Flav-O-Rich, Inc.Download PDFNational Labor Relations Board - Board DecisionsAug 19, 1974212 N.L.R.B. 930 (N.L.R.B. 1974) Copy Citation 930 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Flav-O-Rich, Inc. and Chauffeurs , Teamsters and from the recommended Order. Helpers Local Union No. 175, affiliated with the International Brotherhood of Teamsters, Chauf- feurs, Warehousemen and Helpers of America. Case 9-CA-8146 August 19, 1974 DECISION AND ORDER By MEMBERS FANNING, JENKINS, AND PENELLO On April 24, 1974, Administrative Law Judge Thomas A. Ricci issued the attached Decision in this proceeding. Thereafter, the Respondent filed excep- tions and a supporting brief. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the Na- tional Labor Relations Board has delegated its au- thority in this proceeding to a three-member panel. The Board has considered the record and the at- tached Decision in light of the exceptions and brief and has decided to affirm the rulings, findings, and conclusions of the Administrative Law Judge, as modified herein, and to adopt his recommended Or- der as modified herein. The complaint alleges, inter alia, that Respondent unilaterally changed the terms of employment provid- ed for in an existing collective-bargaining agreement between the Union and Respondent's predecessor. The Administrative Law Judge found that the record indicates that Respondent asked the old employees to stay on with no changes in their pay or other benefits. Despite this finding, as part of his "Remedy" section, the Administrative Law Judge stated: It may nevertheless be that changes in conditions were made, and that they may have been adverse to the interests of the employees. The remedial order will therefore provide that the question be looked into at the compliance stage, and in the event the Respondent did in fact reduce any of the economic benefits of the employees, it now reimburse them and restore the status quo ante. This is not a matter of ordering the Respondent to abide by the contract which its predecessor had with the Union, but rather to undo the effect, if any, of unilateral changed [sic] in conditions of employment it made when it was under a statuto- ry duty to bargain with the Union.' In our view, the effect of this provision is to provide a remedy for a violation which was alleged but not proved. Accordingly, we shall delete this provision ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Rela- tions Board adopts as its Order the recommended Order of the Administrative Law Judge, as modified below, and hereby orders that Respondent, Flav-O- Rich, Inc., Bluefield, West Virginia, its officers, agents, successors, and assigns, shall take the action set forth in the said recommended Order, as modified below: Delete paragraph 2(b) of the recommended Order of the Administrative Law Judge and reletter the fol- lowing paragraphs accordingly. 1 Administrative Law Judge's Decision at sec IV DECISION STATEMENT OF THE CASE THOMAS A. Ricci, Administrative Law Judge- A hearing in this proceeding was held on March 7, 1974, at Bluefield, West Virginia, on complaint of the General Counsel against Flav-O-Rich, Inc., herein called the Respondent. The charge was filed on November 16, 1973, by Chauffeurs, Teamsters and Helpers Local Union No. 175, affiliated with the International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, herein called Teamsters 175, or the Union. The complaint issued on Janu- ary 24, 1974. The issue of the case is whether the Respon- dent, in refusing to bargain upon request with Teamsters Local 175, violated Section 8(a)(5) of the statute. Briefs were filed by the General Counsel and the Respondent. Upon the entire record, and from my observation of the witnesses, I make the following: FINDINGS OF FACT 1 THE BUSINESS OF THE RESPONDENT Flav-O-Rich, a Kentucky corporation, is engaged in the processing and distribution of dairy products throughout several States, including West Virginia, and during the past 12 months, a representative period, in the course of its busi- ness it derived income in excess of $50,000 from the sale of dairy products to customers outside the State of West Vir- ginia. I find that the Respondent is engaged in commerce within the meaning of the Act. II THE LABOR ORGANIZATION INVOLVED I find that Chauffeurs, Teamsters and Helpers Local Union No. 175, affiliated with the International Brother- hood of Teamsters, Chauffeurs, Warehousemen and Help- ers of America, is a labor organization within the meaning 212 NLRB No. 144 FLAV-O-RICH , INC. 931 of Section 2(5) of the Act. III THE UNFAIR LABOR PRACTICES Flav-O-Rich has for sometime operated in many States, and still does. Its business consists entirely of processing and distributing milk and related dairy products. It purchas- es milk in great quantities from members of Dairyman's Inc., a very large cooperative, brings it into its processing plants, trucks the then processed milk, cheese, etc., to a much larger number of distribution points-these are re- frigeration units and delivery truck loading places-and from there sells it to various wholesale customers, its route salesmen operating regular rounds out of the distribution locations. The Leatherwood Company, a smaller enterprise, for a number of years has engaged in exactly the same kind of business-processing and distributing milk and dairy products. It had only one processing plant, in Bluefield, West Virginia, and seven distribution points, one adjacent to the processing plant and the other six in different towns in Virginia and Tennessee. Leatherwood bought 95 percent of its milk from members of Dairyman's Inc., as does Flav- O-Rich, and the remaining 5 percent it produced itself on a farm which it owned and operated in its own name. At the end of October 1973, Leatherwood sold its entire processing and distribution business to Flav-O-Rich, and on Novem- ber 1 the second company took over. Teamsters Local 175, the Charging Party here, was the collective-bargaining agent for most of Leatherwood's em- ployees; it was certified by the Board on May 28, 1971, and its last contract with Leatherwood by its terms extended to November 30, 1973, with provision for automatic annual renewal thereafter absent written notice of a contrary inten- tion by either party. The employee unit covered by the contract included all of Leatherwood's nonsupervisory em- ployees except (1) those who worked on its farm-apparent- ly agricultural workers-and (2) the employees at only one of its distribution points-the one in Williamson, West Vir- ginia.' The Williamson employees were represented under contract with another union-identified on the record only as District 50, or the Steelworkers. During October Teamsters Local 175, advised by Leath- erwood of the planned sale, and desirous of discussing a new contract to follow that due to expire at the end of November, wrote to Flav-0-Rich, informing it of Local 175's representative status and asking that it bargain with the Union. On October 29, 1973, Flav-O-Rich's lawyers responded by saying that while their client contemplated making the purchase it did not intend to and would not i The bargaining unit as set out in the Board's certification, and as then represented by Teamsters Local 175 vis-a-vis Leatherwood, is as follows. All employees of the employer at its Bluefield, West Virginia, Beckley, West Virginia, Kimball, West Virginia, Christiansburg, Virginia, Nar- rows, Virginia, and Bristol, Tennessee, locations, including all produc- tion and maintenance employees, trailer drivers, retail and wholesale route drivers, route driver helpers, mechanics, cooling room and ship- ping and receiving employees, but excluding all office clerical employ- ees, all employees at the Williamson, West Virginia location, guards and supervisors as defined in the Act. recognize Local 175 or bargain with it. The complaint calls Flav-O-Rich the successor to Leath- erwood within the meaning of the Board's decisional prece- dents, and therefore alleges that the Respondent's refusal to recognize Teamsters Local 175 constituted a violation of Section 8(a)(5) of the Act. The defense is simply that the Respondent is not a successor to Leatherwood and that therefore none of the Board's past rulings apply to it. Successorship Like all cases of this kind the answer to whether a named respondent is or is not a successor employer, and for that reason obligated to bargain with the. established collective- bargaining agent, is one of fact and is determined by the pertinent objective factors. There is no substantial question at all on this record as to what the underlying facts are. (1) Flav-O-Rich bought Leatherwood' s business, lock, stock, and barrel. There were seven locations altogether; where Leatherwood owned the reality, Flav-O-Rich took title ; where there was a lease on the property, the purchaser assumed the lease-either a monthly one or an annual one. It bought all the equipment-processing machinery in Blue- field, cold storage facilities in the distribution depots, trucks and trailers, and whatever else the seller was using in its operations. (2) Leatherwood was buying 95 percent of its raw milk from members of Dairyman's Inc.; Flav-O-Rich started right away and continued to buy all it from the same source. (3) All of Leatherwood's customers forthwith became Flav-O-Rich's customers. (4) I find on the total record that every one of the 56 rank-and-file employees working for Leatherwood on Octo- ber 31, 1973 (this number excludes the farm employees and those at the Williamson distribution plant who were,repre- sented by another union) were immediately hired by Flav- O-Rich and started working for it on November 1. Charles Walker, president of Leatherwood, worked as advisor to Flav, O-Rich during the month of November 1973. Asked as a witness whether it was exactly the same complement of employees that moved immediately with the business, he answered: "approximately all of them." Eric Morgan, vice president of Dairyman's Inc., owner' of Flav-O-Rich, was asked "were there any changes made in the composition of the labor force," and said "There were very few changes made." On or about October 25, officers of the Respondent invited the bulk of these employees, perhaps 40, to a dinner party with their wives to request all of them to continue their work as before but with Flav-O-Rich. A separate meeting with about 15 employees at Bristol was held for the same purpose at about the same time. Morgan said "most, if not all, to the best of my knowledge, signed up to work for Flav-O-Rich." Morgan also agreed "the work force that was employed at those locations are essentially the same," and at a later point in his testimony he said: "The employees that were hired by Flav-O-Rich were essentially those em- ployed by Leatherwood." The parties stipulated that on November 1, 1973, there were 56 nonsupervisory, employees at work for Flav-O-Rich at these locations, and that the same full complement of 56 was still there on November 23. 932 DECISIONS OF NATIONAL LABOR RELATIONS BOARD (5) The work duties of all these employees did not change with the new company.' The processing plant employees continued to work as before, the checkers and loaders in the depots kept checking things and helping the route drivers as a whole, the driver salesmen or route salesmen kept right on making their rounds everyday, along the familiar estab- lished routes, and selling to the same old customers. Indeed, the new company made every effort not to rock the boat, by continuing Leatherwood's name on the trucks and on the containers for its products for quite some time. It did not want to "upset" its wholesale customers or the housewives who buy the milk and cream at retail. With time Flav-O- Rich started to put its own name on the cartons and to edge Leatherwood's name away, one day intending to remove it altogether. I find that the Respondent is the successor to the Leather- wood Company's processing and distribution business and as such was obligated to bargain with Teamsters Local 175 with respect to those employees who were represented by that Union when the transfer of business took place. "The critical question is . . whether Respondent continued es- sentially the same operation, with substantially the same employee unit whose duly certified bargaining representa- tive was entitled to statutory recognition at the time Re- spondent took over." Maintenance, Incorporated, 148 NLRB 1299 (1964). The facts of this case fit squarely into this test, reaffirmed again and again in later Board decisions. Flav- O-Rich not only hired "substantially" the old existing com- plement of workers, but it continued all of them on its own payroll. It changed not an iota of the old business, and in fact took pains lest there even appear the least semblance of change. The employees continued their regular work ex- actly as they had always performed it. In fact, nothing changed at all so far as their conditions of employment were concerned. It is successor of "employment" that matters, and not successor of employers. N.L.R.B. v. F G. McFar- land and S. R HuUrnger d/b/a McFarland & Hullinger, 306 F.2d 219 (C.A. 10, 1962). In the attempt to avoid this successorship finding the Respondent relies upon the testimony of Morgan, its vice president, who spoke of internal changes that were made in his company's managerial hierachy in consequence of the purchase of Leatherwood's business. Because Flav-O-Rich had a number of large established processing plants, it soon started to send milk to the newly acquired distribution points from them, rather than from the old Leatherwood processing plant in Bluefield, West Virginia. With this, high management control over the new distribution points was shifted away from Leatherwood's old central office-from which, of course, there could no longer be any supervision anyway-and placed under the jurisdiction of this or that divisional manager of the larger company. And starting the day after November 23, but no earlier, Flav-O-Rich discon- tinued the processing operation at Bluefield altogether, abolishing 12 jobs. The greater portion of the operation 2 "The objectives of national labor policy, reflected in established princi- ples of federal law, require that the rightful prerogative of owners indepen- dently to rearrange their businesses and even eliminate themselves as employers be balanced by some protection to the employees from a sudden change in the employment relationship " John Wiley and Sons v. David Liv- ingston, 376 U.S 543 (1964) there-the distribution function with the largest group of route salesmen that Leatherwood had passed on to the pur- chaser-remained as it was, the Respondent buying the property which Leatherwood had leased and even adding to it. The 12 plant employees were all offered other jobs, 2 accepted jobs inside Teamsters Local 175's old unit, 2 went to other Flav-0-Rich installations and 8 left the Company. The only other change that was made in the method of operating Leatherwood's old business is that shortly before the hearing in this case, 4 months after the takeover, the Christiansburg distribution depot-where only three or four employees worked-was closed, and its work, together with these employees, was moved into the Narrows depot, not far away. Morgan detailed how Flav-O-Rich operates internally in a number of other respects, presumably in support of a defense contention that the bargaining unit which his Com- pany bought no longer exists, or ceased being feasible for bargaining purposes in consequence of the purchase. None of the things he spoke about bears any relationship to the work of the employees involved, and, most important, none affects their conditions of employment either directly or indirectly. Apparently Leatherwood's central office used to be in Bluefield, and necessary supplies and equipment were purchased from there, decisions as to pricing were made there, the accounts of the business were maintained at that location, and bills were paid out of that office. Morgan said all this is now being decided and done at Flav-0-Rich's central office in Columbus, Georgia, and some of it at its divisional suboffices. He added: " . . . we are on our way of putting it in all, complete centralized route accounting on computers." 3 As to the lower echelon of supervision, the immediate supervisors who had come with the Leatherwood business and who remained at the same locations doing the same work, Morgan said: "I would describe it as essentially the same." What counts in these cases is the work the employees do. As to this Morgan's relevant testimony is this: Q: Were there any changes in task assignment at the various locations set up mentioned previously? A. There may have been minor ones. It could have been there were changes in route structure , but they would be very minor in nature . We would say essential- ly they were performing the same task. Q: Drivers, salesmen? A. And supervisors . They were performing essen- tially the same tasks. This language, coupled with the fact the Respondent im- mediately hired the full complement of employees used by its predecessor, places the case precisely within the phrase 3 A good summary of Morgan's total burden in his testimony appears in his following statement as a witness So the top management decisions that heretofore had been made here at Bluefield under the ownership of the old Leatherwood organization primarily by Mr Walker and in our instance is divided into three ex- isting divisions , with the top management decision in each of these divisions resting in the division manager of that position which he is, in my opinion, very basic change in managements. FLAV-O-RICH , INC. 933 "continuity of the employing industry" used in case after case. I conclude that by refusing to bargain with Teamsters Local 175 on November 1, 1973, the Respondent violated Section 8(a)(5) of the Act.' There is a final clear contention emerging from the totality of Morgan's testimony, and it is that big business cannot be profitable, or sufficiently prof- itable, if management must deal with unions. At some points he seemed to be saying also that this Company is too large to deal with any union on the basis of only a portion of its operations. This would be an unpersuasive argument if only because Morgan also said District 50, or the "Steelworkers," represents employees at one of its pro- cessing plants , plus the Williamson distribution point pur- chased from Leatherwood. In any event, it is too late a day in history to attempt to defeat a refusal-to-bargain com- plaint under this statute on the ground that collective bar- gaining trenches upon the proper interest of management in making money. Flav-O-Rich's plan to close down entirely the Bluefield processing plant, with its 12 in-plant employees, came to the attention of Local 175 on November 16. The Union there- fore wrote to the Respondent and demanded it bargain with the Union not only with respect to contract renewal, but also with respect to any questions that were pertinent to the planned discontinuance of the Bluefield processing plant. It wanted to discuss questions of possible layoffs of the em- ployees who might be affected. And again, by letter dated November 19, the Respondent refused to extend any recog- nition or to meet with the Union at all. This was another clear violation of Section 8(a)(5) of the Act, and I so find. The Respondent's statutory duty to recognize Local 175 was clear, for indeed by that date nothing had changed at all, and the full 56-man complement of old was still in its direct employment. IV THE REMEDY The cardinal element in the remedial order now required is that the Respondent cease refusing to recognize and to bargain with the Union and that it now in good faith meet 4 N L R.B. v. The William J Burns International Detective Agency , 406 U.S 272 (1972); Tom-A-Hawk Transit, Inc v. N.L R.B, 419 F . 2d 1025, (C.A. 7, 1969) In its brief the Respondent argues for dismissal of the complaint on two additional grounds It simply states that the record proves that the employes were initially hired on an economic basis totally different from the conditions of employment they had enjoyed with Leatherwood . and that there was reasonable grounds for the new Company to doubt the Union's majority status on November 1. The first assertion is in no sense supported by the evidence All Morgan , the new vice president, did on October 25, as he testified, was "encouraged them to become employees of Flav-O-Rich." "welcome to the family ," "we needed good people ." He said nothing about changing their conditions of employment He did tell them the Respondent had no intention of recognizing their Union It is now the position of the Respondent that because the employees at that moment did not openly protest this announced refusal , it follows the employees no longer wished to be represented by the Union . Neither their silence then , nor the fact the Respondent during November stopped the predecessor 's practice of checking off their union dues , as the current contract called for, serves at all to negate the presumption of continuing majority status of the Union as evidenced by the existing contract. and negotiate with it as the statute requires. No question here as to when the duty to bargain arose, for clearly the Respondent knew in advance, of the sale that the Union was the established exclusive representative of the employees it took over, and from the very beginning it intended to and in fact did hire all of the employees of its predecessor. N.L.R.B. v. Polytech, Inc., 469 F.2d 1226 (C.A. 8, 1972). It was the clearest unfair labor practice on November 1. The General Counsel, as part of the appropriate remedy, asks that the employees be made whole for any economic hurt they may have suffered in consequence of the Respondent departing from the contract provisions in the Union's then agreement with the predecessor. That matter was not ex- plored at the hearing. Rather, the record indicates that Flav- O-Rich asked the old employees to stay on with no changes in their pay or other benefits. It may nevertheless be that changes in conditions were made, and that they may have been adverse to the interests of the employees. The remedial order will therefore provide that the question be looked into at the compliance stage, and in the event the Respondent did in fact reduce any of the economic benefits of the em- ployees, it now reimburse them and restore the status quo ante. This is not a matter of ordering the Respondent to abide by the contract which its predecessor had with the Union, but rather to undo the effect, if any, of unilateral changes in conditions of employment it made when it was under a statutory duty to bargain with the Union. See The Denham Company, 206 NLRB 659 (1973). CONCLUSIONS OF LAw 1. By refusing to bargain with the Union on November 1, 1973, and thereafter, concerning wages, hours, and other terms and conditions of employment in the unit found ap- propriate herein, and by refusing to bargain with the Union on November 19,1973, and thereafter, concerning the effect of the Respondent's decision to discontinue its processing plant operation in Bluefield, West Virginia, the Respondent has violated and is violating Section 8(a)(5) and (1) of the Act. The unit appropriate for the purposes of collective bargaining now is: All employees of the Respondent at its Bluefield, West Virginia, Beckley, West Virginia, Kimball, West Vir- ginia, Narrows, Virginia, and Bristol, Tennessee, loca- tions, including all production and maintenance employees, trailer drivers, retail and wholesale route drivers, route -driver helpers, mechanics, cooling room and shipping and receiving employees, but excluding all office clerical employees, guards, and supervisors as defined in the Act. 2. The aforesaid unfair labor practices are unfair labor practices within the meaning of Section 2(6) and (7) of the Act. Upon the foregoing findings of fact, conclusions of law, and the entire record, and pursuant to Section 10(c) of the Act, I hereby issue the following recommended: 934 DECISIONS OF NATIONAL LABOR RELATIONS BOARD ORDER' The Respondent, Flav-O-Rich, Inc., Bluefield, West Vir- ginia , its officers, agents, successors, and assigns, shall 1. Cease and desist from: (a) Refusing to bargain with Chauffeurs, Teamsters and Helpers Local Union No. 175, affiliated with the Interna- tional Brotherhood of Teamsters, Chauffeurs, Warehouse- men and Helpers of America, on request, concerning all terms and conditions of employment as the exclusive collec- tive-bargaining agent of the employees in the unit here found appropriate, and refusing to bargain with that Union concerning the effect of the Respondent's decision to dis- continue its processing plant in Bluefield, West Virginia. (b) In any like or related manner interfering with, re- straining, or coercing employees in the exercise of their right to self-organization, to form, join, or assist labor organiza- tions, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection, or to refrain from any and all such activities. 2. Take the following affirmative action necessary to ef- fectuate the policies of the Act: (a) Upon request, bargain with the Union as the exclu- sive bargaining representative of all employees in the unit here found appropriate concerning all terms and conditions of employment, and with respect to the effect upon the employees of the Respondent's decision to close its pro- cessing plant in Bluefield, West Virginia, and, if an under- standing is reached, embody it in a signed agreement. (b) In the event it should appear upon investigation here- after that the Respondent made any unilateral changes in the conditions of employment of the employees on Novem- ber 1, 1973, or thereafter, make restitution to the employees for any benefits which may have been lost by virtue of the unilateral changes in terms and conditions of employment until such time as a new collective-bargaining agreement is executed between it and the Union. (c) Post at each of the five locations purchased from the Leatherwood Company and still being operated by the Re- spondent at the time of the hearing herein, 'copies of the attached notice marked "Appendix." 6 Copies of said no- tice, on forms provided by the Regional Director fo Region 9, shall, after being signed by the Respondent's representa- tive, be posted by the Respondent immediately upon receipt thereof, and be maintained by it for 60 consecutive days thereafter, in conspicuous places, including all places where notices to employees are customarily posted. Reasonable steps shall be taken by Respondent to insure that said no- tices are not altered, defaced, or covered by any other mate- rial. (d) Notify the Regional Director for Region 9, in writ- ing, within 20 days from the date of this Order, what steps the Respondent has taken to comply herewith. 6 1n the event that the Board's Order is enforced by a judgment of a United States Court of Appeals, the words in the notice reading "Posted by Order of the National Labor Relations Board" shall read "Posted Pursuant to a Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board " 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 having found, after a trial, that we violated the Federal law by refusing to bargain with the statutory collective-bargaining representative of our employees: WE WILL NOT refuse to bargain in good faith, upon request, with Chauffeurs, Teamsters and Helpers Local Union No. 175, affiliated with the International Broth- erhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, as the exclusive bargaining agent of all our employees in the unit described below. WE WILL NOT in any like or related manner interfere with, restrain, or coerce our employees in the exercise of their rights guaranteed by Section 7 of the National Labor Relations Act. WE WILL, upon request, bargain with that Union con- cerning all terms and conditions of employment of all the employees in that bargaining unit, and concerning the effect upon the employees of our decision in No- vember 1973 to discontinue our processing plant in Bluefield, West Virginia. The bargaining unit is' All our employees in our Bluefield, West Virginia, Beckley, West Virginia, Kimball, West Virginia, Narrows, Virginia, and Bristol, Tennessee, locations, including all production and maintenance employ- ees, trailer drivers, retail and wholesale route drivers, route driver helpers, mechanics, cooling room and shipping and receiving employees, but excluding all office clerical employees, guards, and supervisors as defined in the Act. FLAV-O-RICH, INC (Employer) Dated By (Representative) (Title) 5 In the event no exceptions are filed as provided by Sec 102 46 of the Rules and Regulations of the National Labor Relations Board, the findings, This is an official notice and must not be defaced by conclusions. and recommended Order herein shall, as provided in Sec 102,48 anyone. of the Rules and Regulations, be adopted by the Board and become its This notice must remain posted for 60 consecutive daysfindings, conclusions, and Order, and all objections thereto shall be deemed y waived for all purposes from the date of posting and must not be altered, defaced, FLAV-O-RICH, INC. 935 or covered by any other material. Any questions concerning ed to the Board's Office, Federal Office Building, Room this notice or compliance with its provisions may be direct- 3003 , 550 Main Street, Cincinnati, Ohio 45202, Telephone 513-684-3686. Copy with citationCopy as parenthetical citation