Nolan Systems, Inc.

National Labor Relations Board - Board Decisions

Feb 28, 1984

268 N.L.R.B. 1248 (N.L.R.B. 1984)

DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Nolan Systems, Inc. and National Production Work-
ers Union Local 707 of Denver. Case 27-CA-
7643
28 February 1984
DECISION AND ORDER
BY MEMBERS ZIMMERMAN, HUNTER, AND
DENNIS
Upon unfair labor pratice charges filed on 3 De-
cember 1981 by National Production Workers
Union Local 707 of Denver, herein called the
Union, the General Counsel of the National Labor
Relations Board by the Regional Director for
Region 27 issued 15 January 1982 a complaint
against Nolan System, Inc., herein called the Re-
spondent, alleging that the Respondent had en-
gaged in unfair labor practices affecting commerce
within the meaning of Section 8(a)(3) and (1) and
Section 2(6) and (7) of the National Labor Rela-
tions Act, as amended. Copies of the complaint and
notice of hearing were served on the Respondent.
Thereafter, the Respondent filed a timely answer
denying the commission of any unfair labor prac-
tices and asserting certain affirmative defenses.
On 11 September 1982 the parties jointly moved
to transfer the instant proceeding to the Board
without benefit of a hearing before an administra-
tive law judge and submitted a proposed record
consisting of the formal papers and the parties' stip-
ulation of facts with attached exhibits. On 3 De-
cember 1982 the Executive Secretary of the Board,
by direction of the Board, issued an order granting
the motion, approving the stipulation, and transfer-
ring the proceeding to the Board. Thereafter, the
General Counsel and the Respondent filed briefs.
The National Labor Relations Board has delegat-
ed its authority in this proceeding to a three-
member panel.
Upon the entire record in the case, the Board
makes the following
FINDINGS OF FACT
I. JURISDICTION
The Respondent is a New York corporation en-
gaged in the manufacture and sale of material han-
dling equipment for the newspaper industry at its
facility located at 11250 East 40th Avenue,
Denver, Colorado. The Respondent, in the course
and conduct of its business operations, annually
sells and ships goods and material valued in excess
of $50,000 directly to points and places outside the
State of Colorado. Accordingly, we find that the
Respondent is an employer engaged in commerce
268 NLRB No. 202
within the meaning of Section 2(6) and (7) of the
Act.
II1. THE LABOR ORGANIZATION INVOLVED
The National Production Workers Union Local
707 of Denver is a labor organization within the
meaning of Section 2(5) of the Act.
III. THE UNFAIR LABOR PRACTICES
A. Issue
The issue presented is whether the Respondent's
failure to reinstate former economic striker Michael
James after the termination of his permanent strike
replacement violated Section 8(a)(3) and (1) of the
Act.
B. Facts
In January 1981,1 Ken Krov, who worked for
the Respondent as a metal finisher, was hospital-
ized. Krov was given a leave of absence and his
position was permanently filled 11 May by Michael
James. On 27 May Krov submitted to the Respond-
ent a medical release from his doctor which stated
that Krov was well enough to return to a job other
than metal finisher. Consequently, on 1 June Krov
was assigned to the position of assembler "C." Be-
cause that job paid less than his former job as
metal finisher, Krov obtained written assurance
from Plant Superintendent John Rhine that he
would be returned to the metal finisher job, health
permitting, when that position became open for
bid.
Certain of the Respondent's employees, including
Michael James and Bill Maes, engaged in an eco-
nomic strike against the Respondent from 11 to 19
August. During the strike, the Respondent hired
Howard Ross as a permanent strike replacement to
fill James' metal finisher position. On 19 August, all
the strikers made unconditional offers to return to
work, and the Respondent and the Union executed
a strike settlement agreement establishing a seniori-
ty-based preferential hiring list for replaced strik-
ers.
On 6 October, Ross was terminated for "exces-
sive unexcused absences." When Krov heard that
Ross was being terminated, he asked to be trans-
ferred back to the metal finisher job. After receiv-
ing a verbal clearance from Krov's doctor, the Re-
spondent assigned him to the metal finisher job.
The Respondent also gave written notice to the
employees on the preferential hiring list that the as-
sembler "C" job was open. Maes succeeded to that
position on the basis of his seniority.
All dates hereafter refer to 1981, unless otherwise indicated.
1248
NOLAN SYSTEMS, INC.
On 7 October, James filed a grievance regarding
the Respondent's failure to rehire him to the metal
finisher position. The Respondent denied the griev-
ance in a letter to the Union dated 12 October
which stated, in part that:
Based on the fact that this commitment was
made to Ken Krov prior to the existence of
the Strike Settlement Agreement and that this
is a unique situation, the decision has been
made to return Ken to his former job as Metal
Finisher.
The Preferred Recall list will be used in all
future instances, up to the expiration of such
list, where there is an opening in a classifica-
tion and an individual remains on the Pre-
ferred Recall List, who was in that classifica-
tion at the time of the strike.
The Job Posting procedure will be used for all
positions in classifications not represented on
the Preferred Recall List. Those individuals on
the list will be afforded the opportunity to bid
on these jobs by seniority.
Subsequently, on 13 October, Krov started work as
a metal finisher. On I February 1982, after a com-
plaint had been filed in the instant proceeding,
James assumed the metal finisher position and
Krov returned to the position of assembler "C." 2
C. Contention of the Parties
The General Counsel contends that under the
principles set forth in Laidlaw Corp., 171 NLRB
1366 (1968), James was entitled to the metal finish-
er job when his strike replacement Ross was termi-
nated and that, therefore, the Respondent's prior
commitment to Krov was irrelevant. Accordingly,
the General Counsel maintains that the Respondent
violated Section 8(a)(1) and (3) of the Act by fail-
ing to reinstate James to the metal finisher position.
The Respondent makes four arguments in its de-
fense. First, it contends that its prior commitment
to transfer Krov to the metal finisher job meant
there was no vacancy for James to claim when
Ross was discharged. Second, assuming that Ross'
termination did create a vacancy, the Respondent
maintains that Krov was also entitled to the job on
the basis of seniority. Third, the Respondent con-
tends that it satisfied the requirements of Laidlaw
when it assigned former striker Maes to the
assmbler "C" position after it had discharged strik-
er replacement Ross. Finally, it asserts that its
promise to Krov constituted a legitimate and sub-
stantial business reason for not recalling James.
2 The parties stipulated that no inference adverse to the Respondent
should be drawn from this fact.
D. Discussions of Law and Conclusions
It is well established that economic strikers have
the right to be treated equally with nonstrikers.
The Supreme Court in NLRB v. Fleetwood Trailer
Co., 389 U.S. 375, 381 (1967), stated that
. . .the status of the striker as an employee
continues until he has obtained "other regular
and substantially equivalent employ-
ment." . . . If and when a job for which the
striker is qualified becomes available, he is en-
titled to an offer of reinstatement. The right
can be defeated only if the employer can show
"legitimate and substantial business justifica-
tion." [NLRB v. Great Dane Trailers, 388 U.S.
at 34.]
In Laidlaw Corp., supra, the Board relied on the
principles set forth in Fleetwood Trailer and held
that economic strikers who unconditionally apply
for reinstatement when their positions are filled by
permanent replacements are entitled to full rein-
statement upon the departure of replacements
unless they have in the meantime acquired regular
and substantially equivalent employment or the em-
ployer can sustain its burden of proof that the fail-
ure to offer reinstatement was for legitimate and
substantial business reasons.
All parties here agree that James had made an
unconditional offer to return to work and was enti-
tled to the reinstatement rights of a former eco-
nomic striker under Fleetwood Trailer and Laidlaw.
The question presented is whether James had a
right superior to Krov's under the Act to succeed
Ross in his metal finisher job. We find that James
did have such a right.
Initially, we reject the Respondent's contention
that no vacancy existed to trigger reinstatement
rights of strikers when Krov replaced Ross. The
departure of strike replacement Ross did not termi-
nate the existence of his or any other job position.
Clearly, a job vacancy had been created in James'
former position. Krov's transfer to that position-
after a total absence of 9 months, two intervening
tenancies (by James and Ross), and his tenure as as-
sembler "C"-is substantially different from those
situations in which the Board has found that short-
term, nondiscriminatory personnel shifts did not
create vacancies which an employer had to )ffer
unreinstated strikers.3
3 See Randall. Burhart/Randall, 257 NLRB 1, 5 (1981) (temporary
interdepartmental transfers of similarly classified employees and transfers
of employees to another classification for 10 days or less); Bancroft Cap
Co., 245 NLRB 547 (1979) (recall of employees laid off for 2-7 days due
to materials shortages).
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DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Because the departure of strike replacement Ross
created a vacancy, the Respondent was required to
prefer unreinstated striker James for reinstatement
to his former job rather than transfer Krov from
another job on the payroll, unless the Respondent
could show "substantial and legitimate business rea-
sons" for transferring Krov. Randall,
Burhart/Randall, supra at 5-6; MCC Pacific Valves,
244 NLRB 931 (1979). In this regard, the Respond-
ent's reinstatement of former striker Maes to the
lower-paying assembler "C" position vacated by
Krov does not relieve it of the burden to justify
the failure to reinstate James. The Board has held
that an employer is generally obligated to offer the
initial job'vacancy created by the departure of a
strike replacement to an unreinstated, qualified
striker. MCC Pacific Valves, supra at 933-934;
Crossroads Chevrolet, 233 NLRB 728 (1977). This
rule is a necessary corollary of Laidlaw. Requiring
proof of a legitimate and substantial business justifi-
cation for any exception to this rule deters employ-
er practices which might inherently discriminate
against former economic strikers who seek recall to
their jobs in higher pay strata.
The Respondent's brief claims two legitimate and
substantial business justifications for transferring
Krov rather than reinstating James to the metal fin-
isher vacancy: (1) Krov's seniority; (2) the written
commitment made by the Respondent to Krov
when he returned to work after his convalescence.
Assuming that Krov's seniority would entitle him
instead of James to transfer to a metal finisher va-
cancy if both employees sought transfer in a com-
petitive bidding situation, we find such a fact irrel-
evant because the Respondent, itself, has effective-
ly admitted the inapplicability of seniority to the
situation at issue. As previously indicated, the Re-
spondent's written denial of the Union's grievance
about Krov's transfer characterized his situation as
"unique," relied exclusively on the written commit-
ment made to him, and clearly expressed the Re-
spondent's understanding that the strikers' pre-
ferred recall list took precedence over the seniori-
ty-based job posting procedure for all job vacan-
cies in classifications represented on the recall list.
Consequently, we find that seniority considerations
could not have been a legitimate and substantial
justification for Krov's transfer.
We also find that Respondent's written commit-
ment to Krov was not sufficient business justifica-
tion for its failure to reinstate James to his former
job.4 The Respondent does not contend that any
4 In Overhead Door Corp. (Todco Division), 261 NLRB 657, 664 (1982),
the Board adopted a judge's decision which correctly stated:
A lawful transfer situation normally arises when there is a business
downturn which would allow the company to continue its oper-
overriding business considerations compelled
Krov's transfer. Its commitment to Krov appears
to have been a purely personal pledge to return
Krov to the higher paying job which illness had
forced him to relinquish. Acknowledging the legiti-
macy of the Respondent's written commitment to
Krov, we find that it was not so substantial as to
outweigh the statutory commitment imposed by
Laidlaw on the Respondent to reinstate James to
the same job which he held more recently than
Krov. Accordingly, we find that the Respondent
violated Section 8(a)(3) and (1) by failing to rein-
state James after his strike replacement, Ross, was
discharged.
CONCLUSIONS OF LAW
1. The Respondent Nolan Systems, Inc. is an em-
ployer engaged in commerce within the meaning of
Section 2(6) and (7) of the Act.
2. The National Production Workers Union
Local 707 of Denver is a labor organization within
the meaning of Section 2(5) of the Act.
3. By failing and refusing to reinstate Michael
James to his former job after he had unconditional-
ly offered to return to work, and when said job
was available, the Respondent has engaged in an
unfair labor practice within the meaning of Section
8(a)(3) and (1) of the Act.
4. The aforesaid unfair labor practice affects
commerce within the meaning of Section 2(6) and
(7) of the Act.
THE REMEDY
Having found that the Respondent has engaged
in certain unfair labor practices, we shall order it
to cease and desist therefrom and to take certain af-
firmative action designed to effectuate the policies
of the Act.
The parties agree that a reinstatement order is
not necessary here because the Respondent placed
James in the metal finisher position and transferred
Krov on I February 1982. We shall, however,
order the Respondent to make James whole for
any loss of earnings he may have suffered by
reason of the discrimination against him, by pay-
ment of a sum of money equal to that which he
would have earned from 7 October 1981, when the
Respondent unlawfully refused to reinstate him, to
I February 1982, less his net earnings, if any,
during such period. Backpay will be computed in
the manner prescribed in F. W. Woolworth Co., 90
ations with a reduced work force. It can also happen when, as here,
an entire function, such as policing the plant premises with specially
designated employees, has been discontinued.
See also Randall, Burhanrt/Randall, supra at 5-6.
1250
NOLAN SYSTEMS, INC.
NLRB 289 (1950), with interest to be computed as
set forth in Florida Steel Corp., 231 NLRB 651
(1977). 5
ORDER
The National Labor Relations Board orders that
the Respondent, Nolan Systems, Inc., Denver, Col-
orado, its officers, agents, successors, and assigns,
shall
1. Cease and desist from
(a) Refusing to reinstate or otherwise discrimi-
nating against any employee for having engaged in
a lawful strike or other concerted activity protect-
ed under the provisions of Section 7 of the Nation-
al Labor Relations Act, as amended.
(b) In any like or related manner interfering
with, restraining, or coercing employees in the ex-
ercise of the rights guaranteed them under Section
7 of the Act.
2. Take the following affirmative action neces-
sary to effectuate the purposes and policies of the
Act.
(a) Make Michael James whole for any loss of
earnings he may have suffered by reason of its fail-
ure to reinstate him to his former job, reimbursing
him in the manner set forth in the section of this
decision entitled "The Remedy."
(b) Preserve and, on request, make available to
the Board or its agents, for examination and copy-
ing, all payroll records, social security payment
records, timecards, personnel records and reports,
and all other records necessary to analyze the
amount of backpay due under the terms of this
Order.
(c) Post at its Denver, Colorado, place of busi-
ness copies of the attached notice marked "Appen-
dix."6 Copies of the notice, on forms provided by
the Regional Director for Region 27, after being
signed by the Respondent's authorized representa-
tive, shall be posted by the Respondent immediate-
I See generally, Isis Plumbing & Heating Ca, 138 NLRB 716 (1962).
e 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 Na-
tional Labor Relations Board" shall read "Posted Pursuant to a Judgment
of the United States Court of Appeals Enforcing an Order of the Nation-
al Labor Relations Board."
ly 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
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.
Section 7 of the Act gives employees these
rights.
To organize
To form, join, or assist any union
To bargain collectively through representa-
'tives of their own choice
To act together for other mutual aid or pro-
tection
To choose not to engage in any of these
protected concerted activities.
WE WILL NOT refuse to reinstate or otherwise
discriminate against any employee because he en-
gaged in the protected activity of engaging in a
strike.
WE WILL NOT in any like or related manner
interfere with, restrain, or coerce our employees in
the exercise of the rights guaranteed them by Sec-
tion 7 of the Act.
WE WILL make Michael James whole for any
earnings lost as a result of our unlawful failure to
reinstate him to his former job, plus interest.
NOLAN SYSTEMS, INC.
1251