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Electrical Products Division of Midland-Ross Corp. v. National Labor Relations Board

decided: March 18, 1980.

ELECTRICAL PRODUCTS DIVISION OF MIDLAND-ROSS CORPORATION, PETITIONER
v.
NATIONAL LABOR RELATIONS BOARD, RESPONDENT



ON PETITION FOR REVIEW AND CROSS APPLICATION FOR ENFORCEMENT OF AN ORDER OF THE NATIONAL LABOR RELATIONS BOARD (BOARD NOS. 4-CA-8081, 4-CA-8327)

Before Seitz, Chief Judge, and Adams and Weis, Circuit Judges.

Author: Seitz

Opinion OF THE COURT

The Electrical Products Division of Midland-Ross Corp. (the employer) petitions for review of an order of the National Labor Relations Board that adopted the administrative law judge's (ALJ) finding of numerous labor violations arising out of events at two of the employer's plants in Pennsylvania. The Board has filed a cross application for enforcement of its order.

I. Factual Background

In 1974, the employer bought two plants in Pennsylvania as part of a single transaction: the Del-Val plant in Tullytown and the Nylomatic plant in Morrisville. The two plants are about seven miles apart, and both are engaged in the production of plastic goods utilizing molds supplied by customers. There was some integration of the two facilities, especially at the upper management levels.*fn1 In addition, records for both plants were stored at Nylomatic.

Nevertheless, the plants were not exactly similar. For example, the Nylomatic plant was non-unionized. At Del-Val there were two unions representing separate bargaining units: the United Glass & Ceramics Workers (Ceramics Workers) representing the production and maintenance employees, and the International Union of Tool, Die & Mold Makers (Tool Makers) representing the tool room employees. Moreover, from the time of the acquisition, the Nylomatic plant was profitable, but Del-Val was not. Although a consulting firm recommended in December 1974 that the employer divest itself of Del-Val, the plant remained open and members of the management made optimistic statements about its financial status during 1975.

The events with which the unfair labor practice proceeding was concerned took place in 1976. In January of that year, the employer assigned George Bickerstaff, one of its vice presidents, the responsibility for studying Del-Val's financial posture. He discussed various options with company officials, including closing Del-Val. In February, he formed a task force of top officials to study the employer's options as to Del-Val.

Sometime shortly after the formation of this task force, the Ceramics Workers began an organizational campaign at the Nylomatic plant. On March 1, the union sent out a letter and authorization cards to all Nylomatic employees. By March 10, the union informed the employer it had cards from a majority of all Nylomatic employees. On March 11, it forwarded 32 authorization cards to the regional director and filed an election petition. On March 25, the Tool Makers filed a representation petition seeking to represent some of the Nylomatic employees covered by the Ceramics Workers' petition.

During April, the task force studying Del-Val handed in its report. The report was pessimistic, and Louis Zharadnik, the employer's controller, began preparing a Project Appropriations Request (PAR), an analysis of the economic impact of plant closure. On June 4, he completed the PAR, recommending closure of the Del-Val plant.

On June 10, the regional director ordered an election to be held on July 1 at the Nylomatic plant. He defined two units: Unit A, covering production and maintenance employees, and Unit B, which covered the tool room employees. The election in Unit A only concerned the Ceramics Workers, but both the Ceramics Workers and the Tool Makers wanted to be the representative for Unit B.

On June 17, a vice president of the company informed vice president Bickerstaff of the decision to close Del-Val. The following day, Bickerstaff told Robert Worth, the operations manager for both Nylomatic and Del-Val, to start closing down Del-Val.

Early in the morning of June 22, Nicholas Phillips, the labor relations manager of the employer, met with representatives of the Ceramics Workers and the Tool Makers to inform them of the decision to close Del-Val. When asked for a time table for the closing, Phillips said one had not yet been set. William Kline, a representative of the international of the Ceramics Workers, asked what could be done to help the employees. Kline replied: "There is nothing the (unions) can do." Later that day, Phillips met with the morning and afternoon shifts at Del-Val to announce the closing. Also on June 22, Worth posted notices at both Nylomatic and Del-Val announcing the closing.

The following day, June 23, Phillips again came to Del-Val to inform employees of the closing. At that time, outside the hearing of other employees, Phillips, Kline, and Long (the president of the Ceramics Workers local) met together. Kline said to Phillips that the Del-Val closing would affect the Nylomatic election set for July 1. Long testified that Phillips stated in response: "Yes it will. It will definitely have something to do with the vote."

The same day, Worth, who managed both plants, sent out a letter to all Nylomatic employees. After a brief opening paragraph, the letter continued:

Yesterday I announced the decision by Midland-Ross to phase out the operations at the Del-Val plant. In 1975 Del-Val lost in excess of $500,000 and the trend has not improved. For the first five months of this year it has lost in excess of $240,000. While I personally regret this action, it will enable your management to concentrate solely on the survival of the Nylomatic operation.

The next four paragraphs continued by describing the financial condition of Nylomatic and Worth's hopes that it would continue in its profitable activity. The letter then concluded:

On July 1, 1976, you will be asked to exercise your right to vote for the Company or to vote for a third party to represent you. I urge you to give this decision your sincere, careful consideration. If you vote for the Company, we will continue to be able to resolve any problems that may come up without a third party coming between us.

Your management does not want a third party in the plant because a third party may create complex working conditions, we may have to hire unnecessary workers and we may have work stoppages, strikes or slowdowns. All of these have a negative effect on the profitability of our plant. Your all know that you don't need a third party to continue getting good treatment at this plant.

Even if you signed a card you still have a right to vote "NO" in a secret ballot election. . . .

NO TO DUES

NO TO STRIKES

NO TO VIOLENCE

NO TO THE ENCOURAGEMENT OF DISTRUST BETWEEN US

If we are to succeed in making Nylomatic a sound, profitable business which will give you security, we don't need the presence of a union we need the utmost in trust, cooperation, and the spirit which you have exhibited in the past.

Sincerely yours,

Robert R. Worth

Operations Manager

June 29, two days before the election, Worth, Phillips, and sales manager Cal Engel spoke to the Nylomatic employees at three meetings, making the same remarks at each. Worth opened the meeting by announcing that Del-Val had been closed because it had become unprofitable. Phillips then told the employees that if they rejected the unions, they would profit when the plant profited. Finally, Engel explained that if the plant was organized, strikes would delay delivery of orders, and "a union would hurt the business."

June 30, Phillips met with representatives of the Ceramics Workers and the Tool Makers to discuss the Del-Val closing. When asked when the plant would close, Phillips replied that it would shut down for vacation on July 1 for two weeks, but he was unsure how many employees would be needed or for how long after vacation. After discussing insurance and vacation benefits, Phillips gave Kline of the Ceramics Workers a severance pay schedule. Kline disagreed with the proposal, and Phillips told him the employer's proposal was "not bargainable; that's it. That's from the higherups."

July 1 saw the occurrence of two events. First, Del-Val closed for vacation and never reopened.*fn2 Second, at Nylomatic, the Ceramics Workers lost the election in Unit A, and the Tool Makers won the election in Unit B.

On July 6, the Ceramics Workers filed objections to the elections in both Units A and B. The same day, that union filed an unfair labor practice charge relating to the closing of Del-Val and its effect on the election. On July 7, the employer filed objections to the election in Unit B.

On August 4, Phillips and George Gardner, the employer's attorney, met with Kline and Long to discuss the effects of the closing. Phillips presented Kline with a proposed agreement that included the same severance pay schedule as that at the June 30 meeting. The agreement also recited that the "negotiations were conducted on a good faith basis." Kline objected to the good faith clause on the ground that it would prejudice the Ceramics Workers' pending unfair labor practice charge. An argument ensued, and Kline walked out of the meeting. Kline and Phillips later exchanged letters, but no more meetings were held.

On October 15, the elections in both Units A and B were set aside. The Ceramics Workers then filed a second unfair labor practice charge requesting a bargaining order as to Unit A. This was consolidated with the earlier charge and a hearing was held.

The ALJ found a variety of unfair labor practices: (1) the employer violated §§ 8(a)(5) & (1) of the National Labor Relations Act by failing to bargain with the Ceramics Workers over the decision to close Del-Val; (2) the employer violated §§ 8(a)(5) & (1) for not bargaining in good faith over the effects of the closing; (3) the employer violated § 8(a)(1) by impliedly threatening the Nylomatic employees that it would close the plant if they voted for the unions; (4) the employer violated §§ 8(a)(3) & (1) by timing and implementing the closing of Del-Val in such a manner as to chill union activity at Nylomatic; and (5) the employer violated §§ 8(a)(5) & (1) by refusing to bargain with the Ceramics Workers as the collective bargaining representative of Unit A at Nylomatic. In addition to a cease and desist order, the ALJ established preferential hiring ...


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