Gyrodyne Co. of America, Inc., 1120 (1973)

Gyrodyne Company of America, Inc. and International Union, United Automobile, Aerospace & Agricultural Implement Workers of America, UAW. Case 29CA-57

June 4, 1973 SECOND SUPPLEMENTAL DECISION

BY CHAIRMAN MILLER AND MEMBERS FANNING AND

PENELLO

On March 12, 1968, the National Labor Relations Board issued a Decision and Order I in the aboveentitled proceeding in which it adopted the findings, conclusions, and recommendations of Trial Examiner 2 Arthur E. Reyman as contained in his Trial Examiner's Decision of January 21, 1966. The Board therein accepted the Trial Examiner's credibility resolutions and concluded, among other things, that Respondent had not engaged in conduct in violation of Section 8(aXl) and (3) of the National Labor Relations Act as alleged. Subsequently, the Charging Party filed with the United States Court of Appeals for the District of Columbia Circuit a petition for review of the Board's Order dismissing the complaint.

Thereafter, on November 5, 1969, the court handed down its opinion' in which it stated that certain of Respondent's records, subpenaed by the General Counsel but not produced by Respondent, appeared clearly relevant to the issues in the case. The case was remanded, and the Board, on October 8, 1970, issued its Supplemental Decision '° setting forth its reasons for not drawing an 'adverse inference' from Respondent's failure to produce certain documents pursuant to a subpoena duces tecum. Thereafter, the Charging Party again filed with the United States Court of Appeals for the District of Columbia a petition for review of the Board's Supplemental Decision.

On January 25, 1972, the court handed down its opinion S in which it reiterated its position that the documents in issue were relevant to the case and that the Board should, subject to certain conditions, draw an adverse inference from the failure of the Respondent to produce its 'rehiring records.' In its opinion, the court directed the Board to 'allow the company 30 days to produce the rehiring records.' In accord with the court's opinion, the Board, by order dated April i 170 NLRB 236

2 Although the title of 'Trial Examiner' was changed to 'Administrative Law Judge' effective August 19, 1972, the designation Trial Examiner in reference to Mr. Arthur E. Reyman has been retained herein for purposes of clarity.

3 419 F.2d 686 (C.A.D C , 1969) 4 185 NLRB 934.

3 459 F.2d 1329 (C A.D.C , 1972).

26, 1972, reopened the record herein and remanded the case for hearing before an Administrative Law Judge. Pursuant to the remand, a hearing was held before Administrative Law Judge Abraham H. Mailer on June 26 and 28, 1972, at Brooklyn, New York, and on July 25 and 27, 1972, at Centerreach, New York.

On December 29, 1972, the Administrative Law Judge issued his Supplemental Decision. Thereafter, the Respondent, the General Counsel, and the Charging Party filed exceptions with supporting briefs.

Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the National Labor Relations Board has delegated its authority in this proceeding to a three-member panel.

The penultimate issue involved in this case is the legality of the Respondent's actions in discharging and laying off certain employees in June 1964. The General Counsel and the Charging Party maintain that the terminations were because of union activity while the Respondent contends that the terminations resulted from 'cost-cutting' increased efficiency and the conversion from proto-type manufacturing to production line manufacturing.6

After an extensive hearing spanning many days and encompassing the testimony of numerous witnesses in the intitial proceeding, Trial Examiner Reyman issued his Decision wherein he found that the Respondent had not violated the Act in discharging or laying off the named employees. Critical to the Trial Examiner's decision was that aspect of Respondent's defense relating to 'cost-cutting.' Thus, any records of Respondent relating to its 'rehiring' or 'hiring' during the critical period immediately following the layoffs would be germane to the case. At the hearing,

Respondent, while submitting substantial portions of the records covered by the subpena, did not submit those documents covering the hiring or rehiring records for the critical period. The failure of Respondent to produce these subpenaed records was raised as an issue at the hearing. At the time, the Trial Examiner had before him the testimony of Respondent's officials that there was no hiring or rehiring during the critical period. In view of the Respondent's failure to produce the records, the Trial Examiner, at one point during the hearing, indicated that he would draw an adverse inference from the failure of the possessor of the records to produce the same. However, in his Decision, the Trial Examiner did not draw any adverse 6 Prior to the original hearing herein, the Respondent was served with a subpoena duces tecum, requesting, inter aha Names and last known addresses of all persons hired or rehired by Respondent in the period January I, 1964, through December 31, 1964, in the following classifications and departments . packager ; packager, [sic] drones, transmissions or blades, inspector, shipping, receiving, packaging, expediter, inspector, mechanical , technician, electronic, test, operator, drill press, technician, calibration ; mechanic, blade; machinist, lather, packager 203 NLRB No. 164

GYRODYNE CO.

inference, relying instead on the credited testimony of Respondent's officials that there had been no 'hiring' or 'rehiring' during the critical period.

The case, in this posture, as noted above, went to the court of appeals . In its most recent remand giving rise to the instant proceedings the court took the position that the Board should have drawn an adverse inference from a failure by Respondent to produce the 'rehiring' records . The court directed the Board to reject Respondent's cost-cutting defense unless the Respondent within 30 days produced its hiring or rehiring records . In addition, the court directed that in evaluating Respondent's other defenses the Board should take into account the fact that the testimony of Papadakos, Respondent's president, 'has been thoroughly impeached,' if the cost-cutting defense is stricken. Following the court's remand, a hearing was held before Administrative Law Judge Mailer wherein the subpenaed material was made available. The hearing, which opened on June 26 , 1972, was thereafter continued for several days to allow the General Counsel and counsel for the Charging Party to examine the records produced by Respondent in answer to the subpena. Counsel for the Charging Party spent several days examining Respondent 's records, including therein those records pertaining to Respondent's 'hiring' and 'rehiring' practices during the critical period. The record shows and the Administrative Law Judge found that, after examining the record, neither the General Counsel nor the Charging Party submitted any evidence from the proffered records to show that the Respondent had 'hired ' or 'rehired' any employees after the termination of the alleged discriminatees. As the case now stands, the testimony of Papadakos and other supervisory personnel on the Respondent's 'cost-cutting' defense has been fully corroborated. The record does not show why the Respondent refused to submit the subpenaed evidence at the earlier hearing, and we can only speculate as to why Trial Examiner Reyman did not draw an adverse inference from the Respondent's failure to produce the records since there was substantial testimony on the 'rehiring' issue . In any event, the record clearly establishes that Respondent's records were not withheld for the purpose of suppressing evidence that would have been unfavorable to Respondent's 'costcutting' defense, with regard to 'hires' during the critical period.

Notwithstanding his conclusion that there was no 'hiring' or 'rehiring' during the critical period, the Administrative Law Judge weighed the question of certain transfers and layoffs in the 'blade' department. Thus, relying on the fact that three union members had been laid off in that department while other employees of lesser seniority were either transferred in 1121 or returned to it from sick leave , as well as the fact that certain employees received pay increases , the Administrative Law Judge concluded that these factors contradict Respondent's defense of 'cost-cutting' as to the blade department. We do not agree. The record in the earlier hearing clearly shows that Respondent was relying on at least three reasons for the layoffs.

Respondent's defenses were that selections were based on the fact that its operations were converted from proto-type production to mass production, that increased efficiency was desired, and that per unit costs would be reduced. At no time did the Respondent claim that all selections were predicated on lack of seniority or deficiencies in the employees laid off.

To the contrary, the record clearly shows that Respondent's witnesses were aware of the fact that some of the laid-off employees were in one sense or another superior to those retained and that many of them had more seniority than those retained. These factors were fully developed on the initial record and were considered by Trial Examiner Reyman in his initial decision, wherein he credited the testimony of Respondent's witnesses as to their reasons for selecting one employee for retention and one for layoff.

Since the initial record clearly shows that there were transfers in and out of various departments, we do not believe that the documents relied on by the Administrative Law Judge, documents that merely confirm that which was already conceded by Respondent, justify a conclusion that the three named employees were selected for layoff in violation of the Act. As the court itself noted in its remand, the Board, 'in evaluating these other...