Jersey Juniors, Inc.

Jersey Juniors, Inc. and Retail Store Employees Union, Local 1001, AFL-CIO. Case 19-CA-8730 June 20, 1977 DECISION AND ORDER BY CHAIRMAN FANNING AND MEMBERS PENELLO AND MURPHY On March 22, 1977, Administrative Law Judge William J. Pannier III issued the attached Decision in this proceeding. Thereafter, the Respondent filed exceptions and the General Counsel filed an answer to the Respondent's exceptions. 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. The Board has considered the record and the attached 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. ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board adopts as its Order the recommend- ed Order of the Administrative Law Judge and hereby orders that the Respondent, Jersey Juniors, Inc., Everett, Washington, its officers, agents, succes- sors, and assigns, shall take the action set forth in the said recommended Order. DECISION STATEMENT OF THE CASE WILLIAM J. PANNIER III, Administrative Law Judge: This matter was heard by me in Seattle, Washington, on January 13 and 14, 1977. On August 31, 1976, the Regional Director for Region 19 of the National Labor Relations Board issued a complaint and notice of hearing, based upon an unfair labor practice charge filed on July 14, 1976, alleging violations of Section 8(aXl) and (5) of the National Labor Relations Act, as amended, 29 U.S.C. § 151, et seq., herein called the Act. All parties have been afforded full opportunity to appear, to introduce evidence, to examine and cross-examine witnesses, and to file briefs. Based upon the entire record, upon the arguments made on behalf of the parties, and upon my observation of the demeanor of the witnesses, I make the following: I By letter of understanding executed on the same day, the parties agreed that "the Contract shall be serviced and the employees shall be members of 230 NLRB No. 41 JERSEY JUNIORS, INC. FINDINGS OF FACT I. JURISDICTION There is no dispute regarding the following facts: At all times material, Jersey Juniors, Inc., herein called Respon- dent, has been a Washington corporation, with headquar- ters and corporate offices in Everett, Washington, engaging in the retail clothing sales business at various locations in western Washington; on or about April 29, 1976, Respon- dent purchased the assets of a bankrupt company called Roda Lee, Inc., herein called Roda Lee, which had ceased doing business; and, during the 12-month period preceding issuance of the complaint, which period is representative, in the course and conduct of business operations, Respon- dent and Roda Lee, collectively, derived gross revenues in excess of $500,000 and purchased goods and materials valued in excess of $50,000 which were received directly from locations outside the State of Washington. Therefore, I find, as admitted by the answer, that at all times material, Respondent has been an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 11. THE LABOR ORGANIZATION INVOLVED At all times material, Retail Store Employees Union, Local 1001, AFL-CIO, herein called the Union, has been a labor organization within the meaning of Section 2(5) of the Act. II. ISSUES Whether Respondent has violated Section 8(aX5) and (1) of the Act, following the purchase of Roda Lee assets by unilaterally failing to make pension benefit contributions, by failing and refusing to furnish the Union with requested information regarding the work force, and by failing and refusing to meet and confer with the Union, in response to the latter's request, with regard to rates of pay, wages, hours of employment, and other terms and conditions of employment of employees. IV. THE ALLEGED UNFAIR LABOR PRACTICES A. The Facts The dispute in this matter arises from the bankruptcy of Roda Lee, which had operated a number of retail clothing sales outlets in the Pacific Northwest prior to January 1975. Most were located in Valu-Mart Discount Stores, but several were located at separate and freestanding sites. In the summer of 1974, Roda Lee voluntarily recognized the Union as the representative of the employees at, in essence, its independent stores in western Washington. On Septem- ber 13, 1974, the parties entered into a collective-bargain- ing agreement covering the Roda Lee employees at four specific western Washington stores: Everett, Mt. Vernon, Bremerton, and Tacoma.1 This agreement was to be effective until July 31, 1976, with annual renewal "unless written notice of desire to cancel or terminate the contract the Retail Clerks Union having jurisdiction over the area where the store is located." Thus, in effect, the Union would be the bargaining representative (Continued) 329 DECISIONS OF NATIONAL LABOR RELATIONS BOARD is served by either party upon the other at least sixty (60) days prior to the date of expiration." In addition, article 12 of the agreement provided: "Effective November 1, 1975, based on October 1975 hours, the Employer shall pay into the Retail Clerks Pension Trust account of each member of the bargaining unit, ten cents (10¢) per compensable hour, which payments are to be computed monthly." In the fall of 1974, Roda Lee was evicted from the Valu- Mart Discount Stores. It made an effort to sell the merchandise from those locations at its existing freestand- ing locations and, additionally, at newly opened freestand- ing stores. This, however, proved unsuccessful, with the result that on January 30, 1975, Roda Lee filed a "Petition in Proceedings for an Arrangement - Chapter XI." Though this action was taken pursuant to the Bankruptcy Act, it was not Roda Lee's intent to be declared bankrupt. Rather, from January 30, 1975, until April 28, 1976, Roda Lee was operated by a debtor in possession with the object of attempting to reorganize to resume normal operations. Ultimately, however, this proved unsuccessful also. Thus, on April 28, 1976, Roda Lee was declared and adjudicated bankrupt, the appointed trustee took over the assets, already submitted sealed bids for those assets were opened, and the trustee selected Respondent as the successful bidder. On the following day, April 29, 1976, Respondent commenced operating the same retail outlets which the debtor in possession had been operating. With respect to the ownership of the entities involved, 91 percent of the stock of Roda Lee is owned by Monte J. Berman and the remaining 9 percent is held by his stepfather, Leo Rosenblum, a New Jersey attorney. This ownership has remained constant throughout these pro- ceedings, although in April 1975 Leo Rosenblum made a $50,000 loan to Roda Lee, secured by inventory, "prior and superior to the rights and interest to all unsecured creditors but subject to pertinent costs and expenses of administra- tion .... " The object was to provide Roda Lee with money to purchase merchandise for resale. Berman holds no stock in Respondent. Leo Rosenblum owns over 70 percent of Respondent's stock and his nephew, Edward Rosenblum, who is also an attorney in Leo's office, holds the remaining stock, with the exception of 7 or 8 percent held by Jerome Shulkin as payment for his services as an attorney for Roda Lee during the bankruptcy proceedings. The directors of Roda Lee were Berman and the two Rosenblums, Leo and Edward. Respondent's directors are the two Rosenblums plus Shulkin. However, while Berman of all employees in the various stores, but the employees would be members of the particular locals having jurisdiction over where they worked. There is no contention that this arrangement tainted the bargaining relationship between the Union and Roda Lee nor, for that matter, that it should have any effect on resolution of the issues presented in this case. 2 At the hearing, Respondent contended that the employees at the West Seattle store had also been a recognized part of the collective-bargaining unit for which the Union served as the bargaining representative. This was disputed by the Union and, other than Berman's assertions, Respondent produced no evidence to support the contention that employees at the West Seattle store had been added to the collective-bargaining unit. Indeed, Berman acknowledged that, if the employees had been added to the unit, there would undoubtedly have been an "appendix" to the collective- bargaining agreement reflecting that fact, as is true of each of the four outlets which all agree were included. Yet no such appendix was produced by Respondent at the hearing, although Berman had ample time between the first and second day of the hearing to secure such an appendix if, in fact, is no longer a director, he has remained as the person in charge of day-to-day operations throughout these proceed- ings: as the person who served as president of Roda Lee, as the person appointed debtor in possession by the bankrupt- cy court, and as the vice president and general manager of Respondent. Furthermore, there has been a considerable overlap of the other corporate offices. Under Roda Lee the four corporate officers were Berman, the two Rosenblums, and Robert Galante, while for Respondent the four officers are Berman, the two Rosenblums, and Shulkin. Conse- quently, the only difference is that Galante has been replaced by Shulkin and that there have been shifts in the officers' positions occupied by Berman and the Rosen- blums. With respect to operations, Berman acknowledged that on and after January 30, 1975, Roda Lee continued to operate the same stores with the same fixtures, using the same part-time and full-time sales employees and the same corporate officers, selling the same merchandise, and located at the same corporate headquarters as had been the case prior to that date. The next 15 months, however, were ones of significant change as Berman endeavored to improve the financial status of the business. For example, during the debtor-in-possession period, Roda Lee phased out employees classified as buyers, paper distributors, truckdrivers, warehouse employees, accounts payable managers, keypunch operators, and data processors. Its New York City purchasing office was closed in the summer of 1975. Most of the stores were closed, including the Bremerton store, which was one of the four stores for which the Union was the employees' bargaining represen- tative.2 All of these events, however, were part of Berman's program to reduce overhead and generate sufficient cash to purchase new merchandise so that Roda Lee's business could be continued. Accordingly, the period was not one of liquidation of the business, but rather was one of activities designed to reorganize the business so that, once the creditors were satisfied, Roda Lee's operations could be continued. Moreover, there is no evidence that the closing of the Bremerton store had any effect upon employees in the other three stores in the bargaining unit who, so far as the record discloses, simply continued their sales activities in the same manner as prior to January 30, 1975, with the only difference being that the merchandise which they were selling was not newly purchased, but had been obtained it existed. In fact, while at one point during the second day of the hearing Berman said that he had had "some things to take care of at home" that evening and had not searched for an appendix covering employees at the West Seattle store, at another point on the same day he testified, "I read the contract over several times last night just to clarify the material in my mind." Moreover, while Evans testified that employees at West Seattle were compensated on the basis of the Bremerton terms and conditions of employment, she admitted that she had no idea of the reason. I find that the evidence does not support the assertion that employees at West Seattle were covered by the collective-bargaining agreement. Rather, I find that this contention was advanced in an effort to fortify Respondent's subsidiary claim that the Union had abandoned the employees, by showing that the Union had failed to adequately represent employees at two stores when it permitted both the West Seattle and Bremerton stores to be closed and the employees working there terminated, without taking any action on behalf of the employees. In fact, the only location where this did occur was at the Bremerton store, which was closed in July 1975. 330 JERSEY JUNIORS, INC. from the Valu-Mart Discount Store outlets or, as time passed, from other, now closed, freestanding facilities. With regard to Respondent's acquisitions of Roda Lee assets and commencement of operations, there was no hiatus in operations following the purchase of the assets on April 28, 1976. Respondent commenced operations on the same day at the same seven stores, with the same fixtures, employing the same managers and sales personnel, and selling the same merchandise. Since the summer of 1976 Respondent has made an effort to concentrate its sales efforts on high school and college clientele, who purchase primarily junior size apparel obtained from West Coast vendors. However, this same type of merchandise was sold by Roda Lee and there is no evidence that this change has resulted in any difference in the manner in which sales personnel perform their duties. With respect to the bargaining history, it is clear that, after the period of debtor-in-possession status commenced, Roda Lee continued to observe the terms and conditions of its collective-bargaining agreement with the Union. Thus it continued to make payments on behalf of the employees to the health and welfare fund and to the dental fund, continued to observe the contractual wage rates, and resolved at least two disputes, informally, concerning the payment of proper wages to employees (one of which involved the payment of vacation pay upon termination of an employee). Moreover, while Roda Lee did file a list of executory contracts with its petition under chapter XI, no mention of the collective-bargaining agreement with the Union was made in that document. To the contrary, in an affidavit which accompanied the petition, Berman listed "employee benefits" among the expenses which it was anticipated that Roda Lee would incur.3 As set forth above, under the collective-bargaining agreement pension benefit payments were to commence on November 1, 1975. However, no such payments were forthcoming from the debtor in possession. The trust fund notified Edgar T. Hardy, the Union's secretary-treasurer, of that fact in January 1976. Thereafter, Hardy attempted to contact both Berman and Dan Northfield, who normally dealt with the Union regarding labor relations matters, by telephone. Neither individual returned Hardy's calls, with the result that he then discussed the matter with Roda Lee's office manager, Judith Evans. Between January and April 8, 1976, Hardy had a total of four telephone conversations with Evans. In each of these conversations it is undisputed that Evans pleaded press of conflicting business as the reason for the failure to make the payments, asserted that Roda Lee was working on the matter, and promised that the payments would be forthcoming. At no point did Evans mention to Hardy that the chapter XI proceedings were in progress. Meanwhile, on February 23, 1976, the trust filed a complaint for breach of collective- bargaining agreement against Roda Lee in the superior court of Washington for King County. An audit was subsequently conducted of Roda Lee's payroll records, and it was determined that $498.05 was owing for pension payments. By letter dated April 2, 1976, the trust fund's attorney notified Roda Lee of the results of the audit. On 3 Asked about this item, Shulkin, who prepared the affidavit, testified that "employee benefits would normally mean the health and welfare April 5, 1976, a default judgment was entered against Roda Lee for this amount plus liquidated damages and costs. So far as the record discloses, none of this has yet been paid. The final facet of this matter occurred after Respondent began operating the stores. It continued making the dental and the health and welfare contributions to the appropriate trust funds. It continued paying the contractually specified wage rates to the employees. However, it did not make pension contributions. On May 24, 1976, the Union notified Berman, by letter, of its desire to "open the present labor agreement between Jersey Jrs. and [the Union] to discuss wages, hours and working conditions." By separate letter of that same date the Union requested, so that it could be better prepared for negotiations, that Berman supply for each employee in the unit the name, classifica- tion, date of hire, pay rate, date and amount of last wage increase, average weekly hours worked during the preced- ing 4-week period, and amounts of commissions earned or incentive paid during the prior 12-month period. On June 9, 1976, Hardy wrote a letter suggesting June 21, 1976, as the date upon which to commence negotiations. On the following day a lawyer in the firm of Casey, Pruzan, Kovarik & Schulkin wrote a letter to Hardy asserting that Respondent was not a successor to Roda Lee and that any collective-bargaining agreement with Roda Lee terminated when the latter was adjudicated "as a straight bankrupt" and its assets sold. On June 17, 1976, the Union's attorney responded to this letter, disputing its assertion that Respondent was not a successor to Roda Lee and renewing the request for the information sought in Hardy's May 24, 1976, letter. B. Analysis At root, this is a dispute concerning the number of entities involved and the precise operations which should be taken into account in measuring whether or not successor or alter ego status exists. The General Counsel contends that the operations of Roda Lee by the debtor in possession were a simple continuum of the operations of Roda Lee prior to January 30, 1975. Accordingly, the General Counsel argues that there are only two operative entities: Roda Lee and Respondent. Moreover, the Gener- al Counsel contends that the latter is at least a successor and at best an alter ego of the former. Respondent, however, argues that there are three distinct entities: Roda Lee, the debtor in possession, and Respondent. Moreover, Respondent asserts that the period in which Roda Lee was operated by the debtor in possession should not be taken into account in determining whether an alter ego or successor relationship exists. Rather, urges Respondent, the status of Respondent as successor or alter ego should be measured against the operations of Roda Lee prior to January 30, 1975. A review of the cases in this area leads me to conclude that the General Counsel has the better of this argument. A trustee in bankruptcy is an alter ego of the bankrupt employer. Cagle's, Inc., 218 NLRB 603, 604 (1975); Marion Simcox, Trustee of Wagner Shipyard and Marina, Inc., and benefits, it might mean pension benefits, it might mean dental care, what have you." 331 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Stateside Service, Inc. d/b/a Stateside Shipyard and Marina, Inc., 178 NLRB 516, 518 (1969). As Roda Lee's attorney, Shulkin, testified, a debtor in possession is empowered "with the right, title and power of a trustee in bankruptcy." Thus, for purposes of the Board's doctrine there is no distinction between the two and, indeed, at least one court has lumped debtor in possession under chapter XI or chapter X, trustee under chapter X, or trustee in a straight bankruptcy proceeding together for purposes of ascertain- ing the effect of the relationship to the debtor company. Shopmen's Local Union No. 455, International Association of Bridge, Structural and Ornamental Iron Workers, A.F.L- C.I.O. v. Kevin Steel Products, Inc., 519 F.2d 698, 704 (C.A. 2, 1975). Respondent points to Kevin Steel in arguing that a debtor in possession or trustee is not the same entity as the debtor. Indeed, the court did make such a statement. However, the distinction that was drawn by the court pertained only to that of a "juridical entity." Truck Drivers Local Union No. 807, International Brotherhood of Teamsters v. The Bohack Corporation, 541 F.2d 312, 320 (C.A. 2, 1976); In re Mammoth Mart, Inc., 536 F.2d 950, 954 (C.A. 1, 1976). In so doing, the court was resolving conflicts between section 313(1) of the Bankruptcy Act, permitting rejection of executory contracts, and Section 8(d) of the Act, prohibit- ing a "party" from terminating or modifying a collective- bargaining agreement without adhering to the require- ments set forth in that section. Bohack, supra at 320. Thus, in Kevin Steel the court held only that the bankruptcy laws authorized rejection of collective-bargaining agreements, like any other executory contracts, notwithstanding the provisions of Section 8(d) of the Act. Id. at 704. Nonethe- less, the court made clear that its holding was not to be construed as a nullification of collective-bargaining agree- ments upon commencement of bankruptcy. "Of course, the statement that the debtor is not a 'party' . . . cannot be taken literally, since neither affirmance nor rejection of the collective bargaining agreement would be possible by one not a party to it." Bohack, supra at 320. In fact, a debtor in possession is obliged not "to ignore its obligations under the labor act." Kevin Steel, supra at 706. Accordingly, collective-bargaining agreements remain in effect until such time as rejected by a bankruptcy court. In the instant case, Shulkin admitted that no motion or petition had been filed with the bankruptcy court to reject Roda Lee's collective-bargaining agreement with the Union. Therefore, after January 30, 1975, the debtor in possession, Berman, was the alter ego of Roda Lee and the collective-bargaining agreement remained in effect during the time that Berman operated Roda Lee as debtor in possession. Consistent with this finding, I reject Respon- dent's argument that its alleged successorship status should be measured against the operations of Roda Lee as conducted prior to January 30, 1975, before the filing under chapter XI. Rather, I find that the status of Respondent should be measured against the operations of the employing entity prior to assumption by Respondent. In this regard, while the debtor in possession made a number of changes which resulted in a reduction in the magnitude of Roda Lee's business, it concededly had not been Berman's intent in doing so to liquidate Roda Lee. To the contrary, he admitted that his efforts had been directed to reestablishing the credits and viability of Roda Lee so that the business could be continued. Moreover, notwith- standing the closure of the Bremerton store, where the employees had been represented by the Union, Respon- dent has failed to show that either the closure or the other changes effected by Berman during this period altered the working conditions of the employees at the three remaining stores in the bargaining unit. So far as the record discloses, these employees continued to perform their duties without change and without effect from the closure of the Bremerton store. With regard to the operations of the stores after April 28, 1976, there were, as Respondent points out, several changes. Thus, Berman ceased to possess an ownership interest. Respondent adjusted its sales policy to attempt to attract primarily high school and college students as customers, concentrating its advertising in school newspa- pers and adjusting its merchandising policy so that principally junior sizes of apparel were offered for sale. In addition, Respondent upgraded the quality of merchandise offered for sale to a significantly higher price range than had been the case with Roda Lee. Yet, while these factors do provide some indication of a change in the nature of the employing entity, see, e.g., Radiant Fashions, Inc., 202 NLRB 938 (1973), there are a number of other factors which, on balance, serve to establish that Respondent did perpetuate the continuity of the employing enterprise. On April 29, 1976, Respondent commenced operations which had been conducted on the immediately preceding day by the debtor in possession, without any hiatus in operations. So far as the record discloses, no mention of the change was made to either the employees in the retail stores or to the managers of those stores, all of whom apparently continued working in the same manner and fashion as when the stores were operated by the debtor in possession. These operations, moreover, were conducted by Respondent at the same stores, using the same fixtures and selling the same merchandise. Berman continued managing the day-to-day operations of Respondent, performing the same types of functions that he had been performing as debtor in possession, with the only change being that he ceased to be responsible to the bankruptcy court and became responsible instead to Leo Rosenblum, who, along with his nephew Edward, continued to serve both as officer and director of the business. Roda Lee's sole business had been the sale of apparel at the retail outlets. That is also the sole business of Respondent. One of the principal assets which Respondent purchased was the trade name of Roda Lee. Respondent has conducted its operations exclusively under that name and, in fact, has erected signs bearing that name outside stores which did not have such signs when operated under chapter XI. The headquarters office remained in the same location and Judith Evans continued to perform all office work at that location, albeit under a different title. While there was a change in clientele, this would not, of itself, serve to preclude a successorship finding. Randolph Rubber Company, Inc., 152 NLRB 496, 499 (1965). Further, Roda Lee apparently did carry junior sizes among its merchan- dise and, in any event, notwithstanding the age ranges of 332 JERSEY JUNIORS, INC. its customers, the simple fact is that, like Roda Lee, Respondent has continued to engage in the sale of apparel at retail. It has not changed the nature of its business to wholesaler or manufacturer, nor has it branched out into the sale of other items in addition to apparel. Therefore, I find that Respondent is a successor and, as such, was obliged to continue recognizing the Union as the representative of the employees at the Everett, Mt. Vernon, and Tacoma, Washington, retail clothing stores. By failing to do so and by rejecting the Union's request for information relating to the employees at those stores and for negotiations concerning the terms and conditions of employment of the employees at those stores, Respondent has violated Section 8(aX5) and (1) of the Act. The situation with regard to the payments to the pension trust fund requires a somewhat greater analysis. Since November 1975, Roda Lee had been obligated to make payments to the pension trust fund. However, the debtor in possession never did so. Thus, there is some basis for Respondent to argue that at the time that it assumed the operations formerly conducted by the debtor in possession it was not obliged to make such payments as they had never been made by the predecessor and, accordingly, had never become a term or condition of employment which may not be unilaterally altered under the doctrine of N.L R.B. v. Burns International Security Service, Inc., et al., 406 U.S. 272 (1972). In reply, the General Counsel argues that Respondent is the alter ego of Roda Lee and, consequently, is bound to the latter's contractual commit- ments. "A company which has not agreed to be bound by the collective-bargaining contract of another company may nevertheless be held to that contract if it is an alter ego of the signing company .... " Peter Kiewit Sons' Co. and South Prairie Construction Co., 206 NLRB 562 (1973), vacated on other grounds 518 F.2d 1040 (C.A.D.C., 1975), affd. in part, vacated in part, and remanded 425 U.S. 800 (1976). While many of the same factors are invoked to support findings of successor and of alter ego status, the simple fact is that the terms denote two quite separate doctrines. For example, the fact that a firm is not a successor does not preclude a finding that it is an alter ego. See Edward E. Schultz d/b/a Schultz Painting & Decorating Co., 202 NLRB 111, 115 (1973). Recently, the Supreme Court delineated what it meant by an alter ego in Howard Johnson Co., Inc. v. Detroit Local Joint Executive Boarde Hotel & Restaurant, etc., 417 U.S. 249, 259, fn. 5 (1974): It is important to emphasize that this is not a case where the successor corporation is the "alter ego" of the predecessor, where it is "merely a disguised contin- uance of the old employer." Southport Petroleum Co. v. NLRB, 315 U.S. 100, 106 (1942). Such cases involve a mere technical change in the structure or identity of the employing entity, frequently to avoid the effect of the labor laws, without any substantial change in its ownership or management. Comparison of this doctrine with the facts of the instant case discloses several factors which militate against finding Respondent to be the alter ego of Roda Lee. First, Roda Lee's assets were not transferred to Respondent through the voluntary action of Berman. It is undisputed that he made every effort possible to attempt to salvage Roda Lee as a viable operating entity and only his inability to achieve that end led to his surrender to the inevitable. In these circumstances, the evidence will not support any conclu- sion other than that there was a "bona discontinuance" of Roda Lee's business. Southport Petroleum, supra. Second, there is neither a contention nor evidence to support a contention that Berman's conduct as owner of Roda Lee and as debtor in possession was motivated by any nefarious purpose. Cf. Oilfield Maintenance Co., Inc., and Oilfield Maintenance & Engineering Co., Inc., 142 NLRB 1384 (1963); Intergraphic Corporation of America, 160 NLRB 1284 (1966). Rather, Berman was the victim of a series of events over which he had no control - eviction from the Valu-Mart Discount Stores, inability to generate sufficient sales of merchandise, inability to generate sufficient liquidity to purchase new merchandise, inability to generate sufficient profits to obtain the required indemnity bond. Consequently, Berman can hardly be cast in the role of an employer resorting to "deceit and subterfuges" to eliminate the Union's representation of its employees. Cf. Jack Lewis and Joe Levitan d/b/a California Footwear Company, 114 NLRB 765, 767 (1955), enfd. as modified 246 F.2d 886 (C.A. 9, 1957). Third, since Roda Lee continues as an undissolved business entity, since there was a formal declaration of bankruptcy with sealed bids accepted for the purchase of its assets and since neither Berman nor other officials of Roda Lee influenced the selection of the successful bidder, so far as the record discloses, it can hardly be concluded that the sale of assets to Respondent was a mere "paper arrangement." N.LR.B. v. Deena Artware, Inc., et al., 361 U.S. 398, 403 (1960). In other words, the transaction has not been shown to have been simply a change effected under the control and guidance of the owners of Roda Lee. Finally, while Berman owned virtually all of the stock of Roda Lee, he has no shareholder interest in Respondent. Of course, the Rosenblums, one of whom held a distinctly minority interest in Roda Lee, do hold almost all of Respondent's stock and are related to Berman. Yet, there is no evidence that Respondent is being operated as a front for Berman's interests, cf. American Trailer & Equipment Corp. and its Brunswick Body Works Division, 151 NLRB 867 (1965), nor is there any evidence that the Rosenblums are merely holding the stock of Respondent for ultimate purchase by Berman. Indeed, the latter is a somewhat unlikely prospect given the virtually penniless condition to which Berman has been rendered as a result of Roda Lee's bankruptcy. Of course, Berman may ultimately receive some money, which could be used to purchase Respon- dent's stock, should the suit against Valu-Mart Discount Stores be successful. However, that is a somewhat thin reed on which to predicate alter ego status. Therefore, I find that the evidence is not sufficient to establish that Respondent resulted from "a mere technical change in the structure or identity of' Roda Lee or that Respondent is "merely a disguised continuance of" Roda Lee. See International Offset Corporation, et al., 210 NLRB 854, 865-867 (1974). 333 DECISIONS OF NATIONAL LABOR RELATIONS BOARD This, then, leaves the question of whether, under successorship principles, Respondent should have bar- gained with the Union before continuing the nonpayment of contributions to the pension fund. "Although a succes- sor employer is ordinarily free to set initial terms on which it will hire the employees of a predecessor, there will be instances in which it is perfectly clear that the new employer plans to retain all of the employees in the unit and in which it will be appropriate to have him initially consult with the employees' bargaining representative before he fixes terms." N.L.R.B. v. Burns International Security Services, Inc., 406 U.S. at 294-295 (1972). The pension contributions were, of course, one of the terms of Roda Lee's employees' employment. Although they were never implemented, this appears not to have resulted from a dispute over the basic obligation, but rather arose from financial inability. Nonetheless, Evans did acknowledge Roda Lee's obligation to make those payments during her telephone conversations with Hardy.4 These conversations also demonstrate that the Union was making efforts to collect the money owing and that it had not abandoned the employees' rights to have the contributions made on their behalf. Finally, Respondent had knowledge of the Union's efforts to secure payment of the promised contributions. Evans became Respondent's controller. Berman, who acknowledged that he had been aware of the audit conducted to ascertain the amount of contributions owing, continued as the operating officer of Respondent, as he had been when the stores were owned by Roda Lee. Further, I find it most unlikely that Shulkin would not have been aware of the trust fund's lawsuit in the King County superior court, given the fact that its institution was arguably contrary to the bankruptcy court's order staying all proceedings against the debtor. Accordingly, at least one and probably three of Respondent's officials had knowledge of the Union's efforts to compel Roda Lee to observe the term of its employees' employment as em- bodied in the agreement which it made with the Union. In sum, the instant case presents a situation where the predecessor agreed upon a term of employment but, due to abnormal circumstances, did not observe it during the period immediately prior to the successor's continuation of the employing entity. The Union made efforts to achieve compliance and the successor was aware of those efforts, as well as of the claim upon which those efforts to achieve compliance were based. At no point did the predecessor disavow the basis of that claim. To permit a successor to unilaterally disavow observance of such a term of employ- ment would be to permit the normal successorship obligation to be disrupted by an event (financial inability) over which no party - union, predecessor, successor, employees - had control. In the process this would 4 I reject Respondent's contention that Evans' conduct cannot be construed as binding upon Roda Lee because she had no specific authority to act in the area of labor relations. It is abundantly clear that, as the period of debtor-in-possession status progressed, Evans became charged with greater and greater responsibility for the conduct of office operations. Indeed. it is acknowledged that among her responsibilities was that of ensuring that the appropriate payments under the collective-bargaining agreement were forthcoming. In this capacity, Evans had dealt with the Union's grievance director, Fred Rosenberry, in settling at least one dispute in 1976. The subject of Hardy's call did not involve negotiating a new term of employment, but rather pertained to implementation of an already deprive the employees of a term of employment which no one disputes their right to enjoy and which they would enjoy but for the inability of the predecessor to perform - an inability predicated upon circumstances that have not been shown to plague the successor. Conversely, no great burden is placed upon the successor for it is required only that the successor negotiate about a proposed discontin- uance with the Union and not that the latter's consent to such a proposal be secured before implementation. As was stated by the Board in Ozark Trailers, Incorporatec4 et al., 161 NLRB 561, 568 (1966), where the subject matter at issue was different but the governing principles the same: [A]n employer's obligation to bargain does not include the obligation to agree, but solely to engage in a full and frank discussion with the collective-bargaining representative in which a bona fide effort will be made to explore possible alternatives, if any, that may achieve a mutually satisfactory accommodation of the interests of both the employer and the employees. If such efforts fail, the employer is wholly free to make and effectuate his decision. Hence, to compel an employer to bargain is not to deprive him of the freedom to manage his business. Therefore, I find that Respondent did violate Section 8(a)(5) and (1) of the Act by failing and refusing to make pension contributions without prior notification to and bargaining with the Union. V. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of Respondent set forth above, occurring in connection with Respondent's operations 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, and have led, to labor disputes burdening and obstructing commerce and the free flow of commerce. CONCLUSIONS OF LAW 1. Jersey Juniors, Inc., is an employer within the meaning of Section 2(2) of the Act, engaged in commerce and in a business affecting commerce within the meaning of Section 2(6) and (7) of the Act, and is the successor employer to Roda Lee, Inc. 2. Retail Store Employees Union, Local 1001, AFL- CIO, is a labor organization within the meaning of Section 2(5) of the Act. 3. A unit appropriate for collective bargaining is: All employees employed by Jersey Juniors, Inc., at its retail negotiated employment term and, accordingly, did not involve Evans in any conduct dissimilar to that which she had been conducting: implementation of the terms of employment as agreed upon between the Union and Roda Lee. Therefore, the fact that Evans lacked authority to negotiate on behalf of Roda Lee did not preclude her from acting as its agent in resolving problems of implementation of the terms of employment agreed upon by other officials. In these circumstances, and inasmuch as Berman did not return Hardy's calls (a fact which clearly refutes any asserted doubt of the Union's continued representative status), I find that Evans did speak on behalf of Roda Lee. 334 JERSEY JUNIORS, INC. clothing facilities located in Everett, Mt. Vernon, and Tacoma, Washington; excluding guards and supervisors as defined in the Act. 4. At all times material, Retail Store Employees Union, Local 1001, AFL-CIO, has been the exclusive collective- bargaining representative of the employees in the above- described unit within the meaning of Section 9(a) of the Act. 5. By unilaterally withholding pension benefit contri- butions, by failing and refusing to furnish information regarding unit employees, and by failing and refusing to meet and confer with Retail Store Employees Union, Local 1001, AFL-CIO, with regard to rates of pay, wages, hours of employment, and other terms and conditions of employment of employees in the bargaining unit described in Conclusion of Law 3, above, I find that Jersey Juniors, Inc., violated Section 8(aX5) and (1) of the Act. 6. The aforesaid unfair labor practices affect commerce within the meaning of Section 2(6) and (7) of the Act. THE REMEDY Having found that Jersey Juniors, Inc., engaged in certain unfair labor practices, I shall recommend that it be ordered to cease and desist therefrom and that it take certain affirmative action to effectuate the policies of the Act. Having found that Jersey Juniors, Inc., unilaterally withheld pension benefit contributions owing employees in the appropriate unit described in Conclusion of Law 3, above, I shall recommend that Jersey Juniors, Inc., reimburse employees for the loss of moneys withheld from the fund by making the required contributions, with interest at 6 percent per annum, until such time as Jersey Juniors, Inc., negotiates in good faith with Retail Store Employees Union, Local 1001, AFL-CIO, to a new agreement or an impasse. Harold W. Hinson, d/b/a Hen House Market No. 3, 175 NLRB 596 (1969). 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 5 The Respondent, Jersey Juniors, Inc., Everett, Washing- ton, its officers, agents, successors, and assigns, shall: 1. Cease and desist from: (a) Withholding pension benefits owing to employees represented by Retail Store Employees Union, Local 1001, AFL-CIO, in the following bargaining unit: All employees employed by Jersey Juniors, Inc., at its retail clothing sales facilities located at Everett, Mt. Vernon, and Tacoma, Washington; excluding guards and supervisors as defined by Section 2(11) of the Act. (b) Failing and refusing to furnish the Retail Store Employees Union, Local 1001, AFL-CIO, with requested relevant information regarding employees in the above- described unit. (c) Failing and refusing to meet and confer with Retail Store Employees Union, Local 1001, AFL-CIO, in re- sponse to the latter's request, with regard to rates of pay, hours of employment, and other terms and conditions of employment of employees in the above-described bargain- ing unit. (d) In any manner interfering with, restraining, or coercing employees in the exercise of any right guaranteed them by Section 7 of the Act. 2. Take the following affirmative action which is necessary to effectuate the purposes of the Act: (a) Upon request, bargain collectively with Retail Store Employees Union, Local 1001, AFL-CIO, as the exclusive bargaining representative of all employees employed in the bargaining unit heretofore found appropriate in Conclu- sion of Law 3, above. (b) Upon request, furnish Retail Store Employees Union, Local 1001, AFL-CIO, with requested relevant informa- tion pertaining to the employees employed in the bargain- ing unit heretofore found appropriate in Conclusion of Law 3, above. (c) Make whole employees represented by Retail Store Employees Union, Local 1001, AFL-CIO, in the appropri- ate unit described above by paying all pension contribu- tions which have not been paid and which would have been paid absent the unlawful conduct of Jersey Juniors, Inc., found herein, and continue such payments until such time as Jersey Juniors, Inc., negotiates in good faith with Retail Store Employees Union, Local 1001, AFL-CIO, to a new agreement or an impasse. (d) Preserve and, upon request, make available to the Board or its agents, for examination and copying, all payroll and other records necessary to compute the backpay as set forth in "The Remedy" section of this Decision. (e) Post at the Everett, Mt. Vernon, and Tacoma, Washington, retail clothing stores copies of the attached notice marked "Appendix." 6 Copies of said notice, on forms provided by the Regional Director for Region 19, 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 conspicuous places, includ- ing all places where notices to employees 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 19, in writing, within 20 days from the date of this Order, what steps Respondent has taken to comply herewith. 5 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 become its findings, conclusions, and Order, and all objections thereto shall be deemed waived for all purposes. 6 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." 335 DECISIONS OF NATIONAL LABOR RELATIONS BOARD APPENDIX NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government The National Labor Relations Act, as amended, gives all employees the following rights: To organize themselves To form, join, or support unions To bargain as a group through a representative they choose To act together for collective bargaining or other mutual aid or protection To refrain from any or all such activities except to the extent that the employees' bargain- ing representative and employer have a collective- bargaining agreement which imposes a lawful requirement that employees become union mem- bers. In recognition of these rights, we hereby notify our employees that: WE WILL NOT refuse to bargain with Retail Store Employees Union, Local 1001, AFL-CIO, as the collective-bargaining representative of the employees in the appropriate unit: All employees employed by Jersey Juniors, Inc., at its retail clothing stores at Everett, Mt. Vernon, and Tacoma, Washington; ex- cluding guards and supervisors as defined in the Act. WE WILL NOT refuse to provide relevant information to Retail Store Employees Union, Local 1001, AFL- CIO, with respect to employees in the above-described bargaining unit. WE WILL NOT withhold payments from your pension trust fund without contacting Retail Store Employees Union, Local 1001, AFL-CIO, and bargaining about withholding such payments. WE WILL NOT in any manner interfere with, restrain, or coerce you in the exercise of your rights under the National Labor Relations Act as set forth above. WE WILL recognize and bargain collectively with Retail Store Employees Union, Local 1001, AFL-CIO, as the exclusive collective-bargaining representative of employees in the above-described bargaining unit. WE WILL, upon request, furnish the Retail Store Employees Union, Local 1001, AFL-CIO, with rele- vant information regarding the employees in the above- described bargaining unit. WE WILL notify and bargain with Retail Store Employees Union, Local 1001, AFL-CIO, before withholding contributions from the pension trust fund. WE WILL make whole all employees in the above- described bargaining unit by payment of contributions to the pension fund for the period on and after April 29, 1976, with interest at 6 percent per annum, which would have been made absent our unilateral withhold- ing of those amounts. JERSEY JUNIORS, INC. 336