Whitehead Brothers Company

National Labor Relations Board - Board Decisions

Aug 31, 1982

263 N.L.R.B. 895 (N.L.R.B. 1982)

WHITEHEAD BROTHERS COMPANY
Whitehead Brothers Company and District 65,
U.A.W. Case 4-CA- 1 1818
August 31, 1982
DECISION AND ORDER
BY CHAIRMAN VAN DE WATER AND
MEMBERS FANNING AND ZIMMERMAN
On December 16, 1981, Administrative Law
Judge Marvin Roth issued the attached Decision in
this proceeding. Thereafter, the Respondent filed
exceptions and a supporting brief, counsel for the
General Counsel filed a brief in opposition, and the
Respondent filed a brief in response.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the Na-
tional Labor Relations Board has delegated its au-
thority in this proceeding to a three-member panel.
The Board has considered the record and the at-
tached Decision in light of the exceptions and
briefs and has decided to affirm the rulings, find-
ings, and conclusions of the Administrative Law
Judge and to adopt his recommended Order.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor Re-
lations Board adopts as its Order the recommended
Order of the Administrative Law Judge and
hereby orders that the Respondent, Whitehead
Brothers Company, Port Elizabeth, New Jersey, its
officers, agents, successors, and assigns, shall take
the action set forth in the said recommended
Order, except that the attached notice is substituted
for that of the Administrative Law Judge.
APPENDIX
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
After a hearing at which all sides had an opportu-
nity to present evidence and state their positions,
the National Labor Relations Board found that we
have violated the National Labor Relations Act, as
amended, and has ordered us to post this notice.
WE WILL NOT fail or refuse to bargain col-
lectively and in good faith with District 65,
U.A.W., as the exclusive bargaining repre-
sentative of the employees in the appropriate
unit by: instituting changes in terms and condi-
tions of employment of our unit employees
without prior notice to District 65 or without
263 NLRB No. 123
affording District 65 an opportunity to negoti-
ate and bargain concerning such changes; fail-
ing or refusing to negotiate with District 65
concerning the termination of trucking oper-
ations at our Port Elizabeth, New Jersey, plant
and the effects of such termination on our unit
employees; or failing or refusing to furnish
District 65 with information and data which is
relevant and necessary to its function as bar-
gaining representative. The appropriate unit is:
All production and maintenance employees
employed by us at our Port Elizabeth, New
Jersey facility, including drivers, clerical
employees, and laboratory employees; but
excluding all guards and supervisors as de-
fined in the Act.
WE WILL NOT in any like or related manner
interfere with, restrain, or coerce our employ-
ees in the exercise of their rights under Section
7 of the Act.
WE WILL make whole our unit employees
for any loss of pay or other benefits, plus in-
terest, caused by our unilateral termination of
trucking operations at Port Elizabeth, New
Jersey.
WE WILL, upon request, bargain collectively
with District 65, U.A.W., concerning the ter-
mination of trucking operations at Port Eliza-
beth, New Jersey, and its effects upon our unit
employees, and reduce to writing any agree-
ment reached as a result of such bargaining.
WE WILL promptly furnish District 65 with
the study on which we based our conclusion
that it would be uneconomical to continue our
trucking operations at Port Elizabeth, the costs
of the operation, the costs of subcontracting
the work of that operation, the names of the
subcontractors, and any other figures or infor-
mation on which we based our conclusion.
WHITEHEAD BROTHERS COMPANY
DECISION
STATEMENT OF THE CASE
MARVIN ROTH, Administrative Law Judge: This case
was heard in Bridgeton, New Jersey, on September 21,
1981. The charge was filed on February 2, 1981, by Dis-
trict 65, U.A.W. (herein the Union). The complaint,
which issued on March 18, 1981, and was amended on
September 18, 1981,' alleges that Whitehead Brothers
Company (herein Respondent or the Company) violated
Section 8(a(1) and (5) of the National Labor Relations
Act, as alleged. The gravamen of the complaint, as
i By order dated September 18, 1981, the Regional Director adminis-
tratively dismissed certain allegations of the complaint.
895
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
amended, is that the Company allegedly failed and re-
fused to bargain collectively with the Union as the repre-
sentative of its employees by: (1) terminating trucking
operations at its Port Elizabeth, New Jersey, facility
without prior notice to the Union and without affording
the Union an opportunity to negotiate and bargain re-
garding such action; (2) failing and refusing to negotiate
with the Union concerning the effects of the termination;
and (3) failing and refusing to furnish the Union with the
study on which it based its conclusion that it would be
uneconomical to continue the operations, and other data
supporting the Company's decision to terminate the
trucking operations. The Company's answer denies the
commission of the alleged unfair labor practices. All par-
ties were afforded full opportunity to participate, to
present relevant evidence, to argue orally, and to file
briefs. The General Counsel and the Company each filed
a brief.
Upon the entire record in this case and from my obser-
vation of the demeanor of the witnesses, and having con-
sidered the arguments of counsel and the briefs submitted
by the General Counsel and Respondent, I make the fol-
lowing:
FINDINGS OF FACT
I. THE BUSINESS OF RESPONDENT
The Company, a New Jersey corporation, is engaged
in the processing of foundry sands and materials at its
plant located in Port Elizabeth, New Jersey. In the oper-
ation of its business, the Company annually ships prod-
ucts from its Port Elizabeth plant valued in excess of
$50,000 directly to points outside New Jersey. I find, as
the Company admits, that it is an employer engaged in
commerce within the meaning of Section 2(6) and (7) of
the Act.
II. THE BARGAINING UNIT INVOLVED
It is undisputed, and I so find, that the following em-
ployees of the Company constitute an unit appropriate
for the purpose of collective bargaining within the mean-
ing of Section 9(b) of the Act:
All production and maintenance employees em-
ployed by the Company at its Port Elizabeth facili-
ty, including drivers, clerical employees and labora-
tory employees; but excluding all guards and super-
visors as defined in the Act.
On or about July 14, 1980, the Union was certified by
the Board as the exclusive bargaining representative of
the employees in the appropriate unit. It is undisputed,
and I so find, that since July 14, 1980, the Union has
been and is the exclusive representative of said employ-
ees.
I11. THE ALLEGED UNFAIR LABOR PRACTICES
A. Background: The Company's Trucking Operation
Prior to November 20, 1980
Until 1976, the Company relied exclusively on outside
trucking companies to ship products to customers from
its Port Elizabeth plant.2 In 1976 the Company initiated
its own trucking operation at Port Elizabeth, and this op-
eration performed a small portion of the Company's de-
liveries. The Company began with one truck, and briefly
discontinued the operation twice in 1977 (prior to union
representation). By October 1980, 3 the Company em-
ployed six drivers,4 owned seven trailers (five tankers
and two dump) and two tractors, and was lessee of five
additional trailers. Normally six tractor-trailers were in
use at any given time, with the seventh tractor being
used as a spare. The Company used its trucks to ship an
average of 40 to 50 truckloads per day, which amounted
to from 5 to 10 percent of the Company's total ship-
ments. The Company instituted its trucking operation as
a convenience to its customers; e.g., the Company might
be able to make deliveries at a time when an outside car-
rier was unavailable. On a few occasions, the Company
used its trucks to haul products to its Plowville, Pennsyl-
vania, plant or to pick up machine products from a firm
in Connecticut. The drivers were paid trip rates, and re-
ceived an hourly rate while performing maintenance
work.
B. The Company's Decision To Terminate Its
Trucking Operation at Port Elizabeth
Since January 1980, and possibly earlier, the Company
was engaged in a study of the economics of its trucking
operation. Richard Kruback, the Company's vice presi-
dent for production, testified that the Company moni-
tored monthly computer printout profit-and-loss state-
ments of its trucking operation. The printouts did not
purport to show the Company's income from its trucking
operation, nor did they show the cost of contracting out
delivery work. In October 1979 the Company projected
a gross profit for the operation during 1980. However it
is evident from the printouts that throughout 1980 the
Company was running well below its projections, and
that the Company could reasonably anticipate a loss for
the year. Kruback and Plant Manager Walter Livingston
testified in sum that throughout 1980 the Company was
also aware that its trailers had to be replaced. Specifical-
ly, the frames were continually cracking, to the point
where the trailers were beyond repair. The Company ob-
tained an estimate of the cost of purchasing five new
trailers ($116,975), and, on October 6, Plant Manager
Livingston submitted the proposed purchase for manage-
ment approval. 5 Vice President Kruback testified that,
on receiving the estimate, management concluded that it
could not justify the expense, and therefore rejected the
proposed purchase. In light of the condition of the Com-
pany's trailers, it is evident that this rejection of the pro-
posed purchase was tantamount to a decision to termi-
2 If the Company quoted a delivered price for its products, the Com-
pany paid the cost of hauling. Otherwise the customer paid the cost. This
arrangement continued after the Company commenced its own trucking
operation.
3 All dates herein are in 1980 unless otherwise indicated.
The evidence indicates that the Company may have also employed a
relief driver.
5 The Company presented in evidence an estimate dated October 13.
However, it is evident from the date of Livingston's request that he al-
ready knew the cost.
896
WHITEHEAD BROTHERS COMPANY
nate the trucking operation. I find that in mid-October
the Company arrived at a tentative decision which
would soon result in a shutdown of its trucking oper-
ation, and that, unless that decision were changed, all
that remained was a determination as to the time of the
shutdown.
Kruback testified that on November 18 or 19 he and
Livingston went over the condition of the trailers, and
that, on November 20, management decided to shut
down the trucking operation that same day. Kruback in-
structed Livingston to park the trucks as they returned
to the plant. The Company and the Union were engaged
in negotiations over an initial collective-bargaining con-
tract. However, the Company did not give the Union
any notice of its intention or decision to terminate the
trucking operation. Livingston told those drivers who
asked that he had orders from the main office to park the
trucks, that the decision was made for economic reasons,
and that seniority would be followed. (The Company
had an existing policy of following seniority in layoffs
and recall.) As a result, four drivers were permitted to
bump into plant jobs, and two drivers (Ed Navone and
Calvin Ennals) were laid off. Four plant employees
(Richard Hasher. Joe Robbins, Gerald Kruback, and
Richard Hughes) were laid off to make room for the
senior drivers. The record is not clear as to whether a
relief driver (possibly Charles Sorbeck) was also laid off.
Subsequently the Company recalled the laid-off employ-
ees. Navone, Hasher, and Robbins returned to work in
the plant on January 18, 1980; Kruback returned to work
sometime prior to that date; and Hughes and Ennals de-
clined to return. However as plant employees the former
drivers earned less than they did during the trucking op-
eration. As for the equipment, the Company retained one
dump truck-trailer combination for in-plant use, and sold
four tractor-trailer units (the leased tractors being sold
on behalf of the lessor). The remaining equipment was
inoperative. The Company continued to use the same
trucking firms, who now handled all deliveries from the
plant.
C. Contacts Between the Company and the Union
Regarding the Termination of the Trucking Operation
and the Effects of the Termination
The Union and specifically then Area Director Lou
Palughi and his assistant, present Area Director Harry
Sopuch, learned of the shutdown through telephone calls
from driver employees. Palughi was then the Union's
chief negotiator. Sopuch, who was concerned about a
possible wildcat strike, telephoned Plant Manager Liv-
ingston. The plant manager said that he did not know
why the trucks were taken off the road, and he advised
Sopuch to call Kruback. Sopuch did so. In response to
Sopuch's inquiry, Kruback said that the trucks were
taken off the road because of economic conditions. Kru-
back said that the Company was losing money, that it
could not compete with trucking firms, and he men-
tioned the study previously discussed. Sopuch did not
then pursue the matter further. Toward the end of the
next bargaining session, on November 25, Sopuch asked
Kruback (the Company's chief negotiator) why the Com-
pany discontinued the trucking operation, the economic
reasons, and to whom the work was subcontracted.
Sopuch said the Union had a right to negotiate, and he
asked the Company to furnish the date including the cost
factor if any on which it based its decision. Kruback re-
plied that he did not have the information with him, and
that he would not want to give it to the Union even if he
had it. At this point the company negotiators, Kruback
and Livingston, got up and left the meeting. 6
By letter dated December 1, Sopuch requested Kru-
back to furnish:
The study on which you based your conclusion that
it would be uneconomical to continue your trucking
operation, and whatever other figures you have on
which you based this conclusion, including but not
limited to the cost to you of the operation; and the
cost of subcontracting the operation and the names
of subcontractors that would do the operation at
that cost.
Sopuch added:
[W]e reiterate our demand that you bargain with us
over the decision to terminate your trucking oper-
ation over effects of that decision. We consider you
laying off the employees as a result of the decision
prior to bargaining with us to be failure to bargain
in good faith. We therefore demand the immediate
recall of the laid off employees.
In its answer to the present complaint, the Company
admitted that it terminated trucking operations without
prior notice to the Union and without having afforded
the Union an opportunity to negotiate and bargain over
the termination. The Company further admitted that on
or about December 1, 1980, the Union by letter request-
ed the Company to negotiate over the effects of the ter-
mination on unit employees. I find that the December 1
letter constituted in law and fact a demand that the
Company bargain with the Union over both the termina-
tion and its effects. Even if the Union had not expressly
referred to "effects," the Union's demand for immediate
recall of the laid-off employees was addressed both to
the termination and its effects upon the unit employees,
and constituted an initial bargaining proposal regarding
both matters.
The next bargaining session took place on December
8. The Company was represented by Kruback, Living-
ston, and, for the first time, attorney Alfred Hill. The
Company had not yet responded to Sopuch's letter of
December 1. There were numerous unresolved issues be-
tween the parties. Hill asked Palughi to list the issues.
Palughi did so, and included the Union's demand for re-
instatement of drivers with full backpay. The Company
did not respond to this demand. This was the only dis-
cussion of the termination or its effects at the December
8 meeting.
^ The foregoing findings are based on a composite of the testimony of
Sopuch, Palughi, Kruback, and Livingston, the four witnesses who were
present at the meeting. Sopuch and Palughi testified that the Company's
negotiators walked out without any response. Kruback and Livingston
testified concerning Kruback's refusal to furnish the Company's study,
but they did not indicate that Kruback said anything else.
897
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
By letter dated December 15, company attorney Hill
responded to Sopuch's letter of December 1. After dis-
cussion of other matters referred to in the letter, Hill
stated as follows:
The last point in your letter deals with the dis-
continuance of the Company's trucking operation.
You realize, of course, that the Company always
subcontracted in excess of 90 per cent of its truck-
ing needs. The number of trucks and drivers has not
remained constant. The Company's trucking oper-
ation had been non-profitable. The records clearly
corroborate this fact. The subcontractors who tradi-
tionally have carried the Company's product have
absorbed the balance of the Company's needs and
are sharing the work.
As for the employee-truck drivers, some exer-
cised their seniority and bumped into other jobs and
are still employed. There could not have been a
more fair and equitable manner of treatment of the
drivers, Your demand for the immediate recall of
the laid-off employees is denied.
Hill did not furnish the "records" referred to in his
letter, nor did he identify the "subcontractors" perform-
ing the work. There was no further discussion of the ter-
mination or its effects at any bargaining session. By letter
dated February 4, 1981, Sopuch told Kruback:
It has just come to our attention that you had uni-
laterally eliminated the position of relief man at
about the same time you eliminated your trucking
operation. We hereby demand that you bargain
with us over the decision and its effects. We still
desire to bargain over the decision to terminate
your trucking operation and the effect of that deci-
sion.
The Company did not respond either orally or in writing
to Sopuch's letter. By letter dated April 30, 1981, Area
Director Palughi, responding to a request by attorney
Hill, listed 11 unresolved demands. The list did not con-
tain any reference to the termination or its effects. I do
not interpret the letter as any abandonment of the
Union's prior demands for bargaining concerning these
matters. In light of the Union's pending unfair labor
practice charge, its prior unequivocal demands, and the
Company's response or lack of response, no such infer-
ence is warranted. Moreover, it is evident that Palughi
was referring to the terms of a proposed contract. In
September 1981, shortly before the present hearing, the
Company and the Union agreed upon the terms of a con-
tract, and the Regional Director administratively dis-
missed a related complaint (Case 4-CA-11907) and the
other allegations of the present complaint. The agreed-
upon contract did not purport to deal with the termina-
tion or its effects.
D. Analysis and Concluding Findings
As indicated, it is undisputed, and the Company
admits, that the Company terminated its trucking oper-
ation at Port Elizabeth without prior notice to the Union
and without affording the Union an opportunity to nego-
tiate and bargain regarding that action. The General
Counsel does not contend that the Company terminated
the operation for any discriminatory reason. Therefore
the first issue presented is whether the Company violated
its bargaining obligations to the Union, the representative
of its employees, by failing to give the Union an oppor-
tunity to negotiate and bargain with the Company con-
cerning the Company's decision to terminate the truck-
ing operation. The General Counsel, in contending that
the Company acted unlawfully, relies on the authority of
Fibreboard Paper Products Corp. v. N.L.R.B., 379 U.S.
203, 215 (1974). The Company, arguing that it acted law-
fully, relies principally on the authority of the recent Su-
preme Court decision in First National Maintenance Corp.
v. N.L.R.B., 452 U.S. 666 (1981). For the reasons now
discussed, I find that the present case is governed by Fi-
breboard, and that the Company was under a legal obli-
gation to afford the Union an opportunity to negotiate
and bargain concerning the Company's decision to termi-
nate the trucking operation.
The Company points out (br. p. 19) that in Fibreboard,
the Supreme Court addressed its rationale to the kind of
fact situation involved in that case. In First National, the
Court, using similar qualifying language, also confined its
rationale to the kind of factual situation therein present-
ed. In Fibreboard, the Court defined the fact situation as
"the replacement of employees in the existing bargaining
unit with those of an independent contractor to do the
same work under similar conditions of employment."
The Court held that such "contracting out" or "subcon-
tracting" is a mandatory subject of bargaining. (379 U.S.
at 215.) The present case falls within the factual context
defined by the Court in Fibreboard. Here, the work in
question substantially consisted of the delivery of prod-
ucts by truck from the Port Elizabeth plant to the Com-
pany's customers. The Company did not terminate this
operation. Rather, the Company continued to perform
this function under the same financial arrangements with
its customers. As before, products were shipped from
Port Elizabeth under the Company's direction and re-
ceived at destination points under the customer's direc-
tion. The only operative change was that instead of the
Company's performing a portion of the work with its
own employees and equipment the trucking firms who
formerly handled 90 to 95 percent of deliveries were
now performing all of the delivery work.
In contrast, First National involved an employer's de-
cision "to close a part of its business." The Court held:
"The decision to halt work at this specific location [the
performance of maintenance work at Greenpark Care
Center] represented a significant change in [First Nation-
al's] operations, a change not unlike opening a new line
of business or going out of business entirely." No compa-
rable change is involved in the present case. The Compa-
ny had used its own drivers for only a portion of its de-
livery operations. As the Company itself pointed out, the
Company previously stopped utilizing its own employees
and equipment for deliveries, only to resume doing so
after short intervals. However, there is one major factor
which was not present in either Fibreboard or First Na-
tional. In the present case, unlike the two Supreme Court
898
WHITEHEAD BROTHERS COMPANY
cases, the Company's decision to terminate its trucking
operation necessarily involved rejection of a proposed
capital investment; i.e., the purchase of five new trailers.
Concomitantly, in light of the condition of the Compa-
ny's trailers, a decision to continue the operation would
have necessitated the purchase of new equipment. How-
ever, in First National the Supreme Court explicitly
stated that "we do not believe that the absence [in that
case] of 'significant investment or withdrawal of capital'
is crucial." Rather as indicated, the Court regarded the
nature of the employer's decision, rather than the amount
of investment involved, to be the determinative factor.
Moreover, as the Company itself demonstrated in the
present case, the Company did not base its decision
solely on the cost of new trailers. Rather, the Company
took into consideration all of the costs of its trucking op-
eration, including direct and indirect labor costs. These
are matters which are particularly appropriate for collec-
tive bargaining. See Fibreboard, 379 U.S. at 213-214. In
contrast, the employer's decision in First National turned
exclusively on its unsuccessful negotiations with Green-
park over the price of First National's services. In sum,
the present case involved not only a question of capital
investment, but also a determination as to whether unit
work should be transferred to another group of employ-
ees; i.e., the employees of outside trucking firms. The
Company's unilateral disposition of this question had an
immediate and vital effect on the wages and jobs of unit
employees. Specifically, that disposition resulted in lay-
offs, displacement, and substantial loss of wages.
The Company argues (br. pp. 18-19) that the viability
of Fibreboard was eroded by subsequent Board and cir-
cuit court decisions, and suggests that, in light of First
National, it is questionable whether Fibreboard is still the
law. I find this argument without merit. As discussed
herein, the Supreme Court made clear in First National
that it was dealing with a situation which differed sub-
stantially and significantly from that involved in Fibre-
board. The cases principally relied on by the Company
(cited at br. p. 18) each involved the closure or sale of a
significant facility or portion of the employer's business;
i.e., situations even more favorable to the employer's po-
sition than that involved in First National. See, in partic-
ular, the Board's discussion of such cases in General
Motors Corporation, GMC Truck & Coach Division, 191
NLRB 951 (1971). It is possible that over the years, in
light of changing patterns in labor relations or evolving
case law, there might be an erosion of the doctrines of a
once-leading Supreme Court decision. However, it is un-
likely that such erosion would take place immediately in
the wake of that decision. Therefore I find particularly
significant several circuit court decisions which issued
shortly after Fibreboard, and which necessitated consid-
eration or reconsideration of the cases in light of Fibre-
board. These cases are discussed in General Motors, supra.
The Board observed that: "Consistent with the expressly
restricted scope of Fibreboard, the courts have sustained
the Board's position in subcontracting cases [citing
N.L.R.B. v. American Manufacturing Company of Texas,
351 F.2d 74 (5th Cir. 1965); and N.L.R.B. v. Johnson,
d/b/a Carmichael Floor Covering Co., 368 F.2d 549 (9th
Cir. 1966)], but rejected Board decisions requiring bar-
gaining over more elemental management decisions, such
as plant closings and plant removals" (citing, inter alia.
N.L.R.B. v. Adams Dairy, Inc., 350 F.2d 108 (8th Cir.
1965), cert. denied 382 U.S. 1011; and N.L.R.B. v. Royal
Plating and Polishing Co., Inc., 350 F.2d 191 (3d Cir.
1965). Adams Dairy involved "a basic operational change
[which took] place when the dairy decided to completely
change its existing distribution system by selling its prod-
ucts to independent contractors." (350 F.2d at 111.) In
Royal Plating, the employer shut down one plant of a
two-plant operation. Carmichael Floor Covering involved
a fact situation similar to that presented in Fibreboard.
However, American Manufacturing, unlike the other
cases discussed by the Board or cited by the Company in
its brief, involved a fact situation which was substantially
similar to that in the present case. The employer, a man-
ufacturer of oilfield pumping equipment, maintained an
extensive transportation department for the delivery of
its products to customers scattered throughout the
United States and Canada. Without consultation or dis-
cussion with the bargaining representative, the employer
abolished its transportation department, contracted all of
its motor truck transportation to a trucking firm, laid off
or transferred its drivers (apparently on the basis of se-
niority), and subsequently sold all of its trucks and relat-
ed equipment. As the Court put it, the employer "was
now out of the transportation business. Or so it thought."
The Court upheld the Board's finding that the employ-
er's conduct was discriminatorily motivated, and there-
fore violative of Section 8(a)(3) of the Act. However, the
Court specifically held that, even in the absence of a dis-
criminatory motive, the employer was obligated to bar-
gain over its decision to "subcontract" the trucking
work. "Quite apart from anti-union conduct, or here the
claim of economic justification, the decision to subcon-
tract work is a subject for mandatory bargaining. Any
doubt which may have existed was put to rest by [Fibre-
board]." (351 F.2d at 80.) In the present case, as in Fibre-
board and American Manufacturing, the Employer was
obligated to bargain over its decision to "subcontract"
unit work, i.e., to replace unit employees with those of
an independent contractor or contractors to do the same
work under similar conditions of employment.
In Westinghouse Electric Corporation (Mansfield Plant),
150 NLRB 1574 (1975), a Board decision which also
issued shortly after Fibreboard, the Board held that, in
the circumstances of that case, the employer "did not
violate the statutory bargaining obligation by failing to
invite union participation in individual subcontracting de-
cisions" involving work which might otherwise have
been performed by unit employees. In Westinghouse, the
employer had a long-established and recurrent practice
of contracting out work, and, over the years, had award-
ed thousands of such subcontracts. The Board interpret-
ed Fibreboard as allowing, even with respect to a manda-
tory subject of bargaining, for "circumstances which the
Board could or should accept as excusing or justifying
unilateral action." The Board found such circumstances
in Westinghouse, specifically that: (1) the recurrent con-
tracting out of the work in question was motivated solely
by economic considerations; (2) it comported with the
899
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
traditional methods by which the employer conducted its
business operations; (3) it did not during the period in
question vary significantly in kind or degree from what
had been customary under past established practice; (4) it
had no demonstrable adverse impact on employees in the
bargaining unit; and (5) the Union had the opportunity to
bargain about changes in existing subcontracting prac-
tices in general negotiating meetings. For "all these cu-
mulative reasons," the Board concluded that the employ-
er did not violate the Act. Recently (but prior to the Su-
preme Court decision in First National), the Third Cir.
cuit Court of Appeals had occasion to interpret and
apply Westinghouse in Equitable Gas Company v.
N.L.R.B., 637 F.2d 980 (1981). The court held that its
"balancing analysis," theretofore applied to cases involv-
ing plant closings, was also applicable to cases involving
subcontracting of unit work. See also ABC Trans-Nation-
al Transport, Inc. v. N.L.R.B., 642 F.2d 675, 679 (3d Cir.
1981). Under this analysis, there is an initial presumption
that issues of subcontracting and partial closings are
mandatory subjects of bargaining, but this presumption
can be overcome if it appears that the employer's inter-
ests outweigh the Union's interest in a given situation.
Equitable Gas involved the subcontracting of unit work.
The court, invoking its balancing analysis, applied the
five criteria utilized by the Board in Westinghouse. The
court, in disagreement with the Board, held that all five
criteria were present. Therefore, the court denied en-
forcement of the Board's Decision and Order directing
the employer to bargain over such subcontracting.
In First National, the Supreme Court took note of the
Third Circuit's approach to these cases. It is probable
that the court of appeals will wish to reconsider its bal-
ancing analysis in light of First National. Assuming (as
indicated by the court in Equitable Gas) that the criteria
utilized by the Board in Westinghouse are applicable to
all subcontracting cases in order to determine the em-
ployer's obligation, I would nevertheless find a violation
in the present case, because only one of those criteria
(economic motivation) is here present. The second and
third criteria are not present, because for several years
the Company had consistently used its own driver to
perform a substantial portion of its delivery work. The
fourth criterion is not present, because the Company's
unilateral actions resulted in layoffs, displacement, and
substantial loss of wages for unit employees. As to the
fifth criterion, the Union had no reason to anticipate any
change in the Company's practices, and consequently
had no opportunity to bargain about such changes.
As the Company's termination of its trucking oper-
ations at Port Elizabeth was a mandatory subject of bar-
gaining, it follows that the Company also violated Sec-
tion 8(a)(5) and (1) of the Act by failing and refusing to
furnish the Union with the information and data request-
ed orally and in writing by the Union. Such information
and data was relevant to the termination and the Compa-
ny's decision to terminate the trucking operations, and
was both relevant and necessary in order to enable the
Union to negotiate and bargain meaningfully and intelli-
gently concerning both the termination and its effects on
the unit employees. Production Molded Plastics, Inc., 227
NLRB 776, 786-787 (1977), enfd. 604 F.2d 451 (6th Cir.
1979). Some but not all of the requested information was
presented in evidence in this proceeding.s However, this
belated proffer does not excuse the Company's unlawful
conduct, nor does it constitute an adequate substitute,
either in law or fact, for direct and prompt compliance
with a proper request for information by the bargaining
representative. Production Molded Plastics, supra, 227
NLRB at 786; see also Air Express International Corpora-
tion, 245 NLRB 478 (1978), enfd. in pertinent part 659
F.2d 610 (5th Cir. 1981).
Regardless of the Company's obligation to bargain
concerning its decision to terminate trucking operations,
the Company nevertheless violated Section 8(aX5) and
(1) of the Act by failing to give the Union prior notice of
that decision, in order to afford the Union adequate and
meaningful opportunity to negotiate concerning the ef-
fects of that decision. See N.LR.B. v. Royal Plating and
Polishing Co., Inc., supra, 350 F.2d at 196. The Company
had ample time to afford such an opportunity. As hereto-
fore found, the Company for all practical purposes ar-
rived at its decision more than a month before the actual
termination. The Company does not dispute that it was
legally obligated to afford the Union such opportunity.
See also First National Maintenance Corp., supra at fn. 15.
I find upon consideration of the evidence that the Com-
pany unlawfully failed and refused to bargain over the
effects of its decision on the unit employees. Initially, as
heretofore discussed, the Company did not even inform
the Union of the termination. Rather, as the Company
concedes that (br. p. 32) the Company not only unilater-
ally terminated trucking operations, but also unilaterally
imposed the effects on the unit employees in accordance
with its own concept of fairness. Although, as admitted
by the Company, the Union requested effects bargaining
in its letter of December 1, the Company ignored that
request at their next negotiating session on December 8.
Instead, through a letter from its attorney (dated Decem-
ber 15), the Company categorically rejected the Union's
demand for immediate recall of the laid-off employees,
and refused to deviate from its previously imposed uni-
lateral resolution of the problem, without suggesting that
there was any possibility of further negotiation regarding
the matter. This did not constitute compliance with the
Company's bargaining obligations under the Act. "Face-
to-face negotiations" between the "bargaining principals"
is "an elementary and essential condition of bona fide
bargaining." Aaron Newman, et al. d/b/a Colony Furni-
ture Company, 144 NLRB 1582, 1589 (1963). "A re-
spondent must do more than merely give notice and an
opportunity to bargain: its conduct must reflect an inten-
tion to reach agreement. Otherwise 'form, rather than
substance, becomes the determinative factor in deciding
whether the bargaining obligation has been fulfilled' [re-
sulting in] ritualistic, pro forma bargaining without mean-
ingful exchange." Dilene Answering Service, Inc., 257
' The Company did not present in evidence any figures which would
indicate the cost of subcontracting the trucking information. Vice Presi-
dent Kruback did not claim in his testimony that the printouts and esti-
mate which were presented in evidence constituted the entire basis on
which the Company made its decision.
900
WHITEHEAD BROTHERS COMPANY
NLRB 284 (1981).8 In the present case, the Company
unlawfully acted without prior notice to the Union, and
then compounded its unlawful conduct by foreclosing
any meaningful negotiations over the matter.
CONCLUSIONS OF LAW
1. The Company is an employer engaged in commerce
within the meaning of Section 2(6) and (7) of the Act.
2. The Union is a labor organization within the mean-
ing of Section 2(5) of the Act.
3. All production and maintenance employees em-
ployed by the Company at its Port Elizabeth, New
Jersey facility, including drivers, clerical employees, and
laboratory employees, but excluding all guards and su-
pervisors as defined in the Act, constitute a unit appro-
priate for collective bargaining within the meaning of
Section 9(b) of the Act.
4. At all times material the Union has been and is the
exclusive collective-bargaining representative of the em-
ployees in the unit described above.
5. The Company has been and is engaging in unfair
labor practices within the meaning of Section 8(a)(1) and
(5) of the Act by terminating trucking operations at its
Port Elizabeth facility without prior notice to the Union
and without having afforded the Union an opportunity
to negotiate and bargain with respect to such matter, by
failing and refusing to bargain with the Union concern-
ing the effects of the termination on unit employees, and
by failing and refusing to furnish the Union with request-
ed information which is necessary for, and relevant to,
the Union's performance of its function as bargaining
representative.
6. The aforesaid unfair labor practices are unfair labor
practices affecting commerce within the meaning of Sec-
tion 2(6) and (7) of the Act.
THE REMEDY
Having found that the Company has committed viola-
tions of Section 8(a)(l) and (5) of the Act, I shall recom-
mend that it be required to cease and desist therefrom
and from like or related unlawful conduct to bargain
upon request with the Union concerning its termination
of trucking operations at Port Elizabeth and the effects
of such termination on the unit employees, to furnish the
Union with the requested information, and to post an ap-
propriate notice. The General Counsel has not requested
an order which would require the Company to resume
its trucking operations. However, the General Counsel
requests a remedy as provided in Transmarine Navigation
Corporation and its Subsidiary, International Terminals,
Inc., 170 NLRB 389 (1968). I find that such a remedy is
warranted, with modifications in light of the particular
facts of the present case. I shall recommend that the
Company be ordered to make whole unit employees for
a In Dilene, as in the present case, the employer avoided discussing the
matter in question at a regular bargaining session, but instead, communi-
cated its position by mail in a "take it or leave it" manner. In Dilene,
unlike the present case, the employer gave advance notice of its intention.
Nevertheless, the Board found that the employer "engaged in ritualistic
pro forma bargaining which does not satisfy the requirements of Section
8(a)5) of the Act." A Jbrtiori. the Company also did not satisfy its obliga-
tion under Sec. 8(a)(5).
any loss of income and benefits they may have suffered
by reason of the termination of trucking operations and
consequent layoffs and displacement of unit employees.
Backpay shall be computed in accordance with the for-
mula approved in F. W. Woolworth Company, 90 NLRB
289 (1950), with interest computed in the manner and
amount prescribed in Florida Steel Corporation, 231
NLRB 651 (19 7 7).9 Backpay shall commence from No-
vember 20, 1980, until the occurrence of the earliest of
the following conditions: (1) the date the Company bar-
gains to agreement with the Union concerning the termi-
nation of trucking operations at Port Elizabeth and its ef-
fects on unit employees; (2) a bona fide impasse in bar-
gaining; (3) the failure of the Union to request bargaining
within 5 days of the Company's notice of its desire to
bargain with the Union; or (4) the subsequent failure of
the Union to bargain in good faith.
Upon the foregoing findings of fact and conclusions of
law, and upon the entire record, and pursuant to Section
10(c) of the Act, I hereby issue the following recom-
mended:
ORDER' °
The Respondent, Whitehead Brothers Company, Port
Elizabeth, New Jersey, its officers, agents, successors,
and assigns, shall:
1. Cease and desist from:
(a) Failing or refusing to bargain collectively and in
good faith with District 65, U.A.W., as the exclusive bar-
gaining representative of the employees in the appropri-
ate unit by: instituting changes in terms and conditions of
employment without prior notice to said Union or with-
out affording said Union an opportunity to negotiate and
bargain concerning such changes; failing or refusing to
negotiate with said Union concerning the termination of
trucking operations at its Port Elizabeth, New Jersey,
plant and the effects of such termination on unit employ-
ees; or failing or refusing to furnish said Union with in-
formation and data which is relevant and necessary to its
function as bargaining representative.
(b) In any like or related manner interfering with, re-
straining, or coercing employees in the exercise of the
rights guaranteed them under Section 7 of the Act.
2. Take the following affirmative action which is
found necessary to effectuate the policies of the Act:
(a) Make whole unit employees for any loss of pay or
other benefits caused by Respondent's unilateral termina-
tion of trucking operations at Port Elizabeth, New
Jersey, in the manner and for the period set forth in the
section of this Decision entitled "The Remedy."
(b) Upon request bargain collectively with District 65,
U.A.W., concerning the termination of trucking oper-
ations at Port Elizabeth, New Jersey, and its effects upon
9 See, generally, Isis Plumbing & Heating Co, 138 NLRB 716, 717-721
(1962).
l0 In the event no exceptions are filed as provided by Sec. 102.46 of
the Rules and Regulations of the National Labor Relations Board, the
findings, conclusions, and recommended Order herein shall, as provided
in Sec. 102.48 of the Rules and Regulations, be adopted by the Board and
become its findings, conclusions, and Order, and all objections thereto
shall be deemed waived for all purposes.
901
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
the unit employees, and reduce to writing any agreement
reached as a result of such bargaining.
(c) Promptly furnish said Union with the study on
which it based its conclusion that it would be unecono-
mical to continue its trucking operations at Port Eliza-
beth, the costs of the operation, the costs of subcontract-
ing the work of that operation, the names of the subcon-
tractors, and any other figures or information on which
Respondent based its conclusion.
(d) Preserve and, upon request, make available to the
Board or its agents, for examination and copying, all
payroll records, social security payment records, time-
cards, personnel records and reports, and all other
records necessary to analyze the amount of backpay due.
(e) Post at its Port Elizabeth, New Jersey, plant copies
of the attached notice marked "Appendix."" Copies of
" In the event that this Order is enforced by a Judgment of a United
States Court of Appeals, the words in the notice reading "Posted by
said notice, on forms provided by the Regional Director
for Region 4, after being duly signed by Respondent's
authorized representative, shall be posted by Respondent
immediately upon receipt thereof, and be maintained by
it for 60 consecutive days thereafter, in conspicuous
places, including all places where notices to employees
are customarily posted. Reasonable steps shall be taken
by Respondent to ensure that said notices are not altered,
defaced, or covered by any other material.
(f) Notify the Regional Director for Region 4, in writ-
ing, within 20 days from the date of this Order, what
steps Respondent has taken to comply herewith.
Order of the National Labor Relations Board" shall read "Posted Pursu-
ant to a Judgment of the United States Court of Appeals Enforcing an
Order of the National Labor Relations Board."
902