U.S. Lingerie Corp.Download PDFNational Labor Relations Board - Board DecisionsMar 26, 1968170 N.L.R.B. 750 (N.L.R.B. 1968) Copy Citation 750 DECISIONS OF NATIONAL LABOR RELATIONS BOARD U.S. Lingerie Corporation and U.S. Lingerie Cor- poration , Debtor in Possession and Undergarment and Negligee Workers' Union , Local 62 , Interna- tional Ladies ' Garment Workers' Union, AFL-CIO and Allied Underwear Association, Inc. Case 2-CA-11095 March 26, 1968 DECISION AND ORDER On July 19, 1967, Trial Examiner David S. Davidson issued his Decision in the above-entitled proceeding, finding that the Respondent had en- gaged and was engaging in certain unfair labor practices and recommending that it cease and de- sist therefrom and take certain affirmative action, as set forth in the attached Trial Examiner's Deci- sion . Thereafter, the Respondent filed exceptions to the Decision and a supporting brief. The General Counsel and the Charging Party also filed excep- tions and supporting briefs, and the Respondent filed an answer to these cross-exceptions. The Board has reviewed the rulings of the Trial Examiner made at the hearing and finds that no prejudicial error was committed. The rulings are hereby affirmed. The Board has considered the Trial Examiner's Decision, the exceptions and briefs, and the entire record in the case, and hereby adopts the findings, conclusions, and recommenda- tions of the Trial Examiner only to the extent con- sistent herewith. The complaint herein states in substance that Respondent U.S. Lingerie violated Section 8(a)(5) and (1) of the Act by untimely withdrawing from Allied Underwear Association (hereinafter referred to as the Association), and thereafter refusing to accept and be bound by the results of multiem- ployer bargaining, and, additionally, violated Sec- tion 8(a)(1) and (5) by failing to notify Local 62 and to bargain with it concerning the shutdown of Respondent's New York plant and the removal of its operations to Donalsonville, Georgia. Respondent contends, inter alia, that the withdrawal from the Association was at an ap- propriate time because of unusual circumstances, and that the Union waived bargaining over the removal, as the Union, in fact, had adequate notice of the removal, yet made no attempt to bring the employer to the bargaining table. The Trial Ex- aminer found that Respondent's withdrawal from multiemployer bargaining was untimely, and that there were no unusual circumstances to excuse the withdrawal; and found further, that the Respondent independently violated its bargaining obligations by relocating its operations without giving Local 62 notice of the move and an opportunity to bargain with it with respect to the move. We find merit in Respondent's contentions and therefore agree with the Trial Examiner only to the extent of finding Respondent's withdrawal from- the Association to be untimely.' On or about January 28, 1966, Respondent filed a petition for an arrangement pursuant to chapter XI of the Bankruptcy Act. Thereafter Respondent operated its business as Debtor in Possession while a plan of arrangement was to be established with a committee of five of,Respondent's principal credi- tors. Local 62 was not a member of the creditors' committee but was one of Respondent's 10 largest creditors. The Respondent's economic distress was communicated to the Union in early February 1966, when its president, Arnold Swee, met with Local 62 Manager Schoenwald and one Chernoff, a manufacturer, to determine whether the Union would agree to Swee and Chernoff entering into a partnership. Schoenwald stated that a partnership would not satisfy the terms of a settlement agree- ment between Chernoff and the Union. At this meeting Swee mentioned to Schoenwald his desire to obtain work as a contractor, and asked Schoen- wald if he could get some work for him. Schoen- wald and his business agents attempted to help Respondent get work, apparently without much success. In March or April, Swee sought permission from the creditors' committee to move away from New York. The committee would not agree to a move until Respondent had confirmed a plan of arrange- ment or, in lieu thereof, had deposited sufficient money in a special account to confirm a plan. On April 22, a plan of arrangement was filed in the bankruptcy court, a copy of which was sent to the Union. The plan provided, among other things, upon its confirmation for payment in full of all pri- ority creditors and for payment to unsecured credi- tors in the amount of 50 percent of their claims in full settlement thereof. At the time of the hearing, the plan had not been judicially confirmed. On April 29, an argeement was entered into between the creditors' commitee and the Respon- dent in which Respondent agreed to make deposits in a special account totalling at least $60,000. The respondent added a final paragraph that permitted it, after making the required deposits, to relocate anywhere. On May 3, the court entered an order approving the agreement and directing the Respondent to comply with it. Local 62 was not served copies of this agreement and the order and no notice of them until July 11, 1966. 170 NLRB No. 77 U.S. LINGERIE CORPORATION 751 On May 11, the Respondent's attorney called the Association Executive Director Rosenbaum to inquire how Respondent could resign from the As- sociation. When informed by Rosenbaum that negotiations had commenced on a contract to replace the one due to expire on June 30, Respon- dent's attorney wrote Rosenbaum 'informing him that U.S. Lingerie Corporation was withdrawing from the Association as of January 28, 1966, the date of filing of the bankruptcy petition. According to the Respondent, May 11 was the first time it became aware that negotiations had begun. Rosen- baum conveyed this declaration of withdrawal to Local 62 Manager Schoenwald, and the Union, on May 13, wrote to Respondent's attorney stating that since negotiations had already begun (bargain- ing commenced on April 18, 1966), it was too late for withdrawal, and that when a new agreement was entered into between the Union and the Associa- tion, they would hold U.S. Lingerie Corporation bound by the new agreement. The first issue presented is whether Respondent effectuated a timely withdrawal and, if not, whether the withdrawal was nevertheless justified because of unusual circumstances. A multiemployer bargaining relationship no can be terminated only by mutual consent, express or implied, or by a timely withdrawal prior to the commencement of negotiations for a future contract. Thus, an employer's withdrawal after bar- gaining has commenced is effective only if acquiesced in by the Union or if justified by unusual circumstances , Retail Associates, 120 NLRB 388; Sheridan Creations, Inc., 148 NLRB 1503, enfd. 357, F.2d 245 (C.A. 2), cert. denied 388 U.S. 1008. The Trial Examiner found and we agree, for the reasons set forth in the Trial Ex- aminer's 'Decision, that Respondent's attempted withdrawal from the multiemployer bargaining unit was untimely. We disagree, however, with the Trial Examiner's conclusion that the withdrawal was not justified by unusual circumstances because Respondent's economic difficulties predated the commencement of negotiations between the Association and the Union and that the withdrawal stemmed from Respondent''s desire to relocate away from the New York area. Considering all the circumstances of the case-including the facts that Respondent withdrew from the Association i+n order to relocate outside of the New York area; that Respondent unsuccessfully sought help from the Union in its effort to over- come the difficult economic straits it was in; that Respondent's status was that of a Debtor in Posses- sion under the bankruptcy laws; and that Respon- dent's intention to relocate its plant outside the New York area raised issues inherently more amenable to resolution through collective bargain- ing confined to the parties immediately involved in the dispute than through collective bargaining car- ried on on an associationwide basis-we find that Respondent's withdrawal from association bargain- ing was justified even though it occurred after the commencement of the latest round of such bargain- ing. Accordingly, we find that Respondent did not violate Section 8(a)(5) and (1) of the Act by withdrawing from the Association or by refusing to adhere to the agreement thereafter negotiated by the Association and the Union. The second issue is whether Respondent violated Section 8(a)(1) and (5) by failing to bargain with Local 62 concerning the shutdown of Respondent's New York plant and the removal of its operations to Donalsonville, Georgia. Respondent contends that the Union waived bargaining over removal, as the Union had adequate notice of the removal, yet made no attempt to bring the issues relating to the planned removal to the bargaining table. On the basis of the entire record herein, we agree with Respondent's contentions. The record as a whole and particularly the state- ments that Arnold Swee made to Union Represen- tative Torriani, attests to the fact that the Union was aware by May 16, 1966, that U.S: Lingerie was contemplating moving its operations to another lo- cation. On that date, Swee told Torriani that he could not survive under existing conditions and that he was considering a number of alternatives. On June 15, immediately after Swee returned from Donalsonville, Georgia, Torriani asked him if he was going to move south . Swee replied that "he had never lied to Torriani, that he would not do so, and that he would not answer the question," Torriani, in an affidavit , stated , " I took this as an admission by Mr. Swee that a removal of the factory was a certainty or very nearly so." In addition, there is other evidence that the Union was 'aware that Respondent was going to move its operations. Thus, as early as late May or early June, the Union, ac- cording to Torriani, had heard rumors that Respon- dent was going to move. Thereafter, on June 21, Torriani saw machines being dismantled and a sign in the shop that said Jasper, Alabama. Also, in late June, a union accountant reported that he saw the factory dismantled and many boxes marked for shipment to Jasper, Alabama. On June 27, after Swee, 5 days earlier, had told his operators that he was going out of business, Torriani went to the shop, and upon- seeing only five girls working, called Schoenwald who instructed him to call a strike. The strike lasted until all of Respondent's property was removed from the premises. Although 752 DECISIONS OF NATIONAL LABOR RELATIONS BOARD it is true that Respondent was less than candid in answering questions from union representatives and from employees as to whether the plant was being closed or moved, the foregoing evidence demon- strates that, in fact, the Union had sufficient notice of Respondent's intended move to place upon it the burden of demanding bargaining if it wished to preserve its rights to bargain about the decision to move and the effect of such decision upon the em- ployees' terms and conditions of employment. Further, it is apparent that a more formal notice from Respondent about the planned removal of its operations would have been a futile action in con- tributing to the likelihood of bargaining between Respondent and the Union over these develope- ments, for the Union's actions from the time it first received notice of Respondent's withdrawal from multiemployer bargaining and thereafter demon- strated that it was insisting upon bargaining with Respondent only through the Association. Thus the day after the Union received notice of the withdrawal, its attorney informed U.S. Lingerie by letter that, "It is the intention of our client, when the negotiations for the renewal of the agreement are completed and a new agreement is entered into between the Union and the Association, to hold your client bound by the terms of said agreement for the duration thereof." On May 16, Torriani told Swee that "if he was thinking of moving not to try it because the Union had broken others and it would not take much to break him." In addition, when Swee requested special treatment, explaining that he could not manage under a new agreement, even if the costs remained the same, Torriani denied the request and told him Local 62 would hold him to the new agreement. Finally, when the Union called a, strike against Respondent, its apparent purpose was to obtain Respondent's signature on the As- sociation contract which had just been negotiated. The intention of the Union was to enforce the new contract and the Union was clearly not interested in bargaining with Respondent on an individual basis. Evaluating the foregoing circumstances in the light of the recent decision in N.L.R.B. v. Spun-Jee Cor- poration and the James Textile Corporation, 385 F.2d 379 (C.A. 2), decided October 30, 1967, denying enforcement in pertinent part of 152 NLRB 943, we find that the Union did have notice of Respondent's plans and that, in failing to request bargaining over the removal, it waived its rights in that matter. On the basis of the foregoing, we find that Respondent's conduct was not in violation, of the Act, and we shall dismiss the complaint. ORDER Pursuant to Section 10(c) of_the National Labor Relations Act, as amended, the National Labor Relations Board-adopts as its Order the Recom- mended Order of the Trial Examiner and hereby orders that the complaint herein be, and it hereby is, dismissed in its entirety. TRIAL EXAMINER'S DECISION STATEMENT OF THE CASE DAVID S. DAVIDSON, Trial Examiner: Pursuant to a charge filed on September 20, 1966, and thereafter amended by Undergarment and Negligee Workers' Union, Local 62, International Ladies' Garment Workers' Union, AFL-CIO, hereinafter referred to as Local 62, the Regional Director is- sued a complaint against Respondent on November 29, 1966. The complaint alleges that Respondent violated Section 8(a)(1) and (5) of the Act by refusing to recognize and bargain with Local 62 as representative of its employees along with those of other members of the Allied Underwear Associa- tion, Inc., and to acknowledge its obligations pur- suant to a contract negotiated between the Union and the 'Association. The complaint also alleges that Respondent violated the Act by terminating its New York operations and relocating them in Geor- gia without prior notice to Local 62 and without af- fording Local 62 an opportunity to negotiate and bargain with the Respondent. In its answer Respon- dent denies the commission of any unfair labor practices and affirmatively pleads several defenses. This proceeding was heard before me in New York, New York, on February 27 through March 2 and on March 9 and 10, 1967. At the, close of the hearing oral argument was heard and the parties were given leave _ to file briefs. Briefs have been received from the General Counsel and Respon- dent. Upon the entire record in this case and from my observation of the witnesses and their demeanor, I- make the following: FINDINGS AND CONCLUSIONS 1. THE BUSINESS OF THE RESPONDENT Until sometime between August and October 1966, U.S. Lingerie Corporation was at all times material hereto a corporation organized under the laws of the State of New York. Since that time it has been a corporation organized under the laws of the State of Georgia.' On or about January 28, ' No contention is made that the change in the place of incorporation of Respondent has any bearing on Respondent's status material to these proceedings U.S. LINGERIE CORPORATION 753 1966, U.S. Lingerie Corporation filed a petition in the United States District Court for the Southern District of New York for an arrangement pursuant to chapter XI of the Bankruptcy Act, 11 USC § 701 et seq. From that time through the time of the hear- ing in this case, U.S. Lingerie Corporation has con- tinued in possession of its property and has con- tinued to operate as Debtor in Possession pursuant to an order of the court in that proceeding.' Until on or about July 4, 1966, Respondent maintained its, place of business in New York, New York, where it was engaged in the business of manufac- turing and/or contracting ladies' and children's un- dergarments and related products. Since sometime in July 1966, Respondent has maintained its place of business in Donalsonville, Georgia, where it has been engaged as a contractor in sewing and finish- ing ladies' and children's undergarments, sports- wear, and related products. During the year prior to the issuance of the complaint, a representative period, Respondent manufactured, sold, and dis- tributed at its New York and Georgia plants, products valued in excess of $50,000 which were shipped from these plants in interstate commerce to locations in other states. It is conceded, and I find, that Respondent has been at all times material herein an employer engaged in commerce within the meaning of the Act. II. THE LABOR ORGANIZATION INVOLVED Undergarment and Negligee Workers' Union, Local 62, International Ladies' Garment Workers' Union, AFL-CIO, is a labor organization within the meaning of Section 2(5) of the Act. III. THE ALLEGED UNFAIR LABOR PRACTICES A. The Facts 1. The multiemployer history of bargaining Allied Underwear Association, Inc., hereinafter referred to as Allied, was formed in 1933 for the purpose, among others, of making and carrying out collective-bargaining agreements with unions on behalf of its members.3 Its bylaws provide that any person, firm, or corporation engaged in the manu- facture and sale of women's and children's un- derwear shall be eligible for membership' The management of Allied is vested in a 21-member board of directors, officers selected by the board, and an executive director. For at least the past 20 years, Allied has had 100 members or more. Mem- bers of Allied are required to pay dues and to remain in good standing. Under its bylaws resigna- tions are permitted at any time, provided that a resignation is not to be acted upon or become ef- fective until all dues and other obligations owing Allied have been paid in full. In applying for mem- bership a standard application blank is signed by each prospective member containing the following: I-We further agree to be bound by and comply with any agreement now existing and any modifications or renewals thereof and any new agreements that may be entered into between the Allied Underwear Association, Inc., and the International Ladies' Garment Workers' Union or any of its locals. At the time a new member joins the Allied, the as- sociation notifies Local 62 and usually obtains for Local 62, from the new members, a signed cer- tificate of authorization and assumption. In it the new member certifies that he is a member of Allied, authorizes Allied to enter into the existing agree- ment between Local 62 and Allied, agrees to be bound by the terms of that agreement, and agrees to be bound by any amendments thereto which may be entered into between Local 62 and Allied. For at least 20 years, Allied has negotiated con- secutive collective-bargaining agreements with Lo- cals 62 and 10 of the International Ladies' Garment Workers' Union. These agreements have covered all workers employed by the members of Allied in connection with any and all operations in the process of manufacturing and all workers aiding in the processes of manufacturing, including all graders, shipping clerks, assistant shipping clerks, and all employees who perform work in connection 2 The complaint designates U S Lingerie Corporation and U S Lingerie Corporation, Debtor in Possession , as Respondent These are not separate coexisting entities, but represent alternative designations of a single entity reflecting its special status during the proceeding brought under chapter X1 of the Bankruptcy Act See Paul Stevens, Receiver of Carolina Scenic Stages, a Corporation et al, 109 NLRB 86, 11 USC Secs 742, 743 The term Respondent will be used herein to refer to U S. Lingerie Corporation and to U S Lingerie Corporation, Debtor in Possession, without distinc- tion , as the time of the events will make clear whether the reference is to the period before or after U.S Lingerie Corporation became debtor in pos- session. ' Unless otherwise indicated, the facts found herein are based on sub- stantially uncontradicted testimony which I have credited 4 Jacob Rosenbaum, executive director of Allied, testified that Allied does not have contractors among its members. Matthew Schoenwald, manager of Local 62, testified that most of the members of Allied were manufacturers, but that some were both manufacturers and contractors and others were exclusively contractors Schoenwald named several em- ployers in Allied who fell in the latter categories He explained that histori- cally as some manufacturers had shifted from manufacturing to contracting or to a combination of both, they had remained members of Allied and had continued to operate pursuant to the contract between Allied and Local 62 Schoenwald also testified that most contractors are not members of Al- lied but belong to a separate contractors' association which has a separate agreement with Local 62, the terms of which are the same as those of the agreement between Allied and Local 62. There are approximately 130 members in the contractors' association Those contractors who have remained in Allied have not become members of the contractors' associa- tion The record indicates that the work performed by employees of manu- facturers and contracors is substantially the same. Not all contractors cut material while manufacturers usually do Contractors, unlike manufac- turers, do not style and sell garments to customers, but otherwise perform all or most of the operations that manufacturers perform 5In addition, Allied informs Local 62 whenever a member withdraws and from time to time at Local 62's request forwards to it an up-to-date list of its members 350-999 0 - 71 - 49 754 DECISIONS OF NATIONAL LABOR RELATIONS BOARD with receiving, assorting, packing, and order picking, but excluding porters and errand boys.' In practice, for some time, representatives of two other employer associations, the Lingerie Manufac- turers Association and the Negligee Manufacturers Association, have participated in the negotiations between Allied and the two locals, arriving at separate, but similar, agreements with them. At the conclusion of periodic contract negotia- tions with Allied, Local 62 usually has asked Allied to obtain certificates of authorization and assump- tion from all memberslof the association pertaining specifically to the period of the new agreement. However, whether or not a member signs such a certificate, Allied and the Locals administer the agreement for all members and their employees.' Respondent joined Allied in November 1959.' At that time Respondent, by its president, Arnold Swee, signed a membership application and a cer- tificate of authorization and assumption relating to the contract between the association and Local 62 then in effect. In 1963, when a new agreement was negotiated to run from July 1, 1963, to June 30, 1966, Swee was a member of the Board of Directors of Allied and was a backup man on its negotiating committee. However, he did not par- ticipate in any bargaining sessions. After these negotiations were completed, on August 9, 1963, Swee wrote to Allied stating that Respondent was terminating its membership as of that date. Allied sent notice of Respondent's withdrawal to Local 62, and sometime thereafter Ramirez, a representa- tive of Local 62, visited Swee. Ramirez pointed out to him that under the contract he would have to post 2 weeks' wages as security if he were not a member of Allied and indicated that Swee would have trouble if he did not belong to the association. Thereafter, Swee, on September 9, 1963, notified Allied that it should disregard his letter of resigna- tion and reinstate Respondent as a member. On March 16, 1964, Swee signed a certificate of authorization and assumption relating to the 1963-1966 contract. Thereafter, Respondent remained a member of Allied until the events here involved. 2. The 1966 negotiations between Local 62 and the association On March 28, 1966, Matthew Schoenwald, manager of Local 62, sent a letter to Allied on be- half of Locals 62 and 10 notifying the association that the collective-bargaining • agreement was scheduled to expire on June 30, 1966,9 that the unions desired various modifications, and that they requested a date for a conference to begin negotia- tions. On March 30 the directors of the Allied selected a bargaining committee, and a meeting between the unions and the association committee was scheduled and took place on April 18, 1966".1o At this meeting Schoenwald and Falikman, manager of Local 10, presented Allied with' the unions' demands, and they were discussed by the parties. Most, if not all, of the unions' demands were rejected at this time. On April 22, Rosenbaum, executive director of Allied, sent identical letters to all members of the Allied informing them that the first conference between the unions and the association bargaining committee had been held and that the unions had presented their demands. A copy of the demands was enclosed. The letter also informed the mem- bers that negotiations would continue during the next few weeks and that it was expected that there would be a meeting of the members of Allied in the near future to report on the negotiations." The second meeting between Allied and unions was held on May 4. At this meeting the association presented its proposals for changes in the contract. Both sets of proposals were discussed with few, if any, agreements reached. Further negotiating meetings were held on May 10, 16, 19 and June 2, 6, 10, 17, and 22. At the June 22 meeting, agreement was reached on the terms of a new collective-bargaining agreement, and negotiations were concluded, although it remained for the terms of the agreement to be reduced to writing and contract language to be agreed upon. On June 22, a meeting of the mem- bers of Allied was held at which the terms of the agreement were ratified. The agreement was 6 While not named specifically as exclusions from the contract coverage, watchmen, guards, and supervisors have not been covered by the agree- ment. Local 10 represents cutters employed by the members of Allied and Local 62 represents the remaining employees covered by the agreements ' Agreements between Allied and the Locals have typically provided that each member of the association may be required to sign such a certificate at the option of the unions Following the execution of the 1963 agreement, 73 out of the 105 members of the Association signed such certificates 8 From 1956 to 1959 Respondent operated under a separate contract with Local 62 s The contract contained no automatic renewal clause or other provision with respect to negotiation of a successor agreement 10 The Lingerie and Negligee Associations also participated in the negotiations as they had in the past 11 Rosenbaum testified that he did not personally mail the letters, but that U S Lingerie was considered a member of the association at this time and that the association had a carefully devised system for the purpose of making mailings to all members Although his later testimony might be construed as indicating that he personally prepared the letters for mailing, I do not so construe it in the light of his testimony otherwise as to the assistance given him in association affairs by its secretary Swee testified that he did not recall receiving this letter and that he did not become aware negotiations had started until May 11, 1966 U.S. LINGERIE CORPORATION thereafter reduced to writing and was signed on August 9, 1966.12 3. Respondent's condition in early 1966 On or about January 28, 1966, Respondent filed its petition for an arrangement pursuant to chapter XI of the Bankruptcy Act. Thereafter , a committee of five of Respondent's principal creditors'3 was established, and Respondent was permitted to con- tinue to operate its business as Debtor in Possession while a plan of arrangement was worked out. Shortly after Respondent filed its petition, Maflo Holding Corp., Respondent's landlord, to whom Respondent owed back rent, brought an action to evict Respondent from its premises.14 The eviction action was stayed by action of the bankruptcy court, and Respondent continued to occupy the premises while the stay was in effect." In February 1966, Respondent, which had previ- ously operated only as a manufacturer, began to seek work as a contractor, and thereafter until it closed its New York factory, Respondent operated either as a manufacturer or a contractor or both. In February; Respondent began to investigate various possibilities for improving its business con- dition. In early February, its president, Arnold Swee, met with Local 62 Manager Schoenwald and one Chernoff, another manufacturer. Chernoff, who had recently settled a matter with Local 62, asked Schoenwald whether the terms of his settle- ment with Local 62 would be satisfied if he were to go into partnership with Swee. Schoenwald stated that a partnership would not satisfy the terms of the settlement, and Chernoff indicated that the partner- ship therefore would be effectively precluded. Dur- ing this meeting Swee mentioned to Schoenwald his desire to obtain work as a contractor and asked Schoenwald if he could get some work for him. Schoenwald attempted to help Respondent get work and instructed his business agents to do likewise, which they did. InMarch or April,'Swee discussed with the credi- tors' committee the possibility of moving away from New York, mentioning that he might enter a part- nership in Puerto Rico or move south. Swee sought permission from the committee to move. The com- mittee took the position that it would not agree to a move until Respondent had confirmed a plan of ar- rangement or in lieu thereof had deposited suffi- cient money in a special account to confirm a plan. OnApril 22,a plan of arrangement was filed in the 12 My findings as to the negotiations between the unions and Allied are based on a composite of the uncontradicted testimony of Rosenbaum and Schoenwald Although both demonstrated some difficulty in recalling specifics as to the events and attendance at the various meetings , there is no reason to doubt the accuracy of their testimony concerning those mat- ters which they did recall 1" Local 62 was one of Respondent's 10 largest creditors, but was not a member of the creditors' committee 11 Respondent 's lease provided for its termination upon the filing of a petition for an arrangement with creditors 755 bankruptcy court, a copy of which was sent to the Union. The plan provided, among other things, upon its confirmation, for payment in full of all pri- ority creditors and for payment to unsecured credi- tors in the amount of 50 percent of their claims in full settlement thereof." On April29, an agreement was entered into between the creditors' committee and Respondent. In it, for the stated purpose of inducing the credi- tors' committee to consider favorably and,recom- mend acceptance of the plan of arrangement and to insure that there would be sufficient funds on hand for confirmation of the plan, Respondent agreed to make deposits in a special account totalling at least $60,000 under terms and conditions set forth. Be- fore signing this agreement, which had been drafted by the attorney for the creditors' committee, Respondent added to it a final paragraph which read as follows: The debtor and debtor in possession may, after having made all the deposits required of its [sic] in paragraph (a), move and relocate its present factory, including, but not limited to, all of its fixtures, equipment and inventory to whatever location the debtor deems in its best interests. The debtor and debtor in possession have the right to accelerate and prepay the deposits required under paragraph (a) and im- mediately upon the date of prepayment, can move and relocate as set forth above. On May 3, the court entered an order approving the agreement and directing the Respondent to comply with it. Copies of this agreement and the order were not served upon Local 62, and it had no notice of them until July 11, 1966. 4. Respondent's attempt to withdraw from Allied During the first week in May, Swee discussed withdrawal from Allied with Hendler, Respondent's attorney in the bankruptcy proceeding. At that time, they examined the 1963-1966 Allied agree- ment to determine whether it contained any provi- sion relating to notice which might be required but found none. On May 11, Hendler called Allied Ex- ecutive Director Rosenbaum to inquire as to how Respondent could resign from the association. Fol- lowing this conversation Hendler told Swee that the negotiations had already commenced and that if he had resigned 3 weeks earlier he probably would have had no trouble with the Union." Following this conversation on the same day, Hendler wrote 1i On several occasions thereafter , Swee discussed with Maflo the possi- bility of Respondent 's continuing to occupy only half of its leased space, but no agreement was reached for such an arrangement 11 The plan also reserved the right of the debtor to reject all executory contracts on or before confirmation At the time of the hearing in this case, the plan had not been judicially confirmed 11 According to Swee, he was not aware that negotiations had begun until this date Swee was not a member of the Board of Directors of Allied nor of its negotiating committee in 1966 However, he knew that in 1963 negotia- tions had started several months before the expiration date of the contract. 756 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Rosenbaum on behalf of the Respondent advising that: In accordance with telephone conversation of today's date, .this is to advise you that we are the attorneys for U.S.- Lingerie Corporation and in view of the fact that the above corpora- tion is operating as a debtor in possession under chapter XI of the Bankruptcy Act pur- suant to a petition filed by it on January 28th, 1966, our client does not intend to continue as a member of your association and withdraws as of the date of the filing of said petition, to wit, January 28th, 1966. On May 12, following receipt of this letter, Rosenbaum wrote Local 62 Manager Schoenwald advising him that Respondent had withdrawn from membership in the association as of January 28, 1966.18 On May 13, at the direction of Schoenwald, Local 62 attorney Elias Lieberman wrote Hendler acknowledging receipt of Rosenbaum's letter and stating: As you undoubtedly know, pursuant to timely notice, negotiations for the renewal of the agreement have been going on between the Union and the Association. We are convinced that the attempt of your client at this time to resign as a member of the said Association as of January 28, 1966, is too late. It is the inten- tion of our client, when the negotiations for the renewal of the agreement are completed and a new agreement is entered into between the Union and the Association, to hold your client bound by the terms of said agreement for the duration thereof. There were no further direct formal communica- tions between Respondent and Local 62 concerning the attempted withdrawal. However, on June 10, Respondent 's attorney moved in the bankruptcy proceeding to disaffirm the contract between the association and unions . On July 29, the court de- nied the motion finding that the 1963-1966 con- tract had expired and that a renewal agreement had not been entered into so that there was no contract then in existence.19 Although Swee testified that he withdrew from Allied in order to leave himself free to follow any one of a number of possibilities he was pursuing for the future continuation of Respondent's business, it is clear from his testimony on cross-examination that only one of the possibilities he was considering would have affected his. willingness to remain in Al- lied. That was the possibility of removal of the plant 'A Respondent was not current in its dues payment to Allied at the time of its attempt to withdraw However, no issue apparently was made by Allied with respect to Respondent's right to withdraw under its bylaws 19 The Court's findings were apparently in accord with the position of Local 62 taken then and in connection with a later motion to disaffirm the 1966-1969 contract that the agreement was not entered into until August 9, 1966, the date of its execution. Whether or not it may be argued that there was an oral agreement as of June 22, 1966, on the basis of the testimony of Rosenbaum and Schoenwald, I find no inconsistency between from New York, which the 1963-1966 agreement would have prohibited. The timing of Respondent's attempt to resign, immediately after it had received permission to move and coinciding with the beginning of Swee's efforts to find a location in Georgia, as set forth below, together with Swee's testimony on cross-examination, supports the con- clusion that Swee sought to withdraw from Allied in order to free Respondent to move away from New York. 5. Respondent's efforts to find,a new location and the move to Georgia In early May, Swee started to explore the possi- bility of relocating his plant in Georgia. On or about May 3, he called a builder in Albany, Geor- gia, and asked him to make a survey of sites in the area where there were buildings and labor availa- ble. Thereafter, Swee made arrangements to visit Georgia and went to Georgia on May 12 to explore for possible sites, returning to New York on or be- fore May 16. After his return Swee called the At- lanta Chamber of Commerce and enlisted its aid in locating a suitable site. Toward the end of May, Swee received a call or a letter from the president of the Chamber of Commerce in Donalsonville, Georgia, inviting him to come to Donalsonville to inspect a site possibility there. On June 8 or 9, Swee again made a trip to Geor- gia. He first went to two other locations and then visited Donalsonville on June 10 and 11. In preparation for his visit, the Donalsonville Chamber of Commerce arranged for the assembly of groups of women interested in employment. They filled out application forms "For employment in sewing plant to be located at Donalsonville, Georgia," and were interviewed by Swee. While in Donalsonville Swee inspected an available building and met with offi- cials of the corporation which controlled it. He presented to them the terms be wanted and sought to persuade them that despite the chapter XI proceeding, Respondent would make a desirable addition to the Donalsonville business community. Swee did not negotiate a lease while in Donalson- ville, nor did he, according to his,testimony, make any decision, to move there until after returning to New York. After his return, sometime between June 16 and 19, Swee decided that Respondent would move to Donalsonville, and by telephone negotiated a lease for the plant he had inspected. During the 3rd or 4th week in June he signed the lease.20 On or about their testimony and the position taken by Local 62 in the bankruptcy proceeding sufficient to "warrant rejection of their testimony as to the negotiations The later motion to disaffirm the 1966-1969 contract had not been disposed of by the court at the time of the hearing herein, and was ap- parently being held in abeyance pending the outcome of this case "The lease was executed by Swee-as an individual doing business as Donny Mills It was stipulated that for purposes of this proceeding Donny Mills and Respondent are the same. U.S. LINGERIE CORPORATION 757 June 20, Swee made arrangements to transport his machinery and equipment to Donalsonville. On June 22, under circumstances set forth below, Respondent released most of its employees, and on June 27, when Local 62 called the few remaining employees out on strike, Respondent terminated its New York operations. On or about July 5, Respon- dent vacated its New York premises and shipped its equipment and machines to Donalsonville. Concurrent with Swee's exploratory trip to Donalsonville, on June 9, 1966, Maflo, Respon- dent's New York landlord, sought vacation of the stay in the bankruptcy proceeding to permit it to proceed with its efforts to evict Respondent from its New York premises. On June 23, the day after Respondent had released most of its employees, a hearing was held on Maflo's motion to vacate the stay, at which time Respondent through its attorney proposed that the matter be settled upon Respon- dent's agreement to vacate the premises on or be- fore July 15. Settlement was reached on this basis, and an order was entered on July 29.21 6. Respondent's communications with Local 62 concerning the move It is conceded that before May 16, there was no mention or discussion between Respondent and Local 62 of any possible move away from New York by Respondent. On May 16 and thereafter, however, Albert Torriani, a business agent for Local 62, made several visits to Respondent's loft, where Torriani spoke with Swee. The testimony of Torriani and Swee as to the content of these con- versations is in conflict , although not to as great an extent as would superficially appear. Neither dis- played a clear recollection as to the details of these conversations, 'although Torriani was more vague than Swee. Apart from establishing the dates of his visits from records he had made at the time, Torri- ani had little independent recollection of the timing of his visits, and he disclaimed ability generally to recall dates of events as well as the content of con- versations. Swee's recollection of dates was equally poor, but he purported to have greater recollection of what he and Torriani said to each other when they met. For the reasons set forth below in con- nection with my specific findings, I have not credited or discredited either of them entirely. On May 16, the day of Swee's return from his first trip to Georgia and only a few days after Respondent sought to withdraw from Allied, Torri- ani visited Swee at Respondent's loft and told him that he had tried to reach him the previous week. Torriani asked Swee why he had resigned and whether he was trying to move out of town. Swee did not reply, and Torriani then told Swee that if he was thinking of moving not to try it because the Union had broken others and it would not take much to break him.22 Swee told Torriani that he had resigned from Allied because he did not know what he was going to do about the continuation of his business and was considering a number of alter- natives, including reducing the size of his opera- tions, renting one half of the loft, moving to a smaller loft, taking in a partner, becoming a con- tractor, or going out of business.23 Swee told Torri- ani that he could not manage under a new agree- ment even if the costs remained the same, and asked if he could get some special consideration until his business came back. Torriani replied that he could not and that Local 62 would hold him to the new agreement . Swee told Torriani that he would not sign the agreement and asked, if Local 62 would let him work on without a contract after the present contract expired. Torriani replied that the chances were that it would not.24 Torriani visited Swee again on June 15, im- mediately after Swee 's return from Donalsonville.25 Torriani asked - Swee if he were going to move south.26 Swee replied that he had never lied to Tor- riani, that he would not do so, and that he would not answer the question.27 Torriani again warned Swee not to try to move, and the two again S' The motion to vacate the stay and the order were not served on Local 62, and there is no indication that Local 62 was represented at the June 23 hearing However , on June 10 , when Respondent sought to disaffirm its contract with Local 62 it also sought to disaffirm its lease with Maflo 22 Swee so testified that Torriani conceded that he might have said something to this effect 24 According to Swee , among the alternatives he mentioned to Torriani he included the possibility of moving the entire operation south or elsewhere and added that this looked like the most likely alternative at the time Torriani denied that Swee mentioned moving south. In view of Swee's testimony that he did not respond when Torriani initially asked him if he were trying to move before his alternatives were discussed, his admitted evasive reply in June when Torriani again inquired as to his intentions, and his concealment of the move from his employees as set forth below, I do not credit Swee's testimony that he told Torriani in May that he was considering a move south and that it looked like the best alternative to explore. 24 Swee so testified although he indicated uncertainty as to whether this portion of the conversation occurred on May 16 or June 15 Torriani was not examined specifically as to this aspect of the conversation , but testified that he sought to encourage Swee to remain in the association and clearly could not recall details of the conversation 25 Torriani 's records also showed that he visited Respondent 's loft on May 27, but neither he nor Swee testified as to their conversation , if any, at that time 2s Tornani testified that this visit was made at Schoenwald 's request because of rumors that Respondent was going to move 2Z Torriani testified that he confronted Swee with the rumors that he was going to move and that Swee convinced him there was no truth in the ru- mor He also testified , however , that Swee said that he would not answer Torriani's question In an affidavit given by Torriani dated June 30, 1966, Torriani stated that when he asked Swee whether he was contemplating a move out of town, Swee replied, "I have never lied to you, Al, and con- sequently , I just will not answer that question " Torriani also stated in the affidavit " I took this as an admission by Mr. Swee that a removal of the fac- tory was a certainty or very nearly so " Torriani testified that the affidavit represented the truth at the time it was given Swee did not mention this exchange in his direct testimony but on cross -examination testified that Torriani , on June 15 , asked him if he was going to move, and that he replied , " Al, I never lied to you and I won 't do it now " According to Swee he also added that he had not made any decision or commitment as yet Despite Torriani 's conclusionary testimony that Swee reassured him on this occasion that he was not going to move, I find that Torriani 's concession that Swee said he would not answer and Torriam 's affidavit substantially corroborate Swee's testimony on cross-examination , which I credit 758 DECISIONS OF NATIONAL LABOR RELATIONS BOARD discussed other alternatives available to Swee, with Swee indicating that he had made no decision or commitment as yeti2S While Torriani was talking to Swee an employee came into the' office and asked Swee if she should look for another job. Swee told her that her place was with Respondent." On June 21, Milagros Resach, the shop chairlady for Local 62, telephoned Torriani and told him that machines were being dismantled. Torriani went to the shop, saw one or two machines being disman- tled, and asked Swee what was- happening. Swee replied that he was going to store the machines. Torriani, who had noticed a sign in the shop bear- ing Jasper, Alabama, on it, asked Swee "Where, in Alabama?" Swee replied that he might sell the machines or store them. After this conversation Torriani told Mrs. Resach "to continue working, that there's no basis for anything as yet, we haven't known of any yet. "30 Apart from what could be ascertained from Tor- riani 's visits to the factory, Local 62 received some additional information to arouse suspicion that Respondent was going to move. At least by late May or early June, Torriani and Schoenwald had heard rumors that Respondent was contemplating a move. Also in- late June,31 a union accountant re- ported upon returning from a visit to the shop that he saw the factory dismantled with many boxes marked for shipment to Jasper, Alabama. pected it to pick up again in a few weeks. Torchia continued to work until June 15, when Swee told her that there was no more work for her and that the other employees were only finishing up what- ever there was. She again asked Swee if he was going out of business. Swee replied that he was not. He told her ,that he was going to put the machines in a warehouse and look for a smaller loft. He added that in 2 or 3 months he might call the girls back to work, but that he did not know what he was going to do . She did not work for Respondent thereafter. A week or two before June 22, employee An- gelina Cantanzaro asked Swee what was going on. He replied that he was not going out of business but that he would take a small loft and ask some of the girls to work for him there. On June 22, Swee called togehter all the opera- tors who were still employed and told them he was going out of business. He then told them that he had three or four places that they could go to get other jobs and gave all those who wanted them slips bearing the names and addresses of other em- ployers with whom they could find work.34 About 25 girls had been working up to that day. All but from, five to nine were laid off and the remainder, including Resach, continued to work for several days more finishing up work in the shop, disman- tling equipment, and packing." 7. Respondent's communications with its employees concerning the move At-some point during the spring, Shop Chairlady Milagros Resach approached Swee and told him that she had heard that he was going out of busi- ness.32 She asked whether it was true. Swee told her that it was not true and then spoke over the loud- speaker system in the shop to all the employees. He told them not to believe any rumors they might hear about the plant closing down. He also told them that if he were going to do anything like that, they would be the first ones to know.33 In May or- early June, Swee approached em- ployee Susan Torchia, an operator in the shop, and suggested that she take a job in another shop until business picked up in a few weeks. She asked Swee if he was going out of business . He replied that he was not but that business was slow and that he ex- $N Although Swee mentioned alternatives other than moving on both May 15 and June 16, to Tornam, there is only scant evidence in the record as to efforts made by Swee to pursue other alternatives in May and June v Torriani testified without contradiction as to the conversation between Swee and the employee, and I credit Torriani in this regard so Only Torriam testified with respect to the June 21 conversation " Schoenwald testified that he received this report on June 24 , and that he had since learned that the- date of June 20, which he assigned to the re- port in an earlier affidavit, was inaccurate as The testimony of employees , which I credit, with respect to communi- cations between them and Swee was either uncontradicted or corroborated by Swee. 's Several employees testified as to this incident Their estimates of the 8. The strike On June 27, Torriani went to the shop, saw that only five girls were working and that they were closing up. Torriani told Swee that the situation was serious and again told Swee not to move out of town. He immediately called Schoenwald, and Schoenwald instructed him to call a strike. The remaining employees immediately went out on strike. The strikers picketed in front of the premises carrying signs which stated that the workers of U.S. Lingerie were on strike for a union- contract. The signs bore the name of Local 62.36 The strike con- tinued for a little more than a week until all Respondent's property was removed from the premises. Local 62 did not learn for some time thereafter the exact location to which Respondent had moved. No direct notice was ever given by any representative of Respondent to the Union that it time of its occurrence varied Resach testified that it occurred in mid-May, but also testified she had heard rumors that the Company was going out of business in March or April. Most of the other witnesses placed it in March or April The testimony is not sufficiently definite to place the time of this incident with any exactness However , it would appear that it occurred sometime in March or April "Swee did not tell them that he was transferring his operations elsewhere. as Angelina Cantanzaro finished her remaining work on June 23 At that time Swee told her to speak to Saul Raher , a salesman , who referred her to another job on which she started work the following Monday - "The only evidence as to the wording of the signs was Swee's uncon- tradicted testimony U.S. LINGERIE CORPORATION 759 contemplated moving or had in fact moved to Geor- gia.37 9. The Georgia operations During the last week in July, Respondent began to hire employees for its Georgia operations. In Georgia Respondent has operated exclusively as a contractor performing sewing and finishing opera- tions for other manufacturers on lingerie, sports- wear, shifts, dusters, and dresses. With the excep- tion of cutters, the categories of employees em- ployed by Respondent in Georgia have remained the same as those employed in New York.38 In Georgia, unlike New York, because of limited skills, some of the operators have been confined to a single specific operation and in some instances these operations have involved the sewing of gar- ments not previously made in New York. Other- wise, however, the operations in Georgia are essen- tially the same as those in New York. B. Conclusions 1. The contentions of the parties The General Counsel contends that Respondent has violated its _ bargaining obligation in two respects. First, the General Counsel contends that Respondent's withdrawal from multiemployer bar- gaining was untimely and that Respondent is there- fore bound by the results of the 1966 negotiation between Allied and Locals 62 and 10. Secondly, the General Counsel contends that Respondent further independently violated its bargaining obliga- tion by - relocating its operations without giving Local 62 notice of the move and an opportunity to bargain with it with respect to the move. Respondent contends that neither of the alleged violations has been established. As for the alleged unlawful withdrawal from multiemployer bargain- ing, Respondent contends that Local 62 abandoned multiemployer bargaining by its strike on June 27, that Local 62 by contract waived its right to contest Respondent's withdrawal from Allied, and that the withdrawal was, in any event, at an appropriate time because of unusual circumstances. As for the alleged refusal to bargain over the removal of its plant, Respondent contends that the Union waived bargaining over removal, that the' Union, in fact, had adequate notice of the removal, and that the Union made no attempt to bring the employer to the bargaining table. In addition, the Respondent asserts as affirmative defenses (1) that the unit al- leged in the complaint is not appropriate for collec- tive bargaining; (2) that a majority of the em- ployees at the Donalsonville plant have not selected Local 62 or any other labor organization as their representative; (3) that because of the pendency of the bankruptcy proceeding, the Board should not exercise jurisdiction to decide this case; (4) that because of certain provisions of the agreements between Local 62 and Allied, which allegedly vio- late the Sherman Anti-Trust Law, the relief requested by the General Counsel would further conditions and practices violative of that Act; and (5) that the agreement relied on is contrary to the National Labor Relations Act, unenforcable, and contrary to public policy. At the outset it may be observed that the major issues in this case and the facts are similar in a number of respects to the issues and facts in Spun- Jee Corp. and The James Textile Corp., 152 NLRB 943, which involved the attempted withdrawal of another employer from Allied during the negotia- tion of the 1963-1966 agreement and its removal from New York. As will be set forth below, the Board's decision in that case appears to be disposi- tive of a number of the issues raised herein or at the very least furnishes persuasive guidance for the decision reached herein. 2. Respondent's withdrawal from the multiemployer unit In Retail Associates Inc., 120 NLRB 388, the Board set forth rules governing withdrawal from multiemployer bargaining applicable to employers and unions alike, to which it has since adhered. s In its decision, the Board stated: We would accordingly refuse to permit the withdrawal of an employer or a union from a duly established multiemployer bargaining unit, except upon adequate written notice given prior to the date set by the contract for modification, or to the agreed-upon date to begin the multiemployer negotiations. Where actual bargaining negotiations based on the ex- isting multiemployer unit have begun, we would not permit, except on mutual consent, an abandonment of the unit on which each side has committed itself to the other, absent unusual circumstances. 120 NLRB at 395. Although the contract in this case contained no date agreed upon in advance for commencement of multiemployer bargaining, the parties agreed in March or early April to begin negotiations, and at the time of Respondent's attempted withdrawal 37 Swee testified that during the strike he told Torriam that he was mov- ing and that he had not previously informed him of this as a fact. He also conceded that he never discussed moving the plant with Schoenwald be- fore June 27, and there is no evidence that he did so thereafter Cora Riley, an employee, testified that while she was picketing the plant she might have talked to Swee about his going south It is clear that the Union received no definite notice that Respondent was moving rather than closing down until after the strike had started 38 On those occasions when Respondent has had cutting operations to perform in Georgia, Swee has done the cutting 3' Sheridan Creations Ind , 148 NLRB 1503, enfd 357 F 2d 245 (C.A 2), cert denied 385 U S 1005 , Spun -Jee Corp. and The James Textile Corp , supra, The Evening Neu s Association , etc , 154 NLRB 1494, enfd. 372 F 2d 569 (C A. 6) 760 DECISIONS OF NATIONAL LABOR RELATIONS BOARD from Allied, negotiations had in fact commenced and proposals had been exchanged. When informed of Respondent's withdrawal from,the Association, Local 62 promptly objected, and it is clear that Local 62 did not consent to Respondent's withdrawal from multiemployer bargaining. Thus, it would appear that Respondent's withdrawal was untimely, unless the reasons advanced by Respon- dent are sufficient to excuse it from meeting the normal requirements for timely withdrawal. With respect to the strike, it is true that the legend on the picket signs carried by the strikers in- dicated that the strike was to obtain a union con- tract. However, unlike the cases relied upon by Respondent,4B here there is no evidence that Local 62 sought separate negotiations or a separate agree- ment from Respondent, and there is no reason to regard the contract referred to on the picket signs as different from the - Allied contract. Although Local 62 did not strike against other association members, none of the other members similarly had rejected association bargaining or the results thereof. As Respondent had taken the position that it would not consider itself bound by association bargaining, the strike was not-inconsistent with,41 or an abandonment of, Local 62's position that the withdrawal was untimely.42 Respondent points to section 28 of the 1963-1966 agreement between the association and Locals 62 and 10 to establish that Local 62 had waived any objection to Respondent's withdrawal from the multiemployer bargaining at any time. As multiemployer bargaining is consensual, and the Board permits withdrawal after negotiations have begun upon mutual consent, it would appear that an agreement to permit withdrawal at any time would be a valid defense if established. Respondent relies in this connection on paragraph 28 of the 1963-1966 agreement which provides as follows: 28. All members of the Association at the time of the execution of this agreement and persons, firms and corporations becoming members thereof subsequent to the execution of this agreement , shall be and continue to remain personally and individually liable under this agreement during the term thereof, irrespec- tive of whether said member shall cease to be a member of this Association prior to the date set for the expiration of said contract, and his liability shall be deemed to have survived the termination of such membership and remain in full force and effect during the full term thereof, with the same force and effect as if this agreement has been signed individually by each member of the Association except that such member shall pay the fee of the Impartial Chairman in cases of arbitration. - In the event a member of the Association shall cease being a member of the Association during the term of this agreement , or as same may be extended or renewed during his mem- bership, upon the request of the Union, such member shall immediately deposit and main- tain with the Union as partial security for the faithful performance of this agreement as herein provided, a sum equal to two (2) weeks' pay for his employees, which sum may be used by the Union to reimburse it for any damages to it or any employees involved caused by a violation of this agreement on the part of-the employer, and also to reimburse the cost to it for investigation of any claimed violation .... Clearly, this paragraph contemplates withdrawal from Allied by members during the term of the agreement and provides for the applicability of the current agreement to the operations of members for the duration of its term and for the method of contract'administration after withdrawal. However, nothing in its provisions relates to the conditions under which withdrawal may be -permitted or- to the effect of untimely -withdrawal. Since the Board's rules clearly permit withdrawal from an association- wide unit-only at appropriate times, one may con- clude as readily that these provisions were intended to govern only the effect of timely withdrawals as that they were intended to permit withdrawal at any time from association bargaining. Accordingly, I find no clear and unmistakable waiver of the right to object to untimely withdrawal from multiem. ployer bargaining in the above-quoted contract provision.43 Respondent enumerates a number of circum- stances which it contends amount to "unusual cir- cumstances" within the meaning- of the quoted por- tion from Retail Associates set forth above and ex- cused the untimeliness of its withdrawal. 'The parties have cited, and I have found, no decisions which construe the quoted phrase as broadly as Respondent urges. However, the other exception contained in the rule, set forth in Retail Associates, which permits withdrawal upon mutual consent of the parties, other decisions permitting withdrawal 40 Neville Foundry Company, Inc, 122 NLRB 1187; Ice Cream, Frozen Custard Industry Employees, Local 717, 145 NLRB 865, C & M Construc- tion Ca , 147 NLRB 843 In the latter case also, unlike this case, the union did not object to withdrawal but simply asked for written confirmation of it a Respondent argues that because the agreement negotiated by Allied with Local 62 on June 22 contained a no-strike provision, the strike was in- consistent with the Union's position that Respondent was bound by that agreement However, unless the untimeliness of Respondent's withdrawal was otherwise excused, Respondent cannot rely on the no-strike provision of the agreement to relieve it of its obligation to accept the results of the multiemployer bargaining , as its conduct which Local 62 protested amounted to a repudiation of its bargaining obligation and the agreement 42 See Spun-Jee Corp and The James Textile Corp , supra, where identical conduct was before the Board under substantially similar circumstances Although the wording of the picket signs is not set forth in'the decision in that case, it is clear from the briefs of the Board and the respondent therein to the United States Court of Appeals for the Second Circuit that the signs were identical for practical purposes " See N L R B v Perkins Machine Co , 326 F,2d 488 (C A I), and cases cited therein U.S. LINGERIE CORPORATION 761 after commencement of negotiations'44 and more recent restatements of the rules governing withdrawal,45 suggest that the Board may have in- tended to provide by this exception for circum- stances where there has been no actual consent but a union's conduct with respect to withdrawal has been such that the union is estopped from object- ing. Most of the circumstances cited by Respondent do not relate to acquiescence or estoppel and those which do have been considered above and found insufficient to support Respondent's contention. In any event, I am not persuaded that separately or together the circumstances on which Respon- dent relies justify its untimely withdrawal, although some of them are clearly relevant to the remedy to be required if a violation is found. A number of the circumstances relied upon re- late to Respondent's relationship with Allied" and may well reflect the usual circumstances rather than unusual circumstances in this relationship. As a former member of the Board of Directors of Al- lied, Swee not only knew the manner in which Al- lied bargained, but also that negotiations had in the past commenced several months before actual con- tract expiration 47 Although Respondent contends that it did not authorize Allied to bargain for it with respect to a new agreement, this contention begs the question to be answered herein, for Respon- dent, in its application for membership, had authorized Allied to negotiate new agreements on its behalf as long as it remained a member, and the question ultimately to be answered is whether Respondent's attempt to withdraw that authoriza- tion was timely with respect to the 1966 negotia- tlons.48 Respondent's change in status from a manufac- turer to a contractor was no different from changes in status of other members of Allied who had nonetheless remained members of Allied and con- tinued to operate under the Allied contract. The fact that Respondent had filed a bankruptcy proceeding and was confronted with difficult economic problems also cannot be deemed unusual circumstances in this case. The bankruptcy proceeding was commenced 2 months before the unions' notice to Allied, and Respondent's economic difficulties clearly existed at that time, Moreover, its notice to withdraw from Allied, as found above, stemmed from Respondent's desire to relocate away from New York and not from any requirement of Respondent's creditors. To the con- trary, the evicence shows that Swee raised the matter of relocating with the creditors, sought their permission to move, and received it only after giv- ing assurances, through the deposit of sums adequate to protect their interests, that the credi- tors would be protected before Respondent moved from New York. Respondent also contends that the withdrawal was not used as a bargaining wedge and that the stability of the unit could not have been affected because of the relative, insignificance of Respon- dent, particularily in its weakened state, to Allied. However, as I read the Board's decisions, I con- clude that it has established definite rules concern- ing withdrawal from multiemployer and has eschewed consideration on a case-by-case basis of the effect of individual withdrawals on multiem- ployer bargaining.49 Accordingly, I reject Respondent's contention that there are unusual circumstances present in this case which warrant an exception to the Board's rules relating to withdrawal from multiemployer bargaining. 3. The alleged refusal to bargain over relocation of Respondent's plant The General Counsel contends that Respondent failed to give notice to Local 62 and to give it an opportunity to bargain over the decision to move and the effects of the move on Respondent's em- ployees. Respondent contends that itmet whatever obligation to bargain it may have had. Under Board decisions, Respondent was obligated to give notice to the Union before its decision was made and to bargain upon the request both over the decision to move from New York and the effects of relocation upon its employees.50 Here Respondent considered several alternatives for the continuation of its business including relocation. As early as late March or April Swee broached the subject of a move to the creditors' committee and by early May had approval to move conditioned upon the deposit of a sum sufficient to confirm a plan of arrangement with the creditors. Con- 44 Neville Foundry Company, Inc , 122 NLRB 1187, Scougal Rubber Mfg Co Inc, et al, 126 NLRB 470 4' C & M Construction Co , supra; Sheridan Creations, Inc , supra, Spun- Jee Corp and The James Textile Corp , supra 46 These are Respondent's lack of participation in the negotiations, the absence of most members of the association from the negotiations, lack of notice of negotiations by Local 62 or Allied to its members before the start of negotiations, lack of knowledge of the negotiations by Respondent until the day it attempted to withdraw, and the fact that two other associations joined with Allied in bargaining with the unions 47 Although Swee testified that at one time he received notice of monthly meetings and was reminded by telephone when he failed to respond to the notices, it is clear from his testimony and from that of Rosenbaum that he was referring to the period when he was a member of the Board of Directors which, unlike the membership, had monthly luncheon meetings There is no evidence that Swee, as a member, was treated differently by Al- lied than other members 4' Respondent's related reliance on the fact that it had not signed a cer- tificate of authorization and assumption with respect to the 1966-1969 agreement also does not advance its cause A signed certificate was not a requisite to coverage by the agreement See Spun-Jee Corp., and The Janies Textile Corp., supra 49 See N.L R B v Sheridan Creations, Inc , 357 F 2d 245 (C A 2), cert denied 385U5 1005 sa Spun-Jee Corp and The Jantes Textile Corp, supra, Standard Hand- kerchief Co , Inc , 151 NLRB 15; Garvin Corporation, et a! , 153 NLRB 664, enfd as modified 374 F 2d 275 (C A.D C ) cert denied 387 U.S 942, Purolator Products, Inc , 160 NLRB 80 762 DECISIONS OF NATIONAL LABOR RELATIONS BOARD cededly, throughout the period that Swee discussed the possibility of a move with the creditors' com- mittee he did not communicate with Local 62 about the matter . Nor did Swee take any initiative to notify Local 62 of his intentions ' later when he made trips to Georgia in May and June and then entered into a lease for the Georgia plant. It is true that when Torriani visited Respondent 's shop in May and June, Swee told Torriani he was consider- ing several alternatives including the possibility of going out of business. Also in response to Torriani's question whether Swee intended to move, Swee, in May, did not answer and on June 15, by his evasive reply, gave Torriani reason to believe that Swee was preparing to move. But on both of these occa- sions Swee also indicated to Torriani that he had not yet decided what to do, and on June 21, when Torriani asked Swee about the dismantled machines in the shop, Swee replied that he might sell them or store them. During the period that the move was under con- sideration and after the decision to move was made, Swee also did not disclose his intentions to the em- ployees and the shop chairlady. Instead, until June 22, when he told the employees the plant was clos- ing, he led them to believe that his operations would continue in New York, although probably on a smaller scale. On June 22, when Swee announced the shutdown of the New York operations to the employees, he concealed from them that he was relocating in Georgia and told them falsely that he was going out of business. I conclude that Respondent did not give requisite notice to Local 62 in this case, but to the contrary. evaded questions about moving and misrepresented its plans even after the decision had been made. Yet the question remains whether, as Respondent contends, the information which came to Local 62 during May and June was such that Local 62 had actual notice that Respondent intended to move its plant and was obligated to come forward and request bargaining if it desired to bargain over the move.51 I conclude that it was not. While I have found that Swee's response to Torriani may have war- ranted an inference that removal of the factory was a certainty or very nearly so, as Torriani stated in an affidavit, it does not follow that Swee's respon- ses to Torriani's questions or other indications received by Local 62 were sufficient, in the context of the other evidence, to put Local 62 on notice of Respondent's intentions so that it should have sought bargaining if it wished to hold Respondent to its bargaining obligation. Respondent chose not to disclose its intentions directly to Local 62 but rather to evade the issue of the impending move. As late as June 21, Swee 'replied falsely to Torriani and he consistently sought to mask Respondent's intentions by misrepresentations to its employees. It is true that Torriani indicated that Local 62 would expend every effort to block or hamper a move, and' obviously its principal desire was to keep Respondent from moving. However, it does not fol- low that if Swee had forthrightly disclosed his inten- tions before completing his plans to move, Local 62 would have intransigently adhered to its position and Schoenwald would not have sought discussions with Swee. Although there was, to be certain, a strong possibility that Local 62 would have insisted on the full measure of its contractual claim without seeking further bargaining, it was Respondent's failure to fulfill its obligation which makes' it im- possible to know what would have ensued if Respondent had given forthright notice of its' inten= tions. Absent fulfillment of that obligation by Respondent, I conclude that Local 62' was not obliged to seek bargaining over the move it inferred was likely but which Respondent sought to conceal. In this respect I conclude once again that the facts in this case are closer to those in Spun-Jee Corp. and The James Textile Corp., supra, than to those in the cases on which Respondent relies.52 Respondent also contends that Local 62 had waived its rights to bargain over the effects of the move because the contract contained provisions covering pensions and severance payments. How- ever, the provisions of the expiring contract provide only for contributions to a retirement benefits fund and to a supplementary unemployment-severance benefits fund, and the record does not indicate to what extent, if any, these funds were intended to provide benefits for employees whose jobs were lost as a result of relocation. I conclude on the evidence before me that there is insufficient evidence of a clear and unmistakable waiver of Local 62's right to bargain over the effects of relocation. 51 In this connection the General Counsel relies on the provision of the Allied contract which named Schoenwald as the sole agent of Local 62 authorized to deal with employers and stated that no other person was to be deemed an agent unless so designated by the Union The General Counsel contends that because of this provision only notice given directly to Schoenwald could have been effective While this provision may have required that Respondent negotiate only with Schoenwald or a properly designated agent, it does not overcome ordinary rules of agency for pur- poses of deciding whether Local 62 had adequate notice of Respondent's intentions Torriani was a business agent of Local 62 who regularly visited Respondent's shop for the purpose of seeing that the contract was enforced and to adjust disputes and prices in the shops he serviced In June, and probably also in May, he was specifically sent by Schoenwald to investigate Respondent 's intentions Whatever he may have discovered on these visits cannot be disclaimed on the ground that Torriani rather than Schoenwald visited the shop and spoke to Swee. 52 In Motoresearch Company, et al, 138 NLRB 1490, Montgomery Ward & Co, 137 NLRB 418, Hartmann Luggage Co, 145 NLRB 1572, and Hum- ble Oil & Refining Co, 161 NLRB 714, there was either direct advance notice of the employer's intentions or ready advance admission of them upon inquiry In Central Riifina, 161 NLRB 696, there were circumstances not present here, including a total inability to operate without subcontract- ing and a past practice with which the employer's conduct was consistent U.S. LINGERIE CORPORATION 4. Respondent's affirmative defenses In its first affirmative defense Respondent con- tends that the unit alleged in the complaint is inap- propriate. That unit with minor variation is the same as that set forth in the recent agreements between Allied and Locals 62 and 10. At the hear- ing, in support of its first affirmative defense, Respondent argued that the unit is inappropriate because porters and errand boys who are excluded from it have a community of interest with other em- ployees in the unit, and because the contract unit does not specifically exclude guards and super- visors. No evidence was introduced with respect to porters and errand boys. Although a unit which in- cluded them might also be appropriate, I find no reason to reject as appropriate a unit excluding them for which there has been a substantial suc- cessful bargaining history.53 While the contract unit description does not specifically exclude watchmen, guards, and supervisors as defined in the Act, there is no evidence that these categories ever have been included in it. In the light of the extensive history of bargaining between Allied and the unions, I find that the unit alleged in the complaint is an ap- propriate unit for purposes of collective bargaining. Respondent's second affirmative defense is that Local 62 lacks a majority among Respondent's em- ployees at its Georgia plant. However, the only question of majority material to determining whether Respondent violated the Act is whether at the time of the alleged violations Local 62 was the statutory representative of Respondent's employees at its New York operations. The record leaves no room for doubt that it was. Respondent's third defense, as amended at the hearing, is that by virtue of the bankruptcy proceedings Respondent "is not obligated to adhere to or acknowledge the agreement entered into between the Association and the Union in August 1966 and has otherwise discharged its obligation under Section 8(a)(5)." In amplification of this defense Respondent contended that the Board should defer to the court handling the bankruptcy proceeding in this matter. It is well settled that the filing and pendency of the bankruptcy proceedings do not relieve the Board of jurisdiction to determine whether unfair labor practices have been committed and if so to order them remedied. Moreover, institution of ban- kruptcy proceedings does not extinguish preexisting bargaining obligations. thus, whatever obligation U.S. Lingerie Corporation had to bargain with the Ss Although the unit described in the Allied contracts did not specifically exclude porters and errand boys until 1960, they were in fact always ex- cluded from the unit 54 Although Respondent also set forth a number of other contract provi- sions in its bill of particulars in support of this defense , during argument at the hearing on a motion to strike its affirmative defenses Respondent deferred argument with respect to the other provisions for its brief Its brief contains no amplification of its contentions with respect to the alleged 763 Union before the chapter XI proceeding was filed, the debtor in possession assumed when it operated Respondent's business. Although it is argued that the Board should defer to the court, there is only one matter which appears to be before both the Board and the court. That is whether Respondent should be considered bound by the 1966-1969 Allied agreement . In this proceeding the General Counsel and the_ Charging Party seek to have the Board order Respondent to abide by the contract as a matter of remedy for the unfair labor practices charged. In the bankruptcy proceeding Respondent has petitioned the court to disaffirm that agreement. In view of my recommen- dation below as to remedy I find it unnecessary to decide this issue. Respondent's fourth defense is that Allied and Local 62 have at all times been parties to an agree- ment which violates the Sherman Anti-Trust Act so that the relief requested by the General Counsel would further practices and conditions in violation of that Act. Respondent relies on paragraph 34 of the 1963-1966 contract which provides as fol- lows:54 The Union agrees that it will enter into no con- tract with any individual or association in the City of New York containing terms more favorable to Employers than herein contained, except that the percentage of increase to pieceworkers may be less in any other collec- tive agreements. The above-quoted provision, referred to by the parties to the contract as the "favored nations" clause, has been in agreements between Allied and the unions for a number of years. In the 1966 negotiations the Union proposed, and Allied agreed to, deletion of this clause. Allied Executive Director Rosenbaum testified that during the negotiations, in requesting deletion of this clause, the union's attorney referred to the Pennington" decision "that did bring to our attention the legality of that." Although Respondent appears to contend that the inclusion of this clause in the agreement per se establishes a violation of the Sherman Act, I do not so construe the Pennington decision.56 Nothing in the Union's request for deletion of this clause or its reasons therefor constitutes a concession or admis- sion that the clause was illegal. At most it con- stitutes a concession that the Pennington decision raised a question as to the legality of this clause. Accordingly, I conclude that the evidence does not establish that the 1963-1966 agreement violated Sherman Act violation In these circumstances I have concluded that Respondent does not seriously urge that any but the quoted paragraph in the 1963-1966 agreement violates the Sherman Act In any event, after ex- amination of paragraphs cited by Respondent , I detect no violation in them. 55 United Mine Workers v Pennington et al , 381 U S 657 se See James Pennington v John L Lett is, 257 F Supp 815, 826-829 (E D Tenn ) 764 DECISIONS OF NATIONAL LABOR RELATIONS BOARD the Sherman Act and find it unnecessary to con- sider further other arguments advanced with respect to this defense. - Respondent's final affirmative defense is that the agreement between Allied and the unions is contra- ry to the Act, unenforceable, and contrary to public policy. In argument at the hearing Respondent stated that its fifth defense was a corollary of its forth defense, and it has advanced no further argu- ment in its- brief to indicate any separate basis for its fifth affirmative defense. However its bill of par- ticulars sets forth other provisions of the agreement in support of this defense. To the extent that this defense is dependent upon the fourth defense there is no need to consider it further. To the extent the Respondent separately relies on the contract provi- sions set forth in its bill of particulars, I find no merit in it. IV. THE REMEDY Having found that Respondent violated Section 8(a)(5) and ( 1) of the Act I shall recommend that Respondent cease and desist therefrom and take certain affirmative action designed to effectuate the policies of the Act. In fashioning the affirmative order it is necessary to bear in mind as in Spun -Jee, supra, "that the remedy should be adapted to the situation that calls for redress , with a view toward restoring the situa- tion as nearly as possible to that which would have obtained but for the unfair labor practices." In Spun-Jee the Board concluded that practical considerations warranted refraining from ordering the employer to resume its New York operations, to adhere to the multiemployer agreement, and to reinstate the terminated employees at the reestablished operations . There the practical con- siderations were "the nature of Respondent's general business operations , the record's indication of economic obstacles confronting Respondent's enterprise , and the possible impracticability of any attempt to reinstitute the former operations" In this case the .practical considerations militat- ing against such an order are substantial. Respond- ent faced serious financial problems in the opera- tion of its business in the first half of 1966. Although it is true that Respondent filed the peti- tion for an arrangement pursuant to chapter XI of the Bankruptcy Act, the record discloses no reason to believe that Respondent instituted that proceed- ing to evade its bargaining obligation . All indica- tions are to the contrary that it did so because it could not meet other obligations . Respondent was also faced during the period - with the possible loss of the loft in which it operated . Maflo, Re- spondent's landlord,, had sought to evict Respond- ent from the loft shortly after the chapter XI proceeding was started, as it appears it was en- titled to do under the terms of its lease with Re- spondent. Although Respondent ultimately sought disavowal of its lease and left the premises as the result of a compromise with Maflo, there is no reason to conclude that if Respondent had continued to resist eviction, it would have been permitted to remain in the premises until the nor- mal expiration of its lease. As Swee indicated in his testimony and as one would normally expect,, Respondent's financial difficulties made it difficult to find a location where Respondent would be ac- cepted as a tenant. 57 In my view, the- practical con- siderations in this case operate with even greater strength than in Spun-Jee to support a similar result. Accordingly, as the violations found herein are the same as those found in Spun-Jee and similar considerations apply to the relief to be required, I shall recommend affirmative relief similar to that orderd in Spun-Jee. Having failed to bargain with Local 62 over the removal of the plant, Respondent must be required to offer to bargain now with Local'62 about the re- sumption of the unilaterally removed operations and if the operations are not restroed, about, the ef- fects on the employees of their discontinuance. Although Respondent's refusal to bargain oc- curred at a time when its employees,were included in an associationwide agreement, in view of the na- ture of the bargaining to be required, I shall recom- mend that Respondent be ordered to bargain con- cerning these matters with Local 62 as representa- tive of a unit of its employees embracing the same categories as the association unit which is also an appropriate unit.58 That unit consists of all em- ployees employed by Respondent in connection with any and all operations in the process of manu- facturing and all workers aiding in the process of manufacturing, including all graders, shipping clerks, assistant shipping clerks, and all employees who perform work in connection with receiving, as- sorting, packing, and order picking, but excluding porters, errand boys, watchmen, guards, and super- visors within the meaning of the Act.ss Moreover, as Respondent's removed operations are presently functioning in Donalsonville, Georgia, I shall recommend that Respondent be required to offer to all of its employees who were terminated as a, result of Respondent's unilateral decision to relocate its plant immediate and full reinstatement to their former or substantially equivalent positions, if such exist, at the Donalsonville, Georgia, opera- tion and at any resumed operations in the New York area, without prejudice to their seniority or 5' I note in this regard, however, that there is no evidence that Swee made any independent effort to find alternative quarters in the New York area, other than his efforts to retain half the loft it leased from Maflo 5N Spun -Jee Corp and The James Textile Corp , supra , 152 NLRB, at 947, fn 3. 5" As there was no contention herein that Respondent refused to bargain with Local 10 and as Respondent employs no cutters, bargaining is required only with Local 62 - - U.S. LINGERIE CORPORATION 765 other rights and privileges, discharging newly hired employees if necessary to make room for them. I shall also recommend that Respondent be required to place the names of all the remaining employees for whom no work is immediately available on a preferential hiring list and offer to the employees on such list employment as and when positions for which they are qualified become available. I shall further recommend that Respondent be required to make the terminated employees whole for any loss of pay they may have suffered as a result of Respondent's unfair labor practices. The liability for such backpay shall-cease upon the oc- currence of any of the following conditions: (1) reaching mutual agreement with Local 62 relating to the subjects which Respondent is herein required to bargain about; (2) bargaining to a bona fide im- passe; (3) the failure of Local 62 to commence negotiations within 5 days of the receipt of Respon- dent's notice of their desire to bargain with the union; or (4) the failure of Local 62 to bargain thereafter in good faith. Respondent's liability for backpay as to any of said former employees shall also cease upon his reinstatement to the same or substantially equivalent position at Respondent's present or any resumed operation. Backpay shall be based upon the earnings which terminated em- ployees would normally have received during the applicable period less any net interim earnings and shall be computed on a quarterly basis in the manner set forth in F. W. Woolworth Company, 90 NLRB 289 with interest thereon as provided in Isis Plumbing & Heating Co., 138 NLRB 716. With respect to the scope of the affirmative bar- gaining order required in this case the question remains whether Respondent should be required to bargain with Local 62 generally with respect to the wages, hours, and conditions of employment of its Georgia employees in the - event that the more limited bargaining required above does not result in a return of Respondent's operations to New York. Although a footnote in Spun-.lee suggests that such an obligation was imposed therein,s a careful read- ing of the order in that case indicates that no such general requirement was imposed, and the narrow reading of the Board's order is supported by the Board's brief and reply brief to the Second Circuit Court of Appeals in that case. In these circum- stances I conclude that Respondent is not to be required to bargain generally with Local 62 con- cerning the employees in Georgia.s' V. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of the Respondent set forth in sec- tion III, above, have a close, intimate, and substan- tial relation to trade, traffic, and commerce among the several States and tend to lead to labor disputes burdening and obstructing commerce and the free flow thereof. CONCLUSIONS OF LAW 1. Respondent, U.S. Lingerie Corporation and U.S. Lingerie Corporation, Debtor in Possession, constitute an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act. 2. Undergarment and Negligee Workers' Union, Local 62, International Ladies' Garment Workers' Union, AFL-CIO, is a labor organization within the meaning of Section 2(5) of the Act. 3. By attempting to withdraw from the multiem- ployer unit at an inappropriate time and thereafter refusing to accept and be bound by the results of multiemployer bargaining and by failing to notify Local 62 and to bargain with it concerning the shutdown of Respondent's New York plant and the removal of its operations to a new location, as found above, Respondent has engaged in and is en- gaging in unfair labor practices affecting commerce within the meaning of Section 2(6) and (7) of the Act. [Recommended Order omitted from publica- tion.] "See 152 NLRB, at 947, fn 3 s' Although the Board issued such an order in Gana in Corporation, et al , supra, there the Board found that relocation was motivated by a desire to avoid dealing with a union in violation of Section 8(a)(3) of the Act, and the remedy fashioned by the Board in that case would appear to rest in part on the finding of the Section 8(a)(3) violation Copy with citationCopy as parenthetical citation