Mason City Dressed Beef

National Labor Relations Board - Board Decisions

Aug 30, 1977

231 N.L.R.B. 735 (N.L.R.B. 1977)

MASON CITY DRESSED BEEF
Mason City Dressed Beef, Inc., and Packing House
and Industrial Services, Inc. and Local P-38,
Amalgamated Meat Cutters and Butcher Work-
men of North America, AFL-CIO
National Industrial Workers Union and Local P-38,
Amalgamated Meat Cutters and Butcher Work-
men of North America, AFL-CIO. Cases 18-CA-
4893 and 18-CB-725
August 30, 1977
DECISION AND ORDER
BY MEMBERS JENKINS, MURPHY, AND
WALTHER
On December 29, 1976, Administrative Law Judge
Walter H. Maloney, Jr., issued the attached Decision
in this proceeding. Thereafter, all Respondents filed
exceptions and supporting briefs; General Counsel
and Local P-38, Amalgamated Meat Cutters and
Butcher Workmen of North America, AFL-CIO,
filed answering briefs; and Respondent Mason City
Dressed Beef, Inc. (herein MCDB), joined by
Respondent Packing House and Industrial Services,
Inc. (herein PHIS), filed: (a) a motion to set aside the
Administrative Law Judge's Decision and for a new
hearing, and (b) an accompanying brief.t Thereafter,
the Charging Party filed a motion to add, as a party
respondent, Iowa Beef Processors, Inc.; Respondents
i Respondent MCDB has moved for a hearing de novo before a different
Administrative Law Judge on the grounds: (I) that the Administrative Law
Judge who heard the instant proceeding is incapable of rendering an
impartial decision in a case involving counsel for Respondent MCDB; and
(2) because the Administrative Law Judge did not, in fact, give either
Respondent Employer a fair hearing. We have carefully considered these
two allegations and we reject them both. Counsel for MCDB bases his first
allegation on his involvement in a prior case, Farah Manufacturing Company,
Inc.. 214 NLRB 304 (1974), which was heard by the same Administrative
Law Judge involved herein. Additionally. counsel notes that the chief
participant in these proceedings for Respondent PHIS is a member of a law
firm which was also involved in the Farah Manufacturing case cited above.
We note that, while we disavowed certain of the Administrative Law Judge's
comments in Farah, we also found there that he was not biased against that
respondent. We see no reason to disqualify the Administrative Law Judge
here simply because he made injudicious comments in that decision.
Further, we have carefully considered the record and attached Decision.
and we reject Respondent Employers' claim that they did not receive a fair
hearing in this proceeding. We do, however, disavow the Administrative
Law Judge's comments appeanng at fn. 16 of his Decision.
2 Upon due consideration, the Charging Party's motion to add Iowa Beef
Processors. Inc.. as a party respondent at the present time is hereby denied.
:' Respondents have excepted to certain credibility findings made by the
Administrative Law Judge. It is the Board's established policy not to
overrule an Administrative Law Judge's resolutions with respect to
credibility unless the clear preponderance of all of the relevant evidence
convinces us that the resolutions are incorrect. Standard Dry Wall Products.
Inc.. 91 NLRB 544 (1950), enfd. 188 F.2d 362 (C.A. 3, 1951). We have
carefully examined the record and find no basis for reversing his findings.
The Administrative Law Judge held both Respondent Employers liable
for the various unfair labor practices he found, since he concluded that they
were joint successors, and joint employers. and that Respondent PHIS was
the agent of Respondent MCDB. As we agree with the Administrative Law
Judge's findings that MCDB and PHIS are successors to Iowa Beef
Processors. and that PHIS is the agent of MCDB, we do not pass on his
findings that the two are also joint employers.
231 NLRB No. 102
MCDB and PHIS submitted letters in opposition;
and the General Counsel filed a statement in
opposition to the Charging Party's motion.2
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the
National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
The Board has considered the record and the
attached Decision in light of the exceptions and
briefs and has decided to affirm the rulings, find-
ings,3 and conclusions of the Administrative Law
Judge, as modified herein, to modify his remedy,4
and to adopt his recommended Order.
The Administrative Law Judge found that, by
executing a collective-bargaining agreement with
Respondent Employers, Respondent NIWU violated
Section 8(b)(2) of the Act. We disagree. Since the
contract entered into did not contain a union-
security clause, we cannot find a violation of Section
8(b)(2) here5 and accordingly we shall dismiss that
finding of the Administrative Law Judge.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor
Relations Board hereby adopts as its Order the
recommended Order of the Administrative Law
Judge and hereby orders that the Respondents,
Mason City Dressed Beef, Inc., Mason City, Iowa,
As we agree with the Administrative Law Judge that the filing of
individual applications for employment was futile in this case, we do not
rely on his further intimation that, in a successorship situation. a union's
blanket application for reemployment of the predecessors' employees whom
it represents is always sufficient to establish the employees' legal entitlement
to such reemployment by the successor employer.
The Administrative Law Judge found that the recognition accorded
Respondent National Industrial Workers Union (herein NIWU) by
Respondent Employers was unlawful because PHIS' supervisors participat-
ed in the solicitation and distribution of NIWU authorization cards and,
when recognition was requested and granted, the current work force did not
constitute a representative employee complement. As we agree that there
was supervisory participation in the card solicitation sufficient to taint the
cards, and since this establishes the 8(aX2) violation, we do not pass on the
Administrative Law Judge's further finding that the work force did not
contain a representative complement of employees.
In fn. 15 of his Decision, the Administrative Law Judge found that
Charles Sykes was an incorporator and investor in PHIS. While Sykes
apparently played a major role in the formation of that corporation,
examination of the record reveals that he was neither an incorporator of the
company, nor had he invested any money in the organization.
In support of his finding that Respondent Employers violated Sec. 8(aX3)
of the Act, the Administrative Law Judge relied in part on the Board's
decision in Macomb Block and Supply, Inc., 223 NLRB 1285 (1976). While
Member Walther dissented in that decision, he finds the instant case
factually distinguishable and therefore joins his colleagues in adopting the
Administrative Law Judge's finding herein.
4 In accordance with our decision in Florida Steel Corporation, 231
NLRB 651 (1977), we shall apply the current 7-percent rate for periods prior
to August 25, 1977, in which the "adjusted prime interest rate" as used by
the Internal Revenue Service in calculating interest on tax payments was at
least 7 percent.
I Cf. Seaview Manor Homefor Adults, 222 NLRB 596 (1976).
735
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
and Packing House and Industrial Services, Inc.,
Mason City, Iowa, their officers, agents, successors,
and assigns, and the Respondent, National Industrial
Workers Union, its officers, agents, and representa-
tives, shall take the action set forth in the said
recommended Order, except that the attached notice
marked "Appendix A" is substituted for that of the
Administrative Law Judge.
APPENDIX A
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
WE WILL NOT recognize and bargain collective-
ly with National Industrial Workers Union as the
collective-bargaining representative of our pro-
duction and maintenance employees unless it
becomes certified by the Board after an election is
held.
WE WILL NOT give effect to any membership
application for National Industrial Workers
Union signed by our employees on or after
February 7, 1976.
WE WILL NOT give effect to a contract which we
signed with National Industrial Workers Union
on February 9, 1976, or to any extension or
modification of that contract.
WE WILL NOT assist National Industrial Work-
ers Union in obtaining membership applications
from our employees and WE WILL NOT assist it or
contribute support to it in any manner.
WE WILL NOT refuse to hire, threaten to refuse
to hire, or discriminate in any way against anyone
because he becomes or remains a member of
Local P-38, Amalgamated Meat Cutters and
Butcher Workmen of North America, AFL-CIO.
All of our employees are free to become and
WE WILL NOT in any other manner interfere
with, restrain, or coerce employees in the rights
guaranteed them by Section 7 of the National
Labor Relations Act.
WE WILL recognize and bargain collectively
with Local P-38, Amalgamated Meat Cutters and
Butcher Workmen of North America, AFL-CIO,
as the collective-bargaining representative of our
production and maintenance employees, and, if
we reach an agreement, we will embody the
agreement in a signed written contract.
WE WILL offer full and immediate reinstate-
ment to their former or substantially equivalent
position to all former employees of Iowa Beef
Processors, Inc., who were employed at the
remain members of that Union or any other
union.
Mason City plant when Iowa Beef Processors,
Inc., ceased its operations on January 31, 1976.
WE WILL make whole all of these former
employees of Iowa Beef Processors, Inc., for any
loss of pay they may have suffered because of the
discrimination which was practiced against them,
together with interest at 7 percent per annum.
MASON CITY DRESSED
BEEF, INC. AND PACKING
HOUSE AND INDUSTRIAL
SERVICES, INC.
DECISION
FINDINGS OF FACT
A. Statement of the Case
WALTER H. MALONEY, JR., Administrative Law Judge:
This case came on for hearing before me at Mason City,
Iowa, upon a consolidated unfair labor practice comp-
laint,' issued by the Regional Director for Region 18. The
complaint alleges that Respondent Mason City Dressed
Beef, Inc. (MCDB), and Respondent Packing House and
Industrial Services, Inc. (PHIS),2 violated Section 8(aX)(),
The principal docket entries in this case are as follows:
Charge filed by Local P-38, Amalgamated Meat Cutters and Butcher
Workmen of North Amenca, AFL-CIO (herein called Union), against
Mason City Dressed Beef, Inc. (MCDB), and Packing House and Industrial
Services. Inc. (PHIS), on February 13, 1976, and amended on March 1,
1976; charge filed by the Union against National Industrial Workers Union
(NIWU) on March 15, 1976; consolidated complaint issued on August 18,
1976: answer of Respondent PHIS filed on August 26, 1976; answer of
Respondent MCDB filed on August 30, 1976; answer of Respondent NIWU
filed on August 27. 1976; hearing held in Mason City, Iowa, on September
13 17, 1976; briefs filed by the General Counsel, the Charging Party, and all
Respondents on or before November 1, 1976. In addition. I was furnished
with a copy of a letter, dated September 20, 1976, from counsel for
Respondent MCDB to Mr. Thomas W. Miller, Jr., Director, Division of
Information. NLRB, in which counsel requested Mr. Miller to furnish him
"a copy of each administrative law judge's decision issued by Judge Walter
H. Maloney. Jr., since he became a Judge with the Board, as well as a copy
of the Board's Decision and Order, if any in each case." Mr. Miller declined
to honor the request on the basis that the Board does not index or catalogue
decisions in the manner required to fulfill the request.
2 Respondent MCBD admits, and I find, that it is an Iowa corporation
which maintains its principal place of business at Mason City, Iowa. I find
that at all times material herein MCDB has engaged in the production and
nonretail sale and distribution of beef and that, in the course and conduct of
such operations, it will annually purchase and cause to be transported to its
Mason City, Iowa, plant directly from points and places outside the State of
Iowa goods and materials valued in excess of $50,000, and will produce and
sell at its Mason City, Iowa, plant directly to points and places outside the
State of Iowa goods and merchandise valued in excess of S50,000.
Accordingly, Respondent MCDB is an employer engaged in commerce
within the meaning of Sec. 2(2), (6), and (7) of the Act.
Respondent PHIS is a Nebraska corporation which maintains its
principal place of business in Lincoln, Nebraska, and a place of business at
Mason City, iowa. At its Mason City, Iowa, place of business Respondent
PHIS will annually perform services for Respondent MCDB valued in
excess of $50,000 and will produce goods over $50,000 which will be shipped
directly from its Mason City, Iowa, place of business to points and places
located outside the State of Iowa. Accordingly, PHIS is an employer
736
MASON CITY DRESSED BEEF
(2), (3), and (5) of the National Labor Relations Act, as
amended. More particularly, it alleges that these Respon-
dents discriminatorily refused to hire 83 unionized indivi-
duals who had been employees of a predecessor employer
in the same employing enterprise; had intimidated and
coerced employees in the exercise of rights guaranteed by
Section 7 of the Act; and had unlawfully refused to
recognize and to bargain with the Charging Party as the
representative of their employees. The complaint further
alleges that the Respondents unlawfully assisted Respon-
dent NIWU to become the bargaining agent of their newly
hired employees and unlawfully recognized NIWU when
Respondents had not yet retained a representative comple-
ment of employees. As for Respondent NIWU, the
complaint alleges that it violated Section 8(b)(X1)(A) of the
Act by restraining and coercing employees in the exercise
of rights guaranteed by Section 7 of the Act and by
attempting to cause the Respondent Employers to violate
Section 8(a)(2) of the Act. Respondent Employers deny
any obligation to hire employees who had been employed
by an asserted predecessor who owned and operated the
plant in question, deny any obligation to recognize and
bargain with the employing Union, and deny the other
allegations contained in the complaint. Respondent NIWU
entered a general denial of the allegations of the complaint.
Upon these contentions, the issues herein were joined.3
B. The Unfair Labor Practices Alleged
Between 1969 and January 31, 1976, Iowa Beef Proces-
sors, Inc. (IBP), owned and operated a beef slaughtering
plant at Mason City, Iowa. IBP is a large midwestern
meatpacking operation, having its headquarters in Dakota
City, Nebraska. In 1969, it purchased the Mason City plant
here in question and a similar plant at Le Mars, Iowa, from
Blue Ribbon Beef Company. No sooner had IBP made
these acquisitions than it ran afoul of the antitrust laws and
was the subject of a civil suit filed on February 24, 1969, by
the Department of Justice in the U.S. District Court at Des
Moines. In this suit the Government requested the
divestiture by IBP of both the Le Mars and Mason City
plants. IBP and the Justice Department entered a consent
agreement, approved by the district court on March 23,
1970, by terms of which IBP undertook to divest itself of
ownership and control of both facilities. It sold the Le
Mars plant in 1974. However, its efforts to sell the Mason
City plant failed to bear fruit until the fall of 1975. During
the period of time between 1969 and January 30, 1976, IBP
continued to operate the Mason City plant and did so
pursuant to the terms and conditions of successive
collective-bargaining agreements with the Charging Party
which covered a unit of about 83 production and
maintenance employees. The most recent of these agree-
ments was concluded with the Union on August 7, 1974,
and was due to expire on January 1, 1977. 4
On October 31, 1975, the trustee appointed by the district
court filed a notice of proposed sale of the plant to Sam W.
Davis, a meat packer and entrepreneur from Dodge City,
engaged in commerce within the meaning of Sec. 2(2), (6), and (7) of the
Act. Both the Charging Party and Respondent NIWU are, respectively,
labor organizations within the meaning of Sec. 2(5) of the Act.
:' Errors in the transcript have been noted and corrected.
Kansas. Davis is a coowner of Hyplains Dressed Beef
Company, Inc., a meatpacking concern located in that city,
and is engaged in meatpacking and farming operations in
Kansas, Nebraska, and Oklahoma. The proposed divesti-
ture agreement called for a sale of the assets of the Mason
City plant to Respondent MCDB, a corporation yet to be
established but to be wholly owned and operated by Davis.
The purchase price was set at $1,750,000, payable to IBP
on the basis of no down payment by MCDB and equal
monthly payments over a period of 10 years, with interest
at 8 percent on the unpaid balance. IBP would retain legal
title to the premises during this period of time as a security
for the purchase price. IBP also proposed to enter into a
10-year slaughter agreement by the terms of which it would
agree to purchase the entire output of the Mason City plant
from MCDB on the basis of cost plus $1.50 per head.
MCDB would be given the right to terminate the slaughter
contract after 5 years and sell to the open market if at that
time it could pay off the amount still due under the plant
purchase agreement. If MCDB defaulted or elected to
terminate the agreement, IBP would receive the plant back
and would agree to place it in the hands of a court-
appointed trustee who would begin the divestiture effort
anew.
The district court held a hearing on the proposal on
December 18, 1975, in Des Moines and, on December 29,
entered an order approving the proposed IBP-MCDB
agreement, with minor modifications, and setting January
31, 1976, as the settlement date for the conclusion of all
arrangements. During the fall of 1975, a news article
appeared in the Mason City Globe Gazette indicating that
an offer had been made to purchase the plant. However,
nothing definite concerning the fate of the plant was
actually communicated to employees or the Union until
late in January. During January, Davis and IBP were still
negotiating the details of the transfer, an effort which was
punctuated with difficulties which rendered the consum-
mation of the agreement uncertain until a day or two
before the final date for settlement established in the
court's December 29 Order.
At the same time Davis was negotiating the details of a
plant sales contract and a slaughter contract with IBP, he
came into contact with Charles Sykes, a labor lawyer
employed by the firm of Nelson, Harding, Marchetti,
Leonard, and Tate. From time to time, Sykes had
represented IBP in various matters and was personally
acquainted with Arden Walker, IBP's vice president for
industrial relations. It was Walker who had overseen all
personnel and labor relations matters at the Mason City
plant during IBP's 6-year tenure of ownership. In Novem-
ber 1975, Sykes became an incorporator of Respondent
PHIS, an organization based in Lincoln, Nebraska, which
was organized for the purpose of providing business
operation and management services to plant owners who
prefer to farm out the responsibility for the day-to-day
operations of their plants. As of the time of the hearing,
PHIS had obtained and was performing about six plant
4 The Charging Party or its predecessor in interest was also the
recognized bargaining agent of Blue Ribbon's employees prior to the plant
acquisition by IBP.
737
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
operation contracts in three or four midwestern states in
the meatpacking and trucking industries. About January
18, Davis phoned Sykes at Sykes' home, noted that Sykes
had a client which was operating a meatpacking plant at
Fort Morgan, Colorado, and inquired of Sykes whether
PHIS would be interested in operating the Mason City
plant for MCDB. The following week Davis and Sykes met
by mutual agreement at the IBP headquarters at Dakota
City and were formally introduced at that time by Walker,
who permitted them the use of his office to discuss the
terms and conditions of a possible management agreement
between MCDB and PHIS. At that time, MCDB had not
as yet finalized the plant sale agreement with IBP so the
discussions between Davis and Sykes were conditioned
upon the success of Davis-IBP negotiations still in
progress. Part of the IPB-Davis discussion at Dakota City
included a paragraph-by-paragraph review by Davis and
Walker of the current collective-bargaining agreement
between IBP and the Union. Davis, who operates a
unionized plant in Dodge City, made a point-by-point
comparison of his Dodge City contract and IBP's Mason
City contract in this discussion with Walker.
During this same period of time and early in February,
Walker also discussed labor relations at Mason City with
Sykes as well as with Davis. In response to a specific
question from Sykes as to whether the supervisory staff at
Mason City could be relied on "if things got tough,"
Walker told Sykes that they were reliable. He also
informed Sykes that some of the employees at Mason City
were valuable and that some were not. He noted that over
the years the plant had experienced problems with labor
relations and absenteeism, and that these problems had
contributed in part to the unprofitability of the operation
during IPB's tenure in the plant.
On or about January 27, the Union obtained information
leading it to believe that the plant transfer to MCDB was
imminent. On that date, Ray Long, an International
representative and longstanding resident of the Mason City
area, sent a telegram to Davis at his place of business in
Dodge City, stating as follows:
We are advised that your company is taking over
ownership and operation of plant currently owned and
operated by Iowa Beef Processors in Mason City, Iowa,
Local P-38 AMC and BW of NA is the legally
designated and recognized collective bargaining repre-
sentative of the employees at this plant and those
employees are covered by collective bargaining agree-
ment with IBP for a current term ending January I,
1977. The contract provides that it continues in effect
for successors and assigns of IBP. We are available for
immediate meeting with you to discuss your employ-
ment plans and terms and conditions of employment.
Please advise of time and place convenient to you for
prompt meeting.
The telegram was never answered.
At or about the same day, Tony I. Fetter, another
International representative, contacted IBP for the same
I Art. XIX of the IBP-Union contract provided: "This Agreement shall
be binding upon the heirs, executors, and administrators, and assigns of the
parties hereto."
purpose. During the latter years of IBP's ownership of the
Mason City plant, Fetter had been the principal union
representative in contract negotiations and grievance
discussions and had become well acquainted with Walker,
IBP's principal spokesman on labor matters. Fetter spoke
by phone with Walker sometime in January and asked him
about the details of the proposed sale to Davis. Walker said
that no details had been worked out but that he hoped to
have the information requested on January 26, when the
parties were tentatively scheduled to meet in Mason City to
discuss grievances relating to the Mason City plant. The
January 26 meeting was postponed by mutual consent until
January 30. Fetter sent a telegram to Walker on January 27
which stated as follows:
We are advised that another company is taking over
ownership and operation of your Mason City plant.
Employees have been advised that this Friday will be
the last day of work under IBP operations until further
notice. We must have immediate meeting with you so
that we may be advised of facts necessary to determine
and effectuate employees rights under the contract
including facts with respect to the status and terms of
the transaction, what action IBP has taken to comply
with the successorship clause in our contract, what
plans and intentions IBP has with respect to the
announced shutdown of the plant. Please be advised
that we wish to discuss these things with you on our
scheduled meeting Friday, January 30.
On January 28, Fetter again called Walker to ask about the
sale. Walker said that the details had not been worked out.
Fetter informed Union Counsel Eugene Cotton of this
conversation and Cotton sent Walker a telegram demand-
ing to bargain over the effects of the shutdown.
On January 30, Walker, Francis Trupe, the plant
manager, and Edward M. Millard, the kill floor foreman,
met with Long, Fetter, and other union representatives.
Walker notified union representatives that the plant would
be closed that day. The meeting began by a discussion and
disposition of grievances pending under the Union-IBP
contract. Thereafter, Walker handed Fetter a letter which
was backdated to January 23, stating that IBP would be
available to meet and bargain with the Union concerning
the effects of the sale. Fetter objected that this was an
abrupt way of doing business since Walker had given the
Union no time to formulate proposals. Walker replied that
the details of the sale had only been finalized on the
preceding evening. Fetter asked Walker whether the
successorship clause in the IBP-Union contract meant
anything.5 Walker replied that he did not know what Sam
Davis would do but he thought that Davis was going to
close the plant in order to remodel it. Walker also
announced that Trupe was being retained as plant
manager. Fetter then advanced 'the thought that it would
be fruitless to talk further with Walker and that he should
be talking to Trupe, the agent of the new owner. Trupe
replied that he did not know enough to respond to Fetter's
questions and remarks and that Fetter would have to talk
738
MASON CITY DRESSED BEEF
directly with Davis. Fetter let Trupe and Walker know that
he wanted to talk with Davis.
Fetter asked Walker whether the Mason City employees
would be employed at other IBP plants. Walker's only
remark was that they could put in individual applications
and suggested sarcastically that they might want to apply
at Fort Dodge. (At that time, the Union was on strike at
the IBP plant in Fort Dodge.) Fetter declined this tongue-
in-cheek offer, saying that his people were not going to be
scabs. Walker stated that there were some employees at
Mason City he would recommend for employment. He also
informed Fetter that Trupe was the man to contact about
payment of hospitalization benefits and unpaid vacation
benefits. (In a letter to Mason City employees, distributed
the same day, Walker gave employees the addresses of
local insurance agents to contact for conversion of a group
life insurance policy and health insurance policy to
individual policies.) Walker told Fetter no one had
authorized him to offer continuity of employment and
expressed the opinion that the plant would be closed from
6 months to a year, whereupon Fetter asked that IBP
employees be used for cleanup work.
During the course of this discussion, Mel Peterson, the
Local chairman for the IBP unit, was summoned from the
room by a clerical employee and asked to quell a
commotion which had arisen in the plant. It appeared that
employees had not received their Friday paychecks at the
customary hour and had become upset. Peterson returned
to the room and demanded to know why paychecks were
being withheld. Walker told him the checks were being
withheld so that union officials could be notified first that
the plant was closing. Peterson became incensed but was
told by Fetter to calm down. Walker thereupon released
the paychecks and with them a letter informing each
employee of the plant closure and the above-mentioned
information concerning conversion of insurance policies.
On the afternoon of January 30, Long sent a telegram to
Sam Davis and directed it to the Hyplains Beef plant in
Dodge City. The telegram read as follows:
We have been advised by Iowa Beef Processors today
that the employees of the Mason City plant purchased
by you are no longer employed by IBP as of Saturday
midnight, January 31, 1976. As to this action we wish to
advise you that we consider these people now to be the
employees of Hyplains Dressed Beef. We are hereby
requesting a meeting with you at your earliest possible
convenience to discuss terms and conditions of employ-
ment.
Other attempts were made by union officials to contact
Davis by phone but these efforts were unsuccessful. Davis
did not return any phone calls nor did he respond to
Long's telegrams.
On the afternoon of January 30, Walker and Trupe
prepared a list of 20 or so IBP employees whom they
regarded as valuable employees. This list was furnished by
Walker to Sykes and was later the subject of discussion
between Trupe and Sykes. Trupe was kept on the IBP
payroll and in charge of the plant until February 6, at
which time he went on the payroll of PHIS in the same
capacity. During the week following the closing of the
plant, IBP shipped from the plant the completed product
which was in the storage cooler. Walker estimated that the
beef in question was worth about $200,000. On Saturday,
January 31, Davis and IBP went to settlement. Davis,
acting through MCDB, took control of the plant at
midnight on that date.
At the January 31 settlement, IBP and MCDB entered
into two contracts, one for the sale of the plant operating
assets and the other for the slaughtering of beef. Both are
of record and will only be summarized here. The Assets
Purchase and Sale Agreement transferred to MCDB
immediately the possession and usufruct of the Mason City
plant, reserving to IBP legal title to the premises as security
for the ultimate payment of the purchase price. Included in
the transfer were land, improvements, and machinery.
Excluded were cash on hand, trademarks, accounts
receivable, truck tractors and trailers, work in process and
inventory, and "all contract and contract rights," except as
noted, relating to the plant prior to or at the time of
closing. The stipulated purchase price was $1,750,000, to be
paid in monthly installments over a period of 10 years, with
interest accruing on the unpaid balance at the rate of 8
percent per annum. In the event that MCDB elected to
terminate the concurrently concluded slaughter contract,
the entire purchase price would become due and payable
immediately. Should IBP elect to terminate the slaughter
contract, which it could do only for good cause, then it had
the election to accelerate MCDB's payments or to require
the relinquishment of the premises by MCDB.
MCDB agreed to use its best efforts to operate the plant
continuously as a beef slaughter facility pursuant to the
slaughter contract, to maintain the plant assets in operating
condition, to maintain insurance on the assets, to keep the
property free from legal encumbrances which would cloud
the title, and to refrain from any merger or sale of MCDB's
assets (without IBP's prior written consent) which would
change the management, control, or ownership of MCDB
or of the plant operating assets.
Both parties warranted that the agreement should be
"binding upon the parties and their respective successors,
assigns, heirs and representatives." The agreement recited
that, if IBP should reacquire possession of the assets
because of MCDB's default, IBP would consent to the
appointment by the district court of another trustee
charged with the responsibility of carrying out the
divestiture contemplated in the outstanding consent de-
cree.
The contemporaneously executed slaughter agreement
provided that MCDB would sell and IBP would buy the
entire output of the plant. It further provided that IBP
could require MCDB to close the plant for 3 months out of
any 1 year. MCDB agreed to use its best effort to provide
IBP with 2,200 to 4,000 carcasses per week, but it would
not be held in default of its obligation if it were not able to
do so because of a host of natural and manmade
calamities, including picketing and strikes, if they were
above and beyond MCDB's control. Production was
limited to cows and fat cattle, and MCDB was obligated to
purchase cows that would yield 350 pounds dressed weight.
Hides and all byproducts of the slaughtering operation are
to become the property of IBP. MCDB was also obligated
739
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
to provide IBP salesmen with office space at the plant. For
its efforts, IPB was obligated to pay MCDB on the basis of
cost plus $1.50 per head. An involved formula, including
the appointment of a cost control committee when
necessary, was set forth to determine just which costs are to
be borne by IBP and which are to be met by the $1.50-per-
head payment. MCDB was assigned the responsibility to
build a network of purchases so that it could buy livestock
directly from farmers and dealers. Upon advance notice
MCDB might terminate the slaughter contract on January
31, 1981, upon payment of the balance due under the
Assets Purchase and Sale Agreement, but its failure to
exercise the option on that date will result in the entire
contract proceeding to a full term of 10 years.
While all hourly rated employees were dismissed, all
supervisory and clerical employees were notified by Trupe
to report to work as usual on Monday, February 2, and
they did so. During the first 2 or 3 days of this week,
engineers employed by MCDB were inspecting the plant
for the purpose of making designs, recommendations, and
estimates for the remodeling of the plant. Their ultimate
recommendation to Davis indicated a possible expenditure
on his part of about $500,000. Davis spoke by phone with
Sykes early in the week, told Sykes of the costly expendi-
ture that would be required to remodel the plant, and
indicated that the expense was out of the question. Both of
them agreed to put the plant into operation as soon as
possible and agreed to meet in Mason City on Thursday to
work out a written agreement between PHIS and MCDB
concerning the operation and management of the plant.
The PHIS-MCDB contract concluded by Sykes and
Davis was executed on February 5. Since it is also on
record a brief summary of its major provisions will suffice.
PHIS agreed to staff and operate the Mason City plant as a
beef slaughtering facility and to employ all persons who
were employed in this regard at Mason City, with the
exception of a few individuals whom MCDB or IBP wished
to station on the premises. The contract contains a
disclaimer that:
No agent, officer, employee, or servant of Packing
House & Industrial Services, Inc., shall be deemed to
be an employee agent, or servant of Mason City
Dressed Beef, Inc. No agent, officer, employee, or
servant of Mason City Dressed Beef, Inc., shall be
deemed an employee, agent, or servant of Packing
House and Industrial Services, Inc. Mason City
Dressed Beef, Inc., is interested only in the results
obtained under this agreement; the manner and means
of conducting the work are under the sole control of
Packing House and Industrial Services, Inc.
MCDB retained the responsibility for procuring livestock.
MCDB also became obligated to pay a $25,000 service fee
to PHIS immediately upon the execution of the agreement
and a weekly service fee thereafter, computed on the basis
of the cost of operation plus $800. The costs which form
the basis for the basic weekly fee include wages, salaries,
fringe benefits, social security contributions, payroll prepa-
ration, unemployment and workmen's compensation con-
tributions, and similar or related items. Either party is free
to terminate the agreement upon giving the other 10 days'
written notice.
While Sykes was in the process of finalizing his
arrangement with Davis, he also began recruiting employ-
ees to begin the operation. Sykes set as his immediate goal
the opening of the plant with employees of his selection,
working under terms and conditions which he established.
He admittedly expected trouble from displaced IBP
employees. On February 5, Sykes hired Trupe and placed
him on the PHIS payroll, informing Davis of this selection.
Trupe and others in management went to a backlog of
local job applicants contained in the IBP personnel files
and phoned two or three persons whose names appeared
on applications, asking them if they would like to do
"cleanup work" at the plant. Applicants who agreed were
told to report to work early Saturday morning, February 7.
Sykes told Trupe not to recall any former employees who
had actually been on IBP's payroll. Trupe opined that
Sykes did not want to recall any of them "because we
figured we would have enough trouble, anyway...."
PHIS also sought to obtain employees from the Iowa
Department of Employment Security. The Union urged the
department not to make any referrals on the basis that a
labor dispute was in progress. The Union also requested of
the department that, if it did make job referrals to the
plant, that it send former IBP employers. The department
decided not to refer any applicants to PHIS.
During the early part of the same week, Long, Peterson,
and several other IBP employees who were local union
officials went to the plant to speak to Trupe. They met
Trupe on the stairs of the plant. Long asked Trupe whether
he had anything to tell them about the plant closing and
also asked Trupe if he did not think he owed the employees
something. Trupe said he did not owe the employees
anything, ordered the individuals there present to leave the
premises, told them not to come back, and further
instructed them to keep union members away. On the
following day, Trupe sent clean laundry, consisting of
privately owned work clothes of former IBP employees, to
the union hall for distribution to the owners.
In addition to local hiring, Sykes made considerable
effort to recruit unemployed workers who resided in the
Omaha area, some 265 miles from Mason City. Sykes
called an acquaintance, Tim Runyon, an official of the
American Beef Packers, and asked him for his assistance in
recruiting 30-35 men from Omaha to work at the Mason
City plant. Runyon agreed and in turn enlisted the
assistance of another American Beef Packing Company
employee, Art Davis. Sykes paid Runyon and Davis a total
of $4,500 for their recruiting efforts. Runyon and Davis
recruited about 30 employees, promised to pay them $500
plus expenses for working the first week and $5 an hour
without expenses thereafter. On February 5 and 6, three
vanloads of unemployed men from the Omaha area drove
to Mason City in vehicles rented by Sykes or persons acting
on his behalf and registered at the R-Motel in Garner,
some 20 miles west of Mason City. Sykes personally
arranged for these motel accommodations and picked up
the tab. Along with the handful of local recruits, they came
to the plant early Saturday morning, February 7, to begin
work.
740
MASON CITY DRESSED BEEF
All applicants were processed for employment in the
locker room at the plant. Job application forms and W-4
forms were passed out, signed, and returned by prospective
employees to the company officials who distributed them.
At or about the same time, and before any work began, two
unidentified men showed up in the locker room, asked the
employees in question if they wished to join a union,
assured them that they did not have to do so if they did not
want to, passed out blue union designation cards which
contained language authorizing the Respondent National
Industrial Workers Union to act as bargaining agent.
These cards were also signed by the job applicants and
were returned immediately. Three witnesses testified that
the individual who handed them union cards wore a green
or blue helmet. Two others testified that the individuals
who handed them union cards wore a yellow or orange
helmet. From these descriptions and from the color code
which is in use at the plant with respect to helmets, 6 as well
as from the fact that the events occurred on company
premises in the course of the hiring-in procedure, I
conclude that the distribution and collection of union
designation cards as to these individuals and to others who
were with them was made by agents of Respondent PHIS.
Only a few of the new recruits had ever worked in a
packing house before and none, or almost none, had done
packinghouse work which required the use of a knife. No
extended formal training or instruction was given to any
employee on Saturday. They were just issued boots, knives,
and helmets and were told to report to various parts of the
plant where a supervisor or some other employees gave
them cursory on-the-spot instructions about what they
were to do. Some employees refused to work with a knife
and were assigned other jobs. By all accounts, the morning
kill was a mild disaster, a fact which Trupe attributed to
the lack of experience of the men employed. Hides were
scored, meat was hacked up, offal was lost, and production
was incredibly slow. In a plant which normally produced
400-500 head of dressed beef in an 8-hour day, Saturday
morning's 4-hour shift yielded 42 head.
Later the same morning, Pat Hagen, a representative of
NIWU, appeared in the plant office and spoke to Sykes.
She told Sykes that she and George (meaning George West,
the attorney for NIWU), had "finally got this place
organized" and handed Sykes about 35 designation cards.
Sykes asked Mrs. Hagen what kind of unit they wanted
and she said a P & M unit. Sykes said he would talk to
West about the demand.
Trupe drove Sykes to the airport shortly after the plant
closed at noon. During that trip Sykes told Trupe that they
would have to recognize the NIWU. Sykes flew to Des
Moines on the same afternoon and visited West, who was
hospitalized with a broken jaw. Sykes met with West in his
hospital room where they discussed the terms and condi-
tions of a labor contract. Sykes told West that he wanted a
basic wage rate of $5 per hour, which was the rate Sykes'
agents in Omaha were offering the men who were recruited
for employment at Mason City. Sykes also told West that
" Both PHIS and IBP employ a helmet color code at Mason City for the
purpose of identifying various categories of employees. Plant Manager
Trupe and Plant Engineer Jerry Saathoff wear green helmets; foremen wear
yellow: utility men wear blue: maintenance men wear grey: and production
employees wear white.
he wanted the "Amarillo" language, meaning the text of a
contract which the Teamsters had concluded in Amarillo,
Texas, with IBP. West agreed. Sykes went to his office,
took portions of the Amarillo contract, cut and pasted it to
sheets of yellow paper with revisions applicable to Mason
City, and returned to West's hospital room on Monday
morning with the completed document. It was executed at
this time and in the form indicated.
On Saturday afternoon, Larry Bucci, a former IBP
employee and the Union's chief steward at the Mason City
plant, received word from Mel Peterson that slaughtering
operations had taken place that morning. Bucci phoned
Richard Mammen, whowas assistant foreman of the kill
floor for IBP and who occupies the same position of PHIS.
Bucci inquired of Mammen whether his information from
Peterson was correct. Bucci, who is a longtime friend of
Mammen, also asked him if he would meet him that
evening at the home of a friend. Mammen agreed to do so.
About 6:30 p.m., Mammen met with Bucci, Peterson, and
Raleigh King, Local P-38's recording secretary, at the
appointed place and they discussed what had transpired.
Mammen told them that about 30-35 recruits had been
brought in from Omaha and that he did not know they
were coming. He also stated that he and Bill LeDuc, the
cleanup foreman, did not think that what was happening
was right. Mammen told Bucci and friends that PHIS had
a 3-year contract to operate the plant and related that the
slaughtering that morning had gone badly. Only 42 head
had been killed, hides had been scored and ripped apart,
and meat was dropped. Mammen expressed the feeling that
he was fed up and about ready to quit. Bucci asked
Mammen why the IBP employees had not been hired back.
Mammen stated that, at some point in the distant future,
some 15-20 former IBP employees would be rehired but
that no union officers, past or present, would ever be
rehired. He said that the Company would operate the
following Monday and that six IBP plant security guards
from Dakota City would be on hand. Upon further
questioning by the IBP employees present, Marnmen said
he did not know the names of any of the men who had
worked that day and that he was just referring to them by
locker number.'
On Monday morning, a large crowd of former IBP
employees gathered at the entrance to the plant. They
continued to gather at this point in a similar manner each
working day for the next 3 weeks. They did not formally
picket the plant but they spoke with and, from time to time,
shouted and engaged in catcalling at persons who reported
to work at the plant. Three van loads of out-of-state
recruits who had worked on Saturday returned to go to
work on Monday morning but did not actually go to work.
In fact, PHIS evidence on the record indicates that beef
production took place only on the final 3 days of the
workweek beginning February 9.
While the record in this case discloses no specific
incident or episode of physical violence, many of the
Omaha-based employees testified that they did not want to
7 Mammen, who was summoned to testify by the Respondent, essentially
corroborated the version presented by the General Counsel's witnesses.
741
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
continue to work at the plant because of fear of reprisal by
displaced IBP employees. After lingering on the premises
for an hour or two, they informed PHIS' management that
they did not want to work. They returned to the R-Motel
and met with Sykes that afternoon. Sykes finally struck a
deal with them by which he would pay those who remained
for the week the already promised $500, while those who
elected to return to Omaha immediately would receive
$200. Most returned to Omaha on Monday afternoon. A
few new Omaha-based recruits arrived on Tuesday and
worked out the week. In 2 or 3 weeks, all but two or three
of those hired on February 7 from any source had quit.
On February 9, Fetter and Longsent identical telegrams
to Hyplains Dressed Beef at Dodge City and to Sykes and
MCDB at the plant in Mason City. The telegrams read:
We understand that you have resumed operations at
the Mason City plant previously operated by Iowa Beef
Processors Incorporated. You have not offered employ-
ment to any former employees. This will confirm that
all production and maintenance employees who were
employed at this plant by Iowa Beef Processors are
available for continued employment by you and we
hereby make application to you on their behalf for
employment at this plant.
PHIS's efforts in obtaining permanent employees in the
next few months was not marked with success. It placed
want ads in several local newspapers published within a
radius of 40 miles of Mason City and also ran ads for
employees on television. While the want ads introduced in
the record called for permanent, full-time employees, none
indicated a requirement by PHIS for experienced slaught-
erhouse employees. During the next 3 months, PHIS hired
nearly 200 persons for a unit normally employing slightly
over 80 persons. Most of the new hires quit voluntarily. Of
the employees on the PHIS payroll in September at the
time of the hearing, only one was hired before February I 1.
Of those still working at the time of the hearing, a
breakdown by date of hire during the first 3 months of the
PHIS operation indicates as follows:
Hired
Before Feb. 11 1
Feb. 11-13 8
Feb. 16-20 25
Feb. 23-27 2
Mar. 10
Apr. 6
Total - Feb. - Apr. 52
As discussed later, PHIS began to rehire some former IBP
employees after May 10. As of September 1976, some 12
former IBP employees had been hired by PHIS, I of whom
was taken on as cleanup foreman.
During the first weeks of the PHIS operation, parties to
this dispute took to the media to voice their respective
" The reference to Armour is an allusion, well known locally, to the fact
that a large Armour packing plant, which employed about 1,200 people in
the Mason City area, had closed its plant the previous year and laid off most
positions and otherwise to appeal for public support. An ad
was placed by the Union in the Mason City Globe Gazette,
signed by "former IBP employees" which recited the
background of the antitrust suit and complained about the
injustice suffered by the failure of PHIS to rehire IBP
employees. It stated, in part:
The work force had no hint that the new owners
intended to operate with new employees until the last
day of operation under IPB on Friday, January 30,
when they received a letter with their paychecks. When
the company was pressed for a statement as to the
status of the workers and how long they would be
unemployed, the Company replied that it was no longer
the concern of IBP and that the new owner would have
to decide these things. IBP representatives indicated
that extensive remodeling would take place, and the
plant might be closed for as much as one year.
Repeated telegrams and phone calls to the new
owner produced no response, and in fact no acknowl-
edgment that they were ever received.
Finally, on Saturday, February 7, the company killed
42 head of cattle with workers brought in by rented
vans bearing Nebraska license plates. If they had
intended to operate, why did they not call the regular
employees? We had indicated our availability for work.
We have repeatedly said that the entire production
and maintenance force is ready and available for
employment. We have stated that we would like a
meeting to discuss terms and conditions of employ-
ment. This remains our position.
They also passed out a leaflet at the plant gate which
read as follows:
People of Mason City
We Need Your Help
We were told Friday, January 30th that we were no
longer employees of Iowa Beef Processors and that
another Company was taking over. We have tried to
contact the new owner, but they will not talk to us.
Saturday, February 7th, the new owner reopened the
plant without any of the past employees. We were not
even approached about the opening. Last week we were
told to stay off the property. They brought in men from
out of town to work. We cannot understand how men
who have put up to twelve years of service into this
plant can just be pushed out in the street.
We need your support! First Armour . . . Now
us! Contact the Mayor and Your Councilman8
Help Us Get Our Jobs Back
In a television interview over Station KGLO by reporter
Max Lee, Mel Peterson stated on February 11 that "we feel
that we had a successor clause in the contract, and that the
employees out there are ready to go back to work and
willing to go back to work. And we will be more than
of its employees. These employees also belonged to the Union. In the
ensuing months, a few former Armour employees were hired by PHIS.
742
MASON CITY DRESSED BEEF
happy to negotiate everything else as long as we can get our
people back to work; and if Mr. Skyles [sic] would want to
sit down and talk to us, we would be more than willing to
negotiate everything else." When asked if he thought that
the successorship clause would hold up in court, Peterson
replied that it would. When pressed to say whether
employees would be willing to go to work under present
conditions on a wait-and-see basis, Peterson replied: "No,
I think that . . . Let me put it this way. We are willing to
go back to work; and if Mr. Skyles [sic] would want to talk
about anything else, we would be willing to sit down and
talk about everything." When Peterson was asked as to
whether employees would go back to work at $5 an hour,9
he replied: "We'd be willing to talk about it. The thing is
here, Mr. Skyles [sic] said that he would talk to us as long
we were out there in a social gathering. Well, it is my
understanding that they did kill 42 head of cattle Saturday.
I don't think - or I do not believe anybody was out there
at the time; and not one person that worked there before
was called to come to work. . . Yes we have. That is why
all the people that worked there before are concerned.
They're just like concern citizens. They're willing to go
down there every morning, and they're willing to wait until
Mr. Skyles [sic] sees fit to talk to them."
In another television interview on February 9, Long
stated that the Union's next move "is to continue to try to
contact the new owner to set up a meeting. The contract
with Iowa Beef has successors and assigns clause, and we
feel that's enforceable; and we want to sit down with the
new owner and talk about it."
On the employer side, Sam Davis was on the same
television news show on February II. After reviewing his
extensive experience in the meatpacking industry and in
large-scale farming, Davis confirmed that he was the sole
stockholder in MCDB, indicated that he had a packing-
house equipment manufacturer's representative and a
draftsman in the plant to make recommendations concern-
ing a major renovation but, because of the cost, he decided
to "fire up the feeder operation a little bit" and then decide
how etensive the remodeling program would be. When
asked if he was looking forward to operating in Mason
City, Davis replied, "Very much . . . the plant is a real
challenge in the fact that I am - I didn't believe it myself
and probably most people don't - is that the plant has
never made anybody any money. And after I go into the
IBP records, I couldn't - I didn't - believe that the plant
was an impossible plant prior to getting IBP's records. The
plant has never made any money and that's the kind of
challenge that I like . . . I want to see if we can't put it on-
stream and put on-stream right to make some money out of
it."
Sykes was interviewed on KGLO television news the
same day. In response to questioning, he stated during his
interview that the Company had hired 35 new employees
and was advertising locally and regionally for more. Sykes
acknowledged that the Union had sent the above-refer-
" The base rate of IBP employees at the time of the plant closing was
$5.73 including fringe benefits. More skilled employees were paid on the
basis of higher bracketed rates which progressed in increments of 5 cents per
hour.
a} From the description given hs Gonzales, including the fact that the
f;ireman in question wore a yellow helmet, I conclude that the conversation
enced telegrams, containing language to the effect that
former IBP employees were willing to come back to work,
but stated that he was hiring on the basis of individual
applications. Sykes further said that he had received no
demands "on the employer here" to sit down and talk with
the Union and added that the current employer was not
legally obligated to do so. He also asserted that the Union
had demanded that the current employer honor the former
IBP agreement and stated that he clearly would not,
adding that the Union did not represent the employees who
were currently employed at the plant. When asked who was
operating the plant, Sykes said that it was not Hyplains
Dressed Beef. "Mason City Dressed Beef is the operational
company here, and they have contracted with Packing
House Industrial Services to operate the plant."
During the month of February, while the entire situation
was in the state of flux and confusion described above,
various individual employees had illuminating conversa-
tions with a number of PHIS supervisors relating to their
status or to the operation of the plant. New employee
Francisco Gonzales had a conversation during the first
week or so of the PHIS operation with a foreman "named
Dick" who wore a yellow hat. Later, Gonzales changed his
identification to say that the foreman in question was
named "Bill." 'o The foreman in question told Gonzales
that the Company was hiring new employees because it did
not want to have the Union back in the plant. On or about
February 24, Bucci ran into LeDuc at a bowling alley
where they had a couple of beers together. Bucci asked
LeDuc in the course of their conversation if there was any
way that any of the IBP employees could get back to work
with PHIS. LeDuc told him that some 15 or 20 employees
would be hired at some time in the distant future but that
no union officers would be rehired. LeDuc also told Bucci
that Arden Walker was still running the show. He repeated
to Bucci a conversation in which Walker reportedly stated
that the work force, then at 130, should be reduced to
about 104 before starting any union procedures.
Early in February, three out-of-work employees who had
worked IBP, Dennis Heglund, King, and Peterson, asked
Foreman Edward M. Millard for letters of recommenda-
tion. On February 3, Millard gave each of them short
handwritten recommendations. In the case of King,
Millard stated, "Raleigh King has proven to be very
reliable, honest, and extremely good worker. I had known
Raleigh for five years and he has held several different
jobs. I would highly recommend Raleigh King." The other
notes were of similar import. Millard later told King that
he had "caught hell" from Trupe for giving out letters of
recommendations since issuing such letters was against
company policy. On or about February 14, Raleigh King
had a conversation with William LeDuc at King's house.
LeDuc had dropped by in the company of another
employee, Gary Mariner. LeDuc told King that he was
glad that the union demonstration was peaceful and
expressed to King the opinion that he knew that the
in question was with Foreman Bill LeDuc. Gonzales' personal description of
the foreman in question fits that of LeDuc. Moreover. the color of the
helmet worn by the speaker identifies him as a foreman, even apart from a
further personal identification. LeDuc. who still works for PHIS, was not
called to testify.
743
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Company was trying to break the Union. He told King that
the black employees who had been brought to Mason City
from Omaha were just being used as "guinea pigs" to see if
union sympathizers would start trouble with them."
During the first week of the PHIS operation, Mammen
told Peterson in front of the plant that Sykes and Trupe
had instructed foremen to recruit two new employees per
day until the "kill got running." Mammen and LeDuc
reportedly protested this policy but to no avail. During the
same week, LeDuc told Peterson when they were together
at LeDuc's house that the night cleanup operation was
terrible and that he had asked Trupe for permission to
rehire Don Hewee. Trupe told LeDuc he would have to
check out the request with Arden Walker. Later, Trupe
reportedly told LeDuc that he could not hire Hewee
immediately but that possibly he could do so in 2 or 3
months. LeDuc stated that he would like to have his entire
cleanup crew back to work. He also expressed to Peterson
the same opinion he gave to Bucci; namely, that Walker
was still calling the shots at the plant. In a later phone
conversation with Peterson, LeDuc reported the remark
made by Sykes to the effect that it had been a mistake to
import workers from Omaha to Mason City but that he
thought he could cover up the mistake.
Early in March, after the charges in this and other cases
had been filed with Region 18, Sykes decided to withdraw
recognition from NIWU until such time as its status as
bargaining agent was free from controversy. There is no
question that, during the period of its brief incumbency,
NIWU did not perform the normal functions of a
bargaining agent. It did not appoint stewards, process
grievances, or collect dues. During the spring and early
summer of 1976, another labor organization in which West
was also the principal leader and activist began to solicit
membership from newly hired PHIS employees. This
group, calling itself the United Industrial Packinghouse
and Allied Workers Union, obtained authorization cards
and held a meeting or meetings of PHIS employees in
Mason City at which West was the main speaker. It
appointed stewards and has sought recognition and
bargaining. Its inplant spokesman and West attempted to
meet in Des Moines with Sykes but a scheduled negotiating
meeting did not materialize. Neither of the Respondent
Employers currently recognizes this organization as the
bargaining agent for the Mason City employees.
As previously indicated, PHIS continued to hire employ-
ees on a large scale. It also continued to lose employees,
either by discharge or voluntary quit, almost as fast as they
were hired. As the summer wore on and a stable
complement of employees had acquired packinghouse
experience, production increased. However, PHIS has
frequently operated the plant on a 6-day week in order to
boost its output. Davis visits the plant several times a
month and his principal conversation with Trupe normally
relates to ways and means of increasing production.
On or about March 24, the Union held a meeting and
discussed, among other things, whether former IBP
employees should accede to the PHIS requirement of
making individual applications for reemployment, or
1l As noted above, LeDuc was not summoned by the Respondents to
testify. Accordingly, I credit King's uncontradicted version of this
conversation.
whether they should hold fast to the position that the
February 9 telegram from Long and Fetter to all principals
constituted a sufficient application. At the time, the
membership decided not to make individual applications.
However, by the first of May, various employees, with
union assent, began to file with PHIS individual applica-
tions for employment. Between May I and September 11,
some 23 former IBP employees had filed such applications.
This number included Larry Bucci. During that period of
time 12 former IBP employees were rehired and two more
were offered employment but declined. Bucci has not been
hired nor has any other union official who worked for IBP.
In its memorandum and order dated December 29, 1975,
the district court set January 31, 1976, as the final date for
closing of the divestiture sale. In that order, the court
stated:
Prior thereto, the parties shall prepare final drafts of the
purchase agreement, slaughter contract and other
written instruments (including bills of sale for inventory
or equipment, assignments of existing labor and
industrial track agreements, title opinions and the like)
which may be necessary for the transfer of all rights
and interests.
The executed contracts were not filed in the records of the
district court until late in February. No assignment of the
collective-bargaining agreement, as contemplated by the
above-recited order, was ever executed.
On March 12, 1976, and prior to the final ratification of
the sale by the court, the Union sought to intervene in the
antitrust proceedings in order to protect the interests of the
IBP employees who had been discharged. In its petition for
intervention, the Union recited its standing as bargaining
agent for IBP employees, the existence of the outstanding
agreement with IBP, and the fact that the agreement
contained a successorship clause. It also recited the text of
the above-quoted provision of the December 29 order of
the court and complained that no assignment to the
collective-bargaining agreement had been made or filed,
despite the express direction of the court. The Union also
complained to the court that the new owner of the plant
was not employing former IBP employees, that it was
operating with a totally different work force, and that the
Union had received no response from its various efforts to
gain recognition from the new owners. It asked the court to
require a continuation by the new owners of the employ-
ment of IBP employees, under the continuing provisions of
the contract for the balance of its current term, and to
require the new owners to grant the Union recognition as
the bargaining agent of all hourly rated employees working
at the Mason City plant.
In a Memorandum and Order dated March 19, 1976, the
court ratified the Trustee's Final Report of the divestiture
sale. It also denied the Union's motion for intervention,
stating that the motion was untimely, there was no showing
that the Government had failed to protect the public
interest in the purpose of the divestiture suit, and the relief
sought by the Union was collateral to the purpose of the
744
MASON CITY DRESSED BEEF
suit. The court, citing San Diego Building Trades Council v.
J.S. Garmon, 359 U.S. 236 (1959), also held that the Board
had exclusive jurisdiction to grant the relief sought by the
Union in its petition for intervention and noted that unfair
labor practice charges had already been filed. In response
to the Union's contention that the December 29 Order
required the assignment by IBP of the existing collective-
bargaining agreement to the new purchases, the court
stated that the language of its Order cited above "was
intended merely to suggest the types of instruments which
the purchaser (MCDB) might want to request, in order to
assure that it would receive all the rights necessary to
operate the plant. The Court did not intend to direct that
any particular contracts should be entered into other than
the Assets Purchase and Sale Agreement and the Slaughter
Contract, which are the basis of the divestiture and are the
only instruments mentioned in the offer by MCDB which
was accepted by the Trustees."
C. Analysis and Conclusions
I. PHIS and MCDB as successors to IBP
The General Counsel and the Charging Party urge, inter
alia, that PHIS and MCDB be deemed successors to IBP
and that they be subjected to a bargaining order, requiring
them to recognize the Union and bargain with it as the
collective-bargaining agent of the Mason City employees.
Neither party supporting the complaint contends before
me that PHIS and/or MCDB is an alter ego of IBP, a legal
conclusion which would justify a remedy requiring the
assumption by these Respondents of the IBP-Union
contract. The contract in question is due to expire on
January I, 1977, and before any Board order could
reasonably be expected to be issued. Hence, the reliance by
these parties upon a legal theory which would support
results limited to a bargaining order has pragmatic as well
as academic virtues.
In N.L.R.B. v. Burns International Security Services, Inc.,
406 U.S. 272, 291 (1972), the Supreme Court had occasion
to review the results which flow from an application by the
Board of its successorship doctrine. The Court noted
essentially three results which can follow from the litigation
of a successorship claim - an existing contract can under
some circumstances be imposed upon a successor; a
successor can acquire a business free and clear of an
existing collective-bargaining agreement but can be re-
quired to recognize and bargain with an incumbent union;
or a sale and purchase transaction can be at such distant
arm's length that no successorship obligation of any kind
will arise. The Court stated [406 U.S. 272 at 201]:
Also, in a variety of circumstances involving a merger,
stock acquisition, reorganization, or assets purchase,
the Board might properly find as a matter of fact that
the successor has assumed the obligations of the old
contract [citing cf. Oilfield Maintenance Co., Inc., 142
NLRB 1384 (1963)]. Such a duty does not, however,
ensue as a matter of law from the mere fact that an
12 In Burns, see 406 U.S. 280, 281, fn. 5; in HowardJohnson, the reference
to this Burns footnote is set forth above.
employer is doing the same work in the same place with
the same employees as his predecessor.
A few years after Burns, the Supreme Court stated in an
arbitration enforcement case [Howard Johnson Co., Inc. v.
Detroit Local Joint Executive Board, Hotel & Restaurant
Employees & Bartenders International Union, AFL-CIO,
417 U.S. 249 at 254, fn. 8 (1974)] that a bona fide purchaser
of the assets of a business had no obligation to hire the
employees of the predecessor, but added the caveat that:
Of course, it is an unfair labor practice for an employer
to discriminate in hiring or retention of employees on
the basis of union membership or activity under §
8(aX3) of the NLRA. Thus, a new owner could not
refuse to hire the employees of his predecessor solely
because they were union members or to avoid having to
recognize the Union. See Burns, supra, 406 U.S. at 280-
281, fn. 5.
In both of these cases, the Court cited with approval, either
directly or by clear reference, an earlier Board decision in
Piasecki Aircraft Corporation, 123 NLRB 348 (1959), enfd.
280 F.2d 575 (C.A. 3, 1960).12
The well-settled test of whether a successorship exists has
been enunciated in many Board decisions and turns on
whether the former employing enterprise has been substan-
tially continued in existence by the new owner. Johnson
Ready Mix Co., 142 NLRB 437 (1963); Cagle's Inc., 218
NLRB 603 (1975); J.R. Sousa & Sons, Inc., 210 NLRB 982
(1974); Foodway of El Paso (1974), a Division of Kimbell
Foods, Inc. 201 NLRB 933 (1973); Maintenance, Incorporat-
ed, 148 NLRB 1299 (1944); J. Howard Jenks, d/b/a
Glendora Plumbing, 172 NLRB 1700 (1968); The Bell
Company, Inc., et al. d/b/a Endurall Products, 225 NLRB
474 (1976). The Board looks to whether similarities exist
between the new and old enterprise in such matters as type
of goods produced, the manufacturing processes, location,
management, suppliers and customers, employee comple-
ment, and machinery and fixtures. In this case, the new
enterprise is located in the same building as the old and
utilizes the same machinery, with the sole exception that
tripe is no longer saved during the course of the slaughter-
ing operation so the tripe machine has been removed. The
new enterprise retained all of the management, superviso-
ry, and clerical employees of IBP.13 Only in the failure of
the new enterprise to retain a majority of the former
employees, a question to be discussed later, is there any
factor in this case which would not on its face fill out a
clear picture of successorship. The Mason City plant
presently produces the same items it did under IBP,
namely, dressed beef coming from either cows or fat cattle.
Trupe, the general manager, testified that it uses the same
manufacturing process. Its suppliers are essentially the
same, namely, farmers and cattle auctions. Moreover, IBP
has an even closer relationship to the new enterprise than
the ordinary seller of a business, who, in most Board cases
on the subject, takes his money and walks away. IBP
actually retains title to the premises to secure the purchase
price by the vendee and has, in fact, financed the purchase
1: The IBP office manager, Sherlene Ulrick, remained, but as an
employee of MCDB.
745
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
by the vendee in a no downpayment sale. IBP also may
take, and is entitled to, the entire output of the plant,
having a relationship to the present enterprise which, in
other industries, would cause the Mason City plant to be
designated a "captive facility." IBP's influence with the
new enterprise is still so pervasive that, late in March, IBP
was able to tell the present PHIS plant manager to switch
the entire plant production from the slaughtering of cows
to the slaughtering of fat cattle. Walker admitted in his
testimony that IBP has a continuing financial interest in
the well-being of the plant, and indeed it does, since,
should MCDB default in its obligations, IBP would find
itself once again with complete ownership and operating
control of the business, subject to another divestiture effort
by a trustee appointed by the U.S. district court. IBP can
also regain control should MCDB's sole owner, Davis, die,
go bankrupt, or become totally disabled. There is little
doubt that MCDB, with whom IBP is in privity of contract,
is a successor to IBP. IBP's control over MCDB is so
complete that MCDB, a separate corporation, may not,
under the terms of the contract of sale with IPB, change its
chief operating officer (Davis) without IBP's consent.
MCDB must submit to an audit of its books by IBP and
must refrain, except upon prior written consent of IBP,
from any merger, acquisition, consolidation, or sale of
MCDB's assets which would materially change the man-
agement, control, or ownership of MCDB or of the plant
operating assets. In light of these considerations, there can
be no doubt that MCDB is, at the very least, a successor to
the employing enterprise which was operated by IBP.
MCDB's undertaking with IBP obligates it to "use its
best efforts to continually operate the Plant and use the
Plant Operating Assets as a beef slaughter facility." It may
not put the situs of the employing enterprise to any other
use. The same contract states that the agreement "shall be
binding upon and inure to the benefit of the parties hereto
and their respective successors, assigns, heirs and represen-
tatives but may not be assigned by MCDB without the
prior written consent of IBP." Hence, MCDB may not
assign its obligation to operate the plant as a beef slaughter
facility to PHIS or anyone else without the express written
consent of IBP, an express consent not in evidence in this
case or suggested by the testimony. In any event, the
assignment of the obligation to operate the facility is
subordinate to the sale and slaughter agreements tying
MCDB to IBP. Thus, while PHIS is not technically in
privity with IBP,'4 its presence at Mason City is of
necessity subordinate to the court-approved contract and
any and all arrangements which MCDB entered into with
the original owner.
Moreover, while PHIS is technically not in privity with
IBP, its contract to fulfill MCDB's operating responsibility
to IBP came about largely through the aegis of IBP. Sykes,
the principal operating figure on behalf of PHIS in the
Mason City transaction, is a sometime attorney for IBP
and a close associate of Walker, IBP's chief for labor
14 In Burns, a successorship was found despite the fact that Burns, the
successor, was not in privity with Wackenhut, the predecessor, and had no
connection with Wackenhut other than as a competitor who replaced
Wackenhut as the plant security contractor at an aircraft manufacturing
facility.
's It is clear from Sykes' own testimony that he was much more than an
relations matters.15 It was Walker who formally introduced
Sykes to Davis. The essence of their understanding was
worked out in Walker's office. It was Walker who supplied
Sykes with information concerning the labor relations
history of the plant, with sought-after advice as to the
quality of its supervisory force, and with detailed informa-
tion concerning the merits of individual IBP's production
and maintenance employees. In light of IBP's close and
intimate control over the operations of MCDB, IBP could,
without any difficulty, have scotched any arrangement
between Davis and Sykes concerning the operation of the
plant. It is a short and inescapable inference that Walker
not only knew about Davis' intention to farm out day-to-
day production chores at Mason City of PHIS but that he
approved of it as well. If he had not approved, MCDB
would be in material breach of its agreement with IBP. It is
clear that, at least as to the Mason City operation, PHIS
and MCDB are siblings of the same parent. I therefore
conclude that PHIS is, to the extent of its involvment at
Mason City, a joint successor with MCDB of the
"employing enterprise" which IBP maintained at this plant
until January 31, 1976.
MCDB attempts to escape responsibility for any of the
misdeeds of PHIS by claiming that PHIS agreed to operate
the plant as an independent contractor for whom MCDB
bears no vicarious liability. MCDB points to a clause in its
agreement with PHIS, cited above, to the effect that
MCDB is interested only in the results obtained under this
agreement and that the means of conducting the work are
under the sole control of PHIS. The cases cited by
Respondent MCDB in support of its contention involve
construction work or franchise agreements in which the
work to be performed by the independent contractor was
totally divorced from the main operations of the purported
principal. In this case, the participation of MCDB and
PHIS in the final product are inextricably intertwined.
Both have an integral share of the "employing enterprise."
MCDB supplies the building, the machinery, the expenda-
ble supplies, the plant overhead, and, most important, the
item to be processed, namely a beef carcass. It maintains
on the premises a full-time employee who is charged by
Davis with the responsibility of maintaining a continuing
and detailed surveillance of the daily operation of the
plant. PHIS employees and supervisors take MCDB's
property, in MCDB's plant, use MCDB's machinery and
supplies and produce for the immediate acquisition and
retention by MCDB (and its sole customer) of the single
end product, namely, a dressed beef carcass. Without
MCDB's participation in this production process, PHIS
would be incapable of operating and there would be no end
result. Without MCDB's contribution at every step of the
production process, the "results obtained" by PHIS, to use
the phraseology of their contract, would be nothing.
MCDB's principal, Sam Davis, was well aware of the
labor relations history of the plant and of the outstanding
IBP-Union contract. Having gone over the Union-IBP
attorney for PHIS. He is an incorporator, invested money in the
corporation, solicited business for PHIS, hired PHIS plant manager at
Mason City, recruited employees to go to work at Mason City, personally
oversaw the commencement of the slaughtering operation, and served as
public spokesman for the Company. Trupe testified that he reported to
Sykes for some matters.
746
MASON CITY DRESSED BEEF
contract with Walker, he was also well aware that it
contained a successorship clause. Davis hired PHIS, acting
through Sykes, to operate the plant, agreeing with IBP in
the assets purchase and sale contract to keep the plant
functioning as a beef slaughtering facility. Davis and Sykes
jointly made the decision to begin operations on Saturday,
February 7, after Davis informed Sykes he was not going to
delay production in order to remodel the plant. Davis was
present in Mason City during the tumultuous days which
marked the beginning of the resumed operations and he
appeared on television to describe to the general public
what he was undertaking to do by purchasing the plant.
His only known financial investment in the business which
appears from this record, other than the expenses of the
engineering survey, was the $25,000 which he agreed to pay
in cash to PHIS on Thursday, February 5, when he
concluded the MCDB-PHIS management agreement. This
sum was used in substantial part by Sykes to pay recruiting
fees and expenses of employees who were imported from
Omaha. From these various factors, it is clear that MCDB
is not only a joint successor with PHIS of the IBP
employing enterprise, PHIS is also an agent of MCDB and
a joint employer of the personnel at the Mason City plant,
a fact which renders MCDB jointly responsible with PHIS
for any unfair labor practices which were committed by
Sykes or by any other persons on the payroll of PHIS at
Mason City. AMP, Incorporated, 218 NLRB 33 (1975);
Manpower, Inc., of Shelby County and Armour Grocery
Products Co., Division of Armour and Company, 164 NLRB
287 (1967).
2. The refusal by the joint Employer to rehire
IBP employees
When IBP terminated its operations at Mason City on
January 31, the bargaining unit had 83 employees, all but I
of whom was maintaining a current checkoff of union dues.
This unit was also covered by an understanding collective-
bargaining agreement which had nearly a year to run.
None of these unionized employees were hired by PHIS
when it resumed the operation of the plant a week later.
Sykes told Trupe during the changeover not to hire any of
them and Trupe complied. When several former IBP
employees who were union officials went to the plant
during this interim period to discuss the status of IBP
employees with Trupe, they were abruptly thrown off the
premises and told to stay away. As Sykes explained in his
testimony, "They were going to try to make us eat the
contract and we weren't going to eat it." 6 To avoid
"eating the contract," the Respondents determined not to
sk This case contains a number of posthearing motions and statements of
counsel going to the question of Sykes' credibility as a witness. I have little
qualm concerning this facet of the case. What is disturbing is not Sykes'
veracity on the stand but the fact that, by virtue of his own statements and
related evidence. Sykes emerges in this case as a labor lawyer and
practitioner before this Agency who designed and executed a flagrant and
sharply defined violation of the Act, and who sought to achieve his ends by
simply "gutting it through." even at the price of wholesale violence which he
anticipated but which did not materialize.
11 One excuse advanced by the Respondents for their refusal to hire IBP
employees to assist in the resumption of operations is that they had heard
from Walker that IBP employees had a long track record of absenteeism
and illegal strike activity. In fact, there had been no strike activity of any
sort at Mason City after August 1974. when the current contract came into
hire any former IBP employees until a different comple-
ment of employees had been established in the plant,
working under terms and conditions set by Sykes. Foremen
Mammen and LeDuc told various IBP employees early in
the PHIS takeover that only 15-20 former employees
would be hired, that this rehiring would not take place until
a date in the distant future, and that no union officials
employed by IBP would ever be rehired. As a prophecy,
these words were remarkable as this is exactly what took
place between February, when these statements were
uttered, and September, when the record herein was made.
In one conversation, LeDuc added that the purpose of this
was to break the Union.
Walker and Trupe complied and furnished Sykes with a
list of 20 or so IBP employees whom they regarded as able
and useful employees, and whom they recommended to
Sykes; none were hired to assist in the startup of the PHIS
operation.: Instead, a few local job applicants whose
names were in the IBP files were contacted and Sykes went
to much trouble and expense to import nearly 30 others
from a distant city to be on hand for the February 7
startup. Thereafter, PHIS placed want ads in nearly every
local paper in the entire region looking for help. None of
the men who were hired at this time had any significant
packinghouse experience, and the result of their employ-
ment, not only on February 7 but also in the weeks which
followed, was large-scale destruction of beef in process and
a marked decline in production. In terms of stability and
efficiency of operation, the decision not to grant immediate
reemployment of IBP employees had utterly no business
justification and could not, by any stretch of the imagina-
tion, be regarded as an exercise of businessjudgment. Even
Sykes admitted that bringing in Omaha-based workers was
a mistake.
The Respondents' witnesses effectively concede that the
decision not to rehire IBP employees was taken because the
presence on their payroll of union adherents formerly
covered by the IBP contract would serve to support a
successorship claim being pressed by the Union. The
Piasecki case, cited above, and many more that have been
decided since Piasecki,18 stand for the well-established
proposition that the refusal of an incoming employer to
hire the employees of his predecessor because of their
union membership and in order to forestall the establish-
ment of a successorship in the employing industry is a
discrimination in the hire and tenure of employment in
violation of Section 8(aX3) of the Act. That such a motive
lay behind the refusal of PHIS to hire IBP employees is
amply demonstrated by the record herein. Accordingly, by
effect. The emptiness of this defense is made clear when one considers that
in February the Respondents refused to hire even the 20 or so IBP
employees whom Walker and Trupe had recommended to Sykes as worthy
of retention. Their presence inside the plant rather than in front of the plant
during the first few weeks of the resumed operations would have mitigated
or cured many of PHIS' early and overwhelming production problems.
iL Tri State Maintenance Corporation, 167 NLRB 933 (1967), enfd. 408
F.2d 171 (C.A.D.C., 1968): K B. A J. Young's Super Markets, Inc., 157
NLRB 271 (1966). enfd. 377 F.2d 463 (C.A. 9, 1967); N.LR.B. v. News
England Tank Industries, Inc., 302 F.2d 273 (C.A. . 1962). cert. denied 371
U.S. 875; J. R. Sousa and Sons, supra, Triangle Maintenance Corporation, et
al., 194 NLRB 486 (1971); Foodway of El Paso, 201 NLRB 933 (1973);
Macomb Block and Supply, Inc., 223 NLRB 1285 (1976).
747
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
this course of conduct PHIS and its joint employer violated
Section 8(a)(1) and (3) of the Act. The fact that later on in
the year they engaged in a form of tokenism by rehiring a
few former IBP employees does not militate against this
finding or mitigate its gravity.
It is no defense to such conduct that IBP employees
initially refused to file individual applications for employ-
ment as PHIS required. In the case of economic strikers,
the Board once held that it was an unfair labor practice
even to require individual rather than group offers of
reinstatement. Mooney Aircraft, Inc., 132 NLRB 1194
(1961). In this instance, an insistence by PHIS upon
individual rather than a single group application by IBP
employees was part and parcel of a discriminatory scheme
to destroy the effectiveness of the Union's effort to obtain
reemployment for its members. As a discriminatorily
motivated requirement, it violates Section 8(a)(1) and (3) of
the Act. W. C. McQuaide, Inc., 220 NLRB 593 (1975).
There is no doubt as to the Union's authority to make a
request to PHIS on behalf of its members for reemploy-
ment,19 and there is no question that the Union repeatedly
made this request to the Respondents. However, such a
request on the part of the Union or on the part of
individual employees is actually rendered unnecessary
where, as here, a company had already determined to
refuse to rehire a predecessor's employees, because making
any such applications would be an empty and futile
gesture. Rushton & Mercier Woodworking Co., Inc., and
Rand & Co., Inc., 203 NLRB 123 (1973); N.LR.B. v.
Southern Greyhound Lines, 426 F.2d 1299 (C.A. 5, 1970);
Virginia Stage Lines, Inc. v. N.L.R.B., 441 F.2d 499 (C.A. 4,
1971); Idaho Potato Growers, Inc. v. N.L.R.B., 144 F.2d 295
(C.A. 9, 1944).
One last string in the Respondents' bow is the contention
that they were under no obligation to hire former IBP
employees since the application for employment, made on
their behalf by the Union, was not unconditional but was
contingent upon acceptance by the new employer of the
terms and conditions of the old contract. Were PHIS and
MCDB found to be alter egos rather than mere successors,
such insistence by the Union would not be fatal to an
application. Part of the stratagem devised by the Respon-
dents in this chain of events was to keep the Union and the
IBP employees in the dark, insofar as possible, about the
facts and circumstances surrounding the plant transfer.
Accordingly, it is understandable that a union might
misconceive its rights and remedies since the facts and
circumstances upon which it had to base its judgments
were, in substantial part, concealed from it. However, this
contention of the Respondents requires but scant attention.
There is little doubt that the Union would have preferred
that the Respondents assume all of the obligations of the
existing contract with IBP. In light of the Union's request
to the district court in March 1976 that MCDB be required
to take over the old contract, it is idle for the Union to
pretend that it did not seek to achieve this result. It is
equally clear that the Union had a fallback or secondary
position, and that this position was also made abundantly
19 M. R. & R. Trucking Company, 178 NLRB 167 (1967); Elmira Machine
& Speciality Works, Inc., er at 148 NLRB 1695 (1964); Brown and Root, Inc.,
et at, 99 NLRB 1031 (1952), enfd. 203 F.2d 139 (C.A. 8, 1953); American
clear to the Respondents. Both Long and Peterson stated
on television, the standard means of communication
between these parties before the charges herein were filed,
that they would accept the reemployment of their members
without an assumption of the contract. In response to
probing questions by newsman Max Lee, Peterson an-
nounced to the television audience that union members
would work at less than the contract rate if they could get
their jobs back and would be willing thereafter to sit down
and discuss with PHIS representatives the terms and
conditions of their continued employment. In the telegram
of February 9 to the various employers involved in this
case, the Union, on behalf of its members, made an
application for the reemployment for all former IBP
employees and did not condition this application upon any
other agreement, including the assumption of the IBP
contract by PHIS. Therefore, I conclude that the Union
made an unconditional offer to PHIS to reemploy its
members who had previously worked for IBP. However,
this right of former IBP employees to obtain reemployment
matured even before the plant had reopened. Therefore,
since no application by the Union was necessary to
preserve the rights of IBP employees in light of the previous
unfair labor practices committed by the Respondents by
their determination not to hire IBP employees at the outset
of the PHIS startup, this telegram and the television
statements made contemporaneously by union spokesmen
are merely surplus requests, made in an abundance of
caution, which were not essential to perfect the legal
standing which former IBP employees had already ac-
quired.
One further aspect of the Piasecki line of cases merits
some attention. In Piasecki, the Board found that the
discriminatory efforts of a new employer to avoid hiring
the employees of its predecessor constituted a violation of
Section 8(a)(3) of the Act but did not amount to a refusal
to bargain in violation of Section 8(a)(5). However, the
Board did issue a bargaining order to remedy the 8(a)(3)
violation. Later cases, cited supra, have enlarged the
Piasecki doctrine to find an 8(aX5) violation as well in such
circumstances. In light of this development in the law, as
well as the repeated demands of the Union herein for
recognition and the stonewalling response which they
received, I conclude that the Respondent Employers herein
also violated Section 8(a)(1) and (5) of the Act.
3. Illegal assistance to NIWU to obtain
recognition
The NIWU organized the new PHIS employees with
extraordinary swiftness and achieved recognition and a
contract with unseemly haste. Before the former employees
of IBP had become aware that the plant was even
operating, an NIWU organizer had obtained designation
cards from 34 newly hired employees. Within 2 or 3 hours
after a presentation to Sykes of the NIWU cards, Sykes
was in Des Moines, had contacted West in his hospital
room, and had worked out the substance of a collective-
bargaining agreement which was then executed the
United Inns, Inc. d/b/a/ Ramada Inn, 201 NLRB 431 (1973); Consolidated
Edison Companyof New York, Inc., et al. v. N.L.R.B., 305 U.S. 197 (1938).
748
MASON CITY DRESSED BEEF
following Monday. Such a labor relations coup by NIWU
could only have occurred with the active assistance of
Sykes and as a part of an operating tactic to reopen the
plant with new employees, on his terms, and then to engage
in a physical confrontation whenever an anticipated
reaction by former employees might take shape.
Recognition of the NIWU by the employer was predicat-
ed on 34 or 35 authorization cards which were obtained
from new employees on Saturday morning, February 7, as
part of the hiring-in procedure. Credited evidence in this
record indicates that the cards were obtained by or with the
assistance of Respondent Employer's supervisors, on
company premises, and before any work had commenced.
This scenario depicts a classic form of illegal assistance by
an employer to a labor organization. Park Inn Hotel, Inc.,
and 115-02 Ocean Promenade, Inc., 139 NLRB 669 (1962);
Prospect Gardens of Norwalk, Inc., 177 NLRB 136 (1969);
Senco, Inc., 177 NLRB 882 (1969); Columbus Janitor
Service, Division of Servisco, 191 NLRB 902 (1971); Howard
Creations, Inc., 212 NLRB 179 (1974). On the Saturday
afternoon when recognition was accorded, only 35 employ-
ees had been hired in a unit normally containing 83. Of
these employees, only one is now on the payroll and only
two or three others were on the payroll for as long as 3
weeks. The bulk of the employees present on that day had
been imported from another locality. They were then being
paid on a basis which was temporary in character and
which presumed the fact that they might not remain in
Mason City as permament employees in the plant. In the
ensuing 3 months, nearly 200 more persons were hired in
an effort by the employer to develop a stable cadre with
which to man the plant. Thus, at the time recognition was
granted, a representative complement of employees had
not been retained. To grant recognition to a labor
organization under such circumstances is another form of
illegal assistance by an employer. Cowles Communications,
Inc., and Sufsun Co., Inc., 170 NLRB 1596 (1968). Thus, by
helping the NIWU to achieve majority status and by
granting recognition to it when the employer had not yet
hired a representative component of employees, the
Respondent Employers violated Section 8(a)2) of the Act.
By achieving recognition in this manner and by accepting
the benefits of unlawful recognition by the Employer, the
Respondent NIWU violated Section 8(b)(1)(A) of the Act.
By executing a collective-bargaining agreement designed to
perpetuate conditions which would in the future cause
unlawful discrimination by the employer against employ-
ees on the basis of union considerations, Respondent
NIWU violated Section 8(b)(2) of the Act. Harry Edison, et
al., a Co-Partnership doing business as Seaview Manor Home
for Adults, 222 NLRB 596 (1976); N.L.R.B. v. Richard W.
Kaase Baking Co., et al., 346 F.2d 24 (C.A. 6, 1965). The
fact that Sykes later withdrew recognition from the NIWU
and refused to honor the contract in no way detracts from
this finding, since it is well established that the discontin-
uance of an unfair labor practice is no defense to the
imposition of a Board order. N.L.R.B. v. Mexia Textile
Mills, Inc., 339 U.S. 563 (1950).
4. Independent violations of Section 8(a)(1) of the
Act
The General Counsel alleged in the complaint that the
Respondent Employer violated Section 8(a)(1) of the Act
by virtue of coercive statements made by certain supervi-
sors to former IBP employees. In the findings of fact herein
and in the discussion above concerning the motivation of
the employees for their refusal to hire former IBP
employees, I found that Foreman Mammen told Bucci,
Peterson, and King on the evening of February 7 that the
Respondents would never rehire IBP employees who were
union officials and would not hire any former IBP
employees for a period of several months. Foreman LeDuc
made a similar statement to Bucci about 2 weeks later
during a conversation at a bowling alley. On another
occasion, LeDuc told King that the Respondent Employers
were hiring new employees instead of IBP employees in
order to break the Union. In addition to supplying the
record with evidence of antiunion motivation, these
statements constitute violations of Section 8(a)(1) of the
Act. I so find and conclude.
Upon the foregoing findings of fact, and upon the entire
record considered as a whole, I make the following:
CONCLUSIONS OF LAW
I. Respondents Mason City Dressed Beef, Inc., and
Packing House and Industrial Services, Inc., are jointly and
severally employers engaged in commerce within the
meaning of Section 2(2), (6), and (7) of the Act.
2. Local P-38, Amalgamated Meat Cutters and Butcher
Workmen of North America, AFL-CIO, and Respondent
National Industrial Workers Union are, respectively, labor
organizations within the meaning of Section 2(5) of the
Act.
3. Respondent Mason City Dressed Beef, Inc., and
Respondent Packing House and Industrial Services, Inc.,
are joint employers of all production and maintenance
employees employed at the Mason City, Iowa, plant,
formerly owned and operated by Iowa Beef Processors,
Inc.
4. All production and maintenance employees em-
ployed by Respondent Employers at the Mason City, Iowa,
plant, formerly owned and operated by Iowa Beef Packers,
Inc., excluding office clerical employees, storeroom em-
ployees, nurses, buyers, salesmen, professional employees,
beef graders, yards scalehouse personnel, quality control
personnel, 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.
5. At all times material herein, Local P-38, Amalga-
mated Meat Cutters and Butcher Workmen of North
America, AFL-CIO, has been the exclusive representative
of all employees in the aforesaid unit for the purposes of
collective bargaining with respect to rates of pay, wages,
hours of employment, and other terms and conditions of
employment, within the meaning of Section 9(a) of the Act.
6. By assisting National Industrial Workers Union in
obtaining union membership cards by supervisors on
company premises on company time; by executing a
collective-bargaining agreement with National Industrial
749
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Workers Union before the said employers had hired a
representative complement of employees; and by recogniz-
ing and executing a collective-bargaining agreement with
National Industrial Workers Union when Local P-38,
Amalgamated Meat Cutters and Butcher Workmen of
North America, AFL-CIO, was the exclusive representa-
tive of employees in the bargaining unit covered by said
agreement, Respondents Mason City Dressed Beef, Inc.,
and Packing House and Industrial Services, Inc., violated
Section 8(a)(2) of the Act.
7. By accepting from the Respondent Employers illegal
assistance in obtaining union designation cards, and by
requesting from Respondent Employers recognition as the
collective-bargaining representative of its employees when
it did not represent an uncoerced majority of the employ-
ees of the Respondent Employers and when another labor
organization was the duly designated collective-bargaining
representative of the bargaining unit employees, Respon-
dent National Industrial Workers Union violated Section
8(b)(l)(A) of the Act.
8. By executing a collective-bargaining agreement with
the Respondent Employers when it was not the duly
designated representative of an uncoerced majority of the
employees of the Respondent Employers, Respondent
National Industrial Workers Union violated Section
8(b)(2) of the Act.
9. By its refusal on February 7, 1976, and thereafter to
rehire the 83 employees named in the appendix to the
consolidated complaint herein in order to discourage their
membership in and support of Local P-38, Amalgamated
Meat Cutters and Butcher Workmen of North America,
AFL-CIO, the Respondent Employers herein have violat-
ed Section 8(a)(3) of the Act.
10. By their refusal to recognize and bargain with Local
P-38, Amalgamated Meat Cutters and Butcher Workmen
of North America, AFL-CIO, as the duly designated
bargaining representative of their employees employed in
the unit set forth above in Conclusion of Law 4, the
Respondent Employers herein have violated Section 8(a)(5)
of the Act.
II. By the acts and conduct set forth above in
Conclusions of Law 6, 9, and 10, and by telling employees
they would not be rehired because of their union member-
ship and activities, the Respondent Employers violated
Section 8(a)(l) of the Act.
12. The aforesaid unfair labor practices have a close,
intimate, and substantial effect on the free flow of
commerce within the meaning of Section 2(6) and (7) of the
Act.
REMEDY
Having found that the Respondents herein have commit-
ted various unfair labor practices, I will recommend that
they be ordered to cease and and desist therefrom and to
take other actions designed to effectuate the purposes and
policies of the Act. Respondent Employers will be required
to withdraw and withhold recognition from National
2z F. W Woolworth Company, 90 NLRB 289 (1950).
21 In the event no exceptions are filed as provided by Sec. 102.46 of the
Rules and Regulations of the National Labor Relations Board, the findings,
conclusions, and recommended Order herein shall, as provided in Sec.
Industrial Workers Union and to cease giving effect to the
collective-bargaining agreement which these parties had
heretofore executed. Said Employers will be required to
recognize and bargain with the Charging Party and, if they
agree upon the terms and conditions of a contract, to
execute the same in writing. Said Employers will also be
required to offer full and immediate reinstatement to all of
the discriminatees named in the appendix to the consoli-
dated complaint who have not as yet been rehired and to
make them whole for any losses which they have suffered,
in accordance with the Woolworth formula,20 with interest
thereon computed at six percent per annum. Because the
unfair labor practices committed herein have been serious
and pervasive and include discriminations which violate
Section 8(a)(3) of the Act, I will recommend to the Board a
so-called broad 8(a)(1) Order designed to suppress any and
all violations of that section of the Act.
Upon the foregoing findings of fact, conclusions of law,
and upon the basis of the entire record herein considered as
a whole, and pursuant to Section 10(c) of the Act, I make
the following recommended:
ORDER21
A. Respondent Mason City Dressed Beef, Inc., and
Packing House and Industrial Services, Inc., Mason City,
Iowa, jointly and severally, and their officers, agents,
successors, and assigns, shall:
I. Cease and desist from:
(a) Recognizing or bargaining with National Industrial
Workers Union as the collective-bargaining representative
of their production and maintenance employees employed
at the Mason City, Iowa, plant, unless and until said labor
organization is certified by the Board as the collective-
bargaining representative of said employees pursuant to
Section 9(c) of the Act.
(b) Giving effect to a certain collective-bargaining
agreement concluded with National Industrial Workers
Union on or about February 9, 1976, or to any modifica-
tion or extension thereof.
(c) Giving effect to any membership application executed
by their employees on or after February 7, 1976, on behalf
of National Industrial Workers Union or, by means or in
any manner, assisting or contributing to the support of
National Industrial Workers Union.
(d) Refusing to recognize and bargain collectively with
Local P-38, Amalgamated Meat Cutters and Butcher
Workmen of North America, AFL-CIO, as the collective-
bargaining representative of the production and mainte-
nance employees employed at their Mason City, Iowa,
plant.
(e) Telling employees they would not be hired if they
became or remained members of Local P-38, Amalga-
mated Meat Cutters and Butcher Workmen of North
America, AFL-CIO.
(f) Refusing to hire or otherwise discriminating against
employees in their hire or tenure of employment because
they are members of or give support to Local P-38,
102.48 of the Rules and Regulations, be adopted by the Board and become
its findings, conclusions, and Order, and all objections thereto shall be
deemed waived for all purposes.
750
MASON CITY DRESSED BEEF
Amalgamated Meat Cutters and Butcher Workmen of
North America, AFL-CIO.
(g) By any other means interfering with, restraining, or
coercing employees in the exercise of rights guaranteed to
them by Section 7 of the Act.
2. Take the following affirmative action designed to
effectuate the purposes and policies of the Act.
(a) Offer to the 83 persons formerly employed by Iowa
Beef Processors, Inc., at the Mason City, Iowa, plant, who
are named in the appendix to the consolidated complaint,
full and immediate reinstatement to their former or
substantially equivalent positions, without prejudice to
seniority or other rights which they have formerly enjoyed,
discharging if necessary other employees who have been
hired in their places.
(b) Make whole all of the discriminatees named in the
appendix to the consolidated complaint for any loss of pay
they may have suffered by reason of the discrimination
practiced against them and found herein, in the manner
described above in the section entitled "Remedy."
(c) Withdraw and withhold from National Industrial
Workers Union recognition as the collective-bargaining
representative of their production and maintenance em-
ployees employed at the Mason City, Iowa, plant.
(d) Recognize and, upon request, bargain collectively
with Local P-38, Amalgamated Meat Cutters and Butcher
Workmen of North America, AFL-CIO, as the collective-
bargaining representative of a unit of all production and
maintenance employees employed by the Respondents at
their Mason City, Iowa, plant, excluding office clerical
employees, storeroom employees, nurses, buyers, salesmen,
professional employees, beef graders, yard scalehouse
personnel, quality control personnel, guards, and supervi-
sors as defined in the Act, and, if an agreement is reached,
embody said agreement in an executed written contract.
(e) Preserve and, upon request, make available to the
Board or its agents, for examination and copying, all
records necessary to analyze and compute the amount of
backpay which may be due and owing under the terms of
this recommended Order.
(f) Post at its Mason City, plant, copies of the attached
notice marked "Appendix A." 22 Copies of said notice, on
forms provided by the Regional Director for Region 18,
and duly signed by a representative of the Respondent
Employers, shall be posted by the Respondent Employers
immediately upon receipt thereof, and be maintained by
them for 60 consecutive days, in conspicuous places,
including all places where notices to employees are
customarily posted. Reasonable steps shall be taken to
insure that such notices are not altered, defaced, or covered
by any other material.
(g) Notify the Regional Director for Region 18, in
writing, within 20 days from the date of this Order, what
steps Respondent Employers have taken to comply
herewith.
B. Respondent National Industrial Workers Union, its
officers, agents, and representatives, shall:
I. Cease and desist from:
(a) Giving effect to a certain collective-bargaining
agreement with Packing House Industrial Services, Inc.,
executed on or about February 9, 1976, and to any
modification or extension thereof.
(b) Acting or purporting to act as the collective-bargain-
ing representative of the production and maintenance
employees of Packing House Industrial Services, Inc., and
Mason City Dressed Beef, Inc., who are employed at their
Mason City, Iowa, plant, unless and until it has been
certified by the Board as the collective-bargaining repre-
sentative of said employees pursuant to Section 9 of the
Act.
(c) Giving effect to any membership applications
executed by any employees of Packing House Industrial
Services, Inc., or Mason City Dressed Beef on or after
February 7, 1976.
(d) By any other means restraining or coercing employ-
ees of Packing House Industrial Workers, Inc., or Mason
City Dressed Beef, Inc., in the exercise of rights guaranteed
to them by Section 7 of the Act.
2. Take the following affirmative action designed to
effectuate the purposes and policies of the Act:
(a) Post at its office and meeting hall copies of the
attached notice marked "Appendix B." 2 3 Copies of said
notice, after being signed by a representative of the
Respondent Union, shall be posted immediately upon
receipt thereof, and be maintained by it for 60 consecutive
days thereafter, in conspicuous places, including all places
where notices to members are customarily posted. Reason-
able steps shall be taken by Respondent Union to insure
that such notices are not altered, defaced, or covered by
any other material. Immediately after their receipt from the
Regional Director, other copies of said notice shall be
signed by a representative of the Respondent Union and
shall be forwarded to Packing House and Industrial
Services, Inc., and Mason City Dressed Beef, Inc., for
posting at the Mason City, Iowa, plant.
(b) Notify the Regional Director for Region 18, in
writing, within 20 days from the date of this Order, what
steps Respondent Union has taken to comply herewith.
22 In the event the Board's 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."
23 See fn. 22, supra.
APPENDIX B
NOTICE To MEMBERS
POSTED BY ORDER OF THE
NATInoNAL LABOR RELATIONS BOARD
An Agency of the United States Government
National Industrial Workers Union is posting this notice to
comply with the provisions of an Order of the National
Labor Relations Board. This Order was issued after a
hearing before an Administrative Law Judge in which it
was found that we violated certain provisions of the
National Labor Relations Act.
WE WILL NOT give effect to any membership
applications executed on or after February 7, 1976, by
employees of Mason City Dressed Beef, Inc., or
751
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Packing House and Industrial Services, Inc., who are
employed at the Mason City Iowa, plant.
WE WILL NOT give effect to a contract entered into
with Mason City Dressed Beef, Inc., or Packing House
and Industrial Services, Inc., on or about February 9,
1976, or to any modifications or extensions thereof.
WE WILL NOT act or purport to act as the collective-
bargaining representatives of the employees of Mason
City Dressed Beef, Inc., or Packing House and
Industrial Services, Inc., who are employed at their
Mason City, Iowa, plant, unless and until we have been
certified by the Board after the holding of an election.
WE WILL NOT restrain or coerce employees of Mason
City Dressed Beef, Inc., or Packing House and
Industrial Services, Inc., in any manner with respect to
the exercise of rights guaranteed to them by the
National Labor Relations Act.
NATIONAL INDUSTRIAL
WORKERS UNION
752