Mac-It Corporation

National Labor Relations Board - Administrative Judge Opinions

Nov 16, 2006

04-CA-034475 (N.L.R.B. Nov. 16, 2006)

JD–80–06
Lancaster, PA

UNITED STATES OF AMERICA
BEFORE THE NATIONAL LABOR RELATIONS BOARD
DIVISION OF JUDGES

MAC–IT CORPORATION

and Case 4–CA–34475

UNITED STEEL, PAPER AND FORESTRY,
RUBBER, MANUFACTURING, ENERGY,
ALLIED INDUSTRIAL AND SERVICE
WORKERS INTERNATIONAL UNION,
LOCAL NO. 1033, AFL–CIO

Bruce G. Conley, Esq., for the General Counsel.
Michael W. McGurrin, Esq., of Philadelphia, PA, for
the Charging Party.
Thomas R. Davies, Esq., of Lancaster, PA, for
Respondent.

DECISION

Statement of the Case

RICHARD A. SCULLY, Administrative Law Judge. Upon a charge and an amended
charge filed by United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied
Industrial and Service Workers International Union, Local 1035, AFL-CIO (the Union), on
February 21 and March 26, 2006, respectively, the Regional Director for Region 4, National
Labor Relations Board (the Board) issued a complaint on May 30, 2006, alleging that MAC-IT
Corporation (Respondent) had committed certain violations of Section 8(a)(5), (3), and (1) of the
National Labor Relations Act (the Act). The Respondent filed a timely answer denying that it
had committed any violation of the Act.

A hearing was held in Philadelphia, Pennsylvania, on August 10, 2006, at which all
parties were given a full opportunity to examine and cross-examine witnesses and to present
other evidence and argument. Briefs submitted on behalf of the parties have been given due
consideration.1 Upon the entire record and from my observation of the demeanor of the
witnesses, I make the following

Findings of Fact

I. Jurisdiction

At all times material, the Respondent has been a Pennsylvania corporation with a facility
in Lancaster, Pennsylvania, engaged in the manufacture of special threaded fasteners mainly

1 The unopposed motion by counsel for the General Counsel to correct certain errors in the
hearing transcript is hereby granted.

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used in the cutting tool industry. During the 12-month period ending May 30, 2006, the
Respondent, in the conduct of its business operations, purchased and received at its Lancaster
facility goods valued in excess of $50,000 directly from points outside the Commonwealth of
Pennsylvania. The Respondent admits and I find that it is an employer engaged in commerce
within the meaning of Section 2(2), (6), and (7) of the Act and that the Union is a labor
organization within the meaning of Section 2(5) of the Act.

II. Alleged Unfair Labor Practices

A. Section 8(a)(3) and (1) Allegations

For several years the Respondent’s production and maintenance employees have been
represented by the Union and the parties have entered into a number of collective bargaining
agreements, the most recent of which expired on September 18, 2005.2 For some time prior to
2005, the Respondent had subcontracted with an entity owned by Jerry Faber, located about 35
miles away from its plant, to produce some parts used in the medical field. These parts differ
from those produced at the Lancaster facility in that they are not fasteners and are produced
using computer numerical controlled (CNC) machines. This production is referred to as “Faber
work.” In early 2005, the Respondent informed the Union that it was merging with Faber, that
the CNC machines being used for the parts manufactured by Faber would be moved into its
Lancaster facility, and that the Faber work would become part of that done by the bargaining
unit. In February 2005, the parties negotiated an amendment to the collective bargaining
agreement which included the Faber work and set up a new job classifications and wage rates
for that work.3

Following the expiration of the collective bargaining agreement, on September 19, the
Union began an economic strike. On October 11, the Union hand-delivered a letter to the
Respondent which contained an unconditional offer to return to work on behalf of the
approximately 12 employees who were still on strike. On the morning of October 12, those
employees reported for work but were informed by general manager James Frankhouser that
there was no work available and they should leave the premises. On October 13, the
Respondent sent the Union a letter stating that it would call two of the striking employees back
to work. On the following day those employees, Karen Gleason and Scott Bridges, were
recalled. Thereafter, two other striking employees, Patricia Reese and Raymond Snyder, were
recalled. Eight other strikers have not been recalled.

Nicole Geltz had worked in the office since January 2003, performing receptionist,
secretarial, and other duties. Her work hours were 8 a.m. to 4 p.m. During the strike, she
began doing production work, operating the MSO machine in the secondary operations
department in the shop. Geltz testified that she had previously expressed an interest in working
in the shop. Once the strike began she saw there was a need for people and she offered to
work in the shop. She was trained to operate the MSO machine which she had not previously
done. She subsequently was trained to operate a Davenport machine in the primary
department which involved an increase in her wage rate. During the strike, Geltz continued to
perform her office duties and did so until January 2006 when a new part-time employee was
hired to work as a receptionist and performed some but not all of those duties. Most days Geltz
worked a regular shift in the shop from 6 a.m. to 2:30 p.m. and then worked in the office until
around 4 or 5 p.m., depending on what needed to be done. She worked 40 hours a week in the

2 Hereinafter, all dates are in 2005 unless otherwise indicated.
3 Jerry Faber is now a partner in the Respondent and oversees its CNC operations.

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shop except for some times when she was working in the secondary department and there was
no work for her to do there.

The complaint alleges that the Respondent violated Section 8(a)(3) and (1) of the Act by
retaining Geltz to perform bargaining unit work, after the strike ended and striking employees
had made an unconditional offer to return to work, rather than recalling a striker. The
Respondent contends that Geltz was a permanent replacement for a striking employee and that
it lawfully retained her as a production worker after the strike ended.

Analysis and Conclusions

Once employees who have engaged in an economic strike make an unconditional offer
to return to work, they are entitled to immediate reinstatement unless the employer has a
legitimate and substantial business justification for not doing so. NLRB v. Fleetwood Trailer
Co., 389 U.S. 375, 378 (1967). Permanent replacement of economic strikers in order to
continue business operations is recognized as a legitimate and substantial business justification
for refusing to reinstate former strikers. NLRB v. Mackay Radio & Telegraph Co., 304 U.S. 333
(1938). The burden is on the employer to establish that the replacements are permanent.
Capehorn Industry, 336 NLRB 364, 365 (2001); O.E. Butterfield, Inc. 319 NLRB 1004, 1006
(1995). In order to carry this burden, the employer must establish that there was a mutual
understanding between it and the replacements that they were permanent. It is not enough that
the employer intended that the replacement be permanent. The replacements must have been
hired in a manner that would show that they and the employer regarded them as having
received their jobs on a permanent basis. Consolidated Delivery & Logistics, 337 NLRB 524,
526 (2002); Target Rock Corp., 324 NLRB 373 (1997).

Geltz’s credible testimony was that she had an interest in working in the shop but no
opportunity to do so prior to the strike. Once the strike began, she saw that the Respondent
needed assistance in the shop and she approached Frankhouser and volunteered to work
there. After a week or two working on the MSO machine in the shop, Geltz spoke to
Frankhouser and company president Michael Stillman about making her move to the shop
permanent. She said that she was willing and wanted to stay out in the shop. They assured her
that it was not a problem and she understood that her position there was permanent. She
offered to continue doing work in the office until a replacement was hired and understood that
once someone was hired going back to the office would not be an option. However, her staying
in the shop was not conditioned on the company finding a replacement to do her office work and
she was not involved in finding or training her replacement.

Although counsel for the General Counsel and the Charging Party argue that Geltz’s
testimony about her conversations with Frankhouser and Stillman was too vague and lacking in
detail to be credited, I do not agree. Having observed her demeanor, I found her to be a
credible witness who answered questions in a straight-forward manner without any hesitancy or
dissembling and whose testimony did not appear rehearsed. While she was unable to give
specific dates on which her conversations with management took place, her testimony about
what was said was specific. She testified that she told Stillman she “wanted to stay out there
and continue working full time in the shop” and that he “okayed it.” He assured her that he was
going to keep her in the shop on a permanent basis regardless of the outcome of the strike or
negotiations.

Frankhouser testified that a month or two before the strike he had a conversation with
Geltz in which she expressed an interest in running machines in the shop. After the strike
began, she volunteered to do so. After she had worked in the shop about a week or two, Geltz

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told him that she liked running the machine and that she wanted to stay out in the shop.
Frankhouser told her it was fine with him and from that point on he considered her a permanent
shop worker. I found Frankhouser to be a credible witness and his testimony corroborated that
of Geltz.4

Stillman testified that months before the strike began, Frankhouser mentioned to him
that Geltz was interested in working in the shop if there ever was an opportunity. On the second
day of the strike she began working in the shop. A day or two later, Stillman asked Geltz how
she liked the work and she responded that she loved it and would like to stay in the shop.
During the last week of September, Frankhouser informed him that Geltz wanted to stay in the
shop and a day later Geltz came into his office and told him she wanted to work in the shop full
time and not return to the office. Stillman told her that was “okay.” Stillman also testified that
the MSO machine Geltz operated when she began working in the shop did not require any
special skill, that it takes at most about a half hour of training to operate it, and that once trained
it makes no difference whether the operator has run the machine for a week or many years.

Stillman’s testimony about his conversations with Frankhouser and Geltz about her
taking a permanent position in the shop was credible, detailed, and specific. I find that the
credible and mutually corroborative testimony of Stillman, Frankhouser, and Geltz establishes
that Geltz and the employer had a mutual understanding, no later than the last week of
September, that her position as a production worker in the shop was permanent. I also find that
none of the factors cited by counsel for the General Counsel and the Charging Party as
evidence of “temporary” replacement status, taken alone or together, outweigh or cast doubt on
that testimony.

The Respondent did not attempt to fill Geltz’s position in the office until it placed an ad
for a receptionist in December and hired a part time employee in early January 2006. They
argue that where an employee is transferred from another department, that person is not
permanent until the former position is filled, citing, H & F Binch Co., 188 NLRB 720 (1971), enfd.
as modified 456 F.2d 357 (2nd Cir. 1972). Stillman credibly testified that once Geltz moved to
the shop her former office duties were divided up among the office personnel, that the office
position involved a lot of training, and that they did not have time to advertise, interview, and
train a new employee until the end of the year when business was slow. Moreover, the
evidence establishes that Geltz’s move to the shop was not in the nature of a transfer initiated
by the Respondent but resulted from her voluntary request, following up on her previously
expressed interest in working there. As did the Second Circuit in H & F Binch with respect to
two employees transferred from other departments, I find Geltz’s situation more resembles that
of a new hire and is distinguishable from that of employees transferred by an employer in order
to keep its machines running.

There is no documentary evidence memorializing Geltz’s move from the office to the
plant other than her timecards indicating the work she was performing. This, it is argued,
indicates that she was not a permanent replacement. In Capehorn Industry, the Board found
lack of such documentation coupled with vague testimony concerning the replacements’ status
was insufficient to establish that they were permanent. However, here, there is credible and
unambiguous testimony from both the employee, Geltz, and the managers, Frankhouser and
Stillman, that she was a permanent replacement. It is also argued that Geltz did not support the

4 Although counsel for the General Counsel and the Charging Party contend that
Frankhouser should not be credited, neither cross-examined him or provided any evidence that
casts any doubt on his veracity.

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Union and was unlikely to incur the burdens of being a bargaining unit employee. This is simply
speculation. She testified that her taking a position in the shop was not conditioned on her not
having to be in the bargaining unit and said: “As far as I knew I’d be in a permanent position. If
the Union came back in I would just deal with that issue and resolve that myself.” I find the fact
that Geltz’s timecards were handwritten for some weeks after she started in the shop and show
that on some days she started work in the office rather than the shop do not cast doubt on her
testimony concerning her understanding of her status. She made it clear that she normally did
office work after the shop hours ended but that on some days, if she ran out of work to do in the
shop, she went to the office to take care of what needed to be done or answer the telephone.
Finally, it is argued that there is evidence that the Respondent delayed and stymied the Union’s
attempts to inquire into the status of replacement employees, including Geltz. The Respondent
disputes this and in any event I find it casts no significant doubt on the clear record evidence
that before the offer to return to work was made the Respondent and Geltz had a mutual
understanding that she was a permanent replacement. Accordingly, I shall recommend that the
Section 8(a (3) allegations be dismissed.

B. Section 8(a)(5) and (1) Allegations

Jerry Markley is a former employee of the Respondent who retired several years ago but
continued to perform work for it (and some affiliated entities) as an independent contractor.
During and after ther strike, some of the work Markley has done for the Respondent has
involved operating CNC machines doing production work of the type known as Faber work. The
General Counsel asserts that this constituted subcontracting out bargaining unit work, that the
Respondent did not notify the Union and afford it an opportunity to bargain about this change in
operations before doing so, and that this unilateral change violated Section 8(a)(5) and (1) of
the Act. The Respondent contends that Markley had performed bargaining unit work prior to the
strike without objection by the Union and that the amount of bargaining unit work he has
performed since the strike is not sufficient to require notice and bargaining.

As noted above, when the Respondent merged with Faber in early 2005, it was agreed
that the Faber work, the production work done on the CNC machines, would be performed by
bargaining unit employees.5 The credible testimony of Keith Sterbeck, a former Union local
president, who had worked for the Respondent from January 1970 until he was permanently
replaced during the strike, establishes that, prior to the strike, Markley did some maintenance
work at the Respondent’s plant, such as, installing new windows, painting the building, and
doing some masonry work, but he did not do any production work, Faber or otherwise. Markley
did not do any maintenance work on the production machinery. That was handled by
bargaining unit employee Jim Boice or was outsourced. In August 2005, after hearing a rumor
that Markley was going to be doing some “deburring” work, Sterbeck spoke with Frankhouser
who said that the work had to get out and Stillman wanted Markley to do it. Sterbeck said that
this involved production work and he would file a grievance. Frankhouser later told him that the
company had decided that Markley would not be doing the deburring work and the matter was
settled. The Respondent’s records indicate that Markley did not perform any Faber production
work prior to the start of the strike. Markley was involved in moving the Faber equipment into
the Respondent’s plant and setting it up there in early 2005, but there is no evidence that he
ever did any production work on it. The Respondent did not notify the Union or offer to bargain
over its decision to assign Faber production work to Markley before it did so.

5 At that time, the Union agreed to permit a supervisor to do the set-up on the CNC
machines and that Jerry Faber’s father would be permitted to do 24 hours of Faber production
work per week, but he would not be a part of the bargaining unit.

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Analysis and Conclusions

It well-settled that an employer that decides to subcontract bargaining unit work must
give notice and the opportunity to bargain over that decision and its effects. Fibreboard Paper
Products Corp. v. NLRB, 379 U.S. 203 (1964). It is clear that subcontracting some Faber
production work to Markley did not involve a significant change in the Respondent’s enterprise,
but simply involved using an independent contractor instead of a bargaining unit employee to do
the same work under similar conditions of employment; consequently, its decision involved a
mandatory subject of bargaining which was amenable to the collective-bargaining process.
Acme Die Casting, 315 NLRB 202, 209 (1994); Torrington Industries, 307 NLRB 809 (1992).

The Respondent contends that the evidence shows that Markley and others who were
not in the unit had performed production work before the strike without objection by the Union.
There is evidence that some shipping work which constituted bargaining unit work was done by
non-unit employees, such as Geltz, before the strike but not production work. The one
exception, some Faber work performed by Jerry Faber’s father, a non-unit employee who was
permitted to do so for a limited number of hours per week, was negotiated and agreed upon as
a part of the collective bargaining process. I find that Stillman’s testimony that Markley might
have performed some Faber production work prior to the strike was merely conjecture and is
belied by the Respondent’s records and the credible testimony of Sterbeck. Contrary to the
Respondent’s assertion that the Union acquiesced in Markley doing some deburring work
before the strike, the evidence is that once it learned of the possibility that Markley might do
such work, the Union complained and threatened to file a grievance and the Respondent
abandoned the idea. Finally, there is no merit in the Respondent’s argument that the Faber
production work done by Markley was de minimis. The Respondent’s records show that
Markley has been paid for a substantial number of hours of such production work since the
strikers’ offer to return to work.

I find that the Respondent’s assignment of bargaining unit work, specifically, Faber
production work, to a subcontractor after October 11, 2005, without giving the Union notice and
the opportunity to bargain, constituted a unilateral change in the terms and conditions of
employment and violated Section 8(a)(5) and (1) of the Act.

Conclusions of Law

1. The Respondent, MAC-IT Corporation, is an employer engaged in commerce within
the meaning of Section 2(2), (6), and (7) of the Act.

2. The Union is a labor organization within the meaning of Section 2(5) of the Act.

3. All full and regular part-time production and maintenance employees employed by the
Employer at its 275 East Liberty Street, Lancaster, Pennsylvania facility and excluding all
technical and professional employees, management employees, sales employees, guards and
supervisors as defined in the Act constitute a unit appropriate for collective bargaining within the
meaning of Section 9(b) of the Act.

4. Respondent violated Section 8(a)(5) and (1) of the Act by unilaterally assigning
bargaining unit production work to an independent contractor without prior notice and affording
the Union an opportunity to bargain concerning such subcontracting and its effects.

5. The foregoing unfair labor practices are unfair labor practices affecting commerce

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within the meaning of Section 2(6) and (7) of the Act.

6. Respondent did not engage in the unfair labor practices alleged in the complaint not
specifically found herein.

Remedy

Having found that the Respondent has engaged in certain unfair labor practices, I shall
recommend that it be ordered to cease and desist and to take certain affirmative action
designed to effectuate the policies of the Act.

Having found that the Respondent has made unilateral changes in employees’ terms
and conditions of employment, I shall recommend that it be ordered to restore the status quo
ante by assigning all Faber production work to bargaining unit employees. I shall also
recommend that the Respondent be ordered to make whole unit employees for any loss of
income or benefits resulting from the unlawful subcontracting of bargaining unit work, with
interest as computed in New Horizons for the Retarded, 283 NLRB 1173 (1987).

On these findings of fact and conclusions of law and on the entire record, I issue the
following recommended

ORDER6

The Respondent, MAC-IT Corporation, its officers, agents, successors, and assigns,
shall

1. Cease and desist from

(a) Unilaterally changing unit employees’ wages, hours or other terms and
conditions of employment without first giving the Union notice and an opportunity to bargain.

(b) In any other manner interfering with, restraining, or coercing employees in
the exercise of the rights guaranteed them by Section 7 of the Act.

2. Take the following affirmative action necessary to effectuate the policies of the Act.

(a) Upon request by the Union restore the status quo ante by assigning to unit
employees all Faber production work.

(b) Make whole any employees who have lost wages or benefits by reason of
Respondent’s unlawful subcontracting of unit work in the manner set forth in the remedy section
of the Decision.

(c) Preserve and, within 14 days of a request, or such additional time as the
Regional Director may allow for good cause shown, provide at a reasonable place designated
by the Board or its agents, all payroll records, social security payment records, timecards,

6 If no exceptions are filed as provided by Sec. 102.46 of the Board’s Rules and
Regulations, the findings, conclusions, and recommended Order shall, as provided in Sec.
102.48 of the Rules, be adopted by the Board and all objections to them shall be deemed
waived for all purposes.

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personnel records and reports, and all other records, including an electronic copy of such
records if stored in electronic form, necessary to analyze the amount of backpay due under the
terms of this Order.

(d) Within 14 days after service by the Region, post at its facility in Lancaster,
Pennsylvania, copies of the attached notice marked “Appendix.”7 Copies of the notice, on forms
provided by the Regional Director for Region 4, after being signed by the Respondent’s
authorized representative, shall be posted by the Respondent and maintained for 60
consecutive days in conspicuous places including all places where notices to employees are
customarily posted. Reasonable steps shall be taken by the Respondent to ensure that the
notices are not altered, defaced, or covered by any other material. In the event that, during the
pendency of these proceedings, the Respondent has gone out of business or closed the facility
involved in these proceedings, the Respondent shall duplicate and mail, at its own expense, a
copy of the notice to all current employees and former employees employed by the Respondent
at any time since October 12, 2005.

(e) Within 21 days after service by the Region, file with the Regional Director a
sworn certification of a responsible official on a form provided by the Region attesting to the
steps that the Respondent has taken to comply.

IT IS FURTHER ORDERED that the complaint is dismissed insofar as it alleges
violations of the Act not specifically found.

Dated, Washington, D.C. November 16, 2006

____________________
Richard A. Scully
Administrative Law Judge

7 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 National Labor Relations Board” shall read “Posted
Pursuant to a Judgment of the United States Court of Appeals Enforcing an Order of the
National Labor Relations Board.”
JD–80–06
Lancaster, PA
APPENDIX

NOTICE TO EMPLOYEES

Posted 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 Federal labor law and has
ordered us to post and obey this Notice.

FEDERAL LAW GIVES YOU THE RIGHT TO

Form, join, or assist a union
Choose representatives to bargain with us on your behalf
Act together with other employees for your benefit and protection
Choose not to engage in any of these protected activities

WE WILL NOT unilaterally change our employees’ wages, hours or other terms and conditions
of employment without first giving the Union notice and an opportunity to bargain.

WE WILL NOT in any like or related manner interfere with, restrain, or coerce you in the
exercise of the rights guaranteed you by Section 7 of the Act.

WE WILL upon request by the Union restore the status quo ante by assigning to bargaining unit
employees all Faber production work.

WE WILL make whole any employee who lost wages or other benefits as a result of our
unlawful subcontracting bargaining unit work, with interest.

MAC-IT CORPORATION
(Employer)

Dated By
(Representative) (Title)

The National Labor Relations Board is an independent Federal agency created in 1935 to enforce the National Labor
Relations Act. It conducts secret-ballot elections to determine whether employees want union representation and it
investigates and remedies unfair labor practices by employers and unions. To find out more about your rights under
the Act and how to file a charge or election petition, you may speak confidentially to any agent with the Board’s
Regional Office set forth below. You may also obtain information from the Board’s website: www.nlrb.gov.
615 Chestnut Street, One Independence Mall, 7th Floor
Philadelphia, Pennsylvania 19106-4404
Hours: 8:30 a.m. to 5 p.m.
215-597-7601.
THIS IS AN OFFICIAL NOTICE AND MUST NOT BE DEFACED BY ANYONE
THIS NOTICE MUST REMAIN POSTED FOR 60 CONSECUTIVE DAYS FROM THE DATE OF POSTING AND MUST
NOT BE ALTERED, DEFACED, OR COVERED BY ANY OTHER MATERIAL. ANY QUESTIONS CONCERNING THIS
NOTICE OR COMPLIANCE WITH ITS PROVISIONS MAY BE DIRECTED TO THE ABOVE REGIONAL OFFICE’S
COMPLIANCE OFFICER, 215-597-7643.

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