Ah Chu Company

AH CHU COMPANY 177 Ah Chu Company and Department Store Employees ORDER Union, Local 1100, affiliated with United Food and Commercial Workers International Union, Pursuant to Section 10(c) of the National Labor AFL-CIO. Case 20-CA-15425 Relations Act, as amended, the National Labor Re- lations Board adopts as its Order the recommended November 6, 1981 Order of the Administrative Law Judge and hereby orders that the Respondent, Ah Chu Com- pany, San Francisco, California, its officers, agents, BY MEMBERS FANNING, JENKINS, AND successors, and assigns, shall take the action set ZIMMERMAN forth in the said recommended Order, except that the attached notice is substituted for that of the On June 15, 1981, Administrative Law Judge Administrative Law Judge. Gordon J. Myatt issued the attached Decision in Volume Merchandise purchased the Mission Street store from Don this proceeding. Thereafter, Respondent filed ex- Kurtz, and leased the sundry department to Kurtz in late 1978 or early ceptions and a supporting brief. 1979. (The Administrative Law Judge erroneously stated this date as Jan- Pursuant to the provisions of Section 3(b) of the uary 1980.) Volume Merchandise and the Union then entered into the collective-bargaining agreement that specifically excluded the sundry de- National Labor Relations Act, as amended, the Na- partment employees from the bargaining unit, as mentioned above. In- tional Labor Relations Board has delegated its au- stead, these employees became part of the unit located at the Geary Bou- levard store, which Kurtz still owned, and were covered by the collec- thority in this proceeding to a three-member panel. tive-bargaining agreement between the Union and the Geary Boulevard The Board has considered the record and the at- store. In May 1980, Kurtz sold the lease for the sundry department to Respondent. Both pharmacy employees and sundry department employ- tached Decision in light of the exceptions and brief ees at the Mission Street store then worked for Respondent. and has decided to affirm the rulings, findings,' and In finding that the Mission Street store sundry department employees conclusions2 of the Administrative Law Judge and form an appropriate unit in and of themselves, we rely upon Stroehmann cadonlus hions recommended Order.3 ~Brothers Company, 252 NLRB 988 (1980), enfd. in an unpublished opinion to adopt his recommended Order. 3 108 LRRM 2280 (3d Cir. 1981). In that case, Ward Foods, Inc., the pred- ecessor employer, operated a bakery and distribution facility in which Respondent has excepted to certain credibility findings made by the there were two units of employees. One unit consisted of route salesmen, Administrative Law Judge. It is the Board's established policy not to over-the-road drivers, and mechanics, and the other unit contained pro- overrule an administrative law judge's resolutions with respect to credi- duction, maintenance, and shipping employees. Shortly before it sold the bility unless the clear preponderance of all of the relevant evidence con- facility, Ward ceased production, laid off its production employees, and vinces us that the resolutions are incorrect. Standard Dry Wall Products, operated only as a distribution center. We found that a unit of shipping Inc., 91 NLRB 544 (1950), enfd. 188 F.2d 362 (3d Cir. 1951). We have employees was appropriate essentially because they had been represented carefully examined the record and find no basis for reversing his findings. separately and apart from the employees in the other bargaining unit, I We agree with the Administrative Law Judge's finding that a unit albeit the shipping employees had been part of a larger unit. Here, the limited to sundry department employees at the Mission Street store is ap- sundry department employees too had been part of a larger bargaining propriate. We do not agree, however, with his rationale, nor do we think unit. They have never been part of a unit that included pharmacy em- that the cases he cited, such as Zim's Foodliner, Inc. d/b/a Zim's IGA ployees. Indeed, the pharmacy employees have always been a unit by Foodliner, et at v. N.LR.B., 495 F.2d 1131 (7th Cir.), cert. denied 419 themselves, represented by a different local, Local 648. In light of the U.S. 838 (1974), enfg. 201 NLRB 449 (1973), are apposite. In those cases, separate representation of the pharmacy employees on one hand and the the Board found that a unit limited to a single facility was appropriate sundry department employees on the other, the unit of sundry depart- when that facility was sold or otherwise separated from a multifacility ment employees is appropriate because another union has represented bargaining unit. those employees (though in a larger unit), and because "it may reason- The 1978-81 collective-bargaining agreement between the Union and ably be assumed that, as a result of transitional changes, the employees' Volume Merchandise excludes pharmacy employees and sundry depart- desires concerning unionization (have not] likely changed." Id. at 989, ment employees from its coverage. The pharmacy employees historically citing Mondovi Foods Corporation, 235 NLRB 1080, 1082 (1978). have been represented by Local 648 of the same International Union, and I Member Jenkins would award interest on backpay in accordance this Local represented those employees when Respondent acquired the with the formula set forth in his partial dissent in Olympic Medical Corpo- lease for the pharmacy department in April 1978. Local 648 initially re- ration, 250 NLRB 146 (1980). quested that Respondent recognize it as the bargaining representative of the pharmacy employees, but soon dropped its demand for recognition. 259 NLRB No. 25 178 DECISIONS OF NATIONAL LABOR RELATIONS BOARD APPENDIX ment at the Mission Street store, and WE WILL make them whole for any loss of pay, plus in- NOTICE To EMPLOYEES terest, they may have suffered as a result of POSTED BY ORDER OF THE our discrimination against them. NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government AH CHU COMPANY After a hearing at which all sides had an opportu- DECISION nity to present evidence and state their positions, the National Labor Relations Board found that we STATEMENT OF THE CASE have violated the National Labor Relations Act, as GORDON J. MYATT, Administrative Law Judge: Upon amended, and has ordered us to post this notice. a charge filed by Department Store Employees Union, The Act gives employees the following rights: Local 1100, affiliated with United Food and Commercial Workers International Union, AFL-CIO (hereafter To engage in self-organization called the Union),' on June 13, 1980, and an amended To form, join, or assist any union charge filed on July 30 against Ah Chu Company (here- To bargain collectively through repre- after called the Respondent), the Regional Director for sentatives of their own choice Region 20 issued a complaint and notice of hearing on To engage in activities together for the August 29.2 In essence, the complaint alleges that the purpose of collective bargaining or other Respondent purchased the lease of the sundry depart- mutual aid or protection ment of a discount store operation from an owner whose To refrain from the exercise of any or all employees were represented by the Union and covered such activities, by a collective-bargaining agreement. Further, that after the purchase, the Respondent unlawfully refused to hire WE WILL NOT discourage membership in the employees of the previous owner and unlawfully re- Department Store Employees Union, Local fused to recognize the Union as the exclusive bargaining 1100, affiliated with United Food and Com- representative of the employees in the leased departmeut. mercial Workers Union, AFL-CIO, or any In addition, it is asserted that the Respondent refused to other labor organization, by refusing to hire adhere to the terms and conditions of the existing collec- employees who are members of that union, or tive-bargaining agreement covering these unit employees. unin o r lo , aThe complaint asserts that by this conduct the Respond- any other labor organization, and thereby dis- ent has violated Section 8(a)(l), (3), and (5) of the Na- criminate against employees or applicants for tional Labor Relations Act, as amended, 29 U.S.C. 151, employment in regard to hire and tenure of et seq. (hereafter called the Act). The Respondent filed employment. an answer which admits certain allegations of the com- WE WILL NOT refuse to recognize and bar- plaint, denies others, and specifically denies the commis- gain collectively with Local 1100 as the exclu- sion of any unfair labor practices. sive bargaining representative of our employ- A hearing was held in this matter on February 3, 1981, ees in the following appropriate unit: in San Francisco, California. All parties were represented by counsel and afforded full opportunity to examine and All employees performing selling and non- cross-examine witnesses and present material and rele- selling work in the sundry department oper- vant evidence on the issues. Briefs were submitted by all ated at 2558 Mission Street, San Francisco, parties and have been duly considered. California; excluding all other employees, On the entire record in this case, including my obser- guards and supervisors as defined in the Act. vation of the witnesses and their demeanor while testify- ing, I make the following: WE WILL NOT in any like or related manner interfere with, restrain, or coerce our employ- FINDINGS OF FACT ees in the exercise of rights guaranteed them by Section 7 of the Act. I. JURISDICTION WE WILL recognize and bargain, upon re- Ah Chu Company, Respondent herein, is a sole propri- quest, with the above-named Union as exclu- etorship with its office and place of business located in sive bargaining representative of our employ- San Francisco, California. The Respondent is an enter- ees in the unit found appropriate. prise engaged in the sale of retail drugs and sundry prod- WE WILL offer immediate and full employ- ucts. During the calendar year ending December 31, ment to Alice Dominici, Lucilla Edison, and 1979, the Respondent, in the course of its business oper- Susanna Lopez without prejudice to their se- ations, derived gross revenues in excess of $500,000. niority or other rights and privileges, discharg- During a similar period, the Respondent purchased and ing if necessary any employees hired since we 'The name of the Union appears as amended at the hearing. took over the operation of the sundry depart- 2 Unless otherwise indicated, all dates herein refer to the year 1980. AH CHU COMPANY 179 received at its San Francisco facility products, goods, consultant, Tyrone Cochran. Unrefuted testimony by and materials valued in excess of $50,000 directly from Cochran discloses that, after he consulted with the repre- points outside the State of California. Based on the sentatives of Local 648, that Union no longer manifested above, I find that the Respondent is, and has been at all an interest in representing the Respondent's pharmacy times material herein, an employer engaged in commerce employees and dropped its demand for recognition. and in a business affecting commerce within the meaning of Section 2(6) and (7) of the Act. B. The Respondent's Takeover of the Sundry Department at the Mission Street Store 11. THE LABOR ORGANIZATION INVOLVED Sometime in late 1978, Kurtz began to run into finan- Department Store Employees Union, Local 1100, af- cial difficulties with the operation of the stores. In Janu- filiated with United Food and Commercial Workers In- ary 1980, Kurtz sold the Mission store to Volume Mer- ternational Union, AFL-CIO, is a labor organization chandise, who was a lessee of Kurtz at that particular fa- within the meaning of Section 2(5) of the Act. cility. As part of the arrangement, Kurtz retained oper- ation of the sundry department as a lessee of Volume. A III. THE ALLEGED UNFAIR LABOR PRACTICES new contract was negotiated between the Union and A. Background Facts Volume for thc Mission store employees coming within the Union's jurisdiction. (Resp. Exh. 1.) Although the The discount store in which the Respondent purchased employees working in the sundry department, now the lease operation of the sundry department was one of leased by Kurtz, would have normally been covered by three such stores in San Francisco. One store was locat- this aggrement,4 the Union and Volume attached a provi- ed on Alemany Boulevard, another on Mission Street, sion, by way of an appendix to the contract, specifically and the third on Geary Boulevard. These stores have a excluding these employees and making them a part of long history of changes in ownership over a period of the unit with the Geary store of Kurtz. years. However, the employees of the various leased de- LaVere "Moe" Heilesen, business representative of the partments have traditionally been represented by the Union wint the exceptionalof thee repharm and s thoe d- Union, testified that under the terms of the agreement Union with the exception of the pharmacy and shoe de- innwttha th se te de- .with Volume, the Union considered the seniority rights partment employees. The employees in these latter de- partment employees. The employeesented inteelter. ._ and the payroll coverage of the sundry department em- ocals of the same Internaditionally represented by different ployees to be combined with that of the Giant Value Some time in 1976 or 1977 (the exact date is not clear Geary store employees. But for all other purposes, ac- in the record), the three stores were owned by Payless cording to Heilesen, the employees were covered under Drug Stores Northwest, Inc., and operated under the the Volume Merchandise contract, which the Union con- name of Value Giant. Don Kurtz then purchased the sidered to be the master agreement. Ray Vetterlein, a Alemany Boulevard store from Payless within the same labor consultant who represented Kurt in all of his time frame and changed the name of that store to Giant transactions involving the Giant Value stores, stated that Value. When Kurtz purchased the Alemany Boulevard he was confronted with a complex bargaining problem because Volume did not want to assume Kurtz' layoff store, he negotiated a contract with the Union covering because Volume dd not want to assume Kurtz' layoff the employees of the various leased departments except st for the sundry department employees. Therefore, ac- those under the jurisdiction of sister locals. At some un- cording to Vetterlein, he negotiated with the Union to specified date in 1977, Kurtz then purchased both the get a separate agreement for Volume which specifically specified date in 1977, Kurtz then purchased both the Mission Street and Geary Boulevard stores from Payless. excluded the employees of the sundry department. Vet A separate collective-bargaining agreement was negotiat- ed with the Union covering the employees at these latter ed with the Un ion covering the employees at these latter 4 The provision in the contract between the Union and Volume relat- two stores for the period beginning August 1, 1977, and ing to leased departments is as follows: ending July 31, 1978. (G.C. Exh. 2.) By its terms, this Section 21. Leased Departments. contract lumped the employees at the Geary and Mission A. The Employer agrees that any employees performing work stores into a single bargaining unit as distinguished from covered by this Agreement in leased or licensed departments. under the bargaining unit at the Alemany store.' However, the subcontract or as demonstrators, shall be members of the Collective and Geary-Mission) were identi Bargaining Unit as defined in this Agreement, and the Employer two contracts (Alemany and Geary-Mission) were identi- agrees to retain and exercise full control over all of the terms and cal in their substantive terms. conditions of employment of all such employees In April 1978, the Respondent purchased the leases for B. It is recognized by the Union that the terms of the Employer's the pharmacy concessions from Kurtz at all three stores. lease or license arrangements obligate the lessee or licensee to pay Local 648 of the same International Union represented the wages and observe theother terms of this Agreement, and the Union agrees that the Employer is entitled to place the financial re- the pharmacy employees of the Respondent's predeces- sponsibility for meeting the cost of observance of this Agreement sor at these stores. This local requested that the Re- upon said lessees and/or licensees. spondent recognize it as the exclusive bargaining repre- 'The provision in the appendix to the contract between the Union and sentative for the pharmacy employees after the Respond- Volume affecting the employees of the sundry department reads as fol- ent took over the leases. Edwin Chu, owner of the Re- lows spondent, referred the union representatives to his labor Irrespective of thment Employees: Irrespective of the terms of Section 21 of this Agreement all Sundry Department employees shall be covered by and part of the 'Thus, the employees at the Geary and Mission stores shared seniority d.b.a. by and between Giant Value 5250 Geary Boulevard, San Fran- and layoff and recall rights. cisco, California, and Local 1100. 180 DECISIONS OF NATIONAL LABOR RELATIONS BOARD made an "adjunct" to the Geary store unit and they under the contract received a higher wage rate than the were covered under the Geary contract. He further testi- regular sales employees. She testified that, approximately fled this modification (sec. 5 of the appendix to the con- 2 months before the Respondent took over the depart- tract) was put into the agreement specifically at the ment, she questioned McGrath about her future employ- Union's request in order to protect the seniority and ment. According to Edison, McGrath stated that Chu layoff rights of the sundry department employees. was going to keep her along with Dominici and Lopez. Kurtz continued to experience financial problems and, Since she knew Chu, Edison went directly to him to in- several months prior to June, entered into negotiations quire about her job prospects under the new manage- with Volume and the Respondent to have the Respond- ment. Edison testified Chu said he was not sure of the ent purchase the lease for the sundry department as well arrangements at that time. He indicated he wanted to as a liquor license held by Kurtz at the Mission store. retain Edison, but was having problems. On cross-exami- These arrangements were finalized on May 8 and the Re- nation, Edison acknowledged that she told Chu she had spondent was to take over operation of the sundry de- a job offer from a pharmacy in the area called "Joe's partment at Mission Street on June 1. (Resp. Exhs. 4 and Pharmacy." She stated, however, that in her conversa- 5.)6 tion with Chu she did not indicate she was going to During the time Kurtz leased the sundry department at accept the pharmacy job. the Mission Street store, Robert McGrath was the man- Edison further testified that she had another conversa- ager and Ellen Wentworth was the assistant manager. In tion with Chu on May 30. She said Chu informed her addition, six employees worked in the department and that he still wanted her to take over the camera section were part of the bargaining unit. These employees were: of the sundry department, but he was having trouble Alice Dominici, Lucilla Edison, Sara Gilbert, Gee with the Union. According to Edison, Chu said he Gwing Hung, Susanna Lopez, and Euwanda Sexton. wanted to drop Local 1100 and get Local 648 to repre- Although Kurtz and the Respondent attempted to sent the employees. As in the case of Dominici, Chu ad- keep their negotiations private, the unit employees quick- vised Edison to take a week off and he would contact ly gained knowledge of the pending change in ownership her about the job. Edison testified that during this con- of the lease. Dominici worked in the department as a versation Chu asked if she would be willing to join cashier and stock clerk. She testified that at least 2 Local 648 and give up her membership in Local 1100. months prior to the Respondent taking over the lease, Edison replied that it depended on her position with the she spoke with McGrath about the employment pros- Respondent and the money arrangements. After the pects for the employees after the lease was transferred. transfer of the lease from Kurtz to the Respondent, According to Dominici, McGrath stated he had talked Edison was not hired by the Respondent. with Chu and the employees would be retained. On May Lopez worked as a cashier and a sales clerk in the 30, Dominici again spoke to McGrath about the employ- Mission store during Kurtz' operation of the sundry de- ees' fate after the Respondent took over the department. partment. She testified that approximately 3 weeks She stated McGrath said Chu wanted to keep the em- before the change in ownership, she asked McGrath ployees. Dominici insisted she wanted to hear this direct- about her employment situation under the new manage- ly from Chu and she went to speak with him in the phar- ment. She asked McGrath if the employees would keep macy. According to Dominici, Chu said he wanted to their jobs and was told they would. Lopez posed the keep the employees but was having problems between same question to McGrath the following week. Accord- Local 648, a union he wanted, and Local 1100, which ing to her testimony, McGrath stated he had spoken to currently represented the employees. She stated Chu ad- Chu and that the Respondent intended to retain the em- vised her to take a week off and fill out an application ployees after the transfer of ownership. Lopez' last day for employment. He told the employee that McGrath in the department was May 30. She stated she asked would contact her.' Dominici said Chu indicated he McGrath what she was supposed to do (about her future could not say much more at that time because it would employment by the Respondent). McGrath replied, ac- create further problems for him. cording to Lopez, that the employee should wait a few Dominici testified that her last day of work in the days and she would be contacted. However, Lopez was sundry department was May 31. She was never contact- never called by the Respondent. ed by McGrath but returned to the store sometime be- McGrath was called as a witness in the case. He stated tween June 16 and June 20. While there, she spoke with that, after Kurtz and the Respondent agreed to the terms McGrath and commented that it did not seem as if the of sale of the lease, it became common knowledge employees would be getting their jobs back. According among the employees that Chu was taking over the op- to Dominici, McGrath replied that he did not know be- eration of the department. He stated he was questioned cause "things were pretty lousy." on numerous occasions by Dominici, Edison, and Lopez Edison worked in the camera section of the sundry de- about what would happen to the employees' jobs." Each partment. She was classified as a department head and time he was questioned by the employees, McGrath stated he told them the Respondent wanted to keep all of 6 Under the terms of the agreement between the Respondent and the employees but did not know would retain. Kurtz, the Respondent purchased all of the inventory and fixtures in the sundry and liquor departments as well as Kurtz' liquor license. 7 McGrath had accepted an offer from Chu 3 weeks previously to 8 According to McGrath, Sexton was on disability at the time of the remain as manager of the sundry department after the transfer of the sale of the lease, Gilbert indicated she wanted to retire, and Gwing Hung lease. decided to transfer to the Geary store. AH CHU COMPANY 181 He advised the employees to fill out a new application ecute a contract with the Union. Heilesen told Chu that for employment with the Respondent. if he did not do this, Volume would close down the Because of the anxiety expressed by the employees, sundry department. Chu referred Heilesen to Tyrone McGrath said he urged Kurtz during the transition Cochran, his labor consultant, and offered to give Heile- period to issue a statement to them explaining their job sen Cochran's telephone number. Chu stated that Heile- rights. On May 19, Kurtz had McGrath and Wentworth sen indicated he knew Cochran and would get in touch circulate a memorandum to the employees stating that with him. those employees with high enough seniority could elect Vetterlein testified that after the deal was consummat- to transfer to the Geary store. (Resp. Exh. 3 .)9 The em- ed between Kurtz and the Respondent, he had many ployees were given until May 29 to make this election. conversations with union representatives about the fate All employees choosing to remain at the Mission store of Kurtz' former employees. According to Vetterlein, were to be scheduled to work through May 26, but the Union threatened to picket Volume to force Chu to would be paid through May 29. hire Kurtz' employees in the sundry department. He On May 23, Kurtz issued another memorandum to the stated that the Union took the position that Volume had employees indicating that the inventory and transfer date the contract which covered these employees at the Mis- had been changed to May 29. According to this memo- sion store, and the Union intended to picket in order to randum all employees were to be terminated on May 28 so sore a tto hire the employees and and Gee (Gwing Hung) and Eiison were eligible to force Volume to compel Chu to hire the employees and transfer to the Geary store.Hung) and Ed cautioned there waseligible to execute an agreement with the Union. Vetterlein testified transfer to the Geary store. '° He cautioned there was no guarantee of employment by the new owner. (Resp. Exh. that he urged the Union to use the transfer rights in the 2.) agreement covering the sundry department employees at Chu testified that the Respondent actually took over the Mission and the Geary stores. He stated, however, the lease on June I and the department was closed May that the Union rejccted this suggestion because it wanted 31 in order to take inventory. He stated that when the Chu to pick up the employees laid off at Mission. Respondent assumed operation of the sundry department, Cochran testified that in late May Chu informed him he transferred employees in from his other pharmacies to of the arrangement he had made with Kurtz to acquire staff the department. Chu acknowledged that he spoke operation of the sundry department. Cochran stated he with Dominici and Edison regarding their chances of felt that, because Chu had the pharmacies at the various being employed by him once he took over the manage- Giant Value stores, Local 648 would seek to assert juris- ment of the department. According to Chu, he told Do- diction over the sundry department employees at Mis- minici that he did not know what his labor situation was sion. Cochran stated that this was his belief even though going to be but she would have to reapply for employ- he was aware that in the San Francisco area Local 648 ment. He further stated he advised Dominici he had covered pharmacy employees and Local 1100 covered enough help, and it would take a month or so to see if sundry department employees in discount operations there would be any openings. when located in the same building. When contacted by Chu admitted that when he spoke with Edison, he was the Respondent's attorney during the negotiations for the rather evasive. He testified this was due to the fact that purchase of the lease, Cochran testified he informed the he felt the employees would come under the jurisdiction attorney that the Respondent did not have to keep the of Local 648 rathcr than Local 1100."1 Chu further testi- employees of the prior owner of the lease. He told the fled that when Edison informed him of the job offer she attorney that, if the Respondent did keep the employees, had from Joe's Pharmacy, he became curious about the he would have to pay the higher wage rates called for in procedure for employees transferring from Local 1100 to the collective-bargaining agreement with the Union. Local 648. Therefore, he asked Edison about making Cochran further testified that after Heilesen contacted such a transfer and she indicated she would find out and Chu he placed a call to Heilesen but was never able to advise him. Radvise hgardingm. Mcrath'spurortedoffersfemploymen get him nor were his calls ever returned by the union Regarding McGrath's purported offers of employment representative. to the employees, Chu denied that he ever authorized McGrath to tell the employees they would be hired by Concluding Findings the new management. Chu stated he told McGrath to inform the employees, when asked about jobs, that he The General Counsel and the Charging Party argue simply did not know what the situation would be. that the Respondent is the successor employer to Kurtz Sometime in July, Heilesen came into the store and in the operation of the sundry department at the Mission was introduced to Chu by McGrath. According to Chu's store. As such, it is contended that the Respondent re- testimony, Heilesen stated that the Respondent would fused to hire the employees of its predecessor because of have to hire all of the former employees back and ex- their union affiliation and thus avoid having to bargain with the Union as the exclusive representative of these D Only three employees had enough seniority to qualify to make the employees. 12 transfer. They were Edison, Gwing Hung, and Gilbert. 1' Gwing Hung transferred to the Geary store. Edison testified she did not elect to transfer because there were no openings at that store for a 12 The complaint alleges that the appropriate bargaining unit is: department head, Therefore, if she opted to transfer, she would have to All employees performing selling and non-selling work in the sundry work at a reduced wage rate. department operated by Respondent at 2558 Mission Street, San " Chu indicated this was his belief even though none of the employees Francisco, California; excluding all other employees, guards and su- at his pharmacies were represented by Local 648. pervisors as defined in the Act. 182 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The Respondent, on the other hand, contends that the to the same spectrum of customers as did the predecessor bargaining unit is not that urged by the General Counsel prior to the transfer of the lease. Furthermore, the or the Union. Respondent states that prior to the sale of sundry department was operated in the same location- the lease, the sundry department employees were specifi- the Mission Street store-and was under the supervision cally made a part of the Geary bargaining unit, and after of the same general manager who ran the department for the sale the unit at the Mission store became a part of the the predecessor employer. Therefore, with the exception Respondent's pharmacy department. In addition, the Re- of the employee complement (which will be discussed spondent argues that it is not a successor to Kurtz and infra) the "employing industry" remained identical to therefore under no duty to bargain with the Union. The that which prevailed prior to the sale of the lease at the Respondent contends that the sundry department em- Mission store. In these circumstances, the contraction of ployees were either terminated, placed on layoff, or the sundry department unit to the Mission store does not transferred by Kurtz to the Geary store at the termina- render it any less appropriate as a bargaining unit. Naza- tion of his lease. Respondent further contends that as the reth Regional High School, supra; Zim's Foodliner, supra. new owner of the lease it was under no obligation to See also N.L.R.B. v. Foodway of El Paso, a Division of employ the individuals working for Kurtz nor did it Kimbell Foods, Inc., 496 F.2d 117 (5th Cir. 1974). refuse to employ them because they were members of The finding that the unit is appropriate leads to the the Union. more central question of whether the Respondent is a I find that the Respondent's first argument-that a unit successor employer obligated under the circumstances limited to sundry department employees at the Mission here to hire the predecessor's employees and bargain store is not an appropriate one-is without merit. Al- with the Union. Under the Supreme Court's holding in though the Respondent's position on this point is not ar- Howard Johnson v. Detroit Joint Board,'3 and N.L.R.B v. ticulated in precisely these terms, it in effect states that Burns International Security Services,'4 a successor em- the continuity of the bargaining unit was destroyed when ployer is not obligated to hire any of the work force em- the Respondent took over the ownership of the lease at ployed by his predecessor. But, as pointed out in both the Mission store. To support this position, Respondent decisions, a successor employer cannot refuse to hire the relies on the collective-bargaining agreement between predecessor's "employees solely because they are union Giant Value and the Union, which placed the Mission members or to avoid having to recognize the Union."'5 and Geary stores in a single bargaining unit and the sub- Therefore, the central issue here is not whether the Re- sequent collective-bargaining agreement between spondent was obligated to hire the employees of his Volume and the Union, which specifically retained the predecessor but, rather, whether the Respondent refused sundry department employees of the Mission store in the to hire these employees because they were members of Geary unit. Thus, according to the Respondent's argu- Local 1100 and thereby avoid having to bargain with ment, its purchase of the lease at Mission caused a sever- that union. ance from the prior unit and the sundry department In my judgment, the record warrants a finding that the became merged with the Respondent's pharmacy depart- Respondent unlawfully refused to hire those of the pred- ment at that store. ecessor's employees who were available and willing to While this argument contains some elements of persua- work at the Mission store after the transfer of ownership siveness, it overlooks the fact that the Board has consist- of the lease. The testimony of the former employees ently held, with court approval, that a much reduced (Dominici, Edison, and Lopez) as well as that of Chu bargaining unit may be treated as a miniature of the and McGrath graphically demonstrates that the employ- predecessor's larger unit. See, e.g., Nazareth Regional ees became aware of the sale of the sundry department at High School v. N.L.R.B., 549 F.2d 873 (2d Cir. 1977), least a month before its effective date. Further, upon enfg. 222 NLRB 1052 (1976); Zim's Foodliner, Inc. v. gaining this knowledge, all of the employees were con- N.L.R.B., 495 F.2d 1131 (7th Cir. 1974), enfg. 201 cerned over whether they could expect employment NLRB 905 (1973). Cf. N.L.R.B. v. Band-Age, Inc., 534 with the Respondent after the change in ownership of F.2d 1 (Ist Cir. 1976), enfg. 217 NLRB 449 (1975). The the lease. They engaged in repeated conversations about sale of the sundry department in the instant case is analo- their job prospects with McGrath who, 3 weeks prior to gous to the sale of a single store which prior to the sale the change in ownership, agreed to work in the same ca- was part of a multistore bargaining unit. Such was the pacity as general manager for the Respondent. All three case in Zim's Foodliner where individual stores of a mul- of the predecessors' employees testified they were told tistore bargaining unit were sold separately. The Board by McGrath they would be hired by the Respondent and and the court found that the stores were operated at the that McGrath indicated that his assurances were based same location, with the same physical plant and equip- on his conversations with Chu. Contrary to this, ment, served the same products to the same customers, McGrath testified that he told the employees on each oc- and the employees had the same job functions and imme- casion that he was apprised that the Respondent would diate supervision as they had in the larger predecessor unit. Thus, it was determined that the fractionalized unit '3 Howard Johnson Co., Inc. v. Detroit Local Joint Executive Board. was an appropriate one. Hotel & Restaurant Employees & Bartenders International Union. AFL- In the instant case, there is no evidence in the record CIO, 417 u.S. 249 (1974). to contravene the contention of the General Counsel or ' N.L.R.B. v. Burns International Security Services, Inc.. et at, 406 U.S. 272 (1972). the Charging Party that the Respondent sold the same " Howard Johnson v. Detroit Joint Board, supra at 262, fn. 8; N.L.R.B. type of products and provided the same kinds of services v. Burns International Security Services, supra at 280-281, fn. 5. AH CHU COMPANY 183 like to keep all of them but did not know which ones fore, that by refusing to hire these three employees be- would be retained. He advised the employees to fill out cause of their union affiliation, the Respondent violated new applications. Chu, on the other hand, stated he in- Section 8(a)(3) and (1) of the Act. Karl Kallmann, d/b/a structed McGrath to tell the employees, when ques- Love's Barbeque Restaurant, No. 62 v. N.L.R.B., 640 F.2d tioned about future employment, that he did not know 1094, 1100 (9th Cir. 1981), enfg. in pertinent part 245 what the Respondent intended. This variance in the NLRB 78 (1979); Macomb Block and Supply, Inc., 223 statements of Chu and McGrath casts serious doubts on NLRB 1285 (1976). ' the reliability of their testimony. Accordingly, I find the The finding that the Respondent refused to hire the testimony of the employees to be more convincing and three employees of its predecessor because of their union trustworthy. affiliation further warrants the inference that this action The testimony also indicates that Dominici and Edison was taken in order to allow the Respondent to avoid any were not satisfied with McGrath's assurance and each were not satisfied with McGrath's assurance and each bargaining obligation, as a successor employer, with the Union. The record reveals that the Respondent brought told her he wanted to keep the employees, but was told her he wanted to keep the employees, but was in three employees, in addition to Chu's wife, from its having problems between Local 648 and Local 1100. At this time Chu indicated he wanted the employees to be other pharmacies to work in the sundry department at represented by Local 648. In this same vein, Edison testi Mission. Thus, it becomes evident that, had the Respond- fied that Chu told her that on May 30 he was having ent hired the three employees of its predecessor, the trouble with Local 1100 because he wanted to drop that Union would have maintained its majority status in the union and get Local 648. Although Chu denied telling unit and the Respondent, as the successor employer, this to Dominici and Edison, I do not credit him. Their would then have been under an obligation to recognize testimony regarding Chu's statements comports with the and bargain with the Union. N.L.R.B. v. Burns Inrerna- testimony of Cochran, Respondent's labor consultant. tional Security Services, Inc., supra. Therefore, the Re- When first apprised by Chu that the Respondent intend- spondent cannot now be permitted to evade its legal ob- ed buying Kurtz' lease at Mission, Cochran told Chu's ligations through its own wrongdoing in refusing to hire attorney that the Respondent did not have to keep the its predecessor's employees. Karl Kallmann v. N.L.R.B.. employees but, if they were retained, the Respondent supra at 1100-01; N.L.R.B. v. Foodway of El Paso, supra. would have to pay the higher wage rates required by the Accordingly, I find the Respondent has also committed a collective-bargaining agreement with the Union. Coch- violation of Section 8(a)(5) of the Act. J. R. Sousa & ran also stated he reminded Chu he might have jurisdic- Sons, Inc., 210 NLRB 982 (1974). See also K. B. & J. tional problems between Locals 648 and 1100, even Young's Super Markets, Inc. v. N.L.R.B., 377 F.2d 463 though he was aware at that time that none of Chu's (9th Cir. 1967). pharmacy employees at any of the stores were represent- ed by a union. t6 This unrefuted testimony by Cochran CONCLUSIONS OF LAW lends support to the statements of Dominici and Edison that Chu did not want Local 1100 representing his em- 1. The Respondcnt, Ah Chu Company, is an employer ployees. Further, it warrants the inference that Chu was within the meaning of Section 2(2) of the Act engaged in concerned by the higher wage rates he would have to commerce within the meaning of Section 2(6) and (7) of pay if he hired the predecessor's employees, since they the Act. were members of Local 1100. It also serves to explain 2. Department Store Employees Union, Local 1100, af- why Chu asked Edison if she would consider giving up filiated with United Food and Commercial Workers her membership in Local 1100 and transferring to Local Union, AFL-CIO, is a labor organization within the 648. meaning of Section 2(5) of the Act. In light of the above, I find that the credited testimony warrants the conclusion that the Respondent did not hire moved herself from consideration for hire by the Respondent. Gwing Dominici, Edison, or Lopez for the reasons that they Hung opted to transfer to the Geary Street store and thereby removed were members of Local 1100. In making this finding, I himself from consideration for employment after the transfer of the lease. the assurances given the employees by Mcrath Although these three individuals were alleged in the complaint to be rely on the assurances given the employees by McGrath discriminatees, they were not available at the hearing. Counsel for the that they would be hired by the Respondent only to the General Counsel and the Charging Party asserted they were not aware extent that it indicated the Respondent was considering that the Respondent would defend on the ground that these individuals employing these individuals until advised that it would were not available for employment after the transfer of the lease. A brief .. burdened with a union it did not want. I find, there- recess was taken to afford counsel an opportunity to secure these wit- be burdened with a union it did not want." I rind, there- nesses but they were not found. Counsel for the Charging Party made offers of proof regarding testimony they would have given. The offers of " Moreover, Cochran testified he was aware that Locals 648 and 1100 proof were rejected since the complaint and notice of hearing setting the represented separate units of pharmacy and sundry department employees hearing date had been issued some 5 months previously, and there was no even when these units were in the same discount store location. showing as to good cause-other than the claimed surprise-why these " Counsel for the General Counsel and the Charging Party contend witnesses were not available. that the other employees of the predecessor were also victims of an un- "' Respondent contends that none of the employees filed an application lawful refusal to hire. I reject this contention as being unsupported in the for employment as requested and, thus, there was no refusal to hire them. record. McGrath testified that Sexton was on disability at the time of the This argument is without merit since Chu's conversations with Dominici sale of the lease and there is no indication in the record that she would and Edison made it clear to the employees that their union affiliation was have been considered for hire by the Respondent. McGrath also testified an impediment to consideration for hire. Therefore, the failure of the em- that Gilbert stated she did not wish to transfer to the Geary store and ployees to undertake a useless act is no defense to the unlawful refusal to that she wanted to go on retirement or layoff. Thus, she voluntarily re- hire. Macomb Block and Supply. Inc.. supra. 184 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 3. The following constitutes a unit appropriate for pur- Upon the foregoing findings of fact, conclusions of poses of collective bargaining within the meaning of Sec- law, and the entire record in this case, and pursuant to tion 9(b) of the Act: Section 10(c) of the Act, I hereby issue the following recommended: All employees performing selling and non-selling work in the sundry department operated by Re- ORDER 20 spondent at 2558 Mission Street, San Francisco, The Respondent, Ah Chu Company, San Francisco, California; excluding all other employees, guards California, its officers, agents, successors, and assigns, and supervisors as defined in the Act. shall: 1. Cease and desist from: 4. By refusing to retain or hire three sundry depart- ment employees of Giant Value, after purchasing the (a) Discouraging membership in Department Store lease for and operating that department at the Mission Employees Union, Local 1100, affiliated with United Street store, because they were members of the Union, Food and Commercial Workers Union, AFL-CIO, or the Respondent has discriminated against these employ- any other labor organization, by refusing to hire employ- ees with regard to hire and tenure of employment in vio- ees who are members of that union, or any other labor organization, thereby discriminating against employees or applicants for employment in regard to hire and tenure 5. By unlawfully refusing to retain or hire the three of employment. sundry department employees of Giant Value because of (b) Refusing to recognize and bargain collectively re- their union affiliation, the Respondent has evaded its ob- garding rates of pay, wages, hours, and other terms and ligation, as successor to Giant Value, to recognize and conditions of employment with the above-named union bargain with the Union in violation of Section 8(a)(5) as the exclusive bargaining representative of its employ- and (I) of the Act. ees in the following appropriate unit: 6. The above conduct constitutes unfair labor practices affecting commerce within the meaning of Section 2(6) All employees performing selling and non-selling and (7) of the Act. work in the sundry department operated by Re- spondent at 2558 Mission Street, San Francisco, THE REMEDY California; excluding all other employees, guards Having found that the Respondent has committed and supervisors as defined in the Act. unfair labor practices within the meaning of Section (c) In any like or related manner interfering with, re- 8(a)(3), (5), and (1) of the Act, it shall be ordered to (c) In any like or relateoyees In the exercise of their cease and desist therefrom and take certain affirmative rights guaranteed by Section 7 of the Act. action designed to effectuate the policies of the Act. 2. Take the following affirmative action designed to ef- Since the Respondent has unlawfully evaded its obliga- fectuate the policies of the Act tion, as successor to Giant Value, to bargain with the Union as exclusive representative of its employees in an sanna Lopez immediate and full employment, without appropriate unit, it shall be ordered to bargain in good o e a full e lhts prejudice to their seniority or other rights and privileges, faith, upon request, with the Union and embody in a discharging if necessary any employees hired since the signed agreement any understanding reached. The Re- Respondent took over operation of the sundry depart- spondent shall be further ordered to offer immediate em- ment at the Mission Street store, and make them whole ployment to Alice Dominici, Lucilla Edison, and Susan- for any loss of pay they may have suffered by reason of na Lopez in the same positions they held when the Re- the discrimination against them in the manner set forth in spondent purchased the lease for the sundry department this Decision entitled "The Remedy." at the Mission Street store from Giant Value or, if those (b) Recognize and, upon request, bargain in good faith positions no longer exist, in substantially equivalent posi- with Local 1100 as the exclusive representative of its em- tions, without prejudice to their seniority or other rights ployees in the appropriate bargaining unit set forth above and privileges, dismissing, if necessary, all employees with respect to rates of pay, wages, hours, and other hired since Respondent took over operation of the terms and conditions of employment. In the event an un- sundry department. In addition, the Respondent shall derstanding is reached, embody the terms of said under- make whole these three employees for any loss of pay standing in a signed agreement. they may have suffered by reason of the discrimination (c) Preserve and, upon request, make available to the against them by paying each a sum of money equal to Board or its agents, for examination and copying, all that which she would have normally earned as wages payroll records, social security payment records, time- from the date of discrimination to the date of employ- cards, personnel records and reports, and all other re- ment, less net earnings during such period. Interest on said wages shall be computed in the manner prescribed In the event no exceptions are filed as provided by Sec. 102.46 of in F. W. Woolworth Company, 90 NLRB 289 (1950), and the Rules and Regulations of the National Labor Relations Board, the 1NLRB 651 (1977). 9 findings, conclusions, and recommended Order herein shall, as provided Florida Steel Corporation, 231 NLRB 651 (1977).9 fin Sec. 102.48 of the Rules and Regulations, be adopted by the Board and become its findings, conclusions, and Order, and all objections thereto '9 See, generally, Isis Plumbing & Heating Co., 138 NLRB 716 (1962). shall be deemed waived for all purposes. AH CHU COMPANY 185 cords necessary to analyze the amount of backpay due Region 20, after being duly signed by Respondent's au- under the terms of this recommended Order. thorized representative, shall be posted immediately upon (d) Post in the sundry department at the Mission receipt thereof, and be maintained for 60 consecutive Street, San Francisco, California, store, copies of the at- days thereafter, in places where notices to employees are tached notice marked "Appendix." 2' Copies of said customarily posted. Reasonable steps shall be taken by notice, on forms provided by the Regional Director for the Respondent to ensure that said notices are not al- tered, defaced, or covered by any other material. 21 In the event that this Order is enforced by a Judgment of a United (e) Notify the Regional Director for Region 20, in States Court of Appeals, the words in the notice reading "Posted by writing within 20 days from the date of this Order, what Order of the National Labor Relations Board" shall read "Posted Pursu- ant to a Judgment of the United States Court of Appeals Enforcing an steps the Respondent has taken to comply herewith. Order of the National Labor Board."