Elm Hill Meats of Owensboro, Inc.,

National Labor Relations Board - Board Decisions

Oct 8, 1974

213 N.L.R.B. 874 (N.L.R.B. 1974)

874 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Elm Hill Meats of Owensboro , Inc., Elm Hill Meats,
Inc., Baltz Brothers Packing Company and District
Union Local 227, Amalgamated Meat Cutters and
Butcher Workmen of North America , AFL-CIO.
Case 25-CA-5700
October 8, 1974
DECISION AND ORDER
On January 18, 1974, Administrative Law Judge
Joel A. Harmatz issued the attached Decision in this
proceeding. Thereafter, Respondent filed exceptions
and a supporting brief, and General Counsel filed
exceptions, a supporting brief, and a brief in support
of the Administrative Law Judge's Decision.
The Board has considered the record and the at-
tached Decision in light of the exceptions and briefs
and has decided to adopt the rulings, findings, and
conclusions of the Administrative Law Judge only to
the extent consistent herewith.
We agree with the Administrative Law Judge that
Respondent did not, for discriminatory reasons, dis-
continue operations at its Owensboro plant, and that
it did not discriminatorily deny vacation pay to em-
ployees Joann Hall and Shirley Sapp. However, we
disagree with his further finding that Respondent vio-
lated Section 8(a)(5) and (1) of the Act by failing to
bargain with the Union over the decision to close
down the Owensboro plant and the effects thereof
upon the employees.
In the late spring and fall of 1972, the Union (Dis-
trict Union Local 227, Amalgamated Meat Cutters
and Butcher Workmen of North America, AFL-
CIO), engaged in an organizational campaign among
production and maintenance employees of
Respondent's Owensboro plant, which employed
about 25 plant employees. By September 21, 1972, the
Union had signed up 18 of the 25 employees and on
that date requested recognition as bargaining repre-
sentative. Respondent refused the request. On Sep-
tember 25, the Union filed a representation petition
with the Board. Shortly thereafter, on October 4,
1972, the Union filed unfair labor practice charges
against Respondent. On November 6, 1972, the Gen-
eral Counsel issued a complaint alleging that Respon-
dent had violated Section 8(a)(1), (3), and (5) of the
Act. Thereafter, a hearing was duly conducted on the
complaint allegations before Administrative Law
Judge Henry L. Jalette, who issued his Decision on
April 17, 1973, finding that Respondent had violated
Section 8(a)(1) of the Act by coercive interrogation,
threats of discharge, threats of plant closing, surveil-
lance, and creating the impression thereof; and violat-
ed Section 8(a)(3) by discharging four employees
because they had supported the Union. The Adminis-
trative Law Judge further found that a bargaining
order was necessary to remedy the effects of the above
unfair labor practices and therefore concluded that
Respondent had violated Section 8(a)(5) and (1) by
refusing to recognize and bargain with the Union. On
August 7, 1973, the Board issued its Decision and
Order, adopting the findings and recommendations of
the Administrative Law Judge.'
Meanwhile, on June 21, 1973, Respondent notified
its employees that it was closing the Owensboro plant
for economic reasons and on June 27 ceased opera-
tions at that plant. Respondent concededly did not
bargain with the Union about the decision to close or
its effects upon the employees.
Respondent argued to the Administrative Law
Judge, as it does to the Board, that a Gissel 2 bargain-
ing order, which was issued in the prior case, operates
infuturo since it is remedial, and therefore no bargain-
ing obligation arises prior to the issuance of such a
remedy. The Administrative Law Judge rejected this
interpretation of the Gissel bargaining order. On the
basis of existing precedent, the Administrative Law
Judge concluded that such an order recognizes a duty
to bargain as of the date of the initial demand for
recognition. Inasmuch as this demand occurred in
September 1972, he found that Respondent had vio-
lated section 8(a)(5) by closing the Owensboro plant
in June 1973 and transferring part of its operation to
the Respondent's Lexington plant without bargaining
with the Union concerning the decision or its effects
upon employees.
In the recently issued Steel-Fab case,3 the Board
reconsidered the rationale underlying the issuance of
Gissel-type bargaining orders. The Board majority de-
cided to adopt the view of Gissel first expressed by
Chairman Miller in his concurring opinion in United
Packing, ° and consistently reiterated by him since,
including the prior Owensboro decision. According to
this view, a Gissel bargaining order is issued solely to
remedy 8(a)(1) and/or 8(a)(3) violations that have dis-
sipated a union's majority and prevented the holding
of a fair election. A finding of 8(a)(5) violation in this
type of situation is therefore unnecessary and undesir-
able. As argued by Respondent, such a remedial order
necessarily operates infuturo. As the Board's remedial
bargaining order in the prior case did not issue until
almost 2 months after Respondent's economically
motivated decision to close the Owensboro plant, no
bargaining obligation then existed which Respondent
Elm Hill Meats of Owensboro, Inc., 205 NLRB 285 (1973).
2N.L.R.B. v. Gissel Packing Co., Inc., 395 U.S. 575 ( 1969).
Steel-Fab, Inc., 212 NLRB No. 25 (1974) (Members Fanning and Jenkins,
each concurring in part and dissenting in part, in separate opinions).
United Packing Company of Iowa, Inc., 187 NLRB 878 , 890 (1971).
213 NLRB No. 100
ELM HILL MEATS OF OWENSBORO, INC. 875
was required to honor. There is no evidence of any
request to bargain about the closedown effects made
after the bargaining obligation accrued. Hence, we
find, contrary to the Administrative Law Judge, that
Respondent has not violated Section 8(a)(5) and (1) of
the Act by failing to bargain with the Union about the
decision to close the Owensboro plant or the effects
on the employees.
Our dissenting colleagues do not disagree with the
Administrative Law Judge's finding, which we have
adopted, that Respondent closed down the Owens-
boro plant for nondiscriminatory economic reasons.
Apparently, they do not adopt, and we agree with
them, the Administrative Law Judge's finding that
Respondent violated Section 8(a)(5) by its failure to
bargain with the Union over the decision to shut
down that facility. They would find, as did the Ad-
ministrative Law Judge, that Respondent refused to
bargain with the Union over the effects upon the em-
ployees of the shutdown and thereby violated Section
8(a)(5). As to the general legal proposition that an
employer is obligated to bargain with the statutory
representative of its employees concerning the effects
upon employees of an economically motivated deci-
sion to discontinue part of its operations, we agree
with the dissenting Members. Our disagreement with
the dissenters is therefore not over the legal proposi-
tion but as to whether the Union ever so acted as to
trigger the obligation of Respondent.
The dissenting Members say that the obligation was
created in the fall of 1972, when the Union made a
demand for recognition and bargaining and Respon-
dent rejected the demand, although this occurred ap-
proximately 9 months before Respondent announced
its decision to close the Owensboro plant. We say that
the potential obligation did not arise until the Board
affirmed the Administrative Law Judge's decision in
the earlier case that a bargaining order was warranted
in order to remedy Respondent's 8(a)(1) and (3) con-
duct.5 Although Respondent on June 21, 1973, an-
nounced to the employees its decision to cease
operations at Owensboro effective June 30, 1973, to-
gether with the reasons for the decision, and the
Union soon thereafter became aware of the an-
nouncement, the Union has never requested Respon-
dent to bargain over the effects of that decision, the
only remaining subject for legitimate bargaining be-
tween the two parties. In the absence of a union de-
mand for such bargaining, we do not believe that
Respondent can be found to have unlawfully refused
to bargain about the effects of the plant closing.'
In the absence of a finding that Respondent closed
5 Elm Hill Meats of Owensboro, Inc, 205 NLRB 285 (1973)
6 Cf. Murphy Diesel Company, 179 NLRB 149 (1969), Saul Harberg d/b/a
Ilfeld Hardware & Furniture Co, 157 NLRB 1401 (1966)
its Owensboro plant for discriminatory reasons, the
Board would be powerless, as the dissenters well
know, to do anything but require Respondent to bar-
gain in good faith about such peripheral matters as
terminal pay. The Board cannot require an employer
to reinstate an operation or reinstate employees dis-
missed as a result of a lawful decision to close a plant.
It is incorrect to assert that this decision leaves an
employer "free to engage in any sort of unilateral
conduct to defeat the Union prior to issuance of the
Board's decision, including the elimination of all of
the employees' jobs by transferring the work to anoth-
er plant." It is also incorrect to claim that as a result
of this decision an employer can escape his statutory
duty to bargain by acting "sufficiently vigorously,
however unlawfully, to eliminate the bargaining unit,
and to do so with sufficient dispatch to accomplish
this before the Board can decide the case."
This decision does not modify an employer' s legal
obligation in respect to a nondiscriminatory shut-
down of operations. It does not sanction unlawful
conduct to eliminate a bargaining unit. Our holding
is only that the obligation to bargain about effects on
the employees of the Owensboro plant closing arose
later rather than earlier, and that, in the absence of a
union demand therefor, Respondent was not obligat-
ed to initiate bargaining about effects.
Inasmuch as we have adopted the Administrative
Law Judge's findings that Respondent did not dis-
criminatorily shut down its Owensboro plant, and did
not unlawfully deny vacation pay to employees Joann
Hall and Shirley Sapp, and reversed his finding that
Respondent unlawfully refused to bargain with the
Union, we shall dismiss the complaint in its entirety.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor Rela-
tions Board hereby orders that the complaint herein
be, and it hereby is, dismissed in its entirety.
MEMBERS FANNING AND JENKINS, dissenting:
In 1972, the Union engaged in organizing employ-
ees at Respondent's Owensboro plant. By September
21, 1972, a majority of the employees at the plant had
authorized the Union to be their bargaining represen-
tative and on that date the Union demanded recogni-
tion from Respondent. Thereafter, Respondent
engaged in widespread unilateral misconduct, includ-
ing interrogations, threats of discharge, threats of
plant closing, surveillance and giving the impression
of surveillance, discharging four employees because
they supported the Union, and violating Section
8(a)(5) in refusing to recognize the Union. This mis-
conduct of Respondent was the subject of a complaint
876 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
issued on November 6, 1972, which led to a decision
we have heretofore issued finding the foregoing viola-
tions. Two weeks after the complaint had issued in the
earlier case, at a meeting of Respondent's directors on
November 20, 1972, it was decided to dissolve the
corporation which operated the Owensboro plant.
Subsequently, the operation of that plant was cur-
tailed and ultimately what was left of its business was
transferred to another plant of Respondent with resul-
tant adverse effects on the employee complement at
Owensboro, including the loss of jobs. This elimina-
tion of business at the Owensboro plant was accom-
plished unilaterally by Respondent without
bargaining about such effects with the Union which
represented the majority of its employees and which
had requested recognition from Respondent as the
bargaining agent. Two weeks before Respondent be-
gan this course of unilateral action in violation of the
Act, its refusal to recognize and bargain with the
Union had been the subject of a complaint which
alleged that Respondent had failed to bargain in vio-
lation of its statutory obligation, an allegation which
was subsequently sustained by the Board.
It is well established, and the majority does not
dispute,' that in these circumstances the Employer
was obligated to bargain with the Union over the
effects of its partial shutdown and the ultimate trans-
ferral of its remaining operations to another of its
plants. Bargaining over the disastrous impact of such
decisions upon the terms and conditions of employ-
ment of those who work in the plant goes to the heart
of the Act's policy in establishing collective bargain-
ing as a means of resolving disagreements about such
terms and conditions.
Despite this, the majority here, because it finds the
obligation to bargain exists only as of the time the
Board's decision is rendered, leaves unremedied these
flagrant and, from the employees' standpoint, catas-
trophic effects on their employment. This result, as
the foregoing simple recital of the facts demonstrates,
makes a mockery of the obligation to bargain estab-
lished by the Act. The Employer is left free to engage
in any sort of unilateral conduct to defeat the Union
7 Our colleagues state that the Union at no point "so acted as to trigger
the [bargaining] obligation of Respondent." On September 21, 1972, having
achieved a majority, the Union demanded bargaining , and on September 26,
1972, the Respondent refused . On April 17, 1973, the Administrative Law
Judge's Decision issued finding this refusal and other conduct of Respondent
to be a violation of Sec . 8(aX5). On June 21, 1973, Respondent, having
completed most of its unilateral course of conduct in closing the plant,
notified the remaining employees the plant would be closed 9 days later. Why
the Union then should have to make a new demand for bargaining over the
effects of the closing, after Respondent had been ordered to bargain, had
concealed the closing for 9 months after making the decision and taking
action to accomplish it, and then gave the employees only 9 days' notice, our
colleagues do not explain . We would have thought the existing law plain that
in such circumstances no such additional demand was necessary, and that
our remedy would hardly be limited in the way our colleagues describe.
prior to issuance of the Board's decision, including the
elimination of all of its employees' jobs by transfer-
ring the work to another plant. All that is necessary
to escape the statutory duty to bargain is for the Em-
ployer to be prepared to act sufficiently vigorously,
however unlawfully, to eliminate the bargaining unit,
and to do so with sufficient dispatch to accomplish
this before the Board can decide the case.
We do not think that Congress intended any such
result, and we do not read the statute as so tying our
hands with respect to remedying unlawful conduct. In
all other circumstances and cases, our remedies reach
misconduct prior to our decision, and we see no rea-
son either in the terms of the statute or in logic why
we can and should not do so with respect to breaches
of Section 8(a)(5).
In Steel-Fab, the majority refused to find that a
bargaining obligation can exist in Gissel-type 8 cases
until the moment the Board issues the remedial bar-
gaining order. But the statute requires that an employ-
er bargain, on demand, with the union which
represents the majority of his employees, as is the case
here. The only lawful reason an employer can have for
not doing so is to test the union's majority by a Board
election in a situation in which he commits no miscon-
duct. Linden Lumber Division, Summer & Co., 190
NLRB 718 (1971), reversed and remanded 487 F.2d
1099 (C.A.D.C., 1973), cert. granted 94 S. Ct. 1967
(1974). If the employer's misconduct defeats the elec-
tion route, then a bargaining order will be issued. But
all of this concerns only how the majority is to be
ascertained, rather than the existence of the bargain-
ing obligation. It is not the employer's misconduct
which creates the bargaining obligation, or, as our
colleagues phrased it in Steel-Fab, "on which the vio-
lation will rest." Rather, the Act creates the obligation
as of the time the union has a majority and demands
recognition, and this obligation is subject only to the
delay or defeasance as set out in Linden Lumber.
There is thus nothing either "nunc pro tunc" or "un-
fair" (again our colleagues' language in Steel-Fab)
about regarding the unlawfully acting employer's
obligation to exit from the time a majority union de-
mands recognition. It is only where the misconduct is
so egregious that it might require a remedial bargain-
ing order even without majority support of the union,
a possibility envisioned by the Supreme Court in Gis-
sel, that the misconduct can be said to create the
obligation or be the "operative facts on which the
violation will rest."
This case illustrates the weakness of the majority's
rationale in Steel-Fab and, for the reasons expressed
in our dissents there, we would remedy the violation
of Section 8(a)(5), as did the Administrative Law
Judge.
e N. L. R. B. v. Gisse! Packing Co., Inc., 395 U.S. 575.
ELM HILL MEATS OF OWENSBORO, INC. 877
DECISION
STATEMENT OF THE CASE
JOEL A. HARMATZ, Administrative Law Judge: This case
was tried before me in Owensboro, Kentucky, on November
19 and 20, 1973, upon a charge filed July 18, 1973, as
amended on September 17, 1973, and upon a complaint
which issued on September 28, 1973, alleging that Elm Hill
Meats of Owensboro, Inc., Elm Hill Meats, Inc., and Baltz
Brothers Packing Company,' constitute a single integrated
employer, and, as such, violated Section 8(a)(1), (3), and (5)
of the Act by, on or about June 27, 1973, ceasing business
activity at its Owensboro facility and transferring said oper-
ations to its Lexington, Kentucky, facility, thereby discharg-
ing and thereafter failing to reinstate its Owensboro
employees, and that said employer further violated 8(a)(1),
(3), and (5) of the Act by on June 27, 1973, refusing to pay
Joann Hall and Shirley Sapp accumulated vacation pay.z
Respondent duly filed an answer denying the commission
of any unfair labor practices, and asserting certain affirma-
tive defenses. After close of the heanng, briefs were filed by
the General Counsel and the Respondent.
Upon the entire record in this case, including my observa-
tion of the witnesses while testifying, and careful consider-
ation of the briefs, I make the following:
FINDINGS OF FACT
I JURISDICTION AND THE SINGLE EMPLOYER ISSUE
Baltz Brothers Packing Company, herein called Baltz
Packing, is a Tennessee corporation with a principal place
of business in Nashville , Tennessee , from which it engages
in the production, sale, and distribution of meat and related
products . Dunng the 12-month period preceding issuance
of the complaint , a representative period , Baltz Packing
purchased goods and materials valued in excess of $50,000
which were transported to its Nashville facility from States
other than the State of Tennessee.
The complaint alleges and I find that Baltz Packing is an
employer engaged in commerce within the meaning of Sec-
tion 2(6) and (7) of the Act.
As of November 1972, Elm Hill Meats of Owensboro,
Inc., herein called Owensboro Meats, was a Kentucky cor-
poration, with a principal place of business in Owensboro,
Kentucky, from which it was engaged in the production,
sale, and distribution of meat and related products. On
November 6, 1972, a complaint was issued , in Case 25-
CA-5201 , against Owensboro Meats by the Regional Direc-
tor for Region 25 , alleging that said firm had engaged in
violations of Section 8(a)(1), (3), and (5) of the Act.3 There-
after , and on November 20, 1972, at a meeting of the board
of directors of Owensboro Meats, it was decided to dissolve
that corporation . As a result that corporation 's liabilities
were assumed by Baltz Packing and its assets absorbed by
the latter.' Despite the liquidation of Owensboro Meats,
Baltz Packing continued to operate the Owensboro plant
until its closure on June 27, 1973. I find that the action of
said board of directors in November 1972 resulted in a
merger of Owensboro Meats with the balance of the Baltz
Packing operations, which rendered the latter as an employ-
er responsible for any unfair labor practice remedies im-
posed or thereafter arising from operation of the
Owensboro plant.
Elm Hill Meats, Inc., herein referred to as Elm Hill, is a
Kentucky corporation with a principal office and place of
business in Lexington, Kentucky, from which it is engaged
in the production, sale, and distribution of meats and relat-
ed products. Dunng the 12 months preceding issuance of
the complaint herein, a representative period, Elm Hill pur-
chased goods and materials of a value exceeding $50,000
which were delivered to its Lexington facility from States
other than the State of Kentucky.
The complaint alleges and I find that Elm Hill is an
Employer engaged in commerce within the meaning of Sec-
tion 2(6) and (7) of the Act.
The complaint alleges that Baltz Packing, Owensboro
Meats, and Elm Hill, at all times material, are and have
been affiliated businesses with common officers, ownership,
direction, and operations and constitute a single integrated
business enterprise. I find merit in this contention. Prior to
the dissolution of Owensboro, the record substantiates this
allegation as to common ownership, officers, and directors.
With respect to the element of control and common labor
relations ,5 it is clear from the testimony of Robert J. Baltz,
Jr., president of all three firms, that labor policies covering
the operations of the three corporations were initiated by
him and his four brothers, and were expected to be imple-
mented by the corporate managers, with the latter having no
authority to make major changes without consulting Baltz.
I am satisfied and find that at all times prior to November
1972, Robert J. Baltz, Jr., and his four brothers formulated
and administered the labor policies for all three corpora-
tions, and thereby affected the terms and conditions of
employment of employees of said corporations. According-
ly, I find that prior to November 1, 1972, Owensboro Meats,
Baltz Packing and Elm Hill constituted a single employer
within the meaning of the Act.
Following the November 20, 1972, dissolution of Owens-
boro Meats, both the newly merged Baltz Packing plant at
Owensboro, and the Elm Hill facility, were operated
through a single plant manager. Equipment, supervisory
personnel, raw materials, and finished products were inter-
changed between the two plants. The element of common
immediate management of these plants thereafter along
with the other factors referred to above, would seemingly
place beyond dispute, the status of Elm Hill and Baltz Pack-
ing as a single employer between that date and the cloge-
At all times matenal, Baltz Packing and Owensboro Meats had the same
president (Robert J Baltz, Jr) the same officers the same directors and
Collectively referred to as Respondent were subject to common ownership
At the heanng, the General Counsel agreed to amend this allegation of 5 Examples of the type of benefit plans in which employees of Baltz Pack-
the complaint by deleting the name of Rita Richards therefrom ing, Owensboro Meats, and Elm Hill commonly share are profit sharing,
3 See Elm Hill Meats of Owensboro, Inc, 205 NLRB 285 (1973) health insurance, Christmas packages, and vacation.
878
down in issue here. I so find.
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
q . THE LABOR ORGANIZATION INVOLVED
The complaint alleges, the answer admits, and I find that
District Union Local 227, Amalgamated Meat Cutters and
Butcher Workmen of North America, AFL-CIO, is, and, at
all times material, has been, a labor organization within the
meaning of Section 2(5) of the Act.
III. THE ALLEGED UNFAIR LABOR PRACTICES
A. The Issues
1. Whether Respondent closed its Owensboro plant on
June 27, 1973, in reprisal for employee organizational activi-
ty and to evade bargaining, thereby violating Section 8(a)(3)
and (1) of the Act?
2. Whether, by closing the Owensboro plant on June 27,
1973, without first notifying and consulting the Union, and
without bargaining as to the effects upon employees of that
decision, Respondent violated Section 8(a)(5) and (1) of the
Act?
3. Whether Respondent, upon closing the plant, refused
to pay accumulated vacation benefits to employees Joann
Hall and Shirley Sapp because of their activity on behalf of
the Union, thereby violating Section 8 (a)(3), (5), and (1) of
the Act?
B. Background
In the late spring of 1972, and again in September of that
year, the Union was engaged in an organization campaign
among employees at Respondent's Owensboro plant.' At
that time the Owensboro plant was operated through a sepa-
rate corporate subsidiary of Baltz Packing, and was engaged
in production of a variety of pork products. Its work force
numbered about 25 employees. By September 21, 1972, a
majority of said employees had authorized the Union as
their bargaining representative, and based thereon, the
Union, on that date made a demand for recognition. On
September 25,1972, the Union filed an RC petition with the
Board. In addition, the Union, on October 4, 1972, filed
unfair labor practice charges, asserting that management
had engaged in an unlawful course of conduct with respect
to the employee organizational effort at Owensboro. On
November 6, 1972, a complaint was issued by the National
Labor Relations Board Regional Office against Elm Hill
Meats of Owensboro, Inc., based upon said charges alleging
violations of Section 8(a)(1), (3), and (5) of the Act.
By notice dated November 7, 1972, the directors of Elm
Hill Meats of Owensboro, Inc., were notified that a meeting
of the board of directors would be conducted on November
29, 1972, "To consider and vote upon a plan of dissolution,
complete liquidation and determination of the existence of
the corporation based upon the unfavorable operations for
the past several years and the failure of management to
6 The Union had conducted a previously unsuccessful organizational ef-
fort at this plant which culminated in a Board election in the summer of 1969.
The Union at that time failed to receive a majority.
remedy this situation." The meeting was held as scheduled,
with the directors voting to dissolve Elm Hill Meats of
Owensboro, Inc. Thereafter, the Owensboro plant contin-
ued operations under the ownership and control and as a
division of Baltz Packing.
Subsequent to the dissolution, the operating scope of the
Owensboro plant was altered from a multiple product oper-
ation to a bacon slicing operation exclusively. This change
was effected as of February 1, 1973. Bacon producing
equipment was brought in from the Baltz Packing plant at
Nashville and the Elm Hill plant at Lexington. Under this
arrangement , Lexington would no longer produce bacon,
but would concentrate on other product lines, purchasing
finished bacon necessary to supply its customers from Ow-
ensboro. The change at Owensboro was accomplished with-
out discharge or layoffs, the resulting reduction in jobs
being accomplished through attrition.'
On April 17, 1973, Administrative Law Judge Henry L.
Jalette issued his decision in Case 25-CA-5201, finding that
Elm Hill Meats of Owensboro, Inc., violated Section 8(a)(1)
of the Act through coercive interrogation, threats of dis-
charge, threats of plant closing, surveillance , and creating
the impression thereof; and violated Section 8(a)(3) by dis-
charging four employees because they supported the Union.
The Administrative Law Judge further found that a bar-
gaining order would be necessary to remedy the effects of
the above unfair labor practices, and therefore found an
8(a)(5) violation, recommending that Respondent be or-
dered to recognize and bargain, on request, with the Union
as representative of the Owensboro employees.
Thereafter, on June 21, 1973, pursuant to a decision of
Robert J . Baltz, Jr., a notice to employees was posted at the
Owensboro plant, stating:
We regret that it is necessary to cease operations at this
plant effective our year end, June 30, 1973, for the
following reasons:
(1) The short supply of Green Bacon Bellies avail-
able in the market making it impossible to continue
operations.
(2) Meat Ceiling Prices established under Federal
Regulation dated March 28, 1973.
(3) In order to maintain our rating under U.S.D.A.
standards, we must spend a substantial sum to remo-
del plant.
(4) Inability to show a profit from overall operation
presently , as well as in the past.
Anybody who is eligible for a paid vacation will receive
same.
Pursuant to said notice, production operations ceased at
Owensboro on June 27, 1973. Employees Joann Hall and
Shirley Sapp, who during the closedown period were out of
work for medical reasons, appeared at the plant and sought
checks covering their vacation pay. Such benefits were de-
7 Ultimately the unit at Owensboro was reduced to about 15 employees as
of the date of closing.
ELM HILL MEATS OF OWENSBORO, INC.
nied by Douglas Baltz, the assistant plant manager at
Owensboro , assertedly because neither Hall nor Sapp met
vacation eligibility requirements.
Following the closedown at Owensboro , and on August
7, 1973, the Board issued its Decision and Order in Case
25-CA-5201,8 adopting the findings of Administrative Law
Judge Jalette.9
C. Concluding Findings
1. The closedown
a. The alleged discriminatory motive
I have heretofore found that Baltz Packing, Owensboro
Meats, and Elm Hill constituted a single integrated enter-
prise. Before considering the 8( a)(3) issues involved here,
some discussion of the interrelationship between Elm Hill's
Lexington plant and the Owensboro facility is necessary.
The Lexington plant at all times differed from that at
Owensboro in that Lexington was, and is, a "full line" pack-
ing house, which not only slaughters and processes meat but
also sells processed items through its own sales force. O-
wensboro was limited to meat processing. Lexington also
was a larger facility employing one-third more workers
than Owensboro. Prior to February 1, 1973, both were en-
gaged in producing a variety of meat products, including
bacon. Apparently, Lexington serviced Eastern Kentucky,
while Owensboro, concentrated on the Western Kentucky
markets. However, effective February 1, 1973, pursuant to
the decision to transform Owensboro into a bacon slicing
operation exclusively,10 all bacon production ceased at
Lexington. Bacon producing equipment was transferred
from Lexington to Owensboro, and thereafter Lexington
purchased all its required finished bacon products from
Owensboro. Lexington's purchases accounted for about 50
percent of the Owensboro plant's bacon output up to the
date of closing.
In the period February through June 1973, while Lexing-
ton depended on Owensboro for processed bacon, Owens-
boro received 25 percent of its supply of "green pork
bellies," the basic raw product from which bacon is denved,
from the slaughtering operations at Lexington.
After the bacon operation at Owensboro closed, equip-
ment for a bacon producing line was returned to Lexington
where bacon production was then resumed, though at a
reduced output. At all times when bacon was produced at
Lexington, the capacity for bacon production at that loca-
tion was but one-fourth of that handled by Owensboro.
From the foregoing, it is my opinion that the 8(a)(3) viola-
tion herein turns upon whether the Owensboro plant closing
was discriminatorily motivated, or based upon legitimate
economic consideration. The more stnngent standards set
forth by the Supreme Court in Darlington 'f 1 for cases involv-
11205 NLRB 285 (1973)
9 The Board found an additional 8(a)(1) violation based upon a threat to
reclassify jobs in a manner that would reduce hourly wage rates
10 There is no allegation that this change in operations at Owensboro was
unlawfully motivated, and in my opinion any question in that regard was not
the subject of conclusive litigation
879
ing a total or partial going out of business are inapposite
here. For in shutting down the Owensboro operation, Re-
spondent did not completely abandon the bacon producing
operation. It simply removed, albeit at reduced output lev-
els, that operation to another facility, which as I have here-
tofore found, was operated as part of a single integrated
enterprise with Owensboro.12 In accordance, with settled
authority, it is unlawful for an Employer to close down a
plant and move it elsewhere in order to deprive employees
of their right to be represented by and bargain through a
union. t3
On the question of motivation, the General Counsel con-
tends that the closedown at Owensboro was merely an ex-
tension of the unlawful pattern of conduct which was the
subject of the Board's decision in the earlier case . There can
be no question that the conduct involved there goes far in
suggesting a hostility to union organization, as well as a
disposition on the part of Respondent to avoid bargaining
with the Union at any cost. Indeed, among the violations
proven, there were several threats of plant closure, including
one implied from a speech made on October 16, 1972, by
none other than Robert J. Baltz, Jr. Also favoring the Gen-
eral Counsel's case is the timing of the closedown, which
followed, by some 10 weeks, the issuance of Judge Jalette's
decision , directing Baltz Packing's former corporate subsid-
iary, to bargain with the Union at Owensboro
This background suffices to establish prima facie that the
closedown was discriminatory. However, proof, both docu-
mentary and through testimony, adduced on behalf of Re-
spondent tends to remove much of the sting from the
background evidence on which the General Counsel places
such heavy reliance.
In defense of its decision to close down the Owensboro
facility, Respondent contends that the economic conse-
quences, which became manifest at the time of the close-
down, of the Presidential price freeze on meat products in
March 1973, considered against the history of losses at O-
wensboro and the need for substantial renovation of that
plant, rendered continued operation of the Owensboro
plant infeasible. It is argued that this and not union ani-
mus, was the reason for its action.
In this regard it is an established fact that the Owensboro
operation, throughout its 6-year history, was not profitable.
According to financial statements , made a part of this re-
cord, and which I have no cause to question, as of June 30,
1972, that facility had sustained accumulated losses of
$462,997.30. Between July 1 and November 20, 1972, when
the Owensboro separate corporation was dissolved and ab-
11 Textile Workers v Darlington Manufacturing Co, 380 U S. 263
12 Because I view this to be a closedown and removal case , rather than a
permanent closedown, were Ito find that the closedown was discriminatorily
motivated, it would be necessary to pass on the further question as to whether
the closedown was "motivated by a purpose to chill unionism in any of the
remaining plants" Cf Motor Repair, Inc, 168 NLRB 1082 However, wire
I to reach that issue such a finding would be warranted by (1) the history of
bacon production at Lexington and its restoration upon shutdown of Owens-
boro, (2) the transfer of the Owensboro bacon manager as the head of that
department in Lexington, (3) the pre-closedown common supervision of both
plants, (4) the Union's continued interest in organizing the Lexington facility,
and (5 ) Robert J Baltz' position that both plants were vulnerable to possible
closedown
13 See, e g , Helrose Bindery, Inc, 204 NLRB 499 (1973), Textile Workers
v Darlington Manufacturing Co, supra, 272-273
880 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
sorbed by Baltz Packing, the plant lost an additional
$110,000. Thereafter, between November 20, 1972, and the
closing on June 30, 1973, an additional $117,400 in losses
were sustained.
It is true, as the General Counsel, observes, that Respon-
dent, in the face of these losses, continued to operate at
Owensboro, that is, at least until shortly after issuance of
Administrative Law Judge Jalette's decision. However, the
suspicions generated thereby must be weighed against cer-
tain other problems confronting that plant in June 1973.
Thus, it is undisputed that the Owensboro plant was not
what could be described as a modern meat processing facili-
ty. Improvements were necessary in order to bring the plant
up to the health standards required by the United States
Department of Agriculture. Inspectors of that Agency were
persistent in their efforts to bring about certain renovations.
In response thereto, certain limited improvements were
made at Owensboro either in February or the early spring
of 1973. However, correspondence dated March 17 and
May 7 and May 17, 1973 from U.S.D.A. representatives to
Baltz Packing indicated that the Owensboro plant remained
in a state of noncompliance with Federal standards, that the
U.S.D.A. was dissatisfied with progress made at Owensboro
with respect to the promises of Baltz Packing to make cer-
tain improvements, and that a variety of critical deficiencies
existed in the plant that needed immediate correction. In-
deed, the letter dated May 7, 1973, over signature of Glen
E. Garwood, DVM, outlined a number of defects that had
been previously programmed for correction and "had
reached the critical point." This list, in my opinion, and in
the absence of counterevidence, supports the testimony of
Robert J. Baltz that these corrections would require sub-
stantial expenditure. By letter dated May 17, 1973, the U.S.
D.A. advised Baltz Packing, inter alia that "in the event you
elect to continue operations at the plant, it will be necessary
to submit a letter with programmed completion dates for the
items in Dr. Garwood's May 7 letter." It is apparent from
the foregoing, and I find, that shortly before the close down,
Respondent was subject to additional pressures to bring the
Owensboro plant into compliance with U.S.D.A. require-
ments.
Nonetheless, as of the end of May, Baltz Packing, despite
the history of losses and the recent U.S.D.A. correspon-
dence concerning required renovations, continued to oper-
ate out of Owensboro. However, according to the testimony
of Robert J. Baltz, it was decided on or about June 21, 1973,
to close the plant because of the unavailability of "green
pork bellies" for purchase and processing at that time. This
shortage of new pork bellies was a consequence of economic
steps taken within the meat industry to counter the failure
of the Presidential Cost of Living Council, on March 28,
1973, to lift the freeze on ceiling prices of meat products as
part of the Phase III Economic Stabilization program. In
reaction to the extended freeze on meat products, livestock
producers, apparently, regarding it as unprofitable to put
cattle and hogs to slaughter, withheld them from the market.
Their action had two results with respect to the wholesale
market in green pork bellies. First, the price of pork bellies
rose from $.47 a pound on March 28, 1973, to $.57 a pound
on June 19, 1973.14 During this period, Respondent's selling
price for packaged bacon was frozen at $.79. In considering
the prospects for profit-added to the actual cost of the
bellies, and the fixed costs of operation-shrinkage result-
ing from processing which amounted to about 38 percent
had to also be reckoned with.15
The other result of extension of the price freeze, which
had materialized on or about June 21, 1973, was the fact
that the cutback in hog slaughtering ultimately led to a
disappearance from the wholesale market, of "green hog
bellies." 16 Thus, according to the testimony of Roger Lin-
dle, about the third week of June 1973, brokers stopped
quoting hog bellies and they became unavailable for pur-
chase. Both Lindle and Robert J. Baltz, Jr., testified that,
Lindle telephoned Baltz, reporting the fact that he could not
purchase bellies for Owensboro. According to Baltz, this
"straw" broke the "camel's back."
The General Counsel, in arguing that Respondent's eco-
nomic justification should be rejected, appears to for the
most part to accept the hard facts which form the basis for
that defense, but urges that they, at best, would warrant "a
layoff and a cutback in operations at Owensboro." In sup-
port of his position, the General Counsel observes that (1)
Respondent failed to explain why the shortage of hog bellies
required a shift in bacon processing to Lexington from Ow-
ensboro, (2) that with respect to the losses at Owensboro,
the financial statements reveal that in April, May, and June
1973, losses at that location, as a percentage of sales were
down, and hence the financial condition of Owensboro
showed encouraging signs," (3) that the Lexington plant
was not a profitable operation either, and (4) that the record
does not disclose that the renovations required at Owens-
boro by the U.S.D.A., were any more pressing than in prior
years.
These observations do not diminish the import of the
matters relied on in defense. As to (4) above, I have hereto-
fore indicated, from documentary evidence, that only a
month prior to the close down decision, the position of the
U.S.D.A. had been expressed by its inspectors in mandatory
terms. 18 I can only assume, in the absence of countervailing
14 Ultimately prior to the lifting of the freeze, the price of green bellies rose
as high as $.91 per pound.
Is It is obvious that the higher the cost of raw bellies, the higher would be
the value of losses attributable to shrinkage.
16 I credit the testimony of Roger Lindle, plant manager of the Lexington
and Owensboro plant, as to the conditions resulting from the action of the
Cost of Living Council. Lindle impressed me with his candid answers and
his knowledge of economic workings within the meat industry. His account-
ing was entirely plausible , and for the most part based on facts, which, if
untrue , would be readily subject to contradiction through facts available to
the General Counsel. The General Counsel did not in any significant sense,
attempt to adduce such evidence. '
17 In this connection, the General Counsel seeks to attribute Owensboro's
poor profit position to a I-cent-per -pound premium on hog bellies purchased
from Lexington , and a 4-cent-per-pound premium paid to Lexington on
finished goods marketed through Lexington. There is no evidence to the
effect that these premiums were unreasonable or over and above what Ow-
ensboro would pay "f.o.b. destination" for bellies purchased from outside
sources, or what Owensboro would pay as commissions on its finished prod-
ucts marketed through independent factors. I can hardly assume on this
record that the above arrangement contributed to the poor profit picture at
Owensboro.
Is Earlier letters sent to Respondent in March and May 1973 , expressed
dissatisfaction with Baltz Packing's failure to cure past citations on a timely
basis.
ELM HILL MEATS OF OWENSBORO, INC.
evidence , that in late June of 1973, one of the pressing issues
facing Respondent was whether Owensboro's potential just-
ified the expenditures necessary to bring the plant into com-
pliance with U.S.D.A. standards.
As to (1) and (3), it is true, that the closedown at Owens-
boro was accompanied by a transfer of a bacon line to
Lexington and, in fact, the production of finished bacon
products resumed at that location. In the circumstances, I
see nothing suspicious about that move or Respondent's
continued operation of the Lexington plant. Lexington loss-
es, despite the greater size of that facility were significantly
less than those sustained at Owensboro. Furthermore, credi-
ble evidence establishes that, in 1972, considerable expendi-
tures were made to update the Lexington facility.
Additionally, Lexington was a more diversified operation,
with slaughterhouse facilities, affording it a degree of self-
reliance with respect to overall meat processing operations
and greater flexibility. Furthermore, at all times since Feb-
ruary 1, 1973, Owensboro derived 25 percent of its green
pork bellies from hogs slaughtered at Lexington; Lexington
never supplied hog bellies for processed bacon to any other
facility. The choice in June 1973 was whether the hog bellies
available through slaughter at Lexington would be pro-
cessed at Lexington or Owensboro. Lexington prior to Feb-
ruary 1, 1973, had engaged in bacon processing. Since
Lexington's established capacity for producing bacon was
25 percent of that of Owensboro, restoration of such opera-
tions to that location would consolidate the processing oper-
ation at the source of the only raw products available as of
late June 1973, and thereby dispense with the need for sus-
taining operating costs inherent in maintaining a separate
plant for producing bacon at the same level of output. In my
opinion, the trade off was such as to preclude any suspicion
as to management's action in this regard.
Finally with respect to (2) above, the General Counsel
states that certain Owensboro financial statements for the
period preceding the closedown suggested some encourag-
ing signs .19 I agree that the figures support such an interpre-
tation. But, I am not convinced that other circumstances
confronting Respondent on June 21, 1973, made those en-
couraging signs worthy of pursuit. First, continued opera-
tions would require considerable expenditure to place the
Owensboro plant in conformity with U.S.D.A. specifica-
tions. Second, as Lindle credibly testified, though it was
widely suspected that the unavailability of hog bellies was
a temporary condition which would ease with the lifting of
the price ceiling, it was also a commonly held fear that the
cost of raw bellies would increase to the point where retail
prices would encourage consumers to boycott bacon. These
fears were completely plausible and I cannot fairly con-
clude, that the prospects for a single product, marginal oper-
ation, intent on recovering losses were positive under these
191 would note, however, that according to the testimony of Arthur L
Kirmse, Controller of Baltz Packing, the statements (G.C. Exh. 9) on which
the General Counsel relies, were prepared by him , and that due to improper
recording procedures , purchases were omitted resulting in an understatement
of losses of $44 ,000 According to Kirmse the correct figures are contained
in a report compiled by independent certified accounts (Resp . Exh. 5 ). Since
the latter , however, was not available to Respondent at the time of close-
down, this discrepancy is not material to an assessment of the General
Counsel's contention under consideration here
881
conditions.
For the above reasons, I am not persuaded that the Gen-
eral Counsel's arguments detract materially from the eco-
nomic defense. Nonetheless, the issue of motivation is never
free from doubt where, as here, an employer has engaged in
serious prior unfair labor practices, including a threat of
plant closure. On the other hand, union animus, no matter
how severe, does not preclude full consideration of super-
vening events offered by an employer to show that a subse-
quent change in operations would have occurred even in the
absence of union activity. On balance, I find that this is
what Respondent has demonstrated here.
The Owensboro operation was always marginal. The fact
that Respondent did not opt to close it prior to the advent
of the Union, did not freeze that plant' s status under the
law, and require its continued operation in the face of the
new conditions that emerged on or about June 21, 1973.
Thus, considering the history of losses and the need for
renovation of the Owensboro plant, the aftermath of the
Presidential freeze on meat prices, which became evident at
that time, dimmed the economic outlook for bacon prod-
ucts to an extent affording an entirely reasonable basis for
the judgment of Respondent that Owensboro be closed,
with bacon producing operations restored at the site of
slaughterhouse activities where all needed raw materials had
their origin. To find, as the General Counsel suggests, that
Respondent should not have closed down at Owensboro,
but instead should have continued operations on a reduced
basis and continued to sustain fixed operating costs at that
location, is to substitute one's own judgment for, the reason-
ably based judgment of management, and to find a viola-
tion on the basis of speculation born of suspicion. Instead,
I find that Respondent has sustained its burden of showing
that the closedown and removal at Owensboro was not
related to union considerations, and, accordingly, I shall
recommend dismissal of the allegation that said action was
violative of Section 8(a)(3).20
b. The closedown as a refusal to bargain
The complaint also alleges that Respondent violated Sec-
tion 8(a)(5) and (1) of the Act by closing the plant "without
affording the Union notice of, or opportunity to bargain
about, such changes or the effect of such changes, and
thereby unilaterally changed wages, rates of pay, hour[s] of
employment, and other terms and conditions of employ-
ment of . . . employees." Respondent concedes in its brief
that ". . . at the time Robert J. Baltz determined to close
the plant, he did not notify the Union of his decision to close
the plant?' nor did he offer the Union the opportunity to
bargain . . . with respect to the impact of the Owensboro
closing on the employees." Nonetheless, Respondent urges
301 note that this case bears some "bare -boned" resemblance to the fact
pattern in Thompson Transport Co, 165 NLRB 746, where despite prior
unlawful threats of a closedown, and the fact that the shutdown occurred
only about a month after the union 's certification , the Board declined to find
that the closedown violated Sec. 8(a)(3), since the General Counsel 's case was
effectively answered by the economic defense
21 The only evidence as to when the Union acquired knowledge of the close
appears in the testimony of Charles Reinhart, the Union's international
representative , who states that he was advised thereof by a unit employee
sometime after July 4, 1973
882 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
dismissal of this allegation, contending that at the time of
the closedown, the Union had not been the beneficiary of
a Board certification or order obligating the Employer to
recognize and bargain with that labor organization," and,
in any event, under recent Board precedent and Court deci-
sions , Respondent under no circumstances was obligated to
bargain over the decision to close.
Respondent's claim that unilateral action is not pro-
scribed under Section 8(a)(5) unless preceded by a Board
order or certification rests on an interpretation of N.L.R.B.
v. Gissel Packing Co., 395 U.S. 575 (1969), apparently to the
effect that, since the bargaining order, sanctioned by that
decision is remedial , it is only operative en futuro and no
obligation to bargain inures prior to issuance of such a
remedy. Respondent fails ; however, to cite Board authority
tending to support such a view. Cases discovered through
independent research, however, implicitly indicate that
Board policy is to the contrary.23 Thus, apparently, it is the
present view of the Board, that a Gissel bargaining order
recognizes a duty to bargain as of the date of the initial
demand for recognition. Hence, an employer, who, at the
time refuses to bargain, and thereafter unilaterally alters
conditions of employment, is regarded as having done so at
his peril. For these reasons , under present Board authority,
I see no merit in this contention.
Respondent, citing General Motors Corp., 191 NLRB 951,
further argues that it had no duty to bargain as to the
decision to close the plant and remove a portion of its
equipment and production capacity to the Lexington facili-
ty. There, a Board majority held that a decision to sell a
facility, involved a significant investment or withdrawal of
capital, and was of a type which affected the scope and
ultimate direction of an enterprise to an extent rendering the
decision essentially financial and managerial in nature, and
not involving matters encompassed within "rates of pay,
wages , hours of employment and other conditions of em-
ployment." Under this reasoning, the Board majority held
that the decision to sell the operation was not subject to the
duty of prior notification and bargaining. Neither the
majority's decision in General Motors, nor ensuing prece-
dent makes clear whether the result in that case extends to
management decisions, other than outright sales, including
the type involved here. 24
However, exhaustive analysis of this area of the law
would not seem to be required here. The majority in General
Motors specifically states:
Although we do not believe the statute required bar-
gaining on the decision to sell, we fully agree with the
22 It will be recalled that while Judge Jalette's decision in Case 25-
CA-5201 issued prior to the closedown on April 17, 1973, the Board did not
adopt his recommended Order until August 7, 1973, 5 weeks after the close-
down.
23 See , e.g., Waters Distributing Co., 182 NLRB 967, 968, 973 (1970);
Gruber's Super Market, Inc., 201 NLRB 612 (1973); Tony's Sanitation Service,
Inc., 203 NLRB 832 (1973).
24 The Board in a subsequent decision declined to adopt a Trial Examiner's
interpretation of General Motors, to the effect that the Board thereby elimi-
nated any duty to bargain as to a variety of business decisions , including a
partial termination of operations, a decision to relocate, and altering the
status of employees to that of independent contractors. See Lowery Trucking
Co., 196 NLRB 479 (1972).
previous Board and court decisions requiring bargain-
ing as to the effects of the decision on the unit employ-
ees.25
Respondent concedes that the Union was never afforded an
opportunity to bargain as to such "effects." I find a viola-
tion of Section 8(a)(5) and (1) on that basis alone.
Having done so, since the Union was never notified of the
closedown by Respondent, I fail to see how a finding of a
refusal to bargain concerning the decision itself would add
materially to the remedy, and I therefore question whether
it is necessary to reach that issue in this case.
In any event, I regard General Motors as treating with a
significantly stronger manifestation of entreprenerial inter-
ests than is involved here. Thus, on the basis of this record,
it appears that at the time of the determination to close
down no plans had been made for disposition of the Owens-
boro plant and equipment. Indeed, it is a fair statement on
this record to say that, at present, all of the personal and real
property utilized at Owensboro remains entitled to and
physically within the Baltz enterprise. Furthermore upon
closedown of the plant, Baltz did not go out of the finished
bacon business, but simply removed that operation to an-
other facility where it would be continued (tfder the same
immediate supervision, although at a reduced level of out-
put. I fail to see how, in the light of this adjustment, Respon-
dent could be said to have altered "the scope and ultimate
direction" of the enterprise.26 Although some reinvestment
of capital would be necessary to render the Owensboro
plant in a state satisfactory to U.S.D.A. inspectors, that
factor, though contributing to the decision to close down,
was not, and had not been, the critical issue. As the General
Counsel observes, Respondent had the alternative of con-
tinuing to operate the Owensboro plant at reduced levels of
output, and although I do not question Respondent 's failure
to do so, from its own explanation of its actions, operating
costs and not matters of capital investment ultimately
proved decisive.27 In these circumstances, I regard General
Motors as distinguishable, and, accordingly, I find that Re-
spondent, by refusing to bargain over both the closedown
decision 28 and the effects thereof upon unit employees,
violated Section 8(a)(5) and (1) of the Act.
2. The denial of vacation pay
The complaint alleges that Respondent violated Section
8(a)(3), (5), and (1) of the Act by denying accumulated
vacation pay to Joann Hall and Shirley Sapp in reprisal for
their activity on behalf of the Union. It will be recalled, that
as part of its announcement to employees of the closedown
Respondent indicated that vacation pay would be made
available to all employees who had established eligibility for
such benefits. Neither Hall nor Sapp, during the period
immediately preceding the closedown were in working sta-
tus; both were out of work for medical reasons. When they
25 General Motors Corp., supra, 952.
26 Cf. General Motors Corp., supra, 952.
27 See Garment Workers (McLoughlin Manufacturing Corporation) v.
N.L.R.B., 463 F.2d 907, 916 (C.A.D.C., June 8, 1972).
28 See e.g. Southeastern Envelope Co., Inc., 206 NLRB 933 (1973); Arnold
Graphic Industries, Inc., 206 NLRB 327 (1973); Helrose Bindery, Inc., 2t4u
NLRB 499 (1973).
ELM HILL MEATS OF OWENSBORO, INC
appeared at the plant to collect their pay, they were denied
vacation pay.
Both Hall and Sapp were known to be supporters of the
Union 29 And, if it were established that they had met eligi-
bility standards for a vacation, Respondent's animus to-
wards the Union, would be sufficient to support an
inference of unlawful conduct in this regard. However, I am
not satisfied that the General Counsel has sustained his
burden of proving that either Sapp or Hall had established
eligibility for such benefits prior to the closedown.
The vacation policy at Owensboro was basically the same
at all Baltz plants, including Owensboro, and pursuant
thereto, employees became eligible for a vacation after I
year of employment. This test is similar to what in industri-
al parlance is commonly referred to as a continuous-service
requirement. Robert J. Baltz credibly testified that service
could be broken by certain types of absences but not by
others. The General Counsel failed to elicit evidence which
clearly isolated those absences from work which would be
credited towards continuous service and those which
would establish a break in service. Accordingly, I can only
assume , for1fi rposes of this case, that a test of reason-
ableness both as to duration and cause of the absence was
regarding as controlling under Respondent's policy.
Douglas Baltz, assistant plant manager, made the deci-
sion as to which employees were eligible for vacation pay.
He testified , inter alia, that Sapp and Hall did not have 1
year of employment prior to their claims for vacation pay,
and hence failed to qualify. It is true that both had prior
periods of employment going back well beyond a year prior
to the closing, but this was not counted towards their vaca-
tion eligibility. In my opinion, the propriety of
Respondent's failure to do so is determinative of the instant
allegation.
The General Counsel, in arguing that the failure to credit
Sapp and Hall with prior service was based on discriminat-
ing considerations, points to the case of Ruth Hester, a
nonunion employee, whose eligibility was not prejudiced by
a period during which she was in layoff status, and who, in
consequence , was given vacation pay. Thus, Ruth Hester
was initially hired on June 21, 1971, and was laid off on
April 7, 1972. She was recalled on March 26, 1973. I am not
satisfied that there is a sufficient parallel between Hester's
absence and the reasons behind those of the alleged discrim-
inatees to establish a departure, in the case of the latter,
from uniformly applied and perfectly proper vacation poli-
cy.
Shirley Sapp was initially hired at Owensboro in the early
summer of 1971. She testified that in January 1972 she took
a sick leave after a discussion with Dick Marker, who at that
time was plant manager at Owensboro. Sapp, up to that
time had been missing a lot of time, and she informed
Marker that it would be best if she took a sick leave. Ac-
cording to Sapp, Marker agreed, stating: "Whenever you
get ready to come back and you are able to work, we will
be glad to hire you and you know you have a job, come on
back and you can come back the same as you were before."
`9 Both had testified as to their signing of union authorization cards in Case
25-CA-5201. Sapp was found to have been the object of an unlawful dis-
charge in that case
883
Sapp did not return to work until July 25, 1972. Sapp con-
cedes that Douglas Baltz in denying her a vacation check
told her that she lacked a week or two of "being there a
year." Critical to the claim made on behalf of Sapp is that
the absence between January and July 25, 1972 not be con-
sidered as establishing a break in her employment. Her own
testimony indicates the reasonableness of Respondent's
doing so. Accepting her version of the earlier conversation
with Marker, I cannot find that Marker gave her the type
leave that would not avoid a break in employment. The
period for which she would be off was indefinite, at her
convenience, and Marker specifically used the word "hire"
in describing the circumstances under which she would re-
turn. To construe this conversation as resulting in the grant
of a leave that would continue to count towards vacation
eligibility, would not only disregard the words exchanged,
but would attribute to management the somewhat implausi-
ble action of allowing an employee to take off indefinitely
with the understanding that on each annual anniversary
from her date of hire, she, though not working, would be
entitled to vacation pay. I find that the record amply estab-
lishes that Sapp was not employed for a year prior to her
claim for vacation pay, and for that reason I conclude that
the record does not substantiate the allegation that she was
denied "accumulated" vacation pay. Accordingly, I shall
recommend dismissal of the 8(a)(3) allegation based there-
on.
Joann Hall was initially hired on September 7, 1971. Dur-
ing the year preceding her vacation pay claim, she actually
worked a total of 2-1/2 months. Thus, on June 9, 1972, she
took maternity leave after a discussion with Paul Penman
who was then plant manager. At that time Hall informed the
Company that she only wanted to be off until the baby was
born. The baby was born on November 16, 1972. Hall,
however, did not contact the Company for rehire until Janu-
ary 1, 1973. At that time, no job was available, and hence
Hall did not return to work until March 26, 1973. Here
again, critical to the allegation that Hall had earned her
vacation pay, is a finding that the entirety of her absence
between June 9, 1972, and March 26, 1973, be regarded as
an unbroken period of employment for vacation purposes.
The record is barren of evidence as to Respondent's practice
with respect to whether or not maternity leave is counted for
vacation purposes. However, aside from this matter, it is
apparent from Hall's testimony that she extended the dura-
tion of her absence by about 8 weeks beyond the period
covered by her requested leave. This absence was at Hall's
personal option, and whatever Respondent's practice with
respect to pregnancy leave, I cannot in fairness find that
Respondent acted unreasonably in regarding Hall's service
as having been broken prior to her return to work in March
of 1973.0 But aside from my independent analysis of her
status , it is also significant that in Case 25-CA-5201, Ad-
10 Douglas Baltz also testified that sick leave taken by Hall in June 1973
was not in accordance with company procedures, and hence resulted in a quit
which also constituted a break in her service Hall and fellow employee
Katherine Creekmur gave testimony bearing upon this matter Although I
am inclined to agree with the General Counsel, upon consideration of all the
circumstances, that Douglas Baltz' interpretation of Hall's actions in this
regard was without reasonable basis, I fail to see how this is matenal to the
result in view of my finding that her earlier absence constituted a break in
service precluding her eligibility for vacation pay
884 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
ininistrative Law Judge Jalette sustained an objection to the
authorization card signed by Hall. In his decision, reported
at 205 NLRB 285 (1973), JD, fn 8, he, with Board
approval, refused to include her in the unit on the ground
that the evidence that she left on maternity leave, was insuf-
ficient to establish that she was an employee on the date the
Union demanded recognition in September 1972. The Gen-
eral Counsel makes no reference to this previous finding. In
my opinion, the evidence bearing on the employment status
of Hall between June 1972 and March 1973, in the instant
record, is not materially different from that adduced in the
earlier case. Accordingly, I find that the General Counsel
has not established that Hall was entitled to vacation pay
for the period prior to the closedown, and accordingly, I
shall recommend dismissal of the 8(a)(3) allegation based
thereon.31
Upon the basis of the foregoing findings of fact and upon
the entire record in this case, I make the following:
CONCLUSIONS OF LAW
1. Respondent is #n employer engaged in commerce
within the meaning of, Section 2(6) and (7) of the Act.
2. The Union is a labor organization within the meaning
of Section 2(5) of the Act.
3. The Union is the exclusive bargaining representative
of all production and maintainence employees, including
truckdnvers employed by Respondent at its Owensboro,
Kentucky, facility, excluding all salesmen, office clerical
employees, professional employees, guards and supervisors
as defined in the Act, which constitutes an appropriate bar-
gaining unit within the meaning of Section 9(b) of the Act.
4. Respondent did not violate Section 8(a)(3) and (1) of
the Act by closing down its Owensboro, Kentucky, plant
and removing a portion of that operation to its Lexington,
Kentucky, plant, or by denying vacation pay to Joann Hall
and Shirley Sapp.
5. Respondent violated Section 8(a)(5) and (1) of the Act
by closing its Owensboro plant, discharging its employees
at that location, and removing a part of that operation to
its Lexington, Kentucky, plant without notifying the Union,
or providing the Union an opportunity to bargain with re-
spect to that decision or its effects upon employees in the
appropriate bargaining unit.
6. The aforesaid unfair labor practices are unfair labor
practices affecting commerce within the meaning of Section
2(6) and (7) of the Act.
THE REMEDY
Having found that the Respondent engaged in unfair
labor practices, it will be recommended that it be required
to cease and desist therefrom and take certain affirmative
action found necessary to effectuate the policies of the Act.
I do not deem it appropriate, in the circumstances of this
case-particularly the economic reasons for the suspension
31 No change in practice having been shown, the 8(a)(5) allegation as to
Sapp and Hall is unsubstantiated
of operations at Owensboro-to recommend a remedy re-
quiring Respondent to restore its operations at that loca-
tion. In my opinion, such a remedy would impose a
hardship on the Respondent which would outweigh the na-
ture of the violation established here. Nonetheless by virtue
of Respondent's failure to notify the Union of the close-
down, employees were denied the services of their represen-
tative until after their collective strength was reduced to a
nullity.32 Clearly a restoration remedy would restore the
status quo under circumstances which would permit full
redress of the injury to the employees resulting from
Respondent's unfair labor practice. Despite the unavailabil-
ity of such a remedy, the Board has fashioned lesser mea-
sures designed to assure that bargaining, foreclosed by the
employer's conduct, shall take place, under conditions
which offset, to an extent, the loss sustained by employees
through the employer's effective denial of the services of
their bargaining representative. Considering, the remedial
practice of the Board in similar situations, I shall recom-
mend that the Owensboro employees be placed on a prefer-
ential hiring list and that they be offered employment at
Owensboro should Respondent elect to resume operations
at that facility. 3 In that event, I shall also direct Respondent
to recognize and bargain, upon request, with the Union as
representative of employees at that location
Whether or not Respondent elects to resume its Owens-
boro operations, I shall direct Respondent to bargain with
the Union with respect to its decision to close or the re-
opening of the Owensboro plant and with respect to the
effects of that decision upon employees in the appropriate
unit. I shall further recommend that Respondent make
whole all employees who were terminated by virtue of its
closedown at Owensboro, by payment to said employees of
earnings they would receive at their normal rates of pay in
effect on June 27, 1973, from a date 5 days following is-
suance of this decision, with 6-percent interest as provided
in Isis Plumbing & Heating Co., 138 NLRB 716 (1963), until
the occurrence of the earliest of any of the following condi-
tions: (1) the date Respondent bargains to agreement with
the Union both as to the decision to close or the reopening
of the Owensboro plant and the effects of the closing of that
facility upon unit employees; (2) a bona fide impasse in
such bargaining; (3) the failure of the Union to request
bargaining within 5 days after issuance of this decision, or
to agree to commence negotiations within 5 days of
Respondent's notice of its desire to bargain with the Union;
and (4) the subsequent failure of the Union to bargain in
good faith. Furthermore, in no event shall the amount of
backpay due the employees be less than the amount the
employees would have earned as wages during a 2-week
period of employment, nor shall the sum paid to any em-
ployee exceed the amount he would have earned as wages
from June 27, 1973, to the date he secured substantially
equivalent employment elsewhere. See All State Factor, Se-
cured Party in Possession of North Park Meat Company, 205
NLRB 1122 (1973); Royal , lating and Polishing Co., Inc.,
supra; Transmanne Navigation, 170 NLRB 389.
[Recommended Order omitted from publication
32 See Royal Plating and Polishing, 160 NLRB 990, 997-998
33 Thompson Transport Company, inc, 184 NLRB 38 (1970)