United Dairy Co.

National Labor Relations Board - Board Decisions

Feb 27, 1964

146 N.L.R.B. 187 (N.L.R.B. 1964)

UNITED DAIRY CO. 187
Employees may communicate directly with the Board 's Regional Office, 528 Peach-
tree-Seventh Building, 50 Seventh Street , NE., Atlanta, Georgia, Telephone No.
876-3311, Extension 5357, if they have any question concerning this notice or com-
pliance with its provisions.
United Dairy Co. and Retail , Wholesale and Department Store
Union, Dairy, Bakery and Food Workers Local 379, AFL-CIO.
Case No. 6-CA-92551. February 27, 1964
DECISION AND ORDER
On May 31, 1963, Trial Examiner George J. Bott issued his Inter-
mediate Report in the above-entitled proceeding, finding that the
Respondent had engaged in certain unfair labor practices and recom-
mending that it cease and desist therefrom and take certain affirma-
tive action, as set forth in the attached Trial Examiner's Report.
Thereafter, the Charging Party, the General Counsel, and the Re-
spondent filed exceptions to the Intermediate Report and supporting
briefs.
Pursuant to the provisions of Section 3 (b) of the National Labor
Relations Act, the Board has delegated its powers in connection with
this case to a three-member panel [Members Leedom, Fanning, and
Jenkins].
The Board has reviewed the rulings made by the Trial Examiner
at the hearing and finds that no prejudicial error was committed.
The rulings are hereby affirmed. The Board has considered the Inter-
mediate Report, the exceptions and briefs, and the entire record in
the case, and for the reasons set forth below-concerning the pro-
cedural handling of the case before hearing-has determined to dis-
miss the complaint in its entirety.
On July 2, 1962, the Union filed its charge alleging 8 (a) (1), (3),
and (5) violations, the latter including an allegation that the Re-
spondent had refused to bargain by failure to discuss with the Charg-
ing Party the decision to sell two of its plants. After consideration,
the General Counsel authorized the Regional Director to issue a com-
plaint which alleged 8 (a) (1) and (5) violations, limited, however,
to failure to bargain as to the effect on employees of the decision to
sell. The limitation on the scope of the complaint, more particularly
the "refusal to issue" a complaint on that part of the charge relating
to the failure to bargain about the decision to sell, was the subject of
a timely appeal by the Charging Party to the General Counsel.
Thereafter the Respondent executed a settlement agreement, appar-
ently after being told by the Board agent that the Regional Director
would not issue a complaint on other portions of the charge once the
settlement had been approved. The agreement itself, with appro-
priate review provision, provided for withdrawal of the existing
146 NLRB No. 16.
188 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
complaint and for "refusal to issue new complaint" in the discretion
of the Regional Director should the Charging Party fail to become
a party to the settlement.
The settlement was approved by the Regional Director on Decem-
ber 17, the complaint was withdrawn, and the Charging Party-
which did not become a party to the settlement-was advised that it
might appeal from this action on or before December 31. The Charg-
ing Party did not appeal. In the meantime, on December 29, it met
with the Respondent pursuant to the settlement agreement. At the
meeting, information concerning the terms of the June 20 sale and the
employees affected, which had been requested by the Charging Party
in July, was supplied by the Respondent. In addition, the Respond-
ent at that meeting agreed to bargain with the Charging Party con-
cerning the effects of the sale at a future time to be selected by the
latter. Thereafter, the Respondent reported these compliance steps
to the Regional Director. In a crossing letter the Regional Director
advised the Respondent to proceed with compliance inasmuch as the
Charging Party had not appealed from the "refusal to issue
complaint."
Several weeks later, on January 25, 1963, the General Counsel-
in a letter to the parties in which he stated correctly that the Charging
Party had appealed from the refusal to issue complaint on all theories
suggested, but stated erroneously that the Charging Party had also
appealed from approval of the settlement agreement to which it had
not become a party-authorized withdrawal of the settlement. The
General Counsel authorized the issuance of a new complaint that would
combine in the 8(a) (5) allegation the Respondent's failure to consult
with the Charging Party on its decision to sell as well as on the effects
of the sale. Admittedly the General Counsel's action in authorizing
withdrawal of the complaint and issuance of a new complaint-iden-
tical except for one paragraph-was not the result of a failure of the
Respondent to comply with the settlement. The General Counsel ap-
parently assumed that the Charging Party had taken the necessary
step of appealing in order to protest the settlement, and, finding merit
at this point in the Charging Party's position relating to the scope of
the complaint, determined that the entire problem should be litigated
as a whole.
The Trial Examiner saw no prejudice to the Respondent in the `lack
of precision and certainty" which, he observed, characterized the Gen-
eral Counsel's handling of the case, and therefore reached the merits
of the proceeding. He also found that an appeal by the Charging
Party from the settlement agreement would have been "needless dupli-
cation" in the circumstances. We do not agree. This is not a case
such as Tompkins Motor Lines, Inc.,' where the parties themselves,
1 142 NLRB 1.
UNITED DAIRY CO. 189
in settling part of their controversy, clearly exempted from the settle-
ment a specific issue and reserved it for future determination. Here the
Respondent had been assured by the Board agent that the settlement, if
approved by the Regional Director, would dispose of the entire matter.
This was consistent with the discretion given the Regional Director in
the agreement. The agreement also provided that, in the event the
Charging Party was not a party, the Respondent's performance under
the agreement would commence immediately upon advice that no re-
view had been requested. Nevertheless, the Charging Party was agree-
able to the Respondent's initiating compliance several days before the
expiration of the time within which it could request review. Thereby
the Charging Party implied-not that it was reserving any issue for
future determination-but that it was looking to compliance with the
settlement to remedy its controversy with the Respondent. In addi-
tion, it did not thereafter appeal the settlement. In these circum-
stances the Board's general rule is clearly applicable-not to go
behind a settlement agreement unless the Respondent has failed to
comply with it or has since engaged in independent unfair labor
practices 2 We do not see this as a case where further action on our
part-over and above the settlement agreed to by the Respondent and
acquiesced in by the Charging Party-will significantly further the
purposes of the Act. Accordingly, as the record shows compliance
by the Respondent with the settlement, including its agreement to
meet with the Charging Party and to bargain concerning the effect
of the sale on the employees, and as no independent unfair labor
practices by the Respondent have since been alleged, we shall reinstate
the settlement agreement approved December 17, 1962, and dismiss
the complaint herein 3
[The Board reinstated the settlement agreement approved Decem-
ber 17, 1962, and dismissed the complaint.]
2 Larrance Tank Corporation, 94 NLRB 352.
2In reaching this conclusion , Member Leedom also relies on his stated position (see
Town d Country Manufacturing Company, Inc ., and Town d Country Sales Company, Inc.,
136 NLRB 1022, 1028, footnote 10) that a refusal to bargain concerning an economically
motivated decision of this nature does not in any event violate the Act. The settlement
agreement , accordingly , adequately remedies the only violation which he would find herein.
INTERMEDIATE REPORT AND RECOMMENDED ORDER
STATEMENT OF THE CASE"
Upon a charge of unfair labor practices duly filed on July 2, 1962, against United
Dairy Co., herein called the Company or Respondent , the General Counsel of the
National Labor Relations Board issued a complaint and notice of hearing dated
February 19, 1963, alleging that Respondent had violated Section 8 (a) (1) and (5)
of the Act. An answer admitting certain allegations of the complaint but denying
the commission of any unfair labor practices was filed by Respondent. In its answer,
Respondent raised certain affirmative defenses based on the issuance of an earlier
complaint by General Counsel and the settlement thereof.' A hearing at which
'The procedural and substantive questions relating to the settlement of the earlier com-
plaint are discussed in section III, D, infra.
190 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
all parties were represented was held before Trial Examiner George J. Bott in
Wheeling, West Virginia, on April 1 and 2, 1963. Subsequent to the hearing, the
parties filed briefs which I have considered. '
Upon the entire record in the case and from my observation of the witnesses,
I make the following:
FINDINGS OF FACT
1. RESPONDENT 'S BUSINESS
Respondent is an Ohio corporation with its - principal office in Barnesville, Ohio,
and has plants and offices in Ohio and West Virginia. During the year just prior
to the issuance of the complaint , the Respondent received goods directly from
outside the State of West Virginia for use at its West Virginia plants valued at in
excess of $50,000 and, during the same period , shipped goods and materials from
its West Virginia plants to points outside the State of West Virginia valued at in
excess of $50,000 . Respondent concedes and I find , that it is an employer -engaged
in commerce within the meaning of Section 2(6) of the Act.
II. THE LABOR ORGANIZATION INVOLVED
Retail, Wholesale and Department Store Union , Dairy, Bakery and Food Workers
Local 379, AFL-CIO, is a labor organization within the meaning of Section 2(5)
of the Act.
III. THE UNFAIR LABOR PRACTICES
A. The sale of the Wheeling and Wellsburg plants -
Until June 20, 1962 , Respondent owned and operated three dairy ' plants located
in Wheeling, Wellsburg, and New Martinsville,' West Virginia. The Union has
represented the production and maintenance employees and route salesmen at these
three plants in a single unit since 1958 and there is no dispute about its appropriate-
ness for bargaining purposes. The most recent contract between the parties cover-
ing these plants ran from January 1, 1961 , to December 31, 1962.
On June 20, 1962, Respondent sold its Wheeling and Wellsburg plants to Ohio
Valley Dairy Products, Inc., and Ohio Valley Dairy Company. The former
changed its name to United Ohio Valley Dairy, Inc., and presently operates the
business sold by Respondent. On June 20, 1962, by a letter dated June 18, 1962,
Respondent advised the Union that it had sold its Wheeling and Wellsburg-plants
and, on June 20, notified all the employees of these two plants of their termination.
Respondent also has plants in Barnesville , Waterford, and Lodi, Ohio. The
plants at Barnesville and Lodi, Ohio, manufacture evaporated and powdered milk.
The Waterford plant mainly manufactures evaporated milk, but there is also a small
fluid processing plant in connection with the operation. The Company also has a
receiving depot in Athens, Ohio, where milk from farms is delivered, cooled, and
trucked to the Waterford plant. The New Martinsville plant is a distribution plant
where bottled milk and dairy products are brought from the Waterford fluid milk
plant and distributed to consumers.
Prior to its sale, the Wheeling plant was engaged solely in fluid milk operation.
Wheeling distributed most of its product to customers but part was trucked to Wells-
burg where the Company maintained a distribution plant. Prior to the sale of' the
Wellsburg plant, it delivered the product sent it by Wheeling to customers in its
area. There is little similarity between the operations of fluid milk plants and
evaporated and powdered milk plants.
Employees of the Barnesville, Waterford, Athens, and New Martinsville plants
are represented by the Union. Employees at Lodi are unrepresented. New
collective-bargaining contracts have recently been negotiated for the represented
plants.
Although General Counsel stipulated that Respondent was not discriminatorily
motivated in the sale of its Wheeling and. Wellsburg plants; a considerable amount
of evidence was introduced concerning the, economic factors involved in Respond-
ent's decision to sell.
The record shows that rising costs of operation were a contributing factor in the
Wheeling and Wellsburg plants becoming unprofitable over the years. While the
dollar volume of sales remained about the same, profits from operations declined.
From a profit, before taxes of $63,000 in 1957, it dropped steadily to a loss of
UNITED DAIRY CO. 191
$6,170 in the first 3 months of 1962. In the negotiations for the 1961 contract the
Union was told that the Company could not stay in business unless the trend was
reversed.
Respondent's Wheeling plant was an old, inefficient, three-storied building in a
crowded section of the city. Respondent tried to locate a site for a modern single-
story plant but no satisfactory sites were found. Estimates of the cost of building
such a plant ran as high as $750,000, and Respondent decided that the condition of
the business and the economic conditions of the area served did not justify the
investment of that much capital.
It also appears that the department of health of the State of West Virginia, and
the health department of the city of Wheeling and Ohio County, inspected and rated
Respondent's Wheeling plant in November 1959. A number of violations were
found and Respondent was ordered to correct them. The plant was given a rating
of 90 which is the lowest that a dairy can receive and still sell grade A milk. In
addition, if violations are'not corrected the plant is degraded to "C" grade which
means the loss of "Grade A" on its labels, and is tantamount to putting the plant
out of business. The Union was told that Respondent's milk would be "degraded"
if improvements were not made in the Wheeling plant.
The low rating of the plant and its general inefficiency caused the Company to
consider extensive remodeling. Estimates were obtained running about $300,000.
This also was communicated to the Union. The Company found that the expendi-
tures of so much money would not result in substantial efficiencies and because of
the other economic factors described continued to consider other solutions for its
problem.
While the general plant problems were under consideration, Respondent was
approached by Ohio Valley Dairy with an offer that Respondent buy Ohio Valley.
After negotiations beginning in April 1960, Respondent turned down Ohio Valley
Dairy's proposal in October 1961.
Sometime in November 1961, Respondent was approached by Town & Country
Dairy Company of Wheeling and a merger of Respondent's Wheeling and Wellsburg
operations with Town & Country was discussed. The merger plan which developed
was rejected by Town & Country stockholders.
Respondent resumed negotiations with Ohio Valley Dairy Company again in
early April 1962 when Ohio Valley made an offer to buy the Wheeling and Wells-
burg plants. On May 24, 1962, Respondent submitted a written offer signed by
officers of Respondent to Ohio Valley Dairy to sell its Wheeling and Wellsburg
plants. The May 24 proposal was approved by shareholders of Ohio Valley Dairy
on May 27, and on May 28, an officer of Ohio Valley Dairy notified Respondent that
its offer had been accepted. On June 1 the proposal was signed by representatives
of Ohio Valley Dairy.
On June 4, 1962, Respondent and Ohio Valley Dairy representatives discussed
the absorption of Respondent 's employees . Respondent suggested that the em-
ployees be dovetailed into Ohio Valley's seniority list but Ohio Valley was unable
to agree because of a labor agreement with another union . On June 19, 1962,
Respondent signed the required deeds and bills of sale and delivered them to Ohio
Valley Dairy. On June 20, all employees of Respondent were terminated, but all
but 5 of the 50 in the unit were hired by Ohio Valley Dairy. The machinery at the
Wheeling plant has been dismantled and disposed of. Ohio Valley Dairy has com-
pletely absorbed the operations formerly performed by Respondent at Wheeling and
Wellsburg, and it was agreed at the hearing that Respondent has not transferred
operations to other plants. It was also agreed that there is no theory of successor-
ship in this case and that the sale to Ohio Valley was at arm's length.
The exact date that the Respondent informed the Union of the sale of the two
plants is in dispute. Respondent's attorney, Jones, testified that he told Union
Representative Kee about it in a telephone call which Kee made to him on June 15
or 16. Kee testified that he did call Jones about rumors of a sale but that Jones
merely told him that he had dictated a letter which Kee would receive shortly. A
resolution of this small disagreement is unimportant. It is clear that the Union
got no formal or informal advice from Respondent about the resumed Ohio Valley
Dairy negotiations until after the sale was completed. I so find.
General Counsel contends that a decision to sell, even for economic reasons, is
a mandatory subject of collective bargaining and that Respondent failed in its
obligation by not affording the Union an opportunity to bargain about its decision
to sell. On this phase of the case, Respondent argues, in substance, that there is
744-670-65-vol. 146-14
0
192 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
no existing legal obligation to bargain with a union about a decision to sell a plant;
that the Union never made a demand to bargain, although it knew that Respondent
had some plans about the disposal of the Wheeling and Wellsburg plants; and that,
even if there is some obligation to bargain about a sale in general , there was none
in the economic circumstances of this case.
B. The question of waiver
With respect to the Union's knowledge of Respondent's activities, or its failure
to request a bargaining conference, I find nothing in its conduct which would
amount to an estoppel or waiver-which is essentially what Respondent contends
here-if the obligation to bargain about a sale exists.
In the first place, Respondent resumed negotiations with Ohio Valley Dairy on
April 5, 1962, and it was after that time that the question of the sale of Respond-
ent's plants rather than a purchase or merger with another company arose. Prior
to that time the Union had been advised of possible mergers, purchases, or exten-
sive remodeling. It was not advised of Respondent's resumption of negotiations
with Ohio Valley Dairy, or of a contemplated sale, until after the sale had been
consummated. Whatever information the Union may have had about earlier plans
of Respondent could not excuse Respondent's failure to advise the Union of a radi-
cally different objective, namely, a sale rather than an expansion or merger of its
West Virginia operations.
In the second place , the conversations between the union representatives and
Attorney Jones concerning the Respondent's earlier plans would support no finding
that the Union had no interest in bargaining about Respondent's final action in
selling. When Respondent began discussing the possibility of merger with Ohio
Valley Dairy in 1960, it did not advise the Union, but the Union learned of it
from other sources. When Union Representative Kee asked Respondent if nego-
tiations were going on, he was told that the companies were just talking and there
was nothing to tell him. Similarly, in regard to the Town & Country negotiations,
the Union evidenced an interest in what was going on as it would affect their mem-
bers, having again learned of the matter indirectly, but was again told by Jones
that there were no definite plans to merge . It was agreed that the Union would
be kept informed with respect to the merger plans . In my view , the facts indicate
that the Union was vitally interested in the Respondent 's plans and indicated such
to Respondent . This is not consistent with waiver.
Finally, Respondent , while admitting that it supplied the Union with no informa-
tion about the sale negotiations until about June 16, contends that the Union was
aware of the proposed sale from other sources and did nothing about it. Kee testi-
fied, however, that the first time he heard from any source that negotiations had
been resumed was 2 or 3 days before the sale. There is nothing in the record of
any probative value to contradict this testimony and I credit it. Kee's testimony is
also consistent with Attorney Jones' testimony that he did not advise Kee of the sale
because since it involved a management prerogative , in his opinion , there was, there-
fore, no obligation to bargain about it, and that, in addition, the Company was
trying to keep the ". . . thing from becoming public property . .
Although I find no waiver or estoppel in the circumstances and nothing in the
Union's failure to request bargaining that would excuse the Respondent 's failure
to give the Union reasonable notice of the change and a chance to bargain about it,2
the existence of any legal obligation to bargain about a decision to sell a part of
a business-as distinquished from the duty to bargain about the impact of the sale
on the employees-is not clear from the decided cases.
C. The failure to bargain about the sale of the plants
Early decisions of the Board and courts give some indication that an employer
need not bargain about a decision to go out of business or move his plants for
economic reasons, and even the view that a decision to subcontract operations is
bargainable has not at all times been the Board's position and today does not have
2 NL.RB. v. Highland Park Manufacturing Company, 110 F. 2d 632 (C.A. 4) ; The
Item Company, 220 F. 2d 956 (C.A. 5), cert . denied 350 U.S. 836; N.L.R.B v. Brown-
Dunkin Company, Inc. 287 F. 2d 17, 20 (C A. 10) ; see N.L.R B. v Rapid Bindery, Inc. 5
Frontier Bindery Corp , 293 F. 2d 170 , 176 (IC.A. 2), where the court said , "Moreover,
we are of the opinion that conjecture or rumor is not an adequate substitute for an em-
ployer's formal notice to a union of a vital change in working conditions that had been
decided upon ." See also Adams Dairy, Inc, 137 NLRB 615.
0
UNITED DAIRY CO. 193
unanimous support within the Board.3 Although the instant case, as is conceded,
involves the outright sale and termination of a considerable portion of Respondent's
business and not subcontracting, General Counsel contends that the case is con-
trolled by the Board's reasoning in Town & Country. Respondent argues that
Town & Country and other cases cited by General Counsel were based upon the
discriminatory motivation of the employer in subcontracting an operation, and no
Board or court case exists in which an employer was found in violation of the Act
for failure to bargain with the Union about his decision where his decision was
prompted solely by economic considerations. This is not the fact. While it is
true that in Town & Country there were two grounds for the Board's decision,
one the discriminatory motivation in subcontracting, and the other the failure to
bargain with the Union about whether to subcontract the work at all even if the
decision was lawfully motivated, in Fibreboard Paper Products Corporation 4 and
Adams Dairy, Inc.,5 the only ground for decision was that Respondents violated
Section 8(a) (5) of the Act by their unilateral actions in terminating certain opera-
tions without consulting the Union.6 It would appear, therefore, that unless a sale
is treated differently than a subcontract, Respondent's motivation is immaterial,
and it violated the Act, by not giving the Union a reasonable opportunity to bargain
about the Company's decision to sell its plants.
General Counsel urges that the Board's recent decision in Weingarten Food
Center of Tenn., Inc? suggests that had the issue of a sale been properly presented,
a majority of the Board panel would have found the Town & Country principle
applicable to an employer's decision to sell a portion of its business. In that case,
the employer sold five of its six retail stores without bargaining with the union
about its decision to sell. Board Member Rodgers agreed with the Trial Examiner's
dismissal of the case for the reasons stated in his dissent in Town & Country
Manufacturing Company. Member Fanning, while agreeing with dissenting Mem-
ber Brown that an employer must bargain about a decision to discontinue opera-
tions, was for dismissal on the ground that the issue was not properly before the
Board. Member Brown dissented and would have found a violation on the basis
of Town & Country. Member Brown's dissent, however, emphasized that Re-
spondent's ". . . entire course of conduct was lacking in good faith . . ." as well
as lacking a ". . . timely invitation to the Union to consult about the sale's effect
upon employees."
If Weingarten is a guiding beacon as General Counsel suggests, its light is dim
and wavering. In addition, obvious practical differences exist in sales as contrasted
with subcontracting. In a sale the seller normally divests himself of all control
of the enterprise, as was the case here, but in subcontracting, the principal business
may go on with economic control retained over the very existence of the subcon-
tractor. The finality and permanence of one as compared to the executory and
potentially temporary nature of the other is perhaps a reason for difference in
treatment . The difficulty in framing a realistic remedy when an enterprise has
been extinguished or changed hands and the rights of innocent purchasers vested,
is another consideration that cannot be ignored. Other considerations will quickly
come to mind to those more versed in the needs and habits of the business com-
munity, such as, for example, the effect of premature publicity on dissident stock-
holders, on the market, and on competitors as well as the purchaser. Neverthe-
less, on balance, I think that since sales, or mergers, or other dispositions of
facilities in our rapidly changing economy have such an obvious, direct, and often
devastating impact on the jobs of employees they fall within the principle relied
upon by the Board in subcontracting cases. In Town & Country the Board rea-
8 Gustave S. Krantz, d/b/a Krantz Wire & Mfg. Co., et al., 97 NLRB 971, 988, enfd.
sub nom. N.L.R.B. v. Albert Armato and Wire & Sheet Metal Specialty Co., 199 F.-2d 800
(C.A. 7) ; Walter Holm & Company, 87 NLRB 1169; Mahoning Mining Company, 61 NLRB
792, 803 ; N.L R.B. v. Rapid Bindery, Inc., 293 F. 2d 170, 176 (C.A. 2) ; Brown Truck
and Trailer Manufacturing Company, Inc., Newel Manufacturing Company, Inc., and
Joseph L. Brown, 106 NLRB 999. The Timken Roller Bearing Company, 70 NLRB 500;
Fibreboard Paper Products Corporation, 130 NLRB 1558; Town & Country Manufacturing
Company, Inc, and Town & Country Sales Company, Inc., 136 NLRB 1022, enfd. 316
F. 2d 846 (C.A. 5) ; Adams Dairy, Inc., 137 NLRB 815; Fibreboard Paper Products
Corporation, 138 NLRB 550.
4138 NLRB 550.
6137 NLRB 815.
6 See also N.L R.B. v. Brown-Dunkin Company, 287 F. 2d 17 (C.A. 10). Jays Foods,
Inc. v. N.LR.B., 292 F. 2d 317 (C.A. 7).
7140 NLRB 256.
194 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
soned that ". .• the elimination of unit jobs , albeit for economic reasons, is a
matter within the statutory phrase `other terms and conditions of employment' and is
a mandatory subject of collective bargaining within the meaning of Section 8(a)(5)
of the Act." I find that Respondent 's decision to dispose of its Wheeling and Wells-
burg operations by sale was also a mandatory subject of collective bargaining.8
Respondent also contends that the facts with respect to Respondent 's efforts to
find a solution for its economic problems involving its Wheeling and Wellsburg
operations and its reasonable solution , which it contends saved the jobs of all but
5 of the 50 employees in the bargaining unit , made prior negotiations with the
Union about its decision unnecessary as a matter of law and reality . In its view,
nothing could have been accomplished by such negotiation but a waste of time
and effort which was better utilized in solving the problems of Respondent and its
employees.
However sympathetic one may be toward Respondent in its difficulties, the
impact of the solution on employees was of sufficient magnitude that their rep-
resentatives should have been , given some opportunity to be heard before the
decision was made final . None was given here . It may be that in these difficult
cases, involving some restriction on an employer 's freedom to act without prior
restraint , the nature of the problem and' the situation existing after the sale will be
factors considered by the Board in developing remedies empirically . I find that the
circumstances in this case afford Respondent no complete defense for its failure to
give the Union reasonable notice of its decision to sell and terminate its employees
before it took that action and that by such failure Respondent violated Section
8 (a) (5) of the Act.
D. The settlement agreement
On July 2, 1962, the Union filed a charge of unfair labor practices against Re-
spondent under Section 8(a)(1), (3 ), and (5) of the Act. The charge complained
of discrimination against the employees at Wellsburg and Wheeling , and asserted a
general refusal to bargain , as well as refusal to bargain about the decision to ter-
minate a phase of Respondent 's business.
On July 17, 1962, the Union requested Respondent to meet with it to discuss the
effects of the sale on the employees in the bargaining unit. The Union also asked
Respondent to supply it with certain information which it considered necessary to
the proper administration of its collective-bargaining contract . The information
requested was the sales agreement, a seniority list, names of employees terminated,
and information about vacation and other benefits. The Respondent refused to
meet with the Union and refused to supply the requested information.
On November 21, 1962 , the Board 's Regional Director notified the Union that he
was refusing to issue a complaint involving discrimination under Section 8 (a) (3)
of the Act, or under Section 8 (a)(5) based on the Company's failure to bargain
on its decision to, sell its plants. The charge was retained , however, to support
the Complaint issued against the Employer alleging violations of 8 (a) (1) and
(5) of the Act." It appears that a complaint issued on November 13, 1962, in
which it was alleged that Respondent had refused to bargain about the effects
of the sale and refused to supply the Union with certain informtion requested by it.
Sometime prior to December 5, 1962 , the Union took an appeal to the General
Counsel of the Board from the Regional Director 's refusal to issue a complaint with
respect to certain portions of the Union 's charge and the appeal was acknowledged
by the General Counsel on December 5, 1962. Copies of the acknowledgment went
to Respondent and its attorney.
The Regional Director of the Board and the Respondent entered into a settle-
ment agreement on December 17, 1962, of the issues raised by the November 13,
1962, complaint . In the agreement Respondent undertook to supply the Union
with the requested information , agreed to bargain about the effects of the sale of
the employees , and to send certain notices to that effect to the employees . The Union
was not a party to the settlement agreement , and on December 17, 1962, the Regional
Director advised the Union that the complaint was being withdrawn on the basis
of the settlement . The Regional Director's letter to the Union further advised
the Union that it could obtain review of his action by filing a request for such with
the General Counsel of the Board in Washington within a certain time . No request
for review of the Regional Director 's action in approving the settlement agreement
was filed by the Union . As noted , however, the Union had taken an earlier appeal
from the Director 's refusal to issue a complaint on all of its allegations in its charge.
8 Town & Country Manufacturing Company, 136 NLRB 1022, 1027 ; see also The Order
of Railroad Telegraphers , et al. v. Chicago and North Western Railway Co., a Corporation,
362 U.S. 330.
UNITED DAIRY CO. 195
The Regional Director of the Board, on January 8, 1963, wrote Respondent and
informed it that no request for review had been filed by the Union from his refusal
to issue complaint and that the Company should proceed to carry out the settlement
agreement. The Company immediately took steps to do so, and, by January 11,
1963, it had signed letters to employees for mailing by the Board and by the time
of the hearing herein had supplied the Union with the required information.
However, while Respondent was complying with the terms of the settlement agree-
ment, the Office of the General Counsel of the Board wrote the attorney for the
Union to tell him his ". . . appeal from the Regional Director's approval of the
settlement agreement and refusal to issue complaint . . . (had) been fully con-
sidered." The letter stated that the General Counsel sustained the Director's refusal
to issue complaint on the allegations of discrimination under, Section 8(a)(3) but
that the appeal was sustained with respect to Respondent's failure to consult with
the Union about its decision to sell the plants in question. The Union's attorney
was notified that the case was being remanded to the Regional Director with instruc-
tions to withdraw his approval of the settlement agreement and issue an 8(a) (1)
and (5) complaint. Copies of this letter went to Respondent and its attorney.
On February 19, 1963, the Regional Director notified the parties that his approval
of the settlement agreement was withdrawn, and, on the same day, issued the instant
complaint, which contained allegations regarding Respondent's failure to bargain
about its decision to sell, as well as its refusal to supply information to the Union
and bargain about the effects of the sale.
On the basis of the above history of the proceedings in this case, Respondent
argues that all matters involving the alleged refusal to meet about the effects of the
sale on the employees, and.the refusal to supply the Union with information, were
finally settled and are res judicata. In support of its position it relies heavily on
the fact that no appeal was taken by the- Union from the Regional Director's
approval of the settlement agreement and on the fact that it has complied with the
agreement. Although, in my opinion, the outlined procedure in the case lacked
precision and certainty, I see no prejudice to Respondent. In the first place, Re-
spondent was aware that the Union had taken an appeal from the Regional Director's
action of November 21, 1962, in which he notified the Union that he was not pro-
ceeding under Section 8(a)(5) based on the Company's failure to bargain about its
decision to sell. Attorney Jones concedes that he was aware of the appeal when
he settled the earlier complaint, and, as indicated earlier, General Counsel notified
all parties of his receipt of the appeal. In addition, the appeal was timely, contrary
to Respondent's present contention, for it. was received in Washington prior to
December 5, 1962, which complied with the Regional Director's advice in his letter
of dismissal, and with the Rules and Regulations of the Board.9 Moreover, if
Respondent thought the appeal should not have been processed because untimely,
the time to raise it was when it was notified of the acceptance of the appeal. In
addition, although no -technical appeal was taken from the settlement agreement in
reality there was one already on file, for the settlement agreement itself provides
that review is obtained under Section 102.19 of the the Rules and Regulations,
which is the same section the Regional Director was operating under when he refused
to proceed in toto originally, and with which the Union complied when it took its
appeal. Despite the Regional Director's confusing advice to the Respondent that
no appeal had been taken from the settlement agreement, in actuality an appeal
would have been needless duplication. .Finally, since General Counsel is not asking
that Respondent supply the Union with any information it has previously given it,
and because Respondent has not actually met and bargained with ,the Union about
the impact of the sale on the employees, although it has in good faith agreed to do
so, I see no abuse in trying together issues which are so closely related.
E. Refusal to bargain about the effects of the sale on employees
and to supply information
On the merits, I also find that Respondent, in violation of Section 8(a)(1) and
(5) of the Act, refused to meet with the Union at the Union's request to discuss the
effects of the sale on the unit employees, and refused to supply. the Union with
information necessary for an intelligent discussion of Respondent's termination of
its employees and its ramifications. The law is well, settled that an employer is
obligated to bargain about the effect on employee rights of a change in operations 10
and to furnish the union relevant data to enable it to administer the collective-
9 Section 102.114. ••
10 Town & Country Manufacturing Company; Fibreboard Paper Products Corporation;
Brown Truck and Trailer Manufacturing Company, supra, footnote 3.
196 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
bargaining agreement.ll Respondent concedes that it refused the Union's request
to negotiate regarding the effects of the sale claiming that since the employer-
employee relationship had been severed there was no legal obligation to bargain.
Respondent also concedes that it did not supply the Union with certain information
but contends that the sales agreement was confidential and that the other data was
already in the hands of the Union.
With respect to the requested information, Union Representative Kee testified
credibly that none of the information requested by him was in his possession, and
I credit his testimony. Without a copy of Respondent's agreement with the pur-
chaser the Union obviously could not determine whether the transaction was a sale
or a merger or whether Respondent had divested itself of its interest in the former
operations at all. Bargaining with respect to the rights of employees terminated
could not begin until Respondent's relationship with the purported purchaser was
accurately disclosed. The other information, such as the seniority list, vacation
benefits paid, and pension rights of specific employees, seems clearly relevant to the
question of possible benefits to the severed employees.
Finally, in regard to the effects of the sale, although Respondent has terminated
and sold substantially all its operations in West Virginia, it is not completely out
of business and part of the bargaining unit remains at New Martinsville. In these
circumstances, it would seem that the principles that determine a holding that
Respondent bargain about its decision to sell would, a fortiori, require a finding
that Respondent was required to bargain about the effects on and the treatment of
employees affected by the sale.
IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE
The activities of Respondent set forth in section III, above, occurring in connection
with the operations of Respondent described in section I, above, have a close,
intimate, and substantial relation 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
I have found that Respondent refused to bargain with the Union about its decision
to sell its Wheeling and-Wellsburg operations. General Counsel asks that the
remedy utilized by the Board in Town & Country Manufacturing be applied. He
points out that in that case the Board ordered the employer to restore the status
quo ante by reinstating its employees with backpay and bargaining with the Union
over any future changes in operations. Although there is no Section 8(a)(3)
allegation in the case, General Counsel points to Fibreboard Paper Products Corpo-
ration, supra, which involved only an 8(a)(5) allegation but where the Board
ordered restoration of the status quo ante by reinstating the maintenance operation
.and bargaining with the Union as well as making the employees whole for loss of
earnings suffered as the result of the employer's unlawful action in unilaterally
subcontracting jobs out of existence. Specifically, he asks here, that Respondent
resume its operations at the Wheeling and Wellsburg plants, reinstate its employees
with backpay, bargain with the Union, and mail appropriate notices to its employees.
As set forth in detail earlier, Respondent is out of business for all intents and
purposes in West Virginia, its plants are sold, its machinery dismantled, and its
customers serviced by others. Restoration of the status quo ante to the extent of
putting Respondent back in business in Wheeling and Wellsburg, for which there is
no continuing need, is harsh, unrealistic and perhaps economically impossible. I
will not recommend it.12
As for backpay for employees either until reinstated, or until they obtain sub-
stantially equivalent employment, I will recommend neither because of the cir-
cumstances of this case, and because the principles in the cases cited by General
Counsel do not appear controlling here. With respect to the circumstances, the
long recital of Respondent's economic problems with its Wheeling and Wellsburg
operations indicates to me that their ultimate solution by a sale or merger was as
likely a forecast whether Respondent bargained with the Union or not about its
decision to sell. It is true that the cases teach us that if an employer bargains
about a decision to change operations, the decision may change instead of the
operations, and jobs may be saved. Full acceptance of the roseate belief, how-
ever, cannot erase the hard facts that Respondent had been heading for a long
11 N.L R B. v. Whitin Machine Works, 217 F. 2d 593 (CA. 4), cert. denied 349 U.S 905.
12 Carl Rochet and Charles 'Rund, partners , doing business as The Renton News Record
et al, 136 NLRB 1294.
UNITED DAIRY CO. 197
time in the direction it finally reached in June 1962, and that death's-door bargaining
would not have diverted the solution or eased its pain. At least the hypothesis
that absorption by the buyer of 45 employees in the sale was the best that could
be obtained for them is as believable as speculation that no one would have been
hurt if only Respondent had talked with the Union. In addition, so far as the
cases are concerned, Darlington Manufacturing Company, and Esti Neiderman and
Gizela Eisner, co-partners doing business as Star Baby Co.,13 cited by General
Counsel are both cases in which Respondents were discriminatorily motivated in
closing their operations, and in Darlington the Board also said, "It is reasonable to
assume that these employees would have continued in their employment indefinitely,
particularly in view of the large sums spent and allocated for modernization of the
mill." The language quoted was prefatory to the Board's Order to restore ". . . the
situation, as nearly as possible, to that which''would have obtained but for the
illegal discrimination . . ." and must be contrasted with this Respondent's sad plight
as far as its Wheeling plant was concerned. It can be said with certainty that
the employees in the instant case would not have lost their jobs "but for" the
sale, but it is a leap in the dark to say that they would have remained in Re-
spondent's employ indefinitely "but for" Respondent's failure to tell the Union
that it had decided to sell to United Dairy after months of negotiations. Finally,
in view of the uncertain state of the law as evidenced by the original dismissal of
the charge in the case as it related to the failure to discuss the decision to sell,
imposition of a substantial backpay liability upon Respondent in the compelling
economic circumstances of this case seems inequitable.
A small part of the bargaining unit, however, still exists at New Martinsville where
Respondent has a distribution center. In view of Respondent's past refusal to
bargain, I will recommend that it cease and desist from failing to bargain collec-
tively with the Union with respect to decisions affecting its employees connected
either with a sale or any other disposition of operations.
Having found that Respondent violated Section 8(a)(1) and (5) of the Act by
refusing to bargain with the Union concerning the effect of the sale of its operations
on its employees and by refusing to supply certain information to the Union nec-
essary for such bargaining, it will be recommended that Respondent cease and desist
from such conduct and bargain with the Union. Since Respondent has already
supplied the information requested it will not be required to supply it again.
In view-of the fact that operations at Wheeling and Wellsburg are nonexistent
and since no affirmative relief respecting reinstatement or backpay is recommended,
it would seem that posting or mailing of notices would serve no useful purpose
and I will not recommend that it be done.
Upon the basis of the foregoing findings of fact and upon the entire record in
the case, I make the following:
CONCLUSIONS OF LAW
1. Respondent is engaged in commerce within the meaning of Section 2(6)
and (7) of ,the Act.
2. The Union is a labor organization within the meaning of Section 2(5) of
the Act.
3. At all times material herein, the Union has been the exclusive bargaining
representative of the employees of Respondent in an appropriate unit within the
meaning of Section 9(a) and (b) of the Act.
4. By selling its Wheeling and Wellsburg plants and terminating the employment
of its employees working within the unit at those plants, all without prior notice to,
or consultation or bargaining with, the Union, Respondent has engaged in and is
engaging in unfair labor practices within the meaning of Section 8 (a) (5) and (1)
of the Act.
5. By refusing to bargain with the Union about the effects of the sale of its plants
on the employees in the unit and by refusing to supply the Union with informa-
tion necessary to bargaining, Respondent has further violated Section 8(a)(5) and
(1) of the Act.
6. The aforesaid unfair labor practices are unfair labor practices affecting com-
merce within the meaning of Section 2(6) and (7) of the Act.
RECOMMENDED ORDER
Upon the basis of the foregoing findings of fact and conclusions of law, and
upon the entire record in the case, it is recommended that United Dairy Co.,
Barnesville, Ohio, its officers, agents, successors, and assigns, shall:
13 139 NLRB 241; 140 NLRB 678.
198 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
1. Cease and desist from:
(a) Failing and refusing to bargain collectively with the Union as the exclusive
representative of its employees in the appropriate unit with respect to any decision
to sell or otherwise terminate its operations.
(b) Refusing to bargain with the Union about the effects on employees in the
appropriate unit of any sale or other termination of operations.
(c) Refusing to supply the Union with information necessary for collective
bargaining.
(d) In any like or related manner interfering with , restraining , or coercing its
employees in the exercise of their rights under Section 7 of the Act.
2. Take the following affirmative action which will effectuate the policies of the
Act.
(a) Bargain , upon request , with the Union concerning the effects of the sale of
its Wheeling and Wellsburg plants on the employees in the bargaining unit.
(b) Notify the Regional Director for the Sixth Region , in writing, within 20 days
from the receipt of this Intermediate Report and Recommended Order, what steps
Respondent has taken to comply herewith.14
14 If this Recommended Order is adopted by the Board , this provision shall be modified
to read: "Notify the Regional Director for the Sixth Region, in writing, within 10 days
from the date of this Order , what steps the Respondent has taken to comply herewith."
Samuel Rafowitz and Chaim Bonk , d/b/a Northern Cap Manu-
facturing Co. and United Hatters , Cap and Millinery Work-
ers International Union , • AFL-CIO. Case No. 18-CA-1624.
February 27, 1964
DECISION AND ORDER
On November 15, 1963, Trial Examiner Stanley N. Ohlbaum is-
sued his Decision in the above-entitled proceeding, finding that the
Respondent had not engaged in the unfair labor practices alleged
in the complaint and recommending that the complaint be dismissed
in its entirety, as set forth in the attached Trial Examiner's Decision.
Thereafter, the Charging Party filed exceptions to the Trial Ex-
aminer's Decision.
Pursuant to the provisions of Section 3 (b) of the Act, the Board
has delegated its powers in connection with this case to a three-
member panel [Chairman, McCulloch and Members Leedom and
Brown].
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 Charging Party's exceptions, and the entire
record in this case, and hereby adopts the Trial Examiner's findings,'
conclusions, and recommendations.
[The Board dismissed the complaint.]
1 The 'Charging Party has excepted to the credibility findings made by the Trial Ex-
aminer. It Is the Board 's established policy, however, not to overrule a Trial Examiner's
resolutions with respect to credibility unless, as is not the case here , the clear preponder-
ance of all the relevant evidence convinces us that the resolutions were incorrect.
Standard Dry Wall Products, Inc., 91 NLRB 544, enfd . 188 F. 2d 362 (C.A. 3).
146 NLRB No. 22.