Cyclone Fence, Inc.

National Labor Relations Board - Board Decisions

Apr 28, 2000

330 N.L.R.B. 1354 (N.L.R.B. 2000)

DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1354
Cyclone Fence, Inc. and Local 1191, Laborers’ Inter-
national Union of North America, AFL–CIO.
Case 7–CA–42461
April 28, 2000
DECISION AND ORDER
BY CHAIRMAN TRUESDALE AND MEMBERS FOX
AND BRAME
Upon a charge filed by the Union on October 12, 1999,
the General Counsel of the National Labor Relations
Board issued a complaint on November 30, 1999, against
Cyclone Fence, Inc., the Respondent, alleging that it has
violated Section 8(a)(5) and (1) of the National Labor
Relations Act. Although properly served copies of the
charge and complaint, the Respondent failed to file an
answer.
On February 1, 2000, the General Counsel filed a Mo-
tion for Summary Judgment with the Board. On Febru-
ary 3, 2000, the Board issued an order transferring the
proceeding to the Board and a Notice to Show Cause
why the motion should not be granted. The Respondent
filed a response, admitting that it had terminated its busi-
ness and that unit employees had not been paid since
September 30, 1999, acknowledging the complaint alle-
gations that it had failed to bargain over the closing and
the failure to pay employees, stating that it has filed a
petition in bankruptcy under Chapter 11 of the Bank-
ruptcy Code, and requesting that the case be stayed pur-
suant to 11 U.S.C. § 362 of the Bankruptcy Code.
The Respondent does not specifically deny any of the
complaint allegations. The Respondent in effect asserts
that it was faced with compelling economic circum-
stances when its lender abruptly terminated its line of
credit and took all available funds pursuant to their lien
rights and that such circumstances excuse its failure to
provide notice to and bargain with the Union. Accord-
ingly, we find that the allegations in the motion are un-
disputed.
The National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
Ruling on Motion for Summary Judgment
Section 102.20 of the Board’s Rules and Regulations
provide that any allegation in the complaint not specifi-
cally denied or explained shall be deemed admitted to be
true and so found by the Board unless good cause to the
contrary is shown. The Board recognizes that “the estab-
lishment of compelling economic circumstances may
excuse a company’s failure to bargain over [a] layoff
decision,”1 but that “only in extraordinary situations will
this exception apply.”2 In Nathan Yorke, Trustee, 259
NLRB 819 (1981), the Board adopted the administrative
law judge’s finding that the employer violated Section
8(a)(5) and (1) by failing to bargain with the union re-
garding the effects on unit employees of its decision to
terminate operations where the newly appointed bank-
ruptcy trustee acted immediately upon learning of the
employer’s quickly dwindling assets. The Seventh Cir-
cuit court of appeals enforced the Board’s decision, as
modified, finding that the emergency situation that con-
fronted the trustee in bankruptcy excused the obligation
to notify the union before the plant closure, but did not
excuse its failure to bargain with the union after the clo-
sure over the effects of the closure, stating “[o]nce opera-
tions had been terminated, the emergency situation
ended.”3

1 Lapeer Foundry & Machine, 289 NLRB 952, 954 (1988), citing
Aquaslide ‘N’ Dive Corp., 281 NLRB 219 fn. 2 (1986) (no violation for
failure to notify union prior to layoffs where employer acted immedi-
ately after receiving notice that the bank had frozen all its assets).
In the instant case, the General Counsel alleges in the
complaint that the Respondent violated Section 8(a)(5)
and (1) of the Act by ceasing operations, terminating all
unit employees, and failing to pay the wages and appro-
priate fringe benefits earned by employees, “without
prior notice to the Charging Union and without an oppor-
tunity to bargain with Respondent with respect to this
conduct or the effects of such conduct.” The General
Counsel seeks as an affirmative remedy an order that the
Respondent bargain in good faith with the Union over
the effects on the unit employees of the cessation of its
operations, a Transmarine remedy, and an order that unit
employees be paid their unpaid wages and fringe benefits
for time worked. There is no remedy sought for the fail-
ure to bargain over the decision to terminate operations
or the failure to give prior notice of the termination.
As in Nathan Yorke, it would appear that the emer-
gency situation that the Respondent was confronted with
here might excuse its failure to give prior notice to the
Union and afford the Union with an opportunity to bar-
gain about the decision to terminate operations prior to
the actual shutdown. However, it also appears that once
the “operations had been terminated, the emergency
situation ended,” and the Respondent’s failure to bargain
about the effects of the closing constitutes a violation of
the Act.4
In light of this, we find that the Respondent’s response
has admitted or failed to specifically deny the allegations
of the complaint, and has not raised any issues warrant-
2 Id. In Lapeer Foundry, the employer failed to notify and bargain
with the union about its decision to lay off unit employees after a coil
burned out on its one remaining furnace. The Board found that failure
unlawful, indicating that this situation was not the type of “compelling
economic circumstances” that would excuse the company’s actions.
3 709 F.2d 1138, 1144 (1983).
4 Id., 709 F.2d at 1144.
330 NLRB No. 186
CYCLONE FENCE, INC. 1355
ing a hearing.5 Accordingly, we grant the General Coun-
sel’s Motion for Summary Judgment.6
On the entire record, the Board makes the following
FINDINGS OF FACT
I. JURISDICTION
At all material times, the Respondent, a corporation,
with an office and place of business in Grand Prairie,
Texas and a district office in Garden City, Michigan, has
been engaged as a commercial fencing contractor. Dur-
ing the calendar year ending December 31, 1998, the
Respondent, in conducting its business operations, de-
rived gross revenue in excess of $500,000. During the
calendar year ending December 31, 1998, the Respon-
dent purchased and received at its jobsites within the
State of Michigan, goods valued in excess of $50,000
directly from points outside the State of Michigan. We
find that the Respondent is an employer engaged in
commerce within the meaning of Section 2(2), (6), and
(7) of the Act and that the Union is a labor organization
within the meaning of Section 2(5) of the Act.
II. ALLEGED UNFAIR LABOR PRACTICES
At all material times, J. Michael Withers has been the
Respondent’s general manager and a supervisor within
the meaning of Section 2(11) of the Act and an agent of
the Respondent within the meaning of Section 2(13) of
the Act. The following employees of the Respondent,
hereinafter called the Unit, constitute a unit appropriate

5 C & H Moving and Storage Co., 299 NLRB No. 62 (1990) (not re-
ported in Board volumes), is distinguishable. There, in a motion for
summary judgment proceeding, the Board found genuine issues of
material fact were raised with respect to par. 12 of the Motion for
Summary Judgment where it appeared from the remedy sought in the
complaint that the General Counsel was alleging as unlawful the re-
spondent’s failure to bargain over the cessation of operations. In those
circumstances, the Board found that the defenses raised by the respon-
dent (that it did not violate the Act because its failure to pay wages and
fringe benefits was due to its inability to pay and the decision to close
the plant was the result of economic emergency beyond the control of
either itself or the union) were sufficient to defeat the General Coun-
sel’s Motion for Summary Judgment on those issues. Id. slip op. at 2.
As noted above, in the instant case it appears from the remedy
sought in the complaint that the General Counsel is alleging as a viola-
tion only the Respondent’s failure to bargain over the effects of the
decision to terminate operations, and not the decision itself. Accord-
ingly, we find it appropriate to grant summary judgment on this issue.
Because Member Brame agrees that the violation alleged deals with
a failure to bargain over the effects of the decision to terminate opera-
tions, he finds it unnecessary to rely on the text set out earlier and the
accompanying fn. 2 which deals with a failure to bargain about the
decision to lay off unit employees.
6 Although the Respondent’s response also indicates that it has filed
a petition under Chapter 11 of the Bankruptcy Code, and asserts that
the instant unfair labor practice proceedings are or should be stayed
pursuant to 11 U.S.C. § 362, it is well established that the institution of
bankruptcy proceedings does not deprive the Board of jurisdiction or
authority to entertain and process an unfair labor practice case to its
final disposition. Phoenix Co., 274 NLRB 995 (1985). Board proceed-
ings fall within the exception to the automatic stay provisions for pro-
ceedings by a governmental unit to enforce its police or regulatory
powers. See id., and cases cited therein.
for the purposes of collective bargaining within the
meaning of Section 9(a) of the Act:

All asphalt shoveler or loader, asphalt plant misc., as-
phalt raker helper, burlap man, carpenters’ helper, yard
man, guard rail builder’s helper, earth retention barrier
and wall and M.S.E. wall installers helper, highway
and median barrier installers helper(including sound,
retaining and crash barriers), fence erector’s helper,
dumper(wagon, truck, etc.,), joint filling labor, misc.,
unskilled labor, sprinkler labor, form setting labor,
form stripper, pavement reinforcing, handling and plac-
ing (e.g., wire mesh, steel mats, dowel bars, etc.), ma-
son’s or bricklayer’s tender on manholes, manhole
builder, headwalls, etc., waterproofing, (other than
buildings) seal coating and slurry mix, shoring, under-
pinning, bridge painting, etc., (spray, roller and brush),
sandblasting, pressure grouting, bridge pin and hanger
removal, Material Recycling Laborer, Horizontal Paver
Laborer (brick, concrete, clay, stone and asphalt),
Ground Stabilization and Modification Laborer, grout-
ing, waterblasting, Top Man, and railroad track and
trestle laborer, employed by the Employer at its jobsites
in the State of Michigan; but excluding engineering
employees, clerical employees, timekeepers, superin-
tendents, assistant superintendents, guards and supervi-
sors as defined in the Act.

Since approximately 1983, and at all material times,
the Charging Party Union has been the exclusive collec-
tive-bargaining representative of the employees in the
unit, and since 1983 has been recognized by the Respon-
dent as such. This recognition has been embodied in
successive collective-bargaining agreements, the most
recent of which is effective by its terms from June 1,
1998 through June 1, 2003.
At all times since about 1983, based on Section 9(a) of
the Act, the Union has been the exclusive collective-
bargaining representative of the Unit.
On or about October 8, 1999, the Respondent ceased
all operations at, and closed, its Garden City facility,
terminating all its employees.
Since about late September 1999, the Respondent has
failed to pay the wages earned by employees in the unit
and has failed to pay the appropriate fringe benefits for
those employees, including but not limited to vacation,
pension, health care, annuity, and training as set forth in
the 1998–2003 collective-bargaining agreement.
These subjects relate to wages, hours, and other terms
and conditions of employment of the unit and are manda-
tory subjects of bargaining. The Respondent engaged in
the behavior described above without prior notice to the
Union and without providing the Union an opportunity to
bargain with the Respondent with respect to this conduct
or the effects of this conduct.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1356
CONCLUSIONS OF LAW
By the acts and conduct described above, the Respon-
dent has been failing and refusing to bargain collectively
and in good faith with the exclusive collective bargaining
representative of its employees, and has thereby engaged
in unfair labor practices affecting commerce within the
meaning of Section 8(a)(1) and (5) and Section 2(6) and
(7) of the Act.
REMEDY
Having found that the Respondent has engaged in cer-
tain unfair labor practices, we shall order it to cease and
desist and to take certain affirmative action designed to
effectuate the policies of the Act. Specifically, having
found that the Respondent has violated Section 8(a)(1)
and (5) of the Act by failing to bargain with the Union
over the effects of its decision to close its Michigan facil-
ity, we shall order the Respondent, on request, to bargain
with the Union concerning the effects of its decision to
cease operations. As a result of the Respondent’s unlaw-
ful failure to bargain in good faith with the Union, the
terminated employees have been denied an opportunity
to bargain through their collective-bargaining representa-
tive. Meaningful bargaining cannot be assured until
some measure of economic strength is restored to the
Union. A bargaining order alone, therefore, cannot serve
as an adequate remedy for the unfair labor practices
committed.
Accordingly, we deem it necessary, in order to effec-
tuate the purposes of the Act, to require the Respondent
to bargain with the Union concerning the effects of clos-
ing its facility on its employees, and shall accompany our
order with a limited backpay requirement designed both
to make whole the employees for losses suffered as a
result of the violations and to re-create in some practica-
ble manner a situation in which the parties’ bargaining
position is not entirely devoid of economic consequences
for the Respondent. We shall do so by ordering the Re-
spondent to pay backpay to the terminated employees in
a manner similar to that required in Transmarine Naviga-
tion Corp., 170 NLRB 389 (1968).7
Thus, the Respondent shall pay its terminated employ-
ees backpay at the rate of their normal wages when last
in the Respondent’s employ from 5 days after the date of
this Decision and Order until occurrence of the earliest of
the following conditions: (1) the date the Respondent
bargains to agreement with the Union on those subjects
pertaining to the effects of the closing of its facility on its
employees; (2) a bona fide impasse in bargaining; (3)
the Union’s failure to request bargaining within 5 busi-

7 In its response to the Notice to Show Cause, the Respondent stated
that it was trying to liquidate its intellectual property in an attempt to
create resources from which creditors can be paid. Thus, the Board can
reasonably conclude that if the Respondent had bargained about the
shutdown immediately after the closing, the Union would have had
some leverage in obtaining concessions.
ness days after receipt of this Decision and Order, or to
commence negotiations within 5 days of the Respon-
dent’s notice of its desire to bargain with the Union; (4)
the Union’s subsequent failure to bargain in good faith;
but in no event shall the sum paid to these employees
exceed the amount they would have earned as wages
from the date on which the Respondent terminated its
operations, to the time they secured equivalent employ-
ment elsewhere, or the date on which the Respondent
shall have offered to bargain in good faith, whichever
occurs sooner; provided, however, that in no event shall
this sum be less than the employees would have earned
for a 2-week period at the rate of their normal wages
when last in the Respondent’s employ. Backpay shall be
based on earnings which the terminated employees
would normally have received during the applicable pe-
riod, less any net interim earnings, and shall be computed
in accordance with F.W. Woolworth Co., 90 NLRB 289
(1950), with interest as prescribed in New Horizons for
the Retarded, 283 NLRB 1173 (1987).
In addition, having found that the Respondent has
failed to pay the wages earned by employees in the unit
and has failed to pay the appropriate fringe benefits for
said employees, including, but not limited to, vacation,
pension, health care, annuity and training as set forth in
the 1998–2003 collective-bargaining agreement, we shall
order the Respondent to make whole the unit employees
by paying to them the amount of wages they earned and
by making all contractually required contributions to the
fringe benefit funds, including any additional amounts
applicable to such delinquent payments as determined
pursuant to Merryweather Optical Co., 240 NLRB 1213,
1216 fn.7 (1979). In addition, the Respondent shall re-
imburse unit employees for any expenses ensuing from
its failure to make the required contributions, as set forth
in Kraft Plumbing & Heating, 252 NLRB 891 fn. 2
(1980), enfd. 661 F.2d 940 (9th Cir. 1981), such amounts
to be computed in the manner set forth in Ogle Protec-
tion Service, 183 NLRB 682 (1970), enfd. 444 F.2d 502
(6th Cir. 1971), with interest as prescribed in New Hori-
zons for the Retarded, 283 NLRB 1173 (1987).8
In view of the fact that the Respondent’s facility is cur-
rently closed, we shall order the Respondent to mail a
copy of the attached notice to the Union and to the last
known addresses of its former employees in order to in-
form them of the outcome of this proceeding.
ORDER
The National Labor Relations Board orders that the
Respondent, Cyclone Fence, Inc., Grand Prairie, Texas
8 To the extent that an employee has made personal contributions to
a fund that are accepted by the fund in lieu of the employer’s delin-
quent contributions during the period of the delinquency, the respon-
dent will reimburse the employee, but the amount of such reimburse-
ment will constitute a setoff to the amount that the respondent other-
wise owes the fund.
CYCLONE FENCE, INC. 1357
and Garden City, Michigan, its officers, agents, succes-
sors, and assigns, shall
1. Cease and desist from
(a) Refusing to bargain with Local 1191, Laborers In-
ternational Union of North America, AFL-CIO, which is
the designated exclusive collective-bargaining represen-
tative of the Respondent’s employees in the appropriate
unit, over the effects of its decision to close its Michigan
operations. The appropriate unit consists of:

All asphalt shoveler or loader, asphalt plant misc., as-
phalt raker helper, burlap man, carpenters’ helper, yard
man, guard rail builder’s helper, earth retention barrier
and wall and M.S.E. wall installers helper, highway
and median barrier installers helper (including sound,
retaining and crash barriers), fence erector’s helper,
dumper(wagon, truck, etc.,), joint filling labor, misc.,
unskilled labor, sprinkler labor, form setting labor,
form stripper, pavement reinforcing, handling and plac-
ing (e.g., wire mesh, steel mats, dowel bars, etc.), ma-
son’s or bricklayer’s tender on manholes, manhole
builder, headwalls, etc., waterproofing, (other than
buildings) seal coating and slurry mix, shoring, under-
pinning, bridge painting, etc., (spray, roller and brush),
sandblasting, pressure grouting, bridge pin and hanger
removal, Material Recycling Laborer, Horizontal Paver
Laborer (brick, concrete, clay, stone and asphalt),
Ground Stabilization and Modification Laborer, grout-
ing, waterblasting, Top Man, and railroad track and
trestle laborer, employed by the Employer at its jobsites
in the State of Michigan; but excluding engineering
employees, clerical employees, timekeepers, superin-
tendents, assistant superintendents, guards and supervi-
sors as defined in the Act.

(b) Since about late September 1999, failing and re-
fusing to pay the wages earned by employees in the unit
and failing to pay the appropriate fringe benefits for
those employees, including but not limited to vacation,
pension, health care, annuity, and training as set forth in
the 1998–2003 collective-bargaining agreement.
(c) In any like or related manner interfering with, re-
straining, or coercing employees in the exercise of the
rights guaranteed them by Section 7 of the Act.
2. Take the following affirmative action necessary to
effectuate the policies of the Act.
(a) On request, bargain with the Union concerning the
effects on the unit employees of the termination of the
Respondent’s operations at its Garden City, Michigan
facility, and the termination of its employees, and reduce
to writing and execute any agreement reached as a result
of such bargaining.
(b) Pay its former unit employees backpay at the rate
of their normal wages when last in the Respondent’s em-
ploy from 5 days after the date of this Decision and Or-
der until occurrence of the earliest of the following con-
ditions: (1) the date the Respondent bargains to agree-
ment with the Union on those subjects pertaining to the
effects of the closing of its facility on its employees; (2)
a bona fide impasse in bargaining; (3) the Union’s failure
to request bargaining within 5 business days after receipt
of this Decision and Order, or to commence negotiations
within 5 days of the Respondent’s notice of its desire to
bargain with the Union; (4) the Union’s subsequent fail-
ure to bargain in good faith; but in no event shall the sum
paid to these employees exceed the amount they would
have earned as wages from October 8, 1999, the date on
which the Respondent terminated its operations, to the
time they secured equivalent employment elsewhere, or
the date on which the Respondent shall have offered to
bargain in good faith, whichever occurs sooner; pro-
vided, however, that in no event shall this sum be less
than the employees would have earned for a 2-week pe-
riod at the rate of their normal wages when last in the
Respondent’s employ, with interest, as set forth in the
remedy portion of this decision.
(c) Pay unit employees the wages earned by employ-
ees since about late September 1999, and pay the appro-
priate fringe benefits for those employees, including but
not limited to vacation, pension, health care, annuity, and
training as set forth in the 1998–2003 collective-
bargaining agreement.
(d) Preserve and, within 14 days of a request, make
available to the Board or its agents for examination and
copying, all payroll records, social security payment re-
cords, timecards, personnel records and reports, and all
other records necessary to analyze the amount of back-
pay due under the terms of this Order.
(e) Within 14 days after service by the Region, dupli-
cate and mail, at its own expense and after being signed
by the Respondent’s authorized representative, signed
and dated copies of the attached notice marked “Appen-
dix”9 to the Union and to all current and former unit em-
ployees.
(f) Within 21 days after service by the Region, file
with the Regional Director a sworn certification of a re-
sponsible official on a form provided by the Region at-
testing to the steps that the Respondent has taken to
comply.
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 vio-
lated the National Labor Relations Act and has ordered us to
post and abide by this notice.

9 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 Na-
tional Labor Relations Board” shall read “Posted Pursuant to a Judg-
ment of the United States Court of Appeals Enforcing an Order of the
National Labor Relations Board.”
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1358

WE WILL NOT refuse to bargain with Local 1191, La-
borers International Union of North America, AFL–CIO,
which is the designated exclusive collective-bargaining
representative of the Respondent’s employees in the
appropriate unit, over the effects of its decision to close
its Garden City, Michigan operations. The appropriate
unit consists of:

All asphalt shoveler or loader, asphalt plant misc., as-
phalt raker helper, burlap man, carpenters’ helper, yard
man, guard rail builder’s helper, earth retention barrier
and wall and M.S.E. wall installers helper, highway
and median barrier installers helper (including sound,
retaining and crash barriers), fence erector’s helper,
dumper (wagon, truck, etc.,), joint filling labor, misc.,
unskilled labor, sprinkler labor, form setting labor,
form stripper, pavement reinforcing, handling and plac-
ing (e.g., wire mesh, steel mats, dowel bars, etc.), ma-
son’s or bricklayer’s tender on manholes, manhole
builder, headwalls, etc., waterproofing, (other than
buildings) seal coating and slurry mix, shoring, under-
pinning, bridge painting, etc., (spray, roller and brush),
sandblasting, pressure grouting, bridge pin and hanger
removal, Material Recycling Laborer, Horizontal Paver
Laborer (brick, concrete, clay, stone and asphalt),
Ground Stabilization and Modification Laborer, grout-
ing, waterblasting, Top Man, and railroad track and
trestle laborer, employed by the Employer at its jobsites
in the State of Michigan; but excluding engineering
employees, clerical employees, timekeepers, superin-
tendents, assistant superintendents, guards and supervi-
sors as defined in the Act.

WE WILL NOT fail and refuse to pay the wages earned
by employees in the unit since about late September
1999, and the appropriate fringe benefits for those em-
ployees, including but not limited to vacation, pension,
health care, annuity, and training as set forth in the 1998–
2003 collective-bargaining agreement.
WE WILL NOT in any like or related manner interfere
with, restrain, or coerce you in the exercise of the rights
guaranteed you by Section 7 of the Act.
WE WILL, on request, bargain with the Union concern-
ing the effects on the unit employees of the termination
of our operations at our Garden City, Michigan facility,
and the termination of our employees, and reduce to writ-
ing and execute any agreement reached as a result of
such bargaining.
WE WILL pay our former employees in the unit de-
scribed above who were employed at the time of our
closing their normal wages for the period of time set
forth in the decision underlying this notice to employees,
with interest.
WE WILL pay the wages earned by our unit employees
since about late September 1999, and pay the appropriate
fringe benefits for those employees, including but not
limited to vacation, pension, health care, annuity, and
training as set forth in the 1998–2003 collective-
bargaining agreement.

CYCLONE FENCE, INC.