Martin Marietta Corp.

National Labor Relations Board - Board Decisions

Jun 22, 1966

159 N.L.R.B. 905 (N.L.R.B. 1966)

MARTIN 'MARIETTA CORPORATION 905
Martin Marietta Corporation , United Brick Division , and Acme
Brick Company and United Brick and Clay Workers of Amer-
ica, AFL-CIO, Local 566. Case 17-CA-212. June 2 1966
.. DECISION AND ORDER
On December 2, 1963, Trial Examiner George A. Downing issued
his Decision in the above-entitled proceeding, finding that the
Respondent, Acme Brick Company, hereinafter called Acme, 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 attached Trial Examiner's.
Decision. He further found that the Respondent, Martin Marietta
Corporation, hereinafter called Martin, had not engaged in certain
other unfair labor practices alleged in the complaint and recom-
mended that the complaint be dismissed as to it. Thereafter, the
General Counsel -and both Respondents filed exceptions-to the Deci-
sion with supporting briefs. I
Pursuant to, the provisions of Section 3 (b), of the National Labor
Relations Act; as amended, the National Labor Relations Board has
delegated ,its powers in connection with this case to a three-member
panel [Chairman McCulloch and Members Fanning and Zagoria].
The Board has reviewed the.rulings made by the Trial Examiner
at the hearing and finds that no prejudicial error,was committed.
The rulings are hereby affirmed: The Board has considered the
Trial Examiner's Decision, the exceptions and briefs, and the
entire record in this case, and hereby adopts the Trial Examiner's
findings, conclusions, and recommendations, as modified below. ,
We are adopting the Trial Examiner's conclusion that Acme vio-
lated Section 8(a) (5) of the Act. We date this violation from Feb-
ruary 1, 1963, at which time Acme, a, successor of Martin, assumed
possession of the Coffeyville plant.,
Acme was obligated under the Act to recognize and deal with the
Union as the representative of the employees at Coffeyville and to
take no action in derogation of the Union's representative status once
it began operating the plant. Clearly, however, it failed to honor
this obligation when it rejected the Union's request for recognition
and bargaining. It violated its bargaining duty in still another
respect. This was on February 1 and thereafter when it staffed
the plant-selecting, dismissing, and retaining employees-without
consultation with the Union and indisregard of,seniority rights of
'Cf Chemrock Corporation , 151 NLRB 1074; Maintenance . Incorporated , 148 NLRB
1299; RohZik, Inc., 145 NLRB 1236.
159 NLRB No. 59. ' '
906 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
the Coffeyville employees.2 We have noted heretofore that seniority
rights are matters which relate to "wages,-hours, and other terms
and conditions of employment" and therefore fall within the scope
of mandatory bargaining imposed by the Act.3 Seniority rights
acquired by employees are not necessarily annulled or obliterated
when the contract expires,' and the obligation to bargain with respect
thereto may continue beyond the contract term. We further believe,
in this connection, that seniority rights' are not vitiated simply by
the advent of another employer.5 We conclude, in the circumstances
in this case, that Acme, like Martin before it, was no more priv-
ileged to act unilaterally with respect to seniority rights of Coffey-
ville employees than it could, for example, unilaterally alter existing
wage rates. This unilateral disregard of seniority was in deroga-
tion of the Union's representative status. By such action and, of
course, by its outright refusal even to recognize the Union, Acme
violated Section 8 (a) (5) of the Act.
In our opinion, our colleague's conclusion that Martin was obli-
gated to bargain with the Union over the effects of the sale rests
upon an unwarranted assumption concerning the extent of Martin's
knowledge of Acme's plans and an erroneous conclusion that these
"known plans" resulted in an immediate adverse impact on unit
employees.
The record indicates that, with respect to Martin's knowledge of
Acme's operating intentions at Coffeyville, Martin's belief was at
best conjectural. Peirce, at the time general manager of Martin's
brick division, stated that while he was negotiating the sale with
Acme officials it was "suggested" to him on January 2, 1963, that the
plant might not be operated. This assertion, however, appears to be
no more than a reasonable assessment by Acme of the plant's eco-
nomic condition, a fact already well known and contractually con-
sidered by Martin and the Union, and, in our view, does not signal
the emergence of a bargaining obligation for Martin. Thus, the cur-
rent contract between Martin and the Union permitted Martin "to
determine the extent to which its property shall be operated or shut
down [or] to discontinue department in whole or in part . . . ."
This provision clearly appears to permit Martin to deal with the
economic fact of life that, as noted by Martin, "annual shut downs"
of the plant are the rule. Moreover, the record indicates that the
2Bethlehem Steel Company ( Shipbuilding Division ), 136 NLRB 1500, enfd in pertinent
part 320 F 2d 615 (C.A. 3).
3 Ibid. Cf. Shell Oil Company, 149 NLRB 283.
'Ibid. Cf. Orest Panza, at at. v. Armco Steel Corporation, 208 F. Supp . 50, affd 316
F.2d 69 (C A. 3)
e As noted by the Trial Examiner , all employees hired by Acme to continue operations at
the plant were former Martin employees in the Coffeyville unit. Capps, plant manager
under both Martin and Acme, was aware of the seniority system in effect at the plant.
MARTIN MARIETTA CORPORATION 907
plant's production indeed had been cut to one-half for about 7
months a year earlier, but thereafter was reactivated and operated
at capacity. Thus, Acme's mere mentioning to Martin that the for-
mer might not operate the plants after purchasing it, does not, in
our view, suffice to impose a bargaining obligation on Martin.
Nor does such a suggestion, as our colleague implies, itself create
the disadvantages which certain employees suffered because of the
change in ownership. More significantly, and in agreement with
the Trial Examiner, 'we believe that in the circumstances of the pres-
ent sale of a "going concern," it was Acme's failure to discuss with
the Union its staffing plans concerning Coffeyville unit employees,
including the effect to be given to seniority, which most critically
caused an adverse impact to fall upon the affected employees. It
may be that where a seller itself imminently plans on or has clear
knowledge of the dissolution of the employing entity, an obligation
to timely discuss matters flowing from such action exists.' But we
do not find that this is such a case.
Acme interviewed most of the 26 unit employees on January 31,
1963, for future employment at Coffeyville, and in fact hired 15 of
them. It also retained key managerial personnel to operate the
plant, complete orders previously placed with Martin, took new
orders, and purchased additional equipment to make its stock-on-
hand more salable. Thus, as the Trial Examiner found, and as our
colleague apparently accepts, Acme clearly was a successor employer
to Martin at the plant. Accordingly, we cannot agree with our
colleague's assertion that by finding Acme in violation of Section
8(a) (5) for not bargaining with the Union concerning seniority
rights of unit employees, we are holding thereby "that an employ-
,er's employees for bargaining, purposes include the whole class of
applicants for employment." More precisely, where, as here, only a
substitution of employers took place at the time of the sale and, at
least for a time the plant operated as a going concern, we conclude
that employees at the plant from whom Acme obtained its work
force were entitled to be represented by their union in the selection
process. As we have noted in a related context "[s]uch individuals
possess a substantial interest in the continuation of their existing
employee status," 8 and Acme.was not free to ignore their statutory
9 There is no other indication in the record that Martin had any knowledge of Acme's
Intentions to phase out the plant. Moreover, in this connection, Kiefer, division plant
manager for Acme, stated that the Coffeyville site possessed about 100 years' supply of
raw material and that it was at least possible to reactivate the plant although, at the
time of the hearing, Acme did not plan to do so.
7 Cf. Royal Plating And Polishing Co., Inc., 148 NLRB 545, 546. (See also Supplemental
Decision, upon remand , 152 NLRB 619.)
S Chemrock Corporation, supra. In the remaining six plants which formerly constituted
Martin's United Brick Division, and which comprise the remainder of the sale assets, Acme
has recognized the incumbent unions and has admitted that it is a successor employer at
those plants
908 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
representative in determining which employes were to retain their
jobs.
TI-ii REMEDY
In the particular circumstances of this case, we believe that the
remedial policies of the Act will be adequately effectuated by an
order which (1) directs Acme, in the event that it decides to resume
operations at Coffeyville," to bargain with the Union as the exclusive
representative of the employees with respect to terms and conditions
of employment at that plant, including the method, terms, and con-
ditions by which employees, including former Coffeyville employees,,
may obtain employment there, and (2) requires Acme to make
whole the Coffeyville employees for such losses as they may have
suffered by reason of its unilateral action taken in disregard of their
seniority rights. Responsibility for backpay herein shall not extend
beyond the date of Acme's shutdown of the Coffeyville plant. Back-
pay shall be computed on a quarterly basis in the manner set forth
in F. TV. TVool'vorth Company, 90 NLRB 289, Seven-Up Bottling
Company of MTlianzi, Inc., 344 U.S. 344; and with 6 percent interest
thereon as computed in Isis Plumbing di Heating Co., 138 NLRB
716.
Inasmuch as the posting of a notice as customarily required is not
feasible in this case, we shall direct instead that a copy of the notice
be mailed to all unit employees who were employed at the Coffeyville
plant on January 31, 1963.
ORDER
Pursuant to Section 10(c) of the National Labor Relations Act,
as amended, the National Labor Relations. Board hereby orders that
the Respondent, Acme Brick Company, Fort Worth, Texas, its offi-
cers, agents, successors, and assigns, shall:
1. Cease and desist from refusing to bargain collectively with
United Brick and Clay Workers of America, AFL-CIO, Local 566,
as the exclusive representative of all the employees in the appropri-
ate unit of production and maintenance employees, with respect to
rates of pay, wages, hours, and other terms and conditions of
employment, including the method, terms, and conditions by which
production and maintenance employees may obtain employment, in
the event that it resumes operations at its Coffeyville, Kansas, plant.
2. Take the following affirmative action, which the Board finds
will effectuate the policies of the Act :
(a) In the event that the Respondent resumes operations at its
Coffeyville, Kansas, plant, promptly notify United Brick and Clay
U The record indicates that the Coffeyville plant is now shut down. We reserve the,
right to modify our remedial order if made necessary by circumstances not now apparent-
MARTIN MARIETTA CORPORATION 909
Workers of America, AFL-CIO, Local 566, of such fact, and, upon
request, bargain collectively with said Union as the exclusive repre-
sentative of all employees in the appropriate unit in the manner
described above.
(b) Make whole the eligible employees for any losses they may
have suffered since February 1, 1963, by virtue of Respondent's uni-
lateral action in disregard of their seniority rights, in the manner set
forth in the Decision herein.
(c) Preserve and, upon request, male available to the Board or
its agents, for examination and copying, all payroll records, social
security 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.
(d) Mail a copy of the attached notice marked "Appendix" 10 to
the Union and to each employee employed at the Coffeyville plant
on and after January 31, 1963. Copies of said notice, to be fur-
nished by the Regional Director for Region 17, shall, after being
signed by an authorized representative of Respondent, be mailed
immediately upon receipt thereof.
(e) Notify the Regional Director for Region 17, in writing,
within 10 days from the date of this Order, what steps have been
taken to comply herewith.
IT Is rURTHER ORDERED that the complaint be, and it hereby is, dis-
missed insofar as it alleges unfair labor practices not found herein.
MEMBER ZAOORIA, concurring in part and dissenting in part :
This case concerns the bargaining obligations of Martin, the seller,
and Acme, the buyer, of Martin's Coffeyville, Kansas, brickmaking
plant. My colleagues have placed the bargaining obligation on
Acme alone. I think, however, that both had an obligation, but that
Acme's was not as extensive as my colleagues have found.
Martin is engaged in a variety of business operations, national in
scope. The Coffeyville, Kansas, plant, where the Union was the cer-
tified representative of the production and maintenance employees,
was one of seven plants in its United Brick Division. The latest
contract between the Union and Martin was effective until Decem-
ber 30, 1962, and from year to year thereafter, unless changed or
terminated upon 60 days' notice.
As early as May 1962, Martin decided to dispose of the United
Brick Division. In about November 1962, Martin began negotia-
tions with Acme, a brick manufacturer, for the sale of the United
Brick Division plants, but did not publicize its decision to sell or its
negotiations with Acme.
10 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 "a Decision and Order ," the words "a
Decree of the United States Court of Appeals , Enforcing an Order."
910 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
On January 9, 1963, while negotiations with the Union for a new
contract were pending, Martin entered into an agreement for the sale
of all its United Brick Division plants to Acme. Possession and
control of these plants was to be delivered to Acme on February 1,
1963, and Acme agreed to notify Martin by January 25, 1963, "as to.
which, if any, of Seller's present employees Purchaser intends to.
employ." Acme, however, regarded the Coffeyville plant as "old"
and "obsolete" and economically unfeasible to operate; and, as early
as January 2, 1963, Peirce, Martin's United Brick Division manager,.
knew that Acme so regarded the Coffeyville plant and that Acme
might not operate it.
On January 15, 1963, by letter, Martin for the first time notified
the Union and the Coffeyville employees of the sale agreement and
advised that all United Brick Division employees would be ter-
minated on January 31, 1963. Sometime in January 1963, Acme-
engaged Kiefer and Capps, operations manager for the United Brick
Division and Coffeyville plant I manager, respectively, who were-
Martin's representatives in the then pending' bargaining negotia-
tions with the Union to continue in similar managerial positions
with Acme, effective February 1, 1963. Acme instructed Capps to^
formulate plans to phase out the Coffeyville plant.
There were 26 employees in the Coffeyville production and main-
tenance unit on January 31, 1963; by the end' of February 1963,
Acme had hired 15 of them, after Capps had interviewed all of
them and told them that all production and maintenance employees
were being hired on a temporary basis. At no time was the Union,
consulted in any manner with respect to the separation or hiring
of any employee; indeed, Acme rejected the Union's February 6"
demands that it continue the Union-Martin contract in effect and
bargain about the contract revisions the Union had previously pro-
posed to Martin. Additionally, in the hiring proces, Capps did not
refer to the unit seniority list ; in fact; several employees were passed
over in favor of less senior unit employees. With respect to the-
other plants involved in the sale, however, it appears that Acme
recognized the employees' representatives and continued in effect the,
contracts negotiated between Martin and such .representatives.
In the operation of the Coffeyville plant, Acme filled orders,
received by Martin prior to February 1, and took new orders to sell
its, inventory. However, Acme, did not manufacture any new brick
at the Coffeyville plant, and it purchased additional equipment only
to salvage defective bricks and make its stock-in-hand more salable..
Between February 1 and September 11, 1963, the date of the hear--
MARTIN MARIETTA CORPORATION 911
ing, Acme gradually phased out the Coffeyville plant. It was esti-
mated at the hearing that the Coffeyville plant would be completely
closed down by the end of September 1963.
I am not concerned, in this case, with the question of Martin's
duty, if any, to bargain over the decision to sell. As the record
shows, the sale of the Coffeyville plant was not an independent
transaction. Instead, it was part of a "package" sale of a number of
plants; as to all except the Coffeyville plant, the transfer of owner-
ship apparently had no impact on the bargaining relationship or the
employees' conditions of employment; and except for the problems
arising from Acme's decision to phase out its operations, there is
nothing to show that the factors affecting Martin's decision were any
different with respect to Coffeyville than to any of the other plants.
In this posture I do not think questions as to the decision to sell
Coffeyville can be considered in isolation from questions as to the
decision to sell all the plants; and as to that there is no contention
that Martin violated the Act.
Different considerations are presented, however, by the problems
arising from the fact that Acme did not intend to operate the Cof-
feyville plant as a going concern, but rather-planned to hire only a
fraction of Martin's work force at that plant, to sell its existing
inventory, and ultimately to liquidate it. As Martin clearly knew
of Acme's plans thus to phase out the Coffeyville plant, and as these
known plans obviously had an immediate impact on the unit employ-
ees, Martin was in my opinion obligated to notify the UIiion of the
impending sale and to bargain with it with respect to the effects of
the sale upon the unit employees.
This Martin failed to do. All but signing the contract of sale was
accomplished at the time of the third bargaining meeting between
Martin and the Union on December 27, 1963, but Martin, even at
this stage, failed to inform the Union of the imminence of the sale
and continued to use the bargaining process to perpetuate the belief
that the employment relationship would continue. Inded, Martin
did not notify the Union or the Coffeyville employees of the sale
until the contract of sale had become an accomplished fact. By its
failure to notify the Union and afford it an opportunity to consult
and negotiate prior to the disposition of the plant, Martin may well
have contributed to the loss of employment suffered by those employ-
ees whose seniority status was disregarded by Acme. Even if bar-
gaining negotiations could not have preserved all unit jobs, with
Martin or Acme, the Union might have been successful in persuad-
ing Martin to seek an accommodation with Acme which could have-
912 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
safeguarded employee, seniority rights built-up over the. years.,.' •I
.would find, accordingly, that Martin violated Section 8(a) (5) of the
Act.
There is in my view no merit to Martin's contentions that a man-
agement rights clause in its contract with the Union precludes the
existence of any bargaining obligation on Martin's part in this case,
and that the Union acquiesced in Martin's action after receipt of the
termination letter of January 15. As to the former, the contract
clause referred to Martin's right to determine the extent to which
its property should be operated or shut down, to discontinue depart-
ments in whole or in part, or otherwise to manage its business; hence
it has no application to Martin's obligation to bargain as', to the
effects upon employees of its decision ,to sell the plant.
As to the latter, the Union's local president on several occasions
asked the Coffeyville plant manager about the status of the Union's
contract and the prospect of future employment, and each time was
told that the manager knew nothing of either matter. Further, the
Union's International representative unsuccessfully attempted to
reach Martin's Kansas City office on two occasions after learning of
the sale. Such, efforts, rather than indicating acquiescence ,in Mar-
tin's conduct, reveal a , futile attempt to obtain information which
should have been discussed before the sale.
Concerning Acme's- bargaining obligation, I disagree only with my
colleagues' conclusion that Acme had a . duty to bargain with,respect
to former Martin employees whom it never hired, and with the back-
pay remedy which they grant to such employees.,
Under the Act an employer is normally obligated to bargain with
respect to his employees, and "his employees" are normally those on
his payroll. In some circumstances, such as when employees have
been refused employment for unlawful reasons 12 an employer's
31 The course of events in this case makes particularly pertinent the Supreme Coal t's
observations in John Wiley & Sons, Inc . v. Livsngston, 376 U.S. 543 ,, and in Fibreboard
Paper Products Corp. v. N.L.R.B., 379 U.S. 203. In Wiley, the Supreme Court observed,
at page 549 , that "Employees , and the ,union which represents them, ordinarily do not take
part in negotiations leading to a change in corporate . ownership. The negotiations will
ordinarily not concern the well-being of the employees, whose advantage or disadvantage,
potentially great, will inevitably be incidental to the main considerations . The objec-
tives of national labor policy , reflected in established principles of federal law, require
that the rightful prerogative of owners independently to rearrange their businesses and
,even eliminate themselves as employers be balanced by some protection to the employees
from a sudden change in the employment relationship ." [ Emphasis supplied .] And, in
Fibreboard, supra, 214, the Supreme Court noted, with respect to subcontracting
issues, ". . . , that, although it is not possible to say whether a satisfactory solution
could be reached, national labor policy is founded upon the congressional determination
that the chances are good enough to warrant subjecting such issues to the process,of
collective negotiations." -
12 See, e g ., Chemrock Corporation, 151, NLRB 1074 There is no suggestion in this
record . that any of Martin's former employees were denied employment' by Acme_ for
reasons which the Board has up to now considered to be unlawful
MARTIN MARIETTA CORPORATION 913
employees for bargaining purposes may also include employees who
have never been on his payroll. Before today, however, it has never
been held that an employer 's employees for bargaining purposes
include the whole class of applicants for employment. This, how-
,ever, is in my opinion the necessary meaning of my colleagues' hold-
ing that Acme was obligated to respect the seniority rights of for-
mer Martin employees whom it never hired , at least until it had
bargained with the Union concerning such seniority rights.
I share my colleagues ' concern for the protection of employee
rights, including seniority rights. Indeed , the recognition by my
colleagues of Martin 's bargaining obligation would advance that
objective . Nonetheless, concern for those rights must be balanced by
a proper concern for the employer 's rights and the applicable legal
principles . Here , Acme's projected operations required less than the
full Martin complement , and Martin knew this to be so. None of
the employees involved were Acme's employees for bargaining
purposes.
My colleagues, in their concern for the Martin employees not hired
by Acme, have neglected to give proper consideration to the appli-
cable legal principles and Acme's legitimate interests . As a result
they have placed the burden of remedying the injury to these
employees on the wrong Respondent.
APPENDIX
NOTICE TO ALL EMPLOYEES
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 you that :
WE WILL NOT refuse to bargain collectively with United Brick
and Clay Workers of America, AFL-CIO, Local 566, as the exclu-
sive representative of our employees at our Coffeyville, Kansas,
plant, with respect to rates of pay, wages, hours, and other con-
ditions of employment, in the event that we resume operations
at the Coffeyville, Kansas, plant.
WE WILL, in the event that we resume operations at the Coffey-
ville, Kansas, plant, promptly notify United Brick and Clay
Workers of America, AFL-CIO, Local 566, of such fact, and,
upon request, bargain collectively with that Union as the exclu-
sive representative of our employees and embody in a signed
agreement any understanding reached. _
243-084-67-vol . 159-59
914 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
IVE' WILL make whole all eligible employees, for any losses
they may have suffered by reason of our, unilateral action in dis-
regard of their seniority rights,in the staffing 9f the Coffeyville
plant since February 1, 1963.
ACME BRICK, COMPANY,
Employer.
Dated---------------- By-------------------------------------
(Representative ) ( Title)
Employees may communicate directly with the Board's Regional
Office, 601 East 12th Street, Kansas City, Missouri 64106, Telephone
FR 4-5282, if they have any question concerning this notice or com-
pliance with its provisions.
TRIAL EXAMINER'S DECISION
STATEMENT OF THE CASE
This proceeding , brought under Section 10 (b) of the National Labor Relations
Act, as amended ( 61 Stat . 163, 73 Stat . 519), was heard before Trial Examiner
George A. Downing in Kansas City, Missouri , on September 10 and 11 , 1963, pur-
suant to due notice . The complaint , issued on July 31 , 1963 , by the General
Counsel of the National Labor Relations Board on a charge dated February 26,
1963, alleged in substance that ( 1) Respondent Martin Marietta Corporation
("Martin") refused to bargain with the Union as the exclusive bargaining repre-
sentative of its employees in an appropriate unit by announcing to the Union on
January 14, 1963, a sale of its United Brick Division ( including its Coffeyville
plant ) to Respondent Acme Brick Company ("Acme" ),, without prior notice to; or
consultation and bargaining with , the Union , and similarly by terminating its
employees at the Coffeyville plant on January 31 ; and (2) Respondent Acme
refused to bargain with the Union on and after February 6 , 1963 , concerning the
wages, hours, terms of employment , etc., of the employees at the Coffeyville plant,
and that it also preceeded , unilaterally and without notice to the Union , to phase
out and close the Coffeyville plant.
Respondents answered separately , denying the unfair labor practices as charged.
Martin also averred in part and in substance that the sale of its plant was a trans-
action outside the scope of the area contemplated by Section 8(a)(5) and 9(a),
i.e., "rates of pay, wages , hours of employment, or other conditions of employment";
the sale was made for bona fide economic reasons; prior dealings between it and
the Union had established Respondent 's privilege unilaterally to shut down , discon-
tinue, or sell the plant without notice to or consultation with the Union ; and it in
fact provided prompt and adequate notice on January 14 to the Union , which made
no request for consultation or bargaining prior to February 1, when full possession
and control of the plant was delivered to Acme.
By its answer , Respondent Acme averred in substance that it hired -a few tempo-
rary employees to phase out the Coffeyville plant, admitted that it did not recognize
the Union as the exclusive representative of those employees , and denied that the
Union was there exclusive bargaining representative . Acme averred further that
it never operated the plant as a manufacturing facility, and that it manufactured
no products after February 1, though work in process was completed.
Upon the entire record in the case and from my observation of the witnesses, I
make the following:
FINDINGS OF FACT
I. JURISDICTIONAL FINDINGS
Respondent Martin , a Maryland corporation , is engaged in the manufacture and
development of numerous products at plants in locations situated in several States
of the United States. Through its United Brick Division , it operated seven plants
engaged in the manufacture and sale of brick and construction materials , including,
the planf at Coffeyville , Kansas, involved herein.
MARTIN MARIETTA CORPORATION 915
Respondent-'Acme, -a Texas corporation; is 'engaged in the manufacture of-bricks
and other structual clay products, and has'plants, and offices- located in several.
States of the United States.
Each of, said Respondents manufactures and `ships goods valued in • excess of
$50,000 directly to customers located outside the State in which they are manu
factured. Each is therefore engaged in commerce within the meaning of Section
2(6) and (7) of the Act.
H. THE LABOR ORGANIZATION INVOLVED
The Charging Union is a labor organization within the meaning ,of Section 2(5)
of the Act.
III. THE ISSUES
The principal issues herein were those framed by the pleadings, i.e., (1) • whether
Martin was obligated to give notice and to bargain with the Union concerning the
contemplated, sale of its United Brick Division to Acme for bona fide business rea-
sons; and (2) whether an obligation to recognize and. bargain with the Union
devolved upon Acme as a successor corporation.
By argument and by brief, however, the General Counsel injected new issues
and additional theories which involved assertion of a joint liability on the part of
Respondents and, in support thereof, claims of bad faith, collusion, and conspiracy
between Respondents to devastate the bargaining unit.
IV. THE UNFAIR LABOR PRACTICES
A. The evidence
The facts in this 'case are simple and without substantial dispute insofar as mate-
rial to a determination of the issues herein. I shall, therefore, endeavor to confine
my findings to essential facts and to eliminate, so far as possible, the recital- of
evidentiary details.
Martin is a giant corporation, engaged in a variety of operations, national in
scope. It acquired through merger with American-Marietta in 1961 its United
Brick Division, which then consisted of some eight brick plants, in Missouri, Okla-
homa, and Kansas, including the plant at Coffeyville with which this proceeding is
concerned. The Brick Division assets constituted only a small fraction of 1 percent
of Martin's total assets. Martin's employees at Coffeyville, have been represented
since 1952 by the (certified) Union,' with whom the last collective-bargaining
agreement was executed on March 21, 1962, and which' was 'to- expire on Decem-
ber 30, 1962. That contract (and prior ones) contained a management rights
clause which provided in material part that nothing in' the agreement should be
construed to limit the Company's right to determine the extent to which its prop-
erty should be operated or shut down, to discontinue departments in whole -or in
part, or otherwise to manage and conduct the business of the Company.
Following notice given by the Union in October, and an exchange of correspond-
ence, negotiation sessions were held on December 17, 18, and 27, at which the
Union's contract proposals were discussed between Martin's negotiators, Robert J•.
Kiefer, operations manager of United Brick Division, and Hubert' Capps, 'Jr.,
Coffeyville plant manager, and union negotiators, O. Z. Benton, 'International repre=
sentative, and Cecil Landrum, president of the local. Though a further ineeting
was begun on January 10, little headway was made before Kiefer was called away
to return at once to Kansas City, where he was informed, for the first time, that
the Brick Division was being sold to Acme. No reference had been' made at any
time during the negotiations to the fact that such a sale was contemplated.
The actual decision to dispose of the division had been made early in May'1962,
by Martin's high-level corporate management because of the, desire to reduce the
extent of Martin's diversification and to put the capital into more productive lines.
There followed a search for, and negotiations with, a number of prospective pur-
chasers, also conducted by high-level management, with as much secrecy as was
possible under the circumstances. Indeed, the matter was kept a complete secret
from Kiefer, and Capps, who were managing the Coffeyville plant, until after formal
1 The Union was certified in March 1952 , in an (appropriate)' unit composed of all pro-
duction and maintenance employees at the Coffeyville plant, excluding executives, clerical,
office, and supervisory employees.
916 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
execution of the sales contract on January 9. That was because it was necessary
for Martin to consider the possibility of continuing the operation itself if the deal
should fall through and because of apprehensions that if the news should leak, its
"efficient well staffed organization" might be decimated by the loss of key person-
nel who had been attracted to the organization.
The negotiations with Acme, pending for some 2 months, ripened into fruition
with the signing of a sales contract on January 9, and with the subsequent delivery
of possession and control of the brick plants on February 1. Martin was not privy
to Acme's plans or intentions concerning the operation of the seven plants, though
there were suggestions by Acme during the negotiations that it might not operate
all of them, with specific reference to the Collinsville, Oklahoma, plant and the
Coffeyville plant as being old and obsolete and as high cost units which might not
be economically digestible.
Returning now to the negotiations with the Union, before Kiefer left the meet-
ing on January 10, Benton suggested that the contract be extended for 30 days,
and Kiefer suggested that the extension be, instead, for 60 days and that the Union
draw up and submit the extension . Though the extension was drawn, executed by
the Union's representatives, delivered to Capps, and by him forwarded to Kansas
City around January 11 or 12, it was-not executed by the Company, Kiefer testi-
fied, because he felt that once the Union knew of the sale to Acme, it would con-
tact him further regarding the situation.2
On January 15, Capps handed to Landrum a letter dated January 14, written by
Millard Peirce, general manager of United Brick Division, to the Union, inform-
ing it that Martin had concluded an agreement under which Acme would acquire
all of its brick plants, including Coffeyville, effective February 1, 1963, subject to
the approval of the board of directors of both firms. The Union was also informed
that Martin was forced to terminate all employees as of the close of business on
January 31, 1963, and that though it was not fully aware of Acme's plans for
operating the plants, it believed that many of its employees would be hired by
Acme. The employees (numbering 26 at the time) were also called together in a
group, and Capps read the letter to them.
Martin's operation of the plant ceased on January 31 as announced, and Acme
took full possession and control on February 1, though the final closing transaction
did not occur until February 13. At no time between January 15 and 31 did the
Union make any request of a Martin agent that Martin negotiate about anything.'
In the meantime, Kiefer was interviewed by Acme for employment on Janu-
ary 11, and on January 18 Capps was informed that he, too, would be retained.
In a meeting at the plant on the latter date, Capps and Kiefer were informed by
Acme officials that the Coffeyville operations were to be phased out after Janu-
ary 31, and Capps was instructed to formulate proper plans for doing so and for
properly caring for and disposing of all inventory on hand, numbering some 4
million bricks. Actually, it had never been Acme's intention to operate the Coffey-
ville plant. As early as, November, Burnette Henry , its general manager of opera-
tions, who had made an evaluation and analysis of all the plants involved in the
sale, recommended to Acme's president that the Coffeyville plant not be operated,
and that recommendation was accepted by Acme's board of directors.
2 Though the General Counsel introduced evidence that on January 10, Kiefer notified
the Union that Martin was discontinuing the checkoff of union dues because of the expira-
tion of the contract he makes no contention that such conduct constituted an unfair labor
practice , nor does his brief assign it as supporting his claim for an unfair labor practice
finding on the basis alleged in the complaint . Cf. Standard Oil Company of California,
144 NLRB 520. Of similar standing in the record was other evidence that on January 28,
Martin requested from the Union the usual dues checkoff list.
8 Landrum spoke to Capps only about the contract extension which Capps had for-
warded to Kansas City and about whether the employees were going to be employed by
Acme. Capps disclaimed knowledge on both points. Although Landrum and Benton testi-
fied that it was understood on January 10 that a further negotiation meeting was to be
held on January 29, that was disputed by Kiefer and Capps , and the following circum-
stances tend to corroborate their denials : All four witnesses were agreed that it was un-
derstood that a future meeting was to be arranged by a telephone call on January 14 from
Kiefer to Benton or vice ver8a . Both were unsuccessful in their later attempts to reach
each other. Furthermore, though Benton was in Coffeyville on January 29, he did not
go to the plant office or , make any attempt to see any company official . I therefore find
that there was no understanding or agreement for any specific meeting date 'after
January 10.
MARTIN MARIETTA CORPORATION 917
Capps formulated his plans the following week (though not on Martin's time),
and though he and Kiefer were, of course, fully aware of the disposition which
Acme intended to make of the plant, they at no time gave notice to, or consulted
with, the Union concerning the matter, and all of Capps' actions vis-a-vis the
employees, hereinafter recited, were similarly taken unilaterally.
On January 31, after quitting time, Capps interviewed the bulk of the 26 employ-
ees, informing them that jobs with Acme would be temporary and that qualification
was contingent on taking physical examinations. He hired immediately three
employees to serve as burners to keep the fires going over the weekend, the only
operation which was then conducted. On February 4, he hired 13 more to work
in completing the phasing out operations (e.g., drying, heating, burning, drawing,
sorting, grading, and shipping). No mining of clay was engaged in and no green
brick were produced after January 31.
On February 6, Benton wrote Acme, referring in part to the Union's certification,
to its contract with Martin, and specifically to the clause that the contract was to
remain in full force and effect until December 30, 1962, "and thereafter, from year
to year, unless changed or terminated as provided herein." Stating further that
neither party had served notice of a desire to terminate the contract, Benton
requested that Acme continue the contract in full force and effect and that it dis-
continue any unilateral action pertaining to employees' seniority rights and rein-
state any employee affected by its action, effective February 1. Benton concluded
with a request that Acme bargain with the Union for contract changes as presented
by the Union in previous meetings with Martin.
Acme replied on February 14, stating in part that its contract of purchase
expressly provided that Acme was not bound by any collective-bargaining agree-
ment of United Brick, and further that after it acquired the Coffeyville plant, it had
manufactured no products, though it was "burning off the work in process," and that
in order to phase out the plant and ship the products, it had employed on a tempo-
rary basis a few employees who had the necessary skills or physical fitness.
In the meantime, Capps terminated two employees on February 8, four more on
February 9, and the three burners on February 14. Thereafter, he recalled in April
two men for the purpose of expanding the loading crew, and at the time of Capps'
transfer to Louisiana on May 6, there were some seven employees, plus the office
manager. Before Capps left, however, Acme procured (and later used) new equip-
ment of a special type for the purpose of applying a "slurry" coating to the low
grade brick which remained in inventory in order to enhance the apearance of the
product and to make it more salable.
Finally, at the time of the hearing in September, there still remained some
2,300,000 bricks on hand and a few motors and other pieces of equipment, all of
which Respondent expected to move within the month. Thereupon Acme intends to
close the plant. In the meantime, it is employing currently some 4 or 5 employees
in dismantling the remaining equipment and doing the last of the shipping.
B. Concluding findings
1. Introduction
Before reaching the principal isues as framed by the pleadings (see section III,
supra), it is necessary to consider additional issues and contentions which the Gen-
eral Counsel injected by argument and by brief and which did not appear to be
involved on the face of the pleadings.
Thus there was no complaint allegation that Respondents had jointly committed
an unfair labor practice and none that the sale was made collusively, or in a con-
spiracy, or with intent on either side to evade a bargaining obligation, and the only
reference to "good faith" was the conclusionary allegation that Martin had refused
"to bargain in good faith" through its unilateral sale of the plant without notice to
the Union and by the consequent termination of the employment relation between
it and the employees. Furthermore, in his opening statement the General Counsel
represented, with specific reference to the legality of the negotiations as such, that
"The only thing we are contending, which is the thrust of our case against Martin
[is that] they failed to notify the union of their decision."
Elsewhere, however, in-discussing Martin's accountability for remedy (assuming
the granting of a full remedy against Acme), the General Counsel asserted that
Martin should be held jointly liable with Acme for remedying the violations,
because the two companies "violated the law concertedly." Renewing those conten-
tions in his brief, the General Counsel now charges for the first time that both
918 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Respondents were guilty of bad faith through "secret negotiations,' aimed at
"devastation of- the unit," and that Martin engaged in a "conspiracy" with Acme to
enable the latter to effectuate a unilateral closing of the plant.
Laying aside any question concerning the apparent departure from the theory of
the pleadings, I totally reject, as unsupported by the evidence, the General Counsel's
claim of conspiracy and collusion and of concerted or joint violations by Respond-
ent. I find to the contrary that the undisputed facts established that Martin's sale to
Acme was a bona fide, arms length transaction, made between strangers, for valid
business reasons. Such secrecy in negotiations as was resorted to was likewise for
sound business reasons 4 and not for the purpose of enabling either seller or buyer
to evade an obligation to bargain with the Union.
An additional issue concerning Acme's liability on a basis other than successor-
ship is disposed of in section 2, below, at footnote 5
Turning now to the principal issues, the subject matter presented here, i.e., a bona
fide sale of a plant or business for valid economic reasons, is a familiar one in
Board proceedings, but one which has normally reached the Board, in unfair labor
practice cases on questions involving the buyer's liability as successor to the bargain-
ing obligation of the seller following the sale of a business whose employees are
represented by a duly authorized-and certified-collective-bargaining representa-
tive. See, for a typical example, Royal Brand Cutlery Company, 122 NLRB 901.
As the law in such cases is well settled, and as the findings concerning Acme's obli-
gation to bargain will add perspective to the General Counsel's contentions concern-
ing Martin's liability herein, we consider first the question of Acme's refusal to
bargain.
2. The issue as to Acme
The facts here plainly made out a case for successorship liability on Acme's part
to recognize and bargain with the Union 5 The Union was the certified representa-
tive of Martin's employees and was currently engaged at the time of the sale in con-
tract negotiations. Acme hired as its own management representatives, prior to
February 1, the two negotiators who had acted for Martin throughout those negotia-
tions and who were thus fully aware of the Union's representative status and of the
status of the negotiations.6 Under the management of those same representatives
Acme continued the operation of the plant after February 1 (though in a phasing
out process), using the same equipment, and employing only former emloyees of
Martin within the bargaining unit. It took over the complete inventory, handled
the same products as Martin, completed the processing of "green" or unfinished
brick, filled orders which Martin had taken, and took new orders to dispose of the
inventory. Because a substantial portion of that inventory consisted of low grade
.products, difficult to dispose of, Acme purchased new equipment and engaged in a
new "slurrying" process to improve the appearance of the product and to make it
more salable.
* An employer may desire for many legitimate reasons to keep such negotiations secret
from the rest of the business community. See, e g., the comments by Trial Examiner
George J. Bott on the adverse effects reasonably to be expected from premature publicity
in a sales situation like the present, at page 6 of his Intermediate Report in United Dairy
Company, Case 6-CA-2551, IR-270-63, Issued May 31, 1963.
5As I find Acme's obligation to bargain as a successor fully established, it is unneces-
sary to consider the General Counsel's alternative contention advanced in his brief that an
obligation arose independently of the succession because of Acme's subsequent employment
of union members Furthermore, it is to be noted that Acme's obligation on the latter
score must necessarily be viewed as commencing no earlier than the Union's request of
February 6, and that on the record as herein made it cannot be found that a majority of
the employees who had been hired and who were employed as of that date were members
of the Union.
9 Though Acme attempted to raise through Kiefer's testimony at the hearing an issue
concerning an alleged good-faith doubt of the Union's majority, the defense was not one
which Acme had pleaded in its answer, and an objection was sustained, but with leave to
proceed by offer of proof. At a later point, Kiefer effectually disproved the alleged defense
by his testimony that but for the sale, he would have continued to bargain with the Union
on Martin's behalf, and that but for Acme's decision to close the plant, he would have
bargained with the Union after the sale
Aside from the foregoing, I find on the basis of proof offered by the General Counsel
that on January 31, the Union represented an actual majority of Martin's employees in
the unit.
MARTIN MARIETTA CORPORATION 919
Thus, Acme qualified as a successor employer, with a duty to recognize and bar-
ggain with the incumbent union, for "The change of ownership in no way affects the
'obligation of the employer under the statute " N.L R.B. v. Hoppes Manufacturing
Company, 170 F.2d 962, 964 (C.A. 6). As the same court originally stated the
principle, "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." N.L R.B. v. Arthur J. Colten, et al., d/b/a Kiddie Kover Manufacturing
Company, 105 F.2d 179, 183. Or as the Fifth Circuit stated it, "The crucial ques-
tion is whether the employing industiy remains essentially the same after the
transfer of ownership " N.L.R B. v. Auto Ventshade Inc., 276 F.2d 303, 304. The
Tenth Circuit similarly held that the question presented was one of continuity: "In
deciding this question we necessarily deal in terms of succession of employment,
and not succession of employers, i.e., in terms of the continued nature of the
employment rather than the source of such employment." N.L.R.B. v. F. G. McFar-
land et al., d/b/a McFarland & Hullinger, 306 F.2d 219, 220.
Those decisions represent affirmance of Board law as established in a long line of
cases over the years. See for example Royal Brand Cutlery Company, 122 NLRB
901; Auto Ventshade, Inc., 123 NLRB 451; Downtown Bakery Corp., 139 NLRB
1352, 1354, Colony Materials, Inc., 130 NLRB 105, Johnson Ready Mix Co., 142
NLRB 437. The latter case also disposes of Acme's contention that it was relieved
of any obligation to bargain by the provision in the sales contract that it would not
assume any labor contracts of Martin, for the Board there rejected a similar conten-
tion , finding that the advent of the purchaser "effected no substantial changes in the
operating entity."
Citing Cruse Motors Inc, 105 NLRB 242, 247, for statement of the principle that
the controlling fact is whether the employment enterprise substantially continues
under the new ownership as before, Acme argues that because it engaged in no fur-
ther mining operations , and because the remaining operations, including slurrying,
were only temporary and limited and in the nature of salvaging of assets, a sub-
stantial change was effected in the nature of the industry. The facts signally fail to
support that contention. Here, as in Johnson Ready Mix, supia, Acme, while pro-
ceeding to close down the plant, continued to operate the same enterprise with the
same employees, under the same supervision, and to perform essentially the same
'manufacturing operations with the same equipment.,
Acme contends further that, assuming its status as a successor employer, any duty
to bargain on its part would be limited to the effect of the phasing but operations,
and that the Union never made a clear and unequivocal request to bargain on those
matters, but only on other matters presupposing the continued existence of the prior
contract with Martin.
It is true that the Union's letter presupposed the continued existence of the con-
tract, and it also requested Acme to continue the contract in full force and effect.
But the request went further than that. The Union referred to the prior negotia-
tions it had conducted with Martin and requested Acme to meet and bargain with it
'for contract changes as previously presented to Martin's representatives As those
representatives were then acting as Acme's own, and as they were fully aware of the
status of the prior negotiations, there was plainly no impediment to immediate
resumption of negotiations at the point of suspension. In addition, the Union
requested specifically that Acme discontinue its unilateral actions concerning the
seniority rights of the employees and that it reinstate any who had been affected by
such action since February 1, 1963. Finally, it is noteworthy that Acme's rejection
of the request raised no question of the adequacy of the request, but asserted the
same contentions upon which it now relies in defense of its refusal to bargain, i.e.,
it was not bound by United's labor contiact because of a provision in its contract of
purchase; it was not manufacturing any product; and it was employing only a few
employees on a temporary basis while phasing out the plant.
I therefore conclude and find that the Union's letter of February 6 was fully ade-
quate as a request to bargain.
I conclude and find that Acme refused to bargain generally with the Union con-
cerning the wages, hours, and other terms and conditions of employment of the
employees of the Coffeyville plant and that it was further guilty of a refusal to bar-
gain by proceeding unilaterally, without notice to the Union, with its plan and pro-
gram to phase out and close that plant. Town & Country Manufacturing Company,
Inc, 136 NLRB 1022; Fibreboard Paper Products Corporation, 138 NLRB 550,
enfd. sub nom. East Bay Union of Machinists, Local 1304, Steelworkers, 322 F.2d
411 (C.A.D.C.) "Unilateral action by an employer without prior discussion with
the union does amount to a refusal to negotiate about the affected conditions of
920 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
employment under negotiation, and must of necessity obstruct bargaining, contrary
to the congressional policy . . N.L.R.B. v. Benne Katz, d/b/a Williamsburg
Steel Products Co. 369 U.S. 736, 747. See also the Supreme Court' s decision in
Order of Railroad Telegraphers v. Chicago and Northwestern Railway Co., 362
U.S. 330, where it was specifically held that a decision by management to abolish or
discontinue any job was a mandatory subject of bargaining.
There remains the matter of fixing the date on which Acme's refusal to bargain
occurred. The complaint charged the refusal to bargain generally as commencing
on or about February 6, the date of the Union's request, and it charged a refusal,
through the unilateral phasing out of the plant, as commencing on or about Feb-
ruary 1. The General Counsel .argues in his brief that no request was necessary
under the facts in this case because the obligation to bargain devolved upon Acme
by its purchase of the employing enterprise and because it was under a duty to give
notice and consult with the Union concerning its plans to phase out the plant and,
in the meantime , to desist from taking unilateral actions vis -a-vis the employees con-
cerning their wages, hours, and other conditions of employment.
That contention is plainly sound. As Acme inherited Martin's obligation to bar-
gain , it was bound to the same extent as Martin to avoid any unilateral action which
would invade the statutory area entrusted exclusively to, the collective-bargaining
representative of the employees. This included giving notice to and bargaining with
the Union concerning the contemplated phasing out and closing down of the plant
and concerning the unit jobs to be affected thereby. Acme's representatives at Cof-
feyville knew as early as January 18 that the plant was to be phased out beginning
February 1, and they shortly set about making plans to that end. On January 31
they took their first unilateral action to carry out those plans and they have since
proceeded unilaterally on all matters of employment, by refusing to bargain with
the Union as the representative of the employees. I therefore conclude and find that
Acme's refusal to bargain with the Union in the respects above found occurred at
all times on and after January 31, 1963.7
3. The issue as to Martin
There is yet no Board or court case which holds that an employer is required
to bargain with a union about a bona fide sale of his business, nor am I cited to
any legislative history indicative of a view that such a matter should fall among
the subjects of mandatory bargaining embraced within the statutory language,
"rates of pay, wages , hours of employment, or other conditions of employment."
But here, relying upon certain language of the Board in Town & Country Manu-
facturing Co., supra, which involved neither a sale nor a successorship but an
employer's decision to subcontract, the General Counsel seeks to hold both seller
and purchaser accountable for unfair labor practices, i.e., Martin for the failure to
bargain with the Union about the sale and Acme for its failure to bargain after
the sale. Furthermore, the General Counsel's attempt to extend the Town &
Country doctrine, itself the subject of diverse court rulings , is made without ques-
tioning the solvency of the purchaser or its ability, financially or otherwise, to
remedy unfair labor practices which followed the sale, nor is Martin' s alleged
responsibility grounded on such matters. Neither does the case present an attempt
to impose upon a buyer the responsibility for remedying prior unremedied unfair
labor practices of a seller. Cf. N.L.R.B. v. Birdsall-Stockdale Motor Company,
208 F.2d 234, 236-237 (CA. 10); N.L.R.B. v. Dayton Coal and Iron Corp., 208
F.2d 394, 395 (C.A. 6).
In Town & Country, the Board reconsidered and reversed its former holding in
Fibreboard Paper Products Corporation, 130 NLRB 1558, that an employer which
unilaterally subcontracts a portion of its operations for economic reasons does not
violate Section 8(a) (5) of the Act by failing to notify and negotiate with the rep-
resentative of its employees with respect to its decision. Concluding that that view
"unduly extends the area within which an employer may curtail or eliminate entirely
job opportunities for its employees without notice to them or negotiation with their
bargaining representatives," the Board held, contrary to Fibreboard, that "the elimi-
nation of unit jobs, albeit for economic reasons, is a matter within the statutory
phrase `other terms and conditions of employment' and is a mandatory subject of
collective bargaining within the meaning of Section 8(a)(5) of the Act."
7 As that date is close enough in point of time to fall within the complaint allegations
of on or about February 1 and on or about February 6, I do not consider it material that
no formal motion was made to amend the complaint.
MARTIN MARIETTA CORPORATION 921
Though court acceptance of the Town & Country doctrine is not yet established,8
,the General Counsel is attempting to extend,the principle to cover a bona fide sale
,of a business, as here presented, on the theory that the Town & Country principle
will encompass any case which might involve the elimination of unit jobs.
Though the General Counsel may have stated his theory too broadly, certainly
cases (involving sales) may arise or may be hypothetically suggested which would
fall within and which would be controlled by the Board's rationale in Town &
Country .9 There are cogent reasons, however, why the Town & Country doctrine
does not control the present case.
We start with a distinction that goes to the heart of the Board's holding, and
that is that while either a subcontracting of unit work or a removal or closing of a
plan will directly entail an elimination of unit jobs, a sale of a plant as a going
concern will not in and of itself have such an effect. To the extent that changes
in, and elimination of, unit jobs may follow a bona fide sale, they normally result
from independent decisions made by the purchaser, who may decide either to con-
tinue the same operations, or to convert to different ones or to different products,
or, as here, to close the plant down for valid economic reasons.
The sale as made by Martin did not contemplate or envisage any action by it
looking toward the elimination of unit jobs, and Martin took no such action.
Despite the General Counsel's argument to the contrary, there is also no evidence
of collusive action, none of an intent by Martin,to evade its bargaining obligation,
and none that Martin was party or privy to Acme's intent or plans. The decision
to phase out and to close the Coffeyville plant was made by Acme, independently
and alone, and outside the sales negotiations. Thus, it was Acme's decision and
Acme's conduct which resulted in the elimination of unit jobs and which constituted,
under findings previously made, an unfair .labor practice, for which it is being held
fully accountable herein asa responsible successor employer.
A final point of some relevance in assessing Martin's sale as an unfair labor
practice is the impossibility of framing a realistic remedy. In seeking the res-
toration of the status quo, the General Counsel specifically demands abrogation of
the sales contract, reconveyance to Martin of the plant, and resumption by Martin
•of possession and operation. The observations made by Trial Examiner Bott of
somewhat similar demands in United Dairy Co., supra, apply here with greater
force. There, in a proceeding to which the buyer was not a party and from
which the theory of successorship was removed, Bott refused to order the seller to
restore the status quo by going back into business, commenting that such a remedy
"is harsh, unrealistic, and perhaps economically impossible."
In the present situation the problem is magnified and, from any realistic point of
view, seems insoluble. Furthermore, because of the presence here of a responsible
purchaser who is being held fully accountable for remedying all unfair labor prac-
tices which resulted from its failure to bargain concerning its phasing out opera-
tions, the General Counsel's action in seeking to hold Martin also accountable
seems wholly unnecessary.lo
I therefore conclude and find that the Town & Country doctrine is not controlling
of the issue as to Martin because the making by it of the sale neither involved nor
8 The Court of Appeals for the District of Columbia affirmed the principle in Fibreboard
Paper Products Corp. v. N.L.R.B., 322 F.2d 411, and the Eighth Circuit rejected it in
N.L.R.B. v. Adams Dairy, Inc., 322 F.2d 533. The Fifth Circuit, though enforcing the
Board's decision in Town d Country itself, 316 F.2d 846, did so on the narrow basis that
the employer's "action was motivated by antiunion sentiment and a desire to rid itself of
the union,", and it did not pass upon the more sweeping duty. idescribed in the, Board's
decision.
A number of other cases are pending at various stages of court testing
6 Such a case is presently before the Board in Unnted Dairy Company, Case 6-CA-2551,
on the Intermediate Report of Trial Examiner George J. Bott, IR-270-63, Issued May 31,
1963. Though a case similar to it reached the Board in Weingarten Food Center of Tenn.,
Inc., 140 NLRB 256, the General Counsel there specifically removed the Town & Country
theory from the case and filed no exceptions to the Trial Examiner's failure to apply_ it.
It is also noteworthy that in neither of those, cases was the -purchaser joined and that
the theory of successorship was not involved or litigated.
w Even were it assumed , contrary to my finding herein, that Martin was guilty of, a
refusal to bargain , it would be only in a technical and theoretical sense, requiring no af-
firmative action on its part. Cf. United Dairy Co., supra. Thus to uphold the General
Counsel's views would award him a hollow.victoryiat best.. ' , - 1 „ 1 , , -
922 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
contemplated the elimination of unit jobs. I conclude and find further that Martin
fully met such obligation as it had, under the circumstances of this case, to bargain
with the Union concerning its sale to Acme and the termination of the employ-
ment relation between itself and the employees. - Martin gave prompt and timely
notice upon the reaching of a firm agreement, and there intervened a period of
more than 2 weeks prior to delivery of the plant during which the Union could
have taken up with Martin any matters concerning terms and conditions of employ-
ment, including vacation and terminal pay, or any other employee rights which
might be affected by the sale of the plant and the termination of the employment
relation with Martin. The Union, however, made no contact, asked for no meeting,
and presented no demands."
Upon the basis of the foregoing findings of fact and upon the entire record in,
the case I make the following:
CONCLUSIONS OF LAW
1. The Charging Union is a labor organization within the meaning of Section'
2(5) of the Act.
2. All production and maintenance employees at the Coffeyville (Kansas) plant,
excluding executives, clerical, office, and supervisory employees, constitute a unit
appropriate for the purposes of collective bargaining within the meaning of Section'
9(b) of the Act.
3. The Union has been since, on or about March 14, 1952, the exclusive bargain-
ing representative, within the meaning of Section 9(a) of the Act, of the employees
in said unit.
4. The Union has been since January 31, 1963, and now is, the exclusive bargain-
ing representative, within the meaning of Section 9(a) of the Act, of Respondent
Acme's employees in said unit.
5. By refusing to bargain with the Union on and after January 31, 1963,
Respondent Acme engaged in unfair labor practices proscribed by Section 8(a)(5)
and (1) of the Act.
6. The aforesaid unfair labor practices affect commerce within the meaning of
Section 2(6) and (7) of the Act.
7. Respondent Martin has not engaged in unfair labor practices as alleged in the
complaint.
THE REMEDY
Having found that Respondent Acme engaged in certain unfair labor practices, I
shall recommend that it cease and desist therefrom and that it take certain affirma-
tive action of the type which is conventionally ordered in such cases, as provided' in
the Recommended Order below, which I find necessary to remedy and to remove the
effects of the unfair labor practices and to effectuate the policies of the Act.
The remedial action which will be ordered here comports with current Board law
as established in Town & Country, supra, 136 NLRB at 1030, where the Board
held that it would be an exercise in futility to remedy this type of violation if the
employer's decision (and its unilateral actions in implementation thereof) were-per-
mitted to stand. It would be equally futile, the Board held, to direct an employer to
bargain with the union over the termination of jobs which the employees no longer
held, adding that, "Since the loss of employment stemmed directly from their employ-
er's unlawful action in bypassing their bargaining agent, we believe that a meaning-
ful bargaining order can be fashioned only by directing the employer to restore his
employees to the positions which they held prior to this unlawful action." Id. at
1031. See also Fibreboard Paper Products Corp., supra, 138 NLRB at 554-555;
Northwestern Publishing Co., 144 NLRB 1069; but cf. Carl Renton, et al. d/b/a
The Renton News Record, Inc., 136 NLRB 1294, 1297.
Effectuation of the policies of the Act requires in the present situation that
Respondent Acme restore the status quo ante as it existed on January 31, 1963, by
reactivating and resuming the operation of the Coffeyville plant, that it restore the
n The conclusions reached herein make it unnecessary to consider other matters advanced
by Martin as allegedly establishing its privilege unilaterally to shut down , discontinue,
or sell the plant , e.g., the management rights clause in the contract and the history of
prior closings of the plant and of prior dealings with the Union . It is also unnecessary
to reconsider Respondent's motion to dismiss ( denied at the hearing, but renewed in its
brief ) based on alleged procedural irregularities in the Regional Office prior to the issuance
of the complaint.
FINESILVER MANUFACTURING COMPANY 923
employees to the positions which they held on that date, or to substantially equiva-
lent positions, and make them whole in usual manner for any loss of pay, and
that it bargain with the Union, upon request, in the situation as so recreated. As
such action will fully remedy the effect of the unfair labor practices as herein found,
it is unnecessary to consider alternative remedies proposed by the General Counsel
concerning the offer to the employees of jobs at Acme's other plants.
[Recommended Order omitted from publication.]
Finesilver Manufacturing Company and Amalgamated Clothing
Workers of America , AFL-CIO. Case 23-CA-2016. June 22,
1966
DECISION AND ORDER
On January 24, 1966, Trial Examiner Ramey Donovan issued his
Decision in the above-entitled proceeding, finding that the Respond-
ent had engaged in and was engaging in certain unfair labor prac-
tices, and recommending that it cease and desist therefrom and take
certain affirmative action, as set forth in the attached Trial Examin-
er's Decision. He further found that the Respondent had not engaged
in certain other unfair labor practices alleged in the complaint.
Thereafter, the Respondent and the General Counsel filed exceptions
to certain portions of the Trial Examiner's Decision and supporting
briefs.
Pursuant to the provisions of Section 3(b) of the National Labor
Relations Act, as amended, the National Labor Relations Board has
delegated its powers in connection with this case to a three-member
panel [Members Fanning, Brown, and Jenkins].
The Board has reviewed the rulings of the Trial Examiner made
at the hearing and finds that no prejudicial error was committed.
The rulings are hereby affirmed. The Board has considered the Trial
Examiner's Decision, the exceptions and briefs, and the entire record
in this case, and hereby adopts the findings, conclusions, and rec-
ommendations of the Trial Examiner, with the modification noted
hereinafter.
Although finding that the Respondent had discriminatorily dis-
charged five employees, the Trial Examiner concluded that the dis-
charge of Felipa Palacios was proper because she had failed to obey
a direct order of Superintendent Taylor to report to the downstairs
office. However, a review of the context in which such alleged
"insubordination" occurred establishes to our satisfaction that she
too was a victim of a pretext discharge.
Felipa Palacios, an employee since 1953, was a leading organizer
and on Thursday, January 21, 1965, she distributed union cards and
booklets to employees. On Monday, January 25, she was directed
to report to President Mervin Finesilver in the plant's second floor
159 NLRB No. 80.