NOTICE: This
opinion is subject to formal revision before publication in the bound volumes
of NLRB decisions. Readers are requested
to notify the Executive Secretary, National Labor Relations Board, Washington, D.C. 20570, of any typographical or other formal
errors so that corrections can be included in the bound volumes.
Road & Rail Services, Inc. and Automobile Transport Chauffeurs,
Demonstrators and Helpers, Local Union No. 604, affiliated with International
Brotherhood of Teamsters and
Shopmen’s Local 518, Party to the Contract.
Cases 14–CA–27983 and 14–CA–28026
November
30, 2006
DECISION AND ORDER
By Chairman Battista and Members Schaumber
and Walsh
On March 7, 2005, Administrative Law Judge George Carson
II issued the attached decision. The
Charging Party filed exceptions and a supporting brief, the Respondent filed an
answering brief, cross-exceptions, and a motion to strike the Charging Party’s
exceptions, and the
Charging Party filed a memorandum in opposition to the Respondent’s motion.
The National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
The Board has considered the decision and the record in
light of the exceptions and briefs and has decided to affirm the judge’s
rulings, findings, and conclusions
and to adopt the recommended Order as modified.
The main issue presented here is whether the judge
properly dismissed the complaint allegations that the Respondent, a successor
employer, violated
Section 8(a)(2) and (3) of the Act by recognizing the Union and entering into a
collective-bargaining agreement with it prior to the hiring of the Respondent’s
work force and the commencement of its operations. The judge found that the Respondent was a “perfectly
clear” successor within the meaning of NLRB
v. Burns International Security
Services, 406 U.S. 272 (1972), and subsequent Board precedent. As a “perfectly clear” successor, the judge
reasoned, the Respondent did not violate Section 8(a)(2) and (3) by recognizing
and bargaining with the Union and executing a
contract memorializing the terms and conditions of employment for the unit employees. We agree.
In affirming the judge’s decision, we emphasize that the
Respondent never expressed any intention to invoke the right of an “ordinary” Burns successor to establish its own
initial terms and conditions of employment.
Instead, shortly after obtaining the contracts to perform the work in
question, the Respondent expressed its clear intention to staff the facilities
with the predecessor’s employees and to bargain with the employees’ designated
representative, thereby securing a skilled and experienced work force and
avoiding the uncertainty of attempting to recruit new employees based on
unilaterally established employment terms.
Thereafter, the Respondent did not, in fact, unilaterally set initial
terms, but instead met with the Union for the purposes of collective bargaining
and executed a contract that included the initial terms to be effective the
date the Respondent was to begin operations.
When it commenced operations, the Respondent did so with a work force of
23 employees, 20 of whom (87 percent) worked for its predecessor immediately
before the takeover. At no point during the parties’ negotiations
or these proceedings was there ever evidence of a loss of majority support for
the Union or evidence that the negotiations
were anything other than bona fide, arm’s-length dealings between the
parties. With particular emphasis on
these facts, we agree with the judge that the Respondent was a “perfectly clear”
successor within the meaning of Burns.
Facts
The Respondent cleans and prepares railroad cars used to
transport newly manufactured vehicles for the automotive industry. In March 2004,
the Respondent was awarded the contracts to perform cleaning and preparation
work at a number of Norfolk Southern Railroad facilities, including facilities
in Wentzville, Missouri; Hazelwood, Missouri; and Venice, Ohio—the only three
locations at issue.
The work at these facilities had previously been performed
by Caliber Mechanical Prepping, Inc. (Caliber).
Caliber’s cleaning and preparation employees had been represented for purposes
of collective bargaining by Shopmen’s Local 518 (the Union). At the time that the Respondent took over for
Caliber, there was a collective-bargaining agreement in effect between Caliber
and the Union that governed the employees’
terms and conditions of employment.
On April 15, the Respondent met with the Union’s
business manager, Duane Raab. During
this meeting, the Respondent orally informed Raab of its intention to staff the
Wentzville, Hazelwood, and Venice
facilities with Caliber’s existing employees.
In response, Raab requested that the Respondent recognize the Union, and the Respondent agreed to do so. Afterward, the Respondent stated that it “desired
to negotiate changed terms and conditions of employment” from those existing under
the Caliber collective-bargaining agreement.
At no time during this meeting did the Respondent announce that it was
setting new terms and conditions of employment, or give any indication that it
planned to unilaterally set new terms in the future.
On May 10, the Respondent sent a letter to the Union confirming its “intention to retain a substantial
portion of the complement of those employees you presently represent” at the
three locations. As before, the
Respondent gave no indication that it planned to unilaterally set new terms and
conditions of employment. Instead, the Respondent
acknowledged an obligation to recognize the Union
and emphasized its desire to quickly reach a mutually acceptable agreement on
terms and conditions of employment.
Thereafter, on May 19, the Respondent solicited applications from all
Caliber’s existing cleaning and preparation employees.
The Respondent and the Union
commenced bargaining on May 13. On June
14, the parties finalized their negotiations and executed a collective-bargaining
agreement that was to become effective July 10, the date the Respondent planned
to begin work at the Wentzville location.
As the judge found, the terms of the new collective-bargaining agreement
were substantially similar to those that had existed under the Caliber
agreement.
The Respondent made offers of employment to the Caliber
employees about a week before commencing operations at each of the three
facilities. The Respondent began work at
Wentzville on July 12, at Hazelwood on July 26, and at Venice on July 31. Of the 23 employees the Respondent hired to
staff the three facilities, 20 had been employed by Caliber immediately before
the Respondent commenced operations.
Discussion
In NLRB v. Burns International Security Services,
406 U.S. 272 (1972), the Supreme Court stated that although a successor “is
ordinarily free to set initial terms on which it will hire the employees of a
predecessor, there will be instances in which it is perfectly clear that the
new employer plans to retain all of the employees in the unit and in which it
will be appropriate to have him initially consult with the employees’
bargaining representative before he fixes terms.” 406 U.S. at 294. As further explicated by the Board, the “perfectly
clear” caveat, while restrictive, should apply “to circumstances in which the
new employer has either actively or, by tacit inference, misled employees into
believing they would all be retained without change in their wages, hours, or
conditions of employment, or at least to circumstances where the new employer . . . has failed to clearly announce its
intent to establish a new set of conditions prior to inviting former employees
to accept employment.” Spruce Up Corp., 209 NLRB 194, 195
(1974), enfd. mem. 529 F.2d 516 (4th Cir. 1975) (emphasis added).
The particular circumstances of the present case bring it
within the Burns “perfectly-clear”
caveat. The Respondent clearly informed
the Union of its intent to staff the three
facilities with Caliber’s existing employees, which, in fact, it did. At the same time, the Respondent gave no
indication that it intended to invoke a right to unilaterally establish initial
terms and conditions of employment.
Although the Respondent indicated a desire to make some changes to the
existing employment terms, the Respondent repeatedly made clear that it intended
to negotiate any such changes with the Union. Again, in fact, that is precisely what the
Respondent did: it did not unilaterally set any initial terms, but instead
negotiated an agreement with the Union, which
was in effect at the time employees were to report to work. Accordingly, this is not a case where the
employees’ continued employment was contingent on their acceptance of a successor’s
unilateral changes to their employment terms.
In these circumstances, we agree with the judge that the Respondent was
a perfectly clear successor and, therefore, did not violate the Act by
recognizing and bargaining with the Union
prior to hiring employees and commencing operations.
Our dissenting colleague misinterprets the Respondent’s
statements about negotiating with the Union
over any changes in the employees’ terms and conditions of employment as
equivalent to a clear statement of the Respondent’s intention to set new terms
and conditions of employment. The two
types of statements are fundamentally different. The Respondent’s statements, unlike our
colleague’s interpretation of them, contain no mention or reservation of the
right to act unilaterally—the basic right assured to Burns successors. Indeed,
the more reasonable interpretation of the Respondent’s repeated expressions of
its desire to negotiate with the Union is that
the Respondent had rejected unilateral action.
As a result, we find that the present case is distinguishable from Spruce Up, supra, where the employer “made
it clear from the outset that he intended to set his own terms.” 209 NLRB at 195.
The dissent claims that under the “analytic test” of Spruce Up “it makes no difference
whether the changes are unilateral or negotiated.” We disagree.
The Spruce Up test focuses on
gauging the probability that employees of the predecessor will accept
employment with the successor. 209 NLRB
at 195. Where, as here, a successor
commits to conducting its hiring from the predecessor’s work force and
announces that any changes to initial terms are to be made not unilaterally but
only through negotiation with the employees’ designated bargaining
representative, there is a much greater likelihood that employees will choose
to remain with the successor because they have a voice, through their
representative, in establishing the terms and conditions under which they will
work. Moreover, a successor’s decision to negotiate
changes in employment terms with the employees’ representative leaves intact
one of the employees’ most important employment “terms”—the process of collective
bargaining itself—and the “industrial peace and stability” fostered by that
process. Auciello Iron Works, Inc. v.
NLRB, 517 U.S.
781, 785–786 (1996). This atmosphere of
stability naturally enhances the probability that employees of the predecessor
will stay on with the successor. For one
thing, the employees’ existing employment terms may remain in place for some
time before any changes are made. See,
e.g., Elf Atochem North America, Inc.,
339 NLRB 796 (2003) (employer was a “perfectly clear” successor where it
announced its intention to hire the predecessor’s employees and to maintain
their employment terms while negotiating with their union). In addition, the employees will have an
opportunity, through their union, to have the successor consider their
interests and concerns before changes actually occur. These stabilizing factors, which are absent
when a successor undertakes unilateral action, tend to temper the uncertainty
occasioned by a change in ownership. In
such circumstances, there simply is less reason to assume that employees of the
predecessor will refuse to work for the successor. Indeed, 20 of the 23 employees who accepted
employment with the Respondent worked for its predecessor immediately prior to
the takeover.
Finally, the dissent’s contrary construction of the Burns caveat is inconsistent with the
very language of that case. In Burns, the Supreme Court recognized that
there will be instances “in which it will be appropriate” to have the successor
“initially consult with the employees’ bargaining representative before he
fixes terms.” 406 U.S. at 294. This language plainly contemplates situations
in which a successor will discuss with the employees’ union proposed changes in
initial terms and conditions of employment.
However, under the dissent’s interpretation of the Burns caveat, the moment the successor discusses such changes with
the union, the caveat becomes inapplicable and the successor commits an unfair
labor practice. This construction
subverts an elemental purpose of the caveat: to provide for a discussion between
a successor employer and the employees’ representative when it is the successor’s
announced plan to retain the unit employees.
Accordingly, for these reasons, we affirm the judge’s
finding that the Respondent’s conduct did not violate Section 8(a)(2) or (3) as
alleged.
ORDER
The National Labor Relations Board adopts the recommended
Order of the administrative law judge as modified below and orders that the
Respondent, Road & Rail Services, Inc., Louisville, Kentucky,
its officers, agents, successors, and assigns, shall take the action set forth
in the Order as modified.
1. Substitute the
following for paragraph 2(a).
“(a) Within 14 days after service by the Region, post at
its facilities in Wentzville and Hazelwood, Missouri, and Venice,
Illinois, copies of the attached
notice marked “Appendix.” Copies of the notice, on forms provided by
the Regional Director for Region 14, after being signed by the Respondent’s
authorized representative, shall be posted by the Respondent and maintained for
60 consecutive days in conspicuous places including all places where notices to
employees are customarily posted. Reasonable
steps shall be taken by the Respondent to ensure that the notices are not altered,
defaced, or covered by any other material. In the event that, during the pendency of
these proceedings, the Respondent has gone out of business or closed the
facilities involved in these proceedings, the Respondent shall duplicate and
mail, at its own expense, a copy of the notice to all current employees and
former employees employed by the Respondent at any time since December 7, 2004.”
2. Substitute the
attached notice for that of the administrative law judge.
Dated, Washington,
D.C. November 30, 2006
______________________________________
Peter C.
Schaumber, Member
______________________________________
Dennis P.
Walsh, Member
(seal) National
Labor Relations Board
Chairman,
Battista, dissenting in part.
Contrary to my colleagues, I find that the Respondent
violated Section 8(a)(2) and (3) by recognizing the Union
and entering into a collective-bargaining agreement with it prior to hiring any
of the predecessor employer’s employees.
The Respondent is engaged in the cleaning and preparation
of railroad cars. Prior to July 2004,
Caliber Mechanical Prepping, Inc. (Caliber) and the Union were parties to a
collective-bargaining agreement under which the Union was recognized as the
exclusive representative of all hourly Caliber employees performing railroad
cleaning and preparation work at three St. Louis area locations.
In March 2004, the
Respondent was awarded the contracts at these three facilities (Wentzville,
Hazelwood, and Venice).
The Respondent and the Union
met on April 15. During this meeting,
the Respondent informed the Union that it “inten[ded]
to staff . . . these . . . three facilities . . . with the existing employees,”
and that it desired to negotiate different terms and conditions of employment
than those in the Union-Caliber collective-bargaining agreement.
On May 10, the Respondent wrote the Union,
confirming its intentions of retaining a substantial portion of predecessor
employees and negotiating a new agreement prior to commencing operations at the
facilities. Negotiations commenced on May 13. While the Respondent and Union
were engaged in negotiations, the predecessor employees were permitted to
submit employment applications to the Respondent on May 19. On June 14, the Respondent and the Union executed a collective-bargaining agreement, set to
take effect on July 10, the date on which the Respondent was scheduled to commence
operations at the first of the three facilities.
The Respondent hired the Wentzville employees on July 12,
the Hazelwood employees on July 26, and the Venice employees on July 31. At the end of July, the Respondent’s combined
work force at the three facilities consisted of 20 of the predecessor’s employees
and 3 employees who had never worked for Caliber.
Under these facts, it is evident that the Respondent
commenced bargaining with the Union before it was clear that the Union would have majority status. At the time of the negotiations, i.e.,
beginning on May 13, it was not clear whether the Union
would be the representative. As of that
time, given the Respondent’s announced intention to change terms and conditions
of employment, it was unclear how many predecessor employees would apply. Indeed, employees were not even permitted to
apply before May 19. Thus, the
Respondent was negotiating with the Union at a time when the Union’s
majority status was not established, actually or prospectively. It is axiomatic that a nonconstruction
employer violates Section 8(a)(2) if it negotiates with a union at a time when
that union does not have majority status.
Contrary to the majority’s assertion, I recognize that,
under the “Burn’s caveat,” there can
be circumstances where a successor employer can negotiate with the predecessor
union, even before employees begin work.
Thus, if the successor employer makes clear its plans to retain the predecessor’s
employees as his work force, and does not indicate that there will be changes
in terms and conditions of employment, it may well be “perfectly clear” that
the new employer will be a successor, and it may be appropriate to negotiate
with the predecessor union, even before employees begin work.
However, where the matter is not “perfectly clear,” a different result
obtains. As the Board stated in Spruce Up, 209 NLRB 194, 195 (1975):
When an employer who has not yet
commenced operations announces new terms prior to or simultaneously with his
invitation to the previous work force to accept employment under those terms,
we do not think it can fairly be said that the new employer ‘plans to retain
all of the employees in the unit,’ as that phrase was intended by the Supreme
Court. The possibility that the old
employees may not enter into an employment relationship with the new employer
is a real one.
In the instant case, when the Respondent announced its
intention to hire the predecessor’s employees it simultaneously expressed its
intention of changing terms and conditions of employment. As noted above, on April 15, the Respondent
informed the Union that it desired to negotiate different terms and conditions
of employment than those that were in the Union’s
collective-bargaining agreement with Caliber.
There is no evidence that the predecessor’s employees would in fact go
to work for the Respondent under changed terms and conditions of employment. Thus, when the Respondent began negotiating
with the Union, it was not clear that the Union
would have majority status.
The majority acknowledges that the Respondent told the
employees that it contemplated changes in terms and conditions of
employment. However, for my colleagues,
it is significant that the Respondent said that such changes would be
negotiated. I disagree. The significance of contemplated changes is
that they render uncertain whether the predecessor employees will accept an
employment offer made by the Respondent, where the terms and conditions will
differ from those that the employees enjoyed under the predecessor. In that fundamental sense, it makes no
difference whether the changes are unilateral or negotiated.
The majority misses the central point that, under either
unilateral or negotiated changes, there is no way of knowing whether the
predecessor’s employees would in fact work for the Respondent. My colleagues speculate that employees are
more likely to accept employment by the new employer if they are told that
changes will be negotiated with their union.
There is no evidence to support this speculation. It may be that an employee is willing to
accept an adverse change in employment terms if that change has been negotiated
with the union, but it may also be that some employees are more interested in
the substantive terms offered by the new employer, as distinguished from the
manner in which these terms come about.
In short, my colleagues rely upon pure speculation.
My colleagues also say that the Respondent made it clear
that the predecessor’s terms would remain in effect pending negotiations with
the Union.
Again, this is pure speculation.
My colleagues appear to say that an employer’s plan to
offer employment to the predecessor’s employees permits that employer to
negotiate any changes with the union.
However, until those new terms are set, and the predecessor employees
accept employment under those terms, it is not perfectly clear that the Union will remain the majority representative.
Negotiations with a non-majority union are inconsistent with the right of employees
to choose or reject union representation.
Accordingly, in terms of the analytic test, it is not “perfectly clear”
that predecessor employees will be in the unit under the successor. Thus, recognition of the Union,
prior to hire, is premature.
My colleagues say that the Union
ultimately did acquire majority status, inasmuch as the predecessor’s employees
ultimately constituted a majority of the Respondent’s work force. However, my colleagues’ point misses the
mark. The issue is whether the Respondent
could lawfully negotiate with the Union before
the employees were hired and therefore before
the Union obtained majority status.
Similarly, my colleagues misstate my position. I do not say that the Respondent committed a
violation where it “expresses a desire” to negotiate changes with the Union. Rather, the
violation occurred when the Respondent actually negotiated those changes, a
time when the Union did not have majority
status.
Under these circumstances, I find that the Respondent was
not a “perfectly clear” successor. Accordingly,
I find that the Respondent violated Section 8(a)(2) by prematurely recognizing
the Union.
It also violated Section 8(a)(3) because the negotiated agreement contained
a union-security clause.
Dated, Washington,
D.C. November 30, 2006
______________________________________
Robert J.
Battista, Chairman
National Labor Relations Board
APPENDIX
Notice To Employees
Posted by Order
of the
National Labor Relations
Board
An Agency of the United States Government
The National Labor Relations Board has found that we violated
Federal labor law and has ordered us to post and obey this notice.
federal law gives you the right to
Form, join, or assist a union
Choose representatives to bargain with us on your behalf
Act together with other employees for your benefit and
protection
Choose not to engage in any of these protected activities.
We
will not threaten you with termination if you do not fulfill your
obligation to tender dues to Shopmen’s Local 518 by executing dues check-off
authorizations.
We
will not in any like or related manner interfere with, restrain, or
coerce you in the exercise of the rights guaranteed you by Section 7 of the
Act.
Road & Rail Services, Inc.
Paula B. Givens, Esq., for the General Counsel.
James N. Foster Jr., Daniel R. Begian, and Geoffrey M. Gilbert, Esqs., for the Respondent.
Mark Potashnick, Esq., for the Charging Party.
Jeffery E. Hartnett, Esq., for the Party to the Contract.
DECISION
Statement of the Case
George Carson
II, Administrative Law Judge. This case
was tried in St. Louis, Missouri, on January 10 and 11, 2005,
pursuant to a consolidated complaint that issued on November 22, 2004.
The complaint, as amended on December 20 and at the hearing, alleges threats
of discharge to employees if they did not sign dues check-off authorizations in
violation of Section 8(a)(1) of the National Labor Relations Act and the unlawful
recognition of, and maintenance of a contract with, Shopmen’s Local 518 thereby
unlawfully assisting the Union in violation of Section 8(a)(2) of the Act, and
encouraging membership in that labor organization in violation of Section
8(a)(3) of the Act. The Respondent’s answer
denies all violations of the Act. I find
that the recognition of, and maintenance of a contract with, Shopmen’s Local
518 did not violate the Act. The
Respondent did, on one occasion, threaten termination for failure to execute
dues check-off authorizations.
On the entire
record, including my observation of the demeanor of the witnesses, and after considering
the briefs filed by the General Counsel, the Charging Party, and the Respondent,
I make the following
Findings of Fact
i. jurisdiction
The
Respondent, Road & Rail Services, Inc., is a Kentucky
corporation headquartered in Louisville, Kentucky, engaged in the cleaning and preparation of
railroad cars to transport newly manufactured automobiles at various locations
including three locations in the vicinity of St. Louis, Missouri,
the only location involved in this proceeding.
The Company, in conducting its business, annually provides services
valued in excess of $50,000 directly to customers located outside the State of Kentucky. The Company admits, and I find and conclude,
that it is an employer engaged in commerce within the meaning of Section 2(2),
(6), and (7) of the Act.
The Respondent
admits, and I find and conclude, that Automobile Transport Chauffeurs,
Demonstrators and Helpers, Local Union No. 604, affiliated with International
Brotherhood of Teamsters, AFL–CIO, is a labor organization within the meaning
of Section 2(5) of the Act.
The Respondent
admits, and I find and conclude, that Shopmen’s Local 518, affiliated with
International Association of Bridge, Structural, Ornamental and Reinforcing
Iron Workers (the Union), is a labor
organization within the meaning of Section 2(5) of the Act.
ii. alleged unfair labor practices
A. The Alleged Unlawful Recognition
1. Facts
This
proceeding involves employees who work at three St. Louis area locations at which the railroad
cars that they clean and prepare for the shipment of new vehicles are
located. General Motors’ vehicles are
assembled and shipped from Wentzville, Missouri, and Ford vehicles are assembled and shipped
from Hazelwood, Missouri.
DaimlerChrysler products are assembled at Fenton,
Missouri, and transported by truck across the
Mississippi River to Venice,
Ohio, from which they are shipped
by railroad. Prior to July 2004, the
cleaning and preparation of the railroad cars at these locations was being performed
by employees of Caliber Mechanical Prepping, Inc. (Caliber). Caliber performed this work pursuant to a contract
with Norfolk Southern Railroad. Caliber
and Shopmen’s Local 518 were party to a collective-bargaining agreement recognizing
the Union as the exclusive collective-bargaining
representative of all hourly employees at the foregoing three locations that
was effective by its terms from January 14, 2002, through January 31, 2007.
On January 12,
Norfolk
Southern issued a request for proposals to perform the cleaning and preparation
work at 19 locations that it served.
Road & Rail was performing this work at 6 of the locations, and, on
March 31, obtained the contracts to perform this work at all 19 locations. Road & Rail’s Vice President Robert
Armine explained that the rebidding occurred in connection with an industrywide
change pursuant to which the contractors would be paid a flat rate for each
railroad car cleaned and prepared for loading, rather than an estimate of the
number of hours of work that needed to be performed based upon Norfolk Southern’s
estimate of the number of railcars at a particular location. Of the 19 locations at which Road & Rail
obtained the contracts, 14 were unionized.
The prebid
documents provided to Road & Rail reported that the employees were represented
by Iron Workers Local 518, actually Shopmen’s Local 518. On April 6, Attorney James N. Foster, counsel
for the Respondent, contacted Duane Raab, business manager of Shopmen’s Local
518, to confirm that it did represent the employees of Caliber and to determine
whether there was an existing collective-bargaining agreement. On April 15, Vice President Armine and
Attorney Foster met with Business Manager Raab.
Armine stated that it was Road & Rail’s “intention to staff . . .
these three facilities . . . with the existing employees.” Business Manager Raab requested that Road
& Rail recognize Shopmen’s Local 518, and Armine agreed to do so. Road & Rail informed the Union that it “desired to negotiate changed terms and
conditions of employment from those existing under the Caliber . . . collective
bargaining agreement.” Thereafter, on
May 10, Armine wrote Raab stating, in pertinent part:
Following our meeting of April 15, 2004, I am forwarding
this letter to you to confirm the fact that it is our intention to retain a
substantial portion of the complement of those employees you presently
represent at those locations we have sought contractually. As a condition of further employment,
however, we recognize that we have an obligation [to] recognize the Iron
Workers union as the exclusive collective bargaining agreement in that regard.
Obviously the sooner we can reach agreement, the sooner
copies of the agreement can be prepared and distributed to those employees in
advance of our assumption of operation date which is tentatively set for early
July 2004.
Raab responded
by letter dated May 11:
I received
your correspondence dated May 10, 2004. I am available over the next several
weeks on Thursday, May 13th and
May 20th to meet and begin negotiations in regard
to an agreement concerning those employees whom you intend to retain as well as
those which you intend to hire at locations in St. Louis where the Iron Workers presently
have a collective bargaining agreement.
We appreciate this good faith effort on your part and also appreciate
the effort on your part to reach an agreement in an expeditious manner to
ensure the rights of those employees we represent. If you have any questions please do not
hesitate to call me as well.
Armine and
Foster met again with Raab on May 13 for 2 or 3 hours. Road & Rail presented Raab with a contract
that the company had typically used, and Raab presented the Shopmen’s
contract. Thereafter, Attorney Foster
and Raab met “for purposes of collective bargaining” on June 9, 11, and
14. On June 14, Road & Rail and the Union executed a collective-bargaining agreement
effective July 10, the date that Road and Rail was to begin work at the
Wentzville location. The basic terms of
employment were not changed. The hourly
wage for “preppers” remained at $9.55 per hour and the employee contribution
for health insurance remained the same, 20 percent. The record does not establish whether the
total premiums for the coverage provided by Road & Rail differed from the
costs under Caliber. Caliber gave four
holidays, Thanksgiving, Christmas Eve, Christmas Day, and New Years Day plus 7
personal days, a total of 11. Road &
Rail gave 7 holidays but no personal days.
Although the brief of the Charging Party lists drug testing and the
requirement that employees have a driver’s license as a change in conditions of
employment, section 24.2 of the contract between Caliber and Shopmen’s Local
518 establishes that Caliber employees were subject to drug testing and employee
Edward Morton testified that employees had “to be able to drive.”
David Lawshe, area
manager for Road & Rail, coordinated the hiring of employees. All Caliber
employees were given the opportunity to submit applications on May 19, and, of
the 43 individuals employed by Caliber, 38 did so. Actual offers of employment were not made
until about a week before Road & Rail assumed the operations at the
separate St. Louis
area locations. Wentzville employees
were hired on July 12, Hazelwood employees began on July 26, and Venice employees began on
July 31. The employees were not advised
of the terms and conditions of their future employment when they submitted
applications. They were informed that
Road & Rail would require them to take a drug test and would perform a background
check. When employee Darrell Essex
filled out his application he asked the Road & Rail representative “about
benefits and insurance, . . . vacation and stuff like that.” The representative replied that “he didn’t
know.” Essex
asked whether Road & Rail would “hire back all employees from Caliber” and
was told that, although there was no guarantee, “we would get first
consideration at the job before they put an ad in the paper, . . . that, in
order to get the job, we would have to pass . . . a background test and a drug
screen.” No advertisements for these
positions were ever placed.
Vice President
Armine explained that the background check was a motor vehicle record check to
assure that all applicants correctly reported any violations and to assure that
all had a valid driver’s license.
Employee Edward Morton confirmed that possession of a valid driver’s license
was a job requirement with Caliber, “we have to be able to drive,” and that the
employees at Hazelwood, where he worked, were specifically told that that they
needed to take care of any problem with a “suspended license or anything like
that.” Section 24.2 of the contract
between the Union and Caliber provided that
Caliber had the right to “formulate and enforce programs consistent with the ‘Drug
Free Workplace Act’” and would require preemployment drug tests. Armine testified that Road & Rail had the
same preemployment requirements at all its locations, that “Caliber’s . . .
hiring policies . . . were very similar to ours,” and that he, therefore, “had
a high degree of confidence” that the Caliber employees would meet the
foregoing prerequisites for employment. Road
& Rail followed the same procedure that it followed in St.
Louis at the other locations where it obtained the Norfolk
Southern contract, including locations where employees were represented, one of
which was at Wayne, Michigan, where the employees are
represented by a Teamsters local.
Area Manager
Lawshe admitted that some Caliber employees were found not to be qualified for
employment with Road & Rail.
Employee Darrell Essex asked Supervisor Parnell Walker why four individuals
whom he named had not been hired, and Walker
told him that two had failed the drug test and the two others had invalid
driver’s licenses. Essex testified that Walker said that he received his information from
Supervisor Bob Murphy, but Murphy denied knowing the reason for rejection or
giving such information to Walker. Walker
did not testify. Whether true or not, I
credit Essex that he was told that the four
employees had failed.
Vice President
Armine explained that Road & Rail planned to reduce staffing at the Norfolk Southern facilities that it had previously served
as well as at the ones it had obtained and that this was dictated by pricing because
Norfolk
Southern would be paying only for cars cleaned rather than for estimated hours
on the basis of projected volume.
Caliber had operated with 45 employees.
Road & Rail staffed the locations with 23 employees. Two Caliber employees, Parnell Walker at Hazelwood
and Kenneth Tourville at Venice,
were hired as supervisors by Road & Rail.
At Wentzville, instead of the 19 employees working for Caliber, Road
& Rail hired 12, 11 of whom had been working for Caliber. At Hazelwood, instead of 21 employees, 8 were
hired, 6 of whom had been working for Caliber, plus Walker who had been an
employee but was hired as a supervisor.
Of the two employees hired at Hazelwood who were not working for
Caliber, one had worked for Caliber in the past. At Venice,
instead of the five employees working for Caliber, three employees were hired,
all of whom had been working for Caliber, plus Tourville who had been an
employee but was hired as a supervisor.
As the above totals reflect, 20 of the 23 employees hired by Road &
Rail, plus two new supervisors, had been working for Caliber immediately prior
to Road & Rail commencing operations.
On July 12,
the day Road & Rail hired employees at Wentzville, Area Manager Lawshe
informed the employees that they continued to be represented by Shopmen’s Local
518, that “they were still in the same union that they had [been] with Caliber.” Employees signed a receipt for the associate handbook
that they received. The receipt
acknowledges that the employee understands that “the terms and conditions of my
employment are as set forth in the collective bargaining agreement between the
company and the union” and that the handbook does not alter those terms “unless
specifically set forth.” Lawshe recalled
that, on July 12, former employee Larry Vincent complained that “their
representative wasn’t answering their calls.”
Lawshe suggested that the employees go to the next union meeting.
Vincent did not state that the Wentzville employees did not want to be represented
by Shopmen’s Local 518.
Vincent
testified that, as early as May, employees at Wentzville expressed
dissatisfaction with the representation that they were receiving from the Union, but he did not state the basis for their
dissatisfaction. Vincent recalled that,
after he was hired by Road & Rail, Supervisor Steve Mills advised employees
that they needed to elect a shop steward. In a pretrial affidavit, Vincent
stated that this occurred on July 13 and that, on that date, the employees “deliberated
and decided they wanted to vote Local 518 out.”
He admitted that there was no communication with any supervisor or
manager regarding any employee dissatisfaction.
On July 21,
Vincent attended a Shopmen’s Local 518 meeting and, at that meeting, informed
Local 518 President Mark McGilvray that “we were dissatisfied with their
representation and that we had vote[d] them out.” There is no evidence of a formal vote. Regardless of when the dissatisfaction with
Shopmen’s Local 518 among the Wentzville employees was first expressed, there
is no evidence that it was expressed to the Union
prior to July 21. There is no evidence
that a desire not to be represented by Shopmen’s Local 518 or any reference to
a vote by the Wentzville employees was ever communicated to the Respondent.
Employee Vincent had no contact with the Teamsters Union until August 11 or 12.
Employees
Edward Morton and Darnell Essex, notwithstanding contradictory recollection of
the dates, place themselves together in two conversations among second-shift
employees at Hazelwood while Parnell Walker was present in the same 30-by-20
foot room doing paperwork. The employees
discussed dissatisfaction with Shopmen’s Local 518. The same five or six employees, including
Morton and Essex, were involved in both conversations, the first of which
occurred prior to Walker
being hired as a supervisor by Road & Rail on June 28. Walker went to
training in Kentucky
and returned on July 3. During the week
of July 5–8, when Hazelwood was still being operated by Caliber, Walker worked at Wentzville
as a supervisor on first shift and then worked for Caliber as an employee for
29 hours. The second conversation
occurred after Walker
returned from training and would have occurred between July 5 and 8. After the second conversation, Essex spoke
alone with Walker,
stating that the employees did not want to be represented by Shopmen’s Local
518. Walker
replied that Essex needed to get in touch with Shopmen Business Agent Raab
before the St. Louis
area employees “missed out on better pay, benefits, [the cleaning of] uniforms
. . . things like that that they had at other facilities.” Essex made no effort
to contact the Union. Morton testified that he also spoke
separately to Walker. When initially asked what he told him, Morton
answered, “Just that none of us wanted the Union.” I do not credit his later embellishment of
this testimony.
Essex recalled
that Walker was
at the same table as the employees when the first conversation occurred. I find that he was mistaken in this
regard. The fact that both he and Morton
spoke directly to Walker establishes that neither was certain that Walker
either overheard the conversations among the second-shift employees or understood
any comments to mean that the employees did not want to be represented by the
Union rather than that they disagreed with some union action or inaction. Walker
did not testify. I find that Essex and
Morton did tell Walker that the employees did
not want to be represented by the Union. There is no probative evidence that their comments
related to any employees other than the five or six second-shift employees at
Hazelwood.
After being
hired by Road & Rail on July 26, Essex
called Teamsters Local 604 on July 27.
After speaking with a Teamsters’ representative, Essex began soliciting
authorization cards on behalf of that Union on
August 2. Teamsters Local 604 filed a
petition for an election in a unit consisting of 10 employees, presumably the
Hazelwood location, on August 11. A
separate petition for the Wentzville location was filed on August 16. When Local 604 learned that the petitions
were being dismissed because of Road & Rail’s collective-bargaining
agreement with Shopmen’s Local 518, the Teamsters representative advised Essex of this fact.
Essex contacted President McGilvray on August
23, who confirmed that there was a contract.
McGilvray testified that he provided a copy of it from his file to Essex. Essex
acknowledges receipt of the contract but testified that it was not immediately
provided because it had been sent to Washington
D.C. for approval by the
International Union. Counsel for the
Charging Party questioned President McGilvray regarding the requirement of
approval by the International Union as reflected on 4 pages of its constitution
and by-laws. The Charging Party’s brief does not mention
this matter presumably because the Charging Party is aware that the Board holds
that approval by an international union “as to form” is “merely a perfunctory
or ministerial act” and that “an otherwise valid agreement will be binding on
the parties regardless of whether the approval is actually secured.” Buschman
Co., 334 NLRB 441, 443 (2001).
2. Analysis and concluding findings
The complaint
alleges that the Respondent granted recognition to, and maintained a contract
with the Union “even though Shopmen’s Local 518 did not represent a majority of
the Unit” and “even though Respondent had yet to employ any Unit employees or
commence normal business operations” thereby assisting the Union in violation
of Section 8(a)(2) of the Act and encouraging membership in the Union in
violation of Section 8(a)(3) of the Act.
There is no
evidence that the Union did not represent a majority
of the unit employees at any time. Prior
to Road & Rail’s commencement of operations, all hourly employees of
Caliber at the three St. Louis area locations
were represented by the Union pursuant to a
contract that contained a valid union security provision. Road & Rail hired its entire employee
complement prior to August 1. The only
evidence of disaffection of any employees with Shopmen’s Local 518 prior to
their employment by the Respondent is the statements by employees Essex and
Morton during the last week that they worked for Caliber at the Hazelwood
location. Essex and Morton, who had been
conversing with the three or four other second-shift employees, informed
Parnell Walker, who was still working on second shift for Caliber at Hazelwood,
that the employees did not want to be represented by Shopmen’s Local 518. Accepting that statement as an expression of
disaffection rather than dissatisfaction, it related to a maximum of six
employees out of Caliber’s total complement of 21 employees at Hazelwood. No employee had contacted Teamsters Local
604. At Wentzville, where the Respondent
hired 11 employees on July 12, employee Vincent, after being hired, informed
Area Manager Lawshe that “their representative wasn’t answering their calls.” Vincent acknowledged that he made no
statement to any manager or supervisor of the Respondent regarding a desire not
to be represented by Shopmen’s Local 512.
Expressions of dissatisfaction with the actions of a collective-bargaining
representative do not establish disaffection.
Torch Operating Co.,
322 NLRB 939, 943 (1997).
The merit of
the complaint allegation relating to recognition of the Union prior to
commencement of operations is dependent upon the status of the Respondent as a “perfectly
clear” successor under the principles enunciated in NLRB v. Burns International Security Service, 406 U.S. 272 (1972),
and subsequent Board precedent. The first issue to be determined is whether the
new employer is, in fact, a successor.
Although the parties did not stipulate that the Respondent was a
successor to Caliber, they did stipulate, and the record establishes, that the
Respondent employed more than 90 percent of Caliber’s employees, that those employees
perform the same jobs, using the same tools and equipment, in the same working
conditions, and are subject to similar supervision as when they were employed
by Caliber. The parties further
stipulated that the Respondent performed services substantially similar to
those provided by Caliber to Norfolk
Southern, the same entity for which Caliber had performed the services. I find a “substantial continuity” of operations. Fall River Dyeing
& Finishing Corp. v. NLRB, 482 U.S. 27 (1987). The Respondent is a successor to Caliber.
The Supreme
Court, in NLRB v. Burns International Security
Service, supra, held that, although a successor “is ordinarily free to set
initial terms on which it will hire the employees of a predecessor, there will
be instances in which it is perfectly
clear that the new employer plans to retain all of the employees in the
unit and in which it will be appropriate to have him initially consult with the
employees’ bargaining representative before he fixes terms.” Id.
at 294. [Emphasis added.] The Board, applying Burns, holds that a successor’s obligation to bargain commences
when the successor announces its intention to retain the existing employees. In C.M.E.,
Inc., 225 NLRB 514 (1976), the Board modified the finding of the
administrative law judge who found that the successor’s obligation to bargain attached
when the union requested recognition. The
Board, citing Burns, held that the “obligation
to bargain, including the setting or altering of initial terms of employment”
commences on the date that the successor “made it ‘perfectly clear’ that it
planned to retain all or substantially all of the employees.” This principle has been applied in multiple cases
including Helnick Corp., 301 NLRB 128
fn. 1 (1991), in which the Board affirmed the administrative law judge’s
finding that the bargaining obligation attached on April 1 when the successor “informed
employees that they could expect to be retained,” and New Breed Leasing Corp., 317 NLRB 1011 (1995), where the new employer
failed to hire current employees in order to avoid a bargaining obligation and,
but for that action, the respondent “would have hired” the predecessor’s work force
and it was, therefore “obligated . . . before it hired . . . to recognize and
bargain with the Unions representing the employees in the two bargaining units . . . .” Id.
at 1025.
C.M.E., Inc., 225 NLRB 514 (1976), was decided after
the Board’s decision in Spruce Up Corp.,
209 NLRB 194 (1974), enfd. on other grounds 529 F.2d 518 (4th Cir. 1975). In Spruce
Up, a divided Board, applying Burns,
held that it was not “perfectly clear” that the work force would be retained
when, on February 6, 1970, the new employer, although stating that “all the
barbers who are working will work,” contemporaneously refused to recognize the
Union and “told the union representatives what he planned to pay the barbers,”
a lower commission rate than they were currently receiving. Ibid. Members Fanning and Penello, in separate
minority opinions, found that “all the barbers . . . will work” meant exactly
that and, having expressed the intent to hire all of the barbers on February 6,
the bargaining obligation, consistent with Burns,
began on February 6. Chairman Miller and
Member Jenkins characterized the “all the barbers . . . will work” statement as
expressing only “a general willingness to hire” that was not within the “perfectly
clear” caveat in Burns, and that the
statement of the new employer “did not operate to forfeit his right to set
initial terms.” Id. at 195. Member Kennedy, who concurred with Chairman
Miller and Member Jenkins in this aspect of the decision but otherwise
dissented and found no bargaining obligation, found that the statement of a
general willingness to hire was not controlling because the new employer “made
clear to the union representatives on February 6 and to the Spruce Up barbers .
. . that he would continue with the old work force only if they accepted the
new commission rates which he proposed to them.” Id.
at 203 and fn. 11. Member Penello
commented that the disregard of the “all the barbers . . . will work” statement
by the majority constituted “a strained legal psychoanalysis, [by which] they
contend that, despite the plain meaning of his words, Fowler [the new employer]
did not really intend to retain the barbers.” Id.
at 207. Chairman Miller and Member
Jenkins found that the new employer had no bargaining obligation until the
employees accepted the new terms and constituted a majority of the new employer’s
work force. The February 6 inception of
the bargaining obligation found by Members Fanning and Penello was a continuing
obligation. Therefore, a majority of
four Board members concurred that the new employer was obligated to bargain,
but the earliest date upon which they agreed the obligation attached was in
April when employees of the former employer constituted a majority of the unit.
In this case
the Respondent, with no equivocation, announced its intention to staff the
three St. Louis locations with employees
represented by the Union. On April 15, Vice President Armine stated to
the Union that it was Road & Rail’s “intention to staff . . . these three
facilities . . . with the existing employees,” and, in response to the Union’s
request, agreed to recognize the Union. The plan to operate with fewer employees has
no effect upon the Respondent’s bargaining obligation. Shortly after the Burns decision, the Board held that the “plans
to retain all the employees in the unit” language in Burns would cover not only the situation where the successor’s plan
includes “every employee in the unit, but also situations where it includes a
lesser number but still enough to make it evident that the union’s majority
status will continue.” Spitzer Akron, Inc., 219 NLRB 20, 22
(1975), enfd. 540 F.2d 841 (6th Cir.
1976), cert. denied 429 U.S.
1040 (1977). The Board reaffirmed the
foregoing principle in Galloway School
Lines, 321 NLRB 1422 (1996), in which it pointed out that the critical
inquiry was whether “the union’s majority status will continue.” Although the new employer plans “to employ a
smaller workforce,” the employer is required to bargain when it is “apparent
from the new employer’s hiring plan that the union’s majority status will
continue.” Id. at 1427. The Respondent’s undisputed intention to staff
the St. Louis
facilities from the cadre of existing employees, albeit with a smaller number
than had been employed by Caliber, established its obligation to bargain.
Unlike the
situation in Spruce Up, Road &
Rail expressed more than a general willingness to hire existing employees. Vice
President Armine stated Road & Rail’s “intention to staff . . . these three facilities . . . with the
existing employees,” and, consistent with Burns,
C.M.E., Inc., and Galloway School Lines, consulted with
the Union and negotiated the initial terms and conditions of employment of the
employees. Pursuant to the foregoing
precedent, the Respondent would have violated Section 8(a)(5) of the Act if it
had not consulted with the employees’ collective-bargaining representative regarding
their terms and conditions of employment. Upon reaching agreement, the parties signed a
contract reflecting the terms and conditions of employment, effective on the
date that the Respondent was to begin operations.
The General
Counsel and Charging Party argue that the obligation to bargain did not occur
until the employees were actually hired, noting Road & Rail’s required drug
tests and motor vehicle record checks. They
cite the testimony of Lawshe, who, upon cross-examination, agreed with the
General Counsel that, as a matter of logic, until they were actually hired, it
was not certain that former employees of Caliber would constitute a majority of
Road & Rail’s work force. As a
matter of logic, it is not absolutely certain that any event, whether it be the
sun rising tomorrow or airline flight 643 arriving safely at its destination,
will occur until it has occurred. The
requirement of precedent is that it be “perfectly clear” that the new employer
intends to hire a majority of the former employer’s work force. It was, as Lawshe testified, the Respondent’s
intention to hire its workforce, albeit a smaller work force than that of
Caliber, from the “most qualified” employees of Caliber. The preemployment screening imposed no requirements
that any Caliber employee would not be expected to meet. Employee Morton confirmed that, as Caliber
employees, “we had to be able to drive.” Caliber employees were subject to
preemployment drug testing pursuant to Section 24.2 of the contract between
Caliber and the Union. Vice President Armine was familiar with Caliber’s
employment practices and “had a high degree of confidence” that the Caliber
employees would be qualified. His
confidence was confirmed by the Respondent’s hire of two Caliber employees as
supervisors and the hire of 20 Caliber employees, more than 90 percent of its
work force of 23.
Under the
theory of the General Counsel and the Charging Party, the Respondent should
have refused to bargain and assumed that the Region would dismiss any 8(a)(5)
charge filed by Shopmen’s Local 518 because the Respondent was screening
employees with regard to its minimal job-related preconditions to employment,
i.e., senses and reflexes undisturbed by the ingestion of drugs and truthful
reports of traffic violations. I find
that the foregoing is an assumption that the Respondent was not required to
make. Under the General Counsel’s
theory, the Respondent should have trusted that the Region would credit a claim
by the Respondent that it could not be certain that its stated intention to
hire from the current work force would be realized because an insufficient
number of Caliber employees, all of whom were required to have a valid drivers
license and were subject to section 24.2 of their Union’s contract with Caliber
adopting the Drug Free Workplace Act, might not meet those requirements so as
to constitute a majority of the Respondent’s work force. I reject that theory. I find that the Respondent had no reason to
suspect or believe that an insufficient number of Caliber employees would
qualify for employment so as to constitute a majority of its work force.
The Charging
Party, citing multiple cases, argues that the Respondent had no obligation to
bargain until it actually hired a majority of the predecessor’s employees. I disagree. The cases cited, including A to Z Maintenance Corp., 309 NLRB 672
(1992), which the Charging Party
discusses, are all factually distinguishable. In A to
Z Maintenance, the new employer was “to hire not only from those prospects
suggested by [the union] . . . but from other sources.” Id at 673. The prematurely recognized union did not
represent a majority of the unit employees and there was a “significant
difference” between the former unit and the unit to which the employer granted
premature recognition. Id at 674. There was “no successorship bargaining
obligation under Burns.” Id at 675. The Charging Party does not cite or address
Board precedent as stated in C.M.E., Inc.,
supra, and Galloway School Lines,
supra.
The General
Counsel, citing Marriott Management Services,
318 NLRB 144 (1995), argues that Road & Rail is precluded from being a “perfectly
clear” successor because it “announced to Shopmen’s [Local 518] and therefore
to employees, its intent to establish a new set of conditions of employment
before offering a single employee a job.” In Marriott
Management, the Board acknowledged that communications with an incumbent
union are “regarded . . . as communications with the employees through their
representative.’” Id. at fn. 1. See also Elf
Atochem North America, Inc., 339 NLRB 796 fn. 3 (2003). In Marriott,
the new employer announced that the health and welfare and pension plan in the incumbent
union’s contract were unacceptable, thus effectively stating its intention to
establish its own terms and conditions of employment. Id.
at 144, 148. In the instant case, the
parties stipulated that, on April 15, the Respondent “notified Shopmen’s Local
518 that it would hire a majority of Caliber . . . employees, that it would
recognize Shopmen’s Local 518, and that it desired
to negotiate changed terms and conditions of employment. . . .” [Emphasis added.] Significantly, the Respondent did not announce
that it was going to unilaterally establish any term or condition of employment
or state that any specific provision of the current contract was unacceptable. It stated that it “desired to negotiate.” It did so. In doing so, the Respondent abided
by existing precedent that makes it imperative that the Respondent bargain with
the incumbent collective-bargaining representative “prior to the new employer’s extension of formal offers of
employment to the predecessor’s employees.” Canteen
Co., 317 NLRB 1052, 1053 (1995).
The General
Counsel, cites MV Transportation, 337
NLRB 770 (2002), in which the Board overruled its decision in St. Elizabeth Manor, Inc., 329 NLRB 341
(1999), which provided for an insulated period following successorship, and returned
to the “doctrine that an incumbent union in a successorship situation is
entitled only to . . . a rebuttable presumption of continuing majority status.”
The Board, St. Elizabeth Manor, specifically noted that its discussion related
to situations involving “an ordinary successor—i.e., one that does not make it ‘perfectly
clear’ that it intends to retain its predecessor’s employee. . . .” Id.
at 343 fn. 6. MV Transportation does not mention the Burns “perfectly clear” exception. The General Counsel, although implicitly
acknowledging that there is no probative evidence of significant disaffection
among the unit employees, refers to “seeds of discontent” that “may have matured.”
There is no objective evidence rebutting
the Union’s majority status. There is no evidence that the Respondent was
aware that any more than the six employees on second shift at Hazelwood did not
desire to be represented by the Union at any
time prior to August 2 when the first authorization card for Teamsters Local
604 was signed. The filing of the
representation petitions by Teamsters Local 604 in August did not rebut the Union’s majority status. Marion Memorial
Hospital, 335 NLRB
1016, 1018 (2001). MV Transportation is inapplicable in this “perfectly clear”
successor case.
No party has
cited, nor have I found, any case in which an 8(a)(2) violation has been
litigated where the Respondent announced its plan to staff its work force with
current employees, did not announce that it was setting initial terms and conditions
of employment, and consulted with the employees’ collective-bargaining
representative and negotiated regarding the changes it sought to institute that
differed from the current contract. Board
precedent establishes that the Respondent would, in these circumstances, have
violated Section 8(a)(5) of the Act if it had not consulted with the employees’
collective-bargaining representative. The Respondent, having announced its hiring
plan, bargained with the employees’ collective-bargaining representative and
the parties agreed to certain changed conditions of employment, including a
reduced number of paid days off and, presumably although not specifically
stated, a change in the identity of the insurance carrier, as well as various
changes of wording in the contract. They
memorialized their agreement in a collective-bargaining agreement to be
effective upon the date that the Respondent assumed operations. There was no
unlawful premature recognit