Opinion ID: 398952
Heading Depth: 2
Heading Rank: 3

Heading: Priester's Financial Troubles.

Text: 18 Priester bore the burden of demonstrating the gravity of its economic condition. NLRB v. Acme Wire Works, Inc., 582 F.2d 153, 158 (2d Cir. 1978). It adduced no financial statements, nor any evidence of the added cost the wage increase would impose, even though it submitted that it could not withstand the burden of the increase because of dire economic circumstances. The only evidence the company presented was the testimony of its president, Lee Priester, Jr. 8 He stated that business had been slipping in recent years due to keen competition and the reluctance of bonding companies to extend security on large projects because of the advancing age of Mr. Priester and his brother, the principal owners of the company. According to his testimony, the company earned over $17,000 in 1976, but lost approximately $40,000 in 1977, the year of the negotiations, and $70,000 in 1978. These losses were accompanied by a decrease in volume of business. 19 Although Mr. Priester's testimony may establish that the company was in a depressed state, it does not suggest that it was in the throes of an immediate crisis. Because its principal figures were in their mid-seventies, the company was experiencing a gradual decline. Unlike the employer in Custom Sheet Metal and the Board's decisions, Priester was not facing a choice between withdrawal and financial ruin. Neither bankruptcy nor dissolution was imminent. In 1976, the year preceding the negotiations, Priester in fact had shown a profit. The 1977 losses were significant, but it was not established that they were realized in their entirety by the time the company withdrew in August of that year. The 1978 losses obviously did not influence Priester's decision to withdraw in 1977. The company's action logically is to be tested by considering the actual motivation of the employer seeking to withdraw from the unit, NLRB v. Custom Wood Specialties, Inc., 622 F.2d 381, 385 (8th Cir. 1980), not by examining plausible rationales constructed with the benefit of hindsight. To justify its untimely withdrawal, Priester needed to show more profound economic difficulties, and needed to make this showing through proof more specific than the oral testimony of its president. 20 Priester's conduct reveals that it did not view its circumstances as critical in 1977. It could have withdrawn from the unit unilaterally before negotiations began, or given the union notice of a need for specialized treatment, but did neither. 9 Instead, the company assumed a leading role in the negotiations. Its first complaint of financial hardship and threat of withdrawal came at the climax of negotiations, when it disapproved of a wage increase proposal made by other members of the employer association. There was no evidence of any abrupt change in financial position that might have compelled a sudden shift in the company's attitude. If it were embroiled in financial difficulties sufficient to excuse withdrawal, it would not have concealed its woes until the negotiations were nearly concluded. Furthermore, after the first unfair labor practice charge was filed against Priester, in connection with a settlement it signed a letter of assent to the new collective bargaining agreement. If its plight were genuinely severe, it could not have signed such an agreement in good faith. Such behavior suggests that Priester's withdrawal was prompted by disappointment with the outcome of the negotiations, rather than by extreme economic pressures. Clearly, dissatisfaction with proposed wage scales is not justification for withdrawal from the unit. NLRB v. Tulsa Sheet Metal, Inc., supra, 367 F.2d at 58. 21 The Board's judgment that Priester violated the Act is consistent with precedent and reasonable in view of the need to preserve the stability of multiemployer bargaining units. Central Florida Sheet Metal Contractors Ass'n v. NLRB, 664 F.2d 489, 496 (5th Cir. 1981). Its restriction of the occasions when an employer may withdraw from a unit due to financial circumstances is calculated to ensure multiemployer bargaining's continued vitality.