Brockway Motor Trucks

National Labor Relations Board - Board Decisions

Aug 11, 1980

251 N.L.R.B. 29 (N.L.R.B. 1980)

BROCKWAY MOTOR TRUCKS
Brockway Motor Trucks, Division of Mack Trucks,
Inc. and Local 724, International Association of
Machinists and Aerospace Workers, AFL-CIO.
Case 4-CA-8160
August 11, 1980
SUPPLEMENTAL DECISION AND
ORDER
BY CHAIRMAN FANNING AND MEMBERS
JENKINS AND TRUESDALE
On July 21, 1977, the National Labor Relations
Board isssued its Decision and Order in the above-
entitled proceeding. The Board found that Re-
spondent violated Section 8(a)(5) and (1) of the Act
by failing to bargain with the Union about its deci-
sion to close its Philadelphia branch facility, one of
17 facilities Respondent then operated in the east-
ern United States.
Thereafter, on July 19, 1978, the United States
Court of Appeals for the Third Circuit by a panel
majority denied enforcement of the Board's Order
because it found that the stipulated record did not
contain sufficient evidence with respect to the eco-
nomic considerations behind Respondent's decision
to close the facility.2 The court majority, having
discussed the law on this subject at length, denied
enforcement without prejudice to the Board to
commence additional proceedings consistent with
its opinion.
On November 28, 1978, the Board accepted the
court's remand and issued an order reopening the
record and ordering that a hearing be held before
an administrative law judge for "the purpose of re-
ceiving such further evidence as will permit defini-
tive and precise findings and conclusions as to the
economic considerations behind Respondent's deci-
sion to terminate the operation of its facility locat-
ed in Philadelphia, Pennsylvania," and for the issu-
ance of a supplemental decision. Pursuant to this
order, a hearing was held before Administrative
Law Judge Max Rosenberg on February 26, 1979.
On May 25, 1979, the Administrative Law Judge
issued the attached Supplemental Decision in this
proceeding. Thereafter, the General Counsel filed
exceptions and a supporting brief and Respondent
filed a brief in support of the Administrative Law
Judge's Decision.
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.
i 230 NLRB 1002 (1977).
Brockway Motor Trucks, Division of Mack Trucks, Inc. v. N.LR.B,
582 F.2d 720 (3d Cir. 1978).
251 NLRB No. 23
The Board has considered the record and the at-
tached Supplemental Decision in light of the ex-
ceptions and briefs, and the decision of the Third
Circuit Court of Appeals, and has decided to affirm
the rulings, findings, and conclusions of the Admin-
istrative Law Judge only to the extent consistent
herewith.
Our original Decision in this matter was based
on a stipulation of facts in which the parties agreed
that Respondent's decision to close its Philadelphia
branch facility was "based solely on economic con-
siderations." The stipulation contained no other
evidence regarding the nature of the economic
considerations behind the partial closing. Relying
on Ozark Trailers, Incorporated, etc., 161 NLRB 561
(1966), the Board concluded that Respondent's fail-
ure to bargain with the Union over the decision to
close this facility violated Section 8(a)(5) of the
Act since an economically motivated partial clos-
ing is a mandatory subject of bargaining. 3
While the court agreed with the Board that an
economically motivated partial closure may consti-
tute a mandatory subject of bargaining, it declined
to adopt what it regarded as the Board's per se rule
requiring bargaining whenever a partial closure is
based on economic reasons. Instead, the court
ruled that, while there is an initial presumption re-
quiring bargaining over the decision to close, the
facts must be evaluated and the conflicting interests
of the employer and union must be balanced in
each case to determine whether a duty to bargain
should be imposed. Since the court was unable to
apply its balancing test to the instant situation be-
cause the record contained no evidence of the pre-
cise nature of the economic basis for the closing,
the court declined to enforce the Board's Order,
but without prejudice to the Board's right to com-
mence additional proceedings to supplement the
record with the necessary evidence.
Accepting the court's analysis as the law of the
case, the Board remanded the proceeding to the
Administrative Law Judge for further evidence,
and for the issuance of a Supplemental Decision
consistent with the court's opinion. In his Supple-
mental Decision the Administrative Law Judge ap-
plied the court's analysis to the additional evidence
obtained at the hearing and dismissed the com-
plaint. Essentially, the Administrative Law Judge
reasoned that Respondent did not have to bargain
over the decision to close because the closing was
compelled by pressing economic need. The Gener-
al Counsel excepts to the Administrative Law
Judge's decision. While the General Counsel does
I The Board's finding involved only Respondent's obligation to bar-
gain over the decision to close. Respondent satisfied its obligation to bar-
gain over the effects of the closing.
29
30 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
not dispute many of the Administrative Law
Judge's factual findings with regard to the unprofi-
tability of the Philadelphia facility, the General
Counsel contends that, under the court's balancing
analysis, Respondent still had a duty to bargain
over the decision to close. Upon careful examina-
tion of the court's opinion, which, as noted, we
adopted as the law of this case, we find merit in
the General Counsel's exceptions.
From 1938 until the spring of 1977, Respondent
manufactured trucks at its plant in Cortland, New
York. Respondent sold and serviced these trucks at
17 company-owned branches and also through pri-
vately owned distributorships. Prior to, and at the
time of, the closing on July 20, 1976, the employ-
ees at the Philadelphia facility were represented by
the Union.
During the spring of 1976, Respondent and the
Union were engaged in negotiations for a new col-
lective-bargaining agreement covering the employ-
ees at the Philadelphia facility. Negotiation sessions
were held on March 19, April 12, and May 25. At
each of these sessions disagreement over wage
rates was the major obstacle to reaching a new
contract. Respondent proposed certain wage in-
creases, but the Union and the employees rejected
these offers because the raises proposed were lower
than those recently negotiated for the employees of
Mack Trucks, Inc., Respondent's parent company.
In defense of its refusal to match the increases
granted to Mack Truck's employees, Respondent
pleaded "inability to pay." At no time during these
negotiations did Respondent tell the union negotia-
tors that it would close the Philadelphia branch if
the Union did not accept Respondent's wage pro-
posals. However, it appears that the union negotia-
tors were aware that Respondent had been increas-
ing its reliance on privately owned dealerships and
that in recent months Respondent had closed a few
of its 17 company-owned branches.
After the unsuccessful negotiation session of May
25, the Philadelphia branch employees went on
strike. On July 20, while the employees were still
on strike, the Philadelphia branch manager notified
the employees that Respondent had decided to
close the Philadelphia branch, effective immediate-
ly. By letter dated July 22, 1976, the Union re-
quested bargaining with Respondent over the deci-
sion to close. On August 11, Respondent sent a
reply letter refusing to do so. Thus, as the court
noted, ". . . the employees neither consulted the
Union about the decision to terminate nor gave the
Union any advance notice of the closing."
It is undisputed that Respondent's decision to
close the Philadelphia facility was economically
motivated. The background facts show that in 1968
Mack Trucks, Inc., decided that Respondent
should begin decreasing its reliance on company-
owned branches and utilize more privately owned
distributorships to service and deliver the vehicles.
While Respondent was operating at a profit at this
time, it was believed that these private distributor-
ships could operate more efficiently and at a lower
cost. Pursuant to this policy, in the ensuing years,
1968-74, Respondent dispatched an increasing
number of its trucks to independent dealerships. In
January 1975, in furtherance of this policy, Re-
spondent decided to reduce the number of its com-
pany-owned branches from 17 to 8 by December
31, 1976. As a result, in 1975, Respondent began
closing some of its branches. 4 Also during 1975,
Respondent suffered its first unprofitable year since
1968, losing over $4 million. 5 As these economic
difficulties continued into 1976, Respondent was
forced in April of that year to announce a 10-per-
cent layoff at its manufacturing plant and at its re-
maining branch facilities.6
By July 1976, Respondent had closed seven
branch facilities, two short of the nine closures it
intended to complete by the December 31, 1976,
target date. As indicated previously, on July 20,
1976, employees notified that the Philadelphia
branch would be the eighth facility to be closed.
Respondent's general manager, Robert Mathews,
assertedly chose to close this facility because it was
losing more money than any of the remaining
branches. In this connection, the record shows that
the Philadelphia branch had been operating at an
annual deficit since 1969. 7 After the closing, the
building in which the Philadelphia branch operated
was turned over to Respondent's real estate depart-
ment, and it ultimately was sold for $300,000 to the
Philadelphia Authority for Industrial Development.
The Philadelphia branch was not sold to an inde-
pendent dealership.
Throughout the remainder of 1976 and in early
1977 Respondent continued to operate at a deficit.
4 During 1975 Respondent closed branches in Bethlehem, Pennsylva-
nia; Hartford, Connecticut; Boston. Massachusetts; Charlotte. North
Carolina; and Vineland, New Jersey.
s During the previous 7 years Respondent showed the following pretax
profit:
Year Earnings
1968 $1.372.405
1969 1,782,525
1970 2,015,727
1971 1,663,741
1972 1,650,474
1973 3.194,136
1974 2,297,249
" While Respondent reduced its losses in 1976, it still lost over $1.5
million.
I As the General Counsel notes, however, Respondent introduced no
profit-and-loss statements of the remaining branches so that comparisons
could be made.
BROCKWAY MOTOR TRUCKS 31
As a result, in April 1977, Respondent, including
its manufacturing operations, was completely liqui-
dated. Within the next 5 months Respondent closed
its remaining eight branches, with the Kingston,
Pennsylvania, branch being the last to close in
August 1977.
At issue here is whether, under the Third Cir-
cuit's analysis, Respondent has a duty to bargain
over its decision to close the Philadelphia branch
facility. We note that in considering this issue we
must examine the economic factors which motivat-
ed the decision to close in the context of the eco-
nomic conditions existing prior to and at the time
of the closing. While Respondent subsequently liq-
uidated its entire operations, it is clear that this was
not contemplated when Respondent initially began
phasing out the branch facilities in 1968, or when it
hastened this process in 1975. Nor was liquidation
anticipated when it closed the Philadelphia branch
in July 1976. Thus, while the ultimate demise of
Respondent may, in hindsight, seem to support the
view that bargaining over the Philadelphia closing
would have been a futility and therefore unneces-
sary, we do not find these subsequent events rele-
vant to the issue at hand.
As noted, the Third Circuit held that, while
there is a presumption that an economically moti-
vated partial closing is a mandatory topic of bar-
gaining, the particular facts and the conflicting in-
terests of the employer and union must be balanced
in each case to determine whether a duty to bar-
gain over the decision to close should be imposed.
The court proceeded to note various circumstances
where an employer might be justified in refusing to
bargain. Thus, in the court's view, it may be inap-
propriate to compel bargaining over the decision to
close where the action of a third party outside the
employer's control would make such bargaining
futile;8 or where the employer is in dire economic
straits and time is of the essence;9 or where negoti-
ations with another entity, such as potential pur-
chaser, would be jeopardized or made more diffi-
cult if the employer first had to bargain with the
union about the closing.10 Essentially, the court
suggested that an employer may be able to rebut
the presumption favoring bargaining where it can
be shown that, by bargaining, management's inter-
est in implementing its economic decision would be
unacceptably hampered. However, the court was
careful to note that an employer cannot avoid its
s Brockway Motor Trucks v. N.LR.B., supra at 738, referring to the
court's decision in N.LR.B. v. Royal Plating Polishing Co., 350 F.2d
191 (3d Cir. 1965), where an employer's property was designated for re-
development by a municipal housing authority and taken over via a con-
demnation proceeding.
9 Brockway Motor Trucks v. N.L.R.B., supra at 738.
10 Id. at 739.
bargaining obligation simply by arguing that plant
closures involve "complex issues of a managerial
nature about which labor has no expertise and
therefore cannot be expected to make constructive
suggestions in the course of bargaining."" In this
regard, the court explained that even if the union
lacks certain expertise with regard to some aspects
of the closure decision, it may be able to offer sug-
gestions with regard to other aspects of the deci-
sion, particularly those bearing on labor-related ex-
penses. Moreover, even if the union offers little in
an attempt to solve the employer's economic woes,
the court noted that the union might still be able to
avert a closing by convincing the employer that
such a step would cost it more in terms of postter-
mination expenses, such as severance pay, than it
would save. Finally, according to the court, even
where the employer remains intransigent, bargain-
ing would at least enable the union to make sugges-
tions about the decision's timing and implementa-
tion "in order to moderate the closing's impact on
the work force.' 2
With these thoughts in mind, we conclude that
the evidence here shows that Respondent's free-
dom to manage its business and determine the di-
rection of its enterprise would not have been im-
paired had it bargained with the Union over the
decision to close the Philadelphia branch facility.
Therefore, it had no lawful justification for refus-
ing to do so. In this regard, while it appears that
Respondent's decision to close this branch was
based on legitimate economic considerations, we
cannot know, without being clairvoyant, that nego-
tiations with the Union about the ecomonic prob-
lems which Respondent faced would have been
pointless. Indeed, since high operating expenses
appear to have contributed to the unprofitability of
the Philadelphia branch, and labor costs constituted
a significant part of such expenses, it is possible
that the Union could have made constructive sug-
gestions which could have influenced the decision
to close. At the very least, had the Union known
about the decision to close it may have taken a
more conciliatory position during contract negotia-
tions and accepted Respondent's wage proposal.
We note that these contract negotiations preceded
the closing by only 2 months. Thus, it appears
there was room for productive bargaining about
the decision to close, which at the very least could
have resulted in a deferral of the timing of the clos-
ing.
Nor was Respondent's refusal to bargain over
the decision to close justified by any need for "im-
" Id at 739
12Id. at 736
BROCKWAY MOTOR T UCKS '
32 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
mediate action." It must be remembered that in
July 1976 Respondent was not suddenly compelled
to close its Philadelphia facility because of some
changed or unanticipated economic picture.
Rather, a review of Respondent's long-term at-
tempt to phase out its company-owned branches
shows that time was hardly of the essence. Re-
spondent began decreasing its reliance on its
branch facilities as early at 1968. It continued to do
so during the early 1970's, a time during which Re-
spondent operated at a profit. While its economic
fortunes worsened in 1975, Respondent implement-
ed only a gradual program to close 9 of 17
branches during the next 2 years. No specific facili-
ties were targeted. In this context, it is apparent
that there was no sense of urgency involved in Re-
spondent's policy to phase out each branch facility,
and, more significantly, Respondent was not com-
pelled to choose Philadelphia as one of the nine
branches it closed. While the Philadelphia branch's
unprofitable record may'have made it a likely can-
didate for closure, the point is that, in July 1976, 6
months before the December deadline, there was
no demonstrated need for haste which would justi-
fy closing that facility without first bargaining with
the Union. We note once again that, at the very
least, bargaining may have enabled the Union to
delay the closing or convince Respondent to select
another branch. ' 3
As for the other situations in which the court
suggests a bargaining obligation should not be im-
posed, there is no evidence in the record that Re-
spondent's decision to close the Philadelphia
branch was based on the intervention of some third
party whose presence rendered bargaining between
the Union and Respondent futile.' 4 Nor does the
record show that bargaining with the Union would
have jeopardized any secret or delicate negotia-
tions between Respondent and a potenial purchas-
er.
In light of the foregoing, having balanced the
competing interests of Respondent and the Union,
we find no compelling reason for allowing Re-
spondent to escape its duty to bargain with the
Union over a matter which so vitally affected the
interest of the employees. In reaching this result,
we must not lose'sight of the minimal burden that a
13 In this connection it seems appropriate to quote the court's fn. 92:
In addition, the value of collective bargaining cannot be measured
solely in terms of the possibility of an alteration in the employer's
decision to close the facility. Merely by sitting down together to
consider the matter, the employer and employees may achieve im-
portant aims, including the enhancement of the sense that problems
confronting one of them also intimately concern the other. Even if
no immediate results flowing from such an awareness of their com-
munity of interests become evident, the value of fostering that atti-
tude between the parties should not be underestimated.
4 See fn. 8, supra.
duty to bargain places on an employer. Rather than
impinge on an employer's freedom to manage its
business, bargaining over a partial closing simply
requires the employer to discuss the matter at the
bargaining table, and may even benefit the employ-
er by obviating the need to close. Should the par-
ties fail to reach agreement the employer is free to
implement its plan to close the plant. Admittedly,
the court noted that where bargaining would clear-
ly be futile, or where bargaining would injure the
employer's business, either because of the need to
act swiftly or secretly, the equities might tip in the
employer's favor and justify a refusal to bargain.
However, according to the record, no such cir-
cumstances exists here, and, in the absence of such
circumstances, we believe that the court intended
an employer, such as Respondent, to bargain about
its economic decision to close. Indeed, following its
decision in this case this same court applied its bal-
ancing test in Electrical Products Division of Mid-
land Ross Corp. v. N.L.R.B.,15 and concluded that
the employer there had such a duty. As here, the
employer closed one of its plants because it became
unprofitable. Nevertheless, the court found that the
plant was not so unprofitable that the employer
had to close immediately without first bargaining
with the union. As we have done here, the court
emphasized that the closing was not based on some
sudden, or unanticipated situation which requried
immediate action and justified the employer's fail-
ure to notify the union earlier.
Accordingly, applying the court's analysis as the
law of this case, we find that Respondent violated
Section 8(a)(5) of the Act by refusing to bargain
over its decision to close its Philadelphia branch fa-
cility.
REMEDY
In the Board's original Decision in this case, the
Board sought to remedy Respondent's refusal to
bargain by ordering that it cease and desist from
engaging in such conduct and take certain affirma-
tive action designed to effectuate the policies of the
Act. The affirmative relief ordered required Re-
spondent (1) to bargain with the Union with re-
spect to the decision to close the Philadelphia
branch and the possible resumption thereof, (2) to
reinstate the Philadelphia branch employees to
their former jobs if Respondent agreed to resume
its Philadelphia operation, and (3) to make the em-
ployees whole by the payment of backpay from the
date of their termination to the date it commenced
to bargain in good faith or until the employees
15 88 LCI 11,974 (3d Cir. 1980).
BROCKWAY MOTOR TRUCKS 3
were offered reinstatement, whichever occurred
first.
While we have not reaffirmed our earlier finding
that Respondent violated Section 8(a)(5) of the
Act, albeit under the Court's analysis of the issue,
circumstances have changed since the issuance of
our original Decision which require us to alter the
affirmative relief originally ordered. In this regard,
9 months after Respondent closed its Philadelphia
branch, Respondent's entire operations were liqui-
dated. And, 5 months after the liquidation, Re-
spondent closed its last branch facility in August
1977. Mindful that the Board's remedies should be
"tailored to the situation that calls for redress,"'6
we believe that it would no longer be appropriate
to order Respondent to bargain over the decision
to close the Philadelphia facility since that closing
now has been subsumed by the closing of all Re-
spondent's facilities. Bargaining now would most
assuredly prove futile. In these circumstances, since
we will not order Respondent to bargain, it also
would be inappropriate for the backpay period to
run until Respondent satisfied its bargaining obliga-
tion. Rather, at this point, resolving all ambiguities
in the employees' favor regarding the impact bar-
gaining might have had on Respondent's decision
to close the Philadelphia branch, Respondent's
backpay obligation should not extend beyond the
time Respondent ceased all operations. According-
ly, we shall modify our original Order so as to pro-
vide that the Philadelphia branch employees are
entitled to receive backpay only from the time they
were terminated, July 20, 1976, until the time Re-
spondent closed its last branch facility, in August
1977. While we note that the Philadelphia branch
employees were on strike at the time of their termi-
nation, July 20, 1976, it is nevertheless appropriate
to provide backpay from that date since it clearly
would have been futile for the striking employees
to have requested reinstatement after the closing."
In addition, we shall modify our original Order so
as to require Respondent to prepare a preferential
hiring list of all employees in the appropriate unit
employed at Respondent's Philadelphia facility at
the time of the closing. In the event Respondent
resumes its operations in the Philadelphia area, it
shall offer the employees whose names appear on
this list full reinstatement to their former or sub-
stantially equivalent positions and bargain, upon re-
quest, with the Union as the exclusive representa-
tive of the employees in the appropriate unit.
For all of the foregoing reasons, the Board
adopts as its Order its original Order at 230 NLRB
16 \'L.R.B v Mackay Radio & Telegraph Co.. 304 S 337 (1938).
i7 Cf Abilities and Goodwill. Inc.. 241 NI.RH 27 (1979)
1002, as modified herein,'i and set forth below in
its entirety. '
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act as amended, the National Labor Re-
lations Board hereby orders that the Respondent,
Brockway Motor Trucks, Division of Mack
Trucks, Inc., Philadelphia, Pennsylvania, its offi-
cers, agents, successors, and assigns, shall:
1. Cease and desist from:
(a) Refusing to bargain collectively concerning
the decision to discontinue its Philadelphia, Penn-
sylvania, facility with Local 724, International As-
sociation of Machinist and Aerospace Workers,
AFL-CIO, as the exclusive representative of its
employees in the following appropriate unit:
All working foremen, mechanics, mechanics'
helpers, maintenance employees, miscellaneous
service employees, all parts department em-
ployees; but excluding office clerical employ-
ees, time study employees and all guards and
supervisors as defined in the Act.
(b) In any like or related manner interfering
with, restraining, or coercing employees in the ex-
ercise of the rights guaranteed them in Section 7 of
the Act.
2. Take the following affirmative action which
the Board finds will effectuate the policies of the
Act:
'" In our original Order we used the broad cease-and-desist lngualge
"in any other manner." However. we nows have considered this case in
light of the standards recently set frth in li'cknol Foodi, Inc -, 242
NLRB 137 (1979), and have concluded that a broad remedial order is in-
appropriate since its has not been show n that Respondent has a prochlll t
to violate the Act or has engaged in such egregious or ildespread mis-
conduct as to demonstrate a general disregard for the emploees' funlda-
mental statutor rights Accordingly. we shall modify our origilnil Ordcr
so as to use the narrow injunctive language "in an li hke r rlated
manner
J9 In his brief, the General Counsel contends for the first time that Re-
spondent's parent company, Mack Trucks, Inc. should he named ai a re-
spondent in this proceeding and be required to remedy the lnoilaiin
found. In support of his contention, the General Counsel alleges that
Mack Trucks controlled Respondent and directls participated in the
unfair labor practice. However. neither Mack Trucks' alleged inolve-
ment in the unfair labor practice, nor its alleged derivaive responsibility
for Respondent's actions. were ever raised as issues in this case Inespll-
cably, the General Counsel never sought to join Mack Trucks at the
hearing although by that time the General Counsel must have known of
Respondent's liquidation Thus, Mack Trucks never was afforded fair
notice and an opportunity to defend against the unfair labor practice alle-
gations, or to litigate the question of its relationship with. or control
over. Respondent I therefore swould be inappropriate at this late stage to
name Mack Trucks. Inc. as a respondent herein and therehb slubjlCC it o
our Order. See, e.g., Robert G. Shearer d/h/a George C Shearer Exhih-
tors Deliverv Serice. 246 NLRB No 62 (69) Ae note, howeer. hit
this does not preclude the General Counsel from litigiting the questiol iof
Mack Trucks' derivative liability during the compliance stage of this pri-
ceeding. See Sutheastern Envelope Co. Inc., & Southcastern E rpndi lopc.
Ic. (Diversjifild .4ltnblrv, Inc..) 24 Nl RI N hti 107), Coal Di, ri
Servi't, inc, 19 NIRB 102h (1972)
HROCKWAY MOTOR T UCKS 3
34 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
(a) Make whole the employees of Respondent
employed at its Philadelphia branch facility in the
appropriate unit by the payment of backpay from
the date of their termination, July 20, 1976, until
the last of Respondent's branches were closed in
August 1977.
(b) Prepare a preferential hiring list of all em-
ployees in the appropriate unit employed at Re-
spondent's Philadelphia facility at the time of the
closing. In the event Respondent resumes its oper-
ations in the Philadelphia area, it shall offer the em-
ployees whose names appear on this list full rein-
statement to their former or substantially equiva-
lent positions and bargain, upon request, with the
Union as the exclusive representative of the em-
ployees in the appropriate unit.
(c) Mail copies of the attached notice marked
"Appendix"2 0 to all of Respondent's employees
employed at its Philadelphia branch facility in the
appropriate unit at the time of the closing.
(d) Preserve and, upon 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.
(e) Notify the Regional Director for Region 4, in
writing, within 20 days from the date of this Order,
what steps Respondent has taken to comply here-
with.
0o In the event thai 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 National Labor Relations Board" shall read "Pos!ed l'ursu-
ant to a Judgment of the United Slates Court of Appeals Enforcing an
Order of theNational Labor Relations Board "
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,
as amended, and has ordered us to mail a copy of
this notice to all employees who were employed by
us at the Philadelphia branch facility at the time
that facility closed, July 20, 1976.
WE WILL NOT refuse to bargain collectively
concerning the decision to discontinue our
Philadelphia, Pennsylvania, facility with Local
724, International Association of Machinists
and Aerospace Workers, AFL-CIO, as the ex-
clusive bargaining representative of the Phila-
delphia branch employees in the bargaining
unit described below.
WE WILL NOT in any like or related manner
interfere with, restrain, or coerce our employ-
ees in the exercise the of rights guaranteed
them in Section 7 of the Act.
WE WILL prepare a prefential hiring list of
all employees in the appropriate unit employed
at our Philadelphia facility at the time of the
closing. In the event we resume operations in
the Philadelphia area, we shall offer the em-
ployees whose names appear on this list full
reinstatement to their former or substantially
equivalent positions and bargain, upon request,
with the Union as the exclusive representative
of the employees in the appropriate unit.
WE WILL make whole our Philadelphia
branch employees in the appropriate unit by
the payment of backpay from the date of their
termination, July 20, 1976, to the date we
closed our last branch facility in August 1977.
The bargaining unit is:
All working foremen, mechanics, mechanics'
helpers, maintenance employees, miscella-
neous service employees, all parts depart-
ment employees; but excluding office cleri-
cal employees, time study employees and all
guards and supervisors as defined in the Act.
BROCKWAY MOTOR TRUCKS, DIVI-
SION OF MACK TRUCKS, INC.
DECISION
MAX ROSENBERG, Administrative Law Judge: This
proceeding was heard before me in Allentown, Pennsyl-
vania, on February 26, 1979, upon a complaint filed by
the General Counsel of the National Labor Relations
Board and an answer interposed thereto by Brockway
Motor Trucks, Division of Mack Trucks, Inc., herein
called Brockway or Respondent. At issue is whether
Brockway violated Section 8(a)(5) and (1) of the Nation-
al Labor Relations Act, as amended, by certain conduct
to be detailed below. Briefs have been received from the
General Counsel and Respondent which have been duly
considered.
Upon the entire record made in this proceeding, in-
cluding my observation of the demeanor of each witness
who testified, I hereby make the following:
FINDINGS OF FACT AND CONCLUSIONS
1. THE BACKDROP
On September 23, 1976, the General Counsel issued a
complaint against Brockway alleging that it ran afoul of
Section 8(a)(5) and (1) of the Act when, on or about July
19, 1976, Brockway unilaterally and without notice to
Local 724, International Association of Machinists and
Aerospace Workers, AFL-CIO, herein called the Union,
BROCKWIAY MOTO)R TRUCKS 35
decided to discontinue operations at its Philadelphia,
Pennsylvania, branch, and thereafter failed and refused
to discuss or otherwise bargain with that labor organiza-
tion over the decision to do so. Respondent filed a timely
answer denying the commission of any labor practices
banned by the controlling legislation.
On December 27, 1976, the parties entered into a stip-
ulation of facts in which Respondent conceded the juris-
dictional predicates for this litigation. The stipulation fur-
ther recited that, from September 15, 1972, to September
14, 1975, the Union and Respondent were parties to a
collective-bargaining agreement covering an appropriate
unit of employees at the Philadelphia installation and
that, since September 15, 1975, the parties failed to reach
agreement on a new compact embracing the unit person-
nel. The agreed-upon facts went on to recite that, on
July 19, 1976, Respondent, unilaterally and without prior
notice to the Union, opted to close the Philadelphia op-
eration; that, on July 20, 1976, its Branch Manager
Robert H. Johnson advised the unit employees and the
Union that the facility would be immediately discontin-
ued; that, since July 20, 1976, Respondent has failed and
refused to discuss or otherwise bargain over its determi-
nation to cease operations at the Philadelphia branch;
and, that this decision was based solely upon economic
considerations.' Thereupon, the parties waived their
right to a hearing before an administrative law judge and
the issuance of an Administrative Law Judge's Decision,
and the proceeding was transferred directly to the Board
for adjudication.
On July 21, 1977, the Board issued a Decision and
Order in which it found the violation as alleged in the
complaint based exclusively upon the stipulated facts. 2 In
doing so, the Board observed:
The Act requires an employer to bargain with its
employees' representative about matters that affect
wages, hours, and terms and conditions of employ-
ment.2 Unilateral changes in employment conditions
may not be effectuated without bargaining regard-
less of whether a collective-bargaining agreement is
currently in effect. 3 This obligation remains not-
withstanding an employer's contention that such a
requirement significantly restricts its ability to
manage the business. 4 The underlying rationale for
requiring bargaining over such matters is that the
union-on behalf of and as representative of the em-
ployees-should be accorded an opportunity to
engage in a full and frank discussion regarding such
decisions.5 In this way parties are presented an op-
portunity to explore possible alternatives to accom-
modate their respective interests and thereby to re-
solve whatever issue confronts them in a mutually
acceptable way.'
Although it is unlikely that this Board or any
other body could ascertain whether a discussion
I At the hearing, the parties again stipulated that the closure was
prompted solely out f economic necessity and bore no overtones of an-
tiunion motivation The parties further stipulated at the hearing that Re-
spondent faithfully discharged its duty to bargain over the effects of the
branch's closing upon the unit employees.
2 230 NLRB 1002 (1(77)
that is held pursuant to the requirements of the Act
will cause any change in the tentative plans of an
employer, the results of a bargaining session are not
germane to the statutory requirements of the Act. 7
Rather, in the event a party refuses to bargain, the
Act requires that this Board order the parties to the
bargaining table where they must meet and confer
at reasonable times in good faith. In this way, the
law leaves undisturbed the parties' sole right to de-
termine the substantive terms of their relationship
while also guaranteeing, at the very least, the right
of each party-in this instance particularly that of
the Union-to have an opportunity to influence the
final decisions. Whether the final decision is actually
influenced is undoubtedly significant to the parties:
however, the purpose of the law and the Board's
sole function is to assure that such an opportunity in
fact exists.' To this end, the Board has consistently
held that by passing over the statutory representa-
tive of the employees and by failing to bargain over
the decision to close part of its business, an employ-
er violates Section 8(a)(5) and (1) of the Act.9 Ac-
cordingly, in the instant case, where it has not been
shown that Respondent's decision to close involved
such a "significant investment or withdrawal of cap-
ital" as to "affect the scope and ultimate direction
of the enterprise,"' ° we conclude that by refusing
to bargain with the Union concerning the decision
to close the Philadelphia facility, Respondent has
thereby violated Section 8(a)(5) and (1) of the
Act. l
z See Secs. 8(a)(5) and 8(d). See also l)hberhoard Paper Produtr,
Corp. v A'. R. B., 379 U S 203. 209-210 (1964)
: See, e g, 1 i'nn-DLixe Store Inc., 147 N RB 788, 78') (1964)
Fhis is true .ith respect o future operati nls Rotali Plaing ard Po,-
hlhtrlg Co. In(-. I ) NLRB 99), 994, f 12 (I 16h)
See. eg, Ozark Irdaer. Inc.. 161 NLRB 561. 568 (1960)
s Id
blherboard Paper Products Corp. s. A.L.R.B upra at 211
' [Fn 7 has been omitted from publication ]
" [Fn 8 has been omitted from publication ]
9 Ozark Tailer. supra. Royal Tvpcwriter Company. 209 NLRB
1006, 1)12 (1974); Metro Tranportaioin Services Co.. 218 NLRB
534, 535 536 (1975)
tO See General ortftorr Corp. GMtC Truck Coach Divoton. 191
NlRB 951. 952 (1971)
I See cases at fn 9. supra.
In fashioning a remedy for this statutory intrusion, the
Board, drawing upon its pronouncements in Metro Trans-
portation Service Company, Inc.,3 ordered Respondent,
upon request, to bargain with the Union over its decision
to close the Philadelphia facility and the possible resump-
tion thereof, and to embody any understanding reached
in a signed agreement. The Board also directed that, if
Respondent agreed to resume operations at that location,
it should offer reinstatement to the unit employees to
their former or substantially equivalent positions, and
make them whole for any loss of pay suffered from the
date of their termination on July 20, 1976, to the date it
commenced to bargain in good faith with the Union or
:' 218 NLRH S14 1l975)
BROCKWAY MOTOR T UCKS 5
36 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
until the employees were offered reinstatement, which-
ever occurred first.4
Thereafter, Respondent filed a petition for review of
the Board's Decision and Order with the United States
Court of Appeals for the Third Circuit, and the Board
filed a cross-application for enforcement of said Decision
and Order. On July 19, 1978, the Court, in a divided
opinion, denied enforcement of the Board's Order with-
out prejudice to the commencement of additional pro-
ceeding if it so desired. Speaking for the court majority,
Judge Adams observed at the outset that:
Many of the critical problems in contemporary legal
discourse arise out of the difficulty of bringing
ideals of public law into the basically private sector
of community life. That difficulty has both a philo-
sophical and legal dimension. It is necessary to ac-
commodate norms of private right and individual-
ism, fundamental to our society, with principles of
public responsibility, which require limitations on
the exercise of a purely private will. In jurispruden-
tial terms, legislatures and courts are called upon to
crystalize usable standards that reconcile the notions
of public duty and individual interest.
One area of labor law reflecting the intricacy of
bridging the private and public realms is that of the
duty to bargain imposed on parties participating in
the collective bargaining process. When a court is
asked whether an employer is obliged to meet with
a union before making a decision vitally affecting
the employees, as we are here, the task of meshing
public duty and private purpose is squarely present-
ed. In discussing the scope of the employer's duty
to bargain, it is essential to avoid overly simple so-
lutions and instead reflect the subtle interrelation-
ship between public law principles and conceptions
of private right.5
The majority thereupon embarked upon an extensive
review of the decisional evolution of the law relating to
an employer's duty to bargain concerning decisions to
subcontract work and to close one of its productive facil-
ities. Beginning with the Supreme Court's landmark
opinion in Fibreboard Paper Products Corp. v. N.L.R.B.,6
the Court traced the development of the bargaining con-
cept which that decision fostered, namely, that an em-
ployer's determination to subcontract work with the con-
sequent displacement of employees in an existing bar-
gaining unit fell within the scope of Section 8(d) of the
Act and thus was a mandatory subject of collective bar-
gaining because it touched upon "terms and conditions of
employment." 7 In Fibreboard, the employer has become
concerned over the mounting costs of its maintenance
4 In marginal reference, Chairman Fanning indicated that he would
continue the backpay obligation until such time as Respondent complied
with its oligation to bargain.
a Brockway Motor Trucks v. N. L.R.B., 582 F 2d 720, 722 (3d Cir. 1978)
6 379 U.S. 203 (1964)
7 In pertinent part, Sec 8(d) provides that "For the purposes of this
section. to bargain collectively is the performance of the mutual obliga-
tion of the employer and the representative of the employees to meet at
reasonable times and confer in good faith with respect to wages, hours
and other terms and conditions of employment . .
operations. In an attempt to abate those costs and with-
out harboring any antiunion animus, the employer sub-
contracted the work to an independent contractor,
whose employees thereafter undertook the maintenance
work, without notifying the collective-bargaining agent
of the unit employees or bargaining with that labor orga-
nization over its decision to do so. Noting that the main-
tenance work was still to be performed in the plant
under the employer's control, and that the mere replace-
ment of the unit employees with those of an independent
contractor did not alter the company's basic operation or
entail further capital investment, the Supreme Court con-
cluded that imposition of a bargaining obligation upon
the employer would not have significantly abridged his
freedom to manage the business. It therefore held that
the employer had violated Section 8(a)(5) and (1) of the
Act by failing to bargain over the subcontract.
Judge Adams then observed for the majority that,
shortly after Fibreboard, both his Court and the Eighth
Circuit handed down opinions in cases which they found
to be factually at variance with Fibreboard and hence de-
clined to impose a duty to bargain upon the employers
involved. In N.L.R.B. v. Royal Plating & Polishing Co., s
the Third Circuit ruled that an employer had no statu-
tory duty to bargain about its determination to close one
of two plants which were engaged in the business of
metal plating and polishing. Finding that the employer
had been suffering from "severe" economic losses for
years prior to the closure and that the property on
which the affected plant was located had been appropri-
ated by a local housing authority for redevelopment pur-
poses, the Court reasoned that the employer was not ob-
ligated to bargain with the incumbent union over the de-
cision to partially close its business on the dual grounds
that the closure entailed a major "commitment of capital
investment" and that there was "no room for union ne-
gotiations" in light of the housing authority's action. In
N.L.R.B. v. Adams Dairy, Inc.,s the Eighth Circuit had
before it a case in which a dairy company decided to ter-
minate the distribution of its own milk and thereupon
sold its milk trucks. Thereafter, the milk products were
conveyed to an independent contractor who immediately
took title to and distributed them along routes of its own
choosing, and the dairy company retained no operational
control over the contractor's performance. Contrasting
this situation with that posed in Fibreboard, the Eighth
Circuit refused to enforce the Board's bargaining order
against the employer.
After Royal Plating and Adams Dairy, the Board had
occasion to explore the impact of Fibreboard in the con-
text of a partial closing of a business in its consideration
of Ozark Trailers, Inc. 10 In the latter case, the employer
unilaterally decided to close one of its plants which man-
ufactured refrigerated truck bodies without prior notifi-
cation to or bargaining with an incumbent labor organi-
zation. Although recognizing that the Supreme Court
* 350 F.2d 191 (3d Cir. 1965)
9 350 F.2d IO8 (8th Cir. 1965), cert. denied 382 U S. 1011. The Su-
preme Court had remanded this case to the Eighth Circuit for reconsider-
ation in light of its Fibreboard decision.
"' 161 NI.RB 561 (1966)
BROCKWAY MOTOR TRUCKS 37
did not deal explicitly with the issue of a partial closure
in Fibreboard, the Board nevertheless concluded that the
reach of that tribunal's rationale encompassed such a
business venture. Respectfully disagreeing with the
Courts of Appeals for the Third and Eighth Circuits, the
Board commented in Ozark Trailers that:
. . we do not believe that the question whether a
particular management decision must be bargained
about should turn on whether the decision involved
the commitment of investment capital, or on wheth-
er it may be characterized as involving "major" or
"basic" change in the nature of the employer's busi-
ness. True it is that decisions of this nature are, by
definition, of significance for the employer. It is
equally true, however, and ought not be lost sight
of, that an employer's decision to make a "major"
change in the nature of his business, such as the ter-
mination of a portion thereof, is also of significance
for those employees whose jobs will be lost by the
termination. For, just as the employer has invested
capital in the business, so the employee has invested
years of his working life, accumulating seniority, ac-
cruing pension rights, and developing skills that
may or may not be salable to another employer.
And, just as the employer's interest in the protec-
tion of his capital investment is entitled to consider-
ation in our interpretation of the Act, so too is the
employee's interest in the protection of his liveli-
hood. . ...
The Board therefore concluded that the employer had
offended the provisions of Section 8(a)(5) and (1) of the
Act by disregarding the participation of the affected em-
ployees' bargaining agent in the consideration of the par-
tial closure decision.
Subsequent to Ozark Trailers, the Board was again pre-
sented with the issue of an employer's duty to negotiate
with a union over an economic decision to close one of
its plants and sell it to another corporate entity in Gener-
al Motors Corp., GMC Truck & Coach Division.L2 In a
split opinion, a Board majorty there interpreted Fibre-
board as having applicability solely to subcontracting
cases and not to situations involving plant closings or re-
movals. The majority therefore dismissed a proceeding in
which the employer had been charged with unlawfully
refusing to bargain with a union over a decision to close
one of its factories for economic reasons. 13 However,
since the General Motors Corp. decision, the Board has
continued to utilize its Ozark Trailers' rationale and result
as guideposts in imposing a statutory duty to bargain
upon employers over an economic decision to curtail op-
erations at a plant. 4
Although the Third Circuit's majority opinion herein
recognized that the interpretation placed upon Fibreboard
LI Id. at 566.
12 191 NLRB 951 (1971).
t3 In his dissent, then-Member Fanning announced that he would
adhere to the explicit reasoning embodied in Ozark Trailers and find the
violations of Section 8(a)S) and (1) of the Act as alleged.
t' E.g., P. B. Mutrie Motor Transportation. Inc., 226 NLRB 1325
(1976); Production Molded Plastics. Inc.. and Detroit Plastic Molding Co.,
227 NLRB 776 (1977); Remke Central Division. Inc.. and Kinnaird Body
Works Inc., 227 NLRB 1969 (1977).
by the Board in Ozark Trailers had received Federal ap-
pellate support in a number of cases involving subcon-
tracting,' 5 plant removals,' 6 and plant closure, 7 for
economic reasons, the majority expressed an unwilling-
ness to adopt a per se approach in assessing the legality
of a refusal to bargain over an economically motivated
decision to subcontract or close a plant. In the majority's
view, when a court is asked to determine whether an
employer has a duty to engage in collective bargaining
before making a decision partially to close a facility
based exclusively on unspecified "economic consider-
ations," it is faced with two divergent theses. One such
thesis, styled as the per se approach, dictates either that
the preeminence of public duty is such that the employer
always has an obligation to bargain about a partial closing
or, alternatively, that the status of the employer's private
interest is such that there never is a legal responsibility to
bargain over the matter. This approach, which was es-
poused by dissenting Judge Rosen, was rejected by the
majority as inconsistent with its analysis of Fibreboard.
Instead, the majority opted for the "more reasonable
method, which is more responsive to the values of col-
lective bargaining, [which] is to begin with the statutory
commitment to collective bargaining and to proceed to
balance the parties' interests in the decision at issue."
After evaluating the various ingredients which might jus-
tify an employer's refusal to respond to a summons to
bargain with a union over a decision partially to close his
enterprise, the Court majority concluded that the record
before it, bottomed merely upon the parties' stipulation
and the Board's finding that Brockway had decided to
close its Philadelphia branch solely for "economic" rea-
sons, was insufficient to assist it in determining whether
the ingredients which prompted Brockway's decision to
close the branch excused it from prior consultation with
the Union. The Court pointed out that:
. . . it . . . appears inappropriate to enforce an
order predicated on an unfair labor practice when
we do not know with specificity what the circum-
stances surrounding the employer's decision to close
its facility actually were. The somewhat enigmatic
phrase, "economic considerations," is of little help
in the process of ascertaining whether the employ-
er's interests in this case were in fact of a magnitude
and immediacy that would make unacceptable and
unfair the imposition of a duty to bargain.
It concluded that
Because the precise nature of the conditions leading
to Brockway's decision is not known, we do not
have the desirable, firm factual underpinning neces-
sary to utilize the balancing approach enunciated in
this opinion. For that reason, we shall not at this
is NL.R.B. v. American Manufacturmng Co., 351 F.2d 74 (5th Cir
1965).
'6 'Wel/ronic Company . L R. B., 419 F.2d 1120 (6th Cir. 1969), cert
denied 398 U S. 939 (1970)
17 NL.R.B. v. Winn-Dixie Stores. Inc., 361 F.2d 512 (5th Cir 1965),
cert denied 385 U.S. 935
RKWAY MOTOR T UCKS 7
38 DECISIONS OF NATIONAL I.ABOR RELATIONS BOARD
time enforce the Board's order relating to an unfair
labor practice by Brockway. 8
On November 20, 1978, the Board accepted the
Court's remand and issued an Order reopening record
and remanding proceeding. In that Order, the Board di-
rected that a hearing be held before an administrative
law judge "for the purpose of receiving such further evi-
dence as will permit definitive and precise findings and
conclusions as to the economic consideration underlying
Respondent's decision to terminate the operation of its
facility located in Philadelphia, Pennsylvania, and such
other evidence as may be deemed relevant and material
to the issues raised in the court's decision." The Board's
Order further directed the Administrative Law Judge to
prepare and serve on the parties a Decision based upon
such evidence in light of the court's opinion.
II. THE EVIDENCE ON REMAND
A. The Economics
Since 1938, Brockway engaged in the manufacture and
sale of trucks at its sole plant and headquarters in Cort-
land, New York. Following their manufacture, these ve-
hicles were shipped to branches located in various east-
ern cities where service parts were installed according to
customer specifications after which the trucks were de-
livered to the purchasers. In October 1956, Brockway
was acquired by Mack Trucks, Inc., herein called Mack,
and thereupon became a division of the latter. However,
since 1956, Brockway's business operations have re-
mained separate and distinct from those of Mack.
Robert J. Matthews, Brockway's general manager, tes-
tified without contradiction and I find that, as early as
1968, he and his executive staff at Cortland conducted an
economic study of the entire Brockway system to ascer-
tain why the enterprise as a whole was unable to operate
at a profit. In consequence of this survey, a decision was
reached progressively to phase out Brockway's branches
and utilize privately owned distributorships to service
and deliver the vehicles. This determination was prompt-
ed by the discovery that private distributorships could
operate more efficiently and at less cost to Brockway
than the branches, and was geared to follow the lead of
Mack as well as all other competitors in the trucking and
automotive industry who had opted in favor of inde-
pendent distributorships based upon similar consider-
ations. In 1968, Matthews commenced to implement this
decision. The record discloses and I find that, whereas
only 352 vehicles were delivered to independent distribu-
tors and 1,059 trucks were sent to Brockway's branches
in 1968, during each succeeding year thereafter the
number of deliveries to the distributors escalated marked-
ly until, by 1976, 1,250 trucks were dispatched to inde-
pendent distributorships and only 543 found their way to
the branches.
In January 1975, Brockway maintained branches in 17
cities, all of which performed the same work on the
trucks received from the Cortland factory. ' In that
'' See fn. 5 supra at 2027.
'' These locations were in Boston, Massachusetts; Charlotte, North
Carolina; Bethleham, Pennsylvania; Hartford, Connecticut; Vineland,
month, a review of the corporate profit-and-loss state-
ments dating back to December 31, 1969, was made, and
General Manager Matthews received authorization from
Mack's President Henry Nave to eliminate nine branches
by December 31, 1976. Matthews was also given free
rein to select any of the facilities which in his judgment
would meaningfully enhance its profit posture. In conse-
quence of this mandate, Matthews selected the following
five branches which were phased out in 1975 on the
dates indicated:
Bethleham, Penn.
Hartford, Conn.
Boston, Mass.
Charlotte, N.C
Vineland, N.J.
Jan. 1975
April 1975
Sept. 1975
Dec. 1975
Dec. 1975
In January 1976, Matthews closed the branch in Roches-
ter, New York, and, in April 1976, the branch in Long
Island City, New York, was abandoned. In an attempt to
salvage the Philadelphia facility here involved, Matthews
dispatched a letter to Branch Manager Robert Johnson
on February 24, 1976, which recited:
In an effort to stay solvent while striving to operate
our business profitably, we must take drastic steps
to reduce the cost of doing business.
All Cortland Departments are reducing indirect
payroll by 10% regardless of needs or personnel
who had been requested prior to this decision. One
week, March 15 through 19, will be a complete
Cortland shutdown to reduce field inventory and
save money.
Now, we must turn to the branch operation and
dictate a 10% reduction in payroll cost by March
15. You can notify those affected immediately and
allow them to work through Friday, March 5, as
the termination date.
We are not going out of business or irreparably
weakening our organization. Drastic moves are
needed to survive the next six months and we will
not sit idly by and slowly dry up. Brockway will be
swinging back as fast as the economy of our busi-
ness allows. When your branch makes a profit we
will talk about increased manpower.
Get behind our drive and reduce payroll by 10%
immediately.
Despite the reduction in payroll costs, by mid-July 1976,
Matthews decided to close the Philadelphia facility be-
cause that entity had suffered a greater economic loss
than any of the other branches which were then in oper-
ation. In this connection, the record contains the follow-
ing undisputed data regarding the Philadelphia branch's
annual deficit:
New Jersey; Rochester, New York; Long Island City, New York; Phila-
delphia, Pennsylvania; Newburgh, New York; Baltimore, Maryland;
Newark, New Jersey; Pittsburgh, Pennsylvania; Kingston, New York;
Buffalo, New York; Elmira. New York; Scranton, Pennsylvania; and
Rensselaer, New York
BROCKWAY MOTOR TRUCKS 39
Year
New Used
Trucks Trucks
Sold Sold
Net Loss
Before
Taxes
1969 119 90 $296,891.04
1970 60 69 211,404.04
1971 81 38 202.942.31
1972 56 31 193,240.26
1973 88 23 133,706.48
1974 68 24 101,551.19
1975 45 18 225,063.43
8 months of 1976 31 27 $156,416.14
With the closure of the Philadelphia installation, the
structure housing the branch was turned over to Re-
spondent's real estate department for sale. 20 Following
the demise of this branch, Brockway's Newburgh, New
York branch was abandoned which thereby completed
the nine closures by the December 31, 1976, target date.
Rounding out the corporate lifespan and economic
lifestyle of Brockway, that enterprise was completely liq-
uidated on April 10, 1977. After the liquidation, the
branches in Newark, New Jersey, and Pittsburgh, Penn-
sylvania, were shut down in May 1977 and, in June and
August 1977, the branches in Baltimore, Maryland, and
Kingston, Pennsylvania, respectively, were closed. Al-
though the exact dates of their closure were not estab-
lished on the record, the branches located in Buffalo,
Elmira, Scranton, and Rensselear were phased out some-
time after April 1977. With regard to the economic ne-
cessity for terminating the corporate structure of Brock-
way, the record demonstrates and I find that, for the
period from 1968 to March 31, 1977, Brockway's pretax
earning from all operations were:
Cortland manufacturing plant and the other branches
were collectively represented either by sister locals of
the Union, or by the International Brotherhood of Team-
sters or the United Automobile Workers. The last con-
tract between Brockway and the Union was effective
from September 15, 1972, until September 14, 1975.
On August 19, 1975, James Walsh, the Union's busi-
ness representative and chief negotiator, mailed a set of
contract proposals to Robert Johnson, the general man-
ager of Brockway's Philadelphia branch, but the first
bargaining session between the parties did not take place
until March 19, 1976. Walsh testimonially explained the
reason for his lack of urgency when he related that the
Union also represented the employees of Mack, and that
it normally awaited the outcome of contract negotiations
with that company in order to utilize the benefits extract-
ed from Mack as the format for negotiations with Brock-
way and such other competitors as International Har-
vester and General Motors.
At the first bargaining meeting conducted on March
19, 1976, Walsh was assisted by Shop Steward John
Morton, and Brockway was represented by General
Manager Johnson and William Warke, the Industrial Re-
lations Manager. In the Union's proposals, Walsh initially
demanded a $1 hourly across-the-board increase but then
scaled down this figure to 65 cents which paralleled the
increase which the Union had sought from Mack for its
members for the first year of a 3-year compact. Warke,
speaking for Brockway, countered with an initial annual
increase of 40 cents. For the second year, the Union in-
sisted upon an increment of 50 cents per hour and Warke
offered 25 cents. Warke testified that he had informed
the union negotiators that Brockway had been losing
money and had consequently increased the tempo of
phasing out its branches as evidenced by the closure of
the seven during 1975 and the first 4 months of 1976, and
that it could not afford to pay any of the amounts which
the Union sought because the Philadelphia branch
"wasn't producing the money to do so...." Warke tes-
tified that, upon informing Walsh of Brockway's inability
to pay, Walsh rejoined that "If you're not going to pay
the [Union] rate in Philadelphia, you might as well fold
your tents" because the Union would not recede from its
wage demands. Warke further testified that at no time
during the colloquy on March 19, 1976, did any of the
union representatives request that he buttress his plea of
poverty with any financial documentation. The Union
placed Brockway's offer before its membership and the
offer was rejected.
The second bargaining meeting was held on April 12,
1976, in the company of a mediator. Warke repeated his
earlier offer which Walsh again took to the membership
where it once more was turned down. The final session
was conducted on May 25. At this conclave, General
Manager Johnson laid Brockway's final offer on the
table. This proposal provided for a 12-cent hourly wage
increase retroactive to September 14, 1975, a 25-cent in-
crease on September 14, 1976, and a wage reopener
clause for the final year of a 3-year agreement. The
union representative conveyed the final offer to the
membership and this, too, was vetoed. On May 26, 1976,
Year
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977-Operations
1977-Liquidation
Total Net Loss
Income
$1,372,405
1,782,525
2,015,727
1,663,741
1,650,474
3,194,136
2,297,249
-4,120,235
-1,687,560
-793,305
-11,700,000
$-4,324,843
B. The Bargaining Background and Colloquy
Since 1938, the Union represented a unit of all work-
ing foremen, mechanics, mechanics' helpers, maintenance
employees, miscellaneous service employees, and all
parts department employees at Respondent's Philadelphia
branch. During the same period, the employees at the
20 Between June 25, 1976, and April 6, 1977, this department contacted
a number of potential buyers but was unsuccessful in disposing of the
property. Finally, on August 10, 1977, the property was sold for 300,000
to the Philadelphia Authority for Industrial Development and the pro-
ceeds were turned over to Mack.
BROCKWAY MOTOR T UCKS
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
the 13 employees at the Philadelphia branch walked off
the job and commenced to strike.
In his testimony, Union Business Agent Walsh general-
ly corroborated the testimony of Johnson as to the con-
tents of the bargaining sessions which led up to the
strike. Thus, Walsh admitted that General Manager
Johnson informed the union agents that Brockway had
been losing money and that, upon hearing this, Walsh re-
torted that "If you can't meet our rates, fold your tent."
Walsh also conceded that he never demanded that John-
son substantiate Brockway's inability to pay. He further
acknowledged that the topic of branch closures had
arisen during negotiations and that he was aware that, in
1976, the entire industry had trended toward private dis-
tributorships as a substitute for branches. Indeed, Shop
Steward John Morton, who had assisted Walsh in the ne-
gotiations, confessed that he had been aware that Brock-
way had closed 10 branches prior to the closure at Phila-
delphia because he, himself, had been called upon by the
Company to assist in shutting several of them down.
Morton added that the Union had learned that Brockway
"wanted to get some more dealerships and get rid of the
branches that weren't very profitable," and that, in Janu-
ary or February 1976, he was asked by Brockway to
search for less expensive quarters in which to house the
branch.
Robert Matthews, the general manager of Brockway,
testified and I find that, between July 12 and 15, 1976, he
received a financial statement regarding the Philadelphia
branch. While Matthews had considered the closure of
that installation for some time, the statement convinced
him that the time was ripe to phase out this operation be-
cause of its persistent record of dollar losses which were
not singularly attributable to labor costs. Matthews fur-
ther testified that, had the Union accepted Brockway's
final offer at the bargaining session held on May 25,
1976, the Company would have entered into a labor
compact with the Union but that this happenstance
would not have affected management's ultimate decision
to close the branch out of economic necessity when it
did.
On July 19, 1976, Matthews advised the Philadelphia
branch manager, Robert Johnson, that Matthews had
reached a decision to close the branch, effective July 20,
1976. On the latter date, Johnson transmitted to the 13
striking enployees a notice to the effect that the facility
had been closed and that their employment had been ter-
minated, and a copy of this notice was also dispatched to
Walsh. It is undisputed and I find that this was the first
occasion on which Brockway had definitively notified
the Union of its decision to terminate operations at Phila-
delphia. On July 22, 1976, Walsh mailed a letter to John-
son which recited that "In response to your letter of July
20, 1976, branch closing, please be advised that the
Union hereby demands a meeting with the Company to
bargain on closing of Brockway's Philadelphia branch.
Please contact the undersigned to set up a meeting as
soon as possible." Thereafter, on August 11, 1976,
Brockway's industrial relations manager wrote to Walsh
that "Our Philadelphia branch is closed. We have no ob-
ligation to bargain with you over our decision to cease
operation; therefore, no meeting to bargain about closing
this facility was or is necessary." It is uncontroverted
and I find that, when Respondent closed its branches in
Boston, Long Island City, and Pittsburgh, all of whose
employees were represented by sister locals of the
Union, it did not notify those labor organizations of its
decision to do so or submit that decision to the process
of collective bargaining. It is further undisputed and I
find that, between the last bargaining session on May 25,
1976, and Respondent's decision to close the branch on
July 20, 1976, the Union never requested Brockway to
continue the bargaining discourse; that, after the strike
began on May 26, 1976, the Union never offered on
behalf of its members to call off the work stoppage and
return to work; and, that the Union never notified
Brockway that it would accept the Company's last offer
or forgo any wage increases and abandon the strike in
order to keep the branch's doors open. Finally, it was
stipulated and therefore uncontested that Brockway had
faithfully discharged its obligation to bargain over the ef-
fects of the closure upon the 13 employees involved.
111. CONCLUSIONS
On the basis of the foregoing, I conclude that, as early
as 1968, Respondent experienced financial difficulties in
the operation of its branches. In consequence thereof, it
decided to phase them out in favor of selling the trucks
directly to independent distributors in order to eliminate
nagging deficits. In January 1975, after a review of its
profit-and-loss statements dating back to 1969, Respond-
ent targeted the closure of 9 of the 17 existing branches
by the end of 1976. In furtherance of this goal, seven of
these facilities were shut down at or about the time Re-
spondent began to bargain with the Union over a new
contract covering the Philadelphia unit employees to re-
place the one which expired on September 14, 1975. A
further attempt to thwart the erosion of its economic sta-
bility was made in late February 1976 when Brockway's
General Manager Matthews ordered a reduction in pay-
roll costs at all branches and the Cortland plant, includ-
ing the branch in Philadelphia. At the same time, the
Philadelphia branch manager designated Union Negotia-
tor Morton to search for less expensive quarters to house
that facility. Finally, in mid-July 1976, Matthews re-
ceived the latest profit-and-loss statement for the Phila-
delphia installation which revealed no change in its con-
sistent pattern of dollar losses stemming from as early as
1969. Armed with this intelligence, Matthews decided
immediately to close this branch effectively July 20,
1976, in furtherance of the design to eliminate nine
branches before the end of the year. Thereupon, all unit
personnel were terminated and the branch was perma-
nently eliminated.
In light of the Third Circuit's opinion on remand, I am
persuaded that a balancing of the interests of both Re-
spondent and the Union under the circumstances of this
case warrants the conclusion that Respondent's unilateral
action in closing the Philadelphia branch, without prior
discussion of its decision to do so with the Union, was
statutorily privileged and therefore dictates dismissal of
the complaint filed herein. I am fortified in this conclu-
sion by such considerations as (1) the pressing economic
40
BROCKW'AY MOTOR TRUCKS 41
urgency which impelled the decision to close; (2) a rec-
ognition that further collective bargaining with the
Union could not have reasonably been expected to re-
verse or forestall that decision; and (3) the futility of
fashioning an order compelling Respondent to bargain
over the closure or resumption of operations in Philadel-
phia, and to reinstate the unit employees and award them
backpay, in view of the corporate demise of that branch
and the parent Brockway, as well. With respect to the
first consideration, it is uncontroverted that the Philadel-
phia facility was the loss leader of all other existing
branches in July 1976, and that no tangible prospect of a
reversal of this trend was apparent. While it is true, of
course, that hindsight always is endowed with 20-20
vision, the corporate collapse of Brockway less than 9
months later nevertheless affords ample proof of the eco-
nomic necessity for the closure in Philadelphia. Regard-
ing the second, so far as appears on this record, even if
the Union had accepted Respondent's final contract offer
on May 25, 1976, or, indeed, had agreed to settle for the
same or less wages than its members were then receiv-
ing, there is no plausible basis for assuming that these
concessions could have conceivably altered the decision
to close in the face of demonstrative evidence that wages
were not the decisive or even a major ingredient in the
cost factors which forced Respondent to eliminate that
branch. Concerning the third consideration, it is difficult
to perceive how, at this juncture, an effective remedial
order can be formulated, even if a technical violation of
Section 8(a)(5) and (1) of the Act were to be found. So
far as this record stands, Respondent's corporate treasury
no longer exists to satisfy any backpay award which
might be claimed on behalf of the unit employees,2 ' and
21 In this connection, I would note that the General Counsel had not
argued, either before the Third Circuit or before me that Mack, of which
there is no Brockway entity to employ the unit person-
nel.
As heretofore chronicled, the Board has, since Ozark
Trailers, continued to rely on that decision as the touch-
stone for imposing upon an employer the duty to bargain
with an incumbent union over an economically motivat-
ed determination to close a plant. However, the conclu-
sion reached herein that Brockway did not unlawfully
shirk that duty does not appear to be entirely at war
with the Board's decisional trend in this area. In its initial
decision in this proceeding, the Board noted that there
was no evidential showing that Respondent's decision to
close the Philadelphia branch "involved such a 'signifi-
cant investment or withdrawal of capital' as to 'affect the
scope and direction of the enterprise,"' citing its decision
in General Motors Corp. By this notation, it can only be
assumed that General Motors is still alive and well and
that, if such a showing had been made, the ultimate
result herein might have been different.
In short, I am convinced and conclude that Brock-
way's economic interests in this case which impelled the
sudden closure of the Philadelphia branch were of such
magnitude and immediacy as to make unfair the imposi-
tion of a duty to bargain with the Union over its decision
to shut down the facility. Accordingly, I shall recom-
mend that the complaint herein be dismissed in its entire-
ty.
[Recommended Order for dismissal omitted from pub-
lication.]
Brockway was a division, should be held responsible for rectifying any
misdeeds of Brockway
BROCKWAY MOTOR TRUCKS '