Rain-Ware, Inc.

National Labor Relations Board - Board Decisions

Jul 30, 1982

263 N.L.R.B. 50 (N.L.R.B. 1982)

DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Rain-Ware, Inc. and Teamsters Local Union No.
135, a/w International Brotherhood of Team-
sters, Chauffeurs, Warehousemen and Helpers
of America, and Local 41, Sheet Metal Workers
Union, a/w Sheet Metal Workers International
Association, AFL-CIO. Cases 25-CA-12646-1
and 25-CA-12646-2
July 30, 1982
DECISION AND ORDER
BY CHAIRMAN VAN DE WATER AND
MEMBERS FANNING AND ZIMMERMAN
On December 28, 1981, Administrative Law
Judge Robert A. Giannasi issued the attached De-
cision in this proceeding. Thereafter, Respondent
filed exceptions 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
and to adopt his recommended Order, as modified
below.
The Administrative Law Judge concluded that
Respondent violated Section 8(a)(l) of the Act by
discharging Supervisor Tom Parrish. We find merit
in Respondent's exceptions to the Administrative
Law Judge's conclusion.
In our recent decision in Parker-Robb Chevrolet,
Inc., 262 NLRB 402 (1982), we held that the pro-
tection of the Act does not extend to supervisors
who are disciplined or discharged as a result of
their participation in union or concerted activity.
In so doing, we overruled those cases which held
that a violation is established when the discipline or
discharge of a supervisor is an "integral part" of an
employer's pattern of unlawful conduct directed
against employees, the theory on which the Ad-
ministrative Law Judge relied in finding Parrish's
discharge unlawful. Accordingly, we conclude, for
the reasons fully set forth in Parker-Robb, that
I Respondent has excepted to certain credibility findings made by the
Administrative Law Judge. It is the Board's established policy not to
overrule an administrative laws judge's resolutions with respect to credi-
bility unless the clear preponderance of all of the relevant evidence con-
vinces us that the resolutions are incorrect. Standard Dry Wall Products,
Inc., 91 NLRB 544 (1950), enfd. 188 F.2d 362 (3d Cir. 1951). We have
carefully examined the record and find no basis for reversing his findings.
We also find totally without merit Respondent's allegations of bias and
prejudice on the part of the Administrative Law Judge, since we do not
perceive any evidence that the Administrative Law Judge prejudiced the
case, made prejudicial rulings, or demonstrated a bias against Respondent
in his analysis or discussion of the evidence.
263 NLRB No. 8
there is no basis for finding the discharge of Super-
visor Parrish unlawful. 2
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor Re-
lations Board adopts as its Order the recommended
Order of the Administrative Law Judge, as modi-
fied below, and hereby orders that the Respondent,
Rain-Ware, Inc., Indianapolis, Indiana, its officers,
agents, successors, and assigns, shall take the action
set forth in the said recommended Order, as so
modified:
1. Substitute the following for paragraph 2(a):
"(a) Offer Mike Jones, John Cecil, Jeff McGuire,
and Rick Rhodes immediate and full reinstatement
to their former jobs or, if those jobs no longer
exist, to substantially equivalent positions, without
prejudice to their seniority or any other rights or
nrivileges previously enjoyed, and make them
whole for any loss of pay suffered by them as a
result of the discrimination practiced against them,
in the manner described above in the section enti-
tled 'The Remedy."'
2. Substitute the attached notice for that of the
Administrative Law Judge.
2 See also Roma Baking Company, 263 NLRB 24 (1982).
APPENDIX
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
After a hearing at which all sides had an opportu-
nity to present evidence and state their positions,
the National Labor Relations Board found that we
have violated the National Labor Relations Act, as
amended, and has ordered us to post this notice.
WE WILL NOT interrogate our employees
about union activities and threaten them with
reprisals if they select a union.
WE WILL NOT lay off or otherwise discrimi-
nate against our employees in order to discour-
age union activities.
WE WILL NOT in any like or related manner
interfere with, restrain, or coerce our employ-
ees in the exercise of the rights guaranteed
them under Section 7 of the Act.
WE WILL offer Mike Jones, John Cecil, Jeff
McGuire, and Rick Rhodes immediate and full
reinstatement to their former jobs or, if those
jobs no longer exist, to substantially equivalent
positions without prejudice to their seniority
or other rights and privileges, and WE WILL
50
RAIN-WARE, INC.
make them whole for any loss of pay suffered
by them as a result of the discrimination prac-
ticed against them, with interest.
RAIN-WARE, INC.
DECISION
STATEMENT OF THE CASE
ROBERT A. GIANNASI, Administrative Law Judge:
This case was heard on May 19 and 20 and July 27 and
28, 1981, in Indianapolis, Indiana. The consolidated com-
plaint, as amended, alleges that Respondent violated Sec-
tion 8(a)(1) of the National Labor Relations Act, as
amended, herein called the Act, by threatening and inter-
rogating employees and creating the impression of sur-
veillance and violated Section 8(a)(3) and (1) of the Act
by discriminatorily terminating or laying off five employ-
ees and refusing to reinstate them because of their union
and protected activities. Respondent denies the substan-
tive allegations of the complaint. All parties filed briefs.'
Based on the entire record in this case, including the
testimony of the witnesses and my observation of their
demeanor, I make the following:2
FINDINGS OF FACT
I. THE BUSINESS OF RESPONDENT
Respondent, an Indiana corporation which maintains
its principal office and place of business in Indianapolis,
Indiana, is engaged in the manufacture, sale, and distribu-
tion of gutters, downspouts, and related products.
During a representative I-year period, Respondent sold
and shipped goods valued in excess of $50,000 directly to
customers located outside the State of Indiana. Accord-
ingly, I find, as Respondent admits, that Respondent is
an employer engaged in commerce within the meaning
of Section 2(2), (6), and (7) of the Act.
t Prior to the hearing, the Acting Regional Director withdrew those
portions of the consolidated complaint which alleged a refusal to bargain
and sought a bargaining order remedy based on the Charging Party's ma-
jority status. The withdrawal followed the Charging Party's request to
withdraw the charges underlying these allegations. At the hearing, coun-
sel for the General Counsel stated that he was not seeking a bargaining
order in this case The Charging Party disagreed with the General Coun-
sel's position, and it urged, both at the hearing and in its brief, that a bar-
gaining order should issue to remedy Respondent's unfair labor practices.
The General Counsel has complete and discretionary authority to con-
trol the scope of the complaint in Board hearings. The Charging Party,
having caused the withdrawal of the bargaining remedy allegations of the
complaint, was not in a position to resuscitate them. The bargaining
order remedy was encompassed within the withdrawn portions of the
complaint. If there was some disagreement with the decision to withdraw
the complaint allegations, the proper recourse was for the Charging
Party to appeal the Regional Director's ruling to the General Counsel in
Washington. Having failed to do this, the Charging Party was not enti-
tled unilaterally to broaden the issues in the complaint. The Charging
Party's attempt to litigate issues involving a bargaining order remedy,
after having withdrawn the underlying charges, would have constituted a
substantive alteration of the complaint. I therefore adhere to my ruling,
made at the hearing, that authorization cards were not admissible on the
issue of majority status and that the issue of a bargaining order was not
to be litigated in this proceeding. Respondent relied on that ruling and
the matter was not fully litigated
t Based on the General Counsel's unopposed motion, the transcript in
this proceeding is hereby corrected.
11. THE LABOR ORGANIZATIONS
The Charging Party Unions (hereinafter referred to
collectively as the Union) are labor organizations within
the meaning of Section 2(5) of the Act.
Ill. THE UNFAIR I.ABOR PRACTICES
A. The Facts
Until September 10, 1980, when Respondent closed its
warehouse and laid off half of its employees, Respond-
ent's facilities included the building in which production
took place and its offices were located and two adjacent
rented spaces in another building, one of which was used
as a warehouse and retail sales dock and the other for
remodeling trucks for customers. The lease for the ware-
house was to expire on December 3, 1980.3 The lease for
the truck remodeling area expired on July 15, 1981. Re-
spondent's work force on September 9, 1980, included
one truckdriver, John Cecil; one warehouse employee,
Mike Jones; and six others, one of whom, Jim Jones,
worked primarily on the remodeling of trucks. Two em-
ployees had been hired at the beginning of April 1980
and another in the middle of that month. A fourth em-
ployee hired in mid-May, Eric Jones, was terminated for
absenteeism prior to September 9, 1980.
Respondent is related to a company called Rainflo
Continuous Guttering Inc., whose principal stockholder
is H. D. Loftiss. Loftiss is also the president and major
stockholder of Respondent. Rainflo is the parent compa-
ny of a franchising operation whose entities install gut-
tering at residences and small apartment buildings
throughout the United States. Rainflo owns about one-
third of the franchise operations. There is no complaint
allegation that Respondent and Rainflo are joint or single
employers.
A significant part of Respondent's sales is to Rainflo
franchises. Loftiss admitted that at least half of Respond-
ent's sales and most of its truck refurbishing sales are
made to Rainflo franchises. Ronald Kelsey, a former
manager of Respondent, testified that from 60 to 70 per-
cent of its gutter production was sold to Rainflo fran-
chises, most of it to franchises owned by the parent com-
pany. Kelsey also testified that "it was understood that
they [franchises owned by Rainflo] were to buy their
material from [Respondent]." Kelsey testified that up
until March 3, 1980, when he left Respondent, the
wholly owned franchises purchased their materials only
from Respondent and that he personally had possession
of the order forms and wrote them out himself for sales
to the wholly owned franchises. Both Loftiss and Oliver
Zeiher, Respondent's corporate secretary and account-
ant, denied that there were any written or oral under-
standings that the franchises were required to purchase
their materials from Respondent.
In late August, after receiving a call from employee
Mike Jones asking for assistance, Richard Compton, busi-
I Respondent notified the landlord of its intent to terminate the lease
on September 3, 1980. The lease provided for such notice to be given 90
days in advance of the termination date. The letter also stated that Re-
spondent would be willing to vacate earlier if the landlord had a tenant
available before the lease expired.
51
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
ness representative for Sheet Metals Workers, Local 41,
began an organizing effort among Respondent's employ-
ees. On August 28, Compton met with Jones and gave
him a number of blank authorizatiom cards. A few days
later, Compton held a meeting of Respondent's employ-
ees at a Ramada Inn on September 4, 1980. Jones and
five others, Jim Jones, John Cecil, Tom Parrish, Phillip
Smith, and Jeff McGuire, attended the meeting. All
signed Sheet Metal Workers authorization cards. On
Sunday, September 7, Compton obtained a Teamsters
card from John Cecil who was a truckdriver. On the fol-
lowing Monday, September 8, Compton filed an election
petition. 4
On Friday, September 5, Compton prepared a letter
signed by him and a Teamsters union official notifying
Respondent that they were authorized to represent Re-
spondent's employees and asking for recognition. That
letter was received by Respondent on September 9, a
Tuesday. On that day Manager David Farmer saw the
letter, read it, and gave it to Oliver Zeiher. President
Loftiss was out of town that day.5
That same day, September 9, Farmer came out onto
the loading dock of the plant where Tom Parrish, Rick
Rhodes, and Phillip Smith were working. According to
Parrish and Rhodes, Farmer was holding a letter and an
envelope in his hand and waving it at them. According
to Parrish, Farmer stated, "Now Dan [Loftiss] will prob-
ably just sell his stock, and move his business to Flor-
ida." After a pause, he added, "This isn't going to hurt
Dan." Parrish responded, "[W]e're not trying to hurt
Dan." Rhodes essentially corroborated Parrish. He testi-
fied that Farmer said, "I don't know why you guys are
trying to hurt Dan because it ain't going to do you no
good. He's just going to close it up and move to Flor-
ida." Rhodes noticed the name Sheet Metal Workers,
Local 41 on the envelope. Phillip Smith could not recall
this incident, but Farmer did not controvert the testimo-
ny of Parrish and Rhodes which was mutually corrobo-
rative. Both were candid and truthful witnesses and I
credit their testimony.
Later that same day, Farmer and truckdriver John
Cecil were having lunch together. Farmer told Cecil that
Loftiss had received a letter from the Union. He asked
Cecil if he knew anything about it. Cecil replied that he
was not at liberty to say anything on the subject and that
ended the discussion. Farmer did not dispute Cecil's
credible testimony on this point.
The next day, September 10, Farmer beckoned Parrish
into his office. He handed Parrish the Union's letter and
asked him to read it. Parrish did. Farmer then asked him
what he thought about it. According to Parrish's uncon-
tradicted testimony, the conversation went as follows:
I said looks like somebody's trying to get a union
in, and he nodded his head and said, "Yeah, for us
to get a letter like this, a majority of you employees
4 By that date, Compton had obtained signed cards from all of Re-
spondent's nonclerical, nonsupervisory employees.
a Loftiss testified that he spent, on the average, less than a day a week
at the plant and that he left the day-to-day operation of the plant to
Farmer.
would have had to sign union cards," and I told
him he could draw his own conclusions about that.
Then he said to me, he said he knew for a fact
that John Cecil was probably in on it, and I asked
him how he knew that and he said because Team-
sters was mentioned in the letter, and he said be-
sides that it seemed like something John and Mike
would get together and do.6
According to Respondent's manager, David Farmer,
on September 10, Loftiss approached him and notified
him of his intention to close the warehouse and to lay off
some employees. 7 Farmer testified that, although Loftiss
had complained to him about declining sales since June
1980 and had mentioned the possibility of closing the
warehouse, Loftiss did not mention the layoff of employ-
ees or a specific date for the closing of the warehouse
until September 10. On September 10, Loftiss told
Farmer the details of his plan. Farmer also asked Loftiss
about the Union's demand letter. Loftiss said that it had
nothing to do with his plans and that the matter would
be put to a vote.
Loftiss asked Farmer what was the minimum number
of employees who could be kept "and still run produc-
tion." Farmer said three employees could operate the
plant. He was asked to select the three people who
would be retained. He chose to lay off Jeff McGuire,
Tom Parrish, and Richard Rhodes. Loftiss himself decid-
ed to terminate Mike Jones and John Cecil, the truck-
driver.8
On September 10, some of the production employees
were assigned to transfer material from the warehouse
into the main plant. Employee Rhodes testified that, at
or about noon, Farmer told him to stop making deliv-
eries to the warehouse. Later, at the end of the workday,
Farmer notified Parrish and Rhodes they were no longer
needed because of lack of work. They were given their
last paychecks at this time. Apparently Jeff McGuire
was notified of his termination at the same time, although
he did not testify in this proceeding.
John Cecil, who had worked for Respondent since
July 19, 1976, was also laid off at the end of the day on
September 10, 1980. He drove Respondent's truck, de-
livering material to customers, primarily Rainflo fran-
chises, for about 75 percent of his working time. The re-
maining 25 percent of his time was spent in working at
the plant or the warehouse. While he was injured during
part of 1980, he was replaced by driver John Lundy.
6 Parrish understood the reference to "Mike" to be to Mike Jones, the
only employee by that first name.
I Farmer, who left Respondent's employment on September 20, 1980.
was a more candid and believable witness than Loftiss and I have relied
on his version of the events in which both he and Loftiss participated
leading up to the termination of September 10. I have documented the
reasons for discrediting Loftiss elsewhere in this Decision.
8 Another employee, Eric Jones, had been discharged on August 5 be-
cause of absenteeism, Farmer himself left on September 20 but was re-
placed by another manager. Of Respondent's two clerical employees,
one, Barbara Fields, was terminated in September. Farmer testified she
was fired for absenteeism. Zeiher testified she was laid off for economic
reasons. I tend to believe Farmer who was more candid and less likely to
give self-serving testimony than Zeiher.
52
RAIN-WARE, INC.
When he was laid off by Loftiss on September 10
Cecil was told that the reason was "lack of work." At
that point, Cecil asked who was going to take a trip he
was scheduled to take the next day. Cecil had already
been issued bills of lading for a delivery to Goshen, Indi-
ana, and had discussed the trip with Loftiss earlier that
day.9 Loftiss replied that Bernie Shank, a stockholder of
Respondent, would make the delivery. Cecil's check was
prepared and given to him at that time. Loftiss also told
Cecil that Respondent would be contracting out all of its
driving and asked if he were interested in performing the
work on that basis, Cecil said he was. Cecil was permit-
ted to use a van owned by Respondent until September
18 when he returned it and talked to Farmer. At that
time, he asked if Respondent had hired a truckdriver.
Farmer said he did not know. In November, Cecil re-
turned to Respondent's facility and talked to the then
manager, John Heim. Heim said that John Lundy was
doing some driving for Respondent but he asked for
Cecil's number and told him he might call Cecil if he
needed another driver. Cecil was never recalled to work.
Even after Lundy left Respondent's employ in June
1981, Respondent did not recall Cecil but rather hired
someone else who was still working at the time of the
hearing. ' o
On the afternoon of September 8, 1980, prior to the
delivery of the Union's demand letter, Loftiss had a con-
versation with Mike Jones at the warehouse and asked
him if he was interested in the manager's job. Farmer
had notified Loftiss of his intention to leave his job
shortly after Labor Day in early September. This con-
versation, on September 8, was the first time Loftiss
talked to Jones about the manager's job. '
On the morning of September 10, at or about 8 or
8:30, Loftiss came over to the warehouse and asked
Jones if he had thought about the manager's job. Jones
said he had talked to Ron Kelsey, the manager before
Farmer, and stated that he wanted the same benefits as
' He also had made a trip on September 4 to Valparasio, Indiana, and
Hastings, Michigan.
'° Cecil's candid and reliable testimony set forth above is credited.
Loftiss' contrary version of the termination interview is not credited.
Loftiss was a wholly unreliable witness whose testimony cannot be ac-
cepted on this or any other material issue in this case.
:I The above is based on the mutually corroborative testimony of
Jones and Farmer who testified that Jones was offered the job between
September I and 10. I discredit Loftiss who testified that he offered
Jones the job 2 weeks before. This would have been before Farmer even
notified Loftiss that he was leaving. Loftiss' total unreliability as a wit-
ness was shown in his contradictory and vascillating testimony about
Jones. For example, he attempted to portray Jones, who was the mot
senior and most experienced employee, as a poor worker. He claimed
that this was so in early August 1980. When he was asked why he of-
fered Jones the manager's job a few weeks later, he said, without founda-
tion and rather meekly, that Jones had improved. Actually, in early
August. Farmer had suggested a raise and a title change for Jones.
Indeed, Loftiss professed not to know if Mike Jones, his most experi-
enced employee and the one to whom he offered the manager's job, was
able to repair machinery despite clear evidence from other sources that
he was. Loftiss' testimony concerning Jones was unreliable in one other
respect. Loftiss contradicted both Jones and Farmer when he testified
that he had a notice posted about the warehouse closing prior to Septem-
ber 10. Farmer, who was the manager, would undoubtedly had known of
or seen such a notice. He did not, thus corroborating Jones to the effect
that only one such notice was posted and that was on September 10
when the warehouse was actually closed.
Kelsey. He asked for S350 per week, a company car, and
a yearly bonus. Loftiss said he could not pay that much
and offered him S230 per week. Jones refused that offer
and said he did not want the job. At this point, Loftiss
handed Jones a sheet of paper stating that the warehouse
would be closed and that customers were to be referred
to the main building. Loftiss asked Jones to post it on the
warehouse door.
Jones was laid off on September 11. Loftiss told Jones
he had other people who were interested in the manag-
er's job. Jones said he did not mind because he would
work with anyone just like he did with Farmer when he
replaced Kelsey in March or April 1980. Loftiss then
mentioned that he did not want an unhappy employee.
Jones testified that Loftiss said since "I thought that I
was worth that kind of money that he was going to let
me go out and find it, and he handed my paycheck." He
was not offered a chance to work elsewhere at Respond-
ent's facility. Jones had worked for Respondent since
1976 and was proficient in repairing all of the machines
in the plant, one of only two people who could perform
such repairs. '
On September 11, Farmer signed letters indicating that
the five terminated individuals were laid off for lack of
work and stating that they were good workers whom
Respondent would recommend to potential future em-
ployers.
B. Discussion and Analysis
1. Supervisory issues
Respondent contends that Mike Jones and Tom Par-
rish were supervisors and that therefore it could freely
discharge and coerce them without running afoul of the
Act. Parrish was listed in an "employee list and job de-
scription" as "direct labor" which was described as fol-
lows: "Includes operating any machine or doing any task
for our manufacturing operation." Jones was described
as a "will call dockman" which was defined as follows:
"Is in charge of will-call facility. All currency, inven-
tory, security, and all paperwork involved with these
and the selling of merchandise."
Jones was clearly not a supervisor. According to
Farmer, Jones, who was the only person who worked in
the warehouse, was never given the title of warehouse
manager. Jones had no employees to supervise. He had
no authority to grant time off, evaluate, or discipline em-
ployees or to effectively recommend such action. Occa-
sionally, Farmer sent employees over to the warehouse
to help Jones load trailers. When this happened, Jones
worked along with the employees, but he did not respon-
sibly direct them. His direction of employees in the load-
ing or moving of material on these occasions was simply
ministerial and a result of his being in charge of ware-
house operations.
Parrish described himself variously as leadmar or fore-
man. Farmer testified that, when he was promoted from
I' The above is based on the credible testimony of Jones who was
more detailed and candid in his testimony than was Loftiss. Loftiss sug-
gested that Jones was laid off on September 10 but it is clear from the
testimony of both Jones and Farmer that he was laid off the next day.
53
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
foreman to manager in March or April 1980, he transmit-
ted some, but not all, of his old responsibilities-but not
the title-to Parrish. However, Parrish testified that he
was given a 25-cent raise at this time and that Farmer
introduced two new employees to him and said, "This is
Tom, he's our shop foreman." He also testified that he
had five employees "underneath me."'3 Parrish was not
permitted to send employees home or grant them time
off. And the testimony concerning his one recommenda-
tion that an employee be fired shows that Farmer gave
the employee another chance before firing him. This
does not establish authority to effectively recommend by
use of independent judgment. However, Parrish did
assign people to different machines and at times did this
as a matter of "punishment." According to Parrish, he
had to "make sure everybody was working" and Farmer
told him, "[Y]ou get the production out any way you
can, and you work the people any way you want."
However, he worked alongside the other employees and
took orders from Jim and Mike Jones when he had con-
tact with them because they were more experienced than
he was. Parrish also testified that he told employees, "[I]f
you guys do your work, and you help me look good, I'll
... help you guys do easier jobs .... " He also gave
Farmer verbal evaluations of employees although it is
unclear whether they were used by Farmer for any par-
ticular purpose.
Although the issue is a close one, I am constrained to
find that Parrish was a supervisor within the meaning of
the Act. His owh testimony shows that he regarded him-
self as responsible for the production of the five employ-
ees under him. Farmer told him of his responsibilities and
introduced him to two new employees as foreman. He
assigned people to different machines, sometimes as
"punishment." He testified that he did this some 50 or 60
times over the period he was-his word-"foreman."
This was not a sporadic exercise of authority and it re-
quired independent judgment. Parrish thus had supervi-
sory authority to assign employees and to responsibly
direct them within the meaning of Section 2(11) of the
Act. Since Parrish was a supervisor within the meaning
of the Act, Respondent's allegedly coercive statements to
him were not unlawful.
2. The 8(a)(1) violations
The uncontradicted testimony shows that Respondent
violated Section 8(a)(1) of the Act when Farmer ques-
tioned employee Cecil about the Union's demand letter.
Cecil was not told the reason for the questioning or
given assurances against reprisals. His response was in-
hibited. Cecil said he was not at liberty to say anything
about the letter. The questioning was thus coercive and
unlawful.
Farmer also threatened reprisals when he told Parrish
and Rhodes that Loftiss would close the Indianapolis fa-
cility to avoid the Union. Even if, as Parrish testified,
18 Documentary evidence indicates that Phillip Smith, one of the five
employees supposedly "under" Parrish, was making the same as Parrish
and that Parrish received his raise in February 1980, not in April as he
testified. The four other employees supposedly under Parrish were the
four new people hired in April and May 1980. They earned 25 cents per
hour less than Parrish and Smith.
Farmer said only that Loftiss "probably" would close
the facility, the threat was plain. It was not based on a
supposed business judgment or circumstances beyond the
employer's control. It was stated simply as a response to
the organizational effort. The effect of the statement was
to coerce employee Rhodes and others to whom he may
have repeated the statement. See Ludwig Motor Corp.,
222 NLRB 635, 636 (1976); Mangurian's, Inc., 227 NLRB
113 (1976).
3. The layoffs
Respondent's layoff of Mike Jones, Cecil, Parrish,
Rhodes, and McGuire on September 10 and 11 was pre-
cipitous and obviously in response to the Union's letter,
received on September 9, which notified Respondent
that a majority of its employees supported the Union.
Respondent's manager threatened employees with clo-
sure of the operation if the Union came on the scene and
he effectively identified two employees, Mike Jones and
John Cecil, as leaders in the organizational effort. The
very day Loftiss returned to the office from an out-of-
town trip he ordered the closing of the warehouse and
the layoff of all but three employees. According to
Farmer's credited testimony, this was the first time that
Loftiss had spoken about layoffs or set a date for the
closing of the warehouse whose lease had another 3
months to run. Materials were hurriedly moved from the
warehouse to the main plant on September 10. Driver
John Cecil's trip scheduled for September 11 was taken
away from him amd given to a stockholder.
The layoff of Cecil was clearly discriminatory. He had
been identified as one of the two leaders in the union
effort and was a highly regarded employee. He was laid
off precipitously and without warning I day after receipt
of the Union's demand letter. He had been prepared to
leave on a scheduled trip the next morning. Moreover,
Cecil made several efforts to return to work, but Re-
spondent hired another driver instead. It is fairly obvious
that a prima facie case of discrimination against Cecil has
been established.
Loftiss' testimony that John Cecil quit his employment
before the onset of the Union is not credible. Indeed, Re-
spondent does not make this contention in its brief. Re-
spondent prepared a letter of recommendation after
Cecil's termination describing it as a layoff. Actually,
Loftiss offered vague and shifting reasons for the termi-
nation. At first he alluded to Cecil's "soldiering" on the
job, a description completely at odds with the concession
made both at the hearing and in Cecil's letter of recom-
mendation that he was a good employee. Loftiss later ex-
plained, "he quit but he kept coming to work" and at
one point suggested that he fired Cecil because he could
not wait for Cecil to decide when to quit. Loftiss' testi-
mony not only refutes any suggestion that Cecil quit his
employment and exposes his unreliability as a witness,
but also strengthens the inference of discrimination.
In its brief, Respondent takes the position that Cecil's
layoff was caused by a downturn in business, particularly
a loss in the trucking operation. This argument is wholly
unpersuasive. First of all, the trucking operation always
lost money and continued to lose money even after Cecil
54
RAIN-WARE, INC.
left. More importantly, Cecil was replaced by another
truckdriver, John Lundy, and, when Lundy left, still an-
other person was hired. Cecil was not offered the job. It
is apparently true that Respondent utilized Lundy on a
mileage and per diem basis after Cecil's termination. But
this provides no defense. Respondent still had need for a
driver. And Cecil made it quite clear, both at the time of
his termination and afterward when he spoke to then
Manager Heim, that he would be willing to work on the
same basis as Lundy-as a contract driver. In these cir-
cumstances, it is clear that Respondent has not shown
that Cecil would have been laid off even in the absence
of union activities.
Since Cecil's layoff was clearly discriminatory, it sheds
light on the motive for Mike Jones' layoff which was
also effectuated by Loftiss. Indeed, just, as in Cecil's
case, the layoff of Jones, the other employee identified as
a union leader, was discriminatory whether or not Re-
spondent had a need to lay off employees as a general
matter. His selection was discriminatory. He was the
most experienced and highly regarded employee, having
been offered the manager's job shortly before he was laid
off. He was one of two people who could repair machin-
ery. After he turned down the manager's job he ex-
pressed his willingness to continue as an employee. Yet
Loftiss released him and did not even give Farmer the
opportunity to retain him. It is inconceivable that Mike
Jones would have been laid off absent the Union's
demand letter and the belief that he was a leader in the
organizational effort.
Respondent's reasons for terminating Jones-apart
from its general reason of decline in business-are unper-
suasive. The date for the closing of the warehouse where
Jones worked was clearly advanced because of the
Union's demand. Both Farmer's testimony and the move-
ment of materials from the warehouse on September 10
support this finding. In any event, the closing of the
warehouse would not have called for the termination of
Jones since he could have worked in the plant. Accord-
ingly, Respondent has not shown that Mike Jones would
have been laid off in the absence of union activities.
Respondent's clearly discriminatory treatment of Cecil
and Jones, together with the timing and precipitous
nature of the remaining layoffs, is more than sufficient to
establish a prima facie case of discrimination for all of the
layoffs.
Parrish's layoff was one of five effectuated at the same
time and for the same reason. He was not given a sepa-
rate reason for his layoff or told that he was being treat-
ed differently than the other victims of the layoff be-
cause of his supervisory status. He was swept along with
the other employees in the unlawful effort to defeat the
Union. Thus, even though Parrish was a supervisor, I
find that his layoff was an integral part of Respondent's
effort to stifle the protected activities of its employees
and is therefore violative of Section 8(aX1) of the Act.
See Trustees of Boston University, 224 NLRB 1385, 1393
(1976); Pioneer Drilling Co., 162 NLRB 918, 923 (1967),
enfd. in pertinent part 391 F.2d 961 (10th Cir. 1968).
Respondent argues that all of the layoffs were based
on economic exigencies, relying on the testimony of Lof-
tiss, who made the layoff decision, and two pieces of
documentary evidence. The first was a list of monthly
sales figures over a 22-month period from June 1979 to
March 1981. The second was a list of 12 unaudited
monthly income statements from December 1979
through November 1980. As I have indicated, Respond-
ent's economic defense does not apply to the layoffs of
Cecil and Jones because they would have been retained
in any event. However, I do not find Respondent's evi-
dence persuasive in establishing that the remaining indi-
viduals would have been laid off even in the absence of
union activities.
The income reports show no particular trend in the
months before the September 10 layoffs. For example,
profits were recorded in December 1979, but January
1980 showed a loss. Profits were recorded thereafter
until April when a huge loss was reflected which
brought the yearly figures into the red. However, the
May figures improved to such a degree that, as of May
31, the 6-month year-to-date figures showed a profit of
$25,988.98. These figures did not seem to concern Re-
spondent because it hired four new employees in April
and May. June showed a profit and, although July
showed a slight loss, the August figures showed a profit.
The 9-month period ending August 31 showed a profit
of $60,101.28. Thus, the operations from June through
August 1980-the period immediately prior to the
layoff-added nearly $35,000 in profits to the yearly fig-
ures.14 Even the September figures showed a profit. Oc-
tober showed a loss, but November showed a profit, and
the year ended with a profit of $66,945.90. There was no
evidence concerning earnings in prior years or in subse-
quent years which could be used for comparison pur-
poses. Loftiss did not testify that he looked at the income
statements, nor did he explain how he believed they re-
quired such extensive and precipitous layoffs as took
place on September 10. However, if he had looked at the
income statements, he would have found that profits had
increased over the 3 months immediately preceding the
layoff decision, hardly a cause for laying off half of his
work force only a few months after having hired four
new employees.
The gross sales figures set forth in Respondent's Ex-
hibit 12 are likewise unclear. While figures for 22 con-
secutive months are shown, only 3 months prior to the
layoff can be compared to the prior year's figures. The
figures show a rather steady decline in sales after Janu-
ary 1980. The January figures were down over 50 per-
cent from the month before. And, although there was an
upswing in March, sales after January 1980 never again
reached the levels achieved from June through Decem-
ber 1979. Yet in the fiscal year beginning December 1,
1979, and ending November 30, 1980, Respondent earned
some $66,000. By the end of May 1980 it had a cumula-
tive profit of $25,000 for the year and it had hired four
employees in the prior 2 months. Surely, any decline in
sales through May 1980 did not concern Respondent.
14 The above is based on a comparison of the year-to-date figures for
the end of May and the end of August. Analysis of the monthly figures
shows even a greater gain in profits. June showed a profit of over
$S4,000; July showed a loss of about S8,000; and August showed a profit
of over S19,000--a total profit of about S60,000.
55
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Nor is there any reason to believe that the decline in
sales from June through August 1980 was especially
acute. In 2 of those months the sales figures were higher
than in May, and all 3 months had higher sales than in
April. The August sales figures-the ones most recent at
the time of the layoff-actually showed an increase from
the July figures. Moreover, Respondent had more sales
in August than in any month since December 1979. July
was the worst month of the three. Those figures would
have been available at the beginning of August. Yet no
layoffs were effectuated or contemplated in August.
Indeed, Respondent was considering raises for its em-
ployees in that month. Moreover, operations in the 3
months prior to the layoff added profits to the yearly fig-
ures. It is true that the June through August 1980 sales
were off from similar months in 1979, but no figures
were submitted for months prior to June 1979. Thus, it is
impossible to determine whether the entire year's sales
were off from the prior year or whether the June
through August 1980 figures showed a precipitous de-
cline from the prior year's totals.
Far more significant than the inconclusive sales and
income figures immediately prior to the layoff is the fact
that Respondent had never before had to resort to lay-
offs, even in slow periods, according to the uncontradict-
ed testimony of Supervisor Parrish. In addition, Re-
spondent has not submitted any evidence from which it
could be deternined that its employee work force fluctu-
ated with changes in gross sales or monthly profits.
Indeed, Respondent submitted no evidence on the nature
of its work force in prior years and did not even submit
sales figures prior to June 1979 or income statements
prior to December 1979 so that comparisons could be
made. Accordingly, I find Respondent's documentary
evidence does not establish that Respondent's economic
condition required the precipitous layoffs of September
10 and 11.
Loftiss' testimony convinces me that the economic de-
fense he espoused was a pretext. As I have already docu-
mented, much of his testimony on other issues was unre-
liable. His testimony concerning the layoff decision,
which was made exclusively by him, was equally unreli-
able. His testimony that he planned the layoffs in August
1980-before the Union's organizing campaign-was re-
futed by his manager, Farmer. Loftiss testified that a
document clearly utilized to consider raises for employ-
ees was used to record Farmer's recommendations as to
who should be laid off. This is contrary to Farmer's tes-
timony that he was not asked for such recommendations
prior to September 10. Loftiss' attempts to explain why
the layoffs and the closing of the warehouse were not ef-
fectuated before September 10 were vague and dissem-
bling. In addition, his demeanor exposed his lack of
credibility. His poise at the beginning of his testimony
steadily diminished until, at one point late in his testimo-
ny, when faced with incongruities in his story, his ten-
sion surfaced and he attempted to light a cigarette. I con-
clude that none of Loftiss' testimony on any crucial
point in this case is believable. To the extent that Farmer
and Zeiher testified that the layoffs were based on bad
business conditions, I must discount this testimony as
conclusory and uninformed. Loftiss made the decision to
lay off employees on his own. Zeiher and Farmer did
not participate in that decision. They either speculated
on Loftiss' reasons or accepted the pretextual reason of-
fered by him. Finally, it may well have been true that, as
Farmer testified, Loftiss generally discussed declining
sales and his desire to close the warehouse in the summer
of 1980. But Farmer was quite clear in testifying that
Loftiss did not decide on the particular date to close the
warehouse or whether there should be any layoffs until
September 10. In these circumstances, Respondent has
failed to show the layoffs of September 10 and 11 would
have occurred in such numbers and with such alacrity in
the absence of the union activities which led to the
Union's demand letter received by Respondent on Sep-
tember 9.
Respondent also points to post-termination evidence
such as the fact that sales in September declined from
the month before, that employees spent some time in
September and October in nonproductive tasks, and that
it was able to function with only three production em-
ployees after the layoff. These factors are unpersuasive.
The economic situation must be assessed at the time of
the layoff. There is no evidence that, in reaching his de-
cision, Loftiss relied on September sales figures or the
fact that employees had nothing to do. Indeed, employ-
ees testified that they were busy prior to the layoffs. Re-
spondent's decision to operate with three employees was
a result of its unlawfully motivated response to the
Union's demand. Loftiss asked Farmer what was the
minimum number of employees who could run produc-
tion and Farmer responded three. The fact that Respond-
ent continued to operate with only three production em-
ployees after the layoff would be more persuasive if the
documentary evidence and Loftiss' testimony gave some
indication that such a reduction was motivated by eco-
nomic reasons. However, as I have indicated, such evi-
dence and testimony are insufficient to overcome the ob-
vious inference that Respondent decided to reduce it
work force only after the Union came on the scene. Per-
haps there was some fat in the work force prior to the
layoffs and Respondent was able to curtail production in
part because of the control it has over its purchasers and
the inventories they accumulate. Since Respondent has
the burden of establishing an economic defense in light
of the General Counsel's overwhelming evidence of dis-
crimination, I cannot accept the simple fact that it was
able to operate at a lower level after the layoffs as the
defense for a layoff which was not adequately explained
by contemporaneous documentary and testimonial evi-
dence. However, if Respondent continues to have need
for only three production employees, this fact may be
considered in the compliance phase of this proceeding
where Respondent can argue that Parrish, Rhodes, and
McGuire would have been laid off at some point after
September 10 in the normal course of events. It is settled
law that, in such situations, it rests upon the employer,
whose conduct has been found unlawful, to disentangle
the lawful consequences of its misconduct from the un-
lawful ones. See Remington Rand, Inc. v. N.L.R.B., 94
F.2d 862, 872 (2d Cir. 1938).
56
RAIN-WARE, INC.
CONCLUSIONS OF LAW
I. By interrogating employees about union activities
and threatening them with reprisals if they selected a
union to represent them, Respondent violated Section
8(a)(l) of the Act.
2. By laying off employees Mike Jones, John Cecil,
Jeff McGuire, and Rick Rhodes for discriminatory rea-
sons and to discourage union activities, Respondent vio-
lated Section 8(a)(3) and (1) of the Act.
3. By laying off Supervisor Tom Parrish as an integral
part of the above layoffs, Respondent violated Section
8(aX)(1) of the Act.
4. The above violations constitute unfair labor prac-
tices affecting commerce within the meaning of Section
2(6) and (7) of the Act.
5. Respondent has not otherwise violated the Act.
THE REMEDY
I shall recommend that Respondent cease and desist
from its unfair labor practices and post an appropriate
notice. Having found that Respondent discriminatorily
laid off the employees and individuals named above, I
shall recommend that Respondent offer them reinstate-
ment with backpay, computed as provided in F. W.
Woolworth Company, 90 NLRB 289 (1950), and Florida
Steel Corporation, 231 NLRB 651 (1977). 15
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:
ORDER 6
The Respondent, Rain-Ware, Inc., Indianapolis, Indi-
ana, its officers, agents, successors, and assigns, shall:
I. Cease and desist from:
(a) Interrogating employees about union activities and
threatening them with reprisals if they select a union to
represent them in collective bargaining.
II See, generally. Isis Plumbing Heatring Co., 138 NLRB 716 (1962).
'6 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, conclusions, and recommended Order herein shall, as provided
in Sec. 102.48 of the Rules and Regulations, be adopted by the Board and
become its findings, conclusions, and Order, and all objections thereto
shall be deemed waived for all purposes.
(b) Laying off or otherwise discriminating against em-
ployees in order to discourage union activities.
(c) In any like or related manner interfering with, re-
straining, or coercing employees in the exercise of the
rights guaranteed them under Section 7 of the Act.
2. Take the following affirmative action designed to ef-
fectuate the policies of the Act:
(a) Offer Mike Jones, John Cecil, Tom Parrish, Jeff
McGuire, and Rick Rhodes immediate and full reinstate-
ment to their former jobs or, if those jobs no longer
exist, to substantially equivalent positions, without preju-
dice to their seniority or other rights and privileges, and
make them whole for any loss of pay suffered by them as
a result of the discrimination practiced against them, in
the manner described above in the section entitled "The
Remedy."
(b) Preserve and, upon request, make available to the
Board or its agents, for examination and copying, all
payroll records, social security payment records, time-
cards, personnel records and reports, and all other
records necessary to analyze the amount of backpay due.
(c) Post at its Indianapolis, Indiana, place of business
copies of the attached notice marked "Appendix."1 7
Copies of said notice, on forms provided by the Regional
Director for Region 25, after being duly signed by Re-
spondent's 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 Respondent to ensure that said notices are not altered,
defaced, or covered by any other material.
(d) Notify the Regional Director for Region 25, in
writing, within 20 days from the date of this Order, what
steps have been taken to comply herewith.
IT IS ALSO ORDERED that those allegations as to which
violations were not found are hereby dismissed.
i" 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 Pursu-
ant to a Judgment of the United States Court of Appeals Enforcing an
Order of the National Labor Relations Board."
57