Arden's

National Labor Relations Board - Board Decisions

Jun 12, 1974

211 N.L.R.B. 501 (N.L.R.B. 1974)

ARDEN'S 501
Anita Shops , Inc., d/b/a Arden's and Retail Store
Employees Union Local 428, Retail Clerks Interna-
tional Association , AFL-CIO. Case 20-CA-7636
June 12, 1974
DECISION AND ORDER
On April 23, 1973, Administrative Law Judge
George Christensen issued the attached Decision in
this proceeding. Thereafter, Respondent filed excep-
tions and a supporting brief, and the General
Counsel filed cross-exceptions combined with a brief.
The Board has considered the record and the
attached Decision in light of the exceptions and
briefs and has decided to affirm the rulings,
findings,' and conclusions of the Administrative Law
Judge only to the extent consistent herewith.
We have no difficulty with the conclusion of the
Administrative Law Judge that, under the facts here,
Respondent is a successor with respect to the store
here in issue.
It is also clear enough, under the Supreme Court's
decision in N. L. R. B. v. Burns International Security
Services, Inc.,2 that Respondent did not, under the
Supreme Court's interpretation of the law, inherit its
predecessor's collective-bargaining agreement.
The much more difficult question however is
whether, under the facts presented by this record,
Respondent was legally entitled unilaterally to set its
initial terms and conditions of employment or
whether this is one of those "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." 3
In Howard Johnson and Good Foods we found a
violation of Section 8(a)(5) where the successor
employers, without prior warning, unilaterally
changed the terms and conditions of employment
prevailing under the predecessors after already
having committed themselves to hire almost all of the
old unit employees with no notice that they would be
expected to work under new and' different terms.
On the other hand, in Spruce Up Corporation, 209
NLRB No. 19, we found no such violation when the
Respondent, in advance of its takeover, clearly
announced its intent to establish a new set of terms
and conditions of employment prior to inviting
former employees to accept employment.
In the instant case , on approximately May 15,
1972, the predecessor corporation notified the em-
ployees of this store, as well as the other stores in the
chain, of the impending change in ownership. So far
as we can discern, no commitment was made to
employees at this time with respect to Respondent's
intentions as to their continuity of employment.
On May 26 Respondent addressed a letter to the
Union, the contents of which are set forth in full in
the Decision of the Administrative Law Judge. In
that letter the Union was advised of Respondent's
intent to hire the employees of the predecessor
"consistent with the level of personnel which our
client determines is needed to man said store." The
letter further advised that Respondent intended to
install its own set of wages, hours, and working
conditions but offered to negotiate an agreement
with the bargaining representative "at the earliest
mutually convenient opportunity."
According to the testimony, this letter was not
received by the Union until May 30, which was the
date Respondent commenced operations at the store.
Apparently no communication was made to the
employees with respect to either their possibilities for
continued employment or their wages and employ-
ment terms, if hired, until the actual day of takeover,
although the store manager had been advised of the
new pay rates and employment terms on May 28.
On or after May 30, each employee at the
commencement of her first scheduled day of work
was offered employment, but at the same time
advised of the newly established wages and terms.
In Spruce Up, supra, we said:
We believe the caveat in Burns, therefore, should
be restricted to circumstances in which the new
employer has either actively or, by tacit inference,
misled employees into believing they would all be
retained without change in their wages, hours, or
conditions of employment, or at least to circum-
stances where the new employer, unlike the
Respondent here, has failed to clearly announce
its intent to establish a new set of conditions prior
to inviting former employees to accept employ-
ment.
In the instant case there was no advance notice to
employees of the new terms, but also no advance
commitment as to their employment. There cannot
be said to have been any misleading of employees
into believing they would all be retained without
changes in their employment conditions. But on the
other hand, the notice to both the employees and to
their bargaining representative was a last minute
notice, and was not received by either until the very
, While we agree that the record as a whole establishes that Respondent 2 406 U.S . 272 (1972).
intended to and, in fact , did retain all of its predecessor 's unit employees at 3 Id pp. 294-295 ; Howard Johnson Company, 198 NLRB No . 98; Good
Store No. 27, we do not agree with , or rely upon , the Administrative Law Foods Manufacturing & Processing Corporation , Chicago Lamb Packers Co.,
Judge's finding that such intent is established by Hardcastle 's testimony . Inc.-Division, 200 NLRB No. 86.
211 NLRB No. 74
502 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
day of takeover. It would thus be difficult to find a
much closer borderline case between the doctrine we
have applied in Howard Johnson and Good Foods and
the contrary rule of Spruce Up. The need to reach
what the Supreme Court in Burns called an "accom-
modation between the legislative endorsement of
freedom of contract and the judicial preference for
peaceful . . . settlement of labor disputes" is, we
suppose, the underlying consideration, but it, too, is
not an easy accommodation to make under these
facts.
Respondent offered substantial evidence to indi-
cate an economic justification for instituting changes
in both methods of operation and prevailing condi-
tions of employment. At the same time, the la,st-
minute character of the notice to both employees and
their bargaining representative can hardly be said to
be the approach most conducive to either good
employee relations or the maintenance of peaceful
and stable relations with the employees' exclusive
representative.
We are faced here, therefore, with the most delicate
kind of balance. We note the comment of the Court
of Appeals for the Seventh Circuit in Zim's Foodliner,
Inc. v. N. L. R. B., 495 F.2d 1131, wherein the court,
puzzling over a post-Burns application of the
successorship doctrine, said, after quoting from the
Burns decision:
This language indicates to us that the Court did
not intend to preclude application of the unilater-
al changes doctrine to employers who voluntarily
adopt pre-existing terms and conditions, but who
subsequently have second thoughts in the matter.
Perhaps a line need be drawn somewhere,
although Bachrodt,4 if still good law in this
respect, would indicate that the period necessary
to establish voluntary adoption is quite brief.
Since in this case it cannot be said that there was
any period whatever of adoption by the successor of
the predecessor's terms and conditions of employ-
ment , we conclude, not without reservations, that
while the line here is being drawn rather finely, we
shall draw it as in Spruce Up and find that
Respondent was entitled to set its initial terms and
conditions of employment. We are influenced in
reaching that decision upon these facts by Respon-
dent's clearly expressed willingness to bargain
immediately with the employees' exclusive agent, and
the absence of the factors of union animus or any
attempt by Respondent to rid itself of the Union
-factors which were present in Howard Johnson and
Good Foods, supra.
Upon the facts in this record, therefore, we find
that Respondent neither made a unilateral change in
its terms and conditions of employment nor refused
to bargain with the Union, and we shall dismiss the
complaint herein in its entirety.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor
Relations Board hereby orders that the complaint
herein be, and it hereby is, dismissed in its entirety.
MEMBER FANNING, concurring:
The issue before us is whether Respondent Arden
violated Section 8(a)(5) and (1) of the Act by
instituting its own terms and conditions of employ-
ment to govern the operations of a store it had
purchased from another enterprise even though it
intended to and did hire all the employees of the
seller, employees who were represented by an
exclusive bargaining representative. Considering the
relevant circumstances of the case, I do not agree
with the Administrative Law Judge that Respondent
acted unlawfully, and I would reverse his Decision
and dismiss the complaint.
Briefly, the relevant facts are that, on or about May
15, 1972, the employees of the employing industry
were advised that Respondent had purchased the
operations involved and would take over the opera-
tions on May 30. On or about May 26, Respondent
advised the Union, the employees' bargaining repre-
sentative, that it was taking over the operations of the
enterprise as of May 30, that it intended to hire the
employees, that it stood ready to recognize the Union
as the employees' bargaining representative, that it
was ready and willing to enter into negotiations to
establish the terms and conditions of employment,
and that, pending such negotiations , it would place
into effect its own terms and conditions of employ-
ment which differed from those provided in the
contract between the Union and the predecessor.
The letter apparently was not received by the Union
until May 30. The Union did not reply to the letter
and demand bargaining until June 16, at which time
it notified Respondent that it expected Respondent
to maintain the contract terms in effect until the
parties could meet to negotiate the issue. On May 25,
Respondent gave the manager of the store a
document setting forth the rates of pay and other
terms and conditions of employment which would
obtain upon Respondent's commencement of opera-
tions. The manager, as directed by Respondent,
informed the employees of these facts by personal
interview and by posting them on the bulletin board.
The foregoing conclusively demonstrates that
4 N L R. B. v Bachrodt Chevrolet Co, 468 F 2d 963 (C.A 7, 1972)
ARDEN'S
Respondent planned to retain all of its predecessor's
employees, and that it therefore could not refuse an
appropriate request from the employees' representa-
tive for negotiations concerning the terms and
conditions of employment it planned to institute.5
It is also reasonably clear that the May 15
announcement to employees of Respondent's pur-
chase of the business can be deemed constructive
notice to their representative of that fact, and that
the representative had adequate opportunity to
request bargaining or otherwise inquire as to Re-
spondent's intentions prior to its commencement of
operations. The Union did not, however, request
bargaining at that time. Respondent nevertheless
informed the Union that it stood ready to recognize
and bargain with the Union but that, pending such
negotiations, it would institute terms and conditions
of employment differing from those maintained by
its predecessor. In these circumstances, I am satisfied
that Respondent has not violated its bargaining
obligation.
I so conclude because it is difficult to see how
Respondent's institution of such terms and condi-
tions of employment along with its stated willingness
to bargain constituted any more of a unilateral
change in its terms and conditions of employment
than did similar action by the respondent in the
Burns case after its bargaining obligation had
matured .6 Nevertheless, the Court found that such
action was not a violation of Section 8(a)(5) because
there was "no evidence that Burns ever unilaterally
changed the terms and conditions of employment it
had offered to potential employees in June after its
obligation to bargain had matured." 7
I see no reason to impose a greater obligation on
Respondent than was imposed upon the successor in
Burns, particularly as Respondent, unlike Burns,
clearly notified the Union that it was ready and
willing to negotiate about the terms and conditions
of employment upon request of the Union. As I fail
to perceive how Respondent's actions herein have
obstructed the collective-bargaining process, as there
appears to me to be no basis for finding that
Respondent had committed itself to maintaining the
preexisting terms and conditions of employment, and
as Respondent has not rejected a demand for
bargaining but instead notified the Union that it was
ready to recognize and bargain with it concerning
such matters, I find that Respondent has neither
made a unilateral change in its terms and conditions
of employment nor refused to bargain with the
Union.
MEMBER JENKINS, concurring:
I concur in the result reached by the majority in
this case.
503
MEMBER PENELLO, dissenting:
Contrary to my colleagues, for the reasons set forth
in my dissenting opinion in Spruce Up Corporation,
209 NLRB No. 19, and the attached Decision of the
Administrative Law Judge herein, I would find that
Respondent violated Section 8(a)(5) and (1) of the
Act by unilaterally changing rates of pay and other
terms of employment without prior consultation with
the Union as, under the principles ennunciated by
the Supreme Court in Burns, "it is perfectly clear that
the new employer plan[ned] to retain all of the
employees in the unit ...." 8 Indeed, if anything,
this case is stronger than Spruce Up, because not only
was there an advance commitment to the Union on
May 26 by Respondent before the take over to the
effect that, "it is the intention of Anita Shops to hire
the individuals presently employed" by the predeces-
sor,9 which commitment was actually fulfilled when
all the predecessor's employees were in fact retained,
but, as my colleagues acknowledge, there was no
prior notice to the employees of the new terms. In
addition, although my colleagues are impressed with
"Respondent's clearly expressed willingness to bar-
gain immediately with the employees' exclusive
agent," I seriously question the Respondent's sinceri-
ty in view of the fact that its May 26 notice of its
proposed changes and "offer to consult" was mailed
too late to make it possible for the Union, which only
received the letter on May 30, to respond to the
"offer" prior to the effectuation of the changes.
5 N.L.R. B. v. Burns International Security Services, Inc., 406 U.S. 272,
294-295. See also my separate opinion in Spruce Up Corporation, 209 NLRB
No. 19.
6 Burns, supra at 295. In Burns, the respondent commenced operations on
July 1 but the Court noted that its bargaining obligation matured on June
12 after it hired a majority of employees in the unit , hiring which occurred
after a series of employment interviews in which employees were told that
Burns could not live with their union 's contract and they would have to join
another union.
7 Ibid.
9 Burns, supra at 294-295.
9 Unlike my colleagues , I do not agree that the intent to retain the
predecessor's employees must be manifested directly to the employees. The
Court in Burns set forth no such requirement . Moreover, my colleagues in
Spruce Up did not find fatal that respondent's commitment that "all barbers
who are working will work" was made to the union . In fact they assumed
that this statement to the union was an "invitation to the previous work
force to accept employment" (Spruce Up, supra), but found that it was not
perfectly clear that the respondent planned to retain all of the employees in
the unit because the respondent had announced new terms prior to or
simultaneously with his offer to the predecessor's employees to accept
employment under those terms.
DECISION
STATEMENT OF THE CASE
GEORGE CHRISTENSEN, Administrative Law Judge: On
504 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
October 30, October 31, November 1, and November 9,
1972,1 I presided over a hearing at San Francisco,
California , to try issues raised by a complaint issued
September 6 on the basis of a charge filed by the Union on
July 14. The complaint alleged that Anita Shops violated
Section 8(a)(5) and ( 1) of the National Labor Relations
Act, as amended (hereafter the Act), following purchase of
a San Jose , California , store and retention of the seller's
employees , by changing rates of pay and other terms of
employment of those employees without prior consultation
with the Union, their representative under the prior owner.
Anita concedes it retained the seller 's employees and
made changes in their rates of pay and other terms of
employment but contends it had the right to do so because;
(1) it was not a successor employer; (2) its action was
legally permissible under the Act; and (3) the Union and
the employees either were estopped from asserting any
rights under the Act or waived same.
The issues joined by the parties and litigated at the
hearing were : ( 1) whether Anita was a successor employer
as that term is defined and applied under the Act; (2)
assuming Anita was a successor employer, whether Anita
was under a duty to consult with the Union prior to
making changes in the rates of pay, wages , hours, and
other terms of employment of its employees represented by
the Union; and (3) assuming the answer to the preceding
two questions is affirmative , whether the Union and the
employees by their conduct either are estopped from or
waived their rights under the Act.
The parties appeared by counsel at the hearing and were
afforded full opportunity to adduce evidence, examine and
cross-examine witnesses , argue, and file briefs. Briefs have
been received from the General Counsel and Anita.
Based on my review of the entire record ,2 observation of
the witnesses , perusal of the briefs and research , I enter the
following:
FINDINGS OF FACT
1. JURISDICTION AND LABOR ORGANIZATION
The complaint alleged , the answer admitted , and I find
that Anita , at all times material , was an employer engaged
in commerce in a business affecting commerce , and the
Union was a labor organization , as those terms are defined
in Section 2(2), (5), (6) and (7) of the Act.
II. THE ALLEGED UNFAIR LABOR PRACTICES
A. Background
For a number of years prior to 1972, Lucky Stores, Inc.,
(hereafter called Lucky) through Gemco, a wholly owned
subsidiary, controlled Tanne-Arden Corporation (hereafter
called Tanne-Arden), an operator of approximately 35
retail stores in Arizona and California selling women's
apparel under the Arden name. One of the Arden stores,
27, was located at 57 South First Street, San Jose,
California.
On June 10, 1960, the Board certified that the Union had
been designated by a majority of store 27's nonsupervisory
employees as their collective-bargaining representative
(Case 20-RC-4191).
The Union and Tanne-Arden signed a succession of
contracts covering store 27's employees within the unit,
including a contract for a term extending from September
1, 1968, through August 31, 1971. On April 5, a supplement
to that contract was agreed to, extending the contract's
basic terms to August 31, 1973 , with certain changes in
wage rates and the health and welfare provision.
B. The Sale
While negotiations for the contract supplement just
noted were in progress , Lucky approached Anita with a
proposition that the latter purchase the Tanne-Arden
chain . Anita, at that time, operated approximately 70 retail
stores in the Western United States selling women's
apparel under the Anita name.
In the course of the discussions between Lucky and
Anita, the latter was advised of collective -bargaining
contracts covering employees at various Tanne-Arden
stores, including the recently concluded April 5 supple-
ment covering store 27.
Sometime that month 3 an agreement was reached
between Lucky and Anita for the sale of the Arden name,
fixtures, and inventories to Anita and assignment to Anita
of the leases at all the Tanne-Arden stores .4 It was also
agreed between Lucky and Anita that the latter would
assume physical control and operation of the Tanne-Arden
stores the day after Memorial Day, i.e., on May 30.
C. Notice of the Sale and New Rates and Terms
of Employment
On approximately May 15, Lucky advised the Tanne-
Arden employees represented by the Union at store 27 of
the prospective change in ownership to be effected May 30.
On May 26, Anita addressed the following letter to the
Union:
As you may be aware, the Arden store located at 57
South First Street, San Jose, California , at which
members of your Union are employed under a
Collective Bargaining Agreement with Tanne-Arden,
Inc., is undergoing a change of ownership . Our client,
Anita Shops, Inc., is in the process of purchasing the
fixtures, and perhaps the inventory, of that store, and
assuming the lease for the premises.
This is to advise you that it is the intention of Anita
Shops to hire the individuals presently employed by
Arden at the above location onto its payroll, effective
with the payroll period covering the work week of May
29, 1972, consistent with the level of personnel which
our client determines is needed to man said store.
i Read 1972 after all subsequent date references omitting the year.
7 Pursuant to an unopposed motion of the General Counsel , the record is
corrected.
9 The record does not reveal the specific date
4 No value was placed on goodwill since the Tanne-Arden stores were
operating at a loss . While not in the sales/purchase agreement, J.
Hardcastle, Anita's director of store operations and a supervisor of Anita
acting on its behalf , testified that prior to assuming operation of store 27,
Anita decided to retain all of store 27's employees (further substantiation
lies in the fact that Anita so stated in a letter to the Union mailed 4 days
pnor to the date Anita commenced operation of store 27). V
ARDEN'S
Anita Shops will recognize, and not deny, your
status as the exclsive btrgaining representative of said
employees employed at the above address, upon
demand. If it is your position that you represent a
majority of employees in an appropriate unit, please so
advise us.
Upon receipt of said advice, we stand ready to
bargain with you concerning the establishment of a
collective bargaining contract between your Union and
our client covering the wages, hours, and working
conditions of said employees at the earliest mutually
convenient opportunity.
Since our client has no legal obligation to adopt or
implement the terms and conditions of your contract
with Tanne-Arden, it will not do so. Thus, the aforesaid
negotiations will be for the establishment of terms and
conditions of employment mutually acceptable to our
client and your organization . Pending the negotiation
of that contract, we will, effective with the payroll
period covering the week of May 29, 1972, be installing
the Anita Shops compensation programs, policies, and
practices for subject employees. The commencement of
coverage under the Anita Shops benefit programs will
be timed so that no employee is left without coverage.
We shall anticipate your reply at your earliest
convenience.
The Union received the letter on May 30.
On May 28, Rosemary Schubert, Anita's vice president
of finance and comptroller, contacted Rosemary Manfre,
manager of store 127,5 and acquainted Manfre with
various forms and records utilized by Anita, instructed
Manfre regarding new sales and cash register procedures,
and informed her what rates of pay and other terms of
employment store 127's employees were to receive.6 The
rates, etc., were lower than those under the contract
supplement and contract then in effect between Tanne-
Arden and the Union.
Schubert also gave Manfre a document setting out the
rates of pay and other terms of employment of the store
personnel, instructed Manfre to inform each employee of
the contents thereof before they started work on or after
May 30, and instructed Manfre to post the document for
employee reference. The document read as follows:
WAGES AND BENEFITS
1st 700 hours $2.067
2nd 700 hours $2.298
3rd 700 hours $2.350
Thereafter $2.430
Holidays:
New Year's Day, Memorial Day, 4th of July, Labor
Day, Thanksgiving , Christmas and the Employee's
anniversary date . Any employee who works the month
S Renumbered store 127 by Anita.
8 All employees at the store on Tanne-Arden's payroll, including
Manfre , continued in Anita's employ at store, 127.
7 f discredit the testimony of several employees to the effect they were
not informed until a considerable time had elapsed after their employment
by Anita of their new rates of pay and that they were unaware of the
existence of the document until a considerable time after employment by
Anita . Their signed bond applications , which were executed between May
505
of February, in any year, in lieu of Washington's
Birthday, will receive an additional day off with pay, at
a time mutually agreeable with employer and employ-
ee.
Vacations:
After 1 year - 1 week
After 2 years - 2 weeks
After 5 years - 3 weeks
Sick Leave:
Sick leave is earned at the rate of one-half (1/2) day for
each full month worked. Part time employees will be
paid pro-rated sick leave. Sick leave starts with the 2nd
day of absence due to illness except in the case of
hospitalization, when it starts with the first day-
H& W.•
Full time employees are covered by a fully paid major
medical health insurance plan following 30 days of
employment.
Part time employees who average 80 hours a month are
covered by the same plan following 90 days of
employment.
Included in the health insurance plan, is $2000 life
insurance on the employee.
Pension:
Employees are covered by the Company Pension Plan
if they meet the minimum requirement of working 1040
hours in a calendar year.
Manfre carried out Schubert's instructions to the
letter-acquainting each employee with the new rates of
pay and other terms of employment listed on the document
quoted above, as each employee reported for work on and
after May 30.7 Manfre met employee protests over the
lower rates with the comment they could "take it or leave
it." The unit employees all chose to "take it."
D. Continued and Changed Operations and
Procedures
1. Continued
Anita continued to operate the store in the same location
as the previous owner, namely, at 57 South First Street,
San Jose, California. Anita continued to utilize the Arden
name on the store. Anita continued to use the same fixtures
and supplies (racks, hangers, boxes, and plastic bags for
packing merchandise sold, cash register, etc.). Anita
continued the same managerial and bargaining unit
personnel in its employ. The employees exercised the same
skills and performed the same duties they had exercised
and performed under Tanne-Arden. The basic character of
the business remained unchanged-the retail sale of
women's apparel and children's clothing (Anita continued
30 and June 5, contained their new rate and they admittedly consulted with
Manfre in filling out blanks in those applications . In addition , Manfre's
clear and unequivocal testimony to her advising the employees of their rates
under Anita on May 30-31 and May 30 posting of the document was
corroborated by Aorta's district director , Shirley Bradley, who saw the
posted document near the weekly work schedule on May 31, and on weekly
visits thereafter , in a position where the employees could not help but notice
(when checking their weekly work schedules).
506 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
to carry approximately 10 percent of its inventory in
children's clothing as had Tanne -Arden).
2. Changed
Anita sought to change the market emphasis of the store
by changing the type of women's apparel from a line
designed to attract the "mature " woman to a line designed
to attract the "junior" woman . In pursuit of that change of
emphasis, Anita dropped half sizes and large sizes (which
constituted approximately 30 percent of the inventory it
found upon taking over the store ); phased out foundation
garments and lingerie items; marked down the Tanne-
Arden inventory to sell it off as quickly as possible, and
stocked the store with the Anita line.
Anita also changed practices and procedures at the store
to conform with the uniform practices and procedures of
the Anita chain. To accomplish this, Anita instituted the
use of sales slips and merchandise tags , which were not
utilized by the former owner; over a period of time
following the takeover, Anita sought to man the store with
more part-time and fewer full-time employees and to
compensate sales employees with both salaries and
commissions (the employees were mostly full time and on
straight salary under the previous owner); Anita changed
policies regarding merchandise exchanges , refunds, and
customer credit (Anita did not extend credit , as the former
owner had); and Anita changed accounting methods,
report requirements , display techniques, rack locations,
and markdown procedures to conform with its uniform
practices at other stores.
E. Union Recognition, Dispute Over New Wage
Rates, etc.
As noted heretofore, on May 26 Anita sent and on May
30 the Union received a letter wherein Anita stated it was
retaining Tanne-Arden's nonsupervisory employees at
store 127, recognized the Union as their exclusive repre-
sentative for collective -bargaining purposes , and was
prepared to negotiate a contract covering the wages, hours,
and working conditions of those employees , but, pending
the outcome of such negotiations , it was installing Anita's
compensation programs , policies, and practices.
On June 16, the Union confirmed its receipt of Arden's
letter, stated it desired a meeting but that it expected Anita
to maintain the wages , working conditions , health , welfare,
and pension benefits set out in the Tanne-Arden/Union
contract and supplement, referred to heretofore, pending
such meeting.
On July 5, Anita responded with an offer to meet with
the Union at a mutually convenient time.
On July 13, the Union set out availability dates and
informed Anita it was filing charges with the Board over
the Company 's unilateral reduction of wages and benefits
prior to meeting.
On July 14, the Union filed the charges which led to this
proceeding.
On July 17, Anita advised the Union it would meet with
it on one of the availability dates set out by the Union.
The parties met subsequently but did not reach agree-
ment on contract terms.
The changed and lower rates of pay, hours, and working
conditions placed in effect by Anita on May 30 have
continued since that date , except as further changed by
Anita since then.
F. Analysis and Conclusions
1. Unit and union majority
The Union was certified in 1960, and was subsequently
contract-recognized by Tanne-Arden through August 31,
1973, as the exclusive collective-bargaining representative
of all Tanne-Arden employees at store 27, excluding
guards, watchmen , and supervisors , as the latter terms are
defined in the Act.
The services of the employees in the above unit were not
interrupted by the change in ownership from Tanne-Arden
to Anita-the last day they worked for Tanne-Arden was
Saturday, May 27; the store was closed on Sunday, May
28, and Monday, May 29 (for the Memorial Day Holiday);
when the store reopened on Tuesday, May 30, the unit
employees worked for Anita as they reported for work
thereafter on their regular schedules.
When a contract provision is in existence which provides
that an employer recognizes a union as the exclusive
collective-bargaining representative of his employees with-
in an appropriate unit and a new owner continues the same
work force in his employ, a presumption arises that the
union's majority representative status within the unit
continues unchanged , unless rebutted by substantial
evidence .8 In view of its carryover of all unit employees on
May 30, Anita recognized the Union as the exclusive
representative of its employees within the unit upon its
purchase of store 127 from Tanne-Arden and made no
effort to rebut the foregoing presumption.
I therefore find and conclude that a unit consisting of all
of Anita's employees at store 127, excluding guards,
watchmen , and supervisors , as the latter terms are defined
in the Act, is an appropriate unit for collective-bargaining
purposes under Section 9 of the Act , and that at all times
since May 30 the Union has represented a majority of
Anita's employees within that unit .9
As noted above , there was no interruption in the
employment of the unit employees. They continued in the
same jobs , performing the same duties under Anita as
under Tanne-Arden. There were only minor changes in
their duties to conform to new procedures (use of sales
slips, merchandise tags, etc.). There was no change in store
location, name, or the use of the racks, hangers , garment
bags, cash register , etc., utilized by Tanne-Arden. Neither
was there a change in the basic character of the
business-the retail sale of women's apparel and children's
clothing. No change at all occurred in the latter category,
a Barrington Plaza and Tragniew, inc., 185 NLRB 962, 964 , and cases whether the extension resulted from increased buying volume , reduction of
cited herein . hours of full-tune employees and addition of part timers to implement its
a The record discloses there were five employees in the unit on or about chainwide policy of relying primarily on part -time employees , or other
May 30 and seven by the time of hearing ; the record does not disclose causes.
ARDEN'S
and the change in the former was limited to a change in the
type and style of women's apparel carried by the store.
I therefore find and conclude that the "employing
industry" remained unchanged and unaffected by the
change in ownership, and that Anita was a successor
employer to Tanne-Arden, as that term has been defined
and applied in cases arising under Section 8(a)(5) and (1)
of the Act. . .
3. Anita's obligations as a successor employer
The General Counsel and the Union contend that Anita
was obligated, as a successor employer, to recognize the
Union as the exclusive collective-bargaining representative
of its employees at store 127 within the unit covered by the
Tanne-Arden/Union contract, to consult with the Union
concerning the rates of pay, wages, hours, and working
conditions of the unit employees and to desist from making
any changes in the rates of pay, wages, hours, and working
conditions of the unit employees from those prevailing on
May 27 until it consulted the Union concerning any
changes therein and bargained in good faith regarding its
proposed changes to impasse or agreement.
While not conceding it was a successor to Tanne-Arden,
Anita does not take serious issue with the contention,
assuming it was a successor employer under the Act, that it
had a duty to recognize and bargain with the Union
concerning the rates of pay, wages, and working conditions
of the unit employees since, in fact, Anita recognized the
Union and bargained with it.
Anita takes the position, however, that it and any other
successor employer has the right to institute such initial
rates of pay, wages, hours, and working conditions as it
wishes and to maintain or change them at will unless and
until it reaches an agreement with the Union to any fixed
rates of pay, wages, hours, or other conditions of
employment.
While the Supreme Court in the Burns case,10 ruled that
a successor employer could not be required under the Act
to assume the contract of a predecessor employer, it went
on to state that where "it is perfectly clear that the new
employer plans to retain all of the employees in the unit
... it will be appropriate to have him initially consult the
employees' bargaining representative before he fixes
terms ." (Emphasis added). In subsequent cases , both the
Board and this circuit (C.A. 9) have ruled that in situations
such as that described by the Supreme Court, i.e., where a
successor employer plans to and does retain the employees
of his predecessor and the predecessor had a contract with
a union covering those employees spelling out their rates of
pay, etc., the successor employer violates Section 8(a)(5)
and (1) of the Act by instituting rates of pay, etc., which
differ from those established under such contract if it does
so before consulting with the union over such changes.11
The evidence clearly establishes, in this case, that prior to
its commencement of operation of store 127 Anita
informed the Union that it planned to retain all of Tanne-
Arden's employees within the unit represented by the
Union and, in fact, did so. This plan and its reality is
10 N.L. R. B. v. Burns International Security Services, Inc., 406 U.S. 272
(1972).
11 Good Foods Manufacturing and Processing Corp., 200 NLRB No. 86;
507
attested to by Anita's May 26 letter to the Union and the
testimony of J. Hardcastle.
It is further clear that Anita did not intend to consult
with the Union prior to instituting its lower rates of pay,
wages, hours, and other working conditions, since its May
16 notice of its proposed changes and offer to consult was
so timed as to make it impossible for the Union to respond
to the offer prior to the effectuation of the changes; the
changes were made at the commencement of business on
May 30; the Union received the offer to consult by regular
mail at ordinary mail delivery time that same day.
4. Waiver or estoppel
Anita seeks to resist the conclusion normally flowing
from the foregoing by contending estoppel or waiver to
protest the changes on the grounds the unit employees
accepted the new wage scales on May 30 and 31 when
informed of them upon reporting for work and the Union's
failure to respond to its consultation offer until June 16.
Anita directed an ultimatum to the employees upon their
initial reporting for service, i.e., to either "take or leave"
the rates of pay, wages, hours, and other working
conditions it decided upon. Employee acceptance of
employment under these conditions hardly constitutes a
waiver of their and the Union's right under the Act to
protest Anita's failure to consult with the Union prior to
their institution, or estop them from protesting. By
recognizing, in its May 26 letter, that the Union was the
majority collective-bargaining representative of the em-
ployees in question, the Company obligated itself to
consult with the Union and not with the employees
concerning their rates of pay, etc., prior to making changes
therein.
Nor does the Union's June 16 reply to the Company's
announcement of its unilateral program constitute a waiver
or estoppel. Anita prevented any consultation prior to
institution of the changes by placing the changes in effect
prior to delivery of its offer to consult with the Union about
them; Anita itself made it impossible for the Union to
insist on retention of the existing rates of pay, etc., pending
consultation with Anita concerning its changes therein.
Thus, the fact the Union's protest came 2 weeks later is
irrelevant.
Based upon the foregoing, I find and conclude that, by
its May 30 unilateral establishment of rates of pay, wages,
hours, and working conditions for the unit employees,
which differed from the rates of pay, wages, hours, and
working conditions of its predecessor, Tanne-Arden,
without affording the Union an opportunity to consult
with it concerning the changes therein, prior to their
institution, Anita violated Section 8(a)(5) and (1) of the
Act.
CONCLUSIONS OF LAW
1. At all times material, Anita was an employer
engaged in commerce in a business affecting commerce
Howard Johnson Co., 198 NLRB No. 98; N.L.R.B. v. Denham Co., 469 F.2d
239 (C.A. 9, 1972).
508 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
and the Union was a labor organization as those terms are
defined in Section 2(2), (5), (6), and (7) of the Act.
2. At all times pertinent, a unit consisting of all regular
full-time and regular part-time employees employed at the
store located at 57 South First Street, San Jose, California,
excluding guards, watchmen , and supervisors as those
terms are defined in the Act, constituted an appropriate
unit for collective-bargaining purposes within the meaning
of Section 9 of the Act.
3. At all times pertinent, the Union has been the duly
designated collective-bargaining representative of a majori-
ty of the employees within that unit.
4. For purposes of the Act, at times pertinent, Anita
was a successor employer to Tanne-Arden with respect to
the store and employees located at 57 South First Street,
San Jose , California.
5. By its May 30 changes in the rates of pay, wages,
hours, and other working conditions of the unit employees
from those prevailing immediately prior thereto, without
prior consultation with the Union concerning such
changes, Anita violated Section 8(a)(5) and (1) of the Act.
6. The aforesaid unfair labor practices affect commerce
within the meaning of Section 2(6) and (7) of the Act.
THE REMEDY
It having been found that Anita has engaged in unfair
labor practices in violation of Section 8(a)(5) and ( 1) of the
Act, I shall recommend that Anita be directed to cease and
desist therefrom and to take certain affirmative action
designed to effectuate the policies of the Act.
In order to make the unit employees whole for the losses
they suffered by reason of Anita's unfair labor practices, I
shall recommend that Anita be directed to restore to the
unit employees the rates of pay, wages, hours, and other
benefits they received immediately prior to Anita's May 30
changes therein. I shall further recommend that Anita be
ordered to make the unit employees whole for any wage or
benefit losses which they have suffered by virtue of Anita's
May 30 changes therein , for a period commencing May 30
and extending to the date the rates of pay and other
benefits are restored to their prior levels, together with
interest thereon at the rate of 6 percent per annum. I shall
also recommend that Anita be ordered to continue in effect
the rates of pay, wages, hours, and other benefits and
working conditions in existence immediately prior to May
30 until such time as Anita has negotiated in good faith
with the Union to agreement or to impasse.
Finally, inasmuch as Anita has recognized the Union
and offered to negotiate and negotiated with it concerning
the rates of pay, wages, hours, and working conditions of
the unit employees, and to effectuate the purposes of the
Act, I shall recommend that Anita be directed to continue
to recognize the Union and to continue to bargain with the
Union at its request concerning the rates of pay, wages,
hours, and working conditions of the unit employees until
such time as agreement or impasse is reached.
[Recommended Order omitted from publication.]