Morco Industries, Inc.

National Labor Relations Board - Board Decisions

Mar 20, 1981

255 N.L.R.B. 146 (N.L.R.B. 1981)

146 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Morco Industries, Inc.; and All Southern Fabrica-
tors, a Division of Morco Industries, Inc. and
Sheet Metal Workers International Association,
Local Union No. 57, affiliated with Sheet Metal
Workers International Association, AFL-CIO.
Case 12-CA-9065
March 20, 1981
DECISION AND ORDER
On November 18, 1980, Administrative Law
Judge Richard J. Linton issued the attached Deci-
sion in this proceeding. Thereafter, Respondent
filed exceptions and a supporting brief.
The Board has considered the record and the at-
tached Decision in light of the exceptions and brief
and has decided to affirm the rulings, findings, and
conclusions of the Administrative Law Judge and
to adopt his recommended Order.
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 and
hereby orders that the Respondent, Morco Indus-
tries, Inc.; and All Southern Fabricators, a Division
of Morco Industries, Inc., Tampa, Florida, its offi-
cers, agents, successors, and assigns, shall take the
action set forth in the said recommended Order.
DECISION
STATEMENT OF THE CASE
RICHARD J. LINTON, Administrative Law Judge: This
case was heard before me in Tampa, Florida, on August
11 and 12, 1980, pursuant to a complaint issued April 15,
1980, by the General Counsel of the National Labor Re-
lations Board through the Regional Director for Region
12 of the Board. The complaint is based upon a charge
filed March 5, 1980, by Sheet Metal Workers Interna-
tional Association, Local Union No. 57, affiliated with
Sheet Metal Workers International Association, AFL-
CIO, herein the Union, and subsequently amended,
against Morco Industries, Inc., d/b/a All Southern Fab-
ricators.
In his complaint, as amended, the General Counsel al-
leges that Respondent is a single, integrated business en-
terprise and that it has violated Section 8(a)(5) of the Act
by unilaterally transferring work from its All Southern
Fabricators bargaining unit in Pinellas Park, Tampa,
Florida, to its Morco Stainless Steel Fabricators bargain-
ing unit in Long Beach, Mississippi. For many years, the
Union has been the exclusive collective-bargaining repre-
sentative of the All Southern Fabricators (Southern or
Tampa, herein) bargaining unit. On the other hand, the
I The corporate structure of the employer will be discussed shortly.
For convenience, reference to the company, and its relevant divisions,
usually will be as Respondent.
255 NLRB No. 21
Long Beach, Mississippi (Morco Stainless or Long Beach
herein), facility is new and the employees unrepresented.
Upon the entire record, including my observation of
the demeanor of the witnesses, and after due considera-
tion of the briefs filed by the General Counsel and Re-
spondent (Charging Party filed none), I make the follow-
ing:
FINDINGS OF FACT
I. JURISDICTION
Jurisdiction is not an issue. Morco Industries, Inc., a
Florida corporation, with headquarters in Mobile, Ala-
bama, operates an unincorporated facility in Pinellas
Park, Tampa, Florida (known as All Southern Fabrica-
tors Southern, where it is engaged in manufacturing and
selling of restaurant equipment. During the past 12
months, Respondent, through its Southern facility, sold
and shipped products valued in excess of $50,000 direct
from Tampa, Florida, to customers located at points out-
side the State of Florida. Respondent admits, and I find,
that it is an employer within the meaning of Section 2(2),
(6), and (7) of the Act.
II1. THE LABOR ORGANIZATION INVOLVED
Respondent admits, and I find, that the Union is a
labor organization within the meaning of Section 2(5) of
the Act.
III. THE ALLEGED UNFAIR LABOR PRACTICES
A. Corporate Structure and the Single-Employer Issue
As the pleadings regarding the identity of Respondent
remain imprecise, attention must be devoted here to that
subject. Originally the complaint named Morco Indus-
tries, Inc.; and Morco Industries, d/b/a All Southern
Fabricators as Respondent and, in paragraph 2(c) of the
complaint, they were alleged to be a single integrated en-
terprise. In its answer Respondent termed this allegation
as irrelevant. Early in the hearing, the General Counsel
was permitted to amend the complaint so that Respond-
ent was described as: Morco Industries, Inc.; and All
Southern Fabricators, a Division of Morco Industries,
Inc. At the hearing, and in its brief, Respondent has de-
scribed itself as All Southern Fabricators, a Division of
Morco Industries, Inc.
Record evidence clarifies the situation and demon-
strates that Southern and Morco Stainless are both unin-
corporated operating entities (or plants with company
names) within an operating division of the corporate Re-
spondent, Morco Industries, Inc. Based upon the testimo-
ny of Roger Stoll, vice president of the Equipment Divi-
sion of Morco Industries, Inc., the corporate structure is
as follows:
MORCO INDUSTRIES, INC. 147
Morrison, Incorporated2 (Umbrella owner)
Morco Industries, Inc.
Equipment Division
All Southern
Fabricators
(Tampa, Florida)
Morco Stainless Steel
Fabricators
(Long Beach, Mississippi)
(And 7 other unidentified companies)
The relevant management hierarchy is as follows:
Roger Stoll is vice president of the Equipment Division.
He formulates the labor relations policy for the entire
Equipment Division (nine companies) and sees that such
is implemented. Although Stoll reports to Executive
Vice President C. J. Hollingsworth, the record does not
establish which firm Hollingsworth is with. Stoll also is
in charge of corporate planning and administration. E. L.
Ed Matthews is vice president for manufacturing for the
Equipment Division and, it seems, subordinate to Stoll.
William Temple is general manager of manufacturing for
the Equipment Division. Manuel Santana is manager of
southern. John Randall is manager of Long Beach. Stoll
testified that he maintains fairly close communication
with an official in charge of Morrison Cafeterias at Mor-
rison, Incorporated, so that the production of restaurant
equipment will be coordinated with the scheduled con-
struction completion of Morrison's new cafeterias. South-
ern and Long Beach are the only two plants producing
metal equipment for cafeterias in the Equipment Divi-
sion. Southern has been in operation since 1969. Al-
though Long Beach opened in early January 1980, there
was no production for the first 2 months.
The central headquarters of Morco's Equipment Divi-
sion is in Tampa, Florida, which houses Stoll's offices.
Stoll visits all nine facilities in the Equipment Division
on a regular basis to conduct supervision of their oper-
ations. Along with Matthews, Stoll made the decision to
open Long Beach. The contract sales division of Morco
sells the kitchen equipment that is fabricated at both
Southern and Morco Stainless through a centralized sales
operation to some of the same customers of both plants.
One might wonder why it is necessary to discuss in
detail the relationships between the various entities here
since they are all part of Morco Industries, Inc. Howev-
er, as the Board stated (in a Sec. 8(bX4)(B) context),
"The Hearst cases hold, of course, that corporate identi-
ty does not in itself preclude neutrality among the parts
of the corporation." Teamsters, Chauffeurs, Warehouse-
men and Helpers, Local Union No. 560, affiliated with In-
ternational Brotherhood of Teamsters, Chauffeurs, Ware-
housemen and Helpers of America (Curtin Matheson Scien-
tific, Inc.), 248 NLRB 1212 (1980). Conceivably, Long
Beach could be so autonomous as to be the equivalent of
a subsidiary corporation so that the need to resolve the
single employer concept would be more obvious. It is
clear that Southern and Long Beach are far from being
autonomous and in fact are closely integrated within
Morco's Equipment Division. Moreover, the key factor,
2 Also owns Morrison Cafeterias.
a centrally controlled labor relations policy, is present
here.
In view of the foregoing, it is clear that Morco Indus-
tries, Inc., is the responsible Respondent in this proceed-
ing. As Southern and Long Beach are mere unincorpor-
ated operating plants of Respondent Morco Industries,
Inc., with a labor relations policy centrally controlled
and administered by Vice President Roger Stoll of the
Equipment Division, it is clear that for our purposes
here, all entities a are a single employer. I so find. 4 Los
Angeles Marine Hardware Co., a Division of Mission
Marine Associates, Inc.; and California Marine Hardware
Co., a Division of Mission Marine Associates, Inc., 235
NLRB 720, 721, 731-732 (1978), enfd. 602 F.2d 1302 (9th
Cir. 1979).
B. Background and Chronology
1. Site leased-Union recognized
In 1969, Respondent acquired its Tampa facility by
leasing property that had formerly been occupied by an-
other company. That firm's employees were represented
by the Union. Respondent immediately recognized the
Union, negotiated its own contract with the Union, and
began operation with 12 employees in the bargaining
unit. In the 11-year relations between Respondent and
the Union, there have been no strikes directed at the
Tampa plant, no arbitrations, and no lawsuits.
Operating as a "job shop," Southern's only initial cus-
tomer was Morrison Cafeterias, a corporate affiliate, for
whom it fabricated stainless steel equipment, including
counters, dishwashers, etc. A few years before opening,
Respondent began seeking and securing contracts with
outside (unaffiliated with Morrison, Inc.) companies such
as Marriott, Hyatt, Disney World, and the Federal gov-
ernment.
2. Tampa's physical capacity exhausted
During the first 10 years of its existence, Respondent's
Southern operation experienced much success. The
Tampa plant fabricated the equipment for 111 of the 112
Morrison cafeterias constructed during that period of
time. While initially Respondent had orders for five or
six Morrison cafeterias every year, the annual orders
now average about 15 to 16.5 Further, "the outside" por-
tion of the business also prospered to the point that
today more than 55 percent of the Tampa sales are to
non-Morrison customers. The sales volume grew from
$148,375 in 1970 to $3,434,293 for the fiscal year ending
May 31, 1981.6 This exceptional increase of 2,300 per-
a Morco Industries, Inc.; the Equipment Division; Tampa; and Long
Beach.
4 Respondent does not address the matter in its brief and styles the
caption as All Southern Fabricators, a Division of Morco Industries, Inc.
I Since its early years, Respondent has added new stainless steel restau-
rant products to its line for Morrison's, including ice bins, shelving, let-
tuce bins, dishwashers, hoods, and frosttops. Prior thereto, Morrison
Cafeterias was forced to purchase this equipment from unaffiliated com-
panies. These new products obviously contributed to the spiraling sales
and heavy demand for work at the Tampa facility.
6 The number of Respondent's full-time salespersons has grown from
one in 1977 to six at the time of the hearing, an indication of the heavy
Continued
MORCO INDUSTRIES, NC.
148 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
cent motivated two expansions of the Tampa plant to the
point of more than exhausting the land available to Re-
spondent. The original plant, leased in 1969, had 12,000
square feet. In 1971, an additional 12,000 square feet
were added, and in 1975 still another 12,000 square feet
of manufacturing space were tacked on to the structure.
A diagram of the property, drawn to scale, was received
into evidence as Respondent's Exhibit 4.
Even with these expansions, Respondent found that it
was forced to contract out the equipment for a Morrison
cafeteria in 1975 because of lack of capacity. In the
winter of 1979, Respondent realized there was simply no
additional room for expansion. The Pinellas Park zoning
ordinance, section XVII, paragraph F, states, "the maxi-
mum area of allowable coverage of a lot or parcel by
structure shall be fifty percent (50%) of the land area of
the lot or parcel." Respondent was informed in February
1980 that a variance from that regulation would be nec-
essary because more than 50 percent of its lot was devot-
ed to the building. Photographs accepted into evidence
depict the two additions, the small area for parking and
driving around the plant, and the crowded conditions
inside the plant.
In 1977, Respondent was forced to cancel some orders
it had accepted from outside companies because it simply
lacked the capacity to fill them. Howard Johnson, one of
those companies, has not placed an order since that inci-
dent. Desperate for space in 1978, Respondent located
and leased a separate warehouse building two blocks
from its Tampa (Pinellas Park) plant for the purpose of
staging and storing finished products. Testimony reflects
that this unwieldy arrangement has been both inefficient
and expensive.
3. Long Beach plant built
In the winter of 1978, Respondent selected Long
Beach, Mississippi, as the site of a plant designed to re-
lieve the over-expanded capacity of Tampa and to fabri-
cate at least some of the equipment for planned Morrison
cafeterias. Most of Morrison's new cafeterias, as Re-
spondent's Exhibit 11 reflects, were opened in the mid-
South. As explained by Vice President Stoll, the reason
Respondent needed the Long Beach plant was that the
capacity of the Tampa plant had been exhausted. Long
Beach, Mississippi, was selected primarily because it is
relatively close to the growth of Morrison Cafeterias,
which are being constructed in mid-South/Southwest lo-
cations such as Lafayette and New Orleans, Louisiana;
Dallas and Fort Worth, Texas; Springfield, Missouri;
Oklahoma; and Ohio.7 As described by Stoll, Respond-
ent made a capital investment of $950,000 in building this
new facility-the operational name of which is Morco
Stainless Steel Fabricators.
Chastain Havens, union steward at Tampa, testified
that it was general knowledge among the employees
during June 1979 that the Long Beach plant was under
"outside" work it is doing. Moreover, the bargaining unit had grown
from the original 12 to some 31 or 32 as of the time of the hearing.
7 Stoll testified that additional reasons were (I) the very attractive
bond offer from the State of Mississippi and (2) the fact that other sheet
metal companies in the Mississippi Gulf Coast area provide at least some
experienced sheet metal workers.
construction. Checking with Tampa Plant Manager
Manuel Santana, Jr., Havens learned that indeed the new
plant was under construction. More will be said later
herein on this subject.
Although the Long Beach plant opened the first part
of January 1980, the buildup has been slow, and even 7
months later there were only 17 production and mainte-
nance employees. The production completed in January
and February was, in the words of Vice President Stoll,
"nil."
4. Impact of Southern Bell's headquarters contract
On July 9, 1979, Respondent and Beers Construction
Company signed a contract under which Respondent is
to fabricate the stainless steel restaurant equipment for
the cafeteria of Southern Bell's new general headquarters
(a building in excess of 50 stories) in Atlanta, Georgia.
This contract is by far the largest contract ever entered
into by Southern. The contract, for slightly less than $1
million, called for installation of the equipment during
April, May, and June 1980, in turn, required Respondent
to complete work already scheduled in 1979 and then
fabricate the Southern Bell work during the first quarter
of 1980. Stoll testified that Respondent would not have
accepted the project if the Long Beach plant had not
been scheduled to open in January because Respondent
knew, from its exhausted capacity at Tampa, and its pre-
viously existing orders, that it could not possibly handle
all other work, as well as the Beers contract, if only
Tampa's manufacturing capacity were available. There-
fore, Respondent planned that with at least limited pro-
duction capacity available at Long Beach beginning in
January, some work could be allocated to it which, in
turn, would "free up" capacity at Tampa.
In August and September 1979, Respondent's execu-
tives, including Vice President Stoll, had several meet-
ings during which the allocation of work between the
Tampa and Long Beach plants, beginning in January
1980, was extensively discussed. Stoll testified that, de-
pending on the size of the job, some 3 to 5 months
scheduling time is needed between the decision on where
to produce and the actual beginning of production. Sub-
stantial lead time is necessary because of technical prob-
lems connected to preparing sketches and other matters
prior to beginning the actual fabrication of the equip-
ment. In discussing, in August and September, what
work to fabricate at which plant, Stoll and his managers
considered the skill of the respective work forces and lo-
cation of the installation of the equipment to be fabricat-
ed. Applying these concepts to the facts before Respond-
ent in October, the final business decision was made to
utilize the more experienced work force at Tampa and to
construct the sophisticated equipment connected with
the Southern Bell Telephone job, while allocating the
standard, relatively routine fabrication of shelving and
other basic equipment for Morrison Cafeterias to the
Long Beach facility.
So far as the record reveals, only these business factors
of work force skill and customer location were analyzed
and applied by Respondent in allocating the work con-
tracted for. Thus, in October 1979 the work for the first
MORCO INDUSTRIES, INC. 149
quarter of 1980 was scheduled for both Tampa and Long
Beach by Respondent with the anticipated result that
Tampa would continue operating at capacity, with no
layoffs considered or anticipated, while Long Beach
would begin fabrication of routine, standard work for
Morrison Cafeterias.
5. Employees and Union learn of Long Beach
plant-1979 contract negotiations-Tampa Manager
Santana foresees no layoffs
In November 1978, Respondent interviewed two
Tampa bargaining unit employees, Manuel Santana and
Bob Steyer, for the plant manager's position at Long
Beach. The position was offered to Santana that same
month.8 As previously noted, Union Steward Chastain
Havens testified, as of about June 1979, the fact of con-
struction of Long Beach was "general knowledge"
among employees at Tampa. Havens asked Santana
about it and the latter confirmed that the plant was
under construction. Testifying further, Havens stated
that he and Business Manager Salinas discussed the Long
Beach situation before the October-December 1979 con-
tract negotiations between the Union and Respondent.
In October, November, and early December 1979, the
two parties conducted a series of negotiating sessions
which ultimately resulted in a new collective-bargaining
agreement with a 2-year term extending through Decem-
ber 31, 1981. At least twice, and perhaps three times
during the negotiations, Harold Salinas, Union's business
manager and chief negotiator, asked Vice President Stoll
about the Long Beach plant. Stoll assured Salinas that
Long Beach would have "little or no effect" on the bar-
gaining unit in Tampa. According to the March 13, 1980,
prehearing affidavit of Salinas, Stoll advised Salinas
during the negotiation that Long Beach would fabricate
the more simplified production items and that this would
allow Tampa to increase its work volume.9 The Union
did not follow up with any oral or written requests for
more details.
Sometime in late 1979, Respondent moved one of its
press brakes from its Tampa plant to the Long Beach fa-
cility. Stoll testified that the press brake is used to make
shelving, and was moved from Florida to Mississippi so
that the latter facility could produce shelving. Around
the same period of time, a punch press was moved from
Tampa to Long Beach. After these machines left South-
ern less shelving was being manufactured at Tampa. Sub-
sequent to this equipment being transferred to Mississip-
pi, the Tampa employees no longer produced certain
8 Before matters progressed any further, a management change oc-
curred and Santana became manager of the Tampa plant.
I At the hearing, Business Manager Salinas testified he could not then
recall Stoll making the statement during the negotiations, but did recall
that Stoll had said it at some unrecalled time and place. Salinas authenti-
cated the affidavit. Under the circumstances, I credit Salinas' March 1980
version as an admission, or his past recollection recorded, even though
the affidavit, Resp. Exh. I, was not offered in evidence under either Fed.
R. Evid. 801(d) or 803(5). Salinas testified that he did not recall Stoll's
naming specific equipment to be manufactured at Long Beach. Union
Steward Havens testified that none was specified. With a very brief and
ambiguous reference, Stoll testified he informed Salinas "what items were
going to be kept." The "items" could have been a generalized reference
to "more sophisticated production" items, in a remark similar to that con-
tained in Salinas' prehearing affidavit.
shelving, chicken boxes, pan tops, pot sinks, lettuce bins,
salad tables, work tables, beverage tables, landing tables,
dish carts, or beverage tables, all of which comprised
about 33 percent of the work they previously had manu-
factured. These items were partially produced with
punch presses and press brakes.10 Union Steward
Havens testified, without contradiction, that Tampa
Manager Santana told him that the items were to be pro-
duced at Long Beach.
At a service pin and profit-sharing awards ceremony
in late December 1979, Tampa Manager Santana took
the opportunity to calm concern employees had been ex-
pressing about possible layoffs at Tampa because of the
new plant. According to Havens, at the awards meeting
Santana told employees that he did not feel that Long
Beach would interfere with Tampa, that while Tampa
would lose some work to Long Beach, he foresaw no
future layoffs at Tampa.
6. Southern Bell job delayed-layoffs at Tampa
In December Respondent learned, for the first time,
that its plans relating to the scheduling of work at the
two plants for the early months of 1980 were in jeop-
ardy. As Stoll explained at the hearing, the event under-
mining the allocation of work was the failure of South-
ern Bell Telephone Company to supply the necessary
sketches and drawings and the resulting delay in the be-
ginning of the fabrication of the equipment for that pro-
ject. Upon receiving final confirmation of the delay in
mid-December, Stoll was at first hopeful he could secure
other contracts for Pinellas Park which would take the
place of the Beers project. But by the middle of January,
after attempts to secure work had failed, it became obvi-
ous that a layoff for lack of work would be necessary.
Thus, in mid-January, a decision was made to lay off cer-
tain employees on January 31, and in mid-February a de-
cision was made to lay off certain employees at the end
of February.
At the hearing, the parties stipulated to the following
information regarding the seven employees, generally
classified as sheet metal mechanics, who received the re-
duction-in-force layoffs:
Name
Larry R. Davis
Constantine Kassars
Lawton M. Osborne
Mortimer Salch
Daniel P. Sinclair
Wallace Messer
John J.
Neidlinger
Hired/Laid Off
12-27-77/1-31-80
12-4-78/1-31-80
3-14-72/1-31-80
2-24-75/1-31-80
6-25-79/1-31-80
9-9-77/2-29-80
8-6-79/2-29-800
Stoll testified that the anticipated work slump oc-
curred in February, with another in March, and that the
layoffs were made for lack of work. He further testified
that Respondent's work on the Southern Bell telephone
1' Havens' percentage estimate seems a bit high, but it is clear that an
indefinite layoff of 7 employees from a bargaining unit of only about 37
(an approximate figure) represents a reduction in the work force of
almost 19 percent-a substantial number.
I Neidlinger is classified as a sheet metal apprentice.
MORCO INDUSTRIES, INC. '4
150 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
project finally began about mid to late June 1980. In fact,
he stated that Respondent has had a request with the
Union 12 for two journeyman sheet metal mechanics for
over a month, but the Union has not been able to
comply. 3
At the hearing, Stoll explained that he did not consid-
er giving the Union prior notice of the impending layoffs
because the Company had experienced layoffs in the
past. 4 Stoll credibly testified that he believed in the
truth of his remarks during the negotiations in October-
November that Long Beach would have little or no
effect on the Tampa employees. After the subsequent de-
velopments, he realized that Long Beach did have some
effect, but he never so informed the Union. Although
Stoll testified that conceivably there would have been a
layoff at Tampa even had there been no Southern Bell
project, and no Long Beach plant, such statement is not
supported in the record.'
5
7. Mooneyhan meets with Stoll after layoffs
Immediately upon the reduction in force layoff of five
unit employees on January 31, 1980, Salinas requested a
meeting with Stoll "to discuss the shop in Mississippi.""
Such a meeting was held on February 4, 1980, during
which Salinas and International Organizer A. Q. Moon-
eyhan represented the Union, while Stoll and Ed Mat-
thews represented Southern. At the meeting, which
lasted only about 4 minutes, Mooneyhan stated that he
wanted to discuss the shop in Mississippi, to which Stoll
replied that he did not want to discuss it, and referred
the union representatives to corporate attorney Philip
Hunt in Mobile, Alabama. Hunt, when contacted by
Mooneyhan, referred him back to Stoll at which time Sa-
linas set up another meeting with Stoll. This second
meeting between the Union and Respondent took place
on February 13, 1980, at which time Stoll and Bill
Temple, Morco Equipment Division general manager of
manufacturing, met with Salinas and Mooneyhan. Moon-
eyhan again requested to discuss the Mississippi oper-
ation and informed Stoll that Southern could conceiv-
ably be in violation of the contract covering the South-
ern operation. Stoll admits that during this February 13,
1980, meeting Mooneyhan asked him about the transfer
of work from Tampa to Long Beach and the consequent
layoff of unit employees at Southern. Stoll informed the
12 The Union, according to Salinas, serves as Respondent's hiring hall
at Tampa.
"s A letter dated July 7, 1980, from Santana to Salinas, and referring to
telephone requests beginning June 24, 1980. is in evidence as Resp. Exh.
2. In the letter, Santana "confirms" his earlier requests for one welder,
polishers Lawton Osborne and Connie Kassars [laid off 1-31-80] and four
journeymen, including Daniel Sinclair [laid off 1-31-80. Salinas testified
that eventually both Osborne and Kassars returned to work at Southern,
but that Sinclair has not since he had been employed and "it's not cus-
tomary usually to take a guy out of a shop that's already employed on
the referral procedure."
14 No clarifying evidence was presented.
' A significant amount of overtime was being worked at Tampa in the
last half of 1979. Thus, Stoll's speculation that the layoffs could have oc-
curred in any event is not logically supported by the evidence. Indeed
Stoll admitted that at the time of the Tampa layoffs, the simpler work
previously transferred from Tampa to Long Beach was in fact being
manufactured at the latter facility.
'6 According to Stoll, the union representatives referred to "Long
Beach" rather than to "Mississippi." The difference is immaterial.
union representatives that he did not want to discuss the
matter and again referred Mooneyhan to attorney Hunt.
Mooneyhan explained at the hearing that the purpose
of the Union's request to discuss Long Beach had the
threefold purpose to discuss: (1) the layoffs; (2) the work
transferred; and (3) possible misuse of the union label at
Long Beach. 7 He credibly denied that the purpose was
to seek recognition at Long Beach.
Stoll testified that he referred the union representatives
to corporate attorney Hunt because he believed they
wanted to discuss possible recognition of the Union at
Long Beach. This belief was based upon direct reports
he had received from employees at Long Beach that a
union organizer had shown them a copy of the Southern
contract and said he could secure the same wages for
them at Long Beach.
At times during his testimony, Stoll did not appear to
be fully candid, and I do not credit him on this key
point. Thus, while Stoll may have thought that one of
the topics Mooneyhan wanted to discuss was possible
recognition at Long Beach,'
8 I am convinced he felt
that the primary purpose of the visits was to discuss the
work transfer and employee layoffs. Indeed, as already
noted, Stoll concedes the significant point that at the
second February meeting Mooneyhan did refer to the
transfer of work and did ask about the layoffs. In short,
it appears that Respondent was playing a game in which
the union representatives were referred back and forth-
apparently simply to delay the inevitable discussion
about the layoffs and transfer of work. I therefore credit
the testimony of Mooneyhan and Salinas concerning the
purpose of the meeting and I accept Stoll's February 14,
1980, admission regarding Mooneyhan's reference to the
work transfer and layoffs.
C. Analysis and Conclusions
Respondent argues, in essence, that its decision to
transfer some of the more simple production items from
its Tampa facility to its new Long Beach plant, in order
to make room for sophisticated work required in the
huge Southern Bell project, was a decision lying "at the
core of entrepreneurial control" and was "fundamental
to the basic direction of [the] corporate enterprise," and
therefore outside the area of mandatory bargaining. Fi-
breboard Corp. v. N.L.R.B., 379 U.S. 203, 225 (1964)
(Justice Stewart concurring). It contends that it is signifi-
cant that the decision to transfer the work was related
directly to its nearly S1 million capital investment at
Long Beach and its ability to take on the largest contract
in Southern's history, the 952,053 subcontract from
Beers Construction Company for kitchen work at South-
ern Bell Telephone's new headquarters building in Atlan-
ta, Georgia. Of importance, in this line of argument, is
the fact that the situation at Tampa which presented
17 He explained that he wanted to make sure that the Union's label
was not being placed on items fabricated at Long Beach.
18 Even this is dubious since Stoll concedes he was unaware of any
organizing campaign and assumes he would have been alerted had there
been one.
MORCO INDUSTRIES, INC. 151
management with a critical problem was not the cost of
labor 9 but the finite capacity of the plant.
However, in Ozark Trailers, Incorporated and/or Hutco
Equipment Company and/or Mobilefreeze Company, Inc.,
161 NLRB 561, 566-567 (1966), the Board declared that
whether a particular management decision must be bar-
gained about does not turn upon the commitment of in-
vestment capital, or whether it involves a "major" or
"basic" change in the nature of the employer's business.
While such matters are of significance to an employer,
they also are of profound significance to the employees
who have invested years of their working lives develop-
ing the skills they use to earn their livelihood. They have
a substantial interest in protecting that livelihood, and
the duty to bargain over any such decision which ad-
versely affects that livelihood, as the Board recently ob-
served, places only a minimal burden on an employer.
Brockway Motor Trucks, Division of Mack Trucks, Inc.,
251 NLRB 29 (1980).
On the other hand, it is axiomatic that the duty to bar-
gain over a decision attaches only where the decision has
a foreseeably adverse effect upon the bargaining unit.
Westinghouse Electric Corp., Bettis Atomic Power Labora-
tory, 153 NLRB 443, 446 (1965). At the time Respond-
ent's allocation decision was finalized in October 1979,
Respondent reasonably foresaw "little or not" adverse
impact on the Tampa bargaining unit. Therefore, there
was no duty to bargain over the decision-until such
time as a reasonably prudent business person would have
recognized that there might well be an adverse impact.
In our case, that moment came in mid-December. 20
With the mid-December 1979 news that the Southern
Bell Project would be delayed, Respondent's bargaining
duty finally did attach, for it was obvious that, in the ab-
sence of Respondent locating some interim work, some
adverse consequences would affect the Tampa employ-
ees.
Respondent argues that it has a history of subcontract-
ing when production capacity reached 100 percent and,
therefore, this fact constitutes a past practice exempting
it from any duty to bargain over the transfer of the
standard Morrison cafeteria items to Long Beach. This
contention apparently is based upon the very brief state-
ment by Stoll concerning an event in June 1975 when
Southern contracted with another fabricator to build the
equipment for the one Morrison cafeteria Southern did
not equip. No further details, such as whether the Union
was notified and agreed, are given. It seems clear, more-
over, that no layoffs were involved. In any event, Re-
spondent's duty to bargain here did not arise until mid-
December. Moreover, Tampa Manager Santana's De-
"g A factor referred to by the Board in Ozark Trailers. Inc. and/or
Hutco Equipment Company and/or Mobilefreeze Company. Inc., 161 NLRB
561, 567 (1966).
20 It is undisputed that the Union did raise the subject of the new
Long Beach plant two or three times during October-November in con-
tract negotiations. Each time Stoll answered the very limited questions
Union Representative Salinas asked. That Salinas did not press for more
details, even though it would appear he had no right to do so, is not
Stoll's fault. In effect, the Union waived its claim to a right to more de-
tails regarding the decision, and its effects, as of that moment. As a corol-
lary, it may be said that Respondent waived its right to remain silent to
the extent that Stoll answered.
cember (apparently) statement to Union Steward Havens
that the lettuce bins (and other Morrison standard items)
were being sent to Long Beach for production did not
absolve Respondent of its obligation to notify the statu-
tory representative. I note that Business Manager Salinas
represented the Union at negotiations for a renewal con-
tract, signed the contract on behalf of the Union, and
was the addressee of Southern's July 7, 1980, written re-
quest for additional workers (Resp. Exh. 2). Thus, Re-
spondent is well aware of the fact it must notify the offi-
cial statutory representative involving matters of substan-
tial importance. Medo Photo Supply Corporation v.
N.L.R.B., 321 U.S. 678 (1944).
In light of the foregoing, I find that Respondent vio-
lated Section 8(a)(5) of the Act by not alerting the Union
in mid-December 1979 regarding the nature of its alloca-
tion decision and by not giving the Union the opportuni-
ty to bargain regarding that decision and, as a practical
matter, its effects.
It therefore follows that Respondent continued to
breach its bargaining obligation at the February 4 and
13, 1980, meetings by refusing to discuss the decision and
its effects (including the layoffs) and it must be ordered
to remedy these violations.
It is not illogical to say that in mid-December Re-
spondent should have given the Union notice and the op-
portunity to bargain over the decision as well as the ef-
fects. While the Union may not have had any alternative
suggestions, and may have acquiesced in the decision,
that is a matter better left to the parties for bargaining
than to speculation here. Similarly it does not come too
late to require bargaining now over the decision and its
effects even though the Tampa facility is working at full
blast. The Southern Bell project is not, so far as the
record discloses, long term in the sense of the Morrison
cafeteria projects. With full bargaining on the subject,
the parties may agree to some other solution than leaving
the Morrison standard items at Long Beach.
Although bargaining on the matter should be required,
as requested by General Counsel, an order directing Re-
spondent to return the work to Tampa, as requested by
the Charging Party at the hearing, would seem inappro-
priate. Tampa, as noted, is at full capacity with the Beers
contract (Southern Bell project) and the skills required
(and present in the Tampa work force) are more sophisti-
cated than for the Morrison standard items transferred to
Long Beach. Accordingly, I shall not recommend that
the work be retransferred.
Offers of reinstatement, with full backpay, also should
be required. The extent of the obligation owed regarding
this subject is a matter better left to the compliance
stage.
CONCLUSIONS OF LAW
I. Respondent is an employer engaged in commerce
within the meaning of Section 2(6) and (7) of the Act.
2. The Union is a labor organization within the mean-
ing of Section 2(5) of the Act.
3. All production and maintenance employees em-
ployed by the Respondent at its 5010 South Lois
Avenue, Tampa, Florida, facility constitute a unit appro-
MORCO INDUSTRIES, [NC 'SI
152 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
priate for the purposes of collective bargaining within
the meaning of Section 9(b) of the Act.
4. At all times material herein, the Union has been the
exclusive collective-bargaining representative of all the
employees in the unit described above in Conclusion of
Law 3, and Respondent is now, and has been at all times
material herein, legally obligated to recognize and collec-
tively bargain with the Union as such representative.
5. Since mid-December 1979, Respondent has violated
Section 8(a)(5) and (I) of the Act by failing to give
notice to the Union over Respondent's decision to trans-
fer certain of its work from its Tampa, Florida, facility
to its Long Beach, Mississippi, plant, by unilaterally
transferring such work, and the opportunity for the
Union to bargain over such decision and the effects
thereof.
6. The above unfair labor practices affect commerce
within the meaning of Section 2(6) and (7) of the Act.
THE REMEDY
Having found that Respondent has engaged in the
unfair labor practices set forth above, I shall recommend
that it be ordered to cease and desist therefrom, to take
certain affirmative action designed to effectuate the poli-
cies of the Act and to post signed and dated copies of an
appropriate notice to employees.
As Respondent, by unlawfully refusing after mid-De-
cember 1979 to bargain with the Union concerning the
decision to transfer work and the effects thereof, and laid
off seven employees as a partial consequence of its deci-
sion to transfer, I shall recommend that Respondent be
ordered to make each employee whole for any loss of
earnings or benefits he may have suffered as a result of
his layoff. Backpay shall be computed in the manner es-
tablished by the Board in F. W. Woolworth Company, 90
NLRB 289 (1950), with interest computed in the manner
prescribed in Florida Steel Corporation, 231 NLRB 651
(1977). 2 1
In view of the fact that by June 1980 Respondent's
Tampa facility was enjoying full employment as a result
of the work on the Southern Bell Telephone Company
project, and that Respondent is operating its Tampa
plant at maximum physical capacity, I shall not recom-
mend that Respondent be ordered to restore the status
quo ante by retransferring the work from the Long
Beach facility to the Tampa plant.
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:
ORDER2 2
The Respondent, Marco Industries, Inc.; and All
Southern Fabricators, a Division of Morco Industries,
Inc., its officers, agents, successors, and assigns, shall:
I. Cease and desist from:
21 See, generally, Isis Plumbing & Heating Co., 138 NLRB 716 (1962).
22 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.
(a) Refusing to bargain with the Union as to the deci-
sion to transfer unit work, and unilaterally transferring
unit work without bargaining with the Union over such
decision, and the effects thereof.
(b) In any like or related manner failing or refusing to
bargain collectively with the Union.
2. Take the following affirmative action designed to ef-
fectuate the policies of the Act:
(a) Upon request by the Union, bargain collectively
with the Union with respect to the decision to transfer
certain production work from its Tampa, Florida, plant
to its Long Beach, Mississippi, facility, and the effects of
such decision.
(b) Offer to the seven employees laid off on January
31, 1980, and February 29, 1980, to the extent such offers
have not been made, immediate and full reinstatement to
their former jobs or, if those jobs no longer exist, to sub-
stantially equivalent positions of employment, without
prejudice to their seniority or other rights and privileges
previously enjoyed, and make them whole for any loss of
pay suffered by them in the manner set forth in the sec-
tion above entitled "The Remedy."
(c) Preserve and, upon request, make available to the
Board or its agents, for examination and copying, all
payroll records, social security payment records, time-
cards, personnel records and reports, and all other re-
cords necessary to analyze the amount of backpay due
under the terms of this Order.
(d) Post at its Tampa (Pinellas Park), Florida, facility
and at its Long Beach, Mississippi, plant copies of the at-
tached notice marked "Appendix." 23 Copies of the
notice, on forms provided by the Regional Director for
Region 12, after being duly signed by a representative of
Respondent, shall be posted by Respondent immediately
upon receipt thereof, and shall be maintained by it for 60
consecutive days thereafter, in conspicuous places, in-
cluding all places where notices to employees are cus-
tomarily posted. Reasonable steps shall be taken to
ensure that such notices are not altered, defaced, or cov-
ered by any other material.
(e) Notify the Regional Director for Region 12, in
writing, within 20 days from the date of this Order, what
steps Respondent has taken to comply therewith.
23 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 Pursu-
ant 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
After a hearing at which all sides had an opportunity to
present evidence and state their positions, the National
Labor Relations Board found that we have violated the
National Labor Relations Act, as amended, and has or-
dered us to post this notice.
153MORCO INDUSTRIES, INC.
WE WILL NOT refuse to bargain with Sheet Metal
Workers International Association, Local Union
No. 57, affiliated with Sheet Metal Workers Inter-
national Association, AFL-CIO, as to the decision
to transfer unit work, or unilaterally transfer unit
work, without bargaining with such Union, or any
other labor organization which is your exclusive
bargaining representative, over the decision to
transfer and its effects upon you.
WE WILL NOT in any like or related manner fail
or refuse to bargain collectively with Sheet Metal
Workers International Association, Local Union
No. 57, affiliated with Sheet Metal Workers Inter-
national Association, AFL-CIO, or any other labor
organization which is your exclusive collective-bar-
gaining representative.
WE WILL, upon request by the Union, bargain
collectively with it with respect to the decision to
transfer certain unit work from our Tampa, Florida,
facility to our Long Beach, Mississippi, plant.
WE WILL offer to the seven employees named
below, to the extent offers have not already been
made, immediate and full reinstatement to their
former jobs or, if those jobs no longer exist, to sub-
stantially equivalent positions of employment, with-
out prejudice to their seniority or other rights and
privileges previously enjoyed, and, in the manner
prescribed by law, make them whole for loss of pay
suffered by them as a result of our laying them off
in January-February 1980, plus interest.
Larry R. Davis
Constantine Kassars
Lawton M. Osborne
Mortimer Salch
Daniel P. Sinclair
Wallace Messer
John J. Neidlinger
MORCO INDUSTRIES, INC.; AND ALL
SOUTHERN FABRICATORS, A DIVISION OF
MORCO INDUSTRIES, INC.