Ranch-Way, Inc.

National Labor Relations Board - Board Decisions

May 25, 1973

203 N.L.R.B. 911 (N.L.R.B. 1973)

RANCH-WAY, INC. 911
Ranch-Way, Inc . and American Federation of Grain
Millers, AFL-CIO . Case 27-CA-2555
May 25, 1973
SUPPLEMENTAL DECISION AND ORDER
BY CHAIRMAN MILLER AND MEMBERS JENKINS AND
KENNEDY
On June 26, 1970, the National Labor Relations
Board issued its Decision and Order I in the above-
entitled proceeding, finding that Respondent had en-
gaged in and was engaging in unfair labor practices in
violation of Section 8(a)(5) and (1) of the Act and
ordering that it cease and desist therefrom and, upon
request, bargain collectively with the Union as the
exclusive respresentative of all employees in an appro-
priate unit and honor and abide by the collective-
bargaining agreement executed by the Union and
Respondent's predecessor. The Board also ordered
Respondent to make the employees in the unit whole
for losses caused by Respondent's unilateral changes
in contractual provisions, in order to restore the status
quo ante. Enforcement of the Board's Order was
granted on June 24, 1971, by the United States Court
of Appeals for the Tenth Circuit.' Subsequently, Re-
spondent petitioned the Supreme Court of the United
States for certiorari, and following its decision in N.L.
R.B. v. Burns International Security Services, Inc., 406
U.S. 272, the Supreme Court granted Respondent's
petition, vacated the United States Court of Appeal's
decree, and remanded the proceeding to that court.
On September 18, 1972, the United States Court of
Appeals issued an order which set aside its earlier
decree and remanded the proceeding to the Board for
further consideration of the entire matter in light of
the Supreme Court's Burns decision.
On November 2, 1972, all parties were requested to
file with the Board statements of position with respect
to the effect of the Supreme Court's decision in Burns
on the issues in this case.
The General Counsel, the Union,' and the Respon-
dent each filed a statement of position which the
Board has duly considered.
Pursuant to Section 3(b) of the National Labor Re-
lations Act, as amended, the National Labor Rela-
tions Board has delegated its authority in this
proceeding to a three-member panel.
In the original decision in this case, the Board
'183 NLRB 1168.
Z 445 F.2d 625 (C.A 10, 1971).
3 The Union has requested oral argument . This request is hereby denied
because the statements of position adequately present the arguments of the
parties
found that Respondent had violated Section 8(a)(5)
and (1) of the Act by refusing to bargain collectively
with the Union, by refusing to abide by its
predecessor's collective-bargaining contract with the
Union, and by unilaterally changing the wages, work-
ing conditions, and other terms and conditions of
employment for employees of the Fort Collins, Colo-
rado, animal feed mill. In light of Burns, the finding
that Respondent violated Section 8(a)(5) and (1) by
refusing to adhere to the predecessor's collective-bar-
gaining contract cannot stand. Accordingly, this find-
ing is hereby rescinded. However, the Board adheres
to its other findings that Respondent violated Section
8(a)(5) by refusing to bargain with the Union on and
after July 15, 1968, and making certain unilateral
changes in working conditions on and after July 1,
1968, as set forth hereinafter.
The Board found in the original Decision that Re-
spondent was a successor-employer to Colorado Mill-
ing and Elevator Company (CME), which had been
recognizing the Union as bargaining representative of
employees at the Fort Collins, Colorado, animal feed
mill, inasmuch as Respondent used "substantially the
same facilities and work force to produce the same
basic products for essentially the same customers in
the same geographic area." Nothing in Burns requires
the Board to change this finding. Accordingly, we
affirm it.
Respondent, however, contends that it should be
excused from any obligation to bargain with the
Union on the ground that the General Counsel has
failed to demonstrate a reasonable probability of the
Union's continued majority status and, in any event,
its refusal to bargain was based on a good-faith doubt
concerning the Union's majority status. We reject
both arguments.
The Union had been certified as representative of
the Fort Collins mill employees in 1949. Thereafter,
the Union and CME had entered into successive col-
lective-bargaining contracts, the last of which prior to
Respondent's takeover of the Fort Collins mill was
expected to terminate on July 15, 1970. Pursuant to
the union-security clause in this contract, all the unit
employees of the mill were dues-paying members of
the Union at the time Respondent purchased and
began operations of the mill on July 1, 1968.
The certification of a union as bargaining
representative, absent unusual circumstances, creates
an irrebuttable presumption of continued majority
status during the year following certification .4 After
the certification year has elapsed, the certificate still
creates a presumption of majority status by the union,
but this presumption is rebuttable.' An employer may
Ray Brooks v. N L R.B., 348 U S 96, 98-99
' Celanese Corporation of America, 95 NLRB 664, 672.
203 NLRB No. 118
912 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
also lawfully refuse to bargain with the union after the
lapse of the certification year, if it can show by objec-
tive facts that it has a reasonable basis for believing
that the union has lost its majority since its certifica-
tion.6
In the earlier decision in this case, the Board held
that since the successor was bound by its
predecessor's collective-bargaining contract, the for-
mer, no more than the latter, could question the
Union's majority status during the life of the contract.
The Board also held, however, that the evidence and
the arguments of Respondent were insufficient either
to rebut the presumption of continued majority status
arising from the earlier certification of the Union and
its continuous representative status or to support
Respondent's claim of good-faith and reasonably
based doubt of that majority on July 1, 1968. Since
under Burns, a successor-employer is not bound by its
predecessor's collective-bargaining contract in the ab-
sence of an undertaking to that effect, the initial rea-
son set forth above for rejecting Respondent's
challenge to the majority status of the Union on and
after July 1, 1968, is no longer valid and is withdrawn.
However, the other reason stated by the Board, name-
ly, lack of evidence to rebut the presumption of the
Union's majority or to support Respondent's claim of
"good faith and reasonably based doubt" of that ma-
jority is still valid and we rely on it in finding that
Respondent unlawfully refused to bargain with the
Union on and after July 1, 1968. On that date the
employees were members of the Union in good stand-
ing. It was not until October or November 1968, long
after Respondent's refusal to bargain, that the presi-
dent of the Union's local was informed by most of the
unit employees that they no longer wished to be repre-
sented by the Union. Although the local union presi-
dent also testified that following the June checkoff for
union dues by CME, unit employees had not tendered
any additional dues to the local, there is no evidence
that Respondent was aware of the cessation of dues
payments and, consequently, there is no basis for in-
ferring that it relied on this fact in withdrawing recog-
nition from the Union?
The August 5 letter from Respondent's attorney to
the Union in which he expressed doubt of the Union's
majority standing gave no reason to support the ex-
pression. General Manager Johnson, who was in day-
to-day contact with employees, did not indicate that
at the time of the takeover he was aware of any loss
6 United States Gypsum Company, 157 NLRB 652, 655; Celanese Corpora-
tion of America, supra
r Moreover , the cessation of dues payments is not necessarily indicative
of a desire for cessation of union representation " . (M)any employees are
content neither tojom the union nor to give it financial support but to enjoy
the benefits of its representation ." Terre!! Machine Company v N L. R.B , 427
F.2d 1088, 1099 (C.A 4).
of support for the Union. He testified that President
Bixler answered the Union's demand for recognition
without any advice from him. Bixler did not testify as
to any doubts he might have had as to the Union's
majority standing or to any basis therefor. Attorney
Cochran who wrote the August 5 letter to the Union
did not testify at all. The record thus will not support
a finding that Respondent had any reasonable basis
in fact for believing that the Union had lost its majori-
ty when it rejected the Union's request for bargaining.
In Burns, the Supreme Court held that in the ordi-
nary situation a successor-employer is free unilateral-
ly to set initial terms on which it will hire the
employees of a predecessor, since, until the successor-
employer has hired his full complement of employees,
it may not be clear that the union represents a majori-
ty of employees in the unit. However, the Court also
stated that:
[T]here will be instances in which it is perfectly
clear that the new employer plans to retain all of
the employees in the unit and in which it will be
appropriate to have him initially consult with the
employees' bargaining representative before he
fixes terms.
The General Counsel contends that there is suffi-
cient evidence to justify a finding that Respondent
planned to retain virtually all of the unit employees
and consequently Respondent violated Section
8(a)(5) when it set initial terms and conditions of em-
ployment for its predecessor's employees without bar-
gaining with the Union.' We do not agree.
CME employed 25 production and maintenance
employees at the Fort Collins mill. In June, General
Manager Johnson interviewed most of these employ-
ees and offered jobs to 18 of them. In making his
offers, he discussed with each employee his pros-
pective job assignment and the wages that would be
paid. The offer of wages was on an individual basis
and was for wages generally lower than those fixed in
the CME contract. Only those employees who accept-
ed the offered wage rates were hired. This is not there-
fore a case where "it is perfectly clear that the new
employer planned to retain all of the employees in the
unit." Hence, Respondent was privileged unilaterally
to set the initial terms on which it would hire employ-
ees for its operation and, by so doing, Respondent did
not violate Section 8(a)(5) and (1) of the Act.
However, by July 1, 1968, Respondent had com-
pleted hiring its work force which on that date consist-
ed of 18 employees, all of whom had formerly worked
for CME. Under the teaching of Burns, Respondent's
obligation as a successor to CME was thereby trig-
s Howard Johnson Company, 198 NLRB No 98, and Good Foods Manufac-
turing & Processing Corporation, Chicago Lamb Packers, Inc -Division, 200
NLRB No. 86, where the employers taking over the predecessor's business
hired virtually all of the predecessor's employees
RANCH-WAY, INC. 913
gered. Its position on that date was akin to that of an
employer confronted with a newly selected bargaining
representative. It was not free thereafter to establish
or change conditions of employment for unit employ-
ees without bargaining with the Union.
When CME notified the Union in June 1968 that
it was closing the Fort Collins mill, it also indicated
that the existing collective-bargaining contract and
the benefits provided therein would terminate with
the plant closure. Thus it made severance and accrued
vacation payments to the terminated employees in
accordance with contract terms. It also advised the
employees of vested rights which they might have
accrued under the company pension plan and life
insurance conversion privileges and procedure in view
of the cancellation of their group life insurance. When
General Manager Johnson interviewed the former
CME employees for possible employment with Re-
spondent, he discussed only wage rates with them. He
did not discuss fringe benefits, either those in effect at
CME or those that Respondent might establish.
Fringe benefits cannot therefore be considered as
having been included in the initial terms on which
Respondent agreed to hire the former CME employ-
ees. About 2 weeks after Respondent had completed
the hiring of its work force, and its obligation to bar-
gain with the Union had accrued, Respondent called
a meeting of employees and informed them for the
first time of the seniority, vacation, and health bene-
fits it would extend to employees. This was done with-
out notice to or negotiation with the Union which was
then the majority representative of the employees. We
find that, by instituting these fringe benefits for em-
ployees without bargaining with the Union, Respon-
dent 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 em-
ployed at Respondent's Fort Collins, Colorado, mill
and elevator, excluding temporary employees, office
clerical employees, laboratory employees, buyers,
salesmen , guards, watchmen, and supervisors as de-
fined in the Act, constitute a unit appropriate 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 representative 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. By unilaterally instituting , some 2 weeks after
takeover , certain terms and conditions of employment
affecting employees in the appropriate unit without
first bargaining with the Union, Respondent has en-
gaged 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 rep-
resentative of all its 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.
6. The aforesaid unfair labor practices are unfair
practices affecting commerce within the meaning of
Section 2(6) and (7) of the Act.
THE REMEDY
Having found that Respondent has engaged in un-
fair 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 col-
lectively with the Union as the exclusive representa-
tive of all employees in the appropriate unit. In the
original Decision, the Board also ordered Respondent
to make unit employees whole for monetary losses
caused by Respondent's unilateral changes in the
CME contractual provisions. However, under Burns,
Respondent was not required to adhere to the provi-
sions of that collective-bargaining contract. CME no-
tified the Union of the cancellation of the contract as
of the end of June, paid employees for accrued vaca-
tion time, and informed them of any rights they might
have as terminated employees under the Company's
pension, health, and welfare plans. Respondent at no
time indicated to the Union or the employees express-
ly or by implication that it would continue in effect
the benefit provisions of the CME contract. In fact,
the implication was to the contrary since Respondent
lawfully established wage rates for newly hired em-
ployees which were different from, and generally low-
er than, the wage rates prescribed in the CME
contract. Thus, the employees cannot be said to have
suffered ascertainable monetary losses as the result of
Respondent's subsequent unlawful conduct in estab-
lishing nonwage employee benefits without bargain-
914 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
ing with the Union . Accordingly, there is no longer a APPENDIX
basis for prescribing a make-whole remedy.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor Rela-
tions Board hereby orders that the Respondent,
Ranch-Way, Inc., Fort Collins, Colorado, its officers,
agents , successors , and assigns , shall:
1. Cease and desist from:
(a) Refusing to bargain collectively concerning va-
cation, overtime, health insurance benefits, and other
terms and conditions of employment with American
Federation of Grain Millers, AFL-CIO, as the exclu-
sive bargaining representative of employees in the ap-
propriate unit found above, by failing to recognize the
Union as the majority representative of such employ-
ees or by unilaterally establishing terms and condi-
tions of employment.
(b) In any like or related manner interfering with,
restraining, or coercing employees in the rights guar-
anteed 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.
(b) Post at its jobsite in its Fort Collins mill and
elevator copies of the attached notice maked "Appen-
dix." 9 Copies of said notice, on forms provided by the
Regional Director for Region 27, after being duly
signed by Respondent's representative, shall be post-
ed by Respondent immediately upon receipt thereof,
and be maintained by it for 60 consecutive days there-
after, in conspicuous places, including all places
where notices to employees are customarily posted.
Reasonable steps shall be taken by Respondent to
insure that said notices are not altered, defaced, or
covered by any other material.
(c) Notify the Regional Director for Region 27, in
writing, within 20 days from the date of this Supple-
mental Decision and Amended Order, what steps Re-
spondent has taken to comply herewith.
9 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 read "Posted Pursuant to a Judgment
of the United States Court of Appeals Enforcing a Order of the National
Labor Relations Board."
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 bargain
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 employees
employed at Respondent's Fort Collins, Colo-
rado, mill and elevator, excluding temporary
employees, office clerical employees, laborato-
ry employees, buyers, salesmen, guard, watch-
men, and supervisors as defined in the Act.
WE WILL NOT establish terms and conditions of
employment for our employees in that unit with-
out first notifying, consulting, and bargaining
with the above-named Union conerning such
changes.
WE WILL NOT in any like or related manner in-
terfere with, restrain, or coerce the employees in
the exercise of their right to self-organization, to
form, join, or assist unions, to bargain collective-
ly through representatives of their own choosing,
to engage in concerted activities for the purposes
of collective bargaining or other mutual aid or
protection, or to refrain from such activities, ex-
cept to the extent 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 represent-
ative of all employees in the appropriate 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 consecutive
days from the date of posting and must not be altered,
defaced, or covered by any other material.
RANCH-WAY, INC. 915
Any questions concerning this notice or compli- Board's Office, Room 260, U.S. Custom House, 721
ance with its provisions may be directed to the 19th Street, Denver, Colorado 80202, Telephone 303-
837-3551.