D. H. Farms Co.Download PDFNational Labor Relations Board - Board DecisionsSep 20, 1973206 N.L.R.B. 111 (N.L.R.B. 1973) Copy Citation D. H. FARMS CO. 111 D. H. Farms Co. and United Dairy Workers, Local 83, .Retail, Wholesale and Department Store Union (AFL-CIO). Case 7-CA-8604 September 20, 1973 SUPPLEMENTAL DECISION AND ORDER By CHAIRMAN MILLER AND MEMBERS FANNING AND PENELLO On July 9, 1971, the National Labor Relations Board granted a Motion for Summary Judgment and issued a Decision and Order' in the above-entitled proceeding, finding that, by refusing to bargain with the Union, certified by the Board in Case 7-RC- 11046 on March 5, 1971, the Respondent had engaged in unfair labor practices within the meaning of Sec- tion 8(a)(5) and (1) of the National Labor Relations Act, as amended, and ordering that Respondent bar- gain with the certified union. Thereafter, in an opinion dated August 11, 1972,2 the United States Court of Appeals for the Sixth Cir- cuit denied enforcement of the Board's Order, on the ground that summary judgment was not warranted since Respondent's postelection affidavit submitted to the Regional Diru-^tor as prima facie evidence to support its objections to the election raised "substan- tial and material factual issues concerning the eligibil- ity of laid-off employees on the date of the election." The court remanded to the Board for a hearing on the eligibility question and on November 2, 1972, the Board reopened the case and directed that a hearing be held. On February 26, 1973, Administrative Law Judge Thomas C. Wilson, issued the attached Deci- sion finding, in effect, that the 19 laid-off employees in question had a reasonable expectancy of recall on September 23, 1970, when the election was held. Thereafter, Respondent filed exceptions and a sup- porting brief. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the Na- tional Labor Relations Board has delegated its au- thority in this proceeding to a three-member panel. The Board has considered the record and the at- tached Decision in light of the exceptions and brief and the decision of the Sixth Circuit Court of Appeals and adopts only so much of the Administrative Law Judge's rulings and findings as is consistent with the following: 1 192 NLRB 53. 2 N.L.R.B. v. D. H Farms Co., 465 F.2d 1230. A. Background The election petition in Case 7-RC-11046 was filed on July 10, 1970, for an election among the produc- tion and maintenance workers of Respondent's facili- ty at 2755 Tooley Road, Howell, Michigan. On August 3, 1970, a preelection hearing was conducted by the Regional Director at which the eligibility ques- tion was litigated and on August 24, 1970, an election was directed, including as eligible the 19 laid-off em- ployees. The election on September 23, 1970, resulted in 10 votes being cast for Petitioner, 18 votes against Petitioner, and 20 votes being challenged by the Em- ployer on grounds of their eligibility status. On Sep- tember 24, 1970, the Regional Director wrote the Employer requesting the submission of "all affidavit and other documentary evidence . . . which you be- lieve makes appropriate reconsideration" on the eligi- bility question. On October 15, 1970, the Employer submitted an affidavit which asserted that the Em- ployer, after the preelection hearing, but before the date of the election, determined that it did not expect to recall the laid-off employees for at least 1 year. In a report Qf October 9, 1970, the Regional Director overruled challenges to the election, having refused the Employer's request for a new hearing on the eligi- bility question, and on February 26, 1971, the ballots of the challenged voters were counted, the revised tally of votes showing 29 for and 19 against the Peti- tioner. The Union was subsequently certified on March 5, 1971. B. Findings of Fact Respondent, D. H. Farms Co., manufactures disc reagents which are inserted into clear plastic or plas- tic-like magazines, along with weights, springs, and caps to form a complete product. D. H. Farms manu- factures this product only for its parent corporation, Difco Laboratories Inc., which is responsible for mar- keting the product, and which obtains said product only from D. H. Farms. The latter makes the product upon receiving work orders from Difco. It would ap- pear that a stock or inventory is maintained, and that some time elapses between production and sales be- cause of the need for Food and Drug Administrative and perhaps other approval of the product. However, there is a direct relation between orders received by Difco from customers and work orders given by Difco to D. H. Farms. Respondent commenced operations in the latter part of 1967. There were 35 unit employees in June 1968,45 by June 1969, and approximately 70 by Janu- ary 1970. Approximately 42 unit employees were laid off on July 8, 1970, and were informed by the 206 NLRB No. 22 112 DECISIONS OF NATIONAL LABOR RELATIONS BOARD office manager that, if sufficient work came in, they would be recalled. This was the first significant layoff since Respondent's inception of operations. Shortly thereafter, new work orders were issued from Difco and approximately 16'of the 42 laid-off employees were recalled, prior to the election on September 23, 1970. Respondent introduced what were characterized as "consumption" figures for each of the years 1968, 1969, and 1970, indicating the monthly and yearly total of magazines, weights, and springs "consumed" in operations for those years. In 1968, 1,195,528 magazines were consumed; 1,170,965 in 1969; and 1,388,592 in 1970. For the year 1970 up to the date of the election, the figure approximated 1,188,000. In all years more magazines were consumed than weights and springs. Whether this was due to persistent quali- ty problems with the magazine was not indicated. Weights consumed were 609,693 in 1968; 1,079,060 in 1969; and 1,238,200 in 1970. Springs consumed were 1,000,313 in 1968; 1,079,060 in 1969; and 1,238,200 in 1970. Since the product includes all these items, maga- zines, weights, and springs, the maximum product of any year should approximate the total of the item least consumed for that year. Thus, the product should have approximated 609,693 in 1968, 1,079,060 in 1969, and 1,238,200 in 1970. In the absence of actual sales figures for the years in question, and we note that Respondent has avoided reliance on actual sales figures, Respondent's figures, both as to level of employment and consumption of parts, suggest the likelihood of an expansion in operations from late 1967 to the time of the layoff in July 1970. A history of expanding operations would be more suggestive of the likelihood of recall than would a pattern of de- cline. Respondent asserts, however, in the face of its own figures, that its work level remained essentially stable, except for problems with a magazine mold in the last half of 1969 and continuing until March 1970, when these problems were corrected. Adding Respondent's consumption figures for the approximately 10-month period attributable to the quality control problem, we find that Respondent consumed 1,130,574 magazines and 1,026,797 weights and springs during that period. If weights and springs are -consumed only when placed in magazines to form a product, and Respondent's testimony would so indi- cate, the conclusion is irresistible that Respondent produced at an all-time high level for this period in spite of the quality control problem. Respondent's contention that its operations had remained at a sta- ble level seems dubious in the light of these figures. Respondent's efforts continued at a high level in April, May, and June, 1970, prior to the layoff, total- ing 529,339 magazines and 547,392 weights and springs. Respondent asserts that this extra effort con- tinued after the quality control problem was resolved in March in order to make up orders which could not be filled while it was having a problem with the mold. Yet Petitioner's production was increased, not dimin- ished, during the period when the quality control problem was supposed to have been at its worst. Why would there have been any back orders from that period unless business had increased tremendously above the increased level of production that apparent- ly had occurred? Respondent's reliance on an ambig- uously described quality control problem seems to us a device to obfuscate the otherwise palpable outlines of an expanding operation. C. Respondent 's "Newly Discovered" Evidence We are in agreement with the Administrative Law Judge that for the most part witness Savitskie 's testi- mony was merely repetitive . However Savitskie testi- fied that he had checked the figures on consumption of materials and the number of employees then em- ployed a week prior to the election . Figures as to consumption of materials and current employment level just prior to the election would be , in our view, reflective of the layoff, but would not be necessarily indicative as to whether it was permanent or tempo- rary. Savitskie also checked work on hand and work orders, finding that there were no back orders. This information merely bears out the economic basis for the layoff, which is undisputed . This did not necessar- ily mean that future orders would not be forthcoming. At the time of the layoff, July 8, 1970 , for example, there were no back orders . However , additional or- ders were received subsequently and 16 employees had to be recalled before the date of the election. In concluding that the layoff was permanent Difco Production Manager Robert relied on a computer printout of orders for a past 3-month period , as well as hearsay reports of falling sales , partially due to customer complaints and inferior product quality. These factors are consistent with economic motivia- tion for the layoff which had already occurred. How- ever, this did not establish that the layoff was permanent as opposed to temporary. We share the impatience of the Administrative Law Judge with Respondent 's conclusory testimony and note that Respondent had available to it sales figures upon which presumably its predictions of future em- ployment expectancy were made ; yet those figures were not offered . In the absence of figures or some form of supporting evidence Respondent 's testimony amounts to little more than a bald assertion that there was no reasonable expectancy of recall , which, being self serving, is not entitled to significant weight. D. H. FARMS CO. 113 D. Conclusions Since we have regarded some of Respondent's testi- mony as "newly discovered" since the August 3, 1970, hearing , we have considered the record as a whole. The critical question which we must decide is whether the 19 laid-off employees in question enjoyed a reasonable expectancy of recall on the date of the election, September 23, 1970. This question, as we have noted, depends on objective factors ,3 including the past experience of the employer, the employer's future plans , and the circumstances of the layoff, in- cluding what the employees were told as to the likeli- hood of recall .4 Here, the employees could expect to be recalled, the Employer expresses an intention of keeping laid-off employees on a recall list , and nearly half the employees were actually recalled . There was no evidence of a continued decline of sales, a phasing out of a line of production , or termination of part of the business . The Employer had experienced a history of increased production and employment without any prior layoffs of consequence . We find that the said 19 employees enjoyed a reasonable expectancy of recall. Accordingly,, we reaffirm our prior decision and order set forth at 192 NLRB 53. ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended , the National Labor Rela- tions Board hereby reaffirms its prior decision ' issued July 9, 1971 (192 NLRB 53), and orders that Respon- dent, D. H. Farms Co ., Howell, Michigan, its offi- cers, agents , successors , and assigns , shall take the action set forth in said Decision. 3 Sierra Lingerie Company, 191 NLRB 844. 4 Nordam, Inc., 173 NLRB 1153. SUPPLEMENTAL DECISION THOMAS S . Wi soN, Administrative Law Judge : Pursuant to the following opinion of the United States Court of Ap- peals for the Sixth Circuit decided and filed on August 11, 1972: Phillips, Chief Judge. This case is before the court on the application of the National Labor Relations Board for enforcement of its bargaining order against D. H.. Farms _Co. (the compa- ny), reported at 192 NLRB No. 15 . The Board found that the Company violated § 8(a)(5) and (1) of the Act by refusing to bargain with the Union, which had been certified by the Board as the exclusive representative of the Company 's employees.. Reference is made to the reported decision of the Board for a detailed recitation of the facts. On August 8, 1970 , there was a pre-election hearing on the issue of whether some 24 employees who had been laid off July 8 , 1970, were eligible to vote. On August 24 , the Regional Director issued a decision and direction of election wherein he concluded that these employees had a "reasonable expectation of recall within a reasonable time in the future " and therefore were entitled to vote. At the representative election held September 22, 1970, 19 of the 24 laid-off employees appeared and voted under challenge by the Company. Of the unchal- lenged votes ten were for the Union and 18 against. After the challenged ballots were counted the vote was 29 for the Union and 19 against. The Regional Direc- tion thereupon certified the Union as exclusive repre- sentative of all employees in the unit for purposes of collective bargaining. The General Counsel filed a motion for summary judgment . The Company requested denial of the mo- tion for summary judgment and requested a hearing on new evidence, which it contended was previously un- available, pertaining to the eligibility of the laid-off employees . The affidavit of the plant manager, which was filed in support of a hearing, is made Appendix A to this opinion . The Board denied the request for a hearing, granted summary judgment and entered the bargaining order. We agree with the Board that, in the absence of newly discovered or previously unavailable evidence or special circumstances, a respondent in a proceeding alleging a violation of § 8(a)(5) is not entitled to reliti- gate issues which could have been litigated in a prior representation proceeding. . . . We also agree that the eligibility of employees who are not working on the day of the election, including those on layoff , must be de- termined from the facts as' they existed on the day of the election. . . . We do not agree , however, with the contention that the, affidavit, Appendix A, is vague or conclusory. To the contrary , we hold that the affidavit asserts facts requiring a hearing and that the Board erred in granting the motion of the General Counsel, for summary judgment. . . . The decision of the Re- gional Director was based upon facts as they existed at the time of the preelection hearing August 8, 1970, and not as of the date of the election September 22. Under the facts and circumstances of this case , it is our opin- ion that the affidavit , Appendix A, and the Company's request for review raised substantial and material fac- tual issues concerning the eligibility of laid-off employ- ees on the date of the election . Summary judgment therefore was improper. Enforcement of the bargaining order based on the16 summary judgment is denied . The case is remanded to the Board for a hearing. [Citations and footnote omitted.] The Board by Order dated November 2, 1972, ordered a hearing on this remand to be heard by an Administrative Law Judge in accordance with said decision and thereafter "To prepare and serve on the parties a decision containing findings of fact, conclusions of law , and recommendations based upon the evidence received." 114 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Pursuant to notice, a hearing on such issues was held before me in Detroit, Michigan, on December 12, 1972., All parties appeared at the hearing, were represented by coun- sel, and were afforded full opportunity to be heard, to pro- duce and cross-examine witnesses, and to introduce evidence material and pertinent to the issue. At the, conclu- sion of the hearing oral argument was waived. Briefs have been received from General Counsel, Respondent, and the Union on January 26, 1973. Upon the entire record in the case and from my observa- tion of the witnesses, I make the following: FINDINGS OF FACT On August 8, 1970, the Regional Director ordered a hear- ing on the issue raised by Respondent as to whether the 24 employees suddenly laid off by Respondent on July 8, 1970, had a "reasonable expectation of recall to employment within the near future." The private parties were then repre- sented by the same attorneys as appeared at the instant hearing. At that hearing Respondent produced its plant manager, Leonard J. Savitskie, who testified that these 24 employees had been told at the time of the layoff on Wednesday, July 8, 1970, that "Due to the lack of business they would not be needed at this time" but that "if sufficient work came in, [Respondent] would call them." Savitskie also testified that on July 8 1 he "suddenly" had discovered that Respondent was "out of work" and had, therefore, ordered the layoff of 34 of Respondent's complement of some 70 employees. He also testified that an individual named Burnett almost im- mediately thereafter gave him some orders to fill so that on Friday, July-10, and Monday, July 14, he recalled eight of these laid-off employees. Savitskie further testified that he received his production orders from Burnett but that be- yond that he knew nothing about the sales end of Respondent's business. In fact, according to his testimony, he knew nothing about this individual Burnett beyond the fact that he was "the boss" and made out Savitskie's pay- checks. Savitskie rounded out his testimony by stating that, as of that time, August 8, he did not have any expectation of recalling the remaining laid-off employees within the next 6 months. Upon this testimony, as noted in the court's opinion, the Regional Director held, contrary to Savitskie's testimony, that these laid-off employees did have a "reasonable expec- tation of recall." Respondent appealed this decision of the Regional Director to the Board which denied the appeal. As noted, the election was then held on September 23 with 19 of the 26 laid-off employees voting ballots which were challenged as ineligible voters by Respondent. On Sep- tember 24 the Regional Director requested evidence from Respondent on the question of the eligibility of the chal- lenged voters. The aforementioned affidavit dated October 5, 1970, of Leonard J. Savitskie was the sole evidence pre- sented by Respondent in answer to this request. The Re- gional Director thereupon denied the challenges and ordered the challenged ballots counted with the results not- 1 All dates herein are in the year 1970 unless otherwise specified. ed in the opinion, Respondent appealed that decision of the Regional Director to the Board which, in turn, denied Respondent's appeal. The Union was certified on March 5, 1971. At the instant hearing Savitskie was once again Respondent's main witness. He added one element not re- ferred to in his previous testimony or in his affidavit of October 5 which was that, about a week prior to the election of September 23, he and Burnett had been called to the office of Respondent's attorney and instructed to call a Michael Robert, allegedly the production manager of Difco and manager of Research Engineering, to determine if the employees laid off on July 8 had any reasonable expectation of recall. Savitskie made this telephone call and received a negative response from Robert. Otherwise Savitskie's testi- mony here was a mere reiteration of his testimony at the hearing on August 8. There was no explanation as to why Savitskie could not have telephoned Robert prior to the August 8 hearing as well as on or about September 16. Michael Robert also testified at the instant hearing. He proved to be the manager of Research Engineering who for 10 years had worked for Difco and for the past 2 years, beginning shortly after September 23, had been in charge of production control of Difco. Robert's "boss" and the man who also signed his checks was the same individual [David?] Burnett who apparently had something to do with Difco as well as with Respondent but, according to the testimony, had no title and/or titles which Robert knew about. Origi- nally Robert had described Burnett as his "courier" for the taking of orders from him to Respondent. Robert acknowl- edged that Savitskie had telephoned him about a week be- fore the September 23 election saying that he had been requested to get the aforementioned information for Bur- nett and the attorney and had also asked for "some idea" of Respondent's workload for the ensuing year. As a result of this telephone call Robert took a "computer print out" from the Difco computer which would tell on a 3-month basis "where we were below a specific stock level" on a product. As a result of this investigation Robert reported to Savitskie that he could see no increase in production at all and actually foresaw a decrease because "our share of the market had fallen and fallen rapidly," apparently because the word was getting out that "our" quality was inferior.2 Robert acknowledged he had nothing to do with the sales for Difco or for Respondent. He did know that Respondent had a quality control problem in the latter part of 1969 which had been solved about March 1970. Further Robert acknowledged that he did not "bother" to bring the comput- er printout on which he relied to the hearing. [David?] Burnett, although the admitted "boss" of both Savitskie of the Respondent and Robert of Difco through whom all of Respondent's products were sold, remained a mystery. He did not testify. As such "boss" of both Savitskie and Robert, it would seem that Burnett would know more about the situation at Respondent on September 23, 1970, than either Savitskie or Robert. Thus it appears a fair infer- ence, which I draw, that, if called as a witness, Burnett's testimony would have been unfavorable to the Respondent. 2 It was not clear whether "our share" referred to Difco or to Respondent or to both. D. H. FARMS CO. 115 None of the evidence presented at the instant hearing was, "newly discovered or previously, unavailable or [amounting to] special circumstances." All of it had been previously litigated at the prior representation case on August 8 and again reiterated in the Savitskie affidavit of October 5. At some time litigation must come to an end. This seems to be that time. The only new fact adduced at the instant hearing-and that by way of an offer of proof due to the fact of the agreement that it was not evidence admissible under the court's limited remand-was that none of the laid-off em- ployees had been reinstated by Respondent at the date of the hearing although one of them was about to be. Conclusions I conclude that there was no change in the reasonable expectation of recall of the employees laid off on July 8 between August 8, 1970, and September 23, 1970. RECOMMENDATION I, therefore, recommend that the Board reaffirm its deci- sion of July 9, 1971, and of November 9, 1971. Copy with citationCopy as parenthetical citation