National Wood Products Co.

National Labor Relations Board - Board Decisions

Jun 30, 1969

177 N.L.R.B. 812 (N.L.R.B. 1969)

812 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Pittsburgh Reflector Company d/b/a National Wood
Products Company and National Store Fixture and
Equipment Company and United Brotherhood of
Carpenters and Joiners of America , Millmen's
Local Union 1160 , AFL-CIO. Case 6-CA-4127
June 30, 1969
DECISION AND ORDER
BY CHAIRMAN MCCULLOCH AND MEMBERS
JENKINS AND ZAGORIA
On January 9, 1969, Trial Examiner Frederick U.
Reel issued his Decision in the above-entitled
proceeding, finding that the Respondent had
engaged in and was engaging in certain unfair labor
practices within the meaning of the National Labor
Relations Act, as amended , and recommending that
it cease and desist therefrom and take certain
affirmative action, as set forth in the attached Trial
Examiner's Decision. Thereafter, the Respondent
filed exceptions to the Trial Examiner's Decision
and a supporting brief. The General Counsel filed
cross-exceptions limited to the Trial Examiner's
failure to issue a cease-and -desist order , and a brief
in support of this exception.
Pursuant to the provisions of Section 3(b) of the
Act, the National Labor Relations Board has
delegated its powers in connection with this case to
a three-member panel.
The Board has reviewed the rulings of the Trial
Examiner made at the hearing and finds that no
prejudicial error was committed. The rulings are
hereby affirmed. The Board has considered the Trial
Examiner's Decision, the exceptions and the briefs,
and the entire record in the case, and hereby adopts
the findings, conclusions , and recommendations of
the Trial Examiner except to the extent inconsistent
herewith.
In October 1967, the Respondent purchased the
plant of the National Store Fixture and Equipment
Co. and the National Wood Products Co., both of
which were losing money and had defaulted on a
bank loan. For 2 months the Respondent continued
operations, completing only work in progress; it
claims that high labor costs, which the Unions
refused to lower, prevented it from bidding
successfully for new orders. During this period, the
Respondent formally refused to assume some of the
terms of its predecessors' contracts with the Unions
but agreed to pay the existing wage rates and fringe
benefits for the temporary work. Between October
11 and November 29, at various meetings described
in the Trial Examiner's Decision, the Respondent's
representative attempted to negotiate for a lower
wage rate and warned the Unions that it might have
to close the plant if it could not cut labor costs.
According to testimony credited by the Trial
Examiner, on more than one occasion the Unions'
representative replied that he did not care if the
plant closed down as he had plenty of work for his
men. In November, the Respondent was informed
that it would no longer secure a month-to-month
lease on the plant but would have to sign for a
longer term. In early December, having been
unsuccessful in its attempts to lower labor costs and
to secure new orders, the Respondent permanently
closed the operation.
The Trial Examiner dismissed allegations that the
Respondent had failed to notify the Unions that it
was contemplating closing the plant on the ground
that it had duly warned the Unions in the meetings;
but he found that the Respondent had violated
Section 8(a)(5) of the Act by unilaterally changing
certain "terms and conditions of employment."
Specifically, the Trial Examiner found that the
Respondent had violated the Act by failing to make
the following payments in the 2-month period prior
to the closing: 1 week's contribution to the health
and welfare funds; personal holiday and vacation
pay for certain employees; vacation payments
accrued at termination; certain benefits accrued
under the Respondent ' s predecessor ; some elements
of severance pay and a raise of 10 cents per hour
due December 1 by the terms of a predecessor's
contract with Local 1160.'
We find merit in the Respondent's exceptions.
The Trial Examiner cites, as one ground for his
holding , Hackney Iron & Steel Co., 167 NLRB No.
84, presently before us for decision on remand from
the United States Court of Appeals, District of
Columbia Circuit (395 F.2d 639). Even were we to
view the instant case in the light most favorable to
the General Counsel, i.e., that Hackney will be
decided in such a way as to bind a successor to its
predecessor ' s collective-bargaining contracts, we
would nonetheless be constrained to dismiss the
unfair labor practice allegation in question. The
10-cent wage increase would have been effective for
only about 1 week before Respondent ceased
operations. The remaining alleged violations are at
most minimal and isolated breaches of contract, not
of a continuing nature and not sufficient to
constitute a unilateral modification of the contract
within the meaning of Section 8(d) of the Act. In
the peculiar circumstances of this case, including the
brevity of operation ( 2 months ), the Respondent's
severe financial difficulties and the fact that it
generally fulfilled its bargaining obligation, we do
not believe that it would effectuate the policies of
the Act to find a refusal to bargain or to issue a
remedial order.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor
'There was no proof or finding as to the specifics of these matters, but
only a general finding by the Trial Examiner that some payments were not
made. The plant was closed I week after the pay raise of 10 cents per hour
was due to go into effect
177 NLRB No. 57
PITTSBURGH REFLECTOR COMPANY
Relations Board hereby orders that the complaint
be, and it hereby is, dismissed.
TRIAL EXAMINER ' S DECISION
STATEMENT OF THE CASE
FREDERICK U. REEL, Trial Examiner : This proceeding,
heard at Pittsburgh , Pennsylvania , on November 26, 1968,
pursuant to a charge filed December 26, 1967, and a
complaint issued October 16, 1968, presents questions as
to whether Respondent , herein called the Company,
violated Section 8 (a)(5) and ( 1) of the Act (a) by refusing
to honor contracts which the Charging Party and another
labor organization had executed with a prior operator of
the business, (b) by changing terms and conditions of
employment without notice to or bargaining with the
representatives of the employees , and (c) by refusing to
bargain over the termination of operations and over the
impact of such termination on employees . Upon the entire
record , including my observation of the witnesses, and
after due consideration of the briefs filed by General
Counsel and by Respondent , I make the following:
FINDINGS OF FACT
1. THE BUSINESS OF THE RESPONDENT AND THE LABOR
ORGANIZATION INVOLVED
The Company, a New Jersey corporation engaged in
the metal fabrication of various products at plants in
Pennsylvania , annually purchases goods and materials
from outside the State for use at those plants, and is
admittedly engaged in commerce within the meaning of
the Act. The alleged unfair labor practices in this case
relate, however , not to those plants but to an operation
which the Company conducted for approximately 2
months late in 1967 in a separate location , which it has
since abandoned , in Pittsburgh . Some of the employees at
this location were represented by the Charging Party,
herein called Local 1160, and some of them were
represented by the Carpenters District Council of Western
Pennsylvania , herein called the District Council. Both
Local 1160 and the District Council are labor
organizations within the meaning of Section 2(5) of the
Act.
11. THE ALLEGED UNFAIR LABOR PRACTICES
A. Background
For a number of years prior to the events in this case a
concern known as National Store Fixture and Equipment
Company was engaged in the production of store fixtures
at a shop on Preble Avenue in Pittsburgh . This company,
together with a number of other employers known as the
Wood Manufacturers Council, Inc. and Associate
Members, entered into a contract with Local 1160
covering the carpenters employed at the various
establishments . Because some of the work at the Preble
Avenue establishment did not require the full skill of a
journeyman carpenter or cabinetmaker, a separate
company was created known as National Wood Products
Company to manufacture laminated doors and gas station
equipment . This new company entered into a contract
with the District Council covering these less-skilled
employees at different wage rates and with other terms
different from those set forth in the contract with Local
813
1160 covering the National Store Fixture employees. Both
companies , National Wood and National Store Fixture,
continued to operate under a common ownership at Preble
Avenue until the events described below . In the fall of
1967, when National Wood and National Store Fixture
ran into financial difficulties , their respective contracts
with the District Council and with Local 1160 ran until
May 31, 1968, and April 30, 1970, respectively.
B. The Company Takes Over the Business at the
Preble Avenue Plant
In the late summer of 1967, National Wood Products
and National Store Fixture and Equipment Company
defaulted on a loan they had obtained from the Union
National Bank of Pittsburgh. The bank, on October 2,'
exercised its lien on the assets of National Wood and
National Store Fixture. On that same day the bank
entered into an agreement with the Company to transfer
to the latter "all of the right, title, and interest" of the
bank in the property in question. This transfer was
formally executed on October 6, effective October 9. It
included, inter alia:
All claims now in existence for monies due and to
become due under any contracts ... now existing,
together with the proceeds from any and all such
contract rights.
All accounts receivable... .
All inventory... .
All of the equipment... .
According to the testimony of Company President
Oswald and Plant Manager Klepacz, the employees were
notified over the weekend of October 7 and 8 that they
were not to report for work on Monday, October 9, and
they did not return to work until October 16. General
Counsel adduced some testimony placing the date of the
temporary shutdown as I week later, after the Company
had formally taken over the business. Another conflict in
testimony concerns a notice which company witnesses
testified was posted on the plant bulletin board on
October 13 and remained there until the plant finally
closed on December 8. The three employees called as
witnesses by the General Counsel testified that they had
never seen the notice although they had occasion to look
at the bulletin board. The notice introduced into evidence
bore the date of October 13, was addressed to "Pittsburgh
Reflector Company All Temporary Employees," and was
signed by Company President Oswald. The text was as
follows:
Your former Employer, the Union National Bank,
has sold all of the assets including machinery, inventory
and work in progress at this plant, to Pittsburgh
Reflector Company. There is no connection between
our Company and National Store Fixture Company or
National Wood Company.
After studying the situation and discussing it with
your union leaders, it was decided to complete some of
the work already started. Accordingly, you will work
on jobs assigned to you and we will study the costs
involved in accomplishing the work. Since we have no
labor contract with any of the three unions representing
you we have agreed to use union rates for this
temporary work.
If you have any questions on above, will you please
contact me or the plant manager.
'All events hereinafter described occurred in the last 3 months of 1967.
814 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
The Company retained the plant manager and other
supervisors who had performed those functions for
National Store Fixture and National Wood, retained the
same employees, and completed the unfinished orders,
which were in the plant when the Company took it over.
The Company in making reports and payments to the
Carpenters' Health and Welfare fund identified itself as
"National Store Fixture & Equipment Division" (or
"National Wood Products Division") "Pittsburgh
Reflector Company." In the light of these facts, and even
accepting the Company's version of the disputed facts
concerning the notice and the timing of the layoff, I find
that the Company was a "successor" to National Store
Fixture and National Wood within the meaning of
Overrate Transportation Company v. N.L.R.B., 372 F.2d
765, 768 (C.A.4), and the cases there cited.
C. The Company's Relations with the Unions Prior
to the Closing
According to Union Representative Cuda, he and
representatives of other unions representing employees in
other occupations at the Preble Avenue plant met with
Company President Oswald and Plant Manager Klepacz
on October 16, at which time Oswald agreed to honor the
existing contracts and pay the fringe benefits therein
contained. Cuda also testified that at this meeting "there
was no discussion whatsoever" of lowering the existing
wage rates, and Oswald made no request to discuss wages.
According to Oswald's testimony, the meeting took place
on October 11, and he did initiate a discussion of wage
rates but the Unions insisted that he continue to pay the
going rates. He further testified that he told Cuda the
Company could not assume the existing contracts but that
the Company would "sit down and work out a working
agreement with them."
According to Cuda he did not see Oswald again until
November 10, at which time the Company took the
position that it would not pay fringe benefits owed for the
period before the Company purchased the assets, but
would pay them for the future. Oswald, however, testified
that he and Cuda met at the plant on October 25, at
which time Oswald tried to negotiate for lower wage rates,
stating that he might have to close the plant if he could
not cut labor costs. To this Cuda replied (according to
Oswald) that he could get lots of jobs for his men in the
Pittsburgh area, but when Oswald asked that Cuda place
the men elsewhere and let the Company employ men at a
rate it could afford, Cuda flatly refused. Oswald further
testified that on November 9 in a telephone conversation
with Cuda, Oswald again discussed "the wage situation
and the fact that we were going to have to close the plant
unless we can do something about it," but that Cuda
again said he had lots of work and that Oswald should not
"worry about it." Cuda denied that any such conversation
occurred.
With respect to the meeting on November 10, Cuda
testified that it lasted about 10 minutes and was concerned
solely with the fringe benefit matter. Oswald testified that
it lasted about 2 hours, that he again raised the question
of closing the plant because the high labor costs prevented
his being awarded jobs which he had bid, and that Cuda
replied that he had lots of jobs for all the men.
Oswald further testified that he met Cuda at the plant
on November 22 and told him that the plant would have
to be closed in the near future, and that Cuda suggested
he get in touch with a Mr. Laskey, who was interested in
buying the business . Oswald pursued the Laskey matter
without success. Cuda denied having any meeting with
Oswald in which the latter said anything concerning the
future operation of the business. On November 29,
according to Oswald, he called Cuda, "told him that the
decision had been made that we would no longer be able
to operate the plant and that he knew the reasons why
and asked him again if he had anything he could do."
Cuda replied, according to Oswald, "Don't worry about
it I got lots of work for these fellows. Whenever you have
finished, we will pick it up."
On December 1 the Company laid off six or seven
employees in the "National Wood" aspect of the business,
and the remaining three or four were laid off on
December 6. On December 7 all but six of the employees
in the "National Store Fixture" division were laid off, and
the rest of that group was laid off on December 8. Cuda
testified that he learned of the December 1, 7, and 8
layoffs by telephone, and that he tried in vain to reach
Oswald by telephone on December 9 and 11, because he
was "kind of perturbed that there was no official
notification coming from the Company, the plant manager
or anybody, notifying the union that these men. . .were to
be laid off." Again Oswald's testimony sharply contradicts
Cuda's for Oswald testified that Cuda was at the plant on
the morning of December 8, that Oswald told Cuda "how
sorry we were that we had reached the end of the line,"
that Cuda had replied, "that's all right. We've got lots of
work for these people," and that Cuda then proposed "a
deal" whereby Local 1160 would postpone for 6 months a
10-cent wage increase due under the contract, but that
Oswald replied that this was totally insufficient to meet
the problem.'
General Counsel called witnesses whose testimony
supported Cuda's version of the above events, and the
Company called witnesses in support of Oswald's version.
For example, Union Attorney Rainero substantiated
Cuda's recital of the November 10 conference, while
Company Attorney Clark supported Oswald's account.
Similarly the Company called several witnesses to support
Oswald's story of a December 8 meeting with Cuda at the
plant, but General Counsel produced rebuttal testimony
which, if credited, would discredit the corroboration
offered by the Company. I have on previous occasions
expanded my views on the problem presented by what I
can only regard as deliberately false testimony by one side
or the other (see, e.g ., Liberty Scrap Materials, Inc., 152
NLRB 480, 484, 488 - 489, enfd. 64 LRRM 2686 (C.A.
6); Louis Fatigati, 144 NLRB 460, 463 - 464), and little
purpose would be served by a repetition here. Basically, a
determination of this issue can only be made from a
consideration of the whole record and from somewhat
undefinable impressions conveyed during the course of the
hearing. To single out specific items as influencing the
determination is to do less than justice to the whole case
as it minimizes the contribution made by less definable
factors. Nevertheless, I should note that although Rainero
'Oswald's exact testimony on the point is as follows
He said, "I'll tell you what I will do I'll give you - I'll make a deal
with you."
I said , "Fine What kind of a deal will you make9"
He said , "Well, you're supposed to raise the price of wages on
December Ist I'll put that off for 6 months" I said, "Good heavens,
Mr Cuda , you're not giving us anything We didn't give it to you - the
10 cents anyway 10 cents isn't the margin we need to do this job We
need like $2.00 We need different people " He said , "That's as far as
we're going to go " I said , "Well, I'm sorry That is not very much of a
proposition."
PITTSBURGH REFLECTOR COMPANY 815
did support Cuda' s account of the November 10 meeting,
Rainero admitted that at that meeting Oswald had said,
"If it [the Preble Avenue business] doesn't go, I'll have to
get rid of it." Also I note Cuda's volunteered statement
on the witness stand that "Had I known that this place
was going to close I would have taken those men and
found jobs for them, which I did," a comment which at
least suggests that Cuda might have voiced a similar
sentiment as to the ready availability of carpenter jobs -
a sentiment attributed to him not only by Oswald but also
by each of the other four witnesses called by the
Company. On the other hand, the date of October 13
appearing on the notice discussed above leads me to
question the testimony of Oswald and Klepacz that the
plant was closed during the week commencing October 9
and did not reopen until October 16, a fact not important
in itself but perhaps bearing on the credibility of several
witnesses.
On the whole record, however, I am inclined to credit
the testimony of Oswald as to his conversations with
Cuda. I therefore find that the Company did advise Cuda
from time to time that the plant would be forced to close
unless Cuda agreed to modify the wage structure , and that
Cuda repeatedly refused to do so and expressed no
concern over the closing but stated he was certain the
employees would be promptly hired elsewhere.
D. The Failure to Observe the Contracts
The parties stipulated that the Company continued to
pay the wage rates in effect when it took over the Preble
Avenue operation, and that it neither raised nor lowered
wages. Also, according to Plant Manager Klepacz, the
Company paid for "several vacations and so forth"
because "otherwise Mr. Cuda would have shut us down."
The Company also continued to make health and welfare
payments under the contracts although it apparently made
none for the final week. The evidence establishes,
however, that the Company did not made certain
payments provided for in the contracts which National
Store Fixture and National Wood had made with Local
1160 and the District Council, respectively.
Local 1160's contract provided, inter alia , for paid
vacations, a paid "personal holiday," and a
10-cents-per-hour general wage increase to become
effective December 1, 1967. It also provided for certain
termination pay, including any vacation due at the time of
termination and holiday pay for holidays occurring within
a specified number of days after termination. The District
Council's contract provided, inter alia, for wage increases
after specified periods of employment, and also for
accrued vacation pay in the event of termination. The
record is clear that the Company did not give the wage
increases provided for in the contracts, and that at least
some of the "personal holiday" and vacation payments
were not made.
E. Concluding Findings
General Counsel contends that the Company violated
Section 8(a)(5) and (1) of the Act by closing the Preble
Avenue facility and terminating the employment of the
employees represented by the District Council and by
Local 1160 without giving those Unions "prior notice of
its intention to do so, and without affording them an
opportunity to bargain over its decision or over the effects
such decision had on employees. ." I reject this
contention and dismiss this allegation because I credit the
testimony of Oswald rather than that of Cuda, and
accordingly find that the Company gave ample notice of
its intentions and that the Unions, through Cuda,
disclaimed any desire to negotiate.
General Counsel also alleges that the Company violated
Section 8(a)(5) and (1) of the Act in that it "unilaterally,
and without affording [the Unions] the opportunity to
bargain about the matter, changed existing terms and
conditions of employment, including the elimination of
vacations and holiday benefits . and "refused to
assume and maintain in effect the collective-bargaining
agreements" referred to above. On this aspect of the case
I sustain the position of the General Counsel for two
reasons , either one of which standing alone furnishes
sufficient basis for the result.
The Company admits that it did not grant the wage
increases specified in the contracts and argues that, as a
matter of law, it was not obligated to honor the contracts.
This poses an important question of labor law and policy
suggested by the Supreme Court's decision in John Wiley
& Sons, Inc. v. David Livingston, etc., 376 U.S. 543, and
now pending before the Board in Hackney Iron & Steel
Co., Cases 23-CA-2505 and 2554, on remand from the
District of Columbia Circuit, 395 F.2d 639. As the reach
of this doctrine will be decided at higher level, I deem it
sufficient to note my full agreement with the views stated
by Trial Examiner Frey in the Hackney case, 167 NLRB
No. 84, TXD. I would hold the successor company
obligated under the contracts, noting that, as this case
illustrates, the union which holds the contract might prefer
not to insist on adhering to its terms as the successor
employer might choose to discontinue operations.
Assuming, however, that the contracts are not binding
in this case, this means that the Company could propose
changing the terms of employment, that the Unions would
be obligated to- bargain over such changes, and that if an
impasse were reached after good-faith bargaining the
Company could lawfully institute the proposed changes
rejected by the Unions. On this record, however, it is clear
that the Company proposed no changes in the contracts,
and indeed honored several of the terms. As I view the
matter, the provisions for accrued vacation pay on
termination , provisions for prospective wage increases on
specific dates (or on dates readily calculable based on
length of service), and other existing previsions of the
contracts are just as much existing terms of employment
as the wage rates in effect at the time the Company
assumed operations at Preble Avenue. Even if the
Company was not obligated to honor the contracts until
they expired, it was obligated under settled principles to
maintain existing conditions until it proposed and
bargained over changes. In my view existing conditions
include promised future benefits, such as paid holidays
which occur after the new owner takes over, severance
pay, vacation benefits, and even wage increases already
contracted for, as an employee works today in part
because of the contractual assurance of a wage increase or
other benefits tomorrow. I therefore find that the
Company violated Section 8(a)(5) and (1) of Act by
changing existing terms and conditions of employment
without giving the Unions notice and opportunity to
bargain.
The Company argues that the case should be dismissed
insofar as it concerns the contract between National
Wood and the District Council because the only unfair
labor practice charge on file identified only Local 1160 as
the Charging Party. That charge, however, named the
party charged as "Pittsburgh Reflector Company d/b/a
816 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
National Wood Products Company and National Store
Fixture and Equipment Company." Indeed, letters were
sent by the Board's Regional Office serving copies of the
charge, and the one accepted by the Company's plant
manager , Klepacz , was addressed "Pittsburgh Reflector
Company, d/b/a National Wood Products Company."
The Company was thus on notice from the outset of the
case that the litigation concerned the "National Wood" as
well as the "National Store Fixture" aspect of the Preble
Avenue plant. The General Counsel was therefore well
within both constitutional and statutory confines by
including the National Wood employees represented by
the District Council within the scope of the complaint.
Barney Wilkerson Construction Company, 145 NLRB
704, 710, fn. 3.
CONCLUSION OF LAW
The Company by failing to make certain wage,
vacation, holiday, and health and welfare payments
provided for in the contracts which covered certain
employees in the Preble Avenue plant, without notice to
or bargaining with the employees ' statutory
representatives , engaged in an unfair labor practice
affecting commerce within the meaning of Section 8(a)(5)
and (1) and Section 2(6) and (7) of the Act.
THE REMEDY
I shall recommend an order directing the Company to
make the payments to the employees and the Unions
which were owing under the contracts. As already
indicated, this relief follows whether the contracts be held
binding as contracts or merely as setting terms of
employment which the Company could have changed after
bargaining but could not change without notice and
opportunity for bargaining. As the Preble Avenue plant is
long since closed, as the Company in its other operations
does not employ the persons involved at Preble Avenue or
deal with the Unions there involved, as the Preble Avenue
venture was an undertaking totally foreign to the
Company ' s regular and continuing business , and as the
violations found arose out of a situation peculiar to the
Company's takeover of another business, I see no purpose
to be served in the issuance of a cease-and-desist order or
in the posting of a notice. There is no likelihood of future
violations, and there are no present employees who need
reassurance as to their statutory rights.
[Recommended Order omitted from publication.]