Schnell Tool & Die Corp.

National Labor Relations Board - Board Decisions

Jan 30, 1967

162 N.L.R.B. 1313 (N.L.R.B. 1967)

SCHNELL TOOL & DIE CORPORATION 1313
This notice must remain posted for 60 consecutive days from the date of post-
ing, and must not be altered , defaced , or covered by any other material.
if employees have any question concerning this notice or compliance with its,
provisions , they may communicate directly with the Board 's Regional Office, 720
Bulkley Building, 1501 Euclid Avenue, Cleveland, Ohio 44115, Telephone Main
1-4465.
Schnell Tool & Die Corporation and United Steelworkers of
America, AFL-CIO. Case 8-CA-3757. January 30, 1967
DECISION AND ORDER
STATEMENT OF THE CASE
Upon a charge filed January 27, 1965, by United Steelworkers of
America, herein called Steelworkers, against Schnell Tool & Die
Corporation, herein called Schnell or the Respondent, the General
Counsel issued a complaint dated April 23, 1965, alleging the
Respondent had violated Section 8(a) (1) and (5) of the National
Labor Relations Act, as amended. Copies of the complaint and charge
were duly served on all the parties. The answer of Respondent admit-
ted that it was an Ohio corporation but denied all the other allega-
tions of the complaint.
This proceeding, with all parties represented, was heard before
Trial Examiner John F. Funke at Salem, Ohio, on June 22, 1965. The
Board i has reviewed the rulings of the Trial Examiner made at the
hearing and finds that no prejudicial error was committed. The
rulings are hereby affirmed. At the conclusion of the hearing the
parties were given leave to file briefs with the Trial Examiner and
the General Counsel and Respondent thereafter did so.
On August 13, 1965, the Trial Examiner issued his Decision in the
above-entitled proceeding, finding that the Respondent had engaged
in and was engaging in the alleged unfair labor practices within the
meaning of the Act and recommending that it cease and desist there-
from and take certain affirmative action. Thereafter, the Respondent
filed exceptions to the Trial Examiner's Decision and a supporting
brief.
The Board has considered the Trial Examiner's Decision, the
exceptions and the brief, and the entire record in the case. Although
the Board is in substantial agreement with the Trial Examiner's
principal findings, conclusions, and recommendations, it is not satis-
fied with the presentation of the case in the Trial Examiner's Decision
'Pursuant to the provisions of Section 3(b) of the Act , the National Labor Relations
Board has delegated its powers in connection with this case to a three -member panel
[ Members Fanning , Brown, and Zagoria].
162 NLRB No. 123.
264-047-67-vol. 162-84
1314 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
and therefore makes its own findings, conclusions, and order, as
follows :
FINDINGS OF FACT
1. THE BUSINESS OF THE RESPONDENT
The Respondent, an Ohio corporation with its principal place of
business at Salem, Ohio, is engaged in the manufacture and sale of
tools, dies, and fixtures. During the 12-month period commencing
November 1, 1963, and ending October 31, 1964, the Respondent sold
products valued in excess of $50,000 to places outside the State of
Ohio.
Contrary to the contention of the Respondent, we find that it was,
at all times material herein, engaged in commerce within the meaning
of Section 2(6) and (7) of the Act, and it will effectuate the policies
of the Act to assert jurisdiction in this proceeding.
H. THE LABOR ORGANIZATION INVOLVED
United Steelworkers of America, AFL-CIO, is a labor organization
within the meaning of Section 2 (5) of the Act.
III. THE UNFAIR LABOR PRACTICES
A. The facts
1. Background z
On October 16, 1962, the Steelworkers was certified as bargaining
representative of all production and maintenance employees of
Schnell in plants 1 and 2 at Salem, Ohio.3 On the same day the Steel-
workers was certified in an identical unit for the employees of Salem
Stamping & Manufacturing Co., Inc. Sometime late in 1962, Schnell
leased 4 plant 2 to Quaker Manufacturing Company.' In Schnell Tool
cc Die Corporation et al.,s Schnell and Salem were found to be a
single employer within the meaning of the Act, and were held, inter
alia, to have violated Section 8 (a) (5) of the Act by failing to give
notice to the Union of the lease, failing to bargain with the Union
2 As requested by the General Counsel , we take official notice of certain prior Board
proceedings affecting the same parties.
3 Case 8-RC-4897 ( not published in NLRB volumes). The tally of ballots in that case
showed that in the combined plants, 28 votes were cast for and 22 against the Steelworkers,
with 3 challenged ballots which were not determinative.
4 Helm testified , during the instant hearing , that Quaker Manufacturing took over on
December 1, 1962.
5 Quaker Manufacturing was wholly owned by Henry Ickes, Boyd Helm, and their wives.
Ickes had been in the employ of Schnell until Quaker Manufacturing was incorporated and
took over plant 2
6 144 NLRB 385, enfd. in relevant part and remanded on the question of remedy, 359
F.2d 39 (C A. 6), April 7, 1966.
SCHNELL TOOL & DIE CORPORATION 1315
with respect to the effect of the shutdown on the employees of the
plant, unilaterally instituting a change in the method of paying for
overtime while bargaining with the Union was in progress , and fail-
ing to bargain with the Union in good faith.
Thereafter , plant 1 and Salem continued to operate , until plant 1
was leased , as more fully set forth below.
2. The evidence
On November 1, 1964, Schnell leased its premises known as plant 1
and the equipment to Quaker Tool & Die Inc., a corporation also
owned by Henry Ickes and Boyd Helm and their wives, the owners
of Quaker Manufacturing Co. Charles Schnell admitted that he did
not know that any notice of this decision to lease plant 1 had been
given to the Steelworkers . The lease is an 11 page recorded document
which provides for the transfer of the business from Schnell to
Quaker Tool . The "Intent of Parties " clause states that it is a 10-year
lease of the premises and machinery with an option to purchase the
same :
provided that, when the condemnation proceedings against Les-
sor by the State of Ohio in connection with the so -called "over-
pass improvement " are terminated , said premises are left in such
condition and with such access to public streets and ways as to
leave them suitable for Lessee 's operations . However, in view of
the present state of said proceedings , which leave uncertain the
question of access and the question whether parts of the principal
manufacturing buildings may not have to be torn down, it is
impossible at this time to fix an equitable long term rental or a
reasonable purchase price to be used in a purchase option.
The lease also contains the following clause :
III. COMPETITION CLAUSE
While Schnell Tool & Die Corporation may temporarily dis-
continue the manufacture of tools, dies , and related products for
lack for the time being [sic] of suitable manufacturing facilities,
it is hereby expressly understood and agreed that Schnell Tool
& Die Corporation is free to resume said activities at any time,
and it is further expressly understood and agreed that each of
the parties hereto is free to compete with the other in any and
all respects , including the solicitation by each of the other's
customers.
'Charles Hinchliffe , staff representative of the Steelworkers , subdistrict 5, testified, and
the Trial Examiner fully credited him, that he received no notice of the proposed leasing
and first learned of it in the issue of the Salem News dated November 6, 1964.
1316 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
3. Conclusions
We find on the record as a whole that the leasing to Quaker Tool
was a bona fide transaction, as the elder Schnell, Michael, was not in
a physical condition to continue the active operation of the business.8
We further find that the transfer of plant 1 herein was a part of the
orderly and intended liquidation of Michael Schnell's business, which
culminated in the subsequent lease of Salem Stamping.' Nevertheless,
whatever the reasons for the liquidation, we find under the facts
herein that this case does not come within the doctrine of Textile
porkers v. Darlington Manufacturing Co., 380 U.S. 263, reversing
the decision of the Board in Darlington Manufacturing Company,
et al., 139 NLRB 241.
We are here faced with the question of whether a decision to go
partially out of business is a mandatory subject of bargaining. Con-
sequently, we need not, and do not determine the impact on that
question of the Supreme Court's holding in the Darlington case ".. .
that when an employer closes his entire business, even if the liquida-
tion is motivated by vindictiveness towards the Union, such action is
not an unfair labor practice." For the reasons set forth in Ozark
Trailers, Incorporated, et al.,10 and in Royal Plating and Polishing
Co., Inc.," we find that the Respondent was required to give notice
to and discuss the matter with the Union. As stated in Royal Plating :
We perceive nothing in that portion of the Darlington decision
dealing with the discriminatory partial closing of a business
which warrants withholding application of the Act's collective-
bargaining provisions to Respondent's decision to close down the
Bleeker Street plant. The Supreme Court clearly indicated that
managerial decisions to close a part of an integrated business are
subject to the Act's provisions prohibiting discrimination with
respect to hire and tenure of employment when such discrimina-
tion is practiced for the purpose of encouraging or discouraging
union membership. In short, under Darlington, Respondent's
8 In Schnell Tool & Die, supra , at 389, the Trial Examiner made findings concerning
Mr Michael Schnell' s physical condition at that time.
8 Although not germane to this proceeding , the record indicates that Salem Stamping &
Manufacturing Co , Inc , leased its facilities to Clark Pulley subsequent to the lease made
herein of Schnell ' s premises to Quaker Tool. This was the last segment of the Schnell
enterprises to be divorced from Schnell control However, Charles Schnell, son of Michael
Schnell, is vice president of Schnell and manager of Clark Pulley Corporation, Salem
Division. This leasing was also the subject of a complaint which has since been dismissed
by Board Order of May 2, 1966, granting the General Counsel' s motion alleging violation
of Section 8(a) (5) by the lessor , Salem Stamping & Manufacturing Company, a Division
of Clark Pulley Corporation , Case 8-CA-3865
10161 NLRB 561
n152 NLRB 619; enforcement denied 350 F 2d 191 (CA. 3) The Board respectfully
disagrees with the court , until such time as the matter has been determined by the II S.
Supreme Court. See Ozark Trailers, supra, at 8, et seq.
SCHNELL TOOL & DIE CORPORATION 1317
decision to close down the Bleeker Street plant, one of the two
plants comprising a single appropriate bargaining unit, would
be a proper subject of scrutiny under the provisions of Section
8(a) (3) under the Supreme Court's ruling in the Darlington
case. In these circumstances, we perceive no reasonable basis on
which it can be said that the Court's decision requires a holding
that a partial closing is not a subject for scrutiny under Section
8(a) (5).
The fact that Respondent sold and closed down the Bleeker
Street plant because of economic considerations provides no basis
for exempting that decision from the mediatory influence of the
Act's collective-bargaining provisions, although it, of course, does
explain why no 8 (a) (3) violation was alleged. Plainly, Respond-
ent's decision to close down the Bleeker Street plant, and the
Union's efforts to bargain concerning that decision and its impact
on employees related to employees' terms and conditions of
employment. The Order of Railroad Telegraphers, et al. v. Chi-
cago and Northwestern R. Co., 362 U.S. 330; Fibreboard Paper
Products Corp. v. N.L.R.B., 379 U.S. 203. The fact that the deci-
sion was based on economic considerations made it particularly
amenable to the procedures of collective bargaining. For under
such procedures, the Respondent would not have surrendered its
managerial right to run its business and to take those steps which
its business judgment satisfied it were necessary. All that was
required here was that Respondent bargain in good faith about
the termination of the Bleeker Street plant with its employees'
bargaining representative to give its employees an opportunity
to persuade it to achieve similar economies through negotiations
of an acceptable alternative. The Act requires that an employer
give the employees' bargaining representative notice and oppor-
tunity to confer about and discuss the,closing down of a plant
not for the purpose of securing the employees' agreement before
he may proceed, but to give his employees an opportunity to
induce him to follow a different course of action which may safe-
guard both his and their rights and interests.
The lease of plant 1 in the instant case contemplates the contin-
gency of a revival of Schnell's business at that plant 1 or elsewhere.
Article III of the lease, referred to supra, clearly provides for such
a possibility. Under these circumstances, we find it appropriate, as
requested by the General Counsel, to issue an order preventing the
continuance of unfair labor practices on the part of Respondent
should such a contingency occur.
1318 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
It is further found that the appropriate unit for the purposes of
this proceeding is:
All production and maintenance employees of Schnell Tool &
Die Corporation, including truckdrivers, but excluding office
clerical employees, office cleaning women, guards, professional
employees, and supervisors as defined in the Act.
It is true that only plant 1 is involved in this proceeding and that
the Steelworkers was certified for both plants 1 and 2. However, the
unit found herein to be appropriate is, in general, identical to that
which was certified, in that it includes all production and maintenance
employees of the Respondent. Further, to hold that the outstanding
Board certification covered only the two-plant unit would permit the
Respondent successfully to defeat that certification and to escape its
obligations under the Act. The separation or division of the unit was
accomplished by the unlawful action of Respondent as found in the
prior case, and it should not be allowed to evade the Act and nullify
its purposes in this fashion.
In the event that Respondent should renew its tool-and-die busi-
ness at Salem, it may be necessary for the Board to reconsider its
Order herein to determine whether the presumption of a continuing
majority Would then be reasonable or whether it would be open to
the assertion of a good-faith doubt.12 The conditions under which
Respondent might reopen are not presently foreseeable but that does
not make the Order unreasonable. Certainly it is more in keeping
with the policies of the Act than a full release of Respondent from
its statutory obligation.
IV. THE REMEDY
Having found that Respondent has engaged in unfair labor prac-
tices within the meaning of the Act, we shall order that it cease and
desist therefrom and take certain affirmative action designed to effec-
tuate the purposes of. the Act.
Upon the foregoing findings of fact and upon the entire record in
this case, the Board makes the following :
CONCLUSIONS OF LAW
1. The Respondent is engaged in commerce within the meaning of
the Act.
2. The Steelworkers is a labor organization within the meaning of
the Act.
3. Respondent has engaged in unfair labor practices within the
meaning of Section 8 (a) (5) and (1) of the Act.
4. The aforesaid unfair labor practices affect commerce within the
meaning of Section 2(6) and (7) of the Act.
19 Celanese Corporation of America, 95 NLRB 664.
SCHNELL TOOL & DIE CORPORATION 1319
ORDER
Pursuant to Section 10(c) of the National Labor Relations Art,
as amended, the National Labor Relations Board hereby orders that,
Respondent, Schnell Tool & Die Corporation, its officers, agents, suc-
cessors, and assigns, shall take the following action necessary to
effectuate the policies of the Act :
(a) If and when the Respondent resumes any of its former opera-
tions, bargain collectively, upon request, with the United Steelworkers
of America, AFL-CIO, as the exclusive representative of all employ-
ees in the unit described below, and embody any understanding
reached in a signed agreement. The appropriate bargaining unit is:
All production and maintenance employees of Schnell Tool & Die
Corporation, including truckdrivers, but excluding office clerical
employees, office cleaning women, guards, professional employees, and
supervisors as defined in the Act.
(b) Inasmuch as the posting of a notice as customarily required is
not feasible, the Respondent shall cause to have published in the
Salem News, on three consecutive dates, an exact copy of the notice
appearing below. The notice which appears in the above-named news-
paper shall be signed by the principal officer of the Respondent.
NOTICE TO ALL FORMER EMPLOYEES
Pursuant to an Order of the National Labor Relations Board,
and in order to effectuate the policies of the National Labor Rela-
tions Act, we hereby notify our former employees that:
WE WILL, if and when we resume operations, bargain upon
request with the United Steelworkers of America, AFL-
CIO, as the exclusive representative of all employees in the
unit described below with respect to rates of pay, wages,
hours of employment, or other terms and conditions of
employment, and if an understanding is reached embody
such understanding in a signed agreement. The bargaining
unit is: All production and maintenance employees of
Schnell Tool & Die Corporation, including truckdrivers, but
excluding office clerical employees, office cleaning women,
guards, professional employees, and supervisors as defined
in the Act.
SCHNELL TOOL & DIE CORPORATION,
Employer.
Dated---------------- By-------------------------------------
President
(c) Notify the Regional Director for Region 8, in writing, within
10 days from the date of this Order, what steps have been taken to
comply herewith.