National Labor Relations Board v. Armato Brief for the National Labor Relations Board

    N o

In the United States Court of Appeals 
for the Seventh Circuit

N a tio n a l  L abor R elatio n s  B oard, petitioner

v.
A lbert A r m ato  an d  W ire & S h e et  M eta l  S pecialty

CO., RESPONDENTS

ON PETITION FOR ENFORCEMENT OF AN ORDER OF THE 
NATIONAL LABOR RELATIONS BOARD

BRIEF FOR THE NATIONAL LABOR RELATIONS BOARD

GEORGE J. BOTT,
General Counsel, 

DAVID P. FINDDING,
Associate General Counsel,

A. NORMAN SOMERS,
Assistant General Counsel, 

DOMINICK L. MANODI,
t h o m a s  j . M cDe r m o t t ,

Attorneys,
National Labor Relations Board.



I N D E X

Page
Statement of the case_______________________________________________ 1

I. The Board’s findings of fact______________________________  2
1. Certification of the Union__________________________  3
2. Respondents take over and continue the business

of Krantz_______________________________________  4
3. Respondents refuse to recognize and bargain with

the Union________________________________________  6
II. The Board’s conclusions__________________________________ 7

III. The Board’s order________________________________________  8
The contested issue___________________________________  9
Propositions of law relied on_________________________  9

Argument___________________________________________________________  10
The Board properly found that respondent were successors to 

Krantz and, therefore, their refusal to recognize or bargain 
with the certified Union as their employees’ representative was
violative of Section 8 (a) (5) and (1) of the Act____________  10

Respondents’ other contentions_________________________________  . 18
Conclusion__________________________________________________________  22

Cases. AUTHORITIES CITED
Bethlehem Steel Co. v. N. L. R. B., 120 F. 2d 641 (C. A. D. C .)_____10,13
Franks Bros Co. v. N. L. R. B., 321 U. S. 702____________________  9,12
Great Southern Trucking Co. v. N. L. R. B., 139 F. 2d 984 (C. A. 4),

certiorari denied 322 U. S. 729________________________________  18
Klamath Pine Co., 56 N. L. R. B. 587___________________________  18
LeTourneau v. N. L. R. B., 150 F. 2d 1012 (C. A. 5 )_____________  13
Herman Lowestein, Inc., 75 N. L. R. B. 377______________________  18
Medo Photo Supply Corp. v. N. L. R. B„ 321 U. S. 678____________  11
Motor Valve & Mfg. Co. v. N. L. R. B., 149 F. 2d 247 (C. A. 6 )____12,18
N. L. R. B. v. Adel Clay Products Co., 134 F. 2d 342 (C. A. 8 )____10,13
N. L. R. B. v. Appalachian Electric Power Co., 140 F. 2d 217

(C. A. 4 ) -------------------------------------------------------------------------------  9>12
N. L. R. B. v. Arnold Motor Co., 173 F. 2d 597 (C. A. 7 )__________  12
N. L. R. B. v. W. C. Bachelder, 125 F. 2d 387 (C. A. 7 )___________  21
N. L. R. B. v. Baldwin Locomotive Works, 128 F. 2d 39 (O. A. 3 )_ . 10,13
N. L. R. B. v. Blair Quarries, Inc., 152 F. 2d 25 (C. A. 4 )____9,13,14,16
N. L. R. B. v. Borchert, d/b/a West Fork Cut Glass Co., 188 F.

2d 474 (C. A. 4 ), enforcing 90 N. L. R. B. 944_________________ 9,12
N. L. R. B. v. Calumet Steel Co., 121 F. 2d 366 (C. A. 7 )________ 12,18
N. L. R. B. v. Century Oxford Mfg. Corp., 140 F. 2d 541 (C. A. 2 ),

certiorari denied 323 U. S. 714________________________________  12

222885—52----- 1 1



Cases— Continued Paee
N. L. R. B. v. Colten, 105 F. 2d 179 (C. A. 6 )_________________9,13,16
N. L. R. B. v. Crompton-Highland Mills, Inc., 337 U. S. 217__  11
N. L. R. B. v. Don Juan, Inc., 178 F. 2d 625 (C. A. 2 )_________ 21
N. L. R. B. v. Eva-Ray Dress Mfg. Co., 191 F. 2d 850 (C. A. 5 ),

enforcing 88 N. L. R. B. 361___________________________________  9,14
N. L. R. B. v. Federal Engineering Co., Inc., 153 F. 2d 233 (C. A. 6) _ 21
N. L. R. B. v. Qatke Corp., 162 F. 2d 252 (C. A. 7 )____________ 9,11,12
N. L. R. B. v. Geraldine Novelty Co., Inc., 173 F. 2d 14 (C. A. 2 )____9,12
N. L. R. B. v. Hill Stores, Inc., 140 F. 2d 924 (C. A. 5 )________ 12,18
N. L. R. B. v. Hoppes Mfg. Co., 170 F. 2d 962 (C. A. 6 )______  9,14
N. L. R. B. v. Hopwood Retinning Co., Inc., 104 F. 2d 302 (C. A. 2)_ 10,13 
N. L. R. B. v. National Garment Co., 166 F. 2d 233 (C. A. 8 ), certi­

orari denied, 334 U. S. 845_________________________________10,13,21
N. L. R. B. v. O’Keef & Merritt Mfg. Co., 178 F. 2d 2d 445 (C. A. 9) _ 10,13
N. L. R. B. v. Stowe Spinning Co., 336 U. S 226________________  21
N. L. R. B. v. Weirton Steel Co., 135 F. 2d 494 ( C. A. 3 )________ 10,13, 21
N. L. R. B. v. Weissman Co., 170 F. 2d 952 (C. A. 6 ), certiorari

denied 336 U. S. 972__________________________________________ 10,13
N. L. R. B. v. Worcester Woolen Mills Corp., 170 F. 2d 12 (C. A. 1),

certiorari denied 336 U. S. 903------------------------------------------------ 9,12
Northwest Glove Co., Inc., 74 N. L. R. B. 1697________________ 9,14,17
Polish National Alliance v. N. L. R. It., 136 F. 2d 175 (C. A. 7),

affirmed 322 U. S. 643_______________________________________  20
Regal Knitwear Company v. N. L. R. B., 324 U. S. 9____________  21
Simons Engineering Co,, 65 N. L. R. B. 1373____________________ 9,14
Southport Petroleum Co. v. N. L. R. B., 315 U. S. 100____________  21
Stonewall Cotton Mills, 80 N. L. R. B. 325_____________ :------------  9,14
Superior Engraving Co. v. N. L. R. B., 183 F. 2d 783 (C. A. 7),

certiorari denied 340 U. S. 930___________________________ 11,12,17
Synchro Machine Co., 62 N. L. R. B. 985_________________________  17
Union Drawn Steel Co. v. N. L. R. B., 109 F. 2d 587 (C. A. 3 )___ ; 10,13

Statutes:
National Labor Relations Act, as amended (61 Stat. 136, 29

U. S. C., Supp. V, Sec. 151 et seq.)___________________________  1
Section 8 (a) (1 )_________________________________________  2,10
Section 8 (a) (5 )__________________________________________  2,10
Section 10__________________________________________________  2
Section 10 (e ) ----------------------------------------- ----------------------------  1

Miscellaneous:
Dictionary of Occupational Terms, U. S. E. S., 1949, pp. 765

and 1506____________________________ ________ ____________ 19
N. L. R. B., Fifteenth Annual Report (Gov’t. Printing Off.,

1950), p. 54__________________.,_______________ '___________  19

n



In the United States Court of Appeals 
for the Seventh Circuit

No.

N a tio n a l  L abor R elations  B oard, petitioner

v.
A lbert A rm ato  an d  W ire &  S h e e t  Me t a l  S pecialty  

Co., RESPONDENTS

ON PETITION FOR ENFORCEMENT OF AN ORDER OF THE 
NATIONAL LABOR RELATIONS BOARD

BRIEF FOR THE NATIONAL LABOR RELATIONS BOARD

STATEMENT OE THE CASE

This case is before the Court upon the petition 
(B. A. 1, 2 )* 1 o f the National Labor Relations Board 
pursuant to Section 10 (e) o f the National Labor 
Relations Act, as amended (61 Stat. 136, 29 U. S. C., 
Supp. V, Sec. 151 et seq., herein called the A ct) for 
enforcement o f its order issued on January 5, 1952,

1 References to portion o f the record printed in the Board’s A p­
pendix to this brief are designated “ B. A .” References preceding 
semicolons are to the Board’s findings; those following semicolons 
are to the supporting evidence. Occasional references to the type­
written transcript o f testimony are designated “Tr.” .

(l)



2

against Albert Armato (herein called Armato) and 
W ire & Sheet Metal Specialty Co. (herein called W ire 
Specialty), respondents herein, following the usual 
proceedings under Section 10 o f the Act. This Court 
has jurisdiction o f these proceedings under Section 
10 (e) o f the Act, the unfair labor practices having 
occurred at respondents’ plant in Cudahy, Wisconsin.2 
The Board’s Decision and Order (B . A. 21-54, 60-65) 
are reported in 97 N. L. R. B. No. 143.

I

The Board’s findings of fact3

Briefly, the Board found on substantially undis­
puted facts that respondents Armato and W ire 
Specialty violated Section 8 (a) (5) and (1) of the 
Act by refusing to recognize and bargain with District 
No. 10, International Association o f Machinists

2 Armato, as an individual, operated the plant from July 24 to 
August 24, 1950, and was engaged in the manufacture and sale of 
metal and wire products (B. A. 90, 93). During that period A r­
mato made sales in excess o f $10,000, o f which approximately 50 
percent represented sales to points outside the State of Wisconsin 
(B. A. 93).

From August 24,1950, to March 31,1951, Wire Specialty, which 
succeeded Armato, purchased raw materials and equipment valued 
in excess o f $46,000, o f which approximately 20 percent originated 
from points outside the State of Wisconsin (B. A. 94). During 
the same period Wire Specialty made sales in excess o f $117,000, of 
which approximately 50 percent represented sales to points outside 
the State of Wisconsin (B. A. 94, 95). Upon these admitted facts 
the Board properly found that Armato and Wire Specialty were 
engaged in commerce within the meaning o f the Act (B. A. 24,25).

3 The Board adopted in full the trial examiner’s findings o f fact 
and conclusions with respect to the unfair labor practices found 
(B. A. 60-61, 21-46).



3

(herein called the Union), the duly certified bargain­
ing representative of their employees. The Board 
further found that W ire Specialty also violated Sec­
tion 8 (a) (5) and (1) by unilaterally granting its 
employees a wage increase. The findings and sup­
porting evidence are set forth in detail below.

1. Certification of the Union

For some years prior to the unfair labor practices 
found by the Board, Gustave Krantz d /b /a  Krantz 
W ire & Mfg. Co. (herein called Krantz) owned and 
operated the plant involved here (B . A. 71-73). 
Krantz was engaged in the manufacture and salt o f 
metal and wire products (B . A. 71-73). On Oew 
her 7, 1949, following a consent election, the Union 
was certified by the Board as the exclusive bargaining 
representative o f Krantz’ employees in a unit con­
sisting of production and maintenance employees 
(B . A. 25; 67, 68, 138).4 On October 31, 1949, Krantz 
and the Union entered into a collective bargaining 
agreement for one year. The agreement provided, 
inter alia, that it would be “ binding upon the parties 
hereto and their successors and assigns.”  The agree­
ment also provided for a union shop when the relevant 
requirements of the Act with respect to union-security 
provisions were met (B . A. 25; 124). On Decem­
ber 9, 1949 these requirements were satisfied and

4 Specifically the unit was defined to include “ All production and 
maintenance employees including part time employees and lead 
men * * * but excluding office and clerical employees, and
guards, professional and supervisory employees as defined in 
the Act, as amended” (B. A. 33).



4

thereafter all of Krantz’ 25 employees in the bargain­
ing unit became members o f the Union (B . A. 25; 
68, 69, 89).

2. Respondents take over and continue the business o f Krantz

On July 19, 1950, Krantz for business reasons leased 
its building, machinery, and fixtures to Armato for a 
term of 5 years (B. A. 26; 73, 90, 130-134). By an 
amendatory agreement to the lease Armato purchased 
Krantz’ inventory o f raw materials, goods in process, 
and finished products (B. A. 26; 74, 75, 86, 87, 90, 129, 
130). On July 21, Krantz notified its employees that 
it was ceasing operations at the close of the day and 
that their employment was being terminated as of 
then, and that Armato would do his own hiring (B. A. 
26; 73, 143). Before the plant closed on July 21 Gus­
tave Krantz, at Armato’s request, recommended for 
employment six of the employees to finish up some of 
the work which was then in process (B . A. 26; 91). 
Armato asked these employees to report for work on 
the following Monday (B . A. 26, 27; 91).

On July 24, Armato took over the plant and with six 
o f Krantz ’ former employees resumed work on Krantz’ 
unfilled orders (B . A. 26, 27; 76, 78-80, 86, 90, 91, 
99-107). Subsequently Armato rehired 2 more of 
Krantz’ employees, one on August 3 and another on 
August 12 (B . A. 27, n. 8; 106-109). In addition, 
Armato had Gustave Krantz, the former owner, con­
tinue to oversee new jobs, to supervise the tool and 
die work, to participate in buying, and to engage in 
the hiring o f personnel (B. A. 27; 75-79, 85, 86, 105, 
106, 115, 116,120,121). Armato also retained Krantz’



5

son, Eugene Krantz, to act as general superintendent, 
the position that he had held in his father’s business 
(B. A. 27-29; 75, 76, 85, 86, 96, 98, 120).

Meanwhile, during the first week in August, Alfred 
Bramucci arranged with Armato to join him in the 
ownership and operation o f the business (B . A. 28; 
92, 93). The two agreed to form a corporation to take 
over the business (B. A. 28; 93). On August 24, 
1950, W ire Specialty was formed (B . A. 28; 92, 93). 
Bramucci and Armato each received a 25 percent stock 
interest in the corporation. The remaining stock went 
to two other individuals to whom Armato and Bra­
mucci advanced the necessary purchase money. Bra­
mucci became president of the corporation and Armato 
a director and officer (B . A. 28; 120, 121). The cor­
poration assumed Armato’s lease and amendatory 
agreement with Krantz (B. A. 28; 93).

W ire Specialty, after its formation, continued to 
work on Krantz’ unfilled orders and eventually com­
pleted most of them (B . A. 28; 76, 136). It also con­
tinued to manufacture substantially the same type of 
metal and wire products as those previously made by 
Krantz and, while securing new customers of its own, 
has retained most o f Krantz’ former customers (B. A. 
28; 72, 73, 80-84,100,104,109,114,115.5 6

W ire Specialty also retained Gustave Krantz and 
his son to perform the services previously assigned 
them by Armato (B. A. 28, 29, 39; 120). It also 
recalled to work another former employee of Krantz

5 Gustave Krantz testified that he did not notify his customers
of the change in ownership until December 1950 (B. A. 83, 84).



6

(B. A. 27, n. 8; 103-107). Of the 9 Krantz employees 
rehired by Armato and W ire Specialty all were pro­
duction and maintenance employees except one who 
was a clerical employee (B. A. 139). A fter being 
rehired the employees continued to do substantially 
the same type of work, and under the same super­
vision, as they had been doing for Krantz (B. A. 99- 
110). By September 1, 1950, W ire Specialty had a 
work force o f approximately 25 employees (B . A. 28; 
139, 141).

In taking over Krantz, Armato was aware of 
Krantz’ contract with the Union and that the plant 
was a union shop (B . A. 73, 74, 112, Tr. 209-211). 
W ire Specialty also was informed of Krantz’ con­
tract with the Union (Tr. 211, 212).

3. Repondents refuse to recognize and bargain with the Union

Following the transfer of Krantz to Armato, 
Krantz notified the Union of the transfer and o f the 
discharge o f the employees (B . A. 29; 69, 70, 110, 111, 
128). On August 4, 1950, the Union’s attorney, 
Robert E. Gratz, in a joint letter to Krantz and to 
the Popperrette Corporation o f which Armato was 
president, stated that the Union “ has been and now 
still is the bargaining agent” for Krantz and that 
the Union’s contract with Krantz was binding on any 
successor or assignee (B. A. 29, 30; 95, 110, 111, 126, 
127). Gratz then requested a bargaining confer­
ence to discuss “ the question of bargaining rights as 
far as the Union is concerned, as well as the question 
o f employees discharged as the result o f the change 
in ownership” (B . A. 30; 127). On August 9, 1950,



7

Armato rejected Gratz’ request for a bargaining con­
ference (B. A. 30, 31; 142). Also about this time 
Gratz had a telephone conversation with Armato re­
garding the Union’s bargaining rights (B . A. 31; 97, 
98, 111, 112, 121-123). Gratz asked Armato if  he 
would be willing to take over the Union’s unexpired 
contract with Krantz, but Armato declined to do so 
(B . A. 31; 112, 121-123). Gratz then asked Armato 
if he would be willing to negotiate a new contract with 
the Union as the bargaining representative of his 
employees (B. A. 31; 112, 123). Armato refused to 
do so, stating that he was not obligated to bargain 
with the Union since in taking over Krantz he had 
not assumed its obligations to the Union (B. A. 31; 
112, 113, 121-123). On August 23, 1950, Heidenreieh, 
the Union’s business agent, wrote Armato requesting 
a bargaining conference (B . A. 32; 70, 125, 126). 
Armato did not reply to Heidenreieh’s letter (B. A. 
32; 98).

Wire Specialty after its formation confirmed by 
formal action all of Armato’s acts taken while he was 
sole proprietor of the business (B. A. 44, n. 38; Tr. 
196).

In March 1951, respondent W ire Specialty without 
prior consultation or bargaining with the Union 
granted its employees a general wage increase of 10 
cents per hour (B. A. 45; 103, 109).

I I

The Board’s conclusions

Upon the basis o f the foregoing facts, the Board 
found (B. A. 39) that the transfer from Krantz to

222885— 52------ 2



8

Armato and W ire Specialty was a bona fide business 
transaction but that there was a sufficient continuity 
of supervisory control, working force, and business 
operations from one to the other to justify the con­
clusion that there was a practical continuity o f the 
employing industry. The Board also found (B . A. 
40-42) that since a certification of bargaining repre­
sentatives runs with the employing industry, the cer­
tification issued to the Union before the transfer 
of ownership was binding upon respondents. Accord­
ingly, the Board concluded that respondents by refus­
ing to bargain with the Union during the otherwise 
normal operative period of the certification violated 
Section 8 (a) (5) and (1) of the Act (B. A. 46, 60). 
The Board also concluded (B. A. 46, 60) that W ire 
Specialty further violated Section 8 (a) (5) and 
(1) o f the Act by unilaterally granting its em­
ployees the wage increase in March 1951.

Ill
The Board’s order

The Board’s order (B. A. 61-63) requires W ire 
Specialty to cease and desist from refusing to bargain 
with the Union, and from in any manner interfering 
with the efforts of the Union to bargain with it on 
behalf of the employees. Affirmatively, the order 
requires W ire Specialty, upon request, to bargain 
with the Union, and to post the usual notices. The 
order also requires Armato to cease and desist from 
interfering with the efforts of the Union to bargain 
with W ire Specialty, and to post notices to that effect.



9

THE CONTESTED ISSUE

The issue before the Court is :
Whether the Board properly found on the record 

as a whole that respondents were successors to Krantz 
and that, therefore, their refusal to recognize or 
bargain with the certified Union as their employees’ 
representative was violative o f Section 8 (a ) (5) and 
(1) o f the Act.

PROPOSITIONS OF LAW  RELIED ON

1. A  Board certification of bargaining representa­
tives, absent unusual circumstances, is valid and oper­
ative for a reasonable period o f time, usually one 
year. Franks Bros. Co. v. N. L. R. B., 321 U. S. 702; 
N. L. R. B. v. Gatke Corp., 162 F. 2d 252; N. L. R. B. 
v. Geraldine Novelty Co., 173 F. 2d 14 (C. A. 2) ; 
N. L. R. B. v. Worcester Woolen Mills Corp., 170 F. 
2d 13 (C. A. 1), certiorari denied, 336 U. S. 903; 
N. L. R. B. v. Bor chert d/b/a West Fork Cut Glass 
Co., 188 F. 2d 474 (C. A. 4), N. L. R. B. v. Appala­
chian Electric Poiver Co., 140 F. 2d 217 (C. A. 4).

2. A  Board certification during its normal opera­
tive period rims with the employing industry and 
is binding upon a bona fide successor. N. L. R. B. 
v. Blair Quarries, Inc., 152 F. 2d 25 (C. A. 4 ) ;  
N. L. R. B. v. Colten, 105 F. 2d 179 (C. A.
6 ) ; N. L. R. B. v. Hoppes Mfg. Co., 170 F. 2d
962 (C. A. 6 ) ;  N. L. R. B. v. Eva Ray Dress Co., 191 
F. 2d 850 (C. A. 5) ; Northwest Glove Co., Inc., 74 
N. L. R. B. 1697; Simons Engineering Co., 65
N. L. R. B. 1373; Stonewall Cotton Mills, 80
N. L. R. B. 325.



10

3. The employing industry for purposes of the Act 
remains essentially the same where after a transfer 
o f ownership there is a substantial continuity o f op­
erations, supervisory personnel and working force be­
tween the predecessor and successors. In addition 
to cases under Point 2 see also N. L. R. B. v. Na­
tional Garment Co., 166 F. 2d 233 (C. A. 8), certiorari 
denied, 334 U. S. 845; N. L. R. B. v. Weissman Co., 170 
F. 2d 952 (C. A. 6), certiorari denied, 336 U. S. 972; 
N. L. R. B. v. O’Keefe & Merrit Mfg. Co., 178 F. 2d 
445 (C. A. 9 ) ; N. L. R. B. v. Weirton Steel Co., 135 
F. 2d 494 (C. A. 3 ) ; Union Brawn Steel Co. v. 
N. L. R. B., 109 F. 2d 587 (C. A. 3) ; N. L. R. B. v. 
Hopwood Retinning Co., 104 F. 2d 302 (C. A. 2 ) ;  
N. L. R. B. v. Adel Clay Products Co., 134 F. 2d 342 
(C. A. 8 ) ;  N. L. R. B. v. Baldwin Locomotive Works, 
128 F. 2d 39 (C. A. 3 ) ; Bethlehem Steel Co. v. 
N. L. R. B., 120 F. 2d 641 (C. A. I). C.).

ARGUMENT

The Board properly found that respondents were successors 
to Krantz and, therefore, their refusal to recognize or bar­
gain with the certified Union as their employees’ representa­
tive was violative of Section 8 (a) (5) and (1) of the Act

The record as summarized above (pp. 2-7) estab­
lishes that the Union was certified by the Board as 
bargaining representative of Krantz’ production and 
maintenance employees on October 7, 1949. After 
Armato took over Krantz’ business in July 1950 with 
knowledge of the Union’s representative status, he re­
fused to honor the certification and bargain with the 
Union. The record also establishes that W ire Spe­
cialty after its formation ratified and confirmed by



11

formal action all o f Armato’s acts taken by him while 
he was sole proprietor of the business and that sub­
sequently W ire Specialty without first consulting the 
Union granted its employees a general wage increase. 
I f  the certification issued to the Union before the 
transfer o f ownership by Krantz was binding upon 
respondents, there can be no question that respondents 
by their conduct violated Section 8 (a) (5) and (1) 
o f the Act.6

A Board certification normally runs with the em­
ploying industry and is binding upon a bona fide 
successor employer as well as on his predecessor. 
The central issue in this case is, therefore, whether the 
Board, upon the record as a whole, properly found 
that, despite the transfer in ownership from Krantz 
to respondents, there was a practical continuity o f the 
employing industry and that consequently respond­
ents, as successors to Krantz with knowledge of the 
outstanding certification, were under a duty to bargain 
with the certified Union. Respondents in defense of 
their refusal to bargain with the Union contend, prin­
cipally, that they constituted a new and wholly un­
related business. Consequently, respondents assert, 
the “ employing industry”  rule has no application 
here and they were under no obligation to bargain 
with the Union until it reestablished its majority 
status among their employees. W e submit that in

6 Medo Photo Supply Corp. v. N. L. R. B., 321 U. S. 678, 687; 
N. L. R. B. v. Crompton Highland Mills, 337 U. S. 217, 223-225; 
N. L. R. B. v. Gatke Corp., 162 F. 2d 252, 255 (C. A. 7) ; Superior 
Engraving Co. v. N. L. R. B., 183 F. 2d 783,792 (C. A. 7), certiorari 
denied, 340 U. S. 930.



12

the circumstances of this case the Board’s finding 
that respondents were Krantz’ successors within the 
meaning o f the “ employing industry”  rule is ade­
quately supported by the record.

It is well settled, and respondents do not dispute, 
that in the interest of orderly and stable labor rela­
tions and effective collective bargaining an employer 
must, absent unusual circumstances, honor a Board 
certification for a reasonable period of time. During 
that period the employer is under a continuing duty 
to recognize and bargain with the certified union as 
the exclusive bargaining representatives of the em­
ployees in the appropriate unit, regardless of any 
intervening shift in employee sentiment as to their 
choice of bargaining representative or turnover in 
personnel.7 In the ordinary case the reasonable 
period is one year.8

There is no dispute that the effectiveness o f a certifi­
cation during the one-year period is not necessarily 
limited to the particular employer operating the busi­
ness at the date of its issuance. A  certification during

7 E. g., Franks Bros. Co. v. N. L. R. B., 321 U. S. 702, 705; N. L. 
R. B. v. Gatke Corp., 162 F. 2d 252, 295 (C. A. 7) ; N. L. R. B. v. 
Arnolt Motor Co., 173 F. 2d 597, 598, 599 (C. A. 7) ; Superior En­
graving Co. v. N. L. R. B., 183 F. 2d 783, 792 (C. A. 7), certiorari 
denied, 340 U. S. 930; N. L. R .B . v. Appalachian Electric Power 
Co 140 F. 2d 217, 222 (C. A. 4) ; N. L. R. B. v. Century Oxford 
Mfg- Corp., 140 F. 2d 541, 542 (C. A. 2), certiorari denied, 323 
U. b. 714; Motor Valve & Mfg. Co. v. N. L. R. B ., 149 F. 2d 247,249 
(p' ~'L' 6) j A. L. R. B. v. H. G. Hill Stores, Inc., 140 F. 2d 924, 
927; N. L. R. B. v. Calumet Steel Co., 121 F. 2d 366, 370 (C. A. I).

8 N. L. R. B. v. Geraldine Novelty Co., 173 F. 2d 14,16-17 (C. A. 
2) ; N. L. R. B. v. Worcester Woolen Mills Co., 170 F 2d 13 (C A  
1), certiorari denied, 336 U. S. 903; N. L. R. B. v. Bor chert d/i/a 
West Fork Cut Glass Co., 188 F. 2d 474, 475 (C. A. 4), enforcing 
90 N. L. R. B. 944,945.



13

its one-year period runs with the employing industry 
and the certification is binding upon a bona fide suc­
cessor. Thus, for example, in N. L. R. B. v. Blair 
Quarries Inc., 152 F. 2d 25, 26 the Court of Appeals 
for the Fourth Circuit applying the foregoing iu.c 
held that a bona fide lessee of an enterprise who con­
tinued to operate the business with a substantial num­
ber of the lessor’s working force and supervisor) 
personnel was under a duty to honor an otherwise 
valid certification issued while the lessor had operated 
the enterprise. The rationale underlying this holding 
has been stated by the Court of Appeals for the Sixth 
Circuit in its frequently cited opinion (as in the Blair 
case) in N. L. R. B. v. Golten, 105 F. 2d 179 in these 
words (at p. 183) :

It is the employing industry that is sought to 
be regulated and brought within the corrective 
and remedial provisions of the Act in the inter­
est o f industrial peace. It needs no demonstra­
tion that the strife which is sought to be averted 
is no less an object of legislative solicitude 
where contract, death, or operation of law 
brings about a change of ownership in the 
employing agency.9

9 Accord: N. L. R. B. v. National Garment Co., 166 F. 2d 233,238 
(C. A. 8), certiorari denied, 334 U. S. 845; A. L. R. B. v. Weissman 
Co., 170 F. 2d 952, 954 (C. A. 6), certiorari denied, 336 U. S. 972; 
N. L. R. B. v. O'Keefe & Merritt Mfg. Co., 178 F. 2d 445, 449 
(C. A. 9) ; N. L. R. B. v. Weirton Steel Co., 135 F. 2d 494, 498- 
499 (C. A. 3) ; Union Drawn Steel Co. v. N. L. R. B., 109 F. 2d 587, 
589, 595 (C. A. 3 ); N. L. R. B. v. Ilopwood Retinning Co., Inc., 
104 F. 2d 302 (C. A. 2) ; Le Tourneau v. N. L. R. B., 150 F. 2d 1012 
(C. A. 5 ); N. L. R. B. v. Adel Clay Products Co., 134 F. 2d 342, 
346 (C. A. 8) ; N. L. R. B. v. Baldwin Locomotive Works, 128 F. 
2d 39, 43 (C. A. 3) ; Bethlehem Steel Co. v. N. L. R. B., 120 F. 2d 
641,650 (C. A .D . C.).



14

I f  change in the ownership of a business en­
terprise could serve to nullify a Board certification 
neither the industrial peace which the Act seeks to 
foster nor the reasonable degree of permanence in 
validly instituted bargaining relationships that is es­
sential to the practical working o f the collective bar­
gaining process would be achieved. Moreover, it can­
not be said that change in the legal ownership o f a 
business enterprise in itself imports a change in the 
employees’ choice o f bargaining representatives.

Accordingly, where the “ employing industry”  re­
mains essentially the same after a transfer of legal 
ownership the certification continues for its normal 
operative period with undiminished vitality and the 
successor employer is under an obligation to honor 
the cei tification and bargain with the certified union. 
N. L. R. B. v. Blair Quarries, Inc., 152 F. 2d 25, 26 
(C. A. 4 ) ;  N. L. R. B. v. Hoppes Mfg. Co., 170 F 2d 
962, 964 (C. A. 6) ; N. L. R. B. v. Eva Ray Dress Co., 
191 F. 2d 850 (C. A. 5 ) ;  enforcing 88 R. L. R. B. 361; 
Northwest Glove Co., Inc., 74 1ST. L. R. B. 1697, 1700; 
Simmons Engineering Co., 65 N. L. R. B. 1373; Stone­
wall Cotton Mills, 80 N. L. R. B. 325. (C f. also cases 
cited supra, p. 13.)

The issue in the instant case, therefore, narrows 
down to whether the “ employing industry”  remained 
essentially the same despite the transfer o f owner­
ship from Krantz to respondents. In determining 
that issue the critical consideration is whether there 
was after the transfer a sufficient continuity of busi­
ness operations, supervisory personnel and working 
force as to justify, in their totality, the conclusion that



15

there was essentially a practical continuation of the 
employing industry, without significant change in any 
essential attribute o f the employment relationship. 
See cases cited supra, p. 14.

The undisputed facts in the case establish {supra, 
pp. 4-6) that respondents continued to manufacture 
and distribute substantially the same products as 
Krantz; used the same plant and equipment; com­
pleted Krantz’ unfilled orders and kept most o f 
Krantz’ former customers. Indeed, Krantz did not 
notify its customers of the change in ownership until 
several months after the transfer had been made. 
There was a hiatus of only one week between the 
cessation o f operations by Krantz and their resump­
tion by respondent Armato. Respondents retained 
essentially the same supervisory staff as Krantz had. 
Gustave Krantz, the former owner continued to super­
vise the tool and die work of the employees, to oversee 
new jobs, and to participate in the hiring o f person­
nel. According to Krantz, his work was “ practically 
the same”  as he had done for his own company. His 
son, Eugene Krantz, continued to act as general su­
perintendent. Respondents also initially recruited 
their entire working force from Krantz’ former em­
ployees. Six o f these employees were in effect hired 
by Armato on the final day o f Krantz’ operations. 
When Armato refused to bargain with the Union 
within the certification year all o f the employees were 
former Krantz employees. At all times thereafter 
respondents had a working force a substantial num­
ber o f which were former Krantz employees. They 
continued to perform the same work, and under the



16

same supervision, as they had done when they were 
employed by Krantz. In sum, we submit that in the 
light o f all these considerations the Board properly 
concluded that respondents took over and continued 
the employing industry and that respondents as suc­
cessors to Krantz were therefore under a duty to 
honor the certification.

This conclusion is not, as respondents asserted be­
fore the Board, invalidated by the fact that Krantz 
retained no financial interest in the successor enter­
prise or that respondents did not assume any obliga­
tion to retain Krantz’ working force or that respond­
ents failed to take over en masse Krantz’ entire 
working force. The Board and the courts, in deter­
mining whether the employing industry remains 
essentially the same for purposes of the Act, have, 
o f course, taken into account one or more of these 
factors where they existed and given them appro­
priate weight. E. g., N. L. R. B. v. Golten, 105 E. 2d 
179 (C. A. 6 ) ; N. L. R. B. v. Blair Quarries Inc., 152 
F. 2d 25 (C. A. 4). But the presence o f any o f these 
factors is not indispensable to a finding that the em­
ploying industry remains the same. In the Blair 
case, for example, the lessor retained no financial 
interest in the business enterprise after the transfer 
to the lessee nor did the lessee assume any obliga­
tion to retain the lessor’s working force. And in 
other cases before it the Board has not deemed it 
essential that the successor enterprise retain the pred­
ecessor’s entire working force. It  is enough that a 
substantia] number, as here, are retained with no



17

essential attribute of the employment relationship 
having been changed. E. g., Northwest Glove Co., 
Inc., 74 N. L. R. B. 1697, 1699; Synchro Machine Co., 
62 N. L. R. B. 985, 990, 991. The employing industry 
concept extends not only to a successor enterprise 
which is merely the alter ego of the predecessor or 
one which involves only a change in management. 
It also encompasses such enterprises which, by reason 
of substantial continuity of business operations, su­
pervisory control and working force remain essen­
tially the same employing industry as their predeces­
sors. These factors certainly existed here when 
respondents refused to bargain with the Union.

Nor is the Board’s conclusion subject to challenge 
because after the refusal to bargain, respondents did 
not recruit the remaining members o f their ultimate 
working force from Krantz’ former employees. The 
essential continuity o f the employing industry was 
established when the Union requested bargaining. 
And, as we have shown, the certification by reason 
o f that continuity remained effective against the suc­
cessor enterprise. The situation here may, therefore, 
be likened to a temporary reduction in working force 
followed by recruitment o f new employees as 
replacements, or to a turn-over in personnel after 
the representative status of a union has been 
established. Such a turn-over, as this and other 
courts have often stated, “ is not such a change in 
circumstances as would relieve [an employer] of its 
obligation to bargain.”  Superior Engraving Co. v. 
N. L. R. B., 183 F. 2d 783, 793 (C. A. 7), certiorari 
denied, 340 U. S. 930. Indeed, it is not improbable



18

that a union in that situation might have “ recruited 
in its ranks a proportionate share of adherents from 
the new employees.”  Great Southern Trucking Go. v. 
N. L. R. B., 139 F. 2d 984, 985-986 (C. A. 4), certiorari 
denied, 322 U. S. 729. See also, N. L. R. B. v. Calu­
met Steel Go., 121 F. 2d 366, 370 (C. A. 7) ; Motor 
Valve & Mfg. Go. v. N. L. R. B., 149 F. 2d 247, 249 
(C. A. 6) ; N. L. R. B. v. H. G. Hill Stores Go., Inc., 
140 F. 2d 924, 927 (C. A. 5).10

Respondents’ other contentions

1. Before the Board respondents further sought to 
defend their refusal to honor the certification on the 
ground that, assuming it was binding upon them, 
nevertheless the Union insisted upon representing a 
bargaining unit which included supervisors, contrary 
to the Act and the specification o f the unit in the cer­
tification. Respondents base this contention solely on 
the fact that the Union initially asked Armato to con­
tinue to abide by the terms of its contract with Krantz

10 Before the Board respondents relied strongly, in support of 
their position, on the Board’s earlier decisions in Klamath Pine 
Co., 56 N. L. R. B. 587 and Herman Lowenstein, Inc., 75 N. L. R. B. 
3(7. However, in the Lowenstein case the new enterprise engaged 
in different type of work from its predecessor, recruited the ma­
jority o f its employees from outside sources, and retained only 
such individuals from its predecessor’s work force as it considered 
qualified for the different type o f work required in its operations. 
Moreover, in both the Klamath and Lowenstein cases, unlike here, 
rival unions had made substantial showings of representation to­
wards the end o f the period during which the representative status 
of a union is normally immune to challenge. In such a setting the 
Board might well conclude that, on balance, it should not give 
effect to the employing industry concept but ascertain anew the 
employees’ choice of bargaining representatives.



19

which defined the unit as including “ working fore­
men.”  The unit set forth in the certification, the 
appropriateness o f which respondents conceded, in­
cluded “ lead men”  instead o f “ working foremen.”  
The difference, we submit, is one o f semantics and 
the terms are more or less interchangeable. See Dic­
tionary of Occupational Terms, U. S. E. S., 1949, pp. 
765 and 1506. Whether “ lead men”  or “ working 
foremen”  are supervisors within the meaning o f the 
Act depends upon whether in any given situation 
they possess, in fact, supervisory powers as defined 
by the statute. See N. L. R. B., Fifteenth Annual Re­
port (G ov ’t Printing Off. 1950), p. 54. The record 
in the instant case, as the trial examiner noted (B. A. 
34; 117-119), fails to establish that “ working fore­
men”  covered by the Union’s contract with Krantz 
were in fact supervisory employees within the mean­
ing o f the Act.

In any event, it is evident that the Union was not 
insisting on an inappropriate unit. The Union offered 
to negotiate an entirely new contract with respondents 
{supra, p. 7). Absent clear evidence to the contrary, 
a union may properly be presumed to seek recognition 
in an appropriate unit where, as here, it is insisting 
that its certification, specifying an admittedly appro­
priate unit, be honored. Moreover, respondents did 
not refuse to bargain with the Union on the ground 
that it sought to bargain for an inappropriate unit. 
That refusal was based solely on the claim that the 
certification was not binding upon them {supra, 
p. 7). It was not until after issue was joined in the



20

instant case that respondents asserted this defense. 
In these circumstances “ an employer is in an 
unfortunate position in attempting to justify before 
the Board [his] refusal to bargain for a reason that 
apparently did not occur to [him] prior to the time of 
hearing.”  Polish National Alliance v. N. L. R. B. 
136 F. 2d 175, 180, 181 (C. A. 7), affirmed, 322 
U. S. 643.

2. Respondent W ire Specialty also urged that in 
any event it cannot be charged with a refusal to 
bargain since the Union never requested it to bargain 
but addressed its unsuccessful request to Armato be­
fore the formation o f the corporation. The record 
establishes that {supra, pp. 5, 7) at the time of the 
refusal to bargain W ire Specialty was in the process 
o f being organized; that Bramucci, one o f the four 
incorporators and first president of W ire Specialty, 
was in actual charge of the business; that Armato 
advised his fellow incorporators of the Union’s con­
tract with Krantz and kept them informed of his own 
dealings with the Union; and that following its in­
corporation W ire Specialty formally ratified and 
confirmed all of Armato’s acts taken while sole pro­
prietor of the business. Furthermore, after having 
taken over the business, W ire Specialty did not dis­
avow Armato’s refusal to bargain with the Union 
but continued it by unilaterally increasing wages 
without consulting with the Union. In  this setting 
the Board may legitimately look beyond the corporate 
entities and hold W ire Specialty responsible for the 
action taken immediately before its formation by its



21

two principal organizers and prospective stockholders 
and officers, particularly where, as here, the corpora­
tion formally ratifies that action and continues in the 
same course of conduct.11

3. Finally, respondent Armato urged that no order 
could be issued against him because after the transfer 
of the business to W ire Specialty he was no longer 
engaged in operating the enterprise. The Board’s 
order (B . A. 62), in substance, requires Armato to 
cease and desist from interfering with the Union’s 
efforts to bargain collectively with W ire Specialty 
and from in any like or related manner interfering 
with the employees of W ire Specialty in the exercise 
o f their rights under the Act. As already noted 
{supra, p. 7), Armato after he took over the enter­
prise from Krantz refused to bargain with the Union. 
Thereafter, when W ire Specialty was organized he 
became an officer, director and a major stockholder 
in the corporation. In this setting the Board’s order 
against Armato does no more than give specificity 
to the phrase “  officers and agents” normally included 
in its order against an offending corporate employer. 
And in view of Armato’s role in the unlawful refusal 
to bargain with the Union the Board could properly 11

11 Cf. N. L. R. B. v. Stowe Spinning Co., 336 U. S. 226,227; N. L. 
R. B. v. Federal Engineering Co., Inc., 153 F. 2d 233, 234 (C. A. 
6) ; N. L. R. B. v. Don Juan, Inc., 178 F. 2d 625, 627 (C. A. 2) ; see 
Southport Petroleum Co. v. N. L. R. B., 315 U. S. 100,106; Regal 
Knitwear Co. v. N. L. R. B., 324 U. S. 9, 14-15; N. L. R. B. v. Na­
tional Garment Co., 166 F. 2d 233, 238 (C. A. 8), certiorari denied, 
334 U. S. 845; N. L. R. B. v. W. C. Bachelder, 125 F. 2d 387, 388 
(C. A. 7 ) ; N. L. R. B. v. Weirton Steel Co., 135 F. 2d 494, 498- 
499 (C. A. 3).



22

single him out in its order and expressly guard against 
his further participation in the unfair labor prac­
tices found.

CONCLUSION

For the reasons stated it is respectfully submitted 
that a decree should issue enforcing the Board’s 
order in full.

G eorge J. B ott ,
General Counsel,

D avid  P. F in d l in g ,
Associate General Counsel,

A. N o r m a n  S omers,
Assistant General Counsel, 

D o m in ic k  L . M a n o l i,
T h o m a s  J. M cD erm o tt ,

Attorneys,
National Labor Relations Board.

O ctober 1952.

■.  S. GOVERNMENT PRINTING OFFICE: 1B52



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