Commercial Forgings Co.

National Labor Relations Board - Board Decisions

Sep 30, 1994

315 N.L.R.B. 162 (N.L.R.B. 1994)

162
315 NLRB No. 23
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
Commercial Forgings Company and Lodge 1086,
International Brotherhood of Boilermakers,
Iron Shipbuilders, Blacksmiths, Forgers, and
Helpers, AFL–CIO
Forgings Forever, Inc. and Lodge 1086, Inter-
national Brotherhood of Boilermakers, Iron
Shipbuilders, Blacksmiths, Forgers, and Help-
ers, AFL–CIO. Cases 8–CA–24748 and 8–CA–
24904
September 30, 1994
DECISION AND ORDER
BY MEMBERS STEPHENS, DEVANEY, AND COHEN
Upon charges filed by Boilermakers Lodge 1086
(the Union), the General Counsel of the National
Labor Relations Board issued an amended consolidated
complaint and notice of hearing dated November 27,
1992. The amended complaint alleges that Respondent
Commercial Forgings (Commercial) engaged in certain
unfair labor practices within the meaning of Section
8(a)(1) and (5) of the National Labor Relations Act by
failing to pay employees termination pay and vacation
pay due them, and by terminating its manufacturing
operations without providing the Union notice and an
opportunity to bargain over the effects of that decision;
that Respondent Forgings Forever (Forgings) became
the legal successor of Commercial with prior notice of
the alleged unfair labor practices of Commercial, and,
as such, is liable for them; and that Forgings engaged
in certain unfair labor practices within the meaning of
Section 8(a)(1) and (5) by refusing to recognize and
bargain with the Union.
On March 30, 1993, the parties jointly filed a mo-
tion to transfer the proceeding to the Board and a stip-
ulation of facts. The parties waived a hearing before
an administrative law judge, the making of findings of
fact and conclusions of law by an administrative law
judge, and the issuance of an administrative law
judge’s decision and recommended Order. The parties
agreed that the stipulation, with attached exhibits, in-
cluding, inter alia, the initial and amended charges, the
amended consolidated complaint and notice of hearing,
and the answers, shall constitute the entire record in
this case and that no oral testimony is necessary or de-
sired by any of the parties.
On November 17, 1993, the Board issued its Order
approving the stipulation and transferring the proceed-
ing to the Board. Thereafter, the General Counsel and
the Respondents filed briefs in support of their respec-
tive positions.
The National Labor Relations Board has delegated
its authority in this proceeding to a three-member
panel.
The Board has considered the stipulation, the briefs,
and the entire record in this proceeding and makes the
following
FINDINGS OF FACT
I. JURISDICTION
At all material times, Commercial, an Ohio corpora-
tion with an office and place of business in Cleveland,
Ohio, was engaged in the business of operating an
open die forging shop specializing in large forgings,
related machining facilities, and a heat treating facility.
During the year prior to May 15, 1992, Commercial,
in conducting its business operations, sold and shipped
from its Cleveland, Ohio facility goods valued in ex-
cess of $50,000 directly to points outside the State of
Ohio.
Since about May 18, 1992, Forgings, an Ohio cor-
poration with an office and place of business in Cleve-
land, Ohio, has been engaged in the business of operat-
ing an open die forging shop specializing in large forg-
ings, related machining facilities, and a heat treating
facility. Based upon a projection of its operations from
May 18, 1992, until the date of the stipulation of facts,
Forgings, in conducting its business operations, will
annually sell and ship from its Cleveland, Ohio facility
goods valued in excess of $50,000 directly to points
outside the State of Ohio. The parties stipulated, and
we find, that Commercial and Forgings have been, at
all times material, employers engaged in commerce
within the meaning of Section 2(2), (6), and (7) of the
Act.
The parties stipulated, and we find, that at all mate-
rial times the Union has been a labor organization
within the meaning of Section 2(5) of the Act.
II. THE ALLEGED UNFAIR LABOR PRACTICES
A. Facts
For many years, and at all material times, the Union
was the designated exclusive collective-bargaining rep-
resentative of a unit of all Commercial employees with
the exception of guards, professional employees, office
employees, and supervisory personnel with authority to
hire and fire (the Commercial unit), and was recog-
nized as the representative by Commercial. This rec-
ognition was embodied in successive collective-bar-
gaining agreements, the most recent of which was ef-
fective from April 4, 1992 to April 3, 1993.
Commercial incurred a significant debt to Ameritrust
Company National Association (ACNA). The loans
were secured by various security interests and mort-
gages in the property of Commercial. In 1990, when
Commercial was unable to meet its repayment obliga-
tions, ACNA directed Commercial to sell its assets or
face foreclosure. Commercial’s debt to ACNA at that
time was far in excess of the market value of its as-
163COMMERCIAL FORGINGS CO.
1 All subsequent dates are in 1992 unless otherwise indicated.
2 ACNA refused to take the real estate because of its concern for
liability related to environmental conditions. The real estate is sub-
ject to a pending tax foreclosure case and the results of that case
will terminate Commercial’s ownership of the property. Commercial
will not receive any of the proceeds of the sale of the real estate.
sets. Commercial also had other creditors whose claims
were in excess of $500,000.
Sometime in January or February 1992,1 negotia-
tions began among Commercial, ACNA, and the prin-
cipals who later formed Forgings, for the sale of all or
part of the assets of Commercial to Forgings, which
was incorporated on March 23. John Mencini, the chief
executive officer and treasurer of Commercial and later
president and treasurer of Forgings, was included in
these negotiations. During the first week of May, the
final provisions of a transaction were agreed upon,
providing for the transfer of Commercial’s assets, ex-
cept for the real estate, to ACNA and their subsequent
sale to Forgings.2 The transaction was reduced to writ-
ing in a ‘‘Collateral Realization Agreement,’’ and exe-
cuted on May 15.
On Friday, May 15, Mencini called a meeting of all
employees during the workday. He announced that
Commercial was immediately ceasing its business op-
erations and that the employees were to gather their
belongings and leave the premises. On the same day
Mencini, on behalf of Commercial, wrote to the Union
indicating that Commercial had ceased its business op-
erations. This letter was the first notice given by Com-
mercial to the Union of its business closing. At the
time of its closing, Commercial employed 18 individ-
uals, including 9 bargaining unit employees.
On Monday, May 18, Forgings began its business
operations at the Commercial facility. Forgings contin-
ued the same type of business operation as that con-
ducted by Commercial, uses the same physical facili-
ties and the same equipment, and produces the same
product. During the first 4 months of operations 90
percent of Forging’s customers were the same as Com-
mercial’s.
When Forgings began operations, it employed nine
individuals, all of whom except the chief financial offi-
cer previously had worked for Commercial. Three of
these individuals worked for Forgings in managerial
positions, two were office clerical employees, and four
were primarily assigned to production work. One of
the production workers, Walter Illingworth, was a 17
percent shareholder of Commercial and owns 20 per-
cent of the shares of Forgings. Another, Walter Harris,
had been a production supervisor at Commercial. Al-
though Harris acts as a work coordinator at Forgings,
he does not exercise supervisory authority. The other
two production employees at Forgings, Earl Holland
and Mike Sczesniak, were members of the bargaining
unit at Commercial and perform similar duties at Forg-
ings. Forgings did not hire another production em-
ployee until mid-July, when it hired Chris Langmo,
who had previously worked for Commercial but was
not on its payroll when Commercial ceased operations.
Langmo subsequently left the employ of Forgings and
was not replaced.
About May 21, Union International Representative
Steven Jewell and a number of former employees of
Commercial visited the Forgings facility. Jewell sub-
mitted a written grievance to Mencini signed by the
former employees alleging breaches of the collective-
bargaining agreement in connection with Commercial’s
closing and requesting documents establishing proof of
the sale of assets. Commercial responded on May 22,
asserting that it had discontinued doing business and
denying any contract violations. Representatives of the
Union met on June 5 with Mencini and Albert
Fowerbaugh, Commercial’s attorney, concerning the
grievance. Commercial’s representatives stated that
there was no money to pay the liabilities asserted in
the grievance, and that certain obligations, such as
health insurance premiums until the end of May and
pension contributions, had been paid. The union rep-
resentatives stated that Commercial was also liable to
the employees for vacation benefits accrued during the
month of May as well as for severance pay. Commer-
cial’s representatives acknowledged the contractual ob-
ligation to pay severance benefits and stated that a pos-
sible liability existed regarding vacation pay. They also
furnished the Union with a copy of the Collateral Real-
ization Agreement as proof of the sale of assets.
During the course of the June 5 meeting, the union
representatives inquired of Mencini and Fowerbaugh,
in their capacity as officers and shareholders of Forg-
ings, about the identity of the production employees
employed by Forgings. Mencini stated that two former
bargaining unit employees, Holland and Sczesniak,
were working for Forgings. International Representa-
tive Ron Lyon then requested that Forgings recognize
the Union as the representative of its production and
maintenance employees. The request was denied by
Fowerbaugh, who stated that the successorship clause
of the collective-bargaining agreement did not apply
because the assets had been purchased by Forgings
from ACNA and not directly from Commercial.
Article 9.8 of the collective-bargaining agreement
sets the requirement for termination pay in the event
Commercial ceases doing business. Under the terms of
this provision, the following employees of commercial
were entitled to termination pay after Commercial
ceased doing business and laid them off: Robert J.
Black, Reinhard Lee, Charles Ernest Lewis, Albert
Omahan, James Rusnek, Richard Schultz, and Fred
Sparks. Article 10 of the collective-bargaining agree-
ment sets forth the provisions for employee vacation
benefits. Article 10.9 states that 1 month’s vacation
164 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
credit is due to any employee who works at least 15
days in a calendar month. All nine employees in the
Commercial unit worked between May 1 and May 15,
and were therefore entitled to 1 month’s vacation cred-
it for that period of time.
Since June 5, the Union has neither requested nor
engaged in any grievance or negotiation meetings with
Commercial. Commercial has paid no moneys to the
Union or the affected employees in satisfaction of the
Union’s claims regarding vacation and termination pay
benefits. Since June 5, Forgings has refused to recog-
nize the Union as the bargaining representative of its
production and maintenance employees. Commercial
has engaged in no business operations since May 15,
except to respond to inquiries from its creditors.
B. Contentions of the Parties
The General Counsel contends that Commercial un-
lawfully modified the termination pay and vacation
pay provisions of the collective-bargaining agreement
without the consent of the Union, in violation of Sec-
tion 8(a)(1) and (5), by failing to pay these benefits to
its employees. The General Counsel further asserts that
Commercial violated Section 8(a)(1) and (5) by failing
to give notice to the Union and an opportunity to bar-
gain over the effects of its closing. The General Coun-
sel argues that although Commercial was engaged in
negotiations concerning the transfer of its assets for a
period of months, it presented the Union with a fait
accompli on the day of closing, thus precluding mean-
ingful bargaining at a time when the Union had some
measure of bargaining strength. The General Counsel
further asserts that Forgings, as a successor under the
principles of both Golden State Bottling Co. v. NLRB,
414 U.S. 168 (1973), and NLRB v. Burns International
Security Services, 406 U.S. 272 (1972), respectively, is
liable for Commercial’s unfair labor practices and is
obligated to recognize and bargain with the Union. The
General Counsel contends that Forgings violated Sec-
tion 8(a)(1) and (5) by failing and refusing to engage
in such bargaining. The General Counsel urges the
Board to remedy these alleged violations with a cease-
and-desist order and by ordering that Commercial bar-
gain with the Union over the effects of its closing, that
Commercial and Forgings be held jointly and severally
liable for the termination pay and vacation pay due to
the former Commercial employees as well as for lim-
ited backpay under Transmarine Navigation Corp., 170
NLRB 389 (1968), and that Forgings recognize and
bargain with the Union as the bargaining representative
of its employees.
The Respondents contend that Forgings is not the
legal successor of Commercial. In this regard, the Re-
spondents assert that this case is factually distinguish-
able from Fall River Dyeing & Finishing Corp. v.
NLRB, 482 U.S. 27 (1987), because the Respondents
are smaller employers, with a smaller proportion of
represented employees, and because Forgings made
changes in the method of operation at the facility. In
addition, relying on Howard Johnson Co. v. Detroit
Local Joint Executive Board, 417 U.S. 249 (1974), the
Respondents argue that Forgings should not be found
a successor to Commercial based on the small propor-
tion of former bargaining unit employees hired, i.e.,
two of nine employees.
C. Discussion
Considering first the complaint allegation that Com-
mercial violated Section 8(a)(1) and (5) by failing to
give the Union notice and an opportunity to bargain
concerning the effects of its termination of operations,
we note that the parties have stipulated that Commer-
cial announced to its employees on May 15 that it was
immmediately ceasing operations; that it sent a letter
to the Union on the same date informing the Union
that Commercial had ceased operations; and that the
letter was the first notice provided to the Union of this
decision. It is well established that an employer that
decides to terminate its operations and go out of busi-
ness has an obligation to bargain about the effects of
that decision with the union representing its employ-
ees. First National Maintenance Corp. v. NLRB, 452
U.S. 666 (1981). Inherent in that obligation is a re-
quirement that the union be given notice and an oppor-
tunity to bargain ‘‘in a meaningful manner and at a
meaningful time.’’ Id. at 681–682. In this case, Com-
mercial provided the Union no advance notice of its
decision to cease operations and transfer its assets to
Forgings. Instead, Commercial sent a letter to the
Union on the same day that it informed the employees
directly of the termination. Thus, Commercial pre-
sented the Union with a fait accompli, depriving it of
an opportunity to bargain at a time when it had any
measure of economic strength with respect to Com-
mercial. In their brief, the Respondents make no argu-
ment concerning this allegation. We find that by fail-
ing and refusing to bargain with the Union concerning
the effects of its decision to terminate its operations,
Commercial has violated Section 8(a)(1) and (5) of the
Act. John R. Cowley & Bro., Inc., 297 NLRB 770
(1990).
We also find that Commercial violated Section
8(a)(1) and (5) by failing to pay unit employees the
termination pay and vacation benefit pay due to them.
The collective-bargaining agreement between Commer-
cial and the Union provides for vacation pay credit for
employees who have worked 15 days in a calendar
month, as well as termination pay for employees in the
event that Commercial ceases doing business. The par-
ties stipulated that under these provisions, seven
former bargaining unit employees are entitled to termi-
nation pay and all nine former Commercial unit em-
165COMMERCIAL FORGINGS CO.
3 Commercial’s assertion at the June 5 meeting that no money re-
mained to pay the liabilities claimed by the Union does not con-
stitute a defense to its failure to meet its contractual obligations. See
General Split, supra.
4 In this regard, the Respondents also rely on Howard Johnson,
supra, in asserting that no successorship should be found because
Forgings hired only two of Commercial’s nine unit employees. We
find Howard Johnson distinguishable from the present case. In How-
ard Johnson, the Supreme Court found no substantial continuity of
the work force where the new employer decided to ‘‘select and hire
its own independent work force,’’ and hired only 9 of the former
employer’s 53 employees for inclusion in a new work force of 45
employees. 417 U.S. at 259. In addition, none of the supervisors of
the former employer were hired.
ployees are entitled to vacation pay for the month of
May. The parties further stipulated that Commercial
has made no payments in satisfaction of these obliga-
tions. The Respondents’ brief does not address this al-
legation. We find that Commercial unilaterally changed
the terms of the parties’ collective-bargaining agree-
ment by failing to pay its former employees the con-
tractual benefits due to them without bargaining with
the Union. General Split Corp., 284 NLRB 418
(1987); St. Louis Gateway Hotel, 286 NLRB 863
(1987).3
The General Counsel asserts that Forgings is a suc-
cessor to Commercial under the tests established in
Burns and Golden State, supra. In Burns, the Supreme
Court held that a new employer is obligated to recog-
nize and bargain with the union representing the prede-
cessor’s bargaining unit employees where the bargain-
ing unit remains unchanged and a majority of the em-
ployees hired by the new employer are represented by
the union. The Supreme Court further found in Fall
River Dyeing, supra, that the first inquiry focuses on
the existence of substantial continuity, determined by
considering ‘‘whether the business of both employers
is essentially the same; whether the employees of the
new company are doing the same jobs under the same
working conditions under the same supervisors; and
whether the new entity has the same production proc-
ess, produces the same products, and basically has the
same body of customers.’’ 482 U.S. at 43. A finding
of substantial continuity does not require that the new
and old operations be identical, but rather involves an
assessment of the totality of the circumstances to deter-
mine whether ‘‘those employees who have been re-
tained will understandably view their job situations as
essentially unaltered.’’ Id., quoting Golden State.
The facts in the present case establish that Forgings
acquired all of the assets formerly owned by Commer-
cial, with the exception of the real estate. Moreover,
Forgings continued the same type of business oper-
ation as Commercial, using the same facilities and
equipment to produce the same product. During its
first 4 months of operation, 90 percent of the cus-
tomers served by Forgings were former Commercial
customers. Eight of the nine individuals employed by
Forgings had been employed by Commercial.
We find no merit in the Respondents’ contention
that despite these similarities, Forgings should not be
held to be the successor of Commercial based on fac-
tual distinctions between Fall River Dyeing and the
present case. The Respondents note that the overall
size of the employers here is significantly smaller than
those in Fall River Dyeing, and that the bargaining
unit constitutes a smaller proportion of the total em-
ployment. However, the Respondents cite no precedent
suggesting that the size of the employer or the bargain-
ing unit is of any determinative consequence in decid-
ing issues of successorship. The Respondents also
argue that the method of operation under Forgings dif-
fered from that of Commercial, asserting that seven of
the former bargaining unit employees were not hired
because their skills were not needed, and that the pro-
duction employees were supervised by a different indi-
vidual under Forgings. In Burns, successorship was
found despite the new employer’s bringing in its own
supervisors, where their duties were similar to those
performed by the supervisors of the predecessor. Burns
at fn. 4. In the present case, the parties’ stipulation
shows that the entire initial work force, with the ex-
ception of the chief financial officer, consisted of indi-
viduals formerly employed by Commercial, indicating
a significantly greater continuity of supervision as well
as unit employees.4 The Respondents also concede in
their brief that the two production employees carried
over from Commercial would not see their jobs as es-
sentially altered. Based on the above considerations,
we find that substantial continuity exists between
Commercial and Forgings as the employing enterprise.
Turning to the issue of the majority status of the
Union in the Forgings bargaining unit, we note that
four employees were primarily assigned to perform
production work. One of these individuals, Illingworth,
was a 17 percent owner of Commercial and owns 20
percent of Forgings, and therefore is excluded from the
bargaining unit. A second production employee, Harris,
was a supervisor at Commercial. The remaining two
production employees were in the bargaining unit at
Commercial. Thus, two of the three bargaining unit
employees at Forgings were formerly represented by
the Union at Commercial. We find that by June 5,
when the Union requested bargaining with Forgings,
Forgings employed a substantial and representative
complement of its work force and that the Union rep-
resented a majority of Forgings’ bargaining unit em-
ployees. In view of the majority status of the Union
and the substantial continuity between Commercial and
Forgings discussed above, we conclude that Forgings
is a Burns successor and is obligated to recognize and
bargain with the Union. We further conclude that
166 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
Forgings violated Section 8(a)(1) and (5) of the Act by
its failure and refusal to bargain with the Union.
In Golden State, the Supreme Court held that an em-
ployer that acquires substantial assets of a predecessor
and continues without substantial change the prede-
cessor’s business operations may also be required to
remedy the unfair labor practices of the predecessor if
it was on notice of the unlawful conduct. Having al-
ready found the requisite continuity of operations
above, we must determine whether Forgings had
knowledge of the unfair labor practices committed by
Commercial. In its answer to the amended consolidated
complaint, Forgings denied knowledge of Commer-
cial’s violations. The Board, however, may conclude
that a successor had the necessary knowledge based on
reasonable inferences from the record as a whole. Rob-
ert G. Andrew, Inc., 300 NLRB 444 (1990). We find
that the record in this case supports such an inference.
Mencini, the president of Forgings, was previously the
chief executive officer of Commercial. By at least Jan-
uary or February, Mencini knew that Commercial in-
tended to sell its assets; indeed, he participated in sale
negotiations. Mencini also signed the letter to the
Union belatedly informing it of Commercial’s closing
on the same day that he announced that decision to
employees. Moreover, Mencini was present at the June
5 meeting where he or Fowerbaugh, or both, asserted
that there was no money available to meet Commer-
cial’s obligations regarding vacation pay and termi-
nation pay. Thus Mencini was personally involved in
the conduct found to constitute unfair labor practices
by Commercial. We impute his knowledge to Forg-
ings, and conclude that Forgings is a Golden State suc-
cessor jointly and severally liable for remedying Com-
mercial’s unfair labor practices. See Bell Glass Co.,
293 NLRB 700, 708 (1989).
CONCLUSIONS OF LAW
1. Respondents Commercial Forgings Company and
Forgings Forever, Inc., are employers engaged in com-
merce within the meaning of Section 2(2), (6), and (7)
of the Act.
2. Lodge 1086, International Brotherhood of Boiler-
makers, Iron Shipbuilders, Blacksmiths, Forgers, and
Helpers, AFL–CIO is a labor organization within the
meaning of Section 2(5) of the Act.
3. All employees with the exception of guards, pro-
fessional employees, office employees, and supervisory
employees with authority to hire and fire constitute a
unit appropriate for collective bargaining within the
meaning of Section 9(b) of the Act.
4. At all times material the Union has been the ex-
clusive representative of all unit employees for the pur-
pose of collective bargaining within the meaning of
Section 9(a) of the Act.
5. Forgings is the successor employer to Commer-
cial. Forgings is liable to remedy the unfair labor prac-
tices of Commercial, and is obligated to recognize and,
on request, bargain with the Union as the exclusive
representative of bargaining unit employees.
6. By failing and refusing to bargain with the Union
concerning the effects of its decision to terminate its
operations, Commercial violated Section 8(a)(1) and
(5) of the Act.
7. By unilaterally modifying the terms of its collec-
tive-bargaining agreement with the Union by failing to
pay employees Robert J. Black, Reinhard Lee, Charles
Ernest Lewis, Albert Omahan, James Rusnek, Richard
Schultz, and Fred Sparks the termination pay due to
them and by failing to pay all of its former bargaining
unit employees the vacation pay due to them, Com-
mercial violated Section 8(a)(1) and (5) of the Act.
8. By failing and refusing to recognize and bargain
with the Union as the collective-bargaining representa-
tive of its bargaining unit employees, Forgings violated
Section 8(a)(1) and (5).
REMEDY
Having found that the Respondents have engaged in
certain unfair labor practices, we shall order that they
cease and desist and that they take certain affirmative
action to effectuate the policies of the Act. To remedy
Commercial’s unlawful failure and refusal to bargain
with the Union about the effects of its closing, we
shall order it to bargain with the Union, on request,
concerning the effects of that decision. Because of
Commercial’s unlawful failure to bargain with the
Union about its decision to cease operations, the bar-
gaining unit employees have been denied an oppor-
tunity to bargain through their collective-bargaining
representative at a time when the Respondent might
still have been in need of their services and a measure
of balanced bargaining power existed. Meaningful bar-
gaining cannot be assured until some measure of eco-
nomic strength is restored to the Union. A bargaining
order alone, therefore, cannot serve as an adequate
remedy for the unfair labor practice committed.
Accordingly, we deem it necessary, in order to en-
sure that meaningful bargaining occurs and to effec-
tuate the policies of the Act, to require not only that
Commercial bargain with the Union, on request, about
the effects of the closing, but we shall also require a
limited backpay remedy designed both to make the
employees whole for losses as a result of Commer-
cial’s failure to bargain, and to recreate in some prac-
ticable manner a situation in which the parties’ bar-
gaining position is not entirely devoid of economic
consequences for the Respondents. We shall do so by
requiring the Respondents, jointly and severally, to pay
backpay to unit employees in the manner required in
167COMMERCIAL FORGINGS CO.
5 Member Cohen agrees that it is appropriate to enter a
Transmarine monetary order against Commercial as a remedy for its
refusal to bargain about the effects of its closing. However, he
would not impose that monetary order against Forgings (the succes-
sor) with respect to the two Commercial employees whom it hired.
In this regard, he notes that these employees were hired without hia-
tus, and thus they suffered no loss of employment by reason of the
closing. In addition, a backpay order against Forgings, incorporating
a minimum of 2 weeks of backpay, would essentially require Forg-
ings to pay the employees twice for the same work. In these cir-
cumstances, the order as to Forgings is punitive rather than compen-
satory.
Further, in Member Cohen’s view, the instant case differs from the
typical Golden State situation. In that situation, the successor can
avoid or reduce liability by promptly hiring the victims of the prede-
cessor’s unlawful conduct. By contrast, the instant case involves a
Transmarine remedy. If Golden State is applied to a Transmarine
remedy, as his colleagues have done, the successor must pay the 2-
week minimum backpay, even if the successor promptly hires the
victims. Where, as here, the successor has hired the victims without
hiatus, it is inequitable and punitive to impose that remedy on the
successor. Nor does the imposition of the Transmarine remedy on
the successor assist in the effectuation of the ‘‘effects’’ bargaining
order. The order does not require the successor to bargain on effects.
Member Cohen notes his colleagues’ suggestion that Forgings
could have negotiated with Commercial for protection against liabil-
ity. Concededly, as to employees not to be hired, Forgings could
have negotiated in this respect, and Member Cohen joins his col-
leagues in finding successor liability as to these employees. How-
ever, as to the two employees who would be hired and who would
suffer no loss, it is wholly unrealistic to expect that Forgings would
negotiate with Commercial to cover a no loss situation.
On a related point, Member Cohen notes his colleagues’ specula-
tion that there may have been a loss by the two employees. How-
ever, the General Counsel does not allege, and the evidence does not
even remotely suggest, such a loss. Indeed, the liability at issue is
confined to the 2 weeks of backpay that is envisaged by
Transmarine when there is no actual loss.
Members Stephens and Devaney do not find the Transmarine
backpay remedy imposed on Forgings with respect to the two em-
ployees hired by Forgings to be punitive. The Transmarine remedy
is designed to compensate employees for losses due to Commercial’s
failure to bargain and to promote bargaining by Commercial. Forg-
ings’ liability for this limited backpay is based solely on its status
as the Golden State successor to Commercial, not on any action by
Forgings itself. In determining that Forgings is a successor under
Golden State, we have already found that Forgings had notice of
Commercial’s unfair labor practices at the time of the transfer of op-
erations. Therefore, Forgings had the opportunity to consider the im-
plications of the unfair labor practices, including its own potential
liability for a remedy, in negotiating the transfer. With respect to
Member Cohen’s ‘‘no loss’’ argument, it is not possible to conclude
from the record in this case that the two employees in fact suffered
no losses because they were immediately hired by Forgings. The
record does not reveal whether their wage rate at Forgings is equiva-
lent to their former rate. Further, bargaining may well have resulted
in monetary or other benefits to the employees if it had taken place
at a time when Commercial needed the employees’ services. Finally,
Members Stephens and Devaney disagree with Member Cohen’s im-
plication that, for the purpose of remedying lost bargaining opportu-
nities, the burden of showing actual loss or alleging a particular loss
is on the General Counsel.
Transmarine Navigation Corp., 170 NLRB 389
(1968).5
The Respondents shall pay unit employees backpay
at the rate of their normal wages when last in Com-
mercial’s employ from 5 days after the date of this De-
cision and Order until the occurrence of the earliest of
the following conditions: (1) The date Commercial
bargains to agreement with the Union on those sub-
jects pertaining to the effects of the termination of op-
erations on unit employees; (2) a bona fide impasse in
bargaining; (3) the failure of the Union to request bar-
gaining within 5 days of the date of this Decision and
Order, or to commence negotiations within 5 days of
Commercial’s notice of its desire to bargain with the
Union; or (4) the subsequent failure of the Union to
bargain in good faith. In no event shall the sum paid
to any of these employees exceed the amount they
would have earned as wages from the date on which
Commercial terminated its operations to the time they
secured equivalent employment elsewhere, or the date
on which Commercial shall have offered to bargain,
whichever occurs sooner; provided, however, that in
no event shall this sum be less than the amount these
employees would have earned for a 2-week period at
the rate of their normal wages when last in Commer-
cial’s employ. Interest on all sums shall be computed
in the manner prescribed in New Horizons for the Re-
tarded, 283 NLRB 1173 (1987). Further, to protect the
rights of Forgings, which will be liable with Commer-
cial for backpay arising from the bargaining over the
effects on the unit employees of Commercial’s closing,
it shall be notified by Commercial of such effects bar-
gaining and, at its option, have the right to participate
in that bargaining between Commercial and the Union.
Having found that Commercial has unalwfully failed
to make contractually required payments of vacation
and termination pay benefits, we shall order Commer-
cial and Forgings, jointly and severally, to make whole
the Commercial unit employees by making all such
payments, including any additional amounts applicable
to such delinquent payments as determined in accord-
ance with the criteria set forth in Merryweather Opti-
cal Co., 240 NLRB 1213 (1979). In addition, the Re-
spondents shall reimburse unit employees for any ex-
penses ensuing from Commercial’s failure to make
such required payments, as set forth in Kraft Plumbing
& Heating, 252 NLRB 891 fn. 2 (1980), enfd. mem.
661 F.2d 940 (9th Cir. 1981), such amounts to be
computed in the manner set forth in Ogle Protection
Service, 183 NLRB 682 (1970), enfd. 444 F.2d 502
(6th Cir. 1979), with interest as prescribed in New Ho-
rizons for the Retarded, supra.
In addition, we shall order Forgings to recognize
and, on request, bargain with the Union as the rep-
resentative of its bargaining unit employees. Finally, in
view of Commercial’s termination of its operations, we
shall order the Respondents to mail copies of the no-
tice to all Commercial unit employees.
168 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
6 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
National 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.’’
ORDER
A.
The National Labor Relations Board orders that Re-
spondent Commercial Forgings Company, Cleveland,
Ohio, its officers, agents, successors, and assigns, shall
1. Cease and desist from
(a) Failing and refusing to bargain with the Union
concerning the effects of its decision to terminate its
operations.
(b) Unilaterally modifying the terms of its collec-
tive-bargaining agreement with the Union by failing to
pay employees Robert J. Black, Reinhard Lee, Charles
Ernest Lewis, Albert Omahan, James Rusnek, Richard
Schultz, and Fred Sparks the termination pay due to
them and by failing to pay all of its former bargaining
unit employees the vacation pay due to them.
(c) In any like or related manner interfering with, re-
straining, or coercing its employees in the exercise of
rights guaranteed them by Section 7 of the Act.
2. Take the following affirmative action necessary to
effectuate the policies of the Act.
(a) Bargain with the Union on request concerning
the effects of Commercial’s decision to terminate its
operations.
B.
The National Labor Relations Board orders that Re-
spondent Forgings Forever, Inc., Cleveland, Ohio, its
officers, agents, successors, and assigns, shall
1. Cease and desist from
(a) Failing and refusing to recognize and bargain
with the Union as the collective-bargaining representa-
tive of its employees in the following appropriate unit:
all employees with the exception of guards, pro-
fessional employees, office employees, and super-
visory employees with authority to hire and fire.
(b) In any like or related manner interfering with,
restraining, or coercing its employees in the exercise of
rights guaranteed them by Section 7 of the Act.
2. Take the following affirmative action necessary to
effectuate the policies of the Act.
(a) Recognize and, on request, bargain in good faith
with the Union as the collective-bargaining representa-
tive of its bargaining unit employees.
C.
The National Labor Relations Board orders that Re-
spondents Commercial Forgings Company and Forg-
ings Forever, Inc., Cleveland, Ohio, their officers,
agents, successors, and assigns, shall take the follow-
ing affirmative action necessary to effectuate the poli-
cies of the Act.
(a) Jointly and severally make whole bargaining unit
employees for any losses they may have suffered as a
result of Commercial’s failure and refusal to bargain
with the Union concerning the effects of its termi-
nation of operations in the manner set forth in the rem-
edy section of this decision.
(b) Jointly and severally make all contractually re-
quired payments of termination pay benefits to unit
employees Robert J. Black, Reinhard Lee, Charles Er-
nest Lewis, Albert Omahan, James Rusnek, Richard
Schultz, and Fred Sparks, and vacation pay benefits to
all former Commercial unit employees, with interest.
(c) Preserve and, on request, make available to the
Board or its agents for examination and copying, all
payroll records, social security payment records, time-
cards, personnel records and reports, and all other
records necessary to analyze the amount of backpay
due under the terms of this Order.
(d) Post at Forgings’ facility in Cleveland, Ohio, and
mail to all employees in the Commercial bargaining
unit at the time of Commercial’s termination of oper-
ations copies of the attached notices marked ‘‘Appen-
dix A’’ and ‘‘Appendix B.’’6 Copies of the notices, on
forms provided by the Regional Director for Region 8,
after being signed by the Respondents’ authorized rep-
resentatives, shall be mailed to all former Commercial
bargaining unit employees and shall be posted by the
Respondents immediately upon receipt and maintained
for 60 consecutive days in conspicuous places includ-
ing all places where notices to employees are cus-
tomarily posted. Reasonable steps shall be taken by the
Respondents to ensure that the notices are not altered,
defaced, or covered by any other material.
(e) Notify the Regional Director in writing within 20
days from the date of this Order what steps the Re-
spondents have taken to comply.
APPENDIX A
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 or-
dered us to post and abide by this notice.
WE WILL NOT fail and refuse to bargain with Lodge
1086, International Brotherhood of Boilermakers, Iron
Shipbuilders, Blacksmiths, Forgers, and Helpers, AFL–
CIO concerning the effects of our decision to terminate
operations.
169COMMERCIAL FORGINGS CO.
WE WILL NOT unilaterally modify the terms of our
collective-bargaining agreement with the Union by
failing to pay employees Robert J. Black, Reinhard
Lee, Charles Ernest Lewis, Albert Omahan, James
Rusnek, Richard Schultz, and Fred Sparks the termi-
nation pay due to them and by failing to pay all bar-
gaining unit employees employed on the date of our
termination of operations the vacation pay due to them.
WE WILL NOT in any like or related manner interfere
with, restrain, or coerce our employees in the exercise
of rights guaranteed them by Section 7 of the Act.
WE WILL bargain with the Union, on request, con-
cerning the effects of our decision to terminate our op-
erations.
WE WILL make whole bargaining unit employees for
any losses they may have suffered as a result of our
failure and refusal to bargain with the Union concern-
ing the effects of our termination of operations.
WE WILL make all contractually required payments
of termination pay benefits to former unit employees
Robert J. Black, Reinhard Lee, Charles Ernest Lewis,
Albert Omahan, James Rusnek, Richard Schultz, and
Fred Sparks, and vacation pay benefits to all former
unit employees employed on the date of our termi-
nation of operations, with interest.
COMMERCIAL FORGINGS COMPANY
APPENDIX B
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 or-
dered us to post and abide by this notice.
WE WILL NOT fail and refuse to recognize and bar-
gain with the Union as the collective-bargaining rep-
resentative of our employees in the following appro-
priate unit:
all employees with the exception of guards, pro-
fessional employees, office employees, and super-
visory employees with authority to hire and fire.
WE WILL NOT in any like or related manner interfere
with, restrain, or coerce our employees in the exercise
of rights guaranteed them by Section 7 of the Act.
WE WILL recognize and, on request, bargain in good
faith with the Union as the collective-bargaining rep-
resentative of our bargaining unit employees.
WE WILL make whole bargaining unit employees for
any losses they may have suffered as a result of Com-
mercial Forgings’ failure and refusal to bargain with
the Union concerning the effects of its termination of
operations.
WE WILL make all contractually required payments
of termination pay benefits to former Commercial unit
employees Robert J. Black, Reinhard Lee, Charles Er-
nest Lewis, Albert Omahan, James Rusnek, Richard
Schultz, and Fred Sparks, and vacation pay benefits to
all former Commercial unit employees, with interest.
FORGINGS FOREVER, INC.