All State FactorsDownload PDFNational Labor Relations Board - Board DecisionsSep 7, 1973205 N.L.R.B. 1122 (N.L.R.B. 1973) Copy Citation 1122 DECISIONS OF NATIONAL LABOR RELATIONS BOARD All State Factors , Secured Party in Possession of North Park Meat Company and Amalgamated Meat Cutters & Butcher Workmen of North America, Lo- cal 229, AFL-CIO. Case 21-CA-10810 September 7, 1973 DECISION AND ORDER BY MEMBERS JENKINS, KENNEDY, AND PENELLO On March 30, 1973, Administrative Law Judge James T. Barker issued the attached Decision in this proceeding. Thereafter, Respondent and the General Counsel filed limited exceptions and supporting briefs. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the Na- tional Labor Relations Board has delegated its au- thority in this proceeding to a three-member panel. The Board has considered the record and the at- tached Decision in light of the exceptions and briefs and has decided to affirm the rulings, findings,' and conclusions of the Administrative Law Judge and to adopt his recommended Order, as herein modified.' ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Rela- tions Board adopts as its Order the recommended Order of the Administrative Law Judge and hereby orders that Respondent, All State Factors, Secured Party in Possession of North Park Meat Company, San Diego, California, its officers, agents, successors, and assigns, shall take the action set forth in the said recommended Order. ' In his Decision the Administrative Law Judge states that the effective period of the contract between North Park and the Union was from October 1, 1972, until October 1, 1973 As the record shows, the effective date of the contract began on October 1, 1970. This inadvertance is hereby corrected 2 We note and hereby correct the Administrative Law Judge 's inadvertent use of the word "for" rather than the word "to" in the first sentence of the fourth paragraph of that section of his Decision entitled "The Remedy " DECISION STATEMENT OF THE CASE JAMES T. BARKER, Administrative Law Judge: This matter was heard at San Diego, California, on December 19, 1972, pursuant to a complaint and notice of hearing issued on May 12, 1972, by the Acting Regional Director of the Na- tional Labor Relations Board for Region 21, and an amend- ment to the complaint issued by the Regional Director of Region 21 on November 7, 1972. The complaint , as amend- ed, arose from a charge filed on March 27, 1972, by Amalga- mated Meat Cutters & Butcher Workmen of North Ameri- ca, Local 229, AFL-CIO, hereinafter called the Union. The amended complaint alleges violations of Section 8(a)(1) and (5) of the National Labor Relations Act, as amended, here- inafter called the Act. On February 6, 1973, the parties timely filed briefs with me. Upon the entire record in this case, and upon my observa- tion of the witnesses and consideration of the briefs of the parties, I make the following: FINDINGS OF FACT I JURISDICTIONAL FACTS North Park Meat Company, Inc., hereinafter called North Park, is a California corporation with a principal office at San Diego, California. Prior to June 24, 1971, North Park operated a wholesale and retail meat company in San Diego. All State Factors, hereinafter called All State or Respon- dent, has been at all material times a commercial finance company engaged in the factoring of accounts receivable. In July 1970, a factor relationship between All State and North Park was established and representatives of the respective parties executed a financing statement filed pursuant to the California Uniform Commercial Code. The statement was duly filed with the Secretary of State of the State of Califor- nia on July 3, 1970. By virtue of the transaction, All State received a security interest in the entire assets of North Park, including, inter alia, accounts receivable, inventories, materials, fixtures, and machinery presently or prospective- ly to be owned, held, acquired by, or payable to North Park, then owned and managed by John Delfino. On June 24, 1971, pursuant to the aforesaid security inter- est which had remained intact, All State took possession of the assets of North Park to protect North Park's continued indebtedness to All State. During the 12-month period commencing April 1970, North Park purchased from Swift & Co. beef valued in excess of $200,000 which had been shipped by Swift directly from Tolleson, Arizona, to North Park at its San Diego facility; and during the same period of time North Park purchased from Swift & Co. pork valued at approximately $150,000, which pork products were shipped from Sioux City, Iowa, to San Diego, California. Thereafter, from June 1971 until April 1972, Swift & Co. made sales to All State of pork valued at approximately $91,000, which pork prod- ucts were shipped by Swift & Co. from its Sioux City, Iowa, establishment to the North Park plant location in San Die- go, California. During the period July 1970 to September 10, 1971, the North Park facility was operated as a retail and wholesale establishment. The wholesale phase of the operation ac- counted for more than 50 percent of the total volume of business of North Park.' Upon the basis of the foregoing, I find that the operations of North Park and Respondent fall within the discretionary i The foregoing is based upon a composite of the credited testimony of Leon Mansfield, Richard Claus, and documentary evidence of record 205 NLRB No. 131 ALL STATE FACTORS 1123 jurisdictional standards of the National Labor Relations Board, and that it furthers the purposes and policies of the Act to assert jurisdiction over Respondent herein. Siemons Mailing Service, 122 NLRB 81; Standard Plumbing and Heating, Inc., 185 NLRB 444; E. Paturzo, Bro. & Son, Inc., 114 NLRB 1161. II THE LABOR ORGANIZATION INVOLVED Amalgamated Meat Cutters & Butcher Workmen of North America , Local 229, AFL-CIO, is a labor organiza- tion within the meaning of Section 2(5) of the Act. III THE ALLEGED UNFAIR LABOR PRACTICES A. The Issues The principal issues in this case are whether Respondent is a successor employer to North Park , whether Respondent may be found to have assumed the terms of the North Park collective-bargaining agreement with the Union to the ex- tent warranting a finding that , viewed in light of the deci- sion in N.L.R.B. v. Burns International Security Service, Inc., 406 U.S. 272 ( 1972), Respondent is bound by the terms of the collective-bargaining agreement between North Park and the Union ; and whether Respondent in violation of Section 8(a)(5) and ( 1) withdrew recognition from the Union , unilaterally changed to benefits and working condi- tions of unit employees , and refused to recognize and bar- gain collectively with the Union as the exclusive bargaining representative of Respondent's employees concerning the effects of the March 17, 1972, plant closure upon unit em- ployees. B. Pertinent Facts 1. Background facts At all pertinent times prior to June 24, 1971, John Delfino owned and managed North Park. As found above and as discussed more fully below, until September 1971, North Park engaged in the wholesale and retail meat business at its San Diego location. In October 1970, John Delfino, on behalf of North Park, became signatory to a collective- bargaining agreement between the Union and the Jobbing Butchers of San Diego County. The agreement, entitled the Jobber's Agreement, by its terms, was to be effective from October 1, 1972, to October 1, 1973. The agreement cov- ered, inter alia , job classifications in the wholesale phase of North Park's operation in which employees of North Park were at pertinent times employed. In accordance with the union-security provisions of the Jobber's Agreement, the North Park personnel employed in the wholesale operation were represented by the Union. The agreement provided for referrals through the Union's hiring hall. It also contained a schedule of wages, augmented by a cost-of-living clause, and vacation, health and welfare, and pension benefit provi- sions. Article XIV of the agreement, entitled "Change of Own- ership," provides 2 in pertinent part as follows: (a) In the event of a change of ownership of the operation, whether it be voluntary, involuntary, or by operation of law, the Employer shall immediately pay off all obligations, including accumulated wages, pro- rata of earned vacations, sick and accident benefits, accumulated prior to the date of the change of owner- ship. (b) If any owner or Employer hereunder sells, leases, or transfers his business, or any part thereof, whether voluntary, involuntary, or by operation of law, it shall be his obligation to advise the successor, lessee or trans- feree of the existence of this Agreement and such suc- cessor, lessee or transferee shall be bound fully by the terms of this Agreement in effect at the time of the sale, lease or transfer ; and in the event the seller or transfer- rer fails to pay his obligations hereunder, shall assume all obligations of this Agreement in the place and stead of the Employer signatory thereto the same as if he had been the owner or Employer from the beginning. As delineated above, on June 24, 1971, Respondent took possession of the assets of North Park pursuant to the rights, obligations, limitations, and procedures governed and con- trolled by the California Commercial Code which, at section 9504 thereof, provides, inter aha: (1) A secured party after default may sell, lease, or otherwise dispose of any or all of the collateral in its then condition or following any commercially reason- able preparation or processing .. . (2) If the security interest secures an indebtedness, the secured party must account to the debtor for any surplus, and, unless otherwise agreed, the debtor is lia- ble for any deficiency. But if the underlying transaction was a sale of accounts, contract rights, or chattel paper, the debtor is entitled to any surplus or is liable for any deficiency only if the security agreement so provides. (3) A sale or release of collateral may be made by a unit or in parcels, at wholesale or retail and at any time and place and on any terms, provided that the secured party acts in good faith and in a commercially reason- able manner. Section 1201.37 of the Uniform Commercial Code pro- vides: A security interest means an interest in personal pro- perty or fixtures which secures payment or perfor- mance of an obligation . . . the term also includes any interest of a buyer of accounts, chattel paper or con- tract rights. .. . 2 On October 30, 1970, John Delfino had executed an interim agreement which incorporated the terms of a retail distribution agreement about to expire In substance this agreement with the Union covered terms and condi- tions of employment of employees working in the retail phase of North Park's operations The retail distribution agreement contained a change of owner- ship clause substantively the equivalent of that contained in the Jobber's Agreement The General Counsel does not contend that All State, the Re- spondent herein, violated any provisions of the retail agreement 1124 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Upon taking possession of the North Park facility, Re- spondent posted the following notice on the North Park premises: Notice of possession to all interested parties: These premises and all the assets of North Park Meat Compa- ny, Incorporated, and John Delfino, are now in the possession of All State Factors pursuant to the obliga- tions owed to All State Factors by North Park Meat Company, Incorporated, and John Delfino and that security interest is given to secure their obligations. Authority for this notice refer to UCC-l, file S69079- 500 and 70063262. For further information, contact All State Factors, 935C Street, San Diego, Richard Claus at 233-7681. At all pertinent times after June 24, the notice remained posted. At a time proximate to the posting of the notice, Archie Jacobs, president of Respondent, spoke with some employ- ees at the North Park premises and informed them that Delfino "was in financial trouble" and All State was "trying to help him out." 2. The alleged unlawful conduct a. The "successorship" facts When it took possession of the facility, Respondent com- menced the payment of wages to employees and made ap- propriate tax and unemployment insurance deductions. The checks covering wages were drawn upon the All State ac- count and the remittances made to the government for tax and insurance deductions were made under the All State tax number.3 Respondent took possession of North Park on June 24 with no intention to operate North Park as an entity under its own control and management. No consideration in the form of a fixed or stipulated sum of money passed between All State and North Park. Possession was taken in order to protect Respondent' s interest in the funds which it had advanced to North Park on accounts receivable. It was determined that the funds so advanced exceeded by more than $50,000 the value of North Park's physical assets and accounts receivable. After it assumed possession of North Park, Respondent undertook immediate and continuing ef- forts to obtain a purchaser of the North Park operation upon the assumption that the enterprise was more valuable as a going concern than as a liquidated one. Respondent was unsuccessful in obtaining a buyer for the properties and business.4 After Respondent assumed possession, John Delfino re- mained as manager and as the supervisor of the operation. All State continued to operate under its own business licen- ses. Frank Cappallo, a representative of Respondent, con- sulted and advised Delfino on a continuing and recurring basis throughout the pertinent times subsequent to June 24. 3 The foregoing is based upon the credited testimony of Richard Claus and Leon Mansfield 4 The foregoing is based upon the credited testimony of Richard Claus Archie Jacobs, president of All State, and Richard Claus, secretary-treasurer of All State, maintained continuing scrutiny of the North Park operations. After June 24, the operations continued from the same location under the same trade name and with the same equipment as had been used by North Park prior to June 24. No modifications were made in thejob categories employed or utilized in the opera- tions and the number of personnel remained approximately the same.5 The duties and the compensation of the employ- ee complement remained the same as before June 24, and employees continued to have use of the employee room at the North Park facility and to receive coffeebreaks.b b. The Union and Respondent consult Arthur Meyer, administrative assistant and recording secretary of the Union, suffered a heart attack in May and returned to work in July. By virtue of documents received from San Diego Wholesale Credit Men's Association dated July 2, 1971, Meyer first learned that Respondent had be- come "involved" in the operation of North Park? As a consequence, Meyer initiated a telephone call to Claus and inquired if All State was operating North Park. Claus an- swered in the affirmative and Meyer attempted to arrange a meeting for the purpose of discussing All State's obliga- tions under the collective-bargaining agreement between the Union and North Park. In this connection, Meyer in- formed Claus that the agreement rendered All State respon- sible as a successor under the contract. Claus was noncommittal and stated that Jacobs, who was out of the city at the time of the telephone conversation, would have to make a determination with respect to that matter. A meeting was arranged for the following week. Meyer met with Jacobs and Claus as scheduled. During the course of the meeting, Meyer pointed out the successor- ship clause in the Union's collective-bargaining agreement with North Park, and asserted that Respondent was respon- sible for fulfilling the terms of the agreement, including the obligation to pay the wages and the employee benefits. Meyer also asserted that Respondent was responsible for the payment of back wages and other obligations which had accrued with respect to employee benefits under the collec- tive-bargaining agreement. In this latter regard, Meyer not- ed that certain contributions to the health and welfare fund were due and owing and that Conrad Palladino, an employ- ee, was due vacation benefits for which he had not been compensated. Additionally, as the meeting progressed, Meyer attempted to delineate the identity and duties of the personnel employed in the operation. Respondent took the position that it was responsible for wages and contributions only from July 1, and thereafter. No understandings were 5 There appears to have been some turnover in personnel but the small complement employed by North Park prior to June 24, continued to be employed at the North Park facility for a substantial period of time after the June 24 date A large percentage of the original complement continued to be employed until operations ceased 6 The foregoing is based upon a consideration of the testimony of Richard Claus, Leon Mansfield, Paul Blair , and Clifford Glass i The documents in question purport to delineate the details of the creditor relationship between All State and North Park In the meantime , Ann Long, office manager of the firm serving as the administrator of the Union's pen- sion and benefit funds, received a copy of the same notice ALL STATE FACTORS 1125 reached during the course of the meeting and the parties agreed to meet at a subsequent time. Approximately 2 weeks later, Meyer met with Jacobs and Claus. This meeting, like the earlier one, dealt with the asserted successorship responsibilities of All State and its alleged obligation to satisfy delinquencies in payments to the health and welfare and pension trust funds. Additional- ly, during the course of the meeting, Meyer established that all of the nonclerical employees then working in the opera- tion were union members. c. Prevailing terms of employment At the time of the second meeting, Respondent was adhering to the wage scale contained in the collective-bar- gaining agreement between the Union and North Park and was timely making current contributions to the health and welfare and pension trust funds. Assurances were given Meyer that Respondent would continue to do so pros- pectively. However, during the course of the second meet- ing, no commitment was made by either Jacobs or Claus to make payments into the described funds covering accruals prior to July 1, 1971. Meyer did not request Respondent to sign a collective-bargaining agreement and no commitment to do so was made. On September 9, 1971, pursuant to the Union's request, Respondent compensated Palladino for vacation benefits which had accrued to him under the collective-bargaining agreement prior to the time Respondent took possession of the North Park facility. In mid-September, 1971, Respondent notified the Union that its retail operation was being discontinued and that the personnel employed in the retail phase of the operation would be transferred to the wholesale division with no loss of employment. Thereafter, by letter dated September 10, the administrator was advised by the Union of the discon- tinuation of the retail operations of North Park and the transfer of five designated employees to the "jobbing de- partment." Subsequently, the administrator billed Respon- dent for contributions due the trust funds under the terms of the Jobber's Agreement by virtue of the employment of the five transferred employees. Thereafter, by check dated January 7, 1972, Respondent remitted appropriate pay- ments to both trust funds.9 The checks covering the remit- tance bore an imprint describing All State as "Secured Party in Possession of North Park Meat Company, Inc." In the meantime, wage increases which were to become effective on October 15, 1971, as well as increased contribu- tions to the health and welfare and pension funds which were to take place during 1971, had been subjected to the wage and price freeze which was instituted by the Federal government under the Economic Stabilization Act of 1970. In due course, these increases were given clearance by the 8 The foregoing is based upon the testimony of Arthur Meyer considered in light of the testimony of Richard Claus and Ann Long and documentary evidence of record I do not credit Meyer's testimony to the extent it may infer that Respondent agreed to follow all the terms of the existing agree- ment 9 The parties through consultation made adjustments deemed appropriate in the billing as originally rendered and the agreed-upon amount was submit- ted by check of January 7 Government and pursuant to notice the employees received the retroactive wage increment due them under the collec- tive-bargaining agreement. Wages were prospectively paid at the higher contractual rate. Similarly, on February 2, 1972, Respondent remitted appropriate retroactive pay- ments to the pension trust fund. The last billing made by the administrator of the trust funds was one covering the period December 1, 1971, to February 29, 1972. Respondent made no remittance to the administrator pursuant to the billing and no further remit- tances to the trust funds were thereafter made.10 In the interim, Meyer had maintained a weekly contact with Respondent in an effort to police its adherence to wage scales and benefit provisions. He made continuing demands for full observance of wage and benefit standards and dur- ing the period of time in question undertook discussions with Respondent relating to vacation pay allegedly due a former employee, Hicks, whom the Respondent had termi- nated. Meyer further discussed with Respondent matters relating to the classification and wage scale paid employee Blair.' Moreover, during the early part of 1972, Meyer discussed with Respondent's representatives the possible layoff of certain of the employees in order to effectuate needed efficiencies and economies. Meyer objected to the proposed course of action. Respondent did not follow through with its plan. In the meantime, Clifford Glass, a member of the Union, was employed at the North Park facility through the aus- pices of the Union. 12 d. The operations cease On March 15, 1972, Frank Cappallo, Respondent's repre- sentative at the North Park premises, spoke to employees and informed them that the premises would be shut down for a period of time. He informed Glass that he would be laid off while the plant was closed down for a week to permit the premises to be remodeled. Thereafter the same af- ternoon, employees Palladino and Glass informed Meyer of the scheduled shutdown. Meyer had received conflicting rumors concerning the nature of the shutdown and was uncertain whether the plant was to be closed permanently or for a few days only. He consulted with counsel for the Union who on March 15 dispatched the following letter to Respondent: Please be advised that this office represents Butchers Local Union 229, the exclusive collective-bargaining representative of your employees. At approximately 3:00 p.m. on March 15, 1972, it came to the attention of Butchers Local 229 that you intend to close your shop at 5:00 p.m. on Friday, March 17, 1972, and lay off all employees currently represented by Butchers Local 229. On behalf of Butchers Local 229, this office hereby demands collective bargaining negotiations between yourselves and Butchers Local 229 with regard to your The foregoing is based upon the credited testimony of Ann Long and documentary evidence of record 11 Respondent disclaimed obligations with respect to each of the aforesaid employees and the issues remained unresolved The foregoing is based upon the credited testimony of Arthur Meyer. 1126 DECISIONS OF NATIONAL LABOR RELATIONS BOARD unilateral decision to close the shop and lay off existing employees. On behalf of Local 229, we further demand collective bargaining negotiations about the effect of this decision upon your employees. These demands are made upon you as a result of your obligation to bargain in good faith with Butchers Local 229 since you are, in fact, a successor Employer to North Park Meat Company. In order that negotiations may be completed prior to the closing of your plant on Friday, March 17, it is urgent that you communicate with this office on or before 12:00 noon, March 16, 1972, to arrange negotia- tions. If you have any questions in this regard, please feel free to communicate with the undersigned. The following day, March 16, Meyer went to the premises of North Park and spoke with Cappallo and Claus. Meyer was informed that the plant was going to be closed for a few days for refurbishment and would reopen. Meyer referred to the Union's letter of the previous day demanding negotia- tions . He was informed by Cappallo and Claus that there was nothing to negotiate "at the present time." Respondent did not comply with the Union's demand as contained in the letter of March 15. On March 17 the prem- ises were closed and did not thereafter reopen. On March 21, 1972, counsel for Respondent wrote in pertinent part as follows: Be advised that with reference to your letter of March 15, 1972, All State Factors rejects the demands as set forth in said letter and further rejects that they are under any obligation to even recognize any right in Butchers' local Union 229. All State, therefore, further rejects the allegation in your correspondence indicating that Butchers' Local Union 229 is the exclusive bar- gaining representative of any employee of All State and further rejects demand to conduct negotiations and further rejects any demand based upon any alleged allegation to bargain in finality, rejects any allegation that All State is the successor-employer of North Park Meat Company, or to any other company. Conclusions The General Counsel contends that Respondent is a suc- cessor employer to North Park and therefore had the obliga- tion under Section 8(a)(5) of the Act to recognize and bargain with the Union as the majority representative of the employees in the established bargaining unit which contin- ued to be appropriate after Respondent became North Park's successor. Included also in the obligation imposed upon Respondent by the Act, contends the General Coun- sel, was the duty to bargain in good faith with the Union before effectuating changes in the existing employee bene- fits and to have bargained with the Union concerning the effects upon unit employees of closing down the operation of the San Diego facility. Further, the General Counsel asserts that, in the factual circumstances of this case, Re- spondent must be found to have adopted the collective- bargaining agreement of its predecessor, North Park, and that under an appropriate application of the decision in N.L.R.B. v. Burns International Security Services, Inc., supra, must therefore be found to have become bound by the terms of the agreement. On the other hand, Respondent denies that it was the successor to North Park, and, in substance, contends that as a factor it was not an employer in the normal sense but essentially a foreclosing creditor with the legal obligation to liquidate the North Park property in a commercially reason- able manner. Alternatively, Respondent contends that, if it is found to have been a successor, no obligation to bargain collectively with the Union arose because no demand for bargaining was made upon Respondent by the Union until the North Park operation had been virtually liquidated in accordance with the obligations devolving upon Respon- dent under controlling state statutes. At the outset, I conclude and find that, whatever the identity of the employer of the employees comprising the work complement at the North Park facility, the Union at all material times remained the majority representative. This status is presumed from the existence of the collective- bargaining agreement, lawful on its face, to which the Union, together with North Park, was a signatory.13 No evidence was offered to cast doubt upon the majority status of the Union after Respondent emerged as a viable force in the North Park operation. Additionally, there is indepen- dent record support for a finding that the composition of the unit remained virtually unchanged after Respondent en- tered the picture and that at pertinent times was comprised of members of the Union.14 Proceeding from this background premise, I find that upon application of normal successorship criteria Respon- dent would be found to have been a successor employer to North Park.15 I reach this conclusion because the record evidence establishes that following June 24, 1971, when Re- spondent took possession of North Park, the trade name, location, nature, employee complement, hours of work, ba- sic working conditions, equipment, and facilities of the en- terprise remained virtually unchanged.16 Although the retail phase of the operation was discontinued some 3 months after Respondent entered upon the scene in an active capac- ity, the operation continued, as before , to be one engaged in the sale of meat products.17 It remains necessary, however, to resolve the merits of Respondent's contention that the nature of its factor rela- tionship to North Park relieved it from any collective-bar- gaining obligation which the Act would normally impose upon an employer. I find that this case is controlled by the decision of the Board in Martin White, Jr., Inc., 165 NLRB 520. In the cited case, an executor held a mandate under the will of the deceased president and sole stockholder of a 13 Barrington Plaza, 185 NLRB 962 , enfd in pertinent part sub nom N.L R B v. Tragniew, 470 F.2d 669 (C.A. 9, 1972). 14 The appropriate unit, of course , was "all employees of the employer" at the San Diego , California, facility 15 See Maintenance, Incorporated, 148 NLRB 1299, 1301, Bachrodt Chevro- let Co, 186 NLRB 1035. 16 John Delfino continued to function in the capacity of principal supervi- sor, although his former unfettered freedom to make managerial judgments was, to a degree , limited by the participation of representatives of Respon- dent in the day-to-day affairs of the enterprise. 17 Cf Atlantic Technical Services Corporation, 202 NLRB No. 13. ALL STATE FACTORS corporate entity to sell the capital stock of the deceased and to liquidate the assets of the corporation within one year from the deceased's death. In substance, the Board held that as the legal operator of the corporation the executor had the obligation to recognize and bargain with the certified in- cumbent union as the representative of the corporation's employees. Cogently applicable here was the Board's rejec- tion of the executor's contention that because of his special status vis-a-vis the corporation, and because of the immi- nence of dissolution of the corporation, the bargaining obli- gation normally assessible against a successor under the Act should not be imposed. In rejecting this contention it was stated in the Martin White decision, at page 525 thereof: Thus, so long as [the Respondent] was maintaining its corporate existence and the business enterprise, as was the case here, the Union continued to be the repre- sentative of its employees, and the operator of the en- terprise had the obligation to recognize and bargain with the Union as such representative. And, if dissolu- tion were to occur so that the employing entity would continue substantially unchanged, the purchaser would also be considered a successor and would have the same bargaining obligation as its predecessor... . I discern no significant basis for distinguishing the plight of the Respondent herein from that of the executor in Mar- tin White. Here, as in Martin White, the enterprise affected by the changed circumstances continued to operate in a viable fashion; on a parity with the executor in the cited case , Respondent herein, through its president and desig- nated agents, maintained efficacious scrutiny and oversight of the North Park business operation; and the interests and rights of the unit employees in a continuity of representa- tion rights was no less than in Martin White.is Upon the foregoing considerations, I find that the princi- ples underlying the decision in Martin White require rejec- tion of Respondent's contention that the normal successorship obligations under the Act should not be im- posed upon it.19 Specifically, I find Respondent was the successor to North Park with the bargaining obligations which normally attend that status. In delineating the extent and basis of this bargaining obligation, it is essential first to find, however, that, contrary to the General Counsel, Respondent may not be deemed under the rationale of the Burns decision to have adopted the terms of the North Park collective-bargaining agree- ment . The evidence establishes that, despite the Union's demands, Respondent pointedly refused to adopt the agree- ment, in toto, and no written instrument binding Respon- dent to the contracts' terms was ever executed? Upon an analysis of the record evidence, viewed in light of the thrust of the opinion of the Court in Burns, which, as I compre- is It is revealed in the record , as found, that Respondent sought diligently to dispose of the North Park business as a going concern and thus anticipated a continuity of operations also, albeit through a new and different owner. 19 See also Paul Stevens, Receiver of Carolina Scenic Stages , et at., 109 NLRB 86, 97-98 The General Counsel herein is proceeding upon a succes- sorship theory and does not contend that Respondent became the alter ego of North Park Accordingly , Stateside Shipyard and Marina, Inc., 178 NLRB 516 cited by the Charging Party is not controlling herein 2d Respondent's defense of the Statute of Frauds is inapposite to the facts of this case 1127 hend it, counsels utmost restraint in applying an adoption theory, absent clear and convincing evidence of consent, either actual or constructive, I am convinced, and find, that both parties, the Union as well as the Respondent, through separate but realistic appraisals of the balance of economic strength, reached a tacit understanding of the terms and conditions of employment by which the San Diego facility could and would be manned and operated under Respondent's direction. Thus, I find that Respondent adopted as its own the contractual wage scale that had theretofore been in effect, and agreed, prospectively, to con- tribute at contractual rates to the health or welfare and pension funds. These became terms and conditions in prac- tical and actual terms, through the good offices and active role of the Union as a viable voice and force acting on behalf of the employees as a group. For its part, Respondent applied so much of the North Park contract as was benefi- cial to it, refusing at the same time to apply other of its terms and 21 thus achieved stability in manpower, and continuity in operations, during a critical transitional phase. For its part, the Union, on behalf of the employees, achieved con- tinued employment, at contractual wage levels, continued insurance and pension coverage and time in which to search the labor market for better job prospects 22 Perhaps the employees hoped also for continuity of employment should the plant be purchased by an employer disposed to employ them. But all concerned knew that Respondent' s time on the scene was to be limited and a sale, or liquidation of some variety, was very much in the offing. While the Respondent, by its conduct, gave tacit, if not explicit, recognition to the Union, and negotiated with it on a variety of problems related to the transition, upon the record as a whole, I am unable to conclude that Respondent may be found to have observed the North Park agreement to an extent and in a manner sufficient to have become bound in a constructively consensual way to the terms of the agreement. I find nevertheless that under Section 8(d) and Section 8(a)(5) of the Act certain bargaining duties did devolve upon Respondent by reason of the relationship of the Re- spondent and the Union to the enterprise. Minimally, these duties included the obligation to recognize the Union as the majority representative of the unit of employees which re- mained intact after Respondent became the successor of North Park 23 Additionally, this obligation rendered it ne- cessary for Respondent pursuant to a valid demand of the nature here made by the Union on March 15 to have bar- gained in good faith with the union concerning the effects of the closing of the North Park facility upon unit employ- ees.24 Nothing in the duty imposed upon Respondent by state law to liquidate the business property in a commercial- 2i Some vacation benefits were paid Other claims were rejected. I am unable to conclude that Respondent agreed to include contractual vacation benefits as a term and condition of employment 22 It is noteworthy that in contending that Respondent was bound to all of the contract 's terms , the Union did not treaten economic action to support its demands. 23 See N L R.B v Burns International Security Services, Inc., supra This obligation had its genesis in the Union's continued and unchallenged majori- ty status in an appropriate unit employing personnel engaged in the functions attendant to the operation of the wholesale aspects of the North Park enter- pnse The absence of Board certification is not grounds for distinguishing Burns. See Barrington Plaza, supra 24 Transmanne Navigation , 170 NLRB 389. 1128 DECISIONS OF NATIONAL LABOR RELATIONS BOARD ly reasonable manner precluded Respondent from pursuing that course; nothing explains the misleading statements made to employees concerning the purpose and intended duration of the shutdown. The issuance of advance notice was clearly in order. None was given. I conclude and find that by ignoring the Union's March 15 bargaining demand, Respondent, in legal and practical terms , deprived the Union of its statutory right to recogni- tion and to negotiate in good faith on the bargainable issue of the effects of plant closure upon unit employees. Respondent also failed its bargaining duty by effecting unilateral changes in benefits which, I find, had become accepted terms and conditions of employment for the em- ployees which Respondent had chosen to utilize for contin- uing the operation of the enterprise 25 Thus, as found, the record reveals that not only did Respondent apply the wage scale provided by the collective-bargaining agreement, but, pursuant to union demand and after consultation it, made contributions at the contractual rate to the health and wel- fare and pension trust funds and continued those contribu- tions on a current basis through November 1972. Having made remittances to the funds at the behest of the bargain- ing representative of benefitted unit employees, and being fully aware that the Union was pressing for the maintenance of a parity of benefits, it became incumbent upon Respon- dent to treat with the Union before reaching a unilateral decision to discontinue the contributions to the trust funds. No specific prior bargaining demand was necessary for the right to be consulted was inherent in the nature of the relationship which had featured both tacit and overt aver- rals by the Union of recognition rights, recurring consulta- tion concerning adherence to employment terms, adjustment of benefits claims pursuant to union demand and use of the hiring auspices of the Union.26 Upon the basis of the foregoing findings of fact, and upon the entire record in this case, I make the following: CONCLUSIONS OF LAW 1. All State Factors, Secured Party in Possession of North Park Meat Company, and North Park Meat Compa- ny have been at times pertinent herein employers within the meaning of Section 2(2) of the Act. 2. All State Factors, Secured Party in Possession of North Park Meat Company is the successor employer to North Park Meat Company within the meaning of Section 2(2) of the Act and is an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 3. Amalgamated Meat Cutters & Butcher Workmen of North America, Local 299, AFL-CIO , is a labor organiza- tion within the meaning of Section 2(5) of the Act. 4. All employees employed at the San Diego, California, facility of Respondent constitute a unit appropriate for the purposes of collective bargaining within the meaning of 25 Respondent appears to have made no effort to reconstitute or revitalize the complement of employees and acquiesced in the retention of the comple- ment virtually unchanged 26 See N L R B v Katz, 369 U S 736 (1962), Smith Cabinet Manufacturing Companies, Inc, 147 NLRB 1506 See also Howard Johnson Company, 198 NLRB No 98, Good Foods Manufacturing, 200 NLRB No 86 Section 9(b) of the Act. 5. At all times since June 24, 1971, the Union has been the majority collective bargaining representative of the em- ployees in the above-described appropriate collective-bar- gaining unit. 6. On or about October 1, 1970, North Park entered into a collective-bargaining agreement with the Union whereby North Park agreed to recognize the Union as the collective- bargaining representative of all employees employed by it, and, inter aha, agreed to pay certain wage rates and further agreed to make contribution to the San Diego and Imperial Counties Butchers' and Food Employers' Pension and Health and Welfare Trust Funds pursuant to specified for- mulae. 7. On and after June 24, 1971, Respondent, by its con- duct, including acquiescence in the Union's demands, adopted prevailing contractual wage rates as its own and agreed to make, and did make submissions of contributions to the health and welfare and pension trust funds described above, according to the formulae and the aforesaid con- tract. 8. On or about January 7, 1972, Respondent unilaterally discontinued making contributions to the health and wel- fare and pension trust funds, this in contravention of the terms which through practice and usage it had established as terms and conditions of employment of its employees. 9. On or about March 15, 1972, Respondent failed and refused to comply with the Union's request that it bargain in good faith with the Union as the collective-bargaining representative of Respondent's employees, concerning the effeect of the Respondent's decision to close its business and lay off unit employees. 10. On March 17, 1972, Respondent, without engaging in collective bargaining with the Union closed its San Diego, California, facility and laid off all employees in the collec- tive-bargaining unit represented by the Union. 11. By failing and refusing since January 7, 1972, to make contributions to the health and welfare pension trust funds covering unit employees; by failing to honor the March 15, 1972, request of the Union to engage in collective bargain- ing with it concerning the effects of its planned March 17, 1972, closure of the plant and layoff of unit personnel; by effectuating the plant closure and layoff of unit employees represented by the unit without engaging in collective bar- gaining with the Union; and by effectively withdrawing recognition from the Union, the Respondent has engaged in unfair labor practices within the meaning of Section 8(a)(5) and (1) of the Act. 12. The aforesaid unfair labor practices are unfair labor practices affecting commerce within the meaning of Section 2(6) and (7) of the Act. THE REMEDY Having found that Respondent has engaged in unfair labor practices in violation of Section 8(a)(5) and (1) of the Act, I shall recommend that it cease and desist therefrom and take certain affirmative action designed to effectuate the policies of the Act. Having found that Respondent failed and refused to comply with the Union's March 15, 1972, demand to bar- ALL STATE FACTORS 1129 gain concerning the effect upon unit employees of closing the San Diego facility, and the consequent layoff of unit employees, I shall order that Respondent cease and desist from refusing to recognize and bargain collectively with the Union as the exclusive collective-bargaining representatives of employees in the unit hereinabove found appropriate, with respect to the economic effects upon unit employees of the above-described actions, and, upon request, bargain col- lectively with the Union with respect to the economic effects of the plant closure and consequent layoff of unit employ- ees, and if any understanding is reached, embody such un- derstanding in a signed agreement. I shall further order Respondent to make whole all em- ployees who were laid off by virtue of the unilateral decision of Respondent to close the plant on March 17, 1972, by payment to said employees at their normal rates of pay in effeect on March 15, from 5 days after the date of this Decision until the occurrence of the earliest of the following conditions: (1) The date Respondent bargains for agreement with the Union on those subjects pertaining to the effects on unit employees of the closing of the San Diego, California prem- ises; (2) a bona fide impasse in bargaining; (3) the failure of the Union to request bargaining within 5 days of this Decision, or to commence negotiations within 5 days of the Respondent's notice of its desire to bargain with the Union; or (4) the subsequent failure of the Union to bargain in good faith. In no event shall the amounts to be paid the employ- ees be less than the amounts the employees would have earned as wages during a 2-week period of employment; nor shall the sum paid to any of the employees exceed the amount he would have earned as wages from March 17, 1972, to the date he secured equivalent employment else- where. See Royal Plating and Polishing Co., Inc., 160 NLRB 990, and Transmarme Navigation, 170 NLRB 389. Said sums shall be computed in accordance with the formula set forth in F. W. Woolworth Company, 90 NLRB 289, together with interest at the rate of 6 percent per annum as rovided in Isis Plumbing & Heating Co., 138 NLRB 716.2f I shall further order Respondent to make all contribu- tions due and owing to the administrator of the San Diego and Imperial Counties Butchers' and Food Employers' Pen- sion and Health and Welfare Trust Funds as would be required by full observance of the formulae it adopted as a term of employment and which was given application by Respondent in making remittances to the administrator of the trust funds, the amount of the remittances here required to be ascertained in light of individual employee backpay entitlement as determined through an application of the make whole provisions above set forth. 27 1 have considered the fact that the employees were at all times aware that Respondent was a creditor in possession of the business, and I presume knowledge on the part of the employees of Respondent's intentions to sell the business as a going enterprise Thus, the employees may well have as- sumed a known risk in continuing their employment in the face of the potentialities implicit in the aforesaid circumstance However, considering the fact that Respondent appears intentionally to have mislead the employees concerning the purposes of the closure and considering further the absence of any prior declaration of an impending , imminent shutdown of the opera- tions, I shall not depart from the remedy applied by the Board in Transmanne and Royal Plating, cited above Upon the foregoing findings of fact, conclusion of law, and the entire record, and pursuant to Section 10(c) of the Act, I hereby issue the following recommended: ORDER 28 Respondent, All States Factors, Secured Party in Posses- sion of North Park Meat Company, its officers, agents, successors, and assigns, shall: 1. Cease and desist from: (a) Refusing to bargain, upon request, with Amalgamat- ed Meat Cutters & Butcher Workmen of North America, Local 229, AFL-CIO, as the representative of all of its employees at its San Diego, California facility. (b) Effecting changes in preexisting employment benefits and terms and conditions of employment without consult- ing the statutory representative of its employees. (c) Withdrawing recognition from, or failing and refus- ing to recognize, Amalgamated Meat Cutters & Butcher Workmen of North America, Local 229, AFL-CIO, as the statutory representative of its employees. (d) In any like or related manner, interfering with, re- straining, or coercing its employees in the exercise of their rights to self-organization, to form, join or assist the above- named union or any other labor organization, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection, or to refrain from any or all such activities. 2. Take the following affirmative action which is deemed necessary to effectuate the policies of the Act: (a) Upon request, bargain with the above-named Union as the exclusive representative of the employees in the unit defined above with respect to the effect upon unit employ- ees of the decision to close the San Diego, California, facili- ty, and reduce to writing any agreement reached as a result of such bargaining. (b) In the manner and to the extent set forth in the sec- tion of this decision entitled "The Remedy" make whole the employees of the San Diego, California, facility for any loss of earnings they may have suffered as a result of the closing of the San Diego, California, facility. (c) In the manner and to the extent provided in the sec- tion of this decision entitled "The Remedy" make all re- quired contributions into the San Diego and Imperial County Butchers' and Food Employers' Pension , Health and Welfare Trust Funds. (d) Preserve and, upon request, make available to the National Labor Relations Board or its agent , for examina- tion and copying, all payroll records, social security pay- ments and records, timecards, personnel records and reports and all other records necessary or useful in checking compliance is Ordered. (e) Mail an exact copy of the notice attached hereto and 28 In the event no exceptions are filed as provided by Section 102.46 of the Rules and Regulations of the National Labor Relations Board, the findings, conclusions , and recommended Order herein shall, as provided in Section 102 48 of the Rules and Regulations, be adopted by the Board and become its findings, conclusions, and order, and all objections thereto shall be deemed waived for all purposes 1130 DECISIONS OF NATIONAL LABOR RELATIONS BOARD marked "Appendix" 29 to Amalgamated Meat Cutters & Butcher Workmen of North America, Local 229, AFL- CIO, and to all individuals who on March 15, 1972, were employees under the Act at their San Diego, California, facility. Copies of said notice, to be furnished by the Re- gional Director for Region 21, after being duly signed by its authorized representative, shall be mailed immediately upon receipt thereof as herein directed. (f) Notify the Regional Director of the National Labor Relations Board, in writing, within 20 days from the date of the receipt of this order, what steps the Respondent has taken to comply herewith. APPENDIX NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government WE WILL, upon request, bargain collectively with Am- algamated Meat Cutters & Butcher Workmen of North America, Local 229, AFL-CIO, as the majority repre- sentative of all of our employees at our San Diego, California, facility, now closed, concerning the effect upon those employees of our closing of the facility, and 29 In the event that the Board 's Order is enforced by a Judgment of a United States Court of Appeals, the words in the notice reading "Posted by Order of the National Labor Relations Board" shall be changed to read "Posted Pursuant to a Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board " reduce to writing to any agreement reached as a result of such bargaining. WE WILL pay those employees who were employed on March 15, 1972, at the San Diego, California, facility, their normal wages for a period required by a decision of an Administrative Law Judge of the National Labor Relations Board. WE WILL make all contributions due and owing to the administrator of the San Diego and Imperial County Butchers' and Food Employers' Pension and Health and Welfare Trust Funds as required by a Decision of an Administrative Law Judge of the National Labor Relations Board. Dated By ALL STATE FACTORS, SECURED PARTY IN POSSESSION OF NORTH PARK MEAT COMPANY (Employer) (Representative ) (Title) This is an official notice and must not be defaced by anyone. This notice must remain posted for 60 consecutive days from the date of posting and must not be altered, defaced, or covered by any other material. Any questions concerning this notice or compliance with its provisions may be direct- ed to the Board's Office, Eastern Columbia Building, 849 South Broadway, Los Angeles, California 90014, Telephone 213-688-5229. Copy with citationCopy as parenthetical citation