Ugite Gas, Inc.

National Labor Relations Board - Board Decisions

Feb 5, 1960

126 N.L.R.B. 494 (N.L.R.B. 1960)

494 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Ugite Gas Incorporated and Oil , Chemical and Atomic Workers
International Union, AFL-CIO. Case No. 4-CA-1927. Feb-
ruary 5, 1960
DECISION AND ORDER
On August 25, 1959, Trial Examiner C. W. Whittemore issued his
Intermediate Report in the above-entitled proceeding, finding that the
Respondent had engaged in and was engaging in certain unfair labor
practices and recommending that it cease and desist therefrom and
take certain affirmative action, as set forth in the copy of the Inter-
mediate Report attached hereto. Thereafter, the Respondent filed
exceptions to the Intermediate Report, a supporting brief, and a re-
quest for oral argument.'
Pursuant to the provisions of Section 3(b) of the National Labor
Relations Act, the Board has delegated its powers in connection with
this proceeding to a three-member panel [Members Rodgers, Jenkins,
and Fanning].
The Board 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. The Board has considered the Inter-
mediate Report, the exceptions and briefs, and the entire record in the
case, and hereby adopts the findings, conclusions, and recommenda-
tions of the Trial Examiner, with the following additions and
modifications.
1. We do not adopt the finding of the Trial Examiner that the
sale of the business and assets by McNay Gas Corporation to the
Respondent was not a bona fide arm's-length transaction. All the evi-
dence adduced at the hearing was taken pursuant to stipulations of
the parties. It was established that on March 2, 1959, the Respondent
entered into a written agreement with McNay by which the Respond-
ent agreed to purchase the business and all assets relating thereto with
certain minor exceptions . Settlement of the agreement was made on
April 15, 1959, with the Respondent formally taking over the opera-
tion of the business on April 16, 1959. It was further stipulated that
the sale was a bona fide arm's-length transaction and not designed or
intended to deprive or defeat any person of any rights they might
have under the National Labor Relations Act. The Trial Examiner,
in finding that the sale was not an arm 's-length transaction relies prin-
cipally upon a speech made to the McNay employees by the new
management. Specifically, on March 19, 1959, nearly a month before
the sale became final, E. H. Smoker, president of United Gas Improve-
ment Company, which owns and controls the Respondent, met with the
McNay employees and announced the intent to purchase the business.
'Because in our opinion the record, exceptions, and briefs adequately set forth the
issues and positions of the parties , this request is hereby denied.
126 NLRB No. 64.
UGITE GAS INCORPORATED 495
Smoker also told the employees, "We are going to have to depend on
all of you people to continue running the business substantially as you
have done in the past since you are the contact people with the
customers. They only know the Company through you and I know
you will continue the good work which you have carried on. ..."
We do not find that Smoker's speech nor any other evidence negates
the stipulation of the parties that the sale was a bona fide arm's-
length transaction, or in effect that the sale was not made as a subter-
fuge to circumvent the Union's certification. No such violation is
alleged. However, our disagreement with the Trial Examiner on
this point does not affect our ultimate conclusion in the case.
We agree with the Trial Examiner's finding that Respondent vio-
lated Section 8(a) (1) and (5) of the Act by refusing to bargain with
the certified Union. We note that Respondent was aware that the
Union represented a majority of the McNay employees as early as
March 19, 1959, when the Union, on learning of the Respondent's in-
tention to purchase the business, requested a meeting with it for the
purposes of bargaining. Respondent argues that it should not be
bound by the Union's certification because the terms of the sale agree-
ment provides that Respondent "shall not be liable for any . . . con-
tractual commitments or other liabilities" of McNay, "including lia-
bilities to its employees." There is no merit in this contention,
however, for it is well established that private parties may not by
contract void an obligation imposed by a Federal act.2 The Union was
certified on December 19, 1958. Respondent, when it assumed control
on April 16, 1959, rehired all but two of the former McNay employees,
and this constituted its complete work force. As the employer of
these employees it was independently obligated under the Act to ac-
cord recognition to the majority representative of these employees.
Like the Trial Examiner, we reject the Respondent's contention that,
as a result of private poll it conducted among the employees, it had a
good-faith doubt as to the Union's majority status at such time. It is
well settled that a Board certification must be honored for a reason-
able period of time, normally 1 year in the absence of unusual cir-
cumstances.' A change in ownership is not such an unusual circum-
stance as to affect the force of the certification. Where the enterprise
remains substantially the same, as here, the obligation to bargain of
a prior employer devolves upon his successor in title. A purchaser in
such a situation is a successor employer."
2 See J. I. Case Company v . N.L.R.B., 321 U.S. 332; NatBonal Licorice Company v.
N.L R B., 309 U. S. 350.
8 Ray Brooks v. N.L.R.B., 34'8 U S. 96.
a N.L.R.B. v Albert Armato and Wire & Sheet Metal Specialty Co., 199 F. 2d 1800
(C A 7) ; Royal Brand Cutlery Company, etc ., 122 NLRB 901 ; Auto Ventshade Inc., 123
NLRB 451 ; Investment Buzldang Cafeteria , 120 NLRB '3'8; Cruse Motors Inc.. 105
NLRB 242
496 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
ORDER
Upon the entire record in this case, and pursuant to Section 10 (c)
aof the National Labor Relations Act, as amended, the National Labor
Relations Board hereby orders that the Respondent, Ugite Gas In-
,corporated, Ephrata and Malvern, Pennsylvania, its officers, agents,
successors, and assigns, shall :
1. Cease and desist from :
(a) Refusing to bargain collectively with Oil, Chemical and Atomic
Workers International Union, AFL-CIO, as the exclusive representa-
tive of all its drivers and service and maintenance employees, exclud-
ing office clerical employees, watchmen, guards, and supervisors as
-defined in the Act at its Ward Bottle Gas Division at Ephrata, Penn-
sylvania, formerly known as McNay Gas Corporation d/b/a Ward
Bottle Gas Company.
(b) In any like or related manner interfering with, restraining, or
coercing its employees in the exercise of the right to self-organization,
to form labor organizations, to join or assist the above-named or any
other labor organization, to bargain collectively through representa-
tives of their own choosing, and to engage in concerted activities for
the purposes of collective bargaining or other mutual aid or protec-
tion or to refrain from any or all such activities except to the extent
that such rights may be affected by an agreement requiring member-
ship in a labor organization, as authorized in Section 8(a) (3) of
the Act, as modified by the Labor-Management Reporting and Dis-
,closure Act of 1959.
2. Take the following affirmative action which the Board finds will
'effectuate the policies of the Act :
(a) Upon request, bargain collectively with Oil, Chemical and
Atomic Workers International Union, AFL-CIO, as the exclusive
representative of all employees in the aforesaid appropriate unit, with
respect to rates of pay, wages, hours of employment, and, if an
understanding is reached, embody such understanding in a signed
agreement.
(b) Post at its place of business ih Ephrata and Malvern, Pennsyl-
vania, copies of the notice attached to the Intermediate Report marked
"Appendix." 5 Copies of said notice, to be furnished by the Regional
Director for the Fourth Region, shall, after being duly signed by the
Respondent's representative, be posted by the Respondent immediately
upon receipt thereof, and be maintained by it for 60 consecutive days
thereafter, in conspicuous places, including all places where notices to
5 This notice is amended by substituting for the words "The Recommendations of a
Trial Examiner" the words "A Decision and Order." In the event that this Order is
enforced by a decree of a United States Court of Appeals, there shall be substituted for
the words "Pursuant to a Decision and Order" the words "Pursuant to a Decree of the
United States Court of Appeals, Enforcing an Order."
UGITE GAS INCORPORATED 497
employees are customarily posted. Reasonable steps shall be taken
to insure that such notices are not altered, defaced, or covered by
any other material.
(c) Notify the Regional Director for the Fourth Region, in writing,
within 10 days from the date of this Order, what steps the Respondent
has taken to comply herewith.
INTERMEDIATE REPORT
STATEMENT OF THE CASE
A charge having been duly filed and served , a complaint and notice of hearing
thereon having been issued and served by the General Counsel of the National
Labor Relations Board , and an answer having been filed by the above -named Re-
spondent Company, a hearing involving allegations of unfair labor practices in
violation of Section 8(a)(5) and ( 1) of the National Labor Relations Act, as
amended , was held in Philadelphia , Pennsylvania , on August 5, 1959 , before the
duly designated Trial Examiner.
All parties were represented at the hearing. In lieu of adducing oral testimony
relating to the issues , counsel entered into a stipulation concerning the authenticity
and admission of certain documents and including the testimony which would have
been given under oath, if called , by certain individuals . Counsel for General
Counsel and for the Respondent argued orally. A brief has been received from
the Respondent.
Upon the entire record in the case, the Trial Examiner makes the following:
FINDINGS OF FACT
1. THE BUSINESS OF THE RESPONDENT
Ugite Gas Incorporated is a Pennsylvania corporation , maintaining places of
business at Ephrata and Malvern , Pennsylvania , where it is engaged in the bottling,
distributing , and servicing of propane gas and/or related and similar types of liquid
and gaseous fuels. It annually delivers and sells products valued at more than
$50,000 to firms and businesses in the Commonwealth of Pennsylvania which them-
selves are engaged in commerce within the meaning of the Act.
Ugite Gas Incorporated is engaged in commerce within the meaning of the Act.
H. THE LABOR ORGANIZATION INVOLVED
Oil, Chemical and Atomic Workers International Union, AFL-CIO, is a labor
organization within the meaning of the Act.
III. THE UNFAIR LABOR PRACTICES
In a nutshell , the major question for resolution here is whether or not the Re-
spondent was legally obligated to recognize and bargain collectively with the Charg-
ing Union in April 1959 ( after it had assumed formal control and direction of the
business it then purchased from McNay Gas Corporation d/b/a Ward Bottle Gas
Company . There is no dispute that the Union requested such recognition and
bargaining , or that the Respondent declined to meet these requests.
The various stipulations establish and it is here found:
1. After a Board -conducted election , held in December 1958 , pursuant to a
consent-election agreement (Case No. 4-RC-3748 ) the Union was certified as the
exclusive bargaining representative of all employees in an appropriate unit which
consisted of all "drivers , service and maintenance employees " of McNay Gas
Corporation.
2. Negotiations between the Union and McNay continued until early March 1959,
when they were suspended upon announcement by McNay of the pending sale of
the business to an unidentified purchaser.
3. On March 2, 1959 , the Respondent and McNay entered into a written purchase
and sales agreement by terms of which the Respondent agreed to purchase the
"business and all assets relating thereto" (with certain specified exceptions) of
McNay , and that settlement of this agreement was made on April 15, 1959 , with the
Respondent formally taking over the operations on April 16, 1959.
554461-60-vol 126-33
498 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
4. On March 19, 1959, before having actually taken over the enterprise, E. H.
Smoker, president of United Gas Improvement Company of Philadelphia, Penn-
sylvania, which owns and controls the Respondent, assembled the employees on
McNay's payroll, announced the intent to purchase McNay' s business , and stated,
among other things:
We are going to have to depend on all of you people to continue running the
business substantially as you have done in the past since you are the contact
people with the customers. They only know the Company through you, and
I know you will continue the good work which you have carried on. .. .
5. Pursuant to the sales agreement, the Respondent purchased from McNay,
among other things, certain real estate, buildings, motor vehicles, equipment, con-
tracts with consumer customers in McNay's service area, materials, supplies, furni-
ture and fixtures, and "all other property and assets, but excluding cash, accounts
receivable, prepaid insurance," and certain real estate and buildings.
6. By terms of the same agreement , McNay agreed not to engage in or have
ownership in "any liquified petroleum gas business within a radius of 100 miles
from" its then place of business, "for a period of ten years."
7. Other terms provided that the Respondent "shall not be liable for any .
contractual commitments or other liabilities" of McNay, "including liabilities to
its employees."
8. On or about March 30, 1959, after Smoker's talk to them, a number of em-
ployees on McNay's payroll signed the following statement, obviously addressed to
the Respondent:
We, the undersigned employees of Ward Bottle Gas wish to thank Mr. Smoker
Pres. of UGI for taking time out to meet with the employees, touching on the
work policy of our future employment. It is our thought that any further union
negotiations shall be discontinued and that within a reasonable time a meeting
be arranged to promote our future relationship with the new Company and
employees. It is also our wish that a new steward or stewards be appointed
to represent the employees.
9. On March 19, and again on April 13, 1959, Representative Sterling of the
Union called Smoker and requested to bargain.'
10. Active control was assumed by the Respondent on April 16, 1959, with A. E.
Bone, president of the Respondent corporation, taking over the responsibilities for
directing the operations.
11. On the morning of April 16, Bone assembled all the employees, explained
management policies, and after telling them they would "be paid by Ugite for all
work beginning" that day, asked them to fill out employment application blanks.
12. All but 2 of the 17 employees casting unchallenged ballots at the Board elec-
tion were on April 16 transferred to the Respondent's payroll. (The two exceptions
had voluntarily quit their employment before Ugite took over.)
13. No employees, other than those who had worked for McNay, have been hired
by the Respondent in the appropriate unit.
14. Upon placing these employees upon its payroll, the Respondent unilaterally
and without consultation with the Union altered their wages and working conditions.
15. On April 20, 1959, H. S. Rand, director of industrial relations for the parent
organization, UGI, assembled all but two of the employees and polled them by
having them mark ballots containing the following text:
Yes, I want a union.
No, I do not want a union.
Of the 14 present, 7 voted "Yes" and 7 voted "No."
16. On April 20 and again on April 22, Union Representative Sterling met with
President Smoker, but Smoker refused to recognize the Board's certification and
bargain with the Union.
Conclusions
As to the foregoing facts counsel for the Respondent urges in his brief that it is
not bound by the certification to recognize and bargain with the Union for the
following reasons, in substance:
1. The parties at the hearing "stipulated that the sale of McNay Gas Corporation
to Respondent . . . was a bona-fide arm 's length transaction and not designed or
'The stipulated testimony of Sterling and Smoker does not reveal what the latter's
response was, if any , to either of these two requests.
UGITE GAS INCORPORATED 499
intended to deprive or defeat any person of any rights which they might have under
the National Labor Relations Act."
2. The sales agreement specifically provided that the Respondent should not be
liable for any liabilities of McNay to its employees.
3. The above-quoted "petition" to Smoker indicated "dissatisfaction" among the
employees.
4. The Respondent conducted a poll and found that the Union did not represent
a majority.
5. There was a complete change in management personnel as well as a substantial
change in wages and working conditions.
As to point 1, above, while the quoted stipulation does appear in the record it is
plainly one of characterization and conclusion-not of fact-and the Trial Examiner
considers that neither the Board nor himself is bound by it. The facts do not war-
rant the conclusion, so far as employer-employee relations are concerned, and it is
mainly with such relations that the Act is concerned. Contrary to the characteriza-
tion of an "arms-length" transaction, the above facts show that nearly a month
before the actual purchase of the business, Smoker assembled McNay's employees
and effectively assumed control over them, by stating: "We are going to have to
depend on all of you people to continue running the business substantially as you
have done in the past, since you are the contact people with the customers." There
is no merit to point 1 as support for the Respondent's disclaimer of obligation under
the Act
Point 2 needs little discussion. Private parties obviously may not, by agreement,
void a public law, or evade obligations under a Federal act?
Point 3 comes squarely within the Ray Brooks doctrine,3 in the opinion of the
Trial Examiner, for as found more specifically below, the "employing industry"
remains the same. So far as the Trial Examiner is aware, the mere change in
ownership has never been found by the Board or the courts to be an "exceptional
circumstance" vitiating the 1-year certification rule approved by the Supreme Court
in the cited case.
Point 4 is likewise without merit. An employer may not substitute, by polling
or other means of his own, a determination already made by the Board 4
As to point 5, it has been found above that Smoker, nearly a month before
assuming control over other "assets," solicited the loyalty and "good work" of the
employees of McNay-so effectively informing them of his dependency upon them
"to continue running the business substantially as" they had done in the past that
while still on McNay's payroll they addressed a communication to Smoker as the
employer. The factor of wage changes, without consultation with the Union,
merely supports the admitted fact of refusal to bargain, and plainly is not deter-
minative of the question of "employing industry." There is no merit in this point.
On the other hand, the Trial Examiner concludes and finds that the foregoing
findings of fact fully sustain General Counsel's position that this case is governed
by Board and court decisions cited in his oral argument, as well as by others.
The essential and basic fact here is that the employing industry remains the same-
as Smoker himself made plain to the employees. As the Court of Appeals, Sixth
Circuit, said in Arthur J. Colten and Abe J. Coleman, d/b/a Kiddie Kover Manu-
facturing Company, 105 F. 2d 179.
It is the employing industry that is sought to be regulated and brought within
the corrective and remedial provisions of the Act in the interest of industrial
peace. The term "co-partners" may not then be regarded as more than a term
of description, or as denoting a legal entity which alone is subject to the com-
mand of the order. It needs no demonstration that the strike which is sought
to be averted is no less a subject of legislative solicitude when contract, death
or operation of law brings about a change of ownership in the employing
industry.
In Albert Armato and Wire & Sheet Metal Specialty Co., 199 F. 2d 800 (C.A. 7),
the court said:
The crucial question presented is whether the certification of the union, issued
by the Board during Krantz' ownership of the business, continued to be binding
2 Section 10(a) of the Act empowers the Board to prevent unfair labor practices. "This
power shall not be affected by any other means of adjustment or prevention which has
been or may be established by agreement, law, or otherwise."
3Ray Brooks v. N.L.R.B., 348 U.S. 96. See also Poole Foundry and Machine Company
v. N.L.R.B., 192 F. 2d 740 (C.A. 4), cert. denied 342 'U.S. 954.
4 See cases cited immediately above.
500 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
on Armato and the subsequently formed corporation. The very nature of the
certification of a union as a bargaining agent for a group of employees impels
the conclusion that a mere change in employers does not operate to destroy the
effectiveness of the certification.
In Cruse Motors, 105 NLRB 242, the Board said, in part:
a mere change of ownership of the employment industry is not so unusual
a circumstance as to affect the certification. Where the enterprise remains sub-
stantially the same, the obligation to bargain of a prior employer devolves
upon his successor in title. A purchaser in such a situation is a successor
employer .. . .
In short, the Trial Examiner concludes and finds that the Respondent has the
legal obligation to recognize and bargain with the Charging Union.5
In summary, it is concluded and found that the appropriate unit for purposes
of collective bargaining within the meaning of the Act consists of-
All drivers and service and maintenance employees, excluding office clerical
employees, watchmen, guards, and supervisors as defined in the Act at the
Respondent's Ward Bottle Gas Division at Ephrata, Pennsylvania, formerly
known as McNay GasCorporation d/b/a Ward Bottle Gas Company.
The complaint alleges, the above facts establish, and it is concluded and found
that on or about April 16, 1959, and thereafter the Respondent refused, and is
continuing to refuse, to bargain collectively with the Charging Union, although said
Union, by virtue of the Board's certification, was on that date and at all times
since then has continued to be the exclusive representative of all employees in the
aforesaid unit for the purposes of collective bargaining.
The Trial Examiner further concludes and finds that by refusing to bargain
with the Charging Union the Respondent has interfered with, restrained, and coerced
employees in the exercise of rights guaranteed in the Act.
IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE
The activities of the Respondent set forth in section III, above, occurring in con-
nection with the operations of the Respondent described in section I, above, have
a close, intimate, and substantial relation to trade, traffic, and commerce among the
several States, and tend to lead to labor disputes burdening and obstructing com-
merce and the free flow of commerce.
V. THE REMEDY
Having found that the Respondent has engaged in unfair labor practices, the
Trial Examiner will recommend that it cease and desist therefrom and take certain
affirmative action designed to effectuate the policies of the Act.
It will be recommended that the Respondent bargain collectively and in good faith,
upon request, with the Union as the exclusive representative of its employees in
the appropriate unit.
It will also be recommended that the Respondent cease and desist from in any
like or related manner infringing upon the rights of employees guaranteed in Sec-
tion 7 of the Act.
Upon the basis of the foregoing findings of fact, and upon the entire record in
the case, the Trial Examiner makes the following:
CONCLUSIONS OF LAW
1. Oil, Chemical and Atomic Workers International Union, AFL-CIO, is a labor
organization within the meaning of Section 2(5) of the Act.
2. All drivers and service and maintenance employees, excluding office clerical
employees, watchmen, guards, and supervisors as defined in the Act at the Respond-
ent's Ward Bottle Gas Division at Ephrata, Pennsylvania, formerly known as
McNay Gas Corporation d/b/a Ward Bottle Gas Company, constitute a unit
appropriate for the purposes of collective bargaining within the meaning of Section
9(b) of the Act.
3. The above-named labor organization at all times since December 19, 1958,
has been the exclusive representative of all employees in the aforesaid unit for the
purposes of collective bargaining within the meaning of Section 9(a) of the Act.
6 See also Boyce Wallace and Louise M. Wallace, t/a Investment Building Cafeteria,
120 NLRB 38; and Royal Brand Cutlery Company„etc., 122 NLRB 901.
UNITED BROTHERHOOD OF CARPENTERS & JOINERS, ETC. 501
4. By refusing on and after April 16, 1959, to bargain collectively with the afore-
said labor organization as the exclusive bargaining representative of all employees
in the appropriate unit , the Respondent has engaged in and is engaging in unfair
labor practices within the meaning of Section 8(a) (5) of the Act.
5. By interfering with , restraining , and coercing employees in the exercise of
rights guaranteed in Section 7 of the Act, the Respondent has engaged in and is
engaging in unfair labor practices within the meaning of Section 8(a) (1) of the Act.
[Recommendations omitted from publication.]
APPENDIX
NOTICE TO ALL EMPLOYEES
Pursuant to the recommendations of a Trial Examiner of the National Labor
Relations Board, and in order to effectuate the policies of the National Labor
Relations Act, as amended, we hereby notify you that:
WE WILL bargain collectively, upon request, with Oil, Chemical and Atomic
Workers International Union, AFL-CIO, as the exclusive representative of
all our employees in the unit described herein with respect to rates of pay,
hours of employment, or other conditions of employment, and, if an under-
standing is reached , embody such understanding in a signed agreement. The
bargaining unit is:
All drivers and service and maintenance employees , excluding office
clerical employees, watchmen, guards, and supervisors as defined in the
Act, at our Ward Bottle Gas Division at Ephrata, Pennsylvania.
WE WILL NOT in any like or related manner interfere with, restrain, or
coerce our employees in the exercise of their right to self-organization, to form
labor organizations, to join or assist the above-named or any other labor
organization, to bargain collectively through representatives of their own
choosing, and to engage in concerted activities for the purpose of collective
bargaining or other mutual aid or protection, or refrain from any and all such
activities, except to the extent that such rights may be affected by an agree-
ment requiring membership in a labor organization as a condition of employ-
ment as authorized in Section 8(a)(3) of the Act.
UGrrE GAS INCORPORATED,
Employer.
Dated------------------- By-------------------------------------------(Representative) (Title)
This notice must remain posted for 60 days from the date hereof, and must not
be altered, defaced, or covered by any other material.
United Brotherhood of Carpenters and Joiners of America,
AFL-CIO; Carpenters District Council of Milwaukee County
and Vicinity of the United Brotherhood of Carpenters and
Joiners of America, AFL-CIO; and Their Agents Ralph
Bowes and Henry Kamoske and Del-Mar Cabinet Company,
Inc. Case No. 13-CC-158. February 8, 1960
SUPPLEMENTAL DECISION AND AMENDED
ORDER ON REMAND
On October 1, 1958, the Board issued a Decision and Order in
this case,' finding that the District Council and its agent, Kamoske,
had violated Section 8(b) (4) (A) of the Act. The finding was based
1 121 NLRB 1117.
1126 NLRB No. 55.