Opinion ID: 278155
Heading Depth: 1
Heading Rank: 1

Heading: Makela's Violations

Text: 10 Before the Board, Makela objected to the finding of unlawful refusal to bargain on the grounds that the corporation had entertained a good faith doubt as to the majority status of the union and that 11 Any effort made by Makela in response to any Union demand would have been purposeless since Makela had already committed itself to sell its assets and terminate its corporation existence and the employment status of its employees. 12 Here, Makela stresses the second ground. Makela's apparent abandonment of its claim of good faith doubt is understandable, for Kemppainen testified that he was aware that a majority of the employees had signed union authorization cards. Moreover, Kemppainen never informed the union of his alleged doubt, and in the absence of such communication, the claim of good faith doubt cannot be maintained. N.L.R.B. v. Crown Can Co., 138 F.2d 263 (8th Cir. 1943), cert. denied, 321 U.S. 769, 64 S.Ct. 527, 88 L.Ed. 1065 (1944). 13 Makela's second objection to the finding of an unlawful refusal to bargain raises important questions as to the effect of the decision of the Supreme Court in Textile Workers Union v. Darlington Mfg. Co., 380 U.S. 263, 85 S.Ct. 994, 13 L.Ed.2d 827 (1965). In Darlington, the Court held that when an employer closes his entire business, even if the liquidation is motivated by vindictiveness toward the union, such action is not an unfair labor practice. 380 U.S. at 273, 274, 85 S.Ct. at 1001. Makela argues that in light of its decision to exercise the right guaranteed in Darlington, there would have been nothing to bargain about and its refusal to bargain was therefore not unlawful. The Board responds that, Darlington notwithstanding, an employer is under a duty to notify his employees' representative of impending discharges resulting from a planned sale of the plant so that there might be bargaining over such issues as severance pay. The cases cited by the Board are of little help in resolving this dispute, since they either involved no sale 1 or involved a transfer in which the transferee was the alter ego of the transferor in the sense that essentially the same business operations were involved and control remained in the same individuals. 2 Here, the sale was for valuable consideration and to a corporation with stock ownership substantially different from that of the transferor. (These facts are the apparent basis for the Board's conclusion that the sale was bona fide.) It might also be observed that all but one of the cases relied upon by the Board antedate Darlington. 14 We find it unnecessary to resolve this dispute at the present time because there is substantial evidence in the record to support the finding of an 8(a) (5) violation by Makela independent of any obligation to bargain concerning the effects of the sale. While the trial examiner's decision does mention the requirement to bargain with the Union over the effect of the sale on the employees, it does not appear that he based his findings or his order on the existence of such a requirement. Kemppainen testified that the Makelas did not decide to sell their business until after the union had sought recognition. Hence, whether or not it was necessary to bargain concerning the effects of the sale, there was a refusal to bargain by Makela between the time it received the union's request and the time it decided to sell. The examiner's order supports the view that this was the basis of his finding. The order, as it relates to Makela's refusal to bargain, is phrased in hypothetical terms: 15
16
17 (c) Refusing to bargain with the labor organization representing a majority of its employees in an appropriate bargaining unit. 18 Such an order is more appropriate to a finding of refusal to bargain during the operation of a continuing business than to a finding of refusal to bargain concerning the effects of a sale. Although the refusal to bargain during the short interval prior to the decision to sell cannot be viewed as a particularly momentous unfair labor practice, it is to be observed that a hypothetical order such as this is not particularly onerous. Compare N.L.R.B. v. Aluminum Tubular Corp., 299 F.2d 595, 597-598 (2d Cir. 1962). 19 Makela objects to the finding that it violated section 8(a) (3) and (1) by refusing to rehire the 18 strikers whose employment was terminated on July 10 and by refusing to reinstate the remaining strikers on the ground that the company had committed itself to sell its assets and that this sale, rather than the strike, was the reason for rejecting the offer to return to work contained in the union letter of July 13. We hold that the finding of the Board is supported by substantial evidence. As already mentioned in our discussion of Makela's 8(a) (5) violation, serious consideration of the sale did not commence until after Kemppainen had received the letter. Hence, although the sale was no doubt the reason for the termination of the remaining Makela employees on July 22, it is difficult to regard it as the reason for Makela's rejection of the earlier offer to return to work. 20 Also with regard to these 8(a) (3) and (1) violations, Makela objects to the Board's order requiring back pay for the period of July 16 through July 26. Makela argues that the terms of sale were agreed to on July 17 and that the employees were released on July 22, so that July 17, or, in the alternative, July 22, is the proper concluding date of the back pay period. In Darlington, supra, the Supreme Court quoted with approval the following statement in N.L. R.B. v. New Madrid Mfg. Co., 215 F.2d 908, 914 (8th Cir. 1954): 21 But none of this can be taken to mean that an employer does not have the absolute right, at all times, to permanently close and go out of business    for whatever reason he may choose, whether union animosity or anything else, and without his being thereby left subject to a remedial liability under the Labor Management Relations Act for such unfair labor practices as he may have committed in the enterprise, except up to the time that such actual and permanent closing    has occurred. 22 While the facts of this case make a determination of the time of the actual and permanent closing of Makela's business rather difficult, we perceive no basis for finding that Makela's discriminatory practices persisted beyond July 22, the date upon which the employees were discharged as a result of the sale. Accordingly, the order of the Board must be modified to require back pay through July 22 rather than through July 26.