Hijos de Ricardo Vela, Inc.

HIJOS DE RICARDO VELA, INC. 379 Hijos de Ricardo Vela, Inc. and Vela Distributing Corp. and Congreso de Uniones Industriales de Puerto Rico. Case 24-CA-3062 November 22, 1972 DECISION AND ORDER BY MEMBERS FANNING, KENNEDY, AND PENELLO On April 19, 1972, Administrative Law Judge' Harry R. Hinkes issued the attached Decision in this proceeding. Thereafter, Respondent filed exceptions and the General Counsel filed exceptions and a 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 authority in this proceeding to a three-member panel. The Board has considered the record and the attached Decision in light of the exceptions and brief and has decided to affirm the rulings, findings, and conclusions of the Administrative Law Judge and to adopt his recommended Order, as modified herein. The Administrative Law Judge found, and we agree, that Respondent violated Section 8(a)(5) and (1) of the Act by refusing to enter into bargaining negotiations with the newly certified Union and by thereafter subcontracting its radio and stereo repair work without affording the Union an opportunity to bargain over the subcontracting of said work. However, we do not agree with the Administrative Law Judge's conclusion that Respondent engaged in further 8(a)(5) and (1) violations by negotiating directly with employees Ramon Soto, Luis Negron, Miguel Perez, and William Diaz concerning the subcontracting of repair work to them and offering them inducements to leave its employment and become independent contractors. Such a conclusion would be inconsistent with the testimony credited by the Administrative Law Judge which shows that these employees decided on their own initiative, without inducement by Respondent, to leave Re- spondent's employ to go into business for themselves. While Respondent agreed to sell parts on credit to Diaz and to the company formed by Negron, Soto, and Perez, Respondent explains that selling parts on credit ". . . is part of our business . . . Because our business is to sell and we sell on credit "2 Respon- dent also sold shop testing equipment to the latter company because Soto and Negron were the only 1 The title of "Trial Examiner" was changed to "Administrative Law Judge" effective August 19, 1972. 2 The Administrative Law Judge found that "the purchase of parts and equipment by Soto, Negron and Perez and the acceptance of financial aid by Diaz were bona fide and voluntary " a If the sale of company repair equipment was "unprecedented, as our dissenting colleague asserts, it was only because, as Respondent explained, mechanics who repaired stereos and radios in the shop and, with their departure, Respondent had no further need for the equipment.3 Thereafter, it subcontracted stereo and radio repair work to this company consistent with its established practice of referring repair work to outside independent service companies. Considering all the circumstances attend- ing the departure of Soto, Luis Negron, Perez, and Diaz, we do not believe that a finding of a violation of the Act can be based thereon. Because of the departure of the repair mechanics, insufficient work was available for helpers and drivers Hector Rodriguez, Justo Rivera, Angel Negron, and Efrain Rivera. As a consequence, they were laid off by Respondent. In these circumstances, we find that no valid basis exists for requiring Respondent to reinstate those employees with back- pay as recommended by the Administrative Law Judge. Nor can we find that the outside stereo mechanic Carmen Rosado was terminated because he refused Respondent's offer, allegedly made to frustrate the Union, to become a subcontractor on July 15. Rosado was not terminated until August 15. By then Luis Negron and Soto, the only mechanics who performed the more complicated shop work on stereos and radios, had left; Rosado had never worked for Respondent as an inside repair man; and even assuming his qualifications for such work,4 there was no equipment left in the shop for its performance. Respondent decided to discontinue stereo and radio repair work which had dwindled to Rosado's outside service calls and, in consequence thereof, Rosado was terminated. The Administrative Law Judge himself has de- scribed the events leading to Rosado's termination as follows: "Thereafter [following the departure of Luis Negron and Soto], although Respondent continued its repair services on television, its radio and stereo repair services were discontinued, since the employ- ees doing such work at the shop, Soto and Negron, had left the employ of the Respondent and the Respondent's test equipment for such work was also gone." This is precisely our understanding of the record and we cannot find any logic in the conclu- sion that Rosado's termination was occasioned by his refusal to accept subcontracting work. Respondent's prior unfair labor practices are, of course, a relevant factor in this case, but the evidence which bears most directly upon Rosado's termination persuades us that this was the first occasion when the mechanics using the equipment had resigned and could not be replaced by qualified mechanics 4 Though testifying to having earned a diploma in transistors from the Lincoln Institute in Connecticut, Rosado further testified, "I have never spoken to him [Respondent's president, Vela] and he has never asked me" about this and that "I don't know if they were aware of it " 200 NLRB No. 43 380 DECISIONS OF NATIONAL LABOR RELATIONS BOARD his employment ended when, for the reasons given above, Respondent abandoned repair work on stereos and radios. However, having found that the Respondent has engaged in certain of the unfair labor practices alleged herein, we shall order that it cease and desist therefrom, and from like or related conduct, and that it take certain affirmative action which we find will effectuate the policies of the Act in the circumstances of this case. ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board hereby orders that Respondent, Hijos de Ricardo Vela, Inc., and Vela Distributing Corp., its officers, agents, successors and assigns, shall: 1. Cease and desist from: (a) Refusing to bargain collectively concerning rates of pay, wages, hours, and other terms and conditions of employment with Congreso de Uniones Industriales de Puerto Rico, upon request, as the exclusive bargaining representative of its employees in the following appropriate unit: All employees of Respondent including shop and field TV and radio technicians, the driver-helpers, and the shop stockroom and shop spare parts stockroom clerk and shop helper, but excluding all other employees, office clerical employees, sales personnel, guards and supervisors as defined in the Act. (b) Unilaterally eliminating a department in the shop and subcontracting work without prior notifica- tion to and bargaining with the Union. (c) In any like or related manner interfering with, restraining, or coercing its employees in the exercise of their right to self-organization, to form labor organizations, to join or assist the Union or any other labor organization, to bargain collectively through representatives of their own choosing for the purpose of collective bargaining or other mutual aid or protection or to refrain from any or all such activities. 2. Take the following affirmative action which the Board finds will effectuate the policies of the Act: (a) Upon request, bargain collectively with Congre- so de Uniones Industriales de Puerto Rico as the exclusive representative of the employees in the appropriate unit described above with respect to rates of pay, wages, hours of employment, and other terms and conditions of employment and, if an understanding is reached, embody such understand- ing in a signed agreement. (b) Post at its place of business, Bayamon, Puerto Rico, copies of the attached notice marked "Appen- dix" in both English and Spanish.5 Copies of said notice, on forms provided by the Regional Director for Region 24, after being duly signed by the Respondent's representative, shall be posted by Respondent immediately upon receipt thereof, and be maintained by it for 60 consecutive days thereaf- ter, in conspicuous places, including all places where notices to employees are customarily posted. Reason- able steps shall be taken by the Respondent to insure that said notices are not altered, defaced, or covered by any other material. (c) Notify the Regional Director for Region 24, in writing, within 20 days from the date of this Order, what steps the Respondent has taken to comply herewith. IT IS HEREBY FURTHER ORDERED that the complaint be, and it hereby is, dismissed insofar as it alleges violations of the Act not found herein. MEMBER FANNING, concurring in part and dissenting in part: My colleagues properly find in agreement with the Administrative Law Judge that Respondent violated Section 8(a)(5) and (1) of the Act by refusing to bargain with the Union and subcontracting its radio and stereo repair work without affording the Union an opportunity to bargain thereon prior to taking said unilateral action. Contrary to my colleagues, I would also find that Respondent engaged in further 8(a)(5) and (1) conduct and that the remedy should not be limited to Respondent's unlawful refusal to enter into negotiations with the Union. On February 5, 1971,6 a few months prior to the events involved in the instant case, Respondent discharged all 14 repair shop employees who struck to protest Respondent's failure to act on their complaints about working conditions. As indicated by the Administrative Law Judge, the Board in a recent proceeding7 found that the discharges contra- vened Section 8(a)(3) and (1) of the Act because Respondent desired to penalize the employees for their union membership and protected activity in engaging in a work stoppage. The Union won a representation election on May 4 and was certified for a unit composed of all employees of Respondent including shop and field radio and TV technicians, shop clerks and helpers, and driver-helpers. Despite the Union's bargaining request on May 7 and thereafter, Respondent refused 5 In the event that this Order is enforced by a Judgment of a United National Labor Relations Board" States Court of Appeals, the words in the notice reading "Posted by Order 6 Unless otherwise specified the dates herein refer to 1971. of the National Labor Relations Board" shall read "Posted pursuant to a 194 NLRB No. 62. Judgment of the United States Court of Appeals enforcing an Order of the HIJOS DE RICARDO VELA, INC. 381 to enter into negotiations for a contract. As stated above, it is the unanimous opinion of the panel that this conduct of Respondent violated Section 8(a)(5) and (1) of the Act. During the month of May, employees Ramon Soto and Luis Negron, the two radio and stereo shop employees, and Miguel Perez, a driver, discussed the possibility of quitting Respondent to form their own repair business. In early June, Negron talked to Respondent's president, Ricardo Vela, about leaving the Company and asked if he, Soto, and Perez, could buy the testing equipment they were using as employees of Respondent. Vela, who conceded that he had never before sold any of the Company's equipment, agreed to grant them credit for the purchase of the equipment valued at $225.8 In addition, Vela presented them with a set of tools. On June I1 or 12, Soto, Negron, and Perez tendered their resignations which were typed by a friend of Perez.9 Vela then assisted in moving the equipment to a nearby location occupied by the new company, which for about a month was a partner- ship and was incorporated early in July as Ramilu Electronic, Inc'0 The certificate of incorporation states that the "minimum amount of capital with which the corpo- ration shall commence operation is $1000." Yet, as noted above, Ramilu resorted to a credit arrange- ment with Respondent to obtain the basic equip- ment.li Although Soto, Negron, and Perez were ostensibly operating as a separate and independent business entity, Respondent nevertheless assumed the credit risk for all service work done by them by continuing to collect from individual customers and then paying Ramilu for the repair work. Prior to the departure of Soto and Negron on June 12, Rosado, who was Respondent's outside stereo mechanic, did whatever repair work was feasible at the customers' homes and those stereos that needed attention at the shop were brought in by Rosado for repair by Soto and Negron. Subsequent to June 12, Perez came to the shop to pick up the unrepaired stereos for repair by Soto and Negron at their new place of business. However, on July 15, Vela told Rosado that if he "wanted to work on his own, Vela would give [him] five services a day at $10 each," which would total as much as $300 a week. Vela also offered Rosado "economic aid" to enable him to operate his own business. When Rosado did not accept the offer from Vela, the latter discharged him on August 5. I agree with the Administrative Law Judge that the & Vela also extended credit to them in connection with the sale of replacement parts in the amount of approximately $700 9 According to the uncontradicted testimony of employee Camilo Rosado, Perez was Vela's "personal chauffeur." discharge was unlawful because it was occasioned by Rosado's refusal to become a subcontractor for Vela. My colleagues fail to take cognizance of the fact that, during the two months following the departure of Soto and Negron, the outside stereo work was still being performed by Rosado while Soto and Negron continued to handle the repair work they had previously performed at Respondent's shop. More- over, Vela's offer to subcontract' outside service calls to Rosado would have involved no change in the existing distribution of the radio and stereo work except for the proposed shift in Rosado's role from employee to independent contractor. In significant contrast to Rosado, who balked at Respondent's proposal that he leave Respondent's employ, employee William Diaz, an outside TV mechanic, "voluntarily" left when Respondent made it possible and attractive to do so by providing Diaz with the financial assistance to go into his own business. As a result of the departures of these key employees, which were "expedited" or forced by Respondent, the need for drivers diminished and Hector Rodriguez, Justo Rivera, Angel Negron, and Efrain Rivera were laid off. Although their termina- tion was not found by the Administrative Law Judge to be a violation of the Act, I agree with him that the loss of their jobs should be remedied because it stemmed from Respondent's unlawful conduct in derogation of the Union. It is clear from the foregoing that "Respondent, which demonstrated its antiunion bias by unlawfully discharging all of its employees on February 5, continued to engage in discriminatory conduct by unlawfully refusing to meet or bargain with the Union; by subcontracting work without prior notifi- cation to the Union and without affording the latter an opportunity to bargain over the elimination of the radio and stereo repair department; by expediting and assisting in the departure of Soto, Negron, Perez, and Diaz through the provision of financial and other assistance; and by discharging employee Rosado for not agreeing to become a subcontractor of Respondent. Although Soto, Perez, and Negron testified that they left Respondent's employ "volun- tarily," the credited testimony of Negron reveals that they did not decide to do so until they consulted Vela with whom they arranged for an unprecedented sale of equipment, financial assistance, and a continua- tion of their performance of repair work for 10 Perez was designated as resident agent in charge of Ranulu's principal office. " Soto, Negron, and Perez testified that they did not know how much their new business associates contributed to Ramilu. 382 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Respondent, with the latter retaining total responsi- bility for collection of service fees from customers.12 That Respondent was determined to "decimate" the Union's ranks is graphically shown by its harsh treatment of Rosado who proved to be less tractable than the other employees by resisting Vela's offer of financial aid and weekly earnings of $300 if he would do the very same work as before as an independent contractor rather than as an employee. As Respondent's entire course of conduct was clearly designed to weaken the Union and reduce the size of the unit for which it was certified, I am of the opinion that the only effective and meaningful remedy is to order the restoration of the status quo ante. Accordingly, I agree with the General Counsel that Respondent should be required "to return to its former mode of operation by reestablishing the radio and stereo repair services in the shop." 13 In this connection, I would require the reinstatement with backpay of Rosado as well as the four employees who were laid off by Respondent. I would also order Respondent to reinstate Soto, Negron, Perez, and Diaz who left Respondent only after they were given the requisite financial and other assistance which helped bring about the shrinkage of the unit that suited Respondent's discriminatory purpose of frus- trating the Union. 12 It is noteworthy that Vela's personal chauffeur furnished Soto and Negron with aid in preparing their resignations and as "Resident Agent" of Ramilu appeared to be the central figure in organizing the new company. 13 C H Sprague & Sons Co., 175 NLRB 378; 379, Larry Barns Chevrolet Company, 174 NLRB 818, 822. APPENDIX NOTICE TO EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government WE WILL NOT refuse to bargain collectively concerning rates of pay, wages, hours, and other terms and conditions of employment, with Con- greso de Unions Industriales de Puerto Rico as the exclusive representative of the employees in the bargaining unit described below. WE WILL NOT unilaterally eliminate a depart- ment in the shop and subcontract work without prior notification to and bargaining with the Union. WE WILL NOT in any like or related manner interfere with, restrain, or coerce our employees in the exercise of their rights to self-organization, to bargain collectively through representatives of their own choosing for the purposes of collective bargaining or other mutual aid or protection, or to refrain from any or all such activities. WE WILL, upon request, bargain collectively with the above-named Union as the exclusive representative of all employees in the bargaining unit described below, with respect to rates of pay, wages, hours, and other terms and conditions of employment and, if an understanding is reached, embody such understanding in a signed agree- ment. The bargaining unit is: All employees including shop and field TV and radio technicians, driver-helpers, shop stockroom and shop spare parts stockroom clerk and shop helper, but excluding all other employees, office clerical employees, sales personnel , guards, and supervisors as defined in the Act. HIJOS DE RICARDO VELA, INC. AND VELA DISTRIBUTING CORP. (Employer) Dated By (Representative) (Title) This is an official notice and must not be defaced by anyone. 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 compli- ance with its provisions may be directed to the Board's Office, Pan Am Building, Seventh Floor P. 0. Box UU, 255 Ponce de Leon Avenue, Hato Rey, Puerto Rico 00919, Telephone 809-765-0404. TRIAL EXAMINER'S DECISION STATEMENT OF THE CASE HARRY R. HINKES, Trial Examiner: On August 10, 1971, Congreso de Uniones Industriales de Puerto Rico, herein- after referred to as the Union, filed a charge against Hijos de Ricardo Vela, Inc., and Vela Distributing Corp., hereinafter referred to as the Respondent or Employer, charging the commission of unfair labor practices, which charge was served on the Respondent on the same date. An amended charge was filed by the Union on September 24, 1971, and served on the Respondent on the same date. Pursuant to these charges, a complaint was issued by the Acting Regional Director for Region 24 on October 6, 1971, alleging that the Respondent , in violation of Section 8(a)(1) and (5) of the Act, had refused the Union's request to bargain despite its certification by said Regional Director as the exclusive collective -bargaining representa- tive of the employees in the appropriate unit and had unilaterally and without prior notice to the Union subcontracted some of its work , inducing some of the unit employees to perform services for the Respondent as mdependent contractors, and had terminated some of its HIJOS DE RICARDO VELA, INC. 383 unit employees either as a result of the contracting out of its repair services to said independent contractors or as a result of the employees' refusal to work as an independent contractor. By answer duly filed Respondent denied the complaint's allegation that Hijos de Ricardo Vela, Inc., and Vela Distributing Corp., constitute a single employer. With respect to the complaint's allegation that the employees of the two companies constitute an appropriate unit for the purpose of collective bargaining, Respondent's answer denied all references to Vela Distributing Corp. Finally, Respondent by its answer, while admitting the certification of the Union as the representative of the appropriate unit for the purposes of collective bargaining with the Respon- dent, denied refusing to bargain with the Union or instigating the subcontracting of some of its work to unit employees whom it induced to leave Respondent's employ and become independent contractors. By way of affirma- tive defenses, Respondent alleged that it had subcontracted its services for many years and that its termination of unit employees was a result of their inability to do the work assigned or 'lack of work occasioned by the departure of some of its employees for whom the terminated employees acted as helpers. By a subsequent amended answer, Respondent denied the legality of the certification issued by the Regional Director, alleging said certification to be void and illegal. A hearing was held before me in Hato Rey, Puerto Rico, on November, 17, and 19, 1971, and January 25, 26, and 27, 1972, at which all parties were represented and were afforded an opportunity to examine witnesses and adduce relevant evidence. Briefs have been received from counsel for the General Counsel and counsel for the Respondent and have been given careful consideration. Upon the entire record including' my evaluation of the demeanor of the witnesses as they testified, I make the following: FINDINGS OF FACT A. Jurisdiction The complaint alleges, Respondent's answer admits, and I find that Hijos de Ricardo Vela, Inc., is a corporation of the Commonwealth of Puerto Rico, engaged in operating a retail department store at Bayamon, Puerto Rico. During the year 1970, it purchased and had shipped to its place of business in Bayamon, Puerto Rico, from points located outside of Puerto Rico, household goods, electrical appliances, and other merchandise valued in excess of $50,000. During the same period, it had a gross income of over $500,000. The complaint further alleges but Respondent's answer denies that: Vela Distributing Corp., is a corporate affiliate of Hijos de Ricardo Vela, Inc It is the exclusive distributor of Zenith Company radio and television products on the island of Puerto Rico. It also acts as the radio and TV repair servicing arm of Hijos de Ricardo Vela, Inc. During the year 1970 it purchased and had shipped to its place of business in Bayamon, P.R. from points located outside of Puerto Rico radios, TV sets, and other electronic products valued at in excess of $50,000. Hijos de Ricardo Vela, Inc. and Vela Distributing Corp. operate as a single integrated family type enterprise with common operational and labor rela- tions controls. For the purposes of this proceeding said corporations constitute a single employer of the employees involved herein. Respondent is now and has been at all times material herein an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act. In a proceeding involving the same parties, Case 24-CA- 2982, the Trial Examiner in a decision dated August 19, 1971, concluded that: ... the two corporations are, with respect to the employees here involved, highly integrated operations with a common labor relations policy, that they constitute a single employer for the purposes of this proceeding, that the respondent is an employer en- gaged in commerce within the meaning of Section 2(6) and (7) of the Act, and that it will effectuate the purposes of the Act to assert jurisdiction herein. [Citations omitted.] By decision dated November 30, 1971, the National Labor Relations Board affirmed the Trial Examiner's rulings, findings, and conclusions (194 NLRB No. 62). The decision of the Board involving the same parties to this proceeding and the same period of time is conclusive and binding upon me. Whether or not it is res judicata to the Board's reconsideration of the issue need not be decided in this decision. In that connection, however, I note that the matter was litigated in the related representation case reported in Case 24-RC-4290 and adjudicated therein by the Regional Director in his Decision and Direction of Election dated March 25, 1971. The request for review by the employer was denied by the Board. Moreover, the documentary evidence submitted by counsel for the General Counsel in this proceeding corroborates the single employer relationship of the two corporations. I refer to the General Counsel's Exhibits 11 and 12 where letterheads of both corporations were used in submitting Excelsior lists. I conclude, therefore, that the two corporations are highly integrated operations with a common labor relations policy, that they constitute a single employer for the purposes of this proceeding, that the Respondent is an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act and that it will effectuate the purposes of the Act to assert jurisdiction herein. The complaint alleges, Respondent's answer admits and I find that the Union is and at all times material herein has been a labor organization within the meaning of Section 2(5) of the Act. B. Refusal To Bargain In the representation case, the Union was certified on May 12, 1971, after having won the election which was held on May 4, 1971. On May 18, 1971, the Union wrote Leroy Vela, president of Vela Distributing Corp., asking to meet to commence negotiations on May 27, 1971.On May 26, however, counsel for Respondent advised the Union, "In view of certain conflicts of fact and law in the 384 DECISIONS OF NATIONAL LABOR RELATIONS BOARD representation case, we are unable at present to enter into negotiations with the organization you represent." No representative for the Respondent appeared at the request- ed meeting and no proposed contract was submitted by the Union prior to or subsequent to the scheduled meeting. On or about August 5, 1971, the Union once again requested a meeting to commence negotiations . The counsel for Respondent replied, "Due to reasons set forth in our correspondence we cannot attend meeting," referring, apparently, to his earlier communication of May 26. Counsel for the Respondent asserts that the "conflicts of fact and law" refer to the representation proceeding wherein the Regional Director "illegally held both Respon- dents herein constituted a `single employer'; and included nonsupervisory employees with a supervisor in the appro- priate unit." He argues that "by not allowing an attack on the representation proceeding the Trial Examiner effective- ly bars the Board from considering the merits of Respon- dent's defense in a controversial proceeding ." I do not agree. Counsel for Respondent misconceives the role of the Trial Examiner. I cannot bar the Board from doing anything. I am subordinate to the Board and am bound by its rulings. Here the Board has ruled that the two corporations constitute a single employer. I cannot depart from that ruling as explained earlier. Similarly, the Board in adopting the decision of the Trial Examiner at 194 NLRB No. 62 found that the alleged supervisor in the appropriate unit was not a supervisor but an employee within the meaning of the Act, and I am bound by that determination as well. Respondent was given every opportunity to contest these allegations in the proceeding before that Trial Examiner. There is no justification for permitting Respondent a second "bite at the apple," but, even if there were, I am not the one to allow it. The Board may, if it wishes, reconsider its earlier ruling. I am bound by it. Accordingly, I conclude that the Respondent by failing and refusing to commence negotiations with the Union after repeated requests violated Section 8(a)(5) of the Act which obligates it to bargain collectively with the repre- sentative of his employees. C. The Subcontracting In May 1971, Ramon Soto, Miguel Perez, and Luis Negron discussed the possibility of leaving the employ of the Respondent to form their own electronic repair business. According to both Soto and Perez, these plans were not discussed with the Respondent's officials. According to Luis Negron, however, whose testimony I credit, he talked to Leroy Vela about leaving the Company and asked Vela if he, Soto, and Perez could buy the equipment they used while working at the Respondent. About a week after Negron's inquiry of Vela, or about June 11 or 12, 1971, the three employees left the employ of the Respondent and opened up their own electronic repair shop, calling it Spark Electronic Company. The name of the Company was subsequently changed to Ramilu Electronic, Inc., said name being taken from the first two letters of the first names of the three incorporaters, Ramon Soto, Miguel Perez, and Luis Negron. Contemporaneous with the departure of these three employees from the employ of the Company, Respondent sold some $900 worth of testing equipment and parts to the three employees, extending credit for the purchase . The goods thus sold were moved from the premises of the Respondent to the premises of the new company. Thereafter, although Respondent continued its repair services on television, its radio and stereo repair services were discontinued, since the employees doing such work at the shop, Soto and Negron, had left the employ of the Respondent and the Respondent's test equipment for such work was also gone. Leroy Vela testified that his test equipment for radios and stereos was sold by him inasmuch as the employees using that equipment, Soto and Negron, had resigned. He also admitted that he sold the equipment and parts to them on credit. Further, he testified that he sent work to these employees after they left the employ of the Respondent, but that this practice was like the Company's established practice of referring some of its work to outside independ- ent service companies. Soto testified that when the new company did work referred to them by the Respondent it was paid by the Respondent and not by the customer. Respondent introduced the testimony of several independ- ent service repairmen whom it used for referral work. One, Daniel Blanco, testified that when he got a call from the Respondent to do some service work he was paid by the Respondent on work that was still covered by the warranty. On nonwarranty work, however, he collected directly from the customer and not from the Respondent. Similarly, independent servicemen Nazario and Irizarry testified to the same payment practice . It should be noted that this practice was not the same as the practice used with the three employees who left the Respondent's employ in June. For them, payment came from the Respondent whether or not the set was under warranty. Thus, Respondent assumed the credit risk for all service work done by these former employees. I note that Ramon Batista, an employee of the Respondent , testified that these three former employees kept any payments they received. He did not deny, however, that the independent contrac- tors, Blanco, Nazario, and Irizarry, did their own collec- tions whereas the Respondent made collections which it turned over to the three former employees for work they did. In sum, therefore, I find that Respondent expedited and assisted in the departure of Soto, Negron , and Perez by selling them parts and equipment on credit and by undertaking the credit risk for the work they performed on service calls referred to them, unlike its practice with other independent contractors to whom it did not subcontract all of its radio and stereo work nor sell used equipment on credit nor assume the credit risk on work referred by the Respondent to be done by them. Anibal Rivera was employed by the Respondent as an outside TV repairman, but quit on June 23, 1971, because the three former employees who had formed the Ramilu Electronic Company offered him a job. Respondent had employed one Justo Rivera as Anibal's driver. Justo Rivera also left the Respondent's employ on June 23, when Anibal left the Respondent's employ. According to the uncontrad- icted testimony of Leroy Vela, Anibal voluntarily quit and I so find. HIJOS DE RICARDO VELA, INC. 385 William Diaz was employed by the Respondent as an outside TV repairman, using Hector Rodriguez as his driver. Diaz spoke to Leroy Vela about resigning to work on his own. He quit on July 7, 1971, after Vela had extended him several hundred dollars of credit for parts and had arranged for Diaz' use of a company truck by assuming the monthly payments due thereon. Diaz returned the truck to the Company after 2 months of use at which time he understood that the Respondent' s contract on the truck was terminating. With the departure of Diaz, the services of driver Rodriguez became unnecessary and Respondent terminated his employment on July 21. Angel Negron, employed as a driver by the Respondent, assisted outside TV mechanics Torres and Diaz. Angel Negron also left the employ of the Respondent on July 21. Leroy Vela testified that Angel Negron was a substitute driver when there were five or six mechanics "on the street." With the departure of outside mechanics Anibal Rivera and William Diaz as well as Luis Negron and Ramon Soto, whose activities also involved Angel Ne- gron's services, there was insufficient work left for Angel Negron. The record, however, is unclear as to whether Angel Negron voluntarily left the employ of the Respon- dent or whether he was laid off by reason of lack of work. The complaint alleges that Angel Negron was laid off, but that allegation of the complaint has been denied in the Respondent's answer. The testimony of Angel Negron merely refers to the termination of his employment without specifying whether he was laid off or whether he quit. At one point, however, he testified that another employee, Hector Rodriguez, "had his employment terminated" on the same date. This passing reference to what might be deemed to be an involuntary termination, however, might be entitled to little weight were it not for the language of the brief filed by counsel for the Respondent. In it he states: Upon Anibal Rivera's resignation there is no work for his driver and consequently he [Justo] is terminated [sic] from employment. The same situation happens with Hector Luis Rodriguez and Angel Rafael Negron (back up driver) whose employment is terminated upon the resignation of Mr. William Diaz. I conclude, therefore, Angel Negron as well as Justo Rivera and Hector Rodriguez were laid off when, upon the resignations of mechanics Anibal Rivera, Luis Negron, Ramon Soto, and William Diaz, their services were no longer needed. Efrain Rivera was employed by the Respondent. His work involved the receiving of television sets and radios as they were delivered to the Respondent's shop, recording the reception of television sets in a logbook and delivering the work to the appropriate repairman. Efrain testified that in mid&June on a Monday morning when he arrived at work he found the bench on which the radio and stereo work was tested and fixed to be bare of testing equipment and the two radio repairmen, Soto and Luis Negron, absent, although he had seen Soto on the job the previous Friday, Thereafter, according to Efrain, no stereos and radios were repaired at Respondent's shop, but were delivered to Ramilu where Efrain also saw Soto. According to Efrain, such sets had never been sent out unrepaired by the Respondent before. On September 29, Leroy Vela called Efrain to the office, gave him his check and told him that he was laid off because there was no work for him. The lack of work was apparently true, inasmuch as Ramon Soto and Luis Negron had left the employ of the Respondent in June and only one other inside mechanic (Nazario), who worked on TV's, remained to require the work of Efrain in logging and delivering. Summarizing, I find that prior to the certification of the Union, Respondent employed three inside mechanics, Soto, Luis Negron, and Nazario. For work on sets that were not brought into the shop Respondent employed Anibal Rivera, William Diaz, Cruz, Tones, and Camilo Rosado. As drivers, Respondent employed Angel Negron, Hector Rodriguez, Miguel Perez, and Justo Rivera. In addition, Respondent employed Efrain Rivera as a receiving clerk inside the shop. After the Union was certified, Respondent sold its radio testing equipment as well as many parts to Ramon Soto , Luis Negron, and Miguel Perez, who quit to form a company of their own. Thereafter, all the radio and stereo work received by the Respondent at its shop was sent to this new firm, who did the work and collected from the Respondent. The only inside mechanic left in the employ of the Respondent was Nazario, who worked on TV's. In addition, outside mechanics Anibal Rivera and William Diaz left the Respondent's employ in June and July. These men were TV mechanics and, although I have found that Anibal Rivera left voluntarily, there being no evidence of any inducements for his leaving being offered by the Respon- dent, William Diaz, who left voluntarily, did so only after Respondent had extended him several hundred dollars of credit and had arranged the use of a company truck for him. With the departure of mechanics Soto , Negron,,Diaz, and Anibal Rivera, leaving only Nazario, Cruz, Rosado, and Torres, Respondent's need for drivers diminished. Accordingly, Respondent laid off Hector Rodriguez, Justo Rivera, and Angel Negron . In addition, Respondent laid off his receiving clerk, Efrain Rivera. D. The Discharge of Camilo Rosado The complaint alleges that Camilo Rosado, a unit employee, was discharged by the Respondent when he refused to leave the Respondent's employ to work on his own or as an employee of Ramilu, the company that had been formed by the three former employees of the Respondent. Rosado worked for the Respondent prior to 1967, Between 1967 and 1969, he was employed elsewhere as a stereo mechanic. In 1969, he was offered reemploy- ment by Respondent when Ramon Batista, an assistant to Leroy Vela, called him. Rosada accepted and returned to work for Respondent as an outside stereo mechanic in 1969. He was Respondent's only outside stereo mechanic and drove his own truck. Rosado testified that on Monday, June 14, Soto and Luis Negron did not show up for work at the shop and the testing equipment for the repair of stereos was missing. He had seen the testing equipment at the shop, as well as Soto and Negron, the previous week. Thereafter, he saw Miguel Perez visit the Respondent's shop to get equipment there and saw the Respondent's testing equipment at the Ramilu shop. 386 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Rosado testified that the stereos that he could not fix at the customers' homes would be brought in by him to the Respondent's shop to be repaired by the inside mechanics, Ramon Soto or Luis Negron. With the departure of these two men, however, stereos that were brought in by Rosado because he could not fix them outside were turned over to Miguel Perez on the following day. Such stereos would be repaired at Spark (later Ramilu) and returned to the Respondent with an invoice from Spark. They would then be delivered to the customer by Rosado. Indeed, all of the sets returned by Rosado to the customer from the Respondent's shop after June 14 bore an invoice from Spark. Rosado further testified that on July 15, Leroy Vela told him that if he wanted to work on his own, Vela would give him five services a day at $10 each, which would give Rosado earnings of up to $300 a week. Vela also offered Rosado "economic aid." Rosado made no response. On August 5, Leroy Vela told Rosado that he had decided to close up the stereophonic shop, gave Rosado severance pay, and laid him off. According to Rosado, there had never been any complaint by management concerning his work or his experience. Indeed, early in 1971 his weekly salary of $62 was raised to $72. Leroy Vela admitted discharging Rosado in August 1971. He testified, however, that Rosado was discharged because he was not able to repair sets in the shop and the work that he had picked up for repairs had been repaired by the two inside stereo mechanics, Negron and Soto, who had left the employ of the Respondent. Vela admitted that he never tried Rosado in the shop, but claimed that Rosado had told him he could not repair transistors. Indeed, Leroy Vela testified that Rosado merely changed the needle on a stereo or changed the knob. This claim of Rosado's incompetence, however, is questionable. When Rosado was hired by the Respondent in 1969, he had been working at a furniture shop doing radio repair. Vela did not explain why Rosado was hired that time if, indeed, Rosado was not competent, except to say that Rosado was hired "out of sympathy." His only comment was that Ramon Batista, his assistant, had no authority to ask Rosado to come to work. Batista, himself, when testifying, did not contradict Rosado's testimony to the effect that he, Batista, had asked Rosado to come back to work in 1969 after consulting with Leroy Vela, nor did Batista corrobo- rate Vela's testimony to the effect that he had no authority to recall Rosado. Vela also explained that the $10 wage increase given Rosado in early 1971 came about because Rosado, who had had a driver for his outside stereo repair work, lost that driver and undertook to do the driving himself. When Rosado refused to do both the driving and the repair work for the same salary, Vela gave him the pay increase and I credit this version of the event. With respect to Vela's charge of Rosado's incompetence, I note, however, that Rosado denied Vela asking him about his qualifications. Rosado's claim of competence in the field of stereo repair is further strengthened by his testimony of having earned a diploma in transistors from the Lincoln Institute in Connecticut. Rosado further testified, credibly in my opinion, that the reason he brought the sets into the shop for repair was because the necessary work would take too much time at the home of the customers or because the complaint involved intermit- tent irregularities in the performance of the set. After the inside stereo mechanics, Soto and Negron, left the employ of the Respondent and the testing equipment they used was removed and sent to Ramilu, Rosado, lacking the necessary equipment, could not make any stereo repairs at the shop. Although TV mechanic Nazario had some equipment at the shop, some of which Rosado could have used on the stereos, he was unable to use that equipment because Nazario was always using it. In short, although counsel for the Respondent argues that Rosado's discharge was necessary in view of his limited knowledge and training, I credit Rosado's testimo- ny to the effect that he was able to make such repairs and made such repairs and that his inability to do such work at the Respondent's shop when Soto and Negron left was due to the lack of testing equipment which had been sold to the departing employees. On the contrary , I find that his discharge was occasioned by his refusal to accept subcon- tracting work from Leroy Vela as Soto, Negron, and Perez had, and despite Vela's assurances of a large number of service calls from Vela. F. Concluding Findings Although Respondent had established a practice of referring some of its work to independent contractors, such referrals were made by the Respondent without any assumption by the Respondent of the credit risk involved. Moreover, these independent contractors made their own charges for their work and collected payment from the customers themselves . Almost immediately after the Union had been certified for the employees of the Respondent, however, Respondent induced several of its employees to leave the employ of the Respondent, extending them credit for parts and equipment they needed and arranging for the referral of repair work brought into Respondent's shop to these new contractors, assuming the responsibility for collection of the charges for work done by them and assuming all credit asks. Similarly, Respondent encour- aged and induced William Diaz to leave the employ by offering him certain financial assistance to do so. With the departure of these mechanics and the resignation of another mechanic [Anibal Rivera ], Respondent found its need for helpers or drivers diminished . Accordingly, it laid off a number of its drivers and helpers. Respondent finally ceased doing its own radio repair work when in August 1971 it discharged Camilo Rosado for refusing to become an independent subcontractor on such work . Bearing in mind the union animus of the Respondent as found in the earlier proceeding (194 NLRB No. 62) where Respondent discharged employees for engaging in union activities, I cannot help but conclude that Respondent's subcontract- ing action here was designed to decimate the ranks of the Union and emasculate its strength. CONCLUSIONS OF LAW 1. Hijos de Ricardo Vela, Inc., and Vela Distributing Corp., for the purposes of this proceeding, constitute a HIJOS DE RICARDO VELA, INC. 387 single employer, engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 2. Congreso de Uniones Industriales de Puerto Rico is a labor organization with the meaning of Section 2(5) of the Act. 3. By refusing to enter into bargaining negotiations with the Union in May and August 1971, after the Union had been certified by the Board, Respondent violated Section 8(a)(5) and (1) of the Act. 4. By negotiating directly with its employees, Ramon Soto, Luis Negron, and Miguel Perez, concerning the subcontracting of repair work to them and offering them inducements for leaving the employ of the Respondent to become independent contractors, Respondent violated Section 8(a)(5) of the Act. Its similar negotiations with employee William Diaz, together with offers of financial aid, were also in violation of Section 8(a)(5) and (1) of the Act. 5. By discharging employee Camilo Rosado because he refused to negotiate directly with the Respondent to accept subcontracted work Respondent violated Section 8(a)(5) and (1) of the Act. 6. Respondent's layoff of employees Hector Rodriguez, Justo Rivera, Angel Negron, and Efrain Rivera was for lack of work. Such lack of work, however, was brought about by Respondent's violations of Section 8(a)(5) of the Act when it negotiated with individual employees to subcontract some of its work and subcontracted some of its work, particularly its radio repair work, to such employees. The layoff of the four individuals noted above, therefore, was a direct consequence of Respondent's violation of Section 8(a)(5) of the Act as well. THE REMEDY Having found that the Respondent has engaged in certain unfair labor practices in violation of Section 8(a)(1) and (5) of the Act, I shall recommend that Respondent cease and desist therefrom and from in any other manner infringing upon its employees' Section 7 rights, and that it take certain affirmative action designed to effectuate the policies of the Act. Respondent's negotiations and arrangements for the subcontracting of some of its repair work was conducted, not through the certified union, but with the individual employees themselves. An employer, however, is obligated to bargain with a union when he contemplates making a unilateral decision about a mandatory subject of bargain- ing.' Terms and conditions of employment are a mandato- ry subject of bargaining and the contracting out of work performed by members of the bargaining unit might be appropriately called a condition of employment. The Board has explained this duty in Westinghouse Electric Corp., 150 NLRB 1574: An Employer's duty to give a union prior notice and an opportunity to bargain normally arises where the employer proposes to take action which will effect some change in existing employment terms or condi- tions within the range of mandatory bargaining. In the ' Fibreboard Paper Products Corp., v. N L R B, 379 U S. 203. 2 Ozark Trailers, Inc, 161 NLRB 561. Fibreboard line of cases, where the Board has found unilateral contracting out of unit work to be violative of Section 8(a)(5) and (1), it has invariably appeared that the contracting out involved a departure from previously established operating practices, effected a change in conditions of employment , or resulted in a significant impairment of job tenure, employment security, or reasonably anticipated work opportunities for those in the bargaining unit. An employer may not evade this duty by concealing his intention from the Union and later asserting that the Union failed to request information with respect to the decision.2 Whether the employer would have to bargain about the decision to subcontract as well as the effect of the subcontracting may have been in doubt heretofore. However, in the Board's decision in Summit Tooling Co., 195 NLRB No. 91, where the Board found that the Respondent had closed down certain of its operations without bargaining with the Union or notifying the Union, the Respondent was found to have violated Section 8(a)(5) of the Act in failing to give notice to the Union. The Respondent, however, was not compelled to bargain with the Union concerning the decision to close, the Board stating that "Practical considerations dictate against our ordering the Respondent to reestablish its Summit opera- tions." Even were I to find, therefore, that Vela had shut down its radio repair business , it would appear that it was under no obligation to bargain with the Union concerning the decision to close those operations , but only to notify the Union. Actually, however, I find that Respondent's action here did not constitute a partial shutdown of its business. Although it discontinued its repairing of radios at the shop, Respondent continued to accept such business merely to send the work out to its subcontractors. In essence, therefore, it was still in the same radio repair business as far as the public was concerned. Its actions, therefore, were clearly that of a subcontract rather than a partial closing. As a subcontracting decision , precedents dictate that the Respondent was under an obligation to bargain about the decision itself and its effect on the unit employees. In the Westinghouse decision, supra, the Board found that the Company had not violated the Act in its subcontracting decision. It noted, however, that the decision to subcontract was: [M]otivated solely by economic considerations; that it comported with the traditional methods by which the the Respondent conducted its business operations; that it did not during the period here in question vary significantly in kind or degree from what had been customary under past established practice ; that it had no demonstrable adverse impact on employees of the unit; and that the Union had the opportunity to bargain about changes in existing subcontracting practices at general negotiating meetings. Here none of these considerations were present . The record is bare of any suggestion that Respondent's decision to subcontract was motivated by economic considerations. The Respondent's decision to subcontract to its former employees was totally unlike its subcontracting arrange- 388 DECISIONS OF NATIONAL LABOR RELATIONS BOARD ments with other independent service companies. The subcontracting decision did adversely affect a number of the employees resulting in their loss of jobs and, finally, the Union had no opportunity to bargain about the changes in the subcontracting practices at negotiating meetings. The Board's Westinghouse decision is not dispositive of this case. The usual remedy applied to an employer who has violated his statutory duty to bargain about a decision to subcontract unit work is restoration of the status quo ante. This remedy will be applied even where the subcontracting decision was made without union animus.3 Here, however, Respondent has offered no explanation for its decision to subcontract. It may not be unreasonable to infer that its decision, made shortly after the Union had been certified as the bargaining agent for the employees, was motivated by the employer's unhappiness with the result. Moreover, Respondent's union animus cannot be overlooked in view of the decision of the Trial Examiner in the earlier unfair labor practice proceeding (194 NLRB No. 62) where it was found that the Respondent had discharged employees for engaging in union activities. It does not follow, however, that an order requiring Respondent to resume his radio repair business as heretofore would be warranted. In Gladwin Industries, Inc., 183 NLRB No. 36, the Board affirmed the rulings of the Trial Examiner, who found: The transaction between Respondent and Evans [Respondent's employee turned subcontractor] consti- tuted a bona fide sale with legal title to the machines vesting in Evans. Following the purchase, which was entirely voluntary on Evan's part and which was prompted by economic considerations, he transported the machines to his home and became a private enterpreneur. I believe it would be unduly punitive to Evans, by an affirmative order such as the General Counsel suggests, to wrest these devices from Evans' control solely to correct Respondent's wrongdoing. I shall, therefore, not recommend that the engraving machines be returned to Respondent, nor shall I otherwise forthwith order that the engraving depart- ment be reestablished. However, I have found that the elimination of this department was accomplished unilaterally by Respondent and that the Union had a statutory right to prior consultation. Accordingly, I shall recommend that Respondent be ordered to bargain with the Union concerning the revitalization of the engraving department to refrain from any such unilateral action in the future. Here, too, the purchase of parts and equipment by Soto, Negron, and Perez and the acceptance of financial aid by Diaz were bona fide and voluntary. I shall, therefore, not order the return of such parts and equipment to the Respondent nor order the reestablishment of its radio repair business. It should be sufficient to order Respondent to bargain with the Union concerning the revitalization of its radio repair business and to refrain from any such unilateral action in the future. However, effectuation of the policies of the Act does require that Respondent be directed now to remedy the violation found by offering to bargain not only about the effects on the employees of the changes made in the summer of 1971, but also about the restoration of the status quo ante. It must be presumed that the laid-off helpers and drivers would have continued as helpers and drivers at least until Respondent had fulfilled its bargaining obliga- tion by negotiating to a bona fide impasse . Effectuation of the Act's policies, therefore, further requires that the employees whose statutory rights were violated by reason of Respondent's unlawful unilateral action and who have suffered loss in consequence thereof, be reimbursed for such losses until such time as Respondent remedies its violations. Accordingly, I shall order that the Respondent make whole the employees who worked as drivers or clerks for any loss of pay they may have suffered as a result of Respondent's unfair labor practices. The liability for such backpay shall cease upon the occurrence of any of the following conditions: (1) reaching mutual agreement with the Union relating to the subject which Respondent is herein required to bargain about; (2) bargaining to a bona fide impasse; (3) the failure of the Union to commence negotiations within 5 days of the receipt of Respondent's notice of its desire to bargain with the Union; or (4) the failure of the Union to bargain thereafter in good faith. Of course, if Respondent decides to resume the status quo ante with the employees once again doing radio repair work, its liability will cease as of that date. Backpay shall be based upon the earnings which affected employees would normally have received absent the changes, less any net interim earnings and shall be computed on a quarterly basis with interest thereon.4 As respects the discharge of Camilo Rosado, I have found that his discharge was motivated by Respondent's failure to have him agree to subcontracting work. In Shamrock Dairy, Inc., 124 NLRB 494, a similar situation occurred, six drivers refusing to deal with the Respondent on an individual basis and being discharged by the employer for that reason. Board Members Jenkins and Fanning favored the reinstatement of such employees with backpay as a remedy for the 8(a)(5) violation of the employer, even though the Respondent may not have violated Section 8(a)(3), finding further that the drivers lost their jobs as a direct consequence of the Respondent's failure confer with the Union. I shall, accordingly, order Respondent to offer Rosado immediate reinstatement to his former job, or equivalent, and make him whole for any losses sustained by him as a result of the Respondent's unlawful discharge, in the same manner as set forth earlier for the helpers. [Recommended Order omitted from publication.] 3 Fibreboard Paper Products, supra 4 Unit Drop Forge Division, 171 NLRB 600.