Pussycat Theatre

PUSSYCAT THEATRE American Theatre Corporation d/b/a Pussycat The- atre; Downtown Books, Inc.; and Global Industries, Inc. and International Alliance of Theatrical Stage Employees and Moving Picture Machine Operators of the United States and Canada , Local No. 343, AFL-CIO. Case 17-CA-6199 September 15, 1975 DECISION AND ORDER BY CHAIRMAN MURPHY AND MEMBERS FANNING AND PENELLO On May 13, 1975, Administrative Law Judge Ber- nard Ness issued the attached Decision in this pro- ceeding. Thereafter, Respondent filed exceptions 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 conclusions of the Administrative Law Judge and to adopt his recommended Order, as modified herein.' ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Re- lations Board adopts as its Order the recommended Order of the Administrative Law Judge as modified below and hereby orders that Respondent, American Theatre Corporation d/b/a Pussycat Theatre, Oma- ha, Nebraska, Downtown Books, Inc., Omaha, Ne- braska, and Global Industries, Inc., Atlanta, Geor- gia, their officers, agents, successors, and assigns, shall take the action set forth in the said recommend- ed Order as so modified: 1. Substitute the following for paragraph 1(b): "(b) Making changes in wages, rates of pay, and other terms and conditions of employment of its em- ployees in the above-described unit without first con- sulting with and bargaining with the Union concern- ing such contemplated changes." 2. Substitute the attached notice for the Adminis- trative Law Judge's notice. ' We are clarifying the Order to conform with the Administrative Law Judge's proposed remedy. APPENDIX 295 NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government WE WILL NOT refuse to recognize and bargain with International Alliance of Theatrical Stage Employees and Moving Picture Machine Opera- tors of the United States and Canada, Local No. 343, AFL-CIO, as the exclusive representative of the employees in the unit described below, concerning rates of pay, wages, hours of em- ployment and other conditions of employment: All motion picture projectionists employed by American Theatre Corp. d/b/a Pussycat The- atre, at Omaha, Nebraska, excluding office clerical employees, guards, professional em- ployees and supervisors as defined in the Act. WE WILL NOT make changes in wages, rates of pay, and other terms and conditions of employ- ment of our employees in the above-described unit without first consulting with and bargaining with the Union concerning such contemplated changes. WE WILL NOT discharge employees or other- wise discriminate against them because of their membership in, or activities on behalf of, the above-named Union, or any other labor organi- zation. WE WILL NOT in any other manner interfere with, restrain, or coerce our employees in the exercise of their right to self-organization, to form labor organizations, to join or assist the above-named Union or any other labor organi- zation, to bargain collectively through represen- tatives of their own choosing, to engage in con- certed activities for the purposes of collective bargaining or other mutual aid or protection, or to refrain from any and all such activities. WE WILL offer Elei Florence and Edward Force immediate and full reinstatement to their former jobs or, if their jobs no longer exist, to substantially equivalent positions, without preju- dice to their seniority or other rights and privi- leges previously enjoyed, and make them whole for any loss of earnings they may have suffered as a result of their discriminatory discharges with interest at 6 percent per annum. WE WILL bargain in good faith, upon request, with the Union as the exclusive representative of the employees in the aforesaid appropriate unit, concerning wages, hours, and other terms or conditions of employment, and embody in a signed agreement any understanding reached. WE WILL revoke the unilateral changes made 220 NLRB No. 46 296 DECISIONS OF NATIONAL LABOR RELATIONS BOARD in the wage rates existing immediately prior to March 4, 1974. AMERICAN THEATRE CORPORATION D/B/A PUSSYCAT THEATRE; DOWNTOWN BOOKS, INC; AND GLOBAL INDUSTRIES, INC. DECISION STATEMENT OF THE CASE BERNARD NESS, Administrative Law Judge: Based on a charge filed on August 30, 1974, by International Alliance of Theatrical Stage Employees and Moving Picture Ma- chine Operators of the United States and Canada, Local Union 343, AFL-CIO, herein called the Union, the com- plaint herein was issued on December 19, 1974. The com- plaint, as amended at the hearing, alleges that American Theatre Corporation d/b/a Pussycat Theatre, Downtown Books, Inc., and Global Industries, Inc.,' hereinafter re- ferred to individually as American Theatre, Downtown Books, and Global Industries, respectively, and collectively as the Respondent, constitute a single employer within the meaning of the Act. The complaint further alleges that the Respondent committed unfair labor practices in violation of Section 8(a)(1), (3), and (5) of the Act. More specifically, the complaint alleges the Respondent discharged Elei Flor- ence and C. Edward Force on March 4, 1974, because of their membership and activities on behalf of the Union in violation of Section 8(a)(1) and (3) of the Act. Further, the complaint alleges that, in violation of Section 8(a)(5) and (1) of the Act, the Respondent, on March 4, 1974, without prior notice unilaterally abrogated or canceled an oral col- lective-bargaining agreement with the Union. Respondent has denied the commission of any unfair labor practices. Pursuant to notice a hearing was held before me on Febru- ary 19 and 20, 1975, at Omaha, Nebraska. Upon the entire record,2 including my observation of the witnesses, and after due consideration of the briefs filed by the General Counsel, the Charging Party and the Respon- dent, I make the following: FINDINGS OF FACT 1. JURISDICTION Jurisdiction in this case depends on whether or not the entities named, Global Industries, American Theatre, and Downtown Books, constitute a single employer within the meaning of the Act. For if Global Industries is not to be included, the Board's standards for asserting jurisdiction have not been met. The findings concerning the operations of the corporate entities named herein are based on stipula- tions, exhibits, and, to some extent, upon the vague and generalized testimony of Richard Berry, the manager of the 1 The named companies conform to the General Counsel's motion grant- ed at the hearing. 2 As requested by the General Counsel in his brief, his unopposed motion to correct the transcript as follows is granted : P 139 1 8 from "local" to "Global." P. 224, II. 16-17 from "corporate industries" to "corporations." Pussycat Theatre and the bookshop. No other witnesses testified concerning the operations or the relationship of the companies toward each other. Global Industries, Inc., is a Georgia corporation main- taining offices in Atlanta, Georgia, where it is engaged in the business of investing in and owning corporations. Dur- ing all times material herein, it wholly owned various cor- porations engaged in the business of operating adult movie theatres and adult book stores located in various States, including Alaska, Florida, Georgia, Illinois, Indiana, Loui- siana, Nebraska, North Carolina, Oklahoma, and Texas. Included among the wholly owned entities are Johnny Rebb's Book Store in Atlanta, Georgia, American Theatre and Downtown Books in Omaha, Nebraska, and Panama Books in Florida. Global Industries annually receives divi- dend revenues in excess of $50,000 from its subsidiary cor- porations located outside the State of Georgia. Its gross receipts for the tax year ending November 30, 1973, amounted to $1,408,059.60. It annually purchases goods and materials valued in excess of $50,000 from suppliers located outside the State of Georgia. American Theatre Corporation, incorporated in Nebraska and doing business as Pussycat Theatre, owns and operates a theatre by the same name in Omaha, Nebraska, where it shows adult movies to the restricted public. Its gross receipts for the tax year ending November 30, 1973, amounted to $112,552.75. It annually purchases goods and materials valued in excess of $10,000 from sources outside the State of Nebraska for use at its Omaha, Nebraska, location. Downtown Books, Inc., also a Nebraska corporation, is engaged in the retail sale and/or rental of books and magazines and the sale of various novelty items to the public. Its place of business is located in the lobby of the Pussycat Theatre in Omaha. Downtown Books' gross receipts for the like period amounted to $172,319.21. American Theatre and Downtown Books opened for business in early February 1971 in downtown Omaha in a building remodeled as a theatre. Sometime in December 1970, according to Berry's account, while he was employed as manager for Johnny Rebb's Book Store in Atlanta,3 Robert Mitchum told him of the theatre and book store to be opened in Omaha and hired him to manage the opera- tion-the theatre and the book shop.° Joint Exhibit 1, rep- resenting copies of annual registrations filed with Georgia's Secretary of State, shows that Mel Friedman was president of Global Industries from 1970-74; Joint Exhibit 4, copy of a Nebraska occupation tax report filed in August 1974, shows the same Mel Friedman as president of American Theatre; Joint Exhibit 5, a like Nebraska report filed in August 1974, shows Friedman as secretary of Downtown Books and Ralph Mitchum who hired Berry for Panama Books, is shown to be president of Downtown Books. Rob- ert Mitchum is shown on Joint Exhibit 2, a copy of the annual registration filed with the Georgia Secretary of State, to have been secretary-treasurer of Union Industries, 3 As noted above, this business was also wholly owned by Global Indus- tries At the time of the hearing, Berry was then employed in a supervisory capacity with Panama Books, Inc., in Jacksonville, Florida, another wholly owned corporation of Global Industries He was hired by Ralph Mitchum, Robert's brother, to work at Panama Books. PUSSYCAT THEATRE 297 Inc., during the period of 1970-73 and Mel Friedman ap- pears as president during the period 1970-74. Downtown Books has been wholly owned by Union Industries which, in turn, has been wholly owned by Global Industries. American Theatre obtains its film from Global Leasing Company. Joint Exhibit 3 shows it is located at the same address in Atlanta as Global Industries. It also shows Friedman listed as its president in 1973. Berry has been neither an officer nor a director of any of the entities in- volved. He has been the top operating official situated in Omaha. The corporate offices for all the entities are locat- ed in the same building in Atlanta. The building is owned by Global Industries. The subsidiaries use a common ac- counting service located in Atlanta. Berry testified he sent timesheets to the "accounting office" in Atlanta and pay- checks would be sent from Atlanta. The checks were signed by Mel Friedman. Berry also sent the personnel forms to Atlanta.5 Bills for debts incurred by Berry for American Theatre or Downtown Books would be sent by Berry to Atlanta from where the bills were paid. Before Berry could make a sizeable purchase, e.g., the purchase of a prodjector, he would have to clear it with Julius Daven- port. Berry testified he was not told the specific wage rates he could pay employees but he was instructed by Daven- port at the time he assumed the managerial position in Omaha to pay a reasonable rate and to consider the rates paid in the area. However, the credited testimony of Earl Wise, the Union's president, described more fully below, shows that in 1972, when he sought to get an increase in pay and vacation benefits for the projectionists, Berry re- sponded he did not have the authority and "that he would have to contact the people in Atlanta, Georgia." The jurisdictional issue would be more readily suscepti- ble to resolution had there been testimony from the corpo- rate officials located in Atlanta. However, based on the record as made, it appears to me that the evidence never- theless is sufficient to support a finding that Global Indus- tries, together with its wholly owned subsidiaries, consti- tute a single-integrated enterprise and, as such , is a single employer for purposes of asserting jurisdiction. As stipulat- ed by the parties, Global Industries is in the business of investing and owning corporations engaged in the same type of business-operating adult movie theatres and book shops. These enterprises are scattered throughout a num- ber of States in the United States and each is set up as a separate corporation. It appears, as in the case of the Oma- ha operations, when Global Industries decided in 1970 to open the theatre and book shop, the two corporations, American Theatre and Downtown Books, were formed. While Berry was hired to manage the day-to-day opera- tions of the theatre and the book shop, the overall direction of the Omaha operation emanated from the same source- Global Industries in Atlanta. From this record, it appears that the wholly owned subsidiaries were themselves mere shells, the corporate forms being largely paper realities that do not reflect the business realities. The Respondent's counsel argues in his brief that the formulation of labor policies of American Theatre started and ended with Berry. The evidence as described above does not support this con- tention. Berry did run the daily operations but evidence discloses major decisions were controlled by the officials in Atlanta. Berry received instructions, albeit general, to re- strict wages to that paid in the Omaha area. And, in 1972, faced with a demand for a wage increase and vacation benefits, he said he did not have such authority and would have to discuss it with the management in Atlanta. But be that as it may, Berry may be likened to that of a general manager of a facility for absentee owners. And the owner in this case was Global Industries. The transparency of the corporate veil becomes apparent when we look upon the manner in which Berry's transfers were effected. Berry in 1970 was manager of Johnny Rebb's Book Store in Atlan- ta, a wholly owned subsidiary of Global Industries. At that time he was hired by Robert Mitchum to manage a theatre and book shop to be opened in Omaha, Nebraska. The exhibits do not show who the officers were of American Theatre and Downtown Books in 1970-but at that time Robert Mitchum was secretary of Union Industries which was wholly owned by Global Industries. Downtown Books in turn became wholly owned by Union Industries. And when Berry shifted from the Omaha operation in the latter part of 1974 to Panama Books in Jacksonville, Florida, as a supervisor, that change was made by Ralph Mitchum. Pan- ama Books was a wholly owned subsidiary of Global In- dustries. Ralph Mitchum in 1974 was president of Down- town Books. It should also be noted that Davenport, although not specifically identified as an officer or director of any of the entities, was described as being associated with Johnny Rebb's and also was one of the individuals, together with Mel Friedman, from whom Berry received his orders while manager of the Omaha operations. The figure of Mel Friedman of course appears in all the entities herein involved as an officer during this entire relevant period. Accordingly, on the facts presented, I find and conclude, contrary to the Respondent's position, that Global Indus- tries, Inc., American Theatre Corporation, d/b/a Pussycat Theatre and Downtown Books, Inc., are a single employer engaged in a single-integrated enterprise and that it will effectuate the purposes of the Act to assert jurisdiction .7 II. THE LABOR ORGANIZATION INVOLVED The complaint alleges, the answer admits, and I find that the Union is a labor organization within the meaning of Section 2(5) of the Act. s Employment applications , payroll information , and other related per- sonnel information. 6 Davenport does not appear on any of the exhibits to have been an officer of any of the entities . However, based on the record testimony, it appears he was "enmeshed" as an operating official of Global Industries. Thus, he is located in the same Atlanta office As Berry testified , Davenport was also associated with Johnny Rebb's. Berry would discuss problems with either Davenport or Friedman. III. THE ALLEGED UNFAIR LABOR PRACTICES The General Counsel contends a bargaining relationship was established between the Respondent and the Union in 7 Chicago Theatrical Protective Union Local No 2, 1 A. T S F (Midwest News Reel Theatres, Inc), 151 NLRB 857 (1965); Cedar Hills Theatres, Inc, et al, 168 NLRB 871 (1967). 298 DECISIONS OF NATIONAL LABOR RELATIONS BOARD January 1971 and an oral collective-bargaining agreement, although limited in scope , was reached at that time cover- ing the projectionists at the Pussycat Theatre. The Respondent's conduct in discharging the two projection- ists, Elei Florence and Edward Force on March 4, 1974, forms the basis for the General Counsel's unfair labor practice allegations. The General Counsel contends the Respondent discharged the two individuals because of their support for the Union and because of Respondent's determination to repudiate the collective -bargaining rela- tionship with the Union in violation of Section 8(a)(1) and (3) of the Act. The General Counsel further contends that when the Respondent discharged the two projectionists and thereafter hired others at a lower rate the Respondent unilaterally abrogated and/or unilaterally repudiated the agreement reached in 1970 thereby effecting the changes in the terms and conditions of employment of the employees. The Respondent admits the appropriateness of the bar- gaining unit consisting of the projectionists at the Pussycat Theatre. The Respondent argues that no collective-bar- gaining relationship ever existed-that the only agreement entered into consisted of an oral agreement for the Union to refer projectionists for 1 year commencing on January 8, 1971. He says further that even this limited agreement did not extend beyond the 1-year period. Thus, runs his argu- ment, there was no unilateral cancellation of any existing collective-bargaining agreement in 1974. The Respondent advances two reasons for the discharge of Florence and Force-incompetency and the desire to cut costs by hiring others at a lower rate of pay than that paid to the alleged discriminatees. Berry came to Omaha in December 1970 to assist in the remodeling of the building to house the theatre and the book shop. The operation opened to the public in early February 1971. On December 14, 1970, Earl Wise the Union's president and Floyd Gibson, business representa- tive for the Union, introduced themselves to Berry and said they wanted to negotiate a contract for projectionists when the theatre opened. Berry said he would contact the Union at a later date. On January 8, 1971, the union representa- tive met again with Berry . Berry said he intended to run the film for 16 hours a day. Wise informed Berry the Omaha area wage rate was $5 an hour. Berry said he couldn't and wouldn't pay that rate. When Wise then countered with $4.50 an hour, Berry agreed. Wise then proposed a 2-week vacation for projectionists after 1 year's service and a writ- ten contract but Berry rejected both proposals. Berry agreed union representatives would have visitation rights to inspect the projection room. Berry said the film would run from 9:30 a.m. to 1 a.m. the following morning. The Union said it would furnish projectionists for a 1-year peri- od. Following this January 8 meeting the Union thereafter furnished the projectionists as needed. On October 14, 1972, Wise accompanied by two other union representa- tives, went to see Berry and requested a wage increase to $5 an hour and a 2-week vacation which Berry had rejected in January 1971. Berry responded he did not have the author- ity to grant the request but he would "contact the people in Atlanta, Georgia" and would respond to the Union at a later date. On November 14, 1972, the parties met again. This meeting had been called by Berry who then asked Wise if he had any objection to the projectionists submit- ting to a lie detector test. Wise offered no objection provid- ed the employees were willing." Wise asked Berry if he had heard from Atlanta regarding the Union's proposals for a wage increase from $4.50 to $5 and the 2-week vacation benefit. Berry replied he couldn't agree to either proposal? Despite Berry's rejection of the Union's proposals the Union continued to furnish projectionists when needed at $4.50 an hour. All projectionists hired were sent by the Union.10 During the entire relevant period, two full-time pro- jectionists were used at the theatre, one on each shift at $4.50 an hour, as agreed upon between the Union and the Respondent. Edward Force was one of the two original projectionists hired. He was introduced to Berry by Gibson and began working at $4.50 an hour when the theatre first opened in February 1971. He voluntarily quit in August 1972. In January 1973 he received a call from Gibson and then returned to work for the Respondent. During his peri- ods of employment with Respondent, he maintained a full- time job elsewhere. Force had been working in the industry under a Union permit since 1961. Elei Florence, a union member, was referred by Gibson and began his employ- ment with Respondent as a projectionist at $4.50 an hour in June 1971. On March 4, 1974, Berry telephoned Flor- ence at home between 7:30 and 8 a.m. Florence was sched- uled to report for work at 9:30 a.m.. Berry said there was no need for him to report any more-"he would be just going non-union personnel." When Florence went to the theatre later to pick up his personal effects, he asked Berry why he was going nonunion. Berry responded he wasn't mad at anyone-he had to cut expenses. Immediately after Berry notified Florence of his discharge, Florence called Gibson and told him what had occurred. At about 9:30 that morning, Berry telephoned Wise whose credited testi- mony is reported below: He told me that he had discharged the men and I asked him why. He said that he just no longer needed the union down there. I said, "Well, certainly we could come down and discuss it with you." He relayed to me that he could get projectionists at $2 or $2.50 an hour, and that he had to cut down on overhead and he just refused to talk to us. I told Mr. Berry that if we-it would be a point to talk about, and he told me that he knew we would not work for that kind of money. Force was at work at his other place of employment on March 4 when the news of his termination was relayed to him by the Union. That evening he went to the theatre to collect his personal things. Berry was there but they did not No explanation was offered for the lie detector test. The events recited above are based on the credited testimony of Earl Wise. Berry's testimony throughout was replete with vagaries , generalities, inconsistencies , and, in most instances, he did not recall even the substance of conversations 10 At various times during the period 1971 until the March 4 discharges, the Union had referred about six projectionists, including the two alleged discriminatees PUSSYCAT THEATRE engage in any conversation. Florence and Force were re- placed with two other individuals Berry hired at $3 and $3.50 an hour. Berry testified he decided to discharge Florence and Force for two reasons-because he had to cut costs and because the two individuals were not performing to his sat- isfaction. He stated he had received a call from either Da- venport or Friedman that he should reduce his costs at the theatre. He decided he could hire projectionists at a lower wage scale than that being paid to Florence and Force. As stated, above, Berry's testimony was replete with vagaries and inconsistencies. From his confused testimony, it is im- possible to determine whether he had hired or even talked to replacements before discharging Florence and Force on Monday, March 4, 1974. At one point in his testimony, he stated he decided on Sunday, March 3, to discharge them. Yet elsewhere in his testimony he testified he lined up the replacements the previous Friday or Saturday. And still elsewhere he testified he didn't recall if he talked to anyone before he decided to discharge the two discriminatees. At one point he testified the replacements started working on March 4 and yet elsewhere when asked if he had anyone to replace Florence and Force on March, he stated, "Some- one possibly to take their place." He was unable to recall with certainty that he called anyone prior to March 4 and speculated he may have operated the projectors himself on both shifts until replacements were put on. With respect to the Respondent's reliance on the failure of Florence and Force to perform their jobs properly, Berry explained that they failed to keep the projectors clean. He added that he also found Force asleep or reading a book in the projection booth a number of times, with a blank screen, attributable to Force's failure to switch projectors. Berry testified he constantly asked them to keep the projectors clean and to keep them oiled. But he told this to all the projectionists over the 3-year period.' And, according to Berry, over this entire 3-year period, the projectors were never kept cleaned or oiled. He testified he found Force asleep or reading a book with a blank screen because Force neglected to switch the projectors. It will be recalled Force worked for the Respondent during two periods-from February 1971 to August 1972 and from January 1973 to March 4, 1974. Berry said he found Force asleep or reading a book several times-he guessed at anywhere from 2 to 10 times. This occurred several times during Force's initial period of em- ployment and also when he returned . He was unable to recall when the last such incident occurred but stated he spoke to Force on each occasion . Force, in his testimony admitted that on two occasions Berry came into the booth when he had fallen asleep and on two occasions he had been reading when he had failed to switch the projectors. According to Force's credited testimony, he read a book frequently while on duty and Berry never said anything about it. According to Force, on the occasions the screen was blank, Berry only came in and told him of the blank screen but did not refer to his being asleep or reading a book. The first time Berry came in while he was asleep or reading with a blank screen was during his first period of 11 At least four other projectionists had been employed at the theatre at one time or another during this 3-year period 299 employment. The last occasion was in or about May 1973. Both Florence and Force credibly testified they cleaned the projectors routinely and Berry at no time directed them to clean the machines nor did Berry complain the ma- chines were dirty. To prop up its defense relating to the alleged failure of the discriminatees to maintain the projectors properly, the Respondent called Delbert Sayles as a witness. Sayles was a projectionist in another theatre and also repaired pro- jectors as a sideline. He testified he first received a call from Berry on a Sunday. Berry asked him to repair the projectors and said he had experienced breakdowns with the machines several times. Sayles said he took one pro- jector at a time and loaned Berry a spare. The first one he had for 2 to 3 weeks before he returned it to Berry and then he took the second one. Sayles testified he found each of the machines dirty and bone dry of oil. He was unable to state the date when Berry first called him to repair the machines. He also testified that about this same time Berry also inquired if he knew of any projectionists who wanted to work at the theatre. Sayles referred his son and, accord- ing to Sayles, his son began working for Pussycat several days later. Although somewhat fuzzy in the record, this much is clear. Sayles' son began working for the Pussycat after Florence and Force were discharged and it wasn't until after Sayles' son began working there that Sayles re- ported to Berry what was wrong with the machines. Concluding Findings I find, in agreement with the General Counsel, that a collective-bargaining relationship was established in 1971 whereby the Union became the bargaining representative for the projectionists employed at the Pussycat Theatre. An agreement was reached whereby the Union would refer projectionists and the wage scale would be $4.50 an hour. The parties further agreed the Union would have visitation rights to inspect the projection booth to insure proper working conditions were maintained. This represented the entire agreement between the parties, the Respondent hav- ing rejected other union proposals and refusing to agree to a written contract. Although the agreement reached did not encompass the wide range of terms and conditions of employment normally to be found in a written contract between a union and an employer, there nonetheless ex- isted an agreement establishing specific terms of employ- ment. Although the agreement was oral, rather than writ- ten, this does not change the nature of the agreement reached. I reject the Respondent's argument that, since the Union agreed in January 1971 to furnish projectionists for 1 year, any agreement reached expired 1 year thereafter. For it is clear that the parties intended to continue the agreement thereafter indefinitely and the Respondent con- tinued to recognize the Union as the collective-bargaining representative for the projectionists. Thus in November 1972 Berry requested approval from the Union to have the employees submit to a lie detector test. The Union contin- ued to furnish projectionists beyond the 1-year period. And also in 1972, the parties discussed additional benefits for the employees-a wage increase and vacation benefits. The Respondent did not agree to the Union's proposals and the 300 DECISIONS OF NATIONAL LABOR RELATIONS BOARD oral agreement remained in effect thereafter . In March 1974, in disregard of the agreed-upon terms and conditions of employment, albeit orally, the Respondent unilaterally reduced the wage rates of the unit employees and dis- charged the employees then employed in the unit. Al- though it may be said the oral agreement was open-ended with no definite expiration term, it does not follow that the Respondent was free to pursue a change in the agreed- upon terms or conditions of employment which had en- dured for more than 3 years without first discussing this contemplated change with the Union and seeking agree- ment through the collective-bargaining process. There was no attempt here to discuss the matter with the Union. Rather, Berry refused to discuss the change in the wage rate with Wise. He, in effect, announced he was no longer recognizing the Union because it suddenly was too costly to deal with the Union. There was no showing that the Respondent was so financially distressed, if at all, as to require such immediate action without taking the time to first notify and consult with the Union regarding the ex- isting wage scale. This was a matter which the Respondent was statutorily obligated to bargain with the Union in ad- vance and not as a fait accompli. And this is so regardless of whether the Respondent was governed solely by eco- nomic reasons where, as in the present case, the circum- stances did not excuse such unilateral action . Such conduct constitutes a complete rejection of the collective -bargain- ing process and a circumvention of the duty to negotiate which frustrates the objectives of the obligations arising under Section 8(a)(5) of the Act. The Respondent contends that one of the reasons for the discharge of Florence and Force was because of their in- competence. This alleged incompetence embraced their failure to properly maintain and clean the projectors and, in the case of Force, his tendency to fall asleep or read a book, resulting in the projector running through an entire reel leaving the screen with no projected image. I find Berry's testimony in support of these reasons unworthy of belief. The credited testimony shows that Berry never di- rected the projectionists to clean the machines nor did he complain to them that the machines were dirty. I find in- credible of belief Berry's testimony he gave such directions and complained constantly to all the projectionists about the maintenance of the machines and his assertions that the machines were never cleaned or oiled over the entire 3-year period. Nor can I place any reliance upon Sayles' testimony to support the Respondent 's defense. For it is clear, according to Sayles' testimony, that Berry told him there had been breakdowns with the projectors several times and was unaware of the reasons for the malfunction. It was after the discriminatees had been discharged that Berry was first informed the projectors were not oiled. And as to Respondent's contention concerning Force 's inatten- tion to the operation of the projector, the credited testimo- ny shows this occurred twice during Force's first period of employment with the Respondent. Yet he was reemployed. Twice more it occurred when Force returned to work. The last such incident occurred in May 1973, almost a year before his discharge. In sum, I am persuaded that the above reasons advanced by Respondent for discharging g y p e nion, is Florence and Force were pretextual in nature and seized distinction without a difference in the circumstances of this case. upon as afterthoughts in a vain attempt to create a legiti- mate justification for its action in terminating their em- ployment. I have no doubt that the Respondent was interested in reducing the overhead of the operation. But, as Berry stat- ed, this was a concern to him during the entire period he was manager. There has been many a case over the years where an employer, in an effort to reduce costs, runs afoul of its statutory obligations under the Act by unlawfully refusing to bargain with the collective-bargaining represen- tative of its employees or by unlawfully discharging sup- porters of a union. The pattern of Berry's conduct discloses not only an intent to reduce costs but also a design to shed the Respondent of a bargaining relationship with the Union of 3 years' standing which he felt required him to retain employees at a wage scale which he intended to low- er. Aware that Florence and Force were members of the Union 12 Berry terminated them because of their union af- filiation leaving him an open field to hire replacements at a lower rate. Berry told both Wise and Florence in substance he would no longer recognize the Union. Interestingly, Berry discharged Florence and Force without even inquir- ing of them whether they would continue their employ- ment at a reduced hourly rate. Accordingly, I find that Respondent's discharge of Florence and Force on March 4, 1974, violated Section 8(a)(1) and (3) of the Act. CONCLUSIONS OF LAW 1. Respondent (Global Industries, Inc., American The- atre Corp. d/b/a Pussycat Theatre and Downtown Books, Inc.) is, and at all times material hereto has been, an em- ployer engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 2. The Union is a labor organization within the meaning of Section 2(5) of the Act. 3. All motion picture projectionists employed by Ameri- can Theatre Corp. d/b/a Pussycat Theatre, Omaha, Ne- braska, excluding office clerical employees, guards, profes- sional employees and supervisors as defined in the Act, constitute a unit appropriate for the purposes of collective bargaining within the meaning of Section 9(b) of the Act. 4. At all times material herein, the Union has been the exclusive bargaining representative of the employees in the aforesaid unit within the meaning of Section 9(a) of the Act. 5. By unilaterally reducing the wages of the employees in the aforesaid unit and by refusing to afford continued recognition to the Union on March 4, 1974, the Respon- dent has thereby refused to bargain collectively with the Union and has engaged in unfair labor practices in viola- tion of Section 8(a)(5) and (1) of the Act. 6. By terminating Elei Florence and Edward Force be- cause of their membership and support of the Union, the Respondent has thereby discouraged membership in a la- bor organization and engaged in unfair practices within the meaning of Section 8(a)(3) and (1) of the Act. 7. The foregoing unfair labor practices affect commerce 12 Althou h Force held onl a ermit from th U th is only a PUSSYCAT THEATRE 301 within the meaning of Section 2 (6) and (7) of the Act. THE REMEDY Having found that the Respondent has engaged in cer- tain unfair labor practices, I will recommend that it be ordered to cease and desist therefrom and to take certain affirmative action designed to effectuate the policies of the Act. Since the Respondent, in derogation of its statutory obli- gations, withdrew recognition from the Union, unilaterally reduced the wage rates of its employees without first bar- gaining with the Union, and deeming it appropriate that the employees be reinstated to their employment status they enjoyed prior to the Respondent's unilateral action, I shall recommend that the Respondent be ordered to recog- nize the Union's representative status and to rescind the unilateral change in the wage rates and to restore retroac- tively the wage rate in effect prior to such unilateral action. As the Respondent unlawfully discharged Elei Florence and Edward Force, I shall recommend that Respondent be ordered to offer them full and immediate reinstatement to their former positions or, if such positions no longer exist, to substantially equivalent positions, without prejudice to their seniority or other rights and privileges and to reim- burse them for any loss of pay they may have suffered. Backpay shall be computed on a quarterly basis, plus inter- est at 6 percent per annum, as prescribed in F. W. Wool- worth Company, 90 NLRB 289 (1950) and Isis Plumbing & Heating Co., 138 NLRB 716 (1962), from the date of dis- charge to the date reinstatement is offered. Upon the foregoing findings of fact and conclusions of law, and upon the entire record, and pursuant to Section 10(c) of the Act, I hereby issue the following recommend- ed: ORDER 13 Respondent, Global Industries, Inc., American Theatre Corp. d/b/a Pussycat Theatre and Downtown Books, Inc., Omaha, Nebraska, their officers, agents, successors, and assigns, shall: 1. Cease and desist from: (a) Refusing to recognize and bargain with International Alliance of Theatrical Stage Employees and Moving Pic- ture Machine Operators of the United States and Canada, Local No. 343, AFL-CIO, as the exclusive representative of the employees in the unit described below, concerning rates of pay, wages, hours of employment, and other condi- tions of employment: All motion picture projectionists employed by Ameri- 13 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 Sec. 102.48 of the Rules and Regulations, be adopted by the Board and its find- ings, conclusions, and Order, and all objections thereto shall be deemed waived for all purposes can Theatre Corp. d/b/a Pussycat Theatre, at Omaha, Nebraska, excluding office clerical employees, guards, professional employees and supervisors as defined in the Act. (b) Making changes in wages, rates of pay, and other terms and conditions of employment of its employees in the above-described unit during the term of its agreement with the Union without its consent or thereafter without first consulting with and bargaining with the Union con- cerning such contemplated changes. (c) Discouraging membership in the Union, or any other labor organization, by discriminatorily discharging its em- ployees or by discriminating in any other manner with re- spect to their hire or tenure of employment or any term or condition of employment. (d) In any other manner interfering with, restraining, or coercing employees in the exercise of the rights guaranteed them in the Section 7 of the Act. 2. Take the following affirmative action which is neces- sary to effectuate the policies of the Act: (a) Bargain in good faith, upon request, with the Union as the exclusive representative of the employees in the aforesaid appropriate unit, concerning wages, hours, and other terms or conditions of employment, and embody in a signed agreement any understanding reached. (b) Revoke the unilateral changes made to the wage rates existing immediately prior to March 4, 1974. (c) Offer Elei Florence and Edward Force immediate and full reinstatement to their former positions or, if their jobs no longer exist, to substantially equivalent positions, without prejudice to their seniority or other rights and priv- ileges and make them whole for any loss of earnings they may have suffered in the manner set forth in the section of this Decision entitled "The Remedy." (d) Preserve and, upon request, make available to the Board or its agents, for examination and copying, all pay- roll records and reports, and all other records necessary to analyze and compute the amount of backpay due under the terms of this recommended Order. (e) Post at its place of business in Omaha, Nebraska, copies of the attached notice marked "Appendix." 14 Cop- ies of said notice, on forms provided by the Regional Di- rector for Region 17, after being duly signed by Respondent's authorized representative, shall be posted by Respondent immediately upon receipt thereof, and be maintained by it for 60 consecutive days thereafter, in con- spicuous places, including all places where notices to em- ployees are customarily posted. Reasonable steps shall be taken by Respondent to insure that said notices are not altered, defaced, or covered by any other material. (f) Notify the Regional Director for Region 17, in writ- ing, within 20 days from the date of this Order, what steps the Respondent has taken to comply herewith. 14 In the event that the Board's Order is enforced by a Judgment of a United States Court of Appeals, the words in the notice reading "Posted by Order of the National Labor Relations Board" shall read "Posted Pursuant to a Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board "