Morco Industries, Inc.

National Labor Relations Board - Board Decisions

Apr 30, 1986

279 N.L.R.B. 762 (N.L.R.B. 1986)

762 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Morco Industries , Inc. and All Southern Fabricators,
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
30 April 1986
SUPPLEMENTAL DECISION AND
ORDER
BY CHAIRMAN DOTSON AND MEMBERS
DENNIS AND JOHANSEN
On 20 March 1981 a panel of the National Labor
Relations Board issued its Decision and Order in
this proceeding.' The Board held, in agreement
with the decision of Administrative Law Judge
Richard J. Linton, that the Respondent had violat-
ed Section 8(a)(5) and (1) of the Act by transfer-
ring work from its Pinellas Park, Florida plant to
its Long Beach, Mississippi plant without bargain-
ing with the Union about the transfer. Thereafter,
the Board filed an application with the United
States Court of Appeals for the Fifth Circuit to en-
force the Board's Order.
While the case was pending before the court, the
Board, sua sponte , requested that the court remand
the case for further consideration. On 24 October
1981 the court granted the request. The Board's re-
quest for remand was prompted by the United
States Supreme Court decision in First National
Maintenance Corp. v. NLRB.2 Since First National
Maintenance the Board has decided Otis Elevator,
269 NLRB 891 (1984), interpreting the Court's de-
cision.
The Board has considered the entire record in
the case and the judge's decision in light of the ex-
ceptions, briefs, and position papers; the Supreme
Court's decision in First National Maintenance; and
our decision in Otis Elevator. We conclude that the
Respondent's decision to transfer work had as its
focus a change in the nature and scope of a signifi-
cant facet of the business and was therefore not a
mandatory subject of bargaining.
The Respondent fabricates stainless steel cafete-
ria equipment at a plant in Pinellas Park, Florida.
As a result of a large increase in business and an
absence of room for expansion at the facility, the
Respondent decided in late 1978 to open a plant in
Long Beach, Mississippi. This plant was to start
production in January 1980. The Respondent,
during contract negotiations in the fall of 1979, as-
sured the Union representing the Pinellas Park em-
1 255 NLRB 146 (1981)
2 452 US 666 (1981)
ployees that the new Long Beach plant would
have no impact on the existing Pinellas Park unit.
In July 1979, after construction of the Long
Beach unit had begun, the Respondent signed a
contract to construct the equipment for the cafete-
ria of Southern Bell's new headquarters in Atlanta.
The Respondent decided in October 1979 to use
the more skilled Pinellas Park work force to make
the relatively sophisticated equipment for the
Southern Bell cafeteria and to transfer the standard
work then being done at Pinellas Park to the Long
Beach facility.
In mid-December 1979, before any production
was underway at Long Beach and before all of the
equipment necessary for the production of the
standard items had been transferred from Pinellas
Park to Long Beach, the Respondent learned that
there would be a delay in the work on the South-
ern Bell equipment . The Respondent continued to
transfer work from Pinellas Park to Long Beach.
With the Southern Bell work late in arriving, the
Respondent decided in mid-January to lay off some
employees at Pinellas Park, and on 31 January 1980
five employees were laid off. The Respondent laid
off two more on 29 February 1980.
After the first layoffs, the Union requested bar-
gaining about them and the work transfer. The Re-
spondent's vice president of the equipment division
referred the Union to its corporate attorney. The
attorney referred the Union back to the vice presi-
dent, who refused to discuss the matter and re-
ferred the Union back to the attorney.
In Otis Elevator we held that it is the nature of a
managerial decision itself, not the impact of that
decision, which determines whether a duty to bar-
gain over that decision attaches. Where a decision
turns on a change in the scope, nature , or direction
of a significant facet of the enterprise, the Act does
not impose an obligation to bargain. This is true
whether or not the decision is prudent and whether
or not it materializes as planned.
Applying Otis Elevator to the instant case, we
find that the decision to transfer work turned en-
tirely on the need to expand the Respondent's
metal fabrication facilities, and that this expansion
involved a change in the nature and scope of this
facet of the enterprise. In reaching this decision,
we note that the physical plant in Florida had
reached its absolute limits for expansion, and that
the Respondent had already lost orders because of
the lack of fabrication facilities. In addition, the
new facility involved a capital investment of
$950,000 and provided a better location to service
the expanding market in the mid-South. Indeed, it
was the increased capacity of the Long Beach fa-
cility that made it possible for the Respondent to
279 NLRB No. 100
MORCO INDUSTRIES 763
enter into the Southern Bell contract. Finally, we
note that the Respondent has not sought to under-
mine the status of the Union or escape the labor
costs embodied in the contract. To the contrary,
the Respondent's motive was to keep the more so-
phisticated work in the unionized Pinellas Park
plant.
Accordingly, we conclude that the Respondent
did not violate Section 8(a)(5) and (1) of the Act
when it failed to notify or bargain with the Union
about its decision to transfer work to the Long
Beach plant.3
However, for the reasons stated by the judge, we
find that the Respondent violated Section 8(a)(5) of
the Act when, in February 1980, the Respondent's
vice president Roger Stoll refused to discuss the
layoffs with the Union and referred it back and
forth between Stoll and the Repsondent's corporate
attorney. We shall therefore order the Respondent,
on request, to bargain with the Union about the ef-
fects of its decision to transfer work out of the bar-
gaining unit, including the layoffs.
THE REMEDY
Having found that the Respondent unlawfully re-
fused to bargain with the Union about the effects
of its decision to transfer work out of the bargain-
ing unit, we shall accompany our order to bargain
with a limited backpay requirement designed both
to make whole the employees for losses suffered as
a result of the violation and to recreate in some
practicable manner a situation in which the parties'
bargaining position is not entirely devoid of eco-
nomic consequences for the Respondent . We shall
do so in this case by requiring the Respondent to
pay backpay to its employees in a manner analo-
gous to that required in Transmarine Corp., 170
NLRB 389 (1968), and Interstate Tool Co., 177
NLRB 686 (1969). Thus, the Respondent shall pay
employees backpay at the rate of their normal
wages when last in the Respondent's employ, from
5 days after Board 's decision until the earliest of
the following conditions : ( 1) the date the Respond-
ent bargains to agreement with the Union on those
subjects pertaining to the effects on it employees of
the decision to transfer work out of the bargaining
unit ; (2) a bona fide impasse in bargaining; (3) the
failure of the Union to request bargaining within 5
days of this decision , or to commence negotiations
within 5 days of the Respondent's notice of its
desire to bargain with the Union ; or (4) the subse-
quent failure of the Union to bargain in good faith;
but in no event shall the sum paid to any of these
employees exceed the amount he would have
earned as wages from the date on which he was
laid off to the time he was recalled or secured
equivalent employment elsewhere, or the date on
which the Respondent shall have offered to bar-
gain, whichever occurs sooner; provided, however,
that in no event shall this sum be less than these
employees would have earned for a 2-week period
at the rate of their normal wages when last in the
Respondent's employ.
ORDER
The Respondent, Morco Industries, Inc. and All
Southern Fabricators, a Division of Morco Indus-
tries, Inc., Tampa, Florida, its officers, agents, suc-
cessors, and assigns, shall
1. Cease and desist from
(a) Refusing to bargain with Sheet Metal Work-
ers International Association, Local Union No. 57,
affiliated with Sheet Metal Workers International
Association, AFL-CIO, with respect to the effects
on its employees of its decision to transfer work
from its Pinellas Park, Florida plant to its Long
Beach, Mississippi plant.
(b) In any like or related manner failing or refus-
ing to bargain collectively with the Union.
2. Take the following affirmative action neces-
sary to effectuate the policies of the Act.
(a) Make the employees who were laid off as a
result of the transfer of work from the Respond-
ent's Pinellas Park, Florida facility whole in the
manner set forth in the section of this decision enti-
tled "The Remedy" for any loss of earnings they
may have suffered by reason of their layoffs.
(b) On request, bargain with the Union with re-
spect to the effects on unit employees of the Re-
spondent's decision to transfer work from its Pinel-
las Park, Florida plant to its Long Beach, Missis-
sippi plant.
(c) Post at its Pinellas Park, Florida facility
copies of the attached notice marked "Appendix."4
Copies of the notice, on forms provided by the Re-
gional Director for Region 12, after being signed
by the Respondent's authorized representative,
shall be posted by the Respondent immediately
upon receipt and maintained for 60 consecutive
days in conspicuous places including all places
where notices to employees are customarily posted.
Reasonable steps shall be taken by the Respondent
' Member Dennis agrees based on the analysis set forth in her separate
opinion in Otis The focus of the decision-expansion of fabrication facili-
ties-was wholly outside the Union's control The Union was in no "po-
sition to lend assistance or offer concessions that reasonably could
affect the employer's decision " Otis Elevator, 269 NLRB at 897
* If 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 Nation-
al 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 "
764 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
to ensure that the notices are not altered , defaced,
or covered by any other material.
(d) Notify the Regional Director in writing
within 20 days from the date of this Order what
steps the Respondent has taken to comply.
APPENDIX
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
The National Labor Relations Board has found
that we violated the National Labor Relations Act
and has ordered us to post and abide by this notice.
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 NOT refuse to bargain with Sheet
Metal Workers International Association, Local
Union No . 57, affiliated with Sheet Metal Workers
International Association , AFL-CIO , or any other
labor organization which is your exclusive bargain-
ing representative, over the effects of our decision
to transfer bargaining unit work.
WE WILL, on request by the Union, bargain col-
lectively with it with respect to the effects of our
decision to transfer certain unit work from our Pin-
ellas Park , Florida facility to our Long Beach, Mis-
sissippi plant.
MORCO INDUSTRIES , INC. AND ALL
SOUTHERN FABRICATORS , A DIVISION
OF MORCO INDUSTRIES, INC.
Local Union No. 57 , affiliated with Sheet Metal Workers
International Association, AFL-CIO (the Union) and
subsequently amended , against Morco Industries, Inc.,
d/b/a All Southern Fabricators. I
In his complaint , as amended, the General Counsel al-
leges that Respondent is a single , integrated business en-
terpnse and that it has violated Section 8(aX5) 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), bargaining unit . On the other hand , the Long
Beach , Mississippi (Morco Stainless or Long Beach) fa-
cility is new and the employees unrepresented.
On the entire record, including my observation of the
demeanor of the witnesses, and after due consideration of
the briefs filed by the General Counsel and Respondent
(the Charging Party filed none ), I make the following
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 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.
II. 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.
Steven L. Sommers, Esq., for the General Counsel.
William F Banta, Esq., and Ellis B. Murow (Kullman,
Lang, Inman & Bee, P. C), of New Orleans, Loui-
sianna , and Pfilip G. Hunt, Esq., of Mobile , Alabama,
for the Respondent.
Richard H. Frank, Esq., and Mark F Kelly, Esq. (Frank,
Chamblee & Kelly, P.A.), of Tampa , Florida , for the
Charging Party.
DECISION
STATEMENT OF THE CASE
RICHARD J. LINTON , Administrative Law Judge. This
case was tried 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. The complaint is based on a charge filed March 5,
1980, by Sheet Metal Workers International Association,
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 the Respondent and, in paragraph 2(c) of
the complaint , they were alleged to be a single integrated
enterprise. In its answer , Respondent termed this allega-
tion as irrelevant . Early in the hearing , the General
Counsel was permitted to amend the complaint so that
Respondent was described as: Morco Industries, Inc.;
and All Southern Fabricators , a Division of Morco In-
dustries , Inc. At the hearing , and in its brief, Respondent
' 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
MORCO INDUSTRIES
has described itself as "All Southern Fabricators, a Divi-
sion 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 on the testimony
of Roger Stoll, vice president of the equipment division
of Morco Industries, Inc., the corporate structure is as
follows.
Morrison, Incorporated2
(Umbrella owner)
Morco Industries, Inc.
Equipment Division
All Southern Morco Stainless Steel
Fabricators Fabricators
(Tampa, Florida) (Long Beach, Mississippi)
(And seven 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. Hollingworth, the record does not estab-
lish 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 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 Morrison, incorporated,
so that the production of restaurant equipment will be
coordinated with the scheduled construction completion
of Morrison's new cafeterias. Southern and Long Beach
are the only two plants producing metal equipment for
cafeterias in the equipment division. Southern has been in
operation since 1969. Although 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 operations.
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 oper-
ation 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(b)(4)(B) context),
"The Hearst cases hold, of course, that corporate identity
does not in itself preclude neutrality among the parts of
2 Also owns Morrison Cafeterias
765
the corporation." Teamsters Local 560 (Curtin Matheson),
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 em-
ployer concept would be more obvious. It is clear that
Southern and Long Beach are far from being autono-
mous, and, in fact, are closely integrated within Morco's
equipment division. Moreover, the key factor, 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 unincorpo-
rated 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 entities3 are a single employer. I so find 4 Los Angeles
Marine Hardware Co., 235 NLRB 720, 721, 731-732
(1978), enfd. 602 F.2d 1302 (9th Cit. 1979).
C. 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 relationship 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
government.
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 I11 of the 112
Morrison cafeterias constructed during that period of
time. While initially Respondent had orders for 5 or 6
Morrison cafeterias every year, the annual orders now
average about 15 to 16.5 Further, the "outside" portion
8 Morco Industries , Inc, the Equipment Division, Tampa, and Long
Beach
* Respondent does not address the matter in its brief and styles the
caption as "All Southern Fabricators, A Division of Morco Industries,
Inc "
5 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
766 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
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, 1980.6 This exceptional increase of 2300 percent
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. Desparate 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 reasons
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-
6 The number of Respondent 's full-time sales persons has grown from
one in 1977 to six at the time of the hearing, an indication of the heavy
"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 ( 1) the very attractive
bond offer from the State of Mississippi, and (2) the fact that other sheet
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
construction. Checking with Tampa Plant Manager
Manuel Santana Jr., Havens learned that indeed the new
plant was under construction. More will be said later 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 stones) in Atlanta, Georgia.
This contract is by far the largest contract ever entered
into by Southern. The contract, for slightly less than
$1,000,000, called for installation of the equipment during
April, May, and June 1980, and in turn, required Re-
spondent 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 previously existing orders, that it could not possi-
ble handle all other work, as well as the Beers contract,
if only Tampa's manufacturing capacity were available.
Therefore, Respondent planned that with at least limited
production 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 pre-parking sketches and other mat-
ters prior to beginning the actual fabrication of the
equipment. 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
metal companies in the Mississippi Gulf Coast area provide at least some
experienced sheet metal workers
MORCO INDUSTRIES
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
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 the Union learn of Long Beach
plant-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." As previously noted, Union Steward Chastain
Havens testified as of June 1979 the fact of construction
of Long Beach was "general knowledge" among em-
ployees at Tampa. Havens asked Santana about it and
the latter confirmed that the plant was under construc-
tion. Testifying further, Havens stated that he and Busi-
ness Manager Salinas discussed the Long Beach situation
before the October-December 1979 contract 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
pretrail 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
8 Before matters progressed any further, a management change oc-
curred and Santana became manager of the Tampa plant
8 At the trial , 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 (R Exh 1) was not offered in evidence under either FRE
801(d) or 803(5) Salinas testified that he did not recall Stoll's naming spe-
cific equipment to be manufactured at Long Beach Union Steward
Havens testified that none was specified With a very brief and ambigu-
ous reference , Stoll testified he informed Salinas "what items were going
to be kept " (Tr 208) The "items" could have been a generalized refer-
ence to "more sophisticated production" items, in a remark similar to that
contained in Salinas ' pretrial affidavit
767
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.
Subsequent to this equipment being transferred to Missis-
sippi, the Tampa employees no longer produced certain
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. i ° 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 (Tr. 126, 156).
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 trial, the event undermining
the allocation of work was the failure of Southern Bell
Telephone Company to supply the necessary sketches
and drawings and the resulting delay in the beginning of
the fabrication of the equipment for that project. On re-
ceiving 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 at-
tempts to secure work had failed, it became obvious that
a layoff for lack of work would be necessary. Thus, in
mid-January, a decision was made to lay off certain em-
ployees on January 31, and in mid-February a decision
was made to layoff certain employees at the end of Feb-
ruary.
At the trial, the parties stipulated to the following in-
formation regarding the seven employees , generally clas-
sified as sheet metal mechanics , who received the reduc-
tion-in-force layoffs:
1s 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
768
Name
Larry R. Davis
Constantine Kassars
Lawton M Osborne
Mortimer Salch
Daniel P Sinclair
Wallace Messer
John J Neidlingerii
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
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 2-29-80
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
project finally began about mid- to late-June 1980. In
fact, he stated that Respondent has had a request with
the Union t 2 for two journeymen sheet metal mechanics
for over a month, but the Union has not been able to
Comply. 1 3
At the trial, Stoll explained that he did not consider
giving the Union prior notice of the impending layoffs
because the Company had experienced layoffs in the
past. 14 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.' s
7. Mooneyhan meets with Stoll after layoffs
Immediately on 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."18
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
11 Neidlinger is classified as a sheet metal apprentice
is The Union, according to Salinas , serves as Respondent 's hiring hall
at Tampa (Tr 108)
13 A letter dated July 7, 1980, from Santana to Salinas , and referring to
telephone requests beginning June 24, 1980, is in evidence as R Exh 2
In the letter, Santana "confirms" his earlier requests for one welder, pol-
ishers Lawton Osborne and Connie Kassars (laid off January 30, 1980)
and four journeymen, including Daniel Sinclair (laid off January 31,
1980) Salinas testified that eventually both Osborne and Kassars returned
to work at Southern , but that Sinclair has not since he had been em-
ployed and "it's not customary usually to take a guy out of a shop that's
already employed on the referral procedure " (Tr I I 1 )
14 No clarifying evidence was presented
15 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 (Tr 291)
is According to Stoll , the union representatives referred to "Long
Beach" rather than to "Mississippi " The difference is immaterial
the union representatives to Corporate Attorney Pfilip
Hunt in Mobile, Alabama. Hunt, when contacted by
Mooneyhan, referred him back to Stoll, at which time
Salinas 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 (Tr. 206). Stoll in-
formed the union representatives that he did not want to
discuss the matter and again referred Mooneyhan to At-
torney Hunt.
Mooneyhan explained at trial that the purpose of the
Union's request to discuss Long Beach had the threefold
purpose to discuss: (1) the layoffs; (2) the work trans-
ferred; and (3) possible misuse of the union label at Long
Beach. 17 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 on 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, i s 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.
D. 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
it 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 (Tr 202)
MORCO INDUSTRIES
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-
berboard Corp. V. NLRB, 379 U.S. 203, 225 (1964) (Jus-
tice Stewart concurring). It contends that it is significant
that the decision to transfer the work was related direct-
ly to its nearly $1 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 Southern
Bell Telephone's new headquarters building in Atlanta,
Georgia. Of importance, in this line of argument, is the
fact that the situation at Tampa which presented man-
agement with a critical problem was not the cost of
labor i 9 but the finite capacity of the plant.
However, in Ozark Trailers, 161 NLRB at 566-567, the
Board declared that whether a particular management
decision must be bargained about does not turn on the
commitment of investment capital, or whether it involves
a "major" or "basic" change in the nature of the employ-
er's business. While such matters are of significance to an
employer, they also are of so profound significance to the
employees who have invested years of their working
lives developing the skills they use to earn their liveli-
hood They have a substantial interest in protecting that
livelihood, and the duty to bargain over such any deci-
sion which adversely affects that livelihood, as the Board
recently observed, places only a minimal burden on an
employer. Brockway Motor Trucks, 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., 153 NLRB 443, 446 (1965).
At the time Respondent's allocation decision was final-
ized in October 1979, Respondent reasonably foresaw
"little or no" adverse impact on the Tampa bargaining
unit. Therefore, there was no duty to bargain over the
decision-until such time as a reasonably prudent busi-
ness 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, Re-
spondent's bargaining duty finally did attach, for it was
obvious that, in the absence of Respondent locating some
interim work, some adverse consequences would affect
the Tampa employees
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
10 A factor referred to by the Board in Ozark Trailers, 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
769
contention apparently is based on 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 (Tr. 228). No further details, such as whether
the Union was notified and agreed, are given. It seems
clear, moreover, that no layoffs were involved. In any
event, Respondent's duty to bargain here did not arise
until mid-December. Moreover, Tampa Manager San-
tana 's December (apparently) statement to Union Stew-
ard Havens that the lettuce bins (and other Morrison
standard items) were being sent to Long Beach for pro-
duction did not absolve Respondent of its obligation to
notify the statutory representative. I note that Business
Manager Salinas represented the Union at negotiations
for a renewal contract, signed the contract on behalf of
the Union, and was the addressee of Southern's July 7,
1980 written request for additional workers (R. Exh. 2).
Thus, Respondent is well aware of the fact it must notify
the official statutory representative involving matters of
substantial importance. Medo Photo Supply Corp. v.
NLRB, 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 alterna-
tive suggestions , and may have acquiesced in the deci-
sion, that is a matter better left to the parties for bargain-
ing 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 the General Counsel, an order directing
Respondent to return the work to Tampa, as requested
by the Charging Party at the trial , 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.
770 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
CONCLUSIONS OF LAW
1. 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-
priate for the purposes of collective bargaining within
the meaning of Section 9(b) of the Act.
4. At all times material, the Union has been the exclu-
sive collective-bargaining representative of all the em-
ployees in the unit described above in Conclusion of
Law 3, and Respondent is now, and has been at all times
material, legally obligated to recognize and collectively
bargain with the Union as such representative.
5. Since mid-December 1979, Respondent has violated
Section 8(a)(5) and (1) 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 trans-
ferring 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 Co., 90
NLRB 289 (1950), with interest computed in the manner
prescribed in Florida Steel Corp., 231 NLRB 651
(1977).21
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 be ordered to restore the
status quo ante by retransferring the work from the
Long Beach facility to the Tampa plant.
[Recommended Order omitted from publication.]
21 See generally Isis Plumbing Co, 138 NLRB 716 (1962)