Scott Manufacturing Co., 1012 (1961)

DECISION AND ORDER

On June 5, 1961, Trial Examiner C. A. Whittemore issued his Intermediate Report herein, finding that the Respondent had engaged in unfair labor practices in violation of Section 8(a) (1), (3), 'and (5) of the Act and recommending that it cease and desist therefrom and take certain affirmative action, as set forth in the Intermediate Report attached hereto. Thereafter, the Respondent filed exceptions to the Intermediate Report and a brief in support thereof.

Pursuant to the provision of Section 3 (b) of the Act, the Board has delegated its powers in connection with this case to a three-member panel [Members Leedom, Fanning, and Brown].

The Board has reviewed the Trial Examiner's rulings and finds no prejudicial error. The rulings are hereby affirmed. The Board has considered the Intermediate Report, the exceptions and brief, and the entire record in this case, and hereby adopts the findings, conclusions, and recommendations i of the Trial Examiner.

ORDER

The Board adopts the Recommendations of the Trial Examiner with the modification that provision 2 (e) read : 'Notify the Regional 1 Contrary to the Respondent's contention, the validity of the contract between Ace and Scott under Massachusetts law is irrelevant Our order is not in any way directed against that contract or the legal rights of the parties to it See The R C Mahon Company, 118 NLRB 1537 , 1544, enforcement denied on other grounds 269 F 2d 44 (CA 6). The Board' s authority to issue a remedial order is not affected by such an agreement or by local law See Drennan Food Products Co, 122 NLRB 1353, 1358 at footnote 13, enforcement denied on other grounds 272 F 2d 23 (C.A. 5) .

133 NLRB No. 107.

SCOTT MANUFACTURING COMPANY, ETC. 1013

Director for the First Region, in writing, within 10 days from the date of this Order, what steps the Respondents have taken to comply herewith.' 2

I In the notice attached to the Intermediate Report as Appendix B, the words 'Decision and Order' are hereby substituted for the words 'The Recommendations of a Trial Examiner ' In the event that this Order is enforced by a decree of a United States Court of Appeals, there shall be substituted for the words 'Pursuant to a Decision and Order' the words 'Pursuant to a Decree of the United States Court of Appeals, Enforcing an Order ' INTERMEDIATE REPORT

STATEMENT OF THE CASE

ti Charges in each of the above-entitled cases having been filed and served; orders consolidating the cases, a complaint and amended complaint having been issued and served by the General Counsel of the National Labor Relations Board, and answers having been filed by each of the above-named Respondents, a hearing involving allegations of unfair labor practices in violation of Section 8(a)(1), (3), and (5) of the National Labor Relations Act, as amended, was held in New Bedford,

Massachusetts, on April 19 and 20, 1961, before the duly designated Trial Examiner.

At the hearing all parties except the Charging Union were represented and were afforded full opportunity to present evidence pertinent to the issues, to argue orally, and to file briefs. Briefs have been received from. General Counsel and the Respondents.

The Respondents' joint motion to dismiss the complaint, upon which ruling was reserved at the hearing, is disposed of by the following findings, conclusions, and recommendations.

Upon the record thus made and from his observation of the witnesses, the Trial Examiner makes the following:

FINDINGS OF FACT

1. THE BUSINESS OF THE RESPONDENTS United States Air Conditioning Corporation is a Delaware corporation, with its principal office and place of business in Delaware, Ohio. The corporation is listed on the American Stock Exchange. It is engaged in the manufacture, sale, and distribution of air-conditioning, heating, and ventilating equipment and related products. It annually ships goods valued at more than $50,000 directly from its said plant in interstate commerce to States of the United States other than the State of Ohio. President Glen W. Way of this corporation, and his wife's estate, own 63.9 percent of its capital stock. Among other corporations owned outright by this Respondent and located in various other 'States is the Ace Cabinet Corporation, also a Respondent herein.

   Ace Cabinet Corporation is a Massachusetts corporation with principal office and place of business in New Bedford, Massachusetts. It is engaged in the sale and distribution (and until December 1960, under its name was engaged in the manufacture of) clothes dryers, refrigeration cabinets, and related products. It annually ships goods valued at more than $50,000 from this plant in interstate commerce to States of the United States other than the Commonwealth of Massachusetts Since January 1961, Scott Manufacturing Company has been a Massachusetts corporation, with office and place of business in New Bedford, Massachusetts, at the same address as-Ace Cabinet. It is engaged in the manufacture, sale and distribution of clothes dryers, refrigeration cabinets; and related products. It annually ships goods valued at more than $50,000 directly from this plant in interstate commerce to States of the United States other than the Commonwealth of Massachusetts.

   All Respondents concede that they are engaged in commerce within the meaning of the Act, and it is so found II. THE CHARGING UNION International Union of Electrical, Radio and Machine Workers, AFL-CIO, is a labor organization within the meaning of the Act.

   3. THE UNFAIR LABOR PRACTICES A. Setting and issues The chief issue for which remedy is here sought stems from the action of the Respondent Ace Cabinet in admittedly terminating the employment of the individuals listed in Appendix A, attached hereto. General Counsel contends that Ace Cabinet discharged them to evade its legal obligation to bargain with the Charging Union.

      Ace Cabinet denies the contention.

      Undisputed background facts, briefly summarized, are as follows:

      (1) In 1958, on behalf of the Respondent United States which he controls, Glen Way purchased Ace Cabinet, then a going concern. In the fall of that year the Charging Union was certified by the Board as the exclusive bargaining agent of all employees in the production and maintenance unit at Ace Cabinet. In March 1959, on behalf of Ace Cabinet, Way entered into a 2-year contract with the Union.

      Additional wage revision negotiations took place in March 1960.

      (2) On December 8, 1960, without previous notification to the Union, Way caused to be posted at the New Bedford plant an announcement that the plant would close on December 16. On that date the employees named in Appendix A were terminated.

      (3) In mid-January 1961 , the same plant resumed operations making the same products, but conducting such production under the name of Scott Manufacturing.

      At that time Way entered into an oral agreement (formally executed a month later) with Anderson W. Scott, who until then had held the title of Ace Cabinet's sales manager, by terms of which the latter was to assume manufacture of products for Ace. A separate corporation-the Respondent Scott-was formed.

      (4) Scott then offered, as if to new employees, jobs to many of the production and maintenance workers who, until December 16 and like himself, had been employed by Way and on the payroll of Ace Cabinet. Most of these offers were declined, since Scott set a wage scale far below that agreed to in the contract and otherwise refused to honor that agreement with the Union.

      (5) Scott thereafter ignored both oral and written efforts by union representatives to negotiate with him concerning reemployment.

      2. The 'transaction' between Way and Scott General Counsel contends that the three Respondents: United States, Ace Cabinet, and Scott Manufacturing, constitute 'a single employer and/or are engaged in a joint enterprise' within the meaning of the Act. These alternative contentions the Respondents deny.

      In the opinion of the Trial Examiner credible evidence fully supports either and both of General Counsel's claims. Such evidence establishes the following facts(1) Way controls the operations and labor policies of both United States and Ace Cabinet. The two corporations are engaged in essentially the same business;

      parts made by United are used in the manufacture of Ace products.

      (2) Despite the formation of a separate corporation on paper Way, through Ace Cabinet, remains in practical and effective control of Scott's operations and very existence.

      (3) The preamble of the agreement between Way and Scott, formally executed February 21, 1961, states that its purpose is to 'sub-contract the actual manufacturing of its [Ace Cabinet's] products.' (4) By terms of this agreement Ace continues to be 'responsible for the furnishing of quarters in which to work, all machinery required to do the work and all material required to do the work. .

      (5) Ace continues to be 'responsible for any and all regular public liability insurance including, but not restricted to. product liability insurance in exactly the same manner as would be true if Ace Cabinet Corporation were doing all of the manufacturing itself.' (6) Also by contractual terms Way retains the right to 'discontinue the operation and terminate' the agreement 'on thirty days notice.' (7) As a witness, Way himself testified that 'to insure he [Scott ] is not going to get away with too much.' 'I can scratch him in 30 days.' (8) Ace continues to occupy its same office, on the same premises.

      (9) Paul Desjardins, now having the title of 'clerk' of Ace and until December 1960, holding the position of production manager, continues to be responsible for the quality of Scott's work, walks 'throughout .the plant' according to his own testimony, and if he sees anything wrong stops it 'before it goes any further.' (10) Anderson Scott, who before December was Ace's sales manager, continues to sell 'under the present set-up' and also according to Desjardins 'there are a...