Local 1199, Drug and Hospital Union

456 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Local 1199, Drug and Hospital Union, RWDSU, AFL-CIO and 666 Cosmetics, Inc. Case 2-CP-466 July 27, 1972 DECISION AND ORDER BY MEMBERS FANNING, KENNEDY, AND PENELLO On May 10, 1972, Trial Examiner Benjamin B. Lipton issued the attached Decision in this proceed- ing. Thereafter, General Counsel filed exceptions and a supporting brief, and Respondent filed a brief in support of the Trial Examiner's Decision along with an answering brief to the General Counsel's exceptions. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the National Labor Relations Board has delegated its authority in this proceeding to a three-member panel. The Board has considered the record and the Trial Examiner's Decision in light of the exceptions and briefs and has decided to affirm the Trial Examiner's rulings, findings, and conclusions and to adopt his recommended Order.' ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board adopts as its Order the recommend- ed Order of the Trial Examiner and hereby orders that the complaint be, and it hereby is, dismissed in its entirety. I Subsequent to the issuance of the Trial Examiner's Decision, Judge Tenney of the U S District Court, Southern District of N Y , on May 16, 1972, issued a preliminary injunction pending final adjudication by the Board. TRIAL EXAMINER'S DECISION STATEMENT OF THE CASE BENJAMIN B. LIPTON, Trial Examiner: Upon a charge filed by 666 Cosmetics, Inc., herein called Cosmetics, and a complaint issued by the General Counsel,' this case was heard before me in New York, New York, on March 20, i The charge was filed and served by registered mail on November 3, 1971, and the complaint issued on February 25, 1972 2 The court's decision had not been rendered as of this writing 3 Cosmetics moved to strike Respondent 's second affirmative defense relating to the allegation of successorship, supra Ruling was reserved by the Trial Examiner Pertaining to the successorship question , Respondent had filed a charge against Cosmetics alleging violation of Sec 8 (a)(I), (3), and (5), and the Regional Director's dismissal of this charge was upheld on appeal to the General Counsel Particularly as the successorship defense has already been litigated in the court case , the record of which has been adopted herein by the parties, the motion to strike is denied However, I find- it-unnecessary to ass upon whether such a defense in an 8(b )(7)(C) case can be established without the issuance of an 8(a)(5) complaint See 1972. The complaint alleges in substance that the above- captioned Respondent or Union, from certain dates, has engaged in picketing of Cosmetics and Ja-Lar, Inc., herein called Ja-Lar, at their separate places of business in New York City; that such picketing has continued for more than a reasonable period, in excess of 30 days, without a petition having been filed with the Board under Section 9(c) of the Act; that Respondent has never been certified as the representative of Cosmetics' employees; and that by such conduct Respondent violated Section 8(b)(7)(C) of the Act. In answer to the complaint, Respondent admitted certain allegations, including its lack of Board certification and the failure to file an election petition, but denied the alleged violations and asserted the affirmative defenses that (1) Cosmetics is not an employer engaged in commerce within the meaning of the Act and its operations do not satisfy the applicable jurisdictional standard of the Board, and (2) Cosmetics is legally the successor to Three Sixes Cromwell Drug Corp., herein called Cromwell, and is bound, but nevertheless refuses, to recognize Respondent and abide by the existing collective-bargaining contract between Respondent and Cromwell with respect to the present employees of Cosmetics. For these reasons, Respondent contends that the picketing in question is not unlawful. On March 6 and 7, 1971, a full hearing was conducted before the United States District Court, Southern District of New York, upon petition by the General Counsel for injunctive relief under Section 10(1) of the Act.2 The transcript and exhibits in the court proceeding were received in evidence herein, by stipulation of the parties, in lieu of relitigation of the same essential facts. In addition, opportunity was afforded the parties to adduce any further evidence on the question of jurisdiction, and such further evidence was taken from the Charging Party, Cosmetics.3 Upon the entire record in the case,4 with due considera- tion of the briefs filed by General Counsel, Respondent, and Charging Party, and from my observation of the witnesses who testified before me, I make the following: FINDINGS OF FACT A. Introductory Facts and General Background Cosmetics operates a retail establishment at 666 Fifth Avenue (at 53rd Street), Manhattan, New York City, where it is engaged in the sale of cosmetics, health and beauty aids, cigarettes, candy, and related products. It has no pharmacy or luncheonette. Cosmetics was formed and incorporated5 in August 1971, with stock ownership equally divided between Stanley Codkind, president, and Local 295, affiliated with International Brotherhood of Teamsters, etc (Calderon Trucking Corp), 178 NLRB 52, 54 4 Respondent's motion to dismiss is disposed of in accordance with the findings below Among the purposes stated in the Certificate of Incorporation are To manufacture or otherwise produce, purchase compound. prepare and sell all kinds of drugs, chemicals, medicines, physicians' and surgeons' supplies and instruments ; crutches, artificial limbs, splints, rubber goods and all supplies, appliances and conveniences required by invalids, dyes, colors, soaps, cosmetics. perfumes, toilet supplies, cameras, stationery and stationery supplies, novelties, tobacco in all forms, ices, ice cream, confectionery and soft drinks To fill prescrip- tions, maintain newstands, soda fountains and lunch counters, and in 198 NLRB No. 83 LOCAL 1199, DRUG AND HOSPITAL UNION 457 Lawrence Cole, secretary-treasurer. Cole and his wife are the sole stockholders of Ja-Lar, which operates a retail "discount" store selling cosmetics, health and beauty aids, and other related products at a location in Queens, New York City. At the Fifth Avenue premises, Cromwell had, for 5 years, operated a "drug store," which encompassed a pharmacy and luncheonette. Other firms had preceded Cromwell in similar operations for about 10 years. Items which Cromwell sold at retail included tobacco products, candy, toys, baby goods, cosmetics, and health and beauty aids. Cromwell's employees were represented by Respondent under successive collective-bargaining contracts. About August 6, Cromwell's business was taken over upon foreclosure of its mortgage .6 Thereafter the drug store was operated by the successor trustee of a secured party (2909 Corporation), which retained the same employees and adhered to the conditions of the union contract.? As of August 19, Stanley Codkind and Lawrence Cole, of the later formed Cosmetics, contracted for the purchase from the successor trustee of the existing lease of the premises, which had an unexpired term of about 12 years. The agreement specifically provided that the sale was not of "an operating business," and did not include any of the fixtures, merchandise, or the good will. Virtually all the inventory fixtures and equipment of Cromwell were legally possessed by the secured party.8 On September 3, the foregoing personalty was assigned to and accepted by Cosmetics in a "letter of abandonment" (which stated that Cosmetics would bear all costs for the disposal of the property) .9 Codkind fixed the date of September 8 on which Cosmetics was "organized," purchased the lease to the premises,10 and the successor trustee terminated operation,of the drug store.ii On September 9, Cosmetics took possession of the store.12 On September 22, it opened the store for business with a new complement of employ- ees. Codkind testified that, during the interim, they were engaged in "cleaning the store, sorting some merchandise, getting rid of any old stuff that was there, also trying to contact a designer." While in its brief Cosmetics argues against an inference that it continued to use the existing fixtures and sold from the prior inventory, it asserts, notwithstanding, that it could not be faulted "for attempt- ing to meet overhead expenses by temporarily using what general do everything pertaining to the drug store and discount drug store business 6 On August 9, Cromwell formally surrendered possession of all personal property in the store to 2909 Corporation , as agent for the secured party 1 There is no evidence that it assumed or was legally bound by the contract 8 However, Attorney Greene testified that an auction was held at the end of August or early September at which the secured party purchased the remainder or bulk of the personal property "to protect its secured interest " He also stated that at this auction "a registered pharmacist" purchased some of the drugs and took what he wanted Martin Irving, the pharmacist for Cromwell and also for the successor trustee, testified that on September 8 he tendered all the narcotics to a Government agency and received a rebate for this inventory, he did not purchase or take anything else 9 No witnesses were called for the secured party, the successor trustee, or the dominant lessor (Tishman Realty Co). The articles which were "abandoned" obviously were of value There is no showing whether or not any consideration passed for the acquisition of such property by Cosmetics 10 As already shown, the purchase contract is dated August 19, the nature of this asserted purchase transaction on September 8 is obscure ii Cole had visited the drug store at times in August during which he was available." There is sufficient basis on this record to find, as I do, that a major portion of the preexisting fixtures and inventory was utilized by Cosmetics, continu- ing as of the dates of the hearings.13 However, certain remodeling of the store was undertaken by Cosmetics. On October 5, 1971, it entered into a contract with Pacco Store Equipment Corp. "for the installation of store fixtures" in the amount of approxi- mately $30,000.14 Work was begun in late December, and was 95 percent completed at the time of the hearings. Cosmetics' accountant, Arnold Friedman, testified that additional costs amounting to $25,000 were necessary to renovate the store; e.g., altering the store front, new electrical fixtures, carpeting, window gates, alarm system, and cash registers. As of March 20 (6 months later), part of this work was being performed in the amount of $4,000. There are no contracts, orders, or other evidence to show when, if at all, the rest of such work will be done. On September 9, Codkind and Attorney Greene were approached at the Fifth Avenue premises by an agent of Respondent, who stated that he had a contract they "had to sign." In effect, the request was refused, with the explanation that Cosmetics did not intend to operate a drug store but a "sophisticated health and beauty aids salon and men's bar," On the same day, picketing by Respondent commenced at this location, and thereafter was conducted continuously during store hours without cessation as of the hearing dates. Initially, the picket signs carried the legend, "This Drug Store Is On Strike. Please Do Not Patronize. Local 1199 Hospital and Drugs." After Cosmetics opened for business on September 22, the signs were changed to assert that the employees were "locked out." 15 On September 13 and October 21, an agent of Respondent made further demands upon Cosmetics to sign a contract and threatened to picket the store operated by Cole in Queens. Following the latter conversation, pickets were installed at Ja-Lar,16 and have been maintained thereafter. In addition, handbills were distributed, on undisclosed dates, at both locations requesting the public not to patronize these stores and suggesting named drugstores in the respective areas. It is unquestionable that the picketing at both locations is based on Respondent's claim of successorship and has the object of obtaining spoke to certain store employees In mid-August, Cole placed an individual called "Mike" in the store on a full-time daily basis to "observe" the operations until they were taken over by Cosmetics 12 Codkind indicated the type of merchandise in the store when Cosmetics took it over . cigarettes, cigars, cosmetics, "some health and beauty aids," toys, games. paperbacks, and some prescription type items is These are matters particularly in the knowledge of Cosmetics It takes the position that it was starting a new kind of enterprise entirely different from that of its predecessors However, as to the use of Cromwell 's fixtures and inventory, it has, consciously in my opinion, failed to show the facts clearly is The agreement to purchase the lease, dated August 19, requires that, within 6 months thereof, Cosmetics shall acquire and install furniture, fixtures, and equipment with a cost value of at least $30,000, and shall also acquire and maintain an inventory of saleable merchandise with a cost value of at least $40,000 i5 In part, "LOCKED OUT' HELP US SAVE OUR JOBS' We have worked in this store from 5 to 14 years PLEASE DO NOT PATRONIZE." 16 The picket signs read, e g, "DO NOT PATRONIZE THIS STORE UNFAIR TO UNION DRUG STORES" 458 DECISIONS OF NATIONAL LABOR RELATIONS HOARD recognition and the assumption of the union contract to cover Cosmetics' employees. Codkind gave testimony, in generalized terms, concern- ing the effects of the picketing on Cosmetics' business, e.g., it kept customers out, it was hurting the business, and he had to run sales "practically at cost." He related certain incidents on the picket line. For example, there was no physical touching of the customers-"just blocking." Such testimony, without further elaboration and probative support, can scarcely be taken as evidence that, for any appreciable time, customers were physically prevented from entering the store. One concrete instance was given in which an unidentified picket told a customer who purchased a razor that she should cut her throat with it for going into the store. In general, the evidence does not e§tablish that the picketing, over the period of 6 months, was marked by unlawful or obstructive tactics; police were on the scene. Nor was it factually shown that, as a result of the picketing, Cosmetics was seriously hampered in conducting its business by an inability to obtain supplies, remodel, or make repairs. Nevertheless, it is recognized, as the Board has often done, that picketing generally has an adverse effect on a target business, particularly in the retail industry. For purposes of jurisdiction, the degree or extent to which Cosmetics' operations were affected by Respon- dent's picketing has not been demonstrated by the evidence. B. Jurisdiction As applicable to Cosmetics, the Board's jurisdictional standard embracing retail enterprises requires an annual gross volume of business of at least $500,000.17 This standard has long and consistently been maintained by the Board. There is no element of discretion for exercising jurisdiction on a case-by-case basis. General Counsel adduced the evidence that, from September 22, when selling commenced, through January 31, Cosmetics had total sales of $66,639 (further discussed infra). Projected on an annual basis, the gross volume of business amounts to approximately $185,000.18 During the same period, Cos- metics purchased cigarettes in the amount of $21,960 from Woodside Tobacco Corp. within the State of New York, these cigarettes having been purchased by Woodside from outside the State. The cigarettes purchases calculated for the yearly period approximate $61,000, sufficiently in excess of the de minimis requirement for legal or statutory jurisdiction.19 It is urged by General Counsel and Cosmetics that the actual amount of business done by Cosmetics during the partial year of its operations should be disregarded, principally because it is a new enterprise and has been subjected to Respondent's picketing during the entire time of its existence. Various theories are advanced to justify the assertion of jurisdiction in this case. The major contention is made that Respondent's continuous picketing has precluded Cosmetics from attain- ing gross sales in excess of $500,000 during its first year of operations. Urged as a more reliable index of the true volume of the Company's annual business, evidence was presented of Cosmetics' own estimate of anticipated revenues, and of its investments, expenditures, and plans for improvement of the facilities. Such evidence, examined below, is put forward as establishing a basis for the reasonable expectation of meeting the Board's jurisdiction- al retail standard. Arnold Friedman is the certified public accountant for Ja-Lar, Lawrence Cole's "retail cosmetic and beauty aid" store in Queens.20 He testified that Cole told him he would like to open up a much larger operation in New York at which he expected to do over a million dollars a year. Attorney Greene represented the principals in the forma- tion of Cosmetics. He testified that when Cole came to him and said that "he looked for a million dollars," he (Greene) told him, "That's the only time you are going to make money, and anything less than that, this store can only break even." Before the decision to purchase the lease of the Fifth Avenue store, Friedman was asked to look at Cromwell's books and then project figures of the amount of business necessary to cover overhead for the first year of Cosmetics' anticipated operation. After consulting with Cole, Fried- man prepared the following document in handwriting (G.C. Exh. 2D): Cosmetics Cigarettes Beauty lids 250,000 200,000 200,000 40% = 100,000 10% = 20,000 22% = 44,000 Expenses 650,000 Yearly 164,000 Salaries Rent 30,000 15) officers Revenue 3,000 15) Salaries 88,000 3 Payroll Taxes 9,000 30 Cosmeticians Insurance 3,000 3 Acctg. 3,000 20 Check out girls Telephone 3,000 Store Porter & Expenses 3,500 8 Stock Boy Advertising 88 & Printing 12,000 154,500 Improvements 60,000 5,000 12 yrs. Life Ins. Term Ins. Prem. 3,000 100,000 each 162,500 He also prepared a statement (G.C. Exh . 2C) of actual "income and expenses" for the period from September through January 31,21 viz: it Carolina Supplies and Cement Co, 122 NLRB 88 19 Catalina Island Sightseeing Lines, 124 NLRB 813 18 The Board customarily projects available revenue figures respecting a 20 No evidence was offered on Ja-Lar's volume of business or the effect business in operation for less than a year E g, Northwest Smorgasboard, of the picketing thereon Inc, 163 NLRB 425 21 Another document, "Schedule of Monies Paid and Due-Sept 22, LOCAL 1199, DRUG AND HOSPITAL UNION 459 Net Sales 66639 Less : Cost of Sales Merchandise Purchases 63703 Less: Estimated Inventory 1/31/72 13924 Cost of Sales 49779 Gross Profit ( Estimated at 25.37,) 16860 Less : Operating Expenses Rent 12519 Prior Rent 833 (1) Salaries 5524 Telephone 137 Store Expenses 239 Office Expenses 203 Insurance 560 Professional Fees 400 Interest Expense 46 Payroll Taxes 508 Rent Tax 1001 Miscellaneous Expenses 646 Total Operating Expenses 22661 Net Operating Loss (5756) Less: Write-Off of Lease Cost 6000 Net Loss For The Period (11756) (1) Note: No Salaries For Officers Are Included. A document obtained by Codkind from the dominant landlord (Tishman) showing the gross sales of Cromwell from April 1969 through June 1971 was offered in the 10(1) proceeding, and is relied on by General Counsel and Cosmetics in the instant case. As I find, the substance of this document was substantially verified n subsequent testimony of Cromwell's president, Martin Margolis, and I admit it into the record.22 For the calendar year ending March 31, Cromwell's gross sales of all items, excluding food and beverages (i.e., the luncheonette), are shown as $347,204.21. Margolis gave the approximate figure for this period of $359,000, which apparetnly included receipts from the luncheonette.23 During the same annual period, the revenue derived from the sale of tobacco products amounted to $66,862.14. Margolis affirmatively answered the question whether Cromwell was losing money.24 During the 5 years of its operation, Cromwell normally employed two full-time and one part-time pharmacists, two cosmeticians, two cigar clerks, and one porter. Upon careful study of the foregoing material and the entire record, I reach the following analyses and subsidiary findings: 1. Apart from the casual mention of certain products, there is no attempt at clarification of what is especially encompassed in a retail enterprise purportedly confined to "cosmetics, health and beauty aids." As earlier shown, the large variety and bulk of Cromwell's inventory, excluding narcotics and prescription drugs, were carried and sold by Cosmetics for approximately 6 months of its operation continuing at the time of the hearings. During this period, in my opinion, Cosmetics had been operating essentially as a drug store, such as Cromwell, without the pharmacy and the luncheonette. A proper factor to be considered, though not decisive, is Cromwell's annual volume in its last 2 years of about $350,000. 2. The evidence does not establish, as claimed by General Counsel, that the store has now been "completely remodeled." Aside from vague plans for the future, still unaccomplished are basic "improvements" deemed neces- sary, such as a new store front, electrical fixtures and wiring, carpeting, alarm system, and cash registers, in the amount of approximately $21,000.25 3. The testimony relating to Cole's advance objective of a million dollars annual business, as well as Attorney Greene's comment thereon, supra, provides no indication as to when, if at all, this might be achieved. Although it represents an understandable aspiration, for the purpose it was shown this evidence must be rejected as devoid of substance and mere speculation. 4. One of the theories, pursued at some length, is that a reasonable projection of Cosmetics' annual gross sales must necessarily contemplate a profit return sufficient at least to cover its expenses. I do not pass upon whether, in other circumstances, such a theory may provide a reliable measure of predictable annual volume of business for jurisdiction purposes before the Board. There is no explanation why Friedman's statements as of January 31 were not prepared to reflect more current figures, at least for the 5-month period ending February 28, which information was undoubtedly available during both hear- ings in mid-March. Thus, it appears that selective informa- tion was adduced.26 Realistic account should be taken of the vagaries and exigencies of a new business venture, as well as the quite possible acceptance by the principals that a profitable position on the books might not be achieved for an initial development period exceeding the first year or two. Nevertheless, upon an arguendo assumption that the theory is not • invalid per se, the support offered thereunder will be examined. As he was requested, Accountant Friedman prepared an estimate of the amount of sales needed to cover the expenses or overhead during the first year, rather than his own projection of the volume of business which he thought would be attained. Certain of the figures in this document (G.C. Exh. 2B) I find seriously questionable. Projected sales of cigarettes of $200,000 (at 10% 1971 Thru Nov. 15, 1971" was received as GC. Exh 2D This exhibit contains certain irrelevant and unsubstantiated matter One item is noted, payroll for officers in the sum of $4,000 "due as of Nov. 15th," which was apparently not paid as of January 31 The material expenses actually paid are reflected in the statement for the period ending January 31 (G C Exh 2C) 22 The exhibit was not reoffered following Margolis' testimony and was not formally entered into evidence by the court 23 He indicated an amount in excess of $300,000 for the next preceding year 24 No elaboration was sought as to the reason for the losses, or the length of time losses were suffered. 25 Friedman gave a broader estimate of improvements, which included items, e g, air-conditioning, painting, and plastering, involving a sum total of $60,000, to be amortized over the remaining lease period of 12 years 26 While not indispensable in support of the argument advanced, it would have rounded out the picture to show Cosmetics' financial condition at this time, as in the form of a balance sheet 460 DECISIONS OF NATIONAL LABOR RELATIONS BOARD markup), constituting about one-third of the total annual figure ($650,000), are unacceptable. The actual experience as of January 31 reflects cigarette purchases by Cosmetics of about $22,000,27 or at the rate of $61,000 for the year.28 Significantly, at the same location, Cromwell sold about $67,000 worth of tobacco, including cigarettes and cigars, in the full year ending April 1971. I perceive no reasonable basis on this record to expect that, absent the picketing, Cosmetics in its first year of business would substantially surpass the actual experience of Cromwell in the sale of cigarettes. A comparison of Friedman's projected expenses totaling $162,500 and those actually incurred after more than 4 months of operations shows large disparities as to particular items, which I cannot find attributable to the picketing, e.g., salaries, payroll taxes, insurance, account- ing, telephone, store expenses, advertising, and printing. He indicated salaries of $15,000 each for the two officers, i.e., Cole and Codkind, were not paid as of January 31, with no explanation given. Cole is the president and operator of Ja-Lar in Queens; and it is not shown whether Codkind is similarly involved with other interests away from the Fifth Avenue store. It is also noted that Cosmetics is apparently operating with fewer regular employees than did Cromwell, exclusive of the luncheonette.29 As part of the first year expenses of $162,500 estimated by Friedman are included (a) $5,000 for amortization (distributed over 12 years) for physical improvements, and (b) $3,000 for life insurance premiums on $100,000 policies covering Cole and Codkind. Neither item is a true operating expense; item (a) is a capital improvement more in the nature of an investment enhancing the value of the business. Similarly, in Friedman's January 31 statement (G.C. Exh. 2C), the amount of $6,000, included as an expense for the "right-off of lease cost,"30 is clearly a capital investment rather than an operating expenditure.31 In summary, using Friedman's formula and estimated 25.3 percent markup, a full projection of the real operating expenses ($22,616), as of January 31. would result in a recovery of these expenses upon annual gross sales of approximately $272,000. Cosmetics' profit theory may be considered one step further. Friedman reports a net loss of $11,756 in his statement of January 31. Deducting the lease right-off, the net operating loss is $5,756 on sales of $66,639,32 with an estimated markup of 25.3 percent, for the period of more than 4 months. Applying the same markup, it may be reasoned that a net profit would have been realized during this initial period affected by the picketing on sales of $100,000 (allowing twice the sum of the reported operating expenses, excluding only the fixed rental and rent tax). Projected on an annual basis, Cosmetics would be operating at a clear profit under existing conditions upon gross sales of $400,000. 5. In general, I find the nature of the evidence presented to establish Board jurisdiction is largely conjec- tural and unpersuasive 33 Cosmetics' accountant and lawyer are not qualified as expert witnesses. 6. While Cosmetics is undoubtedly sincere in its desire to build its annual business, beyond that of its predeces- sor's $359,000 volume, to a point exceeding the requisite for Board jurisdiction, in my view, there is no reliable evidence to indicate that such a result was reasonably to be expected under normal undisturbed conditions during the first year, or within an imminent period thereafter. The further contention is made that Cosmetics should be presumed to meet the Board's discretionary standards, on the ground that Respondent, as a "wrongdoer" by its unlawful picketing, prevented Cosmetics "from generating sales which would be a fair, representative indication of its capability to do business." This is indeed a novel concept coming from the General Counsel.34 It certainly cannot be assumed or found under the complaint that the picketing is unlawful in advance of a jurisdictional determination. Based on its experience with the predecessors of Cosmetics, Respondent could have reason to believe that the normal operations of Cosmetics would not meet the Board's jurisdictional minimum, in which case the picketing, apart from the merits of an alleged violation, would be legal under Federal and state law.35 This further contention of General Counsel is therefore rejected. It is true that the Board will not consider a drop in business volume, caused by picketing, as a factor in defeasence of Board jurisdiction. In such cases, the Board looks to the commerce data which is actually available, such as in the period preceding the picketing.36 Where newly opened operations are involved, it is permissible to project sales to obtain "a reasonably reliable estimate" of the annual gross volume.37 As to new enterprises with no representative sales experience , in taking jurisdiction in certain cases the Board has relied on the "substantial 27 More than one-third of all purchases 28 Codkind's testimony that cigarettes and other merchandise were being sold "practically" at cost, because of the picketing, is too vague and unsubstantiated to be meaningful 29 Of course, no weight can be accorded the gratuitous conclusory statement in Cosmetics' brief that it was prevented from hiring the anticipated complement by reason of Respondent's picketing 30 Cosmetics purchased the store lease for $140,000 The terms provide for initial payment of $5,000, an additional $25,000 on closing, assumption of $2,000 rent owing from the prior tenant , and 72 monthly installments of $1,500 31 In Cosmetics' brief, it is also argued that Friedman omitted from his estimated expenses the amount of $18,000 for the annual right-off of the cost of the lease, which would bring the total projected yearly expense to $180,500, and would raise the gross annual sales projection to $722,000. 32 Of this amount, it would appear that $2,936 involves sales from Cromwell's inventory. 33 Moreover, it appears to me that, in several significant respects, the testimony and representations on behalf of Cosmetics consist of exaggera- tions and self-serving conclusions, leaving substantial doubt as to reliability 34 Tropicana Products, Inc, 122 NLRB 121, is clearly distinguishable on grounds of overriding administrative policy and public interest 35 Under Sec 8(b)(7)(C), the picketing would not be violative for the first 29 days, nor would an election petition be processed absent jurisdiction. Of further interest are the procedural developments which took place at the Board Cosmetics did not file its charge until almost 2 months after the picketing began On December 3, the Regional Director formally refused to issue a complaint on jurisdictional grounds On January 4, the General Counsel decided, on appeal , that the question warrants Board determina- tion "if substantive merit exists " Respondent's 8(a)(5 ) charge, embracing its successorship position, was dismissed by the Regional Director on January 20, and the appeal was denied on February 9 36 E g, Idaho State District Court, 164 NLRB 95, Kachco Corporation d/b/a Hickory Farms of Ohio, 180 NLRB 755 37 E g, Irvin Morgan, t/a Morgan Shoe Company, 129 NLRB 1339 (a lead case) where, despite the effect of picketing for 10 days, the projected annual sales of $465,572 22 were held insufficient for assumption of jurisdiction See also United Slate, Tile and Composition Roofers, etc, AFL-CIO, Local Union No 57 (Atlas Roofing Co, Inc), 131 NLRB 1267 LOCAL 1199, DRUG AND HOSPITAL UNION 461 investment made in plant facilities," purchases, and orders to verify the reasonableness of the company's estimate.38 The probity, reliability, and substantiality of such estimates are, of course, essential considerations. Commerce predic- tions of a speculative character are explicitly disap- proved.39 For the reasons already shown, and upon the entire record, I come to the conclusion that the actual sales of Cosmetics, which it provided for about 4 months of operations, fall so far short of its predictions that, fairly considering the impact of the picketing, there is no reasonable expectancy that its annual volume of business would satisfy the Board's jurisdictional standard of $500,000.40 RECOMMENDED ORDER41 Accordingly, it is hereby recommended that the com- plaint be dismissed in its entirety. 39 E.g., New London Mills, Inc., 91 NLRB 1003, 1004. In Cowles Communications, Inc, 170 NLRB 1596, 1598, relied on by General Counsel, the evidence of investment in plant and equipment was found sufficient reasonably to anticipate on a projected basis that the annual volume would meet the Board's standard for newspapers of $200,000. There, at the time of the hearing, it was shown that the company had realized its expectations of gross sales in excess of $250,000 and a complement of 200 employees-with- in a 5-month period 39 Eg, Aroostook Federation of Farmers, Inc, 114 NLRB 538, 539. 40 See Local 140, etc, United Furniture Workers of America, AFL-CIO (Cenu Noll Sleep Products, Inc), 115 NLRB 318. 41 In the event no exceptions are filed as provided by Sec 102 46 of the Rules and Regulations of the National Labor Relations Board, the findings, conclusions, recommendations and recommended Order herein shall, as provided in Sec 102.48 of the Rules and Regulations, be adopted by the Board and become its findings, conclusions, and Order, and all objections thereto shall be deemed waived for all purposes