Stateside Shipyard and Marina, Inc.

National Labor Relations Board - Board Decisions

Sep 19, 1969

178 N.L.R.B. 516 (N.L.R.B. 1969)

516 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Marion Simcox, Trustee of Wagner Shipyard and
Marina , Inc., and Stateside Service, Inc. d/b/a
Stateside Shipyard and Marina , Inc. and SIU De
Puerto Rico afdiada a Seafarers International
Union , Atlantic , Gulf, Lakes and Inland Waters
District , AFL-CIO. Case 24-CA-2523
September 19, 1969
DECISION AND ORDER
BY CHAIRMAN MCCULLOCH AND MEMBERS
FANNING AND JENKINS
On. January 8, 1969, Trial Examiner Alvin
Lieberman issued his Decision in the above-entitled
proceeding. finding that Respondent Stateside
Service. Inc. d/b/a Stateside Shipyard and Marina,
Inc. (herein referred to as Stateside) had engaged in
and was engaging in certain unfair labor practices
and recommending that it cease and desist
therefrom and take certain affirmative action, as set
forth in the attached Trial Examiner's Decision. He
further found that Respondent Marion Simcox,
Trustee of Wagner Shipyard and Marina. Inc.
(herein referred to as Simcox) had not engaged in
certain other unfair labor practices alleged in the
complaint and recommended that such allegations
be dismissed. Thereafter, the General Counsel and
the SIU. the Charging Party herein, filed exceptions
to the Decision and supporting briefs, and the
Respondents filed a memorandum in support of the
Trial Examiner's Decision.'
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the
National Labor Relations Board has delegated its
powers in connection with this case to a
three-member panel.
The Board has reviewed the rulings of the Trial
Examiner made at the hearing and finds that no
prejudicial error was committed. The rulings are
hereby affirmed. The Board has considered the Trial
Examiner's Decision, the exceptions and briefs, and
the entire record in this case, and hereby adopts the
findings, conclusions, and recommendations of the
Trial Examiner with the following modifications.
Respondent Simcox is charged with violating
Section 8(a)(5) of the Act by taking certain actions
without consulting with the Union, during a period
in which Simcox was serving as the court-appointed
trustee of Wagner Shipyard and Marina, Inc., an
employer formerly in a collective-bargaining
'Subsequently , the Charging Party filed a motion in which it asked the
Board to consider alleged admissions in certain eviction proceedings
instituted by Stateside subsequent to the hearing in this case Respondents
filed an answer to the motion which did not direuly challenge the proffer
of documents made by the Charging Party, but rather sought to draw
support for Respondent 's own position from the documents submitted
While the Board's Rules and Regulations and Statements of Procedure,
Series 8, as amended, make no provision for such posthearing submissions
of evidence , the Respondents have expressed no strong opposition to the
proffer, and we shall grant the motion
relationship with the Union. Simcox is charged with
a further violation of Section 8(a)(5) by refusing to
honor a Union request for bargaining during the
period of his trusteeship. Respondent Stateside, a
corporation wholly owned by Simcox and his wife,
is alleged in the complaint to be the successor
employer to trustee Simcox and thus to be
responsible for remedying any violations of Section
8(a)(5) committed by Simcox. Respondent Stateside
is also alleged to have violated Section 8(a)(2) of the
Act, by lending certain unlawful assistance to
Employees' Executive Committee of Stateside
Service. Inc., an employee organization.
The Trial Examiner found that Respondent
Simcox had not violated Section 8(a)(5) and that,
accordingly, Respondent Stateside had no remedial
liability as a successor. He also found that
Respondent Stateside had, as charged, violated
Section 8(a)(2) by its dealings with the Employees'
Executive Committee, and he recommended that
Stateside be ordered to terminate its bargaining
relationship with the Committee.
Respondent Stateside has filed no exceptions to
the 8(a)(2) findings and conclusions, and we shall
adopt them pro forma and issue an order in
accordance with the Trial Examiner's
recommendations. With respect to the Trial
Examiner's recommended dismissal of the 8(a)(5)
allegation, the General Counsel and the Charging
Party have filed exceptions, and we shall discuss
these below, after the following summary of the
evidence.
Wagner Shipyard and Marina. Inc.. was a Puerto
Rican corporation engaged in the building. repair,
and storage of boats and boating equipment. The
Union was the recognized bargaining representative
of Wagner's employees and, at all material times
herein, was a party to a collective-bargaining
contract with Wagner. Captain Wagner had
operated the business at a substantial loss for 6 or 7
years prior to 1967. Wagner's major creditors were
Banco Credito Ahorra Ponceno and the Puerto Rico
Industrial Development Company (hereinafter
respectively called Banco and PRIDCO). Banco
appears to be a private financial institution, and
PRIDCO is a government agency. Both were
apparently more interested in finding a successful
operator of the shipyard and marina than in simply
regaining possession of the assets, upon which they
held a mortgage.
During the summer of 1967, conditions at
Wagner's business had seriously deteriorated.
During that year, apparently three firms. including
Respondent Stateside (Respondent Simcox is
coow,ner. with his wife, and president of Stateside)
indicated a desire to purchase Wagner's business,
and consulted Banco and PRIDCO for this purpose.
Banco and PRIDCO, wishing to continue Wagner's
operations, recommended that Simcox hire an
economic consultant for advice as to the possibility
of rehabilitating Wagner's business and making it
178 NLRBNo 85
STATESIDE SHIPYARD AND MARINA, INC.
successful. While the consultant essentially made a
study for Simcox, he also studied Simcox's financial
and operational abilities for the financial
institutions. The result of the study was a
recommendation to Simcox that he purchase
Wagner's assets and lease, and a recommendation
that Banco and PRIDCO give preference to Simcox
upon foreclosure of the Wagner mortgage.
On August 11, Simcox was appointed receiver of
the assets, and he secured possession of the shipyard
and marina on that day or on August 14, the
following Monday.
Subsequently, on August 16. 1967. as a result of
the foreclosure proceeding, Simcox was made a
court-appointed trustee "to continue the operation
of the business, maintaining the property and
avoiding the alleged damages [which the Court
believed might stem prom closing of the property]."
The court order states further that Simcox "shall
have all the powers and obligations inherent upon
his position, including such as . .. hiring necessary
personnel . . . discharging employees. . . . and all
other powers and obligations incidental to the
administration of a business of that nature,
Apparently, the employees of Wagner worked until
August 16, finishing .ip a ship then in the shipyard,
and were discharged on that day at Simcox's
instruction that, after Captain Wagner and his men
finished the ship, they should leave the shipyard.
Wagner paid his employees off when the work was
completed. On the day of, or the day before, the
above discharge, Simcox brought in two employees
from Stateside, Simcox's own operation, to start
cleaning and refurbishing Wagner's facilities.
About 2 or 3 weeks after becoming trustee,
Simcox leased part of the premises to Stateside,
which continued the rehabilitation begun by Simcox
and began partial operation of the premises.
Subsequently, in about mid-September 1967,
Stateside began operating the total facility, including
the shipyard and marina, under lease from trustee
Simcox. eventually using from 20 to 60 employees,
some of whom were transferred from Stateside's old
plant.
Apparently. Stateside's major business prior to its
lease and purchase (discussed below) of Wagner's
facilities was the repair and overhaul of motors.
After Stateside took over the entire yard and
marina, it operated at Wagner a motor shop,
electric shop, machine shop, welding shop, and the
marina railway. It appears that the work now done
by Stateside at the Wagner yard is probably little
different from that which Wagner's employees had
been doing. Stateside, at its original location, had
about eight employees; all of these eventually came
to the Wagner installation as Stateside took over. In
addition. as Stateside increased production at the
former Wagner facilities, the general manager hired
new employees by way of advertisements in the
general labor market. There is testimony that, on
occasion, the employee complement went as high as
517
60 employees.
On about November 30. 1967, the Union made its
sole request for bargaining , by a telegram addressed
to "Stateside Service Inc." The request asked that
the bargaining agreement be honored and referred
to certain "problems" arising under the agreement
because of the discharge of employees and other
causes. Respondent Simcox replied that he had been
operating the shipyard by order of the court , that he
had no control over the discharge of the former
employees, and that the Union would be notified
when the court determined the case. The Union
made no subsequent request that trustee Simcox
should bargain with it . Neither Simcox nor
Stateside had ever contacted the Union about any
event which had taken place since the foreclosure,
although Simcox had been aware of the Union's
bargaining rights at the Wagner firm.
In January 1968, Banco and PRIDCO purchased
the assets at the foreclosure sale. About March 15,
1968, Respondent Stateside purchased the assets
from the two creditors and apparently continued to
operate substantially as had Wagner, except for the
size of the employee complement . At no time were
Wagner 's employees (except perhaps one supervisor)
hired by Simcox or Stateside , despite occasional
visits to the business by a few employees to search
for work.
The complaint alleges- ( 1) that Simcox , as trustee,
was a successor employer to Wagner; ( 2) that
trustee Simcox ' s termination of Wagner's
employees, without notice to, or consultation with.
the Union, was a violation of Section 8(a)(5); (3)
that trustee Simcox's actions of discontinuing
operation of the shipyard and leasing it to Stateside,
without notice to, or consultation with, the Union,
was violative of 8(a )( 5); (4) that trustee Simcox's
refusal to honor the Union 's request , made on or
about November 30, 1967. to, in the language of the
complaint . "discuss some of the problems which had
arisen out of the mass discharge of the employees
when he took possession of the yard as trustee .. .
and also problems arising out of the existence of the
contract executed by the Union with Wagner
Shipyard ..." was violative of 8(a )( 5); and ( 5) that
Respondent Stateside has been, since March 1968,
the successor employer of the business formerly
operated by Wagner Shipyard, and that , as such,
Stateside is responsible for the foregoing alleged
unfair labor practices committed by Simeox while
acting as trustee. It might be noted that the
complaint does not allege that Respondent Stateside
became a successor employer in the sense that the
Union continued to have a right to represent
Stateside ' s new and expanded complement of
employees ; nor does the complaint allege any
independent unfair practices by Stateside . but rather
alleges only that Stateside , as a successor, is
responsible for remedying Simcox's alleged
violations. Cf. Perma Vinyl Corp., 164 NLRB No.
119, enfd . 398 F . 2d 544 (C.A. 5).
518 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
The Trial Examiner found that neither of the
Respondents- Simcox as trustee or Stateside- was a
successor employer, since neither hired a work force
in which Wagner's employees constituted a majority
of the appropriate unit The Trial Examiner further
found that, assuming arguendo that Simcox, as
trustee, was a legal successor to Wagner, as
contended by the General Counsel, Simcox would
step into Wagner's shoes vis-a-vis the Union: and,
under the "management rights" clause of the
Wagner-SIU contract. Simcox would have had the
right, without consulting the Union, to decide the
extent to which his business should operate or be
shut down.' Thus, the Trial Examiner reasoned that,
under the contract, Simcox had the complete right
to shut down for repairs and, in the process,
discharge the entire work force without bargaining
with the Union. In addition, according to the Trial
Examiner, Simcox's decision to lease the premises
to Stateside, without consulting the Union, would
not violate 8(a)(5) since it was an act which, if it
had been done by Wagner, would have put Wagner
completely out of business. and, under the Trial
Examiner's reading of N.L R B. v. Darlington
Manufacturing Co., 380 U.S. 263, and Ozark
Trailers, Incorporated, 161 NLRB 561, an employer
need not discuss such a decision with a union before
implementing it.
The General Counsel and the Union contend that
Respondent Simcox. upon becoming trustee, became
the employer of Wagner's enterprise. including the
employees working prior to the August 16
discharge. that Simcox, as trustee, had a duty to
consult the Union about his decisions to discharge
the employees and subsequently to lease the
premises to Stateside, and about problems relating
to the collective-bargaining agreement; and that
Respondent Stateside is Simcox's successor and
alter ego and is thereby sublect to remedy the
8(a)(5) violations committed by Simcox.
Respondents Simcox and Stateside contend that
they are not successors, as they did not continue the
employing industry, and that no violations or
remedial responsibility may be charged to either of
them.
We agree with the General Counsel that the Trial
Examiner erred in applying traditional tests of
successorship to the determination of whether
trustee Simcox was obliged to bargain with the
Union under Section 8(a)(5). In normal arms-length
transfers of business between unrelated sellers and
purchasers, where the issue is whether the new
employer has a prospective duty to bargain with the
union recognised by the predecessor employer, we
have looked to whether the "employing industry"
remains substantially the same after the transfer.
Johnson Ready-Mix C'o., 142 NLRB 437; Tallakson
That clause provides , in relevant part "The management of the yard.
including . the extent to which the locations covered by this agreement
shall operate or be shutdown shall be solely and exclusively the
prerogatives of the Company
Ford, Inc., 171 NLRB No. 67: Thomas Cadillac.
170 NLRB No. 92. cert. denied 396 U.S. 889.
Howev er. the question of successorship for purposes
of a future bargaining obligation, in the sense of a
"new" employer succeeding an "old" employer, is
not raised by the present complaint. The complaint,
rather, alleges that by virtue of his appointment as
trustee of Wagner's property, Respondent Simcox
became an alter ego of Wagner, a successor in law
vis-a-vis the Union, with rights against and duties to
the Union coterminous with those of Wagner.
We think the theory of the complaint is. in this
case, sound In his capacity as trustee, Simcox
became guardian of Wagner's assets, with full
authority to continue the operation of the business
and to exercise all powers necessary to the
administration of that business. Section 2(1) of the
Act defines the word "person," as used in the
statute. to include "trustees, trustees in bankruptcy,
or receivers," and Section 2(2) defines an employer"
as including "any person acting as an agent of an
employer, directly or indirectly." [Emphasis
supplied. It seems clear from these provisions that
Congress has not foreclosed the Board from
exercising jurisdiction over trustees such as Simcox.
See N.L R.B. v W.C. Bachelder, 120 F.2d 574
(C.A. 7). And, on the evidence in the present case, it
seems similarly clear that when Simcox became
trustee of the Wagner assets, he also became
Wagner's legal successor for purposes of collective
bargaining, and by operation of* law was hound to
honor any bargaining obligations owed by Wagner
to the Union and privileged to assert any claims or
defenses which Wagner might have asserted. The
predicate of the complaint is that Simcox's status as
trustee was that of "temporary custodian" of
Wagner's business, and we believe that it may
properly be so characterized.
It therefore becomes unnecessary to comment
upon the validity of the Trial Examiner's conclusion
that, by application of the traditional criteria of
successorship, a finding of successorship would he
improper in the circumstances of this case.
Despite our disagreement with the Trial Examiner
as to the disposition of the threshold question of
successorship, however, we concur in his ultimate
conclusion that all of the 8(a)(5) allegations should
be dismissed. As we have earlier noted. for purposes
of alternative analysis after resolving the initial issue
against the General Counsel. the Trial Examiner
made a working assumption that Simcox-as-trustee
was required to bargain in Wagner's stead. Having
made such an assumption, he traced out its
implications, and he decided that even if such a
requirement had indeed devolved upon Simcox, the
trustee had not violated Section 8(a)(5) in any of the
particulars charged in the complaint. For the
reasons given hereafter, we agree in result, if not in
rationale.
As previously described, the complaint alleges
that Simcox, as trustee, violated a duty to confer
STATESIDE SHIPYARD AND MARINA. INC. 519
with the Union which represented Wagner's
employees before taking the action of terminating
those employees on or about August 16, 1967. We
agree with the Trial Examiner's opinion that, under
the "management rights" clause of the bargaining
agreement, footnote 2. supra. Wagner could have
effected such a closure and consequent termination
of employees unilaterally, without violating Section
8(a)(5), and that Wagner', trustee is equally entitled
to invoke the Union's contractual waiver of
consultation embodied in this clause. Any hiring
done following the temporary closing, with the
exception of some cleanup men, was done by
Respondent Stateside, and the complaint contains
no allegation that such unilateral hiring constituted
an independent unfair labor practice by Stateside.
The complaint further alleges that Sinicox violated
Section 8(a)(5) by. unilaterally and without notice to
the Union, discontinuing operation of the shipyard
and leasing it to Respondent Stateside. The Trial
Examiner thought that if Wagner had engaged in
such conduct, it would have been effectively putting
itself out of business, and he was of the belief. based
on his analysis of rV L.R.B. v. Darlington
Manufacturing Co.. 380 U.S. 263. and Ozark
Trailers, Inc., 161 NLRB 561, that an employer is
not required to bargain with an incumbent union
about a decision to terminate his business. In our
opinion, however, the same "management rights"
clause which authorized Wagner (and therefore the
trustee) to discontinue the employment of the
working force without consultation with the Union
also authorized Wagner (and the trustee) to lease
the premises without conferring with the Union. In
our view, therefore, it is unnecessary here to
consider the extent of an employer's statutory duty
to bargain with a union about his decision to cease
operation of his business permanently.
The final violation of Section 8(a)(5) complained
of relates to an alleged failure by trustee Simcox to
honor a request made by the Union on November
30, 1967. asking Simcox to, in the language of the
complaint, ... "discuss some of the problems which
had arisen out of the mass discharge of the
employees when he took possession of the yard as
trustee . . and also problems arising out of the
existence of the contract executed by the Union with
Wagner Shipyard." The Union's telegram in
evidence, however, is addressed not to trustee
Slmcox, but to "State Side Service Inc.," and the
body of the telegram appears to confirm that the
Union was making its demands upon Respondent
Stateside and not upon Simcox qua trustee. The
telegram states:
We hereby request you to honor the outstanding
collective bargaining agreement in effect with
Warner shipyard and marine and meet with us on
Monday December 4 at 9:30 A.M. or Tuesday
December 5 9:30 A.M in our offices in 1313
Fernandez Juncos Ave second floor Santurce P R
in reference to the above and to solve federal
other important and urgente problem among
other the mass discharge of union member the
moneys due to the union and warefare and check
off dues. Please confirm by telegram. (Verbatim.)
Judging from the addressee and the content of the
telegram, the implication is that the Union was
asking Respondent Stateside, not trustee Simcox, to
both honor the existing collective-bargaining
agreement and to repair past failures to abide by the
contract and to comply with statutory obligations.
Simcox's reply informing the Union that he had
been operating the yard under court order drew no
response from the Union. Whether Respondent
Stateside owed any independent bargaining
obligations to the Union as a result of the eventual
transfer of the business to it is not before us, for the
complaint alleges no separate violations on the part
of Stateside. What the complaint does allege is that
trustee Simcox refused to honor a specific request
for bargaining about the effects of his actions in
regard to the transfer of the business, and we hold
that the telegram was an inadequate instrument for
making such a request and did not constitute, for
present purposes, a proper application to Simcox in
his capacity as trustee.
We conclude that the Trial Examiner's
recommended findings that the 8(a)(5) allegations
against Respondents Simcox and Stateside be
dismissed and that the 8(a)(2) allegations against
Stateside he upheld should be adopted. While we
modify his Conclusion of Law 5 to conform with
our determination that Simcox, as trustee, was a
successor to Wagner Shipyard, we shall otherwise
order Respondent Stateside to comply only with the
Trial Examiner's Recommended Order.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor
Relations Board hereby adopts as its Order the
Recommended Order of the Trial Examiner, and
hereby orders that Respondent, Stateside Service
Inc , d/b/a Stateside Shipyard and Marina. inc..
San Juan, Puerto Rico, its officers, agents,
successors, and assigns, shall take the action set
forth in the Trial Examiner's Recommended Order.
TRIAL EXAMINER 'S DECISION
ALyiN LiEBFRMAN , Trial Examiner . The trial in this
proceeding , with all parties represented , was held before
me in Hato Rey. Puerto Rico, on August 15, 16, and 19,
1968. upon a complaint of the General Counsel' dated
' lhe complaint was issued on a charge and an amended charge filed.
respectively, on February 21 and June 10, 1968, by SiU de Puerto Rn.o
aliliada a Seafarers International Union, Atlanta , Gulf, Lakes and Inland
Waters District, Ai•L-CIO.
520 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
June 18, 1968, and Respondents' point answer.' In general,
the issues litigated were whether Respondent Simcox
violated Section 8(a)(5) and (1) of the National Labor
Relations Act, as amended (herein called the Act); and
whether the corporate Respondent (herein called
Stateside)' violated Section 8(a)(2) and (1) of the Act.
Particularly, the questions for decision are as follows:
1. Is either Respondent a successor' to Wagner
Shipyard and Marina , Inc. (herein called Wagner
Sh ipyard)9
2. Did Respondent Simcox violate Section 8(a)(5) and
(I) of the Act by not notifying SIU de Puerto Rico
afiliada a Seafarers' International Union, Atlantic, Gulf,
Lakes and Inland Waters District, AFL-CIO (herein
subsequently called SIU) of, or consulting with it
concerning, the termination of the services of employees
of Wagner Shipyard'
3. Did Respondent Simcox violate Section 8(a)(5) and
(1) of the Act by not notifying SIU of, or consulting with
it concerning, the leasing of the facilities and equipment of
Wagner Shipyard to Respondent Stateside?
4 Did Respondent Simcox violate Section 8(a)(5) and
(1) of the Act by not complying with SIU's specific
request for bargaining with respect to the termination of
the employment of Wagner Shipyard's employees and
other matters having a relationship to the
collective-bargaining contract between SIU and Wagner
Shipyard?
5. Is Respondent Stateside responsible for any unfair
labor practice committed by Respondent Simcox?
6. Did Respondent Stateside violate Section 8(a)(2) and
(1) of the Act in connection with its dealings with its
employees and a committee which they chose to represent
them, now known as Employees' Executive Committee of
Stateside Service, Inc. (herein called the Committee),
named in this proceeding as the party to the contract')
Upon the entire record,` upon my observation of the
witnesses and their demeanor while testifying,` and upon
careful consideration of the arguments made and the
briefs submitted by the General Counsel and Respondents,
I make the following.
FINDINGS OF FACT
1. JURISDICTION
Respondent Stateside and Wagner Shipyard, both
Puerto Rican corporations, are the entrepreneurial entities
involved in this proceeding. Before September 1967, in
which month its only plant, including all its machinery,
was leased in its entirety to respondent Stateside,' Wagner
Shipyard was engaged at Isla Grande, Puerto Rico, in
building and repairing ships and in operating a marina.
Since becoming the lessee of the premises formerly
occupied by Wagner Shipyard, Respondent Stateside has,
like Wagner Shipyard, conducted a shipbuilding and
ship-repair business there and has also operated a marina.
During 1966, the last full calendar year prior to the
year in which the violations of Section 8(a)(5) of the Act
set forth in the complaint are alleged to have occurred,
Wagner Shipyard purchased and received in Puerto Rico
materials valued at about $50,000 from suppliers located
in various States of the United States In 1967 respondent
Stateside purchased and received in Puerto Rico materials
and equipment valued at more than S50,000 which
originated outside of Puerto Rico.
On the foregoing I find that Wagner Shipyard was, and
Respondent Stateside is, engaged in commerce within the
meaning of the Act. I further find that the assertion of
jurisdiction over this matter by the National Labor
Relations Board (herein called the Board) is warranted.
Montex Drilling Cornpani', 122 NLRB 139. 140; Siemons
Mailing Service, 122 NLRB 81, 85; Cantera Providencia,
111 NLRB 848.
II. THE LABOR ORGANIZATIONS INVOLVED
SIU and the Committee are labor organiLations within
the meaning of the Act
Ill. THE ALLEGED UNFAIR LABOR PRACTICES
A. Introduction
'During the trail the complaint was amended to set forth the corporate
Respondent 's name as it appears in the caption The complaint was further
amended by adding the words "of Stateside Service, Inc" after the word
"Committee" in paragraph III, and by substituting the following sentence
for the first sentence of paragraph VIII "On or about March 15, 1968 the
Respondent Stateside Service purchased from Wagner's creditors, Fomento
and Banco Credito y Ahora Ponceno, all the assets of the Wagner
Shipyard " Also during the trial amendments were made in the answer
Paragraphs 3 and 5 were amended so as to admit , respectively, paragraphs
LLB and III of the complaint Before resting the General Counsel moved to
conform the complaint to the proof by substituting the following sentence
for the first sentence of paragraph VI "During the month of September
1967 Respondent Simcox decided under court order of the Superior Court
of Puerto Rico to continue the operations of Wagner Shipyard and to lease
the shipyard facilities and equipment to the Respondent Stateside Service,
of which he is the sole owner and operator " After due deliberation I have
concluded that that motion , on which decision was reserved, should be, and
the same hereby is, denied
'Respondent Simcox is the president of Respondent Stateside
'Unless otherwise noted, when used in this Decision, "successor" and
related words will be deemed to have the special technical meanings
attributed to them in the field of labor management relations law See, in
this connection , address by John H Fanning , Member, National Labor
Relations Board, 1967 Texas Bar Convention (1967 Lab Rel Yearbook
284, 286). and Banta , Labor Obligations of Successor Employers . 36 Geo
Wash L Rev 215 (1967)
'Issued simultaneously is a separate order correcting the stenographic
transcript of this proceeding in several respects
`Several witnesses who appeared in this proceeding were examined
through an interpreter , Ana M Forsyth , who was duly sworn to serve in
that capacity
The complaint issued in this case contains two
seemingly unconnected branches. The first deals with
alleged violations of Section 8(a)(5) of the Act by
Respondent Simcox The second relates to claimed unfair
labor practices within the meaning of Section 8(a)(2) by
Respondent Stateside.'
Briefly, the first branch of this case concerns itself with
events which followed the institution of a foreclosure suit
against Wagner Shipyard in which Respondent Simcox
was appointed trustee. Among these, the complaint
alleges, was the termination of the services of employees
of Wagner Shipyard by Respondent Stmcox; his
discontinuance of Wagner Shipyard's operations; his
leasing of Wagner Shipyard's facilities and equipment to
Respondent Stateside, all without notifying, or consulting
with, SIU. the collective-bargaining representative of
'The details of the leasing of this property and the part played in it by
Respondent Simcox will be developed below
'In pertinent part the sections of the Act alleged to have been violated
provide.
Sec 8 (a) It shall be an unfair labor practice for an employer -
(2) to dominate or interfere with the formation or administration of
any labor organization or contribute financial or other support to
(5) to refuse to bargain collectively with the representatives of his
employees .
STATESIDE SHIPYARD AND MARINA, INC.
Wagner Shipyard's employees, and Respondent Simcox's
subsequent refusal to meet with SIU pursuant to its
request.
Claiming that Respondents are Wagner Shipyard's
successors, the General Counsel argues that Respondent
Simcox was obligated, as such a successor, to discuss with
SIU his discontinuance of the operations of Wagner
Shipyard and the services of its employees, as well as the
leasing of its premises to Respondent Stateside By not
performing this duty and by refusing to meet with SIU in
accordance with its specific request, the General Counsel
maintains that Respondent Simcox violated Section
8(a)(5) of the Act.
The position of Respondents is that they are not
Wagner Shipyard's successors. They further argue that no
bargaining obligation survived Wagner Shipyard's going
out of business, which, they urge, was the end result of the
institution of the foreclosure action.
In broad outline the second branch of this case
concerns itself with the manner in which Respondent
Stateside dealt with its employees and the committee
which they chose to he their collective-bargaining
representative. In this regard. the complaint alleges, and
the General Counsel argues, that Respondent Stateside
violated Section 8(a)(2) of the Act by "instigat[ing] and
urg[ing]" its employees to organize the Committee; by
permitting its supervisors to participate in the
Committee's business: and by negotiating a
collective-bargaining agreement on behalf of its employees
with the Committee, which included supervisors among its
membership and "negotiators." Respondent Stateside and
the Committee' deny the allegations of the complaint
dealing with the claimed violation of Section 8(a)(2) of the
Act by Respondent Stateside. Both contend.1'
affirmatively, that the Committee is a bona fide labor
organization, that Respondent Stateside had no part in its
organization, and, in effect, that the dealings between
Respondent Stateside and the Committee were conducted
at arm's length.
B. Facts and Conclusions Concerning the
Relationship of Wagner Shipyard, Respondent
Simcox, and Respondent Stateside to Each Other
Wagner Shipyard" was incorporated in about 1957 In
1963 it borrowed substantial sums of money from Puerto
Rico Industrial Development Company and Banco
Credito V Ahorro Ponceno (herein respectively called
PRIDCO and Banco) on promissory notes payable in
monthly installments over a period of years These notes
were secured by a mortgage on Wagner Shipyard's
property
Wagner Shipyard having lallen into default in making
payments as required by its notes. PRIDCO and Banco
instituted an action on August 11, 1967, to foreclose the
mortgage which they held. Immediately upon filing suit an
order was issued attaching the property which was the
subject of the proceeding and naming Respondent Stmcox
as receiver of the attached property. Several days later, on
'The Committee filed an answer and participated in the trial
"All parties waived oral argument at the conclusion of the trial The
Committee did not submit a brief and Respondents' brief does not deal
with respondent Stateside ' s alleged violation of See 8 (a)(2) of the Act
Accordingly, the positions of Respondent Stateside and the Committee are
gleaned from their answers , opening statements , and the evidence they
adduced
"The business of Wagner Shipyard , it will be remembered, consisted of
building and repairing ships and in operating a marina
521
August 16,Respondent Simcox was designated to serve as
trustee of Wagner Shipyard ' s business
On the same day, by direction of Respondent Stmcox,
Wagner Shipyard ' s place of business was closed , except
for that portion which was used as a marina , and its
employees , then numbering seven, exclusive of an office
worker, were paid off . None was ever thereafter employed
by Respondent Stmcox. In this connection , the complaint
does not allege that the termination of the services of
Wagner Shipyard ' s employees or Respondent Simcox's
failure to rehire them constituted violations of Section
8(a)(3) of the Act
At the time of its closing much of Wagner Shipyard's
machinery and equipment was in a state of disrepair and
the yard and buildings were in need of refurbishment
Accordingly, for the next 2 or 3 weeks , Respondent
Simcox undertook no ship-repair work . Instead he began,
in this period, to clean the premises and restore its
machinery and equipment . The employees hired by
Respondent Simcox for this purpose were not on the
payroll of Wagner Shipyard when it was closed on August
16.
Early in September 1967 Respondent Simcox, as
Wagner Shipyard 's trustee , leased its premises , machinery,
and equipment to Respondent Stateside . Respondent
Stateside continued the rehabilitation work begun by
Respondent Simcox. Upon its substantial completion in
mid-September the property once again came into use as
a shipyard; this time, however , under the operation of
Respondent Stateside.
Respondent Simcox is the president of Respondent
Stateside , and lie and his wife are its sole stockholders.
Originally, respondent Stateside was engaged in San Juan,
Puerto Rico. in the business of repairing electric motors.
Upon becoming the lessee of the premises formerly
occupied by Wagner Shipyard, Respondent Stateside
transferred the employees who had been working in its
San Juan repair shop to its newly leased location In
addition to these employees Respondent Stateside hired
others as the need arose . Except for one person, however,
Respondent Stateside did not at any time after becoming
lessee employ any of the people who formerly worked for
Wagner Shipyard
On January 31, 1968, in accordance with the judgment
entered in the foreclosure suit against Wagner Shipyard
the mortgaged property was offered for sale. PRIDCO
and Banco , the plaintiffs in the action , being the only
bidders, the property was sold to them. After the sale
respondent Stateside continued to occupy the premises as
a tenant until March 15, 1968, on which date it became
the owner by purchase from PRIDCO and Banco.
As noted, the General Counsel contends that
Respondents are successors to Wagner Shipyard
Respondents take a contrary position
Whether one employer is another's successor turns
upon the continuation of what has come to be known as
'=the General Counsel also makes the argument , on brief, that
respondent Simcox is "an alter ego of Stateside', that Respondent
Stateside purchased Wagner Shipyard 's business with knowledge of
Respondent Simcox's conduct during his tenure as its trustee , and that,
therefore, Respondent Stateside "should be held to respond for the
unlawful conduct of Siincox while he was Trustee of the business " I agree
that Respondent Simcox is Respondent Stateside 's alter ego I also agree
that Respondent Stateside is liable for whatever violations of the Act
Respondent Simcox may have committed However, my agreement with
the General Counsel in these respects avails him nothing in siew of my
conclusion , as will be set forth below in detail, that Respondent Stmcox
did not engage in the unfair labor practices alleged in the complaint
522 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
the "employing industry."" In determining whether the
"employing industry" has continued, the Board relies on
several factors. As aptly summarized by John H Fanning,
a member of the Board, in an address delivered on July 7,
1967, to the State Bar of Texas (Labor Law Section),"
they are-
(1) Whether there has been a substantial continuity of
the same business operations;
(2) Whether the new employer uses the same plant:
(3) Whether he has the same or substantially the same
work force;
(4) Whether the same jobs exist under the same
working conditions;
(5) Whether he employs the same supervisors:
(6) Whether he uses the same machinery, equipment,
and methods of production. and
(7) Whether he manufactures the same product or
offers the same services.
Consideration here can be centered on the third
criterion mentioned by Mr. Fanning In virtually all cases
in which a second employer has been held to be a
successor of the first it has had "the same or substantially
the same work force" as the first." In Johnson Ready
Mix Co . 142 NLRB 437. 441. the Board made plain the
stress it places on the element here under consideration in
determining successorship issues. Supporting its decision
that the respondent there, which purchased the business of
Missouri Valley Ready Mix Concrete Co., Inc , was
Missouri's successor the Board stated.
Moreover, and most significantly, a majority of the
employees in the unit . were formerly Missouri
employees . . . performing the same functions they had
performed for Missouri, and are directly supervised by
former Missouri supervisors
Conversely, when the second employer has not taken
over a substantial number of the first's employees. the
second is not deemed to be the first's successor Federal
Electric Corporation, 167 NLRB No. 63, and NL.R.B. v.
John Stepp's Friendly Ford, Inc., 338 F.2d 833, 836 (C.A.
9). typify this situation.16
The teaching of Federal Electric and Stepp's does not
apply where the failure of the purchaser of an enterprise
to hire the seller's employees has been held to be a
violation of Section 8(a)(3) of the Act." In such a case the
purchaser is considered to be the seller's successor even
though he has not put any of the seller's employees to
work. The rationale underlying this conclusion is that the
"Probably the earliest enunciation of the "employing industry " concept
appears in N L R B v. Cotten , et a! . etc . 105 F 2d 179, 182-183 (C A 6)
"1967 Lab Re( Yearbook 284, 286
"Sec, for example , John Wiley & Sons, Inc v Livingston , etc, 376
U S 543, 545-546, 551, N L R B v Tempest Shirt Manufacturing
Company, Inc. 285 F 2d 1, 4 (C A 5), N L R B v Auto Venishade, Inc.,
276 F 2d 303, 305, 307 (C A 5), N L R B v Lunder Shoe Corp , etc . 211
F 2d 284, 287 (C A 1), N L R B v Blair Quarries . Inc . 152 F 2d 25, 26
(C A. 4), General Electric Compani•. 173 NLRB No. 83. Vallevdate
Packers Inc. etc , 162 NLRB No 139, enfd 402 F 2d 768 (C A 5),
Overrate Transportation Company , 157 NLRB 1185, 1189, enfd 372 F 2d
765 (C A 4). and Chemrock Corporation , 151 NLRB 1074, 1078
"In Stepp's, which the Board cited with approval in Federal Electric. the
court denied enforcement to a bargaining order, covering a unit of
salesmen, which was dependent upon the Board's finding that Stepp's was
the successor to Westward Motors, Inc., whose assets it bought (141
NLRB 1065, 1071) Although a majority of its employees in other
categories formerly worked for Westward , Stepp's hired only three of
Westward 's salesmen , who constituted a minority of Stepp 's sales force
Because of the small number of Westward 's salesmen carried over by
Stepp's the court concluded that as to them there was no successorship
Cf, however, Chemrock Corporation , 151 NLRB 1074, 1078-80
wrongfully discharged employees are entitled to
reinstatement by the purchaser to the jobs they held with
the seller "W"ith such reinstatement ... continuity in the
identity of the work force may be presumed to follow,"
thereby establishing the purchaser's successorship. K. B
& J. Young's Super Markets, Inc. v.N L.R.B., 377 F 2d
463, 465 (C.A. 9), cert. denied 389 U.S. 841.
1 have found that Respondent Simcox did not employ
any people who had worked for Wagner Shipyard; that
Respondent Stateside employed only one;" and that the
paying off of the employees of Wagner Shipyard is not
alleged in the complaint as constituting an unfair labor
practice within the meaning of Section 8(a)(3) of the Act.
Accordingly, I conclude, in the light of the foregoing
principles, that neither Respondent is a successor of
Wagner Shipyard. I will, therefore, recommend that
paragraphs IVB and VIII of the complaint be dismissed.
C. Facts Concerning the Alleged Violations of
Section 8(a)(5) of the Act by Respondent Simcox
Wagner Shipyard's employees were represented by SIU
and covered by a collective-bargaining agreement This
agreement, executed in 1966, was to remain in force for 3
years. Among other things, it provides, in an article
entitled "Management Rights," that the "management of
the yard, including . . . the right to decide . . . the extent
to which the locations covered by this agreement shall
operate or be shutdown . . shall be solely and exclusively
the prerogatives of [Wagner Shipyard]... .11 19
As already noted, on August 16, 1967, upon
Respondent Simcox's instructions Wagner Shipyard's
operations were discontinued. its premises closed for
repairs, and its employees paid off. Early in September
1967 Respondent Simcox leased Wagner Shipyard's
premises. machinery. and equipment to Respondent
Stateside.
Although Respondent Simcox knew that SIU
represented Wagner Shipyard's employees, he did all of
these things without. as the complaint sets forth. "notice
to . . or consultations with" SIU. In addition, as the
complaint further sets forth, Respondent Simcox refused
to comply with a specific request by SIU for a conference
to discuss problems including those "which had arisen out
of his mass discharge of [Wagner Shipyard's] employees."
D. Contentions and Concluding Findings Concerning
the Alleged Violations of Section 8(aX5) of the Act
by Respondent Simcox
Premised upon a claim that Respondent Simcox is a
successor to Wagner Shipyard, the General Counsel
argues that his not having notified, or consulted, SIU as
to paying off Wagner Shipyard's employees, discontinuing
its operations, closing its yard, leasing its premises to
Respondent Stateside, and his failing to meet with SIU
pursuant to its request constituted violations of Section
8(a)(5) of the Act The short answer to this argument is
that, as I have found, Respondent Simcox is not a
"in pertinent part this section provides
See 8 (a ) It shall be an unfair labor practice for an employer---
(3) by discrimination in regard to hire or tenure of employment
to encourage or discourage membership in any labor
-orgameation
"It will be remembered that on August 16, 1967, when its premises were
closed, Wagner Shipyard employed seven people
"Art IV, of the contract between Wagner Shipyard and SIU, received
in evidence as G C Exh 6
STATESIDE SHIPYARD AND MARINA, INC.
successor to Wagner Shipyard This being so, there is no
basis for concluding that Respondent Simcox violated
Section 8(a)(5) in any respect.
Although I have concluded that Respondent Simcox is
not Wagner Shipyard's successor, I will assume for the
purpose of further discussion, insofar as this branch of
this case is concerned, that I had come to a contrary
conclusion. In my opinion. however, this would still be of
no avail to the General Counsel.
"[T]he obligation to bargain of a prior employer
devolves upon his successor "2° As the successor,
arguendo, to Wagner Shipyard Respondent Simcox's duty
to bargain with SIU must, therefore. be measured by
what Wagner Shipyard's similar obligation would have
been had Wagner Shipyard done what Respondent
Simcox did
The first situation to be considered , in this regard, is
the closing of Wagner Shipyard's premises for repairs,
which was necessarily accompanied by the discontinuance
of Wagner Shipyard's regular business and the paying off
of its employees. In view of the "Management Rights"
provision of the agreement between Wagner Shipyard and
SIU,=' Wagner Shipyard could have done all this without
being required to bargain with SIU. Shell Oil Company,
149 NLRB 283. 286-287, 289. Inasmuch as Wagner would
have been under no duty to bargain with SIU concerning
the closing of its premises for repairs with its resultant
concomitants, including what the complaint describes as
the "mass discharge of . . . employees," no bargaining
obligation in this regard "devolve[d] upon [Respondent
Simcox] its [']successor[']."
The remaining situation respecting this phase of the
case dealt with by the complaint is the leasing of Wagner
Shipyard's facilities to Respondent Stateside by
Respondent Simcox without bargaining with SIU.
Whether this constitutes a violation of Section 8(a)(5) of
the Act by . Respondent Simcox again depends upon
whether Wagner Shipyard would have been required to
bargain with SIU had it, rather than Respondent Simcox,
its "successor." been the lessor. The resolution of this
issue, in turn, hinges upon the nature of the transaction.
Was it merely a lease, or was it something more final
insofar as Wagner Shipyard, the "lessor," was concerned?
Wagner Shipyard's only place of business was, as I
have already found, its shipyard and marina located at
Isla Grande. Puerto Rico After the lease of this property
to Respondent Stateside, Wagner Shipyard, insofar as the
record discloses, did not transfer its operations to another
location, nor did it go into any other business. In the
circumstances of this case, therefore, if Wagner Shipyard
had been the lessor of its yard and marina at Isla Grande,
it would have been Wagner Shipyard's ultimate act. In
short, Wagner Shipyard would have put itself completely
out of business.
In N.L R.B v. Darlington Manufacturing Co., et al.,
380 U.S. 263, 273-274, 275, the Supreme Court held "that
when an employer closes his entire business, even if the
liquidation is motivated by vindictiveness toward the
union, such action is not an unfair labor practice." It was
also held , in Darlington , that a discriminatory partial
closing of a business would be violative of the Act.
"Cruse Motors. inc.. 105 NLRB 242, 247
"This provision , it will be remembered , states that the "management of
the yard, including the right to decide . the extent to which the
locations covered by this agreement shall operate or be shutdown . shall
be solely and exclusively the prerogatives of [Wagner Shipyard] . "
523
In New York Mirror. etc , 151 NLRB 834, 838,
decided before the issuance of the Supreme Court's
opinion in Darlington. the Board rejected a "contention
that an employer's decision to terminate an entire
operation . is outside the scope of mandatory
bargaining." To the same effect, see also Apex Linen
Service of Columbus, Inc , 151 NLRB 305, 306, 308; and
-tieiderman, et al, etc.. 140 NLRB 678, 681, both of
which, like New York Mirror, were decided before
Darlington However, my attention has been called to no
case decided by the Board after Darlington in which this
principle was either reaffirmed or specifically set aside
Although the Board has, apparently, issued no decisions
on this issue since Darlington, it has not been silent in this
area. In Ozark Trailers, Incorporated, et al. 161 NLRB
561, 564-565, the Board considered whether Darlington
bore on a situation involving a partial closing of a
business without bargaining. In deciding that Darlington
was not relevant to this issue, the Board stated
In these circumstances we must view the closing of the
Ozark plant only as a partial closing of the
Respondents' enterprise, and not a complete going out
of business by the Respondents. Thus, we arc not here
confronted with the question whether a decision to go
out of business completely is a mandatory subject of
bargaining under Section 8(a)(5) of the Act.
Accordingly, we need not, and do not, determine the
impact on that question of the Supreme Court's holding
in N . L R.B v. Darlington Manufacturing Corp , 380
U S 263 It is sufficient to note that the holding cannot
be relevant to the issue before us which involves
Respondents' duty to bargain about the partial closing
of their business We perceise nothing in that portion of
the Darlington decision dealing with the discriminatory
partial closing of a business which suggests the
inapplicability of the collective-bargaining requirement
of the Act to Respondents' decision to close down the
Ozark plant. Indeed, as the Darlington decision affirms
the propriety of the application of Section 8(a)(3) to a
partial closing of a business, it would be anomalous to
find that Section 8(a)(5) is without governing authority
in such situations. We therefore find that the Darlington
decision does not require dismissal of the complaint.
and that the question of whether the Respondents
violated the Act in unilaterally determining to close
down the Ozark plant must be decided in the light of
considerations set forth in the Supreme Court's decision
in the Fibreboard /Fibreboard Paper Products Corp v.
rV L.R.B , 379 U.S. 203] case. [Footnotes omitted.]
As can be seen from the penultimate sentence of the
foregoing quotation from Ozark the Board concluded that
because the Supreme Court in Darlington held that
Section 8(a)(3) of the Act could with "propriety" be
applied "to a partial closing of a business" it would be an
anomaly, in such a situation, to hold that Section 8(a)(5)
did not also apply. It would seem, therefore, by a parity
of reasoning, that because, as Darlington teaches, Section
8(a)(3) is not applicable to the closing of an entire
business neither is Section 8(a)(5). On this basis it is my
opinion that there is no bargaining requirement attendant
upon the complete termination of an enterprise.
Accordingly, had Wagner Shipyard, mstead of
Respondent Simcox, been the lessor of its premises,
thereby putting itself completely out of business, it would
not have been required to bargain with SIU. This being
so, no bargaining obligation, in this respect, "devolve[d]
upon [Respondent Simcox.] its [']successor[']."
524 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
In sum, I conclude that Respondent Simcox did not
violate Section 8(a)(5) of the Act in the manner alleged in
the complaint. I will, therefore, recommend that
paragraphs V, VI, VII, X, and the relating portions of
paragraph XII of the complaint be dismissed.
suggested by Respondent Stateside's president. was signed
by him and each member of the committee chosen by the
employees It was then ratified by all the employees at a
meeting which Coll attended :s
E. Facts Concerning the Alleged Violations of
Section 8(a)(2) of the Act by Respondent Stateside"
Victor A. Coll, who appeared in this proceeding as
counsel for both Respondents, has been Respondent
Stateside's lawyer for about 5 years He has also
represented other business entities in which Respondent
Simcox had an interest, including Simcox Refrigeration
Company (herein called Refrigeration). The facts relating
to this branch of the case involve Coll's dealings with
Respondent Stateside's employees and a committee which
they formed to serve as their collective-bargaining
representative This committee appears later to have
become known as Employees' Exectuve Committee of
Stateside Service, Inc."
In about mid-January 1968 Coll, at the invitation of an
employee who had first ascertained that he was a lawyer,
attended a meeting of employees of Respondent Stateside,
Some of the employees present asked Coll whether they
could form or join a union. Coll answered that the "same
thing happened" at Refrigeration, whose employees had
joined SIU
Coll then read and explained to the employees the
provisions of the contract between Refrigeration and SIU 24
Upon the completion of the reading the employees
expressed a desire to have a similar contract with
Respondent Stateside and asked Coll to prepare one. Coll
agreed and stated that he would prepare a contract in
draft form and discuss its provisions with the employees at
a subsequent time.
About a week or two later Coll returned to Respondent
Stateside's premises with a tentative collective-bargaining
agreement. In the interim the employees had chosen a
committee to represent them and Coll reviewed his draft
with Its members. A final draft, including changes
suggested by the committee. was then prepared by Coll
which he said he would submit to Respondent Stateside's
president.
Although at all times material to this proceeding Coll
was Respondent Stateside's lawyer, he was also, as he
stated, "acting as an adviser" to Respondent Stateside's
employees in connection with the preparation of the
proposed collective-bargaining agreement and Its
submission to Respondent Stateside. Having done that,
Coll made it clear to the committee representing the
employees, as one of its members testified, that "he could
not help [the employees] any more because he was the
lawyer for the firm."
On February 23, 1968, the draft agreement prepared by
Coll, which by this time contained some amendments
"As I noted in the introductory portion of this Decision, this branch of
the case seems to have no relationship to the one dealing with Respondent
Simcox's alleged violations of Scc 8(a)(5) of the Act
"Employees ' Executive Committee of Stateside Service. Inc . which for
short I have called , and will from time to time continue to call, the
Committee , has already been found to be a labor organization it was
such, as will appear , even before it adopted its name
"Coll, who represented Refrigeration in its collective-bargaining
negotiations with SIU, testified that although he was not "in the habit of
carrying labor contracts around with " him, the contract in question
"happened to be" among a "mess of papers" which had accumulated in
"back ol" his automobile
F Contentions and Concluding Findings Concerning
the Alleged Violations of Section 8(a)(2) of the Act
by Respondent Stateside
Respondent Stateside has denied that it violated Section
8(a)(2) of the Act in connection with its relationship to the
Committee. Its principal contention. in this regard, seems
to be that it dealt with the Committee at arm's length."
Thus, in his opening statement, Coll stated that when
respondent Stateside learned that its employees were
desirous of becoming `'organized" he "explained to them
what their rights were . . and they themselves afterwards
formed a onion, had a meeting and submitted the
contract, and we read it and discussed it and signed it."
The evidence, however, shows that Respondent
Stateside did much more than that. Its lawyer, Coll, met
with its employees, advised them in the formulation of
their bargaining position, prepared their proposed
collective agreement, and, on their behalf, submitted it to
Respondent Stateside.
In this manner Respondent Stateside, through Coll,
was, in essence, sitting on both sides of the bargaining
table. Conduct of this nature falls within the proscription
of Section 8(a)(2) of the Act. Powers Regulator Company.
etc v. N L R B., 355 F.2d 506, 508 (C.A. 7). N L R B v
Stow Manufacturing Co , 217 F.2d 900, 904 (C A 2),
cert. denied 348 U S. 964. Respondent Stateside further
violated Section 8(a)(2) by Coll's attendance at the
meeting at which its employees ratified the
collective-bargaining contract executed by Respondent
Stateside and the committee chosen by its employees
Nitro Super Market, Inc , 161 NLRB 505, 506, 516.
Accordingly, I conclude that by the manner in which it
dealt with the committee representing its employees, by
entering into a collective-bargaining agreement with that
committee, and by its lawyer's attendance at a meeting at
which its employees ratified the agreement, Respondent
Stateside engaged in unfair labor practices within the
meaning of Section 8(a)(2) and (1) of the Act.
"My findings as to this phase of the case are based upon G C Exh 9,
in evidence , and a synthesis of the testimony given by Coll, respondent
Stmcox , and Victor Rmcon, an executive member of the Committee A
different and perhaps more damaging version, insofar as respondent
Stateside is concerned , of the events here under consideration appears in a
memorandum , initialed by Coll, prepared by a Field Examiner on the staff
of the General Counsel on March 5, 1968, in evidence as G C Exh 8 Coll
testified with respect to this document that when the Field Examiner asked
him "in a conversational way about what took place" he "explained the
whole situation in a general way." Coll further testified that although he
signed the memorandum he "didn't read it word by word ", that it was
"not the truth", and that it "is a misstating or misunderstanding of what
[he] told" the employees of respondent Stateside when he first met with
them Nor an experienced lawyer, such as Coll obviously is, to attempt to
explain away in this manner a document which he signed is, indeed , to rely
upon a broken reed Be that as it may, and despite my not being impressed
with Coll's explanation, I have not based any finding upon the contents of
G C Lxh 8
"As I have already noted, the Committee submitted no brief, and the
brief submitted on behalf of Respondent Stateside does not discuss its
alleged violation of Sec 8(a)(2) of the Act.
STATESIDE SHIPYARD AND MARINA, INC. 525
IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES
UPON COMMLRCE
The activities of Respondent Stateside to the extent
found violative of the Act occurring in connection with its
operations set forth in section 1, above, have a close,
intimate, and substantial relationship to trade, traffic, and
commerce among the several States, and tend to lead to
labor disputes burdening and obstructing commerce and
the free flow of commerce.
V. THE REMEDY
Having found that Respondent Stateside engaged in
unfair labor practices within the meaning of Section
8(a)(2) and (1) of the Act, my Recommended Order will
direct it to cease and desist therefrom and to take such
affirmative action as will effectuate the purpose of the
Act. In this connection, as suggested by the General
Counsel in his brief, my Recommended Order, among
other things, will require Respondent Stateside to
withdraw recognition from the Committee and to cease
giving effect to the contract executed by it and the
committee chosen by its employees.
Upon the basis of the foregoing findings of fact and
upon the entire record in this case, I make the following.
CONCLUSIONS OF LAW
1. Respondent Stateside is an employer within the
meaning of Section 2(2) of the Act and is engaged in
commerce within the meaning of Section 2(6) of the Act.
2. Wagner Shipyard was an employer within the
meaning of Section 2(2) of the Act and was engaged in
commerce within the meaning of Section 2(6) of the Act.
3. SIU is a labor organization within the meaning of
Section 2(5) of the Act.
4. The Committee is, and before adopting the name by
which it is now known was, a labor organization within
the meaning of Section 2(5) of the Act.
5. Neither Respondent Simcox nor Respondent Stateside
is a successor of Wagner Shipyard.
6. Respondent Simcox did not engage in unfair labor
practices within the meaning of Section 8(a)(5) and (1) of
the Act.
7. By the conduct set forth in sections III. E and III, F
of this Decision, Respondent Stateside has engaged in and
is engaging in unfair labor practices within the meaning of
Section 8(a)(2) and (1) of the Act.
8. The unfair labor practices engaged in by Respondent
Stateside, as set forth in Conclusion of Law 7, above,
affect commerce within the meaning of Section 2(6) and
(7) of the Act_
Upon the foregoing findings of fact, conclusions of law,
and upon the entire record in this case, I hereby issue the
following:
RECOMMENDED ORDER
Stateside Service, Inc., d/b/a Stateside Shipyard and
Marina, Inc.. its officers, agents, successors, and assigns.
shall:
1 Cease and desist from:
(a) Recognizing Employees' Executive Committee of
Stateside Service, Inc., as the collective-bargaining
representative of any of its employees for the purpose of
dealing with that labor organization concerning
grievances, labor disputes, wages, rates of pay, hours of
employment, or any other term or condition of
employment, unless and until Employees' Executive
Committee of Stateside Service, Inc., shall have been duly
certified by the National Labor Relations Board as the
exclusive collective-bargaining representative of its
employees in an appropriate unit.
(b) Maintaining or giving any force or effect to its
agreement executed on February 23, 1968, with the
committee representing its employees, now known as
Employees' Executive Committee of Stateside Service, Inc.,
or to any modification, extension, supplement, or renewal
thereof, or to any superseding agreement, or to any other
contract, agreement, or understanding entered into with
Employees' Executive Committee of Stateside Service,
Inc., unless and until Employees' Executive Committee of
Stateside Service, Inc., shall have been duly certified by
the National Labor Relations Board; provided, however,
that nothing herein shall be construed to require
Respondent Stateside Service, Inc., to vary or abandon
any wage, hour, seniority, or other substantive feature of
its relations with its employees which respondent Stateside
Service, Inc., has established in the performance of the
above-mentioned agreement to the prejudice of any rights
or privileges acquired under that agreement by any of its
employees.
(c) In any like or related manner interfering with,
restraining, or coercing employees in the exercise of their
right to self-organization, to form, join, or assist labor
organizations, to bargain collectively through
representatives of' their own choosing, or to engage in
other concerted activities for the purpose of
collective-bargaining or other mutual aid or protection as
guaranteed in Section 7 of the National Labor Relations
Act, as amended, or to refrain from any or all such
activities, except to the extent that such right may be
affected by any agreement requiring membership in a
labor organization as a condition of employment in
conformity with Section 8(a)(3) of said Act.
2. Take the following affirmative action, which it is
found will effectuate the policies of the National Labor
Relations Act, as amended:
(a) Withdraw and withhold all recognition from
Employees' Executive Committee of Stateside Service,
Inc., as the collective-bargaining representative of any of
its employees for the purpose of dealing with that labor
organization concerning grievances, labor disputes, wages,
rates of pay, hours of employment, or any other term or
condition of employment, unless and until Employees'
Executive Committee of Stateside Service, Inc., shall have
been duly certified by the National Labor Relations
Board.
(b) Post at its premises copies of the attached notice
marked "Appendix."27 Copies of said notice, and copies of
Spanish translations thereof, on forms provided by the
Regional Director for Region 24, after being duly signed
by an authorized representative of Respondent Stateside
Service, Inc., shall be posted by said respondent
immediately upon receipt thereof, and be maintained by it
for 60 consecutive days thereafter, in conspicuous places.
including all places where notices to employees are
customarily posted. Reasonable steps shall be taken by
respondent Stateside Service, Inc., to insure that said
notices are not altered, defaced, or covered by any other
material.
"In the event that this Recommended Order is adopted by the Board,
the words "a Decision and Order" shall be substituted for the words
"the Recommended Order of a Trial Examiner" in the notice In the
further event that the Board ' s Order is enforced by a decree of a United
States Court of Appeals , the words "a Decree of the United States Court
of Appeals Enforcing an Order" shall be substituted for the words "a
Decision and Order "
526 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
(c) Notify said Regional Director, in writing, within 20
days from the receipt of this Decision , what steps
Respondent Stateside Service, Inc., has taken to comply
herew ith. 28
IT IS FUWIHPR ORDERED that paragraphs IVB, V, V1,VlI,
VIII, X, and the relating portions of paragraph X11, as
well as such other paragraphs of the complaint which
allege unfair labor practices not specifically found herein
be, and the same hereby are, dismissed.
"In the event that this Recommended Order is adopted by the Board.
this provision shall be modified to read. "Notify said Regional Director, in
writing, within 10 days from the date of this Order, what steps Respondent
Stateside Service, Inc has taken to comply herewith "
APPENDIX
NOTICE TO ALL EMPLOYEES
Pursuant to the Recommended Order of a Trial
Examiner of the National Labor Relations Board and in
order to effectuate the policies of the National Labor
Relations Act, as amended, we hereby notify our
employees that.
After a trial in which all parties had an opportunity to
present their evidence, it has been found that we violated
the law by committing unfair labor practices in connection
with the way in which we dealt with Employees' Executive
Committee of Stateside Service, Inc. Accordingly, we post
this notice and we will keep the promises that we make in
this notice.
WE WILL Nor recognize, or have anything to do with,
Employees' Executive Committee of Stateside Service,
Inc., as your union unless and until a majority of you,
in a fair secret election held by the National Labor
Relations Board, choose that Committee to be your
union for the purpose of dealing with us on your behalf
as to wages, hours, working condition,,, and other
matters affecting your lob
WE WIt L stop giving effect to the contract that we
and the Committee signed on February 23,1968. WE
WIT. L NOT again comply with this contract unless and
until a majority of you in a fair secret election held
by the National Labor Relations Board choose
Employees' Executive Committee of Stateside Service,
Inc., to be your union. However, WE ARE NOT required
to change any wages, hours, or working conditions
which we have established as a result of our contract
with that Committee, if such a change will be to your
disadvantage or hurt you in any way.
WE WILL No7 do anything like we did in connection
with our dealings with Employees' Executive
Committee of Stateside Service, Inc., which will
interfere with, restrain, or coerce you in the exercise of
any rights guaranteed to you by the National Labor
Relations Act. In this regard, WF WII.L respect your
rights to self-organization , to form , join , or assist
any union , to bargain collectively through any union
or representative of your choice as to wages, hours
of work, and any other term or condition of employment.
You also have the right, which WE \Vii L also respect,
to refrain from doing so.
STATESIDF SERVICE, INC.,
D/B/A STATESIDE SHIPYARD
AND MARINA, INC.
(Employer)
Dated By
(Representative) (Title)
This notice must remain posted for 60 consecutive days
from the date of posting and must not be altered, defaced,
or covered by any other material.
If employees have any question concerning this notice
or compliance with its provisions, they may communicate
directly with the Boards Regional Office, 7th Floor, Pan
Am Building, 255 Ponce de Leon Avenue, Hato Rey,
Puerto Rico 00919, Telephone 809-765-0404, Extension
225.