# Petition — International Ass'n of Machinists & Aerospace Workers v. National Labor Relations Board > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385005_1882%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition - **Published:** January 1, 1979 - **Citation:** 439 U.S. 1070 ## Text IN THE MIGHAEL AGOAK, 32, Supreme Court of the United States OCTOBER TERM, 1978 N° 828-615 INTERNATIONAL ASSOCIATION OF MACHINISTS AND AEROSPACE WORKERS, AFL-CIO, Petitioner, V. NATIONAL LABOR RELATIONS BOARD, Respondent, and BOEING COMPANY, Intervenor. PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT PLATO E. PAPPS Machinists Brilding 1300 Connecticut Avenue, N.W. Washington, D.C. 200386 MOZART G. RATNER 1900 M Street, N.W. Washington, D.C. 20036 Attorneys for Petitioner WILSON - EPES PRINTING Co., INC. - 789-0096 - WASHINGTON, D.C. 20001 aRGEEfoo 00 > ; a reme Court, U. Sey FILED eek at od TABLE OF CONTENTS Page Ne necinintecaiones 2 a ater iticneinsinccstosamneinasinieyeecee 2 He i ey | | 2 STATUTORY PROVISIONS INVOLVED |... 2 STATEMENT OF THE CASE ..000.0...........ccccccceeeceoeese- 3 Ea 5 ANTECEDENTS OF THE BURNS EXCEPTION ...... 6 REASONS FOR GRANTING THE WRIT ................... 10 i a De cathe. 17 APPENDIX Decision of the Court of Appeals -.............0000.0.00..... la Decision and Order of the Board 20.0.0... .0000....... 24a Decision of the Trial Examiner ...00 0000000000000... 40a SUPPLEMENTAL APPENDIX Antecedents of the Burns “plans to retain” excep- eed ctdee caenecene 8 ELLA 95a Chemrock Corporation, 151 NLRB 1074 Sgt 95a Spruce Up I, 194 NLRB 841 (1972) ee 1l5a Decision of the Trial Examiner (1971)... 120a Source of the Board’s construction of the Burns RS A ... 16la Spruce Up IT, 209 NLRB 194 (1974) —........... 16la II TABLE OF AUTHORITIES Cases: Page Chemrock Corp., 151 NLRB 1074 (1965) _...... 6, 7, 9, 10, Labor Board v. Insurance Agents, 361 U.S. 477 14, 16 (ROSS Sse SORES Sul Aas 5 16 NLRB v. Burns Security Services, Inc., 406 U.S. 2. es 2, 5, 7, 8, 9, 10, 13, 14, 15, 16, 17 NLRB v. Hearst Publications, Inc., 322 U.S. 111 © AES TN 3 a Sc 14,17 Phelps Dodge Corp. v. NLRB, 313 U.S. 177 (1941) .. 14,17 Smith v. Evening News Ass’n, 371 U.S. 195 Saat lee ave el 15 Spitzer Akron, Inc. v. NLRB, 540 F.2d 841 (6 Cir. 1976), cert. denied 429 U.S. 1040 15 Spruce Up I, 194 NLRB 841 (1972) __..__.. 7, 8,9, 14, 16 Spruce Up II, 209 NLRB 194 (1974) _.. 6 Standard Rate & Data Service, Inc. v. United States Postal Service, No. 77-1848, U.S. App. seinen 17 Textile Workers v. Lincoln Mills, 353 U.S. 448 I ei an SACRO SE GR a 15 Miscellaneous: ee 2 National Labor Relations Act, 49 Stat. 452, 61 Stat. 140, 29 U.S.C. §158(a) (1) and (5) and § 159 SR iat on, RE EASELS he OnE Re RO 2 Nash, Peter, Labor Relations Yearbook, 1973 a 10 Nash, Peter, Successorship in the Light of Burns, + Ga. L. Rev. O64 (1678) ..................................... 10 IN THE Supreme Court of the United States OCTOBER TERM, 1978 No. INTERNATIONAL ASSOCIATION OF MACHINISTS AND AEROSPACE WorRKERS, AFL-CIO, Petitioner, V. NATIONAL LABOR RELATIONS BOARD, Respondent, - and BOEING COMPANY, Intervenor. THE PETITION FOR A WRIT OF CERTIORARI TO UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT Petitioner, International Association of Machinists and Aerospace Workers, AFL-CIO (hereinafter IAM or the Union) prays that a writ of certiorari issue to review the judgment of the United States Court of Appeals for the District of Columbia Circuit affirming an order of the National Labor Relations Board (hereinafter the Board) dismissing its General Counsel’s complaint against Boeing Company (hereinafter Boeing). 2 OPINIONS BELOW The opinion of the Court of Appeals (1a-23a), is not yet officially reported. The decision and order of the Board (24a-94a), is reported at 214 NLRB 541 (1974). JUR{SDICTION The judgment of the Court of Appeals was entered on June 13, 1978. On September 1, 1978, Mr. Justice Bren- nan entered an order extending the time for filing a petition for certiorari until October 11, 1978. The juris- diction of this Court is invoked under 28 U.S.C. 1254(1). QUESTION PRESENTED In NLRB v. Burns Security Services, Inc., 406 U.S. 272, 294-295 (1972), this Court declared that a successor employer who “plans to retain” his predecessor’s bargain- ing unit employees must “initially consult with the em- ployees’ bargaining representative before he fixes terms.” The question presented is whether that obligation applies to a plan to retain on inferior terms. STATUTORY PROVISIONS INVOLVED The National Labor Relations Act as amended, 49 Stat. 452, 61 Stat. 140, 29 U.S.C. § 158(a) (1) and (5), and 159(a), provides as follows: “Sec. 8(a) It shall be an unfair labor practice for an employer— ‘The symbol “a”, refers to the appendix, infra, in which the opinions of the court below, the Board and the Administrative Law Judge are reprinted. The supplemental appendix, infra, in which decisions constituting the matrix of the “plans to retain” doctrine are reprinted, is numbered sequentially and similarly designated “ener a. 3 (1) to interfere with, restrain, or coerce em- ployees in the exercise of the rights guar- anteed in section 7; = + * * (5) to refuse to bargain collectively with the representatives of his employees, subject to the provisions of section 9(a). * * * * 9(a) Representatives designated or selected for the purposes of collective bargaining by the majority of the employees in a unit appropriate for such pur- poses, shall be the exclusive representatives of all the employees in such unit for the purposes of col- lective bargaining in respect to rates of pay, wages, hours of employment, or other conditions of em- ployment * * *.” STATEMENT OF THE CASE The undisputed facts are detailed in the opinion of the court below (2a-8a).? The essentials, summarized briefly, are as follows: In 1970, Boeing bid to succeed Trans World Airlines (TWA) as installation support services contractor with National Aeronautical and Space Ad- ministration (NASA) at the Kennedy Space Center. There were 1,054 TWA employees in the bargaining unit performing these services, represented by IAM as ex- clusive bargaining agent. In its formal bid, Boeing made it abundantly clear that it desired, intended and planned to retain virtually all “incumbent contractor personnel (3a-4a), citing the advantages of “continuity * " : effec- tiveness and economy [to] be achieved by retaining ex- perienced and qualified incumbent personnel.” (Jd. ) At the same time, Boeing proposed to pay lower wages and fringe benefits for the same work than TWA had 2 References succeeding a semicolon are to the decision of the Board or the Administrative Law Judge. 4 been paying (3a).° Boeing stated that “[wl]hile the staffing plan is based on retaining approximately 86 percent of the incumbent personnel,” a satisfactory com- i could be recruited from the local labor market 5a). Boeing acted unilaterally in preparing and submitting its bid proposal to pay inferior wages and benefits (61la- 62a). After NASA announced, on November 23, 1970 that Boeing had been selected as successor to TWA ( Ba), Boeing continued to maintain (n. 3, below) that terms and conditions of employment in the support services unit were fixed and governed by its preexisting “hard- ware contract” (61a). This pretermitted consultation and negotiation with IAM about initial terms and conditions of employment in the support services unit (5a). On March 11, 1971, NASA gave the support services con- ract to Boeing. Even before that date, Boeing had offered preferential employment to incumbent TWA employees on Boeing’s unilaterally established inferior wage and benefit terms, which many predictabl j mem Penn y p y rejected (5a-7a, On TAM’s charges, the Board’s General Counsel issued a complaint alleging violation of Section 8(a)(5) and 8(a) (1), grounded in Boeing’s failure to consult IAM before fixing initial terms and conditions of employment for the installation support services unit (7a). 3’ Boeing based its wage and fringe benefi terms of its national contract with IAM, chick age hard. ware contracts” with NASA for the Center (3a). It was Boeing’s legal theory, subsequently rejected by the Administrative bew Judge and the Board, that if Boeing obtained the support services contract, the unit performing those services would constitute an accretion” to Boeing’s existing “hardware” unit and that terms and conditions of employment would th “ ” eref hardware” contract (6a; 51a-54a). ore be governed by the 5 DECISIONS BELOW The court below approved the decision of a three to two majority of the Board (24a-27a) (Chairman, then Mem- ber, Fanning and Penello dissenting, 28a-39a), which adopted, on limited grounds, the recommendation of the Administrative Law Judge (40a-94a), that the complaint be dismissed (7a-8a). Dismissal was predicated upon construction of the Burns “plans to retain” exception (18a), as excluding plans which are coupled with lower wage rates or other inferior terms. The theory is that when the successor’s “offer of employment is coupled with an announcement of reduced wages and benefits” his intention “to retain large numbers of his predecessor’s employees is not likely enough to come to fruition” to constitute a “plan” within the meaning of Burns (14a, 19a, 26a). This reasoning is grounded on the premise that the sine qua non of an obligation to bargain under Burns is a justified claim by the putative bargaining agent “to represent the larger number of the successor’s prospective employees” (18a). That is conceived to require “probable continuity of employment” (id.); assurance of actual “perpetuation of the incumbent work force” (19a). Ab- sent such assurance, a successor employer’s plan, desire or intention to retain the incumbent work force, no matter how unequivocal, is thought legally insufficient to ground a pre-takeover obligation to bargain. On this reasoning, the Board majority and the court below rejected the literal and natural meaning of Burns. They bolstered rejection on the premise that to effectuate this Court’s opinion as written would discourage successor employers from “commenting favorably upon the em- ployment prospects of old employees” (15a, 21a-22a). To avoid this result without totally obliterating the excep- tion, they transformed the obligation from consulting before fixing initial terms into an obligation to adhere to express or implied promises to retain on the same 6 terms (15a, 19a-20a, 23a, cf. 88a). Thus, the Burns ex- ception was construed to mean that (23a): “a successor employer need consult with an incum- bent union with respect to initial employment terms prior to fixing them only when he has not evinced any intention substantially to modify the pre-existing terms before expressing a willingness to rehire in- cumbents.”’ The Board, the Administrative Law Judge and the court below deemed themselves free to devise this policy- oriented transformation of Burns because they overlooked the decisional source and history of the exception and misconceived its function in the mosaic of the Burns opinion. The Administrative Law Judge asserted (88a): “the derivation of this statement in Burns is not clear ** *” In Spruce Up II, 209 NLRB 194 (1974), (161a- 210a), upon which the decision in this case is grounded (8a, 13a-15a, 17a-18a), the Board majority said: “the precise meaning and application of the Court’s caveat is not easy to discern” (209 NLRB at 195; 166a). The court below observed that “[t]he Burns exception * * * provides minimal guidance” (n. 41, 16a). ANTECEDENTS OF THE BURNS EXCEPTION As the court below impliedly recognized (18a-19a), the Burns exception is addressed to the nature of the nexus between a prospective successor employer and his predecessor’s employees adequate to ground a pre-hire 8(a) (5) or (1) bargaining obligation. The Board ad- dressed precisely that question in Chemrock Corp., 151 NLRB 1074 (1965) ; 95a-114a. It there held that a pros- pective successor who “indicated a desire to hire” his predecessor’s drivers, but “only * * * at a [lower wage} rate” than his predecessor had been paying (id., at 1076, 1085; 97a, 110a-1lla), became the “employer” of the drivers for 8(a) (5) and (1) purposes, and was required to recognize and bargain with the drivers’ exclusive bar- 7 initi ditions of em- ining agent about initial terms and con = ott id, at 1076-1081; 98a-104a). The Board ex- plained (id. at 1080-1081; 103a-104a) : “It is quite clear that when [the prospective suc- ah mated the drivers as a group to gyaee with it about their continuity of ey paper er rates of pay in the ‘employing industry uP ic : was succeeding, it was acting im an emp 5 c pacity, and this is so regardless of whether the em ployees were yet [the successor’s] employees re : literal sense. Moreover, the oy te orga a [the successor] engaged in direct dealings aro : drivers, though concerned with terms and = i vir of employment that were not to be applicable : {the successor] actually took over the plant, cgi nonetheless matters as to the negotiation of : i : the employees had a legitimate right and — to be represented by their bargaining agent. = rd itself elected during the interim period referre : above to deal with the employees on eanggahd ~~ erly a subject for collective bargaining, i. Psd cessor] could not at the same time lawfu y is 8 gard the employees’ statutory right to om “a through their then currently duly designate gaining representative.” * * * ad oneal’ is case, it is apparent that when [the successor } invited Hg pred as a group b Dg nal gl basen yo heeding ": Hymns potter the possibility of taking pee a unit the entire crew of drivers to gota the same work they had done in the past.” (Emphasis added. . The Board affirmed and applied this Chemrock ey in Spruce Up I, 194 NLRB 841 (115a-160a), .. : sued on January 5, 1972, shortly before the 1 gad ment in Burns (January 13, 1972), and more : yet months before the Burns decision issued (May 1 , sical In Spruce Up the prospective successor, before take ; 8 acy offered to retain his predecessor’s barbers, but he a specified rate of commission, which was in man wigs less than their existing rate * * *.” 194 NLRB at 844, col. 1 (126a). The Board adopted the holding of the Administrati ; 2 (1868). istrative Law Judge that (id., at 846, col. “where... an emplo i yer who is about to acqui — business manifests an intent to Bone. ag on pesttnen a gs ea they become at that point ees Tor the purpose of the applicatio ae ) » and he is obligated to inne oe . which is the[ir] statutory representative. el passing the “nion which was the barbers’ exclusive gaining agent by fixing inferior initia] employment terms theref i . a ae ore violated Section 8(a) (5) and (1) of The language of the Burns i ng exception (406 U.S. - 295) strikingly parallels the quoted passage from Sora Up I: “. .. [when] it is perfect] ( y clear that the - — plans to retain all of the mecesbiaiaes “4 the - . . It will be appropriate to have him consult with [thei ini i Mi hs oe bargaining representative before he see ait juxtaposition of timing and the func- exception in the Burns opinion i ground for inference that S pce ic t pruce Up I was its sou xe bi the preceding paragraph ( lla-12a) and the ye - ing oo (13a), in the Burns opinion stress nexistence, normally, of a. pre-takeo ini Non , - ver bar iS Ag he the absence of an sutiphaiet-auaihewes ip. the Union’s right to b pended upon its representatio a apr gfe n of a majority of th cessor’s employees, such right could i as ‘ not arise bef — employer-employee relationship was established Tf was an exception, in which a pre-takeover bargain- 9 ing obligation existed prior to establishment of an actual employer-employee relation, it was necessary to say SO. It is but reasonable to infer that in limning the ex- ception this Court envisioned and adopted that which already existed in Board law. Other indicia support that inference. The Burns Court was aware of but did not disturb Chemrock, 406 US. at 280, n. 5. And while Burns (n. 32, 12a) “overturned a line of Board decisions requiring a successor employer always to bargain with the in- cumbent union before instituting employment terms different from those prevailing under the prede- cessor’s contract” (emphasis added), that “line” conspicuously did not include Chemrock or Spruce Up I. More specifically, this Court’s mani disapproval of the Board’s rule insofar as it shackled a potential successor to his predecessor’s work force and terms and conditions of employment by operation of law (406 U.S. at 287-288, 289, 291, cf. 279, n. 3, 280, n. 5), did not even remotely imply disagreement with the Chemrock-Spruce Up principle that prospective successors who are satisfied with the composition of the work force and voluntarily elect to attempt to retain the incum- bent employees, thereby treating them “in an employer capacity” (Chemrock, p. 7, supra), are not simultane- ously free to divest that work force of the protection of collective representation. ‘The successor would have no legitimate complaint about mandatory bargaining in such circumstances because its necessity is a product of his own * * *conduct” (n. 14, 21a). For the same reason, imposition of a duty to bargain based on the successor’s “voluntar|y]” plan to take over the bargaining unit “largely intact” (Burns, 406 U.S. at 287), would have *Chemrock was cited “But cf.” to the proposition that a suc- cessor employer might voluntarily “assume[]” an obligation to hire all the predecessor’s employees. 10 no adverse effect on alienability. Cf. 16a-17a. Of course, if Chemrock-Spruce Up is the source of the Burns excep- tion, changing terms unilaterally is not avoidance but violation of the bargaining obligation. REASONS FOR GRANTING THE WRIT 1. The uncertainty expressed by those who have deemed themselves compelled to recast the Burns excep- tion, p. 6, supra, indicates the necessity for clarifica- tion. Further, two Board Members and the General Counsel at the time the Burns exception was initially considered vigorously disagree with the majority’s con- struction. In an official report,’ then General Counsel Peter G. Nash concluded that “determination of whether a successor ‘plans to re- tain all’ within the meaning of Burns rests on an evaluation of evidence of the successor’s intentions to employ or not employ unit personnel—e.g., their qualifications, experience, and suitability as employees—apart from its intentions as to the terms and conditions of their employment. So it was con- cluded that a successor who manifests a willingness to accept the unit complement as its employees can- not avoid an obligation to bargain about initial work- ing conditions simply by making employment of the unit dependent upon acceptance of a unilateral estab- lishment of working conditions. To interpret the Burns ‘plans to take all’ statement as privileging the unilateral establishment of the very employment conditions on which there is a duty of initial con- sultation would, it seemed to us, make the statement meaningless.” * * Labor Relations Yearbook, 1973 (BNA, 1974), pp. 167-168. ° Nash reiterated that position in a subse i N ‘ quent article, Successor- ship in the Light of Burns, 7 Ga. L. Rev. 664, 681 (1973): [Footnote continued on page 11] PRORES ORen? 11 The dissenting members in this case replied to the majority as follows (34a): “Our colleagues in the majority in effect would transform an incoming employer’s ‘plans to retain’ his predecessor’s employees, which is the Burns test, into ‘a commitment to hire or an actual advance hir- ing of such employees,’ as found by the Administra- tive Law Judge. [88a]. The latter meaning is wholly different and is destructive of the ‘plan to retain’ standard. A ‘commitment to hire or an actual advance hiring’ is an overt entry into a contract of employ- ment between the employer and employee with noth- ing left to consummate the engagement except re- porting for work at a future fixed time. It is, albeit informal, an offer and acceptance of employment, and hence a completed contract.” “A ‘plan to retain,’ on the contrary, necessarily precedes any ‘commitment to hire or an actual ad- vance hiring ....’ A plan to retain simply signifies that the incoming employer proposes to look to the incumbent emp ouces as the primary source of his work force. Tuat plan is the stage preliminary to the employer’s approach to the incumbent. It pre- cedes, and is independent of, any ensuing commit- ment to hire or actual advance hiring. Once the sub- sequent commitment or actual advance hiring is made, it is no longer a plan; it is a consummated transaction. It is therefore self-contradictory to equate the plan with the commitment. The former 6 [Continued] “(C]londitioning * * * employment [with a successor] merely upon the acceptance of changed terms and conditions of employ- ment would not seem to be sufficient for the employer to avoid the Court’s dictum in Burns. A contrary conclusion would per- mit an employer to avoid his bargaining obligation concern- ing initial working conditions simply by making employment in his unit dependent upon the acceptance of a unilateral estab- lishment of working conditions. So to interpret Burns would be to render meaningless the bargaining obligation.” 12 precedes the latter; it is not coterminous with it.” | Emphasis added. ) ; The dissenters also demonstrated that transforming a plan to retain” into probable retention destroys the only statutory purpose the exception could serve (35a-36a) : “Our separate uissents in Spruce Up, supra, dealt with the central fallacy of our colleagues’ analysis, 1.e., aS Boeing’s plan to retain the incumbents was ‘simultaneously and inextricably linked in Boeing’s proposals’ with the lower terms it proposed to offer them, the existence of the plan did not in the lan- guage of Burns impose upon Boeing the obligation to ‘Initially consult with the employees’ bargaining rep- resentative before... . [the incoming employer] fixes terms.’ In response, it was said then, and we reit- erate now: The Court [in Burns] said nothing about a con- ditional intent to hire. The majority are at- tempting to revise substantially what the Court said, for their view, would, in effect, abrogate the exception, as the only case when a violation would occur under their test would be the un- likely situation where a successor says he will continue the employees under the exact terms and conditions as existed before the takeover. If he says that he “plans” to alter the status quo in any way, while at the same time indicating a desire to retain the old employees, they would find this amounts to a conditional intent to hire. I cannot accept that the Supreme Court would announce a rule of law that is so restrictive as to amount to a nullity. The majority’s contrary construction of this aspect of the Burns decision leads to the anom- alous, if not absurd, result that a bargaining obligation over the establishment of the suc- cessor’s initial terms and conditions of employ- ment arises when the successor plans to retain the former employees at the terms their union 13 had already established through collective bar- gaining with the predecessor employer but not when he plans to retain them at terms different from those previously established. The majority would bring to bear ‘the mediatory influence of negotiation’ where there is no controversy, but deny its appropriate use where there is contro- versy. They thus turn the Act on its head, and to no useful end.” [Footnotes omitted. ] 2. The construction of the majority, approved below, is incompatible literally with the Burns exception. To make the existence of a “plan[].to retain” depend on its prospects of fruition is logically a non-sequitur. The fallacy is compounded, not aided, by invoking the “per- fectly clear” qualification (17a), for those words syn- tactically refer to and modify the existence of a plan, vel non, not its feasibility. Furthermore, if the Court had envisioned “probable continuity” (18a) rather than mani- fest intention as the controlling factor, the draftsman would undoubtedly have used the words “will probably” instead of “plans to”. The approved construction, as the court below admits (19a), virtually eviscerates the exception for it de- prives the predecessor’s employees of the benefits of collective bargaining precisely and only when it is needed —i.e., when the successor proposes to employ them under substantially worse terms and conditions than those pre- vailing—and guarantees collective bargaining only when it is not needed, —i.e., when the successor proposes no substantial change.’ In addition, as former General Coun- sel Nash pointed out, the limitation enables a successor to evade the obligation to bargain about initial terms for a work force which he intends to compose mainly out of his predecessor’s employees merely by coupling his 7 “To be sure, in view of the substantial harmony existent in the parties’ positions, only minor adjustments in initial terms may then remain to be negotiated, and it must be acknowledged that com- pulsory bargaining usually yields greater returns where labor- management differences are of more appreciable magnitude.” (19a). 14 announcement of intent to retain them with a unilateral wage reduction. It is mind boggling to assume that this Court would have taken pains to draft a virtually self- defeating exception. The attempt of the court below (n. 52, 22a) to minimize the effect of the evisceration: ‘“nonapplica- bility of the Burns exception does not substantially im- pair the ability of the incumbent employees to ensure suitable terms for the successor employment”; “a bypass of initial-terms bargaining consistent with the Board’s reading of Burns does not lock indefinitely the carried- over workers into conditions not to their liking”; “if in- cumbents are retained they can at that point endeavor collectively to improve their lot”, is counter-productive The listed consequences all follow from the sentence succeeding the exception. If this Court deemed those protections sufficient, the sentence at issue would not have been written. 3. The construction of Burns in question here goes to the heart of Section 2(3) analysis as it applies to Sections 8(a)(5) and (1). In Chemrock and Spruce Up I the Board followed Phelps Dodge Corp. v. NLRB, 313 U.S. 177 (1941) and NLRB vy. Hearst Publications, 322 US. 111 (1944 , in reasoning that where a prospective successor recognizes and plans to preserve the incumbent employees’ existing employee status,” the conditions of the relation- ship are such as to “require [collective bargaining] pro- tection.” Chemrock, supra, 151 NLRB at 1077-1078 (98a- 104a). In construing Burns to deny protection, the Board majority and the court below repudiated, sub silentio, the teachings of Phelps-Dodge and Hearst. ey Board majority’s approach sends the law galloping oH In a new, complex and forbidden direction. Instead of focusing upon the nature of the nexus between the would-be successor and the incumbent workforce which triggers the pre-takeover duty to bargain (Spitzer Akron, Ko gD hike 15 Inc. v. NLRB, 540 F.2d 841, 844-845 (6 Cir., 1976), cert. denied 429 U.S. 1040),* the Board and the courts now make liability turn on whether the successor violated a commitment or broke his word. (n. 40, 15a). This line of analysis would seem to invade the area of enforcement of promises and protection of “employer-generated ex- pectations” (19a-20a, n. 52, 22a) which Congress fore- closed to the Board. Teatile Workers v. Lincoln Mills, 353 U.S. 448, 452-453 (1957); Smith v. Evening News Ass’n, 371 U.S. 195, 199 (1962). 4, The policy objective of the majority’s construction— to avoid discouraging “employers from commenting favor- ably on the employment prospects of old employees” (14a- 15a, 21a-22a)—is based on speculative assumptions which are in any event irrelevant. In the first place, as this Court observed in Burns, 406 U.S. at 291: “In many cases, of course, successor employers will find it advantageous not only to recognize and bargain with the union but also to observe the pre- existing contract rather than to face uncertainty and turmoil.” The court below conceded (21a): “It seems rather evident that in some instances a new employer desirous of changing prevailing em- ployment terms may feel compelled to reveal his retention plans, notwithstanding a resultant obli- gation to bargain. But, in the Board’s view, as we understand it, the successor more commonly may endeavor to conceal, or to at least postpone publicity on, reemployment objectives in order to avoid the onus of bargaining during the usually difficult period of takeover, * * *.” (Emphasis added.) 8 In Spitzer Akron, the court said (id.) : “We construe Burns as relating to the timing of the changes— whether they predate or postdate the commencement of the duty to bargain. As soon as the duty to bargain arises, the successor company cannot institute changes without consulting with the union.” 16 But no probative evidence or Board experience is cited to support “the view” so imputed to the majority, and we are aware of none. Indeed, it is more reasonable to suppose that the instability (cf. 22a), resulting from “concealment” may so adversely affect the employer’s interest in retention as to “more commonly” impel dis- closure. To the extent that the Chemrock-Spruce Up I rule may deprive employees of “early appraisal of their retention prospects” (21a), that disadvantage may well be outweighed by the advantages gained through collec- tive bargaining over the proposed reduction in wages and lessening of benefits where retention prospects are revealed. In any event, speculations such as these are irrelevant, for they cannot justify discarding the natural and normal meaning of the language of this Court. That language effectuates “[t]he congressional policy manifest in the Act [which] is to enable the parties to negotiate.” Burns, 406 U.S. at 288. Congress trusted that policy to promote stabilitv in labor relations. The Board is not licensed to repudiate that policy to increase the likelihood that successor employers will issue favorable forecasts of em- ployment prospects for incumbent employees. The Act is not “a charter for the National Labor Relations Board to act at large” (Labor Board v. Insurance Agents, 361 U.S. 477, 490 (1960)) to enhance the economic security of either employees or employers. Nor does the brevity of this Court’s statement excuse deference by the court below to the majority’s miscon- struction (n. 41, 16a). As another panel of that court recently stated: “What is involved in this case is both the meaning and the effect of the language of a Supreme Court opinion. We agree with the Third Circuit that the resolution of this type of question does not require the same type ana degree of deference to administra- ee eS ae eee 17 tive discretion as was involved in American Bible Society v. Blount. [446 F.2d 588, 596-98 (3d Cir. 1971) }.” Standard Rate & Data Service, Inc. v. United States Postal Service, No. 77-1848, U.S. App. D.C., decided July 14, 1978, slip. op. 9. 5. The need for clarification is enhanced by the im- portance of the issue in the field of successorship law, to which this Court has devoted so much attention. Both in principle and in volume of transactions affected, it is vital to employers, employees and unions, and to the Board and reviewing courts, to know whether the Phelps- Dodge-Hearst approach survives Burns. Certiorari should be granted to resolve that issue. CONCLUSION For the foregoing reasons, this petition for writ of certiorari should be granted. Respectfully submitted, PLATO E. PAPPS Machinists Building 1300 Connecticut Avenue, N.W. Washington, D.C. 20036 MOZART G. RATNER 1900 M Street, N.W. Washington, D.C. 20036 Attorneys for Petitioner APPENDIX SK lll la UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT No. 75-1056 INTERNATIONAL ASSOCIATION OF MACHINISTS AND AEROSPACE WORKERS, AFL-CIO, PETITIONER Vv. NATIONAL LABOR RELATIONS BOARD, RESPONDENT BOEING COMPANY, INTERVENOR Petition for Review of an Order of the National Labor Relations Board \ Argued November 1, 1976 Decided June 13, 1978 Mozart G. Ratner, with whom Plato FE. Papps and Denis Gordon were on the brief, for petitioner. | Peter Carre, Attorney, National Labor Relations Board, with whom John S. Irving, General Counsel, E/- liott Moore, Deputy Associate General Counsel, and Robert Sewell, Attorney, National Labor Relations Board, were on the brief, for respondent. Before LEVENTHAL, ROBINSON and WILKEY, Circuit Judges. Opinion for the Court filed by Circuit Judge ROBINSON. ROBINSON, Circuit Judge: Petitioner, International Association of Machinists and Aerospace Workers, AFL- 2a CIO (1AM), complained to the National Labor Rela- tions Board that the Boeing Company, as a successor employer, unlawfully refused to bargain with IAM over the initial terms and conditions of the successor employ- ment. The Board interpreting Supreme Court pronounce- ments on the subject,’ concluded that Boeing had no clear plan to incorporate as a majority of its own workforce employees of the predecessor employer *—a prerequisite to an obligation to bargain with incumbent employees over initial employment terms * and the litigation is now before us for review of the decision and order of the Board dismissing IAM’s complaint.‘ We accept the Board’s con- struction and application of Supreme Court doctrine on the duty of a successor employer to negotiate with an incumbent union before fixing such terms and accord- ingly affirm. I For seven years prior to March 31, 1971, Trans World Airlines (TWA), pursuant to contract, performed instal- lation support services for the National Aeronautical and Space Administration (NASA) at the Kennedy Space Center. These services included test support management, plant engineering and maintenance, and logistical func- tions relating to NASA’s utilization of the Center as a principal space-launch site. Since February, 1964, TWA had recognized IAM as the exclusive bargaining rep- resentative of the employees performing such services at the Center; and as of March 7, 1971, 1,054 of these em- ployees were covered by an agreement between IAM 1 See Parts II-III infra. 2 Boeing Co., 214 N.L.R.B. 541 (1974). Members Fanning and Panello dissented. * See text infra at note 34. + Our jurisdiction rests on § 10(f) of the National Labor Rela- tions Act, 29 U.S.C. § 160(f) (1970). 8a and TWA for an effective term extending from January 28, 1970, through the end of 1971. The agreement was a company-wide contract encompassing all TWA opera- tions in the Nation and by its terms was governed by the Railway Labor Act.° On June 30, 1970, NASA invited bids for an under- taking to furnish essentially the same installation sup- port services as those previously supplied by TWA.° The term of the undertaking was to be one year commencing April 1, 1971, subject to extensions for successive one- year terms at NASA’s option. In response to the invita- tions, proposals were submitted to NASA by TWA, Boeing and five other companies. The labor costs specified in Boeing’s principal bid were based specifically upon the wage rates and fringe benefits stipulated in its existing national agreement with IAM, which also applied to Boeing’s “hardware contracts” with NASA for the Cen- ter.’ These costs were substantially below those set by TWA’s preexisting agreement with IAM for the installa- tion support service unit. NASA’s invitation required bidders to explain their recruiting plans, including the “approximate number,” by type, of existing employees to be hired. Boeing proposed to acquire 85.6% of its total work force for the operation from incumbent employees. This figure was derived after 545 U.S.C. § 151 et seq. (1970). ® Among other minor changes, mail and distribution services affecting 51 unit empleyees were eliminated. The assumption of that work by a new contractor gave rise to other litigation in this court. JAM v. NLRB, 162 U.S.App.D.C. 138, 498 F.2d 680 (1974). * Boeing has had various “hardware contracts” with NASA at the Center dating from 1952. Under these agreements Boeing was responsible for “launch support services,” usually involving research and testing, associated with particular missile projects. The pro- grams overlapped while earlier enterprises were phased out and new programs initiated. During these transition periods, employees were trensferred between projects. 4a computing the number of Boeing employees who would transfer to the operation, the number to be recalled from layoff from Boeing employment in the area, and the number with known talent available in the area for em- ployment. Boeing stated that its staffing proposal “recog- nize[d] the desirability of retaining incumbent contractor personnel to provide continuity of functional support,” * and reported that its “analysis indicate[d] that effective- ness and economy can be achieved by retaining experi- enced and qualified incumbent personnel.”* Boeing’s proposition repeatedly noted a need for continuity and its intent to hire incumbent employees,” but observed that “(while the staffing plan is based on retaining approxi- 8 Boeing Co., supra note 2, 214 N.L.R.B. at 543. 9 Jd. 10 Boeing proposed a lengthy baseline phase-in plan, one criterion of which was that “Boeing can and will staff the majority of the total work force from the incumbent contractor.” Jd. Additionally, Boeing’s industrial relations chief at the Center declared that Boeing expected to hire a work force of approximately 1,000 em- ployees, of whom it proposed to recruit “[a]ll” the TWA personnel “we could get,” id., not less than 86% and “closer to 100 percent,” id. The proposal outlined detailed selection procedures stressing retention of incumbents, and Boeing announced to the press its intention to obtain the bulk of its workforce from incumbent em- ployees. Newspapers circulating in the county in which the Center is situated reported that Boeing would hire a “majority” or a “large percentage” of TWA incumbents, id., and Boeing was quoted as saying that it “want[ed] to upset the community as little as possible.” Jd. At Boeing’s first meeting with IAM in late Novem- ber, 1970, and at their second meeting on December 4, 1970, Boeing indicated to IAM that it would retain most of the TWA employees. During phase-in of the project, Boeing’s employment supervisor told IAM “that we desire[] to employ in essence most of our re- quired employees from the ranks of the incumbent contractor,” id., and Boeing informed TWA at a meeting on November 30, 1970, that “most of [the TWA employees] would be hired,” id. TWA officials reported that Boeing “hoped to hire the majority[;] ... [it] desired to hire as many TWA people as possible,” id., and on December 1, 1970, TWA advised its employees that “Boeing is inter- ested in hiring the majority of [TWA] employees” at the Center. Id. 5a mately 86 percent of the incumbent personnel, [Florida State Employment Service] data indicated that the local labor market is sufficient in both skills and number to provide the staffing requirements of this contract.” On November 23, 1970, NASA announced that it had selected Boeing as the party with which it would ne- gotiate a contract to provide the installation support services at the Center. Subsequently, Boeing requested a meeting with IAM to discuss the company’s bid, and at the meeting, on December 4, 1970, Boeing emphasized that its proposal to NASA was based on its current “hardware contract” at the Center. At an internal meet- ing on the next day, IAM officials agreed that they could not accept Boeing’s plan to apply its existing contract with IAM to installation support service employees be- cause that would result in a reduction in wages and benefits for such of them as were incumbents.” IAM promptly communicated its decision to Boeing and NASA, indicating that IAM would insist on perpetuation of the agreement with IAM and TWA for these employees. Despite vigorous protests by TWA and IAM, NASA contracted with Boeing for the installation support serv- 11 Jd. at 549 (decision of administrative law judge). Boeing con- sulted the Florida State Employment Service and was notified in August, 1970, that qualified personnel in the desired classifications could readily be obtained from available manpower in the county. To survey the local market, Boeing advertised in a local newspaper on July 26 and August 7 for applicants for employment on the project and received numerous affirmative responses. 12 After occurrence of the events leading to this litigation, the Service Contract Act, 41 U.S.C. §§ 351 et seq. (1970), was amended to provide that no sucecssor government contractor may pay its employees less than the wages and fringe benefits set forth in the previous contractor’s collective bargaining agreement. Service Con- tract Act Amendments of 1972, Pub. L. No. 92-473, § 3(b), 86 Stat. 789, 41 U.S.C. § 353(¢) (Supp. II 1972); see Boeing Co. v. IAM, 504 F.2d 307, 311-312 & n.7 (5th Cir. 1974), cert. denied, 421 U.S. 913, 95 S.Ct. 1570, 43 L.Ed.2d 779 (1975). The amendment was not made retroactive. Id. 6a ices on March 11, 1971. On the day following, IAM requested recognition by Boeing and again urged adoption of the TWA-IAM collective bargaining agreement. Boeing replied on March 19 that it recognized IAM as the rep- resentative of the employees on the assumption that they : would become an accretion to the unit already covered by the Boeing-IAM contract rather than a distinct unit.’ Boeing predicted that IAM would lack majority repre- sentation of the installation and support service work- force, and indicated that the Boeing-IAM contract would be implemented without change. On April 1, 1971, Boeing began performance of the contract with a workforce of 970, including 380 TWA incumbents, 138 Boeing employees—transferred or re- called from layoff, or formerly Boeing personnel—450 outsiders and two employees unidentified as to source. Each hourly employee arriving for work on and after April 1 was given a copy of the Boeing-IAM agreement. As the Boeing-IAM national agreement was to expire on October 1, Boeing and IAM commenced negotiations on or about August 3, 1971 for a replacement. On No- vember 12, 1971, the parties entered into a new nation- wide agreement effective from December 13, 1971, through October 1, 1974, with a provision for automatic yearly renewal. Throughout the negotiations, each side main- tained its legal position on the applicability of the TWA- 13In adjudicating IAM’s claim of unlawful unilateral successor conduct, the administrative law judge observed that if, as Boeing maintained, the appropriate unit were to consist of the installation support service employees in combination with employees already engaged pursuant to Boeing’s current hardware contracts with NASA, terms and conditions for all such employees would have been governed by the existing Boeing-IAM agreement; but the judge regarded the accretion principle inapplicable in the circum- stances of the case. Boeing Co., supra note 2, 214 N.L.R.B. at 558- 559 (decision of administrative law judge). r Ta IAM contract to the installation support service unit at the Center.** On May 10, 1973, the Board’s General Counsel issued a complaint, upon charges filed by IAM, alleging a viola- tion of Section 8(a) (5) of the National Labor Relations Act” arising from Boeing’s failure to consult IAM on the initial terms and conditions of employment for the installation support services unit.** An administrative law judge recommended that the complaint be dismissed in its entirety.” Relying on a number of factors, the judge rejected IAM’s contention that Boeing had a “perfectly clear” plan to retain a substantial majority of incum- bent employees *—a plan that would have created an obligation on Boeing’s part, under the Supreme Court’s Burns holding,” to consult with IAM before setting initial employment terms.”” Although the Board agreed with the administrative law judge’s conclusions and 147AM filed grievances and sought to compel Boeing to arbitrate under the IAM-TWA agreement. The issue was resolved against IAM in a suit under § 301 of the Labor Management Relations Act of 1947, 29 U.S.C. § 185 (1970), filed by Boeing for a declara- tory judgment that it was not bound by that agreement. Boeing Co. v. IAM, supra note 12. In IAM v. Hodgson, 169 U.S.App.D.C. 142, 515 F.2d 373 (1975), LAM failed in its suit for damages under the Service Contract Act of 1965, 41 U.S.C. § 351 et seq. (1970 & Supp. II 1972), as amended by Act of Apr. 21, 1976, Pub. L. No. 94-273, § 29, 90 Stat. 380, and Act of Oct. 13, 1976, Pub. L. No. 94-489, §§ 1-2, 90 Stat. 2358. 15 29 U.S.C. § 158(a) (5) (1970). 16 The complaint also asserted violations of §§ 8(a)(1) and (3), 29 U.S.C. §§ 158(a) (1), (3) (1970), which are not pertinent here. 17 The decision of the administrative law judge is appended to that of the Board. Boeing Co., supra note 2, 214 N.L.R.B. at 545. 18 Id. at 559-560. 1° NLRB v. Burns Int'l Security Servs., Inc., 406 U.S. 272, 92 S.Ct. 1571, 32 L.Ed.2d 61 (1972). 2° See Part II infra. 8a adopted his recommended order, it expressly chose to ground its decision solely on the reasons set forth in its Spruce Up opinion * as applied to the facts of the instant case. The Board’s order was followed by the petition to this court for review. II An employer’s collective bargaining obligation derives from Section 8(a) (5) of the National Labor Relations Act, which makes it an unfair labor practice for an em- ployer “to refuse to bargain collectively with the rep- resentatives of his employees, subject to the provisions of section [9(a)] of [the Act].”** Section 9(a) provides in pertinent part that “[r]epresentatives designed or selected for the purpose of collective bargaining by the majority of the employees in a unit appropriate for such purposes, shall be the exclusive representatives of all the employees in such unit for the purposes of collective bargaining. . . .”** By conjunctive operation of these two sections, a union representing a majority of the em- ployees in an appropriate bargaining unit may compel the employer to negotiate with respect to the terms and conditions of employment applicable to that unit. In Burns, the Supreme Court considered the impact of employer succession on the bargaining status of a un- ion previously selected by the predecessor employer’s labor force. Like the case before us, Burns involved a succes- sion to duties under a service contract; Burns Interna- *1 Spruce Up Corp., 209 N.L.R.B. 194 (1974), enforced per curiam on other grounds, 90 L.R.R.M. 2525 (4th Cir. Sept. 16, 1975). 22 Boeing Co., supra note 2, 214 N.L.R.B. at 541 (with Members Fanning and Panello dissenting). 23 Supra note 15. 2429 U.S.C. § 159(a) (1970). 25 NLRB v. Burns Int’l Security Servs., Inc., supra note 19. 9a tional Security Services, Inc., had replaced Wackenhut Corporation, which for five years had provided piant- protection services for Lockheed Aircraft Service Com- pany at an airport. Burns retained 27 of the Wackenhut guards and completed its workforce with 15 of its own transferrees [sic] from other Burns locations. Burns re- fused to deal with the United Plant Guard Workers of America (UPG), which less than four months earlier had been certified after a Board-supervised election as the ex- clusive bargaining representative of Wackenhut’s em- ployees. UPG demanded that Burns recognize it as the representative of the Burns workforce at the airport and that Burns honor the UPG-Wackenhut collective bargain- ing agreement. Addressing Burns’ alleged duty to negotiate with the union,” the Court held that when a bargaining unit is left undisturbed by employer succession and a majority of the unit’s employees hired by the new employer are already represented by a union as the recently certified bargaining agent, an order directing the employer to bargain with the union implements wholesomely the ex- press mandates of Sections 8(a) (5) ** and 9(a) ** of the Act.” But, the Court held, assumption of Wackenhut’s 26 Whether a new employer must assume the responsibilities of his predecessor will depend on what obligations are at issue. A new employer may be a “successor” for some purposes and not for others. See Howard Johnson Co. v. Hotel & Restaurant Employees, 417 U.S. 249, 262-263 n.9, 94 S.Ct. 2236, 2243-2244 n.9, 41 L.Ed.2d 46, 56-57 n.9 (1974); IAM v. NLRB, 134 U.S.App.D.C. 239, 244, 414 F.2d 1135, 1140, cert. denied, 396 U.S. 889, 90 S.Ct. 174, 24 L.Ed.2d 163 (1969) (concurring opinion); Boeing Co. v. IAM, supra note 12, 504 F.2d at 317. 27 Quoted in text supra at note 23. 28 Quoted in text supra at note 24. 2° 406 U.S. at 279, 92 S.Ct. at 1577, 32 L.Ed.2d at 68. Reading §§ 8(a)(5) and 9(a) together, the Court ruled that the incumbent union could have compelled Burns, the successor employer, to negoti- ate if indeed the union had been the representative of a majority 10a collective bargaining contract did not follow from any duty on Burns’ part to bargain since by the express terms of Section 8(d) of the Act a bargaining obligation “does not compel either party to agree to a proposal! or require the making of a concession.” * That result was rein- forced, the Court said, by the practical importance of allowing a successor employer to alter the structure of a of the employees in an appropriate unit. Jd. at 277, 281, 92 S.Ct. at 1577, 1579, 32 L.Ed.2d at 67, 69; see, e.g., Golden State Bottling Co. v. NLRB, 414 U.S. 168, 184 n.6, 94 S.Ct. 414, 425 n.6, 38 L.Ed.2d 388, 402 n.6 (1973) (“because the purchaser is not obligated by the Act to hire any of the predecessor’s employees [citing Burns | the purchaser, if it does not hire any or a majority of those em- ployees, will not be bound by an outstanding order to bargain issued by the Board against the predecessor or by any order tied to the continuance of the bargaining agent in the unit involved [citing Burns|”); NLRB vy. Band-Age, Inc., 534 F.2d 1, 3 (1st Cir.), cert. denied, 429 U.S. 921, 97 S.Ct. 318, 50 L.Ed.2d 288 (1976) (Burns identified as a significant factor in determining a successor’s duty to bargain “the permissibility of assuming the continued existence of a union majority”) ; NLRB v. Daneker Clock Co., 516 F.2d 315, 316 (4th Cir. 1975) (“more than half of Daneker’s production employees had worked for its predecessor”); Toma-A-Hawk Transit, Inc. Vv. NLEB, 419 F.2d 1025, 1027 (7th Cir. 1969) (successor began opera- tions with 24 drivers and maintenance employees, 14 of whom had worked for the predecessor); Pacific Hide & Fur Depot, Ine. Vv. NLRB, 553 F.2d 609, 611 (9th Cir. 1977) (“absent a refusal to hire because of anti-union animus, a majority of the work force of the purchasing employer in the unit [must] be former employees of the seller in that unit”). Despite the intimation in Golden State Bottling Co., supra, that Burns recognizes a successor’s duty to bargain only when he hires a majority of his predecessor's employees, the relevant ratio— suggested by the language in Burns itself, see text infra at note 33 and 406 U.S. at 277, 281, 92 S.Ct. at 1577, 1579, 32 L.Ed.2d at 67, 69—is not the percentage of the predecessor’s employees enrolled by the successor but the percentage of the successor’s work force populated by those employees. See cases cited supra. This is true because the question to be resolved in light of §9(a) is whether the incumbent union represents a majority of the successor’s em- ployees. See text supra at notes 24-25; Boeing Co. v. IAM, supra note 12, 504 F.2d at 319 & n.18, 320 & n.20, 321. % 406 U.S. at 282, 92 S.Ct. at 1579, 32 L.Ed.2d at 70, quoting § 8(d), 29 U.S.C. § 158(d) (1970). lla moribund business beyond the confines of a predecessor’s labor agreement, as well as by the corresponding value to a union of an unshackled ability to negotiate a new con- tract with a more prosperous successor firm.* The Court then proceeded to hold that ordinarily a suc- cessor employer may set his initial terms and conditions of employment without bargaining with the incumbent union: Although Burns had an obligation to bargain with the union concerning wages and other condi- 31406 U.S. at 287-289, 92 S.Ct. at 1582-1583, 32 L.Ed.2d at 72-74. The Court observed that if the successor were inhibited by the former employer’s contract with the union, [i]t would seemingly follow that employees of the predecessor would be deemed employees of the successor, dischargeable only in accordance with provisions of the contract and subject to the grievance and arbitration provisions thereof. Burns would not have been free to replace Wackenhut’s guards with its own except as the contract permitted. Id. at 288, 92 S.Ct. at 1582-1583, 32 L.Ed.2d at 73 (ootnote omitted). We note, however, that if the successor employer refuses to hire his predecessor’s employees because of their union membership or activity, or to avoid recognition of the union, he violates § 8(a) (3), 29 U.S.C. § 158(a)(3) (1970). See Howard Johnson Co. Vv. Hotel & Restaurant Employees, supra note 26, 417 U.S. at 262 n.8, 94 S.Ct. at 2243 n.8, 41 L.Ed.2d at 56 n.8; NLRB v. Burns Int'l Security Servs., supra note 19, 417 U.S. at 280-281 n.5, 92 S.Ct. at 1578-1579 n.5, 32 L.Ed.2d at 69 n.5; Tri State Maintenance Corp. Vv. NLRB, 132 U.S.App.D.C. 368, 408 F.2d 171 (1968); K. B. & J. Young’s Super Mkts. v. NLRB, 377 F.2d 463 (9th Cir.), cert. denied, 389 U.S. 841, 88 S.Ct. 71, 19 L.Ed.2d 105 (1967) (mass discharge of unit personnel to evade bargaining obligations with incumbent union held to violate § 8(a) (3), and refusal to bargain with union held to violate § 8(a)(5); Barrington Plaza & Tragniew, Inc., 185 N.L.R.B. 962 (1970) (discriminatory refusal to hire incumbent em- ployees held to violate §§ 8(a)(1) and (3) ; because purpose under- lying refusal to hire was to evade a bargaining relationship and old employees would have constituted a majority of new work force, refusal also held to violate §8(a)(5) and bargaining obligation imposed) . 12a tions of employment when the union requested it to do so, this case is not like a §8(a) (5) violation where an employer unilaterally changes a condition of employment without consulting a bargaining rep- resentative. It is difficult to understand how Burns could be said to have changed unilaterally any pre- existing term or condition of employment without bargaining when it had no previous relationship whatsoever to the bargaining unit and, prior to July 1, no outstanding terms and conditions of em- ployment from which a change could be inferred. The terms on which Burns hired employees for service after July 1 may have differed from the terms extended by Wackenhut and required by the collective-bargaining contract, but it does not follow that Burns changed its terms and conditions of em- ployment when it specified the initial basis on which employees were hired on July 1.* But, to the general rule that a successor employer may specify initial employment terms without first conferring with the union, the Court articulated an exception—on the applicability of which the present litigation turns— for circumstances in which a duty to bargain will arise early enough in the predecessor-successor transition to necessitate union involvement in designation of those terms: 82 Id. at 294, 92 S.Ct. at 1585, 32 L.Ed.2d at 76-77. The Court thus overturned a line of Board decisions requiring a successor employer always to bargain with the incumbent union before insti- tuting employment terms different from those prevailing under the predecessor’s contract, whether or not the successor was bound by that contract. See, e.g., Emerald Maintenance, Inc., 188 N.L.R.B. 876 (1971); Valleydale Packers, Inc., 162 N.L.R.B. 1486 (1967) enforced, 402 F.2d 768 (5th Cir. 1968), cert. denied, 396 U.S. 825 90 S.Ct. 66, 24 L.Ed.2d 75 (1969); Overnite Transp. Co., 157 N.L.B.B. 1185 (1966), enforced, 372 F.2d 765 (4th Cir.), cert. denied, 389 U.S. 383, 88 S.Ct. 59, 19 L.Ed.2d 101 (1967). ee | / 13a Although a successor employer is ordinarily free to set initial terms on which it will hire the employees of a predecessor, there will be instances in which it is perfectly clear that the new employer plans to retain all of the employees in the unit and in which it will be appropriate to have him initially consult with the employees’ bargaining representative before he fixes terms. In other situations, however, it may not be clear until the successor employer has hired his full complement of employees that he has a duty to bargain with a union, since it will not be evident until then that the bargaining representative repre- sents a majority of the employees in the unit as re- quired by $9(a) of the Act, 29 U.S.C. § 159(a). Here, for example, Burns’ obligation to bargain with the union did not mature until it had selected its force of guards late in June.* Ill In the case at bar, the Board dealt with the Burns exception by referring to the principles established in its Spruce Up decision.** The Board observed that even if 83 406 U.S. at 294-295, 92 S.Ct. at 1585-1586, 32 L.Ed.2d at 77 (emphasis supplied). 34 Spruce Up Corp., supra note 21. In an earlier decision in Spruce Up Corp., 194 N.L.R.B. 841 (1972), the Board had held: [W]here, as here, an employer who is about to acquire a going business manifests an intent to retain his predecessor’s em- ployees they become at that point his employees for the purpose of the application of Section 8(a)(5), and he is obligated to bargain with a union which is the statutory representative of such employees. Id. at 846. While the Board’s original order was pending before the Fourth Circuit for enforcement, the Supreme Court decided Burns, and at the Board’s request the case was remanded to the Board for reconsideration in light of Burns. See Spruce Up Corp., supra note 21, 209 N.L.R.B. at 194. On remand the Board modified its earlier decision and enunciated the principles at issue in the present case. l4a Boeing “intended” to hire all or sub;tantially all® of TWA’s employees, those “intentions” were from the out- set tied to the terms and conditions specified in the Boeing-IAM nationwide agreement. Quoting from its opinion in Spruce Up, the Board reasoned: When an employer who has not yet commenced opera- tions announces new terms prior to or simultaneously with his invitation to the previous work force to ac- cept employment under those terms, we do not think it can fairly be said that the new employer “plans to retain all of the employees in the unit,” as that phrase was intended by the Supreme Court.*? The possibility that the old employees may not enter into an agreement relationship with the new employer is ayrealone... .* Thus the Board theorized that a successor employer’s in- tention to retain large numbers of his predecessor’s em- ployees is not likely enough to come to fruition when his offer of employment is coupled with an announcement of reduced wages and benefits, and in such instances no duty to bargain over initial terms and conditions of employ- ment would arise. In its Spruce Up opinion, the Board maintained that a construction of the Burns caveat emphasizing simply the 85 The Board has construed the Court’s term “all,” see text supra at note 33, to mean “all or substantially all” of the incumbents. Boeing Co., supra note 2, 214 N.L.R.B. at 541. Of course, when the successor plans to expand the total work complement such that even if all incumbents were employed they would constitute only a minority, a presumption that the extant union will represent most of the new employees cannot follow from the successor’s intention to retain incumbents. 86 Td, 37 See text supra at note 33. 38 Boeing Co., supra note 2, 214 N.L.R.B. at 541, quoting Spruce Up Corp., note 21, 209 N.L.R.B. at 195. - SOS Lee ee oe 15a employer’s manifested intentions, rather than the proba- bility of employee acceptance of jobs with the successor, would discourage employers from commenting favorably on the employment prospects of old employees.*® Sensitive to that concern, the Board interpreted the Burns exception to apply only to situations in which a successor employer has misled employees into believing that all would be retained on the basis of existing wages, hours and condi- tions of employment, or at least to instances in which 4 successor employer has failed to make plain an intention to alter terms and conditions prior to offering employ- ment to incumbent employees.*° 39 Spruce Up Corp., supra note 21, 209 N.L.R.B. at 195. 40 Id. The Board has consistently adhered to this interpretation. See, e.g., Virginia Sportswear, Inc., 226 N.L.R.B. 1296 (1976); C.M.E., Inc., 225 N.L.R.B. 514 (1976); Nazareth Regional High School, 222 N.L.R.B. 1052 (1976), enforcement granted in part and denied in part, 549 F.2d 873 (2d Cir. 1977); United Maintenance & Mfg. Co., 214 N.L.R.B. 529 (1974) ; Henry M. Hald High School Ass’n, 213 N.L.R.B. 415 (1974); Anita Shops, 211 N.L.R.B. 501 (1974); Ranch-Way, Inc., 203 N.L.R.B. 911 (1973). The Sixth and Seventh Circuits have each imposed a requirement of preliminary bargaining consistent with the Spruce Up rule. In Spitzer Akron, Inc. v. NLRB, 540 F.2d 841 (6th Cir. 1976), cert. denied, 429 U.S. 1040, 97 S.Ct. 739, 50 L.Ed.2d 752 (1977), a suc- cessor employer expressed his intention to retain the old employees and indicated to them that the operation “would carry on as usual.” The court voiced its view that “the facts in the instant case are sufficient . . . to establish that the employees were misled by ‘tacit inference’ into believing they would be retained without change from the condition of employment.” Jd. at 846, quoting Brotherhood of Ry. Clerks v. REA Express, Inc., 523 F.2d 164, 171 (2d Cir.), cert. denied, 423 U.S. 1017, 96 S.Ct. 451, 46 L.Ed.2d 388 (1975). In NLRB v. Bachrodt Chevrolet Co., 468 F.2d 963 (7th Cir. 1972), vacated and remanded, 411 U.S. 912, 93 S.Ct. 1547, 36 L.Ed.2d 304, un remand, 205 N.L.R.B. 784 (1973), enforced, 515 F.2d 512 (7th Cir.), cert. denied, 423 U.S. 927, 96 S.Ct. 274, 46 L.Ed.2d 255 (1975), the court approved the Board’s determination of unlawful unilateral action when an employer manifested a purpose to hire his predecessor’s employees without contemporaneously advising them of plans to change working corditions and thereafter fixed working conditions different from those of the predecessor. See also, 16a IV We think the Board’s construction of the Burns excep- tion reasonably implements the considerations reflected in Burns as a whole.** The Burns Court accorded much im- portance to a successor employer’s freedom to alter—even Zimm’s Foodliner, Inc. v. NLRB, 495 F.2d 1131, 1142-1144 (9th Cir.), cert. denied, 419 U.S. 838, 95 S.Ct. 66, 42 L.Ed.2d 65 (1974). In Nazareth Regional High School v. NLRB, supra, the Second Circuit invoked Spruce Up to deny a bargaining obligation where a successor employer proposed new employment terms after earlier communicating to the incumbent employees its intention to hire the entire incumbent staff without committing itself to adoption of the old terms. The Board had contended that because Nazareth failed to indicate in an initial announcement of intent to rehire all of the employees that new terms would be imposed, Spruce Up was distinguishable, and that a finding of a duty to bargain at that point was justified. 549 F.2d at 881. Rejecting that thesis, the court proclaimed that “[{t]he important consideration in determining whether it is perfectly clear that a successor intends to retain all of the employees is whether they have been promised reemployment on the existing terms.” Jd. (emphasis supplied). We have no occasion to consider the restriction thus imposed. ‘1 When the case summons an interpretation, not of statutory language itself, but of Supreme Court pronouncements of controlling statutory principles, deference to the Board may ordinarily be less appropriate. The Burns exception, however, provides minimal guid- ance, which is supplemented only generally by the policy considera- tions manifested in the decision. That the proviso can and should be construed with sensitivity to conflicting policies is evident from its terms; the exception envisions preliminary bargaining in “in- stances in which. . . it [is] appropriate to have [the successor] initially consult with the employees’ bargaining representative.” See text supra at note 33. NLRB v. Bachrodt Chevrolet, Inc., supra note 40, 468 F.2d at 972 (dissenting opinion). Balancing competing interests to effectuate national labor policy, particularly in the suc- cessorship context, is a delicate responsibility committed primarily to the Board. See JAM v. NLRB, supra, note 26, 134 U.S.App.D.C. at 245, 414 F.2d at 1141 (concurring opinion). Compare NLRB vy. Local 103, Ironworkers Int’l, 46 U.S.L.W. 4081, 4085 (U.S. Jan. 17, 1978). We are inclined, then, to yield deference to the Board’s construction once assured of its compatibility with the spirit as well as the language of the Burns opinion. ee . 17a remake—the acquired enterprise. Certainly that in- cludes the ability ordinarily to set initial employment terms and conditions without preliminary bargaining with an incumbent union.** The exception to the succes- sor’s normal prerogative is narrow: initial-terms bargain- ing, in the Supreme Court’s words, need occur only in “instances in which it is perfectly clear that the new em- ployer plans to retain all of the employees in the unit and in which it [is] appropriate to have him initially consult with the employees’ bargaining representative.” IAM insists that the Burns “plans to retain all” excep- tion unambiguously mandates initial-terms negotiations whenever a successor employer manifests an intention to hire substantially all of the incumbent workforce, whether or not that objective is conditioned on acceptance of sub- stantially reduced benefits. From the Board’s viewpoint, however, the difficulty in that position is that an employ- er’s readiness to hire only those incumbents who agree to less favorable terms may fall far short of a “perfectly clear” plan to perpetuate the old workforce as the major- ity in the new.** Recruitment objectives thus conditioned, #2 406 U.S. at 287-289, 92 S.Ct. at 1582-1583, 32 L.Ed.2d at 72-74. 43 The Burns decision restricted prevailing Board doctrine under which initial-terms bargaining was the rule rather than the ex- ception. See note 32 supra. Burns made the bargaining obligation ordinarily conditional on actual hiring of the predecessor’s em- ployees, thus leaving the successor usually free to fix unilaterally the terms of the hiring. Of course, once recruitment has been com- pleted, the chosen representative of a majority of the new em- ployees may insist that the successor negotiate with respect to terms and conditions of employment. See note 52 infra. 44 See text supra at note 33. 45 See Spruce Up Corp., supra note 21, 209 N.L.R.B. at 195: When an employer who has not yet commenced operations an- nounces new terms prior to or simultaneously with his invita- tion to the previous workforce to accept employment under those terms, we do not think it can fairly be said that the new employer “plans to retain all of the employees in the unit,” as 18a says the Board, negate an inference of probable con- tinuity of employment “* and, we might add, without more the incumbent union cannot fairly claim to represent the larger number of the successor’s prospective employees. In such circumstances, as the Court observed in Burns, ‘ft may not be clear until the successor employer has hired his full complement of employees that he has a duty to bargain with the union, since it will not be evident until then that the bargaining representative represents the majority of the employees in the unit as required by Sec- tion 9(a) of the Act... .”* that phrase was intended by the Supreme Court. The possibility that the old employees may not enter into an employment re- lationship with the new employer is a real one, as illustrated by the present facts. Many of the former employees here did not desire to be employed by the new employer under the terms set by him—a fact which will often be operative, and which any new employer must realistically anticipate. Since that is so, it is surely not “perfectly clear” to either the employer or to us that he can “plan to retain all of the employees in the unit” under such a set of facts. Since the relevant factor is the degree of likelihood that incum- bents will work for the successor, in some circumstances a specifica- tion of terms might refute the clarity of retention plans even though the offered terms are comparable to those afforded by the predecessor employer. Thus, in United Maintenance & Mfg. Co., supra-note 40, the Board declined to hold unlawful a refusal to bargain over initial terms when the employer proposed to continue existing terms but the circumstances made it plain that those terms were unacceptable to incumbent employees. On the other hand, a worsening of terms conceivably may not, in some contexts, foredoom substantial reten- tion. 46 See note 45 supra. 47 NLRB v. Burns Int'l Security Servs., Inc., supra note 19, 406 U.S. at 295, 92 S.Ct. at 1586, 32 L.Ed.2d at 77; see Pacific Hide & Fur Depot, Inc. v. NLRB, supra note 29, 553 F.2d at 612: The Burns sentence implies that when a new employer hires only part of the old unit, together with others who were never part of the unit, any decision regarding the employer’s duty to bargain with the union affects the new employer, the old em- ployees whom he has hired, and the new employees who were not previously represented by the union. The rights of all three eit HBAS HS) lament e 6 19a We think, then, that the Board may with ample reason conclude that only when an employer has indicated a purpose to retain incumbents, but has not concomitantly proposed substantial reductions in benefits, can it “be evident” that the incumbent union “represents a majority of the employees in the [successor] unit” prior to actual induction of the predecessor employees, and that only then may the union demand a say about initial terms of successor employment. To be sure, in view of the sub- stantial harmony existent in the parties’ positions, only minor adjustments in initial terms may then remain to be negotiated, and it must be acknowledged that compulsory bargaining usually yields greater returns when labor- management differences are of more appreciable magni- tude. It cannot be gainsaid, however, that some affiliation between employer and employee must be at least pre- sumable as a threshold matter before an obligation to bargain arises. So long as perpetuation of the incumbent workforce remains highly speculative, that precondition is not met. Even when Burns is read, as the Board does, to limit compulsory initial-terms bargaining to situations wherein the successor has indicated that incumbents will be re- tained and has not concurrently announced downward changes in employment terms, predecessor-employees are afforded an important measure of protection. Once the duty to bargain has thus attached, the successor is obliged to consult the incumbent union before institution of less satisfactory terms. That is significant because unconditional retention-announcements engender expecta- must be considered. Basic to this consideration is § 9(a) of the Act, ... which places in the hands of the majority of the employees in the unit the decision whether to be represented or not by the union. That majority’s right is paramount. The “full complement” standard of Burns attempts to define when the makeup of the controlling majority is to be determined. Compare note 29 swpra and accompanying text. 20a tions, ofttimes critica! to employees, that prevailing em- ployment arrangements will remain essentially unaltered. Even when incumbents are not affirmatively led to believe that existing terms will be continued,** unless they are apprised promptly of impending reductions in wages or benefits, they may well forego the reshaping of personal affairs that necessarily would have occurred but for antici- pation that successor conditions will be comparable to those in force. The Board was hardly at liberty to ignore these con- cerns, and its construction of Burns is responsive to them. On the one hand, incumbents informed of the availability of employment with the successor entity but contempora- neously notified of substantial changes in the conditions thereof are not lulled into a false sense of security. When, on the other hand, the announcement of job-availability is unaccompanied by any such warning, incumbents may resolve to cast their lot with the successor, secure in the knowledge that they can invoke the aegis of collective bargaining should alterations in the terms of the employ- ment be proposed.‘ 48In Spruce Up, the Board did not read Burns as restricting bargaining to only those situations in which employees are affirm- atively led to expect continuation of existing employment terms. Rather, by the Board’s interpretation, initial-terms bargaining is mandatory in “circumstances in which the new employer has either actively or, by tacit inference, misled employees into believing they would all be retained without change in their wages, hours, or conditions of employment, [citing Howard Johnson Co., 198 N.L.R.B. 763 (1972); Good Foods Mfg. & Processing Corp., 200 N.L.R.B. 623 (1972)] or [in] circumstances where the new em- ployer ... has failed to clearly announce its intent to establish a new set of conditions prior to inviting former employees to accept employment.” Spruce Up Corp., supra note 21, 209 N.L.R.B. at 195 (emphasis supplied). See also Nazareth Regional High School, supra note 40; C.M.E., Inc., supra note 40. *° When the employment offer and a subsequent announcement of changed terms both occur prior to actual hiring, the announcement could deter some employees from accepting, notwithstanding that it is made some time after the successor first makes known his plan to WRB et om 2la Moreover, the Board has observed, a contrary con- struction of the Burns proviso could dissuade successor employers from favorable forecasts on the employment outlook for incumbent employees.’ It seems rather evi- dent that in some instances a new employer desirous of changing prevailing employment terms may feel compelled to reveal his retention plans, notwithstanding a resultant obligation to bargain. But, in the Board’s view, as we understand it, the successor more commonly may en- deavor to conceal, or to at least postpone publicity on, re- employment objectives in order to avoid the onus of bar- gaining during the usually difficult period of takeover, and incumbent employees may thereby be deprived of early appraisal of their retention prospects.*' Given that, we cannot say that the Board was unreasonable in its stand that reading Burns expansively with the object of retain incumbents. If, for example, the successor indicates that he intends to reemploy his predecessor’s workforce a month hence, and when employees arrive to submit applications two weeks later he informs them that substantially different terms will be instituted, some incumbents may decide to look for work elsewhere. Neverthe- less, a duty to bargain with respect to the proposed changes could possibly be properly imposed on either of two grounds. For lack of sufficient time to rearrange their affairs, incumbents might be forced to continue in the jobs they held under the successor em- ployer, notwithstanding notice of diminished terms, and perpetua- tion of the workforce—and as well the representational status of the incumbent union—may be assured. Even were that less plain, a bar- gaining obligation may be essential to protect the employees from imposition resulting from lack of prompt notice. Thus a prospective employment relationship may be presumed when a successor has boldly declared an intention to retain incumbents but has not concurrently proposed substantially reduced benefits. And such an inference may be left undisturbed by revelation of employment terms after the employer’s initial announcement but before actual hiring commences. The successor would have no legitimate com- plaint about mandatory bargaining in such circumstances because its necessity is a product of his own misleading conduct. © Spruce Up Coerp., supra note 21, 209 N.L.R.B. at 195. 51 See id. 22a assuring greater stability for employees might well pro- duce the inverse result.™ 52 Significantly, nonapplicability of the Burns exception does not substantially impair the ability of incumbent employees to ensure suitable terms for the successor employment. Once incumbents are actually rehired in sufficient number to constitute a majority of the successor’s employees, their organizational representative is then in position to insist that the employer bargain with respect to the conditions of the new employment; as in Burns the Court observed, “Burns had an obligation to bargain with the union con- cerning wages and other conditions of employment when the union requested it to do so.” See text supra at note 27. And that obligation would arise immediately upon completion of hiring, notwithstanding that operations have not yet commenced. The employer would be free, however, to impose the terms he originally envisioned after consulting in good faith with the union. Thus the Burns Court remarked : If the union had made a request to bargain after Burns had completed its hiring and if Burns had negotiated in good faith and had made offers to the union which the union rejected, Burns could have unilaterally initiated such proposals as the opening terms and conditions of employment on July 1 [the first day of operations] without committing an unfair labor practice. Cf. NLRB v. Katz, 369 U.S. 736 n.12 (1962); NLRB v. Fitzgerald Mills Corp., 313 F.2d 260, 272-273 (CA2) cert. denied, 375 U.S. 834 (1963); NLRB v. Southern Coach & Body Co., 336 F.2d 214, 217 (CA5 1964). 406 U.S. at 295, 92 S.Ct. at 1586, 32 L.Ed.2d at 77. But absent a bargaining aemand by the union, the successor can simply insti- tute the terms on which the employees were hired as the beginning terms of employment, as was the situation in Burns. The Burns exception concerns only the period prior to actual hiring. The thrust of the exception, as construed by the Board, is to forestall unilateral designation of initial terms only when it seems clear that the predecessor’s employees will be retained or when necessary to safeguard employer-generated expectations that incum- bents will be rehired on terms comparable to those already in vogue. See text supra at notes 41-43. It should be evident that a bypass of initial-terms bargaining consistent with the Board’s reading of Burns does not lock indefinitely the carried-over workers into con- ditions not to their liking. Though Burns affords successor em- ployers appreciable freedom in effectuating the successorship transi- tion, the initial adjustment of rights between the employer and incumbents is largely temporal, and if incumbents are retained they can at that point endeavor collectively to improve their lot. : | : 28a V We are constrained, then, to sustain the Board in its conclusion that a successor employer need consult with an incumbent union with respect to initial employment terms prior to fixing them only when he has not evinced any intention substantially to modify the pre-existing terms before expressing a willingness to rehire incumbents. We are persuaded, too, that the Board’s construction of Burns was applied properly to the situation at bar. From the outset, Boeing’s decision to retain TWA employees was inseparable from its decision to cling to a scale of dimin- ished wages and benefits. Indeed, Boeing’s contract bid to NASA was premised importantly on labor costs reflect- ing a reduction in the rate of remuneration earned under its predecessor’s regime, and all concur that the terms Boeing stipulated fell appreciably short of those prevail- ing under TWA’s auspices. Moreover, Boeing’s inability to attract enough incumbents to compromise a majority of the new workforce tellingly evidences the inhibitive effect of the reemployment terms.** On these facts, the Board could reasonably determine that Boeing lacked a sufficiently clear retention plan to activate the Burns exception. It follows that Boeing’s failure to negotiate with IAM over initial employment terms did not trespass upon the statutory obligation “to bargain collectively with the representatives of [Boeing’s] employees.” ** The order of the Board dismissing the General Counsel’s complaint must accordingly be Affirmed. 53 The administrative record discloses that incumbents declined employment with Boeing because of the proposed reduction in wages. Boeing Co., supra note 2, 214 N.L.R.B. at 561 n.62 (decision of administrative law judge). 54 § 8(a)(5), 29 U.S.C. § 158(a)(5) (1970). 24a 214 NLRB 541 (1974) MFJKP D—8957 Kennedy Space Center, Fla. UNITED STATES OF AMERICA BEFORE THE NATIONAL LABOR RELATIONS BOARD Case 12—CA—5141 THE BOEING COMPANY and INTERNATIONAL ASSOCIATION OF MACHINISTS AND AEROSPACE WORKERS, AFL-CIO DECISION AND ORDER On January 21, 1974, Administrative Law Judge Ben- jamin B. Lipton issued the attached Decision in this pro- ceeding. Thereafter, the General Counsel, the Charging Party, and the Respondent filed exceptions and support- ing briefs, the Respondent filed an answering brief, and the National Aeronautics and Space Administration filed an amicus curiae brief. The Board has considered the record and the attached Decision in light of the exceptions and briefs and has de- cided to affirm the rulings, findings,’ and conclusions of 1 We hereby correct the following inadvertent errors in the De- cision of the Administrative Law Judge which in no way affect his Decision or our adoption thereof: In the first sentence of the first paragraph of sec. IiIl, E, November 13 should be changed to No- vember 23; in the third sentence of the same paragraph, February 26 should be changed to March 1; in the first sentence of the second paragraph of sec. III, E, “31” should be deleted; in the first chart in the fourth paragraph of sec. III, F, the number of Boeing “Ac- cepts” should be 25 rather than 26; in the second chart in the same paragraph the number of “Other” “Applications Received” should be 2,279 rather than 279, and the number of “Other” “Extended” - =o eh lawned ae oe 25a the Administrative Law Judge, as modified herein, and to adopt. his recommended Order.’ The Administrative Law Judge rejected the contention of the General Counsel and the Charging Party that Respondent had a “perfectly clear” plan to retain a sub- stantial majority of the TWA incumbents so as to create an obligation on the part of Respondent, as set forth by the Supreme Court in Burns,’ to consult with the Union before it set its initial terms and conditions of employ- ment. In so concluding, the Administrative Law Judge relied on a number of factors. | Although we agree with his conclusion, we rely solely on the reasons set forth in the majority opinion in Spruce Up Corporation, 209 NLRB No. 19 (1974), as applied hereafter to the facts of this case. Thus it is undisputed, and our dissenting colleagues do not deny, that even if it should be 586 rather than 580; in the first sentence of the fourth paragraph in sec. III, J, “immediately” should be deleted and “On March 1, 1971” should be added after “furnished’’; the sentence in the last paragraph of sec. III, J, should read: “The ultimate fact established is that on April 1, Boeing had 970 employees on its installation support services payroll, divided among 380 TWA incumbents, 138 Boeing employees (transferred, recalled from lay- off, former), 450 outsiders and 2 employees unidentified as to source”; in the first sentence of the quoted contract in the first paragraph of sec. III, M, “its” should be “this.” The Respondent has excepted to certain credibility findings made by the Administrative Law Judge. It is the Board’s established policy not to overrule an Administrative Law Judge’s resolutions with respect to credibility unless the clear preponderance of all of the relevant evidence convinces us that the resolutions are incorrect. Standard Dry Wall Products, Inc., 91 NLRB 544, enfd. 188 F.2d 362 (C.A. 3). We have carefully examined the record and find no basis for reversing his findings. 2 The Charging Party’s request for oral argument is hereby de- nied as the record, exceptions, and briefs adequately present the positions and arguments of the parties. 3 N.L.R.B. v. Burns International Security Services, Inc., 406 U.S. 272 (1972). 26a can be said that Respondent “intended” to hire all or sub- stantially all of the incumbents, Respondent’s “intentions” were from the outset tied to the lower rates and benefits of the Boeing-IAM contract. In these circumstances, as we said in Spruce Up: When an employer who has not yet commenced op- erations announces new terms prior to or simul- taneously with his invitation to the previous work force to accept employment under those terms, we do not think it can fairly be said that the new em- ployer “plans to retain all of the employees in the unit,” as that phrase was intended by the Supreme Court. The possibility that the old employees may not enter into an employment relationship with the new employer is a real one... .* * Spruce Up Corporation, supra, 11th par. of Board opinion. Member Kennedy concurred in this unding of the majority in Spruce Up Corporation. He notes that the dissenters in this case have misinterpreted the recent holding of the Supreme Court in Howard Johnson Company v. Detroit Local Joint Executive Board Hotel and Restaurant Employees and Bartenders International Union, AFL-CIO, 94 §8.Ct. 2236, 2244 (1974). The Court there stated: This continuity of identity in the business enterprise neces- sarily includes, we think, a substantial continuity in the iden- tity of the work force across the change in ownership. The Wiley Court seemingly recognized this, as it found the requisite continuity present there in reliance on the “wholesale transfer’ of Interscience employees to Wiley. /i¢. This view is reflected in the emphasis most of the lower courts have placed on whether the successor employer hires a majority of the predecessor's employees in determining the legal obligations of the successor in § 301 suits under Wiley. [Footnote omitted.] This interpre- tation of Wiley is consistent also with the Court’s concern with affording protection to those employees who are in fact retained in “the transition from one corporate organization to another” from sudden changes in the terms and conditions of their em- ployment, and with its belief that industrial strife would be avoided if these employees’ claims were resolved by arbitration eB BB AE a See ete 27a Accordingly, for these reasons we shall order that the complaint be dismissed in its entirety. ORDER Pursuant to Section 10(c) of the National Labor Re- lations Act, as amended, the National Labor Relations Board adopts as its Order the recommended order of the Administrative Law Judge and orders that the com- plaint be, and it hereby is, dismissed in its entirety. Dated, Washington, D.C., Nov. 1, 1974. EDWARD B. MILLER, Chairman HOWARD JENKINS, JR., Member RALPH E. KENNEDY, Member NATIONAL LABOR RELATIONS BOARD (SEAL) rather than by “the relative strength ... of the contending forces.” [Emphasis supplied.] Thus Member Kennedy believes that the dissenters misread the Supreme Court’s decision in Howard Johnson when they suggest that successorship does not turn on whether the successor’s em- ployees constitute more than half or less than half of the predeces- sor’s employees. In his view there can be no substantial continuity in the identity of the work force when fewer than 50 percent of the predecessor’s employees are hired by the new employer. Th dissenters’ concern that an incoming employer can control his status under the Act ignores the holding of the Supreme Court in both Burns and Howard Johnson that the former employees have no legal right to continued employment with the new employer who has the right not to hire any of the former employees, if it so desires. 28a MEMBERS FANNING AND PENELLO, dissenting: Contrary to our colleagues, for the reasons set forth in our separate dissents in Spruce Up Corporation, supra, and herein, we find that Boeing is a successor employer to Trans World Airlines (TWA) concerning the em- ployment of the Installation Support Services (ISS) em- ployees at Kennedy Space Center (KSC) and was there- fore obligated to recognize and bargain with International Association of Machinists and Aerospace Workers, AFL- CIO (IAMAW), as the representative of said employees on that basis from the time of its takeover on April 1, 1971. We further find that Boeing had a clear plan to hire all or substantially all of its required work force from ISS incumbent employees, publicly announced same, and implemented that plan to the extent possible. There- fore, under the Burns decision, supra, we conclude that Boeing had an immediate bargaining obligation to recog- nize IAMAW and to consult and negotiate with IAMAW upon sole selection of Boeing on November 23, 1970, to negotiate with the National Aeronautics and Space Agency (NASA) for a contract award before setting wages and conditions of the involved employees. Concerning whether Boeing succeeded to TWA’s bar- gaining obligation, the Administrative Law Judge proper- ly concluded that NASA awarded Boeing the same ISS operation as administered by the predecessor contractor, TWA, with only minor variations in terms of bargaining unit employees. Thus, he found that there was a con- tinuation of the same relations with NASA, the cus- tomer, and of essentially the same services, plant ma- chinery, equipment, and job functions. In addition, he found that *here were no material differences between Boeing’s method of performing the ISS contract and TWA’s method and that there is no evidence that the duties of Boeing’s supervisors are different from those who worked for TWA. However, despite all the foregoing No el drs eal Te ia nal ih sini le eae eta 29a positive factors pointing to the “substantial continuity of identity in the business operation before and after a change” in employer,’ the Administrative Law Judge failed to find that Boeing was a successor to TWA be- cause a majority of its ISS unit employees at the take- over on April 1, 1971, did not consist of TWA incum- bents, and he found this failure of a majority could not be attributed to unlawful unilateral reduction of wages by Boeing. While, as set forth hereafter, we disagree with the latter finding, without regard to how one de- termines the pretakeover bargaining issue, we do not for the reasons articulated in the separate dissents in Spruce Up, supra, find the lack of majority to be fatally deficient in establishing the successorship of Boeing. In Spruce Up we agreed: Successorship does not depend on the employment of a majority of the predecessor’s employees, but on whether a legally significant portion of the succes- sor’s employment force consists of employees previ- ously employed in the bargaining unit. In making that determination, the question of whether employ- ees of the predecessor actually predominate over other employees can hardly be the acid test of suc- cessorship, although it may be an important factor in determining whether the successor employer has a basis for doubting the Union’s majority status.° The fallacy of insistence upon majority population is fundamental. Whether or not an employer has the status of a successor cannot turn in any part on its own decision to populate its work force with more than half or less 5 John Wiley & Sons v. Livingston, 376 U.S. 543, 551 (1964). 6 Spruce Up Corporation, supra p. 34 at par. 10 of Member Fan- ning’s separate opinion subscribed to by Member Penello at fn. 48; Polytech, Incorporated, 186 NLRB 984 (1970), enfd. 469 F.2d 1226 (C.A. 8, 1972). 30a than half of the predecessor’s employees. Otherwise an in- coming employer can control too readily its own status under our Act. It can so severely undertake the existing employment terms that, should one less than a majority of the predecessor’s employees wish employment with it, by that act alone the employer can guarantee denial of the protection which it is the objective of the successor- ship doctrine to confer.’ Applying these principles to the facts herein, it is clear that as of April 1, 1971, when Boeing took over the per- formance of the ISS work, it had 970 employees on its payroll within this class, divided among 380 TWA in- cumbents, 138 Boeing employees (transferred, recalled from layoff, and former), 450 outside employees, and 2 employees unidentified as to source. In this breakdown, the TWA incumbents comprised more than 39 percent of Boeing’s employees. In our view these figures amply support a finding that the TWA employees constituted a “legally significant portion of the successor’s employ- ment force” and a “stable nucleus” of Boeing’s work force. Accordingly, we conclude, given all of the other aforementioned positive factors, that Boeing is a succes- sor to TWA, Boeing succeeded to TWA’s bargaining obli- gation on and after April 1, 1971, and Boeing violated Section 8(a) (5) by failing and refusing to recognize and bargain with the Union pursuant to its demand of March 12, 1974. In Burns, supra, the Court held that in general a suc- cessor is free to set the initial conditions of employment 7 Howard Johnson Company, supra, wherein the Court referred to “a substantial continuity in the identity of the work force.” (Em- phasis supplied.) Members Fanning and Penello disagree with Member Kennedy that successor status depends on whether a ma- jority of the predecessor’s employees are retained by the successor. See their separate dissents in Spruce Up Corporation, supra; fn. 21 in United Maintenance & Manufacturing Co., Inc., 214 NLRB No. 31; Polytech, Incorporated, supra. 3la upon which rehiring is conditioned without bargaining with the union, since prior to hiring a substantial pro- portion of his predecessor’s employees it will not be clear that he has a duty to bargain with the union. However, the Court also said that the duty to bargain may precede the formal rehiring of employees where “it is perfectly clear that the new employer plans to retain all of the employees in the unit... .”* The Court then went on to say: In other situations, however, it may not be clear until the successor employer has hired his full com- plement of employees that he had a duty to bargain with a union, since it will not be evident until then that the bargaining representative represents a ma- jority of the employees in the unit... .” Concerning the question of whether Boeing was obli- gated to bargain with the Union over the fixing of its initial terms and conditions of employment, it seems to us entirely clear that Boeing did plan to retain all or sub- stantially all of the former TWA employees. Thus, the request for proposal issued by NASA required offerors to submit a basic staffing proposal, explaining in depth how the offeror would obtain competent personnel, including a statement of its plans regarding the employment of incumbent workers. In response, Boeing stated that “In order to maintain continuity of support approximately 86 percent of the proposed organization will be staffed by qualified incumbents.” This representation that it would retain about 86 percent of the incumbent work force was repeated throughout its response. Boeing ex- plained that its staffing proposal “recognizes the desir- ability of retaining incumbent contractor personnel to provide continuity of functional support.” It further 8 Burns, supra at 294-295. 9 [bid. 32a stated that its “analysis indicates that effectiveness and economy can be achieved by retaining experienced and qualified incumbent personnel.” Boeing’s constant theme in its written proposal was the acknowledgement of need for continuity and Boeing’s intended use of incumbent contractor personnel. Thus, Boeing proposed a detailed 62-page baseline phase-in plan. One of the criteria established in writing the plan was “Boeing can and will staff the majority of the total work force from the incumbent contractor.” Boeing also averred that, “After incumbent employees have been reviewed and those selected given an opportunity for employment with Boeing, qualified local hires will be hired to fill the remaining vacancies.” (Emphasis supplied.) In addi- tion, Boeing’s industrial relations chief at the KSC, John A. Sutherland, admitted that with respect to the ISS work performed by the TWA incumbent employees rep- resented by IAMAW, Boeing expected to hire a work force of about 1,000 employees, of whom it proposed to recruit “All we could get” from the TWA incumbents, no less than 86 percent and “closer to 100 percent... .” Detailed, selective procedures for incumbents were de- vised and presented which gave prominence to selection of incumbents. As to existing collective-bargaining agreements, Boeing expressed its disbelief that the IAMAW-TWA agreement “can be legally applied” to Boeing. The IAMAW-Boeing agreement, it stated, “could cover the people performing the work.” Boeing began an immediate implementation of its plan to use all or substantially all incumbents by extensive public announcements. Boeing told the press; and news- papers in circulation in Brevard County, Florida, wherein the KSC is located, reported that Boeing would hire a “majority” or a “large percentage” of TWA incumbents. Boeing was quoted as saying that “we want to upset the PDR in SA ce 33a community as little as possible.’ Indeed, Boeing assured IAMAW, during their first meeting in late November 1970 and then at their second meeting on December 4, 1970, that it would retain most of the TWA incumbents in employment. As admitted by Clifford W. McGee, Jr., Boeing’s employment supervisor during the Phase-in of the ISS project, he told IAMAW “that we desired to employ in essence most of our required employees from the ranks of the incumbent contractor.” At a meeting on November 30, 1970, Boeing informed TWA that “most of them [TWA employees] would be hired.” As TWA Director of Industrial Relations Keil recalled, Boeing stated it “expected to hire between 80 to 90 percent” of the TWA incumbents. Moreover as Harry Orlander, TWA’s staff vice president, operations and _ services, stated, Boeing indicated it “hoped to hire the majority .... [it] desired to hire as many TWA people as possible.” In addition, on December 1, 1970, TWA informed its employees that “Boeing is interested in hiring the ma- jority of TWA/KSC employees.” Boeing further implemented its plan to use the in- cumbents by putting into effect initial procedures de- signed to hire the majority of the incumbents. Thus, by December 4, 1970, Boeing and TWA agreed upon a detailed procedure by which TWA incumbents desirous of employment with Boeing would apply for a job. Even when hampered by the effective strike action of Local 773, Boeing did all it could do in seeking to obtain the incumbents. Boeing conducted early interviews of in- cumbents. Boeing offered jobs early to incumbents. Boe- ing substituted job offers to incumbents at the last mo- ment in place of offers already made up for “others,” at least for required skilled leadmen and journeymen incumbents, who were, of course, essential to run the operation efficiently. Reviewing fully, as we have just done, what Boeing was required to plan for, what Boeing 34a proposed, what Boeing publicly announced, and what Boeing did, we can only conclude that Boeing planned to retain all or substantially all of the incumbent’s work force within the meaning of the aforementioned Burns language. Our colleagues in the majority in effect would trans- form an incoming employer’s “plans to retain” his prede- cessor’s employees, which is the Burns test, into ‘a com- mitment to hire or an actual advance hiring of such em- ployees,” as found by the Administrative Law Judge. The latter meaning is wholly different and is destructive of the “plan to retain” standard. A “commitment to hire or an actual advance hiring” is an overt entry into a contract of employment between the employer and em- ployee with nothing left to consummate the engagement except reporting for work at a future fixed time. It is, albeit informal, an offer and acceptance of employment, and hence a completed contract. A “plan to retain,” on the contrary, necessarily pre- cedes any “commitment to hire or an actual advance hiring... .” A plan to retain simply signifies that the incoming employer proposes to look to the incumbent em- ployees as the primary source of his work force. That plan is the stage preliminary to the employer’s approach to the incumbent. It precedes, and is independent of, any ensuing commitment to hire or actual advance hir- ing. Once the subsequent commitment or actual advance hiring is made, it is no longer a plan; it is a consum- mated transaction. It is therefore self-contradictory to equate the plan with the commitment. The former pre- cedes the latter; it is not coterminous with it. Our colleagues agree with us that Burns does not con- dition the obligation to consult initially with a union be- fore fixing employment terms on a showing of the succeed- ing employer’s intention to retain all unit employees. In- stead, an employer has a duty of initial consultation Cn tN wi A AT Et ESS eT PL. lll 35a when it becomes evident that he, in fact, will retain a sufficient number of his predecessor’s employees so that the incumbent bargaining representative will continue as the 9(a) majority representative of the successor’s em- ployees. Support for this view is found in the Court’s quoted Burns language. The Court followed its “plans to take all” language in the very next sentence of its opinion by stating that “in other situations, however,” it may not be clear whether a succeeding employer must bargain until he has hired his full work complement. When the two sentences are read together, it appears that the Court has compared the situation where the representative status of the union is clear with the situation where the union’s representative status and the consequent employer bar- gaining obligation is not evident until after the full complement is hired. The “plans to retain all” sentence is therefore to be viewed as referring to the obvious, rather than to the sole situation in which the employer’s bargaining obligation arises. Equally apparent, from the Court’s language, a successor employer’s initial bargain- ing obligation can be said to arise also in a situation where, as here, he plans to retain sufficient unit em- ployees to continue the union’s majority status, and that, consequently, a planned “substantial retention” gives rise to the bargaining obligation. Our separate dissents in Spruce Up, supra, dealt with the central fallacy of our colleagues’ analysis, i.e., as Boeing’s plan to retain the incumbents was “simultan- eously and inextricably linked in Boeing’s proposals” with the lower terms it proposed to offer them, the existence of the plan did not in the language of Burns impose upon Boeing the obligation to “initially consult with the employees’ bargaining representative before... . [the incoming employer] fixes terms.” In response, it was said then, and we reiterate now: | 36a The Court [in Burns] there said nothing about a conditional intent to hire. The majority are attempt- ing to revise substantially what the Court said, for their view, would, in effect, abrogate the exception, as the only case when a violation would occur under their test would be the unlikely situation where a successor says he will continue the employees under the exact terms and conditions as existed before the takeover. If he says that he “plans” to alter the status quo in any way, while at the same time in- dicating a desire to retain the old employees, they would find this amounts to a conditional intent to hire. I cannot ac-ept that the Supreme Court would announce a rule of law that is so restrictive as to amount to a nullity.’ The majority’s contrary construction of this as- pect of the Burns decision leads to the anamalous, if not absurd, result that a bargaining obligation over the establishment of the successor’s initial terms and conditions of employment arises when the suc- cessor plans to retain the former employees at the terms their union had already established through collective bargaining with the predecessor employer but not when he plans to retain them at terms dif- ferent from those previously established. The ma- jority would bring to bear “the mediatory influence of negotiation” where there is no controversy, but deny its appropriate use where there is controversy. They thus turn the Act on its head, and to no useful end.” Therefore, we conclude that Boeing’s unilateral fixing of ISS wage conditions at a wage rate substantially be- low those rates which prevailed under TWA was in 10 Spruce Up, supra at par. 4 of Member Penello’s separate opinion. 11 Jbid. at par. 14 of Member Fanning’s separate opinion. a lh Lim CN a nant ant ANE NN Oh we eM ws Ua oy ete Net eee en eee Soe et ee eee ee ee eee 37a violation of its duty to bargain and was unlawful under Section 8(a) (5). We also find for the reasons below that TWA employees acted concertedly and under the guidance of Local 773, starting in December 1970, in refraining from sending employment applications to Boeing because of the unilaterally reduced wage rates. These employees became unfair labor practice strikers of Boeing protest- ing Boeing’s unilateral action. Thus, TWA employees acted concertedly and under the guidance of Local 773, starting in December 1970, and refrained from sending employment applications to Boeing because of the unilaterally reduced wage rates. Local 773 first determined what TWA proposed to do. It then went to Washington, D.C., to ascertain what was happening; and while there, alerted IAMAW of TWA’s ISS employees’ basic interest in preserving their wage rates. It visited NASA. It learned that Boeing was pro- posing not to pick up any part of its contract. It formu- lated demands which included a position of preserving its rates. These demands became known to Boeing. Local 773 acquiesced initially to a few applications being sent to Boeing through Keil’s office with cover letter sufficient to preserve its position on rates; and sufficient to give Boeing the message that Boeing was going to have to consider the position of Local 773 if Boeing wanted co- operation in the orderly transition of incumbents. There- after, Local 773 guided employees in withholding applica- tions; brought pressure on Boeing thereby; and conse- quently restricted interviews. It publicly demonstrated. Local 773 pursued its position until it got a meeting with Boeing and IAMAW on February 19, 1971, at which time the strikers through the IAMAW unconditionally requested reinstatement and offered to begin work for Boeing and to submit whatever forms were required. The Administrative Law Judge relates there was con- fusion over a number of items and that it is speculative PE i + + + ~~ 38a as to why incumbent employees reacted and did not sub- mit applications. Such an approach at best mixes vary- ing reasons for support of a local union’s position with the fact that a local union action was taken. It makes no difference that the International did not authorize the strike action. The issue is whether Local 773 called for said action and incumbent employees in responding en- gaged in protected concerted activity. The withholding of applications was the recommended action. The local announced it in meetings. Members were so notified by mail in a letter under signature of.the local union presi- dent. It is enough if the local union told incumbent em- ployees not to turn in applications; or even as later that the local preferred they not do so. The acts taken were believed by the local at the time as acts taken in the best interest of the membership and the employees by following such directed actions agreed. Accordingly, Boeing was under an immediate obliga- tion to reinstate the strikers as of the time Boeing be- gan operations on April 1, 1971, replacing, if necessary, employees already hired. Boeing’s failure to accept them was itself violative of Section 8(a)(1) and (3) of the Act. Had Boeing not unlawfully refused to reinstate these strikers clearly the majority, if not fully 85.6 percent, of the work force would have been obtained from the eventual 944 who applied. Furthermore, employees who were entitled to reinstatement but not reinstated should be reinstated and made whole for any loss of pay suffered or status lost. In conclusion, for the reasons stated above, we would find Respondent violated Section 8(a) (5), (3), and (1) acral ee eee Pit sale . Penden oe + 39a of the Act, and would order Respondent to take appropri- ate action to remedy these violations. Dated, Washington, D.C., Nov. 1, 1974. JOHN H. FANNING, Member JOHN A. PENELLO, Member NATIONAL LABOR RELATIONS BOARD 40a J D-22-74 Kennedy Space Center, Fla. UNITED STATES OF AMERICA BEFORE THE NATIONAL LABOR RELATIONS BOARD DIVISION OF JUDGES WASHINGTON, D.C. Case No. 12-CA-5141 THE BOEING COMPANY and INTERNATIONAL ASSOCIATION OF MACHINISTS AND AEROSPACE WORKERS, AF'L-CIO Robert G. Romano, Esq., for the General Counsel. Alley, Rock and Dinkel, of Miami, Fla., by James M. Blue, Esq., and Scott Charlton, Esq., for the Respond- ent or Boeing. Bernard Dunau, Esq., of Washington, D.C., for the Charging Party or the IAM. DECISION Statement of the Case BENJAMIN B. LIPTON, Administrative Law Judge: From July 24 through 27, 1973, this proceeding was heard before me in Tampa, Florida. The charge was filed and served on April 1, 1971, and the complaint thereon was issued by the General Counsel on May 10, 1973. Alleged are certain violations of Section 8(a) (1), (3) and (5) of the Act, more specifically defined below. Com- prehensive main and authorized reply briefs‘ were filed 1 Received October 1, 1973. 0 - ™ ; : : 4la by the General Counsel, Respondent and Charging Party; and by special leave, a brief amicus curiae was submitted by the National Aeronautics and Space Administration, herein called NASA. Upon the entire record,? and from my observation of the witnesses who testified before me, I make the follow- ing: Findings of Fact I. The Business of Respondent; Jurisdiction The Boeing Company, herein called the Respondent or Boeing, with its principal office and place of business in Seattle, Washington, is generally engaged in the manu- facture of aircraft and aerospace equipment. In Brevard County, Florida, at the Kennedy Space Center, herein called KSC, Respondent provides test support manage- ment, plant engineering and maintenance, and other services pursuant to a contract with NASA effective from April 1, 1971. The latter operations are particu- larly involved in this proceeding. During the year pre- ceding issuance of the complaint, Respondent received goods and materials directly in interstate commerce at its KSC facility valued in excess of $50,000. I find that Respondent is engaged in commerce within the meaning of the Act.* 2 At the instant hearing, the parties stipulated the authenticity and admission into evidence of various documents and exhibits, including transcripts of depositions and appended exhibits taken in another proceeding before the U.S. District Court, Orlando (Flor- ida) District. However, each of the parties reserved the right to argue the materiality and relevancy of all these documents. The stipulated material provides the major portion of all the evidence. The complete record thus made comprises the equivalent of some 7,000 transcript size pages and briefs consist of about 400 pages. 3 Certain contentions of Respondent contesting the Board’s juris- diction are considered and rejected infra, following a description of the underlying issues. 42a II. The Labor Organization Involved International Association of Machinists and Aerospace Workers, AFL-CIO, hereinafter called the Union or the IAM, is a labor organization within the meaning of the Act. III. The Alleged Unfair Labor Practices A. The Pleadings; the Issues Broadly Defined In essence, the complaint alleges: Par. 5. All employees at KSC performing installation support services, herein called ISS, constitute an appro- priate bargaining unit. Par. 6. From March 9, 1964, to March 31, 1971, Trans World Airlines, herein called TWA, performed the ISS operation pursuant to contract with NASA. Par. 7. Since February 1964, and continuing to date, the IAM has been the exclusive bargaining representative of the employees in the appropriate unit, above. Par. 8(a). Since February 1964, TWA has recognized and had successive contracts with the IAM covering the employees in the above appropriate unit,—the last such contract containing an effective term from January 28, 1970, through December 31, 1971. Par. 8(b). By letter dated March 19, 1971, Respond- ent formally recognized the IAM as the exclusive rep- resentative of the employees in the appropriate unit, above. (This allegation is more properly to be noted in chronological context, infra.) Par. 9(a). On June 30, 1970, NASA issued a request for proposal (RFP) from contractors to perform the ISS operation at KSC commencing April 1, 1971. Par. 9(b). On August 19, 1970, Respondent submitted its contract proposal to NASA which stated that 85.6 ee ee ene Teens 43a percent would come from the complement of TWA em- ployees then performing the ISS work at KSC. Par. 9(c). On November 23, 1970, Respondent was designated as the bidder with whom NASA would nego- tiate a contract for such services; and on March 11, 1971, such a final contract was negotiated and executed between Respondent and NASA to commence performance on April 1, 1971. Par. 10(a). In meetings on November 24 and Decem- ber 4, 1970, Respondent notified the IAM that the em- ployees it would hire to perform the ISS work, including the TWA incumbents, would receive wages and benefits under the terms of Respondent’s existing national con- tract with the IAM, rather than the wages and benefits provided in the current agreement between the IAM and TWA. The IAM requested Respondent to bargain about “this imposed lesser wage scale” (as specified in Respond- ent’s contract proposal to NASA). Par. 10(b). On December 5, 1970, the IAM notified Respondent that it objected to Respondent’s refusal to continue the employment terms set forth in the TWA- IAM agreement. Par. 11. From December 5, 1970, to February 19, 1971, a majority of the TWA incumbents, in protest of Respondent’s “announced intent to institute unilateral changes in wages, hours, and working conditions” be- ginning April 1, 1973, concertedly withheld submission of their individual applications for employment with Re- spondent. Par. 12. Such concerted withholding of applications “constituted a strike” against Respondent which was caused and/or prolonged by the unfair labor practices of Respondent in unlawfully announcing and scheduling unilateral changes in employment conditions affecting the ISS employees. 44a Par. 13. On January 15, 1971, the IAM again pro- tested to Respondent the unilateral action of establishing different wages and conditions and requested that Re- spondent “hire all TWA incumbents under the terms” of the TWA-IAM contract. Par. 14. On February 19, 1971, the IAM notified Respondent that “all” TWA incumbents uncondition- ally requested continuation of their employment with Respondent beginning April 1, 1971, and would now sub- mit applications for employment to Respondent. Par. 15. Despite the foregoing “unconditional offer on behalf of all” TWA incumbents, Respondent since February 19, 1971, has failed and refused to offer em- ployment “to a majority of the TWA installation sup- port employees, the exact identity and number of which employees are not now known.” Par. 16. Respondent’s unlawful announcement and unilateral establishment of lower wages and different conditions of employment for the employees “it would employ at KSC, caused many TWA installation support employees (the exact identity and number of whom are not now known) to fail to submit a timely application for employment with Respondent, thereby causing less than a majority of the TWA employees to be employed by Respondent and causing the majority to suffer loss of their employment.” Par. 17. Since November 23, 1970, Respondent has been “the designated successor employer to TWA with regard to” the ISS operation at KSC, and since April 1, 1971, has performed the same services for the same cus- tomer, NASA, as did the predecessor contractor, TWA. Par. 18. Consistent with its prior unilateral announce- ment, since April 1, 1971, Respondent has “unilaterally imposed the terms, wages, hours and working conditions” of its national agreement with the IAM upon the em- ployees in the appropriate unit, “and has thereby caused 45a employees to forfeit employment and/or to suffer loss of wages” by reason of the lower wage rate schedule of such national agreement. In his brief, General Counsel requests the remedies that Boeing be ordered (a) to reinstate with backpay the TWA employees it did not hire (about 600), and (b) to recognize the bargain with the IAM “for the em- ployees performing the work.” Respondent denied essentially all the foregoing allega- tions, except those in Paragraphs 6, 8(a), 9(a), and (c). Respondent’s formal answer to the complaint contains 55 separate defenses, including a lengthy statement of facts; and at the hearing it filed 6 additional separate defenses. As already noted, the evidence taken at the hearing consists mainly of voluminous stipulated material, as supplemented by further testimony and exhibits.* In this context, questions were not raised, nor rulings made, as to the propriety of Respondent’s 61 separate defenses. Many of these defenses merely present extended argument and are not truly affirmative defenses properly asserted in a pleading; and many, in my opinion, are frivolous, and unduly burden the record.’ Therefore, the general ruling is made that only those separate defenses which were specifically brought out at the hearing or in Respond- ent’s briefs are appropriately presented for considera- tion. ‘ 4 Respondent’s motions to strike, and various objections to, testi- mony cited in the briefs of che General Counsel and IAM are denied. Authenticity of the evidence has been stipulated; the materiality of its use, particularly in briefs, involve questions of weight to be assigned. Exh. 14(H) to Jt. Exh. 1 was stipulated subject to the parties’ agreement as to its completeness. Jt. Exh. 3 was reserved for such agreement after the hearing. Having been advised post- hearing that agreement was not re [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385005_1882%3A1. Public record. Not legal advice.