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July 28, 1998

SANDRA DUNBAR, Regional Director of the Third Region of the National Labor Relations Board, for and on behalf of the NATIONAL LABOR RELATIONS BOARD, Petitioner,

The opinion of the court was delivered by: MCAVOY

THOMAS J. McAVOY, Chief U.S. District Judge


 This is a petition for injunctive relief brought by Sandra Dunbar ("petitioner"), Regional Director of the Third Region of the National Labor Relations Board ("NLRB" or "the Board"), on behalf of the Board, pursuant to the Labor-Management Relations Act ("LMRA"), 29 U.S.C. ยง 160(j). Respondent Colony Liquor and Wine Distributors, L.L.C. ("Colony") opposes the petition.

 I. Background

 The following facts are drawn from the record of the administrative hearing before Administrative Law Judge Michael A. Marcionese ("ALJ"). Colony is a New York limited liability corporation engaged in the wholesale distribution of liquor and wine. Transcript of Administrative Proceeding (hereinafter "Tr.") at 28-29. Its principal place of business is in Kingston, New York. As of June of 1997, Colony also had offices in Albany, Syracuse, Rochester and Buffalo.

 As of June of 1997, Colony had three facilities in the Albany area. One facility, located in Menands, New York, had been an original Colony facility. The other two, in the City of Albany, were acquired through Colony's merger in September of 1996 with a company called Peerless Mohawk. Tr. at 77. After the merger, all three of the Albany facilities (hereinafter "the Albany facility") remained in operation through a portion of 1997. Prior to the merger, employees at both the Colony and Peerless locations in Albany were represented by Local 669, International Brotherhood of Teamsters, AFL-CIO (hereinafter "the Union"). After the merger, the Union, on behalf of the employees at the Albany facility, entered into a collective bargaining agreement ("CBA") with Colony. Id. ; GC-9 *fn1" As of 1996 and throughout 1997, none of Colony's Kingston employees were represented by a union. Tr. at 78.

 At least as early as 1997, Colony began exploring the possibility of expanding its Kingston facility. See GC-3. Colony employee and Union Shop Steward Gary Brown testified that in February of 1997, Colony supervisor John Dowdell told him that Colony would probably be leaving the Albany area. Tr. at 328. Specifically, Dowdell indicated that "there was a good possibility that the business would be going to Kingston and [the Albany employees] wouldn't necessarily be going with it." Id. at 328. Dowdell asked that Brown keep the information confidential. Id. Throughout the first half of 1997, however, Colony management was denying to its employees that the Albany facility would be relocated to Kingston. Tr. at 398-400; 550-52. Colony began construction of the expanded Kingston facility in April of 1997. GC-32; Tr. at 91.

 In March or April of 1997, Irving Wood, principal executive officer of the Union, became aware of rumors circulating among the shop stewards that Colony was relocating its Albany facility to Kingston. Tr. at 110. Sometime in May of 1997, Wood contacted Donald Jost, Colony's Director of Operations, and asked "what was going on" with the Kingston expansion. Tr. at 112. Jost told Wood that no decision had been made on what positions would be transferred to Kingston, and left open the possibility that at least the Menands site would remain in operation. Id. at 112-13. On May 19, 1997, Wood sent a letter to Colony's President, James Andretta III, asking (1) whether Colony had plans to move the Albany facility to another location; (2) if so, when the move was planned and to what location; and (3) what the reasons for the relocation were. GC-10. Wood did not receive a response to the letter. Tr. at 116. He sent a follow-up letter on June 2, 1997 requesting the same information, and again received no response from Colony. GC-11.

 On June 11 and 13, 1997, Colony sent notices to the Albany employees, pursuant to the Worker Adjustment and Retraining Notification Act ("WARN"), that Colony intended to cease operations at the Albany facility as of August 15, 1997, at which time their employment would be permanently terminated. GC-12, 13. The notices also indicated that no "bumping rights" currently existed. GC-13. No notification was given to the Union at that time, but Wood was given copies of the WARN Act notices by one of the stewards. Tr. at 119-20. After reviewing the notices, Colony employee and Union Shop Steward Robert F. Haight asked Dowdell (1) for clarification of the "bumping rights" reference; (2) whether the Union had been notified; and (3) if the Albany facility employees covered by the CBA (hereinafter the "bargaining unit employees") would be employed in Kingston. Tr. at 401. Dowdell did not respond.

 Meantime, Wood had still not received a response to his letters of May 19 and June 2. On June 16, 1997, the Union submitted various grievances in an attempt to keep the Albany facility open or to require Colony to transfer the bargaining unit employees to Kingston. On June 17, 1997, Wood wrote Andretta requesting that Colony meet with the Union to discuss the decision to cease operations at the Albany facility. GC-14. Specifically, the Union wanted to discuss: (1) the impact of the closing on the bargaining unit employees; (2) the application of the Albany CBA to Colony operations in other facilities; and (3) Colony's obligation to continue employment of the bargaining unit employees at another location. The same day, the Union filed its original charge with the Board. See GC-1a. The charge alleged that since May 19, 1997, Colony had refused to bargain in good faith with the Union by, inter alia , refusing to furnish information on the relocation. Id.

 On June 20, 1997, the Union submitted an intention to arbitrate the grievances with the New York State Employment Relations Board. GC-15. On June 23, Wood again wrote Andretta, this time asserting that Colony's termination of the bargaining unit employees would violate several provisions of the CBA. GC-16. On June 27, 1997, Colony sent letters to Wood and Union President Ozzi Martucci, providing written notice, pursuant to the WARN Act, of Colony's intention to permanently close the Albany facility as of August 15, 1997. GC-17a-b. The letters indicated that a total of 57 employees would be affected, including bargaining unit employees. Id. Moreover, Colony began hiring for the expanded facility by the end of June. Tr. at 48, 678-79.

 On July 14, 1997, after a meeting with the bargaining unit employees, the Union informed Colony that 41 bargaining unit employees were "ready, willing and able to be relocated to [Colony's] Kingston operation and becoming [sic] employed there when and if [Colony] relocated [its] present Albany County operation." GC-19. Wood wrote Andretta again the next day, iterating his request to meet with Colony and discuss the decision to relocate, its effect on the employees and the application of the CBA to Kingston. GC-20.

 Between July 17 and 20, 1997, both Colony's counsel, Glen P. Doherty, and NLRB Field Examiner, Barnett L. Horowitz, contacted the office of Union counsel Dominick P. Tocci indicating that Colony was willing to schedule dates to bargain over the effects of the relocation. Tr. at 698-701; R-13; R-2. On July 21, 1997, Tocci contacted Doherty and the parties agreed to meet on July 24, 1997.

 Present at the July 24, 1997 meeting were Jost and Doherty for Colony, and Wood, Tocci and Union Stewards Bob Vickers, Bob Haight and Gary Brown for the Union. During the meeting, Colony explained that the relocation essentially was a cost-saving measure, and that it had hired 55 employees to fill the new positions in Kingston. Tr. at 145. The Union took the position that the bargaining unit employees had the right to be transferred to Kingston. Id. at 146. Doherty countered that he didn't believe the bargaining unit employees had a right to the Kingston positions, and that Colony's only obligation was to bargain over effects such as severance pay. Id. at 146, 704-05; R-17.

 Doherty also testified at the hearing that Tocci's position was that Colony was required to bargain over the decision to relocate to Kingston, or "at a minimum, the entire work force goes to Kingston at current terms." Tr. at 705. Doherty also testified that Tocci asserted that the Union would not bargain over effects until the NLRB, a court or an arbitrator ruled on Colony's obligation to bargain over the relocation decision. Id.2 In an affidavit sworn to July 31, 1997, Wood stated that the Union, at the July 24 meeting, took the position that it would like to reserve its right to bargain over effects until the NLRB and arbitration actions were finalized. R-5 P 7. Tocci himself testified that he suggested only that effects bargaining be "put off" for a little while due to the pendency of the NLRB matter and state arbitration proceeding. Tr. at 588.

 The following day, Doherty sent Tocci a letter by fax. The letter stated:

I am writing as a follow-up to yesterday's bargaining session during which you stated that your client, Local Union No. 669, was unwilling to bargain over "effects" due to your position that Colony was and is required to bargain over its decision to relocate certain work performed at [the Albany] facility. I believe that your position is contrary to the holding of Dubuque Packing Company, and as I advised you, inasmuch as Colony's relocation is currently in progress, the Union's refusal to bargain over "effects" compromises Colony's ability to bargain in good faith over the issue. Please be advised that Colony is ready, willing and able to bargain over "effects."

 GC-22. Tocci responded as follows in a letter to Doherty dated July 28, 1998:

Please be advised that Local 669 is prepared to meet with you and Colony representatives over "effects" of Colony's decision to relocate.
Prior to doing so we request written responses to our letters of May 19, 1997, June 17, 1997, July 14, 1997 and July 15, 1997, which responses were promised us at our meeting of July 24, 1997, together with a copy of your "relocation consultant's" report.
This agreement to meet in reference to "effects" is without prejudice to our filing of unfair labor practices with the NLRB and our demand for arbitration.
I trust that I will receive the above materials soon so that we can set some dates for bargaining sessions.


 Doherty responded in a letter dated July 29, 1997. Therein, he informed Tocci that, as indicated in the June 13, 1997 WARN Act notices, closure of the Albany facility would begin August 15, 1997. He also responded to the Union's prior requests for information by explaining the reasons for the relocation, including (1) the installation of new technology and infusion of new capital at the Kingston facility; (2) the outdated equipment at the Albany facility; (3) the proximity of the Kingston facility to a large portion of Colony's market; and (4) tax incentives available at Kingston.

 Tocci and Doherty spoke by telephone on July 30, 1997. At that time, Tocci advised Doherty that the Union proposed that the bargaining unit employees be transferred to Kingston in order of seniority and that their seniority be dovetailed with that of the Kingston employees. Tr. at 591, 709. Those employees who were not transferred would receive two weeks severance pay per year of employment plus additional benefits under the proposal. Tr. at 709.

 The Union filed an amended charge with the NLRB on August 1, 1997. In the amended charge, the Union alleged (1) that Colony discriminated against the bargaining unit employees on the basis of their Union membership by refusing to transfer them to Kingston; and (2) that Colony continued to refuse to bargain in good faith over the decision to relocate, the effects of the decision, and by refusing to furnish the Union with information regarding the decision. GC-1(b).

 Doherty provided Tocci a copy of the consultant's report on August 12, 1997, and requested that Tocci contact him to schedule bargaining dates. R-21. On August 15, 1997 the two men spoke over the telephone. Doherty asserts that during this conversation, he informed Tocci that in the coming week, Colony planned to offer positions to approximately fourteen bargaining unit employees. Tr. at 712; R-23. Tocci testified that he has no recollection of Doherty informing him of the offers. Tr. at 621. According to Tocci, the substance of the conversation centered on his concern for two bargaining unit employees, Pierce and Smarro, whose pension rights were close to vesting. Id. at 594-95. *fn3" As a result of the August 15 communications, Doherty faxed Tocci a letter suggesting August 20, 21, 25, 28 and 29, 1997 as possible dates to bargain over effects. Id. at 713. At some point, the parties agreed to an August 21 date.

 On August 19, 1997, Colony offered employment in Kingston to sixteen bargaining unit employees. *fn4" See GC-31. The pay offered was $ 12.36 per hour plus benefits, and the offers were to remain open until the following day. *fn5" Id. The offers also made reference to the ongoing effects bargaining, and indicated that such bargaining might result in the offeree's displacement by a fellow bargaining unit employee. Id. The offers were sent directly to the employees, and Dowdell spoke with those offered positions. Tr. at 92-93. One of the offerees was Brown, who testified that after handing him the letter of offer, Dowdell asked him what his answer was. Tr. at 336. Brown responded that he wasn't prepared to answer at that time, and Dowdell gave him until the end of the day. Id. After Brown noted to Dowdell that the offer would require him to "start over" with Colony after 26 years of employment, without his accrued vacation or sick time, Dowdell responded that "perhaps something could be worked out." Id. at 336-37. Brown also asserted that medical insurance contributions and travel expenses would reduce the hourly rate by $ 1.40, and that the offer did not provide for pension contributions. Id. at 338, 384. Colony did not provide copies of the offers to the Union. Tr. at 165.

 Later in the day, Brown met with four or five other bargaining unit employees who received offers. Tr. at 374. The group found the offer unacceptable, largely for the reasons to which Brown testified. Id. at 375. Similarly, Haight, who also received an offer on the 19th, was critical of its terms and the manner in which it was made. Specifically, Haight testified that Dowdell refused to answer questions regarding the specifics of the offer, that Haight would essentially be starting over as a new employee, and that he would not have a choice of route as a driver as he had in Albany. Id. at 409-10. All but one of the sixteen individuals eventually rejected the offers. Tr. at 312; 498-99; 668. *fn6"

 The parties met for bargaining on August 21, 1997. Present at this meeting were Martucci, Haight, Vickers, Brown, Tocci, Doherty and Jost. Tr. at 717. At the session, the Union again put on the table its proposal that the bargaining unit employees be transferred to Kingston with the CBA intact, and that seniority be dovetailed with the existing Kingston workforce. Tr. at 346, 415, 718; see R-20. If Colony did not agree to the transfer, the Union again proposed, in the alternative, a package of two weeks severance per year of service, plus six months pension and health insurance contributions. Tr. at 346-47. The Union also explained to Colony why it had rejected the August 19 offers: the reduction in benefits, failure to follow seniority, and the fact that the terms and conditions had not been negotiated with the Union. Tr. at 416, 719-21.

 The following day, Colony proposed to pay one week's salary to each regular employee who had not been offered, or who had rejected, employment at the Kingston facility. GC-25. The offer further stated that acceptance thereof " shall resolve all outstanding matters between" the Union and Colony. Id. The offer was to remain open until August 27, 1997. Id. On August 27, Tocci rejected the offer on behalf of the Union. Tr. at 723. The same day, Colony offered a settlement of $ 25,000, to be distributed by the Union pursuant to its own formula. Tr. at 724. Tocci responded that he would "pass it on," but that it was too low. Id.

 By fax dated September 2, 1997, Doherty asserted to Tocci that Colony was ready to bargain over effects. GC-26. The Albany facility ceased operations on September 1, 1997, and most of the employees were terminated as of September 5, 1997. Tr. at 97, 418. At least seven non-Union Albany employees retained employment with Colony at Kingston with the same rate of pay and the same benefits. Tr. at 46-47, 81-84.

 The Union filed second and third amended charges on September 30 and October 7, 1997, respectively. GC-1(c) and (d). The amended charges added allegations of direct dealing with employees, refusal to bargain concerning the relocation decision and its effects, and discrimination based on Union membership. Id. On October 15, 1997, the NLRB issued the original Complaint and Notice of Hearing underlying this action. GC-1(e). That Complaint alleged, inter alia, that Colony discriminatorily discharged and refused to transfer the bargaining unit employees based upon their Union membership. Id. at 4.

 On October 27, 1997, Colony sent letter offers of employment, signed by Dowdell, to as many as twenty-five of the bargaining unit employees. The terms essentially were the same as those in the August 19 offer, but the hourly wage was slightly higher at $ 12.81. Compare GC-31 with GC-27. Colony again included the language warning the offerees that effects bargaining was continuing, and could result in displacement. GC-27. There is no evidence in the record that Colony notified the Union of these offers beforehand. Soon after learning of the offers, Wood sent Dowdell a letter, dated October 31, 1997. The letter read, in pertinent part, as follows:

Please be advised that Local 669 is still the collective bargaining representative for . . . all your former drivers and warehousemen at the Albany County facility of Colony Liquor. As such collective bargaining representatives we object to Colony communicating directly with these former employees, and request that you meet with us as soon as ...

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