John R. Cowley And Bro., Inc.Download PDFNational Labor Relations Board - Board DecisionsFeb 23, 1990297 N.L.R.B. 770 (N.L.R.B. 1990) Copy Citation 770 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD John R. Cowley and Bro., Inc. and Industrial Union of Marine & Shipbuilding Workers of America, Local 18. Case 15-CA-10314 February 23, 1990 DECISION AND ORDER BY CHAIRMAN STEPHENS AND MEMBERS CRACRAFI' AND DEVANEY On September 18, 1989, Administrative Law Judge J Pargen Robertson issued the attached de- cision The Respondent and the General Counsel have filed exceptions and supporting briefs The National Labor Relations Board has delegat- ed its authority in this proceeding to a three- member panel The Board has considered the decision and the record in light of the exceptions and briefs and has decided to affirm the judge's rulings, findings, and conclusions as modified and to adopt the recom- mended Order as modified and set forth in full below The judge found that the Respondent violated Section 8(a)(5) and (1) of the Act by failing to timely notify the Union of its decision to cease op- erations We agree with the judge's finding, but only for the reasons set forth below 1 The Respondent began expenencmg economic difficulties in the fall of 1986 In early January 1987, 2 the Respondent conducted negotiations for the sale of its business On January 16, the Re- spondent wrote the Union stating that "all employ- ees were terminated and the Company ceased the operation of its business effective January 16" In addition, the letter stated that the parties' collec- tive-bargaining agreement "is terminated" The Respondent also expressed its willingness to negotiate over the effects of the decision to close its business The Union received the letter on Janu- ary 20 From January 16 to 20 the Respondent em- ployed supervisory personnel in order to reduce its inventory Upon receipt of the January 16 letter, the Union telephoned the Respondent and com- plained From January 20 to 31, the Respondent re- called six unit employees to reduce the inventory The record indicates that the sale of the Respond- ent's business was completed on February 6 The judge found that the Respondent made its decision to close on January 15, and that the Union received notice of the decision on January 20 The judge found further that the Respondent ceased op- , No exceptions were filed to the judge s finding that the Respondent violated Sec 8(a)(5) and (1) of the Act by unilaterally discontinuing con- tractually required medical insurance benefits on December 31, 1986 'All dates hereafter refer to 1987 erations on January 31, the date on which the Re- spondent ceased reducing its inventory The judge noted that the Respondent could have notified the Union by telephone on January 15 of its decision made that day to cease operations, rather than by letter, which was not received by the Union until January 20 The judge found that, by failing to inform the Union of its decision to cease operations at the earliest possible moment, the Respondent had failed to timely notify the Union of its decision, thereby depriving it of the opportunity to bargain over the effects of the clo- sure 3 The judge noted that the Union was harmed by the lack of timely notice in that it lost the op- portunity for unit employees to work from January 16 through January 20 The judge also concluded, however, that follow- ing notification, the Union did not formally request bargaining over the effects of the decision to close and, accordingly, that the Respondent did not refuse to bargain over the effects of its decision to close We find, contrary to the judge, that the date of closure of the Respondent's business occurred on January 16, rather than January 31 In so finding, we note first that it is undisputed that the Respond- ent notified the Union that cessation of operations was effective on January 16, and the Respondent never thereafter informed the Union that closure was to occur on a different date Second, the Re- spondent, in its answer and amended answer to the complaint and amended complaint, admitted that closure occurred on January 16 Third, according to the Respondent's January 16 letter to the Union, the Respondent terminated all of its employees on January 16 and also terminated the parties' contract on that date Fourth, the judge erred in relying on the Respondent's activity in reducing its inventory from January 16 to January 31 as the basis for find- ing that cessation of operations occurred on the latter date Such activity was not a regular aspect of the Respondent's business, and it is undisputed that the Respondent ceased accepting business from its clients on January 16 In sum, the record amply supports the conclusion that normal operations ceased on the very date the Respondent selected, January 16 Having found that the Respondent closed its business on January 16, and noting that it is undis- puted that the Union received notification of clo- sure on January 20, we find that the Respondent violated Section 8(a)(5) and (1) of the Act by fail- 3 The General Counsel does not contend, and the amended complaint did not allege, that the Respondent was obligated to bargain with the Union over the decision itself to cease operations 297 NLRB No 126 JOHN R COWLEY & BRO , INC 771 ing to timely notify the Union of its decision to cease operations 4 By failing to notify the Union until after cessation of operations had actually taken place, the Respondent precluded meaningful bargaining over the effects of its decision to close, and thereby refused to bargain with the Union re- garding the effects of its decision to cease oper- ations 5 Accordingly, we do not adopt the judge's finding that the Respondent did not refuse to bar- gain over the effects of its decision to cease oper- ations Furthermore, since the Union did not receive no- tification of closure until after it had actually oc- curred, the Union was not at that time obligated to request bargaining regarding the effects of that de- cision Accordingly, the judge's finding that the Union failed to formally request bargaining with the Respondent when it received the untimely noti- fication is irrelevant to our finding that the Re- spondent violated the Act by failing to give timely notification to the Union See NLRB v National Car Rental System, 672 F 2d 1182, 1187-1189 (3d Or 1982) AMENDED REMEDY The judge's remedy° does not provide the usual remedy given by the Board in cases in which an employer refuses to bargain about the effects of its decision to close 7 We see no reason for deviating from our usual remedy in this case Accordingly, we shall order the Respondent to bargain with the Union, on request, about the effects of its January 16 discontinuance of business operations Further, to ensure meaningful bargaining and to effectuate the policies of the Act, we shall order the Re- spondent to pay its employees backpay at the rate of their normal wages when last in the Respond- ent's employ from 5 days after the date of this de- cision until the occurrence of the earliest of the fol- lowing conditions (1) the date the Respondent bar- gains to agreement with the Union on those sub- 4 In so finding, we do not adopt the judge s statement that an employer is obligated to inform the union of its decision to close at the earliest pos- sible moment, or any implication that an employer must use any particu- lar means of communication Rather, we rely on the standard set forth in First National Maintenance Corp v NLRB, 452 U S 666, 682 (1981), 1 e, an employer must conduct effects bargaining 'In a meaningful manner and at a meaningful time" An element of "meaningful" bargaining is "timely notice to the union of the decision so that good faith bar- gaining does not become futile or impossible" Penntech Papers v NLRB, 706 F 2d 18, 26 (1st Or 1983), cert denied 464 US 892 (1983) 5 Metropolitan Teletronics, 279 NLRB 957, 958-959 (1986), enfd mem 819 F 2d 1130 (2d Cir 1978) 'The judge did not order that the Respondent bargain with the Union concerning the effects of its decision to close Rather, the judge ordered that the Respondent pay those unit employees deprived of employment from January 15 until the Union received notice on January 20 of the Respondent's closure 7 Transmarine Navigation Corp, 170 NLRB 389, 390 (1968), Emsing's Supermarket, 284 NLRB 302 (1987), enfd 872 F 2d 1279 (7th Or 1989) jects pertaining to the effects of the discontinuation of its operations, (2) a bona fide impasse in bargain- ing, (3) the failure of the Union to request bargain- ing within 5 days of this decision or to commence negotiations within 5 days of the Respondent's notice of its desire to bargain with the Union, or (4) the subsequent failure of the Union to bargain in good faith In no event shall the sum paid to any of the employees exceed the amount each would have earned as wages from the time the Respond- ent terminated its operations, to the time each se- cured equivalent employment elsewhere, or the date on which the Respondent shall have offered to bargain, whichever occurs first, provided, how- ever, that in no event shall this sum be less than the amount these employees would have earned for a 2-week period at the rate of their normal wages when last in the Respondent's employ In addition, the Respondent shall make its em- ployees whole for any losses resulting from the Re- spondent's failure to make contractual medical in- surance payments in the manner prescribed in Kraft Plumbing & Heating, 252 NLRB 891 fn 2 (1980), enfd 661 F 2d 940 (9th Cir 1981) Interest on all sums due under the Order herein shall be computed as provided in New Horizons for the Retarded, 283 NLRB 1173 (1987) In view of the Respondent's termination of its operations, we shall provide for mail notices to em- ployees ORDER The National Labor Relations Board adopts the recommended Order of the administrative law judge as modified and set forth in full below and orders that the Respondent, John R Cowley and Bro , Inc , Mobile, Alabama, its officers, agents, successors, and assigns, shall 1 Cease and desist from (a) Refusing to bargain with Industrial Union of Manne & Shipbuilding Workers of America, Local 18, regarding the effects of its decision to cease op- erations, by failing to timely notify the Union of that decision (b) Refusing to bargain with Industrial Union of Marine & Shipbuilding Workers of America, Local 18, by unilaterally discontinuing contractually re- quired medical insurance benefits (c) In any like or related manner interfering with, restraining, or coercing employees in the ex- ercise of rights guaranteed them by Section 7 of the Act 2 Take the following affirmative action neces- sary to effectuate the policies of the Act (a) On request, bargain collectively with Indus- tnal Union of Marine & Shipbuilding Workers of 772 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD America, Local 18, with respect to the effects on unit employees of the decision to cease operations, and reduce to writing any agreement reached as a result of such bargaining (b) Pay the employees terminated on or about January 16, 1987, their normal wages for the period set forth in the remedy section of this deci- sion (c) Make whole unit employees for any losses re suiting from the failure to make contractually re quired medical insurance payments, in the manner set forth in the remedy section of this decision (d) Preserve and, on request, make available to the Board or its agents for examination and copy- ing, all payroll records, social secunty 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) Mail a copy of the attached notice to employ ees marked "Appendix"8 to Industnal Union of Marine & Shipbuilding Workers of Amenca, Local 18, and to all unit employees who were on the pay- roll on January 16, 1987 Copies of the notice, on forms provided by the Regional Director for Region 15, after being signed by the Respondent's authorized representative, shall be mailed by the Respondent immediately on receipt as directed (f) Notify the Regional Director in wntmg within 20 days from the date of this Order what steps the Respondent has taken to comply 8 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 Nation al 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 APPENDIX NOTICE TO EMPLOYEES MAILED 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 mail and abide by this notice WE WILL NOT refuse to bargain with Industnal Union of Marine & Shipbuilding Workers of Amer- ica, Local 18, regarding the effects of our decision to cease operations, by failing to timely notify the Union of that decision WE WILL NOT refuse to bargain with Industrial Union of Marine & Shipbuilding Workers of Amer ica, Local 18, by unilaterally discontinuing contrac tually required medical insurance benefits WE WILL NOT in any like or related manner interfere with, restrain, or coerce you in the exer- cise of the rights guaranteed you by Section 7 of the Act WE WILL, on request, bargain collectively with Industrial Union of Marine & Shipbuilding Work ers of Amenca, Local 18, with respect to the ef- fects on the unit employees of our decision to cease operations, and reduce to wnting any agreement reached as a result of such bargaining WE WILL pay to employees terminated about January 16, 1987, limited backpay as required by the National Labor Relations Board WE WILL make whole unit employees for any losses resulting from our unilateral discontinuance of contractually required medical insurance benefits in the manner required by the National Labor Re- lations Board JOHN R COWLEY AND BRO , INC Denise D Frederick Esq and Charlotte N White Esq for the General Counsel R David Proctor Esq and Richard H Sforzini Jr Esq of Birmingham Alabama, for the Respondent DECISION STATEMENT OF THE CASE J PARGEN ROBERTSON Administrative Law Judge This matter was heard in Mobile, Alabama on January 19 and July 13, 1989 The complaint issued on January 13 and was amended on September 19 1988 It was based on a charge filed on May 28 and amended on July 6 1987 The complaint as amended, alleges that Respondent violated Sections 8(a)(1) and (5) and 8(d) of the National Labor Relations Act (Act) by ceasing business operations on January 16, 1987 without prior notice and without af fording the Charging Party (Union) an opportunity to negotiate and bargain with respect to the effects of Re spondent s action and by Respondent since on or about December 31 1986 refusing to abide by the terms of its collective bargaining agreement with the Union by um laterally discontinuing medical insurance benefits Respondent admitted the commerce allegations of the complaint Respondent in its answer to amendment to complaint admitted that during the 12 month period ending January 16, 1987, it purchased and received at its Mobile Alabama facility products goods and materials valued in excess of $50 000 directly from points outside the State of Alabama In a stipulation on the record, Re spondent admitted that at material times it was an Ala bama corporation with a facility located in Mobile Ala bama, where it engaged in the processing and sale of scrap metals prior to ceasing operations Respondent in dispute with the complaint allegations alleged that it ceased business operations on January 31 1981 The JOHN R COWLEY & BRO, INC' 773 complaint alleged that Respondent ceased business oper- ations on January 16, 1987 Respondent, in its answer, admitted that the Union is, and has been at material times, a labor organization within the meaning of Section 2(5) of the Act Respond- ent admitted that the Union has been since about 1950 the exclusive collective-bargaining representative of its employees in the following appropriate bargaining unit All production and maintenance employees, exclud- ing all office and clerical employees and all supervi- sory employees as defined in the Act I find that Respondent has been at material times an employer within the meaning of Section 2(2), engaged in commerce within the meaning of Section 2(6) and (7), of the Act On August 31, 1989, Respondent filed a motion to sup- plement the record in which Respondent moved for re- ceipt of Respondent's Exhibits 18, 19, 20, and 21 on showing that the transcript of the hearing failed to show receipt of those exhibits during the hearing My personal notes taken during the hearing show that all those exhib- its were properly identified, offered, and received by me during the hearing Therefore, I grant Respondent's motion Respondent's Exhibits 18, 19, 20, and 21 are re- ceived in evidence All parties were given the opportunity to file briefs The deadline for briefs was finally set for August 31, 1989 Briefs were filed by General Counsel and Respond- ent After the deadline for receipt of briefs, Respondent's attorney wrote me on September 8, 1989 (received in this office on September 11) In that letter Respondent complained that General Counsel's brief misstates evi- dence regarding (1) the date Respondent made its deci- sion to sell its assets and cease business operations and (2) the date Respondent actually ceased operations As shown, I made rulings of fact which agree with Respondent on both the above points I find herein that the record evidence established that Respondent made its decision to sell its assets and cease business operations on January 15, 1987 Additionally, I find, as shown below, that even though Respondent wrote the Union that it was ceasing oper- ations on January 16, the record showed that Respond- ent continued operations after January 16 From January 16 to January 20 Respondent performed work with su- pervisory personnel From January 20, after the Union phoned Respondent, Respondent employed six bargain- ing unit employees until operations finally ceased on Jan- uary 31, 1987 ' Therefore, as to the two points raised in the body of Respondent's September 8, 1989 letter, I agree with Re- spondent At the conclusion of its September 8 letter, Respond- ent raised a question under the Equal Access to Justice Act That question is premature, and, for that reason, is rejected and not considered On the entire record, including my observation of the demeanor of the witnesses, and after considering briefs filed by the parties, I make the following determinations The Facts Of initial importance is the manner in which Respond- ent notified the Union that it was going out of business On January 16, 1987, Respondent wrote the Union The Union received the letter on January 20, 1987 This letter is to notify you that all employees of John R Coley & Bro , Inc were terminated and the Company ceased the operation of its business effec- tive January 16, 1987 The labor agreement by and between John R Coley & Bro , Inc and the Indus- trial Union of Marine and Shipbuilding Workers of America, and its Local No 18 AFL-CIO dated August 23, 1985 is therefore terminated The Company is willing to negotiate with the union over the effect of such decision Please contact us if you wish to discuss this matter further Thank you Respondent's chairman, William F Cowley, testified that after January 16, Respondent tried to reduce its in- ventory before operations were completely stopped In order to perform that work, Respondent used superviso- ry personnel However, upon receipt of the above letter the Union called Respondent and complained After the Union's complaint, Respondent recalled six employees and used them to reduce inventory until work finally ceased on January 31, 1987 Ron Chapa, president of Local 18 during material times, testified that the Union was never told by Re- spondent that the date when operations ceased was any time other that January 1 6 Chaps testified that the em- ployees terminated when Respondent ceased operations, did not receive benefits, including vacation and sever- ance pay, and extended health or life insurance benefits, as a result of their termination On January 26, 1987, the Union filed charges with the National Labor Relations Board (Case 15-CA-10205), al- leging Respondent violated Section 8(a)(1), (3), and (5) of the Act The charge alleged The company unilaterally terminated the collec- tive bargaining agreement, whose term extends until August, 1988, effective on January 16, 1987 It also terminated all union employees on that date The basis for its action is that it is allegedly going out of business However, the company is continuing to perform bargaining unit work, using non-union em- ployees On January 28, 1987, the Union wrote Respondent The Union received your letter dated January 16, 1987 statmg that all of your employees are terminat- ed and the Company has ceased its operations and the Labor Agreement by and - between John R Cowley and Bros, Inc and The Industrial Union of Marine and Shipbuilding Workers of America, and its Local No 18, AFL-CIO date August 23, 1985 is therefore terminated 774 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD Please be advised that the current Labor Agree- ment is still in effect until August 23, 1988 Please contact us if there are any questions in regard to this matter On February 3, 1987, the Union again wrote Respond- ent In connection with the sale of your business, I am sure you recognize your obligation to furnish the union with documentary material needed by the union to access the impact of the sale Supreme Court Decision NLRB v Acme Industrial Co, 385 U S 432 (1967) Accordingly, would you please fur- nish the union with copies of all documents which reflect the entire agreement between you and the buyer These documents should include at the very least the agreement, contract and any other letters of agreement of understanding addenda, codicils Someone from the union will pick up the docu- ments at noon on February 4, 1987 Thank you for having it ready at that time In another February 3 letter, the Union wrote Re- spondent This letter will confirm our telephone conversa- tion on Sunday evening February 1, 1987 in regard to who bought the Company I informed you that the printer had left out the successors and assigns clause in the contract book, and also advised you had already advised the buyer of the successors and assigns clause that was in the contract On February 5, an attorney of Respondent wrote the Union This letter is to clarify a point in the January 16, 1987 letter from John R Cowley & Bro , Inc to your Local concerning the termination of its busi- ness operations The company recognizes that should there be any bargaining unit work performed by John R Cowley & Bro , Inc prior to August 23, 1988 that is covered by the collective bargaining agreement between the parties dated August 23, 1985, said agreement would be applicable As previously stated in the company's January 16, 1987 letter, it is willing to negotiate with the union over the effects of its decision to cease busi- ness operations Please let me know if there are any questions concerning the above Timely Notice Respondent allegedly violated Sections 8(a)(1) and (5) and 8(d) of the Act when it ceased operations without giving the Union prior notice and without affording the Union a meaningful opportunity to negotiate and bar- gain General Counsel's position, as stated on the record, is that the complaint "alleges that adequate notice was not given the union, prior to the cessation of operations, in order to give the union a meaningful opportunity to bar- gain " Counsel for General Counsel contended that on January 20, 1987, the Union received notice that Re- spondent was closing down its operations, but that Re- spondent was obligated to have notified the Union on January 15, or earlier Additionally, General Counsel contended that Respondent engaged in violative conduct by failing to notify the Union that some employees con- tinued to work beyond January 16, 1987 Although Respondent wrote the Union on January 16, the Union did not receive that letter until January 20, 1987 As shown above, the letter indicated that Respond- ent closed its operations and terminated all employees on January 16 However, record evidence showed that after January 16 Respondent worked to reduce its inventory with supervisory personnel until the Union phoned on January 20, and from that date Respondent employed six unit employees to work to reduce its inventory until Re- spondent's operation finally ceased on January 31, 1987 Findings Section 8(a)(5) provides that it shall be an unfair labor practice for an employer "to refuse to bargain collective- ly with the representatives of his employees Among other things, Section 8(d) defines the obliga- tion to bargain collectively The record shows no basis for a finding that Respond- ent violated the law by failing to bargain regarding its decision to close its business In Otis Elevator Co, 269 NLRB 891 (1984), the Board found that management de- cisions which affect the basic direction or nature of the business are excluded from the mandatory bargaining ob- ligation of Section 8(d) Only when those decisions turn upon labor costs is there a mandatory bargaining obliga- tion First National Maintenance Corp v NLRB, 452 U S 666 (1981), Hawthorn Mellody, Inc , 275 NLRB 339, 340 (1985), Kroger Co, 273 NLRB 462 (1984) Here, there is no evidence that Respondent's decision to cease business operations and sell its assets, turned on labor costs In fact the record jshovys, that the contrary is true Respondent's decision turned on iis- fillure tj 'ken er - ate business WXON-TV, 289 NLRB 615 (1988) Additionally, the record does not support a finding that Respondent refused to bargain over the effects of its decision to close As shown below, the Union did not formally request bargaining over the effects of the decision to close Local President Chapa testified that when he hand deliv- ered the Union's February 3 letter to Alfred Cowley he asked Cowley "when could we sit down and reach some kind of settlement" According to Chapa, Cowley re- sponded that it was all in the attorney's hands It is unclear from the above that the Union was asking Cowley to bargain over the effects Nevertheless, it is clear that Cowley did not refuse to bargain by Alfred Cowley's response that it was all in the attorney's hands As shown above, at that time there was a pending unfair labor practice charge filed by the Union Chapa's ques- tion to Cowley did not illustrate whether he was talking about a contract or the pending charge In view of the pending charge of refusing to bargain, Cowley's response was not improper The Union, by failing to go further JOHN R COWLEY & BRO , INC 775 and clarify Chapa's comments to request negotiations, failed to request negotiations over the effects See ABS Industries, 281 NLRB 1088 (1986), cf Barney's Club, 288 NLRB 803 (1988), where the Board found that the em- ployer failed to give any notice to the union that it was willing to bargain over effects Respondent did attempt to terminate the collective bargaining agreement in its January 16 letter Subse- quently, on January 28 the Union wrote Respondent that it could not terminate the contract On February 5, an attorney for Respondent agreed that Respondent would continue to honor the contract until it expired on August 23, 1988 As shown above, the General Counsel contends that Respondent's notice was untimely The record evidence shows through the testimony of William F Cowley that Respondent made the decision to sell its assets and close its operations on January 15, 1987 On January 16, Respondent wrote the Union of 'its decision Respondent also advised the Union, in its Janu- ary 16 letter The Company is willing to negotiate with the Union over the effect of such decision The Union received Respondent's letter on January 20, 1987 Subsequently, the Union filed charges with the NLRB, Case 15-CA-10205, contending Respondent had unilater- ally terminated the collective-bargaining agreement and terminated its employees On January 28 the Union wrote Respondent advising that the collective-bargaining agreement "is still in effect" On February 3, the Union wrote Respondent twice In one letter, the Union asked for documents regarding the sale of Respondent's assets In the other letter the Union discussed its concern, and Respondent's agreement to remedy the omission of the successor and assigns clause froin the printed copy of their collective-bargaining agreement None' of the _Union's letters includes a request to bar- gain over the effects of Respondent's January 15 decision to cease operations On February 5, Respondent's attorney wrote the Union Among other things, the letter contains the fol- lowing statement As previously stated in the company's January 16, 1987 letter, it is willing to negotiate with the union over the effects of its decision to cease busi- ness operations The above events raise questions regarding the allega- tion of untimeliness In the first instance one must ques- tion whether Respondent had an obligation to notify the Union at a time before it made its decision to cease oper- ations (see Chippewa Motor Freight, 261 NLRB 455 (1982), cited by Respondent, where the administrative law judge found that the employer was not required to notify the union before making the decision to close) Secondly, did Respondent have an obligation to ensure that the Union received notification prior to January 20 when it finally received Respondent's letter of January 16 See Signal Communications, 284 NLRB 423, 426 fn 11 (1987) In general, when an employer decides to take action which significantly impacts upon employees' terms or conditions or tenure of employment, the employer must afford the union an opportunity to bargain in advance of the actual implementation of the employer's decision See NLRB v Katz, 369 U S 736, 747 (1962), Machinists v Northeast Airlines, 473 F 2d 549, 557 (1st Cir 1982), Ladies' Garment Workers v NLRB, 463 F 2d 907, 919 (D C Cir 1972) In cases dealing with an employer's duty to bargain with a union about the effects on employees of the employer's decision to close its business, the Board has found a violation of Sec 8(a)(5) of the Act even though the employer, after the plant has been closed and the employees terminated, invites the union to bargain over the effects of the closure Transmarme Navigation Corp, 170 NLRB 389 (1968), Thompson Transport Co, 184 NLRB 38 (1970), National Terminal Baking Corp, 190 NLRB 465, 466 (1971) As the Board explained in Stone & Thomas, 221 NLRB 573, 576 (1975), "meaningful bargaining over effects can only occur prior to the employer's making and acting upon its decision" See also First National Maintenance Corp v NLRB, 452 US 666, 681-682 , (1981) ("Under Section 8(a)(5), bargaining over the effects of a decision must be conducted in a meaningful manner and at a meaningful time ") In any event, here, after Re- spondent SCI went out of business and terminated the unit employees, even then it did not invite the Union to bargain over the effects of that decision on the terminated unit employees Nor does the record reveal, or Respondent SCI contend, that this is a case in which the need for imperative action made it impossible for SCI to notify the Union about its decision prior to its implementation Rather the record reveals that SCI made its deci- sion to cease doing business in late September 1985, approximately 3 weeks prior to its implementation Here, record evidence shows that Respondent could have notified the Union of its decision on January 15 In- stead of phoning the pnion on January 15, Respondent wrote the Union on January 16, and the letter did not arrive until January 20 Moreover, the record shows it is highly probable that at least six unit employees were harmed by Respondent's delay in reaching the Union William Cowley admitted that when the Union called and complained on January 20 about Respondent's use of supervisors to perform unit work, Cowley recalled six unit employees who worked until January 31 There was no evidence offered to show that if given the opportunity to bargain on January 15, or even on January 16, the Union would not have had the same suc- cess it experienced on January 20 In other words, if the Union had bargained on January 16 it may have persuad- ed Respondent to employ bargaining unit employees to 776 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD reduce the inventory for the entire remaining period of operations, i e, from January 16-31, 1987 Instead, Respondent operated from January 16-20 with supervisory personnel No bargaining unit employ- ees were used during that period of time Respondent has a duty to notify the Union in a timely fashion in order to give the Union an opportunity to bar- gain about effects Emsing's Supermarket, 284 NLRB 302 (1987), cf Chippewa Motor Freight, supra, which was cited by Respondent in its brief, where Administrative Law Judge Almira Stevenson found that an employer is not required to give notice of closing before making the decision to close Granted the evidence here does not support a finding as in Kirkwood Fabricators, 285 NLRB 33 (1987), that the employer deliberately withheld information from the union Nevertheless, the Respondent, by failing to take steps to inform the Union at the earliest possible moment, deprived the Union of an opportunity to bar- gain over effects The Union did, to a degree, engage in successful ef- fects bargaining on January 20 when Chapa persuaded Respondent to use unit employees rather than supervi- sors, to complete the remaining unit work Cf Inland Steel Container Co, 275 NLRB 929 (1985), where, in a concurring opinion Board Member Dennis contends that a union may waive its right to bargain if it fails to act with due diligence in requesting bargaining In the in- stant case the Union acted promptly after receiving notice In view of the above, I find that Respondent failed to give timely notice Respondent was obligated to notify the Union of its decision to cease business in order to afford the Union an opportunity to engage in effects bar- gaining Respondent, by mailing the notice, ran the risk of the notice being delayed Here, the Union, and the employees, were harmed by that delay General Counsel contended that Respondent engaged in violative conduct by fading to inform the Union that it continued to perform work necessary to close down its operations until January 31—rather than on January 16 as shown in Respondent's January 16 letter The record does not support General Counsel in that regard As mentioned above, the Union, through Ron Chaps, phoned Respondent on January 20 and com- plained about Respondent's use of nonunit employees Respondent was using supervisory personnel Because of the Union's January 20 complaint, Respondent changed its operations by recalling six unit employees to perform the remaining unit work It appears from the above that the Union did have notice that Respondent was operat- ing, albeit with nonumt employees, after January 16 Be- cause of the Union's action, Respondent continued its op- erations after January 20 with unit employees In view of the above, I do not find support in the record for General Counsel's contention that the Union did not have notice that operations continued after Janu- ary 16 Despite the absence of evidence showing specific notice from Respondent, the record illustrated that the Union was aware that Respondent continued a limited operation after January 16 In that regard, see Hawthorn Mellody, Inc , 275 NLRB 339, 341 (1985) 'While the Respondent may not have given formal notice to Local 336, it is clear from the record that Local 336 had substantial information from which it must inevitably have been aware of the Respondent's intentions I find that the record shows that the Union did have knowledge of Respondent's continued operation after January 20, 1987 Unilateral Change In its answer and in stipulations, Respondent admitted allegations that it unilaterally discontinued medical insur- ance benefits provisions of its collective-bargaining agreement with the Union, since on or about December 31, 1986 Findings Respondent pointed out on the record that since July 1987 it has offered to the Regional Office of the NLRB that it would pay all substantiated and verified claims for medical benefits (which would have been paid under the medical benefits provisions of the collective-bargaining contract) In view of Respondent's admissions, I find that Re- spondent unilaterally discontinued medical insurance pro- visions of its outstanding collective-bargaining contract around December 31, 1986 That conduct violates Sec- tions 8(a)(1) and (5) and 8(d) of the Act Kal Kan Foods, 288 NLRB 590 (1988), cf Petroleum Maintenance Co, 290 NLRB 462 (1988), and Geo C Christopher & Son, 290 NLRB 472 (1988), where the Board found unilateral changes constituted a violation even though the contract had expired, and NLRB v McAllister Bros, 819 F 2d 439 (4th Cir 1987), where the court upheld a finding that an alter ego employer violated the Act by making unilateral changes CONCLUSIONS OF LAW , 1 John R Coley and Bro , Inc is an employer en- gaged in commerce within the meaning of Section 2(6) and (7) of the Act 2 Industrial Union of Marine & Shipbuilding workers of America, Local 18 is a labor organization within the meaning of Section 2(5) of the Act 3 The Union has been at times material herein, the ex- clusive representative for the purposes of collective bar- gaining of the following employees All production and maintenance employees, exclud- ing all office and clerical employees and all supervi- sory employees as defined in the Act 4 Respondent, by failing to timely notify the Union of its decision to cease operations and by unilaterally dis- continuing provisions of a current collective-bargaining contract by canceling medical insurance benefits, has vio- lated Sections 8(a)(5) and (1) and 8(d) of the Act JOHN R COWLEY & BRO , INC 777 5 The aforesaid unfair labor practices are unfair labor practices affecting commerce within the meaning of Sec- tion 2(6) and (7) of the Act THE REMEDY Having found that Respondent has engaged in unfair labor practices, I shall recommend that it be ordered to cease and desist therefrom and to take certain affirmative action designed to effectuate the policies of the Act As I have found that Respondent unlawfully discontinued provisions of its collective-bargaining agreement with the Union by canceling its medical insurance benefits, and that Respondent unlawfully delayed notice of its decision to cease operations from January 15 to 20, 1987, and that Respondent's unlawful action may have resulted in unit employees being deprived of medical insurance benefits, and being depnved of the opportunity to perform bar- gaining unit work until January 20, 1987, I shall recom- mend that Respondent be ordered to make whole em- ployees injured by its unlawful conduct, including paying those unit employees deprived of medical benefits which would have been paid under the canceled medical insur- ance benefits, and paying those unit employees deprived of employment from January 15 until the Union received notice that Respondent was ceasing operations, on Janu- ary 20, 1987 Transmarine Navigation Corp, 152 NLRB 998 (1965), and 170 NLRB 389 (1968) Backpay shall be computed in the manner descnbed in F W Woolworth Co, 90 NLRB 289 (1950), with interest, as computed in New Horizons for the Retarded, 283 NLRB 1173 (1987) 1 [Recommended Order omitted from publication ] ' Under New Horizons, Interest is computed at the "short-term Federal rate" for the underpayment of taxes as set out in the 1986 amendment to 26 U S C § 6621 Copy with citationCopy as parenthetical citation