Malone, Michael J., and Bob Burkheimer d/b/a Sorrento Hotel

DECISIONS OF NATIONAL LABOR RELATIONS BOARD Michael J. Malone and Bob Burkheimer d/b/a Sor- rento Hotel and Hotel, Motel, Restaurant Em- ployees and Bartenders Union, Local 8, AFL- CIO. Cases 19-CA-12766 and 19-CA-12831 March 7, 1983 DECISION AND ORDER BY CHAIRMAN MILLER AND MEMBERS JENKINS AND ZIMMERMAN On July 29, 1982, Administrative Law Judge Richard J. Boyce issued the attached Decision in this proceeding. Thereafter, Respondent filed ex- ceptions and a supporting brief;' Hotel, Motel, Restaurant Employees and Bartenders Union, Local 8, AFL-CIO, the Charging Party, filed a reply brief; and the General Counsel filed a brief in opposition to Respondent's exceptions. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the Na- tional Labor Relations Board has delegated its au- thority in this proceeding to a three-member panel. The Board has considered the record and the at- tached Decision in light of the exceptions and briefs and has decided to affirm the rulings, find- ings, 2 and conclusions of the Administrative Law Judge and to adopt his recommended Order, as modified below.3 ' Respondent's request to reopen the record for the introduction of ad- ditional evidence is hereby denied as the record as made at the hearing is adequate for the purposes of our decision and the evidence Respondent seeks to introduce is neither new nor previously unavailable. In any event, even if the evidence were to be considered and credited, the out- come of this case would remain the same. 2 Respondent has excepted to certain credibility findings made by the Administrative Law Judge. It is the Board's established policy not to overrule an administrative law judge's resolutions with respect to credi- bility unless the clear preponderance of all of the relevant evidence con- vinces us that the resolutions are incorrect. Standard Dry Wall Products, Inc., 91 NLRB 544 (1950), enfd. 188 F.2d 362 (3d Cir 1951). We have carefully examined the record and find no basis for reversing his findings. 3 In our recent decision in Parker-Robb Chevrolet, Inc., 262 NLRB 408 (1982), we held that the protection of the Act does not extend to supervi- sors who are disciplined or discharged as a result of their participation in union or concerted activities. In so doing, we overruled those cases which held that a violation is established when the discipline or discharge of a supervisor is an "integral part" of an employer's pattern of unlawful conduct directed against employees, the theory on which the Administra- tive Law Judge relied in ordering Respondent to reinstate and make whole any supervisors discharged by Respondent. Accordingly, we con- clude, for the reasons fully set forth in Parker-Robb, that there is no basis here for finding the discharge of the supervisors unlawful. The Adminis- trative Law Judge's recommended Order is therefore modified to delete that portion of par. 2(d), fn. 31, extending the remedial order of this De- cision to any supervisors discharged by Respondent on September 22, 1980. Additionally, the phrase "those terminated," contained in par. 2(d) of the Administrative Law Judge's recommended Order, is hereby clari- fied to encompass only statutory employees. For the reasons set forth in his concurrence in Parker-Robb, Member Jenkins would affirm that portion of the Administrative Law Judge's rec- ommended Order requiring Respondent to reinstate, with backpay, any supervisors discharged by Respondent on September 22, 1980. In his recommended Order, the Administrative Law Judge also or- dered Respondent to, upon the Union's request, reinstate pension and health and welfare coverages as they existed on August I, 1980, and to 266 NLRB No. 67 ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Re- lations Board adopts as its Order the recommended Order of the Administrative Law Judge, as modi- fied below, and hereby orders that the Respondent, Michael J. Malone and Bob Burkheimer d/b/a Sor- rento Hotel, Seattle, Washington, its officers, agents, successors, and assigns, shall take the action set forth in the said recommended Order, as so modified: 1. Delete paragraph 3 of footnote 31 of the Ad- ministrative Law Judge's Decision. 2. Insert "statutory employees" after "those" and before "terminated" in paragraph 2(d). 3. Insert "statutory employees on" after "termi- nations of" and before "September 22" in para- graph 2(e). 4. Substitute the attached notice for that of the Administrative Law Judge. make employees whole for any loss of benefits they may have suffered as a result of Respondent's unilateral changes. While we agree with this sec- tion of the Administrative Law Judge's recommended Order, in no event should it be construed as requiring Respondent to provide double cover- age to its employees in these areas. APPENDIX NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government The hearing held in Seattle, Washington, on Febru- ary 1-2, 1982, in which we participated and had a chance to give evidence, resulted in a decision that we had committed unfair labor practices in viola- tion of Section 8(a)(l), (3), and (5) of the National Labor Relations Act, as amended, and this notice is posted pursuant to that decision. Section 7 of the National Labor Relations Act gives all employees the following rights: To organize themselves To form, join, or support unions To bargain as a group through a repre- sentative they choose To act together for collective bargaining or other mutual aid or protection To refrain from any or all such activity except to the extent that the employees' bar- gaining representative and employer have a collective-bargaining agreement which im- poses a lawful requirement that employees become union members. 350 SORRENTO HOTEL WE WILL NOT refuse to recognize and bar- gain collectively with Hotel, Motel, Restau- rant Employees and Bartenders Union, Local 8, AFL-CIO, as the exclusive representative of our food and beverage and hotel employees in the appropriate unit embraced by the 1978- 81 collective-bargaining agreement between Third Brigade Corporation and said Union, with respect to rates of pay, wages, hours of employment, and other terms and conditions of employment. WE WILL NOT change any term or condition of employment of the employees in the afore- mentioned unit, including pension and health and welfare coverages, without first giving the above-named Union a chance to bargain over such change. WE WILL NOT close portions of our hotel business, with attendant loss of unit work, without first giving the above-named Union a chance to bargain over the effects of such clo- sure. WE WILL NOT terminate an entire comple- ment of unit employees, or a substantial por- tion thereof, without first giving the above- named Union a chance to bargain over the de- cision and its effects on those employees. WE WILL NOT terminate or otherwise dis- criminate against employees to avoid having to recognize and bargain with the above-named Union, or any other labor organization. WE WILL NOT in any like or related manner interfere with, restrain, or coerce employees in their exercise of rights under Section 7 of the Act. WE WILL recognize and upon request bar- gain collectively with the above-named Union, as the exclusive representative of our employ- ees in the aforementioned unit, with respect to rates of pay, wages, hours of employment, and other terms and conditions of employment, and, if an understanding is reached, embody it in a signed document. WE WILL, upon request of the above-named Union, revoke any or all changes in pension and health and welfare coverages made with- out first giving the Union a chance to bargain, and, if requested, restore coverages as they ex- isted up to August 1, 1980, maintaining such coverages as are restored until we negotiate with the Union in good faith to agreement or to an impasse in negotiations. WE WILL make whole employees who worked in the aforementioned unit at any time on or after August 1, 1980, with interest, for any loss of benefits they may have suffered be- cause of the changes in pension and health and welfare coverages made by us without first giving the above-named Union a chance to bargain. WE WILL offer to those statutory employees terminated on September 22, 1980, if we have have not already done so, immediate and full reinstatement to their former positions or, if such positions no longer exist, to substantially equivalent positions, without prejudice to their seniority or other rights and privileges; and make them whole, with interest, for any loss of earnings they may have suffered because of the discrimination against them. WE WILL expunge from our files any refer- ence to the terminations of statutory employ- ees on September 22, 1980, and notify those terminated in writing that this has been done and that evidence of those unlawful termina- tions will not be used as a basis for future per- sonnel actions against them. MICHAEL J. BURKHEIMER HOTEL MALONE AND BOB D/B/A SORRENTO DECISION STATEMENT OF THE CASE RICHARD J. BOYCE, Administrative Law Judge: This matter was heard before me in Seattle, Washington, on February I and 2, 1982. The underlying charges were filed on September 11 and October 3, 1980, by Hotel, Motel, Restaurant Employees and Bartenders Union, Local 8, AFL-CIO (the Union). The complaint issued on April 15, 1981, and alleges that Michael J. Malone and Bob Burkheimer d/b/a Sorrento Hotel violated Sec- tion 8(a)(5) and (1) of the National Labor Relations Act (the Act) on and after August 8, 1980, by refusing to rec- ognize and bargain with the Union as the representative of the hotel employees; and violated Section 8(a)(5), (3), and (1) on September 22, 1980, by discharging "substan- tially all" of the hotel employees without prior notice to, and for the purpose of eliminating, the Union. I. JURISDICTION The Sorrento is a Seattle hostelry. Its annual revenues, from room rentals and the sale of food and drink, exceed $500,000, and its annual purchases from outside the State of Washington exceed $50,000. The Sorrento has been owned at relevant times by First Hill Investors (First Hill). As is later detailed, it was operated from August 1 through September 22, 1980, by Michael J. Malone and Robert B. Burkheimer, apparently as partners, under an "Interim Management Agreement," with First Hill; and has been operated from September 23, 1980, by a joint venture, as it is styled, 351 DECISIONS OF NATIONAL LABOR RELATIONS BOARD comprised of Malone and Burkheimer, under a 50-year lease agreement with First Hill. I It is concluded that the entity of Malone and Burk- heimer, however styled (hereinafter Respondent), has been the employer of the Sorrento employees continu- ously since Agust 1, 1980,2 and as such has been and is engaged in activities affecting commerce within the meaning of Section 2(2), (6), and (7) of the Act. II. I'HE AI.l.:EGED MISCONDUCT A. Facts The Interim Management Agreement was entered into and became effective on August 1. It was, by its terms, "in anticipation of a successful conclusion of negotia- tions" leading to a long-term lease agreement, and was to obtain for 120 days, "or until the earlier consummation of a lease agreement." 3 It provided, among other things, that Respondent "will take over the management of the Sorrento Hotel on August I .... " The anticipated long-term lease agreement, entered into September 23 and effective from that date until September 22, 2030, authorizes Respondent to operate "a parking garage, hotel, restaurant and cocktail lounge, and all activities of the type commonly conducted by restaurants and hotels of similar status in the metropolitan Seattle area ... ." The Sorrento had been operated from February 1972 through July 31, 1980, by Third Brigade Corporation ' The Interim Management Agreement, on its face, was between First Hill and "Messrs. Michael J Malone and Robert B. Burkheimer (Malone/Burkheimer)." The 50-year lease agreement identifies the lessee as "The Sorrento Hotel Joint Venture." It was signed for the lessee by Malone and Burkheimer, and names them in the jurat as "the venturers of The Sorrento Hotel Joirt Venture." Malone testified that the joint venture was created September 23, pre- liminary to execution of the lease agreement, by a "formal, written" in- strument; that it consists of Burkheimer. Malone, and Malone's wife, Mary; and that Burkheimer owns a 50-percent interest, Malone and Mary owning separate 25 percent interest. The lease agreement nowhere men- tions Mary. A legal document executed in the name of the joint venture in March 1981, like the aforementioned jurat. states that it "is composed of' Malone and Burkheimer, making no reference to Mary. Malone. in an attempted explanation of Mary's nonmention, testified that, while he alone or he and Burkheimer have signed for the joint ven- ture "on numerous occasions." the two of them, plus Mary, have signed "on probably as equal number of occasions." Neither the instrument giving life to the joint venture, nor any other document purporting to show Mary's involvement in it. is in evidence. It is concluded, based on the absence of documentary corroboration, the presence of counter-documentation in the form of the lease agreement and the March 1981 document. arind the lack of conviction attending Ma- lone's testimony on the point, that the joint venture does not include Mary, and is an entity indistinguishable for purposes of the Act from that which operated the Sorrento under the Interim Management Agreement. Malone's discredited testimony about Mary's participation presumably was intended to impart the illusion that the joint venture is an entity apart from the interim agreenent's "Malone/Burkheimer," thereby creat- ing distance between the joint venture and the alleged misconduct. 2 As is more fully developed later, Respondent's argument is rejected that First Hill was the employer from August I through September 22. See text accompanying fns. 2(1 and 21, ri/na. a In fact, according to Malone, the "basic terms" of the long-term agreement had been worked out possibly as early as late June or early July, leaving an unclear title as perhaps the only impediment to entry into such ait agreement as of August 1. Malone recalled that the original title report contained over 30 exceptions "an incredible financial fiasco as far as encumbrances." (Third Brigade), under lease from First Hill.4 At the time of Third Brigade's departure, the hotel had 150 guest rooms, some of which were uninhabitable because of deterioration, and one regularly open restaurant and bar, the Sir Dunbar. It also had two facilities for ban- quets and meetings, the Luau Room and the Top O The Town. The payroll consisted of approximately 25 nonsu- pervisory employees. About 15 were engaged in assorted food and beverage activities in connection with the Sir Dunbar, the rest performing housekeeping, desk-clerking, and other purely hotel-type functions. These employees were covered by a collective-bargaining agreement be- tween Third Brigade and the Union, effective from June 1, 1978, through May 31, 1981. 5 On August 1, coincident with its assumption of man- agement responsibility under the interim agreement, Re- spondent placed a friend and former employee of Ma- lone's, Diane Vukov, "in charge of' the hotel, giving her the title of manager and instructing her "to see that things really ran very much the same" as before.6 As Malone testified: [T]here's no question as to what my and Burk- heimer's role was during the period, and that was simply as an overseer of the operation to try and simply maintain the status quo of the restaurant and whatever activity within the hotel during the period of which we were trying to clear the title and sign a formal lease agreement. Apart from Vukov's becoming manager, there were no major personnel changes either as an incident of Third Brigade's leaving or during the ensuing approximately 7 weeks that the interim agreement was in effect. The only changes were Vukov's hire of a dishwasher to replace one who had quit, and Malone's hire of two "handymen" to upgrade three guestrooms. The Union learned of the change in management in early August, soon after its occurrence, during a chance encounter between its business manager, Mario Vaccar- ino and First Hill's managing partner, M. E. Burke. Burke disclosed that Third Brigade was out and that "a fellow named Malone was taking . . . over" operation of the hotel. Vaccariono asked if Malone was "going to be running it for" Burke. Burke answered no, that he was "just the landlord and it's [Malone's] baby." In early August, as well, Vukov called the Union about the proper wage for an employee doubling as bar- tender and waitress. The employee had "made it very clear," according to Vukov, "that she was a union em- ployee and [that] she wanted those [union] wages." Two telephone conversations with Vaccarino resulted. In the 4On July 31, in anticipation of the August I development between First Hill and Respondent and because economic hard times had prevent- ed its meeting the terms of its lease, Third Brigade provided First Hill with a letter stating that it "waive[d] and release[dl any and all interest" in the lease "effective immediately," and had "abandoned the premises." 5 It is concluded that the Union is a labor organization within Sec 2(5) of the Act, and that the union embraced by the 1978-81 agreement is ap- propriate for purposes of the Act. 6 Vukov, to become acquainted with the operation, had been a full- time "observer" on the premises, with Third Brigade's acquiescence, since mid-July. 352 SORRENTO HOTEL first, Vaccarino "made some reference to the fact that there was a union contract," as Vukov recalled; and, in the second, he informed her that August pension and health and welfare contributions "on all employees" would be due September 10.7 Sandwiched between the two conversations, the Union sent Vukov a copy of the master agreement between it and the Seattle Restaurant Association and the Seattle Hotel Association, along with a brochure "outlining the benefits and the scale." On August 8, Vaccarino sent a letter to Malone stat- ing: Hotel, Motel, Restaurant Employees and Bartenders Union is the certified bargaining agent of the em- ployees of the Sorrento Hotel. As the successor to the previous owners, you are bound to honor the terms and conditions of the at- tached contract unless and until we negotiate differ- ent terms. 8 We look forward to working with you for our mutual benefit. Malone replied by letter dated September 2, stating: I have received your letter of August 8, 1980, ad- dressed to me at the Sorrento Hotel. I fear that you have been misinformed regarding the status of the Hotel's ownership and management. For the past eleven years or thereabouts, the Sor- rento has been managed by the Third Brigade Cor- poration under a lease with the owners of the prop- erty, First Hill Associates. Neither I, nor my part- ner, Bob Burkheimer, have any interest in either Third Brigade Corporation or First Hill Associates. It is my understanding that Third Brigade has de- faulted on its lease obligations. My partner and I have expressed an interest in negotiating a lease Vukov also had a telephone conversation in August with Ellen Carney, a business agent for the Union Carney testified that she asked if Vukov would need help filling out the forms to be submitted with contri- butions to the Union's health and welfare plan; and that she offered to meet with Vukov and go through the bargaining agreement "page by page." Vukos replied. according to Carne), that she would not need help with the forms because she had already spoken with the health and wel- fare office. which had been "most cooperatise." but that she was "look- ing forward to" going through the agreement. Carney, added that such a meeting never materialized. Vukov testified that, while she had a conversation with a woman from the Union, whose name she could not recall, she remembered it as con- cerning health and welfare forms. and that the woman said she would place some in the mail Vukov assertedly had no recall of any reference in this conversation to the bargaining agreement. It is not necessary to resolve these testimonial discrepancies between Carney and Vukow 8 Respondent. through Malone, introduced in evidence a contract doc- ument asserted by Malone to have accompanied Vaccarino's letter The document, which identifies the employer-party as "Third Brigade Corp., dba Sorrento Hotel." contains food and beverage, but not housekeeping. classifications. Vaccarino testified that the Union had never agreed with Third Brigade to the exclusion of housekeepers from the unit, that he "never sent out a partial contract" to Malone, and that "it would appear" that the page dealing with the housekeeping classifications had been re- moved Vaccarinio added that, while food-and-beverage and housekeep- ing employees are treated ias in separate units in some hotels, this was not so at the Sorrento The master agreement received by Vukov contained both categories of classlficatlon with the owners of the property, First Hill Asso- ciates, and have, for some time, been engaged in ne- gotiations which may lead to an agreement. These negotions [sic] have not, to date, been finalized, however. In conjunction with the owners of the property, and in order to avoid damage or deterio- ration to the hotel's assets, we have placed an ob- server on the premises. In the event that we secure a lease from the proper- ty's owners, we do not intend to assume any of the prior tenant's obligations. In addition, we intend to make significant changes in the hotel's organization, physical plant, and personnel. We would not, under the circumstances consider ourselves to be the "suc- cessor" to the Third Brigade Corporation. Persons employed by the present operators of the Sorrento will, of course, be eligible for employment by our company in the event a lease is finalized. We will, if you wish, be happy to provide you with the application forms to be filled out by present em- ployees. Those present Sorrento Hotel employees seeking work after the execution of a new lease will be considered on their merits. If you should desire further information regarding our plans, please feel free to contact me. Upon receiving Malone's letter, Vaccarino confronted Burke by telephone, citing the discrepancies between it and Burke's prior representation to him. Burke stated, much as before, "All I am is the landlord, and Mike Malone is the proprietor." This presumably triggered the first of the charges herein, filed September I 1. The stability of the employee complement was shat- tered September 22-the day before the long-term lease became operative. All personnel were summoned to a meeting that afternoon, to be given termination notices. The notices, over Burke's name, stated: Re: Termination of Employment TO EMPLOYEES OF THE SORRENTO HOTEL: As you may know, Third Brigade Corporation has defaulted in its leasehold obligations and has not op- erated the property since August 1, 1980. In the meantime, First Hill Investors has arranged for Malone/Burkheimer to carry on operations on a caretaking basis pending negotiations of a lease. Ne- gotiations have been completed and it is anticipated that a lease will be signed on September 23, 1980, whereby the joint venture will take over operations. As of September 22, 1980, First Hill Investors will no longer operate the hotel and restaurant. This letter is to notify you that employees of the restau- rant and hotel are terminated effective September 22, 1980. The new operators advise that present Sorrento employees will be eligible for employment by the new tenants. If you wish to apply for a posi- tion with the new tenants, you should obtain and 353 DECISIONS OF NATIONAL LABOR RELATIONS BOARD complete an application form. Applications are pres- ently available at the Front Desk of the hotel. Malone "started off" the meeting by introducing Burke, who more or less recited the contents of the notices. Malone then announced that the Sir Dunbar would be closed for "about four weeks" for renovation, but that the hotel "would stay open"; and, echoing the notices, that application forms were available for those interested in rehire. Most of the deposed employees submitted ap- plications following the meeting. Respondent gave the Union no word of, much less op- portunity to bargain about, the terminations and the im- pending closure of the Sir Dunbar. Hence, the second charge, filed October 3. The Sir Dunbar in fact was closed for about 8 weeks, reopening November 25 as The Hunt Club. The Sorren- to offered no food or beverage service in the meantime, obviating immediate rehire or replacement of the dis- charged food and beverage employees. When The Hunt Club opened, the space having been "gutted" and com- pletely rearranged and reappointed in the interim, it was staffed by all new personnel-some 23 in all, of whom 4 were considered supervisory. The hotel proper stayed open without disruption until December 3, when it was closed for a thorough over- haul, re-equipping, and refurnishing, which took a year to complete. Vukov, retained as manager, testified that she "really just kept things running as they had been before" until the closure. Aside from her, the hotel was staffed after September 22 by four carryovers dating back to Third Brigade's time, along with the two handy- men previously mentioned and eight without prior Sor- rento experience. The carryovers were rehired promptly after the formality of being terminated September 22, the decision concerning whom to retain having been made in the preceding week or so. The new hires, similarly, were recruited during the preceding week.9 Those carried over included the former food and bev- erage manager, who was assigned to the front desk; two former front desk employees, who were retained in those positions; and one housekeeper, who continued in that capacity. Vukov testified that these were "key people" whom she felt "could be of a great deal of assistance to [her], with [her] lack of knowledge" of the hotel busi- ness. Others were not retained, she asserted, because, "by watching their ability, their work, what they had done," she felt "they weren't qualified." Vukov's effort to bul- wark this assertion, employee-by-employee, was a la- bored and unimpressive mix of abstractions, conjecture, and flawed recall. lo She admittedly warned no one 9 Those not retained, when invited on September 22 to submit applica- tions, did not know that their replacement already had been procured. Vukov testified that there was "quite a bit of turnover initially" among the new hires. "because they were not willing to undertake getting a room really clean." The former employees were not sought as replace- mlents when this happened. 'o Thus. Vukov testified that she "would imagine" one was not rehired "because of the quality of work," but that she could not "think of any- thing specific" in that respect; that another was not retained "because of lack of quality work." to which she added that the housekeeping employ- ees in general "just got by with the work they did"; that "it would be the same type of an answer" regarding another; that she could not "recall exactly" as concerns another--"l think simply because there was no need about poor work before September 22, seeing her "role" as "reassuring the employees that their jobs were not in jeopardy." She denied that union affiliation figured in anyone's nonretention, noting that, in her search for re- placements, she made a point of interviewing some of the employees of the Olympic Hotel, a union house about to close. Everyone on the hotel side-carryovers and new hires alike, Vukov included-was terminated coincident with the December 3 closure. None of them, nor anyone on the payroll before September 23, was among the staff of 89 when the hotel reopened December 7, 1981. The de- velopments of December 3, like those of September 22, were not attended by any kind of notice to the Union. The employees first learned that a change in manage- ment was forthcoming in July 1980, when Antonio del Fierro, Third Brigade's president, introduced Malone at an employee meeting as "the person who would be taking over." Malone then summarized some of the inno- vations under consideration for the hotel, and gave assur- ances that those wanting to stay would have jobs. That was followed by an employee meeting on August 3, presided over by Malone and prompted by Respond- ent's assumption of management responsibility under the Interim Management Agreement. The "purpose and intent" of the meeting, in Malone's words, "was to estab- lish some dialogue with the employees, to allow them to ask questions, and . . . make them feel more comfort- able." Malone announced that he was now "running" the hotel and introduced Burkheimer as his "associate in the venture." He introduced Vukov, as well, stating that she was "the manager of the hotel" and that the employees were to "go to her" with any problems, because she would be "speaking for" him. Malone told the employees during the August 3 meet- ing, much as he had in July, that their jobs were "not in jeopardy." He elaborated that, while major improve- ments were contemplated, the hotel was "definitely going to keep operating," with guestrooms being refur- bished "two or three at a time" or "floor by floor." Ren- ovation of the kitchen would pose more of a "problem," he continued, but that, too, could be "work[ed] around," enabling the Sir Dunbar to stay open. During the question and answer portion of the meet- ing, Renee Crumpacker, a cocktail waitress, asked how Malone felt "about the union contract." He responded, as disclosed by the weight of the evidence, that the Sor- rento was a "weak" or a "very loose" union house; that another of his ventures, the Broadway Restaurant in Se- attle, was nonunion and those working there, including some who had worked in union houses, were "quite happy" and "worked very well together"; and that he paid "better than union scale" and "took care of" his em- ployees. Malone added that he could "handle the affairs of" the Sorrento employees without need for "anybody . it could have been timing." Another was not retained, according to Vukov, because "his quality of work . . . was very inconsistent": an- other, because he "had a very set way of doing things and was not recep- tive to changes"; and another, because she "was only working part-time . .. and we needed the fulltime people." This last person was not offered a full-time position. 354 SORRENTO HOTEL else [to] oversee" him; that he did not "deserve to be an owner" if he could not. Later in August, or perhaps early September, a group of day-shift food and beverage employees met with Vukov, voicing concerns about job security. She told them, "As long as you do a good job, you'll keep your job." The decision to close the Sir Dunbar, rather than work around the remodeling process, was made in Sep- tember, after Henry Odland, soon to be restaurant man- ager, toured the facility and determined that the requisite changes "couldn't be done without closing it. " 1 Odland testified that he was "involved in hiring all" the employees for The Hunt Club; that help-wanted ad- vertisements were placed in the "Seattle Times" for 5 days, 2 or 3 weeks before the reopening: and that, while there were about 10 applicants for every position, none of the former employees responded. Odland further testi- fied that he was unaware of the applications left by the former employees, and that union affiliation or lack thereof were not among the hiring criteria. He continued that he was looking for "a certain level of experience"- "the main concern is that it looks as though it's not a new operation." "And then," he added, "what our duty is is to train them to exactly what we are serving . . . what the different types of wine are, and the same thing with the food." 2 The decision to close the hotel proper, instead of ren- ovating two or three rooms at a time or floor-by-floor, was reached in late November, subject to financing, fol- lowing consultations that month with structural engi- neers, architects, and contractors. A financing commit- ment materialized around December 1. The project re- duced the number of guestrooms and suites to 76, and cost $4 million. David Ruehlmann, general manager of the reopened hotel, testified that prior experience in "a large corporate hotel" was "one of the foremost things" sought of those hired to staff the Sorrento upon reopening, and that those serving before the closure lacked "the kind of ex- perience that [he was] looking for." He conceded, how- ever, that some hired as housekeepers incidental to the reopening had to be trained, and that others had to be shown how the management "wanted things done." Ruehlmann learned in the summer of 1981-months before the reopening-about the applications left by those terminated the preceding September 22, but gave them no consideration. Some of those hired, according to him, previously had worked in union hotels in Seattle, such as the Olympic and the Westin. The Interim Management Agreement, in addition to stating that Respondent "will take over the management of the Sorrento Hotel on August 1" in anticipation of the entry into a long-term lease agreement, provided various- ly: (a) Respondent "shall receive no compensation for the management of the Hotel during the interim period . . . X Odland was employed at Malone's Broadway Restaurant at this time. IZ The Hunt Club featured nouvelle cuisine, complimented by a wmine list of 35 to 40 offerings, according to Odland, whereas the Sir Dunbar employed "more of a griddle surface [and] . . . agree[s] to pay any excess cash flow . . . from the operation of the Sorrento Hotel to First Hill." (b) Respondent "agree[s] to indemnify First Hill against any liabilities, expenses, claims, demands and damages arising out of the negligent management of the Hotel." (c) Respondent "agree[s] to obtain appropriate federal and state tax identification numbers . . . and to pay to such tax authorities as though [Respondent] were the op- erator of the Hotel." The agreement concluded: Notwithstanding the foregoing, it is clearly under- stood and agreed . . . that First Hill is the owner and operator of the facilities and that [Respondent] is acting as an agent of First Hill pending the nego- tiation of a lease to the premises. On or about August 1, in keeping with the interim agreement, Respondent obtained Federal and state tax numbers in its name, as well as the sundry city and state permits required to operate a hotel and eating and drink- ing establishment. That included a liquor license, which, by state law, had to be in the name of "the true party in interest." Respondent in addition supplied cash register moneys in replacement of those removed by Third Brigade when it vacated; contracted for a payroll service, on the rec- ommendation of its accountant, Robert Tiehan; and opened a bank checking account, from which wages and other operating expenses were to be paid and into which hotel revenues were to be deposited. The account, al- though in the name of First Hill, was "seeded" by funds from Respondent, and only Malone and Vukov could make withdrawals from it. First Hill made no infusions of operating capital during the interim period. " Despite the checking account being in First Hill's name, Burke's name being on the September 22 terminat- ing notices and Burke having spoken at the time of their distribution, and the avowal in the interim agreement "that First Hill is the owner and operator . . . and that [Respondent) is acting as an agent of First Hill," there is no convincing evidence that First Hill, or Burke as its managing partner, played any role in the management of the hotel during the interim period, either in collabora- tion with or independently of Respondent.t 4 Not only did Burke twice declare to Vaccarino that he was only the landlord, but Respondent installed Vukov as man- ager, with power to hire, fire, set wage rates and hours, assign work, make purchases, and draw checks. Vukov testified, moreover, that she reported only to, and took direction only from, Malone and Burkheimer, and "possi- J3 While the interim agreement was not altogether clear on the point, it contemplated that the hotel's expenses would be met from ongoing rev. enues. I' Burke did not testify. 355 DECISIONS OF NATIONAL LABOR RELATIONS BOARD bly" Respondent's accountant, Tiehan.L5 She explained, "That's who I was responsible to." 6 Vukov testified that her only contacts with Burke during the interim period were when he and his wife came into the hotel one evening, "and we visited for a . . . short period"; and when, preliminary to the execu- tion of the long-term lease agreement, she delivered some "paperwork" to Burke's office, leaving it with his secretary. Except for "a couple of instances," according to Vukov, wages after August I stayed as they had been- that is, in conformity with union scale. As previously mentioned, she called the Union in August because a question had arisen over the appropriate pay for a dual- purpose employee. Respondent, however, did not adopt Third Brigade's practice of contributing to the Union's pension and health and welfare plans, as prescribed by Third Bri- gade's agreement with the Union, thus ignoring Vaccar- ino's instruction to Vukov that contributions for August would be due September 10. Vukov testified that, after discussing the situation with Malone or Burkheimer, it was her "understanding" that it "may not have been our responsibility to make those payments." Respondent in- stead obtained health insurance for the employees which, as Vukov recalled, "was similar to the coverage that one of Mr. Malone's other companies had." The Union was given no notice of, or chance to bargain over, the dis- continuance of the existing plans and the institution of the new. Vukov testified that the process undertaken on about August 1 with respect to tax numbers, licenses, bank ac- counts, etc., was repeated on or about September 23, when the long-term lease went into effect-"it was just like setting up a new business." Except for the matter of bank accounts, this testimony-unsupported by docu- mentation or specifics-was not convincing. Malone tes- tified that a new liquor license was not required. Sorrento's residential clientele as of August I included transient and permanent guests. Among the former were army inductees, housed under contract with the Govern- ment at a daily room and board rate of $19 per person. Daily rates for the other transient guests were $25 to $30, which did not include board. The record suggests that, on or about September 23, a phasing out of the per- manent guests was begun and the Government contract terminated. Otherwise, as earlier indicated, the hotel proper was run much as before until its December 3 clo- sure. Since reopenings in December 1981, the Sorrento's daily rates have ranged from $60 for a single room to $575 for a penthouse suite, the average being about $80. It is "very, very service oriented," according to Ruehl- mann, and "solicit[s] the upper-scale business-type travel- er, as well as your corporate traveler; more of a distin- L5 Vukov testified that she made revenue and occupancy reports to Malone and Tiehan, as requested by Malone. Malone testified that he "would subsequently either meet with or have conversations with Mr. Burke." The record does not disclose the frequency or content of these exchanges between Malone and Burke. '6 Vukov nevertheless testified that she was an employee of First Hill, perhaps because her paychecks-and those of all the employees-were drawn on the account in its name. guished type guest, as well, perhaps a dignitary or a ce- lebrity." Among the amenities since the reopening, but not before, as recounted by Ruehlmann, are uniformed employees, valet parking, doormen, bellmen, telephone operators, room service, triple-sheeted beds,'7 and eve- ning turn-down of bed covers, replete with a mint on the pillow. B. Conclusions i. The allegedly unlawful refusal to recognize and bargain It is concluded that Respondent became a "successor" to Third Brigade upon taking over management of the Sorrento August 1; that it therefore inherited Third Bri- gade's outstanding obligation to recognize and bargain with the Union as the representative of those in the unit embraced by the 1978-81 agreement between Third Bri- gade and the Union; and that its subsequent refusal to recognize the Union accordingly violated Section 8(a)(5) and (1) as alleged.' 8 That Respondent is Third Brigade's successor derives from its retention of the Third Brigade payroll, nearly intact, for some 7 weeks after August 1; its effort during that same period, as Vukov put it, "to see that things really ran very much the same" as before; and the sub- stantial continuation during that time, except for discard of the Union's pension and health and welfare plans, of preexisting terms and conditions of employment. '9 Respondent's main contention is that First Hill, not it, was the "owner and operator" from August I through September 22, the implication being that the date for de- termining its successorship status properly should be September 23-after the mass termination and coincident with the extended closure of the food and beverage fa- cility. This contention, as earlier indicated, 20 is rejected. Rejection is based on this aggregate of considerations: I. The Interim Management Agreement specified that Respondent would "take over the management of" the hotel on August 1, that it would "indemnify" First Hill for any losses "rising out of the negligent management of" the hotel, and that it would obtain Federal and state tax numbers and "pay to such tax authorities as though [it] were the operator of" the hotel. 2. Respondent installed Vukov as manager on August 1, investing her with authority commensurate with that I? The third sheet being on top of the blanket. le That the contract document accompanying the Union's August 8 demand letter may have omitted housekeeping classifications (see fn. 8, supra) does not relieve Respondent of a duty to bargain as concerns the overall unit. The letter itself couched the demand in terms of "the em- ployees of the Sorrento Hotel," the Union's agreement with Third Bri- gade in fact covered housekeeping as well as food and beverage employ- ees; and there is nothing to suggest that the professed incompleteness of the document in any way confused or misled Respondent. Cf., Nazareth Regional High School v. N.L.R.B., 549 F.2d 873, 880 (2d Cir. 1977). 19 See, generally, N.L.R.B. v. William J. Burns International Security Services, Inc., 406 U.S. 272 (1972); East Belden Corporation, 239 NLRB 776 (1978); Cagle's Inc., 218 NLRB 603 (1975); Pine Valley Division of Ethan Allen, Inc., 218 NLRB 208 (1975); Band-Age. Inc., 217 NLRB 449 (1975); United Maintenance & Manufacturing Co., Inc., 214 NLRB 529 (1974); Georgetown Stainless Mfg. Corp., 198 NLRB 234 (1972); G. T. & E. Data Services Corporation, 194 NLRB 719 (1971). 20 In fn. 2, supra. 356 SORRENTO HOTEL title; after which she reported only to, and took direction only from, Malone and Burkheimer and possibly Re- spondent's accountant. 3. On or about August 1, Respondent obtained, in its name, the city and state permits needed to operate a hotel and eating and drinking establishment. This includ- ed a liquor license, which was required by state law to be in the name of "the true party in interest." 4. On or about August 1, Respondent supplied cash register moneys in replacement of those removed by Third Brigade; and "seeded" with its funds the bank checking account from which hotel expenses were paid and into which revenues were to be deposited. 5. Only Vukov and Malone could make withdrawals from the aforementioned checking account. 6. By the time of Respondent's August I assumption of management responsibility, its prolonged continuation in that role was a virtual certainty, the "basic terms" of the long-term lease agreement previously having been worked out. 7. First Hill's Burke twice told the Union's Vaccarino, between August I and September 23, that he was noth- ing more than a landlord. Against this array of indicia that Respondent was the true employing entity as of August 1, the meager signs of First Hill's occupying that role-that the checking ac- count was in its name, that the termination notices bore Burke's name and that he spoke at the time of their dis- tribution, and that the interim agreement depicted First Hill as "the owner and operator" and Respondent "as an agent of First Hill"-are but trifling oddments. 2 ' Nor can it be said that maintenance of the status quo until September 22 was a temporary expedient, militating that the issue of Respondent's successorship status con- sider the changes subsequently made. Malone assured the employees in July and again on August 3 that their jobs were safe, to which he added on August 3 that, while considerable changes in the physical plant were contem- plated, they would not entail job disruption. Similarly, Vukov told some of the food and beverage employees during the interim period that they would have their jobs as long as their performance was acceptable; and admit- tedly saw part of her role until September 22 as "reassur- ing the employees that their jobs were not in jeopardy." Additionally, the decision to shut down the Sir Dunbar for renovation in fact was not made until September; and that to close the hotel proper, not until late November. It thus is manifest that the departures from the status quo-beginning with the September 22 mass termination and followed by the closures of the Sir Dunbar, then the hotel proper, and the eventual marked enlargement of the complement-were not "imminent and certain" as of August 1, but rather were in the realm of high specula- tion. Those developments consequently are not relevant to the successorship question. 22 Having violated Section 8(a)(5) and (I) in a general sense by refusing to recognize the Union, Respondent 2' See, generally, East Belden Corporation. supra. 239 NLRB 776, 791- 792; Pine Valley Division of Ethan Allen, wupra, 218 NL.RB at 218. 22 Galis Equipment Company. Inc.. 194 NL.RB 799 (1972) See also Georgetown Mfg. Corp.. wupra. 198 NLRB at 237. perforce breached its duty to recognize and bargain in more specific ways by these actions: 1. Discontinuing the Union's pension and health and welfare coverages, and instituting a new medical insur- ance program, without first giving the Union a change to bargain over the changes. 23 2. Terminating the entire complement on September 22, albeit momentarily as concerns some, without first giving the Union a chance to bargain over the decision and its effects.2 4 3. Closing the Sir Dunbar and then the hotel proper, with attendant loss of unit work for substantial periods of time, without first giving the Union a chance to bargain over the effects of those actions.2 5 2. The allegedly unlawful mass termination It is concluded that the September 22 mass termina- tion, apart from violating Section 8(a)(5) and (1) as earli- er found, was for the purpose of escaping successorship and the attendant obligation to recognize and bargain with the Union, and thus violated Section 8(a)(3) and (1) as also alleged. This conclusion derives from this reasoning: 1. Respondent's antipathy to collective bargaining was betrayed by Malone's declarations during the August 3 meeting that he could "handle the affairs of' the employ- ees without need for "anybody else [to] oversee" him, and that he did not "deserve to be an owner" if he could not. 2. Respondent could escape Third Brigade's bargaining obligation if it could avoid being adjudged a successor. Employee carryover being central to a successorship finding, the substantial elimination of the preexisting complement, if timely done, would accomplish this. 3. Why, then, was the mass termination not effected at or around the time of Respondent's August I assumption of management responsibility? Malone's assurances to the employees in July and or August 3 reveal an intention at the outset to retain the inherited complement. The infer- ence thus is pungent that the original intent went into discard upon receipt of the Union's August 8 demand letter and the enlightenment that doubtless ensued about the legal implications of employee carryover. 4. To impart the illusion that the mass termination nev- ertheless was timely for purposes of avoiding successor- 2" "A successor employer is ordinarily free to set initial terms on which it will hire employees of a predecessor." 'L-R.B. v. Burns Inter- national Security Services, supra, 406 U.S. at 294. This is not so, however, in "instances in which it is perfectly clear that the new employer plans to retain all of the employees in the unit," in which case it is "appropriate to have him initially consult with the employees' bargaining representative before he fixes terms." Ibid. The present case plainly comes within the exception to the general rule. East Belden Corporation. supra, 239 NLRB at 793; Bachrodt Chevrolet Co., 205 NLRB 784, 784-785 (1973). See, gen- erally, United Maintenance and Manufacturing Co.. supra,. 214 NLRB 529, 535-536; Spruce Up Corporation. 209 NLRB 194. 195 (1974). 24 E.g. P. J. Gear & Sons. Inc, 252 NLRB 147, 149 (1980); Valley Iron d Steel Co.. 224 NLRB 866, 877 (1976); Sundstrand Heat Transfer. Inc. (Triangle Division), 221 NLRB 544, 545 (1975). 25 The decisions to close, themselves, and the renovations flowing from them involved considerable outlays of capital and thus properly could be made by management independently of the bargaining process. L. E. Davis d/b/a Holiday Inn of Benton, 237 NLRB 1042 (1978); Vegas lic, Inc., d/b/a Pioneer Club, 213 NLRB 841 (1974). 357 DECISIONS OF NATIONAL LABOR RELATIONS BOARD ship, Respondent fostered the palpable fictions that the joint venture operating the hotel as of September 23 was substantively different from the Malone/Burkheimer combine in charge during the interim period; 26 and that First Hill, not it, was the employing entity until Septem- ber 23. In aid of the latter of these fictions, Vukov testi- fied, unconvincingly, that the process undertaken on or about August I with respect to tax numbers, licenses, etc., was repeated on or about September 23 ("it was just like setting up a new business"); and Burke, who had had no demonstrable part in the conduct of the business during the interim period, was prevailed upon to lend his name to the termination notices and appear in what might fairly be termed a "cameo role" in conjunction with their issuance.2 7 That Respondent would resort to such artifice high- lights the bad faith underlying the mass termination, as part of a resolve to escape successorship and a bargain- ing obligation. 5. Bad faith or an ulterior motive with regard to the mass termination was revealed, as well, by Vukov's effort to explain, employee-by-employee, why the var- ious employees were unworthy of retention. Her testimo- ny in this respect, as previously observed, "was a labored mix of abstractions, conjecture, and flawed recall," and was together unpersuasive. 6. Also indicative of ulterior motive anent the mass termination were Respondent's nondisclosure to the de- posed employees, even as it purported to invite them to apply for rehire, that they had been replaced, and its fail- ure ever to consider any of the resultant applications. The duplicity and the blanket disregard of applications are indicative of a pogrom in avoidance of successorship rather than a reasoned process of selection.2 8 CONCLUSIONS OF LAW Respondent violated Section 8(a)(5) and (1) of the Act by: 1. Refusing to recognize the Union as the collective- bargaining representative of its employees in the appro- priate unit since about August 8, 1980. 2. Discontinuing existing pension and health and wel- fare coverages, and instituting a new medical insurance program, after August 1, 1980, without first giving the Union a chance to bargain over the changes. 3. Terminating the entire complement of unit employ- ees September 22, 1980, albeit momentarily as concerns some, without first giving the Union a chance to bargain over the decision and its effects. 4. Closing the Sir Dunbar on September 23, 1980, and the hotel proper on December 3, 1981, with attendant loss of unit work for substantial periods of time, without first giving the Union a chance to bargain over the ef- fects of those actions. 28 See fit. , supra. 27 Burke's token appearance approximated a device used, unpersuasive- ly, in AMole Oldsmobile, Inc., 152 NLRB 407 (1965). 2s That Vukov, in her search for replacements for those to be termi- nated, interviewed employees of a union house about to close does not equate with an absence of unlawful motive as concerns the incumbent employees. Successorship can be as effectively defeated by replacing in- cumbent employees with those from a union as from a nonunion house Respondent violated Section 8(a)(3) and (I) of the Act by terminating the entire complement of unit employees on September 22, 1980. ORDER 2 9 The Respondent, Michael J. Malone and Bob Burk- heimer d/b/a Sorrento Hotel, Seattle, Washington, its of- ficers, agents, successors, and assigns, shall: 1. Cease and desist from: (a) Refusing to recognize and bargain collectively with Hotel, Motel, Restaurant Employees and Bartenders Union, Local 8, AFL-CIO, as the exclusive representa- tive of Respondent's food and beverage and hotel em- ployees in the appropriate unit embraced by the 1978-81 collective-bargaining agreement between Third Brigade Corporation and said Union, with respect to rates of pay, wages, hours of employment, and other terms and condi- tions of employment. (b) Changing any term or condition of employment of the employees in the aforementioned unit, including pen- sion and health and welfare coverages, without first giving the above Union a chance to bargain over such change. (c) Closing portions of its hotel business, with attend- ant loss of unit work, without first giving the above Union a chance to bargain over the effects of such clo- sure. (d) Terminating an entire complement of unit employ- ees, or a substantial portion thereof, without first giving the above Union a chance to bargain over the decision and its effects on those employees. (e) Terminating or otherwise discriminating against employees to avoid having to recognize and bargain with the above Union, or any other labor organization. (f) In any like or related manner interfering with, re- straining, or coercing employees in their exercise of rights under Section 7 of the Act. 2. Take this affirmative action: (a) Recognize and, upon request, bargain collectively with the above Union, as the exclusive representative of Respondent's employees in the aforementioned unit, with respect to rates of pay, wages, hours of employment, and other terms and conditions of employment, and, if an un- derstanding is reached, embody it in a signed document. (b) Upon request of the above Union, revoke any or all changes in pension and health and welfare coverages made without first giving the Union a chance to bargain, and, if requested, restore coverages as they existed up to August 1, 1980, maintaining such coverages as are re- stored until Respondent negotiates with the Union in good faith to agreement or to an impasse in negotiations. (c) Make whole employees who worked in the afore- mentioned unit at any time on or after August 1, 1980, with interest, for any loss of benefits they may have suf- fered because of the changes in pension and health and 29 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. 358 SORRENTO HOTEL welfare coverages made by Respondent without first giving the above Union a chance to bargain. 30 (d) Offer to those terminated September 22, 1980, if it has not already done so, immediate and full reinstatement to their former positions, or, if such positions no longer exist, to substantially equivalent positions, without preju- dice to seniority or other rights and privileges, and make them whole with interest for any loss of earnings they may have suffered because of the discrimination against them.31 (e) Expunge from its files any reference to the termina- tions of September 22, 1980, and notify those terminated s0 Interest shall be as prescribed in Olympic Medical Corporation, 250 NLRB 146 (1980), and Florida Steel Corporation, 231 NLRB 651 (1977) See, generally, Isis Plumbing & Heating Co., 138 NLRB 716 (1962). a Backpay shall be computed as prescribed in F W Woolworth Com- pony, 90 NLRB 289 (1950). Interest thereon shall be in accordance with the preceding footnote. It is appropriate that the calculation of backpay presupposes that those working in the food and beverage operation would have been offered recall upon the opening of The Hunt Club, and that those working in the hotel proper would have continued working until its closure, and then been offered recall upon its reopening, but for Respondent's unlawful predisposition toward them and its unlawful failure to negotiate with the Union concerning the effects of the closures upon them It is further appropriate that this paragraph of the remedial order (d) embrace supervisors, if any, caught in the sweep of the September 22 mass termination, inasmuch as the carryover of supervisors can be rele- vant to the successorship question and the termination of all, without regard to status, was designed to defeat successorship and thereby inter- fere with the employees' exercise of rights under the Act. Cf Parker- Robb Chevrolet. Inc., 262 NLRB 403 (1982). in writing that this has been done and that evidence of those unlawful terminations will not be used as a basis for future personnel actions against them.3 2 (f) Preserve and make available to the Board or its agents, upon request, all records necessary to analyze the amounts due under the remedial order herein. (g) Post at the Sorrento Hotel, Seattle, Washington, copies of the attached notice marked "Appendix." 33 Copies of said notice, on forms provided by the Regional Director for Region 19, after being duly signed by its representatives, shall be posted by Respondent immedi- ately upon receipt thereof, and be maintained by it for 60 consecutive days thereafter in conspicuous places, in- cluding all places where notices to employees customar- ily are posted. Reasonable steps shall be taken by it to ensure that said notices are not altered, defaced, or cov- ered by any other material. (h) 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. 2Z While more severe remedial sanctions could be addressed to Re- spondent's unlawful failure to bargain over the effects of closing one, then another, portion of the business for renovation (e.g., Transmarine Navigation Corporation and its Subsidiary, International Terminals, Inc., 170 NLRB 389 (1968)), it is concluded that the remedy as above defined is sufficient for purposes of this case. Is In the event that this Order is enforced by a Judgment of a United States Court of Appeals, the words in the notice reading "Posted by Order of the National Labor Relations Board" shall read "Posted Pursu- ant to a Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board." 359