NLRB Cases Archive 1960 - 1995, LABOR-RELATIONS 1993-94 CCH-NLRB ¶15,595, BANKNOTE CORPORATION OF AMERICA and GRAPHIC COMMUNICATIONS INTERNATIONAL UNION, LOCAL 119B-43B, NEW YORK and NEW YORK LITHOGRAPHERS & PHOTOENGRAVERS UNION NO. 1-P, GCIU and DISTRICT 15, INTERNATIONAL ASSOCIATION, (Dec. 16, 1994), National Labor Relations Board, (Dec 16, 1994)

BANKNOTE CORPORATION OF AMERICA and GRAPHIC COMMUNICATIONS INTERNATIONAL UNION, LOCAL 119B-43B, NEW YORK and NEW YORK LITHOGRAPHERS & PHOTOENGRAVERS UNION NO. 1-P, GCIU and DISTRICT 15, INTERNATIONAL ASSOCIATION OF MACHINISTS & AEROSPACE WORKERS.

315 NLRB No. 155.Case Nos. 2-CA-24304, -24371 and -24500. December 16, 1994 D. Barry Morris, Administrative Law Judge..

Before Stephens, Devaney and Browning.

Laura B. Sacks and David E. Leach III, for General Counsel. J. Richard Hammett, Mary K. Williams and Katherine A. Ellis (Verner, Liipfert, Bernhard, McPherson & Hand), Houston, Texas, for Respondent. Moss K. Schenck, New York, New York, for Local 1-P. Valerie Marcus (Vladeck, Waldman, Elias & Engelhard), New York, New York, for Local 119B-43-B. William Rudis, Stamford, Connecticut, for District 15.

Successor Employers--Bargaining Duty--“Perfectly Clear” Successor.--An employer that purchased a facility from another company was not a “perfectly clear” successor under the U.S. Supreme Court’s rulings in NLRB v. Burns Security Services, (1972) 68 LC ¶12,660, and its bargaining obligation did not attach until it hired a predecessor’s employees. In a letter to the unions representing existing bargaining units, the employer stated its “intention to attempt to hire its initial work force from among the employees currently working” at the facility. This letter also effectively announced that it would be instituting new terms and conditions of employment. Thus, the employer’s statements conveyed to the predecessor’s employees the message that it would not be adopting the predecessor’s terms and conditions of employment. Further, the employer subsequently communicated specific changes to the employees and unions. Section 8(a)(5).

Back reference: ¶3025.25.

Successor Employers--Bargaining Duty--Changes in Terms.--Following an employer’s purchase and staffing of a facility, it failed to establish that the historical bargaining units at the facility were no longer appropriate separate units. The NLRB has a longstanding policy that “a mere change in ownership should not uproot bargaining units that have enjoyed a history of collective bargaining unless the units no longer conform reasonably well to other standards of appropriateness.” In this instance, the record strongly supported a finding that the employees in these units continued performing the same or substantially the same work as they had prior to the change in ownership. Moreover, any occasional performance of duties across unit lines was insufficient to destroy the integrity of the units at the facility. Further, the employer’s job flexibility system did not fundamentally alter the identity of the established bargaining units. Thus, the employer unlawfully refused to bargain when it changed terms and conditions of employment. Section 8(a)(5).

Back reference: ¶3145.86.

From Text of Board’s Decision

On March 3, 1992, Adminstrative Law Judge D. Barry Morris issued the attached decision. The Respondent, the General Counsel, and Charging Party Graphic Communications International Union, Local 119B-43B, New York, filed exceptions and supporting briefs; the Respondent and the General Counsel filed answering briefs; and the Respondent filed a reply brief.

* * *

The Board has considered the decision and the record in light of the exceptions and briefs and has decided to affirm the judge’s rulings, findings, and conclusions and to adopt the recommended Order.

We agree with the judge’s finding that the Respondent is the legal successor to American Bank Note Company (ABN) within the meaning of NLRB v. Burns Security Services, [68 LC ¶12,660] 406 U.S. 272 (1972), and that the three historical units which the Charging Party Unions claim to represent constitute appropriate units for bargaining. Specifically, we find that the Respondent failed to show that the changes that it made in the operation of the plant rendered inappropriate the three long standing units at issue here. We also agree with the judge’s conclusion that the Respondent was not a “perfectly clear” successor to ABN within the meaning of Burns, and therefore was free to set initial terms and conditions of employment prior to its April 19, 1990 hiring of ABN’s former employees. On that date, however, a bargaining obligation had attached with respect to any subsequent changes the Respondent wished to make in terms and conditions of employment. Accordingly, we find that the Respondent violated Section 8(a)(5) and (1) of the Act by unilaterally changing terms and conditions of employment on about April 23, 1990, without affording the Charging Party Unions an opportunity to bargain about the changes.

I. Factual Background

On December 15, 1989, Francois-Charles Oberthur, through its subsidiary, Respondent Banknote Corporation of America (BCA), entered into a purchase agreement to acquire ABN’s Ramapo facility in Suffern, New York. The sale of ABN’s Ramapo facility was completed on February 27, 1990, [1] and the Respondent began operations at the plant on April 19.

At the time of the acquisition, the Ramapo plant employed about 100 production employees who were represented in separate units by 11 unions, including the three Charging Party Unions.

On March 23, the Respondent sent a letter to all 11 unions stating that the Respondent intended to attempt to hire its initial work force from the employees currently working at the Ramapo facility, but that it was not making a commitment to recognize the Unions or be bound by their collective-bargaining agreements with ABN. This letter expressly disavowed a March 1 letter from ABN’s director of human resources to Charging Party Lithographers Local 1-P stating that the Respondent intended to recognize the Unions at Ramapo and to bound by the collective-bargaining agreements. We find that the March 23 letter adequately disavowed the commitment on behalf of BCA.

On April 11, the Respondent met with representatives of all the Unions and informed them that it would not honor the collective-bargaining agreements with ABN. Martin Ferenczi, the Respondent’s president, advised the Unions’ representatives that the Respondent intended to have a more flexible operation with respect to the jobs that employees would perform, and that it would cross-train employees so that they would be able to perform various functions. Ferenczi also told the Unions that health benefits presently in effect would continue for a period of 60 days. [2] Fernczi did not discuss any other terms and conditions of employment during the April 11 meeting with the Unions.

On April 16, the Respondent interviewed 102 job applicants, all former ABN employees. All the employees who testified at the hearing were asked about the interview. Their testimony was limited to the following.

Machinist Augustine Leone testified that the Respondent said nothing to him during his interview about vacation, sick leave, or holidays. He testified that flexibility was mentioned, and that he was told that employees would do things other than their own basic jobs. Machinist Jaroslaw Sawaryn testified that he was told that there would be job flexibility and that he would be asked to do different things. Machinist Shop Steward Salvatore Manitone said he was told nothing about benefits in the interview.

Platefinishers Robert Whelan and Gerard Lindsey recalled no discussion of holidays, vacation, sick leave, or other benefits during their interviews. Lindsey recalled that the interviewers mentioned that hours might be longer and that the Company would like to have more flexibility in terms of jobs. Photoengraver Luz Ruiz testified she was told during the interview that the salary and benefits would be the same.

The only employees hired by the Respondent were approximately 50 of these former ABN employees. They began working for the Respondent on April 19, along with four former ABN supervisors. These employees comprised the Respondent’s entire work force.

On about April 23, the Respondent unilaterally changed the employees’ terms and conditions of employment, with the result that as of that date all employees worked the same hours, participated in the same pension, vacation, and sick pay plans, received the same health and welfare benefits, and observed new company holidays. The three units at issue in this case encompass 14 employees. Graphic Communications Local 119-43B claims to represent nine employees classified as “general workers” who work in the printing department; Lithographers Local 1-P claims to represent three photoengravers who work in the engraving department; and machinist District 15 claims to represent two other employees who work in the engraving department. The Respondent has recognized two other untions as the bargaining representatives of employees who are in the engraving department. These two recognized unions are Printers and Engravers Local 28-58, which represents 10 employees, and ALA Local 1, which represents 6 employees.

II. The Judge’s Decision

The judge found, and we agree, that after the Respondent took over the operation of the Ramapo facility from ABN, the same employees produced the same products, in the same plant, with the same equipment, in the same jobs, and by the same methods. He concluded, therefore, that the Respondent was the legal successor to ABN.

The judge properly noted that under Burns, supra, the Supreme Court made it clear that a successor is normally entitled to set the initial terms and conditions of employment on which it will hire the predecessor’s employees. He further noted, however, that in cases where the successor plans to retain the predecessor’s employees, and makes no mention of changes of employment conditions, the Board requires the successor to bargain concerning initial terms and conditions of employment. [3] The judge found that the only changes in terms and conditions of employment which were announced prior to hiring the employees were a desire for flexibility in terms of job functions, and that the health benefits in effect at that time with ABN would continue for a period of 60 days. The judge thus concluded that the Respondent was required to bargain concerning any changes in other terms and conditions of employment. Accordingly, the judge found that by unilaterally changing terms and conditions of employment on April 23, without affording the Unions a chance to bargain about the changes, the Respondent violated Section 8(a)(5) and (1).

The Respondent had contended, inter alia, that it was not the legal successor to ABN because the three units involved in this case were no longer appropriate in view of changes the Respondent made in the organization of production processes and the duties of the employees. The Respondent argued that throughout its discussions with the Unions it announced its intention to introduce job flexibility and overlap, and that the duties of the employees in the three units at issue had changed significantly.

Although the judge acknowledged that under the Respondent’s operation certain employees fill in for employees in other departments, he concluded that this was a result of the reduction in size of the work force, and that employees in the three units perform the same duties they previously performed for ABN. [4] The judge noted that while changes in working conditions may have been casually mentioned in some employee interviews, by no means were all or most of the employees specifically told before they were hired of any definite changes. In fact, the judge found that the employees were told that things would be about the same. The judge held that the three Charging Parties remained the bargaining representatives of the employees in each of the three respective units.

III. Discussion

The General Counsel and the Charging Parties have excepted to the judge’s failure to find that the Respondent is a “perfectly clear” successor to ABN within the meaning of Burns, supra, 406 U.S. at 294-295, with an obligation to bargain with the Unions before setting initial terms of employment. We find no merit in these exceptions.

The Board held in Spruce Up Corp., [1994 CCH NLRB ¶26,251] 209 NLRB 194 (1974), enfd. on other grounds, [77 LC ¶11,082] 529 F.2d 516 (4th Cir. 1975), that even if a successor employer indicates a willingness to hire a majority of its employees from the ranks of the predecessor’s employees, it is not “perfectly clear” that it will be a successor if, at the same time, it informs those employees that it does not intend to adopt the terms and conditions of employment which had prevailed under the predecessor. As the Board explained in Spruce Up:

When an employer who has not yet commenced operations announces new terms prior to or simultaneously with his invitation to the previous work force to accept employment under those terms, we do not think it can fairly be said that the new employer ‘plans to retain all of the employees in the unit,’ as that phrase was intended by the Supreme Court. The possibility that the old employees may not enter into an employment relationship with the new employer is a real one. 209 NLRB at 195.

That is the situation presented in this case. Although in its March 23 letter to the Unions the Respondent stated its “intention to attempt to hire its initial work force from among the employees currently working at the Ramapo facility,” this letter also effectively announced that it would be instituting new terms and conditions of employment. Specifically, the Respondent’s statements in the March 23 letter disavowing the notion that the Respondent had agreed to be bound by the terms and conditions of the ABN collective-bargaining agreements and declaring that the Respondent had “not made any such commitments” put the employees on notice that the Respondent would be making changes in the employment terms of the predecessor. In our view, the Respondent’s statements in the letter convey to the predecessor’s employees the message that the Respondent would not be adopting the predecessor’s terms and conditions of employment. Thus, simultaneous with its stated intention to retain the predecessor’s employees, the Respondent announced new terms and conditions of employment. Subsequently, specific anticipated changes were communicated to the Unions and to three of the prospective employees at their interviews. Under these circumstances, we conclude that the Respondent was not a “perfectly clear” successor under Burns, and that its bargaining obligation did not attach until it hired the employees on April 19.

Critical to a finding of successorship is a determination that the bargaining unit of the predecessor employer remains appropriate for the successor employer. [5] In Burns, supra, the Supreme Court found that the successor employer (Burns) was obligated to bargain with the union that represented the employees of the predecessor (Wackenhut). The Court observed however: “It would be a wholly different case if the Board had determined that because Burns’ operational structures and practices differed from those of Wackenhut, the Lockheed bargaining unit was no longer an appropriate one.” Id. at 280. The Board’s longstanding policy is that “a mere change in ownership should not uproot bargaining units that have enjoyed a history of collective-bargaining unless the units no longer conform reasonably well to other standards of appropriateness.” Indianapolis Mack Sales & Service, [1987-88 CCH NLRB ¶19,430] 288 NLRB 1123 fn. 5 (1988). As noted by the judge, the Board has consistently held that long-established bargaining relationships will not be disturbed where they are not repugnant to the Act’s policies. [6] The Board places a heavy evidentiary burden on a party attempting to show that historical units are no longer appropriate. See Columbia Broadcasting System, [1974-75 CCH NLRB ¶15,156] 214 NLRB 637, 642-643 (1974) (“compelling circumstances” must be shown before the Board will disturb a historical unit).

We find that the Respondent has not sustained its burden of showing that the Charging Parties’ historical units no longer are appropriate separate units. The sketchy testimony of the six employees above, as well as several inconclusive documents purporting to show the switch in job duties, are the only evidence supporting the Respondent’s contention that the three units are now inappropriate for bargaining. Contrary to our dissenting colleague’s position, we do not find this proof to be sufficient to overturn well-established units, particularly where many of the changes in duties relied upon by the Respondent actually occurred after the bargaining obligation attached.

Careful review of the record strongly supports the judge’s finding that the employees in these units continued performing the same or substantially the same work as they had prior to the change in ownership, only occasionally filling in as needed on tasks otherwise assigned to employees in other bargaining units. Such occasional or sporadic performance of duties across unit lines is insufficient to destroy the integrity of the Charging Parties’ units at the facility.

When employed by ABN, the photoengravers represented by Lithographers Local 1-P were responsible for preparing film components and etching. Under BCA’s work assignment system, they remain the only employees who perform these duties. The Respondent’s engraving division manager testified that the photoengravers “seldom” perform the additional tasks of creating models, designing support materials, and preparing litho plates.

The employees represented by the Machinists carry out precisely the same functions in the production process as they had under ABN, which generally involves shearing, grinding, and cutting. These employees have been given no new assignments by the Respondent, and employees in other units fill in to perform some of their functions only from time to time.

Although the employees represented by Graphic Communications Workers 119B-43B have been assigned to fill in on a wider scope of new duties, the fact remains that they continue to serve as the primary, and in some areas the only, employees performing their traditional duties.

The Respondent’s contention that the intermittent or occasional performance of tasks across unit lines destroys the appropriateness of the Charging Parties’ historical units is belied by its voluntary recognition of two of the other historical units, whose functions and duties the Respondent describes as “relatively intact and distinct.” The evidence presented by the Respondent reveals that the employees in those two voluntarily recognized units also are performing new duties under the Respondent’s operation. For example, employees represented by Printers and Engravers Local 28-58 now perform eight new functions not previously assigned to them by ABN. In addition, four of the tasks previously assigned exclusively to those employees are now occasionally performed by others. Thus, the introduction of new job duties is not a basis for distinguishing between the two units recognized by the Respondent and the three units at issue. [7]

The evidence presented by the Respondent, as well as the employee testimony, demonstrates that the work of the employees in the three units, although less skilled than some of the work of the hand engravers in the voluntarily recognized Local 28-58 unit, continues to be assigned in much the same manner as it had been by ABN. Thus, we find that the functions of these units are also “relatively intact and distinct” despite the Respondent’s introduction of some job flexibility.

In sum, the burden was on the Respondent to demonstrate that it had instituted such fundamental changes in the employees’ duties that the three historical units no longer were separate, appropriate units. The Respondent failed to satisfy this heavy burden. Instead of producing detailed records concerning new and different functions being performed by the employees in the three units, the Respondent introduced nothing more than conclusory evidence of interchange, and virtually no evidence about the magnitude of that alleged interchange. Thus, from the testimony and other evidence presented by the Respondent, we can determine only that one or more employees in one traditional bargaining unit have on some occasion performed duties within the same general job function as employees in another traditional unit. In the face of such scant evidence, the presumed appropriateness of the three traditional units represented by the Charging Parties was left undisturbed.

We are cognizant that this case arises in an industry that has traditionally been characterized by multiple, narrowly defined bargaining units and that the printing industry has undergone significant technological change in recent years. Such technological change, as well as the reductions in operations and staffing present in this case, may sometimes make cross-training and job flexibility both desirable and appropriate. The Board is keenly aware that unit fragmentation may result from these changes. Nonetheless, the Board’s procedures for unit clarification provide a mechanism for ensuring that bargaining units continue to reflect the reality of the workplace. Here, however, the issue presented is whether the Respondent was a legal successor, including whether the Respondent was a legal successor, including whether the bargaining units were appropriate, at a particular point in time, no later than April 19, when the former ABN employees began their employment with the Respondent. We are persuaded that the Respondent’s job flexibility system, as described prior to the employees’ commencement of work for the Respondent and as it operated when production began on April 19 under the Respondent’s ownership, did not fundamentally alter the identity of the established bargaining units. [8] Accordingly, we conclude that the Respondent had a duty to bargain with the Charging Parties concerning the April 23 changes in terms and conditions of employment and that its failure to do so violated Section 8(a)(5) and (1). [9]

[Partial Dissent]

Member Stephens, dissenting in part: Contrary to my colleagues in the majority, I find merit in the Respondent’s exceptions to the judge’s finding that the bargaining units are appropriate and that the Respondent is the legal successor to ABN.

Based on my examination of the record, I find that, even assuming the units in which the Charging Parties sought to represent the Respondent’s employees were appropriate under ABN, they are not appropriate units under the Respondent. [10]

At Ramapo under ABN, 11 unions represented its 100 production employees in 11 separate units, and there was strict compartmentalization of functions and job duties. With rare exceptions, each unit was exclusively responsible for particular steps in the printing and engraving process. The Respondent’s work force is approximately half the size of that employed by ABN at Ramapo. Unlike the five departments utilized by ABN, the Respondent has two departments--printing and engraving.

The Respondent has recognized two unions as the bargaining representatives of certain employees who are in the engraving department and whose functions remain relatively unchanged from what they were under ABN. These two recognized unions are Printers and Engravers Local 25-58, which represents 10 employees and ALA Local 1, which represents 6 employees. The Respondent has designated all other employees in both departments as general workers and cross-trained them so that all of them perform several new duties. General workers’ duties in the printing department require minimal qualifications, as evidenced by the Respondent’s frequent use of temporary employees for these positions. General workers in the engraving department are skilled or semi-skilled employees, but their skills are interchangeable and these employees are not restricted to one set of tasks.

The Respondent’s documentary evidence was not specifically contradicted, and it was corroborated by the testimony of the employees. It shows that many tasks previously performed by employees from only one or at most two former ABN units are now performed by employees from as many as five former ABN bargaining units. In addition, employees in the three units claimed by the Charging Parties are performing job functions for the Respondent that differ markedly from the duties they performed for ABN.

Specifically with regard to the units at issue, under ABN, employees represented by Local 119B-43B were exclusively responsible for finishing work in the engraving department. That work is now performed by nearly all general worker employees, including many who were represented by other unions under ABN. In addition, the Respondent’s employees formerly represented by Local 119-43B now perform unwinding and rewinding duties which they did not do for ABN. These duties are also performed by general worker employees that Local 119B-43B is not seeking to represent. Further, the nine employees in the unit sought by Local 119B-43B also perform examining work, which is a duty that is shared by a number of other employees not included in the unit. In sum, the nine employees sought by Local 119B-43B are functionally part of a group of 19 relatively unskilled general worker employees who are engaged in the end of the production process.

The three photoengravers sought to be represented in a separate unit by Local 1-P are part of a larger group of 14 engraving department employees who make printing plates by photographic processes such as operating cameras, making negatives, and stripping and assembling the negatives. Although these employees are skilled and semiskilled employees with a history of separate representation, they are not functionally distinct in the Respondent’s operation. For example, employees represented by Local 28-58 also perform certain functions that the three photoengravers perform, i.e., creating models, designing support material, and preparing lithographic plates. The record shows that only the hand engravers and designers (employees not at issue with respect to this unit) possess such specialized skills that other engraving department employees could not perform their jobs.

Finally, Charging Party Machinists District 15 seeks to represent 2 of 14 engraving department general workers who move, repair, and maintain presses and other equipment, and who also perform plate-making duties. Unlike under ABN’s operation, these two employees are no longer exclusively responsible for equipment maintenance and moving or for plate preparation functions. In addition to the two employees sought by the Machinists, the Respondent also uses employees previously represented by the Platefinishers Union (employees not in issue in this case) to operate machines in the engraving department and assist in the plate preparation process. Similarly, although the two employees previously represented by the Machinists perform some maintenance functions in the printing department, they share that work with employees previously represented by other unions. Further, because their job functions are performed in two separate departments, the two employees sought by the Machinists are not supervised exclusively by one supervisor.

As is apparent from the factual recitation above, the predecessor employer was essentially a traditional printing and engraving operation with numerous highly specialized, separately represented crafts. The Respondent’s operation, reflecting an entirely different organization of the work, features both an amalgamation of tasks--i.e. now one worker often performs tasks formerly split among workers in two or more crafts--and a splitting of tasks--i.e., tasks formerly performed by a single craft or classification of workers may now be performed both by a worker in one of the groups sought by the Charging Party Unions and by workers outside the groups sought to be represented. In short, the units which the three Charging Party Unions now seek to represent are not clearly definable either by their place in the organizational structure of the plant or the work they do.

The Board does not lightly disturb long-established bargaining relationships, and historical units will not normally be found inappropriate simply because of minor changes in the successor employer’s operation such as the addition of some new job duties for employees. [11] In the unique circumstances presented here, however, contrary to my colleagues in the majority, I would find that, because of the Respondent’s extensive and fundamental changes in the scope of the job tasks performed by its employees, that each of the three units no longer retains a distinct community of interest sufficient to support a determination that each unit is a separate appropriate unit for bargaining. [12]

Here, before it began operating the Ramapo facility, the Respondent announced to the employees and their unions its clear intention to operate without the functional distinctions that existed under ABN, and instead to utilize employee flexibility and interchangeability among jobs. These changes were already in the works before the Respondent implemented these changes in job functions from the start, beginning with its hiring decisions and continuing through the commencement of operations. [13] Indeed, the Respondent was able to cut substantially the size of the work force, in part because of the elimination of the strict lines between crafts that had existed in the ABN operation. These actions were taken contemporaneously with the beginning of the Respondent’s operation of the Ramapo plant, and were consistent with what employees were told during their hiring interviews. Thus, the employees had no reason to believe that they would be working in the narrow crafts that they had under ABN; rather, the employees were put on notice that they would be performing duties different from those they had performed for the predecessor. As reconstituted under the Respondent’s operation, the employees in the three units in question no longer function as distinct craft groups, and no longer have distinct communities of interest.

Because I have found that the functional distinctions that may once have justified recognizing separate bargaining units for the Charging Parties under ABN do not exist under the Respondent’s operation of the Ramapo facility, I find that the three units sought by the Charging Parties are not appropriate. [14] Accordingly, I find in the peculiar circumstances presented here that the Respondent is not a successor with an obligation to bargain with these historical units, and that it thus did not violate Section 8(a)(5) and (1) by unilaterally implementing changes in employees’ terms and conditions of employment on April 23. P.S. Elliott Services, [1991-92 CCH NLRB ¶16,396] 300 NLRB 1161 (1990).