Creasey Co.

National Labor Relations Board - Board DecisionsFeb 29, 1984

268 N.L.R.B. 1425 (N.L.R.B. 1984)

CREASEY CO. Creasey Company, Inc., and its Division, the Federal Produce Company and Chauffeurs, Teamsters and Helpers Local Union No. 215 a/w Interna- tional Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America. Case 25-CA- 15077 29 February 1984 DECISION AND ORDER BY CHAIRMAN DOTSON AND MEMBERS ZIMMERMAN AND HUNTER On 7 July 1983 Administrative Law Judge Phil W. Saunders issued the attached decision. The Re- spondent filed exceptions and a supporting brief, and the General Counsel filed limited cross-excep- tions and a supporting brief. The Respondent and the General Counsel also filed answering briefs.' The National Labor Relations Board has delegat- ed its authority in this proceeding to a three- member panel. The Board has considered the decision and the record in light of the exceptions and briefs and has decided to affirm the judge's rulings, findings, and conclusions only to the extent consistent with this Decision and Order. The complaint alleges that the Respondent vio- lated Section 8(a)(5) and (1) of the Act by failing to adequately notify and bargain with the Union about the effects of the Respondent's closure of its produce division. The judge concluded that the Respondent failed to provide the Union with timely notice of the decision to close its Federal Produce Division and thereby precluded meaning- ful bargaining on the issue of employees' severance pay. The Respondent contends, inter alia, that it had legitimate business reasons for keeping the de- cision to close Federal confidential until Federal's last week of operation when it commenced mean- ingful effects bargaining with the Union. We find merit in the Respondent's contention. The Respondent distributes various foods and re- lated products to grocery stores and other business- es. Federal, the Respondent's produce division, had been accummulating steadily increasing losses during 1982. The Respondent decided in late Sep- tember 19822 to discontinue the operation of Fed- eral sometime before Thanksgiving. 3 At the time of In its answering brief the Respondent contends, inter alia, that the General Counsel's cross-exceptions and supporting brief were untimely filed and should not be considered by the Board. In view of our decision to dismiss the complaint and the fact that the General Counsel's cross- exceptions pertain solely to the judge's proposed remedy and Order, we find it unnecessary to pass on the Respondent's contention. 2 All dates are in 1982. 3 The complaint does not allege that the Respondent violated the Act by failing to bargain with the Union about the decision to close Federal. 268 NLRB No. 219 the decision to close Federal had an inventory of perishable produce valued at $85,000 to $135,000. The Respondent's president and general manager, Wersich, testified that it was common practice for area food distributors to solicit the business of a closing entity's customers by offering low prices. The Respondent decided to keep the decision to close Federal confidential until shortly before it was implemented. It did so because of the perish- able nature of the large inventory Federal had to maintain and the possibility of an immediate loss of its customers to other distributors. In the meantime, the Respondent sought to make arrangements for the sale of Federal's produce business and its remaining inventory when it ceased operations. In early October the Respondent con- tacted the Castellini Company whose C. L. Frank division was supplying produce to the Respond- ent's accounts on a primary or secondary basis. The Respondent met with Castellini's president on 12 October and later that day Castellini drafted a proposal for servicing the Respondent's produce program. The proposal included the following pro- visions: "Inventory Transfer-C.L. Frank to pur- chase all Creasey produce inventory at cost assum- ing produce is saleable as quality produce to exist- ing accounts," and "Timing: Service to commence no later than week of November 15, 1982. " 4 Wer- sich testified that he agreed to Castellini's 12 Octo- ber proposal in a telephone call "sometime between then and the middle of October." The parties an- ticipated that Federal would close on 12 Novem- ber. During the last week in October the Respondent advanced Federal's closing to 5 November. On 1 November the Respondent informed its customers that Federal would be closing on 5 November and that C. L. Frank would be participating in the Re- spondent's central billing program starting the fol- lowing week. The Union's business agent, McDon- ald, was contacted on 1 November by Federal workers who had learned of the closing. McDon- ald's attempts to reach Wersich on 1 November were unsuccessful. On the morning of 2 November McDonald spoke with Wersich who confirmed that Federal was closing on 5 November.5 The Re- spondent met with the Union on 3, 4, 10, and 15 November and 12 December and discussed various closing-related issues. All matters raised by the Union, except for severance pay, 6 were resolved. 4 With respect to Federal's rolling equipment the proposal stated that Castellini would commit for at least two 20-foot trucks and would exam- ine all of Federal's equipment for potential purchase. 5 C. L. Frank purchased Federal's remaining inventory during the lat- ter's last week of operation. a Severance pay was discussed at each bargaining session and the Union submitted three proposals on the subject. 1425 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The judge found that the timing of the Respond- ent's notice of Federal's closing deprived the Union of a significant opportunity to bargain in a mean- ingful manner. We find that in the circumstances the Respondent provided reasonable notice to the Union and that it fulfilled its obligation to bargain about the effects of its decision to close Federal. We note the perishable nature of Federal's prod- uct, its substantial inventory, and Wersich's uncon- troverted testimony regarding competitors' swift efforts to obtain the business of a closing distribu- tor's customers. We find that the Respondent's concerns with the possible immediate loss of its customers and the inability to dispose of its perish- able inventory were justified. We also note that, at the time of the Respondent's decision in late Sep- tember to discontinue Federal's operation, it did not set a specific date for the closure. When the Respondent orally accepted Castellini's 12 October proposal, which was tentative in some respects and contained details to be worked out, the parties an- ticipated a 12 November closing date. This was not a firm date as it was changed to 5 November during the last week in October. The Respondent notified the Union shortly thereafter. We further rely on the fact that the Respondent delayed giving notice of Federal's closing not only to the Union, but also to Federal's customers and all but a few top management employees of the Re- spondent. In light of the circumstances described above, together with the evidence that the Re- spondent did not treat the Union disparately with respect to notice of the closing, we find that the Respondent's 2 November notice to the Union was reasonable. We further find that the parties en- gaged in meaningful bargaining concerning the ef- fects of Federal's closure and had reached impasse on the matter of severance pay. Accordingly, we shall dismiss the complaint. ORDER The complaint is dismissed. DECISION STATEMENT OF THE CASE PHIL W. SAUNDERS, Administrative Judge: Based on a charge filed on November 26, 1982, by Chauffeurs, Teamsters and Helpers Local Union No. 215 a/w Inter- national Brotherhood of Teamsters, Chauffeurs, Ware- housemen and Helpers of America, herein the Union or Local 215, a complaint was issued on January 26, 1983, against Creasey Company, Inc., and its Division, the Federal Produce Company, herein the Respondent, Company, Creasey and/or Federal, alleging a violation of Section 8(a)(1) and (5) of the Act. The Respondent filed an answer to the complaint denying it had engaged in the alleged matter. Both the General Counsel and the Respondent filed briefs in this matter.' On the entire record in the case and from my observa- tion of the witnesses and their demeanor, I make the fol- lowing FINDINGS OF FACT I. THE BUSINESS OF THE RESPONDENT The Respondent is an Indiana corporation, and at all times material herein, has maintained its principal office and place of business at Evansville, Indiana, where it is engaged in the wholesale sale and distribution of foods and related products. During the 12-month period ending October 31, 1982, the Respondent purchased and received at its Evansville, Indiana facility products, goods, and materials valued in excess of $50,000 directly from points outside the State of Indiana, and during the same period sold and shipped from its Evansville, Indiana facility products, goods, and materials valued in excess of $50,000 directly to points outside the State of Indiana. The Respondent is now, and has been at all times ma- terial herein, an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act. II. THE LABOR ORGANIZATION INVOLVED The Union is a labor organization within the meaning of Section 2(5) of the Act. III. THE UNFAIR LABOR PRACTICES It is alleged in the complaint that on an unknown date in 1981, the Respondent decided to discontinue the oper- ations of its Federal Produce Division Federal, which provided perishable foods to the Respondent's customers, and on or about November 5, 1982, the Respondent im- plemented that decision; and that the Respondent en- gaged in the acts and conduct described above, without adequate prior notice to the Union and without having afforded the Union a meaningful opportunity to negoti- ate and bargain as the exclusive representative of the Re- spondent's employees with respect to the effects of such acts and conduct.2 The Respondent is a food distributor, and as such sup- plies food products to grocery stores and other business- es in the Evansville, Indiana area. Prior to 1976, Federal was a separate company which had engaged in the produce business for many years. On November 1, 1976, the Respondent purchased the assets of Federal and then continued to operate Federal under the same name, but as a division of the Respondent. It also appears that the operation of Federal was continued in the same ware- house which had been used by them in prior years, and which warehouse adjoins the property of the Respondent on which the "Creasey" warehouse is located. Upon Certain errors in the transcript are hereby noted and corrected. The General Counsel's motion to correct the transcript is granted. 2 It should be noted that there are no allegations in the instant com- plaint that the Respondent violated the Act by failing to bargain with the Union over the decision to discontinue the operations of Federal. 1426 CREASEY CO. taking control, the Respondent immediately hired the former employees and also voluntarily recognized the Union as the collective-bargaining agent of such employ- ees-the Union having formerly represented these em- ployees for many years. The Respondent further gave the former Federal employees credit for their seniority acquired in their prior employment, and the Respondent also immediately entered into an agreement with the Union in regard to the bargaining unit of former Federal employees that was practically identical to the agreement which was in existence at that time between the "Crea- sey" bargaining unit employees and the Union, and which gave the former Federal employees a wage in- crease and other fringe benefits.3 Moreover, there was a no bumping clause in the contract with respect to the "Creasey" bargaining unit, but an employee in the "Fed- eral" bargaining unit, who was laid off, had the right of preferential hiring into the Creasey bargaining unit, and the current contract at the time of the discontinuance of the Federal operation, contained such provisions. (See R. Exh. 2.) Richard Wersich, president and general manager of both the Respondent and Federal, testified that the deci- sion to discontinue the operations of Federal Produce was made in late September 1982, after the receipt of the sixth period financial report on the operations of Federal, and that the reason for the discontinuance was economic as Federal had been losing money for many months and the losses were growing larger. President Richard Wersich further testified that when the decision was made to discontinue the operations of Federal, the Respondent also decided, for economic and business reasons, that it could not let anyone in the Ev- ansville area know, except for a few top management persons, of this decision until shortly before it was imple- mented because of the perishable nature of the large in- ventory of produce it had to maintain in its warehouse. Wersich also testified that from their experience in the food industry, the Respondent realized that when it became known that the operations of Federal were being discontinued, other competing food distributors in the area would immediately contact the customers of Feder- al to solicit their business, and these distributors would offer Federal's customers very attractive prices to induce the customers to give them their business and there was a real likelihood that many of the customers would im- mediately do so-that an inventory in the area of $85,000 to $135,000 of perishable produce was maintained in the Federal warehouse, and the Respondent was very con- cerned about being unable to sell this perishable produce, thereby sustaining a loss of many thousands of dollars of inventory; Wersich gave testimony on this point.4 3 As indicated, since November 1, 1976, the Union has represented the employees of Creasey and Federal in separate units and under separate collective-bargaining agreements. 4 Produce by nature is very perishable. It is the most perishable thing in the food business. We have had for some time a lot of competition coming into the area to take produce business from Creasey Company, the Federal Produce. We knew after we made the decision to close that if we did not keep this thing very very quiet, that we would have, in a matter of days, Beerhaus & Son out of Vincennes, Owens Produce out of Kentucky, here in Louisville; other distributors out of Louisville; Bernard Foods and Vegetables out of St Louis. They had all, at one time or an- When Federal was closed on Friday, November 5, 1982, all 21 of its unit employees were terminated, and it appears that the Union had no notice of the impending closure and terminations until November 2, and Federal employees had, in fact, first heard of it only I day earli- er. Thus employee and union steward Donald Gray heard from an outside salesman that Federal was closing, and he then inquired of a supervisor about the matter who confirmed that it was true. Gray then telephoned union business agent Charles McDonald who had heard nothing about it until Gray called, but McDonald said he would contact President Wersich about the matter. McDonald was also contacted by Federal truckdriver Bobby Phelps who had just returned from his route, during which a customer had told him that Friday, No- vember 5, would be his last day. McDonald, who had serviced Federal's and Creasey's successive collective- bargaining agreements since 1972, informed Phelps that he had heard nothing from the Respondent but would check into it. McDonald then telephoned Wersich, but was told that he was not in and so left a message for Wersich to call him. On the morning of November 2, 1982, McDonald placed another call and this time was successful in reach- ing Wersich, and then asked him if it was true that Fed- eral was closing on Friday, November 5, and Wersich replied that it was true, and also told McDonald that he had been telephoning his customers for 2 days, and al- though McDonald was on his list of persons to be called, he had not as yet gotten down to him.5 On November 3, 1982, McDonald, union counsel Sam Morris and steward Donald Gray met at the Respond- ent's facility with attorney William Statham and Re- spondent's director of distribution, James Wilkinson. Statham asked what was the purpose of the meeting, and attorney Morris told him he wanted to negotiate the closing of Federal. Statham asked why, and Morris then mentioned topics such as vacations, health and welfare, pensions and severance pay (Wersich was not in attend- ance although he was present in the building). At this meeting Wilkinson informed the Union that the meat op- erations would go from Federal to Creasey, and that the Castellini Company of Henderson, Kentucky, and/or C. L. Frank Company, a division of Castellini Company, would probably be handling some of the business and discussed also the billing arrangements. The parties fur- ther discussed employee vacations and a list of vacation other, approached our customers on buying produce from them. Okay, and we tried to keep our group of stores on a very competitive basis, which they have to, and we have to keep them united with us. It is very important for us to survive, so, being a practical matter, a very practical matter in doing business, we talked with C. L. Frank Produce Company, because they had been serving our stores all the time We have been serving our stores, either on a primary basis or on a secondary basis, and work out some arrangements so where they would go to our stores and see if they couldn't get there on a support program with their company We deemed this very important to keep it very quiet. If I had announced even four weeks or three weeks ahead of time of closing, all of our people. or all of our competitors would have been in Evansville- 5 The General Counsel wonders how far down McDonald was on the list, and if he had not called Wersich, for the second time, when McDon- ald would have been contacted. Moreover, previously Wersich had even called McDonald at his home on certain occasions, but not this time. 1427 DECISIONS OF NATIONAL LABOR RELATIONS BOARD schedules was given to the Union, and Statham also in- formed the Union that insurance on the employees would be paid through November 6, 1982, and that pen- sions would be paid through November 5, 1982. Sever- ance pay was also brought up and the Union asked for I week's pay per year of service for each employee. The same persons, except for Sam Morris, then met again on the following day, November 4, and discussed different topics. Vacation rights of various employees were discussed and such matters were worked out and agreed upon. The Union inquired if all customers would be billed "centrally" and Statham replied that some would and some would not. Severance pay was again brought up and the Union mentioned that various com- panies in the Evansville area had given such pay when they closed, but the Respondent replied that an "awful lot" of the companies had not given severance pay upon closing, and the parties then engaged in some discussions back and forth along the lines. Attorney Statham also an- swered some questions as to the status of Federal sales- men, and the hiring rights at Creasey for Federal em- ployees. The meeting was adjourned with the under- standing that if the Union had any questions, they would get in touch with attorney Statham. On November 5, 1982, Morris and McDonald talked to Statham on the telephone and arranged for a meeting later that day providing Wersich attended, since very little had been accomplished at the first two meetings in his absence. However, Statham's secretary subsequently called and canceled this tentative meeting. The parties again met on November 10, 1982, at which time Morris asked when the decision to close Federal had been made. Werisch replied that it was made when the institutional or food service phase of Federal's busi- ness had been discontinued-in late 1981 or during the first quarter of 1982-but Wersich's decision at that time was rescinded by management in the Respondent's home office, and Federal was kept open.6 At this meeting the 6 It appears that between September 18 and 30, 1982, at a meeting at- tended by Wersich and the Respondent's home officials, the final decision was made to close Federal, and to do so before Thanksgiving. C. L. Frank Distributors, Inc. (Frank) had already been selling produce to all of Federal's customers either as a primary or secondary supplier, and during the course of telephone conversations and a meeting between Wersich and officials of Frank and its parent company, the Castellini Company, an agreement was reached whereby Frank would service all of Federal's customers and purchase its inventory if a central billing ar- rangement could be agreed upon. (See G.C. Exh. 2.) Initially Wersich testified that it was during the first week of October that he informed officials of Castellini and Frank that Federal would close on November 5, 1982. However, Wersich later testified that it was not until the last of October that he decided to close os. November 5, 1982, rather than on November 12-the anticipated date of closure. In any event, as indicated above, Wersich met with Castellini's president on October 12, 1982, and after which the latter reduced to writing the terms of his proposal that Frank service Federal's customers. The service was to begin no later than the week of November 15, with the anticipated date of closure being November 12, and sometime between October 12 and mid-October 1982, Wersich told President Castellini that his pro- posed agreement was accepted. Accordingly, Frank took over the lease of two of Federal's trucks, and bought all of the produce Federal had during the week of November 1. Later, Frank bought two of Federal's trucks. parties again talked about severance pay, but nothing was accomplished in respect thereto. Vacation matters as to employees King and Ward were discussed, and the subject of possible deliveries by C. L. Frank Company to Federal customers was also mentioned. McDonald asked whether the Federal employees understood the health and welfare package, and Statham replied that he had told the employees about it. Attorney Morris asked if anything had been done to keep Federal open, and the Company replied it had not been a successful operation and for this reason it was decided to close it, and there had been no subcontracting. Further, there were discus- sions again on central billing and how it worked, and the sale of Federal's equipment and warehouse was also mentioned with indications that most everything was up for sale. There was also discussion of turkeys which had been left in Federal's warehouse and whether former Federal employees would be used to load them, and this matter was worked out between the parties. On November 15, 1982, the parties met again and the Union reduced its severance pay request by submitting a written counterproposal which began with I week's pay for 2 to 5 years service.7 The Respondent's representa- tives then offered to give each Federal employee a Thanksgiving turkey as severance pay-Creasey employ- ees were given a Thanksgiving turkey in 1982 and Fed- eral employees had annually received turkeys as a Thanksgiving gratuity-the union representatives then conferred among themselves, and then made yet another severance pay counterproposal which amounted to one- half of their last counterproposal, but the Company would not accept it. At this meeting on November 15 there were also further discussions on central billing pro- cedures, the fact that accrued vacations payments to Federal employees would cost the Respondent about $25,000, and again it was mentioned that closing of Fed- eral was due to economics and nothing could have been done to keep it open. It appears that the last meeting between the parties was held on December 12, 1982, but McDonald testified that, although they went over "practically the same things," nothing was accomplished, and there was no mention of any future meetings. Counsel for the Respondent argues that an impasse was reached between the parties on the subject of sever- ance pay, but points out that all other issues in question were resolved, and at the last meeting on December 12, 1982, neither side requested another meeting, and it should also be noted that although there was a grievance procedure in the collective-bargaining agreement be- tween Federal and the Union, no grievance of any kind was ever filed by either the Union or any employee over the effect of the closing on the bargaining unit employ- ees. Counsel for the Respondent also points out that, at the time of the closing, the Respondent paid out a total of approximately $25,000 of accrued vacation pay to the bargaining unit employees with each receiving on the av- erage about $1,000 or more, and that during the bargain- 7 See G.C. Exh. 6. 1428 CREASEY CO. ing sessions the Respondent took the position that it would not pay any severance pay inasmuch as the Feder- al operation had been losing money for many months, and the employees were each receiving substantial ac- crued vacation pay upon being laid off. Wersich's testi- mony on this point is contained, in part, in the following answer: As I stated earlier, the produce division had been losing money for months and months and months. We could say years and it grew worse. That was one of our reasons. We felt that we had been under- writing the jobs of these men for a good while from the standpoint of keeping the place open. The second reason was the amount of vacation pay that each one of these men received. It was quite sub- stantial, probably more, much more than the aver- age type situation. It is further pointed out by the Respondent that during the first bargaining meeting, the Union and the Company agreed that the terminated or laid-off employees of Fed- eral would have the right to be hired before Creasey hired employees from other sources;8 that in regard to vacations-there was an initial disagreement over the amount of accrued vacation pay to be received by cer- tain employees, but this issue was resolved during the bargaining meetings, and all of the vacation issues were resolved; that in regard to pensions-the collective-bar- gaining agreement contained a provision in regard there- to, and after some discussion the Union advised the Re- spondent that it did not want to negotiate over any pen- sion issues inasmuch as the Respondent needed to take this matter up with the Teamsters' Central States; that in regard to health and welfare, the Respondent agreed to pay the insurance premiums for all the bargaining unit employees through November 6, 1982; but that in regard to severance pay the demands of the Union were very high, and even the counterproposal of the Union would have required the Respondent to pay many thousands of dollars to the bargaining unit employees for severance pay, and this, coming on top of accrued vacation pay in the total sum of $25,000, would have been a high ex- penditure for a business operation that had been losing considerable money for many months. It is pointed out that the Respondent did make an offer of a turkey for each employee, which was a material benefit and not a mere token (between $7 and $8), but the Union refused the offer, and thus, an impasse on this subject was ar- rived at after several meetings. Moreover, there was no provision in the contract requiring severance pay, and as a result there were no legal requirements of any kind. In the final argument counsel for the Respondent maintains that there was meaningful and good-faith bar- gaining between the Respondent and the Union about the effects of the closing inasmuch as the record estab- lishes that there was agreement on every issue the Union wanted to discuss except severance pay, and on this sub- ject the Union's proposal was excessive in view of the high accrued vacation pay agreed to be paid by the Re- 8 See R. Exh. 2-Art. XXXVIII. spondent under the terms of the collective-bargaining agreement, Furthermore, there can be no real issue in this case on the question of the timeliness of the notice given by the Respondent to the Union about the clos- ing-this could only be a genuine issue if such bargaining did not take place, but in any event, the Respondent had a genuine economic reason for not giving notice to the Union any earlier than it did, as to have done otherwise would have cost the Respondent thousands of dollars of lost perishable inventory. Final Conclusions In First National Corp. v. NLRB, 452 U.S. 666 (1981), the Supreme Court, while holding that an employer has no duty to bargain over its decision to close a portion of its business in certain situations, nevertheless, clearly reaffirmed the Board's general rule that an employer is obligated to bargain about the effects of such a decision, and, with particular respect to mandatory bargaining about the effects of a decision to close, the Court stated that the union must be given a "significant opportunity" to bargain in a "meaningful manner and at a meaningful time." It appears to me that under such guidelines, early noti- fication of the decision to close in the instant case was essential, and quite obviously, as noted by the General Counsel, it is during this period, between notification and effectuation of a decision, that a union can have a "sig- nificant opportunity" to engage in "meaningful" discus- sions with the employees with the employer, and if nec- essary to have those discussions backed by economic means. In Whitehead Brothers Co., 263 NLRB 895 (1982), as further pointed out, the administrative law judge found that the employer had arrived at a tentative decision to terminate its trucking operations in mid-October, and then finalized the decision on November 20-the day on which it terminated operations, but the employer did not notify the union of the termination until the union con- tacted it on or after November 20 in response to calls from employees. The admininstrative law judge, affirmed by the Board, found an 8(a)(5) violation based upon the employer's failure to give prior notice when it had, for all practical purposes, arrived at its decision more than a month before the actual termination, and on its subse- quent refusal to bargain. In National Car Rental, 252 NLRB 159 (1980), as also pointed out, the employer sold its truck leasing operation and assigned some of its lease accounts to a purchaser. The employer had spent considerable time considering its options, and in November 1977 began negotiating a sale. Oral agreement was reached with a purchaser on February 16, 1978, and at least some of the employees were notified on February 22, 1978, as was the union, and the employees were then terminated on or about February 25. The Board found no duty to bargain over the decision to sell, but found an 8(aX5) violation in fail- ure to give timely notice to the union and afford it an opportunity to bargain over the effects. No bargaining sessions were held in that case, and the administrative law judge found that the union had waived its rights by 1429 DECISIONS OF NATIONAL LABOR RELATIONS BOARD not specifically requesting bargaining, but in this respect the Board reversed finding that the employer's present- ing the union with a fait accompli precluded meaningful bargaining. 9 In the instant case, the Respondent's final decision to close Federal occurred between September 18 and 30; and by mid-October 1982, Wersich accepted Castellini's (Frank's) offer to buy Federal Produce, take over Feder- al's customers, and participate in the central billing ar- rangement. At that time the anticipated closing date was November 12, but it was later changed to November 5. Nevertheless, it was not until November 2, 1982, that the Union was officially notified. As Wersich admitted, the word had already been received by the retailers on No- vember 1, and they, in turn, were informing Federal em- ployees on that day, but it was not until the morning of November 2, when McDonald called Wersich for the second time, just 3 days before the closing of Federal, that the Union was officially notified. As detailed further by the General Counsel, the Re- spondent, at the hearing, sought to explain such short notice by claiming that competitors would have immedi- ately called on Federal's customers if the Respondent had announced the closure before it did, but this claim is belied by Wersich's testimony that Castellini's (and/or Frank's) proposal was accepted by mid-October. Also, Wersich admitted that in October Frank had been selling produce to all of Federal's accounts on a secondary or primary basis, and Frank would be there to supply the produce until Federal closed. Wersich admitted that Frank was able to supply produce to Federal's customers during that period, and further that Frank had purchased most of the produce Federal had on hand. I am in agreement that the net result of the Respond- ent's failure to provide timely notice was that the Union was denied an opportunity to bargain at a time when there would have been some measure of balanced bar- gaining power. One of Federal's employees had over 30 years' seniority and six employees had worked for more than 20 years. Clearly, the severance pay issue was of considerable importance, but the timing of the Respond- ent's announcement precluded any meaningful bargaining on that issue, and as a result the only thing offered by the Company was a turkey to each employee. o In the instant case, the Union had only 3 days' notice before the plant closed, and in reality the Union received a fait accompli which precluded the Union from partici- pating in meaningful bargaining on the effects of the closing and particularly on severance pay and perhaps, 9 See also Merryweather Optical Co., 240 NLRB 1213 (1979); Whitehall Packing Co., 257 NLRB 193 (1981) and Penntech Papers Inc., 263 NLRB 264 (1982). '1 I think it reasonable to assume that no grievances were filed on this matter because the Union and employees selected to register their dissa- tisfactions through the National Labor Relations Board. It further ap- pears that all agreement (partial or otherwise) reached on layoffs, ac- crued vacations, health and welfare, and pensions were, for the most part, mandatory obligations which the Company had to recognize under the terms of the bargaining contract between the parties, and in this regard it is noted that two of the benefits were only extended to on or about November 5, the date of the terminations. as also suggested, on placement of the employees so that the impact of the sudden closing would not have fallen so harshly on them. Although the employees received accrued vacation pay, they were immediately put out of their jobs without even I week's notice and realized no severance pay. By the Respondent's failing to give timely notice of its decision, the Union did not have a significant opportunity to bargain in a meaningful manner, and thereby the Respondent violated Section 8(a)(5). The Respondent will be required to bargain on severance pay. CONCLUSIONS OF LAW 1. The Company is an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 2. The Union is a labor organization within the mean- ing of Section 2(5) of the Act. 3. All truckdrivers, all warehousemen, all perishable employees, all mechanics and maintenance employees and all freezer operators, but excluding all office clerical personnel, all guards and all supervisors as defined in the Act, and all other employees, constitute a unit appropri- ate for collective bargaining within the meaning of Sec- tion 9(b) of the Act. 4. At all times material, the Union has been the exclu- sive collective-bargaining representative of the employ- ees in the unit described above. 5. By engaging in the conduct described in section III above, the Respondent has engaged in and is engaging in unfair labor practices within the meaning of Section 8(a)(1) and (5) of the Act. THE REMEDY Having found that the Respondent has engaged in cer- tain unfair labor practices, I shall recommend that it cease and desist therefrom and from like or related un- lawful conduct, and to bargain, upon request, with the Union concerning severance pay in the termination of unit employees upon the closing of Federal Produce. However, a bargaining order alone is an inadequate remedy because now that Respondent has closed Federal Produce without notice, the employees no longer have any bargaining power, and in order to create an atmos- phere in which meaningful bargaining can be assured, some measure of economic strength must be restored to the Union. Accordingly, I shall order the Respondent to pay its bargaining unit employees amounts at the rates of their normal wages when last in the Respondent's employ from 5 days after the date of this Decision until the oc- currence of the earliest of the following events: (1) the date the Respondent bargains to agreement with the Union on those subjects pertaining to the effects of the closing on bargaining unit employees; (2) a bona fide im- passe in bargaining; (3) the failure of the Union to re- quest bargaining within 5 days of this Decision, or to commence negotiations within 5 days of the Respond- ent's notice of its desire to bargain with the Union; or (4) the subsequent failure of the Union to bargain in good 1430 CREASEY CO. faith. In no event shall the sum be less than these em- ployees would have earned for a 2-week period at the rates of their normal wages when last in the Respond- ent's employ. Interest shall be paid in the manner pre- scribed in Florida Steel Corp, 231 NLRB 651 (1977)." [Recommended Order omitted from publication.] l See generally Isis Plumbing Co., 138 NLRB 716 (1962). 1431