The Bronx Health Plan

National Labor Relations Board - Board Decisions

Aug 27, 1998

326 N.L.R.B. 810 (N.L.R.B. 1998)

DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 810
The Bronx Health Plan and 1199, National Health
and Human Service Employees Union. Case 2–
CA–26995
August 27, 1998
DECISION AND ORDER
BY CHAIRMAN GOULD AND MEMBERS LIEBMAN
AND HURTGEN
On March 2, 1995, Administrative Law Judge Ray-
mond P. Green issued the attached decision. The Gen-
eral Counsel and the Union filed exceptions and support-
ing briefs. The Respondent filed an answering brief in
opposition to the exceptions.
The National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
The Board has considered the decision and the record
in light of the exceptions and briefs and has decided to
affirm the judge’s rulings, findings,1 and conclusions
only to the extent consistent with this Decision and Or-
der.2
The primary issue in this case is whether the Respon-
dent is a successor employer to Montefiore Hospital and
if so, whether the Respondent violated Section 8(a)(5)
and (1) of the Act by refusing to recognize and bargain
with the Union and by unilaterally setting different terms
and conditions of employment for its employees.
Background
The undisputed facts are as follows.
The Respondent is a not-for-profit corporation that
provides a prepaid Health Services Plan to Medicaid re-
cipients in lieu of Medicaid. The Respondent’s clients
are provided a list of approved health care providers and
facilities from which to choose a physician or clinic.
The initial planning and developmental stages for what
became “The Bronx Health Plan” (TBHP, Inc.) were
funded by a grant issued to Montefiore by a private
foundation. Montefiore hired a small staff to perform the
grant supported work. In February 1986, the Respondent
filed its articles of incorporation with the State of New
York. However, it did not begin providing the health
care service plan to clients until February 1987.
The Respondent began operations with no employees.
Montefiore provided all managerial and other staff. On
March 27, 1989, the Respondent’s arrangement with
Montefiore was memorialized in a management services
agreement. This agreement expressly stated that Monte-
fiore, on a fee-for-services basis, would provide the Re-
spondent with all its employees, including the managerial
employees, necessary to perform all the work required by
the Respondent. According to the contract’s terms, the
Respondent would, within 5 years, become a regular em-
ployer with its own employees.

1 We agree with the judge that the Respondent and Montefiore are
not joint employers of the unit employees for the reasons set forth in his
decision.
2 We shall modify the judge’s recommended Order in accordance
with our decision in Indian Hills Care Center, 321 NLRB 144 (1996).
From the Respondent’s incorporation in 1986 until
July 1, 1993, Maura Bluestone, although still an em-
ployee of Montefiore, served as the Respondent’s execu-
tive director. The Respondent’s operations were consid-
ered to be a department within the Medical Center,
staffed by Montefiore employees. In addition to Blue-
stone, Montefiore assigned clerical employees to work
for the Respondent. These clerical employees were cov-
ered by and paid in accordance with the collective-
bargaining agreement between the Union and Monte-
fiore. When new employees were required by the Re-
spondent, Bluestone made requisitions to Montefiore’s
personnel department and that department hired or trans-
ferred employees to the Respondent’s operations as
needed.
Montefiore is a member of the League of Voluntary
Hospitals (the League), an employer-member associa-
tion. The League has had a series of collective-
bargaining agreements with the Union that cover the ap-
proximately 3500 Montefiore employees, including the
clerical employees assigned to work for the Respondent.
In addition to the League contract, Montefiore had a lo-
cal agreement with the Union defining the units of Mon-
tefiore employees that are covered by the various collec-
tive-bargaining agreements.
As of mid-1993, Montefiore employed approximately
17 clerical employees who were assigned to the Respon-
dent’s operations. All 17 clerical employees were cov-
ered by the collective-bargaining agreements between
Montefiore and the Union. Despite the fact that the em-
ployees working at the Respondent’s facility were all
employees of Montefiore, there was no interchange be-
tween them and the other represented employees of the
hospital.
By letter dated March 27, 1993, the Respondent,
through its board president, Dr. Robert Massad, notified
Montefiore that it was terminating the management ser-
vices agreement effective June 30, 1993, pursuant to the
provisions of the agreement that permitted termination of
that agreement by either party with ninety (90) days no-
tice.
On May 5, 1993, Bluestone sent a memo to all em-
ployees performing services for the Respondent an-
nouncing that the Respondent was preparing to make the
transition from Montefiore’s management services ar-
rangement to a completely self-managed operation. The
memo invited all employees interested in joining the Re-
spondent’s staff, following the transition, to submit a
general employment application to the Respondent for
consideration.
On May 26, 1993, Montefiore’s director of employee
relations informed each of the unit employees working
for the Respondent that their employment with Monte-
fiore would be terminated as of June 30, 1993. These
326 NLRB No. 68
BRONX HEALTH PLAN 811
unit employees were classified as “non-budgetary” em-
ployees by Montefiore because their wages were paid
from a special grant fund account that was not part of
Montefiore’s general operating budget. The unit em-
ployees were informed that while they were not entitled
to any seniority bumping rights within Montefiore’s
regular operations, they would receive severance pay
pursuant to the collective-bargaining agreements.
On or about June 9, 1993, Union Vice President Nel-
son Valdez met with Bluestone to discuss the collective-
bargaining agreement. During that meeting, Valdez as-
serted that despite the termination of the management
services agreement, the Union would continue to repre-
sent the Respondent’s unit employees, and that the terms
of Montefiore’s collective-bargaining agreements with
the League should remain in effect and apply to the Re-
spondent’s employees. In response, Bluestone asserted
that the Respondent is a separate entity, that it had no
relationship with the Union, and therefore, no obligation
to bargain or assume the terms of the collective-
bargaining agreement between Montefiore and the Un-
ion. Bluestone asserted further that the Respondent
would not have a bargaining obligation to the Union
unless and until the Union files a petition seeking to rep-
resent its employees and is duly elected by those em-
ployees as their collective-bargaining representative.
On July 1, 1993, the Respondent began operating with
its own staff of managerial, supervisory, sales,3 and cleri-
cal employees. No sale or transfer of any physical or
other assets accompanied the termination of the man-
agement services agreement. Montefiore never owned
any part of the Respondent, nor did the Respondent own
any part of Montefiore during the life of the agreement.
The Respondent hired 16 of the original 17 unit employ-
ees employed by Montefiore prior to July 1, 1993. When
the Respondent began operations on July 1, 1993, these
16 employees constituted the Respondent’s entire clerical
staff. The Respondent also hired nearly all of the former
Montefiore managerial, supervisory, and other nonunit
employees associated with the Respondent’s business,
including Bluestone. The Respondent’s business of pro-
viding the health care services plan to its clients was un-
affected by the transition.
On July 6, 1993, Bluestone circulated a memorandum
to all employees regarding the Respondent’s leave poli-
cies. The memo informed the employees that the new
leave policies would be retroactively effective to July 1,
1993. The memo outlined the Respondent’s general
leave, vacation, and benefit policies, and promised those
employees previously assigned to work for the Respon-
dent by Montefiore that “a personalized memo detailing
the status of . . . vacation, sick and personal leave” would

3 As found by the judge, the Respondent’s clerical employees were
the unit covered by the collective-bargaining agreements between Mon-
tefiore and the Union. There is, however, no contention by any party
that sales employees were part of the unit.
be forthcoming. The memo also indicated that each em-
ployee would receive an employee handbook that would
“explain the policies and procedures for earning and us-
ing leave.”
Analysis
In NLRB v. Burns Security Services, 406 U.S. 272
(1972), the Supreme Court set forth the criteria for de-
termining whether a new employer is the successor to the
prior employing entity. The approach is primarily fac-
tual and is based on the totality of the circumstances pre-
sented by each case. The Court instructed that the focus
should be upon whether there is “substantial continuity”
between the enterprises, and whether a majority of the
new employer’s employees had been employed by the
predecessor. The Court held that, in these circumstances,
when one employer takes over the union-represented
bargaining unit employees of another employer, it is
bound to recognize the union as the collective-bargaining
representative of the employees in the unit.
The Supreme Court revisited the successorship issue in
Fall River Dyeing Corp. v. NLRB, 482 U.S. 27 (1987),
where it reiterated the requirement that a “substantial
continuity” must exist between the enterprises before
warranting a finding that the new employer is a succes-
sor. The Supreme Court in Fall River, supra at 43, sum-
marized the factors relevant to determining when sub-
stantial continuity exists as follows:

[W]hether the business of both employers is essentially
the same; whether the employees of the new company
are doing the same jobs in the same working conditions
under the same supervisors; and whether the new entity
has the same production process, produces the same
products, and basically has the same body of custom-
ers.

The Court also stated that the Board will analyze these fac-
tors primarily from the perspective of the employees, that is,
“whether ‘those employees who have been retained will . . .
view their job situations as essentially unaltered.’” Id.,
quoting Golden State Bottling Co. v. NLRB, 414 U.S. 168,
184 (1973). The Court reiterated that although each factor
must be analyzed separately they must not be viewed in
isolation and, ultimately, it is the totality of the circum-
stances that is determinative. See Fall River, supra.
The facts herein show that the Respondent, prior to
July 1, 1993, operated as a health care services insurance
plan. After July 1, 1993, the Respondent continued the
same operations. The Respondent remained in the same
location, using the same name and offering the same ser-
vices, and hired the same employees and supervisors to
perform the same duties, with no hiatus in its operations.
When the Respondent began operations on July 1, 1993,
the clerical employees it hired had all been bargaining
unit employees at Montefiore. From the perspective of
the Respondent’s employees, there is no difference in
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 812
their job situation. Although, before July 1, 1993, the
employees were considered to be employees of Monte-
fiore, the entity for whom they worked held itself out as
“The Bronx Health Plan” and as of July 1, 1993, and
thereafter, the entity continued to hold itself out as “The
Bronx Health Plan.” Therefore, we find that there was
substantial continuity between the employing enterprises.
The chief factor relied on by the administrative law
judge in finding that the Respondent was not a successor
is that the group of union-represented employees hired
by the Respondent is only a small fraction of all the bar-
gaining unit employees covered by the collective-
bargaining agreement between the Union and Monte-
fiore. The judge, citing Nova Services Co.,4 and Atlantic
Technical Services Corp.,5 opined that it was not fair to
presume that the Union maintained continuing majority
status among the unit employees because of the “differ-
ence in the types of the employees involved, the extreme
diminution in the size of the proposed unit, and the fact
that . . . the Respondent . . . and Montefiore are engaged
in two separate kinds of businesses.”
It is well established that the bargaining obligations at-
tendant to a finding of successorship are not defeated by
the mere fact that only a portion of a former union-
represented operation is subject to a sale or transfer to a
new owner so long as the unit employees in the conveyed
portion constitute a separate appropriate unit and com-
prise a majority of the unit under the new operation.6
As set forth in Mondovi Foods Corp., 235 NLRB
1080, 1082 (1978), cited by our dissenting colleague, the
Board’s key consideration is “whether it may reasonably
be assumed that, as a result of transitional changes, the
employees’ desires concerning unionization [have] likely
changed.” [Footnote omitted.] Once it has been found
that the purchaser has hired a sufficient number of former
employees of the seller to constitute a majority of the
purchaser’s employee complement in an appropriate unit,
the Board “considers such circumstances as whether or
not there has been a long hiatus in resuming operations, a
change in product line or market, or a change of location
or scale of operations. . . . However, a change in scale of
operation must be extreme before it will alter a finding of
successorship.” Id.7 We find that none of the factors

4 213 NLRB 95 (1974).
5 202 NLRB 169 (1973).
6 Saks & Co. v. NLRB, 634 F.2d 681, 685 (2d Cir. 1980); Zims Food-
liner, Inc. v. NLRB, 495 F.2d 1131, 1140–1142 (7th Cir. 1974), cert.
denied 419 U.S. 838; Stewart Granite Enterprises, 255 NLRB 569, 573
(1981); Boston-Needham Industrial Cleaning Co., 216 NLRB 26, 28
(1975).
7 As support for this latter proposition, the Board in Mondovi relied
on Ranch Way, Inc., 183 NLRB 1168 (1970), enfd. 445 F.2d 625 (10th
Cir. 1971), vacated 406 U.S. 940 (1972), on remand 81 LRRM 2736
(10th Cir. 1972), successorship finding reaffirmed in 203 NLRB 911
(1973) “in which respondent was found to be a successor although it
had purchased only 1 of the seller’s 16 operations. The seller had a
collective-bargaining agreement with the union covering 800 produc-
tion and maintenance employees; respondent hired 18 of the seller’s
discussed in Mondovi are present here. There was no
hiatus in operations, no change in product line or market,
and no change in location. And, from the perspective of
the Respondent’s employees, there was no change in the
scale of the operation. Thus, there was nothing in the
transitional changes that reasonably “would undermine a
finding that the employees’ desires concerning union
representation have remained unchanged.” Mondovi,
supra.8
Assuming the validity of the cases relied on by the
administrative law judge and our dissenting colleague,
they are distinguishable in any event. In Nova Services,
supra, the Board found no successorship because the
change resulted in what the Board found was an “inap-
propriate ‘fragmentation’ of a previously homogenous
grouping of employees.” Here, there was no “inappro-
priate ‘fragmentation,’” and the unit is unquestionably
appropriate.
As our dissenting colleague concedes, “Montefiore
was the employer of the clerical employees for the 4-year
period prior to the Respondent’s takeover,” during which
time “they were covered by the terms of the Union-
Montefiore collective-bargaining agreement.” In addi-
tion, the clerical employees “perform[ed] a function dis-
tinct from that which the Montefiore unit traditionally
has provided.” Furthermore, while employed by Monte-
fiore, the clerical employees were physically separated
from the remainder of the Montefiore unit, and there was
no employee interchange. Thus, the clerical employees
who subsequently became employees of The Bronx
Health Plan had always been a separate part of a large
and diverse unit. The fact emphasized by our dissenting
colleague—the clerical employees “are now in a small
unit consisting only of themselves”—does not change
their position vis-à-vis representation by the Union.9

previous employees, a majority of the unit complement for the opera-
tion which it purchased.” Mondovi, 235 NLRB at 1082 fn. 8.
8 In concluding otherwise, the judge and our dissenting colleague
rely heavily on the Respondent’s hiring of only 16 of the 3500 Monte-
fiore bargaining unit employees and on the Respondent’s providing
services that are different from those of Montefiore. However, the
judge and our dissenting colleague fail to appraise these factors in the
totality of the circumstances of this case. Thus, the record shows that
the clerical employees Montefiore provided the Respondent never had
any substantial contact with the rest of the Montefiore unit. Further, the
record is clear that the Respondent was created as a completely separate
corporation from Montefiore, that the Respondent was designed to
engage in a completely separate business activity, and that the Respon-
dent’s arrangement with Montefiore was always intended to be of lim-
ited duration. Therefore, on July 1, 1993, when the Respondent began
functioning with its own workforce, from the perspective of the 16
clerical employees retained, there had been no material changes in their
job situations. Consequently, there is no reason to believe that their
views on union representation had changed.
9 As we did in M.S. Management Associates, Inc., 325 NLRB 1154,
1156 fn. 9 (1998), we reject our dissenting colleague’s premise and
conclusion that “if there is no successorship in a case where a homoge-
neous unit remains homogeneous, a fortiori there is no successorship
where a multi-classification unit is fragmented into a distinct, [single]-
classification unit.” As set forth above, we find that the predecessor’s
BRONX HEALTH PLAN 813
In Atlantic Technical, supra, the Board found that suc-
cessorship had not been established, in part, because of
the circumstances under which the employees initially
became represented. The alleged successor took over a
tiny portion of what had previously been a Trans World
Airlines companywide unit of mechanics and related
classifications covering approximately 14,000 employ-
ees. The unit acquired by the alleged successor consisted
of approximately 41 employees doing mail sorting and
distribution, who had been originally brought into the
larger unit as a voluntarily recognized “accretion” to the
overall unit. Apart from the large numerical differences
between the original mechanics’ unit and the alleged
successor unit of mail handlers, the Board, in finding no
successorship relationship, placed special emphasis on
the fact that there had been no showing of majority sen-
timent for the union by the employees in the accreted
mail handlers’ unit.10 By contrast, here there is no issue
of accretion at all. The Board in Atlantic Technical also
relied, inter alia, on the fact that TWA was a large com-
pany engaged primarily in transportation and related
fields, was regulated by the Railway Labor Act,11 and had
contracts throughout the country. It had an agreement
with the union covering a systemwide craft or class of
14,000 TWA mechanics and related employees located
all around the country. That nationwide craft or class
included 1100 employees at the Kennedy Space Center,
41 of whom became the employees of Atlantic Techni-
cal. In contrast to TWA, Atlantic Technical, the alleged
successor, was a small organization, recently organized
to perform small technical support service contracts, such
as the mail and distribution function at the Kennedy
Space Center.
No such obvious contrasts exist in the instant case be-
tween the predecessor and successor enterprises. The
Respondent’s employees were not fragmented from a
very large, nationwide unit and remain employed by an
employer engaged in health care related work in New
York City. Unlike the TWA-Atlantic Technical distinc-
tion, we find that there is substantial continuity between
the two enterprises, and that the diminution of unit scope
under these circumstances is insufficient to meaningfully
affect the way the employees perceive their jobs or sig-

unit here was not inappropriately fragmented, but was divided along a
historical line of separation, resulting in a new appropriate unit of cleri-
cal employees with common duties and interests.
10 Chairman Gould believes that Atlantic Technical, supra, was in-
correctly decided and would overrule that case.
11 Although not determinative, the Board relied on this factor, among
others, in finding no successorship in Atlantic Technical. See 202
NLRB at 170. See also M.S. Management, supra (stating that the Board
in Atlantic Technical relied, inter alia, on the fact that the predecessor
“was regulated by the Railway Labor Act”). Of course, in determining
whether there has been a successorship, nothing in Atlantic Technical
indicates that units established under the Railway Labor Act are to be
treated differently from units established under the NLRA.
nificantly affect employee attitudes concerning union
representation.
For these reasons, we conclude that there exists the
requisite substantial continuity in the employing enter-
prise. Thus, if the unit employees in the conveyed por-
tion constitute a separate appropriate unit and comprise a
majority of the unit under the new operation, then the
Respondent must be found to be a successor to Monte-
fiore.12 Here, the unit is clearly appropriate. In addition,
because all of the employees in the Respondent’s clerical
unit were formerly employed by Montefiore, we find
continuity in the workforce. Accordingly, we conclude
that the Respondent is a successor employer with the
attendant obligation to recognize and bargain with the
Union. See M.S. Management, supra.
The Court in Fall River also approved of the Board’s
“continuing demand” rule that provides that a Union’s
premature demand for bargaining, although rejected by
the employer, continues in effect until the successor ac-
quires a “substantial and representative complement” of
employees.
On June 9, 1993, the Union made a proper demand for
bargaining to the Respondent. The Respondent declined
to bargain with the Union, stating that it is a separate
entity from Montefiore with no relationship with the Un-
ion, and therefore, had no obligation to bargain or as-
sume the terms of the collective-bargaining agreement
between Montefiore and the Union. The Respondent
added that until the Union petitioned to represent its em-
ployees and was duly elected by the employees as their
collective-bargaining representative, the Respondent
would not recognize or bargain with the Union.
We find that the Union’s June 9 demand, although not
repeated after July 1, 1993, operated as a continuing de-
mand to represent and bargain collectively with the Re-
spondent for the unit employees. Therefore, we find that
the Respondent’s refusal to recognize and bargain with
the Union on and after July 1, 1993, violated Section
8(a)(5) and (1) of the Act.
On July 6, after the Respondent began functioning as
an independent employer, Bluestone circulated a memo-
randum outlining to the employees the leave policy the
Respondent planned to implement. This leave policy
was developed without the Respondent first bargaining
with the Union. The content of the July 6 memo to em-
ployees shows that this was the Respondent’s first an-
nouncement of these terms. We find that the Respon-
dent, by making unilateral changes in the terms and con-
ditions of employment for the unit employees at a time
when it was obligated to bargain with the Union, violated
Section 8(a)(5) and (1) of the Act.
12Stewart Granite Enterprises, supra.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 814
AMENDED CONCLUSIONS OF LAW
1. The Respondent, The Bronx Health Plan, is an em-
ployer engaged in commerce within the meaning of Sec-
tion 2(2), (6), and (7) of the Act.
2. The Union is a labor organization within the mean-
ing of Section 2(5) of the Act.
3. The following employees constitute a unit appropri-
ate for collective bargaining within the meaning of Sec-
tion 9(b) of the Act:

All employees employed by The Bronx Health Plan,
excluding guards and supervisors as defined in the Act.

4. The Respondent, The Bronx Health Plan, is a suc-
cessor employer of Montefiore Medical Center.
5. The Respondent has refused, since July 1, 1993, to
recognize and bargain with the Union as the exclusive
collective-bargaining representative for its unit employ-
ees.
6. The Respondent unilaterally changed the terms and
conditions of employment for the unit employees without
notice to the Union and without providing an opportunity
for the Union to bargain over the changes.
7. By the acts and conduct described above, the Re-
spondent has engaged in unfair labor practices within the
meaning of Section 8(a)(5) and (1) of the Act which have
affected commerce within the meaning of Section 2(6)
and (7) of the Act.
REMEDY
Having found that the Respondent has violated Section
8(a)(5) and (1) of the Act by refusing to recognize and
bargain with the Union, and by unilaterally changing the
terms and conditions of employment for its employees,
we shall order it to cease and desist and take certain af-
firmative action necessary to effectuate the policies of
the Act. We shall order the Respondent to recognize
and, on request, bargain with the Union as the collective-
bargaining representative of the unit employees, and if an
agreement is reached, reduce the agreement to a written
contract. In addition, the Respondent must rescind, on
request by the Union, any departures from the terms and
conditions of employment, including rates of pay and
benefits unilaterally effected, and must make the em-
ployees whole for any loss of earnings attributable to its
unlawful conduct. Backpay shall be computed in accor-
dance with Ogle Protection Service, 183 NLRB 682
(1970), enfd. 444 F.2d 502 (6th Cir. 1971), with interest
as prescribed in New Horizons for the Retarded, 283
NLRB 1173 (1987).
ORDER
The National Labor Relations Board orders that the
Respondent, The Bronx Health Plan, Bronx, New York,
its officers, agents, successors, and assigns, shall
1. Cease and desist from
(a) Refusing to recognize and bargain collectively in
good faith with 1199, National Health and Human Ser-
vice Employees Union, as the exclusive collective-
bargaining representative for the unit employees in the
following appropriate unit:

All employees employed by The Bronx Health Plan,
excluding guards and supervisors as defined in the Act.

(b) Unilaterally changing the terms and conditions of
the unit employees’ employment without first bargaining
to impasse with the Union with respect to the terms and
conditions that it implemented.
(c) In any like or related manner interfering with, re-
straining, or coercing employees in the exercise of the
rights guaranteed them by Section 7 of the Act.
2. Take the following affirmative action necessary to
effectuate the policies of the Act.
(a) Recognize and on request, bargain collectively and
in good faith with the Union as the exclusive representa-
tive of the employees in the appropriate unit concerning
terms and conditions of employment and, if an agree-
ment is reached, embody it in a signed contract.
(b) Upon request, rescind all unilateral changes in the
terms and conditions of employment.
(c) Restore, to the extent requested by the Union, all
terms and conditions of employment that were in effect
as of July 1, 1993, before the unilateral changes were
made.
(d) Make whole any employees who may have been
detrimentally affected by the changes in terms and condi-
tions of employment, with interest on any monetary
losses the employees may have suffered, in the manner
set forth in the remedy section of this decision.
(e) Preserve and, within 14 days of a request, make
available to the Board or its agents for examination and
copying, all payroll records, social security payment re-
cords, timecards, personnel records and reports, and all
other records necessary to analyze the amount of back-
pay due under the terms of this Order.
(f) Within 14 days after service by the Region, post at
its facility in the Bronx, New York, copies of the at-
tached notice marked “Appendix.”13 Copies of the no-
tice, on forms provided by the Regional Director for Re-
gion 2, after being signed by the Respondent’s author-
ized 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. Reasonable steps shall be taken
by the Respondent to ensure that the notices are not al-
tered, defaced, or covered by any other material. In the
event that, during the pendency of these proceedings, the

13 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 Na-
tional Labor Relations Board” shall read “Posted Pursuant to a Judg-
ment of the United States Court of Appeals Enforcing an Order of the
National Labor Relations Board.”
BRONX HEALTH PLAN 815
Respondent has gone out of business or closed the facil-
ity involved in these proceedings, the Respondent shall
duplicate and mail, at its own expense, a copy of the no-
tice to all current employees and former employees em-
ployed by the Respondent at any time since July 1, 1993.
(g) Within 21 days after service by the Region, file
with the Regional Director a sworn certification of a re-
sponsible official on a form provided by the Region at-
testing to the steps that the Respondent has taken to
comply.

MEMBER HURTGEN, dissenting in part.
I agree with my colleagues that the Respondent, The
Bronx Health Plan, is not a joint employer with Monte-
fiore Hospital. Accordingly, the Respondent is not bound
to the terms of the union contract covering that hospital.
Contrary to the majority, however, I agree with the judge
that the Respondent is also not a Burns1 successor to
Montefiore. Thus, the Respondent is not required to rec-
ognize and bargain with the Union. Accordingly, I
would dismiss the complaint alleging that the Respon-
dent violated Section 8(a)(5) and (1) by refusing to rec-
ognize and bargain with the Union, and by making uni-
lateral changes.
Under the “sucessorship” doctrine, an employer that
takes over the operations and employees of a predecessor
employer is required to recognize and bargain with the
union representing the predecessor’s employees only
where: (1) there is a substantial continuity between the
predecessor’s and the employer’s operations; and (2) a
majority of the new employer’s employees, in an appro-
priate unit, consist of the predecessor’s employees.
Burns, supra; Fall River Dyeing Corp. v. NLRB, 482 U.S.
27 (1987). In determining whether successorship has
been established, the key inquiry is whether, as a result
of transitional changes between the predecessor and the
new employer, it reasonably may be presumed that the
employees of the new employer desire the same union
representation. See, e.g., Mondovi Foods, 235 NLRB
1080, 1082 (1978). Under this analysis, I agree with the
judge that the Respondent is not a Burns successor.
The judge found that the Respondent was not Monte-
fiore’s successor because he found no substantial conti-
nuity in the employing entity. In this regard, the judge
found that the 16 employees whom the Respondent
hired, “constitute[d] a tiny fraction (.05 percent) of the
[Montefiore] bargaining unit,” and were scattered among
a few of the hundreds of job classifications encompassed
in the Montefiore unit. Given the extreme diminution of
the Respondent’s unit, and the fact that it was function-
ally distinct and “not a miniature version of the Monte-
fiore bargaining unit,” the judge concluded that it could
not “fairly be presumed that the Union had a continuing
majority status amongst this small group of people.” In
reaching this conclusion, the judge relied on Nova Ser-

1 NLRB v. Burns Security Services, 406 U.S. 272 (1972).
vices Co., 213 NLRB 95 (1974), and Atlantic Technical
Services Corp., 202 NLRB 169 (1973), enfd. 498 F.2d
580 (D.C. Cir. 1974), where the Board and court found
that successorship had not been established because of
the lack of continuity in the employing enterprise.
I agree with the judge. Thus, even assuming, ar-
guendo, that the clerical employees hired by the Respon-
dent constitute a separate appropriate unit,2 I find that
successorship fails because there is no “substantial conti-
nuity” in the employing enterprise.
In approximately 1989, the Respondent instituted a
health maintenance organization (HMO) to contract with
health care suppliers (hospitals and health care centers)
to provide medical services to enrolled Medicaid recipi-
ents at fixed rates. It entered into an agreement with
Montefiore whereby Montefiore would employ clerical
staff to be used with respect to the Respondent’s HMO
operation for a fixed term, not to exceed 5 years. After
this period, the Respondent would staff the operation
with its own workforce. Pursuant to this arrangement,
Montefiore provided staff and management for the HMO
unit until June 30, 1993. As found by the judge, based
on Montefiore’s control over the essential terms and
conditions of employment of the clericals assigned to the
Respondent’s HMO, Montefiore remained their sole em-
ployer during this period. They were part of a Monte-
fiore unit consisting of 3500 employees. At issue is
whether the Respondent became a successor employer on
July 1 when it began operating the HMO with its own
employee complement. I find that it did not.
Initially, I note that there is a significant disparity both
in the size and functions of Montefiore and the Respon-
dent. Montefiore, a full-purpose hospital, has a collec-
tive-bargaining agreement with the Union covering a unit
of 3500 employees. These unit employees are divided
among hundreds of job classifications—running the
gamut from pot washers to pharmacists—and they share
the common purpose of providing health care and ancil-
lary support services to Montefiore patients.
Conversely, the Respondent provides services that are
significantly smaller and very different from those of the
hospitalwide Montefiore unit. In addition, the Respon-
dent’s HMO operation is one that Montefiore Hospital
traditionally has not provided (except for staffing it from
1989–1993), and its client base is not confined to Monte-
fiore.
As noted, supra, if the new employer is engaged in a
business different from that of the predecessor employer,
that fact militates strongly against a finding of successor-
ship. My colleagues concede, as they must, “that the
Respondent was designed to engage in a completely
separate business activity” from that of Montefiore.
2 The judge did not reach the issue of whether the Respondent’s
clerical unit was appropriate. I also do not resolve that issue. However,
I note that the Respondent’s workforce is not limited to clerical person-
nel, but also includes a sales staff that did not exist under Montefiore.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 816
Thus, this factor in this case militates strongly against a
finding of successorship.
Concededly, Montefiore was the employer of the cleri-
cal employees for the 4-year period prior to the Respon-
dent’s takeover. However, as noted above, the 17 cleri-
cal employees were only a small part of a Montefiore
unit consisting of 3500 employees. Further, the Monte-
fiore-Respondent agreement did not specify that the em-
ployees had to come from the Montefiore bargaining
unit, and it did not specify any terms and conditions un-
der which they would be employed.
During the period when Montefiore was the employer
of the clerical employees, they were covered by the terms
of the Union-Montefiore collective-bargaining agree-
ment. As noted, they were part of a large and diverse
unit. They are now in a small unit consisting only of
themselves.
In these circumstances, I agree with the judge that it
can not reasonably be presumed that, simply because the
Respondent hired 16 of the 17 clerical employees that
Montefiore previously had employed, those employees
continue to desire the same Union representation.
My position finds ample support in Nova Services, su-
pra, and Atlantic Technical Services Corp., supra. Here,
as in Nova, the Respondent hired only a few predecessor
employees to perform work which constituted only a
small portion of the work that the predecessor had per-
formed. As in Nova, this is “too fragmentary a basis
upon which to predicate a finding of legal successor-
ship.” 213 NLRB at 97.3
Similarly, as in Atlantic Technical, the Respondent
took over only a small segment of the predecessor unit,
and that segment was functionally distinct from other
classifications in the predecessor unit. Under these facts,
as in Atlantic Technical,” the “size and organizational
structure of the employer succeeding to the smaller unit
[was] in a number of respects materially different,” and
this difference was a “sufficiently substantial change in
the employing industry to defeat any finding of succes-
sorship.” 202 NLRB at 170.
My colleagues seek to distinguish Atlantic Technical
on the basis that the mail sorting and distribution em-
ployees in that case were originally accreted into the
predecessor’s unit. In my colleagues’ view, this was a
primary reason for the conclusion that the new employer
(who took over the mail sorting and distribution opera-
tion) was not a successor. However, I think it clear that
the Board’s overall emphasis is not on how the employ-
ees originally came to be in the predecessor’s unit, but
rather whether there has been a significant change from
the predecessor unit to the new employer’s unit.

3 Indeed, I view this case as providing an even stronger argument
against successorship than Nova, where both the predecessor and al-
leged successor performed the same janitorial-type work.
The majority also seeks to differentiate Atlantic Tech-
nical on the basis that there the predecessor employer
was subject to the Railway Labor Act (RLA) and had
contracts throughout the country. Although these are,
assuredly, factual distinctions, I do not find them deter-
minative. As to the first point, it is well settled that the
fact that a predecessor was governed by the RLA is im-
material for successorship purposes. The key is whether
the Board has jurisdiction over the alleged successor.
See, e.g., Boeing Co., 214 NLRB 541, 559 (1974). Sec-
ond, although the predecessor in Atlantic Technical was
a nation-wide company, and had other contracts, the
more relevant facts were that: (1) the predecessor insti-
tuted the small, discrete mail distribution operation at a
single facility where approximately 1100 union-
represented mechanics and related employees were em-
ployed; (2) the alleged successor was created solely to
perform the mail distribution function; and (3) the prede-
cessor’s employees whom the successor hired constituted
less than 4 percent of the union-represented employees at
that facility. Here, too, the Respondent was created
solely to perform a limited function—which was not en-
compassed by the historic Montefiore bargaining unit—
and its workforce comprised only a small fraction of the
diverse Montefiore unit.4
The majority argues that successorship is established
because the 16 Montefiore employees hired by the Re-
spondent for HMO work had been isolated from other
unit employees under Montefiore. According to my col-
leagues, this demonstrates that the sentiments of the 16
employees regarding union representation would remain
unchanged. In my view, this misses the mark. For pur-
poses of assessing whether a successorship obligation
exists, one compares the unit before and after the trans-
fer, in order to determine whether the unit has changed.
Here, we compare a multithousand, multiclassification
unit with a small HMO support group. Further, as with
the mail distribution work in Atlantic Technical, the
HMO work which the 17 Montefiore employees per-
formed prior to July 1993 was not traditional unit work.
The majority also argues that Mondovi, supra, supports
its position because there—when resolving the succes-
sorship issue—the Board considered such factors as
whether there had been changes in the product, market,
and location of production. Applying these factors to
this case, my colleagues argue that successorship must
be found. I disagree. Clearly, the principal business of
Montefiore is different from the principal business of the
4 In at least one respect Atlantic Technical appears to present a more
compelling case for successorship than the instant case. In Atlantic
Technical, the mail and distribution function acquired by the alleged
successor continued, under the new employer, to provide direct support
services, in the same location, for part of the bargaining unit. Here,
conversely, the HMO services provided by the Respondent were lo-
cated in a facility separate from the Montefiore Hospital, and were
geared to a client base wholly distinct from that hospital.
BRONX HEALTH PLAN 817
Respondent. Further, the factors cited in Mondovi are
among the many considerations relevant to the succes-
sorship issue. They are, however, neither exhaustive nor
determinative. Rather, in this highly fact-intensive area
of the law, all relevant facts must be considered in de-
termining whether it reasonably may be presumed that
employees of the new employer desire to continue the
prior representation. Based on all the relevant factors, I
find that successorship was not established.
The majority also cites Mondovi for the proposition
that “a change in scale in operation” will ordinarily not
preclude a finding of successorship. However, the in-
stant case does not involve a mere “change in scale of
operations.” Rather, the nature of the enterprise has
changed and so too the complete character of the unit has
changed. This is not a situation where a large homoge-
neous unit simply changed to a smaller homogeneous
unit. Instead, of the thousands of Montefiore employees,
spanning hundreds of categories of hospital health care
and related support services, the Respondent hired only
16 unit employees, and those 16 perform a function dis-
tinct from that which the Montefiore unit traditionally
has provided. Phrased differently, the unit has not sim-
ply grown smaller; it has fragmented.5
My colleagues assert that “there had been no material
change in [the] job situations” of the employees involved
herein. The question, however, is whether there has been
a change in their union representation situation. Where,
as here, a relative handful of employees in a very large
unit become a small unit unto themselves and become
employed by a employer with a very different business
purpose, I would not presume that they continue to desire
union representation.
In sum, I rely on the facts that the character of the unit
has changed, the size of the unit has changed, and the
nature of the employer has changed. More particularly, I
note that:

1. Under Montefiore, the unit was a diverse one,
with hundreds of classifications. Under the Respon-
dent the unit is restricted to the narrow clerical cate-
gory.
2. Under Montefiore, the unit had 3500 employ-
ees. Under the Respondent the unit has 16 employ-
ees.
3. The business of Montefiore was operating a
large, complex hospital. The business of the Re-

5 As noted, supra, in Nova, the predecessor’s unit consisted of a ho-
mogeneous unit of employees (janitors) and the new employer’s unit
consisted of a smaller unit of janitors. The Board held that the new
employer was not a successor. In the instant case, the predecessor’s
unit consisted of hundreds of categories of patient care and support
positions, all related to services provided for patients at the Montefiore
Hospital. The new unit, conversely, provides distinct HMO services to
s different client base. In my view, if there is no successorship in a
case where a homogeneous unit remains homogeneous, a fortiori there
is no successorship where a multiclassification unit is fragmented into a
distinct, single-classification unit.
spondent is offering distinct HMO services to a dif-
ferent client base.

Accordingly, for all of these reasons, as well as those
cited by the judge, I find that the Respondent was not a
successor to Montefiore. Thus, I would let these em-
ployees decide for themselves whether they want union
representation. I would dismiss the complaint.

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 vio-
lated the National Labor Relations Act and has ordered us to
post and abide by this notice.

Section 7 of the Act gives employees these rights.

To organize
To form, join, or assist any union
To bargain collectively through representatives
of their own choice
To act together for other mutual aid or protection
To choose not to engage in any of these protected
concerted activities.

WE WILL NOT refuse to recognize and bargain collec-
tively in good faith with 1199, National Health and Hu-
man Service Employees Union, as the exclusive collec-
tive-bargaining representative of our employees in the
following appropriate unit:
All employees employed by The Bronx Health Plan,
excluding guards and supervisors as defined in the Act.

WE WILL NOT unilaterally change your terms and con-
ditions of employment without first bargaining to im-
passe with the Union with respect to the terms and condi-
tions that we implemented.
WE WILL NOT in any like or related manner interfere
with, restrain, or coerce you in the exercise of the rights
guaranteed you by Section 7 of the Act.
WE WILL recognize and on request, bargain with the
Union as the exclusive representative of the unit employ-
ees concerning terms and conditions of employment and,
if an agreement is reached, embody the agreement in a
signed contract.
WE WILL, on request, rescind all unilateral changes,
and restore, to the extent requested by the Union, all
terms and conditions of employment that were in effect
as of July 1, 1993, before the unilateral changes were
made.
WE WILL make any employees whole who have been
detrimentally affected by the changes in terms and condi-

DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 818
tions of employment, with interest on any monetary losses
the employees may have suffered.

THE BRONX HEALTH PLAN

Terry A. Morgan Esq., for the General Counsel.
Don Carmody, Esq. (Carmody & Collazo), for the Respondent.
Gwynne A. Wilcox Esq. (Levy, Pollack & Ratner), for the
Charging Party.
DECISION
STATEMENT OF THE CASE
RAYMOND P. GREEN, Administrative Law Judge. This case
was tried in New York, New York, on October 31, and No-
vember 1 and 2, 1994. The charge was filed on November 23,
1993, and the complaint was issued on March 30, 1994. In
substance, the complaint alleges:
1. That from March 27, 1989, until June 30, 1993, The
Bronx Health Plan (TBHP), a not-for-profit corporation, and
Montefiore Hospital were parties to a management services
agreement pursuant to which Montefiore provided planning,
development, and management services for the Respondent. It
is alleged that this contract provided, among other things, that
Montefiore would be responsible for the hiring and supervision
of all personnel required for the conduct of TBHP’s activities.
2. That Montefiore has maintained a collective-bargaining
relationship with the Union in a unit consisting of all service
and maintenance employees, clerical employees, licensed prac-
tical nurses, technical employees, social workers, social work
supervisors, pharmacists, dietitians, and occupational and
speech therapists employed by Montefiore, excluding supervi-
sory, confidential, executive and managerial employees, physi-
cians, dentists, registered nurses, students (interns), part-time
employees who work less than one-fifth time and temporary
employees.
3. That the most recent contract between Montefiore and the
Union runs from July 1, 1992, through June 30, 1995.
4. That the clerical employees of Montefiore who were as-
signed to TBHP were covered by the aforesaid contract and that
Montefiore and the TBHP were joint employers insofar as such
employees.
5. That on March 27, 1993, TBHP terminated the manage-
ment agreement with Montefiore.
6. That since June 30, 1993, TBHP hired the people previ-
ously employed by Montefiore and became the “successor’’ to
Montefiore for a unit to consist of all TBHP employees, exclud-
ing guards and supervisors. (Unlike the bargaining unit at Mon-
tefiore which contains all kinds of health care workers, the
alleged unit here is one containing only clerical workers.)
7. That since June 9, 1993, TBHP has refused to recognize
and bargain with the Union.
8. That since June 1, 1993, TBHP has unilaterally refused to
apply the contract terms and conditions that had been in effect
per the contract between the Union and Montefiore.
On the entire record, including my observation of the de-
meanor of the witnesses, and after considering the briefs filed, I
make the following
FINDINGS OF FACT
I. JURISDICTION
The Respondent is a New York not-for-profit corporation
which, as more fully described below, provides medical insur-
ance services for indigent people. Annually, it has gross reve-
nues in excess of $1 million and purchases goods and services
valued in excess of $50,000, directly from firms located outside
the State of New York. Based on the Board’s retail standards,
which are applicable to insurance companies, I find that it the
Respondent is an employer engaged in commerce within the
meaning of Section 2(2), (6), and (7) of the Act. Insurance
Workers Local 60 (John Hancock), 236 NLRB 440 (1978). I
also find that the Union is a labor organization within the mean-
ing of Section 2(5) of the Act.
II. ALLEGED UNFAIR LABOR PRACTICES
For many years, the Union has been the collective-
bargaining representative of several thousand employees of
Montefiore Hospital. The most recent contract between that
employer and the Union runs for a term from July 1, 1992, to
June 30, 1995. In major part, this contract was negotiated
through an association called the League of Voluntary Hospi-
tals and Homes of New York (the Association), although nego-
tiations over local issues were conducted between the Union
and individual employers. Notwithstanding Montefiore’s mem-
bership in the Association, it appears that the intent of the Un-
ion and the employer members of the Association was that each
Hospital was to comprise a separate collective-bargaining unit.
In essence, the Montefiore bargaining unit consisted of about
3500 employees in nine major categories and further broken
down into several hundred separate job classifications. (See
G.C. Exh. 3, which establishes the pay rates for a multitude of
job classifications from, for example, service employees such
as pot washers and cooks, to medical support personnel such as
licensed practical nurses, social workers, and pharmacists.)
In the mid-1980s, a private foundation in conjunction with
some people at Montefiore conceived of the idea of establishing
a not-for-profit health insurance company that would provide
an alternative mechanism for providing health insurance to
poor people who, in the main, were on welfare and covered by
Medicaid. Pursuant to a grant by the foundation to Montefiore,
the latter hired a small group of people headed up by Maura
Bluestone who was put into Montefiore’s office of planning.
On February 7, 1986, the Bronx Health Plan (TBHP), was
incorporated and its initial board of directors consisted of five
officers of community health care providers.1 During this year,

1 These were Stanley E. Harris, MD., of the Montefiore Comprehen-
sive Health Care Center; Robert Massad, MD., of the Montefiore Fam-
ily Health Center; Verona Greenland, of the Morris Heights Health
Center; Angel Quinones, of the Morrisania Neighborhood Family Care
Center; and Gloria Perry, of the Dr. Martin Luther King Jr., Health
Center. The Certificate of Incorporation was signed by Maura Blue-
stone and Henie Lustgarten, both listed as part of Montefiore’s office of
planning. In a certain sense, I suppose one could say that TBHP was
conceived of and created as the brainchild of Montefiore, inasmuch as
Bluestone did much of the work and was employed during the time as
part of Montefiore’s planning staff. On the other hand, it is obvious to
me that TBHP was created as a completely separate corporation de-
signed to engage in a completely separate business activity from Mon-
tefiore (selling medical insurance as opposed to providing medical
services). Although a couple of TBHP’s Board members have been
affiliated with Montefiore, a majority of its Board members have not.
BRONX HEALTH PLAN 819
TBHP obtained the necessary licenses to do business from the
State of New York and negotiated a contract with the city of
New York to provide its prospective clients with health insur-
ance coverage in lieu of Medicaid. It also acquired a location
on Fordham Road in the Bronx and entered into contracts with
hospitals (including Montefiore), and other community health
centers to provide medical services for its clients. In this re-
spect, the difference is that under Medicaid, medical providers
are paid for specific individual services (essentially fee for
service), whereas under the alternative, TBHP would contract
with providers for a specified fee per enrollee, irrespective of
the particular services performed. That is, TBHP was to be a
health maintenance organization (HMO), which, with the mon-
eys provided by the State to each enrolled person, would con-
tract with hospitals, doctors, etc., to provide medical services
on a fixed rate per person. To make ends meet, the problem for
TBHP was to negotiate cost-effective deals with providers in
consideration for which the providers would have a group of
potential patients who would be required to use the contracted
for services (i.e., the clients could only choose medical provid-
ers who contracted with TBHP).
In February 1987, 1 year later, TBHP opened its doors for
business and started to solicit and accept applicants. In what, at
least to me, was an unusual arrangement, TBHP commenced
operations with no employees of its own. That is, an arrange-
ment was made so that Montefiore provided all of the manage-
rial and other staff for TBHP (mostly clerical workers). Maura
Bluestone, who had been the person most instrumental in set-
ting up TBHP, then became the person responsible for its over-
all operations while still an employee of Montefiore. This ar-
rangement was memorialized in a contract between the board of
directors of TBHP and Montefiore dated March 27, 1989. Thus,
in consideration of a specified fee, Montefiore contracted with
TBHP to provide all employees, including managerial employ-
ees, to do all of the work required by TBHP. By the terms of
the contract, this arrangement was to be of a limited duration as
TBHP intended to convert itself, no later than 5 years’ hence,
into a regular employer, having regular employees. To get
ahead of the story, this occurred in July 1993, when the em-
ployees of Montefiore working at TBHP were laid off by the
former and hired by the latter.
The contract between TBHP and Montefiore contained the
following provisions which are cited by the General Counsel as
being relevant to this case:

Subject to the direction of TBHP Board of Directors . . . Mon-
tefiore will be responsible for the following areas: . . . i. Hir-
ing and supervision of all personnel required for the conduct
of the foregoing activities and for the supervision of any du-
ties which Montefiore may elect to subcontract out and the se-
lection and supervision of all subcontractors;
. . . .

All actions delegated to Montefiore in paragraph two (2) and
by any other means or agreement remain the responsibility of
the Board of Directors of TBHP. The TBHP Board of Direc-
tors will retain authority to approve, revise or reject all actions
of Montefiore taken on behalf of TBHP including, but not
limited to the following: a. The form and content of this
agreement (any renewals, extensions or modifications
thereof);
. . . .

TBHP agrees that it will at all times cooperate to the fullest
extent possible with Montefiore in providing whatever assis-
tance or information is required for Montefiore to fulfill its
duties and responsibilities under paragraph 2 of this agree-
ment.

Notwithstanding the contract’s reservation of control with
TBHP’s board of directors, the fact remains that during the life
of the agreement, Bluestone made all of the operating deci-
sions, did the hiring and firing in conjunction with the person-
nel department of Montefiore, and prepared the annual budget
which was reviewed and approved by the board of directors.
Insofar, as the day-to-day operations of the entity, the TBHP
board of directors, was not involved.
In addition to Bluestone, there was a group of clerical em-
ployees who, although employees of Montefiore, were assigned
pursuant to the aforementioned contract, to work at TBHP.
These people were covered by and paid in accordance with the
collective-bargaining agreement between Montefiore and the
Union. When new employees were required at TBHP, Blue-
stone made requisitions to Montefiore’s personnel department
and that department hired or transferred employees to TBHP
operations as needed.
Despite the fact that the employees working at TBHP were
all employees of Montefiore, there was no interchange between
them and the other represented employees of the hospital.
Moreover, as pointed out by the General Counsel, all personnel
or labor relations issues affecting this group of employees was
handled by Montefiore supervisors or managers. None of the
Board members of TBHP had any dealings with the Union vis-
a-vis these employees,.
As of mid-1993, there were about 17 Montefiore clerical
employees assigned to work at TBHP, all of whom worked in
clerical classifications such as secretary, accounts clerks, key
punch operators, etc. This comprised less than .05 percent of
the Montefiore bargaining unit employees and a minuscule
percentage of the job classifications covered by the labor
agreement.
On March 27, 1993, TBHP by Dr. Robert Massad, its board
president, notified Montefiore that it was going to terminate the
contract as of June 30, 1993.
On May 26, 1993, Steven J. Delehanty, Montefiore’s direc-
tor of employee relations, notified the employees assigned to
TBHP that their employment would be terminated with sever-
ance pay as of June 30, 1994. Maura Bluestone, who became
the president and CEO of TBHP, notified the employees that
they could submit job applications for consideration as TBHP
employees and most of the employees assigned to this location
did so and were hired.
On June 9, 1993, Union Vice President Nelson Valdez met
with Bluestone and stated that he wanted to discuss the collec-
tive-bargaining agreement. He asserted the Union’s position
that the Union would continue to be the representative of the
employees after the transition and that the collective-bargaining
agreement should continue in force and effect. Bluestone re-
sponded that TBHP was a separate entity having no collective-
bargaining relationship with the Union and therefore had no
obligation to assume the labor agreement. The Respondent’s
position is that until and unless the Union wins an election to
represent these employees, TBHP will not recognize and bar-
gain with the Union.
On July 1, 1993, TBHP began operating with its own staff of
managerial, supervisory sales, and clerical employees. All
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 820
agree that this transition did not involve the sale or transfer of
any physical or other assets. Nor did it involve the transfer of
stock or any other kinds of ownership interest. Of the 17 cleri-
cal employees working at TBHP immediately prior to July 1,
1993, 16 were hired by TBHP to perform similar clerical func-
tions on or shortly after July 1, 1993. Although TBHP’s em-
ployee staff has expanded subsequently, it seems to me that the
complement of employees hired by TBHP in early July 1993
constituted a representative complement.2
III. ANALYSIS
A. The Joint Employer Issue
The General Counsel and the Charging Party assert that prior
to July 1, 1993, TBHP and Montefiore were joint employers
vis-a-vis the employees that Montefiore provided to TBHP and
who performed the work required of that company. They argue
that if the two entities were joint employers, then the contract
which Montefiore maintained with the Union on behalf of this
set of employees, was binding on TBHP and therefore that
when TBHP severed its relationship with Montefiore and hired
the employees as its own, it was bound to the existing collec-
tive-bargaining agreement between the Union and Montefiore.
Thus the General Counsel cites D & S Leasing, 299 NLRB 658
(1990), where the Board, after finding that the subject corpora-
tions were joint employers, held that where company A termi-
nated its subcontract with company B (whose employees were
represented by a union), company A violated Section 8(a)(5) by
failing to give notice to the union of its decision to terminate
the subcontract. Among other things, company A was ordered
not only to bargain with the union that represented company
B’s employees, but to honor the collective-bargaining agree-
ment that existed between company B and the union.
In D & S Leasing, supra, the facts showed that although
company B supplied the personnel to company A, the day-to-
day supervision of this work force was directed and controlled
by the management of company A. Thus, supervisors of com-
pany A gave out the work schedules, determined working
hours, approved requests for time off, assigned men to train
newly hired employees, and approved the hiring of company
B’s employees assigned to work at the premises of company A.
The issue here is whether, in the circumstances described,
two separate corporate entities (TBHP and Montefiore), were
joint employers vis-a-vis the employees that Montefiore pro-
vided to TBHP and who were represented by Local 1199. I
don’t think that they were.
In Chesapeake Foods, 287 NLRB 404, 407 (1987), the ad-
ministrative law judge found that Chesapeake, a chicken proc-
essing plant, was the joint employer with an individual who
employed teams of people who bought chickens at farms and
brought them to the plant. The Board reversed the judge who
used a “right of control test’’ and stated:

As noted earlier, we disagree with the judge’s finding
on the joint employer issue. In this regard, we initially

2As of October 28, 1994, TBHP employed about 35 clerical employ-
ees who, for the most part, did functions similar to those that they did
when the operation was contracted out to Montefiore. Thus, the clerical
staff, which was the group of employees covered by the Local 1199
contract, had just about doubled since the transition on July 1, 1993. In
addition, the Respondent hired other employees, the largest category
being a group of about 27 people who are classified as marketing repre-
sentatives and who function essentially as insurance salesmen.
note that the judge applied an incorrect test for determin-
ing the Respondent’s alleged joint employer status. Con-
trary to the judge, the appropriate test for ascertaining joint
employer status in whether two separate entities share or
codetermine “those matters governing the essential terms
and conditions of employment’’ and to establish such
status “there must be a showing that the [alleged joint]
employer meaningfully affects matters relating to the em-
ployment relationship such as hiring, firing, discipline, su-
pervision and direction. . . .’’ [Footnotes omitted.]
We note first that the catchers’ essential terms and
conditions of employment were dictated by the collective-
bargaining agreement that was negotiated by Dennis with
the Union. The Respondent neither negotiated nor conego-
tiated this agreement. . . .
Further, we find the evidence insufficient to establish
that the Respondent meaningfully affected other matters
relating to the catchers’ employment relationship such as
hiring, firing, discipline, supervision and direction. It was
Dennis who hired, fired, paid the catchers, and supplied
them with necessary raingear. Farmers’ complaints re-
ceived by the Respondent about the catchers were referred
to Dennis for handling and it was Dennis, not the Respon-
dent, who directly fired the catcher suspected of stealing.
Finally, the Respondent’s scheduling of the farms to be
worked and its instructing the catchers in certain mechan-
ics of catching and the number of chickens to be placed in
the coops cannot be found to constitute significant control
over Dennis’ employees. . . .

In Teamsters Local 776 (Pennsy Supply), 313 NLRB 1148,
1162 (1994), a labor organization was accused of engaging in
illegal secondary picketing prohibited by Section 8(b)(4)(i) and
(ii)(B) of the Act. In that case, the union, which was involved in
a primary dispute against a company called Drivers, Inc., pick-
eted various sites where Pennsy Supply was engaged in supply-
ing concrete. In its defense, the union made the argument that
Pennsy Supply and Drivers Inc., were joint employers inas-
much as Drivers Inc., provided most of the truckdrivers who
were used by Pennsy. Without going into a detailed description
of the facts, the admininstrative law judge concluded that:

Evidence of minimal and routine supervision of em-
ployees, limited dispute resolution authority, and the rou-
tine nature of work assignments has been held insufficient
to establish a “joint employer’’ relationship. . . .
On the other hand, evidence of substantial control over
hiring, promotion, and the base wage rates, hours and
working conditions of employees, coupled with evidence
of close and substantial supervision of employees, and
constant presence of supervisors with a detailed awareness
and control of employees’ daily activities, has been held
by the Board to be sufficient to establish a “joint em-
ployer’’ relationship. Quantum Resources Corp., 305
NLRB 759 (1991). The Board found a “joint employer’’
relationship in another recent case, Continental Winding
Co., 305 NLRB 122, 123 (1991), where even though one
employer alone hired employees supplied to another and
set and paid their wages, the record supported the judge’s
finding that the other employer to which the employees
were supplied exercised sole authority to assign, schedule,
and supervise the workplace conditions, and the perform-
ance of work by the employees. There, the Board said, the
BRONX HEALTH PLAN 821
supervision was more than “routine’’ and was not “insig-
nificant.’’

In the present case, TBHP from the commencement of its
operations until July 1, 1993, essentially operated without any
employees of its own as its board of directors made a contract
with Montefiore to provide both the managerial/ supervisory
staff and the regular employees who were to carry out the cleri-
cal functions to operate this new business. The employees who
were assigned to work at TBHP were hired by Montefiore and
their wages and other terms and conditions of employment
were set by the collective-bargaining agreement negotiated by
Montefiore and the Union. (No one from TBHP was invited to
participate in those negotiations and it is unimaginable that they
would have been.) The supervision of these employees was
carried out by Bluestone and other supervisors who, prior to
July 1, 1993, were employed by Montefiore. All hiring was
done by the Montefiore’s personnel department and the settle-
ment of grievances was done there. Although the management
contract between TBHP and Montefiore gave the former a theo-
retical right to approve or reject Montefiore decisions, there is
no evidence that this “right’’ was ever exercised.
B. The Successor Issue
Alternatively, the General Counsel and the Charging Party
contend that TBHP is a successor to Montefiore in relation to
the group of employees hired by TBHP. Arguing from the
premise that TBHP is a successor, they contend that TBHP had
an obligation to recognize and bargain with the Union. The
Respondent, on the other hand, contends that TBHP is engaged
in a totally different type of business than Montefiore and that
even if it hired employees previously employed by Montefiore,
TBHP cannot be considered a successor where the new unit is
but a tiny fraction of the bargaining unit that was covered by
the contract between Montefiore and Local 1199. In Respon-
dent’s view, the most efficacious way of determining whether
its employees want to be represented by this or any other union,
is for the Board to conduct an election pursuant to the proce-
dures established in Section 9 of the Act.3
Whether or not TBHP is a successor of Montefiore, the fact
remains that absent a showing that it also was a joint employer
with Montefiore or manifested its intention to retain all of the
predecessor’s employees with the understanding that they
would be hired subject to the terms and conditions of the prede-
cessor’s existing collective-bargaining agreement, TBHP, even
if held to be a “successor,’’ would not be obligated to honor the
contract between Montefiore and Local 1199. Saks Fifth Ave-
nue v. NLRB, 634 F.2d 681 (2d Cir. 1980). Thus, in NLRB v.
Burns Security Services, 406 U.S. 272 (1972), the Court stated:

We also agree . . . that holding either the union or the
new employer bound to the substantive terms of an old
collective-bargaining contract may result in serious inequi-
ties. A potential employer may be willing to take over a
moribund business only if he can make changes in corpo-
rate structure, composition of the labor force, work loca-
tion, task assignment, and nature of supervision. Saddling
such an employer with terms . . . contained on the old . . .
contact may make these changes impossible and may dis-

3 Pursuant to Sec. 9 of the Act, a union or an employer may file a pe-
tition asking the Board to conduct an election to determine whether the
employees of a company, in an appropriate unit, wish to be represented
by a union.
courage and inhibit the transfer of capital. On the other
hand, a union may have made concessions to a small or
failing employer that it would be unwilling to make to a
large or economically successful firm . . . . [Id. at 288.]
In many cases, of course, successor employers will
find it advantageous not only to recognize and bargain
with the union but also to observe the preexisting contract
rather than to face uncertainty and turmoil. Also, in a vari-
ety of circumstances involving a merger, stock acquisition,
reorganization, or assets purchase, the Board might prop-
erly find as a matter of fact that the successor had assumed
the obligations under the old contract. . . . [Id. at 291.]

The most recent Supreme Court decision defining “succes-
sorship’’ is Fall River Dyeing Corp. v. NLRB, 482 U.S. 27
(1987). In that case, the Court held that an employer which
takes over the operations of another is required to recognize
and bargain with a union representing the predecessor’s em-
ployees when (1) there is a “substantial continuity’’ of opera-
tions after the takeover, and (2) if a majority of the new em-
ployer’s work force, in an appropriate unit, consists of the
predecessor’s employees at a time when the successor has
reached a “substantial and representative complement.’’ The
Court summarized a number of factors relevant to determining
continuity as follows, at 43:

[W]hether the business of both employers is essentially the
same; whether the employees of the new company are doing
the same jobs in the same working conditions under the same
supervisors; and whether the new entity has the same produc-
tion process, produces the same products and has basically the
same body of customers.

Moreover, as noted by the Board in Hydrolines, Inc., 305
NLRB 416, 421 (1991), the factors noted above should be as-
sessed primarily from the perspective of the employees so as to
determine if the employees retained, would view their job situa-
tions as essentially unaltered.
Both before and after the Court’s decision in Fall River Dye-
ing, supra, the Board and the Courts have grappled with cases
raising the issue of what constitutes a “substantial continuity’’
of operations. In this context, there are a number of cases in-
volving situations where a successor has taken over only a por-
tion of a predecessor’s operations.4
In Nova Services, 213 NLRB 95, 97 (1974), the Board held
that Nova did not have an obligation to bargain inasmuch as it
took over only a “small part’’ of the predecessor’s business
operations and therefore did not have “ a substantial continuity
in the employing enterprise.’’ In that case, the predecessor,
Sanitas, employed over 300 people who were covered by a
statewide union contract.5 When Sanitas’ contract to clean sev-
4 The Respondent argues that there can be no successorship in the
present case because there was neither a change in ownership from one
company to the other nor the sale and transfer of assets. This, I think is
not particularly relevant so long as there is a transition between one
entity and another where a set of employees is affectively transfered
from the control of one to another. Thus, I do not think that the method
of the transition should much matter, so long as the other criteria for
finding “successorship’’ are present. On the other hand, I think that a
transition (no matter what form it took), which resulted in a significant
change of business purpose would be relevant.
5 The administrative law judge’s decision indicates that Sanitas was
a member of a multiemployer association. It is not clear to me, how-
ever, whether the Judge concluded that the bargaining unit covered by
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 822
eral branches of a bank expired, Nova successfully bid for part
of that contract. (Another company won a contract to clean
most of the bank’s facilities.) Nova had a total of 36 employees
and used 10 to clean the bank facilities formerly cleaned by
Sanitas in Worcestor, Massachusetts. Of the 10, 8 were former
employees of Sanitas and the Union sought to represent the 10
employees assigned by Nova to clean the bank facilities for-
merly cleaned by Sanitas. The Board, while acknowledging that
a successorship can be found in situations where the new em-
ployer acquires less than a predecessor’s entire business, or
hires less than a majority of the predecessor’s work force, held
that Nova was not a successor because the unit sought was only
a very small part of the predecessor’s unit, and because a third
company had taken over the bulk of Sanitas’ work.
The Board reached the opposite conclusion in Boston-
Needham Industrial Cleaning Co., 216 NLRB 26 (1975), a case
where, like Nova, the predecessor was also Sanitas. In that case,
Boston-Needham obtained a contact from RCA to clean its
facility located in Burlington Massachusetts. Sanitas which
previously had the contract with RCA had assigned 37 full and
part time employees to this site out of its total complement of
over 300 employees. Upon taking over the contract, Boston-
Needham assigned 32 of its 175 employees to this location and
of these, 21 had previously been employed by Sanitas at the
RCA location. Noting that Boston-Needham took over the op-
eration with knowledge that Sanitas was a union employer, the
Board concluded that the location in question constituted an
appropriate single facility unit; that Boston-Needham per-
formed “substantially identical operations’’ as had been per-
formed by Sanitas and that it did so at the same location of the
same customer utilizing a majority of the former Sanitas em-
ployees who had previously worked at this location. Regarding
the fact that Boston-Needham took over only a portion of the
Sanitas unit, the Board noted, at 28:

Nor do we find here that mere diminution in unit scope
relieves the successor of his duty to bargain. Although in
other circumstances we believe that it may be a relevant
factor to be considered, among others, in determining
whether or not a new employer is a successor, such is not
the case here since we have concluded that the slight
changes instituted by Respondent are not such as to affect
employee attitudes significantly, and since no reasonable
basis has been offered for doubting the Union’s continued
majority status. . . . [Citing Zim’s Foodliner v. NLRB, 495
F.2d 1131 (7th Cir. 1974).]6

the collective-bargaining agreement comprised all of the janitorial
workers employed by the members of the Association or just the 300
people employed by Sanitas throughout Massachusetts.
6 In Zim’s Foodliner, supra at 1141, the court dealt with a situation
where a purchaser, (Zim’s), took over one store of the predecessor’s
multistore unit and argued that it was not a “successor’’ because of the
reduction in the size of the bargaining unit. The court, relying on NLRB
v. Armato, 199 F.2d 800 (7th Cir. 1952), rejected this argument finding
that the Board could treat a much-reduced bargain unit as a miniature of
the former unit. In context, it seems that the court was concluding that
if a majority of the employees in the smaller unit came from the prede-
cessor, then it would presume that the former employees in the smaller
unit would support the union to the same extent that employees would
in the larger unit. This seems to rely on the principle that the employees
in an exisiting represented unit are presumed to want union representa-
tion absent objective evidence to the contrary. Cf. Brooks v. NLRB, 348
U.S. 96 (1954), which describes some of the Board’s rules regarding
presumptions of majority representation.
In Stewart Granite Enterprises 255 NLRB 569 (1981), the
predecessor operated a quarry and a plant (which were geo-
graphically separate), where the employees of both were repre-
sented by a single union in a combined collective-bargaining
unit. The purchaser took over the factory only and, after a brief
hiatus, hired many of the predecessor’s plant employees over
the first month of operations. By the end of the month, the pur-
chaser’s complement of production and maintenance employ-
ees consisted of about 27 employees, of which 17 had previ-
ously been employed by the seller. While there were some mi-
nor changes, the basic operation of the plant remained the same
as did the job functions of the employees. As in Zim’s, the pur-
chaser argued that it was not a successor because it had taken
over only a fragment of the seller’s business. (The decision
does not indicate the number of employees in the seller’s com-
bined bargaining unit.) Finding that the changes instituted by
the buyer were insignificant, that a majority of the new com-
plement consisted of the predecessor’s employees, and that the
existing production and maintenance group was a “classically’’
appropriate bargaining unit, the administrative law judge found
that the buyer was obligated to recognize and bargain with the
Union. At footnote 20, the administrative law judge distin-
guished the case from the facts of Nova Services Co. supra, and
Atlantic Technical Services Corp., 202 NLRB 169 (1973).
A more recent case, Hydrolines, Inc., supra, also stands for
the proposition that the mere fact that the succeeding unit is
smaller than the original one, is not, of itself, sufficient to de-
feat a successorship claim. In that case, the predecessor, which
operated a ferry service, had a total complement of 26 bargain-
ing unit employees. The successor took over the operation of
several vessels and employed 13 people, of which 7 were hired
from the seller. As in Zim’s and Stewart Granite, the purchas-
ing employer was engaged in the same business as the seller
and made insubstantial changes in the manner in which it was
operated.
In Atlantic Technical Services Corp., supra, the Board found
no “successorship’’ on facts more closely paralleling the instant
case than the other cases cited above. In that case TWA (the
predecessor) had a nationwide collective-bargaining agreement
with the union covering a unit of mechanics and related classi-
fications consisting of about 14,000 employees. In 1964, TWA
received a contract to perform services at the Kennedy Space
Center (KSC), and extended its nationwide collective-
bargaining agreement to about 1100 employees that it hired to
work at the Space Center. Later that year, TWA hired an addi-
tional 41 employees to perform mail and distribution functions
at the Space Center and the collective-bargaining agreement
was also extended to them. In February 1971, Atlantic Termi-
nal, a newly formed corporation, successfully bid to perform
the mail and distribution functions at the Space Center. Without
significant change in operations, Atlantic utilized 27 of the 41
former TWA employees who had previously done this work. In
finding that Atlantic was not a successor, the Board stated at
170:

1. While we agree with the Administrative Law Judge
that the diminution in the scope of a unit “does not operate
in any relevant fashion to preclude the lesser unit from be-
ing appropriate,’’ we believe that it is a relevant factor to
be considered, among others, in determining whether or
not a new employer is a successor. And where, as here, in
addition to that factor, the size and organizational structure
of the employer succeeding to the smaller unit is in a
BRONX HEALTH PLAN 823
number or respects materially different, there may well be
a sufficiently substantial change in the nature of the em-
ploying industry to defeat any finding of successorship.
. . .
Respondent’s assumption of the mail and distribution
services . . . amounts to only a small fraction of the work
performed by the company wide unit recognized by TWA.
The entire complement of employees hired by Respon-
dent, 41, constituted less than 4 percent of the total num-
ber of 1,100 formerly employed by TWA at KSC and, of
those 41, only 27 came from the former TWA Unit. Thus,
the former TWA Unit became doubly diluted. Moreover,
TWA was a large company engaged primarily in transpor-
tation and related fields, was regulated under the Railway
Labor Act, and had contracts throughout the country. In
contrast, Respondent is a small organization, just recently
organized . . . whose only contract, as of the time of the
hearing in this case, was that involved herein. There is ob-
viously a substantial difference between the employer-
employee relationship in a large corporation and that char-
acteristic of a small operation such as Respondent’s.
[Footnote omitted.]
Lastly, the validity of the presumption of the continu-
ing majority status of the Union is especially put in ques-
tion where, as here, the portion of the former unit taken
over by the new employer was originally accreted to the
larger unit, and there is no showing that a separate and in-
dependent majority status in the smaller unit was estab-
lished at the time of the accretion.

The facts in the present case are not identical to those in ei-
ther Nova Services Co., supra or Atlantic Technical Services
Corp., supra. But they are, in my opinion, mighty close.
In the present case, TBHP took over the operations that had
previously been performed by managerial, supervisory, and
about 17 clerical employees who had been employees of Mon-
tefiore and who, while working at TBHP’s premises, were cov-
ered by a collective-bargaining agreement between Montefiore
and Local 1199. Although these employees were assigned to do
clerical work which in many respects was similar to that which
might be done at Montefiore (for example working on insur-
ance claims), it must be remembered that at TBHP they were
functioning for a completely different type of employing entity.
Montefiore runs a hospital whereas TBHP operates an insur-
ance company. These two companies are not engaged in the
same industry.
Further, the group of employees here constitutes a tiny frac-
tion (.05 percent) of the bargaining unit covered by the collec-
tive-bargaining agreement between the Union and Montefiore.
Moreover, the bargaining unit at Montefiore comprises hun-
dreds of job classifications and these are far in excess of the
clerical classifications employed at TBHP. The point is that
TBHP is not, in my opinion, a miniature version of the Monte-
fiore bargaining unit where it could reasonably be presumed
that the employees in the smaller version want union represen-
tation to the same extent desired by employees in the larger.
Because of the difference in the types of employees involved,
the extreme diminution in the size of the proposed unit, and the
fact that TBHP and Montefiore are engaged in two separate
kinds of businesses, I don’t see how it can fairly be presumed
that the Union had a continuing majority status amongst this
small group of people.
In conclusion, where in the unusual circumstances such as
these, the transition from one employer to another, entails such
a significant change in the employing entity and such a substan-
tial change in the size and shape of the bargaining unit, it seems
to me that the better solution for resolving whether the employ-
ees wish to have union representation, would be to conduct an
election pursuant to the procedures established in the National
Labor Relations Act. Had that been done in this case, the out-
come would probably have been determined within 2 to 3
months after July 1, 1993. It is now February 1994.
CONCLUSION OF LAW
The Respondent has not violated the Act in any manner al-
leged in the complaint.
[Recommended Order for dismissal omitted from publica-
tion.]