Eastman Kodak Co.

National Labor Relations Board - Board Decisions

Apr 28, 1969

175 N.L.R.B. 626 (N.L.R.B. 1969)

626 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Texas , Eastma4 . Company , Division of Eastman
Kodak • Company, and Caddo Construction
Company, Successors to Hychem Constructors,
Inc.,and Plumbers,and Steamfitters Local No. 301,
United Association of Journeymen and Apprentices
of the Plmhbing and Pipe Fitting Industry of the
United States and Canada, AFL-CIO, Petitioner.
Case 16-RC-4475
April 28, 1969
DECISION, ORDER, AND SECOND'
DIRECTION OF ELECTION
BY MEMBERS FANNING, JENKINS, AND ZAGORIA
We begin with a statement of the most recent
procedural developments and the present posture of
this case . On January 23, 1968, we issued a Decision
on Review and Direction of Election in this case,'
directing an election in a unit of pipefitters,
pipefitter helpers, and welders employed by Hychem
Constructors, Inc., at the Longview, Texas, plant of
the Texas Eastman Company. In the Decision, the
National Labor Relations Board found that Texas
Eastman Company maintained a contract with
Hudson Engineering Corporation pursuant to which
Hychem, as Hudson 's subcontractor, was engaged in
performing construction work at the said Longview
plant. The Board also found, under the facts
presented throughout the proceedings, that the
Texas Eastman Company was not a joint employer
of Hychem's employees.
On February 2, 1968, Hychem Constructors, Inc.,
and Hudson Engineering Corporation filed with the
Regional Director for Region 16 of the National
Labor Relations Board a Motion to Dismiss the
petition herein on the ground that, by letter dated
April 20, 1967, Texas Eastman Company
terminated its construction contract with Hudson
Engineering Corporation, effective on May 1, 1967,2
and that since April 29, 1967, no employee of
Hychem Constructors, Inc., or Hudson Engineering
Corporation has been assigned by either of said
companies to perform any work at the said Texas
Eastman Company plant at Longview, Texas.' By
letter dated February 5, 1968, counsel for Texas
Eastman Company confirmed that its construction
contract was terminated after notice had been served
upon it by Hudson Engineering Corporation on
April 12, 1967. Counsel for Texas Eastman further
advised that Caddo Construction Company, a
wholly owned subsidiary of Eastman Kodak
Company, has been formed to undertake the work
previously performed by Hudson; and that Caddo
has hired a substantial number of former employees
of Hudson-Hychem.
'Hychem Constructors, Inc., 169 NLRB No. 38.
'At no point during the proceedings on review was the Board eve
advised of the termination of the construction contract between Texa
Eastman Company and Hudson Engineering Corporation.
On February 5, 1968, Texas Eastman Company
filed with the Regional Director for Region 16 a
Motion to Dismiss the petition as to Texas Eastman
Company, pursuant to the finding in the Board's
Decision on Review and Direction of Election that
the Texas Eastman Company was not a joint
employer of the employees in the requested unit.
On March 26, 1968, the Board issued a Notice to
Show Cause:
why Texas Eastman Company, Division of
Eastman Kodak Company, and Caddo
Construction Company, a wholly owned
subsidiary of Eastman Kodak Company, should
not be substituted as successors to Hychem
Constructors, Inc., and Hudson Engineering
Corporation, as the single employer or joint
employers in the unit found appropriate in the
Board's Decision on Review and Direction of
Election issued on January 23, 1968;' why said
Decision should not be amended accordingly; and
why Texas Eastman's Motion to Dismiss the
petition should not be denied.
'Such substitution would constitute a dismissal of the petition as
to Hudson and Hychem.
Texas Eastman filed with the Board on April 4,
1968, its Response to the Board's Notice to Show
Cause, contending that upon termination of the
Hudson-Hychem contract some Hychem employees
obtained employment with another contractor
(Brown and Root) performing construction work for
Texas Eastman, while other Hychem employees
were hired by Caddo Construction Company, a
wholly owned subsidiary of Texas Eastman which
was established to continue the construction
previously performed by Hudson-Hychem; that
Caddo cannot be found a successor to
Hudson-Hychem, in view of the lack of evidence
(owing to the failure to conduct a hearing)
concerning changes in the construction operation,
ownership of the companies, and other factors; that
Texas Eastman, even if found a successor, is entitled
to a new hearing on the issue of the appropriate
unit; and that such a hearing would reveal an
operation different from that on which the prior unit
determination was based and, hence, require a
different unit determination.
Also on April 4, 1968, the Petitioner filed with
the Board a Statement in Support of Substitution of
Texas Eastman and Caddo as Successor-Employer
or Successor-Joint Employers, asserting that Caddo
is admittedly Hychem's successor; that it offered
employment to all of Hychem's employees; and that
the Caddo operation was identical to that of
Hychem previously, the change being a "paper
transfer," and Caddo and Texas Eastman appearing
'Neither the Request for Review filed by Texas Eastman Company on
April 13, 1967, nor its Brief in Support of Review filed May 24, 1967,
revealed this change To the contrary, Texas Eastman 's brief stated that its
"Request for Review heretofore filed sufficiently states the facts . . in
support of its position."
175 NLRB No. 105
TEXAS EASTMAN COMPANY 627.
to be joint employers.
On May 23, 1968, the Board ordered that the
record "be reopened and that a further hearing be
held for the purpose of resolving the issues raised by
Texas Eastman' s Response to Notice to Show
Cause" and remanded the case to the Regional
Director for Region 16 for the purpose of such
hearing. -
The hearing was held on July 30 and 31, 1968,
before Hearing Officer Thomas P. Sheridan. After
the hearing was closed, the Regional Director for
Region 16 transferred the case to the Board.
Thereafter, Texas Eastman Company and Caddo
Construction Company jointly filed a timely brief.
Pursuant to the provisions of Section 3(b) of the
National, Labor Relations Act, as amended, the
National Labor Relations Board has delegated its
powers in connection with this case to a
three-member panel.
The Board has reviewed the rulings of the
Hearing Officer made at the hearing and finds that
no prejudicial error was committed. The rulings are
hereby affirmed. The Board has considered the
entire record in this case with respect to the issues
raised by Texas Eastman Company's Response to
the Notice to Show Cause, including the brief of
Texas Eastman and Caddo, and makes the following
findings and conclusions:
The Successorship and Joint Employer
_ Questions
Our test for determining whether an employer is a
successor employer, is whether the employing
industry remains essentially the same after a
transfer." Under this identity-of-enterprise standard,
we conclude that Caddo and Texas Eastman are
successors to Hudson -Hychem, relying particularly
on the evidence summarized herein, and the record
as a whole.
On April 12, 1967,' Hudson notified Texas
Eastman by letter that it intended to terminate its
contract under which Hudson's subsidiary, Hychem,
performed construction for Texas Eastman. The
letter stated that the effective date of termination
would occur in 90 days. On April 18, Hychem
posted a notice to all its employees which advised
them of Hudson's letter to Texas Eastman, and that
Texas Eastman had "accepted." On April 20, Texas
Eastman wrote Hudson, acknowledging receipt of
the April 12 letter, and changing the effective date
of termination from July 12 to May 1. Also on
April 20, Caddo was incorporated as a wholly
owned subsidiary of Texas Eastman. On the same
date, Caddo mailed a letter to all former Hychem
employees, with employment applications enclosed.
'Valleydale Packers, Inc., 162 NLRB 1486, 1490 . See also West
Suburban Transit Lines, Inc., 158 NLRB 794, 797; Perma Vinyl
Corporation , 164 NLRB No. 119 , pages 4-5, enfd. sub nom . U. S. Pipe
and Foundry Co. v. N.L.R.B., 397 F .2d 554 (C.A. 5, 1968); Pargament
Fidler, Inc, 173 NLRB No. 102.
The letters offered each addressee employment with
Caddo, and also said, in part:
The contract between Texas Eastman Company
and Hudson Engineering Corporation will end on
May 1, 1967. The work at Texas Eastman's plant
which was formerly contracted to Hychem will be
carried on by Caddo Construction Company ....
The letter also instructed those interested in working
for Caddo to report on April 24, with their
completed applications, to a Caddo representative at
the North Gate clock station on the property of
Texas Eastman's plant. The Hychem-Caddo
applicants reported as instructed, and the Caddo
representatives accepted the applications. On April
25, representatives of Texas Eastman's Industrial
Relations Department began meeting with the
applicants in groups of 20. These representatives,
including Texas Eastman's Director of Industrial
Relations, explained to the applicants "that they
were being offered employment with [Caddo, and
told] a little bit of the philosophy of what we hoped
to do in the construction business at the Texas
Eastman Plant site." The Texas Eastman
representatives also explained Caddo's wage
structure and job classifications; distributed copies
of a statement of Caddo's personnel policies and
employee benefits program;' and discussed Caddo's
employee benefits program in detail. Afterward,
Texas Eastman representatives individually
interviewed, and then hired, those interested in
working for Caddo. The new hires were instructed
to report for work May 1. Texas Eastman and
Caddo witnesses conceded that, as noted above, the
offer of employment was made to all Hychem
employees; that all accepted; and that all the
Hychem supervisors likewise were offered, and
accepted, jobs with Caddo. No one else was hired by
Caddo at that time.
On May 1, Texas Eastman and Caddo executed a
construction contract.' Pursuant to this agreement,
Caddo resumed construction of the same project
'All dates herein refer to 1967, except where otherwise indicated
`Concerning wage policy, this statement said , in relevant part "It is our
intention to- (1) Pay wages equal to or above those paid in the area for
similar work performed under comparable conditions of employment and
requiring like responsibility , experience , effort and skill . . (2) give
consideration to fairness between the rates paid for various classes of work
between work groups."
'Under the terms of this contract
t Caddo will do such structural , mechanical , electrical , instrumentation,
piping above and underground , buildings and other related construction
work including repair, replacement and maintenance as may be
authorized by Eastman from time to time on its plant site near
Longview , Texas.
2. All authorizations for work under this contract will be in writing by
Eastman furnishing to Caddo in each case the necessary detail drawings,
specifications, location plan and other instruction as prepared by
Eastman or by other engineering contractors doing work in Eastman's
behalf. Caddo will be advised of Eastman's schedules for completions of
the work , subject , however , to any changes in such schedules as may be
dictated by Caddo's work force.
n s s r s
8. This contract constitutes the entire agreement between the parties for
the construction work herein stated and supersedes all prior agreements,
written and oral, relating thereto.
s r s s n
628 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
previously being built by Hudson-Hychem.x Caddo's
offices on the Texas Eastman property are those
which were formerly occupied by Hychem. Frank
Traylor, formerly Hychem's office manager, and its
supervisor of the toolroom and the field clerk, was
employed in the same capacities by Caddo. He
brought his whole staff with him to Caddo.
On the basis of the foregoing and the record as a
whole, we are satisfied that Texas Eastman and
Caddo are Hudson-Hychem's successors under the
identity-of-enterprise test mentioned above. Thus,
Caddo was created, and entered a construction
contract with, Texas Eastman the very day the
Hudson-Hychem contract was terminated. Caddo
solicited, interviewed, and hired all Hychem
employees. It hired no one else. This Caddo work
force performed the same work,' on the identical
project, at the precise location, for the same
"customer," as they had previously done under
Hychem. And the performance of this essentially
identical enterprise was virtually uninterrupted by
the mere transfer of employees.
Our conclusion that Texas Eastman and Caddo
are successors to Hudson-Hychem is not affected by
the fact that Caddo's hourly employees were paid at
a slightly higher scale than they had earned at
Hychem, or because after the transfer, they worked
under modified personnel policies; for nothing in the
record persuades us that these factors in any way
altered the identity of the enterprise.
Similarly, it is true that Texas Eastman owned no
Hudson-Hychem stock; that there were no corporate
officers common to both companies; that neither
Texas Eastman nor Caddo purchased any assets
from Hudson-Hychem, or assumed any contract or
other obligations of the latter; that neither made any
agreement with Hudson-Hychem to employ any
Hudson-Hychem personnel; that Hudson is still in
business although Hychem is no longer an operating
company; that Caddo had no relationship or
dealings of any kind with Hudson-Hychem; and that
Texas Eastman made no payment to
Hudson-Hychem as a result of the contract
termination, except the settlement of accounts.
These facts, however, are not controlling - either
singly or collectively - since it is not the form of
the transfer which controls but, as stated above,
whether the employing industry remained essentially
the same." Here, it did. There has been "no change
in any essential attribute of the employment
relationship."" For this reason, a question affecting
commerce still exists concerning the representation
of Caddo's employees. We shall, therefore, herein
'George Prendergast , Jr., assistant secretary of Texas Eastman and also
assistant secretary of Caddo , estimated at the hearing that the cost of the
amount of construction remaining to be performed beyond May 1, when
the contract with Hudson was terminated and that with Caddo was
executed, was "approximately a million and six hundred thousand dollars,
in round dollars"; and that the continuation of that construction was still
being performed by Caddo.
'Not only did the work force continue to perform plant construction, but
individual employees had substantially identical assignments. See
discussion of the unit question , infra.
amend the Decision on Review and Direction of
Election to reflect the successorship, by substituting
Texas Eastman Company, Division of Eastman
Kodak, and Caddo Construction Company for
Hychem Constructors, Inc.' 2
Our Order shall name not only Caddo, but also
Texas Eastman, as successors to Hychem, because
the parent and its subsidiary exert joint control over
Caddo employees and are, hence, joint employers.
Thus, as already stated, Texas Eastman officials
administered the hiring of the ex-Hychem employees
for Caddo, explaining to them wage rates, job
classifications, company policies and benefits;"
Caddo's offices are located on the property of the
Texas Eastman plant at Longview; and Texas
Eastman assigns work to Caddo, and polices the
performance of the work.14 In addition, the Texas
Eastman Industrial Relations Department holds
training classes for Caddo supervisors, and has veto
power over the discipline of Caddo employees;
Caddo's employee seniority policies are determined
by Texas Eastman; Caddo does work for no one
other than Texas Eastman; Eastman Kodak
Company, of which Texas Eastman is - a division,
owns all the Caddo stock; the Board of Directors of
Caddo are all Texas Eastman employees; and all of
Caddo's officers are employees of Eastman Kodak
or one of its subdivisions.' S
The Unit Question
In our January 23, 1968, Decision and Direction
of Election in this case, we found appropriate a unit
composed of:
All pipefitters, pipefitter helpers, and welders
employed by Hychem Constructors, Inc., at the
Longview, Texas, plant of Texas Eastman
Company, a Division of Eastman Kodak
Company, excluding office clerical employees,
professional employees, all other employees,
watchmen, guards, and supervisors as defined in
the Act.
'°Valleydale Packers, Inc., supra
"Allan W Fleming, Inc, 91 NLRB 612, 614 , Barker Automation, Inc,
132 NLRB 794, 796. See also Wackenhut Corporation v. International
Union, United Plant Guard Workers of America, 332 F.2d 954, 958 (C.A
9); United Steelworkers of America v Reliance Universal Inc of Ohio,
335 F.2d 891, 894 (C A. 3), Monroe Sander Corporation v Livingston,
377 F 2d 6, 11-12 (C A 2)
"See the Fleming and Barker cases, supra, fn. 11 Cf. Valleydale
Packers, Inc, supra (successor assumes duty to bargain), and Perma Vinyl
Corporation , supra (successor bound, under circumstances , to remedy
unfair labor practices).
"Texas Eastman' s Director of Industrial Relations testified that these
policies were "essentially the same" as those established for another
Eastman Kodak subsidiary several years ago
"Based on the quoted material in fn. 7, supra , and the record as a
whole.
"Even if Texas Eastman and Caddo were not successors to Hychem, we
would in any event substitute them as the Employer-in-interest , because
they received notice of this proceeding, appeared , and litigated the issues,
and the record supports their joint employer capacity . They cannot,
therefore , be prejudiced by such substitution . See New Laxton Coal
Company, 134 NLRB 927; cf. John Davis Enterprises, 104 NLRB 584,
586, fn. 3.
TEXAS EASTMAN COMPANY 629
This determination was based on the lack of
bargaining history, the absence of any other labor
organization seeking to represent these employees
on any other basis, and the fact that the pipefitters,
pipefitter helpers and welders were found to be a
"readily identifiable and homogeneous grouping of
construction tradesmen with a community of interest
separate and apart from other employees." The last
finding, in turn, was based particularly on the
following considerations: The separate organization
of the pipefitting department under its own
supervision; the high wages of the pipefitters and
welders; their on-the-job training; the special skills
required for their work; the fact that they spent
more than one-half their time in pipefitting duties
(including the great majority of the most difficult
pipefitting assignments and all pipe welding); and
the fact that other skilled groups spent significantly
less than half their time in pipefitting work (usually
in the lower skilled pipefitting assignments and this,
frequently, in abnormal circumstances).
Texas Eastman and Caddo now contend that the
above-described unit is not appropriate. Instead,
they urge, the only unit now appropriate is "all
hourly paid employees performing work for Caddo
at Texas Eastman's plant in Longview, Texas." To
establish this claim, they recite: (1) Caddo has no
formal or systematic apprenticeship program; (2)
Caddo, for the purpose of maintaining a stable work
force, effects substantial interchange of employees
and duties across traditional or formal craft lines;
(3) Caddo groups all employees into four job
classifications, each with a different hourly wage
rate,'' and each encompassing employees of what
were, under Hychem, the several crafts; (4) Caddo
has no department of pipefitters, or any other
department based on a primary skill, separately
organized as such; and (5) Caddo has no general
foremen supervising all employees of a particular
primary skill. We think this unit contention, and the
asserted bases on which it rests, are without merit.
We have examined the record as a whole, and find it
deficient in evidence that, as compared with the
situation under Hychem, any appreciable change has
occurred in either the day-to-day work performed by
the employees petitioned for, or in the proportion of
pipefitters' work they do." Indeed, the contrary
appears - that the nature and quantity of their
work is substantially identical to that which they
performed under Hychem; and the same is true of
the other employees. In this context, we think two
factors relied on by the Employers - the four
employee classifications, and the crew organization
- are too tenuous a basis for a different unit
determination; for the first is a renaming of jobs
only, while the latter affects merely where
employees report for work, not what they do.
Similarly, we are not persuaded that the lack of any
general foreman supervising all employees of a
particular primary skill - a lack described in the
Employer's brief - represents more than an illusory
change.18
In sum , we find that the factors relied on in our
original unit determination for Hychem employees,
remain substantially unchanged.19 For this reason we
find that unit still appropriate.20
ORDER
It is hereby ordered that the unit found
appropriate herein be, and it hereby is, amended by
inserting before the word "Hychem" the words
"Texas Eastman Company, Division of Eastman
Kodak Company, and Caddo Construction
Company, successors to."
[Second Direction of Election=' omitted from
publication.]
"These are general construction mechanic ($4.25); construction mechanic
($3.75); mechanic helper ($2.25); and laborer ($2.00 and $1 .95). These
rates were made effective May 1, 1967, and were subsequently increased.
"We based this finding primarily on the testimony of Caddo's
construction superintendent , Wilson, taken as a whole. Wilson held the
same position at Hychem , and is the only witness who testified at both the
last and the present hearing. Frequently he compared the Caddo operation
with that of Hychem. See, e .g., fn. 19, infra.
Our finding in this regard is not swayed by certain evidence which
appears to indicate that , in some instances , pipefitters or other employees
of a particular craft might work under a foreman of a different craft; for
the record is silent as to the scope and nature of the supervision - e.g., as
to whether these foremen are competent to pass on the quality of the
(pipefitters ') work , or whether the foremen in fact direct their performance
of it , or evaluate the work.
"Thus, Wilson testified that specific crew foremen supervise crews whose
craft lines are essentially preserved.
"When, on cross-examination, Wilson was asked squarely to describe
what changes Caddo implemented , after May 1, in the way it performed
the work formerly done by Hychem, he could identify only two : (1) greater
attention is paid , under Caddo's operation, to safety rules and plant safety;
and (2) Caddo uses the personnel to perform slightly more maintenance
work which, he estimated, now consumes about 10 percent of the time of
Caddo employees.
"Texas Eastman and Caddo claim that a unit determination herein
based on any evidence from the record in this case except that adduced at
the present hearing, denies them procedural due process of law . We think
there is no merit to this contention , for their own principal witness,
Wilson, admitted that the operation under Caddo, and the duties of its
employees , were not substantially different from the situation which
previously existed under Hychem . See, e.g., fn. 19 . Accordingly, the
considerations on which we based our original unit determination are
dispositive now; and from this follows the same unit determination. See
New Laxton Coal Company, supra.
"An election eligibility list, containing the names and addresses of all the
eligible voters , must be filed by the Employers with the Regional Director
for Region 16 within 7 days after the date of this Decision, Order, and
Second Direction of Election. The Regional Director shall make the list
available to all parties to the election . No extension of time to file this list
shall be granted by the Regional Director except in extraordinary
circumstances . Failure to comply with this requirement shall be grounds
for setting aside the election whenever proper objections are filed . Excelsior
Underwear Inc., 156 NLRB 1236.