Spun-Jee Corp.

National Labor Relations Board - Board Decisions

May 20, 1968

171 N.L.R.B. 557 (N.L.R.B. 1968)

SPUN-JEE CORP. 557
Spun -Jee Corp . and The James Textile Corp. and
Undergarment and Negligee Workers Union,
Local 62, International Ladies' Garment Work-
ers' Union , AFL-CIO. Case 2-CA-9520
May 20, 1968
SUPPLEMENTAL DECISION AND ORDER
BY MEMBERS FANNING, BROWN , AND JENKINS
On May 26, 1965, the National Labor Relations
Board issued its Decision and Order in the above-
entitled proceeding,' finding that Respondents had
violated Section 8(a)(5) and (1) of the National
Labor Relations Act, as amended, by refusing to
accept and be bound by the results of collective
bargaining between the Union and Allied Un-
derwear Association, a multiemployer bargaining
group of which Respondents were members. The
Board also found that Respondents violated Section
8(a)(5) and (1) by failing to notify and bargain
with the Union concerning the shutdown of their
New York plant, the subcontracting of production
operations, and the removal of operations to a new
location. The Board ordered that Respondents bar-
gain with the Union about resumption of the sub-
contracted and removed operations, or about the
effects of discontinuance upon the employees, and
ordered that Respondents offer reinstatement to
employees and make them whole for lost pay in a
specified manner which it deemed best suited to ef-
fectuate the policies of the Act. Thereafter, the
Board filed a petition with the United States Court
of Appeals for the Second Circuit for enforcement
of its Order. On October 30, 1967, the court denied
enforcement of the Board's Order,' finding, in part,
that Respondents had not unlawfully failed to bar-
gain concerning the shutdown, subcontracting, and
removal of their operations, and remanding the
case to the Board for futher consideration of the
issue as to whether Respondents are bound by the
agreement reached by the Union and Association
or whether, instead, Respondents effectively
withdrew from the Association. As posed by the
court, the issue presented to the Board, in sub-
stance, is whether Respondents' attempted
withdrawal from the Association, though otherwise
untimely, was nevertheless justified by the existence
of unusual circumstances.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the Na-
tional Labor Relations Board has delegated its
powers in connection with this case to a three-
member panel.
In accordance with the court's remand order, the
Board has reconsidered its Decision in this case.
The facts, more fully appearing in the earlier Board
and court decisions, in essence are as follows: For a
number of years Respondents' production,
shipping, and warehousing employees had been
represented by the Union as part of the multiem-
ployer unit covered by the Union's contracts with
the Association. In March 1963, prior to the cur-
rent contract's June 30 expiration date, the As-
sociation asked the Union for a 1-year extension of
the current contract terms in consideration of the
difficult economic plight of the textile industry in
the greater New York area at that time. The Union,
however, rejected this proposal and informed the
Association that it would seek to secure modifica-
tion of the contract terms. After two meetings
between the Union and Association in late April
and early May, at which the Union presented and
pursued its contract demands, Respondents' Pres-
ident Pillet sought out the Union Business
Manager Schoenwald, explained to him the
Respondents' economic problems and requested a
1-year extension of the contract for the Respon-
dents' benefit regardless of the outcome of associa-
tion bargaining. When Schoenwald refused to give
Respondents the benefit of any separate or dif-
ferent treatment, Pillet replied that his back was to
the wall and that unless he received such an exten-
sion he would have to terminate the present enter-
prise at the expiration of the current contract, sub-
contract the production work and move the
remaining operations to avoid New York City
taxes.
After Pillet's meeting with Schoenwald, Respon-
dents, on May 17, resigned from the Association,
thereafter looked for a new site to which to move,
and on June 14 executed a lease on a site in New
Jersey. In late May Respondents began to phase out
their New York operations. Although Respondents
were evasive in response to employee questions and
denied intent to move, it is apparent that the Union
was not misled as shown by Union Business Agent
Shatnoff's reply to Plant Manager Iorio's assertion
that changes in the plant were referable merely to
the fact that "business was slow." Shatnoff replied,
"Who is kidding who?" Respondents continued
with its dismantling and removal of machines, and
eventually, on June 18 Pillet explicitly admitted to
Shatnoff that the reports of plant closing were true.
The Union's only reply to this was by Schoenwald's
' 152 NLRB 943 ' N L R B v Spun-Jee Corporation, 385 F 2d 379 (C A 2), as amended,
December 7, 1967
171 NLRB No. 64
558 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
letter, 2 days later, informing Pillet that the Union
intended to hold Respondents to its new agreement
with the Association, which was reached thereafter
on July 1. Respondents subsequently closed out the
New York operations, subcontracted most of the
production operations, and transferred the buying
and selling aspects of the business to the New Jer-
sey site . The Union picketed that location.
From the facts recited it is thus apparent that the
Union was aware, having been so informed by the
Association even before the commencement of new
contract negotiations , that employers in this indus-
try in the New York area were facing a difficult
economic situation , and that to meet this exigency
they were seeking a measure of forbearance by the
Union in contract negotiations . After it had become
apparent that such forbearance would not be ac-
corded to the Association, the Respondents
separately advised the Union that their own
economic distress was such that without the special
consideration which they sought-continuance of
their own operations under the existing contract re-
gardless of Association bargaining-they could not
continue to operate their business in the New York
area . On its part the Union , throughout all this,
gave essentially one answer: to the Association that
it would insist upon advancing proposals for modifi-
cation on the existing contract , and to the Respon-
dents that it would insist upon their acceptance of
the contract eventually reached with the Associa-
tion.
As set forth above, upon these facts the court
concluded , and we accept its finding, that Respon-
dents did not refuse to bargain with the Union con-
cerning the shutdown , subcontracting , and removal
of their New York operations. In so finding the
court determined that the Union, by its failure to
request bargaining upon becoming aware of
Respondents ' special need for consideration of
these subjects, waived whatever rights it may have
had in this respect.' In the light of this finding, and
in view of all the circumstances ,' including the
evident economic hardship inherent in Respon-
dents' continuance in business in the New York
area , we find that unusual circumstances existed
which justified Respondents' withdrawal from the
Association and removal to New Jersey, out of the
area of the Association's operations, and that this
withdrawal, although ordinarily to be deemed un-
timely because occurring after the commencement
of associationwide negotiations, nevertheless here
was valid and effective. And thus, as we have found
that in these circumstances, Respondents effective-
ly withdrew from the Association, it follows, and we
further find, that Respondents are not bound by,
nor may they be required to accept, the contract
negotiated by the Union with the Association.
As we now conclude that Respondents did not
violate in any respect Section 8(a)(5) and (1), we
shall dismiss the complaint in its entirety.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor
Relations Board hereby orders that the complaint
herein be, and it hereby is, dismissed in its entirety.
'Cf. U.S. Lingerie Corporation , 170 NLRB 750. ' See Retail A,soc,ates , !nc , 120 NLRB 388,395