Milton H. Kantor

408 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Milton H. Kantor, Gerald Kantor, Arnold Kantor, Paul Kantor, as Individuals; J. A. Steven, Inc., d/b/a Bargain Barn Foods; South Discount Foods, Inc., d/b/a Goldman's Discount Foods; and Dayton Discount Foods, Inc. and Retail Clerks' Union, Local 1552, Retail Clerks' International Association, AFL-CIO and Local 430, Amalgamated Meat Cutters & Butcher Workmen of North America, AFL-CIO. Cases 9-CA-4547-1,-2,-3 and 9-CA-4548 June 30, 1969 DECISION AND ORDER BY CHAIRMAN MCCULLOCH AND MEMBERS FANNING AND BROWN On August 9, 1968, Trial Examiner Leo F. Lightner issued his Decision in the above-entitled proceeding, finding that Respondents Milton H. Kantor, Gerald Kantor, Paul Kantor, and South Discount Foods, Inc., d/b/a Goldman's Discount Foods,' 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 Trial Examiner's Decision. He further found that the Respondents had not engaged in certain other unfair labor practices alleged in the complaint and recommended that such allegations be dismissed. Thereafter, the Respondents and Charging Parties filed exceptions to the Decision and supporting briefs, and the General Counsel filed limited exceptions, a supporting brief, and an answering brief to the Respondents' exceptions, the Charging Parties filed an answering brief to the Respondents' exceptions, and the Respondents filed a reply brief to General Counsel's limited exceptions. By order dated November 25, 1968, the National Labor Relations Board remanded the instant proceeding for the purpose of taking further evidence with respect to the Trial Examiner's finding that the four Respondents mentioned above had violated Section 8(a)(3) and (1) of the National Labor Relations Act, as amended, by discriminatorily failing to hire any of the employees formerly employed by Respondents J. A. Steven, Inc., d/b/a Bargain Barn Foods, and Dayton Discount Foods, Inc. On March 12, 1969, Trial Examiner Lightner issued his Supplemental Decision reaffirming his finding of violations of Section 8(a)(3) and (1). Thereafter, the Respondents filed exceptions to the Supplemental Decision and a supporting brief, and the General Counsel filed a supplemental brief. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the National Labor Relations Board has delegated its 'Referred to collectively as Respondents South Discount. 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 the case, and hereby adopts the findings, conclusions," and recommendations of the Trial Examiner with the following modifications: We agree with the Trial Examiner's finding that Respondents South Discount interfered with employees in the exercise of their right to engage in concerted activities, in violation of Section 8(a)(1) of the Act, by causing mass, indiscriminate arrests of applicants for employment who were picketing in front of said Respondents' store. We also agree with his finding that the closing of the Respondent J. A. Steven's store on November 21, 1967, was economically motivated and that Respondents' failure to bargain, at that time and subsequently, with the Unions which, prior to the closing, had represented the employees in the store, did not violate the Act.' After careful consideration of the record of the initial hearing in this proceeding and the hearing on remand, however, we do not agree with the Trial Examiner's finding that Respondents South Discount Foods, Inc., and Milton H., Gerald, and Paul Kantor violated Section 8(a)(3) of the Act by failing to hire on or after December 6, 1967, any of the 35 persons who had been employed by Respondents J. A. Steven, Inc., and Dayton Discount Foods, Inc., before the store was closed on November 21, 1967. As found by the Trial Examiner, the J. A. Steven - Dayton Discount store (Bargain Barn Foods) went bankrupt and closed after sustaining prolonged operating losses. When the Kantors reopened the store on December 12, 1967, under the corporate name of South Discount Foods, Inc., they did so under a new trade name (Goldman's Discount Foods). The Kantors, under the corporate name of Dayton Discount Foods, Inc., had managed on a fee basis since June 1966, but not owned, the prior store. In managing that store they had operated under existing collective-bargaining agreements negotiated in 1964 and 1965 between owner J. A. Steven, Inc., and the Unions which then represented the employees. The Trial Examiner found that the 'The Trial Examiner's Conclusion of Law 5 is that Respondent Dayton Discount Foods, Inc , violated Sec 8 (a)(5) and (1) of the Act by failing to notify the Unions of the closing of the store on November 21, 1967. We disregard this finding as being inadvertent, inasmuch as the Trial Examiner found that such notification would have been futile and recommended dismissal of the applicable allegation of the complaint. See section entitled "Contentions of Parties and Concluding Findings " and last paragraph of the Recommended Order of the Trial Examiner's Decision 'In agreeing that the Respondents connected with the reopened store were not "successors" to the business of the old store, we rely on our finding, infra, that Respondents South Discount's failure to rehire any employees of the former store was not unlawfully motivated. 177 NLRB No. 15 SOUTH DISCOUNT FOODS, INC. Kantors, presumably for the purpose of avoiding an obligation to bargain with the Unions, discriminatorily jailed to hire any of the former employees because they were represented by the Unions. For proof of discriminatory motivation he relied on prior cases in which the Kantors and their corporate counterparts were found by the Board to have committed unfair labor practices.' We note at the outset that the Respondents, in opening the new store, had no affirmative duty to the employees of the old store, simply by virtue of their having been employed at the same location and in a similar enterprise, to consider them or any of them for employment upon their application.' The question here is whether the Respondents' failure to hire any of them was discriminatorily motivated. In our opinion the General Counsel has not established such an unlawful motivation by a preponderance of the evidence. The employees' requests for reemployment were made by their Unions, not individually. Instead of acting upon these requests, made on December 6 and 8 , 1967, the Respondent went to other sources, such as the Ohio State Employment Service, to obtain new employees. The reason asserted for recruiting new employees instead of taking back the old was that there had been widespread pilferage in the old store and the Respondents were not anxious to employ any person who might have been involved in such pilferage. Respondent introduced 'evidence that, acting on the suspicion that substantial pilferage was occurring, in September 1967, the management instituted changes in the store's security system and in October began an exhaustive investigation which resulted in the discharge of some individuals and the implication of many more, but that the investigation was not completed at the time the store closed in November. It is not seriously disputed that many if not most of the persons employed at the old store were implicated in the pilferage to the extent that the Kantor management had reason to suspect them. The gist of the relevant evidence is that many of those interrogated by management, whether admitting or denying complicity, pointed the finger of guilt at others. Perhaps further investigation would have removed the cloud from some of those accused or would have implicated others." However, the closing of the store within weeks after the, preliminary investigation negates any basis for inferring that the investigation was or should have been completed prior to the opening of the new store ' 'Ontario Foods, Inc, 144 NLRB 1057, and 149 NLRB 1528, Priced-Less Discount Foods, Inc., 157 NLRB 1143, and 162 NLRB 872 'Cf. Tri State Maintenance Corporation, 167 NLRB No. 140, enfd as modified 408 F.2d 171 (C.A.D.C., 1968). 'No employees in the meat department were implicated' in the investigation, and there was some indication of Respondent's later willingness to reemploy them , with some uncertainty, however, as to whether this was to be in the new store or at other stores under the Kantor management. 409 What we have here is a situation, where a store had suffered operating ' losses over a prolonged period until it was closed for legitimate economic reasons. Shortly before the store • closed, management discovered that certain of its employees had engaged in widespread pilferage, had reason to suspect that many still unidentified employees were involved, and had reasonable grounds for concluding that pilferage was a principal cause of the store's failure." The General Counsel offered no evidence in contradiction of the evidence adduced by Respondents South, Discount in. support, of their defense. It is perfectly plausible that Respondents South Discount, upon reopening the new store, acted upon a desire to commence operations with a new work force rather than rehire employees who may have been involved in pilferage at the old store. In the circumstances, as the record does set forth a reasonable basis for Respondents' refusal to rehire the former employees, which is totally unrelated to union activities, and since the only evidence of unlawful motivation is that which can be inferred from Respondent Kantors' unfair labor practices in other unrelated cases, which is offset by the fact that the Kantors had dealt amicably with the Unions for over a year prior to the closing of the Steven store, we find that the General Counsel has failed to establish by a preponderance of the evidence that Respondents' asserted reason for failing to contact and hire the former employees at the old store was pretextual. Accordingly, we shall dismiss the complaint insofar as it alleges a violation of Section 8(a)(3) in this regard. r ORDER Pursuant to Section l0(c)',of the National Labor Relations Act, as amended, the National Labor Relations Board, adopts as its Order the Recommended Order of the Trial Examiner, as modified herein, and hereby orders that the Respondents South Discount Foods, Inc., Dayton, Ohio, its officers, agents; successors, and assigns, and Milton H. Kantor, Gerald Kantor, and Paul Kantor, as individuals, shall take the action set forth in the Trial Examiner's Recommended Order as so modified: 1. Delete paragraph 1(a) and reletter 1(b) and 1(c) as 1(a) and 1(b), substituting for "In any other" in relettered paragraph 1(b), the words "In any like or related." 'Cf Quick Shop Markets, Inc., 168 NLRB No 30 , 'The Trial Examiner refers on several occasions to a statement by Respondents' counsel at the initial hearing to the effect that Respondents were not relying on the evidence of pilferage for the. purpose of disqualifying any discnmmatee from, reinstatement . This statement was made, however, at a time when counsel had been led to believe that the issue being litigated was only whether the closing of the old store had been discnmmatonly motivated In this context , we do.not find this statement to be inconsistent with the Respondents' defense to the alleged discriminatory refusal to hire 410 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 2. Delete paragraphs 2(a) and 2(b) and reletter 2(c) and 2(d) as 2(a) and 2(b). 3. Delete the first and fourth indented paragraphs of the notice and the "Note." 4. Delete from the first line of the third indented paragraph of the notice, the words "in any other" and substitute "in any like or related." IT IS HEREBY FURTHER ORDERED that the complaint herein be, and it hereby is, dismissed insofar as it alleges violations of the Act not found herein. MEMBER BROWN, dissenting in part: Contrary to the majority, I would find that Respondents South Discount discriminatorily refused to rehire the 35 employees of Respondent Steven in violation of Section 8(a)(3). I would further find that South Discount is a successor to Respondent Steven, and as such has violated Section 8(a)(5) by refusing to recognize the Unions. TRIAL EXAMINER'S DECISION STATEMENT OF THE CASE LEO F. LIGHTNER , Trial Examiner: This proceeding' was heard before me in Dayton , Ohio, on April 23, 24, 25, and 26, 1968, on the amended consolidated complaint of General Counsel , as amended, and the answer, as amended, of Milton H. Kantor, Gerald Kantor, Arnold Kantor, Paul Kantor, as individuals, South Discount Foods, Inc., and Dayton Discount Foods, Inc., Respondents.' The complaint alleges violations of Section 8(a)(5), (3 ), and (1) and Section 2(6) and (7) of the Labor Management Relations Act, 1947, as amended, 61 Stat. 136, herein called the Act . The parties waived oral argument and briefs filed by the General Counsel and the Respondent have been carefully considered. Upon the entire record,' and from my observation of the witnesses, I make the following: Findings and Conclusions 1. THE BUSINESS OF THE VARIOUS RESPONDENTS It is undisputed that Respondent Steven, an Ohio corporation, was the sole owner of a retail food store, at ' No appearance was entered for J. A Steven, Inc. 'No answer was filed on behalf of J A Steven, Inc. However, Jack Gershow, president of J. A. Steven, Inc., appeared as a witness, as more fully set forth infra A charge was filed in Case 9-CA-4547, on December 11, 1967; in Case 9-CA-4547-2, on December 14, 1967; in Case 9-CA-4547-3, on December 18, 1967; and an amended charge, in the cases set forth, was filed on April 5, 1968. A charge, in Case 9-CA-4548, was filed on December 11, 1967, an amended charge was filed on January 8, 1968 , and a second amended charge was filed on April 8, 1968 . A consolidated complaint, and an order consolidating cases, was issued on February 20, 1968 , and an amended consolidated complaint was issued on April 10, 1968, and it was further amended, relative to the allegations of paragraphs 6 and 7 during the hearing herein. 'To avoid an untimely delay in concluding the hearing herein , at a late hour, the parties agreed to stipulate to the authenticity of a check , marked TX Exh. 1, and, even though inadvertently omitted from the transcript, a Court record of a foreclosure proceeding, identified as TX Exhs. 2A, 2B, and 2C, reserving the right to object to receipt . General Counsel and counsel for the respective Charging Parties object to receipt of the Court documents, on the ground of materiality. The objection , I find, not well taken for reasons explicated infra. 4601 South Dixie Drive, Moraine City, Dayton, Ohio, at all times, from April 2, 1964, to and including November 22, 1967, where the events which gave rise to the complaint herein occurred. It is undisputed that during the year immediately preceding November 1967, a representative period, Respondent Steven's gross retail sales were valued in excess of $500,000, that during the same period, Respondent Steven had an indirect inflow of goods and materials, in interstate commerce, valued in excess of $50,000, which were purchased and transported directly to said store in Dayton, Ohio, from other enterprises located in the State of Ohio, which, in turn, had purchased and received said products directly from points outside the State of Ohio. Dayton Discount Foods, Inc., is an Ohio corporation, and at all times material herein, had the following officers: Milton H. Kantor, president; Gerald Kantor, vice president and treasurer; Paul Kantor, vice president; Daniel Rosenthal, secretary; and Allan Gradsky, assistant secretary, and the following stockholders: Milton H. Kantor, Gerald Kantor and Paul Kantor, with the first two named each owning 40 percent and the last named owning 20 percent.' It is undisputed that Respondent Dayton Discount, commencing in June 1966 and continuing until November 21, 1967, under the terms of a management agreement with Respondent Steven, directed and controlled the operation of the Retail Store at 4601 South Dixie Drive, including control of the labor relations policies, as agent of Respondent Steven. Respondent South Discount Foods, Inc., d/b/a Goldman's Discount Foods, was incorporated, under the laws of Ohio, on December 6, 1967, and began the operation of a retail food store at 4601 South Dixie Drive, on December 12, 1967, with the same individuals holding the same positions, as officers, as those enumerated, supra, as officers of Dayton Discount, and with the same individuals holding the same percentage of stock as they hold in Dayton Discount. It is undisputed that a projection of the retail sales, based on the experience commencing December 12, 1967, to the opening of the hearing herein, in April 1968, reasonably permit a finding that said sales will exceed $500,000, in value, and that during the same projected period Respondent South Discount will have a direct inflow of goods and materials, in interstate commerce, valued in excess of $50,000. The complaint alleges and it is undisputed, since no answer was filed, that Respondent J. A. Steven, Inc., d/b/a Bargain Barn Foods, is, and at all times material was, an employer engaged in commerce and in operations affecting commerce as defined in Section 2(2), (6), and (7) of the Act. The complaint alleges, the answer denies, and I find that Respondent Dayton Discount, and its officers Respondents Milton H. Kantor, Gerald Kantor and Paul Kantor, as individuals, are each an employer within the meaning of Section 2(2) of the Act, engaged in commerce and in operations affecting commerce as defined in Section 2(6) and (7) of the Act. The complaint alleges, the answer denies, and I find that Respondent South Discount Foods, Inc., d/b/a Goldman's Discount Foods, and its officers, Respondents Milton H. Kantor, Gerald Kantor, and Paul Kantor, as individuals, are each an employer, engaged in commerce 'The four Kantors, named as individual Respondents , are brothers. SOUTH DISCOUNT FOODS, INC. 411 and in operations affecting commerce , on and after December 6, 1967,' as defined in Section 2(2), (6), and (7) of the Act. II. THE LABOR ORGANIZATIONS INVOLVED Retail Clerks' Union , Local 1552, Retail Clerks' International Association, AFL-CIO, and Local 430, Amalgamated Meat Cutters & Butcher Workmen of North America, AFL-CIO, herein referred to as Clerks and Meat Cutters, respectively , or Unions, collectively, are each a labor organization within the meaning of Section, 2(5) of the Act. III. THE ALLEGED UNFAIR LABOR PRACTICES Issues The issues raised by the pleadings and litigated at the hearing are: (1), Whether Respondents Steven, Dayton Discount, and the individual Respondents, commencing November 21, 1967, when the store closed, failed and refused to bargain collectively in good faith with the Union's by: (a), refusing to recognize the Unions; (b), refusing to meet with the Unions' representatives; or (c), unilaterally eliminating the work of all of the employees, without prior notice to, our discussion with, the unions, in contravention of the provisions of Section 8(a)(5) and (1) of the Act; or (2), whether Respondent South Discount Foods, and the individual Respondents , failed and refused to bargain in good faith with the Unions by: (a), refusing, since on or about December 6, 1967, to discuss the reinstatement of the employees , terminated without notice on November 21, 1967; or (b), refusing to employ said employees, in contravention of the provisions of Section 8(a)(5), (3) and (1) of the Act; or (3), by Respondents Steven, Dayton Discount, and the individual Respondents, bypassing the Unions and negotiating directly with employees, on or about November 7, 1967, by requesting the employees to sign new applications for employment, without prior notice to, or discussions with , the Unions, in contravention of the provisions of Section 8(a)(5) and (1) of the Act; or (4), by Respondents Steven , Dayton Discount , and the individual Respondents , terminating 36 employees, on November 21, 1967, in contravention of the provisions of Section 8(a)(3) and (1) of the Act;' or (5), by Respondent South Discount and the individual Respondents interferring with, restraining and coercing, its employees in the exercise of rights guaranteed them in Section 7 of the Act, by ordering representatives of the Clerks Union and employees off Respondent's premises, and by having them arrested while they were engaged in picketing in front of the store of these Respondents, on the various dates, commencing December 12, 1967, to and including January 2, 1968, in contravention of the provisions of Section 8(a)(1) of the Act. Respondents, except Respondent Steven, by answer, deny the commission of any unfair labor practices. Subsidiary questions, in the nature of matters of the defense, are set forth and considered infra. Supervisory Personnel The complaint alleges and the answer denies that Milton Kantor, Gerald Kantor, Paul Kantor, Arnold Kantor, Allan Gradsky, and Daniel Rosenthal are supervisors, within the meaning of Section 2(11) of the Act, and agents of Respondent's Steven, Dayton Discount and South Discount. It is undisputed that all of those named, except Arnold Kantor, were officers of Dayton Discount and South Discount, as I have found supra. I have also found, for reasons further explicated infra, that Dayton Discount was the agent of Respondent Steven, for the limited period of time indicated. None of those named participated in the day-to-day operations, except through other supervisory personnel, as further explicated infra. Accordingly, I find it unnecessary to find supervisory capacity, since all, except Arnold Kantor, unquestionably were agents of all of the corporate Respondents. However, it is reasonable to infer from the record, as further explicated infra, that Arnold Kantor was in charge of the South Discount store, commencing December 6, 1967, during the preparations for opening, and during the period of selection of employees, prior to the opening of the store on December 12, 1967. Accordingly, I find that Arnold Kantor was a supervisor, of Respondent South Discount, within the meaning of Section 2(11) of the Act, during that period of time, and was an agent of South Discount during that period. Background The facts set forth under this subsection are undisputed. Louis S. Goldman, a Dayton lawyer, is a partner in LMG Investments, which is the owner of the real estate, at the location of the food store, at 4601 South Dixie Drive, and adjacent property. Goldman is also president, and a substantial stockholder in Goldman's Inc., formerly Giant Value Distributing Company, Inc., which operates Goldman's discount stores, and was the leasee of the shopping area. The shopping area, described in the record as 4601 South Dixie, appears to be comprised of three adjacent stores in a single building, identified as "Goldman's," which Goldman described as a hardware store, a "Bargain Barn Foods," which Goldman described as a Goldman trade name, and which is the grocery with which we are herein concerned, and a doughnut shop. On the far side of the parking lot, another building is owned by South Dixie Corporation, inferentially a separate Goldman enterprise, where a portion is leased to a furniture operation called "Goldman's Discount Furniture," and another portion of which is leased to Burger-Chef. Goldman acknowledged an effort to create a 'For reasons explicated Infra, I have omitted Respondent Arnold Kantor. I also defer for detailed consideration and finding , Infra. the allegations that South Discount and the individual Respondents are the alter ego, or successor, of Respondent Steven, or Respondent Dayton Discount. At the outset of the hearing, General Counsel moved to amend the complaint to incorporate the names of the 36 alleged discriminatees However, General Counsel's list contains only 35 names . Those listed are: Elsie Aggee, Delilah Alsept, Roger Arwood, Lelia Baker, John W. Blair, Patti Bowell, Larry Callahan, Jerry Copeland, James Cordray, George Curtis, Brenda Fritts, Dudley Hammond, Barbara Hardin, William Hill, Carmella Hines, Sandra Hipsher, Glenda Hollan , Vaughn D. Howard, Norma Justice, Marie Lewis, Billy Joe Lairemore, Luther H Magill, Diana McKnight, Lee McKnight, John McCreary , Harkless O'Bryant, Larry Ogan , Robert Reedy, Thomas Scarbrough, Winford Smith, Nancy Serbontez , Mary J Stone, Tim Strong, Lucretia C. Thompson, and Mary Wagers Kenneth J Pfarrer, National Secretary and Treasurer of the Meat Cutters Local, identified Baker, Curtis, Hardin, Lee McKnight, Scarbrough, and Wagers as members of that Union. Pursuant to my request for clarification, by stipulation , of June 27, 1968, General Counsel and Respondent have acknowledged the accuracy of G C. Exh 2. 412 DECISIONS OF NATIONAL LABOR RELATIONS BOARD public impression of a total Goldman operation , which he characterized as "one stop shopping for their total needs," and, inferentially, this applied to other Goldman locations as well, identified herein as Huber Heights and Gettysburg Road locations. Goldman is not a Respondent herein. Goldman asserted that none of the Kantor group' had any financial interest in any of the Goldman operations, as officers or stockholders. Giant Value Distributing Company, subsequently Goldman's Inc., leased the "Bargain Barn Foods" location from LMG Investments, and subleased that portion to Respondent Steven, inferentially on an unspecified date in 1964. Jack Gershow is president of Respondent Steven, and a 75 percent stockholder. It is reasonable to infer that his wife, Annabelle, owned most, if not all, of the remainder. Steven was incorporated in late 1963 and commenced operations of the "Bargain Barn Foods" store on April 2, 1964. The store is described as containing a meat department, dairy department, frozen food department, produce department and a grocery department. It is reasonable to infer that it is a supermarket type operation, with cashiers checking out customers' purchases . Gershow, with some assistance from his wife and uncle , managed the store until May 29, 1965, at which time he entered into a management agreement with Great Value Corporation, a grocery store operator' Under the agreement, which was terminated approximately a year later, Great Value had complete management of the store, including bookkeeping and the signing of checks. Subsequently , commencing June 12, 1966, and continuing to and including November 21, 1967, the last day the store was open for business under the ownership of Respondent Steven, the Kantor group managed the store, under the corporate identity of Dayton Discount Foods, Inc., under a management agreement with Gershow and his wife, Annabelle, as more fully set forth infra. The record reflects that the Kantor group have, at various times operated a number of discount grocery stores, in a variety of locations. Certified Public Accountant Allan Gradsky, who is also assistant secretary of many of the Kantor corporations , estimated the total number of these stores as approximating 14, in December 1967. Included are the following : Ontario Foods, Inc., Cincinnati, Ohio;' Priced-Less Discount Foods, Inc., d/b/a Payless, at Springfield, Ohio;" Costless Discount Foods, at Florence, Kentucky; Milton and Jerry, Inc., Springfield, Ohio; Spendless Discount Foods, Toledo, Ohio; Payless Discount Foods, Evendale, Ohio; Rink's Middletown Discount Foods, Middletown, Ohio; Rink's Discount House, Florence, Kentucky; and Newport Discount Foods, Inc., Bellview , Kentucky . In addition, the Kantor group are at least part owners of a store identified as GOVCO, in Indianapolis, Indiana. In addition, inferentially during 1966, Dayton Discount Foods, Inc., was incorporated . Respondent Dayton Discount, in addition to being a party to the management agreement, relative to the store at 4601 South Dixie Drive, also operated a store at 2150 North Gettysburg Avenue, Dayton, Ohio, at Goldman's Bargain Center, doing 'This term is intended to include Milton H Kantor , Gerald Kantor, and Paul Kantor, as individuals, who, insofar as this record reveals, were the sole owners and stockholders of the various Kantor corporations . However, no financial interest, in the Goldman enterprises , appears to have been held by other officers of Kantor corporations. 'Not to be confused with Giant Value Distributing Company, a Goldman enterprise business under the name of Goldman's Discount Foods, commencing November 1966. Huber Heights Discount Foods, Inc., an Ohio corporation, incorporated by the Kantor group, on unspecified date in 1967, has operated a supermarket adjacent to Goldman's Discount Store in Huber Heights, another suburb of Dayton, since October, 1967. On January 11, 1965, Respondent Steven and the Clerks entered into a collective-bargaining agreement, effective from that date through May 26, 1968, with an automatic renewal clause thereafter. The agreement contained a valid union security provision. The unit coverage and other provisions are set forth, or referred to, infra. On June 10, 1964, Respondent Steven and the Meat Cutters entered into a collective-bargaining agreement which, by its terms, was effective from June 1, 1964, through June 1, 1968, with an automatic renewal provision. This agreement contains a valid union security provision. The description of the unit and other provisions are set forth, or referred to, infra. Inferentially, in late May or early June 1966, Gershow prevailed upon Milton H. Kantor to undertake the management of the "Bargain Barn" store . Others present at this meeting were Allan Gradsky, a independent CPA, as well as an officer of various Kantor enterprises, as described supra, and also formerly an accountant for Respondent Steven from late 1963 until late 1964, and again commencing June 1966, Daniel Rosenthal, attorney for Kantor, as well as an officer of the various Kantor enterprises, and Jerry Office, attorney for Gershow." The Management Agreement of June 1966 While the precise date the agreement for management of the Bargain Barn Store was executed is obscure by its terms it became effective June 12, 1966. The agreement is between Respondent Steven and Respondent Dayton Discount, designated as first and second party, respectively, with Jack Gershow and Annabelle Gershow designated as third and fourth parties, respectively. The agreement provides, inter alias pp. 1' = Respondent Steven, as "owner and operator" of a grocery store - , "does hereby employ" Respondent Dayton Discount - " to manage and operate the same, hire and fire all personnel, buy and sell merchandise for the said store, establish its policy, select suppliers, disperse all monies for payroll and accounts payable, deposit all monies in a Special Account to the exclusion of Respondent Steven; pp. 2 provides for periodic reports, inferentially the employment of an accountant or auditor, whose services are chargeable to the Special Account, with copies of such reports to Respondent Steven and Jack Gershow; pp. 3 provides for payment out of the Special Account of the cost of advertising, prior to the opening of [Respondent Dayton Discounts'] store on Gettysburg Avenue, with a further payment thereafter, for advertising, equal to 1 percent of the weekly weekly 'Respondent in cases reported as 144 NLRB 1057 and 149 NLRB 1528, considered further infra "Respondent in cases reported at 157 NLRB 1143 and 162 NLRB No 75, considered further infra "There is confusion in the record in reference to Attorneys Jerry Office, Senior and Junior, and it is impossible to determine from the record which of these two is referred to at various points in the testimony. However, I find this omission of no consequence. "Pp. indicates numbered paragraph in Agreement SOUTH DISCOUNT FOODS, INC. gross sales, with a minimum of $500 per week; pp. 4 provides that the shareholders of [Respondent Steven] "by their signatures affixed hereto"" shall not transfer their stock without the consent of [Respondent Dayton Discount];" pp. 5 recites that Respondent Steven is indebted in the total amount of $375,000, both secured and unsecured, as of June 12, 1966, for merchandise, fixtures and equipment, and is operating as a tax option Subchapter "S" corporation under the Technical Amendments Act of 1958, Internal Revenue Code, none of which is assumed by [Respondent Dayton Discount.] In addition, "it is further agreed between the parties hereto that this Agreement shall not be construed to be a partnership or join venture between them or between any affiliated corporation or business of [Respondent Dayton Discount], nor can [Jack Gershow] or any stockholders or officers of [Respondent Steven] in any way personally obligate [Respondent Dayton Discount] or its affiliates for any existing or hereafter acquired debts or obligations of the [Respondent Steven]. The [Respondent Steven] shall continue for tax purposes as a Sub-Chapter "S" Corporation until such time as the [Respondent Dayton Discount] shall determine it shall be discontinued or until the [Jack and Annabelle Gershow] shall have used up all available income tax loss; pp. 6 provides for a salary of $250 per week for Jack Gershow, with other specific fringe benefits, as a consultant, with specific owner-managerial duties to be assigned by [Respondent Dayton Discount.] Also provided is "[Jack Gershow], or his designee, shall have the right to examine and audit at any time the books and records of [Respondent Steven]; pp. 7 provides that Respondent Dayton Discount will receive $300 per week for its services to be accrued for 6 months, and dispersed when in the opinion of said Respondent the same can properly be paid; pp. 8 provides that when all accounts payable are reduced to $100,000, profits of Respondent Steven thereafter shall be distributed "as the law will permit" equally, in the proportion of one-half to Respondent Dayton Discount and the other half to Jack and Annabelle Gershow; jointly. In addition, at such time, .,all salaries" [inferentially the salary of Jack Gershow and the management fee of Respondent Dayton Discount] are to be readjusted and "increased in equal amounts" between Respondent Dayton Discount and Jack Gershow, "at the discretion of [Respondent Dayton Discount] pp. 9 Fifty percent of all "issued" stock of [Respondent Steven] is to be placed in escrow with [Respondent Dayton Discount], with the latter having the option to demand [transfer] to it or its designee after [Respondent Steven] shows a profit for six consecutive months. In addition, [Respondent Dayton Discount] has the option to terminate the agreement "any time after one year of operation" and agrees to surrender the fifty percent of issued stock, if the same had been transferred to [Respondent Dayton Discount]. It is also provided that "no additional stock shall be issued by [Respondent Steven] unless mutually agreed upon by [Respondents "I find it reasonable to infer, from the signatures , that Jack and Annabelle Gershow are the sole stockholders of Respondent Steven. "I find it reasonable to infer this means the consent of the Kantor group, since corporations can only act through living persons. 413 Steven and Dayton Discount]. pp. 10 Provides that [Respondent Dayton Discount] has the right to forthwith terminate the agreement if the "payable" of [Respondent Steven] shall exceed $375,000 "upon immediate audit." pp. 11 Provides that [Respondent Steven] shall receive all rebates, discounts. etc. pp. 12 Provides that if [Respondent Dayton Discount] or its designee shall acquire the 50 percent of issued stock, as provided in pp. 9 and [if] said Respondent subsequently agrees to become a public corporation, in such event; (a) said [Respondent] has the option of acquiring all shares of [Respondent Steven], then owned by Jack and Annabelle Gershow, in exchange for which the two latter named are to receive the equivalent of $100,000 in Class A voting stock in [Respondent Dayton Discount]; (b) upon the exercise of the option set forth in (a) by [Respondent Dayton Discount] Jack Gershow is to be retained on a five year contract of employment, at the salary and other benefits existing at such time; (c) the option set forth under (a) is conditioned upon [Respondent Dayton Discount] having acquired and retaining 50 percent of the "issued" stock of [Respondent Steven], as provided in pp. 9. It is reasonable to infer from the record that the accounts payable were never reduced to $100,000, that Respondent Steven did not have a profit for six consecutive months, and that the alternatives and options enumerated, as applying in such an event, were never exercised. Appropriate Units - Clerk's and Meat Cutter's Majority Status It appears undisputed and I find the following employees of Respondent Steven constitute separate units, each of which is a unit appropriate for the purposes of collective bargaining within the meaning of Section 9(b) of the Act: (a) All retail store employees, excluding meat department employees, store managers, assistant store managers, and all professional employees, guards and supervisors as defined in the Act; (b) All meat department employees, excluding all professional employees, guards and supervisors as defined in the Act, and all other employees. It is undisputed that the collective bargaining agreements with the Clerks and Meat Cutters, covering the described units respectively, each contained a valid union security provision, in full force and effect throughout the period of Respondent Dayton Discounts' operation of the store, and no revocation of authorization of dues deductions was ever filed by any employee. Accordingly, I find that the Unions, at all times until November 22, represented a majority of the employees in the respective unit. Kantor's Operation of Steven It is undisputed that the Kantor group and Kantor supervisory personnel operated the Steven Store from June 1966 to and including November 21, 1967. The degree of participation by Gershow is set forth infra. In immediate charge of day to day operations there was a store manager, assistant manager, and an individual in charge of the night crew. In addition, Kathy Wellman, bookkeeper, was not a member of the Union. Thomas 414 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Scarbrough, head of the meat department, was a member of the Meat Cutters, Marie Lewis, head cashier, and, inferentially, other department heads were members of the Clerks. The store managers, in order of service, were Bob McKay, Jessie Reinhardt, and Delvis Joe Penly." Leonard Chudy was assistant manager for approximately the last 15 months of the operation of the Steven Store, ending November 21, having been transferred from Rink's No. 1, in Cincinnati , by Jerry Stamp. Kenneth Gudgeon, a supervisor, was night crew leader from September 1966 until January 4, 1967, then, inferentially, worked on the day shift, until shortly before the closing of the store, when he resigned. In addition, the Kantor group employed specialists who were on the payroll of other Kantor corporations, who acted as overseers, relative to specific functions, in the day to day operations of the store, by visiting the store at various periods of time Arnold Meade, who is described as a general manager for the Kantor group, and was identified by Milton H. Kantor as being on the Payless Discount Food's payroll, personally employed some of the management personnel and issued instructions, on occasions, to the store managers and others. Jerry Stamp, whom Milton Kantor described as being on the payroll of Payless Foods, would appear at the Steven Store, when requested by the manager, or by Meade or Morter, when they had a problem, described by Kantor as "he took care of merchandising problems, pricing, displays in the store." Harry Morter related that he acted as a supervisor of the Steven Store in two separate periods, June, July and August, 1966, and again from October 1966 until approximately September, 1967, when he was transferred to the Huber Heights Store. It was Morter's function to approve the payment of bills at the Steven store, and he was an employee of Dayton Discount at that time. Wineford Oney, described by Milton Kantor as the produce supervisor, was on the payroll of Spendless Discount Foods. Robert Ahr, described by Milton Kantor as the meat supervisor, was on the payroll of Payless Discount Foods. Kantor acknowledged that he personally hired Morter and Ahr. It is undisputed that these various supervisors would appear at the Steven Store on one or more days each week and, in the instances of Meade, Morter and Stamp would advise the manager or assistant manager as to improvements or modifications, while Oney would consult with the produce supervisor and Ahr would consult with the meat supervisor. It is undisputed that, each week, Kathy Wellman, the bookkeeper, made computations for payroll purposes, in conformity with the provisions of the collective-bargaining agreements. These lists were submitted to CPA Gradsky, who also provided a payroll service. The checks were then returned to Wellman, for her signature, or, in the absence of Wellman, the signature of the store manager. Wellman also computed and forwarded checks covering dues checkoff, and Union Welfare Fund payments. "Milton H. Kantor asserted that all three of the named managers were hired by Arnold Meade McKay's term, as manager , was from June until September 1966, at which time, inferentially , he was transferred to the Milton and Jerry store in Springfield , Ohio Reinhardt was manager from approximately September 1966 until approximately 2 weeks prior to the closing of the store, on November 21, 1967, when he was separated, as more fully considered infra While Reinhardt asserted he was hired by Milton Kantor in November 1964, and started employment in January 1965, at Florence, Kentucky , I find it unnecessary to resolve this conflict Penly succeeded Reinhardt. While Gradsky initially denied that he handled the Labor Relations Policies at the Bargain Barn Store, after June 1966, or that he contacted the Clerks Union on behalf of Respondent Dayton Discount, he acknowledged that he was in touch with the Union relative to Respondent Steven. Gradsky acknowledged advising Kenneth V. Mitchell, president of the Clerks Union, in June 1966, that the provisions of the collective-bargaining agreement with the Clerks would be complied with, however, Gradsky asserted that he made this representation on behalf of Gershow, as distinguished from Respondent Dayton Discount. Mitchell credibly related that he wrote a letter to Milton H. Kantor, under date of June 13, 1966, after talking to Les Swearingen, at the Bargain Barn Store, the same morning, in which he demanded continued recognition. Mitchell asserted that he was advised, by Gradsky, within a week, that there would be no problem. Mitchell asserted that thereafter most of the grievances were settled within the store. Mitchell did obtain Gradsky's assistance when a Health and Welfare payment was late in arriving. Mitchell and Gradsky also agreed that Wellman, bookkeeper, would sign up new members, by obtaining applications, rather than having the Union's steward interfere with employees during work time." The Events of November 21, 1967 - Creditor's Meeting - Store Closing Gershow asserted, and it appears undisputed, that after the management agreement was entered into Respondent Dayton Discount did the hiring and firing of employees, although Gershow did make recommendations 17 Gershow, who visited the store several days a week, particularly during October and November 1967, credibly related that Milton Kantor and Gradsky advised him to "keep his hands off" when he mentioned conditions of which he did not approve. It appears undisputed that, on November 15, a meeting was held at Milton Kantor's home, with Gershow, his attorneys Office, Senior and Junior, Rosenthal, Gradsky and Gerald Kantor. Milton Kantor asserted that it was his view that the store needed an additional 10 days of credit, " I find of no consequence reference in the record to picketing, in October 1967, when the Huber Heights Store opened The picketing was at that location I also find it unnecessary to set forth undisputed recitations of Kenneth J Pfarrer , of the Meatcutters , in which he detailed a cordial relationship and agreement on problems , in meetings he had with Gradsky, prior to November 1967 "1 find of no consequence the assertion of Gershow that he was advised by Glenda Hollan , assistant bookkeeper , that he was not allowed to see the check book . Gershow acknowledged that he called Gradsky who advised him to leave the girls alone, and to come to Gradsky 's office if he wanted information Gershow placed the time as 6 to 8 months prior to his testimony , which would be in August or October 1967 1 have found, supra, the management agreement , pp 2, provided for periodic reports, and, pp 6, the right to inspection and audit I do not credit the assertion of Reinhardt , who was discharged as manager, that Meade instructed him that he should not permit Gershow to look at any records I similarly do not credit Reinhardt's assertion that Wellman advised him that she had been similarly advised , in September 1966, when he became store manager, without identifying the source of these instructions, or the assertion of Reinhardt that Milton Kantor similarly instructed him "toward the last few months of this, where things got to being kind of, you might say a mixed up mess " I also do not credit the assertion of Reinhardt that "for about 2 months prior to the time all this happened" the bookkeeping office was closed "quite a bit" and Reinhardt was "more or less barred from any access," thus did not know what Morter was doing SOUTH DISCOUNT FOODS, INC. 415 which he described as approximately $90,000, because it was being put on C .O.D. by many suppliers , and it was determined that a creditor 's meeting should be held.'° Milton Kantor related that Attorney Office suggested that a pion should be prepared to submit to the creditors. Thereup4n, Kantor agreed to suspend payment of the management fee, of $300 a week , and to limit advertising cost to $500 a week, explaining this would be reduction in some weeks of as much as $400 . Kantor then suggested that Gershow waive his entire salary . Gershow responded that if he could not draw a salary out of the business he would close it.19 Kantor then suggested that Gershow agreed to reduce his salary , to show good faith to the creditors , and Gershow agreed to give the suggestion his consideration. It is undisputed that Attorney Office prepared a notice of a creditor's meeting, which was dispatched to all creditors by Gradsky. The meeting was held at Imperial House South, Miamisburg , Ohio, on Tuesday, November 21, 1967, commencing at 11 a.m . Attorney Office and Gershow were present on behalf of Respondent Steven. Rosenthal was present on behalf of Respondent Dayton Discount. Allan Gradsky, inferentially, was present on behalf of both of these Respondents . Louis Goldman was among those present as a creditor, and estimated there were approximately 65 or 70 other creditors present. Goldman credibly related that Gerald Office explained that the store had no money to continue operations and were seeking some type of accomodation with the creditors , to enable them to keep the business going. Goldman quoted Rosenthal30 as stating that the Kantor group were willing to continue management at no fee. Goldman "thought" Rosenthal also made an offer relative to free advertising for a limited period of time . Goldman asserted that Gershow then advised the group as to the fact that he had spent his life in the business , that he wanted to keep the business going because this was all he "The assertions of Kathy Wellman , bookkeeper, and Harry Morter, who approved payment of bills for a period of months ending in September, 1967, and CPA Gradsky, of the financial condition of the store stand undisputed . Wellman asserted that, each day , they paid bills which permitted a discount for prompt payment , on Wednesday they paid produce bills , on Thursday meat bills, and on Friday grocery bills. Wellman related that nothing was paid on a substantial deferred account of A H Perfect Company. Gradsky related the amount due on the Perfect deferred account was $86,948.28, of which approximately $75,000 was covered by a security agreement, which covered all of the assets in the store. The total amount due Perfect, which included a current account, approximated $130,000. Wellman related that Perfect , which supplied hard goods, reached a point where they would hold up shipment of current delivery until they received a check to cover the last week 's delivery. Wellman asserted on one occasion , which I find it reasonable to infer was in the fall of 1967, Perfect refused to ship merchandise because she had not mailed the check, as there was insufficient funds in the bank Wellman described the condition of the bank account as being that she was I week ahead of available funds, meaning that she would write checks for accounts due and then hold them for approximately I week before she had sufficient funds in the bank to permit her to mail out the payments As a result, a number of suppliers, in October and November 1967, were insisting on C O.D. deliveries. Wellman identified Pharma-Spot, Pepsi-Cola, and Mush & Sons, as included in this group The last named is a produce company. Pepsi-Cola which had sent a monthly statement, commencing in October 1967, started collecting for the prior week's delivery and, in November, went on a strictly C O.D. basis. Wellman described the procedure followed in paying bills, in July, August , and September, 1967, while Morter was in charge of these payments, as she would submit to Morter the bills she thought were most important and advised how much money there was for payment Morter described the system as they paid the ones that screamed the loudest. "The assertion of Gershow that, "I think I might have made that statement," I find unimpressive. knew and he was requesting the creditors to go along with him to keep the business going. According to Goldman, an unidentified creditor inquired of Gershow if he was willing to work for nothing. Gershow responded that he had to make a living "and the creditors had to go along with him and he was insisting that they go along with him to keep the store going."" Goldman asserted, as a result of these observations of Gershow those in attendance were reduced from 65 or 70 to approximately 10 or 12, which apparently encompassed a luncheon recess. Goldman, asserting that one of the problems was getting current inventory in order to keep it going, related that he advised Rosenthal that he would be willing to guarantee $25,000 of the creditors bills, to keep the store going, if Rosenthal could get the Kantor group and others to make similar committments. Rosenthal, according to Goldman that if Gershow would put a discussion with Milton Kantor, advised Goldman that if Gershow would put in a $25,000 guarantee the Kantor group would do the same. Goldman asserted that Gershow advised that he could not do anything without discussing it with his attorney. Thereafter, Gershow advised that his attorney "forbid him to do it." Goldman asserted that he was similarly advised by Gershow's attorney. Milton Kantor, who was not at the meeting, corroborated the assertion of Goldman relative to Rosenthal having contacted Kantor and Kantor's response. Rosenthal also advised Kantor, of the subsequent position of Gershow and Office" Gradsky corroborated Goldman's description of these events. It is undisputed that the creditor's meeting terminated without resolution of the problem. Allan Gradsky, accountant for Respondent Steven as well as Respondent Dayton Discount, and other stores operated by the Kantor group, described the condition of the Steven operation, in June 1966, at the time Dayton Discount undertook management of the Steven store, as one of insolvency. Gradsky asserted there were two definitions of insolvency, one, when total liabilities exceed total assets, the other when you are unable to meet current obligations. It is undisputed that Gradsky prepared three financial statements, the first covering the period of 1 year ending January 1, 1967, which included 5 months of the operation of the store by Great Value, the second for the period from January 1, 1967, to August 13, 1967, and the third for the period from January I to November 5, 1967. Gradsky asserted these statements were prepared without auditing prior transactions, that the auditors were not present during a given inventory, and they did not verify accounts payable, however, they were prepared from the books and records of Respondent Steven. Gradsky related that the total liabilities, on January 1, 1967, were $511,926.60, of which $259,546.74 were current accounts payable, as distinguished from deferred accounts, while current assets were $160,565.13. Common stock "While Rosenthal was present at the hearing herein, as co-counsel for the Kantor group, he did not appear as a witness I draw no adverse inference from this failure, since his testimony, it is reasonable to presume, would, at most, be corroborative of the recitations of Goldman and Gradsky, relative to the events of the creditors' meeting. "Gradsky described Gershow as advising the creditors "This is only your money, this is my livelihood." "Gershow's recitation of these events does not reflect any substantial variance from the recitation of Goldman. Gershow identified Morgan Pennington, of Pennington Bread , as the creditor who refused to go along with the extension of further credit. Gershow asserted that A H Perfect had indicated a willingness to cooperate if all other creditors were agreeable 416 DECISIONS OF NATIONAL LABOR RELATIONS BOARD outstanding was at a stated capital of $10,000, with a retained earning deficit of $248 ,780.40 . Gradsky explained the last figure as reflecting the net loss which had been sustained up until that time . Gradsky described the loss during the 52 week period as being a total of $116,000. In comparison, the financial statement of August 13, 1967, reflects total liabilities of $566,516.27, of which $333,678.52, are current liabilities, with current assets of $152,121.53, and a retained earnings deficit of $318,461 .29, or an increase of $54,600 in liabilities and a decrease of $8400 in assets. However, among the [assets] receivables, on August 13, is an item of $31,852.63, of which $21,749.83 represented the amount owed by Gershow. The statement of November 5, 1967, reflects total liabilities of $583,932 .67, of which current liabilities were $297,003.94, with current assets of $138,477.84, and a retained earnings deficit of $351,176.85. It is undisputed that the last statement contained the figures given to the creditors, by Gradsky, on November 21." Gradsky characterized the financial condition of Respondent Steven, as reflected by the November 5, 1967, report as "unquestionably insolvent." Gradsky related that he left the site of the creditors' meeting about 7 or 7:30 p.m., with the representatives of A. H. Perfect Company, whom he identified as an attorney named Chapman and an individual named West. Gradsky related that Perfect's representatives asserted they had a security agreement and desired to inspect the inventory, and requested that Gradsky turn the store over to them. Gradsky, responding that he had no authority to comply with the request , called Milton Kantor who, in turn, suggested that Gradsky call Gershow's attorney, Office. Office, according to Gradsky, advised that they should do nothing as Gershow was on his way to the store. Gradsky, upon relaying this advice to Milton Kantor, was advised by Kantor, that they should resign "because they had no more authority in the store." Kantor then dictated the form of the resignation, which Gradsky then prepared, and which provided: Due to the unresolved situation at the creditors' meeting of today, we hereby terminate our management contract between J. A. Steven, Inc. therein referred to as first party and Jack Gershow therein referred to as third party and Annabelle Gershow therein referred to as fourth party. We hereby further request immediate payment for any services rendered or any advertising provided which has not heretofore been paid. The document is signed by Dayton Discount Foods, Inc., by Allan Gradsky, assistant secretary. Among the witnesses to the signature, are Arnold Meade and Jerry Stamp. Milton Kantor corroborated Gradsky, to the extent to which he was quoted. It is undisputed that when Gershow arrived at the store, between 10 and 11 p .m., Gradsky presented him with the letter of resignation." When Gershow inquired as to the location of the cash on hand , Chudy, assistant manager, obtained and counted the money , inferentially in a safe, then the amount in each cash register , which was then turned over to Gershow. At this point Gradsky, and inferentially Respondent Dayton Discount's other representatives, left the store. "Gradsky summarized the net loss during the period from January 1 to November 5, 1967, as a total of $102,396.45 , which included an increase of $32,715 17 in the 12-week period between August 13 and November 5 "While Milton Kantor asserted he did not "partake at all in the discussions that led up to the decision to close the store," the record is to the contrary Kantor acknowledged the store closed , " - because they The following morning, November 22, between 6:30 and 7 a.m., Gershow placed a sign on the door reading "Grocery store closed until further notice." Gershow acknowledged that as the employees arrived, that morning, the door was locked. Gershow related he advised the employees as they came to the door, that they would be notified about their pay.36 It is undisputed no notice of this closing, or the contemplated closing, was given to either union, and no effort was made by any of the Respondents to negotiate with the Union relative to the effect of the closing." Mitchell, Clerk's president, unable to obtain entrance to the store, on November 22, talked to Gershow, by telephone, and was advised to call Attorney Office. Pfarrer, unable to reach either Gershow or Office by telephone, asserted, since he was leaving the city, he turned the matter over to the Meat Cutter's attorney. Thus, no demand for bargaining appears to have been made by either union to Respondent Dayton Discount or the individual Respondents, at that time. Gershow asserted he closed the store because he recognized that he could not run it without the Kantor management , asserting that he recognized that Perfect had a lien on all the merchandise and could have pulled it out the following day and that the store had been kept open because the creditors worked with the Kantor group. It is undisputed that a Petition in Bankruptcy was filed relative to Respondent Steven." Events Between Store Closing and Reopening November 22 to December 6, 1967 Louis Goldman credibly related that the day following the creditors meeting, on November 22, he was advised by the manager of Goldman's store, at the South Dixie location, that the grocery did not open. The same day, Goldman, after a telephone conversation with Attorney Office, advised Jack Gershow, by letter, of the cancellation of the lease of the supermarket at 4601 South Dixie Drive. It is undisputed that the lease was cancelled by mutual agreement. On the same day, November 22, Goldman called Larry Stein, a realtor, advising him that the grocery was out of business and they needed a new tenant , as soon as were in deep debt, and I don't believe any further credit could be established for that store " It is thus patent that Kantor knew, when he withdrew, the store could not remain open. "It is undisputed that the following week , Gershow advised each employee, by letter, that Perfect had foreclosed on their security agreement, forcing termination of operations. "While I find it of little importance, except to the extent that it corroborates other evidence, the recitation of Kathy Wellman, the bookkeeper, of the events of November 22, included the following which appears undisputed Wellman related that Gershow let her into the store and advised her that they were going to the bank to get the money that she had deposited the night before . Wellman asserted that she had written checks to cover everything in the deposit and had mailed out the checks Wellman had Chudy place a call to Arnold Meade, then related Gershow's request to Meade Meade responded that he was no longer connected with Respondent Steven , that Wellman was still so connected, and that Gershow was still her boss, accordingly Meade could not advise her. Wellman gave her A.D T card, apparently a means of gaining access to the store, to Chudy, advising Chudy to advise Gershow that Wellman had quit "It is undisputed that A. H. Perfect filed a Petition for Foreclosure of Security Interest, in the Common Pleas Court of Montgomery County, Ohio, on November 25, 1967, to which a copy of the security agreement of July 2, 1964, was attached . A waiver of appearance and consent to a decree was filed, on behalf of Respondent Steven, on November 27, 1967. A judgment entry and decree was entered by the Court, on December 4, 1967. SOUTH DISCOUNT FOODS, INC 417 possible. Goldman explained that the store operated under Goldman's trade name and as far as the general public was concerned they would not know if Goldman' s was in financial , trouble Accordingly, it was important to Goldman to get the store reopened, so that it would not reflect on his various activities." November 23 was Thanksgiving. Stein credibly related several steps which he took, in his effort to obtain a tenant . He caused a "For Lease" sign to be placed on the store door, inferentially approximately Friday, November 24. He caused an ad to be placed in the Dayton Daily News, a newspaper of general circulation, for a period of a week or 10 days, commencing, either November 24, or Sunday, November 26, which read, "15,000 sq. ft Supermarket Location available immediately adjoining large South Dayton Discount store," followed by the name and telephone number of the Realtor. On Saturday, November 25, he addressed inquiries to Kroger, A & P, and Albers, identified as three large grocery chain operators in the Dayton area. Albers' response was negative, and A. & P gave,a qualified acknowledgement, with no follow up James Sloan, real estate manager for the . Dayton Division of Kroger, Stein, and Goldman outlined negotiations which followed, which terminated apparently without a clear understanding that they were terminated. Sloan credibly related that on Monday, November 27, he made an initial inquiry of the terms of the lease, ownership of the equipment and the inventory, and the amount involved. Stein responded that the equipment was owned by Hussman Company and could be purchased from them, and the inventory was owned by Perfect, a Fort Wayne supplier, who had a lien. On Thursday, November 30, Sloan related that Kroger representatives took an inventory of the equipment, had a commercial photographer take photographs, and obtained economic data concerning population and food sales in the area. On Friday, December 1, Sloan, Boren, a Kroger associate director of property, from Cincinnati, and Morehead, a Kroger Dayton Division Construction Engineer, met with Stein and Goldman. Basic agreement-was reached on the terms of the lease, subject, however, to Kroger being able to obtain the inventory on hand at a satisfactory price. Sloan related that prior to the meeting, and again during the meeting, he tried to reach agreement with Jordan, president of Perfect, and sought to obtain the inventory at approximately 50 percent of its value, without success, as apparently Perfect was requesting 85 percent: Goldman related that a suggestion that he should absorb the difference between what Kroger was willing to pay for the inventory and the cost of it, resulted in his belief that the value of leasing the building to Kroger would be lost Goldman explained this value in terms of obtaining loans, from Banks, Building & Loan Associations, or Insurance Companies, based on the long term leases to AAA-1 tenants affording money for additional construction. It is .patent that the negotiations foundered solely on the inability of Kroger to arrange a satisfactory purchase price, for the remaining inventory." "Goldman caused a new sign to be placed on the store door, which read "Grocery closed for Remodeling - will open soon " "I find of no consequence the fact that, inferentially, at the behest of Mush & Sons, a supplier , Kantor had purchased and removed , to other Kantor stores, the perishable inventory , including meats, after an inventory, at which Gershow was present , which was taken on either Saturday or Sunday, November 25 or 26 Inferentially this reduced the value of the inventory from approximately .$65,000 to approximately $50,000 It appears undisputed that, on Sunday, December 3, Goldman called Milton H. Kantor, at the latter's home to ascertain if Kantor was interested in undertaking to operate the store at 4601 South Dixie.30 Kantor, after indicating that he was not willing to extend his credit by purchasing the fixtures, • inquired if Goldman would arrange to purchase the fixtures and rent to them to the lessee. Goldman indicated a willingness to make such an arrangement. Kantor indicated that he would discuss matter with his brothers. On Monday, December 4, Kantor advised Goldman of a willingness to enter into a lease, on terms similar to the rental of the Huber-Heights store, which Kantor had recited from Goldman 3 months previously, and, in addition, provision to be made for the rental of the fixtures. Kantor arranged for the purchase of the remaining inventory, from Mush & Sons, who had purchased it from Perfect. Kantor's purchase was based on 75 percent of the value. Kantor related that Rosenthal was instructed to prepare and file the papers essential for the establishment of the new corporate entity, Respondent South Discount.71 ' It is undisputed that Goldman , on Saturday , December 2, by letter, advised Sloan that Goldman found it impossible to work out the inventory problem , without suffering a financial loss which Goldman was unwilling to undertake Sloan acknowledged receipt of this letter . However, Sloan, it appears, continued his efforts to work out the matter of the purchase of the inventory and obtained authority to increase his offer from 50 percent to 70 percent Sloan related that he so advised Goldman, on Tuesday, December 5, and that Goldman responded that he might be interested and would have a meeting with his brothers and further advise Sloan Sloan asserted that on Wednesday, December 6, in a telephone conversation, Goldman advised him that one of Goldman 's relatives had had a heart attack and that he had not been able'to meet with his brothers , but would be in touch with Sloan On December 7-Sloan visited the location of the store, saw delivery trucks unloading meat and grocery products, and not having heard from Goldman, advised his superiors that the deal was dead Sloan acknowledged that the last time he had talked to anyone at Perfect was on Friday, December 1, and thereafter he had been unable to reach either Jordan or the attorney for the Perfect Company , Tom Chapman. Goldman's concern about his "public image" probably explains his failure to advise Sloan of his negotiations with Kantor , which follow "I credit Goldman's assertion that this was the first time he approached Kantor relative to the leasing of this store "In view of the undisputed evidence that Goldman sought , and almost succeeded , in obtaining Kroger as a tenant for the 4601 South Dixie location, I find incredible the inference which might, under different circumstances , be drawn from the testimony of some of the witnesses for General Counsel , from which it could be implied that the closing of the Steven store was a calculated manuever, on the part of the Kantor group, by reason of union labor costs, and union labor contract conditions, to divest the employees of union representation , and to permit 'the Kantor group to become a successor without the impediment of the union labor agreement In so finding, I place particular reliance on the assertion of ,Goldman that he did not contact Kantor, relative to rental of the South Dixie location, prior to December 3, 1967 There is not a scintilla of evidence that Goldman has any financial interest in the Kantor enterprises, or vice versa Reference is made particularly to the recitation of Reinhardt ; discharged store manager, of alleged conversations he had with Morter, commencing in June 1967 , to the effect that there was talk of closing the store for a period of time and "they felt that it would take at least 30 days to get rid of the Union " Reinhardt , after asserting that these conversations, with Morter, followed telephone conversations between Morter and Gradsky, acknowledged that he had been excluded from the office, by Morter, during the telephone conversations I credit Morter's denial of these alleged conversations I also find Reinhardt's antipathy, resulting from his discharge, without explanation, toward the Kantor group, while denied, was thinly veiled. I make the same finding , for the same reasons, relative to Reinhardt's alleged discussions with Morter, in June, July, August, and September, relative to the fact that a double time provision for Sunday work was due to go into effect, that Reinhardt, his assistant, the bookkeeper, and the other employees would be transferred to other stores, at the same rate of 418 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The Events of December 6, 1967 - Union's Request for Employment of Employees It is undisputed that the Kantor group began preparations for reopening the South Dixie store on December 6, 1967, when merchandise was delivered, and, inferentially, new employees were retained.32 President Mitchell, of the Clerks, was advised by telephone, by Patti Bowell, on December 6, that they were taking merchandise into the store and that people were working in the store. Mitchell, accompanied by Braden, vice president of the Clerks, and Pfarrer, national secretary and treasurer of the Meat Cutters, went to the store and observed a number of people cleaning, and outside vendors stocking such items as Pepsi -Cola, 7-Up and Coca-Cola. Mitchell credibly related that he encountered Jerry Stamp who, in turn, called Arnold Kantor. Mitchell inquired if the store was going to reopen and Arnold Kantor advised that it was, but that the time of opening was up to his brother Milton. Arnold Kantor then introduced the Union representatives to Arnold Meade. The union representatives then advised Arnold Kantor and Arnold Meade of their identity as representatives of the Unions and inquired why the employees had not been "called back to work" to help clean and get the store ready to open. Arnold Kantor responded that he did not know, that they would have to talk to his brother Milton. Meade left the meeting, and a few moments later Pfarrer was called to the telephone. Pfarrer credibly related that the telephone call was from Gradsky, who advised Pfarrer that he did not invite Pfarrer into the store and that unless he left he would be arrested for trespassing. Pfarrer communicated this pay, but not as members of the Union, all of which was denied by Morter In so finding, I have also considered the recitation of Gradsky , from an analysis of comparative labor costs between several of the Kantors ' stores, that the labor cost as the 4601 South Dixie store was not out of line with the labor cost, percentage-wise, of other Kantor stores I find it unnecessary to set forth the specific figures which appear in the record. Reinhardt acknowledged there was a meeting of store managers , in June 1967, the purpose of which was consideration of reduction of payroll costs in all stores, and the consideration of cutbacks in personnel, during the summer season. I similarly do not credit Reinhardt 's recitation that, in September 1967, Morter instructed Reinhardt to make up a list of people who could be transferred to other stores "without jeopardizing the stores," inferentially those who were not strongly prounion . It is undisputed that there were union security agreements in effect How Reinhardt was supposed to differentiate between nominal members and strong advocates stands unexplained. Morter denied this conversation and I credit his denial. Reinhardt, who earlier had testified that the first conversation about closing the store to get rid of the Union was with Morter, in June, later attributed such conversations to Milton Kantor and Meade, without giving the specifics, except to state that it was "around September or October of 1967 - when all the talk started about closing the store " Reinhardt was thus clearly self-contradictory on timing Reinhardt , in turn , placed the financial problems of the store as being due to excessive sales of what are called in the trade "loss leaders " Reinhardt asserted that, in an unspecified week , they would sell Pepsi-Cola, which cost 39 cents, at the price of 39 cents, and such items would represent a total of $14,000 in total grocery sales of $43,000 leaving a balance of only $29 ,000 with normal gross profits However, Reinhardt asserted weekly sales increased from an average of $26 ,000 to $32,000, in September, 1966, to an average of $67,000 or $68 ,000 in October, 1967. 1 find it unnecessary to attempt reconciliation of the last average with the asserted sale of $43,000 Respondents made no effort to contradict these assertions of Reinhardt "The term "new employees" is intended to mean that none of the employees who had been discharged on November 22, had been recalled, a fact which is undisputed The number of employees at the new location is obscure message to Mitchell, in the presence of Meade. Mitchell related that they advised Meade that they were union representatives for that store, that they had a right to be there to find out what was going on "because of our members." Meade advised that if they did not leave he would personally throw them out. Upon being invited to carry out his threat, Meade asserted he was going to make a telephone call and, if he was told to throw them out, he would throw them out. Meade returned and advised if they did not leave he would call the police. Thereupon the union representatives left." It is undisputed that none of the 35 employees, formerly employed at 4601 South Dixie, have been employed by Respondent South Discount, at that location.34 On December 8, 1967, by letter to Milton H. Kantor, Mitchell called attention to the fact that Kantor had operated the store at 4601 South Dixie, and had recognized the Clerks as the exclusive bargaining agent for the employees, with stated exceptions. The letter noted that the store was closed without notice to the Union and the employees terminated, that the Union requested a meeting, by letter to Gerald Office, which remained unanswered. The letter then asserted that it appeared that Kantor was preparing to reopen the store, "without honoring your obligations to the employees and the Union." The letter then asserts that the Union holds Kantor responsible for the failure to negotiate concerning the closing of the store, and its effect upon the employees, that Kantor is obligated to continue to recognize the Union, and the terms of the existing collective bargaining agreement, and requests the recall of the employees. On December 19, 1967, Mitchell advised Kantor, by letter, that he had not received an answer to the letter of December 8, and again requested recognition of the Union and restoration of the collective-bargaining agreement. The letter then notes that when the store was reopened, on December 12, a whole new complement of employees were engaged . The letter then asserted that this constituted a "lock-out" and breach of contract and requested resort to the dispute procedure provided for in the contract. On December 19, 1967, Rosenthal, by letter, advised Mitchell that Respondent South Discount is not a successor to or in any way connected with the previous "owners" of the supermarket. The letter then states that Respondent South Discount has no obligation under the terms of any collective bargaining agreement the Union may have had with Respondent Stevens, and was not required to recognize the Union as the representative of its employees. Pfarrer related that he returned to the store, on December 7, with Asher Bogin, whom he identified as an attorney for LMG Investments, the landlord. Bogin's concern was the establishment of a picket line, set forth in "Neither Arnold Kantor nor Arnold Meade appeared as witnesses, and the recitation of these events stands undisputed , except to the extent that Gradsky was quoted While Gradsky acknowledged discussing the employment of the former employees at the store location, "shortly after the other store opened," with Mitchell, the time and content of the conversation are obscure Gradsky did not deny the assertions of Pfarrer, relative to the telephone conversation of December 6. I find it unnecessary to treat with a meeting between Pfarrer, Gradsky, and others, under orders of Judge Weinman , of the Common Please Court, which, was inconclusive, insofar as the questions presented herein are concerned "Employment at other locations, and the reasons advanced by Respondents for failure to employ, are considered infra SOUTH DISCOUNT FOODS, INC. more detail infra, which might affect the adjacent operations. Pfarrer asserted that he had advised Bogin that they would not remove the pickets until they had assurance, that the employees would be returned to work. Bogin accompanied Pfarrer into the store to discuss the problem with Arnold Kantor. Pfarrer related that Kantor acknowledged that he was in charge of the store, but advised that the problem was up to his brother Milton, and the question would have to be directed to him. It is undisputed that picketing commenced December 7, and was continuing at the time of this hearing , as more fully explicated infra. Interference, Restraint, and Coercion 1. Employment applications The complaint alleges that, on or about November 7, 1967, Respondents negotiated directly with employees by requesting them to sign new applications for employment, without notice to or discussions with the Unions. Kathy Wellman, bookkeeper, acknowledged purchasing employment applications from an office supply house, by reason of a suggestion of Arnold Meade. Wellman asserted that Meade advised her that she had "such crummy payroll records" that she should have the employees fill out new applications, that this was being done at the request of the insurance company. Wellman then explained that when she started work at the store, in June 1966, a number of the employees were already employed and their prior applications were in possession of the predecessor, Great Value. Wellman distributed the application forms at a department head meeting, requesting each department head to have the employees fill out the applications. Wellman acknowledged that there were a number of objections to filling in the form, with particular reference to its heading "Application for Employment," and a statement appearing immediately above the line for signature which reads: I authorize investigation of all statements contained in this application. I understand that misrepresentation or ommission of facts called for is cause for dismissal. Further, I understand and agree that my employment is for no definite period and may, regardless of the date of payment of my wages and salary, be terminated at any time without any previous notice. Wellman asserted, in answer to the objections, that she advised that the employees could scratch out the objectionable features, which most of them did. Mary Rose Wagers was given such an application by Tom Scarbrough, head of the meat department, a couple of weeks before the store closed. Wagers related that Lelia Baker, a meat wrapper, talked to Pfarrer, of the Meat Cutters, who later advised them to cutoff the heading and scratch out the objectionable language above the signature line, before filling in the application. ' Pfarrer related that, after receiving the call from Baker, he had a discussion with store manager Reinhardt, who advised him that the instructions to have form filled out originated with Gradsky. Pfarrer acknowledged that he was later informed that the objectionable language was stricken, by the employees, prior to their signing the applications. Pfarrer acknowledged that the employees were advised that the sole purpose of the form was to obtain the current address and telephone number of each employee. "While Lelia Baker appeared as a witness she was not questioned relative to this matter. 419 It thus appears uncontroverted that the sole purpose of the distribution of the "Application for Employment" forms was to enable Wellman to obtain up to date addresses and telephone numbers of the employees. Accordingly, I will recommend dismissal of the allegations of paragraph 12(f) of the complaint. 2. Picketing arrests It is alleged, in the complaint, as amended, that commencing on or about December 12, 1967, and on various dates thereafter, including December 29, 30 and January 2, 1968, Respondents engaged in conduct violative of Section 8(a)(1), by ordering representatives of the Clerks and employees off Respondents' premises and having them arrested while said representatives and employees were engaged in picketing. It is undisputed that picketing, on behalf of the employees represented by both unions, commenced on December 7, 1967, but at that time was confined to the four or five entrances to the parking lot, from the adjacent streets. There is a large parking lot, commonly used by all the employees and customers of the adjacent stores as well as the store in question. There is a walk which runs in front of the main entrance to the "Bargain Barn Foods," which runs continuously to the adjacent Goldman's store on one side and a Do-nuts shop which is adjacent on the other side. There appears to be one entrance and one exit door to the Food shop, controlled by treadle's, for automatic opening and closing. It is undisputed that when the store opened, for customers, on December 12, the picketing at the entrance to the parking lot was maintained, with one picket at each entrance, and in addition, other pickets, with picketing signs took up a station approximately at the entrance and exit doors. It is undisputed that three of Respondents' agents, Jack Cunningham, store manager commencing December 12, 1967, and continuing until later January 1968, Harry Morter, and Arnold Meade, swore out warrants alleging trespass, as the result of the picketing, against specific employees and Clerk's representatives, on various dates commencing December 11, to and including January 2, 1968. Warrants were obtained by Meade, all on December 11, resulting in the arrests of employees Fritts, Hines, and Stone, and also Clerks' President Mitchell. Warrants were obtained by Morter, all on December 12, resulting in the arrests of employees Hollan, Justice, and Diana McKnight. Warrants were obtained by Cunningham, on December 30, resulting in the arrests of employees Bowell, Fritts, Howard, and Justice, and also Clerks' President Mitchell. Warrants were obtained by Cunningham, on January 2, 1968, resulting in the arrests of employees Baker, Cordray, Fritts, Hammond, Justice, Magill, Diana McKnight, Sprague, Stone, Strong, and Wagers, and also Clerks' Representatives Braden and Van Dam." In each instance the place of the alleged trespass was 4601 South Dixie Highway, described as Goldman's parking lot. It is undisputed that, in all cases, the respective Union posted the essential bond, jury trials were requested, and all cases were pending at the time of "The record indicates that two warrants were issued on January 2, for Magill There were thus 26 warrants in all, against 2 members of the Meat Cutters, Baker and Wagers , 13 members of the Clerks, and 3 Clerks' representatives. Three warrants,, each , were obtained against Fritts and Justice, and two warrants were obtained against Magill, Diana McKnight, Stone, and Mitchell. 420 DECISIONS OF NATIONAL LABOR RELATIONS BOARD the hearing herein. I turn next to consideration of the Respondents' evidence relative to misconduct on the picket line, which purportedly was the underlying cause for the securing of the warrants, and the evidence by witnesses for the General Counsel and Charging Parties, to the contrary. Since Meade did not appear as a witness, there is no explanation as to the reason he swore out warrants for the arrest of Mitchell, Fritts, Stone and Hines, all on December 11, before the store opened, and before there was any activity involving customers. Morter described the condition existing on December 12 as the pickets were "walking in front of the entrance and exit , carrying signs, waving signs , hollering at the customers , hollering in the door, stepping on the electric door treadle, hollering in the store." He identified Jane Stone, Carmen Hines, and Brenda Fitts, who were present in the court room, as having engaged in this conduct . Morter asserted that, when he was accompanying Milton Kantor to breakfast, Jane Stone called Kantor "a no good Jew and a Kike." Kantor, corroborated the assertion of Morter, relating Stone said "something about Kike."37 It is undisputed that it was Meade, on December 11, not Morter, who obtained warrants for Fritts, Stone, and Hines . It, thus , must be concluded that the events described by Morter were unrelated to the warrants obtained a day previously. Morter asserted that he swore out warrants for Hollan and others whom he could not identify. He asserted these individuals were standing in front of the door, so that the customers could not get in or get out, standing on the treadle, causing the doors to open and screaming and hollering . Morter asserted he asked them not to block the entrance, but they refused to leave." Gradsky asserted that as he approached the store on December 12, Stone, who was standing in front of the doorway , pushed a picket sign in his face and pushed him off the sidewalk. Stone denied having engaged in this conduct. Milton Kantor asserted that as he approached the store, on December 12, he "knocked so somebody would open the door" and Patti Bowell advised him "they won't let you in there, you Christ killing Jew bastard." Bowell was not called as a witness . The only warrant sworn out for Bowell was sworn out by Cunningham on December 30. Gradsky asserted that, on December 12 or 13, he saw Delilah Alsept, in the store, with a special policeman following her. Gradsky then described the event as "she went over and swung at him and he took hold of her and brought her up to the front of the store and held her for the Moraine police." There is no record of an arrest of Alsept in this record. Alsept was not called as a witness . Gradsky asserted that he saw Sandy Hipsher come in the front door and yell and holler, saw her go through the store on a couple of occasions , and believed that it was Hipsher, who, while picketing stood on the door treadle and hollered into the store, "It takes a dirty s-o-b to shop in this store." Hipsher did not appear as a witness and no warrant was ever obtained for her arrest, insofar as this record reflects arrests . Since none of these events, if they did occur, are asserted to have resulted in the securing of a warrant against the named individual, by reason of the asserted misconduct, I find it unnecessary to "While Stone denied seeing Kantor, on December 12, she acknowledged that she engaged in picketing on that date Since the episode is unrelated to the warrant issued , I find it unnecessary to resolve the credibility conflict "Justice and Diana McKnight were not ipentified by Morter as having engaged in misconduct, but with Hollan, were the three for whom Morter obtained warrants, on December 12. Hollan did not appear as a witness evaluate credibility. Cunningham, who commenced his employment, at 4601 South Dixie, on December 6, asserted that the picketing started on December 7. I infer from Cunningham's testimony that no picketing at the store entrance took place on Monday, December 11.39 Cunningham asserted that, on December 13, he observed approximately six pickets standing on the door treadle, causing the door to remain open, and it was cold weather. When a customer attempted to leave the store, by the exit door, they would stand on the treadle, and cause the customer's cart to run into the door, which would not open because of the weight on the outer treadle. Cunningham identified Sandy Hipsher, Patti Bowell, and Tim Strong as employees engaged in this conduct. In addition, Cunningham asserted that Robert Reedy, Delilah Alsept, and Hipsher, went into the store and hollered such epithets as "bastard, dirty s-o-b, and dirty scab." Cunningham asserted that Hipsher, about December 21 addressed an invective, to Cunningham's wife, who was working in the store, implying a lack of chastity. Cunningham asserted that Strong, about December 23 or 24, referred to Cunningham as "a dirty Jew lover and a dirty scab.' 40 Cunningham acknowledged swearing to the warrants issued on December 30 and January 2 and asserted that the named employees were blocking the entrance to the front of the store, or alternatively using profane language, and these were the only types of misconduct engaged in, which motivated Cunningham to obtain the warrants. Cunningham identified Union Business Agents Braden, Van Dam, and Mitchell, as also blocking the entrance of the store. Cunningham asserted that he was advised by the Chief of Police of Moraine that there was no disorderly conduct warrant ordinance in Moraine. It was for this reason that he obtained trespass warrants .41 Contentions of Parties and Concluding Findings I consider first the allegations of the complaint which assert the termination of the employees, on November 21, and the later failure to hire, or rehire, was discriminatorily motivated. It is undisputed that Respondent Steven filed a Petition in Bankruptcy, and went out of business. The Supreme Court, in the Darlington case," has held that when an employer closes his entire busihess, even if the liquidation is motivated by vindictiveness toward the Union, such action is not an unfair labor practice. Accordingly, I will recommend dismissal of the allegations which relate to Respondent Steven. "Cunningham asserted that the picketing was moved to the entrance to the store on the day the store opened Cunningham also asserted "I wasn't there the opening day. I was there the second day " While Cunningham's observations relative to the opening day was thus obviously hearsay, his knowledge of the picketing the day prior to the opening does not fall into the category "It is patent that no warrants were obtained , by Cunningham, on any date prior to December 30, and none were obtained, at any time by anyone, against Hipsher, Alsept, or Reedy While Cunningham asserted there were acts of vandalism, which took place in the parking lot and in the store, on various dates in December and January , he was unable to identify any employee engaging in this misconduct 4'1 do not credit Cunningham's explanation of the reason for his failure to effect arrests, for alleged misconduct, between December 12 and 29 Cunningham asserted he made numerous calls to the Moraine police, who refused to make arrests and only "warned the people." Cunningham asserted he did not sign complaints because the police would not accept them On December 30, he went to the Kittering Court and signed affidavits. "Textile Workers Union of America v. Darlington Manufacturing Co, 380 U.S. 263, 274 SOUTH DISCOUNT FOODS, INC. 421 General Counsel urges that Respondent Dayton Discount, and the individual Respondents, were joint employers, with Respondent Steven, of the employees at the South Dixie store, from June 1966 to November 21, 1967. The liability of the individual Respondents is considered infra. The Supreme Court, in the Greyhound case," held that the question of whether Greyhound possessed sufficient control over the work of the employees to qualify as a joint employer - is essentially a factual issue. Subsequently the Board found that Greyhound and Floors were joint employers, on the premises of the common control exercised over the employees." Factually, General Counsel relies on the management agreement, between Respondent Steven and Respondent Dayton Discount, and particularly paragraph 1, thereof, which, I have found, provides inter alia: That Respondent Dayton Discount will manage and operate the store, hire and fire all personnel, and establish the supermarket policy, all to the exclusion of Respondent Steven. By way of implementation of this agreement, it is undisputed that the Kantor group provided not only the supervisors in direct charge of daily operations, and the store employees, but also the specialists, on the payroll of other Kantor corporations, who acted as overseers, relative to specific functions, in the day-to-day operations of the store, all of whom were responsible solely to the Kantor group, as distinguished from Gershow. Respondents assert that Respondent Dayton Discount resigned as managing agent, on the evening of November 21, and that the store did not close until November 22, thus it could not be considered the "employer" of the Steven employees, since it had severed its connection and the responsibility had reverted solely to Respondent Steven. I find no merit in this contention. It appears undisputed that the normal store hours were 9 a.m. to 9 p.m Gradsky placed the time of resignation of Respondent Dayton Discount as between 10 and II p.m., on November 21. The store did not open for business on November 22. Thus, the last day it was open it was under the management and control of Respondent Dayton Discount and the Kantor group." Accordingly, I Find Respondent Dayton Discount was a coemployer, with Respondent Steven, when the Bargain Barn Store ceased operations, on November 21." The record, in my view, establishes an economic motivation for the closing of the store which was involuntary in nature." I find no merit in the assertion of General Counsel, in his brief, that the record establishes that Dayton Discount, "Boire v Greyhound Corporation. 376 U S 473, 481 "The Greyhound Corporation, etc , 153 NLRB 1488, 1492, enfd 368 F 2d 778 (C A 5). Accord Freda Redmond and Sir James, Inc, 147 NLRB 1025, Hoskins Ready-Mix Concrete, Inc, 161 NLRB 1492, Harvey Aluminum Incorporated, etc, 147 NLRB 1287 "1 find of no consequence the fact that Gershow , who advised the employees of the reason underlying the closing , signed the final payroll checks "It is patent that the Kantor group knew that Gershow would be unable to continue operating , in view of the outcome of the creditor's meeting and the action of Perfect, at the time of resignation Milton Kantor acknowledged Gradsky advised him Perfect was at the store "to foreclose on their security agreement " "I find no merit in the assertion of General Counsel that the Kantors "purposely precipitated" the closing,"m not extending credit to creditors " It is not the function of the Board to substitute its judgment on business decisions including the Kantors, as a predecessor - joint employer was motivated to close the supermarket and to terminate all employees en masse in order to get rid of the Unions (underlining in brief). If a conspiratorial plan existed, by prior design, to permit the Kantor group to succeed Steven, as owners, the advance commitment of Goldman was an essential. I am quite unable to comprehend why Goldman would retain Stein, and go through negotiations with Kroger, merely as a cover. I have credited the assertion of Goldman that he first contacted Kantor, relative to this store, on December 2. The conspiracy concept appears to have been stillborn Accordingly, I will recommend dismissal of those allegations of paragraph 7, of the complaint, which relate to motivation for the termination of the employees I have found, supra, that, on December 6, Mitchell, of the Clerks, and Pfarrer, of the Meatcutters, having been advised that the store was being restocked for reopening, went to the store, sought out Arnold Kantor who was in charge, and requested information as to why the members of their respective units had not been called back to work. This conversation terminated with the invitation from Gradsky to either leave or be arrested for trespassing. Other Kantor specialists identified as being present included Arnold Meade and Jerry Stamp. Pfarrer, accompanied by Gogin, returned to the store on December 7, and renewed his request, to Arnold Kantor, that the Meat Cutter employees be returned to work. Subsequently, on December 8, Mitchell, by letter to Milton H. Kantor requested, inter alia, the recall of the employees. It is undisputed that not one of the 35 employees was hired by Respondent South Discount .„ Respondent advanced no cogent reason for its failure to employ a single nonmanagement employee, who ceased working when the store closed. Respondent asserts none of these employees made application. The establishment of a picket line, on December 7, by reason of this failure to hire, as well as the requests of the Union representatives, are undisputed facts. The law does not require performance of a vain act.'9 Respondent urges misconduct on the picket line. These events followed the refusal to hire and could not be a justification for the blanket refusal. However, misconduct as it may effect the appropriate remedy, as to individuals, is considered infra 50 I find significant the absence, and complete void, in the extensive testimony of Milton Kantor, of any explanation for Respondent's failure to employ a single applicant. That the Steven-Dayton Discount employees, as applicants- for employment by South Discount, were employees within the meaning of the Act is well "I find of no consequence the fact that Serbantez has since been employed at the Gettysburg store, by Respondent Dayton Discount, commencing April I, 1968 The allusion of Pfarrer to the "disposition of three of the people we had left," falls in the same category "i find it unnecessary to treat with the assertion that General Counsel did not produce evidence of a need for employees when Mitchell's letter of December 8 was received Such an assertion , with the known turnover in the grocery business, and in the light . of the demands on December 6, can only be considered frivolous The same conclusion must apply to Respondents effort to distinguish between those who were or were not members of the Clerks on November 21 Respondent South Discount, and the Kantor group, knew and had the means of knowing the identity and abilities of each of these employees "it appears that Respondent has abandoned an extensive effort during the hearing to show that alleged widespread pilferage was a defense to failure to hire It is undisputed that those who purportedly engaged in such conduct were no longer employed on the closing date Respondent made no effort to prove such misconduct against any of the alleged discriminatees herein 422 DECISIONS OF NATIONAL LABOR RELATIONS BOARD established. Phelps Dodge Corp. v. N.L.R.B., 313 U.S. 177, 183-187, 191-192. In Piasecki" the Board found. Respondent was determined at all costs to avoid hiring the Bellanca employees who were associated with the Union, the employment of whom in large numbers would have resulted in Respondent's being saddled with a union majority and the obligation to bargain. In the New England Tank case' the Board rejected an asserted defense that the predecessor's experience of "unexplained losses" justified a refusal to hire . The court, in affirming, held the question was whether substantial evidence supports the finding that antiunion animus was the motivation, "for it is well settled that an employer who discriminates against applicants for employment because of their union membership or activities violates Section 8(a)(3) and (1) of the Act. " ' Next considered is the evidence relating to motivation. I have found no unfair labor practice committed by Respondents in the management of the Steven store, prior to November 21, 1967. The Supreme Court, in the Bryan case,s' has held that where occurrences within the 6-month limitations period in and of themselves may constitute, as a substantive matter, unfair labor practices , earlier events may be utilized to shed light on the true character of matters occurring with the limitations period ; and for that purpose Section 10(b) does not bar such evidentiary use of anterior events. Next set forth are the cases in which the Kantor group have been found to have engaged in a variety of violations of the Act.S6 In the Ontario cases, the Board found Respondents engaged in coercive interrogation and threats, created the impression of surveillance , made offers of bribes and promotions to employees if they would engage in surveillance or vote against the union, discriminatorily discharged employees and discriminatorily reduced hours of employment of employees. In the Priced-Less cases, the Board found Respondents engaged in coercive interrogation , unlawful promises of benefit, widespread solicitation of withdrawal of union authorization cards, and caused the arrest , for trespassing, of a union business agent engaged in protected activity on Respondent's parking lot. In the first Priced-Less case the Board found Respondent "completely rejected the collective-bargaining principle" and issued a bargaining order. The Board, with court approval, has, in numerous cases, pierced the corporate veil, pursuing alleged bona fide successors, alter egos, and individuals , in fashioning an adequate and meaningful remedy, a duty imposed by Section 10(c) of the Acts` The Supreme Court, in the Deena Artware cases' held, inter alla: "Piaseckl Aircraft Corporation, 123 NLRB 348, 372, enfd. 280 F.2d 575 (C.A. 3), pet. for review denied 316 F.2d 239 (C.A 3), cert. denied 364 U.S. 933 and 375 U.S. 827. "New England Tank Industries. Inc., 133 NLRB 175, 183, enfd. 302 F.2d 273 (C.A 1), cert, denied 371 U.S. 875. "Id. at 275. Citations omitted Accord: TI L Sportswear Corporation. 131 NLRB 176, enfd . 302 F.2d 186 (C.A.D C.) "Local Lodge No 1424 v. N L.R. B. (Bryan Manufacturing Co.). 362 U.S. 411, 416. "The first two cases involved Ontario Foods, in Cincinnati , with Milton Kantor as president and Arnold Meade as store manager . These cases are reported at 144 NLRB 1057, and 149 NLRB 1528. The second two cases involved Priced-Less Discount Foods, in Springfield, Ohio, and are reported at 157 NLRB 1143, and 162 NLRB No. 75; in which Gerald Kantor, coowner, personally, was found to have engaged in some of the violations. "E.g., Oriole Motor Coach Lines, Inc., 114 NLRB 808; NL.R.B. v. Whether one corporation is liable for the obligations of an affiliate turns on other considerations. The insulation of a stockholder from the debts and obligations of his corporation is the norm, not the exception. Yet - "Dominion may be so complete, interference so obtrusive, that by the general rules of agency the parent will be a principal and the subsidiary an agent. Where control is less than this, we are remitted to the tests of honesty and justice." That is not a complete catalogue. The several companies may be represented as one. Apart from that is the question whether in fact the economic enterprise is one, the corporate forms being largely paper arrangements that do not reflect the business realities . One company may in fact be operated as a division of another; one may be only a shell, inadequately financed; the affairs of the group may be so intermingled that no distinct corporate lines are maintained. Accordingly, for the reasons set forth, I find the failure to hire any of the 35 employees, named supra, upon the request of the union representatives, was discriminatorily motivated and violative of the provisions of Section 8(a)(3) and (1) of the Act. I further rind the failure to hire is chargeable to Respondent South Discount and to Milton H. Kantor, Gerald Kantor and Paul Kantor, the last three as individuals. Since Arnold Kantor owns no stock, and his sole involvement was that of a supervisor, I will recommend dismissal of the complaint as to him. Next considered are the allegations of conduct violative of Section 8(a)(5). It is alleged that Respondent Dayton Discount, by closing the store, on November 21, eliminated the work of the employees without prior notice to or discussion with the Unions. Numerous Board and Court decisions have held that an employer is under a duty to notify and bargain with the Union on the effects of a contemplated closing, and unilateral action without such notice has been held to be violative of Section 8(a)(5) of the Act." It would appear, however, that since Respondent Steven was insolvent, and filed a petition in bankruptcy, such a notice, or bargaining session would be an exercise in futility. Preferential treatment in bankruptcy is limited, in this respect, to wages due and owing, as distinguished from newly created obligations. It cannot be urged that Respondent Dayton Discount was under a duty to look elsewhere for funds to meet any agreed upon solution . I will, for the reasons stated recommend dismissal of paragraph 12(c) of the complaint.59 Respondent South Discount, and the individual Respondents, are alleged to have failed to recognize and bargain with the Unions, commencing December 6, 1967. General Counsel urges that Respondent South, and the Kantors, "if" a bona fide successor had a statutory duty to recognize and bargain with the Unions.'° Alternatively, General Counsel urges "the transfer of the business" from the joint employers, Respondent Dayton Discount and Stevens, requires a finding that Respondent is not a bona Tempest Shirt Manufacturing Co., 285 F.2d 1 (C A 5); John Wiley & Sons. Inc. v. Livingston, 376 U.S. 543 , 549; Perma Vinyl Corporation, etc, 164 NLRB No. 119; N.L R.B v U.S Air Conditioning Corp., 302 F.2d 280 (C.A. 5); N L.R B v Ozark Hardwood Company. 282 F 2d I (C A. 8). "N L R.B v. Deena Artware , Inc., 361 U.S. 398, 402-403 "E.g., Winn-Dixie Stores, Inc, 147 NLRB 788, enfd. in pertinent part 361 F 2d 512 (C.A 5); Town & Country Manufacturing Co., 136 NLRB 1022, enfd 316 F 2d 846 (C .A 5); Pepsi-Cola Bottling Company of Beckley, Inc., 145 NLRB 785 " "Cf. Ramada Inns, Inc.. 171 NLRB No. 115. Citing: Chemrock Corporation, 151 NLRB 1074, 1077-81; SOUTH DISCOUNT FOODS, INC. fide successor . The fact is there was no transfer of trade name or goodwill , or even an alleged purchase between the predecessor, bankrupt, and the subsequent operator. While some of the supervisory personnel were transferred to other Kantor stores , and the specialists continued normal activity, in other Kantor stores , these facts alone are insufficient to support a finding of successorship. I have rejected, supra, General Counsel's conspiracy concept . The authorities relied upon are inapposite. I conclude and find that South Discount is not a successor to Stevens within the meaning of the Act. Cf. Piasecki Aircraft Corporation , supra. Alternatively, General Counsel urges that "shorn of paper arrangements , paper terminations , and paper transfers from one corporate sheild to another, South Discount, including its officers and stockholders, the Kantors, stands out as an alter ego of Dayton Discount, a predecessor joint employer ."" While I have found , supra, that Respondent Dayton Discount was a coemployer, and the Kantors are chargeable with knowledge thus obtained, nothing was transferred from Respondent Dayton to Respondent South . The cases cited are inapposite. The record is barren as to the number of employees hired by Respondent South Discount , on and after December 6. It would appear reasonable to find that the letters of Mitchell to Milton Kantor , on December 8 and 19, 1967, constituted a request for recognition and bargaining . No such demand from Pfarrer appears. However, since I have found that South Discount is not a successor to Steven , and there is no proof the Unions represented a majority of the employees , in each respective appropriate unit, on or after December 6, 1967, Respondent South Discount was not under an obligation to recognize or bargain with either union . Piasecki Aircraft Corporation , supra at 349; cf. Ramada Inns, Inc., supra. Accordingly, I will recommend dismissal of the allegations of paragraph 12(a), (b) and (d) of the complaint. There remains the question of whether the arrests, for trespassing, constituted interference, restraint, and coercion. The Supreme Court, in the Logan Valley case," held that peaceful picketing of a business enterprise within a shopping center, where the property is open to the public generally, and where the picketing is unaccompanied by either threats or violence, is not subject to the restraint of state law of trespass . However, the Court observed that the regulation of the manner in which handbilling, or picketing , is carried out does not mean that either can be barred under all circumstances . Id. at 2212 . The Court also observed that no challenge was made to the portion of the injunction, issued below , related to "blocking access by anyone to respondents' premises." Id. at fn. 4. Respondents , in their brief, urge that the pickets were engaged in a course of misconduct , interference with customers and employees, which constituted unprotected activities. General Counsel asserts that "irrespective of the validity of the arrests under state law, "Respondents' Maintenance Incorporated, 148 NLRB 1299; Johnson Ready Mix Co., 142 NLRB 437. "Citing. Reynolds Pallet & Box Co. v. N L.R.B., 324 F.2d 833, 835 (C A 6) (sole proprietorship converted to a corporate enterprise ); Garvin Corporation, et at., 153 NLRB 664, 667 , 680, enfd . 374 F.2d 295 (C.A D.C ), cert. denied 87 S.Ct. 2074 ( runaway shop). "Amalgamated Food Employees Union v . Logan Valley Plaza, 391 U.S. 308 423 conduct in causing the arrests of union representatives and members interfered with organizational and concerted activities 63 The Board has found that decisions of the Supreme Court have made clear that the Act does not preclude States from exercising their traditional police power and injunctive control over unlawful conduct that may be committed during the course of a strike. Texas Founderies, Inc., 101 NLRB 1642, 1689. The Board has found violative of Section 8(a)(1) the securing of warrants, by officers of a Respondent, who were without personal knowledge, and who made no effort to ascertain the presence of the accused at the time of the alleged offense. The Board concluded that Respondent was primarily concerned with interfering with and restraining its employees. The W. T. Raleigh Company, 90 NLRB 1924-1925. Similarly, the Board rejected, as insufficient to constitute misconduct so flagrant as to remove the protection of the Act, language attributed to strikers, underlying Respondents securing arrests for trespass. New French Benzol Cleaners and Laundry, Inc., 139 NLRB 1176, 1181-82. The question to be resolved thus is whether the credible evidence would support a finding that the individuals against whom the warrants were obtained were, at that time, engaging in threats , violence, or blocking of access to Respondent's store. The question of misconduct barring usual remedies is properly considered infra, under Remedy. I have found that Arnold Meade obtained warrants, on December 11, resulting in the arrests of Fritts, Hines and Stone, employees, and Clerk's President Mitchell, for trespass. Meade did not appear as a witness. It is undisputed that picketing on the parking lot did not occur before December 12. Meade, as store manager, personally engaged in conduct in contravention of the Act, in the earlier Ontario case, supra . While Morter related asserted misconduct by Fritts, Hines and Stone, he asserted these events took place, "The day of the opening," thus, even assuming credibility, they do not support warrants obtained the prior day. Morter did not relate any occurrence on December 11. The same observation applies to the assertions of Gradsky and Kantor. Thus, no evidence of misconduct , on December 11, supports the obtaining of these warrants. Morter obtained warrants, on December 12, for employees Hollan, Justice and Diana McKnight." At no time did Morter identify Justice and Diana McKnight, or specifically relate the nature of the misconduct in which they engaged. Thus, no evidence of misconduct by Justice and Diana McKnight, on December 12, appears to support the obtaining of those warrants." While Cunningham obtained five warrants, for four employees, identified supra, and Clerk's President Mitchell, on December 29, and 13 warrants, for 11 "Citing: Priced-Less Discount Foods, Inc., supra. (in which Gerald Kantor caused the arrest, for trespass, of a union organizer who solicted union authorization cards on Respondent's parking lot); Bannon Mills, Inc., 146 N L R B 611, 619-621, 630 (arrest for trespass) "While Morter asserted he obtained warrants for employees he saw "walking in front of the entrance and exist, carrying signs, waiving signs, hollering at customers, hollering in the door, stepping on the door treadle, hollering in the store, he then identified those involved as Stone, Hines, Fritts, and Hollan . He incorrectly asserted that he obtained a warrant, that day, for Fritts. "Gradsky related alleged misconduct on December 12 or 13, by Stone, Alsept, Bowell, and Hipsher . No warrant was ever obtained against Alsept or Hipsher. 424 DECISIONS OF NATIONAL LABOR RELATIONS BOARD employees and two Union representatives, on January 2, 1968, much of his recitation of events, as set forth supra, involved employees assertedly engaging in misconduct on earlier dates, including a number for whom no warrant was sought at any time . I find it unnecessary to evaluate the generalizations of misconduct related by Cunningham, who obviously failed to adequately identify, in terms of specifics, a number for whom he obtained warrants. The total absence of justification by Respondents, for at least six of the first seven warrants , excluding Hollan, I find sufficient to conclude, as has the Board in Raleigh, supra, that Respondents were primarily concerned with interfering with and restraining their employees, and their chosen representatives. Such conduct is patently violative of Section 8(a)(1) of the Act" IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of the Respondents set forth in section III, above, occurring in connection with the operations of the Respondent South Discount Foods 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 Having found that Respondent South Discount Foods, Inc., and Respondent Milton H. Kantor, Gerald Kantor, and Paul Kantor, as individuals have engaged in certain unfair labor practices, I shall recommend that they cease and desist therefrom and take certain affirmative action designed to effectuate the policies of the Act. It has been found that these Respondents discriminatorily failed to hire, on and after December 6, 1967, the following applicants for employment: Elsie Aggee, Delilah Alsept, Roger Arwood, Lelia Baker, John W. Blair, Patti Bowell , Larry Callahan, Jerry Copeland, James Cordray, George Curtis, Brenda Fritts, Dudley Hammond , Barbara Hardin, William Hill, Carmella Hines, Sandra Hipsher, Glenda Hollan, Vaughn D. Howard, Norma Justice, Marie Lewis, Billy Joe Lairemore, Luther H. Magill, Diana McKnight, Lee McKnight, John McCreary, Harkless O'Bryant, Larry Ogan, Robert Reedy, Thomas Scarbrough, Winford Smith, Nancy Serbontez, Mary J. Stone, Tim Strong, Lucretia C. Thompson, and Mary Wagers. Accordingly, I recommend that Respondents offer, to each of the individuals named, immediate and full reinstatement to the former or substantially equivalent position of each, at 4601 South Dixie Drive, without prejudice to the rights and privileges previously enjoyed , dismissing, if necessary, other employees hired on or since December 6, 1967. Respondents shall establish a preferential hiring list if the number of employees presently employed is less than the number I have found to have been discriminatorily denied employment. It is further recommended that these Respondents make whole each named discriminatee for any loss of pay suffered , by reason of the discrimination against each . Said loss of pay shall be based upon earnings each would normally have earned from December 6, 1967, or the date thereafter each would have been hired, until the date each is offered equivalent "As stated by the Board, in the Priced-Less case, supra, this finding is without regard to the validity of the arrests under State law. employment, less the net earnings of each during said period. Said backpay shall be computed on a quarterly basis in the manner established by the Board in the F. W. Woolworth Company, 90 NLRB 289. Interest on backpay shall be computed in the manner set forth in Isis Plumbing and Heating Co., Inc., 138 NLRB 716. In arriving at my recommendations for appropriate remedy, I have considered the evidence relative to asserted acts of misconduct by pickets, and prior Board and court decisions in that area 67 The Board has repeatedly asserted that it does not condone the use of abusive language, however, it has recognized that in a strike, where vital economic issues are at stake, striking employees resent those who cross the picket line and will express their sentiments in language not altogether suited to the pleasantries of the drawing room. Efco Manufacturing, Inc., supra at 266. The Supreme Court has stated that the right of free speech cannot be denied by drawing from a trivial rough incident or a moment of "animal exhuberance" the conclusion that otherwise peaceful picketing has the taint of force. Milk Wagon Drivers Union v. Meadowmoor Dairies, supra at 293.68 The Board has distinguished between behavior of an individual and the coercion and intimidation of non-strikers by mass shouting of profanities. Terry Coach Industries, Inc., supra (TXD). I find no evidence of threats, participation in physical violence, or epithets which are in the category of publicly degrading or humiliating.B9 Accordingly, I find no evidence which would warrant denial of the customary remedy. It is also recommended that Respondent South Discount Foods, Inc., and Respondents Milton H. Kantor, Gerald Kantor, and Paul Kantor, as individuals, be ordered to make available to the Board upon request, payroll and other records to facilitate checking of the amount of earnings due. In view of the nature of unfair labor practices committed, the commission of similar and other unfair labor practices reasonably may be anticipated. I shall therefore recommend that these Respondents be ordered to cease and desist from in any manner infringing upon rights guaranteed to their employees by Section 7 of the Act. Upon the foregoing findings of fact and upon the entire record in the case, I make the following: "E g , Efco Manufacturing, Inc, 108 NLRB 245, enfd. 227 F.2d 675 (C.A. 1), Nutone. Inc, 112 NLRB 1153, enfd as modified 243 F 2d 593 (C A.D C.); Milk Wagon Drivers Union v. Meadow-Moor Dairies. 312 U.S 287, Terry Coach Industries. Inc., 166 NLRB No. 76; Longview Furniture Company, 100 NLRB 301, enfd as modified 206 F 2d 274 (C.A. 4), Supplemental Decision 110 NLRB 1734, Thor Power Tool Company, 148 NLRB 1379, enfd. 351 F 2d 584 (C.A 7); American Tool Works Company, 116 NLRB 1681, Custom Chair Manufacturing Company, 170 NLRB No. 62, Corriveau & Routhier Cement Block, Inc., 171 NLRB No. 113. "Unlike the Master in the Milk Wagon case, I am unable to find that evidence reflects "intimidation of the customers of plantiff's vendors by the commission of acts of violence , or in connection with or following a series of assaults or destruction of property." "While the reference to Milton Kantor's religion is reprehensible, it is comparable to the term "wop b - t - d," classified as "impolite" in Efco, supra. It is for this reason I have not made a credibility finding as indicated in fn. 37. The conduct of Hipsher impugning the chastity of Cunningham's wife borders on the impermissible. However, unlike Marshall, in Nutone, supra, this appears as an isolated incident SOUTH DISCOUNT FOODS, INC. 425 CONCLUSIONS OF LAW 1. Respondent South Discount Foods, Inc., and Respondents Milton H. Kantor, Gerald Kantor and Paul Kantor, as individuals , are engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 2. Retail Clerks Union , Local 1552, Retail Clerks International Association, AFL-CIO, and Local 430, Amalgamated Meat Cutters & Butcher Workmen of North America, AFL-CIO, are each a labor organization within the meaning of Section 2 (5) of the Act. 3. By engaging in the conduct set forth in the section entitled "Interference, Restraint, and Coercion ," to the extent therein found , these Respondents have engaged in and are engaging in unfair labor practices within the meaning of Section 8(a)(1). 4. By discriminating with respect to the hire and tenure of employment , and terms and conditions of employment, of the 35 employees named in the Section entitled "The Remedy," thereby discouraging the free exercise of rights guaranteed by Section 7 of the Act and discouraging membership in and activities on behalf of the above-named labor organizations , these Respondents have engaged in and are engaging in unfair labor practices within the meaning of Section 8(a)(3) and (1) of the Act. 5. By failing to give notice to the Unions of the closing of the store, on November 21, 1967 , Respondent Dayton Discount Foods Inc., has engaged in unfair labor practices within the meaning of Section 8(a)(5) and (1) of the Act. 6. Respondents South Discount Foods, Inc., Milton H. Kantor, Gerald Kantor, and Paul Kantor have not engaged in unfair labor practices within the meaning of Section 8(a)(5) and ( 1) of the Act, by refusing to recognize, or to meet for the purpose of bargaining with, either union, on and after December 6, 1967. 7. The aforesaid unfair labor practices are unfair labor practices affecting commerce within the meaning of Section 2(6) and (7) of the Act. RECOMMENDED ORDER Upon the basis of the foregoing findings of fact and conclusions of law, and upon the entire record of the case, I recommend that the Respondent, South Discount Foods, Inc., its officers, agents, successors , and assigns, and Milton H. Kantor, Gerald Kantor, and Paul Kantor, as individuals, shall: 1. Cease and desist from: (a) Discouraging membership in Retail Clerks Union, Local 1552, Retail Clerks International Association, AFL-CIO, and Local 430, Amalgamated Meat Cutters & Butcher Workmen of North America, AFL-CIO, or any other labor organization of their employees, by refusing to hire said employees, or in any other manner discriminating against them in regard to their hire or tenure of employment , or any term or condition of employment. (b) Interfering with, restraining, or coercing its employees in the exercise of their rights guaranteed in Section 7 of the Act by ordering representatives of Local 1552 and employees off Respondent's premises, or having them arrested while said representatives and employees were engaged in picketing, in a lawful and peaceful manner, in front of Respondents' store. (c) In any other manner interfering with , restraining, or coercing employees in the exercise of the right to self-organization , to form labor organizations, to join or assist the above-named Unions , 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 collective bargaining or other mutual aid or protection, or to refrain from any and all such activities, except to the extent that such right may be affected by an agreement requiring membership in a labor organization as a condition of employment, as authorized in 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 it is found will effectuate the policies of the Act: (a) Offer to the 35 employees named in the "The Remedy" immediate and full reinstatement to the former or substantially equivalent position of each, without prejudice to the seniority or other rights or privileges previously enjoyed by each, and make each whole for the loss of pay each may have suffered by reason of Respondent's discrimination against each in accordance with the Recommendations set forth in "The Remedy" herein. (b) 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 the amounts of backpay due and the rights of employment under the terms of the Recommended Order herein. (c) Post at its store at 4601 South Dixie Drive, Moraine City, Dayton, Ohio, copies of the attached notice marked "Appendix."" Copies of said notice, to be furnished by the Regional Director for Region 9, shall, after being signed by Respondents or their representative, be posted by the Respondents and maintained by them for 60 consecutive days thereafter, in conspicuous places, including each of Respondent's bulletin boards. Reasonable steps shall be taken by the Respondents to insure that said notices are not altered, defaced, or covered by any other material. (d) Notify the Regional Director for Region 9, in writing, within 20 days from the receipt of this Decision, what steps the Respondents have taken to comply with the foregoing Recommended Order. It is further recommended that unless within 20 days from the date of the receipt of this Trial Examiner's Decision, the Respondents shall notify the said Regional Director, in writing, that they will comply with the foregoing Recommended Order," the National Labor Relations Board issue an Order requiring Respondents to take the aforesaid action. IT IS FURTHER RECOMMENDED that the allegations of the complaint be dismissed as to Arnold Kantor, as an individual , J. A. Steven, Inc., d/b/a Bargain Barn Foods, and Dayton Discount Foods, Inc., It is also recommended that the allegations of paragraphs 7, 12(a), (b), (c), (d), and (f) be dismissed in their entirety. "In the event that this Recommended Order is adopted by the Board, the words "a Decision and Order" shall be substituted for the words "the Recommended Order of a Trial Examiner" in the notice. In the further event that the Board's Order is enforced by a decree of a United States Court of Appeals, the words "a Decree of the United States Court of Appeals Enforcing an Order" shall be substituted for the words "a Decision and Order." "In the event this Recommended Order is adopted by the Board, this provision shall be modified to read "Notify said Regional Director, in writing, within 10 days from the date of this Order , what steps the Respondents have taken to comply therewith. 426 DECISIONS OF NATIONAL LABOR RELATIONS BOARD APPENDIX NOTICE TO ALL EMPLOYEES Pursuant to the Recommended Order of a Trial Examiner of the National Labor Relations Board and in order to effectuate the policies of the National Labor Relations Act, as amended, we hereby notify our employees that: WE WILL NOT discourage membership in, or activities on behalf of, Retail Clerks Union, Local 1552, Retail Clerks International Association, AFL-CIO, or Local 430, Amalgamated Meat Cutters & Butcher Workmen of North America, AFL-CIO, or any other labor organization of our employees, by refusing to hire said employees , or in any other manner discriminating against them in regard to their hire or tenure of employment, or any term or condition of employment. WE WILL NOT order union representatives or employees off our premises, or have them arrested, while they are engaged in picketing , in a lawful and peaceful manner. WE WILL NOT in any other manner interfere with, restrain, or coerce, our employees in the exercise of the rights to self-organization , to form labor organizations, to join or assist the above-named Unions, 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 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 agreement requiring membership in a labor organization as a condition of employment , as authorized in Section 8(a)(3) of the Act, as modified by the Labor-Management Reporting and Disclosure Act of 1959. WE WILL offer to Elsie Aggee, Delilah Alsept, Roger Arwood, Lelia Baker, John W. Blair, Patti Bowell, Larry Callahan, Jerry Copeland, James Cordray, George Curtis, Brenda Fritts, Dudley Hammond, Barbara Hardin, William Hill, Carmella Hines , Sandra Hipsher, Glenda Hollan, Vaughn D. Howard, Norma Justice, Marie Lewis, Billy Joe Lairmore, Luther H. Magill , Diana McKnight, Lee McKnight, John McCreary, Harkless O'Bryant, Larry Ogan, Robert Reedy, Thomas Scarbrough, Winford Smith, Nancy Serbontez, Mary J. Stone, Tim Strong, Lucretia C. Thompson, and Mary Wagers, immediate and full reinstatement to the former or substantially equivalent position of each, at 4601 South Dixie Drive , without prejudice to the rights and privileges previously enjoyed, dismissing, if necessary, other employees hired on or since December 6, 1967, and we will make each of them whole for any loss of salary or pay suffered as the result of our discrimination against each. All employees are free to become , to remain, or to refrain from becoming or remaining members of a labor organization of their own choosing. SOUTH DISCOUNT FOODS, INC. (Employer) Dated By (Representative) (Title) MILTON H. KANTOR GERALD KANTOR PAUL KANTOR Note: - Notify the above-named employees if presently serving in the Armed Forces of the United States of their rights to full reinstatement upon application in accordance with the Selective Service Act and Universal Military Training and Service Act, as amended, after discharge from the Armed Forces. This notice must remain posted for 60 consecutive days from the date of posting and must not be altered, defaced, or covered by any other material. If employees have any question concerning this notice or compliance with its provisions, they may communicate directly with the Board's Regional Office, 2407 Federal Office Building, 550 Main Street, Cincinnati, Ohio 45202, Telephone 684-3663. TRIAL EXAMINER'S SUPPLEMENTAL DECISION STATEMENT OF THE CASE LEO F. LIGHTNER, Trial Examiner: This proceeding' was heard before me in Dayton, Ohio, on January 16 and 17, 1969, pursuant to an order of remand issued by the Board on November 25, 1968 . Full opportunity was afforded the parties to adduce evidence and to examine and cross-examine witnesses. Oral argument was waived. Briefs on behalf of the General Counsel and Respondent have been carefully considered. Upon the entire record in the case,' including my observation of the witnesses, I make the following: FINDINGS OF FACT Background As noted in my initial Decision,' a consolidated complaint, and an order consolidating cases, was issued on February 20, 1968, and an amended consolidated complaint was issued on April 10 , 1968.° Incorporating by reference my earlier findings, and solely for the purpose of brevity, the evidence, in support of the allegations of the consolidated complaint, establishes that the Respondents Kantor, except Arnold, as individuals, are the owners and officers of a corporate No appearance was entered for J A. Steven, Inc 'In his brief, fn 5, General Counsel requested correction of a typographical error by the substitution of "ex-employees" for the word "employees" following the words "eight or ten other ," in record p. 960, I 22 No opposition has been received . The request coincides with the Trial Examiner's precise memory The particular statement would not be lucid without the modification The motion is granted in addition, I have noted the following names are misspelled, at numerous places in the record , and the record is corrected accordingly Judge Weinman appears incorrectly as Wyman, Secretary-Treasurer Kenneth J . Pfarrer, of Charging Party Meat Cutters, as Farr and Pfarr; former Assistant Manager Leonard Chudy as Chattie, and Elsie or K Aggee as Aggie. 'See fn. 2 thereof 'During the earlier hearing, paragraph 7 of the amended consolidated complaint was amended by the insertion of the identity of 35 individuals alleged to be discriminatees , see fn 6 of the initial Decision, and paragraph 6 was amended to reflect additional dates on which Respondent allegedly engaged in the conduct complained of in that paragraph, as set forth in the section entitled "Picketing arrests" of the initial Decision. SOUTH DISCOUNT FOODS, INC. 427 entity, identified as Dayton Discount Foods, Inc. Jack Gershow and Annabelle Gershow were the sole owners, with the first named as president, of a corporate entity identified as Respondent J. A. Steven, Inc. These two groups, operating under their respective corporate entities, entered into a management agreement, wherein the Kantor group undertook operating management of a retail food store, for the period which commenced June 12, 1966, and terminated November 21, 1967. The store in question, identified under the tradename of Bargain Barn Foods, was located at 4601 South Dixie Drive, Moraine City, Dayton, Ohio. The store did not reopen for business after the Kantor group abrogated, or resigned from, its management agreement on the evening of November 21, 1967. It is undisputed that a Petition in Bankruptcy was filed, and Respondent Steven went out of business. I have found, from undisputed evidence, the existence of collective-bargaining agreements between the Charging Party Unions and Respondent Steven, which by their terms were effective, at least, through May 26, 1.968, as to the Clerks, and June 1, 1968, as to the Meat Cutters. Both agreements contained valid union-security provisions and provision for Union Welfare Fund payments. During the period of the operation of the store by the Kantor group,' under the management agreement, the store bookkeeper, Wellman, forwarded to each respective Union the amounts due for dues checkoff and Union Welfare Fund payments. It is thus patent, from this and other evidence set forth in the initial decision, that these collective-bargaining agreements remained operative during the period described. It appears undisputed that 35 employees, in the two units described in the initial decision, were laid off as a result of the store not reopening on November 22, 1967. Six of this number were represented by the Meat Cutters and 29 by the Clerks.' I have found, from undisputed evidence, that the Kantor group, on December 6, 1967, organized a new corporation, identified as Respondent South Discount Foods, Inc., d/b/a Goldman's Discount Foods, for the purpose of operating a retail food store at 4601 South Dixie Drive.' I have found from undisputed evidence that preparations for reopening, including stocking operations by employees, commenced on December 6, 1967, and that the store in fact reopened on December 12, 1967, and has remained open ever since.' I have found, from undisputed evidence, that, on December 6, President Mitchell and Vice President Braden of the Clerks, and Pfarrer, National Secretary and Treasurer of the Meat Cutters, went to the store and inquired of Arnold Kantor, who was in charge of the reopening, and Arnold Meade, general manager for the Kantor group, why the employees, whom they represented, had not been "called back to work" to help clean and get the store ready to open. Arnold Kantor, professing ignorance, referred them to his brother Milton Kantor. While still in the store, Pfarrer was advised, by telephone, by Gradsky, that Gradsky did not invite Pfarrer into the store and that unless he left he would be arrested for trespassing. Pfarrer communicated this message to Mitchell, in the presence of Meade. Mitchell 'See fn 7 of the initial Decision. `See fn. 6 of the initial Decision , which includes identities. 'See the section entitled N . The Business of the Various Respondents" of initial Decision. 'See the section entitled "The Events of December 6, 1967 - Union's Request for Employment of Employees" of initial Decision. advised Meade that they were union representatives for that store and had a right to be there to find out what was going on "because of our members."' Picketing commenced December 7, 1967. Subsequent correspondence between Respondents and the Clerks, set forth in the section entitled "The Events of December 6, 1967 - Union's Request for Employment of Employees" of the initial Decision, is referred to infra. It is undisputed that not one of the 35 employees who were separated on November 22, were employed by Respondents thereafter at the store in question. The amended consolidated complaint, as amended, alleged specific violations of Section 8(a)(1), in paragraph 6, and specific violations of Section 8(a)(5), (3), and (1), as paragraphs 12 and 13. As I understand the Remand Order this Supplemental Decision is addressed primarily to the allegations of paragraph 7, 12(e) and 13, together with those paragraphs which provide such underlying facts as I have previously found. The nub of the issue considered herein is contained in the allegations of paragraph 12(e): Since on or about December 12, 1967, and at all times thereafter in refusing to employ said employees who were terminated on November 21, 1967." Accordingly, I reaffirm the Findings of Fact, Conclusions of Law, and Recommended Order contained in the initial decision, except as hereinafter specifically modified, and specifically vacate the recommendation of dismissal of the allegations of paragraph 7 of the complaint, to the extent such recommendation is inconsistent with my findings herein. Paragraph 3 of the amended consolidated complaint alleges, inter alia, that Respondent South Discount and the individual Respondent Kantors are alter egos and/or successors of Respondent Steven and Respondent Dayton Discount, and the officers of the latter. Having found to the contrary in my initial decision, for reasons fully explicated therein, and finding this area to be beyond the scope of the remand, I find it unnecessary to reexamine those findings. The Remand Order The Board in its Remand Order noted, inter alia, that I had recommended that the Respondent Kantors and South Discount offer to the 35 employees identified in "The Remedy" of the decision "immediate and full reinstatement to the former or substantially equivalent position of each, at 4601 South Dixie Drive - ." On the basis of a representation, by Counsel for Respondents (except Steven), that Respondents were denied the opportunity to litigate their defense - and that the above-described finding by the Trial Examiner involved what in effect constituted a denial of due process, the Board ordered, inter alia, - that the record in the above-entitled proceeding be reopened and that a hearing be held before Trial Examiner Leo F. Lightner to give the Respondents full opportunity to adduce pertinent and material evidence 'See the section entitled "The Events of December 6, 1967 - Union's Request for Employment of Employees" of initial Decision. "The assertion of Counse l for Respondent that "Our exceptions went to the fact that the question of the refusal to hire, the alleged refusal to hire employees , on December 6th or thereafter, or the 12th, was not an issue in this case, as framed by the General Counsel , he never put in any evidence on it, he never sought it as an issue in this case, and there are plenty of things in the record that show that he did not consider this an issue" is patently erroneous 428 DECISIONS OF NATIONAL LABOR RELATIONS BOARD as a defense to the above allegations of the complaint, and for the admission of such further evidence in this connection as may be warranted. Supplementary Evidence The evidence at the supplementary hearing falls into two broad categories : (a) alleged evidence of pilferage, by employees of Steven, warranting a belief, by Respondents, that none of these employees should be considered for employment when the store was restaffed for resumption of business; and (b) offers of compromise which should be considered as terminating or tolling the backpay period. In addition , Respondents assert there were no applications for employment . The evidence relative to these contentions is set forth seriatim. Pilferage Respondents relied almost exclusively on the testimony of CPA Allan Gradsky to establish the existence of pilferage, in the store at 4601 South Dixie, in the year of 1967, with particular emphasis on the period from August 13 to November 5. While Respondent Milton H. Kantor sought to corroborate some of the assertions of Gradsky, his testimony in the main related to security measures adopted during the operation of the Steven store." In the earlier hearing Kantor" asserted that he obtained "perishable reports" (identified as covering both meats and produce) every month and "overall reports" (including groceries) every 3 months, from Gradsky, covering the operation of the Steven store . Gradsky, during the earlier hearing, identified three financial statements, which he asserted were prepared from the books and records of Respondent Steven: (a) covering a 1-year period ending January 1, 1967, which included a partial period, January 1 to June 12, 1966, when the store was operated by Great Value Corporation; (b) a 32-week period from January 1 to August 13, 1967; and (c) a 44-week period from January 1 to November 5, 1967, with a separate computation for the 12-week period from August 14 to November 5." Gradsky explained these statements were prepared "without audit." Gradsky explained his meaning of the term "without audit" as being that he did not audit prior transactions, that he was not present to verify reported inventory and that he did not verify accounts payable. "At the supplementary proceeding neither General Counsel nor the Charging Parties called any witnesses "Milton Kantor was the only one of the four Kantor brothers to testify at both the earlier and remand hearings. Reference , where the last name only is used, thus relates to the statements of President Milton H. Kantor. "Gradsky was self-contradictory in first asserting no other quarterly reports were typed, also that there was one "interim" report, he did not know when, between January I and August 13, 1967 . This interim report was not offered. Gradsky's explanation of his failure to type quarterly reports was: The other ones were not typed because we never got beyond , actually beyond trial balance stage, when we took the "first inventory" and I don't recall when it was. I do remember that the grocery percentage was "exceedingly low" and we didn't really believe it. We believed that there might have been an error in the inventory or in the accounts payable As will appear infra, the grocery percentage does not appear "exceedingly low," from the testimony of Kantor, until the last report. It is implausible that no inventory was taken prior to the August 14 to November 5, 1967, period. If, as Kantor asserted, inventories were made quarterly, the "first inventory" was taken in 1966 , and at that time the grocery percentage was not "exceedingly low " In essence, Respondent seeks to establish that it had a reasonable basis for belief of thievery in excessive amounts, by employees of the Steven-Dayton Discount "Bargain Barn" store, by reason of the low gross grocery percentage and statements obtained by Respondent, largely from former employees , assertedly incriminating a large number of the alleged discriminatees herein, who assertedly are identified by classification rather than individual identity . The recitations of Respondent's witnesses, inaccuracies, inconsistencies , omissions, and conflicts follow. The grocery percentage for the year ending January 1, 1967, was 9.82 percent." While not highlighted in the testimony, the meat percentage for the same period was 10.15 percent, and the produce percentage was 22.70 percent. In the 32-week period ending August 13, 1967, the grocery percentage was 7.78 percent, meat 17.00 percent, and produce 28.98 percent . In the 12-week period, August 14 to November 5, the report indicates grocery 5.40 percent, meat 18.29 percent, and produce 27.04 percent. The same report contains a summary for the 44-week period, January 1 to November 5, 1967, which reflects grocery 7.13 percent, meat 17.36 percent and produce 28.52 percent. Kantor, at the initial hearing, acknowledged receiving the August 13 report on approximately September 1 and described the grocery percentage as "terrible." Kantor asserted the average, inferentially for the various Kantor operations, as being on the order of 9.75 percent to 10 percent, and good as in "the middle twelve's." Kantor described the interim grocery reports, during 1967, as having reflected "high eight's and the nine's."" Kantor described the situation as "acute" when the grocery percentage got down to the seven 's. Kantor was uncertain if it was in late 1966 or early 1967 that "we had people in the store on surveillance; we changed A.D.T.;'b we changed the procedures on checking ." Kantor asserted they took inventory every 3 months and the first "real bad inventory" was approximately June 1967. When asked what he did to correct the situation when the grocery profit was in the high eight's, Kantor responded that after McKay left they changed managers ." This event was in September 1966j not in 1967. Kantor asserted, as a result of the August 13 report, inferentially in early September 1967, "We tightened security, we went into getting day deliveries," we felt we had better security on the store in the day; we felt that we had an inventory leakage; we did everything we could to stop the flow. We put new security measures in the store; we tightened up the old security measures." At the remand hearing , Kantor related that as a result of the low grocery percentage reflected in the August 13 report, which he received on approximately September 1, "The term "grocery percentage" as used herein reflects gross income from the sale of groceries in relation to total grocery sales , in a given period. It is thus distinguishable from gross or net profits . Salaries and other expense items are not considered in computing either the gross income from grocery sales or the percentage set forth. "At variance , Gradsky asserted "trial balances," in 1967 , preceding the August 13 report, reflected the grocery percentage as "about the same" as that report. I find resolution of this conflict unnecessary. "Described elsewhere in the record as a system permitting specified employees access to the store during hours when the store was closed. "I have found, earlier, undisputed, that McKay was tran$erred to another Kantor store, in Springfield, Ohio, in September 1966, and was succeeded by Reinhardt, who continued as manager until early November 1967. See fn. 15 of initial decision. "Discontinuance of the night crew, however, did not occur until late October, according to Gradsky. SOUTH DISCOUNT FOODS, INC. 429 he gave instructions to have the A.D.T. system changed so that reports of every individual entering and leaving the store, during periods when the store was not normally open, would be sent directly to his office . He asserted that an inventory of cigarettes was made nightly and there were four "volatile" items that they spot-checked each morning and evening . The "volatile" items were described, by Kantor, as cigarettes, coffeee, meat items, and canned ham items that can be turned into cash very quickly. Gradsky, at the initial hearing, asserted the normal grocery percentage for Kantor stores was between 10-1/2 and 12 percent." While Gradsky corroborated the assertions of Kantor as to the security measures taken in early September, relative to the A.D.T. system, etc., during the remand hearing , he also recited improbabilities. In the initial hearing Gradsky acknowledged that it was not until October that he first learned of employee pilferage. In contrast, at the remand hearing , he asserted that he and Kantor, in September , discussed having the store closed at night and "we discussed mainly about the night crew, and what provisions might be taken to prevent them from stealing." Inconsistently , thereafter Gradsky acknowledged that the discontinuance of the night crew occurred, at the earliest, in late October after an investigation by Gradsky, more fully set forth infra. Also inconsistently , Gradsky acknowledged he did not learn of the alleged pilferage until October. I turn next to the alleged evidence of thefts, in the 4601 South Dixie store, on which Respondent apparently now relies, as justification for, assertedly supplying the "motive" for, its failure to employ any of the 35 employees, formerly employed at that store, all of whom were laid off when the store failed to open on November 22. In considering this evidence , at this time, I am not unmindful of the representations of Respondent 's counsel, as set forth in part in footnote 31 of the initial decision, that the sole purpose of injecting the pilferage issue into the record was to explain the high percentage of grocery cost in relation to sales, and to meet the inference that the Kantor group forced Steven out of business . Respondent's counsel disclaimed any effort to imply that any of the employees who were discharged, on November 21, were not hired, or recalled, by reason of any belief of Respondent that they had engaged in pilferage , or were "In support of this assertion, Respondent introduced statements covering six other Kantor stores for varying periods, 12 weeks to 52 weeks, all ending in 1967 , all of which reflect grocery averages between 9.32 percent and 12. 18 percent . All but one of these reports contains the notation "Prepared without audit." Queried as to why he did not bring in the reports for the other eight Kantor stores, Gradsky acknowledged that the reports on these other stores would "vary up and down" but was uncertain if there were some which reflected a lower gross grocery percentage than 9. Since Respondent asserted the principal purpose of the introduction of these exhibits was to show that labor costs at the "Bargain Barn" store were not out of line proportionately with other Kantor stores, which were nonunion, to meet the assertion that Kantor was engaged in a deliberate effort to put Gershow out of business , so that .Kantor could open a non-union store at the same location, I find it unnecessary to treat further with these comparative reports or to evaluate them . I have dismissed, in my earlier decision, those allegations which relate to a contention that the closing of the Steven store was other than economic. I am also not unmindful , in determining that I need not further consider comparative reports , of the evidence in this record, set forth infra, of excessive sales of "loss leader" items, and its possible impact on the showing of low gross grocery sales. "This fact is corroborated by the assertion of Gershow that it was 3 or 4 weeks before the store closed , on November 21, that he first heard "anything about thefts." undesirable as employees for that reason. Gradsky related that an individual identified as Marvin Hughes, in October, was caught stealing in another Kantor store, where he was employed at that time. Gradsky interviewed him, and recorded the interview on tapes, with reference to employees stealing in other stores as well as the Bargain Barn store . Gradsky asserted that Hughes related that there was widespread theft at the Bargain Barn store, that many people were involved and "I believe he submitted a list of some 55 employees that were involved from time to time."" According to Gradsky, Hughes related that the night crew were eating a great deal of products while on duty, that theft of toffee, sugar, and many items, were going out the back door, that many of the cashiers, and other employees, were involved in groceries going out through the cash registers at less than their marked value . Gradsky asserted that Hughes admitted that he had been involved in some theft, with other people, that they had stolen merchandise and hauled it to other grocery stores and sold it, and that Hughes talked in terms of the theft of large quantities of cigarettes from the discount portion of the store. It is undisputed that Hughes was not prosecuted.22 Gradsky acknowledged that , during his interview of Hughes, Gradsky learned that Hughes had been incarcerated, in Ohio, as a felon, and, while so incarcerated, Hughes had been transferred to Lima, a mental hospital for criminally insane. Gradsky described Hughes as being approximately 27 years of age. The time and length of Hughes' incarceration, and the time of his release, is obscure. Gradsky asserted that he advised Kantor of the representations of Hughes, that Kantor suggested that they pursue the matter with Hughes and other employees. Gradsky asserted that he spoke to probably 8 or 10 ex-employees and at least 2 employees , during a 3-week period in October. Gradsky identified the former employees, whom he had interviewed on tapes , as James Mulkey, whom Gradsky identified as a supervisor of sorts, and Gary Watts, whom Gradsky identified as working in the meat department. Gradsky asserted that as a result of his investigation both of these employees were discharged. Neither appears on Respondent 's list of the employees at the Bargain Barn store in the year of 1967.27 Gradsky identified as among those so interviewed Larry Gapin, who had quit and was not working at the store at the time he was interviewed. Capin does not appear on the list of employees, employed by Respondent at the Bargain Barn store in 1967. Another former employee whom Gradsky asserts he interviewed is Joe Mathier, who's name also does not appear on the list of 1967 employees at the Bargain Barn store. Gradsky acknowledged that one former employee, whose name does appear on the list of employees, Russell Landis, quit before the store closed and was not discharged . Gradsky did not specify the nature of the assertions of these various interviewees, except Hughes. However, without specificity, Gradsky asserted Hughes' assertions were corroborated. Gradsky also interviewed Kenneth Gudgeon, who appeared as a rebuttal witness for General Counsel in the "Respondent submitted a list of 54 individuals who were employed, in various capacities, at the Bargain Barn store, for varying periods, during the year of 1967. 1 reverse my ruling rejecting this exhibit. "Hughes did not appear as a witness herein . No explanation was made of the failure to call any employee witness relative to these alleged thefts. "While Store Manager Reinhardt related that he discharged two employees, after listening to some of these tapes, on the instructions of Meade, he did not identify them by name. 430 DECISIONS OF NATIONAL LABOR RELATIONS BOARD initial hearing. Gudgeon, who apparently resigned in October 1967, was in charge of the night crew during the period from September 1966, until approximately January 4, 1967. Gudgeon acknowledged having resigned after he was confronted, apparently by Gradsky, of complicity with Hughes in a particular transaction." Only Elsie Aggee and Diana McKnight, both cashiers, of the 35 employees still employed on November 21, were interviewed, in connection with the investigation of Gradsky. It is undisputed that Aggee is presently employed at another store of the Kantor group. There is not a scintilla of evidence herein that Aggee was in any way connected with the alleged misconduct. Gradsky, at the initial hearing, identified McKnight as one employee who admitted that on two occasions she had checked out groceries at lower than the indicated price, advising that she had been instructed to do so by her supervisor, unidentified. Asked, during the remand hearing, why McKnight had been permitted to remain in employment until the closing of the store, Gradsky asserted that they had not completed their investigation, that they were sidetracked because of the creditors' meeting, that she was kept on "so that we could have access to be able to talk to her at greater length and have her implicate more people."" Gradsky then acknowledged that McKnight had not implicated anyone by name, only by job description. The only other individuals interviewed, in October, by Gradsky, were Store Manager Reinhardt and Assistant Store Manager Chudy. Chudy was still employed, at a different Kantor store, apparently having had no substantial break in employment, and there appears no basis for belief that he was in any way involved in any misconduct which may have existed. While Reinhardt was summarily dismissed approximately 2 weeks before the store closed, there is not a scintilla of evidence herein that Respondent believed that Reinhardt was involved in this alleged misconduct. Next set forth are the assertions of Gradsky and Kantor, as compared to those of Manager Reinhardt, as to what the tapes, prepared in Gradsky's office, actually contained.=° Gradsky was asked, relative to the 35 people who were continued in employment until the store closed, if they were implicated on the tapes only by job description, as distinguished by name. Gradsky responded that Diana McKnight had implicated people by job description, but that many of the people he had interrogated had implicated others on the employment list of 55 (actually 54) including many of the 35 retained in employment. Gradsky then asserted they were implicated by Marvin Hughes, and corroborated by "many other witnesses." Gradsky's explanation was that they were trying to talk to as many as possible and it was a time consuming job. Gradsky then asserted that approximately 25, of the employees who retained employment through November 21 were so implicated. Later, Gradsky acknowledged that none of the six meat department employees were implicated. "At the initial hearing I sustained an objection to a series of questions and answers , during cross-examination That ruling is vacated, in the light of the Board's remand. "It appears, from Gradsky's recitation , that no one other than Hughes, was interrogated relative to thefts after October 1967 "There are various representations, in the record, by Respondent's counsel and Gradsky that listening to the tapes would require between 18 and 25 hours It is undisputed that the tapes were never reduced to typed form. According to Gradsky, Milton Kantor listened, inferentially to some of the tapes, one day. Kantor first asserted, "The 54 individuals [Respondent's employment list for the year of 1967] admitted to stealing to the tune of some $80,000." Queried as to how he obtained admissions from 54 people when only a relative few had been interrogated, including only 2 who remained employed until the store was closed, Kantor then asserted "Fifty-five people were involved in the thefts." The assertions of Reinhardt, who also listened to the tapes, stands in sharp contrast, as follows: Q. Didn't you tell Mr. Gradsky that you thought that the theft was not very widespread and it was only a very minor thing? A. Possibly I did. I don't recall, but possibly I did. The only things that I heard - now we're talking about tapes. I didn't hear anything major ever admitted on those tapes. Everybody was questioned about everybody else and it was dust everybody was down everybody's throat and everybody was trying to put the blame on somebody else, and those people are no longer with the Company and there ain't none of them sitting here as far as that goes.27 I turn next to comparative assertions of Gradsky and Manager Reinhardt on the reason for the low grocery profit indicated in the period from September 14 through November 5, 1967. Gradsky asserted that the loss in the 12-week period described, in terms of 5.40 percent gross grocery profit as compared to 10.50 percent approximated $29,000. Gradsky asserted that the largest contributing factor was the theft that was going on in the store. Gradsky asserted he arrived at this conclusion from his discussions with "employees" and admissions made by them. Reinhardt, at variance with Gradsky, asserted that a large part of the loss was due to excessive sales of "loss leaders." Reinhardt identified loss leaders as Pepsi-Cola which cost 39 cents and was sold at cost, in quantities as high as 1,200 cases a week. Reinhardt asserted that of a total sales of $43,000, in groceries, as much as $14,000 would be in loss leaders, with a result that normal gross profits would be obtained only on the remaining $29,000 of sales. Reinhardt asserted that he called these excessive sales of loss leaders to the attention of Respondent's top supervisory personnel, including Arnold Meade, Jerry Stamp and Harry Morter. At the initial hearing, Gradsky acknowledged the potential impact of excessive sales of "loss leaders, without comparable sales of profit items." This record does not establish, and would not support with evidence of probative value, the relative impact on profit of the sale of loss leaders or of alleged thefts. I find resolution unnecessary. The original testimony of Kantor, at the initial hearing, stands in sharp contrast to Respondent's present contentions. It appears in the following form: Q. Did you know why the store closed? A. Well, I know it closed because they were in deep debt and I don't think any further credit could be established for that store. This testimony was given on April 23, 1968, the first day of the hearing, long after the events of October, November, and December, 1967. "The reference to those "sitting here" unquestionably refers to the large number of alleged discriminatees who were present , in the courtroom, throughout the entire period of the initial hearing , during which this testimony was given SOUTH DISCOUNT FOODS, INC. 431 On the fourth day of the initial hearing , seekin - to obtain clarification of the issues , the Trial Examiner called to the attention of Respondent ' s counsel the well-established legal premise that the right of reemployment can be jeopardized by evidence that an employee has previously engaged in theft . Respondent's counsel responded, inter alia, that this evidence was not put in for the purpose and should not be considered for the purpose "of not reinstating any particular individual because they had engaged in that theft . I'm not putting it in for that purpose nor is it our intention to prove that in this proceeding." Respondent's counsel also asserted, "It is not put in for the purpose of disqualifying any person from reinstatement by reason of theft . It is put in solely for the purpose of explaining the financial predicament of the Company which eventually led to its demise." Applications for Employment Respondents assert there were no applications for employment by the former employees of Steven -Dayton Discount, at 4601 South Dixie . I find no merit in this assertion , for the reasons set forth in the initial Decision, some of which follow. I have found , undisputed , the fact that President Mitchell , of the Clerks , and Pfarrer, National Secretary and Treasurer of the Meat Cutters , went to the Bargain Barn store on December 6, and requested of Arnold Kantor and Arnold Meade that their members , who had worked previously in that store , be recalled. The union representatives were advised, by telephone, by Gradsky, that they were trespassing and that they should leave or face arrest . 28 As a consequence , picketing commenced the following day, December 7, and continued after the store opened on December 12. Jerry Linch is director of personnel for the Kantor stores, and asserted familiarity with the procedure followed in opening new stores . Linch asserted they selected supervisors and other key employees to help them open the store and they do hire new employees. He asserted those who helped get the store open came from other Kantor stores, and that the overwhelming number of the employees who opened the store on December 12 came from other Kantor stores. Linch asserted that , pursuant to the instructions of Kantor, he proceeded to the 4601 South Dixie store on December 11, 1967, the day prior to its opening, for the purpose of accepting applications for such vacancies as might jevelop . Linch worked at a courtesy booth, which he described as being in the front portion of the store and visible to the pickets . Linch acknowledged seeing the pickets in front of the store on both December 11 and 12. Linch acknowledged that he contacted the Ohio State Employment Service , requesting individuals with grocery experience and that he also called a teacher , who was in charge of distributing education , identified as Mr. "See the section entitled "The Events of December 6, etc." and fn. 33 of the initial Decision. I find unimpressive and implausible the assertion of Kantor, at the remand hearing, that he was never advised of this visit of the union representatives. I similarly find incredible Kantor's assertion that Arnold Kantor was in charge of "retail pricings," without authority to hire Arnold Meade, whom I have found was described as a general manager for the Kantor group, see the initial Decision , and who hired store management personnel, according to Kantor , was present during this discussion. The union representatives had been directed to Arnold Kantor, as the individual in charge of the reopening . by Jerry Stamp, a Kantor management specialist. Brinkmeyer, to obtain boxboys. Linch acknowledged there was no publication of a help wanted ad in the Dayton newspapers and no notice was placed on the window of the store . It is thus patent that neither the union representatives nor the employees were advised, by Respondents, that applications were being obtained and considered . I so find. Linch asserted that his instructions from Kantor were that if he received any applications from anyone who was formerly employed on the night crew or a cashier that Linch should telephone Gradsky, to determine whether such individual had been involved in the thefts.29 Linch acknowledged that when the store opened there were approximately 35 individuals employed, including either 6 or 8 in the meat department.30 Gradsky identified, from Respondent's records, the respective classifications of the employees whom I have found to be discriminatees." The six meat department employees are Baker, Curtis, Hardin , Lee McKnight, Scarbrough and Wagers . The 13 cashiers are Aggee, Alsept, Bowell, Fritts, Hines, Hipsher, Hollan, Justice, Lewis, Diana McKnight, Serbontez, Stone and Thompson. The nine boxboys are Arwood, Blair, Copeland, Cordray, Hill, Magill, Ogan, Reedy and Strong . The four day clerks are Larry Callahan, Billy Jo Larimore , Harkless O'Bryant and John McCreary , the first three were identified as having been on the night crew . Two produce department employees are Hammond and Howard. Winfred Smith was in the dairy department. It thus appears, and I find, that 35 employees, inferentially in the number specified in each classification, were employed at the 4601 South Dixie store at all times on and after December 12, 1967 . Not one of the named former employees were included. Offers of Compromise Pursuant to the advice of Arnold Kantor, on December 6, that Arnold Kantor did not know why the former employees had not been "called back to work" to help clean and get the store ready to open, and that the union representatives would have to talk to his brother Milton, as set forth in the initial decision , Mitchell , on December 8, by letter, inter alia, advised Milton Kantor that it appeared that he was preparing to open the store "without honoring your obligations to the employees and the Union," and requested "the recall" of the employees. I have also found that, on December 19, Rosenthal, as attorney for Respondent South Discount, advised Mitchell, by letter, that Respondent South Discount is not a successor to the previous "owners" of the supermarket and has no obligation under the terms of any collective-bargaining agreement the Union may have had with Respondent Steven, and was not required to recognize the Union as the representative of its employees.32 No representation appears as to the reason for failure to employ. "Kantor, by way of corroboration, asserted, "I told Mr Linch that if any of the former employees of the J. A Steven Company, before they were hired, if they were in the area of checkout girls [cashiers], and in the night crew area, that he was to check with Mr. Gradsky, before they were hired." As noted, infra, there were 13 cashiers and 3 former night crew clerks There were 13 others, represented by the Clerks , and 6 meatcutters, not in the specified classifications, who were denied employment "I find unimpressive Gradsky's assertion that he did not know, and could not estimate , the approximate number employed when the store opened on December 12. "See the section entitled "The Remedy " of the initial Decision "See the section entitled "The Events of December 6, etc ." of the initial Decision 432 DECISIONS OF NATIONAL LABOR RELATIONS BOARD During the remand hearing, Gradsky asserted that, at the suggestion of Respondent's counsel, Katz, Gradsky met with Mitchell, in an effort to bring an end to the picketing, on approximately December 14," at which time Mitchell spent 3 or 4 hours listening to the "tapes" which Gradsky had obtained, as described supra. Gradsky asserted that Mitchell had reduced his request as to the number of employees for whom he was seeking reinstatement to 13. Gradsky asserted, "I said that there were - some of those people on that list were implicated in our discussions of the theft, and that certainly the store did not want to hire anybody that was perhaps, at least that there was a suspicion that they were involved in a theft, in their prior job." Gradsky acknowledged that, thereafter, Mitchell insisted that all of the former employees should be employed by Respondent South Discount. On December 20, at the direction of Judge Weinman, in connection with the Federal Court proceeding, a meeting was held between Mitchell , Pfarrer, Kantor, Goldman, and Gradsky. Gradsky asserted that he advised Pfarrer that Respondents had no quarrel with the Meat Cutters Union, that none of the individuals alleged to have engaged in thievery were members of the Meat Cutters Union, that Respondents would be happy to hire these individuals and to execute a contract with the Meat Cutters. Gradsky acknowledged that the offer, at one time, unspecified, was that these employees, represented by the Meat Cutters, would be employed at a different Kantor store. Queried as to whether an offer had been made to reemploy them at the Bargain Barn store, Gradsky responded, "I believe that we did." I am unable to find, from the recitation of Gradsky , an unconditional offer of reinstatement. Gradsky asserted that on December 27, 1967, he made an unconditional offer, to Pfarrer, to reemploy the six meat department employees, and that he and Pfarrer reached "substantial agreement" on the terms of a collective-bargaining agreement . Gradsky acknowledged there were a "couple of differences, a couple of question marks," so the agreement was not complete . According to Gradsky, Pfarrer advised him, the following day, that Pfarrer could not settle separately. While this testimony stands undisputed , it must be considered in the light of Gradsky's testimony in the initial hearing, on April 23, 1968, that he was not responsible for labor relations at the 4601 South Dixie store . It must also be considered in the light of the dubious response of Gradsky when he was queried as to whether the meatcutters had ever been offered employment at the 4601 South Dixie store, as distinguished from other Kantor stores . On the basis of demeanor, and by reason of numerous conflicts and transparent exaggerations " in the testimony of Gradsky, as well as his apparent interest in the outcome of this case, I do not find his asserted offer to be credible. "The original charges herein had been riled , by both unions, on December 11, and served on Respondents on December 12 It is reasonable to infer that State Court action , relative to the picketing, was pending on December 14. "As an illustration , Gradsky asserted, at the remand hearing: "I called Mr. Harter and reported to him that Mr. Mitchell had said that he would not do anything unless all the people on his list were hired, and that we could not go along with that because there were certain employees on there, that we absolutely knew, and had admitted thievery, and he had not even granted that they should not be hired " (Emphasis supplied.) It is undisputed that only Aggee and McKnight, of the 35 Gradsky acknowledged that offers to reemploy the individuals represented by the Clerks was conditioned upon each taking a lie detector test. In view of Gradsky's admission that no unconditional offer of employment was made to Mitchell, I find it unnecessary to consider the evidence relative to his conversations with Mitchell. However, his representations as to the events of December 20 stand in sharp contrast to the response of Rosenthal, dated December 19. CONTENTIONS OF THE PARTIES AND CONCLUDING FINDINGS Pilferage During the original hearing, in answer to an inquiry of the Trial Examiner , Respondent's counsel asserted, inter alia, " - I am not saying that all thirty-six [thirty-five] of them were guilty of theft and I am not saying that anyone in particular was or was not guilty of theft , nor do we intend to prove in that general term that fact .... And I suggest it is a proper defense, that if the Company had evidence of widespread theft , without being able to pin it to anybody , then that was the motive for not hiring the employees , if that were the motive, even though they could not pin it on anybody , and that was the only reason those people were not hired , then we do not have any violation of the Act." At the remand hearing, Respondent's counsel asserted, inter alia, "We have to - Mr. Trial Examiner, this is rather complicated, it all fits into a pattern, and we have to be able to present it, the way that we saw it. Now, it isn't a question as to whether there was any, and I have stated this before, and I am stating it now , the defense, the question of whether alleged by them , whether or not there was a motive in refusing to hire these people, the question before the Trial Examiner , is not whether in fact there was theft , but whether in fact , the Respondents had reasonable cause to believe that there was theft , and acted on that, and acted accordingly , based upon the evidence that they had in front of them, true or untrue. We are not here to prove theft, we are only proving that we had a suspicion, a knowledge of theft, that was based on substantial evidence, at least in our minds it was substantial, because we are dealing with subjective intent motive." (Emphasis supplied.) At the initial hearing, immediately following a discussion of the defense that the store was closed, on November 22, by reason of economic conditions , the Trial Examiner called attention to the fact that the "right of reemployment," insofar as an individual discriminatee is involved, can be jeopardized by reason of theft. Thereupon , Respondent's counsel advised that the evidence relative to theft was not being put in for that purpose "and should not be considered for the purpose of not reinstating any particular individual because they engaged in that theft . I'm not putting it in for that purpose nor is it our intention to prove that in this proceeding." (Emphasis supplied.) General Counsel, in his brief, correctly urges that the evidence purportedly emanating from the interrogations conducted by Gradsky resulted in the elimination, by discriminatees, were questioned Aggee is presently employed , by Kantor, at another store McKnight is alleged to have admitted inaccurate sales cash register recording . There is no evidence of other admissions. Respondent's counsel disclaimed any intent to prove actual implication of employees, in thefts, set forth infra. SOUTH DISCOUNT FOODS, INC. 433 discharge of resignation , of all those whom Respondent had reason to believe were participants in the pilferage, prior to the closing of the store on November 21. The only employees , in the list of 35 not employed when the store was reopened , who were interrogated by Gradsky were Aggee, since reemployed at another store, and McKnight . Not a single employee witness was produced to establish the existence of the fact of pilferage . Rather, Respondent relied on what is obviously a hearsay recitation of Gradsky, relative to what Hughes principally, and others by way of corroboration of Hughes , asserted by way of accusations . Gradsky did not even take the trouble to place in the record the identity of the individuals so accused.J6 I have found that Kantor attributed the closing of the store solely to the economic condition , and the inability of Kantor to obtain additional credits , on November 21, 1967, in a vain effort to keep the store operating. When the union representatives requested the employment of the discriminatees herein, on December 6, no mention of thefts appears to have been made by Arnold Kantor, Arnold Meade, or Gradsky . General Counsel , in his brief, calls attention to the fact, as I have found, that the Rosenthal response, of December 19, 1967, to the Union's request that these individuals be employed , relied solely on the assertion that Respondent South Discount was not a successor . No mention is made therein of the present accusations. Respondents, in their brief, assert that the Board erred in ordering a remand, on the premise that General Counsel did not allege a failure to hire, on or about December 7, 1967, as a violation of Section 8(a)(3). I find no merit in this assertion , for the reasons explicated supra Respondents assert that there is no evidence that the discriminatees made unconditional applications for employment , and no evidence that jobs were available. I find no merit in these contentions, for reasons explicated supra. Respondents assert that General Counsel has not proven a discriminatory motive as the reason for the failure to hire these employees , and further assert "that some employees had engaged or were involved in theft." The most that can be said of the recitation of Gradsky, insofar as it relates to the 35 discriminatees, is that McKnight admitted ringing cash register sales, on the instructions of her unidentified supervisor, at less than the cost of the merchandise , on two occasions . The balance of Gradsky' s recitation relates to hearsay accusations , insofar as these discriminatees may be involved, which, admittedly, Respondent never sought to verify by further investigation , or by questioning of the alleged accused. The purported reason , for this failure, according to Gradsky, was that their attention turned to the economic condition of the store , and efforts to obtain additional credit to keep the store functioning . I have found Gradsky not to be a credible witness, by reason of the exaggerations and contradictions which appear in his recitation, as well as his unimpressive demeanor. Respondents would substitute an asserted suspicion of widespread theft as a predicate for a belief that these discriminatees were, in each instance, unworthy of consideration for employment . In view of the instructions which Kantor purportedly gave Linch , it affirmatively "Gradsky's penchant for exaggeration is demonstrated in his recitation of his meeting with Harter and Mitchell , on December 20, 1967 Gradsky asserted Mitchell requested employment of employees "that we absolutely knew, and had admitted thievery " appears that at most only 13 cashiers and 3 former night clerks were included in Respondent' s suspicions. Respondents have advanced no plausible reason for their failure to hire any of the other 19 applicants , including the 6 in the meat department. Respondent's effort to attribute the difference between the low gross grocery percentage , in the last 12-week period, ending on November 5, 1967, to widespread theft, does not withstand scrutiny , in the light of the assertions of Manager Reinhardt , whose undisputed testimony was that the low gross grocery percentage was in large measure due to excessive sales of "loss leaders." Reinhardt asserted that approximately one-third of the total sales were loss leaders, sold at cost , $ 14,000 in a total grocery sales of $43 ,000. Respondents have produced no records to dispute these assertions. General Counsel asserts, in his brief , that an affirmative defense must be rejected where there is an absence of proof to sustain Respondent's contentions." General Counsel correctly asserts that the failure of Respondents to produce employee witnesses , or former employee witnesses, who may have had knowledge of the identity of individuals involved in thefts, permits an inference that the testimony of these uncalled individuals might have been adverse to Respondents , and it was for this reason that they were not produced." I find it unnecessary to repeat the findings I have set forth in the initial decision in the section entitled "Contentions of Parties and Concluding Findings" which I reaffirm . In the initial decision I found significant the absence, and complete void , in the extensive testimony of Milton Kantor, of any explanation for Respondent's failure to employ a single applicant . This finding, in the light of the remand hearing , requires amplification. I find the assertions of widespread theft , as justification for failure to hire, as advanced largely by Gradsky and corroborated by Kantor, are an afterthought and pretextuous. In so finding, I am not unmindful of the representations of Respondent's counsel , at the initial hearing, as to the reasons why the admission of this purported evidence was sought , and the disclaimers that it was for the purpose of denying anyone a right to employment. Respondents, in their brief, assert correctly that a mere reliance on previous unfair labor practices occurring beyond the 10(b) period cannot sustain a finding of illegal motivation ." However, in that case, as set forth in the section entitled "Contentions of Parties and Concluding Findings" of the initial decision , I have noted that the court held that where occurrences within 6-month limitations period in and of themselves may constitute, as a substantive matter, unfair labor practices, earlier events may be utilized to shed light on the true character of matters occurring within the limitations period; and for that purpose Section 10(b) does not bar such evidentiary use of anterior events. Accordingly, for the reasons set forth , I reaffirm my earlier finding that the failure to hire any of the 35 employees, named supra, upon the request of the union representatives , was discriminatorily motivated and violative of the provisions of Section 8(a)(3) and (1) of the "Citing: Liberty Coach Company, Inc, 128 NLRB 160, 169-70. "Citing- International Association of Bridge. Structural, Etc, Local 600 (Bay City Erection Company, Inc), 134 NLRB 301, 306 In. It, expanded on other grounds 144 NLRB 1049; Vogue-Wright Studios, Inc , 76 NLRB 773, 778 "Citing: Bryant Manufacturing Co v N.L R B, 362 U.S. 411 434 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Act. I also reaffirm my earlier findings as to the identity of the Respondents chargeable with the failure to hire. Offers of Compromise General Counsel urges , correctly, that evidence of negotiations looking to settlement of the proceedings before the Board are obviously immaterial to the issues." The Board has stated that it would give no weight to evidence of efforts at compromise in deciding whether a respondent's failure to reinstate employees was discriminatory , since offers of settlement or compromise have no probative value as evidence of guilt or liability. Lexington Telephone Company, 39 NLRB 1130, 1132, fn. 4. General Counsel urges that the principle that employees must be offered unconditional reinstatement is well settled, by numerous Board Decisions, with court approval.'' Ergo, an offer of employment, to stay the running of backpay liability, must similarly be unconditional. Having found that Respondent has not unconditionally offered employment at the 4601 South Dixie store, to the discriminatees, I find it unnecessary to treat with Respondent's contentions relative to the admissibility of evidence relative to its efforts to compromise. THE REMEDY The recommendations contained in "The Remedy" of the initial decision reaffirmed, except the second sentence of the second paragraph . Inadvertently, the term "reinstatement" was used . The following second sentence is therefore substituted : Accordingly, I recommend that "Citing. Ford Motor Company. 23 NLRB 342, 367-368, fn. 45, enfg. consent decree 122 F.2d 414 (C.A. 8). "Citing. Eastern Die Company. 142 NLRB 601, 602-603, enfg. 340 F.2d 607 (C.A 1), cert. denied 381 U.S. 591; Ertel Manufacturing Corp. 147 NLRB 312, 333, enfg. 352 F.2d 916 (C.A. 7). Respondents offer employment, to each of the discriminatees named, at the same or substantially equivalent positions at which they would have been employed had they not been discriminated against, dismissing, if necessary, to provide employment for those offered and accepting employment , all employees at 4601 South Dixie Drive, transferred to or hired on or since December 6, 1967.01 CONCLUSIONS OF LAW The conclusions of law contained in the initial decision, at page 35, and more particularly paragraph 4 thereof, which relates to the matter of this remand , are reaffirmed. RECOMMENDED ORDER The Recommended Order of the initial Decision, is reaffirmed, except paragraph 2(a) is stricken and the following is substituted: (a) Offer to the 35 employees named in "The Remedy" employment, at the same or substantially equivalent positions at which they would have been employed had they not been discriminated against, and make each whole for the loss of pay each may have suffered by reason of Respondent's discrimination against each in accordance with the recommendations set forth in "The Remedy" herein. "The last indented paragraph of the Appendix, attached to the initial decision is similarly modified, by striking the words commencing immediate and full reinstatement, and ending December 6, 1967, and substituting, in lieu thereof "employment at the same or substantially equivalent positions at which they would have been employed had they not been discriminated against, dismissing, if necessary, to provide employment for those offered and accepting employment , all employees at 4601 South Dixie Drive, transferred to or hired on or since December 6, 1967.