Spitzer Akron, Inc.

SPITZER AKRON, INC. Spitzer Akron, Inc. and Auto Mechanics Local 1363, District 54 of the International Association of Machinists and Aerospace Workers, AFL-CIO. Case 8-CA-6177 January 25, 1974 SUPPLEMENTAL DECISION AND ORDER BY MEMBERS FANNING, JENKINS, AND KENNEDY On January 26, 1972, the National Labor Relations Board issued its Decision and Order' in the above- entitled proceeding, finding that Respondent had engaged in and was engaging in unfair labor practices in violation of Section 8(a)(5) and (1) of the Act and ordering that it cease and desist therefrom and, upon request, bargain collectively with the Auto Mechanics Local 1363, District 54 of the Internation- al Association of Machinists and Aerospace Work- ers, AFL-CIO, herein referred to as the Union, as the exclusive representative of all employees in an appropriate unit. The Board also ordered Respon- dent, upon request, to cancel any changes of benefits or working conditions which it made on September 4, 1970, or later, which may have resulted in financial or other detriment to its employees. Finally, the Board ordered the Respondent to offer reinstatement to those strikers to whom it had not heretofore made an unconditional offer of reinstatement, immediate and full reinstatement to their former or substantially equivalent jobs, and to make whole all employees who went on strike on September 22, 1970, for any loss of earnings they may have suffered from the time of their unconditional offer to return to work to the date that the Respondent offered them reinstate- ment. In light of the Supreme Court's opinion in N.L.R.B. v. Burns International Security Services, Inc., 406 U.S. 272, and N.L.R.B. v. Wayne Convalescence Center, 465 F.2d 1039 (C.A. 6, 1972) (No. 72-1081), enforcement of the Board's Order was granted on November 27, 1972, by the United States Court of Appeals for the Sixth Circuit. Subsequently, Respon- dent petitioned the Supreme Court of the United States for certiorari, and on May 14, 1973, the Supreme Court granted Respondent's motion, vacat- ed the court of appeals' judgment, and remanded the proceeding to that court with instructions to remand the case to the Board for such further proceedings as may be appropriate, in the light of Burns Internation- al Security Services, Inc. v. N.L.R.B., 406 U.S. 272 (1972); FTC v. Sperry & Hutchinson Co., 405 U.S. 233, 245-250 (1972); SEC v. Chenery Corp., 318 U.S. 1 195 NLRB 114. 701 80, 87-88 (1943); Bachrodt Chevrolet Co. v. N. L. R. B., 411 U.S. 912 (1973); Denham v.N.L.R.B., 411 U.S. 945 (1973). On August 15, 1973, the United States Court of Appeals issued an order which remanded the case to the Board. 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. In its original decision in this case, the Board found that Respondent had violated Section 8(a)(5) and (1) of the Act by making unilateral changes of wages and working conditions of employees in the appro- priate unit on September 4, 1970, and by thereafter failing and refusing on request, to recognize, meet, and bargain with the Union with respect to rates of pay, wages, hours of employment, and other terms and conditions of employment of employees in the unit. In the light of Burns, the Board adheres to its findings that Respondent violated Section 8(a)(5) by making unilateral changes of wages and working conditions on September 4, 1970, and by refusing on request to recognize, meet, and bargain with the Union, as set forth hereinafter. The Respondent is engaged in the business of retail and wholesale selling and servicing of automobiles, parts, and accessories. In 1964, Local 762 of the Machinists, a predecessor local of the Charging Union, entered into a multiem- ployer agreement with certain automobile dealers including Arnett Chrysler-Plymouth, a predecessor of East Town Chrysler-Plymouth. Respondent there- after leased the premises that were occupied by Arnett Chrysler-Plymouth and East Town Chrysler- Plymouth. The collective-bargaining agreement was to expire in 1967 but was extended to August 31, 1970. East Town Chrysler-Plymouth was not signatory to the contract of September 1964, nor to its amendments. On August 27, 1968, the Union and East Town Chrysler-Plymouth entered into a separate agree- ment which also expired on August 31, 1970. On August 13, 1970, East Town Chrysler-Plymouth formally terminated said contract by letter to the Union, and on the same date sent a letter to Chrysler Corporation terminating its franchise as an official Chrysler-Plymouth dealer, effective August 22. In April 1970, representatives of Spitzer manage- ment began negotiating for the purchase of certain assets of East Town Chrysler-Plymouth, and these negotiations were concluded on September 4, 1970, 5 days after the expiration of the bargaining agree- 208 NLRB No. 80 702 DECISIONS OF NATIONAL LABOR RELATIONS BOARD ment. The negotiations between Spitzer Akron and East Town or Chrysler Corporation were culminated on September 4, 1970, and, as part of that agreement, Spitzer was to pay retroactively to September 1, 1970, those employees retained. Substantially all of the employees in the bargaining unit under the previous contract were retained by Spitzer Akron. At a meeting with the employees on September 4, 1970, wage scales and benefits were established by Spitzer Akron which were greater than the previous rates paid under the expired contract. We noted in our original Decision that the employing industry has been continued by Respon- dent in essentially the same form and scope as it was before the transfer of ownership, so that it would appear prima facie that Respondent legally succeeds to any bargaining obligation of its predecessor created by the Act. We then concluded that the continuity of the employing enterprise was not substantially disturbed or its nature changed during its interim operation by Chrysler, which was trying to operate it as a viable and thus a saleable business, until such time as Spitzer interests or some other entrepreneur took it over. Therefore, the Respondent took over a going business, not a defunct or liquidated one, and it follows that its bargaining obligation as a successor-employer continued. Noth- ing in Burns requires the Board to change these findings. Accordingly, we affirm them. Additionally, we affirm our earlier finding that Respondent was not reasonably justified by objective circumstances in doubting the Union's majority status on Septem- ber 14, 1970, and that Respondent further refused on and after that date to bargain with the Union in violation of Section 8(a)(5) and (1) of the Act. In the earlier case, the Board also found that Respondent violated Section 8(a)(5) of the Act when it made unilateral changes of wages and certain working conditions of the employees in the bargain- ing unit. In Burns, the Supreme Court held that in the ordinary situation a successor-employer is free unilaterally to set initial terms on which it will hire the employees of a predecessor, since, until the successor-employer has hired his full complement of employees, it may not be clear that the union represents a majority of employees in the unit. However, the Court also stated that: [T]here will be instances in which it is perfectly clear that the new employer plans to retain all of the employees in the unit and in which it will be appropriate to have him initially consult with the employees' bargaining representative before he fixes terms. The instant case is one of the type referred to by the Supreme Court in the above-quoted language. The evidence indicates that the work force was hired prior to the announcement of the changes, and that such changes had not been a part of the initial terms of rehiring. In operating the dealership, Respondent has been conducting the same business (with the exception of the auto body repair and paint shop) as East Town, using 10 of the 11 men in the East Town work force. When Del Spitzer visited the agency early in August 1970, in connection with family plans for buying the business, he told mechanic John Hall that the Spitzers planned to buy the agency, and would need good mechanics. When Hall suggested that he keep all the East Town mechanics, Spitzer replied that he had checked on them, found they were good men, and "I want every man to stay on the job, and we will carry on as usual." On the evening of September 4, 1970, shortly after Respondent had consummated the purchase of assets from East Town, John and Del Spitzer assembled and talked to the employees at the agency. Del Spitzer explained the family operations in developing dealer franchises, and said the Spitzers had taken over the Chrysler-Plymouth franchise here. He announced that the employees would receive extra pay in their paychecks coming out that day. He also described the Spitzer hospital benefit plan, saying it was better than the plan which the men already had from the Union; he said Respondent would pay one- half the hospital insurance premiums, as well as one- half of their uniform expenses, and would give them six paid holidays a year, and a week of paid vacation after a year of service. At the close of his remarks, Spitzer asked for questions, but there were none from the men, nor was there any discussion of the Union or its current benefits. Union Steward Andy Parks reported the Spitzer remarks at once to Ramnytz, business agent of the Union, who said he would contact Respondent about a contract. Ramnytz visited the agency on September 9, and told Alan Spitzer, Norman Hamilton, an officer of Spitzer Management, Inc., and Service Manager Richard Wolfe that the Union represented the employees and wanted a contract. Spitzer said that, after his talk with the men on September 4, he doubted very much that the East Town employees wanted to "continue with the Union," and suggested that the Union should have a Board election, and, if the employees indicated they wanted the Union, he would be glad to negotiate a contract with it. We find that, when Respondent took over the business on September 4, it had completed hiring its work force, which consisted of approximately 10 employees, substantially all of whom had formerly SPITZER AKRON, INC. 703 worked for East Town. Under the teaching of Burns, Respondent had a bargaining obligation as a successor to East Town. The Respondent's position on that date was akin to that of an employer confronted with a newly selected bargaining repre- sentative. It was not free thereafter to establish or change conditions of employment for unit employees without bargaining with the Union .2 Moreover, from the facts detailed above, it is apparent that as of September 4, Respondent had planned to, and had indeed retained substantially all of the employees in the unit and at such time "it was appropriate to Y ave him initially consult with the employees' bargaining representative before he fixes terms." As noted, the Union'made its first bargaining demand, when its representative visited the agency on September 9, stating that the Union represented the employees and wanted a contract. Thus, it is clear that Respondent planned to, and did, retain virtually all of its predecessor's employees in the unit, and that these employees were' represented by the Union and constituted a majority of the unit both before and after the transfer of ownership. Accordingly, we reaffirm the findings, conclusions, and remedy provided in our original Decision and Order.3 2 Ranch-Way, Inc , 203 NLRB No. 118 3 See Bachrodt Chevrolet Co, 205 NLRB No 122