Uncle John's Pancake House

DECISIONS OF NATIONAL LABOR RELATIONS BOARD Uncle John's Pancake House and Hotel, Motel, Restaurant Employees and Bartenders Union, Local 19, AFL-CIO. Case 20-CA-12304 September 27, 1977 DECISION AND ORDER BY CHAIRMAN FANNING AND MEMBERS JENKINS AND MURPHY Upon a charge filed on December 29, 1976, by Hotel, Motel, Restaurant Employees and Bartenders Union, Local 19, AFL-CIO, herein called the Union, and duly served on Uncle John's Pancake House, herein called the Respondent, the General Counsel of the National Labor Relations Board, by the Regional Director for Region 20, issued a complaint and notice of hearing on March 7, 1977, against Respondent, alleging that Respondent had engaged in and was engaging in unfair labor practices affecting commerce within the meaning of Section 8(a)(1) and (5) and Section 2(6) and (7) of the National Labor Relations Act, as amended, by refusing the request to bargain with the Union as the exclusive bargaining representative of the employees at its Santa Clara, California, restaurant concerning the effects of the sale of that facility. Copies of the charge, complaint, and notice of hearing before an Administrative Law Judge were duly served on the parties to this proceeding. Respondent failed to file an answer to the complaint. On June 6, 1977, counsel for the General Counsel filed directly with the Board a Motion for Summary Judgment. Subsequently, on June 16, 1977, the Board issued an order transferring the proceeding to the Board and a Notice To Show Cause why the General Counsel's Motion for Summary Judgment should not be granted. Respondent filed its response to the Notice To Show Cause on June 30, 1977, and, subsequently the General Counsel filed his reply to Respondent's response to Notice To Show Cause. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the National Labor Relations Board has delegated its authority in this proceeding to a three-member panel. Upon the entire record in this proceeding, the Board makes the following: Ruling on the Motion for Summary Judgment Section 102.20 of the Board's Rules and Regula- tions provides: Respondent contended that such evidence would show that, prior to the filing of the charge, Respondent had agreed to meet with the Union concerning the sale. 232 NLRB No. 77 The respondent shall, within 10 days from the service of the complaint, file an answer thereto. The respondent shall specifically admit, deny, or explain each of the facts alleged in the complaint, unless the respondent is without knowledge, in which case the respondent shall so state, such statement operating as a denial. All allegations in the complaint, if no answer is filed, or any allegation in the complaint not specifically denied or explained in an answer filed, unless the respondent shall state in the answer that he is without knowledge, shall be deemed to be admitted to be true and shall be so found by the Board, unless good cause to the contrary is shown. The complaint and notice of hearing served on Respondent specifically stated that unless an answer to the complaint was filed within 10 days of service thereof "all of the allegations in the Complaint shall be deemed to be admitted to be true and may be so found by the Board." Further, according to the allegations of the Motion for Summary Judgment, on April 22, 1977, counsel for the General Counsel, by telephone and by letter attached to the Motion for Summary Judgment as Appendix 4, advised Respon- dent that an answer had not been received, requested that an answer be promptly filed, and advised that, in the event an answer was not filed by close of business on May 16, 1977, he would seek summary judgment. In its response to the Notice To Show Cause, Respondent contended that the Motion for Summary Judgment should be denied because (I) Respon- dent's representative had not been notified of the filing of the charge or of the issuance of the complaint until the time for filing an answer had elapsed and the General Counsel had refused to consider evidence ' submitted by Respondent's repre- sentative after the time for filing an answer had elapsed, and (2) thereafter the General Counsel had rejected Respondent's offer to enter into an informal settlement agreement providing for bargaining con- cerning the effects of the sale because it contained no backpay remedy.2 In his reply the General Counsel contends that (1) although it is uncontroverted that the charge and complaint were served on Respon- dent, Respondent's representative was not served because the Regional Office was not informed that Respondent had a representative until June 2, 1977, more than 2 months after an answer was due; (2) Respondent participated in settlement negotiations but filed no answer to the complaint; and (3) Board 2 Respondent contends that the insistence on inclusion of a backpay remedy was improper because the complaint does not allege that Respondent discharged employees as a result of the sale. 438 UNCLE JOHN'S PANCAKE HOUSE precedent requires a backpay provision to remedy the allegations herein. 3 Attached to the General Counsel's reply, and uncontroverted by Respondent, are the following letters: (1) from Respondent's representative to the Regional Office, delivered on June 2, 1977, in which the executive director of an employers' association identified himself as Respon- dent's representative and stated that he had notified the Union of Respondent's willingness to bargain; and (2) from Respondent's representative to the Union dated January 24, 1977, stating that the letter was in regard to the charge against Respondent, that he was Respondent's representative, and that he was ready to negotiate regarding the sale. The conten- tions advanced by Respondent do not constitute good cause within the meaning of Section 102.20 of the Board's Rules and Regulations and we agree with the General Counsel that summary judgment based on Respondent's failure to file an answer is warrant- ed. Regarding service on Respondent's representative, the response does not explain why Respondent's representative did not identify himself to the Region- al Office until June 1977, more than 2 months after the answer was due, especially in light of his uncontroverted letter to the Union which indicates that he was aware of the charge less than a month after it was filed. 4 Further, it is undisputed that the charge and complaint were served on Respondent, and the response does not explain Respondent's failure to contact the Regional Office regarding the filing of an answer. Finally, we find Respondent's contentions concerning the unsuccessful informal settlement negotiations to be immaterial, since an offer of settlement does not excuse the obligation to file a timely answer.5 Accordingly, no good cause for failure to file an answer having been shown, in accordance with the rule set forth above, the allegations of the complaint are deemed admitted and are found to be true and we shall grant the Motion for Summary Judgment. On the basis of the entire record, the Board makes the following: : The General Counsel cites Walter Pape, 205 NLRB 719 (1973), and cases cited therein. 4 We likewise find that the General Counsel has not abused his authority under Sec. 3(d) of the Act in refusing to consider evidence, submitted by Respondent's representative after the time for filing an answer had elapsed, to establish Respondent's willingness to bargain prior to the filing of the charge. Since it would appear that this evidence consisted of the letters delivered to the Regional Office on June 2, 1977, we note that these letters do not support Respondent's assertion that it agreed to bargain prior to the filing of the charge on December 29, 1976. but merely establish Respon- FINDINGS OF FACT I. THE BUSINESS OF THE RESPONDENT Respondent is, and at all times material herein has been, a sole proprietorship operating restaurants in California, including one in Hayward, California, and the one involved in this proceeding, which it formerly operated in Santa Clara, California. During the past year Respondent received gross revenues in excess of $500,000 and purchased goods valued at more than $50,000 which originated outside the State of California. We find, on the basis of the foregoing, that Respondent is, and has been at all times material herein, an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act, and that it will effectuate the policies of the Act to assert jurisdiction herein. II. THE LABOR ORGANIZATION INVOLVED Hotel, Motel, Restaurant Employees and Bartend- ers Union, Local 19, AFL-CIO, is a labor organiza- tion within the meaning of Section 2(5) of the Act. III. THE UNFAIR LABOR PRACTICES A. The Representative Status of the Union The following employees of Respondent constitute a unit appropriate for collective-bargaining purposes with the meaning of Section 9(b) of the Act: All employees employed by Respondent at its 1680 El Camino Real facility, exclud- ing all office clericals, guards and supervi- sors as defined in the Act. Since on or about September 20, 1975, Respondent and the Union have been parties to a collective- bargaining agreement covering the terms and condi- tions of employment of the aforesaid appropriate unit of employees and having an expiration date of June 1, 1977. B. The Request To Bargain and Respondent's Refusal On or about November 24, 1976, Respondent sold its facility at 1680 El Camino Real, Santa Clara, dent's willingness to bargain on January 24, 1977, 2 months after the sale on November 24, 1976, and nearly 2 months after the Union's request and Respondent's refusal to bargain on December 1, 1976, which resulted in the filing of the charge on December 29, 1976. 5 Teamsters Local 676, affiliated with The International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America (De Simone Cadallac Co.), 230 NLRB 729, fn. 1 (1977). Furthermore, the Regional Director's refusal to approve Respondent's offer of settlement was, as set forth in the Remedy section below, in accordance with Board precedent. 439 DECISIONS OF NATIONAL LABOR RELATIONS BOARD California. On or about December 1, 1976, Local 19 requested that Respondent meet and bargain collec- tively with it concerning the effects of the sale of its Santa Clara facility and, on the same date, Respon- dent refused to do so. Accordingly, we find that on December 1, 1976, Respondent refused to bargain collectively with the Union as the exclusive representative of the employ- ees in the appropriate unit, and that, by such refusal, Respondent has engaged in unfair labor practices within the meaning of Section 8(aX5) and (1) of the Act. IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of Respondent set forth in section III, above, occurring in connection with its opera- tions 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 of com- merce. V. THE REMEDY Having found that Respondent has engaged in and is engaging in unfair labor practices within the meaning of Section 8(a)(5) and (1) of the Act, we shall order that it cease and desist therefrom, and, upon request, bargain collectively with the Union as the exclusive representative of all employees in the appropriate unit, and, if an understanding is reached, embody such understanding in a signed agreement. As a result of Respondent's unlawful failure to bargain about the effects of the sale of its Santa Clara, California, restaurant, unit employees have been denied an opportunity to bargain through their collective-bargaining representative at a time when Respondent was still in need of their services and a measure of balanced bargaining power existed. Meaningful bargaining cannot be assured until some measure of economic strength is restored to the Union. A bargaining order alone, therefore, cannot serve as an adequate remedy for the unfair labor practices committed.6 r In contending in par. 6 of its response that the General Counsel's refusal to accept an informal settlement of this proceeding without a backpay provision was improper because a backpay remedy is "overbroad where the complaint does not allege that Respondent discharged bargaining unit employees upon the sale of its business." Respondent too narrowly views the purpose of the kind of backpay remedy set forth in Transmarine Navigation Corporation and its Subsidiary, International Terminals, Inc., 170 NLRB 389 (1968). Such a backpay remedy is intended not only to compensate for backpay determined to be owing, if any, but also to restore economic strength to the Union in order to assure meaningful bargaining. I Despite his dissent in Transmarine, Member Jenkins notes that the Accordingly, we deem it necessary, in order to effectuate the purposes of the Act, to require Respondent to bargain with the Union concerning the effects of the sale on its employees, and we shall accompany our order with a limited backpay requirement designed both to make whole the employees for losses, if any, suffered as a result of the violation and to recreate in some practicable manner a situation in which the Union's bargaining position is not entirely devoid of economic consequences for Respondent. We shall do so in this case by requiring Respondent to pay backpay to its employees in a manner similar to that required in Transmarine, supra,7 Interstate Tool Co., Inc.,8 and Walter Pape.9 Thus, Respondent shall pay employees backpay at the rate of their normal wages when last in Respondent's employ from 5 days after the date of this Decision and Order until the occurrence of the earliest of the following conditions: (1) the date Respondent bargains to agreement with the Union on those subjects pertaining to the effects of the sale on its employees; (2) a bona fide impasse in bargaining; (3) the failure of the Union to request bargaining within 5 days of this Decision, or to commence negotiations within 5 days of Respon- dent's notice of its desire to bargain with the Union; or (4) the subsequent failure of the Union to bargain in good faith; but in no event shall the sum paid to any of these employees exceed the amount he would have earned as wages from the date of the sale to the time he secured equivalent employment, or the date on which Respondent shall have offered to bargain, whichever occurs sooner; provided, however, that in no event shall this sum be less than these employees would have earned for a 2-week period at the rate of their normal wages when last in Respondent's employ. Backpay shall be based upon earnings which the terminated employees would normally have received during the applicable period, less any net interim earnings, and shall be computed on a quarterly basis in the manner set forth in F W. Woolworth Company, 90 NLRB 289 (1950), together with interest as provided in Isis Plumbing & Heating Co., 138 NLRB 716 (1962), and Florida Steel Corporation. 10 The Board, upon the basis of the foregoing facts and the entire record, makes the following: remedy there has been accepted by the courts and the Board and, since some type of remedy for the misconduct is needed, he is therefore willing to join in the Decision here. 8 177 NLRB 686 (1969). 9 205 NLRB 719 (1973). 10 In accordance with our decision in Florida Steel Corporation, 231 NLRB 651 (1977), we shall apply the current 7-percent rate for penods prior to August 25, 1977, in which the "adjusted prime interest rate" as used by the Internal Revenue Service in calculating interest on tax payments was at least 7 percent. 440 UNCLE JOHN'S PANCAKE HOUSE CONCLUSIONS OF LAW i. Uncle John's Pancake House is an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 2. Hotel, Motel, Restaurant Employees and Bartenders Union, Local 19, AFL-CIO, is a labor organization within the meaning of Section 2(5) of the Act. 3. All employees employed by Respondent at its 1680 El Camino Real facility, excluding all office clericals, guards and supervisors as defined in the Act constitute a unit appropriate for the purpose of collective bargaining within the meaning of Section 9(b) of the Act. 4. Since September 20, 1975, the above-named labor organization has been and now is the exclusive representative of all employees in the aforesaid appropriate unit for the purpose of collective bargaining within the meaning of Section 9(a) of the Act. 5. By refusing on or about December 1, 1976, and at all times thereafter, to bargain collectively with the above-named labor organization as the exclusive bargaining representative concerning the effects on unit employees of the contract termination, Respon- dent has engaged in and is engaging in unfair labor practices within the meaning of Section 8(a)(5) of the Act. 6. By the aforesaid refusal to bargain, Respon- dent has interfered with, restrained, and coerced, and is interfering with, restraining, and coercing, employ- ees in the exercise of the rights guaranteed to them in Section 7 of the Act, and thereby has engaged in and is engaging in unfair labor practices within the meaning of Section 8(a)(1) of the Act. 7. The aforesaid unfair labor practices are unfair labor practices affecting commerce within the mean- ing of Section 2(6) and (7) of the Act. ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board hereby orders that the Respondent, Uncle John's Pancake House, Santa Clara, Califor- nia, its officers, agents, successors, and assigns, shall: 1. Cease and desist from: (a) Refusing to bargain collectively with Hotel, Motel, Restaurant Employees and Bartenders Union, Local 19, AFL-CIO, concerning the effects of the sale of its Santa Clara facility on employees in the following appropriate unit: All employees employed by Respondent at its 1680 El Camino Real facility, excluding all office clericals, guards and supervisors as defined in the Act. (b) In any like or related manner interfering with, restraining, or coercing employees in the exercise of the rights guaranteed them in Section 7 of the Act. 2. Take the following affirmative action which the Board finds will effectuate the policies of the Act: (a) Upon request, bargain with the above-named labor organization as the exclusive representative of all employees in the aforesaid appropriate unit with respect to the effects on employees of the sale of its Santa Clara facility, and reduce to writing any agreement reached as a result of such bargaining. (b) Reimburse employees in the manner set forth in the Remedy section of this Decision and Order. (c) Preserve and, upon request, make available to the Board or its agents, for examination and copying, all payroll records, social security payment records, timecards, personnel records and reports, and all other records necessary to analyze the amount of backpay due under the terms of this Order. (d) Mail a copy of the attached notice marked "Appendix"" to the Hotel, Motel, Restaurant Employees and Bartenders Union, Local 19, AFL- CIO, and to all the employees who were employed at its Santa Clara facility on the date of the sale of that facility. Copies of said notice, on forms provided by the Regional Director for Region 20, after being duly signed by Respondent's representative, shall be posted by Respondent immediately upon receipt thereof, and be maintained by it for 60 consecutive days thereafter, in conspicuous places, including all places where notices to employees are customarily posted. Reasonable steps shall be taken by Respon- dent to insure that said notices are not altered, defaced, or covered by any other material. (e) Notify the Regional Director for Region 20, in writing, within 20 days from the date of this Order, what steps have been taken to comply herewith. " In the event that this 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." APPENDIX NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government WE WILL NOT refuse to bargain collectively with Hotel, Motel, Restaurant Employees and Bar- tenders Union, Local 19, AFL-CIO, concerning 441 DECISIONS OF NATIONAL LABOR RELATIONS BOARD the effects of the sale of its Santa Clara facility on employees in the following appropriate unit: All employees employed by Respondent at its 1680 El Camino Real facility, exclud- ing all office clericals, guards and supervi- sors as defined in the Act. WE WILL NOT in any like or related manner interfere with, restrain, or coerce our employees in the exercise of the rights guaranteed them by Section 7 of the Act. WE WILL, upon request, bargain with the above-named labor organization as the exclusive representative of all employees in the aforesaid appropriate unit with respect to the effects on employees of the sale of its Santa Clara facility, and reduce to writing any agreement reached as a result of such bargaining. WE WILL reimburse employees in the manner set forth in the Remedy section of the Board's Decision and Order. UNCLE JOHN'S PANCAKE HOUSE 442