Star Baby Co.

678 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Esti Neiderman and Gizela Eisner , co-partners doing business as Star Baby Co. and Snow Suit, Skiwear, Leggings and In- fants' Novelty Wear Workers' Union, Local 105, International Ladies Garment Workers Union, AFL-CIO. Case No. 2-CA- 8432. January 18, 1963 DECISION AND ORDER On June 29, 1962, Trial Examiner Sidney D. Goldberg issued his Intermediate Report in the above-entitled proceeding, finding that the Respondents had engaged in and were engaging in certain unfair labor practices and recommending that they cease and desist therefrom and take certain affirmative action, as set forth in the attached Intermediate Report. The Trial Examiner also found that the Respondents had not engaged in certain other unfair labor practices alleged in the com- plaint, and recommended that these allegations be dismissed. There-, after, the Respondents and the General Counsel filed exceptions to the Intermediate Report and supporting briefs. The Board has reviewed the rulings of the Trial Examiner made at the hearing and finds that no prejudicial error was committed. The rulings are hereby affirmed. The Board has considered the Intermedi- ate Report, the exceptions and briefs, and the entire record in the case, and hereby adopts the findings, conclusions, and recommendations of the Trial Examiner only insofar as they are consistent with this Deci- sion and Order. As described more fully in the Intermediate Report, the Respondents were in the business of manufacturing infants' and children's wear. On November 22, 1961, the Union, representing a majority of em- ployees in an appropriate unit, asked the Respondents to meet for the purpose of negotiating a contract. Respondents, although not ques- tioning the majority status of the Union, refused to meet with the Union. The Respondents' employees thereupon struck and began picketing. On November 29, the husband of one of the Respondents solicited a striker to return to work and offered her, and two other strikers, a $5 weekly increase in pay. The Respondents met with representatives of the Union on November 29, and twice thereafter, but no contract was negotiated. No further meetings were held be- tween the Respondents and the Union after December 7. On Decem- ber 14, the Union filed a representation petition and a hearing was scheduled by the Regional Director for December 28. The Respond- ents appeared at the hearing and stated that on December 26 they had executed an agreement dissolving their partnership and providing for the sale of all the assets. At no time prior to December 28 did the Respondents inform the Union of their intention to go out of 140 NLRB No. 67. STAR BABY Co. 679 business. On January 11, 1962, the Regional Director dismissed the Union's petition on the ground that no useful purpose would be served by proceeding with a determination of representatives, and, on Jan- uary 15, the last piece of equipment was moved from the Respondents' plant and the picketing ceased. Toward the end of January, the Respondents notified the employees in writing that their employment had been terminated and that Respondents had discontinued their business. The Trial Examiner found that, by failing to bargain with the Union in good faith and by soliciting strikers to return to work with promises of benefit, the Respondents violated Section 8(a) (5) of the Act. The Trial Examiner further found, however, that by discon- tinuing operations, the Respondents did not violate Section 8(a) (3) because they so acted for economic reasons; i and, although conclud- ing that the strike of the Respondents' employees was an unfair labor practice strike, the Trial Examiner found that in the absence of any application for reinstatement by the strikers, the Respondents' failure to reinstate them did not violate Section 8 (a) (3) of the Act. 1. We find, in agreement with the Trial Examiner, and for the reasons stated by him, that the Respondents, by not bargaining in good faith with the Union, violated Section 8(a) (5) of the Act. We also find, in agreement with the Trial Examiner, that by soliciting strikers to return to work with promises of benefits, the Respondents violated Section 8(a) (5). Additionally, we find that the Respond- ents' soliciting of strikers to return to work constituted an independent violation of Section 8 (a) (1) of the Act.' 2. We also find, but in disagreement with the Trial Examiner, that by closing their business, thereby discharging employees, the Respond- ents violated Section 8 (a) (3) and (1) of the Act. The Trial Examiner found that the Respondents went out of busi- ness for economic reasons and therefore did not violate the Act. As found by the Trial Examiner, after the Union had asked the Re- spondents to enter into a collective-bargaining agreement observing union standards, the Respondents consulted with their customers to see if they could raise the price of their garments to make it possible for them to pay the union wage scale, and the Respondents reported to the Union that they had been unable to persuade any of their customers to pay increased prices. The Trial Examiner concluded that the Re- spondents "could not observe the Union's standards and survive" and therefore that their termination of operations was nondiscriminatory. 1 The Trial Examiner did not pass on the issue whether the suspension of operations violated Section 8(a) (5). 2 "M" System inc., Mobile Home Division, bind-States Corporation, 129 NLRB 527, 554; Fitzgerald Mills Corporation , 133 NLRB 877, 885. 680 DECISIONS OF NATIONAL LABOR RELATIONS BOARD In our view, the Respondents did not close their plant because of their asserted financial inability to pay the union wage scale.' Rather, we find, on the basis of the entire record including the Respondent's failure to deny that the decision to close their business was caused by the advent of the Union at the plant, that the Respondent decided to close the plant because they did not wish to bargain with the Union under any circumstances. In this connection, we regard as significant the fact that: just prior to the Union's demand for recognition, the Respondents had one of their most successful business seasons; a week before the strike, the Respondents granted a pay increase to one of their employees; and on November 29, while the picketing was in progress, Respondents offered pay increases to two other employees. Further, with respect to the Respondents' claim that they could not observe the union stand- ards and continue in business, we note that such claim is predicated solely on conversations that allegedly took place between Mr. Neider- man, husband of one of the Respondents and a supervisor for the com- pany, and certain of the Respondents' customers; the Respondents failed to name those customers with whom these purported conversa- tions took place or otherwise to substantiate this contention by more than vague conclusionary statements regarding these purported con- versations; the Respondents did not call upon any of the customers to whom Neiderman allegedly spoke to testify at the hearing; and the Respondents failed to adduce records or other probative testimony to support their claim that they could not pay the union wage scale. Finally, the Respondents' argument that they shut down because they could not afford a union contract ignores the possibility that if they had bargained in good faith, the union bargaining demands might have been modified so that the Respondents would have found it finan- cially feasible to reach an agreement. Indeed, as found by the Trial Examiner, the Union on December 2 agreed to delay the effective date of the contract until the following April, thus indicating some degree of flexibility and a willingness to take the Respondents' economic situa- tion into consideration in making bargaining demands. Moreover, the Respondents' contention that they went out of busi- ness for economic reasons must be evaluated against the events imme- diately preceding their decision to close the plant. Thus, as described more fully in the Intermediate Report, on November 22, when the Respondents were first approached by a union representative and asked to arrange an appointment for the purpose of negotiating a con- tract, Neiderman answered that he was not interested in talking to anyone and that he had plenty of time to think about it. On the fol- lowing day, the union representative again asked Neiderman to talk 3 we therefore find it unnecessary to decide whether in the circumstances of this case the Respondents would have violated the Act by closing their plant because they could not afford to sign a union contract. STAR BABY CO. 681 over the situation, but N eiderman answered that he would not sit down with anyone to talk about how he would run his operations. On No- vember 29, when the union business manager outlined the union's wage scale for the first time, Neiderman said that he was in no hurry to ne- gotiate a contract because his production had been completed for that season, and on December 2 Neiderman said that he would not have a_ union telling him how to run his business. It was not until the Decem- ber 2 meeting that Neiderman said that he would check with the Re- spondents' customers to see if they would be willing to pay increased prices. It is apparent, from the foregoing, that even before learning of the Union's wage scale, the Respondents had taken a stand against hav- ing a union. Indeed, the Respondents' statements to the Union to the effect that they did not want anyone to tell them how to run their- business made this crystal clear. In such a context, the conclusion is inescapable that the Respondents' decision to go out of business was not predicated on valid economic considerations but was in furtherance of the Respondents' determination to avoid bargaining with the Union, which we have already found was violative of Section 8(a) (5) of the Act. In view of these circumstances, and particularly the affirmative evi- dence that business had been good during the past season, the failure of the Respondents to substantiate their claim that they could not af- ford to deal with the Union, and the Respondents' hostility to the Union, as demonstrated by the unlawful refusal to bargain with the Union, we find, in disagreement with the Trial Examiner, that by discontinuing their business operations to avoid bargaining with the Union, thereby terminating employees, the Respondents violated Sec- tion8(a) (3) and (1) of theAct.4 3. As noted, the Trial Examiner made no findings as to whether the Respondents' conduct in terminating their operations further vio- lated Section 8(a) (5). In this connection, the record establishes that the Union represented a majority of the Respondents' employees; that the Respondents did not question the Union's majority status; and that the Respondents never discussed with the Union their decision to go out of business. We accordingly find that by unilaterally ter- minating their business operations without consulting with the Union, the Respondents further violated Section 8(a) (5) of the Act' 4 Herman Nelson Division , American Air Filter Company, Inc, 127 NLRB 939, 940; , Tabulating Card Company, Incorporated, 123 NLRB 62, 73, Harold Coldsniith et at d/b/a Superior Maintenance Company, 133 NLRB 746, 752; E S Kingsford, d/b/a Kingsford Motor Car Company, 135 NLRB 711 ; Sidele Fashions, Inc, et at., 133 NLRB 547, enfd. 305 F. 2d 825 (C.A. 3). For the reasons stated in the section entitled "The Remedy" of this Decision and Order, we further find that the Respondents effectuated the unlawful discharge of their employees on January 15, 1962 5 Town & Country Manufacturing Company, et at., 136 NLRB 1022, Fibreboard Paper Products Corporation, 138 NLRB 550. In accord with his views stated in the Town & Country case, Member Leedom would find that the Respondents violated Section 8(a) (5y 682 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Upon the basis of the foregoing, and upon the entire record in the case, we shall delete item 8 of the Trial Examiner's Conclusions of Law as set forth in the Intermediate Report, renumber conclusion 7 to read 9, and make the following : ADDITIONAL CONCLUSIONS OF LAW 7. By discriminating in regard to the hire and tenure of employ- ment of employees by closing their plant and discharging their em- ployees, the Respondents have discouraged membership in a labor organization, and by such discrimination the Respondents have en- gaged in and were engaging in, unfair labor practices within the mean- ing of Section 8(a) (3) and Section 8(a) (1) of the Act. 8. By soliciting strikers to return to work with promises of benefit, the Respondents have interfered with, restrained, and coerced the employees in the exercise of their rights guaranteed under Section 7 ,Of the Act, and have engaged in unfair labor practices within the meaning of Section 8 (a) (1) of the Act. THE REMEDY We have found that the Respondents unlawfully refused to bargain with the Union as the representative of their employees in an ap- propriate unit, a violation of Section 8(a) (5) and (1) of the Act. We shall therefore order that in the event that the Respondents, or either of them, shall resume operations, they shall, upon demand, bargain with the Union as the exclusive collective-bargaining rep- resentative of their employees, and embody any understanding reached in a signed agreement. As we have also found that the Respondents have unlawfully solic- ited strikers to return to work with promises of benefit, we shall order the Respondents to cease and desist from such conduct. We have also found that the Respondents discriminatorily closed their plant, and discharged their employees, in violation of Section 8(a) (3) and (1) of the Act. However, as the Respondents have dissolved their partnership, discontinued their operations, and dis- posed of their business assets, we shall not order them either to resume their business operation,' or to offer immediate reinstatement to the ,discriminatees. Instead, we shall order the Respondents to place those employees listed in Appendix A, attached hereto, on a preferential hiring list, notify these employees of the said list and, in the event that the Respondents, or either of them, resume operations, to offer these solely on the ground that, as the dischargees remained employees after the Respondents closed their business in violation of Section 8(a) (3), the Respondents violated Section 8(a) (5) by refusing to bargain with the Union as their representative. 9 Rudy Barber et at., d/b/a Barbers Iron Foundry, 126 NLRB 30, 33 ; at. Bonnie Lass Knitting Mills, 126 NLRB 1396, 1398. STAR BABY CO. 683 employees immediate reinstatement to their former or substantially equivalent positions without prejudice to their seniority and other rights and privileges previously enjoyed' We also believe that it is necessary, in order to remedy the unfair labor practices found herein, to award backpay to the employees discriminated against. However, as noted above, the Respondents' employees went on strike on November 22 and the strike continued un- til January 15. Ordinarily the Board does not grant backpay to strikers for the period during which they are on strike until such time as they make unconditional application for reinstatement.' While no such application was made, we find that, because the Respondents had by January 15 dissolved their partnership and disposed of all their business assets, any application for reinstatement by the discriminatees would have been futile and was therefore unnecessary.' We shall, there- fore, order that the Respondents make whole those employees discrimi- natorily laid off whose names appears listed on Appendix A, for the loss of earnings they suffered by reason of the discrimination against them by paying to each a sum of money equivalent to the amount he would have normally earned from January 15, 1962, the date upon which the Respondents completed the disposal of their busi- ness assets, thus effectuating the discharge of these employees, until such time as each secures, or did secure, substantially equivalent em- ployment elsewhere.10 Such loss of pay 11 shall be computed on the basis of separate calendar quarters, in accordance with the policy enunciated in F. W. Woolworth Co., 90 NLRB 289, and shall include an allowance of interest at 6 percent per annum to be computed in the manner set forth in Isis Plumbing c6 Heating Co., 138 NLRB 716. In making this backpay award, we are mindful of the fact that this case differs from the conventional backpay case in that here the Respondents have gone out of business completely. However, in our view, this fact does not warrant any limitation in the scope of our backpay remedy. The purpose of the Board's backpay remedy is to make employees whole for loss of earnings suffered as a. result of the unfair labor practices committed.12 We have found that the Re- spondents shut down their business and discharged employees for discriminatory reasons. It is clear, therefore, that but for the Re- spondents' unfair labor practices, their plant would still be in oper- 7 Barbers Iron Foundry, supra. 8 Liberty Electronics Corp., et al., 138 NLRB 1074. e Buzza-Cardozo, 97 NLRB 1342, enfd in relevant part, 205 F. 2d 889 (CA. 9), cert. denied 346 U.S. 923; Sea View Industries, Inc, 127 NLRB 1402; Valley Die Cast Corp., 130 NLRB 508, enfd. 303 F. 2d 64 (C.A. 6). 10 Darlington Manufacturing Company, et al, 139 NLRB 241. 11 In accordance with policy recently adopted by the Board, there shall be no tolling of backpay for the period between the issuance of the Intermediate Report and the Order herein A.P.W. Products Co., Inc., 137 NLRB 25. 12 Phelps Dodge Corp. v. N.L.R.B., 313 U.S. 177, 197. '654 DECISIONS OF NATIONAL LABOR RELATIONS BOARD ation and employees would still have jobs.13 Since the Respondents have deprived their employees of their employment, to remedy this unlawful conduct, the Respondents must make these employees whole for the wages they would have otherwise earned from the date of the discrimination until such time that the employees obtain equiv- alent employment elsewhere. The only significant difference that we can discern between the situation here and the usual backpay case is that here, unlike other types of backpay cases, since the Respondents are no longer in busi- ness, they are unable to terminate their backpay obligations by offer- ing the discriminatees reinstatement to their old jobs. But any prejudice to the Respondents deriving from this fact is solely of the Respondents' own doing. When an employer discharges an employee for discriminatory reasons, so long as he remains in business, he can, of course, reinstate the employee, and in this way end his backpay obligations. However, where, as here, the employer not only dis- charges his employees, but also shuts down his business in violation of the Act, the employer's inability to end the backpay by rehiring the employees is the direct result of the employer's own unlawful conduct in discriminatorily terminating his business. Nor do we think that the Respondents will be prejudiced because they are being ordered to continue to pay wages to employees for an indefinite period of time, the duration of which is contingent upon factors over which they have no control. The Board has always required that a dis- criminatee make good-faith efforts to minimize the respondent em- ployer's backpay obligations. Thus, if the discharged employee will- fully incurs loss of earnings by withdrawing from the labor market or by failing to seek work with due diligence, the backpay obligation is reduced or cut off entirely." Therefore, the Respondents' backpay obligations here are not of a potentially indefinite duration; it is nec- essarily limited by the requirement that the discharged employee seek other employment. The Respondents here have committed serious violations of the Act. Under all the circumstances, we believe that this backpay remedy would best bring about the "restoration of the situation, as nearly as possible, to that which would have obtained but for the illegal discrimination." 15 13 In this respect, the instant case differs from the type of cases where the record shows that even absent the unfair labor practices , the Respondents would in any event have closed their plant for economic reasons at a subsequent date See Ethel J Hinz, etc , d/b/a Myers Ceramics Products Co., 140 NLRB 232. Here, however, the Respondents have made no showing that they would have been compelled to go out of business for economic reasons at any time. 14 Ozark Hardwood Company, 119 NLRB 1130 15 Phelps Dodge Corp v N L R B, supra , see Bonnie Lass Knitting Mills , supra, Darlington Manufacturing Company, supra . For the reasons stated in Barbers Iron Foundry, supra, and in Morris and David Yoseph, d/b/a M. Yoseph Bag Company, 128 STAR BABY CO. 685 In view of the nature of the unfair labor practices committed, the commission by Respondents of similar and other unfair labor prac- tices may be anticipated. We shall therefore order that the Respond- ents cease and desist from infringing in any manner upon the rights guaranteed in Section 7 of the Act. ORDER Upon the entire record in this case, and pursuant to Section 10 (c) of the National Labor Relations Act, as amended, the National Labor Relations Board hereby orders that the Respondents, Esti Neiderman and Gizela Eisner, individually, and as copartners doing business under the name of Star Baby Co., New York, New York, their officers, agents, successors, and assigns, shall: 1. Cease and desist from : (a) Refusing to bargain collectively with Snow Suit, Skiwear, Leggings and Infants' Novelty Wear Workers' Union, Local 105, International Ladies Garment Workers Union, AFL-CIO, as the ex- clusive representative of all employees in the appropriate unit con- sisting of all production employees, including operators, finishers, cutters, shipping clerks, and floor workers, but excluding office clerical employees, professional employees, watchmen, guards, and supervisors as defined in the Act. (b) Discouraging membership in the above-named or any other labor organization of their employees by discharging any of their employees or otherwise discriminating in regard to their hire or tenure of employment or any term or condition of employment, except to the extent that such right may be affected by an agreement requir- ing membership in a labor organization as authorized in Section 8 (a) (3) of the National Labor Relations Act, as modified by the Labor-Management Reporting and Disclosure Act of 1959. (c) Soliciting strikers to return to work with promises of benefit. (d) In any other manner interfering with, restraining, or coercing their employees in the exercise of the right to self-organization, to form labor organizations, to join or assist the above-named labor organization, or any other labor organization, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of mutual aid or protection as guaranteed in Section 7 of the Act, or to refrain from any and all such activities, except to the extent that such right may be affected NLRB 211, remanded on other grounds, 294 F. 2d 364 (C.A. 3), Supplemental Decision and Order, 139 NLRB 1310. Member Leedom would find that the Respondents' backpay obligation should be cut off on January 15, 1962, the date upon which the Respondents completed the disposal of their assets, thereby terminating their business . Since Member Leedom agrees with the majority that backpay should commence on the same day, Janu- ary 15, he would not order backpay herein. 686 DECISIONS OF NATIONAL LABOR RELATIONS BOARD by an agreement requiring membership in a labor organization as a condition of employment as authorized by Section 8(a) (3) of the Act, as modified by the Labor-Management Reporting and Disclosure Act of 1959. 2. Take the following affirmative action, which the Board finds will effectuate the policies of the Act : (a) If and when the Respondents, or either of them, resume op- erations, bargain collectively, upon request, with Snow Suit, Skiwear, Leggings and Infants' Novelty Wear Workers' Union, Local 105, International Ladies Garment Workers Union, AFL-CIO, as the exclusive representative of all employees in the appropriate unit here found, and embody any understanding reached in a signed agreement. (b) Create a preferential hiring list containing the names of those individuals listed in Appendix A of this Order as being entitled to reinstatement if and when the Respondents, or either of them, resume operations, such reinstatement rights arising from the discharge of these individuals on January 15, 1962. The Respondents shall notify the Union and all said listed employees of the establishment of said list and its contents and shall offer all said individuals full reinstate- ment to their former or substantially equivalent positions without prejudice to their seniority or other rights and privileges previously enjoyed if and when the Respondents, or either of them, resume op- erations, all as set forth in the section of the Decision herein entitled "The Remedy." (c) Make whole those individuals whose names appear listed in Appendix A of this Order for any loss of pay they may have suffered by reason of the discrimination against them, in the manner set forth in the section of this Decision herein entitled "The Remedy." (d) Preserve and, upon request, make available to the Board or its agents, for examination and copying, all payroll records, social security payment records, timecards, personnel records and reports, and all other records necessary to analyze and determine the amount of backpay and the right to reinstatement under the terms of this Order. (e) Inasmuch as the posting of a notice as customarily required is not feasible, the Respondents shall mail an exact copy of the attached notice marked "Appendix B" 16 to the Union and to each of the listed employees. Copies of said notice, to be furnished by the Regional Director for the Second Region, shall, after being signed by an author- ized representative of the Respondents, be mailed immediately upon receipt thereof. 19 In the event that this Order is enforced by a decree of a United States Court of Appeals, there shall be substituted for the words "Pursuant to a Decision and Order" the words "Pursuant to a Decree of the United States Court of Appeals , Enforcing an Order." STAR BABY CO. 687 (f) Notify the Regional Director for the Second Region, in writing, within 10 days from the date of this Order, what steps have been taken to comply herewith. IT IS FURTHER ORDERED that the Board reserves to itself the right to modify the backpay and reinstatement provisions of this Order, if made necessary by circumstances not now apparent. MEMBER RODGERS, dissenting in part: In my opinion, Respondents did not violate the Act by going out of business. The Trial Examiner found that Respondents terminated their operations for economic and not for discriminatory reasons. I would affirm this finding. But even had it been shown that the termination of Respondents' operations were motivated by antiunion considerations, the cessation was nevertheless privileged. There is nothing contained in the basic Act nor in any amendment thereto which limits an employer's right to go out of business at such time and under such circumstances as he chooses. See my dissenting opinion in Darlington Manufacturing Company, 139 NLRB 241, and cases cited therein. Nor was it in- cumbent on Respondents to bargain with the Union about this priv- ileged action. See my dissenting opinions in Town & Country Manu- facturing Company, 136 NLRB 1022, and Fibreboard Paper Products Corporation, 138 NLRB 550, and cases cited therein. I would accordingly dismiss the complaint insofar as it is based on the going out of business allegation. APPENDIX A Verena Ayala Minoria Jiminez Golda Einhorn Vincenta Rivera Juana Castro Chana Sigel Paola Rinaldi Regina Winefsky Evelyn Banks Maria Rodriguez Laura Elena Sepulveda Julia Acosta Bessi Federer Clara Kampler Bella H. Reiss Mercedes Nunez Pearl Richter Grayce Parker APPENDIX B NOTICE TO ALL EMPLOYEES Pursuant to a Decision and Order of the National Labor Relations Board and in order to effectuate the policies of the National Labor Relations Act, as amended, we hereby notify you that : WE WILL, if and when we, or either of us, resume operations, bargain, upon request, with Snow Suit, Skiwear, Leggings and Infants' Novelty Wear Workers' Union, Local 105, International Ladies Garment Workers Union, AFL-CIO, as the exclusive rep- resentative of all employees in the unit described below with re- 688 DECISIONS OF NATIONAL LABOR RELATIONS BOARD spect to rates of pay, wages, hours of employment, or other terms and conditions of employment, and, if an understanding is reached, embody such understanding in a signed agreement. The bargaining unit is : All production employees, including operators, finishers, cutters, shipping clerks, and floor workers, exclusive of office clerical employees, professional employees, watchmen, guards, and all supervisors as defined in the Act. WE WILL create a preferential hiring list containing the names of the employees listed below and notify the above-mentioned Union and all said employees of the establishment of said list. WE WILL, if and when we, or either of us, resume operations, offer all said individuals immediate and full reinstatement to their former or substantially equivalent positions without prejudice to their seniority or other rights and privileges previously enjoyed. The names of the employees are : Verena Ayala Vincenta Rivera Paola Rinaldi Maria Rodriguez Bessi Federer Mercedes Nunez Minoria Jiminez Juana Castro Regina Winefsky Laura Elena Sepulveda Clara Kampler Pearl Richter Golda Einborn Chang Sigel Evelyn Banks Julia Acosta Bella H. Reiss Grayce Parker WE WILL make the individuals named above whole for any loss of pay they may have suffered as a result of their discriminatory discharge on January 15, 1962. WE WILL NOT solicit our employees to abandon a strike with promises of benefit. WE WILL NOT in any other manner interfere with, restrain, or coerce our employees in the exercise of their right to self- organization, to form, join, or assist the above-named or any other labor organization, to bargain collectively through repre- sentatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection, or to refrain from any or all such activities, except to the extent that such right may be affected by an agree- ment requiring membership in a labor organization as authorized in Section 8(a) (3) of the Act, as modified by the Labor- Management Reporting and Disclosure Act of 1959. All our employees are free to become, remain, or refrain from be- coming or remaining, members of the above-named Union or any other labor organization, except to the extent that this right may be affected STAR BABY CO. 689 by an agreement in conformity with Section 8(a) (3) of the Act, as modified by the Labor-Management Reporting and Disclosure Act of 1959. EsTi NEIDERMAN AND GIZELA EISNER, CO-PARTNERS DOING BUSINESS AS STAR BABY Co., Employer. Dated---------------- By------------------------------------- (RepreSentative) (Title) NoTE.-WWTe will notify any of the above-nalned employees presently serving in the Armed Forces of the United States of their right to full reinstatement upon application in accordance with the Selective Serv- ice Act after discharge from the Armed Forces. Employees may communicate directly with the Board's Regional Office, 5th Floor, Squibb Building, 745 Fifth Avenue, New York 22, New York, Telephone No. Plaza 1-5500, if they have any question concerning this notice or compliance with its provisions. INTERMEDIATE REPORT STATEMENT OF THE CASE The complaint herein 1 alleges that Respondents, a partnership engaged in the city of New York in the manufacture of infants' and children's wear, had refused to bargain with the Charging Party (herein called Local 105) as the representative of their em- ployees; had discriminated against their employees by discharging them and dis- continuing their business; and had restrained and coerced their employees in the exercise of their rights in violation of Section 8(a)(1), (3), and (5) of the National Labor Relations Act (herein called the Act). Respondents answered, substantially admitting the factual allegations of the com- plaint but denying that they had engaged in unfair labor practices. As an affirmative defense, Respondents alleged that the Regional Director, in dismissing Local 105's petition for an election among Respondents' employees,2 found as a fact that Re- spondents had ceased operations and pleaded that that finding deprived the Board of jurisdiction further to maintain this proceeding. Pursuant to notice, a hearing was held before Trial Examiner Sidney D Goldberg in New York, New York, on April 16, 1962, at which all parties were represented, and were afforded full opportunity to present evidence pertinent to the issues and to argue the matter orally. For the reasons hereafter set forth, I conclude that Respondents refused to bargain in good faith with Local 105 and that their refusal was in violation of Section 8(a)(5) and (1) of the Act but that their termination of operations was based upon economic considerations and was not discriminatory in violation of Section 8(a)(3). Upon the entire record in this case and from my observation of the witnesses, I make the following: FINDINGS OF FACT 1. THE BUSINESS OF THE EMPLOYER The answer admits that, for about 5 years prior to January 15, 1962, Respondents were copartners doing business as Star Baby Co., manufacturing garments for infants 1 The original charge was filed January 30, 1962, and a complaint thereon issued Febru- ary 28, by the Regional Director for the Second Region An amended charge was filed March 2 and an amended complaint thereon was issued March 12 On motion of the General Counsel at the opening of the hearing the amended complaint was further amended. 2 Case No 2-RC-11736, Decision and Order dated January 11, 1962 (not published in NLRB volumes). 690 DECISIONS OF NATIONAL LABOR RELATIONS BOARD and children; during the previous year Respondents manufactured more than $100,000 worth of goods, of which more than $45,000 worth was shipped to points outside the State of New York and more than $10,000 worth sold to enterprises engaged in interstate commerce. I find that, at the times material herein, Respondents were an employer engaged in interstate commerce. II. THE LABOR ORGANIZATION INVOLVED Snow Suit, Skiwear, Leggings and Infants' Novelty Wear Workers' Union, Local 105, International Ladies Garment Workers Union, AFL-CIO, is a labor organization within the meaning of the Act. III. THE UNFAIR LABOR PRACTICES A. The refusal to bargain, the strike, and subsequent meetings with the Union Most of the facts in this case are not in dispute. As of November 22, 1961, Re- spondents had 20 employees, including Bernat Neiderman and Meyer Eisner, the husbands of the respective partners. It was stipulated herein that Bernat Neiderman was a supervisor and that, excluding him, Respondents' employees constitute a unit appropriate for the purposes of collective bargaining within the meaning of Section 9(b) of the Act. The status of Meyer Eisner is disputed and will be discussed hereafter. Shortly before November 22, 1961, 12 of Respondents' employees applied for mem- bership in Local 105 and authorized it to act as their exclusive representative for the purpose of collective bargaining. On the morning of November 22 these employees, together with three organizers for Local 105, were gathered on the sidewalk in front of Respondents' factory when Mr. and Mrs. Neiderman arrived. Harris Zinn, one of the agents of Local 105, introduced himself and informed the Neidermans that a majority of the employees had designated the Union to act for them. Zinn said he would like to arrange an appointment for Neiderman to meet with Martin L. Cohen, business manager for Local 105. He also told the Neidermans that, if they would not negotiate, the premises would be picketed. Mr. Neiderman answered that he was not interested in talking to anyone, that he had plenty of time to think about it, and he walked away. At Zinn's direction the employees put on signs and began picketing the premises. They never went back to work there. The next morning Zinn again talked to Neiderman and urged him to sit down and talk over the situation so that the employees could return to work and Respondents could resume production. Neiderman answered that he would not sit down with anybody to talk about how he would run his operation and he walked away. Eventually, however, a meeting was arranged and, on November 29, Mr. and Mrs. Neiderman met with Business Manager Cohen of Local 105 at the Union's office. Cohen outlined the Union's standards of wages and hours in the industry and sug- gested getting the matter arranged quickly since the workers were on the street and the factory was not producing. Neiderman again said he was in no hurry because he had his production completed for that particular season and the meeting was soon over. Respondents did not, at this time or any other time, question the Union's representation of their employees. The parties met again on December 2. Once again Cohen outlined the Union's standards in the industry and showed the Neidermans a copy of its proposed con- tract. He asked them to recognize Local 105 as the representative of their employees and to sign an agreement incorporating the standards. Mr. Neiderman said he treated his workers well, that they had no need for union representation and he would not have a union tell him how to run his business. At no time did Neiderman raise any question concerning specific elements of the Union's standards but countered with a request that, since Respondents were "just beginning" in business, the Union should give them a year of "grace" during which they would make a decision whether to recognize the Union. Cohen told him that this was impossible but that, since he was in the course of a season and his production costs were set, the provisions of the union contract would be held in abeyance until after the end of the current season-about April. This offer Neiderman rejected, saying that they had to have a full year in which to make a decision or Respondents would have to go out of business. Cohen then suggested that Neiderman check with his customers and see if they would not pay the increased price required to permit Respondents to pay the union scale. At a third meeting, on December 7, Neiderman reported that he had been unable to persuade any of the customers to pay more for the product and that Respondents had no alternative but to go out of business. When Cohen repeated his offer to suspend the effectiveness of the contract until April, the Neidermans replied that they made STAR BABY CO. 691 no profit on the summer garments manufactured from January until June but that they operated during that period without profit to keep their working force together. A petition for an election was filed by Local 105 on December 14 and the Neider- mans appeared at the hearing in the Board office on December 28. They testified that on December 26 they had executed an agreement dissolving the partnership and providing for the sale of the assets of the business. They agreed that they would notify the striking employees accordingly. On January 11, 1962, the Regional Director issued a Decision and Order holding that: As the Employer has ceased operations and is in the process of liquidating its business and, as employment of its employees will be terminated in the near future, no useful purpose will be served by proceeding with a determination of representatives at this time? Accordingly, the undersigned shall dismiss the petition without prejudice to the filing of a new petition if the Employer resumes operations and a substantial and representative working force is then employed. 2 Douglas Motors Corp., 128 NLRB 307; W. P. Fuller & Company, 122 NLRB 814 About January 15, it appeared that Respondents' premises had been emptied and the picketing was abandoned. Toward the end of January the employees were notified that their employment was terminated and that Respondents had discontinued their business. B. Solicitation of strikers to return to work About a week after the strike began on November 22, Mrs. Verena Ayala, who had been employed by Respondents for about 6 years, was met near her home by Meyer Eisner, husband of Respondent Gisela Eisner. Mr. Eisner told Mrs. Ayala that, while he thought she was one of the instigators of the strike, if she would break the strike and return to work, he would raise her salary from $60 to $65 per week and that he would increase the salaries of two other experienced employees, also on strike, whom he named. When Mrs. Ayala asked about the rest of the employees, Eisner said "never mind them." Mrs. Ayala refused. Meyer Eisner did not testify. Mrs. Neiderman, Respondents' only witness, dis- claimed any knowledge of the incident and testified that her husband was the man- ager of the business and the sole supervisory employee. The evidence shows that the Respondents' business was started about 5 or 6 years earlier by these two women, while their husbands were still employed elsewhere; thereafter the women, both of whom had small children, ceased working at the factory and for some years had made only occasional visits there. Bernat Neiderman ran the office, worked at the machines, and spent a minor portion of his time away from the plant in connection with sales; Meyer Eisner did the cutting, handed out the work to other employees, did the packing, and was in charge when Neiderman was out. Each of the men drew approximately the same amount as salary 3 and their wives drew equal amounts as "owners." About a week before the strike, Mrs. Ayala asked Neiderman to raise her salary from $58 to $60 per week. Neiderman told her to ask Mr. Eisner. She then over- heard Neiderman ask Eisner whether he (Eisner) could give her $2 .more and Eisner said "yes." At the end of that week she received $60. From the foregoing it appears that Respondents were only the nominal partners and that their husbands actually operated the business as proprietors in partnership. Accordingly the Respondents, as an employer, are responsible for the conduct of Meyer Eisner. C. Respondents' defense Respondents made no effort to controvert any of the foregoing facts but denied Meyer Eisner's authority to act for them. They contend that they did, in fact, bar- gain with the Union and that their cessation of business was biased upon economic motives. The "affirmative defense" in their answer has been set forth above. D. Conclusionary findings 1. On the "affirmative defense" Respondents' "affirmative defense," based upon the Regional Director's Decision and Order in the representation case, is without substance. By its terms, that decision dismisses the petition "without prejudice" and does not purport to hold more than Neiderman drew, according to his wife's testimony, "a few pennies" more 681-492-88-vol. 140---45 692 DECISIONS OF NATIONAL LABOR RELATIONS BOARD that "no useful purpose" would be served by the Board's certification of a collective- bargaining representative for employees of a nonoperating business. It recognizes, moreover, that Respondents are individuals who continue to exist and that they can easily, if they wish, resume business. So far as this proceeding is concerned, Re- spondents' cessation of operations and disposal of their stock and machinery may affect the nature of the remedy, but the Board's power to issue an order directing them to cease and desist from any violations found and to take appropriate affiml- ative action continues unimpaired.4 2. On Respondents' refusal to bargain in good faith At no time did Respondents question either the status of Local 105 as the collective- bargaining representative of a majority of their employees or the appropriateness of the unit involved and they do not contest either in this proceeding.5 It follows, that from November 22, when Zinn first requested that the Neidermans meet with union officials and was told by Mr. Neiderman that he had "plenty of time to think about it," Respondents' refusal to bargain was unjustified and in violation of Sec- tion 8(a)(5) of the Act. When, on November 29, the Neidermans did meet with officials of Local 105, they were simultaneously engaged, through Meyer Eisner, in an effort to undermine the Union by soliciting Mrs. Ayala and, through her, two other striking employees to return to work by promises of wage increases for them alone.6 Not only was this activity a violation of Section 8(a)(5) in itself? but, taken with Neiderman's state- ments both on November 22 and at his first meeting with the Union on November 29 that he had "plenty of time to think about" meeting with the Union, justifies the inference here drawn that when they did meet with Local 105 it was not for the purpose of bargaining in good faith but to gain additional time to destroy the Union's majority.8 This finding makes it unnecessary to decide whether Respondents' lim- itation of the discussion with the Union to whether the observance of the Union's standard working conditions should be suspended until April 1962, as offered by the Union, or for a full year, as requested by the Neidermans, constituted a refusal to bargain in good faith. 3. On Respondents' cessation of operations The General Counsel does not contend, and there is no evidence to show, that Re- spondents' termination of operations was other than factually bona fide. The complaint alleges, however, that such termination was discriminatorily motivated to discourage membership in the Union and that it was effected without observance of Respondents' duty to bargain with Local 105. The evidence is insufficient to sustain these allegations. Unlike other cases in which the Board has found that a cessation of operations was designed to discourage union membership, there is no evidence here that Re- spondents threatened their employees with such action 9 Refusal of Local 105's first demand for recognition was followed immediately by the commencement of a strike and there is no evidence of any further communication between Respondents and their employees other than Meyer Eisner's effort to get Mrs. Ayala to return to work. Respondents' discussion of going out of business was with representatives of Local 105, in connection with the demand that Respondents enter into a contract observing its standards of wages and hours in the industry and providing for con- tributions to its welfare funds. During the course of these discussions the Neider- mans were requested to (and it was testified that they did) consult Respondents' cus- 4 Ray Nichols, Inc, 15 NLRB 846; South Carolina Granite Company, 58 NLRB 1448, 1466; N L R B v. Somerset Classics, Inc, 193 F. 2d 613, 616 (C A. 2, 1952). 6 Bernat Nelderman's denial that the Union represented Respondents' employees, made late in December at a conference with Board agents in connection with the representation proceeding, was based upon the assumption that, operations having been discontinued, the business no longer had employees. 9 Since Respondents' working force consisted of either 18 or 19 employees (depending upon the status of Meyer Eisner ) the return to work and abandonment of the Union by these three women would have indicated a reduction of the number of employees repre- -ented by the Union from 12 to 9; less than a majority. 7 Crater Lake Machinery Co., 131 NLRB 1106. s Joy Silk Mills, Inc., 85 NLRB 1263, enfd. 185 F. 2d 732 (C A.D.C , 1950) ; Cactus Petroleum, Inc., 134 NLRB 1254. 9 Cf Town & Country Manufacturing Company, Inc., at al., 136 NLRB 1022. STAR BABY CO. 693 tomers to see whether the prices of their garments could be increased sufficiently to permit observance of the Union's standards. The reports were negative and Respond- ents informed the Union that continued operation until April would serve no useful purpose because this period produced no profit but served only to keep their working force intact for the productive months-June to December. Respondents' organization was quite small and there is no reason to discredit Mrs. Neiderman's testimony that the business could not observe the Union's standards and survive. Accordingly, I find that, after consultation with Local 105, Respondents terminated their operations for economic and not discriminatory reasons and it will be recom- mended that the complaint be dismissed to this extent. In view of the above findings that Respondents refused to bargain with the Union in good faith, it is clear that the strike which commenced November 22 was caused and prolonged by Respondents' unfair labor practices. However, the finding that the termination of operations was not discrimmatorily motivated precludes a finding that the employees were discharged in violation of Section 8(a) (3) and (1) of the Act. Finally, no violation of Section 8(a)(3) can be found on the basis of Re- spondents' failure to reinstate their employees since the record fails to disclose the making of any application for reinstatement. 10 Accordingly, dismissal of the com- plaint of the foregoing extent will also be recommended. IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of Respondents set forth in section III, above, occurring in connec- tion with the operations of Respondents described in section I, above, have a close, intimate, and substantial relation to trade, traffic, and commerce among the several States and tend to lead to labor disputes burdening and obstructing commerce and the free flow of commerce. V. THE REMEDY Although it has been found that Respondents unlawfully refused to bargain with Local 105 as the representative of their employees in an appropriate unit, the prescription of a remedy is complicated by the additional findings that their termina- tion of operations was not discriminatorily motivated and that they are not now engaged in business. However, it would be appropriate to recommend that Respond- ents remedy their violation by bargaining upon request with Local 105' if and when they resume similar operations in the city of New York and that jurisdiction be retained to modify or clarify such recommendation in the light of any substantial change of conditions.ii Upon the basis of the foregoing findings of fact, and upon the entire record in the case, I make the following: CONCLUSIONS OF LAW 1. Prior to January 15, 1962, Respondents were engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 2. Snow Suit, Skiwear, Leggings and Infants' Novelty Wear Workers' Union, Local 105, International Ladies Garment Workers Union, AFL-CIO, is a labor organiza- tion within the meaning of Section 2(5) of the Act. 3. All production employees, including operators, finishers, cutters, shipping clerks, and floor workers, employed by Respondents at their New York plant, exclusive of office clericals, professional employees, watchmen, guards, and all super- visors as defined in Section 2(11) of the Act, constitute a unit appropriate for the purposes of collective bargaining within the meaning of Section 9(b) of the Act. 4. Since November 22, 1,961, Snow Suit, Skiwear, Leggings and Infants' Novelty Wear Workers' Union, Local 105, International Ladies Garment Workers Union, AFL-CIO, has been the exclusive representative of Respondents' employees for collective bargaining within the meaning of Section 9(b) of the Act. 5. By refusing, since November 22, 1961, to bargain collectively with Snow Suit, Skiwear, Leggings and Infants' Novelty Wear Workers' Union, Local 105, Interna- tional Ladies Garment Workers Union, AFL-CIO, in good faith as the exclusive representative of the foregoing employees, Respondents have engaged in unfair labor practices within the meaning of Section 8(a)(5) of the Act. 6. By such refusal to bargain, Respondents have interfered with, restrained, and coerced their employees in the exercise of their right to bargain collectively through 1 ° Cf. Mitchell Concrete Products Co., Inc., 137 NLRB 504. u Custom Quilting Corporation, 134 NLRB 51 694 DECISIONS OF NATIONAL LABOR RELATIONS BOARD representatives of their own choosing and to engage in concerted activities for the purposes of collective bargaining, thereby violating Section 8 (a) (1) of the Act. 7. The aforesaid unfair labor practices affect commerce within the meaning of Section 2 (6) and (7) of the Act. 8. Respondents have not engaged in the other violations of the Act alleged in the complaint. [Recommendations omitted from publication.] Local 502, International Hod Carriers, Building and Common Laborers Union of America, AFL-CIO [Cement-Work, Inc.] and Ernest Fortunato. Case No. 22-CB-356. January 18, 1963 NOTICE On November 29, 1961, Trial Examiner Owsley Vose issued his Intermediate Report in the above-entitled proceeding, and on the same date the proceeding was transferred to the Board. Thereafter, the General Counsel filed exceptions to the Intermediate Report and a supporting brief. On the basis of his findings of fact concerning the pressures of Re- spondent, Local 502, International Hod Carriers, Building and Com- mon Laborers Union of America, AFL-CIO, against Cement-Work, Inc., the Employer, to secure certain cement form stripping work, and the Employer's subsequent consequential termination of certain car- penters, the Trial Examiner, in his Intermediate Report, viewed this case as presenting all the essential elements of a violation of Section 8 (b) (2). On the other hand, the Trial Examiner considered the facts presented as also establishing a jurisdictional dispute, within the mean- ing of Sections 8(b) (4) (D) and 10(k), between the Respondent and Essex County and Vicinity District Council of United Brotherhood of Carpenters and Joiners of America, hereinafter referred to as Car- penters. The Trial Examiner concluded that the Act required that all issues pertaining to jurisdictional disputes must first be considered under Sections 8 (b) (4) (D) and 10 (k) before they could be considered as violative of any other section of the Act. Accordingly, as the Gen- eral Counsel had not followed such a procedure, the Trial Examiner recommended the dismissal of the 8(b) (2) allegations of the com- plaint. He also recommended the dismissal of certain 8(b) (1) (A) allegations of the complaint, on the ground that the conduct alleged to be violative of Section 8(b) (1) (A) was inextricably interwoven with the same jurisdictional dispute issue. The Board is of the opinion that the facts show that a jurisdictional dispute exists here, as the Trial Examiner found. The Board is of the further opinion that if Respondent's members were shown to be en- titled to the disputed work assignment, Respondent could then have asserted such right as a defense to the 8 (b) (2) and 8 (b) (1) (A) allega- 140 NLRB No. 69.