J. W. Rex Co.

National Labor Relations Board - Board Decisions

Mar 13, 1956

115 N.L.R.B. 775 (N.L.R.B. 1956)

J. W. REX COMPANY- 775
such claim, to . either official , it is reasonable to believe , that one, or the other ,would
have made some investigation of it.
In short, on the basis of the preponderance of credible testimony in the record,
the Trial 'Examiner concludes and finds that Pendergrass made no "full and un-
qualified tender" of dues at "anytime prior to" his actual discharge.
It follows, from the Board decision above quoted , that in demanding and causing
Pendergrass' dismissal , the Respondent Union has not violated , the law.
Upon the basis of the above findings of fact , and upon the entire record in'the
case , the Trial Examiner makes the following: '
CONCLUSIONS OF LAW
1. The Employer is engaged in commerce within the meaning of Section 2 .( 6) and
(7) of the Act.
2. The Respondent Union is a labor organization within the meaning of Section
2 (5) of the Act.
3. The Respondent Union has not engaged in any unfair labor practice in violation
of Section 8 (b) (1) (A) or (2) of the Act.
RECOMMENDATIONS
Upon the basis of the foregoing findings of fact and conclusions of law, and upon
the entire record 'in the case , the Trial Examiner recommends - that the complaint
against .the -Respondent be dismissed.
J. W. Rex Company and United Steelworkers of America, AFL-
CIO.' Case No. 4-CA-1231. Mareh 13,1956
DECISION AND ORDER '
On October 11, 1955, Trial Examiner Robert E. Mullin issued' his
Intermediate Report in the above-entitled proceeding finding that the
Respondent 2 had. engaged in and was engaging in certain unfair labor
practices and recommending that it cease and, desist therefrom-and
take 'certain affirmative action, as set forth in'the copy of the Inter
mediate Report attached hereto. Thereafter the Respondent filed
exceptions to the Intermediate Report, a supporting brief, and a mo-
tion to adduce additional evidence.3
The Board has reviewed the rulings of the Trial Examiner made at
the hearing and finds that no prejudicial error was committed. ' The
I The AFL and CIO having merged , we are amending the identification of the Union's
affiliation.
9 At Thereinafter set forth , we find the J. W; Rex Company, as it is presently constituted,
to be the Respondent in this proceeding.
8 The only purpose of the additional evidence sought to be adduced by the Respondent's
motion filed ' with the Board subsequent to the issuance of the Intermediate Report is to
show , that the certified union has disclaimed representation of all the employees of the
merged corporation comprising the unit found appropriate .. The.proffered evidence does
not, however , amount to an unequivocal disclaimer of the right to represent the accretion,
m' 'lesg•°i disclaimer to represent a majority In the certified unit. The fact that the
proffered evidence would tend - to prove simultaneous efforts to organize the accretion em-
ployees is plainly inconsistent with any statement that it . does not seek to represent this
group. The Board has held that where a - union engages in conduct inconsistent with its
express ,dteclgimSr , the. disclalmeg is equivocal, and, ineffective . McAllister Trans,/er, Inc.,
105 NLRB 751 . Under the circumstances , since the proffered evidence could not, even if
proved, affect the Board ' s deft yinination of the particular matter, the motion to reopen
the record Is therefore denied. Dallas Concrete Conlpany, 102 NLRB 1292.
115 NLRB No. 120.
776 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
rulings are hereby affirmed. , The Board has considered the Intermedi-
ate Report, the exceptions and brief, and the entire record in this case;
and hereby adopts the findings, conclusions , and recommendations of
the Trial Examiner.
In their brief submitted to the -Board in support of exceptions to
the Intermediate Report, attorneys for the J. W. Rex Company allege
for the first time that, as the new Company has never been charged
or served , and had never appeared in this proceeding, it is not liable
for the unfair labor practices of its predecessor.4 The record discloses
that all papers, including the amended charges and the complaint,
were served upon, and accepted by, officials of the only J. W. Rex Com-
pany then in existence; that attorneys representing the J. W. Rex
Company, in their answer to the complaint and at the hearing, argued
the merits of the case without preserving a limited appearance.' Fur-
thermore, at the outset of the hearing, Respondent's attorney stated
that Respondent was not questioning the adequacy of service upon
the successor corporation. In fact, as the merger effected no change
in the company name, its address, or its officers, other than the position
;of vice president, it is difficult to understand in what manner the Gen-
,eral Counsel could have differentiated between the new and the old
J. W. Rex Company. Under all the circumstances, we find this con-
tention lacking in merit.'
As regards the unit issue, the Trial Examiner concluded on the
facts of this case, as set forth in the Intermediate Report, that the addi-
tion of the new employees as a result of the merger constituted an
accretion to the original unit, and did not destroy the appropriateness
of the certified unit. Accordingly, he found that the Respondent was
obliged to bargain with the Union on behalf of all its production and
maintenance employees, and that its failure, and that of its predecessor,
4 The brief argued that " the failure of the General Counsel to join the surviving , merged
corpoiation cannot be cured by the theory of ' alter ego ' . " and urged that the cages
cited by the Trial Examiner are not in point The fact is , that, as the issue of service and
appearance was not raised during the hearing , the Trial Examiner did not rule on this
point , and the cases cited by the Trial Examinet to vShich the Respondent here refers,
were set forth by the Trial Examiner in support of his finding that the successor corpora-
tion is responsible for remedying the unfair labor practices of its predecessor
5 The rule that an objection to service of process may be waived by an answer in the
nature of a general appearance without specific reservation of the objection has long been
recognized by the,Federal courts . See Harkness v Hyde, 98 U S 476
0In approving the alter ego theory relied upon by the Trial Examiner as basis for the
Respondent 's liability , we find that the Respondent is not entitled to exemption from lia-
bility on the ground that it constituted a bona fide successor under the doctrine of Symns
Grocer Co ., et at , 109 NLRB 346 In that case , the Board created an exception in favor
of a bona fide successor who had in no way been previously implicated in its predecessor's
unfair labor practices However, since it appears that the officers of the Respondent
herein are substantially identical with those of its predecessor , including Mr. J. W. Rex
as president and in charge of labor relations for both companies , and were in control of
the predecessor during the commission of the admitted unfair labor practice , we find that
the Respondent is not a bona fide successor within the meaning of Syanss Grocer, but is a
successor whose knowledge of and privity with the predecessor ' s violation of the Act
removes it from the exception See 'Oriole Motor Coach Lines , Inc, 114 NLRB 808.
`J. W. REX COMPANY ' 777
to do so constituted a violation -of Section 8 (a) (5) and (1) of the
Act. With this finding the Board agrees. '
The Respondent admits that the appropriate unit is one comprised
of all production and maintenance employees of the successor corpora-
tion, but contends that the new divisions, created after the merger,
resulted in a changed unit and were not, as held by the Trial Examiner,
mere accretions to'the original unit. As noted in-part by the Trial Ex
amiimr in his report, the predecessor company was engaged in the com-`
mercial heat treating of metals and the production of ordnance items.
Prior to the merger, painting, chemical processing, and forge work, in
connection with this business, was performed by outside concerns. As
a result of the merger, the Respondent, which continues to engage in
its original operations, no longer farms out these functions, as they are'
now performed by its new divisions as part of a continuous, integrated
operation.
The creation of these new divisions, of necessity, brought about an
increase in the number of production and maintenance employees. Im-
mediately following the merger, by establishing the Del-Val paint di-
vision, the Chem-Fin chemical processing division, and the forging
division, the Respondent added a total of 29 production and mainte-
nance employees to'the 65 employed prior thereto. Some of the addi-
tional employees occupied classifications which appear to be identical
with, or similar to, those in existence. All maintenance employees were
incorporated into the existing maintenance program and reclassified
according to the existing classification schedule. 'In addition' to the
fact that all production and maintenance employees 'currently enjoy
the same employee benefits, working conditions, and seniority benefits
under a single personnel and labor relations policy, and are subject to
uniform hiring and firing practices and wage-rate system, the record
discloses that a certain amount of employee interchange takes place!
Thus, it appears that a general labor pool exists whereby employees are
temporarily assigned to the various divisions as the need arises. In
addition to temporary interchange, there have been some permanent
transfers as indicated by the fact that when the forge division recently
shut down for a month, the 6 forge employees were reassigned to 4
different divisions. Further, various operational functions such as
receiving, shipping, purchasing, sales, advertising, payroll and ac-
counting, and office and clerical, apparently were absorbed within the
centralized framework ;of. the successor corporation.
In view of the foregoing, we' find, as did the Trial Examiner, that
the additional employees employed by the Respondent as a result of
the merger constitute an accretion to the original unit. In adopting
the Trial Examiner's finding in this regard, we hold without merit ,the
Respondent's argument. that the recommendations of the Trial Ex-
aminer would require it to bargain in a unit in which the Union had
778 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
never requested recognition, submitted. a showing of interest, or dem-
onstrated that it represented a majority.
ORDER
Upon the entire record in the case and pursuant to Section 10 (c)
of the National Labor, Relations Act, as amended, the National Labor
Relations Board hereby orders that the Respondent, J. W. Rex Com-
pany, Lansdale, Pennsylvania, its officers, agents, successors, and as-
signs, shall :
1. Cease and desist from :
((a)._.Refusing to bargain collectively with United Steelworkers of
America, AFL-CIO, as the exclusive representative of all production
and maintenance employees employed at its operations in Lansdale,
Pennsylvania, excluding office clerical employees, truckdrivers, guards,
professional employees, and supervisors as defined in the Act, with re-
spect to rates of pay, wages, hours of employment, and other conditions
of employment.
(b) In any manner interfering with the efforts of United Steel-
workers of America, AFL-CIO, to bargain collectively with the Re-
spondent on behalf of the employees in the aforesaid appropriate unit.
2. Take the following affirmative action, which the Board finds will
effectuate the policiesof the Act :
(a) Upon request bargain collectively with United Steelworkers
of America; AFL-CIO, as the exclusive representative of its produc-
tion and maintenance employees in the aforesaid appropriate unit,
with respect to rates of pay, wages, hours of employment, and other
conditions of employment, and, if an understanding is reached, em-
body such understanding in a signed agreement.
(b) Post at its place of business in Lansdale, Pennsylvania, copies
of the notice attached hereto marked "Appendix A."' Copies of said
notice, to be furnished by the Regional Director for the Fourth Re-
gion, shall, after being duly signed by the authorized representative
of. the Respondent, be posted by the Respondent immediately upon
receipt thereof and maintained by it for a period of sixty (60) con-
secutive days thereafter in conspicuous places, including all places
where notices to employees are customarily posted. Reasonable steps
shall be taken by the Respondent to insure that said notices are not
altered, defaced, or covered by any other material.
(c) Notify the Regional Director for the Fourth Region in writ-
ing, within ten (10) days from the date of this Order, what steps the
Respondent has taken to comply herewith.
MEMBER RODGERS took no part in the consideration of the above
Decision and Order.
7 In the event that this Order is enforced by a decree of a United States Court of Appeals,
there shall be substituted for the words "Pursuant to a Decision and Order ," the words
"Pursuant to a Decree of the United States Court of Appeals , Enforcing an Order."
J. W. REX COMPANY
APPENDIX A
NOTICE TO ALL EMPLOYEES
779
Pursuant to a Decision and Order of the National Labor Relations
Board, and in order to effectuate the policies of the National Labor
Relations Act, as amended, we hereby notify our employees that:
WE WILL bargain collectively upon request with United Steel
workers of America, AFL-CIO, as the exclusive representative
of all employees in the bargaining unit described below with
respect to wages, rates of pay, hours of employment, or other
terms or conditions of employment, and if an understanding is
reached, embody such understanding in a signed agreement. The
bargaining unit is:
All production and maintenance employees, exclusive of of-
fice clericals, truckdrivers, guards, professional employees,
and supervisors as defined in the Act.
WE WILL NOT in any manner interfere with the efforts of the
above-named Union to bargain with us, or refuse to bargain
collectively with said Union as the exclusive representative of
the employees in the bargaining unit set forth above.
J. W. REX COMPANY,
Employer.
Dated--------------- Bv--------------------- =---------------
(Representative) (Title)
This notice must remain posted for 60 days from the date hereof,
and must not be altered, defaced, or covered by any other material.
INTERMEDIATE REPORT
STATEMENT OF THE CASE
This proceeding , brought under Section 10 (b) of the Labor Management Rela-
tions Act of 1947, 61 Stat. 136 (herein called the Act), was heard in Philadelphia,
Pennsylvania , on September 1, 1955, pursuant to due notice to all parties. The
complaint , issued on August 3, 1955, by the General Counsel of the National
Labor Relations Board 1 and based on charges duly filed and served , alleged that
the Respondent had engaged in unfair labor practices proscribed by Section 8 (a)
(5) and (1) of the Act by refusing to bargain with the Union. In its answer, duly
filed, the Respondent denied the commission of any unfair labor practices, chal-
lenged the validity of the Steelworkers' certification , and averred that the original
corporate Employer was no longer in existence.
All parties were represented at the hearing by counsel and were afforded full
opportunity to be heard, to examine and cross -examine witnesses , to introduce
relevant evidence , to argue orally, and to file briefs and proposed findings and con-
clusions. A motion to dismiss , made at the close of the hearing by the Respondent,
was taken under advisement . It is disposed of as will appear hereinafter in this
I The General Counsel and the staff attorney appearing for hint at the hearing are
referred to herein as the General Counsel and the National Labor Relations Board as the
Board. The above-nanmed Company is referred to as the Respondent and the Charging
Party as the Union or Steelworkers.
780 DECISIONS OF NATIONAL' LABOR -RELATIONS BOARD
report. On September 30, an able, and -comprehensive brief was submitted by-
counsel for Respondent.
FININGS OF FACT
1. THE BUSINESS OF THE RESPONDENT
'In'fhe cour'se'and conduci'bf'its'business during the-year ending- Deceli1l5e'r'31,
1954;' the'J.,W.'Rex' Company, a Pennsylvania corporation -engagedi,in the heat
treating of metals, provided goods directly related to the national defense and sold
finished products valued in excess of $100,000 to the United States Government
pursuant to Government defense contracts. During that same period it caused
finished products and services valued at more than $1,000,'000-to be delivered and
transported from its Lansdale, Pennsylvania,:plant,'of which amount approximately
20-percent,-was transported across State lines to points outside the Commonwealth
of Pennsylvania.
On May 16, 1955, pursuant to the terms of a merger agreement , the J. W. Rex
Company merged with three other corporations, viz, Lansdale Ordnance Company,
Del-Val Finishers, Inc., and the Chem-Fin Corporation (herein called Lansdale,
Del-Val, and Chem-Fin). .The resulting successor, which retained the name,,"J. W.
Rex Company," continued the operations formerly conducted by all four companies.
It was conceded by the Respondent that the original Rex• Company was engaged in
commerce within the meaning of the Act. No contention was made that the inter-
state business of-the'-successor was-less than, that of the original corporation. On
the basis- of, the foregoing -facts it is my. conclusion, and I find, that the original Rex
Company and the successor corporation were, and are, engaged in commerce within
the meaning of the Act.
II. THE LABOR, ORGANIZATION INVOLVED, ,
The Union herein involved' is a labor 'organization within the meaning of the Act.
III. THE ALLEGATIONS AS TO UNFAIR LABOR PRACTICES AND CONCLUSIONS WITH
RESPECT THERETO
„ A., Background and sequence of events
On February 2, 1955, the then Rex Company entered into a consent-election
agreement with the Steelworkers and the Regional Director (Case No. 4-RC-2594),
in which the- parties stipulated that all the production and.maintenance _ employees
at the company plant, excluding office clericals, truckdrivers, guards, professional
employees, and supervisors as defined in the Act, constitute a unit appropriate for
the purpose 'of collective bargaining within the meaning of Section 9 (b) of the Act.
On February 10, pursuant to this agreement, an -election was held under the super-
vision of the Regional Director. Of the 63 eligible voters, 31 cast ballots for the
Union, 27 against the Union, and 5 cast challenged ballots. No objections to the
election were filed by any of the parties. -On March 16, the Regional Director
issued his report on challenged ballots and certification of representatives. He sus-
tained the challenges to 3 ballots on the ground- that they were cast by super-
visory employees and overruled the challenges to 2 ballots, but ruled that since the
votes of the latter 2 could, not affect the results of the election, their ballots should
not be opened. Accordingly, he certified the Steelworkers as having won the elec-
tion and as being the statutory representative of the Company's production and
maintenance employees.
,On April 7, the .Union, sought a,meeting with the Employer for the, purpose of
collective bargaining. On April 13, the Company declined this request , on the
ground that the Regional' Director' erred in his disposition of the challenged ballots:
On April 22, the Steelworkers filed charges with the Board alleging that the Company
had refused to bargain, in derogation of Section 8 (a) (5) and (1) of the Act. In
the meantime, late in April and early in May, the Company entered into the merger
agreement mentioned earlier and on May 16, Rex, Lansdale, Chem-Fin, and'Del-Val
were merged into a single entity which retained as its name the J. W. Rex' Company.
On June 23 the Rex Company filed with the Board a motion to revoke the Re-
gional lbirector's certification of the Steelworkers on the ground that the merger had
so changed the character of the Company's operations that the unit established by
the consent agreement was no longer in existence and that the Steelworkers did not
represent a majority of the production and maintenance employees in the 'corpora-
tion which had evolved from the merger. On August 1, the Board denied this
motion.
J. W. REX COMPANY 781
B. The attack.on the certification; conclusions with respect thereto
The .Respondent attacks the validity of the Regional Director's certification on the
ground - that , he, erred in . his rulings .on the challenged ballots and also because he
denied it a hearing on these issues. In accordance with this position the Respondent
offered evidence in support of its' allegation that the Regional Director had erred.
This evidence was excluded'by the Trial Examinei.2 i '
The cons'ent' agreement specifically provided that "the method of investigation of
objections and challenges, including the question of whether a hearing should be held
in c9rlnection therewith, shall be determined by the Regional Director, whose deci-
sion shall be final and binding .',' Despite the' foregoing , language, the Respondent
.asserts that the Administrative Procedure" Act; as well 'as the Labor=Management
Relations Act, guarantee a hearing on every issue arising in a refusal '-tabargain case
so that in.the , unfair labor practice hearing the Trial Examiner should hear -and
consider the evidence on the challenged ballots and other matters related to the
`election . Although the Respondent has thoroughly briefed the legislative history
of the aforementioned statutes, to the 'Trial Examiner; -the argument advanced'-is
unconvincing and fails to overcome the authority of those cases which establish the
binding character and the finality of a Regional Director 's rulings on the issues aris-
ing,put of an, election held pursuant to a valid , consent agreement . Buffalo Arms,
Inc. v. N. L. R. B., 224 F. 2d 105; N. L. R: B. v. Standard Transformer Co., 202
F. 2d 846,' 849, 850 (C. A. 6); N. L. R. Voln'ey Felt Mills, Inc.,'210 F.-2d
559; 560 (C. A. 6); Semi-Steel Casting Co. v. N. L. R. B., 160 F. 2d 388 (C. A. 8),
cert. denied 322 U. S. 758.3 These authorities hold that by reason of the contrac-
tual commitment of the parties themselves there can be no appeal from the decision
of the Regional Director who has acted pursuant to a consent agreement , absent, of
course, arbitrary or capricious conduct on the part of that officer. In the instant'case
there was no evidence of the lattef. As a result it was not appealable' error for the
Director to reach his decision on the challenges to the election without a hearing since
in doing so he was acting within the scope of the authority vested in him by the parties
themselves. His certification of the Steelworkers, therefore, was valid and the Com-
pany was obliged to bargain with that Union after it issued. Consequently, I con-
clude and find that the Respondent violated Section 8 (a) '(5) and (1) of the Act
by refusing to meet with the Union in April 1955, and thereafter.
C. The facts and issues'as to the merger; conclusions with respect thereto
There remain for decision the questions raised by the subsequent merger of Rex
and the three other corporations. Preliminarily, it should be noted that the Board,
in ruling on the motion to revoke the certification; decided the issued raised by the
merger adversely to the Respondent. Despite'this disposition of the matter by the
Board, the Trial Examiner permitted the Respondent to present its evidence on the
issue in order that it have a full and'complete record on which to urge the recon-
sideration of that ruling. The evidence thus adduced was, in substance, as follows:
Prior to the merger, to a large degree all four companies had interlocking officers,
directors, and shareholders. J. W. Rex was the president of both Rex and Lansdale
and the vice president of Chem-Fin and Del-Val. A. Benjamin Scirica was the
secretary of all four companies. G. Clayton Rex, the father of J. W. Rex, was the
treasurer of both Rex and Lansdale, an office that was left vacant in both Chem-Fin
and Del-Val. Gene M. Rex, wife of J. W. Rex, was the vice president of Rex, Frank
Goeckler the vice president of Lansdale, and Jack H. Goodyear the president of
Chem-Fin and Del-Val. The foregoing officers of the' respective companies also
served as the boards of directors for those corporations.. J. W. Rex owned all of the
common stock in Rex, 60 percent of the stock in Lansdale, 50 percent of that in
Chem-Fin, and 331/3 percent of the stock in Del-Val.4 Goodyear held the balance
of the stock in Chem-Fin and' a one-third interest in Del-Val. After the merger,
J. W. Rex became the president of the surviving corporation, Goeckler and Goodyear,
vice presidents, G. Clayton Rex, treasurer, and Scirica, secretary. J. W. Rex holds
2 It appears in the record as a series of rejected exhibits
2 In its brief, Respondent cites N. L R B v Carlton Wood Products Co , 20t F 2d 863,
866 (C A. 9), as support for its contention that denial of a hearing by the Regional Di-
rector, was arbitrary and capricious This contention, however, ignores the fact that in
contrast with the consent agreement construed by the court in the Carlton case, the agree-
inent which the Respondent signed here specifically waived a hearing if the Regional
Director considered it unnecessary to a resolution'of the issues
6 He held this in joint ownership wich his wife.
782 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
approximately 75 percent of the stock in the successor, Goodyear about 14 percent,
and the remainder is held by Goeckler 5 and Scirica.
The original Rex Company had two departments, one for the commercial heat
treating of metals and the other for the production of ordnance items for the armed
services. On April 30 6 it had 65 production and maintenance employees. Mr. Rex
testified that prior to the merger Lansdale was a company owning real estate which
it leased to Rex and, in addition, had a small operation with 6 employees engaged
in forge work for the Federal Government. Chem-Fin was a service organization
with 18 employees engaged in the chemical processing of aluminum and other alloys.
Del-Val operated a commercial paint shop with five employees. In the new Rex or-
ganization the same workcarried on by the former companies is now handled by
six divisions entitled: heat treating, ordnance, forging, Del-Val, Chem-Fin, and the
machine shop. All of those employed by the earlier companies were transferred to
the successor to perform the same work they had been doing previously so that im-
mediately after the merger Rex had approximately 94 production and maintenance
employees.? These individuals have continued to carry on their duties at 5 different
buildings located within a 12-block area in the city of Lansdale except for a group
of from 4 to 5 laborers who were put in a general labor pool to work in the different
divisions as needed.8 There have also been several transfers of men from one divi-
sion to another. Since the merger the administrative, clerical, and sales operations
have been centralized and the personnel policies, pay scales, and all fringe benefits of
the employees have been made uniform throughout the organization?
The Respondent moved to dismiss the complaint on the ground that the old Rex
Company ceased to exist by virtue of the merger, that the successor corporation is
not responsible for the acts of its predecessor, that the complaint fails to allege that
a majority of the employees in an appropriate unit in the successor employer have
designated a labor organization to represent them and, further, that, even assuming
the present existence of the old company, the unit alleged in the complaint is no longer
appropriate because of substantial and material changes in the Employer's operations.
In support of the foregoing contentions, Respondent argues in its brief, that the
old company, having ceased its existence, could have no employees, and that the
employer-employee relationship of those working for it did not continue with the
surviving corporation. This argument is similar to that raised by the employer in.
the early case of N. L. R. B. v. Colten, 105 F. 2d 179, 182-183 (C. A. 6). There
the original respondents constituted a copartnership which terminated as an entity
upon the death of one member. The surviving partner argued that since all the
employees were employees at will, they ceased to be employees upon the death of
the partner, without regard to the.existence of a labor dispute. The court rejected
this argument and, in language that has been quoted frequently since, Judge Simons
stated "It is the employing industry that is sought to be regulated and brought within
the corrective and remedial provisions of the Act in the interest of industrial
peace. . . . It needs no demonstration that the strife which is sought to be averted
is no less an object of legislative solicitude when contract, death, or operation of law
brings about change of ownership in the employing agency. . It would be an
implausible contention that the death of a partner subject to restraint relieves sur-
vivors of its burdens." Ibid., at 183. Subsequent decisions of that court have fol-
lowed the holding in the Cohen case. Thus, in N. L. R. B. v. Fred P. Weissman Co.,
170 F. 2d 952 (C. A. 6), cert. denied 336 U. S. 972, ..ie court enforced a Board order
against the successor as well as the predecessor although the former was not
chartered and did not take over the business until the unfair labor practices com-
plained of had already occurred. The court stated "The Corporation was successor
s Rex, Goodyear, and Goeckler hold their stock jointly with their wives.
6 All employment figures for the.other three companies, Lansdale, Chem-Fin, and Del-
Val are as of this date and are for production and maintenance personnel only.
7 At the time of the hearing the Company had approximately 131 hourly employees,
due to the addition of a second shift in both the Del-Val and Chem-Fin divisions and the
resumption of operations in the ordnance division which had been partially shut down at
the time of the merger.
a In May the Company began construction of a new building adjacent to the former
premises of Lansdale which had been leased by the old Rex organization. An offer by the
Company to prove that, upon completion, the new building would be used to house two
divisions presently located elsewhere was excluded. Upon reconsideration of this ruling
by the Trial Examiner that testimony is now received.
Prior to the merger Rex had a slightly higher wage scale than that in effect at Chem-
Fin and Del-Val,
J. W. REX COMPANY 783
to the Company and to Weissman. It continued operations under the same name,
doing business at the same location, with the same employees and the same customers..
There was no change in the relationship between the employer and the employees."
Ibid., at 954. In a more recent case, Dickey v. N. L. R. B., 217 F. 2d 652 (C. A. 6),
where a corporation was formed to take over the operation of a partnership, the
sole stockholder being one of the partners, the court agreed with a Board finding that
the coporation was the alter ego of the partnership, and stated ". . . not only did
Dickey perform the same function in the corporation that he had performed in the
partnership, but the personnel remained the same, the corporation occupied the same
plant as the partnership and continued to do the same kind of work. With one
exception the employees who had worked for the partnership were employed by the
corporation. We think these facts amply support the finding that the corporation
was a continuance of the partnership." Ibid., at 653.
The decisions in other courts of appeals are in accord with the foregoing. In
N. L. R. B. v. Lunder Shoe Corp., 211 F. 2d 284 (C. A. 1), subsequent to a consent
election at the Mitchell Shoe Company, in which the employees voted for a union,
Mitchell sold out to Lunder. The latter refused to bargain with the union on the
ground that after its purchase of the business there was insufficient evidence of the
union's majority status. In sustaining a Board finding that Lunder had violated Sec-
tion 8 (a) (5) of the Act, the court stated ". . . it is well established that a mere
change of employers alone is not sufficient to nullify the certification of the em-
ployees' representative. . . . In the absence of evidence of a substantial change in
the nature of the employer-employee relationship there is 'No reason to believe that
the employees will change their attitude merely because the identity of their em-
ployer has changed .' [citing the Armato case, infra]. If the `employing in-
dustry' remained essentially the same after the transfer of ownership, Lunder is
bound by the Union certification . [citing Colton, supra]." Ibid., at 287. In
N. L. R. B. v. Armato, 199 F. 2d 800 (C. A. 7), the court held that the Board's cer-
tification of a union as bargaining agent of the employees of the original owner of
the business was binding on an individual who took over the business under a lease
agreement with the original owner as well as a corporation which, in turn, took
over the business from him. Judge Lindley stated "Armato complains that he should
not have been included in the order, inasmuch as he is no longer the employer. In
view of his close relationship with the corporate entity, his prior activities as this in-
dustry's sole proprietor and his unquestioned influence in its affairs thereafter, we
think it was entirely proper that the Board order him to refrain from interfering
with the employee's right to bargain collectively." Ibid., at 803. In N. L. R. B. v.
Adel Clay Products Co., 134 F. 2d 342 (C. A. 8), where the stockholders in a family
held corporation organized a partnership to operate the business, the court stated
"We need go no further than to say that the partnership, having taken over the plant,.
the business and the assets of the corporation, with the same management and the
same employees, and having failed to show that any change of policy relative to labor
relations had taken place, is not entitled, as a matter of law, to be relieved from
the remedial measures which the Board deemed necessary to remove the effects of
the unfair labor practices found to exist and to prevent a recurrence." Ibid., at 346.
In N. L. R. B. v. O'Keefe & Merritt Mfg. Co., 178 F. 2d 445 (C. A. 9), the stock-
holders in a corporation were also members of a partnership. Following an election
won by the CIO among the employees of the corporation, ne latter arranged to trans-
fer its manufacturing business to the partnership. After this transfer was com-
pleted, the partnership entered into a contract with the AFL. As to this sequence
of events, Judge Goodrich stated "The combination of facts just recited fits into a
legal pattern already well marked out by an abundance of authority in the labor
law field. Undoubtedly the group succeeding to the manufacturing business of
O'Keefe & Merritt Manufacturing Company, is responsible, just as fully as the corpo-
ration, for its unfair labor practices." Ibid., at 449. See also: N. L. R. B. v. Stowe
Spinning Co., 336 U. S. 226, 227 ("Interlocking directorates and family ties make
the four [respondent mills] equal one for our purposes."); Southport Petroleum
Company v. N. L. R. B., 315 U. S. 100, 106; Regal Knitwear Co. v. N. L. R. B.,
324 U. S. 9. 14-16; Bethlehem Steel Co. v. N. L. R. B., 120 F. 2d 641, 650-651 (C. A.
D. C.); N. L. R. B. v. Krimm Lumber Co., 203 F. 2d 194, 196 (C. A. 2); N. L. R. B.
v. Somerset Classics, Inc., 193 F. 2d 613, 614, 615 (C. A. 2); N. L. R. B. v. E. C.
Brown Co., 184 F. 2d 829, 830-831 (C. A. 2); N. L. R. B. v. Condenser Corp., 128
F. 2d 67, 71-72 (C. A. 3); N. L. R. B. v. Baldwin Locomotive Works, 128 F. 2d
39, 43 (C. A. 3) ("the respondent concedes, as it must, that, where a complaint
for unfair labor practices has issued against a predecessor, the proceeding may be
continued against the successor. . . . The crucial matters are the commission of the
'784 DECISIONS OF NATIONAL -LABOR- RELATIONS BOARD
unfair labor practices and the identity of interest of the . employing agencies which
perpetrated them."); Union,Drawn Steel Co.,v._N. L. R,,,B,, 109, F. 2d,587, 589
(C. A, 3).,(Board order enforced against a parent corporation which 'absorbed the
employer, a wholly owned subsidiary); N. L. R. BA. Blair Quarries Inc., f52 F.
-2d 25, 26 (C. A. 4); N. L. R. B. v. Concrete Haulers, Inc., 212 F. 2d 477, 479
(C. A. 5) ("The interdependencer,and integrated nature of, the operations of the
respondents , the common ownership of stock , and the fact that the same officer ad-
ministers a common labor ,policy, clearly indicate that there is only one employer
for the purposes of this Act."); N. L. R. B. v. Hoppes Mfg. Co., 170 F. 2d 962, 963
(C. A. 6); N. L. R. B.,v. National Garment Co., 166 F. 2d 233, 238 (C. A. 8).
In support of its argument that the successor company has no responsibility here,
the Respondent relies; heavily on the Board decision in Symns Grocer Co., 109 NLRB
346, as well as that of the court of appeals in N. L. R. B. v. Birdsall-Stockdale
Motor Company, 208 F. 2d,234 (C. A. 10). In the Symns case the successor in-
volved was a competitor of the original respondent and had .acquired the business
in a bona fide purchase . In the Birdsall-Stockdale case the successor had no asso-
ciation with the predecessor and, acted wholly independently of„it., In, reaching its
,decision the court pointed out "there was no transfer of intangibles , such as, good
will or trade name and no assumption of liabilities . Johnson [ the successor ] neither
had not acquired any interest in Birdsall and Birdsall neither had nor acquired any
interest in Johnson . The relationship was purely that of a bona fide seller and
buyer . . . . Johnson's operations were not merely a disguised continuance of the
former operations by Birdsall . . Ibid., at - 235. In contrast . with the factual
situation in the foregoing cases, here, there was a transfer of such intangibles as
good will and the trade name of the old company . In addition , Mr. Rex, the sole
owner of the predecessor , emerged as the dominant stockholder in the new organiza-
tion . He had been the chief executive of the ,earlier company and in charge of
its labor, relations . Since the merger he has held the same office and performs the
same duties for the successor corporation . At the hearing he described the merger
as "an absorption of the other corporations by the parent company .", On the facts
in this case the new company is nothing more than an alter ego for the earlier busi-
ness organization and must be held responsible for the unremedied unfair labor
practices of its predecessor.
On March 16 the Regional Director certified the Steelworkers as the majority
representative of the production and maintenance employees of the then Rex' Com-
pany. In order to assure a degree , of stability in bargaining relationships a certifica-
tion must be given effect for a reasonable period. In Ray Brooks v. N. L. R. B.,
348 U. S. 96, the Supreme Court sustained the Board's rule that this must be at
least a year , barring unusual circumstances . Certainly the short 2-month period that
elapsed in the instant case between the date of the certification and that of the merger
was insufficient, assuming there was no substantial change in the business thereafter.
The Company insists that the changes effected by that corporate action have been
such that the original unit established by the . consent agreement is no longer appro-
priate and that now only a unit consisting of all the production and maintenance em-
ployees in the enlarged corporation is appropriate ." In fact, the certification was
-of the production and maintenance employees of the old company. Although the
present organization now has a number of employees engaged in the paint and
-finishing work of the former Del-Val and Chem-Fin companies ,, the largest divisions
of the present day Rex Company are still heat treating and ordnance , where, insofar
as the record , indicates , the 63 employees who participated in the election are still
working. Surely , it cannot be argued that the interest that these employees had in
the terms and conditions of their employment which led them to designate the Union
as their representative has ceased simply because their employer has merged its
operations with three smaller companies. Syncro Machine Company, 62 NLRB 985,
991; N. L. R. B. v. Armato, supra; N. L. R. B. v. Lunder Shoe Corp., supra.
10 Respondent also argues in its brief that the terms of the consent agreement cannot
estop it from urging the inappropriateness of the unit thereby established since its-labor,
counsel did not leain of the proposed merger until after the election. It is true that Mr.
D'Andiade testified that-he first heard of the merger plans about May 1 His testimony
was convincing and I am completely satisfied that the facts as to his knowledge were
exactly as he testified Howevei, it is-the corporation, and not its counsel , which is.the
Respondent herein and both Air Rex and Thomas W Ferguson, Jr, the general manager,
testified that plans for the merges were being forinulaied for several months prior to.its
consummation in May Feiguson conceded that lie made no mention of those plans to
the other parties at the time lie signed the consent-election agreement on,-behalf of the
Respondent
J. W. REX COMPANY 785
Rather than compelling the establishment of a new unit as the Respondent now
urges, it is my conclusion , and I find , that the facts here are similar to those in cases
where the Board has found that- the institution of a new department or the addition
of extra shifts constitutes 'an accretion to the existing unit which in no way disturbs
its essential appropriateness . Borg-Warner Corporation, 113 NLRB 152; Hess, Gold-
smith & Company, Inc., 110 NLRB 1384, 1387; The Budd Company, 107 NLRB
116, 119. Moreover, the Union's status as bargaining agent cannot now be termi-
nated even if, currently, it does not have a majority in this unit , for in March, when
certified, and in April, when the initial unfair labor practices occurred, it held a ma-
jority. Ray Brooks v. N. L. R. B., 348- U. S. 96, 103-104; Franks Bros. Co. v.
N. L. R. B., 321 U. S. 702, 704-706. Consequently, since it is my conclusion in the
light of the foregoing : (1) That the Steelworkers were validly certified on March
16 to represent the production and maintenance employees of the Rex Company in
existence on that, date; (2) that the Rex Company which evolved from the merger
on May 16 is responsible for remedying the unfair labor practices of its predecessor;
and (3) that the operations of the successor are not so different from those of its
predecessor as to destroy the appropriateness of the original unit established by con-
sent of the parties; (4) I further conclude that the present Rex Company is obliged
to bargain with the Steelworkers on behalf of all its production and maintenance
employees 11 and that its failure , and that of its predecessor, to do so up to the pres-
ent, constitute a violation of Section 8 (a) (5) and (1) of the Act. d so find.
IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE
The activities of the Respondent set forth in section III, above , occurring in, con-
nection with the operations of the Respondent described in section I; above, have
a close, intimate , and substantial relation to trade , traffic, and commerce among the
several States and tend to lead to labor disputes burdening and obstructing com-
merce and the free flow of commerce.
V. THE REMEDY
Having found that Respondent has engaged in certain unfair labor practices, I
will recommend that it cease and desist therefrom and take certain affirmative action
designed to effectuate the policies of the Act. Having also found that Respondent
has refused to bargain collectively with the Union , I will recommend that it bargain
collectively with the Union , upon request , as the exclusive representative of its em-
ployees in the appropriate unit.
Upon the basis of the above findings of fact, and upon the entire record in the
case, I make the following:
• CONCLUSIONS OF LAW
1. United Steelworkers of America , CIO, is a labor organization within the mean-
ing of Section 2 (5) of the Act.
2. All production and maintenance employees of Respondent at its establishment
in Lansdale , Pennsylvania , excluding , office clericals , truckdrivers , guards, profes-
sional employees , and supervisors , as defined, in the Act, constitute a unit appro-
priate for collective bargaining within the meaning of Section 9 (b) of the Act.
3. On March 16, 1955, United Steelworkers of America, CIO, was, and at all times
since, has been, and now is, the representative of a majority of the Respondent's
employees in the appropriate unit described above for the purposes of collective bar-
gaining within the meaning of Section 9 (a) of the Act.
4. By refusing on April 13, 1955, and at all times thereafter , to bargain collectively
with United Steelworkers of America , CIO, as the exclusive representative of its
employees in the appropriate unit the J . W. Rex Company engaged in and is engag-
ing in unfair labor practices within the meaning of Section 8 (a) (5) and (1) of
the Act.
5. By refusing to bargain with United Steelworkers of America, CIO, as the ex-
clusive representative of its employees in the aforesaid appropriate unit, at all times
subsequent to its merger with Lansdale Ordnance Company, Chem-Fin Corporation
and Del -Val Finishers , Inc., the J. W. Rex . Company engaged in and is engaging in
unfair labor practices within the meaning of Section 8 (a) (5) and (1) of the Act.
"Excluding, of course , the exemptions set forth in the original certification , i e, office
clericals , truckdrivers , guards, professional employees , and supervisors as defined in the
Act - ,
390609-56-vol. 115-51
786 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
6. By interfering with, restraining , and coercing its employees in the exercise of
the rights guaranteed in Section 7 of the Act, Respondent has engaged in and is
engaging in unfair labor practices within the meaning of Section 8 ( a) (1) of the
Act. -
7. The aforesaid unfair labor practices are unfair - labor practices affecting
commerce within the meaning of Section 2 ( 6) and (7) of the Act.
[Recommendations omitted from publication.]
Davison Chemical Company, Division of W. R . Grace & Co. and
International Chemical Workers Union , AFL-CIO, Petitioner.
Case No. 11-RC-787. March 13, 1956
SUPPLEMENTAL DECISION AND DIRECTION
Pursuant to a Decision and Direction of Election issued herein on
November 18, 1955,1 an election by secret ballot was conducted on
December 15, 1955, under the supervision and direction of the Re-
gional Director for the Eleventh Region, among the employees of
the Employer in the unit found appropriate by the Board. Follow-
ing the election, a tally of ballots was furnished the parties. The
tally shows that of approximately 87 eligible voters, 81 cast ballots,
39 for the Petitioner, 40 for the Intervenor, 1 against the participat-
ing labor organizations, and 1 ballot was challenged. There were
no objections to the conduct of the election.
Since the Intervenor challenged the ballot of James L. Johnson,
contending that he was a supervisor within the meaning of the Act,
and since this challenge was sufficient to affect the results of the elec-
tion, the Regional Director conducted an investigation into the mat-
ter. During this investigation, both the Employer and Intervenor
moved the Board to order a second election without first resolving
the challenged ballot issue. In a report on challenges, dated Janu-
ary 30, 1956, and duly served upon the parties, the Regional Di-
rector recommended that (1) the challenge to Johnson's ballot be
overruled, as he was not a supervisor at the time of the election;
(2) his vote be opened and counted; and (3) the Intervenor's and
Employer's motions be denied.
The Employer has filed exceptions to the recommendations for
opening and counting Johnson's ballot and for denying its motion,
not because Johnson was ineligible to vote but because to count his
ballot now would destroy its secrecy. We find no merit in this con-
tention. It is true that Johnson's vote will be publicly known when
his ballot is opened and counted, but this is an unavoidable result
of the challenge procedure. Consequently, we believe that the poli-
I Not reported in printed volumes of Board Decisions and Orders. At the hearing, Local
No 863, International Union of Mine, Mill and Smelter Workers, Independent, was per-
mitted to intervene.
115 NLRB No. 123.