Hecker Machine, Inc.

National Labor Relations Board - Board Decisions

Aug 29, 1972

198 N.L.R.B. 1114 (N.L.R.B. 1972)

1114 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Hecker Machine , Inc. and International Union , Allied
Industrial Workers of America, AFL-CIO, and its
Local Union No. 197, A.I.W. Case 7-CA-8763
August 29, 1972
DECISION AND ORDER
On March 3, 1972, Trial Examiner Sidney J.
Barban issued the attached Decision in this proceed-
ing. Thereafter, Respondent filed exceptions and a
supporting brief, the General Counsel filed a brief in
opposition to Respondent's exceptions, and the
Charging Party filed cross-exceptions.
The Board has considered the record and the Trial
Examiner's Decision in light of the exceptions and
briefs and has decided to affirm the Trial Examiner's
rulings, findings, and conclusions to the extent
consistent herewith.
We agree with the Trial Examiner that Respondent
is a successor to Loomis, which had a collective-
bargaining agreement with the Union, and that
Respondent is thus obligated to bargain with the
Union. As found by the Trial Examiner, Respondent
continued Loomis' operations without appreciable
hiatus after Loomis ceased production of dock
levelers. Respondent occupied substantially the same
premises, using substantially the same equipment
and machinery to produce the same basic product as
Loomis, albeit on a smaller scale and in a more
limited variety. Moreover, virtually all of the dock
levelers manufactured by Respondent were sold to
Rite-Hite, the parent company of Loomis, who had
also been Loomis' sole customer. In addition, both
the dock levelers manufactured by Respondent and
those formerly manufactured by Loomis carried the
Rite-Hite trademark.
More importantly, all of Respondent's eventual
complement of 12 permanent employees were there-
tofore employed by Loomis. Thus, when Respondent
began operations, it immediately hired three ex-
Loomis employees. Thereafter, as Respondent's
production increased, it continued to hire former
Loomis employees until, at the time of the hearing in
the instant matter, Respondent's entire work force,
save for four temporary employees, consisted of
employees who had previously been employed by
Loomis.
Although at the present time the duties of these
employees are generally more varied than when they
were employed by Loomis, there is no sufficient
difference in the skills required in their new employ-
ment by Respondent to render the unit inappropri-
ate. As stated by the United States Supreme Court in
N. L. R. B. v. Burns International Security Services: 1
[W ]here the bargaining unit remains unchanged
and a majority of the employees hired by the new
employer are represented by a recently certified
bargaining agent there is little basis for faulting
the Board's implementation of the express man-
dates of § 8(a)(5) and § 9(a) by ordering the
employer to bargain with the incumbent union.
Moreover, in Burns the Court noted with approval
the reasoning of the Second Circuit2 when that court
stated that it was "unimpressed with the asserted
differences between Burns' and Wackenhut's opera-
tions." We note that here, as in Burns, the change in
ownership did not affect the basic product line,
employee identity, or job functions. As the Court put
the matter:
Although the labor policies of the two companies
differed somewhat, the Board's determination
that the bargaining unit remained appropriate
after the changeover meant that Burns would face
essentially the same labor relations environment
as Wackenhut: it would confront the same union
representing most of the same employees in the
same unit.3
Applying these principles to the instant case, we
find, in agreement with the Trial Examiner, that
when the Union demanded bargaining Respondent
was legally obligated to comply. By its refusal,
Respondent violated Section 8(a)(1) and (5) of the
Act.
In light of the other aspects of Burns, however, we
cannot adopt the Trial Examiner's recommended
Order in two respects:
A. The Trial Examiner, consistent with our
original decision in Burns, ordered Respondent to
honor and abide by the collective-bargaining agree-
ment between Loomis and the Union until its
expiration date even though Respondent had not
expressly assumed that contract. But the Supreme
Court subsequently rejected our Burns order and
found unsupported our view that "the same policies
which mandate a continuity of bargaining obliga-
tions also require that successor employers be bound
to the terms of a predecessor's collective-bargaining
contract." In so doing, the Court advised us that our
reliance on its decision in John Wiley & Sons, Inc. v.
Livingston,4 was misplaced; and that, instead, we
should heed the admonitions given us in its decision
in H.K Porter Company, Inc. v. N.L.R.B.5
Thus, although the Court in Burns noted that there
may be circumstances in which the Board might find
as a matter of fact that a successor had assumed the
1 92 S Ct 1571 (May 15, 1972) 4 376 U.S 543
2441F2d911
3 N L R B v Burns, supra, fn 4
5 397 U S 99.
198 NLRB No. 161
HECKER MACHINE, INC. 1115
obligations under the old collective-bargaining agree-
ment of the predecessor,6 it stated:
Such a duty does not, however, ensue as a matter
of law from the mere fact that an employer is
doing the same work in the same place with the
same employees as his predecessor. . . .
Therefore, we conclude that, under the facts of this
case , Respondent was not obligated to honor the
collective-bargaining agreement between Loomis and
the Union.
B. Similarly, under the circumstances herein,
Burns precludes us from finding that Respondent
was under an obligation to continue the terms and
conditions of employment prevailing under Loomis.
Indeed, the record shows that, like the situation in
Burns, Respondent made no changes in the wages
and working conditions which it initially granted
when it was in the process of hiring its complement
of employees. Here, as in Burns, it was not until after
Respondent began operations, and a representative
work force had eventually been engaged, that it
became evident the Union had majority status in the
new work force and, therefore, that Respondent as of
that time had an obligation to bargain with the
Union.? By that time, as indicated, Respondent had
established the rates of pay and conditions of
employment under which it intended to operate.8
These facts distinguish the instant case from Howard
Johnson Company9 where at the very outset, in the
words of the Supreme Court:
... it is perfectly clear that the new employer
plans to retain all of the employees in the unit and
in which it will be appropriate to have him
initially consult with the employees' bargaining
representative before he fixes terms.10
We therefore view the facts here as more closely
paralleling those in Burns, wherein the Supreme
Court held that the successor employer was free to
set initial terms on which it would hire its employees,
and in so doing made no unilateral change of the
kind prohibited under the Supreme Court's interpre-
tation of Section 8(a)(5) of the Act.
The Trial Examiner's recommended Order thus
cannot stand, insofar as it would prohibit unilaterally
establishing or changing the terms and conditions of
employment; or giving the Union advance notice of
any proposed changes, or reinstating the wages and
other terms and conditions of employment which
6 Citing as an example the decision in OtIfreld Maintenance Co, Inc, 142
NLRB 1384, wherein the Board found that the successor employer was the
alter ego of the predecessor The complaint in the case here before us was
not litigated on the theory that Respondent was the alter ego of Loomis.
r While no commitment was made in advance as to the composition of
Respondent 's work force, it turned out to include all former Loomis
employees , among whom the Union clearly had majority support.
8 As stated supra, when Respondent began operations , it hired three ex-
Loomis employees While the wages and conditions of employment of these,
as well as the other former Loomis employees subsequently hired , differed
were in force at Loomis under the union contract, or
reimbursing employees for any losses that they may
have suffered as a result of these changes.
AMENDED CONCLUSION OF LAW
Based upon the Trial Examiner's findings of fact
and on the record as a whole, we substitute the
following conclusion of law for the Trial Examiner's
Conclusion of Law 3:
3. By refusing to recognize and bargain with the
Union as the representative of the employees in the
appropriate unit, Respondent has engaged in and is
engaging in unfair labor practices in violation of
Section 8(a)(1) and (5) of the Act.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor
Relations Board . hereby orders that Respondent,
Hecker Machine, Inc., Clare, Michigan, its officers,
agents, successors, and assigns, shall:
1. Cease and desist from:
(a) Refusing to recognize and bargain with Interna-
tional Union, Allied Industrial Workers of America,
AFL-CIO, and its Local Union No. 197, A.I.W., as
the exclusive representative of the employees in the
appropriate unit with respect to rates of pay, wages,
hours of employment, and other terms and condi-
tions of employment.
(b) In any like or related manner interfering with,
restraining, or coercing employees in the exercise of
their rights guaranteed by Section 7 of the Act.
2. Take the following affirmative action which
the Board finds will effectuate the policies of the Act:
(a) Upon request, recognize and bargain with the
Union as the exclusive representative of all the
employees in the bargaining unit and embody in a
signed agreement any understanding reached.
(b) Post at its place of business in Clare, Michigan,
copies of the attached notice marked "Appendix.""
Copies of said notice, on forms provided by the
Regional Director for Region 7, after being duly
signed by its representative, shall be posted by it
immediately upon receipt thereof, and be maintained
by it for 60 consecutive days thereafter, in conspicu-
ous places, including all places where notices to its
employees are customarily posted. Reasonable steps
from those which prevailed under Loomis, there is no evidence that
Respondent made any unilateral changes after its obligation to bargain with
the Union matured
9 198 NLRB No. 98
10 N LR B v. Burns, supra
ii In the event that 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 National 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"
1116 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
shall be taken by Respondent to insure that said
notices are not altered, defaced, or covered by any
other material.
(c) Notify the Regional Director for Region 7, in
writing, within 20 days from the date of this Order,
what steps Respondent has taken to comply here-
with.
IT IS FURTHER ORDERED that the complaint be, and
it hereby is, dismissed insofor as it alleges that
Respondent violated the Act otherwise than as,
found herein.
APPENDIX
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
WE WILL NOT refuse to bargain with Interna-
tional Union, Allied Industrial Workers of Ameri-
ca, AFL-CIO, and its Local Union No. 197,
A.I.W., or in any like or related manner interfere
with, restrain, or coerce employees in the exercise
of their rights under the National Labor Relations
Act, as amended.
WE WILL, upon request, recognize and bargain
in good faith with the Union concerning the
wages, rates of pay, hours of work, and other
terms and conditions of employment in the
appropriate unit set forth below, and WE WILL
embody in a signed agreement any understanding
reached.
The appropriate bargaining unit is:
All production and maintenance employ-
ees employed by us at our operations located
at East 4th and Pine Streets, Clare, Michi-
gan, excluding the plant manager, sales
manager, and all other supervisors within
the meaning of the National Labor 'Rela-
tions Act.
HECKER MACHINE, INC.
(Employer)
Dated By
(Representative) (Title)
This is an official notice and must not be defaced
by anyone.
This notice must remain posted for 60 consecutive
days from the date of posting and must not be
altered, defaced, or covered by any other material.
Any questions concerning this notice or compli-
ance with its provisions may be directed to the
Board's Office, 500 Book Building, 1249 Washington
Boulevard, Detroit, Michigan 48226, Telephone
313-226-3200.
TRIAL EXAMINER'S DECISION
STATEMENT OF THE CASE
SIDNEY J. BARIiAN, Trial Examiner: This matter was
heard at Harrison, Michigan, on October 21 and 22, 1971.1
The complaint, issued on July 13 based upon charges filed
on June 8, 1971, alleges that the above-named Respondent,
asserted to be a successor of Loomis Machine Company
(herein called Loomis), violated Section 8(a)(5) and (1) of
the Act by refusing to recognize or bargain with the above-
named Charging Party (herein called the Union) as the
bargaining representative of an appropriate unit of
production and maintenance employees of Respondent,
and by refusing to honor a collective-bargaining agreement
between the Union and Loomis covering Loomis' pro-
duction and maintenance employees. Respondent's an-
swer , as amended at the hearing , denies the commission of
any unfair labor practices, but admits allegations of the
complaint sufficient to support a finding that the Union is
a labor organization within the meaning of the Act.
Respondent further stipulated that products produced at
its operations of a value of at least $50,000 would be
shipped, on an annual basis, directly or indirectly in
interstate commerce.
Upon the entire record in this case, from observation of
the witnesses, and after due consideration of the briefs of
the General Counsel and the Respondent, and the
memorandum filed by the Union, the Trial Examiner
makes the following:
FINDINGS AND CONCLUSIONS
1. THE ISSUES
The General Counsel and the Union contend that
Respondent is the successor of Loomis, and is thus
obligated to recognize and bargain with the Union for the
unit of employees represented by the Union in the Loomis
operation, and to honor the collective-bargaining agree-
ment between the Union and Loomis covering that unit.
1. Respondent denies that it is a successor to Loomis'
operations.
2. Respondent asserts that Loomis' agreement with the
Union was timely terminated by notice to the Union that
Loomis was terminating its operations.
3. Respondent asserts that Loomis continues to exist as
an employer, and, if the prior union agreement continues
in force, the obligation to honor the agreement devolves
upon Loomis, not upon the Respondent.
4. Respondent denies, in the absence of any offer by
the Union to demonstrate a current majority status in the
unit, that the Respondent has any obligation to recognize
or bargain with the Union as the representative of that
unit.2
1 All dates hereinafter are in 1971 unless otherwise noted.
2 Respondent does not dispute, and I find , that the following unit is
appropriate . for collective bargaining within the meaning of the Act.
All production and maintenance employees employed by Respondent
HECKER MACHINE, INC. 1117
II. THE FACTS
A. Loomis' Operations
Loomis, for a considerable period of time, at least since
1952, was engaged at Clare, Michigan, in the manufacture
of dock levelers and related products. These dock levelers,
which are fabricated from steel, are used as bridges
between loading platforms and trucks or other vehicles
loading from, or unloading onto, such platforms. During
the period with which we are here concerned, Loomis
appears to have produced such levelers and other items
solely upon the order of the Rite Hite Corporation (herein
called Rite Hite) for Rite Hite's customers. Loomis at this
time was owned and controlled by Rite Hite and had
corporate officers in common. Rite-Hite, located in a
suburb of Milwaukee, Wisconsin, was described as a
nationwide sales organization engaged in the sale, distribu-
tion, and service of dock levelers and related products.
These products were produced for Rite Hite by Loomis
and other manufacturers to whom the work was subcon-
tracted by Rite Hite.
Immediately prior to March 31, Loomis' operations at
Clare were carried on in five buildings, four of which
Loomis owned and one which it leased, and in the areas
adjacent to those buildings. It then employed about 30
production and maintenance employees, with 4 plant
supervisors: Superintendent Jack Liberty, Plant Manager
Dick Roth, Foreman Loren Garver, and Roger Kleinhardt.
As described in the record, Loomis was engaged in an
assembly-line type of high volume production, in which
many employees might remain at a single machine, or
perform a single function on work proceeding through the
operation, for substantial periods of time, although it was
not unknown for employees with sufficient skills to work
on several machines or to be interchanged among the
various functions required. Though Loomis produced a
large number of dock leveler models for Rite Hite, it was
Loomis' normal practice to produce only a single model of
dock leveler at a time in volume for storage, and to
perform such modifications upon the item as was necessary
when the item was ordered. Loomis would ship directly to
the customer as directed by Rite Hite, which would bill the
customer, take care of the accounting required, and pay
Loomis' expenses and costs, such as payroll and utilities,
from Rite Hite's offices.
Since at least 1952, Loomis and the Union have been
parties to successive collective-bargaining contracts cover-
ing Loomis' production and maintenance employees. The
last such contract was effective from July 1, 1968, until
July 1, 1971, "and thereafter, for one year, unless one party
notifies the other in writing at least sixty (60) days prior to
the expiration date of a desire to change, modify or
terminate this agreement."
due to cost and management difficulties, the Company is
investigating the possibilities of curtailing or terminating
its facilities in Clare, Michigan. We will keep you informed
as our investigation progresses." So far as the record
shows, the Union received no further advice concerning
these plans, until it received a letter, dated March 12, from
Rite Hite, by its president, Arthur K. White, advising that
"[a]fter careful consideration of all available alternatives,
the company has decided that because of economical
conditions [sic], it has no choice but to terminate its
operations at Loomis Machine Company in Clare, Michi-
gan. The present work force will be retained through
March 26, 1971, provided that productivity levels are
maintained. . . . After that date, a small complement will
be retained for several days for clean up purposes."
Beginning in January, negotiations were undertaken in
Rite Hite's offices between Rite Hite-Loomis and Robert
W. Hecker, than chief designer for Loomis at Clare, with
respect to the latter's producing dock levelers for Rite Hite
at Clare, as considered in more detail hereinafter. The
management of Rite Hite-Loomis was apparently satisfied
with the progress of those talks prior to sending the March
12 letter, although Hecker claims that he had no knowl-
edge of an intention to terminate Loomis' operations
before he saw a copy of that letter at Loomis .3 It appears
that all of the production and maintenance employees of
Loomis, with possibly one or two exceptions, received
layoff notices just prior to March 31. (Respondent began
operations on April 5, as described below.) Two former
Loomis employees were retained, principally to maintain
facilities and inventory not leased to Hecker. It appears
that one of these men also fabricated some parts for dock
levelers previously sold. He continues to be employed at
the premises formerly used by Loomis at Clare. The other
man was laid off about April 23 and thereafter was
employed by Respondent. After March 31, several salaried
employees, including Plant Manager Roth, and one clerical
employee formerly employed at the Loomis' operation
were retained. These have since either been laid off,
transferred to Rite Hite, as in Roth's case , or, as in the case
of the one clerical, employed by Respondent. According to
the testimony of Roth, the "existing" collective-bargaining
contract between Loomis and the Union is being applied to
the one production and maintenance employee who
remains in one building formerly used by Loomis for
production purposes.
It appears that the Union and Rite Hite-Loomis have
been in communication concerning the amounts of money
due employees laid off by Loomis about March 31, under
the bargaining agreement. The dispute does not seem to
have been resolved. So far as appears no other negotiations
concerning Loomis' cessation of operations at Clare have
taken place.
B. Circumstances of Loomis' Cessation of Operation
About the middle of February, Loomis, by Arthur K.
White, its president, advised the Union by letter that ".. .
C. Respondent's Operations `
Respondent was organized, and is solely owned, by
Robert W. Hecker. It was incorporated in Michigan on
3 I do not credit Hecker in this assertion, as in some other matters noted
at its operations located at E 4th and Pine Streets , Clare, Michigan , hereinafter He strongly impressed me as lacking in candor and straightfor-
excluding the plant manager , sales manager , and all other supervisors wardness , and attempting to weigh the legal consequences of his answers,
within the meaning of the National Labor Relations Act. and tailoring his testimony accordingly.
1118 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
April 6, 1971. Hecker, who had been employed by Loomis
since 1959, with a short break in employment, prior to
March 31, was chief designer at the Clare operations and a
supervisor over the two draftsmen in his office. He had
been engaged in the steel fabrication field for some time,
and by early 1971, at another location in Clare, was also
operating a small steel fabricating operation of his own,
which was not in competition with Loomis. He made
known to the management of Rite Hite in January that he
was interested in producing dock levelers for Rite Hite on a
basis similar to that performed by Loomis and other
suppliers to Rite Hite. There followed some extended
negotiations at the Rite Hite offices with respect to the
lease of some of the premises, equipment, and inventory
then being used by Loomis, and an agreement by Rite Hite
to purchase dock levelers and other services from Hecker.
As of the time Loomis ceased making dock levelers at
Clare, none of these agreements had been executed and, in
fact, Respondent had not formally been incorporated.
Hecker, nevertheless, began operations on April 5. As
confirmed by the lease executed on June 1, Hecker, and
subsequently Respondent, conducted its operations in
three of the buildings owned and previously used by
Loomis. Two other buildings previously used by Loomis
and considerable area used as storage space was not leased.
One of the two buildings not leased by Hecker, as noted
above, continues to be used for storage and maintenance
of materials, inventory, and equipment not yet disposed of.
Hecker leased some, but not all of the equipment and
machinery which had been used by Loomis, and from time
to time has purchased supplies and materials from the
Loomis' inventory. The lease by its terms, is for a period of
1 year, subject to earlier cancellation by either party upon
30 days' notice. Hecker has rearranged some of the
machinery and equipment which had been used by Loomis
and has installed, or intends to install, certain equipment of
his own, such as a blower for ventilation and a hoist and
trackage appertaining thereto.
Prior to March 31, Hecker consulted with Loomis Plant
Manager Roth concerning the kind of employees he
wished to hire for his operations. In particular, Hecker was
looking for versatile workers who had the ability, or skills,
to perform more than one function in the fabrication and
assembly of dock levelers. Hecker selected three Loomis
employees and discussed with them employment in his
operations. He advised them of the rates of pay which he
intended to pay, which Hecker knew were less than the
employees were receiving under the union agreement.4 It is
also clear that Hecker and Respondent are not providing
fringe benefits to production and maintenance employees
which they were receiving under the bargaining agreement.
Hecker began operations on April 5, with these three ex-
Loomis workers. Since that time, Respondent has em-
ployed a total of 17 production and maintenance workers.
Of these, four had not previously worked for Loomis, and
two others had been supervisors for Loomis, but were not
employed in that capacity by Respondent. Among the 17
named, 5 (including 4 who had not worked for Loomis)
were employed on a temporary basis. Only two of these
temporaries were still employed at the time of the hearing,
and they were to be let go shortly thereafter. Excluding
these 2, Respondent employed 12 production and mainte-
nance employees at the time of the hearing, all of whom
had previously worked for Loomis (but 2 of whom had
been foremen for Loomis). According to Hecker, he is the
only supervisory employee employed by Respondent.
Respondent's operations are more limited than those
carried on by Loomis. By the terms of the purchase
agreement finally signed with Rite Hite on May 11, Rite
Hite will award Respondent all of its orders for six specific
models of dock levelers, with the possibility that Respon-
dent may receive orders for other models as well. The
prices to be paid for this work are "to be agreed upon from
time to time during the term of this agreement." The
agreement is for a period of 1 year, expiring April 4, 1972,
and may be canceled by either party upon 30 days' notice
prior to that date. According to Roth, who was previously
Loomis' plant manager and is now coordinator of suppliers
and installations for Rite Hite, the number of models made
by Respondent since April 5, constitute about one quarter
of those which Loomis produced in the last full year of
operation, 1970. It appears that other suppliers to Rite
Hite, who previously produced models made by Loomis,
are now utilized by Rite Hite more extensively than before
in this regard. Though Hecker asserts that Respondent has
bid on steel fabrication for others, it has in fact produced
work only for Rite Hite since April 5.
Respondent does not utilize the assembly line, high
volume techniques formerly used by Loomis, but tends to
have employees follow the product, performing a number
of functions on it, including assembly and inspection.
Respondent thus builds its product to order, and not in
volume, and does not produce for inventory, as Loomis
did. Respondent ships the product, upon order of Rite
Hite, by common carrier. As would be expected from its
more limited operations, Respondent does not have the
departmentalized, specialized functions which Loomis
maintained, such as maintenance, shipping, purchasing,
design and drafting, research and development, quality
control, material handling, subcontracted janitorial service,
and the like.5
There is no evidence that Rite Hite or Loomis have
provided any financial assistance to Respondent other
than the agreements previously mentioned, and the
instances which will be considered below. Respondent has
separate officers from Rite Hite and Loomis, and there is
no evidence that Respondent or Hecker has any ownership
interest in Rite Hite or Loomis or that they have any
ownership interest in Respondent . Respondent's financing
and credit have been secured quite independently of Rite
Hite and Loomis, according to Hecker.
There are some instances of cooperation, coordination,
and continuity. Thus a major part of Respondent's
production for Rite Hite has been the assembly of certain
4 Hecker initially evaded an admission that he was aware that the that he knew the wages he was offering were less.
amounts offered were lus than provided by the contract However, he 5 A number of the employees who performed some of these functions for
admitted that he knew of the existence of the agreement, that he knew the Loomis, however, are presently employed by Respondent.
wages that Loomis was paying the workers covered by the contract, and
HECKER MACHINE, INC.
dock levelers from parts which Loomis had fabricated, but
had not assembled at the time it ceased operations.
Respondent completed these items for Rite Hite on the
basis of the labor required to finish these levelers.
Respondent hired temporary employees to do the job.
Further, it appears that Respondent is permitted to use
parts of the premises and equipment which it did not lease,
without cost, and similarly permits the employee taking
care of the remaining former Loomis building to use
facilities and equipment which Respondent has leased,
without cost to Rite Hite or Loomis .6
D. Respondent's Dealings with the Union
As previously noted, Hecker was aware that Loomis'
production and maintenance employees were represented
by a union, which held a collective-bargaining agreement
covering their working conditions.? He was also aware of
the wages and benefits which the employees were receiving
under that agreement. Neither Hecker nor the Respondent
made any attempt to notify or consult with the Union prior
to the various changes which were made in those
conditions. On May 14, the union president advised
Hecker in writing that he was violating the "union
contract" by calling men back out of seniority, and
requested that he discuss this with the Union. On May 24,
counsel for the Union wrote Respondent, in pertinent part,
as follows:
My investigation discloses that your company is the
successor of Loomis Machine Company. As you know,
Loomis Machine and the AIW were parties to a
collective-bargaining agreement dated July 1, 1968,
which, in accordance with its terms, will remain in
force and effect until July 1, 1971 , unless changed,
modified or terminated.
Accordingly, on behalf of the International Union,
AIW and its Local Union No. 197, I hereby make the
following demands:
(1) That Hecker Machine, Inc. recognize the AIW as
the exclusive bargaining representative of its employees
in the appropriate unit as set forth in the bargaining
agreement dated July 1, 1968, and bargain collectively
with the AIW upon request.
(2) That Hecker Machine, Inc. honor, adopt and
enforce the bargaining agreement between Loomis
Machine and AIW dated July 1, 1968.
(3) That Hecker Machine, Inc., maintain the wages,
benefits, and other terms and conditions of employ-
ment set forth in the bargaining agreement between
Loomis Machine and AIW dated July 1, 1969, and
refrain from making any unilateral changes in wages,
hours, benefits and other terms and conditions of
employment without prior notice to and bargaining
with the AIW.
An immediate reply to this letter is requested.
Respondent did not answer either of these letters, and
has not otherwise communicated with the Union concern-
8 Hecker sought to explain this on the basis that it is "pretty standard
through the fabricating industry" that those who own "fixtures" let others
use them free of charge On the basis of this record, this was not at all
convincing The interchange of use of facilities, equipment, and services
clearly goes beyond the use of fixtures, as Hecker's testimony indicates
ing these matters.
III. ANALYSIS AND CONCLUSIONS
1119
1. The successorship issue
Where employees in a bargaining unit have selected a
bargaining representative to deal with their employer with
!respect to their conditions of employment, and particularly
!where the employment relationship has been codified in a
bargaining agreement, the obligation of the employing
enterprise to continue to deal with the bargaining repre-
sentative, and honor the agreement is not defeated by a
change in the ownership of the enterprise. As the Board
stated in Maintenance, Inc., 148 NLRB 1299, 1301, "The
duty of an employer who has taken over `an industry' to
honor the employees' choice of a bargaining agent is not
one that derives from a private contract, nor is it one that
necessarily turns upon the acquisition of assets or other
obligations usually incident to a sale , lease or other
arrangement between employers. It is a public obligation
arising by operation of the Act. The critical question is not
whether Respondent succeeded to the [predecessor's ]
corporate identity or physical assets , but whether Respon-
dent continued essentially the same operation, with
substantially the same employee unit whose duly certified
bargaining representative was entitled to statutory recogni-
tion at the time Respondent took over." "In determining
whether one company is a successor to another, the Board
[takes] into account the continuity of the original business
operation, the use of the same plant and facilities, the same
work force, and the similarity of products or service." See
Glendora Plumbing, 172 NLRB 1700.
The issue to be resolved, essentially, is one which the
Board meets frequently in many different aspects in
administering the Act: Whether after-occurring events are
of such far-reaching character as to materially alter the
integrity of the bargaining unit and raise a substantial
doubt that the employees in the unit desire continuing
representation. Thus, the Board recently stated, in G. T. &
E. Data Services Corporation, 194 NLRB No. 102, "In
defining and applying the `employing industry' concepts,
the Board, with court approval, has always found that
more significant weight should be attached to facts
demonstrative of `the continued nature of the employment
[of a particular group of employees involved] rather than
to the source of such employment' .. . Similarly, in
Ranch-Way, Inc., 183 NLRB No. 116, the Board held that
"The key test in determining whether a change in the
employing industry has occurred is whether it may
reasonably be assumed that, as a result of transitional
changes, the employees' desire[s] concerning unionization
have likely changed."
In that case, where a local operator took over only one
mill from a large, distant owner whose multimill operation
(including the one taken over) was covered by a master
agreement, and continued operations at the mill in
basically the same way (though with changes in the type
and quantity, but not the character, of the product), with a
7 Hecker claims not to have known the name of the Union , but its name
and address were clearly available to him if, in fact, he did not know them
He admits seeing the Loomis' letter to the Union dated March 12,
containing the union name and address
1120 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
majority of the employees of the predecessor (but not all)
performing basically the same duties, the Board found that
an appropriate unit survived the transfer, and that the
"factors present . . . support an assumption that the
transfer would not have affected employee sentiment
toward unionization." Finding that the "Respondent has
continued the `employing industry' by using substantially
the same facilities and work force to produce the same
basic products for essentially the same customers ...," the
Board held that the respondent in Ranch-Way was "a
successor for the purpose of the Act."
In the present case, it is quite clear that Rite Hite-Loomis
intended, as did Respondent, that the latter would succeed
to the Loomis operations at Clare, occupying substantially
the same premises, using substantially the same equipment
and machinery to produce the same basic product, dock
levelers (though in less quantity and fewer models), for the
same basic customer (Rite Hite).
It is further plain that when Respondent began these
operations, without appreciable hiatus after Loomis ceased
making dock levelers at Clare, Respondent expected to
carry on by utilizing the skills and experience of the
employees who had performed unit work for Loomis.
Thus, though Respondent began with only 3 employees
recruited from approximately 30 Loomis employees then
employed, at the time of the hearing, Respondent em-
ployed 12 regular workers making dock levelers, all of
whom had previously worked for Loomis.8 The only non-
Loomis employees hired by Respondent were five hired on
a temporary basis for a nonrecurring unskilled job. All
have been, or are, scheduled to be let go.
Respondent argues however, (Br., pp. 30-31) that
successorship is here negatived by evidence that Respon-
dent is a smaller, localized employer which produces less
than Loomis, using fewer employees in a more versatile
manner to do a greater variety of tasks and with less
equipment somewhat differently arranged in a smaller
area, as well as by Respondent's lack of identity with, or
financial interest in Loomis or Rite Hite (and vice versa)
by Respondent's independent financing, different and less
supervision, less office force, lack of departmental struc-
ture and discontinuance of outside janitorial services,
different accounting and payroll services and some
different suppliers, Respondent's failure to purchase
Loomis' goodwill and accounts receivable or assume
Loomis' liabilities, nondiscriminatory hiring of employees,
asserted installation of new equipment, and union bargain-
8 Two of these had been supervisors for Loomis , but are members of the
umt at Respondent One of these two had been a union member before
becoming a supervisor for Loomis,
9 This last factor apparently goes to Respondent's contention that
notwithstanding Rite Hite's claim that Loomis ceased operations, Loomis,
in fact, continued in existence, and therefore all bargaining obligations
continued to be those of Loomis alone However , I find that after March 31,
Loomis did not continue to be the same employing enterprise, as
Respondent contends, although Loomis continued to employ one or two
employees who took care of its inventory of parts, supplies and equipment,
and occasionally fabricated a few repair parts for customers. To the extent
shown by the record , insofar as Loomis continued in existence it was
essentially a warehousing operation
10 Inasmuch as the collective -bargaining agreement contained clauses
requiring union membership , it is assumed that the Loomis employees in the
unit were members.
11 In this connection , it is noted that Respondent 's independence of Rite
ing with Loomis over benefits due employees let go by
Loomis.9
These factors have been carefully considered in the
context of the record as a whole, and the applicable
precedents, and it is found that they do not establish that
the identity of the employing enterprise, or that of the unit,
or the employees in it, have been so altered as to require a
finding that the unit is not substantially the same, or that
the composition of the unit has so changed as to negative
the assumption that the employees continue to desire the
union representation.10 The fact that the alleged successor
is a local employer, independent of the predecessor
employer,ii operating on a smaller basis, with fewer
employees, independent financing, different suppliers, and
the like has frequently been found not to destroy the
identity of the employing enterprise, or the integrity of the
unit. See e .g., Ranch-Way, supra; Polytech, Incorporated
186 NLRB 984; Cf. Lincoln Private Police, etc., 189 NLRB
No. 103, where the Board held that the unit had been so
fragmented as to be destroyed. Likewise, while factors such
as identity of supervisory staff may indicate some degree of
continuity of the employing enterprise, the converse does
not necessarily follow. See, e.g., Maintenance, Inc., supra at
1301; see also Ranch-Way, supra.
In summary, Respondent is engaged at substantially the
same premises as Loomis using substantially the same
machinery, equipment, and employees, making the same
basic products for the same basic customer. Most impor-
tantly, ex-Loomis employees have at all times constituted a
substantial majority of the employees in the unit at
Respondent's operations, if not the entire unit.12 The
changes relied upon by Respondent go to the fact that
Respondent has a more restricted operation than did
Loomis, with fewer employees performing more functions
in a more versatile manner. However, if Loomis had
similarly restricted its operations-and the record reveals
no reason, except possibly the union contract, why it could
not have done so-at the same place, with the same fewer
employees, in the same manner, there can be no question
but the employing enterprise would remain the same. The
substitution of another employer for Loomis, in the
circumstances of this case, is not sufficient to alter the
situation.13
In coming to this conclusion, the cases cited by
Respondent, Lincoln Private Police, supra; Thomas Cadil-
lac, Inc., 170 NLRB 884, Tallakson Ford, Inc. 171 NLRB
503, and Ellary Lace Corp., 178 NLRB 73, have been
Hite is far from complete Respondent produces only for Rite Hite, which
can shut Respondent down completely on 30 days' notice The free
interchange of services , premises, and equipment between Respondent and
Rite Hite-Loomis at Clare indicates acknowledgment of their integrated
mutual interests , as does the circumstances under which Respondent took
over the operations, and its completion of Loomis' unfinished work
apparently for the cost of the labor required to finish the products left
incomplete.
12 The only five non-Loomis employees hired by Respondent, were
described as temporary summer help, or college students , hired for a
specific job which had been finished The Board would not normally count
such employees in respect to selection of a bargaining representative for the
unit
13 Though there is a suggestion in Loomis' letter to the Union that it was
compelled to cease operations because of economic reasons, there is no
probative evidence of this in the record
HECKER MACHINE , INC. 1 121
carefully considered . They do not require a different result.
I have also noted a more recent Board decision , J-P Mfg.,
Inc., etc., 194 NLRB No. 161, which bears some resem-
blance to , and lends some support to , Repondent's
contentions . I have given it close consideration . It well
illustrates , in the context of the other decisions of the
Board on this point , the difficulty of resolution of this issue
on any close set of facts . However , I believe that case is
clearly distingishable from the present matter . In particu-
lar, on the key factor-that of the identity of employees
and the likelihood of their desire for continued representa-
tion-the situation in J-P Mfg. differs markedly from that
in the instant case . In J-P Mfg., though the lessor originally
hired approximately the same proportion of the predeces-
sor's work force as Respondent in the present case, that
proportion in J-P Mfg. tended to steadily diminish , until at
the time of the hearing only one half of the workforce of
eight employees had previously worked for the predeces-
sor, indicating substantial doubt as to the desire of the unit
for continued representation . In the present matter, at the
time of the hearing, Respondent's entire work force,
approximating slightly less than one half of Loomis' work
force when it ceased operations , had previously worked for
Loomis . Indeed , as noted previously , a majority of
Respondent's unit employees at all times were former
Loomis ' employees . There is no reason to believe , on this
record , that these employees did not want continued
representation.
It is therefore found , on the entire record in this case,
and upon the above analysis, that the Respondent is the
successor of Loomis for the purposes of the Act.
2. The alleged unfair labor practices
By reason of its successorship to the Loomis operations,
as discussed above, Respondent was obligated to recognize
and bargain with the Union as the collective-bargaining
representative of its production and maintenance employ-
ees in the appropriate unit found above. This the
Respondent failed and refused to do. Further, in deroga-
tion of the Union's status as the exclusive bargaining
representative in the appropriate unit, Respondent unilat-
erally changed employee wages and other established
terms and conditions of employment without prior notice
to or consultation with the Union.
General Counsel also asserts that Respondent acted in
derogation of its obligations under the Act by refusing to
honor and abide by the collective-bargaining contract
between Loomis and the Union, claiming that, in the
absence of notice by Loomis to "change, modify or
terminate the agreement," the agreement renewed on July
31 for an additional year. Respondent argues, however,
that Loomis desired to terminate the agreement, in
accordance with its terms. I agree. It seems to me plain that
where a contracting party tells another party to the
agreement that the contracting party will go out of
existence on a date certain, this should reasonably be taken
as notice that the contracting party desires to terminate the
agreement. I need not pass upon Loomis' obligations under
the Act in the circumstances of this case, because Loomis is
not before me. I merely hold that, on the facts of this case,
Loomis' notice to the Union was sufficient to terminate
Respondent's obligations to honor and abide by the
agreement after July 31. However, as a successor to
Loomis, Respondent was obligated until that date to honor
the terms and conditions of that agreement. Burns
International Detective Agency, 182 NLRB 348. This
Respondent did not do.
On the basis of the above, and the record as a whole, I
find that Respondent , by refusing and failing to recognize
and bargain with the Union as the exclusive representative
of its employees in an appropriate unit in respect to wages,
hours, terms, and conditions of employment, by refusing to
honor and abide by the collective -bargaining agreement
until July 31, 1971, its termination date, and by unilaterally
changing employee wages and other terms and conditions
of employment, in derogation of the Union's representative
status , engaged in conduct in violation of Section 8(a)(5)
and (1) of the Act.
CONCLUSIONS OF LAW
1. The Respondent is an employer engaged in com-
merce within the meaning of Sections 2(6) and (7) of the
Act.
2. The Union is a labor organization within the
meaning of Section 2(5) of the Act, which has been at all
times material , and continues to be , the exclusive repre-
sentative of Respondent's employees in the appropriate
unit set forth in footnote 2, hereinabove, for the purposes
of collective bargaining within the meaning of Section 9(a)
and (b) of the Act.
3. By refusing and failing to recognize and bargain with
the Union as the representative of the employees in the
appropriate unit , by refusing and failing to honor and
abide by the collective-bargaining agreement between
Loomis and the Union covering employees in the appropri-
ate unit until July 31, 1971, its termination date, and by
unilaterally changing wages and other terms and condi-
tions of employment in the appropriate unit, as set forth
hereinabove, Respondent engaged in unfair labor practices
in violation of Section 8(a)(5) and (1) of the Act.
4. The aforesaid unfair labor practices .affect commerce
within the meaning of Section 2(6) and (7) of the Act.
THE REMEDY
It having been found that the Respondent has engaged in
unfair labor practices in violation of Section 8(a)(1) and (5)
of the Act, it will be recommended that Respondent cease
and desist therefrom and take certain affirmative action
designed to effectuate the policies of the Act.
In order that the unit employees may be restored as
nearly as possible to the rights which they have enjoyed,
absent Respondent's actions in violation of the Act, it is
appropriate that Respondent be ordered to reinstate for
unit employees the wages, and other terms and conditions
of employment in effect under the collective-bargaining
agreement effective July 1, 1968, until such time as the
Union and the Respondent are in agreement with respect
to changes in these conditions of employment, or an
impasse has been reached after good -faith bargaining for a
reasonable period with respect to any proposed changes in
these conditions. It is further appropriate that Respondent
1122 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
be ordered to reimburse the unit employees for any losses
suffered by reason of Respondent 's changes in wages or
other conditions of employment unilaterally effected, with
interest thereon at the rate of 6 percent per annum.
Inasmuch as it has been found that the collective-
bargaining agreement referred to above terminated on July
31, 1971, Respondent will not be ordered to continue to
honor the terms of that agreement. However, as noted, this
does not relieve Respondent from the obligation to
continue established terms and conditions of employment,
such as wages , hours , and benefits, until changed in
accordance with the provision of The Remedy, set forth
herein.
[Recommended Order omitted from publication.]