NLRB Cases Archive 1960 - 1995, LABOR-RELATIONS 1993-94 CCH-NLRB ¶15,406, FINN INDUSTRIES, INC. and GENERAL WAREHOUSEMEN’S LOCAL 598, INTERNATIONAL BROTHERHOOD OF TEAMSTERS, AFL-CIO., (July 28, 1994), National Labor Relations Board, (Jul 28, 1994)

FINN INDUSTRIES, INC. and GENERAL WAREHOUSEMEN’S LOCAL 598, INTERNATIONAL BROTHERHOOD OF TEAMSTERS, AFL-CIO.

314 NLRB No. 94.Case No. 21-CA-28732. July 28, 1994 Burton Litvack, Administrative Law Judge..

Before Stephens, Devaney and Cohen.

Jean C. Libby, for General Counsel. Lee Smith (Smith and Smith), Beverly Hills, California, for Respondent. Ralph M. Phillips (Wohlner, Kaplon, Phillips, Vogel & Young), Encino, California, for Charging Party.

Union Right to Information--Failure to Furnish--Suppliers and Customers.--By failing and refusing to provide a union with a list of its customers and suppliers that was reasonably necessary for the proper performance of the union’s duty as an employee representative, an employer violated its bargaining duty. The information was relevant because the union was attempting to establish that the employer was operating an alter ego business, and the employer’s defense that the requested information was confidential was rejected because the employer had disclosed a partial customer list to the union. Section 8(a)(5).

Back reference: ¶3135.138.

From Test of Board’s Decision

The question presented is whether the Respondent unlawfully refused to supply information requested by the Union in the spring of 1992 that was relevant to the Union’s pending contract grievance. We reverse the judge and find that the Respondent’s refusal to comply with the Union’s request prior to the commencement of grievance arbitration proceedings violated Section 8(a)(5) and (1) of the Act as alleged by the complaint.

I. Factual Background

Until December 27, 1991, the Respondent was engaged in the manufacture of paper bags, boxes, and cartons at its facility located in the City of Commerce, California. Since at least 1988 General Warehousemen’s Local 598, International Brotherhood of Teamsters, AFL-CIO had represented the Respondent’s production, maintenance, and shipping and receiving employees at the Commerce plant. The parties’ most recent collective-bargaining agreement was effective June 1, 1988, through May 31, 1993.

On December 27, 1991, the Respondent ceased operations at its Commerce plant and laid off all the unit employees. At the same time, Lundin Kobe, Inc., d/b/a Finn Industries, Inc. commenced similar operations at a facility in Ontario, California. The Union immediately filed a contract grievance against the Respondent alleging, inter alia, an alter ego relationship between the Respondent and Lundin Kobe.

In its letters dated March 23 and April 19, 1992, [1] The Union asked the Respondent to supply information, including the identity of its suppliers and customers by name and address. Not having obtained the requested information by May 12, the Union filed a charge alleging that the Respondent’s failure to comply with the request violated Section 8(a)(5) and (1) of the Act.

A month later, in its letter to the Union dated June 17, [2] the Respondent replied that the names and addresses of its suppliers and customers would not be revealed to the Union because they constituted confidential information. [3] Thereafter, by letter dated July 18, [4] the Respondent offered to use letter or number designations for its suppliers and customers instead of revealing their identity. On July 31, the Union rejected this proposal, but promised to keep the identity of the Respondent’s suppliers and customers confidential. The Union specifically pledged not to release this information to the general public or to the Respondent’s competitors.

The Respondent’s president testified that the Company has spent considerable time, effort, and money in maintaining and accumulating customers since it began keeping a secret customer list in l943. [5] The president also claimed that the Company has never disclosed its customer list to anyone other than its employees and that its salespersons are required to sign a letter stating that the names of the Respondent’s customers shall be kept confidential and cannot leave the company premises. He further testified that the Company’s customers list would be jeopardized if disclosed to the Union, despite the latter’s pledge of confidentiality, because he claimed that the Union represented employees who worked for two competitors of the Respondent. The Union denied that it represented any employees of the Respondent’s competitors.

The Union, in its March 23 letter, advised the Respondent that it needed the supplier and customer information to administer and enforce its contract with the Respondent and to evaluate and process the grievance pending since December 27, 1991. At the hearing the Union specified two purposes for the information: (1) to ascertain how the Respondent and Lundin Kobe were holding themselves out to their respective suppliers and customers and (2) to determine if the Respondent and Lundin Kobe shared any suppliers and customers.

The Union’s grievance was arbitrated over 5 days during the period of June 29 through December 14, 1992, [6] At the June 29 session, the Union was given the manufacturer’s representative agreement effective January 1, that listed the names of 25 customers of the Respondent. [7] The Union admitted that it has never contacted any of these customers to ascertain the Respondent’s relationship with Lundin Kobe.

At this time session, Bob Berkowitz [8] testified about how the Respondent held itself out to its customers and suppliers after operations had ceased at the Commerce facility. His testimony reveals that the customers and suppliers were simply notified that the Respondent was relocating from Commerce to Ontario. He indicated that, as far as the customers and suppliers were concerned, the Respondent did nothing to create separate identities for the two locations. According to Berkowitz, there was no change in the company advertising (except for designation of the location), the answering of the office telephone, the company logo, the company trade name, and the product manufactured. Berkowitz further testified that the customers were not initially advised that there was any change in ownership associated with the relocation to Ontario.

During the August 10 session, the Union and the Respondent stipulated that between 90 and 95 percent of the customers and suppliers of Lundin Kobe had previously been the Respondent’s customers and suppliers. [9]

In the meantime, on July 31, the General Counsel issued a complaint alleging that the Respondent, by its June 17 and July 28 letters to the Union, violated Section 8(a)(5) and (1) when it failed and refused to identify its suppliers and customers as requested by the Union’s March 23 and April 29 letters. The complaint states that this information was relevant to, and necessary for, the Union’s performance of its duties as the exclusive representative of the Respondent’s employees.

Then, on August 3, 1993, the arbitrator ruled favorably on the Union’s grievance. He found an alter ego relationship between the Respondent and Lundin Kobe.

II. The Judge’s Decision

The judge initially observed that the Union’s request and the Respondent’s refusal to provide the requested material continued throughout the pendency of the Union’s grievance, including arbitration. The judge found that the Respondent has never provided the precise supplier and customer information requested by the Union. He also found that, until August 10, the supplier and customer information requested by the Union was both relevant and necessary for the processing of the Union’s grievance.

According to the judge, the August 10 stipulation submitted during arbitration showing a continuum of suppliers and customers for the Respondent and Lundin Kobe satisfied the Union’s need for its request and obviated the disclosure of the actual names and addresses of these businesses. The judge concluded that the complaint should be dismissed in its entirety because the Respondent’s delayed response to the Union’s request had not been alleged. Finally, the judge intimated that the case may be moot given the arbitrator’s decision.

III. Contentions of the Parties

The General Counsel argues that the judge erred in finding that the August 10 stipulation fully satisfied the Union’s information request. The General Counsel alternatively argues that, even assuming full satisfaction on August 10, the judge erred in dismissing the complaint because the Respondent’s 5-month delayed response is encompassed within the broad 8(a)(5) allegation of the complaint. Finally, the General Counsel contends that the arbitrator’s August 1993 decision has no bearing on whether the Respondent fulfilled its bargaining obligation that arose in the spring of 1992.

The Respondent agrees with the judge’s analysis that any purported delay in satisfying the Union’s request was not alleged and that, in any event, the case is now moot. The Respondent also argues that, even if the case is not moot, the material requested was no longer needed by the Union by the close of the arbitration hearing.

In the alternative, the Respondent avers that the Union asked for confidential information, an issue that the judge did not address. According to the Respondent, it has legitimate and substantial interests in keeping secret the identity of its suppliers and customers and that these concerns are paramount to the Union’s claimed need for this material. For this reason, the Respondent contends that it was not obligated to release the material requested by the Union.

IV. Discussion

We adopt the judge’s finding that the Union’s information request continued throughout the pendency of the December 1991 grievance. We also adopt his finding that the Respondent never provided the specific material requested before the arbitration proceedings conmmenced. Until June 29, the Respondent resisted the Union’s request by arguing that the material requested was confidential.

In support of its argument, the Respondent submitted evidence pertaining to the development, handling, and treatment of the Respondent’s customer list only. The Respondent merely asserted, without any supporting evidence, that it considers its supplier list to be confidential. We find that this bare assertion is insufficient to establish the confidentiality of the identity of the Respondent’s suppliers.

Regarding the confidentiality claim for the Respondent’s customers, we find that the Respondent has failed to proffer a defense supported by a preponderance of the evidence. Although professing to always keep its customer list secret, the Respondent admittedly disclosed to the Union, without any restriction whatsoever, several customers’ names on June 29, Notwithstanding that such action was inconsistent with company policy, the Respondent’s president provided no explanation for this obvious deviation. The Respondent thus has established no consistent policy that would warrant deeming confidentiality concerns paramount on the earlier occasions when the Union requested the information. [10] Therefore, we find that the Respondent did not establish its confidentiality defense. [11]

Having rejected the Respondent’s confidentiality defense, we agree with the General Counsel that the judge erred in finding no violation here. First, we find, contrary to the judge, that the complaint provided adequate notice that the Respondent was charged with having violated Section 8(a)(5) and (1) by virtue of the responses it made to the information requests before the date on which the judge found that the arbitral stipulation “obviated” the need for the requested information. Thus, the complaint alleged that the Union requested information by letter on March 23, and April 29, 1992, that “since March 1992,” the Respondent had refused the requests through letters dated June 17 and July 28, 1992, and that this conduct amounted to a refusal to bargain within the meaning of Section 8(a)(1) and (5) of the Act. The fact that events after the period in which the violation was alleged to have occurred permit the conduct to be characterized as unlawful delay does not alter the fact that the Respondent was on notice that its failure to provide the information during the time frame established by the complaint allegations was alleged as unlawful. [12]

Second, we find that the evidence amply supports the complaint allegations. For 5 months, the Respondent continuously refused to reveal the requested relevant information to the Union. It was not until arbitration proceedings were well under way that the Respondent made the disclosures on June 29 and August 10, discussed above. As shown in Resorts International Hotel, supra, an employer is not entitled to wait until arbitration proceedings have been instituted before responding to the union’s request for relevant information pertaining to a pending grievance. Thus, we find that the Respondent failed to satisfy its bargaining obligation and therefore violated Section 8(a)(5) and (1) of the Act. [13]