Modern International Graphics, Inc.

National Labor Relations Board - Board Decisions

Sep 15, 2010

355 N.L.R.B. 1110 (N.L.R.B. 2010)

DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
355 NLRB No. 180
1110
Modern International Graphics, Inc. and Graphic
Communications Union Local 546M, GCC/IBT.
Case 8–CA–38782
September 15, 2010
DECISION AND ORDER
BY MEMBERS BECKER, PEARCE, AND HAYES
The Acting General Counsel seeks a default judgment
in this case on the ground that the Respondent has failed
to file an answer to the complaint. Upon a charge filed
by the Union on February 9, 2010, the General Counsel
issued the complaint on May 27, 2010, against Modern
International Graphics, Inc., the Respondent, alleging
that it has violated Section 8(a)(5) and (1) of the Act.
The Respondent failed to file an answer.
On July 23, 2010, the Acting General Counsel filed a
Motion for Default Judgment with the Board. Thereaf-
ter, on July 29, 2010, the Board issued an order transfer-
ring the proceeding to the Board and a Notice to Show
Cause why the motion should not be granted. The Re-
spondent filed no response. The allegations in the mo-
tion are therefore undisputed.
The National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
Ruling on Motion for Default Judgment
Section 102.20 of the Board’s Rules and Regulations
provides that the allegations in a complaint shall be
deemed admitted if an answer is not filed within 14 days
from service of the complaint, unless good cause is
shown. In addition, the complaint affirmatively stated
that unless an answer was received by the Regional Of-
fice by June 10, 2010, the Board may find, pursuant to a
motion for default judgment, that the allegations in the
complaint are true. Further, the undisputed allegations in
the motion disclose that the Region, by letter dated July
6, 2010,1 notified the Respondent that unless an answer
was received by July 16, 2010, a motion for default
judgment would be filed.2

1 The Acting General Counsel notes that although the Respondent
consulted an attorney during the investigation of this matter, the attor-
ney did not enter an appearance. The Acting General Counsel states
that the attorney was nevertheless copied on all relevant correspon-
dence.
2 By email to the Region dated May 25, 2010, the Respondent stated
that the company was closed and dissolved; that any assets had been
distributed to the bank and/or its secured creditors; and that the secured
parties had not obtained full recovery. The Respondent further stated
that it had no financial resources because it had lost everything in the
closure. We find that the Respondent’s cessation of operations and
asserted lack of financial resources does not excuse it from filing an
answer to the complaint. See OK Toilet & Towel Supply, Inc., 339
NLRB 1100, 1100–1101 (2003); Dong-A Daily North America, 332
NLRB 15, 15–16 (2000).
In the absence of good cause being shown for the fail-
ure to file a timely answer, we grant the Acting General
Counsel’s Motion for Default Judgment.
On the entire record, the Board makes the following
FINDINGS OF FACT
I. JURISDICTION
At all material times, the Respondent, an Ohio corpo-
ration with an office and place of business in Eastlake,
Ohio (the Respondent’s facility), has been engaged in the
operation of a printing business. Annually, at all mate-
rial times, the Respondent, in conducting its business
operations described above, sold and shipped from its
Eastlake, Ohio facility goods valued in excess of $50,000
directly to points outside the State of Ohio.
We find that the Respondent is an employer engaged
in commerce within the meaning of Section 2(2), (6), and
(7) of the Act, and that Graphic Communications Union
Local 546M, GCC/IBT, the Union, is a labor organiza-
tion within the meaning of Section 2(5) of the Act.
II. ALLEGED UNFAIR LABOR PRACTICES
At all material times, David Margiotta held the posi-
tion of the Respondent’s president, and has been a super-
visor of the Respondent within the meaning of Section
2(11) of the Act and an agent of the Respondent within
the meaning of Section 2(13) of the Act.
The following employees of the Respondent (the unit)
constitute a unit appropriate for the purposes of collec-
tive bargaining within the meaning of Section 9(b) of the
Act:

All production employees, except typesetters, keylin-
ers, and artist, employed by Respondent at its Eastlake,
Ohio facility who perform the following work: ship-
ping, receiving, delivery, process operation and new
products directly associated with the processing of
lithographic production (including dry or wet), (photo-
engraving, intaglio, gravure), bookbinding, and finish-
ing or otherwise reproducing images of all kinds or any
other purpose, but excluding all office clerical employ-
ees and all professional employees, guards and supervi-
sors as defined in the Act.

At all material times, the Union has been the desig-
nated exclusive collective-bargaining representative of
the unit and has been recognized as the representative by
the Respondent. This recognition has been embodied in
successive collective-bargaining agreements, the most
recent of which is effective from August 1, 2007, to De-
cember 31, 2011.
MODERN INTERNATIONAL GRAPHICS

1111
At all material times, based on Section 9(a) of the Act,
the Union has been the exclusive collective-bargaining
representative of the unit.
About January 29, 2010, the Respondent ceased opera-
tions at the Respondent’s facility.
On about January 29, 2010, the Union requested that
the Respondent meet and bargain with it over the effects
of the closure of the Respondent’s facility.
Since about February 9, 2010, the Respondent has
failed and refused to bargain with the Union over the
effects of the closure of its facility.
Since about January 29, 2010, the Respondent has
failed and refused to: pay accrued vacation pay to em-
ployees in the unit; pay severance pay to employees in
the unit; continue to provide health insurance coverage to
employees in the unit; and accept and process grievances.
The subjects set forth in the preceding paragraph relate
to wages, hours, and other terms and conditions of em-
ployment of the unit and are mandatory subjects for the
purposes of collective bargaining. The Respondent en-
gaged in the conduct described in the preceding para-
graph without prior notice to the Union and/or without
affording the Union an opportunity to bargain with the
Respondent with respect to this conduct and/or the ef-
fects of this conduct and/or without first bargaining with
the Union to an agreement.3
Since about January 29, 2010, the Union orally re-
quested certain information, and again by letters dated
February 8 and 12, 2010, the Union requested that the
Respondent furnish it with the following information: a
copy of the foreclosure notice issued to the Respondent
by PNC Bank; a copy of the bank covenant that the Re-
spondent allegedly breached in its agreement(s) with
PNC; the names of the Respondent’s secured creditors
and the amounts owed to each; the Respondent’s balance
sheet as of the time of closure; the value of the Respon-
dent’s assets at the time of closure; information regarding
the contemplated disposal of the Respondent’s assets
following closure; information relating to contacts be-
tween the Respondent and another entity named AGS
Custom Graphics prior to January 29, 2010; the names of
all employees of the Respondent offered jobs with AGC
Custom Graphics; work outsourced by the Respondent in
the 6 months prior to closure; the amount of accrued va-
cation time for each employee in the unit; and the

3 Although the complaint does not specifically allege that the effects
of the Respondent’s decision to close is a mandatory subject of bargain-
ing, it is well settled that the effect of such a decision on unit employ-
ees is a mandatory bargaining subject. First National Maintenance
Corp. v. NLRB, 452 U.S. 666, 681–682 (1981). Accordingly, we find
that the complaint supports a cause of action as to the failure to bargain
over the effects of the Respondent’s decision to close its facility.
amount of severance pay owed to each employee in the
unit.
The information requested by the Union is necessary
for, and relevant to, the Union’s performance of its duties
as the exclusive collective-bargaining representative of
the unit.
Since about February 12, 2010, the Respondent has
failed and refused to furnish the Union with the re-
quested information.
CONCLUSION OF LAW
By the conduct described above, the Respondent has
been failing and refusing to bargain collectively and in
good faith with the exclusive collective-bargaining repre-
sentative of its employees within the meaning of Section
8(d) of the Act, and has thereby engaged in unfair labor
practices affecting commerce within the meaning of Sec-
tion 8(a)(5) and (1) and Section 2(6) and (7) of the Act.4
REMEDY
Having found that the Respondent has engaged in cer-
tain unfair labor practices, we shall order it to cease and
desist and to take certain affirmative action designed to
effectuate the policies of the Act. Specifically, to remedy
the Respondent’s unlawful failure to bargain with the
Union about the effects of its decision to close its East-
lake, Ohio facility, we shall order the Respondent to bar-
gain with the Union, on request, about the effects of its
decision. As a result of the Respondent’s unlawful con-
duct, however, the unit employees have been denied an
opportunity to bargain through their collective-
bargaining representative at a time when the Respondent
might still have been in need of their services and a
measure of balanced bargaining power existed. Mean-
ingful bargaining cannot be assured until some measure
of economic strength is restored to the Union. A bar-
gaining order alone, therefore, cannot serve as an ade-
quate remedy for the unfair labor practices committed.
Accordingly, we deem it necessary, in order to ensure
that meaningful bargaining occurs and to effectuate the
policies of the Act, to accompany our bargaining order
with a limited backpay requirement designed to make
whole the unit employees for losses suffered as a result
of the violations and to recreate in some practicable
manner a situation in which the parties’ bargaining posi-
tion is not entirely devoid of economic consequences for
the Respondent. We shall do so by ordering the Respon-
dent to pay backpay to the employees in the unit in a
manner similar to that required in Transmarine Naviga-

4 We find it unnecessary to pass on the complaint’s additional allega-
tion that the Respondent’s unlawful conduct independently violated
Sec. 8(a)(1), because such a finding would not affect the remedy in this
proceeding.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD

1112
tion Corp., 170 NLRB 389 (1968), as clarified by Mel-
ody Toyota, 325 NLRB 846 (1998).5
Thus, the Respondent shall pay its unit employees
backpay at the rate of their normal wages when last in the
Respondent’s employ from 5 days after the date of this
Decision and Order until the occurrence of the earliest of
the following conditions: (1) the date the Respondent
bargains to agreement with the Union on those subjects
pertaining to the effects of its decision to cease operating
its Eastlake, Ohio facility on the unit employees; (2) a
bona fide impasse in bargaining; (3) the Union’s failure
to request bargaining within 5 business days after receipt
of this Decision and Order, or to commence negotiations
within 5 business days after receipt of the Respondent’s
notice of its desire to bargain with the Union; or (4) the
Union’s subsequent failure to bargain in good faith.
In no event shall the sum paid to these employees ex-
ceed the amount they would have earned as wages from
the date on which the Respondent ceased its operations
to the time they secured equivalent employment else-
where, or the date on which the Respondent shall have
offered to bargain in good faith, whichever occurs
sooner. However, in no event shall this sum be less than
the employees would have earned for a 2-week period at
the rate of their normal wages when last in the Respon-
dent’s employ. Backpay shall be based on earnings
which the unit employees would normally have received
during the applicable period, less any net interim earn-
ings, and shall be computed in accordance with F. W.
Woolworth Co., 90 NLRB 289 (1950), with interest as
prescribed in New Horizons for the Retarded, 283 NLRB
1173 (1987).6
Additionally, having found that the Respondent unlaw-
fully failed and refused to pay accrued vacation pay and
accrued severance pay to employees in the unit, continue
to provide health insurance coverage to employees in the
unit, and accept and process grievances, we shall order
the Respondent to rescind these changes and make the
unit employees whole for any loss of earnings and other
benefits attributable to its unlawful conduct. Backpay

5 See also Live Oak Skilled Care & Manor, 300 NLRB 1040 (1990).
Neither the complaint nor the motion specifies the impact, if any, on the
unit employees of the Respondent’s decision to close. Thus, we do not
know whether, or to what extent, the refusal to bargain about the effects
of this decision had an impact on the unit employees. In these circum-
stances, we shall permit the Respondent to contest the appropriateness
of a Transmarine backpay remedy at the compliance stage. See, e.g.,
Buffalo Weaving & Belting, 340 NLRB 684, 685 fn. 3 (2003); and ACS
Acquisition Corp., 339 NLRB 736, 737 fn. 2 (2003).
6 In the complaint, the Acting General Counsel seeks interest com-
puted on a compounded quarterly basis for any backpay or other mone-
tary awards. Having duly considered the matter, we are not prepared at
this time to deviate from our current practice of assessing simple inter-
est. See Rogers Corp., 344 NLRB 504 (2005).
shall be computed in accordance with Ogle Protection
Service, 183 NLRB 682 (1970), enfd. 444 F.2d 502 (6th
Cir. 1971), with interest as prescribed in New Horizons
for the Retarded, supra. With respect to the Respon-
dent’s unilateral termination of health care coverage, we
shall order the Respondent to restore the unit employees’
health care coverage and reimburse the unit employees
for any expenses ensuing from the Respondent’s failure
to continue health care coverage, as set forth in Kraft
Plumbing & Heating, 252 NLRB 891 fn. 2 (1980), enfd.
mem. 661 F.2d 940 (9th Cir. 1981), such amounts to be
computed in the manner set forth in Ogle Protection Ser-
vice, supra, with interest as prescribed in New Horizons
for the Retarded, supra.
Further, having found that the Respondent violated
Section 8(a)(5) and (1) by failing and refusing to furnish
the Union with information that is necessary for, and
relevant to, the Union’s performance of its duties as the
exclusive collective-bargaining representative of the unit
employees, we shall order the Respondent to furnish the
Union with the information that it requested on about
January 29 and February 8 and 12, 2010.
Finally, in view of the fact that the Respondent’s facil-
ity is closed, we shall order the Respondent to mail a
copy of the attached notice to the Union and to the last
known addresses of its former unit employees in order to
inform them of the outcome of this proceeding.
ORDER
The National Labor Relations Board orders that the
Respondent, Modern International Graphics, Inc., East-
lake, Ohio, its officers, agents, successors, and assigns,
shall
1. Cease and desist from
(a) Failing and refusing to bargain collectively and in
good faith with Graphic Communications Union Local
546M, GCC/IBT as the exclusive collective-bargaining
representative of the employees in the following appro-
priate unit with respect to the effects of its decision to
cease operations at its Eastlake, Ohio facility:

All production employees, except typesetters, keylin-
ers, and artist employed by Respondent at its Eastlake,
Ohio facility who perform the following work: ship-
ping, receiving, delivery, process operation and new
products directly associated with the processing of
lithographic production (including dry or wet), (photo-
engraving, intaglio, gravure), bookbinding, and finish-
ing or otherwise reproducing images of all kinds or any
other purpose, but excluding all office clerical employ-
ees and all professional employees, guards and supervi-
sors as defined in the Act.

MODERN INTERNATIONAL GRAPHICS

1113
(b) Failing and refusing to bargain with the Union by
unilaterally failing to: pay accrued vacation pay to em-
ployees in the unit; pay severance pay to employees in
the unit; continue to provide health insurance coverage to
employees in the unit; and accept and process grievances.
(c) Failing and refusing to furnish the Union with re-
quested information that is necessary for, and relevant to,
the Union’s performance of its duties as the exclusive
collective-bargaining representative of the unit employ-
ees.
(d) In any like or related manner interfering with, re-
straining, 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) On request, bargain collectively and in good faith
with the Union about the effects of its decision to close
its Eastlake, Ohio facility on January 29, 2010, and re-
duce to writing and sign any agreements reached as a
result of such bargaining.
(b) Pay to the unit employees their normal wages for
the period set forth in the remedy section of this decision,
with interest.
(c) Make whole the unit employees for any loss of
earnings and other benefits suffered as a result of the
Respondent’s unlawful failure to pay accrued vacation
pay and accrued severance pay to employees in the unit
and to continue to provide health insurance coverage to
employees in the unit, with interest, in the manner set
forth in the remedy section of this decision.
(d) Restore the unit employees’ health care coverage
and reimburse the unit employees for any expenses ensu-
ing from the Respondent’s unilateral failure to continue
health care coverage since January 29, 2010, with inter-
est, as set forth in the remedy section of this decision.
(e) Furnish the Union with the information it requested
on January 29 and February 8 and 12, 2010.
(f) Preserve and, within 14 days of a request, or such
additional time as the Regional Director may allow for
good cause shown, provide at a reasonable place desig-
nated by the Board or its agents, all payroll records, so-
cial security payment records, timecards, personnel re-
cords and reports, and all other records including an elec-
tronic copy of such records if stored in electronic form,
necessary to analyze the amount of backpay due under
the terms of this Order.
(g) Within 14 days after service by the Region, dupli-
cate and mail, at its own expense, and after being signed
by the Respondent’s authorized representative, copies of
the attached notice marked “Appendix”7 to the Union
and to its former unit employees who were employed by
the Respondent at its Eastlake, Ohio facility on, or at any
time since, January 29, 2010.
(h) Within 21 days after service by the Region, file
with the Regional Director a sworn certification of a re-
sponsible official on a form provided by the Region at-
testing to the steps that the Respondent has taken to
comply.

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 vio-
lated Federal labor law and has ordered us to mail and obey
this notice.

FEDERAL LAW GIVES YOU THE RIGHT TO

Form, join, or assist a union
Choose representatives to bargain with us on
your behalf
Act together with other employees for your
benefit and protection
Choose not to engage in any of these protected
activities.

WE WILL NOT fail and refuse to bargain collectively
and in good faith with Graphic Communications Union
Local 546M, GCC/IBT as the exclusive collective-
bargaining representative of the employees in the follow-
ing appropriate unit with respect to the effects on our unit
employees of our decision to close our Eastlake, Ohio
facility.

All production employees, except typesetters, keylin-
ers, and artist, employed by us at our Eastlake, Ohio fa-
cility who perform the following work: shipping, re-
ceiving, delivery, process operation and new products
directly associated with the processing of lithographic
production (including dry or wet), (photoengraving, in-
taglio, gravure), bookbinding, and finishing or other-
wise reproducing images of all kinds or any other pur-
pose, but excluding all office clerical employees and all
professional employees, guards and supervisors as de-
fined in the Act.

7 If this Order is enforced by a judgment of a United States court of
appeals, the words in the notice reading “Mailed by Order of the Na-
tional Labor Relations Board” shall read “Mailed Pursuant to a Judg-
ment of the United States Court of Appeals Enforcing an Order of the
National Labor Relations Board.”
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD

1114
WE WILL NOT fail and refuse to bargain with the Union
by failing to: pay accrued vacation pay to employees in
the unit; pay severance pay to employees in the unit; con-
tinue to provide health insurance coverage to employees
in the unit; and accept and process grievances.
WE WILL NOT fail and refuse to furnish the Union with
the information it requested on January 29 and February
8 and 12, 2010, which is necessary for and relevant to the
Union’s performance of its duties as the exclusive collec-
tive-bargaining representative of our unit employees.
WE WILL NOT in any like or related manner interfere
with, restrain, or coerce you in the exercise of the rights
guaranteed you by Section 7 of the Act.
WE WILL, on request, bargain collectively and in good
faith with the Union about the effects on the unit em-
ployees of our decision to close our Eastlake, Ohio facil-
ity on January 29, 2010, and reduce to writing and sign
any agreements reached as a result of such bargaining.
WE WILL pay unit employees their normal wages for
the period set forth in the Decision and Order of the Na-
tional Labor Relations Board, with interest.
WE WILL make whole unit employees for any loss of
earnings and other benefits suffered as a result of our
failure to pay them accrued vacation and severance pay,
to provide them health care coverage, and to accept and
process grievances.
WE WILL restore the unit employees’ health care cov-
erage and reimburse the unit employees for any expenses
ensuing from our unilateral failure to continue health
care coverage since January 29, 2010, with interest.
WE WILL furnish the Union with the information it re-
quested on January 29 and February 8 and 12, 2010.
MODERN INTERNATIONAL GRAPHICS, INC.