Shares, Inc.

National Labor Relations Board - Board Decisions

Oct 29, 2004

343 N.L.R.B. 455 (N.L.R.B. 2004)

SHARES, INC.
343 NLRB No. 59
455
Shares, Inc., WAP, Inc., and WAP, LLC, a single em-
ployer1 and International Union, United Auto-
mobile, Aerospace and Agricultural Implement
Workers of America, UAW. Case 25–CA–28771
October 29, 2004
DECISION AND ORDER
BY MEMBERS SCHAUMBER, WALSH, AND MEISBURG
On June 15, 2004, Administrative Law Judge Keltner
W. Locke issued the attached decision. The Respondent
filed exceptions, a supporting brief, and a reply brief.
The General Counsel and Charging Party filed separate
answering briefs. The General Counsel filed limited
exceptions.
The National Labor Relations Board has delegated 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 and has decided to
affirm the judge’s rulings, findings, and conclusions,2
and to adopt the recommended Order and notice as modi-
fied and set forth in full below.
ORDER
The National Labor Relations Board adopts the rec-
ommended Order of the administrative law judge as
modified and set forth in full below and orders that the
Respondents, Shares, Inc., WAP, Inc., and WAP, LLC, a
single employer, Shelbyville, Indiana, its officers, agents,
successors, and assigns, shall take the action set forth in
the Order.
1. Cease and desist from
(a) Failing and refusing to recognize and bargain with
the International Union, United Automobile, Aerospace
and Agricultural Implement Workers of America, UAW,

1 The Respondent has not excepted to the judge’s finding that
Shares, Inc., WAP, Inc., and WAP, LLC constitute a single employer.
Accordingly, we amend the case caption, the recommended Order, and
the notice to employees to include Shares, Inc., WAP, Inc., and WAP,
LLC, a single employer, as Respondents in this matter. We have also
modified the judge’s recommended Order and notice to more closely
reflect the violations found herein.
2 We adopt the judge’s finding that the appropriate unit is comprised
of: “all production and maintenance employees of Shares, Inc., who are
engaged in the manufacture of glow plugs at the 705 Mausoleum Road,
Shelbyville, Indiana facility, EXCLUDING all office and clerical em-
ployees, guards, professional employees, and supervisors as defined in
the Act.” We also affirm the judge’s conclusion that the Respondent
had hired a substantial and representative complement of its workers on
April 28, 2003. In general, the Board finds an existing complement to
be substantial and representative when approximately 30 percent of the
eventual employee complement is employed in 50 percent of the job
classifications. Yellowstone International Mailing, 332 NLRB 386
(2000). Here, the Respondent employed on April 28, 2003, 11 employ-
ees, or 61 percent of its eventual compliment of 18, in 100 percent of
the ultimate job classifications.
as the exclusive representative of its bargaining unit em-
ployees.
(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) Recognize and bargain in good faith with the Union
as the exclusive collective-bargaining representative of
the employees in the following appropriate unit:
All production and maintenance employees of Shares,
Inc., who are engaged in the manufacture of glow plugs
at the 705 Mausoleum Road, Shelbyville, Indiana facil-
ity, EXCLUDING all office and clerical employees,
guards, professional employees, and supervisors as de-
fined in the Act.
(b) Within 14 days after service by the Region, post at
their facilities in Shelbyville, Indiana, copies of the at-
tached notice marked “Appendix B.”3 Copies of the no-
tice, on forms provided by the Regional Director for Re-
gion 25, after being signed by the Respondents’ author-
ized representative, shall be posted by the Respondents
immediately upon receipt and maintained for 60 con-
secutive days in conspicuous places including all places
where notices to employees are customarily posted.
Reasonable steps shall be taken by the Respondents to
ensure that the notices are not altered, defaced, or cov-
ered by any other material. In the event that, during the
pendency of these proceedings, the Respondents have
gone out of business or closed the facilities involved in
these proceedings, the Respondents shall duplicate and
mail, at their own expense, a copy of the notice to all
current employees and former employees employed by
the Respondents at any time since April 28, 2003.
(c) Within 21 days after service by the Region, file
with the Regional Director a sworn certificate of a re-
sponsible official on a form provided by the Region at-
testing to the steps that the Respondents have taken to
comply.
APPENDIX B
NOTICE TO EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government

3 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 BOARD456
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.
WE WILL NOT fail and refuse to recognize and bargain
collectively with International Union, United Automo-
bile, Aerospace and Agricultural Implement Workers of
America, UAW.
WE WILL NOT in any like or related manner interfere
with, restrain, or coerce you in the exercise of the rights
guaranteed you by Section 7 of the Act.
WE WILL recognize and bargain with the International
Union, United Automobile, Aerospace and Agricultural
Implement Workers of America, UAW as the exclusive
representative of the employees in the following appro-
priate unit:
All production and maintenance employees of Shares,
Inc., who are engaged in the manufacture of glow plugs
at the 705 Mausoleum Road, Shelbyville, Indiana facil-
ity, EXCLUDING all office clerical employees,
guards, professional employees, and supervisors as de-
fined in the Act.
SHARES, INC., WAP, INC., AND WAP, LLC, A
SINGLE EMPLOYER
Michael Beck, Esq. and Frederic D. Roberson, Esq., for the
General Counsel.
J. Lee Mcneely, Esq. and Stephen Schrumpf, Esq. (McNeely,
Stephenson, Thopy & Harrold), of Shelbyville, Indiana, for
the Respondent.
Richard J. Swanson, Esq. (Macey Swanson and Allman), of
Indianapolis, Indiana, for the Charging Party.
BENCH DECISION AND CERTIFICATION
STATEMENT OF THE CASE
KELTNER W. LOCKE, Administrative Law Judge. I heard this
case on May 3 and 4, 2004, in Indianapolis, Indiana. After the
parties rested, I heard oral argument, and on May 6, 2004, is-
sued a bench decision pursuant to Section 102.35(a)(1) of the
Board’s Rules and Regulations, setting forth findings of fact
and conclusions of law. In accordance with Section 102.45 of
the Rules and Regulations, I certify the accuracy of, and attach
as “Appendix A,” the portion of the transcript containing this
decision.1 The Remedy, Conclusions of Law, Order and notice
provisions are set forth below.
Appropriate Unit
As discussed in the bench decision, Respondent is a not-for-
profit corporation which employs and trains individuals with
disabilities. When one of its customers went bankrupt, Re-
spondent decided to buy this customer’s machinery and to be-
gin manufacturing one of this customer’s products: Glow plugs
for diesel engines.
Respondent hired 11 employees to perform this manufactur-
ing and began making glow plugs on Monday, April 28, 2003.
Of the 11 employees making glow plugs, 7 had been doing
similar work for the customer on April 25, 2003, and another 3
had previously worked for this customer before being laid off.
These employees made the glow plugs on the equipment
which Respondent had purchased from the customer, Wellman
Automotive Products, Inc., which remained at the Wellman
facility. In the bench decision, I found that these 11 workers
constituted a substantial and representative complement, and
that on April 28, 2003, Respondent became a successor to
Wellman pursuant to NLRB v. Burns Security Services, 406
U.S. 272 (1972).
For 4 months, these employees continued to make glow
plugs at Wellman’s former factory, located at One Progress
Road in Shelbyville, Indiana. About September 1, 2003, Re-
spondent moved these glow plug employees to a new facility at
705 Mausoleum Road, Shelbyville, Indiana,
At the time they moved to the Mausoleum Road facility,
these bargaining unit employees were the only production and
maintenance employees who worked there. In January 2004,
Respondent began another operation, sometimes called “Ryobi
Die Cast,” in the same building. This new operation brought
about 40 employees to the Mausoleum Road facility.
The Ryobi Die Cast employees do not make glow plugs but
rather sandblast, polish, and deburr parts produced by die cast-
ing. Although working in the same building, the glow plug
employees and the Ryobi Die Cast employees are in separate
divisions. The glow plug employees work in a for-profit divi-
sion of Respondent, but the Ryobi Die Cast employees work in
a not-for-profit division. (About 30 percent of the Ryobi Die
Cast employees have disabilities.)
The glow plug employees and the Ryobi Die Cast employees
work under different supervisors and are paid different hourly
rates.
Two glow plug employees have transferred to other divisions
of Respondent, but the record suggests that no glow plug em-
ployee has transferred permanently into the Ryobi Die Cast
Division. One glow plug employee did transfer to the Ryobi

1 The bench decision appears in uncorrected form at pp. 432 through
456 of the transcript. The final version, after correction of oral and
transcriptional errors, is attached as appendix A to this Certification.
Uncontradicted evidence establishes that Shares, Inc. created WAP,
Inc. and WAP, LLC, for accounting and tax purposes, to separate its
for-profit operation from its nonprofit divisions. The record further
establishes that neither WAP, Inc. nor WAP, LLC has any employees
and that Shares, Inc. is the employer of the employees at issue in this
proceeding. I have amended the case caption accordingly.
SHARES, INC. 457
operation but then transferred back. Respondent’s general
manager, James Leugers, testified that “we haven’t had people
come from the Ryobi Die Cast to work on the glow plugs.”
Considering that the Ryobi Die Cast employees and the glow
plug employees work in different divisions for different wage
rates and with different supervisors, and further considering
that there has been no significant transfer of employees be-
tween the two divisions, I conclude that these two groups of
employees do not share a community of interest.
Additionally, considering that only the glow plug employees
work in a for-profit division of Respondent, and that all other
employees of Respondent except the Ryobi Die Cast employees
work at different locations, and further considering that the
glow plug employees are separately supervised and receive
different compensation, I find that the glow plug employees do
not share a community of interest with any other employees of
Respondent.
However, they do share a community of interest with each
other. Therefore, I find that the following employees constitutes
a unit appropriate for collective bargaining within the meaning
of Section 9(b) of the Act:
All production and maintenance employees of Shares, Inc.,
who are engaged in the manufacture of glow plugs at the 705
Mausoleum Road, Shelbyville, Indiana facility,
EXCLUDING all office clerical employees, guards, profes-
sional employees, and supervisors as defined in the Act.
For the reasons stated in the bench decision, I conclude that
Respondent has an obligation to bargain with the Union as the
exclusive representative of the employees in this unit.
REMEDY
Having found that the Respondent has engaged in certain un-
fair labor practices, I find that it must be ordered to cease and
desist and to take certain affirmative action designed to effectu-
ate the policies of the Act, including posting the notice to em-
ployees attached as “Appendix B.”
Further, I recommend that the Board order Respondent to
recognize and bargain with the Union as the exclusive represen-
tative of the employees in the unit described above.
CONCLUSIONS OF LAW
1. Shares, Inc., WAP, Inc., and WAP, LLC constitute a sin-
gle employer, herein called Respondent.
2. Respondent is an employer engaged in commerce within
the meaning of Section 2(2), (6), and (7) of the Act.
3. The Charging Party, International Union, United Auto-
mobile, Aerospace and Agricultural Implement Workers of
America, UAW, is a labor organization within the meaning of
Section 2(5) of the Act.
4. The following employees constitute a unit appropriate for
collective bargaining within the meaning of Section 9(b) of the
Act:
All production and maintenance employees of Shares, Inc.,
who are engaged in the manufacture of glow plugs at the 705
Mausoleum Road, Shelbyville, Indiana facility,
EXCLUDING all office clerical employees, guards, profes-
sional employees, and supervisors as defined in the Act.
5. Since April 28, 2003, the Charging Party has been the ex-
clusive representative, within the meaning of Section 9(a) of
the Act, of the employees in the unit described in paragraph 4,
above.
6. Respondent violated Section 8(a)(5) and (1) of the Act by
failing and refusing to recognize and bargain with the Charging
Party as the exclusive representative of the employees in the
unit described in paragraph 4, above.
7. The unfair labor practices described in paragraph 6,
above, are unfair labor practices affecting commerce within the
meaning of Section 2(6) and (7) of the Act.
8. Respondent did not engage in any unfair labor practices
alleged in the complaint not specifically found herein.
[Recommended Order omitted from publication.]
APPENDIX A
BENCH DECISION
This decision is issued pursuant to Section 102.35(a)(10) and
Section 102.45 of the Board’s Rules and Regulations. I find
that Respondent violated Section 8(a)(5) and (1) of the Act as
alleged in the Complaint.
Procedural History
This case began on June 26, 2003, when the International
Union, United Automobile, Aerospace and Agricultural Im-
plement Workers of America, UAW filed its initial charge in
this proceeding. For brevity, I will call this labor organization
the “Union” or the “Charging Party.” On November 25, 2003
and on February 27, 2004, the Union filed amended charges.
On October 21, 2003, after an investigation, the Regional Di-
rector of Region 25 of the National Labor Relations Board
issued a Complaint and Notice of Hearing. On March 30,
2004, the Regional Director issued an “Amended Complaint
and Notice of Hearing,” which I will refer to simply as the
“Complaint.”
In issuing and amending this complaint, the Regional Direc-
tor acted on behalf of the General Counsel of the Board, whom
I will refer to as the “General Counsel” or as the “government.”
The Complaint caption identified the Respondent as follows:
“Shares, Inc. and its alter egos WAP, Inc. and WAP, LLC
and/or Shares, Inc., WAP, Inc. and WAP LLC, a single em-
ployer.” The Complaint alleged that this Respondent had vio-
lated Section 8(a)(5) and (1) of the National Labor Relations
Act (the “Act”) by failing to recognize and bargain with the
Union as the exclusive representative of an appropriate unit of
Respondent’s employees. Respondent filed a timely answer
denying these unfair labor practice allegations.
On May 3, 2004, a hearing in this matter opened before me
in Indianapolis, Indiana. On May 3 and 4, 2004, the parties
presented evidence, and on May 5, 2004, counsel gave oral
argument. Today, May 6, 2004, I am issuing this bench deci-
sion.
Admitted Allegations
In its Answer, Respondent has admitted the allegations
raised in Complaint paragraphs 1(a), 1(b), 1(c), 2(d), 2(e), 2(h),
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD458
2(i), 2(j), 3(a), 3(b), and 4, and I find that the government has
proven these allegations.
More specifically, I find that the Union filed and served the
charge and amended charges as alleged. Further, I find that at
all material times, Shares, Inc., which I will call “Shares,” has
been an employer engaged in commerce within the meaning of
Section 2(2), (6) and (7) of the Act.
Additionally, I find that about May 8, 2003, Shares created
Respondent WAP, Inc. as its wholly owned subsidiary, and that
about June 30, 2003, Shares created Respondent WAP, LLC, a
limited liability company, as its wholly owned subsidiary.
Shares has admitted, and I find, that General Manager James
Leugers and Production Supervisor Danny McCoomas are its
supervisors and agents within the meaning of Sections 2(11)
and 2(13) of the Act, respectively.
I also find that at all material times, the Charging Party has
been a labor organization within the meaning of Section 2(5) of
the Act. Similarly, I find that at all material times, a local un-
ion affiliated with the Charging Party, Local Union No. 1793,
United Automobile, Aerospace and Agricultural Implement
Workers of America, UAW, has been a labor organization
within the meaning of Section 2(5) of the Act.
Background
Shares is a not-for-profit corporation which operates a num-
ber of industries to employ and train individuals with disabili-
ties. It receives funding from the State of Indiana to perform
this educational function.
Apart from government funding, Shares supports its activi-
ties by selling the products made by its workforce, which con-
sists of employees with disabilities, called “consumers,” and
other employees who are called “staff.” The staff assist and
train the employees with disabilities and sometimes these “con-
sumers” progress enough to become staff. The products they
make include die cast aluminum parts, DNA child identification
kits, and glow plugs for diesel engines. This case concerns the
employees who make the glow plugs.
A glow plug serves much the same purpose in a diesel en-
gine that a spark plug serves in a gasoline engine. There is,
however, a significant difference between the two plugs. Al-
though a spark plug must continue to fire as long as the gaso-
line engine is running, a glow plug has easier duty. When an
operator turns on the diesel engine, the glow plug ignites the
fuel initially, but once the engine is running, the fuel/air mix-
ture ignites by itself when the piston compresses it. Respon-
dent sells many of its glow plugs to the United States military
for use in Humvees.
Until about March 9, 2003, Shares did not manufacture glow
plugs. Another company, Wellman Automotive Products, Inc.
(“Wellman”) made the glow plugs and then sent them to Shares
for inspection and packaging. The employees at Shares would
return the packages to Wellman for shipment to Wellman’s
customers. Shares charged Wellman a fee for this service.
The Union represented the Wellman employees who made
the glow plugs and other products, which included, at various
times, soldering irons, heating elements and furnaces. The
Union began representing the employees in this bargaining unit
after a Board-conducted election in 1972. At that time, the
bargaining unit employees worked for General Electric, which
later sold the facility to a predecessor of Wellman.
For three decades, the Union represented the employees in
this bargaining unit and negotiated collective-bargaining
agreements with their employer. The last of these contracts
was effective during the period April 29, 2000 to April 29,
2003.
As Wellman experienced financial difficulties, it stopped
making some products and sold the equipment to other compa-
nies. On about February 10, 2003, Wellman filed for bank-
ruptcy.
When Wellman declared bankruptcy, it was still producing
glow plugs. The bankruptcy court appointed Shares to oversee
this manufacturing process, which Wellman employees still
performed. Shares began this management function on March
9, 2003. The Wellman employees continued to work at the
same place as before, a plant located at One Progress Road in
Shelbyville, Indiana. I will refer to it as the “One Progress
Road” facility.
Also as before, after the Wellman employees manufactured
the glow plugs, they would ship them to Shares’ facility located
on Miller Street, in Shelbyville, Indiana. I will call it the
“Miller Street” facility. As before, Shares’ employees in-
spected the glow plugs, packaged them, and returned them to
the Wellman facility for delivery to customers.
This arrangement, with Shares’ management supervising the
Wellman workforce, continued from March 9, 2003 to ap-
proximately April 28, 2003. During this period, Shares also
took steps to buy Wellman’s machinery and lease its plant, so
that Shares could begin making and selling glow plugs.
Because Wellman was in bankruptcy, Shares needed ap-
proval from the bankruptcy court before it could consummate
this purchase. On April 25, 2003, the Hon. James K. Coachys,
Judge of the United States Bankruptcy Court, signed an order
authorizing the transaction.
After Wellman sold its equipment, of course, it could no
longer make glow plugs and had no reason to employ the peo-
ple who did this work. On about April 25, 2003, Wellman
discharged these employees. However, seven of them suffered
little if any loss of work. Shares hired these employees to con-
tinue making glow plugs with the same equipment in the same
plant. They were back at their machines on April 28, 2003.
Shares also hired three other Wellman employees who were
on layoff status but who possessed recall rights under the col-
lective-bargaining agreement. Based on General Counsel’s
Exhibit 2, an employee list, I find that on the day after Shares
began manufacturing glow plugs, 11 of its employees were
performing this work. As already noted, seven of the 11 had
been working in the Wellman bargaining unit the previous
week, and they continued the work they had been doing: Mak-
ing glow plugs to supply to the United States government.
General Counsel’s Exhibit 2, the list of glow plug production
employees at work on April 29, 2003, is consistent with the
testimony of General Manager James H. Leugers, who de-
scribed how many employees were engaged in making glow
plugs the previous day, April 28th. According to Leugers, 11
employees were making glow plugs on that day, and 7 of them
previously had worked for Wellman.
SHARES, INC. 459
Leughers added that on this same day, 25 Shares employees
were inspecting and packaging glow plugs. They were not
doing this work at the Progress Road location but rather at
Shares’ facility on Miller Street. At this point, therefore, noth-
ing had changed about where the work took place. Employees,
now working for Shares, continued to make glow plugs at the
Progress Road facility and other employees still inspected and
packed them at the Miller Street facility.
Also on April 29, 2003, the Union’s 3-year collective-
bargaining agreement with Wellman expired. As the represen-
tative of Wellman’s production employees, the Union had par-
ticipated in the bankruptcy proceeding and had learned about
Wellman’s sale of assets to Shares. On May 9, 2003, a repre-
sentative of the International Union, John Messer, sent a letter
to Shares General Manager James Leugers. This letter stated,
in part, as follows:
We have been informed through bankruptcy sale that
Shares Corporation has purchased Wellman Thermal
Automotive Systems.
A majority of the employees hired by Shares Corpora-
tion are former Wellman Thermal System Corporation
employees and members of the UAW Local 1793 bargain-
ing unit. As a successor to Wellman Thermal Systems
Corporation, Shares Corporation has an obligation to bar-
gain with the International UAW and its Local 1793 re-
garding the terms and conditions of employment at Shares
Corporation’s Shelbyville, Indiana location.
Please contact me at (317) 247-5515 to arrange a mu-
tually agreeable time to begin bargaining.
One of Shares’ attorneys, Stephen Schrumpf, replied by let-
ter dated May 22, 2003. This letter disputed that Shares was
Wellman’s successor and stated, in part, as follows:
I must decline your invitation, and notify you that the
Company will not recognize the U.A.W. I note in your
letter that you believe that Shares is a “successor” to the
former Wellman Thermal Systems, Inc. Please be advised
that Shares purchased only a portion of the assets of
Wellman Thermal Systems, Inc.
As you know, the assets were purchased in a bank-
ruptcy proceeding, and all creditors, including the U.A.W.,
are subject to the Orders issued by the Bankruptcy Court.
As a creditor, the U.A.W. actively participated in the
bankruptcy proceeding, and did not object to the sale of
certain assets to Shares . . . .
Accordingly, I would direct your attention to the Order
regarding the sale of assets to Shares. It is quite specific in
that Shares is not to be considered, in any regard, the suc-
cessor of Wellman . . . . As such, I believe this finding is
conclusive on the question of successorship . . . .
The record establishes that Shares has not, at any time, rec-
ognized or bargained with the Union. As already noted, the
Union filed its unfair labor practice charge in this matter of
June 26, 2003.
Meanwhile, Shares’ new business was increasing as man-
agement reached out to Wellman’s former customers and tried
to attract new customers as well. Gradually, Shares’ efforts to
cultivate a customer base succeeded.
It appears that Shares picked a good time to start making
glow plugs. When the United States invaded Iraq, Humvees
carried many of the troops, and these diesel-powered vehicles
could not start without glow plugs. Demand for the product
accelerated.
But in one sense, the growing market for glow plugs put
Shares in a somewhat awkward position. It was a not-for-profit
corporation, but making glow plugs was surprisingly profitable.
Unless Shares took steps to keep its non-profit and for-profit
operations distinct, the Internal Revenue Service might recon-
sider Shares’ tax-exempt status.
Shares’ management decided to address this problem by in-
corporating a for-profit subsidiary to manufacture the glow
plugs. Shares first created a Subchapter S corporation, WAP,
Inc. However, management then decided that it would be bet-
ter to operate the for-profit subsidiary as a limited liability
company, so Shares created WAP, LLC. to replace WAP, Inc.
It appears that the initials “W-A-P” refer to Wellman Auto-
motive Products but Wellman had no financial interest in these
companies. To the contrary, at all material times both WAP,
Inc. and WAP, LLC have been subsidiaries wholly owned by
Shares.
At hearing, Respondent left no doubt that Shares’ manage-
ment runs the glow plug operation and employs the workers
who make the glow plugs. The record establishes that neither
WAP, Inc. nor WAP, LLC employs any workers. Rather, these
employees work for, are supervised by, and receive their com-
pensation from Shares.
As already noted, 2003 was a boom year for glow plugs. To
meet the demand, Shares management located a site on Mauso-
leum Road in Shelbyville, equipped a plant, and moved the
glow plug production workers into it around September 1,
2003. The employees continued to do essentially the same
work—making glow plugs—but at this new location, which I
will call the “Mausoleum Road” facility.
The employees at the Mausoleum Road facility continued to
ship their product to the Miller Street location to be inspected
and packaged. Many of the workers performing these tasks
have disabilities which limit their work performance and Shares
classifies such employees as “consumers” rather than “staff.”
Management assesses the productivity of each “consumer”
and adjusts his or her pay rate based on this assessment. A
“consumer” who is less productive than a “staff” member with-
out a disability receives a lower hourly wage. The production
employees making glow plugs at the Mausoleum Road plant do
not have such disabilities and Shares does not classify them as
“consumers.” Additionally, Shares does not adjust the hourly
wage rates of these glow plug production employees as it does
for the “consumers” working at Miller Street.
At the time they moved into the new Mausoleum Road facil-
ity, the glow plug production workers were the first to work
there. Four months later, in January 2004, Shares placed other
workers in this same building. However, these latter employees
perform work related to die casting and generally are not in-
volved in glow plug manufacture.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD460
As of April 30, 2004—one year and two days after Shares
began manufacturing glow plugs—the number of workers en-
gaged in such production had grown from 11 to 19. The Gen-
eral Counsel asserts that Respondent has violated and continues
to violate the Act by failing and refusing to recognize the Union
as the exclusive collective-bargaining representative of these
employees.
The Analytical Framework
The Complaint presents several issues which must be re-
solved. The first, and simplest, concerns Respondent’s status
as an employer.
In the Complaint, the government alleges that Shares,
W.A.P., Inc. and W.A.P., LLC constitute a single employer or,
alternatively, that W.A.P., Inc. and W.A.P., LLC are alter egos
of Shares. Uncontradicted evidence makes these allegations
unnecessary. The record establishes that Shares created
W.A.P., Inc. and W.A.P., LLC as its wholly owned subsidiaries
for accounting and tax purposes, and that neither of these two
subsidiaries employs anyone. Both Shares’ attorney and man-
agement officials stated unequivocally that Shares alone is the
employer of the glow plug production workers. I so find.
The central dispute in this proceeding concerns whether
Shares has a duty to recognize the Union as the representative
of these employees. That question turns, in part, on whether
Shares is a successor to Wellman within the meaning of the
Supreme Court’s decision in NLRB v. Burns Security Services,
406 U.S. 272 (1972). Deciding that question requires consid-
eration of a number of factors.
A temptation sometimes arises to truncate the analytical
process and resolve the successorship issue simply by looking
at the workforce the purchaser hired into presumed bargaining
unit positions and then determining whether a majority of these
employees came from the seller’s bargaining unit. Although
such a calculation is important, it is not the whole story. To do
justice to the process—and to do justice with the process—it
may be helpful to begin with an overview of the legal princi-
ples.
In general, a “purchasing employer is required to recognize
and bargain with a union representing the predecessor’s em-
ployees when there is ‘substantial continuity’ of operations
after the transaction and if a majority of the new employer’s
work force, in an appropriate unit, consists of the predecessor’s
employees when the new employer has reached a ‘substantial
and representative complement’.” Dattco, Inc., 338 NLRB No.
7 (2002).
Some of these terms, however, need further clarification.
For example, to meet the definition of “purchasing employer,”
a company does not have to take over all of a predecessor’s
business. Similarly, an employer can become a Burns succes-
sor without continuing to employ all the job classifications in
the predecessor’s bargaining unit.
The Board has frequently found substantial continuity where
the successor employer has taken over only a discrete portion
of the predecessor’s heterogeneous bargaining unit. See Van
Lear Equipment, 336 NLRB [1059] (2001), citing Bronx
Health Plan, 326 NLRB 810 (1998), enfd. 203 F.3d 51 (D.C.
Cir. 1999); M.S. Management Associate, 325 NLRB 1154
(1998), enfd. sub nom. NLRB v. Simon DeBartelo Group, 241
F.3d 207 (2d Cir. 2001); Lincoln Park Zoological Society, 322
NLRB 263 (1996), enfd. 116 F.3d 216 (7th Cir. 1997); Louis
Pappas’ Homosassa Springs Restaurant, 275 NLRB 1519
(1985); and Stewart Granite Enterprises, 255 NLRB 569
(1981).
In labor law parlance, when the Board decides whether the
bargaining unit has survived the transition from seller to buyer,
it is making a “continuity determination.” In N.K. Parker
Transport, Inc., 332 NLRB [547] (2000), the Board summa-
rized this analytical process as follows:
In making a “continuity” determination, the Board looks to
whether (1) there has been substantial continuity of business
operations; (2) the new employer uses the same plant with the
same machinery, equipment and production methods; and (3)
the same or substantially the same employees are used in the
same jobs under the same working conditions and supervisors
to produce the same product or provide the same service.
This approach is primarily factual in nature and is based on a
consideration of the totality of the circumstances in any given
situation.
Following this analytical framework focuses the decision
process on the factors identified by the Supreme Court in Fall
River Dyeing [& Finishing] Corp. v. NLRB, 482 U.S. 27
(1987). The Board must consider
[W]hether the business of both employers is essentially the
same; whether the employees of the new company are doing
the same jobs in the same working conditions under the same
supervisors; and whether the new entity has the same produc-
tion process, produces the same products and has basically the
same body of customers.
Fall River Dyeing [& Finishing] Corp. v. NLRB, above, 482
U.S. at 41–43.
Moreover, to find that an employer is a Burns successor,
obliged to recognize and bargain with a union, there is one
other prerequisite. The affected employees must comprise a
unit appropriate for collective bargaining. For example, in the
Dattco decision, the Board reversed the administrative law
judge’s decision that the Respondent was a Burns successor.
“Although the judge analyzed most of the successorship fac-
tors,” the Board wrote, “he did not independently assess the
appropriateness of the unit.” The Board stressed that each case
must be addressed on its own facts. In this instance, the Board
concluded that the unique facts overcame the presumption that
a single facility bargaining unit was appropriate. Dattco, Inc.,
[supra at] 338 NLRB No. 7.
In considering these issues, I will address first the question
of continuity. Should I find that there was a substantial conti-
nuity of operations, I will go on to examine the bargaining unit
alleged in the Complaint to determine whether it is an appropri-
ate unit for collective bargaining within the meaning of Section
9(b) of the Act.
The Continuity Issue
In arguing that there has been no substantial continuity of
business operations, Respondent has not quite depicted the
SHARES, INC. 461
glow plug employees as a small lifeboat of survivors escaping a
sinking ship. However, its argument might be cast in such
terms. Rather than boarding the sinking ship, patching it up,
bailing out the water and continuing on to the ship’s intended
destination, Respondent simply salvaged some of the ship’s
equipment, took the survivors off the lifeboat and hired them to
help Respondent’s own ship get to Respondent’s chosen desti-
nation.
To buttress this argument, Respondent contends that even
before it hired the former Wellman employees, it was engaged
in its own glow plug manufacturing operation. After all, the
work done by the employees at Respondent’s Miller Road facil-
ity—inspecting the glow plugs and packaging them—is part of
the manufacturing process. In oral argument, Respondent’s
counsel noted pointedly that even a Union official had agreed
that manufacturing glow plugs includes inspecting and packing
them.
Thus, Respondent had already set sail to be a glow plug
maker so when it actually began making the glow plugs, using
Wellman’s former equipment and Wellman’s former employ-
ees, it was simply continuing on its own planned course, and
not on Wellman’s. Respondent’s counsel noted pointedly in
oral argument that Wellman had lost most of its glow plug cus-
tomers and, at the time Respondent hired the Wellman employ-
ees, they were finishing the last work for Wellman’s last cus-
tomer. In other words, Respondent contends that it built its
own glow plug manufacturing operation from scratch.
In terms of the lifeboat analogy, Respondent appears to be
arguing that the handful of Wellman employees did not bring a
business operation with them in the lifeboat. Instead, they
brought only themselves and, when they boarded Respondent’s
ship, they merged into Respondent’s large crew. This crew
outnumbered the Wellman survivors by a factor of perhaps 10
to 1, depending on exactly which crew members were counted.
Therefore, Respondent argues, there is no logical way to con-
clude that Wellman’s business operation continued.
Respondent’s argument is persuasive only to someone look-
ing at the facts from a certain viewpoint, the bridge of Respon-
dent’s ship. It does not have as much force when viewed from
other perspectives. During oral argument, in fact, Respondent
asserted that “The problem that General Counsel and Charging
Party have here is that they don’t want to look at this from the
perspective of how Shares runs their operation.”
At another point during oral argument, discussing the appro-
priate unit issue, Respondent stated as follows:
You don’t look at this case from the perspective of Wellman
and what was Wellman because Wellman ceased to exist, es-
sentially, on the 25th of April. Their bargaining obligation
expired on the 29th of April 2003. Their assets were sold on
the 28th of April 2003. Their employees were terminated on
the 25th of April 2003. Therefore, Wellman and its relation-
ship with the Union should not be the issue before us today.
The issue before us today is Shares. What was the Shares
corporation and what did the Shares corporation do which
brought this charge from the NLRB?
Notwithstanding Respondent’s invitation to view the facts
from its perspective, I must assume the vantage point mandated
by the Board and the Supreme Court. In Van Lear Equipment,
336 NLRB No. 114 (November 26, 2001), the Board quoted the
factors which the Supreme Court identified in Fall River Dye-
ing Corp., above, and then continued as follows:
These factors are assessed primarily from the perspective of
the employees, that is, “whether ‘those employees who have
been retained will . . . view their job situations as essentially
unaltered.’” [Fall River Dyeing Corp.] Id., quoting Golden
State Bottling Co. v. NLRB, 414 U.S. 168, 184 (1973).
Therefore, I will try to see the facts through the eyes of one
of the 7 employees who were working for Wellman on Friday,
April 25, 2003 and for Respondent on Monday, April 28, 2003.
On the worker’s last day of employment with Wellman, he
was making glow plugs using machines at a plant located at
One Progress Road in Shelbyville, Indiana. He left work that
day, a Friday, and returned on Monday to the same facility,
where he used the same machines to make the same product for
the same customer. Moreover, the same supervisors who had
been in charge of the process on Friday continued to supervise
it on Monday.
Thus, from the perspective of this employee, he and his fel-
low workers were doing the same jobs in the same working
conditions and under the same supervisors, using the same
production process to make the same product for the same cus-
tomer. Seeing the facts through this employee’s eyes, I would
conclude that all of the Fall River Dyeing criteria have been
satisfied.
As the Board stated in Harter Tomato Products Company,
321 NLRB 901 (1996), “When the employees work in the same
plant using the same equipment and production processes, con-
sideration of who technically owns the property used would not
likely influence the employees’ sense of continuity in the enter-
prises.”
It is true that several months later, Shares relocated the glow
plug employees to a new facility on Mausoleum Road, in Shel-
byville. However, this later move changes little. From time to
time, many employers relocate their facilities as their needs
change.
Having concluded that there has been a substantial continuity
of business operations, I will now consider the appropriate unit
issue. Respondent asserts that the former Wellman employees
had been integrated into a much larger operation and that a unit
consisting solely of these workers would be inappropriate. My
analysis will be guided by the following principles.
In Van Lear Equipment, above, the Board, citing New Brit-
ain Transportation Co., 330 NLRB [397] (1999), reiterated that
single-location units are presumptively appropriate. Addition-
ally, as the Board stated in Brown & Root, Inc., 334 NLRB
[628] (2001), “The issue is not whether a new unit consisting of
both of the Respondent’s work forces at CIBA would be appro-
priate, but whether the original unit remained a separate appro-
priate unit after the successorship took effect. e.g., Heritage
Park Health Care Center, 324 NLRB 447, 451 (1997), enfd.
159 F.3d 1346 (2d Cir. 1998).”
In the present case, the glow plug production employees con-
tinued to work for several months at the facility on Old Pro-
gress Road where they did not come into frequent contact with
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD462
Respondent’s other employees, who worked at other locations.
Because of their separate location, the glow plug production
employees did not have the same immediate supervisors as
other employees of Respondent.
Even when Respondent relocated these employees to the
new facility on Mausoleum Road, they continued to work apart
from other employees. Finally, in early 2004, another group of
Respondent’s employees also began working at the Mausoleum
Road plant, but they performed different work and had little
interchange with the glow plug employees.
Respondent contends that a unit of these glow plug produc-
tion workers, which excluded the employees who inspected and
packaged the glow plugs, would not be appropriate. However,
the latter employees work at a different location—the Miller
Street facility, under different supervision and different circum-
stances.
To a large extent, the employees performing the inspecting
and packaging work at the Miller Street location have disabili-
ties which affect their ability to work and the compensation
they earn. Respondent, acting as a not-for-profit organization,
employs these individuals to train them to be—to paraphrase
the words of Respondent’s counsel—productive members of
society. Thus, with respect to these individuals, whom it calls
“consumers,” Respondent’s goal is essentially educational.
On the other hand, the glow plug production employees who
worked first at One Progress Road and later at the Mausoleum
Road facility, do not need further training either in how to func-
tion in the workplace or how to perform their specific jobs.
Respondent does not modify their wage rates to compensate for
lower productivity and Respondent’s objective is not to train
them. Rather, with these workers, Respondent’s objective is to
make a profit.
Indeed, of all Respondent’s operations, this glow plug manu-
facturing line is the only one which Respondent runs to make a
profit. At a fundamental level, this fact makes the relationship
between management and the glow plug production employees
quite different from management’s relationship with other
workers. To most of its employees, Respondent’s supervisors
are teachers and mentors who spend government grants to cre-
ate a learning situation. To the employees on Respondent’s
for–profit glow plug manufacturing line, a supervisor is the
boss.
The unique status of the glow plug production employees
gives them a community of interest not shared by other work-
ers. Therefore, considering their separate work environment,
their separate supervision, the differences in compensation and
Respondent’s separate, for-profit objective in employing them,
I conclude that the collective-bargaining unit described in the
Complaint is an appropriate one for collective bargaining
within the meaning of Section 9(b) of the Act.
When Respondent began making glow plugs on April 28,
2003, it hired 11 employees to do the work. Seven of these
employees had been doing the same work for Wellman only 3
days earlier, and another three had worked for Wellman but
were on layoff status. Even disregarding these three laid-off
workers, the other 7 Wellman employees constitute a clear
majority of the 11-person bargaining unit.
One year and two days later, on April 30, 2004, Respondent
employed 19 persons to manufacture glow plugs. In other
words, the bargaining unit had grown from 11 to 19. Based
upon this rate of increase, I conclude that as of April 28, 2003,
Respondent already had hired a representative complement of
its workers.
In these circumstances, Respondent was a successor to
Wellman within the meaning of NLRB v. Burns Security Ser-
vices, 406 U.S. 272 (1972).
By letter dated May 9, 2003, the Union demanded that Re-
spondent recognize it as the representative of these employees
and engage in collective bargaining. Upon receipt of that de-
mand, Respondent had a duty to bargain. Its failure to do so
violated Section 8(a)(5) and (1) of the Act.
Respondent has argued that certain actions by the Bank-
ruptcy Court preclude the Board from finding that it is
Wellman’s successor and obligated to bargain with the Union.
I do not interpret the Bankruptcy Court’s actions and order in
that way.
As the General Counsel and Charging Party have pointed
out, Respondent’s bargaining obligation did not arise because it
purchased any of Wellman’s assets. Rather, the obligation
attached because it hired a number of employees who had been
working for Wellman in the collective-bargaining unit repre-
sented by the Union.
Respondent’s own action, unrelated to the transaction ap-
proved by the Bankruptcy Court, created the bargaining duty.
Therefore, I conclude that it does not fall within the scope of
the Bankruptcy Court’s order.
Additionally, Respondent may argue that it acted without no-
tice concerning Wellman’s relationship with the Union. How-
ever, as the General Counsel and Charging Party have pointed
out, such notice is not an element of the Burns successorship
doctrine.
When the transcript of this proceeding has been prepared, I
will issue a Certification which attaches as an appendix the
portion of the transcript reporting this bench decision. This
Certification also will include provisions relating to the Find-
ings of Fact, Conclusions of Law, Remedy, Order and Notice.
When that Certification is served upon the parties, the time
period for filing an appeal will begin to run.
I have greatly appreciated the professionalism and civility
shown by all counsel. The hearing is closed.