correct minor discrepancies themselves. As always, in the event that HTS discovers a major problem with the vehicle, it is re- turned to the HMI manufacturing department for correc- tion. Thus, HTS continues to perform work which is a vital link in the overall manufacturing, inspection, and delivery activity of HMI. This, together with the postde- livery service provided by HTS on HMI warranties, would naturally tend to influence the "good will" of HMI and, indeed, involves work, the quality of which will likely impact on future HMI sales. At present, of the 340 customers serviced by HTS, 305 were customers of HMI and might well continue to be, at least in connec- tion with the purchase of new fire trucks. The relationship between HTS' performance and the success of HMI's marketing program is evidenced by several factors suggesting an intent to pass off HMI and HTS, in the eyes of the public, as related firms. This was reflected in the name given Hahn Truck Sales & Service (HTS), which, though incorporating the name "Hahn" and the term "Sales," was utilized to label a company not structured to perform truck sales. The need for common identification was carried further by the fact that HTS and HMI utilized, the same basic trademark and letterhead. Finally, the business interest served by maintenance of an "association" between service and sales functions was acknowledged in the testimony of Stavin set forth below: [W]e're trying to ... have a good reputation for a product, because sales and service-that's why we 8 The limited amount of work on alien fire equipment impressed me as being a byproduct of space limitations rather than a shortfall in skills, equipment, or managerial ability at HMI. 9 Any intent to broaden HTS operations to the competitive field of commercial tractor-trailer rigs, as of the date of the hearing, had not been implemented forcefully. There had been no formal advertising. HTS does not even appear in the yellow pages Indeed, the signs erected on the fa- cility are not subject to observation by vehicles on the adjacent interstate highway until they have passed the Shartlesville access ramp. In addition, HTS has neither tow truck nor a "tire buster," both of which would appear to be required equipment for full scale servicing of over-the-road carriers. Finally, provision had not been made for 24-hour service by a mechanic As for the future, the Respondent did adduce testimony that steel poles had been purchased for the purpose of erecting signs that would be visible to trucks using the interstate highway HAHN MOTORS call it Hahn Trucks Sales and Service. I realize that they go hand in hand. And that's why we tried to disguise that as totally foreign from Hahn Motors. We try to give an association between the two companies so they felt they were dealing, even though it was a different company, we tried to make some association. Other evidence reveals HTS' considerable operational dependence on HMI. For, in addition to parts obtained from vendors,10 as was true of the HMI service depart- ment in existence prior to May 1, HTS routinely ordered from HMI parts manufactured in the latter's production department. 111 Finally, it is my observation that HTS was an operat- ing shell with little in the way of administrative auton- omy. It had no accounting department, and was com- pletely dependent on HMI for those services. Indeed, at one time, HMI employed a clerical who was primarily engaged in performing accounting functions on behalf of HTS. As for the processing of orders, when HTS in- voices were received from vendors, they were checked by Close, and then forwarded to HMI for payment. Al- though HTS maintained its own savings and checking accounts in a bank different from that used by HMI, Close was not authorized to sign the checks. 12 In all cases, they were signed by either Stavin himself or Hummer.' 3 Accounts receivable of HTS are maintained on the HMI computer. HMI provides Close with a weekly printout of the receivables balance. However, Close is responsible for collection of receivables and tes- timony indicated that he prepared billings, which he for- warded to HMI for entry on the computer. Beyond the clerical work in connection with ordering, purchasing, invoice verification, and collection of ac- counts receivable, it does not appear that HTS, performs 10 Since its inception , HTS has used many vendors formerly utilized by HMI. Thus, of the 136 vendors from whom HTS purchased goods and service, 106 had done business previously with HMI and continue to do so. ' 1 Staves testified that among the reasons prompting elimination of HMI's service operation and establishment of HTS was a rivalry between the service and production departments and a conflict between Service Manager Close and Production Manager Clements. This rift was appar- ently caused by the fact that parts requested by the service department would frequently be disruptive of production, while at the same time delays in providing the part requested would produce delays in the serv- ice department. Notwithstanding the corroborative testimony of Cle- ments and Close as to this source of friction, because HTS continued to order parts from the HMI production department, while performing some assembly work, it is difficult to fathom just how the establishment of HTS eliminated or mitigated this problem. 12 It is noted that the Respondent's witnesses, at various points in their testimony , seemed to imply ' that Harry Close possessed almost total au- tonomy in running the affairs of HTS. Any such view would be an exag- geration Close was not on the board of directors, nor did he serve as an officer of HTS It is found that he had been a "hired" manager at HMI, and that he had no higher status when employed at HTS 12 Hummer testified that HTS in the beginning had no credit reputa- tion and no financial statement, and therefore certain vendors refused to sell direct to HTS. He hardly appeared resolute in responding to ques- tions whether there were occasions when HMI was impelled to tell a vendor to bill HMI in order for HTS to obtain delivery of special parts. Hummer did concede, however, that on certain sales to HTS, HMI was billed. When this occurred, HMI processed the invoice but paid it, as far as Hummer could remember, on a HTS check. 905 or is' capable of performing other administrative duties. Thus, it was not shown to have any independent sales representative, but, according to Close, utilizes doe Zeller, a sales representative of HMI. Although HTS and. HMI have separate phone numbers and are billed separately by the phone company, they have an intercon- nected system whereby a customer calling HMI for serv- ice would be switched automatically to FITS without the customer having to hang up and make it second call. It also appears that the personnel records of employees of HTS are maintained by HMI. Finally, employees of both HTS and HMI are covered by a single group policy for purposes of health and welfare. Consistent with the foregoing, a number of factors belie the notion that HMI and HTS were operated in a fashion representative of separate firms pursuing distinct economic interests. Unlike the typical arm's-length busi- ness relationship, HMI made valuable concessions in sub- stantial areas whereby it absorbed expenses for services rendered to HTS. For example, the means by which HTS compensated HMI for accounting services merely required that a HMI clerical employee tabulate the time spent when working on behalf of HTS. The hourly cost of those services was the sole charge levied against HTS. Thus, overhead costs, including those derived from office equipment, office materials, fair rental value of the premises, and the HMI computer were not defrayed by any charges levied against HTS. In the same category is the proportionate share of services rendered by Hummer in connection with HTS' operation. Hummer is paid no salary from HTS, but oversees the HMI accounting op- eration and apparently himself administers health and welfare programs on behalf of HTS,personnel. HTS does not compensate HMI for Hummer's contribution to the discharge of its administrative responsibilities. Beyond these privileges, additional monetary conces- sions on the part of HMI were associated with the estab- lishment of HTS. Thus, in May, after an inventory, HTS removed HMI service parts to HTS. To compensate HMI in this respect, an unsecured, interest free note in the amount of $50,000 was given by HTS. These liberal terms, although clearly advantageous to HTS, appear less prejudicial to'HMI than the circumstances surround- ing the removal by HTS of HMI's equipment." For it 14 Close was evasive in testifying concerning the transfer of equip- ment. The attempt to downplay the matter first emerged when Close was asked by his own counsel to describe "the type and nature of equipment acquired from HMI." Close demeaned the quality of the equipment, and, in contrast to the more specific definition given about equipment that HTS acquired from other sources, Close barely identified that taken from HMI, testifying merely as follows: Most of the equipment was extremely,old. In terms of service shops we were quite equipped. The newest thing we brought with us was the floor jack. And some other small air tools and equipment of that nature. However, on cross-examination by counsel for the General Counsel, Close admitted that HTS also removed from HMI "two very old drill presses," an "old wood saw," "a very old hydraulic press," "very old homemade work benches," "several floor jacks," "one dipstick welder," and, "one stick welding machine [ofl questionable quality." Aside from the foregoing, it took three inquiries from me before Close was willing to admit that nothing was left behind that could be used. Although I have Continued 906 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD does not appear that HTS compensated HMI,, even to the extent of paying salvage value for this equipment.15 Moreover,- because of the "good offices" of HMI, it has been unnecessary for -HTS to acquire vehicles in its own behalf. Instead, HMI has provided a 1973 station wagon and a "Bronco," both of-which possess dealer plates-reg- istered to and owned by HMI. In exchange, HTS is sub- ject to a charge of $50 monthly, a fee which also licenses HTS to unmonitored and unlimited access to HMI's pho- tocopying equipment. The absence of cash exchanges between the two firms is also in keeping with the General Counsel's position. For, although valuable services- and parts routinely are subject to exchange between HMI and HTS, cash is never involved in those transactions. Instead, an open- ended system of credit is utilized. Pursuant thereto, com- pensation for the warranty service provided by HTS and parts built by HMI for the account of HTS is accom- plished through reciprocal bookkeeping entries, whereby the-account founded on the $50,000 unsecured note pay- able from- HTS to HMI is increased or reduced depend- ing on which firm is providing the service. By way of conclusion,, it is considered that the forego- ing fails to furnish a basis for regarding HTS as a distinct entity insulated from obligations which the Act imposes on the, labor relations of HMI. Through HTS it appears that Stavin effectuated little more than the relocation of a department under the guise ' of a separate corporate veil. Thus, HTS, by having acquired additional equip- ment and additional employees, might well have broad- ened the scope of the market served. Nonetheless, it has continued -to ' remain captive to ' the established business objectives of HMI . It is true that through HTS Stavin sought to expand the service market to include alien fire trucks and more comprehensive rehabilitation and main- tenance work, but it does not appear that HTS had any independent marketing facility, and indeed, from all indi- cations on this record, it appears that to a substantial extent it remained dependent on the market previously `forged and developed by HMI .16 ' In short, ' I am con- vinced that HTS," though a separate corporation, was created without sacrifice in control of labor relations and overall management or to'the basic business objectives of HMI. The two firms continued as an interdependent and no doubt that the HMI service equipment was not in the best of shape, from all appearances it was still in use at the time of the hearing. In the circumstances, the effort by Close to mitigate the value and extent of the transfer was as understandable as it was unpersuasive. I believe that Close's sensitivity in this area was attributable to concern over the degree of HTS' dependence on equipment taken from HMI, which I infer to have been substantial. 15 According to Hummer, after the removal of this equipment, it was not carried on the books of either HMI or HTS. rs Close made an attempt to differentiate between the services provid- ed through HTS and the former service department at HMI. Basically, however, subject to one exception, the mechanical work involved did not appear to entail a difference in skills and was plainly related to other work performed historically by HMI. The exception relates to painting, sand blasting, and body work, none of which was available through HMI. However, in the period preceding the hearing, painting had been limited to two vehicles and the record fails to disclose the percentage of HTS' revenue what would be attributable to body work. In any event, the addition of these services would seem a normal adjunct of mechani- cal, maintenance, and repair work and, thus, was not unrelated to serv- ices traditionally available through the HMI service department. integrated family venture dominated by Robert Stavin. In such circumstances, the establishment of HTS -and the concomitant withholding of representation rights of the service personnel was the equivalent of "an economic benefit at the expense of statutory employee rights, up- setting and undermining the balance of power between labor and management created to reflect national labor policy." Cf. Alkire v. NLRB, 716 F.2d 1014, 1021 (4th Cir. 1983). Accordingly, the criteria set forth by the Su- preme Court in Radio Union Local 1264 v. Broadcast Service, 380 U.S. 255 (1965), have been substantiated and based thereon it is concluded that Respondents HMI and HTS constitute .a single employer within the meaning of the Act. - With respect to the issue of jurisdiction, the Respond- ent in the course and conduct of the business operations heretofore described,,during the 12-month period preced- ing issuance of the complaint, a, representative period, sold and shipped products, goods, and materials valued in excess of $50,000 to points located directly outside the Commonwealth of Pennsylvania. The complaint alleges, the answer admits,, and it is found that the- Respondent is, and has been at-all times material, an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act. III. THE ALLEGED UNFAIR LABOR PRACTICES 1. Quite independent of the single employer issue, the complaint alleges that the Respondent, -through HMI's president, Robert Stavin, violated Section 8(aX5) and -(1) by engaging in direct dealing with employees.- This asser- tion is substantiated'by undisputed evidence. For, shortly before May 1, Stavin met with HMI service department employees. The Union received no formal notification and was not invited or given the opportunity to partici- pate in this meeting. At the meeting, Stavin informed' the HMI service employees that as of May 1, 1982, HMI would no longer be engaged in service work, and that as of that date HTS would embark on a service operation in Shartlesville. All were offered positions at HTS by Stavin, who indicated that HTS would operate on a non- union basis, but that employees were free to organize if they wished. The seven employees involved were told that they would lose their seniority and pension benefits if they accepted employment at HTS. Finally, it was in- dicated that those electing to remain with HMI would have a job, though the exact nature thereof was unspeci- fied. That meeting left open.the question of whether any service employee refusing to accept employment at HTS might have imperiled his job security in the event of pos- sible future cutbacks at HMI. In any event, the offers ar- ticulated by Stavin represented an effort unilaterally to alter conditions of work of employees at the Hamburg facility in derogation of the Union's status as exclusive representative of the' employees. The Respondent there- by violated Section 8(a)(5)'and (1) of the Act. See,_e.g., Otis Elevator Co., 255 NLRB 235, 242, 247-248.(1981). 2. The complaint further alleges that the Respondent violated Section 8(a)(l), (3), and (5) of the Act by trans- ferring employees to the Shartlesville facility and failing to abide by the governing collective-bargaining agree- HAHN MOTORS ment covering these employees. Having found that the Respondent, for purposes of the Act, shall be treated as a single entity, its bargaining obligation is subject to scruti- ny under two independent theories. First is the line of cases exemplified by Milwaukee Spring Division, 265 NLRB 206 (1982).17 By virtue there- of, an employer's transfer of unit work, during the term of a collective-bargaining agreement and without union assent, to another of its facilities where employees are not represented by a union has been deemed conduct in- herently destructive of employee rights and violative of Section 8(a)(1), (3), and (5) of the Act. See, e.g., Los An- geles Marine Hardware Co., 235 NLRB 720 (1978), enfd. 602 F.2d 1302 (9th Cir. 1979); Brown Co., 243 NLRB 769 (1979); Milwaukee Spring Division, supra. The rationale underlying this line of precedent views the removal of unit work as a mid-term modification of a collective-bar- gaining agreement and, hence, absent concurrence of the employee representative, such action violates Section 8(d) and constitutes a refusal to bargain violative of Sec- tion 8(a)(5). Those cases stand for the further proposition that prejudice to employment terms sustained by unit employees in consequence of such a loss of work is "in- herently destructive of employee interests" and violative of Section 8(a)(3) and (1) of the Act. NLRB v. Great Dane Trailers, 388 U.S. 26 (1967). This is so even in the absence of specific proof of union animus or, indeed, in the face of credited evidence that the, employer pleaded an inability to afford terms of the contract and unsuc- cessfully sought relief therefrom through renegotiation. With these considerations in mind, it is noted that here the relocation of the service function was unaccompa- nied by any claim of economic distress derived from the Hamburg contract. Instead, the removal of unit work does not appear to have been based on anything other than acquisition of a new facility and the Respondent's having seized on that acquisition as an opportunity to perform the service function at a nearby location on a nonunion basis."' It follows on the cited authority that by discontinuing the service function At Hamburg and by relocating that operation at Shartlesville, while refusing to recognize the exclusive employee representative and failing to extend the terms of the unexpired contract to that location, the Respondent, on authority of Milwaukee Spring, supra, violated Section 8(a)(1), (3), and (5) of the Act. Second, and in the alternative, the same basic remedy on the instant facts would be warranted quite independ- ent of the reasoning set forth in Milwaukee Spring, supra, 17 On August 4, 1983, the Seventh Circuit Court of Appeals, on re- quest of the Board, remanded Milwaukee Spring for reconsideration. On September 20, 1983, oral argument was conducted before the Board in that case. rs The Respondent insists that Stavin acted on a legitimate business consideration in creating HTS, acquiring the Shartlesville site, leasing it to HTS, and in effect transferring HMI's service function to HTS. The assigned business justification related to past conflicts between manufac- turing and service that had arisen because both functions were performed at the same facility. Although this defense might well support the remov- al and transfer of the service function, those actions were not incompati- ble with continued recognition. Hence, the economic defense fell short of excusing Stavin's further determination that recognition be withheld and the collective-bargaining agreement dishonored at Shartlesville. 907 and related decisions. For, under long-established Board policy, mere relocation of a segment of an established collective-bargaining unit will not necessarily alter the scope of the unit so as to relieve an employer of the obli- gation to recognize and apply the contract to the new site. See, e.g., Rittling Corp., 203 NLRB 355 (1973); Ro- bertshaw Controls Co., 240 NLRB 1260 (1979); Westwood Import Co., 251 NLRB 1213 (1980), enfil. 681 F.2d 664 (9th Cir. 1982); Marine Optical, 255 NLRB 1241, 1244 (1981), affd. 671 F.2d 11 (1st Cir. 1982); NLRB v. Royal Oak Tool & Machine Co., 320 F.2d 77, 83 (6th Cir. 1963). Expanding on the policy reflected in these decisions, the Board in Westwood Import Co., supra at 1214, stated as follows: [A]n existing and effective collective-bargaining agreement remains in effect following a relocation, provided operations and equipment remain substan- tially the same at the new location, and a substantial percentage of the employees at the old plant trans- fer to the new location. Here, the Shartlesville facility was located a mere 6-8 miles distant from the historic site of the appropriate unit . 19 Operations commenced at Shartlesville with equipment formerly utilized by the service department at Hamburg to an extent which on this record cannot be considered insubstantial . 20 Furthermore, six of the seven unit employees engaged in service work at Hamburg ac- cepted transfers to Shartlesville and constituted a majori- ty of the work force at that location until December 1982 . Later, as of the date of the hearing , when the pay- roll of HTS had grown to 13 employees , the original transfers constituted no less than 46 percent of the over- all work force. 21 Moreover, the Shartlesville service op- eration was initiated and continued without change in the identity of immediate management. In the circum- stances, including the continued integration of the work performed by employees at both locations , the changes attendant in the relocation failed to create new and dis- tinct business operations unrelated and distinct from those historically performed at Hamburg through HMI. Cf. Westinghouse Electric Corp., 174 NLRB 636 (1969). Instead , the relocation to Shartlesville entailed it mere expansion, amounting to a normal evolution within the framework of an established venture, which failed to produce a material change in the class of jobs , functions, or community of interests within the historic collective- bargaining unit . In the circumstances, as the relocation is The Respondent makes no serious claim that the contract contains any language limiting the geographic scope of the established bargaining unit . Thus, the collective-bargaining unit in art. 3, sec. 2, of the contract is defined without qualifying language, in the following terms: The term "Employee," as hereinafter used in this agreement , refers to production and maintenance employees and watchmen who con- stitute the appropriate bargaining unit. Thus, the contract on its face fails to limit the scope of the appropriate collective-bargaining unit to the Hamburg worksite. See Los Angeles Marine Hardware Ca. V. NLRB, 602 F.2d 1302, 1306 (9th Cir 1979) 20 See fn. 14, supra 21 See Westwood Import Co., supra at 1214 fn. 8, and cases cited therein to the effect that the 46-percent figure satisfies the requirement that "a sufficiently large number of employees [be] transferred " 908 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD occurred at a ^ time when the existing collective-bargain- ing agreement constituted a bar to an election, the . Re- spondent was obligated to continue recognition of the Union at Shartlesville as a part of the established collec- tive-bargaining unit,22 and to honor the terms of the sub- sisting contract with the Union at the Shartlesville locar tion as part of the appropriate collective-bargaining unit covered thereby.23 Accordingly, this alternative ground independently supports the conclusion that in each of these several respects the Respondent violated Section 8(a)(l) and (5) of the Act. CONCLUSIONS OF LAW 1. Respondent Hahn Motors, Inc. and Hahn Truck Sales & Service Corp. collectively constitute a single em- ployer engaged in commerce within the meaning of Sec- tion 2(2), (6), and (7) of the Act. 2. United Steel Workers of America, AFL-CIO-CLC is a labor organization within the meaning of Section 2(5) of the Act. ' 3. The unit appropriate for purposes of collective bar- gaining is: All production and maintenance employees and watchmen, excluding professional ' employees, guards, and supervisors as defined in the Act. 4. At all times material, United Steelworkers of Amer- ica, AFL-CIO-CLC has been the exclusive collective- bargaining representative of the employees in the above- described unit within .the meaning of Section 9(a) of the Act. 5. By dealing directly with employees concerning terms and conditions of employment, and thereby by- passing their exclusive statutory representative, the Re- spondent violated Section 8(a)(5) and (1) of the Act. 6. By relocating its service operation to Shartlesville, Pennsylvania, by refusing to recognize United Steel- workers of America, AFL-CIO-CLC, as the exclusive representative of employees at that location, and by fail- ing and refusing to apply the terms and conditions of the current collective-bargaining agreement to those employ- ees, the Respondent unlawfully refused to bargain in good faith in violation of Section 8(a)(1), (3),,and (5) of the Act. 7. The aforesaid unfair labor practices affect commerce within the meaning of Section 2(6) and (7) of the Act. THE REMEDY Having found that the Respondent has engaged in cer- tain unfair labor practices, it shall be recommended that it be ordered to cease and desist and to take certain af- firmative action to effectuate the policies of the Act. 22 See Hexton Furniture Co, 111 NLRB 342 (1955). The Respondent did not raise a doubt of majority status On the facts, it was not free to do so, as, at times material , The collective-bargauung agreement would constitute a bar to the raising of a question concerning representation See Sanson Hosiery Mills, 92 NLRB 1102, 1103 (1950), enfd. 195 F 2d- 350 (5th Cir 1952). See, e .g, Pioneer Inn, 228 NLRB 1263, 1265-1266 (1977), enfd 578 F 2d 835 (9th Cir. 1978). 23 Oak Clif)=Golman Baking Co , 207 NLRB 1063 (1973), enfd. 505 F.2d 1302 (5th Cir. 1974). Westwood Import Co., supra at 1216 Affirmatively, consistent- with the General Counsel's request, the Respondent shall be ordered to recognize the Union as the representative of its-employees engaged in the performance of unit work at its Shartlesville facili- ty as part of the established appropriate collective-bar- gaining unit and to apply the current collective-bargain- ing agreement to those employees. It shall be further rec- ommended that the Respondent make whole employees for any loss of benefits sustained by reason of the Re- spondent's repudiation of the subsisting collective-bar- gaining agreement at that location, and that the Re- spondent be ordered to -make the Union whole for dues owing in the case of those,Shartlesville employees who had executed checkoff authorizations prior to the com- mencement of operations at that location.24 All mone- tary sums due shall include interest as prescribed by Flor- ida Steel Corp., 231 NLRB 651 (1977).25 On these findings of fact and conclusions of law and on the entire record, I issue the following recommend- ed26 ORDER The Respondent, Hahn Motors, Inc. and Hahn Truck Sales & Service Corp., Hamburg, and Shartlesville, Pennsylvania, its officers, agents, successors, and assigns, shall 1. Cease and desist from (a) Discouraging membershipin a labor organization by abrogating contract benefits, withholding negotiated terms, or in any other manner discriminating with re- spect to wages, hours, or other terms and conditions of employment. (b) Refusing to bargain collectively with United Steel- workers of America, AFL-CIO-CLC, as the exclusive bargaining representative of employees in the appropriate collective-bargaining unit, 'by bypassing the Union and dealing directly with employees concerning terms and conditions of employment, by refusing to recognize the Union for a relocated segment of the appropriate unit, and by repudiating and refusing to apply the unexpired contract to employees in the appropriate unit at the new location. The appropriate collective-bargaining unit is as follows: 24 It is noted in this connection that, even if precedent in line with Milwaukee Spring Division , supra, were to be rejected, -the remedy here for the most part would not be affected. Thus, with the exception of the notice and additional language in the cease-and -desist portion of the remedy, the 8(a)(3) and '( 1) finding sanctioned by that case is dispensable. In short, such a finding is unnecessary to the terms of the affirmative remedy recommended here Beyond that , as the relocation did not alter the scope of the appropriate unit , the Board's conventional remedy, ap- plied most recently in similar circumstances in Westwood Import C0, supra at 1214 fn. 7, would warrant relief that would not be substantively different from that which would derive from Milwaukee Spring, supra. 25 See generally Isis Plumbing Co., 138 NLRB 716 (1962) 25 If no exceptions are filed as provided by Sec . 102 46 of the Board's Rules and Regulations , the findings, conclusions , and recommended Order shall, as provided in Sec 102 45 of the Rules , be adopted' by the Board and all objections to them shall be deemed waived for all pur- poses HAHN MOTORS All production and maintenance employees and watchmen, excluding professional employees, guards, and supervisors as defined in the Act. (c) In any like or related manner interfering with, re- straining, or coercing employees in the exercise of the rights guaranteed them by Section 7 of the Act. 2. Take the following affirmative action necessary to effectuate the policies of the Act. (a) On request, bargain collectively with United Steel- workers of America, AFL-CIO-CLC as the exclusive bargaining representative of all employees employed in the above-defined appropriate collective-bargaining unit, including those employed at the Shartlesville, Pennsylva- nia facility. (b) Apply the terms and conditions of the current col- lective-bargaining agreement to all employees employed in the aforesaid collective -bargaining unit, including those who are employed at the Shartlesville facility. (c) Make whole employees for any loss of pay or ben- efits that would have accrued to them under the collec- tive-bargaining agreement but for the failure to apply the terms and conditions of that agreement to all employees employed in the aforesaid collective-bargaining unit, in- cluding those located at the Shartlesville, Pennsylvania facility. (d) Make whole United Steelworkers of America, AFL-CIO-CLC for dues not remitted on behalf of Shartlesville employees who had executed valid, unre- voked checkoff authorizations. (e)' Preserve and make available to the Board or its agents all payroll and other records necessary to com- pute the backpay or value of other benefits, including in- terest, due under the terms set forth in the remedy sec- tion of this decision. (f) Post at its Hamburg and Shartlesville, Pennsylvania facilities copies of the attached notice marked "Appen- dix."27 Copies of the notice, on forms provided by the Regional Director for Region 4, 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 cus- tomarily posted. Reasonable steps shall be taken by the Respondent to ensure that the notices are not altered, de- faced, or covered by any other material. (g) Notify the Regional Director in writing within 20 days from the date of this Order what steps the Re- spondent has taken to comply. 24 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 909 The National Labor Relations Board has found that we violated the National Labor Relations Act and has or- dered us to post and abide by this notice. Section 7 of the Act gives employees these rights. To organize To form, join, or assist any union To bargain collectively through representatives of their own choice To act together for other mutual aid or protec- tion To choose not to engage in any of these protect- ed concerted activities. WE WILL NOT refuse to bargain collectively with United Steelworkers of America, AFL-CIO-CLC as the exclusive bargaining representative of all employees in the following appropriate unit: All production and maintenance employees and watchmen, excluding professional employees, guards, and supervisors as defined in the Act. WE WILL NOT deal directly with any of the employees in the aforedescribed appropriate collective- bargaining unit under conditions bypassing United Steel Workers of America, AFL-CIO-CLC as their exclusive representa- tive. WE WILL NOT refuse to recognize United Steelworkers of America, AFL-CIO-CLC as the exclusive representa- tive of the employees in the aforedescribed unit, includ- ing those located at our Shartlesville, Pennsylvania facili- ty. WE WILL NOT fail and refuse to apply the terms and conditions of our collective bargaining agreement with United Steelworkers of America, AFL-C[O-CLC to all the employees in the above-described bargaining unit, in- cluding those located at our Shartlesville, Pennsylvania facility, without the written consent of that Union. WE WILL NOT deny benefits to you under the govern- ing collective-bargaining agreement or in any manner discriminate against you for engaging in activities on behalf of United Steelworkers of America, AFL-CIO- CLC. WE WILL NOT in any like or related manner interfere with, restrain, or coerce you in the exercise of the rights guaranteed you by Section 7 of the Act. WE WILL recognize and bargain collectively with United Steelworkers of America, AFL-CIO-CLC. as the exclusive collective-bargaining representative of all the employees in the above-described bargaining unit, includ- ing those located at our Shartlesville, Pennsylvania facili- ty. WE WILL apply the terms and conditions of our cur- rent collective- bargaining agreement with United Steel- workers of America, AFL-CIO-CLC to all employees 910 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD in the above-described bargaining unit , including those in the appropriate collective-bargaining agreement set employees at our Shartlesville, Pennsylvania facility. forth above , including those employees at our facility lo- WE WILL make whole all employees for any losses sus- cated in Shartlesville, Pennsylvania. tained by our failure to apply the terms and conditions of our collective -bargaining agreement with United Steel- HAHN MOTORS, INC. AND HAHN TRUCK workers of America, AFL-CIO-CLC to all employees SALES & SERVICE CORP. Copy with citationCopy as parenthetical citation