Fugazy Continental Corp.

National Labor Relations Board - Board Decisions

Sep 14, 1977

231 N.L.R.B. 1344 (N.L.R.B. 1977)

DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Fugazy Continental Corp. and Aldo Capella, Albert
Shiffman, Eugene Ritter, Thomas P. Green, Lloyd
Lipoff, Joseph Aquila, and Paul Osit. Cases 29-
CA-4773, 29-CA-4817, 29-CA-4825, 29-CA-
4931, 29-CA-4931-2, 29-CA-4931-3, and 29-
CA-4931-4
September 14, 1977
DECISION AND ORDER
BY CHAIRMAN FANNING AND MEMBERS
JENKINS AND MURPHY
On February 15, 1977, Administrative Law Judge
Herbert Silberman issued the attached Decision in
this proceeding. Thereafter, Respondent filed excep-
tions and a supporting brief, the General Counsel
filed cross-exceptions and a supporting brief, and
Respondent filed an answering brief. In addition,
Respondent filed a motion to reopen the record, the
General Counsel filed a reply in opposition, and
Respondent filed a reply to the General Counsel's
opposition.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the
National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
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, to
modify his remedy,' and to adopt his recommended
Order, except as modified herein. 2
In agreeing with the Administrative Law Judge
that the franchise operators herein involved are
employees and not independent contractors under
the Act, we are relying in major part upon his
findings that: (I) although the franchise drivers pay a
substantial price for their franchises and, in some
cases, have sold their franchises at a profit, the
franchises are issued for only a relatively short 2-year
In accordance with our decision in Florida Steel Corporation, 231
NL RB 651 (1977), we shall apply the current 7-percent rate for periods pnor
to August 25. 1977. in which the "adjusted prime interest rate" as used by
the Internal Revenue Service in calculating interest on tax payments was at
least 7 percent.
2 Respondent filed a motion to reopen the record to contest the
Administrative Law Judge's finding that the 28 strikers named in the
Administrative Law Judge's Decision were not required to apply for
reinstatement after the strike ended on February I, 1976, since it would have
been futile for them to have done so. Respondent contends that the futility
theory was not alleged in the complaint, or litigated in the hearing, and that
it, therefore, had no opportunity to present evidence to refute the
considerations upon which the Administrative Law Judge based his
findings. Attached to its motion Respondent presented affidavits from
rainchise operators who had engaged in the strike and who were thereafter
unconditionally reinstated without any loss of benefits.
We deny Respondent's motion. We find that the futility theory was
implicit in the complaint and litigated at the hearing. Moreover, we find that
Respondent's offer of proof would not change the basis for the Administra-
231 NLRB No. 175
period subject to renewal, with the provisions being
unilaterally established by Respondent, and can for
various reasons be terminated without any effective
recourse; (2) the type of vehicle used, standards with
respect to dress and conduct, the amount of
insurance, as well as other business details are
specified by Respondent; (3) most aspects of the
business, except for the actual transportation of
customers, are conducted from Respondent's premis-
es, including receiving customer orders, dispatching,
billing customers, and paying drivers; (4) the fare
structure and the division of fares are unilaterally
established by Respondent, as well as the securing of
practically all customers; (5) the franchise drivers as
a practical matter must obtain their insurance
through Respondent and use the Respondent-owned
and -operated carwash for which they pay an
administration fee; (6) Respondent has the power,
and has taken steps, to enforce standards of conduct
which can result in loss of a franchise or suspension
of work.
While it appears that the Administrative Law
Judge considered the current franchise agreements
established in 1975 and subsequent years, his factual
findings are in part based upon the 1973-75 franchise
agreements. We have carefully examined the current
agreements, and note that they differ in language in
some aspects from the 1973 agreements. Thus,
operators are no longer required to be available for
250 hours of livery bookings a month, nor is
Respondent required to use its efforts to provide 250
hours of work a month; franchise operators are now
permitted to perform services for any livery operator;
operators can now hire permanent as well as
temporary employees; operators are permitted to
show their own business location as well as Respon-
dent's on their business cards; and provisions that
franchises could be terminated if the operations were
discontinued for 7 days without fault or for 30 days
for any reason have been eliminated. Operators are,
as in the 1973 agreements, encourage to develop their
tive Law Judge's findings. Significantly, 10 of the I I franchise operators who
indicated in affidavits that they were unconditionally reinstated were
strikers who had abandoned the strike before February I, 1976, and thus
were not in the same position of franchise operators who continued striking.
The one reinstated franchise operator, Max Gans, who had not abandoned
the strike was required to execute a new franchise and pay Respondent
$2,500 (in cash or by promissory note). Moreover, Gans was required to
submit himself to an interview by a screening committee composed of
members of management and nonstriking franchise drivers. as well as sign a
general release in favor of Respondent which, among other things, would
release Respondent from all claims of unfair labor practice discharge
allegations, including claims for reinstatement.
Chairman Fanning and Member Jenkins, while agreeing that it would
have been futile for the 28 striking franchise operators to have applied for
reinstatement, would not in any event place the burden upon the
discriminatorily discharged strikers, but would require Respondent to
unconditionally offer the discharge franchise operators reinstatement on the
date the strike ended. See their dissent in Michael Muldoon Elder, d/ /a
Vorpoal Galleries, 227 NLRB 446 (1976).
1344
FUGAZY CONTINENTAL CORP.
own customers, but now have to give Respondent 35
percent, rather than 20 percent, of such fares
collected.
Upon consideration of the record as a whole, we
find, however, that the current agreements do not
detract from the Administrative Law Judge's ulti-
mate conclusions, based upon the factors summa-
rized above; that Respondent maintains extensive
control over the franchise operators not only as to
results but as to the means to be used in obtaining
results: and that the ability of the franchise operators
to be entrepreneurs is greatly restricted. Significantly,
there is no showing in the record that the current
agreements have resulted, or will result, in any
marked differences between the working relation-
ships of the franchise operators and Respondent and
those which previously existed. We also note that the
1975 agreements, like the 1973 agreements, were
unilaterally promulgated and that Respondent con-
tinues to determine all major aspects of the working
relationship with the franchise operators.
Nor do we find merit in Respondent's contention
that the written agreement entered into with the
Franchise Owners Association in September 1975
was a collective-bargaining agreement and conse-
quently was a bar to an election which made illegal
the picketing by the franchise operators for recogni-
tion in December 1975. The agreement is at best a
supplement to the unilaterally imposed individual
franchise agreements. In the circumstances, the
agreement could hardly be called a collective-bar-
gaining agreement since it was an extension of the
individual franchise agreements. Moreover, while the
agreement, in certain cases, was applied to franchise
operators who were not parties, on its face it was a
members-only agreement and, thus, in any case,
could not serve as a bar to a represention petition by
the Union, or to restrict recognitional picketing.
Respondent does not deny that it has failed to pay
franchise operators who went on strike moneys due
them as of the date of the strike. Respondent
contends that it failed to do so because the franchise
operators flatly refused to return vehicles and radio
equipment in which it had a monetary stake and that
its decision was not discriminatorily motivated. We
find little specific support in the record for this
blanket treatment of the striking franchise operators,
and we agree with the Administrative Law Judge that
the failure to pay the strikers for moneys to which
they were entitled was not based upon economic
considerations, but was in retaliation for the drivers
having exercised their Section 7 rights in violation of
Section 8(a)(1) and (3) of the Act.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor
Relations Board adopts as its Order the recommend-
ed Order of the Administrative Law Judge, as
modified below, and hereby orders that the Respon-
dent, Fugazy Continental Corp., Queens, New York,
its officers, agents, successors, and assigns, shall take
the action set forth in the said recommended Order,3
as so modified:
1. Insert the following as paragraph l(d) and
reletter the subsequent paragraph accordingly:
"(d) Insisting that employees who engaged in a
lawful strike execute a release purporting to absolve
the Respondent from the consequences of its unfair
labor practices as a condition to their reinstatement
or as a condition of the sale of their vehicles."
2. Substitute the attached notice for that of the
Administrative Law Judge.
The Administrative Law Judge made findings which were inadvertentl)
omitted from his recommended Order and notice, and we shall modify his
recommended Order accordingly.
APPENDIX
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
WE WILL NOT question employees about their
union activities or the union activities of other
employees, including whether they had signed
union authorization cards or whether they would
support a strike.
WE WILL NOT threaten employees with dis-
charge, physical harm, or other reprisals for
participating in a lawful strike or for engaging in
other concerted activities protected by the Act.
WE WILL NOT discharge or otherwise discrimi-
nate against employees in regard to their hire,
tenure of employment, or other terms and
conditions of their employment in order to
discourage membership in Division 1181-1061,
Amalgamated Transit Union, AFL-CIO, or any
other labor organization.
WE WILL NOT discharge or otherwise discrimi-
nate against employees in regard to their hire,
tenure of employment, or other terms and
conditions of their employment because they may
have participated in a strike or may have engaged
in other activities protected by the Act.
WE WILL NOT insist that employees who
engaged in a lawful strike execute a release
purporting to absolve us from the consequences
of our unfair labor practices as a condition to
1345
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
their reinstatement or as a condition of the sale of
their vehicles.
WE VWILL NOT in any other manner interfere
with, restrain, or coerce employees in the exercise
of the right to self-organization, to form, join, or
assist labor organizations, to bargain collectively
through representatives of their own choosing, to
engage in other concerted activities for the
purpose of collective bargaining or other mutual
aid or protection, or to refrain from any and all
such activities.
WE WILI. offer the employees named below
immediate and full reinstatement to their former
positions or, if those positions no longer exist, to
substantially equivalent positions, without preju-
dice to their seniority and other rights and
privileges, dismissing, if necessary, any persons
hired as their replacements. The employees to
whom we shall offer such reinstatement are:
Sanford Adler
Aldo Capello
Frank Doca
James F. Grady
Jim Eaglestan
Cornelius B. Evans
Henry Finkel
Steve LeGrady
Emanuel Lewis
Lloyd Lipoff
Louis Manzione
Donald McCann
Georg Meyer
Calvin Middlebrooks
David W. Miller
Thomas C. Monahan
Paul Osit
Michael Osteerhoudt
Stephen J. Pepper
Carl Roa
Albert Shiffman
Max Gans
Albert J. Grady
Thomas P. Green
Edward F. Kelly
E.O. Kotti
Henry Feinstein
Ernest Roane
Stanley A. Rocke
Albert C. Richter
Eugene Ritter
Andrew J. Salamone
Nicholas Sangeudolce
Frank J. Scalavino
Ernest Seltzer
Edward R. Moore
Michael A. Tusa
Jose A. Vieto
Michael F. Wall
Joseph Aquilar
WE WILL. make each of the above-named
employees whole for any loss of earnings and any
other losses he may have suffered by reason of
our unlawful discrimination against him, with
interest. Among such losses for which we will
make the employees whole are: moneys which
were earned but not paid to them prior to
December 11, 1975; the loss in the value of their
respective franchises between the date on which
we should have offered each of the above
employees reinstatement to his former position
and the date on which we shall make such offer of
reinstatement; the $2,500 penalty assessed against
the franchise drivers who joined the strike which
began on December 11, 1975, and who thereafter
returned to work.
WE WILL, upon request of David Miller,.
complete the sale of the limousine which we
heretofore had contracted to sell to him.
FUGAZY CONTINENTAL
CORP.
DECISION
STATEMENT OF THE CASE
HERBERT SILBERMAN, Administrative Law Judge: Upon
charges filed in the above-numbered cases between
December 19, 1975, and May 5, 1976, an order consolidat-
ing the cases and an amended complaint therein were
issued on June 22, 1976. The amended complaint alleges
that Fugazy Continental Corp., herein called the Compa-
ny, has engaged in, and is engaging in, unfair labor
practices within the meaning of Section 8(aXI), (3), and (4)
of the National Labor Relations Act, as amended.
Respondent filed an answer to the amended complaint
denying that it has engaged in the alleged unfair labor
practices and asserting several affirmative defenses. A
hearing in this proceeding was held in Brooklyn, New
York, on various days between July 6 and September 2,
1976. Pursuant to leave granted the parties at the hearing,
briefs were filed on behalf of General Counsel and
Respondent.
Upon the entire record in this case, and from my
observation of the witnesses and their demeanor, I make
the following:
FINDINGS OF FACT
1. THE BUSINESS OF RESPONDENT
The Company, a Delaware corporation, is engaged in
providing limousine and other transportation services from
a garage which it maintains in Queens, New York.
Respondent's annual revenue from its operations is in
excess of $500,000 of which more than $50,000 represents
income for services performed for scheduled airlines. Also,
Respondent purchases goods and materials valued in
excess of $50,000 annually which are transported to its
facility in Queens, New York, through channels of
interstate commerce directly from locations outside the
State of New York. I find that Respondent is an employer
within the meaning of Section 2(2) engaged in commerce
within the meaning of Section 2(6) and (7) of the Act.
II. THE LABOR ORGANIZATION INVOLVED
Division 1181-1061, Amalgamated Transit Union, AFL-
CIO, herein called the Union, is a labor organization
within the meaning of Section 2(5) of the Act.
1346
FUGAZY CONTINENTAL CORP.
Ill. THE ALLEGED UNFAIR LABOR PRACTICES
A. The Issues
1. The pleadings
Despite a transcript of record of more than 3,000 pages
there is only minimal dispute concerning the material and
relevant events. The findings of fact set forth below have
been made after consideration of such conflicts of evidence
as were developed during the 16 days of hearing.
Respondent provides limousine service to the public.
Except for approximately a half dozen so-called house
drivers, Respondent's customers are driven by limousine
operators who have purchased franchises from the Compa-
ny. An issue is whether the franchise operators are
employees or are independent contractors.
About November 18, 1975, the Union commenced a
drive to organize the franchise operators.' Active in
support of this drive was Albert Shiffman whose relation-
ship with the Company was terminated on December 10,
1975. The complaint alleges that Shiffman's termination
violated Section 8(a)(1) and (3) of the Act.
The complaint further alleges that:
A. On and after December 10, 1975, Respondent, in
violation of Section 8(a)(I), infringed upon employees'
Section 7 rights by: (I) interrogating employees concerning
membership in and activities on behalf of the Union; (2)
warning and directing employees to refrain from becoming
or remaining members of the Union or giving support or
assistance to the Union; and (3) promising and granting its
employees franchise repayments and other benefits to
induce them to refrain from giving assistance to the Union
and to abandon membership in and activities on behalf of
the Union.
B. On December 11, 1975, its franchise operators went
on strike; 2 the strike continued until January 7, 1976; and
the strike was caused and prolonged by Respondent's
unfair labor practices.
C. On December 12, 1975, Respondent discharged 55
named employees "and other employees whose identities
are presently unknown" because they joined and assisted
the Union and engaged in said strike; since December 15,
1975, Respondent has refused to pay Albert Shiffman and
the 55 individuals named in the complaint "earned wages
payable to said employees," and thereby Respondent has
further violated Section 8(a)( ) and (3).
D. On December 18, 1975, and thereafter on various
dates through February 1976, 29 individuals named in the
complaint (all of whom are listed as being among the 55
who had been discharged) "and other employees of
Respondent whose identity is presently unknown, through
their representative the Union, and individually, made
unconditional offers to Respondent to return to work and
to their positions of employment" and "because said
employees participated in the strike described above in
paragraph 15, because they engaged in other concerted
activities for the purposes of collective bargaining, because
they filed charges under the Act and because they were
I According to Respondent's witnesses the house dnvers are represented
bv Iocal 819, International Brotherhood of Teamsters. Chauffeurs, and
Warehousemen of America.
named in charges filed under the Act," "[o]n or about
December 18, 1975 Respondent refused to reinstate the
employees named ... in paragraph 20, and since said date
has continued to refuse to reinstate said employees to their
former positions of employment, but did reemploy said
employees under the conditions as described below in
paragraphs 23 and 24." (Emphasis supplied.) Paragraphs
numbered 23 and 24 read as follows:
23. Since on or about December 18, 1975, Respon-
dent has conditioned its reemployment of employees
discharged as described above in paragraphs 12, 13, 14
and 16 and 17, and of employees requesting reinstate-
ment described above in paragraph 20 upon said
employees waiving rights protected by Section 7 of the
Act, including, inter alia, (a) submitting themselves to
interrogation concerning said employees' membership
in, activities on behalf of, and sympathy in and for the
Union, (b) obtaining clearance by a group consisting of
agents of Respondent and of employees who did not
participate in the strike as described above in para-
graph 15(c) abandoning their adherence to and mem-
bership in the Union (d) paying to Respondent the sum
of $2500.00 (e) waiving payment by Respondent of the
earned wages payable to them as described above in
paragraphs 18 and 19 and (f) signing a general release
waiving all monies and benefits to which said employ-
ees were entitled to prior to the strike as described
above in paragraphs 18 and 19, including monies and
benefits to which said employees were entitled under
individual employment agreements with Respondent.
24. Since on or about December 15, 1975, Respon-
dent, in addition to the conditions as described above
in paragraph 23 has further conditioned its reemploy-
ment of employees, upon said employees withdrawing
charges filed under the Act, removing their names as
discriminatees in charges filed under the Act by others,
and upon their waiving reinstatement, backpay, and
other rights to which they may be entitled under the
Act.
The foregoing is alleged to constitute violations of Section
8(a)(1), (3), and (4).
Respondent, in addition to its general denial, alleges that
the Board lacks jurisdiction in this proceeding. I find no
merit to this defense. Respondent also alleges as an
affirmative defense that the New York State Department of
Labor has determined that the Company's franchise
operators are independent contractors, and not employees.
I find no merit to this defense as the Board consistently has
held that such determinations by state agencies are not
binding upon it.
2. Motion to strike testimony
Respondent was incorporated in the State of Delaware
on November 29, 1972, and was authorized to do business
in the State of New York on March 12, 1973. At the
hearing decision was reserved on a motion by Respondent
2 As of the date of the strike there were approximately 97 franchise
drivers and 6 house drivers.
1347
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
to strike all testimony concerning events that predate
March 12, 1973, because such testimony refers to a
different corporation.
The evidence shows that a New York corporation,
Fugazy Continental Corp. of New York, herein called
"Continental," prior to March 12, 1973, among other
ventures, was engaged in the livery business which it
operated in Queens, New York. At the end of February
1973 Continental discontinued its livery operations and
sold its customers list to Respondent. The Company
thereupon entered into essentially the same business that
Continental had given up and acquired a lease to the same
premises from which Continental had conducted its livery
business. The operator franchises which had been sold by
Continental were assumed by Respondent and the fran-
chise drivers continued to perform the same services for
Respondent that they had performed for Continental. The
stockholders, directors, and officers of the two corpora-
tions are different. However, William Fugazy, who is the
principal executive of Respondent, had owned 20 percent
of the outstanding stock of Continental and had been
chairman of its board of directors although he was not
active in the management of its business. Also, for a period
of 9 or 10 months after Respondent commenced operations
management personnel of Continental assisted the Compa-
ny.
In regard to the pending motion General Counsel, in her
brief, states: "The evidence over the period of time since
the incorporation of Respondent to [the] present Itime] is,
we suggest, more than sufficient. Thus, we need not discuss
whether the evidence as to pre-incorporation time should
or should not be considered." In view of the position taken
by General Counsel I shall not rely upon any evidence
which antedates March 12, 1973, except that as Respon-
dent assumed the outstanding franchises which had been
sold by Continental and as the franchise operators who
had performed services for Continental continue to
perform services for Respondent, I will deny Respondent's
motion to the extent that it refers to the franchise
agreements received in evidence at the hearing which
antedate March 12, 1973, and to the extent that it refers to
testimony concerning such franchise agreements.
B. Status of the Franchise Operators
1. The franchise agreements
The threshold question in this case is whether during the
period when the alleged unfair labor practices occurred,
from approximately November 1975 to February 1976, the
franchise operators were employees within the meaning of
the Act. The franchise agreement in evidence executed by
Albert Shiffman on December 13, 1973, is typical of the
contracts under which the franchise drivers operated
during the critical period.3 The significant and relevant
provisions of the agreement, in summary, are the follow-
ing:
' The terms of earlier franchise agreements and franchise agreement
executed after February 1976 differ in some respects from the contract
which is summarized here.
I The so-called standard franchise contract has been changed from time
A statement that "[i]t is the intention of the parties
hereto that Franchisee shall be an independent contrac-
tor and exercise control over the manner and means of
the operation of his business."
Payment by the franchisee of a nonrefundable
franchise fee in the amount of $10,500. (Vice President
Fugazy testified that "when the company started they
sold a limousine franchise for $45 hundred and that
presently it sells for $12,500.00.")
A term of 2 years. Franchisee has the right to renew
the contract without paying an additional franchise fee
for successive 2-year terms "upon his giving to the
Franchisor at least thirty (30) days notice by certified
mail, prior to the expiration date, of the exercise of this
renewal privilege. Such subsequent contracts shall be
on terms and conditions of the Franchisor's standard
franchise contract then being offered to new Franchis-
es." 4 (The evidence is that no franchise operator gave
Respondent or Continental written notice of renewal
and, except for the case of Albert Shiffman, no
franchise was deemed to have lapsed for such reason.
Lloyd Lipoff testified without contradiction that he was
informed by Company Vice President Ben Dipilla, who
is responsible for selling franchises, that it was not
necessary for franchise operators to furnish the Compa-
ny with written renewal notices as the franchises
automatically are renewed.)
Franchisee may sell his franchise subject to approval
by the Company of the intended purchaser, which
approval shall not be unreasonably withheld, and by
paying the Company a fee of 15 percent of the market
value of the franchise provided the franchise operator is
not in default under any terms of the agreement.
The Company will use its best efforts to provide the
franchisee a maximum of 250 hours of "livery vehicle
business" per month and the franchisee, who shall not
operate any more than one vehicle, shall be available to
handle at least 250 hours of bookings per month.
Franchisee shall have the right to employ "tempo-
rary employees." (The Company does not withhold
state or Federal income taxes from the earnings of
franchise operators or pay social security or unemploy-
ment insurance taxes for them and does not cover them
with workmen's compensation. Similarly, the Company
does not treat persons hired by the franchise operators
as employees of the Company. Franchise operators hire
persons to drive their vehicles when the franchise
operators are on vacation or on days when they are not
driving their own vehicles, and the franchise operators
establish and pay the wages of their drivers.)
Fares for trips made by the franchisee are divided
between the franchisee and the Company on the basis
of 65 percent to the driver and 35 percent to the
Company except for fares subject to New York Port
to time and the various changes may be deemed to have had in some
instances a favorable and in other instances an adverse effect upon the
contract nghts of the franchise operators.
1348
FUGAZY CONTINENTAL CORP.
Authority fees which are divided 60-40. Driver gratui-
ties are not shared.5 The Company guarantees the
franchisees payment of their share of the fares.
Franchisee agrees to perform services for no other
livery company.
Franchisee may obtain his radio-equipped livery
vehicle from any source but the franchisor reserves the
right to approve the type of equipment. (While many
franchise operators lease their vehicles from the
Company others have purchased their vehicles outright
from the Company or from other sources.)
Franchisee shall maintain his own vehicle and shall
pay all fees and expenses "incurred in the operation of
his business."
Franchisee agrees to maintain insurance coverage in
amounts satisfactory to the franchisor.
The Company has the right to terminate the
franchise upon the occurrence of specified events
including failure of franchisee "to conduct his opera-
tions in manner befitting a luxury livery vehicle service
so as to reflect credit upon the name, good will, and
trademarks of the Franchisor." In the event of the
termination of the franchise agreement no portion of
the franchise fee is refundable.
In the event of the expiration or termination of the
franchise agreement the franchisee will not perform
livery vehicle services for any of the franchisor's present
or past customers.
In its brief Respondent makes certain assertions which
are not supported by the record. Respondent argues that
franchise operators have the right to engage in "any other
business." There is no evidence that this has occurred at
any time. Respondent argues that "many of respondent's
franchises are purchased strictly for investmant. Approxi-
mately 10 percent of the franchise owners have never even
driven their limousines, but, instead, have the limousines
operated by their employees." There is no evidence to
support this assertion. Also, Respondent argues that
"[fJranchises are presently owned by corporate entities."
The evidence in this respect is that some time after January
1976 Anthony Masone and his brother formed a corpora-
tion, Andy's Executive Transportation, Inc., which corpo-
ration purchased two franchises from the Company in
order that Anthony Masone and his brother, who are the
stockholders of the corporation, could operate limousines
subject to the terms of the franchise agreements.
Although the franchises purport to define the relation-
ship between the Company and the operators, that alone is
not controlling. Consideration also must be given to the
interpretation of the franchise terms as reflected by the
parties' conduct in the performance of their respective
obligations thereunder and by such other relevant facts as
were developed by the evidence adduced at the hearing. If
the extrinsic evidence does not contradict the terms of the
franchise agreements then the intention of the parties as
" Earlier agreements provided that the franchises would keep a
suhstantially larger proportion of the fares obtained from customers
proiided by themselves and not by the franchisor.
X Ritter further testified that in July of the same year he arranged to
purchase the franchise of Pat Adonolfi. About l0days after he and Adonolfi
reflected therein would be deemed to define the relation-
ship between them.
2. Purchase and sale of franchises
Operators who purchased their franchises directly from
the Company usually did so by making a down payment of
approximately 25 percent of the purchase price and by
executing a promissory note providing for payment of the
balance in monthly installments over a period of up to 5
years together with interest thereon. There is evidence that
some franchise operators who desired to do so were able to
sell their franchises. Thus, Eugene Ritter testified that he
originally purchased a franchise in April 1968 for $5,500
and in 1973 sold his franchise to the Company for $7,500.6
Also, Frank Scalavino testified that he purchased his
franchise from another driver, John McDermott.
Regarding the resale of franchises is the following
paragraph in a letter from William Denis Fugazy to Karl
Boecker, dated April 29, 1975, which General Counsel
introduced in evidence:
Concerning the resale of franchises, we agree that any
drivers wishing to resell their franchises can do so on
their own or we would agree to resell them as best we
are able. Since November, we have repurchased six
large limousine franchises, and we have only resold
three of them. We certainly do not intend to advance
the money on a resale until we are able to collect the
money from the new purchaser. We certainly do not
intend to be selling franchises when there are men
waiting for their own franchises to be resold. We have
never done this.
3. Termination of franchises
The franchise agreement gives to the Company the right
to terminate the franchise for any of the various reasons
stated in the contract. In regard thereto General Counsel
introduced in evidence a memorandum from William
Denis Fugazy to all franchise drivers, dated December 10,
1974, in which, among other things, is stated:
During my last meeting with the men, I was asked if
I would consider a clause in our contracts whereby
each and every man would be given the right to
arbitration, in the event management decided to
terminate his franchise. I agreed to this. During the past
weeks we have had several individuals who have caused
us to suspend and possibly terminate.
In each of these cases we have advised those individu-
als that they were entitled to arbitration, in order to
determine whether or not our action was proper or
improper. Obviously, if the franchisee is successful in
the arbitration, we must reinstate him without preju-
dice. We agreed to do this and we intend to keep our
word and honour our commitment.
had entered into the agreement Ritter was informed bs the Company that
the Company had canceled Adonolfi's franchise because of breaches of the
agreement on the part of Adonolfi. Ritter subsequently recovered $5,000 of
the moneys he had paid Adonolfi. Ritter thereafter purchased another
franchise directly from the Company.
1349
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Further, in the same connection the letter of April 29,
1975, from William Denis Fugazy to Karl Boecker, which
General Counsel introduced into evidence, among other
things, states:
You asked me about whether or not we would agree to
arbitration in the event a driver was terminated. I
promised this last November, and, since then, I have
agreed to arbitration on every case where a driver was
terminated. None of these drivers chose arbitration
because I think they knew they didn't stand a chance.
However, we willing, will agree to arbitration on
termination cases.
In addition to the foregoing, General Counsel introduced
in evidence a letter dated June 4, 1974, from William Denis
Fugazy to Clyde Bledsoe in which Bledsoe was informed
that "Because of your recent conduct in physically
assaulting a Fugazy Continental Corporation customer,
you are hereby advised that your franchise has been
terminated."
General Counsel also introduced in evidence the award
of Arbitrator Bernard Davis, dated November 13, 1975, in
which the arbitrator found that the termination of the
franchise of Abraham Dahan was unjustified and directed
the Company to pay the grievant Abraham Dahan the sum
of $4,347.16, the amount paid by him to the Company on
account of the purchase price of the franchise, and the
further sum of $2,500, earnings lost by Dahan as a result of
the unjustified termination of the franchise. It would
appear that the Company, as of the date of the hearing in
this matter, had not complied with the arbitrator's award
and also that, although Abraham Dahan purportedly
retained Murray L. Lewis in respect to the matter, no
motion to confirm the award has been made nor have any
other steps been taken by Dahan, or in his behalf, to
enforce compliance with the award.
Finally, the franchise operators went on strike on
December 11, 1975. By letter dated December 12, 1975, 39
franchise operators (paragraph numbered 16 of the
· complaint lists 55 franchise operators) were sent the
following letter:
Pursuant to the provisions of paragraph 5, of the
Franchise Agreement entered into between you and
Fugazy Continental Corporation, you agreed to con-
duct your business operations in a manner befitting a
luxury livery vehicle service so as to reflect credit upon
the name, good will and trademarks of Fugazy
Continental Corporation. As stated in that paragraph
your agreement to so conduct your business operations
were "of the essence" to this agreement.
The undignified manner in which you behaved at the
corporate garage on both Thursday, December 1,
1975, and Friday, December 12, 1975, constituted
flagrant violations of your agreement. Your deliberate
behavior on these days certainly evidenced a breach of
trust as referred to in paragraph 8, of the Franchise
Agreement.
Eugene Ritter testified that at one time the franchise operators received
their stipulated percentage of the fares before discounts were taken, but that
Therefore, and in accordance with the provisions of
paragraph 8, of the Franchise Agreement, we have
elected to terminate this agreement, effective immedi-
ately.
4. Fares
Although the income of the franchise operators is a
percentage of the customer charges, the Company unilater-
ally establishes such fares and from time to time makes
changes in the fare structure. The division of the fares
between the Company and the franchise operators is based
upon the net amount received by the Company after all
customer discounts have been taken. 7
5. Uniforms and behavior
William Fugazy testified that in keeping with the luxury
service offered by the Company it is necessary to impose
standards with respect to the dress of the operators, the
appearance of their vehicles, and the courtesies which the
drivers are required to extend to customers, and for the
Company to try to enforce these standards. Thus, franchise
drivers are required to wear a dark business suit with a
white or a blue shirt, an appropriate tie, and a conventional
chauffeur's cap. On November 7, 1974, William Denis
Fugazy issued a memorandum to the franchise operators in
which, among other things, he warned them against
operating their vehicles when not in uniform and when not
wearing their caps and also warned them about the poor
appearance of their vehicles. He cautioned, "This is going
to come to an end, and fast!! or the operators will not be
allowed to handle our business. I am going to personally
inspect as many cars as I can, as well as the men, and if I
am dissatisfied with the appearance of the men or the cars,
we will not give out any work to that operator for a period
of time. The same will apply to men not wearing their hats
if they are seen by me in the city or at the airports. I am
personally going to take proper action."
On December 26, 1974, Sal Sciremammano, the Compa-
ny's manager of base operations, issued a memorandum to
the franchise drivers in which, among other things, he
informed them that "[w]hile a great improvement has
occurred during the last few months in the appearance of
the men, we have still found it necessary to take action on
some of the drivers who still continue not to wear their
proper uniforms and not to wear their hats. It is necessary
that every driver wear his hat whenever he has a client in
his car."
Testimony was also adduced that at meetings which
company management held with franchise drivers from
time to time subjects such as their dress, when they should
leave the garage to pick up fares, and related matters were
discussed.
6. The dispatch system
The Company has charge of dispatching the franchise
drivers to pick up customers. A daily list is maintained at
the Company's garage and franchise operators are dis-
at some later time this practice was changed. No corroboration of Ritter's
testimony in this respect was offered.
1350
FUGAZY CONTINENTAL CORP.
patched to jobs in the order in which their names appear
on that list. There is no requirement that the franchise
operators report to the garage and sign the dispatch sheet.
Operators are given assignments by telephione, either when
they call the garage or when the garage calls them.
However, preference is given to those drivers who report to
the garage and sign the dispatch sheet. The testimony of
William Fugazy and John Fugazy is that a franchise driver
may turn down any job assigned to him. But, there is
evidence that drivers have been threatened with suspension
if they refuse to perform an assigned job. It would appear
that if the dispatch system is to be operated in a manner
which will be fair to all the franchise drivers, no one can be
permitted regularly to refuse the poor jobs and accept only
the desirable jobs.
The evidence indicates that an area of controversy
among the drivers and between the franchise operators and
the Company was the functioning of the dispatch system. It
is logical that that would be so. The franchise drivers would
be less than human if they did not maneuver to avoid the
less profitable and more onerous assignments and try to
obtain the better jobs.
7. Discipline
From time to time and for various offenses franchise
drivers were threatened with suspension or were suspend-
ed. Suspension meant that for the period involved the
affected driver was not dispatched to jobs. Thus, William
Denis Fugazy in a memorandum to the franchise drivers,
dated December 10, 1974, pointed out that "[d]uring the
past weeks we have had several individuals who have
caused us to suspend and possibly terminate."
On August 12, 1974, Ed Forrester, who is in charge of
security for the Company, on a written form noted his
recommendation that franchise driver Max Gans should be
suspended for 1 week because there was a "complaint of
rudeness and attempting to secure monies for parking &
tolls from Mrs. Coffina."
On June 24, 1975, according to a memorandum in
evidence, franchise driver Fevier was suspended for I day
because he refused to leave the garage when dispatched to
a job, because he stated that he would decide how long it
took to get to the job and would leave when he wanted to,
and because of foul and abusive language on his part which
disrupted the general operation of the garage.
Eero Kotti testified that in August or September 1974 he
lost 3 hours' work because the dispatcher refused to send
him out to any job until he changed his shirt. Lloyd Lipoff
testified that on one occasion he was suspended for 2 days
for refusing to do a certain job and on another occasion
was threatened with suspension for a similar reason.
Similarly, Eero Kotti testified that he had been threatened
with suspension or termination by Sciremammano, manag-
er of base operations, if he refused to work on weekends.
Sometime in 1975 the Company developed a form for use
in describing grievances against individuals. This form was
used to describe a violation against franchise driver David
Miller, which occurred on October 16, 1975, allegedly for
"driving on 59th Street Bridge toward city with Oriental
passengers, was not wearing uniform cap at that time." The
form recommended that Miller should be warned and
admonished personally and that there should be "contin-
ued surveillance." The same form was used to describe a
violation against franchise driver Ernest Roane for using
obscene and foul language in the crew dispatch area at one
of the airlines. The recommendation was that Roane
should be restricted from entering crew dispatch areas and
that he should not receive any work that would require his
presence in such areas. The form further shows that this
was the third grievance against Roane in the past 2 months.
Roane used a similar form to file a grievance against a
dispatcher with respect to an occurrence on November 13,
1975. The investigation of the latter grievance was
conducted by Ed Forrester who concluded that Roane's
grievance did not have merit and that "Roane's attitude is
very poor and he takes only jobs that are to his liking and
received many considerations from dispatchers in the past.
In view of Roane's past two complaints it appears that
management should have a discussion with Ernie
Roane.... We find that dispatcher acted in good and
proper manner and believe that this should be considered a
grievance against Roane."
The record does not reflect how frequently representa-
tives of the Company threatened to discipline or in fact
suspended franchise drivers.
8. Purchase or lease of vehicles
The franchise drivers may purchase or lease their
vehicles from the Company or from any other source. The
franchise operators are individually responsible for the
maintenance of their vehicles and have personal possession
and use thereof.
The Company's policy in regard to the purchase or lease
of vehicles is expressed in a letter from William Denis
Fugazy to Karl Boecker, dated April 29, 1975, in which it is
stated:
You asked me whether or not we would permit the
franchise operators to lease or buy their own cars from
someone other than ourselves. The answer is yes. The
greatest thing in the world would be if all the drivers
would lease or buy their cars from someone other than
ourselves. We are losing money and are required to
guarantee millions of dollars in leases because the
franchise operators are not strong enough financially to
warrant a lease or purchase on their own. These cars,
however, must be Lincolns, must be the color we
require, and must have the necessary equipment to
properly represent our company and our image.
The foregoing was confirmed by a memorandum from
William Denis Fugazy to the franchise operators dated
April 30, 1975, in which it is stated,
I believe that Karl conveyed to all of the men the fact
that we agree to permit the men to buy or lease their
vehicles from any company or firm they wish, provided
it is a Lincoln-Continental and is the proper color and
model as currently used. We have agreed to permit
1351
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
those franchises who have vehicles other than Lincolns
to utilize them during the remainder of 1975.8
The continuing right of operators to drive Cadillacs
became a subject of arbitration involving six franchise
operators who then were using Cadillacs. On November 26,
1975, Arbitrator Richard A. Rosenberg issued a decision in
the matter in which he found: "The equities mandate that
those employed, independent franchise owner-operators
affected by this proceeding may continue to exercise their
prerogative to utilize Cadillacs rather than Lincolns, during
the term of their franchise agreements." There is no
evidence in the record that the Company has refused to
abide by this decision.
Although the franchise drivers are personally responsible
for the maintenance of their vehicles, the Company has
installed a carwash in its premises, which the drivers may
use as frequently as they wish. However, each driver is
charged $20 per month whether or not he desires to take
advantage of the car wash facility.
The franchise operators theoretically are privileged to
obtain their automobile insurance from any source, but as
a practical matter insurance is only available to them as
part of a fleet policy which the Company obtains. In
apportioning the premium for the fleet insurance among
the drivers the Company charges each franchise driver a
monthly sum which it calls an administrative fee and
which, according to William Denis Fugazy, is intended to
reimburse the Company for its expenses in obtaining and
maintaining the fleet insurance policy.
9. Hours of work
Although in theory an individual may purchase a
franchise for investment there is no evidence that that has
happened; rather, the evidence is that the franchise
operators depend upon their labors as drivers for their
principal income. The franchise agreement requires the
franchisee's vehicle to be available 250 hours a month. As
that is more than any one person can regularly work
franchise operators employ temporary drivers to work for
them on their off days and when they are on vacations.
Nevertheless, from time to time, the Company has sought
to put pressure upon franchise operators to be available for
work on weekends and at other times when the Company
has difficulty covering customer calls.
There is no evidence that the Company has interfered
with the right of franchise operators to employ whomever
they choose to operate their vehicles except for one
instance when the Company refused to permit Albert
Shiffman to employ John Boyle to drive Shiffman's car
during a period of time when Shiffman was ill and unable
to work. According to Respondent's witnesses, Boyle was a
former franchise owner whom the Company believed
would cause difficulties if he was permitted to operate a
vehicle from the Company's premises.
I The problem with regard to the use of Cadillacs is reflected in a
memorandum. dated September 30, 1975, from John C. Fugazy to the
franchise drivers in which it is pointed out that the Company had received
complaints from customers who were transported in Cadillacs because the
( ompany's advertisements represent that it uses Lincolns in the perfor-
mance of its services. Also, it is pointed out that the Company's contract
with the Loew's Hotel chain specifies that the Company is to use only
10. Conclusions
The Board applies "the common law right-of-control test
in resolving the recurring issue of employee versus
independent contractor status of owner-drivers and non-
owner-drivers. Under this test, an employer-employee
relationship exists when the employer reserves not only the
right to control the results to be achieved, but also the
means to be used in obtaining the results. On the other
hand, where the employer has reserved only the right to
control the ends to be achieved, an independent contractor
relationship exists."9 In regard to "such a situation . . .
there is no shorthand formula or magic phrase that can be
applied to find the answer, but all of the incidents of the
relationship must be assessed and weighed with no one
factor being decisive. What is important is that the total
factual context is assessed in light of the pertinent
common-law agency principles." 0o The significant matters
of fact developed at the hearing pertaining to the question
are the following:
1. The franchise drivers pay a substantial price to
purchase their franchises and have the right, which the
evidence shows has been exercised from time to time, to
sell their franchises. In at least one instance the franchisee
was able to effect a sale at a profit. However, the franchises
are issued for a relatively short term of 2 years subject to
renewal. And, upon renewal, the terms of the franchise
automatically change to conform to the Company's
"standard franchise contract then being offered." Such
changes can operate to the detriment of the franchisee, as
occurred when the franchisor reduced the franchisee's
share of fares from customers obtained by the drivers from
85 percent to 65 percent. Of greater significance is that the
Company has reserved to itself the right unilaterally to
terminate any franchise without refunding any part of the
franchise fee, and the reason for termination can be
capricious because the agreement gives to the Company
the right to cancel a franchise for failure "to conduct his
operations in manner befitting a luxury livery vehicle
service so as to reflect credit upon the name, good will, and
trademarks of the Franchisor." " The evidence shows that
Respondent exercised this prerogative arbitrarily to termi-
nate Albert Shiffman's franchise for the patently specious
reason that he failed to give the Company written notice of
renewal, and peremptorily terminated the franchises of 39
other drivers for concertedly withholding their services.
Also, in at least one instance, Respondent terminated a
franchise after it had been sold. While in theory the drivers
whose franchises were terminated have recourse to an
action at law against Respondent, the practical value of
such right is minimal. Once Respondent has confiscated
the franchisee's so-called investment in the franchise and
deprived him of the opportunity of pursuing his occupation
as a limousine driver, the likelihood that the franchisee will
have the financial resources to pursue successfully an
Lincoln sedans and in view of this the Company cannot send Cadillac
drivers to jobs originating at the Loew's Hotels.
9 41 NLRB Ann. Rep. 61 (1976).
o1 N.L.R.B. v. United Insurance Company of America, er al., 390 U.S. 254,
258 (1968).
" The franchise has no corresponding right to cancel his agreement and
obtain the refund of his franchise fee.
1352
FUGAZY CONTINENTAL CORP.
action at law would seem to be small. This is illustrated by
the case of Abraham Dahan whose franchise was terminat-
ed by the Company on December 17, 1974, who obtained a
favorable arbitration award against the Company on
November 13, 1975, and who so far as the record shows
still has not recovered any portion of the moneys awarded
him.
Although a capital investment in the enterprise from
which an individual expects to earn his livelihood suggests
that he may have a managerial or entrepreneural interest in
the business, where, as in this case, the investment is
subject to forfeiture at any time for arbitrary, vague, and
uncertain reasons the entrepreneural or managerial aspect
thereof is more illusory than real.' Furthermore, the
franchises are "not negotiated, but [their] terms are set
unilaterally by the [Company] and the drivers must take it
or leave it," 12 which also is incompatible with an
independent contractor relationship.
2. Among the matters of fact that are considered in
determining whether one acting for another is a servant or
an independent contractor is: "whether the employer or
the workman supplies the instrumentalities, tools and the
place of work for the person doing the work." 13 Here, the
franchise operator provides his own vehicle and is
responsible for its maintenance, although the evidence
suggests that a majority of the franchise drivers lease their
vehicles from Respondent. However, the Company at-
tempts to dictate to the drivers the specifications with
respect to model, color, and equipment for the vehicles
they may use. While this may not be unreasonable as
Respondent is trying to conform the service it renders to its
advertisements, the Company alone decides what represen-
tations it makes in its advertisements and the efforts by the
Company to compel the drivers to conform thereto tends to
attenuate the importance of their vehicle ownership as an
indicium of independent contractor status. Further, it is
from the Company's premises that all aspects of the
business-except the actual transportation of customers-
is conducted, including receiving customer orders, dis-
patching drivers, billing customers, paying drivers, and
even washing the cars.
3. Franchise operators hire persons to work for them.
The record does not reveal how extensive is this practice. It
is, however, limited to periods such as when the franchisee
is on vacation or on his days off. The franchise operators
earn their principal income from their own labors-and
not from the employment of other drivers-and this is
contemplated by the terms of the franchise agreement,
which gives the franchisee the right to use only "temporary
employees." 14 Further, the Company reserves to itself the
right, which right it has exercised, to reject the employment
by a franchise operator of any individual whom the
Company deems undesirable.
4. The Board has said: "One of the basic factors in
determining that an individual is an independent contrac-
12 ChecAer CaJ Association, Inc., 185 NLRB 182, 183 (1970).
:' Restatement (Second), Agenc § 220. pp. 485-486 (1958).
" Respondent does not contend that the franchise operators are
supervisors and the record herein would not support a finding that they are
supervisors within the meaning of the Act because of. among other reasons.
the emporary. sporadic. and limited employment of the auxiTiarv drivers.
APenn VIersatie l an Division of Penn Truck Painting and Lttering Corp.,
215 NLRB 843. 845 (1974).
tor is his opportunity to make business decisions affecting
his profit or loss." 15 There is little opportunity in this case
for a franchise driver to do so. The fare structure and the
division of fares is established by Respondent. The
customers for the most part are secured by the Company.
While a driver may solicit his own customers, the record
does not reveal how extensive this practice is and there is
no basis in the record for inferring that more than a
minimal income is derived by franchise drivers from their
own customers.' The Company operates the dispatch
system. The Company bills the customers and assumes the
risk that the bills will be paid. Also, the Company gives the
franchise drivers weekly drawings against a monthly
accounting. Thus, the only significant decision that a
franchise driver can make which affects his earnings is the
number of hours he works. Limitations exist even as to his
discretion with regard to the expenses he incurs in the
maintenance of his vehicle as he must use the Company's
carwash and as a practical matter he must obtain his
insurance through the Company and pay the Company a
nonnegotiated administration fee.
5. Further indicating employee rather than indepen-
dent contractor status are the following:
a. The Company imposes standards with respect to the
dress of the franchise operators, the appearance of their
vehicles, and the courtesies they are required to extend to
the customers, and the Company seeks to enforce these
standards.
b. The Company disciplines franchise drivers for
breaches of these regulations and for various other reasons.
c. Under the franchise agreement the franchisee is
prohibited from using his vehicle to perform services for
any other livery company and is required to make his
vehicle available 250 hours per month which leaves the
franchisee little opportunity to use the vehicle for any other
purpose.
Although the franchise agreement states that "[ilt is the
intention of the parties hereto that the Franchisee shall be
an independent contractor," on review of the conduct of
the parties in the performance of their agreement it would
appear that these words "amount to little more than
routine recitations in anticipation of future litigation."'7
The franchise agreement and the parties' practices thereun-
der give the operator only minimal discretion in the
management of his business affairs and the Company
exercises extensive control over the most significant aspects
of the franchise drivers' work. I find, therefore, that the
relationship between the Company and the franchise
drivers is that of employer-employee rather than indepen-
dent contractor.
C. The Discharge of AUert Shiffman
An organizational drive on behalf of the Union was
begun in mid-November 1975. Albert Shiffman was active
16 It would appear that some customers specifically request the services
of particular drivers and that, while the Company attempts to accommodate
the customers in that respect, nevertheless, for various reasons such
customer requests are not always honored.
1? Carrier Air Conditioning Co. v. N.L.R.B., 93 LRRM 3025. 3030. 79 LC
11. 773 (C.A. 2, 1976).
1353
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
in the campaign and in late November or early December
1975 William Fugazy learned that Shiffman was soliciting
union authorization cards. The Company was opposed to
union representation for its franchise drivers. This is most
clearly reflected by the fact that it peremptorily discharged
39 striking drivers on the day after the strike began. Also,
David Miller testified without contradiction that a year
earlier when he had contacted Local 819, International
Brotherhood of Teamsters, Chauffeurs and Warehousemen
of America, William Fugazy spoke to him about those
activities, told him that he was a troublemaker for trying to
bring in a union and that should a union become the
representative of the franchise operators the value of their
franchises would fall. Miller further testified without
contradiction that about a week before the December 11,
1975, strike "John Fugazy called me over and he said I
hear that you guys are signing union cards. And I said to
John Fugazy, I don't know anything about it. So, he said to
me well, you know, if you sign union cards, that you're all
going to be terminated, and all we're going to do is to take
the cars from you, and put other people in them, and you'll
be out."
On December 10, 1975, Albert Shiffman was summoned
to the office of William Fugazy who gave him a letter
which informed Shiffman that "inasmuch as you have not
exercised your renewal privileges, the franchise agreement
will terminate, pursuant to its provisions, on December 13,
1975." The Company's position is that Shiffman knowingly
failed to send to the Company a notice of renewal as
required by the terms of his franchise is and therefore the
Company was within its contractual rights to terminate
Shiffman's franchise. In its brief the Company argues:
Albert Shiffman's agreement terminated and he delijer-
ately chose not to renew knowing that same was
expiring. (See Shiffman p. 1584-85.) Shiffman wanted
to sell his franchise back to the respondent at his price.
He could have simply renewed it by mailing a certified
letter. He did not. The only goal Shiffman tried to
accomplish through these proceedings, was to have the
company buy his franchise back. (See Shiffman p.
1571-74; 1577-81). Upon his failure to renew, the
franchise agreement terminated. Respondent presented
this fact to Shiffman and since he failed to renew, there
was no obligation to purchase nor was the franchise
salable.
This contractual right was agreed upon by the parties
and is a personal right therein. The fact that none of the
other operators who testified, regarding this point,
'v Albert Shiflman testified that he had received information that his
franchise agreement was going to expire and that if he wished to renew it he
should write to the ('ompany.
'" William Fugazy testified that in September 1975 Shiffman approached
him about selling Shiffman's franchise to the Company. Shiffman wanted to
sell his franchise without paying a transfer fee and threatened that otherwise
there would be a; lot of trouble. About a month later, in October, Shiffman
inlformed William Fugazy that the Company would either pay him for his
{ranchise plus an additional sum of $8.00 (because Shiffman did not want
to proceed with an arbitration arising from the Company's refusal to permit
Boyle to drive his car during the period thot Shiffman was ill) or he would
cause the Company labor problems and it would have a strike. Shiffman's
versions of his conversations with representatives of the Company
concerning the possible sale of his franchise differ from Fugazy's testimony.
Hosweser, as the Company does not contend that Shiffman's franchise was
terminated for such reason it is unnecessary to resolve the conflict.
never renewed their agreements, is not at all binding on
respondent as to Shiffman or any other individual.
Permitting an operator to continue his franchise
without renewing creates an "implied renewal" thereof
for a period of two additional years. This does not
mean that respondent has waived its right under the
contract as to other franchises. 9
Respondent's argument is not persuasive. There is no
evidence in the record that any other franchise operator
ever had been terminated because of a failure to mail to the
Company a notice of renewal of franchise and Vice
President Dipilla informed at least one franchise driver
that the franchises were automatically renewed. According-
ly, I find that Respondent's termination of Shiffman was
motivated by some reason other than his failure to mail a
renewal notice. The evidence is that on December 9, 1975,
a representation petition was filed by the Union, the
Company knew that Shiffman actively had been promoting
the organizational drive and in fact William Fugazy had
telephoned and had complained to Robert M. Ziskin, an
attorney who represented an association of the franchise
drivers, about Shiffman's union activities, and the Compa-
ny was hostile to the representation of its franchise drivers
by the Union. In the circumstances, absent "legitimate and
substantial business justifications" for the termination of
Albert Shiffman, 20 I find that his franchise was terminated
and he was effectively discharged by the Company because
of his activities in support of the Union's organizational
campaign. I further find that by such conduct the
Company has violated Section 8(a)(3) of the Act and has
interfered with, restrained, and coerced employees in the
exercise of the rights guaranteed in Section 7 in violation of
Section 8(a)(1).
D. The Strike
On December 11, 1975, the Company's franchise drivers
went on strike21 and commenced picketing the Company's
garage with signs stating, "on strike" and the Union's
name. Although the evidence is inadequate to establish
that Respondent's unfair labor practices were the cause of
the strike, on December 12, 1975, the Company directed
letters, quoted above, to 39 of its franchise drivers
terminating their franchises, which constituted their effec-
tive discharges, because of their participation in the
strike.22 Respondent's discharge of its employees for
engaging in statutorily protected strike action, which
20 N.LR.B. v. Great Dane Trailers, Inc., 388 U.S. 26, 34 (1967).
21 William Fugazy testified that about I p.m. he had a telephone
conversation with the president of the Union and was informed that "he had
quite a few of our franchise operators there, and that they weren't going to
come back to work . ... The next thing I know, several hours later, there
was a picket line with men out in front of the garage."
22 The reason given by the Company in its letter to the franchise
operators for their termination is: "The undignified manner in which you
behaved at the corporate garage on both Thursday. December 11, 1975, and
Friday, December 12, 1975 constituted flagrant violations of your agree-
ment. Your deliberate behavior on these days certainly evidenced a breach
of trust as referred to in paragraph 8, of the Franchise Agreement."
Although Respondent contends that strikers damaged automobiles and
engaged in other offensive acts, no evidence was adduced at the hearing to
1354
FUGAZY CONTINENTAL CORP.
constitutes a violation of Section 8(aX)() and (3) of the
Act,23 absent evidence to the contrary, must be deemed to
have prolonged the strike.24 Accordingly, I find that as of
December 12, 1975, the strike was converted to an unfair
labor practice strike.
A question exists as to when the strike ended. In her brief
General Counsel argues:
Your Honor, we are sure in reviewing the record, has
noted, inter alia, various testimony and other evidence
as to when the strike terminated. Thus, apart from
other evidence, there is the following: Paragraphs 21-
24 of the Complaint refer to conditions placed on
operators who asked to return. (See Tr. pp. 19-20).
At pp. 19-20 Respondent's attorney Lian said that such
conditions were part of the settlement Respondent had
reached with the Union and with "the Complainants."
G.C. Ex. 56 is a copy of the telegram sent by
Respondent to all the strikers. It refers to "the
settlement reached by the union." This telegram is
dated January 16, 1976.
Thus, it is clear that by no later than January 16, 1976
the strike was over, and Respondent knew it was over.
Also, of course, also please see, inter alia, the testimony
of Gans, Middlebrooks, Scalavino, Manzione, Shiff-
man in this regard on the dates on the various
documents (G.C. Exhs. 29-32) which Gans had to sign.
Contrary to General Counsel, there is no evidence in the
record of any strike settlement agreement between the
Union and Respondent. The Company commenced a civil
action for damages in the Supreme Court of the State of
New York, County of New York, against 17 franchise
operators, including Eugene Ritter and Lloyd Lipoff, by
issuance of a summons dated December 16, 1976. In an
ancillary proceeding, on December 18, 1975, a temporary
restraining order was issued against the named defendants.
In evidence there are telegrams dated January 16 and
January 19, 1976, respectively, to Lloyd Lipoff and Eugene
Ritter which state:
In accordance with the settlement reached with the
Union, you are to surrender the radio equipment in
your vehicle to this Company immediately. The release
of our suit against you is subject to these radios being
returned. Further delay will prolong this settlement.
The phrase in the telegrams, "settlement reached with the
Union" refers to the disposition of the above-described
establish that an) such conduct occurred on or before December 12, 1975,
or that any named franchise drivers were responsible for the alleged
oflending acts. Thus, so far as the evidence shows, the only "undignified"
behavior which the Company referred to as "flagrant violations' of the
franchise agreement engaged in by the persons to whom the December 12
letters were directed was participation in the strike.
`:' Hilton Mobil Homes, 155 NLRB 873 (1965). enfd. 387 F.2d 7 (C.A. 8.
1967): N. L.R. .v. International Van Lines, 409 U.S. 48 (1972).
21 The burden is upon Respondent to demonstrate that the strike would
not have lasted as long as it did irrespective of its unfair labor practices
rather than for General Counsel to demonstrate the contrary. See Matlock
Truck Bodli & Trailer Corp. and its Agent Royw L Marlock. 217 NLRB 346
(1975i. particularly fns. 31 and 33.
civil action and other legal proceedings and not to a
settlement of the strike.
The General Counsel's reference in her brief to Attorney
Lian's statement at the opening of the hearing is incom-
plete. In full, his statement was:
This is all part of a settlement with the Union
attorneys and with the Complainants, wherein we were
here before the N.L.R.B., after the strike.
The Respondent did obtain an injunction because of
what was going on. There was certain violence and all
that. We got an injunction from the State Court.
We also pursued collection of rents for the certain
vehicles that the independent operators rented, and
since they were not using the vehicles, they were not
paying their rent, and we wanted the rent.
All of that, including Mr. Wilfred Davis, the Union's
attorney, myself, as representative of Fugazy, and
Fugazy's labor lawyer, who is not employed with this
proceeding, agreed that they would withdraw this claim
in the N.L.R.B., we would withdraw our cases in the
Supreme Court, and in the Federal Court, which we
did. All cases were discontinued.
Releases-some releases not all, some releases were
signed by some of these men, and new agreements were
thereafter issued. To some of them. The ones that
wanted to come back.
Thus, the settlement referred to by Attorney Lian in his
statement was to withdrawal by the Union of its pending
representation petition 25 and the Company's withdrawal of
its civil actions rather than to a strike settlement agree-
ment.
The evidence is that the picketing was discontinued on
some date between January 8 and early February 1976.
Further, upon questioning by his counsel, William Fugazy,
president and chairman of the board of directors of
Respondent, testified:
Q. . . . Now, when the strike was over, sometime, I
believe in January of 1976, is that correct?
A. Yes, Sir.
Q. Did any of the men offer to come back to work?
A. Many of them called me and said they wanted
to come back, yes.
Accordingly, I find that the strike ended on a date no later
than February 1, 1976,26 rather than on the date set forth in
the complaint or in General Counsel's brief.
25 On December 9, 1975. the Union filed a Petition for Certification of
Representative with Region 2 of the Board which was assigned Case
Number 2-RC-17171. The matter was transferred to Region 29 and was
assigned Case Number 29-RC-3253. Thereafter, on January 13, 1976, the
Union's petition was withdrawn. (At the hearing General Counsel
represented that the petition was withdrawn on January 8. but I have been
advised that the official records of the National Labor Relations Board
show the date to have been January 13.)
26 See C H. Guenther & Son, Inc. d, J/a Pioneer Flour Mills, 174 NLRB
1202 (1969), enfd. 427 F.2d 983 (C.A. 5, 1970), cert. denied 400 U.S. 952
(1970).
1355
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
E. Discharge of Strikers
General Counsel established through the testimony of
John Fugazy that a letter dated December 12, 1975, which
is quoted above, terminating their franchises was directed
to the following 39 franchise operators: 27
Sanford Adler
Aldo Capello
Frank Doca
James F. Grady
Jim Eaglestan
Cornelius B. Evans
Henry Finkel
Steve LeGrady
Emanuel Lewis
Lloyd Lipoff
Louis Manzione
Donald McCann
Georg Meyer
Calvin Middlebrooks
David W. Miller
Thomas C. Monahan
Paul Osit
Michael Osteerhoudt
Stephen J. Pepper
Carl Roa
As found above the
employees constituted
(3).
Max Gans
Albert J. Grady
Thomas P. Green
Edward F. Kelly
E.O. Kotti
Henry Feinstein
Ernest Roane
Stanley A. Rocke
Albert C. Richter
Eugene Ritter
Andrew J. Salamone
Nicholas Sangeudolce
Frank J. Scalavino
Ernest Seltzer
Edward R. Moore
Michael A. Tusa
Jose A. Vieto
Michael F. Wall
Joseph Aquilar 28
discharge of the above-named
a violation of Section 8(aX)(I) and
F. Reinstatement of Strikers
The complaint in paragraphs numbered 20 and 21 reads:
20. On or about December 18, 1975 and on various
other dates in December, 1975, and January through
February, 1976, the following named employees of
Respondent and other employees of Respondent whose
identity is presently unknown, through their representa-
tive the Union, and individually, made unconditional
offers to Respondent to return to work and to their
positions of employment: [The paragraph concludes
with a list of 29 names.]
21. On or about December 18, 1975, Respondent
refused to reinstate the employees named above in
paragraph 20, and since said date has continued to
refuse to reinstate said employees to their former
positions of employment, out did reemploy said employ-
ees under the conditions as described below in
paragraphs 23 and 24. [Emphasis supplied.]
27 Neither in her closing remarks nor in her brief has General Counsel
gisen the names of the persons whom she contends the evidence adduced at
the hearing proves were discriminatorily discharged.
IN David W. Miller, whojoined the strike, testified that he did not receive
his letter of termination but that on January 2 or 3, 1976, when he attempted
to return to work he was told to get out of the garage.
2'9 William Fugazy testified that when the strike was over "[m ]any of [the
striking franchise operators I] called me and said they wanted to come back
Ito work . yes." However, William Fugazy was not asked to give the names
of these individuals.
The evidence is that only the following eight persons listed
in paragraph numbered 20 of the complaint have returned
to work with the Company: Frank Doca, Henry Finkel,
Max Gans, Edward F. Kelly, Donald McCann, Calvin
Middlebrooks, Michael A. Tusa, and Jose A. Vieto. These
eight individuals had owned franchises which were termi-
nated and since December 11, 1975, secured new franchis-
es. In addition, Frank Scalavino, Ernest Roane, and David
Miller, after having joined the strike, attempted to return to
work and were refused reinstatement.
General Counsel in her brief argues:
We respectfully urge Your Honor to find that we
proved paragraph 20 of the Complaint. Thus, even
apart from the testimony of Middlebrooks, Gans,
Scalavino and Manzione as to themselves and other
specific named persons, there is the testimony of John
Fugazy at Tr. pp. 79-117, 117 et seq. as to persons
"repurchasing" franchises after the strike, and our
rejected offer of proof at p. 76 referring to testimony by
John Fugazy at pp. 58-76. 4 Moreover, G.C. Ex. 56, the
telegram, supra, as well as Respondent attorney Lian's
concession at pp. 19-20, supra, show that by January
16, 1976, a general request had been made as to all, and
specific requests at least to some.
4 Here, as elsewhere, we are not asking that Mr. Fugazy be credited.
Rather. we ask [that I his testimony in support of the General Counsel's case
be accepted as admissions.
Contrary to General Counsel, the testimony of John
Fugazy does not establish that any more than the eight
persons listed above repurchased franchises after the strike.
General Counsel's reference to Exhibit 56 and to the
alleged concession by Attorney Lian are discussed above
and do not show that by January 16, 1976, a general
request for reinstatement had been made on behalf of all
the striking franchise operators and do not show "specific
requests at least as to some." Contrary to General Counsel,
I find that the evidence in this case does not support the
assertion in the complaint that the Union requested the
.reinstatement of any franchise operators or that any
individuals other than those named above made uncondi-
tional offers to Respondent to return to work.29
Each of the eight franchise drivers who returned to work
was required to execute a new franchise agreement and to
pay the Company $2500 (in cash or by promissory note) in
addition to any amount that was still unpaid for his
terminated franchise. However, before they were permitted
to execute new franchises they were required to submit
themselves to interviews by a screening committee com-
posed of members of company management and nonstrik-
ing franchise drivers who, in the first instance, passed upon
whether they should be permitted to return to work.30 In
30 William Fugazy's explanation for the origin of the committee was:
"Many of the independent franchise operators . . . came to me and said
that they wanted me to know that they would resent strongly any of the ...
independent franchise operators coming back who had performed violence
against them, and had hurt our business as a result of their actions. And I
said well, what do you mean. They said well, we would like to have a
committee formed of ourselves to determine the propriety or the good
judgment in taking or not taking any people back." This explanation does
1356
FUGAZY CONTINENTAL CORP.
the exercise of this function the screening committee
refused to approve the reinstatement of at least two
franchise operators, Frank Scalavino and Ernest Roane.
Further, two other franchise operators, Max Gans and
Calvin L. Middlebrooks, as conditions to their return to
work, were required to sign general releases in favor of the
Company which, among other things, provided: "This
Release includes all claims of unfair labor practice
discharge including claims for reinstatement." 3'
The striking franchise operators learned from conversa-
tions among themselves and from members of manage-
ment of the conditions that had to be met before they could
return to work. Lloyd Lipoff, Eero Kotti, and Eugene
Ritter testified that among other reasons they did not seek
reinstatement is that they did not wish to comply with
those conditions.
Most of the franchise operators who were witnesses at
the hearing testified that the Company did not pay them
the moneys they had earned and which were due to them
for periods of one or more months immediately preceding
the strike. This testimony was not contradicted. In its brief
Respondent argues: "The record herein is void of any
measurement of 'wages' and absolutely no proof was
offered reflecting any guideline to determine what, if any,
'wages' were not paid." Although the amounts owed may
be in question, Respondent does not deny that it has failed
to pay the franchise operators who went on strike moneys
due to them as of the date of the strike. No reason having
been advanced by Respondent for such failure, in the
circumstances, a reasonable inference, and one which I
draw, is that Respondent refused to pay to the striking
employees the moneys due to them for work performed
immediately before the strike in reprisal for their having
joined the strike. Such retaliation constitutes unlawful
discrimination in violation of Section 8(a)(1) and (3) of the
Act. The amounts due to the striking employees will be
determined at the stage of this proceeding when the Board
determines precisely what will constitute compliance with
the terms of the Decision and Order herein.
G. Further Conclusions
I. Violations of Section 8(aX4)
Respondent's insistence that Max Gans and Calvin L.
Middlebrooks release it of "all claims of unfair labor
practice discharge including claims for reinstatement" as a
condition to their reinstatement and that David Miller
execute a similar release before the Company would
complete the sale of a limousine to him constitute
violations of Section 8(a)(4) and (I) of the Act.32
not excuse the Company's conduct. It is well established that an employer is
not exonerated from the consequences of his unfair labor practices because
he acted in response to the pressures of his employees.
:" Also, the Company refused to accept from David Miller the balance
due on the purchase price of a limousine and to transfer the title of the
vehicle to him unless he first signed a similar general release. I credit Miller
;although John Fugazy testified to the contrary.
N L. R. B. v. SI. Marvs Sewer Pipe Compani, 146 F.2d 995. 996 (C.A. 3.
1945). Further. to condition strikers' reinstatement on the execution of
general releases by which the strikers surrender rights accorded them by the
Act tends "to restrain (them] from using the legal procedures of the Act to
2. Interference, restraint, and coercion
Independent of other unfair labor practices, I find that
Respondent has violated Section 8(a)(1) of the Act by the
following:
A conversation which occurred about a week before the
strike between John Fugazy and David Miller wherein
John Fugazy asked David Miller what he knew about
union cards being signed and threatened that those who
signed union cards would be terminated.
The testimony of David Miller that William Fugazy told
Ernest Roane that "if he heard of him making trouble for
the rest of the people working . . . that he was going to
break his arm, and take his car."
The testimony of Frank Scalavino that on Christmas Eve
1975 when he and several other franchise operators met
with William Fugazy, "Mr. Fugazy wanted to know what
was the reason we went on strike ... Mr. Fugazy asked us
to turn the [union authorization] cards in and he would
consider taking us back."
The threat of physical harm directed to Albert Shiffman
by John Fugazy on December 12, 1975, while Shiffman
and others were picketing a company vehicle at the Plaza
Hotel in New York.
The testimony of Frank Scalavino and Max Gans that
when they were interviewed by the committee which
passed upon their eligibility to return to work they were
asked why they went on strike, and whether they would
join a strike should another be called in the future.
3. Reinstatement
The franchise operators who were discharged for partici-
pating in the strike which began on December 11, 1975,
were entitled to reinstatement to their former positions
upon applicetion.33 By refusing to reinstate Frank Scalavi-
no, Ernest Roane, and David Miller, who individually
applied for reinstatement, Respondent violated Section
8(a)(1) and (3). Additionally, reinstatement must be
without condition and the returning strikers were entitled
to all of their prior rights and privileges.34 Therefore, by
requiring Frank Doca, Henry Finkel, Max Gans, Edward
F. Kelly, Donald McCann, Calvin Middlebrooks, Michael
A. Tusa, and Jose A. Vieto to submit themselves to an
interview by a screening committee, to execute a new
franchise agreement, and to agree to pay to the Company
the sum of $2,500 with interest as conditions to their
reinstatement Respondent further has violated Section
8(a)(l) and (3).
There is no evidence that the following 28 striking
franchise operators applied for reinstatement:
vindicate their rights and thus constitute[d] a violation of the general
prohibition in Section 8(aXI) against coercion of'employees in the exercise
of the rights guaranteed in Section 7,' " Vogue Lingerie, Inc. v. N.LRB.,
280 F.2d 224. 226 (C.A. 3. 1930). Accord: Mid-West Paper Products Co., 223
NLRB 1367, 1379 (1976); John C Mandel Serurity Bureau Inc., 202 NLRB
117. 119 (1973).
13 N LR.B v. International Van Lines, supra.
34 N.LR.B. v. Jack C Robinson, dl b'a Ralinson Freight Lines, 2' 1 F.2d
639. 641-642 (C.A. 6, 1958). Accord: Rogers Manufacturing Comnrnp s.
N. L R. B.. 486 F.2d 644. 648 (C.A. 6, 1973).
1357
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Sanford Adler Carl Roa
Aldo Capello Albert J. Grady
James F. Grady Thomas P. Green
Jim Eaglestan E.O. Kotti
Cornelius B. Evans Henry Feinstein
Steve LeGrady Stanley A. Rocke
Emanuel Lewis Albert C. Richter
Lloyd Lipoff Eugene Ritter
Louis Manzione Andrew J. Salamone
Georg Meyer Nicholas Sangeudolce
Thomas C. Monahan Ernest Seltzer
Paul Osit Edward R. Moore
Michael Osteerhoudt Michael F. Wall
Stephen J. Pepper Joseph Aquilar
However, after having joined the strike they were unlawful-
ly discharged on December 12, 1975. Although they are not
entitled to backpay for the period when they were actively
participating in the strike,35 when the strike was discontin-
ued and they thereby evinced their availability for
employment, which I find occurred by February 1, 1976,
Respondent's statutory duty and obligation to offer them
reinstatement to their former positions was revived.3 6 They
"had no reason to notify the Company at the end of the
strike that [they were] ready to resume work. The
Company had already notified [them] that it no longer
desired [their] services. An application for reinstatement
would have been a completely useless ritualistic act....
[T]he Company itself must affirmatively offer reinstate-
ment to an unlawfully discharged employee, regardless of
whether or not the discharged employee makes application
for reinstatement." 37 Furthermore, based upon the treat-
ment accorded Frank Scalavino, Ernest Roane, and the
eight striking franchise drivers who returned to work, and
upon other evidence in the record, I find that Respondent
would not have permitted any of the striking franchise
drivers to return to work without first submitting them-
selves to an interview by the screening committee,
executing a new franchise agreement, and agreeing to pay
the Company $2500. As application for reinstatement to
their former jobs without surrendering their rights under
the Act would have been futile, the striking franchise
drivers are entitled to backpay from the date on which the
strike was discontinued, which occurred by February 1,
1976. 3 ~ and Respondent's failure then to offer them
reinstatement constituted a further violation of Section
8(a)(1) and (3).
IV. THE EFFECI OF THE UNFAIR LABOR PRACTICES
UPON COMMERCE
The activities of Respondent set forth in section III,
above, occurring in connection with its operations de-
scribed in section 1, above, have a close, intimate, and
::' alt;,eknA irulcA BodV & Trailer Corp. and its Agent Rqo L. Marlock,
:" General Niutrition Center. Inc.. 221 NLRB 850, 860 (1975); Kellogg
('Cootapmv. 189 NL RB 948, 950 fn. 7 (1971), enftd. 457 F.2d 519 (C.A. 6, 1972).
cert denied 409 U.S. 850 (1972).
N.I..R B. v. Soathern Greyhound Lines. Division oj Greyhound Lines,
Ir,.. 426 F.2d 1299. 1303 (C.A. 5, 1970). Accord: Shelit, & Anderson
faoniture Manflac/cturing C(o.. Inc. v. N. R B. 497 F.2d 1200, 1205 (C.A. 9.
1974). Virginiat Stage Lines. Inc. v. N' . R B. 441 F .2d 499, 503 504 (C.A. 4.
97 1 ). cert denied 404 U.S. 856 ( 1971).
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 unfair
labor practices, I shall recommend that it cease and desist
therefrom and that it take certain affirmative action
designed to effectuate the policies of the Act.
Having found that Respondent unlawfully discharged
Albert Shiffman on December 10, 1975, 1 shall recommend
that Respondent offer him immediate and full reinstate-
ment to his former job or, if that job no longer exists, to a
substantially equivalent position, without prejudice to his
seniority and to his other rights and privileges, and make
him whole for any loss of earnings he may have suffered by
reason of the discrimination against him by payment to
him of a sum of money equal to that which he normally
would have earned from December 10, 1975, to the date of
Respondent's offer of reinstatement less his net earnings
during such period. The backpay provided for herein shall
be computed on the basis of calendar quarters, in
accordance with the method prescribed in F. W. Woolworth
Company, 90 NLRB 289 (1950). Interest at the rate of 6
percent per annum shall be added to such backpay and
shall be computed in the manner set forth in Isis PlumSing
& Heating Co., 138 NLRB 716 (1962). I shall further
recommend that Respondent also pay to Albert Shiffman
any moneys which were due him as of December 10, 1975,
and which were not paid to him together with interest
thereon at the rate of 6 percent per annum from December
15, 1975, which was the date on which such moneys should
have been paid.
I have found that the 39 franchise drivers who joined the
strike on December 11, 1975, were unlawfully discharged
on December 12, 1975, and that upon their abandonment
of the strike by February 1, 1976, Respondent was under a
duty to offer each of them immediate reinstatement to his
former position. Eight of the striking franchise drivers have
returned to work since December 12, 1975. However, as
they were required to accede to unlawful conditions in
order to return to work, I find that they have not been
unconditionally reinstated to their former positions.3 9
Accordingly, I shall recommend that Respondent offer
each of the 39 striking franchise drivers whose names are
listed below immediate and full reinstatement to his former
job or, if that job no longer exists, to a substantially
equivalent position, without prejudice to his seniority and
other rights and privileges, discharging, if necessary, any
replacements hired on or after December 12, 1975, and
make each such employee whole for any loss of earnings
:I Eagle International. Inc., 223 NLRB 29 (1976). and cases there cited:
Moore Business Forms, Inc.. 224 NLRB 393 (1976). supplemental decision
226 NLRB 688 (1976).
19 David Miller testified without contradiction that he applied for, and
was refused, reinstatement on January 3, 1976. I shall direct that backpay
for David Miller commence as of January 3, 1976. However. there is no
clear evidence in the record as of what dates any of the other striking
franchise drivers applied for reinstatement. Accordingly, I shall direct that
backpay for the other 38 striking franchise drivers commence as of February
1, 1976, the date by which they had abandoned the strike.
1358
FUGAZY CONTINENTAL CORP.
that the employee may have suffered by reason of the
discrimination against him by payment to him of a sum of
money equal to that which he normally would have earned
from February 1, 1976, except in the case of David Miller
where the date on which backpay commences is January 3,
1976, to the date of Respondent's offer of reinstatement,
less the employee's net earnings during such period. The
backpay provided for herein shall be computed on the
basis of calendar quarters, in accordance with the method
prescribed in F. W. Woolworth Company, 90 NLRB 289
(1950). Interest at the rate of 6 percent per annum shall be
added to such backpay and shall be computed in the
manner set forth in Isis PlumJing & Heating Co., 138
NLRB 716 (1962). In addition, I shall recommend that
Respondent pay to each such franchise driver any moneys
which were due to him as of December 11, 1975, and which
were not paid together with interest thereon at the rate of 6
percent per annum from December 15, 1975, which was the
date on which such moneys should have been paid.
Each of the franchise drivers who was unlawfully
discharged by Respondent had entered into a franchise
agreement with Respondent pursuant to which he agreed
to pay a stipulated price for the franchise. Respondent's
witnesses have testified that the value of these franchises
fluctuate. If between the date on which each such franchise
driver should have been offered reinstatement and the date
on which Respondent does offer him unconditional
reinstatement the value of his franchise has fallen, that is a
capital loss which the franchise driver will suffer due to no
fault on his part. Accordingly, in order to make the
franchise drivers whole for all losses suffered by reason of
Respondent's discrimination against them, I shall also
recommend that Respondent pay to each franchise driver
the difference between the value of his franchise as of the
date on which Respondent should have offered that driver
reinstatement to his former position and the date on which
Respondent does offer him reinstatement. Further, I shall
recommend that Respondent refund the $2,500 penalty
assessed against the eight franchise drivers who returned to
work together with interest thereon at the rate of 6 percent
per annum.
I have found that Respondent unlawfully has refused to
complete the sale of a limousine to David Miller. I shall
recommend that, upon request, Respondent complete the
sale.
Respondent's unlawful activities, including its discrimi-
nator), discharge of Albert Shiffman and its unlawful
discharges of its striking employees, go to the very heart of
the Act and indicate a purpose to defeat self-organization
of its employees. The unfair labor practices committed by
Respondent are potentially related to other unfair labor
practices proscribed by the Act, and the danger of their
commission in the future is to be anticipated from
Respondent's conduct in the past. The preventive purposes
of the Act will be thwarted unless the recommended Order
herein is coextensive with the threat. Accordingly, in order
to make effective the interdependent guarantees of Section
7 and thus effectuate the policies of the Act, an Order
requiring Respondent to cease and desist from in any
manner infringing upon the rights of employees guaranteed
in the Act is deemed necessary. N.L.R.B. v. Express
Publishing Company, 312 U.S. 426 (1941); N.L.R.B. v.
Entwistle Mfg. Co., 120 F.2d 532 (C.A. 4, 1941).
The 39 employees who participated in the strike which
began on December 11, 1975, and whom I recommend that
Respondent offer immediate and unconditional reinstate-
ment to their former positions are:
Sanford Adler
Aldo Capello
Frank Doca
James F. Grady
Jim Eaglestan
Cornelius B. Evans
Henry Finkel
Steve LeGrady
Emanuel Lewis
Lloyd Lipoff
Louis Manzione
Donald McCann
Georg Meyer
Calvin Middlebrooks
David Miller
Thomas C. Monahan
Paul Osit
Michael Osteerhoudt
Stephen J. Pepper
Carl Roa
Max Gans
Albert J. Grady
Thomas P. Green
Edward F. Kelly
E.O. Kotti
Henry Feinstein
Ernest Roane
Stanley A. Rocke
Albert C. Richter
Eugene Ritter
Andrew J. Salamone
Nicholas Sangeudolce
Frank J. Scalavino
Ernest Seltzer
Edward Moore
Michael A. Tusa
Jose A. Vieto
Michael F. Wall
Joseph Aquilar
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. By discriminatorily discharging Albert Shiffman on
December 10, 1975, and by discriminatorily discharging on
December 12, 1975, its employees who concertedly ceased
work and who engaged in the strike which began on
December 11, 1975, and by failing to pay the employees
whom it discriminatorily discharged moneys earned by
them prior to December 11, 1975, thereby discouraging
membership in the Union, Respondent has engaged in and
is engaging in unfair labor practices within the meaning of
Section 8(a)(3) of the Act.
2. By insisting that employees who engaged in said
strike execute a release purporting to absolve Respondent
from the consequences of its unfair labor practices as a
condition to their reinstatement or as a condition to the
completion of the sale of a limousine, Respondent has
engaged in and is engaging in unfair labor practices within
the meaning of Section 8(a)(4) of the Act.
3. By interfering with, restraining, and coercing its
employees in the exercise of the rights guaranteed in
Section 7 of the Act, Respondent has engaged in and is
engaging in unfair labor practices within the meaning of
Section 8(a)(l) of the Act.
4. The aforesaid unfair labor practices are unfair labor
practices affecting commerce within the meaning of
Section 2(6) and (7) of the Act.
5. The strike of Respondent's employees which began
on December 11, 1975, was prolonged by Respondent's
unfair labor practices herein found.
1359
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Upon the basis of the foregoing findings of fact,
conclusions of law, and the entire record in this proceed-
ing, and pursuant to Section 10(c) of the Act, I hereby issue
the following recommended:
ORDER 40
Respondent, Fugazy Continental Corp., Queens, New
York, its officers, agents, successors, and assigns, shall:
I. Cease and desist from:
(a) Interrogating employees concerning their union
activities or the union activities of other employees,
including whether they had signed union authorization
cards or whether they would support a strike.
(b) Threatening employees with discharge, physical
harm, or other reprisals for participating in a lawful strike
or for engaging in other concerted activities protected by
the Act.
(c) Discharging or otherwise discriminating against
employees in regard to their hire, tenure of employment, or
other terms and conditions of their employment in order to
discourage membership in Division 1181-1061, Amalga-
mated Transit Union, AFL-CIO, or any other labor
organization.
(d) Discharging or otherwise discriminating against
employees in regard to their hire, tenure of employment, or
other terms and conditions of their employment because
they have participated in a strike or engaged in other
activities protected by the Act.
(e) In any other manner interfering with, restraining, or
coercing its employees in the exercise of the rights
guaranteed in Section 7 of the Act.
2. Take the following affirmative action which is
deemed necessary to effectuate the policies of the Act:
(a) Offer the employees named in the Appendix attached
hereto immediate and full reinstatement to their former
"' 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, and recommended Order herein shall, as provided in Sec.
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 wraived for all purposes.
jobs or, if those jobs no longer exist, to substantially
equivalent positions, without prejudice to their seniority
and other rights and privileges, dismissing, if necessary,
any persons hired as replacements on and after December
12, 1975 (except December 10, 1975 as to Albert Shiffman).
(b) Make each of the employees named in the Appendix
attached hereto whole for any loss of earnings and other
losses he may have suffered by reason of Respondent's
unlawful discrimination against him in the manner set
forth in the section of this Decision entitled "The
Remedy," and, upon request of David Miller, complete the
sale of the limousine heretofore contracted to be sold to
him.
(c) Preserve and, upon request, make available to the
Board or its agents, for examination and copying, all
payroll records, social security payment records, timecards,
personnel records and reports, accounts receivable, fran-
chises, and all other records and documents necessary to
analyze the amounts due to the employees against whom
Respondent has discriminated under the terms of this
recommended Order.
(d) Post at its place of business in Queens, New York,
copies of the attached notice marked "Appendix."41
Copies of said notice, on forms provided by the Regional
Director for Region 29, after being duly signed by
Respondent's representative, shall be posted by it immedi-
ately upon receipt thereof, and be maintained by it for 60
consecutive days thereafter, in conspicuous places, includ-
ing all places where notices to employees are customarily
posted. Reasonable steps shall be taken by Respondent to
insure that said notices are not altered, defaced, or covered
by any other material.
(e) Notify the Regional Director for Region 29, in
writing, within 20 days from the date of this Order, what
steps the Respondent has taken to comply herewith.
4i In the event that this 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."
1360