Sea Mar Community Health Centers

National Labor Relations Board - Board Decisions

Sep 28, 2005

345 N.L.R.B. 947 (N.L.R.B. 2005)

SEA MAR COMMUNITY HEALTH CENTERS
345 NLRB No. 69
947
Sea Mar Community Health Centers and Office and
Professional Employees International Union,
Local 8, AFL–CIO. Case 19–CA–28595
September 28, 2005
DECISION AND ORDER
BY CHAIRMAN BATTISTA AND MEMBERS LIEBMAN
AND SCHAUMBER
On December 24, 2003, Administrative Law Judge
John J. McCarrick issued the attached decision. The
Respondent filed exceptions and a supporting brief, and
the General Counsel filed an answering brief.1
The National Labor Relations Board has considered
the decision and the record in light of the exceptions and
briefs and has decided to affirm the judge’s rulings, find-
ings, and conclusions only to the extent consistent with
this Decision and Order.2
The Respondent is a nonprofit organization that oper-
ates medical and dental clinics. This case involves the
Respondent’s closure of a dental lab that was being oper-
ated in one of the Respondent’s clinics. The judge found
that the Respondent violated Section 8(a)(5) and (1) by
failing to give the Union notice and an opportunity to
bargain over the decision and effects of the decision to
close the lab. The judge also found that the Respondent
violated Section 8(a)(5) and (1) by refusing to bargain
over wages for the dental lab technician position.3
For the reasons stated below, we find that the Respon-
dent was not obligated to bargain over the decision to
close the lab or over the effects of that decision. The lab
and the lab technician position were created by a person
who had no authority to do so, and the lab operated with-
out Respondent’s knowledge and in direct contradiction
to its express order. The Respondent’s order to end this
rogue operation—once it was discovered—is a core en-
trepreneurial decision that is not subject to the duty to
bargain. Accordingly, we reverse the judge and dismiss
those allegations. In addition, we agree with the judge
that the Respondent violated Section 8(a)(5) and (1) by
refusing to bargain over wages. However, we amend the
judge’s remedy.

1 The General Counsel argues that the Respondent’s Brief in Support
of Exceptions fails to comply with Sec. 102.46(c)(2) of the Board’s
Rules and Regulations, because the brief does not contain “[a] specifi-
cation of the questions involved and to be argued, together with a refer-
ence to the specific exceptions to which they relate.” We find that the
Respondent’s exceptions and brief are in substantial compliance with
the Board’s Rule.
2 We shall modify the judge’s recommended Order and substitute a
new notice to conform to our findings.
3 The judge dismissed an allegation that the closure of the lab and re-
fusal to bargain over wages also violated Sec. 8(a)(3) and (1). There
are no exceptions to the dismissal.
I. BACKGROUND
The Respondent employs about 1000 employees in 28
different facilities, including a dental clinic in Seattle,
Washington, where the events at issue here took place.
The Union is the collective-bargaining representative for
a unit that includes all employees of the Respondent ex-
cept managers, confidential employees, contracted em-
ployees, temporary employees, and supervisors.
The Respondent’s dental clinics, including the Seattle
clinic, provide general dentistry services. A small per-
centage of the Respondent’s patients require dentures or
other dental appliances. Until late 2001, the Respon-
dent’s practice at all of its clinics was to prescribe and fit
those patients with dental appliances, but to use outside
commercial labs to manufacture most of the appliances.
In May 2001, the Respondent hired Jose Cornejo as a
CSR dental assistant at the Seattle clinic. The main func-
tion of the CSR dental assistant is to sterilize dental
equipment. For the first few months after he was hired,
Cornejo performed sterilization work. In late 2001,
however, the Respondent’s dental director, Dr. Alex
Narvaez, began training and assigning Cornejo to manu-
facture dental appliances, rather than sending that work
to outside labs. Narvaez took this action on his own,
without the Respondent’s knowledge or consent.
Cornejo performed this work in a vacant room in the
clinic, which clinic personnel were using as a lab.4 By
2002, Cornejo was spending the majority of his time as a
dental lab technician making dental appliances rather
than sterilizing equipment, although the dentists contin-
ued to use outside labs to manufacture some of the more
complex appliances.
Narvaez reports to the Respondent’s CEO, Rogelio
Riojas. In March 2002, Narvaez met with Riojas and
Deputy Director Mary Bartolo.5 Narvaez proposed that
the Respondent develop an expanded dental lab and cre-
ate a dental lab technician position. The main duty of the
employee holding the position would be to fabricate den-
tal appliances (i.e., the work that Narvaez had assigned
Cornejo). None of the Respondent’s other clinics had a
dental lab technician position. Instead, those clinics used
outside labs to manufacture most dental appliances.
The record includes testimony concerning the Respon-
dent’s procedures for creating new job positions and of-
fering new services such as those suggested by Narvaez.
Regarding job positions, the person seeking to create the
position must fill out a written request and job descrip-
tion and meet with Riojas and Bartolo, who have the

4 The Respondent’s long-term plan was to convert the room into an
additional patient care area, but at that time the Respondent did not yet
have the equipment to do so.
5 Bartolo also reports to Riojas.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD948
authority to give final approval on behalf of the Respon-
dent. Regarding new services, Riojas determines
whether to recommend the service to the board of direc-
tors, which then makes the final decision. Thus, Narvaez
did not have authority to decide on his own to create a
new position or to expand lab service.
During the March 2002 meeting with Narvaez, Riojas
and Bartolo discussed Narvaez’ proposal and made a
final decision to reject it. They did so for several rea-
sons: a dental lab would take up clinic space that other-
wise could be used for patient care, the dentist supervis-
ing the lab technician would need to take time away from
patient care to do so, and adding a new position and per-
forming the work in-house would not be cost-effective.
Riojas did not recommend to the board of directors that
the Respondent expand the dental lab. The day after
Riojas and Bartolo met with Narvaez, Bartolo told Nar-
vaez to return Cornejo to his original duties as CSR den-
tal assistant.
Despite Bartolo’s direct order, Narvaez continued
throughout 2002 and early 2003 to have Cornejo manu-
facture dental appliances in-house, without the Respon-
dent’s knowledge or consent. Initially, Narvaez in-
structed Cornejo to finish denture work that had been in
progress in March 2002 when Riojas and Bartolo re-
jected Narvaez’ proposal to create a dental lab technician
position. Narvaez testified that “it just continued” there-
after, and he took advantage of the fact that the room
being used as a lab was still vacant and had not yet been
converted to a patient care area. Narvaez also testified
that he wanted to demonstrate that the Respondent had
made the wrong decision in rejecting Narvaez’ proposal.
In January 2003,6 the Respondent and the Union began
negotiating a new collective-bargaining agreement. Dur-
ing a bargaining session in late March, the Union in-
formed the Respondent’s bargaining team that Cornejo
was performing dental lab work, which was outside his
classification of CSR dental assistant. The Respondent’s
bargaining team told the Union that they would look into
the issue. After the bargaining session, Judith Puzon and
Carolina Lucero, two members of the Respondent’s bar-
gaining team, talked to Narvaez about the work Cornejo
was performing and reviewed the proposed job descrip-
tion for dental lab technician that Narvaez had submitted
to Riojas and Bartolo in March 2002.7
At the next bargaining session, on April 4, Puzon told
the Union that Cornejo was classified as a dental lab

6 All dates from this point forward are in 2003, unless otherwise
specified.
7 As explained above, the Respondent had denied Narvaez’ request
to create the dental lab technician position in March 2002, but the Re-
spondent’s negotiators apparently did not know that.
technician, not a CSR dental assistant. The Union’s bar-
gaining team stated that this position was not listed on
the salary schedule in the collective-bargaining agree-
ment and that the Respondent was obligated to bargain
over the wages for the position. The Respondent re-
fused.
Lucero or Puzon also informed CEO Riojas of the Un-
ion’s concern that Cornejo was performing dental lab
work outside his job classification. This was the first
notice Riojas received that Narvaez had disregarded the
Respondent’s March 2002 decision not to operate an
expanded dental lab or to create a dental lab technician
position.
Sometime after the April 4 bargaining session, Riojas
and Mike Leong, the Respondent’s vice president for
legal affairs, met with Narvaez. Leong asked Narvaez if
Cornejo was in fact still performing dental lab work.
Narvaez said that Cornejo was. Riojas reminded Nar-
vaez that Riojas had rejected Narvaez’ proposal in 2002
to create the dental lab technician position, and he in-
structed Narvaez immediately to stop operating the lab
and to return Cornejo to his sterilizing duties.
Narvaez complied. On April 9, the Respondent
stopped operating the dental lab, resumed sending dental
appliance work to outside labs, and reassigned Cornejo
to sterilizing dental equipment. The Respondent did not
give the Union notice and an opportunity to bargain be-
fore reestablishing the clinic’s approved operational
structure.
II. JUDGE’S DECISION
The judge found that the Respondent violated Section
8(a)(5) and (1) by refusing the Union’s April 4 request to
bargain over wages for the dental lab technician position,
by failing to give the Union notice and an opportunity to
bargain over the April 2003 decision to close the dental
lab, and by failing to give the Union notice and an oppor-
tunity to bargain over the effects of closing the lab.
The Board and the courts have developed two lines of
cases in evaluating whether an employer’s decision to
remove bargaining unit work is a mandatory subject of
bargaining. In Fibreboard Paper Products Corp. v.
NLRB, 379 U.S. 203 (1964), the Supreme Court held that
a decision to subcontract bargaining unit work is a man-
datory subject of bargaining where the employer is
merely replacing employees in the bargaining unit with
employees of an independent contractor to do the same
work under similar working conditions. Id. at 215. In
Torrington Industries, 307 NLRB 809 (1992), the Board
further stated that such subcontracting decisions do not
involve a change in the scope and direction of the busi-
ness and thus are not “core entrepreneurial decisions”
outside the scope of the bargaining obligation.
SEA MAR COMMUNITY HEALTH CENTERS 949
In contrast, the Supreme Court in First National Main-
tenance Corp. v. NLRB, 452 U.S. 666 (1981), found that
a decision to close a portion of the employer’s operation
for economic reasons was not a mandatory subject of
bargaining. The partial closure was a significant change
in the employer’s operation, and the Court held that the
employer was privileged to make such core managerial
decisions without bargaining with the union.
Applying this precedent, the judge found that the Re-
spondent’s decision to close the dental lab and resume
using outside labs to manufacture dental appliances was
more similar to the mere replacement of one group of
employees with another in Fibreboard and Torrington
Industries, than to the partial shutdown in First National
Maintenance. Therefore, the judge found that the Re-
spondent’s decision was a mandatory subject of bargain-
ing, and that the Respondent violated Section 8(a)(5) and
(1) by failing to give the Union notice and an opportunity
to bargain over the decision. The judge further found
that the Respondent violated Section 8(a)(5) and (1) by
failing to give the Union notice and an opportunity to
bargain over the effects of the decision prior to imple-
mentation.
The Respondent excepts, arguing that its action more
closely corresponded to the partial closure in First Na-
tional Maintenance, and thus closing the lab without
bargaining with the Union did not violate the Act.
III. ANALYSIS
A. Decision to Close the Dental Lab and Return
Cornejo to Sterilizing Equipment
For the reasons stated below, we reverse the judge and
find that the Respondent did not violate Section 8(a)(5)
and (1) by failing to give the Union notice and an oppor-
tunity to bargain over the decision to close the dental lab
and return Cornejo to sterilizing equipment. Under the
particular facts of this case, it would not effectuate the
purposes of the Act to impose on the Respondent an ob-
ligation to bargain.
Contrary to the judge and the Respondent, we do not
find the present case analogous to Fibreboard, Torring-
ton, or First National Maintenance. All of those deci-
sions addressed whether the employer was required to
bargain over a management decision to change or discon-
tinue some facet of its business that the employer had
knowingly established and operated. See Fibreboard,
supra (decision to subcontract maintenance operation
after undertaking cost study); First National Mainte-
nance, supra (decision to discontinue a contractual ar-
rangement the employer had established with a particular
customer); Torrington, supra (decision to replace unit
employees with a nonunit employee from another plant).
The circumstances here are significantly different and
require a different approach.
In March 2002, the Respondent, through CEO Riojas
and Deputy Director Bartolo, rejected Narvaez’ proposal
to operate an expanded dental lab and to create a dental
lab technician position.8 The Respondent instructed
Narvaez accordingly. Without either the Respondent’s
knowledge or consent, Narvaez disregarded those in-
structions. In April 2003, when the Respondent learned
that Narvaez had ignored its instructions and continued
to have Cornejo manufacture dental appliances, the Re-
spondent immediately took action to restore its opera-
tions to what the Respondent had authorized and be-
lieved to be in existence since March 2002. The Re-
spondent closed the lab, resumed using outside labs to
fabricate dental appliances, and reassigned Cornejo to his
authorized duties as CSR dental assistant. Thus, the is-
sue is not whether the Respondent was obligated to bar-
gain over a decision to discontinue an operation the Re-
spondent had authorized or knowingly established.
Rather, the issue is whether the Respondent, having dis-
covered an operation that was not only unauthorized but
had been considered and expressly rejected the year be-
fore, should be required to bargain with the Union before
discontinuing that operation.9
In light of these unique circumstances, the present case
cannot neatly be analogized to the decision-bargaining
cases analyzed by the judge. Nor have we found other
Board decisions that address this unusual factual sce-
nario. Accordingly, we resolve this case by examining
whether it would effectuate the basic policies of the Act
to mandate bargaining under the circumstances presented
here. We find that it would not.
An employer violates Section 8(a)(5) and (1) if it
makes a unilateral change in a mandatory subject of bar-
gaining without first giving the Union notice and an op-
portunity to bargain. See NLRB v. Katz, 369 U.S. 736,
743 (1962). Under Section 8(d), “wages, hours, and
other terms and conditions of employment” are manda-
tory subjects of bargaining. However, “Congress did not
intend to mandate bargaining over every conceivable

8 There is no allegation that the March 2002 decision was unlawful.
9 Had the Respondent approved Narvaez’ proposal for an expanded
dental lab, established the lab and created the dental lab technician
position, and later unilaterally discontinued the lab and outsourced the
lab work, we would find it appropriate to analyze (as the judge did)
whether the decision to close the lab was more analogous to the re-
placement of one group of employees with another in Fibreboard and
Torrington or to the decision to close part of a business in First Na-
tional Maintenance. The dissent contends that Fibreboard and Tor-
rington are applicable, yet cites no authority in which the Board or
courts have applied Fibreboard or Torrington under circumstances
similar to those here.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD950
issue arising between management and labor.” NLRB v.
Plymouth Stamping Division, 870 F.2d 1112, 1115 (6th
Cir. 1989), cert. denied 493 U.S. 891 (1989).
In a unilateral-change case, “the relevant inquiry . . . is
whether any established employment term on a manda-
tory subject of bargaining has been unilaterally
changed.” Daily News of Los Angeles v. NLRB, 73 F.3d
406, 411 (D.C. Cir. 1996), cert. denied 519 U.S. 1090
(1997). An unlawful unilateral change “frustrates the
objectives of Section 8(a)(5),” because such a change
“’minimizes the influence of organized bargaining’ and
emphasizes to the employees ‘that there is no necessity
for a collective bargaining agent.’” Pleasantview Nurs-
ing Home v. NLRB, 351 F.3d 747, 755 (6th Cir. 2003)
(quoting Katz, supra at 744, and Loral Defense Systems-
Akron v. NLRB, 200 F.3d 436, 449 (6th Cir. 1999)). We
apply those principles here.
Closing the dental lab was a “change” only in the
sense that Cornejo no longer performed dental lab work,
as he had been doing since late 2001. However, the Re-
spondent had never decided or agreed, in the first in-
stance, to operate an expanded dental lab or to have a
unit position devoted to manufacturing dental appliances.
To the contrary, the Respondent decided in March 2002
not to operate an expanded lab or to create a dental lab
technician position.10 Narvaez lacked the authority on
his own to create a new job position or to expand the
scope of services offered by the Respondent. After
March 2002, the expanded lab existed, and Cornejo per-
formed lab work, only because Narvaez had defied the
Respondent’s instructions without the Respondent’s
knowledge. When the Respondent learned in April 2003
that Cornejo was still performing dental lab work, the
Respondent simply took action to conform operations to
its earlier decision, which the Respondent had made—
and which the Respondent believed had been imple-
mented—in March 2002.
The dissent’s rationale for finding Narvaez’ lack of au-
thorization irrelevant is flawed. It relies on decisions
holding that an employer is bound by the unlawful acts
or coercive statements of its supervisors, even if the spe-
cific acts and statements were unauthorized. First, in the
present case, Narvaez’ conduct is not alleged to be
unlawful. The issue is whether the Respondent acted
unlawfully in discontinuing a dental lab that Narvaez
insubordinately operated. Second, the principle that an

10 The judge acknowledged this fact in the portion of his decision
dismissing the allegation that the closure of the lab violated Sec.
8(a)(3): “it must be remembered that the decision to close the lab had
been made [in 2002]. It was only Dr. Narvaez [sic] insubordinate deci-
sion to retain the dental lab that produced the issue during bargaining in
2003.”
employer is bound by a supervisor’s unlawful conduct is
based, in turn, on the principle that the supervisor is an
agent of the employer for the purposes of that unlawful
conduct. Although the Respondent admitted at the hear-
ing that Narvaez was an “agent generally,” the context of
that statement shows that the Respondent was admitting
only that Narvaez was an agent for matters within his
supervisory authority. A person “may be an agent of the
employer for one purpose but not another,” Pan-Oston
Co., 336 NLRB 305, 306 (2001), and it is not reasonable
to read the Respondent’s testimony as an admission that
Narvaez’ agency was unlimited.
The Board may decline to find agency when a person
acts outside the scope of his employment. Id. Narvaez’
supervisory status does not provide him with unlimited
authority to bind the Respondent on any and all matters.
The evidence does not support our colleague’s finding
that Narvaez was an agent for purposes of expanding the
Respondent’s operation to include an in-house dental lab
never approved by the board of directors and expressly
rejected by the CEO and deputy director. That conduct
was clearly outside the scope of Narvaez’ employment.11
Indeed, the elaborate procedures adopted by the Respon-
dent to make such decisions underscore Narvaez’ lack of
authority to assign Cornejo lab technician’s duties.12
Under the unique circumstances here, we do not view
the Respondent’s closing of the lab as a decision to
change an established term or condition of employment
in the manner contemplated by Katz and its progeny.
Nor do we view the Respondent’s actions as conduct that

11 The dissent cites the Restatement (Second) of Agency for the
proposition that a forbidden act may be within the scope of employ-
ment. The Restatement also provides that “the prohibition by the em-
ployer may be a factor” in determining whether the act was within the
scope of employment. See § 230 cmt. c. The Restatement further
provides that conduct is not within the scope of employment “if it is
different in kind from that authorized” (§ 228(2)) and that whether the
act “is outside the enterprise” of the employer is also to be considered
(229(2)(e)). Each of these factors supports our conclusion that the
operation of the lab was not within the scope of Narvaez’ employment
and weighs strongly against finding agency.
12 To the extent that apparent authority is applicable here, the record
does not show that Narvaez had apparent authority to operate the lab
and assign lab work to Cornejo. Apparent authority “results from a
manifestation by the principal to a third party that creates a reasonable
basis for the third party to believe that the principal has authorized the
alleged agent to do the acts in question.” Pan-Oston, supra at 305–306
(emphasis added). Narvaez’ conduct alone cannot establish apparent
authority, and the record does not contain sufficient evidence to prove
that the Respondent (as opposed to Narvaez himself) took any action
from which employees would reasonably conclude that Narvaez was
authorized to expand the scope of the Respondent’s in-house services
by creating an expanded dental lab and assigning lab work to Cornejo.
Moreover, neither Cornejo nor any of the other unit employees alleg-
edly affected by the closure of the lab testified as to their beliefs about
Narvaez’ authority.
SEA MAR COMMUNITY HEALTH CENTERS 951
would tend to “minimize[] the influence of organized
bargaining” or “emphasize[] to the employees ‘that there
is no necessity for a collective bargaining agent.’”
Pleasantview, supra at 755 (quoting Loral, supra at 449).
Therefore, we find that it would not effectuate the pur-
poses of the Act to hold that the Respondent was obli-
gated to bargain over closing the dental lab and returning
Cornejo to his duties as CSR dental assistant. Accord-
ingly, we reverse the judge and dismiss that allegation.13
Our dissenting colleague treats this case as one where
an employer makes a decision to change its operation
from one where the dental lab work is performed in-
house to one where that work is subcontracted. The facts
of this case are to the contrary. The Respondent made an
initial business decision at this clinic, and indeed at all of
its clinics, to subcontract dental lab work rather than per-
form it in-house. There is no contention that this original
decision, involving the scope and character of the busi-
ness, was a mandatory subject. This case involves steps
taken by the Respondent to assure that this original deci-
sion was being effectuated.
We recognize that the Respondent’s action had an im-
pact on an employee. However, the fact that an action
affects employees does not necessarily mean that the
action is a mandatory subject (e.g., a decision to go out
of business). In our view, to impose a bargaining obliga-
tion here would be to undercut an employer’s right to
originally decide the scope of its business, and then to
assure that this decision is being effectuated.
B. Effects of Closing the Dental Lab and Returning
Cornejo to Sterilizing Equipment
For the same reasons stated above, we find that it
would not effectuate the purposes of the Act to mandate
bargaining over the effects of closing the dental lab and

13 The dissent contends that in making this determination, we have
improperly disregarded the impact of closing the lab on unit employees.
We disagree. Because this case is not analogous to existing Board or
court precedent, we must evaluate the circumstances as a whole—not
just the effect on employees—and consider the nature of the Respon-
dent’s action to determine whether finding a violation is consistent with
the principles of Sec. 8(a)(5) and with Board and court precedent gov-
erning unilateral changes. Here, it is not.
The cases cited by the dissent on this issue are distinguishable. Lit-
ton Systems, 300 NLRB 324 (1990), enfd. 949 F.2d 249 (8th Cir. 1991),
cert. denied 503 U.S. 985 (1992), involved an employer’s unilateral
decision to discontinue an annual wage increase that was well estab-
lished through the employer’s own past practice. See id. at 418–419.
Intermountain Rural Electric Assn., 305 NLRB 783 (1991), enfd. 984
F.2d 1562 (10th Cir. 1993), involved an employer’s unilateral decision
not to continue paying 100 percent of employees’ health insurance
premiums, contrary to the status quo established by the parties’ expired
collective-bargaining agreement. Neither case comes close to the
unique facts present here. A rogue operation such as Cornejo’s lab
work cannot establish the Respondent’s past practice where the Re-
spondent was not even aware of the practice.
returning Cornejo to his duties as CSR dental assistant.
Finding that an employer is obligated to engage in effects
bargaining presupposes that the employer has made a
decision to change its operations in a manner that affects
employees. See, e.g., First National Maintenance, supra
at 679 fn. 15 (employer required to bargain over effects
of the decision to close part of its business); KIRO, Inc.,
317 NLRB 1325, 1327 (1995) (employer required to
bargain over effects of decision to start producing a regu-
lar 10 p.m. news program). The Respondent here never
made a decision to operate an expanded dental lab or to
create a dental lab technician position in which a unit
employee would manufacture dental appliances.14
To the contrary, the Respondent decided in March
2002 not to do so. In April 2003, the Respondent acted
to bring its operations into conformity with the 2002 de-
cision, which the Respondent had just discovered had
been disregarded by Narvaez. In its unusual factual con-
text, this case cannot be analogized to other decision- and
effects-bargaining cases, in which an employer makes a
managerial decision to change or discontinue some facet
of the business it had previously knowingly established.
Accordingly, we find that the Board’s decisions impos-
ing an effects-bargaining obligation are inapplicable
here, and that it would not effectuate the purposes of the
Act to require effects bargaining. We thus reverse the
judge and dismiss the allegation that the Respondent vio-
lated Section 8(a)(5) and (1) by failing to give the Union
timely notice and an opportunity to bargain over the ef-
fects of closing the dental lab and reassigning Cornejo to
sterilizing dental equipment.
C. Refusal to Bargain Over Wages
The judge also found that the Respondent violated
Section 8(a)(5) and (1) by refusing the Union’s April 4
request to bargain over the wage for the dental lab tech-
nician position. We agree for the reasons stated below,
but we modify the judge’s remedy to conform to the lim-
ited duration of the violation.
As of April 4, Cornejo was performing dental lab work
outside his classification as CSR dental assistant. During
the April 4 bargaining session, members of the Respon-
dent’s bargaining team, after talking to Narvaez about
Cornejo’s work, took the position that Cornejo was clas-
sified as a dental lab technician. The Union requested
bargaining over the wage for that position, and the Re-
spondent refused. Wages are a mandatory subject of
bargaining. See Section 8(d); NLRB v. Borg-Warner

14 We recognize that an employer can have a duty to bargain about
effects of a change, even if there is no duty to bargain about the under-
lying decision to make the change. However, in the instant case, as
shown, there was no decision to make a change.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD952
Corp., 356 U.S. 342, 348 (1958). Therefore, the Re-
spondent’s April 4 refusal to bargain violated Section
8(a)(5) and (1).
By April 9, however, Riojas had learned of Narvaez’
unauthorized continuation of the dental lab and had or-
dered that Cornejo resume his original duties as a CSR
dental assistant. At that time, Cornejo ceased performing
dental lab work, and the lab was closed. Any further
bargaining over the wages to be paid for that work would
have been moot. Therefore, although we agree with the
judge that the Respondent violated Section 8(a)(5) and
(1), we find that the Respondent’s bargaining obligation
is limited to the period from April 4 to April 9. We shall
amend the judge’s remedy accordingly.
AMENDED REMEDY
As stated above, we agree with the judge that the Re-
spondent violated Section 8(a)(5) and (1) by refusing the
Union’s April 4 request to bargain over wages for the
dental lab technician position, work that Cornejo was
still performing on April 4.
The judge’s recommended Order requires the Respon-
dent, without limitation, to “[b]argain . . . over wages to
be paid to employees working in the dental lab techni-
cian position. . . .” The violation of Section 8(a)(5) and
(1) occurred on April 4, when the Union requested bar-
gaining and the Respondent refused. The issue was moot
by April 9, when Cornejo ceased performing dental lab
work and the lab was closed. Therefore, we shall order
the Respondent to bargain over Cornejo’s wages for the
period April 4 to April 9 only.
ORDER
The Respondent, Sea Mar Community Health Centers,
Seattle, Washington, its officers, agents, successors, and
assigns, shall
1. Cease and desist from
(a) Refusing to bargain in good faith with Office and
Professional Employees International Union, Local 8,
over wages to be paid to Jose Cornejo for dental lab
work performed outside his classification as CSR dental
assistant from April 4–9, 2003.
(b) In any like or related manner interfering with, re-
straining, or coercing employees in the exercise of the
rights guaranteed them by Section 7 of the Act.
2. Take the following affirmative action to effectuate
the policies of the Act.
(a) On request, bargain with the Union, as the exclu-
sive representative of employees in the following appro-
priate unit, over wages to be paid to Jose Cornejo for
dental lab work performed outside of his classification as
CSR dental assistant from April 4–9, 2003:
All employees employed by Sea Mar Community
Health Centers; excluding managers, confidential em-
ployees, contracted employees, temporary employees
and supervisors as defined in the Act.
(b) Within 14 days after service by the Region, post at
its facility in Seattle, Washington, copies of the attached
notice marked “Appendix.”15 Copies of the notice, on
forms provided by the Regional Director for Region 19,
after being signed by the Respondent’s authorized repre-
sentative, shall be posted by the Respondent and main-
tained for 60 consecutive days in conspicuous places
including all places where notices to employees are cus-
tomarily posted. Reasonable steps shall be taken by the
Respondent to ensure that the notices are not altered,
defaced, or covered by any other material. In the event
that, during the pendency of these proceedings, the Re-
spondent has gone out of business or closed the facility
involved in these proceedings, the Respondent shall du-
plicate and mail, at its own expense, a copy of the notice
to all current employees and former employees employed
by the Respondent at any time since April 4, 2003.
(c) Within 21 days after service by the Region, file
with the Regional Director a sworn certification of a re-
sponsible official on a form provided by the Region at-
testing to the steps that the Respondent has taken to
comply with this Order.
IT IS FURTHER ORDERED that the complaint is dismissed
insofar as it alleges violations not specifically found.
MEMBER LIEBMAN, dissenting in part.
For more than a year, the Respondent operated a dental
lab. The operation of that lab had actual effects on the
terms and conditions of unit employees. By April 2003,
when the Respondent closed the dental lab, employee
Jose Cornejo had been performing dental lab work for
more than a year with the knowledge and at the direction
of Dental Director Alex Narvaez. The closing of the lab
and the reassignment of Cornejo in turn resulted in the
layoff, reassignment, or reduction in hours of several
other employees. Nevertheless, the majority treats the
Respondent’s decision to close its dental lab and subcon-
tract the lab work as a nonmandatory subject of bargain-
ing, because Dental Director Narvaez did not have his
superiors’ permission to create the position of dental lab
technician in the first place. Effectively creating an “ul-
tra vires” defense to the duty to bargain, the majority errs
in finding no “change” in terms and conditions of em-

15 If 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 Na-
tional Labor Relations Board” shall read “Posted Pursuant to a Judg-
ment of the United States Court of Appeals Enforcing an Order of the
National Labor Relations Board.”
SEA MAR COMMUNITY HEALTH CENTERS 953
ployment. I dissent and would adopt the judge’s decision
that the Respondent violated Section 8(a)(5) and (1) by
unilaterally closing the lab and subcontracting the lab
work.1
I.
An employer violates Section 8(a)(5) and (1) if it
makes a unilateral change in terms and conditions of
employment without first giving the union notice and an
opportunity to bargain. See NLRB v. Katz, 369 U.S. 736,
743 (1962). Subcontracting is a mandatory subject of
bargaining if it involves the substitution of one group of
workers for another to perform the same work and does
not constitute a change in the scope, nature, and direction
of the enterprise. See Fibreboard Paper Products Corp.
v. NLRB, 379 U.S. 203 (1964); Torrington Industries,
307 NLRB 809 (1992).
Whether or not Dental Director Narvaez’ superiors au-
thorized the dental lab, it was an ongoing operation for
over a year. The closure of the lab was a unilateral deci-
sion, made without bargaining with the Union. The clo-
sure, and the subcontracting of the lab work, resulted in
changes to employees’ duties and work hours and the
layoff of an employee.
As the judge correctly reasoned, the subcontracting es-
sentially replaced one group of employees with another.
The Respondent continues to prescribe and fit dentures
and dental appliances—the products Cornejo had fabri-
cated in the dental lab—for its patients, and simply uses
an outside lab, rather than a unit employee, to fabricate
the appliances. Accordingly, under Fibreboard and Tor-
rington, the Respondent’s decision to subcontract dental
lab work was a mandatory subject of bargaining, and,
under Katz, the Respondent violated Section 8(a)(5) and
(1) by failing to give the Union notice and an opportunity
to bargain over the decision.2

1 I join the majority in finding that the Respondent violated Sec.
8(a)(5) and (1) by refusing to bargain over wages for the dental lab
technician position, but I would not limit the remedy to the 6-day pe-
riod between the Union’s bargaining request and the closure of the
dental lab. Instead, I would adopt the judge’s recommended Order
requiring that the Respondent, inter alia, reinstate the dental lab as it
existed prior to the unilateral subcontracting of dental lab work, rein-
state Jose Cornejo to his former position as dental lab technician, and
bargain with the Union over the wages to be paid to employees working
in the dental lab technician position.
2 The judge correctly rejected the Respondent’s argument that its de-
cision represented a change in the scope or direction of the business and
therefore was not a mandatory subject of bargaining. The parties stipu-
lated that:
all work and services formerly performed by Jose Cornejo in the den-
tal lab continue to be performed and provided to the clients and pa-
tients of [the Respondent] by outsourced vendors. The scope and di-
rection of the Respondent’s enterprise has not changed with respect to
the availability of these services to our patients.
For the reasons stated by the judge, the Respondent
also violated Section 8(a)(5) and (1) by failing to give the
Union timely notice and an opportunity to bargain over
the effects of the decision.3
II.
The majority disagrees, effectively sustaining an ultra
vires defense to the Respondent’s duty to bargain. Re-
markably, the majority concludes that, because the Re-
spondent’s CEO Rogelio Riojas and Deputy Director
Mary Bartolo never authorized Narvaez to operate the in-
house dental lab in the first place, and were unaware until
April 2003 that he had done so, it had no duty to bargain
over its closure. In the majority’s view, by closing the
lab and subcontracting the work, the Respondent simply
“restored” its operations to what it had thought them to
be since March 2002, when Riojas and Bartolo rejected
Narvaez’ proposal for an expanded dental lab and dental
lab technician position. The majority treats the year-long
operation of the dental lab as if it had never occurred and
rejects Katz and Fibreboard principles because the Re-
spondent never knowingly established the dental lab op-
eration that it now knowingly and unilaterally terminates.
As the majority acknowledges, its reasoning is unprece-
dented. It is also flawed: under the circumstances, the
fact that the operation of the lab was unauthorized should
be irrelevant to the Respondent’s obligations under Sec-
tion 8(a)(5) of the Act.
The Board has rejected employers’ attempts to dis-
claim responsibility for supervisors’ acts on the basis that
the acts were unauthorized. “[A]n employer is bound by
the acts and statements of its supervisors whether spe-
cifically authorized or not.” Dobbs International Ser-
vices, 335 NLRB 972, 973 (2001); Grouse Mountain
Lodge, 333 NLRB 1322, 1328 fn. 7 (2001), enfd. 56 Fed.
Appx. 811 (9th Cir. 2003).4 That the supervisor’s acts
may have been contrary to the employer’s policy is not a
defense. The Board has held:

Moreover, the judge properly rejected the Respondent’s argument
that labor costs were not a consideration in the decision. The testimony
of Deputy Director Mary Bartolo, summarized in the judge’s decision,
shows that labor costs were a factor, even though they were not the sole
factor.
3 Indeed, the Respondent would be obligated to bargain over effects
even if the decision itself were not a mandatory subject of bargaining.
See First National Maintenance Corp. v. NLRB, 452 U.S. 666, 677 fn.
15 (1981) (employer’s decision to close part of its business was not a
mandatory subject of bargaining, but “[t]here is no doubt that petitioner
was under a duty to bargain about the results or effects of its deci-
sion . . .”).
4 See also Sec. 2(13) of the Act (“In determining whether any person
is acting as an ‘agent’ of another person so as to make such other per-
son responsible for his acts, the question of whether the specific acts
performed were actually authorized or subsequently ratified shall not be
controlling.”).
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD954
A principal may be responsible for the act of his agent
within the scope of the agent’s general authority, or the
“scope of his employment” if the agent is a servant,
even though the principal has not specifically author-
ized or indeed may have specifically forbidden the act
in question. It is enough if the principal actually em-
powered the agent to represent him in the general area
within which the agent acted.
Sunset Line & Twine Co., 79 NLRB 1487, 1509 (1948);
accord: Carpenters Local 405, 328 NLRB 788, 792 (1999).
Similarly, the Restatement (Second) of Agency § 230 pro-
vides that “[a]n act, although forbidden . . . may be within
the scope of employment.”5
Narvaez is the Respondent’s dental director. He re-
ports directly to CEO Riojas. The Respondent admits
that Narvaez is a supervisor under Section 2(11) of the
Act and an “agent [of the Respondent] generally.” Not-
withstanding that admission, the majority mistakenly
finds that operating the lab was not within the scope of
his employment, and therefore that Narvaez was not an
agent for the purpose of operating the lab. But, as the
Respondent’s dental director, Narvaez is responsible for
the clinical aspects of the dental practice in all of the
Respondent’s clinics. Narvaez has, and has exercised,
the authority to approve purchases of dental equipment.
Narvaez directly supervises the dentists, who in turn pre-
scribe and fit the Respondent’s patients with dental ap-
pliances. Thus, operation of the dental lab was within
the general area of authority in which the Respondent
had empowered Narvaez to act.
The majority also errs in finding that Narvaez lacked
apparent authority to operate the lab. Narvaez was a
statutory supervisor and a high-level director whom the
Respondent empowered to run its dental program. By
vesting Narvaez with these responsibilities, the Respon-
dent should have known that employees would perceive
Narvaez as having authority to act on the Respondent’s
behalf with respect to the work performed in the dental
clinics. See Richmond Toyota, 287 NLRB 130 (1987)
(respondent’s vice president-general manager had appar-
ent authority to voluntarily recognize the union).
Furthermore, in evaluating whether an employer has
made an unlawful unilateral change, the Board must not
disregard the unit employees’ perspective.6 Certainly,

5 See also Grouse Mountain Lodge, supra at 1328 fn. 7 (that respon-
dent may have trained its supervisors against engaging in certain acts
and conduct during an organizing campaign does not insulate respon-
dent from liability for supervisor’s unlawful interrogation); Dixie
Broadcasting Co., 150 NLRB 1054, 1079 (1965) (that supervisor’s acts
were “unauthorized by, or even contrary to, his employer’s instruc-
tions” did not discharge employer from responsibility).
6 Cf. Litton Systems, 300 NLRB 324, 419 (1990), enfd. 949 F.2d 249
(8th Cir. 1991), cert. denied 503 U.S. 985 (1992) (“What the employees
from the perspective of the unit employees, whether or
not Narvaez’ superiors authorized the lab is irrelevant to
the determination of whether closing the lab changed
their terms and conditions of employment. Narvaez
trained Cornejo in fabricating dentures and, together with
the clinic’s dentists, reviewed and approved Cornejo’s
work. Cornejo’s January 2002 and 2003 appraisals refer
to his work in the lab.7 Supervisors beneath Narvaez
were aware that Narvaez continued to operate the lab,
and employees had no reason to doubt that Narvaez had
authority to operate the lab and to assign lab work to
Cornejo.
Contrary to the majority’s conclusion, requiring the
Respondent to bargain over closing the lab would effec-
tuate the purposes of the Act. The Act’s requirement that
parties bargain in good faith over terms and conditions of
employment is designed to minimize labor disputes,
promoting industrial peace.8 Excusing unilateral action,
as the majority does here, can only breed cynicism and
discord.
For the foregoing reasons, Narvaez’ lack of permission
to operate the dental lab presents only an internal man-
agement issue between Narvaez and his superiors. It
does not—and legally cannot—affect whether the Re-
spondent’s decision to close the dental lab was a change
in unit employees’ terms and conditions of employment,
nor does it render inapplicable the basic principles of
Katz or Fibreboard and Torrington that require an em-
ployer to bargain before changing terms and conditions
of employment. Whether or not Narvaez’ superiors au-
thorized the lab, the fact remains that its closure and the
subcontracting of the lab work resulted in real changes to
unit employees’ duties and work hours and the layoff of
one employee.

have known and what they reasonably have come to expect determines
whether an issue requires bargaining.”); Intermountain Rural Electric
Assn., 305 NLRB 783, 784–785 (1991), enfd. 984 F.2d 1562 (10th Cir.
1993) (in determining whether employer made unlawful unilateral
change to health insurance premiums, judge erred in “completely disre-
gard[ing] employees’ expectations” and “ignor[ing] the impact upon
employees in assessing whether the status quo has been maintained”).
7 The evaluations were prepared and signed by Cornejo’s immediate
supervisor, Jose Gaitan, but they also contain a signature purporting to
be that of Clinic Operations Director Shannon Dawes. Dawes did not
testify, but other witnesses testified that Dawes reported to Deputy
Director Mary Bartolo, was in charge of personnel, budgetary, and
operational matters for the Respondent’s clinics, and reviewed em-
ployee evaluations.
8 “One of the primary purposes of the Act is to promote the peaceful
settlement of industrial disputes by subjecting labor-management con-
troversies to the mediatory influence of negotiation. The Act was
framed with an awareness that refusals to confer and negotiate had been
one of the most prolific causes of industrial strife.” Fibreboard, supra
at 211.
SEA MAR COMMUNITY HEALTH CENTERS 955
APPENDIX
NOTICE TO EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
The National Labor Relations Board has found that we
violated Federal labor law and has ordered us to post and
obey this notice.
FEDERAL LAW GIVES YOU THE RIGHT TO
Form, join, or assist a union
Choose representatives to bargain with us on
your behalf
Act together with other employees for your bene-
fit and protection
Choose not to engage in any of these protected
activities.
WE WILL NOT refuse to bargain in good faith with Of-
fice and Professional Employees International Union,
Local 8, over wages to be paid to Jose Cornejo for dental
lab work performed outside of his classification as CSR
dental assistant from April 4–9, 2003.
WE WILL NOT in any like or related manner interfere
with, restrain, or coerce employees in the exercise of the
rights set forth above.
WE WILL, on request, bargain with the Union, as the
exclusive representative of employees in the following
appropriate unit, concerning wages to be paid to Jose
Cornejo for dental lab work performed outside his classi-
fication as CSR dental assistant from April 4–9, 2003:
All employees employed by Sea Mar Community
Health Centers; excluding managers, confidential em-
ployees, contracted employees, temporary employees
and supervisors as defined in the Act.
SEA MAR COMMUNITY HEALTH CENTERS
Jo Anne P. Howlett, Esq., for the General Counsel.
Sonia D. Fritts, Esq. (Sebris Busto James), of Bellevue, Wash-
ington, for the Respondent.
Shelley Pinckney, Union Representative, of Seattle, Washing-
ton, for the Charging Party.
DECISION
STATEMENT OF THE CASE
JOHN J. MCCARRICK, Administrative Law Judge. This case
was tried in Seattle, Washington, on September 24 and 25,
2003, upon the General Counsel’s complaint that alleged Sea
Mar Community Health Centers (Respondent) violated Section
8(a)(1), (3), and (5) of the Act by: (a) refusing to bargain with
Office and Professional Employees International Union, Local
8 (the Union) regarding the wages to be paid to a newly an-
nounced dental lab technician position; (b) by closing its dental
lab and reassigning employee Jose Cornejo (Cornejo) from
performing dental laboratory duties to performing instrument
sterilization duties; and (c) by subcontracting the work Cornejo
performed in the dental lab since June 2001 without prior no-
tice to the Union and without affording the Union an opportu-
nity to bargain with Respondent with respect to these decisions
or the effects of the decisions. Respondent timely denied any
wrongdoing. On the entire record, including my observation of
the demeanor of the witnesses, and after considering the briefs
filed by the parties, I make the following
FINDINGS OF FACT
I. JURISDICTION
Respondent, a Washington nonprofit corporation, with an of-
fice and place of business in Seattle, Washington (Respondent’s
facility), has been engaged in the business of providing health
and social services. During the past 12 months, Respondent in
conducting its business operations derived gross revenues in
excess of $250,000 and purchased and received goods valued in
excess of $5000, which originated outside the State of Wash-
ington. Respondent admits and I find that it is an employer
engaged in commerce within the meaning of Section 2(2), (6),
and (7) of the Act and that the Union is a labor organization
within the meaning of Section 2(5) of the Act.
II. THE ISSUES
1. Did Respondent violate Section 8(a)(1) and (5) of the Act
by:
(a) Refusing to bargain in good faith with the Union about
the wages to be paid to employees in the dental laboratory
technician position.
(b) Failing to bargain with the Union over the decision or ef-
fects of the decision to close the dental lab.
2. Did Respondent violate Section 8(a)(1) and (3) of the Act
by refusing to bargain in good faith with the Union over wages
to be paid to employees in the dental lab technician position
and by refusing to bargain over the decision or the effects of the
decision to close the dental lab because employees engaged in
activities protected by Section 7 of the Act?
III. THE ALLEGED UNFAIR LABOR PRACTICES
A. The Facts
1. Introduction
Most of the facts in this case are not in dispute. Respondent
provides health care, including dental services to low income
people in the Seattle, Washington area. Respondent employs
1000 employees in 28 different facilities, including the dental
clinic located at 8915 14th Avenue South in Seattle, Washing-
ton. Rogelio Riojas (Riojas) is Respondent’s president and
chief operating officer, Mary Bartolo (Bartolo) is Respondent’s
executive vice president, Michael Leong (Leong) is Respon-
dent’s vice president for legal affairs, Shannon Daws (Daws) is
Respondent’s clinic operations director, Dr. Alejandro Narvaez
(Narvaez) is Respondent’s chief dental officer, and Philip Case
(Case) was Respondent’s dental manager at the Seattle dental
clinic.
Since at least 2000, the Union has been the exclusive collec-
tive-bargaining representative of all Respondent’s employees
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD956
excluding managers, confidential employees, contracted em-
ployees, temporary employees, and supervisors as defined in
the Act. Respondent and the Union were parties to a collective-
bargaining agreement effective from April 1, 2000, through
March 31, 2003.1 A successor agreement was entered into in
August 2003. Shelley Pinckney (Pinckney) is the Union’s rep-
resentative who administered the collective-bargaining agree-
ment with Respondent. Eric Smith (Smith) was the Union’s
chief negotiator beginning in March 2003.
2. The dental lab
Respondent employed Jose Cornejo (Cornejo) as a CSR den-
tal assistant in the Seattle dental clinic beginning May 14, 2001,
to sterilize dental equipment. In late 2001, Respondent ex-
panded its dental lab in the Seattle dental clinic and assigned
Cornejo to work full time in the lab fabricating dental prosthet-
ics such as temporary and partial dentures and flippers. Dr.
Narvaez said he expanded the dental lab because he thought it
would be productive. In February or March 2002, Bartolo be-
came aware that Cornejo was performing work as a dental
technician in the dental lab and told Dr. Narvaez that he had to
go through Respondent’s process to create the new dental labo-
ratory technician position. Accordingly, Dr. Narvaez created a
job description for dental laboratory technician and gave it to
Bartolo. At the end of March 2002, Dr. Narvaez met with Rio-
jas and Bartolo to propose creating the dental laboratory techni-
cian position, the duties of which Cornejo was in fact perform-
ing. Dr. Narvaez said he was creating the new position to save
money. However, neither Bartolo nor Riojas thought the posi-
tion was cost effective because Respondent would have to hire
new employees to replace the CSR dental assistant. Riojas also
expressed concern that the lab would take space that could be
used for a dentist and denied creation of the dental laboratory
technician position. Bartolo told Dr. Narvaez that Cornejo had
to perform his duties as a CSR dental assistant. However, Dr.
Narvaez allowed Cornejo to continue performing his duties
fabricating dental prosthetics in the lab.
In December 2002, Cornejo approached Pinckney and told
her his official job title was CSR dental assistant but that he
was performing other work in the Seattle dental lab. Cornejo
asked if the Union could assist in having a new job position
created to reflect his actual duties in the lab.
In January 2003, the Union began the process of bargaining a
successor collective-bargaining agreement with Respondent.
As a result of Cornejo’s request, in late March 2003 the Union
gave Respondent a proposal, section 16.3(a) JOB
DESCRIPTIONS2 which provided Respondent would periodi-
cally review and update job descriptions. Members of Respon-
dent’s bargaining team, Carolina Lucero (Lucero), Respon-
dent’s vice president for long-term care and Judith Puzon (Pu-
zon), Respondent’s preventative health services director, asked
why the Union needed this language and the Union gave
Cornejo as an example of an individual working out of his job
classification. After the bargaining session, Lucero and Puzon
discussed the Cornejo job classification with Dr. Narvaez who

1 GC Exh. 6.
2 GC Exh. 8.
provided them with the dental laboratory technician job de-
scription3 he had created in March 2002.
At the April 4, 2003, bargaining meeting Puzon gave the Un-
ion the dental laboratory technician job description. Puzon said
they had looked into the Cornejo situation and he was not clas-
sified as a CSR dental assistant but as a dental laboratory tech-
nician as reflected in General Counsel’s Exhibit 9. Pinckney
said the Union had never heard of a dental laboratory techni-
cian and it was not listed in the salary schedule attached to the
collective-bargaining agreement.4 Pinckney said since the den-
tal laboratory technician position did not exist, Respondent had
to bargain over the position. Puzon said the position did exist
and Respondent did not have to bargain since $10.40 an hour,
the amount paid to the CSR dental technician, is enough.
After the April 4 bargaining session, Riojas and Leong met
with Dr. Narvaez. Leong asked if Cornejo was still doing den-
tal lab work. Dr. Narvaez replied that he was. Riojas said he
did not approve the position since he did not want to exchange
patient care areas for a laboratory. Dr. Narvaez said we did not
have the equipment to furnish a patient care room.5 Riojas told
Dr. Narvaez to cease operating the dental lab and to return
Cornejo to his original duties as CSR dental assistant. On April
9, 2003, Cornejo was reassigned to the CSR dental assistant
position and Respondent sent the denture work Cornejo had
been performing to outside labs.
By the time of the April 10, 2003 bargaining session, the Un-
ion had learned Respondent had shut the Seattle dental lab and
reassigned Cornejo to the CSR dental assistant position. Just
before the meeting, Pinckney called Cornejo’s supervisor,
Case, and told him to stop making changes and to bargain about
the changes. At the bargaining session on April 10, chief union
negotiator Smith told Lucero and Puzon that the Union was
aware the dental lab had been closed and that Respondent had
to stop making changes and bargain. Puzon said they would not
bargain and Lucero said we don’t take orders from you. Both
then walked out of the meeting.
Since early April 2003 all of the denture work, which had
been made by Cornejo in the dental lab, continues to be offered
and provided to Respondent’s patients. However, this work is
now subcontracted to non-unit vendors. As stipulated by Re-
spondent, this outsourcing of unit work does not represent any
type of change in the scope of work or services offered by Re-
spondent to its clients or patients.6
In addition to the Union’s oral requests at the bargaining ta-
ble to bargain over the decision to close the dental lab, the Un-
ion, beginning on April 1, 2003, sent written requests to Re-
spondent to bargain over both the decision and effects of the
decision to close the lab.7 On April 16, 2003, Respondent of-
fered to bargain with the Union over the effects of its decision
to close the lab.8

3 GC Exh. 9.
4 GC Exh. 6 at 28–29.
5 To date the lab has not been converted to a patient care room, re-
ferred to as an operatory in the transcript.
6 Jt. Exh. 9.
7 Jt. Exh. 1.
8 Jt. Exh. 3.
SEA MAR COMMUNITY HEALTH CENTERS 957
B. The Analysis
The General Counsel contends that Respondent violated Sec-
tion 8(a)(1) and (5) of the Act by failing to bargain over wages
paid to the dental lab technician and over the decision and ef-
fects of the decision to close the lab. The General Counsel
argues that Respondent’s decision to close the lab and subcon-
tract out unit work is a mandatory subject of bargaining con-
trolled by the Fibreboard 9 line of cases. In addition counsel
for the General Counsel argues that Respondent’s actions in
refusing to bargain over wages, in closing the lab and subcon-
tracting out the unit work violated Section 8(a)(1) and (3) of the
Act since these actions were taken in retaliation for employees’
exercise of their Section 7 rights.
Respondent takes the position that its decision to close down
a part of its business is not a mandatory subject of bargaining as
set forth in First National Maintenance.10 Respondent con-
tends it did not violate Section 8(a)(3) of the Act since there is
no evidence of antiunion animus.
1. The law
In Fibreboard, supra, the Supreme Court affirmed the
Board’s second Fibreboard decision11 and held that the deci-
sion to subcontract is a mandatory subject of bargaining. The
Supreme Court noted that the company’s basic operation did
not change as a result of subcontracting as the subcontract in-
volved replacing employees in the extant bargaining unit with
those of an independent contractor.
In Westinghouse Electric Corp., 150 NLRB 1574 (1965), the
Board interpreted the Supreme Court’s Fibreboard decision
and set forth a series of factors the Board would consider in
determining if subcontracting required bargaining. Bargaining
over the decision to subcontract would not be required if (1) the
subcontracting is motivated solely by economic reasons (2) it is
the employer’s custom to subcontract various kinds of work,
(3) no substantial variance is shown in kind or degree from the
established past practice of the employer, (4) no significant
detriment results to the employees in the bargaining unit, and
(5) the union has had an opportunity to bargain about changes
in existing subcontracting practices at general negotiating meet-
ings.
Later, in First National Maintenance, supra, the Supreme
Court found no obligation to bargain over the decision to par-
tially close a portion of the employer’s maintenance operation
with one of its customers. The Supreme Court noted that the
employer had no intention to replace the discharged employees
or to move that operation elsewhere. Petitioner’s sole purpose
was to reduce its economic loss, and the union made no claim
of antiunion animus. The Court said the facts in First National
Maintenance distinguished it from the subcontracting issue
presented in Fibreboard. The decision to halt work at this spe-
cific location represented a significant change in petitioner’s

9 Fibreboard Paper Products Corp. v. NLRB, 379 U.S. 203 (1964).
10 First National Maintenance Corp. v. NLRB, 452 U.S. 666 (1981).
11 Fibreboard Paper Products Corp., 130 NLRB 1558 (1961), modi-
fied 138 NLRB 550 (1962), enfd. 322 F.2d 411 (DC Cir. 1963), affd.
379 U.S. 203 (1964).
operations, a change not unlike opening a new line of business
or going out of business entirely.
In Otis Elevator Co., 269 NLRB 891 (1984) (Otis Elevator
II), the Board attempted to apply the principles of First Na-
tional Maintenance. In Otis Elevator II, the employer trans-
ferred and consolidated operations. The Board found the deci-
sion was not a mandatory subject of bargaining. The majority
focused on whether the employer’s decision turns on operating
costs.12 The Board held that since the employer’s decision in
Otis Elevator II turned on “a change in the nature and direction
of a significant facet of its business” not on labor costs, the
action was at the core of entrepreneurial control and was not
amenable to bargaining.13 The majority distinguished that sub-
contracting decisions must be bargained under Fibreboard
“because in fact the decision turns upon a reduction of labor
costs.”14
Most recently in Dubuque Packing Co., 303 NLRB 386
(1991) (Dubuque Packing Co. II), the Board overruled Otis
Elevator II and set forth a new test for determining whether an
employer’s decision to relocate bargaining unit work is a man-
datory subject of bargaining. Initially, the Board noted the
differences between subcontracting in Fibreboard and the deci-
sion to close in First National Maintenance.
First, in First National Maintenance, the employer
“had no intention to replace the discharged employees or
to move that operation elsewhere.” 452 U.S. at 687. In
contrast, Fibreboard involved the “replace[ment] [of] ex-
isting employees with those of an independent contractor.”
379 U.S. at 213. Second, in First National Maintenance,
the Court was confronted with a decision changing the
scope and direction of the enterprise “akin to the decision
whether to be in business at all.” 452 U.S. at 677. In Fi-
breboard, the employer’s decision “did not alter the Com-
pany’s basic operation.” 379 U.S. at 213. Third, in First
National Maintenance, the employer’s decision was based
“solely [on] the size of the management fee [the nursing
home] was willing to pay.” 452 U.S. at 687. In Fibre-
board, “a desire to reduce labor costs . . . was at the base
of the employer’s decision to subcontract.” First National
Maintenance. 452 U.S. at 680.15
The Board went on to articulate its new test in determining if
decisions to relocate are mandatory subjects of bargaining.
Based on the foregoing considerations, we announce
the following test for determining whether the employer’s
decision is a mandatory subject of bargaining. Initially, the
burden is on the General Counsel to establish that the em-
ployer’s decision involved a relocation of unit work unac-
companied by a basic change in the nature of the em-
ployer’s operation. If the General Counsel successfully
carries his burden in this regard, he will have established
prima facie that the employer’s relocation decision is a
mandatory subject of bargaining. At this juncture, the em-

12 Otis Elevator II, supra at 892.
13 Id. at 891.
14 Id. at 893.
15 Dubuque Packing Co. (II), supra at 390–391.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD958
ployer may produce evidence rebutting the prima facie
case by establishing that the work performed at the new
location varies significantly from the work performed at
the former plant, establishing that the work performed at
the former plant is to be discontinued entirely and not
moved to the new location, or establishing that the em-
ployer’s decision involves a change in the scope and direc-
tion of the enterprise. Alternatively, the employer may
proffer a defense to show by a preponderance of the evi-
dence: (1) that labor costs (direct and/or indirect) were not
a factor in the decision or (2) that even if labor costs were
a factor in the decision, the union could not have offered
labor cost concessions that could have changed the em-
ployer’s decision to relocate.16
Whether or not there is an obligation to bargain over a decision
to contract out or transfer bargaining unit work, there is a duty
to bargain over the effects of such decisions. The employer
must afford the union an opportunity to bargain in advance of
the implementation of the employer’s decision. John R. Crow-
ley & Bros., 297 NLRB 770 (1990).
Finally, Section 8(a)(3) of the Act prohibits employers from
discriminating in regard to an employee’s, “tenure of employ-
ment . . . to encourage or discourage membership in any labor
organization.”17
In 8(a)(3) cases the employer’s motivation is frequently in
issue, therefore the Board applies a causation test to resolve
such questions. Wright Line, 251 NLRB 1083, 1088 (1980).
The Wright Line test requires the General Counsel to make a
prima facie showing sufficient to support an inference that the
employee’s protected conduct motivated the employer’s ad-
verse action. “The critical elements of discrimination cases are
protected activity known to the employer and hostility toward
the protected activity.” Western Plant, 322 NLRB 183, 194
(1996). Although not conclusive, timing is usually a significant
element in finding a prima facie case of discrimination. Id. at
194.
2. The discussion
In applying the principles set forth above, I find that Re-
spondent’s decision to close the dental lab was a mandatory
subject of bargaining. The nature of Respondent’s decision is
more akin to the Fibreboard subcontracting decisions than the
First National Maintenance partial closing decisions.
Initially, the facts of this case, unlike the First National
Maintenance facts, reflect that Respondent did not close down
a portion of its business but rather reverted to its practice of
subcontracting out virtually all of its dental prosthetic work for
its patients. Respondent’s operation continued unchanged.
Respondent’s decision to close the lab and subcontract the pros-
thetic work is not analogous to an employer who goes out of
business or opens a new business. Respondent continued to
provide dental care and dental prosthetics to patients. The work
Cornejo performed for Respondent was again performed by
outside contractor’s employees. Most significantly, Respon-
dent’s decision turned on labor costs and was amenable to the

16 Id. at 391.
17 29 U.S.C. § 158(a)(3).
process of collective bargaining. Respondent’s witness, Bar-
tolo testified that when the initial decision was made in March
2002 not to have in house dental labs, a significant factor in
Respondent’s decision was that it would not be cost effective
since additional employees would have to be hired. In Torring-
ton Industries, 307 NLRB 809 (1992), the Board held that in a
Fibreboard situation the replacement of employees in the exist-
ing bargaining unit with those of an independent contractor to
do the same work under similar conditions of employment—is
a statutory subject of bargaining under Section 8(d). In such
cases the Board found it is unnecessary to apply any other tests:
Such decisions, as the Court in First National Maintenance
agreed, do not involve “a change in the scope and direction of
the enterprise” and thus are not core entrepreneurial decisions
which are beyond the scope of the bargaining obligation de-
fined in the Act. 452 U.S. at 677 citing Fibreboard, 379 U.S.
at 223 (Stewart, J., concurring). Thus, when the record shows
that essentially that kind of subcontracting is involved, there is
no need to apply any further tests in order to determine
whether the decision is subject to the statutory duty to bargain.
The Supreme Court has already determined that it is. See also
First National Maintenance, supra, 452 U.S. at 687–688 (em-
phasizing that the decision at issue there involved discharging
employees without replacing them).18
Accordingly, I find that Respondent’s decision to close the
dental lab was a mandatory subject of bargaining. Torrington
Industries, supra. In closing the dental lab without giving the
Union an opportunity to bargain over the decision to close,
Respondent violated Section 8(a)(1) and (5) of the Act.
Further, by refusing to bargain over wages of the dental lab
assistant position, Respondent violated Section 8(a)(1) and (5)
of the Act. The testimony is uncontradicted that on April 4,
2003, Pinckney demanded bargaining over the wages to be paid
to the dental lab assistant and that Respondent refused. By the
time the parties returned to the bargaining table, Respondent
had closed the lab, rendering any further bargaining over wages
moot.
Respondent decided to close the dental lab for the second
time on or about April 4, 2003. The Union was not formally
notified of this decision until April 10, 2003, after Respondent
had already closed the lab and on April 16, 2003, Respondent
offered to bargain over the effects of its decision to close the
lab. Given the untimely nature of the notification to the Union
of Respondent’s decision to close the lab, the Union was under
no obligation to demand effects bargaining and Respondent
violated Section 8(a)(1) and (5) of the Act by failing to provide
timely notice to the Union to bargain over the effects of Re-
spondent’s decision to close the lab. John R. Crowley & Bros.,
Inc., supra.
With respect to General Counsel’s contention that Respon-
dent’s decision to close the lab violated Section 8(a)(1) and (3)
of the Act, I find that General Counsel has failed to establish a
prima facie case. Antiunion animus is an essential element of
an 8(a)(3) violation. Here the record is devoid of any hostility
by Respondent toward the Union or any of its members. The

18 Torrington Industries, 307 NLRB at 810.
SEA MAR COMMUNITY HEALTH CENTERS 959
decision to subcontract the dental lab work, as noted above,
was based on economic considerations, rather than employees’
exercise of their Section 7 rights. While at first blush the tim-
ing of Respondent’s ultimate decision to close the lab is suspi-
cious since it coincided with the Union’s demand to bargain
over inclusion of the dental lab technician in the collective-
bargaining agreement, it must be remembered that the decision
to close the lab had been made over a year before. It was only
Dr. Narvaez insubordinate decision to retain the dental lab that
produced the issue during bargaining in 2003. I find the essen-
tial element of anti union animus lacking in this case and that
Respondent did not violate Section 8(a)(1) or (3) of the Act by
refusing to bargain over wages, by closing the lab and subcon-
tracting out the unit work. I will dismiss that portion of the
complaint.
CONCLUSIONS OF LAW
1. By refusing to bargain in good faith over wages to be paid
to employees in the position of dental lab technician and by
refusing to provide notice or an opportunity to bargain in good
faith over Respondent’s decision and the impact of that deci-
sion to close its dental lab and subcontract the dental lab work,
Respondent Sea Mar Community Health Centers violated Sec-
tion 8(a)(1) and (5) and Section 2(6) and (7) of the Act.
2. Respondent Sea Mar Community Health Centers has not
otherwise violated Section 8(a)(1) or (3) of the Act, as alleged
in the complaint.
REMEDY
Having found that the Respondent has engaged in certain un-
fair labor practices, I find that it must be ordered to cease and
desist and to take certain affirmative action designed to effectu-
ate the policies of the Act.
The Respondent, having refused to bargain in good faith
over the decision and effects of its decision to subcontract den-
tal lab work and over the wages to be paid to the dental lab
technician, must reinstate the extended dental lab as it existed
prior to its closure on or about April 10, 2003, restore Jose
Cornejo to his duties as dental lab technician, and bargain with
the Union over the wages to be paid to employees working in
the dental lab technician position.
[Recommended Order omitted from publication.]