Dynamic MacHine Co. v. National Labor Relations Board

552 F.2d 1195, 46 A.L.R. Fed. 391, 94 L.R.R.M. (BNA) 3217, 1977 U.S. App. LEXIS 14047
CourtCourt of Appeals for the Seventh Circuit
DecidedMarch 31, 1977
Docket76-1036
StatusPublished
Cited by23 cases

This text of 552 F.2d 1195 (Dynamic MacHine Co. v. National Labor Relations Board) is published on Counsel Stack Legal Research, covering Court of Appeals for the Seventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Dynamic MacHine Co. v. National Labor Relations Board, 552 F.2d 1195, 46 A.L.R. Fed. 391, 94 L.R.R.M. (BNA) 3217, 1977 U.S. App. LEXIS 14047 (7th Cir. 1977).

Opinion

BAUER, Circuit Judge.

The petitioner asks us to overturn a National Labor Relations Board order directing it to bargain with District No. 8, Inter-' national Association of Machinists & Aerospace Workers, AFL-CIO. The Board cross-petitions for enforcement of its order. Before us for review are the Board’s findings (1) that Dynamic Machine Co., a successor employer 1 to a firm that participated in a representation election won by the union, is obligated to bargain with the union; and (2) that Foreman Harry Tietz was a supervisor within the meaning of Section 2(11) of the National Labor Relations Act, as amended, 29 U.S.C. § 152(11). We enforce the Board’s order.

I.

On March 20, 1974, a representation election was held among the employees of the petitioner’s predecessor, which bore the same name (hereinafter ‘Dynamic I”). Nineteen votes were cast in favor of union representation; 14 votes against. The union challenged 8 ballots, 6 on the ground that the votes were supervisors, 2 on other grounds. Dynamic I filed an objection to the election based on a union campaign letter distributed to the employees within a week of the election.

The Board conducted a hearing on the challenged ballots and the objection in June 1974. At the hearing, the parties stipulated to the counting of the two ballots that were challenged on grounds other than that the voter was a supervisor. Both ballots were found to have been cast against the union. The tally then stood at 19 votes for representation, 16 against representation, with 6 challenges outstanding.

On September 8, 1974, the hearing officer issued a report denying Dynamic I’s objection. He also denied the union’s challenges to three of the ballots allegedly cast by supervisors and upheld its challenges to the other three ballots. Both Dynamic I and the union filed exceptions to the hearing officer’s report with the Board.

On December 9, 1975, while these exceptions were pending before the Board, NJM Corporation agreed to purchase substantially all of Dynamic I’s assets, including its name and goodwill. The agreement provided, with certain exceptions not relevant here, that NJM would not assume Dynamic I’s liabilities or obligations. On January 6, 1975, the sale took place, and NJM began operating as Dynamic Machine Co. (“Dynamic II”). 2

The two companies are separate and distinct commercial entities. The stockholders, directors and officers of Dynamic II held no positions with Dynamic I and had at the time of the Board proceeding no familial or financial relationships with persons connected with Dynamic I. None of the three individuals with authority to formulate Dynamic II’s labor and employment policies held or exercised such authority on behalf of Dynamic I.

At the time of the sale, Dynamic II was aware of the representation proceeding pending before the Board. After the sale, Dynamic II continued Dynamic I’s business without interruption — operating the same plant, using identical methods and essentially the same equipment to manufacture the same type of products on the same job order basis for primarily the same customers. No job classifications were changed, nor were new foremen brought in from outside the plant. Dynamic II retained all *1199 thirty Dynamic I employees in the bargaining unit.

Between the date of the representation election and the date of purchase, 17 unit employees left Dynamic I, and 12 new employees were hired. Between the date of purchase and February 7, 1975, when Dynamic II refused to recognize the union, one employee who had voted in the election left the company, another was promoted to a supervisory position, and three new employees were hired.

On January 15, 1975, after the sale, the Board issued its decision certifying the union as the exclusive bargaining representative of Dynamic I’s employees. The Board adopted the findings of the hearing officer respecting Dynamic I’s objection. It also approved the three ballot challenges upheld by the hearing officer, but reversed his denial of the union’s challenge to Harry Tietz’s ballot. Because the two remaining union ballot challenges could not affect the outcome of the election (inasmuch as the final outcome would be 19-18 in favor of the union even if both challenges were denied and the ballots were found to be cast against the union), the Board certified the union without inquiring into their validity.

On February 7, 1975, the union requested a bargaining meeting and certain information from Dynamic II. Dynamic II replied that it was not required to commence negotiations or to submit the information, both because it was a separately incorporated entity unrelated to Dynamic I and because a substantial turnover of unit employees since the representation election called the union’s majority status into question. On February 13,1975, the union filed an unfair labor practice charge against Dynamic II with the board, alleging that the company had refused to bargain with the certified bargaining representative of its employees. 3

On December 15, 1975, acting on a stipulation of facts after a waiver of intermediate proceedings before an administrative law judge, the Board issued the decision and bargaining order against Dynamic II that is before this Court.

II.

In its order, the Board found that Dynamic II was obligated to bargain with the union as a successor employer to Dynamic I because of the similarity of operation of the two firms and Dynamic II’s retention of all the unit employees. 4 Relying on cases establishing that the certification bar rule 5 is unaffected by normal turnover of unit employees, 6 the Board rejected Dynamic II’s argument that post-election employee turnover possibly affecting the union’s majority status among the unit employees should be taken into account in determining its bargaining duty as a successor employer. The Board also rejected, on the basis of N. L. R. B. v. Burns Int’l Security Services, Inc., 406 U.S. 272, 92 S.Ct. 1571, 32 L.Ed.2d 61 (1972), Dynamic IPs argument that it need not bargain with the union certified to represent Dynamic I’s *1200 employees because it purchased Dynamic I in good faith without assuming its obligations.

III.

Dynamic II first argues to this Court that the union certification was improper because the Board erroneously found that Harry Tietz was a supervisor ineligible to vote in the representation election.

The relevant facts found by the hearing officer and not disputed by the parties are as follows:

At the time of the election, Harry Tietz was the “working foreman” 7 of Dynamic I’s grinding department located in a building across the street from the main plant.

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Bluebook (online)
552 F.2d 1195, 46 A.L.R. Fed. 391, 94 L.R.R.M. (BNA) 3217, 1977 U.S. App. LEXIS 14047, Counsel Stack Legal Research, https://law.counselstack.com/opinion/dynamic-machine-co-v-national-labor-relations-board-ca7-1977.