Spencer Foods

National Labor Relations Board - Board Decisions

Mar 1, 1984

268 N.L.R.B. 1483 (N.L.R.B. 1984)

SPENCER FOODS
Spencer Foods, Inc. and United Food and Commer-
cial Workers International Union, Local 152,
AFL-CIO. Case 18-CA-6256
1 March 1984
DECISION AND ORDER
BY MEMBERS ZIMMERMAN, HUNTER, AND
DENNIS
On 2 July 1981 Administrative Law Judge
Thomas R. Wilks issued the attached decision. The
Respondent filed exceptions and a supporting brief.
The Charging Party filed cross-exceptions and a
supporting brief. The Respondent then filed a brief
in opposition to the Charging Party's cross-excep-
tions.
The National Labor Relations Board has delegat-
ed its authority in this proceeding to a three-
member panel.
The Board has considered the decision and the
record in light of the exceptions and briefs' and
has decided to affirm the judge's rulings, findings, 2
and conclusions only to the extent consistent with
this Decision and Order.
The judge found, and we agree, that the Re-
spondent violated Section 8(a)(1) by telling two job
applicants that they would not be considered for
future employment if they honored a lawful union
picket line. The judge further found that the Re-
spondent violated Section 8(a)(3) by establishing
criteria for the recall of laid-off employees de-
signed to disqualify them from future employment
and by applying those criteria in a discriminatory
manner in order to eliminate the Union as the em-
ployees' collective-bargaining representative. We
agree that the Respondent violated Section 8(a)(3),
but we do so for the reasons set forth below. Final-
' Respondent has requested oral argument. This request is hereby
denied as the record, the exceptions, and the briefs adequately present the
issues and positions of the parties.
s The Respondent and the Charging Party have excepted to some of
the judge's credibility findings. The Board's established policy is not to
overrule an administrative law judge's credibility resolutions unless the
clear preponderance of all the relevant evidence convinces us that they
are incorrect. Standard Dry Wall Products, 91 NLRB 544 (1950), enfd.
188 F.2d 362 (3d Cir. 1951). We have carefully examined the record and
find no basis for reversing the findings.
None of the following minor errors in the judge's decision materially
affect his findings or analysis: During the summer and fall of 1978, Union
President Lauritsen continued to request, not receive, information as to
the stock tender offer; Land O' Lakes informed the Union in November
1978, not 1977, that it had no employees in Spencer and had no intention
of hiring any. Land O' Lakes' Industrial Relations Director Huron did
not explain why, in January 1979, there was need to hire a "totally new
work force" given the lack of any specific instructions from Land O'
Lakes' Vice President Dudley; the hiring criterion as to wage expecta-
tions was #3, not #2. Employee Darryl Frerichs stopped working at the
Spencer plant on 26 February 1979 because of the picket line. He told his
foreman why he had stopped working, but later returned to work on 6
March 1979. Finally, the General Counsel agrees with the Union that the
8(aX5) issue is not properly analyzed under successorship criteria.
268 NLRB No. 231
ly, the judge found that the Respondent, after its
acquisition by Land O' Lakes, remained the "same
continuing employing entity" and that as such it
violated Section 8(a)(5) by withdrawing recogni-
tion from the Union, by refusing to bargain with
the Union, and by unilaterally establishing hiring
eligibility criteria.
The Respondent has excepted, inter alia, to the
judge's 8(a)(5) findings on the basis that because of
a total change in ownership accompanied by sub-
stantial changes in management and plant oper-
ations the Respondent was extinguished and re-
placed by a new employing entity operated and
controlled by Land O' Lakes. The Respondent
contends, and we agree, that traditional successor-
ship principles should be applied to determine
whether the Respondent is subject under Section
8(a)(5) to any labor relations obligations which
Spencer Foods had prior to its acquisition by Land
O' Lakes. Since, as discussed below, the essence of
the successorship doctrine is that such obligations
depend on the degree of continuity in the employ-
ing enterprise, we further agree with the Respond;
ent that an examination of the factors on which the
Board traditionally relies to evaluate continuity
here warrant a finding that the Respondent under
Land O' Lakes' ownership is not a successor to the
original Spencer Foods, Inc. We shall therefore
dismiss the 8(a)(5) allegations in the complaint.
The facts are more fully set forth in the judge's
decision. The Respondent's Spencer facility is a
beef slaughtering and fabrication plant. In 1977 the
Respondent also operated five other plants includ-
ing another slaughtering plant in Schuyler, Nebras-
ka. The Union represented a unit of production and
maintenance employees at the Spencer plant from
1952 until 31 October 1977 when the Respondent
lawfully closed that facility for economic reasons.
At the time the Spencer operation closed the plant
employed approximately 420 unit employees.3
The Spencer facility remained closed for 16
months. The Respondent informed the employees
that it would attempt to sell the plant. The Re-
spondent maintained its corporate headquarters at
Spencer and employed a small work force engaged
in caretaker functions there. In an attempt to sell
the Spencer plant the Respondent negotiated with
Land O' Lakes, Inc.4 which sought to purchase
only the assets of the Spencer and Schuyler plants.
Both parties subsequently abandoned this strategy
because of Federal tax considerations. Land O'
Lakes eventually accomplished its objective by
3 The Schuyler facility continued to operate without interruption.
4 Land O' Lakes is a cooperative with corporate headquarters located
in Minneapolis, Minnesota. The sole shareholders are farmers who
produce or sell to Land O' Lakes or buy goods and services from it.
1483
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
purchasing the stock of the Respondent. In Octo-
ber 1978 Land O' Lakes issued a tender offer.
Ninety-five percent of the shares were acquired by
27 October and the balance was later acquired by a
reverse stock split plan. Because Land O' Lakes'
interest was only in the Respondent's Spencer and
Schuyler facilities, it obtained warrants from sever-
al of the Respondent's major shareholders pursuant
to which those shareholders would purchase the
four unwanted Spencer Foods facilities in the event
those facilities could not otherwise be sold. The
major shareholders also assumed responsibility for
certain lawsuits instituted prior to the stock sale.
After acquiring sole ownership of the Respond-
ent, Land O' Lakes effected certain changes in Re-
spondent's corporate structure and operation. Spen-
cer Foods, Inc. became a corporate subsidiary of
Land O' Lakes with headquarters remaining in
Spencer, Iowa. The Spencer facility reopened in
February 1979 and the four unwanted facilities
were disposed of under the purchase warrants. The
Respondent thereafter operated as a two-plant en-
terprise. The Respondent's articles of incorporation
were changed to permit it to operate as a farmer's
cooperative.
The new ownership of Land O' Lakes was re-
flected in the election of an entirely new board of
directors. The president of Spencer Foods re-
mained in charge of day-to-day operations for
Land O' Lakes but he no longer sat on the board.
Land O' Lakes hired a new plant manager and new
supervisors for the Spencer facility. A majority of
the supervisors had not been previously employed
by Spencer Foods.
Land O' Lakes made further changes regarding
the operations of the Spencer facility itself. It elimi-
nated one of the two work shifts and thus reduced
the original 420 employee complement to approxi-
mately 240. Land O' Lakes also converted the
Spencer facility to a solely kosher operation and in
so doing modified its old customer list and also
added new kosher accounts. Additionally, Land O'
Lakes began purchasing cattle from its own mem-
bers. It also continued to draw upon local sources.
Land O' Lakes spent approximately $1,300,000 or
equivalent to about 10 percent of the purchase
price on plant improvements. While some improve-
ments were cosmetic such as painting and plaster-
ing others were substantive in nature. For example,
the Respondent extended the length of the kill
chain, installed new and more modern equipment,
and modified production steps and job assignments.
These changes impacted on productivity in that
they resulted in the faster movement of hides
within the plant.
In January 1979 the Respondent began hiring for
its scheduled February reopening of the Spencer
plant. The Respondent's witnesses testified that
Land O' Lakes executives concluded that the old
work force as a whole was unsatisfactory because
of low productivity and high absenteeism as well
as excessive workmen's compensation costs. The
Respondent contends that in order to procure the
best possible work force it developed and imple-
mented hiring criteria which in its view were ob-
jectively justified by business considerations and
calculated to favor neither applicants from the laid
off Spencer work force nor new applicants. The
Respondent also contends that it applied the crite-
ria equally and without discrimination. Among the
criteria was a rule prohibiting the employment in
any facility of more than one member of an imme-
diate family (anti-nepotism rule). Additional criteria
included the evaluation of an applicant's job stabili-
ty, medical problems affecting packinghouse work,
absenteeism including time lost because of acci-
dents, and history of disciplinary warnings during
previous periods of employment. Applicants who
had been employed at the Spencer facility before
its closure in October 1977 were judged on their
record during their Spencer Foods' tenure as re-
flected in their personnel files. New applicants
were judged on their most recent employment as
represented by them or as revealed in job reference
checks.
When the plant reopened on 26 February 1979
approximately 1100 applications had been received
of which approximately 250 were from the former
unit employees. On that date 69 employees started
work. Approximately one-third of them were
former unit employees. During the first year of op-
eration under Land O' Lakes' ownership Respond-
ent employed an average of 200 employees to fill
the approximately 220 projected positions. There
was a high turnover rate-more than 500 individ-
uals were hired during 1979 and 275 were terminat-
ed.
I. SUCCESSORSHIP AND THE 8(A)(5)
ALLEGATIONS
The threshold test for the inheritance of bargain-
ing obligations developed by the Board and ap-
proved by the Supreme Court in NLRB v. Burns
Security Services, 406 U.S. 272 (1972), is whether
there is substantial continuity of the business enter-
prise. The Board's application of this test involves
consideration of the totality of the circumstances
surrounding the transfer 5 as well as the operations
s In finding that the Respondent remained the same employing entity
the judge focused primarily on the stock transfer method by which Land
Continued
1484
SPENCER FOODS
of the original and the purchasing enterprises. The
factors traditionally weighed by the Board include
continuity in operation, location, work force, work-
ing conditions, supervision, machinery and equip-
ment, methods of production, and product.6
Applying these principles to the facts of this case
we are convinced that the record compels a con-
clusion that the resumption of the Spencer Foods
operation did not involve the "substantial continui-
ty of the business enterprise" which would support
the 8(a)(5) allegation. We first note that the hiatus
in operations of the Spencer plant lasted for almost
a year and a half. Additionally, Spencer Foods,
Inc., as a corporate division of Land O' Lakes, was
directed by substantially new top management and
plant supervisory personnel. Four of the six Spen-
cer Foods facilities were eliminated. The size of the
work force at Spencer was drastically reduced due
to a change from a two-shift to a one-shift oper-
ation and the elimination of the nonkosher product
line. As a result the Respondent no longer supplied
certain of its former customers and it added new
customers. A series of other changes further mili-
tate against a finding of continuity between the
original Spencer Foods operation and its reemer-
gence as a new corporate subsidiary of Land O'
Lakes. Land O' Lakes directed that efforts be made
to secure supplies from its own members. It there-
by began to realign the Respondent as part of its
large agricultural cooperative. Land O' Lakes
made further capital investment in this subsidiary
by providing approximately $1,300,000 beyond the
initial purchase price for new equipment purchases
and other substantive plant improvements. As a
result of these changes production steps and job as-
signments were substantially modified.
In these circumstances, we find that the Re-
spondent as a subsidiary of Land O' Lakes is a new
and independent enterprise and is not a successor
O' Lakes acquired Spencer Foods. He applied precedent that holds that
under fundamental principles of corporate law the transfer of stock alone
does not alter the nature of the employing entity. Western Boot & Shoe,
205 NLRB 999 (1973), and Topinka's Country House, 235 NLRB 72
(1978). The judge also cited and relied on Hendricks-Miller Typographic
Co., 240 NLRB 1082 (1979), which states in dicta at fn. 4 that there is a
"difference in genesis" between a stock transfer and a successorship situa-
tion because a stock transfer "involves no break or hiatus between two
legal entities, but is, rather, the continuing existence of a legal entity,
albeit under new ownership." As set forth in detail by the judge and sum-
marized herein the record reveals much more than the mere substitution
of one owner for another through a stock transfer within the context of
an ongoing enterprise. Further, the purchase arrangement between Spen-
cer Foods and Land O' Lakes resembled in part an assets purchase in
that Land O' Lakes did not acquire four unwanted Spencer Foods facili-
ties. Unlike the situation here, the respondent in TKB acquired the prede-
cessor's stock without a hiatus, retained the same work force, and made
no operational changes. In these circumstances TKB is distinguishable.
e See Georgetown Stainless Mfg. Corp.. 198 NLRB 234 (1972), and
Miami Industrial Trucks, 221 NLRB 1223 (1975).
to Spencer Foods, Inc.7 Accordingly, we dismiss
the 8(a)(5) allegations in the complaint.
II. THE 8(A)(3) VIOLATION
We agree with the Respondent that as a new
entity with no successorship obligations under the
Act it was free to hire a new work force. Howev-
er, it was required to do so in a manner not viola-
tive of the Act. This it failed to do. We find that
the Respondent was aware that all of Spencer's
employees were union members and that it de-
signed and implemented its hiring criteria, especial-
ly the anti-nepotism rule, in a discriminatory
manner so as to disqualify most of thfose former
employees. We also agree with that portion of the
judge's rationale supporting his finding that the Re-
spondent was unlawfully motivated by the knowl-
edge that the entire Spencer work force had be-
longed to the Union.8
The judge concluded that the Respondent's anti-
nepotism rule was discriminatory. The record
shows that approximately one-half of the members
of Spencer Foods' preclosure work force were re-
lated to one another within the meaning of the Re-
spondent's hiring criterion which prohibited the
7 See Cagle's Inc., 218 NLRB 603 (1975), and Blazer Corp, 236 NLRB
103 (1978).
s Concerning the 8(aX3) violation, our dissenting colleague appears
only to disagree with us on the question of the Respondent's motivation.
Contrary to the judge, she apparently believes that proof of actual
motive is a condition precedent to establishing a prima facie violation of
Sec. 8(aX3). This view is inconsistent with well-settled principles that
certain conduct carries its own indicia of intent and that as to those ac-
tions which are inherently destructive of important employee rights no
proof of actual motive need be established. Contrary to our colleague, we
believe that the facts found by the judge point to the inescapable conclu-
sion that the Respondent sought to weed out members of Spencer Foods'
former work force because of their union membership. We disagree with
Member Dennis' conclusion that the General Counsel failed to establish a
prima facie case that the Respondent's decision not to "recall" the former
Spencer work force was unlawfully motivated. We also disagree with her
reliance on Jim's Big M, 264 NLRB 1124 (1982).
The employer in Jim's Big M, knowing that the former work force was
represented by a union and being aware only of rumors of employee
theft, declined to hire the former employees with an "apparent disinterest
in their individual ability or reputation as workersm" Here the Respondent
had knowledge of more than mere rumors; it had received President
Pearson's specific report that poor union-management relations were in
part responsible for productivity problems and it acted on this knowl-
edge. Member Dennis downplays the importance of this knowledge of
Spencer Foods' union problems, characterizing it as mere "bare fact" in-
sufficient to warrant an inference that antiunion considerations were a
motivating factor in the Respondent's hiring decision. Unlike our col-
league we attach greater significance to this factor. And it is for this
reason that we find Jim's Big M distinguishable.
The Respondent did not, as in Jim's Big M, reject the former work
force out of hand but instead announced its intention to evaluate all appli-
cants individually pursuant to nondiscriminatory criteria The Respondent
however failed to do so through its use of the anti-nepotism rule and by
disparately evaluating applicants from the former Spencer work force In
these circumstances, the Respondent's knowledge of the poor labor rela-
tions at the Spencer plant coupled with its use of the anti-nepotism rule
and its disparate treatment of former employees establish a prima facie
case of discrimination. Under Wright Line the burden then shifts to the
respondent to rebut the presumption, and the Respondent failed to do so
here.
1485
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
employment of more than one member of an imme-
diate family. We agree with the judge that the use
of this rule was discriminatory with respect to the
former Spencer work force since it was not uni-
formly applied by the Respondent at its other oper-
ations.9
While the other hiring criteria appear to be fa-
cially nondiscriminatory, we find, in agreement
with the judge, that former Spencer employees
were subjected to more stringent evaluations under
those criteria than were new applicants and that
consequently the hiring process favored the new
applicants. The judge's finding of an overall pat-
tern of disparate treatment is fully supported by his
discussion summarized below of the effects of ref-
erence checks made on new applicants and of the
evaluations by the Respondent of applicants' medi-
cal and work histories.
Land O' Lakes' director of industrial relations
testified that each applicant was subject to a refer-
ence check on the information supplied in his or
her application. The personnel files of applicants
from the former Spencer work force were closely
examined with respect to the hiring criteria's spe-
cific limits for absenteeism, discipline, and lost time
accidents. New applicants submitted on a form pre-
pared by the Respondent information on the
number and type of previous work accidents but
only a general statement about absenteeism. The
Respondent did not inquire about disciplinary
warnings received during previous employment.
As found by the judge the personnel records of
over 200 successful applicants fail to show that pre-
vious employers were contacted to verify new ap-
9 Contrary to our dissenting colleague we are not persuaded that the
Respondent has established that its anti-nepotism policy and the excep-
tions thereto have been applied consistently throughout its corporate
system. While the Respondent apparently has a rule concerning nepotism,
the lack of uniform application of the rule negates a finding of a corpor-
atewide policy. Thus, the Respondent admittedly did not apply the rule in
situations where there was a small labor pool. However, there was appar-
ently no corporatewide method for determining how this "exception"
was to be applied. In this regard we note the testimony of the Respond-
ent's corporate staffing manager Terrance Koves that while he was previ-
ously the human resources director for Land O' Lakes' poultry division
stationed at Albert Lea, Minnesota, he was not aware of any specific
management decision to apply the exception at the Albert Lea facility.
Relatives have been and continue to be hired there. The population of
Albert Lea itself is approximately twice that of Spencer. Additionally,
the Albert Lea facility has traditionally drawn its work force from a two
county area. The Respondent's corporate director of industrial relations,
William Huron, testified that the exception was applied at the newly ac-
quired Schuyler facility because the population of Schuyler itself was
"mighty small."
Schuyler itself has a population of only about 4000. However, the
record additionally reveals that the Schuyler facility has traditionally
drawn its work force from surrounding communities with a total popula-
tion of approximately 40,000. We note that the Respondent has continued
to hire relatives after it acquired the Schuyler facility.
In these circumstances, the Respondent's defense that it merely applied
a uniform policy at Spencer is not supported by substantial probative
record evidence. In the absence of a consistent past practice, we find
Inland Container Corp., 267 NLRB 1187 (1983), is inapposite.
plicants' versions of their employment history. A
Land O' Lakes' personnel department employee
testified that the process by which she made refer-
ence checks on new applicants was hectic and
rushed. The information she did obtain was more
generalized than that which was sought in the ap-
plication form and, as found by the judge, included
"vague, subjective, second hand impressions." Thus
the Respondent hired new applicants either with-
out reference checks or based on information not
sufficiently detailed to satisfy the requirements of
the hiring criteria. On the other hand, members of
the former Spencer work force were rejected based
on the detailed information contained in these indi-
viduals' personnel records.
With respect to applicants' medical histories,
many individuals previously employed by Spencer
Foods were rejected because of information includ-
ed in their files. The Respondent did not systemati-
cally evaluate the contemporary importance of
Spencer employees' old health problems. However,
new applicants, even those with a reported history
suggesting possible medical disqualification, had an
opportunity to take a physical examination in order
to determine their current state of health.
In view of the foregoing, we find that the record
amply supports the judge's conclusion that the Re-
spondent applied its hiring criteria less rigidly to
new employees in support of a discriminatorily mo-
tivated decision to inhibit the hiring of former em-
ployees. l ° This along with the use of the anti-nep-
otism rule constitutes a violation of Section 8(a)(3)
and (1).
AMENDED CONCLUSIONS OF LAW
1. The Respondent is an employer engaged in
commerce within the meaning of Section 2(2), (6),
and (7) of the Act.
2. United Food and Commercial Workers Inter-
national Union, Local 152, AFL-CIO, is a labor
organization within the meaning of Section 2(5) of
the Act.
3. By establishing hiring criteria in order to dis-
criminatorily disqualify employees previously em-
ployed by Spencer Foods, Inc. at its Spencer plant
and by applying the criteria in a discriminatory
manner because of those individuals' membership
in, representation by, and activity on behalf of the
Union, the Respondent has engaged in unfair labor
practices in violation of Section 8(a)(3) and (1) of
the Act.
10 Contrary to our dissenting colleague's claim, we do not find fault
with an employer's use of former employees' personnel files. Rather, we
find that the Respondent subjected former employee applicants to a
greater degree of scrutiny than new applicants. It is this disparate treat-
ment which we find violative of Sec. 8(aX3).
1486
SPENCER FOODS
4. By its plant manager and agent Dennis Heine-
man on 8 March 1979, and by its agent William
Huron in February 1979, the Respondent told two
job applicants that they would not be employed in
the future when work was available to them and
when they were willing to work if they presently
refused to cross the Union's lawful picket line. The
Respondent thereby engaged in unfair labor prac-
tices in violation of Section 8(a)(1) of the Act.
5. The above-mentioned unfair labor practices
are unfair labor practices affecting commerce
within the meaning of Section 2(6) and (7) of the
Act.
6. The Respondent has not engaged in any viola-
tions of Section 8(a)(5) nor, other than as found
above, in violations of Section 8(a)(1) of the Act.
AMENDED REMEDY
Having found that the Respondent has engaged
in unfair labor practices in violation of Section
8(a)(1) and (3) of the Act, we shall order that the
Respondent cease and desist therefrom and take
certain affirmative action to effectuate fully the
purposes of the Act. In light of our finding that the
Respondent has not violated Section 8(a)(5) of the
Act we shall modify the recommended remedy or-
dered by the judge for the 8(a)(3) violation.
As stated above a new employer is entitled to
select its own work force but in exercising this
freedom it may neither use discriminatory criteria
for hiring nor implement neutral criteria in a dis-
criminatory manner. Our 8(a)(3) finding is that the
Respondent has so discriminated. Therefore, we
shall order the Respondent to offer all individuals
who would have been hired in and after January
1979 employment in the positions for which they
would have been hired but for the Respondent's
unlawful discrimination or, if those positions no
longer exist, to substantially equivalent positions,
dismissing, if necessary, any and all persons hired
to fill such positions. We shall require the Re-
spondent in its consideration of all applicants to use
nondiscriminatory criteria and apply them equally
to all potential employees. In particular we shall
require the Respondent to refrain from applying
the anti-nepotism rule and to not disqualify any job
applicant because of his or her close family rela-
tionship to a current member of the work force.
The Respondent shall also place on a preferential
hiring list all remaining discriminatees who, under
nondiscriminatory criteria, would have been hired
but for the lack of available jobs. We shall also
order the Respondent to make whole for any losses
they may have suffered all individuals it would
have hired but for its unlawful discrimination
against them. Backpay shall be computed in ac-
cordance with the formula set forth in F W. Wool-
worth Co., 90 NLRB 289 (1950), with interest as
prescribed in Florida Steel Corp., 231 NLRB 651
(1977). See generally Isis Plumbing Co., 138 NLRB
716 (1962).
ORDER
The National Labor Relations Board orders that
the Respondent, Spencer Foods, Inc., Spencer,
Iowa, its officers, agents, successors, and assigns,
shall
1. Cease and desist from
(a) Establishing hiring criteria in order to discri-
minatorily disqualify employees previously em-
ployed by Spencer Foods, Inc. at its Spencer plant
and applying the criteria in a discriminatory
manner because of those individuals' membership
in, representation by, and activities on behalf of the
Union.
(b) Telling job applicants that they would not be
employed in the future when work was available to
them and they were willing to work if they pres-
ently refused to cross the Union's lawful picket
line.
(c) In any like or related manner interfering
with, restraining, or coercing employees in the ex-
ercise of the rights guaranteed them by Section 7
of the Act.
2. Take the following affirmative action designed
to effectuate the policies of the Act.
(a) Offer to all individuals who would have been
hired in and after January 1979 employment in the
positions for which they would have been hired
but for the Respondent's unlawful discrimination
or, if those positions no longer exist, to substantial-
ly equivalent positions dismissing, if necessary, any
and all persons hired to fill such positions; and
place on a preferential hiring list all remaining indi-
viduals who would have been hired but for the
lack of available jobs.
(b) Make whole in the manner set forth in the
section above entitled "Amended Remedy" those
individuals the Respondent would have hired but
for its unlawful discrimination for any losses they
may have suffered by reason of the Respondent's
failure to hire them.
(c) Preserve and, on request, make available to
the Board or its agents for examination and copy-
ing, all payroll records, social security payment
records, timecards, personnel records and reports,
and all other records necessary to analyze the
amount of backpay due under the terms of this
Order.
1487
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
(d) Post at its plant in Spencer, Iowa, copies of
the attached notice marked "Appendix."" Copies
of the notice, on forms provided by the Regional
Director for Region 18, after being signed by the
Respondent's authorized representative, shall be
posted by the Respondent immediately upon re-
ceipt and maintained for 60 consecutive days in
conspicuous places including all places where no-
tices to employees are customarily posted. Reason-
able steps shall be taken by the Respondent to
ensure that the notices are not altered, defaced, or
covered by any other material.
(e) Notify the Regional Director in writing
within 20 days from the date of this Order what
steps the Respondent has taken to comply.
MEMBER ZIMMERMAN, concurring in part.
I agree with Member Hunter that the Respond-
ent unlawfully discriminated against employees be-
cause of their union membership in establishing and
implementing its hiring criteria, and that the Re-
spondent's motivation was to eliminate the Union
as the employees' collective-bargaining representa-
tive.
Contrary to Member Hunter and Member
Dennis, I would find, for the reasons set forth by
the judge, that the Respondent continued as the
same employing entity, inasmuch as "the same
work continued for the same corporate entity at
the same place, with the same or substantially simi-
lar procedures, processes and machinery, serving
the same customers or same type of customers with
much the same sources of supply." Accordingly, I
would adopt the judge's finding that the Respond-
ent violated Section 8(a)(5) and (1) by withdrawing
recognition of the Union in December 1978, by re-
fusing to bargain thereafter concerning the recall of
laid-off employees, by unilaterally changing wages
and benefits, and by unilaterally establishing crite-
ria for recall.
MEMBER DENNIS, concurring in part and dissent-
ing in part.
I agree with my colleagues that the Respondent
violated Section 8(a)(1) of the Act by telling two
job applicants that they would not be considered
for future employment if they refused to cross a
lawful picket line. I also agree with Member Hun-
ter's conclusion that the Respondent is not the
same employer that previously operated the Spen-
cer plant, and that TKB International, 240 NLRB
1082 (1979), is .distinguishable. This case involves
I If this Order is enforced by a Judgment of a United States Court of
Appeals, the words in the notice reading "Posted by Order of the Na-
tional Labor Relations Board" shall read "Posted Pursuant to a Judgment
of the United States Court of Appeals Enforcing an Order of the Nation-
al Labor Relations Board."
much more than a simple change in ownership re-
sulting from a stock transfer. The purchase, effect-
ed through the technical device of a stock transfer,
more closely resembled an assets purchase because
the Respondent in reality bought only two of the
several plants Spencer Foods, Inc. (SF) owned.
The new owners did not simply assume the former
enterprise's operations. To the contrary, the Re-
spondent made substantial changes in almost all
levels of operations and management.
I also agree with Member Hunter's conclusion
that the Respondent is not a successor employer
obligated to bargain with the Union. NLRB v.
Burns Security Services, 406 U.S. 272 (1972). The
Respondent in effect purchased only a portion of
SF; reopened the closed Spencer, Iowa plant after
a year and a half hiatus; implemented substantial
changes in management and supervision; reduced
the work force to half its previous size; changed
the product and production methods; and effected
significant capital improvements in the physical
plant. More importantly in my view, the Respond-
ent did not hire a majority of its employees from
the Spencer plant's former work force, and did not,
as I discuss below, fail to do so because of unlaw-
ful discrimination. Id. at 280 fn. 5, 286. See also
Howard Johnson Co. v. Hotel & Restaurant Employ-
ees, 417 U.S. 249, 262 fn. 8 (1974). Accordingly, I
find that the Respondent is not a successor, and I
join Member Hunter in dismissing the alleged vio-
lations of Section 8(a)(5) and (1) of the Act.
I do not, however, agree with my colleagues
that the Respondent violated Section 8(a)(3) and
(1) of the Act by discriminating against the former
employees because of their union activity. I find
the evidence insufficient to support this conclusion.
1. FACTS
During the discussions leading to the Spencer
plant purchase, Gerald Pearson, SF's president,
wrote to Ralph Hofstad, president of Land O'
Lakes (LOL), informing him of the multitude of
problems causing SF's "erratic performance" and
"disappointing results." Pearson stated that desired
savings at the plant did not materialize for a
number of reasons, including ineffective recruiting
which resulted in "a poor addition to the work
force." Pearson frankly acknowledged poor labor
relations-a "Union Versus Company attitude"-
and said that the lack of strong plant management
compounded the situation. Summarizing the prob-
lems, Pearson attributed the poor operations to the
older facility, an inconsistent management, and "a
high-cost unproductive labor force."
After LOL purchased SF in the fall of 1978,
Union President Lowell Lauritsen wrote on two
1488
SPENCER FOODS
occasions to SF and LOL. He identified the Union
as the bargaining agent for the employees of the
closed Spencer facility, requested bargaining about
the terms of employment, and stated that the em-
ployees were available to return to work. Vice
President of Operations William Eastwood, one of
the two SF officials LOL hired for Spencer Foods,
a Division of Land O'Lakes (SF/LOL), responded
to Lauritsen. He confirmed plans to reopen the
plant and stated that applications for employment
would be taken from all interested individuals, in-
cluding former employees.
LOL officials directed LOL Industrial Relations
Director William Huron to hire the best work
force possible, but did not give any specific instruc-
tions concerning the former employees. In Decem-
ber 1978, Huron drew up hiring criteria, attempting
to set a standard for a quality work force. He ex-
amined plant records on workmen's compensation
costs, absenteeism, and "things of that nature."
Huron did not, however, review former employees'
personnel records.
Huron selected criteria designed to cull out ap-
plicants who were unstable or unsuited to meat-
packing work, unwilling to accept the wages LOL
planned to pay, or had excessive absences, warn-
ings, or accidents. The criteria also included an
I Those criteria are as follows.
1. Necessary job skills.
A. The ability to lift sixty (60) lbs. or more on a regular basis.
B. Above average manual dexterity as evidenced by past job
history.
2. Interest in packinghouse work.
A. Describe working conditions and observe reaction. Deter-
mine willingness to work in beef processing industry.
3. Obvious wage expectation versus wage schedule problems.
4. Work history.
A. Job stability as reflected in past employment. For general
labor in the plant, applicants should have held no more than three
(3) jobs in the last five (5) years. Exclude layoffs due to plant clos-
ings.
B. Screen out individuals discharged from any previous employ-
ment.
5. Obvious medical problems/physical restrictions:
A, Tendonitis.
B. Lower back syndrome.
C. Allergies.
E. Dermatitis in the form of rashes when near blood, animal fat,
chemicals, oils, detergents, etc.
F. Heart problems/high bood pressure.
G. Loss of limb(s)/fingers.
H. Respiratory problems/T.B./emphysema.
6. No more than one (1) member of an immediate family may
work for Spencer Foods, Inc. Immediate family is defined as: spouse,
child, parent, grandparent, brother, sister, in-laws (mother, father,
brother, sister).
7. No more than an average of four (4) absences per year over the
last two (2) years. Periods of hospitalization or major medical condi-
tions to be separately evaluated.
8. No disciplinary warnings of any kind in the last eighteen (18)
months. Past Spencer Foods, Inc. employees: May 1976-October
1977.
9. No more than two (2) lost time accidents in the last three (3)
years. Past Spencer Foods, Inc. employees: November 1974-October
1977.
anti-nepotism rule which embodied the essentials of
a policy LOL formally adopted in 1973.2
The first step in the hiring process was the initial
screening and interview by Iowa Job Services
(IJS).3 If the IJS interviewer concluded that an in-
dividual was worthy of further consideration, he or
she referred the application for review by LOL of-
ficials. It is not clear how many individuals IJS
screened out, but LOL's reviewers received from
60 to 100 applications a day and ultimately exam-
ined over 2000 applications.' If the applicant was a
former employee, the LOL reviewers looked at
past work records to decide whether to consider
the application further. The reviewers also consult-
ed SF/LOL employees who had worked for SF,
seeking information about new applicants and
former employees. Leo Lang, a former SF supervi-
sor SF/LOL hired as plant superintendent, was a
principal source of information. The record shows
that Lang reported former employees' misconduct,
such as failure to wear a hardhat in a hardhat area,
smoking in a prohibited area, leaving the plant
without authorization, and "horseplay" on the pro-
duction floor that he viewed as creating safety haz-
ards. If, after evaluating the application and any
additional information, the reviewers felt an appli-
cant was worthy of further consideration, they
I That policy is as follows.
Pupose
To avoid potential problems, a policy for the employment of rela-
tives is needed.
Basic Policy
I. Permanent Employees.
a. Close relatives of either a present employee or a present
member of the Board of Directors will not be hired. Close rela-
tives include parent, spouse, child, brother, sister, or in-laws
(mother, father, brother, sister).
b. If two employees working for the company are subsequently
married, they will be allowed to continue their employment. How-
ever, they will be transferred to unrelated departments.
c. In small communities it may be necessary to employ close rel-
atives due to the manpower supply. The geographical area and
size of the community will be an essential part of the evaluation.
In such instances, a supervisor cannot supervise a close relative.
(See exceptions, part 3.)
2. Temporary, Part-Time, or Summer Employees.
Whenever feasible, the company will employ close relatives
who are students for temporary, par-time, or summer employ-
ment. They will be screened and selected upon their qualifications
the same as other applicants. In the event a close relative is hired,
he will not be allowed to work in the same department, division,
or location, or under the direct supervision of a relative.
3. Exceptions
If exceptions become necessary, the individual who is responsi-
ble for hiring must confer and receive final approval from the Di-
vision Manager. We encourage conference with the Employment
Manager of Corporate Personnel if the need arises.
Under no circumstances will the manager of a location, division,
or department be allowed to hire his spouse, child, parent, brother,
sister, or in-laws (mother, father, brother, sister).
S IJS interviewers used the LOL hiring criteria and had been directed
not to screen out applicants for "ridiculous reasons."
4 The large number of applicants confirmed statements by US that
there were sufficient individuals in the open job market to fill the project-
ed 200-220 positions.
1489
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
would arrange an interview with one of LOL's
seven interviewers.
References listed on the application were
checked either before or after an interview. Dawn
Meyer Hansen, the individual LOL assigned to
check references, was occasionally assisted by
other employees. In the hectic and rushed atmos-
phere the heavy applicant load created, Hansen
used a reference check form5 and made telephone
inquiries of former employers. In cases where an
applicant was recommended by a supervisor or em-
ployee of SF/LOL, she made no effort to contact
previous employers. She did not document each
reference check she performed, nor did she system-
atically follow the form in requesting information
on applicants.
One applicant, William Smith, wrote on his ap-
plication that he had "worked [apparently at SF]
before their labor dispute," but was off when the
last dispute occurred. The files of 11 other appli-
cants who were hired contained similar notations,
apparently written by LOL's interviewers.6 There
is no evidence of any interrogation concerning
union sympathies, and it is not clear when these
notations were made. When SF/LOL opened the
plant, the Union picketed as the hiring process con-
tinued, and some remarks could have been prompt-
ed by the pickets' presence.
On 26 February 1976, opening day, SF/LOL
had 69 employees, 22 or 23 (33 percent) of whom
were former employees. As of that date, SF/LOL
had received over 1100 applications: 850 from new
applicants, and 250 from former employees.
5 The form reads as follows.
Name of applicant
Name of Person Contacted
Company
Employment dates to
Job duties
How would you rate this person's job skills?
Poor Fair Average Good
a) Willing to do required task?
b) Conscientious about completing tasks?
c) Attitude? Problems
How would you rate this person's attendance record?
Poor Fair Average Good
a) Were there good reasons for absences
b) Tardiness?
How did this person get along with fellow workers?
With his Supervisor?
Did this person have any work related accidents while in your
employ?
How many What type
Do you think this person would be a good employee for Spencer
Foods?
(If no longer employed) Would you rehire this person?
Signed Date
6 For example, former employee Andis was quoted as stating that
there were "too many freeloaders," and that the "Union shouldn't protect
them." Applicant Bowers remarked that her cousin Lauritsen "messed a
lot of people up." Anthony P'odaga's job rating form states, "No interest
in union activity." Former employee Larry Christenson declared that the
Union "got what it deserved" when SF closed the Spencer plant.
SF/LOL hired approximately 8.8 percent of the
former employees who applied, but hired only 5.5
percent of the new applicants. SF/LOL also hired
approximately 20 to 25 employees to assist in plant
construction. Eight to 10, or 32-40 percent, of
these employees had worked for SF.
II. THE JUDGE'S FINDINGS
The General Counsel alleges that the Respond-
ent violated Section 8(a)(3) and (1) of the Act by
establishing conditions for recall to disqualify most
employees laid off at the Spencer plant, and by re-
fusing to recall most of those laid-off employees be-
cause of their support for the Union to eliminate
the Union as the employees' bargaining representa-
tive. The judge determined that the inherent and
foreseeable effect of the Respondent's conduct was
its tendency to give employees, applicants, and the
community the impression that the employees were
not recalled because of their union activity. He
found, under Great Dane,7 that the Respondent had
"created a situation whereby the failure to recall
employees according to past practice ha[d] neces-
sarily become inherently destructive of employees'
rights under the Act" and that the Respondent,
therefore, had the burden of proving that its
motive was economic. The judge also concluded
that, even if Wright Lines applied and proof of
actual motive was required, the General Counsel
adduced sufficient evidence to support an inference
that the employees' union activity was at least "a
motivating, if not [the] sole, factor" in the Re-
spondent's decision to hire a new work force under
new employment criteria. Under a Wright Line
analysis, the Respondent had to establish that "it
would have decided to hire new employees under
new criteria . . . in the absence of the employees'
[union activity]."
The judge concluded that the Respondent did
not meet its burden concerning the failure to recall
the former employees. According to the judge, the
Respondent rejected the former employees' offer to
return to work before it had definitive information
that the former work force was deficient. Pearson's
1977 letter to LOL, which identified the major
problems at the plant as being "an older facility, in-
consistent management, and a high-cost unproduc-
tive labor force," was not an adequate basis for the
decision because it failed to condemn the former
employees' workmanship or effort.9
7NLRB v. Great Dane Trailers, 388 U.S. 26 (1967).
8 Wright Line, 251 NLRB 1083 (1980).
g The judge found it significant that the letter discussed the history of
labor-management conflict and the "Union Versus Company" attitude,
and he concluded that the "prescription for success" included a "'free-
standing"' employee complement and a company which need not there-
fore deal with a union.
1490
SPENCER FOODS
The judge also concluded that the Respondent
violated Section 8(a)(3) and (1) by implementing
new employment criteria to screen out former em-
ployees and by applying those standards less rigid-
ly to new employees in order to avoid bargaining.
The judge found that the anti-nepotism policy was
not universally applied, that it "adversely affect[ed]
the hiring prospects of half the former work
force," and that Huron must have considered its
impact on the former work force.
Similarly, the judge concluded that the Respond-
ent's use of former employees' personnel files to
screen out applicants was discriminatory because
new employees did not labor under this handicap
and often had an opportunity to explain the extent
of any problem or disability. The same was true,
the judge found, of reference checks. Former em-
ployees were judged in light of the information dis-
closed in the personnel files, as supplemented by
supervisors' opinions, which the judge found were
"generalized, impressionistic, [and] conclusionary."
New applicants, in "contrast," were subjected to
reference checks that sought "generalized conclu-
sions" on matters such as attendance and asked
nothing about disciplinary warnings.
I disagree with the judge's use of the Great Dane
standard, his evaluation of the evidence under
Wright Line, and his conclusions.
III. ANALYSIS
The factual foundation of the judge's Great Dane
conclusion was his finding that the Respondent was
the same employer as previously existed at the
Spencer plant. We have reversed this finding.
What remains is the judge's determination that, be-
cause the Respondent failed to recall the former
employees and chose to recruit employees from
among all applicants, the Respondent violated the
Act. This analysis is at odds with well-settled law.
The Respondent, as a new employer, could lawful-
ly decide to hire new employees or to retain any or
all of the former employees.10 The only relevant
restriction is that such a decision could not be
based on union-related considerations. 1
The critical issue is the Respondent's motive in
making the various challenged hiring decisions.
The appropriate standard is that set forth in Wright
Line, 251 NLRB 1083 (1980). Under this standard,
the General Counsel must make a prima facie
showing sufficient to support the inference that
LO Burns, above, 406 U.S. at 280 fn. S. See also HowardJohnson, above,
417 U.S. at 262; Inland Container Corp., 267 NLRB 1187 (1983); Jim's Big
M, 264 NLRB 1124 (1982).
"' Burns, above, 406 U.S. at 280 fn. 5. Of course the Great Dane stand-
ard can and should be applied in appropriate cases. For the reasons set
forth herein, however, I strongly disagree with my colleagues that this is
such a case.
protected conduct was a "motivating factor" in the
employer's decision. Once this is established, the
burden shifts to the employer to demonstrate that it
would have taken the same action even in the ab-
sence of the protected conduct. Id. at 1089.
Concerning the Respondent's decision not to
recall the former work force, I find that the Gener-
al Counsel did not establish a prima facie case.
During negotiations leading to the purchase of the
Spencer plant, the Respondent was informed of the
multiplicity of problems causing the plant's poor
operations. The basic problems SF identified were
poor management, the older facility, and an unpro-
ductive labor force. In seeking to revitalize the
closed plant, the Respondent effected changes in
management, renovated the production facility, and
sought to upgrade the quality of the work force.
Nothing, other than the bare fact that the Respond-
ent was aware of SF's labor-management prob-
lems,'2 warrants the inference that antiunion con-
siderations, rather than a concern about the overall
quality of the unsuccessful business's work force,
motivated the Respondent's decision to hire from
among all applicants.
As the Board's decision in Jim's Big M, 264
NLRB 1124 (1982), demonstrates, nothing in the
Act precludes an employer from trying to avoid
the personnel mistakes of a failed enterprise. In
Jim's Big M the judge found a prima facie case that
the respondent had violated Section 8(a)(3) and (1)
of the Act by failing to rehire the former employ-
er's employees. The judge's finding rested on the
following factors: (1) the new employer's knowl-
edge that a union represented the employees; (2)
his failure to inquire into the former employees'
skills despite the fact that the new operations were
to be essentially the same; and (3) his interviewing
all the applicants he did not already know, except
the former employees, despite the fact that those
former employees had all filed individual applica-
tions. The Board held that "in the circumstances
herein, absent a showing of union animus or other
unlawful reason for the alleged discriminatory con-
duct, the evidence relied on by the [judge] in find-
ing a prima facie case was insufficient to raise an in-
ference that the employees' status as union members,
rather than, for example, their status as former em-
ployees of an unsuccessful business, was in any way
related to Respondent's decision not to hire them." Id.
at fn. 2 (emphasis added).
I" This fact apparently formed the basis for the judge's conclusion that
the "prescription for success" included a "'free-standing"' employee com-
plement and a company which need not deal with the Union. For the
reasons set forth herein, however, I find the judge's conclusion unwar-
ranted.
1491
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
The facts in Jim's Big M more strongly indicated
the presence of antiunion motive than do the facts
here. In the instant case, the Respondent informed
the Union that it would accept the applications of
all employees, and then evaluated, interviewed, and
hired many of those former employees, despite
knowledge of specific problems with the former
work force as a whole. The employer in Jim's Big
M was aware only of "rumors" of employee theft
and declined even to interview-much less hire-
the former employees who applied, despite the fact
that every other applicant, save those the employer
personally knew was at least interviewed. Of the
two, Jim's Big M more strongly compels finding a
violation. If the facts of that case were insufficient
to warrant the inference of antiunion motive, the
same is true here.
Nor can I agree with the judge's conclusion that
the Respondent's hiring criteria and practices vio-
lated Section 8(a)(3) and (1) of the Act. These con-
clusions ultimately rest on two bases: (1) that the
anti-nepotism hiring criterion was not a uniformly
applied rule that the Respondent could lawfully
implement at the Spencer plant; and (2) that the
Respondent could not properly make hiring deci-
sions based on the information in the former em-
ployees' personnel files. I find insufficient evidence
to support these two determinations.
First, the Respondent's anti-nepotism rule, in-
cluded in the hiring criteria,l 3 was formally imple-
mented in 1973, and has been applied to applicants
throughout the LOL system since that time,
except-as the rule states-where the size of the
community and the employee pool require relax-
ation of the ban, or where "close relatives who are
students" are employed for temporary, part-time,
or summer employment.' 4 With one possible ex-
Is The other criteria the Respondent established were clearly directed
toward objectively evaluating an applicant's potential and desire to work
for the new enterprise; ability, interest, job stability, wage expectations,
medical problems, absenteeism, disciplinary concerns, and accident prone-
ness were all considered.
14 The record shows that exceptions were made on a plant-by-plant
basis by the officials in charge of hiring. The Respondent's corporate
staffing manager, Terrance Koves, testified that the rule was not applied
at the Respondent's Albert Lea plant because the Respondent had diffi-
culty securing a sufficient number of employees. Similarly, William
Huron, LOL's industrial relations director, explained that the rule was
not applied at the Respondent's Schuyler plant because Schuyler fit
within the small community exception. The population figures adduced
by the General Counsel, and on which my colleagues rely, are inconclu-
sive because the availability of qualified applicants is determined by many
factors other than population, including the number of employers com-
peting in the same labor market for the same employees. The Respond-
ent's initial decision to apply the anti-nepotism rule at the Spencer plant
is amply supported by UIS assurances, later borne out by the large
number of applicants, that there were sufficient individuals in the job
market to fill the projected positions. Accordingly, contrary to my col-
leagues, I cannot find that the General Counsel met his burden of prov-
ing that the Respondent discriminatorily applied its anti-nepotism policy.
ception, all the relatives hired by SF/LOL fit
within the rule's stated guidelines. Curtis McClin-
tic, the possible exception, was related to an office
worker and was hired as a temporary employee. It
is not clear that he was also a student. I find the
existence of this one variation to be insufficient to
warrant the inference that the Respondent's use of
the rule was motivated by unlawful considerations.
Similarly, the fact that the rule was not enforced to
disrupt the employee complement already in place
at two newly acquired unionized plants is insuffi-
cient to warrant an inference of discrimination. The
reason for the exception, avoiding disruption in on-
going operations, did not exist at the closed Spen-
cer facility. Therefore, the Respondent's decision
to apply the anti-nepotism rule at the Spencer
plant, a decision consistent with its past practice,
cannot be used as an indication of impermissible
motive.
This conclusion is supported by Inland Container
Corp., 267 NLRB 1187 (1983), in which the Board
found that the employer was entitled to rely on its
past practice and preference in refusing to hire any
of the former employer's employees simply because
they were experienced. The employer lawfully ap-
plied its policy of hiring a totally inexperienced
production complement to avoid unspecified "bad
habits," even though the former employer had
been a successful enterprise, the former employees
were highly qualified to perform the new work,
there was no evidence that the former employees
could not have been successfully retrained the
"Inland way," and the employer's operations had
not at the time of the hearing reached the previous
production level.' 5 Past practice validates the Re-
spondent's action in the instant case no less than it
did for the employer in Inland.
Second, with respect to the Respondent's use of
former employees' personnel files in the hiring
process and the sanction given that practice by the
hiring criteria, I again cannot find sufficient evi-
dence of unlawful motivation. No party challenges
the general accuracy of the information contained
in the files or argues that an employer cannot rea-
sonably rely on such information in making em-
ployment decisions.' The basic attack is on the
"1 The Board also found in Inland that the employer's (I) hiring some
of the predecessor's clerical and supervisory personnel, (2) hiring two ex-
perienced employees at another plant, and (3) refusing to hire a clearly
qualified mechanic for nonproduction work in a job the employer had
great difficulty filling, were insufficient to show that the employer's ra-
tionale was pretextual. Similarly, the employer's statement that it intend-
ed to start the plant and operate it on a nonunion basis, unless and until
the union could win an election, was simply a "candid explanation of [the
employer's] lawful intentions."
1" To find that the Respondent's use of the former employees' files in-
dicates an antiunion purpose requires a subsidiary finding that the Re-
Continued
1492
SPENCER FOODS
Respondent's alleged failure to give the benefit of
the doubt to former employees while extending it
to new applicants. It is not entirely true, however,
that the Respondent failed to give former employ-
ees the benefit of the doubt. The Respondent hired
20 former employees despite their not meeting the
terms of the hiring criteria. 7 In addition, as the
judge himself finds, the Respondent did not always
simply accept the information in the files; to the
contrary, the Respondent asked supervisors or
other employees for their opinions of former em-
ployees. These inquiries were analogous to the Re-
spondent's reference checks of new applicants and
showed a willingness to evaluate former employees
in light of whatever favorable or unfavorable infor-
mation was readily available.
The only factor that could arguably warrant an
adverse inference is that the Respondent thought
some applicants' union sentiments were significant
enough to note during the interviews. Considering
the record as a whole, however, I cannot conclude
that this fact alone warrants the inference that the
Respondent's entire hiring process was tainted by
unlawful considerations. Only 11 such notations
were made, and there is no evidence that the Re-
spondent interrogated applicants or rejected any
who expressed "pro-union" sympathies.'s
In sum, I do not find sufficient evidence on the
record as a whole to warrant the conclusion that
the Respondent's hiring decisions or practices at
the Spencer plant were based on impermissible
considerations. Accordingly, I would dismiss that
portion of the complaint.
APPENDIX
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
The National Labor Relations Board has found
that we violated the National Labor Relations Act
and has ordered us to post and abide by this notice.
WE WILL NOT establish hiring criteria designed to
discriminatorily disqualify employees previously
employed by Spencer Foods, Inc. at its Spencer
plant and WE WILL NOT apply our hiring criteria in
a discriminatory manner because of those individ-
uals' membership in, representation by, and activi-
ties on behalf of the United Food and Commercial
Workers International Union, Local 152, AFL-
CIO.
WE WILL NOT tell job applicants that they will
not be hired in the future if they refuse to cross a
lawful union picket line.
WE WILL NOT in any like or related manner
interfere with, restrain, or coerce employees in the
exercise of the rights guaranteed them by Section 7
of the Act.
WE WILL offer individuals who would have been
hired to available positions in and after January
1979 employment in the positions for which they
would have been hired but for our unlawful dis-
crimination or, if such jobs no longer exist, to sub-
stantially equivalent positions, dismissing, if neces-
sary, any and all persons hired to fill such position.
WE WILL place on a preferential hiring list all re-
maining individuals who would have been hired
but for the lack of available jobs. WE WILL make
whole with interest all individuals we would have
hired but for our unlawful discrimination for any
loss they may have suffered by reason of our fail-
ure to hire them.
SPENCER FOODS, INC.
spondent could not lawfully use or rely on the information they con-
tained. I cannot agree with that conclusion; to the contrary, I find it un-
reasonable to expect an employer in the Respondent's position, sorting
through 60 to 100 applicants a day, to ignore such information.
" Marlene Weise, Richard Roth, Dale Nelson, Richard Hott, Jerry
Hoist, Shawn Drenth, Roger Christenson, Peter Brustares, Larry Chris-
tenson, Dale Barker, Steve Wallace, Raymond Heller, James Heller, Dor-
rinds Goodale, Wayne Clark, Alvin Andis, Valerie Shatto, Jose Osegura,
Salvador Lopez, and Larry Lang.
is In considering the Respondent's motivation, it is also noteworthy
that the Respondent retained the former employees, recognized the union
representatives, and honored the collective-bargaining agreements at its
Schuyler, Nebraska, and Oakland, Iowa, plants. This conduct is consist-
ent with, if not indicative of, a lack of union animus. See Inland Contain-
er Corp., above, 267 NLRB 1187, 1190 tamicable relations with unions
elsewhere indicates lack of union animus).
DECISION
STATEMENT OF THE CASE
THOMAS R. WILKS, Administrative Law Judge: Pursu-
ant to an unfair labor practice charge filed by Amalga-
mated Meat Cutters and Butcher Workmen of North
America, Local 152, AFL-CIO, herein referred by its
correct name to reflect its recent merger as United Food
and Commercial Workers International Union, Local
152, AFL-CIO, herein called the Union, against Spencer
Foods, Inc., herein called Respondent, on May 14, 1979,
and a complaint issued by the Regional Director for
Region 18 on October 4, 1979, and an answer timely
filed by Respondent, a hearing was held before me in
1493
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Spencer, Iowa, on 20 days spaced intermittently through-
out the spring, fall, and winter of 1980, ending on De-
cember 17, 1980. Briefs were filed by all parties on or
shortly before the extended deadline of April 16, 1981.
The issues litigated were whether Respondent as a con-
tinuing corporate business or alternatively as a successor
employer violated Section 8(a)(1), (3), and (5) of the Act
by the following conduct.
(1) In and after December 1978, interfering with,
restraining and coercing employees in the exercise
of their rights under the Act by interrogation of
union activities, threats of refusal of employment
because of union activity, and statements that Re-
spondent would not permit employees to be repre-
sented at its Spencer, Iowa plant which had been
reopened after a lengthy closure, in violation of
Section 8(a)(1) of the Act.
(2) In or about December 1978 and January 1979,
establishing conditions and criteria for the eligibility
for recall of employees in order to disqualify most
employees laid off at its Spencer, Iowa plant, and
refusing and failing to recall most of those laid off
employees because of their membership in, repre-
sentation by, and activities in support of the Union,
and in order to eliminate the Union as the employ-
ees' incumbent collective-bargaining representative
in violation of Section 8(a)(3) and (1) of the Act.
(3) In December 1978 following a decision to
reopen and resume operations at its Spencer, Iowa
plant, withdrawing recognition of and refusing to
bargain with the Union as the lawfully designated
collective-bargaining agent of employees at that
plant; and unilaterally establishing conditions and
criteria for the recall of its laid-off employees which
resulted in the disqualification of most of those em-
ployees; and subsequent to the reopening of its
Spencer, Iowa plant unilaterally changing wages,
benefits and other terms and conditions of employ-
ment of employees at the Spencer, Iowa plant in
violation of Section 8(a)(5) and (1) of the Act.
On the entire record in this case, including my obser-
vation of the witnesses and their demeanor and in con-
sideration of briefs, I make the following'
FINDINGS OF FACT
I. THE BUSINESS OF RESPONDENT
At all times material herein, Respondent, a Delaware
corporation, with an office and place of business in Spen-
cer, Iowa, called Respondent's Spencer plant, has been
engaged in the slaughtering and processing and nonretail
sale and distribution of beef and related products. During
the calendar year ending December 31, 1978, which
period is representative of its operations during all times
material herein, Respondent, in the course and conduct
of its business operations, sold and shipped from its Spen-
cer plant products, goods, and materials valued in excess
I The parties' posthearing agreement to amend 70, 71, 73 is hereby ap-
proved. The amendments are reflected on the attached Appendix B.
[Omitted from publication.]
of $50,000 directly to points outside the State of Iowa.
During the calendar year ending December 31, 1978,
which period is representative of its operations during all
times material herein, Respondent, in the course and con-
duct of its business operations, purchased and received at
its Spencer plant products, goods, and materials valued
in excess of $50,000 directly from points outside the
State of Iowa.
It is admitted, and I find, that Respondent is now, and
has been at all times material herein, an employer en-
gaged in commerce within the meaning of Section 2(2),
(6), and (7) of the Act.
11. THE LABOR ORGANIZATION
It is admitted, and I find, that the Union is now, and
has been at all times material herein, a labor organization
within the meaning of Section 2(5) of the Act.
A. Events Leading to and Including Plant Closure-
Reopening- Withdrawal of Recognition-Changes in
Operation
Spencer Foods, Inc. (herein S.F.) commenced its cor-
porate existence in 1952 as a beef packing enterprise. It
maintained its headquarters and a slaughtering and fabri-
cation plant thereafter in Spencer, Iowa. By 1977 S.F.
also operated five other plants, i.e., a slaughter and fabri-
cation plant at Schuyler, Nebraska, which had been con-
structed in 1967; a fabrication plant in Hartley, Iowa;
two tanneries in Wisconsin and Massachusetts; and a
processed meats plant in Miami, Florida.
The Union had represented a unit of employees at the
Spencer plant since its inception and had maintained a
collective-bargaining relationship and a series of collec-
tive-bargaining agreements with S.F. until the expiration
of the most recent agreement on October 30, 1977,
which coincided with the closure of the Spencer plant.
In October 1977, there were employed at the Spencer
plant approximately 420 unit employees, all members of
the Union.2
S.F. and the Union until 1971 engaged in a pattern of
bargaining which was determined by such major packers
as Armour, Swift, and Wilson. In 1971 S.F. sought to
break away from this pattern in order to counter a trend
to lower marginal profits. An 8-month strike ensued.
This was the first strike it had experienced. S.F. goals in
bargaining that year were only partially achieved. In
1974 another 3-month strike resulted before a contract
was reached. By the fall of 1977 S.F. entered negotia-
tions with an assertion to the Union that its operations at
Spencer had reached the point of negative profits, and it
requested a 1-year wage and benefits freeze. That pro-
posal as well as a modified proposal for economic relief
were both rejected by the Union pursuant to a vote of its
members.3 Thereafter, the Spencer plant was closed. Ex-
2 The unit consists of:
All employees employed by Respondent at its Spencer, Iowa facility;
excluding office and clerical employees, General Manager, Superin-
tendent, Foremen, Livestock Buyers, Livestock Buyer Trainees,
Salesmen, Chief Engineer, Electronic Scale Maintenance Man,
guards and supervisors as defined in the Act.
a The Union had offered to work without a contract pending negotia-
tions. That offer was rejected by S.F.
1494
SPENCER FOODS
ecutive Vice President William Eastwood testified, "We
did not feel that we could commit the economic re-
sources to continue with the uncertainty [sic]." S.F. and
the Union bargained about the effects of the closure. An
unfair labor practice charge was filed by the Union con-
cerning the closure. A dismissal of the charge by the Re-
gional Director was sustained by the General Counsel.
S.F. thereafter commenced efforts to sell the Spencer
plant, and to dispose of the tanneries and the Miami and
Hartley plants which it had determined were also un-
profitable.
Prior to the employees' rejection of S.F.'s bargaining
proposals, S.F. had communicated with the employees
by letter dated October 25, 1977, wherein the employer's
bargaining proposals were explained and the employees
were told:
For the above reasons and especially due to our
cattle procurement program, we must know by
Thursday whether to plan for next week or to begin
to wind down operations. We have offered you as
members of the Union body a one-year contract. If
you do not vote on this proposal or if you should
reject the proposal, there will be no further work
after this week. Your lack of work will be due to a
"labor dispute," and our lawyer has informed us
that YOU WILL NOT BE ENTITLED TO UN-
EMPLOYMENT COMPENSATION.
On October 28, the last cattle were slaughtered and on
Saturday, October 27, the last cattle loaded out. The fol-
lowing notice to employees was published by S.F:
NOTICE
Per Mr. Pearson's letter, our final offer has been
presented to your Union Committee. Since we have
not received an answer on this final offer, and we
have suspended cattle buying at the Spencer Plant
we cannot operate on Monday, October 31, 1977. If
your vote for a One-year Contract is Yes prior to
October 31, 1977, we will return to work as soon as
possible.
Mike Sanem
Plant Manager
On Monday, October 31, the plant doors were locked
and the following notice was distributed to employees
who appeared for work at the plant gate.
TO ALL EMPLOYEES
No notice has been given to the Company, but
unofficial reports are that a statement to KICD was
that you have voted 396 to I to reject the Compa-
ny's offer. As stated in my meeting and letter to
you, we are closing the plant and will place it up
for sale. After more than twenty-five years in Spen-
cer, I deeply regret having to take this action.
/s/ Gerald L. Pearson
Chairman
Shortly after the Spencer plant closure, S.F. contacted
various local groups including the Iowa Development
Commission and the Sioux County Cattle Feeders Asso-
ciation in an effort to sell the Spencer plant. In late 1977,
prior to closure, contact had been made with Land of
Lakes, Inc. (hereinafter LOL). At that time LOL was
engaged in a process of investigating the prospective
purchase of packing plants in order to gain entrance into
the red meat business. LOL group Vice President
Ronald Dudley was charged with the responsibility of
searching out desirable operations which could be ac-
quired by LOL. LOL is a farmers cooperative doing a
multibillion dollar business as an agribusiness and is
owned by farmer shareholders. It differs from a normal
corporation in that its only shareholders are farmers who
purchase from it for their own benefit. In essence, it is a
marketing and supply corporation which supplies petro-
leum, seed, and feed to its members and which markets
dairy and poultry products.
Dudley testified that in the fall of 1977 LOL became
aware of S.F.'s possible interest in selling its Spencer
plant. A meeting was thereafter arranged between repre-
sentatives of LOL and S.F. in Lincoln, Nebraska, at
which information was exchanged. Dudley testified that
he sought a vast amount of information concerning the
worthiness of an acquisition, i.e., "financial performance,
ability to sustain itself, any problems that it might have
had." Dudley conceded his awareness of S.F.'s labor
problems. According to Dudley, LOL decided to pursue
negotiations with S.F., which he testified commenced
prior to the Spencer plant closure, on October 5, 1977.
At that time it was LOL's desire to engage in an assets
purchase, and it was S.F.'s desire to sell all but the suc-
cessful Schuyler plant. As negotiations proceeded, LOL
desired to purchase only the Spencer plant and the
Schuyler plant.
By letter dated November 15, 1977, President, Chair-
man, and Chief Executive Officer Gerald L. Pearson
communicated with LOL President Ralph Hofstad. That
letter commenced as follows:
In your consideration of the possible acquisition
of Spencer Foods, Inc., I am sure that the erratic
performance of our Company and the disappointing
results of the last twelve months raise many ques-
tions as to the future profitability of the Company.
In this letter, I will attempt to summarize the recent
history of our Company and the prospects for the
future.
Pearson described the "dramatic" changes that had tran-
spired in the beef industry, including the impact of high
labor costs. He predicted: "In the long run, the low cost
producers [largely synonymous with low wage rates and
efficient facilities] will prevail in the beef slaughter busi-
ness." He cited a quotation from the chairman of a major
packer to the effect that their 1976 labor contract
"sounded the death knell" for their participation in the
beef slaughter business.
Pearson described in some detail the recent nonper-
formance of S.F. He concluded his description of those
problems with the following:
1495
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
The 1976 expansion of the Spencer plant was done
as part of a program to lower unit costs and in-
crease by-product recovery. For a number of rea-
sons, these cost savings did not materialize. The ex-
tremely low unemployment rate in the Spencer area
combined with a lack of effective personnel recruit-
ing resulted in a poor addition to the work force.
The already poor labor relations at the Spencer
plant deteriorated further. The lack of strong plant
management compounded the situation, reinforcing
the Union Versus Company attitude among the
work force. These factors coupled with a substan-
tial wage increase, high absenteeism, inordinate
workmen's compensation claims, and a poor by-
product recovery made profitable operation diffi-
cult. With a change in management philosophy and
the appointment of Mike Sanem as plant manager,
conditions began to improve prior to the plant clos-
ing. However, we felt profitability was not possible
with immediate increased labor costs.
Next Pearson predicted the future of S.F. within the
context of a changing industry, and set forth an analysis
S.F.'s then current operations and "the action which
needs to be taken to insure a bright future." The
Schuyler operation was described as efficient and highly
productive having a "reliable workforce" and excellent
management. The Schuyler facility was described as the
finest in the industry. Its future was glowingly described.
With respect to the Spencer plant, Pearson explained
that, despite its location in an excellent cattle procure-
ment area and the expenditure of $3.5 million in 3 years,
and certain freight advantage operations, there were
marginal profits since 1970. His analysis of the Spencer
plant problem set forth in that letter is of utmost signifi-
cance. Dudley testified that the analysis was studied by
LOL thereafter and was concluded to have had merit.
Pearson's analysis is as follows:
The poor operating results have been due to an
older facility, inconsistent management, and a high-
cost unproductive labor force.
With the recent capital expenditures, most of the
inefficiencies created by the older facility have been
corrected. The outdated hide operation and the lack
of a new kill floor still inhibit production, but the
facility should be competitive.
Prior to 1970, the Spencer plant paid a labor rate
comparable to that of the old major packers (Swift,
etc.). Management correctly predicted that the inde-
pendent packers with substantially lower labor rates
would ultimately dominate the beef slaughter busi-
ness. (Today IBP slaughters substantially more
cattle than all the older major packers combined.)
The Spencer plant took an eight-month strike to
break from the standard contract. The victory was
partial. Although the base hourly rate basically fol-
lowed the IBP-Dakota City rate, more than twice
the job classifications (at $.05 per hour per classifi-
cation), substantial additional fringes including a
pension and unsatisfactory maintenance qualifica-
tions placed the labor costs for the plant at a sub-
stantial disadvantage. More importantly, productivi-
ty and pride in workmanship suffered.
During this period, management failed to carry
out a consistent labor relations policy. The vacilla-
tion between a hard-line and soft-line approach to
labor brought on by a succession of plant managers
lent little credibility to the Company's position.
None of these managers prior to Mike Sanem at-
tempted to build the rapport and earned respect of
the work force, necessary to effectively operate the
plant.
As is obvious, the greatest need at the Spencer
plant is improvement of the management-labor rela-
tionship. Mike Samen can accomplish this objective.
The attached plan provides for an opening of the
Spencer plant on a one-shift basis (as opposed to the
present two-shift) with a substantially reduced labor
force on a free-standing basis. With the daily over-
time flexibility allowed by one-shift and a six-day
work week, two-thirds of the present volume can
be obtained at a reduced cost. Working with a
smaller labor force provides a better atmosphere to
build the type of relationship with labor necessary
for successful operation.
The one-shift operation of the plant presents a
great flexibility for the plant. Depending upon op-
portunities arising in the beef industry, part of the
existing Spencer facility could be converted to a
fabrication facility. The only major addition would
be a box storage facility, as much of Hartley's
equipment could be utilized. A hindquarter fabrica-
tion operation (which historically has a higher fabri-
cating margin) would fit well with the current
kosher kill. This Spencer fabricating operation is
only a possibility and not part of the current plan.
Assuming that stable labor relations within a com-
petitive cost structure can be implemented, the Spen-
cer facility should earn between $500,000 and
$1,500,000 annually under a kosher program. New
ownership would seem to be the best vehicle to ac-
complish that goal. [Emphasis added.]
With respect to S.F.'s other plants, Pearson suggested
changes in their operation or disposition. By that time
the tanneries had already been leased to a third party
with an option to buy.
Dudley testified that, although LOL found merit to
Pearson's analysis of S.F.'s problems, the plan for
changes attached thereto was not automatically adopted
by LOL which considered it merely as part of a "sales
pitch." LOL, he testified, desired to make its own plans
for improvement. However, certain essential elements of
that plan were implemented. 4 Dudley did not testify.as
4 Pearson's plan proposed a reduction in wage rates; payment of an
average rate of $6 per hour; elimination of 18 cleanup work jobs by sub-
contracting; and reduction in fringe benefit costs. When the plant subse-
quently reopened, the wage paid was $6 per hour, cleanup work was sub-
contracted, and also the kill floor and hide area were remodeled at a coat
of $1.3 million. Although the fringe benefit cost is unknown, Dudley
clearly agreed that the cost should be reduced.
1496
SPENCER FOODS
to how he interpreted Pearson's reference to a "reduced
labor force on a free-standing basis."
Thus in a matter of weeks subsequent to the plant clo-
sure, S.F. was no longer pursuing a plant to dispose of
certain assets but rather was soliciting LOL to acquire an
ongoing business, as Pearson in his letter refers to the
"acquisition of Spencer Foods, Inc.," and provides a pro-
spectus for the entire operation under new ownership.
At this point the question arises: What was the rela-
tionship of the unit employees to S.F. during the hiatus
which ensued subsequent to the Spencer plant closure
and its reopening 16 months later? In resisting the unit
employees' attempt to obtain unemployment compensa-
tion, S.F. represented to the Iowa Department of Job
Service Claims Department, on November 22, 1977, that
its operations ceased following a failure to reach a col-
lective-bargaining agreement and that the unit employees
were unemployed as a result of a "labor dispute between
the Company and the Union." The employer's position
was rejected and it was concluded by the state agency
that the employees were unemployed because the plant
was closed and put up for sale. However, there was no
indication that the state agency was privy to S.F.'s at-
tempts to seek acquisition of an ongoing enterprise by
LOL and to reopen the Spencer plant as stated in Pear-
son's letter of November 15 as a successful venture under
"new ownership."
About December 15, employees entitled to accrued
vacation pay received vacation checks by mail with an
attached note signed by Plant Manager Mike Sanem
which stated: "Pursuant to the contract with your
Union, we are paying you your accrued vacation checks
in conjunction with the Spencer plant closing .... This
check is your final compensation payment from Spencer
Foods, Inc."5
Negotiations between S.F. and LOL continued. LOL
persisted in its desire to acquire only the Spencer and
Schuyler plants for which in January 1978 it made an
offer of $10 million. It also desired to pursue its policy of
acquiring those facilities by means of an assets purchase.
As negotiations proceeded, it became clear that a simple
assets purchase would effectuate a substantial Federal tax
disadvantage. Either the purchaser, or the seller, depend-
ing on contractual undertaking, would have been re-
quired to pay the Internal Revenue Service a recapture
tax with respect to certain investment and depreciation
allowances if the seller did not continue in existence for
a prescribed period of time.
It was therefore agreed between the parties that in
order to avoid this tax liability LOL would purchase the
bulk of shares of S.F. stock (which was in large part
held by a few individuals of whom Pearson was major
shareholder) and would acquire the remaining stock sub-
sequently by a reverse stock split, the details of which
need not be recited herein. Furthermore, it was agreed
that the major stockholders would undertake or warrant
that failing the disposal of the four unwanted facilities
a In May 1979, S.F. filed an annual report with the U.S. Internal Reve-
nue Service with respect to pension plans for the taxable year ending Oc-
tober 28, 1978, wherein it claimed that no financial statements were pre-
pared for the unit employees' plan because the employees were "on
strike" as of the beginning of the plan year and the plan was terminating.
that they would individually purchase same. The major
stockholders further warranted that they would assume
liability for certain lawsuits, etc., that had been incurred
prior to the stock sale.
Initially LOL sought to accomplish its objective
through the creation of a subsidiary cooperative which it
created for this purpose, i.e., the Mid-West Cattle Pro-
ducers Cooperative. That entity existed from July 1978
through September 1978 but failed to achieve adequate
funding and LOL decided to proceed to acquire the S.F.
stock directly. The initial shareholder agreement of July
11, 1978, was terminated and a revised shareholder
agreement was executed on September 2~, 1978, which
set forth the conditions for the tender offer of stock.
Under the agreement LOL paid $14 a share for common
stock and $20 a share for preferred stock. An escrow
fund of S1 million was created with respect to the above-
described warranties by the major S.F. stockholders of
whom there were five and who are described in this pro-
ceeding as "insider" shareholders.
On October 2, 1978, a tender offer was issued and sub-
sequently accepted before the October 27, 1978 expira-
tion date. Ninety-five percent of shares were tendered,
and the balance acquired by the reverse stock split plan.e
Meanwhile, information as to these negotiations
became public. In February or March 1978, Union Presi-
dent Lauritsen read in the Wall Street Journal an ac-
count of the LOL plan to acquire S.F. He also read
other news articles concerning the creation of the Mid-
West Cattle Producers Co-op. About March 18, 1978,
Lauritsen sent a letter to S.F. addressed to Eastwood,
and to LOL Industrial Relations Director Huron where-
in he alluded to press reports of LOL's attempts to pur-
chase the stock or assets of S.F. and he identified the
Union as bargaining agent for unit employees at the
closed Spencer plant. In that letter Lauritsen welcomed
what he referred to as announced plans to reopen the
Spencer plant under new ownership and stated that "the
employees of this plant are available for return to work
upon notice." He further stated: "We hereby request an
opportunity to meet with the appropriate representatives
of management to resume negotiations with respect to
the terms and conditions of employment at the plant."
During the summer and fall of 1978 Lauritsen contin-
ued to receive information as to the tender offer of stock
but received no responses from S.F. or LOL. On August
18, 1978, the Union, in writing, requested information
data from the Respondent concerning the tender offer.
Having received no responses, Lauritsen, on November
7, 1978, again addressed letters to S.F. and LOL wherein
he alluded to press reports of the stock purchase and
plans to reopen the Spencer plant. He again reasserted
the Union's position as bargaining agent for the Spencer
plant unit employees, and again recited the employees'
6 In the tender offer there is a reference to the closed status of the
Spencer plant and a statement that S.F. had made efforts to sell it but
that S.F. is uncertain of what course of action it would follow in the
event of nonacceptance of the tender offer. Furthermore, the only refer-
ence to the Union therein is that S.F. and the Union had been unable to
reach agreement on a contract and that as of the date of tender offer no
agreement had as yet been reached.
1497
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
readiness to return to work and the Union's desire to ne-
gotiate terms and employment conditions.
On November 17, 1978, Huron responded by letter to
Lauritsen wherein he asserted that LOL did not current-
ly have employees at Spencer, Iowa, nor did it "contem-
plate the hiring of employees at such location." He
stated that S.F. had been requested to respond to Laurit-
sen's letter. By letter dated December 13, 1978,
Eastwood, under the letterhead of S.F., responded to
Lauritsen. He confirmed that plans were being reviewed
to reopen the Spencer plant and said that an announce-
ment was imminent. He stated that an announcement
would also be made "as to the time and manner of
making application for employment," and, "such applica-
tions will be taken from all interested persons, including
both former employees of Spencer Foods at the Spencer,
Iowa operation and other interested persons." He assert-
ed that since October 31, 1977, there had been no pro-
duction employees at that plant and that they had been
"terminated" on that date. Further, he stated that for this
reason "and the fact that the plant will be opened as a
new operation for the benefit of Land O'Lakes farmer
owners, we must reject your claim and inform you that
there is no legal obligation to bargain with your Union
over terms and conditions of employment when the
Spencer plant opens." Accordingly, he rejected the offer
to meet with Lauritsen.
After the acquisition of S.F. stock, certain changes
were effectuated. S.F. continued as a corporate entity
with its headquarters located at Spencer, Iowa. Its arti-
cles of incorporation were amended so that it was able to
operate as a farmer cooperative. S.F.'s board of directors
was replaced by board members and managers of LOL.
Hofstad became chairman of the board of S.F. Pearson
remained as president of S.F. and became vice president
of LOL's new "beef division," i.e., an internal reference
to the Spencer and Schuyler operations. In fact, Pearson
remained as the chief executive officer of S.F. and re-
mained responsible for day-to-day operations, as Dudley
testified, because of his experience and proficiency. Pear-
son became subordinate to Dudley who in turn reported
to Hofstad. Dudley operated out of LOL's Minneapolis
headquarters as group vice president of "red meats."
Dudley was not in charge of day-to-day Spencer and
Schuyler operations, but Pearson was in control of S.F.
as before but now subject to goals, objectives, and finan-
cial policy as determined by LOL.
Following the stock purchase, all administrative func-
tions of S.F. continued to take place at Spencer, Iowa,
including payroll, sales, purchases, etc. Dudley testified
that following the lapse of time required to escape the
IRS tax recapture problems, the corporate "shell," as he
characterized S.F., will be dissolved and all management
and administration will be transferred to a new headquar-
ters in Minneapolis.
Eastwood, who had been executive vice president,
thereafter became vice president of operations of S.F.
but surrendered all financial responsibility to LOL.
After the stock purchase, LOL provided advice to
S.F. with respect to transportation and carriers, financing
and credit management. Cattle was thereafter purchased
by checks issued by LOL although actual purchasing
was done at Spencer by S.F. Attempts were made to
purchase cattle from the cooperative farmer members but
purchases of local cattle continued.
With respect to the Schuyler plant, operations contin-
ued without hiatus and without change. The local man-
agers, supervisors, and the approximately 1,000 produc-
tion and maintenance workers were unchanged. Recogni-
tion continued of Local 106, United Food and Commer-
cial Workers International Union, AFL-CIO, and the
collective-bargaining agreement with that unit was hon-
ored. 7
The Hartley plant was purchased by the prior "insid-
er" S.F. stockholders and thereafter closed in 1977.
Those stockholders also purchased the Wisconsin Tan-
nery, and the remaining facilities were disposed of or
closed.
With respect to the Spencer, Iowa plant, during the
hiatus it had been maintained by a small caretaker crew.
The former supervisors and managers had, according to
Eastwood, been "dismissed." Subsequent to Pearson's
November 15, 1977 letter to Hofstad, there is no evi-
dence that S.F. made any effort to sell that plant to any
third party. Indeed, Pearson's proposed analysis project-
ed the reopening of that plant under the ownership by
LOL of S.F.8 Although Eastwood and Dudley testified
in depth as to the transistion of ownership, there was no
testimony to the effect that any consideration was given
by LOL to disposing of the Spencer plant. In fact, it was
the original objective of LOL to acquire and operate
both Spencer and Schuyler plants. It seems clear then,
from at least as early as November 1977, it was ultimate-
ly intended to reopen the Spencer plant upon the acquisi-
tion of ownership of S.F. by LOL, and further that S.F.
had abandoned its intention of disposing of the Spencer
plant in light of LOL interest in it as part of a package
acquisition. Furthermore, I conclude that the only reason
the Spencer plant was not reopened earlier was the delay
resulting in negotiating and executing a transfer of stock
from S.F. shareholders to LOL.
The question next arises: What of the status of those
unit employees who were unemployed because of a
short-lived desire to sell the Spencer plant? In November
1977, as we have seen, LOL informed the Union that it
had no employees in Spencer and had no intention of
hiring any.9 S.F. informed the Union in December 1978
that the former employees had been terminated at the
time of the plant closure.
Dudley's testimony regarding the decision of reopen-
ing of the Spencer plant and the decision of whom to
employ there is marked by an extreme economy of infor-
There is no history of labor problems at Schuyler. No strikes have
occurred there. The collective-bargaining contract there provides for a
less costly wage and benefit package than that of Spencer prior to clo-
sure.
8 Eastwood testified that the value of the Spencer plant itself was
"pretty low." In fact, S.F. had only an equitable title to the plant. Legal
title passed to a governmental creditor under a bond arrangement. The
liability on that bond was "inherited" or retained by the S.F. corporate
entity after stock acquisition as did certain other liabilities.
9 This latter assertion appears to conflict with Respondent's position
that S.F. ceased to exist and was replaced by a de facto subdivision of
LOL.
1498
SPENCER FOODS
mation. The thrust of his testimony as a whole suggests
that the plant reopening was a foregone conclusion, i.e.,
that LOL needed the Spencer plant as part of its red
meat operation. There is no testimony as to who decided
or when it was decided to reopen that plant. Further-
more, there is no testimony that any manager or officer
of LOL entertained the idea of reinstating the prior work
force as a group as offered by Union President Lauritsen.
A most natural question in such circumstance is why a
new plant owner would not want to employ the same
employees who had worked at the same plant for many
years doing essentially the same jobs. The Respondent
argues that the old work force was undesirable. Much
evidence was submitted to demonstrate that the work
force ultimately hired was more productive. But this evi-
dence, assuming its validity, consists of subsequent post-
reopening studies which derives its data of the new oper-
ations from a period commencing in November 1979.
Similarly, testimony as to various unsatisfactory elements
of the prior work force, e.g., slowdowns, hidden switch-
es that disrupted production, etc., is not relevant to the
issue of motivation for the refusal to reinstate employees
as a group because evidence of such elements was not
shown to have been known by LOL personnel who pur-
portedly solely made the decision to hire a new work
force at the time that decision was made.
Dudley's testimony was much more cryptic with re-
spect to what information LOL had within its awareness
when it made a decision to hire new employees. Dudley
testified that he was provided immediately with a copy
of the November 1977 Pearson letter which referred to
employee unproductivity, high workers' compensation
costs, and excessive absenteeism. He testified that he had
been investigating prospective plant acquisitions since
1975 and had obtained information regarding their costs
of operations. Therefore in December 1977 he made
comparisons with the costs of operations of those plants
with that of the Spencer and Schuyler plant in order that
he could come to a conclusion as to whether S.F. costs
were "out of line" and, if so, were "curable." Essentially,
he attempted to make a kill cost comparison, i.e., what it
costs to kill an animal over a fixed period of time. He
then constructed a chart comparing kill costs of six
plants, including Spencer and Schuyler. These plants
concededly do not necessarily reflect the industry as a
whole but represent only the prospective acquisitions
with which Dudley was familiar. That chart was then
submitted in evidence as Respondent's Exhibit 24. In
short, the information thereon indicates that the Spencer
plant was higher in its kill cost of $25.34 than the other
plants which ranged from $17.88 to S21.01. The particu-
lar area of higher costs was in the data revealing the cost
of wages and plant benefits, i.e., pensions, health and
welfare benefits, and workers' compensation costs with
respect to the kill cost of an individual animal. The infor-
mation does not reveal a comparison of absolute wage
and benefit costs. Dudley testified that some plants had
higher wages but because, presumably, employees were
more productive, the kill costs of wages and benefits
were lower. He did not provide this more definitive data
in his testimony, nor did he identify those companies
with higher absolute wage rates. No definitive testimony
was adduced as to the specific contribution employee
nonproductivity made to the kill costs at Spencer.
Dudley merely testified that he concluded that the Spen-
cer employees were unproductive because the absolute
higher costs of their wages and benefits were not the
sole reason for the higher kill costs.
With respect to the reference to higher workers' com-
pensation costs, and absenteeism, Dudley's testimony
failed to reveal whether or not he made a contemporane-
ous study of the actual extent of workers' compensation
costs and causes thereof, or whether he evaluated data
concerning absenteeism, the nature of or reasons for ab-
senteeism, and its comparison with these other prospec-
tive acquisitions, or with the industry as a whole. 'o
Dudley identified a graph which compared the head
per pay-hour slaughtered from November 1976 through
October 1977 between the Spencer and Schuyler plants
which purportedly discloses a higher productivity for
the Schuyler plant. He testified that it is his conclusion
that Spencer was less productive. That graph was con-
structed for purposes of this proceeding. Dudley failed to
testify that he made such a study prior to a decision not
to rehire the former employees.
Dudley conceded that he was advised on the need of
remodeling of the Spencer plant in order to improve its
efficiency. Assuming the validity"1 of the productivity
comparison between Schuyler and Spencer, i.e., that it
compares identical data, Dudley failed to testify that his
studies penetrated to the causes of a productivity dis-
crepancy. Despite the Respondent's great reliance on
Pearson's November 1977 letter as a basis for negative
conclusions by Dudley as to the Spencer work force, an
examination of that letter fails to indicate a condemna-
tion of that work force as unproductive because of poor
workmanship or lack of effort. Low productivity is not
synonymous with low employee effort. At most, Pearson
complained of less able employees hired in 1976 in part
because of the lack of availability of better workers in a
period of high area employment. The ability of the entire
work force was not condemned by Pearson. Rather, he
complained of their "union versus company attitude." In
fact, Pearson placed a great deal of blame on manage-
ment for an absence of a proper mangement-labor rela-
tionship necessary for an effective operation. His letter
speaks of a multiplicity of factors which contributed to a
loss of profits. He referred to inefficiencies caused by the
facilities of the old plant, and predicted that with plant
improvements the facility "should be competitive"; and
indeed he had pointed to an improvement already in
process prior to closure pursuant to a change in manage-
10 Eastwood testified generally that, prior to stock purchase, Dudley
had requested and had been supplied with data concerning insurance
cost, workmen's compensation costs, and costs relative to the facilities.
The details and nature of this information was not disclosed in his testi-
mony.
"1 I cannot conclude that this graph constitutes a valid comparison of
productivity inasmuch as it is premised on a comparison of pay hours and
not man-hours, i.e., it fails to take into account the impact of overtime.
Thus I hour of overtime equals 1-1/2 pay hours. The record discloses
that Spencer worked substantial overtime but is silent s to Schuyler.
Similarly, productivity comparisons of the new operations were based on
a comparison of pay hours The new operation did not work Saturdays
and therefore had substantially less overtime.
1499
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
ment philosophy. As to those factors delineated by Pear-
son, Dudley was strangely silent. No testimony was ad-
duced as to what evaluation, if any, was made by
Dudley or Hofstad as to the possible impact upon pro-
ductivity of factors other than individual worker ability,
e.g., supervision, training, tools, equipment, motivation,
morale, incentive, discipline, etc. Indeed, Eastwood in
his testimony conceded that a variety of factors enters
into an analysis of productivity. At one point Dudley tes-
tified that he had made no study of the impact of plant
renovations upon later productivity and testified that he
did not know the impact. Subsequently, he testified, in
conclusionary terms, that certain innovations did not ac-
count for later productivity improvements.
Within a context of what appears to be a very superfi-
cial study by Dudley of former employee worth prior to
the plant reopenings, it was decided not to accept the
union's offer of a reinstatement of the prior experienced
work force. Dudley testified with respect to the hiring of
employees:
What we were after and what we stated was that
we had to re-open the plant on a competitive basis.
Otherwise, we were not required to re-open it,
therefore, we had to hire the best available work
force that we could find.
Accordingly, after consulting with Hofstad, Dudley
instructed LOL Industrial Relations Director William
Huron to "hire the best possible work force," and that
despite Dudley's negative conclusions of the prior work
force no "specific" instructions were given with respect
to former employees. There is no evidence that, prior to
this instruction to Huron, Dudley or anyone else en-
gaged in a study of the former employees' personnel
records.
William Huron testified as to the methods and means
involved for the hiring of employees. He testified that he
developed a set of hiring criteria which:
. . .came primarily as a result of the acquisition of
Spencer Foods by Land O'Lakes and the desire on
the part of Land O'Lakes to start up the plant and a
need to recruit and hire a totally new work force.
He developed this criteria in late December 1978. In
doing so, he did not visit meatpacking plants to gain an
understanding of problems in such plants. He did not
visit the Schuyler plant. All the criteria was admittedly
not applied to every LOL plant. Commencing in Decem-
ber 1978, Huron initially testified that he evaluated
records of the Spencer plant, i.e., "workmen's compensa-
tion costs, absenteeism records, things of that nature."
Subsequently, he testified that he did not inquire as to
records of the specific types of injuries or medical prob-
lems but rather he obtained "general indications from
people [at Spencer] as to the high cost rates for work-
man's comp .... " With great uncertainty and lack of
conviction he testified that he may have discussed the
nature of the plant accidents in terms of "propensity" of
people for injury with Eastwood. Similarly, with respect
to absenteeism, he evaluated no written data but again
with uncertainty testified that he had discussions with
Eastwood about absenteeism. He had no recollection of
discussing the amount of lost time due to plant accidents
prior to closure. Although Eastwood testified that absen-
teeism had been high, he conceded that his knowledge in
that area was limited because he had not been involved
in personnel work. Eastwood failed to testify that he
provided Huron with any information relating to em-
ployee propensity to injury or sickness.
There was no evidence that Dudley or Huron ana-
lyzed the pertinent statutory provisions of Iowa, Nebras-
ka, or other States to determine whether or not there
was any difference in allowable benefits that might con-
tribute to a higher workers' compensation cost at Spen-
cer.
Lauritsen testified as to the activities of the Union in
giving information, advice, and assistance to employees
at Spencer regarding workers' compensation claims.
Dudley did not testify as to whether he made any dis-
tinction between the propensity to accidents, and the
propensity to file and process claims.
In January 1979, Huron testified that it was decided
that approximately 200 employees would be hired at
Spencer, and hiring commenced that month. Huron did
not explain why in the absence of any specific instruc-
tions from Huron as to former employees there was a
need to hire a "totally new work force." He did not
engage in a study of prior employee personnel files. He
did not interview the former employees, nor solicit their
individual job applications. Rather, he consulted with
Manager James Reed of the Iowa Department of Job
Service, a state employment referral service, and was ad-
vised that sufficient applicants could be obtained from
the open job market for jobs starting at the $6 rate. Un-
employment in Spencer in October 1977 rose from 1.9
percent to 5 percent. However, the major factor for that
rise was the closure of the Spencer plant which was then
one of Spencer's largest employers. It is not clear what,
if any, change in local employment occurred apart from
the plant closure. Thereafter, Huron engaged in an ex-
tensive 3-month or longer advertising campaign in the
newspaper, radio, and television stations in a wide area
of northwestern Iowa, soliciting job applicants. Included
in solicitation efforts were recent high school graduates.
It was Huron's expectation, as he so testified, to receive
a large response from persons of no past experience in
the slaughtering and meatpacking business. In fact, no
particular emphasis was placed on slaughtering and pack-
ing experience, skill, or training. The Iowa Job Service
assisted in the hiring process by initially interviewing and
screening applicants pursuant to the criteria developed
by Huron and according to Huron's directions until
March when it was decided by that agency that it did
not possess adequate expertise with respect to certain
medical or physical criteria therein. Only those persons
who applied for employment, and who were not initially
screened out by the Iowa Job Service, were considered.
It is unknown as to how many applicants were screened
out by the Iowa Job Service and who therefore did not
file a job application, and did not proceed through to
interviews in Spencer by Huron and two other LOL
managers, Terry Koyes and Don Leidhauser. The inter-
1500
SPENCER FOODS
views were held at a hotel as renovations were taking
place at the plant. Written applications were received at
a rate of 60-100 a day, and by the opening date of the
Spencer plant on February 26, 1,100 were received by
Huron of which approximately 250 were former unit em-
ployees. Of the 250 former employee applicants, about
70-75 were processed to interview by the LOL person-
nel. On the day of the reopening of the plant, of the 69
employees hired, 22 or 23 were former unit employees.
Huron testified with uncertainty that of 70-75 former
employees interviewed, he "did not recall" a "single
one" that did not receive a job offer.' 2 Upon reopening
of the plant, the interviews continued at the plant.' 3 A
total of 2,000 written applications were submitted, and
between 30-40 former unit employees were ultimately
employed. About 260 to 276 former employees ultimate-
ly applied for work and were rejected. In 1979, the
Spencer plant employed an average of 200 employees to
fill approximately 220 projected positions. However, of a
total of 525 persons that were hired, 275 were terminated
that year alone, an amount equal to the number of
former employees who had been rejected.
The Spencer plant resumed operation under a new
plant manager, i.e., recently hired Dennis Heineman. Of
19 supervisors and managers now employed, 7 had been
employed prior to closure. Barry Parks was hired by
LOL and entered on duty as the S.F. human resource di-
rector at the Spencer plant on March 1, 1979. Leo Lang
had been the Spencer plant kill floor supervisor at clo-
sure. Contrary to Eastwood's testimony that all supervi-
sors were terminated, Lang testified that he had trans-
ferred to the Schuyler plant as a night-shift supervisor.
When the Spencer plant reopened, he returned as plant
supervisor in charge of production and in August 1980
became plant manager.' 4 Huron testified that Lang was
utilized as a reference check on former employee appli-
cants after Huron had reviewed the employees' person-
nel files. He described Lang as a primary source of infor-
mation and, because of his past experience as a union of-
ficer, an objective source of information "since he had
been on both sides."'
The Spencer plant resumed, according to Pearson's
suggestion, as a one-shift operation. Previously it had
performed a kosher kill operation on the first shift, and a
predominantly nonkosher kill on the second shift. Now it
became a total kosher operation. Basically, the produc-
12 His estimate of "70-75" was based on a "gut feeling."
13 Prior to the resumption of production, approximately 10-15 con-
struction employees were hired to assist in plant renovation. Additional-
ly, 8-10 former employees were hired on a "temporary" basis to assist
the construction workers.
14 Lang testified that, when operations resumed, the new employment
force exhibited a total lack of experience which adversely affected pro-
ductivity. He insisted, however, that they improved to the point where
they became "very good." In fact, plant production during 1979 fell sub-
stantially below the desired kill rate and the goal of 200 head killed per
hour was not reached until June 1980.
"1 Several years earlier Lang had resigned his union position prior to
supervisory appointment. Subsequent to a series of disputes with fellow
union officers whom I credit as more certain, detailed, and convincing in
this regard than Lang, he threatened the union officers, including Laurit-
sen, that he would "get even." Lang's testimony revealed that he consid-
ered Lauritsen as "too radical," and prone to lead the union members in
work stoppages.
tion process was the same. However, $1.3 million or 10
percent of the total stock purchase price was spent on
physical plant improvements. According to Dudley, the
kill chain1 s was extended to accommodate more employ-
ees and thus boosted the "chain yield," i.e., the number
of head of cattle killed per hour. Huron characterized
the other changes as "cosmetic," i.e., painting, plastering,
etc. However, Eastwood testified that there were numer-
ous physical changes such as new equipment, e.g., gut
tables, trolley wash, inedible fat chute, hide puller, a side
puller, saws, hide nfesher,' 7 and also a new offal room,
storage areas, and laundry room were installed; and sev-
eral operations rearranged. Some jobs were eliminated
and some combined. There was much conclusionary tes-
timony adduced as to how all these changes at a cost of
$1.3 million did not have a direct relationship to produc-
tivity. Eastwood in his testimony was more restrained in
dismissing the impact of renovations on productivity.
Eastwood testified that an extended kill chain allows
more men on the line and, although it does not necessari-
ly result in greater output per man, the result of these
changes may have enabled some functions to result in
the production of more head per man. He cited as an ex-
ample the use of new equipment which enabled faster
work, and a faster movement of hides within the plant.
Although Eastwood initially testified that there was a
"dramatic" change in customers, what occurred was that
the Spencer plant now catered exclusively to its kosher
customers. The old customers were retained with
"some" changes. New kosher accounts were solicited
and obtained. As indicated earlier, the Spencer plant
continued to draw upon the local cattle source, and there
is no evidence as to what percentage of cattle was now
purchased from farmer cooperative members.
The employees at the Spencer plant, as the employees
at Schuyler, were paid by S.F. The business continued to
be held out to the public as Spencer Foods, Inc., al-
though its ownership by LOL was publicly known. In
September 1979, LOL was the purchaser of the Oakland,
Iowa plant, an ongoing beef slaughtering operation of
American Beef Packers, Inc., by way of an assets pur-
chase. The purchase agreement was in the name of S.F.
The existing 200 production and maintenance employees
were retained, and became employees of S.F. The man-
agement of the Oakland plant was placed under Pear-
son's supervision. The existing collective-bargaining
agreement with the United Industrial Packing and Allied
Workers Union covering the workers at the Oakland
plant was assumed by S.F.1 s
B. The 8(a)(1) Allegations
The complaint alleges that in December 1978 the Re-
spondent by its agent Earl Junior Curry suggested to an
employee that the Respondent would not permit employ-
ees at the Spencer plant to be represented by a union.
i" Comparable to a conveyor belt system in an automobile assembly
plant.
" In 1977, a new cooler had been installed and an extended kill chain
had been considered at that time but was abandoned for financial reasons.
"s That contract had a significantly less costly employee benefits pack-
age than the pre-closure Spencer plant contract.
1501
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Former unit employee Frank Angelo testified that in late
November 1978 he had been employed by another em-
ployer on a job excavating sewer lines, when his pre-clo-
sure kill floor Foreman Curry happened to encounter
him at the excavation site. It appears that Curry had
been driving a truck and had stopped when he noticed
another former employee, Mike Hawn, on that site.
What Curry was doing driving a truck at the construc-
tion site is not known, nor is it known if he also was em-
ployed by the excavating company. In any event, ac-
cording to Angelo's uncontradicted testimony, Angelo
and Curry and former employee Mike Hawn decided to
take a break at a nearby cafe in Arnold's Park where
they engaged in a conversation wherein Curry discussed
various topics, including animal trapping. Angelo inter-
jected a question as to how things were going at the
Spencer plant and Curry replied that everything was
"torn to hell" but that plans called for certain renova-
tions. Angelo asked how soon he would be called back
to work at the Spencer plant and Curry responded "that
the union wasn't going to get back in," and that there
were "too many problems." Curry was inhibited in ver-
bally reprimanding employees and further stated "that is
some of the things they are going to eliminate." Also to
be eliminated, Curry said, was the assignment of deferen-
tial work to female workers.
Although Curry had in fact been a supervisor within
the meaning of the Act, prior to the closure, there is no
evidence that he held a supervisory position at the time
of this conversation. There is no evidence that he partici-
pated in the employment of any employees at the re-
opened plant or acted in any capacity as the Respond-
ent's agent ur spokesman. Therefore I conclude that
there is no basis to support a finding of a violation of the
Act based on Curry's statement of what appears to be his
personal opinion to Angelo.
The complaint alleges that in March 1979 Leo Lang
threatened employees that Respondent would not recall
employees because of their membership in and activities
on behalf of the Union and that Respondent would not
permit employees at the Spencer plant to be represented
by the Union. Four witnesses testified as to a meeting in
April 1979 held at the Scorpion Lounge in Storm Lake,
Iowa, 36 miles from Spencer, Iowa. The meeting was
held pursuant to a request by employee Edward Feld-
hacker, for the purpose of discussing the possibility of re-
calling to work as a group 40 or 50 employees. Attend-
ing the meeting were Feldhacker, former unit employees
Jerry Ward and Roger Daugherty; and Leo Lang; and
the plant nurse, Deanna Gesink. Feldhacker, Ward,
Lang, and Gesink testified. Because of the inconsistencies
between the testimony of the General Counsel witnesses,
Ward and Feldhacker, and because of Feldhacker's ad-
mitted difficulties in recalling a conversation, wherein he
consumed many alcoholic drinks and because of his un-
certain demeanor, and internal inconsistencies, I cannot
conclude that the General Counsel has submitted credi-
ble testimony to support this allegation of the complaint.
I conclude that at most Lang informed the employees
that, because of the substantial progress made in hiring
by that date, and the limited number of openings avail-
able, not all employees would be recalled. However, I
credit the uncontradicted testimony of Feldhacker that
Lang complained to them about the employment at the
newly opened plant of "green horns," of Lang's difficul-
ties in getting his work done, of the lack of experience of
7 of every 10 persons hired, of the advantages of recall-
ing experienced employees who would be able to teach
work skills to the "green horns." This testimony is con-
sistent with Lang's admissions in other testimony of the
inexperienced nature of the newly hired employees, and
the adverse effect it had on productivity. The meeting
ended with Lang's promise to check with his supervi-
sors. In fact, Lang communicated with Heineman and
Eastwood about recalling former employees as a group,
but he was instructed not to pursue the matter, i.e., not
to deviate from the process of individual applications and
processing described above. Feldhacker thereafter re-
ceived no response from Lang.
It is alleged in the complaint that during March 1979
Plant Manager Heineman told an employee that the em-
ployee would never return to work for the Respondent
because of the employees' refusal to cross the Union's
picket line. On the date of the reopening of the Spencer
plant on February 26, the Union conducted picketing at
the plant with signs protesting "Spencer Foods Unfair to
Labor." Local newspaper accounts described the picket-
ing as "violent." Huron testified without contradiction
that he observed picket line conduct in the form of the
blocking of ingress to the plant, banging of automobiles,
throwing objects, utterance of "aggressive remarks," and
"intimidating behavior." Subsequently, S.F. and the
Union each cross-petitioned the Iowa District Court for
injunctive relief against acts of violence. A consent in-
junction against violent conduct subsequently issued. The
picketing, however, continued thereafter and has not
ceased.
Daryl Frerichs, a pre-closure unit employee, was hired
through the above-described hiring process, in construc-
tion work at the plant commencing on February 7, 1979.
He and the entire group of "temporary" construction
workers were told at a mass meeting shortly before Feb-
ruary 26 that they would commence working "full time"
thereafter. Frerichs worked until March 6, 1979. He told
his foreman that he would not cross the picket line in the
future. He was asked to work a few days more which he
did. Frerichs testified that on March 8, in Plant Manager
Heineman's office in a meeting with Heineman and
Lang, Frerichs said that he would cross the picket line
no more, and that Heineman told him that his name
would be placed "on a list" and that the only way he
could "get back in" was if the Union gets "back in."
Frerichs did not return thereafter.
Heineman did not testify. Lang testified that Heineman
attempted to persuade Frerichs to keep working, after
Frerichs said that he was going to "quit" because he did
not want to cross the picket line, and that Heineman said
"if you quit now I probably won't need you later after
we get a full complement of people." Lang explicitly
denied Frerichs' testimony. I find Frerichs to be the
more confident and certain witness as to their conversa-
tion. I credit him.
1502
SPENCER FOODS
The complaint alleges that Human Resource Manager
Barry Parks, in March 1979, told an employee that the
employee would not be employed in the future because
of the employee's refusal to cross the Union's picket line.
Frank Angelo testified that in February 1979 he was
interviewed by Huron who in the course of the inter-
view stated that there was a picket line and that the local
police were doing a good job of keeping the peace and
that the number of pickets were gradually reducing.
Huron also said he had hired 20 former employees and
would hire more and intended to have the best possible
work force. According to Angelo, Huron praised the
newly hired workers and stated that the Company felt
no obligation toward the Union. Angelo mentioned the
picket line and Huron asked him if he would cross the
line to report for work. Angelo stated that he did not
want to cross the picket line. At that point Angelo asked
whether his refusal to cross the picket line would lessen
his employment prospects. Angelo testified that Huron
responded that anyone who would not cross such a mild
picket line would have no future chance of becoming an
employee, and thereafter instructed Angelo to go home
and "talk it over" with his family. Angelo conceded that
he was in fact offered a job but he informed Parks by
telephone at 5 p.m. that he would rather not cross the
picket line; that he was concerned about his family; and
that when he said he would report for duty when picket-
ing ceased, Parks said "Okay."
Huron testified that during the interviewing of job ap-
plicants at the plant subsequent to its reopening there
were occasions wherein he discussed the picketing. He
testified that a number of times job applicants expressed
concern over the picketing and refused a job offer be-
cause of the picketing. Huron denied that he told an em-
ployee that he would not be considered for future em-
ployment if the employee refused to cross the picket line.
However, Huron testified that he told job applicants that
if they honored the picket line that their job applications
would be considered withdrawn, and that statements by
an applicant to the effect that he would honor a picket
line had the effect of terminating the interview.
Angelo impressed me as a spontaneous, forthright wit-
ness. He gave no impression of being a calculating wit-
ness, but was rather responsive. I find Huron's general
denials less convincing. Throughout his testimony I
found him to be a guarded witness whose answers were
conditional or qualified. In this particular issue, his denial
was qualified by the admission that the practical effect of
an employee's expression of intent to honor a picket line
was to nullify the job application, thus eliminating the
employee from future employment consideration. I credit
Angelo's more certain and detailed account of the inter-
view with Huron.
I conclude that the conduct of Heineman and Huron
constituted interference with employees' right to engage
in protected concerted union activities, i.e., the job appli-
cants were told, in effect, that if they honored a picket
line they would not be considered for future employment
at a time when the job applicant desired to work and
when work was available. 9 By this conduct, I conclude
that Respondent violated Section 8(a)(1) of the Act.
The complaint alleges that in April 1979 Parks interro-
gated an employee about that employee's union activi-
ties. Jay Anderson testified that he was initially hired in
April 1979 for employment at the Spencer plant. Al-
though he had no prior experience in slaughtering work,
he had known Lang's son and had asked Lang for a job
in April 1979. Lang referred Anderson to Parks who in
turn referred Anderson to Iowa Job Services. Anderson
was accompanied by former employee Ron Moriarity.
They filled out applications at the Iowa Job Service. The
next day Anderson alone returned to the plant where, on
request, he was interviewed by Parks. Parks agreed to
the interview in his office. Anderson testified that Parks
asked him if he would have any "qualms" in crossing the
picket line every day, and he responded that he would
not. When asked by counsel for the General Counsel
whether Parks asked him any other questions relating to
the "subject of unions or picket lines," Anderson re-
sponded: "I believe there was a question on the applica-
tion that I filled out, if I had ever belonged to a union
before." When questioned further by counsel for the
General Counsel, Anderson responded: "Well, I know I
answered the question. I don't know if it was verbally or
writtenly [sic]." He testified that he could not swear
what Parks asked him. He testified, "I just can't remem-
ber;" When questioned as to other topics of that conver-
sation, Anderson protested an inability to recall the con-
versation with Parks.
Parks testified that he asked no applicant whether that
applicant belonged to a union, nor did he ask about their
union sympathies. He recalled the interview of Ander-
son. Parks testified that Anderson "made quite a point of
the picket line" and asked what was going on and
whether it was true "what was in the papers"; to which
Parks answered "Yes." In light of Anderson's faulty
memory, and unconvincing demeanor, I find him an un-
reliable witness, and I conclude that insufficient evidence
was adduced to establish that Parks coercively interro-
gated employees concerning union membership or activi-
ties.
C. Discriminatory Hiring Criteria
The General Counsel and the Union allege that the job
screening criteria developed by Huron for use by the
Iowa Job Service was calculated to and did have the
effect of discriminating against the employment of
former employees. Respondent argues that the criteria
was constructed for the purpose of hiring the best possi-
ble work force and that the criteria set forth by Huron
was objective, justified by business considerations and
calculated to favor neither former nor new employees,
and was applied to every job candidate equally. The
General Counsel and the Union contend that not only
were the criteria inherently discriminatory, but that they
were applied unequally in such a manner as to favor new
employees. The criteria are as follows:
i9 Although the complaint alleges Parks and not Huron as one of the
agents involved, Huron's conduct was fully litigated.
1503
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
1. Necessary job skills.
A. The ability to lift sixty (60) lbs. or more on
a regular basis.
B. Above average manual dexterity as evi-
dence by past job history.
2. Interest in packing house work.
A. Describe working conditions and observe
reaction.
Determine willingness to work in beef proc-
essing industry.
3. Obvious wage expectation versus wage sched-
ule problems.
4. Work history.
A. Job stability as reflected in past employ-
ment.
For general labor in the plant, applicants
should have held no more than three (3) jobs in
the last five (5) years. Exclude layoffs due to
plant closings.
B. Screen out individuals discharged from any
previous employment.
5. Obvious medical problems/physical restric-
tions:
A. Tendonitis.
B. Lower back syndrome.
C. Active chemical dependency.
D. Allergies.
E. Dermatitis in the form of rashes when near
blood, animal fat, chemicals, oils, detergents, etc.
F. Heart problems/high blood pressure.
G. Loss of limb(s)/fingers.
H. Respiratory problems/T.B./emphysema.
6. No more than one (1) member of an immediate
family may work for Spencer Foods, Inc. Immedi-
ate family is defined as: spouse, child, parent, grand-
parent, brother, sister, in-laws (mother, father,
brother, sister).
7. No more than an average of four (4) absences
per year over the last two (2) years. Periods of hos-
pitalization or major medical conditions to be sepa-
rately evaluated.
8. No disciplinary warnings of any kind in the
last eighteen (18) months. Past Spencer Foods, Inc.
employees: May 1976-October 1977.
9. No more than two (2) lost time accidents in
the last three (3) years. Past Spencer Foods, Inc.
employees: November 1974-October 1977.
No argument is made that the ability to lift 60 pounds
of weight on a regular basis is inherently discriminatory;
however, although many jobs do involve the necessity to
lift and shove, clearly not all former employees engaged
in jobs requiring such ability, e.g., washing and cleanup,
etc. With respect to criteria 2, an expectation of signifi-
cantly higher wages tended to disqualify an applicant,
and employees who were paid substantially higher wages
prior to closure were more likely to react negatively to
the starting wage offered. The number of persons
screened out by this criteria appears to be negligible.
With respect to work history, medical problems, ab-
sences, disciplinary warnings, and lost time accidents, the
former employees were to be judged by their records as
established during their preclosure tenure at S.F., where-
as new employees were to be judged on their most
recent experiences as represented by them or revealed in
job reference checks. Thus a former employee who
manifested a rehabilitation within the hiatus period while
employed with another employer would not benefit from
such rehabilitated performance or improved medical situ-
ation.
The criteria which the General Counsel and the Union
stress most forcefully as evidence of discriminatory
intent relates to the prohibition against hiring more than
one member of the immediate family, i.e., criteria 6 or
"anti-nepotism" policy. It is argued that by this one cri-
teria alone great numbers of former employees were
screened out of employment. Prior to plant closure, it
had become a common practice by S.F. to hire more
than one family member. Approximately half of those
former employees were related.
Respondent contends that LOL has maintained a
formal, systemwide anti-nepotism employment policy
since 1973, and that its application at Spencer was
merely a routine application. LOL maintains 75 facilities
in various States. Huron testified that he instructed Man-
ager James Reed of the Iowa Job Services that to be
considered further an applicant had to satisfy all criteria,
otherwise no written application was to be taken. How-
ever, he testified that Reed was instructed to use a rule
of reason. Huron also testified that he did not "recall"
telling Reed to screen out and deny a written job appli-
cation to an applicant who failed only one criteria.2 0
However, he testified that LOL was "strong" on en-
forcement of the six criteria. Reed testified that the
screening criteria was utilized at all offices of Iowa Job
Services according to instructions he gave to the staffs of
those offices and which were in accord with instructions
he received from LOL Managers Huron, Koves, or
Leidheiser, who acted as S.F. hiring agents. Reed in-
structed his staff as he was so instructed to use "common
sense" and not to screen out applicants for "ridiculous
reasons." However, Reed testified that he was instructed
as to the particular necessity of criteria 1, 6, 7, 8, 9 and
that criteria 6 was to be applied without exception.
Reed testified that many job seekers did not ask for an
application after the interview and many, including
former employees, were denied applications by his
agency prior to March 1979, as a result of the applica-
tion of the hiring criteria. It cannot be determined, how-
ever, how many job seekers were turned away or how
many former employees were turned away as a result of
the interview or as a result of learning of that criteria
form other sources and thereafter deciding not to pursue
a futile act. 2 1
'0 In his pretrial affidavit Huron testified: "We advised Reed that
anyone who failed to meet any one of the criteria set forth on [Exh. 20]
were to be screened out in the first stages of the employment process."
"L Based on Reed's testimony, it is apparent that Iowa Job Services
and its manager James Reed acted as an agent for Respondent in the
interviewing and hiring process. The motion filed by Iowa Job Services
to strike par. 4(b) of the complaint is accordingly denied.
1504
SPENCER FOODS
When examined as to whether rule 6 set a new policy
for S.F. at Spencer, Huron testified uncertainly and un-
convincingly: "I'm not certain. I don't believe they had a
policy restricting the employment of relatives, so stating
in so many words." He admitted that there have been ex-
ceptions to this LOL anti-nepotism rule. As the evidence
in this case unfolded, it appeared that the rule was not
applied to managers, supervisors, and temporary employ-
ees. Furthermore, the rule was not enforced at the
Schuyler plant or at the Oakland plant. It is also not en-
forced at a LOL turkey processing plant in Albert Lea,
Minnesota. Various Respondent witnesses testified that
the rule is not applied to areas of relatively low popula-
tion where the employment source is limited, nor applied
retroactively to plants that have been acquired with an
ongoing work force when relatives had been previously
employed. However, relatives continued to be hired at
the Schuyler and Oakland plants after the acquisition of
those plants. Corporate Staffing Manager Koves testified
that the Albert Lea plant had been in existence for 30
years and also is located in an area of limited employ-
ment resource. He admitted that the population of Albert
Lea is about 20,000, i.e., double that of Spencer, that the
total employment of the plant is only about 325, and that
LOL hires employees from a wide ranging geographical
area outside the city itself. Respondent's witnesses testi-
fied as to the subsequent large number of applicants who
applied at S.F. retroactive justification for the decision to
apply rule 6.22 However, the only information Huron
possessed prior to the construction of the hiring criteria
was Pearson's November 1977 letter which, in part, com-
plained of the acute shortage of unemployed persons in
1976, and the general assurances of Reed that there was
a large pool of unemployed in 1978. Indeed, there was a
large pool of unemployed in Spencer after the plant clo-
sure which included the former Spencer plant employees
who chiefly accounted for the jump in the unemploy-
ment rate, according to Reed.
Thus, despite the purported desire to hire the best pos-
sible work force, hiring criteria was constructed which
catered to the unskilled and inexperienced job applicant,
but which instituted a policy unrelated to merit which is
not universally applied elsewhere, in all circumstances
and which inherently tended to adversely affect the
hiring prospects of half the former work force. I find
Huron's testimony to the effect that he did not consider
the impact of that policy on S.F.'s past practice uncon-
vincing and not credible, in light of Pearson's warning of
employment resource difficulties, the expressed concern
for a best possible work force, and the testimony con-
cerning purported investigation and analysis of S.F.'s
past operations by LOL of S.F. as a prospective acquisi-
tion.
A great mass of evidence was adduced by the General
Counsel largely in the form of summaries of portions of
personnel files regarding the issue of whether the Re-
spondent applied its hiring criteria in a discriminatory
22 Despite the immediate "flood of job applicants," the personnel
records of Respondent contain a notation by Koves concerning the job
applicant James Campbell wherein Koves expresses a reluctance to hire
Campbell and an inclination to review the applicant later "if applicant
flow problems continued." This comment was never explained by Koves.
fashion so as to favor the hiring of new employees and
to discourage the hiring of tormer employees. Respond-
ent attempted to rebut the evidence in large part with
summaries of evide..ce and with testimony. An examina-
tion of the evidence leads me to conclude that despite
protestations that all employee applicants were treated
equally, the former employees were subjected to more
stringent evaluations, and the hiring process was more
conducive to the hiring of new persons. Furthermore,
there is some evidence that Respondent manifested an in-
terest in job applicants who expressed antipathy toward
union representation.
There are notations in the personnel files of Respond-
ent which record remarks of job applicants whom it
hired concerning union representation. Applicant Alvin
Andis, a former employee, is quoted as stating that there
were "too many free loaders. [The] Union shouldn't pro-
tect them." Geraldine Bowers is recorded as stating that
she is related to Lauritsen and that he "messed a lot of
people up." Noted in the job rating form for Anthony
Prodaga along with many other notations is the phrase
"No interest in Union activity." Larry Christonsen, a
former employee, was quoted as saying that the Union
"got what it deserved in closing the plant." The inter-
view file for Rick Oleson, a nonformer employee, con-
tains, inter alia, a reference to his then present construc-
tion job which states "don't care for the union." Regard-
ing many comments of applicant and former employee
Bobby Dirks is found the entry: "Not too big in Union."
Derald Thomas' file contains the notation "labor dis-
pute-was non-union." William Smith wrote the follow-
ing on his application: "I worked there before their labor
dispute, but was off with a broken hand before this labor
dispute took place. Was not involved." Del Drenths' file
contains a handwritten notation which, inter alia, states
"was involved in being harassed to join Union." The file
of Steve Wallace, a Spencer employee in the summer of
1977, reveals a note by an interviewer which states: "he
didn't want to go on strike, thought $SS were good, Leo
Lang, pleasant place to work." The file of nonformer
employee Daniel Coombs contains the remark: "says
probably don't need union. Last strike didn't do any
good at McQuay [former employer]."
Finally, with respect to the personnel file of former
employee Richard Maranell, there appears the phrase
"steward on night clean up-no problem" and the phrase
"company oriented."
The foregoing, as argued by the General Counsel and
the Charging Party, reveals that the union antipathy of
some job applicants was of sufficient importance to be
noted and recorded by the job interviewers.
Reference Checks: Huron testified that after a job appli-
cant was interviewed, and had given a favorable impres-
sion, two final conditions preceded hiring, i.e., a success-
ful physical examination and a reference check, the latter
of which was characterized as "very tight" and "impor-
tant." Huron testified emphatically that each job appli-
cant was subjected to a reference check.
In the hiring of employees for the reopened plant, per-
sonnel files of the former employee job applicants were
closely examined and scrutinized. Thus the Respondent
1505
DECISIONS OF NATIONAL LABOr RELATIONS BOARD
made available to itself detailed information to evaluate
former employees concerning absences from work, disci-
plinary warnings, and lost time accidents. However, the
nonformer employee was purportedly subject to a work
history reference check that was premised upon an em-
ployee evaluation form the answers to which were to be
furnished by past employers. That form inquired as to
the number and type of work accidents, but sought only
generalized conclusions as to attendance and made no in-
quiry at all as to the issuance of past disciplinary warn-
ings. 23s
The personnel records of over 200 successful appli-
cants fail to reveal documentation of a reference check.
LOL employee Dawn Meyer Hansen testified concern-
ing the process of reference checking to which she was
assigned by Parks. She testified that she utilized the
aforedescribed reference check form and made inquiries
by telephone. She described the context within which
she made her reference checks as hectic and rushed. In
part, she relied on information given her by Lang or
other plant employees or supervisors who claimed to
know the applicant. As to the contacts with supervisors
or employees, she used no reference check form. Hansen
conceded that she made no inquiry of the job applicants'
current employers. Although she testified that she made
reference checks as to a large number of job applicants
whose files reveal no reference check, she could not
recall making reference checks of many of these files. In
most instances where a job applicant was recommended
by a supervisor or employee, no contact at all was made
with the applicant's former employer. The precise nature
of the recommendation of these supervisors and employ-
ees was not revealed in her testimony. From her testimo-
ny I conclude that what information she did obtain from
employees and supervisors was more generalized than
that sought by the job reference check forms and includ-
ed vague, subjective, secondhand impressions. She testi-
fied that no reference check was made for summer or
temporary employees. As to job applicants of recent
military experience, she merely made inquiry as to the
rank achieved by the applicant. When questioned as to
making reference checks for applicants whose files reveal
no reference checks, she testified:
Yes. There were a few that you would find out
something and you know he was good and you sent
him up for an interview and that was probably all
that was ever done on him.
The evidence thus reveals that the Respondent had
been provided with the names of former and current em-
ployers by job applicants but that it hired vast numbers
of nonformer employees of whom there is no evidence of
a reference check, or of whom it obtained a reference
check which sought the most generalized information,
whereas it rejected vast numbers of former employees
23 The issuance of discipline was utilized, in whole or part, to disquali-
fy approximately one-third of all former employees who had filed appli-
cations. A similar large percentage of former employees were rejected
for absenteeism in whole or in part. Former employees were rejected if
their history disclosed mote than nine absences from November 1975 to
November 1977.
based on detailed information carefully gleaned from
their personnel records which covered a period of many
years.
Medical History: As indicated above, former employees
were judged by their prior S.F. records. Many were re-
jected in whole or in part because of information in
those records. This information revealed such disqualify-
ing references as "alcoholic;" "back problems;" "heart
attack victim"; "acute lumbar, sprain low back syn-
drome"; "high blood pressure"; "heart attack '77";
"throat cancer '78. Hernia"; "Ulcer"; "hypertension";
"back and shoulder problems"; "back and neck prob-
lems"; "back sprain"; "neck injury." No effort was made
to evaluate the current debilitative effect of old ailments
of former employees. However, the personnel record of
new employee Robert Fahrenkrog indicates that he was
hired for construction work when the plant was renovat-
ed, and that it was disclosed that he had had a knee op-
eration but the interviewer noted "no disability now."
New employee Jerry Garret's file reveals that he was
hired despite a 1977 corrective hernia operation. The
personnel file of new employee Rebecca Wagner reveals
the notation that she had had a "heart check up" in Iowa
City but "has worked in physical hard work" and was a
laborer at the time of the interview. The newly hired
were required, according to Huron, to have passed a
physical examination prior to actual employment and
thus were given an opportunity to demonstrate their cur-
rent state of health.
Work History: The Respondent's personnel records
reveal that nonformer employees were hired despite a
revelation by a job reference check or an interview of
negative comments, despite prior job terminations, and
despite past employment instability. However, those
same files and other evidence submitted by Respondent
reveal that Respondent considered counterbalancing
positive information and extenuating circumstances, and
thus excused and disregarded what would appear to be
disqualifying factors. In this regard Respondent pursued
a common sense approach and sought to obtain a full
view of possible worth of a job applicant and evaluated
the full circumstances involved. With respect to former
employees, they were evaluated by the information that
was set forth in their personnel files which was accepted
at face value, but which at times was supplemented with
a report of Leo Lang's opinions. Lang's testimony as to
the negative aspects of former employees that he report-
ed in the hiring process was generalized, impressionistic,
conclusionary, and based in large part on suspicion,
rumor, and some of which was based on isolated,
remote, if not trivial misconduct, e.g., failure on an occa-
sion to wear a "hard hat" in a required area; smoking a
cigarette on one occasion in a prohibited area; leaving
the plant on a "couple" of occasions to go to a restau-
rant across the street; parking in a prohibited area; horse-
play involving squirting water at coworkers; a single ab-
sence for deer hunting on a date unknown. 24 Respond-
24 Lang expressed a disregard for the entire body of former employ-
ees. He premised his dislike on conclusionary testimony that they were
unproductive. It is equally clear that he was resentful of the effectiveness
Continued
1506
SPENCER FOODS
ent, however, seldom rejected a former employee for
any one stated reason, but rather purportedly relied on
several disqualifying factors.2 5 Thus a former employee
rejected in part because of past discipline may also have
displayed a history of absenteeism or medical problems
or other negative factors. However, as observed above,
nonformer employees enjoyed a distinct advantage in
that they were not handicapped by a detailed record of
these other factors. Rather, they were evaluated pursuant
to a very quick, brief reference check performed under
rushed conditions wherein an application of common
sense and an open mind afforded them the benefit of a
doubt.
D. Analysis and Conclusions
1. The 8(a)(5) violations
The General Counsel alleges that the Respondent
either as a continuing entity or alternatively as a succes-
sor employer violated Section 8(a)(5) of the Act by with-
drawing recognition of the Union; by recalling employ-
ees pursuant to criteria that was unilaterally instituted
without bargaining with the Union; and by unilaterally
changing wage rates, benefits, and other terms and con-
ditions of employment without bargaining with the
Union. The General Counsel seeks a remedial order
which provides for a restoration of the status quo ante,
i.e., recognition of the Union, restoration of past wages,
benefits and terms and conditions of employment, and a
reinstatement of former employees who would have been
recalled prior to past practice and contractual provisions,
all of which would place the parties back in the same po-
sition prior to the unlawful refusal to bargain.
The General Counsel alleges further that Respondent
discriminatorily refused to reemploy its former work
force for the purpose of evading its obligation to recog-
nize and bargain with the Union, and because of the
former employees' membership in, representation by, and
past support of the Union, and thus violated Section
8(a)(3) and (1) of the Act. The General Counsel's
remedy for this violation is encompassed by the remedial
order sought for the aforedescribed alleged violation of
Section 8(a)(5).
Respondent contends that the withdrawal of recogni-
tion of the Union was lawful because the historic em-
ploying entity ceased to exist after the stock purchase by
LOL. It argues that the old employing entity had perma-
of the Union's leadership in causing slowdowns in support of grievances.
He testified that some employees were not disciplined because of the su-
pervisor's fear of "slowdowns and walkouts."
25 Respondent submitted a document to the Regional Director in the
investigation of this case which purports to set forth the reasons for re-
jecting former employees who applied for work. Respondent's witnesses
gave confusing, if not conflicting, testimony as to whether the document
contained accurate transpositions of file notations made by job applicant
reviewers or mere summarizations, and whether the document contained
all the reasons for rejecting a former employee, or only some of the rea-
sons. The underlying data was admittedly destroyed by Human Resource
Director Parks after he constructed the document for the proffered
reason that he thought that it was not necessary to retain such data. I
find his remarkable explanation most unconvincing in light of his exten-
sive experience and responsibilities as a human resource manager which
involves dealing with several governmental agencies with respect to the
application of laws and regulation of the state and Federal Government.
nently terminated its Spencer plant employees at the time
of the plant closure, and that thereafter what occurred
was the acquisition of the assets of the old employer by
LOL, a new employer. It contends that the retention of
what it calls the "shell" of the old S.F. corporation was
a mere convenience to escape Federal tax liability. It
argues that, despite its maintenance of the appearances of
continued corporate life of the old S.F., to justify its rep-
resentations to the Internal Revenue Service, that the
National Labor Relations Board must subordinate form
to substance and must look beyond appearances and
accept its claim that for all material purposes under the
Board's concept of an employing entity the old and new
S.F. are separate and distinct entities. Respondent further
argues that not only did the demise of the old S.F.
occur, but that the S.F. that appeared thereafter as
wholly owned by LOL and treated as an internal divi-
sion by LOL was so disconnected from the old S.F. that
it cannot be construed to be a successor employer. The
Respondent argues that the employing industry in Spen-
cer, Iowa, doing substantially the same business under
the old name, at the same place, is not the same employ-
ing industry because of a total change in ownership, and
almost total change in management, supervision, and
most importantly, new employees. In support thereof, it
cites NLRB v. Burns Security Services, 406 U.S. 272
(1972), and related cases. Respondent argues that the.
new S.F. had no employees when it commenced oper-
ations, that the old employees were permanently termi-
nated by the old S.F., that the lengthy hiatus severed
any thread of employment relationship, apd that the new
S.F. was entitled to hire new employees to suit its own
business needs and desires. It argues that the new S.F.
decided to hire new employes and not to avail itself of
the old work force who was as a group unproductive,
subject to high workers' compensation costs, and prone
to excessive absenteeism. It contends that under nondis-
criminatory criteria it hired a substantially new work
force. Thus, it argues, it is not in the position of an em-
ployer who discriminatorily refuses to hire the old work
force in order to avoid recognition of a union.2 6 The
Charging Party and the Union argue that the issues in
this case are not properly analyzed under the criteria
used by the court and the Board in successorship cases.
They argue that no successorship occurred herein be-
cause there was no interruption in the continuity of the
employing entity. They contend, however, that alterna-
tively Respondent as a successor employee is heir to the
same obligations as its predecessor.
The General Counsel and the Union cite certain Board
precedent which holds that mere purchase of stock does
not absolve an ongoing corporate business from its bar-
gaining obligations. 27 Those cases involve, however, a
continuity of operating and work force. The assertion
that a mere stock purchase had occurred in this case is
not accurate. More than a stock purchase occurred. In
this case the stock purchase was accompanied by a sub-
as Cf. Howard Johnson Ca v. Hotel Employees, 417 U.S. 249 (1974).
*7 See, e.g., Topinka's Country House, 235 NLRB 72 (1978), enfd. 624
F.2d 770 (6th Cir. 1980); Miller Trucking Service, 176 NLRB 556 (1969);
Western Boot & Shoe, 205 NLRB 999 (1973).
1507
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
stantial change in management and supervision. The op-
erations of the Spencer plant were modified. Some
change in suppliers and customers occurred. More im-
portantly, the stock purchase occurred at a time when
S.F. employees had not actively worked at the plant for
about a year.
The Board in Hendricks-Miller Typographic Co., 240
NLRB 1082 (1979), herein TKB, delineated the distinc-
tion between successorship situation and a stock transfer.
In the former, there is a substitution of employers, each
having no connection or relation to one another, and
where the former employer ceases to exist, or to have
any relationship to the operations of the ongoing succes-
sor. The Board points out that despite this "break" or
distinction in employers, bargaining obligations may
transfer to the new employer if within a configuration of
factors it appears that the "employing industry" contin-
ues, e.g., "continuity of operations, location, work force,
working conditions, supervision, machinery, equipment,
methods of production, and services." However, where a
stock transfer occurs, the Board holds that there is a
"difference in genesis from the successorship, for the
stock transfer involves no break or hiatus between the
two legal entities, but is, rather, the continuing existence
of a legal entity, albeit under new ownership." The
Board instructs that because the secondary characteris-
tics of both situations are often identical the proper place
to begin an analysis is an examination of the "primary
characteristics" with the inquiry: "Did the two entities in
question cease to have any relation, one to the other, or
did ownership of the initial entity merely pass into new
hands?"
In a situation where a business in bankruptcy and op-
erated by a trustee had ceased to exist as an independent
viable business entity but remained as a mere corporate
shell and where after a I-year hiatus under new owner-
ship, new management, new supervision, a drastic reduc-
tion in work force, basic changes in production, exten-
sive plant renovation, new product lines, new equipment,
and new customers were effectuated, the Board rejected
the contention that an alter ego analysis was applicable
and held that a sounder analysis required application of
the traditional successorship principles. In that context,
the Board found no continuation of the same employing
industry. Cagle's, Inc., 218 NLRB 603, 605 (1975).28
In Lauer's Furniture Stores, 246 NLRB 360 (1979), a
stock purchase analysis and alternative successorship
analysis were both rejected by the Board where the old
enterprise was kept alive only for the purpose of pre-
venting a foreclosure of a lease but not to effectuate an
ongoing business, and where none of the former employ-
ees were retained.
a" See also Blazer Corp., 236 NLRB 103 (1978), and Radiant Fashions,
202 NLRB 938 (1973), wherein the Board found that a lengthy hiatus, a
purchase of asaeta rather than an ongoing business, the absence of a sig-
nificant carryover in customers, and a difference in marketa served, all
revealed a lack of.continuity of the employing industry and thus no
successorship. But see Schmutz Foundry & Machine Co., 251 NLRB 1494
(1980), and cases cited at 1496-1497, for the proposition that neither a
hiatus in operations, nor substantial reduction of employees, nor change
in size and scope of operations, although relevant, per se necessarily pre-
clude a finding of successorship.
Thus, as Respondent argues, the Board does not
mechanistically follow the outward appearances in ana-
lyzing whether a stock transfer or a successorship
occurs. Respondent argues that the Board fully grasped
the need for an analysis of substance over form, as Re-
spondent suggests is mandated by the Burns decision, in
its resolution of issues raised in MPE, Inc., 226 NLRB
519 (1976). That case involved a transfer of stock after
the expiration of one collective-bargaining agreement but
prior to the execution of a succeeding contract. The old
employer was in financial distress and considered dissolu-
tion and bankruptcy. The plant was seized by a govern-
mental creditor for the purpose of making an inventory
and was shut down. However, several individuals inter-
vened and sought acquisition of the business. An assets
purchased was considered as a vehicle for acquisition but
because such manuever would have jeopardized a lease
arrangement, a sale of stock was pursued which pre-
served the lease and allowed the seller to gain a profit on
the sale of stock. After the stock sale the plant resumed
operations after a hiatus of little over a month, with sub-
stantially the same production process and eventually
employed a majority of the former employees. The
Union was voluntarily recognized as bargaining agent.
The Board defined the issue in the MPE case as
"whether a corporation which has undergone a complete
change of ownership and management, but which has re-
tained essentially the same employees, production proc-
ess, and location, is bound to assume a labor contract of
which it was not apprised at the time of the transfer of
ownership." The Board stated (226 NLRB at 521):
This case certainly involves more than a cosmetic
change in the structure of the enterprise, and thus
precludes a finding that the succeeding corporate
entity is essentially but a mirror image of the prede-
cessor. Instead, the factors of a complete change in
management and ownership, the limited business op-
tions available to the parties to effectuate the trans-
fer, and the absence of any evidence that the trans-
fer was in any way illusory or fraudulent militate
against a finding that either assent or even knowl-
edge of the [new collective-bargaining agreement]
should be ascribed to the new ownership and man-
agement.
The Board held that the corporate entity was not bound
to assume the collective-bargaining agreement. The
Board, however, did not find, as the Respondent claims,
that the entity was not a successor, since that was not
the issue.
In the TKB case, above, 240 NLRB 1082 (1979), the
Board rejected the administrative law judge's application
of a successorship analysis to the facts in that case. In-
stead, it applied a stock transfer analysis, wherein it cited
the MPE case which involved a similar purchase of stock
during the period between collective-bargaining agree-
ments, except that in TKB the old entity was a member
of a multiemployer bargaining unit. The Board stated
(240 NLRB at 1085):
1508
SPENCER FOODS
It is clear that whether or not MPE, supra, would
allow a respondent, within the circumstances of that
case, to reject a contract not yet executed, such a
respondent may not decline to recognize and bar-
gain with the union in the appropriate unit.
In TKB, the administrative law judge found that the re-
spondent therein had no obligation to execute the collec-
tive-bargaining agreement as a successor employer. The
Board ultimately held that the respondent, although not
a successor but a continuing entity, did not unlawfully
refuse to execute the collective-bargaining agreement in-
asmuch as it had withdrawn from the multiemployer bar-
gaining unit.
Although this case is factually complicated by the fac-
tors of a hiatus in operation at Spencer and nonactive
employment of the former employees as well as other
changes, I conclude that the same continuing employing
entity existed throughout. I conclude that there was no
severance in employing entities, nor substitution of em-
ployers, but that S.F. remained, despite new ownership
and management, as the same employing entity.
I disagree that the stock purchase was a mere formal
contrivance to cover an assets purchase. The corporate
entity of S.F. existed after stock purchase not merely as
a legal concept. Prior to stock purchase, S.F. as a corpo-
ration was an ongoing business enterprise. Albeit the
Spencer plant was not operative, and several minor ad-
junct plants were unprofitable, S.F. was not a moribund
venture, thanks to the 1000-employee operation in
Schuyler. After stock purchase, S.F. continued the
Schuyler operation unchanged. With respect to the other
plants, under new ownership, it implemented a plan for
profitable operations eventually as President Pearson had
proposed, by, inter alia, disposing of the adjunct plants
and reopening Spencer essentially with the changes he
recommended. S.F. not merely continued in corporate
name, but it continued to operate as an ongoing, viable
business. While it may be true that LOL originally de-
sired to effectuate a simple purchase of assets, what in
fact occurred was the acquisition of an ongoing, employ-
ing entity by the purchase of its stock. The motivation
for this type of acquisition, i.e., to escape tax liability,
does not make it less real than if it were executed for any
other reason, nor can it excuse responsibility under the
National Labor Relations Act for obligations arising
therefrom. Cf. Miami Foundry Corp., 252 NLRB 2
(1980).
In no sense can S.F. be construed to have existed after
stock purchase as a mere "shell." It existed as a function-
ing corporate business and continued to exist and func-
tion as a corporation, and continued to be governed by
all laws, State and Federal, applicable to a corporation.
Although special warranties relieved the corporation of
certain pre-stock purchase liabilities, other liabilities were
retained, and after the stock purchase the entity contin-
ued to be subject to new liabilities incurred as a corpora-
tion. LOL may in the future dissolve the corporation and
administratively merge the business with its own, but at
all times material herein S.F. continued as a distinct ad-
ministrative as well as corporate entity despite internal
nomenclature.
With respect to the collective-bargaining unit therein,
i.e., the production and maintenance employees em-
ployed at the Spencer plant, I conclude that the unit did
not cease to exist on the closure of the Spencer plant. I
so conclude because I find that the employment relation-
ship between S.F. and those unit employees were not
permanently dissolved at plant closure. As evidenced by
S.F.'s conflicting representations to employees and to
various governmental agencies over a span of time, there
was no fixed intent by the employer to permanently
sever employees at plant closure. At best, S.F. had at the
date of closure laid off its unit employees with the object
of making such layoff permanent on condition subse-
quent that it sell its Spencer plant and sever the Spencer
operation from its business. As seen ftom the factual
analysis, the sale of the Spencer plant and its estrange-
ment from S.F. was a short-lived plan. Contemporaneous
negotiations with LOL occurred at the time of the clo-
sure. Those negotiations quickly evolved to the point
where in a matter of weeks President Pearson was clear-
ly attempting to effectuate a sale of an ongoing business
enterprise of LOL, i.e., a business which encompassed
the resumed operations of the Spencer plant by S.F.
under new ownership.
Employees' perception of their status as temporary
layoffs subject to recall was the inherent result of S.F.'s
past representations and news media disclosures of the
imminent reopening of the plant. The hiatus of closure
was prolonged by negotiations for stock purchase and
not by a decision to dispose of the Spencer plant. S.F.'s
intent was to resume unit work. Within this factual con-
text there is sufficient basis to infer that the unit employ-
ees retained an expectation of recall to their former jobs.
Thus both employer and employees cannot be found to
have viewed their relationship as permanently severed.
When the Spencer plant resumed operations, the unit
work resumed. The changes in the operation of the
Spencer plant, while obviously not cosmetic, were not
changes of the essential nature of unit work, nor of the
essential operations of the Spencer plant. Basically, the
same work continued for the same corporate entity at
the same place, with the same or substantially similar
procedures, processes, and machinery, serving the same
customers or same type of customers with much the
same sources of supply.
I conclude that when LOL assumed ownership and
control of S.F. it assumed ownership and control of an
employing entity of which the relationship to its past
unit employees at Spencer remained the same, i.e., it con-
tinued to remain the employer of unit employees who
had been laid off for the purpose of a sale of the plant. I
conclude that, on the stock acquisition, the sale of the
Spencer plant, which had been abandoned as an objec-
tive, was no longer an impediment to the active employ-
ment of those employees. The only other conceivable
impediment to their active employment during the hiatus
was S.F.'s unwillingness to operate as it had in the past
at the same level of wages and benefits that had been ne-
gotiated by the Union. That impediment could be re-
moved by negotiation or by unilateral action. I reject the
Respondent's argument that the expiration of the collec-
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DECISIONS OF NATIONAL LABOR RELATIONS BOARD
tive-bargaining agreement has any relationship to the
continuing employment relationship. I conclude that, in
December 1978 when recognition was withdrawn, S.F.
was back in the same posture as an employer of the
Spencer unit employees as it was on the day it decided
to close the plant but that, under new ownership, the de-
cision which precipitated the layoffs, i.e., to sell the
plant, had been rescinded and replaced with a decision to
resume unit work at Spencer. Therefore when S.F. re-
fused to recognize and bargain with the Union concern-
ing conditions of employment of unit employees, it did
so in absence of any evidence of a loss of majority status,
which status is presumed to adhere to the incumbent
union, and accordingly it breached its bargaining obliga-
tions under the Act.2 9 Furthermore, by the unilateral in-
stitution of new wage rates, benefits, and conditions of
employment and by the unilateral institution of new em-
ployment criteria (which adversely affected the employ-
ment of laid-off unit employees) without first bargaining
with the Union, the Respondent further violated its obli-
gations under the Act regardless of the presence or ab-
sence of antiunion motivation for that criteria. I conclude
that the only appropriate remedy in this case is a restora-
tion of the status quo ante remedy, i.e., Respondent be
ordered to reinstate preexisting wages, benefits, and con-
ditions of employment and to recall the unit employees
pursuant to past practice and as set forth in the expired
collective-bargaining agreement. Cf. American Gypsum
Co., 231 NLRB 1291 (1977).
2. The 8(a)(3) violation
Respondent contends that it decided to hire new em-
ployees prior to the reopening of the Spencer plant be-
cause of a dissatisfaction with the low productivity, high
absenteeism, and excessive workers' compensation costs
of the old work force. Although concluding that the old
work force as a whole was unsatisfactory, the Respond-
ent asserts that it nevertheless decided to treat all job ap-
plicants, old and new applicants, equally and without
prejudice by application of nondiscriminatory hiring cri-
teria.
Ordinarily, motivation is determinative of whether
Section 8(a)(3) of the Act has been violated. The Su-
preme Court has stated in NLRB v. Great Dane Trailers,
388 U.S. 26, 33-34 (1967):
Some conduct, however, is so "inherently destruc-
tive of employee interests" that it may be deemed
proscribed without need for proof of an underlying
improper motive. Labor Board v. Brown, supra, at
287; American Ship Building Co. v. Labor Board,
supra, at 311. That is, some conduct carries with it
"unavoidable consequences which the employer not
only foresaw, but which he must have intended"
and thus bears "its own indicia of intent." Labor
Board v. Erie Resistor Corp., supra, at 228, 231. If
a9 For the proposition that an incumbent union's majority status is pre-
sumed, see Automated Business Systems, 205 NLRB 532 (1973); Terrell
Machine Co., 173 NLRB 1480 (1969); Celanese Corp. of America, 95
NLRB 664, enfd. 427 F.2d 1088 (4th Cir. 1970); see also Barrington Plaza,
185 NLRB 962 (1970), enfd. in relevant part sub nom. Tragniew. Inc.. 470
F.2d 667 (9th Cir. 1972).
the conduct in question falls within this "inherently
destructive" category, the employer has the burden
of explaining away, justifying or characterizing "his
actions as something different than they appear on
their face" and if he fails, "an unfair labor practice
charge is made out." Id., at 228. And even if the
employer does come forward with counterexplana-
tions for his conduct in this situation, the Board
may nevertheless draw an inference of improper
motive from the conduct itself and exercise its duty
to strike the proper balance between the asserted
business justifications and the evasion of employee
rights in light of the Act and its policy.
The Court further stated that "if it can reasonably be
concluded that the employer's discriminatory conduct
was 'inherently destructive' of important employee
rights, no proof of an antiunion motivation is needed and
the Board can find an unfair labor practice even if the
employer introduces evidence that the conduct was moti-
vated by business considerations."
Respondent herein closed its plant after it had been
unable to obtain economic concessions from the Union,
and after it had represented to its employees that they
would be foreclosed from working unless the Union
granted those concessions. Respondent explicitly told its
employees that they would be out of work because of a
labor dispute. It represented to state and Federal govern-
mental agencies that it considered its employees to have
engaged in a labor dispute which caused their unemploy-
ment. The Spencer plant was put up for sale but it was
not sold. Rather, Respondent resumed operations but did
not recall the employees despite the request of the Union
for their reemployment. Respondent instead engaged in
an extensive and arduous task of soliciting inexperienced
workers from a wide geographic area and endured an
onerous period of training those new workers. Respond-
ent has thus engaged in conduct, the inherent and fore-
seeable effect of which tends to give its employees, job
applicants, and the community the impression that it had
not recalled employees to work because of their union
representation and because of their past and continuing
support of the Union's bargaining position which preced-
ed the plant closure. By its own conduct, Respondent
has created a situation whereby the failure to recall em-
ployees according to past practice has necessarily
become inherently destructive of employees' rights under
the Act to union representation and union activity.
Under such circumstances, the burden of proving that
the motivation for its conduct was economic must rest
upon Respondent. Cf. Saginaw Aggregates, Inc., 191
NLRB 553 (1971); Rushton & Mercier Woodworking Co.,
203 NLRB 123, 124 (1973); Marquis Printing Corp., 213
NLRB 394, 402 (1974); Allied Mills, 218 NLRB 281, 289
(1975); Smyth Mfg. Co., 247 NLRB 1139 (1980).
Additionally, the General Counsel has adduced suffi-
cient evidence to support an inference that the employ-
ees' membership in, representation by, and support of the
Union's bargaining position, i.e., maintenance of high
wages and benefits, was at least a motivating, if not sole,
factor in the formulation of the decision to hire a new
work force under new employment criteria. According-
1510
SPENCER FOODS
ly, the burden shifted to Respondent to demonstrate that
it would have decided to hire new employees under new
criteria of employment in the absence of the old employ-
ees' membership in, support of, and representation by the
Union. Wright Line, 251 NLRB 1083 (1980).
Based on the evidence in this record, I conclude that
Respondent has not met its burden of proof. The record
reveals that Respondent decided to reject the Union's re-
quest for recall of former employees at a point in time
when it had no definitive information on which to con-
clude that the former employees were deficient in work
effort, were prone to accidents inherently through their
own fault, or were subject to higher absenteeism than
that of the industry as a whole, or of the selective group
of employees of those enterprises which it sought to pur-
chase. At most, Respondent's decision-making agents
possessed the November 1977 letter of S.F. President
Pearson, supplemented by superficial "studies." Respond-
ent relied on Pearson's representations in his November
1977 letter, but that letter does not support the conclu-
sion that employees' deficiencies accounted solely or
even primarily for the lack of profitability and productiv-
ity. Nor did his letter deal with the possible causes of ac-
cidents and absenteeism, i.e., employee negligence or
willfulness, poor supervision, inadequate training, poor
plant facilities, etc. Instead, the letter contains indict-
ments of management as well as the physical faculties for
the lack of profitability. Most importantly, Pearson's
letter stressed the history of labor management conflict,
and high labor costs as caused by low profits. He did not
attack the ability of former employees as a whole, but
rather their "Union versus Company attitude." Under
the full factual context of this case, his prescription for
success incorporating employees "on a free-standing
basis" becomes apparent, i.e., Respondent under new
ownership would achieve success and lower labor costs
with employees unrepresented by a union and without
the need to negotiate for less expensive wages and bene-
fits with a union which on behalf of the employees has
strenuously opposed such objectives. I conclude that Re-
spondent has failed to establish that its rejection of the
Union's request for recalling former employees as a
group was motivated by a conviction that over 400 em-
ployees were undesirable workers, and failed to prove
that it would not in any event have recalled most former
employees even in the absence of their past membership
in, representation by, and support of the Union. I con-
clude that the implementation of new employment crite-
ria was the direct result of a decision not to hire most of
the former employees in order to achieve lower labor
costs by means of the avoidance of bargaining obliga-
tions imposed by the Act, and that former employees
were discriminatorily refused employment pursuant to
those new employment standards, and that Section
8(a)(3) and (1) of the Act was thereby violated. I con-
clude that the new employment standards were more re-
strictive than the employment tolerance level of Re-
spondent prior to the plant closure, and that the applica-
tion of those standards, either as set forth in the hiring
criteria or in the judgments made by hiring personnel,
was discriminatory under the Act regardless of whether
they were applied equally to old and new employees
alike, because those new standards were discriminatorily
motivated. In any event, I conclude that the new stand-
ards of employment were applied less rigidly to new em-
ployees in support of a discriminatorily motivated deci-
sion to inhibit the hiring of as many former employees as
possible. I therefore conclude that Respondent has vio-
lated Section 8(a)(3) and (1) as alleged in the complaint.
CONCLUSIONS OF LAW
I. The Respondent is, and has been at all times materi-
al herein, the continuing and same employer engaged in
commerce within the meaning of Section 2(2), (6), and
(7) of the Act.
2. United Food and Commercial Workers International
Union, Local 152, AFL-CIO, is a labor organization
within the meaning of Section 2(5) of the Act.
3. Since 1952, and at all times since material herein,
the Union, by virtue of Section 9(a) of the Act, has been,
and is, the exclusive representative of the employees in
the following described unit for the purpose of collective
bargaining with respect to rates of pay, wages, hours of
employment, and other terms and conditions of employ-
ment:
All employees employed by Respondent at its Spen-
cer, Iowa facility; excluding office and clerical em-
ployees, General Manager, Superintendent, Fore-
men, Livestock, Buyers, Livestock Buyer Trainees,
Salesmen, Chief Engineer, Electronic Scale Mainte-
nance Man, guards and supervisors defined in the
Act.
4. By withdrawing recognition from the Union in De-
cember 1978 and by failing and refusing to recognize and
bargain with the Union thereafter, Respondent has en-
gaged in unfair labor practices within the meaning of
Section 8(a)(5) and (1) of the Act.
5. By failing and refusing to bargain with the Union
since December 1978, concerning the recall of laid-off
bargaining unit employees, Respondent had engaged in
unfair labor practices within the meaning of Section
8(a)(5) and (1) of the Act.
6. By unilaterally changing wage rates, benefits, and
other terms and conditions of employment of the bar-
gaining unit employees and by unilaterally establishing
conditions and criteria for the eligibility of recall of bar-
gaining unit employees since January 1979, Respondent
has engaged in unfair labor practices in violation of Sec-
tion 8(a)(5) and (1) of the Act.
7. By establishing conditions and criteria for the eligi-
bility for recall of said laid-off employees to disqualify
most laid-off employees and pursuant thereto failing and
refusing to recall most of its laid-off employees since Jan-
uary 1979 because of those employees' memberhship in,
representation by, and activity in or on behalf of the
Union, and in order to eliminate the Union as the em-
ployees' collective-bargaining representative, Respondent
has engaged in unfair labor practices in violations of Sec-
tion 8(a)(3) and (1) of the Act.
8. By its plant manager and agent Dennis Heineman on
March 8, 1979, and by its agent William Huron in Febru-
ary 1979, the Respondent told employees that they
1511
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
would not be employed in the future when work was
available to them and when the employees were willing
to work if they presently refused to cross the Union's
lawful picket line, and thus engaged in unfair labor prac-
tices in violation of Section 8(a)(1) of the Act.
9. The aforesaid unfair labor practices are unfair labor
practices affecting commerce within the meaning of Sec-
tion 2(6) and (7) of the Act.
THE REMEDY
Having found that Respondent has engaged in and is
engaging in certain unfair labor practices, I find it neces-
sary that Respondent be ordered to cease and desist
therefrom and take certain affirmative action designed to
effectuate the policies of the Act. Having found that Re-
spondent has refused to recognize and bargain with the
Union as the exclusive representative of the employees in
the appropriate unit as described herein, I shall recom-
mend that Respondent be ordered to recognize and, on
request, bargain in good faith with the Union as the ex-
clusive representative of the employees in the appropri-
ate unit with respect to wages, hours, benefits, and all
other terms and conditions of employment, and reinstate
all wages, benefits, and other conditions of employment
which existed prior to the unilateral action. Having
found that Respondent refused to recall most of its laid-
off Spencer plant employees pursuant to unilaterally es-
tablished and discriminatorily effectuated conditions and
criteria for recall, I find it necessary that Respondent be
ordered to recall those laid-off employees who would
otherwise have been recalled to available positions pur-
suant to the Respondent's past practice and pursuant to
the appropriate provisions of the most recent collective-
bargaining agreement and to make whole such employ-
ees and any other whole for any loss they may have suf-
fered by reason of said failure to recall pursuant to past
practice and the provisions of the most recent collective-
bargaining agreement, and to make whole all employees,
past and present, for any loss they may have suffered by
reason of the unilateral changes in their wages, benefits,
and other terms and conditions of employment. Backpay
shall be computed in accordance with the formula set
forth by the Board in F. W. Woolworth Co., 90 NLRB
289 (1950), and Florida Steel Corp., 231 NLRB 651
(1977).3° Additionally, Respondent will be ordered to
post an appropriate notice to employees.
[Recommended Order omitted from publication.]
s3 See generally Isis Plumbing Co., 138 NLRB 716 (1962).
* U.S. GOVERNMENT PRINTING OFFICE: 1985-421-554:10002
1512