NLRB v. Downtown Bakery Corp.

• Decision Date: 27 April 1964
• Docket Number: No. 15306.,15306.
• Parties: NATIONAL LABOR RELATIONS BOARD, Petitioner, v. DOWNTOWN BAKERY CORP. and Bakery and Confectionery Workers, International Union, Local 19, Respondents.
• Court: U.S. Court of Appeals — Sixth Circuit

330 F.2d 921 (1964)

NATIONAL LABOR RELATIONS BOARD, Petitioner, v. DOWNTOWN BAKERY CORP. and Bakery and Confectionery Workers, International Union, Local 19, Respondents.

No. 15306.

United States Court of Appeals Sixth Circuit.

April 27, 1964.

Argued by Gladys Kessler, N. L. R. B., Washington, D. C., Arnold Ordman, Gen. Counsel, Dominick L. Manoli, Associate Gen. Counsel, Marcel Mallet-Prevost, Asst. Gen. Counsel, Warren M. Davison, Atty., N. L. R. B., Washington, D. C., on the brief, for petitioner.

Argued by Morton D. Barrisch and Jack G. Day, Cleveland, Ohio, Day & Berkman, Cleveland, Ohio, on the brief, for respondent Union, Bernard A. Berkman and Larry S. Gordon, Cleveland, Ohio, of counsel, for respondents.

Before McALLISTER, Senior Circuit Judge, and BOYD and WILSON, District Judges.

MARION SPEED BOYD, District Judge.

The National Labor Relations Board petitions for enforcement of an order entered pursuant to a finding of violations of Sections 8(a) (1), (2), (3) and (5) of the National Labor Relations Act¹ by Respondent Downtown Bakery Corporation, and violation of Sections 8(b) (1) (A) and 8(b) (2) of the Act² by Respondent Downtown Bakery and Confectionery Workers International Union, Local 19, hereinafter referred to as BCW.

Downtown Bakery Corporation was found to have violated Sections 8(a) (5) and (1) by refusing to recognize and bargain with American Bakery and Confectionery Workers International Union, Local 219, AFL-CIO, hereinafter referred to as ABC, said refusal not being made in good faith, and additionally by unilaterally changing terms and conditions of employment of its employees. The Board also found violations by Downtown of Section 8(a) (1), (2) and (3) of the Act by the execution and maintenance of a collective bargaining agreement with BCW. The Board found in its decision and order, 139 NLRB, No. 110, that this latter conduct:

"* * * constituted (1) interference, restraint and coercion of its employees within the meaning of Section 8(a) (1) of the Act; (2) assistance and support to Respondent Union in violation of Section 8(a) (2); and (3) discrimination in regard to terms and conditions of employment to encourage membership in Respondent Union and to discourage membership in ABC Local 219 in violation of Section 8(a) (3)."

Respondent Union, BCW, was found to have violated Sections 8(b) (1) (A) and 8(b) (2) of the Act by executing and maintaining the aforementioned collective bargaining agreement with Downtown. As stated by the Board, this conduct "restrained and coerced the employees, and caused Downtown to discriminate against its employees within the meaning of Section 8(a) (3)."

On April 18, 1960, the Board certified ABC as the exclusive bargaining representative of a multiemployer unit of bakery employees of four companies, including Smayda Home Bakery Co., Inc. Prior to this multi-unit certification BCW had represented Smayda employees for a number of years. On June 14, 1960, Smayda and ABC executed a separate collective bargaining agreement effective through September 30, 1961.³ On April 24, 1961, over one year after the Board's certification of ABC, Downtown agreed to purchase all of Smayda's personal property, trade names and certain leaseholds. Shortly thereafter (May 1) a meeting of the former Smayda employees was called by the new owners of the company. Representatives of ABC were present. Carl Davis, President of Downtown, at this meeting expressed a desire to resume operations the following day and told the employees that he would try to live up to the terms and conditions of the ABC-Smayda contract. No definite agreement was reached at that time between Davis and the ABC representatives. When these representatives renewed their demands for recognition, Davis refused, contending that he was under "pressure" from another union, ostensibly the Respondent BCW. He had received on May 1 a telephone call from a representative of BCW demanding that Downtown recognize that union as representative of a majority of the employees.

On May 2, Downtown began operations, retaining all of Smayda's former employees. As production began, certain non-discriminatory unilateral changes in conditions and terms of employment were effected, including alterations in overtime pay and nighttime bonus plans. Representatives of both unions herein attempted unsuccessfully to discuss these changes with respondent employer.

During the ensuing period representatives of ABC and BCW were frequently in the Downtown plant talking to employees and seeking to talk to the employers. There is no indication of anti-union bias on the part of the Downtown employer, who seemed to maintain a neutral attitude toward the two within unions. During the period of May 1 to June 27, each union continually urged respondent employer to recognize and bargain with it. Until June 25, 1961, neither union was asked to show proof of majority status and neither of its own initiative moved to do so. On that date a representative of BCW did display to employer Carl Davis at the latter's request a number of authorization cards, dated June 12, which had been procured from a majority of Downtown employees. On June 27, 1961, Downtown recognized BCW as the bargaining representative of its employees and entered into a union security contract with it. Only after this agreement had been executed did the representatives of ABC reveal their authorization cards, which had been signed by a majority of the employees during the first week in June 1961.

The trial examiner found that the employer Downtown entertained a good faith doubt based on reasonable grounds as to which union represented a majority of its employees, and that this doubt existed at the time of the unilateral changes of working conditions and terms of employment and at the time of its refusal to recognize ABC. Accordingly, he found no violations of 8(a) (5) and (1) with respect to these particular charges. This conclusion was not concurred in by the Board, which found that the refusal to recognize ABC was not made in good faith and on reasonable grounds, so that the unilateral changes and refusal to recognize were violations of those aforementioned sections of the Act. Other conclusions of the trial examiner were adopted by the Board as previously set out.

The Board ordered respondent Downtown to bargain collectively with ABC at the latter's request. Downtown and BCW were ordered jointly and severally to reimburse the employees⁴ for money paid by them or deducted from their earnings for initiation fees, dues, etc. Allowance was also made for interest.⁵ The Board's final disposition of the matter contained five cease and desist orders and six affirmative action orders directed to Downtown and three cease and desist orders and four affirmative action orders directed to BCW, Local 19.

Substantial evidence supports the Board's finding that when production was resumed on May 2, 1961, Downtown Bakery continued essentially the same business which theretofore had been conducted by Smayda Bakery. The methods of production and type of goods produced by the two companies were sufficiently similar to warrant the conclusion that Downtown was a "successor employer," N. L. R. B. v. Auto Ventshade, Inc., 276 F.2d 303 (C.A.5, 1960); N. L. R. B. v. McFarland, 306 F.2d 219 (C.A.10, 1962), imposing upon such successor the duty to recognize and bargain with the incumbent union. N. L. R. B. v. Auto Ventshade, Inc., supra.

Where as here the Board's certification of an incumbent union has been in existence for one year when a successor employer acquires the business, the union's continued majority status is presumed. This presumption binds the successor employer unless a doubt as to the union's majority is raised in good faith and on reasonable grounds. N. L. R. B. v. International Furniture Co., 212 F.2d 431 (C.A.5, 1954); The Celanese Corporation of America, 95 NLRB 664.⁶ The decisive issue then is whether alleged unfair labor practices, as refusal to bargain and unilateral changes in working conditions and terms of employment, were committed under a good faith doubt based on reasonable grounds as to the incumbent union's continued majority status.

Before there can be a finding of good faith of the employer, there must exist some reasonable grounds for believing the union has lost its majority status since certification. Celanese Corporation of America, supra. Apart from the telephone call on May 1, 1961, by which respondent union BCW notified Downtown that it represented all the employees in the Smayda plant, the Board finds "the record is barren of evidence showing that a reasonable basis existed for believing that ABC Local 219 no longer represented a majority. * * *" Respondents, contending there is a definite additional basis, emphasize that the election by which ABC became bargaining agent for Smayda was not unanimous, their contention being that the majority of the Smayda employees voted for BCW, but their choice was overridden by the combined votes of the employees of the other three companies of the voting group.⁷ Administrative Decision of the NLRB General Counsel, Case No. SR-2403, rendered December 11, 1962, placed the burden on the union of establishing that the company's refusal to bargain was not based on a good faith doubt of the union's continued majority status. The company in that case had withdrawn from a multiemployer association and recognition of the union had previously been based on an election of the multi-employer unit. In Zick, dba United States Molded Shapes, 141 NLRB No. 26, the Board upheld the employer's refusal to bargain, taking particular pains to note that there was no showing that the union at any time represented a majority in a separate unit of employees. From the foregoing, it may be concluded that the dissolution of the multiemployer unit of which Smayda employees composed a relatively small segment will serve as reasonable grounds...