Sunline Industries, Inc.

National Labor Relations Board - Board Decisions

Jan 16, 1986

278 N.L.R.B. 10 (N.L.R.B. 1986)

10 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Cuello Industries , Inc., d/b/a Scroll Casual, a
wholly owned subsidiary of Sunline Industries,
Inc. and United Steelworkers of America, AFL-
CIO-CLC. Case 12-CA-11380
16 January 1986
DECISION AND ORDER
BY MEMBERS JOHANSEN, BABSON, AND
STEPHENS
On 7 May 1985 Administrative Law Judge
Robert A. Gritta issued the attached decision. The
Respondent filed exceptions and a supporting brief,
and the General Counsel filed an answering brief.
The National Labor Relations Board has delegat-
ed its authority in this proceeding to a three-
member panel.
The Board has considered the decision and the
record in light of the exceptions and briefs' and
has decided to affirm the judge's rulings, fmdings,2
and conclusions3 and to adopt the recommended
Order.4
ORDER
The National Labor Relations Board adopts the
recommended Order of the administrative law
judge and orders that the Respondent, Cuello In-
dustries, Inc., d/b/a Scroll Casual, a wholly owned
subsidiary of Sunline Industries, Inc., Miami, Flori-
da, its officers, agents, successors, and assigns, shall
take the action set forth in the Order, except that
the attached notice is substituted for that of the ad-
ministrative law judge.
i The Respondent has requested oral argument The request is denied
as the record, exceptions, and briefs adequately present the issues and the
positions of the parties.
2 The Respondent has excepted to some of the ,fudge's credibility find-
ings. The Board's established policy is not to overrule an administrative
law ,fudge'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.
2- In adopting the ,fudge's conclusions that the Respondent violated Sec.
8(a)(5) by refusing to recognize the Union, we do not rely on his finding
that strapping department employees belonged in the bargaining unit of
production and maintenance employees
4 We find merit to the General Counsel's request that the notice be
posted in Spanish as well as English. We will also include affirmative
bargaining language in the attached substitute notice
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.
Section 7 of the Act gives employees these rights.
To organize
To form, join, or assist any union
To bargain collectively through representa-
tives of their own choice
To act together for other mutual aid or pro-
tection
To choose not to engage in any of these
protected concerted activities.
WE WILL NOT refuse to recognize and bargain
collectively-with the United Steelworkers of Amer-
ica, AFL-CIO-CLC as the collective-bargaining
representative in the following unit:
All production and maintenance employees, in-
cluding truck drivers, employed by the em-
ployer at our Miami, Florida facility, exclud-
ing all office clerical employees, guards, pro-
fessional employees, and supervisors as defined
in the Act.
WE WILL NOT in any like or related manner
interfere with, restrain, or coerce you in the exer-
cise of the rights guaranteed you by Section 7 of
the Act.
WE WILL, on request, bargain collectively with
the above-named labor organization as the collec-
tive-bargaining representative of employees in the
unit described above, with respect to rates of pay,
wages, hours of employment, and other terms and
conditions of employment and, if an understanding
is reached, embody such understanding in a signed
agreement.
CUELLO INDUSTRIES , INC., D/B/A
SCROLL CASUAL , A WHOLLY OWNED
SUBSIDIARY OF SUNLINE INDUSTRIES,
INC.
Eduardo Soto, Esq., for the General Counsel.
Robert T. Kofman, Esq. (Mershon, Sawyer, Johnston, Dun-
wody & Cole), of Miami, Florida, for the Respondent.
278 NLRB No. 5
SCROLL CASUAL 11
DECISION
STATEMENT OF THE CASE
ROBERT A. GRITTA, Administrative Law Judge. This
case was tried before ape on 22 January 1985, in Miami,
Florida, based on a charge filed by United Steelworkers
of America, AFL-CIO-CLC (the Union) on 9 October
1984, and a complaint issued by the Regional Director
for Region 12 of the National Labor Relations Board on
30 November 1984.1 The complaint alleged that Cuello
Industries , Inc. (Cuello or Respondent) as a successor
employer violated Section 8(a)(1) and (5) of the Act by
refusing to'recognize and bargain with the Union as the
exclusive representative of its employees following such
a demand by the Union. Respondent's timely answer
denied the commission of any unfair labor practices.
All parties hereto were afforded full opportunity to be
heard, to examine and cross-examine witnesses, to intro-
duce evidence, and to argue orally. Briefs were submit-
ted by the General Counsel and Respondent on 28 Feb-
ruary 1985. Both briefs were duly considered.
On the entire record-in this case and from my observa-
tion of the witnesses and their demeanor on the witness
stand, and on substantive, reliable evidence considered
along with the consistency and inherent probability of
testimony, I make the following
FINDINGS OF FACT
1. JURISDICTION AND STATUS OF LABOR
ORGANIZATION-PRELIMINARY CONCLUSIONS OF
LAW
The complaint alleges, Respondent admits, and I find
that Cuello Industries, Inc., d/b/a Scroll Casual, a
wholly owned subsidiary of Sunline Industries, Inc., is a
Florida corporation engaged in the manufacture and
nonretail sale of patio furniture in Miami, Florida. Juris-
diction is not an issue. Cuello Industries, Inc., d/b/a
Scroll Casual, Inc., a wholly owned subsidiary of Sunline
Industries, Inc., in the past 6 months and by projection
will, annually in the course and conduct of its business
operations, purchase and receive at its Miami facility
goods and materials valued in excess of $50,000 from
companies who purchased goods from suppliers located
outside the State of Florida. I conclude and find that
Cuello Industries, Inc., d/b/a Scroll Casual, Inc., a
wholly owned subsidiary of Sunline Industries, Inc., is an
employer engaged in commerce and in operations affect-
ing commerce within the meaning of Section 2(2), (6),
and (7) of the Act.
The complaint alleges, Respondent admits, and I con-
clude and find that the Union is a labor organization
within the meaning of Section 2(5) of the Act.
II. THE ISSUES
The gravamen of this case is whether Respondent is a
legal successor to Scroll Casual, Inc. and, if so, does Re-
spondent incur an obligation to recognize and bargain
with the Union.
' All dates herein are in 1984 unless otherwise specified.
A subordinate issue involves the unit placement of five
employees who make up the strapping department.
III. THE ALLEGED UNFAIR LABOR PRACTICES
Background Facts
The Union was certified as the exclusive representative
of the production and maintenance employees of Scroll,
Inc. on 10 July 1970. The product was patio furniture.
Several contracts were negotiated between the Union
and Scroll with the - latest expiring on 1 October 1979.
Prior to its expiration, Keller Industries purchased
Scroll, Inc, and on 8 November 1979 executed a new
contract with the Union to expire on 1 October 1982.
Keller continued the manufacture of patio furniture as
Keller Scroll, and the employee unit remained produc-
tion and maintenance . In July 1982, Keller and the Union
negotiated a new contract with an expiration date of 1
October 1985 . On 8 September 1982, Keller sold the
business to Scroll Casual , Inc. Scroll Casual, Inc. contin-
ued , the business as its Scroll Division and added -a
cheaper line of patio furniture to be manufactured in a
new Casual Division. Each division was composed of
eight departments : assembly , cushion, grinding and sand-
ing, painting, parts, shipping , strapping , and welding. At
least three supervisors and several leadmen directed the
work force. At the time of purchase, Scroll Casual, Inc.
recognized the Union as the exclusive representative of
its employees in a production and maintenance unit of its
Scroll Division and assumed the existing contract cover-
ing those employees. The Casual Division was unrepre-
sented. Within the coming year, the Union organized the
production and maintenance employees in-the Casual Di-
vision and on 10 October 1983 the employer recognized
the Union as the exclusive representative of its produc-
tion and maintenance employees in the Casual Division
and, by agreement, applied the Scroll Division contract
to both divisions. Scroll Casual, Inc. scheduled its pro-
duction based on orders received and, during the down
cycle, laid off its seasonal employees. At the peak of the
season 70 unit employees were employed . Each division
worked in separate buildings and each was supervised by
one individual. Several departments within each of the
divisions were under the direction of a leadman and
others were responsible to both divisions and headed by
a leadman . The Union remained the exclusive representa-
tive of Scroll Casual, Inc. production and maintenance
employees until May 1984 when Scroll Casual, Inc.
ceased operations. On 7 June 1984 Cuello Industries, Inc.
purchased the assets , name; trademark , equipment, sup-
plies , materials, accounts payable, and accounts receiva-
ble of Scroll Casual, Inc. The two buildings housing
Scroll Casual, Inc. were leased by Cuello to continue the
manufacturing of patio furniture. However, Cuello only
manufactured the Scroll line of furniture (more expensive
furniture) when operations began. Thus, patio furniture
was manufactured in the same buildings albeit by differ-
ent companies, since at least 10 July 1970, and Cuello
succeeded Scroll Casual, Inc. Likewise, the Union was
continuously the exclusive representative of each em-
ployer's production and maintenance employees up to
12 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
the cessation of business by Scroll Casual, Inc. in May
1984.
Cuello Industries, Inc. is a subsidiary of Sunline Indus-
tries, which also manufactures patio furniture in the
Miami area. Cuello commenced operations on 11 June
1984, under the trade name Scroll Casual. Cuello intend-
ed to operate Scroll Casual on a streamlined basis work-
ing to an inventory rather than filling orders. One of the
two production buildings was utilized as a warehouse
and the other was refitted for assembly line production.
Several operations were contracted out to its parent,
Sunline, eliminating previous production departments.
Cuello began operations with five employees in the parts
department , one employee in the welding department,
one employee in the strapping department, and two em-
ployees in the shipping department. Of these nine em-
ployees, eight were former employees of the predecessor.
Cuello only used one supervisor on the production floor,
and he was the former Casual Division supervisor of the
predecessor. In addition, Luis Cuello Jr. took an active
part in the management of the business. By the end of
June, three more parts employees, seven more welders,
four more strapping employees, and a truckdriver were
added to the work force. Of the 15 additional employees,
8 were former employees of the predecessor. In July, a
cheaper line of furniture was contracted by Cuello to be
made for a separate corporation, Leisure Design. Cuello
was to fabricate the frames only for the leisure line.
Actual production of this cheaper line began in August.
The work force remained relatively stable through Sep-
tember. On 10 September, the Union, by certified mail,
demanded recognition as the representative of Cuello's
employees and requested dates to begin negotiations for
a labor agreement.2. Cuello received the Union's demand
letter on 17 September. On 3 October Cuello responded
by letter to the Union's demand denying recognition and
claiming the Union's demand was premature, because a
full complement of employees was not on board. At the
time of the Union's demand and Respondent's receipt of
the demand, a total of 22 -production employees were
working, and 16 of them were former employees of the
predecessor. On 3 October, when Cuello denied recogni-
tion to the Union, 24 production employees were work-
ing and 16 of them were former employees of the prede-
cessor. Between 3 and 11 October, three welders were
hired, two were terminated, and the five strapping em-
ployees were terminated. None of those hired were
former employees of the predecessor, whereas six of the
seven terminated were former employees.
The physical assets of Scroll Casual, Inc. purchased by
Cuello included 22 welding machines, of which only 6
worked properly; 15 metal benders, of which only 2
were put to use, 20 metal presses, of which only 2 were
put to use, and only 1 of the 5 metal cutters was used.
About eight sewing machines were in place and all are
being used, whereas the trucks on hand have not been
placed in service. With the exception of the welding ma-
chines, Cuello has no need for the additional machines.
Cuello's production method does not require the number
of machines that the predecessor had. Cuello's limited
use of the machinery was occasioned by both the stream-
lining of the production process, and the work-to-inven-
tory method. Cuello's policy of employing year round to
eliminate seasonal peaks and valleys was likewise imple-
mented by the process and method changes. Of the eight
departments operated by the predecessor, Cuello has
eliminated four. Grinding and sanding and painting de-
partments were eliminated because Cuello uses a color-
ing process that does not employ spray paint. The cush-
ion department was eliminated because,Cuello is subcon
tracting the making of cushions to Sunline , and the strap-
ping department was eliminated in October, with the
process thereafter to be contracted out to Sunline. The
assembly department utilized by the predecessor was
eliminated by Cuello's conveyorization of the production
process. This change in the production process required
new dyes for the machines and new jigs for assembly at
a cost between $25-$30,000. To increase efficiency of the
working-to-inventory method, Cuello installed a comput-
er with specified software to be used exclusively for the
Scroll line of furniture at a total cost of $35-$36,000. An
additional ,$4000 was spent to repair broken welding ma-
chines, and $7500 was spent to install a new phone and
intercom system; however, Cuello uses the same phone
numbers as the predecessor.
The predecessor had a sales force of approximately
eight salesmen with sales nationwide, but with a concen-
tration in Florida and the Southeastern States. In total,
about 250 customers were serviced, although the figure
dropped to approximately 50 in the last 6 months of op-
erations. Sales were aided by a sales catalog which was
updated annually, but sales had dropped steadily due to
poor quality production, which resulted in numerous
claims by customers and in many cases a cessation of the-
business relationship. When Respondent purchased the
assets , most of the salesmen quit . Respondent began its
business with five salesmen, two of which were formerly
employed by the predecessor. The sales area is substan-
tially the same as before, but only 25 to 30 of the former
active customers are serviced by Cuello. Cuello also in-
troduced a cheaper brand of patio furniture into produc-
tion, which it fabricates for a sister corporation subsidi=
ary to Sunline. The brand is known as Leisure Design
and shares production ratios with the old Scroll Casual,
Inc. design . Of the approximately 150 suppliers servicing
the predecessor, Cuello does business with only 20. Two
of these supply basic raw materials, such as aluminum
and fiberglass, in conjunction with three new raw materi-
al suppliers. Cuello requires the suppliers to maintain a
quality standard which many of the predecessor's suppli-
ers did not have, particularly in the supply of aluminum.
Cuello concentrates on efficiency and quality control in
both the Scroll Casual and Leisure Design of furniture.3
Luis Cuello Jr., vice president of both Sunline and
Cuello Industries, testified that he had the hiring and
firing authority for Respondent. Sunline had planned to
expand its existing conveyor system to accommodate the
8 The parties stipulated that a production and maintenance unit includ-
ing truckdnvers is an appropriate unit.
' The above is based on uncontroverted testimony and objective evi-
dence in this record.
SCROLL CASUAL
additional business from Respondent's plant if the pur-
chase was finalized. The construction work did not begin
until mid-October and was completed on 20 January
1985. He stated that it was originally planned for Re-
spondent to contract out the painting and strapping de-
partments' work to Sunline, but from 11 June to 11 Oc-
tober five former strapping department employees of the
predecessor performed the strapping function at Re-
spondent's plant. The painting process from the begin-
ning was done by Sunline in its own facility. Respondent
would fill customer orders from its constant inventory of
unpainted pieces. The unpainted pieces were trucked to
Sunline for painting, then trucked back to Respondent
for strapping and shipping. On 11 October all five strap-
ping employees were laid off due to lack of work. Cuello
Junior stated that on 10 or 11 October he told all five
employees that Respondent would be closing down the
strapping department. He never told them they were ac-
tually terminated or laid off. The employees at the time
asked when they would be rehired. Cuello Junior told
the five employees he could not give them a date be-
cause he did not know when the conveyor would be fin-
ished, but there is definitely the possibility of rehire once
everything has been completed.4 After the layoff of Re-
spondent's strapping employees, the strapping operation
for Respondent's product was performed at Sunline by
Sunline employees after the painting process was com-
pleted. On 12 December Sunline rehired three of the five
strapping employees as Sunline employees to do the
strapping work in Sunline's facilities. From the time Re-
spondent's strapping department was shut down, the
packing and shipping of Respondent's product has been
accomplished by its shipping employees working out of
Sunline's facilities.
Dalia Rego testified that she has been employed at the
same location as a strapping employee for 17 years. She
is a former employee of Scroll Casual, Inc. and Cuello
Industries, and now works for Sunline. Rego stated that
the day Luis Cuello Jr. hired her, they spoke in his
office. Cuello, Junior told her that she would work in
the same old place, but only temporarily, and in the
future, she would go to Sunline when the conveyor
work was finished. Later, when all five girls in the strap-
ping department were working, Cuello, Junior came to
the department. He told the girls that work was slowed
down, and they were all getting a layoff. The girls asked
if it was a layoff so they could collect unemployment in-
surance and Cuello Junior replied, "Yes, for the time
being, yes." The girls asked Cuello Junior when they
would be rehired. He only said he did know it would be
whenever they finished the conveyor work. On 12 De-
cember Rego was hired by Sunline to work in the strap-
ping department at Sunline's facility.
Luis Cuello Sr. testified that he is president of Sunline,
Cuello Industries, Inc., and Leisure Design, Inc. Within
the purchase of Scroll Casual, Inc. were the accounts re-
ceivable, and he has experienced problems trying to col-
4 Luis Cuello Jr also testified that he hired three of the strapping em-
ployees on 11 June and told them at that time that the strapping depart-
ment would be moved to Sunhfie as soon as Sunhne was ready and the
conveyor had been put up
13
legit on the accounts. Most customers refused to pay the
accounts due to claims against the merchandise shipped
by Scroll Casual, Inc. The unpaid accounts total
$170,000. Cuello, Senior made the decision that Cuello
Industries would manufacture the additional line of Lei-
sure Design furniture. He decided in August that the
Scroll line of furniture would not be enough to keep the
Cuello Industries plant busy, so he incorporated Leisure
Design and contracted the fabrication to Cuello Indus-
tries.
Analysis and Conclusions
The General Counsel contends that Cuello Industries,
Inc. is a legal successor to Scroll Casual , Inc. with an
obligation to recognize the Union as the exclusive repre-
sentative of its employees and to bargain with the union
for all production and maintenance employees.
Respondent argues it is not a legal successor because
there is no substantial continuity of the employing indus-
try and alternatively that : If Respondent is a legal suc-
cessor it is not required to bargain with the Union be-
cause the Union lost its majority status ; - the union
demand for recognition was premature because at that
time Respondent had not hired a representative comple-
ment of employees; and, regardless of Respondent's
successorship status, the five employees in the strapping
department were temporary employees and, therefore,
not included in its employee complement at any time.
The appropriateness of the production and mainte-
nance employees , including truckdrivers, as the bargain-
ing unit is not in issue . Such is the historical unit among
successive employers since 1970, and, the parties stipulat-
ed that it was appropriate for Respondent 's employees.
The facts necessary to a determination are substantially
undisputed albeit the probative value of some of the facts
may be questionable . The initial inquiry must be the
successorship status of Respondent . The Board 's standard
for determining successorship status is "substantial conti-
nuity in the employing industry." Jeffries Lithograph Co.,
265 NLRB 1499 (1982). The factors traditionally relied
on by the Board in determining continuity are: (1) busi-
ness operations ; (2) physical plant; (3) work force; (4)
jobs and working conditions; (5) supervisors ; (6) machin-
ery, equipment, and methods of production; and (7)
products and services. Not all factors must be continued
for, successorship to be found . The finding is based on a
totality of circumstances although rarely is a successor-
ship with a concomitant duty to recognize and bargain
collectively found where the former represented employ-
ees of the old employer do not constitute a majority of
the new employer's employees.
Applying the factors to the circumstances of this case,
it is clear that the business operations remain the same.
The period of time between a shutdown of the old oper-
ations and a startup of the new operations is a matter of
weeks.5 The introduction of the computer and the_ new
phone system only lends speed to the same basic oper-
ation . The physical plant composed of two separate
5 See Aircraft Magnesium , 265 NLRB 1344 (1982), in which a 3-to-4
week hiatus had no affect on the successorship status.
14 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
buildings is identical and has been the same since 1970
and has had several past owners . The work force is two-
fold, part old employees and part new employees, al-
though at startup it was 100-percent old employees, to-
taling eight. The jobs, with the exception of the painting
department, are identical and there is no evident differ-
ence in the working conditions between Respondent and
the predecessor company. The single-line supervisor uti-
lized by Respondent was a division supervisor for the
old employer. The number of supervisors employed by
the old employer is in dispute. The General Counsel stip-
ulates to three and Respondent argues six. The difference
in number is insignificant because Respondent only in-
tends to employ the one-line supervisor, leaving the re-
maining management functions in the hands of Luis
Cuello Jr., an operating vice president. Respondent, as a
result of the purchase, acquired all the machinery and
equipment of the old employer. Some machinery has
been relocated from one building to another, but Re-
spondent emphasizes the state of disrepair of the welding
machines, the service vehicles, the nonuse of many of the
machines purchased, and including money budgeted to
make the necessary repairs as factors militating against
continuity of the business. The record clearly shows that
Respondent has used, and intends to use, all the welding
machines for production and utilizes trucks for hauling.
It is the nature of the use, not the specific identity of a
particular machine or piece of equipment, that is control-
ling. Thus, the state of disrepair is inconsequential. Re-
spondent also emphasizes its redesign of dyes for certain
of the metal cutting and metal bending machines, and its
use of more than one dye on a single machine, but the
functions of the dyes are identical to the prior functions.
Such multiple use of dyes necessarily idles machines
originally used by the old employer, which accounts for
an excess of machinery and evinces a more efficient use
of machinery. Respondent labels these changes as signifi-
cant and evidence that the business does not have conti-
nuity. In reality, it simply means that Respondent has a
better grasp of budgeting production on the various ma-
chines resulting in a smaller work force in spite of in-
creased production. The additional changes in the color-
ing process from liquid painting to the baking of powder
colorants and the redesigned extension of the conveyor
system represent, at least in Respondent's view, a better
way of doing the same thing. That same thing is making
patio furniture of metal. The expansion of the conveyor
system was not solely dependent on Respondent's argued
transfer of the strapping department to its parent, Sun-
line. The designed expansion was necessary to accommo-
date the immediate transfer of the coloring process and
the additional production of the Leisure Design line of
furniture. Respondent's argument that the introduction of
Leisure Design products is a substantial change either in
products or the method of production is unavailing. The
predecessor made a cheaper line of furniture in its casual
division and Respondent has chosen to make a separately
designed cheaper line rather than continue the casual. In
the last analysis Respondent, like its predecessor, contin-
ues to manufacture patio furniture in the same location
with the same machines and equipment, in basically the
same way, with some of the same employees, and with
as little production delay as possible considering all the
circumstances. 1, therefore, conclude and find that a sub-
stantial continuity of the employing industry exists. Thus,
Respondent is the legal successor of Scroll Casual, Inc.
Notwithstanding Respondent's successorship status, it
has no obligation to bargain with the Union unless it can
be shown that a majority of its employees in a represent=
ative complement were unit employees of the predeces-
sor. Stewart Chevrolet, 262 NLRB 362 (1982).
A preliminary issue of the unit placement of the five
strapping department employees requires resolution
before the representative complement issue can be
reached. The General Counsel contends that the five em-
ployees properly belong in the bargaining unit. Respond-
ent argues to the contrary on the basis that the five em-
ployees were hired as temporary employees. Luis Cuello,
Jr. was responsible for hiring three of the five and telling
them that at some point in time the strapping department
would be moved to Sunline. The date of any move was
unsure due to the lack of a forecast for completion of the
conveyor rework. Assuming all five employees were told
the same thing, the implication is that they would be
working in Respondent's facilities, and then later would
be working in Sunline's facilities. In each location their
job function would be the same . Nothing in the hiring
events discloses an elimination of the strapping operation
by Respondent, nor the possibility or even probability of
a layoff. No interruption of employment had been fore-
cast or indicated to the employees. I do not rely on wit-
ness Rego's use of the word "temporary" in her testimo-
ny. Rego exhibited little grasp of the past events or any
reasonable recall ability making her testimony as a whole
insubstantial and ambiguous, at best. Thus, the layoff was
an event foreign to any policy decision to close a depart-
ment at Respondent and have Sunline take over the func-
tion. Indeed, as late as October at the time of layoff, the
five employees were told only maybe they would be re-
hired by Sunline and in the interim Respondent's strap-
ping work was actually performed by Sunline employees,
and without a specific assumption of the operation by
Sunline Industries. Respondent's apparent lack of work
occasioned the layoff, but Sunline employees had to
absorb strapping work on Respondent's product. Wheth-
er a lack of strapping work existed at Respondent may
be more imagined than real, and may or may not be re-
lated to the conveyor rework at Sunline. The record evi-
dence shows that the five strapping employees were, in
fact, hired by Sunline more than a month before the con-
veyor rework was finalized and after experiencing a
layoff of 60 days. It is clear from this record that Sunline
and Respondent intended a cooperative effort in the
manufacturing of patio furniture, but the employee status
of Respondent's strapping department employees is not
so clear. Had Sunline's original intent been to eliminate
the strapping department at Respondent, the work would
have been immediately performed at Sunline as the
coloring process was, and in the same fashion, as that
performed during the layoff hiatus. Further, had Sun-
line's intent been such, there would be no confusion or
equivocation in the hiring of strapping employees or in
their subsequent layoff for lack of work. Sunline may
SCROLL CASUAL
have decided at some point in time -that the strapping op-
eration of Respondent could best be performed by Sun-
line, but it was not prior to Respondent's commencement
of operations, nor the hiring of employees to begin Re-
spondent's operations. The transitory nature of both
companies' operations, during the first several months is
obvious and somewhat personified by Respondent's
movement of product to Sunline for color, then back
again for straps, and its shipping employees' functions at
Sunline during the hiatus of the strapping employees'
layoff, and the occasion of the.layoff itself. Accordingly,
I conclude and find that the strapping department em-
ployees of -Respondent, hired in June to commence its
operation, were hired as permanent employees, not tem-
porary, and are included in the bargaining unit of em-
ployees previously defined. Therefore, their numbers will
be considered within the representative complement of
Respondent's employees.
Respondent compounds the representative complement
issue by contending that the bargaining unit was expand-
ing at the critical time, making the Union's "demand"
premature. The expanding unit concept has its applica-
tion in representation cases under investigation wherein
employers claim : not to be in full operation; an insuffi-
cient number of the contemplated job classifications are
filled; and there is -not a representative number of em-
ployees in a substantial number of the existing job classi-
fications. The Board traditionally considers the total
number of employees contemplated, the substance of the
projected plans, the time to be consumed for fruition,
and whether the additional jobs merely involve distinct
operations rather than separate and distinct job classifica-
tions in terms of types of skills required of the employ-
ees. If the Board determines that no significantly differ-
ent functions or skills are required or the anticipated
completion date is too distant or the projected plans are
mere speculation or conjecture, it will find the "substan-
tial and representative complement" test for Representa-
tive cases satisfied.
The Board's efforts in expanding units of representative
cases are identical to those in successorship cases to de-
termine when a representative complement of employees
exists. That is, to balance two potentially conflicting
policy objectives: Insuring maximum employee participa-
tion in the selection of a bargaining agent, and permitting
employees to be represented by a collective-bargaining
agent as quickly- as possible. In either situation, the
Board's approach is flexible and on a.case-by-case basis.
Consideration of the instant facts disclose that all the
anticipated skills and work functions of Respondent's op-
eration were in place within 2 weeks of commencement
of manufacturing on 11 June. Also, considering those
production departments eliminated by Respondent after
the purchase, all production departments anticipated by
Respondent were active and manned by employees
within 2 weeks of the start of production. Likewise, each
department was either fully manned, or half manned
within 2 weeks of startup. Additionally, the record evi-
dence amply shows that Respondent had no intention at
the time of purchase to utilize the same number of pro-
duction employees as its predecessor had utilized. The
record evidence, however, is unclear as to the total
15
number, of employees anticipated, and when that number
could be expected to be reached. The first 8 months of
Respondent's operation included a relatively stable work
force. The total employees for each month were: June-
22; July-24; August-22; September-21; October-25;
November-28; December-27; and 22 January 1985-
25. Assuming Respondent's projection of total employees
(50 by March or April) is accurate, albeit Cuello Junior's
assimilation of that projection into specific classifications
produces a smaller number (39-40), what it represents is
full complement, not representative complement. Contrary
to Respondent's argument and its reliance on Court
cases, the representative complement is not synonymous
with full complement. In Burns, the Court's reference to
full complement was dictum and only related to the issue
of unilaterally changed conditions of employment. In
Premium , the Court did suggest that some purchasers
may be slower starters than others, or, that they may
have inherited a down business, which requires time to
rejuvenate; therefore, one must wait for the successor
"to get rolling," but the Court added that the wait was
not to be for months or years until the very last employ-
ee is on board. Respondent cites Pacific Hide as further
authority for its position that its expanding work force
was not representative until the eighth month of oper-
ations. In Pacific, the Board followed its longstanding
rule that the time for determining what percentage of a
purchaser's employees were former affiliated employees
of a predecessor is when a demand for bargaining has
been made and a representative complement is on the
job. The Court refused to enforce the Board's order to
bargain because the complement of workers employed
by Pacific steadily expanded as planned, the period of
time was short, less than 60 days, and the full comple-
ment was just one more than the predecessor's when op-
erations ceased. Even if the Court's opinion,was control-
ling, the factual distinctions between Pacific and the in-
stant case would militate against its applicability. Regard-
less, I am bound to apply the Board's law and in a
successorship circumstance, the rule has not'changeda
The General Counsel cites and relies on Indianapolis
Mack Sales, 272 NLRB 690 (1984), for his position that
Respondent's obligation to recognize and bargain arose
on 17' September, and that a majority of Respondent's
representative complement of employees at that time
were former employees of the predecessor. I agree with
the General -Counsel's contentions. The relative stability
of the work force and the mere speculation of any real
augmentation of the employee complement during the
peak months of production, particularly when considered
with the change in production method (work-to-invento-
ry rather than to customers orders) convinces me that a
representative complement of employees existed any
given month after commencement of operations. It is in-
consequential to this issue that attrition of employees oc-
curred each month from inception, -in that such move-
ment of employees is part and parcel of any- normal op-
eration. The undisputed facts show that the Union en-
6 NLRB v Burns Security Services, 406 U S 272 (1972); Premium Foods
v. NLRB, 709 F.2d 623 (9th Cir 1983), Pacific Hide & Fur Depot v.
NLRB, 553 F.2d 609 (9th Cir. 1977) -
16 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
joyed a continued majority status from Respondent's
start up through the Union's demand, Respondent's re-
ceipt of that demand, and Respondent's denial of any ob-
ligation to-recognize and bargain. Accordingly, I con-
clude and find-that on 11 June Respondent was a legal
successor, and on 17 September, when the Respondent
received the Union's demand for recognition, the Union
enjoyed the presumption of continued majority status
among Respondent's employees. This conclusion is fur-
ther buttressed by the fact that on 3 October, the date of
Respondent's denial of the Union's demand, the majority
status of the Union had remained unchanged. According-
ly, I find that Respondent has violated Section 8(a)(1)
and (5) of the Act by its continued refusal to recognize
and bargain with the Union upon its demand.
Respondent's reliance on the Board's relatively recent
decision in Agri-International, 271 NLRB 925 (1984), is
faulty. In that case the Board, after recognizing its long-
standing rules of successorship, simply found the pre-
sumption of continued majority status rebutted by the
union's loss in a Board-conducted election, and citing
Irving Air Chute Co., 149 NLRB 627 (1964), for the prop-
osition that the Board would not grant a bargaining
order with respect to a labor organization which loses an
election. The distinction of the instant case is obvious.
Respondent argues that holdings in two cited cases
support its contention that the Union's presumption of
majority status was rebutted by the ultimate loss of ma-
jority. However, in neither case are the fundamental
rules that a successor must demonstrate that the union no
longer represents a majority of employees on the date of
refusal to bargain, or that the refusal to bargain was
grounded on a good faith doubt of the Union's majority
status, applied herein, changed in any respect. Both cases
also emphasize objective factors as proof of loss of majori-
ty. Respondent's further argument that the Howard John-
son formula, ire., substantial continuity of the work force
is measured by whether a majority of the predecessor's
employees are hired by the successor, should be applied
to the duty-to-bargain issue herein is contrary to applica-
ble Board law.7
Respondent is attempting to justify its unilateral reduc-
tion of the ratio of former Scroll Casual, Inc. employees
to newly hired employees, even though the reduction
postdates Respondent's operative conduct responsible for
the unfair labor practice charge. This Respondent could
not do, no matter what case law applied to the circum-
stances.
CONCLUSIONS OF LAW
1. All production and maintenance employees, includ-
ing truckdrivers, employed by the employer at its- Miami,
Florida facility, excluding all office clerical employees,
guards, professional employees and supervisors as de-
fined in the Act, is an appropriate unit for the purposes
of collective bargaining.
2. Respondent is a -successor of Scroll Casual, Inc. as
of 30 June and had, at that time and continuously there-
after, employed a representative complement of employ-
ees to operate its business.
3. At all times material, on and after 30 June, the
Union has been the exclusive collective-bargaining repre-
sentative of Respondent's employees in an `appropriate
,unit.
4. The Union, on 10 September, made a valid demand
for recognition and bargaining, which was rejected by
Respondent on 3 October and at all times since.
5. Respondent's refusal to recognize and bargain with
the Union as the exclusive representative of its employ-
ees on 3 October constitutes a violation of Section 8(a)(5)
of the Act.
6. The aforesaid unfair labor practice affects commerce
within the meaning of ` Section 2(6) and (7) of the Act.
REMEDY
Having found that Respondent has engaged in certain
unfair labor practices, I find it necessary to order Re-
spondent to cease and desist therefrom and to take cer-
tain affirmative action designed to effectuate the policies
of the Act.
On these findings of fact and conclusions of law and
on the entire record ,, I issue the following recommend-
ed8
ORDER
The Respondent, Cuello Industries, Inc.,'d/b/a Scroll
Casual, a wholly owned subsidiary of Sunline Industries,
Inc., Miami, Florida, its-,officers, agents, successors, and
assigns, shall
1. Cease and desist from
(a) Refusing to recognize and bargain collectively with
the United Steelworkers of America, AFL-CIO-CLC as
the exclusive representative of its employees in the fol-
lowing unit:
All production and maintenance employees, includ-
ing truckdriver`s, employed by the employer at its
Miami, Florida facility, excluding all office clerical
employees, guards, professional employees, and su-
pervisors as defined in the Act.
(b) In any like or related manner interfering with, re-
straining , or coercing employees in the exercise of rights
guaranteed them by Section 7 of the Act.
2. Take the following affirmative action necessary to
effectuate the policies of the Act.
(a) On request, bargain collectively with the United
Steelworkers of America, AFL-CIO-CLC as the exclu-
sive representative of all employees in the unit described
above and, if an understanding is reached, embody it in a
signed agreement.
8 If no exceptions are filed as provided by Sec. 102 46 of the Board's
Landmark International Trucks v. NLRB, 257 NLRB 1375 (1981), Rules and Regulations, the findings, conclusions, and recommended
enf. denied 699 F 2d 815 (6th Cir 1983); Harley-Davidson Co., 273 NLRB ' Order shall, as provided in Sec 102.48 of the Rules, be adopted by the
1531 (1985); Howard Johnson Co. v. Detroit Local Joint Executive Board, Board and all objections to them shall be deemed waived for all pur-
417 U.S. 249 (1974) poses.
SCROLL CASUAL 17
(b) Post at its offices in Miami, Florida, copies of the
attached notice marked "Appendix."9 Copies of the
notice, on forms provided by the Regional Director for
Region 12, after being signed by the Respondent's au-
9 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."
thorized representative, shall be posted by the Respond-
ent immediately upon receipt and maintained for 60 con-
secutive days in conspicuous places including all places
where notices to employees are customarily posted.' Rea-
sonable steps shall be taken by the Respondent to ensure
that the notices are not altered, defaced, or covered by
any other material.
(c) Notify the Regional Director in writing within 20
days from the date of this Order what steps the Re-
spondent has taken to comply.