Spitzer Akron, Inc.

20 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Spitzer Akron, Inc. and Auto Mechanics Local 1363, District 54 of the International Association of Ma- chinists and Aerospace Workers, AFL-CIO. Case 8-CA-6177 July 9, 1975 SECOND SUPPLEMENTAL DECISION AND ORDER BY MEMBERS FANNING, JENKINS, AND KENNEDY On January 26, 1972, the National Labor Rela- tions 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 unconditonal 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 (1972), and N.L.R.B. v. Wayne Conva- lescent Center, Inc., 465 F.2d 1039 (C.A. 6, 1972), en- forcement of the Board's Order was granted on No- vember 27, 1972, by the United States Court of Appeals for the Sixth Circuit.' Subsequently, Re- spondent petitioned the Supreme Court of the Unit- ed 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 N.L.R.B. v. Burns International Security Services, Inc., 406 U.S. 272 '195 NLRB 114. 2 470 F.2d 1000. (1972); Federal Trade Commission v. Sperry & Hutch- inson Co., 405 U.S. 233, 245-250 (1972); Securities Exchange Commission v. Chenery Corp., 318 U.S. 80, 87-88 (1943); Bachrodt Chevrolet Co. v. N.L.R.B., 411 U.S. 912 (1973); Denham Co. v. N.L.R.B., 411 U.S. 945 (1973). On August 15, 1973, the court of appeals issued an unreported order which remanded the case to the Board "for such further proceedings as may be ap- propriate" in light of the cases cited in the order of the Supreme Court. The Board reconsidered the case and through an inadvertent oversight failed to notify Respondent Spitzer Akron that the case had been redocketed or to afford it an opportunity to participate. Thereafter the Board issued its Supplemental Decision and Or- der in which it adhered to its previous finding that Spitzer Akron had violated Section 8(a)(5) of the Act and determined that "[N]othing in Burns requires the Board to change these findings." 3 The Supplemental Decision and Order reaffirmed "the findings, conclu- sions, and remedy" of the original Decision and Or- der. On October 14, 1974, the Sixth Circuit Court of Appeals issued an order stating: Implicit in the instructions accompanying the remand of the case to the Board was a require- ment that the petitioner be given notice of the reconsideration of the case by the Board with an opportunity to present its views on the meaning of the Supreme Court opinions referred to there- in and the applicability to the facts of this case thereto, together with the right to petition to re- open proof in the case if it desired to do so. By not affording petitioner an opportunity to be heard and to participate in the reconsideration, the Board has failed to comply with the mandate of this court. [504 F.2d 28, 29.] Accordingly, the court of appeals granted the peti- tion for review and denied the Board's cross-applica- tion for enforcement of the Board's Order. The Sup- plemental Decision and Order of the Board entered on January 25, 1974, was set aside and the case was remanded to the Board for further proceedings con- sistent with the provisions of the circuit court's order. On December 10, 1974, the Board received a mem- orandum from Respondent presenting "its views on the meaning of the Supreme Court opinions referred to therein and applicability to the facts of this case thereto." Also, Respondent noted, "Incorporated herein as part of this memorandum is the respondent's exceptions filed with the Board prior to the issuance of the Board's decision reported in 195 '208 NLRB 700 (1974). 219 NLRB No. 2 SPITZER AKRON, INC. NLRB No. 24, respondent's brief filed in the United States Court of Appeals (6th Circuit) in Case No. 72-1187, 470 F.2d 1000, respondent's petition for a writ of certiorari filed with the United States Su- preme Court and reported at 411 U.S. 979 (1973), and respondent's brief filed before the United States Court of Appeals (6th Circuit) in Case No. 74-1151." 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. In its original Decision and Order 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 employ- ees in the appropriate unit on September 4, 1970, and by thereafter failing and refusing, on request, to rec- ognize, meet, and bargain with the Union with re- spect to rates of pay, wages, hours of employment, and other terms and conditions of employment of employees in the unit. As noted above, on November 27, 1972, the Sixth Circuit Court of Appeals ordered that the decision of the Board be enforced, stating: We conclude that there is substantial evidence to support the conclusion of the Board that Spit- zer Akron was a successor employer and was obligated to bargain with the Union as the rep- resentative of the predecessor employer, all of whom were employed by Spitzer Akron. N.L.R.B. v. Burns International Security Services, Inc., 406 U.S. 272 (1972); N. L. R. B. v. Wayne Convalescent Center, Inc., 415 F.2d 1039 (6th Cir. 1972). We further conclude that all other parts of the decision of the Board are supported by substan- tial evidence on the record considered as a whole. [470 F.2d at 1001]. The Board has again reviewed the record duly con- sidering the Respondent's memorandum in the light of Burns and we adhere to our original findings. In this regard, the Board originally found that the Re- spondent is a successor employer to East Town and obligated to recognize and bargain with the Union as the collective-bargaining representative of the unit employees. The Board, therefore, found that the Company had violated Section 8(a)(5) and (1) of the Act by unilaterally changing the wages and working conditions of employees on September 4, 1970, and by thereafter refusing, on request, to recognize and bargain with the Union.4 Finally, the Board conclud- 4 Member Jenkins joined in the unanimous 3-to-O decision that the Com- pany violated Sec. 8(a)(5) and ( 1) of the Act; he added that he did not rely on the Trial Examiner's conclusion that the Company had "no 'good faith doubt' " of the Union's majority. 21 ed that the subsequent strike by the employees on September 22, 1970, was an unfair labor practice strike, caused by the Company's unlawful refusal to bargain, and that the strikers were entitled to uncon- ditional reinstatement upon their application to re- turn to work on March 26, 1971. The Board's Order directs the Company to cease and desist from mak- ing unilateral changes in terms and conditions of em- ployment and to bargain with the Union on request. The Order further requires the Company to offer each striker to whom it has not made an uncondi- t onal offer of reinstatement immediate and full rein- statement to his former job or a substantially equiva- lent position, and to make whole all its employees who went on strike for any loss of earnings they have suffered from the time of their unconditional appli- cation for work on March 26, 1971, until such time as the Company unconditionally offers them reinstate- ment. The facts as found by the Board and sustained by the circuit court show that the Company continued its predecessor's operation in substantially -un- changed form; that, prior to assuming control, it in- dicated an intention to retain the predecessor's em- ployees, and that it effectuated this intention by taking over 10 of 11 of the predecessor's work force in the portion of business which the Company decid- ed to operate. In this regard, and as noted in our earlier decision, 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 Ma- chinists, a predecessor local of the Charging Union, entered into a multiemployer agreement with certain automobile dealers, including Arnett Chrysler-Plym- outh, a predecessor of East Town Chrysler-Plym- outh. Respondent thereafter 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-Plym- outh 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. The record further shows that in April 1970 repre- sentatives of Spitzer management began negotiating 22 DECISIONS OF NATIONAL LABOR RELATIONS BOARD for the purchase of certain assets of East Town Chrysler-Plymouth, and these negotiations were con- cluded on September 4, 1970, 5 days after the expira- tion of the bargaining agreement. 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 re- tained by Spitzer Akron. At a meeting with the em- ployees on September 4, 1970, wage scales and bene- fits were established by Spitzer Akron which were greater than the previous rates paid under the ex- pired contract. We noted in our original Decision and Order that the employing industry has been continued by Re- spondent 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 creat- ed by the Act. We then concluded that the continuity of the employing enterprise was not substantially dis- turbed or its nature changed during its interim opera- tion 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 fol- lows that its bargaining obligation as a successor em- ployer continued. Nothing in Burns requires the Board to change these findings. Accordingly, we af- firm them. Additionally, we affirm our earlier finding that Respondent was not reasonably justified by ob- jective circumstances in doubting the Union's major- ity status on September 14, 1970, and that Respon- dent 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 our earlier opinion, we also found that Respon- dent violated Section 8(a)(5) of the Act when it made unilateral changes of wages and certain working con- ditions of the employees in the bargaining unit. In Burns, the Supreme Court held that in the ordi- nary situation a successor employer is free unilateral- ly to set initial terms on which it will hire the employ- ees of a predecessor, since, until the successor employer has hired his full complement of employ- ees, it may not be clear that the union represents a majority of the 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. In other situations, however, it may not be clear until the successor employer has hired his full complement of employees that he has a duty to bargain with a union, since it will not be evident until then that the bargaining representative represents a majority of the em- ployees in the unit as required by §9(a) of the Act, 29 U.S.C. § 159(a). [406 U.S. at 294-295.] Clearly, the phrase "plans to retain all the employees in the unit," when read in the light of the sentence which follows, would cover not only the situation where the successor's plan includes every employee in the unit, but also situations where it includes a lesser number but still enough to make it evident that the union's majority status will continue. 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 by Respondent 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 Spit- zer visited the agency early in August 1970, in con- nection 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 usu- al." 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 Spit- zer explained the family operations in developing dealer franchises , and said the Spitzers had taken over the Chrysler-Plymouth franchise there. He an- nounced that the employees would receive extra pay in their paychecks coming out that day. He also de- scribed 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 of 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 SPITZER AKRON, INC. 23 Ramnytz, business agent of the Union, who said he would contact Respondent about a contract. Ram- nytz 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 busi- ness on September 4 it had completed hiring its work force, which consisted of approximately 10 employ- ees, substantially all of whom had formerly worked for East Town. Under the teaching of Burns, Respon- dent 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 representative. It was not free thereafter to establish or change conditions or employment for unit employees without bargaining with the Union.' Moreover, from the facts detailed above, it is ap- parent that as of September 4 Respondent had plan- ned to and had, indeed, retained substantially all of the employees in the unit and at such time "it was appropriate to have him initially consult with the em- ployees' bargaining representative before he fixe[d] 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. In its memorandum, the Company contends that the second major issue is whether Respondent failed to bargain in good faith by requesting that the Union seek a Board-conducted election. In this regard, the Board is mindful that under the holding of Joy Silk Mills, Inc. v. N.L.R.B., 185 F.2d 732 (C.A.D.C., 1950), cert. denied 341 U.S. 914 (1951), an employer may refuse to bargain and insist on a representation election when motivated by a good-faith doubt as to the union's majority status. The question whether that doubt is a bona fide one is examined in light of all the facts and circumstances relating to the case. After another review of the record, we find no ob- 5 Ranch- Way, Inc, 203 NLRB 911 (1973). jective facts to support the Company's asserted doubt of majority. Mere passage of time since the certification and the possibility of employee turnover in the interim provide no reasonable basis for doub- ting the Union's continued majority. On the con- trary, recognition of the bargaining representative over a number of years and execution of bargaining agreements by two successive operators of the dealer- ship, without challenge, support rather than rebut the presumption of continuing majority status. The Union was not required to reestablish its majority through a Board-conducted election on the proffer of new authorization cards, and no adverse inference may be drawn from its failure to do so. Further, the Company's unilateral changes on Sep- tember 4 and the failure of the employees to protest them as a derogation of the Union do not provide a reasonable good-faith basis for doubting the Union's majority. We agree with the Administrative Law Judge that mere silence of unit employees about the Union or their adherence to it when hearing wage raises and other increased benefits announced for the first time is an equivocal circumstance which falls far short of any reasonable indication that the employ- ees no longer desired union representation; even if that inference could be justified on any theory, any disaffection of the employees at that point could well be attributed to the coercive effects of a sudden uni- lateral grant of increased wages and benefits which violated both Section 8(a)(5) and (1) of the Act. Moreover, the record affirmatively shows the em- ployees' adherence to the Union and the Company's awareness of their support. Thus, in the week before the Company's refusal to bargain and the resulting strike, Service Manager Wolfe referred to the opera- tion as a "union shop," whereupon the employees responded that if they did not get a "union contract" they would "hit the bricks." Also, testimony of Union Steward Andy Parks shows that about Sep- tember 13 or 14 Sales Manager Guy announced to Parks that he was going to discharge two unit em- ployees because they could not do their work. He asked Parks for his comment, and Parks replied he (Guy) had a right to discharge anyone he wanted to at any time, but that Parks would have to report it to the business agent of the Union and "You can take it from there." Neither employee was discharged. Fi- nally, immediately after the Company's refusal to bargain, the employees voted to strike, and 10 out of a unit of 12 or 13 employees joined the strike and walked the picket line. When Business Agent Ram- nytz met with President Spitzer after the onset of the strike and again urged recognition of the Union, as- serting that the employees still wanted it to represent them, Spitzer did not question the Union's majority, 24 DECISIONS OF NATIONAL LABOR RELATIONS BOARD but merely expressed the view that the employees did not need a union. Accordingly, we find the Respondent's "alleged `good faith' doubt of the union's majority representation" is without the sup- port of any objective circumstances. The Company's memorandum states the third ma- jor issue for consideration concerns the matter of re- instatement and entitlement to backpay . We have re- viewed the record in light of the Company 's position and we reaffirm the remedy provided in our original Decision and Order. On March 26, 1971 , the Union notified the Com- pany, by letter, that all 10 strikers, who were named in the letter, offered unconditionally to return to work. The Company subsequently sent a letter to all the strikers, requesting that they report in person. When eight of the strikers reported to Alan Spitzer, Spitzer told them that he was unable to interview them that night without the presence of the service director. Arrangements were made to interview the reporting strikers when they appeared for picket duty the following day. In subsequent interviews, Alan Spitzer announced that the strikers would have to make out new employee application forms before they could be hired , since they were considered new employees. The strikers rejected Spitzer's condition that they return to work as newly hired employees and continued the strike . Thereafter, union counsel received a letter from the Company's attorney stating that the strikers were not being considered as new employees, and that the Company wanted them to fill out the employment forms merely to determine on what date they would be available to return to work. Subsequently, two employees returned to work. As we earlier found and as the circuit court earlier agreed, there is no indication that unconditional of- fers of reinstatement were ever made to the other eight strikers. Our Order requires the Company to offer each striker to whom it has not made an uncon- ditional offer of reinstatement immediate and full re- instatement to his former job or, if that job no longer exists, to a substantially equivalent position, and to make whole all its employees who went on strike for any loss of earnings they have suffered from the time of their unconditional application for work on March 26, 1971 , until such time as the Company un- conditionally offers them reinstatement. According- ly, we reaffirm the findings, conclusions, and remedy provided in our original Decision and Order.