Frito-Lay, Inc.

National Labor Relations Board - Board Decisions

Sep 30, 1977

232 N.L.R.B. 753 (N.L.R.B. 1977)

FRITO-LAY, INC.
Frito-Lay, Inc. and International Brotherhood of
Teamsters, Chauffeurs, Warehousemen and Help-
ers of America, Laundry, Dry Cleaning and Dye
House Workers' International Union, Local No. 1.
Cases 6-CA-8255 and 6-RC-7090
September 30, 1977
DECISION AND ORDER
BY CHAIRMAN FANNING AND MEMBERS
PENELLO AND MURPHY
On May 18, 1976, Administrative Law Judge Ivar
H. Peterson issued the attached Decision in this
proceeding. Thereafter, General Counsel filed limit-
ed exceptions and a supporting brief, and Respon-
dent filed cross-exceptions, a supporting brief, and a
brief in answer to General Counsel's limited excep-
tions.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the
National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
The Board has considered the record and the
attached Decision in light of the exceptions, cross-
exceptions, and briefs and has decided to affirm the
rulings, findings,' and conclusions of the Administra-
tive Law Judge, as modified herein. 2
1. The Administrative Law Judge found that
Respondent violated Section 8(a)(1) of the Act
"substantially in the respects alleged in the General
Counsel's complaint." We agree. Specifically, we find
that Respondent engaged in the following unlawful
acts in violation of Section 8(a)(1): unlawful interro-
gations; threats of discharge or other types of
reprisal; creating the impression of surveillance;
granting and implementing a wage increase; 3 and
threats to close the plant.
In finding the above violations, we rely on the
testimony of Collenette, Sandor, and Hunter, all of
whom are credited (specifically or inferentially) by
the Administrative Law Judge. At the end of
February 1975, Collenette was asked by Team
Leaders Kettlehut and Riley4 whether he knew
anything about the Union and was told that he "had
better take a look at the benefits that we had under
the O.D. System and think it over twice" and "that if
the union came in Frito-Lay officials might decide to
I Respondent has excepted to certain credibility findings made by the
Administrative I aw Judge. It is the Board's established policy not to
overrule an Administrative Law Judge's resolutions with respect to
credibility unless the clear preponderance of all of the relevant evidence
convinces us that the resolutions are incorrect. Standard Dry Wall Products.
Inc.. 91 NLRB 544 (1950). enfd. 188 F.2d 362 (C.A. 3, 1951). We have
carefully examined the record and find no basis for reversing his findings.
2 Respondent's request for oral argument is hereby denied as the record,
exceptions, and briefs adequately present the issues and the positions of the
parties.
232 NLRB No. 119
close the plant and pull out the machinery." Sandor
testified that Team Leader Riley conducted a
meeting in late February or early March at which he
asked the seven members of the team why they
wanted the Union and told them if the Union came
in "it would represent the failure of the open system,
or the Sharon system" and, accordingly, Respondent
would have to "re-evaluate the plant, solely on
economic grounds" and that "the chances were that
there would be layoffs, or some sort of slowdown, or
possibly even a shutdown at Sharon" because the
product was more inexpensively produced in Dallas,
Texas.5 The Administrative Law Judge specifically
credited the testimony of Hunter who testified, inter
alia, that on February 12, 1975, Plant Manager
Mclnvale informed him that he understood that
Hunter was trying to form a union and that Hunter
would be fired if Mclnvale heard any further rumors
about Hunter's "starting a union"; that, in the first
week of March, Team Leader Riley told Hunter that
if the Union came in Hunter and Collenette would
be the first two employees fired; and that Vice
President of Labor Relations Clegg stated at a
meeting attended by the employees that "the plant
was only experimental, and if [the employees] threw
the system out, IRespondent] could shut the plant
down and make munchos in Texas, because it was
cheaper to make them there, than it was here." Based
on the above testimony, we find that Respondent
violated Section 8(a)(1) of the Act by engaging in the
unlawful activity described above.
2. The Administrative Law Judge apparently
found that the closure of the facility was economical-
ly justified since Respondent, before the Union's
organizational efforts were well under way, came to
the tentative conclusion that the facility should be
closed. General Counsel contends that the Adminis-
trative Law Judge erred in this finding. We agree.
Initially, contrary to the Administrative Law Judge,
we do not agree that the decision to close was
"reasonably firm" on January 15, 1975. Respon-
dent's director of industrial engineering, Wheless,
and the senior vice president, Kickhamr both testified
that the decision to close the facility was made in
April. Although Respondent began consideration of
closing the facility as early as January 1975, Wheless
wrote a memorandum on February II to Kickham
reflecting their decision to keep open the facility "for
3 The Administrative Law Judge concluded that Respondent violated
Sec. 8(aX3). as well as Sec. 8(aX 1). of the Act by granting unit employees a
wage increase on February 21, 1975. We agree that such action was in
violation of Sec. 8(aXI ) of the Act, but do not adopt his finding that it also
violated Sec. 8(ai)3).
4 The Administrative Law Judge found, and we agree, that Team
Leaders Kettlehut, Riley. Sineath. and Pitts are agents of Respondent.
5 The Administrative Law Judge also found that the vice president of
labor relations made substantially the same statement on a number of
occasions at employee meetings on March 3 and 4.
753
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
the near future" due to an increase in the growth
rate. Since the Union requested recognition and filed
a representation petition on February 7. it is clear
that Respondent had not reached a "reasonably firm
determination" to close the facility before the
organizational efforts of the Union were well under
way.
We further find that the closure was unlawfully
motivated. Although Respondent introduced evi-
dence indicating that the product could be more
cheaply manufactured in Dallas, Texas (where the
work was subsequently transferred), we believe that
the economic grounds asserted were pretextual and
that, in fact, Respondent closed the facility because
the Union threatened its open management system,
also referred to herein as the innovative system. It is
clear that the open management system was a crucial
factor in opening the plant. Thus, Kickham testified
that the plant was opened because he "was very
anxious to try this system," and Plant Manager
Mclnvale testified "that the open system was
extremely important to resolve, it was one of the
primary missions of the Sharon plant, to test that
system." The record is replete with examples indicat-
ing the great concern of management with the
innovative system. Kickham decided to utilize the
concept at the Sharon facility. 6 Mclnvale, who
possessed a significant background in the innovative
system, was appointed plant manager by Kickham
and, due to the unique nature of the system as well as
Kickham's very strong personal interest in it,
reported directly to him.7 Managers and employees
were screened to determine their attitudes and
aptitudes regarding the open management system.
Additionally, Respondent opened the Sharon facility
at a time when not only was the forecast for its
product not encouraging, but Respondent knew that
the product could be made less expensively in Texas.
Accordingly, it is clear that the open management
system was the primary consideration in opening the
Sharon facility.
It is also clear that Respondent, subsequent to the
advent of the Union, began evaluating the facility for
the first time solely by an economic standard. In fact,
the economic conditions giving rise to the plant
closure were not significantly different from the
conditions existing at the time the facility began
production. Kickham testified that he had estimated
it would take approximately a year for the system to
work out and explained to Mclnvale that it was
understandable that the Texas facility initially could
produce the product less expensively than the Sharon
facility but that Kickham expected improvement to
the point where the Sharon facility would equal the
H' Respondenl's facility referred to in the record and herein as the
"Sharon facililt" is located, in fact, in West Middlesex. Penns)lvania.
cost in Texas "at some time in the future." Notwith-
standing this expectation that it would take some
time to work out the new system and despite the $3.5
to $4 million investment in the new facility, the
decision to close the plant was made in April, only 7
months after the plant began production in Octo-
ber-and only 2 months after the Union demanded
recognition.
In addition, as found by the Administrative Law
Judge, Respondent made numerous threats to
employees that a unionized plant would represent a
failure of the open system and would require it to
reevaluate the plant solely on economic grounds. As
Respondent's facility in Texas was able to produce
the product for less than it could be produced in
Sharon, a threat to evaluate the Sharon plant solely
on economic grounds was tantamount to a threat to
close. The relationship between the advent of the
Union and the closing of the plant was specifically
explained by Team Leader Kettlehut after the plant's
shutdown was announced, when he told Hunter that
closing the plant is "what it is to try to get a union in
a non-union shop." Accordingly, although obviously
Respondent was concerned with the economic
wisdom of maintaining the plant, it is clear that
Respondent's emphasis shifted with the advent of the
Union from concern with the innovative system to
concern only with the financial justification for
maintaining the plant. In our opinion, the above
evidence shows that Respondent unlawfully closed
down its production facility in Sharon based on
union considerations, transferred the unit work to its
Texas plant, and terminated the employment of the
Sharon production operation employees in violation
of Section 8(a)(3) of the Act.
3. Based on the above violations, we find that
Respondent's conduct not only precluded the hold-
ing of a fair election, but, in our judgment, was of a
sufficiently pervasive and extensive character to have
undermined the Union's preexisting majority. There-
fore, we shall set aside the election, dismiss the
petition, and vacate the proceeding in Case 6-RC-
7090. We further find that the lingering effects of
Respondent's past coercive conduct render uncertain
the possibility that traditional remedies can insure a
fair election. We therefore conclude that the Union's
card majority, obtained before the unfair labor
practices occurred, provides a more reliable test of
employee representation desires and better protects
employee rights than would a rerun election. Accord-
ingly, we find that by refusing to recognize and
bargain with the Union and by engaging in the
aforesaid unfair labor practices Respondent violated
Section 8(a)(5) and (1) of the Act and the policies of
7 Mclnvale was the only plant manager directly reporting to Kickham.
754
FRITO-LAY, INC.
the Act will best be effectuated by imposition of a
bargaining order to remedy such violations." Accord-
ingly, we also find that Respondent refused to
bargain with the Union in violation of Section 8(aX5)
of the Act.
In making these findings, we are aware that the
United States Court of Appeals for the Third Circuit
has indicated 9 that, under its interpretation of Gissel,
the Board must indicate specifically under which of
the first two Gissel categories ° it has classified the
unlawful practices and is required to "clearly
explicate its reasons for issuing a bargaining order
and include findings as to why a fair election cannot
be held." In recognition of the possibility that the
instant case could be appealed to the United States
Court of Appeals for the Third Circuit, we make the
following detailed analysis:
Clearly, the above unlawful practices, for reasons
stated specifically below and in numerous other
cases, are "outrageous," "pervasive," and of a
sufficiently serious nature that traditional remedies
cannot eliminate their coercive effects. However,
even if Respondent's activities cannot be so de-
scribed (and we emphasize, again, that they can), the
record indicates that the Union possessed an authori-
zation card majority on February 7, 1975, when it
made its demands on Respondent. Accordingly, it is
not necessary for us to resolve whether Respondent's
unlawful acts fall into the first or second category
described by the Gissel Court. However, we note that
Respondent engaged in unlawful interrogations;
threats of discharge or other types of reprisal;
creating the impression of surveillance; granting and
implementing a wage increase; threats to close the
plant; unlawful closure of the production facility;
and termination of all the Sharon production
operating employees. Obviously, at the very least,
such unfair labor practices are sufficiently serious
and pervasive to have the tendency to undermine
majority strength and impede the election processes.
Certainly this conduct renders slight the possibility of
erasing the effects of the past practices and of
ensuring a fair election by the use of traditional
M N.L.R.B. v. Gissel Packing Co.. Inc.. 395 U.S. 575 (1969). As set forth
above, by threatening Hunter on February 12, 1975, Respondent embarked
on a course of unlawful conduct which dissipated the Union's majority
status. Accordingly. we find that Respondent's bargaining obligation
commenced as of that date. Trading Port, Inc., 219 NLRB 298 (1975).
Chairman Fanning would find that Respondent's obligation to bargain
commenced as of the date the Union attained a majonty and demanded
(and was refused) recognition-February 7. 1975. (See his concurring and
dissenting opinion in Drug Package Company. Inc.. 228 NL RB 108 (1977).)
9 See N. L. R. B. v. Armcor Indurstries. Inc., 535 F.2d 239 (C.A. 3. 1976):
Hedstrom Co., a subsidiary of Brown Group, Inc., 558 F.2d 1137 (C.A. 3,
1977),
to See Gissel, 395 U.S. at 613-615.
I" The Board and the courts have long recognized that threats to close
down a facility because of union activity are among the most serious and
flagrant forms of interference with the free exercise of employee rights.
Irving N. Rothkin dibia Irv's Marker., 179 NLRB 832 (1969), enfd. 434 F.2d
remedies and establishes that employee sentiment
once expressed through cards would, on balance, be
better protected by a bargaining order. Respondent
not only threatened to close the plant," but, in fact,
closed the entire production operation thereby
terminating approximately 40 employees employed
therein in violation of Section 8(a)(3) of the Act.
Such conduct "goes to the very heart of the Act"12
and has consequences clearly crippling to the free
exercise of Section 7 rights.13 Obviously, the enthusi-
asm for union activity formerly displayed by the
employees who signed authorization cards was, and
will continue to be, dampened by the recollection of
Respondent's unlawful practices which will be, or
already have been, related to new employees.' 4
Based on the foregoing explication of the effects of
Respondent's unlawful practices and the ineffec-
tiveness of a remedy other than a bargaining order, we
have made the foregoing findings and shall provide
the following remedy.
THE REMEDY
Having found that Respondent engaged in certain
unfair labor practices, we shall order it to cease and
desist therefrom and take certain affirmative action
which we find necessary to effectuate the policies of
the Act.
Having found, contrary to the Administrative Law
Judge, that Respondent unlawfully shut down its
production operation and terminated the personnel
therein in violation of Section 8(a)(3) of the Act, we
shall amend the recommended Order accordingly.
Thus, we shall order Respondent to restore the status
quo ante by reopening the Sharon facility, restoring
the production facility therein,' 5 and recalling the
terminated employees to the positions they held
before their unlawful termination without prejudice
to their seniority and other rights and privileges.' 6
We shall further order Respondent to make these
employees whole for any loss of earnings and other
benefits resulting from Respondent's unlawful termi-
nation of them, computed in accordance with the
1051 (C.A. 6, 1970). Textile Workers Union v. The Darlington Mfg. Co., 380
U.S. 263 (1965). Moreover, as the Supreme Court has indicated, threats to
close or transfer plant operations are among the most effective unfair labor
practices for destroying election conditions for a longer period of time than
others. See Gissel, 395 U.S. at 611. fn. 31.
12 N. LR.B v. Entwistle Manufacturing Co., 120 F.2d 532, 536 (C.A. 4.
1941).
i3 See Armcor Industries, Inc., 227 NLRB 1543 (1977).
4 See Armcor, supra, E.S. Merrirnan d Sons. Merriman Managemenr
Services, Inc., 219 NLRB 972 (1975), and cases cited therein at 973.
is Member Murphy believes that the Board should order reopening and
resumption of an operation only in the most extreme circumstances. She
finds, however, that the facts in this case as recited above fully justif) this
type of remedial order here.
ie Gerald F Hinkle d/b/a Akron Noveliy Manufacturing Companyv. 224
NLRB 998 (1976); Krebs and King Toyota, Inc., 197 NLRB 462 (1972).
755
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
formula stated in F. W. Woolworth Company, 90
NLRB 289 (1950), with interest computed in the
manner set forth in Florida Steel Corporation, 231
NLRB 651 (1977).17 Having further found that
Respondent violated Section 8(a)(1) of the Act by
certain unlawful conduct as set forth above, we shall
order Respondent to cease and desist therefrom.
Having found that Respondent refused to bargain
in good faith with the Union in violation of Section
8(a)(5) and (1) of the Act, we shall order that it cease
and desist therefrom, and, upon request, bargain
collectively with the Union as the exclusive represen-
tative of all employees in the appropriate unit1 8
concerning wages, hours, and other terms and
conditions of employment, and, if an understanding
is reached, embody such understanding in a signed
agreement.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor
Relations Board hereby orders that the Respondent,
Frito-Lay, Inc., West Middlesex, Pennsylvania, its
officers, agents, successors, and assigns, shall:
I. Cease and desist from:
(a) Questioning employees concerning their union
sympathies or concerted activities.
(b) Discharging or threatening employees with
discharge or with any other type of reprisals or more
onerous working conditions if they select the Union
as their collective-bargaining representative.
(c) Refusing to bargain with the International
Brotherhood of Teamsters, Chauffeurs, Warehouse-
men and Helpers of America, Laundry, Dry Clean-
ing and Dye House Workers' International Union,
Local No. 1, as the exclusive bargaining representa-
tive of the employees in the appropriate unit.
(d) Granting and/or implementing wage increases
or other benefits without bargaining with the Union.
(e) Threatening employees with plant closure.
(f) Creating the impression of surveillance.
(g) In any other manner interfering with, restrain-
ing, or coercing employees in the exercise of the
rights guaranteed them in Section 7 of the Act.
2. Take the following affirmative action in order
to effectuate the policies of the Act:
(a) Restore the production operation to the Sharon
facility and reinstate unlawfully terminated employ-
ees to the positions they held before their unlawful
termination without prejudice to their seniority or
other rights or privileges and make them whole for
any loss of earnings or other benefits resulting from
Respondent's unlawful termination of them in a
manner set forth in the section of this Decision
entitled "The Remedy."
(b) Upon request, bargain collectively in good faith
with the International Brotherhood of Teamsters,
Chauffeurs, Warehousemen and Helpers of America,
Laundry, Dry Cleaning and Dye House Workers'
International Union, Local No. 1, as the exclusive
bargaining representative of the employees in the
appropriate unit described above with respect to
rates of pay, wages, hours, or other terms or
conditions of employment and, if an understanding
is reached, embody such understanding in a signed
agreement.
(c) Preserve and, upon request, make available to
the Board or its agents, for examination and copying,
all payroll records, social security 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.
(d) Post at its plant in West Middlesex, Pennsylva-
nia, copies of the attached notice marked "Appen-
dix." 1 9 Copies of said notice, on forms provided by
the Regional Director for Region 6, after being duly
signed by Respondent's authorized representative,
shall be posted by Respondent immediately upon
receipt thereof, and be maintained by it for 60
consecutive days thereafter, in conspicuous places,
including all places where notices to employees are
customarily posted. Reasonable steps shall be taken
by Respondent to insure that said notices are not
altered, defaced, or covered by any other material.
(e) Notify the Regional Director for Region 6, in
writing, within 20 days from the date of this Order,
what steps Respondent has taken to comply here-
with.
IT IS FURTHER ORDERED that the election conducted
on May 18 and 19, 1975, in Case 6-RC-7090 be set
aside, that the petition therein be dismissed, and that
the proceeding in Case 6-RC-7090 be vacated.
17 See, generally, Isis Plumbing& Heatring Co., 138 NLRB 716 (1962).
i" All formulation employees, processing employees, packaging employ-
ees. maintenance employees, support employees, shipping and receiving
employees and plant clerical employees employed at the Employer's West
Middlesex, Pennsylvania, location, excluding all office clerical employees,
salesmen, drivers, and professional employees and guards and supervisors as
defined in the Act.
I9 In the event that 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 National 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
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
WE WILL NOT refuse, upon request, to bargain
collectively in good faith concerning rates of pay,
756
FRITO-LAY, INC.
wages, hours, or other terms or conditions of
employment with International Brotherhood of
Teamsters, Chauffeurs, Warehousemen and Help-
ers of America, Laundry, Dry Cleaning and Dye
House Workers' International Union, Local No.
1, as the exclusive bargaining representative of the
employees in the following unit:
All formulation employees, processing em-
ployees, packaging employees, maintenance
employees, support employees, shipping and
receiving employees and plant clerical em-
ployees employed at the Employer's West
Middlesex, Pennsylvania, location, exclud-
ing all office clerical employees, salesmen,
drivers, and professional employees and
guards and supervisors as defined in the Act.
WE WILL NOT threaten our employees with
discharge, or with any other types of reprisals
because they support a union.
WE WILL NOT grant employees wage increases
without bargaining with the Union.
WE WILL NOT unlawfully question employees
concerning their union membership, activities, or
desires.
WE WILL NOT threaten employees with plant
closure because of employee support of a union.
WE WILL NOT create the impression of surveil-
lance of union activities.
WE WILL NOT layoff or discharge employees
because they selected the Union as their collec-
tive-bargaining representative.
WE WILL NOT in any other manner interfere
with, restrain, or coerce employees in the exercise
of their rights guaranteed under Section 7 of the
Act.
WE WILL, upon request, bargain collectively
and in good faith with International Brotherhood
of Teamsters, Chauffeurs, Warehousemen and
Helpers of America, Laundry, Dry Cleaning and
Dye House Workers' International Union, Local
No. i, as the exclusive bargaining representative
of the employees in the appropriate unit described
above with respect to rates of pay, wages, hours,
or other terms or conditions of employment and,
if an understanding is reached, embody such
understanding in a signed agreement.
WE WILL restore the production operation to
the Sharon facility and reinstate unlawfully
terminated employees in the appropriate unit
described above to the positions they held before
their unlawful terminations, without prejudice to
their seniority or other rights or privileges, and WE
WILL make them whole for any loss of earnings or
other benefits resulting from our unlawful termi-
nation of them, with interest.
-FRITO-LAY, INC.
DECISION
STATEMENT OF THE CASE
[VAR H. PETERSON, Administrative Law Judge: This case
was heard in Sharon, Pennsylvania, on 8 days commencing
on November 11 and concluding on December 3, 1975,
based on the complaint issued by the Regional Director for
Region 6, on August 28, whicW in turn was based on a
charge, filed by International Brotherhood of Teamsters,
Chauffeurs, Warehousemen and Helpers of America,
Laundry, Dry Cleaning and Dye House Workers' Interna-
tional Union, Local No. I, herein called the Union, on
April 24, amended on August 19. On September 2, the
Regional Director issued an order directing hearing on
objections, filed by the Union on March 25, with respect to
a consent election held on March 18 and 19.1 By order
dated September 5, the Acting Regional Director directed
that these cases be consolidated for the purpose of hearing.
Briefly stated, the amended complaint, as further
amended at the outset of the hearing, alleged that
Respondent, by the conduct of various supervisors and
agents, had engaged in conduct violative of Section 8(a)(1)
of the Act on various dates from February through the
middle of March, and that, at all times since on or about
February 7, Respondent had failed to bargain collectively
with the Union as the representative of the employees in an
appropriate unit in which the election was held and that,
on or about June 1, Respondent unlawfully terminated the
employment of all of its employees in that unit and
thereafter refused to reinstate them to their former or
substantially equivalent positions for the reason that they
had engaged in activities on behalf of the Union and in
other protected concerted activities, thereby violating
Section 8(a)(3), (5), and (1) of the Act. In its answer, dated
September I 1, Respondent admitted certain allegations of
the complaint but denied that it had engaged in any
conduct violative of the Act.
On the entire record in the case,2 including my
observation of the demeanor of the witnesses as they
testified, and after considering the briefs filed with me by
counsel for the General Counsel and counsel for Respon-
dent on or about February 2,3 1 make the following:
I The results of the election showed that. of approximately 39 eligible
voters. 17 votes were cast for the Union and 22 were cast against the Union.
2 The unopposed motions of counsel for the General Counsel and
counsel for Respondent to correct the transcript in certain respects are
granted.
3 On February 23. I received a rather lengthy letter from counsel for
Respondent. dated February 20. in which he took issue with what he termed
some "apparently inadvertent erroneous, unsupported or misleading
assertions" contained in the brief of counsel for the General Counsel. to
whom a copy of the letter was sent. On February 27. 1 received a letter from
counsel for the General Counsel., dated February 24. in which he
"strenuously" objected to "the substance of counsel for Respondent's letter"
to me, and to "his characterization of General Counsel's brief as
unsupported and/or misleading." He concluded by stating that the letter of
(( oninued)
757
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
FINDINGS OF FACT
I. JURISDICTION
Respondent, a Delaware corporation with its principal
offices in Dallas, Texas, is engaged in the manufacture,
distribution, and nonretail sale of food products. It
operates a facility in West Middlesex, Pennsylvania, which
is the only facility here involved, generally called the
Sharon plant, at which it admittedly received goods and
materials valued in excess of $50,000 directly from points
outside the Commonwealth of Pennsylvania, during the 12-
month period preceding issuance of the complaint and
that, during the same period, it shipped goods and
materials valued in excess of $50,000 from the West
Middlesex facility to points outside the Commonwealth of
Pennsylvania. It is admitted and I find that Respondent is
an employer engaged in commerce within the meaning of
Section 2(6) and (7) of the Act and comes within the
Board's jurisdictional standards, and that the Union, at all
material times, has been a labor organization within the
meaning of Section 2(5) of the Act.
It is admitted and I find that the following individuals
occupy the positions set opposite their names and are
agents of Respondent:
Leonard B. Clegg
Gerald D. Mclnvale
Victor H. Coffman
Mark H. Sineath
Steven M. Riley
Robert E. Kettlehut
Tommy Dean Pitts
Vice Pres. of Labor
Relations
Plant Manager
Production Manager
Team Leader
Team Leader
Team Leader
Team Leader
Respondent denies that one Stanley Hailey, alleged to
have been a supervisor, occupies that position. I find,
however, that he is a supervisor inasmuch as he was in
charge of personnel functions in the Great Lakes zone and
had the responsibility to recommend settlement or adjust-
ment of grievances and did in fact do so.
II. THE ALLEGED UNFAIR LABOR PRACTICES
A. Introduction
Respondent has 37 manufacturing plants all located in
States of the continental United States and operates
through a franchise arrangement in Hawaii. Eighteen of
these are organized. Leonard Clegg, vice president in
charge of labor relations, testified it has 78 agreements with
some 6 or 7 different labor organizations, approximately
three-fourths of which are with the Teamsters. Respondent
employs approximately 15,000 persons. Its Sharon plant
got underway in September 1974. 4 However, as John
counsel for the Respondent was "in fact an answering brief which is not
provided for by the Board's Rules and Regulations, and therefore should
not be taken into consideration in your determination of the case." Under
date of February 27, I wrote to counsel for Respondent, with a copy to
counsel for the General Counsel and counsel for the Union, stating that
inasmuch as I had read his letter and "thus can not wholly disregard its
purport, and considering also the important issues raised in this case, it
appears to me that in these circumstances the fair thing to do is to afford
counsel for the General Counsel a reasonable opportunity to respond, if he
Kickham, Respondent's senior vice president in charge of
manufacturing and support functions, testified, officials of
Respondent, early in January 1975, began considering
closing the Sharon facility. According to Mark Wheless,
Respondent's director of industrial engineering, a feasibili-
ty study was prepared prior to the opening of the Sharon
plant. He further testified that a number of other facilities
of Respondent were closed in 1975, and that, when he
recommended that the Sharon plant be closed, he had no
information concerning organizational activity among the
Sharon employees. He related that a decision to close the
Sharon plant was made between March 31 and April 10.
Kickham testified that it was more expensive for Respon-
dent to make its products in Sharon than in the Texas
plant, and that the decision to close the Sharon plant was
made in April. He further testified that Respondent located
in Sharon because it had owned the building for some time
and was of the view that shipping costs would be more
favorable as compared with the Texas plant.
Frank Scalish, the Union's business representative,
related that organizational activity began in the latter part
of December 1974 and was further activated in February,
when he met with employees in Sharon and received a
number of authorization cards. He asked management for
recognition on February 7, which was refused, and then
filed a representation petition on the same date. He
testified that, by February 20, the Union had 28 signed
authorization cards from the approximately 40 employees
of Respondent at the Sharon plant.
Under date of February 21, Respondent, by letter posted
on the bulletin board, advised the employees that following
a wage survey all job rates at the Sharon facility would be
increased by 25 cents effective February 23 and would
appear in their paychecks on March 14. In his letter,
Mclnvale stated that Respondent's "commitment was to
resolve and announce the wage survey during February"
and stated that it would have been completed earlier "but
the Employee Relations Department has to research and
prepare our position so that we can not be accused of an
'Unfair Labor Practice' in granting this increase during the
period prior to the election." In granting and implementing
this wage increase, Respondent did not consult with the
Union. McInvale testified that, at the time the wage
increase was implemented, he was aware that the Union
was organizing the employees but that he did not discuss
the wage increase with any union representative. In his
brief, counsel for Respondent states "the evidence shows
unambiguously and indisputably that the Company had
decided on its wage increase before the Union's demand,
and that the employees were advised of and expecting the
increase. By failing to implement the increase," so he
argues, Respondent would have violated Section 8(a)(1)
so desires." I then allowed counsel for the General Counsel until March 15
to file a further brief with me. On March 15, I did receive an answering brief
from counsel for the General Counsel.
I In 1972 Respondent purchased land and a large building in Sharon.
expecting to convert it to producing a new product. However, this did not
materialize and, when Respondent realized its need to expand facilities to
produce more Muncho pellets, the intermediate product from which
Muncho potato cnsps are made, the Sharon facility became the logical place
in which to conduct the new operation.
758
FRITO-LAY, INC.
and (3) and the "implementation of the wage increase was
not in violation of" Section 8(a)(1).
Counsel for the General Counsel delineates the following
issues: (a) whether Respondent engaged in certain acts and
conduct which constitute violations of Section 8(aXI) of
the Act; (b) whether Respondent closed its Sharon facility,
transferred bargaining unit work to the unorganized Texas
plant, and terminated the Sharon employees in violation of
Section 8(a)(3) of the Act; (c) assuming that the answers to
the foregoing are in the affirmative, whether a bargaining
order, as well as an order to reopen the Sharon facility,
should be issued to remedy the foregoing violations; and
(d) whether Respondent violated Section 8(a)(5) of the Act
by certain acts and refusals to bargain. On the other hand,
Respondent contends, in essence, that its decision to close
the Sharon facility was solely motivated by economic
considerations and, while coinciding with the Board
election, was originated and implemented pursuant to its
decisions made long before it became aware of any union
activity among its employees. It is apparent that the issues
raised in this case involve very substantial amounts of
money, in terms of possible backpay to employees,
relocation costs to Respondent, and other incidental
obligations.
B. Interference, Restraint, and Coercion
In the latter part of June 1974, Respondent instituted its
process for hiring production and maintenance employees
for the Sharon facility. It had received something more
than 900 job applications and, through a three-step
procedure, it hired 41 individuals. The hiring process
involved the following steps: First, applicants were sepa-
rated into groups of approximately 50. Mclnvale made a
presentation to these groups, lasting some 15 minutes,
concerning the job, the open management system, and
employee benefits. Thereafter, those applicants who were
interested were asked to fill out a standard employment
application and questionnaire. The purpose of the ques-
tionnaire was to endeavor to explore the subject of the
open system and to obtain opinions on that matter.
Thereafter, there was a "screening" interview, lasting some
10 minutes, by a member of management, during which the
questionnaire filled out by the applicant and his applica-
tion were reviewed. Such applicants as did not indicate a
liking for the open management system or, as it was
customarily referred to, the O.D. System, were not chosen.
There is testimony that several applicants were ques-
tioned by the person interviewing them, as to their attitudes
with respect to unions. Thus. Kenneth Hunter, who was
hired, testified that the interviewer told him that she
noticed that his last place of employment was with Sharon
Steel and that she then inquired how he felt about the O.D.
System and that he told her he thought it was a good idea
and that she thereupon inquired whether he did not think,
in his words, it was "a better idea than to pay union dues
out every month." He further related that Supervisor Pitts
interviewed him, basically asking the same questions and
inquired what he thought about a union, to which he
responded that he was against them. He stated that, in the
course of the interview with a Miss Cobb, she stated, in his
words, "that we would be working on a team concept, that
the union wasn't there, we'd make our own decisions, we
wouldn't have to have a union make our decision for us."
Michael Cooke, another applicant who thereafter was
hired, testified that, in his initial interview conducted by
Team Leader Steve Riley, the latter inquired of him where
he had worked and also about unions, and that he
responded by stating that he had worked in a union
establishment previously at Sharon Steel.
The final step in Respondent's hiring process consisted
of a so-called in-depth interview which was conducted by
teams consisting of three management representatives.
Applicants who were regarded as worthy of further
consideration following the screening interview were given
a written description of the O.D. System and then
scheduled for the more extensive interview which lasted
some 30 minutes and, as the evidence discloses, was
designed to explore the person's attitudes toward the O.D.
System. The applicants, so they testified, were also
questioned about their feelings concerning any affiliations,
if any, with unions. For example, Joe Sandor, an employee,
testified that during his interview he was asked about his
former employment and that he answered he had worked
in union shops, whereupon he was questioned as to his
feelings about union shops and unions. He related that he
said that he thought at times unions were beneficial but at
other times they were not. He further stated that he
answered the question in that manner because he "assumed
that that was the answer that they were looking for, and I
desired the job." He also stated that during his second
interview he was questioned about how he felt about a
union and that he said he "was against them, I lied so I
could get the job."
Richard Collenette testified that during his second
interview he was asked if he understood the O.D. System,
which the interviewer characterized as the relationship
between the management and the employees, without a
third party. He asked the interviewer, "Did he mean union,
and he said yes, he did. And he asked me how I thought
this kind of plan would work in this area because the
Shenango Valley was so heavily unionized." Collenette
answered that he "thought it would work and that I wanted
to be part of it." Rebecca Gordon related that the subject
of unions was brought up at her second interview, and that
she was "asked if I had worked at any place where there
was a union," and that she said that she had, and, in
response to inquiry to her feelings about unions, she "told
him at this particular place where I was working at, which
was at Mercer County Home, I said that I felt very strongly
for the Union because of the conditions" at the time she
was there. In response to further inquiry as to her feelings
in general concerning unions, she replied that "there's
certain places where there's a definite advantage to have a
union, there is also places where that there's a possibility
where unions were good there as not having them or having
them." Finally, Tony Fall testified that he was asked about
unions by Karen Cobb, a member of Respondent's
personnel department, how he thought the O.D. System
would work "in place of the union," and that he answered
that "it sounded like it could work and that it should be
given a chance."
759
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Witnesses produced by Respondent concerning the
above matters related by General Counsel witnesses either
denied that the incidents occurred or gave different
versions. Counsel for Respondent, in his brief, in particular
takes issue with the testimony of Hunter, characterizing it
as "the most bizarre produced during the hearing" and
asserting that it is not credible. He argues that Hunter's
testimony is full of internal inconsistencies and cites as an
example Hunter's testimony as to how he learned about
Respondent's decision to close the Sharon facility. Thus,
Respondent notes that on direct examination he stated that
he learned of that decision from a fellow employee,
Michael Cooke, inasmuch as he had not attended the
meeting summoned to announce that decision in order that
he might take his child to the hospital. On cross-examina-
tion, however, Hunter testified that he learned of his
decision from Plant Manager Mclnvale, in a conference
room. In addition, Hunter testified that he encountered
Mclnvale during the first week of March and that on that
occasion Mclnvale observed that Hunter was obtaining
employee addresses for a union meeting and made some
remarks, of an allegedly intimidatory nature, concerning
his union activities. Mclnvale denied that this incident ever
occurred. Counsel for Respondent suggests that "it seems
significant that the General Counsel's evidence established
that the last of the two union dinner meetings had been
held several weeks before the time of this alleged confron-
tation."
Hunter also testified that he had been warned by his
team leader, Kettlehut, on the same day he encountered
McInvale in early March, to the effect that he should be
careful about his union activity, for the reason that "they"
were out to get him. In this regard, counsel for Respondent
suggests that it seems unlikely that any such conversation
"could have taken place in that after February 22, 1975,
Hunter was assigned to the early week schedule," consist-
ing of Sunday, Monday, Tuesday, with alternating Satur-
days, whereas Kettlehut, as indicated by uncontradicted
testimony, was assigned to the late week schedule during
the entire period and, as counsel states, "would not have
been in the plant at the same time as Hunter."
As a further example of what counsel states should be
"the caution with which Hunter's testimony must be
approached" is his testimony that, on a Thursday or Friday
during March, Team Leader Riley threatened that he and
fellow employee Collenette would be the first to be
terminated in the event the Union came in. Hunter stated
that at the time in question he was a member of Sineath's
team in the shipping and receiving department; however,
counsel for Respondent points out that the timecards of
Hunter disclose that he was then assigned to a production
team working the early part of the week and, moreover,
that he did not work on a Thursday or a Friday during the
entire month of March. Not only did Riley deny that such
a conversation occurred but there is no dispute that he was
then assigned to a late week production team and would
not have been in the plant at the same time as Hunter, who
was on the early week team.
Counsel for Respondent refers to another alleged
interchange between Hunter and Kettlehut which Hunter
testified involved a discussion of union dues and, on the
part of Kettlehut, some rather uncomplimentary remarks
regarding Scalish. According to Hunter, he was, at the time
of this alleged conversation, "positive he was in shipping
and receiving" under Sineath. However, counsel for
Respondent points out that Hunter's timecards "reveal at
this time Hunter was working on an early week production
team for Tom Pitts," whereas Kettlehut "always worked on
late week production shifts," and, that Kettlehut denied
that this incident occurred. There is also the contention
that, during the first or second week of May, Kettlehut and
Hunter were supposedly involved in a conversation, during
the course of which Kettlehut expressed the opinion as to
why the plant closed. According to Hunter, Kettlehut was
his team leader for the day. However, counsel for
Respondent points out that the timecards of Hunter show
that he was then working on an early week production
team, whereas Kettlehut consistently worked on a late
week production team.
The serious challenges to Hunter's veracity will be
considered in a later section of this Decision; suffice it to
note here that counsel for the General Counsel, in his
answering brief, has carefully examined this matter.
After being hired, employees were given an intensive 4-
week training program, consisting of technical and non-
technical instruction. The technical training consisted of
teaching employees the skills they would need for their
particular jobs, while the nontechnical training consisted of
imparting to them knowledge concerning the O.D. System,
emphasizing problem solving through the team concept
and open communication.
Because of delays occasioned by late delivery of certain
equipment, actual production did not start until September
1974. Shortly before that time, the demand for Munchos
fell off considerably. The Dallas plant, which theretofore
had been operating three full lines making Muncho pellets,
reduced its operation. Although it appears that consumer
demand did not warrant opening the Sharon facility, it
was, nevertheless, opened inasmuch as Vice President
Kickham wished to "test the open management system."
Between Christmas and New Years, employee Leslie
Svarny contacted the Union's business representative,
Scalish, and advised him that the employees desired union
representation. Scalish suggested that they wait until after
the holiday season and that the Union would then
commence organizational activities. During the first week
of February 1975, the Union held several meetings at
restaurants in the Sharon area, and authorization cards
were distributed by union representatives as well as by
employees. Between February 2 and 6, it appears that 21
production and maintenance employees had signed union
authorization cards and on February 7 the Union demand-
ed that Respondent recognize it as the employees'
collective-bargaining representative.
On February 4, Collenette was approached by Team
Leaders Riley and Kettlehut at his work station, where
they questioned him, as he testified, concerning his
knowledge about the Union. Collenette related that he was
asked what he knew about the Union and that he replied
that he was aware of the Union's efforts and was told "that
I had better take a look at the benefits that we had under
the O.D. System, and think it over twice." On February 7,
760
FRITO-LAY, INC.
Scalish and another union representative went to the
Sharon facility where they met with Plant Manager
McInvale, advising him that the Union represented a
majority of Respondent's production and maintenance
employees, offered to submit authorization cards to an
impartial third party for inspection, and presented Mcln-
vale with a recognition agreement. Mclnvale refused all
three proposals, stating that it would be necessary for him
to take up the matter with his superiors in Texas. On the
same date, February 7, the Union filed a petition with the
Board.
On the morning of February 12, employee Hunter was
told by Team Leader Sineath that Mclnvale wished to see
him. At the interview in Mclnvale's office, Mclnvale
"informed me that he understood that I was trying to form
a union" and, when he asked Mcinvale who told him,
Mclnvale stated that "an individual told him that I was
passing out union cards, and I denied it" and that
Mcinvale then stated if Hunter, "was going to start any
trouble down there, there would be trouble for me, about
forming a union."
Rebecca Gordon, who had been off work because of
illness, returned to the plant on February 12. She was then
summoned into Team Leader Sineath's office. Sineath
asked her if she knew about a forthcoming union meeting
and, when she replied that she did, he stated that he wished
to go to the meeting "to find out their side of it" and also
asked her why employees desired a union, to which she
replied that in her opinion they wanted job security.
During February, employee Tony Fall had two conversa-
tions with Team Leader Riley at his work station. At the
first, he stated that Riley asked him what he thought the
Union could give him that Respondent's present system
could not, and that he replied "by saying I thought two
major things was better benefits and job security." Riley
assertedly stated that in his view the employees had not
given the O.D. System sufficient time to demonstrate what
it could do. At the second meeting, Riley related that at an
establishment near his hometown in Texas, an effort was
made to unionize and the employer stated that in such
event the plant would be closed down.
Union Representative Scalish telephoned Vice President
Clegg on February 18, at Clegg's office in Dallas,
concerning arrangements for the Board election. Scalish
advised Clegg that the Union represented a majority of the
production and maintenance employees in the Sharon
facility, and requested that Respondent recognize the
Union as the exclusive representative on the basis of a card
check. Clegg refused this request and stated that he would
prefer to proceed with the election. On February 18 and 20,
the Union held two meetings at restaurants in the Sharon
area. Employees were notified of these meetings by mail
and, during the course of these meetings, seven additional
authorization cards were obtained. Thus, as of February
20, the Union had signed authorization cards from 28 of
the unit employees at the Sharon facility.
Respondent notified all employees on February 21, by
letter, that they were to receive a 25-cent across-the-board
increase, which increase would be effective on February 23
and would be reflected in the paychecks they received on
March 14. Respondent did not consult with the Union
concerning the granting or implementation of this increase.
Late in February or early in March, Team Leader Riley
conducted a meeting of his production team, and there
inquired concerning the effects of unionization. According
to employee Sandor, Riley asked why the employees
wanted a union, and stated that he felt unions were
unnecessary, and added, so Sandor related, "that if the
Union came in, it would represent the failure of the open
system, or the Sharon system" and Respondent "would
have to reevaluate the plant, solely on economic grounds";
in this connection he stated that the product was produced
at the Dallas plant for 5 cents less per pound and that "the
chances were that there would be layoffs, or some sort of
slowdown, or possibly even a shutdown at Sharon, because
they produced it cheaper in Dallas." Sandor related that he
and Riley had frequent conversations at his work station
from late February until the election, and that the
substance of these was that Riley said there was no need
for a union in Sharon, that more could be accomplished by
other means, that the O.D. System was not being given a
fair chance, and that he felt "that the time was inoppor-
tune, that the Union was the wrong Union, and that we
were taking a big risk."
In his bulletin to employees under date of February 21,
Mclnvale, in announcing the 25-cent-per-hour wage
increase, stated that Respondent's "commitment was to
resolve and announce the wage survey during February"
but that it was not done earlier because the Employee
Relations Department "has to research and prepare our
position so that we can not be accused of an 'Unfair Labor
Practice' in granting this increase during the period prior to
the election." In his letter to employees dated March 4,
Mclnvale stated that there had been "some questions
about overtime in relation to the 12-hour production work
shifts" and reminded employees that Respondent's current
policy was to pay overtime for hours worked "outside the
schedule, for hours worked over 40 in a week, and for the
sixth consecutive workday," while work on a seventh
consecutive workday would be paid at a double-time rate.
He stated that in the event "overtime for over 8 hours in a
day is an issue, then in any future contract, of course, that
would be a negotiable item" but that Respondent would
"then have to reexamine ways of covering a 7-day
continuous schedule to avoid this extra cost of doing
business," and attached an example of one method of
operating "without 12 hour shifts and without daily
overtime." He added that the question of overtime after 8
hours "would certainly be a negotiable issue if you elect to
be represented by a union," but that the "right to schedule
work would remain a management responsibility," and
that the alternative work schedule he attached to his
memorandum might not be liked by employees "as well as
the present system with its three and four day work weeks."
After receiving his copy of the March 4 letter, employee
Sandor had a conversation with Team Leader Riley
concerning the proposed work schedule. Sandor testified
that Riley asked him if he would like to work such a
schedule, to which Sandor replied that he would not.
Sandor related that Riley then said that, if the Union came
in, Sandor "might possibly have to accept such a schedule
761
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
along with other hypothetical things such as a super-
seniority for union officials."
Employee Hunter testified that, during the first week of
March, Plant Manager McInvale approached him concern-
ing his participation in union activities. According to
Hunter, the conversation occurred in the plant near the
sales cage, where Hunter was talking to a group of
employees. Hunter's version is that McInvale said that he
understood Hunter was getting addresses for a union
meeting and that he told McInvale that that was true.
Hunter related that Mclnvale then said that if he heard any
more rumors about Hunter's starting a union "that he
would have my job." Hunter testified that the same day
Team Leader Kettlehut told him that he had heard that
Mclnvale "chewed you out for trying to form a union,"
that he did not reply, and that Kettlehut then added that
Hunter should shut his mouth "about trying to get a union
down here because they are out to get you." Hunter further
related that later in the same week, following a conversa-
tion he had had with a fellow employee, Collenette, in the
cafeteria, he asked Team Leader Riley if he would quit in
the event the Union came in. According to Hunter, Riley
replied that if a union came in then Hunter and Collenette
would be the first to be fired.
Vice President Clegg, in charge of Respondent's labor
relations, came to the Sharon plant on March 4. On that
and the following day he conducted group meetings with
different teams of employees. Other representatives of
management, including Haley and Production Manager
Coffman, were in attendance. Clegg testified at some
length concerning his remarks to the employee groups. He
began by stating that unions were like a business, and that
they had to have money to operate on and were more
interested in the masses than they were in individuals. He
asked them to consider what a union could do for them
and said that it would make promises to them and, if such
did not materialize, it would either accept the situation or
ask the employees to go on strike. In the latter event, the
employees ought to investigate what the union's strike
benefits were and realize that such did not equal wages. He
also stated that it was much easier to get into a union than
to get out, illustrating this by referring to a situation in
Respondent's Denver plant where a decertification petition
had been filed and was still being processed after a period
of 7 months.
He then invited the employees to consider what would
happen if the Union won the forthcoming election. In that
event, Respondent and the Union would bargain and that
wages, hours, and working conditions would be open for
discussion. In that connection, he stated that there was a
possibility that the Union might negotiate a contract that
would do away with the open management system, with
the result that there would be no way the employees could
make proposals for change as they were then permitted to
do. If that occurred, he stated that "then the need for that
plant would have to be evaluated on the need for the
product and the economic basis rather than continue to
keep it open on the basis of an experiment in manage-
ment." He also referred to the fact that the employees had
been told by the Union that there would be no reduction in
benefits, but pointed out that the Union might be wrong in
this respect, and referred to a situation in the Cleveland
plant where Respondent and the Union had negotiated a
reduction in the premium contribution to a pension plan,
transferring the money to wages. This, he stated, adversely
affected retirees and employees about to retire. He also
referred to the fact that at the Sharon plant the employees
were paid on the basis of the skills they had rather than on
the particular job they were doing. However, if a contract
were entered into providing for job classifications, that
would constitute a "very rigid set up" and "would probably
also have a very specific rate for that job classification,"
which would mean that the employee "would be paid for
the job he was doing and not for the job that he could do or
other jobs he could do in this system." The result would be
that some employees might have to take a reduced rate
while others might receive an increase. He also told the
employees that in his experience there had been situations
where the differences between a company and a labor
organization did not particularly affect employees but were
over issues such as a checkoff or union shop or supersen-
iority or extra pay for stewards. In such a situation, he said,
employees might have to go on strike in order to obtain the
Union's objective, "even though the employees themselves
may not have had any specific interest," and he suggested
that the employees should "take a look at the Union
treasury." He then compared benefits achieved by the
Union in the Cleveland area with those then existing at the
Sharon plant, concluding that in all respects except in the
area of overtime the Sharon plant's benefits were equal to
or better than the benefits provided in the Union's
contract. He said that Respondent's operations provided
for 12-hour shifts and overtime thereafter; the customary
provision in union agreements provided for overtime after
8 hours and, if the Union were successful and achieved an
overtime after 8 hours clause in an agreement, the
Company "would then review the method of operating the
plant in order to determine how they could save making
overtime and, in all probability, would change our method
of operation so that the hours would be eight hour shifts
rather than twelve hour shifts." In this connection, he
pointed out that some employees were happy with the 12-
hour shift arrangement but that others would rather have a
40-hour workweek. Hc told the employees that if they
voted for the Union "they were gambling" because the
Union "didn't know anything about the food industry,"
and they would be asking an inexperienced organization to
represent them in dealing with Respondent which, so he
stated, was "very successful in the food industry." He
testified that he also pointed out that Respondent's interest
and the employees' interests were the same, namely, "the
success of the product, manufacturing a quality product,"
and that Respondent had endeavored to treat employees as
individuals "with responsibility [for] working out our own
problems on a friendly basis, pleasant working conditions,
no picket lines, no assessments or fees, nothing like that."
He concluded by stating that if they liked such conditions
their opportunity would come at the election and he urged
them to vote against union representation "based on the
fact that it was going to be much easier to stay out of the
Union than it was to get out of the Union if they had once
gotten in."
762
FRITO-LAY, INC.
Clegg returned to the Sharon plant on March 17. Prior
thereto, literature prepared under his supervision was
distributed to employees, including a letter comparing the
Union's pension plan with Respondent's and another
comparing Respondent's health and welfare plan with the
Union's plan. Respondent also reproduced and circulated
the Union's report filed with the Bureau of Labor
Management Reports of the United States Department of
Labor, with side comments such as noting that the cash the
Union had on hand at the close of the year 1973 "will only
last the Sharon employees 5 weeks in a strike if they give
you $99 a week." In addition, a small booklet was
distributed at the close of the March 17 meeting, by Hailey,
entitled "What The Union Can Do For You" which, on the
inside, contained blank pages. This booklet, so Clegg
testified, "caused some fury."
A number of employees testified concerning what was
said by management representatives at the group meetings.
Sandor, as well as other employees who were members of
the group teams of Team Leaders Riley and Kettlehut,
attended a meeting conducted by Clegg. According to
Sandor, Clegg "said that the Teamsters had been responsi-
ble for threats and violence and vandalism, in the past,"
and that he had no reason to believe that this was not
possible in Sharon. Sandor also stated that Clegg said that
if a union came in, it would represent a failure of the O.D.
experiment. Hunter testified that Clegg said the Union had
nothing to offer the employees, all it could do was strike
and take the employees' money. He also testified that if the
employees threw the O.D. system out Respondent "could
shut the plant down and make munchos in Texas, because
it was cheaper to make them there, than it was here."
Hunter also testified that Clegg "said if a union does come
in, and when it comes time to negotiate, the plant will be
shut down" and that during that period the employees
would not be able to receive unemployment compensation
"because we're not really laid off." Employee Klingensmith
testified that Clegg said that he did not like unions and that
he did not know whether the Union "was legally able to
represent us because of the fact that we weren't in the dry
cleaning business or anything like that." In addition,
Klingensmith said that Clegg told the employees that the
Sharon plant was experimental and that if the Union came
in "there might be a change, that we might even go to
Texas because they can make their product cheaper down
there. I think he quoted a nickel cheaper to make it in
Texas." Klingensmith further related that approximately 2
weeks before the election he accepted a ride with
Production Manager Kaufman, inasmuch as his car was
broken down. During the course of the ride, so Klingen-
smith related, Kaufman spoke about the upcoming election
and said "that if the Union comes in, we could lose
freedom such as magazines on the job and getting your
coffee and everything at break, only if our work was done
and done right," adding that those freedoms "would be out
the door if the Union come in."
On a number of occasions between March 7 and 14,
Plant Manager Mclnvale held meetings with the group
teams, at each discussing the importance of the Open
Management System. Admittedly he told the employees
that the open system was "extremely important," that
employment at the Sharon plant "had been extremely
stable, that people had not been laid off even though
production levels did not necessarily justify keeping all
employees on the payroll at all times," and that Respon-
dent was "very desirous of continuing our work on the
open system, and that we didn't want to lose it through any
device." Mclnvale denied that at any of the meetings he
said that if the Union won the election the open
management would be gone; to the contrary, so he
testified, he was asked that question by employees and
responded by stating "that I had worked in an environment
where . . . the Union existed in an open system environ-
ment for several years and to my viewpoint, whether or not
the open system ceased to exist would depend on the
parties." Mclnvale stated that Respondent urged employ-
ees to attend union meetings in order to ascertain all the
facts, but denied that he ever asked any employee to report
back to him concerning what happened at a union meeting,
although "employees at times would volunteer what
happened" but that he "never asked an employee to tell me
what happened." During the course of the election
campaign Mclnvale had distributed to management team
members some eight position papers for their use during
the campaign.
On March 17, Mclnvale spoke to all employees, who
were required to attend that meeting and were paid
therefor. He read a speech he had prepared in conjunction
with Clegg. In it, he stated that the open system "puts a
premium on people working together to solve problems.
Involving a third party will make this process more time-
consuming, will make systems more inflexible and some-
thing that's really significant - will leave you out." He also
referred to the fact that under the prevailing system
employees "have considerable freedom" to schedule their
own rest periods as well as other privileges, and said that if
they had "a third party arrangement, then those privileges
may not be the plant's prerogative to grant." He referred to
the fact that during the campaign Respondent had placed
much information before the employees and inquired
whether the Union had "just made unproven statements"
and said that its "main tactic seems to lie in making you
believe that the Company is against you - that we would
lie and cheat you." He said that he did not understand
"how some complete stranger can come in and convince
you to risk losing the system that is the reason for Frito-
Lay operating this plant" and inquired what led the
employees to accept that risk which, according to him,
involved strikes, layoffs, and other disadvantages. He
referred to the importance of the open system and said that
the Union would "stifle direct problem solving between
us," and that, in effect, "some outsider will be telling you
and I what we can do and what we can't. Do you really
think that the idea of a business agent is compatible with
the open system? I sure don't! I think that anyone who
believes that we can keep the open system and have some
Union in the plant is just dreaming. I don't think that
you've thought it through if you really buy that."
As we have seen, the Union lost the election held on
March 18 and 19 by vote of 22 to 17. Thereafter, it filed
objections to the election and the charges in the instant
case, which in due course were consolidated by the
763
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Regional Director for purposes of hearing. In its objec-
tions, filed March 24, the Union alleged that Respondent's
unlawful course of conduct, in substance paralleling the
allegations contained in the charge and the complaint,
destroyed the union majority status. McInvale left for
vacation on April 18 and, shortly before his departure, he
had a telephone conversation with one of his superiors, Ed
Walsh, from Dallas headquarters, in which Walsh asked
about McInvale's vacation itinerary and where the latter
could be reached. The following Monday, April 21, so
Mclnvale testified, Walsh called him and "informed me
that all avenues of increased demand had been explored
and found lacking and the decision had been made by Mr.
Kickham to close the plant." In addition, Walsh told
McInvale that immediately upon his return from vacation
he should prepare "an action plan for an orderly closure
and termination of the Company's business in the Sharon
facility." McInvale returned from vacation on April 28 and
then met with his management staff. Steps were taken to
immediately terminate all inbound orders for raw materi-
als, parts, and supplies and formulate a plan as to how long
it would take to close the Sharon plant in an orderly
manner. McInvale transmitted these data to headquarters
in Dallas. On that date he advised only the plant engineer
and the administrative manager of these determinations
and later on the team leaders were informed. The hourly
employees were advised of the decision to close the plant
on May 14, according to Mclnvale.5 Some days later,
Hunter and Team Leader Kettlehut had a conversation in
the plant concerning the shutdown. According to Hunter,
he said that it was a shame that the plant was being closed,
to which Kettlehut replied he agreed and that "that's what
it is to try to get a union in a non-union shop."
About June 1, the Sharon plant stopped all Muncho
pellet production operations; however, it continued to be
used as a sales and distribution center, but none of the
employees previously employed in production operations
were thereafter employed in the sales or distribution
operations. Respondent did not notify the Union of its
decision to close the plant and no discussions were held
with it regarding the decision to stop production or transfer
the production to the Dallas plant. Moreover, Respondent
had no discussions with the Union concerning the effects
on employees of the closing of the Sharon plant or the
transfer of production to the unorganized Dallas plant.
C. The Alleged Refijsal To Bargain and
Discrimination
1. Unit and majority
There is no dispute that the following constitutes an
appropriate unit for the purposes of collective bargaining
within the meaning of Section 9(b) of the Act:
All formulation employees, processing employees,
packaging employees, maintenance employees, support
employees, shipping and receiving employees and plant
I In his brief" counsel for the Cieneral Counsel states that Respondent
"notified the employvees by letter" on May 14 "which was posted on the
bulletin board that the plant was going to shut down." Ile cites Resp. Fxh.
25 as being the letter. However, Resp Fxh 25 is a letter dated March 17
clerical employees employed at the Employer's West
Middlesex, Pennsylvania, location; excluding all office
clerical employees, salesmen, drivers and professional
employees, guards and supervisors as defined in the
Act.
As set forth above, the results of the election on March 18
and 19 reveal that, of approximately 40 eligible voters, the
Union received 17 votes while 22 votes were cast against it.
Between February 2 and 6, as related above, it appears that
21 of the production and maintenance employees had
signed union authorization cards and the Union, on
February 7, demanded that Respondent recognize it as the
collective-bargaining representative for the employees in
the foregoing unit. Respondent refused this request and,
during the course of the hearing, took the position that the
Union did not represent a majority. In his brief, counsel for
Respondent asserts that the total of "28 purported
authorization cards" which the Union had as of February
20, were defective for several reasons. First, it is claimed
that "all cards allegedly authenticated by witnesses Scalish
and Sandor should not be admitted into evidence because
the testimony of the witnesses was contradictory . . . as
well as that of employee Feltovich, that the testimony of
neither witness was credible and certainly could not be
accepted as a basis for authenticating authorization cards."
Without citing references to the transcript, counsel for
Respondent states that (a) Scalish testified that Sandor
signed his card at the Depot Restaurant in Sharon, while
Sandor stated he signed at the New Villa Restaurant in
Ferrell, Pennsylvania; (b) Scalish testified that on February
3, employees Bedell, Sandor, and Feltovich signed cards at
the Depot Restaurant, whereas Sandor stated he did not
sign at the Depot but that the only person who did sign on
that day was Bedell; and (c) Scalish testified that Feltovich,
Sandor, Bedell, Collenette, and he were at the Depot
Restaurant on February 3, but states that Sandor testified
that only Bedell, Scalish, and himself were there. In
addition, counsel for Respondent objected to the admis-
sion of any cards which Hunter undertook to authenticate,
on the ground that Hunter's "entire testimony is incredi-
ble." It becomes necessary, therefore, to examine carefully
the record evidence relating to the authorization cards and
their authenticity.
Scalish, the business representative for the Union and
international vice president, as has been previously related,
was active in the organizational campaign. He related that
the first meeting with employees was held on February 2, at
a restaurant, which he did not identify, in Sharon and that
the employees in attendance at that meeting were Hunter,
Svarny, Daniel Sump, and Collenette. On that occasion he
obtained signatures on four authorization cards from these
employees and, during the course of the hearing, testified
that the cards were signed in his presence by the
individuals whose names appear thereon. When counsel for
the General Counsel moved that these cards be received in
evidence, counsel for Respondent had no objection. The
next meeting was on February 3, again at a Sharon
from Vice President Clegg to employees in which he pledged "that no
employees of the Sharon plant will be disciplined in any way because of his
union or non-union beliefs or actions. The only reason for disciplinary
action is ifan employee violates an established work rule."
764
FRITO-LAY, INC.
restaurant not identified. According to Scalish, employees
Sandor, Collenette, Feltovich, and Bedell were present.
Scalish testified that employees Sandor, Bedell, and
Feltovich signed authorization cards at that meeting and
Scalish testified that he was present when these cards were
signed bearing the date of February 3. At the close of the
hearing day on November 12, counsel for Respondent
objected to the receipt in evidence of the authorization
cards and I stated on the record that I would withhold my
ruling until the following morning and, with the agreement
of counsel, I was permitted to take them for the evening in
order to examine them. The following morning I returned
the authorization cards to counsel for the General Counsel,
I stated that the cards that I had examined were all time-
stamped by the Board and that the signatures appeared to
be genuine and authentic, and I expressed the view that the
cards were authentic. Counsel for Respondent thereupon
stated that he objected to any cards not authenticated by
the individual whose name appeared on the card to the
effect that he in fact signed the card. In addition, he
objected to any cards purportedly identified by Scalish
because, in his view, there was "substantial reason to doubt
the credibility of that witness with respect to the issue of
authenticating cards." On substantially the same basis,
counsel objected to the admission into evidence of any
cards purportedly authenticated by Sandor, Hunter, and
Collenette. I told counsel for Respondent at this point that
he was free to produce evidence reflecting upon the
credibility of the foregoing persons concerning their
testimony with respect to the authorization cards and I
received the cards at that point but stated that my receipt
of them into evidence in no way precluded counsel for
Respondent from producing evidence of the sort he had
indicated and that my then decision to receive the cards
was not irrevocable.
Sandor testified that he signed an authorization card on
February 3, at the New Villa Restaurant in Ferrell and that
he personally solicited the signatures on authorization
cards of employees Feltovich, Fall, Klingensmith, James
Knox, Pearl Askerneese. and Bedell. He related that
Feltovich signed his card on February 3, at the New Villa
Restaurant as did employee Fall. Sandor also testified that
another meeting of the Union was conducted on the same
date at the Depot Restaurant, which he attended. At that
meeting, according to Sandor, Bedell and Scalish were
present and Bedell signed his authorization card. Sandor
also testified that he obtained a signed card from employee
James Knox on Feburary 5, in the locker room at the plant.
He further related that Askerneese signed her card at the
Depot Restaurant on February 5. In addition, he testified
that Klingensmith signed his card on February 6, in the
plant.
Upon all the evidence, I conclude that the authorization
cards proffered by counsel for the General Counsel are
authentic and that they establish that, as of February 7, the
Union did in fact represent a majority of the employees in
the appropriate unit.
2. The refusal
There is no dispute, as has been related previously, that
Respondent refused to recognize the Union on February 7,
when it demanded recognition and collective bargaining.
Nor is there any dispute that Respondent initiated and
implemented a wage increase without notifying the Union
thereof or offering to discuss that matter with it; nor is
there any controversy concerning the fact, as more fully
developed in the succeeding section of this decision, that
Respondent closed the Sharon facility without discussing
that matter or the effects of the closing on employees with
the Union.
3. The closing of the Sharon plant
Plant Manager Mclnvale, on May 14, informed the
hourly employees at the Sharon facility that Respondent
would shut down that plant on approximately June I; the
plant did in fact cease operations on or about that date,
and by that time all of the production employees had been
terminated. Thereafter, Respondent transferred its unit
work to the Dallas plant, which, as has been related, was
unorganized.
Shortly before the Sharon plant was closed the Dallas
facility was operating less than two of its three production
lines on the manufacture of Muncho pellets. According to
Wheless, Respondent's director of industrial engineering,
the closing of the Sharon plant involved some increase in
production at the Dallas plant, and he also testified that if
the Dallas plant did not increase production Respondent
could not have met its overall demand for Munchos. There
is no dispute that after the Sharon plant was closed the
Dallas plant ran all three of its production lines in
producing Muncho pellets and that, while the Sharon
facility had only one production line and that before it
closed the Dallas facility was operating less than two of its
lines on Muncho pellet production, it is evident that
Respondent increased the production of the Dallas plant to
a full three lines when it transferred the work done at
Sharon to Dallas.
It is the position of counsel for the General Counsel, as
set forth in his brief, that the economic defense put forward
by Respondent is pretextual and that the true motive for
the closing of the Sharon plant was the advent of the
Union. He asserts that the sales forecasts relating to the
nationwide demand for Munchos, in particular during the
first quarter of 1975, are not borne out by the evidence.
Indeed, counsel for the General Counsel states that the
advent of the Union "so threatened its [Respondent's]
innovative Open Management System that it caused
Respondent, without any economic justification, to aban-
don the system, the plant and its employees"; he notes that
the institution of this system was "the most important
factor in the existence of the Sharon plant" and was the
facility's "primary mission," as Mclnvale testified, and that
Respondent had expended some $200,000 in designing it. It
becomes necessary, therefore, to examine closely Respon-
dent's contention that economic reasons accounted for the
closing of the Sharon plant.
Mclnvale testified that the cost of opening the Sharon
facility involved an investment of between $3.5 and $4
million. In connection with the establishment of wage rates
for employees at the Sharon plant, two members of the
employee relations department from Dallas, in February or
March 1974, came to Sharon and stayed there for several
765
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
days, making a survey of community wage scales. Accord-
ing to McInvale, it was ascertained that the great majority
of the work force in the area worked under the basic steel
contract, which was coming up for negotiations during the
summer of 1974 and, so he related, Respondent endeav-
ored to project what effect that would have on the wage
rates for Respondent's Sharon employees.
Counsel for Respondent contends that the decision to
close the Sharon facility "was mandated by economic
conditions" and that the decision "on whether to continue
to operate a facility at a loss, when those losses could be
substantially reduced by closing the plant, was a funda-
mental decision as to the direction of the Company's
corporate operations." In consequence, he argues that
there was no duty to bargain with the Union with respect
to the decision to close the Sharon plant even if Respon-
dent had been under a general duty to bargain with the
Union.
On the other hand, counsel for the General Counsel
contends that the "prospect of unionization" opened the
eyes of the Sharon plant employees to the defects of the
Open Management System and that Respondent "realized
that because of its numerous unfair labor practices prior to
the election and the Union's pending Objections to the
Election, that the probability existed that through the
Board's processes the Sharon plant would eventually
become unionized." As a result of this, he contends,
Respondent shifted its standard for evaluating the opera-
tion of the Sharon facility "from one based on establishing
a successful Open Management System to one based
strictly on economic considerations."
D. Discussion and Concluding Findings
In my view, a threshhold issue to be resolved is the
credibility of Hunter. As previously noted, counsel for
Respondent, in his brief, makes a rather detailed attack on
the veracity of Hunter. Counsel for the General Counsel, in
his reply brief, makes a painstaking analysis of this issue. In
consequence, I have found it necessary to go through the
record as carefully as possible and analyze the contentions
made by able counsel on both sides of the question.
At the outset, I must observe that my impression of
Hunter as he testified was favorable. It seemed to me that
he responded to questions, whether on direct or cross-
examination, in a direct and forthright manner. Upon a
review of his testimony, particularly in the light of the
attack made upon it by counsel for Respondent, I am led to
conclude that a number of incidents that he testified, from
his recollection, occurred in March, in fact had occurred in
February. Thus, counsel for the General Counsel notes that
"Hunter's faculty for recall of dates may have been faulty
and that the unlawful activities in fact occurred during the
second or third week of February 1975." While realizing
that dates may be crucial, counsel for the General Counsel
submits that the fact that Respondent engaged in unlawful
activity "is more crucial," and thus suggests that the
appropriate conclusion to draw is that unlawful activity of
Respondent did in fact occur and that the recollection of
Hunter with respect to dates was faulty. In support,
counsel for the General Counsel cites certain pages of the
transcript where Hunter testified that the unlawful activity
occurred on either a Thursday or a Friday while he was
working in the shipping and receiving department under
the supervision of Team Leader Sineath. As pointed out by
counsel for the General Counsel, an examination of
relevant exhibits shows that from the week ending
February I to the week ending February 15, Hunter was
employed in the shipping and receiving department under
Sineath's supervision and that, in addition, they show that
the work schedule of Hunter consisted of 8-hour shifts
from 8 a.m. to 4:30 p.m., Monday through Friday.
Moreover, he also points out that Hunter's timecard for the
week ending February 22 shows that from Monday
through Thursday he was still employed in the shipping
and receiving department and that, on February 22, a
Saturday, he was transferred to the production department
under the supervision of Team Leader Pitts and that he
worked in that department on an early week shift. In view
of these facts, counsel for the General Counsel suggests,
while acknowledging that Hunter had a faulty recall about
dates, that the record evidence supports his testimony
concerning the occurrence of Respondent's actions viola-
tive of the Act, and that there is therefore no solid basis for
discrediting his testimony.
As I have said, Hunter impressed me favorably. Upon a
careful review of his testimony, the objective facts, and the
relevant exhibits, I credit his testimony.
Counsel for the General Counsel asserts that Respondent
engaged in an intensive campaign to thwart the desires of
employees concerning union representation and, in sup-
port, refers to eight separate instances of interrogation,
threats of reprisals if the employees selected the Union,
threats of plant closure, warnings that strikes would occur
if they selected the Union, statements that it would be
futile for them to select the Union, creating the impression
of surveillance of employee union activity, threatening
them with discharge and/or layoff if they chose the Union,
suggesting that they select another labor organization as
their representative, threatening them with loss of wages
and the implementation of more onerous working condi-
tions if they chose the Union, and granting and implement-
ing a wage increase to all employees on February 21.
Team Leader Riley denied that he had a conversation
with employee Collenette, on February 4, in the presence
of Team Leader Kettlehut, concerning his knowledge of
the Union. Indeed, Riley testified that he was not "even
aware that there was a union in the plant"; however, he
admitted conversing with Collenette about the Union and
its benefits. In view of the active solicitation of union
authorization cards at the plant and in the parking lot on
February 3 and 4, it seems rather odd that Riley was
unaware of any union activity until the Union demanded
recognition on February 7. Team Leader Kettlehut denied
that he had a conversation with Collenette concerning the
Union on February 4 or 5. However, he acknowledged that
he and Riley would walk through the plant frequently and
that on one occasion Collenette stopped him and asked
what the issues in the union campaign were; he testified
that he replied that the issues were benefits, wages, and the
12-hour day working schedule. Kettlehut also related that
on one occasion Collenette said that if the employees did
not get what they wanted through bargaining they could go
766
FRITO-LAY, INC.
on strike. With respect to the alleged questioning of
employees Fall and Sandor, Riley admitted that he did
have conversations with both employees during the
relevant period and that he told them that if the Union did
come in "everything would be bargained for and if the
open management system was bargained out, that the plant
could be evaluated on an economic basis." He also testified
that he gave his opinion concerning the Open Management
System and inquired "what a union could give that the
open management wasn't or could not."
The testimony of employee Klingensmith is that Team
Leader Riley, shortly before the election, told him that if
the Union came in the employees would run the risk of
losing wages because, by law, Respondent was only
required to pay the minimum wage; Riley added that he
did not see why the employees needed the Union to speak
on their behalf with Respondent. Sineath, a team leader,
recalled that he had a meeting with employee Gordon
when she returned to work in February after having been
off due to illness. As has been related above, he inquired
what reasons the employees had for desiring a union and
she replied that in her view it was a matter of job security.
So far as appears, he did not deny questioning Gordon on
that occasion. It also appears that, while Team Leader
Sineath denied that he told Hunter to return to Sharon
Steel, he did have a conversation with Hunter, sometime in
September or October, as he and Hunter were engaged in a
discussion of benefits, in which he told Hunter that if he
did not like the benefits at Respondent's plant, he could go
back to Sharon Steel. Counsel for the General Counsel
contends that these undenied acts of interrogation were
violative of Section 8(a)(l) of the Act.
Team Leader Pitts admittedly had a conversation with
employee Cooke about the middle of March but denied
that he had questioned Cooke about the Union. However,
in an affidavit submitted to the Board during the course of
its investigation, he stated that he had heard that some of
the employees desired a union and he wondered what
problems had caused them to do so and that he was
"particularly anxious to find out if there was something
wrong with me or with the system."
In his brief, counsel for Respondent contends that
Respondent at all times acted within the bounds of the law
and did not commit "serious and substantial violations" of
Section 8(a)(1) of the Act, as alleged. He asserts that, with
respect to testimony concerning threats of plant closure,
allegedly contained in the March 17 speech of Clegg, a
considerable amount of the former employees' testimony
concerning this meeting "is unclear" and that a review of
Clegg's testimony, particularly inasmuch as he spoke from
notes from which he did not deviate, "reveals that nothing
objectionable was contained" in that speech. Concerning
the meetings with teams of employees that Clegg conduct-
ed early in March, counsel asserts that the testimony of
witnesses produced by the government "is confused and
conflicting, whereas Clegg's is clear and definite." Counsel
for Respondent suggests that the version given by Clegg
should be credited inasmuch as there is no question that he
used written material in making his comments concerning
plant closure and, furthermore, that "it seems incredible
that a man with Clegg's experience and expertise in NLRB
elections would so blatantly transgress well-known and
established election guidelines as some of the wilder
testimony by General Counsel's witnesses would have one
believe."
Concerning the remarks made by Plant Manager
Mclnvale at the March 17 meeting, Respondent's counsel
states that it is not "even clear whether any of the
testimony of the General Counsel's witnesses even suggests
that what McInvale is alleged to have said violates the
Act"; but, in any case, he points out that it is uncontradict-
ed that McInvale read verbatim from a text during that
meeting and that he did not say that a union victory in the
election would represent a failure in the Open Management
System.
Counsel for the General Counsel also contends that
Respondent threatened employees that strikes would be
inevitable if they selected the Union as their collective-
bargaining representative and, in this connection, refers to
team meetings conducted by Clegg on March 3 and 4, in
which Clegg assertedly told employees that the Union had
been responsible for threats, violence, and vandalism in
prior years and stated, according to employee Sandor, that
Respondent had no reason to believe that such was not
possible in Sharon; in making his remarks, Clegg allegedly
referred to Scalish as "Frank Scallywag." Moreover, as
Hunter testified, Clegg stated that if a union did come in
and undertook to negotiate, the plant would be shut down
and negotiations could last from 30 to 90 days and, during
that period, the employees would not be able to receive
unemployment compensation because they would not be in
the status of laid-off employees and, "the only thing we
could get was food stamps." About March 7, Team
Leaders Riley and Kettlehut spoke with Collenette at the
latter's work station, during the course of which they
showed him some newspaper articles relating to strikes,
and stated that if the Union did come in and if in
negotiations with officials of Respondent "could not come
to some agreement on contract terms, there would be a
long strike" with the possibility of children starving. Both
Riley and Kettlehut admitted talking to Collenette about
strikes; Kettlehut denied he used the term "long" strikes.
Counsel for the General Counsel contends that the
foregoing statements, considered in light of other conduct
engaged in by Respondent, "represent unlawful threats
that strikes would be inevitable as a result of unionization."
He further argues that Respondent, in its efforts to defeat
the Union, "engaged in a counter campaign replete with
unfair labor practices and that the threats of strikes should
be viewed as part of Respondent's violative patterned
course of conduct."
On another aspect, counsel for the Government contends
that Respondent warned employees that it would be futile
for some to select a union as their collective-bargaining
representative. In this respect he refers to conversations
that Team Leader Riley had with employee Sandor from
early March until near the election, to the effect that a
union was not needed at the Sharon plant and that more
could be accomplished by means of other proposals. Riley
told his team early in March that in the Sharon plant
unions were unnecessary, a remark that Riley did not deny.
During the meetings he conducted on March 3 and 4,
767
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Clegg told employees that "the only value of a union was
that it called for dances" and that the Union could offer
them nothing but strikes and taking their money.
During the course of their speeches prior to the election,
Mclnvale and Clegg spoke about the futility of unioniza-
tion. According to the text of Mclnvale's prepared speech,
he told the employees that the "only thing that matters to
them is your dues. Whether you work or not, or how often
means nothing to them." In addition, he asked employees
why they would be willing to risk everything they then
enjoyed for an organization that took the position that any
matter in controversy was negotiable. In this respect, he
stated that this would be "like betting your grocery money
on a long shot at the race track. It may be thrilling, but it
sure isn't likely to be profitable."
To summarize, I am persuaded that Respondent did in
fact violate Section 8(a)(1) of the Act substantially in the
respects alleged in the General Counsel's complaint, and
that it also violated Section 8(a)(3) and (5) of the Act in
closing the Sharon plant and terminating all unit employ-
ees. More specifically, on a number of occasions supervi-
sors questioned various employees between February 4 and
March 17, the day before the Board election, as has been
previously related. Moreover, Respondent threatened
employees with reprisals if they selected the Union as their
collective-bargaining representative, as evidenced by
Mclnvale's statement to Hunter that if he heard any
further rumors to the effect that Hunter was attempting to
start a union, he would be in trouble. Late in February
Team Leaders Kettlehut and Riley told Collenette that he
should think twice about choosing a union since the
benefits that the employees then received were good; early
in March, Riley told Sandor that if the Union came into
the plant, that circumstance would represent a failure of
the open system and, in that event, Respondent would have
to reevaluate the plant solely on economic grounds. Clegg
made substantially the same statement on a number of
occasions at employee meetings on March 3 and 4.
It is the contention of counsel for the General Counsel
that Respondent undertook to implement the Open
Management System at Sharon with the realization that
during the initial phases of its existence the Sharon plant
would operate at a loss. In the light of this, he argues that it
is totally unwarranted for Respondent to rely on this
anticipated poor economic position as a reason for
threatening to cease production at the Sharon facility. He
argues that Respondent's threat to discontinue the Open
Management System, with resultant loss in wages, benefits
and jobs, "was due solely to the employees' union
activities." Counsel also refers to the remark made by
McInvale to Hunter, during the first week in March, to the
effect that Hunter had been previously warned about
trying to start a union and that, when Hunter told
McInvale that he could not be fired for obtaining employee
addresses for a union meeting to hear arguments for and
against forming a union, Mclnvale stated, as Hunter
testified, "you'd be surprised at what I can do." On the
same day Supervisor Kettlehut told Hunter that he had
heard about Hunter being reprimanded and suggested that
Hunter keep his mouth shut "about trying to get a union
down here because they're out to get you." These incidents,
according to counsel for the General Counsel, constitute
threats of reprisals and, accordingly, were violative of
Section 8(a)(1) of the Act.
Counsel also refers to threats that the plant would be
closed if the Union were selected by the employees as their
representative, and in this connection points to statements
made by Supervisor Riley to employee Sandor, statements
made by Supervisors Riley and Kettlehut in mid-March to
Collenette, conversations Riley had with employees Fall
and Sandor during March concerning a cotton mill in
Texas, Clegg's statements during the team meetings on
March 3 and 4 to the effect that if the Union came in that
circumstance would represent a failure of the O.D. System
and that, if the employees rejected the O.D. System,
Respondent could close the Sharon plant and continue to
produce Munchos at the Dallas plant where production
costs were less; he also refers to the remarks made by
Mclnvale to Supervisor Riley's team on or about March
14, to the same effect as the comments made by Clegg on
March 3 and 4 and, finally, the substantially similar
remarks allegedly made by Mclnvale and Clegg during
their presentations on March 17.
It is the position of counsel for Respondent that the
determination to close the Sharon plant was motivated
solely by economic considerations and that counsel for the
General Counsel has failed to prove either that Respondent
closed the Sharon plant in order to chill unionism in its
other plants or that the closing of the Sharon facility would
have that effect, citing Darlington Manufacturing Co., et al.,
380 U.S. 263 (1965). He argues that the decision to open
the Sharon facility was made "solely because the Compa-
ny's internal data forecasted a critical shortage in the
manufacturing capacity to make Muncho pellets." How-
ever, he states new data that came to hand before the plant
actually began production indicated that the Sharon
facility might not be required in Respondent's operation;
however, he suggests that the opening of the plant
"proceeded as planned because of the enormous financial
expenditures already made by the Company in connection
with modifying the plant and employing management for
it." He claims that from the time the plant opened
Respondent's engineering experts "were dubious about its
necessity and apprehensive about the effect of that facility
upon the Company's other plants."
Mark Wheless, Respondent's director for industrial
engineering, testified in some detail concerning the consid-
erations that led to the closing of the Sharon facility. Under
date of January 15, Steve Johnson, an industrial engineer,
wrote a memorandum to Dave Stanley, who was in the
facility engineering group of the engineering department,
stating that in connection with their telephone conversa-
tion of the preceding day he would need certain informa-
tion "to complete a study of shutdown economics of the
Sharon Company, Pennsylvania pellet plant," and pro-
ceeded to list the data needed. Under date of January 23,
Johnson wrote to Jim O'Neal, a director of distribution for
Respondent. In that memorandum, Johnson stated that in
evaluating "the most recent poundage forecasts of total
pellet requirement, and alternative operating economics,
the 'mothball' of the Sharon, Pennsylvania pellet plant is
desirable," pointing out that the net potential savings from
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FRITO-LAY, INC.
closing the Sharon facility during the first year "is
approximately $258,000, with subsequent savings about
$280,000 per year." He also stated that the most recent
Muncho and Bakonip forecasts "show no increases in
pounds from 1975 to 1979" and that this static forecast
"implies that abandonment or selling of the operation is
feasible"; however, he recommended that Respondent
"hold the Sharon operation in the mothball state" and gave
reasons for that, namely that the forecast was "very close to
the current operational capacity" of the Dallas plant,
unforecasted sales changes "could force us to re-open
Sharon," and there were sales routes "currently operating
out of the Sharon facility." However, he stated that a
reevaluation concerning the selling opportunity of Sharon
should be "pursued if any of the following conditions
developed, namely, if sales of Munchos or Bakonips did
not increase, the utilization of new technology at the Dallas
plant were feasible and resulted in poundage increases, and
if new or alternative uses for the Sharon facility could not
be envisioned."
Under date of February 11, Wheless wrote to Kickham,
Respondent's senior vice president of manufacturing,
stating that, as they had discussed that day, "a decision was
made to keep the Sharon. Pennsylvania facility open for
the near future," noting that while the "five-year sales
forecast specifies no growth" for Munchos, Respondent
was "experiencing a 6% poundage increase over 1974
through Week 1, Period 2 of 1975" and, if this rate of
growth continued, "Sharon will be needed to accommodate
it." In a memorandum to Kickham dated March 27,
Wheless again reviewed pellet production facilities and
stated that, without "significant new volume, closing
Sharon can be justified" and that, if "this new volume
cannot be achieved, total contribution can be maximized
by closing Sharon" and limiting volume to the capacity of
the Dallas plant. Under date of March 31, Frank Peck, the
senior vice president for sales and marketing, wrote to
Kickham confirming their conversation of March 17,
stating that the "best outlook at present for the following
on an annualized basis" was that the dollar volume of
regular Munchos would be, in thousands of dollars, 28.5,
for Bakon snacks, 5.7, and zero for a possible new product.
Under date of April 11, E. F. Walsh, who functioned as
an employee relations adviser to the manufacturing
department, wrote to Kickham enclosing "all the pertinent
data regarding the economics for closing down Sharon,"
stating that the "key factor" was the fact that all Muncho
pellet production could be handled by the Dallas plant. He
also enclosed a plan for placement of Sharon management
personnel, and noted that since all hourly employees were
hired at the same time the preceding year they would "all
receive the same severance arrangements" and, because "of
their time with the Company no Sharon employee has any
vested retirement benefits." Wheless testified that the April
I 1 document was in response to Kickham's request made
sometime between March 27 and April 10, to develop a
plan to close the Sharon facility, and that, at the time he
made his recommendation to close the Sharon facility, he
was not aware that a union had sought or was seeking
recognition.
Kickham testified that he decided to close the Sharon
facility in April. Asked whether the effort at unionizing the
facility was a factor in reaching that decision, Kickham
replied, "No, it couldn't be, other than the fact that they
elected for Frito-Lay, but the plant had to be closed on an
economic basis, I had no choice, I couldn't stop it, I had to
do it."
Upon a careful review of the record, I am persuaded that
Respondent, before the Union's organizational efforts were
well underway, came to the tentative conclusion that the
Sharon facility should be closed. Factors leading me to this
view include: (a) the detailed evaluations made by the
concerned officials of Respondent beginning early in the
year; (b) the unanticipated decline in Respondent's sales
forecast of demand for Munchos; and (c) the resultant
losses being incurred and anticipated to be incurred at the
Sharon facility, in contrast to the lower cost of production
at the Dallas plant and the fact that the latter facility had
ample production capacity.
Inasmuch as the unfair labor practice findings made
above, in substantial part, relate to the conduct of
Respondent in connection with the March 18 and 19
election, it follows that the objections filed with respect
thereto are sustained. In his brief, counsel for the General
Counsel requests that I recommend that the election be set
aside. Of course, it is clear that the election was a nullity,
but it seems to me that it would be superfluous for me to
recommend that it be set aside, particularly in view of the
findings and recommendations I have made.
Upon the basis of the foregoing findings of fact and upon
the entire record in the case, I make the following:
CONCLUSIONS OF LAW
1. Frito-Lay, Inc., is an employer engaged in commerce
within the meaning of Section 2(6) and (7) of the Act and
International Brotherhood of Teamsters, Chauffeurs,
Warehousemen and Helpers of America, Laundry, Dry
Cleaning and Dye House Workers' International Union,
Local No. 1, is a labor organization within the meaning of
Section 2(5) of the Act.
2. By questioning employees about their union sympa-
thies and activities, threatening them with reprisals and
more onerous working conditions if they selected the
Union as their representative, and stating that if the Union
came into the Sharon plant that facility would have to be
evaluated solely on economic grounds, without regard to
continuing to operate it in part as a demonstration project
for the Open Management System, Respondent violated
Section 8(a)(1) of the Act.
3. By granting unit employees a wage increase on
February 21, 1975, effective February 23, without bargain-
ing on this matter with the Union, Respondent violated
Section 8(a)(3) and (1) of the Act.
4. By closing the Sharon plant and terminating all unit
employees on or about June 1, 1975, without bargaining
with the Union concerning the closing and its effects on
said employees, Respondent violated Section 8(a)(3), (5),
and (I) of the Act.
5. The aforesaid unfair labor practices are unfair labor
practices affecting commerce within the meaning of
Section 2(6) and (7) of the Act.
769
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
111. THE EFFECT OF THE UNFAIR LABOR PRACTICES
UPON COMMERCE
The activities of Respondent set forth, above, have a
close, intimate, and substantial relationship 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.
IV. THE REMEDY
Inasmuch as I have found that Respondent has engaged
in unfair labor practices, I shall recommend that it cease
and desist therefrom and take appropriate affirmative
action designed to effectuate the policies of the Act.
As set forth above, I have found that Respondent in
various respects violated Section 8(aXl) of the Act by
questioning employees about their union sympathies or
activities, threatening them with reprisals and more
onerous working conditions if they selected the Union as
their representative, and stating that in the event the Union
came into the plant Respondent would have to reevaluate
its Sharon operations solely on economic grounds, without
regard to continuing to operate the facility in part as a
demonstration project for the Open Management System.
In view of these violations, it will be recommended that
Respondent cease and desist therefrom and take appropri-
ate affirmative action designed to effectuate the policies of
the Act.
The findings I have made to the effect that Respondent
violated Section 8(a)(3) and (5) of the Act by closing the
Sharon plant and terminating the unit employees present
some problems with respect to the appropriate remedy. In
his brief, counsel for the General Counsel asserts that the
Board has "invariably issued bargaining orders whenever
unlawful discharges [footnote omitted] occur in a small
unit and are coupled with extensive 8(a)(1) violations such
as threats, interrogations, and/or promises made by
management officials to a significant segment of unit
employees...." In his view, the present case is "custom-
tailored to the application" of the Supreme Court's
decision in Gissel Packing Co., Inc., et. aL, 395 U.S. 575
(1969). He contends that, in view of the fact that
Respondent has closed the Sharon production operations,
and thus terminated all production employees, "a bargain-
ing order alone would be meaningless." Therefore, counsel
for the General Counsel urges that in addition to an order
to bargain, an order be issued "requiring Respondent to
reopen the West Middlesex, Pennsylvania facility, and
offer reemployment to the terminated employees...." In
this connection, he points out that Respondent still owns
the Sharon facility, has continued to utilize a portion of it
as a sales and distribution center, and that the production
equipment is still at the facility in a "mothball" status.
Moreover, he refers to the fact that a majority of the former
unit employees still reside in the Sharon area. Thus, in his
view, the "only expense Respondent would incur in
reopening the production facility would be shipment of raw
materials to Sharon and the transfer of the previous or
another management team," and that in view of the serious
nature of Respondent's unfair labor practices and the
Board's policy of attempting to restore the status quo ante,
it is essential that an order be issued requiring Respondent
to reopen the facility and offer reemployment to the former
employees.
On the other hand, the facts concerning the economic
position of Respondent, in particular anticipated produc-
tion requirements for Munchos and the production
facilities and their utilization at the Dallas plant, present
difficulties. It has already been established that the Dallas
plant was operating at less than capacity and producing the
product at less cost, whereas the Sharon plant had been
operating at a loss. No suggestion has been made that these
conditions have changed in any significant respect. The
question presented, therefore, is whether Respondent
should be ordered to resume operations at Sharon or
whether, considering all the circumstances, some other
remedy should be devised.
The Board has addressed itself to problems quite
comparable to those that I conceive to be present here.
While the facts cited by the Government in support of its
request that Respondent be ordered to reopen the Sharon
plant are not subject to serious dispute, it is still true, so far
as appears, that the Respondent's Dallas plant, even after
absorbing the production of the Sharon plant, had ample
capacity to fulfill all present and anticipated orders and, in
addition, produced the product at less cost per pound than
did the Sharon plant. The net result of the proposed
remedy advanced by counsel for the General Counsel
would be that the Dallas plant would continue to operate
at less than capacity while the Sharon plant would continue
to operate at a loss. While the Board customarily adheres
to its remedial principle that violators of Section 8(a)(3) of
the Act be ordered to restore the status quo ante, it is not so
doctrinaire that it will rigidly insist upon restoration of the
status quo ante where practical considerations indicate
otherwise. Thus, in Thompson Transport Company, Inc., 165
NLRB 746, 747 (1967), where the respondent there closed a
terminal without notifying the union or bargaining con-
cerning that decision and its effects on employees was held
to be a violation of Section 8(a)(5) and (1) of the Act, the
Board noted that an order requiring that respondent to
restore the status quo ante "would require Respondent to
recreate the situation existing prior to the closedown of the
Phillipsburg terminal by reopening the discontinued
terminal. However, we believe that our remedy should also
be tempered by practical considerations, which, if applied
to the present situation, dictate against restoration of the
Phillipsburg terminal as being impractical and nonessential
to the formulation of a meaningful remedy, since the
terminal has been closed for a considerable period of time
and the trucks and other equipment have been shipped
some distance away. Also we have found that Respon-
dent's decision to close the Phillipsburg terminal was
motivated solely by economic considerations." According-
ly, the Board stated that it would not require reestablish-
ment but, instead, ordered that Respondent "establish a
preferential hiring list of all employees in the appropriate
unit following the system of seniority, if any, customarily
applied to the conduct of Respondent's business, and, if
operations are ever resumed at Phillipsburg or anywhere in
the Phillipsburg area, at that time offer reinstatement to
those employees" and bargain with the representative of
770
FRITO-LAY, INC.
the employees upon request. In addition, the Board noted
that if the respondent in that case had adhered to its
bargaining obligation the employees there involved would
not have been terminated without the protection of
collective bargaining and they might not have been
terminated at all. The Board noted that this was particular-
ly true since the respondent there owned the property and
"could have remained on the premises for as long as it
desired beyond the closing date, and further there is
nothing in the instant record to suggest that Respondent
permanently abandoned the Phillipsburg operation, or that
Respondent would not resume operations there if it would
acquire adequate hauling contracts." The Board continued
by stating that "it is both reasonable and necessary to
require that 'the employees whose statutory rights were
invaded by reason of Respondent's unlawful unilateral
action, and who may have suffered losses in consequence
thereof, be reimbursed for such losses until such time as
Respondent remedies its violation by doing what it should
have done in the first place.' " Thus the Board ordered the
respondent in that case to make the discharged employees
whole and that the "liability for such backpay shall cease
on July 12, 1966, the date on which Respondent fulfilled its
duty to bargain as to the effects of its decision to suspend
operations from the Phillipsburg facility." (Id. at 747-748.)
In Ozark Trailers, Incorporated, etc., 161 NLRB 561, 571
(1966), the Board noted that "the unfair labor practice was
the unilateral closedown of the Ozark plant without giving
the Union notice or opportunity to discuss the decision to
close down and matters that would affect the employees
involved." The Board noted that the "nature of the
violations would justify directing the Respondents to
restore the situation existing prior to the closedown of the
Ozark operation by reestablishing the discontinued opera-
tion." However, it found that "this appears impractical as
the plant has been shut down for a considerable period of
time and the machinery has been shipped some distance
away." Further, the Board noted that that employer's
decision to close down the Ozark operation "was prompted
s The record shows that Respondent has plants at Williamsport,
Pennsylvania, Allen Park. Michigan. and Beloit, Wisconsin. These are "fry"
solely by pressing economic necessity." It ordered that
employer to make whole the employees for any loss of pay
they suffered as a result of the employer's unlawful refusal
to bargain "from the time they made the decision to close
the plant at the end of January 1964, to the date the Ozark
plant was closed on March 1, 1964...." (p 571-572).
In Trey Packing, Inc., 172 NLRB 291, 292 (1968), the
Board, in ordering the restoration of the status quo ante to
redress violations of Section 8(a)(3) and (5), noted that the
respondent there had not offered "any evidence which
would tend to show that a resumption of truck delivery
operations. . . would cause any considerable change in its
business or subject Respondent to undue financial hard-
ship."
In the light of the foregoing precedents, and considering
the particular situation present here, I am of the view that
Respondent should be ordered to pay the unit employees
backpay, in accordance with the customary formulas, from
January 15, 1975, the date on which I am convinced
Respondent had reached a reasonably firm determination
to close the Sharon plant, to June 1, 1975, when it did in
fact close the plant and terminate the unit employees. In
addition, inasmuch as Respondent still owns the Sharon
property and utilizes it to some extent in its sales and
distribution operations, and, moreover, still has the
production equipment there in a "mothball" state, it should
be ordered to establish a preferential list of the unit
employees, following such seniority principles as it had
observed in the past, for reemployment in the event that it
should reopen the Sharon plant. Moreover, in view of the
fact that Respondent has facilities in various other areas of
the mainland, including locations not too far distant from
Sharon, I think it equitable to order Respondent to extend
to the Sharon unit employees the opportunity to transfer to
or obtain employment in facilities cperated by Respondent
in the northeastern area of the United States. 6 I shall so
recommend.
[Recommended Order omitted from publication.]
plants. where the pellet is sliced into chips. fried. bagged, and distributed to
Respondent's retail customers.
771