Pargament Fidler, Inc.

696 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Pargament Fidler, Inc.; and Pargament Frankel Asso- ciates, Inc. and Local 815, International Produc- tion Service & Sales Employees Union. Case 29-CA-1122 November 8, 1968 DECISION AND ORDER By CHAIRMAN MCCULLOCH AND MEMBERS FANNING AND BROWN On June, 20, 1968, Trial Examiner Harry H. Kuskin issued his Decision in the above-entitled proceeding, finding that Respondent had not engaged in the unfair labor practices alleged in the complaint and recommending dismissal of the complaint in its entirety, as set forth in the attached Trial Examiner's Decision. Thereafter, exceptions and supporting briefs were filed by Respondent and the General Counsel. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the National Labor Relations Board has delegated its powers in connection with this case to a three- member panel. 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 Trial Examiner's Decision, the exceptions and briefs, and the entire record in this case, and hereby adopts the findings, conclusions, and recommendations of the Trial Examiner with the following modifications. The Trial Examiner concluded that Pargament Frankel Associates, Inc., herein referred to as Frankel, had not refused unlawfully to bargain with the Union because he found that no demand for recognition had been made upon Frankel, notwithstanding that the latter was the successor to Pargament Fidler, Inc., herein referred to as Fidler. While we agree with the Trial Examiner that the complaint should be dis- missed, we do so because we find that the General Counsel has not established that Frankel was the successor to Fidler.' The Trial Examiner based his finding of successor- ship on several factors, including, inter alia, the following: (1) Pargament, Fidler's president, became the president of Frankel with the same salary and fringe benefits he received at Fidler; (2) Frankel's initial staff of supervisors and other personnel was I Members Fanning and Brown both find that Frankel was not the successor to Fidler , but Member Brown therefore deems it unnecessary to determine whether a demand was made upon Frankel for recognition by virtue of the earlier conversation between the Union and Pargament, while Member Fanning would additionally find that no proper demand for recognition was made upon Frankel thereby. The Chairman does not concur in his colleagues' discussion and legal conclusions concerning the successorship issue. He would find that Frankel was the successor of Fidler, but would dismiss the complaint on the ground that no demand for recognition was made on Frankel. 173 NLRB No. 102 hired from among Fidler's employees, with the same pay and fringe benefits; (3) Mr. Marvin Frankel, sole stockholder in Frankel, lent money to Pargament to wind up Fidler's unfinished business; (4) at the public auction held pursuant to the foreclosure on a chattel mortgage lien against Fidler, Mr. Frankel purchased some of Fidler's equipment; and (5) shortly after the auction Frankel began producing the same end products as Fidler and doing business with Fidler's customers. We find merit in Respondent Frankel's contention that the Trial Examiner's conclusion as to successorship is not supported by the record. In determining whether one employer is a successor to another, the Board applies the test of whether there is substantial continuity in the employing industry. And this, in turn, depends on whether the enterprise which results is substantially or essentially the same under the new ownership as before.' On the basis of the record as a whole, we are satisfied in the instant case that the resulting enterprise was not essentially the same and hence it has not been shown that there was substantial continuity of the "employ- ing industry." As more fully set forth by the Trial Examiner, in 1967 Fidler's operations consisted of a silk screen department, an art department, and a shipping and packing department, which possessed all necessary equipment and performed all production work re- quired for the manufacture of commercial signs, displays, and posters, except that the printing was subcontracted. As a result of financial difficulties in the spring of 1967, Fidler assigned all its accounts receivable to a factor, who thereafter foreclosed the chattel mortgage lien on the fixtures and equipment. Fidler's assets were ordered sold at public auction, and on August 16 the sale took place. Mr. Frankel purchased certain of the equipment, which consisted of only a small part of the assets of Fidler, and of these, only the silk screens and the Baum folder (with attachments) might be classed as machines necessary to the production of Fidler's end product.' However, those machines were not suf- ficient for production, standing alone, and Frankel did not buy other equipment, such as racks utilized in the silk screen process or any of the printing equipment other than the folder. The purchases were moved to the building where Olympic Litho was lo- cated4 and Frankel began to sell and distribute the same type of commercial signs, displays, posters, and related products as had Fidler. However, although 2 West Suburban Transit Lines, Inc, 158 NLRB 794, 797. 3 In addition Frankel purchased cabinets , files, office machines, lamps, desks, scales , a metal saw, a lift truck , an automobile, and a station wagon . Such equipment , however, is not necessarily peculiar to Fidler's business and its use is not particularly helpful in determining the continuity of the essential nature of the employing enterprise 4 As more fully set forth in the Trial Examiner's Decision, from the time prior to his dealings with Mr Pargament , Mr. Frankel was engaged in his own printing business known as Olympic Litho. PARGAMENT FIDLER Frankel continued to have its own art department and shipping and packing facility, it did none of the other production work itself. The silk screen process was subcontracted to other firms, with the silk screens purchased at the auction being used where possible, while the printing and folding work was done by Olympic Litho. Further, although Pargament was named as president of Frankel and managed its operations, all financial control and final authority to make decisions concerning Frankel's business was lodged in Mr. Frankel. Although Mr. Frankel had come to know Mr. Pargament shortly before that sale and had entered into an arrangement whereby a new company would be set up and would employ Pargament to operate a business producing the same end product as Fidler had been making, it is clear that Mr. Frankel was seeking to enlarge his printing business, that is, Olympic Litho, and the transfer was a bona fide business transaction. With respect to the employee complement, of Fidler's total staff of 31 persons immediately before the foreclosure, 23 had been in the bargaining unit. A total of only 10 went to work for Frankel, of whom 4 had been in the Fidler unit and comprised the unit at Frankel. These employees were engaged in the art work and shipping and packing, since all other functions were being subcontracted to other firms. Within a few months, 4 of the 10, including one of the artists in the bargaining unit, had left Frankel's employ. Under all the circumstances, we are persuaded that Frankel is not the successor to Fidler. Although Frankel was engaged in selling the same end product as had Fidler and had the same customers,5 its business was conducted at a different location, in a different fashion, with a small group of employees which no longer represented the range of skills necessary for all phases of the manufacturing process. While the principal owner of Fidler managed Frankel's operations, he possessed no ownership or final control of Frankel. Finally, it is clear that Mr. Frankel's primary purpose in dealing with Pargament and purchasing Fidler's equipment was to enhance and enlarge his printing business.' Thus, Frankel cannot be said to be either the disguised continuance of the predecessor' or the unchanged continuation of Fidler's business under different ownership.' Accordingly, we find that Frankel did not succeed to Fidler's obligation to recognize and bargain with the Union as the representative of the employees, and we shall dismiss the complaint in its entirety. ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor 697 Relations Board hereby orders that the complaint herein be, and it hereby is, dismissed in its entirety. 5 Pargament answered in the affirmative the question whether at Frankel he had the same customers as at Fidler , but it does not appear whether Frankel served only former Fidler customers or secured other accounts in addition , and there is no indication whether all of Fidler's customers continued to use Frankel 's services. 6 We see no other significance in the fact that the facilities of Olympic Litho were made available to Frankel when the newly purchased equipment was moved to the new location or that Frankel used the old Fidler forms. 7 Cf Intergraphzc Corporation of America , 160 NLRB 1284. 8 Cf. Webster Wood Industries, Inc and/or West Virginia Woods, Incorporated, 169 NLRB No. 14 (TXD), West Suburban Transit Lines, Inc, supra , at 796-798. TRIAL EXAMINER'S DECISION STATEMENT OF THE CASE HARRY H. KUSKIN, Trial Examiner: This case was heard at Brooklyn, New York, on March 18, 19, 20, and 21, 1968. A complaint, which was amended during the hearing, issued herein on December 29, 1967,' presenting the questions of whether Pargament Fidler, Inc., herein called Respondent Fidler, and Pargament Frankel Associates, Inc , herein called Respondent Frankel, each violated Section 8(a) (5) and (1) of the Act 2 More particularly, the complaint, as amended, alleges that Respondent Fidler, in violation of Section 8(a) (1) and (5), has failed and refused to do the following: (1) to notify, negotiate and bargain with Local 815, International Pro- duction Service & Sales Employees Union, herein called the Union, concerning the relocation of its New York City plant in Brooklyn, New York, and its continuance of operations as Respondent Frankel; (2) to negotiate with the Union con- cerning the effects on the production employees represented by the Union at Respondent Fidler's New York City plant of its decision to discontinue its operations at its New York City plant, among which effects were the payment of severance pay and vacation pay owing to these employees under the terms and conditions of an existing collective bargaining agreement between Respondent Fidler and the Ur,ion; and (3) to transmit to the Union moneys deducted by it as dues from the wages of its employees represented by the Union. And, as to Res- pondent Frankel, the complaint, as amended, alleges that, although requested by the Union to do so since on or about August 1, 1967, it has (1) refused to recognize and bargain with the Union as the collective bargaining representative of its 1 All dates mentioned hereinafter are in 1967, unless otherwise indicated. 2 The charge herein was filed on October 10, 1967. Both Respond- ent Fidler and Respondent Frankel deny that the charge was served upon them Service of the charge was by registered mail and a return post office receipt of such service is in evidence. Neither Respondent denies the authenticity of the return receipt. In accordance with Section 11(4) of the Act which provides that "the return post office receipt" of a charge served by registered mail "shall be proof of service of the same," I find that the General Counsel has met the service requirements of the Act and that the above contention of both Respondents is lacking in merit. See N.L.R.B. v. Arthur J. Wiltse d/bla The Ann Arbor Press, 188 F 2d 917 (C.A. 6), N.L.R.B. v O Keefe & Merritt Mfg. Co., 178 F.2d 445 , 447 (C.A. 9), see also Section 102.111 of the Board's Rules and Regulations , Series 8, as amended 698 DECISIONS OF NATIONAL LABOR RELATIONS BOARD production employees at the Brooklyn, New York plant, a majority of which employees had been employed by Respon- dent Fidler at its New York City plant, and (2) failed and refused to honor and give effect to the above-mentioned agreement between Respondent Fidler and the Union Respon- dent Fidler admits that there may be some money due to "former employees" as severance pay and some money due to the Union as dues and for employee pensions, payment of which was not made due to economic conditions; however, it denies that it engaged in any of the unfair labor practices alleged herein Respondent Frankel also denies that it engaged in any of the unfair labor practices alleged herein. And as an affirmative defense, Respondent Frankel asserts that the Union never requested recognition as the exclusive bargaining agent of its employees in an appropriate unit, never represented a majority of the employees in such a unit, and never demanded that it recognize the collective bargaining agreement claimed to have been entered into between the Union and Respondent Fidler-an agreement which it was under no obligation to recognize Upon the entire record, including my observation of the witnesses, including their demeanor while on the witness stand, and after due consideration of the briefs of the General Counsel and Respondent Frankel, I make the following. FINDINGS OF FACT I THE BUSINESS OF RESPONDENTS The complaint, as amended, alleges, and Respondent Fidler does not deny, that it is a New York corporation, that, at all times material and until on or about August 16, 1967, it maintained its principal office and its plant at 307 Canal Street, New York City, where it was engaged in the manufac- ture, sale, and distribution of commercial signs, displays, posters, and related products, dud that during the year ending August 16, 1967, it sold and distributed from this plant directly to points outside the State of New York manufactured products valued in excess of $50,000. The complaint, as amended, further alleges, and Respon- dent Frankel does not deny, that it is a New York corporation, that at all times material and since on or about August 22, 1967, it maintained its principal office and place of business at 116 Nassau Street, Brooklyn, New York, where it is engaged in the manufacture, sale and distribution of signs, displays, posters and related products, and that during the period since on or about August 22, 1967, which is representative of its annual operations generally, it sold and distributed from this plant directly to points outside the State of New York manufactured products valued in excess of $50,000. I find, upon the foregoing, that Respondent Fidler and Respondent Frankel are each engaged in commerce within the meaning of the Act. II. THE LABOR ORGANIZATION INVOLVED Local 815, International Production Service & Sales Em- ployees Union , is, I find, a labor organization within the meaning of Section 2(5) of the Act. III. THE ALLEGED UNFAIR LABOR PRACTICES A. Background3 Respondent Fidler started in business more than 35 years ago. It has been engaged over the years in the processing of customer orders for signs, displays, pamphlets, and circulars, inter aka, from the initial stage through the delivery stage and has been known in the trade as an integrated shop Its operations have included (1) a printing department with such equipment as a printing press, a camera, a plate making machine and a photostat machine, (2) a silk screen depart- ment, including a screen shop which made the physical screens, spray booths and spray equipment, and drying racks-,4 (3) an art department which did the art work needed for the silk screens and for the platework to be used in filling customer printing orders and for the advertisements to be placed in newspapers by its customers, and (4) a shipping and packing department. A significant aspect of its business, most of which was with customers in the dry cleaning industry, involved the sale of premiums Thus, it would buy such items as glasses, knives, beachballs, etc., and sell them to its customers for use as giveaways in connection with circulars or other forms of publicity ordered by such customers from it. About 1963, Respondent Fidler stopped doing its own punting and subcontracted this work, however, the printed matter was then returned to it for folding. This altered somewhat Respondent Fidler's status as an integrated shop. During recent years the regular employee complement has consisted of between 33 and 40 employees. In addition to Harry Pargament, who is its president and took an active part in its day-to-day operations, there were three supervisors, namely, Glassman, Wolters and Herring, and the head book- keeper, a Mr. Plimack. Glassman was in charge of purchasing premiums and of expediting orders in the hands of subcontrac- tors, and had authority to act independently in these respects, he was, as Pargament indicated, Pargament's "right hand " Wolters and Herring were supervisors of production and had the authority to hire and discharge employees And it would appear that Plimack functioned as the office manager B. The Critical Events Which Followed Respondent Fidler's Business Difficulties In 1967 During April and May of 1967, according to Harry Pargament, the volume of business went into a decline with the result that Respondent Fidler was in "very bad" financial condition and found it necessary, in order to generate working capital, to assign all of its accounts receivable to Branerton 3 The testimony of all the witnesses herein, including that of Harry Pargament, who was called by the General Counsel as a witness under Section 43 (b) of the Federal Rules of Civil Procedure , is, for the most part , unrefuted. My findings hereinafter are, unless otherwise indicated, predicated on such unrefuted testimony . In the case of Pargament, his unrefuted testimony was, at times, uncertain and, at other times, shifting and inconsistent . I have therefore relied, with respect to him, upon what I believe to be his credible testimony. 4 The paper signs and displays ordered by customers were often done by the silk screen method , and, in those instances where printing was required , the punting press was utilized. PARGAMENT FIDLER Company, a factor.' Thereafter, business became progressively worse and Respondent Fidler was unable to raise additional moneys to meet the demands of the factor In consequence, the factor foreclosed his chattel mortgage lien on the fixtures and equipment of Respondent Fidler, and these fixtures and equipment were ordered to be sold at public auction The details of the auction were thereafter advertised by the auctioneer in the New York Times on August 10, 13, and 15, and the auction was held on August 16 Among those who made purchases at the auction was one, Marvin Frankel, who is the principal and only stockholder in Respondent Frankel, the other respondent herein. (As appears hereinafter, in greater detail, on August 10 or 11, about a week before, Frankel had entered into an agreement with Harry Pargament whereby provision was made for the creation of Respondent Frankel and for Harry Pargament to be president thereof and to assume the principal role in its operation.) Frankel's purchases consisted of cabinets, files, office machines, lamps, desks, scales, a metal saw, a Baum folder, including attachments, a lift truck, the right title and interest in a 1967 Buick Wildcat automobile and a 1967 Pontiac station wagon, and about 1000 to 1200 silk screens, which screens were sold as a single lot As will appear hereinafter, the General Counsel attaches some significance in establishing a violation herein to purchase at the auction of the two automobiles, the lot of silk screens and the Baum folder and their use thereafter in connection with Respondent Frankel's operations at 116 Nassau Street in Brooklyn. In this connection, it would appear that Frankel did not buy the racks or other equipment utilized'in the silk screen process and bought none of the printing department equip- ment, except the Baum folder When business volume began to decline, Respondent Fidler reduced its employee complement somewhat Instead of regular complement of about 40 employees, Respondent Fidler had as of the payroll week ending June 14, 31 employees, in all, consisting of 23 employees in the bargaining unit represented by the Union and 8 nonunit employees 6 As June and July were vacation months, the actual working force was substantially less during these months June was also the month in which Respondent Fidler decided that it could not continue in business as theretofore. On June 25, it placed an advertisement in the business opportunity section of the New 5 Apparently, Respondent Fidler had theretofore been assigning some of its accounts receivable to Branerton. 6 The reduction in force occurred through layoffs and quits. 9 At that time and at all times material herein, Frankel was the sole stockholder of Olympic Litho, a company engaged mainly in the offset printing business at 116 Nassau Street Frankel and his wife were officers and directors of Olympic Litho, and his father was the treasurer Frankel was seeking printing work for Olympic Litho. 8 By the middle of July, Branerton Company had advised Respond- ent Fidler that it was going to foreclose the chattel mortgage on the latter's fixtures and equipment. 9 One item of their discussion , I find, concerned what significance to any business arrangement was the fact that Respondent Fidler operated a union shop, whereas Frankel operated a nonunion shop at Olympic Litho. Pargament testified variously ( 1) that the discussion was limited to a disclosure by Frankel and him of the union or nonunion status of their respective businesses and (2) that the discussion was more comprehensive and involved an inquiry by Frankel as to whether the Union at Respondent Fidler would have to follow Pargament in any business arrangement they were to make. As to this matter, Frankel testified that he did not ask Pargament whether it would be possible to get his business over without taking on the Union. I am persuaded, however, from my observation of Pargament and Frankel on the stand, and from the inherent probabilities of the situation , that the more comprehensive discussion took place. 699 York Times, saying, "large silk screen shop doing about one-quarter Million business for sale or merger with responsible party, Box 3531 Times " According to Harry Pargament, he "wasn't thinking of going out of business. He was either thinking of raising some funds or finding a partner or merging with someone " About the same time , Marvin Frankel was advertising in a trade magazine "for a broker or someone that did printing and could use his services "' It is not clear whether Pargament and Frankel met in consequence of one or both of these advertisements or through mutual friends. However, their first contact was on the telephone and this, in turn, led to a series of meetings beginning in early July and ending on August 10 or 11 The substantive result of the first such meeting was an arrangement between Pargament and Frankel to have Olympic Litho do a printing job for respondent Fidler At subsequent meetings, Frankel made unsuccessful attempts to obtain more printing work from Respondent Fidler for Olympic Litho In addition, there surfaced in the discussions the fact that Respondent Fidler was in financial trouble and that Pargament was seeking to make a business arrangement with Frankel and thereby resolve his financial difficulties.8 Frankel, after ex- changing information with Pargament as to their respective operations, eschewed having any part in Respondent Fidler and indicated that if he was going to put up any money, he was going to put it into his own business.9 These discussions eventuated in (1) an agreement between Pargament and Frankel, dated August 10, which Frankel denominates as "a sales agreement where I hired Pargament to be a salesman"' 0 and (2) a loan of $2500 from Olympic Litho, of which Frankel was the sole owner, to Respondent Fidler to be used by the latter to wind up pending work orders, which loan was secured by a chattel mortgage dated August 10, on Respondent Fidler's accounts receivable 1 1 The August 10 "sales agreement " provided, in effect, as follows. (1) Frankel, in reliance upon the representations by Pargament that he has experience in silk screen printing, premium, display card, display advertising and printing busi- ness and that he has a large clientele among the users of these products, was to make an investment and organize a corpora- tion which was to engage in said business. 10 Pargament fixed the time when he knew that he had arrived at an understanding with Frankel variously at "about the 8th" of August and "about a week prior to the time of the auction ," which occurred August 16 Frankel testified, in this connection, that , after the meeting with Pargament on August 1, Pargament and he had a telephone conversation in which Pargament appealed for assistance with Respondent Fidler's financial problems , that he told Pargament that he "would not be interested in doing anything with Fidler, having any part of it," but that he would speak to his counsel and see if he could come up with something , that a meeting was then arranged , and that such meeting took place on August 10 and the discussions resulted in an agreement between Pargament and him either that day or the next day. 11 Thereby, Frankel , in effect, assured the continued functioning of Respondent Fidler until the time of the auction (as appears hereinafter, Respondent Frankel began operations within several days of the auction). While there is testimony by Rutigliano that , sometime before the auction , Frankel came to Respondent Fidler's shop and gave Glassman a quantity of brown envelopes of the type used for payroll purposes , one of which contained Rutigliano's pay for the most recent payroll period , I am unable to find, in the light of Frankel's denial that this ever happened and the fact that such a step would have been inconsistent with the above loan which was intended for use by Respondent Fidler for payroll purposes , etc , that this incident ever occurred. Therefore, I do not credit Rutigliano in this respect. 700 DECISIONS OF NATIONAL LABOR RELATIONS BOARD (2) The corporation to be organized was to be called Pargament Frankel Associates, Inc., and he, Frankel, was to be the sole director and stockholder and would elect Pargament as president, Frankel's wife as secretary, and Frankel's father as treasurer (3) When organized, Pargament Frankel Associates, Inc., was to assume all rights, benefits and obligations of the agreement and Pargament was to devote all his knowledge, skill, experience and working time exclusively to the business and in the interest of Pargament Frankel Associates, Inc. (4) The agreement was for a period of one year from August 14, 1967, and Pargament was to be paid $300 a week as compensation for his services, which were to include selling for, supervising and managing, said business, subject to the control of Frankel who was to have the final say on operations and policy; in addition to the above weekly compensation, Pargament was to be furnished with a family plan Blue Cross-Blue Shield policy and an automobile at the expense of the business, was to reimbursed for all expenses incurred on behalf of said business, and was to receive specified sick leave and vacation benefits.1 2 (5) Unless "the parties gave notice to the other" at least 30 days prior to August 14, 1968, the expiration date of the agree- ment, of an intention to renew the agreement, the said agree- ment as well as their relationship to each other was to terminate. As already indicated, on August 16, Frankel appeared at the auction sale of Respondent Fidler's fixtures and equipment which was held on the latter's premises at 307 Canal Street, New York City, and made the purchases listed above Thereafter, on August 19, Respondent Frankel began opera- tions at 116 Nassau Street, Brooklyn. At that time, Olympic Litho was occupying one half of the seventh floor of the building and was subleasing the other half to a tenant Due to the space problem, which was relieved on September 15 or thereabouts by the vacating of the subleased premises, Re- spondent Frankel was lodged in the office of Olympic Litho, a space about 40 feet by 20 feet, which Olympic Litho made available to it. After the sublessee had vacated, Respondent Frankel occupied about half of the space so vacated, or about 50 feet by 25 feet, and a partition separating it from Olympic Litho was erected. The nature of Respondent Frankel's actual operations and of its employee complement will be discussed hereinafter. With respect to the status of Respondent Fidler's operations just prior to the auction sale of August 16, the record shows that, around July 21, Pargament called his employees together and told them that he was closing down the business.' 3 At that time there were about 23 employees in the unit represented by the Union During the period from July 21 to August 16, the actual working force was considerably re- duced.14 There were about nine unit employees at work for the payroll period ending August 2; about eight unit employ- 12 Pargament's salary and fringe benefits under the agreement with Frankel were virtually the same as the salary and fringe benefits which he had been enjoying theretofore. 13 In this connection , employee Rutigliano , a layout man, testified that when he left on his vacation on July 21, he did not expect to be working for Respondent Fidler thereafter. 14 Some employees , although not actually working, were still in employee status because they were then on their paid vacations. 15 It would appear that he was on vacation during Respondent Fidler's last payroll period. 16 Kries and Bachner continued with Respondent Frankel as salaried employees. The two salesmen on commission at Respondent Fidler did not continue with Respondent Frankel. ees at work for the next payroll period ending August 9; and about six unit employees at work for at least part of the last payroll period ending August 16. In the last mentioned group of unit employees were Dennis, Germano, Mangual, Sterneski, Rogers and Rutigliano. Of these, Sterneski worked through August 11, Mangual worked 3 days, and Germano, Dennis and Rutigliano worked a full week. According to Rutigliano, he was the only one who worked at his trade for that entire week, the others were packing things, moving things and doing miscellaneous jobs Among the nonunit employees at work through the last payroll period were Supervisors Glassman, Herring, and Wolters, Head Bookkeeper Plimack, and salesmen Kries and Bachner It is clear that the initial complement of Respondent Frankel came from Respondent Fidler's personnel. Thus, the complement consisted of Rutigliano, the layout man, Nadeau' S and Sterneski, the artists, Eugene Rogers, the delivery man, Gloria Spencer, the office girl, Kries and Bachner, the salesmen,' 6 Fred Wolters, the supervisor, and Glassman, the general manager. Together with Pargament, the initial complement totaled 10 and all of them continued doing the same type of work as at Respondent Fidler 17 With respect to his transition from employment by Respondent Fidler to employment by Respondent Frankel, Rutigliano testified, as I have indicated, that when he left on his vacation on July 21, he did not expect to be working for Respondent Fidler any more However, he came back early in August at the insistence of Glassman, who telephoned him at his home and told him that Harry Pargament "had found a backer" and that there would be work for him, whereupon, he returned to work at 307 Canal Street, finished some old orders and worked on some new orders that drifted in before August 16, and then sometime shortly thereafter he went over to 116 Nassau Street and continued doing the same kind of work.' 8 In this connection, the record shows that Olympic Litho rather than Respondent Frankel hired Germano after the auction sale, but that Germano continued doing the same type of work; i.e., operating the Baum folder,' 9 the cutter, and the printing press According to Harry Pargament, Olympic Litho did most of the printing and folding required by Respondent Frankel on a reimbursable basis, also according to him, Germano spends most of his job doing work that originates at Olympic Litho An analysis of the initial complement of Respondent Frankel, in light of the above, shows that Respondent Frankel, like Respondent Fidler (i e since about 1963) did not do its own printing work; did have an art department, and did have a shipping and packing facility. Unlike Respondent Fidler, it did not have a silk screen department with such component parts as a shop which made the physical screens, spray booths and spray equipment and drying racks, it did, however, own the 1000 to 1200 silk screens which had theretofore belonged to Respondent Fidler and which Frankel had purchased at the 17 As of the time of the hearing the employee complement was smaller due to the fact that Sterneski , Glassman, Kries , and Bachner had left According to Pargament, the entire work force consisted of two art department employees,, the delivery man, Supervisor Wolters, and himself. 18 The record shows that Rutigliano stayed on at 307 Canal Street for a few days after the date of the auction , because he needed, in connection with his work , the long work table at Respondent Fidler's premises which had not yet been moved. 19 This machine was purchased by Frankel at the auction sale and placed thereafter in the portion of the 7th floor at 116 Nassau Street, Brooklyn, occupied by Olympic Litho. PARGAMENT FIDLER 701 auction And whenever there was a need for one of these screens because a former customer of Respondent Fidler wanted that screen used on an order placed with Respondent Frankel, the screen was sent along to the subcontractor to whom the work was given by Respondent Frankel 2 0 It would appear also that Respondent Frankel has been taking new orders from customers requiring the silk screen process and has then subcontracted the work. The nature of the business of Respondent Frankel and Harry Pargament's connection therewith is disclosed, in part, by General Counsel's Exhibit 10, in evidence. The latter is an advertisement placed by Respondent Frankel in the "Dry Cleaners News," a trade newspaper, in December 1967, reminding the readers "once again" of Harry Pargament's affiliation with Respondent Frankel and that the latter was offering a "complete advertising service featuring sales promo- tions, premiums, displays, printing, silk screen and our own art staff." The advertisement detailed that this complete service can provide "circulars, mailers, coupons, price signs, counter cards, window and truck signs and a host of other attention getting devices " It is apparent from the above advertisement that other similar notices had preceded this one. And although Pargament denied that this was so, his prehearing statement to a Board agent, which is in evidence as General Counsel's Exhibit 5, and bears the date of October 25, refutes such denial. I am cognizant, in this connection, that when Pargament's attention was called to the sentence therein which reads, "I sent my customers notice that I was now doing business as Pargament Frankel," he indicated that he was there referring to General Counsel's Exhibit 10 However, since General Counsel's Exhibit 5 antedated this latter exhibit by about 2 months, it is evident, and I find, that his prehearing affidavit underscores that fact that the advertisement in the Dry Cleaners News in December was preceded by other similar notices to the trade of Pargament's association with Respond- ent Frankel and of the type of business being conducted by Respondent Frankel. The General Counsel introduced considerable testimony to the effect that, in subcontracting silk screen work, and other business when needed, to outside vendors, Respondent Frankel was still using at the time of the hearing herein the same vendor forms for placing orders with subcontractors as were used by Respondent Fidler in such situations. As to this, Pargament explained that, although these vendor forms were not purchased by Respondent Frankel from Respondent Fidler, they were used because "[he] didn't want to see all these order blanks go to waste and [he] didn't feel that it would be a mark against [Respondent Frankel] for using the order blanks that were available." In adapting these forms for use by Respondent Frankel some employees have scratched out the name "Pargament Fidler Inc." thereon and have written in "Pargament Frankel Associates, Inc.," while, in the case of Rutigliano, the only change he has made has been with respect to the return address to which the completed order was to be sent As to the latter, the parties stipulated that, notwithstanding that Rutigliano would send out purchase orders on forms to two specific subcontractors in the silk screen business, which forms did not have the words "Pargament Fidler Inc.," crossed out, the subcontractors involved would bill Pargament Frankel Associates, Inc , for their services. That there was no haste to discard these vendors forms is apparent from the testimony of Marvin Frankel that he had prepared a new vendor form before the onset of his protracted illness which kept him away from work from November 1967 until shortly before the hearing and that a final form to be printed by Olympic Litho had not as yet been approved by him. I note, also, in this connection, that Rutigliano testified, without contradiction, that an interde- partmental form which had been used by Respondent Fidler was still being used by Respondent Frankel in processing orders within its own shop and in ordering work to be done for it by Olympic Litho. I have heretofore referred to the fact that Respondent Frankel occupies the premises on the same floor with Olympic Litho, separated from the latter by a partition21 and that Olympic does most of the printing and folding for Respondent Frankel on a reimbursable basis It is also clear that Respond- ent Frankel and Olympic Litho share the services of their respective office help Thus, Olympic Litho's bookkeeper, identified in the record as Pauline, writes checks occasionally for Respondent Frankel and checks the latter's bills; she also directs one, Lillian, Respondent Frankel's part-time book- keeper, as to what to do.22 Lillian's services, like those of Pauline, are available to both Olympic Litho and Respondent Frankel as needed. It would appear that Olympic Litho does not pay for Lillian's services and Respondent Frankel does not pay for Pauline's services In addition, Respondent Frankel's office secretary (Gloria Spencer started in this job, but left after several weeks and was replaced) occupies the same office with Olympic Litho's secretarial help In addition to answering Respondent Frankel's telephone, she also answers Olympic Litho's telephone, and Pauline of Olympic Litho acts as her relief on the telephone. 23 C. The Course of Bargaining During 1967 and Prior Thereto Respondent Fidler has been in collective-bargaining rela- tionship with the Union, or the Union's predecessor, concern- ing its production employees for about 15 or 16 years. The most recent agreement is for a 3-year period ending September 20 Although Frankel testified that, to the best of his knowledge, the screens have not been so used , he admitted that Pargament would make the decision as to whether to give a screen to a subcontractor. And Pargament testified that "There's been maybe one or two occasions we were able to use some of the screens but mainly we used very few of them." 21 During the first month or so of Respondent Frankel's existence, as I have already found, Olympic Litho made available to Respondent Frankel , for the latter's operations, its enclosed office which was 40 feet by 20 feet. Harry Pargament testified , in this connection , that he did not know whether Respondent Frankel paid rent to Olympic Litho for these premises. 22 Lillian was hired particularly to take care of Respondent Frankel 's books and records which are separate and apart from those of Olympic Litho. 23 It appears that telephone service for Respondent Frankel was not installed until September 13, the delay having been occasioned , at least in part, by a strike among telephone installers of the New York Telephone Company Calls for Respondent Fidler were at first received at Capital Poster Service, a mail order service company owned by Pargament, and the caller was given Olympic Litho's number. Respond- ent Frankel concedes that, during this period , it gave Olympic Litho's telephone number to its customers should they wish to make return calls After the telephone was installed at Respondent Frankel, the caller was given that telephone number. In this connection , the parties stipulated that at least since March 13, 1968, upon dialing the telephone number of Respondent Fidler, the telephone operator of the New York Telephone Company intercepted the call to say that the number had been changed, spelling out the number of Respondent Frankel. 702 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 10, 1968, the agreement covers all of Respondent Fidler's employees engaged in "Production (Art Department-Printing Depart 24 and Silk Screen Department) and Shipping and Packing." Among the provisions of this agreement adverted to herein are a clause setting the normal workweek at 35 hours, a union-security clause, a pension plan clause, a clause requiring Respondent Fidler to deduct union dues and initiation fees from employee wages upon being furnished with employee authorization therefor, a clause requiring payment of severance pay to an employee with 5 years or more of service, who leaves the employ of Respondent Fidler for any reason whatsoever, and a clause as to the scope of the agreement. As to the latter, article 2 provides as follows This agreement shall apply to the establishments now owned, maintained, operated and/or controlled by the Employer, and/or any new establishment that the Employer may own, maintain, operate and/or control at any time during the term of the agreement.2 5 With particular reference to the last 3 years, or so, the record shows that the Union struck, upon the expiration of the prior agreement, for increased wages and fringe benefits, and over the duration of the work week, with the Union insisting on the 35-hour work week as theretofore, and Respondent Fidler wanting a longer work week 26 The Union prevailed on the duration of the work week and gained a wage increase, inter alia Since the current agreeement has been in effect, there have been no walkouts by the Union; however, the Union has had to approach Respondent Fidler from time to time because of delinquencies in its payment of pension monies and in remitting union dues deducted from employees' wages, and also because of Respondent2 7 Fidler's demands that the men work overtime 28 In this connection, I credit Postman's tesitmony, over Pargament's denial, that after the 1965 contract went into effect, Pargament told him he "can't live with the 35 hour week " I also credit Postman's testimony, over Pargament's denial, that there were a number of times when he threatened to "pull a strike" because of delinquencies in remitting dues and pension monies to the Union and that Pargament would then assure him that the monies would be paid and ultimately they were paid 2 9 The last delinquency incident occurred on or about August 1, 1967. Postman testified, in this connection, as follows He received a telephone call from the shop steward at Respondent Fidler's to the effect that there was a problem with manage- ment over vacation pay. He appeared at the plant and met with Pargament on the matter He was then told by Pargament that Respondent Fidler was going out of business. 0 At this, he reminded Pargament of the dues and pension money arrearages owing to the Union and of the severance pay which would be due to the employees, and Pargament assured him that he 24 As already found , there was little, if any, printing work performed by Respondent Fidler during this contract period due to the fact that it was subcontracting such work and had the printed material returned to it for folding. 25 By virture of this clause, the agreement was extended by the parties to a subsidiary business , called "Timely Service," in which Pargament had a 50 percent interest , and to the heretofore mentioned mail order service business, called "Capital Poster Service," in which Pargament was the sole owner and principal stockholder. This latter company had one employee who was covered by the agreement , as mail orders received from the dry cleaning industry and from others for signs, posters , circulars , displays etc , were produced by Respondent Fidler for this company 26 According to Postman , the president of the Union , Respondent Fidler wanted a 40-hour workweek, according to Pargament , he sought a 37%: -hour workweek "would take care" of these matters. He also told Pargament that there had been "rumblings" that Respondent Fidler "was closing up and was going to reopen again into another company." Pargament thereupon denied this and stated that he was going out of business completely; that everything has been bad Whereupon, he said, "Harry [Pargament] , I want you to understand that should you open again, this contract will follow you" To this, Pargament replied, "that's not the question I am not going to open up again " He then went to the plant floor and told the employees that Pargament said that he was going out of business, but that he would work that week and that the following week he would have a few people working and that would be all In connection with the foregoing, Pargament confirmed the fact that Postman and he did discuss the various delinquencies at about the time indicated by Postman, that he told Postman that he was going out of business, and that he did acknowledge that these moneys were due However, Pargament denied that he then said that he would take care of these matters before going out of business, insisting that he said, "I would like to pay it but at the moment I am broke and when collections get a little better I'll try to make it up to him [Postman] ." Since Postman's testimony that Pargament told him that he "would take care" of the matter falls short of a commitment by the latter to pay the monies before he went out of business, and since Respondent Fidler was, at that time, in financial difficulty, I am persuaded that Pargament made no such commitment to Postman and therefore credit Pargament's denial and his further testimony that he manifested an intention to meet his obligations when circumstances permitted him to do so Pargament also denied that Postman ever mentioned anything during the above conversation about the contract following him should he go into business again, or that he said to Postman that he understood that the contract follows the men I note, however, in this connection, Pargament's testimony that he understood that if he were to continue his business at another location under another name, with himself as the main stockholder, "then the Union was entitled to sign up the men." In these circumstances, I find that Postman, rather than Pargament, testified more credibly, and that Postman's state- ment was in the nature of a reminder of Article 2 in the existing agreement between Respondent Fidler and the Union. This conversation marked, for all intents and purposes, the last contact between Pargament and Postman According to Postman, he telephoned Pargament Fidler's shop the following Monday and asked for Pargament, but was told by Plrmack, the head bookkeeper, that they were out of business and that Pargament was not there at the time; whereupon, he told Plimack that he was concerned about the severance pay that was due to the men and was still unpaid and asked that 27 According to Pargament , pension monies were to be remitted on a quarterly basis He testified further that dues were collected from employees at the beginning or at the end of every month The contract provided that dues were to be remitted to the Union within 15 days 28 According to Postman , the men would refuse to work overtime because there were "other men" on layoff. 29 Pargament admitted that there were occasional delinquencies by Respondent Fidler in the payment of union dues and pension monies before May and June 1967 , and that Postman had, on those occasions, complained to him concerning such delinquencies 30 Discussions were then in progress between Pargament and Frankel . However, it is clear from Pargament 's testimony that he did not indicate anything to Postman about this. PARGAMENT FIDLER 703 Plimack have Pargament get in touch with him as this was of utmost importance; and that, except for a telephone call from Pargament 2 days before he testified herein, he had not heard from Pargament since that time. Pargament testified, in this connection, that Pllmack told him only that Postman had called or was trying to reach him, and that he tried once or twice to reach Postman on the telephone, without success. Postman, in turn, denied ever getting any messages from the switchboard operator at his office saying that Pargament had called, and added that he made several attempts to reach Pargament, after his initial call which was taken by Plimack, but they proved abortive. It is not contended that the Union ever communicated with Frankel or anybody at Respondent Frankel and requested that Respondent Frankel recognize the Union and/or bargain collectively with the Union Nor is it contended that anyone from the Union ever communicated to Frankel or to anyone else at Respondent Frankel a claim that Respondent Frankel was obligated, by reason of the contract between Pargament Fidler and the Union, to recognize the Union and to abide by that contract. It should be pointed out, however, as I have already found, that Pargament made no mention to Postman in the August conversation about the discussions he was then having with Frankel. And, it is Postman's uncontradicted testimony that he first learned of Pargament's connection with Frankel and of the existence of Respondent Frankel in September or October, after the commencement of operations at 116 Nassau Street in Brooklyn, and that this happened during the course of proceedings before the New York State Board of Arbitration over Respondent Fidler's severance pay arrearages.31 D. The Allegations of the Complaint and Conclusions Thereon As already noted, the complaint, as amended, alleges a refusal to bargain against both Respondent Fidler and Re- spondent Frankel. As to Respondent Fidler, it is alleged (1) to have failed to notify, negotiate and bargain with the Union, with which it had a contractual relationship, concerning the relocation of its New York City plant to a place in Brooklyn, New York, and concerning its continuance as Respondent Frankel; (2) to have failed to negotiate with the Union concerning the effects on unit employees represented by it at the New York City plant of the decision to discontinue its operations; and (3) to have failed to transmit to the Union dues deducted from unit employees' wages in the Union's behalf. As to Respondent Frankel, it is alleged that, in disregard of a request to do so, (1) it has refused to recognize and bargain with the Union as to the production employees at the above Brooklyn plant; and (2) it has failed and refused to honor and give effect to the aforementioned agreeme- between Respondent Fidler and the Union. salesmen, guards, watchmen, and all supervisors as defined in Section 2(11) of the Act, did, at all times material, constitute a unit appropriate for the purpose of collective bargaining within the meaning of Section 9(b) of the Act. This unit description conforms in all respects with the unit covered by the 1965 contract between Respondent Fidler and the Union; it also conforms with Section 9(b) of the Act which states that "a plant unit" is appropriate. It is clear, therefore, and I find, that the above unit is appropriate. The complaint, as amended, further alleges, but Respondent Frankel denies, that all production employees, including art department, printing, silk screening, shipping and packing employees at its Brooklyn plant, exclusive of office clericals, salesmen, guards, watchmen, and all supervisors as defined in Section 2(11) of the Act, constitute a unit appropriate for the purpose of collective bargaining within the meaning of Section 9(b) of the Act. Like the unit found appropriate above, this unit also conforms with Section 9(b) of the Act which states that "a plant unit" is appropriate Therefore, I also find here that the above-described unit of Respondent Frankel is appropriate 2 The majority issue at Respondent Fidler and at Respondent Frankel Although Respondent Fidler denies the majority status of the Union, it is clear, and I find, that the Union was, throughout the relevant periods herein, the incumbent union under a union-security contract with Respondent Fidler which recognized it as the exclusive collective bargaining agency for all Respondent Fidler's production employees at the New York City plant. It also appears that, under this contract, all unit employees were members of the Union and having their dues checked off. Accordingly, absent any countervailing evidence, I find that the Union has, during the times material herein, represented a majority of the employees in the unit found appropriate at the New York City plant There remains the question of the Union's majority status among the employees in the unit found appropriate at Respondent Frankel The record shows that Respondent Frankel staffed its production department in August entirely with employees from Respondent Fidler's shop but that it hired only a part of Respondent Fidler's complement. It shows further, as found above, that the existing union-security contract between Respondent Fidler and the Union covered the former's production department and that all unit employ- ees were members of the Union and were having their dues checked off to the Union In these circumstances, and in light of my finding hereinafter that Respondent Frankel is the successor employer to Respondent Fidler, I find that the Union continued to be the majority representative of the employees of Respondent Frankel.3 2 1. The appropriate units The complaint, as amended , alleges, but Respondent Fidler denies that all production employees , including art depart- ment, printing , silk screening , shipping and packing employees at its New York City plant, exclusive of office clericals, 31 The contract between Respondent Fidler and the Union provided for the submission of any unresolved claims, disputes, or grievances to binding arbitration before the New York State Board of Arbitration. Pargament, although apprised by the New York State Board of 3 Concluding finding as to the alleged refusal of Respondent Fidler to bargain concerning the effects The General Counsel contends, in substance, that Respond- ent Fidler's refusal to bargain concerning the effects of its decision to go out of business consisted of (1) Pargament's Arbitration about the proceedings before it, chose not to appear He testified that he did not attend because he owed the money and "there was no point in going down there and discussing it " 32 See In tergraphic Corporation of Amenca, 160 NLRB 1284. 704 DECISIONS OF NATIONAL LABOR RELATIONS BOARD conduct of misleading the Union by assuring Postman that the unpaid, contractually required severance pay, union dues and pension monies would be paid before Respondent Fidler went out of business , and (2) Pargament's denial to Postman that he was contemplating going into business at a new location, at a time when he was in the midst of negotiations with Marvin Frankel regarding the creation of Respondent Frankel, thereby violating its obligation under the Act to bargain about the relocation and continuance of operations as Respondent Frankel. However, as to (1), I have already found that Pargament's assurance to Postman was not that he would pay these monies before Respondent Fidler closed down the business but that he intended to meet these obligations when circumstances permitted him to do so In view of this, and since there is no evidence before me as to any differences between Pargament and Postman as to the amounts due in respect to these delinquencies'33 and since at no time thereafter did Postman, or the Union, request negotiations or discussions as to these delinquencies, asking only for their payment, I find no predicate for a finding of a violation based on Respondent Fidler's conduct with respect to these delin- quencies 3 4 And insofar as (2) above is concerned, the General Counsel proceeds on the theory, in effect, that what took place here was not a bona fide going out of business but a relocation of the business of Respondent Fidler and its continuance as Respondent Frankel. However, as I find hereinafter that Respondent Fidler was forced by economic circumstances to close down its operations, I find no basis for finding that Respondent Fidler refused to bargain concerning the reloca- tion and continuance of its operations. It is not contended, nor does it appear, that the Union sought to negotiate, or discuss, with Respondent Fidler its stated decision that it was going out of business. 4. Concluding findings as to the alleged refusal of Respondent Frankel to bargain with the Union, and to assume and honor the agreement of Respondent Fidler with the Union The General Counsel contends that Respondent Frankel is the alter ego or disguised continuance of Respondent Fidler and, in any case, is the successor to Respondent Fidler, and that Respondent Frankel's obligations to bargain and to assume and honor the agreement of Respondent Fidler with the Union follow therefrom. The General Counsel contends further in effect, that while proof of a demand would be required if Respondent Frankel is found to be a successor, no such proof would be required if Respondent Frankel is found 33 The Union took only the matter of severance pay before the New York Board of Arbitration pursuant to the provision under the existing contract for arbitration of claims, disputes and grievances between the parties which they cannot resolve within 5 days. The arbitration award shows that the sole issue before the arbitrator was whether employees were entitled to severance pay under the contract . I am satisfied from Postman 's testimony that, in respect to severance pay, his concern was that it had not been paid, although Pargament had said that he would "take care " of the matter. It would thus appear that the arbitration, step was taken in order to effect payment In this connection , the award made by the arbitrator merely affirmed the applicability of the above-mentioned provisions of the contract , saying, "those ... em- ployees ... who by reason of the closing down of the business, were terminated from the employ of Pargament Fidler, Inc. and provided they were otherwise eligible shall be paid severance pay in accordance with the appropriate and applicable provisions of the labor agreement." to be an alter ego or disguised continuance of Respondent Fidler; and that, in any event, a demand was made upon Pargament by Postman on August 1, at a time when Pargament could be considered an agent of the successor on whom a demand could then be made With respect to the General Counsel's alter ego or disguised continuance theory, it is apparent from my findings hereinabove that, except for the smaller production operation at Respondent Frankel than existed at Respodent Fidler there were, at the inception of Respondent Frankel's operations, the following similarities between both of them: Respondent Frankel had, in its smaller complement, production employ- ees,3 5 supervisors, salesmen and clerical help, all being from the ranks of Respondent Fidler, and these employees received .ne same pay and fringe benefits and continued doing the same type of work with the same type of machines, it utilized equipment of Respondent Fidler purchased at the auction forclosure sale of Respondent Fidler's equipment and assets; it did business with Respondent Fidler's customers, it utilized the vendor forms and order forms used by Respondent Fidler; it used the same truck and the same delivery man as Respondent Fidler ;36 it had the same individual as president as did Respondent Fidler and it paid him the same salary and fringe benefits for performing the same supervisory and managerial role as theretofore, and it purchased for him at the auction, for use in making sales calls, the car he was using for this purpose at Respondent Fidler; and it made the same end products, as did Respondent Fidler, except that it not only subcontracted the printing work to subcontractors but had the folding work done by Olympic Litho, and it also subcon- tracted the making of silk screens incidental to its poster and sign business The foregoing similarities are, however, to be viewed in the light of the following: Respondent Fidler closed down its business for economic reasons; Frankel had no connection whatsoever with Respondent Fidler's financial difficulties and with the consequent sale of its fixtures and equipment at auction, such fixtures and equipment of Respondent Fidler as Frankel purchased were acquired in competitive bidding at that auction; and, so far as appears , Frankel's arrangement with Pargament to hire him was entered into by each of them with his legitimate business considerations in mind and was to their mutual advantage, e.g. Pargament was to continue doing for a corporation to be organized by Frankel the same work and to have the same managerial and supervisory authority as he had with Respondent Fidler, with no loss of earnings or fringe benefits, and Frankel, in turn, was to benefit by Pargament's business know-how and by the fact that Parga- 34 The case of George E Light Boat Storage, Inc., 153 NLRB 1209, affd. in relevant part in 373 F.2d 762 (C A. 5), relied upon by the General Counsel is inapposite . There, the Board held that the refusal by the respondent to continue to make payments to the union's welfare plan, as required by the contract, which it disavowed, was in derogation of such contract and was, in effect, a unilateral change of the wages of the respondent's employees who were the beneficiaries of that plan, and therefore violative of Section 8 (a) (5) of the Act. Here unlike there, Respondent Fidler did not disavow its contract with the Union and did not refuse to pay the monies in consequence of such disavowal , indeed, Respondent Fidler acknowledged its obligations and promised to try to resolve its financial difficulties and satisfy these obligations. 35 These were from the art department of Respondent Fidler, and did, inter alia, hand lettering and pictorial work and pasted type into position. 36 Except that he divided his time between Respondent Frankel and Olympic Litho. PARGAMENT FIDLER 705 merit was the repository of the customer good will of Respondent Fidler and hence offered some assurance of future business, including printing business for Olympic Litho. While it is true (1) that the name "Pargament" was used in the corporate title of Respondent Frankel just as in the corporate title of Respondent Fidler;3 7 (2) that Pargament was made president of Respondent Frankel thus duplicating his office at Respondent Fidler; and (3) that Pargament's connection with Respondent Frankel was emphasized in its advertising, 3 8 I regard these moves as legitimate steps taken to capitalize on Pargament's past connection with Respondent Fidler and not as casting any doubt on the genuineness of the contract of hire between them.3 9 And I view similarly the fact that Pargament would tell former customers of Respondent Fidler that he had gone out of business as Pargament Fidler, Inc. and had joined with Frankel in a new enterprise. Last, but not least, the similarities must be weighed against the fact that the record fails to establish by a preponderance of the evidence that the developments discussed herein were motivated by a desire to escape the Union and the obligations under the existing contract 40 In this connection, I draw no inferences adverse to either Respondent from the fact alluded to by the General Counsel that neither Pargament nor Frankel could say definitely how a meeting between them first came about. Nor do I draw any inference adverse to them from Pargament's testimony that during the discussions between Frankel and him, Frankel wanted to know whether the operation of Respondent Fidler could be taken over without taking the Union along. For, so far as appears, this was no more than an exploratory inquiry by Frankel as to what was involved unionwise if he were, as Pargament suggested, to make an investment in Respondent Fidler so as to alleviate its financial difficulties. Moreover, no such arrangement ever came to pass. Nor do I attach overriding significance, in this connection, to Pargament's acknowledgement that he never told the Union of his discussions with Frankel and of the resulting arrangements. Such conduct is just as consistent with a good-faith belief by him that these arrangements were of no legitimate concern to the Union as with a desire on his part to act surreptitiously vis-a-vis the Union. In the light of the above and on the entire record in the case, I find, despite the contrary contention of the General Counsel, that the credible evidence falls short of establishing that Respondent Frankel was the alter ego or disguised continuance of Respondent Fidler 41 Instead, I conclude, and find, that Respondent Fidler closed down its operations for legitimate business reasons and not for any union-connected reasons. However, I do find merit in the General Counsel's alternative position that Respondent Frankel is the successor to Respondent Fidler. Thus, it is apparent from the similarities between the operations of Respondent Fidler and the opera- tions of Respondent Frankel that the business formerly conducted by Respondent Fidler was being continued under the ownership of Respondent Frankel. This was accomplished by Frankel, the sole stockholder of Respondent Frankel, by such steps as (1) hiring Pargament to manage and operate a similar business for Respondent Frankel at another location, (2) hiring the initial staff of supervisors and other personnel of Respondent Frankel from among Respondent Fidler's employ- ees, (3) lending money to Respondent Fidler so it could wind up unfinished work before the auction sale, (4) purchasing at auction a considerable amount of Respondent Fidler's equip- ment for the use of Respondent Frankel, and (5) going into production as Respondent Frankel shortly after the auction and producing the same end products as Respondent Fidler It follows therefrom that Respondent Frankel became the successor to Respondent Fidler and became bound to acknowl- edge the bargaining obligation of its predecessor. 42 The alleged bargaining demand upon Respondent Frankel The General Counsel concedes, and rightly so, that once Respondent Frankel is found to be a successor of Respondent 37 As heretofore found, Frankel was the sole owner of Respondent Frankel. 38 Thus, the advertisement of Respondent Frankel to the trade in the Dry Cleaner News in December 1967, in evidence as General Counsel 's Exhibit 10 was signed , "Sincerely, Harry Pargament " 39 Frankel admitted that he knew nothing about the silk screen business and that he devotes less than 4 hours a day to Respondent Frankel's business Before his illness , which began around November and lasted until shortly before the hearing and which precluded his participation in the business, Frankel would sign the company check,, after Pargament and Glassman had approved the bills and invoices each had generated, and while Pargament and Glassman could each make minor purchases on his own , he had to consult with, and get approval from, Frankel on major purchases . Frankel also had the final say on matters of policy. 40 The record herein is devoid of any evidence of any antiunion conduct by Respondent Fidler prior to the critical developments herein. 41 I find distinguishable the case of Intergraphic Corporation of America, supra, relied upon by the General Counsel to support a contrary finding. In that case, Intergraphic , of which one Weidman was the principal and sole stockholder, went out of business and, on the next day, a new enterprise , Polygon, of which one Feinberg was the sole stockholder and president was formed The new corporation was to conduct the same type of silk screen manufacturing business at another location with the same customers , machinery, salesmen, and with Weidman as the general manager. The General Counsel does concede that , unlike here, Inteigraphic went out of business while unfair labor practice charges were pending against it, and with a purpose of escaping its union obligations . However, there are other significant distinguishing aspects. Among these, I find, are (1) Weidman was the motivating force in organizing , and in the creation of, Polygon, by leasing space himself for operating at another location, by surreptitiously moving equipment from Intergraphic's plant to the new location and by readying the new plant before the date of incorporation of Polygon , (2) Weidman owned 70 percent of the stock of the new corporation , his family had 15 percent, and Feinberg, the newcomer , had 15 percent , (3) Weidman not only conducted , and was responsible for, the direction of the operations of Polygon in the same manner as he had done at Intergraphics, which paralleled what Pargament did at Respondent Frankel , but, unlike Pargament , he also controlled the operations at the new location, (4) Weidman acknowledged to the union agent that the Polygon location was to be his new shop , (5) and, finally , Feinberg intimated during his testimony that the arrangement which he had entered into with Weidman was in the nature of a fraud perpetrated on him by Weidman 42 Board and Court cases establish that a successor employer is bound to acknowledge the bargaining obligations of its predecessor where, as here, it continues substantially the same operation with the same employee unit, albeit diminished in size, at the same or at another location in the vicinity See Northwest Galvanizing Co, 168 NLRB No. 6, and West Suburban Transit Lines , Inc., 158 NLRB 794, 797, and cases cited therein. See also John Wiley & Sons v. Livingston , 376 U.S. 543, where the Supreme Court of the United States said, in relevant part, "The objectives of national labor policy , reflected in established principles of federal law, require that the rightful prerogatives of owners independently to rearrange their business and even eliminate themselves as employers be balanced by some protection to the employees from a sudden change in their employment relationship." The case of Oil Chemical Workers International Union, Local 4-243, AFL-CIO v. N.L.R.B., 362 F 2d 943 (C.A.D.C.), relied upon by Respondent Frankel for a contrary result , is distinguishable on its facts. 706 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Fidler, as here, it must then be established that the Union made a bargaining demand upon Respondent Frankel, before a violation of Section 8(a) (5) can be found 43 The General Counsel points, in this respect, to testimony by Postman, the president of the Union, that by August 1, during a conversa- tion with Pargament, he told Pargament that there were rumors that Pargament was going to reopen again and admonished him in the following terms. "Harry, I want you to understand that should you open again, this contract will follow you " He argues therefrom that this was a bargaining demand on Respondent Frankel because Pargament and Frankel had already come to an understanding concerning the new enterprise and Pargament's high supervisory role therein, thereby making Harry Pargament the agent of Respondent Frankel, the successor. However, I cannot subscribe to the 'General Counsel's reading of the so-called bargaining demand. As I view it, it was predicated upon a relocation of Respondent Fidler-a situation which, I have found, never came to pass because Respondent Fidler legitimately closed down its busi- ness for economic reasons and never reopened Furthermore, the record fails to support the General Counsel's position that Pargament and Frankel had already reached an understanding by August 1 concerning matters which were finalized in their agreement of August 10 44 Accordingly, as there is no basis in law or in fact for find; ig that Pargament was by August 1 an agent of Respondent Frankel, I conclude, and find, apart from other considerations, that no valid bargaining demand was made upon Respondent Frankel, the successor to Respondent Fidler, by August 1. In light of the above, and since I have 43 See Steel City Transport v. N L R.B, 389 F.2d 735 (C.A. 3), enfg 166 NLRB No. 54, Lon-Ann of Mtamt, Inc, 137 NLRB 1099. heretofore found that neither the Union nor its representatives ever communicated with Frankel or anybody at Respondent Frankel and requested that Respondent Frankel recognize the Union and/or bargain collectively with the Union, I conclude, and find, that a necessary prerequisite to a holding that Respondent Frankel has refused to bargain with the Union has not been established. Accordingly, I conclude that the allega- tions of the complaint, as amended, that Respondent Frankel violated Section 8(a) (5) and (1) of the Act have not been sustained by the record Upon the basis of the entire record, I make the following: 1 Respc ndent Fidler and Respondent Frankel are each employers engaged in commerce within the meaning of Section 2 (6) and (7) of the Act. 2. The Union is a labor organization within the meaning of Section 2(5) of the Act. 3. Neither Respondent Fidler nor Respondent Frankel has refused to recognize and/or bargain collectively with the Union as the exclusive representative of their respective employees in an appropriate unit in violation of Section 8(a) (5) and (1) of the Act. RECOMMENDED ORDER Upon the basis of the above findings of fact and conclusions of law, and upon the entire record in the case, it is recommended that the complaint herein, as amended, be dismissed. 44 See fn. 10, supra.