Mondovi Foods Corp.

National Labor Relations Board - Board Decisions

Apr 24, 1978

235 N.L.R.B. 1080 (N.L.R.B. 1978)

DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Mondovi Foods Corporation and General Drivers and
Helpers Union, Local No. 662, affiliated with
International Brotherhood of Teamsters, Chauf-
feurs, Warehousemen and Helpers of America.
Case 18-CA-5404
April 24, 1978
DECISION AND ORDER
BY CHAIRMAN FANNING AND MEMBERS
PENELLO AND MURPHY
Upon a charge duly filed by General Drivers and
Helpers Union, Local No. 662, affiliated with Inter-
national Brotherhood of Teamsters, Chauffeurs,
Warehousemen and Helpers of America (herein the
Union) against Mondovi Foods Corporation (herein
Mondovi or Respondent), the General Counsel of
the National Labor Relations Board, by its Regional
Director for Region 18, on July 20, 1977,1 issued and
served on the parties a complaint alleging that
Respondent committed violations of the National
Labor Relations Act, as amended. The complaint
alleges that Mondovi is a successor employer to the
Luck, Wisconsin, whey drying operations of Land
O'Lakes, Incorporated (herein Land O'Lakes), and
has violated Section 8(a)(5) and (1) of the Act by
refusing, since on or about June 2, to recognize and
bargain with the Union as the authorized representa-
tive of a majority of its employees in a unit
appropriate for collective bargaining.
Respondent's answer admits that Respondent is an
employer engaged in commerce within the meaning
of Section 2(6) and (7) of the Act, but denies that it is
a successor-employer, or that it has violated the Act
as alleged.
On September 12, a hearing was held before
Administrative Law Judge Nancy M. Sherman. At
the hearing, the parties stipulated the relevant facts
of this case, set forth below. At the conclusion of the
hearing, the parties agreed on the record to waive the
issuance of a Decision by the Administrative Law
Judge and to transfer this matter directly to the
Board for decision.
On December 16, the Board ordered that the
proceeding be transferred to and continued before
the Board for the purpose of making findings of fact
and conclusions of law and the issuance of a decision
and order, and set a date for the filing of briefs.
Thereafter, the General Counsel, Respondent, and
the Union filed briefs.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the
National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
The Board has considered the entire record herein
and the briefs and makes the following:
FINDINGS OF FACT
I. THE BUSINESS OF THE EMPLOYER
Mondovi Foods Corporation is a Wisconsin corpo-
ration engaged, inter alia, in the operation of a whey
drying operation in Luck, Wisconsin. During the 12-
month period ending June 30, a representative
period, Respondent, in the course and conduct of its
business operations, purchased and caused to be
transported and delivered to its places of business in
the State of Wisconsin goods and materials valued in
excess of $50,000, of which goods and materials
valued in excess of $50,000 were transported and
delivered to its places of business in the State of
Wisconsin directly from points located outside the
State of Wisconsin. Similarly, during the same
representative period, Respondent, in the course and
conduct of its business operations, manufactured,
sold, and distributed at its places of business in the
State of Wisconsin products valued in excess of
$50,000, of which products valued in excess of
$50,000 were shipped from said places of business
directly to points located outside the State of
Wisconsin. Respondent admitted, and we find, that
Respondent is, and has been at all times material, an
employer engaged in commerce within the meaning
of Section 2(2), (6), and (7) of the Act.
II. THE LABOR ORGANIZATION INVOLVED
The parties stipulated, and we find, that the Union
is, and has been at all times material herein, a labor
organization within the meaning of Section 2(5) of
the Act.
III. THE ALLEGED UNFAIR LABOR PRACTICES
A. The Facts
The undisputed facts, as stipulated by the parties,
are as follows:
Prior to May 26, Land O'Lakes owned and
operated a facility in Luck, Wisconsin, consisting of
four departments: office, Grade A, whey drying, and
truck driving. Truck driving had been eliminated by
Land O'Lakes prior to May i; Grade A involved
processing of milk for human consumption; and
whey drying involved drying and processing whey
for animal feed. Land O'Lakes had a collective-
bargaining agreement with the Union which covered
I Unless otherwise indicated, all dates herein are 1977.
235 NLRB No. 135
1080
MONDOVI FOODS CORPORATION
its Grade A and whey drying departments. The
agreement contained a union-security provision.
During the period material herein, Land O'Lakes
was in the process of selling its Luck, Wisconsin,
facility to Respondent. On May 25, Land O'Lakes
ceased its whey drying operation at the facility and,
on May 26, laid off the 10 bargaining unit employees
in that operation. (At some later date Land O'Lakes
also ceased operation of the Grade A division.) On
May 26, Respondent began to hire employees for the
whey drying operation, and, by May 31, it had hired
seven employees, six of whom had been Land
O'Lakes whey drying employees. Eventually, Re-
spondent's whey drying complement totaled 11
employees, 9 of whom were members of the Union
and former Land O'Lakes employees.
Respondent began operation of the whey drying
facility on May 31. On that date Robert Gotzman,
the Union's business agent, sent Roger Marten,
secretary of Respondent, a letter requesting a meet-
ing on June 6. On June 2, Karl Goethel, Respon-
dent's attorney, sent Gotzman a letter stating that
Respondent "did not buy the Land O'Lakes opera-
tion. They bought a building which they will use in
part and part will be leased back to Land O'Lakes.
Therefore, the agreement you may have with Land
O'Lakes does not apply to Respondent." 2 Mean-
while, on that same day, Gotzman sent Marten a
letter requesting that Respondent recognize the
Union, and, on June 3, he sent a similar demand for
recognition to Goethel. Respondent has not met with
Gotzman, has not granted the Union recognition,
and has refused to bargain with the Union.
Respondent stipulated that "All production and
maintenance employees employed by Respondent at
its Luck, Wisconsin, facility, excluding office clerical
employees, professional employees, guards and su-
pervisors as defined in the Act, constitute a unit
appropriate for purposes of collective bargain-
ing ....
As stated, Respondent began the whey drying
operation on May 31. Respondent purchased all
equipment necessary to operate the whey drying
facility from Land O'Lakes, which equipment repre-
sents most of the equipment formerly used by Land
O'Lakes at the Luck plant. Respondent did not
purchase the equipment for drying high fat products
and does not operate the Grade A plant.
Land O'Lakes, when operating the Luck facility,
dried whey and high fat products. Respondent does
custom drying of whey and does not own any
product dried in the Luck plant. Respondent's
customers are Purity Cheese and Dell Dee Foods;
Respondent does not service any former customers
2 Land O'Lakes leased back the Grade A facility until it later discontin-
ued operation of that facility.
of Land O'Lakes, and Land O'Lakes did not assign
its unemployment account to Respondent.
Thomas Lucas, Land O'Lakes' attorney, testified 3
that it was his understanding that Land O'Lakes did
not own the whey it dried, but that Land O'Lakes
performed custom whey drying for a customer called
Northland Foods, and that Northland, with the help
of Land O'Lakes marketing staff, sold the dried whey
to Land O'Lakes agricultural service division.
B. Contentions of the Parties
The General Counsel and the Union contend that
Respondent is a successor employer to Land O'Lakes
with regard to the whey drying operation. In support
of this contention, they point out that Respondent
continued operation of the Land O'Lakes whey
drying operation with less than a week's hiatus, that
Respondent's work force at that operation consists in
major part of former Land O'Lakes whey drying
employees who essentially perform the same process
using the same equipment in the same location as
they had when working with Land O'Lakes, and that
the collective-bargaining agreement between Land
O'Lakes and the Union is sufficient evidence that the
Union does represent a majority of those employees
(citing Roman Catholic Diocese of Brooklyn, Henry M.
Hald High School Association, 222 NLRB 1052, 1053
(1976)). Accordingly, they argue that Respondent
succeeded to its predecessor's bargaining obligation,
and that, by refusing to honor that obligation,
Respondent has violated Section 8(aX5) and (1) of
the Act (citing N. L. R. B. v. Burns International Securi-
ty Service, Inc., et al., 406 U.S. 272 (1972)).
Respondent contends that it has simply purchased
certain equipment and real estate from Land
O'Lakes, and that Respondent has no obligation to
bargain with the Union because there has been a
"substantial and material alteration in the employing
enterprise" (citing Lincoln Private Police, Inc., as
Successor to Industrial Security Guards, Inc., 189
NLRB 717, 719 (1971)). In support of the latter
contention, Respondent points out, inter alia, that:
all Land O'Lakes employees were terminated prior to
Respondent's purchase; former Land O'Lakes' em-
ployees hired by Respondent were required to file
new employment applications with Respondent;
Respondent does not own the products it dries at the
Luck facility; Respondent has different suppliers and
customers from Land O'Lakes; and Land O'Lakes
retained the Grade A rights and the high fat drying
equipment.
3 Lucas' testimony was not covered by the stipulation.
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DECISIONS OF NATIONAL LABOR RELATIONS BOARD
C. Discussion and Conclusions
When all or part of a business is sold, certain legal
obligations of the seller devolve upon the purchaser.
Where there is substantial continuity in the identity
of the employing enterprise, one such obligation will
be that of the employer to recognize and bargain
with a union which represents the former owner's
employees. However, if in the course of the transfer
there have been substantial and material changes in
the employing enterprise, the new employer will not
be found to have succeeded to the bargaining
obligation of the former employer.4
In cases involving the successorship issue, the
Board's key consideration is "whether it may reason-
ably be assumed that, as a result of transitional
changes, the employees' desires concerning unioniza-
tion [have] likely changed." 5 The Board considers a
variety of factors in determining whether the new
employer has succeeded to the former employer's
bargaining obligation. Certainly a prime factor is
whether the purchaser has hired a sufficient number
of former employees of the seller to constitute a
majority of the employee complement of the appro-
priate unit.6 Once it has been found that the
purchaser has hired such a majority, the Board
considers such circumstances as whether or not there
has been a long hiatus in resuming operations, a
change in product line or market, or a change of
location or scale of operations. 7 Hiatus is a signifi-
cant factor because, as it lengthens, employees'
expectations of hire by the purchaser diminish.
Change of location may have a similar result in
proportion to the distance from the prior location.
Changes in product line or market can be indicative
of a different type of business (e.g., different or
altered production machinery necessitating retrain-
ing and/or different skills). However, a change in
scale of operation must be extreme before it will alter
a finding of successorship. 8
Here, as fully set forth above, Respondent, after a
brief hiatus, resumed operation of the whey drying
facility formerly operated by Land O'Lakes. Respon-
dent did so in the same location, employing, as a
majority of its work force, former Land O'Lakes
employees to produce the same product (or render
the same service) utilizing the same equipment. In
view of all of the above, it is clear that nothing in the
transitional changes occurring in connection with
Respondent's purchase and operation of Land
4 Lincoln Private Police, Inc., supra.
5 Ranch-Way, Inc., 183 NLRB 1168, 1169 (1970).
e See N.L.R.B. v. Burns. supra; Howard Johnson Co., Inc. v. Detroit Local
Joint Executive Boar4 Hotel & Restaurant Employees & Bartenders Interna-
tional Union, AFL-CIO, 417 U.S. 249 (1974); Spruce Up Corporation, 209
NLRB 194 (1974).
7 See, e.g., Radiant Fashions, Inc., 202 NLRB 938. 941 (1973).
O'Lakes' Luck, Wisconsin, facility would undermine
a finding that the employees' desires concerning
union representation have remained unchanged.
Accordingly, we find that Respondent did succeed
to Land O'Lakes' obligation to bargain with the
Union, and that, in failing and refusing to recognize
and bargain with the Union as the authorized
representative of a majority of its employees in a unit
appropriate for collective bargaining, Respondent
has violated Section 8(a)(5) and (1) of the Act.
IV. THE EFFECT OF THE UNFAIR LABOR
PRACTICES UPON COMMERCE
The activities of Respondent set forth in section
III, above, occurring in connection with the opera-
tions of Respondent described in section 1, above,
have a close, intimate, and substantial relationship to
trade, traffic, and commerce among the several
States and tend to lead to labor disputes burdening
and obstructing commerce and the free flow of
commerce.
CONCLUSIONS OF LAW
1. Respondent is engaged in commerce within the
meaning of Section 2(6) and (7) of the Act.
2. The Union is a labor organization within the
meaning of Section 2(5) of the Act.
3. All production and maintenance employees
employed by Respondent at its Luck, Wisconsin,
facility, excluding office clerical employees, profes-
sional employees, guards and supervisors as defined
in the Act, constitute a unit appropriate for purposes
of collective bargaining within the meaning of
Section 9(b) of the Act.
4. General Drivers and Helpers Union, Local No.
662, affiliated with International Brotherhood of
Teamsters, Chauffeurs, Warehousemen and Helpers
of America, has been and is the exclusive representa-
tive of all employees in the aforesaid appropriate unit
for the purposes of collective bargaining within the
meaning of Section 9(a) of the Act.
5. By refusing, on or about June 2, and at all
times thereafter, to recognize and bargain collectively
with the above-named labor organization as the
exclusive representative of all its employees in the
appropriate unit, Respondent has engaged in and is
engaging in unfair labor practices within the meaning
of Section 8(a)(5) and (1) of the Act.
8 See, e.g., Ranch-Way, Inc., supra, in which respondent was found to be
a successor although it had purchased only I of the seller's 16 operations.
The seller had a collective-bargaining agreement with the union covering
800 production and maintenance employees; respondent hired 18 of the
seller's previous employees, a majority of the unit complement for the
operation which it purchased.
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MONDOVI FOODS CORPORATION
6. The aforesaid unfair labor practices are unfair
labor practices affecting commerce within the mean-
ing of Section 2(6) and (7) of the Act.
THE REMEDY
Having found that Respondent has engaged in and
is engaging in unfair labor practices within the
meaning of Section 8(a)(5) and (1) of the Act, we
shall order that it cease and desist therefrom and,
upon request, bargain collectively with the Union as
the exclusive representative of all employees in the
appropriate unit.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor
Relations Board hereby orders that the Respondent,
Mondovi Foods Corporation, Luck, Wisconsin, its
officers, agents, successors, and assigns, shall:
1. Cease and desist from:
(a) Refusing to bargain collectively concerning
rates of pay, wages, hours, and other terms and
conditions of employment with General Drivers and
Helpers Union, Local No. 662, affiliated with Inter-
national Brotherhood of Teamsters, Chauffeurs,
Warehousemen and Helpers of America, by failing
to recognize or bargain with the Union as the
exclusive representative of its employees in the
following appropriate unit:
All production and maintenance employees
employed by Respondent at its Luck, Wisconsin,
facility, excluding office clerical employees, pro-
fessional employees, guards and supervisors as
defined in the Act.
(b) In any like or related manner interfering with,
restraining, or coercing employees in the exercise of
the rights guaranteed to them by Section 7 of the Act.
2. Take the following affirmative action which
the Board finds will effectuate the policies of the Act:
(a) Upon request, bargain with the above-named
labor organization as the exclusive representative of
all employees in the aforesaid appropriate unit, with
respect to rates of pay, wages, hours, and other terms
and conditions of employment, and, if an under-
standing is reached, embody such understanding in a
signed agreement.
(b) Post at its Luck, Wisconsin, facility copies of
the attached notice marked "Appendix." 9 Copies of
said notice, on forms provided by the Regional
Director for Region 18, 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 thereaf-
ter, in conspicuous places, including all places where
notices to employees are customarily posted. Reason-
able steps shall be taken by Respondent to insure
that said notices are not altered, defaced, or covered
by any other material.
(c) Notify the Regional Director for Region 18, in
writing, within 20 days from the date of this Order,
what steps Respondent has taken to comply here-
with.
9 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
or 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."
APPENDIX
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
WE WILL NOT refuse to bargain collectively
concerning rates of pay, wages, hours, and other
terms and conditions of employment with Gener-
al Drivers and Helpers Union, Local No. 662,
affiliated with International Brotherhood of
Teamsters, Chauffeurs, Warehousemen and Help-
ers of America, as the exclusive representative of
the employees in the bargaining unit described
below.
WE WILL NOT in any like or related manner
interfere with, restrain, or coerce our employees
in the exercise of rights guaranteed by Section 7
of the Act.
WE WILL, upon request, bargain with the
above-named Union, as the exclusive representa-
tive of all employees in the bargaining unit
described below, with respect to rates of pay,
wages, hours, and other terms and conditions of
employment, and, if an understanding is reached,
embody such understanding in a signed agree-
ment. The bargaining unit is:
All production and maintenance employ-
ees employed by us at our Luck, Wisconsin,
facility, excluding office clerical employees,
professional employees, guards and supervi-
sors as defined in the Act.
MONDOVI FOODS
CORPORATION
1083