Arthur Corp.

National Labor Relations Board - Board Decisions

Dec 28, 1979

246 N.L.R.B. 1183 (N.L.R.B. 1979)

ARTHUR COR
Arthur Corporation and Sheet Metal Workers Inter-
national Association, Local Union No. 54, AFL-
CIO. Case 23-CA-7404
December 28, 1979
DECISION AND ORDER
BY MEMBERS JENKINS, PENELLO, AND TRUESDALE
On September 18, 1979, Administrative Law Judge
James S. Jenson issued the attached Decision in this
proceeding. Thereafter, the General Counsel filed ex-
ceptions and a supporting brief.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the Na-
tional Labor Relations Board has delegated its au-
thority in this proceeding to a three-member panel.
The Board has considered the record and the at-
tached Decision in light of the exceptions and brief
and has decided to affirm the rulings, findings, and
conclusions of the Administrative Law Judge and to
adopt his recommended Order.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor Rela-
tions Board adopts as its Order the recommended Or-
der of the Administrative Law Judge and hereby or-
der that the complaint be, and it hereby is, dismissed
in its entirety.
DECISION
STATEMENT OF THE CASE
JAMES S. JENSON, Administrative Law Judge: This case
was heard before me in Houston. Texas. on April 18, 1979.
The complaint was issued on March 20. 1979, pursuant to a
charge, first amended charge, and second amended charge
filed on February 13 and 20 and March 16. 1979. respec-
tively, alleging that Respondent violated Section 8(a)(3)
and (I) of the National Labor Relations Act, as amended,
by refusing on February 12, 1979, to reinstate economic
strikers who had unconditionally offered to return to work.
Respondent contends that, prior to the advent of the union
organizing, a decision had been made to close down the
mechanical (air-conditioning) division for economic reasons
upon completion of the pending jobs. When the strike oc-
curred Respondent hired subcontractors to complete those
jobs so that, when the strikers reported for work on Febru-
ary 12. there was no work available since Respondent was
no longer in the air-conditioning business in Houston. All
parties were afforded full opportunity to appear, to intro-
duce evidence, to examine and cross-examine witnesses. to
argue orally, and to file briefs. Respondent and'the General
1183
Counsel filed post-hearing briefs, both of which have been
carefully considered.
Upon the entire record in the case, and from my observa-
tion of the witnesses and their demeanor and having consid-
ered the post-hearing briefs, I make the following:'
FINDINGS OF FACI
I. JURISDICTION
Arthur Corporation. an Arizona corporation. with its
principal place of business located in Phoenix, Arizona, is
engaged in electrical and mechanical (air-conditioning)
contracting in Phoenix. Arizona, and Houston. Texas. Dur-
ing the past year. in the course and conduct of said busi-
ness, Respondent purchased and received goods and mate-
rial valued in excess of $50,000 which were shipped directly
to its Houston. Texas, facility from points outside the State
of Texas. Respondent admits, and it is found, that it is an
employer engaged in commerce within the meaning of Sec-
tion 2(6) and (7) of the Act.
II. Ilit LABOR ORGANIZAIION INVOIVED
Sheet Metal Workers International Association, Labor
Union No. 54. AFL-CIO, is a labor organization within the
meaning of Section 2(5) of the Act.
Ill. ISSUE
Whether Respondent violated Section 8(a)(3} and (I) of
the Act by refusing to reinstate strikers upon their uncondi-
tional offer to return to work.
IV. IHE Al I.(iEt) UNFAIR I.ABOR PRA(CII(CES
Facts
Respondent is engaged in the electrical and mechanical
(air-conditioning) contracting business in Phoenix. Arizona,
Houston. Texas. and from time to time in other areas of the
country. The operations at each location are divided into
two divisions, electrical and mechanical. The electrical and
mechanical division employees in Phoenix are represented
by locals of the International Brotherhood of Electrical
Workers and Sheet Metal Workers International Associ-
ation, respectively. When Respondent commenced its
Houston operations. in about 1976. it signed a contract with
a local of the International Brotherhood of Electrical
Workers covering the electrical department workers. and
the mechanical (air-conditioning) work was performed b3
subcontractors hiring nonunion employees. Alfred Valder-
rama, a vice president of Respondent. took over manage-
ment of the Houston operation in December 1977. Since he
felt the union employees were better trained than nonunion
employees, he contacted the Sheet Metal Workers Union,
the Charging Party herein, about furnishing Respondent
with employees for the mechanical division.2 He testified he
I Errors In the transcript are hereby noted and corrected
2Valderrama, a member of the IBEW for oer 24 years, testified that,
wherever Respondent does business. II recognizes and obltains employees
from the appropriate craft unlions
246 NLRB No. 176
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
was told by "Dave" that the Union was "not in residen-
tial."l Consequently, Valderrama advertised in the newspa-
per for qualified mechanical employees, and contacted a
local of the Pipefitters Union which, he testified, did not
seem to have an interest in furnishing Respondent with em-
ployees. He therefore asked, and received approval from
the IBEW local, to use electricians on air-conditioning
work. Because of the difficulty he encountered in obtaining
qualified mechanical employees, which resulted in bad in-
stallation work and consequent financial losses in the air-
conditioning end of the business, in February 1978 Valder-
rama and Melvyn Arthur, Respondent's president, dis-
cussed the possibility of closing down the Houston me-
chanical division.4 In about June 1978, Valderrama stopped
bidding on air-conditioning jobs. On or about September
20, he and Arthur had another discussion and it was de-
cided to give the mechanical division 60 more days to see if
it could be made to operate on a profitable basis. On No-
vember 20, Arthur and Valderrama had another discussion
and it was decided to shut down the Houston mechanical
division. As a result of that decision, between November 20
and December 7, 1978, Respondent returned to Phoenix
some of the equipment, including trucks and inventory,
used in Houston, returned other inventory to suppliers, and
sold some of its equipment.' William Perrin, called as a
witness by the General Counsel, testified that he had heard
rumors, "probably in December or before," and in any
event before the Charging Party filed a petition on Decem-
ber 9, 1978, that Respondent was going to discontinue
doing air-conditioning work.
On December 7, 1978, Krzesienski sent Valderrama a
letter claiming to represent a majority of the air-condition-
ing employees and requesting recognition. On December 8,
Krzesienski filed a petition in Case 23 RC 4735 seeking an
election comprised of employees engaged in the fabrication,
installation, and servicing of air-conditioning equipment in
Houston. Pursuant to said petition, a hearing was con-
ducted on December 28 and 29, 1978, and a Decision and
Direction of Election issued on January 16, 1979, directing
an election in the unit sought.' The Decision and Direction
Respondent worked on residential, as opposed to commercial or indus-
trial, construction. While Louis Krzesienski, an International organizer for
the Charging Union, testified the Union does not employ anyone named
Dave, his testimony does not cover late 1977 or early 1978, when Valder-
rama states he called the Union. Further, while the General Counsel intro-
duced in evidence through Krzesienski, a copy of a residential addendum,
apparently to show that the Charging Party does, in fact, have agreements
covering residential work, there was no showing it had contracts covering
residential work in lale 1977 or early 1978. Moreover, it was not shown that
Krzesienski was associated with the Charging Party in late 1977 and early
1978 and therefore had knowledge of who was employed by the Union and
whether it had contracts at that time covering residential work. Accordingly.
I credit Valderrama's testimony that he contacted the Charging Union in
late 1977 or early 1978, and was told that they did not cover residential
work.
' Valderrama's expertise was in the electrical field, and not mechanical. As
noted, he has been a member of the IBEW for over 24 years.
The Regional Office concluded that an allegation by the Charging Party
that Respondent had committed an unfair labor practice in connection with
withdrawing from employees the privilege of using the trucks was without
merit.
6 Respondent's attorney was not able to attend the representation hearing
and it appears Valderrama was also not available. I appears Respondent's
counsel sought, but was denied, a continuance of the hearing until after the
Christmas-New Year holidays.
of Election recites there are approximately 10 employees in
the mechanical division, and about 90 in the electrical divi-
sion which is represented for collective-bargaining purposes
by the IBEW. There is no evidence indicating that Respon-
dent had any knowledge that the ('harging Party was orga-
nizing its employees prior to the filing of the petition. Fur-
ther, Perrin testified that no company official ever spoke
negatively about the Union, and that he had never seen any
signs indicating the Respondent was antiunion.
On January 31, 1979, the Charging Union filed a charge
in Case 23-CA 7395 alleging that Respondent had violated
Section 8(a)(3) and (1) "by disbanding certain employee
benefits." This charge was withdrawn upon the Regional
Office's conclusion that it lacked merit.
On Monday. February 5, 1979, the air-conditioning em-
ployees went out on strike. On February 6, Valderrama
contacted three companies, Wethergreen, Airmont, and
Autry, to take care of emergency calls, and then to take
over and complete the unfinished jobs.' The record estab-
lishes that agreements were made during the week of Feb-
ruary 5 9 regarding the rates of pay the subcontractors
would receive, but that the rate schedule with Wethergreen
was oral and was not signed by either party until February
12.8 Airmont was to be paid in accordance with a written
bid submitted by that company. At a meeting of the strikers
on February 8, it was decided that Krzesienski would send
Respondent a telegram that the strikers would return to
work the following Monday, February 12. Accordingly, on
February 9. Krzesienski sent Valderrama a telegram stating
that all striking employees would return to work uncondi-
tionally Monday, February 12. 1979, at 7 a.m. The tele-
gram was read to Valderrama over the phone about 6
o'clock, Friday evening, February 9, and a copy was re-
ceived by him on February 12. On the morning of February
12, Perrin and four other strikers appeared and asked Val-
derrama if there was any work for them. Valderrama in-
formed them that Respondent was no longer in the air-
conditioning business and that the work had been subcon-
tracted out. The men then resumed picketing. The represen-
tation election was held on February 14. resulting in a
union victory, and a Certification of Representative issued
on February 26.9 The record shows that representatives of
both parties met in March. The complaint does not allege,
nor does the General Counsel contend, that Respondent
has refused to bargain with the Union.
CONCLUSIIONS
The General Counsel concedes that the strike which
commenced on February 5 was an economic strike, and
that Respondent's decision to shut down the mechanical
' Autry was apparently used on several emergency calls: Wethergreen to
complete work on the Bearing Way, Indian Spring. and Westfield Wayjobs;
Airmont on the Painter's Mill project; and both Wethergreen and Airmont
on the Old World Square project.
The record also shows that, during the period Respondent employed
people to do the air-conditioning work, it did nt have an air-conditioning
license required by the city of Houston; instead. it had been operating
"through licenses" of other employers.
*The payroll period for voter eligibility was the payroll period ending
immediately preceding January 16, the date of the I)ecision and Direction of
Election.
1184
ARTHUR CORPORATION
division in Houston was not caused by union activity. Ac-
cording to the General Counsel, subcontracting did not oc-
cur until February 12 and. therefore, the strikers were not
replaced prior to their unconditional offer to return to
work. Thus, he argues, the striking employees were entitled
to their jobs and Respondent's refusal to reinstate them
constitutes a violation of Section 8(a)(3) of the Act.
Respondent argues. and the evidence establishes, that the
decision to close down the mechanical division predated
any union activities and was motivated by economic con-
siderations. Steps toward closing the mechanical division
were taken prior to the advent of the Union when Respon-
dent commenced liquidating that part of the business by
disposing of trucks. other equipment, and inventory. " It
argues. citing Hawaii Meart Companv, Limited v. N.L.R.B.,
321 F.2d 397 (9th Cir. 1963) and N. .R. RB. v. Macka Radio
and Telegraph Co.. 304 lI.S. 333 (1938). that an employer
may replace striking employees with others in an effort to
carry on its business, and is not bound to discharge the
replacements if the employer has assured those who ac-
cepted employment during the strike that if' they so desired
their places might be permanent. Respondent argues. and
the record establishes, that the contractors- Wethergreen.
Airmont. and Autry - had been told, and they, along with
Respondent understood that they were to complete the
jobs then pending."
The applicable legal principles covering this case are set
forth in N. L. R. B. v. Townhouse T 1'. & A4ppliances, Inc.. 531
F.2d 826. 828 829 (7th Cir. 1976). as follows:
It is well settled that an employer violates Section
8(a)(3) and (I) of the Act by subcontracting part of an
0 The Regional Office concluded. after an investigation. that Respondent
did not violate the Act by disposing of the trucks, other equipment. and
inventor .
It While the General Counsel contends agreements with the uhcontrac-
tors were not made until after the unconditional offer of reinstatement. the
evidence convinces me that the): were made prior to that date. According to
his investigative affidavit, Valderrama contacted the three subcontractors on
February 6. the day following commencement of the strike. Valderrama
testified that. while the understanding on the amount Wethergreen was to be
paid on the Bearing Way. Indian Springs, and Westfield jobs was not signed
until Ftebruary 12, the agreement on the amounts had been made orally
during the previous week and has reduced to writing and signed on February
12 so there would be no misunderstanding. .ikewise. Airmont had submitted
a wntten bid. It appears Autry was used only on several emergency calls.
integrated business and dismissing the persons em-
ployed therein if the action is motivated at least in part
by antiunion considerations. N'LRB v. National Food
Stores. Inc., 332 F.2d 249 (7th Cir. 1964): NI.RB v.
Gcorge Roberts & Sons. ,Int.. dI/h/a The Roberts. Press,
451 F.2d 941. 945 946 2d Cir. 1971). Of course, as
Townhouse argues, the converse is true, i.e., an em-
ployer does not violate Section 8(a)(3) and (I) if he
makes a decision to subcontract solely for sound busi-
ness reasons. Ja Foods I,tc. v. N. .R.B.. 292 F.2d 317
(7th Cir. 1961): N.L..R.R. v. Rapid Binderyn, Inc.. 293
F.2d 170 (2d Cir. 1961).
In the case at bar it is significant that the decision to close
down the mechanical division was made for economic rea-
sons prior to the advent of the Union and that the evidence
fiils to show any union animus on the part of Respondent.
Quite to the contrary. the evidence discloses this Respon-
dent to have been in favor of employing union labor.
Accordingly. I find that the General Counsel has failed to
establish by a preponderance of the evidence. as is his bur-
den. that Respondent unlawfully failed and refused to rein-
state the strikers as alleged and therefore recommend dis-
missal of the complaint.
CoN( It SI()NS ()t LA.x
1. Respondent is an employer engaged in commerce
within the meaning of Section 2(6) and (7) of the Act.
2. The Union is a labor organization within the meaning
of Section 2(5) of the Act.
3. Respondent has not engaged in the unfair labor prac-
tice alleged in the complaint.
Upon the foregoing findings of fact, conclusions of law.
and the entire record, and pursuant to Section 10(c) of the
Act. I hereby issue the following recommended:
ORDER 2
The complaint is dismissed in its entirety
2 In the event no exceptions are filed as provided b Sec. 102.46 of the
Rules and Regulations of the National Labor Relations Board. the findings.
conclusions, and recommended order herein shall. as provided in Sec. 102 48
of the the Rules and Regulations, be adopted by the Board and become its
findings, conclusions, and Order. and all objections thereto shall be deemed
waived for all purposes
'r U.S. Government Printing Office: 1981-315-321/504
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