Armco, Inc., Ashland Works

National Labor Relations Board - Board Decisions

Apr 30, 1990

298 N.L.R.B. 416 (N.L.R.B. 1990)

416 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
Armco, Inc., Eastern Steel Division , Ashland Works
and Oil, Chemical and Atomic Workers Inter-
national Union, AFL-CIO-CLC
United Steelworkers of America , AFL-CIO-CLC,
and its Local Union 1865 and Richard M.
Bank. Cases 9-CA-18227 and 9-CB-5285
April 30, 1990
SECOND SUPPLEMENTAL DECISION
AND ORDER
BY CHAIRMAN STEPHENS AND MEMBERS
CRACRAFT AND DEVANEY
On June 28, 1989, Administrative Law Judge
John H. West issued the attached supplemental de-
cision. Respondent Armco, Inc., Eastern Steel Di-
vision, Ashland Works (Respondent Armco or
Armco) filed exceptions and a supporting brief, and
the Charging Parties filed an answering brief.
Subsequently, Respondent Armco filed a Motion
to Reopen Record to Add Affidavit of
Armco/OCAW Contract Agreement and Ratifica-
tion. Armco's motion requested that the Board
reopen the record to accept filing of the affidavit
of Industrial Relations Supervisor Richard Allen to
establish that "Armco and OCAW reached agree-
ment on a four year contract on September 13,
1989, that the agreement was ratified by the Coke
Department employees on September 29, and that
the cost and value of the wages and benefits in the
contract are essentially the same as those recently
bargained by Armco and Steelworkers for the
other departments of the Ashland Works." The
Oil, Chemical and Atomic Workers International
Union, AFL-CIO-CLC (OCAW) filed a motion in
opposition to Armco's motion. On November 24,
1989, the Board issued a Notice to Show Cause to
the parties why the Board should not grant Re-
spondent Armco's motion. OCAW filed a response
to the Notice to Show Cause in which it reiterated
its opposition to Armco's motion.
The National Labor Relations Board has delegat-
ed its authority in this proceeding to a three-
member panel.
The Board has considered the supplemental deci-
sion and record in light of the exceptions, briefs
and motions and has decided to grant Respondent
Armco's motion to reopen the record and to affirm
the judge's rulings, findings,' and conclusions only
1 Respondent Armco has excepted to some of the judge's credibility
findings. The Board 's established policy is not to overrule an administra-
tive law judge's credibility resolutions unless the clear preponderance of
all the relevant evidence convinces us that they are incorrect . Standard
Dry Wall Products, 91 NLRB 544 (1950), enfd. 188 F.2d 362 (3d Cir.
1951) We have carefully examined the record and find no basis for re-
versing the findings.
to the extent consistent with this Decision and
Order.
In its original Decision and Order in this pro-
ceeding,2 the Board found that Armco engaged in
unfair labor practices in violation of Section
8(a)(1), (2), (3), and (5) of the National Labor Rela-
tions Act and that United Steelworkers of Amer-
ica, AFL-CIO-CLC and its Local Union 1865
(Respondent Steelworkers or USWA) engaged in
conduct violative of Section 8(b)(1)(A) and (2) of
the Act. To remedy these violations the Board or-
dered, inter alia, the following: that Respondent
Armco cease recognizing Respondent Steelworkers
and, on request of OCAW, restore the status quo
ante that existed prior to the implementation of
various unilateral changes by Armco with respect
to the rates of pay, wages, hours, and other terms
and conditions of employment of the unit employ-
ees; that it reimburse the employees, or former em-
ployees, for any monetary losses they may have
suffered as a result of the unilateral changes with
interest thereon; and that it continue such payments
until such time as Armco negotiates in good faith
with OCAW or to impasse.
The United States Court of Appeals for the Sixth
Circuit enforced the Board's Order, except for the
backpay award.3 The court stated in relevant part:
It has come to our attention that the remedy
ordered against Armco may be too harsh, for
it would require the company to pay wages
perhaps as much as three dollars per hour
more than the coke workers have been receiv-
ing since the plant's purchase. In Kallman v.
NLRB, 640 F.2d 1094 (9th Cir. 1981), the
court set aside part of a similar remedial order
and remanded the matter to the Board. The
court there found that "[t]he function of the
remedy . . . is to restore the situation, as
nearly as possible, to that which would have
occurred but for the violation." Id. at 1103,
We do not rely on the judge's discussion concerning reimbursement of
reductions in pay and benefits of coke plant employees pursuant to the
November 25, 1987 Caster Reduction Agreement It is unnecessary to
rule on OCAW's caster agreement claim because the reductions took
place outside the backpay period as determined in this Second Supple-
mental Decision and Order and therefore raise no backpay liability issues.
In adopting the judge's findings we find it unnecessary to rely on the
minutes of meetings between Armco and the Steelworkers or the judge's
discussions of such minutes.
Armco excepts to the judge's refusal to grant Armco's motion to file a
reply brief to OCAW's brief to the judge In fn. 24 of his decision, the
judge denied Armco's motion because Armco did not demonstrate any
need for a reply brief and no special circumstances warranted reply
briefs Armco had an opportunity in its lengthy brief to the Board to set
forth its position and respond to OCAW arguments stated at the remand
hearing or in OCAW briefs. Accordingly, we find no merit in Armco's
exception to the judge's ruling
a 279 NLRB 1184 (1986).
3 Armco, Inc v. NLRB, 832 F 2d 357 (6th Cir. 1987), cert denied 486
U.S 1042 (1988).
298 NLRB No. 53 1\
ARMCO, INC. 417
citing Phelps Dodge Corp. v. NLRB, 313 U.S.
177, 194 ... (1941). In Kallman, the facts in-
dicated that the employer would not have
agreed to union demands to pay the higher
rate.
We believe that the same may be true in this
case. Thus, we hold that the employer is re-
sponsible for the pay difference for the time
which would have been required for bargain-
ing. We will remand this matter to the Nation-
al Labor Relations Board, however, for the
factual determination required to decide the
extent of backpay.4
The Board accepted, as the law of the case, the
Sixth Circuit's remand limiting Armco's monetary
liability at the predecessor's contractual rates to the
time which would have been required for bargain-
ing. In its Supplemental Decision and Order, 291
NLRB 1171 (1988), the Board remanded the pro-
ceeding to the administrative law judge for a re-
opening of the record and further hearing for the
limited purpose of taking evidence on the extent of
Armco's backpay liability, i.e., the "time which
would have been required for bargaining." Specifi-
cally, the Board placed the burden of proof on
Armco to establish that it would not have agreed
to the monetary provisions of the predecessor em-
ployer's collective-bargaining agreement with
OCAW, the date on which it would have bar-
gained to agreement, and the terms of the agree-
ment that would have been negotiated, or to estab-
lish the date on which it would have bargained to
good-faith impasse and implemented its own mone-
tary proposals.
In his supplemental decision, the judge conclud-
ed that Armco failed to meet its burden of proof
with respect to these matters and affirmed his origi-
nal recommended Order dated July 18, 1984,
which provided for backpay liability to extend
from the date of the unfair labor practices in 1981
until the parties bargain in good faith to agreement
or impasse. The judge found that if Armco had
recognized OCAW and bargaining had occurred
after the duty to bargain had arisen, the relative
bargaining strength of the parties would not have
been as one-sided (in Armco's favor) as Armco had
asserted. Further, the judge rejected Armco's con-
tention that it would have canceled the purchase if
it had failed to obtain economic concessions from
OCAW in bargaining. Accordingly, the judge con-
cluded that Armco failed to show that if it had
acted lawfully it would not have met the monetary
demands of OCAW's contract with the predecessor
employer.
In its exceptions to the judge's supplemental de-
cision, Armco asserts that the economic climate
and relative bargaining power of the parties in De-
cember 1981 when it purchased the predecessor's
coke plant support a finding that Armco would
never have agreed to the monetary provisions of
the predecessor's contract, that the parties would
have reached an agreement or impasse by the time
of the December 31, 1981 purchase, and that the
monetary terms of that agreement would have been
comparable to the monetary terms of the then-ap-
plicable Armco-Steelworkers' contract. Armco
contends that it would have insisted on reaching
agreement with OCAW before the takeover and
absent agreement would have walked away from
the purchase.
Alternatively, Armco argues that assuming it had
gone ahead with the purchase despite the lack of
an agreement with OCAW, Armco would have set
the initial terms, including monetary terms, to be,
effective upon the commencement of operations of
the coke plant by Armco on January 1, 1982, by
either setting the terms after advising OCAW that
Armco would not adopt the terms of the predeces-
sor's contract and consulting with OCAW, or by
reaching impasse on the terms on January 1, 1982,
or very shortly thereafter. Armco asserts that in no
event would bargaining have extended beyond
May 14, 1982, the date that OCAW's contract with
the predecessor expired.
The Charging Parties contend that the judge
correctly found that Armco failed to meet its
burden of proof on the remand issues and properly
reinstituted the original backpay remedy covering
the entire period of Armco ownership of the coke
plant. The Charging Parties assert that the only
competent evidence on the time required for bar-
gaining is the 1988-1989 bargaining.5
As a preliminary matter we grant Armco's
motion to reopen the record to add the affidavit of
Industrial Relations Supervisor Richard Allen,
which states that following the commencement of
contract negotiations in June 1988, Armco and
OCAW reached an agreement on September 13,
1989, which was subsequently ratified by coke de-
partment employees on September 29, 1989. It is
proper to receive this evidence under Section
102.48(d)(1) of the Board's Rules because the evi-
dence "has become available only since the close
of the hearing" on April 25, 1989. OCAW's opposi-
tion to this motion does not contest the truthfulness
or accuracy of the assertions in the affidavit, but
rather argues that the information is irrelevant and
4 832 F.2d at 365.
5 The parties commenced negotiations in June 4988 after the Supreme
Court denied certiorari in this proceeding
418 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
that a reopening of the record for this limited pur-
pose is not warranted under the Board's Rules. We
find no merit in OCAW's opposition. Thus, as a
matter of record, we find that the parties negotiat-
ed from June 1988 until September 1989, when
they reached agreement on a contract. 6
We interpret the Sixth,Circuit's remand as re-
quiring the Board to determine what would have
happened had Armco purchased the coke plant and
fulfilled its statutory obligation to bargain with
OCAW at the time of the takeover.
We continue to adhere to our view that, in cir-
cumstances like those here, it would ordinarily be
preferrable to calculate backpay on the basis of
contractual rates paid by the predecessor until
agreement or impasse because the successor em-
ployer's unlawful failure to recognize and bargain
with the union has left us without an adequate or
reasonable alternative basis for calculating what
rates would have been arrived at through lawful
bargaining and the period of time that would have
been required to reach agreement or impasse.? In
accepting the Sixth Circuit's remand as the law of
this case, however, we are required to apply this
alternative formula, despite its difficulty and the
Board's past reluctance to do so.
During the course of this extensive litigation, the
parties advanced arguments in support of their re-
spective positions concerning what the course of
bargaining would have been had Armco recog-
nized and bargained with OCAW at the time of the
takeover. We have carefully reviewed the argu-
ments presented and the factual record before us.
In a genuine effort to give meaning to the Sixth
Circuit's remand, yet mindful of our policy that
any uncertainties concerning questions about the
outcome of bargaining-had the parties bar-
gained-should be resolved against the one whose
unlawful acts have created those uncertainties, we
resolve the issues on remand as follows.
We conclude, contrary to the judge, that Armco
met its burden of proof with respect to showing
that, had it negotiated with OCAW at the time of
the takeover, Armco would not have agreed to the
premium monetary terms of the predecessor con-
tract.8 We find persuasive Armco's argument that
6 The substantive terms of that contract are immaterial to the determi-
nation that we make in this decision.
' See discussion of State Distributing Co., 282 NLRB 1048 (1987), and
Love's Barbeque Restaurant No. 62, 245 NLRB 78 (1979), enfd. in part
and denied in part 640 F.2d 1094 (9th Cu. 1981), in the Board's Supple-
mental Decision and Order in this proceeding, 291 NLRB 1171 (1988).
8 Although we find that Armco met its burden of proof that it would
not have agreed to the premium monetary terms of the predecessor con-
tract, we reject the arguments advanced by Armco that it would not
have purchased the coke plant or would have purchased the assets only
in the event that agreement could not have been reached with OCAW by
Armco's asserted December 15, 1981 deadline or the December 31, 1981
takeover on contract terms that were comparable with the then-applica-
the financially depressed condition of the steel in-
dustry as well as the economic situation at the
predecessor 's coke plant in 1981 support Armco's
asserted bargaining posture .9 We further find merit
in Armco's argument that it would have ap-
proached negotiations with a strong commitment
to avoid the possibility of destabilizing the wage
and benefit structure covering the approximately
3500 Steelworkers -represented Ashland Works em-
ployees , by granting premium monetary terms to
the significantly smaller coke plant unit. Armco
also presented evidence that negotiations with
Armco's smaller satellite operations have not his-
torically resulted in premium monetary terms.
Thus, pursuant to the Sixth Circuit's mandate,
Armco's backpay liability is limited to "the pay dif-
ference for the time which would have been re-
quired for bargaining."
With respect to the time that would have been
required for bargaining , Armco argues that the par-
ties would have reached agreement or impasse
before the December 31, 1981 takeover or shortly
thereafter . Armco further asserts that in no event
should backpay liability extend beyond May 14,
1982 , the date the predecessor's contract expired.
Armco's position is based on its characterization of
the economic conditions, bargaining demands, and
relative bargaining postures existing in 1981 , and its
speculation regarding the impact of these factors
on bargaining had it occurred . Armco challenges
OCAW's reliance on the parties' current negotia-
tions to determine the course of bargaining in 1981,
had bargaining taken place then, arguing that the
circumstances and the parties ' relative bargaining
leverages in 1988-1989 are different from what was
the case in 1981.
OCAW argues that the judge properly reinstitut-
ed the original backpay remedy covering the entire
period of Armco ownership from 1981 to the time
the parties ' current negotiations result in impasse or
agreement . OCAW maintains that the only compe-
ble Steelworkers ' contract. Although it may have been a common busi-
ness practice for Armco to attempt to establish labor costs prior to the
acquisition of a plant, there was no enforceable obligation on the part of
Armco or OCAW to bargain prior to the December 31, 1981 purchase.
The violations of law to be remedied in these proceedings are not pre-
mised on the view that Armco may or may not have purchased the coke
plant. The Sixth Circuit enforced the Board's conclusions that Armco en-
gaged in unlawful conduct in violation of the Act warranting remedial
action, leaving no room for the scenario that Armco might never have
acquired successor employer status and no unfair labor practice would
have occurred . The only question before us is the extent of Armco's
monetary liability.
9 The parties stipulated that during the calendar year 1981 the coke fa-
cility sold and shipped nearly all of its coke production , amounting to
500 tons a day, to Armco. The coke facility's full capacity operation was
approximately 2800 tons a day In December 1981, 270 of the approxi-
mately 470 employees in the predecessor 's work force were on layoff
status.
ARMCO, INC. 419
tent evidence on the issue of the time required for
bargaining is the course of actual bargaining in the
1988-1989 negotiations. OCAW argues that the
1988-1989 negotiations disprove Armco's assertion
that if the parties had bargained in 1981, agreement
or impasse would have been quickly reached.' °
OCAW relies on evidence presented at the supple-
mental hearing that since negotiations commenced
between Armco and OCAW in June 1988, over 70
bargaining sessions had taken place , no impasse had
been reached, all OCAW-represented coke plant
employees participated in a 21-day strike," and a
number of important subjects remained unresolved,
including pension, seniority, overtime, wages, con-
tracting out of work, successorship language, job
bidding, and call-out pay.
We reject Armco's argument that backpay liabil-
ity should not extend beyond May 14, 1982, the
date the predecessor's contract expired. The Sixth
Circuit's remand relied on Kallman v. NLRB,
supra, in which backpay liability was limited to "a
reasonable period for bargaining" because the facts
demonstrated that the successor employer would
not have agreed to union demands to pay the
higher rate of the predecessor's contract. The Sixth
Circuit specifically held that "the employer is re-
sponsible for the pay difference for the time which
would have been required for bargaining." Absent
explicit language in the court's decision tolling the
backpay period at the expiration of the predeces-
sor's contract, we do not interpret the court's hold-
ing as placing such a limitation on the backpay li-
ability at issue here.12 We note that Armco has not
presented any evidence as to why it is more valid
to assume ' that the parties would have reached
agreement or impasse on or by May 14, 1982, than
any other date in the period in question.
We are not persuaded, contrary to our dissenting
colleague, that Armco's bargaining leverage in
1982 was so one-sided that it can be concluded that
negotiations between Armco and OCAW would
1° In presenting its argument that the only competent evidence con-
cerning the time that would have been required for bargaining is the
1988-1989 negotiations , OCAW apparently is arguing that these negotia-
tions are illustrative of the hard bargaining that would have taken place
at the time of the takeover . OCAW does not refer to the agreement
reached in September 1989. OCAW is not arguing that the backpay
period should be limited to the length of time of the 1988-1989 negotia-
tions, a period of approximately 15 months
i i After the Supreme Court denied Respondents ' petition for certiorari
on June 6, 1988 , officers of OCAW asked Armco Industrial Relations Su-
pervisor Allen to put into effect the predecessor 's contract. When Allen
informed them that the predecessor's contract would not be put into
effect, a picket line was immediately setup As part of the strike settle-
ment„ a portion of the predecessor 's contract was implemented.
18 Cf NLRB v. Dent, 534 F.2d 844 (9th Cir 1976), cited in Kallman,
supra, in which the Ninth Circuit refused to enforce a Board order be-
cause it provided for backpay at the predecessor's contract rates for the
entire period of ownership, a period longer than the union's agreement
with the predecessor.
not have continued beyond the May 14, 1982 expi-
ration date of the predecessor 's contract . ` Armco
stated that it purchased the Allied coke plant to
assure the availability of the quality of coke neces-
sary for Armco's steel production without having
to stockpile a large coke inventory .' 3 (Reliance on
an external coke supplier would not provide such
an assurance .) Armco also desired to avoid the sig-
nificant capital investment attendant to stockpiling
coke . 1 4 It is clear that Armco wanted to avoid any
interruption in the coke plant's production , as evi-
denced at the time of the takeover by its hiring the
predecessor's work force, and subsequently by its
expressed concern over work stoppages at the coke
plant.' 5 In support of its accretion defense in the
underlying proceeding, Armco contended that be-
cause coke is such a "vital ingredient" in the steel-
making process, the people in control of that ingre-
dient have "considerable [bargaining] leverage."'s
We note that to the extent that the depressed eco-
nomic conditions in the steel industry in 1982 and
1983 may have been a factor in the length of bar-
gaining, it is possible that because of those condi-
tions, Armco would have placed even greater sig-
nificance and monetary value on avoiding the costs
attendant to the interruption of production at the
coke plant, and might have continued bargaining in
an effort to avoid a work stoppage at the coke
plant.
As discussed above, we find no merit in Armco's
argument that had bargaining taken place in 1981
the parties would have reached impasse or agree-
ment by the December 31, 1981 takeover. We
agree with the judge 's analysis that if Armco had
recognized OCAW and postpurchase bargaining
had occurred , the bargaining would not have been
as one-sided as Armco asserts . Based on the factual
record before us, it is virtually impossible to deter-
mine with any certainty when postpurchase bar-
gaining would have resulted in an agreement or im-
passe.
In making a determination concerning the time
that would have been required for bargaining, the
Board is faced with a set of "less-than-perfect re-
medial choices because of the uncertainties created
'3 In the underlying proceeding in this case , Armco stressed the func-
tional interdependence of the coke and blast furnace departments, and the
physical damage that could be caused to blast furnaces as a result of the
unavailability of an acceptable quality of coke.
14 Armco stated in the underlying proceeding that each 30 days of
coke inventory represents a $7 million investment in unproductive assets,
and that a min mum prudent inventory at contract expiration , assuming
separate coke plant representation, would be 42 days of coke supply.
15 Armco asserted that it would be necessary to stockpile coke even if
it purchased the Allied plant , if the coke employees were found to be a
separate appropriate bargaining unit, rather than an accretion to the
Steelworkers ' unit at the Ashland Works plant.
i8 See Armco, Inc., supra, 279 NLRB at 1215.
420 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
by Respondent's conduct."17 Under the particular
circumstances of this case, we conclude that the
most reasonable approach is to look at the parties'
actual bargaining experience. Accordingly, we
limit Armco's backpay liability under the predeces-
sor's contract to a period of 15 months, which is
the length of time that it took the parties to reach
an agreement once they began negotiations.
In its brief Armco argues that the recently con-
cluded bargaining should not be relied on to deter-
mine the time that would have been required for
bargaining because Armco had less incentive in
1988 to reach agreement or impasse. In this regard,
Armco contends that in 1988-1989, in contrast to
the situation in 1981-1982, the predecessor's agree-
ment cost less than the current Steelworkers-
Armco agreement. We note, however, that this is
true only if the cost of the OCAW pension plan is
excluded. Armco also asserts that the Board's deci-
sion mandating recognition of OCAW had a signif-
icant impact on the parties' respective bargaining
positions. While this may be true, that impact is a
direct result of Armco's unlawful conduct.
Armco further contends that the economic situa-
tion at the coke plant is dramatically different now
when the plant is operating at full capacity, as con-
trasted with the situation in 1981, when many unit
employees were laid off and OCAW's main con-
cern would not have been premium monetary
terms but rather job security. Armco relies on testi-
mony to the effect that job security was a main
concern of OCAW in 1981 and that OCAW's con-
cern with respect to job security in 1981 is evi-
denced by its failure to file an unfair labor practice
charge or otherwise protest the unlawful recogni-
tion until after the sale had been completed and the
takeover had occurred. We find misplaced, howev-
er, the Respondent's reliance on OCAW's apparent
hesitancy to assert itself during the Armco takeov-
er negotiations with the predecessor and the
Armco-Steelworkers' contract negotiations.
OCAW's inaction was largely attributable to
Armco's unlawful conduct in refusing to recognize
OCAW and the posture Armco assumed that it
was "the only show in town," as well as the unfa-
vorable seniority and bumping rights policies nego-
tiated between Armco and the USWA with respect
to the unit employees. Whether job security would
have been OCAW's main concern absent Armco's
unlawful conduct is unclear. We emphasize that it
is proper to resolve uncertainties with respect to
the outcome of bargaining against the one whose
unlawful acts created those uncertainties. 18
17 State Distributing Co, 282 NLRB 1048, 1049 (1987).
to State Distributing, supra, 282 NLRB at 1049 See also NLRB v.
Transportation Managements Corp., 462 U S 393, 403 (1983).
Our remedy here gives meaning to the Sixth Cir-
cuit's remand by providing some recompense to
the victims of Armco's unlawful conduct but does
not require Armco to be bound by the terms of the
predecessor 's contract for the entire period of own-
ership where Armco has met its burden of proving
that it would not have agreed to the premium mon-
etary terms of the predecessor 's agreement. Rely-
ing on the parties ' actual bargaining experience to
determine the remedy in this proceeding meets the
test of reasonableness and is preferable to this
Agency's conjecture about the course of bargaining
had Armco fulfilled its statutory obligation to bar-
gain with OCAW in 1981 at the time of the take-
over of the coke plant.
As the court has already enforced our original
Order in all respects, except with regard to
Armco's backpay liability, our supplemental Order
is limited accordingly.
ORDER
The National Labor Relations Board orders that
the Respondent, Armco, Inc., Eastern Steel Divi-
sion, Ashland Works, Ashland, Kentucky, its offi-
cers , agents, successors, and assigns , shall take the
following affirmative action necessary to effectuate
the policies of the Act.
(a) Make whole the bargaining unit employees,
or former employees in the unit , for any losses they
may have suffered as a result of the Respondent's
unilateral changes in terms and conditions of em-
ployment, and failure to bargain with Oil, Chemi-
cal and Atomic Workers International Union,
AFL-CIO-CLC (OCAW), for the period from
January 1 , 1982 , through March 31 , 1983, in the
manner prescribed in Ogle Protection Service, 183
NLRB 682, 683 (1970), enfd. 444 F.2d 502 (6th Cir.
1971), with interest to be computed in the manner
prescribed in New Horizons for the Retarded, 283
NLRB 1173 (1987). 19 The appropriate bargaining
unit is:
All production and maintenance , all account-
ing clerical , office traffic clerical and stores
clerical , plant chemist, research technicians,
employees of the company at its Ashland,
Kentucky [coke] plant , but excluding assistant
plant controller , all employee relations depart-
ment, plant buyer , storekeeper, draftsmen, and
19 This make-whole requirement includes remitting all payments owed
to employee benefit funds and reimbursing employees in the manner set
forth in Kraft Plumbing & Heating, 252 NLRB 891 fn. 2 ( 1980), enfd. 661
F.2d 940 (9th Cir 1981), for any expenses resulting from the Respond-
ent's failure to make these payments. Any additional amount that the Re-
spondent must pay into the benefit funds shall be determined in the
manner set forth in Merryweather Optical Co., 240 NLRB 1213, 1216 fn. 7
(1970).
ARMCO, INC.
technicians of the plant engineering office,
professional employees, guards and all supervi-
sors as defined in the Labor-Management Re-
lations Act, 1947.
(b) Preserve and, on request, make available to
the Board or its agents for examination and copy-
ing, all payroll records, social security payment
records, timecards, personnel records and reports,
and all other records necessary to analyze the
amount of backpay due under the terms of this
Order.
(c) Post at its Ashland, Kentucky coke plant
copies of the attached notice marked "Appen-
dix."20 Copies of the notice, on forms provided by
the Regional Director for Region 9, after being
signed by the Respondent's authorized representa-
tive, shall be posted by the Respondent immediate-
ly upon receipt and maintained for 60 consecutive
days in conspicuous places including all places
where notices to employees are customarily posted.
Reasonable steps shall be taken by the Respondent
to ensure that the notices are not altered, defaced,
or covered by any other material.
(d) Notify the Regional Director in writing
within 20 days from the date of this Order what
steps the Respondent has taken to comply.
MEMBER DEVANEY, concurring in part and dissent-
ing in part.
I agree with my colleagues that the judge erred
in reaffirming his recommended Order that the Re-
spondent be liable for backpay from the date of its
unfair labor practices until the parties reached
lawful impasse or an agreement. I also agree that
the Respondent Armco has carried its burden of
proof that it would not have agreed to the econom-
ic terms of the OCAW's contract with its predeces-
sor, Allied.
However, I do not agree that the length of time
required to reach agreement on the parties' current
contract affords the most reasonable approach for
reckoning "the time that would have been required
for bargaining" pursuant to the remand by the
Sixth Circuit.' Although that approach has the
merit of taking into account the parties' bargaining
experience, it ignores the enormous and relevant
differences in the industry's economic picture and
the parties' relative bargaining strength in 1982 and
then in 1988-1989. I believe that, because of
Armco's greater leverage at the time of the pur-
20 If this Order is enforced by a judgment of a United States court of
appeals, the words in the notice reading "Posted by Order of the Nation-
al Labor Relations Board-" shall read "Posted Pursuant to a Judgment of
the United States Court of Appeals Enforcing an Order of the National
Labor Relations Board "
1 Like my colleagues, I accept the court's opinion as the law of the
case
421
chase, the parties would have bargained to impasse
or to an agreement with economic terms not great-
ly different than those in the USWA contract in
fewer than the 15 months projected by my col-
leagues. Accordingly, I would limit Armco's obli-
gation to pay its predecessor's rates to the period
from the takeover of the coke plant to the expira-
tion of the OCAW/Allied agreement, or from Jan-
uary 1, 1982, to May 14, 1982.
Respondent Armco has succeeded in persuading
both my colleagues and myself that it would not
have agreed to the terms of the OCAW/Allied
contract, and that it would have pressed for eco-
nomic terms on a par with its USWA contracts.
Unlike my colleagues, I am convinced that in 1982
Armco had sufficient leverage to bring the OCAW
either to impasse or to agreement on these terms.
According to the undisputed facts, the Allied coke
plant was operating at less than 20 percent of ca-
pacity at the time of the purchase, with approxi-
mately 60 percent of its -work force on layoff. The
plant was losing about $1.5 million per month.
With the majority of employees laid off and the
future of the plant uncertain, OCAW leadership
was anxious to protect the recall rights and job se-
curity of unit employees. This concern was ex-
pressed in communications from OCAW leadership
in 1982. With this understanding of the unit em-
ployees' prospects, it hardly seems likely that
OCAW bargaining representatives would be confi-
dent of achieving the economic terms of the Allied
contract with Armco. It is far more plausible that
they would have been open to the terms under
which other union-represented Armco employees
were working, the terms, in short, that Armco uni-
laterally imposed.
In addition, Armco later demonstrated at the
bargaining table its ability to evoke a response to
the industry's changing conditions. Armco's Ash-
land Works had suffered financial hardship begin-
ning before the purchase. In 1982 and 1983, the
Ashland Works sustained net losses, which resulted
in deep concessions in contracts negotiated in 1983.
The OCAW representatives would not have been
unaware of this picture. If Armco was able to
wrest economic concessions from the bargaining
representatives of its other employees in 1983, the
inference that it would have exercised sufficient le-
verage in negotiations with OCAW to roll back the
Allied agreement's "premium" wages is inescap-
able. It is implausible that for 15 months, during
which time it negotiated give-back agreements
with other unions, Armco would have continued to
pay the Allied contract wages and would have bar-
gained without impasse with OCAW,
422 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
Thus, I would look to an earlier date for the
conclusion of bargaining so that the Respondent
would be liable for backpay for a period that cor-
responds more closely to the likely course of
events if it had bargained. For these reasons, the
May 14 date appears to me to fit the facts of the
parties' relative positions in 1982.
As discussed above, I believe that this remedy
reflects a more realistic assessment of the pace of
bargaining between the parties, had it occurred,
while, equally significantly, providing recompense
to the victims of Armco's unfair labor practices.
APPENDIX
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
The National Labor Relations Board has found
that we violated the National Labor Relations Act
and has ordered us to post and abide by this notice.
Section 7 of the Act gives employees these rights.
To organize
To form, join, or assist any union
To bargain collectively through representa-
tives of their own choice
To act together for other mutual aid or pro-
tection
To choose not to engage in any of these
protected concerted activities.
WE WILL make whole the bargaining unit em-
ployees, or former employees in the unit, for any
losses they may have suffered as a result of our
unilateral changes in terms and conditions of em-
ployment, and failure to bargain with Oil, Chemi-
cal and Atomic Workers International Union,
AFL-CIO-CLC, for the period from January 1,
1982, through March 31, 1983, with interest. The
appropriate bargaining unit is:
All production and maintenance, all account-
ing clerical, office traffic clerical and stores
clerical, plant chemist, research technicians,
employees of the company at its Ashland,
Kentucky [coke] plant, but excluding assistant
plant controller, all employee relations depart-
ment, plant buyer, storekeeper, draftsmen, and
technicians of the plant engineering office,
professional employees, guards and all supervi-
sors as defined in the Labor-Management Re-
lations Act, 1947.
ARMCO, INC., EASTERN STEEL DIVI-
SION, ASHLAND WORKS
James E. Horner, Este, for the General Counsel.
Bernard J. Casey, Esq. and William H. Willcox, Esq.
(Reed Smith Shaw & McClay), of Washington, D.C.,
for the Respondent.
John W. McKendree, Esq. (McKendree, Toll & Mares), of
Denver, Colorado, for the Charging Party.
SUPPLEMENTAL DECISION
JOHN H. WEST, Administrative Law Judge. In my de-
cision in this proceeding, issued July 18, 1984, it was
concluded, as here pertinent, that Armco, Inc., Eastern
Steel Division, Ashland Works (Respondent Armco) en-
gaged in unfair labor practices in violation of Section
8(a)(1), (2), (3), and (5) of the National Labor Relations
Act.' Respondent Armco was ordered, inter alia, to
cease and desist recognizing Respondent Steelworkers
and, on the request of the Oil, Chemical and Atomic
Workers International Union, AFL-CIO-CLC (OCAW)
restore the status quo that existed prior to the implemen-
tation of the various unilateral changes by Respondent
Armco with respect to the rates of pay, wages, hours,
and other terms and conditions of employment of the in-
volved unit employees; reimburse such employees, or
former employees, for any monetary losses they may
have suffered as a result of the unilateral changes, with
interest thereon; and continue such payments until such
time as Respondent Armco negotiates in good faith with
OCAW or to impasse.
The decision was adopted by the National Labor Rela-
tions Board (Board).2
Respondents Armco and the Steelworkers filed peti-
tions for review with the United States Court of Appeals
for the Sixth Circuit, and the General Counsel filed a
cross-application for enforcement. The court, in Armco.
Inc. v. NLRB, 832 F.2d 357 (6th Cir. 1987), affirmed the
findings of the Board with the exception of the backpay
award. After indicating at 365 that there was no justifica-
tion for the "flagrant refusal of Armco ... to recognize
and bargain ... with the OCAW," the court went on to
state:
It has come to our attention that the remedy or-
dered against Armco may be too harsh, for it would
require the company to pay wages perhaps as much
as three dollars per hour more than the coke work-
ers have been receiving since the time of the plant's
purchase. In Kallmann Y. NLRB, 640 F.2d 1094 (9th
Cir. 1981), the court set aside part of a similar'reme-
dial order and remanded the matter to the Board.
The court there found that "[t]he function of the
remedy . . . is to restore the situation, as nearly as
possible, to that which would have occurred but for
the violation." Id. at 1103, citing Phelps Dodge Corp.
v. NLRB, 313 U.S. 177, 194, 61 S.Ct. 845, 852, 85
L.Ed. 1271 (1941). In Kallmann, the facts indicated
1 The decision also found that United Steelworkers of America, AFL-
CIO-CLC and its Local Union 1865 (Steelworkers) violated Sec.
8(b)(1)(A) and (2) of the Act. It is not necessary to treat those violations
further herem.
2 Armco, Inc., 279 NLRB 1184 (1986). Chairman Dotson dissented in
part.
ARMCO, INC.
that the employer would not have agreed to union
demands to pay the higher rate.
We believe that the same may be true in this
case . Thus, we hold that the employer is responsible
for the pay difference for the time which would
have been required for bargaining. We will remand
this matter to the . . . Board, however, for the fac-
tual determination required to decide the extent of
the backpay. As the court did in Kallmann, we will
leave it to the Board's discretion whether the reso-
lution of these issues should be left to bargaining be-
tween the parties.
The decision of the court was initially stayed on mo-
tions by Respondents in light of their petitions for re-
hearing en banc and for certiorari to the United States
Supreme Court. After the petitions were denied, the
Sixth Circuit's judgment of November 3, 1987, was en-
tered on June 30, 1988, with the court ordering "that the
decision of . . . [the Board] in this cause be and the same
is hereby enforced." On July 19, 1988, the Sixth Circuit
entered an amended judgment ordering that "the deci-
sion of . . . [the Board] in this cause, with the exception
of the back pay award which is remanded for a factual
determination of its extent, be and the same is hereby en-
forced."
In its Supplemental Decision and Order herein, 291
NLRB 1171 (1988), the Board, citing State Distributing
Co., 282 NLRB 1048 (1987), and Love's Barbecue Restau-
rant No. 62, 245 NLRB 78 (1979), stated that it contin-
ued to adhere to its view that the Love's Barbecue
remedy, namely, calculating backpay on the basis of the
contractual rates paid by the predecessor "because the
successor's unlawful failure to recognize and bargain
with the union has left us without an adequate or reason-
able alternative basis for calculating what rates would
have been arrived at through lawful bargaining," would
ordinarily be appropriate under circumstances similar to
those in the present case. Nonetheless, the Board accept-
ed the remand and, therefore, the court's -decision as the
law of this case. Regarding whether the court's remand
encompassed the entire status quo ante provision of the
Board's remedy, the Board concluded in its Supplemen-
tal Decision, after considering the parties'statements of
position, that
the court's decision and amended judgement should
reasonably be interpreted to mean that Respondent
Armco must abide by the terms and conditions es-
tablished by the predecessor employer's expired
contract, with the exception of those matters tradi-
tionally encompassed within backpay, until the par-
ties reach agreement or impasse.
Regarding backpay, the Board, in its Supplemental
Decision, stated:
This case will be remanded for reopening of the
record and further hearing before an administrative
law judge for the limited l,arpose of taking evi-
dence on the extent of Respondent Armco's back-
pay liability, i.e., the "time which would have been
required for bargaining." 832 F.2d at 365. A remand
423
hearing is necessary to determine whether Respond-
ent Armco would have agreed to the monetary pro-
visions of the predecessor employer's collective bar-
gaining agreement with OCAW; whether a good
faith impasse in negotiations would have been
reached as of a certain date; and whether Respond-
ent Armco would have lawfully implemented its
own monetary terms ag of that date . Because it is
uncertain whether Respondent Armco would have
agreed on the monetary terms of the prior contract
between OCAW and the predecessor employer, the
burden of proof must be placed on Respondent to
establish that it would not have agreed to the terms
of the prior contract, the date on which it would
have bargained to agreement, and the terms of the
agreement that would have been negotiated, or to
establish the date on which it would have bargained
to good-faith impasse and implemented its own
monetary proposals. The Board has consistently
held that such uncertainties should be resolved
against the one whose unlawful acts created them.5
5 State Distributing Co, supra.
The remand hearing was held in Ashland, Kentucky,
on April 25, 1989. Upon the entire record thus made, in-
cluding my observation of the demeanor of the wit-
nesses, and after due consideration of the briefs filed by
General Counsel, the Respondent, and jointly by Charg-
ing Parties OCAW and Richard M. Bank, I make the
following
FINDINGS OF FACT
Respondent Armco called two witnesses. The first,
James Wallace, who has been the corporate director of
industrial relations since 1977 and who is vice president
industrial relations, Eastern Steel Division, testified that
he was responsible for the labor matters of the involved
purchase; that he negotiated the terms and conditions for
coke employees with the Steelworkers; that the structure
of the involved bargaining unit was a key factor in
Armco's determination; that the situation was analyzed
and it was determined that the involved unit would be
accreted; that if the wages and benefits for the smaller
group of coke workers were higher than those of the
larger group of Steelworkers or if they were perceived
by the Steelworkers to be better, than the larger group
of Steelworkers would have demanded equal treatment
that the involved coke plant sale cost $100 million and
the cost was a significant concern because at the time al-
legedly the Eastern Steel Division was losing money;3
' The only documentary evidence introduced at the remand hearing
herein to support this statement was a letter, dated January 25, 1982,
from C. R. Flora, who at the time was president of the Eastern Steel
Division, to exempt salaried employees of the Eastern Steel Division.
Flora, in justifying an extended workweek of 5 5 days for these employ-
ees stated , as here pertinent , "We lost over $14.5 million last yeaz " The
following appears at p. 49, LL. 23-28, of my above-described decision:
With respect to the economic performance at Armco's Ashland
steel facility, Maddox testified that 1981 was a record year for the
steel industry and for Armco which made a total of $2.S million at the
Continued
424 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
that labor costs were a significant factor; that the in-
volved OCAW collective-bargaining agreement in effect
at the time was significantly different than the involved
Steelworkers agreement; that since the mid-1960s, at
other Armco locations where there is more than one bar-
gaining unit at a single plant or at satellite plants, the
basic terms of the settlement with the Steelworkers is ap-
plied to the other units or the other units receive less
than the Steelworkers;4 that Armco concluded in late
1981 that it would not adopt the terms of the existing
OCAW agreement and if Armco had to adopt said terms
there would have been no sale; that for tax purposes
Armco wanted to close the asset sale in 1981; that it
wanted to have the labor situation wrapped up in aid-
December 1981 and it set a self-imposed deadline with
the Steelworkers for December 15, 1981; that with the
exception of seniority arrangements for lines of progres-
sion, which Armco later unilaterally implemented, agree-
ment with the Steelworkers regarding the coke plant em-
ployees was reached on December 15, 1981; that if
Armco had been told that it could not accrete the coke
workers, it would have (a) declined to purchase the coke
plant, (b) purchased the assets only and hired employees
off the street and/or from other Armco locations, or (c)
went to OCAW and recognized the Union but negotiat-
ed a new agreement;5 that if Armco had approached
OCAW to work out an agreement, Armco would have
wanted the same terms as in the involved Steelworkers
agreements; that the deadline for an agreement would
have been no different whether bargaining with OCAW
or the Steelworkers; that if Armco could not have ar-
rived at an agreement with OCAW, it would have imple-
mented terms or hired new employees but he "suspect-
ed" that Armco would not have gone through with the
purchase because it "would have had a labor situation
[it] didn't want"; that in 1981 Armco had the lever-
age because the predecessor was in a bad financial situa-
tion, a number of the coke plant employees were on
layoff, and the coke plant employees had been told by
the predecessor that it wanted to tell this, the last of its
coke plants; that the bargaining climate in 1989 is signifi-
cantly different than 1981 because in 1989 the economic
situation is much better for Armco's Eastern Steel Divi-
sion and the Board proceedings have become a signifi-
cant factor in bargaining, "[a]nd they have slowed it
Ashland plant, that in each of the preceding years Armco had a
profit at the Ashland plant; but that in 1982 [after] the purchase the
Ashland Works lost $64 million before taxes and in 1983, up to the
time of the hearing, it lost $22 5 million [Emphasis added.]
No exceptions were taken by Armco to this finding. It appears that the
Ashland plant is a part of the Eastern Steel Division but it does not make
up the whole Eastern Steel Division.
4 Armco introduced an exhibit, R. Exh 2, which shows wage changes
from 1960 to 1986 at specified plants and the base of the settlements with
the Steelworkers at the specified plants as compared to settlements with
OCAW at Armco's Torrance California plant Wallace testified that it
shows from 1967 forward the settlements with the Steelworkers and
OCAW were identical in all respects , except in 1983 regarding a conces-
sionary agreement and with respect to new hires at Torrance.
5 Regarding pensions, Armco assertedly would have wanted to admin-
ister only one plan and the pension plan of OCAW was different in that
it included a cost-of-living provision Regarding wages, Wallace testified
that "I think the closer we would have got them to the Steelworkers, the
better it would have been for all concerned."
down no end"; and that Armco does not have the same
incentive to implement its own money proposals in 1988
and 1989 as it might have had in 1981-1982 because the
agreement the coke employees are working under is
somewhat legs costly than the Steelworkers agreement.
On cross-examination, Wallace testified that when
Armco took over the coke plant operation in 1982 the
plant was operating at 50-percent capacity; that he was
not sure but that he thought that sometime in 19836
Armco had the coke plant operating at 100-percent ca-
pacity; that when it purchased the coke plant Armco had
no intention to bargain with OCAW; that in deciding ac-
cretion was a viable approach Armco either received
bad advice or the decision fording to the contrary was a
"bad" decision; that since June 1988 Armco has bar-
gained with OCAW, meeting with the Union on what he
estimates to be more than 30 occasions and at no time
has Armco declared impasse; and that operating under
the 1979 OCAW agreement, excluding the cost of the
pension plan, in April 1989 would cost Armco less than
operating under the pertinent Steelworkers' agreement.
The second witness called by Respondent Armco,
Richard Allen, is a supervisor in industrial relations at
Armco. He testified, regarding the purchase of the in-
volved coke plant, that he participated in a number of
meetings with Steelworkers representatives beginning
December 2, 1981, with respect to the coke plant em-
ployees; that a deadline of December 15, 1981, was set
for reaching an agreement with the Steelworkers; that
Armco wanted to have the Steelworkers represent the
coke plant employees because it believed that there
would be a problem with more than one union; that the
purchase was a fragile deal to begin with and labor costs
were extremely important; that it was important that the
agreement covering the coke plant employees be funda-
mentally compatible with the contract Armco had with
the Steelworkers and if Armco offered more to the coke
workers, it would have to defend itself to the Steelwork-
ers as to why Armco did not offer similar terms to Steel-
workers; that the existing OCAW agreement was cer-
tainly not one that Armco would have accepted; that it
was understood by the Steelworkers that if the parties
did not reach agreement on the lines of progression or
the departmental supplementary agreement that applied
to the seniority rules and the method of filling overtime,
Armco could implement these provisions; that if Armco
had been advised that accretion was not a viable ap-
proach, Armco could have (a) walked away from the
purchase, (b) purchased assets only and hired new em-
ployees,, or (c) recognized OCAW and attempted to get
an agreement; that if Armco did bargain with OCAW,
Armco's objective would have been to get an agreement
compatible with the agreement with the Steelworkers, or
in other words, essentially the same terms; that the
timing would have been the same, namely mid-December
1981; that he believed that OCAW would have agreed
because the coke plant was not operating at capacity, the
6 Allen testified that the coke plant was operating at full capacity in
late 1982 or early 1983
? Allen pointed out that Armco had massive cutbacks at the Ashland
steel works at the time and no immediate prospects for recall.
ARMCO, INC.
predecessor wanted to sell the plant and the major con-
cern was job security; that if Armco did not reach an
agreement within the time constraints, it could have (a)
walked away from the deal, (b) purchased the assets
only, or (c) hired the coke plant employees and imple-
mented the terms and conditions; that on December 10,
1981, he was told by either Wallace or J. Edward
Maddox, the manager of human resources for Ashland
works of Eastern Steel Division, that if Armco was
unable to get a collective-bargaining agreement by De-
cember 15, 1981, the purchase would be seriously jeop-
ardized; that he and Maddox attended a meeting on De-
cember 5, 1981, with representatives of the Steelworkers
and OCAW and it was explained at the outset that the
meeting was for informational purposes and that Armco
intended to proceed with accretion; that another meeting
was held with OCAW representatives on December 19,
1981, and Maddox explained the terms of the December
15, 1981 agreement with the Steelworkers; and that
OCAW did not raise demands regarding the terms and
conditions of the agreement.
On cross-examination, Allen testified that because
Armco did not recognize OCAW and Armco would not
accept demands from OCAW, OCAW was not really in
a position to make demands; that accretion was the
viable alternative which Armco settled on; that since
June 1988 he has been Armco's chief negotiator in the 75
bargaining sessions which have been held with OCAW;
that the subjects which the parties have yet to resolve
are (a) pensions, (b) seniority, (c) overtime, (d) wages, (e)
subcontracting, (f) successorship clause, (g) job bidding
which is a part of seniority, and (h) call-out pay provi-
sion; that thus far Armco and OCAW have reached an
understanding on (a) vacations, (b) holidays, (c) safety,
(d) restoration of the dispensary which was taken away
from coke employees by Armco, (e) shifts, shift change,
and shift allowance, (f) workweek starting and quitting
time, (g) workday starting and quitting time, (h) shift re-
pairman included in the assignment of overtime, (i) rec-
ognition clause, and (j) management clause; that after
June 6, 1988, when the United States Supreme Court
denied Respondents' petition for certiorari the officers of
OCAW came to him and asked him to put into effect the
OCAW contract; that when he informed them that the
OCAW contract would not be put into effect, the repre-
sentatives of OCAW left and immediately set up a picket
line; that, as part of the strike settlement, a portion of the
OCAW agreement was put into effect; that regarding the
dispute about putting into effect the remainder of the
OCAW agreement, he is aware that the Board has in-
formed Armco of, possible contempt charges; that while
on direct he testified that one of the reasons for accre-
tion was that Armco needed and uninterrupted source of
coke during the 21-day strike in 1988, of all of the coke
plant employees, the plant continued to operate with su-
pervisory employees and he did not hear of Armco
losing any production during the strike; that he first
learned of the possible purchase from Maddox who told
him that the coke plant employees would be accreted
into the Steelworkers; that someone higher than Maddox
decided that the Steelworkers would be the bargaining
agent for the coke plant employees; that the purpose of
425
the meetings with the Steelworkers between December 5
and December 15, 1981, was to deal with the seniority of
the coke plant employees, a seniority supplementary
agreement for the coke department and lines of progres-
sion'for the coke department; that at the time there was
no debate with the Steelworkers regarding the general
terms and conditions of the agreement; that in 1988
Armco made offers to 55 formerly laid-off coke plant
employees who assertedly had previously lost their 3-
year recall rights; that the "infamous 55" were treated as
new employees in 1988 and given new seniority dates;
that while Armco, after the aforementioned Supreme
Court's denial of the petition for certiorari, began paying
the cost-of-living payments called for in the OCAW
agreement with the predecessor, Armco has not agreed
and is adamant that it does not want cost-of-living provi-
sions in the contract it is negotiating with OCAW; and
that in 1981 and in the 1983 and 1986 agreements with
the Steelworkers there are clauses which prohibit strikes
during the term of the agreement.
And on redirect Allen testified that he believed that
the priorities of OCAW were different in 1981 than they
are in 1988 and 1989 in that, on the one hand, in 1981
OCAW was concerned about job security and jobs at the
plant and, on the other hand, in 1988 and 1989 OCAW is
concerned about pensions, wages, and seniority; and that
while in 1981 the payroll costs or economic costs were
greater for the coke plant employees than the Steelwork-
ers, at the time of the remand hearing herein they were
less than the Steelworkers agreement."
Respondent's Exhibit 4, the 1986 agreement between
Armco and the Steelworkers, was introduced to show
the wages paid under the Steelworkers agreement. Asser-
tedly, the OCAW contract calls for lower wages and,
therefore, there is no incentive to go to impasse now be-
cause Armco is paying less than it would under the cur-
rent Steelworkers agreement.
General Counsel called two witnesses. The first, Dar-
rell Clay, who has worked at the involved coke plant for
almost 20 years and who was an officer in OCAW, testi-
fied that in December 1981 he, along with other repre-
sentatives of OCAW, was called into meetings by Armco
whose representatives made it clear that the purpose of
the meetings was informational or, in other words, to tell
the OCAW representatives what was taking place and
not to solicit the opinion of OCAW; that after Armco
8 Allen sponsored R. Exhs. 3(a) and (b). The former compares the pay-
roll costs under the pertinent OCAW agreement at the time Armco ac-
quired the coke plant in 1981 with the payroll costs under the involved
Steelworkers agreement for the first 4 weeks of 1982 It assertedly shows
that the payroll under the OCAW contract at the time of the acquisition
was 83 cents an hour more than the payroll cost per hour under the ap-
plicable Steelworker agreement The latter compares the payroll costs
under the same two agreements covering the first 2 weeks in 1982 under
the Steelworkers agreement . Assertedly this comparison shows that
during those 2 weeks the OCAW cost was 83 cents an hour more than
the Steelworkers cost . Neither R Exh. 3(a) or (b) takes into consider-
ation pensions or insurance benefits and Allen conceded that the variables
or vacation time could result in a change. When asked on cross-examina-
tion whether it was his understanding that 83 cents an hour would cause
this profitable transaction "to go down," he replied "I would not have
made that decision," and that he did not know whether or not such a
decision would have been made Allen also testified that Armco has spent
a lot of money updating equipment in the coke plant.
426 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
purchased the coke plant the terms and conditions
changed regarding seniority, wages, insurance, pensions,
and training programs; that after Armco purchased the
coke plant wages mostly decreased, there were fewer
holidays, less vacation, the medical insurance coverage
changed, call-outpay for 4 hours ceased, overtime distri-
bution changed,9 the cost-of-living allowance ceased,
employees in the crafts were reduced from an "A" rate
to a "C" rate and they were required to attend schooling
to get back the "A" rate; that while under the OCAW
contract a coke worker could bid on jobs anywhere in
the plant and the only limitation was a 6-month bidding
restriction as far as bidding equal or higher, under the
Steelworkers contract there were lines of progression
and if a coke worker went from one area of the coke
plant to another he had to start at an entry level and
work his way back up to the top as vacancies occurred;
that under the Caster Acquisition Agreement employees,
including those working at the coke plant, were re-
quired, after a vote of the employees was taken, to con-
tribute from their pay1O for the purchase by Armco of a
continuous caster; that the coke workers went out on
strike for 21 days in 1988 because Allen refused to put
the OCAW contract into effect, upon demand, after the
Supreme Court's denial of the petition for certiorari and
Allen told the OCAW representatives that the contract
in effect would be the same contract they had worked
under for the last 6.5 years; and that, as indicated above,
the strike settlement provided for the partial restoration
of the OCAW agreement.
On cross-examination Clay testified that in December
1981 the predecessor told coke plant employees that the
Armco purchase looked like it was the only game in
town; that coke plant employees did not exercise their
legal rights in December 1981 'because they did not
know if Armco would be vindictive and not recall laid-
off employees; that most of the coke plant employees did
not vote on the Caster Acquisition Agreement and if
they had voted, their numbers would have been enough
to defeat the proposal; and that the pay back is not a
guaranteed pay back.
Gale Riggs, who has worked for 20 years at the coke
plant and who is resident of the involved Local of
OCAW, testified that he met with the president of
Armco, Perdum, on April 22, 1989, and Perdum apolo-
9 Under the OCAW contract total yearly hours were calculated and
the overtime was distributed evenly Under the Steelworkers' agreement
overtime went back to zero on a weekly basis and the overtime was dis-
tributed with the most senior workers getting "first shot." Also, under
the Steelworkers ' agreement vacation pay was based on a formula which
took into consideration overtime in that the more overtime worked the
more vacation pay the employee would receive.
10 G.C Exh 3. Beginning in 1987 until shortly after the Supreme
Court denied the petitions for certiorari , Clay had 65 cents an hour taken
out of his pay, two holidays were eliminated, the holiday work rate was
reduced from double time and one-half to double time with the one-half
time going toward the caster and the May 1, 1986 cost-of-living adjust-
ment was eliminated . The caster is expected to be operational by April 1,
1990. The reductions are not permanent And , under the terms of the
agreement, the employees will be reimbursed , with interest , when the
steel plant produces 1 million tons of prime steel in a 12-month period.
Allen expected this to occur the first year of operation While Armco
ceased making the deductions when the Supreme Court denied certiorari,
no offer has been made to reimburse the coke plant employees.
gized for the fact that Armco did not recognize OCAW
for the last 7 years; that Perdum said that the purchase
of the coke plant not only saved the coke plant employ-
ees' jobs "but it played a significant factor in the recov-
ery through the concessionary times of Ashland works
and . . . [the coke plant] played as much [a] part as bail-
ing the entire Ashland works out as they did in saving
our jobs"; and that when he told Perdum that the coke
plant had paid for itself, Perdum replied that while it did
not have a profit, with the money Armco saved with the
coke plant by making its own coke and burning the coke
plant gas the purchase expense was more than recouped.
Allen testified on rebuttal that the Caster acquisition
Agreement affects the coke plant also since the caster
operation uses iron from the two blast furnaces and the
two blast furnaces consume coke; that Armco and the
Steelworkers entered into the agreement to ensure the
viability of the plant; and that while the carter will in-
crease production, it will do more to keep from losing
production than increasing it.
Contentions
On brief, Armco contends that it owes no backpay
since it and OCAW would have agreed to a no-premium
contract in December 1981; that Armco had every
reason to insist on a no premium contract in December
1981 and it had the leverage to obtain it; that it would
have offered the same terms to OCAW which it offered
'to the Steelworkers in 1981 and "[i]t goes without saying
that this would have been so;"" that
Armco could not subject itself-as it has not in fact
ever subjected itself-to gratuitous destabilization of
the wage and benefit structure it had bargained
with the ... [Steelworkers] for the great majority
of Ashland Works employees by granting premium,
windfall monetary terms to a small unit of the
Works which was then one-seventeenth of the size of
the larger unit.12
In the "hypothetical situation we are called upon here
to reconstruct, Armco had all the leverage" 13 since the
coke plant "was on its last legs";14 that Armco had the
right to walk away from the purchase until it was final-
ized, and, needing to have the labor relations situation of
the acquired facility established on a stable and cost ap-
propriate basis, it would have done so if an agreeable
resolution with OCAW was not achieved; that OCAW
had every reason to accept a no-premium contract in
December 1981 and no reason to resist it since at that
time the restoration and retention of jobs, not retention
of allied monetary terms, or even recognition of OCAW,
was the "main concern" of the coke plant employees;
that, "with life or death the issue, and facing the purchase
deadline ... the parties minds would have been riveted
and concentrated on bargaining, and on reaching agree-
ment";15 that agreement would likely have been reached
11 R Br., p. 9
12 Id. at 9 and 10.
1s Id at 10.
14 Ibid.
is Id at 14.
ARMCO, INC.
since none of the forces and circumstances that make for
delay in 1988-1989 existed in 1981-1982; that insistence
by Respondent that OCAW reach agreement with it
before the takeover, and that the monetary terms of the
deal be comparable to Steelworkers' monetary terms,
would not have been unreasonable, unfair, or overreach-
ing; that
OCAW could not then, any more than it can now,
reasonably have sought, much less insisted upon,
better monetary terms than the rest of the Ashland
Works receives. This is all the more the case in
light of the depressed economic circumstances in
1981 and 1982 of Armco's Eastern Steel Division
and the Ashland Works Co. . . . The survival of the
Ashland works was at stake. Premiums and windfalls
were absolutely and obviously not in the cards for
anyone. All had to pull together, and Armco would
not have considered any monetary terms that would
have divided instead of brought together all the
ashland Works employees, 16 [Emphasis added.]
CAW and the General Counsel and their witnesses did
not deny that Armco and OCAW would have agreed to
a no-premium contract in December 1981; that any sug-
gestions that Armco would not have bargained with
OCAW and that the time for bargaining in 1981 would
have been comparable to the time for bargaining in
1988-1989 would be frivolous; ' that "[t]he time-for-bar-
gaining hypothetical which the Board is examining on
remand was put forward by the Sixth Circuit's and the
Board's remand orders, and pre-supposes a hypothetical
scenario in which Armco recognized and bargained with
OCAW in December 1981;"17 that the great length of
time the bargaining is taking in 1988-1989 is no evidence,
much less proof, that bargaining in 1981 would have
been lengthy, or specifically that it would have extended
beyond the approximate December 15 deadline; that in
the current bargaining Armco could certainly have gone
to impasse and imposed its final offer long before now
but there was no necessity to do so because the mone-
tary terms of the old Allied contract are less than those
in the current Steelworkers' agreement with Armco; that
in no event would bargaining with OCAW have
stretched to the expiration date of the Allied/OCAW
contract, namely, May 14, 1982; that "the essence of the
Sixth Circuit's refusal to enforce the backpay order was
its recognition of the practical fact that the . . . [Steel-
workers] rates are the measure of what Armco would
have paid OCAW";18 that assuming arquendo that
Armco had gone ahead with the purchase despite the
lack of an agreement with OCAW, Respondent still
would have set initial terms, including monetary terms,
to be effective upon the commencement of operations of
the coke plant by Arnco on January 1, 1982, by either
setting the terms after advising OCAW that Armco
would not adopt the terms of the Allied agreement, and
consult with OCAW or by going to impasse on the
terms on January 1, 1982, or very shortly thereafter; that
16 Id. at 16
17 Id. at 18-19.
E8 Id at 23 fn. 11
427
there would have been ample time for sufficient meetings
in December 1981 to reach impasse;,that the caster reim-
bursement claim is without merit since (1) under the
terms of the caster agreement the reductions will eventu-
ally be reimbursed with interest and this moots any con-
tention that they raise a backpay reimbursement issue, (2)
the period involved here is beyond the "time which
would have been required for bargaining" which asser-
tedly Respondent has shown is December 1981 and
which is the sole focus of the Sixth Circuit's and the
Board's remand orders, and (3) the measure of backpay
regarding the caster reductions is the difference between
the compensation under the old Allied agreement and
compensation under the Steelworkers contract, not be-
tween different levels of Steelworkers compensation, and
that measure lasts for the time that would have been re-
quired for bargaining which assertedly would have been
only December 1981; that
[a]lthough there are two separate bargaining units
there are not two separate enterprises and therefore
premium pay for either enterprise-and particularly
the smaller of the two-is not an option. That is the
reason that the Sixth Circuit refused to enforce the
Board's backpay order.
the Sixth Circuit recognized that although the close
connections and mutual economic dependency of
the coke, plant and the rest of the Ashland Works
did not result in a single unit, those very connec-
tions and dependencies made it unthinkable; that
OCAW would ever be offered or ever succeed in
obtaining, or in the desperate circumstances in 1981
would even have sought, monetary terms incompat-
ible with the . . . [Steelworkers] monetary terms;19
and that
the many years it took for OCAW's unit position to
be vindicated, in addition to being no justification for
punitive or other compensation, were the inevitable
consequence, in our system of administrative and
court review, of hard fought efforts on both sides to
vindicate deeply held beliefs about what the law re-
quired or permitted. OCAW may say or feel that
the fact that Armco did not begin to bargain with
OCAW until six and a half years after the takeover
entitled them to monetary compensation. But as the
Sixth Circuit decision recognizes, in light of the cir-
cumstances of this case any such compensation
would be simply punitive. which is contrary to the
Act.20 [Footnote omitted and emphasis added.
General Counsel, on brief, argues that, with respect to
Wallace's testimony regarding OCAW reaching an
agreement , "the bottom line in all this is simply that it is
all speculative . . . [and] Respondent failed to introduce
a single piece of objective evidence to support its conjec-
ture";21 that the objective evidence available clearly
19 Id at 29, 30, and 31
20 Id . at 31 and 32
21GCBr3
428 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
shows that under no circumstances did Respondent ever
have any intention of bargaining with OCAW; that Wal-
lace's testimony at the 1983 hearing herein was that
Armco would not make the purchase if it had to succeed
to the agreement, or recognize the existing union; that
the "options" cited by Wallace in his testimony were
really not viable options from Respondent 's viewpoint
since the purchase price was too good to turn down, and
making an assets only purchase would have raised the
cost of the purchase with respect to hiring green em-
ployees off the street or former Respondent employees
who had worked at other locations ; that even if Re-
spondent had recognized OCAW in late 1981, it is
absurd to claim that Respondent would have quickly
reached an agreement with OCAW in that the objective
evidence of how quickly an agreement would have oc-
curred between the Respondent and OCAW is to review
the existing situation ; that when the United States Su-
preme Court denied the petitions for certiorari on June
6, 1988 , OCAW demanded that Respondent comply with
the Board's status quo order and reinstitute the 1979
OCAW contract with Respondent 's predecessor but Re-
spondent "refused to budge from its position that the
1979 contract was not going to be applied to the coke
plant employees"; 22 that even after a 21 -day strike Re-
spondent continued to refuse to restore the remaining
portions of the 1979 contract pertaining to training and
pensions ; that after approximately 75 negotiating sessions
for a new contract, the parties have yet to resolve many
subjects including pensions, wages, seniority, overtime,
subcontracting, job bidding and call-out pay ; that Re-
spondent can neither rely on its theory of bad legal
advice nor can it rely upon the subjective evidence it
presented that it would have bargained, if it had known
it was required to do so, and would have reached an
agreement quickly , since such subjective evidence is enti-
tled to little weight , especially when there is objective
evidence available ; that Respondent's overall strategy is
to never give in to the OCAW on anything unless it is
absolutely forced to and this callousness is best illustrated
by Respondent's conduct after it lost its petition for
review before the Sixth Circuit in that on November 25,
1987 , Respondent executed still another agreement with
the Steelworkers which directly affected the coke plant
employees, namely , the Caster Acquisition Agreement
which calls for a reduction in the pay and benefits of the
employees of both the steel mill and the coke plant em-
ployees in order to buy equipment at the steel mill; that
there would have been no bargaining , for the very rea-
sons stated by Respondent 's witnesses in the 1983 hear-
ing; that Respondent's assertion that it would have bar-
gained , if only it had not received bad' legal advice, is
not worthy of belief; that it is simply not credible for Re-
spondent to claim on the one hand , that it would have
quickly reached agreement in 1981 with OCAW, but on
the other hand, have taken 75 bargaining sessions to
agree on so little; that Respondent should not be permit-
ted to profit from its unlawful conduct, even though it is
clear from the testimony in the instant hearing , that Re-
spondent has already recouped its $100 million purchase
price; and that a finding is warranted that the Respond-
ent would not have bargained with OCAW in 1981
under any circumstances, and Respondent should be re-
quired to pay the backpay liability, including the reduced
pensions and the caster money.
On brief, OCAW contends that while Respondent has
the burden of proving the time which would have been
required for bargaining, it produced no evidence on the
matters for which these proceedings were remanded;
that Respondent's position is that since it found out that
it was violating the Act in 1981, the order of the Sixth
Circuit and the significance of the Sixth Circuit's reliance
upon Kallmann, supra, merely means that no backpay
remedy can be awarded for its violations of the Act be-
cause it would not have purchased the facility had it
known it could not accrete the Allied unit into the Steel-
workers' bargaining unit; that "[t]his ludicrous and outra-
geous disregard for addressing the issue mandated by the
Board in its Supplemental Decision at the very least
demonstrates that the Respondent has failed to meet its
burden of proof';23 that not one scintilla of evidence
was adduced during the remand hearing herein concern-
ing the negotiations Armco would have engaged in with
OCAW had Respondent recognized OCAW; that the
testimony of Respondent's witnesses that Armco would
have insisted on a December 15 negotiating deadline
with OCAW or Respondent would not have purchased
the coke plant totally misses the point of the Employer's
obligations under the remand order since it predates the
date when Armco acquired the obligation to reorganize
and bargain with OCAW as of December 31, 1981, and
again on April 15, 1982; that the only competent evi-
dence on the time required for bargaining is the 1988-
1989 bargaining to date; that in the remand decision
herein, the Board has repressed its concerns over the un-
certainties surrounding the establishment of the specula-
tive outcome of bargaining had the parties bargained or
what agreement might have been reached or what rates
would have been negotiated since such speculation is
usually outside the scope of competent evidence; that the
Respondent has the burden of proof and all uncertainties
should be resolved against it; that Respondent's failure to
meet its burden of proof warrants the determination of a
State Distributing, supra, bargaining remedy; that Re-
spondent cannot claim such a determination is a penalty
in violation of the Sixth Circuit's conclusionary state-
ments, the so-called Kallmann, supra, remedy or the pro-
tections against forfeiture contained in the Board's
remand decision; that the employees should be repaid for
the money lost by the caster deduction since this unilat-
eral change in a condition of employment mandates re-
imbursement to the employees; that in light of Respond-
ent's failure to met its burden of proof, maintenance of
the original backpay remedy is mandated; that' in order
to fully restore employees to the status quo ante, all em-
ployee trust fund accounts should be restored to the
status quo ante with respect to vesting rights and years
22 Id . at 4 23 OCAW's bnef, p. 11.
ARMCO, INC.
of service; and that the Board should enter no order
changing the remedial portions of its original order.24
Analysis
As noted above, this case was remanded to me for the
limited purpose of taking evidence on the extent of Re-
spondent Armco's backpay liability, i.e., the "time which
would have been required for bargaining." 832 F.2d at
365. The Board's remand Decision and Order goes on to
indicate that a determination must be made regarding (1)
whether Respondent Armco would have agreed to the
monetary provisions of the predecessor employer's col-
lective bargaining agreement with OCAW, (2) whether a
good-faith impasse in negotiations would have been
reached as of a certain date, and (3) whether Respondent
Armco would have lawfully implemented its own mone-
tary terms as of that date. And the remand Decision and
Order indicates that Armco has the burden of proof to
establish that it would not have agreed to the terms of
the prior contract, the date on which it would have bar-
gained to agreement, and the terms of the agreement that
would have been negotiated, or to establish the date it
would have bargained to good-faith impasse and imple-
mented its own monetary proposals.
Respondent's witnesses, Wallace and Allen, collective-
ly testified that if Armco had to recognize OCAW when
Armco purchased the involved coke plant, Armco
would have (1) declined to purchase the plant, (2) pur-
chased the assets only and hired employees off the street
and/or from other Armco locations, or (3) went to
OCAW and recognized the Union but negotiated a new
agreement. The terms of the agreement assertedly would
have been the same as those in the involved Steelwork-
ers agreement and the deadline for the agreement would
have been mid December 1981. And if Armco could not
have arrived at an agreement with OCAW, Armco
would have implemented terms, or walked away from
the purchase, with the latter being the most likely sce-
nario in those circumstances.
While asserting that either OCAW would have agreed
to Armco's terms in December 1981 to keep Armco
from walking or Armco would have implemented its
own terms or walked, Respondent Armco has not met
the burden of proof described above. Until it made the
purchase, there was no obligation on the part of Armco
to do so. In the circumstances of this case, there was no
duty to bargain until Arco made the purchase. Similarly,
declaring impasse and implementing its own terms before
24 Respondent Armco has filed a motion for leave to file a reply brief
to the OCAW brief. While Respondent asserts that the purpose of its
reply brief is to respond to OCAW positions not stated at the remand
hearing but stated in the OCAW brief, it is noted that a portion of Re-
spondent's reply brief is a reply to the brief filed by General Counsel,
that OCAW's arguments regarding the time for bargaining are arguments
based on remand hearing testimony; that the 55 former Allied employees
were brought up by counsel for OCAW during his cross-examination of
Allen, and that the position taken by OCAW on brief regarding pensions
was previously taken in its position statement which was filed with the
Board (with a certification that a copy was mailed to counsel for Re-
spondent Armco) before the Board's remand Order herein. If the special
circumstances of this proceeding warranted reply briefs, this would have
been provided for at the end of the remand hearing. It was not. Respond-
ent has not demonstrated any need for a reply brief. Respondent's motion
is hereby denied
429
there was a duty to bargain, before the purchase of the
coke plant, does not speak to the showing the Board
sought from Armco.
If Armco had recognized OCAW and bargaining had
occurred after the duty to bargain had arose, the bar-
gaining would not have been as one-sided as Armco as-
serts.
With respect to Armco's assertion that it would have
walked away from the deal if it could not get its way, it
is my opinion that the circumstances would have had to
be drastically affected by the labor costs of this deal to
have Armco walk away from it. To keep Ashland going
Armco needed the right kind of coke for the right price.
What were Armco's stated alternatives? It had two coke
plants (one in Texas and one in Ohio) which had to be
refurbished to bring them into compliance with the law.
If it had refurbished either one and used it to supply
Ashland, Armco would have also had to consider the
transportation costs and headaches. Armco could have
built a new coke plant at the Ashland facility. Armco did
not supply the comparative costs of the alternatives so in
addition to Allen not conceding or disputing that Armco
got a bargain basement price on the Allied coke plant,
one does not know how much Armco saved over the
other alternatives by buying this plant.25
Regarding, among other things, Armco's assertion that
it could have purchased the assets only and hired em-
ployees off the street and/or from other Armco loca-
tions, the following, which is a portion of the notes of a
meeting between Armco representatives and Steelwork-
ers representatives on December 15, 1981, appears at
page 25 of my aforementioned 1984 decision:
Mr. Wallace referred to the fact that OCAW was
not being recognized and explained that this was to
minimize exposures, He stated that Armco did not
want to deal with two unions and two expiration
dates and end up with the tail wagging the dog 80
to speak. He added that there was also a risk of
shutdown . . . . [Footnote omitted.] He went on to
explain that another reason for purchasing the plant
is cost competitiveness of the Ashland Works oper-
ations. We continued by saying that as a department
of the Ashland Works, the coke would be pur-
chased at cost and would ultimately decrease the
hot metal cost in the steelmaking end of the busi-
ness. He went on to say that the Coke Plant was
going to run wide open and utilize about 400 em-
ployees at full production.
Mr. Wallace stated that there are some other
considerations; one of which is the labor/man-
agement situation and the biggest question there as
he understood it, involves, seniority. Mr. Wallace
stated the Union [Steelworkers] may, ask why
Armco gave those employees from Semet Solvay
anything. He stated that there are two reasons for
as It is assumed that if the alternatives would have resulted in a savings
versus purchasing the Allied plant, Armco would not have made the pur-
chase or at least it would have pointed out herein how much more the
Allied purchase cost over the alternatives and argued that this was a
reason that it could not spend more on labor costs.
430 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
that; one is we cannot run it [the] coke plant with-
out -their expertise and experience. He explained
that Armco had two choices-one would be to man
the coke ovens with people off the street or to man
them with people who know how to run coke
ovens, and the conclusion is obvious.
Mr. Rusen [a representative of the Steelworkers]
asked if there were any possibility of one of the par-
ties seeking injunctionary relief. Mr. Wallace an-
swered that Armco was prepared for that, and in
fact, that had been made part of the contingency plan
when it was drawn up. He repeated Armco would
stop any injunctionary efforts. [Emphasis added.]
Mr. Wallace stated that he would like to talk
about Armco strategy in this acquisition. He stated
that first of all, Armco would not recognize the
OCAW. He went on to explain that secondly, those
employees will all be represented by the United
Steelworkers of America and its preference is to
have one bargaining unit. Mr. Wallace continued by
saying thirdly, that both parties must be aware of
Board charges. [Emphasis added.]
Wallace did not mention using coke employees from
other of Armco's facilities at this meeting. Armco
wanted the Allied work force. It was willing to and it
did violate the law in order to obtain (vis-a-vis in obtain-
ing) this work force.26 It would not have hired off the
streets. And in light of the specialized experience re-
quired to operate the coke plant, Armco would not have
used laid-off Steelworkers from the Ashland works. If it
did and if Steelworkers were willing to work at the coke
plant, Armco would have had to factor in the cost of
training and lost time. Apparently, to sole degree, the
same would apply with respect to bringing in coke plant
employees from other parts of the Country because they
most likely would have had to familiarize themselves
with the equipment and procedures utilized in the Allied
plant.
Regarding the terms and the deadline for a negotiated
collective-bargaining agreement with OCAW if Armco
had recognized OCAW, again I cannot credit the testi-
mony of Wallace and Allen. With respect to the dead-
line, as noted above, OCAW would have been under no
legal obligation to bargain let alone reach an agreement
by December 15, 1981, 2 weeks before Armco purchased
the coke plant. If negotiations took place after the pur-
chase, December 31, 1981, how reasonable is it to
expect, even for the moment not taking into consider-
ation Armco's recent negotiations with OCAW, that a
first-time collective-bargaining agreement, in the situa-
tion at hand, could have been achieved in a few weeks?
And if one takes into consideration the most recent nego-
tiations, notwithstanding Armco's contentions regarding
the dissimilarities, such an assertion is even more doubt-
ful. With respect to the terms, if Armco had recognized
and bargained with OCAW, the negotiations would not
have been, as noted above, one sided. Obviously it is one
26 See fn 28, infra
thing to tell the involved Union that you will not recog-
nize it and you will not bargain with it and it is quite
something else to inform the Union that you will recog-
nize it and you will bargain with it. Once the Union as-
certained that Armco intended to have full production
and most, if not all, of the coke plant employees back on
the job, it would have been a different "ball game."
In Kallmann, supra, the successor therein did not want
to employ the predecessor's work force and it had al-
ready hired the new work force at a lower wage than
called for by the agreement between the involved union
and the predecessor. It was not totally unreasonable,
therefore, to give credence to that law violator' s asser-
tion that it would not have paid the higher rate. In the
instant case, Armco wanted, indeed needed, to employ
the predecessor's work force. The Ninth Circuit, in Kall-
mann , relied on one of its prior decisions, NLRB v. Dent,
534 F.2d 844 (1976), in which the successor retained all
the former employees, but violated the Act by unilateral-
ly reducing wages. There the Ninth Circuit refused to
enforce the Board's backpay order because the Board or-
dered backpay at the prereduction levels for all hours
worked since the reduction. The court -stated:
Here, it is clear that the Dents [the successors]
would not have agreed to the wage rates which had
existed under the previous contract. They had de-
termined from an informal study of the prevailing
wage rates in the community for similar jobs that
many classes of their employees had been overcom-
pensated by . . . [the predecessor], and they had
concluded that this factor was one of the primary
reasons for . . . [the predecessor's] financial difficul-
ties.
The reason Armco gives for not wanting to meet the
monetary terms in the 1979 Allied/OCAW collective-
bargaining agreement is that it would not subject itself
"to gratuitous destabilization of the wage and benefit
structure it had bargained with the . . . [Steelworkers.]"
Armco did not show that the coke plant employees were
overpaid in terms of working in a coke plant in the area
involved. Armco did not assert that this factor was one
of the primary reasons for Allied's financial difficulties.
Armco's position is that it did not want the "tail wag-
ging the dog." And it pointed to possibility of a strike at
the coke plant as an example of the "tail wagging the
dog." But when tested under actual conditions during
the aforementioned 21-day strike, the "tail did not wag
the dog."
And other than Armco' s speculation regarding the
"tail wagging the dog" on contract monetary terms,
there is no proof in this record that if, to meet this situa-
tion, Armco agreed to the monetary terms (while possi-
bly getting certain commitments from OCAW) in the
1979 Allied/OCAW agreement, 27 it would have subse-
27 As indicated in fn. 8, supra, Allen, when asked on cross-examination
whether it was his understanding that 83 cents an hour (which did not
take into consideration pensions or insurance benefits) would have caused
this profitable transaction "to go down," testified that he would not have
made that decision and he did not know whether such a decision would
have been made.
ARMCO, INC.
quently had to give the steelworkers similar terms. Ac-
cording to Armco, the survival of the Ashland Works
was at stake. As noted above, Armco was willing to vio-
late the law to - obtain this work force.28 On the other
side of the coin, Armco has failed to show that if it-acted
lawfully it would not have met the monetary demands of
the Allied/OCAW contract. Self-serving declarations
from witnesses I do not credit who represent a Company
which, in my opinion, knowingly violated the law are
not sufficient to meet Armco's burden of proof.
Another point warrants mentioning, namely, the no-
strike protection which Armco gained by forcing the
coke plant employees into the Steelworkers. Such pro-
tection or at least some form of such protection29 would
have been a concern of Armco and perhaps this would
have been sufficient leverage, along with the purchase
price and the fact that-according to Armco-the sur-
vival of the Ashland Works was at stake, for Armco _to
accept the monetary terms of the 1979 Allied/OCAW
collective-bargaining agreement. Endless speculation
could be engaged in regarding what might have hap-
pened if Armco had acted lawfully. There is no need to
engage in such an exercise herein, however, since this
proceeding turns on whether Armco met its burden of
proof. Since Armco did not meet its burden of proof, a
2$ Armco's awareness of the possibility of it being regarded as a suc-
cessor is rather clear on this record. As noted in the material quoted
above dealing with the December 15, 1981 meeting between Armco's
representatives and the representatives of the Steelworkers, Wallace
talked in terms of "strategy," a "contingency plan," and "Board charges." I
do not credit Ins testimony that Armco received bad advice. In my view,
Armco was fully aware of that it would be held a successor if this matter
came before the Board.
29 It is noted that there was a no-strike provision in the 1979 agree-
ment between Allied and OCAW. See p 24 of G.C. Exh. 2 in the origi-
nal hearing herein.
431
result different than that reached in my decision of July
18, 1984, is not required.
Accordingly, the findings, conclusions, remedy, rec-
ommended Order, and, as here pertinent, "Appendix A"
of the July 18, 1984 decision herein are affirmed.30
30 While they cannot be resolved herein, and they in no way affect the
decision herein, certain other matters which have come up in this pro-
ceeding should be mentioned at this point. First, the above-described
Caster reductions were unilateral changes in conditions of employment.
Consequently, the coke employees should be reimbursed, with interest.
The above-described remand order is very specific, however, and it limits
my authority herein.
Second, the following appears on p. 70 of my July 18, 1984 decision.
As pointed out in Mego Corp . . [254 NLRB 300 (1981)], it would
contradict the purposes of the Act if the coke plant employees were
penalized by an order that on its face would seem to require Re-
spondent Armco to withdraw certain benefits which have inured to
the employees under the agreement unlawfully applied to them. Ac-
cordingly, the abrogation of said agreement shall be without preju-
dice to the employees' wages and other economic conditions now in
existence.
Obviously that language referred to the wages and other economic con-
ditions and benefits in existence when the agreement is abrogated. Nor-
mally, in situations such as the one at hand, benefits under an agreement
unlawfully applied are not withdrawn unless and until the Charging
Union requests that they be withdrawn. There is some mention in this
record of a request in July 1988 to implement the terms of the 1979
OCAW agreement and the eventual implementation of some of the terms
in settlement of a 21-day strike. I question, however, whether OCAW has
waived the right to demand that the higher monetary terms, whatever
they may be, in the Steelworkers agreement in effect when abrogation
was sought should not be reduced since Armco did not implement all of
the involved terms of the 1979 Allied/OCAW agreement In other
words, Armco takes the position herein that in 1989 the agreement the
coke employees are working under now is somewhat less costly than the
Steelworkers agreement Why? Should the monetary terms have been re-
duced? Again, my authority herein is very limited. Also, the record is not
fully developed on this matter
And finally, benefit fund issues are handled in the manner set forth in
fn. 26 of the Board's decision in Fremont Ford Sales, 289 NLRB 1290
(1988).