World Evangelism, Inc.

National Labor Relations Board - Board Decisions

Apr 2, 1980

248 N.L.R.B. 909 (N.L.R.B. 1980)

WORLD EVANGELISM, INC. 909
World Evangelism, Inc. and International Union of
Operating Engineers, Local No. 501, AFL-CIO.
Case 21-CA-17413
April 2, 1980
DECISION AND ORDER
BY CHAIRMAN FANNING AND MEMBERS
JENKINS AND TRUESDALE
On September 19, 1979, Administrative Law
Judge Timothy D. Nelson issued the attached De-
cision in this proceeding. Thereafter, the Respon-
dent filed exceptions and a supporting brief, and re-
quested an opportunity to argue its position orally.
The General Counsel filed a brief in reply to the
Respondent's brief.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the Na-
tional Labor Relations Board has delegated its au-
thority in this proceeding to a three-member panel.
The Board has considered the record and the at-
tached Decision in light of the exceptions and
briefs and has decided to affirm the rulings, find-
ings, and conclusions of the Administrative Law
Judge' and to adopt his recommended Order. The
Respondent's request for oral argument is denied as
the record and briefs adequately present the issues
and the positions of the parties.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor Re-
lations Board adopts as its Order the recommended
Order of the Administrative Law Judge and
hereby orders that the Respondent, World Evan-
gelism, Inc., San Diego, California, its officers,
agents, successors, and assigns, shall take the action
set forth in the said recommended Order, except
that the attached notice is substituted for that of
the Administrative Law Judge.
I The Respondent has excepted to certain credibility findings made by
the Administrative Law Judge. It is the Board's established policy not to
overrule an administrative law judge's resolutions with respect to credi-
bility unless the clear preponderance of all of the relevant evidence con-
vinces us that the resolutions are incorrect. Standard Dry Wall Products,
Inc., 91 NLRB 544 (1950), enfd 188 F.2d 362 (3d Cir. 1951). We have
carefully examined the record and find no basis for reversing his findings
APPENDIX
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
After a hearing at which all sides had an opportu-
nity to present evidence and state their positions,
248 NLRB No. 117
the National Labor Relations Board found that we
have violated the National Labor Relations Act, as
amended, and has ordered us to post this notice.
The Act gives employees the following rights:
To engage in self-organization
To form, join, or assist any union
To bargain collectively through represen-
tatives of their own choice
To engage in activities together for the
purpose of collective bargaining or other
mutual aid or protection
To refrain from the exercise of any or all
such activities.
WE WILL NOT refuse to bargain in good
faith with International Union of Operating
Engineers, Local No. 501, AFL-CIO, or any
other representative of our employees by
making changes in their wages, hours of work,
or other terms and conditions of employment
without first notifying such representative and
giving it a reasonable opportunity to negotiate
about such changes; and, if we agree to sign
and continue a labor agreement in effect or
make any other agreement with any bargain-
ing representative of our employees about
their terms of employment, WE WILL NOT
renege on those agreements.
WE WILL NOT in any like or related manner
interfere with, restrain, or coerce employees in
the exercise of the rights guaranteed by Sec-
tion 7 of the National Labor Relations Act, as
amended.
WE WILL immediately recognize and bar-
gain in good faith with International Union of
Operating Engineers, Local No. 501, AFL-
CIO, as the exclusive collective-bargaining
representative of our employees in the follow-
ing described collective-bargaining unit:
All engineering and maintenance employees,
including chief engineers, assistant chief en-
gineers, one man plant operators, high pres-
sure operating and maintenance engineers,
and engineer helpers employed by World
Evangelism, Inc., at the El Cortez Center,
San Diego, California; excluding office cleri-
cal employees, professional employees,
guards, and supervisors as defined in the
Act.
WE WILL immediately reduce to writing,
sign, and give effect to a collective-bargaining
agreement containing all of the terms, condi-
tions, and provisions contained in the agree-
ment between the above-named Union and
Handlery Hotels, Inc., which was in effect im-
WORLD EVANGELISM, INC.
910 DECISIONS OF NATIONAL, LABOR RELATIONS BOARD
mediately before our takeover of the El Cortez
Center.
WE WILL make whole any and all employ-
ees who have worked in the above-described
maintenance and engineering unit at any time
on or after October 2, 1978, for wages and
benefits which they have lost by our failure to
honor our agreement to adopt and give effect
to the union contract with Handler) Hotels,
Inc., together with appropriate interest on any
such amounts.
WORLD EVANGELISM, INC.
DECISION
STATEMENT OF THE CASE
TIMOTHY D. NELSON, Administrative Law Judge:
This case was heard at San Diego, California, on April
24, 25, and 26, 1979. It arose as follows: International
Union of Operating Engineers, Local No. 501, AFL-
CIO (the Union), filed a charge under Section 8(a)(5)
and (1) of the National Labor Relations Act, as amend-
ed, 29 U.S.C. § 151, et seq. (the Act), against World
Evangelism, Inc. (WEI), on December 29, 1978.1 Fol-
lowing investigation of that charge, the Regional Direc-
tor for Region 21 of the National Labor Relations Board
issued a complaint against WEI on February 26, 1979, al-
leging, in substance, that WEI, as a "successor" employ-
er, had committed violations of Section 8(a)(5) and (1) of
the Act by breaking a promise to sign and continue in
effect its predecessor's contract with the Union covering
a unit of operating and maintenance engineers; and by
unilaterally changing wage rates and other preexisting
terms and conditions of employment in that unit, includ-
ing canceling fringe benefit contributions.
WEI's timely answer, admitting due service of the
charge and certain allegations relating to its projected
annual gross receipts, denied most of the allegations in
the complaint going to the merits, and further denied
that WEI is engaged in "commerce" within the meaning
of Section 2(6) and (7) of the Act. 2 In this regard, WEI
further averred that it is a religious institution or church
and that its operations, including at the newly acquired
facility at which the instant dispute arose, are "wholly or
substantially no-commercial in nature and intimately con-
nected with the religious mission of the church." From
this WEI asserts that it is "outside of the scope of cover-
age of the . . . Act . . ." or, alternatively, that "The
. . . Act is unconstitutional, as applied to Respondent, in
that the exercise of jurisdiction over Respondent by the
. . . Board is prohibited by the First Amendment of the
Constitution."
All dates hereinafter are in 1978 unless otherwise specified.
aAt the hearing, WEI admitted through counsel, and I fild, that the
Union is, and has been at all times material herein, a labor organization as
defined in Sec. 2(5) of the Act.
I. THE ISSUES
I. Does WEI fall within the class of employing oper-
ations covered by the Act?
2. If so, would application of the Act to WEI uncon-
stitutionally infringe on rights guaranteed by the first
amendment?
3. Assuming that assertion of jurisdiction by the Board
over WEI's operations is consistent with the Act, and as-
suming that such assertion of jurisdiction does not in-
fringe on first amendment guarantees, did WEI:
(a) Become a legal "successor" with regard to the bar-
gaining unit in question?
(b) Promise to adopt and honor its predecessor's col-
lective-bargaining agreement with the Union for the unit
in question?
(c) Make impermissible unilateral changes in the wages
and other terms and conditions of employment in the
unit in question?
It is concluded and so recommended hereafter that as-
sertion of the Board's jurisdiction over WEI is autho-
rized by the Act and does not violate first amendment
guarantees; and that WEI violated Section 8(a)(5) and (1)
of the Act substantially as alleged in the complaint.
All parties appeared through counsel and were given
full opportunity to present and examine witnesses and to
introduce evidence. Upon the entire record herein, in-
cluding my observations of the witnesses' demeanor, and
consideration of the timely and helpful briefs filed by
WEI's attorney and counsel for the General Counsel, 3 I
hereby make the following:
FINDINGS OF FACT
Summary and Preliminary Findings
WEI has headquarters in San Diego, California, and
from there it controls a worldwide network of interde-
nominational evangelical Christian ministries and associ-
ated fundraising programs. It was founded by Reverend
Morris Cerullo and incorporated in 1962 in California as
a nonprofit corporations Since then, its activities have
been formally directed by a board of directors consisting
of President and Founder Morris Cerullo and his wife,
Teresa Cerullo, as secretary, as well as a board vice
president and a treasurer. Reverend Charles David Cer-
3 The due date for briefs was extended at the request of counsel for
WEI, agreed to by the General Counsel, in order to reconstruct portions
of the testimony which may have been deleted or badly transcribed.
Since the parties did not thereafter submit a motion to correct, nor a stip-
ulation calculated to repair any such transcript defects, it appears that
such defects did not prejudice either party's position. I note also that the
transcript is garbled in some instances. particularly in passages involv\ing
colloquy between and among judge and counsel.
I Since that incorporation, WEI has always been classified as "tax
exempt" by the Federal Internal Revenue Service and by the California
Franchise Tax Board. In 1977, on unilateral application and the furnish-
ing of details requested by those taxation bodies, WEI was reclassified
from status as a tax exempt "organization" to status as a tax exempt
"church" The General Counsel stipulated that WEI maintains and oper-
ates and is "at least in part" a "church," while arguing that it also occu-
pies status, inter alia, as a hotelier and landlord engaged in interstate com-
merce. Whether WEI is merely a nonprofit organization having a reli-
gious purpose-as opposed to being a "church"-does not appear to be
material to the resolution of any issue presented and, accordingly, no
conclusion is reached herein as to that question.
WORLD EVAGELISM, INC. 911
ullo, son of Morris and Teresa Cerullo, and hereafter re-
ferred to as David Cerullo, is currently the executive
vice president of WEI, and is directly in charge of its
operations. The four senior vice presidents of WEI
report directly to him. David Cerullo has also been di-
rectly responsible for real estate acquisitions and manage-
ment, and managing WEI's investment portfolio and
other financial affairs, including dealing with Federal and
state taxing and regulatory authorities. On this record,
David Cerullo has full authority to act for WEI on all
operational matters excepting "major policy" or "major
financial" decisions, and is the only person in Respon-
dent's organizational hierarchy regularly exercising such
overall authority.
The underlying dispute herein arose when, on October
2, WEI received title to, and took over operation of, a
large complex of adjacent buildings in downtown San
Diego collectively known as the El Cortez Hotel, from
its former owner, Handlery Hotels, Inc. (Handlery). The
El Cortez complex, a downtown San Diego landmark
occupying roughly one square city block, plus portions
of other adjacent blocks, included a main tower in which
were housed offices, hotel rooms, restaurants and bars,
leased commercial and office space, and a swimming
pool. It also consisted of three separate hotel or motel
buildings named El Cortez Motel, International Motel,
and Travolator Hotel. The latter building also housed
additional leased commercial and office space. The three
above-named buildings contained at least 500 hotel
rooms. A fourth building housed the convention center.
All the buildings in the El Cortez complex were and
continue to be physically connected with the main tower
through overhead walkways. The complex has been re-
ferred to since the October 2 takeover by WEI as El
Cortez Center.
Under Handlery's final 10 months of operating the El
Cortez complex, i.e., from January to October, it realized
approximately $3.4 million in revenues. WEI, which real-
ized approximately $10 million in gross receipts from its
operations worldwide in calendar year 1978,5 purchased
the complex with several purposes in mind. These in-
cluded use of the complex to house the "Morris Cerullo
School of Ministry." The latter is a recently organized
effort by WEI to provide a central training ground for
non-American "nationals" in effective means for prosely-
tizing among the citizens of their respective homelands.
A major purpose in WEI's acquisition of the El Cortez
complex was to enable it to offer for the first time a 6-
month "live-in" teaching experience to would-be minis-
ters of the Gospel.6
I Apart from unspecified amounts of income received from invest-
ments, and part from income received from commercial tenants in the
El Cortez Center and from hotel lodgers there, which amount, as dis-
cussed further below, substantially exceeds 500,000 annually, WEI's
only other main revenue source appears on this record to be contribu-
tions from the faithful solicited through television, radio, and mailing
campaigns and through "Crusades" conducted by WEI in various local-
ities around the world.
e At the hearing David Cerullo credibly testified that approximately
535 persons enrolled in the first 6-month curriculum offered by the
School of Ministry. Standard tuition for "live-in" students was about
$2,200 each. See also Resp Exh 8
In addition, a portion of the complex was converted to
a television broadcast studio to be used, inter alia, in pro-
ducing the substantial number of regular, weekly one-
half hour syndicated television programs currently being
broadcast by WEI in approximately 45 "markets" of the
United States and Canada, as well as the less frequent 1-
hour national "prime-time specials" and -hour "pre-cru-
sade promotions" (the latter broadcasts being confined to
the geographical area where WEI plans to conduct one
of its crusades). 7
When Handlery operated the complex, it employed
about 250 employees in various classifications, many of
whom were represented by labor organizations. Included
among these were about eight (at peak employment)8
maintenance and engineering employees (interchangeably
called "maintenance employees" or "engineers" herein)
who were responsible for maintaining and operating the
various mechanical systems used in all the buildings in
the complex, including electrical, plumbing, boilers, re-
frigeration, air-conditioning, swimming pool, and the
like. Those employees were represented by the Union
and were covered under a collective-bargaining agree-
ment between the Union and Handlery, the stated term
of which was from November 1, 1977, until November 1,
1980. There had been "a number of contracts . .. over
the years" between Handlery and the Union covering El
Cortez maintance employees. 9
The Union had notice through one of Handlery's
agents in mid-August that WEI would acquire and take
over the El Cortez complex as of October 1. In a letter
to the Union from Handlery dated August 16 (G.C. Exh.
3), this information was conveyed, together with the
statement that Handlery's contract with the Union would
be deemed terminated as of the takeover. That letter fur-
ther gave WEI's business address and advised that David
Cerullo would be "the person to contract there."
It is undisputed that WEI decided, shortly before the
takeover, to retain the Handlery maintenance and engi-
neering force represented by the Union. As the takeover
time approached, however, there was no specific state-
ment by any agent of WEI regarding whether or not
WEI would adopt and continue in effect Handlery's con-
tract with the Union. As a result of rumors and equiv-
ocal behavior by WEI discussed infra, the five mainte-
nance employees then working for Handlery resolved
among themselves that they would resign unless WEI
were to assume the Handlery contract. As of the Octo-
ber 2 formal takeover date, the five maintenance employ-
ees continued working without any specific understand-
ing having been reached with WEI on the subject. Also
on October 2, the union business representative, Art
Brown, received telephonically the contents of a tele-
gram which WEI had transmitted on September 2910 to
The quotes are from the testimony of David Cerullo.
a Crediting Union Business Representative Art Brown the engineers'
unit complement varied from five to eight or nine employees under
Handlery's operation of the El Cortez complex
9 Credited testimony of Art Brown.
O1 The delay in receipt of the telegraphic message apparently occurred
because the Union's offices were closed when the message was first trans-
mitted on Friday, September 29. When Brown arrived at the Union's
office on Monday, October 2, he found a notice of attempted delivery of
Continued
WORLD EVAGELISM. NC 1
912 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
the Union as well as to the other labor organizations rep-
resenting Handlery employees. The message, signed by
David Cerullo, read:
World Evangelism is not going to operate business
of the El Cortez Hotel. We did not purchase the
business. We will not be a successor, assign, trans-
feree or purchaser of the business. [G.C. Exh. 4.]
When Brown received this message, he called Chief
Engineer Robert Fraizer, a member of the El Cortez bar-
gaining unit, and informed Fraizer of its contents. Brown
and Fraizer interpreted the telegraphic message as an im-
plicit statement that WEI would not have anything to do
with the Union after its takeover of the El Cortez com-
plex. Brown learned from Frazier that, based on the con-
tents of WEI's telegram, the engineers planner to pack
up and quit on the following day, October 3.
On October 3, at or about 9 a.m., Brown went to the
El Cortez Center to talk to the maintenance group. He
met with Chief Engineer Fraizer while the other mainte-
nance employees began packing their tools and clearing
out their lockers preparatory to quitting. While this was
occurring, WEI General Manager Ray Rose called
Fraizer's office and Brown spoke with him. Having been
made aware by a security guard that the crew was about
to leave, Rose asked that the employees withhold further
action until David Cerullo could meet with them. Brown
agreed, and Rose and Cerullo promptly came to Fra-
zier's basement office to discuss the matter.
There is disagreement among the parties about what
took place in that basement meeting, specifically as to
whether or not David Cerullo agreed to sign the prede-
cessor Handlery contract. The participants are in general
agreement that Cerrullo, hearing that the maintenance
employees had interpreted the September 29 telegram as
a form of brushoff, protested that the telegram had been
sent to the Union "by mistake." This prompted discus-
sion about a contract. While more detailed findings are
entered below on the subject, it is at least agreed that
Cerullo invited Brown to "put . . . together" a contract
and get it back to him. The maintenance employees, be-
lieving that the matter was resolved, stayed on the job.
Brown then went back to his office, picked up a blank
copy of the San Diego Hotel Industry contract to which
Handlery had been a party, and returned t:o the El
Cortez Center, meeting with Rose, who had been desig-
nated earlier by David Cerullo as the person to whom
Brown should transmit the contract. Brown and Rose
went through the specimen contract. In Rose's presence,
Brown made certain written emendations thereon, insert-
ing WEI's name in the space provided for the name of
the employer, and changing dates to reflect an effective
date coincident with the date of WEI's takeover of the
El Cortez complex. The two men paused briefly in their
review of the contract's substantive terms at the clause
providing for "non-discrimination" on the basis of "race,
religion, sex, color, age, ancestry or national origin."
Rose stated that he had some problems with that lan-
guage, asserting that, as a religious institution, WEI re-
the message and, through an office secretary, telephoned t:he telegraph
office to learn the contents of the message.
served the right to discriminate on the basis of religion.
Brown replied that the Union enjoyed no such rights,
but that the two could probably work out language
which would be mutually satisfactory. The meeting
ended with Brown telling Rose that he would have ap-
propriately tailored fresh contracts prepared and would
furnish them to Rose, along with health and welfare and
other fringe benefit trust subscription forms. A few days
later, on or about October 5, Brown returned with these
documents, leaving them with Rose's secretary in the lat-
ter's absence (G.C. Exh. 5).
Although susceptible of further detailing, more than 2
months passed thereafter during which WEI neither
signed the contract nor sought to communicate in any
fashion with the Union. Brown periodically received re-
ports that WEI was paying the maintenance employees
less than the exact rates called for in the contract. Brown
spoke more than once with Rose and with David Cer-
ullo, regarding these reports, but received no more than
assurance that they would be "looked into."
Finally, in December, WEI, through counsel, advised
the Union that WEI had not agreed at the time of ta-
keover to adopt the predecessor Handlery contract in
toto. WEI's attorney further advised in a letter dated De-
cember 28 that WEI did not "want to enter into the con-
tract in its present form." The letter went on to advise
that WEI was desirous of including in any new contract
"a provision regarding the religious affiliation of World
Evangelism employees," stressing that the Civil Rights
Act of 1964, known as Title VII, permitted WEI "to dis-
criminate in employment practices on religious grounds."
In its final substantive paragraph, WEI's attorney an-
nounced that:
World Evangelism plans to set up interviews in the
near future with all former El Cortez Hotel em-
ployees, including operating engineers, who are
now working with World Evangelism as temporary
employees. These interviews will be conducted
for the purpose of determining each employee's reli-
gious background and affiliation to determine his or
her suitability as a permanent employee. As a cour-
tesy, I will inform you when the interview of any
operating engineer will take place. 2
In addition to the conceded fact that WEI has, since
the point of takeover, paid maintenance employee Fra-
zier and others at rates which are at variance with the
wage provisions of the Handlery contract, it is also ad-
mitted that WEI has failed to make any contributions on
behalf of the maintenance employees to the fringe benefit
trusts referred to in the Handlery contract. a It is also
1l Resp Exh. 2, emphasis supplied. This was the first indication to the
Union that WEI regarded the maintenance employees as occupying some
sort of "temporary" status.
12 As of the hearing herein, no such "religious suitability" interviews
in the maintenance employee unit had taken place.
iJ David Cerullo testified that he left instructions for all maintenance
employees to continue to receive the wage rates under the Handlery con-
tract "but not their benefit package." Regarding Fraizer, however, Cer-
ullo stated that he ordered Fraizer's pretakeover hourly wage rate re-
duced on advice of other WEI personnel who opined that Frazier "was
not Chief Engineer material." On brief, Respondent also concedes that
Continued
WORLD EVAGELISM, INC. 913
acknowledged by WEI that it did not notify, nor seek to
bargain with, the Union about such charges in previously
enjoyed terms and conditions of employment in the
maintenance unit before implementing them.
II. ANALYSIS OF RESPONDENT'S JURISDICTIONAL/
CONSTITUTIONAL CONTENTIONS: FURTHER FINDINGS
AND CONCLUSIONS
Having thus summarized many of the pertinent facts
and the overall setting in which this case arose, it re-
mains to address the jurisdictional and constitutional ar-
guments raised by WEI, and to determine the merits of
the underlying controversy. Further factual findings are
entered below, as pertinent to the issues under discus-
sion.
Before analyzing whether or not WEI's operations are
within the jurisdictional reach of the Act, it is well to
note with greater specificity the nature of WEI's oper-
ations at the El Cortez Center and their potential impact
on interstate and international commerce. Thus, WEI an-
nually receives in the neighborhood of $10 million from
various sources throughout the world which, although
the record does not reveal the facts with precision, is
used in part for investment and property acquisition pur-
poses. Moreover, a substantial amount of WEI's annual
revenues derive from what are acknowledged to be non-
religiously associated and purely commercial activities at
the El Cortez Center.' 4 As was stipulated at the hearing,
these include the following revenues from the following
sources:
WEI has continued Handlery's contractual arrange-
ments with two interstate air carriers, National Airlines
and American Airlines, to provide hotel lodging in the
Travolator hotel building, on a priority basis, for tran-
sient flight crews on layover in San Diego. From its Oc-
tober 2 assumption of operations to April 20, 1979 (i.e.,
shortly before the hearing herein), WEI provided an
average of 60 rooms per night for those purposes and re-
ceived revenues from those airlines of $206,042. Project-
ing to the end of its first full year of operations, it was
stipulated that revenues from these sources alone would
be approximately $376,000.
At all times since the takeover, WEI has continued to
hold the Travolator hotel building open to the transient
lodging public. Between October 2 and April 20, 1979,
WEI realized approximately $94,000 from such "public"
lodgers; and, projecting to the end of its first year, will
realize $171,000 from that customer source.
Finally, consistent with past usage under Handlery
ownership, at least 25,000 square feet in the El Cortez
complex is leased out to business and service enterprises,
such as airlines, travel agencies, gift shops, restaurant or
coffeeshops, insurance agencies, and a local of a labor or-
ganization representing bartenders and culinary work-
WEI paid the other engineers "rates slightly below the hourly rate paid
by Handlery,"
4 In its post-hearing brief, WEI acknowledges that it "expect[s]
[annual] gross receipts from commercial activities of approximately
$692,000.," citing the stipulation at the hearing discussed infra. In fact, the
stipulated projected commercial revenues total $792.,0(X
ers. 5 Between October 2 and April 20, 1979, WEI de-
rived $135,884 in rental income from those commercial
lessees. Projecting to the end of its first full year, WEI
will receive $245,000 from those sources.
Nor are those figures alleged by WEI to be unrepre-
sentative of its expected future revenues from commer-
cial sources. It is conceded that WEI acquired the El
Cortez complex without any plans to abandon the com-
mercial business activities formerly conducted there. As
David Cerullo acknowledged, WEI intends to use the
Center for "economic" purposes, and there would be
"total maximization" of the complex to minimize the
cash drain, or "impact" on WEI of the Center; and the
Center will provide "cash flow" for WEI's operations
generally.
Although it may be WEI's long-range hope that it will
someday be able to use the entire complex for exclusive-
ly religious purposes (e.g., for religious seminars and
conferences over and above its present partial use for the
6-month School of Ministry program), there is no sug-
gestion that this is any more than a dream which will not
be realized unless and until WEI is able to expand its fol-
lowing of faithful adherents and, concomitantly, its finan-
cial base. Again, as David Cerullo testified:
We are not in the financial position to be able to-
the six months of the year-. .. to [use] it for our
conventions . . . or other religious purposes....
Therefore . . . we have made a decision in the
church to utilize the facility . . . for other conven-
tions of other people provided, however, that those
conventions and or transient guests conform to the
moral and spiritual standards of World Evangelism's
Church. 7
Accordingly, it is plain that WEI's revenues from El
Cortez Center operations do not derive exclusively from
traditional religious activity and related solicitation of
funds from its religious adherents. Rather, WEI relies on
nonreligious, commercial activity as one of its sources of
revenue. Furthermore, it is clear that those commercial
activities alone, while perhaps amounting to a relatively
small proportion of its overall activities, are nevertheless
substantial enough to meet the statutory and discretion-
ary standards applied by the Board in determining
whether or not to assert jurisdiction over, for example, a
hotel enterprise,' s or (as is arguably the case in the rev-
enues derived from interstate airline companies), a busi-
'5 A complete listing of WEI's 18 commercial tenants at the Center as
of April 24, 1979, may be found in G.C. Exh. 7.
"6 Apart from commercial uses already noted, there are plans to
reopen a "fine food" public restaurant in the "tower," and affirmative ef-
forts were being made at the time of the hearing to obtain nonreligious
convention bookings for the convention center.
17 Contrary to an implication in Cerullo's testimony, airline crews on
layover and transient public lodgers are not screened by WEI for moral
and spiritual conformity to WEI's tenets, nor is their behavior while in
lodging at the Travolator Hotel subject to any special scrutiny
Is Floridan Hotel of Tampa, Inc., 124 NLRH 261 (1959); Penn-Keystone
Realty Corp., 191 NLRB 800 (1971).
WORLD EVAGELISM, INC
914 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
ness providing services directly for an out-of-state busi-
ness customer. 19
WEI argues, however, that the Board, in the exercise
of its discretionary authority to decline jurisdiction on
policy grounds, should decline jurisdiction herein based
on its holdings in Motherhouse of the Sisters of Charity of
Cincinnati, Ohio, 232 NLRB 318 (1977), and Association
of Hebrew Teachers of Metropolitan Detroit, ect., 210
NLRB 1053 (1974), which themselves involved applica-
tion of the two-fold standards set forth in The First
Church of Christ, Scientist in Boston, Massachusetts, 194
NLRB 1006 (1972). In that latter case, the Board, in re-
jecting constitutional defenses under the first amendment
similar to those discussed below which are raised by
WEI, also stated:
Although it is the Board's general practice to de-
cline jurisdiction over nonprofit religious organiza-
tions, the Board does assert jurisdiction over those
operations of such organizations which are, in the
generally accepted sense, commercial in nature. 20
Analyzing the facts presented in The First Church of
Christ, supra, the Board first determined that the employ-
er's activities included many which are "in the normally
accepted sense commercial . . ." and which "affect com-
merce."21 The Board next focused on the degree to
which the employees in the unit sought by the petition-
ing union, i.e., carpenters and electricians who worked
throughout the employer's building complex, spent time
on such commercial aspects of the employer's operations.
Finding that such employees spent a "substantial por-
tion"2 2 of their time on such activities, the Board as-
sumed jurisdiction over the employer and directed that a
representation election be held.
WEI urges on brief that the application of the "two-
fold" approach employed in The First Church of Christ,
supra, to the facts herein requires the conclusion that as-
sertion of jurisdiction over WEI would be improper. I
disagree. First, it is clear from the earlier description of
WEI's operations there that WEI engages in substantial
commercial activities at the El Cortez Cenler which
have no relationship, except as a revenue source, to
WEI's religious activities. Second, the record reveals
that at least a "substantial portion" of the time spent by
engineering unit employees there is related to WEI's
commercial activities. Thus, they work throughout the
building complex, operating and maintaining the various
mechanical systems-plumbing, heating, cooling, electri-
cal, etc.-which are required as much as fr WEI's
above-described commercial activities as they are for its
religious activities. Put another way, the work of the
maintenance engineers cannot be said to be associated
19 Siemons Mailing Service, 122 NLRB 81 (1958); Edward Pererein and
Robert Greenlee, A Partnership d/b/a Peterein and Greenlee Construction
Co., 172 NLRB 210 (1968).
20 The First Church of Christ, supra at 1008, emphasis supplied.
21 Specifically, annual sales in excess of SI million of the Christian Sci-
ence Monitor to out-of-state customers, and annual revenues in excess of
$500,000 from the rental and maintenance of several apartment buildings
and stores.ld. at 1008-09.
22 Specifically, the Board noted that the unit employees pent at least
41-42 percent of their time on employer's commercial activities. Id. at
1009.
with only those aspects of WEI's operations at El Cortez
Center which are religious in character.
Accordingly, where, as here, WEI engages in some ac-
tivities which are, "in commerce" and which "affect
commerce," and where employees in the engineers' unit
perform work which is necessarily associated with those
commercial activities, I conclude that the dual tests in
First Church of Christ, supra, have been satisfied2s .
WEI further argues, however, that even if the Board
were to assume jurisdiction over WEI herein based on
application of the tests set forth in First Church of Christ,
the Board's statutory authority to do so has been called
into question by the recent decision of the Supreme
Court in Catholic Bishop of Chicago.24 Relying on that
precedent, WEI maintains that "Congress did not intend
the NLRA to apply to religious institutions." My own
review of that case, however, convinces me that WEI's
position in this regard is without merit.
Catholic Bishop focused on a narrow set of questions.
As framed by the Court, these were:
(a) Whether teachers in schools operated by a
church to teach both reli gious and secular subjects
are within the jurisdiction granted by the . . . Act;
and (b) if the Act authorizes such jurisdiction, does
its exercise violate the guarantees of the Religion
Clauses of the First Amendment?2 5
Thus, there is no suggestion-neither in the Court's
own statement of the issue nor elsewhere in its opinion-
that the Board's traditional exercise of jurisdiction over
the commercial activities of religious employers should
be re-examined, except to the extent that such exercise
applied to church school teachers. To the contrary, the
Court's decision that Congress did not intend for the Act
to apply to the employment relationship between church-
operated schools and their teaching employees clearly
derived from the Court's conclusion that such teachers
occupy a "critical and unique role . . . in fulfilling the
2s That the Board, in applying those tests, reached contrary conclu-
sions in Motherhouse of the Sisters of Charity, supra, and Association of
Hebrew Teachers, supra, does not require a different result. In Mother-
house, supra, the employer failed to satisfy the first test, that the employer
be engaged in "commercial" activities. There, the Board found the argu-
ably "commercial services performed by the employer to be closely asso-
ciated with the employer's religious function (i.e., providing nursing
home care to permit infirm church members and members of the reli-
gious order to continue practice of their religion) and, under those
"unique circumstances" (id. at 319), the Board declined to assert jurisdic-
tion. In Hebrew Teachers., supra, the Board panel (then Member Fanning
dissenting), affirmed the conclusion of the Administrative Law Judge that
the employer was primarily engaged in furnishing after-school religious
education to children (a "new class" of employer not clearly covered by
established Board policy). Relying thereafter on the fact that there was
no basis in the record on which to conclude that such a class of employ-
ers had any appreciable impact on interstate commerce, the Administra-
tive Law Judge, affirmed by the panel majority, determined that the
General Counsel had failed to satisfy its burden of proving that it would
effectuate the purposes of the Act to assert jurisdiction. Id. at 1058. In
each case, the Board clearly found the assertedly "commercial" features
of the employer's operations not to be "commercial in the normally ac-
cepted sense," but rather to be unique and essentially religion-related.
Here, however, no such conclusion can be drawn about WEl's hotel and
office-leasing activities, which are equally as "commercial" as those per-
formed by the employer in First Church of Christ. supra.
24 N.L.R.B. v. Catholic Bishop of Chicago, et al., 440 United States 490.
25 Id. at 491.
WORLD EVAGELISM, INC. 915
mission of a church-operated school."2 6 Noting that
"The key role played by teachers in such a school
system has been the predicate for our conclusions that
government aid channeled through teachers creates an
impermissible risk of excessive governmental entangle-
ment in the affairs of the church-operated schools," 2 7
the Court concluded that the same risk of entanglement
was inherent in any attempt by the Board to assert juris-
diction over the church school-teacher relationship. Ac-
cordingly, in the absence of affirmative indications that
Congress intended for the Act to apply to the church
school-teacher relationship, the Court determined that
Congress did not intend for the Act to apply to that rela-
tionship. Having so concluded as a matter of statutory
construction, the Court found it unnecessary to decide
the constitutional questions which would arise were the
Act to apply to the church school-teacher relationship. 28
Accordingly, Catholic Bishop may not be interpreted as
holding that Congress intended a blanket exemption from
the Act's coverage for any and all of the myriad employ-
ment relationships which may exist between a religious
organization and various classes of its employees. Nor
are the concerns indicated by the Court in Catholic
Bishop relevant to the type of employment relationship
here involved, i.e., that of a religious organization em-
ploying employees whose function is limited to maintain-
ing and operating the mechanical systems required for
both the commercial and religious uses of a complex of
buildings owned by the organization. Thus, maintenance
engineers do not play any "unique role" in the oper-
ations of WEI qua religion; and, unlike the environment
in which even lay teachers work in church schools, it
may not be said of WEI's operations at the El Cortez
complex that "Religious authority necessarily pervades
the . . . system." 29 Rather, the work performed by the
maintenance employees herein is conducted in an essen-
tially secular environment and is only related remotely at
best to the ability of WEI to propagate its religious be-
liefs and to engage in religious activity.
If, as Respondent argues, Catholic Bishop requires the
Board to reexamine its own standards for asserting juris-
diction over commercial activities of religious organiza-
tions, such a reexamination is best left to the Board in
the first instance. It is noted, however, that the basis for
such a reexamination, if any, would be the concern for
the first amendment rights of such organizations, and not
a concern that the Act itself fails to confer jurisdiction
on the Board to decide labor controversies which arise
26 Id. at 501. See also the Court's additional supporting references to
"the importance of the teacher's function in a church school" (id. at 501),
and the manner in which ". .. [t]he church-teacher relationship in a
church-operated school differs from the employment relationship in a
public or other non-religious school." (Id. at 504.
a? Id. at 501.
2 Id. at 504-507.
' Lemon v. Kurtzman, 403 U.S. 602, 617 (1971), cited by the Court in
Catholic Bishop, supraat 501.
between religious organizations and their nonteaching
employees.
The former concern, that jurisdiction over a religious
employer may, as in the case of teachers in church
schools, involve an impermissible intrusion by the State
on the first amendment rights of religious organizations,
does not, in my opinion, arise in the instant case. In this
regard, I note David Cerullo's acknowledgement that
WEI's body of religious belief and dogma does not con-
tain prohibitions against its adherents becoming or re-
maining union members, or against recognition and deal-
ing with a labor organization. And it is very doubtful
that such religious beliefs would operate as a defense
under the first amendment against observance of state or
Federal laws and regulations advancing a nondiscrimina-
tory secular objective. 3°
As the Board observed in First Church of Christ, supra
(194 NLRB at 1007-08):
The Act has as its objective the protection of soci-
ety by the avoidance or minimization of industrial
strife which interferes with the flow of commerce.
In furtherance of that objective, the Act guaran-
tees to employees the right of self-organization and
proscribes as unfair certain labor practices which in
the judgment of Congress are inimical to that end.
The societal interest in requiring conformance with
the statutory commands is sufficiently compelling to
warrant the resultant interference in a person's free-
dom to conform his conduct to his religious beliefs.
It is on this basis that we have previously held that
an employer must comply with the provisions of
the Act and bargain with a union despite claims that
such bargaining would violate the employer's reli-
gious conviction.
In summary therefore, I conclude that WEI's employ-
ment relationship with the unit of operating and mainte-
nance engineers at the El Cortez Center is subject to the
Board's jurisdiction, and that application of the Act to
WEI would not impair its rights under the First Amend-
ment. Moreover, to the extent that WEI is engaged in
hotel and office leasing activities in commerce and af-
fecting commerce, it would effectuate the purposes of
the Act to assert jurisdiction over WEI.
30 See, e.g., discussion of Chief Justice Burger in Lemon v. Kurtzman,
403 U.S. at 614, referring to constitutionally permissible intrusions by the
State into church affairs through "Fire inspections, building and zoning
regulations, and state . compulsory school attendants laws." See also
Michell v. Pilgrim Holiness Church Corp., 210 F.2d 879 (7th Cir. 1954),
cert. denied 347 U.S. 1013, and cases cited therein at 884 for the proposi-
tion that:
While the First Amendment . . . does guarantee the free exercise
of religion, the right . . . is not without limitations. The individual
has the absolute power to believe in any religious doctnne he may
choose but only limited power to act pursuant to that belief.
WORLD EVAGELISM [NC
916 DECISIONS OF NATIONAL. LABOR RELATIONS BOARD
11I. THE MERITS REVISITED: DISCUSSION, FINDINGS,
AND CONCLUSIONS
From the earlier factual summary, it is clear that WEI,
in retaining intact the unit3 of operating and mainte-
nance engineers represented by the Union to perform
their traditional work function at the El Cortez Center,
assumed the legal obligations of a successor employer, as
set forth by the Supreme Court in N.L.R.B. v. Burns In-
ternational Security Services, Inc., 406 U.S. 272 (1972).
The precise nature of that obligation, as Burns makes
clear, depends on the circumstances under which the em-
ployees were retained. Where, as here, it was "perfectly
clear" before WEI's assumption of operations that WEI
intended to retain all the engineers on Handlery's payroll
to continue their traditional and customary functions at
the Center, WEI's obligations as a successor employer
included, at the least, the duty to recognize and bargain
with the Union as the exclusive representative of those
employees. More specifically, under the foregoing cir-
cumstances, WEI had a duty to "consult with the em-
ployees' bargaining representative before [fixing initial]
terms" of employment.3 2 In the absence of such consul-
tation, WEI's obligation was to continue in effect those
terms and conditions of employment which members of
the bargaining unit enjoyed under the predecessor oper-
ation, including not only their hourly rates of pay, but
also contributions to preexisting fringe benefit plans ap-
plicable to the unit. See, e.g., Bellingham Frozen Foods,
Inc., a Division of San Juan Packers, 237 NLR:B No. 113
(1978); Potter's Drug Enterprises, Inc., etc., 233 NLRB 15
(1977), enfd. 99 LRRM 3327, 84 LC ¶10,929 (9th Cir.
1978); Harold W. Hinson, d/b/a Hen House Majket No. 3,
175 NLRB 596 (1969), enfd. 428 F.2d 133 (8th Cir.
1970).
Since WEI admittedly paid wage rates to engineers
which were lower than those which they had enjoyed
under Handlery's operation, and also admittedly discon-
tinued fringe benefit contributions on employees' behalf,
all without prior notice to or bargaining with i:he Union,
it is clear that WEI breached its obligation as a successor
to initially consult with the Union, thereby violating Sec-
tion 8(a)(5) of the Act.
The question remains, however, whether WEI,
through the actions and words of David Cerullo on Oc-
tober 3, also agreed to adopt and adhere to the preexist-
ing contract between Handlery and the Union. In this
,'I The unit covered by the Handlery contract is described in its "Arti-
cle I, Union Recognition," as including "all employees perfobrming work
under the jurisdiction of the International Union of Operating Engineers
as outlined in its Constitution." (G.C. Exh. 5.) In the compl;aint, the Gen-
eral Counsel characterized the unit as "All engineering and maintenance
employees, including [a listing of job titles from the contract's "Schedule
A" wage appendix] employed at Respondent's [El Cortez Center] facility
. ." with standard exclusions for office clerical, professional, and guard
and supervisory employees. Although Respondent's answer admitted that
"engineering and maintenance employees" were employed by it at the
Center, the answer denied, "on information and belief' the complaint al-
legation that this group constituted an appropriate unit fr bargaining
purposes. It being clear that the employees in question perform similar
and related functionally distinct tasks in operating and maintaining the
physical plant at the El Cortez Center, I find that the unit in question is
an appropriate one for collective-bargaining purposes and that it may be
fairly described substantially as alleged in the complaint.
a2 Burns, supra, 406 U.S. at 294-295.
regard, while it is settled that WEI was under no obliga-
tion to adopt and continue that agreement, Burns, supra,
406 U.S. at 291, it is equally clear that a successor may
voluntarily bind itself to its predecessor's labor agree-
ment. (Ibid.) Whether as alleged by the General Counsel,
WEI did so voluntarily bind itself to the Handlery con-
tract is the question next discussed.
Did WEI Agree to Adopt the Handlery Contract?
Background
David Cerullo admittedly received a copy of the labor
agreement between Handlery and the Union during ne-
gotiations with Handlery leading to WEI's purchase of
the Center. He instructed his general manager, Rose,
about 2 weeks before October 2, not to refer to WEI as
a "successor or assign" of Handlery. This suggests to me
that Cerullo, while not necessarily perfectly schooled in
the law of successorship, was nevertheless aware of the
potential legal consequences of acquiring a business to-
gether with its employee complement. 3 3 Thus, Cerullo
caused WEI personnel to make informal inquiries before
takeover among employees in the engineering unit re-
garding their intentions and demands should they
become employed by WEI.
In this latter regard, in late August, Chief Engineer
Fraizer met with WEI representatives Roberts and
Martin for about 1-1/2 hours. During their meeting,
which involved a variety of details and explanations by
the latter people regarding WEI's plans for the El
Cortez facility, Roberts or Martin brought up the subject
of the engineers' future plans. Emphasizing that he had
no authority to offer a job or commit WEI to sign a
union contract, Roberts or Martin asked Fraizer whether
the engineers' group would stay on at the Center if WEI
wanted them to do so. Fraizer replied: "Yes, under a
union contract." Roberts or Martin then said that they
would not be able to answer whether or not the engi-
neers would be permitted to stay on until conferring fur-
ther with David Cerullo.3 4
Later, and shortly before the takeover, Cerullo told
Rose that he wanted the engineers to remain in WEI's
employ after takeover. Rose communicated this to Night
Engineer Walt James, and asked him to pass on the mes-
sage to Fraizer. James did so.
There is some testimony from General Manager Rose
regarding a meeting which took place between himself,
Brown, and Fraizer shortly before the takeover. Rose be-
lieved that it had occurred shortly after he had transmit-
ted the above-described message to James. Fraizer was
not questioned about the meeting and Brown did not
recall it. As Rose recalled it, Brown and Fraizer had
sought him out and, inter alia, had asked him "some
questions about the contract." Rose characterized his
reply as being in the nature of a disclaimer that he "had
no authority to make the decision on whether there
33 David Cerullo has a B.S degree in business administration. His edu-
cation has included some law courses. In his 6 years as an employee of
WEI, he had progressively greater responsibilities in the management of
a corporation which has gross receipts of many millions of dollars annu-
ally
34 Credited and uncontradicted testimony of Fraizer.
WORLD EVAGELISM, INC. 917
would be a new contract for the operating engineers-
whether the . . . engineers should stay, whether we
would hire new engineers...." Rose testified, however,
that he agreed to "pass the word" along to David Cer-
ullo. 3 5 If such a meeting took place, it must have been
before Rose told James that WEI wished to retain the
engineers, and perhaps such a meeting was what precipi-
tated Rose's later message to James. Since Brown ac-
knowledged the possibility that such a meeting had taken
place even while sincerely denying recalling it, I credit
Rose's sketchy and conclusionary account to the extent
that it implies that, shortly before takeover, WEI had ad-
ditional notice that continuing contract coverage was a
paramount concern of the engineering unit employees.
Meeting of October 3
The exact words used during the October 3 meeting in
Fraizer's office involving Cerullo and Rose, and Brown
and Fraizer (and, briefly, engineer James Hodge) are in
substantial dispute. As noted earlier, it is generally
agreed that the telegraphic message from WEI was an
early topic of discussion, with Cerullo protesting that the
telegram had been sent to the Union by "mistake." It is
also clearly acknowledged by both Cerullo and Rose
that Brown told them in this meeting that the engineers
were not going to work unless they had a contract.3 It
is also clear, as previously noted, that the meeting closed
with Cerullo's statement that the Union should "put . . .
together" a contract and get it back to him. Finally, it is
clear that the engineers, on learning of these develop-
ments, unpacked their tools and gear and remained on
the job.
Brown attributes to Cerullo the statement, among
others, that "we are going to sign the contract; we are a
successor." Fraizer, substantially corroborated by
Hodge, who was present in the early minutes of the
meeting, testified that Cerullo stated: "Bob, I told you a
week ago that I would sign the contract." Cerullo and
Rose, on the other hand, take the position3 7 that Cerullo
never unreservedly agreed to sign any particular con-
tract, but only invited the Union to submit a proposed
contract for consideration.
On balance, and considering all the surrounding cir-
cumstances and the testimonial demeanor of the wit-
nesses, I conclude that Brown, Fraizer, and Hodge of-
fered substantially more credible accounts of the transac-
tions in Fraizer's office on October 3 than the conclu-
as Dee Dee Dahl, a WEI employee, corroborates Rose to the limited
extent of acknowledging that she was called in to "witness" a meeting
between Rose, Brown, and Fraizer. Her testimony on the timing thereof.
and the substances of the matters discussed, was even more vague than
that f Rose, however
s3 As Cerullo put it, "It became clear to me then according to Art
Brown that in his opinion they weren't going to stay without a contract."
As Rose put it, "He [Brown] made it clear that the operating engineers
did need a contract in order to work."
57 The term "position" is used advisedly, since neither Cerullo nor
Rose purported to give a comprehensive account of the meeting and the
words used by the participants. Rather, especially as compared to the tes-
timony of Brown, Fraizer, and Hodge, the two management witnesses
had an unfortunate tendency to characterize and editorialize about key
exchanges during the meeting.
sionary versions offered by Cerullo and Rose.3 8 Specifi-
cally, I reject any testimony by the latter witnesses to
the effect that all Cerullo did was to invite a "proposal"
from Brown for "consideration" by Respondent. While
he may have been legally entitled to do so, it is plain that
doing so would have precipitated the threatened walkout
of employees. Their position was plain: "No contract, no
work." Thus, Cerullo was confronted with a dilemma:
either adopt Handlery's contract or suffer the conse-
quences of losing the skilled and experienced employees
absolutely essential to operation of critical building sys-
tems. I conclude that Cerullo, however grudgingly and
indistinctly, opted, as do many employers,3 9 for the
course of labor peace; and that he intentionally sought to
leave the impression that he would sign the Handlery
contract as soon as one could be prepared with appropri-
ate changes reflecting WEI's ownership and its date of
takeover.
The subsequent conduct of WEI's agents lends further
support to the above conclusion. Brown promptly re-
turned with a copy of the industry contract to which
Handlery was a party, and, together with Rose, went
through it for the limited purpose of making appropriate
emendations for the name of the employer and the effec-
tive date. Crediting Brown, Cerullo entered that meeting
as it was concluding, saying that Brown and Rose should
finish their business later because, as Cerullo put it, "I
need my manager." Brown thereupon replied: "Well
fine; we got all the changes we need anyhow." Brown
then told Rose (whether Cerullo was still present is un-
clear) that he would "print the contracts" and would
bring them back along with the trust subscribers' agree-
ments which he would then explain to Rose.
It is arguable, however, that the parties did not as of
that moment consider themselves to have agreed to con-
tinue the Handlery contract since Brown and Rose had a
brief exchange about modifying the "discrimination"
clause to satisfy Rose's expressed concern that WEI was
entitled to discriminate on religious grounds. While such
an interpretation is possible, I do not find it to be the
most plausible one under the circumstances. Having
agreed to specific contractual terms 40 parties are never-
theless free thereafter to mutually agree to modify them
if a particular provision proves troublesome. Brown's
willingness to talk about some innocuous modification
which would both protect the Union against charges of
being a party to unlawful discrimination while still per-
mitting WEI to exercise its legal rights under Title VII,
a" No false supposition is indulged here that Brown. Fraizer, and
Hodge testified with tape recorder accuracy regarding the events in ques-
tion If they had, it would have been an unprecedented event in Board
annals. They are credited, however, to the extent that their testimony
suggests that Cerullo used words which would lead a reasonable person
to conclude that agreement had been reached on the contract issue
39 "In many cases, of course, successor employers will find it advanta-
geous not only to recognize and bargain with the Union, but also to ob-
serve the pre-existing contract rather than to face uncertainty and tur-
moil " Burns, supra, 406 U.S at 291.
*o Since David Cerullo had been in possession of a copy of the Hand-
lery contract for a substantial period of time before takeover. I infer that
he was familiar with its provisions He never stated otherwise
WORLD EVAGELISM, INC
918 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
if any,41 to use religiously oriented hiring tests, is at least
as consistent with the latter scenario as it is with the
notion that Brown and Rose were merely engaging in
"pre-contract negotiations" in their October 3 meeting. I
regard Brown's willingness to discuss alternative "dis-
crimination language as a gratuitous, post-agreement con-
cession to Rose, rather than implying that Brown did not
believe that WEI had already bound itself to the literal
terms of the Handlery contract.4 2
Finally, Brown regularly pressed Rose, David Cerullo,
and even on one occasion, Morris Cerullo himself on the
reasons why employees in the engineers' unit were re-
ceiving less-than-contract wage rates and on the status of
the contract documents which he had earlier submitted
to Rose for signature on or about October 5. In each
case, WEI's agents merely brushed aside the questions
with promises to "look into" the situation. Eventually,
David Cerullo responded blandly to Brown's inquiry
into the status of the contract documents by saying that
WEI's attorney was "reviewing" them. Had [)avid Cer-
ullo truly believed that he had merely agreed on October
3 to begin the process of negotiations for a new agree-
ment, it would be expected that he would have sought
additional meetings with the Union, or would have sub-
mitted comprehensive written counterproposals for the
Union's consideration. Nothing like this occurred for
4 Respondent relies on the 1972 Amendment to Title Vl[i of the 1964
Civil Rights Act which, in essence, exempts all activities of any "reli-
gious corporation, association, educational institution or !,ociety" from
the Civil Rights Act's ban on religious discrimination in employment.
Equal Employment Opportunities Act of 1972 Public Law 92-261, 86
Stat. 103, 42 U.S.C. Sec. 2000(eXl)(Supp. 11I, 1972), amendirLg Sec. 702 of
the 1964 Civil Rights Act.
Before the 1972 amendments, Sec. 702 contained a mote narrow ex-
emption, to wit, only for "a religious corporation, association or society
with respect to the employment of individuals of a particular religion to
perform work connected with the carrying on by such corporation, associ-
ation or society of its religious activities...." (Emphasis supplied.)
Respondent's interpretation of the 1972 amendment as permitting it to
use religious suitability tests for hiring or retaining its operating and
maintenance engineers at El Cortez Center is therefore argably correct.
The King's Garden, Inc. v. Federal Communications Commission, 498 F.2d
51, 54 (D.C Cir. 1974), cert. denied 419 U.S. 996. By way of obiter dicta,
however, Judge Wright, for the circuit panel, stated that the amended
Sec. 702, so interpreted, "is of very doubtful constitutionality . .. [id. at
53]," "and that it" is reasonably clear that the 1972 exemption violates
the Establishment Clause . . . [Id at 54, fn. 7"; and, further, "the 1972
exemption appears unconstitutional on Fifth Amendment grounds as
well." (Id at 57.) Chief Judge Bazelon, concurring, would have decided
the constitutional issue and would have held the 1972 exemption to be
unconstitutional as violative of the establishment clause of the first
amendment. (id. at 61.)
It is clearly beyond the scope of my mission to decide issues in this
area. But the observations of Chief Judge Bazelon and Judge Wright in
King's Garden once again underscore the difficulties in accepting Respon-
dent's contention that WEI and other religious organizationi enjoy an un-
limited exemption, derived from the first amendment, fron the restric-
tions on employer conduct contained in the Act.
42 Having concluded that David Cerullo had agreed to adopt the
Handlery contract before the meeting took place between Rose and
Brown, it follows that WEI thereby waived whatever righi it might oth-
erwise have possessed to negotiate "discrimination" language tailored to
its religious status. Accordingly, my recommended Order set forth her-
einafter includes a requirement that Respondent must sign and give effect
to an agreement with the Union containing terms identical to that of the
Handlery contract, including, necessarily, its "discrimination" clause. Ob-
viously, nothing in that Order prevents the Union and WEI from mutual-
ly agreeing to substitute different "discrimination" language reflecting
WEl's rights under Title VII, if any (see fn. 42, supra) tco use religious
considerations in matters affecting employment in the engine.ers' unit.
more than 2 months after October 3. Not until December
28 did WEI's attorney finally state that there had been
no agreement by WEI on October 3 to adopt the Hand-
lery contract; and not until that date did WEI offer to
meet and negotiate the terms of a collective-bargaining
agreement. In sum, WEI's post-October 3 conduct is not
consistent with Cerullo's claim that he did no more than
agree to begin negotiations for a new contract during his
meeting with Brown on October 3 in Fraizer's office.
Accordingly, it is concluded that WEI, through David
Cerullo, agreed on October 3 to bind itself to the Hand-
lery contract. It is further concluded that, by thereafter
reneging on this agreement, and by failing to implement
its terms, WEI violated Section 8(a)(5) of the Act.
CONCLUSIONS OF LAW
1. Respondent, World Evangelism, Inc., is an employ-
er engaged in commerce within the meaning of Section
2(6) and (7) of the Act and it would effectuate the pur-
poses and policies of the Act to assert jurisidiction herein
since its unfair labor practices described below have a
tendency to lead to labor disputes burdening and ob-
structing interstate commerce.
2. The Union is a labor organization within the mean-
ing of Section 2(5) of the Act, and has been, at all times
material herein, the duly designated exclusive collective-
bargaining representative of employees within the mean-
ing of Section 9(a) of the Act in the following described
unit of employees, an appropriate one within the mean-
ing of Section 9(b) of the Act:
All engineering and maintenance employees, includ-
ing chief engineers, assistant chief engineers, one-
man plant operators, high pressure operating and
maintenance engineers, and engineer helpers em-
ployed by World Evangelism, Inc., at the El Cortez
Center, San Diego, California; excluding office
clerical employees, professional employees, guards,
and supervisors as defined in the Act.
3. Respondent became a successor employer to said
unit of maintenance and operating engineers employed at
the El Cortez Center immediately upon its October 2,
1978, acquisition and continuation of operations there
and upon its simultaneous continuation of employment in
an appropriate unit of those employees there.
4. By agreeing on October 3, 1978, to adopt the
Union's collective-bargaining agreement with Respon-
dent's predecessor, Handlery Hotels, Inc., covering said
unit of employees, but, by thereafter failing to execute
said agreement and to apply its terms to employees in
said unit, Respondent failed and refused to bargain in
good faith with the Union within the meaning of Section
8(a)(5) and 8(d) of the Act.
5. By its corollary failure to continue to confer on em-
ployees in said unit the wage and benefit levels which
those employees had enjoyed immediately prior to Re-
spondent's takeover of the El Cortez facility from Hand-
lery, as established by the predecessor Handlery agree-
ment or otherwise, all without prior notice to the Union
and affording it an opportunity to bargain thereon before
implementing such changes, Respondent failed and re-
WORLD EVAGELISM, INC. 919
fused to accord recognition to the Union as the exclusive
collective-bargaining representative of employees in said
unit, thereby failing and refusing to bargain in good faith
with the Union within the meaning of Section 8(a)(5) and
8(d) of the Act.
Upon the foregoing findings of fact, conclusions of
law, and upon the entire record, and pursuant to Section
10(c) of the Act, I hereby issue this recommended:
ORDER4 3
The Respondent, World Evangelism, Inc., San Diego,
California, its officers, agents, successors, and assigns,
shall:
1. Cease and desist from:
(a) Refusing to accord recognition to the Union as the
exclusive collective-bargaining representative of its main-
tenance and engineering employees in the unit described
above in Conclusion of Law 2 by unilaterally changing
the terms and conditions of employment in that unit
which were established and in effect immediately prior
to its takeover of operations at the El Cortez Center.
(b) Refusing to honor its agreement to adopt, execute,
and apply to employees in said unit the collective-bar-
gaining agreement in effect between the Union and
Handlery Hotels, Inc., immediately prior to Respondent's
takeover of the El Cortez Center.
(c) In any like or related manner interfering with, re-
straining, or coercing employees in the exercise of rights
guaranteed in Section 7 of the Act.
2. Take the following affirmative action which is
deemed necessary to remedy the unfair labor practices
found above and to effectuate the purposes and policies
of the Act:
(a) Confer recognition on the Union as the exclusive
collective-bargaining representative of the employees in
the unit described above in Conclusions of Law 2.
(b) Reduce to writing and sign a collective-bargaining
agreement with the Union containing all of the terms,
conditions, and provisions contained in the agreement be-
4s In the event no exceptions are filed as provided by Sec. 102.46 of
the Rules and Regulations of the National Labor Relations Board, the
findings, conclusions, and recommended Order herein shall, as provided
in Sec. 102.48 of the Rules and Regulations, be adopted by the Board and
become its findings, conclusions, and Order, and all objections thereto
shall be deemed waived for all purposes.
tween the Union and Handlery Hotels, Inc., in effect im-
mediately prior to Respondent's takeover of the El
Cortez Center, and honor its terms; including, to the
extent said Handlery agreement so requires, by executing
necessary fringe benefit trust subscription documents.
(c) Make whole any and all employees who have
worked in the maintenance and engineering unit else-
where found appropriate herein at any time on or after
October 2, 1978, for wages and benefits which they have
lost because Respondent failed to honor its agreement to
adopt and continue in effect the predecessor Handlery
agreement, with interest, on any monetary amounts due
to be computed in the manner prescribed in F. W. Wool-
worth Company, 90 NLRB 289 (1950), and Florida Steel
Corporation, 231 NLRB 651 (1977); see, generally, Isis
Plumbling & Heating Co., 138 NLRB 716 (1962), enforce-
ment denied on different grounds 322 F.2d 913 (9th Cir.
1963).
(d) Preserve and, upon request, make available to the
Board or its agents, for examination and copying, all
payroll records, social security payment records, time-
cards, personnel records and reports, and all other re-
cords necessary to analyze the amount of backpay due
under the terms of this Order.
(e) Post at its El Cortez Center facility in San Diego,
California, copies of the attached notice marked "Appen-
dix." 44 Copies of said notice, on forms provided by the
Regional Director for Region 21, after being duly signed
by Respondent's representative, shall be posted by Re-
spondent's immediately upon receipt thereof, and be
maintained by it for 60 consecutive days thereafter, in
conspicuous places, including all places where notices to
employees are customarily posted. Reasonable steps shall
be taken by Respondent to insure that said notices are
not altered, defaced, or covered by any other material.
(f) Notify the Regional Director for Region 21, in
writing, within 20 days from the date of this Order, what
steps the Respondent has taken to comply herewith.
44 In the event that this Order is enforced by a Judgment of a United
States Court of Appeals, the words in the notice reading "Posted by
Order of the National Labor Relations Board" shall read "Posted Pursu-
ant to a Judgment of the United States Court of Appeals Enforcing an
Order of the National Labor Relations Board."
WORLD EVAGELISM. NC