Pan American Grain Co.

National Labor Relations Board - Board Decisions

Dec 31, 2007

351 N.L.R.B. 1412 (N.L.R.B. 2007)

DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
351 NLRB No. 93
1412
Pan American Grain Co., Inc., and Pan American
Grain Manufacturing Co., Inc. and Congreso De
Uniones Industriales De Puerto Rico. Cases 24–
CA–9138, 24–CA–9144–2, 24–CA–9161, 24–CA–
9216, 24–CA–9227, 24–CA–9350, 24–CA–9390,
and 24–CA–9447
December 31, 2007
SUPPLEMENTAL DECISION AND ORDER
BY MEMBERS LIEBMAN, SCHAUMBER, AND KIRSANOW
On October 26, 2004, the National Labor Relations
Board issued a Decision and Order in this proceeding.1
In its Decision and Order, the Board affirmed the admin-
istrative law judge’s finding that the Respondent’s deci-
sion to lay off 15 employees on February 27, 2002, was a
mandatory subject of bargaining and that the Respondent
violated Section 8(a)(5) and (1) of the Act by implement-
ing the February 27 layoffs without giving the Union
adequate notice and a reasonable opportunity to bargain.
Thereafter, the Board filed a petition for enforcement
with the United States Court of Appeals for the First Cir-
cuit, and the Respondent filed a cross-petition for review.
On December 22, 2005, the court issued its decision en-
forcing the Board’s order in part, vacating it in part, and
remanding the case to the Board for further proceedings
consistent with the court’s decision.2
On October 18, 2006, the Board notified the parties to
this proceeding that it had decided to accept the remand
from the First Circuit, and that all parties were permitted
to file statements of position with respect to the issues
raised by the remand. Thereafter, both the General
Counsel and the Respondent filed statements of position.
The National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
The Board has reviewed the record in light of the par-
ties’ statements of position and of the court’s remand,
which we accept as the law of the case. For the reasons

1 Pan American Grain Co., 343 NLRB 318 (2004).
2 NLRB v. Pan American Grain Co., 432 F.3d 69 (1st Cir. 2005).
Subsequently, the court issued a Supplemental Opinion, addressing the
parties’ dispute regarding the proper “scope and phrasing” of the
court’s judgment enforcing those portions of the Board’s original order
that were not vacated on review. NLRB v. Pan American Grain Co.,
448 F.3d 465 (1st Cir. 2006). In the Supplemental Opinion, the court
denied without prejudice the Board’s motion to vacate the court’s De-
cember 2005 judgment and to substitute a proffered version granting
Laidlaw relief to the 15 employees laid off in February 2002. Although
denying the Board’s motion, the court indicated that the Board “should
be free in the remanded proceeding expressly to order Laidlaw relief
for the 15 employees if it views that as appropriate and consistent with
its prior intentions.” Id. at 468. The court also appreciated, however,
that the issue of Laidlaw relief might be “mooted by the Board’s ‘duty
to bargain’ determinations on remand.” Id. For the reasons explained
below in fn. 11, the instant Supplemental Decision does moot the issue
of Laidlaw relief for the 15 laid-off employees.
that follow, we reaffirm the Board’s prior finding that the
Respondent violated Section 8(a)(5) and (1) by imple-
menting its February 27, 2002 layoffs without providing
the Union with adequate notice and a reasonable oppor-
tunity to bargain.3 In so finding, we reject the Respon-
dent’s argument that it did not have a duty to bargain
over the layoffs because the layoffs resulted, in part,
from the Respondent’s ongoing modernization efforts.
As explained below, we find that, because the Respon-
dent’s layoffs were admittedly based, in part, on “eco-
nomic reasons,” including a reduction in sales resulting
from decreased demand for its products and a loss of
production resulting from an unfair labor practice strike,
and because the Respondent failed to establish that it
would have implemented any particular layoffs solely as
a result of modernization and even in the absence of its
economic reasons, the Respondent had a duty to bargain
over the February 27 layoff decision.
I.
The Respondent manufactures animal feed at its Ame-
lia and Corujo facilities and processes rice at its Arroz
Rico facility. The Union has been the collective-
bargaining representative of the Respondent’s production
and maintenance employees at the Amelia and Corujo
facilities since 1986.
Beginning in 1996, the Respondent began a moderni-
zation project at its Amelia facility. As a result of this
project, the Respondent laid off one or two employees
each year between 1996 and 2002.
On January 8, 2002, unit employees at the Amelia and
Corujo facilities initiated a strike. On February 27, in the
midst of the strike, the Respondent notified 15 of the
striking employees that they were being laid off. The
Respondent undertook this action without providing the
Union with adequate notice and a reasonable opportunity
to bargain over the layoff decision.4
The record establishes that the Respondent’s decision
to lay off 15 employees on February 27 was based on the

3 Having reaffirmed our prior finding in this regard, we will issue an
order corresponding to those provisions of our original order that the
First Circuit vacated (with certain exceptions explained below in fn.
11). Inasmuch as the court enforced the remaining provisions of our
original order, we shall not repeat those here. See, e.g., West Penn
Power Co., 346 NLRB 425, 429 fn. 10 (2006); Bryan Adair Construc-
tion Co., 341 NLRB 247, 247 fn. 4 (2004).
We note that an inadvertent error in our original decision directed
that par. 1 of our modified Order be substituted for par. 1(e) of the
administrative law judge’s recommended Order. It in fact replaces par.
2(e).
4 In our prior decision in this case, we considered and rejected the
Respondent’s exception arguing that it had, in fact, provided the Union
with adequate notice of its layoff decision. 343 NLRB at 318. This
portion of our original Decision and Order was not affected by the First
Circuit’s remand.
PAN AMERICAN GRAIN CO. 1413
Respondent’s reduced need for staffing at that time.5
The Respondent, in its letter notifying the Union of its
decision to lay off employees, indicated that the layoffs
were “due to economic reasons and as a result of a sub-
stantial decrease in production and sales.”6 The Respon-
dent offered conflicting testimony concerning the accu-
racy of this letter. Initially, the Respondent’s president,
Jose Gonzalez, testified that, in its letter, the Respondent
presented the Union with a “detailed explanation” of why
the Respondent was laying off the employees. Later,
Gonzalez testified that the letter did not set forth “the
complete reason” for the layoffs, and cited the Respon-
dent’s automation project as an additional basis for the
layoffs. Gonzalez admitted, however, that sales were
substantially lower in January and February 20027 than
the levels that were originally budgeted for by the Re-
spondent, and that the Respondent’s reduced level of
sales caused the Respondent to require “a lower work
force.”
II.
In the court of appeals, the Respondent argued that it
had no duty to bargain over its layoff decision, only over
the effects of that decision. The Board took the position
that the Respondent was precluded from so arguing be-
cause it had not presented that argument to the Board in
excepting to the administrative law judge’s decision.
The court rejected the Board’s argument in this regard
and concluded that the Board had failed sufficiently to
explain why the Respondent’s duty to bargain went be-
yond the effects of the layoff decision to the decision
itself. Observing that the Supreme Court in First Na-
tional Maintenance Corp. v. NLRB, 452 U.S. 666 (1981),
placed “automation” in a category of management deci-
sions “to be considered on their particular facts” with
respect to the duty to bargain, id. at 686 footnote 22, the
court continued:
We do not know whether the NLRB now views layoff
decisions prompted by modernization to be mandatory
subjects of bargaining, resolving the issue seemingly
left open in First Nat’l, and, if so, why, or whether it
decided this case on its “particular facts,” and, if so,

5 In his complaint, the General Counsel alleged that the February
layoffs resulted from antiunion animus and, thus, violated Sec. 8(a)(3)
and (1) of the Act. The judge dismissed this allegation, and the General
Counsel did not except.
6 This English translation of the relevant portion of the Respondent’s
letter, which was written in Spanish, was quoted by the judge in his
decision. No exception was filed to the judge’s reliance on this transla-
tion.
7 As the judge noted, the Respondent’s significant drop in sales in
January 2002, coincided with the beginning of the employees’ unfair
labor practice strike.
what those facts were. Possibly, the Board attributed
importance to the fact that the layoffs owed something
to the loss of business due to the strike but, if so, this
too is unexplained, nor do we know how multiple mo-
tives for layoffs should be analyzed.
Pan American Grain, supra at 74. We now furnish the ex-
planation the court asked us to provide on remand.
III.
Under Section 8(a)(5) of the Act, an employer com-
mits an unfair labor practice by “refus[ing] to bargain
collectively with the representatives of his employees.”
Section 8(d) of the Act explains that, as part of its duty to
“bargain collectively,” an employer must “confer in good
faith with respect to wages, hours, and other terms and
conditions of employment.” The Supreme Court, in turn,
has long held that an employer breaches its duty to bar-
gain in violation of Section 8(a)(5) by changing an exist-
ing term or condition of employment unilaterally, i.e.,
without first providing the union with adequate notice
and an opportunity to bargain. NLRB v. Katz, 369 U.S.
736, 743 (1962).
In First National Maintenance Corp., supra, the Su-
preme Court examined whether certain managerial deci-
sions affecting terms and conditions of employment
might fall outside the realm of mandatory subjects of
bargaining under Section 8(d). The Supreme Court iden-
tified three types of management decisions: (1) those
that have “only an indirect and attenuated impact on the
employment relationship,” such as decisions involving
advertising and financing; (2) those that “are almost ex-
clusively an aspect of the relationship between employer
and employee,” such as decisions related to production
quotas and work rules; and (3) those that have “a direct
impact on employment . . . but [have] as [their] focus
only the economic profitability of” the business. First
National Maintenance, supra at 676–677 (internal quota-
tions and citations omitted). In analyzing those decisions
falling within the third category, the Court concluded
that “bargaining over management decisions that have a
substantial impact on the continued availability of em-
ployment should be required only if the benefit, for la-
bor-management relations and the collective-bargaining
process, outweighs the burden placed on the conduct of
the business.” Id. at 679.
The Respondent asserts that, under the framework set
forth in First National Maintenance, it did not have a
duty to bargain with the Union over its February 27 lay-
off decision. The Respondent’s argument is based on
three contentions: (1) the layoff decision was attribut-
able to its modernization program, (2) the Respondent’s
modernization program falls within the third category of
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD1414
First National Maintenance managerial decisions, and
(3) the benefits to the collective-bargaining process and
to labor-management relations of requiring bargaining
over the layoffs resulting from the modernization pro-
gram would not outweigh the burden that bargaining
would place on the Respondent’s ability to implement its
modernization program.
In deciding the instant case, we find it unnecessary to
reach the issue presented by the latter two contentions
proffered by the Respondent—namely, whether the Re-
spondent had a duty to bargain over a layoff decision
based entirely on the Respondent’s modernization pro-
gram. We need not reach this issue because, contrary to
the Respondent’s first contention, we find that the Re-
spondent’s February 27 layoff decision was based on a
combination of factors, including a substantial reduction
in sales in January and February 2002, coinciding with
the start of the employees’ unfair labor practice strike.8
In its letter notifying the Union of its layoff decision,
the Respondent cited “economic reasons” and “a sub-
stantial decrease in production and sales.” Moreover,
Gonzalez’ testimony that the letter did not set forth “the
complete reason” for the layoffs, and that the automation
project was an additional reason, establishes that the
“economic reasons” cited in the letter were separate and
distinct from the ongoing automation effort. Where an
employer decides to lay off employees for “economic
reasons,” rather than due to a change in the scope of its
operations, such a layoff decision is a mandatory subject

8 We wish to underline that our finding in this regard is not inconsis-
tent with the following passage in the administrative law judge’s deci-
sion, quoted by the court of appeals (432 F.3d at 73):
The evidence substantiating the Respondent’s position that an ongoing
modernization and automation project had reduced staffing needs was
detailed, plausible, and uncontroverted; it outweighs the evidence cast-
ing doubt on the veracity of the Respondent’s explanation. The Re-
spondent has shown that it more likely than not would have decided to
implement its February 2002 layoff because its staffing needs had de-
creased, even absent the employees’ protected activities.
343 NLRB at 337. In the discussion leading up to this conclusion, the judge
found that both Gonzalez and Luis Juarbe, the Respondent’s human re-
sources director, attributed the Respondent’s reduced staffing needs at least
in part to decreased demand. Although the judge, in the quoted passage,
emphasized the Respondent’s “ongoing modernization and automation
project” as a cause of its “reduced staffing needs,” he did not find that the
layoff decision was attributable to reduced staffing needs resulting solely
from modernization. Indeed, he had no reason to reach that issue. The
quoted passage came at the conclusion of the judge’s analysis of whether the
Respondent had met its rebuttal burden as to the allegation that the layoffs
violated Sec. 8(a)(3). Thus, the judge was addressing the question whether
the Respondent would have made those layoffs because of reduced staffing
needs even in the absence of employees’ Sec. 7 activities. In deciding that
issue, the judge had no need to and did not decide the very different issue of
whether the Respondent would have made the layoffs because of reduced
staffing needs due to modernization, even in the absence of reduced staffing
needs due to decreased demand.
of bargaining. See, e.g., Adair Standish Corp., 290
NLRB 317, 319 (1988) (finding unlawful failure to bar-
gain over economically motivated layoffs), enfd. in rele-
vant part 912 F.2d 854 (6th Cir. 1990); see also Fibre-
board Corp. v. NLRB, 379 U.S. 203, 213–214 (1964)
(stating that measures aimed at reducing labor costs are
“matters peculiarly suitable for resolution within the col-
lective bargaining framework”).
In this case, to the extent that the Respondent’s Febru-
ary 27 decision to lay off employees was motivated by a
desire to reduce labor costs in response to a substantial
decrease in production and sales, it is clear that the Re-
spondent had a duty to bargain with the Union over the
layoff decision. Crucially, the Respondent failed to es-
tablish that its decision to lay off any specific individual
on February 27 was based exclusively on its moderniza-
tion program. Had the Respondent shown that certain
layoffs were attributable to modernization and others to
economic concerns, then we would be in a position to
address the question, raised by the court of appeals, of
whether the Respondent had a duty to bargain over the
particular layoffs arising solely from its modernization
program. The Respondent, however, failed to produce
such evidence.9 As a result, we must assume that all of
the February 27 layoffs were motivated, at least in part,
by reasons other than efficiency gains resulting from
modernization, i.e., a desire to reduce labor costs
prompted by a substantial decrease in production and
sales.10 Accordingly, we find that the Respondent had a
duty to bargain with the Union over these layoffs, and
that its unilateral implementation of the layoffs violated
Section 8(a)(5) and (1) of the Act.11

9 The General Counsel bears the burden, of course, to prove a viola-
tion of Sec. 8(a)(5). The General Counsel meets that burden, as he did
in this case, “when he shows that the employer made a material and
substantial change in a term of employment without negotiating with
the union.” Fresno Bee, 339 NLRB 1214, 1214 (2003). At that point,
the burden shifts to the employer “to show that the unilateral change
was in some way privileged.” Id. Thus, it was incumbent on the Re-
spondent to show that its layoff decision, which unquestionably af-
fected the terms and conditions of unit employees’ employment in a
material and substantial way, was exempt from obligatory bargaining
under First National Maintenance.
10 Member Schaumber notes that the Respondent is not precluded
from introducing any previously unavailable evidence at the compli-
ance stage of this proceeding to demonstrate that the reinstatement
remedy for the 15 laid-off workers is unduly burdensome because their
jobs no longer exist. See Compu-Net Communications, 315 NLRB 216,
fn. 3 (1994), citing Lear Siegler, Inc., 295 NLRB 857, 861–862 (1989).
11 As we noted above, supra at fn. 2, the General Counsel moved the
court of appeals to award the 15 employees laid off in February 2002, a
remedy under Laidlaw, 171 NLRB 1366 (1968). The court denied that
motion without prejudice, stating that the Board was free to order that
relief in the remanded proceeding. The General Counsel renews his
Laidlaw argument in his statement of position. We find it unnecessary
to pass on that issue. As a remedy for the Respondent’s 8(a)(5) unilat-
PAN AMERICAN GRAIN CO. 1415
ORDER
The National Labor Relations Board orders that the
Respondent, Pan American Grain Co., Inc. and Pan
American Grain Manufacturing Co., Inc., Guaynabo,
Puerto Rico, its officers, agents, successors, and assigns,
shall
1. Cease and desist from
(a) Laying off unit employees without first giving ade-
quate notice of its intention to do so to the Union and
affording the Union an opportunity to bargain in good
faith over the layoff decision and its effects.
(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) On request, bargain with the Union concerning the
decision to lay off employees on February 27, 2002, and
the effects of that decision.
(b) Within 14 days from the date of this Order, offer
each of the employees laid off on February 27, 2002, full
reinstatement to his or her former job or, if that job no
longer exists, to a substantially equivalent position, with-
out prejudice to his or her seniority or any other rights or
privileges previously enjoyed.
(c) Make each of the employees laid off on February
27, 2002, whole for any loss of earnings and other bene-
fits suffered as a result of the Respondent’s unlawful
conduct. Backpay shall be calculated in accordance with
F. W. Woolworth Co., 90 NLRB 289 (1950), with inter-
est as prescribed in New Horizons for the Retarded, 283
NLRB 1173 (1987).
(d) Preserve and, within 14 days of a request, or such
additional time as the Regional Director may allow for
good cause shown, provide at a reasonable place desig-
nated by the Board or its agents, all payroll records, so-

eral layoff violation, the employees laid off on February 27 are entitled
to full backpay and offers of reinstatement. Thus, any relief awarded
under a Laidlaw theory would be redundant. Accordingly, we also find
it unnecessary to reissue pars. 1(e), 2(e), and 2(f) of our original Order,
the cease-and-desist and affirmative-action provisions that implemented
a Laidlaw remedy for the former strikers, including those strikers laid
off on February 27. The court of appeals enforced those paragraphs
except as they applied to the laid-off strikers, and, for the reasons just
stated, the laid-off strikers are made whole by our instant Order even
without a Laidlaw remedy.
Member Schaumber would reach the Laidlaw issue and find that the
15 employees laid off on February 27 are not entitled to a Laidlaw
remedy. Under Laidlaw, supra, economic strikers who unconditionally
apply for reinstatement after their positions were filled by permanent
replacements are entitled to full reinstatement upon the departure of the
replacement workers. 171 NLRB at 1369–1370. Here, however, the
Respondent laid off the 15 workers for economic reasons, due to de-
creased staffing needs, their positions have never been filled and there
is no evidence the 15 laid-off workers’ jobs still exist.
cial security payment records, timecards, personnel re-
cords and reports, and all other records, including an
electronic copy of such records if stored in electronic
form, necessary to analyze the amount of backpay due
under the terms of this Order.
(e) Within 14 days after service by the Region, post at
its facilities in Guaynabo, Puerto Rico, and Bayamon,
Puerto Rico, in English and Spanish, copies of the at-
tached notice marked “Appendix.”12 Copies of the no-
tice, on forms provided by the Regional Director for Re-
gion 24, after being signed by the Respondent’s author-
ized representative, shall be posted by the Respondent
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 al-
tered, defaced, or covered by any other material. In the
event that, during the pendency of these proceedings, the
Respondent has gone out of business or closed the facil-
ity involved in these proceedings, the Respondent shall
duplicate and mail, at its own expense, a copy of the no-
tice to all current employees and former employees em-
ployed by the Respondent at any time since February 27,
2002.
(f) Within 21 days after service by the Region, file
with the Regional Director a sworn certification of a re-
sponsible official on a form provided by the Region at-
testing to the steps that 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 vio-
lated Federal labor law and has ordered us to post and obey
this notice.
FEDERAL LAW GIVES YOU THE RIGHT TO
Form, join, or assist a union
Choose representatives to bargain with us on
your behalf
Act together with other employees for your bene-
fit and protection
Choose not to engage in any of these protected
activities.

12 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 Judg-
ment of the United States Court of Appeals Enforcing an Order of the
National Labor Relations Board.”
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD1416
WE WILL NOT lay off unit employees without first giv-
ing adequate notice of our intention to do so to the Union
and affording the Union an opportunity to bargain in
good faith over the layoff and its effects.
WE WILL NOT in any like or related manner interfere
with, restrain, or coerce you in the exercise of the rights
set forth above.
WE WILL, on request, bargain with the Union concern-
ing the decision to lay off employees on February 27,
2002, and the effects of that decision.
WE WILL, within 14 days from the date of the Board’s
Order, offer each of the employees laid off on February
27, 2002, full reinstatement to his or her former job or, if
that job no longer exists, to a substantially equivalent
position, without prejudice to his or her seniority or any
other rights or privileges previously enjoyed.
WE WILL make each of the employees laid off on Feb-
ruary 27, 2002, whole for any loss of earnings and other
benefits suffered as a result of our unlawful conduct, less
any net interim earnings, plus interest.
PAN AMERICAN GRAIN CO., INC. AND PAN
AMERICAN GRAIN MANUFACTURING CO. INC.