Westchester Lace

National Labor Relations Board - Board Decisions

Sep 30, 1998

326 N.L.R.B. 1227 (N.L.R.B. 1998)

WESTCHESTER LACE, INC. 1227
Westchester Lace, Inc. and Local 2052, NY–NJ Re-
gional Joint Board, Unite and All-Lace Corpora-
tion, Party in Interest. Case 22–CA–21032
September 30, 1998
DECISION AND ORDER
BY MEMBERS FOX, HURTGEN, AND BRAME
On November 25, 1997, Administrative Law Judge
Robert T. Snyder issued the attached decision. The Re-
spondent filed exceptions and a supporting brief. The
General Counsel and the Charging Party each filed a
brief in opposition. The Respondent filed briefs in reply.
The National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
The Board has considered the decision and the record
in light of the exceptions and briefs and has decided to
affirm the judge’s rulings, findings,1 and conclusions2
and to adopt the recommended Order as modified.3
In adopting the judge’s conclusion that the Respondent
violated Section 8(a)(3) and (1) of the Act when it sub-
contracted the work at its West New York, New Jersey
facility and laid off the employees who worked at that
site, we agree with the judge’s finding that the General
Counsel made a prima facie showing sufficient to sup-
port the inference that protected conduct was a motivat-
ing factor in the Respondent’s decision. Accordingly,
the burden then shifted to the Respondent to demonstrate
that the same action would have taken place even in the
absence of the protected conduct. Wright Line, 251
NLRB 1083 (1980), modified 662 F.2d 899 (1st Cir.
1981), cert. denied 455 U.S. 989 (1982); Manno Electric,
321 NLRB 278 (1996). In order to rebut the General
Counsel’s prima facie case, the Respondent cannot sim-
ply present a legitimate reason for its action but must
show that the same action would have taken place even
in the absence of the protected conduct. Roure Bertrand
Dupont, Inc., 271 NLRB 443 (1984).

1 The Respondent has excepted to some of the judge’s credibility
findings. The Board’s established policy is not to overrule an adminis-
trative law judge’s credibility resolutions unless the clear preponder-
ance of all the relevant evidence convinces us that they are incorrect.
Standard Dry Wall Products, 91 NLRB 544 (1950), enfd. 188 F.2d 362
(3d Cir. 1951). We have carefully examined the record and find no
basis for reversing the findings.
The Respondent has moved to supplement the record with material
purporting to show that its president, Leonard Edelson, and Key
Gaetano, of M. Silverman Laces, Inc. (Silverman Laces), had ap-
proached counsel in the summer of 1995 in connection with a contract
that was executed more than 1 year later. We deny the Respondent’s
motion because it does not involve newly discovered and previously
unavailable evidence and because, even if the proffered material were
admitted as evidence, it would not change our disposition of the case.
2 We find it unnecessary to pass on whether the Respondent violated
Sec. 8(a)(5) and (1) of the Act by failing and refusing to bargain with
the Union about the effects of the closure of its West New York, New
Jersey facility. The relief that would flow from finding such a violation
would be cumulative.
3 We shall modify the judge’s recommended Order in accordance
with our decisions in Indian Hills Care Center, 321 NLRB 144 (1996),
and Excel Container, Inc., 325 NLRB 17 (1997). Since we are not
adopting the judge’s alternative effects bargaining remedy, we shall
delete the last sentence of par. 2(a) of the judge’s recommended Order.
The Respondent argues, attacking the General Coun-
sel’s prima facie case, that the judge incorrectly con-
cluded that antiunion animus was a motive for the clo-
sure. We reject this argument, especially in light of the
judge’s finding, not excepted to by the Respondent, that
the Respondent violated Section 8(a)(1) of the Act by
threatening its employees with closure of its plant and its
business if they continued to engage in protected con-
certed activity, namely, filing grievances and refusing to
agree to modification of the existing contract regarding
introduction of piece-rate compensation.
The Respondent further contends that the closure
would have occurred irrespective of union activity be-
cause of the arrangement worked out between the Re-
spondent and Silverman Laces referred to above. How-
ever, the judge pointed out that the arrangement was not
formally settled at the time of the closure and that, in any
event, Edelson had stated that he was prepared to close
even if the Silverman Laces arrangement fell through, on
the assumption that he would be able to find another sub-
contractor. This statement lends support to the view that
the Respondent’s reliance on the arrangement with Sil-
verman Laces is pretextual.
Further, testimony at the hearing indicated that the Re-
spondent was considering closing West New York in the
first place because of production and scheduling prob-
lems that it believed were aggravated by some of the unit
employees’ contractual benefits. If this were the case,
however, the Respondent could have turned to the Union
for relief. Its failure to do so suggests that this was not
the reason for the closure or at least that the Respondent
was not interested in trying to avoid the problem by deal-
ing with the Union. In sum, we find that the Respondent
has not come forward with evidence sufficient to rebut
the General Counsel’s prima facie case.
In agreeing with the judge’s conclusion that the Re-
spondent violated Section 8(a)(5) and (1) of the Act by
failing and refusing to bargain with the Union about the
closure, we note the Respondent’s defense that the clo-
sure was a core entrepreneurial decision motivated solely
by economic reasons and hence not bargainable. This
defense is untenable in light of our finding that the clo-
sure was motivated by union animus and thus violated
Section 8(a)(3) and (1) of the Act. Joy Recovery Tech-
nology Corp., 320 NLRB 356 fn. 3 (1995), enfd. 134
F.3d 1307 (7th Cir. 1998) (an employer’s subcontracting
decision cannot be a legitimate entrepreneurial decision
exempt from bargaining if antiunion considerations are at
the heart of the alleged fundamental change in the direc-
tion of the corporate enterprise).4
4 See Strawsine Mfg. Co., 280 NLRB 553 (1986); Delta Carbonate,
307 NLRB 118 (1992).
326 NLRB No. 119
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1228
ORDER
The National Labor Relations Board adopts the rec-
ommended Order of the administrative law judge as
modified below and orders that the Respondent, West-
chester Lace, Inc., North Bergen, New Jersey, its offi-
cers, agents, successors, and assigns, shall take the action
set forth in the Order as modified.
1. Delete the last sentence of paragraph 2(a) and sub-
stitute the following for paragraph 2(d).
“(d) Within 14 days after service by the Region, post at
its facilities in North Bergen and West New York, New
Jersey, copies of the attached notice marked “Appen-
dix.”2 Copies of the notice, on forms provided by the
Regional Director for Region 22, after being signed by
the Respondent’s authorized representative, shall be
posted by the Respondent immediately upon receipt and
maintained for 60 consecutive days in conspicuous
places including all places where notices to employees
are customarily posted. Reasonable steps shall be taken
by the respondent to ensure that the notices are not al-
tered, defaced, or covered by any other material. In the
event that, during the pendency of these proceedings, the
Respondent has gone out of business or closed the facil-
ity involved in these proceedings, the Respondent shall
duplicate and mail, at its own expense, a copy of the no-
tice to all current employees and former employees em-
ployed by the Respondent at any time since Ocotber 20,
1995.”
2. Add the following as paragraph 2(f).
“(f) Within 14 days from the date of this Order, re-
move from its files any reference to the unlawful layoffs,
and within 3 days thereafter notify the employees in writ-
ing that this has been done and that the layoffs will not
be used against them in any way.”
3. Substitute the attached notice for that of the admin-
istrative law judge.

MEMBER HURTGEN, concurring and dissenting in part.
I agree with my colleagues that the Respondent’s clo-
sure of its West New York, New Jersey facility violated
Section 8(a)(3) and (1) of the Act. I find it unnecessary
to pass on whether the decision to close violated Section
8(a)(5). In particular, I am not necessarily persuaded that
the decision was a mandatory subject of bargaining. In
my view, the fact that a closure decision is discriminato-
rily motivated does not per se place the decision into the
mandatory subject area. In any event, I do not pass on
this 8(a)(5) issue because the remedy for the 8(a)(3) vio-
lation (reopen, reinstate employees and make them
whole) provides an adequate substantive remedy for any
8(a)(5) violation that might exist.
Finally, I agree with my colleagues that we need not
reach the question whether the Respondent unlawfully
failed and refused to bargain with the Union over the
effects of the closure. If it were necessary to reach that
issue, I would not rely on the judge’s analysis of it.
APPENDIX
NOTICE TO EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government

The National Labor Relations Board has found that we vio-
lated the National Labor Relations Act and has ordered us to
post and abide by this notice.

Section 7 of the Act gives employees these rights.

To organize
To form, join, or assist any union
To bargain collectively through representatives
of their own choice
To act together for other mutual aid or protection
To choose not to engage in any of these protected
concerted activities.

WE WILL NOT threaten our employees with closing our
business and our plant if they continue to engage in pro-
tected concerted activity.
WE WILL NOT discriminate in regard to hire, tenure, and
terms and conditions of employment to discourage mem-
bership in the Union by terminating our scallop cutting
department and all of its operations at our West New
York facility, subcontracting those operations and laying
off the employees who were employed at that facility.
WE WILL NOT fail and refuse to bargain in good faith
with Local 2052, New York-New Jersey Regional Joint
Board, UNITE, the exclusive bargaining agent of our
employees in the appropriate bargaining unit described
below, by terminating our scallop cutting department and
all of its operations and laying off the employees who
were employed at that facility, without affording the Un-
ion an opportunity to bargain and without bargaining
with respect to this conduct and the effects of this con-
duct on the employees in the bargaining unit.

In our Separating, Winding, Scalloping, Cutting and
Dyeing Department—all employees in he plant except-
ing general office help, salaried Foremen, salesmen and
heads of departments. The aforementioned exceptions
do not include receiving or shipping clerks.

WE WILL NOT in any like or related manner interfere
with, restrain, or coerce our employees in the exercise of
the rights guaranteed them by Section 7 of the Act.
WE WILL reestablish and resume our separating, wind-
ing, scalloping, cutting and dyeing department and all of
its operations as it existed prior to October 27, 1997, at
our West New York facility and WE WILL offer immediate
and full reinstatement to our unlawfully laid off and ter-
minated employees previously employed at that facility
to their former jobs, or in the event their former jobs no
longer exist, to substantially equivalent jobs, without
prejudice to their seniority or other rights and privileges,
WESTCHESTER LACE, INC. 1229
and make them whole for any loss of earnings they may
have suffered by reason of our unlawful conduct, with
interest.
WE WILL, on request, bargain in good faith with the
Union as the exclusive bargaining agent of our employ-
ees in the above-described unit, as to our decision to
close the West New York facility and subcontract the
scallop cutting department and all of its operations per-
formed there and as to the effects on employees of sub-
contracting that work and, if an understanding is reached,
embody such understanding in a signed agreement.
WE WILL, within 14 days from the date of the Board’s
Order, remove from our files any reference to the unlaw-
ful layoffs and WE WILL, within 3 days thereafter, notify
all of the unlawfully laid-off employees in writing that
this has been done and that the layoffs will not be used
against them in any way.

WESTCHESTER LACE, INC.

William E. Milks, Esq., for the General Counsel.
Larry M. Cole, Esq. (Cole & Cole, Esqs.), for the Respondent.
Larry Magarik, Esq. (Kennedy, Schwartz & Cure, P.C.), for the
Charging Party.
DECISION
STATEMENT OF THE CASE
ROBERT T. SNYDER, Administrative Law Judge. This case
was tried before me on December 2, 4, and 5, 1996, in Newark,
New Jersey. The complaint alleges that Westchester Lace, Inc.
(Westchester Lace or Respondent) threatened its employees
with closing of its business if they continued to engage in pro-
tected concerted activity in violation of Section 8(a)(1) of the
Act, and closed its West New York plant, laying off the em-
ployees employed there who were primarily in the scallop cut-
ting department and contracted out the work performed by
these employees without affording Local 2052, NY-NJ Re-
gional Joint Board, UNITE (the Union), which the Union repre-
sented its rank-and-file plant employees under a collective-
bargaining agreement then in effect, an opportunity to bargain
with it with respect to its decision to close and contract out the
work and the effects of this conduct, in violation of Section
8(a)(1) and (5) of the Act. This conduct of laying off the em-
ployees in its scallop cutting operation is also alleged as dis-
criminatory conduct in violation of Section 8(a)(1) and (3) of
the Act.
Respondent filed timely answer denying the acts alleged as
unfair labor practices. It also denied the Government’s entitle-
ment to the relief sought in the complaint that it be required to
reinstate its scallop cutting operation as it existed prior to the
closing and contracting out.
The parties were provided full opportunity to participate, to
introduce relevant evidence, to examine and cross-examine
witnesses, to argue orally, and to file briefs. Although provided
with formal notice of the proceeding, Party in Interest All Lace
Corporation did not appear or participate in the proceeding.
Posttrial briefs have been filed by counsel for the General
Counsel, Respondent, and the Union and they have been care-
fully considered. On the entire record in the case, including my
observation of the witnesses and their demeanor, I make the
following
FINDINGS OF FACTS
I. JURISDICTION AND LABOR ORGANIZATION STATUS
Respondent, a corporation, with offices and places of busi-
ness in North Bergen and West New York, New Jersey (Re-
spondent’s facilities), has been engaged in the business of
manufacturing lace. During the 12-month preceding issuance
of the complaint herein, on April 20, 1996, the Respondent, in
conducting its business operations described, sold, and shipped
from its New Jersey facilities goods valued in excess of
$50,000 directly to points outside the State of New Jersey.
Respondent admits, and I find, that at all material times, it has
been an employer engaged in commerce within the meaning of
Section 2(2), (6), and (7) of the Act. Respondent admits, and I
also find, that the Union has been a labor organization within
the meaning of Section 2(5) of the Act.
II. THE ALLEGED UNFAIR LABOR PRACTICES
A. Background
Respondent is a manufacturer of lace. For many years it has
operated in North Bergen, New Jersey. These facilities include
a main plant at 3901 Liberty Avenue and a second facility at
3200 Liberty Avenue, also known as the Hill. From 1973 to
1994 it operated a knitting facility in Puerto Rico. Since 1959,
the Union has been the collective-bargaining representative of
its rank-and-file production employees at its facilities in New
Jersey. The Puerto Rican plant was not unionized.
Sometime early in 1993 Respondent opened a third New Jer-
sey facility in West New York, New Jersey. Money was in-
vested in preparing the building and setting up machinery to
produce a form of lace known as narrow band with scalloping.
On and effective November 1, 1993, the Respondent and the
Union entered two separate collective-bargaining agreements,
running to October 31, 1996. One covered all of the production
employees in the North Bergen facilities who worked in Re-
spondent’s knitting department. The other covered all of the
production employees who worked in Respondent’s West New
York facility where they worked in Respondent’s separating,
winding, scalloping, cutting, and dyeing departments (The
West New York agreement). Both agreements provide for
Respondent’s right to discipline or discharge for just cause and
the Union’s right to submit such discharge to final and binding
arbitration, with authority in the arbitrator to determine the
question and extent of retroactive wages or backpay and the
right of the Union to strike or sue to enforce an arbitrator’s
award which Westchester Lace has failed to carry out within 5
days from the date of notice of the award. Workload disputes
are also subject to arbitration, and changes in present workload
shall be made either by mutual agreement or by an arbitration
award (sec. 2.4(b)).
The agreements also provided for equal distribution of work
among workers in each classification, layoff, and recall on the
basis of seniority in each department with replacements done
by departmental seniority, provided the worker is capable of
performing the job. The regular workweek consists of 8 hours
per day, 5 days, Monday to Friday, with time and one-half paid
above 8 hours, and work on Saturday, and double time for Sun-
day.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1230
Also, under the West New York agreement, employees or-
dered to report to work shall be guaranteed 4-hour pay and no
employee shall be paid for less than 4 hours when working.
Also, foremen, dyers, or employers shall not be permitted to do
any work at any time in the plant to deprive a worker of any
work hours. The agreements also provided for shift premium
pay for employees assigned to second or third shifts.
The minimum rates of pay provided for in the West New
York agreement ranged from a low of $7.015 per hour for ship-
ping and packing and lace separating, through $7.415 to $7.965
for dye house employees and $7.415 for employees in the finish
room, and from $6.95 for scallop cutting department, straight
cutting machine operators, to a high of $8.70 for scallop cutting
machine operators. This compares to a range running from a
low of $7.865 to a high of $11 for employees under the North
Bergen agreement.
Both agreements also provide for 13 paid holidays, paid va-
cations running from 1 week to more than 2 depending on years
of service, hospitalization, and life insurance plan maintained
substantially at Respondent’s sole cost and participation in the
Union’s dental plan. The parties also agreed under the West
New York agreement that effective November 1, 1992, Re-
spondent would start a pension plan or Keogh Plan with a con-
tribution of 5 cents per hour, per member.
Since the West New York facility opened in 1993, Respon-
dent had subcontracted some of the scallop cutting work but
had never subcontracted all of the work, or closed the facility.
While employing about 200 bargaining unit personnel in its
North Bergen facilities, by October 1995, Respondent em-
ployed 23 employees in its West New York facility.
B. The Facts and Circumstances Surrounding Respondent’s
Contracting Out of its Scallop Cutting Department and Termi-
nation of its Operations at the West New York Facility
Edgar de Jesus, assistant manager and organizing director of
the Union, who was responsible for overseeing the collective-
bargaining agreements with Respondent, received a letter late
in the evening of October 18, 1995, directed to him from Leo-
nard Edelson, president of Respondent. In the letter, dated Oc-
tober 16, Edelson informed de Jesus that, “[t]he Company has
made a determination to permanently discontinue the scallop
cutting department effective at the close of business on October
27, 1995. This will mean a permanent lay off for the employ-
ees in that department.” In a separate paragraph, Edelson in-
formed de Jesus, “If you wish to discuss this decision, I would
be please [sic] to meet with you at any time you request.”
De Jesus testified that neither he nor the Union had received
any prior notice of the closing of the operation at West New
York and that this letter came as a complete surprise. In fact,
on the very same date, October 18, that de Jesus received the
Company’s notice he had prepared and forwarded a letter to
Edelson requesting a formal labor-management meeting regard-
ing two issues. The first concerned a continuing problem of
“car theft at the main (North Bergen) facility. The second issue
involved a concern that the employees at the West New York
facility have regarding their job security and the appearance
that there is an increase in jobbing out work. De Jesus stated,
“[T]he Union would like to know if there is any new business
plans in effect that may affect the job security of our members.”
De Jesus listed the names of five stewards he requested be pre-
sent at a meeting which he requested be held on November 8 in
North Bergen.
The following morning after receiving the letter, Thursday,
October 19, de Jesus telephoned the Company and got Edelson
on the line. De Jesus said he had in his possession this letter,
and could Edelson explain it. De Jesus said the Union was pro-
testing this letter and how is it that he is closing the factory with
no discussion and with no notice while the Company and the
Union were involved in negotiations on an incentive piece-rate
system at the Company. De Jesus explained at the hearing that
these negotiations were over a proposal the Company had made
for an incentive program covering the work performed at the
West New York facility.
According to de Jesus, Edelson responded that the Company
just made a decision to close the West New York facility. That
it was a done deal. When de Jesus protested he couldn’t do it
like this Edelson said, ‘‘[W]ell, it’s done.’’ He said that the
work force at West New York had given him too many head-
aches. There were too many grievances filed. The people were
not accepting the piece rate proposal that they put forth At this
point he just had to make a decision to close. That it was not
cost effective and it was too many headaches.
De Jesus protested that the way he was proceeding was abso-
lutely wrong. He also told Edelson about the letter he had sent
him requesting a meeting because of layoffs and now Edelson
was closing the whole factory down. De Jesus said he needed to
meet right away. They agreed to meet the next morning, Octo-
ber 20, at the company offices.
At this meeting, representing the Union were de Jesus, Judy
Cortez, president of Local 2052 and chief steward at the West
New York facility, Dionisio Melo, vice president of the Local
and a member of the steward’s committee at Respondent, and
Carlos Bernard, chief steward of all of Westchester Lace. Both
Melo and Bernard worked at North Bergen. Respondent was
represented by Edelson and a woman assistant, Dale Polace.
The union delegation announced its protest of the decision to
close, but requested an explanation. Why was he doing this and
what was happening. Edelson proceeded to explain that
they’ve had it with the problem at West New York. They’ve
had it with grievances. They’ve had it with the fact that work-
ers would not agree to an incentive piece-rate proposal they had
made, and the work would be done cheaper elsewhere. With
this comment the record reflects that Edelson, who was present,
in an outburst showing a lapse of discipline and judicial deco-
rum, spoke up to say, “I never said that.” (Tr. 33.) De Jesus
went on to report that Edelson commented that the workers
were a headache, they’ve closed the factory before in Puerto
Rico and brought the operation here and they are ready to close
it here and they’re doing it now, and they wanted the Union to
stop being a headache.
When De Jesus asked what grievances are you talking about,
Edelson could not identify any of them. De Jesus noted that the
parties had spent the past 7, 8 months negotiating an incentive
program and had engineers going to the factory and now all of
a sudden he is closing the factory with no notice. De Jesus
commented that with the closing scheduled for the 27th, this
was only 5 workdays’ notice. At this point de Jesus said that
Federal law generally respects a 60- to 90-day notification of
the work force if your going to intend to close a place, and that
the Company was not doing this. De Jesus also said that Edel-
son is committing an act that hurts not only West New York,
but it sends a chilling message to the entire factory. De Jesus
asked, “[A]re you saying you could do this whenever you feel
WESTCHESTER LACE, INC. 1231
like it?” Edelson said, “[Y]es, if I have to close down the
whole building, I’ll close down the whole facility.”
When de Jesus asked why they couldn’t have enough time to
discuss this, because we’ve been discussing other issues any-
way, Edelson noted that if he had given advance notice it would
have allowed for workers to sabotage production. De Jesus,
incredulous, replied, “[S]abotage production, what are you
talking about?” Edelson now made an accusation that workers
at the factory the previous day stole a copy machine. To de
Jesus’ knowledge, no employees were ever accused and no
police report was ever filed.
De Jesus remonstrated that if closing was an option it was his
obligation to have been discussing it with the Union. It was
never discussed. Edelson repeated the closing was a done deal.
There is no more discussion. Under no circumstances was he
going to reopen this factory. He also revealed that he was sub-
contracting to a company called All-Lace. Edelson did not
disclose the nature of any agreement with All-Lace or its owner
or the fact that under a proposed understanding which would be
executed some 6 or 7 months later, he, Edelson, would become
a 50-percent owner of Silverman Lace, whose co-owner also
owned All-Lace.
De Jesus voiced his view that his actions were going to be
viewed as an attack on the entire work force, because he is
sending a message that he could close the factory whenever he
felt like it. Edelson affirmed that he could close the factory
whenever he feels like it and the Union is not going to stop him
from doing that and that if de Jesus and the stewards persisted
in being a headache he was going to close the factory, the entire
operation. Edelson asked the union delegation to be coopera-
tive. De Jesus took this to mean that he was asking the Union
to accept whatever decisions the Company made.
As the meeting closed de Jesus again protested the closing of
the factory and urged it to remain open, especially given the
fact that the same work was still being done but now with a
nonunion facility. It was not that the work doesn’t exist. The
work existed, but its just that our members are not doing it be-
cause we’re a headache. We file too many grievances. We
oppose his incentive program the way he proposed it because
we were negotiating.
Before closing the meeting, de Jesus mentioned issues which
would have to be discussed and negotiated, such as severance if
the closing went ahead in spite of the Union’s protest. Edelson
told the union delegates, flat out, there’s no severance. There is
no recall. This is a done deal, it’s not going to be turned back.
de Jesus said that was not acceptable but the delegates would
have to meet with their membership and pursue what’s going to
happen to these workers who were going to be without benefits.
Edelson mentioned that he would be willing to retain the pre-
sent employees on the medical plan. What this meant was that
the Respondent actually continued coverage of the medical plan
for 1 month after the closing so that employees could file for
continued coverage on their own under COBRA.
The parties met again, pursuant to agreement on Wednesday,
November 8. This was the date de Jesus had originally re-
quested for a meeting to discuss lay off matters at West New
York before he received notice of the closing.
On November 8 the same participants for each side met, but
in addition Ted Hoffman, Respondent’s director of manufactur-
ing, attended a part of the meeting, and on the Union’s side,
Melo was absent. By this date, the West New York facility had
been closed a week and a half, and all of the 23 employees had
been terminated.
The Union’s position, expressed at this meeting, was that
Edelson should immediately recall everybody and that opera-
tions should be resumed. It was wrong that Edelson sent the
work to All-Lace and it was wrong that this group of workers
who were presently involved in a discussion on an incentive
program should be thrown into the streets. Edelson responded
it was completely out of the question. It’s a done deal. There
is no discussion on this. Edelson repeated what he said previ-
ously, that this grouping of workers are a headache. They file
too many grievances. They would not agree to the piece rate.
And he could get this work done cheaper somewhere else. He
said times are rough, competition is hard and he cannot con-
tinue to run his operation and he demanded that the Union co-
operate with him.
De Jesus protested that the Union had been cooperating. He
mentioned he actually pushed these workers—this whole build-
ing—to accept even the concept of an incentive program and
piece rate, that was a struggle for him to convince the workers
to do that. De Jesus went on, the grievances you talk about, in
fact in that whole period there were probably no more than two
or three official grievances ever filed.
Edelson now got upset and said, “[L]ook, if the Union con-
tinues to be a headache I’ll just close the whole facility down.”
De Jesus accused Edelson of threatening them with closing the
whole factory down because we are trying to protect people’s
jobs.
It became obvious to de Jesus at this meeting that he was not
going to reverse the decision to contract out the work to All-
Lace. Edelson disclosed that he had some form of relationship
with the Company Silverman and All-Lace, which could be that
of partial owner and that there had always been subcontracting
to All-Lace. But, as de Jesus pointed out, the Westchester Lace
employees were not doing the work and All-Lace is. De Jesus
now stated that if he refused to recall the people then we would
have to enter into discussions of severance pay and for him, de
Jesus, to get back to the workers. Edelson said forget it. No
discussion on severance. The issue at West New York was
closed. He was not going to consider that at all. The only thing
he would do was make sure that whatever he was obligated to
do under the contract up until that moment he would comply
with. He was not going to do anything outside of that and there
was no discussion for it.
Following the Union’s filing of its initial charge in this pro-
ceeding on November 17, 1995, a few weeks later in early De-
cember shortly after Edelson received a copy of the charge on
November 29, Edelson left a phone message for de Jesus. The
following Monday, when de Jesus returned the call, Edelson
asked him, “Eddy, what are you doing, have you talked to the
Union lawyers?’’ De Jesus said he had. Edelson asked, “[H]ow
come your doing this, why are you filing this charge, what is it
you’re trying to do?’’ De Jesus said, “[W]ell, Mr. Edelson, you
forced us into a corner. You don’t want to discuss anything
with us. You don’t agree that it was wrong. The impact it has
on the whole factory.” Edelson then said, “[Y]ou know, the
Union won, the Union always wins.” When de Jesus asked
what he meant, Edelson replied, “[Y]ou know what I mean.”
When de Jesus asked, does that mean you’re going to call peo-
ple back or negotiate severance, Edelson didn’t respond, but
kept repeating, the Union won.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1232
In a second phone call Edelson made to de Jesus that day,
Edelson told him I have my original position, there is no dis-
cussion, our position stands and I’m giving you notice right
now that by next October, if the Union continues to give me
this headache, the factory will be closed.
By the time of the hearing in December 1996, the North
Bergen facilities remained open, but the scallop-cutting work
was still being done by All-Lace.
Further examination of de Jesus by union counsel disclosed
that the West New York facility had previously employed close
to 40 employees. Of the 23 employees who were laid off on
October 27, seniority with the Company ranged from 18 to 10
years to 3 years. On the topic of recall rights which de Jesus
had raised, particularly at the second meeting, Edelson said
even if he did recall any employees, it would not be in accor-
dance with seniority. It will be recalled that the collective-
bargaining agreement in effect at the time required laid-off
employees be recalled in each department on a strictly seniority
basis.
Note has been taken of the Respondent’s efforts to establish
piece rates at the West New York facility, the Union’s refusal
to the date of closing to agree to the Respondent’s proposal and
de Jesus attributing to Edelson references to the Union ada-
mancy on this issue when explaining to de Jesus why Respon-
dent made the decision to close the facility and contract out the
work.
The Respondent’s piece rate proposal had its genesis in an
arbitration proceeding under the contract in which hearing was
conducted in July 27 and October 11, 1994, and an opinion and
award was issued by Arbitrator Robert Light on November 27,
1994. In his award Light recounts facts showing that after
opening the new operation Director of Operations Hoffman told
the employees he expected increased work performance and
their performance would be measured against all those in their
department performing the same job. Two employees, scallop
cutter Moses Morales and straight cutter Aida Rentes, were
then terminated on November 4, 1993, for poor performance
based on a series of evaluations.
At the arbitration, these dismissed employees were repre-
sented by de Jesus and Cortez. The arbitrator deemed persua-
sive the argument made by the Union’s representative that the
Employer had unilaterally increased the work quotas against
which these workers were being measured without the agree-
ment of the Union and without going to its own arbitration in
violation of section 2.4(b) of the collective-bargaining agree-
ment which, as I earlier noted, prohibits changes in present
workload or workload assignment unless by mutual agreement
or by an arbitration award. Accordingly, he concluded that
these employees were not properly discharged. He ordered
them reinstated, but without backpay, and further, directed the
parties to meet pursuant to section 2.4 of the contract for the
purpose of establishing mutually satisfactory production sched-
ules.
It was pursuant to this award that Respondent prepared an
incentive program for West New York which de Jesus testified
was received by the Union in October to November 1994, but
which I find was prepared and received by it after the award,
probably in December.
The document comprising the program consisted of a first
page describing it as experimental and explaining how it would
be applied to machine operations with the incentive payments
based on making a specific production per hour for 8 hours per
day. It also contained a second page setting forth the specific
production goals per hour for each category of worker, includ-
ing splitter, scallop cut, straight cut, hand winder, machine pile
winder, and machine traverse and the incentive payment for
each inch or yard of work performed above the goal or quota.
Either in December 1994 or later, Hoffman also forwarded to
de Jesus a handwritten proposal detailing a progressive disci-
plinary system leading to termination for employees who fail to
meet the acceptable minimum production standards.
During his cross-examination, de Jesus described the Un-
ion’s response. He informed the Company the Union had no
objection to commencing the process even though it had to be
discussed. De Jesus met with the bargaining unit employees at
West New York and they selected a negotiating committee. As
the next step, de Jesus solicited an engineer from the Union to
review the Respondent’s proposals and to do a timestudy of the
operations, in question. That timestudy commenced in January
or February and proceeded into the summer of 1995. There
was some delay in completing the timestudy because some of
the Company’s machines were not in full operation at the time
the engineer was available. There was also a problem in coor-
dinating a time when the engineer, who traveled extensively for
the Union, could be present with respondent managers. Al-
though progress had been made in reaching agreement on some
production quotas for certain operations, others were still in
dispute by mid-October 1995 when Respondent announced the
closing.
Thus, by May 11, 1995, the Union’s timestudy engineer had
provided a summary report to de Jesus covering timestudies
made over the past several months. In all cases in which the
machine were available, the engineer’s recommendation was to
lower the production per hour which had to be achieved in or-
der to start to receive incentive pay for production in excess of
those figures. On one operation, pile winder, the operation was
unavailable for study. Then by a document dated June 15,
1995, de Jesus forwarded to Hoffman the Union’s response. It
consisted of two parts, the first were a series of comments on
the Company’s “language policy” on incentives, which had
made up the first page of the Company’s December 1994 sub-
mission. Here, the Union disputed company proposals on no-
tice of discontinuance of the program, requested clarification as
to calculation of overtime and incentives and made a counter-
proposal to soften the Company’s proposed policy of forfeiture
of 30 percent of incentive pay for absences in excess of 5 days
in a 6-month period, including disputing any forfeiture at all as
a double penalty for the absent employee, and opposing another
Company proposal requiring 98 percent of production to be
first quality to avoid a day’s forfeiture of incentive pay, but
providing counter proposals of its own on this subject. The
Union made other suggestions, to establish a joint incentive
committee to meet weekly, to monitor or settle issues such as
equitable distribution of good and “bad” materials, disputes
which may arise regarding bonuses, timestudies or rates due to
changes in style, materials, improvement, or changes in equip-
ment, etc., and whether a grievance may exist requiring work to
be reviewed by an engineer.
In the second part of the Union’s response, de Jesus set forth
minimum production to qualify for incentive, with two col-
umns, one at 100-percent production and the other for the
minimum expected prior to discipline, providing only a tenta-
tive proposal as to the machine pile winder pending final rec-
ommendation by the Union’s engineer.
WESTCHESTER LACE, INC. 1233
On this submission, de Jesus noted the Union had not yet
made a counterproposal on the incentive payment amounts, and
would prefer a mutual discussion. De Jesus apparently also
forwarded the Union timestudy engineer’s summary report.
De Jesus visited the West New York facility at least once a
month. It had only one shift and performed scalloping and
winding operations and shipping and receiving work in a ware-
house section. He also described conversations with Judy Cor-
tez, the Union’s chief steward which led him to write his Octo-
ber 18 letter to Respondent. She told him that in September
there had been an employee layoff of an unusual nature. When
she questioned the plant manager, Kenton Metz, she was told
there was nothing to be concerned about, and the layoff was not
unusual. However, the September layoffs, unlike prior ones,
were made without informing the employees involved of a date
for recall. In September, de Jesus was still discussing the pro-
posed incentive program with the Company.
De Jesus also noted that after receiving his own letter from
Respondent informing the Union of the closedown, he learned
from a message left on his home telephone late Wednesday
evening, October 18, from Steward Cortez, that Respondent
had also informed the West New York employees of the clos-
ing. This notice to employers was probably made orally. Not
until October 20, the day of the first union/respondent meeting,
did Westchester Lace provide a formal notice in writing to its
affected work force. In it the employees were informed of a
permanent lay off effective at close of business on October 27,
and, also, that medical coverage, however, would be continued
through November 30, 1995, at which time they would be eli-
gible to be covered under COBRA. Respondent accompanied
the notice with forms and rates to be completed and returned by
November 30 for continued medical coverage under the
COBRA program.
Under cross-examination, while de Jesus acknowledged that
Respondent had a practice of subcontracting some scalloping
work in the past, it had never resulted in the replacement of
union workers. It was always supplemental. This meant that
when the full complement of workers was not sufficient to get
the work done, some work was then subcontracted. But there
was never a substitution of the unit work force and in this in-
stance by a nonunion subcontractor. Prior lay offs had occurred
when the scalloping work was slow and those instances had not
been brought to his attention by the stewards until the unusual
September layoffs.
De Jesus clarified that at the point when Edelson spoke of
having the work done cheaper somewhere else, he had not yet
mentioned All Lace and de Jesus assumed that when All-Lace
was ultimately mentioned, Respondent was getting the work
done cheaper there.
While de Jesus acknowledged that Edelson, in their meet-
ings, referred to work being slow, he was not informed then or
at any earlier time of any change in product mix between all-
oversee (wide band lace) and narrow band lace, which included
the scallop lace produced at West New York.
De Jesus confirmed on cross-examination that at the meet-
ings with Edelson he had raised the issues of, recall of the laid-
off employees into existing operations at the North Bergen
facilities and severance pay, both of which Edelson summarily
denied and refused to discuss, and when the stewards raised
questions of existing contractual benefits like vacation and
holiday pay, Edelson agreed to do whatever Respondent was
obligated to provide under the collective-bargaining agreement.
When pressed about union proposals made at the meetings,
de Jesus mentioned that at the second meeting on November 8,
in connection with his plea to reopen the facility, after recalling
the employees and putting everybody back into operation he
would sit down and discuss the gravity of the problems facing
the Company and mentioned the use of engineers and consult-
ants in factories represented by the Union and worker participa-
tion with management as aids in solving production problems.
But at this point, aside from having referred to the contracting
out of the scallop cutting work and thus closing down the West
New York operation and the competitive problems faced by the
Company in general terms, Edelson had not disclosed any
changes in the nature of the production mix or any other pro-
duction problems which may have caused him to close the fa-
cility. Thus, the Union was not in the position to make con-
crete suggestions, or offers or concessions to influence Respon-
dent’s decision, since Edelson had not disclosed any grounds
for his decision, other than his concern with continual union
complaints and grievances and its failure to have agreed to
Respondent’s proposal for a piece rate system in the facility.
During a union reexamination conducted of de Jesus, de Je-
sus referred to a letter he had sent to the Respondent prior to
receiving notice of the contracting out, seeking a meeting to
finalize discussions on the incentive program. That letter was
not produced or offered. It clearly was not the letter dated Oc-
tober 18, 1995, in which de Jesus sought assurances to assuage
employee anxiety regarding their job security. But de Jesus
confirmed again that by October the parties had reached agree-
ment on standards and rates governing most of the machines
and operations studied under the incentive program, and that
with respect to only two operations, unspecified, did the Union
dispute the Company’s proposed rates as being tight, i.e. requir-
ing production levels that were too high in order for employees
to qualify for incentive pay. And even as to these two opera-
tions, the Union was willing to present to its membership what
the Company had presented in support of its position in setting
these production standard and rates. In September, de Jesus
had informed Respondent West New York Manager Kenton
Metz at a meeting concerning the incentive proposal that he just
needed to meet with those workers assigned to the two opera-
tions on which differences still remained to arrive at a final
recommendation which very well could have led to a closure on
the incentive plan and final agreement with Respondent. In de
Jesus’ view, the Company was well aware in October 1995 of
the Union’s position of basic agreement to introduction of an
incentive pay system at West New York and that the parties
were close to final agreement on its terms.
In a later re-cross examination, de Jesus explained that he
and the Union took the Respondent’s proposal on an incentive
system very seriously because it included provision for dis-
charge of workers who failed to meet minimum production
goals. As a consequence, it became a complicated matter to
reach agreement with the Company on rates which, if not
achieved or achievable, could result in termination.
Dionisio Melo, the union vice president and assistant steward
at West New York, testified about the October 20 meeting
which he attended as a member of the union delegation. He
corroborated de Jesus’ testimony in which Edelson attributed
the closing to problems he was having with the workers, and
their failure to accept the Company’s piece rate plan. When de
Jesus sought to persuade Edelson not to close the plant he fur-
ther corroborated de Jesus’ testimony that Edelson responded
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1234
by saying that if the Union kept giving him a hard time he
would have to close the rest of the plant.
According to Melo, in describing the problems Edelson
spoke about four employees having fights and giving a hard
time to the supervisor, and the many grievances filed against
the Company. Consistent with de Jesus, Melo ascribed to Edel-
son the comment that it was cheaper to send the work out than
retain it at West New York.
During his cross-examination, Melo acknowledged that he
had not mentioned in his pretrial affidavit given to the Board
anything said by Edelson about grievances at the October 20
meeting. Melo also agreed that among other things, Edelson
complained about worker productivity at this meeting.
Melo described changes in the product mix in the lace indus-
try over 18 years of his employment. When Melo started in the
industry production was almost all of narrow band, with and
without scallop cutting. The market started changing 5 to 6
years ago, and by November 1995, 45 percent of production
was of all over, wide band lace, 35 percent was of scallop cut
narrow band lace, and the balance was narrow band thread
pulled lace.
Ted Hoffman, Respondent’s director of manufacturing, de-
scribed in detail as a Respondent witness the nature of the
changes in Respondent’s lace production. In the manufacturing
process, yarn is purchased, transformed into knitted forms at
the North Bergen facilities, and dyed and finished there as well.
Respondent produces three types of band lace, scallop cut,
thread drawn, and all over lace. Five years ago all lace was
produced at the North Bergen facilities and in Puerto Rico. In
1993, because of space requirements and in order to make the
operation more efficient, the scallop cutting operation was relo-
cated to the West New York facility. The wide band lace is a
wide piece of goods measuring anywhere from 48 to 110 inches
in width. This lace is either cut or thread drawn to reduce its
width to very narrow bands. The scallop (and straight) cutting
reducing the width to as little as 1 or 1/2 inches has been per-
formed at West New York since 1993, while the thread pulling
or drawing operation to narrow the lace is performed at North
Bergen. The wide bands were shipped by Respondent’s own
trucks to West New York where the cutting was performed, and
then shipped back to North Bergen for preparation and shipping
to customers.
In 1991, the Company was mainly producing narrow band
lace. Ninety-four percent was narrow band and 4 percent was
over all. Until 1993 when West New York opened, between 25
and 40 percent of the scallop cutting work was contracted to
outside firms who performed all of the work later assigned to
West New York, including cutting, and breaking down the wide
spools of lace, putting it on narrow spools, packaging it and
returning it to North Bergen ready for shipping to customers.
The scallop shapes were always made on the knitting machines
maintained and operated at North Bergen.
West New York always operated one shift only. When the
decision was made to open West New York in mid-1992, Re-
spondent purchased some additional and different type of
equipment for installation there. Beginning in 1993 Respon-
dent started training some workers who were then on lay off
from the second shift at North Bergen. They were recalled all
during 1993 and assigned to West New York.
As early as 1994, Hoffman spotted a trend developing, based
on customer orders, away from narrow band lace and toward an
increase in orders for all over lace. He started tracking the
production mix based on orders in 1995. By March 1995 the
mix was 60.7-percent webs—the unit of production—of all
overs, 22.7-percent scallop cut and 16.6-percent thread drawn.
When he started with Respondent in 1991, 94 percent of its
production had been narrow band and only 6 percent had been
all overs. In early 1993, Respondent wanted to modernize and
spend a lot of money because scallop cutting was still a signifi-
cant part of its business. The change in mix was gradual over
1994 into 1995.
Hoffman disclosed that the most labor intensive work occurs
in scallop cutting, with thread drawing being less intensive and
all over (wide band) cutting being the least labor intensive.
Hoffman also described the variations in the size of the work
force at West New York, running from 29 at its start in January
1993, to 34 at the end of 1993, to a highest complement of 48 at
the end of 1994, and shrinking to 23 at time of closing in Octo-
ber 1995. As to the analysis Hoffman started making in March,
1995 of the dramatic changes occurring in the mix of produc-
tion styles, he admitted that neither he nor anyone else from the
Company provided the Union with any of the results of the
analysis.
Hoffman explained that what made scallop cutting highly la-
bor intensive were the series of steps required to be done by
workers from the time the spools of dyed yarn first arrive.
They first have to be split down into sections to make them
workable. Then these sections are scallop cut, straight cut, and
then wound around narrow spools. Other workers were also
required to move the yarn from one work station to another.
Significantly, since the complete contracting out of the scal-
lop cutting work in October 1995 to one subcontractor, All
Lace, the same procedure is followed as took place with respect
to the prior partial subcontracting to All-Lace and other firms.
Company owned trucks from North Brunswick continue to
deliver the prepared and dyed yarn to All-Lace, and the com-
pleted cutting work is returned by All Lace in its own truck to
North Brunswick, or, in the case of an emergency, Respondent
will pick the work up with its own truck. The invoice from All-
Lace does not break out separately the shipping costs. They are
just a part of the overall service which All-Lace provides. So,
the basic process continues as before the closing of the West
New York facility. Westchester Lace still prepares the mate-
rial, knits the yarn, dyes it and then sends it to All-Lace to be
cut and returned for shipping out to customers by Westchester
Lace. These customers are the same ones which Respondent
supplied with finished product prior to the shut down.
Interestingly, when the Puerto Rican facility owned by Re-
spondent was closed in 1994, it was closed because the demand
for the yarn it knitted there decreased as the demand for scallop
cut and band lace lessened. Some of its machinery was moved
to the two North Brunswick locations and some of it was
junked because it was obsolete.
Hoffman also acknowledged that during 1995, as the scallop
cutting work lessened, the remaining 23 workers at West New
York did not all work full time. As a consequence complaints
were filed about some full-time workers now working part
time.
When Kenton Metz began as manager of the West New
York facility in January 1994, he was able to plan a weekly
production schedule. He confirmed that by November 1994,
the facility started to receive less yarn for scalloping. In order
to compensate, after consultation with Hoffman, Respondent
shipped additional material into West New York to cut into
WESTCHESTER LACE, INC. 1235
very narrow webs or “skinnies” which provided more work for
the scallop cutters and increased the yardage count on an hourly
basis. These skinnies are narrow bands which are scallop cut
and also have a straight-edge side. Previously, the bulk of this
particular cutting work had been contracted out. The introduc-
tion of this work resulted in a problem, described by Metz, of
cutters having difficulty in maintaining a straight cut on the
scallop cutting machine and in overall production declining a
bit. As a result of these problems, Metz consulted with the
Union Steward Judy Cortez, but the problems were not re-
solved.
By March 1995, Metz also experienced difficulty in schedul-
ing production on a weekly basis because the particular very
narrow band materials which he had been receiving and had
arranged to cut, started to fall off and the mix of goods shipped
to West New York began to change. Since the work of the
various departments, including splitting, then scallop cutting,
then straight cutting and finally winding and then packing, are
closely interrelated in that each department in turn feeds the
next with the material it has processed, in planning work for
successive days, a continuous flow of work required a certain
overflow balance in order to feed work into the next department
for work for the following day.
Metz started planning and scheduling work on a daily basis
as he worked from a rush list requiring priority completion of
the work. As a result, particularly because he didn’t want to
run out of work for the following day, Metz started sending
employees home from different departments. For example, at
times he didn’t have enough webs for the employees in the
winding department to work 8 hours the next day, so he sent the
whole department home after 2 hours, but had to pay them for 4
hours under the contractual guarantee. This happened once or
twice a week starting in June or July. But this caused problems
with the Union. The union steward complained that a winder
sent home had greater seniority than a straight cutter and also
had experience in that work. Similarly, a scallop cutter sched-
uled for layoff who could straight cut and had seniority was
retained over another employee. Metz then had to select
straight cutters to leave work.
By June 1995, Metz testified his planning went from day to
day to hourly, as the daily production required varied greatly
both in volume and styles and widths within the narrow band
category. He informed Hoffman and laid off two employees
first in the scallop cutting and then later, employees in straight
cutting. Metz attributed part of the fall off in production to a
periodic “slow down,” i.e., what he considered a reduction in
daily production of finished webs of material by, e.g., the
straight cutters compared to their “normal” production. Yet,
Metz also spoke of a fall off in orders accompanied by an in-
crease in rush orders he received from the customer service
department and the problems the employees were raising with
the union steward over his selections of employees for layoff as
he tried to build up a backlog of work for the next department.
Furthermore, Metz was not asked nor was he able to point to
any evidence of a deliberate slowdown in production by par-
ticular employees. But Metz did conclude that he perceived the
“slowdown” as a form of retaliation against him for his daily
layoffs and disputed selections of employees for layoffs. Metz
did not consider it a serious enough matter to inform the Union
that pay would be docked for those employees participating.
Nor was it a reason for the ultimate closedown and contracting
out of all the cutting work. He did speak to Steward Cortez
about the matter, and, at times the pace of production increased
only to go back down again. In some cases Metz disciplined
with writeups those employees he believed were responsible
and the Union countered with formal grievances claiming Metz
was making unnecessary quotas. All of these complaints were
reported daily to Hoffman.
Metz also had some problems finding enough employees to
work overtime, which was voluntary under the parties’ agree-
ment and/or practice. At the very same time he was seeking to
have some employees work overtime, others were being sent
home. Following the raising of complaints by Cortez on behalf
of unit employees, Metz had incidents of apparent vandalism
arise, including stopping up a toilet bowl with paper towels in
June and August 1995 and changing a pulley on a scallop cut-
ting machine causing its motor to burn out, also in June. After
the announcement of the plant closedown in October 1995, a
compressor which operated all of the machinery ceased func-
tioning requiring the attention of an engineer. Metz was unable
to determine who was responsible for these acts or whether
they were, indeed, in reaction to the layoffs. The toilet stop-
ping had begun well before the summer of 1995, and Metz had
locked the men’s bathroom and made a key available to the
employees. According to Metz, it was not a reason for the
plant closing. Also, a pulley had been changed and a motor
burned out before his tenure as manager. Only the disconnec-
tion of the compressor took place for the first time in 1995, and
that happened only after the closing was announced. Metz also
mentioned the theft of a photocopying machine at the time of
the closing but did not report it to the police.
Metz also began sending “skinnies” out to contractors to cut
so he could meet customer time demands for finished product.
In sum, the West New York facility was receiving both
fewer work orders in general and the orders which were re-
ceived were more unpredictable than they had been in the past.
And among the contractual obligations which Respondent had
to meet in this situation were salary payments made a few times
to employees who had no work, 4 hours of pay to employees
who were brought in and whose work ran out well before the 4
hours were up, and paying overtime to some employees while
others were sent home early.
As to the incentive plan, Metz testified under cross-
examination that he had participated in the development of
Respondent’s proposal to institute an incentive plan. The mo-
tive for the plan was to reward employees who were doing well
and to encourage other employees who were borderline produc-
tive to increase their productivity by providing them with an
incentive to work harder.
Under further cross-examination by union counsel, Metz
agreed that he had received a lot of flack from the Union Stew-
ard Cortez on the shop floor in 1995 and he reported a lot of it
to his superiors in the Company. On one occasion he let Leo-
nard Edelson know directly in a personal discussion about the
protests and complaints he was receiving from the Union on the
shop floor. Metz also acknowledged that in the instances where
the Company was paying for 4 hours of work when employees
were being sent home short of working that time, this was add-
ing to the Company’s labor costs. Yet, the Union, to his
knowledge, was never asked to modify the contract language
which mandated these payments. Also, some occasions arose
where Respondent was required by its contract to pay time and
a half overtime pay to one or more employees called in to work
overtime during 1995. Yet, again Metz did not seek to modify
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1236
the clause in the labor contract requiring overtime pay for work
beyond 8 hours in a day. Neither did he bring this matter to his
superior, Hoffman. According to Metz, it wasn’t a serious
enough problem.
In explaining that prior to October 27, 1995, the work which
was contracted out was rush work which the customer service
department at North Brunswick told him was needed the next
day and, based on production in process, Metz knew he
couldn’t complete timely, Metz also acknowledged that the
contracted out work prior to closing West New York was work
over and above what the 20-odd employees could really pro-
duce when working at capacity.
Metz also agreed that with respect to his claim of an inten-
tional slowdown in effort, there were contractual provisions,
specifically sections 2.3 and 2.4(a) in which the Union agreed
that its members shall perform their work in a workmanlike
manner, in accordance with the instructions of the Employer,
and that every employee shall perform a full day’s work and
that the setting of arbitrary production schedules by workers is
contrary to this principle and the Union agrees to eliminate any
such condition. Another contractual provision, section 23.1,
prohibits slowdowns or strikes over workloads, among other
prohibitions. Yet, even with these contractual safeguards, Metz
did not file a grievance claiming breach of any of these sec-
tions. Nor did he complain to de Jesus or the steward to stop
the alleged improper practice. Metz did issue written discipli-
nary warnings to one or more employees for poor production,
which led to the Union’s filing of a grievance which may have
resulted in the arbitration award previously discussed.
Company records disclose that while de Jesus spoke of Sep-
tember layoffs there weren’t any in September, but there had
been 10 layoffs in April, with only 2 recalled, one each in May
and July, and 3 layoffs in August, none of whom were recalled
before the closing of the facility on October 27.
Hoffman resumed his testimony for Respondent by outlining
the history of the origin of the incentive plan, the Respondent’s
November 1994 submission and the Union’s response some
nine months later in June 1995. After receiving its response
Hoffman now testified, “[he] informed de Jesus that [he]
couldn’t agree with it and that we had no interest in pursuing
the matter, and I think it was dropped there. We did have some
discussions, but we couldn’t come to a conclusion, and I indi-
cated that at this point I wasn’t interested in pursuing it.” (Tr.
357.) According to Hoffman, this decision didn’t necessarily
have to do with the union engineer’s report or the merits of the
Union’s objections to the plan, but it was primarily based on
internal considerations and discussions about the feasibility of
continuing the West New York operation as it was structured.
Since Respondent was already looking into discontinuing that
operation, it would have been moot to try to conclude anything
on the incentive plan after the Union’s June response.
Hoffman’s recollection of his communication with de Jesus,
either by phone or in person, was not acknowledged by de Je-
sus who believed that, based on further discussions with the
Company after June, the parties were close to agreement and
only apart on two operations. Based in part on de Jesus’ genu-
ine surprise and dismay at the time of his belated receipt of
Edelson’s notice of plant closing, as well as the general credi-
bility of his testimony, I do not credit Hoffman that he made de
Jesus aware of his thinking and lack of interest in reaching
agreement on incentives. Indeed, in testimony almost immedi-
ately following his quoted remarks, Hoffman could not recall
having any further discussions with de Jesus between their
alleged June discussion and October 20, 1995. Hoffman, when
pressed, could not recall de Jesus’ reaction to his refusal, fol-
lowing receipt of the Union’s engineer’s analysis and the Un-
ion’s modifications to the procedural language accompanying
the incentive plan, to engage in further discussions and his dis-
interest in now adopting the plan. Surely, de Jesus’ reaction
would have been memorable after the Union’s review and de-
tailed study of the Company’s proposal was now to become so
much wasted effort.
It should also be noted that Hoffman’s testimony here does
not preclude a certain resentment over what he perceived as an
inordinate delay in responding to the Company’s proposal and
the detailed criticisms of both the incentive standards them-
selves as well as the procedural provisions which accompanied
them. Hoffman frankly admitted being upset over the length of
time it took the Union to come up with its response, during
which time the business was deteriorating in terms of the mix
of product. He also described the incentive program as a “rela-
tively simple undertaking.” (Tr. 360.) I am prepared to con-
clude based on the full import of de Jesus’ and Hoffman’s tes-
timony that Respondent, indeed, made its decision to close, at
least in part, on the basis of its perceived unwillingness of the
Union to embrace its incentive proposal in toto and permit it to
increase production and productivity on its own terms follow-
ing the Union’s thwarting of its earlier attempt, made unilater-
ally, to terminate employees who did not meet its perceived
production standards.
Hoffman, from March 1995 on, continued to see a continu-
ally changing mix, and an up and down daily amount of work
being put in for production at West New York. The mix
changed, in that Respondent was receiving fewer orders for
scallop cutting done on goods 1-1/4-inch wide and wider. Al-
though Respondent started cutting more skinnies in house, it
stopped doing this and started sending them out again in March
because although an extra winding machine had been added for
this work, according to Hoffman, West New York did not have
the right mix of equipment to produce the amount of skinnies
needed to satisfy orders of customers, some of whom were also
ordering scallop cut lace.
The investment on additional machinery and equipment that
was purchased for West New York in the startup there totaled
$200,000.
In addition to the suddenly changing nature of customer or-
ders, Hoffman referred to the more prevalent use of color and
the fact that customers wanted to approve the color before their
order was produced. Previously most production was in white,
black and beige. This lengthened the production process and
helped create the “spikes,” i.e., the daily variations in produc-
tion. These problems, coupled with an inability to plan produc-
tion overtime, because of a lack of backlog and lessened de-
mand, led Hoffman to conclude, according to his testimony,
notably in the summer, August or September 1995, that the
West New York operation wasn’t viable from a customer ser-
vice standpoint.
When Hoffman reached his decision regarding West New
York he discussed it with Edelson, informing him of the diffi-
culty they had in servicing customers, that the work was too
sporadic and they couldn’t plan their workflow properly. With
too many spikes, the unpredictable mix, they were unable to
service customers and get the goods out in an expeditious fash-
ion. By the end of September, early October, Edelson informed
WESTCHESTER LACE, INC. 1237
him of his decision to close the facility. They both determined
then not to announce it and keep it very quiet because Edelson
was afraid that it could impact the business until they closed,
there could be sabotage and “things” could happen that could
impair their ability to service their customers. Hoffman con-
curred and recommended providing a 10-day notice of the clos-
ing to the Union and work force. Hoffman was involved in
drafting the letter to the Union and a day or two later notice was
given to the employee complement.
Since the closing, all of the scallop portion of Respondent’s
business is being done by All-Lace, as an outside cutter. The
spikes and change in the mix have continued. The basic ma-
chinery and equipment used at West New York is still at that
location, in storage, disassembled, with some auxiliary equip-
ment moved to other warehouses. While it is for sale, it has not
been advertised, and there is no market for it.
On cross-examination, Hoffman testified that the problems
he had described were industrywide, that competition in the
industry, domestic and foreign, was intense, and some of Re-
spondent’s competitors were nonunion. Admittedly, unit cost
of production was an important factor in that competition.
Hoffman also viewed the proposed incentive system as both
lowering per unit cost as well as providing the customer with
faster and better service. The latter result expected from the
proposed incentive system, which Hoffman himself brought
forward in response to counsel for the General Counsel’s in-
quiry (see Tr. 382), would seem to have been a very important
benefit of the proposal for some one like Hoffman, who con-
tinually emphasized on the record the Respondent’s leadership
in the industry in providing the highest quality and most effi-
cient customer service and a fear that the West New York facil-
ity was not providing such service.
When the Union raised its objections and modifications to
the Company’s incentive scheme, after a lengthy delay which
upset him, he decided not to seek to resolve those differences or
to enter an agreement. Hoffman had also heard of employee
complaints about being sent home early and questioning selec-
tion for layoffs. But when Metz sought to discipline, writeup,
employees for poor production, Hoffman let him know that the
arbitration award forbid raising issues about minimum produc-
tion or quantity but he could warn for damaging goods. Hoff-
man was also aware, through Metz, about employee unhappi-
ness about not getting steady work at the time.
Hoffman went so far as to concede that one of the reasons
for the decision to contract out all the West New York work
was the Union’s lack of cooperation with and opposition to his
incentive/bonus plan. Furthermore, to the extent that early
union agreement to the Company’s November 1994 proposal
would likely have significantly improved customer service, by
increasing production and shortening the time to complete cut-
ting work, it is probable that this improvement would have
undercut Hoffman’s other stated reason for closing, that the
West New York operation was unable to service its customers,
properly. Yet, the scheduling problem as Hoffman explained it,
would have required additional capital investment in equipment
in order to meet an immediate upsurge in rush orders, while
also requiring additional overtime as well as continuing to re-
quire that certain departments receive less that full work until
they were able to build up a backlog. In a declining market,
generally, Hoffman was unwilling to recommend making that
investment. However, the unwillingness of enough employees
to work overtime was a problem which could conceivably have
been rectified by seeking modification of what Hoffman con-
ceived of as a voluntary overtime practice between the parties
and by making a full disclosure and seeking union cooperation
for its scheduling problems, neither of which did Respondent
seek to do. Clearly, Respondent did not take the Union into its
confidence at any time, neither before the announcement of the
closing nor afterward during Edelson’s two meetings with the
Union committee. Neither did Respondent ever seek to modify
contract terms or understandings which could have reduced
costs or ameliorated scheduling problems in the production
process. Neither did the Company apparently consider transfer-
ring the scalloping equipment and operation to North Bergen,
although it did move the compressor, which supplied power for
the cutting equipment, to North Bergen after the closing.
Hoffman also agreed during his cross-examination that there
had been no prior history of any closing of either North Bergen
plant or the West New York facility which could have provided
the Company with some basis to conclude that sabotage would
or would not be a problem if the Union was provided with ad-
vance notice beyond the 10 days that he and Edelson agreed
upon. In essence the claimed fear of sabotage was speculation.
In Hoffman’s view, the production and scheduling problems
that West New York had experienced abated after the contract-
ing out. All-Lace, because it was supplying cutting work to
other manufacturers in addition to Westchester Lace and be-
cause of its different equipment, was better able to plan ahead
and avoid the “spikes” that Westchester Lace had experienced.
Yet, Hoffman did not know how many employees All-Lace
had, and if they had the same number or fewer employees than
West New York, how they could do the work quicker than
West New York. Hoffman also claimed that in terms of costs
the contracting out resulted in a wash, i.e., there was no saving
as a result of contracting and no additional cost.
On the subject of the Respondent’s incentive proposal,
Hoffman felt the Union’s response to what he described as “a
simple engineering study” was too long. He also found that
response basically unacceptable. Hoffman also could not deny,
although he could not recall, that he may have met with de
Jesus over the summer of 1995, following receipt of the Un-
ion’s June counterproposal on production minimums and stan-
dards for imposing discipline for failing to meet them. Hoff-
man now also acknowledged that although he felt further nego-
tiations on the plan were moot because a decision was being
made to close the facility, “[he] never informed [de Jesus] that
we were considering closing the shop.” (Tr. 414.)
Hoffman also related that sometime in 1993 or 1994, the Un-
ion had refused a request he had made to stagger the contractual
work hours at North Bergen. Staggering work hours would
have been a boon for Respondent in scheduling and planning
work at West New York when the problems there intensified in
1995. There is no evidence that Respondent made such a re-
quest of the Union in 1995 regarding West New York work
hours.
In withholding notice of the closing to the Union, Hoffman
was unaware of any legal obligation on the Company’s part to
provide timely notice to permit bargaining about either the
decision or its effects. He had asked company counsel about a
possible requirement of a 60-day notice (probably under the
WARN Act) but had not investigated any possible duty or the
desirability of bargaining with the Union about the subject once
the decision had been made.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1238
During his cross-examination of Hoffman, union counsel
suggested that the parties’ collective-bargaining agreement did
not prohibit a strike over a plant closing, or a full contracting
out of unit work on bargaining over these issues and this
knowledge, in addition to a desire to avoid bargaining over its
decision to close and its consequences, contributed to the Com-
pany’s strategic decision to withhold notice.
While Respondent lacked the space in either North Bergen
facility, it could resume scallop lace cutting at West New York
if required to do so. Also, according to Hoffman, other space
could be rented in the same geographic area, to perform the
work previously done at West New York.
During his redirect examination, Hoffman stated the view
that nothing the Union could have proposed to modify or
change under its contract relating to increasing overtime work
hours, changing the hourly wage rate, or starting times of em-
ployees, or any other subject would have caused Respondent to
continue to operate its West New York facility. The causes for
the closing, not amenable to labor negotiations, resided in busi-
ness conditions, the change in the type of goods being de-
manded in the industry and the resulting changes in the produc-
tion mix. It was not a labor cost issue. And, in spite of an at-
tempt by union counsel to have Hoffman acknowledge that a
change to a two-shift scallop cutting operation at West New
York or at 3901 Liberty Avenue, North Bergen would have
permitted the work to be continued to be performed in house,
Hoffman rejected the two-shift concept as being able to solve
the spikes in customer demands which would have left Respon-
dent with unused plant capacity at certain times and not enough
capacity at others.
Leonard Edelson testified that he was the sole owner of Re-
spondent, and that he owned, as well, the real estate that com-
prised the West New York facility. At the present time it is
empty, had been for sale and was now under contract of sale,
and awaiting the contract buyer’s obtaining a commitment for a
mortgage, which was a condition of the sale.
As a consequence of changes in the industry, Respondent has
had to switch from previously producing narrow band lace, a
hallmark of its part success, to making all-over lace, which is a
much more competitive item and not as profitable. Respondent
has had to face foreign competition now, not only in the pro-
duction of the garment, but in the making of the lace overseas
as more companies in the far east, in particular, have purchased
lace machines and become more expert in their use. Respon-
dent’s advantage in producing all-oversee as against foreign
competitors is that the market demand is for quick production
and delivery within 2 to 3 weeks of an order.
Since the changes described, over the last 3 years, Respon-
dent’s sales have decreased about 10 percent a year and it has
not turned a profit. In 1996, for the first time, the Company
provided the Union with financial information as negotiations
were coming up for a successor agreement to the one expiring
on October 31.
Edelson testified he made the decision to close the West
New York facility at the end of September or beginning of
October 1995, for the following reasons which he described.
Sometime in 1994, when Edelson saw that the nature of his
business was changing, he learned that Silverman Lace was for
sale. Edelson was aware that Silverman Lace has sold only all-
overs for 40 years, and had an expertise and market share in
that sigment of that market. They did not manufacture, but
bought from his competitors, essentially acting as a jobber.
Edelson contacted Silverman Lace to arrange to acquire that
business. The acquisition would provide Westchester Lace
with an additional manufacturing base, whereby Silverman
Lace would buy same product from Westchester Lace and
Westchester Lace would do the knitting and dying for
Silverman Lace’s customers, and Silverman Lace’s sales peo-
ple would become integrated into Westchester Lace and thus
handle both Silverman Lace’s preexisting and Westchester
Lace’s current product lines, and a competitor would thereby be
eliminated.
Silverman Lace informed him they would be interested in
doing the deal but wanted Westchester’s scallop cutting work.
The person Edelson was dealing with was Key Gaetano who
was by this time the owner or majority shareholder and presi-
dent of Silverman Lace, as a result of purchase from Morris
Silverman, its long-time owner, as well as the president and
sole owner of All-Lace since its inception.
Since Edelson saw the future of the Company as well as the
industry, in producing all-oversee versus band lace, he likewise
saw the deal with Silverman Lace, including providing all his
scallop cutting work to All-Lace, as being in his best interests -
for the future.
When Edelson made his decision to discontinue and contract
out his scallop cutting operation he did not consider having
conversations with the Union over the elements of that deci-
sion. Whatever concessions the Union could have made, even
saving 10 percent of payroll costs, it would have comprised
such a small percentage of the total at a time when he was in-
terested in obtaining additional business to enhance the Com-
pany’s future, they would not have made a difference. None-
theless, in his letter to the Union, Edelson expressed his will-
ingness to meet and discuss anything they wanted to.
At the meeting on October 20, de Jesus told him that he,
Edelson, couldn’t close, he was going to meet with the people
who would not be happy if he closed, and if they have to do
anything to prevent this from happening they would do it. He
was very angry. Edelson, in turn got angry. He readily ac-
knowledged, without prompting that although, quite frankly, he
didn’t remember it, it is possible he said, well, if you do that,
I’m going to close the plant. Since Edelson had already in-
formed the Union of the West New York closing, he could only
have been referring here to a closing of the remaining facilities
in North Brunswick.
According to Edelson the meeting proceeded with de Jesus
asking about severance, benefits for the people, paying for their
medical leaves, and recall rights for the people being displaced.
Edelson’s response was that we have a contract. Whatever is
legal under the contract we will do and we will live up to that
contract. If we can find a slot for these people we’ll be glad to
take them back. Although seniority was discussed, Edelson
could recall nothing about it.
As to the demand for severance, Edelson said, if it was 5
years ago, we would have no problem discussing severance.
But right now we are in a very bad situation. We just can’t do
it.
As to the decision to close, de Jesus pressed him as to why
he was doing it and told him he couldn’t do it. He also said the
Company had to give a 60- to 90-day notice. Edelson admitted
he became very angry and responded that he had a right to do
this, i.e., to close the facility and let the people go in less than
10 days. Edelson explained that since he had discussed his
decision with counsel, de Jesus was misleading him and caus-
WESTCHESTER LACE, INC. 1239
ing the employee delegates present to get angry about some-
thing that didn’t exist and it was upsetting him. The meeting
ended with de Jesus stating he was going to meet with the peo-
ple and get back to him.
The next meeting, as earlier noted, was held on November 8.
Although Edelson could not initially recall how it was set up,
he subsequently recalled de Jesus calling him to set the date.
As earlier described, and as found here, November 8 was the
date de Jesus had originally sought in his letter of October 18 to
Edelson to discuss the troubling layoffs which had come to his
attention from Cortez, and this date was retained by the parties
and apparently confirmed for their next meeting following de
Jesus’ meeting with the employees.
Edelson testified that the second meeting was a duplication
of the first. De Jesus kept asking about reopening the West
New York facility and taking the people back. He also brought
up severance, medical benefits, recall rights. Although Edelson
volunteered now that at the first meeting “we had negotiated to
give him the medical benefits for one month,” other evidence
which I credit, including the Company’s memorandum to all
West New York employees dated October 20, which nowhere
refer to the Company’s decision to continue medical coverage
for 1 month as having been negotiated with the Union, as well
as legal requirements of sufficient notice of discontinuation of
medical benefits strongly suggest that Respondent’s decision
was dictated by COBRA legal requirements, and not made as a
counter offer to the Union’s demand for benefits following the
employees’ separation.
Edelson claimed, but offered no corroborative proof, that he
had offered seven of the West New York employees an oppor-
tunity to work for a week or two in North Bergen and they all
refused. One employee in that unit had been offered and ac-
cepted full-time work at North Bergen in packing and shipping.
In this regard, it was Edelson’s view, that although he had sepa-
rate contracts with the Union covering West New York, and
North Bergen, he was prepared to, and did consider, the West
New York employees as being eligible for employment at
North Bergen, provided they were qualified. Whether this posi-
tion covered all openings at North Bergen, and whether it was
of finite or of indefinite duration is unclear, and, clearly, Edel-
son never offered to state this position in writing, and thereby
make clear these recall rights included provision for notice to
the Union of any offers made, the availability of any openings,
the application of contract seniority provisions and agreeing
that the Union could grieve a failure to make an offer or a fail-
ure to employ a West New York applicant who responded to
such a recall offer.
As to the Government’s claim to restoration of the scalloping
cutting work and recall of the dismissed employees, Edelson
argued that it was not possible. By reopening the scallop facil-
ity he would be breaching his deal with Silverman Lace to pro-
vide all his scallop cutting work to All-Lace, thereby losing the
dying, knitting work and expanded sales derived from Silver-
man’s all-over business. This loss in turn would probably re-
sult in layoffs in various departments. Aside from the loss of
the Silverman deal, any restored scallop cutting operation
would still face the problem of not being able to provide the
proper kinds of services his customers required and it would
cost a lot of money. In estimating the cost of setting up the
necessary machinery and equipment which the Company still
retained in a disassembled state, Edelson guessed the cost at
$100,000 to $200,000.
Edelson confirmed that the contract of sale of the West New
York property was subject to a 60-day mortgage contingency
from date of contract, but he was not otherwise familiar with its
terms.
Under cross-examination by counsel for the General Coun-
sel, Edelson agreed that his decision to close West New York
was firm and had already been made when he sent the letter to
the Union. He had also decided to delay informing the Union
about the decision from late September for a certain period of
time, which Hoffman had testified, without conflict, was to be
until 10 days before closing. Edelson continues to receive or-
ders for scalloping work from his customers, and to fill these
orders, shipping to these customers, on receipt of the scalloping
work from All-Lace, after first having knitted and dyed the
goods and produced a finished product ready for cutting. The
only difference in this process before and after the closing is
that All-Lace’s employees perform the scallop cutting work
instead of Westchester Lace’s employees.
Edelson was also aware of the Company’s incentive plan
proposal and the Union’s delay in responding and he could not
understand why the employees would not accept it, particularly
since the Company had incentives in other portions of its opera-
tions. He was also made aware by Metz of employee unhappi-
ness about insufficient work hours and inequitable selections
for being dismissed early. And he was also aware of the Un-
ion’s successful challenge to the Company’s attempt to impose
discipline for poor production. Edelson also acknowledged his
expressions of anger at the October 20 meeting, in response to
the union representative disputing his right to close, going so
far as to acknowledge that he may have said he would close the
entire plant if the Union kept pushing “these things.” Nonethe-
less, Edelson incredibly denied that he viewed the Union’s
delay and objections to its incentive plan as being uncoopera-
tive conduct, and his denial is not credited. Neither is Edel-
son’s later denial, credited, made during his cross-examination
by union counsel, that he did not refer to the Union’s lack of
cooperation, grievances, complaints, and problems with the
work force and their gripes as reasons for the decision to close
West New York. De Jesus’ straightforward account and de-
tailed account of their October 20 and November 8 meetings is
credited.
Edelson further acknowledged that the benefits provided to
the unit employees at West New York, such as the 4-hour work
minimum, the requirement of overtime pay after 8 hours, the 12
or 13 paid holidays, made the contract a very good one for the
employees, but also expensive for the Company, per unit of
production, and “[t]hat’s why we’re having a hard time.” (Tr.
508.) Yet Edelson also disputed that he switched to All-Lace
because it costs less to contract out. Edelson asserted that it
cost him as much to pay All-Lace as it cost him when West-
chester Lace manufactured the lace. Edelson surmised that
perhaps All-Lace’s profit margin, whatever that may be, possi-
bly equaled Westchester Lace’s inefficiency and higher wages
when it performed the scallop cutting.
Significantly, on initial direct-examination Edelson was not
asked, and, consequently, did not deny that he informed de
Jesus and the employee union officers that the work could be
done cheaper elsewhere. (Although he did deny making this
statement in a courtroom outburst while not under oath.) I do
not credit Edelson’s extemporaneous denial.
Edelson further agreed that he never informed the Union of
scheduling problems at West New York, or that this was the
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1240
reason he had to contract out. Neither did he tell the Union
about the deal he had with All-Lace or Silverman Lace. Edel-
son explained that at the time, the deal had not been consum-
mated, and the union people who might lose jobs, could do
something that could sabotage the discussions. Edelman clari-
fied that what he meant by sabotage were the actions the union
has since taken to get Respondent to resume the operation and
therefore cancel out the deal with Silverman Lace like institut-
ing the instant proceeding.
At the time of the closing, the deal with Silverman Lace was
not wrapped up and they were in the process of having conver-
sation. Edelson was nonetheless prepared to close the facility
and take the risk because “there are many contractors out there
that we could have given the work to.” (Tr. 514.) Surprisingly,
the deal with Silverman Lace was not executed until May 17,
1996, 7 months after the closing and his notice to the Union,
with some aspects of it made retroactive to January 1, 1996.
Respondent never explained this delay.
At the present time, neither the facility at 3901 Liberty Ave-
nue nor the one at 3200 Liberty Avenue (the Hill) have suffi-
cient available space to perform the subcontracted scallop cut-
ting work. Respondent could rent space. The space required
runs from 10,000 to 20,000 square feet. Space which would
otherwise be available at 3901 Liberty Avenue is used for stor-
age of inventory of merchandise, both raw materials as well as
finished goods. Some parts of machines Respondent purchased
for dismantling for spare parts are presently stored at the Hill.
Edelson testified that the Respondent does approximately
$23 to 25 million worth of business annually. The total labor
cost is around $9 million, while the portion attributable to the
23 employees at West New York was roughly $400,000.
As for Respondent’s October 20 notice of closing to employ-
ees informing them of continued medical coverage through
November 30, Edelson could not explain who prepared the
memorandum or when it was prepared or what lead to its issu-
ance. In a second, undated typed memorandum directed to
employees on Westchester Lace letterhead, dealing exclusively
with medical coverage, employees are now finally advised that
their “group insurance benefits will terminate as of 11–30–95,
which is 30 days after the end of the month of you [sic] last day
of employment (six months after your last day of employment
if you are currently disabled). Under federal law (Cobra), you
may continue health and/or dental benefits for yourself and
your covered dependents for a period of 18 months. You will
be required to pay the full cost of the coverage’s you continue,
plus an additional 2% allowed by law.” The letter goes on to
list monthly premiums, described procedures on claims and
referred to an enclosed enrollment form and deadline for its
return. It is apparent this letter was prepared with assistance
from Respondent’s insurance carrier, and that Federal law dic-
tated the 30-day continued medical coverage, and not Respon-
dent’s willingness to provide continued medical coverage in
negotiation with the Union as a counter to de Jesus’ demand for
continued benefits. Edelson could not recall when he discussed
this 30-day continued coverage with Hoffman. He did recollect
that he announced it at the October 20 meeting. His final recol-
lection that as the meeting broke de Jesus asked him to do this
for the people is not credited. Not only did de Jesus deny that
this minimal benefit was the product of negotiation, but all of
the surrounding facts convince me that the decision was a mat-
ter of Federal law, given the requirement that some advance
notice be provided the plan administrator so that the timely
COBRA notice can be given to employees thereby providing
them the opportunity to purchase continued medical coverage.
Edelson agreed that at no time, from his written notice to the
Union dated October 18, through de Jesus’ telephone call, their
meetings of October 20 and November 8, did he inform de
Jesus or the Union about the Silverman Lace deal or problems
involving scheduling of hours of work, customer service or
turnaround time which factors were reasons for the decision to
close West New York or so that the Union could offer some
relief. Yet, Edelson was compelled to agree that in 1994 when
the New York State Labor Department raised questions about
the compliance of Respondent’s long-term North Brunswick
knitting department bonus plan with overtime pay require-
ments, he had sought and obtained union assistance in satisfac-
torily resolving the dispute. In 1995, at no time did Edelson
ever approach the Union to discuss employee scheduling of
hours of work or adjusting the collective-bargaining agreement
including overtime or seniority or any other provisions. Edel-
son did not know if Hoffman or Metz had done so. The testi-
mony of each manager precludes an such notice or discussion.
Neither did Edelson contradict nor respond to de Jesus’ testi-
mony describing two telephone calls he made to de Jesus in
early December, 1995 following receipt of the Union’s charge,
in which he exclaimed you won and threatened to close the
factory by next October if the Union continues its pressure to
reverse the closing. De Jesus’ accounts of those telephone calls
are credited.
Edelson also could not recall losing any scalloping custom-
ers in 1995 before contracting out all the work, and no scallop-
ing work customers canceled their orders in 1994 because turn-
around time was not satisfactory.
Edelson also agreed that when he provided financial infor-
mation to the Union in 1996, in connection with upcoming
negotiations, it was done at the request of the Union.
As to the sale of the West New York facility, the contract
price for the building and the land on which it sets is $500,000.
Edelson testified that he, personally had provided over $2 mil-
lion of bank loans as operating capital for Westchester Lace.
The proceeds of the prospective sale would provide a way for
Edelson to repay a portion of these loans.
The record was filled out with copies of the various agree-
ments covering the deal Edelson entered with Silverman Lace.
In one agreement, entered May 17, 1996, Gaetano and one
Bloom, the son of a nephew of Silverman, the original owner,
agree to sell and transfer to Edelson one half of their respective
shares of stock held in M. Silverman Lace, Inc., 50 and 16-2/3
shares, respectively, for the purchase price of $50,000, $37,000
to Goetano and $12,500 to Bloom. In addition to becoming an
one half holder of its stock as well as a director, a designee of
Edelson shall be a first vice president. In another agreement,
also made May 17, 1996, Silverman Laces, Inc., by its presi-
dent, Gaetano, agrees to retain Westchester Lace, Inc., by its
president, Edelson, as a general advisor and consultant begin-
ning January 1, 1998, for an annual fee of $75,000, plus actual
expenses, the agreement to cease if Edelson or any family
member cease to own a controlling interest in Westchester
Lace. In another agreement made May 17, 1996, Silverman
Lace agrees to employ and compensate Gaetano and Bloom as
president/chief operating officer and second vice presi-
dent/secretary and treasurer, Gaetano to manage its day-to-day
business and affairs, and Bloom to be in charge of production
and sales. In addition to the principal parties, Edelson also
WESTCHESTER LACE, INC. 1241
signed for Westchester Lace. Edelson is also indemnified in a
separate agreement, entered with Gaetano and Bloom, as an
inducement to becoming an officer and director of Silverman
Laces, against any losses or claim arising out of or based on all
assets of Silverman which do not exceed all of its liabilities on
its audited financial statement as of December 31, 1995, with
Gaetano and Bloom agreeing to make up any losses by Silver-
man Laces within 60 days after the deficiency has been deter-
mined.
Two separate requirements agreements, were each executed
on May 17, 1996 (with the execution date in each case substi-
tuted by hand for the original preparation date of January 1). In
one, Westchester Lace first agrees to give to All-Lace all of
Westchester’s business relating to lace cutting, provided the
prices charged by All-Lace are competitive with other cutters,
and All-Lace agrees to accept the work and perform or have the
work performed in accordance with the usual industry stan-
dards, with either party having the right of termination in the
event Gaetano ceases to own the controlling interest in All-
Lace or Edelson ceases to be a stockholder in Siverman Laces.
In the other, signed by Gaetano and Edelson, respectively,
Silverman Laces agrees to give to Westchester Lace all of
Silverman’s business relating to lace knitting and dying, pro-
vided the prices charged by Westchester to Silverman are com-
petitive with other knitters and dyers, and Westchester agrees to
accept the work in accordance with recognized industry stan-
dards. This agreement is also subject to termination if Edelson
ceases to be a stockholder of Silverman or to own the control-
ling interest in Westchester.
In connection with Respondent’s claim that its postcomplaint
conduct satisfied whatever obligation it may have had to bar-
gain about the effects of its decision to contract out its scallop
cutting work and close its West New York facility, I permitted
the record to contain some limited history of the parties’ nego-
tiations. In this respect the parties (the Union and the Com-
pany) stipulated and counsel for the General Counsel did not
dispute certain limited facts, with both counsel for the General
Counsel and counsel for the Union reserving their position that
these facts should not have been admissible under Federal Rule
of Evidence 408 prohibiting the introduction of conduct or
statements made in compromise negotiations. Union counsel
added a further ground for exclusion that the discussions com-
prising the stipulated facts were subject to an understanding
they were to be off the record. Counsel for the General Coun-
sel added two additional grounds for inadmissability; that bar-
gaining negotiations occurring after the unfair labor practice
cannot serve as a remedy about compliance with certain Board
mandated remedial requirements, and, both the Union and the
General Counsel assert, that, in any event, consideration of the
evidence offered belongs in the compliance stage of this pro-
ceeding and not in the initial underlying hearing as to Respon-
dent’s liability.
Those facts are that between May 14 and October 1996, the
representatives of the Employer and the Union had a series of
meetings and discussions about resolution of the dispute be-
tween them, which led to a tentative agreement subject to ratifi-
cation with union recommendation and was rejected by the
workers. The proposal was monetary with extension of recall
rights and a payout schedule. Ratification of the agreement
would have resulted in withdrawal of the National Labor Rela-
tions Board charge. The National Labor Relations Board set-
tlement coordinator (in Region 22), Margo Greenfield, was
involved in one discussion.
Union Counsel Larry Magarik represented that at the first
postcomplaint meeting between the parties they agreed that the
ongoing discussions of the settlement of the unfair labor prac-
tice charge was an off-the-record process and that this under-
standing was reiterated at every discussion in which he person-
ally participated, including the meeting with the National Labor
Relations Board representative present. Respondent’s counsel
noted that the parties conducted all aspects of their settlement
discussions, except for the one at which the Board’s settlement
coordinator was present, including the one at which they ar-
rived at their final tentative agreement, in direct contact with
each other. While Respondent counsel admits that there was
agreement at the first meeting with full committees and both
counsel present to conduct it off the record, such a condition
was not later renewed, and, in any event, as the subject of the
meetings were the issues normally encompassed inappropriate
effects bargaining, and discussed at a time when Respondent
was faced with a complaint proceeding alleging its failure to
bargain about both the decision and its effects, its conduct in
this regard should satisfy its bargaining obligations about the
impact of its decision on unit employees.
Analysis and Conclusions
I turn first to the allegations that about October 20 and No-
vember 8, 1995, Respondent threatened its employees with
closing of its business if they continued to engage in protected
concerted activity. Those were the dates of the meetings held
between Edelson and de Jesus and union stewards, including
two who were employees in the North Bergen facilities. I have
previously concluded, based on admissions made by Edelson
himself, as well the crediting of de Jesus’ testimony, as cor-
roborated by Dionisio Melo, vice president of the Union and
employee at North Bergen, as to Edelson’s statements made on
October 20 only, Melo not having attended the November 8
meeting, that Edelson, in response to union protests to his ac-
tion in closing West New York, exclaimed that if de Jesus and
the stewards persisted in being a headache, giving him a hard
time, he was going to close the factory, the entire operation.
On November 8, 1995, Edelson again became upset in the
midst of union protests to claims they weren’t cooperating with
him and again exclaimed that if the Union continues to be a
headache he would just close the whole facility down.
It is clear that the “headache” and hard time the Union was
giving to Westchester Lace was its past conduct in objecting to
and seeking to modify Respondent’s incentive pay proposal, its
complaints to layoffs and layoff selections, and its current ef-
fort at the meetings to get Edelson to reverse his decision to
close the facility. Each of these actions constitute a form of
protected concerted activity. The owner’s threat to close facili-
ties in North Bergen was thus a reaction to and retaliation for
the employees’ exercise of their Section 7 rights and violative
of Section 8(a)(1) of the Act. See, e.g., General Stencils, Inc.,
195 NLRB 1109 (1972).
The next issue I consider is whether Respondent discrimina-
torily terminated the West New York facility employees when
it contracted out all of the work performed there. I have al-
ready found that Edelson threatened to close all of Respon-
dent’s facilities if the Union continued to press him to continue
the West New York operation. Having also credited de Jesus’
version of their various interchanges, I have also found that
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1242
Edelson expressed irritation and hostility toward union efforts,
undertaken with some success, to reign in Respondent’s at-
tempts to unilaterally determine production standards and to
make personnel decisions involving allocation of overtime
work hours, selection for short workdays, and the like without
union consultation or compliance with seniority provisions.
The expression by Edelson of his hostility were made respon-
sively during meetings at which the Union was seeking to abort
his decision to close the West New York facility. The evident
inference arising from these facts is that Respondent was moti-
vated in significant part by the Union’s and employee’s con-
certed activities in making its decision to close the facility and
contract out its work. In dwelling on his litany of complaints
with the Union and the work force the credited testimony of
Edelson’s own remarks goes a long way to establishing unlaw-
ful motivation. In offering up the lame excuse of fear of sabo-
tage to explain his delay in disclosing his intent to de Jesus,
Edelson also reveals his true motive. The minor acts of vandal-
ism were never attributed to employees, most had taken place,
for the first time well before the current spate of layoffs and
short hours, there is conflict among Respondent’s managers as
to whether they contributed at all to Respondent’s decision to
close, they did not lead to serious adverse discipline and the
most serious item, conduct disabling the compressors took
place after Respondent had announced the closing. Respondent
probably considered more serious, the so-called slowdowns
which Metz reported to Hoffman and which Respondent con-
sidered another form of negative informal response to its per-
sonnel decisions.
Not only did Edelson express his hostility to the Union’s
noncooperative conduct, but Hoffman was particularly aggra-
vated by the Union’s delay and opposition to his plan to in-
crease productivity.
Based on the credited evidence I conclude that the General
Counsel has made a prima facie showing that the Union’s pro-
tected concerted activity was a motivating factor in its decision
to contract out all of the work produced at West New York.
Respondent nonetheless argues that the production problems
discussed and itemized by Hoffman establish that it would have
taken the action of contracting out even absent the Union and
employees’ Section 7 conduct, Wright Line, 251 NLRB 1082
(1980), enfd. 662 F.2d 899 (1st Cir. 1981), cert. denied 455
U.S. 989 (1982); NLRB v. Transportation Management Corp.,
462 U.S. 393 (1983). I reject this defense and find it lacking in
merit. Respondent never sought to test its claim that disclosure
and open engagement of the Union would not have ameliorated
or sufficiently reduced its alleged failure to provide fair service
to its customers. Since early in 1995, Respondent had been
utilizing subcontractors, principally All-Lace, in scallop cutting
its rush orders involving very narrow band lace, “skinnies,” and
West New York had been supplying all other scallop cutting
without customer complaints. Hoffman was frank in noting
that its failure to put the incentive program in place contributed
in part to Respondent’s decision to contract out all the work. It
is likely, or at least possible, that the incentive plan could have
aided in solving the current production and scheduling prob-
lems, along with modifications of the contractual benefits en-
joyed by the unit employees, which Respondent never sought.
Finally, while Respondent, Edelson in particular, appears to
rely on his deal with Silverman Lace as supporting a decision
free of unlawful motivation, the timing of the contractual
agreements show that at the time Edelson made his decision
and then belatedly announced it to the Union, this deal was not
consummated and the parties were just in a talking stage. Even
Edelson announced that he was prepared to close without that
deal and use another subcontractor.
I now turn to the allegation that Respondent failed to bargain
about its decision in violation of its bargaining obligation under
the Act. In analyzing the issue one has to take into account the
two lines of cases, represented, respectively, by Fiberboard
Corp. v. NLRB, 379 U.S. 203 (1964), and First National Main-
tenance Corp. v. NLRB, 452 U.S. 666 (1981). In Fiberboard,
the Court held that subcontracting issues are mandatory sub-
jects of bargaining if all that is involved is the replacement or
substitution of one group of employees for another to perform
the same work under similar conditions of employment. In
First National Maintenance the Court held that an employer
decision to shut down part of its business, which involves a
change in the scope and direction of the enterprise is outside the
scope of bargaining.
In Torrington Industries, 307 NLRB 809, 810 (1989), the
Board reaffirmed its application of the principles set forth in
Fiberboard, supra. Thus, where there is the kind of subcon-
tracting described, “there is no need to apply any further tests in
order to determine whether the decision is subject to the statu-
tory duty to bargain. The Supreme Court has already deter-
mined that it is.” 307 NLRB at 810. As a consequence, the
Board’s burden shifting test utilized in Dublinque Packing Co.,
303 NLRB 386 (1991), to determine whether particular man-
agement decisions affecting employees, other than pure
subcontracting, are mandatory subjects of bargaining, is
inapplicable. Nonetheless, the Board noted in Torrington
Industries, supra, that there may be cases where the nonlabor
cost reasons for subcontracting may provide a basis for
concluding that the decision to subcontract is not a mandatory
subject of bargaining. In these cases, the employer’s proferred
reason for subcontracting involves some change in scope and
direction of its business and is thus outside the scope of
bargaining under First National Maintenance, supra.
In determining that Respondent’s decision here is governed
by Fiberboard and Torrington, rather than First National
Maintenance and Dubuque Packing I note the following:

Although Edelson claimed that the cost of contracting
out to All-Lace did not result in any savings, and Hoffman
denied that any Union modifications of its contract would
have convinced Respondent to continue the West New
York Operation, I conclude that labor costs played a role
in Westchester Lace’s decision. I have previously credited
the two General Counsel witnesses who attributed state-
ments to Edelson at the October 20 meeting claiming that
he could get the scallop cutting work done cheaper else-
where and that it was cheaper to send the work out. Thus,
Edelson was clearly thinking about unit costs when he
made the decision to contract out all the work. In also
equating All Lace’s profit margin with Westchester Lace’s
higher wages and its inefficiencies of operation, Edelson
was impliedly acknowledging that its incentive plan if im-
plemented plus changes in its Union contract could have
resulted in cost savings sufficient to warrant continuing
the scallop cutting operation. By admitting that the Un-
ion’s delay and criticism of its incentive plan was a factor
in his recommendation to close, Hoffman was acknowl-
edging the role that efficiencies of operation, lowering unit
costs, could play in evaluating the continued viability of
WESTCHESTER LACE, INC. 1243
West New York. Further, until Respondent was prepared
to disclose its production problems to the Union, it is de-
cidedly unclear, in spite of Hoffman’s confident assertion
to the contrary, that negotiations could not have permitted
an increased ability to service customers properly, even
with continued judicious use of sub-contracting.

Even assuming labor costs were not a major factor in Re-
spondent’s decision, nonetheless, there is a lack of probative
evidence that its decision was based on a basic operational
change in the scope or direction of the enterprise. While Hoff-
man spoke of the necessity of making an additional capital
investment, presumably of machinery and equipment, in order
to provide customer needs for large volumes of rush orders, it is
far from clear that Respondent would have even been required
to make that investment were the Union to have been amenable
to major revision of its contractual work schedule and benefit
provisions, and had Respondent concluded an incentive plan
with the Union instead of withdrawing from final negotiations.
It is noteworthy also that Hoffman never sought to support his
bare assertion with any documentation or statistics showing the
need for additional machinery. Special customer needs could
still have been met by some continued subcontracting. De Je-
sus even offered to supply union efficiency consultants to aid in
the process.
The important point here is that Respondent has continued in
the same narrow band cutting business supplying the same
customers, but by substituting another group of employees for
its own. In doing so, Respondent has been unable to demon-
strate that it has changed the basic nature of its business. See
Dorsey Trailers, Inc., 321 NLRB 616 (1996). Neither Furni-
ture Rentors, 318 NLRB 602 (1995), on remand from Furniture
Rentors of America v. NLRB, 36 F.3d 1240 (3d Cir. 1994),
denying enforcement in relevant part 311 NLRB 749 (1993),
nor Oklahoma Fixture Co., 314 NLRB 958 (1994), relied on by
Respondent for the conclusions that its decision here was of a
core entrepreneurial type outside the range of bargaining, are
applicable. Although the Board accepted the remand as the law
of the case, its position still appears to be that productivity fac-
tors are amenable to bargaining. Furthermore, as I have con-
cluded, neither the alleged slowdown nor minor acts of vandal-
ism played a role in Respondent’s decision to close, and the
other factors involved in Furniture Rentors, damage to products
and customer complaints, are not present here. And the ques-
tion of legal liability present in Oklahoma Fixture Co. Is also
not present here. Finally, as the employer’s decision was
grounded on antiunion considerations, it cannot be a legitimate
entrepreneurial decision exempt from bargaining. See Mid-
South Bottling Co. v. NLRB, 876 F.2d 458 (5th Cir. 1989).
While Respondent argues that its agreement with Silverman
Lace was basic to its decision to contract out, the facts do not
support such a conclusion. That agreement was not in place
until many months after the decision to close was made and
Edelson was willing to arrange to contract out without the ulti-
mate benefits of the deal it has received for the other, knitting
and dying segments of its business. The dichotomy which ex-
ists between Edelsons’ explanation for the closing, based exclu-
sively on his Silverman Lace deal, and Hoffman’s efficiency
driven and customer and service based explanation, omitting
entirely the Silverman Lace and All-Lace Requirement Agree-
ments, show an internal conflict in Respondent’s reasoning
which must serve to undercut its claim of having made a man-
agement decision on a subject not amenable to resolution
through the bargaining process.
Inasmuch as Respondent evidenced a closed mind and un-
willingness to bargain about its decision to contract out all of
the work for its west New York facility, even delaying timely
notice to the Union in order to avoid real bargaining, about a
subject which I conclude relates to a traditional subject—
subcontracting—as to which the Board, with Supreme Court
approval has continued to require bargaining, and under cir-
cumstances which has adversely affected the tenure of the West
New York work force, I conclude that Respondent has violated
the Act by refusing and failing to bargain about its decision to
close the West New York facility.
Respondent has likewise failed and refused to bargain with
the Union with respect to the effects of that decision on its
work force. First, while Respondent did provide 10 days (5 to
7 workdays) advance notice of its decision to close the West
New York facility, the evidence I have credited portray an
owner unwilling to engage in any meaningful bargaining prior
to the closing. The Union’s attempts to raise issues of sever-
ance, recall, and extension of benefits were met informally with
summary rejection. Edelson’s offer to comply strictly with the
terms of the existing agreement—until closing—and his an-
nouncement extending medical coverage for 30 days beyond
closing fail to meet minimal requirements to bargain about the
effects on employees whose position were being permanently
eliminated. As I have also earlier explained, Edelson’s appar-
ently off hand offer of jobs on future openings in North Bergen,
without agreeing to bargain in detail about the parameters and
specifics of its application, including the application of senior-
ity rights as they presently applied to West New York employ-
ees, hardly comports with an obligation to bargain in a mean-
ingful manner an required by the Act. First National Mainte-
nance, supra at 682. Nathan Yorke, Trustee, 259 NLRB 819,
826 (1981), enfd. as modified 709 F.2d 1138, 1143 (7th Cir.
1983). Thus, not only was the time remaining to closing of
extremely short duration, when the Union raised issues it felt
required serious consideration, even while it continued to press
Respondent to keep the facility open to provide adequate time
to bargain about the underlying decision, Respondent’s nega-
tive responses made clear its unwillingness to deal with the
adverse impacts on employees, some with many years of loyal
service.
Respondent’s summary rejection of effects bargaining, con-
trary to Respondent’s contention, relieved the Union of any
obligation to continue to meet on the successive days leading to
the closing. Such meetings would have proved futile. Fur-
thermore, the Union was entitled, as de Jesus sought, to consult
with the workers to obtain their input.
By the time the parties next met, on November 8, 1995, the
facility was closed and the Union had lost whatever bargaining
power it could be said to have enjoyed while the facility re-
mained open. See Walter Pape, Inc., 205 NLRB 719, 720
(1973). Still, on that date, Respondent, by Edelson, continued
to stone wall de Jesus and the Union, refusing to consider any
benefits which might have ameliorated the hardships directly
flowing from the employees’ loss of employment. Thus, even
if the decision was nonbargainable, Respondent has failed in its
continuing duty to bargain about the decision’s impact. First
National Maintenance, supra. See also, e.g., Otis Elevator Co.,
283 NLRB 223 (1987); Vroman Foods, 309 NLRB 209 (1992).
Just as in Compact Video Service, 319 NLRB 131 (1995), enfd.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1244
121 F.3d 478 (9th Cir. 1997), the Respondent did not meet its
burden of demonstrating “particularly unusual or emergency
circumstances” that would have relieved it of the obligation to
provide the Union with effective preimplementation notice.
As to this issue of effects bargaining, Respondent nonethe-
less maintains that its subsequent negotiations, following issu-
ance of the complaint here, satisfied its bargaining obligations
in this regard. The parties’ stipulation shows that the negotia-
tions which commenced after complaint issued dealt with the
effects of Respondent’s decision to close the West New York
facility. At one of their sessions the Board’s settlement coordi-
nator for Region 22 participated. The successful completion of
the negotiations contemplated a withdrawal of the charge. No
agreement was reached as the unit employees rejected a tenta-
tive agreement in a ratification vote to which a final agreement
was made subject.
There is no doubt that Federal Rule of Evidence 408 prohib-
its these after-complaint negotiations from being admissible.
As noted by the Court in Vulcan Hart Corp. v. NLRB, 718 F.2d
268 at 277 (8th Cir. 1983), enfg. in relevant part 262 NLRB
167 (1982), “Rule 408 excludes evidence of settlement offers
only if such evidence is offered to prove liability for or invalid-
ity of the claim under negotiation. To the extent that the evi-
dence is offered for another purpose, and to the extent either
party makes an independent admission of fact, the evidence is
admissible.” See also Cirker’s Moving Co., 313 NLRB 1318,
1326 (1994).
Contrary to Respondent’s contention appearing at page 19 of
its brief, it offered the evidence of postcomplaint negotiations
solely to support its argument that the Governments’ claim that
it breached its duty to bargain about the effects of its decision is
invalid because it was satisfied by these negotiations, and not
for any other purpose. Thus, the offer of the stipulation of facts
fly’s in the face of the Rule 408 prohibition. See in this con-
nection, Contee Sand & Gravel Co., 274 LRB 574 at fn.1
(1985). It is noteworthy that in Barney’s Club, 288 NLRB 803
(1988), while the central issued in the case was whether Re-
spondent made an offer to bargain through a Board agent dur-
ing the investigation about the effects on employees of the clos-
ing of Respondent’s entire operation in violation of Section
8(a)(5) and (1) of the Act, a closing like the one in the instant
proceeding, the Board noted that insofar as the statements at
issue were made in the course of settlement negotiations, they
would be inadmissible, in any event, citing East Wind Enter-
prises, 250 NLRB 685 fn. 2 (1980), enfd. 664 F.2d 754 (9th
Cir. 1981), and the Federal Rule 408.
Apart from the foregoing, inasmuch as Respondent admits
that the first meeting between the parties was governed by an
off the record understanding, there is some reason to believe
that that understanding may have applied to all later discussions
which followed, even though not expressly so stated, and even
though union counsel was not in attendance at some of them. It
is likely that counsel wished to preserve that understanding for
all future negotiations which he may have expected he would
be unable to attend.
Finally, without regard to Rule 408 and a probable privacy
understanding, these negotiations took place after the facility
had closed, and thus without the conditions required by the
Board to be in place to assure meaningful bargaining and to
effectuate the purposes of the Act. In this case I have con-
cluded that the Respondent, inter alia, by withholding informa-
tion from the Union of its decision to close and subcontract
until close to the effective date of closing, deterred the Union
from effective bargaining over the effects of the closing. Had
the notice been given sufficiently in advance of the closing
before the collective-bargaining strength of the employees and
their Union had been dissipated, the notice would have pro-
vided a proper basis for effects bargaining. See Transmission
Navigation Corp., 170 NLRB 389 (1968). By starting to meet
after the employees had been terminated, at a time when the
Union and employees’ bargaining strength had been signifi-
cantly dissipated the negotiations could not be found to satisfy
Respondent’s bargaining obligation.
Respondent’s effort to equate union bargaining strength de-
rived from continued employment free from immediate termi-
nation, with the presence of an outstanding complaint as both
creating similar economic consequences for the employer, is
rejected. Respondent is attempting to construct a false relation-
ship. The Board has recognized in Transmission Navigation
Corp., id., that only by requiring a limited backpay remedy can
it provide in a practicable manner a situation in which the par-
ties’ bargaining position has some economic consequences. It
is entirely unclear whether in ultimately complying with its
bargaining obligation as to the effects of its closing, that Re-
spondent will suffer by virtue of a Board Order here any ad-
verse economic consequences, apart from its Transmission
Navigation backpay obligation.
CONCLUSIONS OF LAW
1. The Respondent, Westchester Lace, Inc., is, and has been,
at all times material, an employer engaged in commerce within
the meaning of Section 2(2), (6), and (7 of the Act.
2. Local 2052, NY-NJ Regional Joint Board, UNITE, is, and
has been at all times material, a labor organization within the
meaning of Section 2(5) of the Act.
3. The following employees of Respondent constitutes a unit
appropriate for the purposes of collective bargaining within the
meaning of Section 9(b) of the Act.

In the Respondent’s Separating, Winding, Scalloping, Cutting
and Dyeing Department--all employees in the plant excepting
general office help, salaried Foremen, salesmen and heads of
departments. The aforementioned exceptions do not include
receiving or shipping clerks.

4. The Union described in paragraph 2, above, is now, and at
all times material herein has been, the exclusive representative
of all the employees in the above-described appropriate unit for
the purpose of collective bargaining within the meaning of
Section 9(a) of the Act.
5. By threatening its employees with closing of its plant and
its business if they continued to engage in protected, concerted
activity, Respondent has been interfering with, restraining, and
coercing its employees in the exercise of the rights guaranteed
in Section 7 of the Act in violation of Section 8(a)(1) of the
Act.
6. By terminating its scallop cutting department and all of its
operations at its West New York, New Jersey facility, subcon-
tracting those operations and laying off the employees who
worked at that site, effective October 27, 1995, because those
employees joined and assisted the Union and engaged in con-
certed activities, and to discourage its employees from engag-
ing in these activities, Respondent has been discriminating in
regard to the hire and tenure and terms and conditions of em-
WESTCHESTER LACE, INC. 1245
ployment of its employees, in violation of Section 8(a)(1) and
(3) of the Act.
7. By engaging in the conduct described in paragraph 6,
above, without affording the Union an opportunity to bargain
and without bargaining with respect to this conduct and the
effects of this conduct on the employees in the bargaining unit
described in paragraph 3, above, Respondent has been failing
and refusing to bargain collectively and in good faith with the
exclusive collective-bargaining representative of its employees
in violation of Section 8(a)(1) and (5) of the Act.
8. The unfair labor practices of Respondent described above
affect commerce within the meaning of Section 2(6) and (7) of
the Act.
THE REMEDY
Having found that the Respondent has violated Section
8(a)(1), (3), and (5) of the Act, I shall recommend that it be
ordered to cease and desist therefrom and take certain affirma-
tive action designed to effectuate the policies of the Act.
Since I have concluded that Respondent discriminately ter-
minated the work force employed at its West New York facility
when it closed the facility and contracted out the work per-
formed at that facility, I shall recommend that Respondent be
ordered to restore the operation at the West New York facility,
which at the close of hearing was still owned by Leonard Edel-
son, its owner, unless it is shown at the compliance stage of this
proceeding by previously unavailable evidence, see Compu-Net
Communications, 315 NLRB 216 fn. 3 (1994), that the reinsti-
tution of those operations is unduly burdensome. Lear Siegler,
Inc., 295 NLRB 857 (1989). The reason for requiring the re-
sumption of former operations is to reestablish the status quo
ante to the extent necessary to provide jobs for the employees
who desire reinstatement and employment and to avoid reward-
ing the Respondent for its unlawful actions and thereby achieve
basic remedial objectiives under the Act. It is further recom-
mended that Respondent be ordered to offer immediate and full
reinstatement to its unlawfully discharged West New York
facility unit employees to their former jobs, or, in the event
their former jobs no longer exist, to substantially equivalent
jobs, without prejudice to their seniority or other rights and
privileges, and make whole the employees for any loss of earn-
ings they may have sustained by reason of Respondent’s unlaw-
ful conduct, by making payment to them of a sum of money
equal to that which they normally would have earned from the
date of Respondent’s unlawful action to the date of its offers of
reinstatement, less net earnings during such period, with back-
pay to be computed as provided in F.W. Woolworth Co., 90
NLRB 289 (1950), and interest as provided in New Horizons
for the Retarded, 283 NLRB 1173 (1987).
In recommending that the Board order the restoration of Re-
spondent’s West New York scallop cutting operation, I have
concluded that Respondent has failed to meet its burden, see
Coronet Foods v. NLRB, 981 F.2d 1284 (D.C. Cir. 1993), to
establish that restoration is unduly economically burdensome.
Respondent still owned at close of hearing all equipment and
machinery, including the compressor, necessary to reestablish
its scallop cutting operation, most in a disassembled state, and
the cost of reassembling and start up of the operation was esti-
mated by owner Edelson at $100,000 to $200,000, a sum which
he did not claim was exorbitant or unreasonably costly. Fur-
thermore, Edelson also noted that even if the West New York
facility was sold, another location could probably be rented in
the area of North Bergen. As the sale agreement was entered at
a time when Edelson was on notice from the complaint that
closing was unlawful and General Counsel would seek its resto-
ration, Respondent should not be able to knowingly benefit
from its unlawful conduct. The same reasoning should apply to
the requirement agreements executed in May 1966, which have
permitted Respondent to increase its volume of business de-
voted to knitting and dying operations out of North Bergen at
the expense of the jobs and livelihoods of its West New York
work force. Furthermore, just as was noted by the Board in Jay
Recovery Technology Corp., 320 NLRB 356 at fn. 4 (1995), it
would not be inconsistent with the Respondent’s burden to
remedy the unfair labor practices found in this case for it to
bear the cost of any hardship resulting from the restoration of
the status quo ante, as long as the hardship is not unduly bur-
densome to resume its scallop cutting operation. See also Mo-
nongahela Steel Co., 265 NLRB 262 (1981). I also conclude as
did the Board in Jay Recovery Technology, Corp., a case like
the instant one in which an employer’s subcontracting decision
was based on antiunion considerations, id. at fn. 3, that, based
on the facts presented of record, it would not be unduly burden-
some for the Respondent to resume its scallop cutting opera-
tion, Mid-South Bottling Co. v. NLRB, 876 F.2d 458, 460–464
(5th Cir. 1989); Teamsters Local 171 v. NLRB, 863 F.2d 946,
957–958 (D.C. Cir. 1988). See also Masland Industries, 311
NLRB 184 (1993).
The same restoration and make-whole provision shall be
recommended to remedy Respondent’s refusal to bargain about
its decision to close West New York and contract out all its
work. Jay Recovery Technology Corp., supra. In the event that
the Board ultimately determines that Respondent’s only refusal
to bargain was its refusal to bargain about the effects of its
decision, I shall recommend the payment of limited backpay.
Garwood-Detroit Truck Equipment, 274 NLRB 113, 116
(1985); Transmarine Navigation Corp., 170 NLRB 389 (1968).
That remedy requires Respondent to pay backpay to its ad-
versely affected employees at the rate of their normal wages
when last in Respondent’s employ from 5 days after the date of
this Decision and Order until the occurrence of the earliest of
the following conditions: (1) the date the Respondent bargains
to agreement with the Union on those subjects pertaining to the
effects of the subcontracting on its employees; (2) a bona fide
impasse in bargaining; (3) the failure of the Union to request
bargaining within 5 days of this decision, or to commence ne-
gotiations within 5 days of the Respondent’s notice of its desire
to bargain with the Union, or (4) the subsequent failure of the
Union to bargain in good faith; but in no event shall the sum
paid to any of these employees exceed the amount that employ-
ees would have earned as wages from October 27, 1995, the
date on which Respondent subcontracted the work, to the time
the employee secured equivalent employment elsewhere, or the
date on which the Respondent shall have offered to bargain,
whichever occurs sooner; provided, however, in no event shall
this sum be less than these employees would have earned for a
2-week period at the rate of their normal wages when last in the
Respondent’s employ. I shall further recommend that Respon-
dent be ordered to, on request, bargain in good faith with the
Union as the exclusive bargaining agent for its unit employees
as to the decision to close the West New York facility and sub-
contract the scallop cutting department and all of its operations
performed at that facility and with regard to the effect on em-
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1246
ployees of subcontracting that work, and, if an understanding is
reached, embody such understanding in a signed agreement.
On these findings of fact and conclusions of law, and on the
above record, I issue the following recommended1
ORDER
The Respondent, Westchester Lace, Inc., North Bergen and
West New York, New Jersey, its officers, agents, successors,
and assigns, jointly and severally, shall
1. Cease and desist from
(a) Threatening its employees with closing of its business
and its plant if they continued to engage in protected, concerted
activity.
(b) Terminating its scallop cutting department and all of its
operations at its West New York facility, subcontracting those
operations and laying off the employees who were employed at
that facility, thereby discriminating in regard to hire, tenure,
and terms and conditions of employment to discourage mem-
bership in the Union.
(c) Failing and refusing to bargain in good faith with Local
2052, New York-New Jersey Regional Joint Board, UNITE, the
exclusive bargaining agent of its employees in the appropriate
bargaining unit described below, by terminating its scallop
cutting department and all of its operations at its West New
York facility, subcontracting those operations and laying off the
employees who were employed at that facility, without afford-
ing the Union an opportunity to bargain and without bargaining
with respect to this conduct and the effects of this conduct on
the employees in the bargaining unit:

In the Respondent’s Separating, Winding, Scalloping, Cutting
and Dying Department—all employees in the plant excepting
general office help, salaried Foremen, salesmen and heads of
departments. The aforementioned exceptions do not include
receiving or shipping clerks.

(d) In any like or related manner interfering with, restraining,
or coercing employees in the exercise of the rights guaranteed
them by Section 7 of the Act.
2. Take the following affirmative action necessary to effec-
tuate the policies of the Act.
(a) Reestablish and resume its separating, winding, scallop-
ing, cutting, and dyeing department and all of its operations as
it existed prior to October 27, 1995, at its West New York facil-
ity, offer immediate and full reinstatement to its unlawfully laid

1 If no exceptions are filed as provided by Sec. 102.46 of the Board’s
Rules and Regulations, the findings, conclusions, and recommended
Order shall, as provided in Sec. 102.48 of the Rules, be adopted by the
Board and all objections to them shall be deemed waived for all pur-
poses.
off and terminated employees previously employed at that
facility to their former jobs or, in the event their former jobs no
longer exist, to substantially equivalent jobs, without prejudice
to their seniority or other rights and privileges, and make whole
these employees for any loss of earnings they may have suf-
fered by reason of Respondent’s unlawful conduct, in the man-
ner set forth in the remedy section of this decision. If this order
only requires effects bargaining, make whole the employees as
provided, alternatively, in the remedy section of this decision.
(b) On request, bargain in good faith with the Union as the
exclusive bargaining agent of its employees in the above-
described unit, as to the decision to close the West New York
facility and subcontract the scallop cutting department and all
of its operations performed there and as to the effects on em-
ployees of subcontracting that work and, if an understanding is
reached, embody such understanding in a signed agreement.
(c) Preserve and, within 14 days of a request, make available
to the Board or its agents for examination and copying, all pay-
roll records, social security payment records, timecards, per-
sonnel records and reports, and all other records necessary to
analyze the amount of back pay due under the terms of this
Order.
(d) Within 14 days after service by the Region, post at its fa-
cilities in North Bergen and West New York, New Jersey, cop-
ies of the attached notice marked “Appendix.”2 Copies of the
notice, on forms provided by the Regional Director for Region
22, after being signed by the Respondent’s authorized represen-
tative, shall be posted by the Respondent immediately upon
receipt and maintained for 60 consecutive places including all
places where notices to employees, are customarily posted.
Reasonable steps shall be taken by the Respondent to ensure
that the notices are not altered, defaced, or covered by any other
material.
(e) Within 21 days after service by the Region, file with the
Regional Director a sworn certification of a responsible official
on a form provided by the Region attesting to the steps that the
Respondent has taken to comply.
2 If this Order is enforced by a Judgment of the United States court
of appeals, the words in the notice reading “Posted by Order of the
National Labor Relations Board” shall read “Posted Pursuant to a Judg-
ment of the United States Court of appeals Enforcing an Order of the
National Labor Relations Board.”