Ranch-Way, Inc.

National Labor Relations Board - Board Decisions

Jun 26, 1970

183 N.L.R.B. 1168 (N.L.R.B. 1970)

1168 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Ranch-Way, Inc. and American Federation of
Grain Millers, AFL-CIO. Case 27-CA-2555
June 26, 1970
DECISION AND ORDER
BY MEMBERS FANNING, MCCULLOCH, AND BROWN
On April 1, 1969, Trial Examiner James R.
Webster issued his Decision in the above-entitled
proceeding, finding that Respondent had not en-
gaged in the unfair labor practices alleged in the
complaint, and recommending that the complaint
be dismissed in its entirety, as set forth in the
attached Trial Examiner's Decision. Thereafter,
the General Counsel filed exceptions to the Deci-
sion and a supporting brief, and Respondent filed
a brief in support of the Decision.
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, the
briefs, and the entire record in the case, and hereby
adopts the findings, conclusions, and recommenda-
tions of the Trial Examiner only to the extent con-
sistent herewith.
1. The Trial Examiner concluded that Respon-
dent did not violate Section 8(a)(5) of the Act
because the Union did not represent a majority of
the employees at the time the Union made its
request to bargain and because Respondent
reasonably believed that the Union was not the
majority representative at that time. We do not
agree with his recommended dismissal of the com-
plaint, for the reasons detailed below.
Respondent began operating an animal feed mill
in Fort Collins, Colorado, on July 1, 1968. Prior to
that time, the mill in question had been owned by
Colorado Milling and Elevator Company,' which
operated a total of nine flour mills, two feed mills,
and five grain elevators in six States. At the time of
the sale, CME had a collective-bargaining agree-
ment with the American Federation of Grain Mill-
ers, AFL-CIO,2 covering some 800 production
and maintenance employees at all of CME's opera-
tions. The contract, which is effective until July 15,
1970, lists each operation as a separate bargaining
unit, and there are appendixes attached to the mas-
ter contract pertaining to employees at each loca-
tion. The Fort Collins appendix provides for local
job classifications, hourly wage rates, starting times,
overtime assignments, and holidays for employees
Hereinafter referred to as CME
r Hereinafter called the Union
in the Fort Collins unit. Pursuant to a union-securi-
ty provision requiring membership in the Union, all
of the unit employees at Fort Collins were dues-
paying members of the Union at the time Respon-
dent purchased and began operation of the mill on
July 1, 1968. All of them had also voluntarily
agreed to checkoff of union dues from their wages.
Prior to its decision to get out of the feed busi-
ness, CME had operated that business through its
"Ranch-Way" division, which was comprised of
two districts, one in Colorado and one in Oregon.
The Fort Collins district in Colorado included the
mill at Fort Collins and some country elevators,
which showed aggregate annual sales of $2-1/2 mil-
lion. Total annual sales of CME reached about
$125 million. The chief administrative officer of the
Ranch-Way division was a vice president of CME,
whose office was in Denver.
Respondent, an investment company with diverse
interests, had been a purchaser of feed products
from the Fort Collins mill for a swine operation
owned by it. Respondent purchased the mill after
being encouraged to do so by Harold Johnson, who
was manager of the mill for CME. One of the con-
ditions upon which Respondent predicated its
purchase of the mill was the continued service of
Johnson as manager. Besides Johnson, the office
manager and plant superintendent for CME con-
tinued in those positions when Respondent took
over the mill. In June, before Respondent began
operations, Johnson interviewed the 25 production
and maintenance employees then in the bargaining
unit and hired 18 of them to work for Respondent.
With the exception of 1 of the 2 employees who
were elevated to supervisory positions, Johnson set
wage rates for the 18 employees below the rates
specified in the collective-bargaining agreement.
All but 5 of the 18 retained employees continued to
perform their previous duties; of the 5 whose job
functions changed, 3 performed other bargaining
unit duties and 2, as noted, became supervisors.
Between July 1 and September 13, 1968, Respon-
dent added five new production employees. Of the
office and managerial employees, who are not in
the unit in question, 13 out of 17 were hired by the
new owner.
The physical assets of the mill as operated by
CME were transferred intact to Respondent. The
only modification in the plant has been the addition
of three storage bins. Using the same machinery
and equipment formerly used by CME, Respondent
produces and stores feed in basically the same way.
There has been some variation in the type of feed
produced by Respondent, as compared to CME:
183 NLRB No. 116
RANCH-WAY, INC.
Respondent has a greater output of swine and range
feeds and makes less poultry feeds. These changes
have apparently been made to accommodate the
needs of Respondent's owners and managers, who
also operate local businesses which require feed.
The CME signs have not been removed from the
buildings, and the trade name "Ranch-Way Feeds"
is still used on trucks and sacks. Over 75 percent of
CME's customers have continued to do business
with the mill under Respondent's operation.
Respondent now purchases its own grain, a func-
tion previously performed by the grain department
of CME in Denver.
On and after July 1, 1969, Respondent uni-
laterally altered the terms of the collective-bargain-
ing contract by changing rules and programs relat-
ing to holidays, overtime, seniority, and vacations,
and by introducing a lower scale, as previously
discussed.
On July 15, 1968, the Union notified Respondent
that it expected its contract with CME to remain in
full force and effect. On August 5, 1968, Respon-
dent answered the Union that it was not bound by
the labor agreement between the Union and CME
and that it appeared that the Union did not
represent a majority of Respondent's employees at
Fort Collins.
The record establishes, and we find, that Respon-
dent is a successor employer for purposes of the
Act. Thus, Respondent has continued the "employ-
ing industry" by using substantially the same facili-
ties and work force to produce the same basic
products for essentially the same customers in the
same geographic area .3 Respondent contends that a
basic change in the nature of the enterprise has oc-
curred, referring to the fact that, under Respon-
dent, control of the feed mill is more localized than
it was under CME. We are not persuaded by the
record that the differences between the scope of
the respective enterprises operated by Respondent
and its predecessor, and between their respective
overall methods of operation, are of such mag-
nitude as to warrant according them controlling sig-
nificance. Cf. Federal Electric Corporation, 167
NLRB 469. Similarly, since the Fort Collins mill
was contractually recognized as a separate bargain-
ing unit and special terms were negotiated for it, we
attach no importance to the fact that the terms and
conditions applicable to Fort Collins had been
negotiated at a national level, together with con-
tract provisions applicable to other CME mills. We
further find that the evidence establishes that em-
ployees at that mill constitute a single-plant unit.
' J nouard Jenks, et a! , 172 NLRB No 197 , Maintenance , Incorpora-
ted, 148 NLRB 1299
4 Maintenance , Inc , supra
1169
The Key test in determining whether a change in
the employing industry has occurred is whether it
may reasonably be assumed that, as a result of
transitional changes, the employees' desires con-
cerning unionization has likely changed. See
N.L.R.B. v. Albert Armato, and Wire & Sheet Metal
Specialty Co.,199 F.2d 800 (C.A. 7). The factors
present in this case support an assumption that the
transfer would not have affected employee senti-
ment toward unionization.
It is well established that a successor employer is
obligated to bargain with a union which is recog-
nized as the majority representative of the em-
ployees in the unit to which the employer suc-
ceeds.4 However, together with its contention that
it is not a successor employer, Respondent defends
its refusal to bargain on the grounds that the Union
did not represent a majority of unit employees at
the time Respondent began operation, and that
Respondent, at any rate, had a good-faith doubt at
that time that the Union represented a majority of
the employees.
In dismissing the 8(a)(5) complaint, the Trial Ex-
aminer found that "Respondent was warranted in
asserting a doubt as to the Union's majority status"
and that "it has not been established that the Union
represented a majority of Respondent's employees"
on the takeover date. In so finding, he relied on the
fact that, after July 1, 1968, no employee tendered
dues to the Union; that, after that date , no meetings
of the local were held; that representation by the
Union had begun in 1949 and the employees "may
or may not" have had a chance to express their sen-
timents about the Union on a single-plant basis (the
record sheds no light on this question); that mem-
bership in the Union had been required by the con-
tract; and that the president of the local testified at
the hearing that 90 percent of the employees had
told him, in October or November 1968, that they
were no longer interested in the Union.
Although he cited no precedent in support of his
dismissal of the complaint on the preceding
grounds, the Trial Examiner clearly based his deci-
sion on cases such as Mitchell Standard Corpora-
tion , 140 NLRB 496, and Paramount Paper
Products Co., 154 NLRB 1064, holding that a suc-
cessor employer may refuse to bargain with the
union recognized by the predecessor employer if
the refusal is based on a good-faith doubt of the
Union's continued majority status. We have
recently held, however, that successor employers
are bound to assume and honor collective-bargain-
ing contracts executed by their predecessors.5
' The William J Burns International Detective Agency, Inc, 182 NLRB
348
1170 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Treating such contracts as if they had been
originally executed by the successor, as we now do,
and applying that rule in this case, raises the
question of the applicability of other established
Board doctrine relating to the right of an employer
to assert a doubt of a union's majority status during
the term of a collective-bargaining agreement.
In Sanson Hosiery Mills, Inc., 92 NLRB 1102,
1103, enfd. 195 F.2d 350 (C.A. 5), we held that
the employer, which was in a contractual relation-
ship with a union, violated Section 8(a)(5) by
withdrawing recognition from the union in the
"period during which the contract was a bar and no
question concerning representation might validly be
raised. .. ." In Hexton Furniture Company, 111
NLRB 342, we amplified the reasoning behind con-
forming the application of Section 8(a)(5) of the
Act and that contract-bar rule under which the
Board refuses to entertain a representation petition
seeking a new determination of the employees' bar-
gaining representative during the period of a valid
collective-bargaining agreement. We noted that if
the employer or another labor organization had
filed a petition for election during the course of the
employer's contract with the union, the Board
would have dismissed it as premature. It followed,
therefore, that during the period in which the con-
tract was a bar, the employer was obligated under
Section 8 of the Act to continue to recognize and
bargain with the union. Otherwise, we noted, "we
should have the anomalous result of an employer
being permitted unilaterally to redetermine his em-
ployees' bargaining representative at a time when
the Board would refuse to make such redetermina-
tion because the time is inappropriate for such ac-
tion." See also Shamrock Dairy, Inc., 119 NLRB
998, and 124 NLRB 494, enfd. 280 F.2d 665
(C.A.D.C.); Duralite Co., Inc., 132 NLRB 425.
In Oilfield Maintenance Co., Inc., 142 NLRB
1384, another case in which we held that
withdrawal of recognition by an employer during
the term of a contract is violative of Section
8(a)(5), we noted that Section 8(d) of the Act pro-
vides additional support for this doctrine. That sec-
tion states , in pertinent part, that "where there is in
effect a collective-bargaining contract . . . the duty
to bargain collectively shall also mean that no party
to such contract shall terminate or modify such
contract , unless the party desiring such termination
or modification ... (4) continues in full force and
effect, without resorting to strike or lockout, all the
terms and conditions of the existing contract ...
until the expiration date of such contract ...." It is
apparent from this statutory definition of the duty
to bargain collectively that Congress intended that
the term of a bargaining agreement , lawfully en-
tered into, is to be a period of industrial repose in
which the contracting employer is obliged, for the
duration of the contract, to abide by his agreement
to recognize the union.
We have thus held that an employer under con-
tract to a union may not normally refuse to con-
tinue dealing with that union during the period in
which the contract constitutes a bar for purposes of
our representation proceedings. Successor em-
ployers, however, have been treated differently.
Since, prior to the Burns case, supra, we did not
hold successor employers to the requirement of as-
suming an existing collective agreement , we per-
mitted successors to question the union's majority
status during the contract term. Paramount Paper
Products Co., supra; Mitchell Standard Corporation,
supra . But, in view of the fact that we have now
held, in our assumption-of-contract cases such as
Burns, that union contracts continue in force when
an employing industry is taken over by a new
owner, it would seem to follow that the Hexton Fur-
niture rule should apply to successor employers.
After careful consideration of the question, we can
see no reason why that rule should not apply to a
successor employer precisely as it does to his
predecessor. We held in Burns that the contract
remains a valid and subsisting agreement , binding
on the successor. Since, in finding that the buyer of
a business is a successor employer , we determine
that the business operation remains substantially
the same after the acquisition as it was before, it
would seem that no special case can be pleaded for
the greater right of a successor , as opposed to his
predecessor, to raise a doubt of the union's
representative status and be immune from liability
under the Act. The similarity of the applicable con-
siderations dictates that the same policy should be
applied to the old and new employer alike. There
seems to be no sound distinction arguing in favor of
allowing the latter to introduce uncertainty into the
plant's labor picture, by refusing to bargain during
the term of the contract, while forbidding the
former to do so.
We hold, therefore, that the normal presumption
of union majority status which attaches during the
term of a contract executed by the predecessor em-
ployer applies equally to its successor, and that the
successor employer may not, during the life of the
contract, assert a doubt as to its obligation to bar-
gain with the incumbent union. The Trial Ex-
aminer 's conclusions regarding the continued ex-
istence of the Union's majority status and Respon-
dent's good-faith doubt thereof thus become irrele-
vant to the decision in this case , although we note
in passing that the evidence and arguments relied
on by the Trial Examiner are, in our view, insuffi-
RANCH-WAY, INC.
cient either to rebut the presumption of the Union's
continued majority status or to support Respon-
dent 's claim of good-faith and reasonable based
doubt of that majority on July 1 , 1968, when it
began operating the plant and unilaterally changed
the wages and working conditions of its employees,
and thereby in effect refused to bargain with the
Union . Cf. United States Gypsum Company, 157
NLRB 652, Laystrom Manufacturing Co., 151
NLRB 1482, enforcement denied 359 F.2d 799
(C.A.7).
Accordingly, we find that Respondent , by uni-
laterally changing the contractual terms and condi-
tions of employment and by refusing to recognize
and bargain with the Union , violated Section
8(a)(5) and ( 1) of the Act.
CONCLUSIONS OF LAW
1. Respondent is engaged in commerce and the
Union is a labor organization within the meaning of
the Act.
2. All production and maintenance employees
employed at Respondent's Fort Collins, Colorado,
mill and elevator, excluding temporary employees,
office clerical employees, laboratory employees,
buyers, salesmen, guards, watchmen, and super-
visors as defined in the Act, constitute a unit ap-
propriate for the purposes of collective bargaining
within the meaning of Section 9(b) of the Act.
3. American Federation of Grain Millers,
AFL-CIO, has been and is the exclusive representa-
tive of all employees in the aforesaid appropriate
unit for the purposes of collective bargaining within
the meaning of Section 9(a) of the Act.
4. On July 1 , 1968, and at all times since , by uni-
laterally changing the wages, working conditions,
and other terms and conditions of employment of
employees in the appropriate unit , Respondent has
engaged in and is engaging in unfair labor practices
within the meaning of Section 8 (a)(5) and (1) of
the Act.
5. By refusing, on or about July 15, 1968, and at
all times thereafter, to bargain collectively with the
above-named labor organization as the exclusive
representative of all its employees in the ap-
propriate unit, and by refusing to honor and abide
by the existing collective -bargaining contract,
Respondent has engaged in and is engaging in un-
fair labor practices within the meaning of Section
8(a)(5) and (1) of the Act.
6. The aforesaid unfair labor practices are unfair
labor practices affecting commerce within the
meaning of Section 2(6) and (7) of the Act.
THE REMEDY
Having found that Respondent has engaged in
1171
and is engaging in unfair labor practices within the
meaning of Section 8(a)(5) and (1) of the Act, we
shall order that it cease and desist therefrom and,
upon request, bargain collectively with the Union
as the exclusive representative of all employees in
the appropriate unit, and honor and abide by the
collective-bargaining agreement executed by the
Union and Respondent's predecessor. We shall also
order Respondent to make the employees in the
unit whole for losses caused by Respondent's uni-
lateral changes in contractual provisions , in order
to restore the status quo ante. Valleydale Packers,
Inc., of Bristol, 162 NLRB 1486. Employees shall
be reimbursed in accordance with F. W. Woolworth
Company, 90 NLRB 289, and Isis Plumbing & Heat-
ing Co., 138 NLRB 716.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended , the National Labor
Relations Board hereby orders that the Respon-
dent, Ranch-Way, Inc., Fort Collins, Colorado, its
officers , agents, successors , and assigns , shall:
1. Cease and desist from:
(a) Refusing to bargain collectively concerning
rates of pay, wages, hours, and other terms and
conditions of employment with American Federa-
tion of Grain Millers, AFL-CIO, as the exclusive
bargaining representative of its employees in the
appropriate unit found above, by failing to recog-
nize the Union as the majority representative of
such employees, by failing to adhere to the provi-
sions of the collective -bargaining agreement ex-
ecuted between said Union and Colorado Milling
and Elevator Co., or by unilaterally modifying the
provisions contained in such contract.
(b) In any like or related manner interfering
with , restraining , or coercing employees in the
rights guaranteed to them by Section 7 of the Act.
2. Take the following affirmative action which
the Board finds will effectuate the policies of the
Act:
(a) Upon request, bargain with the above-named
labor organization as the exclusive representative of
all employees in the aforesaid appropriate unit,
with respect to rates of pay, wages, hours, and
other terms and conditions of employment, as
required by the aforementioned collective-bargain-
ing agreement and applicable law.
(b) Honor, maintain , and enforce the aforemen-
tioned contract and make whole all the persons em-
ployed in the appropriate unit for any loss of pay or
other benefits they may have suffered as a result of
Respondent 's unilateral changes in contract provi-
sions since July 1, 1968 , with interest at 6 percent
per annum.
427-258 O-LT - 74 - 75
1172 DECISIONS OF NATIONAL
(c) Post at its jobsite in its Fort Collins mill and
elevator copies of the attached notice marked "Ap-
pendix. "6 Copies of said notice, on forms provided
by the Regional Director for Region 27, after being
duly signed by Respondent's representative, shall
be posted by Respondent immediately upon receipt
thereof, and be maintained by it for 60 consecutive
days thereafter, in conspicuous places, including all
places where notices to employees are customarily
posted. Reasonable steps shall be taken by Respon-
dent to insure that said notices are not altered,
defaced, or covered by any other material.
(d) Notify the Regional Director for Region 27,
in writing, within 10 days from the date of this
Order, what steps have been taken to comply
herewith.
6 In the event that 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 National Labor Relations Board" shall be changed to read "Posted
Pursuant to a Judgment of the United States Court of Appeals Enforcing an
Order of the National Labor Relations Board "
APPENDIX
NOTICE TO EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
We hereby notify our employees that:
WE WILL NOT refuse to recognize and bar-
gain collectively with American Federation of
Grain Millers , AFL-CIO, as the exclusive
bargaining representative of the employees
in the following appropriate unit:
All production and maintenance em-
ployees employed at Respondent's Fort
Collins, Colorado , mill and elevator, ex-
cluding temporary employees , office cleri-
cal employees, laboratory employees,
buyers , salesmen, guards , watchmen, and
supervisors as defined in the Act.
WE WILL NOT institute changes in wages or
other terms and conditions of employment of
our employees in that unit without first notify-
ing, consulting , and bargaining with the above-
named Union concerning such changes.
WE WILL honor , maintain, and enforce as ap-
plicable to our employees the collective-bar-
gaining agreement executed by the aforemen-
tioned Union and Colorado Milling and Eleva-
tor Company, the predecessor employer of our
employees.
WE WILL make whole all persons employed
in the appropriate unit for any loss of pay or
LABOR RELATIONS BOARD
other benefits they may have suffered as a
result of unilateral changes in working condi-
tions from July 1, 1968, to the present.
WE WILL NOT in any like or related manner
interfere with, restrain, or coerce the em-
ployees in the exercise of their right to self-or-
ganization, to form, join, or assist unions, to
bargain collectively through representatives of
their own choosing, to engage in concerted ac-
tivities for the purposes of collective bargain-
ing or other mutual aid or protection, or to
refrain from such activities, except to the ex-
tent that such right may be affected by an
agreement requiring union membership as a
condition of employment, as authorized in Sec-
tion 8(a)(3) of the Act.
WE WILL, upon request, bargain collectively
with American Federation of Grain Millers,
AFL-CIO, as the exclusive bargaining
representative of all employees in the ap-
propriate unit as found above.
RANCH-WAY, INC.
(Employer)
Dated By
(Representative ) (Title)
This is an official notice and must not be defaced
by anyone.
This notice must remain posted for 60 consecu-
tive days from the date of posting and must not be
altered, defaced, or covered by any other material.
Any questions concerning this notice or com-
pliance with its provisions may be directed to the
Board's Office, Room 260, New Custom House,
721 19th Street, Denver, Colorado 80202,
Telephone 303-297-355 1.
TRIAL EXAMINER'S DECISION
STATEMENT OF THE CASE
JAMES R. WEBSTER, Trial Examiner: This case,
with all parties represented, was heard in Fort Col-
lins, Colorado, on December 10 and 11, 1968,
upon the complaint of the General Counsel and
answer of Financial Investments d/b/a Ranch-Way
Feed Mills, or Ranch-Way, Inc.,' herein called
Respondent. The complaint was issued on October
16, 1968, upon a charge filed July 30, 1968. The
complaint alleges that the Respondent is a succes-
sor to Colorado Milling and Elevator Company in
the operation of its Fort Collins feed mill and has
refused to recognize and bargain with the Union,
has made unilateral changes in terms and condi-
' In October 1968 the name of Respondent was changed from Financial
Investments d/b/a Ranch -Way Feed Mills to Ranch-Way, Inc
RANCH-WAY, INC.
tions of employment , and has refused to adhere to
the terms of a collective-bargaining contract
between the Union and the Colorado Milling and
Elevator Company , and that Respondent has
thereby engaged in a violation of Section 8(a)(1)
and (5 ) of the National Labor Relations Act, as
amended , herein called the Act.
Briefs have been filed by the General Counsel
and the Respondent and they have been carefully
considered . Upon the entire record and upon my
observation of the witnesses , I hereby make the fol-
lowing:
FINDINGS OF FACT
1. THE BUSINESS OF THE RESPONDENT
Respondent is a corporation duly organized
under and existing by virtue of the laws of the State
of Wyoming. On or about June 28 , 1968, it
purchased from Colorado Milling and Elevator
Company, herein referred to as CM and E, a feed
mill located in Fort Collins, Colorado, where it is
engaged in the business of processing and selling
animal feeds . Annually, Respondent will, on a pro-
jected basis , purchase goods and materials valued
in excess of $50,000, which goods and materials
will be delivered and transported directly to its Fort
Collins operation from points outside the State of
Colorado. Also annually, on a projected basis,
Respondent will manufacture , sell, and distribute at
its Fort Collins mill products valued in excess of
$50,000, which products will be shipped from said
mill directly to points outside the State of
Colorado. Annually, on a projected basis, Respon-
dent will distribute goods and materials valued in
excess of $500,000.
I find that Respondent is an employer engaged in
commerce within the meaning of Section 2(6) and
(7) of the Act.
II. THE LABOR ORGANIZATION INVOLVED
The American Federation of Grain Millers,
AFL-CIO, herein called the Union , is a labor or-
ganization within the meaning of Section 2(5) of
the At. Local 170 of said Union is located at the
Fort Collins mill.
III. THE ALLEGED UNFAIR LABOR PRACTICES
A. Issues
1. Whether Respondent is a successor company
to CM and E in the operation of the Fort Collins
feed mill.
2. Whether Respondent is obligated to recognize
and bargain with the Union as the representative of
its employees at the Fort Collins feed mill, and par-
ticularly whether the Union represents a majority of
Respondent's employees in an appropriate unit.
3. If so , whether Respondent is obligated to ad-
here to the terms and provisions of a collective-bar-
gaining agreement executed by the Union and CM
and E, and whether wage rates and other conditions
1173
of employment inaugurated by Respondent con-
stitute unilateral changes where they differ from
those contained in the Union -CM and E contract.
B. Statement of Facts
Respondent became the owner and operator of
an animal feed mill at Fort Collins , Colorado, on
July 1, 1968 . Prior to that time this mill was owned
and operated by the Colorado Milling and Elevator
Company . This Company is engaged in the flour
milling , feed milling , and grain elevator business.
As of May 28 , 1968, it had annual sales of about
125 million . The Fort Collins feed mill had sales of
about 2 - 1/4 million . In January 1968, CM and E
merged with Great Western Sugar Company. In the
spring of 1968 a decision was reached to dispose of
the Fort Collins mill along with other property.
Management of CM and E experienced difficulty in
finding anyone interested in purchasing this mill
and it planned to close the operation and junk the
property if a purchaser could not be found. Harold
Johnson , manager of the Fort Collins mill and a su-
pervisor and employee at this mill since 1945, en-
deavored to interest local persons and feed buyers
in the purchase of this property to continue it as an
outlet for feed products and to preserve his job and
those of the employees.
Respondent is an investment company involved
in banking , ranch ownership , oil interests , a swine
operation , and development of properties. It was a
purchaser of feed products from the Fort Collins
mill for its swine operation . In June 1968, Respon-
dent submitted a bid for this property which as to
fixed assets was more than 50 percent below book
value. A sale was consummated and Respondent
commenced operations on July 1, 1968.
At the time of the sales, CM and E was and is
now a party to a collective -bargaining agreement
with the Union , effective from July 16, 1967,
through July 15 , 1970. When the contract was ex-
ecuted it covered approximately 800 employees at
niine flour mills, two feed mills, and five elevators.
By this contract CM and E recognized the Union
as the sole collective -bargaining agent for its
production and maintenance employees , excluding
employees in other recognized bargaining units,
temporary employees, supervisors , clerical em-
ployees , laboratory employees , buyers , salesmen,
guards, and watchmen at designated plants includ-
ing the Fort Collins feed mill. The contract lists
each plant as a separate bargaining unit , and there
are appendixes to the contract which specify the
job classifications, hourly wage rates, starting times,
overtime assignments , and holidays for the em-
ployees in the Fort Collins unit. The contract terms
were negotiated in Denver , Colorado, by a
representative of the International Union and CM
and E 's labor relations director.
The contract has a union -security provision
requiring membership in the Union on the 45th day
following the beginning of employment , and pro-
vides for checkoff of initiation fees and union dues.
1174 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
At the time of the sale of the Fort Collins feed mill,
all of the production and maintenance employees
were members of the Union and their union dues
were being checked off monthly.
By letter dated June 4, 1968 , CM and E informed
the Union that the mills at Fort Collins, Colorado,
and at three other locations were being closed.
Severance pay and accrued vacation pay were paid
to employees in accordance with the terms of the
collective-bargaining agreement . Employees were
advised as to conversion privileges and procedure
in view of cancellation of their group life insurance,
and as to any vested rights they may have accrued
under the Company 's pension plan.
At the time of the changeover , CM and E had 25
production and maintenance employees at Fort
Collins . General Manager Johnson interviewed
each or most of these employees in June and of-
fered employment to all but seven ( Bauer , Baczko,
Burns, Schreiner , Schwindt , Wilson , and Rice). He
discussed with each his job assignment , wage, and
other conditions of employment . Wage rates were
set by Johnson on an individual basis and he was
not guided by the rates specified in the Union-CM
and E contract . All wage rates with the exception
of that of Howard Kechter , whose job assignment
was changed from lift operator to warehouse super-
intendent , were generally lower than the rates paid
them by CM and E.
The 18 production and maintenance employees
of CM and E that were hired by Respondent were
assigned the same positions they had previously
occupied except for 5-W. Dinkel was changed
from mixer helper to formula feed mixer
C. Schneider was changed from mixer helper to
supervisor and elevator operator ; D. Miller was
changed - from warehouseman to elevator man;
R. Strouch was changed from warehouseman to
lift operator ; and H . Kechter was changed from
lift operator to warehouse supervisor . Between
July 1 and September 13, 1968 , Respondent
added five new employees and contemplated
adding eight additional employees in late September
1968, to cover an additional shift.
Supervision remained substantially the same; in
fact , the continuation of Johnson as plant manager
was a consideration in Respondent's acquisition of
the mill . Besides Johnson as general manager, C.
Strauch continued as plant superintendent , W. Neel
was changed from assistant plant superintendent to
pallet mill operator , R. Stoll was changed from
assistant manager of the elevators to grain broker,
and F . Scarpella who had been assistant manager of
the mill was not employed by Respondent. Also,
the office force remained substantially the same.
Respondent produces essentially the same
products as CM and E at the Fort Collins mill, and
the mill is operated in substantially the same
manner as it was under CM and E . Respondent now
purchases its own grain , whereas previously this
was done by the grain department of CM and E in
Denver . Trade name and trade marks used at the
Fort Collins mill were included in the sale . Over 75
percent of the customers of the CM and E at the
Fort Collins mill are continuing to buy feed
products from Respondent.
Holidays for Respondent 's employees are the
same as under CM and E except that Respondent
does not give the one holiday that each employee
may choose . Selection of employees for overtime
work had been by seniority ; under Respondent it is
governed by agreement between the employees and
the plant superintendent since there is no carryover
of seniority from CM and E . The employee health
plan with CM and E terminated with the sale of the
Fort Collins mill, but Respondent had provided a
similar plan . Under CM and E vacations were grad-
uated in length based on seniority ; under Respon-
dent each employee gets 2 weeks . Under CM and E
there was a retirement plan, and under Respondent
there is none . However , CM and E 's retirement
plan is not a part of its collective -bargaining agree-
ment . The same is true of CM and E 's group life in-
surance program ; all of its employees , union and
nonunion , can participate in these programs.
David Page , a vice president of CM and E, was
the chief administrative officer in the Ranch-Way
Division of that Company with offices in Denver,
Colorado . The Denver office was responsible for
overall management , long-range commitment poli-
cies, grain positions , quality control , and labor rela-
tions at the Fort Collins mill.
By the contract of sale , paragraph 13, Respon-
dent assumed the rights and duties of CM and E in
contracts between it and certain of its customers.
Respondent also, by paragraph 10, assumed all
obligation and responsibilities placed upon a
warehouseman by the State of Colorado with
respect to stored grain on hand . By paragraph 14 of
the contract of sale , it was specified that Respon-
dent would not be responsible for any acts of CM
and E prior to date of closing of sale.
By letter dated July 15 , 1968, the Union notified
Respondent that it expected its contract with CM
and E to remain in full force and effect at the Fort
Collins mill . By letter dated August 5, 1968, from
Respondent 's attorney, the Union was informed
that he had advised Respondent that it was not
bound by the labor agreement between the Union
and CM and E; that it did not appear that the
Union represented a majority of Respondent's em-
ployees ; and that since the Union had filed a
charge, the matter may be resolved within the con-
text of that proceeding.
Since the sale, the employees of the mill have not
continued in active participation in Local 170;
there have been no union meetings and the em-
ployees have paid no dues, although the officers of
the local have forwarded dues for the employees to
the International Union out of the local's treasury.
William Schilling , president of Local 170 , testified
that no meetings have been held because of the
RANCH -WAY, INC. 1175
lack of interest in the Union; that he would prefer
not to have the Union as his representative; and
that approximately 90 percent of the employees
have similarly expressed themselves to him.
C. Conclusions
The Board has held that where a union is a
recognized bargaining agent of a majority of em-
ployers in an appropriate bargaining unit and the
employer discontinues the operation of its plant or
business and another company commences the
operation of a business at the same plant producing
substantially the same products with substantially
the same employees, he must continue to recognize
and bargain with their bargaining representative.2
I find that all production and maintenance em-
ployees of Respondent at the Fort Collins mill and
elevator, excluding temporary employees, office
clerical employees, laboratory employees, buyers,
salesmen, guards and watchmen and supervisors as
defined in the Act, constitute a unit appropriate for
the purposes of collective bargaining.
Respondent's position is that it had a good-faith
doubt that the Union represented a majority of its
employees and that, in fact, the Union did not
represent a majority of them. This is based prin-
cipally on the facts that no union meetings were
held after July 1, 1968, no employee paid union
dues thereafter, and, as testified to by the president
of the local union, 90 percent of the employees had
expressed themselves as no longer interested in
having the Union as their bargaining representative.
There is no evidence of any unfair labor practice by
Respondent other than the alleged refusal to recog-
nize and bargain with the Union.
The counsel for General Counsel stated that no
official records of the Board exist as to a certifica-
tion of the Union, but that an informal card record
in Region 27 of the Board indicates that an election
was held and a certification issued to the Union in
1949; but it is not shown whether the election was
on a single-plant basis or otherwise.' Nevertheless,
CM and E has recognized and dealt with the Union
as the bargaining representative of the production
and maintenance employees at the Fort Collins
mill, and at least the last contract required mem-
bership in the Union as a condition of employment
and provided for a checkoff of union dues on em-
ployee authorization. It is on these facts, plus CM
and E's record of dues checked off and transmitted
to the Union, that the General Counsel relies to
establish majority. This is traditionally adequate
proof of the existence of majority status and the
majority status is presumed to continue in the
absence of cogent evidence to the contrary. I find
that cogent evidence to the contrary exists.
It seems tremendously significant in the instant
case that after the employees' relationship with CM
and E ended, no employee tendered his dues to the
Union and there was not enough interest in the
Union for the local to hold meetings. Union
representation for the Fort Collins employees had
its inception in 1949; this mill was part of a large
complex of mills; and membership in the Union was
required by contract; the election in which these
employees participated may or may not have been
on a single-plant basis. As soon as CM and E sold
its Fort Collins mill and this mill was no longer in
the CM and E complex, the employees manifested
a disinterest in the Union as their bargaining
representative by discontinuance of dues payments
and union meetings and by verbal expressions. This
was the case although under Respondent their wage
rates and other benefits were less. Under these cir-
cumstances I find that Respondent was warranted
in asserting a doubt as to the Union's majority
status. A collective-bargaining relationship contem-
plates the volition of the employees.'
The collective-bargaining contract between CM
and E and the Union relates to various of its mills
and initially covered 800 employees. The Fort Col-
lins mill with 25 employees was a very small part of
that enterprise, and operating as a separate business
would necessarily cause some differences in expen-
ses and procedures. Respondent did not assume the
CM and E-Union contract and I find that it is not
enforceable as to Respondent.
Respondent inaugurated a pay scale different
and generally lower than that paid by CM and E. If
the Union were the bargaining representative of its
employees, Respondent would be obligated to
discuss these and other conditions of employment
with the Union prior to their inauguration. Having
found that it has not been,established that the Union
represented a majority of Respondent's employees,
I find that Respondent was under no obligation to
discuss these matters with the Union.
CONCLUSIONS OF LAW
1. Respondent is engaged in commerce within
the meaning of Section 2(6) and (7) of the Act.
2. The Union is a labor organization within the
meaning of Section 2(5) of the Act.
3. Respondent has not engaged in an unfair
labor practice violative of Section 8(a)(1) and (5)
of the Act.
RECOMMENDED ORDER
It is recommended that the complaint be
dismissed.
L Maintenance, Incorporated, 148 NLRB 1299, Glenn Goulding,
d/b/a Feed Mart, 165 NLRB 202
3 David Page , who was manager of CM and E's Ranch-Way Division
prior to the sale, testified that he was not employed by CM and E when the
election was held involving the Fort Collins mill but that ( by knowledge ap-
parently gained by hearsay from others) the initial CM and E election was
not on a single -plant basis and that later elections were There is no
evidence as to which category the Fort Collins mill belongs
Mitchell Standard Corporation, 140 NLRB 496 , Haysworth Roll and
Pane! Company , 130 NLRB 604, The Randall Company , Division of Tex-
tron , Inc , 133 NLRB 289