Elastic Stop Nut Div. of Harvard Industries, Inc. v. N.L.R.B., 89-1723
| Decision Date | 11 December 1990 |
| Docket Number | No. 89-1723,89-1723 |
| Citation | 287 U.S. App. D.C. 287,921 F.2d 1275 |
| Parties | 135 L.R.R.M. (BNA) 3257, 287 U.S.App.D.C. 287, 59 USLW 2388, 117 Lab.Cas. P 10,437 ELASTIC STOP NUT DIVISION OF HARVARD INDUSTRIES, INC., Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent, Local 726, United Automobile, Aerospace and Agricultural Implement Workers of America, Intervenor. |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
Avrum M. Goldberg, with whom Victoria A. Higman was on the brief, for petitioner.
Richard A. Cohen, Atty., N.L.R.B., with whom Howard E. Perlstein, Supervisory Atty., and Aileen A. Armstrong, Deputy Associate Gen. Counsel, N.L.R.B., were on the brief, for respondent.
Thomas J. Giblin and James J. Marchwinski were on the brief, for intervenor.
Before WALD, Chief Judge, RUTH BADER GINSBURG and SENTELLE, Circuit Judges.
Opinion for the Court filed by Circuit Judge SENTELLE.
This litigation arises from events surrounding Harvard Industries' ("Harvard") purchase of the Elastic Stop Nut Division ("ESND") of Amerace Corporation. The case is before us on a petition to review an order of the National Labor Relations Board ("NLRB" or "Board") finding Elastic Stop Nut Division of Harvard Industries in violation of sections 8(a)(1), 8(a)(3), and 8(a)(5) of the National Labor Relations Act, 29 U.S.C. Secs. 151 et seq. (1988) ("NLRA" or "Act"), for failing to rehire all of ESND's former work force because of anti-union animus, dismissing workers engaged in an unfair labor practice strike, and refusing to bargain with the ESND employees' former union. The Board has cross-petitioned for enforcement of its order. Local 726 ("Union"),") the collective bargaining representative of the employees of Amerace, Harvard's predecessor, has intervened on behalf of the Board.
For the reasons set forth below, we affirm the Board's decision and accompanying order. 1
Elastic Stop Nut Division of Harvard Industries has been in the business of manufacturing metal fastening devices for more than forty years. Initially an independent company, Elastic Stop Nut was purchased by Amerace Corporation in 1968. Amerace continued to operate Elastic Stop Nut's principal manufacturing concern in Union, New Jersey and, in 1973, added a second Elastic Stop Nut plant in Pocohontas, Arkansas, which--except for a brief period of time--has been non-union.
In June, 1984, Amerace entered into a new collective bargaining agreement with Local 726, the exclusive bargaining agent for workers at the New Jersey plant. The agreement was to be effective through May 30, 1986, and purported to bind, not only the parties themselves, but also "their successors and assigns."
According to testimony offered by Gary Anderson, the Division Controller of Elastic Stop Nut, Amerace began looking for a potential purchaser for the company in 1984. By July of that same year, Harvard had engaged in serious negotiations with Amerace to purchase Elastic Stop Nut. Harvard is a corporate conglomerate in the business of acquiring other companies for growth purposes. In previous acquisitions of companies with unionized work forces, Harvard always has hired its predecessor's work force, has recognized the existing union, and has negotiated with the union for changes in any collective bargaining agreements.
Before Harvard agreed to buy Elastic Stop Nut, it extensively evaluated Elastic Stop Nut's operations. Harvard hired James Duke, a former Elastic Stop Nut president, and Arthur Anderson & Co., a business consulting firm, to evaluate Elastic Stop Nut's operations. In addition to recommending organizational changes and certain capital outlays, Arthur Anderson recommended that Harvard hire an entirely non-union work force at the New Jersey plant and ultimately merge its operations with the Arkansas plant.
In early March, in anticipation of the likely acquisition, Elastic Stop Nut President James Kerestes ordered the New Jersey plant managers to evaluate the bargaining unit employees. No such order was given for non-union employees, however, nor were evaluations conducted in the other Elastic Stop Nut plant.
Each employee was to be evaluated twice: once by his or her own supervisor and once by Elastic Stop Nut's personnel department under the direction of William Tehanchuk. Each evaluator was to rate the employees on the basis of a one-to-ten scale; the two ratings would then be averaged for a final, composite score. The line supervisors apparently were instructed not to consider an employee's union sympathies in making their ratings.
However, Tehanchuk, in directing the personnel department, was instructed to consider an employee's union sympathies in making his evaluations. In 150 instances, the personnel department rated employees lower than the employees' supervisors did. In 48 of the 150 instances, when the personnel department's lower rating was averaged with the supervisor's higher rating, the overall rating lowered the employee below minimally acceptable status. Although thirty employees actually received higher ratings from the personnel department than from their supervisors, in most of those cases the combined ratings still resulted in the employee being rated below the minimally acceptable grade.
In addition to the individual employee evaluations, Stuart Coleman, Harvard's Vice President, instructed an Elastic Stop Nut operations manager to prepare a list of bargaining unit employees who were essential to the operation of the plant. This relatively small group of people consisted mostly of foremen or skilled workers. No such list was made for salaried workers, however; Harvard retained virtually all of these employees. Richard Mason, an Elastic Stop Nut plant manager under Amerace, also testified that Coleman confirmed that Harvard would commence operations union free.
On March 29, 1985, Harvard entered into a purchase agreement for the assets of Elastic Stop Nut with Amerace and hired Duke as the acting president of the new company. The effective take-over day was scheduled to be April 12, 1985. On Monday, April 8, Harvard posted a notice to bargaining unit employees stating that they could apply for employment with the re-opened ESND between April 8 and 12. Harvard informed virtually all non-bargaining unit employees that they could continue working for ESND.
On April 9, Union representatives met with Harvard's labor attorney, Donald Bush, asking him if Harvard intended to recognize the Union. Bush indicated that his law firm had promised Harvard a union-free environment. Although the Union stated that it was willing to bargain, Bush informed the Union representatives that Harvard would not assume the prior labor agreement. According to a Union representative's testimony, Bush added that Harvard would not hire more than 50% of the unionized labor force.
Harvard Vice President Coleman then assembled a hiring team to consider the bargaining unit applicants. Coleman told the team that Harvard intended to hire no more than 25% of the current bargaining unit employees to insure that Harvard avoided the Union. Coleman emphasized that the hiring team should avoid union-oriented applicants and that the only ESND Amerace applicants who should be considered were those who were highly skilled or exceptionally fine employees.
On Friday, April 12--the last official day of hiring--the Union sent Harvard a letter applying for jobs on behalf of all 242 former Elastic Stop Nut bargaining unit employees. By the close of business that same day, 221 Union members had made individual applications to Harvard. Harvard offered only sixty-eight Amerace bargaining unit employees jobs. With few exceptions, those Amerace bargaining unit employees hired by Harvard were highly skilled personnel, essential to plant operations. In addition, Harvard hired seventy-five employees not previously employed by Amerace, hence, not members of the former bargaining unit.
As of the date of the Board's hearing, Harvard operated the plant without substantial changes--the work force remained approximately the same size, the product lines were the same, as were the suppliers, raw materials, customers, and machinery. The plant's management also remained largely intact. The principal changes Harvard made were in the increased use of outside contractors and part-time employees and the consolidation of job classifications. Thus, Harvard operated the plant much the same way it had operated under Amerace.
On Sunday, April 14, the Union held a meeting at which a strike vote was taken. The Union voted to strike, taking the position that no one should go back to work unless Harvard rehired all former Elastic Stop Nut Union employees. Picketing commenced the next day, and nearly all former Elastic Stop Nut employees who had subsequently accepted employment offers from Harvard failed to report to work. Harvard initiated a telephone campaign to convince striking employees to come to work. After the failure of the telephone campaign, Harvard sent a letter to forty-one of the strikers stating that it considered the workers to have voluntarily resigned and/or been replaced. Some two weeks later, on May 21, Harvard sent a letter to fourteen more of the striking employees "confirming" the fact that they "voluntarily" had decided not to accept employment with Harvard. The letters invited the workers to re-apply with Harvard in the future. The recipients of these letters continued to strike and Harvard continued to advertise for replacement workers.
The Board found, in affirmance of the ALJ, that Harvard violated sections 8(a)(3) and (1) of the Act by refusing to make employment offers to nearly three quarters of the former Elastic Stop Nut Union employees in order to avoid...
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