Apex Linen Service of Columbus, Inc.

National Labor Relations Board - Board Decisions

Feb 26, 1965

151 N.L.R.B. 305 (N.L.R.B. 1965)

APEX LINEN SERVICE OF COLUMBUS, INC. 305
NOTE.-We will notify James C. Young and Berlin V . Lokey if they are presently
serving in the Armed Forces of the United States, of their right to full reinstatement
upon application in accordance with the Selective Service Act, and the Universal
Military Training and Service Act of 1948 , as amended, after discharge from the
Armed Forces.
This notice must remain posted for 60 consecutive days from the date of posting,
and must not be altered , defaced, or covered by any other material.
Employees may communicate directly with the Board 's Regional Office, 746 Fed-
eral Office Building, 167 North Main Street , Memphis, Tennessee , Telephone No.
534-3161, if they have any questions concerning this notice or if they have infor-
mation that its provisions are being violated.
Apex Linen Service of Columbus, Inc. and Laundry, Dry Cleaning
and Linen Workers International Union, Local 218. Case No.
10-CA-5547. February 26, 1965
DECISION AND ORDER
On May 27, 1964, Trial Examiner Max Rosenberg issued his Deci-
sion in the above-entitled case, finding that the Respondent had
engaged in and was engaging in certain unfair labor practices vio-
lative of Section 8(a) (5) and (1) of the National Labor Relations
Act, as amended, and recommending that it cease and desist there-
from and take certain affirmative action, as set forth in the attached
Trial Examiner's Decision. General Counsel filed exceptions to the
Decision and a supporting brief and Respondent filed a cross-excep-
tion and a supporting brief.
Pursuant to the provisions of Section 3 (b) of the Act, the National
Labor Relations Board has delegated its powers in connection with
this case to a three-member panel [Members Fanning, Brown, and
Jenkins].
The Board has reviewed the rulings of the Trial Examiner made
at the hearing and finds that no prejudicial error was committed.
The Board has considered the Decision, the exceptions, the cross-
exception and briefs, and the entire record in the case, and hereby
adopts the Trial Examiner's findings, conclusions, and recommen-
dations.
ORDER
Pursuant to Section 10(c) of the National Labor Relations Act,
as amended , the National Labor Relations Board hereby adopts as
its Order, the Order recommended by the Trial Examiner and orders
that Respondent, Apex Linen Service of Columbus, Inc., its officers,
agents, successors , and assigns , shall take the action set forth in the
Trial Examiner's Recommended Order.
151 NLRB No. 34.
783-133-66-vol. 151-21
306 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
TRIAL EXAMINER 'S DECISION
STATEMENT OF THE CASE
This proceeding , with all parties represented , was heard before Trial Examiner
Max Rosenberg in Atlanta , Georgia, on February 13, 1964, on complaint of the
General Counsel of the National Labor Relations Board and answer of Apex Linen
Service of Columbus, Inc., herein called the Respondent .' The sole issue framed
by the pleadings is whether Respondent refused to bargain in violation of Section
8(a)(5) of the Act by closing its plant without prior notice to or consultation with
Laundry, Dry Cleaning and Linen Workers International Union, Local 218, herein
called the Union , which was the duly designated collective -bargaining representative
of an appropriate unit of Respondent 's employees during the times material. At
the conclusion of the hearing , the parties waived oral argument . Briefs have been
filed by the General Counsel and the Respondent , which have been duly considered.
Upon the entire record and my observation of the witnesses , I hereby make the
following:
FINDINGS OF FACT
1. THE BUSINESS OF THE EMPLOYER
At the times material herein, Respondent was a Georgia corporation with its prin-
cipal office and place of business at Columbus , Georgia, where it engaged in the
linen rental service business During these times , Respondent was one of three
wholly owned and controlled subsidiaries of Apex Corporation ,2 a Georgia corpora-
tion maintaining its principal office and place of business at Atlanta , Georgia, where
it also engaged in the linen rental service business. During the annual period mate-
rial to this proceeding , Respondent performed services outside the State of Georgia
valued in excess of $50,000 The complaint alleges, the amended answer admits,
and I find that Respondent was engaged in commerce within the meaning of Section
2(6) and ( 7) of the Act
11. THE LABOR ORGANIZATION INVOLVED
The Union is a labor organization within the meaning of Section 2(5) of the Act.
III. THE ISSUE AND THE EVENTS
The General Counsel contends that Respondent unlawfully refused to bargain
with the Union when, between August 16 and October 1, 1963, it unilaterally and
without notice to or consultation with the Union , terminated its business operations.3
The General Counsel concedes that the termination was occasioned solely by the
financial difficulties which Respondent was experiencing , and had no discriminatory
overtones . Respondent , while admitting that it closed its plant on August 31, 1963,
denies that such action was unilaterally taken . The issue is thus a narrow one. was
Respondent 's decision to shut its plant formulated and implemented without giving
the Union advance notice and opportunity to discuss that decision?
In May 1962 the Union was certified in a Board election as the collective -bargain-
ing agent of Respondent 's production and maintenance employees In July 1962
the Union furnished Respondent with a proposed collective-bargaining agreement.
No formal bargaining sessions were held until April 10, 1963. However , at a lunch-
eon meeting between E. L. Abercrombie , president of the Union , and Abner Cohen,
vice president of Respondent , which was held in November 1962, Cohen informed
Abercrombie that, while Respondent was willing to negotiate a labor agreement with
the Union , Respondent was experiencing severe economic problems in the operation
of its business.
' The complaint , which issued on January 15, 1964 , was based on a charge and an
amended charge filed on November 13, 1963, and January 8, 1964 , respectively.
2 Apex Linen Service of Columbus, Inc, is the only Respondent involved in this
proceeding.
3 While the complaint alleges that between August 16 and October 1, 1963 , Respondent
unilaterally and without notice to or consultation with the Union " subcontracted out"
the work at the Columbus , Georgia , plant , no evidence was adduced at the hearing to
establish that any subcontract had been made and the case was not litigated on that basis.
APEX LINEN SERVICE OF COLUMBUS, INC. 307
The first formal bargaining session was held on April 10, 1963, and was attended
by Cohen, Respondent's Attorney Fine, Abercrombie, and the Union's Attorney and
Negotiator Mitchell. At this session, the Union's proposed contract and Respondent's
counterproposals were discussed. The second formal meeting was conducted on
May 2, with the same individuals in attendance Once again, the proposals and
counterproposals were the topic of discussion. With respect to these meetings, Cohen
testified that he had informed the union negotiators that Respondent's accountants
had for some time been advising that the operation was not profitable and should
be terminated, that sales in the past year had fallen off approximately $30,000 and
the outlook for the future was dun, and that if costs rose ` it might be necessary to
close that plant." Cohen admitted, however, that he had never notified the Union
of Respondent's decision to close the plant. Mitchell testified that he had been
shown the financial statements of the Company for 1962 and for the appropriate
months of 1963 which "revealed that the Company was not making any profit, or
very much profit," and acknowledged that Cohen and Fine had stated that Respond-
ent could not afford any increased costs at the time. Mitchell disclaimed having any
discussion with Cohen or Fine concerning the possible closing of the plant." 4
Following the May 2 meeting, negotiations between the parties were conducted by
correspondence. On May 3 Mitchell sent Respondent a letter embodying a new set
of proposals. Attorney Fine responded on May 16 by agreeing to some of the pro-
posals and rejecting others. Mitchell replied on June 3 by making some concessions
but standing firm on the other proposals. On June 21 Fine wrote Mitchell to advise
that, because of the adverse financial reports, Respondent could not go beyond the
wage increase which it had previously offered. In this letter Fine told Mitchell that:
I have been told that on many occasions during the past two years the Officers
and Board of Directors have given consideration to the closing of this operation
because of the constant losses sustained.
On June 26 Mitchell sent Fine the Union's final offer. Mitchell again wrote Fine
on September 13 asking that a meeting be held to discuss the various proposals. On
September 23 Fine answered:
You will recall that during previous conferences we stated to you and Mr. Aber-
crombie that [Respondent] had been operating with a substantial loss from
month to month and year to year. Business continued to decline and losses
continued to increase and by reason thereof, it was necessary to close the laun-
dry operation of this company. If you will check you will find that laundry
operations have been discontinued now for a period of several weeks. I will
be glad to set up a conference but it would appear to me that any discussions
or negotiations would be for naught.
Mitchell replied by letter of September 26, stating that the termination of operations
was a violation of Section 8(a)(5) of the Act "because such action was never com-
municated to or discussed with the certified collective-bargaining agent. Please
advise the earliest day, time and place convenient for a full discussion and negotia-
tions relative to severance pay for employees terminated, retention of seniority for
transfer purposes and other related problems of mutual interest." On November 4
Fine informed Mitchell that all employees employed on the date of the plant's ter-
mination had been given specified amounts of severance pay depending upon their
length of service, that each employee had been offered employment at another sub-
sidiary known as Apex of Atlanta, Georgia, and that one employee had accepted
the offer.5 The Union made no further request for bargaining on these "fringe"
subjects and, on November 13, filed the initial charge in this case.
4 At one point in his examination, Mitchell was asked by Respondent's counsel whether
there had been any statements made at these negotiation sessions by company representa-
tives to the effect that Respondent "might be forced to go out of business." When the
Trial Examiner inquired whether Mitchell desired to have the question repeated, Mitchell
answered in the affirmative. In its brief, Respondent asserts that Mitchell thereby
affirmatively acknowledged that such a statement was made. I do not so construe his
testimony, particularly in view of his subsequent denials However, I am willing to
accept the testimony of Cohen that he did tell the union negotiators that "it might be
necessary to close that plant" because of financial difficulties Moreover, as indicated
hereinafter, Mitchell was informed by Fine in a letter of June 21, 1963, that Respondent
had been considering closing the plant for that reason.
5It appears from the record that another employee-a truckdriver-accepted similar
employment at a warehouse in Columbus, Georgia, which this subsidiary operates.
308 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Analysis and Concluding Findings
As heretofore indicated, the sole issue presented is whether Respondent unilater-
ally closed its plant without first notifying the Union of its decision to do so and
affording the Union an opportunity to bargain over that decision. I find that in
November 1962, Vice President Cohen informed Union President Abercrombie that
Respondent was losing money at the Columbus plant. I further find that, during
the bargaining meetings held on April 10 and May 2, 1963, the union negotiators
were shown Respondent's financial statements which concededly portrayed the Colum-
bus plant as a losing operation, and that Cohen informed them "it might be necessary
to close that plant" if operating costs increased. I also find that in his letter dated
June 21, 1963, Respondent's Attorney Fine advised Union Negotiator Mitchell that
over the preceding 2-year period Respondent had considered closing its plant because
of the financial losses sustained. However, I find that at no time prior to the cessa-
tion of operations at the plant on August 31, 1963,6 did Respondent notify the Union
that the former had actually decided to and would close its plant on that date. I fur-
ther find that after the termination of operations at the plan, Respondent awarded
all employees employed on that date specified amounts of severance pay, offered
each such employee employment at a subsidiary plant of Apex Corporation in
Atlanta, Georgia, and actually employed two such individuals at the other locations
who had accepted the offer. I conclude and find that the Union was informed of
this action, and made no further request to bargain over these matters.?
In Town & Country Manufacturing Company, Inc., 136 NLRB 1022, the Board
ruled that the elimination of unit jobs, either in whole or in part, and whether for
economic or discriminatory reasons, is a mandatory subject of collective bargaining
within the purview of Section 8(a)(5) of the Act. In so doing, it announced that
an employer was under a statutory obligation to notify the collective-bargaining
representative of the affected employees of its decision to curtail or eliminate opera-
tions, and to afford such representative an opportunity to bargain over the matter.
In my opinion, the obligation thus imposed is not discharged by a management
prophecy that a plant "might" close unless business picks up or unless a union scales
down its economic demands, and, so far as I can discern, the Board cases do not
speak otherwise, for it is not uncommon, in the give-and-take of bargaining, for
management to utilize such prophecies as a bargaining technique in the hope of
extracting more favorable terms from its bargaining counterpart. It is when
prophecy becomes reality, when a bargaining impasse actually forces an economic
decision to eliminate unit jobs, that notice of such a decision becomes statutorily
critical, for then the union and its employee-members are put on notice that they
must come forward with some concrete concession or alternative to stay the life
of the employing enterprise. It was the Board's judgment in Town & Country that,
by affording a union the opportunity to bargain over a management decision to ter-
minate an operation, discussion might produce agreement between the parties whereby
"business operations may profitably continue and job may be preserved."
As I have found that the Respondent did not notify the Union of its decision to
close the Columbus plant and did not provide the Union with an opportunity to
bargain over that decision, I conclude and find that Respondent thereby violated
Section 8(a) (5) and (1) of the Act.8
"The record establishes that Respondent completely shut down its basic laundry opera-
tions on August 31 and eliminated a small starch department on September 6. As the
date on which Respondent went out of business is not critical, I conclude and find, for
the purposes of this Decision, that a complete cessation of business occurred on August 31.
7 The complaint does not allege a failure to bargain by Respondent over these "fringe';
subjects.
8I have found that, in response to Mitchell's letter of September 26 requesting negotia-
tions concerning "severance pay for employees terminated, retention of seniority for
transfer purposes and other related problems of mutual interest," Fine informed Mitchell
of the actions which Respondent had taken with respect to these matters. As the Union
made no further request for discussion of these issues after receiving this information,
and as the complaint does not allege that Respondent unlawfully failed to bargain over
these matters , I do not find that Respondent violated Section 8 ( a) (5) and (1) of the
Act with regard to the effects of the cessation of operations upon the employees.
APEX LINEN SERVICE OF COLUMBUS, INC. 309
IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE
The activities of the Respondent set forth in section III, above, occurring in con-
nection with the operations of Respondent described in section I, above, have a close,
intimate, and substantial relation to trade, traffic, and commerce among the several
States and tend to lead to labor disputes obstructing commerce and the free flow of
commerce.
V. THE REMEDY
Having found that Respondent has engaged in certain unfair labor practices, I shall
recommend that it cease and desist therefrom and take certain affirmative action,
set forth in the Recommended Order below, which will effectuate the policies of
the Act.
The General Counsel prays for a remedial order which would require Respondent
to reinstate the individuals whose employment ceased with the closing of Respond-
ent's Columbus plant, to award backpay to them, and to bargain with the Union
concerning any future decision to cease operations. It is his apparent conviction
that Town & Country and related decisions 9 provide authority of fashioning such
a remedy. I am unable to agree.
In Town & Country, Fibreboard, and Adams Dairy, the employer had subcon-
tracted only a portion of the enterprise without bargaining with the union over the
decision to do so. The Board ordered the employer to reinstate the subcontracted
portion of his business, rehire the employees who had lost their unit jobs, and make
them whole. So far as I am able to discern, there is nothing to be found in those
decisions which suggests that the Board would order an employer who completely
ceases business for economic reasons to resume his former operations. Accordingly,
I deny the General Counsel's request that the Respondent resume operations and
reinstate the affected employees.10
Nor do I deem it appropriate to award backpay in this case. On the basis of
exhibits introduced into evidence by the General Counsel, the record demonstrates
that, when Respondent went out of business, it awarded the employees involved
specific amounts of severance pay and offered them employment in jobs with Apex
of Atlanta, a subsidiary of Apex Corporation. Two individuals accepted such
employment. There is nothing to indicate that the employment so offered was not
substantially equivalent to that existing at Respondent's plant, or that the offer of
such employment would have imposed onerous or disadvantageous conditions upon
its acceptance. I therefore find that these offers of employment effectively relieved
Respondent of any backpay liability.
As I have found that Respondent violated Section 8(a)(5) and (1) of the Act
by closing its plant without notifying the Union and affording it an opportunity to
bargain over the decision to cease operations, I deem it appropriate, in order to
effectuate the policies of the Act, to recommend that Respondent place the names
of all employees who lost their jobs as a consequence of the cessation on a prefer-
ential hiring list and, in the event Respondent hereafter resumes the operation at
Columbus, Georgia, to offer to these employees immediate reinstatement to their
former or substantially equivalent positions without prejudice to their seniority and
other rights and privileges which they previously enjoyed.11 I shall also recommend
e Fibreboard Paper Products Corporation, 138 NLRB 550; Adams Dab y, Inc, 137
NLRB 815.
10 There is a suggestion in the General Counsel's brief that Respondent did not entirely
curtail its Columbus operation because of asserted testimony by Respondent's Vice
President Cohen that a warehouse exists in Columbus from which Respondent distributes
linens to customers The record shows that the assets of Respondent, including the
warehouse, were sold to Apex Corporation. Thus, Respondent had not been shown to own
or operate this warehouse.
There is also a suggestion In the General Counsel's brief that Apex Corporation be
ordered to remedy Respondent's unfair labor practices. It should be noted, in this
connection , that the General Counsel elected to proceed, both in charge and complaint,
against the Respondent alone. As Apex Corporation is not a party to this proceeding,
there is basis for directing an affirmative remedial order against that entity.
n Because the two employees who accepted employment with the subsidiary, Apex of
Atlanta, may desire future employment in Columbus, I shall recommend that their
names also be placed on the list.
310 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
that, when and if Respondent resumes operations, it shall, upon request, bargain with
the Union as the exclusive bargaining representative of the employees in the unit
herein found appropriate. In the event that operations are resumed, I shall further
recommend that Respondent be ordered to bargain with the Union concerning the
formulation and implementation of any future decision to terminate its business.
As the Respondent's Columbus, Georgia, plant, no longer exists, the customary
posting of notices is not feasible. I shall therefore recommend that Respondent be
required to mail a copy of the notice appended to this Decision to the Union and
to each employee whose name appears on the preferential hiring list.
Upon the foregoing findings of fact, and upon the entire record in this case, I make
the following:
CONCLUSIONS OF LAW
1. Respondent is an employer within the meaning of Section 2(2) of the Act, and
is engaged in commerce within the meaning of Section 2(6) and (7) of the Act.
2. The Union is a labor organization within the meaning of Section 2(5) of the
Act, and at all times material has been the certified and recognized collective-bar-
gaining representative of a unit appropriate for the purposes of collective bargaining
within the meaning of Section 9(b) composed of all production and maintenance
employees at Respondent's Columbus, Georgia, plant, excluding office clerical employ-
ees, route salesmen, professional employees, guards, and supervisors as defined in
the Act.
3. By closing its Columbus, Georgia, plant, on August 31, 1963, unilaterally and
without prior notice to or consultation with the Union, Respondent refused to bar-
gain collectively with the Union and thereby engaged in unfair labor practices which
come within the proscriptive ambit of Section 8(a)(5) and (1) of the Act.
RECOMMENDED ORDER
Upon the foregoing findings of fact and conclusions of law and the entire record
in this case, and pursuant to Section 10(c) of the National Labor Relations Act, as
amended, I recommend that Respondent Apex Linen Service of Columbus, Inc.,
Columbus, Georgia, its officers, agents, successors, and assigns, shall:
1. Cease and desist from:
(a) Refusing to bargain collectively with Laundry, Dry Cleaning and Linen
Workers International Union, Local 218, as the exclusive bargaining representative
of all employees in the appropriate unit consisting of all production and mainte-
nance employees, excluding office clerical employees, route salesmen, professional
employees, guards, and supervisors as defined in the Act.
(b) In any like or related manner interfering with, restraining, or coercing its
employees in the exercise of the right to self-organization, to form labor organiza-
tions, to join or assist the above-named or any other labor organization, to bargain
collectively through representatives of their own choosing, and to engage in other
concerted activities for the purpose of collective bargaining or other mutual aid
or protection, or to refrain from any and all such activities.
2. Take the following affirmative action which I find will effectuate the policies
of the Act:
(a) Create a preferential hiring list containing the names of all employees whose
employment was terminated as a result of the cessation of Respondent's business,
and notify the above-mentioned Union and each employee so listed of the establish-
ment of such a list and the contents thereof. If and when Respondent shall resume
operations in Columbus, Georgia, it shall offer the individuals whose names appear
on the aforesaid list full reinstatement to their former or substantially equivalent
positions without prejudice to their seniority or other rights and privileges previously
enjoyed, as set forth in the section herein entitled "The Remedy."
(b) If and when operations are reinstituted, bargain collectively, upon request,
with Laundry, Dry Cleaning and Linen Workers International Union, Local 218, as
the exclusive bargaining representative of all employees in the appropriate unit set
forth above, and embody any understanding reached in a signed agreement, and
bargain with that labor organization concerning the formulation and implementation
of any future decision to cease operations.
(c) 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 or useful to
assure compliance with this Recommended Order.
APEX LINEN SERVICE OF COLUMBUS, INC. 311
(d) Mail a copy of the attached notice marked "Appendix" 12 to Laundry, Dry
Cleaning and Linen Workers International Union, Local 218, and to each employee
whose name appears on the preferential hiring list. Copies of said notice, to be
furnished by the Regional Director for Region 10, shall, after being signed by an
authorized representative, be mailed immediately upon receipt thereof to Laundry,
Dry Cleaning and Linen Workers International Union, Local 218, and to the
employees whose names appear on the preferential hiring list.
(e) Notify the Regional Director for Region 10, in writing, within 20 days from
the receipt of this Decision, what steps it has taken to comply herewith.13
12 In the event that this Recommended Order is adopted by the Board, the words "a
Decision and Order" shall be substituted for the words "the Recommended Order of a
Trial Examiner" in the notice In the further event that the Board's Order Is enforced
by a decree of a United States Court of Appeals, the words "a Decree of the United
States Court of Appeals, Enforcing an Order" shall be substituted for the words "a
Decision and Order"
131n the event that this Recommended Order is adopted by the Board, this provision
shall be modified to read: "Notify the aforesaid Regional Director, in writing, within
10 days from the date of this Order, what steps it has taken to comply herewith "
APPENDIX
NOTICE TO ALL EMPLOYEES
Pursuant to the Recommended Order of a Trial Examiner of the National Labor
Relations Board, and in order to effectuate the policies of the National Labor Rela-
tions Act, as amended, we hereby notify you that:
WE WILL, if and when we resume operations at our plant in Columbus,
Georgia, bargain upon request with Laundry, Dry Cleaning and Linen Workers
International Union, Local 218, as the exclusive bargaining representative of
all employees in the appropriate unit consisting of all production and mainte-
nance employees, excluding office clerical employees, route salesmen, profes-
sional employees, guards, and supervisors defined in the Act, and embody any
understanding reached in a signed agreement, and WE WILL bargain with that
labor organization concerning the formulation and implementation of any
future decision to cease business operations.
WE WILL create a preferential hiring list containing the names of all employ-
ees whose employment was terminated as a result of the cessation of operations
at the Columbus, Georgia, plant, and notify the above-named Union and all
individuals named on said list of the establishment of the list and the contents
thereof.
WE WILL, if and when we resume operations at the aforementioned plant, offer
all the individuals whose names appear on the preferential hiring list full rein-
statement to their former or substantially equivalent positions without prejudice
to their seniority or other rights and privileges previously enjoyed.
WE WILL NOT interfere with, restrain, or coerce our employees in the exercise
of their rights to self-organization, to form, join, or assist the above-named or
any other labor oiganization, to bargain collectively through representatives of
their own choosing, and to engage in other concerted activities for the purpose
of collective bargaining or other mutual aid or protection, or to refrain from
any or all such activities.
All our employees are free to become, remain, or refrain from becoming or
remaining, members of the above-named Union or any other labor organization.
APEX LINEN SERVICE OF COLUMBUS, INC.,
Employer.
Dated------------------- By-------------------------------------------
(Representative) (Title)
This notice must remain posted for 60 consecutive days from the date of posting,
and must not be altered, defaced, or covered by any other material.
Employees may communicate directly with the Board's Regional Office, 528
Peachtree-Seventh Building, 50 Seventh Street NE., Atlanta, Georgia, Telephone
No. Trinity 6-3311, Extension 5357, if they have any question concerning this
notice or compliance with its provisions.