Kosher Kitchens, Inc.

NATL TERMINAL BAKING CORP. National Terminal Baking Corp., a Subsidiary of Kosher Kitchens, Inc. and Cake Bakers Union Local 51, American Bakery and Confectionery Workers International Union, AFL-CIO. Case 29-CA-1830 May 21, 1971 DECISION AND ORDER BY CHAIRMAN MILLER AND MEMBERS JENKINS AND KENNEDY On December 11, 1970, Trial Examiner Melvin J. Welles issued his Decision in the above-entitled pro- ceeding, finding that Respondent had engaged in and was engaging in unfair labor practices and recommend- ing that it cease and desist therefrom and take certain affirmative action as set forth in the attached Trial Examiner's Decision. The Trial Examiner further found that Respondent had not engaged in certain other unfair labor practices alleged in the complaint. Thereafter, the General Counsel filed exceptions to the Trial Examiner's Decision and a supporting brief. The Charging Party filed a statement in support of the Gen- eral Counsel's exceptions and brief. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the Na- tional Labor Relations Board has delegated its powers in connection with this case to a three-member panel. The Board has reviewed the rulings of the Trial Ex- aminer made at the hearing and finds that no prejudi- cial error was committed. The rulings are hereby affirmed. The Board has considered the Trial Ex- aminer's Decision, the exceptions, the briefs, and the entire record in the case, and hereby adopts the findings, conclusions, and recommendations of the Trial Examiner.' ORDER Pursuant to Section 10(c) of the National Labor Re- lations Act, as amended, the National Labor Relations Board adopts as its Order the recommended Order of the Trial Examiner and hereby orders that Respondent, National Terminal Baking Corp., a subsidiary of Kosher Kitchens, Inc., Brooklyn, New York, its offic- ers, agents, successors, and assigns, shall take the ac- tion set forth in the Trial Examiner's recommended Order. ' In view of the fact, as found by the Trial Examiner, that Respondent's decision to close its plant and the effectuation of that decision occurred almost simultaneously and resulted from pressing economic necessity, we are satisfied that the inclusion of a backpay provision in the remedy here ordered would be unrealistic, speculative, and inappropriate 190 NLRB No. 98 465 TRIAL EXAMINER'S DECISION STATEMENT OF THE CASE MELVIN J. WELLES, Trial Examiner: This case was heard at Brooklyn, New York, on September 14 and October 19 and 20, 1970, on a complaint issued March 31, 1970, based on charges filed October 24, 1969. The complaint alleges that Respondent violated Section 8(a)(1) and (5) of the Act by failing to disclose its intention to close its plant, and closing the plant without bargaining with the Union about the clos- ing or the effects of the closing on the employees. Respondent's President Arthur Siegel, who represented himself at the hearing,' filed an answer denying the substan- tive allegations of the complaint and denying that Respond- ent is engaged in commerce. Counsel for the General Counsel filed a brief. Upon the entire record in this case, including my observa- tion of the demeanor of the witnesses, I make the following: FINDINGS OF FACT I THE BUSINESS OF RESPONDENT Respondent, a New York corporation, with its principal office and place of business at Brooklyn, New York, is en- gaged in the manufacture and sale of doughnuts and related products. During the calendar year 1968, Respondent re- ceived goods, consisting of baking mixes, flours, and dough- nut sugars, valued in excess of $50,000 from points outside the State of New York.' During the calendar year 1969, Respondent received goods valued at more than $28,000 from Joe Lane Company, which goods were shipped to Respond- ent from New Jersey, and goods valued at more than $22,000 from the House of Fodera, a New York corporation, which were received by the House of Fodera from points outside the State of New York.' As both the direct inflow for the year 1968, and the combi- nation of direct and indirect inflow for the year 1969 exceed $50,000 in value, I find that Respondent is engaged in com- merce within the meaning of Section 2(6) and (7) of the Act. Siemons Mailing Service, 122 NLRB 81, 85. II THE LABOR ORGANIZATION INVOLVED Cake Bakers Union Local 51, American Bakery and Con- fectionery Workers International Union, AFL-CIO, is a la- bor organization within the meaning of Section 2(5) of the Act. III THE UNFAIR LABOR PRACTICES On September 24, 1969, the Union was certified by the Board as the exclusive bargaining representative of Respond- ent's employees. On October 9, 1969, Arthur R. Siegel, presi- dent of Respondent, met with Union Representatives Sidney Permisson and Herman Schlansky to discuss a proposed con- tract. Wages, the Union's pension plan, and other matters were discussed at this meeting. In the course of the discus- sions, Siegel indicated a number of times that he was losing money. He also told the union representatives that the seller Siegel was not present, nor did Respondent have any representative present at the 2d and 3d days of the hearing, although he had been notified that the hearing would be resumed on those days The hearings on those days concerned only commerce data This is based on the uncontradicted testimony of Robert J Bernholdt, of Joe Lane Company, located in New Jersey, and supporting documentary evidence Based on the testimony of Bernholdt, of John Fodera, president of House of Fodera, and supporting documentary evidence 466 DECISIONS OF NATIONAL LABOR RELATIONS BOARD of National Terminal stock to Siegel' had misrepresented to Siegel the financial status of National Terminal. Permisson testified that Siegel "may have said that if he loses enough money he might have to shut down," that he did say that he would be happy to have the Union run the bakery for him. Permisson also testified that Siegel mentioned having had two trucks stolen. Siegel testified that he told the union represent- atives in so many words that he was thinking of closing down within the week, and that Permisson asked Siegel to wait a week until the Union's president returned from California. Whether Siegel's or Permisson's version is correct need not be resolved, for reasons that will appear. The meeting ended with a tentative agreement to meet one week later at the Union's office, a meeting confirmed by telephone a few days later. The morning of October 16, Permisson received a call from an employee at the plant that the plant had been shut down. He went to the plant, where Production Manager Storkel confirmed that Siegel had terminated operations. Siegel testified that he decided to shut down permanently as a result of the theft of the second of the two trucks stolen during that week, which brought the Company to the "end of our money." He consulted his attorney and his accountant, and they advised him to close. Before Siegel called the plant to tell Storkel to shut down, he called the union office, accord- ing to him, to try to inform Union Representative Permisson or President Erlich of his decision. He did not leave any message except that he had called.' There was another meeting between the Union and Siegel sometime after October 16 and before May 1970. There was no testimony about what occurred at that meeting. The com- plaint herein issued March 31, 1970. Early in May 1970, Siegel telegraphed the Union requesting a meeting to bargain about the effects of the closing. A meeting was arranged, attended by Erlich and Permisson for the Union, and Siegel for Respondent. Erlich asked for 4 weeks' pay for the em- ployees, and Siegel countered by offering 1 hour's pay. Erlich indicated that was "ridiculous," but Siegel claimed he was broke, and could do no better. A week later another telegram from Siegel requested another meeting, which was held. Sie- gel again offered 1 hour's pay, and the meeting ended with the union officials saying there was no point in continuing to negotiate. CONCLUSIONS AND REMEDY As I indicated above, there are several discrepancies be- tween the version of the October 9 meeting as testified to by Permisson and that testified to by Siegel. Even Permisson's testimony, however, indicates that Siegel said Respondent was in poor financial condition, and that he told the union representatives it would be fine with him if the Union took over the business.' Based on Siegel's own testimony that he decided to shut down after the second truck was stolen, I do not credit his testimony that he told the union representatives on October 9 that he would shut down and was asked by them to remain open. But surely the purport of Siegel's remarks at the meeting could only lead to the conclusion that there was a strong possibility of the business closing In the light of what to such a small and, at the time, money-losing enterprise must have been a calamitous event, the theft of the two Actually to Kosher Kitchens , of which Siegel was principal stockholder ' Although there is testimony concerning the Union's telephone proce- dures, indicating calls are normally recorded in a book , it is of course not impossible that a mistake was made and Siegel's call not so recorded I am satisfied he made a call ' Permisson testified that he regarded remarks of this nature as "facetious and flippant I didn't pay much attention." trucks, with the second stolen the day before the shutdown, I am satisfied that the overwhelming economic need for shut- ting down then and there obviated any possible bargaining about the decision. There really was no time for bargaining, and bargaining would have been pointless. Bargaining about the effects of the shutdown on the employees is quite another matter, and is required in circumstances such as these wholly apart from the obligation (or lack of it) to bargain about the decision to close. Thompson Transport Company, Inc., 184 NLRB No. 5; Morrison Cafeterias Consolidated, Inc., 177 NLRB No. 113; Interstate Tool Co., Inc., 177 NLRB No. 107; N.L.R.B. v. Drapery Manufacturing Co., 425 F.2d 1026, 1028-1029, (C.A. 8). Thus the failure of Respondent to meet with the Union to bargain about the effects of the closing was plainly violative of Section 8(a)(5) and (1) of the Act, and I so find. As noted above, however, Siegel did offer to bargain with the Union about the effects of the closing, and met with union officials twice in May 1970. The General Counsel characterizes the offer and the meetings as "settlement attempts" because they occurred after the complaint issued, and 7 months after the closing. However characterized, the May offer and meetings do not serve as a defense to the earlier failure to bargain about the effects. They do, though, raise questions as to how or whether to remedy the earlier violation. The General Counsel contends that the remedy fashioned by the Board in Interstate Tool Co., Inc., supra, and Transmartne Navigation Corpora- tion, 170 NLRB No. 43, is appropriate here. The more recent Thompson Transport case, supra, however, suggests a differ- ent approach so far as this case is concerned. In Interstate and Transmarine, the Board ordered the company to bargain with the union about the effects of a plant closing on the employees, and, "in order to assure meaningful bargaining . and to re-create in some practicable manner a situation in which the parties' bargaining position is not entirely devoid of economic consequence for the Respondent," (Transma- rine, 170 NLRB No. 63), to pay the employees backpay from 5 days after the Board's decision to the date a bargain is reached or effects on a bona fide impasse is reached, with backpay liability to cease if the Union did not request bar- gaining in 5 days, or bargained in bad faith. Backpay would in no event be less than 2 weeks, or more than the employees would have earned from the date of the plant closing to the date the employee secured equivalent employment elsewhere, or the date the Company offered to bargain about effects, whichever was sooner. In Thompson, however, where the company offered to bargain about the effects 5 weeks after the closing, the Board took a different approach, not ordering the company to bargain, but, again because the "duty to bargain over the effects of a decision to close entails more than pro forma bargaining at a time after the dissipation of the union's economic strength," to pay backpay for the 5-week period. In addition, the Board in Thompson ordered that the terminated employees be placed on a preferential hiring list in the event the Company resumed its operations. The Company did have other terminals. It seems anomalous that in Interstate the company, which had never bargained with the union about effects, could, by bargaining in good faith after the Board's order, limit its backpay liability to 2 weeks, while in Thompson, where the company did bargain about effects 5 weeks after the closing, it must pay 5 weeks backpay. Presumably, had Thompson not bargained at all about effects, it would have had to pay only 2 weeks' backpay, provided it otherwise complied with the Board's order. Respondent here, as indicated above, did bar- gain about the effects of the closing some 5 months after the plant was closed. This would seem to require a remedy pat- terned after that in Thompson, rather than Interstate, where NATL TERMINAL BAKING CORP. no bargaining took place. In the earlier Transmarine case, the remedy was exactly the same as in Interstate, even though the company offered to bargain about effects about 8 months after the closing. I assume the Board's later decision would control in this respect. However, I deem only the cease and desist portion, and those affirmative aspects of the Thompson order as relate to preferential hiring, and sending notices to the employees concerned as applicable here. Specifically, I see no reason here to require any backpay. Since, under Thompson, no bargaining is being ordered, the rationale of Interstate and Transmarine to have backpay running in order to recreate a situation where there will be economic consequences does not apply And, unlike in Thompson, Respondent's failure to bargain about effects here did not occur at a time the plant was still open. As I have found, Respondent closed the plant in an almost emergency situation, and there was no possible way to bargain about effects before the closing. Thus the predicate for the backpay awards in all the cases cited disap- pears, for the Union was never in a position of strength at a time when any bargaining about effects could have taken place. I shall therefore recommend that Respondent cease and desist from the unfair labor practices found to have oc- curred, place the terminated employees on a preferential hir- ing list in the event Respondent resumes operations and, at that time, offer reinstatement to those employees, and mail notices to the terminated employees. Upon the basis of the foregoing findings of fact and upon the entire record in the case, I make the following: CONCLUSIONS OF LAW 1. Respondent, National Terminal Baking Corp., a subsidi- ary of Kosher Kitchens, Inc., is an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 2. Cake Bakers Union Local 51, American Bakery and Confectionery Workers International Union, AFL-CIO, is a labor organization within the meaning of Section 2(5) of the Act. 3. By refusing to bargain with the Union about the effects of closing its plant, Respondent engaged in unfair labor prac- tices within the meaning of Section 8(a)(1) and (5) of the Act. 4 The aforesaid unfair labor practices affect commerce within the meaning of Section 2(6) and (7) of the Act. Upon the foregoing findings of fact, conclusions of law, and the entire record, and pursuant to Section 10(c) of the Act, I hereby issue the following recommended:' ORDER Respondent, National Terminal Baking Corp., a subsidiary of Kosher Kitchens, Inc., its officers, agents, successors, and assigns, shall: 1. Cease and desist from refusing to bargain with Cake Bakers Union Local 51, American Bakery and Confectionery Workers International Union, AFL-CIO, with respect to the effects on its employees of its decision to close its plant in Brooklyn, New York. 2. Take the following affirmative action which the Board finds will effectuate the policies of the Act: ' In the event no exceptions are filed as provided by Section 102 46 of the Rules and Regulations of the National Labor Relations Board, the findings, conclusions and recommended Order herein shall, as provided in Section 102 48 of the Rules and Regulations, be adopted by the Board and become its findings, conclusions, and Order, and all objections thereto shall be deemed waived for all purposes 467 (a) Place the names of all its terminated employees on a preferential hiring list and, in the event its plant reopens, offer them reinstatement. (b) Mail exact copies of the notice attached hereto marked "Appendix"' to Cake Bakers Union Local 51, American Bak- ery and Confectionery Workers International Union, AFL- CIO, and to all employees who were employed by Respond- ent at its Brooklyn, New York, plant. Copies of said notice, on forms provided by the Regional Director for Region 29, after being duly signed by Respondent's representative, shall be mailed immediately upon receipt thereof as herein di- rected. (c) Notify the Regional Director for Region 29, in writing, within 20 days from the date of the receipt of this Decision, what steps the Respondent has taken to comply herewith.' I In the event the Board's Order is enforced by a Judgment of a United States Court of Appeals, the words in the notice reading "Posted by Order of the National Labor Relations Board" shall be changed to read "Posted pursuant to a Judgment of the United States Court of Appeals enforcing an Order of the National Labor Relations Board " ' In the event that this recommended Order is adopted by the Board after exceptions have been filed, this provision shall be modified to read "Notify the Regional Director for Region 29, in writing, within 20 days from the date of this Order, what steps Respondent has taken to comply herewith " APPENDIX NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government The National Labor Relations Board has found that we violated the National Labor Relations Act when we refused to bargain with Cake Bakers Union Local 51, American Bak- ery and Confectionery Workers International Union, AFL- CIO, over the effects on your jobs of our decision to close the Brooklyn plant. WE WILL NOT refuse to bargain with the above- named labor organization about the effects of our deci- sions which affect the employment status of our em- ployees who are represented by the above-named labor organization. WE WILL place the names of our employees who were discharged as a result of our decision to close our Brook- lyn, New York, plant, on a preferential hiring list in the event we resume our operations in Brooklyn, New York, and, at that time, offer reinstatement to these employees without prejudice to their seniority and other rights. NATIONAL TERMINAL BAKING CORP, A SUBSIDIARY OF KOSHER KITCHENS, INC (Employer) Dated By (Representative) (Title) This is an official notice and must not be defaced by any- one. 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. Any questions concerning this notice or compliance with its provisions, may be directed to the Board's Office, 16 Court Street, Fourth Floor, Brooklyn, New York 11201, Telephone 202-596-3535.