National Labor Relations Board v. Band-Age, Inc.

534 F.2d 1, 92 L.R.R.M. (BNA) 2001, 1976 U.S. App. LEXIS 11820
CourtCourt of Appeals for the First Circuit
DecidedApril 13, 1976
Docket75-1355
StatusPublished
Cited by43 cases

This text of 534 F.2d 1 (National Labor Relations Board v. Band-Age, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the First Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
National Labor Relations Board v. Band-Age, Inc., 534 F.2d 1, 92 L.R.R.M. (BNA) 2001, 1976 U.S. App. LEXIS 11820 (1st Cir. 1976).

Opinions

McENTEE, Circuit Judge.

This case is before us upon the application of the Board for enforcement of its order issued against Band-Age, Inc. (“BandAge”). The Board found that Band-Age was a successor to Paulis Silk Company which until its demise had long had a collective bargaining agreement with the Textile Workers Union of America, AFL-CIO (“Union”). On the basis of this finding of successorship, the Board held Band-Age in violation of § 8(a)(5) and (1) of the National Labor Relations Act for refusing to recognize and bargain with the Union. The Board’s order in pertinent part required Band-Age to recognize and bargain collectively with the Union as the exclusive bargaining representative of its employees.1

There are few broad governing principles in the area of successorship. NLRB v. Boston Needham Industrial Cleaning Co., 526 F.2d 74 (1st Cir. 1975). As the Supreme Court has recently noted, “in light of the difficulty of the successorship question . emphasis on the facts of each case as it arises is especially appropriate.” Howard Johnson Co. v. Detroit Local Joint Executive Board, Hotel and Restaurant Employees Union, 417 U.S. 249, 256, 94 S.Ct. 2236, 2240, 41 L.Ed.2d 46, 53 (1974). In the present case, the facts upon which the Board’s finding of successorship is predicated are essentially undisputed. Until December 1973, the Paulis Silk Company was engaged in manufacturing elastic bandages at its Clay Street plant in Central Falls, Rhode Island.2 The company sold its regular bandages to four customers. It also sold “seconds” to the Surgicot Company. Paulis Silk operated four departments within the plant: weaving, finishing, packaging, and shipping. In the 1960’s Paulis Silk was at the peak of its production, using approximately 80,000 square feet of floor space and employing 250 to 300 workers in 15 to 20 job classifications, who operated 150 broadloom and narrowloom machines. The company produced five types of elastic bandages. The Textile Workers Union has represented Paulis Silk employees for many years, negotiating a number of successive collective bargaining agreements.

In the early 1970’s Paulis Silk began to phase out its operations. In 1972 there were 150 to 170 employees, and during most of 1973 the plant operated with approximately 80 employees. In April 1973, the Union executed a collective bargaining agreement covering the remaining employees. This union-security contract was effective through December 31,1973, and provided for a shortened term and increased severance pay based on Paulis Silk’s representation that it would be out of business by the end of the calendar year. By the end of 1973 only 25 to 30 employees re[3]*3mained. During the latter part of that year Paulis Silk sold about 50 of its broadloom machines and supporting equipment to one of its customers, Becton-Dickinson, for use in a factory to be set up in Puerto Rico.3 In late November 1973, Surgicot hired Paulis Silk’s plant manager, John Peacock, and its controller, Robert Greco, to serve at the Clay Street facility as plant manager and administrative manager, respectively, for Band-Age which had been incorporated the previous month.4 Thereafter Band-Age executed a lease with Paulis Silk, renting for a five-year term 20,000 square feet of floor space at the Clay Street plant, 46 narrow weaving machines, and various office machinery and equipment. Band-Age also purchased Paulis Silk’s inventory, work in process, and raw materials. Peacock supervised the relocation of narrowloom machinery within the plant in preparation for Band-Age’s operations. On December 18, 1973, when Paulis Silk ceased business operations, Peacock told all the remaining employees that they should “watch the newspaper” and that Band-Age was “going to take applications for employment, and that anyone that was interested in coming back to work there would come in and fill out an application.” In the first week of January 1974, Band-Age advertised for employees in a local newspaper and started hiring.

Band-Age hired all three of Paulis Silk’s departmental supervisors, its only floorlady, and other of its employees. When BandAge began operations on January 14 its work force consisted of 37 employees, 35 of whom had been Paulis Silk employees and members of the Union. Currently, BandAge’s employees work under 7 or 8 job classifications within the same four basic departments of weaving, finishing, packaging, and shipping as Paulis Silk had maintained. Band-Age produces a narrow elastic bandage5 which it sells to Surgicot and several other customers. Plant manager Peacock testified that “[mjost of the employees ... are doing the same jobs [as at Paulis Silk].” On April 3, 1974, the Union sought recognition from Band-Age as the exclusive bargaining representative for its employees. Band-Age declined to recognize the Union, thus precipitating this action.

The central question in a successor-ship case is whether there has been “a change of ownership not affecting the essential nature of the enterprise,” Tom-A-Hawk Transit, Inc. v. NLRB, 419 F.2d 1025, 1026-27 (7th Cir. 1969); see NLRB v. DITMCO, Inc., 428 F.2d 775, 780 (8th Cir. 1970); if no essential change is found “the successor employer must recognize the incumbent union and deal with it as the bargaining representative.” Tom-A-Hawk Transit, Inc. v. NLRB, supra at 1027. In deciding this issue the Board must examine the “totality of the circumstances.” NLRB v. Boston Needham Industrial Cleaning Co., supra at 77. Our inquiry in this case is guided by the latest Supreme Court case involving a new employer’s duty to bargain, NLRB v. Burns International Security Services, 406 U.S. 272, 92 S.Ct. 1571, 32 L.Ed.2d 61 (1972). In concluding there that “where the bargaining unit remains unchanged and a majority of employees hired by the new employer are represented by a recently certified bargaining agent there is little basis for faulting the Board’s implementation of the express mandates of § 8(a)(5) and § 9(a) by ordering the employer to bargain with the incumbent union,” 406 U.S. at 281, 92 S.Ct. at 1579, 32 L.Ed.2d at 69 the Supreme Court has identified two factors of basic importance: (1) the continued appropriateness of the bargaining unit; and (2) the permissibility of assuming the continued existence of a union majority.

[4]*4We have little doubt that here the bargaining unit remained appropriate. Although the business had shrunk, the nature of the work was still the same; the same machines (albeit fewer) were used; the same plant (although less space) was worked in; the same type of product (although not the identical bandage, and not several types) was made; the same supervisors were in charge; and while there were fewer employees, most did the same work as previously, and all but two of the employees had worked for the predecessor employer. These indicia, as we read them, point to the continued existence of the unit, and indeed, a continued enterprise rather than a new one. The operations had shrunk, but the nature of the employment remained essentially the same.

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Bluebook (online)
534 F.2d 1, 92 L.R.R.M. (BNA) 2001, 1976 U.S. App. LEXIS 11820, Counsel Stack Legal Research, https://law.counselstack.com/opinion/national-labor-relations-board-v-band-age-inc-ca1-1976.