Storer Cable Tv Of Texas, Inc., The Meca Corp., And Houston Community Cablevision, Inc.

National Labor Relations Board - Board Decisions

Jun 15, 1989

295 N.L.R.B. 295 (N.L.R.B. 1989)

STORER CABLE TV OF TEXAS 295
Storer Cable TV of Texas, Inc., The Meca Corpora-
tion, and Houston Community Cablevision, Inc.
and Communications Workers of America,
AFL-CIO. Case 23-CA-10391
June 15, 1989
DECISION AND ORDER
BY CHAIRMAN STEPHENS AND MEMBERS
JOHANSEN AND CRACRAFT
On May 14, 1987, Administrative Law Judge
Steven M. Charno issued the attached decision.
The Respondent filed exceptions and a supporting
brief, the Union filed a response to the Respond-
ent's exceptions, and the General Counsel and the
Union filed briefs in support of the judge's deci-
sion . Thereafter, the Union filed a motion to sever
and the Respondent filed a brief in opposition to
that motion.'
The National Labor Relations Board has delegat-
ed its authority in this proceeding to ab three-
member panel.
The Board has considered the decision and the
record in light of the exceptions and the briefs and
has decided to affirm the judge 's rulings, findings, 2
and conclusions as modified , and to adopt the rec-
ommended Order as modified and set out in full
below.
The Respondent is a single employer that pro-
vides cable television service to residential sub-
scribers in the Houston, Texas metropolitan area.
The Communications Workers of America (the
Union) is the collective-bargaining representative
of a Houston-area unit including "installers."
The installers install , reconnect , and disconnect
cable service in residential dwellings among other
duties. In mid- 1984, the Respondent relied on out-
side contractors to perform 85 to 90 percent of its
installation and reconnection work . As a result of a
decision to have all installation and reconnection
work performed by its own employees in the Bay
Area region of its Houston operations , the Re-
spondent increased the number of installers em-
ployed in the Bay area region from 6 to 14 at the
i On December 30, 1988, the Board granted the motion to sever Case
23-CA-10357 from the present case in a decision reported at 292 NLRB
140. The Board also adopted the judge 's rulings , findings, and conclu-
sions with respect to Case 23 -CA-10357, and ordered the Respondent to
cease and desist from refusing to bargain with the Union and to bargain,
on request , with the Union.
a The Respondent has excepted to some of the judge's credibility find-
ings. 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.
outset of 1985.3 The Bay area region installers per-
formed 10 to 50 percent of the installation and re-
connection work in that area throughout 1985 and
the first quarter of 1986. By the first quarter of
1986, only 8 of the 14 Bay area installers were per-
forming installation and reconnection work.
The Respondent asserts that , due to depressed
sales, it decided to initiate a new marketing pro-
gram in the Bay area that would commence in
April 1986 . As the marketing program was expect-
ed to increase the amount of installation work sig-
nificantly , the Respondent's regional vice president,
Langendorf, asked for the preparation of a study
showing the ability of the Bay area installers to
handle the additional work. Comparing the cost of
employing additional installers to perform the work
against the cost of using outside contractors, the
study showed that it would be significantly cheaper
for the Respondent to use outside contractors to
perform the installation and reconnection work.
After receiving this study, Langendorf determined
that the Respondent should use contractors to
handle not only the additional work expected to be
generated by the marketing campaign , but also the
installation and reconnection work being per-
formed by the installers . Accordingly, on April 17,
1986, the Respondent discharged five employees
who were then performing installation work and
reassigned the remaining employees performing
that work to other positions. The Respondent did
not provide the Union with notice of its decision
and the resultant discharges, nor did it afford the
Union the opportunity to bargain over these ac-
tions.
The judge found that the Respondent's unilateral
decision to subcontract the in -house installation
work and to discharge the five employees violated
Section 8(a)(5) and (1) of the Act. In reaching his
conclusion , the judge found that the Respondent's
decision was not made for any legitimate business
reason that would justify its refusal to give notice
and bargain under the rationale of Otis Elevator
Co., 269 NLRB 891 (1984). He found that the
study relied on by the Respondent in reaching its
decision was conceptually and methodologically
flawed, that the decision was not made for the rea-
sons stated by the Respondent 's witnesses , and that
the Respondent 's asserted rationale underlying the
decision was pretextual. The judge also found that
the Respondent violated Section 8(a)(5) and (1) by
failing to bargain over the effects of its decision.4
a These installers were included in the unit that the Union was later
certified to represent on March 18, 1986.
4 The Respondent has not excepted to this finding and, accordingly,
we adopt the judge 's finding of a violation.
295 NLRB No. 34
296 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
Although we affirm the judge's finding that the
Respondent violated the Act by failing to give
notice or the opportunity to bargain over its deci-
sion , and the resultant discharges , we do so on the
basis of the analysis below and find it unnecessary
to rely on the judge's rationale.
Initially , we are willing to assume arguendo that
the decision to subcontract the in-house installation
work and to discharge the five employees was mo-
tivated by lawful business considerations. We now
turn to the issue of whether, as alleged by the Gen-
eral Counsel in the complaint, the Respondent's
failure to provide the Union with notice of and the
opportunity to bargain over this decision violated
Section 8(a)(5) and (1).5
In determining whether the Respondent was ob-
ligated to bargain over its decision to subcontract
the in-house installation work, which resulted in
the discharge of five employees, we apply the
"two-factor" and "two-step" tests set forth in Otis
Elevator Co., 269 NLRB 891 (1984). Under the
two-factor test set forth in the plurality opinion of
Chairman Dotson and Member Hunter-whether
the decision turned on a change in the nature or di-
rection of the business or whether it turned on
labor costs-we find that the decision turned on
labor costs. Although the Respondent contends
that it altered the scope and direction of the enter-
prise by characterizing its decision as a discontinu-
ance of in-house installation work, the evidence
does not support its contention . The decision to use
subcontractors did not alter the nature of the Re-
spondent 's business . That is, the Respondent con-
tinued to provide the same installation and recon-
nection services for its Bay area customers that it
provided before its decision to subcontract the
S We reject the Respondent 's contention that the 8(a)(5) allegations of
the complaint must be dismissed because they failed to allege specifically
that the Respondent's decision was a mandatory subject of bargaining.
The complaint alleged that by subcontracting its in-house installation
work and discharging five employees without notice to or bargaining
with the Union , the Respondent violated Sec . 8(a)(5) and ( 1) As an em-
ployer violates Sec. 8 (a)(5) by failing to bargain over only a mandatory
subject of bargaining , we find that the complaint was sufficient to place
the Respondent on notice of the alleged violation In any event, our
review of the record concerning the Respondent 's decision to subcon-
tract the work and to discharge the employees indicates that the issue of
whether the decision was a mandatory subject of bargaining was fully
litigated . Furthermore, whether the General Counsel has met his burden
of proving that the Respondent's decision was a mandatory subject of
bargaining is the issue that we must decide in determining whether the
Respondent violated the Act. Consequently, we do not agree with the
Respondent 's argument that the judge shifted the burden of proof on this
issue from the General Counsel to the Respondent.
We also find that the Respondent 's reliance on R. L. Broker & Ca, 274
NLRB 709 (1985), is misplaced . The Board in R. L. Broker found that
the complaint did not provide sufficient information to enable the Board
to grant the General Counsel 's Motion for Summary Judgment By con-
trast , we find that the complaint allegations and the evidence adduced at
the hearing in this case provide sufficient information to determine
whether the Respondent 's actions violated the Act.
work.6 It did not, for example, close down its Bay
area operation or phase out its installation and re-
connection work. Cf. First National Maintenance
Corp. v. NLRB, 452 U.S. 666 (1981). Rather, it re-
placed the five employees performing installation
and reconnection work with independent contrac-
tors. Further, the Respondent decided to use sub-
contractors instead of the existing employees pur-
portedly because the study showed that the cost of
using subcontractors was less than that of retaining
the existing employees to perform the work. As the
costs associated with retaining the employees in-
volved primarily the payment of their salaries and
benefits, we find that the decision to use subcon-
tractors turned primarily on labor costs.7
We reach the same conclusion under the two-
step test in Member Dennis's concurring opinion-
(1) whether the decision was amenable to resolu-
tion through the bargaining process and, (2) if so,
whether the benefit for labor-management relations
and the collective -bargaining process outweighed
the burden placed on management . 8 The Respond-
ent's decision to subcontract the installation and re-
connection work was clearly amenable to resolu-
tion through the bargaining process. In Collateral
Control Corp., 288 NLRB 308 (1988), the Board
noted that the Supreme Court found in Fibreboard
Corp. v. NLRB, 379 U.S. 203, 211 (1964), that the
decision to subcontract unit work was amenable to
resolution through bargaining, and reaffirmed that
finding in First National Maintenance Corp., supra
at 680 . Indeed , as the decision to subcontract exist-
ing unit work here turned on the desire to reduce
labor costs, the Union had control over this labor-
related factor and could have offered alternatives
such as wage reductions9 or expanding the scope
of the employees' duties. See Lapeer Foundry &
Machine, 289 NLRB 952 (1988); NLRB v. Westing-
house Broadcasting (WBZ-TV), 849 F.2d 15, 23 (1st
Cir. 1988).
8 Even after the Respondent decided to use subcontractors exclusively,
performance of the installation and reconnection work remained under
the ultimate control of the Respondent . As Langendorf indicated in his
testimony, the Respondent 's employees conducted field audits to ensure
that the work performed by the subcontractors was proper.
r Although the Respondent indicated that replacement of the existing
employees would also save vehicle operational costs, those costs are neg-
ligible compared to the labor costs and the thousands of dollars that the
Respondent purportedly would have saved by using subcontractors.
8 The "amenability" test set forth in Member Zimmerman 's concurring
opinion in Otis Elevator, supra, encompassed only the first step of the
two-step test.
B We are not persuaded by the Respondent 's argument that the Union
"could not have agreed to sufficient concessions to have made continuing
the in-house installation operation profitable ." By failing to give notice to
the Union of its decision to subcontract , the Respondent denied the
Union any opportunity to offer concessions or alternatives to the action
chosen by the Respondent.
STORER CABLE TV OF TEXAS 297
Having found the Respondent's decision to be
amenable to resolution through bargaining , we also
conclude that the benefit for the bargaining process
outweighs the burden placed on the Respondent.
The Respondent's decision to subcontract unit
work did not involve extensive commitment of
capital. We are not persuaded by the argument that
the decision permitted the Respondent to allocate
its capital assets more efficiently. Although the de-
cision permitted the Respondent to reposition the
employees ' equipment and vehicles into other sec-
tions of its operations , that ability to reallocate re-
sources always exists when unit work is subcon-
tracted or eliminated. Indeed, the employer in Fi-
breboard was required to bargain over its decision
to subcontract the maintenance work even though
it could have reallocated its maintenance workers'
tools and equipment after hiring the subcontractor.
Furthermore , the fact that the Respondent was not
required to purchase additional vehicles and tool-
boxes for new employees is not evidence of capital
savings, because the employees discharged as a
result of the subcontracting decision already had
vehicles and toolboxes.
As noted above, we find that that the decision to
subcontract the unit work did not involve any
change in the nature of the Respondent 's oper-
ations . We also reject the Respondent 's contention
that the decision to subcontract was precipitated by
a need for speed and flexibility. Although the Re-
spondent has argued that it was necessary to hire
subcontractors quickly in order to coincide with
the anticipated increase in installation work arising
from the marketing campaign , that reason does not
explain why it was necessary to replace the exist-
ing employees. An increase in the workload does
not logically require a decrease in the number of
employees to perform the work. The argument that
using subcontractors gave the Respondent more
flexibility to handle the "peaks and valleys" of in-
stallation activity fails for the same reason . "Peak"
activity may explain the decision to hire subcon-
tractors to perform the additional work, but does
not explain the decision to replace the existing em-
ployees. Further, although decreases in activity
could explain the need to eliminate installer posi-
tions, the record establishes that the Respondent
never employed fewer than five installers to handle
the installation and reconnection work in the Bay
area.10 Although the Respondent may have subse-
quently decided that it was cheaper to use subcon-
tractors to perform the existing unit work because
10 Even when outside contractors performed 85 to 90 percent of the
installation and reconnection work in mid- 1984, the Respondent em-
ployed five or six installers in the Bay area . The Respondent subsequent-
ly increased that number to 14 in 1985
of the lower labor costs, that factor is unrelated to
the amount of installation activity. Finally, the
record does not establish , nor has the Respondent
argued, that a need for confidentiality precipitated
the decision to subcontract the existing unit work.
Consequently, we conclude that by requiring bar-
gaining over the decision to subcontract, the bene-
fit for the collective-bargaining process outweighs
the minimal burden on the Respondent 's business.
Under any of the analyses set forth in Otis Eleva-
tor Co., supra, we therefore find that the Respond-
ent had a duty to provide notice to and bargain on
request with the Union concerning the decision to
subcontract the installation and reconnection work
and to discharge the five employees. Our conclu-
sion is consistent with that reached in Fibreboard,
supra; Westinghouse Broadcasting, 285 NLRB 205
(1987), enfd. 849 F.2d 15 (1st Cir. 1988); and Col-
lateral Control Corp., supra. In each of those cases,
the employer, like the Respondent here, replaced
unit employees with subcontractors to perform the
same work . By contrast , this case does not involve
the subcontracting of work that had been previous-
ly performed in a facility or department that an
employer closed as part of a restructuring of its op-
erations . Thus, the Respondent 's reliance on cases
such as Kroger Co., 273 NLRB 462 (1984), UOP
Inc., 272 NLRB 999 (1984), and Fraser Shipyards,
272 NLRB 496 (1984), is misplaced. Further, Ausa-
ble Communications, 273 NLRB 1410 (1985), which
the Respondent has also cited in support of its ar-
gument , is distinguishable from the instant case. In
that case , the employer experienced a large influx
of installation work resulting from the addition of
eight new channels to the services offered to its
cable customers. The Board determined that the
employer 's decision to use subcontractors , instead
of hiring more unit employees, to handle the addi-
tional work was not subject to bargaining. Here,
the General Counsel has alleged, and we agree,
that the decision to subcontract the existing work
and to discharge the existing employees was subject
to bargaining.
In light of the above analysis, we find that the
Respondent 's decision to subcontract the installa-
tion and reconnection work and to discharge the
five employees was a mandatory subject of bar-
gaining . As the Respondent failed to provide the
Union with notice of and the opportunity to bar-
gain over this decision, we affirm the judge's find-
ing that the Respondent violated Section 8(a)(5)
and (1 ) and shall order an appropriate remedy
below.
298 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
AMENDED REMEDY
As the Respondent has violated the Act by fail-
ing to bargain over the decision to subcontract unit
work and to discharge five employees, as well as
the effects of that decision, we shall order bargain-
ing and full backpay relief in order to restore the
status quo ante . See Lapeer Foundry & Machine,
supra . 11 We note that there is no showing that
such a remedy would be unduly burdensome. Fi-
breboard, supra, 379 U.S. at 215-216. Accordingly,
we shall order the Respondent to bargain with the
Union concerning the decision to subcontract the
installation and reconnection work and to dis-
charge the five employees who were performing
that work, and the effects of that decision . Further,
the Respondent * shall offer reinstatement to em-
ployees Boudreaux , Butler, Rios, Rose , and Spears
and pay them backpay to compensate for any loss
of earnings and other benefits they may have suf-
fered as a result of their unlawful discharges. Back-
pay shall run from April 17, 1986, the date of the
employees ' discharges , until the date the employees
are offered reinstatement to their former jobs or, if
those jobs no longer exist , to substantially equiva-
lent positions . Backpay shall be based on the earn-
ings that the employees normally would have re-
ceived during the applicable period , less any net in-
terim earnings , and shall be computed in the
manner prescribed in F. W. Woolworth Co., 90
NLRB 289 (1950), with interest to be computed in
the manner prescribed in New Horizons for the Re-
tarded, 283 NLRB 1173 (1987). We shall modify
the judge 's recommended Order to reflect these
changes.12
ORDER
The National Labor Relations Board orders that
the Respondent , Storer Cable TV of Texas, Inc.,
the Meca Corporation , and Houston Community
Cablevision, Inc., Houston, Texas, its officers,
agents, successors , and assigns, shall
1. Cease and desist from
(a) Refusing to bargain in good faith with the
Communications Workers of America, AFL-CIO
(the Union), as the exclusive collective -bargaining
representative of the following unit:
All dispatchers , technicians , warehousemen,
installers , linemen and groundmen , converter
11 The judge relied on Gulf States Mfrs., 261 NLRB 852, 853 (1982), in
formulating a remedy to make the discharged employees whole. In
Lapeer, the Board discussed the remedy it would impose for decision-bar-
gaining violations that result in the loss of employment. Accordingly, we
rely on Lapeer in formulating a remedy to restore the status quo here
12 The Respondent has excepted to the judge's inclusion in his remedi-
al order of a visitatonal clause Under the circumstances of this case, we
find it unnecessary and shall delete the clause. See Cherokee Marine Ter-
minal, 287 NLRB 1080 (1988)
repair technician , and field service coordina-
tors employed at the Respondent 's six facilities
located in the Houston , Texas metropolitan
area (Bisbee Street , Airport Boulevard, Law-
rence Road , FM 1765, Munson Road and
Mayard Road), but excluding all other em-
ployees, customer service representatives, cus-
tomer sales representatives , local originations
operator , receptionist , draftsperson (drafter),
office clericals, guards, watchmen and supervi-
sors as defined in the Act.
(b) Refusing to bargain in good faith with the
Union about the terms and conditions of employ-
ment of the employees in the above-described unit.
(c) Unilaterally subcontracting installation and
reconnection work performed by unit employees,
and discharging five employees , without providing
the Union with notice and the opportunity to bar-
gain about the decision to subcontract the unit
work and to discharge the five employees , and the
effects of that decision.
(d) 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 neces-
sary to effectuate the policies of the Act.
(a) Offer David M. Boudreaux Jr., M. J . Butler
Jr., Tomas Rios, John T. Rose, and Stephen H.
Spears immediate and full reinstatement to their
former positions of employment or, if those jobs no
longer exist , to substantially equivalent positions,
without prejudice to their seniority or other rights
and privileges previously enjoyed.
(b) On request , bargain in good faith with the
Union concerning the terms and conditions of em-
ployment of the employees in the above-described
unit and the decision to subcontract installation and
reconnection work performed by the unit employ-
ees and to discharge five employees , and the effects
of that decision.
(c) Make whole David M . Boudreaux Jr., M. J.
Butler Jr., Tomas Rios, John T. Rose, and Stephen
H. Spears for any loss of earnings and other bene-
fits they may have suffered as a result of their un-
lawful discharges in the manner set forth in the
remedy section of this decision.
(d) 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.
STORER CABLE TV OF TEXAS
(e) Post at each of its facilities in Houston,
Texas, copies of the attached notice marked "Ap-
pendix." 13 Copies of the notice, on forms provided
by the Regional Director for Region 23, after
being signed by the Respondent's authorized repre-
sentative, shall be posted by the Respondent imme-
diately upon receipt and maintained for 60 consec-
utive days in conspicuous places including all
places where notices to employees are customarily
posted. Reasonable steps shall be taken by the Re-
spondent to ensure that the notices are not altered,
defaced, or covered by any other material.
(f) Notify the Regional Director in writing
within 20 days from the date of this Order what
steps the Respondent has taken to comply.
" 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 Nation-
al Labor Relations Board" shall read "Posted Pursuant to a Judgment of
the United States Court of Appeals Enforcing an Order of the National
Labor Relations Board."
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 refuse to bargain in good faith
with the Communications Workers of America,
AFL-CIO, as the exclusive collective -bargaining
representative of the employees in the unit de-
scribed below:
All dispatchers, technicians , warehousemen,
installers , linemen and groundmen , converter
repair technician , and field service coordina-
tors employed at the Respondent 's six facilities
located in the Houston , Texas metropolitan
area (Bisbee Street, Airport Boulevard, Law-
rence Road , FM 1765 , Munson Road and
Mayard Road), but excluding all other em-
ployees, customer service representatives, cus-
tomer sales representatives , local originations
operator , receptionist, draftsperson (drafter),
office clericals, guards, watchmen and supervi-
sors as defined in the Act.
WE WILL NOT refuse to bargain in good faith
with the Union concerning your terms and condi-
tions of employment.
WE WILL NOT unilaterally subcontract installa-
tion and reconnection work performed by unit em-
ployees and discharge employees without provid-
299
ing the Union with notice and the opportunity to
bargain about the decision to subcontract unit work
and to discharge employees, and the effects of that
decision.
WE WILL NOT in any like or related manner
interfere with, restrain, or coerce you in the free
exercise of your rights under Section 7 of the Na-
tional Labor Relations Act.
WE WILL, on request, bargain in good faith with
the Union concerning the terms and conditions of
your employment, the decision to subcontract in-
stallation and reconnection work performed by unit
employees and to discharge five employees on
April 17, 1986, and the effects of the decision to
subcontract unit work and to discharge those em-
ployees.
WE WILL offer David M. Boudreaux Jr., M. J.
Butler Jr., Tomas Rios, John T. Rose, and Stephen
H. Spears immediate and full reinstatement to their
former jobs or, if those jobs no longer exist, to sub-
stantially equivalent positions, without prejudice to
their seniority or other rights and privileges previ-
ously enjoyed, and we will make those employees
whole, with interest, for any loss of earnings and
other benefits they may have suffered as a result of
their unlawful discharges.
STORER CABLE TV OF TEXAS, INC.,
THE MECA CORPORATION, AND
HOUSTON COMMUNITY CABLEVISION,
INC.
Robert G. Levy, II, Esq., for the General Counsel.
Nancy Noall, Esq. and Michael T McMenamin, Esq.
(Walter, Haverfoeld, Buescher & Chockley), of Cleve-
land, Ohio, for the Respondent.
Sharon Groth, Esq. (Fickman, Van Os, Waterman, Dean &
Moore), of Austin, Texas, for the Charging Party.
DECISION
STEVEN M. CHARNO , Administrative Law Judge. In
response to a charge timely filed by the Communications
Workers of America, AFL-CIO (Union), a complaint
was issued on 15 May 1986 , alleging that Storer Cable
TV of Texas, Inc., the Meca Corporation and Houston
Community Cablevision , Inc. (Respondent) violated Sec-
tion 8(a)(1) and (5) of the National Labor Relations Act,
by refusing to bargain with the Union concerning the
unilateral decision to lay off five unit employees , the ef-
fects of that decision and the term and conditions of em-
ployment of bargaining unit employees . Respondent's
answer denied the commission of any unfair labor prac-
tice and asserted that the Board 's certification of the
Union in a prior representation proceeding was invalid
due to an allegedly inappropriate definition of the rele-
vant bargaining unit.
300 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
A hearing was held before me in Houston, Texas, on
18 November 1986.1
At the hearing, it was stipulated that the unit employ-
ees named in the complaint were terminated, rather than
laid off, and the complaint and answer were accordingly
amended. Briefs were filed by the General Counsel,
Union, and Respondent under extended due date of 5
January 1987.2
FINDINGS OF FACT
1. JURISDICTION
Respondent is a single employer engaged in providing
cable television service to residential subscribers in the
metropolitan area of Houston, Texas. During the 12
months preceding issuance of the complaint, Respondent,
in the conduct of its business in Texas, purchased and re-
ceived goods valued in excess of $50,000 from points
outside the State and derived gross revenues in excess of
$100,000. It is admitted, and I find, that Respondent is an
employer engaged in commerce within the meaning of
the Act.
The Union is stipulated to be, and I find is, a labor or-
ganization within the meaning of the Act.
II. ALLEGED UNFAIR LABOR PRACTICES
A. Certification and the Request to Bargain
On 18 November 1985, the Union filed a representa-
tion petition, which initiated Case 23-RC-5286. A hear-
ing on the petition was held on 11 and 12 December. On
30 December, the Regional Director issued a "Decision
and Direction of Election" which found the following
unit to be appropriate:
All dispatchers, technicians, warehousemen, install-
ers, linemen and groundmen, converter repair tech-
nician , and field service coordinators employed at
the Employer's six facilities located in the Houston,
Texas metropolitan area (Bisbee Street, Airport
Boulevard, Lawrence Road, FM 1765, Munson
Road, and Mayard Road), but excluding all other
employees, customer service representatives, cus-
tomer sales representatives, local originations opera-
tor, receptionist, draftsperson (drafter), office cleri-
cals, guards, watchmen and supervisors as defined
in the Act.
In an election held on 30 January 1986, a majority of Re-
spondent's employees in the designated unit voted to be
represented by the Union. The following day, the Board
rejected Respondent's request to review the Regional Di-
rector's election. By "Supplemental Decision" of 18
March, the Regional Director overruled Respondent's
objections and certified the Union as the collective-bar-
gaining representative of Respondent's employees in the
designated unit.
On 31 March 1986, the Union wrote Respondent re-
questing bargaining. By letter of 7 April, Respondent de-
clined to bargain , asserting invalidity of the Board's cer-
tification based on an allegedly inappropriate bargaining
unit and on the Board's failure either to set aside the
election or to hold a hearing on Respondent's objections.
The letter stated: "Accordingly, we have no choice but
to decline to bargain with you until the NLRB in Wash-
ington and/or the US Court of Appeals has ruled on the
validity of objections."
On 16 June 1986, the Board denied Respondent's re-
quest for review of the Regional Director's "Supplemen-
tal Decision."
B. The Discharges
At all times relevant hereto, Respondent's operations
in the Houston region were divided into three separately
managed and budgeted operating areas : Northwest
Harris, South Houston, and the Bay Area. Among the
functions performed by Respondent's installers in the
Houston region were the installation and reconnection of
cable service to residential dwelling units . In mid-1984,
85 to 90 percent of the installation work in each of the
three operating areas was done by outside contractors
and the remainder, by Respondent's service personnel,
including installers . At that time, Northwest Harris had
no employees with the title installer, while South Hous-
ton and the Bay Area each had five to six.
Beginning in 1985, Respondent increased the number
of employees called installers in the Bay Area from 6 to
14, with the stated intention of performing all installation
and reconnection work in-house. This intention was
clearly abandoned no later than the beginning of 1986,
since only 8 of the 14 installers in the Bay area at that
time were performing duties relating to the installation
or reconnection of service to residential dwelling units.3
Throughout 1985 and the first 3 months of 1986, install-
ers in the Bay Area handled between 10- and 50-percent
of the installation and reconnection work in that areas;
the remainder was done by an outside contractor.
In January 1986, Respondent's regional vice president,
William Langendorf, decided to initiate a new marketing
program in the Bay Area in April of that year, the inter-
vening 3 months being required to hire and train sales
personnel. Purportedly concerned over the increased
volume of installation work the new marketing effort
would generate,' Langendorf immediately asked Re-
spondent 's vice president for engineering, Ricky Luke, to
prepare a study as soon as possible concerning the ability
of the Bay Area's installers to handle the new work.
Langendorf never checked on the status of Luke's work,
I Respondent 's unopposed motion to correct the transcript is noted and
granted in part.
2 General Counsel 's motion that the parties ' posthearing briefs be made
part of the record will be granted . Accordingly, "Memorandum of Gen-
eral Counsel to the Administrative Law Judge" is identified as G C Exh.
5; "Petitioner's Post -Hearing Brief," as C P. Exh. 1; and "Respondent's
Brief to the Administrative Law Judge," as R. Exh 5.
8 Respondent's vice president of engineering so testified concerning the
period from January through March 1986.
4 Langendorf testified that the Bay Area had 200 to 400 installations
per month before the sales effort and that the campaign was expected to
raise this figure to between 800 and 1200 installations per month. Lake
testified that the Bay Area's average of 110 installations per month in-
creased to 1200 as a result of the marketing campaign.
STORER CABLE TV OF TEXAS 301
and Luke ultimately reported back around the beginning
of April.5
A summary of Luke's study was placed in evidence,
but no underlying documentation was made available. In
preparing the study, Luke first selected the month of
February 1986 as a test period and determined "the in-
stallation and restart activity that was done by our in-
house personnel" during that month , which amounted to
354 jobs. Although eight Bay Area installers did some in-
stallation or reconnection work during February, Luke
confined his study to five specific individuals . His choice
was admittedly based solely on the criterion that these
five employees would be terminated if the installer job
title was eliminted .6 Luke then purported to derive an
in-house cost of installation , based on an attribution of
labor, operating and capital costs to the five employees,
which he compared with a figure alleged to be the cost
of having the 354 jobs done by an outside contractor.
The study is seriously flawed in a number of crucial
respects . Frist, the labor costs which Luke attributed to
the five employees are directly controverted by Re-
spondent 's "salary histories" for those employees.?
Second , no attempt was made to relate or compare the
number of hours worked by the five installers . Indeed, if
one uses Luke's estimates of how long each of the jobs
should have taken,8 all 354 jobs could have been finished
in 158 man -hours and could therefore have been accom-
plished by a single installer, rather than five.9
Third, the study posits significant capital savings
which are not substantiated in or otherwise supported by
the record . Luke correctly asserts that the termination of
five installers will allow Respondent to utilize the dis-
charged installers ' trucks and equipment at other points
within its system . He then assumes that the value of
repositioning this capital equipment may appropriately be
measured by the equipment 's undepreciated replacement
cost new. An accurate valuation could have been ob-
tained by using the value of the equipment reflected in
Respondent 's books of account or by using a value
which took into account the age and future useful life of
the equipment in question . Under any theory of valu-
ation , however, the number of dollars saved by reposi-
tioning capital equipment would obviously be reduced if
fewer than five installers were discharged.
The final flaw in the study involves calculation of the
cost of having an outside contractor perform the 354
jobs . Luke admittedly used cost figures that were be-
tween $ 1 and $4 per job lower than the actual charges of
Respondent 's contractor during February 1986 . 10 Given
the study's conceptual and methodological defects, as
well as the absence of any evidentiary support for its
conclusions, I find it to be without probative value.
After receiving the study, Langendorf purportedly de-
cided to eliminate the position of installer in the Bay
Area and to subcontract all the area's installation and re-
connection work to an outside contractor for the follow-
ing reason : the anticipated increase in installation work in
the Bay Area resulting from the new marketing effort;
the need to achieve sufficient flexibility to accommodate
peaks and valleys in the demand for installation; the
desire to cut operating costs, including labor costs; the
need to reposition capital ; "' and a desire to conform the
Bay Area's practices to those of Northwest Harris and
South Houston , where installation and reconnection
work was allegedly no longer performed in house. As a
result of increased subcontracting installation work in the
Bay Area, Respondent 's payments to its outside contrac-
tor increased from $ 182,000 in 1985 to a projected
$196,000 in 1986.
Langendorfs decision directly resulted in the assign-
ment of a job title to or the termination of each of the
installers in the Bay Area. Without notification to or bar-
gaining with the Union, Respondent discharged the fol-
lowing installers on 17 April 1986: Stephen H. Spears,
John T. Rose, Tomas Rios, M. J. Butler, Jr., and David
M. Boudreaux , Jr. It was stipulated that the Union never
requested bargaining concerning the effects of Respond-
ent's decision to terminate the five employees and that
Respondent never bargained with the Union concerning
those effects.
At the time of the discharge and in June 1986, Re-
spondent employed nine installers in the South Houston
area. Between 20 September and 22 October 1986, the
service employees in South Houston installed cable serv-
ice in over 600 residential dwelling units. t 2
C. Discussion
Respondent contends that its 7 April 1986 and later
failures to bargain with the Union were not unlawful be-
cause the Board's cerification of the Union was invalid.
This matter was fully litigated in Case 23 -RC-5286 and,
5 Given Luke's admission that he initially surveyed all the Bay Area's
installation work during the first 3 months of the year for his study, he
could not have begun the study before the end of March.
8 How Luke could have formulated an initial selection criterion based
on the outcome of his study was unexplained and appears inexplicable,
unless the study 's outcome was a foregone conclusion.
T The study employs an average monthly cost per employee for labor
and associated benefits of $1333 . 31. Using one-twelfth of the employees'
actual annual salaries as reflected in Respondent 's records , one derives an
average monthly cost per employee of $1248 for labor and benefits. This
discrepancy is troubling in view of Langendorfs testimony that Respond-
ent's employees work 8 hours a day, 5 days a week , with no overtime
8 These appear as Luke's annotations on R. Exh. 4.
9 Even if one assumes an ample increase-say 50 percent-in the
number of hours necessary to do the jobs in order to allow for travel
time (an assumption by no means required by R. Exh . 4), the total labor
and benefit cost for the in-house performance of all the work in the study
would be $ 1872, rather than Luke 's figure of $6,666.53
10 Also troubling is Luke's testimony that Respondent paid its outside
contractor only $1500 a month for installations and reconnections in the
Bay Area after installers were eliminated . If, as Luke also testified,
$2,759.50 represents the outside contractor 's charges for doing 10 percent
of the installation and reconnection work in the Bay Area during Febru-
ary 1986, the total monthly cost for such work should approximate
$27,000. The latter figure is supported by Respondent 's purchase orders,
which budget a minimum of $ 10,800 monthly for reconnections by the
outside contractor . The monthly amount Respondent budgets for installa-
tions by the contractor is not of record.
11 This reason was given in response to a leading question posed by
Respondent 's counsel.
12 The more than 600 overhead installations set forth in R Exh. 4 for
for this period were clearly distinguished by Luke's lengthy explanation
from the type of service required for multiple dwelling units According-
ly, I reject Langendorfs testimony that 100 percent of the installations in
the three Houston operating areas were made by an outside contractor
after June 1986.
302 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
absent any showing of special circumstances or newly
discovered evidence , Respondent 's contention cannot be
relitigated in this proceeding . See Pittsburgh Plate Glass
Co. v. NLRB, 313 U.S. 146, 162 (1941); Sections 102.67(f)
and 102 . 69(c) of the Rules and Regulations of the Na-
tional Labor Relations Board . Accordingly , this defense
is rejected , and I find that Respondent 's 7 April refusal
to bargain with the Union was an unfair labor practice
violative of Section 8(a)(5) of the Act.
Respondent also argues that its decision to terminate
five employees on 17 April 1986 was a "decision con-
cerning the commitment of investment capital and the
basic scope of the enterprise " and was, therefore, not a
mandatory subject of bargaining within the holding of
Otis Elevator Co., 269 NLRB 891 (1984). The record
does not support this argument in a number of respects.
Frist, it is clear that Responent 's purported decision to
subcontract all installation work and discharge five in-
stallers was not made for the reasons advanced by Re-
spondent 's witnesses . Langendorf's asserted need for
flexibility to handle varying levels of demand for installa-
tion service, including any increase occasioned by a new
marketing effort, is spurious . Because Respondent's in-
house service personnel in the Bay Area never handled
more than 50 percent of available installation work and
the remainder was always given to an outside contractor,
there was no possibility of Respondent either being
unable to meet peaks in demand or of its in-house per-
sonnel remaining idle during valleys in demand. Since
Respondent never entertained the idea of altogether
eliminating the subcontracting of installation in the Bay
Area, t s one must conclude that Respondent already en-
joyed complete flexibility with respect to the demand for
installations . Maintenance of this flexibility did not re-
quire the termination of five employees.
Similarly, Langendorf's assertions that his decision to
terminate employees would result in significant operating
and capital savings are wholly unsupported , and at least
partially contradicted , by the the record . Finally, Lan-
gendorf's supposititious assertion of a desire to establish a
uniform installation policy throughout the three Houston
areas is gainsaid by the fact that the South Houston area
did not cease to perform installations with its own per-
sonnel after 17 April 1986. Indeed, this fact raises a seri-
ous question as to whether Respondent actually decided
to eliminate the in -house performance of installation
work. 14
Also persuasive of the pretextual nature of Respond-
ent's rationale are the indications in the record that Lan-
gendorf's decision was made before he received Luke's
13 In response to a question from the bench , Luke testified that the
portion of his study which purportedly focused on increasing the number
of Bay Area installers was based on the assumption that some installa-
tions would continue to be performed by an outside contractor.
14 In this context , it is troubling that Respondent allegedly increased its
subcontracting in the Bay Area by at least 100 percent, while expenenc-
ing an increase in billing from its subcontractor of less than 8 percent.
Using the assumption in Respondent 's study that 10 percent of the Bay
Area' s installation work could be done by a subcontractor for $2757, Re-
spondent should have experienced a monthly increase in subcontracting
costs for the last 7 months of 1986 (during which in-house installations
had allegedly been abandoned ) of $13,785 , or 90.89 percent, over its aver-
age monthly costs in 1985.
study . If any possibility had actually existed of hiring,
training, and equipping additional installers to begin
work at the time the new marketing effort began in April
1986, it would have been prudent for Langendorf to
have been anxious about the progress of Luke 's study
and for Luke to have begun the study before the begin-
ning of April. Neither occurred . Even stronger evidence
of the fact that decision preceded rationale is Luke's ad-
mission that he began his study with the assumption that
five named installers would be terminated.
For the foregoing reasons, I find that Respondent's de-
cision which resulted in the termination of five employ-
ees on 17 April 1986 was not made for any legitimate
business reason which might cause that decision to fall
within the holding of Otis Elevator Co., supra. Accord-
ingly, I find that Respondent 's failures to give notice to
or bargain with the Union concerning that decision are
unfair labor practices in violation of Section 8(a)(5) of
the Act.
The final issue in this case is raised by Respondent's
argument that it had no legal obligation to engage in bar-
gaining over the effects of its decision since such bar-
gaining was never requested by the Union. By letter of 7
April 1986, Respondent stated that it would not bargain
with the Union while certification litigation was pending.
For the Union again to request bargaining only 10 days
later would have been a "totally futile gesture." See
Lauren Mfg. Co., 270 NLRB 1307, 1309 (1984). The
Union 's failure to make a second request under the cir-
cumstances of this case did not release Respondent from
its legal obligation to engage in bargaining over the ef-
fects of its decision to terminate five employees is an
unfair labor practice violative of Section 8(a)(5) of the
Act.
CONCLUSIONS OF LAW
1. Respondent is an employer engaged in commerce
within the meaning of Section 2(6) and (7) of the Act.
2. The Union is a labor organization within the mean-
ing of Section 2(5) of the Act.
3. All dispatchers , technicians , warehousemen , install-
ers, linemen and groundmen, converter repair technician,
and field service coordinators employed at Respondent's
six facilities located in the Houston , Texas metropolitan
area (Bisbee Street, Airport Boulevard , Lawrence Road,
FM 1765, Munson Road and Mayard Road), but exclud-
ing all other employees , customer service representatives,
customer sales representatives , local originations opera-
tor, receptionist , draftsperson (drafter), office clericals,
guards, watchmen and supervisors as defined in the Act,
constitute a unit appropriate for the purpose of collective
bargaining within the meaning of Section 9(b) of the
Act.
4. The Union is now , and all times material herein has
been, the exclusive representative for the purpose of col-
lective bargaining of the employees in the aforesaid unit
within the meaning of Section 9(a) of the Act.
5. By refusing on 7 April 1986 to bargain with the
Union as the exclusive collective -bargaining representa-
tive of employees in the aforesaid unit, Respondent has
STORER CABLE TV OF TEXAS 303
engaged in and is engaging in an unfair labor practice in
violation of Section 8(a)(1) and (5) of the Act.
6. By failing and refusing to give notice to and bargain
with the Union concerning the termination of five em-
ployees on 17 April 1986, Respondent has engaged in
and is engaging in an unfair labor practice in violation of
Section 8(a)(1) and (5) of the Act.
7. By failing to bargain with the Union concerning the
effects of a decision to terminate five employees on 17
April 1986, Respondent has engaged in and is engaging
in an unfair labor practice in violation of Section 8(a)(1)
and (5) of the Act.
8. The aforesaid unfair labor practices affect commerce
within the meaning of Section 2(6) and (7) of the Act.
REMEDY
Inasmuch as Respondent has engaged in unfair labor
practices , I shall order it to cease such practices and to
take affirmative action designed to effectuate the purpose
of the Act. In order to remedy its unlawful refusal and
failure to bargain, Respondent shall be ordered to bar-
gain with the Union . To ensure that the unit employees
are accorded the services of their selected agent for the
period provided by law, the initial period of the certifica-
tion shall be construed to begin on the date the Respond-
ent begins to bargain in good faith with the Union. See
Great Western Produce , 282 NLRB No . 17 (Nov. 12,
1986) (not reported in Board volumes ); Mar-Jac Poultry
Co., 136 NLRB 785 (1962 ). In addition , Respondent shall
be required to make whole those employees it unlawfully
terminated by paying them their normal wages from the
date of their termination until the earliest of the follow-
ing conditions is met : ( 1) Respondent and the Union
reach an agreement , (2) a bona fide impasse is reached
through good -faith bargaining , (3) the Union fails to re-
quest bargaining within 5 days of receipt of Respondent's
notice of its desire to bargain , or (4) the Union fails to
bargain in good faith . See Gulf States Mfrs., 261 NLRB
852, 853 ( 1982). Backpay shall be calculated in accord-
ance with the formula set forth in F. W. Woolworth Co.,
90 NLRB 289 ( 1950), with interest thereon computed in
the manner set forth in Florida Steel Corp., 231 NLRB
651 (1977).15
[Recommended Order omitted from publication.]
15 See generally Isis Plumbing Ca, 138 NLRB 716 (1962).