Michael Cetta, Inc. d/b/a Sparks RestaurantDownload PDFNational Labor Relations Board - Administrative Judge OpinionsNov 18, 201602-CA-142626 (N.L.R.B. Nov. 18, 2016) Copy Citation JD(NY)-43-16 New York, NY UNITED STATES OF AMERICA BEFORE THE NATIONAL LABOR RELATIONS BOARD DIVISION OF JUDGES NEW YORK BRANCH MICHAEL CETTA, INC. d/b/a SPARKS RESTAURANT and Case No. 2-CA-142626 Case No. 2-CA-144852 UNITED FOOD AND COMMERCIAL WORKERS LOCAL 342 Rebecca A. Leaf, Esq., for the General Counsel. Thomas J. Bianco, Esq., Marc B. Zimmerman, Esq., and Regina E. Faul, Esq., for the Respondent. Martin Milner, Esq., for the Charging Party. DECISION STATEMENT OF THE CASE Lauren Esposito, Administrative Law Judge. Based upon a charge in Case 02– CA–142626, filed on December 10, 2014, and amended on January 9, 2015, and upon a charge in Case 2-CA-144852, filed on January 22, 2015, by United Food and Commercial Workers Local 342 (“Local 342” or “the Union”), an Order consolidating cases, consolidated complaint, and notice of hearing issued on May 29, 2015 (the “complaint”). The complaint alleges that Michael Cetta, Inc. d/b/a Sparks Restaurant (“Sparks” or “Respondent”) violated Sections 8(a)(1) and (3) of the Act by failing and refusing to reinstate striking employees despite an unconditional offer to return to work, denying the striking employees their right to be placed on a preferential hiring list, and discharging the striking employees. The complaint further alleges that Sparks violated Section 8(a)(1) by soliciting employees to withdraw their support for the Union. On September 18, 2015, the Regional Director, Region 2 issued an Order amending complaint and amendment to complaint stating that as part of the Remedy General Counsel seeks an order requiring that Respondent offer reinstatement to all of the striking employees and make them whole from the date of their discharge, despite the fact that Respondent had previously hired permanent replacement employees. This case was tried before me on October 7, 9, and 13 through 16, 2015, in New York, New York. JD(NY)-43-16 2 After the conclusion of the trial, the parties filed briefs, which I have read and considered. Base on those briefs, and the entire record in the case, including the testimony of the witnesses and my observation of their demeanor, I make the following FINDINGS OF FACT5 I. JURISDICTION Sparks is a restaurant located at 210 East 46th Street, New York, New York, engaged in the sale of food and beverages. Sparks admits and I find that it is an 10 employer within the meaning of Section 2(2), (6), and (7) of the Act. Sparks stipulated at the hearing and I find that Local 342 is a labor organization within the meaning of Section 2(5) of the Act (Tr. 7). 15 II. ALLEGED UNFAIR LABOR PRACTICES A. The Facts 1. Background20 Respondent operates a steakhouse restaurant at its 210 East 46th Street location, preparing and serving food and drinks to individual customers and for private parties arranged on its premises (Tr. 245–246, 250). The restaurant is on two floors with some rooms for individual or “a la carte” dining and other small rooms for private 25 events (Tr. 249–250). Sparks is open Monday through Friday for both lunch and dinner, and on Saturday for dinner only (Tr. 246). Lunch begins around 11:30 a.m. or noon, and runs until approximately 3 p.m. (Tr. 246). Dinner begins at around 5 p.m., and continues until the customers with the last reservation finish their meals (Tr. 246). Sparks employs waiters and bartenders, as well as kitchen workers such as 30 cooks/chefs, dishwashers, and prep workers (Tr. 246–247). Respondent also employs an office manager, Shailesh Desai, and an assistant to Desai (Tr. 248). Desai testified at the hearing on behalf of Sparks. Michael and Steven Cetta are owners of Sparks, and its president and vice 35 president, respectively. Sparks stipulated at the hearing that Michael and Steven Cetta, as well as Maitre’d Valter Kapovic, were at all material times supervisors within the meaning of Section 2(11) of the Act, and agents of Sparks acting on its behalf within the meaning of Section 2(13) (Tr. 7). Steven Cetta testified at the hearing that as vice president he is responsible for overseeing “everything” and “everybody.” (Tr. 244.) In 40 addition to Kapovic, Sparks employs managers named Abdul, Ricardo (Cordero), Octavio, and Nick, all of whom report to Steven Cetta (Tr. 244–245). In addition, since 2009, Sparks has engaged Susan Edelstein as a human resources consultant (Tr. 287– 288). Edelstein testified in that capacity and as Custodian of Sparks’ personnel records (Tr. 288).45 JD(NY)-43-16 3 2. Events Prior to the December 10, 2014 Strike Local 342 was certified as the exclusive collective-bargaining representative of a unit of waiters and bartenders at Sparks on July 11, 2013, and since then the parties have had approximately 8 negotiating sessions but have not entered into a collective-5 bargaining agreement (Tr. 32–34, 174–175). Negotiations have been generally attended by Director of Contracts, Louis LoIacono, his executive assistant Mary Ann Kelly, representative Carolina Martinez, and Shop Stewards Kristofer Fuller and Valjon Hajdini for Local 342 (Tr. 99–100, 154, 175–176). Attorneys Marc Zimmerman and Regina Faul, Steven Cetta, and Susan Edelstein have attended negotiations for Sparks. 10 (Tr. 100, 176, 251.) After a bargaining session on December 5, 2014, frustrated with what they perceived of a lack of movement on the part of Sparks in negotiations, the waiters and bartenders decided to go on strike that evening (Tr. 34). The waiters and bartenders 15 went on strike for approximately 2 hours on the evening of December 5, 2014, from roughly 7 to 9 p.m., returning to work after making an unconditional offer (Tr. 34–35, 47, 55–56, 101–102). Waiter Valjon Hajdini testified that the next day, December 6, 2014, Manager 20 Valter Kapovic asked to speak with him when he arrived at work. The two spoke in the Madison Room downstairs, one of the rooms used for private parties. Hajdini testified that Kapovic said he was concerned about the waiters and bartenders’ going on strike. According to Hajdini, Kapovic stated that he was interested in buying the restaurant, and had investors, but that the strike would “drag the business down” and the investors 25 would “back off.” Hajdini stated that the waiters and bartenders “were not looking to go on strike again,” but were only looking for “a simple contract.” Hajdini stated that, “if you don’t want us to go on strike . . . make an offer that is easy for us to accept.” Kapovic said that he was going to talk to Steve Cetta, “and see if we can do something about that.” Kapovic then asked “can we vote the Union out” if he and his investors bought 30 the restaurant. Hajdini responded, “I don’t see why the Union bothers you. All we want is a simple contract—that we get treated fairly.”1 [Tr. 39–40.] 3. The December 10, 2014 Strike and Subsequent Events35 Frustrated with the lack of progress in negotiations, the waiters and bartenders began another strike at approximately 7 p.m. on December 10, 2014 (Tr. 35–36, 102– 105, 154–155, 252). A total of 36 employees engaged in the strike, 34 waiters and 2 bartenders.2 The nonstriking employees consisted of bargaining unit employees who 40 1 Kapovic did not testify at the hearing. 2 The bartenders and waiters who engaged in the strike beginning December 10, 2014, are Gerardo Alarcon, Fredy Albarracin, Marko Beljan, James Campanella, Ian Collins, Elvis Cutra, Arlind Demaj, Kristofer Fuller, Adem Gjevukaj, Valjon Hajdini, Elvi Hoxhaj, Juan Iriarte, Ante Ivre, Amir Jakupi, Bardhyl Kelmendi, Jeton Kerahoda, Milazim Kukaj, Rachid Lamniji, Valon Lokaj, Silvio Lustica, Iber Mushkolaj, Gani Neziraj, Kenan Neziraj, Xhavit Neziraj, Adnan Nuredini, Juan Patino, Sadik Prelvukaj, Francisco JD(NY)-43-16 4 decided not to participate in the strike and 5 employees referred to by Respondent as “seasonal” (Respondent’s posthearing br. at 34). Respondent stipulated at the hearing and I find that the strike which began on December 10, 2014, was concerted in nature (Tr. 7–8). 5 On December 19, 2014, the striking employees together with union representatives Steve Boris and John decided to make an unconditional offer to return to work. Bartender Elvi Hoxhaj testified that between 3:30 and 4:30 p.m. that day, he and the two union representatives decided that they would go into the restaurant and make an unconditional offer to return to work. As they entered the restaurant, they were 10 stopped in the vestibule by a security guard. Boris explained to security that Hoxhaj was a worker and they were union representatives, and that “they wanted to talk to management and ownership about an unconditional offer to return to work.” According to Hoxhaj, security told the group to stay where they were, and the security guard would go inside and convey the message. Hoxhaj then saw the security guard speak to 15 Kapovic, who was on the phone. After they spoke, one of the security guards returned to speak with Hoxhaj and the union representatives, who stated, “we’re just trying to get an unconditional offer to return to work.” The security guard responded, “I know, but they don’t want you in here.” [Tr. 156–159.] Other employees were subsequently informed by Boris that Local 342 had made an unconditional offer for the striking 20 employees to return to work, which Sparks had rejected (Tr. 59–60, 82–85). On December 19, 2014, at 8:55 p.m., Local 342 Secretary-Treasurer sent the following email to Marc Zimmerman: 25 Good evening. I am Lisa O’Leary, Secretary Treasurer of UFCW Local 342 and I am authorized to send you this email on behalf of Local 342. Local 342 today has made an unconditional offer to return to work, and that offer remains. President Abondolo shared with me his email exchange with you earlier today. I write again to confirm that the offer to 30 return to work is unconditional, and tied to no additional action being performed by your client. UFCW Local 342 continues its offer to bargain prior to your January 8th date, but this continuing offer to bargain, which has at all times been rejected by your client, is separate from Local 342’s unconditional offer to return to work. I suspect you are aware of this, but if 35 not I am telling you so here. * * * The community groups, NYPD, and the local Councilman have all spoken 40 with Local 342 at various times in the last week to inquire if the Union and your client are talking, and at least make an attempt to resolve the dispute. We have sadly had to report that you rejected the free services of Federal Mediation, and are in fact not interested in communication prior to January Puente, Ermal Qelia, Nagip Resulbegu, Khalid Seddiki, Youssef Semlalo El Idrissi, Fatlum Spahija, Andrzej Stepien, Alim Tagani, and Mergim Zeqiraj. JD(NY)-43-16 5 8th. Because various people in the community have expressed concern about the situation, UFCW made the unconditional offer to return to work today as a demonstration of good faith. Your client has so far rejected the offer. It is the Union’s position that the employees are locked out, unless or until the employer should accept the unconditional offer to return to 5 work. I close by telling you that since your client has rejected the free services of a professional labor mediator, Local 342 believes we should at this time restrict communications with you to one person at Local 342. We do this 10 with the intent of reducing opportunity for unintentional misunderstandings. President Abondolo requested I provide you with my cell number […] in the event your client wishes to communicate with the Union prior to January 8th. You have my email address. Should your client wish to accept the unconditional offer to return, I would be your contact person. 15 Should any other matter arise, I am your contact person. At this time Local 342 will of course meet on January 8th if your client is willing to do so. We will need to find a neutral, acceptable place to meet, so at some point prior to the 8th of January you can let me know when that can be discussed. We can use the Federal Mediation offices in Woodbridge New 20 Jersey for free, even if your client will not permit the assistance of a Federal Mediator. If that is not acceptable then we will have to agree to a hotel. Thank you for your time. The next morning at 10:31 a.m., Zimmerman wrote to O’Leary acknowledging receipt of 25 her email, and on Monday, December 22, 2014, at 10:53 a.m. sent O’Leary the following response: I write in response to your e-mail Friday evening and apologize for not getting back to you sooner.30 The e-mails I received on Friday from Janel D’Ammassa (on Rich’s behalf) did not propose an unconditional offer to return to work of the striking employees. Rather, Rich’s offer was conditioned on Sparks’ agreement to “meet for a bargaining session some time between Christmas and New 35 Year’s Eve.” Nonetheless, I understand from your e-mail that the union has since revised that position and now proposes an unconditional return of the striking employees. Due to serious misconduct and unprotected activity by the union, its 40 representatives and the striking employees during the two separate strikes at Sparks between December 5 and December 19, including without limitation, violence, threats and intimidation towards patrons and employees, destruction of property and trespass, be advised that Sparks must reject the union’s offer to return the striking employees to work at this 45 time. After much consideration, Sparks has determined this option best protects the safety and security of its patrons, employees and delivery JD(NY)-43-16 6 people from the conduct described above, and reserves all legal rights in connection with the union’s and Sparks’ employees’ conduct. Sparks’ decision has no bearing on its desire to continue to bargain in good faith with the union for an initial contract, and we look forward to 5 meeting in person on January 8. Alternatively, Sparks would be able to reschedule our next bargaining session to January 7, if the union would be willing to push our normal start time back a bit to 11:30 a.m. Please let me know if that date/time works for the union. Woodbridge, New Jersey is not a convenient location for us to meet. If the union is unwilling to use 10 our offices (as has been our custom to alternate between our place and yours), we can arrange for a “neutral” site that is more accessible to both parties. In the interim, I fully expect to provide you with Sparks’ written counterproposals to the union’s December 10 bargaining proposals early this week and welcome any written response the union sees fit to make in 15 advance of our in-person bargaining session. O’Leary responded at 11:14 a.m.: UFCW Local 342 disagrees with your characterization of events in the 20 second and third paragraphs below. I restate: UFCW Local 342 continues to make an unconditional offer to return to work, and that our position is that Sparks employees are locked out. I restate: UFCW Local 342 urges your client to reconsider its position regarding mediation services. I will need to make sure January 7th is good before I confirm, but 25 will get back to you without unreasonable delay. Thank you for your response, and I will pass it on. [G.C. Exh. 9.] 30 The parties also discussed the return of the striking employees at the next negotiating session, on January 8, 2015. Louis LoIacono, the union’s spokesperson at this session, testified that much of the session consisted of the Union’s requesting information necessary for it to formulate bargaining proposals (Tr. 176–178). LoIacono testified that after bargaining concluded he had asked Marc Zimmerman to speak with 35 him. Zimmerman approached with Sparks attorney, Regina Faul, and LoIacono asked Zimmerman if he was going to respond to the Union’s unconditional offer to return to work, and return the striking employees to their jobs. Zimmerman responded that he was protecting Sparks’ property at the time and could not do so, and suggested that LoIacono “put it in writing.” LoIacono asked Zimmerman whether he had any “proof or 40 evidence of anything,” and Zimmerman again told him to put an information request in writing. [Tr. 176–177; see also Tr. 36–37, 106–107, 126–127.] LoIacono and the shop stewards informed the striking employees of the events of this negotiating session (Tr. 38–39, 107–108, 177–178). 45 Subsequently on January 9, 2015, Jhana Branker, Abondolo’s executive assistant, sent an email on Abondolo’s behalf to Zimmerman, requesting information on JD(NY)-43-16 7 a number of different topics (Tr. 179; G.C. Exh. 3). The email contained the following request for information: 7. Copy of any evidence and/or videos that the employer has pertaining as evidence to support the employer’s representative’s response to the 5 Union’s unconditional return to work. We were told in writing by the employer representative that the employees could not return to work due to the fact that the representative was protecting his client’s property due to incidents that took place at Sparks which had nothing to do with the employees or the strike or the lockout.10 G.C. Exh. 3, p. 22. On February 5, 2015, Zimmerman responded to this request for information as follows: Response and Objections: Sparks objects to Request 7 as it facially 15 seeks irrelevant information “which had nothing to do with the employees or the strike or the lockout.” Subject to the foregoing objection and the General Objections above, Sparks responds that all terms and conditions of employment for bargaining unit employees are subjects of bargaining presently being negotiated with the union.20 G.C. Exh. 3, p. 19. LoIacono testified that the Union never received any information from Sparks in response to this request (Tr. 229–230). LoIacono testified that during the negotiating sessions he attended after the 25 strike began—on January 8 and 20, and February 25, 2015—Sparks never stated that it had prepared a list or an order for the recall of the striking employees, or that it would return the striking employees to work at all (Tr. 181–182). On August 25, 2015, LoIacono received a copy of a letter from Steven Cetta to striking employee Adnan Nuredini (Tr. 182–183; G.C. Exh. 4). This letter stated that “As a result of the departure 30 of a permanent replacement employee,”3 Sparks was offering Nuredini “full reinstatement to a position as a waiter, effective immediately, consistent with your preferential rehire rights as an economic striker under the National Labor Relations Act” (G.C. Exh. 4). LoIacono wrote to Cetta that same day, requesting a copy of Sparks’ preferential rehire list and information regarding its preparation, and a list of the 35 permanent replacement employees (Tr. 183; G.C. Exh. 5). LoIacono also stated, “Notwithstanding the above demand, Local 342 considers all the employees who are subjects of the pending NLRB case4 to have been illegally discharged and to be entitled to reinstatement with full back pay” (G.C. Exh. 5). On September 11, 2015, Faul responded to LoIacono’s information request, and attached a “Preferential Rehire List” 40 and a list of permanent replacements (G.C. Exh. 6). Faul sent LoIacono an amended list of permanent replacements on October 5, 2015 (G.C. Exh. 7). LoIacono testified 3 The evidence establishes that Sparks hired and reassigned employees to replace the economic strikers. Because so much of the evidence regarding the replacement employees is contested in various ways, it will be discussed infra. 4 The charges in the instant case had already been filed. JD(NY)-43-16 8 that prior to September 11, 2015, he had never seen or been told of the preferential rehire list by Sparks (Tr. 186). B. Discussion and Analysis 5 1. Failure to Reinstate the Striking Employees After Their Unconditional Offer to Return to Work The complaint alleges that since on or about December 19, 2014, Sparks has failed and refused to reinstate any of the striking employees, despite their having made 10 an unconditional offer to return to their former or substantially equivalent positions of employment on that date, in violation of Sections 8(a)(1) and (3) of the Act. Complaint ¶ 7(a-b). It is well-settled that economic strikers are entitled to immediate reinstatement to their former positions after making an unconditional offer to return to work, absent a “legitimate and substantial” business justification. Laidlaw Corp., 171 NLRB 1366 15 (1968), enfd. 414 F.2d 99 (7th Cir. 1969); Jones Plastic & Engineering Co., 351 NLRB 61, 64 (2007); Supervalu, Inc., 347 NLRB 404, 405 (2006). The hiring of permanent replacement employees in order for the employer to continue its business operations prior to an unconditional offer to return to work constitutes a legitimate and substantial business justification. Jones Plastic & Engineering Co., 351 NLRB at 64; Supervalu, 20 Inc., 347 NLRB at 405. The burden of proving the existence of a legitimate and substantial business justification for failing to reinstate economic strikers lies with the employer. Supervalu, Inc., 347 NLRB at 405, citing NLRB v. Fleetwood Trailer Co., 389 U.S. 375, 379 (1967); Peerless Pump Co., 345 NLRB 371, 375 (2005). In order to satisfy this burden, the employer must provide “specific” proof that it reached a “mutual 25 understanding” with the replacements that they were permanent employees prior to the unconditional offer to return to work. Jones Plastic & Engineering Co., 351 NLRB at 64; Consolidated Delivery & Logistics, 337 NLRB 524, 526 (2002), enfd. 63 Fed Appx. 520 (D.C. Cir. 2003); Towne Ford, 327 NLRB 193, 204 (1998). 30 In addition, it is well settled that in the event that no vacancy in the striking employees’ classifications exists, the employer is required to place them “on a nondiscriminatory recall list until a vacancy occur[s].” Peerless Pump Co., 345 NLRB at 375. Subsequently, reinstatement is contingent upon the occurrence of a “genuine job vacancy” or a “Laidlaw vacancy,” which is engendered when the employer expands its 35 workforce, discharges an employee, or when an employee quits or leaves the employer.5 Pirelli Cable Corp., 331 NLRB 1538, 1540 (2000), quoting NLRB v. Delta- Macon Brick & Tile Co., 943 F.2d 567, 572 (5th Cir. 1991). General Counsel bears the burden of establishing that a Laidlaw vacancy exists.6 Pirelli Cable Corp., 331 NLRB at 5 Temporary transfers of employees, by contrast, do not create a Laidlaw vacancy. Pirelli Cable Corp., 331 NLRB at 1540. 6 General Counsel contends that under Kurz-Kasch, Inc., 301 NLRB 946, 949 (1991), a decline in the employer’s workforce below prestrike levels “creates the presumption that vacancies existed,” which can be rebutted by proof on the employer’s part of “substantial and legitimate business reasons” for the existing number of employees. However, that analysis was part of the decision of the Sixth Circuit remanding the case. Kurz-Kasch, Inc., 301 NLRB at 946, 948–949; Kurz-Kasch, Inc. v. NLRB, 865 F.2d 757 (6th Cir. 1989). Thus, while the Sixth Circuit’s burden-shifting analysis constituted the law of that JD(NY)-43-16 9 1540. When such a vacancy occurs, the striking employees are entitled to full reinstatement, unless they have “acquired regular and substantially equivalent employment” or the employer proves that there were legitimate and substantial business reasons for failing to offer the striking employees reinstatement at the time. Peerleess Pump Co., 345 NLRB at 375, quoting Laidlaw Corp., 171 NLRB at 1369–5 1370. Here, the Complaint alleges that since December 19, 2014, Sparks has denied the striking employees their right to be placed on a preferential hiring list, and General Counsel asserts that Sparks has failed to reinstate the striking employees to vacant positions as they have occurred. Complaint ¶ 7(c). 10 Sparks argues that it had permanently replaced the striking employees prior to their December 19, 2014 unconditional offer to return to work. Sparks further contends that a downturn in its business overall obviated the need for the level of waitstaff that had been employed prior to the December 10, 2014 strike. Additionally, Sparks claims that it had been “overstaffed” in the past due to the striking employees’ lack of reliability, 15 which required a larger group of employees to cover during unanticipated absences. Sparks asserts that it therefore had fewer available waitstaff and bartender positions after the strike, and thus a legitimate business justification for refusing to reinstate the striking employees. 20 Sparks and General Counsel base their contentions regarding the pre-strike employee complement and existing Laidlaw vacancies after the December 19, 2014 unconditional offer on different types of records created by Sparks in the ordinary course of its operations, and dispute the documents’ probative value accordingly. General Counsel argues that Weekly Tip records—spreadsheets recording the weekly 25 tips of all employees—most accurately reflect Sparks’ complement of waistaff and bartenders at any given point in time (G.C. Post-Hearing Brief at p. 23). Sparks asserts that Daily Tip records—handwritten notes of tip calculations made on a daily basis— more accurately depict the staffing needs of the restaurant, in that they record how many employees worked each day (R.S. Post-Hearing Brief at p. 37). I find that the 30 Weekly Tip records more accurately reflect the overall number of Sparks’ waitstaff and bartender employees for any particular period. The Daily Tip records only indicate the employees working any particular day and shift, and thus do not establish the full complement of Sparks employees.7 Because every Sparks employee does not work every single shift, the Daily Tip records do not encompass the entire workforce. The35 Weekly Tip records, by contrast, list every waiter and bartender employed by Sparks, regardless of the individual days they worked during the week in question. particular case, it has not been subsequently applied with any degree of uniformity. I note that the Sixth Circuit’s analysis in Kurz-Kasch, Inc. was cited at length by the ALJ in Laidlaw Waste Systems, but the Board did not discuss it in upholding her decision. See Laidlaw Waste Systems, 313 NLRB 680, 680–682 fns. 3, 7, and at 694 (1994). 7 The case of Sparks waiter Joanna is illustrative. Edelstein testified at the hearing that Joanna was out of work on an extended medical leave, and her name was therefore redacted from the Daily Tip record (Tr. 530-531; R.S. Exh. 8). However, during her testimony Edelstein also stated that Joanna was still an employee of Sparks, regardless of her having been removed from the Daily Tip record, and her name appears on the Weekly Tip record (Tr. 536-539; G.C. Exh. 13(b)). This evidence indicates that the Daily Tip record does not contain a complete record of Sparks’ waiters and bartenders during the pertinent periods. JD(NY)-43-16 10 In addition, the Daily Tip sheets produced by Respondent and submitted into evidence were not complete, and were not provided for critical time periods. For example, the one week of Daily Tip sheets in September, November, and December 2014 Sparks submitted for the purposes of comparison with Weekly Tip records5 submitted by General Counsel were actually Daily Tip sheets for September, November, and December 2013. (R.S. Exh. 25.) The December 1, 2014, through December 6, 2014 Daily Tip sheets were included elsewhere in the record (R.S. Exh. 8), but not the Daily Tip sheets for the comparator weeks in September and November. Therefore, it is not apparent that Sparks’ records submitted for these weeks provide a 10 comprehensive and reliable reflection of the waitstaff and bartenders employed during the stated periods. As a result, the Weekly Tip records provide a more comprehensive account of Sparks’ waitstaff and bartender employees overall. Furthermore, the evidence does not support Sparks’ contention that it kept an 15 inflated roster of employees prior to the strike, which was no longer necessary because the replacement employees were more reliable. Sparks argues in its Post-Hearing Brief that the employees who participated in the strike called out of work and took time off “at their discretion,” forcing Respondent to rely on “backup” workers which were no longer necessary after the replacement employees began (R.S. Post-Hearing Brief at p. 38–20 39). Sparks therefore contends that the total number of waiters and bartenders employed prior to the strike was artificially inflated, and is not probative with respect to the ultimate number of Laidlaw vacancies which existed subsequently. However, the record establishes that, as Sparks states in its Post-Hearing Brief, “Sparks daily staffing needs fluctuate throughout the year” (R.S. Post-Hearing Brief at 40). The record 25 evidence in the form of credible employee testimony further establishes that Sparks’ practice in the past was to allow employees to take extended vacations or other forms of time off during periods which were not as busy, as opposed to laying them off (Tr. 41–42, 117–118, 160–161). For example, waiter Valjon Hajdini credibly testified that he began his employment with Sparks in September 2008, and worked about 42 hours per 30 week—six dinners and one lunch—until the December 10, 2014 strike (Tr. 26). During this time he observed that while more employees were hired immediately before the busy season, during the slower season not a single employee was terminated (Tr. 41– 42). Instead, the roster of employees simply rotated days of work, and employees took longer vacations or time off (Tr. 41–42). Hajdini testified that more employees were 35 hired every fall only because some employees left Sparks for better jobs, became ill, or were fired, creating a shortage of staff prior to the busier months (Tr. 42). Waiter Kristopher Fuller similarly testified that since the inception of his employment with Sparks in 2007 employees were kept on from the busy period into the slower period, and the only turnover that occurred happened naturally as employees left for better jobs 40 or were fired (Tr. 120–122). Bartender Elvi Hoxhaj also testified that during the 12 years he was employed by Sparks, employees were never laid off during the slower months (Tr. 152). Based on his observations, Hoxhaj testified that the available work was distributed evenly, so that each waitstaff employee worked 4 or 5 days per week rather than 6, or the employees each took longer vacations. Hoxhaj stated that he only 45 witnessed employees leave their employment with Sparks when they were discharged or “because of personal reasons” (Tr. 160–161). Sparks offered no explanation for its JD(NY)-43-16 11 departure from this practice after the inception of the strike. Thus, I am not persuaded by its contention that its prestrike employee complement was artificially enlarged, and therefore not useful to determine the existence of Laidlaw vacancies. Sparks’ Weekly Tip records establish that the restaurant employed a total of 46 5 waiters and bartenders immediately prior to December 10, 2014 (G.C. Exh. 13(b)).8 The payroll for the period immediately after the strike began (December 15 through 21, 2014) lists a total of 37 waiters and bartenders (G.C. Exh. 16).9 Therefore, the record establishes that from the inception of the strike on December 10, 2014, and through the time of the striking employees’ unconditional offer to return to work on December 19, 10 2014, there were at least 9 vacant waiter/bartender positions. Respondent contends that it did not return the striking employees to work after their unconditional offer to return for substantial and legitimate business reasons. First, Sparks asserts that it hired permanent replacements for the striking employees prior to 15 their unconditional offer to return to work on December 19. Sparks further argues that a downturn in its overall business obviated the need for the amount of waiters and bartenders it had previously employed, thereby justifying its refusal to reinstate the striking employees. As discussed above, the employer bears the burden of proving the existence of a legitimate and substantial business justification for failing to reinstate 20 economic strikers following an unconditional offer to return to work. Supervalu, Inc., 347 NLRB at 405; Peerless Pump Co., 345 NLRB at 375. For the following reasons, I find that Sparks has failed to satisfy this standard. In order to establish that economic strikers were not returned to work after an 25 unconditional offer because their positions had already been filled by permanent replacements, the employer must present “specific” proof of having reached a “mutual understanding” with the replacements to that effect. Jones Plastic & Engineering Co., 351 NLRB at 64; Consolidated Delivery & Logistics, 337 NLRB at 526. Thus, the employer must present evidence that the circumstances of the replacement employees’ 30 hiring show that the replacements “were regarded by themselves and [the employer] as having received their jobs on a permanent basis.” Consolidated Delivery & Logistics, 337 NLRB at 526, quoting Target Rock Corp., 324 NLRB 373 (1997), enfd. 173 F.3d 921 (D.C. Cir. 1998). Evidence of the employer’s intent to hire the replacements on a permanent basis is insufficient. Consolidated Delivery & Logistics, 337 NLRB at 526. 35 Furthermore, evidence of an offer of work on a permanent basis is inadequate absent a showing that the replacement employee accepted the offer prior to the striking employees’ unconditional offer to return to work. Choctaw Maid Farms, Inc., 308 NLRB 521, 527–528 (1992), citing Solar Turbines, 302 NLRB 14 (1991), affd. sub nom. Machinists v. NLRB, 8 F.3d 27 (9th Cir. 1993) (employer’s statement to replacements 40 8 The payroll for this period contains only 45 waiters and bartenders, because Joanna did not work and therefore was not paid (G.C. Exh. 13(d)). 9 There were no Weekly Tip records produced for this or any other week until the week of January 19 through 24, 2015. Information was therefore culled from both the Weekly Tip records (which constitute the most accurate reflection of the roster of employees) and the payroll records (reflecting the wages actually paid for a given week) to establish that there were 46 employees immediately prior to the strike and 37 immediately thereafter. JD(NY)-43-16 12 that they “had a job” insufficient to establish hiring on a permanent basis without evidence that replacements accepted offer). The evidence establishes that Sparks obtained replacement employees via three different methods. Six kitchen employees were reassigned to waitstaff positions,10 five5 purportedly “seasonal” employees hired before the strike began became replacements, and 23 replacement employees were hired directly after the strike began. The available evidence establishes that Sparks used similar documents when it hired or reassigned these employees to permanent replacement positions, and Sparks contends that these employees thereby constituted permanent replacements for the economic strikers prior 10 to the unconditional offer to return to work on December 19, 2014. In particular, the replacement employees were provided with a letter stating as follows: It is a pleasure to extend to you an offer of employment in a permanent position as Waiter [Bartender], for Michael Cetta, Inc. dba Sparks Steak 15 House. Your start date will be December 15, 2014. Your compensation will be paid based on a weekly basis (52 pay period per year) of $8.00/hour (less tip credit) and applicable tips.20 Eligibility for medical insurance benefits will begin following ninety (90) days of continued employment. The Company’s employee benefits programs are described under separate cover, and the terms of the official plan documents govern all issues of eligibility and benefits, in the event of 25 a conflict between the contents of this letter and the terms of the plan documents. Based on the Company’s time-off policies, employees become eligible for paid time off as explained fully in our employee handbook. If the Company 30 develops other benefit programs for which you may be eligible, the Company will advise you accordingly. The Company reserves the right to modify, supplement, and discontinue all employee benefits programs in its sole discretion. 35 In accordance with the Immigration Reform and Control Act, we are required to verify that you are legally entitled to work in the United States. You will be required to complete an I-9 form on your first day of employment, and present original documents establishing identity and employment eligibility.40 10 These employees had been employed by Sparks in kitchen positions for some time prior to being reassigned to waitstaff work. See G.C. Exh. 6 and 7; Tr. 264–265. Because the evidence establishes that Sparks hired new employees to replace the kitchen workers who were transferred into waitstaff positions, the waitstaff positions into which they transferred constituted Laidlaw vacancies. G.C. Exh. 14 and 23(B). See Pirelli Cable Corp., 331 NLRB at 1540; K-D Lamp Co., 229 NLRB 648, 650 (1977). JD(NY)-43-16 13 This offer is not a contract for employment; your employment is “at-will” and may be terminated at any time for any reason by you or Michael Cetta, Inc. Congratulations on your new position! We are very excited to have you 5 join our organization, and we are sure that you will be a valuable addition to Sparks Steak House. Please do not hesitate to call me at 212.687.4806 should you have any questions. Sincerely,10 Shailesh Desai R.S. Exh. 7(a-hh). These letters were signed by both Desai and all but one were signed by the individual employees. All of the letters contained typewritten dates across the top preceding the text. Two of the letters were dated December 11, 2014, 26 were 15 dated December 15, and six were dated December 19.11 The letters were signed by the replacement employees, but the signatures were not dated. Again, it is Sparks’ burden to establish that it reached a mutual understanding with these employees regarding their status as permanent replacements for the 20 economic strikers prior to 4 p.m. on December 19, 2014, when the unconditional offer to return to work was made. I find that the evidence adduced by Sparks to attempt to elucidate the understanding it reached with the replacement employees, and the time at which the agreement regarding their employment status was arrived at, is insufficient to do so. Sparks did not call any of the replacement employees to testify regarding the 25 process by which they were hired or reassigned, and their understanding regarding the nature of their employment thereafter. Edelstein testified that she was responsible for finding, interviewing, and “going through the process of hiring waiters” on December 11, 2014 (Tr. 419).12 She testified that she “contacted staffing agencies” and sought referrals from Sparks’ current staff, and that she “did a series of many, many, many 30 interviews in the course of the day,” ultimately offering positions to prospective employees (Tr. 419). She was not asked for and did not provide any additional information about her interactions with candidates during the interviews. According to Edelstein, this process began on December 11, 2014, and continued “over the course of a few days,” but she could not recall with any more specificity how long the process 35 took, or how many replacement employees were hired (Tr. 419–420). 11 The alleged “seasonal employees” were given two offer letters. The first, distributed in October and November 2014 depending upon the employee, begins, “It is a pleasure to extend you an offer of seasonal employment as a Waiter for Michael Cetta, Inc. dba Sparks Steak House. Your start date will be DATE. Your compensation will be paid on a weekly basis (52 pay periods a year) of $8.00/hour (less tip credit) and applicable tips.” [R.S. Exh. 6(a-d)] There is no end date or time period for employment specified in the letter. Furthermore, the evidence establishes that prior to the December 10, 2014 strike Sparks had never hired employees on a seasonal basis whose employment terminated after the busiest months. Instead, the evidence establishes that employees hired from October to December were always maintained on the roster and allowed to take vacation or unpaid time off as business slowed. 12 Edelstein testified that she was not at Sparks on December 10, 2014, when the strike began (Tr. 418– 419). JD(NY)-43-16 14 Edelstein was no more detailed with respect to the letters offering permanent replacement positions, and their distribution, signature, and return. Edelstein testified that she and Desai prepared the letters offering permanent employment13 (Tr. 421; R.S. Exh. 7(a-hh)). She further testified that she handed the letters to replacement employee candidates (Tr. 423–424). However, she did not witness their signatures on the letters, 5 and did not know whether the replacement employees signed the letters on the date that, presumably, either she or Desai placed at the top of the text (Tr. 424, 534–535; R.S. Exh. 7(a-hh)). Nor could she testify with any specificity regarding when the individual letters were returned with the replacement employees’ signatures. Her testimony regarding the receipt of the signed offer letters comprising Respondent’s 10 Exhibit 7 was nebulous and significantly equivocal: Q: And do you recall the last day that you received any of these documents returned to you? 15 A: I know that the last person – I don’t it. It was – you know, whenever it was issued, it was within a day or so that we got them back. So whenever the last one was issued is when I got it back. I don’t know the exact last day. I think it was – let me just take – can I just look at something? 20 Q: Sure. A: Thanks. (The witness examined the document.)25 THE WITNESS: It was – I believe it was the 19th of December. The last day that we got this one – these back. Tr. 426.30 I simply do not find Edelstein’s testimony regarding the hiring process and the offer letters probative. She provided virtually no information regarding her interactions with the replacement employee candidates, which would elucidate whether and when a mutual understanding regarding their employment status arose. Although Edelstein’s35 testimony ostensibly encompassed all of the offer letters—including those provided to the reassigned kitchen workers and the “seasonal” employees—her narrative testimony appeared to pertain solely to the newly hired replacement employees, and not to either of the former groups.14 Her testimony regarding when Sparks received the offer letters signed by the replacement employees was vague and equivocal. In particular, I note 40 that the list of permanent replacement employees provided to LoIacono on September 11, 2015, contains hiring dates for the replacement employees at odds with the dates of the offer letters (G.C. Exh. 6; R.S. Exhs. 7(a-hh)). And because several of the offer 13 Desai testified on behalf of Sparks, but was not questioned regarding the offer letters or his involvement in the interview and hiring process. 14 The only evidence regarding the reassignment of the kitchen employees is Steve Cetta’s testimony that their reassignment to waitstaff positions took place after December 10, 2014 (Tr. 264–265). JD(NY)-43-16 15 letters are dated December 19, 2014, if Sparks received them signed by the employee “within a day or so,” it is doubtful that all of the offer letters were received with employee signatures as of that date, as Edelstein claims (R.S. Exhs. 7(l, m, x, aa, bb, hh)). Furthermore, the available payroll records do not illuminate the situation. For 5 example, four of the six ostensibly reassigned kitchen employees and all 23 of the newly hired replacement employees appear on the payroll as waitstaff for the period December 15 through 21, 2014. However, the payroll evidence does not establish the date that the newly hired employees began working, or that the kitchen employees began working as waitstaff, with any further specificity (G.C. Exh. 16; Tr. 300–301). 10 Furthermore, one of the former kitchen employees first appears as waitstaff on the payroll for the period December 22 through 28, 2014, and another does not appear as waitstaff on the payroll until the period January 5 through 11, 2015, well after the unconditional offer to return to work (G.C. Exh. 18 and 20). In addition, Daily Tip sheets and Weekly Tip records which would have established the precise dates that the newly 15 hired employees began working and that former kitchen employees worked as waitstaff by virtue of their receipt of tips were not produced by Respondent. As a result, the available documentary evidence does not establish that the former kitchen workers and the 23 newly hired employees constituted permanent replacements for the striking waitstaff and bar tenders prior to the unconditional offer to return to work on December 20 19, 2014. General Counsel asserts that an adverse inference should be drawn based upon Sparks’ failure to produce documents—in particular Weekly and Daily Tip records– which would have shown the exact date that the kitchen workers and newly hired25 replacements began working as waitstaff and bartenders during the period from December 15 through 19, 2014. General Counsel also asks that I draw an adverse inference based on Sparks’ failure to call as a witness manager Ricardo Cordero, who signed the letters offering “seasonal” employment and hired Jonathan Sturms in February 2015. For the following reasons, I find that such adverse inferences are 30 appropriate. Succinctly stated, the adverse inference rule consists of the principle that “when a party has relevant evidence within his control which he fails to produce, that failure gives rise to an inference that the evidence is unfavorable to him.” Auto Workers v. 35 NLRB, 459 F.2d 1329, 1335–1336 (D.C. Cir. 1972) (describing the adverse inference rule as “more a product of common sense than of the common law”); see also Metro- West Ambulance Service, Inc., 360 NLRB No. 124 at p. 2-3 and at fn. 13 (2014); SKC Electric, 350 NLRB 857, 872 (2007). An adverse inference may be drawn based upon a party’s failure to call a witness within its control having particular knowledge of the facts 40 pertinent to an aspect of the case. See Chipotle Services, LLC, 363 NLRB No. 37, p. 1, fn. 1, p. 13 (2015) (adverse inference is particularly warranted where uncalled witness is an agent of the party in question); SKC Electric, Inc., 350 NLRB at 872–873. An adverse inference may also be drawn based upon a party’s failure to introduce into evidence documents containing information directly bearing on a material issue. See 45 Metro-West Ambulance Service, Inc., 360 NLRB No. 124 at p. 2-3 (failure to produce subpoenaed accident reports pertinent to the “treatment of similarly situated employees” JD(NY)-43-16 16 warrants adverse inference that records would have established that such employees were treated more leniently than discriminatee); Massey Energy Co., 358 NLRB 1643, 1692, fn. 63 (2012); see also Zapex Corp., 235 NLRB 1237, 1239 (1978). The adverse inference rule does not require that the party seeking the adverse 5 inference have sought the witness testimony or documents via subpoena. Auto Workers v. NLRB, 459 F.2d at 1338 (applicability of the adverse inference rule “in no way depends on the existence of a subpoena compelling production of the evidence in question”). However, where a subpoena applicable to the particular witness or documentary evidence in question has been served, the rationale for drawing an 10 adverse inference is strengthened. Auto Workers v. NLRB, 459 F.2d at 1338 (“the willingness of a party to defy a subpoena in order to suppress the evidence strengthens the force of the preexisting inference”); People’s Transportation Service, Inc., 276 NLRB 169, 223 (1985). An adverse inference has been deployed as a discovery sanction in such cases. See, e.g., McAllister Towing & Transportation Co., 341 NLRB 394, 396 15 (2004), enfd. 156 FedAppx. 386 (2d Cir. 2005). In the instant case, Sparks failed to produce or enter into evidence either Weekly or Daily Tip records for one of the most significant weeks in question, December 15 through 21, 2014. Such records, by establishing any shifts worked by alleged 20 replacement employees, would tend to substantiate Respondent’s claim that the striking employees were permanently replaced prior to their unconditional offer to return on December 19 at 4 p.m. Not only were such records subpoenaed by General Counsel, but I denied Sparks’ petition to revoke and ordered the production of these documents on October 1, 2015. Although Sparks subsequently produced copious documents 25 involving employee payroll and tips for 5 years dating back to January 2010, it failed to introduce evidence with regard to this critical week. Furthermore, there was no indication from Sparks’ witnesses that such documents had not been created or maintained in the ordinary course of its business. Edelstein testified that Weekly Lunch and Dinner Tip records (G.C. Exh. 13(b)) are kept for every week the restaurant is open 30 (Tr. 294, 321). She also testified that it would be impossible to determine, from the payroll records alone, what day of any given week an employee worked (Tr. 300–303). Cetta stated in his testimony that schedules such as the dinner schedule in evidence as GeneralCounsel Exhibit 13(a) are kept in the ordinary course of business for every week the restaurant is open (Tr. 266). Sparks entered into a similar stipulation with 35 respect to Weekly Tip records (G.C. Exh. 13(b)), and employee hours summaries (G.C. Exh. 13(c)) (Tr. 284). Because there was no documentary or testimonial evidence to elucidate the specific date that replacement employees signed and returned their offer letters, or the date on which a mutual understanding that employees were permanent replacements was reached, evidence establishing the specific dates of employment 40 during the period December 15 through 21 was critical. Yet Sparks failed to produce records having a direct probative bearing on this issue, records which were admittedly made and kept in the ordinary course of its business, despite my order denying the Petition to Revoke and requiring that they do so. Such a course of events militates in favor of drawing an adverse inference to the effect that if the records in question had 45 been produced, they would not have established that reassigned kitchen employees and newly hired replacements employees were performing waitstaff and bartending JD(NY)-43-16 17 work prior to the unconditional offer to return to work on December 19. See Zapex Corp., 235 NLRB at 1239 (failure to produce personnel files of alleged permanent replacement employees warrants inference that records would have tended to show that replacements were not in fact permanent). 5 I further find it appropriate to draw an adverse inference based on Sparks’ failure to call its Manager Ricardo Cordero as a witness.15 As discussed above, Cordero was both the signatory to the seasonal offer letters and the manager who hired Jonathan Sturms in February 2015. Edelstein testified that she created the “seasonal employment offer” template used by Cordero and signed by him16 (Tr. 411–413; R.S.10 Exh. 6(a)-(d)). As a result, Cordero would most likely have had information regarding the understanding between the “seasonal” hires and Sparks prior to their allegedly obtaining a permanent replacement position. Edelstein testified that she only interviewed one of the five alleged “seasonal employees,” Luis Calle, whose offer letter was never signed and returned (Tr. 416–418). Edelstein further testified that she did not 15 recall giving the seasonal employment letters to employees Andrew Globus, Mostafa Belabez, Luis Vasconez, or Anass Kesley (Tr. 463; R.S. Exh. 6(a)-(d)). As Cordero’s signature was on the offer letters for these four “seasonal” employees, his testimony would have illuminated the status of their employment. Testimony could have also been elicited regarding his general experience in hiring for Sparks as related to positions of 20 “seasonal employment.” For example, some of the “seasonal” offer letters contain dated signatures, indicating that this process differed from the hiring and reassignment process for the alleged permanent replacement employees in December (R.S. Exh. 6(a, b, d)). Thus I find it appropriate to infer that had Cordero testified, his testimony would not have supported a finding that the “seasonal” employees’ understanding regarding 25 their status was consistent with that of a legitimate permanent replacement. I also find it appropriate to draw an adverse inference based upon Sparks’ failure to call Cordero given Cordero’s hiring of employee Jonathan Sturms in February 2015. Although Edelstein testified that Cordero hired Sturms without the proper authorization, 30 her testimony was inconsistent on this point (Tr. 427). Edelstein initially contended that Sparks changed the process for hiring after the strike, and that she explained the new procedures, which required Steve Cetta’s specific approval for hiring staff, at a management meeting (Tr. 473–474, 476). According to Edelstein, the managers responded, “we need people, what do we do? What do we do?” She testified that she 35 responded by attempting to “alleviate their anxiety and stress about what was going on,” and to “help them understand that we understand that we are short waiters or we need people or whatever it is, we understand” (Tr. 478). However, Edelstein and Cetta then purportedly discharged Sturms after discovering that Cordero had hired him without consulting Cetta, in violation of this policy, because, “No one should have been hired” 40 and “We didn’t need anybody” (Tr. 502–505). When questioned further regarding why 15 Cetta testified that Ricardo Cordero was still employed by Sparks as a manager at the time of the hearing (Tr. 244). 16 Desai testified that he signed offer letters in fall 2014 in anticipation of the busy season at Sparks, but his signature does not appear on the “seasonal” offer letters (Tr. 649–650). This leads me to conclude that in his testimony he was referring to offer letters he gave to the former kitchen workers, the other newly hired replacements, or to the “seasonal” employees in mid-December 2014. JD(NY)-43-16 18 Strums was hired if Sparks did not need additional help, Edelstein claimed that Cordero apologized, saying he had made a mistake (Tr. 555–556). Thus, Cordero’s testimony regarding how the hiring of Sturms came about—whether Sparks was actually “short waiters” or whether Sturms’ hiring was a “mistake” because Respondent “didn’t need anybody”—would have been illuminating. I thus find that Sparks’ failure to call Cordero 5 to testify regarding the hiring of Sturms warrants an adverse inference that Cordero’s testimony would not have supported Sparks’ contentions regarding these issues. The record evidence establishes additional Laidlaw vacancies, as identified by General Counsel. For example, General Counsel contends that the replacement 10 employees Andreas Zenteno, Freddy Guzhnay, Carlos “Alex” Ruiz, and Maximillian Vainshtub left Sparks sometime between December 22, 2014, and January 18, 2015, creating Laidlaw vacancies that Sparks did not recall striking employees to fill (G.C. Br. 34–35). Edelstein confirmed this in her testimony (Tr. 328–335). General Counsel further contends that a striking employee should have been recalled to work when 15 waiter Helene DeLillo left Sparks’ employment on or before January 4, 2015. Edelstein confirmed in her testimony that DeLillo did not appear on or after the January 5–11, 2015 payroll (G.C. Exh. 20; Tr. 325, 327, 331). Sparks adduced no evidence as to why DeLillo’s position or the four others identified above were not offered to striking employees, other than general arguments regarding overstaffing and seasonality which 20 I am rejecting herein. I therefore find that departure of Zenteno, Guzhnay, Ruiz, Vainshtub, and DeLillo created Laidlaw vacancies, to which Sparks was obligated to respond by offering these positions to striking employees. I further find that because there is no evidence that DeLillo was hired as a permanent replacement prior to the unconditional offer to return to work, her position should have been made available to a 25 striking employee upon the unconditional offer to return to work on December 19, 2014. Sparks further claims that a downturn in its business necessitated a smaller staff, so that its failure to recall the striking employees after their unconditional offer to return to work can be justified on this basis. The evidence adduced at the hearing, however, 30 does not satisfy Sparks’ burden to prove that strained financial circumstances obviated the need for what had previously been a full complement of employees, either at the time of the unconditional return to work or thereafter. First of all, it is undisputed that December is the busiest month of the year at 35 Sparks due to holiday parties and celebrations. Financial records introduced into evidence establish that, as is typical, December 2014 was the month of that year with Sparks’ highest sales (Tr. 646–648, G.C. Appendix A, and R.S. Exh. 16). Thus, the December 10, 2014 strike and December 19, 2014 unconditional offer to return to work took place during the time that Sparks did its highest volume of business for the year. It 40 is also undisputed that Sparks transferred kitchen workers and hired employees to work in lieu of the striking employees, both during this time and thereafter. There is no question that Sparks did so out of necessity. As Edelstein testified, when she met with management personnel after the strike began and told them that all new hires in the future must be approved by Cetta, the managers responded, “we need people, what do 45 we do? What do we do?” (Tr. 478). Edelstein testified that her response attempted “to not only alleviate their anxiety and stress about what was going on, but to help them JD(NY)-43-16 19 understand that we understand that we are short waiters or we need people” (Tr. 478). Furthermore, although December is the busiest month of the year for Sparks, the “slow” season takes place over the summer, and not in January and February (Tr. 41, 115, 645–646; G.C. Appendix A). Thus, while Sparks’ financial records establish that its total gross profit declined from December 2013/January 2014 to December 2014/January 5 2015, the restaurant was still at the height of its busy season when the strike and unconditional offer to return to work took place, and had not yet entered its slowest season when striking employees were not recalled to replace employees whose employment terminated in early 2015. 10 Furthermore, the evidence establishes, as General Counsel argues, that the decline in sales which Sparks experienced from December 2014 to January 2015 was not as drastic as Sparks contends. The documentary evidence establishes that over the past five years the December 2014 to January 2015 decline is actually the second smallest decline for that period (G.C. Appendix A; R.S. Exh. 16). And, as discussed 15 above, the evidence establishes that Sparks has never before laid off waitstaff and bartenders, even during its slow season over the summer. Instead, these employees remained employed, taking long vacations or leaves of absence and dividing the available work. The evidence does not support any reason for Sparks’ departure from this practice, even during periods of larger or more dramatic declines in business from 20 December of one year to January of the next. See Kurz-Kasch, Inc., 301 NLRB 946, n. 3, 951 fn. 6 (evidence did not establish previously-existing practice of temporarily shifting employees, which Respondent contended obviated the necessity of recalling striking employees); Austin Powder Co., 141 NLRB 183, 186 (1963), enfd. 350 F.2d 973 (6th Cir. 1965) (Respondent’s claim that economic decline necessitated layoffs was 25 suspect, where it did not discharge employees at a different plant which suffered a similar decline in business). I further note that there is no evidence that Sparks took other steps to address purported issues of overstaffing caused by the decline in business, such as transferring the former kitchen workers back to their previous positions.17 Therefore Sparks’ attempt to justify its refusal to recall the striking 30 employees to work on this basis is not persuasive. The cases cited by Sparks in support of its defense that a decline in its business constituted a substantial business justification for failing to return the striking employees to work as vacancies arose are inapposite. For example, in Providence Medical Center, 35 243 NLRB 714, 738–739 (1979), the workload in the laboratory where the striking technologists were employed was reduced due to the simultaneous strike of a separate bargaining unit of nurses at the Respondent hospital, and Respondent hired only one short-term laboratory employee during the 2½ months after both strikes concluded. Similarly, in Bushnell’s Kitchens, Inc., 222 NLRB 110, 117 (1979), the employer hired no40 replacement employees during the strike in question, employees responsible for sales instead performed production work during the strike resulting in a decline in orders, and an OSHA inspector ordered the employer to cease using certain production equipment. 17 This is particularly the case given that, as General Counsel argues and calculations based on payroll records confirm, kitchen workers ultimately “cost” Sparks 4.5 times more in payroll than waitstaff and bartenders, because Sparks is ineligible for a tip credit with respect to the kitchen workers. See R.S. Exhs. 15, 17; G.C. Post-Hearing Brief at p. 46, fn. 33. JD(NY)-43-16 20 In William O. McKay Co., 204 NLRB 388, 389, 393 (1973), Respondent reduced its overall workforce by almost forty percent (from 100 to 65 employees) during the year before the strike began. Finally, in Colour IV Corp., 202 NLRB 44, 44–45 (1973), the Board found that the striking employee not returned to work lacked the qualifications Respondent required for the poststrike work available. As a result, I find that these 5 cases are not analogous to the circumstances at issue here. For all of the foregoing reasons, I find that Sparks has failed to establish that an economic decline constituted a legitimate and substantial business justification for failing to reinstate the striking employees. 10 Finally, I find that Sparks has offered shifting rationales for its refusal to reinstate the striking employees after their December 19, 2014 unconditional offer to return to work that render its various explanations suspect. In December 2014, Sparks was contending that picket line misconduct constituted its sole reason for failing to reinstate 15 the striking employees. Zimmerman’s December 22, 2014 email declining to reinstate the striking employees provides only this justification, asserting that they engaged in “violence, threats,” “intimidation,” “destruction of property and trespass.” Nowhere does Zimmerman mention that permanent replacement employees had been hired prior to the striking employees’ unconditional offer, or that an economic downturn of some sort 20 had eliminated the need for the previous complement of waitstaff and bartender employees. At the January 8, 2015 negotiating session Zimmerman continued to insist that he could not return the striking employees to work because he was “protecting Sparks property.” I further note that Sparks did not provide any information in response to Local 342’s request for information pertaining to the incidents of, according to 25 Zimmerman, “violence, threats and intimidation . . . destruction of property and trespass” that purportedly engendered Sparks’ decision to refuse to reinstate the striking employees. The evidence establishes that on January 9, 2015, Local 342 requested “any evidence and/or videos…to support the employer’s representative’s response to the Union’s unconditional return to work,” namely the assertion that 30 Zimmerman “was protecting his client’s property due to incidents that took place at Sparks” which the Union contended were not caused by the strike or the striking employees (G.C. Exh. 3, p. 22). It is well settled that the Board considers such information to be necessary for a Union’s performance of its duties as bargaining representative. See, e.g., NTN Bower Corp., 356 NLRB 1072, 1139 (2011); Page Litho, 35 Inc., 311 NLRB 881, 891 (1993). Zimmerman’s response that the requested information was “irrelevant” based upon the Union’s contention that its activities and those of the striking employees were not responsible for any alleged incidents is legalistic circumlocution, as is his assertion that “all terms and conditions for bargaining unit employees are…presently being negotiated” (G.C. Exh. 3, p. 19). Thus, the evidence 40 establishes that Sparks never provided anything to the Union in order to substantiate its contention that “violence, threats and intimidation . . . destruction of property and trespass” justified the its refusal to reinstate the striking employees. Now in its Post- Hearing Brief, Sparks has abandoned its picket line misconduct argument, and contends that the permanent replacement of the striking employees and an economic 45 downturn constitute its legitimate business justifications for declining to offer reinstatement. I find that the shifting explanations asserted by Sparks at the time of the JD(NY)-43-16 21 unconditional offer and January 2015 negotiating sessions, the hearing in this matter, and its Post-Hearing Brief militate against crediting any one as a legitimate and substantial business justification for failing to reinstate the striking employees. For all of the foregoing reasons, I find that since December 19, 2014, Sparks has 5 failed and refused to reinstate the striking employees, despite their having made an unconditional offer to return to work on that date, in violation of Sections 8(a)(1) and (3) of the Act. I further find that Sparks violated Sections 8(a)(1) and (3) by failing to reinstate the striking employees to vacant waitstaff and bartender positions as they have occurred.1810 2. The Preferential Hiring List The complaint alleges at Paragraph 7(c) that Sparks violated Sections 8(a)(1) and (3) of the Act by failing and refusing to place the striking employees on a 15 preferential hiring list. It is well settled that economic strikers making an unconditional offer to return to work at a time when their positions are filled by permanent replacements remain employees, and “are entitled to full reinstatement upon the departure of replacements unless they have in the meantime acquired regular and substantial equivalent employment.” Laidlaw Corp., 171 NLRB at 1369–1370. To this 20 end, the employer must maintain a “non-discriminatory recall list” such that when openings become available, “the unreinstated striker could be recalled to his or her former or substantially equivalent position.” Peerless Pump Co., 345 NLRB at 375. The burden of offering reinstatement in this context rests with the employer; strikers and the union are not required to approach the employer regarding available positions. Laidlaw 25 Corp., 171 NLRB at 1369; see also Alaska Pulp Corp., 326 NLRB 522, 528 (1998) (employer required to “seek out strikers as their prestrike or substantially equivalent positions become available to offer reinstatement”). The evidence here fails to establish that Sparks created or maintained a 30 preferential hiring list prior to September 11, 2015, when it provided a seniority list it was purportedly using as a preferential hiring list to the Union in response to the Union’s information request (G.C. Exhs. 5–7; Tr. 186). Sparks argues in its Post-Hearing Brief that it had no obligation to inform the economic strikers or the Union that permanent replacement employees had been hired, citing Avery Heights, 343 NLRB 1301, 1305–35 1306 (2004), vacated and remanded on other grounds, 448 F.3d 189, 195 (2nd Cir. 2006).19 That case, however, addressed an employer’s refusal to disclose its intention or plan to hire permanent replacement employees; the employer there informed the union that it was hiring permanent replacement employees two weeks after the hiring began. Avery Heights, 343 NLRB at 1306–1307. Here, by contrast, Sparks declined for 40 months to inform the Union regarding its hiring of permanent replacement employees 18 The precise number of Laidlaw vacancies to which economic strikers should have been reinstated is a matter for compliance. Chicago Tribune Co., 304 NLRB 259, 277–278 (1991); Concrete Pipe & Products Corp., 305 NLRB 152, 154 fn. 9 (1991). 19 The Second Circuit upheld the Board’s determination that the employer in Avery Heights was not required to inform the employees or the union prior to hiring permanent replacements, but reversed the Board’s conclusion that its having done so did not violate the Act. JD(NY)-43-16 22 and the existence of any preferential hiring list. It pursued this course despite the Union’s reiteration of its unconditional offer to return to work at the January 8, 2015 negotiating session, the Union’s subsequent request for information regarding Sparks’ rationale for refusing to reinstate the striking employees, and subsequent bargaining sessions (on February 25 and March 20, 2015,20 for example). Furthermore, the 5 evidence as discussed above establishes that Sparks not only hired replacement employees, but continued to do so through February 2015 (when it hired Sturms) without informing the Union or the striking employees. I also note that, if Sparks had truly eliminated waitstaff and bartender positions for legitimate business reasons such as a financial decline, the failure to notify the Union “tends to militate against 10 Respondent’s good faith in dealing with the strikers.” Transport Service Co., 302 NLRB 22, 29 (1991). As a result, the evidence establishes that Sparks failed to satisfy its obligation to create and implement a preferential hiring list with respect to the striking employees. 15 Sparks further argues that it discharged its duty to create and maintain a preferential hiring list when it notified the Board Agent by letter of March 5, 2015, that the economic strikers had been permanently replaced.21 I disagree. First of all, it is baffling that Sparks would provide this information to the Board Agent during the course of the investigation without providing it to the Union, with whom it was interacting at 20 least once per month for contract negotiations. Notice provided to a Board Agent during the investigation of an unfair labor practice charge does not constitute notice to the Union or the striking employees. Furthermore, in the March 5, 2015 letter itself, Sparks attempts to turn the evidentiary burdens in this area on their head by complaining that the Union had not actively sought bargaining regarding returning the striking employees 25 to work. As the above-described caselaw makes clear, the onus for creating the preferential hiring list and making offers of reinstatement to economic strikers falls on the employer. For all of the foregoing reasons, I find that Sparks failed to and refused to place 30 the striking employees on a preferential hiring list in violation of Sections 8(a)(1) and (3) of the Act. 3. The Alleged Discharge of the Strikers The complaint further alleges at Paragraph 7(d) that Respondent violated 35 Sections 8(a)(1) and (3) of the Act by discharging the striking employees on December 22, 2014. See Tri-State Wholesale Bldg. Supplies, Inc., 362 NLRB No. 85 at p. 1, fn. 1, p. 5 (2015) (enfd. 2016 WL 4245468 (6th Cir. 2016)); Pride Care Ambulance, 356 NLRB 20 Sparks attempted to elicit testimony from LoIacono to the effect that on or about March 20, 2015, Abondolo told him that Zimmerman had stated that Sparks had permanently replaced the striking employees (Tr. 208–213, 357). As Zimmerman chose not to address this issue in his testimony, I credit LoIacono’s statement that Abondolo never did so. In any event, affirmative testimony on LoIacono’s part would have been nonprobative hearsay. 21 Sparks attached a copy of this letter to its Post-Hearing Brief and raised this argument for the first time therein. General Counsel subsequently moved to strike based upon Sparks’ failure to enter the evidence into the record during the hearing. Respondent countered that the ALJ may take judicial notice of records within the agency’s own files. I have considered the letter submitted by Sparks, but do not ultimately find it material to my conclusions on the issue for the reasons which follow in the text. JD(NY)-43-16 23 No. 128 at p. 1–3 (2011). General Counsel contends that on December 22, 2014, Sparks violated Sections 8(a)(1) and (3) by discharging the striking employees via Zimmerman’s email to O’Leary. In order to determine whether a striker has been discharged, the Board evaluates whether the employer’s statements and actions “would logically lead a prudent person to believe his [or her] tenure has been terminated.” 5 Pride Care Ambulance, 356 NLRB 1023, 1024, quoting Leiser Construction LLC, 349 NLRB 413, 416 (2007), petition for review denied, enfd. 281 Fed. App’x 781 (10th Cir. 2008); see also Tri-State Wholesale Bldg. Supplies, Inc., 362 NLRB No. 85, at p. 5. In order to determine whether a prudent person would reasonably believe that their employment had been terminated, “it is necessary to consider the entire course of 10 relevant events from the employee’s perspective.” Pride Care Ambulance, 356 NLRB supra at 1024, quoting Leiser Construction LLC, 349 NLRB at 416. In addition, the Board has held that any uncertainty created by the employer’s statements or actions will be construed against it. Kolkka Tables & Finnish-American Saunas, 335 NLRB 844, 846 (2001). As the Board stated in Brunswick Hospital Center, if the employer’s 15 conduct engenders “a climate of ambiguity and confusion which reasonably caused strikers to believe that they had been discharged or, at the very least, that their employment status was questionable because of their strike activity, the burden of the results of that ambiguity must fall on the employer.”22 265 NLRB 803, 810 (1982); see also Kolkka Tables & Finnish-American Saunas, 335 NLRB at 846–847; Grosvenor 20 Resort, 336 NLRB 613, 617–618 (2001). I find under the above standard that Zimmerman’s December 22 email on behalf of Sparks to O’Leary constituted a discharge of the striking employees. In this email, Zimmerman informs the Union, “be advised that Sparks must reject the union’s offer to 25 return the striking employees to work at this time,” without using the words “discharge” or “terminate.” However, Zimmerman attributes Sparks’ refusal to return the striking employees to work to “serious misconduct and unprotected activity by . . . the striking employees during the two separate strikes at Sparks between December 5 and December 19, including . . . violence, threats and intimidation towards patrons and 30 employees, destruction of property and trespass.” Zimmerman goes on to describe the refusal to return the striking employees to work as the “option” that “best protects the safety and security of its patrons, employees and delivery people from the [striking employees’] conduct,” and raises the possibility of legal action by stating that Sparks “reserves all legal rights in connection with . . . Sparks’ employees’ conduct.” I find that 35 the striking employees could reasonably interpret Zimmerman’s statements accusing them of “violence, threats,” “intimidation,” “destruction of property and trespass,” declining to return them to work to ensure “the safety and security of [Sparks] patrons, employees and delivery people,” and intimating potential legal action as discharging them from employment. Thus, in the context of the caselaw Zimmerman’s statements40 in his December 22 email, in conjunction with Respondent’s refusal to admit the employees onto Sparks’ premises on December 19 after their unconditional offer to 22 In its Post-Hearing Brief, Sparks attempts to effectively reverse the well settled rule construing ambiguities in this respect against the employer by contending that the conduct of the Union and the 401(k) plan administrator “inflamed” the employees and caused any confusion regarding their employment status. R.S. Post-Hearing Brief at 21–23 and 24–25. I decline to do so. JD(NY)-43-16 24 return to work, would lead the employees to reasonably believe that Sparks had terminated their employment.23 In reaching this conclusion, I reject Sparks’ argument that Zimmerman’s December 22 email should be the only piece of evidence considered in order to 5 determine whether Respondent discharged the striking employees (R.S. Post-Hearing Brief at p. 18–20). Respondent contends that because the consolidated complaint alleges at ¶ 7(d) that Sparks, by Zimmerman’s email, discharged the striking employees on December 22, no other evidence regarding the status of the striking employees, or their interactions with Sparks representatives, should be evaluated. However, Sparks, 10 having heard the evidence presented by General Counsel, had a full and fair opportunity to adduce its own evidence relevant to the alleged discharge of the striking employees at the hearing. Sparks tacitly acknowledges as much; at the hearing and in its Post-Hearing Brief, Sparks stated, “neither [the December 22 e-mail] nor any other action by Sparks could have led a reasonable person to believe Sparks had terminated 15 any economic striker” (Tr. 352–354; Post-Hearing Brief at p. 18). In its Post-Hearing Brief Sparks goes on to address, in addition to Zimmerman’s December 22 email, the parties’ remarks at the January 20 bargaining session, and “confusion” which may have been caused by the striking employees’ interactions with the benefits plan administrator (Post-Hearing Brief at 25). These arguments illustrate that, despite the wording of the 20 complaint’s allegation, Sparks had an opportunity to respond to additional evidence presented by the General Counsel which would tend to establish a reasonable belief on the part of the striking employees that they had been discharged. Nor do I find persuasive the other evidence presented by Sparks in support of its 25 contention that the striking employees could not have reasonably believed that they were discharged. Sparks argues that as of January 8, 2015, the striking employees’ personal belongings remained in the employees’ lockers at Sparks, indicating that they were still employed. However, this fact is irrelevant when the employees had been barred by Sparks from returning to the restaurant for any purpose in order to, according30 to Zimmerman, protect the current employees and Sparks’ property.24 Sparks’ recall of one of the striking employees in August 2015 cannot possibly be relevant to the employees’ reasonable belief as to their employment status during the seven intervening months. Furthermore, the fact that termination letters, which had been issued in the past, were not issued to the striking employees does not clarify the 35 23 I further note that some striking employees were provided with contradictory information regarding their employment status via Sparks’ health insurance plan administrator which, at the very least, would raise the possibility that they had been discharged. The evidence establishes that in January 2015, some employees who participated in Sparks’ group health insurance plan received letters stating that their coverage was being terminated based upon a qualifying event in the form of a “termination,” and notifying them of their rights under COBRA (G.C. Exh. 8; Tr. 196). One month later, at least one employee was sent a second COBRA letter, describing the qualifying event in question as a “reduction in hours” (R.S. Exh. 2). The employee to whom the second COBRA letter was addressed testified that he never received it (Tr. 200–201). Nevertheless, I find it unreasonable to place on the employees the onus for discerning the meaning of different qualifying events under COBRA in order to dispel the confusion regarding their employment status which these letters doubtless engendered. 24 Hajdini testified that at the time he did not know whether his belongings remained in his locker, because he had not been allowed back on Sparks’ premises (Tr. 64). JD(NY)-43-16 25 ambiguity in their employment status created by Sparks’ conduct. There is no evidence that termination letters had been issued by Sparks as a long-standing practice,25 and Edelstein admitted that sending such letters to discharged employees was a practice only recently implemented (Tr. 472). As discussed above, it is the perspective of the employees, and not the specific conduct of the employer, that is considered in 5 determining whether they reasonably believed that they were discharged. Given Sparks’ refusal to permit the striking employees to enter the premises on December 19 and Zimmerman’s December 22 email, Sparks’ declining to issue termination letters is insufficient to clarify the ambiguity created by its other conduct in the minds of the striking employees. 10 I am also unpersuaded by Sparks’ contention that the language of the December 22 email is less explicit than the statements at issue in Tri-State Wholesale Building Supplies, Inc. and Grosvenor Resort which were found to engender a reasonable belief that economic strikers had been terminated. Tri-State Wholesale Building Supplies, Inc.15 involved an unequivocal statement that the economic strikers had been discharged. 362 NLRB No. 85 at p. 4 (“Please be advised you should not report for work at Tri-State Wholesale for any future shifts as your position has been filled and your employment terminated”). However, as discussed above, the standard requires not a definitive statement of discharge, but only circumstances engendering a reasonable belief on the 20 part of the economic strikers that they have been terminated, with ambiguities created by the employer’s conduct construed against them. The ambiguity created by Sparks’ conduct here—the refusal to allow the striking employees on the premises on December 19 and Zimmerman’s December 22 email—was sufficient to create a reasonable belief that the striking employees had been discharged. The situation at 25 issue in Grosvenor Resort, also cited by Sparks, is more analogous to the events established by the credible evidence here. In that case, the employer’s communication to the striking workers stated “that they had been permanently replaced . . . that they should bring ‘all their uniforms, hotel ID/timecard, and any other [of the Respondent’s] property’ to the Respondent’s office,” to receive “their ‘final check’ for their ‘final wages,’ 30 including any outstanding vacation pay” contractually available only upon termination. Grosvenor Resort, 336 NLRB at 617–618. The Board concluded that the employer’s references to a “final check” for “final wages” and “outstanding vacation pay” remittable solely upon discharge was sufficient to create a reasonable belief that the striking employees had been terminated. Here the references in Zimmerman’s December 22 35 email to violence, threats, destruction of property, and other unlawful conduct, together with the implication of legal action, served a similar purpose. The issue of the striking employees’ understanding is further complicated here by the fact that Sparks did not inform the union or the strikers that it was hiring permanent 40 replacement employees. Of course, Sparks was not required to do so. Avery Heights, 343 NLRB at 1305–1306. However, after December 19, 2014, Sparks continued to rebuff the striking employees’ unconditional offers to return to work at the parties’ 25 Sparks introduced two letters threatening employees who were apparently absent from work for two months with discharge if they did not return to work within a stated period of time, but both are dated September 24, 2014 (R.S. Exhs. 10, 11). JD(NY)-43-16 26 January 8, 2015 negotiating session. The evidence also establishes that at subsequent negotiating sessions on January 20 and February 25, Sparks did not inform the union that it had prepared a preferential hiring list or an order for the recall of the striking employees. Sparks was within its rights when it did not disclose its intent to hire permanent replacement employees prior to doing so. However, this does not somehow 5 remove from consideration the effect of its continued failure to provide this information to the striking employees and the union, together with the failure to provide a preferential hiring list, on the perception of the striking employees regarding their employment status. 10 In this regard, I find that Sparks’ shifting explanations for its refusal to recall the striking employees particularly pertinent. As discussed above, Zimmerman’s December 22 email provided one rationale for refusing to allow the striking employees to return to work—picket line misconduct, including “violence, threats,” “intimidation,” “destruction of property and trespass.” The hiring of permanent replacements—which had allegedly 15 occurred prior to that time—and a downturn in business which resulted in the need for a smaller staff were not mentioned. At the January 8, 2015 negotiating session Zimmerman reiterated this rationale, telling LoIacono that he could not return the striking employees to work because he was “protecting Sparks property.” When the Union subsequently wrote to request information regarding Zimmerman’s claim, 20 Zimmerman responded with legal sophistry, and never provided information. Now, however, in its Post-Hearing Brief, Sparks does not even assert that some sort of picket line misconduct constituted its legitimate business justification for refusing to return the striking employees to work. Instead, Sparks contends that its legitimate business justifications consist of having hired permanent replacement employees prior to the 25 striking employees’ unconditional offer to return to work, and its economic downturn. These shifting contentions support the conclusion that Sparks’ conduct with respect to the union and the striking employees created ambiguity regarding their status which should be construed against Respondent. 30 Finally, Sparks contends that the striking employees could not have interpreted the December 22 email as discharging them because the e-mail was sent to Charging Party UFCW Local 342, and not to the employees. I find this argument unpersuasive as well. The record indicates that UFCW Local 342 was certified as the exclusive collective-bargaining representative of Sparks’ waitstaff and bartenders on July 11, 35 2013, and the parties have been negotiating a collective-bargaining agreement since that time. Shop stewards and striking employees Kristofer Fuller and Valjon Hajdini attended collective-bargaining negotiations with Local 342 representatives. In this context, an assertion that email communications with Local 342 regarding the ongoing strike and contract negotiations were somehow insufficient to constitute notice to the 40 striking employees is contrary to the legal status of the parties and simply defies common sense. For all of the foregoing reasons, I find that Sparks discharged the striking employees on December 22, 2014, in contravention of their rights under Laidlaw and its 45 progeny, in violation of Sections 8(a)(1) and (3) of the Act. JD(NY)-43-16 27 4. Kapovic’s Alleged Unlawful Statement Soliciting Employees to Withdraw their Support for the Union The complaint further alleges at Paragraph 5 that Sparks violated Section 8(a)(1) 5 when Kapovic solicited employees to withdraw their support for the union on December 6, 2014. I find that during the meeting that Kapovic initiated with shop steward and negotiating committee member Valjon Hajdini, Kapovic solicited Hajdini and the employees to abandon their support for Local 342. I credit Hajdini’s uncontradicted testimony that Kapovic asked to speak with him, and expressed his opinion that another 10 strike of the waiters and bartenders would “drag the business down” and that the investors with whom he was considering buying the restaurant would “back off” as a result. I further credit Hajdini’s testimony that Kapovic asked him whether the employees would “vote the Union out” if Kapovic and the other investors bought the restaurant. 15 It is well settled that employer attempts to convince employees to abandon their support for a union, or to convince other employees to abandon their union support or activities, violate Section 8(a)(1). See Ozburn-Hessey Logistics LLC, 357 NLRB No. 1526, 1553 (2011) (solicitation of employee to persuade another employee to abandon 20 her support for the union violated Section 8(a)(1)). In addition, employer predictions of adverse business consequences as a result of union representation violate Section 8(a)(1) if they are not supported by an “objective factual basis.” Tradewest Incineration, 336 NLRB 902, 907 (2001) (statement that union representation would make it “unlikely that our parent company will view [employer] as an appropriate location to invest in 25 long-term capital” coercive); see also General Electric Co., 321 NLRB 662, fn. 5, 666– 667 (1996) (upholding ALJ finding of 8(a)(1) violation based on General Manager’s remarks that “the company that supplies the investment dollars for our growth . . . [is] watching what happens here” and encouraging employees to vote against the union); Limestone Apparel Group, 255 NLRB 722, 730–731 (1981) (investor’s statement that he 30 would not commit any additional resources to the plant if the union came in violated Section 8(a)(1)). I find that Kapovic’s statements were unlawful given this legal context. Sparks admitted that Kapovic was at all material times a supervisor within the meaning of 35 Section 2(11), and an agent within the meaning of Section 2(13) acting on Sparks’ behalf. Kapovic approached Hajdini doubtless aware that Hajdini was a shop steward and a member of the union’s negotiating committee, and by asking Hajdini whether the employees as a group would “vote the Union out” appears to have been addressing Hajdini in his representative capacity. Kapovic and Hajdini also discussed the strike in 40 the context of the ongoing contract negotiations. When Hajdini stated to Kapovic that the employees “were not looking to go on strike again,” only for “a simple contract,” and that, “if you don’t want us to go on strike . . . make an offer that is easy for us to accept,” he was addressing Kapovic as a representative of Sparks. Kapovic responded in that capacity, stating that he would going to talk to Steve Cetta, “and see if we can do 45 something about that.” Accordingly, after Kapovic then asked Hajdini whether the employees could “vote the Union out” if Kapovic and his investors bought the JD(NY)-43-16 28 restaurant, Hajdini again referred to the ongoing negotiations, stating, “All we want is a simple contract—that we get treated fairly.” Sparks contends in its Post-Hearing Brief that the evidence does not establish a violation, because Hajdini could not have reasonably believed that Kapovic was 5 “reflecting company policy and speaking and acting for” Sparks’ management, given Kapovic’s comments regarding purchasing the business himself. Post-Hearing Brief at 46–47. However, Sparks admitted on the record that Kapovic was a supervisor within the meaning of Section 2(11) of the Act and an agent within the meaning of Section 2(13) (Tr. 7). As General Counsel points out, it is well settled that “an employer is 10 bound by the acts and statements” of statutory supervisors, “whether specifically authorized or not.” Coastal Sunbelt Produce, 362 NLRB No. 126 at p. 33 (2015); see also Grouse Mountain Lodge, 333 NLRB 1322, 1328 fn. 7 (2001); Manhattan Hospital, 280 NLRB 113, 118 (1986). There is also authority for the proposition that an employer is bound by the acts of supervisors that are contrary to the employer’s directions. See 15 Rosedev Hospitality, Secaucus, LP, 349 NLRB 202 fn. 3, 210–211 (2007); Dixie Broadcasting Co., 150 NLRB 1054, 1076–1079 (1965). By contrast, the cases discussed by Sparks in its Brief involve situations where the individual in question was neither a statutory supervisor nor an agent of the 20 employer, and the allegations that their statements violated Section 8(a)(1) were dismissed on that basis. See Pan-Oston Co., 336 NLRB 305, 305–307 (2001) (employee who allegedly committed Section 8(a)(1) violations neither a statutory supervisor nor an agent of Respondent pursuant to Section 2(13)); Waterbed World, 286 NLRB 425, 426–427 (1987) (same). While, as discussed in Pan-Oston Co., an 25 employee may function as an agent of the employer pursuant to Section 2(13) for one purpose but not another, Sparks provides no support for the position that that principle also applies to statutory supervisors within the meaning of Section 2(11). 336 NLRB at 305-306. The Board did apply this particular agency principle to a statutory supervisor in Sea Mar Community Health Center, 345 NLRB 947 (2005). However, that case 30 involved a renegade supervisor who established an expanded dental lab and created a dental lab technician position, in direct contravention of specific orders by employer’s CEO and Deputy Director prohibiting him from doing so. Sea Mar Community Health Center, 345 NLRB at 949–950. Characterizing the case as involving “unique circumstances,” and an “unusual factual scenario,” the Board held that the employer did 35 not violate Section 8(a)(1) and (5) by refusing to provide the union with notice and the opportunity to bargain regarding the closure of the “rogue” dental lab and its effects.26 26 I note that recently in United States Postal Service, 364 NLRB No. 62 (2016), the Board affirmed an ALJ’s order finding that a statutory supervisor was acting in her personal interest, and not as an agent within the scope of her employment, when she obtained a stalking order against a union steward. The ALJ found, based on the supervisor’s testimony, that the supervisor obtained the stalking order as “an act of desperation…to alleviate her own personal fears.” United States Postal Service, 364 NLRB No. 62 at p. 18. As a result, the ALJ found that the only conduct of the supervisor imputable to the employer was the supervisor’s enforcement of the terms of the protective order on the employer’s premises, which interfered with the union steward’s contract administration activities. United States Postal Service, 364 NLRB No. 62 at p. 1, 18–19. However, the Board noted that there were no exceptions filed with respect to this particular conclusion. United States Postal Service, 364 NLRB No. 62 at p. 1, fn. 2. As a result, I do not consider the case to have precedential import on the issue. JD(NY)-43-16 29 Sea Mar Community Health Center, 345 NLRB at 947, 949–951. As a result, I do not find that case to be applicable here. Instead, I find that the circumstances surrounding Kapovic’s comments to Hajdini fall more appropriately within the scope of cases ruling that an employer is bound by the5 comments of a supervisor, even when unauthorized. Kapovic and Hajdini were on Sparks’ premises and in a work area when Kapovic initiated the conversation. Although Kapovic referred to his interest in buying the restaurant and potential investors, Hajdini responded in terms of the current contract negotiations, stating that an offer from Sparks that the employees could accept would obviate the possibility of another strike. 10 Kapovic in turn did not respond as an individual seeking to establish his own business; instead he said that he would speak to Cetta and “see if we can do something about that.” Therefore, it was reasonable for Hajdini to believe that Kapovic was addressing him as a supervisor on behalf of Sparks, as well as a possible purchaser of the business. I therefore find that Sparks is bound by Kapovic’s comments. 15 For all of the foregoing reasons, I find that Sparks violated Section 8(a)(1) when Kapovic unlawfully solicited of employees to abandon their support for the Union on December 6, 2014. 20 5. Remedial Issues Under current Board law, lawful economic strikers that have been unlawfully discharged are entitled to, “full reinstatement to their former jobs, or, if those jobs no longer exist, to substantially equivalent positions, without prejudice to their seniority or 25 any other rights or privileges previously enjoyed, discharging, if necessary, any replacements, and mak[ing] them whole for any loss of earnings and other benefits.” Tri- State Wholesale Building Supplies, 362 NLRB No. 85 at p. 1 (2015). However, remedies available to economic strikers are contingent upon whether the economic striker was permanently replaced before or after their unlawful discharge. Detroit 30 Newspapers, 343 NLRB 1041–1042 (2004). If the strikers were permanently replaced after the unlawful discharge, they are “entitled to immediate reinstatement and backpay running from the date of the discharge (regardless of when, or if, [they] unconditionally offer[] to return to work).” Detroit Newspapers, 343 NLRB at 1041–1042, citing Hormigonera del Toa, Inc., 311 NLRB 956, 957–958, fn. 3 (1993). If the strikers were 35 lawfully permanently replaced prior to the discharge, they are entitled to reinstatement upon the departure of the employee that permanently replaced them, with backpay running from the date that the replacement employee leaves. Detroit Newspapers, 343 NLRB at 1041–1042. 40 Here, the economic strike began on December 10, 2014. The striking employees made an unconditional offer to return to work on December 19, 2014, and were subsequently discharged on December 22, 2014, in violation of Sections 8(a)(1) and (3) of the Act. However, in this case the remedial distinction articulated in Detroit Newspapers is irrelevant given my conclusion that Respondent has not satisfied its 45 burden to prove that it had permanently replaced the economic strikers prior to the unconditional offer to return to work on December 19, 2014. As a result, the economic JD(NY)-43-16 30 strikers were not permanently replaced prior to their discharge on December 22, 2014. The striking employees are therefore entitled to immediate reinstatement and backpay running from December 19, 2014, the date of their unconditional offer to return to work. General Counsel asks me to review and overturn the “Board’s current remedial 5 rule” as applied to unlawfully discharged economic strikers, so that the available remedies are no longer contingent upon whether the economic strikers were permanently replaced prior to the date of their discharge. As discussed above, such a venture is unnecessary. In any event, as an Administrative Law Judge, I am bound to follow existing Board law which has not been overruled by the Supreme Court. 10 Pathmark Stores, Inc., 342 NLRB 378 fn. 1 (2004); see also Gas Spring Co., 296 NLRB 84, 97–98 (1989), enfd. 908 F.2d 966 (4th Cir. 1990). General Counsel also urges that I award search-for-work and work-related expenses to the economic strikers who were unlawfully discharged, regardless of the 15 discharged strikers’ interim earnings and separately from taxable net backpay, with interest. Such a component of the remedy is appropriate based upon the Board’s recent ruling to that effect in King Soopers, Inc., 364 NLRB No. 93 at p. 8–9 (2016) (providing for such a remedy, to be ordered on a retroactive basis). Backpay shall be calculated in accordance with F.W. Woolworth Co., 90 NLRB 289 (1950), being 20 awarded on a quarterly basis with interest accruing as set forth in New Horizons, 283 NLRB 1173 (1987), and compounded in accordance with Kentucky River Medical Center, 356 NLRB 6 (2010). Interest on search-for-work and work-related expenses shall be calculated in the same manner. Respondent will also be required to absorb the adverse tax consequences, if any, of receiving a lump-sum backpay award covering 25 periods longer than one year as set forth in Don Chavas, LLC d/b/a Tortillas Don Chavas, 361 NLRB No. 10 (2014), and to file a report with the Social Security Administration allocating the payments to the appropriate calendar quarters. CONCLUSIONS OF LAW30 1. Respondent Michael Cetta, Inc. d/b/a Sparks Restaurant (“Respondent”) is an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act. 35 2. United Food and Commercial Workers (“the Union”) is a Labor Organization within the meaning of Section 2(5) of the Act. 3. By failing and refusing to reinstate Gerardo Alarcon, Fredy Albarracin, Marko Beljan, James Campanella, Ian Collins, Elvis Cutra, Arlind Demaj, Kristofer Fuller, Adem 40 Gjevukaj, Valjon Hajdini, Elvi Hoxhaj, Juan Iriarte, Ante Ivre, Amir Jakupi, Bardhyl Kelmendi, Jeton Kerahoda, Milazim Kukaj, Rachid Lamniji, Valon Lokaj, Silvio Lustica, Iber Mushkolaj, Gani Neziraj, Kenan Neziraj, Xhavit Neziraj, Adnan Nuredini, Juan Patino, Sadik Prelvukaj, Francisco Puente, Ermal Qelia, Nagip Resulbegu, Khalid Seddiki, Youssef Semlalo El Idrissi, Fatlum Spahija, Andrzej 45 Stepien, Alim Tagani, and Mergim Zeqiraj since their unconditional offer to return to work on December 19, 2014, Respondent violated Sections 8(1) and (3) of the Act. JD(NY)-43-16 31 4. By denying the employees listed above their right to be placed on a preferential hiring list since December 19, 2014, Respondent violated Sections 8(a)(1) and (3) of the Act. 5 5. By discharging the employees listed above on or about December 22, 2014, Respondent violated Sections 8(a)(1) and (3) of the Act. 6. By soliciting employees to withdraw their support for the Union, Respondent violated Section 8(a)(1) of the Act. 10 7. The above violations are unfair labor practices affecting commerce within the meaning of Sections 2(6) and (7) of the Act. REMEDY15 Having found that Respondent engaged in an unfair labor practice, I shall order it to cease and desist from such conduct and to take certain affirmative action designed to effectuate the policies of the Act. 20 Having found that the Respondent unlawfully refused to reinstate Gerardo Alarcon, Fredy Albarracin, Marko Beljan, James Campanella, Ian Collins, Elvis Cutra, Arlind Demaj, Kristofer Fuller, Adem Gjevukaj, Valjon Hajdini, Elvi Hoxhaj, Juan Iriarte, Ante Ivre, Amir Jakupi, Bardhyl Kelmendi, Jeton Kerahoda, Milazim Kukaj, Rachid Lamniji, Valon Lokaj, Silvio Lustica, Iber Mushkolaj, Gani Neziraj, Kenan Neziraj, Xhavit 25 Neziraj, Adnan Nuredini, Juan Patino, Sadik Prelvukaj, Francisco Puente, Ermal Qelia, Nagip Resulbegu, Khalid Seddiki, Youssef Semlalo El Idrissi, Fatlum Spahija, Andrzej Stepien, Alim Tagani, and Mergim Zeqiraj, upon their unconditional offer to return to work, and that Respondent unlawfully discharged these employees, I shall order Respondent to offer them full reinstatement to their former jobs, or, if those jobs no 30 longer exist, to substantially equivalent positions, without prejudice to their seniority or any other rights or privileges previously enjoyed, discharging, if necessary, any replacements, and make them whole for any loss of earnings and other benefits. Backpay shall be calculated in accordance with F.W. Woolworth Co., 90 NLRB 289 (1950), with interest accruing at the rate prescribed in New Horizons, 283 NLRB 1173 35 (1987), and compounded daily as prescribed in Kentucky River Medical Center, 356 NLRB 6 (2010). In accordance with Don Chavas, LLC d/b/a Tortillas Don Chavas, 361 NLRB No. 10 (2014), Respondent shall also compensate the unlawfully discharged employees for the adverse tax consequences, if any, of receiving lump-sum backpay awards, and file a report with the Social Security Administration allocating backpay 40 awards to the appropriate calendar quarters for each employee. Pursuant to King Soopers, Inc., 364 NLRB No. 93 (2016), Respondent shall further compensate the employees named above for search-for-work and interim employment expenses, separately from taxable net backpay and regardless of whether they exceed the employees’ interim earnings, with interest at the rate prescribed in New Horizons, 45 compounded daily as prescribed in Kentucky River Medical Center, above. JD(NY)-43-16 32 On these findings of fact and conclusions of law, and on the entire record herein, I issue the following recommended27 ORDER 5 Respondent Michael Cetta, Inc. d/b/a Sparks Restaurant, New York, New York, its officers, agents, successors and assigns, shall 1. Cease and desist from 10 (a) Discharging or otherwise discriminating against employees for engaging in an economic strike. (b) Denying employees engaged in an economic strike their right to be placed on a preferential hiring list.15 (c) Failing and refusing to reinstate employees engaged in an economic strike after their unconditional offer to return to work. (d) Soliciting employees to withdraw their support for the Union.20 (e) In any other manner interfering with, restraining, or coercing employees in the exercise of the rights guaranteed in Section 7 of the Act. 2. Take the following affirmative action necessary to effectuate the policies of 25 the Act. (a) Within 14 days from the date of the Board’s Order, offer Gerardo Alarcon, Fredy Albarracin, Marko Beljan, James Campanella, Ian Collins, Elvis Cutra, Arlind Demaj, Kristofer Fuller, Adem Gjevukaj, Valjon Hajdini, Elvi 30 Hoxhaj, Juan Iriarte, Ante Ivre, Amir Jakupi, Bardhyl Kelmendi, Jeton Kerahoda, Milazim Kukaj, Rachid Lamniji, Valon Lokaj, Silvio Lustica, Iber Mushkolaj, Gani Neziraj, Kenan Neziraj, Xhavit Neziraj, Adnan Nuredini, Juan Patino, Sadik Prelvukaj, Francisco Puente, Ermal Qelia, Nagip Resulbegu, Khalid Seddiki, Youssef Semlalo El Idrissi, Fatlum Spahija, 35 Andrzej Stepien, Alim Tagani, and Mergim Zeqiraj full reinstatement to their former jobs, or, if those jobs no longer exist, to substantially equivalent positions, without prejudice to their seniority or any other rights or privileges previously enjoyed, and discharging if necessary any replacements.40 27 If no exceptions are filed, as provided by Sec. 102.46 of the Board’s Rules and Regulations, the findings, conclusions, and recommended order shall, as provided in Sec. 102.48 of the Rules, be adopted by the Board and all objections to them shall be waived for all purposes. JD(NY)-43-16 33 (b) Make the above employees whole for any loss of earnings and other benefits suffered as a result of the discrimination against them, in the manner set forth in the Remedy section of this Decision. (c) Compensate the affected employees for the adverse tax consequences, if 5 any, of receiving lump-sum backpay awards, and file a report with the Social Security Administration allocating the backpay awards to the appropriate calendar quarters for each employee. (d) Within 14 days from the date of this Order, remove from its files any 10 reference to the unlawful discharges, and within 3 days thereafter, notify the employees in writing that this has been done and that the discharges will not be used against them in any way. (e) Preserve and, within 14 days of a request, or such additional time as the 15 Regional Director may allow for good cause shown, provide at a reasonable place designated by the Board or its agents, all payroll records, social security payment records, timecards, personnel records and reports, and all other records, including an electronic copy of such records if stored in electronic form, necessary to analyze the amount of 20 backpay due under the terms of this Order. (f) Within 14 days after service by the Region, post, at its facility in New York, New York, copies of the attached notice marked “Appendix.”28 Copies of the notice, on forms provided by the Regional Director for Region 2, after 25 being signed by the Respondent’s authorized representative, shall be posted by the Respondent and maintained for 60 consecutive days in conspicuous places, including all places where notices to employees are customarily posted. In addition to physical posting of paper notices, the notices shall be distributed electronically, such as email, posting on an 30 intranet or an internet site, and/or other electronic means, if the Respondent customarily communicates with employees by such means. Reasonable steps shall be taken by the Respondent to ensure that the notices are not altered, defaced, or covered by any other material. In the event that, during the pendency of these proceedings, the Respondent 35 has gone out of business or closed the facility involved in these proceedings, the Respondent shall duplicate and mail, at its own expense, a copy of the notice to all current employees employed by the Respondent at any time since December 19, 2014. 40 28 If 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.” JD(NY)-43-16 34 (g) Within 21 days after service by the Region, file with the Regional Director a sworn certification of a responsible official on a form provided by the Region attesting to the steps that the Respondent has taken to comply. 5 Dated, Washington, D.C., November 18, 2016 10 __________________________ Lauren Esposito Administrative Law Judge APPENDIX NOTICE TO EMPLOYEES Posted by Order of the National Labor Relations Board An Agency of the United States Government The National Labor Relations Board has found that we violated the National Labor Relations Act and has ordered us to post and abide by this notice. FEDERAL LAW GIVES YOU THE RIGHT TO Form, join, or assist a union Choose representatives to bargain with us on your behalf Act together with other employees for your benefits and protection Choose not to engage in any of these protected activities WE WILL NOT discharge or otherwise discriminate against any of you for engaging in an economic strike or other protected concerted activities. WE WILL NOT deny you the right to be placed on a preferential hiring list when engaged in an economic strike. WE WILL NOT unlawfully refuse to reinstate you if you are engaged in an economic strike and make an unconditional offer to return to work. WE WILL NOT solicit you to withdraw your support for the Union. WE WILL NOT in any other manner interfere with, restrain, or coerce you in your exercise of the rights listed above. WE WILL within 14 days of the Board’s Order, offer Gerardo Alarcon, Fredy Albarracin, Marko Beljan, James Campanella, Ian Collins, Elvis Cutra, Arlind Demaj, Kristofer Fuller, Adem Gjevukaj, Valjon Hajdini, Elvi Hoxhaj, Juan Iriarte, Ante Ivre, Amir Jakupi, Bardhyl Kelmendi, Jeton Kerahoda, Milazim Kukaj, Rachid Lamniji, Valon Lokaj, Silvio Lustica, Iber Mushkolaj, Gani Neziraj, Kenan Neziraj, Xhavit Neziraj, Adnan Nuredini, Juan Patino, Sadik Prelvukaj, Francisco Puente, Ermal Qelia, Nagip Resulbegu, Khalid Seddiki, Youssef Semlalo El Idrissi, Fatlum Spahija, Andrzej Stepien, Alim Tagani, and Mergim Zeqiraj full reinstatement to their former jobs, or, if those jobs no longer exist, to substantially equivalent positions, without prejudice to their seniority or any other rights or privileges previously enjoyed, and discharging if necessary any replacements. WE WILL make those employees whole for any loss of earnings and other benefits resulting from our failure to reinstate them after their unconditional offer to return to work and from their discharge, less any net earnings, plus interest. WE WILL compensate those employees for the adverse tax consequences, if any, of receiving lump-sum backpay awards, and WE WILL file a report with the Social Security Administration allocating the backpay awards to the appropriate calendar quarters for each employee. WE WILL within 14 days from the date of this Order, remove from our files any reference to the unlawful discharge of those employees, and WE WILL within 3 days thereafter, notify each of them in writing that this has been done and that the discharges will not be used against them in any way. MICHAEL CETTA, INC. d/b/a SPARKS RESTAURANT (Employer) Dated By (Representative) (Title) The National Labor Relations Board is an independent Federal agency created in 1935 to enforce the National Labor Relations Act. It conducts secret-ballot elections to determine whether employees want union representation and it investigates and remedies unfair labor practices by employers and unions. To find out more about your rights under the Act and how to file a charge or election petition, you may speak confidentially to any agent with the Board’s Regional Office set forth below. You may also obtain information from the Board’s website: www.nlrb.gov. 26 Federal Plaza, Suite 3614 New York, NY 10278-0104 Hours: 8:45 a.m. to 5:15 p.m. 212-264-0300 The Administrative Law Judge’s decision can be found at www.nlrb.gov/case/02-CA-142626 or by using the QR code below. Alternatively, you can obtain a copy of the decision from the Executive Secretary, National Labor Relations Board, 1015 Half Street, S.E., Washington, D.C. 20570, or by calling (202) 273-1940. THIS IS AN OFFICIAL NOTICE AND MUST NOT BE DEFACED BY ANYONE THIS NOTICE MUST REMAIN POSTED FOR 60 CONSECUTIVE DAYS FROM THE DATE OF POSTING AND MUST NOT BE ALTERED, DEFACED, OR COVERED BY ANY OTHER MATERIAL. ANY QUESTIONS CONCERNING THIS NOTICE OR COMPLIANCE WITH ITS PROVISIONS MAY BE DIRECTED TO THE ABOVE REGIONAL OFFICE’S COMPLIANCE OFFICER, 212-264-0300. Copy with citationCopy as parenthetical citation