S-H Food Service, Inc.

S-H FOOD SERVICE, INC 95 S-H Food Service, Inc. and Bartenders, Hotel, Restau- rant & Cafeteria Employees Union, Local No. 36, affiliated with Hotel & Restaurant Employees and Bartenders International Union, AFL-CIO. Case 5- CA-4294 September 15, 1972 SUPPLEMENTAL DECISION AND ORDER BY CHAIRMAN MILLER AND MEMBERS FANNING, JENKINS, AND KENNEDY On June 26, 1970, the Board issued its Decision and Order in this case (183 NLRB No. 124) finding that the Respondent, though not a purchaser from Harry M. Stevens, Inc., of Maryland, was a successor to Stevens in the operation of food services at the Annapolis Statler Hilton Inn, the employing industry having remained essentially the same, and further finding that as such successor the Respondent failed to continue in effect the insurance and checkoff provi- sions of the predecessor's contract during its remain- ing life in violation of Section 8(a)(5) and (1) of the Act. Based upon its then recent decision in The Wil- liam J. Burns International Detective Agency, Inc., 182 NLRB 348, the Board ordered the Respondent to reinstate said contract provisions and maintain them during the term of the agreement, and to make whole employees who had suffered economic loss by Respondent's failure to maintain the insurance provi- sion of the contract. The United States Supreme Court, on May 15, 1972, rejected the Board's conclusion that a successor employer is bound to honor the terms of its predecessor's collective-bargaining agreement.' Thereafter the Respondent, relying on Burns, filed a Motion for Reconsideration and Dismissal of the out- standing Decision and Order of the Board in this proceeding, which proceeding has remained within the Board's jurisdiction during litigation of the Burns case. Responses to this motion were then filed by the Charging Party and the General Counsel, the Charg- ing Party urging that the motion be denied, and the General Counsel that the motion be granted. Charging Party contends that, apart from the Su- preme Court's finding that an 8(a)(5) violation cannot i N L.R B v Burns International Security Services, Inc, 92 S Ct 1571, affg William J Burns International Detective Agency, Inc v N L R B, 441 F 2d 911 (C A 2, 1971), which denied enforcement of 182 NLRB 348 to the extent it required Burns to honor the terms of the collective-bargaining agreement of its predecessor be based on the failure of a successor to honor in full the collective-bargaining contract of a predecessor, the Court's decision does not relieve a successor from its obligation to bargain over prospective changes "in a predecessor's agreement." We do not fully agree but we do interpret the law to be that a successor may not unilaterally institute changes in existing terms and conditions of employment, and that "existing terms" must refer to those of the predecessor in situations where substantially the entire employee complement is taken over by a successor without hiatus and with no change in operation. We would so characterize the situation here where the first S-H payroll showed 81 out of the 89 employees on the last Stevens' payroll. However, Stevens, the predecessor of S-H Food Service, Inc., had, prior to take-over by S-H Food, canceled the existing insurance policies as of the ces- sation of its operation. S-H Food was not a purchaser from Stevens and so far as the stipulated facts show had no part in cancellation of the insurance coverage. Under Burns, it had no duty to implement the contract provision of its predecessor requiring insurance, and at the time S-H began operations, the disputed insur- ance coverage was not an "existing" term or condition of employment. Thus S-H, the Respondent, contin- ued all substantive terms and conditions of employ- ment which existed at the time it started its opera- tion? S-H made no attempt to fix different terms of employment, so had no need to "initially consult with" the bargaining representative of the existing employee complement, within the meaning of Burns.' When the Union requested bargaining, Respondent complied promptly and, when it became apparent that insurance was the issue on which there was dis- agreement, it bargained to impasse. Accordingly, we find no conduct by Respondent which was violative of the Act, and we shall grant the Respondent's motion and dismiss the complaint in its entirety. ORDER The Board hereby vacates its said Decision and Order of June 26, 1970, as amended August 20, 1970, and dismisses the complaint in its entirety.4 2 Checkoff, being solely a contractual obligation, did not carry over as an existing term or condition of employment 3 N L R B v Burns International Security Services, Inc, 92 S Ct 1571, 1586 Board Member Penello is not participating because of his position as Regional Director for Region 5 at the time the complaint herein was issued and litigated 199 NLRB No. 4