John R. Cowley And Bro., Inc.

National Labor Relations Board - Board Decisions

Feb 23, 1990

297 N.L.R.B. 770 (N.L.R.B. 1990)

770 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
John R. Cowley and Bro., Inc. and Industrial Union
of Marine & Shipbuilding Workers of America,
Local 18. Case 15-CA-10314
February 23, 1990
DECISION AND ORDER
BY CHAIRMAN STEPHENS AND MEMBERS
CRACRAFI' AND DEVANEY
On September 18, 1989, Administrative Law
Judge J Pargen Robertson issued the attached de-
cision The Respondent and the General Counsel
have filed exceptions and supporting briefs
The National Labor Relations Board has delegat-
ed its authority in this proceeding to a three-
member panel
The Board has considered the decision and the
record in light of the exceptions and briefs and has
decided to affirm the judge's rulings, findings, and
conclusions as modified and to adopt the recom-
mended Order as modified and set forth in full
below
The judge found that the Respondent violated
Section 8(a)(5) and (1) of the Act by failing to
timely notify the Union of its decision to cease op-
erations We agree with the judge's finding, but
only for the reasons set forth below 1
The Respondent began expenencmg economic
difficulties in the fall of 1986 In early January
1987, 2 the Respondent conducted negotiations for
the sale of its business On January 16, the Re-
spondent wrote the Union stating that "all employ-
ees were terminated and the Company ceased
the operation of its business effective January 16"
In addition, the letter stated that the parties' collec-
tive-bargaining agreement "is terminated"
The Respondent also expressed its willingness to
negotiate over the effects of the decision to close
its business The Union received the letter on Janu-
ary 20
From January 16 to 20 the Respondent em-
ployed supervisory personnel in order to reduce its
inventory Upon receipt of the January 16 letter,
the Union telephoned the Respondent and com-
plained From January 20 to 31, the Respondent re-
called six unit employees to reduce the inventory
The record indicates that the sale of the Respond-
ent's business was completed on February 6
The judge found that the Respondent made its
decision to close on January 15, and that the Union
received notice of the decision on January 20 The
judge found further that the Respondent ceased op-
, No exceptions were filed to the judge s finding that the Respondent
violated Sec 8(a)(5) and (1) of the Act by unilaterally discontinuing con-
tractually required medical insurance benefits on December 31, 1986
'All dates hereafter refer to 1987
erations on January 31, the date on which the Re-
spondent ceased reducing its inventory
The judge noted that the Respondent could have
notified the Union by telephone on January 15 of
its decision made that day to cease operations,
rather than by letter, which was not received by
the Union until January 20 The judge found that,
by failing to inform the Union of its decision to
cease operations at the earliest possible moment,
the Respondent had failed to timely notify the
Union of its decision, thereby depriving it of the
opportunity to bargain over the effects of the clo-
sure 3 The judge noted that the Union was harmed
by the lack of timely notice in that it lost the op-
portunity for unit employees to work from January
16 through January 20
The judge also concluded, however, that follow-
ing notification, the Union did not formally request
bargaining over the effects of the decision to close
and, accordingly, that the Respondent did not
refuse to bargain over the effects of its decision to
close
We find, contrary to the judge, that the date of
closure of the Respondent's business occurred on
January 16, rather than January 31 In so finding,
we note first that it is undisputed that the Respond-
ent notified the Union that cessation of operations
was effective on January 16, and the Respondent
never thereafter informed the Union that closure
was to occur on a different date Second, the Re-
spondent, in its answer and amended answer to the
complaint and amended complaint, admitted that
closure occurred on January 16 Third, according
to the Respondent's January 16 letter to the Union,
the Respondent terminated all of its employees on
January 16 and also terminated the parties' contract
on that date Fourth, the judge erred in relying on
the Respondent's activity in reducing its inventory
from January 16 to January 31 as the basis for find-
ing that cessation of operations occurred on the
latter date Such activity was not a regular aspect
of the Respondent's business, and it is undisputed
that the Respondent ceased accepting business from
its clients on January 16 In sum, the record amply
supports the conclusion that normal operations
ceased on the very date the Respondent selected,
January 16
Having found that the Respondent closed its
business on January 16, and noting that it is undis-
puted that the Union received notification of clo-
sure on January 20, we find that the Respondent
violated Section 8(a)(5) and (1) of the Act by fail-
3 The General Counsel does not contend, and the amended complaint
did not allege, that the Respondent was obligated to bargain with the
Union over the decision itself to cease operations
297 NLRB No 126
JOHN R COWLEY & BRO , INC 771
ing to timely notify the Union of its decision to
cease operations 4 By failing to notify the Union
until after cessation of operations had actually
taken place, the Respondent precluded meaningful
bargaining over the effects of its decision to close,
and thereby refused to bargain with the Union re-
garding the effects of its decision to cease oper-
ations 5 Accordingly, we do not adopt the judge's
finding that the Respondent did not refuse to bar-
gain over the effects of its decision to cease oper-
ations
Furthermore, since the Union did not receive no-
tification of closure until after it had actually oc-
curred, the Union was not at that time obligated to
request bargaining regarding the effects of that de-
cision Accordingly, the judge's finding that the
Union failed to formally request bargaining with
the Respondent when it received the untimely noti-
fication is irrelevant to our finding that the Re-
spondent violated the Act by failing to give timely
notification to the Union See NLRB v National
Car Rental System, 672 F 2d 1182, 1187-1189 (3d
Or 1982)
AMENDED REMEDY
The judge's remedy° does not provide the usual
remedy given by the Board in cases in which an
employer refuses to bargain about the effects of its
decision to close 7 We see no reason for deviating
from our usual remedy in this case Accordingly,
we shall order the Respondent to bargain with the
Union, on request, about the effects of its January
16 discontinuance of business operations Further,
to ensure meaningful bargaining and to effectuate
the policies of the Act, we shall order the Re-
spondent to pay its employees backpay at the rate
of their normal wages when last in the Respond-
ent's employ from 5 days after the date of this de-
cision until the occurrence of the earliest of the fol-
lowing conditions (1) the date the Respondent bar-
gains to agreement with the Union on those sub-
4 In so finding, we do not adopt the judge s statement that an employer
is obligated to inform the union of its decision to close at the earliest pos-
sible moment, or any implication that an employer must use any particu-
lar means of communication Rather, we rely on the standard set forth in
First National Maintenance Corp v NLRB, 452 U S 666, 682 (1981), 1 e,
an employer must conduct effects bargaining 'In a meaningful manner
and at a meaningful time" An element of "meaningful" bargaining is
"timely notice to the union of the decision so that good faith bar-
gaining does not become futile or impossible" Penntech Papers v NLRB,
706 F 2d 18, 26 (1st Or 1983), cert denied 464 US 892 (1983)
5 Metropolitan Teletronics, 279 NLRB 957, 958-959 (1986), enfd mem
819 F 2d 1130 (2d Cir 1978)
'The judge did not order that the Respondent bargain with the Union
concerning the effects of its decision to close Rather, the judge ordered
that the Respondent pay those unit employees deprived of employment
from January 15 until the Union received notice on January 20 of the
Respondent's closure
7 Transmarine Navigation Corp, 170 NLRB 389, 390 (1968), Emsing's
Supermarket, 284 NLRB 302 (1987), enfd 872 F 2d 1279 (7th Or 1989)
jects pertaining to the effects of the discontinuation
of its operations, (2) a bona fide impasse in bargain-
ing, (3) the failure of the Union to request bargain-
ing within 5 days of this decision or to commence
negotiations within 5 days of the Respondent's
notice of its desire to bargain with the Union, or
(4) the subsequent failure of the Union to bargain
in good faith In no event shall the sum paid to any
of the employees exceed the amount each would
have earned as wages from the time the Respond-
ent terminated its operations, to the time each se-
cured equivalent employment elsewhere, or the
date on which the Respondent shall have offered
to bargain, whichever occurs first, provided, how-
ever, that in no event shall this sum be less than
the amount these employees would have earned for
a 2-week period at the rate of their normal wages
when last in the Respondent's employ
In addition, the Respondent shall make its em-
ployees whole for any losses resulting from the Re-
spondent's failure to make contractual medical in-
surance payments in the manner prescribed in Kraft
Plumbing & Heating, 252 NLRB 891 fn 2 (1980),
enfd 661 F 2d 940 (9th Cir 1981)
Interest on all sums due under the Order herein
shall be computed as provided in New Horizons for
the Retarded, 283 NLRB 1173 (1987)
In view of the Respondent's termination of its
operations, we shall provide for mail notices to em-
ployees
ORDER
The National Labor Relations Board adopts the
recommended Order of the administrative law
judge as modified and set forth in full below and
orders that the Respondent, John R Cowley and
Bro , Inc , Mobile, Alabama, its officers, agents,
successors, and assigns, shall
1 Cease and desist from
(a) Refusing to bargain with Industrial Union of
Manne & Shipbuilding Workers of America, Local
18, regarding the effects of its decision to cease op-
erations, by failing to timely notify the Union of
that decision
(b) Refusing to bargain with Industrial Union of
Marine & Shipbuilding Workers of America, Local
18, by unilaterally discontinuing contractually re-
quired medical insurance benefits
(c) In any like or related manner interfering
with, restraining, or coercing employees in the ex-
ercise of rights guaranteed them by Section 7 of
the Act
2 Take the following affirmative action neces-
sary to effectuate the policies of the Act
(a) On request, bargain collectively with Indus-
tnal Union of Marine & Shipbuilding Workers of
772 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
America, Local 18, with respect to the effects on
unit employees of the decision to cease operations,
and reduce to writing any agreement reached as a
result of such bargaining
(b) Pay the employees terminated on or about
January 16, 1987, their normal wages for the
period set forth in the remedy section of this deci-
sion
(c) Make whole unit employees for any losses re
suiting from the failure to make contractually re
quired medical insurance payments, in the manner
set forth in the remedy section of this decision
(d) Preserve and, on request, make available to
the Board or its agents for examination and copy-
ing, all payroll records, social secunty payment
records, timecards, personnel records and reports,
and all other records necessary to analyze the
amount of backpay due under the terms of this
Order
(e) Mail a copy of the attached notice to employ
ees marked "Appendix"8 to Industnal Union of
Marine & Shipbuilding Workers of Amenca, Local
18, and to all unit employees who were on the pay-
roll on January 16, 1987 Copies of the notice, on
forms provided by the Regional Director for
Region 15, after being signed by the Respondent's
authorized representative, shall be mailed by the
Respondent immediately on receipt as directed
(f) Notify the Regional Director in wntmg
within 20 days from the date of this Order what
steps the Respondent has taken to comply
8 If this Order is enforced by a judgment of a United States court of
appeals the words in the notice reading Posted by Order of the Nation
al Labor Relations Board shall read Posted Pursuant to a Judgment of
the United States Court of Appeals Enforcing an Order of the National
Labor Relations Board
APPENDIX
NOTICE TO EMPLOYEES
MAILED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
The National Labor Relations Board has found
that we violated the National Labor Relations Act
and has ordered us to mail and abide by this notice
WE WILL NOT refuse to bargain with Industnal
Union of Marine & Shipbuilding Workers of Amer-
ica, Local 18, regarding the effects of our decision
to cease operations, by failing to timely notify the
Union of that decision
WE WILL NOT refuse to bargain with Industrial
Union of Marine & Shipbuilding Workers of Amer
ica, Local 18, by unilaterally discontinuing contrac
tually required medical insurance benefits
WE WILL NOT in any like or related manner
interfere with, restrain, or coerce you in the exer-
cise of the rights guaranteed you by Section 7 of
the Act
WE WILL, on request, bargain collectively with
Industrial Union of Marine & Shipbuilding Work
ers of Amenca, Local 18, with respect to the ef-
fects on the unit employees of our decision to cease
operations, and reduce to wnting any agreement
reached as a result of such bargaining
WE WILL pay to employees terminated about
January 16, 1987, limited backpay as required by
the National Labor Relations Board
WE WILL make whole unit employees for any
losses resulting from our unilateral discontinuance
of contractually required medical insurance benefits
in the manner required by the National Labor Re-
lations Board
JOHN R COWLEY AND BRO , INC
Denise D Frederick Esq and Charlotte N White Esq
for the General Counsel
R David Proctor Esq and Richard H Sforzini Jr Esq
of Birmingham Alabama, for the Respondent
DECISION
STATEMENT OF THE CASE
J PARGEN ROBERTSON Administrative Law Judge
This matter was heard in Mobile, Alabama on January
19 and July 13, 1989 The complaint issued on January
13 and was amended on September 19 1988 It was
based on a charge filed on May 28 and amended on July
6 1987
The complaint as amended, alleges that Respondent
violated Sections 8(a)(1) and (5) and 8(d) of the National
Labor Relations Act (Act) by ceasing business operations
on January 16, 1987 without prior notice and without af
fording the Charging Party (Union) an opportunity to
negotiate and bargain with respect to the effects of Re
spondent s action and by Respondent since on or about
December 31 1986 refusing to abide by the terms of its
collective bargaining agreement with the Union by um
laterally discontinuing medical insurance benefits
Respondent admitted the commerce allegations of the
complaint Respondent in its answer to amendment to
complaint admitted that during the 12 month period
ending January 16, 1987, it purchased and received at its
Mobile Alabama facility products goods and materials
valued in excess of $50 000 directly from points outside
the State of Alabama In a stipulation on the record, Re
spondent admitted that at material times it was an Ala
bama corporation with a facility located in Mobile Ala
bama, where it engaged in the processing and sale of
scrap metals prior to ceasing operations Respondent in
dispute with the complaint allegations alleged that it
ceased business operations on January 31 1981 The
JOHN R COWLEY & BRO, INC' 773
complaint alleged that Respondent ceased business oper-
ations on January 16, 1987
Respondent, in its answer, admitted that the Union is,
and has been at material times, a labor organization
within the meaning of Section 2(5) of the Act Respond-
ent admitted that the Union has been since about 1950
the exclusive collective-bargaining representative of its
employees in the following appropriate bargaining unit
All production and maintenance employees, exclud-
ing all office and clerical employees and all supervi-
sory employees as defined in the Act
I find that Respondent has been at material times an
employer within the meaning of Section 2(2), engaged in
commerce within the meaning of Section 2(6) and (7), of
the Act
On August 31, 1989, Respondent filed a motion to sup-
plement the record in which Respondent moved for re-
ceipt of Respondent's Exhibits 18, 19, 20, and 21 on
showing that the transcript of the hearing failed to show
receipt of those exhibits during the hearing My personal
notes taken during the hearing show that all those exhib-
its were properly identified, offered, and received by me
during the hearing Therefore, I grant Respondent's
motion Respondent's Exhibits 18, 19, 20, and 21 are re-
ceived in evidence
All parties were given the opportunity to file briefs
The deadline for briefs was finally set for August 31,
1989 Briefs were filed by General Counsel and Respond-
ent
After the deadline for receipt of briefs, Respondent's
attorney wrote me on September 8, 1989 (received in
this office on September 11) In that letter Respondent
complained that General Counsel's brief misstates evi-
dence regarding (1) the date Respondent made its deci-
sion to sell its assets and cease business operations and
(2) the date Respondent actually ceased operations
As shown, I made rulings of fact which agree with
Respondent on both the above points I find herein that
the record evidence established that Respondent made its
decision to sell its assets and cease business operations on
January 15, 1987
Additionally, I find, as shown below, that even though
Respondent wrote the Union that it was ceasing oper-
ations on January 16, the record showed that Respond-
ent continued operations after January 16 From January
16 to January 20 Respondent performed work with su-
pervisory personnel From January 20, after the Union
phoned Respondent, Respondent employed six bargain-
ing unit employees until operations finally ceased on Jan-
uary 31, 1987
' Therefore, as to the two points raised in the body of
Respondent's September 8, 1989 letter, I agree with Re-
spondent
At the conclusion of its September 8 letter, Respond-
ent raised a question under the Equal Access to Justice
Act That question is premature, and, for that reason, is
rejected and not considered
On the entire record, including my observation of the
demeanor of the witnesses, and after considering briefs
filed by the parties, I make the following determinations
The Facts
Of initial importance is the manner in which Respond-
ent notified the Union that it was going out of business
On January 16, 1987, Respondent wrote the Union
The Union received the letter on January 20, 1987
This letter is to notify you that all employees of
John R Coley & Bro , Inc were terminated and the
Company ceased the operation of its business effec-
tive January 16, 1987 The labor agreement by and
between John R Coley & Bro , Inc and the Indus-
trial Union of Marine and Shipbuilding Workers of
America, and its Local No 18 AFL-CIO dated
August 23, 1985 is therefore terminated
The Company is willing to negotiate with the
union over the effect of such decision
Please contact us if you wish to discuss this
matter further
Thank you
Respondent's chairman, William F Cowley, testified
that after January 16, Respondent tried to reduce its in-
ventory before operations were completely stopped In
order to perform that work, Respondent used superviso-
ry personnel However, upon receipt of the above letter
the Union called Respondent and complained After the
Union's complaint, Respondent recalled six employees
and used them to reduce inventory until work finally
ceased on January 31, 1987
Ron Chapa, president of Local 18 during material
times, testified that the Union was never told by Re-
spondent that the date when operations ceased was any
time other that January 1 6 Chaps testified that the em-
ployees terminated when Respondent ceased operations,
did not receive benefits, including vacation and sever-
ance pay, and extended health or life insurance benefits,
as a result of their termination
On January 26, 1987, the Union filed charges with the
National Labor Relations Board (Case 15-CA-10205), al-
leging Respondent violated Section 8(a)(1), (3), and (5)
of the Act The charge alleged
The company unilaterally terminated the collec-
tive bargaining agreement, whose term extends until
August, 1988, effective on January 16, 1987 It also
terminated all union employees on that date The
basis for its action is that it is allegedly going out of
business However, the company is continuing to
perform bargaining unit work, using non-union em-
ployees
On January 28, 1987, the Union wrote Respondent
The Union received your letter dated January 16,
1987 statmg that all of your employees are terminat-
ed and the Company has ceased its operations and
the Labor Agreement by and - between John R
Cowley and Bros, Inc and The Industrial Union of
Marine and Shipbuilding Workers of America, and
its Local No 18, AFL-CIO date August 23, 1985 is
therefore terminated
774 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
Please be advised that the current Labor Agree-
ment is still in effect until August 23, 1988 Please
contact us if there are any questions in regard to
this matter
On February 3, 1987, the Union again wrote Respond-
ent
In connection with the sale of your business, I
am sure you recognize your obligation to furnish
the union with documentary material needed by the
union to access the impact of the sale Supreme
Court Decision NLRB v Acme Industrial Co, 385
U S 432 (1967) Accordingly, would you please fur-
nish the union with copies of all documents which
reflect the entire agreement between you and the
buyer These documents should include at the very
least the agreement, contract and any other letters
of agreement of understanding addenda, codicils
Someone from the union will pick up the docu-
ments at noon on February 4, 1987 Thank you for
having it ready at that time
In another February 3 letter, the Union wrote Re-
spondent
This letter will confirm our telephone conversa-
tion on Sunday evening February 1, 1987 in regard
to who bought the Company I informed you that
the printer had left out the successors and assigns
clause in the contract book, and also advised you
had already advised the buyer of the successors and
assigns clause that was in the contract
On February 5, an attorney of Respondent wrote the
Union
This letter is to clarify a point in the January 16,
1987 letter from John R Cowley & Bro , Inc to
your Local concerning the termination of its busi-
ness operations The company recognizes that
should there be any bargaining unit work performed
by John R Cowley & Bro , Inc prior to August 23,
1988 that is covered by the collective bargaining
agreement between the parties dated August 23,
1985, said agreement would be applicable
As previously stated in the company's January
16, 1987 letter, it is willing to negotiate with the
union over the effects of its decision to cease busi-
ness operations
Please let me know if there are any questions
concerning the above
Timely Notice
Respondent allegedly violated Sections 8(a)(1) and (5)
and 8(d) of the Act when it ceased operations without
giving the Union prior notice and without affording the
Union a meaningful opportunity to negotiate and bar-
gain
General Counsel's position, as stated on the record, is
that the complaint "alleges that adequate notice was not
given the union, prior to the cessation of operations, in
order to give the union a meaningful opportunity to bar-
gain " Counsel for General Counsel contended that on
January 20, 1987, the Union received notice that Re-
spondent was closing down its operations, but that Re-
spondent was obligated to have notified the Union on
January 15, or earlier Additionally, General Counsel
contended that Respondent engaged in violative conduct
by failing to notify the Union that some employees con-
tinued to work beyond January 16, 1987
Although Respondent wrote the Union on January 16,
the Union did not receive that letter until January 20,
1987 As shown above, the letter indicated that Respond-
ent closed its operations and terminated all employees on
January 16 However, record evidence showed that after
January 16 Respondent worked to reduce its inventory
with supervisory personnel until the Union phoned on
January 20, and from that date Respondent employed six
unit employees to work to reduce its inventory until Re-
spondent's operation finally ceased on January 31, 1987
Findings
Section 8(a)(5) provides that it shall be an unfair labor
practice for an employer "to refuse to bargain collective-
ly with the representatives of his employees
Among other things, Section 8(d) defines the obliga-
tion to bargain collectively
The record shows no basis for a finding that Respond-
ent violated the law by failing to bargain regarding its
decision to close its business In Otis Elevator Co, 269
NLRB 891 (1984), the Board found that management de-
cisions which affect the basic direction or nature of the
business are excluded from the mandatory bargaining ob-
ligation of Section 8(d) Only when those decisions turn
upon labor costs is there a mandatory bargaining obliga-
tion First National Maintenance Corp v NLRB, 452 U S
666 (1981), Hawthorn Mellody, Inc , 275 NLRB 339, 340
(1985), Kroger Co, 273 NLRB 462 (1984)
Here, there is no evidence that Respondent's decision
to cease business operations and sell its assets, turned on
labor costs In fact the record jshovys, that the contrary is
true Respondent's decision turned on iis- fillure tj 'ken er -
ate business WXON-TV, 289 NLRB 615 (1988)
Additionally, the record does not support a finding
that Respondent refused to bargain over the effects of its
decision to close
As shown below, the Union did not formally request
bargaining over the effects of the decision to close
Local President Chapa testified that when he hand deliv-
ered the Union's February 3 letter to Alfred Cowley he
asked Cowley "when could we sit down and reach some
kind of settlement" According to Chapa, Cowley re-
sponded that it was all in the attorney's hands
It is unclear from the above that the Union was asking
Cowley to bargain over the effects Nevertheless, it is
clear that Cowley did not refuse to bargain by Alfred
Cowley's response that it was all in the attorney's hands
As shown above, at that time there was a pending unfair
labor practice charge filed by the Union Chapa's ques-
tion to Cowley did not illustrate whether he was talking
about a contract or the pending charge In view of the
pending charge of refusing to bargain, Cowley's response
was not improper The Union, by failing to go further
JOHN R COWLEY & BRO , INC 775
and clarify Chapa's comments to request negotiations,
failed to request negotiations over the effects See ABS
Industries, 281 NLRB 1088 (1986), cf Barney's Club, 288
NLRB 803 (1988), where the Board found that the em-
ployer failed to give any notice to the union that it was
willing to bargain over effects
Respondent did attempt to terminate the collective
bargaining agreement in its January 16 letter Subse-
quently, on January 28 the Union wrote Respondent that
it could not terminate the contract On February 5, an
attorney for Respondent agreed that Respondent would
continue to honor the contract until it expired on August
23, 1988
As shown above, the General Counsel contends that
Respondent's notice was untimely
The record evidence shows through the testimony of
William F Cowley that Respondent made the decision
to sell its assets and close its operations on January 15,
1987 On January 16, Respondent wrote the Union of 'its
decision Respondent also advised the Union, in its Janu-
ary 16 letter
The Company is willing to negotiate with the
Union over the effect of such decision
The Union received Respondent's letter on January 20,
1987
Subsequently, the Union filed charges with the NLRB,
Case 15-CA-10205, contending Respondent had unilater-
ally terminated the collective-bargaining agreement and
terminated its employees On January 28 the Union
wrote Respondent advising that the collective-bargaining
agreement "is still in effect" On February 3, the Union
wrote Respondent twice In one letter, the Union asked
for documents regarding the sale of Respondent's assets
In the other letter the Union discussed its concern, and
Respondent's agreement to remedy the omission of the
successor and assigns clause froin the printed copy of
their collective-bargaining agreement
None' of the _Union's letters includes a request to bar-
gain over the effects of Respondent's January 15 decision
to cease operations
On February 5, Respondent's attorney wrote the
Union Among other things, the letter contains the fol-
lowing statement
As previously stated in the company's January
16, 1987 letter, it is willing to negotiate with the
union over the effects of its decision to cease busi-
ness operations
The above events raise questions regarding the allega-
tion of untimeliness In the first instance one must ques-
tion whether Respondent had an obligation to notify the
Union at a time before it made its decision to cease oper-
ations (see Chippewa Motor Freight, 261 NLRB 455
(1982), cited by Respondent, where the administrative
law judge found that the employer was not required to
notify the union before making the decision to close)
Secondly, did Respondent have an obligation to ensure
that the Union received notification prior to January 20
when it finally received Respondent's letter of January
16 See Signal Communications, 284 NLRB 423, 426 fn
11 (1987)
In general, when an employer decides to take
action which significantly impacts upon employees'
terms or conditions or tenure of employment, the
employer must afford the union an opportunity to
bargain in advance of the actual implementation of
the employer's decision See NLRB v Katz, 369
U S 736, 747 (1962), Machinists v Northeast Airlines,
473 F 2d 549, 557 (1st Cir 1982), Ladies' Garment
Workers v NLRB, 463 F 2d 907, 919 (D C Cir
1972) In cases dealing with an employer's duty to
bargain with a union about the effects on employees
of the employer's decision to close its business, the
Board has found a violation of Sec 8(a)(5) of the
Act even though the employer, after the plant has
been closed and the employees terminated, invites
the union to bargain over the effects of the closure
Transmarme Navigation Corp, 170 NLRB 389
(1968), Thompson Transport Co, 184 NLRB 38
(1970), National Terminal Baking Corp, 190 NLRB
465, 466 (1971) As the Board explained in Stone &
Thomas, 221 NLRB 573, 576 (1975), "meaningful
bargaining over effects can only occur prior to the
employer's making and acting upon its decision"
See also First National Maintenance Corp v NLRB,
452 US 666, 681-682 , (1981) ("Under Section
8(a)(5), bargaining over the effects of a decision
must be conducted in a meaningful manner and at a
meaningful time ") In any event, here, after Re-
spondent SCI went out of business and terminated
the unit employees, even then it did not invite the
Union to bargain over the effects of that decision
on the terminated unit employees Nor does the
record reveal, or Respondent SCI contend, that this
is a case in which the need for imperative action
made it impossible for SCI to notify the Union
about its decision prior to its implementation
Rather the record reveals that SCI made its deci-
sion to cease doing business in late September 1985,
approximately 3 weeks prior to its implementation
Here, record evidence shows that Respondent could
have notified the Union of its decision on January 15 In-
stead of phoning the pnion on January 15, Respondent
wrote the Union on January 16, and the letter did not
arrive until January 20
Moreover, the record shows it is highly probable that
at least six unit employees were harmed by Respondent's
delay in reaching the Union William Cowley admitted
that when the Union called and complained on January
20 about Respondent's use of supervisors to perform unit
work, Cowley recalled six unit employees who worked
until January 31
There was no evidence offered to show that if given
the opportunity to bargain on January 15, or even on
January 16, the Union would not have had the same suc-
cess it experienced on January 20 In other words, if the
Union had bargained on January 16 it may have persuad-
ed Respondent to employ bargaining unit employees to
776 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
reduce the inventory for the entire remaining period of
operations, i e, from January 16-31, 1987
Instead, Respondent operated from January 16-20
with supervisory personnel No bargaining unit employ-
ees were used during that period of time
Respondent has a duty to notify the Union in a timely
fashion in order to give the Union an opportunity to bar-
gain about effects Emsing's Supermarket, 284 NLRB 302
(1987), cf Chippewa Motor Freight, supra, which was
cited by Respondent in its brief, where Administrative
Law Judge Almira Stevenson found that an employer is
not required to give notice of closing before making the
decision to close
Granted the evidence here does not support a finding
as in Kirkwood Fabricators, 285 NLRB 33 (1987), that the
employer deliberately withheld information from the
union Nevertheless, the Respondent, by failing to take
steps to inform the Union at the earliest possible
moment, deprived the Union of an opportunity to bar-
gain over effects
The Union did, to a degree, engage in successful ef-
fects bargaining on January 20 when Chapa persuaded
Respondent to use unit employees rather than supervi-
sors, to complete the remaining unit work Cf Inland
Steel Container Co, 275 NLRB 929 (1985), where, in a
concurring opinion Board Member Dennis contends that
a union may waive its right to bargain if it fails to act
with due diligence in requesting bargaining In the in-
stant case the Union acted promptly after receiving
notice
In view of the above, I find that Respondent failed to
give timely notice Respondent was obligated to notify
the Union of its decision to cease business in order to
afford the Union an opportunity to engage in effects bar-
gaining Respondent, by mailing the notice, ran the risk
of the notice being delayed Here, the Union, and the
employees, were harmed by that delay
General Counsel contended that Respondent engaged
in violative conduct by fading to inform the Union that
it continued to perform work necessary to close down its
operations until January 31—rather than on January 16
as shown in Respondent's January 16 letter
The record does not support General Counsel in that
regard As mentioned above, the Union, through Ron
Chaps, phoned Respondent on January 20 and com-
plained about Respondent's use of nonunit employees
Respondent was using supervisory personnel Because of
the Union's January 20 complaint, Respondent changed
its operations by recalling six unit employees to perform
the remaining unit work It appears from the above that
the Union did have notice that Respondent was operat-
ing, albeit with nonumt employees, after January 16 Be-
cause of the Union's action, Respondent continued its op-
erations after January 20 with unit employees
In view of the above, I do not find support in the
record for General Counsel's contention that the Union
did not have notice that operations continued after Janu-
ary 16 Despite the absence of evidence showing specific
notice from Respondent, the record illustrated that the
Union was aware that Respondent continued a limited
operation after January 16
In that regard, see Hawthorn Mellody, Inc , 275 NLRB
339, 341 (1985)
'While the Respondent may not have given
formal notice to Local 336, it is clear from the
record that Local 336 had substantial information
from which it must inevitably have been aware of
the Respondent's intentions
I find that the record shows that the Union did have
knowledge of Respondent's continued operation after
January 20, 1987
Unilateral Change
In its answer and in stipulations, Respondent admitted
allegations that it unilaterally discontinued medical insur-
ance benefits provisions of its collective-bargaining
agreement with the Union, since on or about December
31, 1986
Findings
Respondent pointed out on the record that since July
1987 it has offered to the Regional Office of the NLRB
that it would pay all substantiated and verified claims for
medical benefits (which would have been paid under the
medical benefits provisions of the collective-bargaining
contract)
In view of Respondent's admissions, I find that Re-
spondent unilaterally discontinued medical insurance pro-
visions of its outstanding collective-bargaining contract
around December 31, 1986 That conduct violates Sec-
tions 8(a)(1) and (5) and 8(d) of the Act Kal Kan Foods,
288 NLRB 590 (1988), cf Petroleum Maintenance Co,
290 NLRB 462 (1988), and Geo C Christopher & Son,
290 NLRB 472 (1988), where the Board found unilateral
changes constituted a violation even though the contract
had expired, and NLRB v McAllister Bros, 819 F 2d 439
(4th Cir 1987), where the court upheld a finding that an
alter ego employer violated the Act by making unilateral
changes
CONCLUSIONS OF LAW
,
1 John R Coley and Bro , Inc is an employer en-
gaged in commerce within the meaning of Section 2(6)
and (7) of the Act
2 Industrial Union of Marine & Shipbuilding workers
of America, Local 18 is a labor organization within the
meaning of Section 2(5) of the Act
3 The Union has been at times material herein, the ex-
clusive representative for the purposes of collective bar-
gaining of the following employees
All production and maintenance employees, exclud-
ing all office and clerical employees and all supervi-
sory employees as defined in the Act
4 Respondent, by failing to timely notify the Union of
its decision to cease operations and by unilaterally dis-
continuing provisions of a current collective-bargaining
contract by canceling medical insurance benefits, has vio-
lated Sections 8(a)(5) and (1) and 8(d) of the Act
JOHN R COWLEY & BRO , INC 777
5 The aforesaid unfair labor practices are unfair labor
practices affecting commerce within the meaning of Sec-
tion 2(6) and (7) of the Act
THE REMEDY
Having found that Respondent has engaged in unfair
labor practices, I shall recommend that it be ordered to
cease and desist therefrom and to take certain affirmative
action designed to effectuate the policies of the Act As I
have found that Respondent unlawfully discontinued
provisions of its collective-bargaining agreement with the
Union by canceling its medical insurance benefits, and
that Respondent unlawfully delayed notice of its decision
to cease operations from January 15 to 20, 1987, and that
Respondent's unlawful action may have resulted in unit
employees being deprived of medical insurance benefits,
and being depnved of the opportunity to perform bar-
gaining unit work until January 20, 1987, I shall recom-
mend that Respondent be ordered to make whole em-
ployees injured by its unlawful conduct, including paying
those unit employees deprived of medical benefits which
would have been paid under the canceled medical insur-
ance benefits, and paying those unit employees deprived
of employment from January 15 until the Union received
notice that Respondent was ceasing operations, on Janu-
ary 20, 1987 Transmarine Navigation Corp, 152 NLRB
998 (1965), and 170 NLRB 389 (1968) Backpay shall be
computed in the manner descnbed in F W Woolworth
Co, 90 NLRB 289 (1950), with interest, as computed in
New Horizons for the Retarded, 283 NLRB 1173 (1987) 1
[Recommended Order omitted from publication ]
' Under New Horizons, Interest is computed at the "short-term Federal
rate" for the underpayment of taxes as set out in the 1986 amendment to
26 U S C § 6621