M & H Machine Co., Inc.

National Labor Relations Board - Board Decisions

Jul 31, 1979

243 N.L.R.B. 817 (N.L.R.B. 1979)

M & H MA(CHINE CO.. INC.
M & H Machine Co., Inc. and Truckdrivers Local 649,
affiliated with International Brotherhood of Team-
sters, Chauffeurs, Warehousemen and Helpers of
America. Case 3 CA-8303
July 30. 1979
DECISION AND ORDER
BY CHAIRMAN FANNING ANI) MEMBERS PENIEI I)
ANI) TRtISI)AI.E
On May 11, 1979, Administrative Law Judge
Abraham Frank issued the attached Decision in this
proceeding. Thereafter, Respondent filed exceptions
and a supporting brief.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, that Na-
tional Labor Relations Board has delegated its au-
thority in this proceeding to a three-member panel.
The Board has considered the record and the at-
tached Decision in light of the exceptions and brief
and has decided to affirm the rulings, findings,' and
conclusions2 of the Administrative Law Judge and to
adopt his recommended Order.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor Rela-
tions Board adopts as its Order the recommended Or-
der of the Administrative Law Judge and hereby or-
-ders that the Respondent, M & H Machine Co.. Inc.,
New York, its officers, agents, successors, and assigns.
shall take the action set forth in the said recommend-
ed Order.
I The Administrative Law Judge found that Respondent paid Mazcon or
its equipment and machinery on October 26. 1977. However, from the testi-
mony of Ralph Hickman, Respondent's co-owner, it appears that Respon-
dent paid for this equipment and machinery several days earlier. on October
22. This correction does not in any way affect our determination of the issues
presented.
2 In the absence of exceptions thereto. Member Penello finds it unneces-
sary to determine whether the Administrative Law Judge correctly found
that Respondent did not violate Sec. 8(a)(5) and (I) by refusing to make
payments on behalf of the employees to the New York State Teamsters
insurance fund without bargaining with the Union. See his partial dissent in
Spruce Up Corporation. 209 NLRB 194 (1974).
DECISION
ABRAHAM FRANK, Administrative Law Judge: The
charge in this case was filed on January 2, 1978. and the
complaint, as amended, alleging a violation of Section
8(a)(5) of the National Labor Relations Act, as amended,
issued on February 28. 1978. The hearing was held on July
17, 1978, at Olean, New York. All briefs filed have been
duly considered.
At issue in this case are questions whether Respondent.
M & H Machine Co.. Inc., as a successor employer. vio-
lated Section 8(a)(5) of the Act by: (I ) refusing to recognize
and bargain with the Charging Party. Truckdrivers Local
649. affiliated with the International Brotherhood of Team-
sters, Chauffeurs. Warehousemen and Helpers of America.
hereinafter called the Union: (2) discharging three employ-
ees without bargaining with the Union: and (3) refusing to
make payments to the New York State Teamsters insur-
ance.
IINI)IN(;S O()I FA('I AND CON(I.tSIO)NS ()F LA"3
A. Preliominary Findings and ('oncIlusions
The Respondent, a New York corporation, is engaged in
the business of operating a machine shop at its place of'
business in Olean. New York. Respondent admits, and I
find, that it is engaged in commerce within the meaning of
Section 2(2). (6). and (7) of the Act.
The Union is a labor organization within the meaning of
Section 2(5) of the Act.
B. 7The Facis
Respondent is owned by Ralph E. Hickman. its pres-
ident. and his associate, Eugene McManus. Hickman. a
manufacturer's agent doing business in western New York
State and Ohio. entered into negotiations with Milo J.
Mazza. president of Respondent's predecessor. Mazcon
Machine & Tool Inc. (Mazcon), sometime prior to August
8, 1977.' for the purpose of acquiring the latter's machine
shop, building, equipment. and grounds.
On October 22 Hickman entered into an oral lease with
Mazcon obr the real estate which was purchased by Re-
spondent about I month later. On October 26 Hickman
paid Mazcon for the equipment and machinery in the ma-
chine shop. On that date Mazcon ceased operations and
terminated the employment of its six employees.
Respondent's purchase included only Mazcon's physical
assets, comprised of the land and heavy equipment. Re-
spondent did not purchase Mazcon's trade name, inventory
of materials, accounts receivable, work in progress, and ac-
counts payable.
On October 26, when Mazcon ceased operations. Re-
spondent began preparations to operate the machine shop
in its own name. James Dougherty. Mazcon's former man-
ager, became Respondent's superintendent.
Hickman instructed Dougherty to hire several of the em-
ployees to move in new machinery and rearrange equip-
ment in the shop. Dougherty. in fact. told the employees
that the Company was changing hands and that all but
three of the employees were being laid off: that the work
would be roughly the same: and that all the employees
could come in on October 28, a Friday. and apply for jobs
with the new Company. Three of the employees were em-
ployed on a temporary basis for the remainder of the week.
All six employees filled ut applications and were inter-
All dates are in 1977 unless otherwise indicated
243 NLRB No. 147
817
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
viewed by Hickman within the next few days. By October
31 all six employees were hired.
In interviewing the employees Hickman told them their
wages would remain the same, but that he could not afford
at that time other benefits such as health, welfare, and pen-
sion plans. In answer to a question by one of the employees
as to whether they would have a union, Hickman re-
sponded that he would like to not have a union, that he did
not want to have to spend time on union matters. Hickman
was aware, at that time, that the Union and Mazcon had
executed a contract. In fact, at all material times to October
26, 1977, Mazcon had recognized the Union as the collec-
tive-bargaining representative of its employees in the ma-
chine shop and had executed a contract with the Union on
or about July 19, 1976, effective until July 19, 1978. The
contract contained a union-shop provision.
Respondent paid Mazcon about $30,000 for the machin-
ery in the machine shop. In addition, Respondent pur-
chased new machinery and tools at a cost of $15.000 to
$23,000. The new machinery included bearings, tire molds.
a jig bore machine, a hydraulic tracer mill, drill presses, and
miscellaneous equipment and cutting tools. Equipment pur-
chased from Mazcon was reworked for Respondent's busi-
ness needs. During Respondent's initial 3-day period of oc-
cupancy the machine shop was painted and cleaned, junk
was removed, equipment was rearranged, and a lunch area
was established.
Respondent performs machine work for Dresser Indus-
tries, Mazcon's largest customer, and for Pierce Company.
another customer of Mazcon's. Respondent performs but
discourages off-the-street work theretofore performed by
Mazcon. Respondent also completed Mazcon's unfinished
work in the shop on a subcontract basis. However, from
October 31 Respondent acquired new business for the ma-
chine shop not previously performed by Mazcon, primarily
through a contract with Strong Tool Company of Cleve-
land, Ohio. Hickman estimated that 50 to 60 percent of his
business on and after October 31 came from new customers
located outside the Olean, New York, area.
Hickman testified that about 75 to 80 percent of Respon-
dent's work is work of a close tolerance nature; that he
regarded a tolerance of one-half-thousandths to be a close
tolerance. Lawrence Mendell, Jr., a lathe operator, testified
that when employed by Mazcon he had performed close
tolerance work of one-half-thousandths tolerance: that he
had built aluminum lavees for Dresser Industries of 2 to 10
thousandths tolerance and sometimes one-half-thou-
sandths.
On or about November 3 the Union requested that Re-
spondent bargain collectively with respect to rates of pay,
wages, hours of employment, and other terms and condi-
tions of employment. On or about the same date Respon-
dent refused to recognize and bargain with the Union. On
or about the same date Respondent refused to make pay-
ments to the New York State Teamsters insurance.
On November 10 Mendell, Terry L. Bentley, and Robert
J. Babb were laid off by Respondent without bargaining
with the Union. Dougherty told the employees they were
laid off for lack of work and would probably be recalled in
several weeks when Respondent had more work.
During the period of their employment by Respondent
Mendell and Bentley performed the same type of work they
had performed for Mazcon, which work had been subcon-
tracted by Mazcon to Respondent.
At the time of the hearing Respondent employed two
employees but none of the original six employees.
The appropriate unit is:
All machinists, welders, and maintenance employees
employed by the Respondent at its Dugan Road,
Olean, New York location; excluding all office clerical
employees, guards and supervisors as defined in the
Act.
Analysis and Final Conclusions
Under established law an employer is a successor to its
predecessor where the former's business operations are, as a
matter of industrial reality, a continuation of the employing
industry. See John Wiley & Sons, Inc. v. David Livingston,
376 U.S. 543, 551 (1964). N.L.R.B. v. Burns International
Security Services, Inc., 406 U.S. 272 (1972); Spruce Up Cor-
poration, 209 NLRB 194 (1974).
In the instant case Respondent purchased the physical
assets of Mazcon, comprised of machine shop equipment,
machinery. building. and land and entered into substan-
tially the same type of machine shop business with, at most,
a 5-day hiatus in operations, with the same supervision, the
same employees, and, in some instances, performing work
for the same customers.
I conclude. on the basis of the cases cited above, that
Respondent is a successor to Mazcon.
I find without merit Respondent's argument that a con-
trary result is warranted because it sought and acquired
new customers, bought new machinery, and performed
some machine shop work of a close tolerance. These differ-
ences do affect the basic character of the unit of employees
inherited by Respondent from Mazcon. See Spruce Up Cor-
poration. supra, Middleboro Fire Apparatus, Inc., 234 NLRB
888 (1978). enfd. 590 F.2d 4 (Ist Cir. 1978).
Moreover, having employed all of Mazcon's employees
on October 3 1, and all of such employees having been rep-
resented by the Union under a valid and then current col-
lective-bargaining agreement. there was, at least, a pre-
sumption of continuing majority status which Respondent
has failed to overcome.
I find, however, contrary to the General Counsel, that
Respondent did not violate the Act by refusing to make
payments to New York State Teamsters insurance, inferen-
tially a term of employment agreed to by Mazcon in its
contract with the Union.
While several of Mazcon's employees were hired for a
few days on October 26 on a temporary basis, the record is
clear that all six employees were required to apply to Hick-
man for jobs with Respondent. All of them did so on or
about October 28. They were interviewed by Hickman and
hired by him by October 31. In the interviews Hickman
told the employees that he could not afford health, welfare,
and pension benefits. He offered them the same wages they
had earned as Mazcon's employees. They accepted his
terms and went to work.
818
M & 11 MAtCIINE ('CO., INC
A successor employer has a lawful right to set the initial
terms and conditions of employment. See . .. R v .B. Burnv
International Securii, Services, supra. I lere Respondent did
not mislead the employees into believing that they would he
retained without change in their terms and conditions of
employment and did not forfeit its right to establish such
terms and conditions. See Spruce i;p ( orlorationl, slqra.
Charles Slilrbluck and Diane Starhu(tk d /b/a Sarco Ifarni'r
Muarket, 237 NLRB 373 (1978). upon which the General
Counsel relies, is inapposite. There, unlike here. respondent
began operations with a majority of employees of its prede-
cessor and thereafter changed terms and conditions of' em-
ployment.
On the basis of the foregoing I conclude that Respondent
violated Section 8(a)(5) and (1) of the Act by refusing to
recognize and bargain with the Union on and after Novem-
ber 3 as the exclusive bargaining representative of its ein-
ployees in the below-described appropriate unit:
All machinists, welders, and maintenance employees
employed by the Respondent at its Dugan Road,
Olean, New York, location: excluding all office clerical
employees, guards, and supervisors as defined in the
Act.
I conclude further that Respondent violated Section
8(a)(5) and (1) of the Act by laying off employees Terry I..
Bentley, Lawrence V. Mendell. Jr.. and Robert J. Bahb on
November 10 unilaterally and without bargaining with the
Union. The elimination of these employees from the bar-
gaining unit represented a loss of 50 percent of the employ-
ees in such unit, a major change in conditions of employ-
ment substantially affecting the composition of that unit.
The above unfair labor practices affect commerce within
the meaning of Section 2(6) and (7) of the Act.
Upon the basis of the foregoing findings of fact, conclu-
sions of law, and upon the entire record. and pursuant to
Section 10(c) of the Act. I hereby issue the following recom-
mended:
ORDER2
The Respondent, M & H Machine Co.. Inc., Olean, New
York, its officers, agents, successors, and assigns, shall:
1. Cease and desist from:
(a) Refusing to bargain collectively with respect to
wages, hours, and other terms and conditions of employ-
ment with Truckdrivers Local 649. affiliated with Interna-
tional Brotherhood of Teamsters, Chauffeurs, Warehouse-
men and Helpers of America, as the exclusive bargaining
representative of its employees in the following appropriate
unit:
All machinists, welders, and maintenance employees
employed by the employer at its Dugan Road, Olean,
2 In the event no exceptions are filed as provided by Sec. 102.46 of the
Rules and Regulations of the National Labor Relations Board. the findings.
conclusions, and recommended Order herein shall, as provided in Sec. 10248
of the Rules and Regulations, be adopted by the Board and become its
findings, conclusions. and Order, and all objections thereto shall he deemed
waived for all purposes.
Nev, York. location; excluding all office clerical em-
plvees,. guards and supervisors s defined in the Act.
(h) Discharging employees with a substantial impact
upon the composition of the above-described haraitining
unit without bargaining with the statutory representative of
its emplo ees.
(c) In any like or related manner interfering with, re-
straining, or coercing employees in the exercise of the rights
guaranteed them in Section 7 of the Act.
2. lake the fllowing affirmative action nccessar t ef-
fectuate the policies of the Act:
(a) Ipon request, bargain with the above-named I tion
as the exclusive bargaining representative of the employees
in the unit described ahove with respect to) ages, hours,
and other terms and conditions of employment and, if an
agreement is reached. embody such agreement in a signed
contract.
(hb) Offer to Lawrence Mendell. Jr.. erry .. Bentle'.
and Robert J. Babb immediate and full reinstatement to
their former positions i available or, if those positions no
longer exist. to substantially equivalent positions without
prejudice to their seniority and other rights and privileges
and make them whole for the loss of earnings suffered by
them as a result of Respondent's unfair labor practices with
interest in accordance with the formulas set forth in I' I'.
11oos/iorth Compatnv, 90 NI.RB 289 (1950): F'lorida Sel
Corporation, 231 NLRB 651 (1977): see. generally, aiv
Plumbhi,tg tealtig ('o., 138 N RB 716 (1962).
(Cl Preserve and upon request. make available to the
Board or its agents. for examination and copying, all pay-
roll records, social security payment records timnecards.
personnel records and reports. and all other records neces-
sary to analyze the amount of backpay due under the terms
of this Order.
(d) Post at its place of business in Olean, New York.
copies of the attached notice marked "Appendix." ' Copies
of said notice, on forms provided bh the Regional Director
for Region 3. after being duly signed by an authorized rep-
resentative of Respondent. shall be posted by Respondent
immediately upon receipt thereof, and be maintained by it
for 60 consecutive days thereafter, in conspicuous places,
including all places where notices to employees are custom-
arily posted. Reasonable steps shall be taken by Respon-
dent to insure that said notice is not altered. defaced, or
covered by any other material.
(e) Notify the Regional Director for Region 3 in writing,
within 20 days from the date of this Order, what steps Re-
spondent has taken to comply herewith.
Ir is FURtIHER ORDERED that the allegation of the com-
plaint that Respondent violated the Act by refusing to con-
tribute to the New York State Teamsters insurance be, and
it hereby is, dismissed.
'In the event that the 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 t nited States Court of ppeals Enforcing an Order of the National
Labor Relations Board"
)DE(ISIONS OF NATIONAI. .ABOR RELATIONS BOARD
APPENDIX
No) l (l To EM.%IOYi - Fs
PosIIID BY ORI)ER ()F 1il
NAII()NAI. LABOR RI.AII()NS BOARI)
An Agency of the United States Government
WE wii.L NOI refuse to bargain collectively with re-
spect to wages, hours, and other terms and conditions
of employment with Truckdrivers Local 649. affiliated
with International Brotherhood of Teamsters. Chauf-
feurs, Warehousemen and Helpers of America, as the
exclusive bargaining representative of the employees in
the bargaining unit described below.
We Wl.ll. NOT discharge our employees with a sub-
stantial impact upon the composition of the below-de-
scribed bargaining unit without bargaining with the
statutory representative of our employees.
WE wn.i. NOT in any like or related manner interfere
with, restrain, or coerce our employees in the exercise
of the rights guaranteed them in Section 7 of the Act.
WE WII.l, upon request, bargain with the above-
named Union as the exclusive bargaining representa-
tive of our employees in the appropriate unit described
below with respect to wages, hours, and other terms
and conditions of employment, and, if' an agreement is
reached, embody such agreement in a signed contract.
The bargaining unit is:
All machinists, welders and maintenance employees
employed by the Employer at its Dugan Road.
Olean. New York, location; excluding all office cleri-
cal employees, guards, and supervisors as defined in
the Act.
Wit wlll offer to Lawrence Mendell. Jr., Terry L.
Bentley, and Robert J. Babb immediate and full rein-
statement to their fbrmer positions, if available, or, if
those positions no longer exist, to substantially equiv-
alent positions without prejudice to their seniority and
other rights and privileges and WE wILL make them
whole tbr the loss of earnings suffered by them as a
result of our unfair labor practices, with interest.
M & H MA('IIINI CO., INC.
820