NLRB v. Die Supply Corporation, 6961.

• Decision Date: 17 May 1968
• Docket Number: No. 6961.,6961.
• Citation: 393 F.2d 462
• Parties: NATIONAL LABOR RELATIONS BOARD, Petitioner, v. DIE SUPPLY CORPORATION, Respondent.
• Court: U.S. Court of Appeals — First Circuit

393 F.2d 462 (1968)

NATIONAL LABOR RELATIONS BOARD, Petitioner, v. DIE SUPPLY CORPORATION, Respondent.

No. 6961.

United States Court of Appeals First Circuit.

April 12, 1968.

Rehearing Denied May 17, 1968.

Charles N. Steele, Washington, D. C., with whom Arnold Ordman, General Counsel, Dominick L. Manoli, Associate General Counsel, Marcel Mallet-Prevost, Asst. General Counsel, and Paul J. Spielberg, Washington, D. C., were on brief, for petitioner.

Murray S. Freeman, Boston, Mass., with whom John J. Delaney, Jr., Boston, Mass., Henry G. Stewart, Cambridge, Mass., and Nutter, McClennen & Fish, Boston, Mass., were on brief, for respondent.

Before ALDRICH, Chief Judge, McENTEE and COFFIN, Circuit Judges.

McENTEE, Circuit Judge.

This is a petition for enforcement of a Labor Board order based on findings that the respondent, Die Supply Corporation, refused to bargain with the union in connection with the relocation of its Rhode Island plant.

Die Supply Corporation (the company), an Ohio corporation manufactures and sells die sets and related products. In January 1965 the company arranged to purchase the Standard Die Set Company, a division of Harsco Corporation, located in Cranston, Rhode Island.¹ It also leased the Cranston plant for a three months period with the view to establishing a branch operation either there or elsewhere in Rhode Island. These transactions, which became effective on February 16, 1965, were handled by and in the name of one Lawrence, the attorney for and an officer, director and shareholder in the company.

Harsco (Standard Die Set Company) had a collective bargaining contract with the Steelworkers Union² which was about to expire in February 1965. The union sought a new contract and in January 1965 when Harsco informed them that Standard Die Set was being sold the union arranged a meeting with Lawrence for February 11. Also present at this meeting were one Gardner, general manager of Standard Die Set, who was being retained temporarily by the new employer, and two officials of the union named Spitz and Gould. The union insisted on continuing under the Harsco contract and threatened to strike unless it was recognized and this contract continued. Lawrence objected to continuing under the Harsco contract. He pointed out that operations at the plant were going to be greatly reduced when the new company took over, that less personnel would be required and that it would be almost impossible for the company to assume the burden of the Harsco contract. He also stated that it was uncertain whether the company would remain at the Cranston plant or move elsewhere but if it did move, the new location almost certainly would be in Rhode Island.

After some further discussion particularly with reference to changes in various employee benefits and other provisions of the expiring Harsco contract, the parties finally reached an oral understanding which later that day was confirmed in a telephone conversation between Spitz and one Echlin, Lawrence's labor lawyer. Thereupon, Echlin prepared a collective bargaining contract which Spitz approved and the parties executed as of February 16, 1965. This contract was based on the expiring Harsco contract with certain modifications dictated in part at least by the reduction in size of the new employer's planned operation. The expiration or termination clause of this contract is the only provision that is in dispute in this case. This provision reads as follows:

"8. * * * This agreement shall remain in effect from date hereof until such time as the Company terminates its operations at the above Cranston plant, provided however, that should the Company continue its operations beyond June 1, 1965, this Agreement shall be subject to termination by either party upon 30 days\' advance written notice to the other party."

The company took over operation of the Cranston plant on February 16, 1965 as planned.³ A few weeks later, without notice to the union, it leased facilities in Warwick, Rhode Island — some four miles from the Cranston plant. The company closed down the Cranston plant on May 19, 1965, and on May 24 commenced operations at the new location. While still at Cranston the company dealt directly with the employees rather than the union with reference to employment at Warwick. There is evidence that in at least two instances employees were recruited to work at the Warwick plant without regard for seniority, for lower wages and with no union. At no time did the company notify or consult with the union about this move or agree to bargain with reference to the effects of it. On two accasions during May after the union learned of the forthcoming move, it demanded negotiations with the company but without success. In fact, at a meeting held on May 24, when Gould protested the hiring of Warwick employees out of seniority, Lawrence informed him that in his opinion the company was no longer obligated to recognize or bargain with the union now that the Cranston plant had been closed down.

Mirroring the findings of the trial examiner, the Board ruled that the above stated termination clause became operative only if the Cranston operation were liquidated, that it did not apply in the event of relocation and no notice of termination having been given by either party, this contract was still in full force and effect at the Warwick plant. The Board found, as did the trial examiner, that in failing to inform the union of its intention to move, by refusing to bargain about the effects of the move, by refusing to recognize and bargain with the union at the Warwick plant and by bargaining directly with the employees about transfers to the Warwick plant and unilaterally establishing their conditions of employment, the company violated section 8(a) (5) and (1) of the National Labor Relations Act. The Board entered its order accordingly. It now seeks enforcement of this order on either of two grounds: (1) that the contract contemplated that the union would continue to represent the employees even after the Cranston operation terminated, and (2) that quite apart from the contract, when the company recognized the union in February 1965 this recognition continued and extended to the Warwick plant.

The company contends that the February 16 contract was a compromise agreement, that when made the parties understood that the contract and indeed the recognition was only for the limited period of the Cranston operation which was a close-down operation.

We do not agree with the Board's ruling that the contract carried over and remained in effect at the Warwick plant. In our opinion the language of the termination clause as well as the surrounding circumstances does not support this interpretation. Contrary to the trial examiner, we find nothing "ambiguous" about this provision. It expressly states that the contract shall remain in effect "until such time as the company terminates its operations at the Cranston plant." There is no reason to believe that this means anything but precisely what it says and we find no warrant for stretching it to mean that the contract was to remain in effect until the company was "liquidated."

As early as February 11, 1965, the union became aware of the likelihood of a transfer of the Cranston operation in the near future. Thus we think it unlikely that the union would have permitted the phrase "Cranston plant" to be used to define its rights if it believed that the contract would remain in effect as long as the company's operations continued at Cranston or elsewhere. Moreover, only the company's interpretation of the termination clause explains the reference in it to June 1, 1965. It maintains that it expected to close down operations at Cranston by June 1 and that the thirty days' notice provision contained in the termination clause was inserted in the event that the close-down was not effectuated by that date. The union's claim that it had only a vague awareness that there might be a transfer to another location and that in any event the contract would still apply at the new location is difficult to reconcile with the obvious significance of the June 1 date. Also, we think it significant that at no time during the union's demands of May 1965 that the company bargain with it with reference to the move, did it claim that the February 16 contract continued in effect at Warwick.

Finally, it seems clear from Echlin's cover letter to Spitz, dated February 12, 1965, forwarding the draft of the agreement, that it was likely the Cranston plant would close down in a short time and that this would ipso facto terminate the agreement.⁴ If the union thought that this was not what it wanted in the way of a termination clause this was the time to speak. In this connection we point out that Spitz said this draft "quite adequately" reflected the arrangements that he and Echlin discussed over the telephone. Therefore, apart from any question of credibility and purely as a matter of interpretation, we must reject the Board's ruling that the February 16 contract extended beyond the close-down of the Cranston operation.

Petitioner's second ground — that apart from the contract the union recognition extended to the Warwick operation — presents a different and a closer question. The...