U.S. Contractors, Inc.

National Labor Relations Board - Board Decisions

Sep 3, 1981

257 N.L.R.B. 1180 (N.L.R.B. 1981)

DECISIONS OF NATIONAL LABOR RELATIONS BOARD
U.S. Contractors, Inc., and The Dow Chemical Com-
pany, U.S.A., Texas Division and International
Union of Operating Engineers, Local 564, AFL-
CIO. Case 23-CA-7426
September 3, 1981
DECISION AND ORDER
BY MEMBERS FANNING, JENKINS, AND
ZIMMERMAN
On June 4, 1980, Administrative Law Judge
David G. Heilbrun issued the attached Decision in
this proceeding. Thereafter, Respondent U.S. Con-
tractors filed exceptions and a supporting brief; the
General Counsel filed limited exceptions, a sup-
porting brief, and an answering brief to Respond-
ent Dow Chemical's exceptions; the Charging
Party filed limited exceptions and a supporting
brief; and Respondent Dow Chemical filed cross-
exceptions, a supporting brief, and an answering
brief to the General Counsel's and the Charging
Party's exceptions.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the Na-
tional Labor Relations Board has delegated its au-
thority in this proceeding to a three-member panel.
The Board has considered the record and the at-
tached Decision in light of the exceptions and
briefs and has decided to affirm the rulings, find-
ings,' and conclusions of the Administrative Law
Judge only to the extent consistent herewith.
1. We agree with the Administrative Law
Judge's determination that Respondent U.S. Con-
tractors (hereafter referred to as USC) violated
Section 8(a)(1) of the Act by threatening its em-
ployees with the loss of their jobs if they voted in
favor of the Union.
2. We also agree with the Administrative Law
Judge's conclusion that Respondent USC and Dow
Chemical (hereafter referred to as Dow) are not
joint employers. We further agree that the allega-
tion that Respondent Dow acted in concert with
Respondent USC to cancel the custodial contract
in violation of Section 8(a)(3) and (1) of the Act
should be dismissed.
3. Our first disagreement with the Administrative
Law Judge concerns his dismissing all charges of
8(a)(1) violations against Respondent Dow. We
find that a statement made by Dow Supervisor
Bartlett to USC employee Mack that if the USC
' Respondent U.S. Contractors, the Charging Party, and the General
Counsel have excepted to certain credibility findings made b the Admin-
istrative Law 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 (3d Cir. 1951). We have carefully exam-
ined the record and find no basis for reversing his findings
257 NLRB No. 152
janitors unionized they would "definitely go out
the gate" would reasonably tend to interfere with
employees' exercise of Section 7 rights in violation
of Section 8(a)(1). Bartlett admitted that he openly
related unionism to job uncertainty, and Mack's
testimony about this conversation with Bartlett was
credited by the Administrative Law Judge. We
therefore reverse the Administrative Law Judge,
and find that this statement violated Section 8(a)(1)
of the Act.
4. Our major disagreement with the Administra-
tive Law Judge concerns his findings that Re-
spondent USC violated Section 8(a)(5) and (3) of
the Act. The complaint alleges that on February
14, 1979, USC failed and refused to bargain with
the Union over its decision to cease operating its
janitorial division and lay off its entire janitorial
work force. It further alleges that USC thereafter
refused to bargain about the effects of this decision
upon the terminated employees. The General
Counsel attempted to establish that this decision
was motivated by union animus and a desire to re-
taliate against its custodial employees for choosing
to be represented by a union.
The Administrative Law Judge pieced together a
highly coincidental sequence of events, occurring
during the approximately 6 weeks between the date
of the Union's victory in the representation elec-
tion and February 14, 1979, to conclude that USC's
actions violated the Act. While we agree that these
events raise suspicions about the lawfulness of
USC's conduct, the record evidence fails to prove
that USC acted unlawfully.
USC is engaged primarily as a mechanical and
maintenance contractor in the petrochemical indus-
try. It employs approximately 1,400 persons in the
building and construction trades. In 1972, at the re-
quest of Dow, for whom USC was already provid-
ing construction work, USC expanded into the cus-
todial services business. However, USC limited its
custodial contracting to this single operation at
Dow. Its entire custodial work force consisted of
60 employees. This janitorial operation was gov-
erned by yearly purchase-order contracts between
USC and Dow, the last of which was executed on
December 29, 1978, 1 day after the USC janitorial
employees voted in favor of union representation.
The Administrative Law Judge imputed unlaw-
ful motives to USC's actions following the Union's
election victory. He determined that its January 18,
1979, request for a rate increase, occurring so
shortly after entering into the purchase order con-
tract and the Union's certification, was an attempt
to drive up Dow's costs and force Dow to seek al-
ternative, less costly janitorial services-thereby
providing USC with a convenient and powerful
1180
U.S. CONTRACTORS, INC.
bargaining weapon. He found further support for
his theory in USC's subsequent request for retroac-
tive application of the rate hike, reasoning that
Dow predictably would be unwilling to expend the
amount of money necessary to meet this request.
On this basis he concluded that USC's efforts to
avoid bargaining with the Union and retaliate
against its employees for unionizing culminated
with its opening remarks at the February 14, 1979,
meeting with the Union. He determined that USC's
announcement that it was contemplating the cessa-
tion of its janitorial operation because of the in-
creased financial burden created by Dow's refusal
to apply the rate increase retroactively and Dow's
decision to cut back the number of hours of work
scheduled for USC's janitors constituted the fru-
ition of weeks of scheming to achieve this end. The
Administrative Law Judge concluded that these
facts establish that USC failed to fulfill its obliga-
tion to notify the Union of its plan to end its janito-
rial operation and the effects of such decision on
the employees who would consequently lose their
jobs.
We agree with Respondent USC's contention
that the 8(a)(5) and (3) findings of the Administra-
tive Law Judge cannot stand. The Administrative
Law Judge found, but inexplicably failed to consid-
er, that USC's legal counsel and chief spokesman
during the February 14 session recognized and ad-
vised the other USC representatives of the necessi-
ty of bargaining about its ultimate decision whether
to cancel the remaining term of the custodial con-
tract and the effects that this decision would have
on its employees. The Administrative Law Judge
also failed to recognize that USC entered the meet-
ing fully prepared to discuss with the Union this
turn of events and that it was the union team
which abruptly ended the meeting with the com-
ment that there was nothing left to discuss. USC
did not announce to the Union that it had irrevoca-
bly decided to end its custodial operation, but
rather it recounted a series of factors which point-
ed to this result and requested discussion and re-
sponse from the Union. The Union did not avail
itself of the opportunity and left the meeting room.
It was after the meeting had concluded in this
manner that USC notified Dow that it would ter-
minate its custodial services effective March 17,
1979. The record clearly establishes that USC did
not seek to avoid bargaining over its decision to
terminate the custodial division, but rather it was
the Union which misinterpreted the situation as a
fait accompli and failed to negotiate about the issue.
Therefore, we conclude that Respondent USC did
not fail to bargain over this decision. Edward Axel
Roffman Associates, Inc., 147 NLRB 717 (1964).
Further, we conclude that USC cannot be found to
have violated the Act by failing to engage in ef-
fects bargaining for the simple reason that at no
time subsequent to this decision did the Union ever
request that such bargaining take place.2
Moreover, we conclude that, even if the Union
had been correct in its belief that USC had decided
unilaterally to discontinue its involvement in custo-
dial contracting, we would still not find that Re-
spondent violated the Act because that decision
was prompted solely by economic reasons. Con-
trolling this case is the Supreme Court's recent de-
cision in First National Maintenance Corp. v.
N.L.R.B., 3 wherein the Court held that, when eco-
nomic reasons compel an employer to decide
whether or not to shut down a part of its business,
the employer's need to operate freely outweighs
any incremental benefit that might be gained
through a union's participation in the decisionmak-
ing. The Court assessed the relative needs of
unions and employers in such circumstances and
found that the myriad factors an employer must
consider and be prepared to respond to necessitate
unencumbered freedom of operation. While recog-
nizing that unions have legitimate concerns about
job preservation, the Court concluded that eco-
nomic exigencies faced by an employer, which may
hinge on timing, secrecy, and flexibility of action,
necessitate untrammeled authority to act.
Under the circumstances presented in the instant
case, USC was terminating its custodial business
entirely and was not required to consult with the
Union prior to exercising its management preroga-
tive in this regard. USC maintained a single, small
custodial contracting operation within its construc-
tion and maintenance enterprise. In deciding to ter-
minate this one operation, it ceased to engage in
the custodial contracting business.
Following similar reasoning and closely tied to
our conclusions above, we find that no 8(a)(3) vio-
lation has been established. USC's motivation in
terminating the janitorial employees was purely
economic and not a subterfuge to avoid bargaining
with the Union. Much like the situation presented
in Thompson Transport Company, Inc.,4 we are
faced with suspicious circumstances lending an ap-
pearance of illegality to Respondent's conduct.
However, an examination of the record reveals that
the unfavorable economic prospects of continuing
to engage in a particular business undertaking
rather than discriminatory reasons led to the cessa-
: See Mororesearch Company and Kems Corporation. 138 NLRB 1490
(1962); White Consolidated Industries. Inc.. 154 NLRB 1593 (1965); Inter-
national Ofjtsr Corp.. ct al.. 210 NLRB 854 (1974).
"No. 80-544 1981).
' 165 NLRB 746 (1967)
1181
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
tion of the enterprise. In the instant case, the mar-
ginal profitability of the janitorial division had
turned into a loss, which climbed to nearly $24,000
during the 12 months between June 1978 and May
1979. In addition, Dow had cut by one-third the
number of hours of work allotted to the USC jani-
tors, contributing to greater overhead costs and ex-
acerbating the financial difficulties of the operation.
In a last effort to get out of this plight, USC asked
for a retroactive rate increase. Dow's rejection of
this request sealed the financial fate of the janitorial
division5 and dictated the course which USC's di-
rectors would take. For these reasons, therefore,
we are convinced that USC's actions in terminating
its custodial division employees were not motivated
by unlawful considerations, but were founded upon
substantial economic factors causing the unprofita-
bility of pursuing the endeavor further.
Accordingly, we shall dismiss the 8(a)(5) and (3)
allegations against Respondent USC.
CONCLUSIONS OF LAW
1. U.S. Contractors, Inc., and The Dow Chemi-
cal Company, U.S.A., Texas Division, are each em-
ployers within the meaning of the Act.
2. International Union of Operating Engineers,
Local 564, AFL-CIO, is a labor organization
within the meaning of the Act.
3. Local 564 was, until USC discontinued its cus-
todial operation, the exclusive bargaining repre-
sentative of USC's custodial employees.
4. Respondent Dow did not violate Section
8(a)(3) and (1) of the Act by acting in concert with
Respondent USC in canceling a custodial contract
to be performed by USC's employees at Dow's fa-
cility.
5. Respondent USC did not violate Section
8(a)(5), (3), and (1) of the Act by discontinuing its
custodial operation and laying off its custodial
work force.
6. Respondent USC violated Section 8(a)(1) of
the Act by threatening employees with job losses
as a consequence of selecting the Union as their
representative.
7. Respondent Dow violated Section 8(a)(l) of
the Act by threatening USC's employees that
USC's employees would "go out the gate" if they
unionized.
8. The unfair labor practices enumerated above
affect commerce within the meaning of Section
2(6) and (7) of the Act.
5 We wish to emphasize at this point that we have affirmed the Admin-
istrative Law Judge's finding that Dow's relationship with USC was a
purely arm's-length business association and that there is no evidence that
Dow unlawfully conspired with USC to cut back on the hours assigned
to the USC custodians or to deny retroactive application of the rate in-
crease
THE REMEDY
Having found that Respodent USC and Re-
spondent Dow have violated Section 8(a)(l) of the
Act by various threats to the job security of USC's
employees, we shall order each Respondent to
cease and desist from threatening employees with
loss of their jobs for selecting the Union as their
collective-bargaining representative.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor Re-
lations Board hereby orders that Respondent U.S.
Contractors, Inc., Clute, Texas, and Respondent
Dow Chemical Company U.S.A., Texas Division,
Freeport, Texas, their officers, agents, successors,
and assigns, shall:
1. Cease and desist from:
(a) Unlawfully threatening employees of Re-
spondent U.S. Contractors, Inc., with loss of their
jobs for selecting the Union as their collective-bar-
gaining representative.
(b) In any like or related manner interfering
with, restraining, or coercing employees in the ex-
ercise of the rights guaranteed them in Section 7 of
the Act.
2. Take the following affirmative action found
necessary to effectuate the policies of the Act:
(a) Post at their respective plants in Clute and
Freeport, Texas, copies of the attached notice
marked "Appendix."6 Copies of said notice, on
forms provided by the Regional Director for
Region 23, after being duly signed by Respondents'
authorized representatives, shall be posted by Re-
spondents immediately upon receipt thereof, and be
maintained by them for 60 consecutive days there-
after, in conspicuous places, including all places
where notices to employees are customarily posted.
Reasonable steps shall be taken by Respondents to
insure that said notices are not altered, defaced, or
covered by any other material.
(b) Notify the Regional Director for Region 23,
in writing, within 20 days from the date of this
Order, what steps the Respondents have taken to
comply herewith.
IT IS FURTHER ORDERED that the complaint in all
other respects be, and it hereby is, dismissed.
6 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 Pursu-
ant to a Judgment of the United States Court of Appeals Enforcing an
Order of the National Labor Relations Board."
1182
U.S. CONTRACTORS, INC.
APPENDIX
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
WE WILL NOT threaten employees with loss
of their jobs for selecting the Union as their
collective-bargaining representative.
WE WILL NOT in any like or related manner
interfere with, restrain, or coerce employees in
the exercise of the rights guaranteed them in
Section 7 of the National Labor Relations Act,
as amended.
U.S. CONTRACTORS, INC., AND THE
Dow CHEMICAL COMPANY
DECISION
STATEMENT OF THE CASE
DAVID G. HEILBRUN, Administrative Law Judge: This
case was heard at Angleton, Texas, over November 27-
30, 1979, based on an amended complaint alleging that
U.S. Contractors, Inc., herein called USC, and The Dow
Chemical Company, U.S.A., Texas Division, herein
called Dow, acting in concert, violated Section 8(a)(l)
and (3) of the National Labor Relations Act, as amend-
ed, by canceling a custodial contract to be performed at
Dow's Freeport, Texas, facility with the result that all
custodial employees of USC were terminated, assertedly
done because USC's employees were represented by In-
ternational Union of Operating Engineers, Local 564,
AFL-CIO, herein called the Union, and for the purpose
of chilling unionism among the employees of various
other contractors, and that USC otherwise violated Sec-
tion 8(a)(1) and (5) of the Act by failing and refusing to
recognize and bargain with the Union since on or about
March 17, 1979, after interfering with, restraining, and
coercing employees through various utterances of its su-
pervisory agents.
Upon the entire record,' my observation of the wit-
nesses, and consideration of post-hearing briefs, I make
the following:
FINDINGS OF FACT AND RESULTANT CONCLUSIONS
OF LAW
This case concerns Plant B of an enormous petro-
chemical complex operated by Dow. 2 Dow employs
I Errors in the transcript have been noted and corrected.
2 Respondent USC is a Texas corporation with principal office and
place of business located in Clute, Texas, where it is engaged in provid-
ing maintenance and construction services for the petrochemical industry,
annually purchasing and receiving goods and materials valued in excess
of 50,000 which are shipped to its Texas facility from outside that State.
Respondent Dow is a Delaware corporation with an office and place of
business located in Freeport. Texas, where it is engaged in the manufac-
ture of various chemical products. annually selling and shipping goods
and materials valued in excess of $50,000 directly from its Texas facility
to firms located outside that State. On these admited facts I find that
USC and Dow are each employers engaged in commerce within the
7,200 persons throughout the sprawling facility,3 and nu-
merous construction, maintenance, or specialty contrac-
tors are constantly engaged in performance of services at
the premises. The relationship of such firms to Dow
arises under either an "A & B" form contract, one pro-
viding for continuous (often annual) performance, or a
"lump sum" contract awarded for a specific undertaking.
Dow maintains separate gates through which union and
nonunion contractor employees respectively pass to enter
the facility. USC is principally a nonunion mechanical
contractor employing approximately 1,400 persons in
many building and construction trades, about half of
whom are frequently on assignment at the complex pur-
suant to awards made by Dow's purchasing department.
USC has performed custodial services at Plant B for
several years. The most recent complete contract was
one let on December 30, 1977, as A & B-43594-PO9. It
called for USC to "FURNISH LABOR, TOOLS AND
EQUIPMENT TO PERFORM JANITORIAL WORK
FOR PLANT B, as and when requested by Dow Super-
vision." An attachment detailed the basis of "work [to
be] performed" including an inversely changing "man-
hour rate" as total weekly billing hours increased, and
the particulars of overtime, employment tax apportion-
ment, equipment rental, responsibility for furnishing ex-
pendable cleaning supplies, plus an acknowledgment of
holidays to be observed. This attachment specified that
quoted rates "include all transportation, salaries, wages,
insurance premiums (if any), office personnel, profit and
overhead."
In August 1978 custodial employees Bonnie Anderson
and Sally Carlson made contact with Bobby Smith, busi-
ness agent of the Union, and an organizing effort was
commenced.4 A representation petition was filed on Sep-
tember 29, resulting in direction of an election that was
held on December 28. A vote of 35 to II favored the
Union, and its certification as exclusive collective-bar-
gaining representative was issued on January 8. As this
ensued NLRB Case 23-CA-7425 was in process, upon
which a settlement agreement was reached on January
23 in relation to various allegations of USC having vio-
lated Section 8(a)(1). As typically so, the settlement re-
quired posting of a notice which recited that offers of
employment had been made to four persons (including
Anderson and Carlson) with backpay also running to
certain of the group.
The custodial work force of about 60 persons was
managed by Ronald Steinbach. For the period Novem-
ber 20 to February 16 he was assisted by Edward
Roddy, whose duties "were roughly the same as his . . .
to coordinate the janitorial duties of each janitorial em-
ployee, to deal with both employees and customers." As
election date on the RC case approached, Roddy occa-
meaning of Sec. 2(6) and (7) of the Act, and that otherwise the Union is a
labor organization within the meaning of Sec 2(5).
:' Of this number, approximately 600 persons function as first-line super-
visors. Further. Dow deals with a total of six different labor organiza-
tions, the largest of which is the Union herein with a bargaining unit of
just over 2.00()
'All dales and named months hereafter falling in July through Decem-
ber are 1978; those falling in January through June are 1979 unless in
either case expressly shown otherwise.
1183
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
sionally spoke about it with employees. Colena Hall testi-
fied that in early December, while in a company van
with Roddy, he said that Dow did not want USC's cus-
todial employees to vote in a union and their resolve was
so great that it scared him to death. Hall added that the
subject led to argument between employee Glenda Kelly
and Roddy, causing him to remind her of how few union
people were coming through the gate reserved for such
contractors. Bessie Robinson and Sara Mack were each
present and the latter credibly corroborated his express-
ing that he would not vote for the Union because Dow
did not want a union. Gloria Dunlap testified that about
a week before the election Roddy had separately told
her that employees would lose their jobs if they went
union, again associating this to Dow opposing the pres-
ence of union contractors and that a predecessor compa-
ny to USC had been eliminated because its employees
became represented by a union.6 Carlson testified that on
December 27 she was spoken to by Roddy, who said he
felt the women would lose their jobs if they went for the
Union. She added that he repeated the theme of how
this matter scared him, and that advent of the Union
would even cause him to face working outside in rain
and cold weather.
Roddy testified that he was solicited by USC for the
job he had held, and that upon reporting for work on
November 20 he was advised by both Harton and Ray-
mond Kalmans, whose law firm was then representing
USC in regard to the representation case, that he was
not to campaign among employees, should confine him-
self to answering questions, should not interrogate em-
ployees, and should generally comply with a written set
of instructions to supervisors on the subject. As to the
various utterances Roddy recalled the episode described
mainly by Hall, testifying it was one of several group
discussions he had with employees prior to the election.
He asserted that on this occasion custodial employee
Glenda Kelly had opened discussion with a question
about what was likely to happen, which he shrugged off
adding when she alluded to the contractor gate signs that
listed employers meant only they were authorized to
enter and did not necessarily mean that they were cur-
rently working with active employees. He recalled refin-
ing this explanation by saying that a proper comparison
would be to count the number of timecards at respective
gates. Roddy denied stating at this time that the situa-
See fn. 1, supra.
The executive hierarchy of USC as of December included Lynn
Dennis Monical as president and several others of that surname as offi-
cers. Bill McIntyre, a cofounder and former president, was then in
charge of inside engineering and officer Ernie Rea was responsible for
administration. Jim Barton was manager of maintenance and services
with overall responsibilities constituting him the immediate superior of
Steinbach. Up until approximately 10 years ago Monical's father had
been active as a contractor of that vicinity in a business named Monical
& Powell.
'USC's working custodians at the time were primarily (if not exclu-
sively) female.
" Carlson also recalled a subsequent conversation with Roddy while
the two were alone in which he expressed shock over the outcome of the
election. and that he did not think Dow would renew the custodial con-
tract.
o Monical believed at the time that there were approximately 90 cards
at gate 38 (the union gate) and 1,400 at gate 40 (the nonunion gate).
tion scared him, that Dow did not want a union, or that
employees would lose their jobs for voting one in. As to
Dunlap's testimony, Roddy recalled talking occasionally
with her and, while not recalling the precise conversa-
tion she described, did deny ever saying to her that the
employees would lose their jobs if they voted for the
Union. Roddy had no recollection of a conversation with
Carlson on December 27.
Kalmans had assumed chief responsibility for repre-
senting USC during the preelection period, and in this
connection made several trips there from his Houston
office. Custodial Supervisor Lillie Beasley testified that
on or about December 1 she was directed to a company
office where Kalmans spoke with her about possible rea-
sons for the janitors desiring representation, adding that
since neither Dow nor USC wanted a union he was quite
sure the custodial contract would not be renewed should
the Union eventuate and all persons so employed would
lose their jobs. Beasley added that Kalmans illustrated
this by reference to the Ramirez Company, holder of the
custodial contract at Dow's Plant A, as having backup
flexibility since it performed custodial work independent
of Dow at banks and schools. At Beasley's next oppor-
tunity that day she spoke with several custodial employ-
ees including Flora Ward and Dorothy Morgan, telling
them that a company attorney had just said they would
lose their jobs for voting in the Union by reason of
Dow's expected contract cancellation and that this situa-
tion definitely contrasted with the more assured future
faced by persons employed with Ramirez.
On December 27 all custodial employees were assem-
bled at a conference room on Dow premises where
Steinbach and Monical successively spoke to them." A
tape recording of this meeting was entered in evidence;
however, controversy exists as to precisely what was
said and this cannot be resolved because of the tape's in-
adequate quality. Further evidence was received from
both the General Counsel and USC in the form of their
respective transcribed versions of the tape's contents. A
high degree of similarity is present between these two
versions, and for convenience I set forth below pertinent
excerpts from that of USC: 12
'0 Kalmans' version is that on December 6 he conferred with Beasley
about any underlying causes of employee discontent, but did not tell her
the women would lose their jobs if the Union got in. After making this
absolute denial, Kalmans added that he did discuss his client's vulnerabil-
ity because the operative purchase order was on a year-to-year basis, and
during cross-examination admitted to communicating to supervision that
in his opinion Dow would be free to cancel the contract of USC in the
event its employees voted for representation by the Union.
" Steinbach's portion dealt primarily with mechanics of voting as
scheduled for the following day. Monical's portion, estimated to last
about 8 minutes, opened with jollying remarks, retraced the Company's
experience under the custodial contract during 1978, covered general
background of the Monical family and its past business dealings with
Dow, and decidedly pitched for a vote against the Union. Both Steinbach
and Monical took questions after the uninterrupted portion of their talks.
In the course of all this there was reference to a yet earlier speech by
Barton, the content of which is not at issue here.
12 The taped portion of Monical's remarks only was played for my
benefit during off-the-record proceedings with all counsel present and
consenting. This yielded no real progress toward any finding of fact,
amounting instead to a better appreciation of inflection and dialect (simi-
lar in this regard to Monical's manner of speech as a witness) than would
have been received by the original listeners.
1184
U.S. CONTRACTORS, INC.
Real quickly let me share something with you-a
personal experience. Now, I know many of you and
uh you know me. I've lived here all my life and
contrary to popular belief I wasn't born with a gold
spoon in my mouth. In fact my family was so poor
the poor people called them poor. That's a fact. My
dad worked hard. They had a company named
Monical & Powell. It started out a little home build-
ing company and uh my dad worked [unintelligible]
and he got in Dow Chemical, he got in Monsanto,
he got in Union Carbide and then 1970, because of
labor union problems in this area and most of you
that were raised here know, what I'm talking about,
squabbles about who was gonna to do that and who
was gonna to do that, squabbles and petty strikes,
wildcat strikes, work stoppages. I was off work and
my folks were off work for five months because of
a strike by Local 211 of the Pipefitters. We had just
finished one by the Operating Engineers Local 450
that shut down the powerhouse for a good length
of time in which they were sued for loss of product
by Dow Chemical and lost that suit-the Local lost
the suit. We came back to work and I was
meeted-and met there at the gate and say, "Hey,
go on down to the office and we're gonna meet
with you people" and here's what I was told--"Go
ahead and finish the lump sum work (that's bid
work) that you have but I want you right now, this
is from Mr. Kinsel, to begin an orderly withdrawal
of your people and your materials and your tools
out of the blocks. Monical & Powell and union con-
tractors are not gonna do our work anymore. Car-
dinal Construction, uh Power Systems, Payne &
Keller will be doing our work."
Say, I cried and I seen men that worked for me
cry. Now, listen, I've got friends in the union. I'm
not antiunion and I'm not anti-anything. So we lost
our jobs.
So we formed another company. But I was without
a job. You say that sounds pretty sad? Well, that is
sad. It's just that simple. Well, what you gonna do?
Now I'm not gonna tell you today that the Dow
Chemical Company is gonna cancel the contract.
I'm not gonna tell you that because I can't. But, on
the other hand, I'm not going to tell you that
they're not. All I can tell you for a fact is our con-
tract expires December 31st. That's it and uh what
they do or what they don't do, I don't know but
I'm asking you this, I think that you and I need to
look around and we need to see what's going on.
Now, I know that you've been told to drive down
to the Gate-Gate 38 and look at all the union con-
tractors listed there. Do that. Do that. And, then I
tell you what I want you to do, I want you to drive
down in to the clock room in Gate 38 and I want
you to count and see how many people are clocked
in. Last week there were approximately 90 and
those were made up of specialists, electricians, cali-
brators and people who run the computers. Special-
ists. Then I want you to go to Gate 40 and count
the cards there and approximately last week 1.400
open-shop people. Now count those. I think you
need to do that. Among those there are no union
janitors-contract janitors in anything. There are a
very small number of union craftsmen. I have a
friend that's a Union contractor and they run
around 15 to 20-a very small number. Now that's
not something that I've been able to determine.
That's something that's been determined by the
people that own these companies.
Now just for a moment I want to talk about you
and I. Our contract as I said expires December 31st
and the law says that Dow has the right to work a
union or a nonunion job. They don't have to work
either one. You say wait a minute, that's discrimi-
nating. Well, the law says that they can discriminate
with contractors but they can't discriminate with
people. In other words, I couldn't discriminate
against you if you want to be union. I couldn't say,
"Hey, I'm not gonna work you because you're
union." That would be discrimination. But the Dow
Chemical Company and any customer-large com-
pany like that-has the prerogative of saying under
this Section 8(a)(3): "I don't want a union contrac-
tor. They have that right. Now don't blame me. I
didn't write the law. O.K., so they can do that.
That's legal. They can do that. Uh, I can't tell you
that uh that they're gonna cancel the contract or as
I said before nor that they-that they won't renew
it, 13
But let me say this to you. We have approximate-
ly 60 to-or 55 to 60 janitorial openings that we
now fill with you folks and uh we don't have any
other janitorial work to speak of. We have a few
other contracts which work one or two people and
so what does that say to you if Dow should cancel
the contract. If Dow were to cancel the contract
then you, as an individual, would need to find a job
with the union. See if they can get you some work.
You say, "Hey, I uh put me somewhere." I'd like to
put you somewhere but I don't have 55 openings
for janitorial people, you understand what I'm
saying. Now I don't want you to misunderstand
what I'm saying. I'm not threatening you with that
but I am not saying Dow is gonna cancel the con-
tract but if they do, I think you ought to understand
what it is. We're strictly, uh-mainly, a mechanical
and petrochemical construction company. We
employ 1,400 people. We employ 50 to 60 janitors.
You say, "what's that gonna do to you?" Well, hey,
it's going to hurt you. I don't like to tell-I have
fired-I-I tell you what-I don't know of anybody
'' This is the point of most crucial controversy as to what Monical
truly said. The General Counsel's ersion runs. "I can't tell you that
they're gonna cancel the contract hut as I told you before trhev on't
renew, it" (emphasis supplied). Noting that the entire thread and tenor of
Monical's remarks was to plant the thought of a contract cancellation bh
Dow, but not to predict the consequence unequivocally, I find from all
the circumstances that USC's transcribed version here is accurate and
thus I accept it as fact
1185
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
I've ever walked up to and said, "Hey, you're fired,
get off the job." I'm not cut out that way. Whether
you want to believe it or not, I am concerned about
you and it would hurt me to have to come up and
tell you, "Hey, we don't have any more work for
you." It really would. And for you to say, "Well,
what am I going to do?" Because I don't have the
answer. I wish I did have one but I don't. But I'd
say this. I know that you've been promised that
you'll have jobs. You've been promised. I can't
make you any promises and I'm not going to. But
you've been told, "Hey, you'll have a job." Well,
hey, before I said I'm gonna do that-I would
check with those people that made those promises
and I'd ask them this before I voted. "Where are
you going to get me a job making four dollars and
twenty-five cents an hour as a janitor, where? Hey,
tell me where I'm gonna work?" Number 2, "Am I
gonna have paid holidays? Am I gonna have that,
yes or no?" "Will I be part of a profit sharing plan?
Yes or no?" Now, hey, I'm not fooling or anything.
You need to get those answers for yourself. I'm not
gonna be voting. You are. And you need to have
those answers before you make up your mind. Now
if you decide to remain with U.S. Contractors with-
out someone representing you, I think that, uh, U.S.
Contractors-I pledge this: We will continue to do
our best to get the most money that we can for the
services that we do.
But I'll just say this in closing. I hope that you have
listened to what the union folks have to say to you.
I hope that you've listened to what I've tried to say
to you today and what the others have tried to say
to you too, on the way you vote tomorrow, and
then vote the way you think is right. I would say
this-that the janitorial contract work for the jani-
tor work here at U.S. Contractors for the Dow
Chemical Company is no longer in my hands. It's in
your hands and I know that after you have weighed
both sides of the story-listened to the facts-
checked those facts for yourself-I know that you
will vote right. I think the right vote is that you
don't need anyone to speak for you....
In keeping with the theory advanced in the complaint
that Dow had acted in concert with USC respecting the
alleged unfair labor practices, the General Counsel also
educed evidence as to utterances made by Dow person-
nel. Smith testified that at a meeting held early in 1975
Dow's head of industrial relations at the time, B. J.
Kinsel, remarked during a lengthy discussion of distribut-
ing needed maintenance work between bargaining unit
employees and outside contractors that he would never
allow a union contractor to have a 40-hour-a-week job
embracing maintenance responsibility for the magnesium
cells. Thomas Crow, longtime business manager of the
Union, testified that at a political reception held in a
country club during October he conversed with John
Landry, Dow's former major manager over magnesium
products, who said to him in apparent reference to the
custodial employees of USC that just as Dow was get-
ting its labor relations back on an even keel the Union
had taken steps to mess it up by trying to organize an
outside contractor. Mack testified that in August she had
conversed about the Union while cleaning the office of
Claude Bartlett, Jr., supervisor of cell restoration at
Clorine B, who remarked during the discussion that if
the contract custodial employees of USC went union
they would definitely go out the gate. Carlson testified
to several utterances of Dow's supervisory personnel. In
the first of these on November 15 as she was talking
with rank-and-file Dow employee Wallace, Dow group
leader Pete Menegos approached them and said that
Dow did not want a union contractor in the plant and
had gotten rid of them in the past; that the eventuality of
unionizing USC employees would only mean that Dow
employees would be substituted for scrubbing and
sweeping tasks. She also testified that in early December
as she was on breaktime and talking alone with Dow
Unit Supervisor Floyd Norton, he said that Dow would
pull the contract if USC's custodial employees became
unionized, and she should be cautious about this because
Dow's resolve consistently to get rid of union contrac-
tors would mean she would be gotten rid of too. Carlson
testified further that on January 26 she stopped while
picking up trash to talk with the supervisory research
specialist, Kirby Lowrey, Jr., who said in the conversa-
tion that Dow was planning on getting rid of USC custo-
dial employees one by one with transitional replacement
by Dow employees and ultimate utilization of a non-
union contractor.
As to these described exchanges with admitted super-
visors, only Bartlett, Menegos, Norton, and Lowrey tes-
tified during Dow's presentation of evidence." Bartlett
remembered Mack as the regular custodian of his area
and that during summer 1978 she frequently told him of
job problems with USC, asking whether organizing its
employees meant anything to Dow. Bartlett testified that
he disclaimed any controlling knowledge but that Dow
was an open-shop employer and the difference between
union and nonunion contractors had a bearing on the
outlook, a notion he explained in cross-examination as
meaning that in such negotiations the unpredictability of
the situation could affect whether or not people like
Mack would continue to have a job. Menegos recalled
the incident about which Carlson testified. From his
standpoint it began as he insinuated himself into a discus-
sion about unionism in which Carlson was engaged with
two employees of his unit, who should have been ab-
sorbed in their duties at the time. Menegos flatly denied
the statements attributed to him, maintaining that he only
spoke in delicately friendly terms to ease her out of the
work area. He did, however, admit to once telling a
fellow Dow employee that USC janitors would lose their
contract if they went union. Norton testified that during
" Testimony of Dunlap about remarks made by Dow employees
Hudson and McCater is disregarded because they were authoritatively
identified as rank-and-file personnel, for whom no evidence was ad-
vanced to connect their personal opinions to Dow in its capacity as a re-
spondent here.
1186
U.S. CONTRACTORS. INC.
December Carlson was the regular janitor for his area
and that he frequently chatted with her. He recalled an
episode in December of approaching Carlson when she
was in conversation with Dow bargaining unit employee
Art Wallace. Norton's immediate impression of this was
Wallace ribbing her about the union activity then under-
way, and embellishing his remarks with prediction that,
should the custodial employees of USC organize, their
contract would be pulled by Dow. Under this impetus
Norton sat down, and while denying Carlson's testimony
he was unable to state whether he chimed into Wallace's
remarks by indicating what he said was possibly right.
Lowrey testified that, employed in January, Carlson was
vaguely known to him as the person regularly cleaning
his office. He emphasized that she frequently initiated
unwelcome discussion about her desire to unionize, and
sought to prompt him into articulating something on the
point of whether this would cause Dow to react in any
manner. Lowrey asserted that he pointedly avoided ex-
pression of any opinion as he considered her meddling
bothersome. He denied making any utterance resembling
what Carlson attributed to him on January 26. Bartlett,
Menegos, and Lowrey also each testified categorically
that they had no authority to determine retention of out-
side contractors, nor did Dow management consult with
them on the subject. Norton testified that his job simply
brought no involvement with Dow's contracting pro-
gram.
Explanation of certain contracting details was made by
purchasing agent Lynn West, an I l-year incumbent of
his position. He testified that prequalification information
is gathered on prospective contractors, that fundamental-
ly a system of competitive bidding obtains, and that Dow
prefers to familiarize themselves with the performance of
untested contractors by awarding such newcomers only
lump sum work. His department candidly advises union
(termed "fair" by Smith) contractors that they are com-
peting with nonunion (often termed "open shop") firms.
An official of Dow's had originally solicited Monical
to submit a bid for janitorial service, and this was done.
The first award of late 1972 was continued by successive
purchase orders which in recent years came to be moni-
tored by West. He testified that the latest purchase
order, A & B - 64337-P09, was routinely issued to USC
on December 29 with West's name shown as the buyer. '5
As in all past years West had no role in actually schedul-
ing custodial services, for this was the responsibility of
operating management. 6
Shortly after this renewal, a series of interrelated
events and correspondence ensued. They began when
Monical advised Smith in early January (as he had prom-
ised to do) that USC's custodial contract was renewed.
This practically coincided with issuance of the Union's
certification, and the parties to this newly legitimatized
bargaining relationship scheduled their first negotiation
'' The customary Exh. A attached to this purchase order established a
straight time man-hour rate of $5.70 for weekly total up to 1,000 hours,
$5.65 for weekly total of 1,001-1,800 hours. $5.60 for weekly total of
1801-3.000 hours. and the amount of $5.55 above that.
16 At this point in time a few janitors remained employed by Doss
from the attrition process that followed after most custodial service for
the complex went to the outside
for January 22. It took place at USC's office in Clute
with Smith, Anderson, and Carlson representing the
Union while Monical and Rea represented the employer.
The Union submitted a complete written contract pro-
posal other than for wage rates, and the entire matter
was taken under advisement by Monical who said he
would have an attorney review it.
Contemporaneous with this Rea had calculated the ex-
traordinary cost of legal services and related expense
attendant on the representation petition. He testified that
this resulted from a request of USC's board of directors
after the traditionally modest profits of the janitorial con-
tract (accounting-wise geared to a fiscal year ending
each May) abruptly turned to loss beginning in October,
and amounted to over $26,000 for the last 3 months of
1978 (USC's fiscal year 1979).' 7 In consequence of this
Rea authored a letter for the signature of Monical, and
this was sent to Dow on January 18 with express refer-
ence to the new purchase order. It read:
This letter is to notify you of the necessity for us
to re-open the matter of compensation to U.S. Con-
tractors, Inc., both as to the manner in which USC
is to be reimbursed for its overhead expenses and
the amount of such reimbursement.
At the time this contract was negotiated, USC
had no legal expense and anticipated no legal ex-
pense which could be attributed to its performance
under the referenced purchase order.
In the past four months, as a result of certain
governmental hearings held and payments made or
anticipated as a result of such hearings, USC has
been placed in the position of having to perform
under a purchase order which has no profitability
and in fact is presently operating at a loss.
This loss is attributable directly and only to the
increase in overhead expenses consisting of legal
fees, additional duties assigned to supervision, travel
costs and added clerical and accounting costs.
For these reasons alone it is necessary that we
ask (1) that the provisions of the contract be amend-
ed to provide that a fee be paid based on direct
labor employed under the applicable purchase
orders and (2) that the fee be set at 14.4% of the
amount of straight time labor.
We ask your immediate attention to this very se-
rious matter and request a meeting at the earliest
possible time.
This letter was initially routed to West. He passed it
on immediately to his manager of purchasing, who in
turn caused it to be set down for review before the con-
tract committee of Dow's purchasing department. West
testified that the 14.4-percent increase was inherently
very unusual because of its magnitude. The upshot was
reflected in a letter dated January 30 sent from West to
the attention of Monical at USC which read:
7 Actual profit/(loss) figures for this 12-month period were: 4.092 in
June (1978); $3,433 in July; $4,199 in August; 4,188 in September:
$10,316 in October; S10,129 in November: S5.986 in December: S13,720 in
January: 4.400 in February: $272 in March; $2.932 in April; and $765 in
May, for a resultant annual loss of $23,808.
1187
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Your letter dated January 18, 1979, requesting in-
creased compensation has been studied carefully.
Based on the stated reason that you are currently
operating at a loss, we have decided to temporarily
grant this increase in order to insure continued jani-
torial service at our Plant B location. However, be
advised that we are currently evaluating other jani-
torial services and plan to make any necessary
changes at the earliest advisable date based on
sound business considerations.
West also immediately issued an amendment to the basic
USC purchase order effective January 29, specifying a
14.4-percent fee of the actual direct straight time labor
charges from that point onward.
In the interval between this exchange of correspond-
ence Dow had in fact contacted J & L Janitorial Serv-
ices and Barron Construction Company, inviting each of
them to submit bids for janitorial service at Plant B.
Over the period January 23 through February 1, J & L
submitted three separate proposals, refining each of them
in terms of observations made by West to J R. Lyster,
president of J & L, with respect to what would actually
tend to justify an award. A summary of West's, prepared
on February 1, showed the final J & L bid amounting to
$36.15 total crew hour based on a supervisor at $6.60 per
hour and five janitors at $5.90 per hour with all insur-
ance included in the figure. On February 2 purchase
order A & B-64492-PO9 was issued to J & L on the au-
thority of West for the furnishing of janitorial services at
Plant B as and when requested. This document was spec-
ified to be effective through December 31, 1979, and
otherwise differed on its face from that in effect for USC
in not carrying a provision of the contractor's insurance
being in accordance with a certain "coordinated insur-
ance and risk management" plan often utilized by Dow
with subcontractors. As to Exhibit A, in which the de-
tails of contract implementation were contained, the
award to J & L differed from that for USC primarily as
to hourly rates to be paid the persons performing serv-
ice, the identification of "transportation" as an included
item in the rates, and an equipment rental clause of cost
plus 5 percent in lieu of the dollar schedule shown for
this subject as it applied to USC. Additionally, the USC
Exhibit A specified that it was to be reimbursed for
actual statutory assessments for payroll taxes, an item on
which J & L's award was silent in keeping with its final
proposal quoting rates that specifically included "all
fees." Beyond these differences the proposals were com-
parable in regard to significant matters of handling over-
time work, identifying the beginning of workweeks, re-
sponsibility for providing expendable supplies and miscel-
laneous material, the holidays to be observed, and a re-
imbursement clause for meals taken on overtime. Based
on the award to J & L, that firm was scheduled to begin
custodial coverage of Plant B's A. P. Beutel building
with the six-person janitorial crew commencing Monday,
February. Officials of USC were informally advised of
this at a time contemporaneous with West's letter of Jan-
uary 30 and amendment to the purchase order.
Rea testified that he then authored a letter for the sig-
nature of Monical which was sent to Dow on February
6. It stated:
In our recent letter of January 18, 1979, we de-
tailed to you, that beginning in September 1978 our
overhead expenses were substantially increased over
and above anything contemplated by the parties in
the Exhibit "A" to our purchase order. We request-
ed that we receive an additional 14.4% of the
amount of straight time labor in order to compen-
sate us for those additional expenses.
It was our contemplation that such increase
would be effective with the commencement of the
anticipated expenses, to wit: September 1, 1978.
However, your recent addendum of February 1,
1979 purports to be effective commencing January
29, 1979. This addendum fails to compensate us in
the manner contemplated in our proposal.
Accordingly, we are submitting to you our in-
voice based upon a beginning date of 9/1/78 as con-
templated in our proposal.
We further want to express our concern over
your recent action in terminating our services in the
A. P. Beutel Building which has historically been
performed by our employees. Obviously the con-
tinuation of performance of services in roughly the
same volumn as was contemplated at the time of
our January 18, 1979, letter is essential for us to
continue to perform work at the 14.4% fee set forth
in that letter.
West testified that the Dow purchasing department
simply considered and rejected the request for retroacti-
vity, and on that basis he sent a letter dated February 13
to Monical's attention reading:
Your letter dated February 6, 1979, and attached
invoice has been received and evaluated.
Based on the fact that we did grant a substantial
increase as evidenced by Addendum dated Febru-
ary 1, 1979, we feel your request for a retroactive
increase is inappropriate. We, accordingly, hereby
reject this request.
As this was happening user personnel of Dow, in consul-
tation with its purchasing department to whom USC was
communicating its operating rationale at the time, deter-
mined to expand the services of J & L. Lawrence DeZa-
vala, a contractor liaison official, notified USC of such
changes and these were promptly confirmed in writing
by Monical. The first of five such letters was dated Feb-
ruary 9, written by Monical to the attention of DeZavala
at Dow. It read:
This is to confirm your verbal notice to our su-
perintendent, Ron Steinbach, of Dow's intention to
reduce the amount of janitorial work assigned to U.
S. Contractors, Inc. as follows:
1. February 9, 1979, will be the final day for U. S.
Contractors, Inc., to perform janitorial work in
1188
U.S. CONTRACTORS, INC.
Buildings 201 and 203 and in Blocks 1700 and
4000.
2. February 16, 1979, will be the final day for U. S.
Contractors, Inc., to perform janitorial work at
the Lanier complex, Building B101 and Annex,
Industrial Medicine, Buildings B114, B120, B122,
B124 and B204.
If our understanding of your instructions as out-
lined above is incorrect, please notify us as soon as
possible.
As it happened, West's letter rejecting the retroactivity
request was received in business mail the very morning
of a scheduled negotiation with the Union. In this
regard, Monical, Harton, Rea, and Attorney James Neel
had assembled at company offices by 8 a.m. to discuss
their bargaining position for a scheduled 10 a.m. meeting
at a nearby motel. At 9 a.m. West's letter was brought in
to Monical, and its terms generated a new outlook on the
entire situation. Monical (who was scheduled to be re-
placed by Barton as part of the employer bargaining
team) testified that, in view of business losses sustained to
date, the anticipated reduction of approximately 700
man-hours from the normal past weekly range of 1,800
to 2,000, and Dow's denial of the requested reimburse-
ment, decision was reached on the spot simply to cancel
out of the Dow contract. Barton echoed this theme in
testimony emphasizing the imminent loss of hours, the
knowledge that Dow was seeking other providers of
janitorial service, and the spectre of proportionately
higher overhead as workload decreased into the future.
Rea also testified about this decision, emphasizing how
the operation appeared chronically unprofitable by then,
and how Dow's denial of retroactivity was essentially
the triggering reason for USC to relieve itself of this par-
ticular contract.
Once this decision was made, Neel immediately in-
structed on the need to offer the Union a right to negoti-
ate both on the cancellation and its effect. As so educat-
ed, the employer bargaining team traveled to the meeting
place where Smith, Anderson, and Carlson were present
for the Union. After amenities, Neel chiefly carried the
discussion by recounting how USC had originally gotten
into the custodial business as an accommodation for an
esteemed customer, and that circumstances had brought
about a loss of work and such unprofitability that a ces-
sation of the custodial business was contemplated. Rea
testified that Smith seemingly criticized Dow for reduc-
ing available work, but disdained any opportunity to dis-
cuss the situation further. Smith recalled his response to
this notification simply being that union attorneys would
make further contact. The meeting thus ended abruptly,
and later that day Monical signed a letter to the attention
of West which stated:
Please be advised that we desire to terminate Pur-
chase Order A & B 64337-PO9 and Exhibit "A"
thereto effective at your convenience, but no later
than March 17, 1979.
By letter also dated February 14, Neel wrote to Smith as
follows:
This is to confirm our negotiation session of this
date in which we advised you it was our intention
to terminate our relationship with Dow Chemical
Company in connection with the janitor work
theretofore performed.
Attached is a copy of a letter which was on this
date forwarded to Dow regarding same.
On February 16 Smith wrote to Monical expressing
surprise and confusion over the suddenly announced de-
cision to discontinue custodial work at Dow, terming his
understanding of the decision as one which USC reached
because it was seemingly "not worthwhile to continue."
Smith made a comprehensive request for documentation
concerning the contractual relationship with Dow and
any pertinent verbal communication on the matter. Smith
also formally requested a statement of the reasons and
circumstances for canceling. On February 22 Neel re-
plied to Smith as follows:
Your recent letter of February 16, 1979, ad-
dressed to Mr. Lynn D. Monical has been referred
to the undersigned for answer. Your letter refers to
a meeting on February 12, 1979, in which you
assert that your organization was specifically in-
formed that U. S. Contractors, Inc. concluded to
discontinue performing janitorial services for The
Dow Chemical Company.
In the meeting, which in fact occurred on Febru-
ary 14, 1979, the Company specifically reiterated
that its strength and expertise was in general plant
maintenance and construction work in the petro-
chemical industry and that it was never its desire to
be known as a janitorial subcontractor. We detailed
the history of U.S. Contractors' involvement in the
custodial business at Plant B of the The Dow
Chemical Company, Texas Division: that its entry
into that line was occasioned solely as an accommo-
dation to a valuable customer.
We explained that since February, 1978, the
Company is now performing substantially less ous-
todial work per week under its purchase order. We
advised that since January, 1979, U.S. Contractors
had been removed, or had been advised of its immi-
nent removal, from certain specific custodial work
theretofore performed, which amounted to in excess
of 700 hours of weekly work. We also stated that
we had been advised by representatives of Dow
that they were currently engaged in evaluating
other janitorial services and that it was obvious to
us that by their actions, Dow no longer desired our
services as a custodial contractor. You confirmed
independent knowledge that Dow was actively en-
gaged in pursuing other sources for its custodial
services in Plant B.
We told you that as a result thereof, we intended
to give notice to terminate our purchase order for
custodial services and offered to discuss this matter
with you. You specifically rejected the need for any
further discussion with respect to any matter per-
taining to our desires to terminate the agreement by
stating that there was nothing further to discuss.
1 189
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
After the negotiation session with your commit-
tee, we notified The Dow Chemical Company,
Texas Division, of our termination of the custodial
agreement and sent you a copy of such notification.
In view of the foregoing, we see absolutely no rele-
vant legitimate purpose in the information sought
by your letter of February 16, 1979.
As you have previously been advised, we would
appreciate your directing further communications
with the Company to the writer.
This was followed by a rapid series of letters dated from
February 23 to March 9 following the general format of
the initial one in this series dated February 9, by which
Monical confirmed Dow's verbal notice of sequentially
establishing final days in which USC was to service any
of the several dozen buildings previously covered. Each
reduction was coextensive with J & L taking over the
custodial function, and in consequence USC's comple-
ment of employees quickly dwindled over that same
period of time. The final workday of any USC bargain-
ing unit member was March 16, although several sought
and obtained continuing employment with J & L.
I initially treat matters of credibility. Roddy was gen-
erally unimpressive and plainly attempted to minimize
the essentials of what was attributed to him in various
conversations. For this reason, coupled with satisfactori-
ly persuasive demeanor of Hall and Dunlap, plus one
even more convincing of Mack, I find that he spoke as
described to custodial employees under his supervision
while grouped in a van and to Dunlap alone, all prior to
the election. Only a slight gap exists between the respec-
tive versions of what Kalmans told Beasley when con-
versing in a company office; however, it is actually im-
material because Beasley's immediate dissemination of
her comprehension to employees was violative in itself. 8
A Mack/Bartlett conflict also exists, and here demeanor
factors favor this witness of General Counsel, the notable
fact that Bartlett voluntarily revealed how his remarks
expressly associated unionism of a work force with un-
certainty about whether jobs would continue. The more
significant resolution concerns Carlson, whose testimony
attributes telling admissions to agents of each Respond-
ent. I am convinced that Carlson has compromised the
truth for partisan purposes, and has invented or grossly
distorted the several key conversations about which he
testified. She was effectively contradicted by Dow per-
sonnel Menegos and Norton, and by Roddy who in this
specific instance I credit as to whether he ever even
spoke with her in early January. The key is Lowrey,
however, whom I find to be a superbly credible witness
of fine demeanor, candor, and perception. His testimony
gives ample basis to find, as I do, that Carlson impor-
tuned shamelessly as she moved throughout the Dow
complex in an unworthy effort at creating "weak
moment" situations and exploiting ordinary interpersonal
courtesies. Lowrey's testimony is vivid on this point in
credible reference to attempted prompting and the
'8 While Kalmans may have articulated lawyerlike shadings to his re-
marks, the essence was plain enough, particularly when his final descrip-
tion was to concede being personally of the opinion that Dow had an
unfettered right to discontinue service by newly unionized employees.
"wrath" felt by other personnel, a hyperbolic reference
to her habitual dallying and interruptions. It is also note-
worthy that Art Wallace, a person identified as within
the Union's bargaining unit, was not called as a witness
concerning the controversial Norton/Carlson episode in
a plant lunchroom during December, nor was the ab-
sence of his testimony in any manner explained.
With regard to Respondent Dow this leaves two utter-
ances as prelude to evaluating its claimed action in con-
cert with USC. They are each remote, ambiguous, incon-
sequential, and utterly lacking in merit as indicators of a
large industrial firm's business policy. The fundamental
context that must not be overlooked here is that of a
major bargaining relationship. t9 It is matured by passage
of time and imbued with the ordinary familiarities of per-
sons who serve institutionally as adversaries. Conversa-
tion between such persons is often laden with jocularity
and bravado, these being the only characteristics to what
Kinsel and Landry uncontradictedly said. There is total
failure to connect such remarks to actual workings of
Dow's labor relations or contracting policies, and the
Kinsel remarks implied the well-known background of
labor strife as devastatingly experienced around this
complex in the earlier years of the 1970's.2 An even
more innocuous character attaches to Landry's mild jest,
particularly given the convivial setting in which it took
place. Thus, I discount this aspect and move to the more
salient area of whether other probative evidence exists to
show Dow in cahoots with USC. There is literally
none.21 Dow had no interest in the representation pro-
19 Lee Wilkins, Dow's manager of labor relations, recounted that in
1978 contract renewal negotiations with the Union the parties "finished
up early" for the first time. Smith agreed to the achievement even with-
out mediation assistance, and tacitly conceded "very good relations" with
Dow.
20 Dow introduced a November issue of official labor news published
by the Texas AFL-CIO, in which Secretary-Treasurer Sherman Fricks
essayed the concept that trade unionism in the area had created many of
its own problems. Fricks is himself actively involved in dealings with
Dow, and again there was failure to call him for any explanation that
might neutralize his observations nor was he claimed to have been un-
available. The following are certain excerpts from this article:
Ten years ago, we did 75-80 percent of the major construction
work in the Houston Ship Channel area. Today, we do 13.78 per-
cent.
Poor workmanship and wildcat strikes have done us in. Petty
squabbling over which union has jurisdiction has removed us from
the picture.
How can we call Dow Chemical a rat company that's out to bust
the unions? Dow begged us over and over again to stop all that silli-
ness and come in and do the job right. But we wouldn't listen. Dow
finally threw up its hands and said it had no choice hut to hire non-
union labor.
They'd vrill rather deal through us.
2 The credited or admitted utterances of two (from among the 600)
first-line Dow supervisors are unavailing as indicators of motive. In both
instances nothing was involved beyond random, unguarded expression of
personal opinion. Bartlett's statement was isolated, remote in time, and
oblique insofar as even constituting a threatening statement of prospec-
tive job loss. Norton's gratuitous contribution to a conversation being in-
stigated by Carlson was vague to the point of inconsequentiality. Neither
utterance has the character of an unfair labor practice, nor warrants any
remedial action.
1190
U.S. CONTRACTORS, INC.
ceeding beyond general community awareness of its re-
sponsible functionaries. West, the bellwether respecting
this fundamental issue, was also specifically aware of the
reality that unionized contractors could experience work
stoppages more readily than those having a nonunion
work force; however, this is balanced both by his per-
ception that factors other than unionism could destabilize
a contractor and the generally evenhanded treatment he
has given to the dwindling number of union contractors
available to Dow for its comprehensive needs.2 3 West's
thorough description of his department's inner workings
is quite expectable as a component of this enormous en-
terprise. His fidelity was to Dow alone, and aspersions as
to why it would be interested in alternative sources of
supply the moment any suspicious waffling was shown in
an established contractor are naively misplaced. There is
little profit in dissecting the comparative cost amounts
that West received after bidding was sought for custodial
work, yet even here the prudent choice was J & L. It is
also satisfactorily explained that a typical cost adjustment
was approved in August 1979, and that the Ramirez
Company is maintained as a balancing source of custodi-
al labor for Plant A and the leading manifestation of
Dow's delicate obligation in the realm of contracting
with minorities. Overall a pure arm's length business re-
lationship existed, colored only by familiarity between
persons long accustomed to settled dealings. Beyond this
Dow received the critical letters from USC with sophis-
22 The General Counsel's theory of collusion is weakened by the fact
that Dow renewed the custodial contract on the very day following the
Union's emphatic selection by employees of USC. No better time would
have presented for delay or subterfuge, had that been Dow's intention
23 Key Associates, Seaboard Constructors, and Raid Industries were
each credibly identified as union contractors on renewing cost-plus work
of a magnitude that would probably cause one or more of them to have
employees at the complex to a combined level 40 hours per week. In
fact, this phenomenon is merely illustrative of the open-shop movement.
Several theories are held as to impetus, status, and prospects for the sub-
ject. It is variously attributed to a push for minority employment in the
domestic construction industry, reportedly prohibitive costs of bidding
with anticipation of employing union labor, entry of nontraditional em-
ployees into the field, and changing ethics among those aspiring to be
construction workers. The subject is of at least decade-long evolution as
indicated by trade journal articles of the late 1960's. "Open Shop Group
Urges Labor Changes," Engineering News-Record, October 24, 1968, p.
81, reported the I 1th Annual convention of the Associated Builders and
Contractors, Inc. (ABC). the national association of merit (open shop)
contractors, as then claiming 2,300 member firms in 18 States.
The following year brought "The Open Shop Voice Grows Loud and
Clear." Engineering News-Record, November 27, 1969, pp. 44-46 report-
ing growth of ABC to 200 chapters and the AGC's (Associated General
Contractors) "first national open shop conference,' one "publicly recog-
nizing the fact that 35 percent of its 9,000 members operate open shop"
During an address to the Sheet Metal and Air Conditioning Contractors'
National Association, Edward J Carlough, president of the Sheet Metal
Workers International Association, AFL-CIO, proposed attitudinal
changes, elimination of jurisdictional disputes. and wage scale realism in
the context of slackened competitive position of union contractors and
curtailed employment opportunities for members of his labor organiza-
tion. "Contractor Relations on Upgrade: Union Seeks 'Drastic Changes'
to Compete Against Open Shops," Air Conditioning, Heating & Refrig-
eration News, November 8, 1976, pp. 5-6 The passage of time has simply
heightened awareness of this subject, as illustrated by the feature cover
story updating status of open-shop or double-breasted operations, which
were thought to now constitute a "majority of all construction in the
U.S." "Open Shop Construction Keeps Growing Bigger, Getting Strong-
er," Engineering News-Record, October 27, 1977, pp 20-24
ticated aplomb, and reacted only in its corporate best in-
terests. 24
Plainly the culprit here is USC. I firmly believe that it
was determined to resist the prospect of its custodial em-
ployees becoming organized, and followed through with
carefully orchestrated strategies to effect this aim.25 The
imagination in execution was such that this objective was
not fully revealed until the crucial morning of February
14, when events and their followup make this appraisal a
most compelling inference. There is, however, varied
background that also hints at the conclusion. The hiring
of Roddy has no real explanation beyond the apparent
desire to have a "heavy" in close touch with custodial
employees to fulfill one branch of this strategy. This role
Roddy filled, and I find his utterances to be unlawful co-
ercion of employees by reason of their unremitting instal-
lation of fear that jobs would be lost for doing no more
than exercising free and lawful choice under Section 7 of
the Act. A much more striking phase of evident strategy
is the speech of Monical on December 27. This seeming-
ly rambling, folksy harangue was in essence a diabolical-
ly contrived vehicle to permeate the entire work force
with an unfounded fear that giant Dow would snuff out
their livelihoods should they vote in the Union. This
effect practically leaps from the pages of USC's own
version of his talk. Without any objective basis for think-
ing that continuation of his custodial contract was in
jeopardy, Monical pointedly said this on three separate
occasions (as transcribed in this version supra). In addi-
tion, the theatrical-like projection to the ceiling of Mal-
baff passages lent a patina of inevitability to the whole
notion. 26
The election victory of the Union was swallowed with
apparent equanimity by USC. However, that must be
taken in light of what was soon to follow. 2 7 Monical
took the lead in the bargaining session of January 22 as
24 Extensive efforts were mounted during the hearing by both the Gen-
eral Counsel and the Charging Party to capitalize on the doctrine of
"chilling unionism" as this theory was framed in pars. 24 and 25 of the
complaint by allegations pertaining essentially to Dow. See Textile Work-
ers Union v. Darlington Mfg. Co., 380 U.S. 263 (1965). Since I propose to
dismiss all claim of unlawful conduct by Dow, no aspect of Darlington
doctrine need be analyzed.
5 I note that USC was represented by current counsel from the incep-
tion.
26 Local 447, United Association of Journeymen and Apprentices of the
Plumbing and Pipefitting Industry of the United Staes and Canada. AFL-
CIO (Malbaff Landscape Construction), 172 NLRB 128 (1968), was a CB
case involving esoteric reasoning in terms of the object of certain picket-
ing, with the focused language serving to round out a rationale directed
to the significance of secondary activity under Sec. 8(b)4) of the Act. In
deciding this case the Board's opinion states, at page 129, "But an em-
ployer does not discriminate against employees within the meaning of
Section 8(aX3) by ceasing to do business with another employer because
of the union or nonunion activity of the latter's employees " Monical had
used this particular language in dramatizing his own message Preoccupa-
tion with Malbaff is misplaced, for even in recent Pipeline Dehydrators
Inc., 239 NLRB 172 (1978) (a CA case in which no iolation was found
when an employer assigned work in the face of a bona fide juridictional
dispute), the Board noted how 8(a)(3) principles have long been held in-
applicable to sections of the Act dealing with employer rights.
2' I note the prompt disposition of an earlier CA case by settlement at
such point in time and, while assuming this to be merely one step in the
grand design, do not in any manner rely on the event both because of the
nonadmission clause contained there and because it is unnecessarily spec-
ulative to do so
1191
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
he disarmingly gathered up the Union's proposal with
propagandized remarks about his inexperience in collec-
tive-bargaining matters. Rea entered the scene next as
the finance person ostensibly recommending that only
through recoupment of the extraordinary legal costs just
incurred could a continuation in the custodial business
seem justified. When Dow routinely chose to honor the
14.4-percent add on request, USC went to the astonish-
ing extreme of seeking retroactivity. This guaranteed a
rejection by Dow and an excuse to carry out the long-
planned objective. I construe it to be mere coincidence
for Dow's answer to appear on the very day USC was
scheduled to deal again with the Union.28 With experi-
enced labor counsel on hand at the moment and the
entire plan long since fleshed out, it was only a matter of
adjustment to rehearse the last act before meeting with
the Union and delivering news of the decision, clouding
it over in the process with an insincere gesture toward
Fibreboard Paper Products Corp. v. N.L.R.B., 379 U.S.
203 (1964). The result was utter elimination of an on-
going work force, and a manifestation of the most totally
hostile and pervasive unfair labor practices that could
arise.
Accordingly, I render conclusions of law that USC, by
threatening its employees with loss of their jobs for se-
lecting the Union as collective-bargaining representative,
by discharging its entire custodial work force and by
sham dealings with the Union following its certification,
has violated Section 8(a)(1), (3), and (5) of the Act, but
that Dow has not violated the Act in any manner. Since
I have found that USC has refused to bargain collective-
ly in good faith with the Union as the representative,
duly certified by the Board, of an appropriate collective-
bargaining unit of its employees, and in order to insure
that these employees will have the opportunity to enjoy
the full benefits that may be derived from their selection
of a bargaining agent as contemplated by the Act, I rec-
ommend that the initial year of certification be deemed
to begin on the date that the Company commences to
2 It is important to reiterate here that absolutely no evidence exists to
show that West or any other agent of Dow was privy to the scheme, or
slanted their official functioning in any manner whatsoever. The failure
of USC to gain retroactive reimbursement of costs from Dow is unrelat-
ed to whether it should continue as a going business on a reduced basis
Notably Roddy's resignation was already in hand, a development neatly
harmonizing with prospective need for less supervision.
bargain in good faith with the Union as recognized rep-
resentative of the employees in the appropriate unit. See
Mar-Jac Poultry Company, Inc., 136 NLRB 785 (1962).
REMI:I)Y
In the course of blatant conduct by USC which swift-
ly eliminated an established component of its business,
and the complement of employees who had constituted
themselves into a bargaining unit, a major new relation-
ship arose between Dow and J & L, one that may not be
disturbed because it was entered into in the regular
course of lawful business. For this reason the status quo
ante is not restorable, and a remedy must be fashioned to
address best the actual situation which now prevails.
The first interest is that of making whole, insofar as
possible, those persons who suffered directly from the
unlawful conduct. Thus the recommended Order shall
provide that should USC resume furnishing custodial
services in the future it shall preferentially offer employ-
ment to each former member of the Union's bargaining
unit based on their past continuous length of service.
Absent this eventuality USC shall pay back wages to all
such persons until so reinstated or until such time as they
have obtained regular and substantially equivalent em-
ployment within the meaning of Section 2(3) of the Act.
The second interest, that of the Union, shall be obser-
verd by treating its certification as presumptively opera-
tive into the indefinite future, and coupling this presump-
tion (rebuttable) with full reach of a Mar-Jac certification
year whenever that period might start to run. Consider-
ing the enormity of Dow's operations, including a facili-
ty unrelated to this case at nearby Oyster Creek, and in-
tending to give fullest possible sweep to remedial aspects
of this Decision, I shall deem that the Union's certifica-
tion is inherently valid throughout and near to the Texas
county in which USC has historically concentrated its
activity. Further, the notice to employees which I shall
compose must be mailed immediately to the last known
address of each person affected by USC's prohibited con-
duct under Section 8(a)(3). Finally, the extensive, perva-
sive character of unfair labor practices herein justifies a
broad cease-and-desist order applying to all facets of
USC's enterprise. See Hickmott Foods, Inc., 242 NLRB
1357 (1979).
[Recommended Order omitted from publication.]
1192