Eklund's Sweden House Inn, Inc.

National Labor Relations Board - Board Decisions

May 2, 1973

203 N.L.R.B. 413 (N.L.R.B. 1973)

EKLUND'S SWEDEN HOUSE INN
Eklund 's Sweden House Inn, Inc . and Hotel & Restau-
rant Employees and Bartenders International Union,
Local 477 (AFL-CIO). Case 38-CA-1543
May 2, 1973
DECISION AND ORDER
BY CHAIRMAN MILLER AND MEMBERS FANNING AND
JENKINS
On December 29, 1972, Administrative Law Judge
Thomas F. Maher issued the attached Decision in this
proceeding. Thereafter, the Respondent filed excep-
tions and a supporting brief and the General Counsel
filed a brief in support of the Administrative Law
Judge's Decision.'
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,2 and
conclusions of the Administrative Law Judge and to
adopt his recommended Order.
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, Eklund's Sweden House Inn,
Inc., Rockford, Illinois, its officers, agents, successors,
and assigns, shall take the action set forth in the rec-
ommended Order.
' The Respondent 's request for oral argument is denied since , in our opin-
ion, the record , including the transcript , exhibits , and briefs, adequately
presents the issues and positions of the parties.
2 We hereby correct the Administrative Law Judge's inadvertent error in
the section of his Decision entitled "The Nature of the Respondent 's Busi-
ness" where he referred to the Respondent 's place of business as Rockville,
rather than Rockford. Illinois
The Respondent has excepted to certain credibility findings made by the
Administrative Law Judge . It is the Board 's established policy not to overrule
an Administrative Law Judge's resolutions with respect to credibility unless
the clear preponderance of all of the relevant evidence convinces us that the
resolutions were incorrect Standard Dry Wall Products, Inc, 91 NLRB 544,
enfd . 188 F 2d 363 (C A 3). We have carefully examined the record and find
no basis for reversing his findings
DECISION
STATEMENT OF THE CASE
THOMAS F . MAHER , Administrative Law Judge: Upon a
413
charge and an amendment thereto filed on August 9 and 30,
1972, respectively, by Hotel & Restaurant Employees and
Bartenders International Union, Local 477 (AFL-CIO),
herein called the Union , against Eklund 's Sweden House
Inn, Inc., Respondent herein, the Officer In Charge of Sub-
region 38 of the National Labor Relations Board , herein
called the Board, issued a complaint on behalf of the Gener-
al Counsel of the Board on August 31, 1972, alleging viola-
tions of Section 8(a)(5) and (1) of the National Labor
Relations Act, as amended (29 U.S.C. Sec. 151, et seq. )
herein called the Act. In its duly filed answer Respondent,
while admitting certain allegations of the complaint , denied
the commission of any unfair labor practice.
Pursuant to notice a trial was held before me in Rockford,
Illinois , where all parties were present , represented by coun-
sel, and afforded full opportunity to present evidence, cross-
examine witnesses , present oral argument, and file briefs
with me. Briefs were filed by Respondent and the General
Counsel on November 1, 1972. Thereafter, pursuant to a
telegraphic order issued by me, the hearing was reopened
for the purpose of receiving additional testimony with re-
spect to the business of the Respondent as it relates to the
Board 's jurisdiction in this matter.
Upon consideration of the entire record, including the
briefs filed with me, and specifically upon my observation
of each witness appearing before me,' I make the following:
FINDINGS OF FACT AND
CONCLUSIONS OF LAW
1. THE NATURE OF RESPONDENT'S BUSINESS
Eklund 's Sweden House Inn, Inc., Respondent herein, is
an Illinois corporation , with its office and principal place of
business located in Rockville , Illinois , where it is engaged in
the operation of a motel doing business under the name of
Sweden House Lodge, herein called Sweden House.
On or about June 1, 1972, Respondent purchased a facili-
ty consisting of a motel and a cocktail lounge operating
under the name of Albert Pick Motel and herein referred to
as the Pick facility. The details of this purchase will be
considered more fully herein insofar as it relates to the
principal issue in the case.
During the past 12-month period Respondent's Sweden
House facility had a gross volume of business of $443,763
derived from transient occupants of its motel and its restau-
rant facility.
During the annual period ending December 3, 1971, the
Albert Pick Motel at Rockford, Illinois , a facility owned
and operated by Pick Hotels Corporation, a national motel
chain, had a gross volume of business of $348,943, derived
from room rentals to transient occupants of its motel facili-
ties, its recently closed restaurant, and service station.
' Bishop and Malco, Inc, 159 NLRB 1159, 1161.
203 NLRB No. 56
414 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Upon the foregoing and upon Respondent's specific stip-
ulation,' I conclude and find it to be an employer engaged
in commerce within the meaning of Section 2(6) and (7) of
the Act.
11 THE LABOR ORGANIZATION INVOLVED
It is admitted by the parties and I accordingly conclude
and find that Hotel & Restaurant Employees and Barten-
ders International Union , Local 477 (AFL-CIO), is a labor
organization within the meaning of Section 2(5) of the Act.
III THE UNFAIR LABOR PRACTICES
A. Facts
On or about June 1, 1972, after extensive negotiations,
Respondent purchased the motel facilities known as the
Albert Pick Motel located in the immediate vicinity of
Respondent's original motel facility.
Pursuant to the terms of the agreement the purchased
facility, consisting of 118 motel rooms, retained the right to
its identity as Albert Pick Motel until January 1, 1973. A
cocktail lounge, previously used as a restaurant by the Pick
facility, was located in a separate building but it has since
been disposed of. Carl W. Dorn, an officer of the Respon-
dent corporation and manager of the Sweden House, the
original motel facility, was queried concerning the opera-
tion of the restaurant before and after the acquisition of the
Pick facility. His reply follows:
Prior to the time, I guess , the Albert Pick was trying to
run it through their manager. I do not know. I just take
this for granted. But since we have taken it over, we ran
it there just to keep the lights lit and the bar open for
about a month.
Q. How many people worked in there?
A. One, I think was there. And then after that it was
closed up. And now it's being redecorated and sold
outright. Not the land. They're leasing the land from us
but we have no interest in the food business whatever.
Union Representative Allan Graskamp, testifying on behalf
of the General Counsel, stated, however, that during the
previous year, 1971, Albert Pick operated the restaurant
during the summer tourist season but that since then the
facility was used by Pick only as a cocktail lounge and bar
with a related room service arrangement for motel patrons,
with one bartender in attendance. On cross-examination
Graskamp further testified that under Respondent's owner-
ship the bar facilities continued for a brief period but that
the restaurant, last operating in the summer of 1970, was
never reopened.
Everyone testifying at the trial agrees that operating pro-
cedures have not changed at the Pick motel facility since
Respondent's acquisition. The supervision remains the
same , and the same employees continue to work on their
identical jobs. No restaurant personnel is employed for the
obvious reason that the restaurant facility has not operated
2 The records of the Board also disclose the Respondent has otherwise
availed itself of the Board 's jurisdiction, having on October 18, 1972, filed
a petition for an election among its employees in Case 38 -RM-84.
since the close of the 1971 tourist season. The restaurant
facility having recently been sold the bartender is no longer
employed.
Contractual relations between the Union and Pick com-
menced in 1963 as a consequence of Pick's recognition of
the Union as the majority representative of its employees.
Successive contracts have been enforced since that date, the
most recent one being executed by Pick and the Union on
February 11, 1972, effective retroactively from January 1,
1972, for a period of 1 year. The terms of this contract were
unanimously ratified by the employees prior to the Febru-
ary I1 execution. Included as part of the contract was a
schedule of classifications employed by Pick which together
with the usual motel employee classifications also included
first cook, cook, pantry, ware washer, hostess-cashier, wait-
ress, bus help, and bartender; all admittedly the classifica-
tions once required in the operation of the restaurant.
Upon the acquisition of the Pick facility on June 1, 1972,
Respondent and the seller, National Motel Corporation,
also executed a "Supplemental Closing Agreement" which
included the following provision:
[T]he undersigned acknowledge and agree as follows:
1. That that certain Agreement dated June 1, 1968
between National Motel Corporation and the Hotel &
Restaurant Employees' and Bartenders' International
Union Local 477 has not been assigned to nor assumed
by Eklund's Sweden House Inn, Inc. as part of this
transaction.3
Upon learning of Respondent's purchase of the Pick fa-
cility the Union's officials took immediate steps to de-
termine the status of its contract with Pick. Accordingly, on
June 5 Union Representative Graskamp met with Business
Agent Victor Zupo and the two of them called the then
manager of Pick, Edward Carfagnini, who has since, as of
September 1, left Respondent's employ. In the conversation
with Carfagini Zupo first told him that he had heard of the
transfer of the property and asked if there would be any
change. Carfagnini replied that there would be none. Zupo
then asked if a copy of the contract had been turned over
to Sweden House and what would be the status of the check-
off of dues from the employees' payroll. Carfagnini assured
Zupo that Respondent had been given a copy of the con-
tract and that dues would continue to be checked off. In
answer to further questions Carfagnini assured Zupo that a
list of members whose dues were to be checked off was
given to Respondent and that dues had already been de-
ducted for the month of June."
Thereafter in an undated letter mailed to the Union on
June 6,5 Respondent's secretary, Ray Fredh, advised the
7 While it is to be noted that the parties to the supplemental agreement
referred to a collective agreement dated June 1, 1968, and not the most recent
collective agreement which is dated February 11, 1972, and effective rctroac-
tively on January I, 1972, nevertheless counsel at the hearing concurred in
the assumption that the parties to the supplemental agreement quoted above
were under the misapprehension that the June I, 1968, collective agreement
between Pick and the Union was the most recent one It would therefore
follow that the supplemental agreement which was intended to refer to the
most recent collective agreement would quite properly encompass the Febru-
ary 11, 1972, contract within its intention and I accordingly conclude and
find this to be such
4 The foregoing is the mutually corroborating testimony of Graskamp and
Zupo. Carfagnini did not appear as a witness
A mailing envelope addressed to the Respondent and bearing
EKLUND'S SWEDEN HOUSE INN 415
Union that it had assumed ownership of the Pick facility,
that for a limited period of time the Pick identification
would continue, and that Carfagnini, who would continue
as manager, was the individual to whom the Union should
direct any questions concerning the transaction.
Nothing of significance to the relationship between the
Union and Respondent occurred until mid-July. At this
time Zupo inquired of Respondent's bookkeeper whether
the July check for the checkoff dues would be forthcoming.
He was referred to Sweden House's Manager Dorn who
said he thought things would go along as before . However,
when the check was not received within the next few days
Zupo again called the bookkeeper who this time referred
him to Respondent's attorney, William Powell. Upon call-
ing Powell Zupo was informed by him that Respondent was
not going to accept the contract, that it was not theirs, and
that they would no longer check off dues. Zupo informed
Graskamp of this development and the latter arranged a
meeting with Powell which was held on August 2.
In the course of the August 2 meeting Powell asked Gras-
kamp and Zupo if they would object to the inclusion of a
management rights clause in the contract. After this subject
had been pursued for some length with the Union's appar-
ent acquiescence Powell then broached the subject of in-
cluding a no-strike clause. After some further discussion the
union representatives countered by stating that if Respon-
dent was not accepting the contract in its present form then
they too would have some demands to make . When Powell
stated his lack of authority to proceed further another meet-
ing was scheduled for August 7. In anticipation of this
scheduled meeting Graskamp telephoned Powell on August
7, only to find that Powell had not yet met with
Respondent's officials and that the meeting would have to
be postponed. In their telephone conversation Graskamp
asked Powell what disposition had been made of the
Union's request for the dues checkoff. Powell replied that
some of the employees had advised him that they no longer
wanted their dues checked off. Whereupon Graskamp re-
minded Powell of the checkoff provision of the contract
whereby the employer obligated itself to remit the dues of
all employees filing with it a checkoff authorization, not
revokable for a year, and then only on 60 days' notice. The
Union had received no revocations. On this note the conver-
sation ended .6
Meanwhile, on August 4, 2 days following the Union's
meeting with Powell (supra), Carfagnini, the Pick manager,
had called a meeting of all the employees. Included among
them were Sweden House's Manager Dorn, the Pick assis-
tant manager, and the housekeeper. Dorn, without specifi-
cally relating the action to the meeting, credibly testified
that after checking the contract "to see if it was all right to
give [the Pick employees] a raise," he raised their pay to
Respondent's return address was identified as the one received by the Union
shortly after June 6 , 1972. The postmark on the envelope , however, bears the
date June 6, 1971. Although no one testifying or representing the parties
could explain the discrepancy all were in accord that the actual date was
1972, the postal date stamped to the contrary not withstanding. I find accord-
enply.
The foregoing findings are based on the uncontradicted testimony of
Graskamp as corroborated by Zupo, except as to Graskamp 's undemed
telephone conversation with Powell.
equal the pay of the people already employed by Sweden
House. In addition, Respondent sought to regularize the
employees' break time to be consistent with the policy fol-
lowed at Sweden House and a coffee pot was set up for the
employees' convenience. In none of the foregoing changes
was the Union consulted before they were put into effect.
At the August 4 meeting, Carfagnini, in addition to an-
nouncing the foregoing changes, told the employees that
things would be made better for them, their working condi-
tions would be better and easier, and asked each employee
present if he or she wished union dues deducted from the
pay henceforth. Each one responded in the negative. No
employee was shown, however, to have filed a revocation of
the dues checkoff as required by the contract 7
Respondent has not since met with the Union and refused
to do so by its letter to the Union dated August 10. Therein
it was stated as follows:
As you know, we represent Eklund's Sweden House
Inn, Inc. which recently purchased certain assets of
National Motel Corporation located in Rockford, Illi-
nois. This letter is written to confirm our recent discus-
sions and to restate our position with respect to your
contract dated January 1, 1972, entered into with Al-
bert Pick Motel Corporation.
The terms of purchase executed by our client and
National Motel Corporation specifically provided that
the Agreement between your union and Albert Pick
Motel Corporation was not assigned to nor assumed by
Eklund's Sweden House Inn, Inc. Accordingly, our
client is not a successor employer with respect to that
Agreement.
Negotiations are presently underway concerning
sale of the restaurant and bar in the Albert Pick Motel.
Employees have currently indicated to our client that
they do not wish to have their union dues deducted
from their wages in the form of a check-off. In accor-
dance with their wishes we have discontinued the
check-off of union dues.
Under the circumstances, it appears the best way to
settle the question of the employees' desires with re-
spect to union representation, would be an election
conducted by the National Labor Relations Board.
The collective bargaining unit will, of course, be differ-
ent from the unit stated in your contract dated January
1, 1972, but I anticipate we should have no difficulty
arriving at a revised appropriate bargaining unit.
B. Respondent's Contentions
It is Respondent's position, as basically stated in its letter
of August 10, and at the hearing, that because of a change
in the character of the bargaining unit, to wit the elimina-
tion of restaurant and bar personnel, there is no obligation
to bargain. Furthermore, it contends, the employees of the
Pick facility have expressed in various ways their wish not
to be represented by the Union, including the signing of a
petition to the Board requesting that they not be represented
7 The credited testimony of Assistant Manager Chrystal Tomman and
Head Housekeeper Ertha Blak4. The latter also testified that since January
1971 she had heard a considerable number of employees voice their dissatis-
faction with the representation provided them by the Union.
416 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
by the Union. Finally Respondent makes reference to a
petition filed by it with the Board in Case 38-RM-84 on
October 17, 1972, in support of its contention that it should
only be required to recognize and bargain with the Union
after an election held among the employees.
In this latter respect Respondent filed with me its motion
to reopen the hearing for the purpose of adducing evidence
with respect to the wishes of the employees to be repre-
sented by the Union. Because there is already evidence in
the record of employee sentiment in this area which I con-
sider adequate I deny the motion. Respondent' s assistant
manager, Chrystal Tomman, credibly testified that at the
August 4 employee meeting each employee stated that he or
she did not want the union dues withheld, because "They
didn't think the Union was that strong, didn't represent
them that well." Respondent's head housekeeper, Ertha
Blake, credibly testified that tire employees, "All of them, as
a matter of fact," stated that they "didn't think [the Union]
was doing nothing (sic) for them and only taking their mon-
ey once a month. . . . So they rather not be in." Upon the
foregoing credited testimony I conclude and find that at the
August 4 meeting and thereafter employees did not wish to
be represented by the Union. Under such circumstances
further testimony on this subject would be cumulative. I
accordingly reaffirm my earlier ruling denying the motion
to reopen the hearing for such a purpose.
C. Analysis and Conclusions
Respondent's obligation to honor the contract negotiated
by Pick with the Union is entirely distinct from its obliga-
tion to recognize the Union, and either or both obligation
arises in the first instance only after it has been established
that Respondent is in fact the successor employer to Pick.
Viewed in this perspective the issue of successorship is of
prime significance.
Under Respondent's operation the Pick facility provided
the same motel service as before the transfer, with the same
personnel, excepting only the services of one bartender,8 the
employees continued to work under the same general work-
ing conditions, with the same supervision, and were provid-
ing the same services and performing the same duties as
before. Thus the taking over of the Pick operation constitut-
ed no change in the "employing industry." In such circum-
stances Respondent clearly was a successor employer of the
Pick employees.9
Nor is it significant that the original bargaining unit in-
cluded restaurant employees as well as motel employees. In
a situation where one of several stores in a multistore unit
was sold the Board held to be appropriate a unit thus se-
vered, and the purchaser, found to be a successor employer,
was required to recognize and bargain with the employees'
representative.10A fortiori, in a situation such as presented
here the mere absence of employees in a number of classifi-
As it is apparent in the record that the restaurant had been closed since
the end of summer 1971, 9 months prior to the transfer , the absence of
restaurant personnel from the working force after June 1. 1972, is of no
consequence to any determination herein.
9 Solomon Johnskv d/h/a Avenue Meat Center, 184 NLRB 826
io Ibid
cations spelled out in the original bargaining unit , i.e., wait-
resses , etc., would certainly not be such a variance as to
vitiate the successor's otherwise legal obligation to recog-
nize and bargain with those employees' representative. In
any event, however, because restaurant employees had not
been employed even by Pick since the end of the 1971
summer season the alleged variance is at best an illusory
one. I accordingly conclude and find to be appropriate for
the purposes of collective bargaining the unit set forth in the
contract, minus the classifications of employees no longer
in the employ of either Respondent or its predecessor, Pick,
said unit designated as follows:
All full-time and part-time employees employed by Re-
spondent at the Albert Pick facility, excluding all other
employees, office clerical employees, guards, profes-
sional employees and supervisors as defined by the Act.
The Supreme Court settled the issue of a successor's bar-
gaining obligation in N. L. R. B. v. Burns International Securi-
ty Services, 406 U.S. 272. Thus it held that "a mere change
of employers or of ownership in the employing industry is
not such an `unusual circumstance' as to affect the force of
the Board's certification within the normal operative period
if a majority of employees after the change of ownership or
management were employed by the preceding employ-
er." I I Nor does it matter that the Supreme Court has framed
this conclusion in terms of certification rather than recogni-
tion . As it recently held, "Almost from the inception of the
Act it was recognized that a union did not have to be certi-
fied as the winner of a Board election to invoke a bargaining
obligation." 12 Upon the foregoing, therefore, I would con-
clude and find that Respondent upon acquiring the Pick
property also acquired, prima facie, the obligation to recog-
nize and bargain with the Union.
To fortify this conclusion reference is made to the Board's
recent decision in Howard Johnson Company, 198 NLRB
No. 98, a case of striking factual similarity to the instant
one. There, noting a dictum in the Supreme Court' s Burns
decision indicating the circumstances under which bargain-
ing by a successor would be required,13 the Board held that
by retaining all of a predecessor's employees in the bargain-
ing unit and so advising them a successor was thereby obli-
gated to bargain with their union before it fixed initial wages
and terms of employment. Failure to do so, the Board held,
constituted a violation of Section 8(a)(5) of the Act.
Thus Howard Johnson is authority for the conclusion that
Respondent herein, by retaining Pick's employees, was obli-
gated to bargain with their union. There is, however, sup-
port for the further conclusion that certain of Respondent's
actions were unlawful. Respondent, fully aware that the
Union was in the picture, here specifically agreed not to
assume its contract with Pick, and then promptly increased
the wages of the represented employees, made certain ar-
rangements and concessions with respect to their break
time, and assured them that their working conditions would
be improved. All of this without any consultation with the
11406 US at 279
12 N L R B v Gissel Packing Co, 395 U S 575, 596
13 "There will be instances in which it is perfectly clear that the new
employer plans to retain all of the employees in the unit and in which it will
be appropriate to have him initially consult with the employees' bargaining
representative before he fixes terms" 406 U S at 294
417
Union. It is well settled that such unilateral action by an
employer without consultation with the established repre-
sentative of its employees constitutes unlawful refusal to
bargain in violation of Section 8(a)(5) of the Act,14 and I so
conclude and find.
Additionally, Respondent, at the same meeting at which
it promised better working conditions, admittedly inquired
of each of its employees whether or not they wished Respon-
dent to continue to check off their union dues. The Board
has held such polling to be unlawful unless accompanied by
assurances against interference with employees ' statutory
rights, and absence of coercion, and by a declaration that
the purposes of such inquiry is merely to determine the
validity of the Union's assertion of majority representative
status.15 None of these safeguards were present here. In this
respect, therefore, as well as by the unilateral action dis-
cussed above, I conclude and find that Respondent has
interfered with, restrained, and coerced its employees in the
exercise of rights guaranteed by Section 7 of the Act, there-
by violating Section 8(a)(1).
Under the foregoing circumstances Respondent cannot
now be heard to complain that it has or had a good-faith
doubt as to the Union's representative status. I do not hesi-
tate to conclude and find, as Respondent urges me, that the
employees no longer wished to be represented by the Union.
But I cannot divorce these defections from Respondent's
contemporaneous actions which had the natural effect of
encouraging them. I refer specifically to the raises the em-
ployees were given and the assurances that were made to
them without consultation with the Union. I can think of no
more effective way of demonstrating to employees the steril-
ity of their bargaining representative. Similarly, the interfer-
ence, restraint, and coercion which the Board finds inherent
in the polling of employees most certainly manifests itself
here by the very consequence of the results of the August
4 employee meeting . Not one of the employees who had 5
months earlier ratified his union's contract had the courage,
whatever it would take, to tell the employer he would wish
to continue in the Union by having dues checked off. Under
such circumstances, then, the mere fact that the employees
do not wish to be represented by the Union does not stand
alone. From all the circumstances I can reasonably con-
clude, and I do, that their defection is a consequence of
Respondent 's unilateral beneficence and its intrusion into
their relationship with their Union. This the Board has con-
sistently found to destroy the free choice of employees 16
and to vitiate any suggestion of good-faith doubt on an
employer's part that a chosen representative continues to
represent his employees.17 Upon the foregoing, therefore, I
conclude and find that the defection of Respondent's em-
ployees from the Union, caused as it was by its own unlaw-
ful conduct, cannot and does not relieve Respondent of its
obligation to recognize and bargain with the Union.
14 N.L R. B v. Katz, 369 U.S. 736.
15 Strucksnes Construction Co., Inc., 165 NLRB 1062 ; Nation-Wide Plastics
Co., Inc., 197 NLRB 996; Super Toys, Inc, 186 NLRB 651.
16 "The Board has held that 'conduct violative of Section 8 (a)(1) is, a
fortiori, conduct which interferes with the exercise of a free and untrammeled
choice in an election ."' Monroe Manufacturing Company, Inc., 200 NLRB
No. 11, fn. 3.
17 See N. L.R.B v. Katz, supra
To this point we have only considered Respondent's obli-
gation to bargain with the Union as the continuing repre-
sentative of the Pick employees.
Respondent cites the decision of the Circuit Court of
Appeals for the Fifth Circuit in Daisy's Originals, Inc., of
Miami v . N.L.R.B., 468 F.2d 493 (1972), in support of its
contention that it and the Pick employees are entitled to an
election among those employees to determine the Union's
representative status. Respondent's reliance upon this deci-
sion, however, is misplaced. That case raises a question not
passed upon by the Supreme Court in N.L.R.B. v. Gissel,
395 U.S. 575, and one that had since been a subject of much
legal curiosity. The Court posed the issue thus at 395: "[W]e
need not decide whether a bargaining order is ever appro-
priate in cases where there is no interference with the elec-
tion process." In Daisy's the Fifth Circuit was presented a
situation in this specific category, the Board having found
a bargaining order appropriate where the Union was alleg-
edly rejected by the employees after many years of represen-
tation, but where it was specifically found that the election
processes had not been impaired. While finding that an
election could have been held the Board, however, consider-
ing the incumbency of the union, issued that bargaining
order. This is not the instant case. True the Union here is
an incumbent one, the employees have apparently rejected
it, and petitions for a new election have been filed. But
unlike the situation in Daisy's it has been found here that
Respondent's conduct did tend to impair the election ma-
chinery. This distinguishing factual situation clearly re-
moves the case from the special category raised in Gissel and
considered by'the Fifth Circuit in Daisy's. I accordingly find
the case to be inapplicable.
Here the evidence is clear that a majority did exist prior
to the transfer, and presumably prior to Respondent's unila-
teral conduct and the polling of the Pick employees. For it
is undenied that in February 1972 all the employees actually
ratified the contract negotiated in their behalf by the Union.
This is clearly evidence of majority status which may be
presumed to have continued until the contrary has been
shown, without, of course, such interference as has been
manifest here by Respondent. So, rather than assess the
subsequent feelings of the employees, as Respondent seeks
to do, it would be more appropriate to consider the Supreme
Court's observation in N.L.R.B. v. Gissel Packing Co., 395
U.S. at 613, thus:
For, as we pointed out long ago, in finding that a
bargaining order involved no "injustice to employees
who may wish to substitute for the particular union
some other . . . arrangement," a bargaining relation-
ship "once rightfully established must be permitted to
exist and function for a reasonable period in which it
can be given a fair chance to succeed," after which "the
Board may, . . . upon a proper showing, take steps in
recognition of changed situations which might make
appropriate changed bargaining relationships. " Franks
Brothers Company v. N.L.R.B., 321 U.S. 702 at 705-706.
Relating this to the instant situation it is apparent that the
bargaining relationship existing when the Respondent ac-
quired the Pick facility is entitled to a reasonable continua-
tion under the successor's operation without being
subjected to the employer's pressures of unilateral conduct
418 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
(supra), polls (supra), and petitions for election.
To this point we have only considered Respondent's obli-
gation to bargain with the Union and the consequences
flowing from its failure to do so , all without reference to the
existing contract executed prior to the Pick acquisition. At
the outset it is to be noted that Respondent, by specific
agreement, stated its unwillingness to be bound by the pre-
decessor employer's contract. This, in line with the Burns
decision (supra), would normally dispose of the issue and
leave the parties to proceed with bargaining for a new agree-
ment. Here, however, there appear to have occurred a num-
ber of incidents which create doubt as to Respondent's
disavowal of the contract. Thus Respondent's manager,
Carl Dom, when asked if he had contacted the Union be-
fore giving the Pick employees a raise, credibly replied that
he did not because "the contract said that we could." This
he knew because he "looked at it to see if it was all right to
give them a raise." Moreover, Union Representatives Gras-
kamp and Zupo credibly testified that the checkoff of dues
required by the contract was honored by Respondent for
the month of June. And finally, by the undenied testimony
of Graskamp , it is apparent that in the meeting between him
and Respondent's attorney, William B. Powell, on August
2, the contract was being considered as a base upon which
renegotiations would take place . Thus Powell suggested the
addition to the contract of management rights and no-strike,
clauses, and Graskamp countered by stating that if Respon-
dent was thereby seeking to renegotiate the contract then
the Union would also have some matters to be brought up.
These three instances in which the existing contract was
positively relied upon or noted by Respondent, to wit, the
raise, the check off of dues, and the effort to renegotiate,
would effectively cancel any intent to the contrary which
Respondent may have previously or subsequently manifest-
ed not to be bound by the collective agreement; and most
certainly it abrogates its agreement with the seller of the
Pick facility not to assume the contract, and I so conclude
and find. Under such circumstances, therefore, nothing in
the Burns decision would negate the Respondent 's obliga-
tion under the contract between it and the Union for the
simple reason that it has given , by its action, "consent to be
bound by it." 18
Nor is it of consequence to the continuing effect of the
contract that Respondent's employees have signified a de-
sire not to be represented by the Union. Quite apart from
Respondent's acts of interference , restraint , and coercion
which establish a continuing obligation to recognize the
Union, as I have previously found, the circumstances herein
present a situation not present in Burns where the obligation
to honor a contract was not assumed as a matter of law.
Here the obligation was assumed by the assent of Respon-
dent. Having agreed by its actions (supra) to accept the
contract, then Respondent, as a successor, will be.bound to
observe the contract despite good-faith doubts about the
Union's majority during the time that the contract is a bar
to another representation election.19
ie N LRB v. Burns Security Services, supra, at 287
19 Ranch -Way, Inc, 183 NLRB No 116. As explained in Burns, this case
would appear to be inapplicable except as it applies to a peculiar situation
such as Respondent 's implicit assumption of the contract here . The Supreme
In summary of the foregoing, therefore, I have concluded
and found that by its conduct, as detailed, Respondent has
interfered with, restrained, and coerced its employees in
violation of Section 8(a)(1) of the Act, and in such an aggra-
vated manner as to make an election among its employees
impossible at this time and thus requiring it, under estab-
lished law, to continue to recognize the Union as its employ-
ees' representative in the appropriate bargaining unit found
herein; and, by further conduct, Respondent has refuted
any intent not to accept the Union's collective agreement
with Pick, the predecessor employer, and has thereby abro-
gated any agreement not to assume this contract, and is, for
a reasonable duration, obliged not only to recognize the
Union but to assume the existing contract with it - all of
the foregoing, for the reasons stated previously, despite the
employees' contemporaneously stated desire not to be rec-
ognized by the Union. I accordingly conclude and find that
the Respondent by the conduct detailed above and for the
reasons stated has thereby violated Section 8(a)(1) and (5)
of the Act.
IV THE EFFECT OF THE UNFAIR LABOR
PRACTICES UPON COMMERCE
The activities of Respondent set forth in section III,
above, occurring in connection with Respondent's opera-
tions described in section I, above, have a close, intimate,
and substantial relationship to trade, traffic, and commerce
among the several States and tend to lead to labor disputes
burdening and obstructing commerce and the free flow of
commerce.
V THE REMEDY
Having found that Respondent has engaged in and is
engaging in unfair labor practices within the meaning of
Section 8(a)(5) and (1) of the Act I shall recommend that it
cease and desist therefrom and, upon request, bargain col-
lectively with the Union as the exclusive representative of
all employees in the appropriate unit found herein, and
honor and abide by the collective bargaining agreement
executed by the Union and Respondent's predecessor, with
the understanding, however, that Respondent be ordered
not to abandon or vary such benefits as it may have given
its employees during the period of its refusal to recognize
and bargain with the Union. 20 I shall also recommend that
Respondent be ordered to post appropriate notices of com-
pliance with such Order as is issued herein.
Upon the foregoing findings of fact, conclusions of law,
and the entire record, and pursuant to Section 10(c) of the
Act, I hereby issue the following recommended:21
Court, in its explanation (fn 12), reaffirmed a corollary to the Board's long
standing "contract -bar rule ," to the effect that during the reasonable dura-
tion of an existing contract an employer cannot use doubt about a union's
majority as a defense to a refusal to bargain charge , as Respondent seeks to
do here
20 Cast Optics Corp, 184 NLRB 1, enfd . 458 F.2d 398, (C.A 3, 1972), The
Bassick Company, 127 NLRB 1552
21 In the event no exceptions are filed as provided by Sec. 102.46 of the
Rules and Regulations of the National Labor Relations Board , the findings,
conclusions , recommendations , and Recommended Order herein shall, as
provided in Sec 102.48 of the Rules and Regulations , be adopted by the
EKLUND'S SWEDEN HOUSE INN 419
ORDER
Eklund 's Sweden House Inn, Inc., its officers , agents,
successors , and assigns shall:
1. Cease and desist from:
(a) Polling their employees to determine their desire to
retain union membership.
(b) Granting wage increases and benefits to employees
under circumstances which would influence their choice of
a bargaining representative.
(c) Refusing to bargain collectively concerning rates of
pay, wages , hours and other terms and conditions of em-
ployment with Hotel & Restaurant Employees and Barten-
ders International Union Local 477 (AFL-CIO), as the
exclusive representative of its employees in the following
unit found to be appropriate for the purposes of collective
bargainings:
All full-time and part-time employees employed by Re-
spondent at the Albert Pick facility , excluding all other
employees , office clerical employees , guards , profes-
sional employees and supervisors as defined by the Act
by failing to adhere to the provisions of the collective-bar-
gaining agreement executed between said Union and Albert
Pick Motel Corporation , Rockford , Illinois , or by unilater-
ally modifying the provisions contained in such agreement.
(d) In any like or related manner interfering with, re-
straining , or coercing employees in the rights guaranteed
them by Section 7 of the Act.
2. Take the following affirmative action which it is found
will effectuate the policies of the Act:
(a) Upon request , bargain with the above -named labor
organization as the exclusive representative of all the em-
ployees in the aforementioned appropriate unit, with re-
spect to rates of pay , wages , hours , and other terms and
conditions of employment as required by the aforemen-
tioned collective-bargaining agreement as applicable law.
(b) Honor, maintain , and enforce the aforementioned
contract.
(c) Continue in full force and effect such benefits and
emoluments as it may have granted its employees during the
period of its unfair labor practices and the pendency of
these proceedings.
(d) Post at the Albert Pick facility copies of the attached
notice marked "Appendix." 22 Copies of the notice on forms
provided by the Regional Director for Subregion 38, shall,
after being duly signed by the Respondent, be posted imme-
diately upon receipt thereof in conspicuous places, and be
maintained for a period of 60 consecutive days . Reasonable
steps shall be taken to insure that said notices are not al-
tered , defaced , or covered by any other material.
Board and become its findings , conclusions , and Order , and all objections
thereto shall be deemed waived for all purposes
22 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 read "Posted Pursuant
to a Judgment of the United States Court of Appeals Enforcing an Order of
the National Labor Relations Board "
(e) Notify the said Regional Director in writing, within
20 days from the receipt of the Administrative Law Judge's
Decision, what steps it has taken to comply herewith 23
23 In the event that this Recommended Order is adopted by the Board, this
provision shall be modified to read "Notify the Regional Director for Subre-
gion 38, in writing, within 20 days from the date of this Order, what steps
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 NOT poll you, our employees, to determine
your union preferences.
WE WILL NOT grant you wage increases or other bene-
fits for the purpose of influencing your choice of select-
ing or retaining a bargaining representative but WE WILL
continue in full force and effect any wage increase,
emolument, or benefit you have received since June 1,
1972.
WE WILL bargain with Hotel & Restaurant Employ-
ees and Bartenders International Union, Local 477
(AFL-CIO), as the exclusive bargaining representative
of our employees in the following bargaining unit:
All full-time and part-time employees employed at
the Albert Pick facility excluding all other employ-
ees, office clerical employees, guards, professional
employees and supervisors as defined by the Nation-
al Labor Relations Act.
WE WILL, upon request bargain collectively with the
aforementioned Union with respect to rates of pay,
wages, hours, and other terms and conditions of em-
ployment and, if an understanding is reached, will em-
body such understanding in a signed agreement.
Meanwhile WE WILL adhere to the provisions of the
most recent collective-bargaining agreement executed
between the aforementioned Union and Albert Pick
Motel Corporation, Rockford, Illinois, and the afore-
mentioned Union.
WE WILL NOT modify any- of the provisions of the
aforementioned collective-bargaining agreement with-
out the approval of the Union.
WE WILL NOT in any like or related manner interfere
with, restrain, or coerce any of you or unlawfully dis-
criminate against you in your exercise of your rights
guaranteed by the National Labor Relations Act.
420 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
All of you, our employees, are free to remain , or become, This is an official notice and must not be defaced by
or to withdraw from, or to refrain from becoming members anyone.
of Hotel & Restaurant Employees and Bartenders Interna- This notice must remain posted for 60 consecutive days
tional Union, Local 477 (AFL-CIO), or any other labor from the date of posting and must not be altered, defaced,
organization . or covered by any other material. Any questions concerning
this notice or compliance with its provisions may be direct-
EKLUND'S SWEDEN HOUSE ed to the Board's Office, Savings Center Tower 10th Floor,
INN. INC. 411 Hamilton Boulevard, Peoria, Illinois 61602, Telephone
(Employer) 309-673-9283.
Dated By
(Representative) (Title)