Retail Clerks Union Local 1557

4 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Retail Clerks Union Local 1557 and Giant Foods of Chattanooga, Inc. - Meat Cutters, Butchers & Foodhandlers Union No. 405 and Giant Foods of Chattanooga, Inc. Cases 10=CP-136 and 10-CP-137 March 20, 1975 DECISION AND ORDER BY MEMBERS FANNING, JENKINS, AND PENELLO On October 21, 1974, Administrative Law Judge Da- vid S. Davidson issued the attached Decision in this proceeding. Thereafter, the Respondents filed excep- tions and a supporting brief. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the Na- tional Labor Relations Board has delegated its au- thority in this proceeding to a three-member panel. The Board has considered the record' and the at- tached Decision in light of the exceptions and brief and has decided to affirm the rulings, findings, and conclu- sions of the Administrative Law Judge and to adopt his recommended Order. ORDER Pursuant to Section 10(c) of the National Labor Re- lations Act, as amended, the National Labor Relations Board adopts as its Order the recommended Order of the Administrative Law Judge and hereby orders that the Respondents, Retail Clerks Union Local 1557, Nashville, Tennesee, and Meat Cutters, Butchers & Foodhandlers Union No. 405, Nashville, Tennessee, each shall take the action set forth in the said recom- mended Order. I The Respondents' requests for oral argument are hereby denied as the record, including the Respondents' exceptions and brief, adequately pre- sents the issues and the Respondents' positions DECISION STATEMENT OF THE CASE DAVID S. DAVIDSON , Administrative Law Judge : Pursuant to charges filed on April 26, 1974, by Giant Foods of Chat- tanooga, Inc., against Respondents, a consolidated complaint issued on May 8, 1974, alleging that since on or about March 27, 1974, Respondents have picketed the Charging Party's place of business with an object of recognition or bargaining as representative of Charging Party's employees notwith- standing that Respondents are not certified as representatives of such employees and that such picketing has continued for more than 30 days without the filing of a representation petition. The complaint alleges that Respondents thereby vi- olated Section 8(b)(7)(C) of the Act. In their answer as amended during the hearing Respondents denied the com- mission of any unfair labor practices and raised certain af- firmative defenses. A hearing was held before me in Chattanooga, Tennessee, on May 29, 1974, and on June 2 and 3, 1974. At the close-of the hearing oral argument was waived and the parties were given leave to file briefs which have been received from the General Counsel and Respondents. Upon the entire record in this case and from my observa- tion of the witnesses and their demeanor I make the follow- ing: FINDINGS AND CONCLUSIONS I THE BUSINESS OF THE EMPLOYER Giant Foods of Chattanooga, Inc., hereinafter referred to as GFC, is a Tennessee corporation with its principal office and place of business in the East Gate Shopping Center in Chattanooga, Tennessee, where it is engaged in the operation of a single retail food store. The store opened for business on March 24, 1974. During its first 5 weeks of operation its weekly gross receipts varied between approximately $44,000 and $103,000 and averaged $69,000. GFC receives some pro- ducts directly from sources outside the State of Tennessee including milk, chickens, beef, baked goods, and coffee. In the absence of any evidence to indicate that GFC's future weekly gross receipts will vary materially from the average weekly gross receipts during the first 5 weeks of its opera- tions, it is clear that the annual gross receipts of GFC will substantially exceed $500,000 and that GFC meets the Board's jurisdictional standard for retail enterprises.' I find that GFC is an employer engaged in commerce within the meaning of the act and that assertion of jurisdiction herein is warranted. II THE LABOR ORGANIZATIONS INVOLVED Retail Clerks Union Local 1557, referred to hereinafter as Local 1557, and Meat Cutters, Butchers & Foodhandlers Union No. 405, referred to hereinafter as Local 405, are labor organizations within the meaning of the Act. III THE ALLEGED UNFAIR LABOR PRACTICES A. The Facts 1. The origin and operations of GFC Malone and Hyde, Inc., is primarily a large wholesale gro- cery distributor which supplies approximately 2,000 retailers in the South Central and Southeast portion of the United States and provides them various services as well as supplies. Most of the stores supplied by Malone and Hyde are in- dependently owned and operated, but approximately 50 are owned and operated directly by Malone and Hyde. Before March 10, 1974, Malone and Hyde owned and operated a store at the East Gate Shopping Center in Chattanooga, Tennessee, which traded under the name Giant Foods of I Martin J. Baker, an individual proprietor, d/b/a Galaxy Theatre, et al, 210 NLRB 695 (1974) 217 NLRB No. 11 RETAIL CLERKS UNION LOCAL 1557 America. The meat and delicatessen employees at the East Gate store were represented by Local 405, and the remaining store employees were represented by Local 1557. Both Unions had agreements with Malone and Hyde. Sometime in early 1974,2 Malone and Hyde decided to sell the East Gate store. According to Malone and Hyde's vice president in charge of retail food operations the decision was made because the East Gate store was not profitable. Shortly thereafter John Mitchell, a divisional sales manager for Malone and Hyde, telephoned Dorris Huey and told him that the store was available for purchase. Huey was a longtime acquaintance of Mitchell and several months ear- lier had asked Mitchell if he knew of any retail store for sale and had expressed interest in buying a store. Huey had pre- viously owned an-operated two other retail stores in Evans- ville, Indiana, and in Chaffee, Missouri. He had sold the Chaffee store in May 1973, and in early 1974 was living in Cape Girardeau, Missouri, where he had taken a job as a stock clerk in a retail grocery store operated by the National Tea Company where he performed routine stock-clerk func- tions. At some point either before or after his call to Mitchell, Huey had invested the proceeds of the sale of the Chaffee store in land in Arkansas which he started to develop into a mobile home park. According to Huey, he took the job in Cape Girardeau in order to keep active during the winter months when work on the Arkansas land had to be sus- pended. When Mitchell, called Huey in January, Huey said he would think it over and a few days later called Mitchell back to make arrangements to see the store. A few days later Huey and his wife met Mitchell at the Malone and Hyde warehouse in Nashville en, route to Chattanooga to look at the store. In Nashville Mitchell introduced Huey to John Moll, a vice president of Malone and Hyde, who was to handle the sale of the East Gate store. Mitchell then drove with the Hueys to Chattanooga where the Hueys inspected the store. They then returned to Nashville where the Hueys had a further conversation with Moll. In discussion with Moll either before or after the trip to Chattanooga Huey and Moll discussed the condition of the store and the terms on which it was being offered for sale.' The discussion was relatively brief, lasting less than an hour. Moll told Huey that Malone and Hyde wanted $195,- 000 for store equipment and fixtures and would sell the stock in trade,,which he estimated as worth between $200,000 and $300,000, for whatever an inventory disclosed its value at the time of sale, with the purchaser to assume no obligations of Malone and Hyde. The premises were not owned by Malone and Hyde but were leased, and Malone and Hyde would sublet to the purchaser. Moll informed Huey that Malone and Hyde had contracts with Locals 405 and 1557. Moll showed Huey a profit and loss statement for the store which showed that the store had lost between $25,000 and $30,000 the previous year. Moll said that he believed that the reason the store was losing money was poor management and 2 All dates which appear hereafter were in 1974 unless otherwise in- dicated. 3 Mitchell descnbed a conversation before the trip to Chattanooga, and Huey described a conversation after it. As both descriptions contain sub- stantial similarities, I have concluded that they refer to the same conversa- tion whenever it occurred. 5 I between two divisional outlets of Malone and Hyde aid the store. There was some discussion of labor costs, which the statement showed ran at about 10 percent of gross volume of business. Huey stated that he believed that with proper management the store could make money and that he would be perhaps interested in buying. He testified that this was based on his own impression when he inspected the store that it was poorly managed and that labor costs could be reduced' Huey asked if it would be possible to buy the store if he could raise $100,000, and Moll replied that Malone and Hyde would sell with that amount to be invested and would be walling to finance the rest but would need a personal financial statement from Huey. During this meeting Huey said he would need an'attorney and asked for some guidance in choosing one. Moll recom- mended an attorney whom Huey subsequently retained to represent him.' Huey testified that there was no discussion of how the transaction could be handled so that Huey might avoid dealing with Locals 405 and 1557.6 Huey returned to Cape Girardeau from Nashville and spoke with Richard Cates and Homer Ray about participat- ing with him in buying the East Gate store. Cates was then manager and Ray was head meatcutter at the National Tea store in Cape Girardeau. Huey told them he believed that it would be a nice store if it was cleaned up and properly managed and that they could make money. Thereafter the three of them and their wives went to Chattanooga to inspect the store, and during the following week Huey arranged to meet Moll while Moll was visiting a Malone and Hyde distri- bittion center at Sikeston, Missouri, to discuss the sale fur- ther. The Sikeston meeting was held on February 6 and lasted no more than an hour. Huey, Cates, and Ray presented Moll with personal financial statements. Huey told Moll that they had assets but no cash and would be interested in buying the store if they could have a year's time within which to liqui- date their assets and pay the $100,000 which had previously been discussed as their investment in the store.' Either at this meeting or by telephone shortly thereafter, Moll ap- pioved the sale with this arrangement.' The understanding was that $100,000 was to be due 1 year from the date of the sale and the balance of the purchase price was to be due 5 years after the date of the sale. Before agreeing to these terms Moll made no investigation of the financial statements fur- nished by the potential purchasers apart from reading them. During this Sikeston meeting, the terms of the lease and the According to Huey 8-1/2 percent of gross sales should have been suffi- cient to supply necessary labor to run the store and the figure shown in the profit and loss statement was very high ^ Huey so testified. Moll initially testified that he had not recommended a particular attorney to Huey but then agreed that he had done so after being shown a deposition which he had previously given in a related court pro- ce$ding 6 Moll testified that he merely told Huey of the existence of the contracts and Huey made no response Mitchell testified that he could not recall any conversation about the Unions when he was present with Huey and Moll. F Among themselves at that point Huey, Cates, and Ray had agreed that Huey would invest $50,000 and the others $25,000 each. s Huey testified that Moll said he would have to check and later notified him that the arrangement was approved. Moll and Ray testified that Moll approved the arrangement without indicating that approval came at a later date 6 DECISIONS OF NATIONAL LABOR RELATIONS BOARD payments which would be required under it were also dis- cussed and Moll said he would have his lawyer draw up a sublease. Homer Ray testified that at this meeting there was discus- sion of the Unions, that Moll said the Unions would be removed from the store, that it had been done before, and that they had a lawyer who would assist them. According to Ray they discussed the fact that Malone and Hyde would termi- nate all its employees, that the store would close for 2 weeks, and that they would reopen without the Unions. Ray testified that he understood that one way to get the Unions out was to terminate the employees, close down, and then hire a new work force. Cates initially testified that they did not discuss the employees or the Unions at this meeting, but later ex- pressed doubt whether anything was said about being bound by the union contracts at this meeting. Moll denied ever discussing with Huey any means to get rid of the Unions. Shortly after the Sikeston meeting Huey, Cates, and Ray met to discuss the venture further. At that meeting Ray decided to withdraw from participation in the purchase and so informed Huey and Cates. According to Ray, at that meet- ing, they discussed the number of employees that would be needed in each department and the wage rates they would have to pay. Ray testified that they discussed hiring former Malone and Hyde employees according to their ability,- and in the course of this discussion Huey said that they did not want to hire a majority of the former Malone and Hyde employees because it was the only way to keep the Unions out. Cates testified that Huey had told him that he had checked with his lawyer and that they were not obligated to the contracts with the Unions but that he never had any discussion with Huey about whether they would recognize or bargain with a union.' - After an unsuccessful effort to recruit Thomas Johnson, a meatcutter at the National Tea store, to replace Ray as a participant in the venture,10 Huey and Cates decided to go through with the purchase of the store without a third partici- pant and with Huey increasing his investment and interest. In late February Huey went to Chattanooga to start inter- viewing prospective employees and preparing to take over the store. On or about February 16, Walter Rotchild, vice president in charge of retail food operations for Malone and Hyde, had the following letter sent to Locals 405 and 1557: This letter is to inform you that the Company has made arrangements for the sale of its Giant Food Store at Chattanooga, Tennessee. Under the terms of the proposed sale, the purchaser, who is Mr. Dorris A. Huey, did not assume any of Company's contractual obligations. At the present time, it is contemplated that the transfer of ownership will be made effective as of March 10, 1974. 9 Huey testified before Ray and was not recalled to testify about the conversation with Ray and Cates after the Sikeston meeting. However, he generally denied concern over whether or not he would have to deal with the Unions. 10 According to Johnson, in discussing the venture Cates told him that the- store was union but that by closing for 2 weeks and hiring a new crew they would eliminate the Unions We are sorry to have to terminate our interest in this store. It is not a profitable operation for the Company, and we do not feel we should continue to operate it under such circumstances. Eligible employees, of course, will be entitled to re- ceive vacation pay in accordance with-the contract upon the closing of the store, and one months pension pay- ment will be made following termination of employ- ment. These employees are being informed of the closing and will also be advised of their provisions., If you have any matter that you want to discuss with us in connection with the shutdown of our operation, please let us know. Malone and Hyde also sent the following memorandum to the employees at the East Gate store: The Company has made arrangements for the sale of our store in Chattanooga, Tennessee to Mr. Dorris A. Huey. At the present time, it is contemplated that the transfer of ownership will be made effective as of March 10, 1974. Eligible employees, of course, will be entitled to receive vacation pay in accordance with the contract upon clos- ing of the store, and employees' seniority will be ob- served. Those employees wishing to apply for transfer to the Giant Food Store in Nashville are requested to give notice by March 10, 1974. On March 10 an inventory was taken at the store, and Huey assumed control of the store. On the same date Malone and Hyde terminated its employees at the store. - As of March 10 no money had been paid to Malone and Hyde by Huey and Cates, no written documents relating to the sale of the store had been excuted, and GFC which was to be the purchaser had not yet been incorporated. A week later on March 18, GFC received its charter. The corporate stock was divided between Huey and Cates, with Huey re- ceiving 75 percent. From March 10 until March 24, the store was closed. That period was utilized by GFC for cleaning, fumigation, repairs, and some physical alterations to the layout." The exterior sign which had formerly read "Giant Foods of America" was altered by deleting the words "of America."12 The repairs and changes in the store were paid for by GFC. During the 2-week shutdown in addition to Huey and Cates GFC em- ployed approximately six employees for cleanup work, most of whom had worked for Malone and Hyde. During the shutdown Huey and Cates continued to interview prospective employees to work when the store reopened for business. By the time the store reopened on March 24 they had hired from 65- to 67 employees, of whom substantially less than a majority had worked at the East Gate store before March 10.13 On the reopening day and prior thereto, Malone and 11 An exit was removed as an antishoplifting measure and some additional aisles were created in the store. 12 Huey testified that GFC intends to add the words "of Chattanooga" at some future time Malone and Hyde operates other stores under the name Giant Foods of America, but does not have exclusive rights to the name Giant Foods RETAIL CLERKS UNION LOCAL 1557 Hyde furnished some additional help to prepare for the open- ing and operate the store on the opening day. Since reopening by GFC, there has been little change in the product line carried at the store.14 GFC buys meat, dairy products, produce, and some other items from suppliers other than Malone and Hyde, but it buys most of its dry groceries from Malone and Hyde. GFC utilizes a bookkeeping service which Malone and Hyde offers to its retail customers for a fee. GFC also buys its insurance from a Malone and Hyde operated agency. GFC uses the same telephone number that was formerly used at the East Gate store, but has transferred the account to its name. GFC pays directly for some of its purchases from suppliers other than Malone and Hyde but a number of its purchases from other sources are billed through Malone and Hyde. GFC receives a weekly statement from Malone and Hyde which includes a rental charge under the sublease with Malone and Hyde, charges for merchandise purchased directly from Malone and Hyde during the previ- ous week, charges for merchandise purchased elsewhere but billed through Malone and Hyde, and charges for accounting, insurance, and other services provided by Malone and Hyde.15 GFC prepares its own payroll and writes payroll checks for employees on its own account, but its payroll tax returns are prepared by Malone and Hyde's accounting serv- ice. Malone and Hyde is not responsible for any of the finan- cial obligations of GFC, and there is no arrangement under which Malone and Hyde has undertaken to make up for any losses which may be suffered by GFC. Malone and Hyde's only continuing obligation to GFC is under its sublease for the premises. The lack of documents memorializing the sale and the obligations of Huey, Cates, and GFC continued beyond the reopening date of the store. On March 24, the day the store opened, Huey and Cates completed applications for two loans, from Malone and Hyde; one in the amount of $100,000 to be repaid in 1 year with interest at the rate of 6 percent "add on," and the other in the amount of $300,000 to be repaid in 5 years at the same rate of interest. On April 3, Huey signed demand notes in the amount of $100,000 and $399,261.76. These notes were sent to him by Malone and Hyde that morning and he signed them without consulting with his lawyer.16 On the same date Huey also 13 The record is not clear as to the exact number of former store em- ployees hired by GFC. Huey testified that he believed there were 15 former East Gate employees in the initial complement of GFC employees, that the total work force at the time of the hearing had been reduced to 40, that there had been considerable turnover, and that most of the employees had not formerly worked at the store. A number of employment applications were placed in evidence as exhibits and a posthearing stipulation was submitted which has been received as Resp. Exh. 32. There is some inconsistency between what the exhibits received at the hearing and the posthearing stipulation purport to show, and it is not possible to give a clear picture of employment at the store from them, but nothing in them is in any essential conflict with the testimony of Huey 1413FC discontinued the sale of beer because of Huey's personal objection to it. No other change in products was established. 15 One of the additional services provided by Malone and Hyde is a computer ordering service which permits employees at the Chattanooga store to order merchandise -from Malone and Hyde utilizing a computer terminal in the store. A weekly rental fee is charged for that. 16 On the same morning GFC and Locals 405 and 1557 appeared in a state court proceeding which arose out of the picketing which gave rise to the complaint in this case 7 signed the sublease for the premises when it was furnished to him by his attorney. The amount of the two notes represented the agreed-upon cost of equipment, the value of the inventory in the store as of March 10, and an additional sum for stock to replenish the shelves which had been depleted in preparation for the open- ing of March 24. Nothing had been paid on either of the notes as of the time of the hearing in this case. At some point Malone and Hyde furnished GFC a bill of sale which bears the date March 10, 1974, and was signed by John Moll. Moll had no clear recollection of when it was signed and it appears from his testimony as to the procedure followed by Malone and Hyde, the surrounding circum- stances, and the uncertainty of both Moll and Huey that the bill of sale was not executed and given to GFC until April 3 at the earliest. At some time prior to the close of the hearing, in this case the demand notes signed by Huey and Cates were replaced by promissory notes.17 One is in the amount of $110,900 payable in 1 year, which represented the initial investment promised by Huey and Cates with interest. The other note is in the amount of $518,434.74 payable in 59 equal monthly installements and is for the balance of the purchase price with interest. The 5-year note is secured by GFC's equipment and inventory. According to Malone and Hyde Vice President Moll, over the past 3 or 4 years Malone and Hyde has loaned money for the purchase of approximately 50 retail stores, and there was nothing unusual about the sale of the East Gate store to Huey or the timing of the preparation of the sale documents. He testified that it is not possible to have all the documents prepared and ready for execution on the date of the inventory and that it normally takes from 30 to 60 days thereafter to complete and execute documents. 2. Communications between the Unions and GFC before reopening of the store On or about February 27, Toney Cary, a representative of Local 1557, delivered to Huey the following letter signed by the president of Local 1557: We are the bargaining- agent for the employees em- ployed by Giant Foods of America in Chattanooga. We have been advised that Giant Foods of America has made arrangements to sell you that facility. As the bargaining agent of the employees we are re- questing a meeting with you so as to determine what changes if any may be necessary in the union contract covering these employees. On the following day, February 28, Cary delivered a sec- ond letter with identical contents but signed by him on behalf of Local 405. Huey made no response at that time to either letter. On March 8, Cary delivered a further letter to Huey signed by him. That letter read: 17 It is not clear from the record when these notes were executed, but it appears that they were executed sometime after Huey testified on the first day of the hearing in this case. DECISIONS OF NATIONAL LABOR RELATIONS BOARD ,The letters hand delivered by myself from the Meat Cutters Union and Retail Clerks Union, Local 1557 that stated they represent the employees employed by Giant Foods of America in Chattanooga, we want to make sure you understand that the Meat Cutters Union represents the meat department employees and Retail Clerks Union,, Local 1557 represents the other employees-grocery, produce and drug department em- ployees. , [Sic.] Representatives from Malone and Hyde told us that they had informed you of the existing contracts and you will find the exact bargaining units spelled out in each contract. On March 21, 1974, GFC sent letters to the two locals with the following contents: This letter constitutes a formal response to your undated letter handcarried by Mr. Toney Cary on February 28, 1974, and your letter dated March 8, 1974. These letters were directed to Mr. Dorris Huey. For purposes of this response, Giant Foods of Chattanooga, Inc., stipulates his agency. As you know, the Giant Foods of America store located in the Eastgate Shopping Center, Chattanooga, Tennes- see, has been sold in a bona fide sales transaction and the present ownership constitutes neither a successor nor an alter ego. Accordingly, in view of the above plus the fact that no "certification year" doctrine may apply to this matter, and the employers good faith doubt that your organiza- tion represents an uncoerced majority in the unit vaguely referred to in your letter or in any other unit appropriate for the purposes of collective bargaining , it is our posi- tion that it would be inappropriate to meet with your representatives at this time for the purposes suggested in the referenced communications. Union Local 1557. On April 2 these signs were -replaced with signs which read: Please Do Not Patronize Giant Foods Retail Clerks Union Local 1557 Amalgamated Meat Cutters Local 405 The latter signs were used until the picketing ended on May 15. From March 27 through April 2 the following handbill was handed out by the pickets: TO THE CONSUMING PUBLIC Giant Foods has changed hands. Loss of jobs, wages and benefits below Union standards were brought to the Chattanooga area by the new owners from up North. PLEASE DO NOT PATRONIZE GIANT FOODS UNFAIR TO Retail Clerks Union, Amalgamated Meat .Cutters, Local 1557 Local 405 203 N. 110th Street 918 Main Street Nashville, Tenn. Nashville, Tenn. THANK YOU FOR YOUR SUPPORT It is respectfully requested that any further communica- tions, written or oral, from you to us be directed through our counsel, Mr. Terry M. Brooks, 400 Union Street, Nashville, Tennessee 37219. 3. The picketing at the East Gate store - On Wednesday, March 27, 3 days after the store reopened, at approximately 1 p.m. pickets appeared outside the store and picketed with signs and passed out pamphlets. Among the pickets was Toney Cary. The picketing and handbilling continued from March 27 until May 15. The pickets patrolled in front of the store and spent most of their time there as customers went in and out. From time to time, however, they left the front and went to the rear of the store to talk to truckdrivers as they arrived at the store. Initially the picket signs -read: Please Do not Patronize Giant Foods Unfair Retail Clerks On April 2 'one change was made in the handbill. Under the words "Giant Foods" the phrase "East Gate, Shopping Center" was inserted in parentheses. The changed handbill was distributed until May 15. On March 27 GFC sent telegrams to both locals protesting the presence of the pickets at the store and charging that they were interfering with GFC's business and engaging in harass- ment. Local 1557 responded by telegram denying the charges made by-GFC and asserting that the pickets were exercising first amendment rights. The telegram, concluded: WE AGAIN REQUEST A MEETING FOR THE PURPOSE OF COLLEC- TIVE BARGAINING The record does not show whether Local 405 received the telegram sent to it by GFC or whether it responded to it. Concurrent with the beginning of the picketing of GFC's premises Locals 405 and 1557 filed charges against GFC in Cases 10-CA-10656 and 10-CA-10657. The charges were identical in content and alleged violations of Section 8(a)(1), (3), and (5) of the Act. As the basis of the charges they stated. RETAIL CLERKS UNION LOCAL 1557 Since on or about February 16, 1974, and dates subse- quent thereto, the employer has refused to hire persons because of their Union obligation; refused to meet and bargain with the Union who, but for the employers ille- gal activities, represent a majority of the employees in an appropriate unit for collective bargaining. These charges were subsequently withdrawn without prejudice. According to counsel for the Respondents they were withdrawn after consultation with counsel for the Gen- eral Counsel in the Atlanta Regional Office. B. Concluding Findings The General Counsel contends that a violation of Section 8(b)(7)(C) has been established because neither of Respond- ent Unions was currently certified as a representative of em- ployees of GFC, because the picketing and communications between Respondents and GFC show a recognitional object, and because the picketing continued for more than 30 days without the filing of a representation petition. Respondents contend that the picketing was not for a pros- cribed object but "was to publicize the labor dispute with the employer, to protect hiring policies which were discrimina- tory and to protest the refusal of the employer GFC to recog- nize the exclusive bargaining representative of the unit em- ployees." In support thereof Respondents contend that the termination of the employees of Malone and Hyde was for a discriminatory purpose, that the refusal and failure of GFC to hire former employees of Malone and Hyde was dis- criminatory, and that GFC was obligated as a successor to recognize and bargain with Respondents so that its refusal to do, so was an unfair labor practice. Conclusions Section 8(b)(7)(C) makes it an unfair labor practice for a labor organization: . . . to picket or cause to be picketed . . . any employer where an object thereof is forcing or requiring an em- ployer to recognize or bargain with a labor organization as the representative of his employees , or forcing or requiring the employees of an employer to accept or select such labor organization as their collective bargain- ing representative, unless such labor organization is cur- rently certified as the representative of such employees. (C) where such picketing has been conducted without a petition under Section 9(C) being filed within a reason- able period of time not to exceed thirty days from the commencement of such picketing . . . Provided further, That nothing in this subparagraph (C) shall be construed to prohibit any picketing or other publicity for the pur- pose of truthfully advising the public (including consum- ers) that an employer does not employ members of, or have a contract with, a labor organization, unless an effect of such picketing is to induce any individual em- ployed by any other person in the course of his employ- ment, not to pick up, deliver or transport any goods or not to perform any services. 9 Here, on the surface, the elements of a violation of Section 8(b)(7)(C) are readily established. GFC was a newly organ- ized corporation having no prior bargaining relationship with Respondents, and Respondents were not certified to repre- sent any employees of GFC. Picketing commenced on March 27 and continued for more than 30 days without the filing of any representation petition. Written communications deliv- ered to GFC during the month before the picketing began claimed that Respondents were bargaining agents for GFC's employees and requested a meeting for purposes of determin- ing changes in the contracts between the Respondents and Malone and Hyde. After the picketing began, in response to GFC's telegraphic protest, Local 1557 again requested a meeting for purposes of collective bargaining. Contempo- raneous with the start of the picketing both locals filed charges alleging that GFC refused to bargain with them in violation of Section 8(a)(5). There is thus ample evidence to establish prima facie that an object of the picketing was to force or require GFC to recognize or bargain with Respond- ents, and unless any of Respondents' affirmative defenses has merit, the General Counsel has sustained his burden of proof of the violation alleged in the complaint.te Conceding that their "long-range objective" was to require GFC to bargain with them, Respondents contend that it is the reasonably immediate objective of the picketing which must be considered and that that objective was "to publicize cer- tain labor disputes and unfair labor practices which were ongoing at that time and which were subject to unfair labor practice charges filed by the UNION " However, neither the facts in this case nor the law permits the distinction that Respondents would draw. Quite clearly, Respondents' rea- sonably immediate objective was to do more than publicize their disputes with GFC and the alleged unfair labor prac- tices. Their reasonably immediate objective was to resolve their disputes and remedy the alleged unfair labor practices. Achievement of that objective required among other things immediate recognition and bargaining." The question remains, however, whether the object of pro- testing the alleged unfair labor practices and the object of seeking to enforce a bargaining obligation of GFC as a succes- sor to Malone and Hyde remove the picketing from the pro- scription of Section 8(b)(7)(C). As to the former, the Board's decision in International Hod Carriers; Building and Com- mon Laborers' Union of America, Local 840, AFL-CIO (Charles A. Blinne, d/b/a C. A. Blinne Construction Com- pany), 130 NLRB 587 (1961), 135 NLRB 1153 (1962), is directly in point. There the Board concluded that the com- mission of unfair labor practices by an employer does not relieve a union of its obligation to file a timely petition if it engages in picketing which has as an object recognition and 18 Respondents' contention that no violation may be found in the absence of evidence that the picketing was aimed at GFC's employees is without merit Respondents have not directly contended that the picketing fell within the publicity proviso to Sec. 8(b)(7)(C) and the evidence would not support such a contention. See Hotel, Motel & Club Employees' Union, Local 568,AFL-CIO (Restaurant Management, Inc), 147 NLRB 1060, 1068 (1964) 19 The distinction Respondents would draw differs from that between "the ultimate object of almost all union activity" and the "reasonably immediate objectives" of a particular picketing union referred to in Penello v Retail Store Employees Local Union No. 692, etc., 188 F Supp. 192, 201, affd 287 F.2d 509 (CA 4), which Respondents cite. 10 DECISIONS, OF NATIONAL LABOR RELATIONS BOARD bargaining . Rather, a union is required to file charges which, if meritorious, will result in delay in the processing of the representation petition and will ,permit the union to continue its picketing without violating Section 8(b)(7) pending satis- factory resolution of the unfair labor practice charges.20 Thus, the fact that the picketing here may have been intended to protest alleged unfair labor practices of GFC cannot serve as a defense to the complaint if an object of the picketing was also recognition and bargaining, as was the case. Insofar as the briefs indicate and research reveals, the Board has not previously decided whether a picketing by a union asserting representation rights by virtue of a claimed successorship constitutes picketing for recognition or bar- gaining within the meaning of Section 8(b)(7).21 Without necessarily deciding that all such picketing would violate Section 8(b)(7)(C) of the Act, it would appear that in the circumstances o1 this case it is difficult to distinguish the objective of enforcing the claimed successorship obligation to bargain from the objective of remedying alleged unfair labor practices. Here, the claim of successorship directly underlies the charges of refusal to bargain filed and withdrawn by Respondents. Moreover, the claim of successorship as ad- vanced by Respondents rests heavily on their additional claim that GFC discriminated against former Malone and Hyde employees in hiring and that, but for such discrimination, a majority of the former Malone and Hyde employees would have been hired by GFC.22 Thus, in this case the objective of enforcing the successor's alleged bargaining obligation is inseparable from the objective of protesting the alleged unfair labor practices and must be rejected as a defense under the rationale of Blinne, described above. Indeed, were the opposite conclusion to be reached, it would become necessary in this proceeding in order to deter- mine the merits of the successorship defense to decide whether GFC committed unfair labor practices despite the fact that no complaint has been issued by the General Coun- sel. But pursuant to the Board's Time Square doctrine '21 the Board will not make such a determination absent a complaint. 24 While the Time Square case was a representa- 20 135 NLRB at 1163-67. Cl Local 259, International Union United Automobile, Aircraft and Agricultural Implement Workers of America, UAW, AFL-CIO (Fanelli Ford Sales, Inc), 133 NLRB 1468 (1961) 21 In National Maritime Union ofAmerica, AFL-CIO (Overseas Carriers Corporation), 174 NLRB 216 (1969), and United Industrial Workers of the Seafarers International Union of North America, Atlantic, Gulf Lakes and Inland Waters District, AFL-CIO (Fort Richmond Elevator Company, Inc), 170 NLRB 1352 (1968), enfd 422 F 2d 59 (C.A. 5, 1970), successor- ship defenses were raised to 8(b)(7)(A) and 8(b)(7)(C) allegations. In each case the defense was rejected on its merits The Board did not consider whether a meritorious claim of successorship would have constituted an adequate defense. 22 The evidence does not disclose how many employees were formerly employed at the East Gate store by Malone and Hyde and how many of those employees were hired by GFC. However, it does indicate that substan- tially less than a majority of the initial complement of GFC employees formerly worked for Malone and Hyde and there is nothing to indicate that GFC's complement differed materially in size from Malone and Hyde's. On this state of the record there does not appear to be a basis for finding successorship in this case without a finding that GFC discriminated against former Malone and Hyde employees in hiring N.L.R B. v Burns Interna- tional Security Services, Inc, 406 U.S 272 (1972), Spruce Up Corporation, 209 NLRB 194 (1974), Greengate Mall Inc, a subsidiary of the Rouse Company, 209 NLRB 37 (1974); J. R Sousa & Sons, Inc, 210 NLRB 982 (1974). 23 Time Square Stores Corporation, 79 NLRB 361 tion case in which a party sought a determination that stnk- ers were unfair labor practice strikers , its rationale has not been limited to representation cases, and it has recently been applied to an attempt to attack the validity of the election advanced as a bar to recognitional picketing in an 8(b )(7)(B) proceeding.25 The fact that here charges were withdrawn rather than dismissed as in the cited case is not material, for what is determinative is whether or not a complaint has issued to give rise to a determination that there were unfair labor practices Accordingly, I conclude that the defense based on the alleged successorship of Malone and Hyde must be rejected.26 A further contention of Respondents stressed at the hear- ing but not in their brief is that the sale of the East Gate store to GFC by Malone and Hyde was not bona fide and was a sham. I find that the evidence fails to sustain this defense. , To be sure the record discloses a remarkably loose transaction, with brief negotiations, and possession of the store passing to GFC without the execution of any documents or the passage of any money to Malone and Hyde. But not only is there testimony that this transaction was not unusual for Malone and Hyde, but the testimony of Homer Ray and Thomas Johnson, both of whom considered participation in the trans- action and whose interests certainly appeared closer to those of Respondents than GFC, corroborates the essentials of the testimony of Huey, Cates, and Malone and Hyde officials as to the nature of the transaction and its genuineness . Accord- ingly, I reject the defense that the sale was a sham , and I find that Respondents violated Section 8(b)(7)(C) of the Act as alleged in the complaint. IV THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of the Respondents, set forth in section III, above, occurring in connection with the operations of the Employer herein involved, described in section I, above, have - a close, intimate, and substantial relationship to trade, traffic, and commerce among the several States and tend to lead to labor disputes burdening and obstructing commerce and the free flow thereof. 24 It would be possible to find successorship as a matter of defense without concluding that GFC unlawfully refused to bargain , but in the circumstances of this case the defense cannot be maintained without concluding that GFC discriminated against former Malone and Hyde employees. Cf Hughes Tool Company, 104 NLRB 318 25 Service Employees'International Union, Local No. 227, AFL-CIO (Chil- dren's Rehabilitation Center, Inc.), 211 NLRB 982 (1974). 26 Were the merits of the claim of discrimination to be reached I would credit the disputed testimony of Ray and Johnson about statements made at the Sikeston meeting and in conversation with Huey and Cates concern- ing the hire of employees and operating without a union. Although Moll, Huey, and Cates generally denied the substance of the testimony of Ray and Johnson in this regard and Ray's testimony showed him to have some animus against Huey and Cates after withdrawing from the venture , I cannot believe that Huey and Cates were so little concerned about whether the Unions would continue to represent the employees of the store that they never discussed that topic among themselves Nor can I believe that Huey believed the labor cost factor had been too high on the one hand and hoped to reduce it but that nonetheless according to Cates he and Huey never discussed the wage scales at the store before gcing to Chattanooga. RETAIL CLERKS UNION LOCAL 1557 11 V THE REMEDY Having found that Respondents have engaged in certain activities which violated the Act, I shall recommend that they be ordered to cease and desist therefrom and to take certain affirmative action to effectuate the purposes of the Act. CONCLUSIONS OF LAW 1, Giant Foods of Chattanooga, Inc., is an employer en- gaged in commerce or in an industry affecting commerce within the meaning of Section 2(2), (6), and (7) of the Act. 2. Retail Clerks Union Local 1557 and Meat Cutters, Butchers & Foodhandlers Union No. 405 are labor organiza- tions within the meaning of Section 2(5) of the Act. 3. By picketing at the East Gate Shopping Center store of Giant Foods of Chattanooga, Inc., since on or about March 27, 1974, with an object of forcing or requiring Giant Foods of Chattanooga, Inc., to recognize or bargain with them as the representatives of their employees , without being cur- rently certified as representatives of such employees and without filing petitions under Section 9(c) within a reasonable period of time, Respondents have engaged in unfair labor practices affecting commerce within the meaning of Section 8(b)(7)(C) and Section 2(6) and (7) of the Act. Upon the basis of the foregoing findings of fact, conclu- sions of law, and the entire record , and pursuant to Section 10(c;) of the Act, I hereby issue the following recommended: B."28 Copies of said notices, on forms provided by the Re- gional Director for Region 10, after being duly signed by their respective authorized representatives; shall be posted by them immediately upon receipt thereof, and be maintained by them for 60 consecutive days thereafter, in conspicuous places, including all places where notices to members are cus- tomarily posted. Reasonable steps shall be taken by Respond- ents to insure that said notices are not altered, defaced, or covered by any other material. (b) Sign and mail sufficient copies of said notices to said Regional Director for posting by Giant Foods of Chat- tanooga, Inc., if willing, at all places where notices to its employees or customarily posted. (c) Notify the Regional Director for Region 10, in writing, within 20 days from the date of this Order, what steps have been taken to comply herewith. 28 In the event that the Board's Order is enforced by a Judgment of a United States Court of Appeals, the words in the notices reading "Posted by Order of the National Labor Relations Board" shall read "Posted Pursu- ant to aJudgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board." APPENDIX A NOTICE To MEMBERS POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government ORDER27 Respondents Retail Clerks Union Local 1557 and Meat Cutters, Butchers & Foodhandlers Union No. 405, their of- ficers, agents, and representatives, shall: 1. Cease and desist from: picketing or causing to be pick- eted, or threatening to picket or cause to be picketed, Giant Foods of Chattanooga, Inc., where an object thereof is forcing or requiring said Employer to recognize or bargain with them as the representatives, of its employees in violation of Section 8(b)(7)(C) of the Act. 2. 'Take the following affirmative action which is necessary to effectuate the policies of the Act: (a) Post at their business offices and meeting halls copies of the applicable attached notices marked "Appendix A.and 27 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, and recommended Order herein shall, as provided in Section 102.48 of the Rules and Regulations, be adopted by the Board and become its findings, conclusions, and order, and all objections thereto shall be deemed waived for all purposes. WE WILL NOT picket or cause to be picketed Giant Foods of Chattanooga, Inc., with an object of forcing or requiring Giant Foods of Chattanooga, Inc., to recog- nize or bargain with us as representative of its employees in circumstances violative.of Section 8(b)(7)(C) of the Act. RETAIL CLERKS UNION LOCAL 1557 APPENDIX B NOTICE To MEMBERS POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government WE WILL NOT picket or cause to be picketed Giant Foods of Chattanooga, Inc., with an object of forcing or requiring Giant Foods of Chattanooga, Inc., to recog- nize or bargain with us as representative of its employees in circumstances violative of Section 8(b)(7)(C) of the Act. MEAT CUTTERS, BUTCHERS & FOODHANDLERS UNION No 405