# Appendix — Advanced Stretchforming International, Inc. v. National Labor Relations Board > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386014_1916%3A2 ## Record - **Collection:** Supreme Court brief - **Document type:** Appendix - **Published:** January 1, 2001 - **Citation:** 534 U.S. 948 ## Text la APPENDIX A UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT NO. 97-71047 NLRB NO. 21-CA-29104 ORDER AND AMENDED OPINION NATIONAL LABOR RELATIONS BOARD Petitioner, and INTERNATIONAL UNION, UNITED AUTOMOBILE, AEROSPACE AND AGRICULTURAL IMPLEMENT WORKERS OF AMERICA (UAW), AMALGAMATED LOCAL UNION No. 509, AFL-CIO, Petitioner-Intervenor, V. ADVANCED STRETCHFORMING INTERNATIONAL, INC., Respondent. On Application for Enforcement of an Order of the National Labor Relations Board Argued and Submitted April 13, 1999 — Pasadena, California 2a Filed April 4, 2000 Amended Opinion Filed November 22, 2000 Before: Robert Boochever, Diarmuid F. O’Scannlain and A. Wallace Tashima, Circuit Judges. Opinion by Judge Boochever; Dissent by Judge O’Scannlain COUNSEL Sharon IJ. Block, National Labor Relations Board, Washing, D.C., for the petitioner. Henry M. Willis, Schwartz, Steinsapir, Dohrmann & Somers, Los Angeles, California, for the petitioner- intervenor. Larry Walraven, O’Melveny & Myers, Newport Beach, California, for the respondent. ORDER Both Advanced Stretchforming International, Inc. (“ASI’) and the National Labor Relations Board (the “Board”) filed petitions for rehearing and rehearing en banc. The panel requested a response to these petitions and that response was filed and circulated to panel members and to all active judges. A judge of the court called for a vote on whether the case should be reheard en banc, but voting was suspended on the panel’s indication that its opinion would be amended. By unanimous vote, the panel hereby GRANTS ASI’s petition for rehearing and GRANTS the Board’s 3a petition for rehearing. Accordingly, the Original opinions filed on April 4, 2000 as NLRB v. Advanced Stretchforming Int'l, Inc., 208 F.3d 801 (9th Cir. 2000), are hereby AMENDED. OPINION BOOCHEVER, Circuit Judge: We decide whether a successor employer forfeits its unilateral right to set initial terms of employment when it announces to the former employees of its unionized predecessor that there will be no union at the new company should they apply to work there. I Advanced Stretchforming International, Inc., (“ASI”) manufactures structural body components used in the aerospace industry at a facility in Gardena, California. Prior to ASI’s tenure, Aero Stretch, Inc. (“Aero”) engaged in the Same operations at the same site. Aero and the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America, Local No. 509 (“UAW” or “Union”) entered into a collective bargaining agreement (“CBA”) for production and maintenance employees effective August 19, 1991 through August 19, 1994. On June 11, 1992, Avro filed for bankruptcy under Chapter 11 of the Bankruptcy Act. Aero continued to operate, but gradually laid off employees. UAW representative Duane LaMothe contacted Aero’s management over the ensuing months to check on Aero’s bankruptcy status. At a November 19, 1992 hearing, the bankruptcy court converted Aero’s bankruptcy to a Chapter 7 case and auctioned its assets. 4a Stephen Brown submitted the successful bid. As a condition of the sale, the bankruptcy judge ordered Aero to cease operations and to terminate all employees by November 30. On November 30, Brown called Aero’s Manufacturing Director, Eric Cunningham, and told him to inform Aero employees that they could report to the plant the next day to interview for positions with ASI, which Brown incorporated on December 1. Cunningham called a meeting of Aero’s employees and informed them that the plant had been purchased, and that all employees would be terminated at the end of the day, but that they should report to the plant the next day to interview for positions if they were interested in working for ASI. Two employees present at the meeting, and LaMothe, who was also present at the meeting, testified that Cunningham told the employees that there would be “no union, no seniority, no nothing” at ASI. Cunningham denied making such a statement, but testified that at some point he told the employees that ASI would not assume Aero’s CBA. On December1, Brown interviewed and _ hired Cunningham as ASI’s general manager. Brown and Cunningham then interviewed Aero’s former employees who came to the plant that day. Brown required each applicant to sign the following statement: I UNDERSTAND THAT I WILL BE WORKING UNDER NEW TERMS AND CONDITIONS WHICH IS NOT A CONTRACT AND IS SUBJECT TO CHANGE. NEW COMPANY IS NOT ASSUMING COLLECTIVE BARGAINING AGREEMENT. YOU MAY BE EMPLOYED BY NEW COMPANY ON AN AT WILL BASIS. Sa DETAILED LIST OF TERMS AND CONDITIONS IS TO FOLLOW. During the interviews, Brown informed each applicant that the new terms of employment would include different wages, no 401(k) plan, less vacation time, fewer holidays, no medical or dental benefits and at-will employment. ASI hired eight of the seventeen former Aero production and maintenance employees. Four were hired at Aero’s hourly rate; two received more and two received less. UAW sent certified letters to ASI on December 3, 7, and 11, demanding that ASI recognize the Union as its employees’ bargaining representative. UAW filed an unfair labor practice charge against ASI on December11. On December 14, ASI conducted a poll of its employees regarding their desire for continued union representation. The employees voted against union representation. That same day, ASI’s counsel wrote the union a letter advising that ASI did not recognize the UAW as the representative of its employees. On April 30, 1993, the National Labor Relations Board (“NLRB” or “Board”) issued a complaint and notice of hearing against ASI. After conducting a hearing, an Administrative Law Judge (“ALJ”) found that ASI had violated sections 8(a)(1) and (5) of the National Labor Relations Act (“NLRA”), 29 U.S.C. §§ 158(a)(1), (5), by (1) making the “no union” Statement at the November30 meeting, (2) improperly polling its employees regarding union representation on December 14, and (3) refusing to recognize and to bargain with UAW, as ASI was required to do as an alleged “successor” employer to Aero. The ALJ, however, rejected the General Counsel’s claim that ASI had further violated the NLRA by setting the initial terms of employment on December 1. The ALJ reasoned that under NLRB v. Burns 6a Int'l Sec. Serv., Inc., 406 U.S. 272 (1972), ASI had the nght to establish initial employment terms when it hired Aero’s former employees. The NLRB’s General Counsel appealed the ALJ’s decision that ASI did not violate the NLRA by setting the initial hiring terms, and the Board reversed. The Board reasoned that ASI had forfeited its mght to set the initial terms of employment because it unlawfully “block[ed] the process by which the obligations and rights” of a successor are incurred when it made the “no union” statement. Advanced Stretchforming Int'l, Inc., 323 N.L.R.B. 529, 530-31 (1997). Thus, the Board held that ASI unlawfully and unilaterally changed the employment terms without first bargaining with the union. /d. at 531. Based on its conclusions, the Board adopted the ALJ’s recommended order, but added to it, directing ASI, “in order to remedy [the] unlawful unilateral changes,” to rescind any changes in employees’ terms and conditions of employment unilaterally effectuated and to make the employees whole by remitting all wages and benefits that would have been paid absent [ASI’s] unlawful conduct, until [ASI] negotiates in good faith with the Union to agreement or to impasse. Jd. The Board timely applied to this court for enforcement of its order. ASI does not challenge the Board’s ruling on the “no union” statement, the union representation poll and the refusal to bargain with UAW. Accordingly, the Board’s “finding of those unfair labor practices violations must be taken as established.” Jdaho Falls Consol. Hosp., Inc. v. NLRB, 731 F.2d 1384, 1386 (9th Cir. 1984). We grant summary enforcement of the Board’s order with respect to those findings. See Gardner Mech. Serv., Inc. v. Ta NLRB, 115 F.3d 636, 643 n.2 (9th Cir. 1997).' ASI does not dispute the Board’s determination that it committed separate violations of NLRA sections 8(a)(1) and (5) by unilaterally changing the terms of its carryover workforce’s employment. II When ASI employed a majority of its workforce from Aero’s former employees and carried on Aero’s business essentially unchanged, ASI became a “successor” employer to Aero. See Kallman v. NLRB, 640 F.2d 1094, 1100 (9th Cir. 1981). A successor is obligated to recognize and bargain with the representative of its predecessor’s former employees. See NLRB v. Burns Int'l Sec. Serv., Inc., 406 U.S. 272, 280-81 (1972). Ordinarily, however, a successor is not bound by its predecessor’s collective bargaining agreement, and is free to set the initial terms of employment for its workers without first consulting with their union. See Burns, 406 U.S. at 294-95. Nevertheless, the Board found that ASI “forfeited” its right to set initial terms without first bargaining when it made the statement that there would be “no union” at the new company.” The forfeiture doctrine deprives a successor of its rights under Burns when the successor has failed to fulfill its corresponding Burns obligations. The Board has explained: ' To remedy these violations, the Board’s order requires that ASI (1) cease and desist these unfair labor practices; (2) recognize and bargain with UAW; (3) make various company records available for Board inspection; (4) post notices at its facilities informing its employees that it will no longer engage in any unfair labor practices; and (5) file a sworn certification with the NLRB’s Regional Director that it has taken steps to comply with the order. ASI does not challenge these remedies 2 The dissent engages in a semantical attempt to equate the “forfeiture” of the right to set initial employment terms with a “penalty.” The “forfeiture” in this case, however, merely places the parties in the position where they would have been had ASI refrained from engaging in improper conduct. Thus, the “forfeiture” qualifies as a permissible remedy. 8a The fundamental premise for the forfeiture doctrine is that it would be contrary to statutory policy to confer Burns nights on an employer that has not conducted itself like a lawful Burns successor because it has unlawfully blocked the process by which the obligations and rights of such a successor are incurred .... In other words, the Burns right to set initial terms and conditions of employment must be understood in the context of a successor employer that will recognize the affected unit employees’ collective-bargaining representative and enter into good faith negotiations with that union about those terms and conditions. Advanced Stretchforming Int'l, Inc., 323 N.L.R.B. 529, 530 (quotation marks, citation omitted). Courts have approved the Board’s application of the forfeiture doctrine in instances where an employer seeks to avoid obligations of successorship by strategically refusing to hire its predecessor’s employees based on their union membership. See, e.g., Kallman, 640 F.2d at 1102-03; Capital Cleaning Contractors, Inc. v. NLRB, 147 F.3d 999, 1008 (D.C. Cir. 1998); NLRB v. Horizons Hotel Corp., 49 F.3d 795, 806 (ist Cir. 1995); U.S. Marine Corp. v. NLRB, 944 F.2d 1305, 1320 (7th Cir. 1991). In Kallman, for example, we enforced the Board’s finding that a successor forfeited its nght to set initial terms of employment when it refused to hire a certain number of its predecessor’s union employees in order to avoid application of a rule that would have required it to bargain before setting terms. The rule whose application the successor sought to avoid in Kallman was the so-called “perfectly-clear” exception to the ordinary rule of Burns. Under this a a ee - MN 9a exception, a successor must bargain before setting terms when it hires all or substantially all of its initial workforce from the ranks of a represented bargaining unit of its predecessor, it being then “perfectly clear” that a carryover majority desires representation. See Kallman, 640 F.2d at 1102-03; Bellingham Frozen Food, Inc. v. NLRB, 626 F.2d 674, 678-79 (9th Cir. 1980) (“When it is ‘perfectly clear’ that the employer intends to hire a majority of his workforce in a unit represented by a union from the ranks of his predecessor, his duty to bargain with the union commences immediately.”). Had the successor in Kallman not discriminated against its predecessor’s unionized employees, the “perfectly clear” exception would have required it to bargain before setting initial terms. We therefore found it appropriate to treat the successor as if the “perfectly clear” exception had applied, as it would have but for the successor’s anti-union conduct. Kallman, 640 F.2d at 1102-03. The question before us is whether ASI’s “no union” statement “blocked the process by which the obligations of a successor are incurred” in a manner similar to the discriminatory hiring practices to which the forfeiture doctrine previously has been applied. We believe that it did. In Kallman, the successor employer’s discriminatory hiring practices prevented the initial workforce from being constituted from the ranks of the predecessor, preempting the employees’ right to bargain through their union prior to imposition of initial terms. Here, no discriminatory hiring practices prevented ASI’s “perfectly clear” obligation from arising.” Instead, the “no union” statement chilled the invocation of that obligation once it had arisen. Having been * To the contrary, ASI hired its entire initial complement of workers from the ranks of a represented unit of its predecessor. The Board’s order, however, was not based on the “perfectly clear” exception to Burns. We therefore do not address the applicability of that exception. 10a informed when invited to apply for work with ASI that there would be no union at the new company, Aero’s workers may well have believed that employment with ASI was - contingent on abstaining from union representation, including insistence on the might to bargain before ASI imposed initial terms. It was not unreasonable for the Board to conclude, as a practical matter, that the “no union” statement blocked the process by which ASI’s obligations as a successor were incurred. Il To remedy ASI’s failure to consult with the Union before imposing terms, the Board ordered ASI to recognize the Union, and to pay back wages and benefits under the CBA from the time of the violation until ASI negotiated in good faith to a bargain or impasse. Though a successor may forfeit its mght to set initial terms unilaterally when it engages in improper activities to evade the obligations of successorship, the successor has “no obligation to accept his predecessor’s labor agreement.” Kallman, 640 F.2d at 1103. Consequently, when employees are awarded back pay running from the time the successor acquires the business until it finally bargains to an agreement or an impasse pursuant to a duty to bargain imposed after lengthy proceedings, employees may receive far more than they would have if the violation had never occurred. Thus we have held that “to the extent that a back pay order requires payment at the higher rate for the entire period of ownership, it acts as a penalty.” Jd. Rather, “an appropriate back pay remedy cannot require [the successor] to pay the higher rate beyond a period allowing for a reasonable time of bargaining.” Jd. This limitation on the period for which back pay may be awarded applies, however, only when it is clear that the lla successor “lawfully would not have agreed to the wage scale provided by the predecessor’s labor agreement, and the resulting impasse would have resulted in reduced wages.” New Breed Leasing Corp. v. NLRB, 111 F.3d 1460, 1467 (9th Cir. 1997). Whether bargaining would have resulted in impasse had the violation not occurred will often be a matter of some uncertainty. In New Breed we held that any such uncertainty “should be resolved against the employer who discriminates,” and we therefore placed the burden of persuasion on the successor to show that it would not have agreed to the higher wages. /d. at 1468. In reaching this conclusion, we were persuaded by the Seventh Circuit’s reasoning in U.S. Marine, 944 F.2d at 1321, that a successor should not benefit from an ambiguity that results from its own wrongdoing. Thus in New Breed, where the successor “failed to shoulder its evidentiary burden,” we found that “the Board’s grant of back pay based on the predecessor Union’s pay scale restores as nearly as possible the employment situation that would have occurred absent” the unfair labor practice. New Breed, 111 F.3d at 1468-69. But where, as in Kallman, “(t]he facts demonstrate that [the successor] would not have agreed to union demands to pay the higher rate,” the successor may not be required “to pay the higher rate beyond a period allowing for a reasonable time of bargaining.” Kallman, 640, F.2d at 1103. In fashioning its remedy in this case, the Board attempted to put the parties in the place they would have been had ASI not made the “no union” statement. This may literally be impossible as “The Moving Finger writes; and, having writ, Moves on: nor all your Piety nor Wit Shall lure it back to cancel half a Line, Nor all you Tears wash out a Word of it.” Edward Fitzgerald, the Rubaiyat of Omar Khayyam, st. 71 (4th ed. 1879). One reasonable hypothesis is that, had ASI not made the “no union” statement, the MI 12a union and ASI would have bargained to impasse before ASI set the new employment terms. We must give deference to the remedy fashioned by the Board. See New Breed, 111 F.3d at 1464-65. Here, the forfeiture of the right to set the new terms before bargaining to impasse was a permissible method of placing the parties where they would have been had ASI not made the “no union” statement. The Board applied the presumption that an award of back pay and benefits under the repudiated bargaining agreement restores the status quo ante, but did not consider whether ASI had rebutted the presumption with evidence that it would have bargained to an impasse and imposed less favorable terms. See New Breed, 111 F.3d at 1468; see also U.S. Marine, 944 F.2d at 1323 (“[I]t is for the employer to demonstrate that it is not appropriate [to award back pay]. U.S. Marine has failed to do so.”) (quotation marks, citation, and original alterations omitted). Nor did the LJ make any findings in this regard, as the ALJ did not award back pay and benefits under any exception to the Burns rule. Those facts that are in the record and bear on this question are equivocal. The ALJ found that of the eight Aero unit employees originally hired on December 1, 1992, four received the same hourly wage they had previously been paid by Aero, two received significantly more, and two received significantly less. ASI provided less vacation time and paid holidays, however, and no medical or dental benefits. Nevertheless, the ALJ found little to indicate that ASI could have found a qualified workforce outside of Aero’s ranks had ASI not been able to come to terms with the incumbent union. The ALJ noted that ASI had rejected transferring employees from a machine shop that Brown owned in Gardena due to the unacceptable commute, and found that, to continue Aero’s business, ASI needed a 13a workforce with specialized skills that were not readily available in the marketplace. The mere fact that ASI provided fewer benefits under the terms that it imposed provides little indication of what ASI might have agreed to had it fulfilled its obligation to bargain with the Union. The apparent unavailability of qualified workers outside of the Aero unit and the need to complete Aero’s work in progress indicate that the Union might have brought significant negotiating power to the table. On the other hand, the fact that Aero’s bankruptcy indicates that ASI might have been unwilling or even unable to continue to operate the business without significant labor concessions, and might have chosen to liquidate the company’s assets rather than continue operating under the terms of the previous CBA. Were the question regarding what would have happened had ASI recognized and bargained with the Union presented to us on a record that was ambiguous despite having been fully developed under the correct legal standard, we would resolve any uncertainty by affirming the Board’s award under New Breed. See New Breed, 111 F.3d at 1468. Because the record was not fully developed on this point, however, we remand to permit ASI and the UAW to present evidence on whether ASI would have bargained to impasse and imposed terms, even had ASI honored its obligation to bargain with the Union. IV The Petition for Enforcement is GRANTED IN PART and REMANDED IN PART. Each party shall bear its own costs. O’SCANNLAIN, Circuit Judge, concurring in part and dissenting in part: Ss 14a I concur in PartI of the court’s opinion, granting summary enforcement to the National Labor Relations Board’s (“Board”) order of prospective relief to redress Advanced Stretchforming International, Inc.’s (“ASI”) violations of the National Labor Relations Act (“NLRA”). I must respectfully dissent, however, from Parts II and III. In my view, the Board’s award of back pay under the terms of the collective bargaining agreement of ASI’s predecessor violates the holding of NLRB v. Burns Int'l Security Services, Inc., 406 U.S. 272 (1972). This award does nothing to redress ASI’s actual violations and does not restore the status quo ante. It constitutes a penalty well in excess of the Board’s legal authority. In holding that this award is presumptively appropriate, the majority opinion misconstrues and misapplies the so-called “forfeiture doctrine,” transforming it into a broad new exception capable of swallowing the rule set forth in Burns that a successor employer is not bound by its predecessor’s collective bargaining agreement and is ordinanily free to set the initial terms of employment unilaterally. By arming the Board with an unauthorized power to punish, the majority has impermissibly upset the balance of power between management and labor that Congress established in the Act. I respectfully dissent. The majority’s analysis begins innocently enough by restating the general rule from Burns that a successor employer is not bound by its predecessor’s collective bargaining agreement (“CBA”) and is free to set the initial terms of employment for its workers without first consulting with their union. See Burns, 406 U.S. at 287-88. According to the majority, however, an employer’s “nights under Burns” to take such unilateral action can be forfeited if the ——— — —_- — —o 15a successor “has failed to fulfill its corresponding Burns obligations.” Supra at 15101. The majority reasons that, in the present case, ASI “ ‘blocked the process by which the obligations of a successor are incurred’” by telling prospective workers that there would be “no union” at ASI and thus it forfeited its “Burns rights.” Supra at 15103 (quoting the Board’s decision, Advanced Stretchforming, Int'l, 323 N.L.R.B. 529, 531 (1997)). Somewhat surprisingly, the majority does not bother to tell us what exactly ASI’s “Burns obligations” were and why its failure to fulfill such obligations might possibly be remedied by the forfeiture of ASI’s “Burns rights” ordered by the NLRB - namely, an award of back pay under the terms of its predecessor’s CBA. In fact, the reason for the majority’s evasion is clear enough; the forfeiture doctrine is simply inapplicable here. The forfeiture doctrine is premised on the theory that an employer should forfeit its right to set the initial terms of employment only where it evades an actual legal obligation to consult with a union before imposing initial terms. In contrast, ASI was under no such obligation to consult with the UAW prior to imposing its initial terms of employment. In the majority’s hands, the forfeiture doctrine becomes a punishment rather than a remedy. A In Burns, the Supreme Court addressed the obligations under the NLRA of successor employers such as ASI. The Court held that when a new employer acquires a business, it is free, generally, to set the initial terms and conditions of employment, and is not bound by its predecessor’s CBA. See id. at 281-82, 287-88, 294-95. The successor employer is, however, obligated to bargain with the union after setting initial terms. See id. at 281. l6a There are three established exceptions to the Burns rule. A successor employer’s right to set initial terms is limited if (1) the successor employer is the “alter ego” of the predecessor, see Sheet Metal Workers Int'l Assoc. v. Arizona Mechanical & Stainless, Inc., 863 F.2d 647, 651 (9th Cir. 1988); (2) the successor employer assumes or adopts the obligations of the predecessor’s CBA, see id.; or (3) if “it is perfectly clear that the new employer plans to retain all of the employees in the [bargaining] unit,” Burns, 406 U.S. at 294-95 (emphasis added). The third exception to the Burns rule, the “perfectly clear” exception, requires a successor to consult with an incumbent union before altering the predecessor’s terms and conditions of employment when it is “perfectly clear that the new employer plans to retain all of the employees in the [bargaining] unit.” Burns, 406 U.S. at 294-95. The Court established this exception in Burns, stating: Although a successor employer is ordinarily free to set the initial terms on which it will hire the employees of a predecessor, there will be instances in which it is perfectly clear that the new employer plans to retain all of the employees in the unit and in which it will be appropriate to have him initially consult with the — employees’ bargaining representative before he fixes terms. Id. (emphasis added). An employer subject to this exception is not bound by its predecessor’s CBA, nor is it required to agree to the terms the union proposes. See Burns, 406 U.S. at 282. Rather, the successor employer must simply “consult” with the union before setting the initial terms and conditions of employment. See id. at 295; Kallmann v. NLRB, 640 F.2d 1094, 1102 (9th Cir. 1981). 17a The majority has sensibly abandoned its previous attempt to justify the Board’s award under the Burns perfectly clear exception.* This is prudent, given that the ALJ correctly concluded that the exception is simply not implicated on these facts and the Board itself specifically disavowed any reliance on it, stating that the exception “was not determinative of the legality of [ASI’s] conduct.” Advanced Stretchforming, 323 NLRB at 529. Unfortunately, the Burns perfectly clear exception remains lurking in the background. The Board’s award can only be justified if ASI breached a duty to negotiate with the UAW prior to setting the initial terms of employment. Despite its new reliance on the forfeiture doctrine without reference to the perfectly clear exception, the majority (to borrow from its quotation of the Rubaiyat of Omar Khayyam) has failed to cancel half a Line” or “wash out a Word” of its previous ill-starred attempt to apply the Burns perfectly clear exception to this case. In actuality, given that the perfectly clear exception does not apply here, ASI’s only obligation under Burns was to negotiate with the UAW after it had unilaterally set initial terms of employment. It is not contested that ASI breached this obligation. Nevertheless, as the majority concedes, the Board’s award of back pay was premised on the notion that “ASI unlawfully and unilaterally changed the employment terms without first bargaining with the union.” See supra at 15099 (citing Advanced Stretchforming Int'l, 323 N.L.R.B. 529, 531 (1997)) (emphasis added). Because ASI was punished for violating an obligation it did not, in fact, have, the Board’s award of back pay should be rejected. * The majority affirmed the Board’s award on the basis of the perfectly clear exception in a now-withdrawn opinion. See NLRB v. Advanced Stretchforming Int'l, Inc., 208 F.3d 801 (9th Cir. 2000). 18a B In its attempt to justify the Board’s award, the majority invokes the so-called “forfeiture doctrine,” which courts have properly characterized as “corollary” to the perfectly clear exception. See Capital Cleaning Contractors, Inc. v. NLRB, 147 F.3d 999 (D.C. Cir. 1998). The majority views the doctrine differently. Quoting the Board, the majonty describes the forfeiture doctrine as follows: The fundamental premise for the forfeiture doctrine is that it would be contrary to statutory policy to “confer Burns nghts on an employer that has not conducted itself like a lawful Burns successor because it has unlawfully blocked the process by which the obligations and rights of such a successor are incurred.” ... In other words, the Burns nght to set initial terms and conditions of employment must be understood in the context of a successor employer that will recognize the affected unit employees’ collective-bargaining representative and enter into good-faith negotiations with that union about those terms and conditions. See supra at 15101 (quoting Advanced Stretchforming, 323 NLRB 529, 530) (emphasis added). Thus, in the Board’s view, a view which the court today adopts, another exception to the Burns rule exist when a new employer attempts to avoid becoming a successor employer or fails to fulfill its duty to recognize and to bargain with the incumbent union. Apparently, only a successor who complies with ail of its obligations under the NLRA can set the initial terms of employment; any unfair labor practice that “block[s] the process by which the obligations and nghts of [ ] a successor are incurred,” id., causes the employer to forfeit its nghts. 19a > 66. Hence, the majority opinion concludes that ASI’s “‘no union” statement caused ASI to forfeit its right to set initial terms without first bargaining with UAW. The majority has it wrong. As the majority implicitly acknowledges, see supra at 15102, courts have previously applied the forfeiture doctrine only in cases in which a successor employer discriminatorily refused to hire its predecessor’s employees because of their union membership. See Kallmann, 640 F.2d at 1102-03; U.S. Marine Corp., 293 NLRB 669 (1989), enforced, 944 F.2d 1305 (7th Cir. 1991). Indeed, courts have held that a successor employer who discriminatorily refuses to hire its predecessor’s employees based on their union membership forfeits its right to set the initial terms of employment. See e.g., Kallmann, 640 F.2d at 1102-03; U.S. Marine Corp. v. NLRB, 944 F.2d 1305,1320 (7th Cir. 1991); NLRB v. Horizons Hote! Corp., 49 F.3d 795, 806 (1st. Cir. 1995); Capital Cleaning Contractors, Inc. v. NLRB, 147 F.3d 999, 1008 (D.C. Cir. 1998). The majority now seeks to expand, for the first time, the scope of the forfeiture doctrine outside the discriminatory hiring context. The majority justifies its application of the forfeiture doctrine here because ASI’s violation of the NLRA by making “no union” statements is “similar” to the discriminatory hiring practices of employers such as Kallmann. This is simply not the case. The discriminatory hiring cases are distinguishable because the “fundamental premise” behind the forfeiture doctrine in the discriminatory hiring case is that but for the successor employer’s discriminatory refusal to hire its predecessor’s employees, the employer would have come within the perfectly clear exception to the Burns rule, and thus would have been obligated to consult the union before setting the initial terms of employment. See U.S. Marine, 944 F.2d at 1320 (“Where { ’ j t 20a all or substantially all of the predecessor’s employees would have been retained but for the successor’s unlawful discrimination, the successor loses the right to set initial terms and conditions of employment and violates the [NLRA] if it unilaterally alters the predecessor’s terms without first consulting with the union .... But for its unlawful conduct, U.S. Marine would have hired substantially all of [its predecessor’s] employees and therefore would have been obligated to consult with the Union before setting the terms and conditions of employment.”); Capital Cleaning, 147 F.3d at 1008 (“[B]ecause Capital refused to hire the Ogden employees based upon their union membership, the Board properly presumed that but for such discrimination Capital would have hired a majority of the Ogden employees from the outset. Accordingly, Capital had a duty to bargain with Local 32 and therefore did not have the right unilaterally to set the terms and conditions upon which it offered employment.”). Applying the forfeiture doctrine in these types of cases prevents the successor employer from avoiding the perfectly clear exception through his “unlawful conduct.” See Kallmann, 640 F.2d at 1102-03 (holding that the Board correctly found that the perfectly clear exception applied because “any uncertainty regarding whether substantially all the former employees would have been retained had to be resolved against [the successor employer] because he could not benefit from his ... [discriminatory] conduct” (footnote omitted)). More precisely, because the employers in such cases never would have had the night unilaterally to set the initial employment terms absent their discriminatory hiring, holding that they forfeit their nght to set the initial terms of employment simply restores the status quo ante. Cf. Sure- Tan, Inc. v. NLRB, 467 U.S. 883, 900 (1984) (noting that the Board’s remedial authority includes the ability “to restore the 2la situation ‘as nearly as possible, to that which would have obtained’ but for” any unfair labor practice (quoting Pheips Dodge Corp. v. NLRB, 313 U.S. 177, 194 (1941))). Such rationale, however, does not justify holding that ASI forfeited its right to set initial terms. The majority falls far short in explaining how the application of the forfeiture doctrine here restores the situation to the status quo ante. But for ASI’s unlawful conduct, i.e, its “no union” Statement, it still would not have been subject to the “perfectly clear” exception and hence did not have any duty to consult with UAW before setting the initial terms of employment. Thus, the majority’s “hypothesis,” see supra at 15105, that ASI might have bargained to impasse before setting initial terms had it not made the “no union” statement is patently unreasonable. Clearly, then, because the rationale underlying the forfeiture doctrine is inapplicable to this case, the discriminatory hiring cases provide absolutely no authority for the court’s argument that ASI should be held to have forfeited its right to set initial hiring terms. The remedy that the Board misapplied in this case is one specifically designed to redress an employer’s violation of the obligation created by the “perfectly clear” exception, nothing more. The majority utterly fails to justify extending its application here. C Given this close link between the forfeiture doctrine and the perfectly clear exception of Burns, could it be that, despite its disclaimer in footnote 3, the majority has persisted in its attempt to apply the perfectly clear exception to the instant case, this time sub silentio? The majority justifies its application of the forfeiture doctrine thus: 22a Here, no discriminatory hiring practices prevented ASI’s “perfectly clear” obligation from arising. Instead, the “no union” statement chilled the invocation of that obligation once it had arisen. Having been informed when it invited to apply for work with ASI that there would be no unio at the new company, Aero’s workers may well have believed that employment with ASI was contingent on abstaining from union representation, including insistence on the right to bargain before ASI imposed initial terms. Supra at 15103 (emphasis added). The majority misses the point. Because none of the exceptions to the Burns rule applies here, Aero’s workers had, in fact, no nght to union bargaining before ASI imposed initial terms. While the majority now explicitly disclaims any reliance on the Burns “perfectly clear” exception, it nonetheless denies that ASI had the nght unilaterally to set its initial terms of employment. The latter simply cannot be true. Il The majonity’s application of the forfeiture doctrine is not only fundamentally inconsistent with the doctrine’s underlying rationale, it is irreconcilable with Burns itself. In that case, Burns, as a successor employer, had violated the NLRA by unlawfully assisting a union which was a rival of its predecessor’s employees’ union and failing to recognize and to bargain with the incumbent union. See 406 U.S. at 276. However, the Court rejected the Board’s finding that Burns was bound by its predecessor’s CBA or that it had violated the NLRA by setting initial employment terms. See id. The Court viewed a successor’s duty to bargain and the right to set initial terms as separate issues: : ; ' s f 23a Although Burns had an obligation to bargain with the union concerning wages and other conditions of employment when the union requested it to do so, ... [i]t is difficult to understand how Burns could be said to have changed unilaterally any pre-existing terms or condition of employment without bargaining when it had no previous relationship whatsoever to the bargaining unit and, prior to [the date Bums began operations], no outstanding terms and conditions of employment from which a change could be inferred. Id. at 294 (italics in original) (emphasis added). Thus, the Court rejected the Board’s position that Burns violated the NLRA by setting the initial terms of employment, even though Burns can be said to have attempted to “‘block[ ] the process by which the obligations and rights of [ ] a successor are incurred,” see supra at 15101, by refusing to bargain with the incumbent union and by unlawfully assisting 4 nval union. See Burns, 406 U.S. at 295-96. Burns directly controls this case. In Burns, the employer violated the NLRA by failing to bargain with the incumbent union and interfering with its employees’ organizational rights by assisting a rival union, and yet the Court held that Burns retained the right to set initial hiring terms. See 406 U.S. at 294. Here, ASI similarly violated the NLRA by failing to bargain with the incumbent union and by interfering with its employees’ organizational rights through its “no union” statement. Yet, contrary to Burns, the court today holds that ASI forfeited the right to set initial hinng terms. The court appears to confuse a successor employer’s obligations under the NLRA, and its right to set the initial terms of employment. Burns made clear that these issues are not inter-linked. 24a Ill The Board has only remedial power and does not have the power to impose punishment for violations of the NLRA. See Phelps Dodge, 313 U.S. at 194. This limitation on the Board’s authority “at a minimum ... encompasses the requirement that a proposed remedy be tailored to the unfair labor practice it is intended to redress.” Sure-Tan, Inc. 467 U.S. at 900. the majority has not even come close to explaining how forfeiture of ASI’s nght unilaterally to establish employment terms redresses ASI’s unlawful “no union” statements. ASI never had, and never would have had, an obligation to consult with the UAW pnor to imposing initial terms. The appropriate remedy for ASI’s “no union” statement is an order directing ASI to cease and desist telling potential applicants that ASI intends to operate with no union. The Board’s order does so in this case. To add that ASI forfeited its right to set the initial terms of employment because of this unfair labor practice is “a penalty by another name — and not a much different name at that.” U.S. Marine, 944 F.2d at 1328 (Easterbrook, J., dissenting). Indeed, a synonym of forfeit is “penalty.” See Webster’s Ninth New Collegiate Dictionary 484 (1987) (defining forfeit as “something forfeited or subject to being forfeited ... PENALTY’). This court cannot authorize the Board to impose penalties. I respectfully dissent. 25a APPENDIX B FOR PUBLICATION UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT NO. 97-71047 NLRB NO. 21-CA-29104 OPINION NATIONAL LABOR RELATIONS BOARD Petitioner, and INTERNATIONAL UNION, UNITED AUTOMOBILE, AEROSPACE AND AGRICULTURAL IMPLEMENT WORKERS OF AMERICA (UAW), AMALGAMATED LOCAL UNION No. 509, AFL-CIO, Petitioner-Intervenor, Vv. ADVANCED STRETCHFORMING INTERNATIONAL, INC., Respondent. On Application for Enforcement of an Order of the National Labor Relations Board 26a Argued and Submitted April 13, 1999 — Pasadena, California Filed April 4, 2000 Before: Robert Boochever, Diarmuid F. O’Scanniain and A. Wallace Tashima, Circuit Judges. Opinion by Judge Boochever; Dissent by Judge O’Scannlain COUNSEL Sharon I. Block, National Labor Relations Board, Washington, D.C., for the petitioner. Henry M. Willis, Schwartz, Steinsapir, Dohrmann & Sommers, Los Angeles, California, for the petitioner- intervenor. Larry Walraven, O’Melveny & Myers, Newport Beach, California, for the respondent. OPINION BOOCHEVER, Circuit Judge: We decide whether a successor employer has a duty to bargain with an incumbent union before unilaterally imposing terms when the employer hires its initial workforce from the ranks of a represented bargaining unit of its predecessor. Advanced Stretchforming International, Inc., (“ASI”) manufactures structural body components used in the aerospa ¢ industry at a facility in Gardena, California. Prior to ASI’s tenure, Aero Stretch, Inc. (“Aero”) engaged in the same operations at the same site. Aero and the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America, Local No. 509 (“UAW” or “Union”) entered into a collective bargaining agreement (“CBA”) for production and maintenance employees effective August 19, 1991 through August 19, 1994. On June 11, 1992, Aero filed for bankruptcy under Chapter 11 of the Bankruptcy Act. Aero continued to operate, but gradually laid off employees. UAW representative Duane LaMothe contacted Aero’s management over the ensuing months to check on Aero’s bankruptcy status. At a November 19, 1992, hearing, the bankruptcy court converted Aero’s bankruptcy to a Chapter 7 case and auctioned its assets. Stephen Brown submitted the successful bid. As a condition of the sale, the bankruptcy judge ordered Aero to ceas€ operations and to terminate all employees by November 30. On November 30, Brown called Aero’s Manufacturing Director, Eric Cunningham, and told him to inform Aero employees that they could report to the plant the next day to interview for positions with ASI, which Brown incorporated on December 1. Cunningham called a meeting of Aero’s employees and informed them that the plant had been purchased, and that all employees would be terminated at the end of the day, but that they should report to the plant the next day to interview for positions if they were interested in working for ASI. Two employees present at the meeting, and LaMothe, who was also present at the meeting, testified 28a that Cunningham told the employees that there would be “no union, no seniority, no nothing” at ASI. Cunningham denied making such a statement, but testified that at some point he told the employees that ASI would not assume Aero’s CBA. On December1, Brown interviewed and _ hired Cunningham as ASI’s general manager. Brown and Cunningham then interviewed Aero’s former employees who came to the plant that day. Brown required each applicant to sign the following statement: I UNDERSTAND THAT I WILL BE WORKING UNDER NEW TERMS AND CONDITIONS WHICH IS NOT A CONTRACT AND IS SUBJECT TO CHANGE. NEW COMPANY IS NOT ASSUMING COLLECTIVE BARGAINING AGREEMENT. YOU MAY BE EMPLOYED BY NEW COMPANY ON AN AT WILL BASIS. DETAILED LIST OF TERMS AND CONDITIONS IS TO FOLLOW. During the interviews, Brown informed each applicant that the new terms of employment would include different wages, no 401(k) plan, less vacation time, fewer holidays, no medical or dental benefits and at-will employment. ASI hired eight of the seventeen former Aero production and maintenance employees. Four were hired at Aero’s hourly rate; two received more and two received less. UAW sent certified letters to ASI on December 3, 7, and 11, demanding that ASI recognize the Union as its employees’ bargaining representative. UAW filed an unfair 29a labor practice charge against ASI on December11. On December 14, ASI conducted a poll of its employees regarding their desire for continued union representation. The employees voted against union representation. That same day, ASI’s counsel wrote the union a letter advising that ASI did not recognize the UAW as the representative of its employees. On April 30, 1993, the National Labor Relations Board (““NLRB” or “Board”) issued a complaint and notice of hearing against ASI. After conducting a hearing, an Administrative Law Judge (“ALJ”) found that ASI had violated sections 8(a)(1) and (5) of the National Labor Relations Act (“NLRA”) by (1) making the “no union” statement at the November 30 meeting, (2) improperly polling its employees regarding union representation on December 14, and (3) refusing to recognize and to bargain with UAW, as ASI was required to do as an alleged “successor” employer to Aero. The ALJ, however, rejected the General Counsel’s claim that ASI had further violated the NLRA by setting the initial terms of employment on December 1. The ALJ reasoned that under NLRB v. Burns Int'l Sec. Servs., Inc., 406 U.S. 272 (1972), ASI had the right to establish initial employment terms when it hired Aero’s former employees. The NLRB’s General Counsel appealed the ALJ’s decision that ASI did not violate the NLRA by Setting the initial hiring terms, and the Board reversed. The Board reasoned that ASI had forfeited its right to set the initial terms of employment because “it unlawfully blocked the process by which the obligations and rights” of a successor are incurred when it made the “no union” statement. _ Advanced Stretchforming Int'l, 323 N.L.R.B. 529, 531 (1997). Thus, the Board held that ASI unlawfully and unilaterally changed the employment terms without first bargaining with the union. /d. 30a Based on its conclusions, the Board adopted the ALJ’s recommended order, but added to it, directing ASI, “in order to remedy [the] unlawful unilateral changes,” to rescind any changes in employees’ terms and conditions of employment unilaterally effectuated and to make the employees whole by remitting all wages and benefits that would have been paid absent [ASI’s] unlawful conduct, until [ASI] negotiates in good faith with the Union to agreement or impasse. Id. The Board timely applied to this court for enforcement of its order. Il In the proceedings before the Board, ASI did not challenge the ALJ’s_ findings that ASI _ violated sections 8(a)(1) and (5)' of the NLRA. Section 10(e) of the NLRA provides that “[n]Jo objection that has not been urged before the Board . . . shall be considered by the court, unless the failure or neglect to urge such objection shall be excused because of extraordinary circumstances.” 29 U.S.C. § 160(e). “The failure [ ] of the employer to object to the ALJ’s findings before the Board precludes the raising of those issues on appeal.” Jdaho Falls Consol. Hosps., Inc. v. NLRB, 731 F.2d 1384, 1386 (9th Cir. 1984). Thus, ASI could not, and, indeed, does not, challenge the Board’s rulings on the “no union” statement, the union representation poll and the refusal to bargain with UAW. ' Section 8(a)(1) provides, in pertinent part, that it is an unfair labor practice for an employer “to interfere with, restrain, or coerce employees in the exercise of” their collective bargaining rights. 29 U.S.C. § 158(a)(1). 3la Accordingly, the Board’s “finding of those unfair labor practices violations must be taken as established,” id., and we grant summary enforcement of the Board’s order with respect to those findings. See Gardner Mechanical Servs.. Inc. v. NLRB, 115 F.3d 636, 643 n.2 (9th Cir. 1997). Ill ASI does challenge, however, the Board’s finding that ASI violated sections 8(a)(1) and (5) of the NLRA by unilaterally changing its employees’ terms and conditions of employment when they were hired on December 1. AS] claims that it was privileged to set the initial terms upon which it would hire former Aero employees. The Board argues that ASI forfeited this right when it infermed Aero’s employees that it intended to operate without a unionized workforce. Resolution of this issue requires a review of what has come to be known as the “successorship doctrine” — a body of labor law which governs the rights and obligations of “successor” employers. A Central to this body of law is the “Burns rule,” which provides that when a new employer acquires a business, it is free, generally, to set the initial terms and conditions of employment, and is not bound by its predecessor’s CBA. See Burns, 406 U.S. at 281-82, 287-88, 294-95. Despite this freedom, however, the new employer must recognize and bargain with the union representing its predecessor’s > To remedy these violations, the Board’s order requires that ASI (1) cease and desist these unfair labor practices; (2) recognize and bargain with UAW; (3) make various company records available for Board inspection; (4) post notices at its facilities informing its employees that it will no longer engage in any unfair labor practices; and (5) file a sworn certification with the NLRB’s Regional Director that it has taken Steps to comply with the order. ASI does not challenge these remedies. 32a employees if the new employer is a “successor” employer. See id. at 281; Kallmann v. NLRB, 640 F.2d 1094, 1100 (9th Cir. 1981). A new employer is a successor if “the [new] employer conducts essentially the same business as the former employer, and . . . a majority of the new employer’s work force are former employees or would have been former employees absent a refusal to hire because of anti-union animus.” /d.° ASI concedes that it must be treated as a successor employer. Thus, as the ALJ found, and the Board affirmed, ASI had a duty to recognize and to bargain with UAW, Aero’s employees’ representative. ASI failed to fulfill this duty and, thus, the Board found that it violated the NLRA. ASI disputes, however, the Board’s_ separate determination that it violated sections 8(a)(1) and (5) by “unilaterally changing its employees’ wages and other terms and conditions of employment at the time of their hire.” Advanced Stretchforming, 323 NLRB at 529. The Board identified the “only issue” in this case as “whether [ASI], as a successor employer obligated to recognize the Union’s continuing status as a collective-bargaining representative, had the legal right to establish unilaterally its initial terms and conditions of employment for bargaining unit employees.” Jd. Because the Supreme Court held in Burns that “‘a successor employer is ordinarily free to set initial terms on which it will hire the employees of a predecessor,” despite its duty to bargain with its predecessor’s employees’ union,’ 406 U.S. at 294, ASI would indeed have been free to > Although a new employer is not required to hire its predecessor’s employees, see Howard Johnson Co. v. Detroit Local Joint Exec. Bd., 417 U.S. 249, 261-62 (1974), the new employer may not lawfully refuse to hire them because of their union affiliation, see Fall River Dyeing & Finishing Corp. v. NLRB, 482 U.S. 27, 40 (1987). * Thus, a new employer may begin operations pursuant to terms that it has set and operations may proceed under those terms while the new employer is Peeee rE EETES PERE TEUNOE > oe ieee 33a set initial hiring terms when it began operations on December 1, unless an exception to this general rule applied. One qualification to the rule in Burns is the “perfectly clear” exception. The duty to bargain with an incumbent union arises when it becomes evident that the union represents a majority of the employees hired by the new employer. See id. at 281 (“[W]Jhere the bargaining unit remains unchanged and a majority of the employees hired by the new employer are represented by a recently certified bargaining agent [the Board may] order[ ] the employer to bargain with the incumbent union.”). In some cases, such as Burns itself, the duty to bargain is not evident until the employer has hired its full initial complement of employees, “since it will not be evident until then that the bargaining representative represents a majority of the employees in the unit....” Jd. at 295. In such cases, it is not an unfair labor practice unilaterally to impose initial terms of employment, because at that point, the duty to bargain has not yet arisen. See id. But in other cases, it will be “perfectly clear that the new employer plans to retain all of the employees in the unit,” and thus apparent from the outset that the incumbent | union represents a majority of the employees. /d. at 294-95. | In these cases, “it will be appropriate to have [the employer] initially consult with the employees’ bargaining representative before he fixes terms.” Jd. at 295. fulfilling its duty to bargain with the union until agreement or impasse. See Kallman, 640 F.2d at 1102 (stating that Burns held that “a successor employer is ordinarily free to set initial hiring terms without preliminary bargaining with the incumbent union”). If the employer fulfills its duty to bargain in good faith with the union, and the employer and the union are unable to agree on the terms of employment, the employer may continue to oper*'e under the terms it initially set. See Burns, 406 U.S. at 295. 34a The duty to bargain before imposing terms is based on the fact that a majority of the successor employer’s initial workforce have chosen to be represented by an incumbent union. Therefore, the example given in Burns itself, where the successor hires all of the predecessor’s employees (and presumably few others), is not exhaustive of the perfectly clear exception. The Burns perfectly clear exception to the nght of the employer to set the initial terms of employment applies whenever it is apparent that the incumbent union continues to represent a majority of the initial workforce. Thus we have held that “[i]f a majority of the employees in the unit after the purchase were in the unit before the purchase, there is a duty to bargain, it being assumed that the holdover majority continues to desire representation by the {uJnion.” Bellingham Frozen Foods, Inc. v. NLRB, 626 F.2d 674, 678 (9th Cir. 1980). “When it is ‘perfectly clear’ that the employer intends to hire a majority of his workforce in a unit represented by a union from the ranks of his predecessor, his duty to bargain with the [u]nion commences immediately.” Jd. at 678-79. The circumstances surrounding the takeover in this case strongly indicate ASI’s intent to hire its initial workforce from the ranks of its predecessor. At a meeting the day before the takeover, Cunningham told Aero’s employees to report to the plant at the regular time the next day if they wished to apply for employment with ASI. Two witnesses testified, and the ALJ concluded, that Cunningham stated that ASI intended to hire some Aero workers immediately, and others as work became available. ASI then hired all eight of its initial unit employees from Aero’s ranks. There is no evidence that ASI interviewed any non- Aero employees. After their interviews, the unit employees continued work that had been in progress at Aero and commenced similar work for ASI. 35a ASI’s hiring activities after the takeover are also substantially identical to those that we considered indicative of an intent to hire the predecessor’s employees in Bellingham. In Bellingham, the successor hired all of its initial workforce from its predecessor, and then continued to hire its predecessor’s former employees for many months as work and vacancies permitted. /d. at 679. Here, after hiring its initial workforce exclusively from Aero’s ranks, ASI continued to hire former Aero unit employees to expand its workforce as business permitted. ASI did not hire its first non-Aero employee until several months after the takeover, and three of the four non-Aero employees in the unit when the ALJ hearing commenced in September 1993 were not hired until ASI had already hired fifteen of the seventeen former Aero unit employees. At no time did former Aero employees cease to constitute an overwhelming majority of the unit under ASI. Under such circumstances, it is perfectly clear that ASI intended from the outset to constitute the majonity of its workforce from the ranks of its predecessor, and its duty to bargain therefore commenced immediately. Consequently, it was an unfair labor practice for ASI to impose terms without first consulting with the union. IV The Board did not address the application of the perfectly clear exception to the circumstances of this case, but instead found that ASI had forfeited its nght to impose initial terms under U.S. Marine Corp. v. NLRB, 944 F.2d 1305 (7th Cir. 1991), by declaring that there would be no union, and by conducting an improper poll. Because we find that the perfectly clear exception to the Burns rule applies in this case, we need not take up the Board’s application of the forfeiture doctrine to affirm its finding that ASI’s unilateral 36a imposition of terms violated Sections 8(a)(5) and (1) of the NLRA. The dissent contends that in so doing, we “ignore[ ] basic tenets of administrative law,” because we must uphold the Board’s order under the forfeiture doctrine, or not at all. Slip op. at 3834. The general rule is of course well established that ‘‘an administrative order cannot be upheld unless the grounds upon which the agency acted in exercising its powers were those upon which its action can be sustained.” SEC v. Chenery Corp., 318 U.S. 80, 95 (1943). But the rule is not so broad as the dissent would suggest. “The rule is to the effect that a reviewing court, in dealing with a determination or judgment which an administrative agency alone is authorized to make, must judge the propriety of such action solely by the grounds invoked by the agency.” SEC v. Chenery Corp. (Chenery IT), 332 U.S. 194, 196 (1947) (emphasis added); see also Fleshman v. West, 138 F.3d 1429, 1433 (Fed. Cir.), cert. denied, 119 S. Ct. 371 (1998) (“[Chenery] does not prohibit a reviewing court from affirming an agency decision on a ground different from the one used by the agency if the new ground is not one that calls for a determination or judgment which an administrative agency alone is authorized to make.”’ (quotations omitted)). [T]he court is not so bound when, as here, the issue in dispute is the interpretation of a federal statute.” Railway Labor Executives’ Ass'n v. Interstate Commerce Comm'n, 784 F.2d 959, 969 (9th Cir. 1986). Directly on point is North Carolina Commission of Indian Affairs v. United States Department of Labor, 725 F.2d 238, 240 (4th Cir. 1984), on which we relied in Railway Labor Executives. In North Carolina Commission, the administrative judge found that the Comprehensive Employment and Training Act of 1973, 29 U.S.C. § 801, implicitly authorized the Department a 37a of Labor to obtain repayment from states of improperly paid funds. The court of appeals affirmed, but on the ground that the right to repayment was express in the statute under the rationale of Bell v. New Jersey and Pennsylvania, 461 U.S. 773 (1983). See North Carolina Comm'n, 725 F.2d at 240-41. Here, the issue is whether Sections 8(a)(5) and (1) of the National Labor Relations Act require a successor employer to bargain collectively before imposing terms when it hires its initial complement of workers entirely from the ranks of a represented unit. This is an issue of statutory interpretation, see Burns, 406 U.S. at 277-81, and one that we decided conclusively in Bellingham, 626 F.2d at 678-79. The Board’s forfeiture rationale, adopted from the Seventh Circuit’s decision in U.S. Marine, is simply an alternative gloss on the same statutory provisions, but one that has not been likewise conclusively established in this circuit. We do not transgress Chenery by enforcing the Board’s order under a better established interpretation of the same statutory provisions on which the Board relied in reaching its result. Moreover, we are not required to remand when it is certain that the agency would reach the same result under the correct rule. See Vista Hill Found., Inc. v. Heckler, 767 F.2d 556, 566 n.9 (9th Cir. 1985). “Chenery does not require that we convert judicial review of agency action into a ping-pong game.” NLRB v. Wyman-Gordon Co., 394 U.S. 759, 766 n.6 (1969). As a litigant, the Board has pressed the perfectly clear rationale at every stage in these lengthy proceedings. The factual predicate for the application of the perfectly clear doctrine has been exhaustively developed in the record below. Were we to decline to adopt the Board’s forfeiture rationale, and remand instead of deciding the question of ASI’s liability, Bellingham would still dictate the ultimate result. “A remand is not required when it would be an idle 38a and useless formality ....” Vista Hill Found., 767 F.2d at 566 n.9 (quotations omitted).° Vv We turn next, therefore, to the remedy that the Board imposed for the violation. To remedy ASI’s failure to consult with the Union before imposing terms, the Board ordered ASI to recognize the Union, and to pay back wages and benefits under the CBA from the time of the violation until ASI negotiated in good faith to a bargain or impasse. Though a successor has a duty to bargain with an incumbent union before imposing terms when it hires an essentially intact bargaining unit from its predecessor, the successor has “no obligation to accept his predecessor’s labor agreement.” Kallman, 640 F.2d at 1103. Consequently, when employees are awarded back pay running from the time the successor acquires the business until it finally bargains to an agreement or an impasse pursuant to a duty to bargain imposed after lengthy proceedings, employees may receive far more than they would have if the violation had never occurred. Thus we have held that “to the extent that a back pay order requires payment at the higher rate for the entire period of ownership, it acts as a penalty.” Jd. Rather, “an appropriate back pay remedy cannot require [the successor] to pay the higher rate beyond a period allowing for a reasonable time of bargaining.” Jd. This limitation on the period for which back pay may be awarded applies, however, only when it is clear that the * The dissent asserts that “[t]here is no basis for the majority’s asserted confidence that the Board would, on remand, reach the same result that the majority now embraces... .” Slip Op. at 383 n. 1. If our confidence is misplaced, as the dissent suggests, the Board is free to petition for rehearing on that ground. SL, 39a successor “lawfully would not have agreed to the wage scale provided by the predecessor’s labor agreement, and the resulting impasse would have resulted in reduced wages.” New Breed Leasing Corp. v. NLRB, 111 F.3d 1460, 1467 (9th Cir. 1997). Whether bargaining would have resulted in impasse had the violation not occurred will often be a matter of some uncertainty. In New Breed we held that any such uncertainty “should be resolved against the employer who discriminates,” and we therefore placed the burden of persuasion on the successor to show that it would not have agreed to the higher wages. Jd. at 1468. In reaching this conclusion, we were persuaded by the Seventh Circuit’s reasoning in U.S. Marine, 944 F.2d at 1321, that a successor should not benefit from an ambiguity that results from its own wrongdoing. Thus in New Breed, where the successor “failed to shoulder its evidentiary | burden,” we found that “the Board’s grant of back pay based on the predecessor Union’s pay scale restores as nearly as possible the employment situation that would have occurred absent” the unfair labor practice. New Breed, 111 F.3d at 1468-69. But where, as in Kallman, “[t]he facts demonstrate that [the successor] would not have agreed to union demands to pay the higher rate,” the successor may not be required “‘to pay the higher rate beyond a period allowing for a reasonable time of bargaining.” Kallman, 640 F.2d at 1103. In fashioning its remedy in this case, the Board applied the presumption that an award of back pay and benefits under the repudiated bargaining agreement restores the status quo ante, but did not consider whether ASI had rebutted that presumption with evidence that it would have bargained to an impasse and imposed less favorable terms. See New Breed, 111 F.3d at 1468; see also U.S. Marine, 944 F.2d at 1323 (“[I]t is for the employer to demonstrate that it is not appropriate [to award back pay]. U.S. Marine has al 40a failed to do so.” (quotations, citations, and onginal alterations omitted)). Nor did the ALJ make any findings in this regard, as the ALJ did not award back pay and benefits under any exception to the Burns rule. Those facts that are in the record and bear on this question are equivocal. The ALJ found that of the eight Aero unit employees originally hired on December 1, 1992, four received the same hourly wage they had previously been paid by Aero, two received significantly more, and two received significantly less. ASI provided less vacation time and paid holidays, however, and no medical or dental benefits. Nevertheless, the ALJ found little to indicate that ASI could have found a qualified workforce outside of Aero’s ranks had AS1 not been able to come to terms with the incumbent union. The ALJ noted that ASI had rejected transferring employees from a machine shop that Brown owned in Gardena due to the unacceptable commute, and found that, to continue Aero’s business, ASI needed a workforce with specialized skills that were not readily available in the marketplace. The mere fact that ASI provided fewer benefits under the terms that it imposed provides little indication of what ASI might have agreed to had it fulfilled its obligation to bargain with the Union. The apparent unavailability of qualified workers outside of the Aero unit and the need to complete Aero’s work in progress indicate that the Union might have brought significant negotiating power to the table. On the other hand, the fact of Aero’s bankruptcy indicates that ASI might have been unwilling or even unable 2 continue to operate the business without significant labor concessions, and might have chosen to liquidate the company’s assets rather than continue operating under the terms of the previous CBA. ee 4la Were the question regarding what would have happened had ASI recognized and bargained with the Union presented to us on a record that was ambiguous despite having been fully developed under the correct legal standard, we would resolve any uncertainty by affirming the Board’s award under New Breed. See New Breed, 111 F.3d at 1468. Because the record was not fully developed on this point, however, we remand to permit ASI and the UAW to present evidence on whether ASI would have bargained to impasse and imposed terms, even if ASI had honored its obligation to bargain with the Union as it was required to do under the perfectly clear exception to the Burns rule. VI The Petition for Enforcement is GRANTED IN PART and REMANDED IN PART. Each party shall bear its own costs. O° SCANNLAIN, Circuit Judge, dissenting: The court’s opinion frames the issue before us as “whether a successor employer has a duty to bargain with an incumbent union before unilaterally imposing terms when the employer hires its initial workforce from the ranks . . . of its predecessor.” Supra at 3814. With respect, I suggest it is the wrong question. Worse yet, the majority compounds the error by giving the wrong answer to that question. The National Labor Relations Board (“NLRB” or “Board”) has applied to this court for the enforcement of its order, which declares in part that Advanced Stretchforming International (“ASI”) violated the National Labor Relations Act (the “Act”) by “unilaterally changing wages and benefits” without first bargaining with the union that had 42a previously represented the individuals whom ASI ultimately hired. The Board based this element of its order on its conclusion that ASI had “forfeited” its otherwise unquestioned right to set the initial terms and conditions of employment by peremptorily and impermissibly stating that there would be “no union” at its workplace. Naturally, the Board urges the enforcement of its order on this score; ASI is opposed. The majority agrees with the conclusion of the Board but does not endorse its logic. The majority substitutes its own argument for that of the Board on the issue of whether ASI’s imposition of novel terms and conditions of employment was unlawful. ASI’s new terms and conditions violated the Act, the majority holds, not because ASI made its impermissible “no union” statement but because ASI had made it “perfectly clear” that it intended to man its workforce with the employees of its predecessor. See supra at 3822 (“Because we find that the perfectly clear exception to the Burns rule applies in this case, we need not take up the Board’s application of the forfeiture doctrine ... .”). The majonity’s reliance on its own argument is plainly impermissible, for, as the Supreme Court has “often held, the validity of an agency’s determination must be judged on the basis of the agency’s stated reasons for making that determination.” Industrial Union Dept., AFL-CIO v. American Petroleum Inst., 448 U.S. 607, 631 n.31 (1980). The majority asserts that the scope of our review need not be limited to determining the validity of the grounds actually advanced in the Board’s order, because the majority can affirm the order with the “ ‘interpretation of a federal statute,” supra at 3823 (quoting Railway Labor Executives’ Ass'n v. ICC, 784 F.2d 959, 968 (9th Cir. 1986)), which is not a type of determination that the Board “alone is authorized to make,” id. (quoting SEC v. a 43a Chenery Corp. (Chenery II), 332 U.S. 194, 196 (1947)). I must disagree. The majority is administering the Act—not interpreting it—with the unilateral declaration that ASI committed an “unfair labor practice” when it set the initial terms of employment and shortly thereafter hired eight of its predecessor’s employees. If this were not the sort of determination that the Board is uniquely authorized to make, I would be hard pressed to conceive of what is.' ' By way of contrast, our decision in Railway Labor Executives exemplifies the type of statutory interpretation that we may undertake in considering a novel basis on which to affirm an agency’s order. In that case, an order of the ICC was challenged because the ICC refused to impose certain labor protections as a condition of its approval of the sale of a railroad line. See 784 F.2d at 961. A third party attempted to justify the ICC’s refusal by arguing that Congress had not given the ICC any discretion to impose such protections. See id. at 969. Even though the ICC had not attempted to defend its action in this way, we noted that we could consider the third party’s proposed justification for the ICUs order, because the issue of whether the ICC had the discretion at issue involved only the “interpretation of a federal statute.” Jd. Quite unlike the grounds advanced by the majority here, the novel basis we considered in Railway Labor Executives in no way involved the application of substantive terms of a statute for reasons not adopted by the agency in the order under review. The majority’s attempt to analogize the substitution of its own reasons for those of the NLRB in this case to the Fourth Circuit’s decision in North Carolina Commission of Indian Affairs v. United States Department of Labor, 725 F.2d 238 (4th Cir. 1984), is unavailing. In that case, as in Railway Labor Executives, the reasoning at issue related to the scope of the agency’s power under a federal Statute. See id. at 240. As the Fourth Circuit took pains to note, “[t]he interpretation [was] wholly different from what it is in the case where Congress specifically entrusts an administrative agency, because of its special competence, with the task of . . . setting up standards or rules of conduct.” /d. (quoting Milk Transport v. ICC, 190 F. Supp. 350, 355 (D. Minn. 1960)). In this case, however, the majority is, in fact, applying a “rule[ ] of conduct”: A successor employer may not unilaterally set the initial terms of employment “when it hires its initial complement of workers entirely from the ranks of a represented unit.” Supra at 3824. The majority is on no more solid footing in suggesting that its alternative reasoning is merely meant to avoid the conversion of “ judicial review of agency action into a ping-pong game."” Supra at 3824 (quoting NLRB v. Wyman- Gordon Co., 394 U.S. 759, 766 n.6 (1969)). There is no basis for the majority's asserted confidence that the Board would, on remand, reach the same result that the majority now embraces, for the Board has repeatedly and notably declined to 44a This court is constrained, therefore, to consider the validity of the Board’s stated reasons for concluding that ASI’s conduct violated the Act. Because the court has not done so, it would be improvident for the court now to remand the Board’s order for findings on the sustainability of the Board’s desired remedy. II Considerations of administrative law aside, the court’s holding practically eviscerates the rule of NLRB v. Burns International Security Services, Inc., 406 U.S. 272 (1972). In Burns, the Supreme Court established that a new employer is presumptively free to set the initial terms and conditions of employment without negotiating with a union, even if the new employer is the “successor” of an organization whose employees were represented by that union. Jd. at 294 (noting that, even though the successor employer’s terms differed from those of the old employer, “it does not follow that [the successor employer] changed its terms and conditions of employment when it specified the initial basis on which employees were hired” (emphasis added)). The Court has underscored that this presumption will be overborne only in “exceptional situation[s].” Fall River Dyeing and Finishing Corp. v. NLRB, 482 U.S. 27, 47 n.14 (1987). The Burns rule derives from the well-established principle that an employer’s duty to bargain with a union does not arise until it transpires that a majority of the employer’s workforce has chosen to be represented by that union. See id. at 295 (noting that the duty to bargain does not mature before it is “evident . . . that the bargaining representative represents a majority of the employees in the rely on the “perfectly clear” exception as a basis for its order—and there are good reasons for the Board’s hesitation. See infra. 45a unit”). See generally NLRB v. Local Union No. 103, Int’l Ass'n of Bridge, Structural, and Ornamental Iron Workers, 434 U.S. 335, 344 (1978) (noting “the generally prevailing statutory policy that a union should not purport to act as the collective-bargaining agent for all unit employees, and may not be recognized as such, unless it is the voice of the majority of the employees in the unit”). Because the preference ‘or union representation amongst the majority of employees cannot be determined before the composition of the workforce is established, the composition of the workforce generally cannot be established before the employees are hired, and employees cannot be hired without the employer’s stating the initial terms of employment, it is pure syllogism that the employer cannot generally be held to negotiate with a union before the employer has set the initial terms of employment. As the Court noted in Burns, however, there are some circumstances in which the composition of an employer’s workforce can be established before the employees are hired. In these circumstances, the foregoing syllogism breaks down. One such circumstance arises when “it is perfectly clear that the new employer plans to retain all of the employees [of its predecessor].” Burns, 406 U.S. at 295. When the new employer’s plan is “perfectly clear,” the preference for union representation of the employer’s future workforce is equally clear. Hence, the new employer can fairly be required to negotiate with the union before setting the initial terms of employment. This is the “perfectly clear” exception to the Burns rule. The critical element of the “perfectly clear” exception is that of timing: When can an employer be said to have known of the composition of its future workforce and thus of its duty to bargain with a union? See Burns, 406 U.S. at 294 (“[T]here is no evidence that Burns ever unilaterally 46a changed the terms and conditions of employment it had offered to potential employees in June after its obligation to bargain with the union became apparent.” (emphasis added)). Nothing in our case law suggests that the issue of timing has lost its relevance. Indeed, courts applying the “perfectly clear” exception continue to rely explicitly on the fact that the successor employer plainly intended--prospectively--to retain the predecessor’s empioyees before setting the initial terms of employment. See, e.g., Canteen Corp. v. NLRB, 103 F.3d 1355, 1363 (7th Cir. 1997) (noting that the NLRB had found that “‘the [new employer] had effectively and clearly communicated to the Union its plan to retain the predecessor employees’” (emphasis added)); Bellingham Frozen Foods, Inc. v. NLRB, 626 F.2d 674, 679 (9th Cir. 1980) (noting that the statements of the new employer’s president supported the NLRB’s conclusion “that it was ‘perfectly clear’ that [the employer] intended to staff the plant with a sufficient number of [predecessor] employees to tngger a bargaining obligation” (emphasis added)). Applying the “perfectly clear” exception to this case thus requires evidence establishing that ALI planned--before setting the initial terms of employment--to hire at least the majority of its employees from the workforce of its predecessor, Aero Stretch, Inc. (“Aero”). See Bellingham, 626 F.2d at 678-79. Neither the Board nor the administrative law judge (“ALJ”) found such evidence.’ Nevertheless, the majority does. See supra at 3821 (“The circumstances surrounding the takeover in this case strongly indicate ASI’s intent to hire its initial workforce from the ranks of its predecessor.”) The evidence on which the majority relies, however, falls far short of establishing the * This alone, of course, should foreclose our consideration of the matter, for, as an appellate court, we are generally not authorized to find facts at this stage. 47a existence of ASI’s plan. The majority first observes that an agent of ASI told Aero’s employees that they should report to the plant on the first day of ASI’s operation if they wanted to apply to work for ASI. An invitation to apply for work, however, is far from a statement of the employer’s intention to hire the applicant. The majority also notes that ASI’s agent stated that “ASI intended to hire some Aero workers immediately, and others as work became available.” See supra at 3821-22. Because ASI’s intent to hire some Aero workers cannot establish that former Aero workers would constitute the majority of ASI’s workforce, this evidence, too, is irrelevant. Cf. Bellingham, 626 F.2d at 679 (relying on the successor employer’s statement that it would “employ all but ‘some’ of the [predecessor’s] employees” (emphasis added)). The majority also relies on the fact that “there is no evidence that ASI interviewed any non-Aero employees” immediately. See supra at 3822. That no evidence of such interviews appears in the record hardly establishes that such interviews did not occur. Furthermore, the majority’s reliance on a lack of evidence for ASI’s position suggests — wrongly — that a successor, barring evidence to the contrary, is presumed to have made “perfectly clear” a plan to hire most of its employees from its predecessor. All the “evidence” marshaled by the majority, then, boils down to ASI’s actual recruitment practices. See supra at 3822 (“ASI then hired all eight of its initial unit employees from Aero’s ranks.”). That an employer ultimately did something, however, does not establish that what the employer would do was “perfectly clear.” See Burns, 406 U.S. at 295 (“{I]t may not be clear until the successor employer has hired his full complement of employees that he has a duty to bargain with a union.” (emphases added)). The majority attempts to sidestep this embarrassingly elementary point by noting that we relied in Bellingham on an employer’s ultimate hiring practices in 48a evaluating the earlier transparency of its plans. See supra at 3822 (citing Bellingham, 626 F.2d at 679). Bellingham posed a different issue, however. In that case, we were called upon to determine whether substantial evidence supported the Board’s conclusion that an employer’s hiring plans had been “perfectly clear.” We were not conducting de novo review, and we did not state that we would have reached the same conclusion as the Board if we were. Moreover, the facts in Bellingham presented other probative evidence in addition to the employer’s ultimate recruitment practices. The majority here marshals no additional probative evidence whatsoever. The majonty sets the standard for applying the “perfectly clear” exception so low that the exception can only swallow the rule. This outcome does not merely flout the decision of the Supreme Court in Burns. It also invites every successor employer to discriminate against the employees of its predecessor. Anything else would only increase the successor employer’s risk of being found to have plainly intended to hire its predecessor’s employees all along—and the concomitant nsk of having retroactively forfeited its presumptive (and valuable) right to set the initial terms and conditions of employment. The majority ignores basic tenets of administrative law, flouts Supreme Court precedent, and worsens the plight of American workers facing the insecurity of a failed employer. I respectfully dissent. ‘ © - Ps P De 2 | : : 49a APPENDIX C UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT No. 97-71047 NATIONAL LABOR RELATIONS BOARD, Petitioner, and INTERNATIONAL UNION UNITED AUTOMOBILE, AEROSPACE AND AGRICULTURAL IMPLEMENT WORKERS OF AMERICA (UAW), AMALGAMATED LOCAL UNION NO. 509, AFL-CIO, Intervenor, Vv. ADVANCED STRETCHFORMING INTERNATIONAL, INC. Respondent. JUDGMENT Before:ROBERT BOOCHEVER, DIARMUD F. O’SCANNLAIN and A. WALLACE TASHIMA, Circuit Judges. 50a THIS CAUSE came to be heard upon an application of the National Labor Relations Board for the enforcement of an order in Board Case No. 21-CA-29104, issued by it against Respondent, Advanced Stretchforming International, Inc., Gardena, California, its officers, agents, successors, and assigns, on April 25, 1997. The Court heard argument of respective counsel on April 13, 1999, and has considered the briefs and transcript of record filed in this case. On April 4, 2000, the Court, being fully advised of the premises, handed down its opinion granting in part and remanding in part enforcement of the Board’s Order. In conformity therewith, it is hereby ORDERED AND ADJUDGED by the Court that the Respondent, Advanced Stretchforming International, Inc., Gardena, California, its officers, agents, successors, and assigns, shall: i. Cease and desist from: (a) Telling potential applicants for employment that it intends to operate with no union when it is obliged to recognize and bargain with International Union, United Automobile, Aerospace and Agnricultural Implement Workers of America (UAW), Amalgamated Local Union No. 509, AFL-CIO. (b) Polling its employees concerning representation by the Union. (c) Refusing to recognize and bargain with the Union as the exclusive collective-bargaining representative of its employees in the following appropriate unit: All production and maintenance employees including quality control inspectors, maintenance mechanics, metal fabricators, extrusion formers, stretch press operators, Sla warehousemen, assemblers, machinist trainees and machine operators employed at the Respondent’s facility located at 18620 South Broadway, Gardena, California: excluding office clerical employees, confidential employees, supervisors and guards as defined in the Act. (d) Changing the terms and conditions of employment of employees in the above unit without notice to and bargaining with the Union. (e) In any like or related manner interfering with, restraining, or coercing employees in the exercise of the rights guaranteed them by Section 7 of the National Labor Relations Act (“the Act”). “4 Take the following affirmative action necessary to effectuate the policies of the Act. (a) Notify the Union in writing that it recognizes that labor organization as the exclusive representative of its employees under Section 9(a) of the Act and will bargain with it concerning the terms and conditions of employment for employees in the appropriate unit. (6) On _ request, bargain with the Union conceming terms and conditions of employment of unit employees. (c) Preserve and, within 14 days of a request, make available to the Board or its agents for examination and copying, all payroll records, social security payment records, timecards, personnel records and reports, and all other records necessary to analyze the amount of backpay due under the terms of this Judgment. (d) Within 14 days after service by the Region, post at its facility in Gardena, California, copies of the 52a attached notice marked “Appendix.” Copies of the notice, on forms provided by the Regional Director for Region 21 of the National Labor Relations Board (Los Angeles, California), after being signed by the Respondent’s authorized representative, shall be posted by the Respondent and maintained for 60 consecutive days in conspicuous places, including all places where notices to employees are customarily posted. Reasonable steps shall be taken by Respondent to ensure that the notices are not altered, defaced, or covered by any other material. In the event that, during the pendancy of these proceedings, the Respondent has gone out of business or closed the facility involved in these proceedings, the Respondent shall duplicate and mail, at its Own expense, a copy of the notice to all current employees and former employees employed by the Respondent at any time since December 11, 1992. (e) Within 21 days after service by the Region, file with the said Regional Director a sworn certification of a responsible official on a form provided by the Region attesting to the steps that the Respondent has taken to comply. IT IS FURTHER ORDERED AND ADJUDGED that this case be and it hereby is remanded to the Board for further proceedings consistent with the Court’s opinion. IT IS FURTHER ORDERED that each party shall bear its own costs. Endorsed, Judgment Filed and Entered /s/ Cathy A. Catterson Cathy A. Catterson 53a APPENDIX D NATIONAL LABOR RELATIONS BOARD (N.L.R.B.) No. 509, AFL-CIO Case 21-CA-29104 April 25, 1997 Advanced Stretchforming International, Inc. And International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (UAW), Amalgamated Local Union DECISION AND ORDER BY CHAIRMAN GOULD AND MEMBERS FOX AND HIGGINS The only issue raised by the exceptions’ in this case is whether the Respondent, as a successor employer obligated to recognize the Union’s continuing status as a collective-bargaining representative, had the legal nght to establish unilaterally its initial terms and conditions of employment for bargaining unit employees. The judge found that the Respondent had this right under the standard set forth in NLRB v. Burns Security Services, 406 U.S. 272 (1972). ' On November 18, 1994, Administrative Law Judge William L. Schmidt issued the attached decision. The Charging Party filed exceptions and a supporting brief. The Respondent filed an answering brief and the Charging Party filed a reply brief. The Service Employees International Union filed an amicus statement. 54a The National Labor Relations 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 only to the extent consistent with this Decision and Order.’ For the reasons which follow, we find that the Respondent violated Section 8(a)(5) and (1) by unilaterally changing its employees’ wages and other terms and conditions of employment at the time of their hire. Two predecessor employers engaged in stretch forming operations at the Gardena facility involved in this case. During the period that the first predecessor operated the enterprise, the Union was recognized as the exclusive collective-bargaining representative for the production and maintenance employees. The second predecessor, Aero Stretch, Inc. (Aero), acquired the operation in 1990 and negotiated an agreement with the Union effective from August 19, 1991, through August 19, 1994. In June 1992,° Aero declared bankruptcy but continued to operate the facility through November 30. When Aero ceased operations, 17 unit employees remained. On November 19, Steven Brown purchased Aero’s assets. On December 1, Brown incorporated the Respondent. As required by order of the Bankruptcy Court, Aero terminated all of its employees on November 30. On that day, according to the credited testimony, Eric Cunningham, Aero’s operations director (an agent of the Respondent and formaily hired by the Respondent on December 1 as general manager), told the employees that a majority of them would be hired by the Respondent but there would be no union and ? We shall modify the judge’s recommended Order in accordance with our decision in /ndian Hills Care Center, 321 NLRB 144 (1996). > All dates are in 1992 unless otherwise indicated. 5Sa no seniority. On December 1, the Respondent formally employed the entire management, professional and administrative staff, and eight of the unit employees terminated by Aero on November 30. The Respondent hired no employees from other sources at that time. On December 1, all employees interviewed for employment were informed that they would be working under new terms and conditions which were subject to change, that the Respondent was not assuming the collective- bargaining agreement, and that they would be employed on an at-will basis. The Respondent’s initial terms provided for less vacation time and fewer paid holidays than employees had received under Aero. In contrast to Aero, the Respondent provided no medical or dental benefits. Of the eight unit employees hired by the Respondent on December 1, four received the same hourly wage rate they had received at Aero, two received wage increases that exceeded a dollar per hour, and two received wage decreases that were more than a dollar per hour. The judge found that the Respondent violated Section 8(a)(1) by telling employees at the November 30 meeting that there would be no union. This statement was a clearly unlawful message to employees that the Respondent would not permit them to be represented by a union.* Relying on Burns, as interpreted by the Board majority in Spruce Up Corp., 209 NLRB 194 (1974), enfd. per curiam 529 F.2d 516 (4" Cir. 1975), the judge nevertheless found that the Respondent did not violate Section 8(a)(5) of the Act * Love's Barbeque Restaurant, 245 NLRB 78, 124 (1979), enfd. in pertinent part 640 F.2d 1094 (9™ Cir. 1981). The Respondent does not except to this unfair labor practice finding or to the judge’s finding that it subsequently violated Sec. 8(aX'5) and (1) of the Act by polling unit employees concerning representation by the Union and by thereafter refusing to recognize and bargain with the Union. 56a by unilaterally setting different terms and conditions of employment for the unit employees. The judge noted that the Supreme Court in Burns recognized certain circumstances which require that a successor employer bargain with the union before changing the terms and conditions of employment of the unit employees. In particular, the Supreme Court stated: Although a successor employer is ordinarily free to set initial terms on which it will hire the employees of a predecessor, there will be instances in which it is perfectly clear that the new employer plans to retain all of the employees in the unit and in which it will be appropriate to have him initially consult with the employees’ bargaining representative before he fixes terms. The judge went on to find thai, in Spruce Up, the Board limited the application of the Burns “perfectly clear” caveat to cases “in which the new employer has either actively or, by tacit inference, misled employees into believing they would all be retained without change in their wages, hours, or conditions of employment, or at least to circumstances where the new employer ... has failed to clearly announce its intent to establish a new set of conditions prior to inviting former employees to accept employment.”” The judge concluded that the Respondent clearly manifested its intention to establish its own initial terms of employment at the same time that Cunningham announced the Respondent’s intention to hire a majority of Aero unit > 406 U.S. 272, 294-295. ® 209 NLRB 194, 195 (fn. omitted). 57a employees. Specifically, the judge found that the mention that employees would lose their seniority was a sufficient signal to employees that the terms and conditions of employment would be different under the Respondent’s operation. For these reasons, the judge found that the Respondent did not forfeit its unilateral right under Burns to establish the initial employment terms for the successor employees by misleading unit employees about its intentions. Unlike the judge, we do not find an application of Spruce Up’s interpretation of the Burns caveat to the facts of this case to be determinative of the legality of the Respondent’s conduct.’ Instead, we rely on another well- established exception to the right of a Burns successor to set initial terms and conditions of employment. In U.S. Marine Corp., 293 NLRB 669, 672 (1989), for example, the Board held that an employer—like the Respondents — that unlawfully discriminates in its hiring in order to evade its obligations as a successor does not have the Burns right to set initial terms of employment without first consulting with the Union. The Respondents forfeited any right they may have had as a successor to impose initial terms when they embarked on their deliberated scheme to avoid bargaining with the Union by their discriminatory hiring practices. This equitable doctrine, which arose in the context of defining an appropriate remedy for an employer that sought to avoid the successor’s bargaining obligation by refusing to hire applicants from the predecessor’s unionized work force,® is equally relevant to the allegation here of unlawful ” We therefore do not rely on the judge’s Spruce Up analysis. Moreover, Chairman Gould does not agree with the Spruce Up majority’s interpretation of the Burns caveat. See the Chairman’s concurring opinion in Canteen Co., 317 NLRB 1052, 1054-1055 (1995). ® See Love's Barbeque Restaurant, supra. 58a unilateral changes. The fundamental premise for the forfeiture doctrine is that it would be contrary to statutory policy to “confer Burns rights on an employer that has not conducted itself like a lawful Burns successor because it has unlawfully blocked the process by which the obligations and rights of such a successor are incurred.” State Distributing Co., 282 NLRB 1048, 1049 (1987). In other words, the Burns right to set initial terms and conditions of employment must be understood in the context of a successor employer that will recognize the affected unit employee’s collective- bargaining representative and enter into good-faith negotiations with that union about those terms and conditions. Of course, unlike in U.S. Marine, Love’s Barbeque, and State Distributing Co., there is no allegation in this case that the Respondent unlawfully discriminated in its hiring practices. In fact, it looked exclusively to the predecessor’s unionized work force and hired a majority of Aero’s unit employees in forming its own initial employee contingent. Furthermore, for purposes of this litigation, the Respondent conceded that it was a Burns successor bound to recognize the Union when plant operations resumed on December 1. At the time of successorship, however, the Respondent did not conduct itself like a lawful Burns successor. At this unsettling time of transition, when “a union is in a peculiarly vulnerable position” and employees “might be inclined to shun support for their former union, especially if they believe that such support will jeopardize their jobs with the successor,” the Respondent unlawfully declared through Cunningham to all Aero employees that there would be no union for those whom it hired. Fourteen days later, the Respondent relied on the results of an employee poll tainted by Cunningham’s statement when it ® Fall River Dyeing & Finishing v. NLRB, 482 U.S. 27, 39-40 (1987). 59a refused to bargain with the Union and thereafter refused to recognize the Union as the unit employees” representative. A statement to employees that there will be no union at the successor employer’s facility blatantly coerces employees in the exercise of their Section 7 right to bargain collectively through a representative of their own choosing and constitutes a facially unlawful condition of employment. Nothing in Burns suggests that an employer may impose such an unlawful condition and still retain the unilateral night to determine other legitimate initial terms and conditions of employment. A statement that there will be no union serves the same end as a refusal to hire employees from the predecessor’s unionized work force. It “block[s] the process by which the obligations and rights of such a successor are incurred.” State Distributing, 282 NLRB at 1049. _In sum, we hold that by declaring at the outset that there would be no union at its facility, the Respondent, like a successor that discriminatorily refuses to hire a majority of its predecessor’s employees in order to avoid recognizing and bargaining with a union, forfeited its Burns right to set initial terms and conditions of employment without first bargaining with the Union. Accordingly, we find that the Respondent violated Section 8(a)(5) and (1) of the Act by unilaterally changing wages and benefits when it commenced operations. AMENDED CONCLUSIONS OF LAW Substitute the following for paragraph5 of the judge’s Conclusions of Law. __- : “3. By modifying the terms and conditions of employment of unit employees without prior notice to the Union and without affording the Union an opportunity to bargain over these matters, the 60a Respondent violated Section 8(a)(5) and (1) of the Act.” AMENDED REMEDY On request, the Respondent shall bargain with the Union concerning wages, health and welfare benefits, vacations, holidays, and other terms and conditions of employment. Furthermore, in order to remedy the Respondent’s unlawful unilateral changés, we shall order the Respondent, on request of the Union, to rescind any changes in employees’ terms and conditions of employment unilaterally effectuated and to make the employees whole by - remitting all wages and benefits that would have been paid absent the Respondent’s unlawful conduct, until the Respondent negotiates in good faith with the Union to agreement or to impasse. As the Seventh Circuit stated in enforcing the Board’s decision in U.S. Marine, a remedial measure of this kind not only is “designed to prevent [the Respondent] from taking advantage of its wrongdoing to the detriment of the employees ... [but a] return to the status quo ante at least allows the bargaining process to get under way.” 944 F.2d at 1322-1323. Employees shall be made whole in the manner prescribed in Ogle Protection Service, 183 NLRB 682 (1970, enfd. 444 F.2d 502 (6" Cir. 1971), with interest as prescribed in New Horizons for the Retarded, 283 NLRB 1173 (1987). The Respondent shall also make whole its unit employees by making all delinquent employee benefit fund contributions, including any additional amounts due the funds in accordance with Merryweather Optical Co., 240 NLRB 1213, 1216 fn. 7 (1979). In addition, the Respondent shall reimburse unit employees for any expenses ensuing from its failure to make the required contribution, as set forth in Kraft Plumbing & Heating, 252 NLRB 891 fn. 2 (1980), 6la enfd. mem. 661 F.2d 940 (9" Cir. 1981), such amounts to be computed in the manner set forth in Ogle Protection Service, supra, with interest as prescribed in New Horizons for the Retarded, supra. ad ORDER The National Labor Relations Board orders that the Respondent, Advanced Stretchforming International, Inc., Gardena, California, its officers, agents, successors, and assigns, shall: 1. Cease and desist from (a) Telling potential applicants for employment that it intends to operate with no union when it is obliged to recognize and bargain with International Union, United Automobile Aerospace and Agricuitural Implement Workers of America (UAW), Amalgamated Local Union No. 509, AFL-CIO. (b) Polling its employees concerning representation by the Union. (c) Refusing to recognize and bargain with the Union as the exclusive collective-bargaining representative of its employees in the following appropriate unit: All production and maintenance employees including quality control inspectors, maintenance mechanics, metal fabricators, extrusion formers, stretch press operators, warehousemen, assemblers, machinist trainees and machine ' To the extent that an employee has made personal contributions to a fund that are accepted by the fund in lieu of the employer’s delinquent contributions during the period of the delinquency, the Respondent will reimburse the employee, but the amount of such reimbursement will constitute a setoff to the amount that the Respondent otherwise owes the fund. 62a operators employed at the Respondent’s facility located at 18620 South Broadway, Gardena, California; excluding office clerical employees, confidential employees, supervisors and guards as defined in the Act. (d) Changing the terms and conditions of employment of employees in the above unit without notice to and bargaining with the Union. (e) In any like or related manner interfering with, restraining, or coercing employees in the exercise of the rights guaranteed them by Section 7 of the Act. 2. Take the following affirmative action necessary to effectuate the policies of the Act. (a) Notify the Union in writing that it recognizes that labor organization as the exclusive representative of its employees under Section 9(a) of the Act and will bargain with it concerning the terms and conditions of employment for employees in the appropriate unit. (b) On request, bargain with the Union conceming terms and conditions of employment of unit employees. (c) On request, cancel changes in terms and conditions of employment of unit employees unilaterally effectuated and make employees whole by remitting all wages and benefits that would have been paid absent the Respondent’s unlawful conduct, until the Respondent negotiates in good faith with the Union to agreement or to impasse, in the manner set forth in the amended remedy section of this decision. (d) Preserve and, within 14 days of a request, make available to the Board or its agents for examination 63a and copying, all payroll records, social security payment records, timecards, personnel records and reports, and all other records necessary to analyze the amount of backpay due under the terms of this Order. (e) Within 14 days after service by the Region, post at its facility in Gardena, California, copies of the attached notice marked “Appendix.”'' Copies of the notice, on forms provided by the Regional Director for Region 21, after being signed by the Respondent’s authorized representative, shall be posted by the Respondent and maintained for 60 consecutive days in conspicuous places including all places where notices to employees are customarily posted. Reasonable steps shall be taken by the Respondent to ensure that the notices are not altered, defaced, or covered by any other material. In the event that, during the pendency of these proceedings, the Respondent has gone out of business or closed the facility involved in these proceedings, the Respondent shall duplicate and mail, at its own expense, a copy of the notice to all current employees and former employees employed by the Respondent at any time since December 11, 1992. (f) Within 21 days after service by the Region, file with the Regional Director a sworn certification of a responsible official on a form provided by the Region attesting to the steps that the Respondent has taken to comply. '! If this Order is enforced by a judgment of a United States court of appeals, the words in the notice reading “Posted by Order of the National Labor Relations Board” shall read “Posted Pursuant to a Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board.” 64a MEMBER HIGGINS, concurming. I agree with my colleagues that, under the circumstances of this case, the Respondent violated Section 8(a)(5) and (1) by unilaterally setting the initial terms and conditions of employment for the unit employees. I do not, however, adopt all of their analysis. Under NLRB v. Burns Security Services, 406 U.S. 272 (1972), a successor employer is ordinarily free to establish initial terms and conditions for unit employees. The majority finds that the Respondent, an admitted Burns successor, forfeited this right because it unlawfully declared that there would be no union at its facility. It did so at the time that it announced that it would hire a majority of. the predecessor’s employees under altered terms and conditions. In their view, this 8(a)(1) statement was antithetical to the Respondent’s Burns’ obligation to bargain in good faith and was analogous to situations where successors unlawfully and discriminatorily refuse to hire a majority of its predecessors’ employees. I disagree with this view. In my view, the mere 8(a)(1) statement would not warrant forfeiture of the Respondent’s Burns’ rights to set initial terms and conditions for its employees. Although unlawful, I do not find that such a statement, in isolation, establishes that an employer has “embarked on [the] deliberate scheme to avoid bargaining with the Union by ... discriminatory hiring practices,’ or that it has “unlawfully blocked the process by which the obligations and rights of ... a successor are incurred.” State Distributing Co., 282 NLRB 1048, 1049 (1987). Nor do I agree with my colleagues that the statement is analogous to a discriminatory refusal to hire. Cf Love's Barbeque ' U.S. Marine Corp., 293 NLRB 669, 672 (1989). 65a Restaurant, 245 NLRB 78 (1979), enfd. in relevant part sub nom. Kallman v. NLRB, 640 F.2d 1094 (9" Cir. 1981). Here, however, the Respondent did not merely utter the unlawful “no union” statement; it acted on it. Within days of this 8(a)(1) statement, and its hire of the predecessor’s employees, the Union repeatedly demanded that the Respondent recognize and bargain with it. Rather than accede to these demands, as it was obligated to do, the Respondent promptly conducted an unlawful of employee sentiment.’ Further, within 2 weeks of its unlawful statement, the Respondent expressly refused to recognize the Union, in violation of Section 8(a)(5) and (1). Thus, the Respondent, by both act and word, violated Section 7 rights and dishonored its Burns obligations. Having done so, it cannot claim the privilege of setting initial terms and conditions for the unit employees. Accordingly, I find that the Respondent violated Section 8(a)(5) and (1) by unilaterally setting the initial terms and conditions of the unit employees.’ 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. 2 Struksnes Construction Co., 165 NLRB 1062 (1967). > In all other respects, I agree with my colleagues. 66a WE WILL NOT tell employees or potential applicants that we intend to operate with no union when we are obligated to recognize and bargain with International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (UAW), Amalgamated Local Union No. 509, AFL-CIO. WE WILL NOT poll employees concerning representation by the Union and WE WILL NOT refuse to recognize and bargain with the Union as the exclusive collective-bargaining representative of our employees in the following appropriate unit: All production and maintenance employees including quality control inspectors, maintenance mechanics, metal fabricators, extrusion formers, stretch press operators, warehousemen, assemblers, machinist trainees and machine operators employed at our facility located at 18620 South Broadway, Gardena, California; excluding office clerical employees, confidential employees, supervisors and guards as defined in the Act. WE WILL NOT change terms and conditions of employment of the employees in the above unit without notice to and bargaining with the Union. WE WILL NOT in any like or related manner interfere with, restrain, or coerce employees in the exercise of the nights guaranteed them by Section 7 of the Act. WE WILL notify the Union in wniting that we recognize it as the exclusive representative of our employees under Section 9(a) of the Act and will bargain with it concerning the terms and conditions of employment for our employees in the appropriate unit. 67a WE WILL, on request, bargain with the Union conceming terms and conditions of employment of unit employees. WE WILL, on request, cancel changes in terms and conditions of employment of unit employees unilaterally effectuated and make employees whole by remitting all wages and benefits that would have been paid absent our unlawful conduct, until we negotiate in good faith with the Union to agreement or to impasse. 68a APPENDIX E UNITED STATES OF AMERICA BEFORE THE NATIONAL LABOR RELATIONS BOARD ADVANCED STRETCHFORMING INTERNATIONAL, INC. and INTERNATIONAL UNION, UNITED AUTOMOBILE, AEROSPACE AND AGRICULTURAL IMPLEMENT WORKERS OF AMERICA (UAW), AMALGAMATED LOCAL UNION NO. 509, AFL-CIO. Case 21-CA-29104 JD(SF)-81-94 ORDER TRANSFERRING PROCEEDING TO THE NATIONAL LABOR RELATIONS BOARD A hearing in the above-entitled proceeding having been held before a duly designated Administrative Law Judge and the Decision of the said Administrative Law Judge, a copy which is annexed hereto, having been filed with the Board in Washington, D.C.., IT IS HEREBY ORDERED, pursuant to Section 102.45 of National Labor Relations Board’s Rules and Regulations, that the above- entitled matter be, and it hereby is, transferred to and continued before the Board. 69a Dated, Washington, D.C., November 18, 1994 By direction of the Board: JOHN C. TRUESDALE Executive Secretary 70a APPENDIX F UNITED STATES OF AMERICA BEFORE THE NATIONAL LABOR RELATIONS BOARD DIVISION OF JUDGES - SAN FRANCISCO BRANCH OFFICE JD(SF)-81-94 Gardena, CA Case 21-CA-29104 ADVANCED STRETCHFORMING INTERNATIONAL, INC. and INTERNATIONAL UNION, UNITED AUTOMOBILE, AEROSPACE AND AGRICULTURAL IMPLEMENT WORKERS OF AMERICA (UAW) AMALGAMATED LOCAL UNION NO. 509 AFL-CIO. Yvette H. Hollida-Curtis and Peter Tovar, Attys., NLRB Region 21, Los Angeles, CA, for General Counsel. Margo A. Feinberg, Atty., with Henry, M. Willis, Atty., on the brief, of Schwartz, Steinsapir, Dohrmann & Sommers, Los Angeles, CA, for Charging Party. Thomas H. Reilly, Atty., with Richard C. White, Atty., on the brief, of O’Melveny & Meyers, Newport Beach, CA, for Respondent. Tla DECISION Statement of the Case WILLIAM L. SCHMIDT, Administrative Law Judge: The General Counsel alleges here that Advanced Stretchforming International, Inc. (Respondent or Company), as a successor employer, refused to recognize International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (UAW), Amalgamated Local Union No. 509, AFL-CIO, (Union or Charging Party), and bargain over the initial terms and conditions of employment, both in violation of Section 8(a)(1) and (5) of the National Labor Relations Act (Act). The General Counsel also alleges that Respondent polled its employees conceming Union representation in violation of Section 8(a)(1) and (5), and that it told its predecessor’s employees that it intended to operate without a union in violation of Section 8(a)(1). The Union filed the unfair labor practice charge on December 11, 1992.' On April 30, 1993, the Regional Director for Region 21 of the National Labor Relations Board (Board or NLRB) issued a complaint and notice of hearing. Respondent timely answered the complaint denying that it engaged in the unfair labor practices alleged. I heard this case over the course of four days between September 23 and October 14, 1993, at Los Angeles, California. Having now carefully considered the record, the demeanor of the witnesses while testifying, and the parties’ post-hearing briefs, I conclude that Respondent violated the Act in certain respects based on the following: ' All dates below refer to the 1992 calendar year unless shown otherwise. 72a Findings of Fact I. Jurisdiction and Overview Respondent, a corporation engaged in the business of stretchforming structural body components used in the aerospace industry, commenced operations from its facility located at Gardena, California on December 1. Based on an annual projection of its operations between December | and April 30, 1993, when the complaint issued, Respondent’s direct outflow will annually exceed the dollar volume standard established by the Board for exercising its statutory jurisdiction over nonretail enterprises. Accordingly, I find Respondent is an employer engaged in commerce within the meaning of Section 2(2), (6).and (7) of the Act. Two _ predecessor employers engaged in stretchforming operations at the Gardena facility for more than 20 years pnor to its acquisition by Respondent. During the period that the predecessor Aeronca owned and operated the enterprise, the Union was recognized as the collective bargaining representative for the plant’s production and maintenance employees and a series of successive collective bargaining agreements ensued until the operation was acquired in early 1990 by Aero Stretch, Inc. (Aero). Thereafter, Aero and the Union negotiated a successor agreement effective from August 19, 1991, through August 19, 1994. In June, Aero filed a Chapter11 bankruptcy proceeding and continued to operate the facility through November 30. Throughout this period, Aero gradually laid off employees so that by November 30 when Aero ceased operations, 17 unit employees remained. Aero made no attempt to secure court relief from the collective bargaining agreement. Instead, it unilaterally ceased payments for employee health benefits in October which resulted in the cancellation of health benefits in mid-November, failed to implement incremental wage increases due to employees under the collective bargaining agreement, terminated contributions to an employee 401 (K) plan provided for under the agreement, and generally disregarded contractual job classifications in making work assignments. The Union took no action to contest these modifications but Union agent Dwaine LaMothe contacted several Aero officials in the post-bankruptcy period to inquire about Aero’s financial - condition and to explore the reported sale prospects of the enterprise. During the summer and fall Aero unsuccessfully courted several prospective buyers. Eric Cunningham, Aero’s operations director, advised employees monthly about Aero’s efforts to locate a buyer and the status of the bankruptcy proceeding. After Aero’s principal creditor rejected the most recent buyout proposal at a November 19 bankruptcy hearing, the Bankruptcy Court converted the Aero’s bankruptcy to a Chapter 7 proceeding, auctioned its assets, and ordered Aero to terminate its employees and close on November 30. Apparently, Aero anticipated this development because it had begun to coordinate the removal of customer tools and dies from the plant prior to the November 19 hearing. Steven Brown, a Southern California, entrepreneur, submitted the successful bid for Aero’s assets ‘through an agent at the November 19 hearing. Although Brown ostensibly purchased the assets with the intention of liquidating them forthwith, he quickly decided to continue the Gardena stretchforming operation. By December 1, Brown incorporated Respondent, secured the financing required to close the bankruptcy sale, and invited Aero’s employees to submit employment applications. 74a As required by the November 19 Bankruptcy Court order, Aero terminated all of its employees on November 30. The following day Respondent formally employed the entire management, professional and administrative _ staff terminated by Aero on the previous day, including John Rockwood, Aero’s president who was retained as Respondent’s president, and eight unit employees. No unit employees were hired from other sources at this time. During their employment interviews, the employees were informed of new terms and conditions of employment which differed from Aero’s terms. This staff commenced work immediately to complete Aero’s work in progress and to prepare for new work of like kind. On December 3, 7 and 11, LaMothe sent letters to Brown demanding recognition. Before responding to the last demand letter on December 14, Respondent polled its employees concerning continued representation by the Union and the employees who participated in the poll voted against continued representation. Thereafter, Brown’s counsel wrote LaMothe rejecting the Union’s demand on the ground that Brown had a good faith doubt of the Union’s majority standing and on the further ground that the demand was premature because Respondent planned to add “quite a few new production-type employees in the near future.” 2 Respondent does not defend its December 14 refusal to recognize the Union on the ground that it had not yet employed a representative complement of employees. Between December | and the date of the hearing Respondent had employed 11 additional unit employees in the following sequence: two in January; three in March; three in April; two in June; and one in August. One non-Aero employee was hired in March and three more non-Aero employees were hired in June and Augus [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386014_1916%3A2. Public record. Not legal advice.