Southern California Stationers

National Labor Relations Board - Board Decisions

Feb 9, 1967

162 N.L.R.B. 1517 (N.L.R.B. 1967)

- ,SOUTHERN'CALIFORNIAlSTATIONERS') L,,-_^2 .1517
4. We find, in accordance with the -stiphlatioli of • the parties, that
the following employees of the Employer constitute a unit appropri-
ate for the purposes of collective bargaining within the meaning of
Section 9 (b) of the Act.
All crew members of the MV Dominator, excluding the skipper,
owner, part owners, and supervisors as defined in the Act.
[Text of Direction of Election olnitted from publication.]6
6 An election eligibility list , containing the names and addresses of all the eligible voters,
must be filed by the Employer with the Regional Director for region 21 within 7 days
after the date of this Decision and Direction of Election The Regional , Director shall
make the list available to all parties to the election , No extension of time to file this list
shall , be granted by the Regional Director except in extraordinary circumstances . Failure
to comply with this requirement shall be grounds for setting aside the election whenever
proper objections are filed Excelsior Underwear Inc , 156 NLRB 1236
Southern California 'Stationers ; Wallace Printing Co. and Book-
binders & Bindery Women's Local No. 63-63A, International
Brotherhood of Bookbinders , AFL-CIO: Case 21-CA-6650.
February 9, 1967
DECISION AND ORDER
On September 22, 1966, Trial Examiner Maurice M. Miller issued
his Decision in the above-entitled proceeding, finding that Respond-
ents had not engaged in the unfair labor practices alleged in the com-
plaint and recommending that the complaint be dismissed, as set forth
in the attached Trial Examiner's Decision. Thereafter, the General
Counsel filed exceptions to the Decision and a supporting brief.
Pursuant to the provisions of Section 3 (b)' of the National Labor
Relations Act, as amended, the National Labor Relations Board has
delegated its powers in connection with this case to a three-member
panel [Chairman McCulloch and Members Jenkins and Zagoria].
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 brief, and the entire record
in the case, and hereby adopts the findings, conclusions, and recom-
mendations of the Trial Examiner.
[The Board adopts the Trial Examiner's Recommended Order dis-
missing the case.]
162 NLRB No. 146.
1518 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
DECISION OF THE TRIAL EXAMINER
STATEMENT OF THE CASE
Upon a charge and amended charge filed April 22 and August 19, 1965,
respectively , and duly served, the General Counsel of the National Labor Rela-
tions Board caused a complaint and notice of hearing to be issued and served
upon Southern California Stationers and Wallace Printing Co., designated as
Respondent Stationers and Respondent Wallace, respectively , within this Decision.
The complaint was issued September 21, 1965; therein , both Respondents were
charged with unfair labor practices affecting commerce, within the meaning of
Section 8 ( a)(1), (3), and ( 5) of the National Labor Relations Act, as amended.
61 Stat . 136, 73 Stat . 519. Within Respondents' subsequently filed answer , certain
factual allegations set forth within the complaint were conceded ; both Respond-
ents, however , denied the commission of any unfair labor practice.
Pursuant to notice , a hearing with respect to the issues was held at Los Angeles,
California , on November 9, 1965 , before Trial Examiner Maurice M. Miller. The
General Counsel and Respondents were represented by counsel . Each party was
afforded 'a full opportunity to be heard , to examine and cross -examine witnesses,
and to introduce evidence pertinent to the issues. Since the hearing 's close , briefs
have been received from counsel for the General Counsel and Respondents; these
have been duly considered.
FINDINGS -OF- FACT
1. THE BUSINESS OF RESPONDENTS
Throughout the period with which this case is concerned , Southern California
Stationers was a California corporation , with its principal office and place of
business located within a building on' the comer of East Fourth and South
Clarence Streets, Los Angeles , California; the building has two addresses, 1498
East Fourth Street and 417 Clarence Street , respectively . There, Respondent
Stationers was engaged in business as a wholesaler of stationery , office supplies
and equipment , furniture, and design services.
Likewise , throughout the period with which this case is concerned , Wallace
Printing Co. was a California corporation which maintained its principal office
and place of business , within the particular building previously designated. There
it was engaged in the commercial printing business.
During the 12 -month period which ended April 1, 1965, Respondent Stationers,
while engaged in the normal course and conduct of its business operations, pur-
chased and caused to be delivered-to its Los Angeles place of business-goods
and materials valued in excess of $50 ,000, which goods and materials were trans-
ported to the designated place of business in interstate commerce , directly from
States of the- United States other than the State of California. Respondent
Wallace, while engaged in the normal course and conduct of its business opera-
tions during the 12-month period which ended March 1, 1965, produced goods
and performed services valued in excess of $50 ,000 for various customers within
the State of California engaged in nonretail business , each of which customers
makes sales or performs services , valued in excess of $50,000 annually , directly
to or for out-of-State business enterprises.
Upon the complaint 's jurisdictional allegations , which are conceded to be
correct , I find that both Respondent Stationers and Respondent Wallace were,
throughout the period with which this case is concerned , employers within the
meaning of Section 2(2) of the Act , engaged in commerce and business activities
which affect commerce within the meaning of Section 2(6) and (7) of the Act,
as amended . With due regard for those jurisdictional standards which the Board
presently applies-see Siemons Mailing Service , 122 NLRB 81, and related cases-
I find assertion of the Board 's jurisdiction in this case , with respect to both firms,
warranted and necessary to effectuate statutory objectives.
II. THE LABOR ORGANIZATION INVOLVED
Bookbinders and Bindery Women 's Local 63-63A, International Brotherhood
of Bookbinders , AFL-CIO, designated as the Complainant or Union within this
Decision , is a labor organization within the meaning of Section 2(5) of the Act,
as amended, which has admitted certain of Respondent Wallace's employees to
membership.
SOUTHERN CALIFORNIA STATIONERS 1519
III. THE UNFAIR LABOR PRACTICES
A. Issues
With respect to the several questions which this case raises, counsel for the
General Counsel and Respondents are substantially in concurrence, though Gen-
eral Counsel, within his brief, has stated the matters presented for Board determi-
nation with a somewhat greater degree of specificity. Within General Counsel's
brief, these questions have been summarized as follows:
1. Whether Respondents may be considered a single integrated employer,
within the meaning of the statute, for the purpose of collective bargaining.
2. Whether Respondents-when they closed part of their integrated business
without notice to, or bargaining with Complainant Union herein-violated
Section 8(a)(5) of the statute.
3. Whether Respondents-when they subcontracted Respondent Wallace's
printing work on hand, and thereafter subcontracted whatever new printing
orders Respondent Stationers received, to firms other than Respondent Wal-
lace, without notice to, or bargaining with Complainant Union herein-
violated Section 8(a) (5) of the Act, as amended.
4. Whether Respondents-when they failed to notify Complainant Union or
bargain concerning the effect, on workers within a certified bargaining unit,
of their decision to terminate Respondent Wallace's business operations and
subcontract printing work to other firms-violated Section 8(a) (5) of the
statute.
5. Whether Respondents-when they unilaterally terminated a portion of
their business and discharged the workers concerned-violated Section 8(a)
(3) of the Act, as amended.
With due regard for the circumstances under which Respondents Stationers and
Wallace,' jointly or severally, made the particular decisions and took the course
of action which General Counsel challenges, their counsel would have these ques-
tions answered negatively. His denials, with respect to each question, pose the
composite problem with, which this case will be concerned.
'B. Facts
'1. The relationship between Wallace Printing and Stationers
When this case was heard, Respondent Stationers had been in business for 28
years, approximately; the firm employed some 85 persons, within such job classi-
fications as salesmen , clerical workers, warehousemen, and drivers. Respondent
Wallace had been in business for approximately 12 years; before its withdrawal
from the commercial printing business-under circumstances which will be noted
within this Decision-the firm had 13 employees. Two of these, General Manager
Weiss and Plant Superintendent Castle, were supervisors; there was one clerical
worker. When necessary, Weiss functioned as the printing firm's part-time sales-
man. Respondent Wallace's production crew, within the period with which this
case is concerned, compassed one compositor, one letterpress operator, three offset
pressmen, one cutter, three bindery workers, and one shipping clerk.
a. Ownership and financial control
Throughout the period with which this case is concerned, Respondent Wallace,
before its dissolution under circumstances to be noted, was owned in equal shares
by Fred and Ebenezer Wallace. Further, before June 23, 1965, these brothers,
together with their sister, held all Respondent Stationers' stock; Fred Wallace,
however, was the designated firm's principal stockholder. (Certain changes which
became effective June 23, with respect to the Wallace family's stockholdings in
Respondent Stationers particularly, will be noted subsequently within this Decision.)
While a witness, Fred Wallace testified, without dispute, that Southern California
Stationers and Wallace Printing did not have identical boards of directors; the
number of common directors they may have had, however, was not developed for
the record.
1520 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
. b. Management , ^ . .
The General Counsel's complaint declares, and Respondents within their answer
concede, that, throughout the period with which this case is concerned, the cor-
porate officers of Respondents Wallace and Stationers were as follows:
Wallace Printing Southern California Stationers
Ebenezer Wallace-------- President__________________ Fred Wallace
None__________________ Vice President -------------- Ebenezer Wallace
Fred Wallace------------ Treasurer ------------------ Eleanore Journigan
Fred Wallace------------ Secretary__________________ Harry Vanstone
Concededly, Fred Wallace, together with his brother Ebenezer, made all necessary
business decisions for Respondent Stationers. In conducting the designated firm's
business, however, Fred Wallace held periodic management conferences, usually
weekly. Those summoned to confer, generally, included: Fred and Ebenezer Wal-
lace; Vern Valet, Respondent Stationers' general manager; Harry Vanstone,
Respondent Stationers' comptroller and secretary; Jerry Steinberger, sales manager
for Stationers; and Ben Weiss, Respondent Wallace's general manager. (General
Counsel contends that the record, considered as a whole, warrants a determination
that Weiss, throughout the period with which this case is ' concerned, concurrently
field the post of printing department manager for Respondent Stationers, while
serving as Respondent Wallace's general manager. Within 'a sworn prehearing
statement, which President Wallace concededly made and subscribed before a
Board representative, albeit in connection with a Board proceeding involving
Respondent Stationers which had no direct relation to the present matter, Respond-
ent Stationers' president had designated Weiss as that firm's printing department
manager. And, while a witness-when questioned regarding his prior statement-
Fred Wallace did concede its truth. When the statement was proffered for the
record, however, I received it first as proof, merely, that Respondent Stationers'
president had so designated Weiss when the statement was made. General Counsel
has requested consideration of the statement in question as Fred Wallace's admis-
sion, presumably binding upon both Respondents, regarding Weiss' service as
Stationers' printing department manager. Due consideration has persuaded me that
President Wallace's sworn prehearing statement may, properly, be considered sub-
stantive evidence, for whatever probative value it may have, with respect to Weiss'
place in Respondent Stationers' managerial hierachy. Hribar Trucking, Inc., 143
NLRB 327, 329, footnote 4, and cases therein cited; Ebasco Services Incorporated,
107 NLRB 617, 619-620, footnote 7; 3 Wigmore, Evidence § 1018 (3d ed. 1940).
4 Wigmore, supra, sections 1048, 1051. Caveat: President Wallace's statement,
though receivable as his admission, need not be considered conclusive with respect
to the truth of the matter dealt with therein; his further testimony, proffered by
way of explanation or qualification and calculated to minimize his prior statement's
probative worth, was received, and must be considered. 4 Wigmore, supra, sec-
tions 1058, 1059. My conclusion with respect to General Counsel's substantive
contention in this regard, particularly with reference to his claim that Respondent
Wallace's general manager, before that firm suspended business operations, con-
currently functioned as Respondent Stationers' printing department manager, will
be set forth, subsequently, within this Decision.) While a witness, President Wal-
lace testified, without contradiction, that, with respect to Respondent Stationers'
business operations, whatever services Weiss rendered were limited. So far as the
record shows, Respondent Stationers' art department personnel sometimes con-
sulted him regarding letterhead designs for their firm's stationery customers;
Respondent Stationers' sales manager and salesmen, further, consulted him with
respect to printing cost estimates for stationery or business forms, which the firm
sold. For such consultative services, so the record shows, Respondent Stationers
paid Weiss merely $100 per month. He was not covered by Stationers' pension
plan.
With respect to Respondent Wallace Printing, so the record'shows, the Wallace
brothers, throughout the period with which this case is concerned, did delegate
managerial responsibility to General Manager Weiss, subject to their general super-
vision. While a witness, Fred Wallace testified, credibly, that Weiss functioned
subject merely to a general mandate that he should maintain and operate the
printing plant profitably. (Consistent with this general delegation of responsibility,
I find, Weiss was fully authorized to hire and discharge personnel, determine wage
rates, sign major contracts with customers for printing services to be performed,
purchase new equipment, change the printing plant's physical layout, and set per-
sonnel policies.) While functioning pursuant to this broad grant of discretion, how-
SOUTHERN CALIFORNIA STATIONERS 1521
ever, Weiss was, so I find, required to provide Fred, Wallace with frequent reports;)
these normally compassed such' matters as monthly' financial- statements, reports,
on new hires, wage increases, and discharges'. Further, General Manager Weiss
functioning as Respondent Wallace's secretary and treasurer was required to con-
sult with Fred Wallace, particularly regarding any decisions which might call for
new equipment purchases or other capital expenditures. By way of summary, Fred
Wallace conceded that Wallace Printing's general manager, though free to conduct
his firm's day-to-day business operations with a large degree of discretion and
freedom to exercise independent judgment, was "controlled and supervised" by the
Wallace brothers since they had hired him and could terminate his services.
Harry Vanstone, Respondent Stationers' comptroller and secretary, likewise per-
formed services for both corporations and received a nominal salary from Respond-
ent Wallace; Respondent Stationers' 12 clerical workers, subject to his supervision,
maintained the books of record for both firms and provided bookkeeping, payroll
and billing services for both. (Payroll checks for Respondent Wallace's personnel
had to bear two signatures; those authorized to sign checks for the printing firm
were the Wallace brothers, General Manager Weiss, and Vanstone.) Vanstone,
however, received no coverage under Respondent Wallace's pension plan, or the
printing firm's health and welfare plan.
c. Functional integration
(1) Shared premises
Respondent Stationers and Wallace Printing have jointly occupied a 2-story
structure located on the corner of East Fourth and Clarence Streets, previously
mentioned , since they moved there approximately 8 years ago . During that period
with which this case is concerned , Stationers occupied the building 's two above-
ground floors; Respondent Wallace occupied some 30 percent of the building's
total basement space, with Stationers the remainder . Wallace Printing paid
Respondent Stationers rent for its space.
The building has three entrances ; so far as the record shows, there are single
entrances serving each street frontage , together with a so-called "back" door
which gives direct access to a parking lot. None of these entrances were, during
any relevant period, designated for required use by workers for either corporation.
(The building 's Fourth Street entrance , throughout the period with which we are
concerned , was marked with Respondent Stationers sign . Though the testimonial
record reveals a conflict , I find that another sign , which further designated the
building as Respondent Wallace's place of business , was posted at the Clarence
Street door .) Respondent Stationers ' workers, so the record shows, regularly used
all three doors. Wallace Printing employees , however, normally used the building's
rear door , since the so-called "front " and "side" doors with street frontage did
not provide a direct or convenient means of access to their basement place of
work.
Respondent Wallace's office was located within its leased basement space. The
firm's printing plant proper, which was separated from Respondent 's Stationer's
retained basement space with a concrete block wall , could only be entered through
Respondent Wallace's basement office quarters . The firms had separately desig-
nated plant spaces within which deliveries were received . Respondent Stationers'
deliveries , however, were received through all three building entrances ; Wallace
Printing received its deliveries through one, presumably the building's rear door.
(2) Shared services
Reference has previously been made to Respondent Stationer 's role in providing
bookkeeping , payroll, and billing service for Respondent Wallace; the record
shows that General Manager Weiss, presumably with some clerical help , normally
prepared the printing firm's basic payroll and billing data, which Comptroller
Vanstone 's clerical staff finally processed. Telephone calls for both Respondent
Wallace and Stationers were handled by Stationers ' telephone switchboard , though
both firms had "separate" telephones and telephone numbers. Common restroom
facilities were provided for the employees of both corporations.
(3) Integration of operations
Though salesmen for Respondent Stationers-throughout the period with which
this case is concerned-sold printed material , Stationers was neither staffed nor
264-047-67-vol. 162-97
1522 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
equipped to do printing work; Respondent's answer concedes that Wallace Printing
was initially established to perform part of the printing work which Stationer's
required. (Respondent Stationers' salesmen, so the record shows, solicited no
printing orders for Wallace Printing directly; most printing orders procured by
them, however, would normally be let or contracted by Stationers to Respondent
Wallace, provided the printing firm possessed whatever facilities might be required
to perform the work. When Stationers' salesmen procured orders which called for
printing services that Wallace could not provide, contracts for such work were
normally given to local commercial printing firms.) Though Respondent Wallace,
within the 5-year period which preceded its dissolution, managed to procure more
and more printing work from so-called "outside business customers, Respondent
Stationers was, throughout, the designated firms largest customer. Wallace Print-
ing's books of record show the relationship between that firms sales to Respondent
Stationers and its total sales as follows:
Year
Stationers'
purchases
Wallace's
direct sales Total sales
Percentage of
total sales to
stationers
1960------------------ $153, 992 00 $3, 607 00 $157,599 00 98
1961------------------ 162, 864. 00 44,388 00 207, 252.00 79
1962----------------- 156, 200 00 75,386 00 231, 586 00 67
1963----------------- 158, 985 00 95, 273 00 254,258 00 62
1964------------------ 194,281 03 103,090 55
297, 371.58 65
Reference has been made to the fact that Wallace Printing did not have the
requisite equipment to provide all types of printing service which customers of
Respondent Stationers required. While a witness, Fred Wallace testified that
Respondent Stationers, therefore, sometimes contracted printing work required to
fill its customers orders to local commercial printing firms; this was normally
work which Respondent Wallace, since it lacked the requisite machinery, could
not perform. (The present record gives no clue with respect to the proportion of
Respondent Stationers total printing sales which were thus contracted with other
firms. The data provided does show, however, that Respondent Wallace itself,
during the years from 1962 through 1964 specifically, had to further "subcon-
tract" some small part of the printing work which Respondent Stationers had
given it; the sums involved ranged from $15,863.84 to $25,595.86 per year.) By
way of summary: Wallace Printing's total sales revenue, within the 5-year period
noted, was, I find, divided as follows: some 72 percent derived from Respondent
Stationers' printing purchases; some 28 percent was derived from printing sales to
so-called "outside" commercial customers.
Testimony proffered in Respondents' behalf warrants a determination that
Respondent Wallace routinely prepared "bids" for whatever printing work Sta-
tioners proposed to purchase; that Wallace Printing normally charged Respondent
Stationers less for such work than so-called "outside" commercial printers would
have charged; that Stationers' preponderant reliance upon Wallace Printing for
printing service derived primarily from Respondent Wallace's maintenance of such
favorable price differentials. Thus conducted, Wallace Printing's business, so the
record shows, produced very little profit. While a witness, Fred Wallace testified,
without contradiction, that he took no compensation for his service as Respondent
Wallace's secretary and treasurer.
(4) Marks of separation
Further testimony proffered in Respondents' behalf, without contradiction,
shows that both corporations-throughout the period with which this case is con-
cerned-functioned pursuant to separate city licenses; were separately designated
for both State sales tax and Federal social security tax purposes; filed separate
social security reports and tax returns; carried separate workmen's compensation
coverage; maintained separate bank accounts, separate pension plans, and separate
health and welfare plans. Each corporation had its own purchasing agent; with
respect to their purchases of supplies and stock in trade they dealt, in the main,
with different suppliers. (While a witness, General Manager Weiss, conceded that
both firms may have purchased paper from the same suppliers. The record will
SOUTHERN CALIFORNIA STATIONERS 1523
not support a determination, however, that such purchases were coordinated.)
Previously, within this Decision, reference has been made to- Respondent Sta-
tioners' separate "receiving" department . With respect to deliveries , Respondent
Wallace likewise maintained separate facilities using its own truck and driver.
The two corporations did not exchange workers. With respect to personnel man-
agement , further, they pursued distinct policies. Each firm promulgated separately
prepared rules and regulations with respect to working conditions; the record war-
rants a determination that these rules and regulations did not have identical con-
tent. The firms had different working hours, Respondent Wallace's hourly rated
workers were required to punch a timeclock, while Stationers' employees were
not. Vacation policies differed. Respondent Wallace had no sick leave policy; fur-
ther, contrary to Respondent Stationers, Wallace Printing's management permitted
workers no coffee break away from their machines. Respondent Wallace's man-
agement, further, separately determined that firm's Christmas bonus policy. The
firm held its own, separate, employee meetings to discuss printing company prob-
lems. Though Respondent Stationers' clerical staff did maintain Wallace Printing's
payroll record and prepared payroll checks, such records and checks for the two
corporations were maintained separately. So far as the record shows, Respond-
ent corporations' employees did not mingle during either their working or free time.
d. Control of labor relations
Fred Wallace, together with his brother Ebenezer, concededly made Respondent
Stationers' business decisions. Functioning as Stationers' president, however, Fred
Wallace himself concededly set that corporation's personnel policies; the record
warrants a determination that, had Respondent Stationers negotiated a labor con-
tract during the period with which this case is concerned, President Wallace would
have been the management representative required to "approve" such commitments.
During Respondent Wallace's negotiation with Complainant Union herein-
which gave rise to the present case-two negotiators directly responsible to Fred
Wallace represented the printing firm. While a witness, Respondent Wallace's
secretary-treasurer conceded that he, personally, had attended some of the nego-
tiating sessions, though his brother, Ebenezer, nominally Wallace Printing's presi-
dent, had not; that Respondent Wallace's negotiators had provided him with
reports concerning those sessions which he had not attended; that the negotiators
had conferred with him regarding offers and counteroffers made at negotiating
sessions; that the negotiators had cleared such matters and received direction from
him; and that he would have been the management representative responsible for
signing any labor contract which the negotiations might have produced
When the negotiations did, finally, collapse following developments which I pro-
pose to discuss further within this Decision, Fred and Ebenezer Wallace, jointly,
made the decision to terminate Wallace Printing's business, dispose of its machin-
ery, and dissolve the corporation.
2. The contract negotiations
a. Background
Following a consent election, Complainant Union was certified by the Board's
Regional Director as the exclusive representative of Respondent Wallace's employ-
ees within a unit found appropriate for collective-bargaining purposes and defined
as follows:
All production and maintenance employees including shipping and receiving
employees and truck drivers, excluding all other employees including office
clerical employees, watchmen, guards, professional employees, and supervi-
sors as defined in the Act, as amended.
The certification was issued August 21,' 1964. Thereafter, beginning August 31,
approximately, representatives of Complainant Union met with Respondent Wal-
lace's spokesmen for some 13 contract negotiating sessions; these were held, gener-
ally, every 2 weeks. Complainant Union was represented by International Repre-
sentative Mitchell; he was assisted, normally, by two representatives of Los Angeles
Typographical Union, Local 147. Respondent Wallace's negotiators were Herschel
Green, the firms counsel, and Andy Forbis, who represented the Master Printers
Section of the Printing Industries Association; Fred Wallace, Wallace Printing's sec-
1524 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
retary and treasurer, sometimes "sat in" during the negotiations. So far as the
record shows, neither Respondent Wallace's president, Ebenezer Wallace, nor Gen-
eral Manager Weiss participated in these contract talks.
2. Developments leading to impasse
Sometime in September, shortly after these negotiations began, Complainant
Union proposed' that Respondent Wallace sign the so-called "standard area con-
tract" which various commercial printing firms within the Los Angeles area-
connected with the Union Employers Section of the Printing Industry group-had
previously signed. However, the negotiators for Respondent Wallace demurred.
Primarily, they contended that Wallace Printing did not really do general com-
mercial printing; that the firm's function was "specialized" since most of its work
was done for Respondent Stationers, servicing the latter's business customers; that
Wallace Printing gave Stationers a so-called "price break" whereby the stationery
firm was required to pay no more than "trade" prices for work performed; that
Respondent Wallace's profit margins, therefore, were low; and that the firm could
not, reasonably, be required to comply with the contractually fixed commercial
printshop wage scale for similar work. (With respect to Respondent Wallace's posi-
tion, Complainant Union's representative, Mitchell, testified credibly that Forbis,
when he described the relationship between Wallace Printing and Respondent Sta-
tioners, described the printing firm's function as a function performed, primarily,
for the "convenience" of Stationers' customers.) Complainant Union's spokesmen
however, contended that Respondent Wallace-regardless of the fact that most of
its work was performed to satisfy Stationers' customers-functioned within the
general commercial printing business.
When questioned regarding this divergence of viewpoint, particularly with refer-
ence to its significance in contract negotiations, Respondent Wallace's spokesman,
Forbis, testified credibly as follows:
We could not reach agreement with the union because the standard area con-
tract which they wanted from the company contained a Favored Nations
Clause. This clause, in essence says the union will not grant any more favor-
able terms and conditions to any competitively situated employer ... without
granting the same terms and conditions to the [firms] covered under that con-
tract. We had insisted that Wallace Printing Company was a specialized com-
pany . . . and not subject to the Favored Nations Clause . . . because of
the nature of the operation, and . we wanted to negotiate a special con-
tract with them, but the Union would refuse to do this.
Testimony proffered, without significant contradiction, in Respondents' behalf,
which I credit, warrants a determination that Forbis did detail Respondent Wal-
lace's business relationship with Stationers repeatedly during the negotiations, pur-
portedly to buttress the printing firm's contention that it really could not pay
"standard commercial" wage rates. The negotiator's testimony regarding this mat-
ter, capsulized, reads as follows:
By "specialized," I referred to the fact that they [Wallace Printing] got ap-
proximately 75 percent of their work from Southern California Stationers
And they got 25 percent of their work by soliciting it from the cus-
tomers that other printing plants would solicit from . . . The prices charged
[Southern California Stationers] by Wallace Printing Company were normally
less than those charged by a printing company doing straight commercial work
They [Wallace Printing] operated on a price break, because they got
business from Stationers .... Therefore, the profits of Wallace Printing Com-
pany were low. They could not afford to pay the standard commercial rates
being demanded by the union.
To support his client's position, further, Forbis provided Complainant Union
with copies of Wallace Printing's most recent financial statements. The printing
firm's profit and loss statement , for the fiscal year which ended November 30, 1964,
specifically, revealed that the firm had earned no more than $4,183 profit, after
taxes, on $297,371 gross sales. (Calculation reveals that Wallace Printing's net fis-
cal year profit, noted, reflected a 10.3% rate of return on the firm's $40,430.64
capital stock and surplus; the profit figure under consideration, however, repre-
sented no more than 1.4% of the firm's gross sales.) Financial statements for
Respondent Stationers, prepared for a comparable period, specifically, the firm's
1964 calendar year, reveal that $29,610 was lost on $3,772,267 gross sales.
SOUTHERN CALIFORNIA STATIONERS 1525
Confronted with this statement of company position, Respondent Wallace's
negotiator credibly testified, Complainant Union's spokesmen suggested that the
printing firm should consider a change in business policy:
The union said, go commercial 100%, up your prices, and go in competition
with the whole industry and forget about the fact that you are getting some
of the work from one company. Sell out in open competition with the entire
graphic arts industry. Charge the price, if you can get it, [secure the profit
margin on such commercial work] and go ahead and pay our rates.
Respondent Wallace, however, demurred. The Complainant Union was told that
the firm had operated too long with its present structure, and that no change was
contemplated with respect to the basic orientation of Wallace Printing's business.
Some time during this period of negotiation, the parties-with their bargaining
impasse over wage rates in mind-jointly petitioned the Union Employers Section
of the Printing Industries Association for a determination that Respondent Wal-
lace's business was, really, specialized; such a determination, clearly, would have
reflected a concession by these contractually bound firms that, should Wallace
Printing negotiate contract terms with Complainant Union less burdensome than
comparable provisions within the standard area contract, no claim for relief, pur-
suant to their contract's so-called Favored Nation clause would be made. The
response which the Union Employers Section proferred, however, was forth-
rightly negative. With respect thereto, Forbis testified as follows:
We had inquired from the union employers section as to whether or not this
company could be released or could be considered to be a special operation,
not a commercial printer, due to the method of operation. The various mem-
bers of the employer committee who negotiated that contract did not want
to see anyone have a better contract than they, and they felt that the union
was bound by the Favored Nations clause. [Emphasis supplied.]
With matters in this posture, Complainant Union's representative continued to
maintain that, since the Union Employers Section privy to his organization's stand-
ard area contract would not promise "relief" from that contract's so-called Favored
Nation clause, he would have to maintain' Complainant Union's position that the
master contract in question, realistically, provided the negotiators with their "only"
possible basis for settlement.
The record does show that there was discussion regarding the possibility-per-
mitted by the standard area contract's so-called Favored Nation clause-that
Respondent Wallace might be requested or permitted to sign a less burdensome
contract, limited to I year's duration, which would provide management with some
period during which business readjustments could be made, looking toward the
firm's delayed compliance with the so-called "standard area contract" thereafter.
Respondent Wallace's negotiators declared, however, that no such temporary con-
cession would solve their client's problem. (Spokesmen for Complainant Union
were provided with figures, based upon a comparison between Respondent Wal-
lace's then current wage schedule and relevant journeyman rates consistent with
the standard area contract, which revealed that the firm's yearly wage and vaca-
tion pay bill, following any so-called period of adjustment contract, would be
more than $24,000 greater;- Respondent Wallace's negotiators foresaw no pos-
sibility that their client, because of the nature of its business, would be able to
recoup or survive such cost escalation .) During their February 22, 1965 , bargain-
ing session , therefore, Respondent Wallace's spokesmen proffered, in written form,
their 3-year contract proposal, whereby printshop workers would receive 10 cents
more per hour, across-the-board, during the .contract's first year, plus further 8 cent
per hour raises during each of the 2 succeeding years; the printing firm's nego-
tiators further proposed to make the first year 's 10-cent raise effective as of
March 1, and to grant two additional half holidays, together with a modified vaca-
tion policy. Some time during the latter part of February, so International Repre-
sentative Mitchell testified, this contract offer was presented to Respondent Wal-
lace's workers; they rejected the proposal and voted to strike.
c. The strike
On March 2, 1965, Respondent Wallace's printshop workers-without having
given ' prior notice-struck. General Manager Weiss testified, without contradic-
tion, that they reported for work that day, prepared the shop presses, but walked
out some 10 minutes later. (Several witnesses were "not sure" whether the walkout
1526 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
took place on March 1 or 2; General Manager Weiss testified positively with
respect to the later date. I have credited his testimony.) The strike was completely
effective: only General Manager Weiss, Plant Superintendent Castle, and Respond-
ent Wallace's office clerk remained. Work in progress, within the shop, covered
some 300 orders Weiss and Castle, though they found "kind of a mess" within
the plant, which they had to clean, proceeded to cut, wrap, and ship whatever
printed materials were ready for shipment; further, they undertook to complete
required work on projects which they could handle. Plans, were made to subcon-
tract for completion the remainder of the printshop's work in progress
With matters in this posture, Fred and Ebenezer Wallace functioning as Re-
spondent Wallace's corporate officers, conferred regarding the printing firm's future.
Though no firm decisions were made, I find the brothers began to consider ter-
minating Wallace Printing's business. Fred Wallace instructed Green, Respondent
Wallace's negotiator, to notify Complainant Union's representatives, during their
next negotiating session, that the firm did not intend to maintain printshop opera-
tions, during the strike, except to ship work currently in progress which was ready
for shipment; that Respondent Wallace would not solicit new business; that the
firm's work on hand would be subcontracted; and, finally, that the Wallace brothers
would "probably" terminate printshop operations and liquidate the business
On March 4, the parties held their last bargaining session. It was short, lasting
no more than 15 minutes, and conducted under somewhat "strained" conditions.
The testimony of Forbis with respect to Respondent Wallace's stated position,
which I credit, reads as follows:
We entered the room and said, "We don't understand why you have struck
but it is a fact. You have these people out on the street. We want you to
know that you must accept the responsibility for them being there. You won.
You forced us out of business You have taken our employees We are not
going to make any attempt to operate the business. We are going to finish
up the work in process, and subcontract it or complete it as best we can. We
want you to officially know now that because we have no employees, and as
a direct result of the strike, that we [plan] to go out of business, salvage the
equipment, and not even . . . make an attempt to operate the company."
[Emphasis supplied.]
Some time during the brief discussion which followed, I find, Forbis asked whether
Complainant Union's representatives would "put these employees back to work"
pursuant to the terms of Respondent Wallace's last proposal. Mitchell, however,
replied negatively, countering with a statement that Complainant Unions repre-
sentatives were present to negotiate, and that they would willingly negotiate "all
day" for the purpose of solving their problems, should that be necessary. (Mitchell
could not recall a query by Forbis regarding Complainant Union's willingness to
have the men resume work on terms and conditions consistent with Respondent
Wallace's last previous proposal. Neither could Jones nor Cruz, ITU representa-
tives. Forbis' notes with respect to the discussion, which, I find, were contempora-
neously made, corroborate his testimony, however. Green's session notes, which
were likewise received in evidence, seem consistent with those made by ITU
Representative Cruz; both sets of notes, however, clearly reflect the notemakers'
recollection that some reference was made to Respondent Wallace's prior pro-
posal. With matters in this posture, Forbes' testimony has been credited.) Respond-
ent Wallace's negotiator, however, replied that Complainant Union's persistent
demand for the standard area contract left little to talk about that had not been
discussed in 13 previous sessions. He declared that he saw no further reason for
discussion, and proceeded to gather up his papers; the printing firm's negotiators
then left.
The record warrants a determination that this March 4 discussion reflected the
first definitive notice which Respondent Wallace gave Complainant Union regard-
ing any decision, to terminate printshop operations. While a witness, Fred Wallace
did testify that, during prior bargaining sessions, the union spokesmen had been
told that Respondent Wallace, from an economic standpoint, could not stand the
contract which Complainant Union had proposed, and could "possibly" wind up
matters by closing the plant since the firm would not stay in business just to lose
money. International Representative Mitchell, while a witness, conceded that such
representations had been made, but testified that he had considered them nothing
more than tactical gambits, common in collective-bargaining negotiations.
Considered as a whole, the testimonial record with respect to the March'4 ses-
sion further warrants a determination that Respondent Wallace did not, therein,
seek consultation or negotiations with Complainant Union regarding its manage-
SOUTHERN CALIFORNIA' STATIONERS 1527
ment's declared decision to subcontract the shop's work in progress, stalled by
Complainant Union's strike. (Mitchell, however, when confronted with notice of
the printing firm's decision in this regard, had not "specifically" protested.) Nor did
Wallace Printings management-directly or through negotiators-suggest any wil-
lingness to consult or bargain with Complainant Union regarding: (1) Its "plan"
to terminate printshop operations; or (2) the effect which such a plan, when
implemented, might have upon the firm's printshop workers. I so find
d. The decision to terminate the business
No further negotiating sessions have been held. The printing firm-through
the efforts of General Manager Weiss and Plant Superintendent Castle, specifi-
cally-did complete and ship some of the work on hand- the balance of the
firm's work in progress, however, was subcontracted for completion. Respondent
Wallace refused to accept further printing work; customers were notified, cate-
gorically, that it was discontinuing business.
Concurrently, Fred and Ebenezer Wallace, now functioning as Respondent
Stationers' president and vice president, respectively, decided that Stationers would,
despite Respondent Wallace's strike, continue to solicit and process printing work
for customers. Since March 2, 1965, such work has been performed-for the
stationery firm, pursuant to contract, by local commercial printing firms. (Some
of the work thus let pursuant to contract was work which Respondent Stationers
had routinely sent to so-called outside print shops previously; some, however,
concededly required work of a type which Wallace Printing had performed )
While a witness, President Wallace conceded that Respondent Stationers had not
consulted or bargained with Complainant Union concerning its poststrike decision
to contract out newly received printing orders to commercial printing firms other
than Wallace Printing; nor had Stationers consulted or bargained with Complain-
ant Union regarding the effect of that decision on Wallace Printing's workers.
On April 19, Respondent Wallace dispatched a letter, over President Ebenezer
Wallace's signature, to Complainant Union, which that organization received the
following day. In relevant part, the letter read as follows:
On March 4, 1965, during our last bargaining session, we advised your
representative, Mr. Boyd Mitchell, that following the calling of a strike by
your Union against this Company, we planned to temporarily close the opera-
tion involved. We have subsequently decided to permanently cease all opera-
tions of the Wallace Printing Company, and plans for disposition of assets
are now being formulated.
In view of these circumstances, there can obviously be no labor dispute
between Wallace Printing Company and your Union, inasmuch as there are
no employees who could be involved in such a dispute. Continued picketing
by your Union, therefore, would be a completely futile act as far as Wallace
Printing Company is concerned and not for the purpose of advertising any
existing labor dispute.
Southern California Stationers which always did obtain its printing from
many sources, including Wallace Printing, now only uses other sources since
Wallace Printing Company is no longer available as a source. The purpose
of your picketing could not be to advise the public or any employees that
Southern California Stationers are purchasing or using the products of a
company with which you have a labor dispute, particularly since such dispute
now no longer exists. Any picketing or harassment of Southern California
Stationers by your Union is completely unjustified . [ Emphasis supplied.]
On April 21, having received the letter quoted, Mitchell dispatched a reply letter
to President Ebenezer Wallace of Wallace Printing Company; the latter was
advised that his firm's 11 printshop workers, designated by name, were "willing
and able to unconditionally return to work" forthwith. Neither Respondent Sta-
tioners nor Wallace Printing, however, ever acknowledged receipt of Complainant
Union's letter; nor was any response proffered. By way of explanation, Respond-
ent's counsel declared, during the hearing, that since the printing firm had previ-
ously announced its decision to terminate business operations permanently, Com-
plainant Union's letter did not call for reply.
Concurrently with his April 21 letter, Complainant Union's representative had
prepared Board charges against Southern California Stationers and Wallace Print-
ing, jointly. These were filed with the Board's Regional Office on April 22; both
Respondents received the Regional Office's conventional mail notice regarding this
filing, together with copies of the charge, the following day.
1528 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
3. Subsequent developments
When the Wallace brothers decided to terminate their Wallace Printing business,
General Manager Weiss was directed to seek a buyer or buyers for the firm's
machinery and equipment. The general manager's testimony, which I credit in
this connection, reveals that he proceeded forthwith to publicize by word of
mouth-primarily within the printing trade-the fact that Wallace Printing's
machinery and equipment were available for purchase. For several weeks, so
Fred Wallace's testimony shows, the firm's general manager hoped to find a single
buyer. He was, however, required eventually to dispose of the firm's machinery
piecemeal, dealing with several buyers; these included both secondhand equipment
dealers and printshops. Some time during June 1965, Respondent Wallace com-
pleted disposal of its printing equipment and machinery. (The record is somewhat
vague regarding the speed with which Respondent Wallace's machinery was sold.
Fred Wallace testified that, when Complainant Union's April 21 letter was received,
some of the firm's equipment had been sold, though "most of it" was still in the
firm's basement printing plant. Respondent Wallace's general manager testified,
however, that "for the next month or so" following the strike the firm was busy
cleaning up work on hand, further, when queried directly regarding the firm's
disposal program, he testified that, "we proceeded to sell our equipment some time
in June." Considering the testimony as a whole, determination seems warranted
that, while some of the firm's machinery may have been sold before April 21,
the major portion of it was not sold until later, with the last of it going in early
June.) Meanwhile, Respondent Wallace's workers had, of course, received what-
ever pay was due them for work performed prior to their strike Following the
printing firm's April 19 declaration that its business operations would be termi-
nated, however, several workers raised questions regarding their right to claim
refunds with respect to sums which they had previously paid into Respondent
Wallace's retirement pension trust fund. (This fund, I find, had been created and
maintained, partially at least, through voluntary worker contributions So far as
the record shows, claims for refund, covering their contributions previously made,
were presented by some of the firm's workers directly or through the State Labor
Commission. Though the Complainant Union's spokesmen, presumably, knew
that pension trust 'refunds were being requested, nothing in the record would
warrant a determination that the union representatives were pressing such claims
for their members.) Refunds were made, directed to all Wallace Printing workers
covered under the firm's pension plan, pursuant to these requests. Complainant
Union, I find, played no role with respect to their procurement. Nor ones the
record show that union representatives sought to bargain, with either Respondent
Stationers or Wallace Printing, regarding any further rights or claims which
Respondent Wallace's workers, conceivably, could have asserted. (Weiss, on or
about April 1, had been formally designated Respondent Stationers' printing
department manager. And Respondent Wallace's plant superintendent, Castle, had
likewise been transferred to some position, not specified, on Stationers' payroll,
following the strike's commencement. None of Respondent Wallace's printshop
workers, however, were similarly proffered work with Respondent Stationers, fol-
lowing Complainant Union's April 21 notice-directed to Wallace Printing specifi-
cally-that they wished to return without conditions. So far as the record shows,
Stationers really had no positions which required the particular craft skills of
Respondent Wallace's displaced strikers.) Steps were taken, thereafter, to termi-
nate Wallace Printing's corporate existence. By September 21, 1965, the corpo-
ration had been formally dissolved.
On June 23, previously, 'the Wallace brothers, together with their sister, had
exchanged their Stationers' stock for Boise Cascade Corporation stock. Respondent
Stationers, thereby, became a wholly owned subsidiary of the corporation last
designated. Its corporate officers and directors resigned. Fred Wallace, however,
continued to serve as the stationery firm's general manager. On June 30, corporate
dissolution proceedings with respect to Stationers were commenced, presumably
so that the business could be reorganized and function as a division of its new
corporate proprietor.
When this case was heard, however; Respondent Stationers was still doing busi-
ness with its previously fixed corporate name; the firm's principal office and place
of business were still being maintained within the premises previously noted. In
his brief, Respondent's counsel reported that Respondent Stationers was, finally,
dissolved on November 24, 1965; though no stipulation for the record with respect
to this Respondent's dissolution has been proffered or suggested, I have no reason
to doubt the correctness of counsel's brief contained declaration.
SOUTHERN CALIFORNIA STATIONERS 1529
C. Conclusions
1: Respondent Stationers and Wallace Printing must be considered a
single functionally integrated firm for collective-bargaining purposes
Upon this record, Respondents contend that for purposes of statutory liability,
Wallace Printing and Respondent Stationers should be considered separate "inde-
pendent, unrelated" firms. Within his brief, Respondents' counsel notes, cogently,
that should such a determination be found warranted, the problem herein pre-
sented could be resolved summarily. In Textile Woikers Union of America v.
Darlington Manufacturing Co., 380 U.S 263, 58 LRRM 2657, the Supreme Court
declared, regarding the complete termination of a business, that:
We hold that so far as the Labor Relations Act is concerned, an employer
has the absolute right to terminate his entire business for any reason he
pleases. [Emphasis supplied.]
While discussing, inter alto, whether the Darlington closing could be considered
violative of Section 8(a)(1), the Court noted that violations of the section pre-
suppose a course of conduct which could properly be found in contravention of
statutory rights even without some discriminatory motive. With this in mind, the
Court observed that:
Whatever may be the limits of section 8(a)(1), some employer decisions are
so peculiarly matters of management prerogative that they would never con-
stitute violations of section 8(a)(1), whether or not they involve sound busi-
ness judgment, unless they also violated section 8(a)(3). Thus it is not
questioned in this case that an employer has the right to terminate his busi-
ness, whatever the impact of such action on concerted activities, if the decision
to close is motivated by other than discriminatory reasons.
Further, within a footnote, the Court declared it "clear that the ambiguous act of
closing a plant following the election of a union is not, absent an inquiry into the
employer's motive, inherently discriminatory." Addressing itself, ._ therefore, to
Section 8(a)(3) questions, the Court declared that:
A proposition that a single businessman cannot choose to go out of business
if he wants to would represent such a startling innovation that it should not
be entertained without the clearest manifestation of legislative intent or
unequivocal judicial precedent so construing the Labor Relations Act. We find
neither . . . . We hold here only that when an employer closes his entire
business, even if the liquidation is motivated by vindictiveness towards the
union, such action is not • an unfair labor practice . [Emphasis supplied.]
Should Respondent Wallace, therefore , be considered a single "separate" business,
there can be no doubt that the Supreme Court 's Darlington decision would require
the present case's dismissal ; whether discriminatorily motivated or not, termination
of the printing firm's business operations, without notice or consultation between
the firm 's management and Complainant Union herein , could not be considered
statutorily proscribed.
The Supreme Court, however, did note that a different conclusion with respect
to 8(a )(3) violations could, conceivably, be reached , within the context of some
proper record , should the terminated business be found to constitute part of some
larger enterprise . (Similarly, though the Court , within the decision now under
consideration , never reached the question , a different conclusion could certainly
be found warranted with respect to 8(a)(5) charges under such circumstances.
Cf. Fibreboard Paper Products Corp. v. N.L.R.B., 379 U.S. 203, which will be
reviewed , further, within this Decision .) Due consideration has persuaded me
that, based upon the present record , Respondent Stationers and Wallace Printing
should , indeed, be considered "integrated" firms with sufficient functional linkage
to merit treatment , despite their separate corporate status, as a single-business com-
plex, subject to whatever statutory obligations such related "single business" firms
must properly satisfy.
This Board has long since defined and substantially codified those "principal
factors" which it regularly weighs when deciding whether nominally separate con-
cerns are sufficiently integrated to warrant their treatment as constituting a so-called.
single employer for jurisdictional purposes . The principal factors which have nor-
mally been considered relevant , for the purpose noted , include the extent of:
(1) inter-relation of operations; (2) centralized control of labor relations; - (3)
common management; and (4) common ownership or financial control. No one of
1530 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
these factors has been held determinative with respect to jurisdictional determina-
tions, but Board decisions have stressed the first three factors, which tend to reveal
functional integration, particularly centralized control of labor relations. Sakrete
of Northern California, Inc., 137 NLRB 1220, enfd. 332 F.2d 902 (C.A. 9);
N.L.R.B. Twenty-First Annual Report, pp. 14-15, and cases therein cited.
No comparable detailed codification has, however, been proffered regarding
the principal factors which the Board considers when deciding whether separate
concerns are sufficiently related to merit single-employer treatment for liability
purposes, with consequent joint responsibility for statutory violations found. In Dear-
born Oil and Gas Corporation, et al., 125 NLRB 645, 647, the majority of a Board
panel has merely held that:
Generally speaking, in those unfair labor practice cases in which the Board
and the courts have held that a legal entity may be held for the acts of
another, because both constituted a single employer, it appeared that both
were not only subject to common control, but that a controlling ownership
interest in both companies was held by the same individual or group of indi-
viduals (cases cited). We believe that it is proper to require that both ele-
ments-common ownership and common control-coexist before we assess
joint responsibility. Any other rule would introduce into the administration
of the Act an element of guilt by "association" based upon the fortuitous cir-
cumstance of two respondents having common officers or agents. [Emphasis
supplied. ]
Further, within the decision to which reference is made, distinctions are drawn
between those factors which the Board will consider requisite to support "joint
responsibility" determinations, and those which it normally considers relevant when
requested to make "single bargaining unit" determinations in representation cases.
While conceding that when confronted with single bargaining unit contentions in
representation matters, the Board has sometimes found employees of two nominally
separate firms properly linked for collective-bargaining purposes, with closely
related firms considered a so-called single employer merely because they func-
tion under common management, despite their lack of full-fledged common owner-
ship, the decision now under consideration notes that, when treating unit issues
in representation cases, the Board is concerned with the degree of integration of
operations and community of interest among the employees sought to be repre-
sented rather than between their employers. The Board's panel majority observed
that, when workers for two "separate" concerns function subject to the same man-
agement, proof regarding such a situation tends to support a determination that
the requisite worker integration and community of worker interest are present,
their decision, however, reflects a refusal to consider "common management"
similarly conclusive with respect to the related but different question of one con-
cern's liability for another's statutory proscribed conduct. (Within his brief
Respondents ' counsel has discussed , inter alia, numerous representation cases
wherein this Board has reviewed those various factors which it considers relevant
when determining the propriety of combined "single employer" bargaining groups.
However, since 'consistently with the Board's Dearborn Oil & Gas decision such
cases cannot be considered really germane when so-called joint liability ques-
tions are presented, Respondents' reliance thereon must be considered misplaced.
See New England Web, Inc., et al., 135 NLRB 1019, 1037, in this connection.)
My review of several cases within which the Board has been required to consider
"whether'a legal entity may be held for the acts of another, because both consti-
tute a single employer" reveals, however, that when considering the presence or
lack of common ownership linked with common control both the Board and courts
have frequently noted proffered proof or lack of proof with respect to both physi-
cal and functional integration and centralized control of labor relations. N.L.R B.
v. Schnell Tool & Die Corporation, et al., 359 F.2d 39 (CA. 6). enfg 144 NLRB
385; N.L.R.B. v. Gibraltar Industries, Inc., et al., 307 F.2d 428 (C.A. 4), enfg.
133 NLRB 1527; Samuel B. Gass; Lipman Bros., Inc, et al., 154 NLRB 728. 60
LRRM 1021; Deerfield Screw Machine Products Company, et al., 140 NLRB 175,
176, enforcement denied 329 F.2d 558 (C.A. 6); New England Web, Inc., et al.,
135 NLRB 1019, 1026-27. Cf. Dearborn Oil & Gas Corporation, supra, particu-
larly the panel majority's reference therein to lack of proof regarding a claimed
"integration between the operations" of the several respondents, counled with the
majority's reference to centralized control of labor relations as both "frequently
stressed" and "crucial" with respect to findings of common control.
With matters in this posture-despite the Board's failure to detail, within a
single decision or codification of relevant decisional doctrine, whatever full range
SOUTHERN CALIFORNIA STATIONERS 1531
of factors it customarily weighs when deciding whether purportedly separate busi-
ness may be found jointly responsible for statutory violations-determination
seems warranted that such factors substantially parallel those which the Board
regularly considers when deciding whether separate concerns are sufficiently related
to merit "single employer" treatment for jurisdictional purposes.
The present record, considered with these previously listed criteria in mind, will
clearly support a determination that Respondent Stationers and Wallace Printing
constituted a single business entity, throughout the period with which this case is
concerned for statutory purposes.
The firms, certainly, were commonly owned, since the Wallace brothers held
"controlling ownership interests" in both; Fred Wallace, Respondent Stationers'
principal stockholder, held half of Wallace Printing's stock. (The Board, therefore,
has not been confronted with a situation in which one person or group of persons
holds a major "ownership" share with respect to but one of several purportedly
related firms, while possessed of nothing more than minority "ownership" shares
within other segments of such a putative business complex. Compare Dearborn
Oil & Gas Corporation, New England Web, Inc., and Deerfield Screw Machine
Products Company, supra, in this connection) Further, Fred and Ebenezer Wal-
lace shared the highest managerial posts within both corporations. Common
control, therefore, was necessarily present.
General Counsel's brief suggests that Respondent Stationers, potentially and
practically, possessed "considerable, if not total" control with respect to Wallace
Printing's business. My conclusion, that these firms, despite their separate corpo-
rate status, must be considered a single business for statutory purposes, requires,
however, no such determination. We need note, merely, that Fred and Ebenezer
Wallace because of their dominant "ownership" position with respect to these two
firms clearly possessed the capacity to control and did control both of them. Fred
Wallace, Respondent Stationers' president, testified, for example, that he con-
trolled Respondent Wallace's capital expenditures, and possessed the power of dis-
charge with respect to the latter firm's general manager.
The Wallace brothers, so the record shows, were responsible for the final deci-
sion which cut short Wallace Printing's corporate life; further, Fred Wallace,
functioning as Respondent Stationers' president and principal stockholder, must
necessarily be credited with responsibility for the decision which, before this case
was heard, made that firm Boise Cascade Corporation's subsidiary. These decisions,
which reflect the capacity of both Fred Wallace and his brother to decide basic
questions of corporate life and death, confirm their capacity to deal with lesser,
though crucial, questions of labor relations policy. With respect thereto, Fred
Wallace's capacity to function in Respondent Stationers' behalf cannot be disputed;
his testimony, specifically, reveals his status as Stationers' final voice regarding
employment and personnel policy. And, though merely designated Wallace Print-
ing's secretary and treasurer, Fred Wallace clearly held prime managerial responsi-
bility, throughout the period with which this case is concerned, within the print-
ing firm. (Ebenezer Wallace, though nominally Respondent Wallace's president,
seems to have played a relatively minor role with respect to the firm's day-to-day
management.) Thus, though General Manager Weiss may have been permitted to
function with relatively wide-range discretion so far as Wallace Printing's
day-to-day business was concerned, there can be no doubt that the Wallace
brothers, Fred Wallace particularly, possessed and exercised final managerial
authority with respect to labor relations matters. Fred Wallace, not Respondent
Wallace's general manager, gave the firm's labor contract negotiators their instruc-
tions, received their reports, conferred with them regarding Complainant Union's
contract proposals, worked with them in formulating counteroffers, and further
"sat in" during some negotiating sessions. Fred Wallace, so he testified, would
have signed Complainant Union's contract, had negotiations reached that point.
With a record, then, which reveals the Wallace brothers, particularly Fred
Wallace as Respondent Wallace's secretary and treasurer, possessing "the right
of ultimate authority" with respect to the firm's labor relations policy and prac-
tice, General Manager Weiss' conceded responsibility for diurnal or "current" busi-
ness decisions, regardless of its scope, cannot vitiate a determination that Respond-
ent Stationers and Wallace Printing functioned subject to centralized control in
labor relations matters. Compare Sakrete of Northern California, Inc., 137 NLRB
1220, 1222-23, with Piedmont Wood Products Co., Inc., 156 NLRB 751, in this
connection.
Finally, determination seems clearly warranted, further, that Respondent Sta-
tioners and Wallace Printing were, throughout the period with which this case is
1532 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
concerned, both physically and functionally integrated. Respondent Wallace con-
ducted its business within premises which Stationers provided, since they shared
quarters, they likewise shared, so the record shows, such facilities as building
entrances, restrooms, delivery doors, and telephone switchboard service. (True,
Wallace Printing's workers may have customarily limited themselves to using but
one of their building's several entrances. The firm may have occupied but a minor
portion of the building's basement. Further, the printing firm may have customarily
received supply deliveries through but one door, while Respondent Stationers
received deliveries through every door. Wallace Printing's so-called "share" with
respect to using the premises which both corporations occupied might, therefore,
merit characterization as limited; the fact that both firms made coordinated use
of their shared premises cannot, however, be gainsaid.) Stationers' clerical staff
performed Respondent Wallace's clerical bookkeeping and billing work, subject
to Harry Vanstone's supervision; Respondent Wallace's telephone service was pro-
vided through Respondent Stationers' secretary, served both corporations and
received dual compensation.
Further, without regard to their "shared" personnel, functional coordination
between the two corporations, specifically, their "inter-relation of operations"
directed toward a common purpose and mutual benefit, stands clearly proven. The
record does show that Respondent Stationers had diversified sales which encom-
passed office supplies, equipment, and furniture as well as printing; most of the
firm's revenue, concededly, derived from sales of merchandise and furniture. (Dur-
ing calendar 1964, Stationers' gross sales of merchandise and furniture totalled
$3,578,377, while merely $192,752 was derived from that year's printing sales.)
Within a 5-year period, 1960-64, nevertheless, Stationers' printing purchases from
Respondent Wallace accounted for some 74 percent of Wallace Printing's total
business, fluctuating between a high 98 percent (1960) to a low 61 percent (1963).
These figures provide clear-cut support for Mitchell's testimony, previously credited,
that Respondent Wallace's negotiator, Forbis, characterized the printing firm's
business as primarily a convenience for Stationers' customers Such, really, seems
to have been the case. (Respondents' answer reflects a concession that Wallace
Printing was, indeed, established to do part of the printing work which Stationers
required.) And, during the contract negotiations with which this case is concerned
Wallace Printing's spokesmen contended, consistently, that their client was not a
general commercial printing firm, but constituted'a so-called "specialized" business.
Complainant Union was told that it charged Stationers prices lower than those
charged by firms doing straight commercial work; that it received most of its work
from Stationers; that its profits were, therefore, necessarily low; and that it had
"no selling expense" worthy of note. (Respondent Stationers had some 20 sales-
men; Respondent Wallace had none, though General Manager Weiss functioned
part-time in that capacity. Despite Weiss' presumptive success in building Respond-
ent Wallace's so-called "direct" printing sales volume, there can be no doubt that
the designated firm's business depended, quite largely, upon the capacity of Sta-
tioners' salesmen to produce orders for printing work.) Within his brief, General
Counsel characterizes Respondent Wallace's printing business as constituting but a
single phase of Respondent Stationers' so-called "straight-line-operation" geared to
service its customers' printing needs. Whether or not such a sweeping character-
ization may be considered warranted, however, there can be no doubt that, so far
as both Wallace brothers were concerned, their printing firm, really, substantially
functioned as Stationers' printing division.
Fred Wallace, functioning as Respondent Stationers' president, permitted or
required Wallace Printing's general manager to participate in Stationers' manage-
ment conferences. (Concededly, Respondent Stationers did not have a printing
department or division, specifically so designated, within its corporate organization
chart. When, however, Stationers' President Wallace described Wallace Printing's
general manager as Stationers' printing department manager, he revealed, clearly,
his predisposition to consider the printing firm, despite its separate corporate
status, nothing more than a division or department of his family's larger business.)
Though Respondent Wallace's general manager may not have held a formal post
within Stationers' managerial hierarchy during the period with which this case is
concerned there can be no doubt that his participation in Stationers' weekly man-
agement conferences reflected the degree of junctional coordination which Fred
and Ebenezer Wallace required and sought to promote between their two com-
monly controlled corporations. Weiss' role, without regard for title, required him
to provide consultative service for Stationers' benefit. He worked with the latter
SOUTHERN CALIFORNIA STATIONERS 1533
firm's art department personnel , charged with providing stationery design services
for that firm 's customers ; further, he provided technical assistance and data cal-
culated to help Stationers' salesmen solicit and bid for printing work. This he did,
concededly , because "more business" could be produced , thereby, for the printing
firm. Determination seems clearly warranted , therefore , that Respondent Wallace,
despite its lack of requisite machinery to do all the printing work which Stationers
might require , and despite its readiness to solicit and perform printing work for
nonrelated customers , was primarily "utilized as a necessary adjunct" with respect
to Stationers ' business . (This being so, the fact that Respondent Stationers and
Wallace Printing may have sought to preserve their separate identity as much as
possible, through separate city licenses, separate designations and separate reports
for both Federal and State tax purposes , separate bank accounts , variations in
personnel policy, separate insurance coverage , different working conditions, and
divided responsibility for both purchases and deliveries , carries no persuasive
weight. The mere fact that the Wallace brothers may have sought to divide their
business into separate parts, relying upon the corporate fiction coupled with some
separation of records and functions , cannot prevent a determination that for lia-
bility purposes the corporate veil should be disregarded . With common ownership,
common management , centralized control of labor relations, and functional coordi-
nation shown, these purported marks of separation merely reflect Respondents'
presumptive concern with the possibility that their nominally separate corporate
status might otherwise be subject to challenge . Cf. N.L.R.B. v. City Yellow Cab
Company, 344 F.2d 575, enfg. 133 NLRB 994. Though suggestive of separateness,
these indicia cannot really be considered sufficient to negate a determination, for
present purposes , that Respondent Stationers and Wallace Printing deserve "single
employer" treatment .) Most significantly for the present purposes , however the
record warrants a determination that Fred and Ebenezer Wallace, together, made
both of the decisions which created the problem this case presents . Functioning in
their capacity as Wallace Printing 's joint proprietors , they decided that Complain-
ant Union 's contract demands were excessive, and that compliance therewith would
not permit the printing firm's continued profitable operation; concurrently, while
wearing their Southern California Stationers management hats, they were respon-
sible for that fiim'.s decision to continue the solicitation of printing orders which
would then be "contracted out" with local commercial printing firms With matters
in this posture , there can be no doubt , should a determination be found warranted
that, within the context of this case , such decisions , when made without notice or
consultation with Complainant Union herein , constituted unfair labor practices,
that both Respondents may properly be held liable herein . I so find.
2. Respondent firms, considered a single functionally coordinated business, were
statutorily bound to notify and bargain with Complainant Union regarding their
decision to terminate printshop operations , and to contract work previously per-
formed within their shop to local printing firms; further , Respondents were
statutorily bound to bargain with Complainant Union regarding this decision's
effect upon their struck printshop 's workers
a. General statement
Negotiators for Respondent Wallace and Complainant Union were bargaining
for their first contract when the situation developed with which this case is con-
cerned. Confronted with a bargaining deadlock, which, so far as the record shows,
was concededly genuine, Complainant Union called a strike. The strike was com-
plete; Respondent Wallace's printshop was shut down. With matters in this pos-
ture, the Wallace brothers, functioning in their capacity as Wallace Piinting's
management, reached a triple decision. They determined: (1) That no effort would
be made to continue current printshop operations regardless of the strike; (2) that
work in progress within the shop, which could not be completed and shipped by
supervisory personnel, would be subcontracted for completion; (3) that no further
printing work would be sought, and that Wallace Printing's business would be
terminated. While a witness, Respondent Wallace's secretary-treasurer conceded
that no printing firm spokesman had previously consulted or bargained with Com-
plainant Union concerning these decisions; nor did management consult or bargain
with Complainant Union, then or thereafter, concerning whatever "effect" their
decision might have on printshop workers
Concurrently, both Wallace brothers, functioning as Respondent Stationers' man-
agement, determined that Stationers would, despite Wallace Printing's closedown,
1534 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
continue to solicit printing work from customers; and that whatever orders Sta-
tioners might receive for such work, though they might require services comparable
with those previously performed within Wallace Printing's shop, would be "con-
tracted out" with various local printing firms. Concededly, no Stationers manage-
ment representative consulted or bargained with Complainant Union regarding
this decision to subcontract whatever printing orders might thereafter be received;
nor did Stationers' management seek consultation or negotiation with Complainant
Union concerning the effect of such a decision on Wallace Printing's workers.
These management decisions, considered in conjunction, necessarily terminated
the printing firm's raison d'etre, those functions which had previously been per-
formed within the bargaining unit which Complainant Union represented were
programed for performance, thereafter, within "outside" shops. Respondent
Wallace's striking workers, consequently, were no longer needed; their termination,
necessarily resulted. (Respondents contend that Wallace Printing's shopworkers,
since they were strikers when management reached these decisions, were never,
technically, discharged This contention, however, must be rejected. Strikers, pur-
suant to statutory definition, remain employees; see Section 2(3) of the Act, as
amended Thus, when Wallace Printing's management "decided to permanently
cease" business operations, the firm's strikers lost employment status, pursuant to
their employer's decision. Their proper date of termination, concededly, may be
doubtful. The record, however, will clearly support a determination that, by
April 19 at least, they were terminated; Respondent Wallace's president, within
his letter to Complainant Union dispatched on that date, declared that "no labor
dispute" could then be considered current between Complainant Union and his
firm, since "there are no employees" who could be involved therein.) Neither
Respondent Wallace nor Stationers consulted or bargained with Complainant
Union concerning any claims-whether for wages payable, termination pay, or
pension refunds-which the terminated workers could, conceivably, have pressed.
This course of conduct, so General Counsel contends, reflects Respondents' deci-
sion, functioning as a single business, permanently to subcontract all their printing
work General Counsel would fix Respondents' decision to discharge Wallace
Printing's workers on the date Complainant Union's strike began, when this deci-
sion was presumably reached. Further, within General Counsel's complaint,
Respondents stand charged with a refusal to bargain collectively, following the
strike's commencement, through Respondent Wallace's conduct "unilaterally sub-
contracting" printing work, without first notifying Complainant Union or bargain-
ing with it, either concerning "the" decision, previously noted, permanently to
subcontract such work, or concerning that subcontracting's effect on Wallace
Printing's production and maintenance workers. With specific reference to
March 4, when Respondent Wallace's negotiators last conferred with Complainant
Union's representatives, General Counsel contends that Wallace Printing then
"withdrew recognition" from Complainant Union as these workers' exclusive
bargaining representative. Finally, General Counsel charges that Respondents'
March 2 decision permanently to subcontract their printing work, together with
their decision to discharge Wallace Printing's workers then on strike, was made to
avoid their bargaining duty vis-a-vis Complainant Union, and because Wallace
Printing's workers had designated Complainant Union as their bargaining
representative.
Respondents' course of conduct, thus generally described, so General Counsel
contends, reflects their failure and refusal to bargain collectively with Complain-
ant Union in good faith as the statutory representative of Wallace Printing's
workers, within the specific "unit" which Respondents have conceded to be appro-
priate for collective-bargaining purposes. Since Respondents' decision permanently
to subcontract their printing work and discharge Wallace Printing's workers was,
so General Counsel claims, motivated by their desire to avoid bargaining, and
because the workers concerned had selected Complainant Union as their bargain-
ing representative, Respondents' course of conduct has been further characterized
as discrimination against their employees "in regard to hire or tenure of employ-
ment" calculated to discourage union membership. Derivatively, General Counsel
charges that, through their course of conduct, these Respondents have interfered
with, restrained, and coerced their employees, with respect to the latter's exercise
of rights statutorily guaranteed.
Since Respondent Stationers and Wallace Printing must, for present purposes,
be considered a single business, determinations regarding the propriety of their
conduct will, necessarily be predicated upon my consideration of such conduct as
chargeable to but one corporate management. So considered, the situation which
SOUTHERN CALIFORNIA STATIONERS 1535
the record presents really concerns a so-called partial closing which terminated
part of Respondents ' coordinated business complex, dictated the discharge of
workers whose positions had necessarily been eliminated thereby, and required
management to procure , through contracts with nonrelated firms, services which
such workers had previously performed.
b. Discrimination
Though General Counsel has , formally, charged Respondents with discrimina-
tion statutorily proscribed , no rationale calculated to support this charge can be
found within his brief We can but presume, therefore , that General Counsel's
position , substantially , derives from two decisional precedents.
This Board has found a respondent guilty of discriminatory discharges , violative
of Section 8(a)(3), when confronted with a record which warranted a determina-
tion that the firm 's true motive for such discharges was because the workers con-
cerned had designated a labor organization their bargaining representative. Town
& Country Mfg. Co., Inc., 136 NLRB 1022 , 1023-26, enfd. 316 F 2d 846 (C.A. 5).
However, the present record , within my view, will not sustain a comparable
conclusion.
Confronted with Complainant Union's representation petition , Respondent
Wallace, so the record shows , promptly consented to a Board election. Following
Complainant Union's certification , company spokesmen commenced contract nego-
tiations with reasonable promptitude ; they pursued such negotiations , thereafter,
conscientiously for some 7 months. As Respondents ' counsel notes within his brief:
The negotiations involved economic factors only. The Union wanted Wallace
to sign its industry contract and Wallace contended that it could not live and
remain in existence with such a contract , that such a contract would force it
to close down within a period of months.
Respondent Wallace's negotiators , whether voluntarily or pursuant to request the
record does not reveal , provided Complainant Union with financial statements cal-
culated to support their contention . So far as the record shows , Complainant
Union's representatives never challenged the sufficiency or probative force of such
statements . When questions were raised , during negotiations , regarding Complain-
ant Union 's possible "freedom " to grant Wallace Printing contractual terms less
burdensome than those found within the so-called standard industry contract, for
more than one year, Respondent Wallace's negotiators , jointly with Complainant
Union's representatives, sought a commitment from the Union Employers Sec-
tion of Printing Industries Association that such less burdensome contract terms
would not be considered a justification for the multiple-employer group 's invoking
the standard contract's so-called Favored Nation clause. No such commitment was
given . The negotiators , thereafter , bargained to a deadlock which General Coun-
sel has not challenged.
With due regard for this record, General Counsel cannot, reasonably , contend
that Respondent Wallace bargained in bad faith , sought to disparage Complainant
Union , or revealed a purpose to reject collective -bargaining principles.
General Counsel 's complaint , however, does charge Respondents with statutorily
proscribed motives for their final decision permanently to subcontract printing
work, coupled with their resultant discharge of Wallace Printing 's workers whom
Complainant Union represented . Presumably , General Counsel would suggest
that Respondent Wallace's management , confronted with a bargaining deadlock
and Complainant Union's strike , relinquished its reliance upon good -faith negotia-
tions and sought , thereafter , to pursue a policy of reprisal . No such contention,
however, can be sustained True, when a Board representative questioned him
regarding his reaction to Complainant Union's March 2 strike Respondent Wal-
lace's secretary and treasurer did provide a statement which could , conceivably,
be construed to support a determination that management 's final decision, chal-
lenged herein , derived from antiunion bias. He declared:
That same day I met Ebenezer to discuss the situation . We decided not to
operate Wallace any longer but to farm out the work. We knew that if we
gave in to the Bookbinders ' demands, it would be impossible to operate Wal-
lace at a profit We also realized the greater financial stain a prolonged strike
would impose on Wallace . We then decided to permanently close down Wal-
lace and salvage whatever money we could. This way we wouldn 't have to
deal with the Union and our whole problem with it would be solved.
[Emphasis supplied.]
1536 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Some contention could, arguably, be made that when he noted that the printing
firm's termination would "solve" that firm's union problems Respondent Wallace's
secretary and treasurer revealed a purpose to discriminate for statutorily proscribed
motives. However, I have not been persuaded. Fred Wallace, while a witness,
testified credibly that his decision, made with Ebenezer's concurrence, regarding
Wallace Printing's closedown and dissolution was economically motivated. His
prior statement, quoted, so shows. And the record, considered in totality, supports
such a view. (Particularly, reference should be made to Forbis' penultimate query,
during the March 4 conference, regarding the willingness of Complainant Union's
members to resume work upon terms consistent with Respondent Wallace's most
recent contract proposal. Since such a development would, necessarily, both con-
firm Complainant Union's continued representative status and guarantee the main-
tenance of current bargaining relationships, General Counsel can hardly contend
that Respondents' management wished to avoid further bargaining, or punish the
printshop workers for designating Complainant Union as their bargaining repre-
sentative.) Consistent with Wallace's further testimony, I find that when he
referred to Wallace Printing's permanent shutdown as likely to solve that firm's
union problem he meant that this would be the shutdown's result, not its pur-
pose. So construed, the statement quoted cannot really be considered reliable or
substantial proof that Respondents' managerial decisions were motivated by con-
siderations subject to statutory proscription.
Within its Darlington decision, however, the Supreme Court did define a further
situation regarding which a Section 8(a)(3) determination might be warranted.
With respect to partial closings which affect but a single segment of some larger
business complex, the Court declared that:
a discriminatory partial closing may have repercussions on what remains
of the business, affording employer leverage for discouraging the free exer-
cise of section 7 rights among remaining employees of much the same kind
as that found to exist in the "runaway shop" and "temporary closing"
cases. . . . By analogy to those cases involving a continuing enterprise we
are constrained to hold . . . that a partial closing is an unfair labor practice
under section 8(a)(3) if motivated by a purpose to chill unionism in any
of the remaining plants of the single employer and if the employer may
reasonably have foreseen that such closing would likely have that effect . .
If the persons exercising control over a plant that is being closed for anti-
union reasons (1) have an interest in another business, whether or not affili-
ated with or engaged in the same line of commercial activity as the closed
plant, of sufficient substantiality to give promise to their reaping a benefit
from the discouragement of unionization in that business; (2) act to close
their plant with the purpose of producing such a result; and (3) occupy a
relationship to the other business which makes it realistically foreseeable that
its employees will fear that such business will also be closed down if they
persist in organizational activities, we think that an unfair labor practice has
been made out.
These principles, however, provide General Counsel with no conceptual justifica-
tion for his requested 8(a)(3) determinations, based upon the present record.
Respondent Stationers' business , concededly , did continue despite Wallace Print-
ing's closedown. Clearly, however, Complainant Union had no representational
interest, current or potential, with respect to Stationers' work force; General
Counsel can hardly contend, therefore, that Wallace Printing's closedown was
motivated by a purpose to chill unionism among particular workers in Stationers'
hire. True, the record does show that sometime during November or Decem-
ber 1964, specifically, Teamsters Union representatives had commenced a cam-
paign to organize Stationers' warehousemen and drivers and, subsequently, they
did seek contractual negotiations with the latter firm. Not a scintilla of testimony
has been proffered, however, which would support a contention that Fred and
Ebenezer Wallace, when they decided to close their struck printshop business,
were motivated by a purpose to chill the Teamsters Union campaign with respect
to Stationers' workers. Certainly, so far as the record shows, they gave none of
their warehousemen or drivers, within the designated firm, reason to fear that
Stationers would likewise be closed down, should the Teamsters win representative
status. The record reveals, rather, that Stationers' negotiations with the Teamsters
Union reached a peaceful culmination on or about May 10, 1965, when repre-
sentatives signed a contract, without an election, covering merely the drivers
SOUTHERN CALIFORNIA STATIONERS 1537
group. With matters in this posture, no 8(a )(3) determination bottomed upon
Darlington could possibly be sustained.
c. Refusal to bargain
My determination that Respondents' decision to terminate Wallace Printing's
strikebound business operation, coupled with their decision to contract with other
firms thereafter for those printing services which Wallace Painting had normally
provided, was not discriminatorily motivated, however, cannot be considered com-
pletely dispositive. We turn, therefore, to General Counsel's more thoroughly
contested charge that Respondents have refused to bargain.
Clearly, an employer's duty to bargain with his workers' statutory representative
compasses a duty to refrain from making unilateral decisions on matters regard-
ing which he may be required to bargain, and from making changes in terms and
conditions of employment without consulting his workers' representative. North-
western Publishing Company, 144 NLRB 1069, 1071; see footnote 10 for further
case citations. Basing its determinations upon this general principle, the Board has
held that a respondent firm may not terminate a portion of its business operations,
discharge the workers concerned, and subcontract their work even though such
changes may, clearly, have been dictated by economic considerations without
first notifying and negotiating with the workers' duly designated bargaining repre-
sentative regarding its decision. Fibreboard Paper Products Corp, 138 NLRB 550;
Town & Country Mfg. Co., Inc., 136 NLRB 1022. Compare Brown Transport
Corp., 140 NLRB 954; American Manufacturing Company of Texas, 139 NLRB
815. Respondents' course of conduct herein, though commenced within a strike
context, flouts, so General Counsel contends, this decisional doctrine. (Before
we consider the full reach of General Counsel's contention, some disposition
should be made regarding a subsidiary question which the record, generally con-
sidered, seems to present. General Counsel's complaint, inter alia, charges
Respondents with a Section 8(a)(5) violation through Respondent Wallace's con-
duct "unilaterally subcontracting [its] printing work" without a prior notification
directed to Complainant Union herein. And consistently, within his brief, General
Counsel has charged Respondents with a statutory violation because they subcon-
tracted printing orders on hand when confronted with a strike. No rationale calcu-
lated to support such a contention, however, has been proffered. Conceivably,
General Counsel's contention with respect to this minor facet of his case may not
have been purposive; considered at face value, however, the charge must be
rejected. Memorial Consultants, Inc., 153 NLRB 1, 59 LRRM 1375, 1376; Shell
Oil Company, 149 NLRB 283, 285. Whatever reach Fibreboard principles have
with respect to 8(a)(5)'s scope, within a strike context, there can be no doubt that
struck firms cannot be considered duty bound to bargain over contracts let and
completed during a strike's course; such "temporary subcontracting necessitated
by the strike" does not transcend those reasonable measures which employers may
take to maintain operations under such circumstances.)
Within its Town & Country decision, previously noted, this Board's present Fibre-
board rule was foreshadowed. Confronted with a respondent firm which had
terminated its trailer hauling department, discharged its drivers, and subcontracted
its hauling work, the Board majority therein concluded that the respondents' desire,
inter alia, to operate its trucking department more economically through sub-
contracting could not justify its determination to take such action without notice
to the workers concerned or negotiation with their bargaining representative.
Town & Country details the Board's conclusion that:
. the elimination of unit jobs, albeit for economic reasons, is a matter
within the statutory phase "other terms and conditions of employment" and
is a mandatory subject of collective bargaining within the meaning of Section
8(a) (5) of the Act . This obligation to bargain in nowise restrains an
employer from formulating or effectuating an economic decision to terminate
a phase of his business operations. Nor does it obligate him to yield to a
union's demand that a subcontract not be let, or that it be let on terms incon-
sistent with management's business judgment. Experience has shown, however,
that candid discussion of mutual problems by labor and management fre-
quently results in their resolution with attendant benefit to both sides. Busi-
ness operations may profitably continue and jobs may be preserved. Such
prior discussion with a duly designated bargaining representative is all that
the Act contemplates. But it commands no less. [Emphasis supplied.]
264-047-67-vol. 162-98
1538 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
In Fibreboard, the respondent firm had, likewise, unilaterally subcontracted- main-
tenance work (previously done by its own employees) for economic reasons, with-
out first negotiating with their duly designated bargaining representative regarding
its decision. A Board majority concluded that such conduct breached the firm's
duty to bargain regardless of its unlawful economic motivation, such a breach,
the Board held, must be remedied by directives calculated to restore the status quo
and further require the respondent firm to bargain with its workers' statutory
representative regarding subcontracting plans
When Fibreboard reached the Supreme Court (379 U.S. 203, 57 LRRM 2609),
the Board's conclusion was upheld. Among other things, the Court's majority
opinion noted that:
The subject matter of the present dispute is well within the literal meaning of
the phrase "terms and conditions of employment... ... A stipulation with
respect to the contracting out of work performed by members of the bargain-
ing unit might appropriately be called a "condition of employment." The
words even more plainly cover termination of employment which, as the facts
of this case indicate, necessarily results from the contracting unit of work per-
formed by members of the established bargaining unit.
The inclusion of "contracting out" within the statutory scope of collective
bargaining also seems well designed to effectuate the purposes of the National
Labor Relations Act. One of the primary purposes of the Act is to promote
the peaceful settlement of industrial disputes by subjecting labor management
controversies to the mediatory influence of negotiation. The Act was framed
with an awareness that refusal to confer and negotiate had been one of the
most prolific causes of industrial strife . . . . To hold, as the Board has done,
that contracting out is a mandatory subject of bargaining would promote the
fundamental purpose of the Act by bringing a problem of vital concern to
labor and management within the framework established by Congress as most
conducive to industrial peace. [Emphasis supplied.]
The decisional doctrine thus judicially seconded, though refined and qualified in
subsequent cases, has become a well-defined Board principle. See, e.g. Carmichael
Floor Covering Company, 155 NLRB 674. Perhaps most significantly for present
purposes, respondent firms have further been found guilty of Section 8(a)(5)
violations because they have unilaterally terminated their business operations or
some portion thereof for business reasons, without consulting their workers' bar-
gaining representative. Royal Plating and Polishing Co., Inc., 148 NLRB 545, 152
NLRB 619; Cf. Star Baby Co., 140 NLRB 678, in this connection.
Within its first Royal Plating decision, the Board noted in language which Gen-
eral Counsel would presumably consider particularly cogent herein, that:
As we have emphasized before, seemingly, unsolvable problems can, upon
occasion, be solved if the parties to a bargaining relationship confront each
other honestly and openly across the bargaining table with their respective
problems and positions . . . . Moreover, the Union might have been able to
advance a solution to the problems confronting Respondent, however remote
that possibility may have been. It is not necessary that a satisfactory solution
to the serious issues involved in a closedown of operations be the probable
result of bargaining negotiations for the obligation to give notice and oppor-
tunity for discussion of such matter to be a viable and intrinsic part of the
statutory bargaining obligation. The basic concepts of the Act call for utiliza-
tion of joint efforts at the bargaining table to solve difficult and seemingly
insoluble problems as well as those more amenable to a resolution satisfactory
to both sides. The Act does not, of course, compel agreement; it does compel
notice and opportunity for discussion to the end that all possible bases for
agreement are fully explored.
Subsequently, when the Board, following the Supreme Court's Darlington decision,
previously noted, reconsidered the case, these views were affirmed. The Board held,
specifically, that Royal Plating's failure and refusal to notify the labor organization
concerned regarding the pat tial closing of its business through the shutdown of the
larger of its two plants, coupled with its refusal to discuss the consequences of that
partial closing, violated Section 8(a) (5) of the statute. And, while doing so, the
Board noted, utter alia, particular Supreme Court language in Fibreboard which
found statutory justification for a determination that Section 8(a)(5) had been
violated, despite a concession that "no one" could really say whether the collective-
SOUTHERN CALIFORNIA STATIONERS 1539
bargaining process would satisfactorily have resolved whatever difficulties might
have motivated respondent's challenged decision.
These general considerations, broadly stated, cannot, however, be considered
completely determinative herein., Respondents' two coordinated business decisions,
challenged together as violative of the statute, were triggered by a strike situation;
concededly, they represented a reaction to Wallace Printing's complete shutdown.
Should this factual distinction be considered sufficiently significant to require a
rejection of currently recognized Fibreboard principles regarding the scope of
management's bargaining duty? Though Respondents' counsel, within his brief,
may not have defined his position precisely with particular reference to the ques-
tion now under consideration, such, substantially, would seem to be his contention.
He cites, first, the broad proposition that struck firms, particularly those subjected
to economic strikes, retain the right to protect and continue their businesses by
procuring permanent replacements to fill whatever positions strikers have left
vacant. N.L.R.B. v. Mackay Radio & Telegraph Co., 304 U.S. 333, 345. Basing
his position thereon, Respondents' counsel contends, substantially, that since the
respondent firm herein, considered a single employer, were concededly free to hire
replacements for their printshop strikers on a permanent basis, they should like-
wise be considered free to discontinue the struck portion of their business and
subcontract the work which strikers had previously performed.
Whatever persuasive merit such a contention might have, considered de novo
herein, currently viable Board precedent requires its rejection. Shortly following
Fibreboard, this Board was confronted, precisely, with questions regarding a
respondent firm's right permanently to subcontract struck business functions with-
out notifying the labor organization whose members were on strike, and without
affording it an opportunity to bargain with respect to the decision to subcontract
or its effect upon particular strikers concerned in order to continue business opera-
tions. Hawaii Meat Company, Limited, 139 NLRB 966, Robert S. Abbott Publish-
ing Company, 193 NLRB 1328. Within its Hawaii Meat decision, which con-
cerned a meat processor confronted with an economic strike, the Board determined
that the respondent firm, therein, had violated Section 8(a) (5) by subcontracting
its strikebound delivery service. The struck respondent's statutory bargaining obli-
gation was held to compass a duty to advise and consult with the labor organiza-
tion involved, regarding its decision permanently to replace some strikers through
a subcontract; specifically, the firm's decision to subcontract was declared a manda-
tory subject of bargaining since it concerned the terms and conditions of employ-
ment for workers within the bargaining unit for which the labor organization had
been certified. Rejecting the respondent firm's contention that its right to replace
economic strikers permanently included the right to replace them through the
utilization of a subcontractor and his workers, the Board majority noted that with
respect to the case under consideration, particular strikers were not being replaced by
other workers; rather, the positions which they had held before the strike were being
permanently discontinued. Shortly thereafter, within the Board's Abbott Publishing
decision, the respondent newspaper publisher, confronted with an unfair labor
practice strike, was likewise found guilty of 8(a)(5) violations because the
firm's management had decided, unilaterally, that "contracting out" with respect
to mechanical department work, commenced during the strike, would be continued
"permanently" thereafter.
These decisions, basically, seem to have derived from a Board rationale cal-
culated to reconcile within a strike context each struck firm's Fibreboard duty with
its Mackay right. Within Hawaii Meat, for example, the Board specifically reaf-
firmed Fibreboard principles; dealing with the respondent firm's Mackay conten-
tion, then, the Board declared:
We do not believe that the Mackay case is dispositive here . Mackay
holds that an employer is justified, in attempting to keep his plant in operation,
to hire new employees as replacements for economic strikers. But the right to
replace economic strikers permanently is also affected by other prevailing
principles of labor law. Thus, as the Respondent admits, an employer is obli-
gated to continue bargaining with the representative of its employees even
after they go out on strike. Any unilateral change in wages and terms or con-
ditions of employment, which the employer makes while bargaining negotia-
tions are in progress, is itself a wrongful refusal to bargain. Nor is the
employer's obligation to bargain limited by the issues which may have pre-
cipitated the strike . . . . The open conflict between the parties manifested
1540 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
by the strike may itself bring other issues to the fore and bargaining about
such issues may also be required . . . The elimination of unit jobs (and
the consequent erosion of the bargaining representative 's status ) is, we are
satisfied , a mandatory subject for bargaining , even though the employer may
seek to justify his action in terms of the replacement of economic strikers.
Our conclusion does not in any way infringe on the basic principle of the
Mackay case , since the replacement of strikers by other employees who remain
within the unit does not impair the authority or status of the bargaining
representative to continue bargaining for all the employees in the appropriate
unit. In this case , individual strikers are not being replaced by other employ-
ees, but instead , the positions they held before the strike have been eliminated
so that no replacement is being substituted for the striker . . . All that we
are holding in this case is that an employer fails to bargain and violates Section
8(a)(5) if, after a strike begins , he does not give the union an opportunity
to bargain about his proposal to change the existing terms and conditions
of employment among which , and not the least important , is the permanency
of the job classifications which were held by employees when the strike began.
[Emphasis supplied.]
Within a prior case, which had presented a somewhat comparable question , namely,
whether superseniority for strike replacements , granted during a strike, when
prompted by the struck firm's belief that it could not otherwise secure replace-
ments required to keep the business in operation , should be considered a legitimate
corollary of such a firm 's Mackay right of replacement ; the Board , performing a
similar strike the balance function, had found supeiseniority a form of discrimina-
tion which extended far beyond the employer's right of replacement. Erie Resistor
Corp., 132 NLRB 621, enfd. 373 U.S. 221. The Supreme Court, within a decision
published after the Board's Hawaii Meat determinations which upheld the Board's
judgment, had much to say with respect to Mackay's scope. Regarding the Board's
reconciliation between Section 8 ( a)(3) and the struck firm 's claimed right to
promulgate a discriminatory policy developed solely to protect and continue its
business , the Court, following a review of the Board 's detailed assessment of super-
seniority , went on to declare:
We think the Board was entitled to treat this case as involving conduct which
carried its own indicia of intent and which is barred by the Act unless saved
from illegality by an overriding business purpose justifying the invasion of
union rights. The Board concluded that the business purpose asserted was
insufficient to insulate the super -seniority plan from the reach of section
8(a) (1) and section 8(a)(3) ... .
The Court of Appeals and respondent rely upon Mackay as precluding the
result reached by the Board but we are not persuaded . Under the decision in
that case an employer may operate his plant during a strike and at its con-
clusion need not discharge those who worked during the strike in order to
make way for returning strikers . It may be, as the Court of Appeals said, that
,such a replacement, policy is obviously discriminatory and may tend to dis-
courage union membership.' But Mackay did not deal with super-seniority,
with its effects upon all strikers, whether replaced or not, or with its powerful
impact upon a strike itself . Because the employer's interest must be deemed
to outweigh the damage to concerted activities caused by permanently replac-
ing strikers does not mean it also outweighs the far greater encroachment
resulting from super -seniority in addition to permanent replacement.
We have no intention of questioning the continuing vitality of the Mackay
rule, but we are not prepared to extend it to the situation we have here. To
do so would require us to set aside the Board's considered judgment that the
act and its underlying policy require , in the present context, giving more
weight to the harm wrought by super-seniority than to the interest of the
employer in operating its plant during the strike by utilizing this particular
means of attracting replacements. We find nothing in the Act or its legislative
history to indicate that super-seniority is necessarily an acceptable method of
resisting the economic impact of the strike , nor do we find anything incon-
sistent with the result which the Board reached. On the contrary, these sources
are wholly consistent with, and lend full support to, the conclusion of the
Board . . Section 13 makes clear that although the strike weapon is not
an unqualified right, nothing in the Act except as specifically provided is to
be construed to interfere with this means of redress . . . and section (2)(3)
preserves to strikers their unfilled positions and status as employees during
the pendency of a strike . . . . This repeated solicitude for the right to strike
SOUTHERN CALIFORNIA STATIONERS 1541
is predicated upon the conclusion that a strike when legitimately employed 'is
an economic weapon which in great measure 'implements and supports the
principles of the collective 'bargaining system.
While Congress has from time to time revamped and redirected national
labor poilcy, its concern for the integrity of the strike weapon has remained
constant. Thus when Congress chose to 'qualify the' use of the strike, it did so
by prescribing the limits and conditions of the abridgement in exacting detail
by indicating the precise' procedures to be followed in effecting the inter-
ference . . . and by preserving the positive-command-of section 13 that the
right to strike is to be given a generous interpretation 'within the scope of the
labor Act . . ' ' ' ' ' • .
Accordingly,' in view of the deference paid the strike weapon by the federal
labor laws and the devastating consequences upon it which the Board found
was and would be precipitated by respondent's inherently discriminatory super-`
seniority plan, we cannot say the Board erred in' the balance which it struck
here [Emphasis supplied]. '
Substantially, the Board's Hawaii Meat and Abbott Publishing decisions, which
issued before the Supreme Court decision quoted, likewise reflect its reasoned try
to reconcile "conflicting legitimate interests" while discharging its so-called "special
function" with respect to applying the general provisions of the statute, Section
8(a) (5) particularly, to the complexities of industrial'life. Confronted with respond-
ent employers who when struck decided to protect and continue their businesses by
subcontracting work which some of their striking employees had previously per-
formed, the Board majority found, when all'is said and done, that each respondent
firm's claimed business purpose did not outweigh the harm which its course of
conduct would, because of that conduct's 'unilateral character, necessarily bring to
bear on striking workers' statutorily guaranteed rights. These determinations, so
analysis shows, could only have derived from a conclusion that management
decisions which permanently eliminate positions previously held by strikers not
only change prestrike conditions of work but, further, subvert the bargaining rep-
resentative's status and destroy its capacity to continue bargaining for workers
within the bargaining unit, whom it properly represents. These results, so Hawaii
Meat seems to suggest, represent, within the Board's view, greater encroachments
upon the statutorily guaranteed right of workers to participate in concerted activity
than would flow from the struck firm's permanent replacement of particular strikers
by workers who, though new, would have employee status within the certified bar-
gaining group.
This rationale, which presumably_ underlay ,the Board decisions noted, may of
course be arguable subject to criticism as logically "inadequate, irrational or arbi-
trary" particularly within the present'case's context. Cf. N.L.R.B. v. Babcock &
Wilcox Co., 351 U.S. 105; N.L.R.B. v. United Steelworkers of America, 357 U.S.
357; N.L.R B. v. Insurance Agents' International Union, AFL-CIO, 361 U.S. 477,
which provide some-examples of judicial review concerned with the reasonableness
of Board "explications" regarding other facets of regulation. (In this connection,
some reference should, no doubt, be made to certain basic facts which underlay
the Supreme Court's Fibreboard decision. Within that decision, which followed
the Board's Hawaii Meat and Abbott Publishing cases, the 'Court noted that "the
Company's decision to contract out the maintenance work did not alter the Com-
pany's basic operation. The maintenance work still had to be performed in the
plant. No capital investment was contemplated; the company merely replaced -exist-
ing employees with those of the independent contractor to do the same work under
similar conditions of employment. Therefore, to require the employer to bargain
about the matter would not significantly abridge his freedom to manage the busi-
ness." [Emphasis supplied.] The Court declared that its decision did not encompass
other forms of "contracting out" or "subcontracting" with different business
consequences.
(Regarding this caveat, Justice Stewart observed, within a concurring opinion,
that the Court had not decided that every managerial decision which necessarily
terminates an individual's employment is subject to the duty to bargain. Noting
that at least seven circuits had interpreted the relevant statutory language to
exclude various kinds of management decisions from the scope of the bargaining
duty, the Justice declared that, "While employment, security has thus properly been
recognized in various circumstances as a condition of employment, it surely does
not follow that every decision which may affect job security is a subject of com-
pulsory collective bargaining . . . [T]here are . . . areas where decisions by man-
agement may quite clearly imperil job security, or indeed terminate employment
1542 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
entirely. An enterprise may decide to invest in laborsaving machinery. Another
may resolve to liquidate its assets and go out of business. Nothing the court holds
today should be understood as imposing a duty to bargain collectively regarding
such managerial decisions, which lie at the core of entrepreneurial control.
Decisions concerning the commitment of investment capital and the basic scope
of the enterprise are not in themselves primarily about conditions of employment,
though the effect of the decision may be necessarily to terminate employment.
If . . . the purpose of Section 8(d) is to describe a limited area subject to the
duty of collective bargaining, those management decisions which are fundamental
to the basic direction of a corporate enterprise or which impinge only indirectly
upon employment security should be excluded from the area." [Emphasis supplied.]
With these considerations in mind, one could, conceivably, contend persuasively
that a managerial decision to discontinue the struck portion of a business, sell the
physical assets committed thereto, and procure the products or services previously
supplied from nonrelated sources does concern "larger entrepreneurial questions"
such as what shall be produced, how capital shall be invested in fixed assets, or
what the given business's basic scope shall be, which should not, reasonably, be
found subject to compulsory collective bargaining.) Board decisions, however,
suggest no disposition, thus far, to consider management determinations compar-
able in breadth with those challenged on the present record, even when made
within a strike context, beyond the scope of the bargaining duty which Fibreboard
defines.
Several Courts of Appeal, which have considered the question, have not found
the Board's rationale persuasive. Hawaii Meat Co. Ltd. v. N.L.R.B., 321 F.2d 397
(C.A. 9); N.L.R.B. v. Robert S. Abbott Publishing Co., 331 F.2d 209 (C.A. 7);
Compare N.L.R.B. v. New England Web, Inc., 309 F.2d 696 (C.A. 1) setting aside
135 NLRB 1019, decided before the Supreme Court's Fibreboard decision, in this
connection. With respect to these cases, no Board petitions for certiorari were
filed. Therefore, Respondents' counsel may quite properly, and possibly with some
hope of final success, challenge the viability of current Board doctrine regarding
Fibreboard's scope with reference to strike situations. Such challenges with respect
to Board policy, however, may not be hospitably considered by Trial Examiners;
pursuant to specific direction, their decisions must follow established Board prece-
dent, which neither the Board nor Supreme Court have yet reversed. Lenz Com-
pany, 153 NLRB 1399; Local 1426, International Longshoremen's Association,
AFL-CIO, 128 NLRB 198, 205-206; Insurance Agents' International Union,
AFL-CIO (The Prudential Insurance Company of America), 119 NLRB 768, 773;
see particularly Iowa Beef Packers, Inc., 144 NLRB 615, 616, and further cases
therein cited. Since Board policy, therefore, commands my deference to current
decisional doctrines, particularly those laid down within Hawaii Meat and Abbott
Publishing, previously noted, absent some persuasive indication that Board mem-
bers, with the Supreme Court's Fibreboard and Erie Resistor decisions for guid-
ance, may wish to revise their prior judgment regarding the scope of a struck
firm's bargaining duty, counsel's contention that Respondents were legally free
completely to discontinue the struck portion of their coordinated business, and
further free permanently to, subcontract work which their strikers had previously
performed, without notice or consultation with Complainant Union herein, must
be rejected.
Though confronted with a strike situation which, purportedly, generated serious
questions with respect to their printshop's future, Fred and Ebenezer Wallace were,
so I find, statutorily bound to notify and bargain with Complainant Union regard-
ing their proclaimed decision to close down Wallace Printing, and to contract with
nonrelated firms for those printshop services which Respondent Wallace previously
provided.
Further, Board precedent, blessed, this time, with judicial concurrence, confirms
that respondent firms which fail to notify or consult with their workers' bargain-
ing representatives regarding the so-called effects of contracting out decisions,
have likewise failed their bargaining duty. Royal Plating and Polishing Co., supra,
enforcement denied on other grounds, 350 F2d 191 (C.A. 3). Though the Court
of Appeals for the Third Circuit did deny enforcement, with respect to the Board's
order, its decision noted that:
an employer is still under an obligation to notify the union of its inten-
tions so that the union may be given an opportunity to bargain over the rights
of the employees whose employment status will be altered by the managerial
SOUTHERN CALIFORNIA STATIONERS 1543
decision . . . . Bargainable issues such as severance pay, seniority and pen-
sions, among others, are necessarily of particular relevance and importance
[Emphasis supplied.]
There can be no doubt , herein , that Respondents never did bargain with Com-
plainant Union regarding their coordinated decision 's effect upon Wallace Print-
ing's workers Whether their failure to bargain, considered with due regard for
relevant circumstances , breached their statutory duty, however , must now be
determined.
3. Respondents have satisfied their statutory duty to bargain with Complainant
Union , regarding their decision permanently to discontinue printshop opera-
tions, terminate the current "employee" status of their striking printshop
workers, and contract out work which the strikers designated had previously
performed ; further, Respondents have not failed or refused to bargain regarding
their decision 's effects
With matters in their present posture there can be no doubt that Complainant
Union , contrary to General Counsel 's contention , received a legally sufficient
notice regarding Respondent Wallace's decision to terminate printshop operations.
That decision was, concededly , reached rather quickly following Complainant
Union's March 2 strike call; however , Respondent Wallace's principal negotiator,
thereafter, publicly reported his client 's plan with reasonable promptitude , during
the parties ' previously scheduled March 4 bargaining session.
True, Forbis did present Respondent Wallace's decision , verbally, with language
which suggested it had already been reached ; he did not declare,a merely poten-
tial decision , which the printshop 's management planned to consider . Nevertheless,
determination seems warranted , upon the record , that Complainant Union was
fully cognizant regarding the so-called decision 's then still executory character.
No steps whatever had yet been taken to dismantle or dispose of Respondent
Wallace 's printshop machinery ; nothing had yet been done looking toward the
firm's corporate dissolution . Compare Hartman Luggage Co , 145 NLRB 1572.
Viewed technically , perhaps, Forbis ' March 4 pronouncement may have reflected
a seeming fait accompli with respect to Respondent Wallace's decision . Cf Win.
J. Burns International Detective Agency, Inc., 148 NLRB 1267, 1278 . Complain-
ant Union must have been aware, however, that management 's purported "deci-
sion" was still reversible . (The negotiator 's statement that Wallace Printing's
management "planned" to go out of business clearly constituted a reference to
future action ; further his contemporaneous query, regarding Complainant Union's
possible willingness to send the strikers back to work upon those terms and con-
ditions which had been specified in Respondent Wallace's most recent contract
offer, certainly was reasonably calculated to convey management 's readiness to
reconsider its closure decision .) Considered in context , Respondent Wallace's
declared position during the March 4 session , so I find, clearly reflected a sugges-
tion, tacit or specific , that, should their bargaining deadlock be broken, manage-
ment's decision , though made, could be rescinded . Forbis' remarks therefore,
cannot be found to have foreclosed negotiations ; rather, they provided Complain-
ant Union with requisite "notice" regarding his client 's planned course
Further, determination would certainly seem warranted that such notice, when
proffered , came as no surprise . Within his brief, General Counsel has conceded
that during their negotiations spokesmen for Respondent Wallace had previously
predicted that the firm 's printshop might close down unless Complainant Union
scaled down its so-called standard industry contract demand.
Such forecasts , so General Counsel contends , were not, themselves , sufficient to
discharge Respondent Wallace's statutory obligation to provide Complainant Union
with notice regarding its challenged close down decision . The contention, thus
generally stated, may have merit . ( My colleague , Trial Examiner Rosenberg, has
held, with Board concurrence , that a respondent 's statutory obligation is not dis-
charged by management prophecies that a plant "might" close down unless a labor
organization 's demands are scaled down. Apex Linen Service of Columbus, Inc.,
151 NLRB 305, 308. He has noted that management representatives , not uncom-
monly, proffer such prophecies during negotiations as a bargaining technique,
hopefully to exact more favorable terms from their bargaining counterparts.)
Predictions regarding the possibility of plant closure , however, cannot routinely be
dismissed as mere tactical maneuvers . They serve , minimally, to put union negotia-
tors on notice that management does consider a plant shutdown within the range
1544 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
of possible response, should a bargaining deadlock later develop. Necessarily,
such suggestions -become a factor in continued negotiations ; quoting a familiar
cliche, we may say that the possibility of plant closure has been "laid on the bar-
gaining table" for consideration. When, thereafter, prophecy becomes reality-
when a bargaining deadlock finally does force a managerial decision which, should
it be implemented, would "eliminate" bargaining unit positions-both union
spokesmen and members are put on notice that they must come forward with
some concrete concession or alternative to stay the life of the employing enter-
prise. See Apex Linen Service of Columbia, Inc., supra, in this connection. Forbis'
statement therefore, served a proper function; Complainant Union's spokesmen
were fully apprised that Wallace Printing' s prognostication would become a reality,
failing some substantive counterproposal.
This, Complainant Union did not or could not, perhaps, realistically provide.
Confronted with Respondent Wallace's March 4 declaration of purpose, Interna-
tional Representative Mitchell merely reiterated his willingness to continue negoti-
ations, sitting all day should that prove necessary, for the purpose of resolving the
printshop's problem. Considered in context, this constituted a sterile suggestion;
Respondent Wallace was, thereby, given no reason to believe that proposals rea-
sonably calculated to break or bypass the bargaining deadlock would be forth-
coming. (The record shows that Forbis responded, specifically, with a statement
that Complainant Union's persistence in demanding the standard area contract,
presumably with no more than one year's grace period before it would become
completely applicable, left little for the parties to discuss. Mitchell, however, still
proffered no sign or suggestion that some variant proposal could be, or would be,
made.) With matters in this posture, Respondent Wallace's statutory obligation
to give notice and bargain regarding its plant closure decision was, so I find,
satisfied. As General Counsel notes, within his brief, the Act does not require
parties to engage in fruitless marathon discussions at the expense of frank state-
ments of position. N.L.R.B. v. American National Insurance Co, 343 U.S. 395.
Respondent Wallace's negotiators were not, therefore, required to proffer new pro-
posals; Complainant Union's spokesmen, certainly, had already made it more than
clear that constrained by their standard area contract's so-called Favored Nation
clause, they could realistically, consider no less costly contract suggestions., (For
present purposes, Complainant Union's declared willingness to sign a year's con-
tract, with presumptively less burdensome terms, may be disregarded. Respondent
Wallace's negotiators had stated previously that such a contract, calculated to
provide a period within which the print shop's management could make whatever
"readjustments" they might find necessary to render the cost burdens of the
standard area contract bearable thereafter, would merely postpone the firm's
prospective financial straits . Considered as Complainant Union's modified pro-
posal, the suggestion was no longer viable.) Since negotiations were, then,
blocked precisely because Complainant Union was still firmly maintaining a posi-
tion previously taken, Respondent Wallace's negotiators could hardly be expected
to do more than declare their belief that a substantive "impasse" had been
reached; concessions could not be considered required.
True, Forbis never did declare, specifically, that Respondent Wallace's still-to-be-
realized plan "to go out of business" was bargainable . The statute, however,
requires no special form of words calculated to reveal a readiness to negotiate.
When Respondent Wallace's negotiator declared that he saw no further reason
for discussion, should Complainant Union persist in demanding its standard area
contract, negotiations were not foreclosed, Union spokesmen were being told,
tacitly but clearly, that the next move was theirs. They gave no sign , however,
that they were, during the March 4 session at least, prepared to proffer "some
concrete concession or alternative" reasonably calculated to get the negotiations off
dead center.
Under these circumstances, Respondent Wallace cannot be charged, so I find,
with failure or refusal to bargain. Compare Dove Flocking and Screening Co,
145 NLRB 682, 694. The only meaningful bargaining which could have taken
place regarding Respondent Wallace's declared plan "to go out of business" was
foreclosed, not by Forbis' refusal to discuss the matter specifically, but by Com-
plainant Unions failure to proffer any proposal or suggestion calculated to break
their substantive deadlock in contract negotiations. This deadlock, which Com-
plainant Union's strike call merely capped, confirmed, and compounded, had,
SOUTHERN CALIFORNIA STATIONERS 1545
directly, motivated Respondent Wallace's decision to terminate its business. Only
negotiations calculated to resolve the bargaining impasse regarding "cost factors"
could, realistically , create conditions which might warrant that decision 's recon-
sideration . Such negotiations , however , clearly were rendered less than likely, not
by Respondent Wallace's course of conduct , but by Complainant Union's silence.
Between March 4 and April 19, Complainant Union, so far as the record
shows, proposed no negotiations with respect to Respondent Wallace's plant closure
decision . Two conclusions with respect to the labor organization 's motive for
silence would seem possible: either ( 1) Complainant Union 's negotiators were
motivated by their belief that Respondent Wallace's negotiators were again crying
"wolf" merely to better their bargaining position ; or (2) Complainant Union may
have recognized that their previously confirmed substantive deadlock would render
any narrow discussion of the firm 's plant closure decision bootless . Should a deter-
mination be considered warranted that Complainant Union really believed the com-
pany negotiators were bluffing , responsibility for that miscalculation can hardly be
laid at Respondent Wallace's door . Should we conclude , however, that Complainant
Union's silence derived, rather , from lack of readiness to break their substantive
bargaining impasse, Respondent Wallace cannot be faulted.
When within his April 19 letter Respondent Wallace's president confirmed the
plant closure decision which Forbis had verbally declared slightly more than 6
weeks before , Complainant Union merely proclaimed its striking members' readi-
ness to resume work without conditions . Such a declaration, proffered without a
proposal or suggestion reasonably calculated to reveal Complainant Union's readi-
ness to recanvass the deadlocked negotiations , cannot properly be considered suffi-
cient to require a reversal of closure plans, or to fix the burden of going forward
upon the struck printshops management.
Had Wallace Printing rehired the strikers , their bargaining impasse would not
have been resolved. True , Complainant Union 's representative status would have
been preserved from "erosion" through management 's presumptively pro tern rever-
sal regarding its plant closure decision . Contractual consensus , however, would
have remained something less than a likely prospect . Wallace Printing's financial
position , certainly , would not have been improved , Complainant Union's spokesmen
could hardly have presumed , therefore , that the firm 's readiness to sign their stand-
ard industry contract , or their proffered 1 year "interim " contract , would be
quickly -demonstrated . No union spokesman had, however , meanwhile given the
slightest sign that , following renewed negotiations , his organization 's persistent de-
mand for Respondent Wallace's ultimate acceptance of standard area contract
terms would be modified.
With matters in this posture , clearly, Wallace Printing 's resumption of business
would merely have triggered a renewal of those "fruitless marathon discussions"
which; so the Supreme Court has declared , nothing in the statute requires.
Within some 40-plus "subcontracting" cases which the Board has considered and
decided pursuant to Fibreboard principles , several refinements of the basic doctrine
declared therein have been proclaimed . The Board had noted , inter alia , that its
proscriptions directed toward the unilateral subcontracting of unit work have not
been calculated to lay down "hard and fast" new rules for mechanical application
regardless of the situation revealed by the record . Westinghouse Electric Corpora-
tion (Mansfield Plant ), 150 NLRB 1574 . Thus, the Board has dismissed 8(a)(5)
complaints-despite determinations that the respondents concerned were statu-
torily bound , before subcontracting their operations, to notify and consult with
concerned labor organizations ' regarding their subcontracting plans-where the
prima facie showing of violation found inherent with respect to such respondents'
unilateral conduct - was considered overcome or "cured " by their overall bar-
gaining conduct . See Hartmann ' Luggage Co ., 145 NLRB 1572, in this connection.
Similarly, the Board has dismissed complaints upon a determination that sufficient
notice and opportunity to bargain was given , and, likewise , where it found no timely
request for bargaining made by the labor organization concerned . Compare West-
inghouse Electric Corp ., Bettis Atomic Power Laboratory , 153 NLRB 443; General
Motors Corporation , Buick-Oldsmobile -Pontiac Assembly Division, 149 NLRB 396,
400; Shell Oil Company, 149 NLRB 305, 307; Shell Chemical Company, 149
NLRB 298. See, further , N.L.R.B., Thirtieth Annual Report, pp . 72-77. The pres-
ent case presents a comparable situation . Considered in context , Respondents' chal-
lenged course of conduct, so I find, reflects no failure or refusal to bargain , violative
1546 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
of the statute , regarding their coordinated decision permanently to discontinue
printshop operations , and to contract with nonrelated firms for those printing services
which Wallace Printing had previously supplied.
With respect to General Counsel's further contention that Respondent Stationers
and Wallace Printing have failed or refused to bargain regarding their decision's
effect upon struck printshop workers, little need be said . No course of conduct
chargeable to Respondents , following Forbis ' March 4 declaration , reflects their
purpose to foreclose negotiations regarding the consequences of Respondent Wal-
lace's plant closure decision Complainant Union, however, thereafter made no
effort whatever , so far as the record shows , to bargain regarding that purported
decision 's consequences . Compare Apex Linen Service of Columbus , Inc., 151
NLRB 305 , 308, footnote 8. Throughout a 7-week period , between March 4 and
April 21 specifically , no questions were raised with respect to such matters as sev-
erance pay , preferential hiring lists, pensions , possible transfers , or related ques-
tions. When some of Respondent Wallace's printshop workers, upon being told that
their positions no longer remained to be filled, raised questions , themselves , regard-
ing their right to claim refunds from Respondent Wallace's pension trust fund,
Complainant Union took no position , so far as the record shows , regarding their
claims. Compare N.L.R.B . v. Royal Plating and Polishing Co ., 350 F.2d 191
(C A. 3). Determination certainly seems warranted , therefore , that Respondents'
willingness to satisfy their bargaining duty, particularly in this respect , was never
tested. General Counsel has not, so I find, sustained his contention with respect to
this claimed statutory violation.
CONCLUSIONS OF LAW
In the light of the foregoing findings of fact, and upon the entire record in this
case, I make the following conclusions of law:
1. Southern California Stationers and Wallace Printing Company functioned,
throughout the period with which this case is concerned , as a single , integrated
employer within the meaning of Section 2(2) of the Act, engaged in commerce and
business activities which affected commerce , within the meaning of Section 2(6)
and (7) of the Act, as amended.
2. Bookbinders and Bindery Women's Local No. 63-63A, International Brother-
hood of Bookbinders , AFL-CIO, is a labor organization within the meaning of
Section 2 (5) of the Act, as amended , which admitted employees of Wallace Print-
ing Company to membership.
3. All production and maintenance employees of Wallace Printing Company
including shipping and receiving employees and truckdrivers , but excluding all
other employees including office clerical employees , watchmen , guards, professional
employees , and supervisors as defined in the Act, constituted a unit appropriate
for the purposes of collective bargaining within the meaning of Section 9(b) of
the Act, as amended.
4. Throughout the period with which this case is concerned , Bookbinders and
Bindery Women's Local No. 63-63A, International Brotherhood of Bookbinders,
AFL-CIO, was entitled to recognition as the exclusive representative of Wallace
Printing Company's employees within the unit described above, for the purpose of
collective bargaining with respect to rates of pay , hours of employment, and
other terms and conditions of employment , within the meaning of Section 9(a)
of the Act, as amended.
5. Respondents have not, through discrimination against Wallace Printing Com-
pany's employees in regard to their hire or tenure of employment , or any . term or
condition of employment , calculated to discourage union membership engaged in
unfair labor practices affecting commerce , within the meaning of Section 8(a)(1)
and (3 ) of the Act, as amended.
6. Respondents have not, through any failure or refusal to bargain collectively
with the Union in good faith , engaged in unfair labor practices affecting commerce,
within the meaning of Section 8(a)(1) and (5) of the Act, as amended.
RECOMMENDED ORDER
Upon these findings of fact and conclusions of law, and upon the entire record
in the case , I recommend that the Board , pursuant to Section 10(c) of the National
Labor Relations Act, as amended, dismiss the present complaint in its entirety.