Jays Foods, Inc. v. NLRB, 13208.

• Decision Date: 25 July 1961
• Docket Number: No. 13208.,13208.
• Citation: 292 F.2d 317
• Parties: JAYS FOODS, INC., an Illinois corporation, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.
• Court: U.S. Court of Appeals — Seventh Circuit

292 F.2d 317 (1961)

JAYS FOODS, INC., an Illinois corporation, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.

No. 13208.

United States Court of Appeals Seventh Circuit.

July 25, 1961.

Bernard M. Kaplan, Blanksten & Lansing, Chicago, Ill. (Harold S. Lansing, Chicago, Ill., of counsel), for petitioner, Jays Foods, Inc.

Marcel Mallet-Prevost, Asst. Gen. Counsel, William J. Avrutis, Atty., Stuart Rothman, Gen. Counsel, Dominick L. Manoli, Assoc. Gen. Counsel, Allison W. Brown, Jr., Atty., National Labor Relations Board, Washington, D. C., for respondent.

Before SCHNACKENBERG, KNOCH and CASTLE, Circuit Judges.

SCHNACKENBERG, Circuit Judge.

Before us is the petition of Jays Foods, Inc., an Illinois corporation, herein referred to as petitioner, to review and set aside an order of the National Labor Relations Board entered pursuant to section 10(c) of the National Labor Relations Act, as amended (29 U.S.C.A. § 151 et seq.), and reported in 129 N.L.R.B. No. 70. In its answer to the petition the Board has requested enforcement of its order.

The Board, affirming the rulings of a trial examiner and adopting his findings, conclusions and recommendations, found that petitioner, in order to avoid bargaining with a union,¹ its employees' lawful representative, discharged six mechanics and discontinued the department in which they worked, thereby violating section 8 (a) (1), (3) and (5) of the Act.

At relevant times, petitioner, a manufacturer of potato chips and popcorn, employed a total of 275 employees in its main plant and four branches in Chicago, Illinois, and at two additional branches in Wisconsin. It used 115 automobile trucks to deliver its products in Chicago, and, until July 31, 1959, employed seven mechanics under its fleet superintendent, John R. Jutkins, to maintain and keep them in repair. Five of these mechanics regularly worked with Jutkins at the garage attached to the main plant, and the other two at garages attached to branch plants in the area.

In March 1958, Jutkins and Thomas Stanislawski, petitioner's treasurer and comptroller, instituted a system of ascertaining the cost of operation of the automotive repair and maintenance department, and, until July 31, 1959, they made a weekly review of the job sheets relative to the keeping of costs. A steady increase of costs in that department was noted and was considered "a warning signal that it was getting a little out of hand". They had more than a dozen conversations after the making of these reports and, prior to July 31, 1959, in comparing the merits and costs of farming out this work with the cost of doing it in petitioner's own shop, Stanislawski in July 1958 concluded that it would be cheaper to farm out the work, and Jutkins, prior to July 31, 1959, became definitely convinced that costs could be reduced by farming out the work to outside independent garages.

Shortly before Christmas 1958, at the home of Mr. Japp, president of petitioner, Jutkins discussed a change to farming out operations at the Silver Lake and Milwaukee plants. He pointed out that farming out "was showing quite an appreciable contrast in the lower cost * * * rather than send our men to Milwaukee and Silver Lake", and he suggested "that maybe we would be better off if we farmed all our work out".

In March 1959, when Japp told Jutkins "things are tightening up and we have to cut our expenses", the question of farming work out was again discussed, and both agreed that it would seem that the costs of automotive repairs and maintenance could be reduced thereby, although Jutkins thought that convenience and timing are gone if all the work was farmed out.²

Petitioner consented to the election which was conducted on July 21, 1959, when six of the seven employees in the unit voted for the union and one against. On the same day, Mr. Japp asked business agent Lo Furno of the union, who was then on the main plant premises, if the latter wanted to see Japp then to talk it over and Lo Furno said "No, we have to wait until we are certified."

On July 24, 1959, Lo Furno left two copies of the proposed union contract with Jutkins to give to Japp. The contract was reviewed by Japp, Jutkins and Stanislawski. Their reaction to the terms of the proposed contract is probably typified by Stanislawski's remark: "Cripes, we can't live with this; it is too much." An examination of the record reveals that, for instance, four employees classed as mechanics who were being paid $2.50 per hour would under the proposed contract receive either $2.96 or $2.91 per hour depending on whether they were classed as "automotive machinists" or "mechanics." The wages of a mechanic's helper would have increased from $1.85 to $2.46 per hour. The contract also provided for an across-the-board wage increase effective April 1, 1960, and other benefits.

All of the above-cited evidence and data relative to petitioner's cost factors and the comparative costs of handling the work itself, as compared to farming it out to independent garages, clearly indicates that petitioner, at least a year before the union election, was acutely cost-conscious, was already considering farming out all of its automotive repair and maintenance work in order to further reduce its costs, and had already embarked on such a program at noticeable savings in comparative labor costs.³

No replacement employees have been hired, and petitioner has, since July 31, 1959, consistently followed the policy of not doing any of the automotive repair and maintenance work itself, but has instead farmed out all such repair and maintenance work to outside independent garages.

The foregoing facts appear in the record and are not contradicted. They clearly establish that petitioner's sole reason for abolishing its self-service operation of an automotive repair and maintenance department, which involved the discharge of its employees therein, and the shifting to a farming-out policy long contemplated prior to the election of July 31,...