Mobil Oil Corp.

National Labor Relations Board - Board Decisions

Jul 25, 1975

219 N.L.R.B. 511 (N.L.R.B. 1975)

MOBIL OIL CORP.
Mobil Oil Corporation and Alaska Roughnecks and
Drillers Association . Case 19-CA-7181
July 25, 1975
DECISION AND ORDER
BY CHAIRMAN MURPHY AND MEMBERS JENKINS
AND KENNEDY
On February 6, 1975, Administrative Law Judge
Richard J. Boyce issued the attached Decision in this
proceeding. Thereafter, Respondent filed exceptions
and a supporting brief ' and the General Counsel
filed an answering brief.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the Na-
tional Labor Relations Board has delegated its au-
thority in this proceeding to a three-member panel.
The Board has considered the record and the at-
tached decision in light of the exceptions and briefs
and has decided to affirm the rulings, findings, and
conclusions of the Administrative Law Judge and to
adopt his recommended Order, as modified herein.
For the reasons stated below, we agree with the
Administrative Law Judge's conclusions that Re-
spondent is a joint employer with Santa Fe Drilling
Company of the employees employed on the Mobil
Granite Point Platform and as such was obligated to
bargain, upon request, with the Union about the de-
cision and effects of displacing the unit employees.
We also agree with his conclusion that Respondent
violated Section 8(a)(1) when one of its production
foremen, William Barlett, stated to unit employees
that: (1) Respondent was not going to have a union
contractor on the platform and instead would cancel
its contract with Santa Fe and bring in a nonunion
contractor; and (2) if there was a strike, the contract
would be canceled and a nonunion contractor
brought in.
We do not agree, however, with the Administrative
Law Judge's conclusion that Respondent violated
Section 8(a)(1) of the Act through a comment made
by Production Foreman John Green, nor with his
conclusion that V. E. Construction, Inc., is a joint
employer with Respondent. Finally, the Administra-
tive Law Judge's recommended remedy is modified
in the manner described below.
1. The Administrative Law Judge's conclusion
that Respondent and Santa Fe Drilling Company are
joint employers is well supported by record evidence.
In addition to the reasons offered by the Administra-
1 Respondent's request for oral argument is hereby denied, as the record
and the briefs adequately present the issues and positions of the parties
511
tive Law Judge, we note several instances in which
Respondent's production foremen exercised their au-
thority to fire, promote, discipline, reassign , and re-
classify unit employees. Indeed, even one of Santa
Fe's own leadmen , Leonard Dunham, was promoted
to this position by Mobil Production Foreman Bar-
lett. As succinctly stated by the employees them-
selves , Respondent's production foremen are "the
quarterbacks of the team" and the "captains of the
ship." In view of this daily control exercised by
Respondent's production foremen over the employ-
ees supplied by Santa Fe, we adopt the Administra-
tive Law Judge's conclusion that Respondent is a
joint employer with Santa Fe.2
2. We disagree, however, with the Administrative
Law Judge's further conclusion that Respondent also
is a joint employer with V. E. Construction, Inc. The
contract which Respondent executed with V. E.
Construction is similar to the contract which it there-
tofore had with Santa Fe with one major exception-
V. E. Construction is specifically identified as an in-
dependent contractor and its employees are not to be
considered as employees of Mobil. The Administra-
tive Law Judge nevertheless concluded that "based
upon the terms of its contract with V. E. Construc-
tion, and despite that contract's characterization of
V. E. as an independent contractor, the Respondent
and V. E. are joint employers for purposes of this
proceeding."
Unlike the Administrative Law Judge, we find
nothing in Respondent's contract with V. E. Con-
struction which would negate that contract's estab-
lishment of V. E. Construction as an independent
contractor. In addition, no evidence was introduced
regarding the manner in which the Respondent-
V. E. Construction contract was actually implement-
ed. Accordingly, we do not know whether the sub-
stantial control which Respondent's production fore-
men exercised over'the employees supplied by Santa
Fe carried over to the employees supplied by V. E.
Construction. In the absence of such evidence, we
conclude that the Administrative Law Judge's find-
ing that V. E. and Respondent are joint employers is
not supported by the record.
3. A day or two after the union election on Janu-
ary 23, 1974, unit employee Burton DePriest initiated
a casual conversation with Production Foreman
John Green. DePriest asked Green what he thought
the possible consequences might be regarding the
Union's recent victory. Green replied, " I imagine
Mobil will put [the job] up for bid." The Administra-
tive Law Judge found this reply violative of Section
8(a)(1) of the Act.
Contrary to the Administrative Law Judge, we
2 Cf. Hamburg Industries, Inc, 193 NLRB 67 (1971)
512 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
find Green's simple response during a casual conver-
sation with a single employee not to be a violation of
Section 8(a)(1). The opinion espoused by Green was
his own and was offered in reply to a question posed
by DePriest. The casualness of the discussion is re-
flected in DePriest's own testimony:
I just made an off-the-cuff-remark of-after it
was found out that the election had already been
held-I mean the election had already been held
and the vote was 10 to 1, I believe it was. And I
said, I wonder what will happen now? And his
remark was I imagine Mobil will put this up for
bid.
Considering the casualness of the particular con-
versation, the fact that only a single employee heard
it, and the apparent camaraderie of the men working
on the platform derived from their close quarters and
long working hours,3 we conclude that Green's reply
to DePriest's inquiry did not violate Section 8(a)(1)
of the Act.
4. In his recommended remedy, the Administra-
tive Law Judge directed that:
... Respondent be ordered fully to restore the
status quo ante by reviving its relationship with
Santa Fe on the Granite Point Platform and in
so doing offer reinstatement to the unlawfully
displaced employees and make them whole for
their monetary losses, from the July 17 date that
V. E. Construction supplanted Santa Fe, occa-
sioned by their displacement. It is further rec-
ommended, should Respondent then wish to re-
place Santa Fe, that it be required first to
bargain with the Union over the decision and its
effects on the employees subject to displace-
ment.
In our view, the recommended remedial order is
excessively broad in scope. We agree that Respon-
dent, as a joint employer, is obligated to bargain with
the Union over the decision and effects of displacing
the unit employees. We also agree that since Respon-
dent failed to satisfy this obligation, backpay mea-
sured from the date that V. E. Construction, Inc.,
supplanted Santa Fe is likewise appropriate. We do
not agree, however, that reinstatement of the dis-
placed employees and reinstitution of the Santa Fe
contract is either necessary or warranted.
As noted by the Administrative Law Judge,
Respondent's contract with Santa Fe gave Respon-
dent the privilege of termination upon 30 days' no-
tice. Accordingly, neither the contract termination
nor the actual displacement of unit employees occa-
sioned thereby is alleged as a violation of the Act. In
3 Unit employees work shifts of 10 days on and 5 days off.
addition, neither Santa Fe nor V. E. Construction,
Inc., are parties to this proceeding.
Adoption of the Administrative Law Judge's rec-
ommendations, therefore, would require reinstitution
of a legitimately terminated contract with an organi-
zation (Santa Fe) which is not a party to this pro-
ceeding and which has not been represented herein.
Simultaneously, we would be abrogating Re-
spondent's existing agreement with V. E. Con-
struction, Inc., another organization not named as a
party. In our judgment, it is unnecessary to tamper
with the legal relationships of Santa Fe and V. E.
Construction, Inc., since the bargaining order and
backpay which we are directing is sufficient to reme-
dy the violations which have been committed.
Accordingly, in order to effectuate the purposes of
the Act, we shall require Respondent to bargain with
the Union concerning the decision and effects of dis-
placing the unit employees and shall accompany our
order with backpay designed to make whole the em-
ployees for losses suffered. Thus, we shall order
backpay computed in the manner recommended by
the Administrative Law Judge for all displaced unit
employees from July 17, 1974, until the occurrence of
the earliest of the following conditions: (1) the date
Respondent bargains to agreement with the Union
on those subjects pertaining to the decision and ef-
fects of the displacement of unit employees; (2) a
bona fide impasse in bargaining; (3) the failure of the
Union to request bargaining within 5 days of
Respondent's notice of its desire to bargain with the
Union; or (4) the subsequent failure of the Union to
bargain in good faith.4
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor Re-
lations Board adopts as its order the recommended
order of the Administrative Law Judge as modified
below and hereby orders that Respondent, Mobil Oil
Corporation, Cook Inlet, Alaska, its officers, agents,
successors, and assigns, shall take the action set forth
in the said recommended order, as so modified:
1. Substitute the following for paragraph 1(c):
"(c) In any other manner interfering with, re-
straining, or coercing employees in the exercise of the
rights under Section 7 of the Act.
2. Substitute the following for paragraph 2(a):
"(a) Give the displaced employees backpay for the
period set forth in this Decision."
3. Substitute the attached notice for that of the
Administrative Law Judge.
4 Jack L. Williams, D.D.S, d/b/a Empire Dental Co, 211 NLRB 860
(1974)
MOBIL OIL CORP.
APPENDIX
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
After a hearing at which all parties had an opportuni-
ty to present their evidence, the National Labor Re-
lations Board has found that we violated the Nation-
al Labor Relations Act, and has ordered us to post
this notice and comply with its provisions.
The National Labor Relations Act, as amended,
gives all employees the following rights:
To organize themselves
To form, join, or support unions
To bargain as a group through a representa-
tive they choose
To act together for collective bargaining or
other mutual aid or protection
To refrain from any or all such activities
In recognition of these rights, we hereby notify our
employees that:
WE WILL NOT state to employees that we will
cancel our contract with Santa Fe Drilling Com-
pany, or with any other employer, rather than
have a union contractor on the Granite Point
Platform, or should the employees go on strike.
WE WILL NOT refuse to bargain collectively
with Alaska Roughnecks and Drillers Associa-
tion as the exclusive bargaining representative of
the employees in the bargaining unit set forth
below by contracting out the work of those em-
ployees or otherwise changing their wages,
hours, and other terms and conditions of em-
ployment without first bargaining with the
above labor organization . The appropriate unit
is:
All employees of the Employer on the Mobil
Granite Point Platform excluding office cleri-
cal employees, professional employees,
guards, and leadmen, relief leadmen and all
other supervisors as defined in the Act.
WE WILL NOT in any other manner interfere
with, restrain, or coerce employees in the exer-
cise of the rights guaranteed to them under Sec-
tion 7 of the Act.
WE WILL give those employees displaced by
our termination of the contract with Santa Fe
backpay in accordance with the remedial order
set forth in the Board's Decision.
513
WE WILL bargain collectively with Alaska
Roughnecks and Drillers Association as the ex-
clusive representative of our employees in the
unit above with respect to wages, hours, and
other terms and conditions of employment.
MOBIL OIL CORPORATION
DECISION
STATEMENT OF THE CASE
RICHARD J. BOYCE, Administrative Law Judge: This case
was heard before me in Anchorage, Alaska, on December
19 and 20, 1974. The charge was filed July 5, 1974, by
Alaska Roughnecks and Drillers Association (herein called
the Union). The complaint issued October 31, was amend-
ed in minor respects at the outset of the hearing, and alleg-
es that Mobil Oil Corporation (herein called Respondent
or Mobil) has violated Section 8(a)(1) and (5) of the Na-
tional Labor Relations Act.
The parties were given opportunity at the hearing to in-
troduce relevant evidence, examine and cross-examine wit-
nesses , and argue orally. Briefs were filed for the General
Counsel and Respondent.
Issues
The issues are whether Respondent:
1. Violated Section 8(a)(5) and (1) when, in July 1974, it
replaced Santa Fe Drilling Company (herein called Santa
Fe) as contractor of labor on Respondent's Granite Point
Platform without giving the Union a chance to bargain
over the decision and its effects on the displaced employees
(herein sometimes called the unit employees), whom the
Union represented.
2. By its officials, in early 1974, informed unit employ-
ees that it would terminate the contract by which Santa Fe
provided labor for the Granite Point Platform if those em-
ployees persisted in supporting the Union; violating Sec-
tion 8(a)(1).
I. JURISDICTION
Respondent is a Delaware corporation engaged in sever-
al States of the United States, including Alaska, in the pro-
duction and distribution of petroleum products. Its annual
gross income exceeds $500,000, and it annually causes
products of a value exceeding $50,000 to be shipped across
state lines.
Respondent is an employer engaged in and affecting
commerce within Section 2(2), (6), and (7) of the Act.
II. LABOR ORGANIZATION
The Union is a labor organization within Section 2(5) of
the Act.
514 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Ill. THE ALLEGED VIOLATION OF SECTION 8(aX5)
A. Facts
1. Background
Respondent owns 75-percent interest in the Granite
Point Platform, which is situated offshore in Cook Inlet,
Alaska.' The remaining 25 percent is owned by Union Oil
Corporation. Respondent is the "operator" of the plat-
form, meaning that, between it and Union Oil, it is respon-
sible for the platform's functioning. The platform was in-
stalled in 1966. Its first 2 or so years were devoted to
drilling for oil, since when it has been concerned mainly
with production.
In both the drilling and production phases, until sup-
planted in July 1974 as detailed below, Santa Fe was under
contract with Respondent to furnish labor for the platform.
The complement furnished by Santa Fe during the drilling
phase was about 100 employees; during the production
phase, about 13. On January 31, 1974, following an NLRB
election in Case 19-RC-6842, the Union was certified to
represent this unit of platform employees:
All employees employed by the Employer on the Mo-
bil Granite Point Platform excluding office clerical
employees, professional employees, guards, and lead-
men, relief leadmen and all other supervisors as de-
fined in the Act.2
Santa Fe was a named party to that proceeding; Respon-
dent was not.
2. Respondent's relationship with Santa Fe
Under its latest contract with Respondent, which be-
came effective June 1, 1972, Santa Fe was obligated to
furnish employees "as required by Mobil" in these classifi-
cations: leadman, repairman, senior production operator,
crane operator, production operator, utilityman, and roust-
about. The contract set forth the wages to be paid by Santa
Fe to employees in each classification , named the several
employee fringe benefits to be given by Santa Fe,3 and
permitted termination of the contract by either party on 30
days' notice.
Among other provisions of the contract were these:
1. Wage rates "shall be renegotiable at such times as
contractor's [Santa Fe's] labor pay scales are changed as a
result of general industry pay scale change."
2. "[A]ny personnel whose qualifications or perfor-
mance are unsatisfactory to Mobil will be promptly re-
placed by Santa Fe."
3. "Crew change time and crew reporting time . . . will
be designated periodically by Mobil."
4. "Mobil shall have the option to hire any Santa Fe
employees furnished hereunder."
Respondent's investment in the platform is about $50 million
2 It is concluded that this is an appropriate unit within Sec 9(b) of the
Act.
3 Including paid vacations , a profit-sharing and retirement plan, a stock
bonus plan, safety awards, and workmen' s compensation insurance.
5. "Mobil shall provide transportation for Santa Fe em-
ployees . . . to work site and return."
The contract provided that, in consideration for Santa
Fe's services, Respondent make it whole for its wage out-
lay, and in addition pay it a fixed amount or "mark-up"
per employee per day to cover its fringe benefit and over-
head expenses and allow for profit.
The ranking Santa Fe personnel on the platform were its
two leadmen. They had nominal power to hire and fire and
meaningfully direct the work of the bargaining unit em-
ployees." Santa Fe's leadmen in turn were subordinate to
Respondent's two production foremen, at least one of
whom was present on the platform at nearly all times. The
leadmen in many ways were conduits between the produc-
tion foremen and the unit employees. They seldom gave
other than routine direction without first clearing with a
production foreman; and their orders commonly were
prefaced by comments indicating that they were being giv-
en on the say-so of one of the production foremen. The
production foremen often bypassed the leadmen altogether
in dealing with the unit employees.
Further indicative but not exhaustive of Respondent's
control, the production foremen regularly interviewed
prospective unit employees and advised whom Santa Fe
should send to the platform;5 determined the classifica-
tions of those subsequently hired based on interview im-
pressions ; reclassified unit employees as circumstances dic-
tated; prepared and posted work schedules for the unit
employees ; sometimes discharged, demoted , and otherwise
disciplined unit employees without consulting with the
leadmen; independently approved requests by unit em-
ployees for time off; authorized overtime for unit employ-
ees and assigned them to tasks at a Mobil facility (the Tank
Farm) off the platform; and, jointly with the leadmen, ap-
proved promotions and vacations for unit employees and
verified their timeslips. In this latter regard, the production
foremen sometimes directed the leadman to alter and
sometimes themselves altered timeslips which they believed
had been padded.
3. The replacement of Santa Fe
On February 4, 1974, which was a matter of days after
the Union received NLRB certification to represent the
unit employees, Santa Fe sent Respondent a letter asking
that the daily markup in their contract be increased, and
further stating:
In the foreseeable future Santa Fe expects to begin
[collective-bargaining] negotiations that could eventu-
ally result in changes in both the basic hourly wages
and benefit package earned by our employees working
on the Granite Point Platform. In such event we
would, once this negotiation is finalized, be requesting
a further alteration in the agreed upon hourly rates
billed to Mobil for the services rendered and an ad-
justment in the "mark-up" to cover any such new ben-
4The leadmen were ruled ineligible to vote in the NLRB election on
supervisory grounds
As William Barlett, Respondent's senior production foreman on the
platform, testified "I don't believe that they [Santa Fe's personnel manag-
ers] were really well versed in the needs of the platform."
MOBIL OIL CORP. 515
efit and overhead package. In addition there may well
be some retroactive pay increases granted as part of
the negotiations which we would expect Mobil to pay
for.
Respondent replied by letter dated March 7, refusing to
increase the markup and withholding comment on the
above-quoted portion of the Santa Fe letter. Respondent
further responded, in the words of J. L. White, its produc-
tion manager for Alaska, by electing "to canvass the mar-
ket and find out whether or not this was as good an offer as
I could get to operate the platform with respect to this
mark-up." Accordingly, Respondent on March 22 invited
four companies, plus Santa Fe, to submit bids in contem-
plation of invoking the 30-day termination clause in the
existing contract with Santa Fe. Santa Fe submitted a bid
April 1. The other four declined to bid.
Rather than accept Santa Fe's bid,6 in which Santa Fe
had acknowledged that, "as a result of our present negotia-
tions" with the Union, certain cost items could not be firm-
ly quoted, Respondent permitted a belated bid from V.E.
Construction, Inc. V.E. had not been included in the
March 2 bid invitation. V.E.'s bid, submitted April 24,
eventually was accepted. Respondent calculated that it
would be more favorable than Santa Fe's by from
$20,000-$50,000 per year. On June 14, Respondent formal-
ly notified Santa Fe that its services were being terminated
as of July 17. Respondent and V.E. executed a contract on
July 12, calling for V.E. to begin July 17. This contract is
nearly identical in most respects to that between Respon-
dent and Santa Fe, including a 30-day termination clause.
A conspicuous dissimilarity is the inclusion in the V.E.
contract of this language:
V.E.'s status hereunder is that of an independent con-
tractor and neither V.E. nor any employees of V.E. are
employees of Mobil. . . . Mobil is interested only in
and shall specify the results to be achieved in connec-
tion with the performance of the services under this
contract , and the manner , means and details of
achieving such results in a good and workmanlike
manner are the responsibility of V.E.
Meanwhile, Santa Fe and the Union bargained collec-
tively from March until May 29, when the employees
struck in support of the Union's demands.1 There is no
evidence that Respondent played either an overt or a co-
vert role in those negotiations . 8 On June 21 , as a result of
Respondent 's June 14 termination notice to Santa Fe, John
C. Kilroy, one of Santa Fe's negotiators , sent this letter to
the Union:
Mobil Oil Company has notified us that our contract
to provide labor and service has been cancelled pur-
suant to the terms of the contract. Therefore, our last
6 The bid invitation reserved to Respondent "the right to reject any and
all bids."
7 The strike continued beyond V.E.'s replacement of Santa Fe . Respon-
dent manned the platform with its own personnel until V E. began to per-
form. There is no evidence that the strikers applied for reinstatement.
8 W.A. Hacklin, the Union 's business agent, testified , however, that one
of Santa Fe's negotiators , John C. Kilroy, stated during bargaining that
Respondent had the option of getting rid of Santa Fe if it did not approve
of the bargaining outcome.
day for this Company to provide labor for the Mobil
Granite Point Platform will be July 17, 1974.
Because of this, we do not see how we are able to
continue operations there; however, we are willing to
bargain about both of these matters with you. Of
course, if we are able to resume operations (Mobil
Granite Point Platform) within the N.L.R.B. certifica-
tion year, we will certainly, give you notice and bar-
gain with you with respect to any relevant matters.
If you have any questions concerning the contents of
this letter, please feel free to contact me .9
Consequently, on June 26, the Union' s business agent,
W. A. Hacklin, sent this letter to Lee Newton, Re-
spondent's production superintendent in Anchorage:
It has come to my attention that effective July 17,
1974 Mobil Oil Company will terminate the services of
Santa Fe Drilling Company. It is my further under-
standing that Mobil Oil Company will perform the
services previously performed by Santa Fe. Accord-
ingly, since you are a successor employer of Santa Fe
Drilling Company, we hereby request that you meet
and negotiate with us for the purposes of entering into
a Collective Bargaining Agreement.
Please respond to our request within ten (10) days of
the date of this letter.
Respondent did not respond in writing, but on July 1 its
attorney, Risher Thornton, told Hacklin by telephone that
Respondent would not bargain with the Union.
As earlier mentioned, the Union filed its charge against
Respondent on July 5.
B. Analysis and Conclusions
1. Contentions
The General Counsel contends that Respondent violated
Section 8(a)(5) by displacing the unit employees on the
Granite Point Platform without giving the Union a chance
to bargain over the decision or its effects on those employ-
ees. This contention is premised on the assumption that
Respondent and Santa Fe were joint employers of the unit
employees; therefore, that Respondent shared Santa Fe's
bargaining obligation to the Union.10'Respondent takes an
opposing position on all counts.
2. The joint-employer issue
Respondent and Santa Fe plainly were joint employers
9 Also on June 21, Santa Fe sent a letter to Respondent acknowledging
receipt of the termination notice and adding:
While agreeing that Mobil is within their contractual nghts by giving us
the required thirty (30) day contract cancellation notice , Santa Fe is
disappointed that Mobil elected to cancel our Granite Point Labor
Agreement after a tenure of almost eight years.
10 There is no contention that Respondent , by terminating the Santa Fe
contract during the stnke, in effect discharged strikers in violation of Sec.
8(a)(3); nor is it contended , despite the 8 (a)(1) statements considered later in
this decision , that Respondent otherwise violated Sec . 8(a)(3) by displacing
unit employees.
516 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
of the unit employees . That Respondent possessed the re-
quisite control over those employees is best shown by the
contract between it and Santa Fe, which , as previously
mentioned , empowered Respondent , among other things,
to (a) dictate the size of the Santa Fe crew , (b) compel the
replacement by Santa Fe of "any personnel whose qualifi-
cations or performance are unsatisfactory to Mobil," (c)
designate "crew change time and crew reporting time," (d)
hire any of the Santa Fe crew , and (e) terminate the con-
tract at will, the only limitation being 30 days ' notice. The
contract required , in addition , that wage-rate changes pro-
posed by Santa Fe be negotiated with Respondent.
In practice , moreover, Respondent 's control over Santa
Fe and the unit employees went beyond the letter of the
contract . Again as earlier noted , Respondent's production
foremen (a) intruded themselves in Santa Fe 's hiring pro-
cess to the extent of interviewing prospective platform em-
ployees and advising Santa Fe which of them to send to the
platform , (b) classified and reclassified the unit employees,
(c) prepared and posted work schedules, (d) sometimes dis-
charged , demoted, and otherwise disciplined unit employ-
ees, (e) authorized time off for unit employees, (f) author-
ized overtime for unit employees and assigned them to
tasks at a Mobil facility away from the platform , (g) jointly
with Santa Fe's leadmen approved promotions and vaca-
tions for unit employees and verified their timeslips, and
(h) often bypassed the Santa Fe leadmen when issuing or-
ders to the crew.
A fine-combing of the record would reveal yet other in-
dicia of Respondent 's control , but the point is abundantly
made by the foregoing aggregate of factors that Respon-
dent and Santa Fe were joint employers ." It also is con-
cluded, based on the terms of its contract with V.E. Con-
struction , and despite that contract 's characterization of
V.E. as an independent contractor , the Respondent and
V.E. are joint employers for purposes of this proceeding.
See, e .g., Ref-Chem Company, 169 NLRB 376, 377, 379
(1968).
3. The bargaining implications of joint -employership
The law seems settled, at least so far as the Board is
concerned, that Respondent, as joint employer with Santa
Fe of the unit employees, had an obligation coequal with
Santa Fe's to recognize and bargain with the lawful bar-
gaining representative of those employees. Ref-Chem Com-
pany, supra at 380.12 The nature of the joint-employer rela-
tionship is such that it is of no moment that the Union's
status derived from Board representation proceedings in
which Respondent was not a named party, as opposed, say,
to a voluntary grant of recognition by Santa Fe. "As joint
employers," to quote from Ref-Chem Company at 380,
..each is responsible for the conduct of the other."
11 A main argument of Respondent 's is that .joint-employershlp cannot be
found to exist because Respondent has severed its relationship with Santa
Fe This of course begs the ultimate question in the case.
12 Enforcement denied 418 F.2d 127 (C A 5, 1969). The Fifth Circuit,
however, expressly withheld judgment on "the use of the joint employer
doctrine to pass the obligation to bargain from one employer to another
... " 418 F.2d at 129
4. The duty to bargain over displacement of unit
employees
Relevant to the present case are Fibreboard Paper Prod-
ucts Corp. v. N.L.R.B., 379 U.S. 203 (1964), and the copious
body of case law that has arisen from it. Fibreboard in-
volved an employer's contracting out of in-plant mainte-
nance work, and the attendant discharge of its mainte-
nance employees, without first permitting the employees'
bargaining representative to discuss the matter. The rea-
sons for the change were validly economic and free of an-
tiunion taint. The Court held that "the replacement of em-
ployees in the existing unit with those of an independent
contractor to do the same work" was a mandatory subject
of bargaining under Section 8(a)(5) and 8(d) of the Act,
explaining (379 U.S. at 214):
[I]t is contended that when an employer can effect
cost savings . . . by contracting the work out, there is
no need to attempt to achieve similar economies
through negotiation with existing employees or to pro-
vide them with an opportunity to negotiate a mutually
acceptable alternative. The short answer is that, al-
though it is not possible to say whether a satisfactory
solution could be reached, national labor policy is
founded upon the congressional determination that
the chances are good enough to warrant subjecting
such issues to the process of collective negotiation.
[I]t is not necessary that it be likely or probable that
the union will yield or supply a feasible solution but
rather that the union be afforded an opportunity to
meet management 's legitimate complaints that its
maintenance was unduly costly."
Further to this point, and responsive to the concern stat-
ed in Respondent's brief that "if bargaining was required
prior to cancellation, the union would never agree to the
termination of all its employees . . . [and] . . . it would
seem to follow that the contract could never be cancelled,"
the Board observed in Ozark Trailers, Inc., 161 NLRB 561,
568:
[A]n employer's obligation to bargain does not include
the obligation to agree, but solely to engage in a full
and frank discussion with the collective-bargaining
representative in which a bona fide effort will be made
to explore possible alternatives, if any, that may
achieve a mutually satisfactory accommodation of the
interests of both the employer and the employees. If
such efforts fail, the employer is wholly free to make
and effectuate his decision. Hence, to compel an em-
ployer to bargain is not to deprive him of the freedom
to manage his business.13
Implicit in Fibreboard, however, is the qualification that
a contracting-out decision attended by considerations not
13 Or, as stated in The University of Chicago, 210 NLRB 190 (1974).
It is well established that an employer may, after the necessary bargain-
ing, terminate work done by the union's members at a particular loca-
tion and subcontract it, transfer it elsewhere, or introduce different
methods of operation at the same location , even though such action
. results in the elimination or reduction in size of the unit involved.
[Emphasis supplied.]
MOBIL OIL CORP. 517
"suitable for resolution within the collective bargaining
framework" need not be subjected to bargaining ritual. 379
U.S. at 213-14. The Board, following this lead, repeatedly
has stated that it does not read Fibreboard "as laying down
a hard and fast new rule to be mechanically applied re-
gardless of the situation involved." Sucesion Mario Merca-
do E Hijos, d/b/a Centra Refina 161 NLRB 696, 700
(1966); Westinghouse Electric Corp., 150 NLRB 1574, 1576
(1965); Shell Oil Co., 149 NLRB 305, 307 (1964). The
Board thus has refused to find a violation where "it seems
certain that no amount of give-and-take in bargaining ne-
gotiations could have forestalled the Respondent's inevita-
ble decision" (Sucesion Mario Mercado E Hyos, supra at
700); or where the decision involved such "a significant
investment or withdrawal of capital [affecting] the scope
and ultimate direction of an enterprise" as to "lie at the
very core of entrepreneurial control." General Motors
Corp., 191 NLRB 951, 952 (1971).
Even when an employer' s unilateral subcontracting deci-
sion is prompted by considerations "suitable for resolution
within the collective bargaining framework," Section
8(a)(5) is not necessarily violated. The Board in Westing-
house Electric Corp., supra, set forth several criteria, which
if met more or less cumulatively nevertheless warrant com-
plaint dismissal. They are if the contracting out was moti-
vated solely by economic considerations, comported with
the employer's traditional business operations and estab-
lished past practice, did not have demonstrable adverse im-
pact on the unit employees, and the union had had oppor-
tunity in previous negotiation to bargain about the
employer's subcontracting practices. See also Tellepsen Pet-
ro-Chem Constructors, 190 NLRB 433, fn. 1 (1971).
Whether an employer's subcontracting decision is of a
nature entitling the union first to bargain-i.e., whether it
is a mandatory subject of bargaining-turns, then, on the
considerations attending that decision. If they were "suita-
ble for resolution within the collective bargaining frame-
work ," the union is entitled unless the exonerating criteria
of Westinghouse Electric Corp.. are met. If, on the other
hand, those considerations were "at the very core of entre-
preneurial control" or otherwise such "that no amount of
give-and-take in bargaining negotiations could have fore-
stalled the . . . inevitable decision ," the union is not enti-
tled to bargain over the decision itself. But even where the
union is not entitled to bargain over the underlying deci-
sion, the employer generally must give it a chance to bar-
gain over the effects of the decision; i.e., "an opportunity
to bargain over the rights of the employees whose employ-
ment status will be altered by the managerial decision."
Ozark Trailers, Inc., supra at 563, quoting from N.L.R.B. v.
Royal Plating and Polishing Co., 350 F.2d 191, 196 (C.A. 3,
1965). See also Summit Tooling Company, 195 NLRB 479
(1972).
Applying these principles to the present case, it must be
concluded that Respondent was under a duty to bargain
over the effects on the unit employees of its decision to
replace them, whether or not under a duty to bargain over
the decision proper. Summit Tooling Co., supra; Ozark
Trailers, Inc., supra.
It is further concluded, in the circumstances at hand,
that Respondent was under a similar duty concerning the
decision itself. The saving Westinghouse criteria do not ob-
tain because of the harshly adverse impact of the decision
on the unit employees, the absence of precedent-setting
past practice, and the Union's lack of prior opportunity to
bargain over Respondent's contracting-out practices. It is
plain, furthermore, that the decision was triggered by the
anticipated increased costs of continuing the relationship
with Santa Fe, costs which necessarily were a function, at
least in part, of employee wage and benefit levels-matters
at once remote from the core of entrepreneurial control
and uniquely appropriate for treatment within the bargain-
ing framework.
Respondent being under a duty to permit the Union to
bargain not only over the effects of its decision to displace
the unit employees, but the decision as well, it follows that
its failure to do so and its rejection of the Union's request
to bargain violated Section 8(a)(5) and (1) of the Act.
IV THE ALLEGED INDEPENDENT VIOLATIONS OF SECTION 8(a)(1)
A. Facts
The NLRB election was held January 23, 1974. A day or
two later, one of the unit employees, Burton DePriest, con-
versed with John Green, one of Respondent's production
foremen , about the election. DePriest said he wondered
what would happen now that the Union had won, to which
Green replied : "I imagine Mobil will put this up for
bid." 14
At or about the same time, Respondent's other produc-
tion foreman , William Barlett, stated in the presence of
Santa Fe leadman Leonard Dunham and unit employees
William Gray and Billy Mack Nichols that Respondent
was not going to have a union contractor on the platform,
and instead would cancel its contract with Santa Fe and
bring in a nonunion contractor. Then in May, with the
strike in prospect, Barlett stated to Dunham and unit em-
ployee Glen Cowden that, if there were a strike, Respon-
dent would cancel Santa Fe's contract and bring in a non-
union contractor.
. Barlett, in his testimony, admitted the substance of the
statements attributed to him. As he put it: "Very likely I
did raise these options . . . [that, if there were a strike] .. .
we could shut down . . . [or] . . . we could replace them
with one of the nonunion contractors." Barlett added: "I'm
sure that everyone was aware that I was not speaking for
Mobil, and that it was my opinion."
B. Conclusions
Green and Barlett, as Respondent's production foremen,
were agents of Respondent and supervisors of the platform
employees previously found to have been jointly employed
by Respondent and Santa Fe. The one comment by Green
and the two by Barlett set forth above, whether given as
opinions or pronouncements from Olympus, necessarily
would have tended to interfere with, restrain, and coerce
the employees who heard them, violating Section 8(a)(1).I5
14 This is based on DePriest 's uncontroverted testimony . Green did not
testify.
15 Since none of the comments in question was spoken to Leadman Dun-
ham out of earshot of persons who indisputably were employees under the
Act, it is unnecessary to decide, as the General Counsel urges , that Dunham
was an employee rather than a statutory supervisor.
518 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
CONCLUSIONS OF LAW
1. Respondent is an employer engaged in and affecting
commerce within Section 2(2), (6), and (7) of the Act.
2. The Union is a labor organization within Section 2(5)
of the Act.
3. The employees in the bargaining unit described in the
certification of representative in Case 19-RC-6842 consti-
tute a unit appropriate for collective bargaining within Sec-
tion 9(b) of the Act.
4. Respondent and Santa Fe Drilling Company are the
joint employers of the employees in the above unit.
5. The Union at all material times has been the exclusive
collective-bargaining representative of the employees in the
above unit within Section 9(a) of the Act.
6. By terminating its contract with Santa Fe and thereby
displacing the employees in the above unit, without permit-
ting the Union to bargain over the underlying decision or
its effects on those employees, as found herein , Respon-
dent engaged in unfair labor practices within Section
8(a)(5) and (1) of the Act.
7. By the utterances of Production Foremen Green and
Barlett described herein , Respondent engaged in unfair la-
bor practices within Section 8(a)(1) of the Act.
8. The aforesaid unfair labor practices affect commerce
within Section 2(6) and (7) of the Act.
REMEDY
To effectuate the ?olicies of the Act, it is recommended
that Respondent be -irdered to cease and desist from the
unfair labor practice .. found.
Affirmatively, des 'ite the difficulties inherent in "un-
scrambling the egg" i cases of this sort , it is recommended
that Respondent be ordered fully to restore the status quo
ante by reviving its relationship with Santa Fe on the Gran-
ite Point Platform a-d in so doing offer reinstatement to
the unlawfully displa ed employees and make them whole
for their monetary 1 ses, from the July 17 date that V.E.
Construction suppla ted Santa Fe, occasioned by their dis-
placement . It is further recommended , should Respondent
then wish to replace Santa Fe , that it be required first to
bargain with the Union over the decision and its effects on
the employees subject to displacement.
The inclusion in this recommendation of the backpay
and reinstatement elements is not without awareness that
the employees in question were on strike when their unlaw-
ful displacement occurred , and of the Board policy stated
in Astro Electronics, Inc., 188 NLRB 572, 573 (1971):
It is the settled policy of the Board that striking em-
ployees are not entitled to backpay while they are on
strike . Their rights depend on the termination of the
strike which is ordinarily signified by the strikers' ap-
plication for reinstatement. Employees who are dis-
charged while on strike [which in effect happened to
the employees in question ] also must indicate aban-
donment of the strike and a willingness to return to
work in order to establish their right to their jobs and
resumption of wages unless there is a showing that such
application would be rejected, i.e., that it would have been
futile. [Emphasis supplied.] 16
Rather, it is concluded that Respondent's additional act of
contracting out the work to V.E., after earlier terminating
the Santa Fe contract , made application for reinstatement
by the strikers so palpably futile as to satisfy the excep-
tion-emphasized in the above passage-to the general
rule.
Nor is this recommendation unmindful that its imple-
mentation would involve the Board in a reengineering of
Respondent 's contractual relationships with two entities
who are not named parties herein , Santa Fe and V.E. Santa
Fe and V.E. both being joint employers of Respondent for
purposes of this proceeding, however, such involvement
plainly would not exceed the Board 's remedial powers;
and, in all the circumstances , is essential to the achieve-
ment of a meaningful remedy.17
Backpay shall be computed in accordance with F. W.
Woolworth Co., 90 NLRB 289 (1950), and Isis Plumbing &
Heating Co., 138 NLRB 716 (1962).
Upon the foregoing findings of fact , conclusions of law,
and the entire record, and pursuant to Section 10(c) of the
Act, I hereby issue the following recommended:
ORDER'S
Respondent, Mobil Oil Corporation, its officers, agents,
successors , and assigns , shall:
1. Cease and desist from:
(a) Stating to employees that it would cancel its contract
with Santa Fe Drilling Company, or with any other em-
ployer, rather than have a union contractor on the Granite
Point Platform , or should the employees go on strike.
(b) Refusing to bargain collectively with Alaska Rough-
necks and Drillers Association as the exclusive bargaining
representative of the employees in the bargaining unit set
forth in the certification of representative issued by the
NLRB in Case 19-RC-6842; and from contracting out the
work of those employees or otherwise changing their
wages , hours, and other terms and conditions of employ-
16 See also Valley Oil Co, 210 NLRB 370 (1974), Royal Typewriter Com-
pany, 209 NLRB 1006 (1974 ); Sea-Way Distributing, Inc, 143 NLRB 460
( 1963), Happ Brothers Company, 90 NLRB 1513, 1518-19 ( 1950).
17 The Supreme Court expressly considered and approved a remedy of
comparable scope in Fibreboard, 379 U.S. at 215-216 The Board in special
circumstances , however, imposes gentler sanctions For instance in Empire
Dental Co, 211 NLRB 860 (1974 ); Ozark Trailers, Inc, supra; Royal Plating
and Polishing Co., 148 NLRB 545 (1964); and Carl Rochet, d/b/a Renton
News Record, 136 NLRB 1294 ( 1962), it did not order resumption of the
discontinued operations because intervening events or other extenuating
factors made resumption seriously burdensome . Similarly, the Board in
those cases relaxed or eliminated the backpay aspect of the remedy The
present case , unlike those , is not one in which the policies of the Act would
be served by a softened remedy.
19 All outstanding motions inconsistent with this recommended Order
hereby are denied . 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. 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.
MOBIL OIL CORP. 519
ment without first bargaining with the above labor organi-
zation.
(c) In any like or related manner interfering with, re-
straining, or coercing employees in the exercise of rights
under Section 7 of the Act.
2. Take the following affirmative action:
(a) Revive its contractual relationship with Santa Fe
Drilling Company on the Granite Point Platform; and, in
so doing, offer reinstatement to those employees displaced
by its termination of the contract with Santa Fe, without
prejudice to their seniority and other rights and privileges,
and make them whole for any loss of pay and other bene-
fits suffered by them on and after July 17, 1974.
(b) Bargain collectively with Alaska Roughnecks and
Drillers Association as the exclusive representative of the
employees in the aforementioned unit with respect to
wages, hours, and other terms and conditions of employ-
ment.
(c) Preserve and, upon request, make available to the
Board or its agents, for examination and copying, all pay-
roll records, social security payment records, timecards,
personnel records and reports, and all other records neces-
sary to analyze the amount of backpay due and the rights
of reinstatement under the terms of this Order.
(d) Post on the Granite Point Platform and its office in
Anchorage, Alaska, copies of the attached notice marked
"Appendix." 19 Copies of said notice on forms provided by
the Regional Director for Region 19, after being duly
signed by Respondent's representative, shall be posted by
Respondent immediately upon receipt thereof, and be
maintained by it for 60 consecutive days thereafter, in con-
spicuous places, including all places where notices to em-
ployees are customarily posted. Reasonable steps shall be
taken by Respondent to ensure that said notices are not
altered, defaced, or covered by any other material.
(e) Notify the Regional Director for Region 19, in writ-
ing, within 20 days from the date of this Order, what steps
the Respondent has taken to comply herewith.
19 In the event that this Order is enforced by a Judgment of a United
States Court of Appeals , the words in the notice reading "Posted by Order
of the National Labor Relations Board " shall read "Posted pursuant to a
Judgment of the United States Court of Appeals Enforcing an Order of the
National Labor Relations Board