# Record and brief — Fall River Dyeing & Finishing Corp. v. NLRB > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385012_1182%3A0 ## Record - **Collection:** Supreme Court brief - **Document type:** Record and brief - **Published:** January 1, 1987 - **Citation:** 482 U.S. 27 ## Text 'de 35-120P°C FX Title: Fall Piver dyeing & Finishing Corder Petitioner tatus: GRANTED Ve ; National Labor Relations Soard ‘ocketed: Court: Unites States Court of Aoceals anuary 16% 1986 for the First Circuit Counsel for petitioner: DrosinzIra Counsel for respondent: Solicitor General ntry Date Note Proceedings anc Orders 1 Jan 16 1955 G Petition for writ of certiorari filea. a 3 Fed 24 1986 Order extending time to file resconse to petition until March 234 1966. 4 Mar 24 1986 Oraer further extendince time to file response to cetition until March 21, 1S9F6, EDITOR'S NOTE 5 Mar 71 1986 Brief of resooncenrt NLR3 in onpdcsition filed. é Aor 2 198¢e DISTRISUTED. Aoril Isr 1934 THE FOLLOWING PAGES WERE POOR HARD COPY 3 Aor 21 1956 RELISTPIIUTED. Acril 28, 1934 AT THE TIME OF FILMING. IF AND WHEN A S Aor 24 198$ XK Reoly orief of petitioners Fall Piver Dyeina, etc. filec. BETTER COPY CAN BE OBTAINED, A NEW FICHE 11 May 5 1986 REDISTPSIUTED. “ay 154 19286 WILL BE ISSUED, 13 May 16 1986 PEDISTPIGUTED. May 224 1924 14 May 27 19%. Petition t24NTID,. REET E ERROR e 146 Jun 23 1926 Order extensing time to file brie*® of petitioner on the rerits until August 114 19f0. v7 Auc é& 1986 Srief amicus curi3e of Lesal Foundation of Arerica files. 1¢ Aus 11 19606 Joint apoensix files. 19 4u9 11 1986 Srief of petitioner Fall River Dyeincs etc. filec. 22 Auc 11 1398s Brief amicus curiae of tharcer of Commerce of the UeS. files. 22 Auc 78 1986 Orjer extending time to file crie* of resnorcent on the merits until Setonser 114 1926. 27? Oct 11 1986 Brief of resoonsent NL®] filed. 24 Oct 11 13986 Srief amicus curiae of AFL=CIC filed. 25 Oct 22 1986 CIRCULATED. 24 Dec 19 1984 S2T FO® ARIUMENT. Mondays “arch 2 1927. (1st case). 27 Fed 21 1937 X Reoly brief of petitioner Fall River Dyeing, etc. filer. 22 Mar 2 1987 ARGUED. PETITION FOR WRIT OF CERTIORARI No. f JAN 16 ! ( we a; IN THE Supreme Court of the United States Octrosper Term, 1985 FALL RIVER DYEING & FINISHING CORP., Petitioner, — against — NATIONAL LABOR RELATIONS BOARD, Respondent. PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FIRST CIRCUIT InA DrocIN LEAF STERNKLAR & DROGIN Attorneys for Petitioner 440 Park Avenue South New York, New York 10016 (212) 685-8400 QUESTIONS PRESENTED 1. Whether the National Labor Relations Board and the Court of Appeals have failed to follow Federal labor policy contained in successorship principles previously enunciated by this Court and have promoted concepts contrary to the Labor Management Relations Act, as Amended, under the totality of the circumstances herein, by finding that there was a substantial continuity in the employing enterprise, between a collapsed and liquidated business, Sterlingwale Corp., and a new enterprise, petitioner, Fall River Dyeing & Finishing Corp., such as to require Fall River to recognize and bargain with a Union which represented the production and maintenance employees of the former employer, Sterlingwale. 2. Whether the National Labor Relations Board and the Court of Appeals have failed to follow the successorship principles previously enunciated by this Court and have promoted concepts contrary to the Labor Management Relations Act, as Amended, and Federal labor policy, by relying on and applying simultaneously two Board-promulgated legal concepts, to find that Fall River Dyeing & Finishing Corp. engaged in unfair labor practices in violation of Sections 8(a)(1) and (5) of the Act by refusing to recognize and bargain with Textile Workers of America, AFL-CIO, Local 292, without a further demand hav- ing been made by that Union, after Fall River subsequently employed a substantial and representative complement of employees, a majority of whom had been employed by a former employer, Sterlingwale Corp. Those concepts are: (a) The substantial and representative complement standard under which the time of determination of whether a new employer is a successor is postponed until its work force reaches a substantial complement, representative of the number and type of employees and job classifications, that will ultimately constitute the appropriate bargaining unit, without considering whether under the circumstances of this case, the time when the new employer reached a full complement of employees and classifica- tions should have been determinative. (b) The continuing demand doctrine, whereby in this case, the Union's demand for recognition and bargaining, once made but lawfully rejected by Fall River, was nevertheless considered to be ongoing in nature, for approximately three months thereafter, until Fall River first employed a substantial and representative complement of employees, even though, to have accepted the Union's premature demand theretofore, would have constituted the unlawfuly recognition of a minority Union in violation of the Labor Management Relations Act, as Amended. 3. Whether the National Labor Relations Board and the Court of Appeals, in requiring Fall River to bargain with the Union, by applying both the continuing demand concept to a premature bargaining demand and the representative complement standard, to cause a bargaining obligation to become effective at that time, have deprived the employees of Fall River of their rights under the Labor Management Relations Act, as Amended, to bargain collectively through representatives of their own choosing and to refrain from any and alli such activities, and have improperly compelled Fall River to bargain with the Union where a good faith doubt existed as to the Union’s majority status. PARTIES TO THE PROCEEDING BELOW The only other parties to the proceedings below not listed in the caption are: 1. United Textile Workers of America, AFL-CIO, Local 292. iv TABLE OF CONTENTS QUESTIONS PRESENTED .............0005.:. PARTIES TO THE PROCEEDING BELOW .... py ge) gs eee I ha dis occ tob asa keene eee « eg Ons we vak's Neus snobs en kes STATUTORY PROVISIONS INVOLVED ....... STATEMENT OF THE CASE ................. REASONS FOR GRANTING THE WRIT....... 1. THE NLRB HAS IGNORED OR REFUSED TO FOLLOW IN THIS CASE THE SUCCESSORSHIP PRINCIPLES PREVIOUSLY ENUNCIATED BY THIS 2. THE NLRB’S SUBSTANTIAL AND REPRESENTATIVE COMPLEMENT STANDARD AS APPLIED IN THIS CASE CONTRAVENES IMPORTANT REPRESENTATION RIGHTS GUARANTEED EMPLOYEES UNDER THE LABOR MANAGEMENT RELATIONS ACT, AS AMENDED........ 3. THE NLRB’S CONTINUING DEMAND DOCTRINE AS APPLIED IN THIS CASE CONTRAVENES THE LABOR MANAGEMENT RELATIONS ACT, AS AMENDED, BY IMPROPERLY COMPELLING THE EMPLOYER TO BARGAIN WITH A UNION WHERE A GOOD FAITH DOUBT EXISTED AS TO THE UNION’S MAJORITY STATUS....... ao wo wv EE 5 oes cave owed vanes secihebenes APPENDIX Decree of United States Court of Appeals, First Circuit, entered October 18, 1985 ............ Decision of United States Court of Appeals, First Circuit, dated October 18, 1985......... Decision of National Labor Relations Board, and Order, dated October 19, 1984 .......... Decision and recommended Order of Adminitrative Law Judge Burton S. Kolko, Gee DUR TT, TRG oa oc ccc cree se geacnes Rt er ator Rata Sree upon e me al ene Der Page A-44 vi TABLE OF AUTHORITIES Page Aircraft Magnesium, A Division of Grico Corp., 265 NLRB 1344 (1982), enf. 730 F.2d 767 (CA PD cis eet Geet eeu eaa uate a ea abt 10, 14, 18 Atlantic Technical Services Corp., 202 NLRB 169 (1973), enf. 498 F.2d 680 (C.A.D.C., 1974) ... 13 Cagle’s Inc., 218 NLRB 603 (1975) ............. 13 Co-op Trucking Co., 209 NLRB 829 (1974)...... 13 Galis Equipment Co., 194 NLRB 799 (1972)..... 13 Georgetown Stainless Manufacturing Co., 198 i Sit chee eee ene eee aakee.s 13 Hedstrom Company v. NLRB, 558 F.2d 1137 (CA 3, 1977), cert denied, 450 U.S. 996 (1981)..... 20, 22 Howard Johnson Company v. Detroit Local Joint Exeuctive Board Hotel and Restaurant Employees Union, 417 U.S. 249 (1974)........ 8 International Association of Machinists and Aerospace Workers, AFL-CIO (Boeing Company) v. NLRB, 595 F.2d 664 (C.A.D.C., 1978), cert. denied, 439 U.S. 1070 (1979) ..... 9 John Wiley & Sons, Inc. v. Livingston, 376 U.S. Rt i a Ld tet a ieenhs haere 6 $05) 16 Lincoln Private Police, 189 NLRB 717 (1971) .... 13 NLRB v. Alamo White Truck Services, 273 F.2d eo, cer ddv ahi bese sees 12 NLRB v. Band-Age, Inc., 534 F.2d 1 (CA 1), cert. denied, 429 U.S. 921 (1976) ............ 8, 9, 17 vii NLRB v. Burns International Security Services, Inc., 406 U.S. 272 (1972) .............. NLRB v. Hudson River Aggregates, Inc., 246 NLRB 192 (1978), enf. 639 F.2d 865 (CA2, "TRAST aRiieeien ah AOS Canaan NLRB wv. Middleboro Fire Apparatus, Inc., 590 fof SE re ; Premium Foods, Inc., 260 NLRB 708 (1983), - 709 F.2d 623 (CA 9, ARR ee Radiant Fashions, Inc., 202 NLRB 938 (1973).... STATUTES 29 U.S.C. §158(a)(1) .... 0... c eee cece ce eeee 20 U.S.C. $15B(aMM) ............. 02. e cn eees 99 U.S.C. §158(a)(5) ... 0... eee cece cece eee ee RR re ey ee rey eee ee Page 8, 15, 16, 17, 19 10 8, 10 No. IN THE Supreme Court of the United States Octoser TerRM, 1986 FALL RIVER DYEING & FINISHING CORP., Petitioner, — against — NATIONAL LABOR RELATIONS BOARD, Respondent. PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FIRST CIRCUIT Petitioner, Fall River Dyeing & Finishing Corp., respectful- ly prays that a writ of certiorari issue to review the judgment and opinion of the United States Court of Appeals for the First Circuit entered in this proceeding on October 18, 1985, enfor- cing an Order of the National Labor Relations Board (hereinafter “NLRB”) requiring Fall River Dyeing & Finishing Corp. (hereinafter “Employer” or “Fall River”) to recognize and bargain with United Textile Workers of America, AFL-CIO, Local 292, as the exclusive representative of all the production and maintenance employees of the Employer’s piant in Fall River, Massachusetts. OPINION BELOW The opinion of the Court of Appeals enforcing an order of the NLRB, made on October 19, 1984, is reported at ___ F.2d ____ (Ist Cir. 1985), 120 LRRM 2825, and____ CCH ____.. The Decision and Order of the three-member panel of the National Labor Relations Board, dated October 19, 1984, adop- ting the Decision and Order of Administrative Law Judge Bur- ton S. Kolko, issued January 27, 1984, is reported at 272 NLRB No. 127, 117 LRRM 1436, 84-5 CCH 4 16780. The Court of Appeals and administrative law decisions ap- pear in the Appendix to this Petition. JURISDICTION The judgment of the Court of Appeals, granting enforcement of the NLRB Order was entered on October 18, i985. This Court's jurisdiction is invoked under 28 U.S.C. Section 1254 (1). STATUTORY PROVISIONS INVOLVED This case concerns the provisions of the Labor Management Relations Act, as Amended, 29 U.S.C. Sections 151, et seq. For the Court’s convenience, the following sections are set forth in the Appendix to this Petition: Section 8(a) (1), 29 U.S.C. Section 158(a) (1) - App. p. A-44 Section 8(a) (2), 29 U.S.C. Section 158(a) (2) - App. p. A-44 Section 8(a) (5), 29 U.S.C. Section 158(a) (5) - App. p. A-44 Section 9(a), 29 U.S.C. Section 159(a) - App. p. A-44 STATEMENT OF THE CASE On February 12, 1982, Sterlingwale Corp. (hereinafter “Sterl- ingwale”), a corporation owned by the Ansin family for 30 years, began an immediate voluntary liquidation, shutting down its textile dyeing and finishing operation in Fal! River, Massachusetts, and indefinitely laying off all of its production and maintenance employees. “he closing was the result of un- questionable dire economic circumstances, involving the loss of millions of dollars. The Sterlingwale employees had been represented since 1968 by United Texti'e Workers Union of America, AFL-CIO, Local! 292 (hereinafter “Union”), under a series of collective bargaining agreements, the last of which was due to, and did, expire April 1, 1982. The collective bargain- ing agreements contained standard Union security provisions permitted by Section 8(a) (3) of the Labor Management Rela- tions Act, as Amended (the “Act”). During the liquidation, Sterlingwale retained 2 skeleton crew to maintain the equipment and ship out pending orders. However, in the summer of 1982, all business activity ceased, an outside liquidator was brought in and an assignment for the benefit of creditors was made, and a foreclosure was held at public auction on the premises occupied by Sterlingwale. The petitioner Employer acquired most of Sterlingwale’s machinery, furniture and fixtures and part of Sterlingwale’s remainaing in- ventory and materials, all at public auction. Sterlingwale’s real property was acquired in late August, 1982 by Marcamy Sales Corporation, the parent corporation of Fall River Dyeing & Finishing Corp., which leased from its parent part of the real property formerly occupied by Sterlingwale. The Employer did not acquire any other assets of Sterl- ingwale, such as its trade name, good will, or customer lists, nor did it assume any of Sterlingwale’s liabilities. The Employer did not obtain any personnel records or employee lists of Ster!- ingwale’s former employees. In September, 1982, the Employer publicly advertised for employees in local newspapers. By September 20, 1982, it had hired six or eight employees and commenced preliminary start- up operations in one of three former Sterlingwale buildings. The preliminary operations involved cleaning, relocating and repair- ing machines for about four to six weeks, and thereafter, work- ing on experimental production to ensure that everything was in order. The Employer planned to engage solely in commission work which consists of the dyeing and finishing of fabric belonging to others for a commission. In contrast, Sterlingwale had been primarily a “converter” whose business consisted of approximate- ly sixty to seventy percent processing of its own fabric and thir- ty to forty percent commission finishing. At the time of its demise, Sterlingwale employed in excess of 150 production and maintenance employees who worked three shifts. Fall River’s production plan was to commence operation with a single shift of fifty-five to sixty employees and then to expand fully to a two 10-hour shift operation employing 106 to 109 employees by April, 1983. Such a two-shift operation is almost essential to the production process because the fabrics emerge from the process wet, and the entire operation, including dry- ing, cannot be completed in eight hours. On October 19, 1982, the Union sent the Employer a letter, stating that “pursuant to the agreement between Sterlingwale” and the Union, the Union demanded recognition. The letter also stated that on October 28, 1982, a Union representative would call upon the Employer “for the purpose of negotiating a col- lective bargaining agreement.” The agreement referred to by the Union had expired by its own terms April 1, 1982, and Sterlingwale had ceased normal production operations on February 12, 1982: ' This was the only request or bargaining demand made by the Union up un- til the decision of the National Labor Relations Board Administrative Law Judge on January 27, 1984. At the time of the Union’s request and bargaining demand, the Employer employed 21 employees, 18 of whom were former Sterlingwale employees. On October 21, 1982, the Employer's counsel wrote to the Union, advising that the Employer did “not intend to comply with [the Union’s] request; and further . . . that there was no legal basis for same.” On November 1, 1982, the Union filed an unfair labor prac- tice charge against the Employer claiming that the Employer had violated Sections 8(a) (1) and (5) of the Act. By mid-November, the Employer had hired employees in virtually all job classifica- tions. They were engaged in start-up operations, cleaning and repairing machines for the first four to six weeks, and for the next four to five weeks, they engaged in experimental produc- tion on old Sterlingwale inventory. On December 21, 1982, the Regional Director of the National Labor Relations Board, Region 1, issued a complaint charging the Employer with violating Sections 8(a) (1) and (5) of the Act because “on or about October 21, 1982, and at all times thereafter, respondent did refuse and continue to refuse to meet and bargain collectively, with the Union as the exclusive representative of all a in the unit.” A hearing was scheduled for May 2, The Employer answered the complaint on January 4, 1983, in substance denying that it was a successor employer to Sterl- ingwale, or that it had violated Sections 8(a) (1) and (5) of the Act. In mid-January, 1983, the first shift was in full operation and a second shift was begun, with a total complement of fifty-five employees, approximately thirty-six of whom were former Sterl- ingwale employees. Some eight to twelve former supervisors of Sterlingwale were employed by the Employer as supervisors, and Herbert Chace, the Vice President of Sterlingwale, basically in- volved with its sales until its demise in February, 1982, was rehired as the Employer's Vice President running the plant and labor relations. Alfred Canuel, the Plant Manager of Sterlingwale, was not rehired. Arthur Friedman, the President of the Employer, takes no part in the production or labor relations aspects of the Employer and is involved with the financial end of the business. The Employer continued to hire and expand until it reached the goal of a full complement of employees in mid-April, 1983, consisting of 106 to 109 employees working two 10-hour shifts. By March 24, 1983, former Sterlingwale employees were a minori- ty of the employees in the production and maintenance unit. By the time of the hearing, over one-half of the dollar volume of the Employer's business came from the same customers with which Sterlingwale had at some time done business. The hearing began on April 2, 1983. In his Decision, the Ad- ministrative Law Judge held that the Employer had violated Sec- tions 8(a) (1) and (5) by refusing to recognize and bargain with the Union on January 15, 1983. He held that the Employer was a successor to Sterlingwale, and that the Union's October 19, 1982 bargaining demand was premature when rejected by the Employer on October 21, 1982 since the Employer did not have a representative complement of employees, but that the demand was a continuing one, that the Employer was bound to comply with at such time as its operations reached a “representative com- plement, not a full complement.” He then ruled that the Employer’s duty to bargain with the Union attached in mid- January, 1983, and he ordered the Employer to bargain with the Union, “apon request of the Union.” The National Labor Relations Board by a vote of two to one adopted the Decision in toto. The dissenting member, Hunter, pointed out that at the time the Union made the demand on Oc- tober 19, and the Employer refused it on October 21], the Employer did not employ a representative complement of unit employees, and, since the Union did not renew its bargaining demand at a time when the Employer had reached a represen- tative complement — mid-January, 1983, he could find no bargaining obligation. Member Hunter, in essence, rejected the “continuing demand” concept of the majority, under the assump- tions of the case. The National Labor Relations Board petitioned the Court of Appeals, First Circuit, for enforcement under Section 10(e) of the Act, as Amended, 29 U.S.C. 160(e), which was granted by a divided Court with one judge dissenting. The issues involved were of first impression in the First Circuit, and are of nation- wide importance to both labor and management, and it is believ- ed have not been passed upon by the Supreme Court. REASONS FOR GRANTING THE WRIT THE NLRB HAS IGNORED OR REFUSED TO FOLLOW IN THIS CASE THE SUCCESSORSHIP PRINCIPLES PREVIOUSLY ENUNCIATED BY THIS COU &T This case imvelves important questions involving rights of both employees and employers in the area of successorship where there presently exists considerable uncertainty. In large measure this uncertainty has been caused by the NLRB which has disregard- ed the decisions and precepts of the Supreme Court relating to successorship and is promoting concepts that are clearly contrary to the Labor Management Relations Act. It is respectfully urged that the Supreme Court grant certiorari and review the cir- cumstances of this case as well as the NLRB’s substantial and representative complement and continuing demand concepts, so that the Court can provide the guidance necessary to the NLRB and resolve questions that are of great importance to large numbers of workers and prospective employers. (1) The traditional test for determining successorship is whether there is substantial continuity between the employing enterprises. NLRB v. Burns International Security Services, Inc., 406 U.S. 272 (1972). In making this determination, it is necessary to analyze whether there has been a change in the essential nature of the enterprise. NLRB v. Band-Age, Inc., 534 F.2d 1 (CA 1), cert. denied, 429 U.S. 921 (1976); NLRB v. Middleboro Fire Apparatus, 590 F.2d 4 (CA 1, 1978). This question is highly fact specific. As this Court noted in Howard Johnson Company v. Detroit Local Joint Executive Board Hotel and Restaurant Employees Union, 417 U.S. 249, 256 (1974), “...in light of the difficulty of the suc- cessorship question ... emphasis on the facts of each case as it arises is especially appropriate.” The facts in this case are not disputed, but the NLRB has ig- nored the standards set forth by the Court in NLRB v. Burns, supra, and other leading cases and has arranged the facts and weighted them in such a way as to ignore, or give little or no weight to certain facts while at the same time stressing other facts which are not dispositive of the issue whether there has been substantial continuity between employing enterprises. It is submitted that the circumstances herein clearly demonstrate an essential change in the employing enterprise, which precludes Fall River from being considered a successor, and that substantial changes between Sterlingwale, the collaps- ed employer, and Fall River’s new operation exist and have been overlooked by the NLRB. In effect, the NLRB has not evaluated Fall River’s new operation taking into account the totality of the circumstances. In light of the importance of the need to know all of the rele- vant facts to reach a successorship determination, the Court must examine the nature of the new and old employing enterprises in order to interpret the principles of successorship which it has previously enunciated, and not automatically defer to the NLRB’s expertise in labor matters. See International Association of Machinists and Aerospace Workers, AFL-CIO (Boeing Company) v. NLRB, 595 F.2d 664, 673 n.41 (C.A.D.C., 1978), cert. denied, 439 U.S. 1070 (1979) where the Court stated, in successorship cases, “deference to the Board may ordinarily be less appropriate.” See also NLRB v. Band-Age, Inc., supra, at p. 1. The traditional criteria considered by the Courts for the test for determining whether there is a substantial continuity in the employiny enterprise include: 1. Business operations; 2. Whether the same physical plant is used; 3. Whether the same or substantially the same work force is used; 4. Whether the same jobs exist under similar working conditions; 5. Whether the same supervisors are employed; 10 6. Whether the same machinery, equipment and methods of production are used; and 7. Whether the same product is manufactured or the same ser- vices offered. See Aircraft Magnesium, a Division of Grico Corp., 265 NLRB 1344 (1982), enf. 730 F.2d 767 (CA 9, 1984)(table); Premium Foods, Inc., 260 NLRB 708, enf. 709 F.2d 623 (CA 9, 1983); NLRB wv. Middleboro Fire Apparatus, Inc., supra. Prior Court cases anu applicable NLRB law have established that not one of the foregoing traditional factors by itself is deter- minative of the question whether there has been a substantial continuity in the employing enterprise. ng v. pecs gh ire ratus, Inc., ; NLRB v. Hudson River Aggregates, Inc., MLD 192 (1978), enf. 639 F.2d 865 (CA 2, 1981). The NLRB must weigh the singular facts relating to the enterprise and deter- mine if there is a continuity of employing enterprise. It is undisputed that Fall River ceased operation and went out of business for economic reasons. It is also undisputed that Fall River is a separate legal entity than Sterlingwale with different ownership, financing, etc. The NLRB does not claim, nor is there any evidence, that Fall River’s business operation is an alter ego of Sterlingwale, or has any ownership links to the failed company. Significantly, Fall River acquired neither the trade name, good will nor other assets from Sterlingwale. It oo 3 ed a of Ster!- ingwale’s liabilities. There was no transfer of employee person- sr between Sterlingwale and Fall River, no direct transfer of any employees or personnel, and there was no expectation by Sterlingwale’s employees of employment by Fall River. It is sub- mitted that the employment of individuals who formerly work- ed for Sterlingwale resulted from factors unique to a small town with a shrinking industrial base. Many of the employees who had been permanently laid off by Sterlingwale in February, 1982, eagerly applied for positions at a new mill opening in their city. Production and maintenance employees were all hired on the open market from advertisements. Their employment started after 11 a minimum of seven months had passed since their termination by Sterlingwale; in some cases, 11 months had passed since in- definite layoff by Sterlingwale. In the instant case, Fall River began its operation by leasing only one of Sterlingwale’s three buildings from a company which had purchased the real property from the defunct firm at foreclosure sale. Although Fall River uses machinery and equip- ment which at one time may have belonged to Sterlingwale, it too was purchased on the open market at a foreclosure sale. Thus, the fact that the physical plant and equipment once were a part of Sterlingwale’s operation should be totally irrelevant to the suc- cessorship determination. Furthermore, with regard to the issue of workforce, a textile business, whether operating on a converter or a commission basis, will have employees working in similar job classifications. This is not a controlling factor considering the nature of any textile operation. However, there remains a sub- santial dissimilarity in working conditions and operations not fac- tually disputed, but not referred to or commented upon by the NLRB. This disparity in working conditions has to do with the shifts. Rather than operating on the basis of three shifts a day, Fall River intended to run its plant when at full complement, with only two 10-hour shifts. The new firm also employed no sales force. It is submitted that the nature of Fall River's business is fun- damentally different from that of Sterlingwale’s. While the former operation depended largely on converting, Fall River's operation relies solely on commission work. A commission business does not require the capital necessary to purchase fabrics or the need for a sales force or a retail outlet to sell them. Fall River operates in a significantly different mode than Sterlingwale. It has a smaller manufacturing plant, substantially less employees (workers and supervisors), fewer work shifts and longer work- ing hours. Furthermore, there has been no transfer of customer lists or customers between Sterlingwale and Fall River which might justify the NLRB’s conclusion there was a substantial continuity 12 of business operations. It is submitted that many former Sterl- ingwale customers who also became Fall River customers were acquired by competing for them in the open market. Although the NLRB considered that in dollar volume over one-half of Fall River’s Customers had been customers of Sterlingwale, the NLRB ignored the fact that one of the major customers is Fall River's parent company, Marcamy Sales. If its purchases are considered, the portion of continuing customers drops to one-third. The NLRB, in making its analysis of the factors needed to find successorship, has entirely neglected the differences in concept between the two operations. The NLRB has taken too narrow a view of the business operation as a factor in the overriding ques- tion of whether there is substantial continuity in the employing enterprise. See NLRB v. Alamo White Truck Services, 273 F.2d 238 (CA 5, 1959). The services offered by Sterlingwale were essen- tially in the conversion process, although admittedly some com- mission work was done as it became short of cash to purchase textiles to convert for its own account. In contrast, finishing work is the exclusive business of Fall River. Fall River’s sole intention is to earn commissions as a finisher where Sterlingwale failed in a business involving primarily converting. There was no basis for the Administration Law Judge and NLRB to ignore the basic differences in the textile industry with regard to finishing work and make a finding based on dollar volume alone that ~...a substantial part of Respondent’s business is linked with Sterl- ingwale.” (App p.37) The alleged links between the two enterprises are too tenuous to support the NLRB’s finding of successorship. As demonstrated above, there is a substantial difference in the scale and nature of operations which precludes the finding of successorship in the circumstances of this case. (2) While there is no single factor which will prevent a finding of successorship, the following factors when combined have defeated such a finding: 13 1. A long hiatus in the resumption of operations; 2. A difference of location at the resumed operation; 3. A changeover of the supervisory hierarchy; 4. The absence of a carryover of customers or markets sup- plied; and 5. A difference in the scale of the operations and the products produced and in the method of production, etc. See Radiant Fashions, Inc., 202 NLRB 938 (1973); Galis Equip- ment Co., 194 NLRB 799 (1972); Georgetown Stainless Manufaturing Corp., 198 NLRB 234 (1972); Cagie’s Inc., 218 NLRB 603 (1975); Atlantic Technical Services Corp., 202 NLRB 169 (1973), enf. 498 F.2d 680 (C.A.D.C., 1974); Lincoln Private Police, 189 NLRB 717 (1971); Co-op Trucking Co., 209 NLRB 829 (1974). The NLRB has found the continuity of the employing enter- prise destroyed where the continuity, other than that of the work force, consisted primarily of the acquisition of a portion of the customers of a moribund company solicited in the open market. Co-op Trucking, supra; Lincoln Private Police, Inc., supra. In the case at bar, we find a major changeover in the super- visory hierarchy. The number of supervisors has been substan- tially reduced from 18 to 12, including employment of 4 new supervisors who had not been previously employed by Sterl- ingwale. The former plant manager has been terminated and not rehired by Fall River. Likewise, as noted above, there is a substantial change in the firm’s market, suppl.. rs and customers. The market is no longer the conversion and sale of goods owned by the processor. The market now consists of processing the goods of others as a commission dye house and not direct sale of its own product line. With regard to customers, only about one-third of Sterlingwale's customers are serviced by the Employer exclusive of Fall River's parent corporation. Furthermore, as a result of 14 a hiatus in any production of at least 7 months, there was not any carryover or transference of customers that might justify link- ing the two employers. Finally, Sterlingwale’s employees had no reasonable basis for anticipating that their employment might resume at the same location after their indefinite layoff began in February, 1982. The substantial hiatus in any operations from mid-February, 1982 until mid-September, 1982, as well as the foreclosure sale on the physical plant and equipment, negates any reasonable expecta- tion by former Sterlingwale employees that they would resume their old jobs. Their union contract expired in April, 1982, and their Union made no effort to renew it. It is submitted that the NLRB has erred in ignoring the significance of the lengthy hiatus on the employees’ expectation of rehire. In Aircraft Magnesium, a Division of Grico Corpora- tion, supra, a case involving a hiatus between the prior operator and a new employer, the NLRB held, at p. 1346: “Further, the significance of a hiatus to successorship status is its effect on the employees’ expectation of rehire.” Unlike the present case, in Air- craft Magnesium the employer desired in reality to continue in the predecessor’s business. In that case, after a bankruptcy and a layoff of bargaining unit employees, there was a hiatus of opera- tions of less than one month during which Aircraft Magnesium purchased not only all the physical assets of its predecessor, but its books and records, including customer lists, invoices and operating permits. There was a stipulation that a majority of the customers and suppliers remained the same. The new company expressed interest in rehiring all of the predecessor's employees the day after the purchase was complete and subsequently car- ried out that intention by hiring them. In the instant case, such an intent is totally absent. The record here shows no intent to hire former employees; the Employer ran a newspaper ad in the community paper in order to begin staff- ing the new enterprise. 15 The facts underscore that the employees who responded to newspaper advertisements and applied for a job with Fall River were in actuality applying for a new job, under new manage- ment at a different mill serving different customers and a changed market. In light of the substantial changes in the employing enter- prise discussed above, this Court should determine that the NLRB’s cursory review incorrectly applied the law to the facts. It is respectfully submitted that this Court should grant certiorari and review whether or not the successorship principles enunciated by this Court in Burns, supra, and other cases have been follow- ed by the NLRB, or whether they have been ignored or misapplied. 16 THE NLRB’S SUBSTANTIAL AND REPRESEN. TATIVE COMPLEMENT STANDARD AS APPLIED IN THIS CASE CONTRAVENES IMPORTANT REPRESENTATION RIGHTS GUARANTEED EMPLOYEES UNDER THE LABOR MANAGEMENT RELATIONS ACT, AS AMENDED In finding Fall River to be a successor employer in this case and thereby bound to recognize and bargain with a Union which represented employees of a former employer, without allowing those employees the right to express their choice of bargaining representative, the Board and the Court of Appeals have stret- ched the successorship concept to an unreasonable extreme. This Court, in John Wiley & Sons, Inc. v. Livingston, 376 U.S. 543 (1964), gave as a basis for a finding of successorship obligations the need to grant some protection to employees from a sudden transformation of their employer’s business, which leaves intact significant elements of that business, but which results in the substitutign-af a new legal entity, not bound by the collective bargaining agreement under principles of contract law. Another consideration frequently advanced by this Court for the applica- tion of the successorship doctrine has been the need for continuity in industrial labor relations and the concomitant avoidance of industrial strife, which presumably follows from such a continuity. Thus, the successorship doctrine presents a conflict between the preservation of industrial peace and the right of the majority of employees to determine their bargaining agent, which right the Act was cesigned to preserve. In the case at bar, where the rela- tionship between the first employer and the second employer is as attenuated as it is here and the employees of the first employer had no reasonable expectation to ever again become employed by Sterlingwale, which had a bargaining relationship with the Union at the time of their termination, the right of free choice of bargaining representative guaranteed those employees by the Act is undercut by the res:It reached here by the NLRB and Court of Appeals. In NLRB v. Burns International Security Services, Inc., supra, the Court held that if after a change in ownership, the essential 17 nature of the entity remains unchanged, and a majority of the new firm’s employees or management were employed by the predecessor company, the new employer is considered the old employer's “successor”. As such, the new employer must recognize an incumbent union which demands recognition and dea! with it as the bargaining representative of the employees. See also, NLRB v. Band-Age, Inc., supra. In a successorship situation, the bargaining obligation can nor- mally be determined at the time of transfer of ownership or when actual operations began. In other instances, such as this case, where the Employer is slowly hiring its work force as produc- tion begins, or where an employer is attempting to start a new business operation, a delay in making the determination may be appropriate. Thus, this Court stated in NLRB v. Burns Interna- tional Security Services, Inc., supra, at p. 295: “In other situations, however, it may not be clear un- til the successor employer has hired his full comple- ment of employees that he has a duty to bargain with a Union, since it will not be evident until then that the bargaining representative represents a majority of the employees as required by Section 9(a) of the Act...” It is respectfully submitted that this “full complement” prin- ciple for determining the critical measuring date has been treated as dicta by the majority of the Court of appeals (App. p. A-11), which stated that fixing the appropriate date “involves balanc- ing the objective of insuring maximum employee participation in the selection of a bargaining agent against the goal of per- mitting employees to be represented as quickly as possible” (App. p. A-10), and then, without examining the rationality of its ap- plication to the facts of this case, and engaging in no balancing at all, or analysis of any attempt by the NLRB to engage in balan- cing, simply stated that “These interests are effectively reconcil- ed in the “substantia! and representative complement” standard applied by the Board in this case.” (App. p. A-10). The NLRB made no attempt to engage in any balancing of the aforementioned objectives. The NLRB Administrative Law 18 Judge, without analysis, and relying upon the sole authority of the NLRB’s decision in Aircraft Magnesium, a Division of Grico Corp., supra, mechanically stated, “However, the standard to be used indicated by the Board is representative complement, not full complement.” (App. p. A-38). Hence the NLRB has completely ignored any attempt to balance the objectives of insuring maximum employee participa- tion in the selection of a bargaining agent against the goal of permitting employees to be represented as quickly as possible. Apparently the NLRB has utterly disregarded this Court’s con- cern in a successorship case, that there are situations where a duty to bargain may not attach until a full complement has been hired, and the bargaining agent represents a majority of the employees. In this case, the distinction between the substantial and representative complement date and the full complement date is critical because the Union did not represent a majority at the full complement date, but did represent a majority at the substan- tial complement date. This determination must be based on a reasoned analysis and not an arbitrary statement that the substan- tial complement date is to be applied without any consideration being given to applying a full complement date. In the case at bar, the NLRB has arbitrarily fixed January 15, 1983 as the date to determine whether the Employer's work force is composed of a majority of former Sterlingwale production and maintenance employees. It selected the date by mechanically following the substantial and representative complement prin- ciple applied by the NLRB in the Aircraft Magnesium case. In Aircraft Mangesium, supra, at p. 1345, the NLRB stated: “It is wel] settled that the significant time frame for determining what percentage of a purchaser's employees were former employees of a predecessor is when a demand for bargaining has been made and a representative complement of an employer’s work force is on the job.” 19 No such standard has been formulated or approved by this Court. The last word on the critical measuring date was in the Burns case in which the Court expressed its concern that there are situations when the measuring time frame should be at a point when there is a full complement of workers. We submit that there is no justification in the case at bar to ignore the clear concern of the Supreme Court for the represen- tation rights of employees. The instant case is precisely one of the situations referred to by the Court in Burns, particularly when we consider the substantial differences between Burns and Fall River that militate in favor of Fall River and demonstrate a good faith doubt with regard to the Union's majority status. Those ma- jor differences are, the lack of any expression of union preference by the employees for many years (Fall River) versus a recent elec- tion and certification (Burns), the nonexistence of a labor con- tract (Fall River) in contrast to one in effect (Burns), the start up of a new business entity after a substantial hiatus following the liquidation of the original employer (Fall River) versus a con- tinuity of operations (Burns). The NLRB has not, under the circumstances of this case, followed the policies contained in Section 9(a) of the Act, by im- posing the Union on the employees of Fall River, a minority of whom were represented by the Union while employed by Ster!- ingwale as of the full complement date, by mechanically asser- ting that the substantial and representative complement date is effective to determine majority representation. 20 THE NLRB'S CONTINUING DEMAND DOCTRINE AS APPLIED IN THIS CASE CONTRAVENES THE LABOR MANAGEMENT RELATIONS ACT, AS AM- MENDED, BY IMPROPERLY COMPELLING THE EMPLOYER TO BARGAIN WITH A UNION WHERE A GOOD FAITH DOUBT EXISTED AS TO THE UNION’S MAJORITY STATUS. There is no basis for finding that Fall River unlawfully refus- ed to recognize the Union in violaton of the Act. This is so because Fall River did not reject the Union’s request for recognition at a time when the Employer would have been obliged to honor such a request either under successorship principles or under the Act. The original demand for recognition on October 19, 1982 was undisputedly premature. The Administative Law Judge in his decision stated that the demand for bargaining by the Union claiming to represent a majority of former ernployees must be made when the new employer is operating at a “representative capacity” (App. p. A-38). However, he went on to hold that if the new employer is not at that capacity at the time of the de- mand, the demand is of a “continuing nature”, and once the employer reaches a representative capacity, the bargaining obliga- tion will attach (App. p. A-38). The NLRB’S construction and the Court of Appeals’ affirmance have retroactively transform- ed the Employer’s good faith rejection of the Union’s demand into proscribed conduct under Sections 8 (a)(1) and (5) of the Act. It is not denied by the NLRB that the Union’s original demand for recognition and bargaining, which was made on October 19, 1982, and rejected by the Employer on October 21, 1982, was in effect an illegal demand. At that time, there was neither a representative, nor a full complement of workers hired by Fall River. If the Employer had acceded to the premature recogni- tion demand, it would have been a violation of Section 8(a) (2) of the Act since the Employer would be recognizing a non- majority union. Hedstrom Company v. NLRB, 558 F.2d 1137 (CA 3, 1977), cert. denied, 450 U.S. 996 (1981). The same is also true 21 on November 1, when the Union filed its charge, and on December 21, when a complaint was issued by the Regional Director, and even on January 4, 1983, when Fall River answered the complaint. The Administrative Law Judge found that the duty to bargain with the Union attached for the Employer in mid-January, 1983 at the time the plant was running one shift at full capacity. It should be noted that no new demand was made in January, 1983 or at any time after the initial one. It is this very same illegal demand in violation of Section 8(a)(2), that the NLRB and Court of Appeals have retroactively condoned by using a continuing demand concept. Judge Torruella noted the irrationality of the continuing demand concept under the facts of this case in his dissent in the court of Appeals. He stated: “By what logic or reasoning can events that took place therafter retroactively be made to transform these good faith rejections by Fall River into illegal conduct? At best the Board’s ambiguous criteria create an unaccep- table uncertainty in the standard of conduct required of successors.” (App. p. A-29). The Administrative Law Judge and the NLRB claim that since the original demand on October 19 was made at such time that the new Employer was not operating at a representative capaci- ty, the demand automatically continues. “Once the employer reaches a representative capacity, the bargaining obligation will attach.” (App. p. A-38). However, neither the Administrative Law Judge in his decision, nor the NLRB majority in their decision, cited any authority or gave any explanation or rationale for the principle that a bargaining demand in a successorship situation made by a union at a time when the employer is not operating at a representative capacity is of a continuing nature and con- tinues until such time as the new employer reaches a represen- tative capacity, at which time a bargaining obligation will at- tach to the new employer. 22 The uncertainty of such a rule will undoubtedly act to deter employers from investing in the assets of defunct businesses. If an entrepreneur seeks to start a new business using assets pur- chased on the open market, months earlier, from the “estate” of a failed business. he should not have to worry that at some in- definite time in the future, he can be found to have violated the Act, retroactively. In this respect, the NLRB’s continuing demand concept, if applied in conjunction with the representative com- plement standard, might deter new investments which would pro- vide new jobs for laid off workers. In Hedstrom v. NLRB, supra, the Court of Appeals for the Third Circuit disagreed with the NLRB-promulgated concept of “continuing demand”, also in an unfair labor practice con- text, reasoning that if it were adopted, the employer might be forced to violate Section (8)(a) (2) of the Act by recognizing a minority union. The Court held, at p. 1148: “We canot accept any concept of continuing demand which requires an employer either to recognize a minority status union, or to risk a § 8(a) (5) violation in the event the minority union attains majority status sometime after the demand, unless it gives renewed notices to the employer that it has attained majority status since the last demand. If an employer were to recognize and bargain with a union which does not represent a majority of the employees in the ap- propriate unit, it commits an unfair labor practice in violation of § 8(a) (2) which prohibits an employer from aiding any minority union. International Ladies’ Garment Workers’ Union, AFL-CIO v. NLRB, 366 U.S. 731, 48 LRRM 2551 (1961).” This Court is respectfully urged to correct the NLRB’s conti- nuing demand concept which has been misapplied in the suc- cessorship context by the NLRB and the Court of Appeals. The Employer did not violate the bargainng obligations set forth in the Act. 23 CONCLUSION For the foregoing reasons, a writ of certiorari should issue to review the judgment of the United States Court of Appeals for the First Circuit. Respectfully submitted, Lear STERNKLAR & DROGIN 440 Park Avenue South New York, New York 10016 (212) 685-8400 Attorneys for Petitioner Fall River Dyeing & Finishing Corp. Dated: January 15, 1986 APPENDIX A-l Ynited States Court of Appeals for the First Circuit NATIONAL LABOR RELATIONS BOARD, Petitioner, v. FALL RIVER DYEING « FINISHING CORP. Respondent. DECREE Entered: October 18, 1985 This cause came on to be heard on application for enforce- ment of an order of the National Labor Relations Board, and was argued by Counsel. Upon consideration whereof, It is now here ordered, adjudg- ed and decreed as follows: The application for enforcement is granted and the order of the National Labor Relations Board is hereby affirmed and enforced. By the Court, Francis P. Scigliano Clerk. A True Copy Attest: Clerk (Cert. cc: N.L.R.B. and Messrs. Bernstein and Drogin; and ec: Mr. Fuchs, Regional Director] United States Court of Appeals for the First Circuit No. 85-1019 NATIONAL LABOR RELATIONS BOARD, Petitioner, v. FALL RIVER DYEING « FINISHING CORP., Respondent. ON APPLICATION FOR ENFORCEMENT OF AN ORDER OF THE NATIONAL LABOR RELATIONS BOARD Before Bownes, Rubin* and Torruella, Circuit Judges. Ira Drogin with whom Leaf, Sternklar 4 Drogin was on brief for respondent. William M. Bernstein with whom Elinor Hadley Stillman, Rosemary M. Collyer, General Counsei, John E. Higgins, Jr. , Deputy General Counsel, Robert E. Allen, Associate General Counsel, and Elliott Moore, Deputy Associate General Counsel. were on brief for petitioner. October 18, 1985 *Of the Fifth Circuit, sitting by designation. A-3 RUBIN, Circuit Judge. The National Labor Relations Board found that Fall River Dyeing & Finishing Corporation (the Company) was the successor to Sterlingwale Corporation, most of whose assets the Company acquired when Sterlingware became insolvent and was liquidated. The Board also found that a premature demand for collective bargaining made by the Union that had represented Sterlingwale’s employees continued in force and became effective against Fall River upon its employ- ment of a representative complement of Sterlingwale employees. Because Fall River, upon reaching its representative comple- ment of employees, did not recognize and bargain with the Union, the Board found that it had violated Section 8(b) (5) and (1) of the National Labor Relations Act. We enforce the Board’s order, finding that substantial evidence on the record as a whole supports the Board’s conclusions and the legal prin- ciples it applied do not violate the Act. I. For more than thirty years before 1982, Sterlingwale, which was owned by the Ansin family, operated a plant at Fall River. Massachusetts, in which it engaged primarily in dyeing and finishing textiles. Sterlingwale bought unfinished fabrics for its own account, dyed and finished them, then offered the fabrics for sale to apparel manufacturers. This business is known in the trade as “converting.” Sterlingwale also dyed and finished fabrics owned by other customers to the customers’ specifica- tions, a business known as “commission finishing.” In 1981, sixty to seventy percent of Sterlingwale’s volume was converting and the rest commission finishing. The process for dyeing and finishing fabrics is the same whether the work is done for resale or on commission. However, the financing and customer relations aspects of the two types of businesses are different. Converting requires capital to buy merchandise and a sales force. Several major national firms are engaged in this business, and it is intensely competitive. Com- mission finishing serves a different market and involves supply- ing only the services designated by the customer. A-4 Adverse economic conditions and foreign competition afflicted the textile industry in the 1970’s. Sterlingwale’s business became unprofitable but Ansin, its president and principal stockholder, tried to stay in business because he thought that he “owed that to the community” and to the company’s employees, many of whom had been employed by it for over twenty-five years. Early in 1982, after years of losses amounting to millions of dollars, Sterlingwale ran out of cash and could no longer buy fabric for its converting business. Consequently, Ansin ceased normal! pro- duction operations and began to liquidate the company, lay- ing off employees and selling its inventory. In July 1982, Ster]- ingware employed a professional liquidator to sell the firm’s re- maining assets. Sterlingwale then executed an assignment of its assets for the benefit of its creditors. Through another company, Arthur Friedman, who is now the President of Fall River, acquired Sterlingwale’s equipment and the real property formerly used by it at a mortgage foreclosure sale. Friedman’s company conveyed the equipment and leased part of the original Sterlingwale plant to Fall River Dyeing & Finishing. Fall River, operating out of one of the three former Sterl- ingwale buildings, began hiring employees on September 20, 1982. The employees then spent approximately four to six weeks on start-up operations, cleaning, relocating and repairing machines. They spent the next four to five weeks on experimen- tal production to ensure that everything was in working order. Following the start-up stage, employees did much the same work they had done for Sterlingwale. The Company conducted all of its operations in what had been Sterlingwale’s production building, using the same machinery and the same basic pro- cess. It did commission work, as Sterlingwale had done, but did no converter work. By a letter dated October 19, the union demanded that Fall River recognize it as its employees’ collective bargaining agent. The Company replied that it did not intend to comply with the A-5 request. At that time, the Company was still engaged in start- up operations, and, as the Board found, did not have a represen- tative complement of employees. The Company’s initial production goal was to have one full shift operation employing fifty-five to sixty employees. Upon reaching that goal, the Company intended to “see how business would be,” and planned to expand to a two-shift operation by April 1983. Such a sixteen-hour operation is desirable, indeed almost essential to the production process because the fabrics emerge from the process wet and the entire operation, including drying, cannot be completed in eight hours. By November 1982, employees had been hired in virtually all job classifications. In mid-January 1983, the first shift was in full operation and the Company had begun a second shift. At that time, the Company had hired at least fifty percent of those it would ultimately employ in the majority of existing job classifications and 55 of the 106-109 employees it was to employ in April, the month in which the Company reached its an- ticipated employee complement. Of the fifty-five employees hired by mid-January, approximately thirty-six were former Sterlingwale employees. Eight of the Company’s twelve super- visors were former Sterlingwale supervisors and three of the other four were former Sterlingwale employees. Over half of the dollar volume of the Company’s business came from former customers of Sterlingwale. The Board found that, as of January 15, 1983, the Company had employed a representative complement of employees in an appropriate unit and that at that time the Company was a suc- cessor employer to Sterlingwale. The Board further found that the Union's bargaining request constituted a continuing demand for recognition and bargaining and that the Company violated Section 8(a) (5) and (1) of the National Labor Relations Act' ' 29 U.S.C. § 158(a) (5) & (1). A-6 by refusing to recognize and bargain with the Union once its suc- cessor bargaining obligation arose. Member Hunter dissented on the ground that the Company did not have a representative complement of unit employees at the time of the Union's October 19 recognition demand and the Company’s October 22 refusal. Absent a renewed Union bargain- ing demand at a time when the Company had reached a represen- tative complement, Member Hunter would find no bargaining obligation. Il. “[A] mere change of employers or of ownership in the employ- ing industry,” the Supreme Court held in NLRB v. Burns Inter- national Security Services, Inc.,? does not affect the Board’s cer- tification of a bargaining unit. The successor employer's obliga- tion to bargain is founded on the mandate of Sections 8(a)(5) and 9(a) of the Act? — an employer must bargain with “[rJepresen- tatives designated or selected for the purposes of collective bargaining by the majority of the employees in a unit appropriate for such purposes.”* The successor employer's obligation also arises from ‘he rule that a mere change in ownership does not destroy the presumption of continuing employee support for a certified union.‘ “The basic rationale is that a mere change in ownership, without an essential change in working conditions, would not be likely to change employee attitudes toward representation.”* ? 406 U.S. 272, 279, 92 S.Ct. 1571, 1577, 32 L.Ed.2d 61, —— £% > 29 U.S.C. §§ 158(a)(5) & 159(a). * Id. § 159(a). * See NLRB v. Burns Int’! Sec. Servs., 406 U.S. at 277-279, 92 S.Ct. at 1577, 32 L.Ed.2d at ____; see also Aircraft Magnesium, 265 N.L.R.B. 1344, 1345 (1982), enforced, 730 F.2d 767 (9th Cir. 1984) (table). * Premium Foods, Inc. v. NLRB, 709 F.2d 623, 627 (9th Cir. 1983) (emphasis in original); see NLRB v. Band-Age, Inc., 534 F.2d 1, 6 (Ist Cir. 1976), cert. denied, 429 U.S. 921, 97 S.Ct. 318, 50 L.Ed.2d 288 (1976). A-7 If, after a change in ownership, the essential nature of the enter- prise remains unchanged, and a majority of the “new” firm’s employees or management were employed by the predecessor company, the new employer is considered the old employer's “suc- cessor.” As such, the new employer must recognize the incum- bent union and deal with it as the bargaining representative of the employees.’ In determining whether an employer must recognize and bargain with a union that has represented the empluyees of the former employer, “the Board looks to the totality of the cir- cumstances to determine whether there has been a substantial and material alteration in the employing enterprise.” In mak- ing this determination, the Board considers various factors, among them the percentage of employees who were employed by the previous employer, the extent to which their former supervisors have been retained, the indentity of skills used and functions per- formed by the employees, the continuation of the business in the same physical facility with the same or similar equipment, the continuity of products sold or services rendered, and the identi- ty of the customers.’ Significant changes in the scope of the new employer's business are to be considered, but alone they do not negate the possible successorship status of the new business.” The critical inquiry is whether any changes in operation have significantly altered the employees’ working conditions, the ” NLRB v. Burns Int'l Sec. Servs., 406 U.S. at 279-81, 92 S.Ct. at 1577-79, 32 L.Ed.2d at ___; NLRB v. Band-Age, Inc., 534 F.2d at 3. * NLRB v. Boston Needham Indus. Cleaning Co., Inc., 526 F.2d 74, 77 (Ist Cir. 1975). * See NLRB v. Burns Sec. Servs., Inc., 406 U.S. at 279-80 n.4; 92 S.Ct. at 1578 n.4; 32 L.Ed.2d at ____ n.4; NLRB v. Middleboro Fire Apparatus, Inc., 590 F.2d 4, 7-8 (Ist Civ. 1978); NLRB v. Band-Age, Inc., 534 F.2d at 3-4, 6 (Ist Cir. 1976). NLRB v. Jeffries Lithograph Co., 752 F.2d 459, 463, 465-66 (9th Cir. 1985); NLRB v. Hudson River Aggregates, Inc. 639 F.2d 865, 869 (2d Cir. 198). A-8 employment relationship, and correspondingly, the employees’ expectations and needs with regard to representation." The seven-month hiatus between the cessation of production at Sterlingwale and the commencement of the Company's opera- tions is to be considered, but it is similarly not dispositive” A hiatus does not of itself preclude a successorship finding because the inquiry focuses on employee expectations of rehire in the light of indications during this interim of plans to resume plant opera- tions under new management. The interim period may be viewed as part of “the normal concomitants of a new management and a new approach to a failing business, not a break in the con- tinuity of the employing industry.” Because the enterprise-continuity determination is based on the totality of circumstances, decisions turn “to a great extent on the precise facts involved.”"* A reviewing court's inquiry is limited to whether the Board’s findings are supported by substan- tial evidence, viewing the record as a whole. The Board’s finding in this case that the Company was substan- tially continuous to Sterlingwale is supported by substantial evidence in the record, considered as a whole, as the evidence " See NLRB v. Band-Age, Inc., 534 F.2d at 6; NLRB v. Boston Needham Indus. Cleaning Co., Inc., 526 F.2d at 77; NLRB v. Jeffries Lithograph Co., 752 F.2d at 464. * NLRB v. Band-Age, Inc., 534 F.2d at 5. *° NLRB v. Middleboro Fire Apparatus, 590 F.2d at 8. “ Howard Johnson Co. v. Detroit Local Joint Executive Bd., 417 U.S. 249, 256, 94 S.Ct. 2236, 2240, 41 L.Ed.2d 46, ____ (1974) (quoting NLRB v. Burns Int'l Sec. Servs., 406 U.S. 272, 274, 92 S.Ct. 1571, 1575, 32 L.Ed.2d 61, (1972)). See also International Union of Elec., Radio & Mach. Workers v. NLRB, 604 F.2d 689, 694 (D.C. Cir. 1979). * Universal Camera Corp. v. NLRB, 340 U.S. 474, 490, 71 S.Ct. 456, 466, 95 L.Ed. 456, (1951); NLRB v. Middleboro Fire Apparatus, Inc., 590 F.2d at 6; NLRB v. Boston Needham Indus. Cleaning Co., Inc., 526 F.2d at 76. A-9 summarized above demonstrates. The Company did not assume Sterlingwale's liabilities or acquire its trade name but these facts do not preclude a finding of successorship.* Although the Com- pany operated exclusively as a commission dyer and finisher and did not continue the converter work performed by Sterlingwale, this change did not alter the essential nature of the employees’ responsibilities because both types of work involve essentially the same production process. The differences between the Company's business and Sterlingwale’s are not sufficiently significant to re- quire a finding that the continuity of the enterprise, viewed from the employees’ standpoint, was broken. The changes in purchas- ing, sales, marketing, and financial operations brought about by the switch to a straight commission operation are only indirect- ly related to the interests of the unit production and maintenance employees.” The change from three shifts to two and the reduc- tion in the number of supervisors might rationally be found to represent only a reduction in the size and scope of the opera- tion, not an essential change in the employing enterprise. Ill. In a successorship situation, the bargaining obligation can nor- mally be determined at the time of transfer or when operations begin." In other instances, however, such as when an employer is rebuilding a collapsed business or is operating at a substan- tially reduced capacity, a delay in making the determination may be appropriate. As the Supreme Court has noted, a determina- tion regarding the successor’s obligation to bargain may have to wait “until the successor employer has hired his full complement of employees ..., since it will not be evident until then that the * Cf. NLRB v. Band-Age Inc., 534 F.2d at 5; Tom-a-hawk Transit, Inc. v. NLRB, 419 F.2d 1025, 1026-1027 (7th Cir. 1969). " See NLRB v. Interstate 65 Corp., 453 F.2d 269, 273 (6th Cir. 1971). * NLRB v. Hudson River Aggregates, Inc. 639 F.2d 865, 870 (2d Cir. 1981); see also NLRB v. Ideal Laundry Corp., 422 F.2d 801, 804 (10th Cir. 1970). A-10 bargaining representative represents a majority of employees in the unit as required by § 9(a) of the Act.” This “full complement” principle, however, has not been in- terpreted to require that the examination of the workforce com- position be postponed until the business is operating at its max- imum capacity or until the employer has completed hiring all of its bargaining unit employees. Courts have agreed that, in cases in which the successorship obligation cannot be determined at the very outset of the transition, fixing the appropriate date at which the bargaining obligation arises “involves balancing the objective of insuring maximum employee participation in the selection of a bargaining agent against the goal of permitting employees to be represented as quickly as possible.” These interests are effectively reconciled in the “substantial and representative complement” standard applied by the Board in this case.” This “standard embodies the balance between early representation and maximum participation that lies at the heart of the ‘full complement’ concept,” and it has met with general acceptance in courts that have considered this type of successor- ship problem.” * NLRB v. Burns Sec. Servs., Inc., 406 US. at 295, 92 S.Ct. at 1586, 32 L.Ed.2d at ” NLRB v. Pre-Engineered Bldg. Prods., Inc., 603 F.2d 134, 136 (10th Cir. 1979): accord Premium Foods, Inc. v. NLRB, 709 F.2d 623, 628.(9th Cir. 1983); NLRB v. Hudson River Aggregates, Inc., 639 F.2d at 870-71. * See, e.g., Indianapolis Mack Sales and Serv., Inc., 272 N.L.R.B. No. 108, 117 L.R.R.M. 1335 (1984); enforcement appeal filed, No. 84-3061 (7th Cir. Dec. 7, 1984); Aircraft Magnesium, 265 N.L.R.B. 1344, 1345 (1982), enforced, 730 F.2d 767 (9th Cir. 1984) (table). # Premium Foods, Inc. v. NLRB. 709 F.2d at 628. a v. Jeffries Lithograph Co., 752 F.2d at 467; NLRB v. Hudson River ggregates, Inc., 639 F.2d at 870; see also NLRB v. Pre-Engineered Bldg. Prod., Inc., 603 F.2d at 136 & n.1 (10th Cir. 1979). A-11 The Company's contention that the Board’s representative com- plement standard is “at variance with the Ninth and Tenth Cir- cuits” is not supported by the cases cited. In Pacific Hide & Fur Depot, Inc. v. NLRB,” the Ninth Circuit declined to enforce the Board’s order to bargain in part because it read the Board’s deci- sion in that case as rejecting altogether the proposition that the Burns “full complement” dictum was relevant to the question whether a successorship obligation exists. While the court im- plied in dicta that strict adherence to the “full complement” stan- dard was proper, it also recognized that a “full complement” could be defined “only by considering the facts of each case” in the light of the general goals to be attained.* The Ninth Circuit has since made clear its acceptance of the “substantial and representative complement” standard as an appropriate means of satisfying the interests recognized in Burns.” Similarly, in NLRB v. Pre- Engineered Building Products,” the Tenth Circuit, while it declin- ed to enforce the Board’s order on the basis of the record evidence, rejected a rigid interpretation of the “full complement” standard that would postpone the obligation to bargain until the employer achieved its ultimate objectives and acknowledged the necessity of balancing the objecives of early representation and maximum employee participation.” In determining whether a representative complement existed at a given date, the Board first looks to see whether the job classifications for the operation were “filled or substantially fill- ed” and whether the operation was in “normal or substantially * 553 F.2d 609 (9th Cir. 1977). * Id. at 613. * See NLRB v. Jeffries Lithograph Co., 752 F.2d 459, 467 (9th Cir. 1985) (citing Premium Foods, Inc. v. NLRB, 709 F.2d 623, 628-29 (9th Cir. 1985)). 7 603 F.2d 134 (10th Cir. 1979). * Id. at 136. A-12 normal production.”” The Board also considers the size of the complement on that date, the time expected to elapse before a substantially larger complement would be hired, and the relative certainty of the expected expansion.” Considering these guides, the Board reasonably found that the Company employed a substantial and representative complement of its workforce in mid-January. By then the Company had hired employees in virtually all job classifications, had hired at least fifty percent of those it would ultimately employ in the majori- ty of those classifications, and it employed a majority of the employees it would eventually employ when it reached full com- plement. No workers having new skills were later employed. The Company had also reached substantially normal production in mid-January, at which time the first shaft was in full operation and a second had begun. IV. In successorship situations, when a union’s clear request for bargaining in an appropriate unit has been rejected outright and unconditionally by the employer, the Board has treated the de- mand as continuing and has not required the union to renew the demand later, even if the employer’s bargaining obligation was not mature at the time of the original request." The Board has applied this doctrine in cases in which a union, lacking a majority at the time of its original demand, did not renew the * Premium Foods, Inc. v. NLRB, 709 F.2d at 628; acowrd NLRB v. Jeffries Lithograph Co., 752 F.2d at 467 (9th Cir. 1985); Indianapolis Mack Sales and Serv., Inc., 272 N.L.R.B. No. 108, 17 LRRM 1335 (1984), enforcement appeal filed, No. 84-3061 (7th Cir. Dec. 7, 1984); see also Hayes Coal Co., Inc., 197 N.L.R.B. 1162, 1163 (1972). * NLRB v. Jeffries Lithograph Co., 752 F.2d at 467-68; Premium Foods, Inc. v. NLRB, 709 F.2d at 628. * Aircraft Magnesium, 265 N.L.R.B. 1344, 1345 n.9 (1982), enforced, 730 F.2d 767 (9th Cir. 1984) (table). A-13 demand upon gaining a majority” and in cases in which an employer, seeking to defend against an unfair labor practice charge, asserts the charge is barred by the Act’s statute of limita- tions® because of the union’s failure to renew its demand within six months of the charge’s filing.” — The Company argues, however, that the Third Circuit’s re- jection of the continuing demand cuncept in Hedstrom Co. v. NLRB*® controls the present case. In Hedstrom, a case not in- volving a successor enterprise, the initial demand was made by a union lacking majority support. The court reasoned that to recognize as continuing a demand made when the union lacked majority designation would force employers “to tread the fine line between” violating Section 8(a)(2) of the Act,” which pro- hibits recognizing a minority union, and violating Section 8(a) (5) of the Act,** which requests employers to bargain with the ma- jority union. Under the circumstances present in Hedstrom, if the initial immature demand were to be deemed continuing, the employer's obligation to bargain would arise simply upon the union’s reaching majority status. Such a rule would require an employer to monitor the union’s status in order to avoid violating Section 8(a)(5) of the Act. The rationale of Hedstrom is nullified in successorship cases. When a continuity in the enterprise has been found, as is the * Schwab Foods, Inc., 223 NLRB 394, 413 (1976), enforced 549 F.2d 805 (7th Cir. 1977) (table); Local No. 152 v. NLRB, 343 F.2d 307, 310 (D.C. Cir. 1965). *% National Labor Relations Act § 10(b); 29 U.S.C. § 160(b). * Enterprise Prods. Co., 265 NLRB 544, 563 (1982). * 558 F.2d 1137, 1146-48 (1977), cert. denied, 450 U.S. 996, 101 S.Ct. 1699, 68 L.Ed.2d 196 (1981). * Id. at 1148. 7 29 U.S.C. § 158(a)(2). * Id. § 158(a)(5). A-14 case here, “the presumption of majority status by the union under the predecessor . . . is not affected by a change in ownership.” “A union is not required to substantiate anew its majority status when a successor assumes an employer's business.”* The rationale behind this presumption of majority status derives from the fact that a successor’s obligation to bargain with the union arises when the employer reaches a “substantial and representative comple- ment” of its work force.* The employer, unlike the union, can readily reach this determination on its own by examining whether the job classifications for the operation have been “filled or substantially filled” and whether the operation is in “normal or substantially normal production.”* Thus, in the successorship con- text, the continuing demand concept does not present the risks the Hedstrom court found unfair. In the successorship context, moreover, the Board’s continu- ing demand rule is practical. Unions often lack precise informa- tion about when a change in ownership of a firm is to take place, how it is to take place, and what plans, if any, the new owners have for expansion or modification of the enterprise; it is thus not uncommon for bargaining demands to be made before the bargaining obligation actually arises.“ In none of the successor- ship cases was it even claimed that the Board could not properly find a Section 8(a) (5) violation because the initial bargaining * Aircraft Magnesium, 265 N.L.R.B. 1344, 1345 (1982), enforced, 730 F.2d 767 (9th Cir. 1984) (table). “ Id. at 1346. 4 See supra text accompany notes 19-30. “ Premium Foods, Inc. v. NLRB, 709 F.2d at 628; see also Hayes Coal Co., Inc., 197 N.L.R.B. 1162, 1163 (1972). “ See, e.g., NLRB v. Hudson River Aggregates, 639 F.2d at 867-68, 870 (2d Cir. 1981); Aircraft Magnesium, 265 N.L.R.B. 1344, 1344-45, 1346 (1982), en- forced, 730 F.2d 767 (9th Cir. 1984); Cf. Premium Foods, Inc. v. NLRB, 709 F.2d at 625-26, 629 (though union demand timely, sent to wrong company also involved in the transfer). A-15 demand was not renewed, and the Company has cited no suc- cessorship case that supports that proposition. The doctrine applied by the Board may not be one that we would ourselves devise. Given the discretion imparted to it to in- terpret and enforce the Act, we do not find the Board’s ruling “arbitrary or contrary to law.” V At the unfair labor practice hearing, the Company sought to introduce two petitions disclaiming employee support for the Union. The petitions had been signed by the employees on April 29, 1983, three days before the unfair labor practice hearing com- menced. The administrative law judge rejected these exhibits because, given their timing, they could not justify the Company s refusal to bargain on January 15. The administrative law judge properly declined to consider the petitions on the ground that they were made after the time when the Company became obligated to bargain with the Union and failed to do so. As in the analogous situation of an employer withdrawing recognition from a union because it is in good faith doubts the union’s ma- jority status, no useful purpose is served by permitting the employer to defend the propriety of an earlier refusal to bargain by relying on subsequent events that had nothing to do with the refusal.“ Furthermore, once it has been determined that an employer has unlawfully withheld recognition of an employees’ bargaining representative, the employer cannot defend against a remedial bargaining by pointing to an intervening loss of “ Charles D. Bonanno Linen Serv., Inc. v. NLRB, 454 U.S. 404, 413, 102 S.Ct. 720, 725, 70 L.Ed.2d 656, ____ (1982); see also Beth Israel Hosp. v. NLRB 437 USS. 483, 501, 98 S.Ct. 2463, 2473-74, 57 L.Ed.2d 370, ____ (1978) (The judicial role is narrow: The rule which the Board adopts is judicially reviewable for consistency with the Act, and for rationality, but if satisfies those criteria, the Board’s application of the rule, if supported by substantial evidence on the record as a whole, must be enforced.”). “ See Terrell Machine Co. v. NLRB, 427 F.2d 1088, 1090 (4th Cir.), cert. denied, 398 U.S. 929, 90 S.Ct. 1821, L.Ed.2d _____ (1970); NLRB v. Gulfmont Hote! Co., 362 F.2d 588, 589 (5th Cir. 1966). A-16 employee support for the union when such loss of support is a foreseeable consequence of the employer's unfair labor practice.“ Had the Company voluntarily bargained with the Union in January, the employees’ wage concerns might have been addressed and the employees might not have signed these petitions. If the employees had nonetheless signed petitions disclaiming support for the Union after such bargaining, the Company might have had a basis for withdrawing recognition; having behaved lawfully, it would be free to withdraw recognition on the basis of any evidence that established actual loss of majority or supported good faith doubt.” However, the Board found the Company did not bargain when it should have; hence, these petitions cannot pro- perly serve either to justify the earlier refusal to bargain or to affect the order remedying that refusal.* For these reasons, the Board’s Order is ENFORCED. “ Franks Bros. Co. v. NLRB, 321 U.S. 702, 702-04, 64 S.Ct. 817, 818, 88 L.Ed. 1020, _____ (1944). * Landmark Int'l Trucks, Inc. v. NLRB, 699 F.2d 815, 819 (6th Cir. 1983): Harley-Davidson Transp. Co., 273 N.L.R.B. No. 192, 118 L.R.R.M. 1204 (Jan. 22, 1985). “ Aircraft Magnesium, 265 N.L.R.B. 1344, 1346 (1982), enforced, 730 F.2d 767 (9th Cir. 1984). A-17 TORRUELLA, Circuit Judge (Dissenting). The central issue presented by this appeal is whether the National Labor Rela- tions Board (Board) has contravened N.L.R.B. v. Burns Inter- national Detective Agency, 406 U.S. 272 (1972) in ruling that Fall River is a “successor employer” to Sterlingwale and was thus bound to recognize and negotiate with the labor organization that represented Sterlingwale’s employees. Underlying the resolu- tion of this question are two Board-promulgated theories: (1) the “continuing demand” concept, whereby a union’s demand for recognition, once made and rejected by an employer, is considered to be continuing in nature, see Aircraft Magnesium, 265 N.L.R.B. 1344, 1345 n.9 (1982), enforced, 730 F.2d 767 (9th Cir. 1984), and (2) the “substantial and representative complement” stan- dard, under which the determination of whether a new employer is a successor is postponed until his workforce reaches a substan- tial complement, representative of the number and type of employees that will ultimately constitute the appropriate bargain- ing unit. Aircraft Magnesium, 265 N.L.R.B. at 1345; Premium Foods, Inc. v. N.L.R.B., 709 F.2d 623, 628 (9th Cir. 1983). These issues are unavoidably intertwined and are of first impression in this circuit. At the outset, it must be recognized that “[t]he judicial role is narrow: The rule{s] which the Board adopts [are] judicially reviewable for consistency with the Act, and for rationality, but if [they] satisfy[y] those criteria, the Board’s application of the rule[s], if supported by substantial evidence on the record as a whole, must be enforced.” Beth Israel Hospital v. N.L.R.B., 437 U.S. 483, 501 (1977). See also § 10(e), N.L.R.A., 29 U.S.C. § 160(e); Administrative Procedure Act, 5 U.S.C. § 706(2)(E); Universal Camera Corp. v. N.L.R.B., 340 U.S. 474 (1951). In my opinion the Board has failed to meet all of these tests and is promoting concepts that are clearly contrary to the Labor Management Rela- tions Act (Act) and to Supreme Court precedent. In the area of successorship there are few broad governing prin- ciples and thus, there exists considerable uncertainty. N.L.R.B. v. Band-Age, Inc., 534 F.2d 1, 2 (Ist Cir. 1976). See also Note, The Bargaining Obligations of Successor Employers, 88 Harv. L. Rev. 759, 760 (1975) (hereinafter cited as Bargaining Obliga- tions); Comments, Criteria For Determining Employer A-18 Successorship-Factor Analysis, Burns and the Need For a New Standard, 11 Wake Forest L. Rev. 437, 446, 457 (1975) (hereinafter cited as Criteria). In light of the difficulty of the successorship question, it is especially appropriate to focus on the particular facts of each case. Howard Johnson Co. v. Detroit Local Joint Executive Board, Hotel and Restaurant Employees Union, 417 U.S. 249, 256 (1974); Band-Age, Inc., supra. In the present case, the facts upon which the Board’s action is predicated are essentially undisputed. I will restate them, however, in the context of various items apparently glossed over by the Board in reaching its successorship conclusion. On February 12, 1982, Sterlingwale shut down its textile dye- ing and finishing operation and indefinitely laid off all of its pro- duction and maintenance employees. These employees were represented since 1968 by the United Textile Workers of America, AFL-CIO, Local 292 (Union). A series of collective bargaining agreements had been negotiated, the last of which was due to expire on April 1, 1982, and eventually did so expire without fur- ther extension by the parties. Notwithstanding the existence of a grievance and arbitration procedure, the Union did not challenge Sterlingwale’s actions, as it was patently clear that the terminations were not motivated by anything except Sterlingwale’s dire economic circumstances involving the loss of millions of dollars. After February 12th, Sterlingwale entered a period of liquida- tion during which it retained a skeleton crew until the Summer of 1982, when the business ceased activities altogether. An assign- ment was -. ade for the benefit of creditors and a foreclosure was made on 1 premises occupied by Sterlingwale. Thereafter, Sterl- ingwale’s ~operty was sold at auction. The real property was acquired in late August 1982 by Macramy Sales Corp. (Macramy), who then leased part of these premises to Fall River. Fall River moved into this locale in September 1982. Fall River also acquired at auction most of Sterlingwale’s machinery, furniture, and fix- tures, and part of Sterlingwale’s remaining materials and inven- tory. It is significant to note that these purchases were made at public auction, not through direct private sales. A-19 Fall River acquired no other former Sterlingwale assets such as its trade name, good will, or customer lists, nor did Fall River assume any of Sterlingwale’s liabilities. Additionally, there is no evidence that Fall River obtained any of Sterlingwale’s employee lists or personnel records. Thereafter, Fall River publicly advertised employment oppor- tunities in the local newspapers. On September 20, 1982, after hiring its first new employees, it commenced preliminary start- up operations in one of three former Sterlingwale buildings. Fall River proposed to engage solely in commission work, which con- sists of the dyeing and finishing of fabric belonging to others for a commission, in contrast with Sterlingwale, whose business had been approximately 60-70% processing its own fabric and only 30-40 % commission finishing. On October 19, 1982, the Union sent Fall River a letter stating that, “pursuant to the Agreement between Sterlingwale” and the Union, the Union demanded recognition. It then indicated that on October 28th at 1:00 PM a Union representative would call upon Fall River “for the purpose of negotiating a collective bargaining agieement.” At the time of this demand Fall River had 21 employees on the payroll, 18 of whom were former Ster]- ingwale employees. Fall River's initial production goal was to have a one-shift operation of 55 to 60 employees, and then to expand fully to a two-shift operation totaling 106-109 employees by April 1983. On October 21, 1982, in a letter written by its counsel, Fall River indicated that it did “not intend to comply with [the Union's] request; and further . . . that there was no legal basis for same.” On November 1, 1982, the Union fiied an unfair labor prac- tice charge with the Board, claiming that Fall River had violated Sections 8(a) (1) and (5) of the Act. By mid-November, Fall River had hired employees in virtually all job classifications. They were engaged in start-up operations, cleaning and repairing machines for the first 4-6 weeks, and carrying out experimental produc- tion on old Sterlingwale inventory during the next 4-5 weeks. A-20 After investigation, the Regional Director of the Board on December 21, 1982 issued a complaint charging Fall River with violation of Sections 8(a) (1) and (5) of the Act because “[o]n or about October 21, 1982, and at all times thereafter, Respondent did refuse and continues to refuse to meet and bargain collec- tively, with the Union as the exclusive representative of all the employees in the unit.” A hearing was set for May 2, 1983. On January 4, 1983, Fall River answered the complaint, the substance of which was a denial that it was a successor employer to Sterlingwale or that it had violated Sections 8(a) (1) and (5) of the Act. In mid-January, 1983, the first shift was in full operation and a second shift was begun, with a total complement of 55 employees, approximately 36 of whom were former Sterlingwale employees. Furthermore, Fall River's Vice-President and Secretary, Herbert Chance, had formerly served as Vice-President of Sterlingwale until February, 1982. Over half of the dollar volume of Fall River’s commission dyeing and finishing work came from customers who had also done business with Sterlingwale. Fall River continued to expand until it reached its goal of a full complemes' |° employees in mid-April 1983, with two 10-hour shift: en g approximately 106 to 109 persons. By March 24, lf «© © Sterlingwale employees were a minori- ty of the emp» © © the production and maintenance unit. The hearing before the administrative law judge began on May 2nd. The judge held in substance that the Union’s October 19th demand was a continuing one that Fall River was bound to com- ply with at such time as its operations reached a “representative complement, not full complement.” He then ruled “that the du- ty to bargain with the Union attached for [Fall River] in mid- January 1983,” and ordered Fall River, upon request of the Union, to bargain. A majority of the Board, with one dissenting vote, adopted the decision in toto, enforcement of which is now before us. A-21 There are three distinct but related reasons why enforcement should be denied. I The Board’s “representative complement” rule contravenes the “full complement” rule enunciated by the Supreme Court in N.L.R.B. v. Burns International Detective Agency, supra. See Criteria, 11 Wake Forest L. Rev. at 449, 457. In Burns the Court was faced with a changeover of employers in an ongoing opera- tion. Wackenhut Corporation, the initial employer, had a con- tract to provide security services to the Lockheed Aircraft Com- pany. A majority of Wackenhut’s employees voted in a Board- supervised election to be represented by a union and, thereafter, Wackenhut and the union negotiated a collective bargaining agreement. Approximately four months later Wackenhut’s con- tract with Lockheed expired without renovation. Instead, Lockheed contracted with the Burns Detective Agency for these services. At the time of Burns’ takeover, Burns employed 27 of Wackenhut’s guards directly from the certified unit, in addition to which it completed the unit by bringing in 15 of its own guards from other Burns’ locations. No hiatus occurred in the provision of services to Lockheed between the Wackenhut and Burns’ opera- tions. After the takeover Burns refused the union’s request for recognition and compliance with the labor contract and the Board thereafter found Burns in violation of Sections 8(a) (1) and (5) of the Act as a successor of Wackenhut. In sustaining the Board’s findings regarding successorship, the Court stated: In an election held but a few months before, the union had been designated bargaining agent for the employees in the unit and a majority of these employees had been hired by Burns for work in the identical unit. It is undisputed that Burns knew all the relevant facts in this regard and was aware of the certification and of the existence of a collective-bargaining contract. In these circumstances, it was not unreasonable for the | 2 ——_e_errreeee A-22 Board to conclude that the union certified to represent all employees in the unit still represented a majority of the employees and that Burns could not reasonably have entertained a good-faith doubt about that fact, Burns’ obligation to bargain with the union over. terms and conditions of employment stemmed from its hiring of Wackenhut’s employees and from the recent election and Board certification. It has been consistently held that a mere change of employers or of ownership in the employing industry is not such an “unusual cir- cumstance” as to affect the force of the Board’s certifica- tion within the normal operative period if a majority of employees after the change of ownership or manage- ment were employed by the preceding employer. 406 U.S. at 278-279. The Court then considered the Board’s findings that Burns had violated the Act by unilaterally changing working conditions of the employer. The Court, in ruling against the Board stated: 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 perfect- ly clear that the new employer plans to retain all of the employees in the unit and in which it will be ap- propriate 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 comple- ment of employees that he has a duty to bargain with a union, since it will not be evident until then that the bargaining representative represents a majority of the employees in the unit as required by § 9(a) of the Act, 29 U.S.C. § 159 (a). Here, for example, Burns’ obliga- tion to bargain with the union did not mature until it had selected its force of guards late in June. The Board quite properly found that Burns refused to bargain on July 12 when it rejected the overtures of the union. 406 U.S. at 294-95 (emphasis supplied). A-23 The present case is precisely one of the “other situations” refer- red to by the court in Burns, particularly when we consider the substantial difference between Burns and Fall River that militate in favor of Fall River: the lack of any expression of union preference by the employees for many years (Fall River) versus a recent election and certification (Burns), the non-existence of a labor contract (Fall River) in contrast to one in effect (Burns), the start up of a new business entity after a substantial hiatus following the liquidation of the original employer (Fall River) versus a continuity of operations (Burns). The court’s reference to Section 9(a) of the Act in its ruling is of special relevance as it is this part of the Act that provides for selection of the employee's representatives “for the purpose of collective bargaining by the majority of the employees.” This provision establishes a strong public policy favoring free choice of a bargaining agent by the employees which should not light- ly be frustrated. Schmerler Ford, Inc. v. N.L.R.B., 424 F.2d 1335, 1339 (7th Cir. 1970). It is because of this self-evident principle that four justices dissented in Burns against any application of the successorship principle to even the strong factual situation in Burns, concluding “that the Board and the Court of Appeals stretched that concept beyond the limits of its proper applica- tion”. 406 U.S. at 296. As the dissent indicates, “the successor- ship doctrine, carried to its ultimate limits, runs counter to other equally well-established principles of labor law. Industrial peace is an important goal of the Labor Management Relations Act.” Id. at 302. “But Congress has plainly been unwilling to purchase industrial peace at the price of substantial curtailment of free collective bargaining by the freely chosen representatives of the employees with their employer.” Jd. at 303. ' 29 U.S.C. 159(a): Representatives designated ox selected for the purposes of col- lective bargaining by the majority of the employees in a unit ap- propriate for such purposes, shall be the exclusive representatives of all the employees in such unit for the purposes of collective bargaining in respect to rates of pay, wages, hours of employment, or other conditions of employment.... A-24 The dissent, in concluding that the application of the successor- ship doctrine was not authorized by the Act, stated: The rigid imposition of a prior-existing labor relations environment on a new employer whose only connec- tion with the old employer is the hiring of some of the latter’s employees and the performance of some of the work which was previously performed by the latter, might well tend to produce industrial peace of a sort. But industrial peace in such a case would be produc- ed at a sacrifice of the determination by the Board of the appropriateness of bargaining agents and of the wishes of the majority of the employees which the Act was designed to preserve. These latter principles cau- tion us against extending successorship, under the ban- ner of industrial peace, step by step to a point where the only connection between the two employing en- tities is a naked transfer of employees. Id., at 306-307 (emphasis supplied). See also Bargaining Obliga- tions, 88 Harv. L. Rev. at 763; Criteria, 11 Wake Forest L. Rev. at 457. Although normally a dissent may be considered weak support upon which to base an opinion, the dissent in Burns buttresses the soundness of the majority’s “full complement” requirement and its reliance on Section 9(a) of the Act for that proposition. Although the majority in Burns was not willing to set aside the successorship finding, it did so because it concluded that Burns’ employees, already operating at full complement, and shortly after having freely expressed their collective bargaining preference, were not being denied their rights under the Act. By requiring a full complement of employees, all employees to be affected by the Board’s actions were given a choice. The Board’s contention that the “full complement” requirement in Burns con- stitutes mere dicta which it is cavalierly free to disregard, is hardly an approach that this court should be eager to follow. See Pacific Hide ¢> Fur Depot, Inc. v. N.L.R.B., 553 F.2d 609 (9th Cir. 1977); N.L.R.B. v. Pre-Engineering Building Products, 603 F.2d 134 (10th Cir. 1979). A-25 In the present case the Board’s bureaucratic legalese deprives the employees of their right to express a free choice, a result totally contrary to the most fundamental purposes of the Act. It is, therefore, not entitled to enforcement. Beth Israel Hospital, supra. II In the seminal case of Universal Camera v. N.L.R.B., supra, the Court laid down the rule for review of Board actions by courts of appeal: Congress has ... made it clear that a reviewing court is not barred from setting aside a Board decision when it cannot conscientiously find that the evidence sup- porting that decision is substantial, when viewed in the light that the record in its entirety furnishes, in- cluding the body of evidence opposed to the Board’s view. 340 U.S. at 488. “The substantiality of the evidence must take into account whatever in the record fairly detracts from its weight.” Id. The cumulative impact of multiplication of minutiae cannot be regarded as substantia! evidence to support a finding by the Board. N.L.R.B. v. United Parcel Service, Inc., 317 F.2d 912, 914 (ist Cir. 1963). “Substantial evidence” means such rele- vant evidence as a reasonable mind might accept as adequate to support a conclusion. Coppus Engineering Corp. v. N.L.R.B., 240 F.2d 564, 570 (Ist Cir. 1957); N.L.R.B. v. Local 776, IATSE (Filia Editors), 303 F.2d 513, 517 n.3 (9th Cir. 1962), cert. denied, 371 U.S. 826 (1963). Such evidence, however, is not substantial if it appears in isolation rather than is viewed in proper perspec- tive. Id. Substantiality of evidence is measured by consideration of all the evidence and not merely that which supports the Board’s conclusions. M.R.¢, ) NLRB v. Burns International Security Services,Inc., i EEE ccc cceécecceocececceces STATUTES Labor Management Relations Act, as amended EE Ee ee se cece sc eseses Ul dO No. 85-1208 IN THE SUPREME COURT OF THE UNITED STATES OCTOBER TERM, 1985 FALL RIVER DYEING & FINISHING CORP., Petitioner, - against - NATIONAL LABOR RELATIONS BOARD, Respondent. REPLY BRIEF IN SUPPORT OF PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FIRST CIRCUIT THE PETITION FOR CERTIORARI SHOULD BE GRANTED BECAUSE THE CONFLICTING PRINCIPLES APPLIED BY THE NATIONAL LABOR RELATIONS BOARD OPERATE TO DEPRIVE EMPLOYEES AND THE EMPLOYER OF THEIR RIGHTS UNDER THE NATIONAL LABOR RELATIONS ACT. This case requires a reexamination of the successorship principles heretofore enun- ciated by this Court to ensure that statu- torily protected rights of employees and employers are not violated by principles and concepts adopted by the National Labor Relations Board. As has been previously noted, the former employees of Sterlingwale worked under a succession of collective bargaining agreements for approximately 30 years, involving the same Union, Local 292, the last of which expired April 1, 1982. The collective bargaining agreements contained Standard Union security provisions permitted by Section 8(a)(3) of the Labor Management Relations Act, as amended. As a result, any employee who had worked for Sterlingwale Since the Union was recognized, and any employee hired by Sterlingwale during the ensuing 30 years until its financial demise in the early spring of 1982 did not express their preference with regard to their choice of a bargaining representative. The Board's continuing demand theory in this case rests upon the presumption of majority status by the Union under the predecessor employer's ownership (Respon- dent's Brief, pp. 12-14). Petitioner urges that the Board's continuing demand concept is not applicable where the Union made its initial bargaining demand without majority Support, as is undisputedly the situation herein. The Board urges in its Brief (p. 13) that petitioner's reliance on Hedstrom Co. v. NLRB, 558 F.2d 1137 (3rd Cir. 1977), is misplaced. In Hedstrom, supra, the Court rejected the Board's concept, in an unfair labor practice context, reasoning that if it were adopted, the employer might be forced to violate Section 8(a)(2) of the Act by recognizing a minority union. The Board urges in its Brief (p. 13) that Hedstrom is not applicable to a successorship case and rests its argument on the analysis of the Court of Appeals hereinbelow (Pet. App. Al3- Al4). This, in turn, rests on the presump- tion of the Union's continued ntentes status. It is indeed difficult to reconcile this presumption under the facts of this case and in light of the holding of this Court in NLRB v. Burns International Security Services, Inc., 406 U.S. 272 (1972), at 295, with regard to "“succes- sorship" situations where the bargaining obligation cannot normally be determined at the time of transfer of ownership or when actual operations began. As the Supreme Court stated in Burns, supra, "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 as required by Section 9(a) of the Act...” This Court, in Burns, supra, and in all of its successorship decisions has noted that Section 9(a) of the Act establishs a strong public policy favoring free choice of a bargaining agent by the employees which should not be lightly frustrated or impinged upon. The concurrent application by the Board in the instant case of its presump- tions of dieksabenion of majority status and its continuing demand concept does just that. Those principles, when applied simultaneously, deprive employees, who have not expressed their desire with regard to Union representation for 30 years, of their right of free choice, and saddle the employer with the impossible choice hereto- fore noted by the Court in Hedstrom, supra. The Language of Chief Judge Campbell in his dissent in NLRB v. Band-Age, Inc., 534 F.2d 1 (lst Cir.), cert. denied, 429 U.S. 92i (1976) is appropriate. Judge Campbell stated: "The premise of the National Labor Relations Act is industrial democracy, requiring an enployer to bargain with the representative of a majority of its employees. This democratic principle must, of course, yield to practicality and the need for industrial peace, as rules limiting the frequency of elections illustrate. But such rules, presuming the continuity of majority sentiment, evolved within the frame of a single enterprise. While they may be appropriately extended to genuine successor entities, they should not apply where the original bargaining unit and nature of the enterprise have been radically altered. I fear that the enlargement of the successorship doctrine to accommno- date such a case may sweep aside the requirement that the Union has roots in the actual wishes of the employees. Here it would be simple to require an expression of the wishes of the 37 current loyees rather than to presume, oanaenet woodenly, that the earlier-expressed wishes of a different group of employees working for a different employer remain effective." 534 F.2d at 7 (citations omitted). In conclusion, it is respectfully submitted that the conflicting presumptions and concepts of the National Labor Relations Board, as applied in the successorship context herein, warrant review by this Court. CONCLUSION The petition for a writ of certiorari Should be granted. Respectfully Subinitted, LEAF STERNKLAR & DROGIN 440 Park Avenue South New York, New York 10016 (212) 685-8400 Attorneys for Petitioner Fall River Dyeing & Finishing Corp. Dated: April 23, 1986 JOINT APPENDIX OO EE eS ee ee ee . gg | ‘4\ | FILED | \9) AUG 11 1988 No. 85-1208 JOSEPH F. SPANIOL, dite CLERK __ Inthe Supreme Court of the Vette skes October Term, 1985 ray Vv FALL RIVER DYEING & FINISHING CORP., Petitioner, —against— NATIONAL LABOR RELATIONS BOARD, Respondent. fy. a ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FIRST CIRCUIT ray Vv JOINT APPENDIX sy. Vw Tra Droarn Cuar.es F'Rrep Lear STerNKLAR & Droctn Solicitor General 440 Park Avenue South Department of Justice New York, NY 10016 Washington, D.C. 20530 (212) 685-8400 (202) 633-2217 Attorneys for Petitioner Counsel for Respondent Petition for Writ of Certiorari filed January 16, 1986 Certiorari granted May 27, 1986 COCKLE LAW BRIEF PRINTING CO., (800) 835-7427 Ext. 333 i TABLE OF CONTENTS Page Chronological list of relevant docket entries 00000... oe Complaint 2 Respondent’s Answer 9 Administrative Law Judge’s Decision 0. *A-34 Respondent’s Exceptions to Decision and Order of Administrative Law Judge . 12 Decision and Order of National Labor Relations Board ...... ue A-31 Order of the Supreme Court of the United States Granting Certiorari wees | a Transcript of Hearing Testimony 00. 47 Witnesses : James Lenehan Direct ae 60 | ER ee 72 a 94 I a . 94 Seca at 117 Redirect wiiaileuatiniadstieciaibmcaadlatiaate . 148 Norman Rego Direct .. 150 = LE a .. 158 Reena 186 RE 169 eg ER ee 187 ESR i 218 General Counsel’s Exhibits a ls siheiittisdeaditiaiiiennns 238 i celetteeniteeniied 273 ID eeiissninsicsie anveenned 278 *This item was reproduced in the Petition for Writ of Certiorari. aon aS UN ey TABLE OF CONTENTS—Continued Aa Semmes ..nuw.«\/luaiian;,s A Deed 5 Page Docu- ment List of Employees List of Items —.. CT |, ee List with Total on Machinery List of Customers _... Contract Letter Amendment to Agreement a A Letter Letter Factor Sheet Respondent’s Exhibits l 2 Petition Petition .. d&2 CHRONOLOGICAL LIST OF RELEVANT DOCKET ENTRIES In the Matter of: Fall River Dyeing & Finishing Corp. Board Case No. 1-CA-20391 Date Documents 11.01.82 Charge 12.21.82 Complaint and Notice of Hearing 01.06.83 Respondent’s Answer 05.02.83 Hearing 01.27.84 Administrative Law Judge’s Decision 03.26.84 Respondent’s Exceptions to Decision and Order of Administrative Law Judge 10.19.84 Decision and Order 10.18.85 DECREE: The application for enforcement is granted and the order of the NLRB is hereby affirmed and enforced. Opinion of the Court by Rubin, J. and Dissenting Opinion by, Tor- ruella, J. Notices mailed. 11.12.85 Mandate issued, copy filed, taxation of costs filed. 01.27.86 Notice of filing Petition for Certiorari, (85- 1208) January 16, 1986. 06.02.86 Order of Supreme Court granting the Petition for Writ of Certiorari (85-1208) May 27, 1986. 2 UNITED STATES OF AMERICA BEFORE THE NATIONAL LABOR RELATIONS BOARD FIRST REGION CASE NO. 1-CA-20,391 In the Matter of FALL RIVER DYEING & FINISHING CORP. and UNITED TEXTILE WORKERS OF AMERICA, AFL-CIO, LOCAL 292 COMPLAINT AND NOTICE OF HEARING It having been charged by United Textile Workers of America, AFL-CIO, Local 292, 207 Union Avenue, Provi- dence, Rhode [sland (herein called the Union) that Fall River Dyeing & Finishing Corp., 160 Stevens Street, Fall River, Massachusetts (herein called Respondent) has been engaging in and is engaging in unfair labor practices af- fecting commerce as set forth and defined in the National Labor Relations Act, as amended, 29 U.S.C. See. 151, et seq. (herein called the Act) the General Counsel of the National Labor Relations Board (herein called the Board), on be- half of the Board, by the undersigned Acting Regional Di- rector, issues this Complaint and Notice of Hearing pur- suant to Section 10(b) of the Act and Section 102.15 of the Board’s Rules and Regulations, Series 8, as amended. 1. The Charge in this proceeding was filed by the Union on November 1, 1982 and a copy thereof served upon Respondent on November 2, 1982. 2. Respondent is and has been at all times material herein a corporation duly organized under and existing by virtue of the laws of the Commonwealth of Massachusetts. 3 3. At all times herein mentioned, Respondent has maintained its principal office and place of business at 160 Stevens Street, in the City of Fall River, and Common- wealth of Massachusetts (herein called the plant), and is now and continuously has been engaged at said plant in the business of dyeing, finishing and printing of textiles and related products. 4(a) Based upon a projection of its operations since on or about August, 1982 at which time Respondent com- menced its operations, Respondent, in the course and con- duct of its business operations described in Paragraph 3, will annually provide services valued in excess of $50,000 for customers located outside the Commonwealth of Massa- chusetts. (b) Based upon a projection of its operations since on or about August, 1982, at which time Respondent com- menced its operations, Respondent, in the course and con- duct of its business operations described above in Para- graph 3, will annually provide services valued in excess of $50,000 directly for enterprises located within the Com- monwealth of Massachusetts who themselves are directly engaged in interstate commerce. 5. The aforesaid Respondent is and has been engaged in commerce within the meaning of the Act. 6. The Union is a labor organization within the mean- ing of Section 2(5) of the Act. 7. At all times material herein, the following named persons occupied positions set opposite their respective names, and have been and are now agents of the Respon- dent, acting on its behalf, and are supervisors within the meaning of Section 2(11) of the Act. Arthur Friedman President Renee Kaban .... fee Pre 8 Treasurer George Spel berg ne cccccccccscccceccsemeeen Secretary Herbert Chace ... Vice President 8(a) Sterlingwale Corporation (hereinafter Sterling- wale) was a Massachusetts corporation maintaining a principal office and place of business at 168 Stevens Street in the City of Fall River, Commonwealth of Massachusetts and was engaged at said facility from at least 1968 until February of 1982 in the business of dyeing, finishing and printing of textiles. (b) On or about August, 1982 and at various times therealter, Respondent purchased the assets of Sterling- wale, including the real estate, equipment, and machinery, and since that date has been engaged in the same business operations, at the same location, selling the same product and/or service to substantially the same customers, and has as a majority of its employees individuals who were previously employees of Sterlingwale. 9. By virtue of the operations described above in Paragraph 8(b), Respondent has continued the employing entity and is a successor of Sterlingwale. 10(a) The following employees of Sterlingwale con- stitute a unit appropriate for the purposes of collective hargaining within the meaning of Section 9(b) of the Act: Ail production and maintenance employees at its Fall River, Massachusetts plant, including the electrician, electrician’s helper, and mechanics, but excluding all executives, office clerical and plant clerical employees, second hands, guards, professional employees and su- pervisors as defined in the Act. (b) The following employees of Respondent consti- tute a unit appropriate for the purposes of collective bar- gaining within the meaning of Section 9(b) of the Act: All production and maintenance employees at its Fall River, Massachusetts plant, including the electrician, electrician’s helper, and mechanics, but excluding all executives, office clerical and plant clerical employees, second hands, guards, professional employees and su- pervisors as defined in the Act. 11. Since on or about 1968, and at all times material herein, the Union has been the designated exclusive collec- tive-bargaining representative of Sterlingwale’s employees in the unit described above in Paragraph 10(a) and since said date the Union has been recognized as such representa- tive by Sterlingwale. Such recognition has been embodied in successive collective-bargaining agreements, the most recent of which is effective by its terms and amendments for the period April, 1978 to April 1, 1982. 12. At all times since 1968, the Union by virtue of Section 9(a) of the Act, has been, and is, the exclusive representative of Sterlingwale’s employees in the unit described above in Paragraph 10(a) for the purpose of collective bargaining with respect to rates of pay, wages, hours of employment and other terms and conditions of employment. 13. At all times since on or about August, 1982, and/ or at all times since on or about September 20, 1982, the Union has been the designated exclusive bargaining repre- sentative of Respondent’s employees in the unit described above in Paragraph 10(b), such status exists by virtue of Respondent’s status as a_ successor to Sterlingwale, as described above in Paragraphs 8 and 9, and by virtue of the Union’s status as designated exclusive bargaining rep- resentative, as described above in Paragraphs 10, 11, and 12, 14. At all times since on or about August 1982, and/ or at al! times since on or about September 20, 1982, the Union, by virtue of Section 9(a) of the Act, has been and is, the exclusive representative of the employees in the unit described above in Paragraph 10(b), for the purposes of collective bargaining with respect to rates of pay, wages, hours of employment and other terms and conditions of employment. 15. On or about October 19, 1982, by its International Representative, James Lenehan, the Union requested Re- spondent to bargain collectively in respect to rates of pay, wages, hours of employment, or other conditions of em- ployment with the Union as the exclusive representative of all the employees of Respondent in the unit described above in Paragraph 10(b). 16. On or about October 21, 1982, and at all times thereafter, Respondent did refuse and continues to refuse to meet and bargain collectively with the Union as the ex- elusive representative of all the employees in the unit described above in Paragraph 10(b). 17. By the acts described above in Paragraph 16, Re- spondent did engage in and is engaging in unfair labor practices within the meaning of Section 8(a)(5) of the Act. 18. By the acts described above in Paragraphs 16 and 17, and by each of said acts, Respondent did interfere wi.h, restrain and coerce, and is interfering with, restrain- ing and coercing its employees in the exercise of the rights guaranteed in Section 7 of the Act, and thereby did engage in and is engaging in unfair labor practices within the meaning of Section 8(a)(1) of the Act. 19. The activities of Respondent, described above in Paragraphs 16, 17, and 18, occurring in connection with the operations of Respondent, described above in Para- graphs 3 and 4, have a close, intimate, and substantial re- lation to trade, traffic and commerce among the several States and tend to lead to labor disputes burdening and obstructing commerce and the free flow of commerce. 20. The acts of Respondent, described above, consti- tute unfair labor practices affecting commerce within the meaning of Section 8(a)(1) and (5), and Section 2(6) and (7) of the Act. PLEASE TAKE NOTICE that on the 2nd day of May, 1983, at 11 o’clock in the forenoon, Eastern Dayiight Saving Time, at the Keystone Building, 12th Floor. 99 High Street, Boston, Massachusetts, a hearing will be con- ducted before a duly designated Administrative Law Judge of the National Labor Relations Board on the allegations set forth in the above Complaint, at which time and place you will have the right to appear in person, or otherwise, 8 and give testimony. Form NLRB-4668, Statement of Stan- dard Procedures in Formal Hearings Held Before the Na- tional Labor Relations Board in Unfair Labor Practice Cases, is attached. You are further notified that, pursuant to Section 102.20 and 102.21 of the Board’s Rules and Regulations, the Respondent shall file with the undersigned Acting Regional Director, acting in this matter as agent of the National Labor Relations Board, an original and four (4) copies of an Answer to said Complaint within ten (10) days from the service thereof and that unless it does so, all of the allegations in the Complaint shall be deemed to be admitted to be true and may be so found by the Board. Immediately upon the filing of its Answer, Respondent shall serve a copy thereof on each of the other parties. WHEREFORE, the General Counsel of the National Labor Relations Board, on behalf of the Board, by the Act- ing Regional Director for the First Region, on this 21st day of December, 1982, issues this Complaint and Notice of hearing against Fall River Dyeing & Finishing Corp., Respondent herein. /s/ Michael F. Walsh Acting Regional Director National Labor Relations Board First Region Boston, Massachusetts ae ae 9 UNITED STATES OF AMERICA BEFORE THE NATIONAL LABOR RELATIONS BOARD FIRST REGION CASE NO. 1-CA-20, 391 IN THE MATTER OF: FALL RIVER DYEING & FINISHING CORP. —and— UNITED TEXTILE WORKERS OF AMERICA, AFL-CIO, LOCAL 292 ANSWER . Respondent admits the allegations contained in Para- graph 1. . Respondent admits the allegations contained in Para- graph 2. 3. Respondent admits the allegations contained in Para- graph 3. . (a) Respondent admits the allegations contained in Paragraph 4 (a) with the exception that Respon- dent did not commence operations until October, 1982. (b) Respondent admits the allegations contained in Paragraph 4 (b) with the exception that Respon- dent did not commence operations until October, 1982. _ Respondent is without knowledge as to the truth of the allegations contained in Paragraph 5. v. 10. 11. 12. 13. 14. 15. 10 Respondent is without knowledge as to the truth to the allegations contained in Paragraph 6. Respondent admits the allegations contained in Para- graph 7. (a) Respondent is without knowledge as to the truth of the allegations contained in Paragraph 8 (a). (b) Respondent denies the allegations contained in Paragraph 8 (b). Respondent denies the allegations contained in Para- graph 9. (a) Respondent is without knowledge of the truth of the allegations contained in Paragraph 10(a). (b) Respondent denies the allegations contained in Paragraph 10(b). Res « - is without knowledge of the allegations corty o' » Paragraph 11. Resp. is without knowledge of the allegations contained in Paragraph 12. Respondent denies the allegations contained in Para- graph 13. Respondent denies the allegations contained in Para- graph 14. Respondent admits the allegations contained in Para- graph 15 but states that the request referred to was based not on an alleged status of Respondent as a ‘*suecessor’’ but upon language allegedly contained in a purported collective bargaining agreement be- 11 tween one ‘‘Sterlingwale Corporation’’ and the Com- plainant. 16. Respondent admits the allegations contained in Para- graph 16. 17. Respondent denies the allegations contained in Para- graph 17. 18. Respondent denies the allegations contained in Para- graph 18. 19. Respondent denies the allegations contained in Para- graph 19. 20. Respondent denies the allegations contained in Para- graph 20. WHEREFORE, Respondent demands that the Com- plaint be dismissed. 21. Further answering, Respondent specifically denies that it is a successor and that it is under any legal obliga- tion to recognize or bargain with the Complainant. FALL RIVER DYEING & FINISHING CORP. By Its Attorney, /s/ James W. Clarkin, Esq. P.O. Box 2542 257 North Main Street Fall River, MA 02720 (617) 673-9191 January 4, 1985 (Certificate of Service omitted in printing.) BEFORE THE NATIONAL LABOR RELATIONS BOARD Region One Case # 1-CA-20,391 In the Matter of: FALL RIVER DYEING & FINISHING CORP. -and- UNITED TEXTILE WORKERS OF AMERICA, AFL-CIO, LOCAL 292 RESPONDENT’S EXCEPTIONS TO DECISION AND ORDER OF ADMINISTRATIVE LAW JUDGE arc aa + cate, 13 TABLE OF CONTENTS Page I. STATEMENT OF THE CASE 2 If. QUESTIONS INVOLVED AND TO BE ARGUED 16 A. Was there a substantial continuity of the employing enterprise between Sterlingwale and respon- dent such as to make respondent a successor to Sterling- wale? B. What is the effect of the seven month Hiatus in operations between the closure of Sterlingwale and the commencement of operations or respondent on the question of successorship and on the question of the bargaining if any of respondent? C. If respondent is considered to be a successor to Sterlingwale, at what point of time is the measure- ment to be made for measuring the percentage of for- mer employees of Sterlingwale in the employ of respon- dent? i Respondent should not have been ordered to bargain with the Union because respondent did not employ a majority of Sterlingwale’s former employees at the appropriate measuring time III. CONCLUSION IV. TABLE OF CASES 17 27 30 35 36 14 BEFORE THE NATIONAL LABOR RELATIONS BOARD Region One Case # 1-CA-20,391 In the Matter of: FALL RIVER DYEING & FINISHING CORP. -and- UNITED TEXTILE WORKERS OF AMERICA, AFL-CIO, LOCAL 292 RESPONDENT’S EXCEPTIONS TO DECISION AND ORDER OF ADMINISTRATIVE LAW JUDGE LEAF DEULL DROGIN & KRAMER Attorneys for Respondent 730 Third Avenue New York, NY 10017 (212) 573-9200 15 BEFORE THE NATIONAL LABOR RELATIONS BOARD Region One _ Case # 1-CA-20,391 In the Matter of: FALL RIVER DYEING & FINISHING CORP. -and- UNITED TE [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_IA40385012_1182%3A0. Public record. Not legal advice.