Yorke v. National Labor Relations Board

709 F.2d 1138, 113 L.R.R.M. (BNA) 3087
CourtCourt of Appeals for the Seventh Circuit
DecidedJune 1, 1983
DocketNo. 82-1334
StatusPublished
Cited by4 cases

This text of 709 F.2d 1138 (Yorke 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
Yorke v. National Labor Relations Board, 709 F.2d 1138, 113 L.R.R.M. (BNA) 3087 (7th Cir. 1983).

Opinions

TIMBERS, Circuit Judge.

Nathan Yorke, Trustee in Bankruptcy of the Seeburg Corporation (Company),1 petitions for review of an order of the National Labor Relations Board, 259 N.L.R.B. 819 (1981), finding that the Trustee violated §§ 8(a)(5) and 8(a)(1) of the National Labor Relations Act (Act), 29 U.S.C. §§ 158(a)(5), 158(a)(1) (1976), by failing to bargain over the effects of his decision to close the Company’s plant in Chicago. The Board has filed a cross-application to enforce its order.

Without giving Local 743, International Brotherhood of Teamsters (Union), prior notice or affording it a subsequent opportunity to bargain, the Trustee terminated operations and discharged the seven remaining employees who were Union members. The Board determined that a bargaining order by itself would not remedy the unfair labor practice since the plant closure had decimated the Union’s bargaining strength. Accordingly, to restore the Union’s position, the Board ordered a limited backpay remedy, requiring the Trustee to pay wages to the seven employees for a period beginning five days after the date of the Board’s decision until (1) the parties reached an agreement, or (2) the parties reached an impasse, or (3) the Union failed to request bargaining within five days after the decision, or (4) the Union failed to bargain in good faith. While the backpay requirement was conditioned on the number of days elapsing before the parties reached impasse or an agreement, the Board imposed a minimum two week backpay period to discourage artificially quick impasse.

Although we are not in complete accord with the Board’s reasoning, we conclude that substantial evidence supports the Board’s findings of violations of §§ 8(a)(5) and 8(a)(1). We enforce the Board’s remedial order with the condition specified herein.

I.

The Company, a Delaware Corporation, was engaged in the manufacture of juke boxes and other machinery at its facility in Chicago. In November 1977, it entered into a three-year collective bargaining agreement with the Union with respect to a unit of “all plant clerical, and all production and maintenance employees of the Company”. As of July 1979, Seeburg employed approximately 385 employees. Shortly thereafter, the Company experienced severe financial reversals. It began laying off employees. The Union did not challenge the propriety of the layoffs.

On November 1, 1979, the Company filed a petition for reorganization under Chapter 11 of the Bankruptcy Code, 11 U.S.C. §§ 1101-1174 (Supp.III 1979). At the time, the Company still employed 150 members of the bargaining unit. The Company as debt- or-in-possession continued its operations on a diminishing basis. It continually reduced its complement of employees, reaching a low of seven in early 1980. Because of allegations of fraud and mismanagement, the bankruptcy court appointed Nathan Yorke as Trustee in Bankruptcy for the debtor company on February 4, 1980. As Trustee, Yorke assumed full control of the Company. His duties primarily were to evaluate Seeburg’s assets and formulate a plan of reorganization which would be acceptable to all creditors. 11 U.S.C. § 1106(a) (Supp.III 1979).

Yorke first visited the plant on the day of his appointment, February 4. He found no unit employees working in the production area. Seven unit employees, however, remained on the Company payroll. The ALJ credited Yorke’s testimony that he did not know that the employees belonged to a union.

At the first creditors’ meeting on February 8, Yorke learned that the Company [1141]*1141owed its employees more than the $5000 it had in the bank and that its $6,000,000 in unliquidated assets (worth approximately $1,500,000 if liquidated) were eclipsed by overall liabilities exceeding $8,000,000. Following the meeting, Yorke decided that it was in the Company’s best interest to terminate operations completely. He immediately applied to the bankruptcy court for authorization. The court granted the application on February 11. Yorke closed the plant the next day. Yorke obtained $6000 in funds from Seeburg’s cash on hand to pay the employees for the period through February 9. He admittedly did not notify the Union of his decision to terminate operations.

By a letter dated February 15, the Union, through its attorney Edwin H. Benn, requested bargaining over the effects of the plant closure. In pertinent part, the letter read as follows:2

“Gentlemen:
The undersigned represents Local 743 I.B.T. The Union has a collective bargaining agreement covering the employees of Seeburg Corporation. As you are well aware, this agreement governs the wages, hours and working conditions of those employees.
It is apparent to the undersigned that the rights of these employees are being seriously undermined. It has come to our attention that numerous employees whom we represent are being transferred to do work for different companies within your corporate structure and that work, covered by our contract, is being performed elsewhere. It has also come to our attention that the remaining employees of See-burg Corp. have been locked out as of February 11, 1980_
... This is also to demand that an immediate meeting be set up so that we can discuss the decision and effects that your action has on our bargaining unit employees. ...
... [W]hat were the reasons that the Seeburg employees were denied the ability to come to work on February 11, 1980. Will they be transferred to other payrolls of either Choice Vend, XCor or any other companies under those companies’ control? What has happened to the Seeburg supervisory personnel? Have they been transferred to either Choice Vend, XCor or any companies under those companies’ control?
Third, are you aware of any prospective purchasers of the Seeburg Corporation? If so, please identify their names and addresses. If a sale or other disposition of the Seeburg Corporation is contemplated, please inform us what will happen to the existing facility, such as the property, fixtures, machinery, trucks, furniture, etc.? In particular, we would desire to know if there will be a sale or transfer to other companies within the XCor Corporation. If there will be an acquisition by another XCor Corporation company, we would like to know the intentions of XCor concerning future employment of the managerial, supervisory, or other nonunion employees who have been working for Seeburg. This would also include any transfer of employees to Choice Vend. Further, we would desire to know what will happen to existing accounts receivable and payable, existing lease agreements or contracts, other existing liabilities as well as good will. We would further desire to know the disposition of any existing commitments to customers or creditors. We are particularly interested in knowing what will be the disposition of work done by Seeburg employees covered by our collective bargaining agreement. Will that work be transferred to any other entity within the XCor Corporation or Choice Vend?

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Nathan Yorke v. National Labor Relations Board
709 F.2d 1138 (Seventh Circuit, 1983)

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Bluebook (online)
709 F.2d 1138, 113 L.R.R.M. (BNA) 3087, Counsel Stack Legal Research, https://law.counselstack.com/opinion/yorke-v-national-labor-relations-board-ca7-1983.