Polytech, Inc.

National Labor Relations Board - Board Decisions

Nov 30, 1970

186 N.L.R.B. 984 (N.L.R.B. 1970)

984 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Polytech, Incorporated , and Terence McGowan d/b/a
Polytech, Incorporated and District No. 9, Interna-
tional Association of Machinists and Aerospace
Workers , AFL-CIO. Case 14-CA-5207
November 30, 1970
DECISION AND ORDER
BY CHAIRMAN MILLER AND MEMBERS
FANNING AND BROWN
On April 1, 1970, Trial Examiner David S. David-
son issued his Decision in the above-entitled proceed-
ing, finding that the Respondents had engaged in and
were engaging in certain unfair labor practices within
the meaning of the National Labor Relations Act, as
amended, and recommending that they cease and
desist therefrom and take certain affirmative action,
as set forth in the attached Trial Examiner's Decision.
He further found that the Respondents had not
engaged in certain other unfair labor practices alleged
in the complaint and recommended that such allega-
tions be dismissed. Thereafter, the Respondents and
the General Counsel filed exceptions and supporting
briefs, and the Respondents filed an answering brief.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the
National Labor Relations Board has delegated its
powers in connection with this case to a three-member
panel.
The Board has reviewed the rulings of the Trial
Examiner made at the hearing and finds that no
prejudicial error was committed. The rulings are
hereby affirmed. The Board has considered the Trial
Examiner's Decision, the exceptions, the briefs, and
the entire record in the case, and hereby adopts the
findings, conclusions, and recommendations of the
Trial Examiner, except as modified below.
The Trial Examiner found that the Respondents
were successor-employers to Polytech Company and
that by refusing to recognize the Union as the
representative of its employees, the Respondents
refused to bargain with the Union in violation of
Section 8(a)(5) of the Act. However, relying on
Rohlik, Inc., i the Trial Examiner did not find that the
Respondents additionally violated Section 8(a)(5) of
the Act by refusing to honor the agreement between
Polytech Company and the Union.
Since the Trial Examiner's Decision herein, the
Board has issued its decision in The William J. Burns
International Detective Agency, Inc., case,2 in which
the Board majority held that an employer found to be
the successor to the contracting company had an
obligation to honor the collective-bargaining agree-
1 145 NLRB 1236
2 182 NLRB No 50
ment in effect at the time it took over the employing
enterprise, and its failure to do so violated Section
8(a)(5) of the Act. Accordingly, as we agree with the
Trial Examiner's conclusion that the Respondents are
successor-employers to Polytech Company, we find
that the Respondents, by refusing to honor the
agreement between Polytech Company and the
Union, violated Section 8(a)(5) of the Act.
THE REMEDY
Having found, contrary to the Trial Examiner, that
the Respondents engaged in an additional unfair
labor practice in violation of Section 8(a)(5) of the Act
by failing to honor the collective-bargaining agree-
ment in effect at the time of their takeover, we shall
further order that, upon request by the Union, the
Respondents will be required to make restitution of
all contractual benefits which they may have unlaw-
fully withheld from employees by virtue of their
failure to abide by the provisions of the collective-
bargaining agreement during its scheduled term.
Whatever monetary restitution the Respondents'
employees may be entitled to, shall be computed in
the manner set forth in F. W. Woolworth Company, 90
NLRB 289, and shall include interest in the amount
and manner set forth in Isis Plumbing & Heating Co.,
138 NLRB 716.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended , the National Labor
Relations Board hereby orders that the Respondents,
Polytech, Incorporated , and Terence McGowan
d/b/a Polytech, Incorporated , Overland , Missouri,
their officers , agents, successors , and assigns , shall:
1. Cease and desist from:
(a) Refusing to recognize or bargain with District
No. 9, International Association of Machinists and
Aerospace Workers, AFL-CIO, upon request, and
refusing to abide by the provisions of the collective-
bargaining agreement in effect at the time of their
acquisition of Polytech Company.
(b) Promising benefits to employees to discourage
them from engaging in union or concerted activities.
(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 labor organizations , to bargain collectively
through representatives of their own choosing, or to
engage in other concerted activities for the purpose of
collective bargaining or other mutual aid or protec-
tion , or to refrain from any or all such activities,
except to the extent that such rights may be affected
186 NLRB No. 148
POLYTECH,
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 amended.
2. Take the following affirmative action which is
necessary to effectuate the policies of the Act:
(a) Upon request , bargain collectively with District
No. 9, International Association of Machinists and
Aerospace Workers, AFL-CIO, as the exclusive
bargaining representative of all the employees in the
appropriate unit and abide by the provisions of the
collective -bargaining agreement in effect at the time
of their acquisition of Polytech Company.
(b) Make restitution of all contractual benefits
which they may have unlawfully withheld from
employees by virtue of their failure to abide by the
provisions of the collective -bargaining agreement in
effect at the time of their acquisition of the employing
enterprise involved herein in the manner set forth in
the portion of this decision entitled "The Remedy."
(c) Post at their Overland , Missouri , place of
business , copies of the attached notice marked
"Appendix." 3 Copies of said notice , on forms
provided by the Regional Director for Region 14,
after being duly signed by Respondents ' representa-
tive , shall be posted by them immediately upon
receipt thereof, and be maintained by them for 60
consecutive days thereafter, in conspicuous places,
including all places where notices to employees are
customarily posted. Reasonable steps shall be taken
by the Respondents to insure that said notices are not
altered , defaced , or covered by any other material.
(d) Notify the Regional Director for Region 14, in
writing, within 10 days from the receipt of this Order,
what steps have been taken to comply herewith.
IT IS FURTHER ORDERED that the complaint herein be
dismissed to the extent that it alleges violations of the
Act not found herein.
3 In the event that this 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 be changed to 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
WE WILL NOT promise our employees benefits to
discourage them from engaging in union or
concerted activities.
WE WILL NOT refuse to recognize or bargain
with District No. 9, International Association of
Machinists and Aerospace Workers, AFL-CIO,
upon request , and refuse to abide by the provisions
INCORPORATED 985
of the collective-bargaining agreement in effect at
the time of our acquisition of Polytech Company.
WE WILL upon request bargain with District No.
9, International Association of Machinists and
Aerospace Workers, AFL-CIO, as the exclusive
bargaining representative of all the employees in
the bargaining unit described below with respect
to rates of pay, wages, hours of employment, and
other terms and conditions of employment, and
abide by the provisions of the collective-bargain-
ing agreement in effect at the time of our
acquisition of Polytech Company. The bargaining
unit is:
All employees employed in the making,
erecting, assembling, installing, maintaining,
dismantling, or repairing of all dies, machin-
ery or parts thereof, and all other production
and maintenance employees at our Overland,
Missouri, plant but excluding all clerical
employees, office employees, part-time por-
ters, guards and supervisors defined in the
Act.
WE WILL make restitution of all contractual
benefits which we may have unlawfully withheld
by virtue of our failure to abide by the collective-
bargaining agreement in effect at the time when we
acquired control of the Company.
WE WILL NOT in any like or related manner
interfere with, restrain, or coerce our employees in
the exercise of their right to self-organization, to
form labor organizations, to join or assist District
No. 9, International Association of Machinists
and Aerospace Workers, AFL-CIO, or any other
labor organization, to bargain through representa-
tives of their own choosing, and to engage in other
concerted activities for the purposes of collective
bargaining or other mutual aid or protection, or to
refrain from any and all such activities, except to
the extent that such rights 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
amended.
Dated By
POLYTECH,
INCORPORATED, AND
TERENCE MCGOWAN
d/b/a POLYTECH,
INCORPORATED
(Employers)
(Representative ) (Title)
This is an official notice and must not be defaced by
anyone.
This notice must remain posted for 60 consecutive
986 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
days from the date of posting and must not be altered,
defaced , or covered by any other material.
Any questions concerning this notice or compliance
with its provisions may be directed to the Board's
Office , 1040 Boatmen 's Bank Building , 314 North
Broadway , St. Louis, Missouri 63102, Telephone
314-622-4167.
within the meaning of the Act and that assertion of
jurisdiction herein is warranted.
II. THE LABOR ORGANIZATION INVOLVED
District No. 9, International Association of Machinists
and Aerospace Workers, AFL-CIO, is a labor organization
within the meaning of the Act.
TRIAL EXAMINER 'S DECISION
STATEMENT OF THE CASE
DAVID S. DAVIDSON, Trial Examiner: Pursuant to a
charge filed on July 24, 1969, and thereafter amended by
District No. 9, International Association of Machinists and
Aerospace Workers, AFL-CIO, referred to herein as the
Union, the complaint issued on October 29, 1969, alleging
that since on or about July 21, 1969, Polytech, Incorporat-
ed, refused to bargain in violation of Section 8(a)(5) of the
Act as successor to Polytech Company whose employees
the Union represented.' The complaint also alleges that
Respondents violated Section 8(a)(1) of the Act by
promising benefits to employees in July and August 1969 in
order to discourage them from seeking continued union
representation. In their answer Respondents deny commis-
sion of any unfair labor practices.
A hearing was held before me in St Louis, Missouri, on
December 8, 1969. At the close of the hearing oral
argument was waived and the parties were given leave to
file briefs which have been received from the General
Counsel and the Respondents.
Upon the entire record in this case and from my
observation of the witnesses and their demeanor I make the
following:
FINDINGS AND CONCLUSIONS
1. THE BUSINESS OF THE RESPONDENTS
On July 12, 1969, Terence McGowan commenced doing
business as Polytech, Incorporated, at Overland, Missouri,
where he engaged in the manufacture, sale, and distribution
of transparent plastic sheets and related products. McGow-
an operated as an individual proprietorship until issuance
of a corporate charter on September 10, 1969. On that date
Polytech, Incorporated, replaced McGowan as operator of
the enterprise. It is conceded that Polytech, Incorporated, is
the successor to the sole proprietorship of Terence
McGowan. For purposes of jurisdiction the operations of
the sole proprietorship and the corporation may be
considered as one . During the period from July 12, 1969,
through November 30, 1969, Polytech, Incorporated, sold
and shipped products valued in excess of $50,000 to
customers located outside the State of Missouri. During the
same period it purchased materials valued at approximately
$31,000 of which approximately 90 percent were shipped
directly to it from points located outside the State of
Missouri. I find that it is an employer engaged in commerce
III. THE ALLEGED UNFAIR LABOR PRACTICES
A. The Alleged Successorship
1. The history of the entities involved
In September or October 1966 Terence McGowan
organized and incorporated an enterprise known as
Polytech Company. In August 1968 Arundale Manufactur-
ers, Inc ., purchased a controlling interest in Polytech
Company. McGowan retained a 49-percent interest in
Polytech Company and continued to occupy the position of
president. McGowan who had previously functioned as the
managing officer of Polytech Company was replaced in
that capacity by Frederick Taussig, chairman of the board
of Arundale, and a succession of several new plant
managers were engaged. McGowan however continued to
work actively in the Company, functioning as an instructor
or adviser in production processes.
At the time of the purchase of the controlling interest by
Arundale, Polytech Company continued to operate at its
original plant location in Overland , Missouri , where it
engaged both in the casting of sheet plastic and the
fabrication of plastic parts. Shortly thereafter Arundale
purchased the plant which had previously been leased. At
some time after the takeover of Polytech by Arundale,
operations were started at a second location approximately
15 or 20 miles from Overland near Arundale's main plant.
These operations became known as the ECM Manufactur-
ing Company which operated as a part of Polytech
Company.2 Thereafter most of the fabricating functions
performed by Polytech were moved to the ECM plant and
casting operations continued to be performed at the
Overland location.
Several weeks before June 15, 1969, the operations of
ECM Manufacturing Company terminated, and on June
15, 1969, all operations of Polytech Company ceased.
On July 12, 1969, Terence McGowan and Joyce
McGowan, his wife, entered into an agreement with
Arundale and Polytech Company pursuant to which the
McGowans exchanged all their stock in Polytech Company
for most of the machinery and equipment of Polytech and
its furniture, supplies, raw materials, work in process, and
other tangible personal property. Polytech Company
retained its cash, accounts receivable, finished goods, and
other assets not specifically transferred by the agreement.
Polytech Company agreed to remain responsible for all its
debts and obligations except for one loan in the amount of
$2,500 which was made to Polytech Company by a friend of
the McGowans and was assumed by them. The agreement
I A motion to amend the name of the Respondent Polytech, sole proprietorship prior to its incorporation
Incorporated , was granted at the hearing The name of the proprietorship 2 Whether ECM was a separately incorporated subsidiary or simply an
appearing in the caption has also been amended to reflect the evidence at operating name given it to distinguish it from the Overland plant is not
the hearing that Terence McGowan operated Polytech , Incorporated , as a disclosed on the record
POLYTECH, INCORPORATED
of August 10, 1968, pursuant to which Arundale purchased
a controlling interest in Polytech Company, was terminat-
ed. Arundale agreed to lease to the McGowans the real
estate located at Overland where Polytech's Company's
operations had been conducted.3 Pursuant to the terms of
the agreement the McGowans were permitted to contact
the customers of Polytech Company and to conduct
business at any location under any name containing the
word "Polytech" other than the specific name "Polytech
Company." Arundale and Folytech Company agreed to
assist the McGowans in obtaining credit from a bank, and
the McGowans agreed to resign from any offices they held
in Polytech Company.
On July 12, 1969, Terence McGowan commenced
operations at the Overland plant, under the name Polytech,
Incorporated. McGowan applied for a corporate charter in
that name, and on September 10, 1969, the charter was
granted. Polytech, Incorporated, succeeded to McGowan's
proprietorship under that name, and McGowan continued
to manage the enterprise thereafter.
2. The representation of the employees of
Polytech Company
At some point after Arundale assumed majority control
of Polytech Company, Oil, Chemical, and Atomic Workers
International Union, AFL-CIO, filed a petition seeking to
represent the production and maintenance employees of
Polytech Company at its Overland plant.4 District No. 9,
International Association of Machinists and Aerospace
Workers, AFL-CIO, intervened in that proceeding on the
basis of a current contract covering the production and
maintenance employees of Arundale which was to expire in
December 1969. District No. 9 and the Employer
contended in that proceeding that the petition should be
dismissed because Polytech Company and Arundale had
plans to transfer Polytech Company's operations to
Arundale's plant within 90 days after the hearing, after
which the operations of both were to be integrated at the
Arundale plant. On November 18, 1968, the Regional
Director issued his Decision and Order dismissing the
petition finding that no useful purpose would be served by
proceeding with a determination of representatives because
of the plans to merge the operations.
In August or September 1968 a portion of the Polytech
operation was moved to a location near the Arundale plant
where it became known as ECM Manufacturing Company.
However, the move described in the Regional Director's
decision never occurred.5
Following dismissal of the representation petition
Polytech Company recognized the Union as the bargaining
representative of "all employees employed in the making,
erecting, assembling, installing, maintaining, dismantling,
or repairing of all dies, machinery or parts thereof and all
other production and maintenance employees of the
Company's plant, but excluding all clerical, office, guards,
supervisory employees and part- time porters as defined in
3 The agreement contained an option to purchase the real estate on or
before September 30, 1969, which was not exercised by the McGowans
4 Case 14-RC-6067
5 According to McGowan the possibility of that move had been
discussed by Arundale management before the issuance of the Regional
987
Section 2(11) of the National Labor Relations Act as
amended." Polytech Company and the Union entered into
a contract covering these employees which was to run from
January 1, 1969, through December 31, 1970. The contract
was negotiated with the Union for Polytech Company by
someone other than McGowan. Although not entirely clear
from its face, it appears that that contract was intended to
cover only the employees at the Overland plant. Subse-
quently in March or April 1969 at the direction of
Arundale's board chairman, McGowan signed a letter
agreeing to representation of the employees at ECM by the
Union. The agreement between Polytech Company and the
Union established wages, hours, and working conditions
for the employees in the unit described therein and was
applied until the termination of Polytech Company's
operations on June 15, 1969.
3. The staffing of Polytech, Incorporated
At the time Arundale assumed control of Polytech
Company, Polytech employed 9 or 10 employees. At one
point during the period of Arundale's operation of Polytech
Company, its employment rose as high as 30 to 35
employees at both locations. When ECM's operations
terminated in May or June 1969 there were two supervisors
and nine production employees at the ECM operation. All
but two of the production employees, who were transferred
to the Overland plant, were discharged. When Polytech
Company's operations ceased on June 15, 1968, there were
2 supervisors and 13 production employees at the Overland
location, including the 2 who had been transferred from
ECM to Overland. On June 15, 1969, all of the remaining
employees were discharged. The supervisors were also
discharged, but because they were employed on a monthly
basis, their discharges became effective on July 1, 1969.
When Polytech, Incorporated,6 started its operations on
July 12, 1969, McGowan solicited former employees of
Polytech Company to come to work for it because they had
some skill in the company operations and because
McGowan had become friendly with some of his employees
and felt a sense of responsibility to them. McGowan
contacted as many of the former employees as he could
reach and asked them to come to work for him. He was
unable to reach some of the former employees and
discovered that others had obtained jobs in the interim.
McGowan also advertised in local newspapers for help and
asked the Missouri employment service to send him job
applicants. Of the former Polytech Company employees
whom he was able to reach, McGowan hired all who
wantedjobs.
After 10 days of operation Polytech, Incorporated, had
employed one supervisor and eight employees. The
supervisor, Don Iler, had worked for Polytech Company as
a supervisor at the time its operations terminated. Iler
remained the only supervisor of Polytech, Incorporated,
thereafter. Of the eight employees, five had been employed
by Polytech Company at the time it shut down and three
Director's decision but was discarded because of zoning restrictions at the
Arundale plant
6 The operations of McGowan after July 12, 1969, and the corporation
after September 10, 1969, are referred to jointly as the operations of
Polytech, Incorporated, without distinguishing between the two
988 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
were new employees with no prior experience with Polytech
Company. One of the five former Polytech Company
employees worked for Polytech, Incorporated, only 1 day
and left.
By July 31 Polytech, Incorporated, had 10 employees on
its payroll of whom 4 had been employed by Polytech
Company at the time of the termination of its operations.?
Six were new employees, one of whom had been employed
previously by Polytech Company before it was taken over
by Arundale. Another of the six was employed only for the
summer.8 At the end of November 1969 Respondent
employed 12 employees, including 3 of the original 4
former Polytech Company employees. One of the other
employees on the payroll as of that date had worked for
ECM at the time its operations terminated, and the
remaining eight employees had no previous employment
history with Polytech Company.
McGowan testified that he hired new employees in July
at the same rates as had been applicable at Polytech
Company because those rates had been determined to be
necessary in order to get people to come to work. The
record does not indicate to what extent, if any, other
benefits or working conditions established under the
Union's contract with Polytech Company were applied to
the employees of Polytech, Incorporated, except to the
extent that it appears that Polytech, Incorporated, did not
make payments to the Union's welfare plan as required by
the Union's contract with Polytech Company and that in
the early period of its operations it had not established its
policy as to a number of benefits.
4. The equipment utilized by Polytech,
Incorporated
The McGowans' agreement with Polytech Company and
Arundale had attached to it as an appendix a list of all the
machinery and equipment of Polytech Company which was
transferred to the McGowans. The list of items, running
slightly in excess of two typewritten pages, was described
by McGowan as constituting a substantial portion of
Polytech Company's equipment. By its terms the agreement
excluded three items from the transfer. These were a small
punchpress, a hot stamp machine, and a clausing lathe.
McGowan testified that he never had an inventory of the
equipment at the ECM plant and was of the opinion that
there was other equipment owned by Polytech Company
which he did not receive but he did not know what it was.
In any event he testified that the equipment which was not
transferred was basically machine shop equipment used in
fabricating of the type carried on in the ECM operation. All
of the equipment utilized in casting plastic sheets was
transferred to Polytech, Incorporated, as well as two saws
which had been moved from the ECM location to the
Overland plant before the shutdown of Polytech Compa-
ny's operations. Apart from the items excluded from
transfer by agreement, McGowan also testified that there
were also a few items at the Overland location which were
not transferred to the McGowans which, like the equipment
7 They were the four remaining Polytech Company employees who were
hired by Polytech , Incorporated , during the first 10 days in July
8 None of the three new employees hired during the first 10 days of July
was still on Respondent 's payroll on July 31 The six new employees on the
of ECM, were items which could be used in Arundale's
operation. McGowan identified a large air compressor in
this category. McGowan testified that approximately 90
percent of the equipment transferred to Polytech, Incorpo-
rated, was presently in use at the Overland plant. He
testified also that Respondent had acquired additional
equipment after the transfer, identifying a piece of
equipment utilized to apply protective masking paper to
acrylic sheets cast at the plant No other new equipment
purchased by Polytech, Incorporated, was identified on the
record.
5. The business of Polytech, Incorporated
McGowan testified that during the last 6 months of the
operations of Polytech Company one of its principal
products, representing 42 percent of its sales, was a green
filter plate for arc welders' helmets made for Glendale
Optical Company.9 The filter was made from materials
developed and furnished by American Cyanamid Compa-
ny and fabricated by Polytech under an agreement with
American Cyanamid. Since July 12, 1969, Polytech,
Incorporated, has not made this product. Before June 15,
1969, Polytech Company also made a protective cover
plate, known as a CR-39 cover plate, which it also sold to
Glendale Optical Company and various welding supply
distributors. The cover plate represented 40 percent of its
sales during its last 6 months of operation. Polytech,
Incorporated, makes this product and sells it to the same
customers. Through November 1969 cover plates sales
represented 78 percent of its volume.
During its last 6 months of operation Polytech Company
also made other kinds of fabricated parts from plastic
sheets. These included a lamp shield for refrigerated cases,
a gas mask lens, and sight glasses or viewports for chemical
tanks. These items all involved fabrication more complicat-
ed than simple sawing. The parts were fabricated at the
ECM plant from plastic sheets made at the Overland plant
or purchased from other sources. Since July 12, 1969,
Polytech, Incorporated, has fabricated no parts similar to
these, but it has produced a simpler fabricated part
requiring only straight saw cuts on a special order for one
customer.
Polytech Company also sold a small amount of
untrimmed and unfabricated sheet plastic, amounting to a
little over 1 percent of its sales during its last 6 months of
operation. Since its inception, Polytech, Incorporated, has
sold larger amounts of untrimmed and unfabricated sheet
plastic, some of which it has furnished to other fabricators
for use in making parts similar to those that Polytech
Company had previously fabricated. Polytech, Incorporat-
ed, has also been trying to develop a market for purchase of
its unfabricated sheet by the United States Government
and has sold some of its sheets to the Defense Supply
Agency.10 Through November total sheet sales amounted
to 13 percent of its sales volume.
At the time McGowan purchased the assets of Polytech
Company, he intended to eliminate most of the fabricating
payroll as of July 31 were all hired on or after July 22
This product had not been made by Polytech Company before
Arundale took it over
is Polytech Company did not sell plastic sheets to the Government
POLYTECH, INCORPORATED
operations that had been performed by Polytech Company
and therefore did not seek to acquire the fabricating
equipment utilized at ECM. The one additional piece of
equipment purchased by Polytech, Incorporated since July
12, 1969, is used to apply protective masking paper to
acrylic sheets and was purchased because of Respondent's
intention to increase its volume of direct sales of plastic
sheet.
During the last 6 months of the Polytech Company's
operations, it purchased sheet plastic in considerable
quantity and also made plastic sheets. The purchased sheets
were of a different type from those which it made, and were
principally for use in fabricating some of its products.
Polytech Company utilized three kinds of sheet plastic. One
was known as CR-39, another as acrylic, and the third was
the green sheet made from American Cyanamid materials.
Each type differed in composition and properties, and the
process and equipment for production of each also differed.
Thus, in making the American Cyanamid sheets it was
necessary to utilize special equipment to purge the material
of atmospheric oxygen to which it was hypersensitive. CR-
39 had no such sensitivity and could be mixed and cast
without similar precaution. Each of the materials has
different curing characteristics and requires different types
of equipment in the heating ovens to compensate for
differing heat transference characteristics of the materials.
However, many of the steps and procedures in the sheet
casting process are the same for all types.
McGowan testified that Polytech, Incorporated, discon-
tinued making the American Cyanamid green filter because
of external factors but did not particularize. He testified
that the decision to curtail production of fabricated parts
otherwise was a matter of deliberate choice resulting from
his experience with Arundale.
6. The Union's request for recognition
On July 23, 1969, Union Representative James Bagwell
visited the Overland plant and spoke to Mr. and Mrs.
McGowan.ii Bagwell informed the McGowans that the
Union wanted Respondent to honor the agreement
between the Union and Polytech Company. McGowan
replied that he had been advised that he was not obligated
to honor the contract because he had started a new
operation in which Arundale had no role. Bagwell disputed
McGowan's assertion that Arundale had nothing to do with
Respondent and continued to press his claim. McGowan
informed Bagwell that he would not honor the contract and
did not recognize the Union as the representative of his
11 McGowan and Bagwell both testified as to this visit Although there
are slight differences in their versions , the essential facts are undisputed
12 McGowan and Bagwell both testified as to this visit My findings are
based on a composite of their testimony
i i According to McGowan, Bagwell told him to get out of his way or he
would put McGowan in the hospital According to Bagwell, McGowan
raised his hand as he stepped in front of Bagwell and Bagwell told him that
if he laid a hand on him, he would put McGowan in the hospital I find
little difference in the two versions Even under Bagwell's version, it
appears that McGowan did no more than attempt to bar Bagwell from the
production area of the plant, and Bagwell thereupon threatened
McGowan
14 The parties stipulated that a unit of the employees of Polytech,
incorporated , described in the same terms as the unit set forth in the
agreement between the Union and Polytech Company is an appropriate
989
employees . On the following day, the charge in this case
was filed.
On August 4, Bagwell again visited the plant and again
spoke with McGowan in the presence of Mrs. McGowan.12
Bagwell again sought to persuade McGowan to honor the
contract and told McGowan that the employees were
prepared to take action if McGowan did not recognize that
the contract applied . McGowan explained to Bagwell at
some length why he believed the contract did not apply and
did not think the employees wanted or needed a union.
After some discussion , Bagwell started to walk toward the
production area of the plant . McGowan asked where he
was going , and Bagwell replied that he was going back to
talk to the employees to lead them out on strike . McGowan
stepped in front of Bagwell and told him that he was on
private property and could not go into the plant. Both
persisted in their positions , and at one point Bagwell
clenched his fist and threatened McGowan that he would
put him in the hospital . 13 While barring Bagwell 's path,
McGowan telephoned his attorney , spoke briefly with him,
and asked Bagwell to leave the plant . Bagwell then left.
7. Concluding findings
The complaint alleges that Polytech, Incorporated,
violated Section 8(a)(5) of the Act by refusing to recognize
the Union as the representative of its employees and by
refusing to honor the contract between Polytech Company
and the Union. Polytech, Incorporated, contends that it is
not a successor to Polytech Company and has no obligation
to bargain with the Union as the representative of its
employees or to honor the contract between the Union and
Polytech Company.
The first question to be answered is whether Respondents
were obligated to recognize the Union as the representative
of their employees. 14 In resolving this issue the Board looks
to see whether after a change in ownership, the "employing
industry" remains essentially the same.15 As the Board has
held:
The critical question is not whether Respondent
succeeded to [the predecessor's] corporate identity or
physical assets, but whether Respondent continued
essentially the same operation, with substantially the
same employee unit whose duly certified bargaining
representative was entitled to statutory recognition at
the time Respondent took over. i6
The obligation is the same whether the union 's representa-
tive status was achieved through an election and certifica-
tion or by means of voluntary recognition and contract.17
unit for purposes of collective bargaining
15 Johnson Ready Mix Co, 142 NLRB 437
16 Maintenance, Incorporated, 148 NLRB 1299, 1301
17 Valleydale Packers, Inc, of Bristol, 162 NLRB 1486, enfd 402 F 2d
768 (C A 5 ) Respondent contends here that it should be relieved of any
obligation which might otherwise be found to exist because the Union's
recognition by Polytech Company followed the filing of a representation
petition by a rival union and its dismissal based on erroneous facts.
Although McGowan's testimony suggests that plans to consolidate
Polytech Company 's operations with Arundale's were abandoned before
issuance of the Regional Director 's representation decision, the record does
not establish that the testimony in the representation case was known to be
false at the time of the representation case hearing The recognition of the
Union by Polytech Company was never attacked by a timely charge, and
there is no evidence in the record before me to overcome the normal
(Continued)
990 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Here, while there is some evidence of difference between
the operations of Polytech Company and those of Polytech,
Incorporated, I am persuaded that the two operations are
essentially the same . Although Polytech Company contin-
ues to exist, its operations have ceased. Significantly, not
only were the assets of Polytech Company transferred to
Polytech, Incorporated, but the rights to use the name
"Polytech" and to contact former customers were trans-
ferred to Polytech, Incorporated. McGowan, who was the
founder of Polytech Company and who was apparently
responsible for guiding its manufacturing techniques, was
the founder of Polytech, Incorporated, and its principal
managing agent. Although Polytech, Incorporated, does
not make one of the principal products which Polytech
Company made, the discontinuation of that product was
caused by external factors. While Polytech Company had
increased the portion of its business devoted to fabrication
during the penod of Arundale's control, much of the
fabrication had been carried on at a separate location, and
the elimination of fabrication left Polytech, Incorporated,
in much the same position as Polytech Company was in
before the Arundale take-over. Since its formation,
Polytech, Incorporated, has continued to produce cast
sheet plastic at the same plant with essentially the same
equipment and processes as Polytech Company used during
its operative existence. Polytech, Incorporated, continues to
sell to the former customers of Polytech Company. Its
efforts to expand its markets and concentrate on more
profitable product lines represent no basic change in its
business but only the normal effort of any business to
become more profitable. I find that Polytech, Incorporated,
has continued essentially the same operation as Polytech
Company.18
I find further that Respondent's operations were
conducted with essentially the same employee unit as those
of Polytech Company. As McGowan testified, when he
started his operations, he sought out the former employees
of Polytech Company to offer them employment and hired
as many of them as he could find who were willing to work
for him. He sought them because of their experience and
skills and because he felt responsible to them.
Because of the form in which the evidence was presented,
it is not possible to find with any precision what the exact
employee complement was on July 23, when Bagwell first
visited the plant. Respondent furnished an exhibit which
shows employees in the first 10 days of its operations. One
employee on the list is shown as having worked I day. As
for the remainder, it is not clear whether they were on the
payroll at the end of the 10-day period or merely had
worked at some time during those 10 days But assuming
that all, save the employee who worked only I day, were
employed at the end of 10 days, it appears that there were
presumption that the Union represented a majority of Polytech Company's
employees at the time it recognized the Union and entered into a contract
with it
18 Maintenance, Incorporated 148 NLRB 1299, Johnson Ready Mix Co,
142 NLRB 437, Auto Ventshade, Inc, 123 NLRB 451, enfd 276 F 2d 303
(C A 5) Respondent relies upon Pargament Fidler, Inc, et al , 173 NLRB
No 102, in support of an opposite conclusion There, unlike the instant
case, the respondent purchased only a portion of the predecessor's
equipment at public auction , it did not purchase sufficient equipment to
produce the predecessor's end product The equipment was moved into the
building where the respondent conducted a related existing business, and
seven employees as of July 21 or 22, of whom four were
former employees of Polytech Company and three were
new employees. 19 As of that time there was one supervisor
who had been employed in that capacity by Polytech
Company.
Another exhibit prepared by Respondents shows that as
of July 31, 10 days later , the four former Polytech Company
employees were still on Respondents' payroll. The three
new employees who were employed as of July 21 had left,
and in their place six new employees had been hired. The
record does not show the dates on which the three
employees left, but it indicates that two new employees
were hired on July 22, one of whom had worked for
Polytech Company before Arundale assumed its control,
and the remaining four new employees were hired on July
23, 24, 25, and 28. Of these, the employee hired on July 25
was a summer employee.
The record does not show personnel changes between
July 31 and November 7, but it shows that as of November
7, Polytech, Incorporated, employed a total of 12
nonsupervisory employees and its original supervisor. One
of the former Polytech Company employees left Polytech,
Incorporated, during that period but another had been
hired. Of the four permanent employees who had never
previously worked for Polytech Company and were
employed as of July 31, only one remained on its payroll on
November 7.
It would thus appear that of Respondents' permanent
employees, on July 21 or 22 and on July 31, a majority had
previously worked for Polytech Company. Moreover, the
record shows considerable stability of employment among
the former Polytech Company employees with substantial
turnover among the employees who had no prior experi-
ence with Polytech Company.
While the Board has held it relevant to consider the
composition of the work force on the date of the Union's
request,20 the question to be answered is not whether the
Union represented a majority of the employees on the date
of its demand, but whether Polytech, Incorporated,
employed substantially the same employee unit for which
the Union had been recognized by Polytech Company.
Bearing in mind that Polytech, Incorporated, undertook to
hire as many former Polytech Company employees as it
could, that these employees became the stable nucleus of its
work force, that shortly before and shortly after the Union's
demand a majority of its employees were former employees
of Polytech Company, and that the new employees
employed during the period between July 21 and 31 when
the exact day-to-day composition of the work force is
unknown do not appear to have remained long with it, I
find that Polytech, Incorporated, employed substantially
the same work force as Polytech Company.21
the respondent subcontracted all of the production work I find that case
distinguishable on its facts
19 All classifications were manned as of this date and thereafter
20 Lloyd A Fry Roofing Co, Inc, 176 NLRB No 136.
21 Here, unlike Tallakson Ford, Inc, 171 NLRB No 67, and Thomas
Cadillac, Inc, 170 NLRB No 92, affd 414 F.2d 1135 (CA D C.),
Respondent sought to employ as many of the former employees of
Polytech Company as McGowan could find who were willing to work for
him He did not seek deliberately to reconstitute the work force or decide
to reject former employees on the basis of their past performance with their
former employer The changes in the employee unit thus were similar to
POLYTECH, INCORPORATED 991
Having found that Polytech, Incorporated, continued
essentially the same operation with essentially the same
employee unit as Polytech Company, I find that it was
obligated to bargain with the Union as the representative of
the employees in the unit stipulated as appropriate.
Although Bagwell's demand upon McGowan was to honor
the Union's contract with Polytech Company, McGowan's
testimony makes it clear that he refused both to honor the
contract and to recognize the Union as representative of his
employees. Accordingly, I find that Polytech, Incorporated,
refused to bargain with the Union in violation of Section
8(a)(5) of the Act.22
The question remains whether Respondents' refusal to
honor the contract also violated Section 8(a)(5) of the Act
as the General Counsel contends. That question was
answered negatively by the Board in Rohhk, Inc., 145
NLRB 1236. Since that decision, the question has been
raised in several additional cases in which the Board for
varying reasons found it unnecessary to decide the issue.23
One of these cases was remanded to the Board for further
consideration of this issue by the Court of Appeals for the
District of Columbia,24 and was joined with several other
pending cases raising the issue for purposes of oral
argument which has been heard by the Board. The Board
has not yet issued its decision in any of these cases or
several others that have arisen in the interim.
The arguments for and against the General Counsel's
contention have thus been extensively briefed and argued
before the Board, and there is little to be said on this issue
of which the Board is not cognizant. The fact remains that
while the Board may be considering a change in the
position taken in Rohlrk, it has not yet announced any
change, and Rohlrk continues to represent the Board's
position. In these circumstances, it suffices to say that I
regard the Board's decision in Rohhk as controlling until
modified or reversed.
Accordingly, I find that Polytech, Incorporated, did not
violate Section 8(a)(5) of the Act by refusing to honor the
agreement between Polytech Company and the Union.
B The Alleged Violations of Section 8(a)(1) of the
Act
1. The July discussion
At some point in July after Polytech, Incorporated, began
to operate but apparently before Bagwell's first visit to the
plant,25 McGowan discussed benefits with several employ-
ees. McGowan asked the employees for suggestions as to
those which flow from normal turnover which does not affect a union's
representative status
22 Respondents contend that they should be relieved of any obligation
to bargain with the Union because of Bagwell's threat to McGowan on
August 4 However, McGowan refused to recognize the Union on July 23
and again on August 4 before Bagwell threatened McGowan The threat
was not the cause of the refusal to bargain and it was not prompted by the
refusal to bargain but by McGowan's attempt to bar Bagwell from the
production area While Bagwell's threat cannot be condoned, it could not
relieve Respondents of all further obligation to bargain with the Union, but
at most could justify a refusal to deal with the Union through Bagwell until
assurances were given that Bagwell would refrain from further similar
conduct
23 Rinker Materials Corp, 162 NLRB 1670, Valleydale Packers, Inc, of
Bristol, 162 NLRB 1486, enfd 402 F 2d 768 (C A 5), Glenn Goulding,
the kinds of benefits they wanted, told them he would
welcome any ideas they had, and said he would meet with
them and consider their suggestions . During the discussion
either McGowan or one of the employees proposed that
they have a suggestion box, and McGowan took the
position that it was a good idea and a reasonable thing.26
Several other matters were discussed , some of which were
raised half in jest . 27 Insofar as the record indicates,
McGowan made no commitments at this time . McGowan
testified that at the time of this discussion the thought of
union activities did not enter his mind.
The General Counsel contends that McGowan's encour-
agement of an open discussion with the employees of the
benefits they desired and his approval of the suggestion box
constituted implied promises of benefits to employees
indicating to them that favorable attention would be given
to their suggestions at a time when the Union's status as
bargaining representative was being challenged.
This contention would be well taken if the challenged
conduct occurred in the context of a known union
organizing campaign or attempt to gain recognition.
However, insofar as the evidence shows, the discussion at
issue occurred before Bagwell visited McGowan's plant,
and there is no indication that the question of union
representation had been raised with McGowan by anyone
before Bagwell's visit . In these circumstances , I am inclined
to believe McGowan's testimony that he had no thought of
union activities at the time of this discussion. Rather it
would appear that McGowan was simply interested in
discovering the views and wishes of his employees. While it
may well be that McGowan's conduct constituted a further
violation of his bargaining obligation in that he had an
affirmative duty to raise these matters with the Union
rather than the employees in view of their past representa-
tion, I do not find that this discussion was intended by
McGowan or was likely to be construed by the employees
as a promise of benefit to the employees to discourage their
union activities. Accordingly, I find that McGowan did not
independently violate Section 8(a)(1) of the Act during the
last week in July as alleged in the complaint.
2. The August 4 meeting
On August 4, immediately after Bagwell left the plant,
McGowan became aware that the employees had over-
heard the loud exchanges between Bagwell and him, and he
noticed that work had stopped and the employees were
standing around in groups talking. McGowan called an
impromptu meeting in the lunchroom to try to calm the
d/b/a Fed-Mart, 165 NLRB 202, Hackney Iron & Steel Co, 167 NLRB No
84, Michaud Bus Lines, Inc, et at, 171 NLRB No 21
21 International Chemical Workers Union, etc v N L.R B, 395 F 2d 639,
remanding Hackney Iron & Steel Co, supra
25 While the date of this discussion was not established , McGowan
identified Sue Jourdain , Rosalie Engler, and Jim Mansell as probable
participants As Rosalie Engler was hired on July 21 and Jim Mansell left
after I day on July 21 or 22, it appears that this discussion occurred on
July 21 or 22 and before Bagwell's first visit to McGowan
26 McGowan, who was the only witness who testified to this discussion
testified that he believed Sue Jourdain made the proposal but that he might
have made it or that it might have come uPjointly in discussion
27 Only one, a proposal for group automobile insurance , was described
by McGowan in his testimony
992 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
employees. Mrs. McGowan and Supervisor Iler were also
present.
McGowan told the employees that he assumed they had
heard what had happened but there was no need for
concern.28 He told them that Bagwell had been there and
had said that they should be represented by the Union.
McGowan explained that the question had been taken to
the NLRB and an investigator was scheduled to visit him
the next week. He expressed the opinion that he had simply
bought the assets of Polytech Company, but that the
question was complex, would depend on what guidelines
were used, and would ultimately be decided by the Board.
McGowan pointed out that he had just started opera-
tions, that he was still struggling to get operations running,
and that the last thing he could tolerate and that he thought
they would want was a work stoppage or a strike.
McGowan said that if he felt that the people wanted it and
were best served by it he could accept the terms that
Bagwell offered and they would be back at work. Some
employees interrupted to say that they did not want that.
Apparently someone suggested a vote, but McGowan
discouraged it or changed the subject.
The employees then asked a number of questions about
the benefits they would receive. According to McGowan he
tried to avoid questions about specific benefits because his
only purpose was to calm the employees and get them back
to work. However, he told them that "it was not my
intention to take things away from them that they had once
had in the past," and that he was not about to penalize
them but that he did not want to discuss specific things. He
added that he needed to hire and keep good people and that
whatever was necessary would be provided. He also said
that the enterprise was a team effort and that with or
without the Union he would try to be fair Apparently in
response to questions about specific benefits, he told them
that he recognized that "all these things should be done"
In response to questions of several employees about
benefits McGowan answered that he would like to do for
them as much as he could but that it would all take time
and organization. With respect to hospitalization, McGow-
an said that he would like to get it for them and that he
would do so as soon as possible but that it would take time
to organize.
During the meeting one of the employees said that if they
could receive the benefits and paid holidays a union would
not be necessary, and Mrs. McGowan replied that in her
own personal opinion that was correct and that if they
could receive their benefits they would not need a union
The General Counsel contends that McGowan conveyed
to employees the impression that he intended to provide the
employees with benefits at least equal to what they would
have if the Union bargained for them, indicating that they
had no need for the Union, thereby making promises of
benefit tending to discourage union activity. The General
Counsel contends further that Mrs. McGowan, who is
conceded to have been an agent of Polytech, Incorporated,
created the impression that it would provide benefits at
least equal to what the Union would provide if the
employees chose not to support the Union. Respondents
contend that the statements of Mr. and Mrs. McGowan
were protected free speech.
Examination of McGowan's statements indicates that he
was not entirely consistent in his remarks to the employees.
While he told the employees that he did not want to discuss
specific things and make no concrete offers of specific
benefits, he also told them that he wanted to provide what
was necessary to hire and keep good people and did not
intend to take things away from them that they had in the
past. Thus despite his reluctance to discuss specific benefits,
McGowan indirectly conveyed to employees that he was
prepared to grant them benefits to make them content with
their jobs and, more concretely, to those who had worked
for Polytech Company, he conveyed a basis to conclude
that their benefits would at least be equal to what they had
formerly received These statements went beyond what
McGowan had told the employees before July 23, when he
asked for suggestions and offered to discuss them with
employees. Coming on the heels of his refusal to recognize
the Union or honor its contract and in the face of ensuing
employee unrest, the conclusion cannot be avoided that
McGowan promised the employees for the first time that
their benefits would at least be equal to those under the
contract between Polytech Company and the Union in
order to discourage them from giving their support to
Bagwell's efforts to induce Respondents to recognize the
Union and to honor the contract.
Mrs. McGowan's statement added to this effect. While
the question asked her and her response were not specific as
to what was meant by "benefits," in the context of the
discussion which preceded them, the evident reference was
to the benefits which had been received by the employees
from Polytech Company. The question reflected that
McGowan's message had been understood by the employee
who asked it as intended to discourage union activity, and
Mrs. McGowan's reply confirmed that understanding.
Accordingly, I find that the remarks of Mr. and Mrs.
McGowan on August 4 conveyed promises of benefit to
employees to discourage them from engaging in union
activities in violation of Section 8(a)(1) of the Act.
IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES
UPON COMMERCE
The activities of the Respondents set forth in section III,
above, occurring in connection with Respondents' opera-
tions described in section I, above, have a close, intimate,
and substantial relationship to trade, traffic, and commerce
among the several States and tend to lead to labor disputes
burdening and obstructing commerce and the free flow of
commerce.
V. THE REMEDY
Having found that Respondents violated Section 8(a)(5)
and (1) of the Act, I shall recommend that they cease and
desist therefrom and take certain affirmative action
designed to effectuate the policies of the Act.
Upon the basis of the above findings of fact and the
entire record in this case, I make the following:
28 McGowan and Mrs Jourdain testified as to this meeting While I have credited both of them
McGowan's version was more detailed, neither contradicted the other and
POLYTECH, INCORPORATED 993
CONCLUSIONS OF LAW
1. Polytech, Incorporated, and Terence McGowan
d/b/a Polytech, Incorporated, are employers engaged in
commerce within the meaning of Section 2(2), (6), and (7)
of the Act.
2. District No. 9, International Association of Machin-
ists and Aerospace Workers, AFL-CIO, is a labor
organization within the meaning of Section 2(5) of the Act.
3. All employees employed in the making, erecting,
assembling, installing , maintaining, dismantling , or repair-
ing all dies, machinery or parts thereof, and all other
production and maintenance employees at the Overland,
Missouri, plant of Polytech, Incorporated, but excluding all
clerical employees, office employees, part- time porters,
guards and supervisors as defined in the Act, constitute a
unit appropriate for purposes of collective bargaining
within the meaning of Section 9(b) of the Act.
4. On July 23, 1969, and at all times material thereafter,
the Union has been the bargaining representative of all
employees in the appropriate unit within the meaning of
Section 9(a) of the Act.
5. Respondent Terence McGowan, d/b/a Polytech,
Incorporated , is a successor to Polytech Company and
Respondent Polytech , Incorporated , is a successor to
Respondent Terence McGowan , d/b/a Polytech , Incorpo-
rated , and as successors , each was obligated to recognize
and bargain with the Union.
6. By refusing to recognize and bargain with the Union
as representative of its employees on July 23, 1969, and
thereafter , and by promising employees benefits on August
4, 1969 , to discourage them from engaging in union
activities , Respondents have engaged in and are engaging
in unfair labor practices affecting commerce within the
meaning of Sections 8(a)(5) and (1) and 2(6) and (7) of the
Act.
[Recommended Order omitted from publication.]