P & M Cedar Products, Inc.

National Labor Relations Board - Board Decisions

Jun 30, 1987

284 N.L.R.B. 652 (N.L.R.B. 1987)

652 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
P & M Cedar Products, Inc. and International
Woodworkers of America, Local 3-433, AFL-
CIO. Case 20-CA-20132
30 June 1987
DECISION AND ORDER
BY MEMBERS JOHANSEN, BABSON, AND
STEPHENS
On 11 September 1986 Administrative Law
Judge James M. Kennedy issued the attached deci-
sion. The Respondent filed exceptions and a sup-
porting brief, the General Counsel filed limited
cross-exceptions, and the General Counsel and the
Charging Party filed answering briefs to the Re-
spondent's exceptions.
The National Labor Relations Board has delegat-
ed its authority in this proceeding to a three-
member panel.
The Board has considered the decision and the
record in light of the exceptions and briefs 1 and
has decided to affirm the judge's rulings, findings,2
and conclusions3 and to adopt the recommended
Order.
In adopting the judge's conclusion that the Re-
spondent violated Section 8(a)(5) and (1) of the
Act, we fmd it unnecessary to rely on the judge's
finding that "the objective facts show that Re-
spondent purchased [the Anderson] plant with the
specific purpose, inter alia, of producing pencil
stock to be sold to the same pencil slat plant that it
had always serviced." In so doing, we find it un-
necessary to decide what the Respondent's precise
plans for the plant were at the time of its purchase.
In this regard, in agreement with the judge, we are
satisfied that the Respondent is a successor employ-
er because there is a substantial continuity of the
employing enterprise. See Eastone of Ohio, 277
1 The General Counsel has submitted a motion to correct the tran-
script in various respects. Since no party opposes that request, we grant
the General Counsel's motion.
2 Based on certain remarks the judge made at the hearmg, the Re-
spondent contends that the judge was biased in that he prejudged the
issues before him We have carefully reviewed the entire record and the
judge's decision in light of the Respondent's contentions, and conclude
that they are without merit.
Additionally, the judge stated in his decision that the Respondent pur-
chased a new debarker machine before commencing operations at the
Anderson, California sawmill involved in this dispute. Contrary to the
judge, the evidence regarding the debarker discloses that the Respondent
only changed a part of the operation involving this machine when it up-
graded the Anderson sawmill. This error is insufficient to affect our
result in this case
3 We note that the judge properly found that the Respondent has ad-
mitted in its answer that the Anderson sawmill meets the Board's discre-
tionary standard for the assertion of junschction on a projected basis
Based on the evidence that the Respondent conducts other lumber oper-
ations, the judge also stated that "[n]o doubt it would have met the non-
retail standard without the projection" The judge further stated that the
Anderson sawmill operates "like other sawmills" We find that the
judge's latter two statements lack evidentiary support in the record, and
we place no reliance on these statements.
NLRB 1652 (1986). Furthermore, in light of the
other factors indicative of substantial continuity
here, the 6-month hiatus between the former em-
ployer's shutdown and the Respondent's com-
mencement of operations is not determinative. See
Fall River Dyeing Corp. v. NLRB, 107 S.Ct. 2225
(1987). We also note that, because during at least 3
months of the hiatus the Respondent was engaged
in remodeling the sawmill for operation, the hiatus,
viewed from the employees' perspective, may have
been less than 6 months. We, however, place no re-
liance on the judge's speculative finding that if the
Respondent had permanently closed the Anderson
sawmill, "it would have meant that [the Respond-
ent's] other plants would have had to cease pro-
ducing the products which they were then making
and reducing its claim in those markets."
ORDER
The National Labor Relations Board adopts the
recommended Order of the administrative law
judge and orders that the Respondent, P & M
Cedar Products, Inc., Anderson, California, its offi-
cers, agents, successors, and assigns, shall take the
action set forth in the Order.
John M. Kelly, for the General Counsel.
Morton H. Orenstein and Richard J. Curiale (with Edward
L. Kaufman on brief) (Schachter, Kristoff Ross, Sprague
& Curiale), of San Francisco, California, for the Re-
spondent.
Lynn-Marie Crider, of Gladstone, Oregon, for the Charg-
ing Party.
DECISION
JAMES M. KENNEDY, Administrative Law Judge. This
case was tried before me in Redding, California, on May
7, 8, 28, and 29, 1986, pursuant to a complaint issued by
the Regional Director for Region 20 of the National
Labor Relations Board on March 5, 1986. The complaint
is based on a charge filed by International Woodworkers
of America, Local 3-433, AFL-CIO (the Union) on Jan-
uary 29, 1986. The complaint alleges that P & M Cedar
Products, Inc. (Respondent) has engaged in certain viola-
tions of Section 8(a)(5) and (1) of the National Labor Re-
lations Act (the Act).
Issue
The sole issue is whether Respondent is a successor
under the Act to the Hudson Lumber Company, Elkins
Sawmill Division, having the obligation under the Act to
recognize and bargain with the Union that had been the
collective-bargaining representative of the Hudson em-
ployees.
Based on the entire record of the case, as well as my
observation of the witnesses and their demeanor, I make
the following
284 NLRB No. 76
CEDAR PRODUCTS 653
FINDINGS OF FACT
I. RESPONDENT'S BUSINESS
The complaint, utilizing a commerce projection formu-
la, alleges that Respondent meets the nonretail standard
for the assertion of jurisdiction by the Board. Specifical-
ly, it alleges that since January 6, 1986, when Respond-
ent began operating the Hudson facility in question, it
will annually ship and sell from that facility products,
goods, and materials valued in excess of $50,000 directly
to enterprises which meet the Board's standards for the
assertion of jurisdiction on a direct basis. Respondent
admits the allegation and the admission is sufficient to
warrant the assertion of jurisdiction here. As will be
seen, however, Respondent is not a newcomer to the
timber products field. Indeed, it operates sawmills in at
least two States as well as mills that convert the raw
lumber produced at the sawmills into other products. No
doubt it would have met the nonretail standard without
the projection. I find, therefore, that Respondent is an
employer engaged in commerce and in an industry af-
fecting commerce, within the meaning of Section 2(2),
(6), and (7) of the Act.
II. THE LABOR ORGANIZATION INVOLVED
The General Counsel has alleged that the Union is a
labor organization within the meaning of Section 2(5) of
the Act. In its answer Respondent denies the allegation
for lack of sufficient information. The evidence, howev-
er, shows that International Woodworkers of America,
Local 3-433, AFL-CIO is a local labor union in Ander-
son, California, which has represented employees at the
sawmill in question since it was certified by the Board in
1962. 1 The evidence further shows that the Union has
bargained collectively with whoever was owner of that
facility. The ownership changed in 1963 when Hudson
purchased the mill from Elkins Sawmill, Inc. Since 1963
the Union has negotiated a series of collective-bargaining
agreements with Hudson. I conclude, therefore, that the
Union is a labor organization within the meaning of Sec-
tion 2(5) of the Act.
III. THE ALLEGED UNFAIR LABOR PRACTICES
A. Background
As noted above, Hudson Lumber Company had oper-
ated the Elkins Sawmill in Anderson, California, since
1963. 2 Hudson in turn became a subsidiary of the Berol
Corporation. Berol, through its divisions, is a manufac-
turer of writing instruments, including lead pencils. The
first stage of the manufacture of lead pencils is the reduc-
tion of raw cedar logs to 3-by-3 inch lumber in lengths
that are multiples of 16 feet. This product is known as
"pencil stock," and Hudson's Elkins Sawmill has always
mannfactured it. Its pencil stock was thereafter kiln-dried
and then shipped to a Hudson sister plant in San Lean-
dro, California, where the pencil stock was further re-
duced to another product known as "pencil slats." The
Elkins Sawmill, 20-RC-4785 (1962)
2 The sawmill in question is referred to interchangeably as either
Elkins or Anderson.
log-to-slat process, as administered by Hudson, was an
internal straightline operation.
Because the diameter of raw logs varies as does the
quality of the wood found within a given log, the Ander-
son mill, like other sawmills, also produced, and still pro-
duces, other products. These include bark, known as
"hog fuel," chips (sold to a paper manufacturer), and
other grades and shapes of lumber. The lumber that was
not pencil stock was either commercial or industrial
lumber that Hudson usually sold to other firms for re-
manufacture into whatever product that company chose
to make.
The Elkins Sawmill is located on property consisting
of approximately 30 acres, 5 of which are occupied by a
power plant. In 1982, Hudson, desiring to become a
more efficient operation, built a large dry kiln to dry not
only the products it manufactured, but to dry the wood
products of other sawmills. The new kilns are heated by
spent steam from the electrical steam plant. The steam
plant, built simultaneously with the new kilns, is also
used to generate electricity both for the plant and for the
sale of surplus electricity to the local electric utility, Pa-
cific Gas & Electric Co. The "cogeneration plant," as it
is called, is powered with the hog fuel produced at the
sawmill This fuel is burned at the cogeneration plant to
produce steam to run the turbines.
When the cogeneration and dry kiln operations com-
menced operating, Hudson recognized the Union as the
representative of both the cogeneration plant and the
new dry kiln employees. 3 Wage rates were agreed on for
the cogeneration plant employees, as well as for the dry
kiln employees. The most recent collective-bargaining
contract between Hudson and the Union was in effect
frorn July 8, 1983, with a scheduled expiration date of
May 31, 1986. It covered all the production and mainte-
nance employees at the sawmill, the dry kilns, and the
cogeneration plant.
Sometime in 1985, Berol Corporation decided to aban-
don the pencil manufacturing business. In separate trans-
actions it put up several of its west coast holdings for
sale. It sold the Hudson San Leandro pencil slat plant to
a newly formed company known as Hudson ICS and, in
June 1985, sold the Elkins sawmill and dry kilns to Re-
spondent. The cogeneration plant was eventually sold to
a third firm, Catalyst Energy Development Corporation,
in December 1985.
Respondent P & M Cedar Products is headquartered
in Stockton, California. From its headquarters it directs
operations at its sawmills located in Mt. Shasta, Pioneer,
Westwood, and McCloud, California, as well as in Med-
ford and Roseburg, Oregon. These mills generally manu-
facture commercial lumber of varying types but the Mt.
Shasta mill has also produced pencil stock. There are
only two customers for pencil stock in the United States,
one being the Hudson plant in San Leandro and the
other being a company known as California Cedar Prod-
ucts.
3 The record does not show whether there was any other type of kiln
on the premises prior to the construction of the new kilns.
654 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
On Friday, May 31, 1985, Hudson discontinued its
sawmill operation at Anderson and advised its employees
that it was selling the mill and the dry kilns to Respond-
ent. On that date there were approximately 56 employees
working at the three divisions. Ten of those were as-
signed to the cogeneration plant. All the other bargain-
ing unit employees were notified of their layoff at that
time, although supervisory personnel and a few mainte-
nance employees remained at the plant until Friday, June
21, in order to facilitate the shutdown and storage of
equipment. On that date, the sale to Respondent was
completed.
B. The Nature of the Transaction
Hudson had insisted that any purchaser of the Elkins
Sawmill also purchase its Worden, Oregon mill. Accord-
ing to Respondent's general manager and executive vice
president, Larry Hood, P & M had no present intention
of operating either the Worden or Anderson sawmills.4
He said that it was P & M's principal (crux) intention to
obtain the pencil stock sales contract with the newly
formed Hudson ICS and to run the dry kilns. Under the
purchase agreement, Respondent purchased the sawmill,
the dry kilns, the equipment, the logging inventory, the
log supply contracts, the lumber inventory, and certain
lumber sales agreements. In addition, before it actually
closed the sale, Respondent did enter into the sought-for
agreement with Hudson ICS, the San Leandro slat facto-
ry, to supply that factory with its pencil stock require-
ments. It also arranged a hog-fuel sale and steam pur-
chase agreement with Hudson with respect to the symbi-
otic cogeneration plant that Hudson continued to oper-
ate.
C. P & M Takes Over the Sawmill and the Dry Kilns
On Monday, June 24, Respondent had hired most of
Hudson's management officials and installed them in
similar capacities. Hudson's plant manager David Waters
was made P & M's plant manager; Hudson's sawmill su-
pervisor John Lipsey was given the same position, as
were Hudson's dry kiln supervisor Fred Statton and
Hadsons sales manager Leo Jordan. Furthermore, Waters
retained Richard Schneider as a handyman and to oper-
ate the log loader and other yard equipment.
The sawmill remained closed until January 6, 1986.
However, beginning in October 1985, Respondent took
steps to modernize and upgrade the mill. The steps it
took will be described in more detail below.
From June 24 on, the dry kilns continued to operate as
before. On hand at the time the sale was completed,
were approximately 5 million board feet of pencil stock.
This represented several months' production and, togeth-
er with inventory already on hand at the San Leandro
slat factory, was enough to keep the slat factory going
for 4 or 5 months. To the extent that additional pencil
stock was needed, the Mt. Shasta mill later provided it.
In addition, the dry kilns continued to dry green
lumber in a manner identical to that under Hudson.
Much of the pencil stock had come from the Elkins mill,
4 According to Hood the Worden mill is now being dismantled.
or from Worden, but some came from Mt. Shasta for
drying. In addition, various grades of commercial lumber
produced either by P & M or by other firms continued
to be dried. Indeed, Hudson had previously served as a
commercial dryer for several other lumber companies.
Between May 30 and the June 21 takeover, Hudson
continued to accept the delivery of logs at the Elkins
mill. After the takeover by P & M, logs continued to
arrive under the log supply contracts Respondent had
acquired from Hudson. It was Schnieder's job to receive
them, sort them, and stack them in the yard. In the
meantime, Sawmill Superintendent Lipsey drove a fork-
lift in order to stay occupied. Principally, he moved
green and dry lumber in and around the dry kilns.5
D. The Mill Modification
In October, Respondent commenced a major modifica-
tion of the sawmill. To assist in this remodel, it hired
nine former Hudson employees. 6 Lipsey told them that if
he had any say about it they could expect to be retained
to work in the mill when it resumed operation. In No-
vember, nine additional employees were hired, four of
whom were former Hudson employees. Three of the
four new employees were only hired on a temporary
basis. In December, three more employees were hired.
One had worked for Hudson at the time of the shut-
down, one was a Hudson retiree, and the third was new.
The retiree, Willard Miller, was hired as a temporary
employee; the other two were hired as permanent em-
ployees.
Respondent's purpose in modifying the mill principally
was to create a mill that had the capacity to produce a
larger dimension commercial lumber when necessary. It
also was attempting to make the mill more efficient by
reducing the number of times a log needed to be turned
to be cut. Furthermore, it wished to be able to handle
larger logs in order to increase its production of com-
mercial lumber. In fact, it may fairly be said that Hudson
had simply been in the pencil stock business, whereas P
& M wanted the same plant to produce both pencil stock
and commercial lumber as major products. To this end,
Respondent invested over $800,000 to make capital im-
provements.
First, it revamped the log inload system. Previously
logs had been transported to the log deck by floating
them to a conveyor rising from the mill pond. It substi-
tuted instead a dry deck log storage system. This re-
quired a change in the approach to the debarker, a new
debarker, and required new and different conveyor sys-
tems. Second, it replaced the edger saw, substituting a
saw that can accommodate an 8-inch log as opposed to
the 5-inch edger that Hudson had used. The new edger
enables Respondent to cut 2-by-6 and 2-by-8 lumber,
products that Hudson had not been able to produce.
Third, Respondent changed the resaw from vertical to
5 There are eight dry kilns Each is 120 feet long and accommodates
several railway cars that slowly traverse the length of the kiln. It takes
approximately 2 weeks for a load of lumber to go through the drying
process. Loads are then delivered to the cooling shed before being stored
or shipped.
6 Three of the nine October recalls were initially assigned to the kilns.
CEDAR PRODUCTS 655
horizontal. The head rig, the saw that makes the first
cut, remained the same. At Hudson, however, the log
had to be run at least three times through the head rig
before it could be sent to the resaw. Under the new
system the head rig need make only one cut before send-
ing it to the resaw. Some of this machinery was quite big
and in order to revamp the conveyor systems and install
and/or reorient equipment it was necessary to remove
portions of the building's roof. Fourth, Respondent
added a new chipper. Respondent also purchased a
larger log loader than the one it had acquired from
Hudson. Hudson's loader remained on site, however.
The new loader was more efficient in that it could
unload an entire truckload of logs in one pass. The small-
er loader had been unable to be as efficient. Finally, it
added a trailer loader, allowing truckers to self-load their
empty trailers onto the back of their tractors. Hudson
had used the log loader to accomplish that task.
E. Production Resumes
On January 6, 1986, Respondent resumed sawmill pro-
duction. Unlike Hudson, which had operated two shifts,
Respondent began production with only one shift. On
that date, it put 28 employees to work in production. Of
those 28, 25 were employees who had performed similar
work for Hudson at the time of the shutdown in June.
Without attempting to detail each job, suffice it to say
that most of the Hudson employees ended up with jobs
identical or nearly identical to those jobs that they had
performed previously for Hudson. Certain jobs, of
course, had been eliminated, i.e., the pond man. Others
remained nearly the same even if the job title changed.
For example, what Hudson used to call lumber pilers
were called green chain pullers under Respondent. Simi-
larly, a loader operator became a log stacker and the
edging picker became a strip catcher. The strip catcher
also had to learn to operate the new chipper by himself.
Previously it had been a two-man job. Similarly, the
edger saw operator had to learn some new cuts, the
resaw operator had to learn to run that new saw's com-
puter control and to adjust to the new merry-go-round
conveyor. Previously, Hudson had required the front-
end loader operator to do some scaling, i.e., measuring
and grading the logs to determine the amount and nature
of the lumber that could be extracted. P & M now scales
the logs via an independent contractor.
In January, as the mill became operational, it produced
principally pencil stock, approximately 85 percent, and
only 15-percent commercial lumber for remanufacture.
In March and April the figures became 70 percent and
30 percent, respectively. All the Anderson pencil stock
produced in 1986 up to the time of the hearing has been
shipped to the San Leandro slat factory. The commercial
lumber has all been absorbed within the P & M system
and sent to other plants for remanufacture.
Adjusting to market factors and utilizing the new flexi-
bility that the mill had acquired, there were times, begin-
ning in April, when the mill produced only commercial
lumber. There is no evidence that Hudson had ever uti-
lized the mill in that fashion.
F. The Union's Demand for Recognition
Although the Union early on learned about the sale
and even negotiated a severance package for the employ-
ees with Hudson, it also attempted to obtain an agree-
ment from Respondent that it would be recognized as
the Anderson employees' collective-bargaining represent-
ative when production resumed. There were several tele-
phone conversations between the Union's regional coun-
cil president, Vernon Red Russell, and Respondent's
labor attorney, Richard J. Curiale. There is some dispute
about what occurred during these conversations, but
whatever may be made of the different versions of the
telephone calls, it is clear that Respondent informed the
Union that it would not be operating the mill immediate-
ly, at the very least. At one point, in November or De-
cember, Curiale told Russell that Respondent would not
recognize it absent a Board election. On January 10,
1986, 4 days after Respondent resumed operation, staffed
with approximately 90 percent Hudson employees, Local
3-433's business agent, Glenn Blaylock, hand-delivered to
Plant Manager Waters a letter demanding that Respond-
ent recognize the Union in an "all employee unit," i.e., a
production and maintenance unit. Waters replied by
letter dated January 13, refusing recognition. Based on
Respondent's refusal to recognize it, the Union filed the
instant unfair labor practice charge.
IV. ANALYSIS AND CONCLUSIONS
The Supreme Court has held that a lawfully recog-
nized union does not lose its 9(a) status by a mere change
of ownership in the employing industry. NLRB v. Burns
Security Services, 406 U.S. 272 (1972). Generally speak-
ing, in order to determine whether an employer is a suc-
cessor within the meaning of the Act, the Board looks to
whether there has been a substantial continuity in the
employing industry. That question is complex, but there
is general agreement that resolution may be had by ana-
lyzing approximately seven factors, none of which are
controlling. These are: (1) has there been a substantial
continuity of the same business; (2) does the new em-
ployer use the same plant; (3) is the same or substantially
the same work force employed; (4) do the same jobs
exist under the same working conditions; (5) are the
same supervisors employed; (6) are the same machinery,
equipment, and methods of production used; and/or (7)
are the same products manufactured or the same services
offered?7 Another factor is whether, as a result of these
changes, the employees' desires concerning continued
union representation is likely to have changed. Ranch-
Way, Inc., 183 NLRB 1168 (1970).
The parties have carefully directed their briefs to an-
swering these questions. In addition, Respondent argues
that another factor to be considered is whether the em-
ployees in question had a reasonable expectancy of rehire
at the time the predecessor left the business. Whether
that is characterized as a separate factor or simply part
of the "economic continuity" issue is of little practical
difference.
7 Jejfries Lithograph Co., 265 NLRB 1499, 1503 (1982), citing George-
town Stainless Mfg. Corp., 198 NLRB 234 (1972)
656 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
The parties are certainly in agreement that some of the
factors listed above have been met. For example, there is
really no doubt that substantially the same work force is
employed. It is true that Hudson had a larger total com-
plement, utilizing a two-shift system. Yet, Respondent
hired approximately 90 percent of the Hudson employ-
ees. It is also true that Respondent eliminated only four
job classifications involving approximately eight employ-
ees, four pond employees, the head scaler, the saw fitter,
and the assistant kiln operators. Yet most of the jobs
remain. There continues to be the standard jobs normally
seen in sawmills, including sawyers, edger operators,
resaw operators, debarker operators, green chain pullers,
loader operators, strip catchers, forklift drivers, the
standard maintenance employees, millwrights, electri-
cians, oilers, and a saw filer. The presence or absence of
a few jobs, a reduction in force, or a slight redefinition
of duties does not change the essential fact that Respond-
ent hired over 90 percent of its employees from its pred-
ecessor's work force. Nor does it change the fact that
the jobs performed by the successor's employees are es-
sentially the same jobs performed by the predecessor's
employees. Moreover, the same management continued
to operate this plant. Waters, Lipsey, and Statton per-
formed approximately the same duties as they had for
Hudson. It is true that Waters' duties were changed
slightly because he no longer had to concern himself
with log supply, that being handled by Respondent's
Stockton headquarters; and Lipsey was able to delegate
his quality control duties to someone else.
It is also clear that the new employer uses the same
plant. To be sure, some of the machinery has been up-
graded and modernized but it is the same sort of equip-
ment and is used for the same purpose. The fact that the
new equipment involved a large amount of money in
capital investment does not alter the fact that it is essen-
tially the same plant using the same type of equipment.
Finally, essentially the same products are being manu-
factured at this plant. Under the Hudson operation, the
plant produced pencil stock and commercial lumber.
Likewise, Respondent's operation produces pencil stock
and commercial lumber. To be sure, the commercial
lumber that Respondent can produce, because of the
modernization of the equipment, is of a somewhat wider
range, reducing waste and simultaneously expanding its
marketability. And, Respondent on occasion now pro-
duces commercial lumber as its sole product at this plant.
Hudson never did that; commercial lumber for that com-
pany was principally a by product of the pencil stock op-
eration. Nonetheless, the change in emphasis, or perhaps
more accurately the enhanced flexibility of this re-
vamped mill, does not change the ultimate fact that the
mill produces essentially the same sort of product—cedar
lumber—for even the pencil stock may be so character-
ized. In fact, at least one type of commercial lumber is
virtually identical to pencil stock, 3-by-3 inch in dimen-
sion. Depending on market conditions, it might be la-
beled pencil stock. Moreover, virtually all the cedar
lumber product produced at this plant is produced in the
first instance to be remanufactured into other products.
The pencil stock invariably went to a remanufacturer,
the slat plant, and the commercial lumber invariably
went to a manufacturing plant where it was further re-
duced into other products.
Thus, although Respondent vigorously argues that the
enhanced capability of this plant to produce a wider va-
riety of commercial lumber has significantly modified the
nature of the product manufactured, I disagree. It seems
to me that there is no question that the products manu-
factured by P & M at the Elkins mill are substantially the
same as the products manufactured by Hudson at the
Elkins mill.
Finally, there is the question of whether there has been
substantial continuity of this same business operation. I
reach the conclusion that there is substantial continuity.
Although it has been said before, it bears repeating here.
Hudson principally manufactured pencil stock and
shipped it to its San Leandro plant. Respondent, when it
purchased the mill, had as its principal purpose, the take-
over of the pencil stock business. Even before the sale
closed, Respondent sought and obtained a contract obli-
gating it to supply the San Leandro pencil slat factory,
now owned by Hudson ICS, with all its pencil stock re-
quirements. It is certainly true that other plants in the P
& M system were capable of producting the pencil stock
and may well have been able to supply Hudson ICS with
its needs. Had they done so, it would have meant that P
& M's other plants would have had to cease producing
the products that they were then making and reducing
its claim in those markets. Thus, it seems likely that Re-
spondent at all times intended to utilize the Elkins mill to
manufacture pencil stock for San Leandro. It is clear to
me, therefore, that there has been a substantial continuity
of the same business operation insofar as the sale of
pencil stock is concerned. Moreover, the commercial
lumber operation continued to produce the same sorts of
molding that Hudson had produced, although it is now
able to produce an even greater variety of products. In
my view, this demonstrates, rather than disproves, the al-
legation that there has been a substantial continuity of
that side of the business.
Respondent also points to the 6-month shutdown as
evidence that the business was not continuous. Actually,
however, that is only partially true_ It may be that the
kilns were only the tail on the dog of this business, but
they continued to operate as usual during the 6 months
in question. Previously they had been used to dry Elkins-
produced lumber and lumber from other mills on a com-
mercial basis. That practice continued throughout the 6
months that the mill was shut down. Furthermore, Re-
spondent kept its supervisory staff in place, knowing that
the pencil stock inventory would soon be exhausted.
That in itself suggests that the shutdown was only tem-
porary and Respondent knew it. Certainly a temporary
shutdown while a business is upgraded is not the kind of
hiatus that the Board and the courts have looked to in
fmding a break in continuity. Usually that sort of hiatus
is a time during which a company is dormant. No dor-
mancy can be found here. Indeed, in Fall River Dyeing
Corp., 272 NLRB 839, 840 (1984), enfd. 775 F.2d 425
(5th Cir. 1985), a 7-month hiatus did not defeat succes-
sorship. Even an 8-month hiatus has been held not to be
controlling. Daneker Clock Co., 211 NLRB 719 (1974).
CEDAR PRODUCTS 657
The hiatus, of course, can also be seen as a fact affect-
ing the employees' expectancy of recall. Any expectancy
an employee may have in this regard is undoubtedly di-
minished by the passage of time. Yet, one employee,
Schneider, continued to be employee throughout this
period and nine others (three of whom initially did bar-
gaining unit work) were hired in October to begin refur-
bishing the plant. Nine more were hired for the same
purpose in November. At that point the expectancy of
recall was clear. Not only were the employees told that
they would be rehired when production resumed, but
also they could see that the mill was reftirbishing in
order to resume production. Indeed, Plant Manager
Waters and Superintendent Lipsey are in agreement that
the Hudson staff was a good staff and was the natural
place for P & M to seek good quality employees. They
had every intention of hiring as many former Hudson
employes as they needed. They mailed letters to them
before hiring any outsiders. To the extent that this 6-
month hiatus had any impact at all on the employees' ex-
pectancy of recall, I conclude that it only minimally di-
minished them.
Equally unpersuasive with respect to their diminished
expectancy is Respondent's observation that the Hudson
employees had received, through union negotiations, a
severance pay package. Hudson, of course, was obligated
to collectively bargain about the effects of its closure on
the employees. The fact that it did so and that the Union
obtained certain benefits from that negotiation does not
in any way change the employees' perception of whether
they were to be hired by the purchaser of the plant.
Ironically, that factor tends to show that the employee
complement had no reason to abandon their desire for
continued representation by the Union. It had done a
good job to the very end. Employees would be aware of
that and would likely want it to continue. Ranch-Way,
supra.
Although the parties have focused on the expectancy
of rehire as an issue of concern in measuring successor-
ship status, I find that factor, although favoring the em-
ployees, to be relatively minor in the overview. More
significant is the economic continuity that resulted here.
Despite Hood's testimony to the contrary, the objec-
tive facts show that Respondent purchased this plant
with the specific purpose, inter alia, of producing pencil
stock to be sold to the same pencil slat plant that it had
always serviced. It is also no doubt true that Respondent
hoped to be able to utilize the Elkins mill's production
facilities for products other than pencil stock but that
does not change the economic continuum. Respondent's
somewhat brittle argument that the continuum was
broken because the San Leandro plant was no longer the
same "customer" (being owned by a new company) falls
short of establishing that there was no economic continu-
ity here. Clearly, the process of manufacturing pencils
began at the Elkins sawmill and proceeded to the next
stage at the San Leandro plant. The fact that Hudson
sold both of those mills to others does not change the
economic continuum at all.
In any event, it appears to me that the most important
factor in the laundry list of significant features discussed
above is the question of whether substantially the same
work force was maintained and whether the same sorts
of tasks were performed by that work force. These fac-
tors are present and virtually control here, favoring a
finding of successorship.
Respondent makes one other argument that deserves
mention. It asserts that there is no continuity because of
the fact that it did not purchase Hudson's cogeneration
plant. I disagree. The Union had negotiated with Hudson
from 1963 until 1982 in a bargaining unit that did not in-
clude the cogeneration plant employees, because that fa-
cility had not yet been built. In 1982, after its construc-
tion the Union was voluntarily recognized as the repre-
sentative in that bargaining unit bargaining unit and they
were included in the subsequent contract. Clearly, both
units were appropriate for collective bargaining. Now
that the cogeneration unit is no longer a part of the oper-
ation, the bargaining unit merely reverts to what it was
before. In any event, the presence or absence of the co-
generation plant is not significant enough to change the
substantial continuity of the underlying enterprise.
Accordingly, I conclude that Respondent as of Janu-
ary 6, 1986, was a successor to Hudson's Elkings Saw-
mill Division in Anderson, California. As such it was ob-
ligated to recognize and bargain with the Union, which
was, and remained, the 9(a) bargaining representative of
the production and maintenance employees at the Elkins
sawmill.
THE REMEDY
Having found that Respondent has engaged in certain
violation of Section 8(a)(5) and (1) of the Act, I shall
recommend that it be ordered to cease and desist there-
from and to take certain affirmative action designed to
effectuate the policies of the Act. In this regard Re-
spondent shall be ordered immediately to recognize and
bargain with the Union in the unit found to be appropri-
ate, and thereafter reduce to writing and sign any agree-
ment which may be reached.
CONCLUSIONS OF LAW
1. The Respondent, P & M Cedar Products, Inc., is an
employer engaged in commerce and in a business affect-
ing commerce within the meaning of Section 2(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. Respondent is a successor to Hudson Lumber Com-
pany, Elkins Sawmill Division, and was obligated to rec-
ognize and bargain with the Union as of January 10,
1986.
4. By failing and refusing to recognize and bargain
with the Union on or after January 10, 1986, the date of
the Union's demand for recognition, Respondent violated
Section 8(a)(5) and (1) of the Act.
5. The following is an appropriate unit for collective
bargaining:
All production and maintenance employees em-
ployed by P & M Cedar Products, Inc. at its saw-
mill and dry kiln operation located near Anderson,
658 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
California, excluding office clerical employees,
guards and supervisors as defined in the Act.
On these findings of fact and conclusions of law and
on the entire record, I issue the following recommend-
ed8
ORDER
The Respondent, P & M Cedar Products, Inc., Ander-
son, California, its officers, agents, successors, and as-
signs, shall
1. Cease and desist from
(a) Failing and refusing to recognize International
Woodworkers of America, Local 3433, AFL-CIO as
the collective-bargaining representative of its employees
in the collective-bargaining unit described above.
(b) In any like or related manner interfering with, re-
straining, or coercing employees in the exercise of the
rights guaranteed them by Section 7 of the Act.
2. Take the following affirmative action necessary to
effectuate the policies of the Act.
(a) Immediately recognize and bargain with Interna-
tional Woodworkers of America, Local 3-433, AFL-CIO
in the bargaining unit found appropriate herein and
embody in writing and sign and agreement or under-
standing may be reached.
(b) Post at its Anderson, California facility copies of
the attached notice marked "Appendix." Copies of the
notice, on forms provided by the Regional Director for
Region 20, after being signed by the Respondent's au-
thorized representative, shall be posted by the Respond-
ent immediately upon receipt and maintained for 60 con-
secutive days in conspicuous places including all places
where notices to employees are customarily posted. Rea-
sonable steps shall be taken by the Respondent to ensure
that the notices are not altered, defaced, or covered by
any other material.
8 If no exceptions are filed as provided by Sec. 102.46 of the Board's
Rules and Regulations, the findings, conclusions, and recommended
Order shall, as provided in Sec. 102.48 of the Rules, be adopted by the
Board and all objections to them shall be deemed waived for all pur-
poses.
9 If this Order is enforced by a judgment of a United States court of
appeals, the words m 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."
(c) Notify the Regional Director in writing within 20
days from the date of this Order what steps the Re-
spondent has taken to comply.
APPENDIX
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
Section 7 of the Act gives employees these rights.
To organize
To form, join, or assist any union
To bargain collectively through representatives
of their own choice
To act together for other mutual aid or protec-
tion
To choose not to engage in any of these protect-
ed concerted activities.
WE WILL NOT refuse to recognize and bargain collec-
tively with International Woodworkers of America,
Local 3-433, AFL-CIO as the collective-bargaining rep-
resentative in the following appropriate collective-bar-
gaining unit:
All our production and maintenance employees em-
ployed at our sawmill and dry kiln operation locat-
ed near Anderson, California, excluding office cleri-
cal employees, guards and supervisors as defined in
the Act.
WE WILL NOT in any like or related manner interfere
with any of the rights set forth above that are guaran-
teed by the National Labor Relations Act.
WE WILL, on request, bargain collectively with the
above-named labor organization as the collective-bar-
gaining representative of the employees in the unit de-
scribed above, with respect to rates of pay, wages, hours
of employment, and other terms and conditions of em-
ployment, and, if an understanding is reached, embody
such understanding in a signed agreement.
P & M CEDAR PRODUCTS, INC.