Gladding Corp.

National Labor Relations Board - Board Decisions

Jul 22, 1971

192 N.L.R.B. 200 (N.L.R.B. 1971)

200 DECISIONS OF-NATIONAL LABOR RELATIONS BOARD
Gladding Corporation ; Gladding-Paris Corporation
and United Furniture Workers of America,
AFL-CIO. Case l-CA-7141
July 22, 1971
DECISION'- AND ORDER
BY ,CHAIRMAN MILLER AND MEMBERS JENKINS
AND KENNEDY
'On'' March 25, 1971, Trial -Examiner William J.
Brown '- =issued his ^',Decision in the- above-entitled
proceeding, finding that the Respondents had not
engaged in- any -unfair labor practices, and recom-
mending that -the', complaint be - dismissed in its
entirety, as-set -forth in the attached Trial Examiner's
Decision. Thereafter, the General Counsel, filed
exceptions to the Trial Examiner's Decision and a
supporting brief. The Respondents then filed an
answering brief.
Pursuant to the provisions of Section 3(b)' of the
National Labor .'Relations Act, as amended, the
National LaborRelations Board has delegated its
powers in,conneotion with this case to a three-member
panel., T.
The rBard has reviewed the rulings of the. Trial
Examiner made at the a hearing , and finds that, no
prejudicial error was committed.' The rulings are
hereby affirmed. The Board has considered the Trial
Examine 'S Decision, the exceptions and briefs, and
the entire record in the case, and to the extent
indicated below, hereby adopts the findings, conclu-
sions , and recommendations of the Trial Examiner?
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor
Relations Board hereby orders that the complaint
herein be, and it hereby is, dismissed in its entirety.
1 The General Counsel excepts to the Trial Examiner's admission of
evidence submitted by the Respondents which describes Respondents'
future plans for the South Paris facility. This evidence took the form of oral
testimony, supporting , exhibits, and a posthearing, ex parte affidavit. While
we believe the Trial Examiner erred in admitting this evidence , the error is
not prejudicial, for we would reach the same result on the basis of the other-
evidence in the case:
2 In adopting the Trial Examiner's conclusion that Respondents are not
successor-employers of 'the `employees of Paris Manufacturing Company,
hereinafter Pans, we• rely solely on the following factors: (a) on January 7,
1970, and, before Cladding Corporation appeared on the scene, Paris, a
concern that had been failing financially for a number of years, was forced
to initiate bankruptcy proceedings and effectively lost control over its own
existence; (b) between January 22,A070, and February 27, 1970, control
over the day-today operations of Paris was granted by the bankruptcy
court to the Small Business Administration , a government agency; (c) after
February 27, 1970, Paris ceased to exist as a going concern inasmuch as it
ceased all manufacturing operations , shut down its machinery, laid off its
employees, closed its doors, and surrendered the premises to its landlord;
(d) in negotiating for a leasehold interest in the machinery and plant,
Gladding Corporation dealt with the creditors and landlord of Paris, and
not with Paris itself , because, by a series of financial transactions over a
period of years , Paris had lost all title to the machinery and plant; (e)
although between tebcuaty27, 1976, when Paris closed its doors, and may
6, 1970, when Gladding-Paris Corporation commenced operations-a
hiatus of over 2 months--even former employees of Paris remained on the
premises , they were engaged only in caretaking duties' and were paid by
and were employees of the landlord , not. Paris, for this' period ; and (f)
Gladding-Paris, unlike Paris, is part of a multiplant , integrated enterprise.,
In the circumstances present herein , we believe the conclusion is' warranted
that the nature and character ofthe,employing industry at, the South Paris,
Maine, facility has been sufficiently altered so,that we cannot find, under
applicable Board Precepts, that the Respondents are successor-employers
to "Paris. Cf. Southland Manufacturing Corp., 186 NLRB No. 'I 11.
Moreover, we note that .Gladding-Paris Corporation has only one customer
in common with Paris and has obtained other 'customers from unrelated
sources. While we do not believe this factor to be controlling , we regard it
as a significant part of the total elements to be considered . Cf. Lincoln
Prrvate Police, Inc., 189 NLRB No. 103. '
TRIAL EXAMINER'S DECISION
WiLLum J. BROWN, Trial Examiner: This proceeding
under Section 10(b) of the National Labor Relations Act, as
amended, hereinafter referred to as the Act, came on to be
heard-before me at South Paris, Maine, on January 12,13,
and 14, 1971. The original charge of unfair labor practices
was filed June 2, 1970,1 byr the Charging Party, United
Furniture Workers of 'America, AFL-CIO, hereinafter
sometimes ' referred to, as the Union, and the complaint
herein was issued October 9 by the General Counsel of the
National Labor Relations Board,' acting through the
Regional Director for Region 1. Itallegedand the duly filed
answer of the above-indicated Respondents, hereinafter
sometimes referred to jointly as the Company, denied the
commission of unfair labor practices , defined in Section
8(a)(5) and (1) 2 of the Act.
At the hearing the parties appeared-.and participated as
noted above with full opportunity to present evidence and
argument on the issues. Subsequent " to the close of, the
hearing written briefs were received from 'the General
Counsel and the Company and have been fully considered.
On the entire record herein and on the, basis of my
observation of the witnesses, I make the following:
FINDINGS OF FACT
I. THE BUSINESS OF TILE RESPONDENT EMPLOYERS
The pleadings and evidence establish and I find that
Respondent Gladding Corporation, hereinafter sometimes
referred to as, Gladding,v is a corporation organized under
the laws of the State of New York with its principal office in
South Otsilic, New York,, and engaged primarily in ,the
manufacture and sate of sporting ' goods and recreational
equipment; Gladding-Paps Corporation, hereinafter some-
times referred to as, Cladding-Paris, a'Maine corporation,is
a wholly owned subsidiary of Gladding-with its principal
office in South Paris, Maine. Paris Manufacturing Compa-
ny, hereinafter sometimes ,referred to as Paris, was a Maine
corporation formerly engaged in th'e manufacture of winter
1 Dates hereinafter, unless otherwise, noted , relate Ito the calendar year
1970.
2 Specifically the complaint alleges the commission of unfair labor
practices in the Company's refusal to recognize the Union and abide by the
terms of a collective-bargaining agreement between the Union and an
alleged predecessor ; an amendment alleges unfair labor practices by
unilateral changes in wage, seniority, and benefits provisions.
192 NLRB No. 40
GLADDING CORP. 201
sports 'equipment and dormitory, hotel, and motel furni-
ture. Paris was party to a collective-bargaining agreement
with the Union running for a term- from August 1, 1969,
until August 1, 1971, and from year to year thereafter unless
terminated-by either party on, 60-day notice. Paris' charter
from the State of Maine was suspended December 2, 1970.
II. THE LABOR ORGANIZATION INVOLVED
The evidence, including a stipulation entered into at the
hearing, establishesthat the Union is a labor organization
within the purview of Section 2(5) of the Act.
M. THE ALLEGED UNFAIR LABOR PRACTICES
At least as early as 1964 Paris had mortgaged certain of
its properties to the Small Business Administration and
sometime in 1967 it deeded to and leased back from Oxford
Hills Development Corporation, a local development
corporation, its interest in the real , estate, machinery, and
equipment constituting the industrial enterprise, here
involved. On August 1, 1969 the Union, which had been
certified as the collective-bargaining representative of
employees in the unit here involved, all production and
maintenance employees excluding office clericals, profes-
sional employees, guards, watchmen and supervisors, the
appropriateness of which unit has been established by
Board and court decisions, entered into the aforementioned
collective-bargaining agreement with Paris to run for a
period expiring August 1, 1971, with automatic renewal
from year to year thereafter in the absence of notice by a
party of a desire to terminate.
On January 7, 1970, Paris filed a petition in bankruptcy
and from January 22 until February 27, 1970, the Small
Business Administration, which had a subordinate interest
in goods in process, finished goods, and accounts
receivable, actively ran the operations of Paris. In this
period operations continued to use the same work force on
a diminishing scale with layoffs and transfers on a seniority
basis except that seniority would be subordinated to the
expeditious completion of finishing the work on those
contracts selected for completion3 as most advantageous to
Paris and its creditors. On February 27 production ceased
and the premises were turned over to a small crew of seven
watchmen and firemen who were paid by the Oxford Hills
Development Corporation with funds provided by the
Maine Industrial Building Authority. These seven were
continued in employment after May 6 when Gladding-
Paris commenced operations.
On April 10 the Union wrote to the Company and,
referring to the Company's forthcoming entry into
manufacturing operations at the premises involved, re-
quested that the Company abide by the existing labor
agreement.4 Under date of April 20 the Company denied
any successorship relation in the circumstances.
On April 20 Oxford Hills Development Corporation
transferred its interest in the plant to Maine Industrial
Building Authority which on May 6, leased the realty,
machinery, and equipment to Gladding-Paris; on the same
date the Small Business Administration transferred its
mortgage to Gladding-Paris. On May 6, Gladding-Paris
commenced operations. F. Earl Martin, a Gladdinggroup
vice president, became president and general manager of
Gladding-Paris. Martin placed control of purchasing and
production in the hands of Wayne Wood, former works
manager of Gladding-Hedlund Manufacturing Company,
a Gladding subsidiary engaged at Nokomis, Illinois, in the
manufacture of toboggans, sleds, and water skis. Two
months later Wood was succeeded by Kurt Franke who,
like Wood, had no prior relationship with Pans.
Reference has been made above to the product line of
Paris. The evidence clearly indicates that, for some time
preceding Gladding's acquisition of; the manufacturing
facility here involved, the principal product of Paris had
been, in the furniture line. Thus in its lasocomplete year of
production, 1969, Paris' sales of furniture-dormitory,
school, and hotel-represented some 70 percent-of total
sales. Gladding-Paris operations, however, have reversed
these figures -in, favor of recreational items and its sales
indicate an application of a fundamental corporate-policy
of the Gladding group to concentrate on capitalizing on the
continued expended interest in recreational and 'leisure
time items . The annual reports for fiscal years 1969 and
1970 clearly indicate the corporate philosophy in this
regard.
The Gladding management has also introduced substan-
tial changes in the manufacturing equipment of the South
Paris facility. In its sled manufacturing operations Paris
had manufactured sled runners in its South Paris facility
and attached them to the wooden frames in the same
facility. In its ooperations thus far the sled runners of
Gladding-Paris have been fabricated at another Gladding
subsidiary, a Kalamazoo, Michigan, operation, and
shipped to South Paris for attachment to sled bodies. The
corporate program for production at South Paris call for
the shipment to Gladding-Paris of some $34,000 worth of
equipment from the Gladding subsidiary at Nokomis,
Illinois; this is in addition to some $25,000 worth of
equipment shipped to South Paris from the Gladding in
Kalamazoo. The conclusion is inevitable that there have
been substantial changes, from the very beginning of
operations, in the production processes as compared with
those of the former Paris operation.
There occurred a substantial change in the composition
of the work force at the South Paris operation. Without any
indication of discrimination against former Paris employ-
ees, there were, at the time of peak employment, November
25, 105 new employees and 62 former Paris employees.
While it appears from Joint Exhibit 18, a listing of 24
officers and department heads under the old Paris
operation, that some 14 continued in employment with
Gladding-Paris, it also appears that of these 14 carryovers
only 8 continued in their former assignments.
It is not without significance that the Gladding
management took immediate steps to erase any possibility
of public identification of the Gladding operation as a
continuance of the old Paris operation. Gladding's board
3 At this, stage operations were under the control of Harlan Choate, for completion.
regional attorney for the Small Business Administration . His testimony is 4 The Union letter particularly referred to art. XXIV of the agreement
that only those contracts assuring $2 return for each $1 spent were selected which states that it should bind the parties, their successors , or assigns.
202 DECISIONS OF NATIONAL LABOR RELATIONS IIOARD
chairman , Mayer, immediately on the commencement of
operations , ordered, new stationery, a new telephone
number,--new signs, and a new post office - box.5' Two
furniture vans owned by Paris and bearing the Paris name
were' repainted by Gladding-Paris as soon as practicable.
With respect ' to incoming purchases of materials and
supplies , it appears from Joint Exhibit 15 that there has been
a substantial change in the sources of such goods and, in
some cases in the terms available, the sole exception being
the case of hardwood logs which , inevitably, have
continued to be ° logging 'operators in the area within a 75-
mile radius about the South Paris operation . With respect
to identity of customers , any continuity appears` to be
limited to a Nickerson Corporation, a supplier of school
furniture who continued as a customer of'Gladding-Paris
but for`,' a limited amount of business ' which cannot be
regarded , as a developing line in view of Gladding-Paris
concentration on recreational equipment. °'
Onthe• basis of all the material evidence, outlined above,
I' find -and conclude -that -it does not preponderate in favor
of the conclusion , that Gladding-Paris and Cladding
constitute , a successor to Pariswr that they have engaged in
the unfair labor practices alleged in the complaint, See
Southland Manufacturing Corp., 186 NLRB No. 111. I
recommend that the complaint herein be dismissed. a -
On the basis of the foregoing findings of fact and upon
the entire record in this case Lmake the following:
CONCLUSIONS OF LAW
I. The Company, is an employer, engaged in commerce
within the purview of"Section 2(6) and (7) of the_Act.
2. The Union is a labor organization within the purview
of Section 2(5) of the Act.
3. The evidence does not ,preponderate in favor of the
conclusion that the Company has engaged in the unfair
labor practices alleged in the complaint.
RECOMMENDED .ORDER
On the basis of the foregoing findings of fact- and
conclusions of law it is recommended that the complaint
herein be dismissed.
P For some unaccountable reason the change was not made in the post
office box number until December 1.