Cyclone Fence - Decision Summary

Cyclone Fence (7-CA-42461; 330 NLRB No. 186) Grand Prairie, TX April 28, 2000. Applying Nathan Yorke, Trustee, 259 NLRB 819 (1981), the Board granted the General Counsel's motion for summary judgment, finding that the Respondent's response to a Notice to Show Cause why the motion should not be granted, has admitted or failed to specifically deny the complaint allegations and has not raised any issues warranting a hearing. The complaint alleges that the Respondent violated Section 8(a)(5) and (1) of the Act by ceasing operations, terminating all unit employees, and failing to pay them wages and appropriate fringe benefits, without prior notice to Laborers Local 1191 and without affording the Union an opportunity to bargain about the conduct or its effects. Although properly served copies of the charge and complaint, the Respondent failed to file an answer. In its response to the Notice to Show Cause, the Respondent admitted that it terminated its business and that unit employees have not been paid since September 30, 1999, acknowledged complaint allegations that it failed to bargain over the closing and the failure to pay employees, stated that it filed a petition in bankruptcy under Chapter 11 of the Bankruptcy Code, and requested that the case be stayed pursuant to 11 U.S.C. § 362 of the Bankruptcy Code.

In Nathan Yorke, the Board adopted the administrative law judge's finding that the Respondent violated Section 8(a)(5) and (1) by failing to bargain with the Union regarding the effects of its decision to terminate operations where the newly appointed bankruptcy trustee acted immediately upon learning of the Respondent's quickly dwindling assets. The Seventh Circuit enforced the Board's decision, as modified, finding that the emergency situation that confronted the trustee in bankruptcy excused the Respondent's obligation to notify the Union before the plant closure, but did not excuse its failure to bargain after the closing over the effects of the closure because "[o]nce operations had been terminated, the emergency situation ended." 709 F.2d 1138, 1144 (1983).

In this decision, the Board wrote in finding that the allegations in the motion for summary judgment are undisputed and that the Respondent violated Section 8(a)(5) and (1): "As in Nathan Yorke, it would appear that the emergency situation that the Respondent was confronted with here might excuse its failure to give prior notice to the Union and afford the Union with an opportunity to bargain about the decision to terminate operations prior to the actual shutdown. However, it also appears that once the 'operations had been terminated, the emergency situation ended,' and the Respondent's failure to bargain about the effects of the closing constitutes a violation of the Act." Id. 709 F.2d at 1144.

Charge filed by Laborers Local 1191; complaint alleged violation of Section 8(a)(1) and (5). General Counsel filed motion for summary judgment Feb. 1, 2000.