Grand Machining Co.

National Labor Relations Board - Board Decisions

Feb 12, 1973

201 N.L.R.B. 815 (N.L.R.B. 1973)

GRAND MACHINING COMPANY 815
Grand Machining Company and International Union
of Electrical , Radio and Machine Workers,
AFL-CIO. Cases 7-CA-8720 and 7-CA-9241
February 12, 1973
DECISION AND ORDER
BY CHAIRMAN MILLER AND MEMBERS JENKINS
AND KENNEDY
On September 8, 1972, Administrative Law Judge
Ivar H. Peterson issued the attached Decision in this
proceeding. Thereafter, Respondent filed exceptions
to the Decision.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the
National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
The Board has considered the record and the
attached Decision in light of the exceptions and has
decided to affirm the rulings, findings, and conclu-
sions 1 of the Administrative Law Judge as consistent
herewith.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor
Relations Board hereby orders that the Respondent,
Grand Machining Company, Detroit, Michigan, its
officers, agents, successors, and assigns, shall:
1. Cease and desist from:
(a) Refusing to inform the Union of any proposed
future move of production from the Respondent to
Grandex, Inc., Precision Automatic, or to any other
concern operated by the same owners and operators
as own and operate the Respondent.
(b) Refusing to furnish the Union with the requisite
information concerning the movement of production
from the Respondent to Grandex, Inc., Precision
Automatic, or any other concern operated by the
same individuals who own and operate the Respon-
dent, so that the Union might make an intelligent
determination whether to file a grievance.
(c) In any like or related manner interfering with,
restraining, or coercing its employees in the exercise
of their right to self-organization, to form, join, or
assist the Union or any other labor organization, to
bargain collectively through representatives of their
own choosing, and to engage in other concerted
i Contrary to our dissenting colleague , we find that the Administrative
Law Judge adequately dealt with the issues herein and that the instant
proceeding is factually distinguishable from Union Carbide Corporation, 178
NLRB 504 Although filing exceptions , Respondent indicated that it was
complying with the recommended Order in total We have been administra-
tively advised that Respondent posted the notice attached to the
Administrative Law Judge's Decision and the parties are bargaining.
Notwithstanding Respondent's apparent compliance with the recommended
activities for the purpose of collective bargaining or
other mutual aid or protection or to refrain from any
or all such activities except to the extent that such
right may be affected by an agreement requiring
membership in a labor organization as a condition of
employment as authorized in Section 8(a)(3) of the
Act, as modified by the Labor Management Report-
ing and Disclosure Act of 1959.
2. Take the following affirmative action which is
necessary to effectuate the policies of the Act:
(a) Inform the Union of any proposed move of
production from the Respondent to Grandex, Inc.,
Precision Automatic, or any other concern operated
by the same owners and operators as own and
operate the Respondent.
(b) Upon request, furnish the Union with the
requisite information concerning the movement of
production from the Respondent to Grandex, Inc.,
Precision Automatic, or any other concern operated
by the same individuals who own and operate the
Respondent, so that the Union might make an
intelligent determination whether to file a grievance.
(c) Post at its plant in Detroit, Michigan, copies of
the attached notice marked "Appendix."2 Copies of
said notice, on forms provided by the Regional
Director for Region 7, after being duly signed by
Respondent's authorized representative, shall be
posted by 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 Respon-
dent to insure that said notices are not altered,
defaced, or covered by any other material.
(d) Notify the Regional Director for Region 7, in
writing, within 20 days from the date of this Order,
what steps the Respondent has taken to comply
herewith.
CHAIRMAN MILLER, dissenting:
In my view, the Administrative Law Judge failed to
analyze the facts of this case in the light of this
Board's holding in Union Carbide Corp., 178 NLRB
504.
That case represents one of the most recent
refinements of our approach to subcontracting
matters. There the Board adopted the rationale of the
Administrative Law Judge (then called Trial Exam-
iner), who noted that even if subcontracting is
entered into unilaterally, that fact alone will not
Order and notice , we have decided to correct certain inadvertent errors in
these documents by issuing the attached revised Order and notice
2 In the event that this Order is enforced by a Judgment of a United
States Court of Appeals, the words in the notice reading "Posted by Order
of the National Labor Relations Board" shall read "Posted Pursuant to a
Judgment of the United States Court of Appeals Enforcing an Order of the
National Labor Relations Board."
201 NLRB No. 86
816 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
establish an 8(a)(5) violation. He went on to say that
such factors as the following require examination: (a)
the presence or absence of a management rights
clause, (b) the success or lack of success by the
Union in attempting to negotiate restrictions on
subcontracting, (c) the employer's past practice as to
subcontracting (d) whether the subcontracting elimi-
nated job classifications, and (e) whether the action
resulted in a "significant impairment" of job tenure,
employment security, or reasonably anticipated work
opportunities for those in the bargaining unit.
There is evidence in this record that (a) there is a
management rights clause, (b) the Union unsuccess-
fully attempted to secure a clause limiting subcon-
tracting, (c) the Respondent has subcontracted in the
past, (d) there was no elimination of any job
classification and no employee was laid off because
of the subcontracting, and (e) there was only minimal
impact on the work opportunities in the bargaining
unit.
The Administrative Law Judge below, however,
ignores all of those factors and finds that the
subcontracting violated Section 8(a)(5), based solely
on the unilateral nature of the action.
The record would seem to justify a finding of
refusal to supply information, though the Adminis-
trative Law Judge again failed to deal adequately
with the defenses presented. Respondent asserted,
for example, that certain of the information request-
ed was confidential, was not necessary to the
resolution of any dispute which may have existed,
and that its disclosure would have a serious adverse
business impact on the Company's operation. No
mention whatever of this matter is made in the
Decision below.
For all of the above reasons, I cannot subscribe to
a routine adoption of the Administrative Law
Judge's findings and recommendations in a case
where I think he obviously did not deal adequately
with the issues presented. Either a remand or a full
review of the record and the applicable law by this
Board is required here, in my view.
APPENDIX
NOTICE TO EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
WE WILL NOT fail or refuse to bargain collec-
tively with International Union of Electrical,
Radio and Machine Workers, AFL-CIO, as the
exclusive representative of all our employees in
the appropriate unit by unilaterally changing any
term or condition of employment of employees
within the bargaining unit without prior notice to
and consultation with the aforesaid Union.
WE WILL NOT fail to furnish the Union with
requisite information concerning the movement
of production from us to Grandex , Inc., Precision
Automatic, or any other concern which we own
and operate, so that the Union might make an
intelligent determination whether to file a griev-
ance.
WE WILL NOT in any like or related manner
interfere with , restrain, or coerce employees in the
exercise of their right to self-organization, to
form, join , or assist the above-named Union or
any other labor organization to bargain collec-
tively through representatives of their own choos-
ing and to engage in other concerted activities for
the purpose of collective bargaining or other
mutual aid or protection or to refrain from any or
all such activities except to the extent that such
right may be affected by an agreement requiring
membership in a labor organization as authorized
by Section 8(a)(3) of the National Labor Rela-
tions Act, as modified by the Labor Management
Reporting and Disclosure Act of 1959.
GRAND MACHINING
COMPANY
(Employer)
Dated By
(Representative) (Title)
This is an official notice and must not be defaced
by anyone.
This notice must remain posted for 60 consecutive
days from the date of posting and must not be
altered, defaced, or covered by any other material.
Any questions concerning this notice or compli-
ance with its provisions may be directed to the
Board's Office , 500 Book Building, 1249 Washington
Boulevard, Detroit, Michigan 48226, Telephone
313-226-3200.
DECISION
STATEMENT OF THE CASE
IvAR H. PETERSON , Administrative Law Judge : This case
was tried in Detroit , Michigan , on July 31, 1972. The
original charge in Case 7-CA-8720 was dated May 17,
1971, and the complaint in that case was issued on June 25,
1971. The charge in Case 7-CA-9241 is dated January 25,
1972. An order consolidating the cases and an amended
complaint was issued on June 14 , 1972. Briefly stated, the
complaint alleges that since on or about February 1, 1971,
Respondent refused to bargain collectively with Interna-
tional Union of Electrical, Radio and Machine Workers,
AFL-CIO, which had been certified on March 26, 1%2, as
the exclusive representative of all production and mainte-
GRAND MACHINING COMPANY
nance employees, including shipping employees and
truckdrivers employed by the Respondent at its Detroit
plant, but excluding office clerical employees, professional
employees, guards and supervisors as defined in the Act. In
addition, the complaint alleged that in early 1971 the
Respondent subcontracted a substantial amount of repair
work on Part No. 9101 to Grandex, Inc., another company
owned and operated by the owner and operator of the
Respondent, and that this action was taken unilaterally
without prior notice to or negotiations with the Union.
Additionally, the complaint alleged that in April 1971 a
machine used to wash parts was sent to Precision Pontiac
Company, another concern owned and operated by the
owner and operator of the Respondent, with no notice to
or negotiations with the Union and that, when the Union
endeavored to discuss the subcontracting and the moving
of the machine the Respondent refused to negotiate or to
furnish to the Union information that it felt was necessary
in order to intelligently bargain and to determine whether
or not a grievance existed. Finally, it is alleged that in
January 1972, the Respondent, having previously assigned
the production of eye bolts to Grand", refused to
negotiate meaningfully regarding that assignment or to
furnish the Union with information with respect thereto.
In its answer, the Respondent set up the following
defenses: First, article XXXV of the contract between the
parties gives the Respondent the unilateral right to
subcontract work without negotiation. Specifically, it relies
on the following provision that conditions may "require
the company to discontinue or transfer the operation of a
plant or plants, a department, a job or an operation, either
partially or totally," and, in view thereof "the company
agrees to the following Severance Pay Plan for all
employees with one (1) year of seniority, who are dropped
from the services of the company because of reduction in
the work force arising out of or as a result of any of the
factors specified." Secondly, it relies on article XXXII of
the contract, which deals with management rights, and
article XXXI which provides that the parties "recognize
that subcontracting to outside concerns has been and shall
continue to be an integral part of the Company's total
operation" and that the Respondent "agrees to discuss
subcontracting with the Union whenever a new policy of
subcontracting, not now in effect, is contemplated that
may effect [sic] the security of the employees in the
bargaining unit." This provision, article XXXI, was
contained in the original 1962 contract but was removed in
the 1963 contract. The Respondent contends that the
absence of this clause in future contracts "doesn't mean
that the Union had negotiated away the Company's right
to subcontract, but merely that the discussion was no
longer necessary" and that the management rights clause
prevails. Furthermore, it asserts that it "has continuously
throughout its history subcontracted work that could have
been done by bargaining unit employees. This is the nature
of job shop machining for the automotive industry based
on efficiency and economics." Finally, the Respondent
cites the Board Decision in Union Carbide Corporation, 178
NLRB 504, where the Board majority adopted the
i At the conclusions of the hearing counsel for the General Counsel and
counsel for the Respondent made oral argument and both stated they did
817
Administrative Law Judge' s Decision in which he said,
among other things, "Not every unilateral subcontracting
of unit work is to be held violative of an employer's
obligation under Section 8(a)(5) of the Act" and that "the
principles governing subcontracting of unit works set forth
in its early decisions . . . were not meant to be hard and
fast rules to be mechanically applied irrespective of the
circumstances of the case."
Upon the entire record in the case, including my
observation of the witnesses as they testified , I make the
following:'
FINDINGS OF FACT
1. JURISDICTION
The Respondent, a Michigan corporation, has its
principal office and place of business in Detroit and is
engaged in the manufacture , sale, and distribution of cams,
shafts, fin assemblies , and related products . During the
fiscal year ending February 28, 1972, the Respondent had
a gross revenue in excess of $500,000 and purchased and
transported materials and goods valued in excess of
$100,000 at its Detroit plant , of which goods and materials
valued in excess of $50,000 were transported directly from
points located outside the State of Michigan. I find that the
Respondent is an employer engaged in commerce within
the meaning of Section 2(2), (6), and (7) of the Act. I
further find that the Union is a labor organization within
the meaning of Section 2(5) of the Act.
II. THE ALLEGED UNFAIR LABOR PRACTICES
A. Introduction
Daniel T. Marcus is the vice president of the Respondent
and Aaron Brooks is the plant manager . On March 16,
1962, a majority of the employees in the appropriate unit,
pursuant to an agreement for a consent election in Case
7-RC-5201, selected the Union as their exclusive collec-
tive-bargaining representative and was certified as such on
March 26, 1962. The agreement in effect at the time of the
hearing, dated August 8, 1969, had an expiration date of
August 8, 1972.
B. The Events
Sometime early in February 1971, the Respondent
subcontracted a substantial amount of repair work on Part
No. 9101 to Grandex, Inc., another company owned and
operated by the owner and operator of the Respondent.
This action was taken without any prior notice to or
negotiations with the Union . About April 27, 1971, a
machine used by the Respondent in its Detroit plant to
wash parts was sent to Precision Pontiac Company,
another concern owned and operated by the owner and
operator of the Respondent . Again, this was done without
prior notice to or negotiations with the Union . On April 27,
officers of the Union met with Aaron Brooks to discuss
these two matters . The Union requested the name of the
company that had the prime contract on Part No . 9101 and
not intend to file briefs.
818 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
the Respondent refused to answer that question. The
Union stated that it needed this information so that it
could make a determination as to whether there was
ground for filing a grievance . Under the contract, in its
view , if the Respondent had been the prime contractor or
prime subcontractor the Union would have contended that
it had a grievance and that the Company was subcontract-
ing bargaining unit work with the result that there was a
loss of work for employees in the bargaining unit. Marcus'
response was that he did not feel that that question needed
to be answered . With respect to the parts washer, Marvin
Duckert , an International representative, asked who owned
the machine and Marcus replied that the Respondent
owned it. Thereupon Duckert inquired why the parts
washer was moved to Precision Automatic, which does
primarily screw machine product work. The Union
inquired how much work would be lost at the Respon-
dent's plant by reason of this transfer of the washer
machine and Brooks replied that the loss would amount to
16 to 24 hours a week. The Union requested that the
machine be returned immediately . Employees at Precision
Automatic were representated by the United Automobile
Workers. The Respondent's representative stated that the
machine had been moved to Precision because it was used
for washing parts turned out at Precision and felt that the
Respondent had the right to move it there.
On January 14 representatives of the Union again met
with Marcus and Brooks with respect to the action of the
Respondent in assigning the production of eye bolts to
Grandex . Duckert questioned the Respondent 's represent-
atives as to what operations on the eye bolt were being
subcontracted. Marcus replied that only a couple of the
operations would be subcontracted but he declined to state
what the operations were because he, according to
Duckert, did not feel this information was any of the
Union's business. Duckert explained that the Union
needed this information in order to make a determination
whether or not they had a grievance, but Marcus affirmed
his position. Duckert then stated that if the Respondent
did not furnish the information the Union would file a
charge with the Board, to which Marcus made a remark to
the effect "be my guest" and stated that if the Board told
him that he had to give the information to the Union he
would then furnish it. According to Duckert, members of
the bargaining unit of the Respondent had done the work
on the eye bolt previously, although this had been some 4
years before the instant occasion.
The union representatives inquired what operations were
being performed at Grandex that could not be performed
at Grand Machining and the reply was about two
operations. Two lathes had been tooled up by the toolroom
employees at Grand Machining and performed operations
on the eye bolt. Union representatives asked why the two
lathes were not set up at Grand Machining and the work
performed there because there were people on layoff. The
reply was that it was more economic to perform the work
at Grandex and ship the lathes there. Marcus explained
that by more economically feasible he meant that it would
cost less in wages since Grandex wages were lower. The
removal of the lathes from Grand Machining to Grandex
had not been discussed with the Union prior to making the
move.
Brooks testified that Grand Machining manufactured a
9101 part on what is known as a cold-header machine. The
parts were approved by inspection and shipped to the
customers . Within a few days the entire lot was rejected
because of a defect . The customer was anxious to receive
the parts in order to keep running and the Respondent
corrected the defect on a drill press at Grandex because
that was the most economical way to do it. The part was
made by bargaining unit employees and also inspected by
them. This was the first rejection the Respondent had had
with respect to this part and since then there have been no
further rejections . Concerning the parts washer, Brooks
testified that it was bought at the insistence of Precision to
wash their parts . At the time the washer was bought the
volume was quite high for the particular part, a wheel nut,
but later on the volume decreased . The Respondent began
washing another Precision manufactured part, a speedome-
ter made of aluminum . It was decided to move the washing
machine to Precision because the volume was not sufficient
at Grand Machining and at Precision the washer was
connected to the machine that manufactured the part with
the result that the parts came out of the machine and went
through the washer automatically . Brooks testified that it
was more economical to do this even though the labor rate
at Precision was higher than at Grand Machining . Before
the machine was moved it was being used approximately
16 hours a week . No one was laid off because the machine
was moved.
With respect to the eye bolt the Respondent last had
manufactured this part in about 1962 , but the more recent
eye bolt was different in the machining operations. Brooks
testified that it was very seldom that machines used by
Grand Machining were moved to other companies . Brooks
also stated that there were very few drill presses at Grand
Machining and they are set on a permanent production
basis, and he did not want to interfere with that operation.
On the other hand, the dull press at Grandex was idle and
all that had to be done to put it in operation was to insert
the cutter.
Marcus, the Respondent' s vice president, testified that
the Respondent believed that it had the right to subcon-
tract work, that it had done so in the past, and that it was
necessary to make a "viable operation so that all the plants
can be operating most efficiently ." It was his opinion that
the information on purchase orders was confidential, that
it was of a type which "very few people even in
management in the organization are allowed" to have in
view of the highly competitive nature of the business.
Moreover, he stated that in his view such information was
not "relevant to the bargaining and agreement since we
believe that we have this subcontracting right." He
acknowledged that he did not discuss the subcontracting of
Part No. 9101 with the Union, nor did he discuss the
transfer of the washing machine from Grand Machining to
Precision. He stated that the washing machine was not
bought for use at Grand Machining although that was
where it was eventually utilized . He testified that the
employees at Precision are represented by UAW Local 540
GRAND MACHINING COMPANY 819
and that the employees at Grandex are represented by a
Local of Allied Industrial Workers.
In January 1971 the Union filed a grievance alleging that
the Respondent had failed to live up to an agreement made
in a letter written to the Union in August 1965. The letter,
in pertinent part , reads as follows:
Due to the increased schedules of cams and rockets,
plus the tube job , ACG-2, scheduled to start up again
in September , it is the Company's intention to
subcontract FG-102 and FG-103, to alleviate present
and anticipated crowded conditions.
There will be no layoffs due to this move.
Should the future find a reduction in the work force
below its present level , and the return of these jobs will
avoid some layoffs , it is the intention of the Company
to return these jobs to the plant.
Contrary to the Respondent 's contention in that pro-
ceeding, the arbitrator found that this letter constituted a
commitment but that the return of the particular job there
involved "would not have avoided some layoffs because
the work could have been performed by employees who
were retained despite the layoff ." The arbitrator concluded
that , while the grievance had to be denied, that "does not
mean the commitment in the Company 's August 18, 1965
letter has been abrogated or that the Company is free to
continue subcontracting Job FG-103 regardless of whether
conditions necessitating the recurrence of the job might
exist at some future time . What it means is that the
evidence in this case does not justify a finding that those
conditions existed during the period in question ." Marcus
testified that from 1963 on the Respondent has subcon-
tracted without prior discussion with the Union on many
occasions.
Upon being recalled after Marcus had testified , Interna-
tional Representative Duckert testified that in the negotia-
tion of the 1963 contract the Union would not agree on the
subcontracting language in the 1962 agreement and the
parties failed to arrive at an agreement on subcontracting
language . However , he testified that "we did agree that the
Company would follow the rules and regulations set down
by the Board . That is, to discuss-before any work would
be subcontracted would be negotiated , be a matter of
negotiations with the Union . What we agreed to is that we
would follow the law as the Board had interpreted it." In
subsequent negotiations the matter of subcontracting has
not been brought up, according to Duckert . Duckert
further testified that in 1966, when the Respondent was
contemplating opening a plant, the Union inquired where
the plant was to be located and the Respondent would not
disclose that information . Inasmuch as the agreement
contained a provision that in the event the Respondent
opened the plant within a certain radius it would recognize
the Union, the Union filed a charge with the Board (Case
7-CA-5523). In that case the charge was later withdrawn.
C. Conclusions
In oral argument, counsel for the General Counsel
contended that the evidence was clear that the Respondent
moved the washing machine without prior consultation
with or notification to the Union and, since the work on
this machine had been done by unit personnel, the transfer
did affect the bargaining unit because members thereof no
longer did the work. Counsel for the General Counsel
further contended that the moving of Part No. 9101 was
clearly without prior consultation with or notification to
the Union. He argued that "the law in that area
[subcontracting] is equally clear [that] any waiver of the
subcontract right, must be explicit." In support of his
contention he cited Timken Roller Bearing Company, 70
NLRB 500, reversed 161 F.2d 949 (C.A. 6, 1947), and
Timken Roller Bearing Company v. N.LR.B., 325 F.2d 746
(C.A. 6, 1963); N.LR.B. v. Perkins Machine Company, 326
F.2d 488 (C.A. 1, 1964); N.LR.B. v. Acme Industrial Co.,
385 U.S. 432 (1967), and N.L.R.B. v. Truitt Manufacturing
Company, 351 U.S. 49 (1956). On the other hand,
Respondent, in closing argument , repeats the matter
contained in its answer to the complaint, set forth above. It
further contended that it was "unreasonable to insist that
work that was improperly done by bargaining unit
workers, improperly inspected by bargaining unit inspec-
tors, be given back to them. It would put us in a position
where they would not do their utmost because they would
figure they would get more work out of it and we do not
believe that this making work type of thing should be
forced upon the Company." Marcus also pointed out that
in a highly competitive industry such as the automotive
industry, flexibility regarding production operations is a
necessity.
I am unable to distinguish the foregoing cases from the
situation that obtains here. Indeed, the Acme case is
strikingly similar to the situation with which we are here
confronted; the only difference I can discern is that
apparently the shifting of operations between the several
companies here involved occurred more frequently. Upon
the entire record, I conclude that the Respondent has
violated Section 8(a)(5) and (1) of the Act.
CONCLUSIONS OF LAW
1. Grand Machining Company, Detroit, Michigan, is
an employer engaged in commerce within the meaning of
Section 2(2), (6), and (7) of the Act ; International Union of
Electrical, Radio and Machine Workers, AFL-CIO, is a
labor organization within the meaning of Section 2(5) of
the Act.
2. By subcontracting repair work on Part No. 9101 to
Grandex, Inc., and by moving the parts washer to
Precision Automatic in April 1971, both without notifica-
tion to or consultation with the Union, the Respondent
violated Section 8(a)(5) and (1) of the Act.
3. By refusing to inform the Union why the production
of eye bolts was assigned to Grandex, Inc., or to furnish
the Union with the name of the prime contractor on Part
No. 9101, in order that the Union might make an
intelligent determination as to whether there was ground
for filing a grievance, the Respondent violated Section
8(a)(5) and (1) of the Act.
4. The aforesaid unfair labor practices are unfair labor
practices affecting commerce within the meaning of
Section 2(6) and (7) of the Act.
[Recommended Order omitted from publication.]