The Chrysler Corporation sold its marine engine division to the U.S. Marine Corporation (USM) on January 13, 1984. USM estimated, based on data provided by its marketing and manufacturing departments, that it would need a full complement of 396 workers on the job by June 1984. USM wanted to reopen the plant as quickly as possible and needed a skilled workforce to do so. It reopened the plant under changed terms and conditions of employment, with all 219 workers being former Chrysler employees. On January 30, 1984, it hired its last Chrysler employee, with its employee totals that day being 261 employees, 227 of whom had worked for Chrysler. Thirty-four Chrysler employees were not hired, although USM's total workforce ranged up to 323 workers through August 31, 1984. On January 25, when 222 of the 231 workers were former Chrysler employees, the union requested recognition. The request filtered up the organization, and figures on the number of former Chrysler workers hired in the rather disorganized hiring process that took place in January were compiled; this tally indicated to top management that as of January 30, 1984, 223 Chrysler workers had been hired. On January 31, 1984, Mr. Hoag, the general manager of the USM operation, changed the full complement projection from 396 to 460 workers, increasing the production schedules for engines by some 130 engines, with no justification.

In February, the union filed charges with the Board, claiming that USM had unlawfully refused to bargain and had discriminated against the 34 Chrysler employees it refused to hire. USM responded that it had no obligation to recognize the union because less than half of the 460 expected employees were former Chrysler employees.

Did USM have the right to change the terms and conditions of employment when it reopened the plant? Did it have an obligation to recognize and bargain with the union in late January? Was the failure to hire the 34 remaining Chrysler workers after January 31 a Section 8(a)(3) violation? Decide. [U.S. Marine Corp. v. NLRB, 944 F.2d 1305 (7th Cir.)]