Appendix — Road Sprinkler Fitters Local Union No. 669 v. "Automatic" Sprinkler Corp. of America

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a Supreme Court, u.s

oy FILED

92 1249 Jan 28 1998

No. , OFFICE OF THE Ciénx

IN THE

Supreme Court of the United States

OCTOBER TERM, 1997

ROAD SPRINKLER FITTERS LOCAL UNION NO. 669, UNITED

ASSOCIATION OF JOURNEYMEN AND APPRENTICES OF THE

PLUMBING AND PIPE FITTING INDUSTRY OF THE UNITED

STATES AND CANADA, A.F.L.-C.I.0.,

Petitioner,

Vv.

“AUTOMATIC” SPRINKLER CORPORATION OF AMERICA AND

FIGGIE INTERNATIONAL, INC.,

AND

NATIONAL LABOR RELATIONS BOARD,

Respondents.

Petition for a Writ of Certiorari to the

United States Court of Appeals

For the Sixth Circuit

APPENDIX TO

PETITION FOR A WRIT OF CERTIORARI

WILLIAM W. OSBORNE, JR.,

(Counsel of Record)

MARC D. KEFFER

One Thomas Circle, N.W.

Washington, D.C. 20005

(202) 955-3800

LAURENCE GOLD,

1000 Connecticut Avenue, N.W.

Washington, D.C. 20036

INDEX OF APPENDICES

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APPENDIX A

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

Nos. 95-6599; 96-5159

"AUTOMATIC" SPRINKLER CORPORATION OF AMERICA AND

FIGGIE INTERNATIONAL INC.,

Petitioners/Cross-Respondents,

versus

NATIONAL LABOR RELATIONS BOARD,

Respondent/Cross-Petitioner,

and

ROAD SPRINKLER FITTERS LOCAL

UNION NO. 669, U.A., AFL-CIO,

Intervenor.

On Petition for Review and Cross-Application

for Enforcement of an Order of

the National Labor Relations Board

Argued December 5, 1996 Decided July 29, 1997

Before WELLFORD, RYAN, and SILER, Circuit Judges

Donald F. Woodcock (Todd F. Palmer on brief) for Petitioner;

David Seid, Attorney, National Labor Relations Board (Peter

;

Winkler, Attorney, National Labor Relations Board on brief)

for Respondent; William W. Osborne, Jr., for Intervenor.

SILER, Circuit Judge:

Figgie International Inc. ("Figgie") and "Automatic"

Sprinkler Corporation of America ("Automatic"), a division of

Figgie (collectively, "Petitioners"), petition this court to review

the Decision and Order by the National Labor Relations Board

("NLRB" or "the Board") finding that Petitioners violated

section 8(a)(1), (5), and (3) of the National Labor Relations Act

("the Act"), 29 U.S.C. § 158(a)(1), (5), and (3), by

subcontracting bargaining unit work and discriminatorily

laying off their employees represented by the unions and by

refusing to bargain with the unions that had bargaining status

over the decision to subcontract unit work as well as over

successor collective bargaining agreements. The NLRB filed a

cross-application for enforcement of its Order, and Road

Sprinkler Fitters Local Union No. 699 ("Local 699") intervened

in this action on the side of the NLRB. For reasons stated

herein, we will VACATE the Order of the Board and DENY its

enforcement.

Automatic is engaged in the design, fabrication, and

installation of automatic fire protection systems. For many

years it employed members of Local 669 as well as members

of eleven other urban autonomous unions -namely Local 120,

Local 281, Local 314, Local 483, Local 536, Local 542, Local

676, Local 692, Local 696, Local 699, and Local 709 --to

install these systems.’ Through its membership in a

multi-employer association of sprinkler installation contractors,

'Local 699 and the other unions mentioned belong to the United

Association of Journeymen and Apprentices of the Plumbing and Pipe

Fitting Industry of the United States and Canada.

PONY onl an

the National Fire Sprinkler Association ("NFSA"), Automatic

had successive collective bargaining agreements with the

unions for many years. The expiration dates of the agreements

ranged from July 31, 1993 to June 30, 1995. With the exception

of Automatic's agreement with Local 483, all of the collective

bargaining agreements contained a provision permitting

subcontracting of work to employers who were signatories to

the respective local agreements.

In recent years, Automatic had been experiencing financial

difficulties. Each year officers and representatives of Figgie

and Automatic held meetings to review past company

performances and plan for the future. The annual meetings

resulted in “hardcore” plans, which are five-year budget

projection plans that were modified, updated, and extended

yearly. At the annual meeting held in November 1992, the

officers and representatives agreed to a plan (the "Neutral

Plan"), in which Automatic would become a general contractor

and would subcontract out all sprinkler fitter work upon the

expiration of its collective bargaining agreements with the

unions by August 31, 1995.

The Neutral Plan was expected to result in various benefits,

including: gaining control of labor costs; elimination of

negotiations with unions and the cost of grievances;

minimization of excessive labor costs on some contracts;

reduction of administrative labor costs and vehicle costs;

elimination of road tool costs; ability to bid both union and

non-union projects; and entrance into the residential market.

Automatic withdrew its membership in NFSA by a letter

dated February 10, 1993. On the following day, it sent letters

to the local unions representing Automatic sprinkler fitters

notifying them of the withdrawal. These letters did not mention

the Neutral Plan. Automatic thereafter increased its

subcontracting, but limited it to contractors that had collective

bargaining agreements with the unions as required under its

agreements with the unions.

On May 26, 1993, Automatic gave Local 483 and Local

709 notice of termination of the collective bargaining

agreements effective August 1, 1993 and September 1, 1993,

respectively, pursuant to the terms of the agreements. On

January 28, 1994, Automatic notified the remaining unions of

its intent not to renew the collective bargaining agreements and

of its decision to fundamentally change the nature of its

business by becoming a general contractor, whereby it would

no longer employ persons represented by the unions in the

installation, alteration, maintenance, repair and service of fire

control systems. In each of the January 28 letters, Automatic

assured the unions that it would negotiate with them in good

faith concerning its business decision. The ensuing exchanges

between Automatic and the unions varied. The Board found

that Automatic refused to negotiate successor bargaining

agreements with any of the unions.

Between August 17, 1993 and May 12, 1994, Automatic

met with many of the unions to discuss its subcontracting

decision. By April 1, 1994, Automatic laid off all of its

sprinkler fitter employees, and by June 30, 1994, it liquidated

substantially all of its construction vehicles, tools, and

equipment formerly used to perform labor work on its sprinkler

installation operations. Since that time, Automatic has

subcontracted virtually all of its labor work to entities that have

signed current collective bargaining agreements with the

unions.

Between August 1993 and May 1994, the unions filed

unfair labor charges with the NLRB against Petitioners. After

conducting a hearing on this matter, an Administrative Law

Judge ("ALJ") found against Petitioners. On October 25, 1995,

the Board affirmed the rulings, findings, and conclusions of the

ALJ.

IT.

We accept the Board's factual findings if supported by

substantial evidence on the record as a whole. 29 U.S.C. §

160(f); YHA, Inc. v. NLRB, 2 F.3d 168, 172 (6th Cir. 1993). We

also review the Board's application of law to particular facts

under the substantial evidence standard, but review the Board's

conclusions of law de novo. NLRB y. Pentre Elec., Inc., 998

F.2d 363, 368 (6th Cir. 1993). If the Board erred in determining

the proper legal standard, we may refuse enforcement of the

Board's order on the ground that it has no "reasonable basis in

law." /d.; NLRB v. Brown, 380 U.S. 278, 291-92, 13 L. Ed. 2d

839, 85 S. Ct. 980 (1965) (requiring reviewing courts to set

aside interpretations of the Act by the Board that are

inconsistent with statutory mandate, frustrate congressional

policy or rest on an erroneous legal foundation). We review de

novo the Board's interpretation of contract terms. Gratiot

Community Hosp. v. NLRB, 51 F.3d 1255, 1261 (6th Cir.

1995).

In reviewing the Board's interpretation of the NLRA, we

adhere to the standard of review established by Holly Farms

Corp. v. NLRB, _U.S.__, 116 S. Ct. 1396 (1996). NLRB

v. Webcor Packaging, Inc., 118 F.3d 1115 (6th Cir. July 11,

1997).

Under this standard, our first task is to determine

"whether Congress has directly spoken to the precise

question at issue." [Chevron U.S.A. Inc. v. Natural

Resources Defense Council, Inc., 467 U.S. 837, 842

(1984).] If Congress has done so, we must give effect

to its expression. /d. at 842-43. If not, however, "the

question for the court is whether the agency's answer is

based on a permissible construction of the statute." Id.

at 843. Accord Holly Farms, 116 S. Ct. at 1406.

Webcor, slip op. at 6 (footnote omitted.)

Il.

Under section 8(a)(5) of the Act, an employer commits an

unfair labor practice by refusing to bargain collectively with its

employees’ representatives in good faith concerning "wages,

hours, and other terms or conditions of employment." 29

U.S.C. § 158(a)(5). An employer violates section 8(a)(1) and

(5) of the Act if it takes unilateral action regarding a mandatory

subject of bargaining without first bargaining to impasse.

Taylor Warehouse Corp. v. NLRB, 98 F.3d 892, 901 (6th Cir.

1996).

An employer's decision to subcontract work is considered

a statutory subject of collective bargaining when it involves

"the replacement of employees in the existing bargaining unit

with those of an independent contractor to do the same work

under similar conditions of employment." See Fibreboard

Paper Prods. v. NLRB, 379 U.S. 203, 215, 13 L. Ed. 2d 233, 85

S. Ct. 398 (1964). The Board found that Petitioners’

subcontracting decision was a mandatory subject of bargaining

because they in effect substituted the subcontractors’ employees

for their own. Petitioners contend, however, that because

subcontracting was already a subject covered by the collective

bargaining agreement, further bargaining on that subject was

foreclosed. We find, contrary to the arguments of the Board

and the union intervenor, that Petitioners raised the issue of

their contractual right to subcontract in their submission to the

Board and that this important issue is before us on appeal. It is

not subsumed by claims of anti-union motivation.

When an employer and union bargain about a subject

and memorialize that bargain in a collective bargaining

agreement, they create a set of rules that govern their

future relations. Unless the parties agree otherwise,

there is no continuous duty to bargain with respect to a

matter covered by the contract. Thus, we are bound to

enforce lawful labor agreements as written.

Gratiot Community Hosp., 51 F.3d at 1261 (citing NLRB v.

United States Postal Serv., 8 F.3d 832, 836 (D.C. Cir. 1993)).

See also United Mine Workers of Am. v. NLRB, 879 F.2d 939,

RS eae ae

;

942-44 (D.C. Cir. 1989) (holding that provisions on

subcontracting in collective bargaining agreement satisfied

company's statutory duty to bargain over the subject of

subcontracting).

Here, Petitioners and the unions bargained over the subject

of subcontracting and they memorialized that bargain in their

respective collective bargaining agreements. This bargain

permitted Petitioners to contract out work as long as it was to

a contractor who had a collective bargaining agreement with

the local union. Because the collective bargaining agreements

contained no language providing for subsequent bargaining

during the term of the agreements with respect to the

subcontracting of work, the Board had no authority to compel

Petitioners to bargain with the unions over that subject. See

United Mine Workers, 879 F.2d at 943 (""[W]hile the Board has

the authority to compel enforcement of terms of a negotiated

agreement, it cannot compel enforcement of terms that are not

contained in that agreement.")(quoting Hyatt Management

Corp. v. NLRB, 817 F.2d 140, 143 (D.C. Cir. 1987)) (citing

H.K. Porter Co. v. NLRB, 397 U.S. 99, 102, 25 L. Ed. 2d 146,

90 S. Ct. 821 (1970)).

The Board likewise lacked the authority to order Petitioners

to reinstate the subcontracted operations that employees

represented by the union formerly performed and to reinstate

with back pay all employees who were terminated as a result of

the permissible subcontracting. The Board is not authorized to

"compel concessions or otherwise sit in judgment upon the

substantive terms of collective bargaining agreements." United

Mine Workers, 879 F.2d at 943 (quoting H.K. Porter, 397 U.S.

at 106); see also United States Postal Serv., 8 F.3d at 836

(stating that a lawful agreement may not be abrogated by the

Board or by the courts merely because one party is unhappy

with a term of the contract).

In Gratiot Community Hospital, 51 F.3d at 1260, the Sixth

Circuit considered the issue of whether a hospital violated

section 8(a)(5) of the Act by failing to bargain with the union

over the hospital's elimination of a staffing procedure called the

"7/70" program by reducing the nursing staff teams to zero.

The relevant provision in the collective bargaining agreement

read as follows:

Assignments to the Seventy Hour Shift will be made by

the Director of Nursing in cooperation with the

employees involved. The Director of Nursing will

decide the number of assignments and the work areas

that will be under the Seventy Hour Shift. . . .

Id.

Due to severe financial losses, the hospital unilaterally

eliminated the 7/70 program as one of its several cost-cutting

measures. Jd. at 1257-58. As a result, some nurses were laid off

or bumped to part-time positions, thereby losing their health

benefits. /d. at 1258.

This court disagreed with the ALJ's conclusion that

although the collective bargaining agreement permitted the

hospital to determine the specific number of assignments to the

7/70 program, it neither stated nor implied that the hospital

could unilaterally abolish the program altogether. Jd. at 1261.

Instead, we found that the actions by the hospital did not

violate the Act because the language in the collective

bargaining agreement clearly and unambiguously granted the

hospital the authority to determine the number of shifts,

including zero, in the 7/70 program. Jd.

Similarly, the language in the collective bargaining

agreements in the present case unambiguously granted

Petitioners the authority to subcontract work, without

limitation, provided it was to contractors that had agreements

with the unions. During the term of the agreements, Petitioners

See AL ile 61s Ep AE RAF EE Rew HE ME ites say On

restricted their subcontracting to union contractors. As

mentioned above, we are bound, as is the Board, to enforce the

lawful labor agreements between Petitioners and the unions as

written. By determining that Petitioners violated section 8(a)(5)

by refusing to bargain with the unions concerning their decision

to subcontract to union signatories during the term of the

agreements, the Board has refused to give meaning and effect

to the parties’ contractual provisions concerning subcontracting.

Such a determination frustrates one of the fundamental policies

of the Act: the freedom of contract. See United Mine Workers,

879 F.2d at 943.

- Furthermore, according to the ALJ, the "agreements were

terminated." Neither the ALJ nor the Board determined that the

agreements with the eight local unions that had section 9(a)

bargaining status -- Locals 669, 692, 536, 281, 314, 699, 483,

and 709° -- were ineffectively terminated either under the

?The unions maintained that Petitioners subcontracted during

the terms of certain collective bargaining agreements with several nonunion

subcontractors, but the ALJ found to the contrary where his decision shows

that after Automatic withdrew its membership in NFSA, it "increased its

subcontracting but apparently restricted it to union employers signatory to

the union's collective bargaining agreements with NFSA" and that it "had

carefully avoided any overt subcontracting to nonunion employers prior to

its January 28, 1994 notice of intention to destroy all its union sprinkler

fitter units as circumstances permitted, i.e., contract terminations." ALJ

Decision (Dec. 30, 1994), reprinted in "Automatic" Sprinkler Corp. of Am.,

319 N.L.R.B. No. 57, 1995 WL 630836, at *4, *9, *25 (Oct. 25, 1995).

These findings are not clearly erroneous.

3As the Board noted, because Locals 120, 542, 676, and 696

maintained a section 8(f) relationship with Automatic, Automatic was

permitted to repudiate that relationship upon expiration of the agreements.

See John Deklewa & Sons, 282 N.L.R.B. 1375 (1987), enforced sub nom.

International Assn. of Bridge, Structural & Ornamental Iron Workers,

Local 3 v. NLRB, 843 F.2d 770 (3d Cir.), cert. denied, 488 U.S. 889 (1988).

10a

contracts’ terms* or under the Act.°

‘Each agreement contains a “duration of agreement" provision

along with provisions concerning the renewal of the agreement that can be

interpreted as giving to either party the right to terminate the agreement

provided certain notice requirements are met. Petitioners provided adequate

and timely notice to each of the unions of their intent to terminate the

collective bargaining agreements. See New York News Inc. v. Newspaper

Guild of New York, 927 F.2d 82, 84 (2d Cir. 1991) (upholding district

court's determination that employer properly terminated collective

bargaining agreement pursuant to its terms when it sent union written notice

of termination after expiration of the agreement); see also International

Brotherhood of Elec. Workers, Local 26 v. Advin Elec., Inc., 98 F.3d 161,

164-65 (4th Cir. 1996) (finding letters sent by employer to union indicating

its desire to terminate the collective bargaining agreement upon its

expiration effectively terminated agreement).

*Section (8)(d) of the Act states:

The duty to bargain collectively shall also mean that no party to [a

collective bargaining] contract shall terminate . . . such contract

unless the party desiring such termination . . .

(1) serves a written notice upon the other party to the

contract of the proposed termination . . . sixty days prior

to the expiration date thereof, . . .;

(2) offers to meet and confer with the other party for the

purpose of negotiating a new contract . . .;

(3) notifies the Federal Mediation and Conciliation

Service within thirty days after such notice of the

existence of a dispute, and simultaneously therewith

notifies [any similar state agencies]; and

(4) continues in full force and effect . . . all the terms and

conditions of the existing contract for a period of sixty

days after such notice is given or until the expiration date

of such contract, whichever occurs later:

29 U.S.C. § 158(d)(1)-(4). Petitioners served timely written notice upon

each union of the proposed termination, and they also offered to meet and

confer with the unions, although apparently not for the purpose of

negotiating a new contract. Additionally, Petitioners complied with the

fourth requirement. Subcontracting was limited to union signatories during

the term of the agreements and the Plan did not call for the contracting out

lla

Although when a collective bargaining agreement expires,

an employer has a continuing duty to bargain in good faith and

maintain the status quo as to conditions of employment in the

expired t, see Alaska Trowel Trades Pension Fund v.

Lopshire, 103 F.3d 881, 883 (9th Cir. 1996), it has no such

absolute duty at the agreement's termination. Cf Derrico v.

Sheehan Emergency Hosp., 844 F.2d 22, 26-27 (2d Cir. 1988)

("Rights and duties under a collective bargaining agreement do

not otherwise survive the contract's termination at an agreed

expiration date.") Thus, when the collective bargaining

agreements between Petitioners and the unions with section

9(a) bargaining status terminated, rather than merely expired,

upon their respective expiration dates, and because the

agreements did not provide otherwise, Petitioners were

relinquished of any contractual or statutory obligations to the

unions. They cannot now be forced to negotiate new

agreements with the unions or be prohibited from engaging in

nonunion subcontracting. As the Supreme Court has stated,

"The act does not compel agreements between employers and

employees. It does not compel any agreement whatever. It does

not prevent the employer ‘from refusing to make a collective

contract or hiring individuals on whatever terms' the employer

‘may by unilateral action determine." NLRB v. Jones &

Laughlin Steel Corp., 301 US. 1, 45, 81 L. Ed. 893, 57 S. Ct.

615 (1937).

The Board relies principally upon Fibreboard Paper

Products Corp. v. NLRB, 379 U.S. 203, 85 S. Ct. 398, 13 L.

Ed. 2d 233 (1964), for its position. That case involved an

employer's decision which did not change its basic operations.

The employer simply decided, inside its plant, to subcontract

out its maintenance work to save costs. There was nothing in

the collective bargaining agreement about the employer's ni ght

of work until after the agreements were terminated. The record does not

mention whether notification was given to the Federal Mediation and

Conciliation Service.

12a

to subcontract. There was no intimation whether the

subcontract was, or was not, a union company. These facts and

distinctions clearly make Fibreboard distinguishable from

those of the instant case. The narrow question was whether

mandatory bargaining on this "type of subcontracting out

decision" was indicated; the decision did "not encompass other

forms of ‘contracting out' or 'subcontracting." /d. at 215.

The Company's decision to contract out the

maintenance work did not alter the Company's basic

operation. The maintenance work still had to be

performed in the plant. No capital investment was

contemplated; the Company merely replaced existing

employees with those of an independent contractor to

do the same work under similar conditions of

employment.

Id. at 213.

As put by Justice Stewart in his concurring opinion in

Fibreboard, the question of whether an employer fulfilled its

duty to bargain over its subcontracting decisions "goes to the

scope of the employer's duty in the absence of a collective

bargaining agreement." Jd. at 219 (Stewart, J., concurring). In

our case, of course, there was a collective bargaining agreement

hammered out by the parties, expressly setting out the

employer's right to subcontract.

The later Supreme Court authority, First National

Maintenance Corp. v. NLRB, 452 U.S. 666, 69 L. Ed. 2d 318,

101 S. Ct. 2573 (1981), is more pertinent to our case. In the

latter case, the employer's decision involved "a change in the

scope and direction of the enterprise . . . akin to the decision

whether to be in business at all." Jd. at 677. The Court

determined in that case that the employer's decision to cut back

and terminate certain union employees, a partial layoff, was not

an unfair labor practice under the circumstances.

13a

We conclude that the harm likely to be done to an

employer's need to operate freely in deciding whether

to shut down part of its business purely for economic

reasons outweighs the incremental benefit that might be

gained through the union's participation in making the

decision, and we hold that the decision itself is not part

of § 8(d)'s "terms and conditions,” . . . .

eT ata

Id. at 686 (footnotes omitted). To be sure, neither Fibreboard

nor First National involved the case where, as here, the

employer and the local unions had already bargained and

provided for the specific right to subcontract or to layoff for

economic reasons.

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This court has pointed out the pertinent language from the

Supreme Court decisions on this issue:

Despite the importance of give and take between

management and labor on many issues, Congress has

required mandatory bargaining on matters concerning

only "wages, hours, and other terms and conditions of

employment.” First Nat'l, 452 U.S. at 674 . . . (quoting

§ 158(d)).

Congress did not intend to mandate bargaining over

every conceivable issue arising between management

and labor. "The National Labor Relations Act does not

say that the employer and employees are bound to

confer upon any subject which interests either of them;

the specification of wages, hours, and other terms and

conditions of employment defines a limited category of

issues subject to compulsory bargaining.” Fibreboard

Paper Prods. Corp. v. NLRB, 379 U.S. 203, 220, 13 L.

Ed. 2d 233, 85 S. Ct. 398 . . . (1964) (Stewart, J.,

concurring).

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NLRB v. Plymouth Stamping Div., Eltec Corp., 870 F.2d 1112,

1115 (6th Cir. 1989).

;

14a

None of the cases cited by the Board involves a contractual

right to subcontract, which is the distinguishable feature in this

controversy. We believe the Board was in error in requiring the

employer to renegotiate or bargain over a part of the

agreed-upon collective bargaining agreement.

Accordingly, we refuse enforcement of the Board's Order

on the issue of Petitioners’ duty to bargain.

IV.

Under section 8(a)(1) and (3) of the Act, it is an unfair labor

practice for an employer "by discrimination in regard to hire or

tenure of employment or any term or condition of employment

to encourage or discourage membership in any labor

organization.” 29 U.S.C. § 158(a)(3).

The initial burden of establishing a section 8(a)(3) violation

is on the Board. NLRB v. Kentucky May Coal Co., 89 F.3d

1235, 1241 (6th Cir. 1996). Once the Board demonstrates that

Petitioners’ anti-union animus contributed to the employee's

discharge, the burden shifts to the employer to prove by a

preponderance of the evidence that there were independent,

legitimate reasons for the decision and that the adverse action

would have occurred in any event for those reasons. Turnbull

Cone Baking Co. of Tenn. v. NLRB, 778 F.2d 292, 296 (6th Cir.

1985), cert. denied, 476 U.S. 1159, 90 L. Ed. 2d 720, 106 S. Ct.

2277 (1986).

The Board in the present case found the benefits expected

to result from the Neutral Plan -- gaining control of labor costs,

eliminating labor negotiations, eliminating costs associated

with union grievances, and allowing Automatic to become

competitive against non-union contractors -- to be direct

evidence that Petitioners’ actions of subcontracting unit work

and discharging unit employees were motivated by anti-union

animus. Petitioners also expected the Neutral Plan to result in

the reduction of vehicle costs, the elimination of road tool

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costs, and entrance into the residential market. Those are

legitimate reasons for the decision to adopt the Plan as is the

desire to fundamentally change the nature of Automatic's base

business from construction to service. In spite of that evidence,

however, the ALJ found that Petitioners failed to carry the

burden of proving by a preponderance of the evidence that the

adverse action would have occurred in the absence of union

representation of their employees.

Regardless of whether Petitioners have met their burden,

their actions were justified under the subcontracting provisions

of the parties’ collective bargaining agreement. Therefore, the

Board's determination that Petitioners unlawfully discriminated

against the unions by subcontracting in accordance with the

terms of the collective bargaining agreement is legally

erroneous. See Jronton Publications, Inc. v. NLRB, 73 F.3d 362

(Table), 1995 WL 758448, at *5, *6 (6th Cir. 1995)

(unpublished) (holding legally erroneous a_ Board's

determination that a company discriminated against an

employee in violation of section 8{a)(1) and (3) of the Act

when, after learning that he had become a union member, the

company began to pay the employee according to the terms of

the collective bargaining agreement).

Therefore, we also deny enforcement of the Board's order

on the issue of Petitioners' discrimination against the unions.

The Order of the Board is VACATED and the Board's

petition to enforce its Order is DENIED.

RYAN, Circuit Judge, concurring in part and dissenting in part.

“I.

While I agree entirely with the conclusion reached in part

l6a

Ill. of the majority opinion holding that the Board erred "in

requiring the employer to renegotiate or bargain" over the

employer's decision to subcontract installation, maintenance,

and repair work, as permitted by the collective bargaining

agreement, I do not agree with some of my brother's reasoning

in reaching that conclusion. Specifically, I do not agree with

the all-important statement in part III. of my brother's opinion:

While parties have a continuing duty to bargain in good

faith after the expiration of a collective bargaining

agreement, there is no such duty at the agreement's

termination. Thus, when the collective bargaining

agreements between Petitioners and the unions with

9(a) bargaining status terminated, rather than merely

expired, upon their respective expiration dates, and

because the agreements did not provide otherwise,

Petitioners were relinquished of any contractual or

Statutory obligations to the unions. (Emphasis added.)

To me, there is no meaningful distinction between the

"expiration" of the collective bargaining agreement and its

"termination" in the context of this case. And, while there was

no duty to bargain over "Automatic"'s decision to subcontract

to unionized workers the maintenance, repair, and installation

work it formerly did in-house, the absence of the duty arises

from the terms of the collective bargaining agreement, and not

from any supposed distinction between the "expiration" of the

agreement and its "termination."

Il.

More importantly, I have serious disagreement with the

analysis and the conclusion reached in part IV. of the majority

opinion. In that part of the opinion, the majority rejects the

conclusion of the NLRB that "Automatic" is guilty of a

violation of section 8(a)(3) for having committed an unfair

labor practice "by discriminating in regard to hire or tenure of

employment or any term or condition of employment to

;

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17a

encourage or discourage membership in any labor

organization." 29 U.S.C. § 158(a)(3). In that conclusion, I

think my colleagues are mistaken.

While I have considerable doubt that the NLRB correctly

concluded that "Respondent violated section 8(a)(3) of the Act

by subcontracting the unit work and discriminatorily laying off

the unit employees," (emphasis added), I have no doubt

whatever that this court has no authority to vacate that decision.

It has none because our standard of review is whether there is

substantial evidence in the record to support the finding that

"Automatics decision to subcontract its installation,

maintenance, and repair work--a decision permitted by the

collective bargaining agreement if not done

discriminatorily--was, in fact, "motivated by antiunion animus"

with the "ultimate intent" of ridding the company of a

unionized workforce.

The ALJ reached that conclusion in the course of a 41-page,

single-spaced written opinion which developed, in very

considerable detail, the ALJ's basis for crediting the testimony

of the union's witnesses, and discrediting the testimony of the

employer's witnesses. And, while I have considerable doubt

whether, had I been the statutorily designated fact finder, I

would have made the credibility determinations the ALJ did, I

have no doubt that, given his assessment of the credibility of

the witnesses, there is substantial evidence justifying the

conclusion that the employer's subcontracting decision was, in

fact, discriminatory, and not, as the ALJ put it, for the "pure as

driven snow" reasons claimed by the employer.

There can be no question that "Automatic" did not commit

an unfair labor practice under section 8(a)(3) simply by

exercising its right guaranteed in the collective bargaining

agreement to subcontract installation, repair, and maintenance

work to unionized workers, and to eliminate that work

in-house. Only if that action is taken with a "discriminatory

intent," and for a purpose proscribed by section 8(a)(3), would

18a

the otherwise unassailable business decision become an unfair

labor practice, and that, according to the ALJ and the Board, is

precisely what happened. The otherwise neutral act of

subcontracting, as permitted by the collective bargaining

agreement, became an unfair labor practice, because it was,

according to the ALJ, a carefully orchestrated, ill-concealed,

two-stage program motivated, primarily, by union animus, and

designed to rid the company of the financial burden of a

unionized workforce. In support of that conclusion, the ALJ

found, inter alia:

{"Automatic"'s] conduct was motivated by antiunion

animus and violated Section 8(3) of the Act with

respect to all of the affected employees represented by

all the Charging Unions, whether represented pursuant

to a Sec. 9(a) or 8(f) arrangement.

Additionally,

Pro-Forma III-A in its first three pages is far more

revealing concerning ["Automatic™'s] intentions. . . .

This change will provide us [("Automatic")]

the following benefits:

Gain control of labor costs on projects[;]

Minimizes the risk potential for labor cost

overruns on contracts [;]

Not signatory to any union contract, its pay

demands and its work rules|;]

Eliminate labor negotiations|;]

Eliminate costs associated with union

grievances| ; |

Further,

Pro Forma III-A clearly demonstrates ["Automatic"'s]

dislike of the restrictions imposed on it by union

representation of its employees, and its desire to be a

union-free employer. ["Automatic"] had contemplated

19a

the possibility of going nonunion for some time prior to

its adoption of the "Neutral" plan, and after some

misgivings, took the plunge. . . . ["Automatic"] went to

considerable pains to mislead the unions into believing

that it was merely extending its subcontracting.

Also,

["Automatic"'s president] advised the local unions

representing ["Automatic"] sprinkler fitters of [the

company's] withdrawal from NFSA, and sent the

following message to [the company's] district

managers:

I need each of you to contact the Business

Agent in your area and ask to sit down with

them to discuss this change... .

Here is why we withdrew:

Union Relationship - This will force us to work

directly with the local unions for the benefit of

both. We are not planning to be a non-union

contractor. ...

And,

{"Automatic"'s] concealment commenced with its

notice to NFSA that it intended to bargain individually

with the Unions, continued with its reassurances to

Simpson that there would be contractual relationships

_.. in the future[.] . . . That announcement itself was

designed to mislead the Unions. It invited bargaining

on [the company's] decision to no longer employ the

Locals' members, but the record clearly shows [the

company] had no intention of bargaining on its

decision.

And,

20a

{"Automatic"'s] primary concern was to increase its

share of the fire protection market by being free from

the unions' collective-bargaining agreements’

restrictions on subcontracting which forbade [the

company] to subcontract to nonunion firms, and, being

thus freed, [the company] would penetrate the market

share held by nonunion firms because it could then

subcontract to the lowest bidder, union or nonunion.

Finally,

Respondent's conduct in terminating its union member

employees, severing its relationships with the

contracting unions, turning toward nonunion

subcontracting, and concealing its ultimate plan from

the Unions violated Section 8(a)(3) and (1) of the Act.

My brother's opinion does not take issue with these findings

by the ALJ and their adoption by the Board. Nor does it assert

that the Board erred in performing the burden-shifting analysis

required in so-called "dual-motive" cases such as this.

Uforma/Shelby Business Forms, Inc. v. NLRB, 111 F.3d 1284,

1291 (6th Cir. 1997).

With regard to the required burden-shifting and

"dual-motive" cases, the ALJ wrote:

Furthermore, General Counsel has shown that the

desire to rid itself of the Local Unions, thereby

discouraging union activity, was at the very least one of

the motivating factors in ["Automatic"'s] decision to

become a general contractor and subcontract all its

sprinkler installation work. ["Automatic"] therefore is

obliged to show by a preponderance of the evidence it

would have done so in the absence of union

representation of its employees. Wright Line, 251

N.L.R.B. 1083 (1980); NLRB v. Transportation

Management Corp., 462 U.S. 393, 76 L. Ed. 2d 667,

2la

103 S. Ct. 2469 (1983). Respondent has not carried this

burden.

(Emphasis added.) The ALJ expressly considered and rejected

the proffered legitimate business reasons for "Automatic"’s

decision. Nevertheless, my brother writes, "[{"Automatic"'s]

actions were justified under the subcontracting provisions of

the parties' collective bargaining agreement. Therefore, the

Board's determination that Petitioners unlawfully discriminated

against the unions by subcontracting in accordance with the

terms of the collective bargaining agreement is legally

erroneous." But that observation begs the question, which is,

whether "Automatic"'s actions were, indeed, taken "under the

subcontracting provisions of the parties’ collective bargaining

agreement" or were taken for the forbidden discriminatory

reason of anti-union animus aimed at simply ridding the

employer of the financial burdens of a portion of its unionized

workforce. The Board, in adopting the extensive analysis,

findings, and conclusions of the ALJ, as well as the credibility

determinations by the ALJ, found that the subcontracting

decision was not taken "under the subcontracting provisions of

the parties' collective bargaining agreement," but, given

"Automatics motive, was made in violation of section 8(a)(3).

Il.

For these reasons, I respectfully dissent from part IV. of my

colleague's opinion and concur in the conclusion reached in

part III.

22a

APPENDIX B

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

Nos.: 95-6599: 96-5159

“AUTOMATIC” SPRINKLER CORPORATION

OF AMERICA, ET AL.,

Petitioners/Cross-Respondents,

versus

NATIONAL LABOR RELATIONS BOARD,

Respondent/Cross-Petitioner,

and

ROAD SPRINKLER FITTERS LOCAL UNION NO. 669, U.A..,

AFL-CIO,

Intervenor.

Filed October 31, 1997

Before WELLFORD, RYAN, and SILER, Circuit Judges.

ORDER

The court having received two petitions for rehearing en

banc, and the petitions having been circulated not only to the

original panel members but also to all other active judges of

this court, and no judge of this court having requested a vote on

the suggestion for rehearing en banc, the petitions for rehearing

have been referred to the original panel.

The panel has further reviewed the petitions for rehearing

and concludes that the issues raised in the petitions were fully

considered upon the original submission and decision of the

nee

seal te ini ‘ens

23a

case. Accordingly, the petitions are denied. Judge Ryan would

grant rehearing for the reasons stated in his dissent.

ENTERED BY ORDER OF THE COURT

/s/

Leonard Green, Clerk

24a

APPENDIX C

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

Nos.: 95-6599: 96-5159

“AUTOMATIC” SPRINKLER CORPORATION OF AMERICA;

FIGGIE INTERNATIONAL, INC.,

Petitioners/Cross-Respondents,

versus

NATIONAL LABOR RELATIONS BOARD,

Respondent/Cross-Petitioner,

and

ROAD SPRINKLER FITTERS LOCAL UNION NO. 669, U.A..,

AFL-CIO,

Intervenor.

Issued as Mandate November 14, 1997

Before WELLFORD, RYAN, and SILER, Circuit Judges.

JUDGMENT

THIS MATTER came before the court upon a petition for

review and cross-application for enforcement of an order

against “Automatic” Sprinkler Corporation of America and

Figgie International, Inc.

UPON FULL REVIEW of the record and the briefs and

arguments of counsel, we conclude that the decision of the

Board should not be enforced, and accordingly:

IT IS ORDERED that the order issued by the Board in this

25a

matter be vacated. IT IS FURTHER ORDERED that the

petition by National Labor Relations Board to enforce its Order

is DENIED.

ENTERED BY ORDER OF THE COURT

/s/

Leonard Green, Clerk

26a

APPENDIX D

"AUTOMATIC" SPRINKLER CORPORATION OF AMERICA AND

FIGGIE INTERNATIONAL INC., A SINGLE OR JOINT

EMPLOYER AND ROAD SPRINKLER FITTERS LOCAL

UNION NO. 669 OF THE UNITED ASSOCIATION OF

JOURNEYMEN AND APPRENTICES OF THE PLUMBING AND

PIPEFITTING INDUSTRY OF THE UNITED STATES AND

CANADA

"AUTOMATIC" SPRINKLER CORPORATION OF AMERICA AND

FIGGIE INTERNATIONAL INC., A SINGLE OR JOINT

EMPLOYER AND PIPE FITTERS LOCAL UNION NO. 120 OF

CLEVELAND, OHIO, UNITED ASSOCIATION OF

JOURNEYMEN AND APPRENTICES OF THE PLUMBING AND

PIPEFITTING INDUSTRY OF THE UNITED STATES AND

CANADA, AFL-CIO

"AUTOMATIC" SPRINKLER CORPORATION OF AMERICA AND

FIGGIE INTERNATIONAL INC., A SINGLE OR JOINT

EMPLOYER AND ROAD SPRINKLER FITTERS LOCAL

UNION NO. 692 OF THE UNITED ASSOCIATION OF

JOURNEYMEN AND APPRENTICES OF THE PLUMBING AND

PIPEFITTING INDUSTRY OF THE UNITED STATES AND

CANADA

"AUTOMATIC" SPRINKLER CORPORATION OF AMERICA AND

FIGGIE INTERNATIONAL INC., A SINGLE OR JOINT

EMPLOYER AND UNITED ASSOCIATION OF JOURNEYMEN

AND APPRENTICES OF THE PLUMBING AND PIPEFITTING

INDUSTRY OF THE UNITED STATES AND CANADA, LOCAL

UNION 536

"AUTOMATIC" SPRINKLER CORPORATION OF AMERICA AND

FIGGIE INTERNATIONAL INC., A SINGLE OR JOINT

27a

EMPLOYER AND SPRINKLER FITTERS LOCAL UNION NO.

542, AFFILIATED WITH UNITED ASSOCIATION OF

JOURNEYMEN AND APPRENTICES OF THE PLUMBING AND

PIPEFITTING INDUSTRY OF THE UNITED STATES AND

CANADA

"AUTOMATIC" SPRINKLER CORPORATION OF AMERICA AND

FIGGIE INTERNATIONAL INC., A SINGLE OR JOINT

EMPLOYER AND SPRINKLER FITTERS AND APPRENTICES

UNION LOCAL NO. 281, AFFILIATED WITH UNITED

ASSOCIATION OF JOURNEYMEN AND APPRENTICES OF THE

PLUMBING AND PIPEFITTING INDUSTRY OF THE UNITED

STATES AND CANADA

"AUTOMATIC" SPRINKLER CORPORATION OF AMERICA AND

FIGGIE INTERNATIONAL INC., A SINGLE OR JOINT

EMPLOYER AND SPRINKLER FITTERS AND APPRENTICES

LOCAL UNION 314

"AUTOMATIC" SPRINKLER CORPORATION OF AMERICA AND

FIGGIE INTERNATIONAL INC., A SINGLE OR JOINT

EMPLOYER AND SPRINKLER FITTERS AND APPRENTICES

LOCAL UNION NO. 699, UA, AFL-CIO

"AUTOMATIC" SPRINKLER CORPORATION OF AMERICA AND

FIGGIE INTERNATIONAL INC., A SINGLE OR JOINT

EMPLOYER AND SPRINKLER FITTERS LOCAL UNION NO.

696 OF THE UNITED ASSOCIATION OF JOURNEYMEN AND

APPRENTICES OF THE PLUMBING AND PIPEFITTING

INDUSTRY OF THE UNITED STATES AND CANADA

"AUTOMATIC" SPRINKLER CORPORATION OF AMERICA AND

FIGGIE INTERNATIONAL INC., A SINGLE OR JOINT

EMPLOYER AND SPRINKLER FITTERS AND APPRENTICES

28a

LOCAL UNION NO. 483 OF THE UNITED ASSOCIATION OF

JOURNEYMEN AND APPRENTICES OF THE PLUMBING AND

PIPEFITTING INDUSTRY OF THE UNITED STATES AND

CANADA

"AUTOMATIC" SPRINKLER CORPORATION OF AMERICA AND

FIGGIE INTERNATIONAL INC., A SINGLE OR JOINT

EMPLOYER AND SPRINKLER FITTERS LOCAL UNION 676,

UNITED ASSOCIATION OF JOURNEYMEN AND

APPRENTICES OF THE PLUMBING AND PIPEFITTING

INDUSTRY OF THE UNITED STATES AND CANADA

"AUTOMATIC" SPRINKLER CORPORATION OF AMERICA AND

FIGGIE INTERNATIONAL INC., A SINGLE OR JOINT

EMPLOYER AND SPRINKLER FITTERS LOCAL UNION NO.

709 OF THE UNITED ASSOCIATION OF JOURNEYMEN AND

APPRENTICES OF THE PLUMBING AND PIPEFITTING

INDUSTRY OF THE UNITED STATES AND CANADA.

Cases 8-CA-26201, 8-CA-26471, 8-CA-26333, 8-CA-26454-1

(formerly 4-CA-22747), 8-CA-26454-2 (formerly

5-CA-24283), 8-CA-26454-3 (formerly 6-CA-26399),

8-CA-26454-4 (formerly 13-CA-32462), 8-CA-26454-5

(formerly 17-CA-17319), 8-CA-26454-6 (formerly

19-CA-23298), 8-CA-26454-7 (formerly 19-CA-19870),

8-CA-26454-8 (formerly 2-CA-13389), 8-CA-26454-9

(formerly 34-CA-6556), and 8-CA-26454-10 (formerly

21-CA-30069).

29a

October 25, 1995

DECISION AND ORDER

BY CHAIRMAN GOULD AND MEMBERS COHEN

AND TRUESDALE

On December 30, 1994, Administrative Law Judge Claude

R. Wolfe issued the attached decision. The Respondent filed

exceptions and a supporting brief, the General Counsel filed a

cross-exception, and the General Counsel and the Union each

filed an answering brief to the Respondent's exceptions.

The National Labor Relations Board has delegated its

authority in this proceeding to a three-member panel. The

Board has considered the decision and the record in light of the

exceptions and briefs, and has decided to affirm the judge's

rulings, findings,' and conclusions and to adopt the

recommended Order as modified.”

'The Respondent has excepted to some of the judge's credibility

findings. The Board's established policy is not to overrule an administrative

law judge's credibility resolutions unless the clear preponderance of all the

relevant evidence convinces us that they are incorrect. Standard Dry Wall

Products, 91 N.L.R.B. 544 (1950), enfd. 188 F.2d 362 (3d Cir. 1951). We

have carefully examined the record and find no basis for reversing the

findings.

?We also agree with the judge that restoration of the

Respondent's sprinkler fitting operations is an appropriate remedy based

on the Respondent's unlawful subcontracting of the work that employees

represented by the 12 Local Unions formerly performed. Although the

judge noted, at fn. 13 of his decision, that the Respondent may introduce

evidence at the compliance stage of this case to demonstrate that restoration

of these operations is unduly burdensome, we find merit in the General

Counsel's and the Union's argument that the judge erred by failing to

30a

The date that the Respondent originally planned to

complete the subcontracting of all sprinkler fitter labor work at

sec. IV, A, par. 5, of the judge's decision should be August 31,

1995.

We adopt the judge's finding that the Respondent violated

Section 8(a)(3) of the Act by subcontracting the unit work and

discriminatonly laying off the unit employees. In so

concluding, we stress that in the Respondent's internal

document containing the subcontracting plan titled "Pro Forma

III-A" the Respondent stated that it expected to gain, inter alia,

the following benefits from its subcontracting decision:

Gain control of labor costs [emphasis in original] . . .

Eliminate labor negotiations; Eliminate costs associated

with union grievances . . . Allow "Automatic" to

become competitive against nonunion contractors.

Thus, there is direct evidence here showing that the

Respondent's decision to subcontract the unit work was

discriminatorily motivated as it sought to nd itself of

union-represented employees. Regarding Locals 120, 542, 676,

and 696 that had 8(f) bargaining status,’ we specifically note

that the Respondent's collective-bargaining agreements with

these Locals had varying expiration dates and that, in each case,

provide that the Respondent can only present previously unavailable

evidence in order to make this showing in compliance. See Compu-Net

Communications, 315 N.L.R.B. 216 fn. 3 (1994). We will modify the

judge's order and notice. In so doing, we note that the Respondent chose not

to utigate the restoration issue before the judge at the unfair labor practice

hearing.

>The other eight Locals with which the Respondent had a

bargaining relationship, as discussed below, enjoyed 9(a) status.

3la

the agreements had not yet expired before the Respondent

discharged the unit employees. Because the Respondent clearly

was obligated under John Deklewa & Sons, 282 N.L.R.B. 1375

(1987), enfd. sub nom. Jron Workers Local 3 v. NLRB, 843

F.2d 770 (3d Cir. 1988), cert. denied 109 S. Ct. 222 (1988), to

honor the terms of these 8(f) agreements until they expired, we

find that the Respondent acted unlawfully in terminating these

unit employees for antiunion considerations before expiration.‘

We also agree with the judge that the Respondent violated

Section 8(a)(5) by refusing to bargain with those eight Locals

that had 9(a) bargaining status about the decision to subcontract

unit work and the effects of that decision, as well as over

successor collective-bargaining agreements.” It is clear that the

Respondent's subcontracting decision was a mandatory subject

of bargaining under Fibreboard Paper Products Corp. v.

NLRB, 379 U.S. 203, 214 (1964), because the Respondent in

effect substituted the subcontractors’ employees for its own.

The record discloses that the Respondent continues to install

and maintain sprinkler systems and that labor costs, which the

Local Unions had substantial authority to control, constituted

the principal basis for the Respondent's subcontracting

decision.® Furthermore, as the judge found, the Respondent did

“We find that, in any event, an employer cannot discriminatorily

terminate employees, even after an 8(f) contract expires. The expiration of

an 8(f) contract simply privileges a withdrawal of recognition, not a

discriminatory discharge of employees.

*Member Cohen agrees that the subcontracting violated Sec.

8(a)(3), and therefore finds it unnecessary to pass on whether that

subcontracting also violated Sec. 8(a)(5) of the Act.

°Thus, the present case is clearly distinguishable from

Oklahoma Fixture Co., 314 N.L.R.B. 958, 959-960 (1994), in which the

32a

not bargain in good faith over this mandatory subject of

bargaining as it presented the Local Unions with a fait

accompli and then sought to have them engage in the futile act

of bargaining about that decision. Yet, the most compelling

proof of the Respondent's bad-faith bargaining in this case is

our finding above that the subcontracting decision was

discriminatorily motivated. The Board has consistently held

that an employer's subcontracting decision cannot be a

legitimate entrepreneurial decision exempt from bargaining

when, as here, antiunion considerations are at the heart of the

alleged fundamental change in the direction of the corporate

enterprise. See, e.g., Equitable Resources Exploration, 307

N.L.R.B. 730, 732-733 fn. 11 (1992).’

ORDER

The National Labor Relations Board adopts the

recommended Order of the administrative law judge as

modified below and orders that the Respondent, "Automatic"

Sprinkler Corporation of America and Figgie International Inc.,

a single or joint employer, Cleveland, Ohio, its officers,

agents, successors, and assigns, shall take the action set forth in

Board found that the employer had no duty to bargain about its decision to

subcontract electrical work as the employer had legitimate concerns about

its legal liability and the risk of losing customers if the work was

improperly done. Because labor costs were not a factor in that employer's

decision to subcontract such work, the Board concluded that the

subcontracting decision there, unlike in this case, involved considerations

of corporate strategy fundamental to preservation of the enterprise that were

outside the scope of mandatory bargaining.

7in the absence of exceptions, we do not pass on whether the

Respondent further violated Sec. 8(a)(5) by terminating the unit employees

represented by the four 8(f) Locals before any of their collective-bargaining

agreements expired.

33a

the Order as modified.

1. Substitute the following for paragraph 2(a).

"(a) Reinstate the subcontracted operations that employees

represented by Locals 669, 120, 692, 536, 542, 281, 314, 699,

696, 483, 676, and 709, formerly performed, unless it is shown

at the compliance stage of this proceeding that it is unduly

burdensome to reinstate those operations.

2. Substitute the attached notice for that of the

administrative law judge.

Dated, Washington, D.C. October 25, 1995, William B. Gould

IV, Chairman, Charles I. Cohen, Member and John C.

Truesdale, Member.

APPENDIX

NOTICE TO EMPLOYEES

POSTED BY ORDER OF THE

NATIONAL LABOR RELATIONS BOARD

An Agency of the United States Government

The National Labor Relations Board has found that we violated

the National Labor Relations Act and has ordered us to post

and abide by this notice.

WE WILL NOT terminate employees in order to engage in

nonunion subcontracting.

WE WILL NOT unilaterally subcontract bargaining unit

work.

34a

WE WILL NOT refuse to bargain with Local Unions 669,

692, 536, 281, 314, 699, 483, and 709 United Association of

Journeymen and Apprentices of the Plumbing and Pipefitting

Industry of the United States and Canada, AFL-CIO concerning

our decision and the effects thereof of subcontracting all work

performed by employees represented by those Unions.

WE WILL NOT refuse to bargain with Local Unions 669,

692, 536, 281, 314, 699, 483, and 708 concerning successor

collective-bargaining agreements.

WE WILL NOT in any other manner interfere with,

restrain, or coerce you in the exercise of the rights guaranteed

you by Section 7 of the Act.

WE WILL reinstate the subcontracted operations that

employees represented by Locals 669, 120, 692, 536, 542, 281,

314, 699, 696, 483, 676, and 709 formerly performed, unless it

is shown at the compliance stage of this proceeding that it is

unduly burdensome to reinstate those operations.

WE WILL offer reinstatement to all employees who were

terminated as a result of our unlawful subcontracting and WE

WILL make them whole for any loss of earnings they suffered

by reason of that unlawful termination, with interest.

WE WILL, on request, bargain with Local Unions 669,

692, 536, 281, 314, 699, 483, and 709 concerning the decision

to subcontract and its effects on employees, and for successor

collective-bargaining agreements.

WE WILL, on request, furnish Local 669 with information

previously requested and relevant and reasonably necessary to

its function as a collective-bargaining representative of our

sprinkler fitter employees.

35a

"AUTOMATIC"

CORPORATION

SPRINKLER

OF AMERICA AND

FIGGIE INTERNATIONAL INC.

* *

DECISION

STATEMENT OF THE CASE

CLAUDE R. WOLFE, Administrative Law Judge. This

consolidated case was litigated before me in Cleveland, Ohio,

on 12 days in September and October 1994 pursuant to charges

filed and' served .and a second amended consolidated

'The charges and amended charges in this proceeding were filed

and served on the dates set forth below after the designation of the local

union of the United Association of Journeymen and Apprentices of the

Plumbing and Pipe Fining Industry of the United States and Canada,

AFL-CIO (United Association) which filed them. The case numbers (Case)

in parentheses are the case numbers originally assigned to those charges.

Filing Service Type of

Case Local date date charge

8-CA-26201 669 3-4-94 3-7-94 initial

8-CA-26471 669 6-21-94 6-22-94 initial

8-CA-26333 120 4-28-94 4-29-94 initial

8-CA-26454-1 692 5-13-94 5-13-94 initial

(4-CA-22747)

8-CA-26454-2 536 3-15-94 3-18-94 initial

(5-CA-24283)

pte Me 5-4-94 5-9-94 amended

8-CA-26454-3 542 5-10-94 5-10-94 initial

36a

complaint issued on August 12, 1994. The General Counsel

alleges "Automatic" Sprinkler Corporation of America

(ASCOA) and Figgie International Inc. (Figgie) (jointly

refereed to as the Respondent) are a single employer or joint

employers who have violated Section 8(a)(5), (3), and (1) of the

National Labor Relations Act by constructing and

implementing a plan to subcontract all work performed by

employees represented by the Unions involved herein without

giving the Unions prior notice or opportunity to bargain on this

decision and its effects, all in order to discourage union

membership, and by refusing to furnish Locals 669 and 699

with certain information to which they were entitled. The

Filing Service Type of

Case Local date date charge

(6-CA-26399) 6-16-94

ieee 6-16-94 6-16-94 amended

8-CA-26454-4 281 4-26-94 5-3-94 initial

(13-CA-32462)

pe 5-26-94 6-9-94 amended

8-CA-26454-5 314 4-7-94 4-7-94 initial

(17-CA-17319)

8-CA-26454-6 699 3-29-94 3-29-94 initial

(19-CA-23298)

8-CA-26454-7 696 5-10-94 5-11-94 initial

(22-CA-19870)

8-CA-26454-8 483 8-18-93 8-18-93 initial

(32-CA-13389)

pg 4-8-94 4-8-94 amended

8-CA-26454-9 676 4-8-94 4-8-94 initial

(34-CA-6556)

ee 5-10-94 5-11-94 Ist amended

wits 5-17-94 5-19-94 2d amended

8-CA-26454-10 709 5-18-94 5-19-94 initial

(21-CA-30069)

37a

Respondent denies it has violated the Act and proffers certain

affirmative defenses.

On the entire record, and after carefully considering the

demeanor of the witnesses and the very able posthearing briefs

of the parties, I make the following

FINDINGS OF FACT

I. BUSINESS OF ASCOA AND FIGGIE

ASCOA is a division of Figgie, an Ohio corporation, with

an office and place of business in Cleveland, Ohio, and has

been engaged, among other things, in the installation, repair,

maintenance, and service of fire sprinkler systems (sprinkler

fitter work). During the 12 months preceding the issuance of

the second amended consolidated complaint, ASCOA, in the

course and conduct of its business operations, purchased and

received goods and services valued in excess of $ 50,000

directly from suppliers located outside the State of Ohio. At all

times material to this proceeding, Figgie has been and is a

corporation, and ASCOA and American La France are

divisions of the Figgie corporation. Although ASCOA has its

own offices, management, and Supervision, ASCOA provides

services for and makes sales to Figgie and other divisions of

Figgie, and maintains its own personnel, all of which both

ASCOA and Figgie concede to be the case, the record clearly

shows that, although ASCOA preliminarily formulates and

administers its own business practices and labor policy, that

formulation and administration is subject to the approval of

directors and officers of Figgie, who annually convene with

ASCOA officers to jointly formulate policies and practices as

they did with the decision to subcontract all of ASCOA's

sprinkler installation work that is at issue in this proceeding.

38a

Moreover, the assertion, which is uncontradicted by probative

evidence, by ASCOA and Figgie in their answer to the second

amended complaint that ASCOA has no separate ownership or

directors is, in my view, a concession that Figgie controls the

policies and practices of ASCOA. This is consistent with

Figgie's June 30, 1994 quarterly report to the Securities and

Exchange Commission, which is a consolidated report of

Figgie and its subsidiaries. In sum, Figgie and ASCOA are a

single-integrated business enterprise controlled by Figgie. The

complaint alleges, Respondent in its answer admits, and I find

that Figgie and ASCOA have been, at all times material to this

proceeding, engaged in commerce within the meaning of

Section 2(2), (6), and (7) of the Act.

Il. LABOR ORGANIZATIONS

At all times material, Local Unions 669, 120, 692, 536,

542, 281, 314, 699, 696, 483, 676, and 709 (coliectively called

the Local Unions or individually referred to by their number)

have been labor organizations within the meaning of Section

2(5) of the Act.

“AI but Locals 120, 542, 676, and 696 enjoy the

representative status described in Section 9(a) of the Act as

follows:

Representatives designated or selected for the

purposes of collective bargaining by the majority of the

employees in a unit appropriate for such purposes, shall

be the exclusive representative 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:

39a

Locals 120, 542, 676, and 696 were parties to agreements with

Respondent entered into pursuant to Section 8(f) of the Act,

which reads in relevant part:

It shall not be an unfair labor practice under

subsections (a) and (b) of this section for an employer

engaged primarily in the building and construction

industry to make an agreement covering employees

engaged (or who, upon their employment, will be

engaged) in the building and construction industry with

a labor organization of which building and construction

employees are members (not established, maintained,

or assisted by any action defined in section 8(a) of this

Act, as an unfair labor practice) because (1) the

majority status of such labor organization has not been

established under the provisions of section 9 of this Act

to the making of such agreement.

Ill. SUPERVISORS AND AGENTS

At all times material to this proceeding, except as

specifically noted, the following named individuals held the

positions set forth opposite their names and have been

supervisors for Figgie or ASCOA within the meaning of

Section 2(11) of the Act and agents for Figgie or ASCOA

within the meaning of Section 2(13) of the Act as specifically

designated opposite their names:

Harry Figgie, Jr. Chairman and CEO,

Figgie International to 5-18-94

| David R. Gross Manager/Employee Relations,

Figgie International Inc.

James Nelson Manager, Employee Benefits,

Figgie International Inc.

Owen G. Stout

John J. Gullo, Jr.

Richard Douglass

Arthur D. O'Neill

Phil Skufis

Richard Butts

H. Ray Wilkerson

William Wales

Wade Sylvester

Allen C. Sands

Donald Maupin

Tony Iannarelli

Michael May

Roy Comer

Dwight Bickler

40a

President, ASCOA

Director Human Resources,

ASCOA

Operations Manager, ASCOA

Cleveland Hub

Operations Manager, ASCOA

Baltimore Hub since 7-1-93

Sales Manager, ASCOA

Baltimore Hub

Manager, ASCOA Kansas City

Hub

Operations Manager, ASCOA

Cleveland Hub until 1-16-94

District Service Manager,

ASCOA Youngstown thereafter

Project Manager,

ASCOA Baltimore Hub

Sales Manager, ASCOA

Cleveland Hub to 1-1-94

District Manager, ASCOA

Detroit thereafter

Project Manager, ASCOA

District Service Supervisor,

ASCOA Louisville

District Service Supervisor,

ASCOA Boston until 6-30-94

Regional Superintendent until

7-1-93, Operations Manager,

ASCOA Los Angeles Hub

thereafter

Contract Representative,

ASCOA Los Angeles Hub from

7-1-93 to 9-3-93

District Service Supervisor,

4la

ASCOA Kent, Washington, from

. 7-1-93 to 2-11-94

Rick Waldo District Service Supervisor,

ASCOA Kent, Washington, since

3-16-94

Keith Millard District Service Representative,

ASCOA Kent, Washington, from

11-1-93 to 2-18-94

Larry Goeckner Superintendent, ASCOA Los

Angeles Hub until 9-1-93,

thereafter Project Manager,

ASCOA Los Angeles Hub

Len Bass Service Manager, ASCOA Los

Angeles Hub

IV. THE ALLEGED UNFAIR LABOR PRACTICES?

A. The Change in Operations

The Respondent had successive collective-bargaining

agreements covering its sprinkler fitter employees who were

members of the charging Locals and other local unions of the

United Association for many years until the agreements were

terminated in the course of the 1992-1994 events presently

before me. These agreements were between the charging Locals

and local unions and the National Fire Sprinkler Association

*The facts here found are the result of a synthesis of the credited

portions of the testimony, the exhibits, stipulations, and consideration of

logical consistency and inherent probability. Although I will not in the

course of this decision advert to all of the record testimony or documentary

evidence, it has been weighed and considered. To the extent that testimony

or other evidence not mentioned might appear to weigh against the findings

of fact, that evidence has not been disregarded but has been rejected as

incredible, lacking in probative worth, surplusage, or irrelevant.

42a

(NFSA), a multiemployer bargaining association who

bargained with the unions on behalf of Respondent and its

other employer members signatory to the NFSA contract.

Respondent's sprinkler fitter employees were primarily

engaged in the installation, alteration, maintenance, repair, and

service of fire control systems manufactured and sold by

ASCOA. These employees also performed inspection work and

made efforts to sell ASCOA's products and related services.

It is Respondent's practice to hold annual meetings chaired

by Figgie officers and participated in by officers and other

representatives of Figgie and ASCOA for the purpose of

reviewing past company performances and planning action for

the future. These deliberations result in "Hardcore" plans,

which are in fact 5-year budget projection plans modified,

updated, and extended yearly. Such a meeting was held in

November 1992. The participants, Figgie's and ASCOA's

officers and representatives, agreed to a plan (the Neutral Plan)

earlier developed by Owen Stout, ASCOA's president, which ~

provided ASCOA would become a general contractor and

would subcontract out all sprinkler fitter work after its current

collective-bargaining agreements with the locals unions

representing its sprinkler fitters expired. Stout testified the

transition to general contractor status and the elimination of

direct employment of sprinkler fitters should result in various

benefits, including the elimination of negotiations with unions

and the cost of grievances, the reduction of administrative labor

costs, and the minimization of excessive iabor costs on some

contracts.

According to Michael Siedler, ASCOA's controller, it was

calculated that the subcontracting of the sprinkler fitter work

would result in a gross savings of about $ 3.7 million per year,

43a

which would be derived from the freedom from paying fringe

benefits to the sprinkler fitters, a saving on leased vehicles of

45 percent, a saving of about $ 158,000 on road tools, and a

reduction in administrative costs, His calculations did not

include the estimation of savings from reduced labor rates.

Siedler concedes, however, that no such analysis was presented

or discussed at the 1992 Hardcore meeting, and the figures he

recites, which include 1993, were but recently developed by

him.

Respondent decided at the November 1992 meeting that its

plan to be a general contractor would become effective in

January 1993 and subcontracting of all sprinkler fitter labor

work would be completed by August 31, 1994.

Although Respondent dubbed this new program the

"Neutral Plan,” it would appear from the testimony of

Respondent's witnesses, notably President Stout, that

Respondent's primary concern was to increase its share of the

fire protection market by being free from the umnions'

collective-bargaining agreements’ restrictions on subcontracting

that forbade Respondent to subcontract to nonunion firms, and,

being thus freed, Respondent would penetrate the market share

held by nonunion firms because it could then subcontract to the

lowest bidder, union or nonunion, Respondent's officials had

discussed the possibility of becoming a nonunion company in

prior years, but had taken no steps to do so. Here they did.

Respondent's documents titled "Pro Forma III-A, B, and

C," prepared after the 1992 Hardcore meeting, which describe

its plans for 1993 and thereafter, set forth the opening of 22

new service locations to take place on the expiration of its labor

contracts, and specifically notes in Pro Forma III-B that 11 of

these locations "will open as Neutral (nonunion) operations."

44a

Pro Forma III-A in its first three pages is far more revealing

concerning Respondent's intentions. Those pages are set forth

below:

PRO FORMA III-A NEUTRAL OPERATIONS

PROJECT DESCRIPTION

A project with the goal of modifying "Automatic"

Sprinklers approach to providing for the labor content

of its contracting business thereby positioning

"Automatic" as a leading fire protection general

contractor servicing both union and non-union markets

within the fire protection industry at the expiration of

the current union contract agreements.

We must carry out this modification in such a

manner so as to prevent labor union problems during

the transition in order to maintain profitable market

share of the union fire protection market.

This change will provide us the following benefits:

Gain control of labor costs on projects

Minimizes the risk potential for labor cust

overruns on contracts

Not signatory to any union contract, its pay

demands and its work rules

Eliminate labor negotiations Eliminate costs

associated with union grievances

Passes workers compensation and salary costs

attributable to direct hire of labor force to

subcontractor

Reduce vehicle costs

Eliminate road tool costs

Reduce Broadview Heights administration costs

associated with union labor

Allow "Automatic" to bid both union and nonunion

projects

siacerereaaeniaiiimiiiaiiiiieniiiiieiial

45a

Allow "Automatic" to become competitive

against non-union contractors

Gives more focus on extras on each project

Entrance into residential market

Execution of this plan must be done with caution so

as not to violate any term of existing union contracts

and so as not to cause a work slow down by the union

labor force on contracts in progress.

"Automatic" will change its method of doing

business from one of a fire protection contractor

providing its own labor force to that of a fire protection

general contractor whereby the labor requirements for

contracts sold will be fulfilled through subcontractors

who are either union or nonunion as required.

"Automatic" is signatory to 20 labor union contracts

with the last one expiring 8/31/95.

Puerto Rico Local 669/821 not addressed as the

union is possibly withdrawing from island. Existing

contract has been extended to 12/31/92.

The neutral plan will be implemented as follows:

"Automatic" will change its focus on labor

procurement beginning 1/4/93 to meet our goal

of neutral operations.

Notify individual unions and NFSA as

appropriate of our intentions not to renew the

contract.

Seek out quotations for sub-contiact labor from

small union sprinkler companies for all new

contract bids beginning 1/4/93.

Identify "company-oriented" fitters who might

set up union installation companies if

"Automatic" will assist with set up

No new contracts to be performed with in-house

46a

fitters after labor contract expiration dates.

If current backlog completion date exceeds

labor contract expiration--subcontract balance

to new installation company

This plan will be completed on 8/31/95 as the last

contract expires.

At this point, "Automatic" can operate in all parts of

the United States as a non-union contractor in areas

where we can't compete now because of our union

_ affiliation.

"Automatic" could continue to subcontract to union

labor companies on the jobs required.

The total domestic sprinkler market is

approximately $ 4.8 billion.

The union segment is $ 2.2 billion and the

non-union segment is $ 2.6 billion.

As a neutral contractor (general contractor),

"Automatic" can participate competitively in the total

fire protection market This is the way to grow the

company.

We expect to almost double our contract volume by

1997.

To do this we must restructure our organization to

put more sales personnel into the new areas when we

become neutral (non-union areas).

We will begin this re-structuring in 1994 to be in

place by 1/1/95. Expediting this would interfere with

the efforts necessary to put the main ingredient of this

plan in motion-developing sources to subcontract the

labor.

By letter of February 10, 1993, Stout timely withdrew

ASCOA's membership in NFSA. The following day, February

47a

11, 1993, Stout advised the local unions representing ASCOA

sprinkler fitters of ASCOA's withdrawal from NFSA, and sent

the following message to ASCOA's district managers:

By now you know that we withdrew from the NFSA.

The attached letter has been sent to the local unions

to notify them of our action.

I need each of you to contact the Business Agent in

your area and ask to sit down with them to discuss this

change. Don't wait for them to call you.

Here is why we withdrew:

Economics--We feel we can better utilize our

money and efforts to grow our business.

Growth--We feel the NFSA is not in tune with

how bad the industry really is. We will be out

of business unless we grow. NFSA membership

limits our potential for this.

Control--We want to control as much of our

future as we can and not be me-too contractor.

Union Relationship--This will force us to work

directly with the local unions for the benefit of

both. We are not planning to be a non-union

contractor.

Please limit your discussions to these topics.

Anything else is risky and could be harmful to

"Automatic."

Thereafter, Respondent increased its subcontracting but

apparently restricted it to union employers signatory to the

unions’ collective-bargaining agreements with NFSA as

required by that (the NFSA) agreement, to which the charging

Locals and other unions are signatory. Respondent took pains

to advise union representatives it was not going to sub contract

to nonunion employers. For example, Respondent ASCOA's

48a

president Stout, in a March 1993 confidential memo to

ASCOA's district managers related that he had told then Local

669 business manager Harold Simpson "We will

subcontract/joint venture with only union companies. We do

not plan to use non-union. We will work to the letter of our

contracts." Simpson agrees that Stout so advised him, and

credibly adds that Stout emphasized Respondent would be

signatory to a union agreement in future years. Simpson recalls

in an article for the May 1993 edition of the Local 669

newsletter that "the company has also informed us that it may

go out of the installation business altogether. Whatever

"Automatics' true plan, we must be ever vigilant and

aggressively defend our work." This quotation does not

establish Local 669 then knew Respondent had decided to sub

contract all installation work and no longer employ persons

represented by Local 669 for Respondent's sprinkler fitter labor

requirements. Respondent's testimony from Stout and Gullo

and the content of the Pro Formas shows it was Respondent's

plan to subcontract to unionized companies only when

necessary.

Respondent notified each Local Union as its contract

expired. Thereafter, the exchanges between the Charging

Locals and Respondent varied.

Local 669

Respondent sent the following letter to Local 669 on

January 28, 1994:

This is to serve notice that "Automatic" Sprinkler

Corporation of America intends to terminate the

Agreement presently in effect between it and your

Union, effective with the termination dated March 31,

49a

1994. You are further notified that "Automatic"

Sprinkler Corporation of America has made a

) good-faith business decision to permanently and

unequivocally alter the basic direction of its business

whereby it will no longer employ persons represented

by your Union in the installation, alteration,

maintenance, repair and service of the "Automatic["]

Sprinkler fire control Systems. It is the intention of

"Automatic" Sprinkler Corporation of America to

) implement that fundamental change in its business

| effective April 1, 1994. In the event that you desire to

discuss this business decision and the effects thereof on

members of your Union who are or were employed by

"Automatic" Sprinkler Corporation of America, please

give me a call. You may be assured the Company will

| negotiate in good faith with you concerning this

business decision and its effects on those employees

affected by the decision.

)

Local 669 responded by letter of February 7, 1994 as

follows:

Dear Mr. Stout:

In light of your letter of January 28, 1994, this is a

request for information on behalf of Local 669

regarding certain business decisions that "Automatic"

(or its parent company) has, or may have made which

would vitally affect bargaining unit members

represented by Local 669:

1. lf "Automatic" has made any company-wide or

district-wide decision(s) to permanently subcontract or

otherwise trarisfer some or all of its operations as of a

certain daie, what specific decision was made, when

was the decision made, why was it made, and by

50a

whom? If Local 669 was given any official notice of

this decision, please forward us a copy of the notice.

Did "Automatic" offer to bargain with the Union

regarding either the decision or its effects upon unit

employees? If so, please describe when such offer was

made.

2. If "Automatic" made decision(s) to lay off a

portion of the Local 669 bargaining unit, or, for that

matter, the entire unit, please advise as to when the

decision was made, and why it was made, Pnor to

January 28, 1994, was Local 669 given notice of and/or

an opportunity to bargain with "Automatic" about this

decision and/or its effect?

3. Has "Automatic" determined to close all or part

of its installation operation at some time in the future?

If so, when was the decision made and when does

"Automatic" intend to close its installation operations?

When was Local 669 notified? Did "Automatic" offer

to bargain?

4. Please forward to this office the following

documentary information:

--any and all subcontract agreements, or joint

venture agreements, or any other contracts or

agreements by "Automatic" (and/or its parent)

covering, in whole or in part, the transfer of,

subcontracting joint venturing or sharing of

bargaining unit work as described in Article 18

of our agreement;

--corporate resolutions or other "Automatic"

business records indicating when the decisions

discussed in paragraphs 1-3 above were made,

and the reason(s) why they were made; and

--any Company records indicating the potential

effect upon unit employees of these decisions or

Sla

any projected studies of cost savings to the

Company as a consequence of some or all of

these decisions.

We need this information within fourteen (14) days.

The Union's legitimate need for this information should

be obvious. Without it, we can not protect unit

employees from the effects of adverse business

decisions by "Automatic." The information will also be

useful to Local 669 for negotiation of a new agreement,

effective April 1, 1994.

To the extent that "Automatic" has made some or

) all of the decisions discussed above, this letter will also

constitute a demand that "Automatic" cease and desist

from this conduct immediately and make whole

affected unit employees, as well as a demand by the

Union to bargain about the decision(s) and their effects

upon represented employees.

Respondent replied to Local 669 on February 15, 1994, by

letter as follows, in pertinent part:

As stated in our letter to you dated January 28,

1994, "Automatic" Sprinkler has made a good faith

business decision to permanently and unequivocally

alter the basic direction of our business whereby we

will no longer employ persons represented by your

Union in the installation, alteration, maintenance, repair

or service of automatic fire control systems.

In our letter dated January 28, 1994, we offered to

negotiate in good faith with you concerning this

business decision and its effects on those employees

affected by the decision.

Your February 7th correspondence requested the

answers to certain specific questions with regard to the

52a

Company's decision and seeks certain documents. I

have prepared a draft response and am attempting to

gather documents responsive to your request. Our legal

counsel was tied up in negotiations last week out of

town when I received your request and is out of the

country until next week. I will ask him to review your

request upon his return to the office to assist the

Company in complying with its bargaining obligations.

Therefor, I wanted to inform you that the company will

respond to your request as expeditiously as possible

upon the return of our counsel.

This reply was followed by another letter from Respondent

to Local 669 dated March 8, 1994, reading:

Following is a reply to your letter dated February 7,

1994.

As stated in our letter to you dated January 28,

1994, "Automatic" Sprinkler has made a good faith

business decision to has made a good faith business

decision to permanently and unequivocally alter the

basic direction of our business whereby we will no

longer employ persons represented by your Union in

the installation, alteration, maintenance, repair or

service of automatic fire control systems.

We will subcontract the labor needed to conduct the

installation, alteration, maintenance, repair or service of

automatic fire control systems to a contractor that has

a collective bargaining agreement your Union, per

Article 18 of the current collective bargaining

agreement.

In our letter to you dated January 28, 1994, we

offered to negotiate in good faith with you concerning

this business decision and its effects on those

53a

employees affected by the decision.

In approximately the Fall of 1992, we began to

reexamine our manner of conducting business in the

hopes of making the enterprise more competitive and

thus more profitable. "Automatic's" President, Owen

Stout ("Stout"), concluded that the Company's direction

and operations had to change to make these goals

possible. He concluded that it would be more cost

efficient for "Automatic" to cease providing its own

labor force, in favor of becoming a general contractor

which would acquire the labor force required for its

contracts through subcontractors. Stout believed that

smaller sub contractors could be more competitive with

their labor estimates. Stout, however, not wanting to

alienate the Union nor wanting to violate the collective

bargaining agreement, decided that the Company would

sub contract only with construction companies that

were parties or signatory to labor agreements. In order

to implement this plan, the Company decided that it

would have to withdraw from NFSA and, furthermore,

that it would not renew all of its labor contracts with

the various locals.

Stout discussed the Company's goals and the

fundamental change in the Company's operations in

early March 1993 with Vern Simpson, the Business

Manager of Local 669 which was a party to a collective

bargaining agreement with NFSA/"Automatic"

covering sprinkler fitters throughout the Country

wherever autonomous Locals of the Internationals, had

no jurisdiction. A memorandum concerning this

meeting which sets forth the Company's planned

changes in operations was circulated to all of

"Automatic's" District Managers on March 8, 1993.

"Automatic" took the first step in implementing this

54a

new operating plan in early February 1993 when it

formally withdrew from NFSA. In a memorandum to

all District Managers dated February 11, 1993, Stout

explained his reasons for the withdrawal (copy

enclosed). Stout decided that the Company's

withdrawal from NFSA would allow it to work more

closely with the Locals and thereby prepare them for

"Automatic's" upcoming changes in operations.

Although "Automatic" would no longer be employing

members of the Locals directly, it would be employing

their members through subcontractors and therefore the

Company desired a closer, mutually beneficial

relationship with both the Locals and their members.

"Automatic" has not rejoined NFSA since its

withdrawal in February 1993.

During approximately this same period of time,

"Automatic" began formatting its subcontracting

procedures. The Company developed a "form"

subcontract agreement to be used in the purchase of

sprinkler fitter labor. The form agreement, among other

things, required that the subcontractor be a party or

signatory to a collective bargaining agreement. The

contract also contained warranty, payment, insurance

and liability provisions. The subcontract form, with

attached documents, has come to be known as the "S

Order” at "Automatic". The "S Order" was circulated to

all of "Automatic's" District Managers on June 29,

1993 (copy enclosed).

In March 1993, "Automatic" began the next phase

of its reorganization. In the period between March 31,

1993 and September 15, 1993, collective bargaining

agreements between NFSA/"Automatic" and Local 183

in Milwaukee, Local 483 in San Francisco, Local 709

in Los Angeles and Local 550 in Boston expired. By

55a

the time of the expiration dates of the contracts in those

areas. "Automatic" had successfully transformed its

operations in each area into that of a general contractor

and, as a result, no longer employed members of these

Locals. Instead, all of the Company's labor needs were

provided for by union subcontractors with the end

result being mutually beneficial: "Automatic" had

successfully reorganized and union members did not

lose any work.

Since May 20, 1993, "Automatic" has begun to bid

all of its prospective contracts in Local 669's

jurisdiction as a general contractor with the intention of

subcontracting the labor requirements. Projects

awarded to "Automatic" have already been or will soon

be subcontracted by "Automatic" in accordance with

the subcontracting provisions of the current agreement

between it and Local 669.

"Automatic" has taken all steps necessary to

changes its operations from that of being a direct

employer of sprinkler fitters or other members of Local

669 to that of being a general contractor that

subcontracts for its labor.

"Automatic" Sprinkler has not violated and is not

violating any provision of the current collective

bargaining agreement by subcontracting the labor on

our projects. We will not cease and desist from

implementing our business decision.

Enclosed and listed below are all documents that we

deem relevant. There are no Corporate resolutions nor

similar documents which reflect this decision making

process.

02-05-93--Internal memo about withdrawal

from NFSA.

02-10-93--Letter to NFSA about withdrawing

56a

membership.

02-11-93--Letter to Figgie International

concerning "Automatic's" withdrawal from

NFSA.

02-11-93--Form letter that was sent to all

unions (including 669) concerning

"Automatic's" withdrawal from NFSA.

02-11-93--Memo to all District Managers

advising them to meet with Business Agency to

explain our business decision.

03-08-93--Memo to all District Managers

concerning a meeting between "Automatic" and

669's Business Manager, Vern Simpson.

04-05-93--Letter to 669 members from Vern

Simpson, Business Manager, Local 669.

04-23-93--Memo to Calfee, Halter, & Griswold

about Labor Subcontracting.

05-26-93--Memo to all District Managers

transmitting copy of Procedure 8-2 on

Subcontracting Labor.

06-28-93--Procedure 8-2 rewritten and revised

as Procedure 8-5, Subcontract Labor.

01-28-94--Letter to 669 conceming

"Automatic's" business decision.

02-07-94--Letter from 669 responding to

"Automatic's” 1-28-94 letter.

02-15-94--Letter to 669 with "Automatic's"”

response to 2-7-94 letter.

In the event that you desire to discuss this business

decision and the eticcts thereof on members of your

Union who are or were employed by "Automatic"

Sprinkler Corporation of America, please give me a

call. You may be assured the Company will negotiate

in good faith with you concerning this business

Ge de ee -

57a

decision and its effects on those employees affected by

the decision.’

By letter of April 22, 1994, Local 669 requested

Respondent to furnish, among other things, the information

listed in the following questionnaire:

QUESTIONNAIRE

Please provide the following information for

"Automatic" Sprinkler Corporation of America

("Automatic"), American LaFrance Fire Protection

Company ("American LaFrance"), Figgie International

("Figgie") and any other companies affiliated with

those organizations for the time period January 1, 1991,

unless otherwise stated:

1. The date and State of incorporation of each

company.

2. All past and present office addresses and

telephone numbers of each company office and

facility, and the dates thereof.

3. The office address and employment history

(including job titles and responsibilities), for the

period January 1, 1991 to date, of a) each present

company officer and/or director and b) each former

company officer and/or director who was employed

at any time during that period.

4. The name and employment history (including job

*In March 1994, Local 669 commenced a series of requests for

information on various items unrelated to the issues raised by Respondent's

January 28, 1994 letter to Local 669. The requests are not relevant to those

issues and are therefore not here considered.

58a

titles and responsibilities) of each current or former

director, officer, supervisor, and/or employee of any

of the companies who at any time since January 1,

1991 has been or was employed by any of the other

companies in any capacity.

5. The State or States in which each company has

been and/or is qualified or registered to do business,

and the dates the company has so qualified or

registered.

6. The names under which each company trades or

does business, or has traded or done business.

7. The names and addresses of all persons,

corporations or other entities owning stock (and the

percentage of their ownership) in each company as

of January 1 of each year from 1991 to date.

8. The nature of the business of each company,

including products, services, customers and

locations of manufacturing, fabricating and/or sales

facilities.

9. The name, title, employer and job duties of any

persons who are, or who have been, responsible in

any way for labor relations and/or personnel

relations for each company, the period of time

during which each of these persons was assigned

these responsibilities, and each person's employer

during each such period of time.

10. The name, title, employer of each person who

had, or has responsibility for hiring, firing and

Supervising employees in each company, the period

of time during which each of these persons was

assigned these responsibilities, and each person's

employer during each such period of time.

11. Do the companies, jointly or in common, own,

occupy, or lease real property? If so, the location of

59a

the real property and the terms of the lease.

12. Do the companies use or lease real property of

any of the others? If so, the location of the real

property and the terms of the lease.

13. Do the companies, jointly or in common, own,

or lease facilities and/or equipment? If so, the type

and location of these facilities and equipment and

the terms of the lease or other agreement for use.

14. Do the companies lease or use facilities and/or

equipment of any of the others? If so, the type and

location of these facilities and equipment and the

terms of the lease or other agreement for use.

15. Do the companies own, jointly or in common,

bank accounts, notes, bonds and/or types of

securities? If so, the type and monetary value of the

bank account and/or security. real property? If so,

the location of the real property and the terms of the

lease.

16. The date, terms, and parties to each contract,

commitment of understanding, whether oral or

written, under which the companies have been

and/or are jointly obligated to engage in business

activity.

17. The date, terms and parties to each contract,

commitment or understanding, whether oral or

written, between the companies under which one of

the companies has been and/or is required or

authorized to use the services, facilities, personnel,

or equipment of the other company.

18. The date, terms, parties to and persons entering

into each contract, commitment, or understanding,

whether oral or written, between the companies.

19. The date, terms, parties to and persons entering

into each contract, commitment, or understanding,

60a

whether oral or written, under which one of the

companies agreed to loan, sell and/or contribute

equipment, services, money and/or any other things

of value to the other company.

20. The date and substance of each bid submitted

by one company for work to be performed in whole

or in part by the other company.

21. The date and substance of each contract entered

into by one company for work which was, or is

being performed in whole or in part by the other

company.

22. The identity of each person or entity that

guaranteed or bonded the performance of each

contract entered into by any of the above-named

companies.

23. The name, effective, dates, terms and class of

eligible employees, supervisors, officers and/or

directors of each health, life insurance, pension,

incentive, stock option, retirement and/or similar

benefit plan offered by each company and whether

employees, supervisors, officers and/or directors of

each health, life insurance, pension, incentive, stock

option, retirement and/or similar benefit plan

offered by each company and whether employees,

supervisors, officers and/or directors of one

company participate in, or are eligible to participate

in the plan of another company.

24. The nature and terms of any lines of credit,

revolving credit or other credit arrangements

offered by one company to the other company, the

dates on which such credit was extended, the

amount of credit extended, and the parties to each

extension of credit.

25. The nature and amount of indebtedness owned

ah Rae tS ap NL lia Ne Pa ang MONE IR nnd CA SRN SPORE A i

Sh IE AE RS rl PGS EE BS erat

Bid eatin ah adieet nb Scie es ike GRA asin

6la

by each company to any of the other companies on

January 1 of each year from 1991 to date.

26. The dates, participants and substance of each

meeting, conference and/or discussion attended by

one or more shareholders, directors, officers,

supervisors and/or employees of Automatic and/or

Figgie at which the formation and/or function of

American LaFrance was discussed.

27. Copies of those portions of all documents,

including but not limited to correspondence,

memoranda, notes, and minutes, which refer,

directly or indirectly, to the formation, dissolution,

and/or function of American LaFrance.

28. Identify the banking institution, branch location,

and account number of each company's bank

account and payroll accounts.

29. Identify where and by whom each company's

accounting, corporate and other business records

are kept.

30. Who prepares the payroll and tax returns for

each company?

31. Provide each company's business license

number for each state where it does business.

32. Provide the carrier and policy number for each

company's workers’ compensation insurance and

health insurance.

33. Provide each company's taxpayer identification

number.

34. Provide the name, social security number, date

of hire, wage and fringe rates for each employee of

American LaFrance that has performed or that is

performing bargaining unit work, since January 1,

1991.

62a

That same day, John Gullo, Respondent's director of human

resources forwarded a copy of Pro Forma III-A to Local 669.

Gullo is credited that he had not previously furnished Local

669 the document because he was unaware of the document's

existence. This is not implausible given the fact it was prepared

in limited copies and distributed to a very few high-level

officials before Gullo entered his position as director of human

resources.

Tommy Preuett, Trustee of Local 669, responded to Gullo's

April 22, 1994 submission on May 11, 1994, as follows:

In reply to your letter of Apnl 22, 1994 we

seriously doubt that you have provided all of the

information requested by Local 669. No substantive

response has been received with regard to the Union's

request dated April 22, 1994 having to do with

American LaFrance. We also request that you re-review

your files to see if any other responsive documents have

been "inadvertently overlooked."

With respect to the newly provided document,

"PRO-FORMA III-A," is it a complete document?

When was it prepared and by whom? Were there

PRO-FORMA's I or II or III-B? What specific actions

have been taken by "Automatic" and/or Figgie

International, to achieve the goals and/or objectives set

forth in the documents that you have provided us with,

including PRO FORMA III-A?

Any additional documents regarding the "Neutral

Plan" in your files or in those of Figgie International are

requested.

Thank you for your cooperation.

This moved Gullo to respond as follows on May 19, 1994:

Sab tS RAD Ce Rectibesdaltak tend

tS iit Laat os

eS aes Se ca a one OY tg

63a

Reference: Your letter dated 05-11-94

Dear Mr. Preuett:

We have responded to your letter dated 04-22-94.

via our letter dated 04-29-94. In our letter, we answered

your questions regarding American LaFrance Fire

Protection (a business segment of Interstate

Engineering, a division of Figgie International) and

included a response to your questionnaire. Jn your letter

of 05-11-94, what specifically is it that you are alleging

we did not respond to?

There is no need for me to AGAIN re-review our

files for any documents. I stated in my April 22, 1994

letter to you that I had already done this. That is how I

located the document titled "PRO-FORMA III-A,

NEUTRAL OPERATIONS". Your request that I

AGAIN review documents and files already reviewed

is burdensome and I believe an attempt by you to waste

my time and resources.

Regarding the document "PRO-FORMA III-A,

NEUTRAL OPERATIONS" it is a complete document.

The only part of the document that I did not provide to

you is a Profit and Loss Summary due to the Neutral

Operations Plan, for the years 1993 through 1997. This

document contains confidential and proprietary

financial information, which you have no need of, nor

right to.

The document "PRO-FORMA III-A," was prepared

in the November 1992 by the President and Controller

of "Automatic" Sprinkler.

"PRO-FORMA III" is just a numbering scheme

developed by Figgie International for identifying

projects within the divisions. The number scheme is as

follows:

PRO-FORMA I--These are projects that involved

64a

the consulting firm of Boston Consulting Group.

"Automatic" Sprinkler had no such projects.

PRO-FORMA III--These are projects that involved

the consulting firm of DeLoitte & Touche. "Automatic"

Sprinkler had no such projects.

PRO-FORMA III--These are projects that were

being handled solely by the given division.

"Automatic" Sprinkler had no three projects: PRO

FORMA III-A, Neutral Operations Plan; PRO FORMA

II-B, Service Operations Plan; and PRO FORMA

IlI-C, International Expansion Plan, PRO FORMA

II-B and C are not related to any union nor labor

relations and are therefore, not provided to you.

PRO-FORMA IV--These are projects that involved

capital expenditures, "Automatic" Sprinkler had no

such projects.

Regarding your question about "What specific

actions have been taken by "Automatic" ... to achieve

the goals and/or objectives set forth...", I suggest you

re-read all the correspondence and information we have

been supplying to you. The correspondences and

information state what actions "Automatic" has and is

taking.

Please advise if you are available to meet and

discuss the terms and conditions of a unit of employees

restricted to welders at the Monroe, Indiana fabrication

shop of "Automatic" Sprinkler and whether you wish to

meet to discuss the specific aspects of the "Automatic"

business plan which are appropriate for purposes of

collective bargaining.

Local 669's above-noted requests for information to

ASCOA are reasonably related to Local 669's function as a

collective-bargaining representative and to union contract

65a

enforcement and must therefore be produced.‘ I am inclined to

agree with Respondent that it had in considerable part

responded to Local 669's requests referred to in the complaint

and detailed above, but the refusal to furnish Pro Formas III-B

and C, which are part of the "Neutral plan" and thus of use to

Local 669 in evaluating the situation confronting it, was an

impermissible refusal to furnish relevant information. I have

noted that Local 669, simultaneously with these requests, was

asking for information on various and sundry other matters, all

of which seemed to have been appropriately replied to.

Thereafter, Local 669 and Respondent continued to

exchange letters concerning Respondent's disposition of its

sprinkler fitters. The Respondent requested negotiations, but

none took place. Although the letters of Respondent to the

various charging Locals proposed bargaining on Respondent's

decision to subcontract all the collective-bargaining unit's work

and its effects on union member employees, it is absolutely

clear from the many statements and letters of Respondent, as

well as its answers to complaints issued, that Respondent

always took the position its decision was irrevocable and not a

bargainable issue. Respondent did, however, offer to bargain

over the effects of its action. This was not acceptable to Local

669 or any of the other Charging Locals, thus the matter came

before me for trial.

Local 120

ASCOA President Owen Stout directed the following letter

to Lawrence Smith, financial secretary-treasurer of Local 120,

on January 28, 1994:

4NLRB v. Acme Industrial Co., 385 U.S. 432 (1967); NLRB v.

Truitt Mfg. Co., 351 U.S. 149 (1956).

66a

This is to serve notice that "Automatic" Sprinkler

Corporation of America intends to terminate the

Agreement presently between it and your Union,

effective with the termination dated April 15, 1994.

You are further notified that "Automatic" Sprinkler

Corporation of America has made a good-faith business

decision to permanently and unequivocally alter the

basic direction of its business whereby it will no longer

employ persons represented by your Union in the

installation, alteration, maintenance, repair and service

of the "Automatic" Sprinkler fire control systems. It is

the intention of "Automatic" Sprinkler Corporation of

America to implement that fundamental change in its

business effective April 1, 1994. In the event that you

desire to discuss this business decision and the effects

thereof on members of your Union who are or were

employed by "Automatic" Sprinkler Corporation of

America, please give me a call. You may be assured the

Company will negotiate in good faith with you

concerning this business decision and its effects on

those employees affected by the decision.

Smith replied to Stout's letter on February 7, 1994, as

follows:

Pursuant to the provisions of the Labor

Management Relations Act, as amended, and Article

XVII, of the existing labor agreement with this Union,

you are hereby notified that the Union wishes to discuss

with you the renewal, with modifications of our

existing agreement, effective as of May 1, 1994. If

renewal of the labor agreement or a new agreement is

not entered into by that date, this constitutes notice that

the Union reserves the nght to take such legal action as

67a

the law permits.

This does not constitute an intent to hereby

terminate the existing Welfare and Pension Plans

established by Employer contributions pursuant to

separate agreements and declarations of trust.

i The Union offers to meet and confer with you for

the purpose of discussing these modifications, kindly

acknowledge receipt of this communication indicating

a time and place for said meeting.

ASCOA director of human resources John Gullo replied to

Smith's letter on February 15, 1994, as follows:

In reply to your February 7, 1994 letter offering to

meet and confer with us for the purpose of discussing

modifications to the collective bargaining agreement,

we refer you to our letter dated January 28, 1994, in

which we advised you of the Company's intention to

terminate the agreement effective with its termination

date.

As stated in our letter to you dated January 28,

1994, "Automatic" Sprinkler has made a good faith

business decision to permanently and unequivocally

alter the basic direction of our business whereby we

will no longer employ persons represented by your

Union in the installation, alteration, maintenance, repair

or service of automatic fire control systems.

In our letter dated January 28, 1994, we offered to

negotiate in good faith with you concerning this

business decision and its effects on those employees

affected by the decision.

Our legal counsel is out of town until next week.

When he returns, we will contact you regarding a time

and place to meet to discuss the effects our business

he TN KOA a WD MPa acd ergot gill RE nin Morse hc tant tbe ti Aiba

68a

decision will have on those employees affected by the

decision.

Thereafter, representatives of Respondent and Local 120

met on March 29, 1994, and discussed a contract termination

agreement In April 1994, their lawyers exchanged drafts of

such an agreement, but no such agreement acceptable to both

parties was reached.

Local 692

Respondent sent the same January 28, 1994 letter to Local

692 as it did to Local 120, with the single exception being a

contract termination date of April 30, 1995.

John Gallagher, the business manager of Local 692,

credibly testifies this was the first notice he received from

ASCOA with respect to the iziforniation the notice contained

regarding ASCOA's termination of its contract agreement with

Local 692 and that ASCOA would no longer employ members

of Local 692 to do its sprinkler fitter work (there is no mention

of subcontracting in the letter). He recalls, however, that

Respondent did subcontract two jobs in February 1994, to two

contractors signatory to the Local 692 coiiective-bargaining

agreement.

Local 536

After receiving the same January 28, 1994 letter with the

correct contract expiration date of May 31, 1994, for Local 536

Robert Fique, the business manager and financial

secretary-treasurer of Local 536, sent a letter to Harry Figgie

Jr., chairman of the board of Figgie International, but did not

get areply from him. ASCOA did, however, send him a letter

wat oie Aa ped Nae ain

69a

requesting negotiations. Fique in his response agreed to this

request. Respondent in turn sent Fique another letter, this time

confirming a negotiations’ meeting date of April 28, 1994. He

is credited that this was the first time Respondent told him of

its decision not to use Local 536's members for its sprinkler

work.

Fique met with Respondent's attorney Donald Woodcock,

ASCOA's director of human resources Gullo, and ASCOA's

Baltimore district manager Arthur D. O'Neil on April 28, 1994,

at Respondent's Baltimore office. Fique insisted Respondent

restore his union's collective-bargaining unit before any

negotiations begin. All but 2 of the 14 Local 536 members

employed by ASCOA had by then been laid off. Respondent,

by Attorney Woodcock, took the position it did not have to

reinstate the laid-off employees. Presented with a contract

termination agreement from Attorney Woodcock, Fique refused

to sign it. The meeting ended with the parties maintaining the

same positions they started with. There have been no further

negotiations between Local 536 and Respondent.

Local 542

Ralph Boss, business manager of Local 542, also received

Respondent's January 28, 1994 letter, informing him that

Respondent was going to terminate its contract agreement with

Local 542 upon expiration of their contract. Local 542's

contract expiration date was June 30, 1994. Boss called

ASCOA president Owen Stout and asked for an explanation

why Respondent planned to terminate the agreement. Stout told

him Respondent's new plan was a business decision. On April

5, 1994, Personnel Director Gullo wrote Boss advising his

(Gullo's) letter of January 28, 1994, was notice to open

negotiations regarding Respondent's "business decision and the

70a

effects thereof on your members." As I have heretofore noted,

this language is misleading because Respondent had always

regarded its decision to terminate its contract agreements with

all the unions to be final and not subject to negotiating. All

Respondent was really offering, as its contacts with Local 542

and the other locals demonstrate, was a contract termination

agreement and effects bargaining.

Boss and Jack Braun, a member of the Local 542

negotiating committee, met with ASCOA human resources

director Gullo, Respondent's attorney Woodcock, and Figgie's

manager of employee relations David R. Gross on May 2,

1994, at the Union's office. Boss was presented with a contract

termination agreement which, like that presented to the other

affected Locals, proposed (1) termination of the

collective-bargaining relationship, as of June 30, 1994, (2)

continued recognition of the Union until all bargaining unit

members were terminated, (3) continuance of employee benefit

programs in accordance with the terms of the existing contract,

and (4) good-faith efforts by Respondent to secure the affected

employees employment elsewhere with Respondent's

subcontractors. Boss advised he would forward the document

to his lawyer. The termination agreement was never agreed to.

When Boss inquired if subcontracting would be confined to

union contractors, Attorney Woodcock replied it would not.

There was no change in Respondent's position, nor were there

any agreements reached between the parties.

Local 281

Thomas Collins, business manager of Local 281, received

the same January 28, 1994 letter except for the contract

termination date, which was May 31, 1994 for his union. He is

credited that during a one-on-one meeting with ASCOA

T7la

President Owen Stout on February 7, 1994, Stout confirmed

ASCOA would subcontract its sprinkler fitter work.

Business Manager Collins and his legal counsel met with

Respondent's Representatives Gullo, Gross, and Woodcock on

April 27, 1994. He refused to sign the contract termination

agreement Attorney Woodcock presented to him. He was

advised, as were the others present, that Respondent had no

plans to sign any new collective-bargaining agreement and

would be subcontracting its sprinkler fitter labor work. Collins

urged that Respondent consider the Union's new agreement

with NFSA that was about to be completed and would permit

employer subcontracting. Respondent agreed to take a look at

the agreement Local 281 would reach with NFSA. Collins

agreed to submit the successor agreement to Respondent for

consideration on its completion, and subsequently did so. There

was no response from Respondent's representatives after

Collins sent the NFSA contract to them for review. There were

no further meetings of Local 281 and Respondent on the

matter.

Local 314

The January 28, 1994 letter to Local 314 was the same as

the others except for a contract expiration date of June 30,

1994. According to Michael Poston, the business manager of

Local 314, Respondent's contract with his local had an

Evergreen clause and rolled over and therefore did not expire.

I need not decide this issue. Poston states the January 28, 1994

letter was the first notification he had received that Respondent

was not intending to use members of Local 314 to do its

sprinkler fitter work. He next received an April 5, 1994, letter

from Gullo purporting to be a notice to open negotiations on

Respondent's business decision to permanently terminate its

72a

contract agreement with his union and its effects on members

of Local 314. After some communications between Gullo and

Poston concerning a meeting date, Local 314's attorney advised

Gullo by FAX on April 28, 1994 that the Union did not

recognize the legality of Respondent's business decision and

that a condition precedent to effects bargaining would be the

restoration of the status quo ante. That ended the

communications between the two parties.

Local 699

Stout's January 28, 1994 letter to Local 699, showing a

contract termination date of June 30, 1995, drew a response

from Local 699's attorney requesting discussion of the

Respondent's decision and its effect on Respondent's Local 699

member employees. There were no further communications

between the parties according to Donald Ellefson, business

manager of Local 699.

Local 696

After receiving ASCOA's President Stout's January 28,

1994 letter, which noted a contract expiration date of June 30,

1994, for Local 696, a meeting was scheduled. Richard

Hodavance, business manager of Local 696, two business

agents of the Local, and its attorney met with Respondent's

representatives Gullo, Gross, and Respondent's attorney

Woodcock on May 12, 1994. After Attorney Woodcock

explained Respondent's decision to subcontract sprinkler fitter

labor, Hodavance asked if Respondent's subcontracting would

be limited to union contractors. Attorney Woodcock's response

was that Respondent would not do so, but would subcontract to

reputable contractors. Local 696's attorney asked if Respondent

would enter into a collective-bargaining agreement requiring

pate arpisir’ Ree RIE ego po

73a

Respondent's subcontracting be to contractors that are Local

696 signatories. Respondent declined to so do. Attorney

Woodcock suggested ASCOA might be amenable to project

agreements. Hodavance stated Local 696 had not and would not

enter into project agreemenits. To this statement Woodcock

replied that if that was the case, ASCOA would not employ any

Local 696 employees and would subcontract labor from other

contractors.

There was some discussion of severance pay for members

of Local 696 employed by ASCOA. No agreement was reached

on this or other substantive matters.

Local 483

Local 483's contract agreement with ASCOA expired

August 1, 1993. Respondent, on July 30, 1993, laid off all of its

employees in the collective-bargaining unit represented by

Local 483, and refused to negotiate a successor agreement with

the Local. Nevertheless, ASCOA President Stout sent the

following communications to Local 483, which suggest

Respondent considered itself bound to Local 483 by a

subsequent extension agreement between Local 483 and Castle

Sprinkler Company.

November 28, 1993

Mr. Lloyd C. Barton Business Manager Sprinkler

Fitters & Apprentices, Local 483

23314 Cabot Boulevard

Hayward, CA 94545

RE: "Automatic" Sprinkler Corporation of America

Dear Mr. Barton:

As of July 1, 1993, "Automatic" Sprinkler

Corporation of America had entered into a

74a

joint-employment relationship with Castle Sprinkler

Company. Castle simultaneously offered employment

to all "Automatic" fitters employed at that time for

which there was available work. On behalf of the

joint-employment relationship, Castle Sprinkler

Company has since entered into an extension of the

collective bargaining agreement with Local 483 that it

and "Automatic" were signatory to. It seems to me that

collective bargaining agreement is in full force and

effect as to "Automatic." Inasmuch as "Automatic"

Sprinkler Corporation of America is deemed a

signatory by virtue of the actions of its joint-employer

to that contract, then the union is also bound to the

same terms and conditions with "Automatic."

In the event that you desire to discuss this joint

employment relationship and the effect it has had on

"Automatic's" former employees and your union, please

feel free to give me a call.

"Automatic" Sprinkler Corporation of America

Very truly yours,

Owen G. Stout,

President

and:

November 30, 1993

Mr. Lloyd C. Barton

Business Manager

Sprinkler Fitters & Apprentices Local 483

23314 Cabot Boulevard

Hayward, CA 94545

RE: Picket Line at Dixon University,

Harrisburg, PA Job Site

75a

Dear Mr. Barton:

We have been notified that your local has

established a picket line at our jobsite in Harrisburg,

PA.

The picket line and strike is in violation of the

agreement between "Automatic" Sprinkler Corporation

of America-Castle Sprinkler Company and your local.

As stated in our letter to you dated November 29,

1993, as of July 1, 1993, " Automatic" Sprinkler

Corporation of America had entered into a

joint-employment relationship with Castle Sprinkler

Company. On behalf of the joint-employment

relationship, Castle Sprinkler Company has since

entered into an extension of the collective bargaining

agreement with Local, 483 that it and "Automatic" were

signatory to.

Inasmuch as "Automatic" Sprinkler Corporation of

America is deemed a signatory by virtue of the actions

of its joint-employer to that agreement, then the union

is also bound to the same terms and conditions with

"Automatic".

We request that you please remove the picket line

promptly. Your failure to do so will necessitate legal

action. We hold your local strictly liable for any

damages and costs we may incur due to this illegal

action.

Very truly yours,

Owen G. Stout

President

Barton wrote to President Stout on December 1, 1993

disputing, among other things, ASCOA's theory that ASCOA

) and Castle Sprinkler Company were joint employers. After

further exchanges, Gullo wrote Barton on April 22, 1994, as

76a

follows:

Dear Mr. Barton:

The complaint by the National Labor Relations

Board referenced in your April 13 letter, among other

things, contends that "Automatic" Sprinkler

Corporation of America (ASCOA) and Castle Sprinkler

Company are joint employers of certain employees,

who are members of your Union and are covered by a

Collective Bargaining Agreement. ASCOA has

acknowledged that certain facts could support that

theory and on that basis contends that its joint

employer, (under the theory espoused by your Union

and the National Labor Relations Board), Castle

Sprinkler Company has entered into a Collective

Bargaining Agreement with your Union for a one (1)

year term which expires July 31, 1994.

This being so, employees of ASCOA have been

employed, consistent with its business operations, by its

joint employer, Castle Sprinkler Company.

Accordingly, there is no basis for reinstating and

making whole employees who were not terminated but

were simply transferred from the payroll of one joint

employer to the payroll of another; a mere

administrative detail unrelated to the actual

employment status of the employees.

ASCOA has now determined that it desires to

terminate any such joint employment relationship with

agreement with Castle Sprinkler Company, as alleged,

or any other sprinkler company, effective August 1,

1994,

Meanwhile, ASCOA believes it is important that

the parties meet to discuss these important issues.

Please provide me with all of your available dates for a

PROP Posse eg A

77a

meeting during the months of May and June for the

purpose of discussing the termination of the joint

employment relationship between ASCOA and Castle

Sprinkler Company and the negotiations of the

subcontracting of installation and repair work; and the

decision and the effects of that decision on the

ASCOA/Castle Sprinkler Company employees.

Local 676

ASCOA president Stout's January 28 letter to Local 676

noted its contract expiration date was July 31, 1994. The

Local's counsel on April 6, 1994, requested subcontracting

information from Stout. This request was replied to by Gullo's

letter of April 8 containing information of the nature requested.

Pursuant to a further request from Local 676, Gullo furnished

the Local with additional information. Local 676 then withdrew

a charge it had filed on April 18, 1994, alleging a refusal of

Respondent to provide the Union the information it had

requested.

Local 709

On May 26, 1993, Stout wrote James Duffy, Business

Manager of Local 709, that the Local's contract would

terminate on September 1, 1993, in accordance with its terms.

Thereafter, Local 709 negotiated a contract extension date to

August 31, 1995, with NFSA. By virtue of its earlier

withdrawal from NFSA, the Respondent was not party to this

extended agreement and declined to agree on an extended

agreement with Local 709. The members of the bargaining unit

at ASCOA represented by Local 709 were laid off on August

31, 1993. Many, if not all of the members, were then employed

by a union employer who was the subcontractor succeeding to

78a

the same kind of sprinkler fitter labor previously done by

ASCOA with the aforesaid unit members.

Duffy subsequently met with Stout in November 1993.

Stout then told him, as had Michael May, ASCOA's operations

manager in Los Angeles, in August 1993, that ASCOA was

subcontracting its sprinkler fitter labor. Duffy credibly states

May also told him in February 1993, when May was the district

manager for ASCOA in Los Angeles, California, that

Respondent had a 5-year plan to become a general contractor.

May added he did not know what that meant, but that was what

he had been told.

A memo from Gullo to Respondent's counsel and manager

of employee relations, Gross, dated June 8, 1994, relates the

following concerning Duffy's November 10, 1993 meeting with

Stout:

On or about November 10, 1993, Duffy did visit

our Broadview Heights office to informally meet with

Stout. They discussed the construction market in Los

Angeles. The general feeling was that the market was

very bad and would not likely improve in the near

future.

Stout explained to Duffy our plan to subcontract our

labor.

Duffy asked if "Automatic" would be willing to

sign a collective bargaining agreement with local 709.

Stout remarked the this was a subject that needed to be

discussed in formal negotiations and was not something

he could commit to without discussion with individuals

at Figgie International.

That is all Stout recalls regarding the meeting.

79a

Gullo's memo in this regard is reliable hearsay with

probative worth. American Art Clay Co., 148 N.L.R.B. 1209,

1219 fn. 16 (1964).

Respondent has refused to negotiate successor bargaining

agreements with all of the Charging Locals.

After termination of the various Local's contracts, a number

of the ASCOA employees who had lost their jobs with the

implementation of the "Neutral Plan" became subcontractors to

ASCOA with the aid of ASCOA including the use of vehicles

and other equipment which the subcontractors bought or leased

from Respondent. Some of ASCOA's new subcontractors

undertook that role at the suggestion and encouragement of

ASCOA officials who were instructed to so do by their

superiors. Many other employees became employees of

subcontractors. This is not surprising given the special

expertise they possessed in sprinkler fitting. Other unit

employees became salaried inspectors for ASCOA.

B. Discussion and Conclusions

1. The refusal to furnish information

The Board in W-L Molding Co., 272 N.L.R.B. 1239, 1240

(1984), succinctly summarized the law applicable to situations

like that here presented in the following terms:

[A] broad discovery-type standard is applicable to

requests for information relevant to a union's functions

of negotiating and policing compliance with a

collective-bargaining agreement. NLRB vy. Acme

Industrial Co., 385 U.S. 432, 437 (1967); General

Motors v. NLRB, 700 F.2d 1083, 1088 (6th Cir. 1983);

80a

NLRB v. Rockwell-Standard Corp., 410 F.2d 953, 957

(6th Cir. 1969). "It is not the Board's function in this

type case to pass on the merits of the Union's claim that

Respondent breached the collective bargaining

agreement or . . . committed an unfair labor practice.”

NLRB v. Rockwell-Standard Corp., 410 F.2d at 957.

"Thus, the union need not demonstrate actual instances

of contractual violations before the employer must

supply information." Boyers Construction Co., 267

N.L.R.B. 227, 229 (1983). "Nor must the bargaining

agent show that the information which triggered its

request is accurate, nonhearsay, or even ultimately

reliable." Jbid. "The Board's only function in such

situation is in ‘acting upon the probability that the

desired information was relevant, and that it would be

of use to the union in carrying out its statutory duties

and responsibilities." NLRB v. Rockwell-Standard

Corp., 410 F.2d at 957 quoting NLRB v. Acme

Industrial Co., 385 U.S. at 437. Accord: General

Motors v. NLRB, 700 F.2d at 1088. [Footnote omitted. |

The facts before me suggest the Union's requested and denied

information is arguably relevant and would be of use to Local

669 in its role as a collective-bargaining representative of

Respondent's employees. The failure to completely provide that

information therefore violated Section 8(a)(5) and (1) of the

Act as the complaint alleges.

With respect to Respondent's suggestion that Local 669's

numerous requests for various other information unrelated to

the requests at issue herein were intended to hinder or impede

Respondent in the negotiating process and therefore caused

Local 669 to lose any statutory right it had to the information

here requested, citing NLRB v. Wachter Construction, 23 F.3d

8la

1378 (8th Cir. 1994), I first note with respect that I am bound

to follow Board precedent,’ and here the Board disagreed with

the circuit court.° Moreover, the record in the instant case

shows no persuasive evidence other than the bulk of the

requests (to which Gullo responded with no apparent difficulty)

to support a harassment theory whereas Wachter contained

clear evidence of deliberate harassment by a union official.

There is no solid evidence that Local 669 was posing its

various requests for the purpose of harassment or that its

requests, which were largely responded to, were irrelevant to

any legitimate union concern. That Respondent may suspect

harassment does not make it so.

2. The "Neutral Plan,” its purposes and

implementation

Respondent would have me believe that the development

and implementation of the "Neutral Plan" was pure as driven

snow, free from discriminatory intent, and a fundamental

change in Respondent's business. Exceptionally able counsel

for the Respondent skillfully argued that conclusion. I cannot

agree, although I admire the advocacy. Reduced to its simplest

terms, what we have here is a Respondent eager to dispose of

union representation of its employees and the resulting

bargaining agreement restricting it from freewheeling in its

contracting for the installation of its product. Pro Forma III-A

clearly demonstrates Respondent's dislike of the restrictions

imposed on it by union representation of its employees, and its

desire to be a union-free employer. Respondent had

contemplated the possibility of going nonunion for some time

*Jowa Beef Packers, Inc., 144 N.L.R.B. 615 (1963).

° Wachter Construction, Inc., 311 N.L.R.B. 215 (1993).

82a

prior to its adoption of the "Neutral" plan, and after some

misgivings, took the plunge. Thereafter, as its messages to its

supervisors and its assurances to union agents of continuing

relations demonstrate, Respondent went to considerable pains

to mislead the unions into believing that it was merely

extending its subcontracting. The suspicion of Business

Manager Simpson of Local 669 and others that Respondent was

up to something more, and the advice ASCOA's president,

Stout, gave to Duffy after Respondent had laid off all of its

Local 709 employees that it would henceforth be a general

contractor, are no substitute for Respondent's prior notice of its

real intent to be nonunion. Respondent had carefully avoided

any overt subcontracting to nonunion employers prior to its

January 28, 1994 notice of intention to destroy all its union

sprinkler fitter units as circumstances permitted, i.e., contract

terminations, even to __ the extent of misleading its district

managers via its February 11, 1993 memo assertion the new

program would force Respondent to work directly with the

Unions for the benefit of both. Its concealment commenced

with its notice to NFSA that it intended to bargain individually

with the Unions, continued with its reassurances to Simpson

that there would be contractual relationships with Local 669 in

the future, and its care in avoiding overt nonunion connections

until its dramatic announcement of January 28, 1994. That

announcement itself was designed to mislead the Unions. It

invited bargaining on Respondent's decision to no longer

employ the Locals' members, but the record clearly shows

Respondent had no intention of bargaining on its decision. All

Respondent was willing to do was discuss the effects of its

decision on the laid-off employees and secure a written

agreement from the Unions to _ terminate its

collective-bargaining relationships.

83a

3. Affirmative defenses

Respondent raises several defenses to justify its behavior.

It contends that clauses in the various collective-bargaining

agreements permitting Respondent to subcontract to other

employers who have collective-bargaining agreements with the

unions constitute waivers of bargaining rights concerning

subcontracting during the term of those agreements. Although

the clauses do permit subcontracting to other employers

signatory to incumbent unions' agreements, they certainly do

not permit subcontracting to nonunion firms, nor do they

prohibit bargaining on subcontracting upon the expiration of

the collective-bargaining agreements. They do not waive the

right to bargain over a decision to destroy bargaining units

through the use of subcontracting or the implementation of

such a decision.’

The Respondent also contends the Union's waived their

rights to bargain over Respondent's decision by failing to

request bargaining after learning of Respondent's "General

Contractor Decision" throughout the course of 1993. The fact

is that all the Unions really knew was that there was an increase

in subcontracting by Respondent in some areas. Respondent

deliberately concealed its decision to totally sever connections

with the Unions until January 28, 1994, and even then, as

above noted, falsely advised the Unions its decision was

bargainable. I do not believe the Unions were required to

decipher the various conflicting signals given them by the

Respondent or its unrevealed intentions. It was Respondent's

"Respondent's reliance on Mine Workers District 3] y. NLRB,

131 L.R.R.M. 3131 (D.C. Cir. 1989), is misplaced because the facts in that

case bear no resemblance to those presently before me.

84a

obligation to promptly and completely advise the Unions of its

plans to no longer hire union member sprinkler fitter laborers

when its plans were solidified if it expected the Unions to

request bargaining on the decision. By depriving the Unions of

such prompt knowledge and embarking on a course of

deception, the Respondent forfeited any claim it might have

otherwise had that the Unions waived their rights to bargain on

its decision.

Respondent further urges that the Charging Parties waived

the right to bargain on the "General Contractor Plan" by failing

to respond to Respondent's requests to bargain with them

accompanying its written notices of implementation of its plan.

The quick response to this assertion is that a party is not

required to engage in a futile act. The record firmly establishes

that the Respondent had absolutely no intention of bargaining

about the "Neutral Plan.” The Unions did not waive bargaining

rights by failing to take part in Respondent's charade.

The argument of Respondent that, because Locals 120, 542,

696, and 676 had an 8&(f) agreement with Respondent,

Respondent was free under John Deklewa & Sons, 282

N.L.R.B. 1375 (1987), to terminate the contracting relationship

at the contract's expiration date without notice or invitation to

bargain is accurate, but that does not insulate Respondent from

liability for conduct violative of Section 8(a)(3) of the Act I am

persuaded, for reasons set forth below, Respondent's conduct

was motivated by antiunion animus and violated Section

8(a)(3) of the Act with respect to all of the affected employees

represented by all the Charging Unions, whether represented

pursuant to a 9(a) or 8(f) arrangement.

As a separate defense, Respondent contends complaint

allegations are time barred by Section 10(b) of the Act, which

85a

provides, in relevant part, "No complaint shall issue based upon

any unfair labor practice occurring more than six months prior

to the filing of the charge with the Board and the service of a

copy thereof upon the person against whom such charge is

made." It is, however, well settled that the deliberate

concealment of unlawful conduct tolls the 10(b) period and the

burden is on the respondent to show the charging party was

clearly and unequivocally put on notice of the conduct

complained of prior to the commencement of the six months

period set forth in the statute. Here Respondent concealed its

decision to totally dispose of union representation of its

sprinkler fitters until January 28, 1994. I do not believe the

Unions were required to affirmatively ferret out every intention

of the Respondent which it even withheld from its own

supervisors, note the failure of Respondent to even advise its

director of human resources, Gullo, of the existence of its Pro

Forma documents until after it advised the Unions of its plans

on January 28, 1994. Accordingly, I conclude Section 10(b)

provides no defense to Respondent's conduct.

Concluding Findings

I agree with General Counsel that the primary aim of

Respondent, as shown by the content of Pro Formas III-A and

B and the concealment of its ultimate intent from not only the

Unions but its own managers, was to rid itself of union

representation in order to indulge itself in nonunion

subcontracting. This conduct, in the words of the Supreme

Court,’ was "so inherently distractive of employee interests’

"See, e.g., Barnard Engineering Co., 295 NLRB. 226, 249

(1989).

°NLRB v. Great Dane Trailers, 388 U.S. 26 (1967).

86a

that it may be deemed proscribed without need for proof of an

underlying improper motive . . . [and] carries with it

"unavoidable consequences which the employer not only

foresaw but which he must have intended" and thus bears "its

own indicia of intent."

Furthermore, General Counsel has shown that the desire to

rid itself of the Local Unions, thereby discouraging union

activity, was at the very least one of the motivating factors in

its decision to become a general contractor and subcontract all

its sprinkler installation work. Respondent therefore is obliged

to show by a preponderance of the evidence it would have done

so in the absence of union representation of its employees.

Wright Line, 251 N.L.R.B. 1083 (1980); NZRB vy.

Transportation Management Corp., 462 U.S. 393 (1983).

Respondent has not carried this burden. I therefore find

Respondent's conduct in terminating its union member

employees, severing its relationships with the contracting

unions, turning toward nonunion subcontracting, and

concealing its ultimate plan from the Unions violated Section

8(a)(3) and (1) of the Act whether the reasoning in Great Dane,

supra, or Wright Line, supra is applied.

Respondent also violated Section 8(a)(5) of the Act by its

conduct of not giving the 9(a) unions prior notice of and

opportunity to bargain on its decision to subcontract all its

sprinkler installation work and to thereby replace its union

employees with those of nonunion or other more malleable

employers. The Supreme Court noted in Fibreboard Corp. v.

NLRB, 379 U.S. 203, 215 (1964) that: "the replacement of

employees in the existing bargaining unit with those of an

independent contractor to do the same work under similar

conditions of employment--is a statutory subject of collective

bargaining." The Board has followed that precedent where the

87a

employer's decision to subcontract does not turn on a change in

the scope, nature, or direction of its business and is amenable

to collective bargaining. Executive Cleaning Services, 315

N.L.R.B. 227 (1994); Compu-Commnications, 315 N.L.R.B.

216 fn. 2 (1994); Acme Die Casting, 315 N.L.R.B. 202 fn. 1

(1994). Contrary to Respondent's argument, all that happened

here was a substitution of one group of workers to perform the

work of another, and not a change in the scope and direction of

the enterprise which continues to manufacture, sell, and arrange

the installation of sprinkler systems which it subsequently

inspects with its own employees. The only difference is that

subcontractors’ employees now do the same work as ASCOA's

sprinkler fitters had previously done, and utilize the same

vehicles, tools, and other equipment ASCOA employees had

used to do the same type work. The above-quoted statement in

Fibreboard fits this situation exactly, and Respondent's

concealment of its decision and the failure of Respondent to

give timely notice to the Unions of its decision and thus

provide them with an opportunity to bargain when it yet had

some bargaining power did not satisfy its statutory obligation.

Your Host, Inc., 315 N.L.R.B. No. 40, slip op. at 3 (Oct. 6,

1994). Accordingly, I find that the Respondent (Figgie and

ASCOA) violated Section 8(a)(5) and (1) of the Act by

adopting and implementing its decision to subcontract all its

sprinkler fitter labor without giving prior notice to the 9(a)

unions named in this decision and without providing them with

an adequate opportunity to bargain over the decision and/or its

effects on ASCOA employees. Moreover, by rejecting the

requests of the Sec. 9(a) unions, whose majority status is not in

question, to bargain successor agreements, Respondent again

violated Section 8(a)(5).

I have previously noted that Respondent failed and refused

to furnish Local 669 with certain information to which it was

88a

entitled because that information as relevant and necessary to

Local 669's function as the collective-bargaining representative

of certain of ASCOA's employees and for contract enforcement

efforts. I therefore now find the failure and refusal of

Respondent to furnish Local 669 with that information violated

Section 8(a)(5) and (1) of the Act. See Acme and Truitt, supra.

General Counsel also alleges Respondent unlawfully

refused to furnish Local 669 with information, citing the

following February 15, 1994 letter from Local 699's attorney to

ASCOA's president, Owen Stout, as the unanswered request.

Dear Mr. Stout:

This office represents Local 699 and they have

asked us to review your letter of January 28, 1994

directed to Don Ellefson, the business manager.

They have requested I correspond with you to

express their desire to discuss the business decision set

forth in your letter and the effect thereof on the

members of Local 699 who may be employed by

Automatic Sprinkler. They need to clearly understand

the intentions of Automatic Sprinkler and acquire as

much information as possible to determine the effects

on the employees and the impact on the collective

bargaining agreement.

They would request a meeting with you or your

representative as much in advance of the April 1, 1994

date as may be possible. Please feel free to contact Mr.

Ellefson directly to establish the manner and time of

meeting.

Your cooperation in this regard will be much

appreciated.

I do not believe this letter conveys an express request sufficient

89a

to trigger Respondent's obligation to reply. Accordingly, I find

no merit in the allegation.

The termination of one McGuire and other employees

specifically named as discriminatees in the complaint was

caused by Respondent's implementation of its subcontracting

plan, which violated Section 8(a)(5), (3), and (1) of the Act.

The discharge of these employees, as well as all other sprinkler

fitters terminated by Respondent in the illegal implementation,

is therefore a violation of Section 8(a)(3) of the Act.

CONCLUSIONS OF LAW

1. The Respondent (Figgie and ASCOA) is a

single-integrated business enterprise and an employer engaged

in commerce within the meaning of Section 2(2), (6), and (7)

of the Act.

2. The Local Unions enumerated in the case caption are

each labor organizations within the meaning of Section 2(5) of

the Act.

3. Each of the Local Unions was at all times material to this

proceeding party to a collective-bargaining agreement covering

a unit of Respondent's sprinkler fitters.

4. By terminating the employees represented by all the

Local Unions who filed the charges in this proceeding and

severing its contractual relationships with said Local Unions in

order to engage in nonunion subcontracting, thereby

discouraging union membership, Respondent violated Section

8(a)(3) and (1) of the Act.

5. By unilaterally subcontracting unit work, by refusing to

90a

bargain concerning successor agreements with Locals 669, 692,

536, 218, 314, 699, 483, and 709, and by failing to give them

prior notice and an opportunity to bargain, and by refusing to

bargain with them over the decision and effects of

subcontracting all the work being performed for Respondent by

its employees represented by said Local Unions, and by

terminating said employees, Respondent violated Section

8(a)(5) and (1) of the Act.

6. By refusing to furnish Local Union 669 with requested

information that is relevant and reasonably necessary to its

function as the collective-bargaining representative of a unit of

Respondent's employees, the Respondent violated Section

8(a)(5) and (1) of the Act.

7. The aforesaid unfair labor practices affect commerce

within the meaning of Section 2(6) and (7) of the Act.

THE REMEDY

In addition to the usual cease-and-desist and notice-posting

requirements, I shall recommend Respondent be: (1) required

restore all of its subcontracted operations previously performed

by employees represented by the Local Unions enumerated in

this Decision, whether they be Section 9a) or 8(f)

representatives; (2) reinstate all employees terminated as a

result of the subcontracting, and make them whole for

monetary losses caused by the subcontracting. Backpay, with

interest, shall be computed in the manner prescribed in F. W.

Woolworth Co., 90 N.L.R.B. 289 (1950), with interest

computed as prescribed in New Horizons for the Retarded, 283

9la

N.L.R.B. 1173 (1987); (3) bargain with the 9a)

representatives concerning its decision to subcontract and its

effects on unit employees and for successor agreements; and

(4) furnish the information to Local 669 which I have found

was unlawfully withheld. I shall also recommend a broad

cease-and-desist order because of the national scope and

seriousness of Respondent's unfair labor practices. Hickmott

Foods, 242 N.L.R.B. 1357 (1979).

On these findings of fact and conclusions of law and on the

entire record, I issue the following recommended!!

ORDER

The Respondent, Figgie International Inc. and "Automatic"

Sprinkler Corporation of America, a single-integrated business

enterprise, its officers, agents, successors, and assigns, shall

1. Cease and desist from

(a) Terminating union-represented employees whether their

representative enjoys 9(a) or 8(f) status, and unilaterally

severing bargaining relationships with unions selected by

employees as their sole collective-bargaining representative, in

accord with Section 9(a) of the Act for the purpose of engaging

Under New Horizons, interest on and after January 1, 1987,

is computed at the "short-term Federal rate" for the underpayment of taxes

as set out in the 1986 amendment to 26 U.S.C. Sec. 6621.

"If no exceptions are filed as provided by Sec.102.46 of the

Board's Rules and Regulations, the findings, conclusions, and recommended

Order shall, as provided in Sec. 102.48 of the Rules and Regulations, be

adopted by the Board and all objections to them shall be deemed waived for

all purposes.

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08s

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