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Lodge's Charter which could very well reveal that this District Lodge was not authorized by its International to bargain with employers not subject to the Railway Labor Act or even more pointedly to bargain only with TWA.
4. As noted previously, one of the questions of successorship is whether the successor employer (Boeing) is required to recognize the labor organization which represented the predecessor's employees. While that question in the Boeing context is properly answered in the negative, an explanation is neces sary. The present labor organization involved is the International Association of Machinists. Obviously, Boeing does recognize and intends to continue recognition of the IAM as the certified collective bargaining representative. Boeing has an executed collective bargaining agreement (Exhibit 3) with the International Association of Machinists under which Boeing and the International have agreed that all production and maintenance work performed in Brevard County, Florida is to be performed under the conditions of that Agreement. In that the IAM is legally bound to an existing collective bargaining agreement, Boeing does not anticipate any labor dispute or serious "successor" problem over the application of the Boeing-IAM agreement.
5. In the normal successor case, there is an established legal relationship such as merger, consolidation, seller-purchaser, etc., between the predecessor and successor employer. This relationship is absent in the Boeing-TWA situation in that Boeing is no more than a bidder for work currently held by TWA. Although the National Labor Relations Board in William J. Burns International Detective Agency, Inc., 182 NLRB No. 50 (1970), reached a contrary conclusion, it is doubtful that this decision would stand the scrutiny of an appellate court. To date, the question has not been litigated in the courts. (It should also be noted that Members Fanning and Brown are the only two remaining members of the NLRB majority that supported this holding in the Burns case. McCullough has been replaced by Miller who together with Kennedy and Jenkins (dissenter in the Burns case) would now constitute a majority.)
6. Consideration should also be given to the fact that the former TWA employees are but a small part of a company-wide TWA unit. There has been no decision by any government agency that the TWA employees in question constitute an appropriate bargaining unit. In fact, they were treated as an accretion by TWA and IAM-a conclusion identical to the approach taken by Boeing in the instant situation.
7. The NLRB in Northwest Galvanizing Co., 168 NLRB No. 6 (1967). concluded that the purchase of a part of an employer's business does not necessarily make the purchaser a successor to the predecessor's collective bargaining agree. ment. The successor placed the predecessor's employees on the successor's wage plan, contrary to the predecessor's collective bargaining agreement. The Board. in reaching the conclusion that the new employer was not a successor noted : (1) the predecessor's employees represented only 20% (10 out of 50) of the new employer's employees engaged in basically the same jobs; and (2) the new employer did not purchase a business, but purchased for the addition to its already existing business a small part of the predecessor's operations. If the Board follows its logic in the Northwest Galvanizing case, it will find that even if Boeing absorbed all one thousand of the TWA employees in question, the new (TWA) employees will constitute less than 5% of the nationwide bargaining unit of 22,000 IAM represented Boeing employees, most of whom are performing work requiring skill substantially identical to that employed by the former TWA employees in the performance of their work. Furthermore, as in Northwest Galvanizing. Boeing is only assuming a small part of TWA's business with the intent of adding it to Boeing's existing business. Therefore, if the Board continues to follow this logic, the conclusion will be reached that Boeing is not a successor.
C. Accretion :
1. As noted previously, there are currently over 22,000 Boeing employees represented by the IAM in a nationwide bargaining unit. The additional 1,000 employees (some from TWA) should properly be treated as an accretion to the existing bargaining unit, particularly in view of the fact that both TWA employees and Boeing employees are covered by contracts with the IAM. The case most in point is Humble Oil and Refining Co., 153 NLRB 1361 (1965). A small fuel distributor, which was represented by the Teamsters, was purchased by Humble. The Humble employees were organized by the Industrial Employees Association in a statewide unit. Humble employed a majority of the predecessor's employees and treated them as an accretion to the bargaining unit. The Board
found that the employees became a part of the Humble-Industrial state wide bargaining unit. It further determined that because of the merger into Humble operations, the predecessor's employees cannot be considered an appropriate bargaining unit. Likewise, Boeing intends to merge the smaller “bargaining unit" (if in fact a portion of a nationwide TWA unit can be so described) into its nationwide IAM bargaining unit of 22,000 employees. This integration will be complete because the job families and job titles covering existing Boeing jobs are identical in content to the jobs to be performed by the former TWA employees among others, under the proposed Boeing-NASA services contract. The TWA employees were treated as an accretion to the existing TWA nationwide bargaining uait.
A like conclusion was reached in Sargent de company, 78 NLRB 918 (1948), wherein the Sargent bought a manufacturing plant in which the employees were represented by a union other than the one which represented the Sargent employees. The predecessor union sought to continue its bargaining representation of the predecessor's employees. The Board held that, as a result of accretion, Sargent did not succeed to the bargaining relationship. In concluding that there had been an accretion, the Board placed considerable emphasis on the integration of the predecessor's employees into the Sargent bargaining unit.
Further support for the application of thé "non-successor" conclusion and resulting accretion is found in L. B. Spear, 106 NLRB 687 (1953). Spear, which employed 160 employees, acquired Bauman, a company with 470 employees. Bauman had an existing collective bargaining agreement at the time of its purchase. After the merger, another labor organization which represented the 160 Spear employees, sought a company-wide unit consisting of both the Spear and former Bauman employees. The union representing the former Bauman employees took the position that its contract on behalf of the 470 Bauman employees (most of whom were retained by Spear) was binding on Spear as a successor. The Board refused to accept this position, noting that the merger was viewed as a new operation-a new "employing industry." Note that this result was reached even though: (1) nearly 100% of the predecessor's employees were employed by the successor; (2) former Bauman employees constituted at least 70% of the consolidated work force, and (3) the corporation maintained separate identities for accounting and economy reasons. Applying the reasoning of the Spear case to Boeing, the only conclusion which could be reached is that Boeing is not a successor and that there was an accretion.
NOVEMBER 23, 1970.: JOHN F. KENNEDY SPACE CENTER, NASA, Procurement Ofice AD-PRO-23, Kennedy Space Center, Fla. (Attention William M. Lohse, contracting officer.) COMPTROLLER GENERAL OF THE UNITED STATES, Washington, D.C.
Pursuant to NASA procurement regulation 2.407-8, Trans World Airlines, Inc., does hereby protest the prospective award to the Boeing Co. of a contract to provide installation and technical support services at John F. Kennedy Space Center on the grounds that the anticipated first year cost of the contemplated contract with Boeing estimated by NASA at $20 million when compared with the first year cost of TWA's bid, namely approximately $24 million, shows either that TWA and Boeing were not bidding on the same work and that one or both bids were, therefore, non-responsive, or that an award is being contemplated principally on anticipated differences in wages to be paid individual non-management workers; an award on the latter basis is not advantageous to the government and cannot lawfully be made in that the purchasing power of the government would thereby be used as an instrument to deprive organized employees of an incumbent contractor of the wages and other benefits gained through collective bargaining, a result contrary to national labor policy and Government procurement policy.
TRANS WORLD AIRLINES, INC.,
Senior Vice President."
COMPTROLLER GENERAL OF THE UNITED STATES,
Washington, D.C., February 26, 1971. TRANS WORLD AIRLINES, INC., New York, N.Y. (Attention Raymond R. Fletcher, Jr., Esq., vice president and general counsel.)
GENTLEMEN: We refer to your protest by telegram dated November 25, 1970, as supplemented by letters dated December 11, 1970, and January 21, 1971, against the selection by the National Aeronautics and Space Administration (NASA) of The Boeing Company (Boeing) for negotiation of a cost-plus-awardfee type contract for the performance at Kennedy Space Center (KSC) of installation support services, including base support work which you are currently providing under a contract which expires on March 31, 1971. You also protest consideration of a proposal submitted by Pan American World Airways, Incorporated (Pan Am), under the same procurement solicitation, Request for Proposals (RFP) 2-370-0, dated June 30, 1970.
As discussed in more detail below, it is your position that, as a matter of law in the field of labor relations and as is implied by preproposal advice given by NASA to prospective offerors, the selected contractor will be bound by the “successor employer" doctrine as set forth in various decisions of the courts and in related orders issued by the National Labor Relations Board (NLRB), to abide by the material terms of the current collective bargaining agreements with your incumbent union employees. To be responsive to the RFP, therefore, you contend that each offeror must consent to comply with the "successor employer" doctrine.
In line with the foregoing, you assert that Boeing and Pan Am were not responsive to the RFP since each of them proposed union arrangements in conflict with the "successor employer" doctrine. You therefore request that NASA be directed to reject the proposals submitted by Boeing and Pan Am and to make award to a responsive offeror like yourself, who is willing to continue to abide by your existing union bargaining agreements covering the incumbent employees.
In the alternative you assert that, if it is NASA's belief the issue whether the "successor employer" doctrine applies to the procurement is a question of law, resolicitation of the procurement is in order on the basis that the solicitation is fatally defective because NASA did not so advise prospective offerors before the submission of proposals. You further state that NASA now seems to rely on a legal opinion which it did not obtain until December 14, 1970, or after you had filed your protest and after a majority of the offerors had already committed themselves to application of the "successor employer" doctrine, and that the effect of such procedures has been not only to deprive the Government of its right to secure bids capable of just comparison but to deprive you of an opportunity to renegotiate your existing bargaining agreements with your employees [with an apparent view to securing lower wage rates) and thereby be competitive with the other offerors.
Performance of the specified services was required for an initial period of one year commencing February 1, 1971, with four extensions of one year each to be available at the Government's option under contract, the first of which was required to be firm priced. Basic proposals were required to be based upon fixed staffing specified in the RFP, but alternate proposals were solicited based upon organization and staffing other than as indicated in the RFP.
Article VI of Appendix III of the proposed contract stated a requirement for continuity of services necessitating phase-in training of the successor contractor during the last 60 days of the contract term and cooperation of both contractors respecting release of employees to the new contractor, among other factors. Article XXXII, which governed the phase-in of the functions to be assumed under the proposed contract from three incumbent contractors, required that allowance for phase-in be made in the cost and fee negotiated under the proposed contract subject to adjustment in the event the functions in question are not fully operational and completely staffed as agreed during negotiations by the dates scheduled in Article XXXII.
Article XXIV, entitled “Service Contract Act of 1965," informed offerors of the issuance of a wage determination by the Department of Labor establishing a minimum hourly wage of $2.45 per hour, including fringe benefits for janitors. porters, and cleaners.
Paragraph 2.c., Section 1, Part B, Appendix II, of the RFP, amended, relating to management structure, reads as follows:
Explain your understanding of the impact, if any, that the collective bargaining agreements covering incumbent employees will have on your assuming the contract responsibilities. Discuss which of your employees, if any, will be covered by collective bargaining agreements and indicate which, if any, supervisory personnel are included.
Prospective offerors are advised that most employees of the incumbent contractors are represented by IAM and that the labor agreements in force are as follows:
IAM stands for the International Association of Machinists; UPGWA for the United Plant Guard Workers of America ; and TWU for the Transport Workers Union of America. IBT, which is discussed in connection with Pan Am's proposal, stands for the International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America.
Paragraph 11 of Appendix I, Part B, relating to evaluation of proposals, informed prospective offerors that failure of a proposal to be accepted for award would not necessarily reflect any deficiencies but would mean only that another proposal was considered to be more advantageous to the Government. The major, factors to be considered in the proposal evaluation and their relative order of importance were (a) Technical Work Plans; (b) Reasonableness of Cost and Fee; (c) Experience and Past Performance; (d) Key Personnel; and (e) Management Structure. Offerors were advised that factor (a) would have slightly more weight than factor (b); that factors (c), (d), and (e) would be considered to have approximately the same importance; and that the aggregate of factors (c), (d), and (e) would be approximately the weight of factor (b). August 19, 1970, was specified as the closing date for submission of proposals.
On July 21 and 22, 1970, prospective offerors were provided a tour of the KSC facilities which would be involved in the performance of the required services, and a preproposal conference was held, during which various questions relating to the contract were raised by participants in the conference and were answered by NASA. Subsequently, NASA distributed to interested parties a list of the questions and answers with a letter dated July 31. Question 56 and NASA's answer, with which your protest is concerned to a great extent, read as follows:,
QUESTION 56:1. Is it NASA's opinion that successful bidders will be required to assume employee representation by incumbent unions?
2. (a) If the answer to Question 1 is 'yes,' is the basis for this opinion 'no significant change in work scope'? (b) If the answer to Question 1 is 'no,' is the basis for this opinion 'a significant change in work scope'?
3. If the answer to Question 1 is 'yes,' does NASA KSC plan to provide contents of the current union agreement as well as specific employee rates and benefits costs to enable bidders to submit competitive bids?
ANSWER: 1. The NLRB has held that when an employer assumes the operations of another employer without change in employees, jobs or methods, the successor-employer is obligated to bargain with the Union before changing wages and other conditions of employment. Under a recent series of cases, the NLRB has held that the successor-employer must assume the predecessor's collective bargaining agreement. It is NASA's position that the offerors make themselves familiar with the NLRB cases covering this issue namely, The William J. Burns International Detective Agency, Inc., 74 LRRM 1098; Chemrock Corp., 58 LRRM 1582; John Wiley & Sons vs. Livingston, U.S. Sup. Ct. 55 LRRM 2769.
2. The offeror will have to apply the NLRB's reasoning in the previously mentioned cases to the scope of the RFP in relation to method in which the work has been performed and to its own intended mode of operation.
3. It is not our policy to supply any offerors with any copies of labor agreements covering units of employees coming within the scope of the RFP.
By August 19, NASA had received basic proposals from seven companies including your company, Boeing and Pan Am. Boeing also submitted an alternate proposal covering a lesser number of employees than specified by NASA as required staffing. Only the basic Boeing proposal is involved in your protest.
Boeing proposed to recognize the bargaining representatives of the incumbent employees but not to assume your existing labor agreements. Instead, Boeing stated its intent to bring the incumbent IAJ employees of your firm under Boeing's company-wide labor agreement with Lodge 2061 of IAM, with which Boeing has had a very good relationship. This agreement covers employees at Boeing's main aircraft and aerospace manufacturing operation, as well as in the KSC area under Boeing's Apollo V stage contract, and the wage rates are considerably lower than the rates paid by your company to incumbent employees performing similar work.
The record indicates that Boeing will accept the "successor employer" doctrine with respect to the security employees currently represented by the UPGWA and the fire protection employees represented by the TWU, but proposes to subcontract the janitorial function. NASA's Industrial Relations Officer expressed the opinion that no major labor problems would seem to be associated with Boeing's basic proposal, but the alternate proposal, which proposed fewer employees, might give rise to a problem of convincing the IAM that a smaller number of employees was needed.
Pan Am proposed to operate under the Railway Labor Act (RIA), 44 Stat. 577, as amended, pursuant to which Pan Am has operated as a contractor for the Department of the Air Force at the nearby Air Force Eastern Test Range, Patrick Air Force Base, Florida. Pan Am considers itself not subject to NLRB and court decisions espousing the "successor employer" doctrine since Pan Am is an airline operation coming under the RLA and also views the incumbent employees as an accretion to existing bargaining units covering employees in Pan Am's overall company operations. These Pan Am bargaining units are represented by the TWU, the IBT, and the UPGWA, and all have been approved by the National Mediation Board (NMB) established under the RLA. (Under the "accretion" doctrine, the accreted incumbent employees would have no choice over whether they want to be included in Pan Am's existing bargaining units.) Pan Am, therefore, would endeavor to persuade the incumbent employee members of IAM to transfer to the TWU and the IBT and to accept reduced wage rates applicable under Pan Am's bargaining agreements with such units.
NASA's Industrial Relations Officer expressed doubt about the proposed Pan Am agreements with the TWU and IBT since they will involve a major turnover of collective bargaining representation of incumbent employees, which, upon challenge by IAM, may not stand up.
In this connection NASA refers to the "Jackass Flats" case, Pan American World Airways, Inc. v. United Brotherhood of Carpenters and Joiners of America, 324 F. 2d 217 (1963), involving the performance of preventive maintenance work by Pan Am at a nuclear research development station in the State of Nevada, which the court held had nothing to do with transportation by air or rail and was not within the application of the Railway Labor Act, and therefore the airline was not entitled to an injunction restraining the union from striking, picketing or otherwise interfering with the operation. NASA also mentions friction which has been experienced between TWA/Bendix and Pan Am employees because of the rivalry between IAM and TWU/IBT employees, the labor disputes ranging from petty harrassment to threat of work stoppage.
After initial consideration of all proposals, your proposal was ranked highest with Pan Am's proposal a close second and Boeing's basic proposal third. The two proposals which were ranked lowest were eliminated from the competitive range at this stage, and the respective offerors were so notified by letter dated September 18, 1970. The five remaining offerors were then invited to participate in oral discussions of their proposals with attention to be focused on 25 general questions relating to particular proposals. General question No. 18 asked each offeror to what extent labor agreements would be applicable to employees performing on the contract and to explain the types of units and unions involved in the proposal.
Discussions were conducted with the offerors from September 28 to October 1, inclusive, and each offeror was afforded an additional week to further revise or clarify its proposal(s) in light of the discussions. The cut-off date for all offerors