Morris Healthcare & Rehab

DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 348 NLRB No. 96 1360 Morris Healthcare & Rehabilitation Center, LLC, and Prism Healthcare Group, Inc., a single inte- grated enterprise and/or Joint Employer and American Federation of State, County and Mu- nicipal Employees, Council 31, AFL–CIO, on behalf of AFSCME Local 3903. Case 13–CA– 42882 December 29, 2006 DECISION AND ORDER BY MEMBERS LIEBMAN, KIRSANOW, AND WALSH On May 30, 2006, Administrative Law Judge Michael A. Rosas issued the attached decision. The Respondent filed exceptions, and the General Counsel and the Charg- ing Party each filed a cross-exception and an answering brief. The National Labor Relations Board has delegated its authority in this proceeding to a three-member panel. The Board has considered the decision and the record in light of the exceptions and briefs and has decided to affirm the judge’s rulings, findings,1 and conclusions,2 to amend the remedy, and to adopt the recommended Order as modified and set forth in full below.3 1 The Respondent has excepted to some of the judge’s credibility findings. The Board’s established policy is not to overrule an adminis- trative law judge’s credibility resolutions unless the clear preponder- ance of all the relevant evidence convinces us that they are incorrect. Standard Dry Wall Products, 91 NLRB 544 (1950), enfd. 188 F.2d 362 (3d Cir. 1951). We have carefully examined the record and find no basis for reversing the findings. 2 The judge concluded that the Respondent violated Sec. 8(a)(5) and (1) of the Act by unilaterally setting initial terms and conditions of employment upon taking over the operation of a nursing home from a predecessor employer. In adopting the judge’s conclusion, we rely on his finding that the Respondent was a “perfectly clear” successor and, thus, was not privileged to set initial terms and conditions of employ- ment. See Spruce Up Corp., 209 NLRB 194, 195 (1975), enfd. per curiam 529 F.2d 516 (4th Cir. 1975). Therefore, we find it unnecessary to pass on the judge’s additional finding that the Respondent was equi- tably estopped from setting initial terms because of its coercive state- ments to employees that it would operate nonunion. See Advanced Stretchforming International, 323 NLRB 529 (1997), enfd. in part on other grounds, remanded in part 208 F.3d 801 (9th Cir. 2000), amended and superseded on rehearing and enfd. in relevant part 233 F.3d 1176 (9th Cir. 2000), cert. denied 534 U.S. 948 (2001), remanded by the Board 336 NLRB 1153 (2001). Any such finding would not materially affect the remedy in this case. As requested by the Charging Party, however, we correct the judge’s inadvertent attribution of those coer- cive statements to Kathy Minor, when in fact they were made by Alma Woods and Suzanne Day. 3 The Respondent has requested oral argument. The request is denied as the record, exceptions, and briefs adequately present the issues and the positions of the parties. We shall modify the judge’s Order to conform to the violations found and the Board’s standard remedial language. We shall modify the unit description in the Order to reflect the unit description alleged in the complaint and admitted by the Respondent in its answer. We shall substitute a new notice in conformity with the Order as modified. AMENDED REMEDY Having found that the Respondent has engaged in cer- tain unfair labor practices, we shall order it to cease and desist and to take certain affirmative action designed to effectuate the policies of the Act. We shall order the Respondent to bargain with the Union as the exclusive collective-bargaining representative of the bargaining unit and, if requested by the Union, to rescind any unilat- eral changes in wages, benefits, and conditions of em- ployment implemented on September 1, 2005, and there- after. We shall order the Respondent to make whole the unit employees for any loss of wages or other benefits they suffered as a result of the Respondent’s unilateral changes in the manner prescribed in Ogle Protection Service, 183 NLRB 682 (1970), enfd. 444 F.2d 502 (6th Cir. 1971), with interest as set forth in New Horizons for the Retarded, 283 NLRB 1173 (1987). We shall also order the Respondent to reimburse unit employees for any expenses resulting from the Respondent’s unlawful changes to their health benefits, as set forth in Kraft Plumbing & Heating, 252 NLRB 891 fn. 2 (1980), affd. 661 F.2d 940 (9th Cir. 1981), with interest as set forth in New Horizons for the Retarded, supra. ORDER The National Labor Relations Board adopts the rec- ommended Order of the administrative law judge as modified and set forth in full below and orders that the Respondent, Morris Healthcare & Rehabilitation Center, LLC, and Prism Healthcare Group, Inc., Morris, Illinois, a single integrated enterprise and/or joint employer, its officers, agents, successors, and assigns, shall 1. Cease and desist from (a) Telling employees or job applicants that it will op- erate with no union when it is obligated to recognize and bargain with the Union, or any other labor organization, on behalf of members of the bargaining unit. (b) Asking job applicants about their views of the Un- ion or any other labor organization. (c) Unilaterally changing the wages, benefits, and other terms and conditions of employment for members of the bargaining unit without first bargaining with the Union. (d) In any like or related manner interfering with, re- straining, or coercing employees in the exercise of the rights guaranteed them by Section 7 of the Act. 2. Take the following affirmative action necessary to effectuate the policies of the Act. (a) Bargain with the Union as the exclusive representa- tive of the employees in the following appropriate unit concerning terms and conditions of employment and, if MORRIS HEALTHCARE & REHABILITATION CENTER 1361 an understanding is reached, embody the understanding in a signed agreement: All Licensed Practical Nurse, Certified Nurse Aide or Nurse Aide, Dietary Aide, Cook, Activity Aide, Laun- dry, Housekeeper, Maintenance Worker, Psych./Soc. Aide, Runner and Support Service Workers employed by the Respondent at the Respondent’s facility; but ex- cluding Registered Nurse (DON, ADON and Clinical Manager), Social Worker, Kitchen Manager, Office Manager, Office Clerical (Receptionist/Administrative Secretary), Ward Clerk, Volunteer Coordinator, Sched- uler, Activity Director, and all other managerial em- ployees, confidential employees, guards, and supervi- sors as defined by the Act. (b) On request by the Union, rescind the changes in the terms and conditions of employment for the unit employ- ees that were unilaterally implemented on September 1, 2005, and thereafter. (c) Make unit employees whole for any loss of earn- ings and other benefits suffered as a result of the unlaw- ful unilateral changes in the manner set forth in the rem- edy section, as amended, of this decision. (d) Preserve and, within 14 days of a request, or such additional time as the Regional Director may allow for good cause shown, provide at a reasonable place desig- nated by the Board or its agents, all payroll records, so- cial security payment records, timecards, personnel re- cords and reports, and all other records, including an electronic copy of such records if stored in electronic form, necessary to analyze the amount of backpay due under the terms of this Order. (e) Within 14 days after service by the Region, post at its facility in Morris, Illinois, copies of the attached no- tice marked “Appendix.”4 Copies of the notice, on forms provided by the Regional Director for Region 13, after being signed by the Respondent’s authorized representa- tive, shall be posted by the Respondent and maintained for 60 consecutive days in conspicuous places, including all places where notices to employees are customarily posted. Reasonable steps shall be taken by the Respon- dent to ensure that the notices are not altered, defaced, or covered by any other material. In the event that, during the pendency of these proceedings, the Respondent has gone out of business or closed the facility involved in these proceedings, the Respondent shall duplicate and mail, at its own expense, a copy of the notice to all cur- 4 If 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 Na- tional Labor Relations Board” shall read “Posted Pursuant to a Judg- ment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board.” rent employees and former employees employed by the Respondent at any time since August 22, 2005. (f) Within 21 days after service by the Region, file with the Regional Director a sworn certification of a re- sponsible official on a form provided by the Region at- testing to the steps that the Respondent has taken to comply. IT IS FURTHER ORDERED that the complaint is dismissed insofar as it alleges violations of the Act not specifically found. APPENDIX NOTICE TO EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government The National Labor Relations Board has found that we violated Federal labor law and has ordered us to post and obey this notice. FEDERAL LABOR LAW GIVES YOU THE RIGHT TO Form, join, or assist a union Choose representatives to bargain with us on your behalf Act together with other employees for your bene- fit and protection Choose not to engage in any of these protected activities. WE WILL NOT tell employees or job applicants that we will operate with no union when we are obligated to rec- ognize and bargain with the American Federation of State, County and Municipal Employees, Council 31, AFL–CIO, on behalf of AFSCME Local 3903 (Union), or any other labor organization, on behalf of members of the bargaining unit. WE WILL NOT ask job applicants about their views of the Union or any other labor organization. WE WILL NOT unilaterally change the terms and condi- tions of employment of unit members without first bar- gaining with the Union. WE WILL NOT in any like or related manner interfere with, restrain, or coerce you in the exercise of the rights guaranteed you by Section 7 of the Act. WE WILL bargain with the Union as the exclusive rep- resentative of the employees in the following appropriate unit concerning terms and conditions of employment and, if an understanding is reached, embody the under- standing in a signed agreement: All Licensed Practical Nurse, Certified Nurse Aide or Nurse Aide, Dietary Aide, Cook, Activity Aide, Laun- dry, Housekeeper, Maintenance Worker, Psych./Soc. Aide, Runner and Support Service Workers employed DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1362 by the Respondent at the Respondent’s facility; but ex- cluding Registered Nurse (DON, ADON and Clinical Manager), Social Worker, Kitchen Manager, Office Manager, Office Clerical (Receptionist/Administrative Secretary), Ward Clerk, Volunteer Coordinator, Sched- uler, Activity Director, and all other managerial em- ployees, confidential employees, guards, and supervi- sors as defined by the Act. WE WILL, on request by the Union, rescind the changes in the terms and conditions of employment for the unit employees that were unilaterally implemented on Sep- tember 1, 2005, and thereafter. WE WILL make unit employees whole for any loss of earnings and other benefits suffered as a result of the unlawful unilateral changes. MORRIS HEALTHCARE & REHABILITATION CENTER, LLC, AND PRISM HEALTHCARE GROUP, INC. Richard S. Andrews, Esq., for the General Counsel. John D. Jeske, Esq., of Chicago, Illinois, for the Respondent. Melissa J. Auerbach, Esq. (Cornfeld and Feldman), of Chicago, Illinois, for the Charging Party. DECISION STATEMENT OF THE CASE MICHAEL A. ROSAS, Administrative Law Judge. This case was tried in Chicago, Illinois, on February 6–7, 2006. The charge was filed September 7, 2005, an amended charge was filed November 15, 2005, and the complaint was issued No- vember 18, 2005.1 The complaint alleges that the Respondent, Morris Healthcare & Rehabilitation Center, LLC, and Prism Healthcare Group, Inc., a single integrated enterprise and/or joint employer,2 failed to bargain in good faith with the Charg- ing Party, the American Federation of State, County and Mu- nicipal Employees, Council 31, AFL–CIO, on behalf of AFSCME Local 3903 (the Union), in violation of Section 8(a)(1) and (5) of the National Labor Relations Act (the Act) by unilaterally changing wages, hours, and terms and conditions of employees in a bargaining unit represented by the Union with- out giving the Union notice and an opportunity to bargain. The complaint also alleges that agents of the Respondent made statements to employees informing them that it would be futile to support the Union, in violation of Section 8(a)(1) of the Act. On the entire record, including my observation of the de- meanor of the witnesses, and after considering the briefs filed by the General Counsel, the Respondent, and the Union, I make the following FINDINGS OF FACT I. JURISDICTION The Respondent, a corporation, operates a nursing home fa- 1 All dates are in 2005, unless otherwise indicated. 2 The parties stipulated that Morris Healthcare & Rehabilitation Cen- ter, LLC, and Prism Healthcare Group, Inc. are a joint employer. cility in Morris, Illinois (the nursing home), where, based on a projection of its operations since September 1, when it com- menced operations, the Respondent will annually derive gross revenues in excess of $100,000. Furthermore, in conducting its operations since September 1, the Respondent purchased and received at its Morris facility goods valued in excess of $10,000 from other enterprises located within Illinois, each of whom received these goods directly from points outside Illinois. The Respondent admits, and I find, that it is an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act and that the Union is a labor organization within the meaning of Section 2(5) of the Act. II. ALLEGED UNFAIR LABOR PRACTICES A. The Privatization of the Nursing Home In May or June, the Grundy County Board of Supervisors (Grundy County Board) decided it no longer wished to operate the nursing home and prepared to transfer operations to a pri- vate entity. As part of that process, the Grundy County Board notified the Union, which represented most of the nursing home’s employees, that it would solicit bids for a lease agree- ment to operate the nursing home. As a result, the Union re- quested and engaged in bargaining with Grundy County in June and July. In July, the Grundy County Board started negotiating with a group led by the nursing home’s medical director, Dr. Peter Roumeliotis (the Roumeliotis Group). Negotiations lan- guished, however, and the Grundy County Board rescinded its offer to the Roumeliotis Group on August 16. At the same meeting, it announced its intention to negotiate with Prism Healthcare Group, Inc. (Prism).3 During the meeting, Kimberly Westercamp, Prism’s chief operating officer, explained that Prism had been involved in discussions with the Grundy County Board for the past 6 months about different approaches for a takeover and was “very interested in working with the employees and the county.” Prism and the Grundy County Board commenced lease negotiations on August 19. On the same day, the nursing home’s management company (Revere Healthcare), the nursing home’s administrator, and the director of nursing resigned. Later that day, a representative of the Illi- nois Department of Public Health arrived at the nursing home to monitor operations. As a result, the Grundy County Board asked Prism to immediately assume management of the nursing home’s operations on an interim basis. Prism agreed.4 The Grundy County Board and Prism negotiated the terms of a transfer of the nursing home over the next several days. They were able to enter into a tentative agreement, subject to formal approval at the next Grundy County Board meeting. At its Au- gust 22 meeting, the Grundy County Board placed the proposed nursing home transfer on the agenda for public discussion. The Union’s regional director, Joseph Bella, addressed the Board and spoke of his concern for the nursing home’s residents and employees. Lewis Borsellino, Prism’s chief executive officer, addressed those concerns. He explained that he wanted a 3 The relevant background is undisputed. (Tr. 28–31, 255–256, 280; GC Exh. 22.) 4 This finding is based on the credible and unrefuted testimony of Kimberly Westercamp, Prism’s chief operating officer. (Tr. 293–295.) MORRIS HEALTHCARE & REHABILITATION CENTER 1363 smooth transition and planned to rehire most of the nursing home’s staff, except for a few with absenteeism problems.5 On the same day, the Grundy County Board approved an opera- tions transfer agreement turning over the operation of the nurs- ing home to the Respondent. As part of the transfer, the Re- spondent would lease the facility and assume the operation of the nursing home, effective September 1. The Respondent would also immediately take over management of the nursing home. Borsellino signed the lease agreement as owner of the Respondent.6 The lease agreement included, in pertinent part, an addendum stating the Respondent’s obligation to defer to incumbent staff in hiring: 1.1 Senior Management Lessee acknowledges that Lessee shall employ a policy to give deference to existing staff members prior to seeking outside staff and that in the event that all candidate qualifications being taken as equal, the Lessee shall allow the residency of the candidate in the County of Grundy to be become the determin- ing factor for employment of the candidate. 1.2 Medical Director Lessee acknowledges that Lessee shall employ a policy to give deference to the position of Medical Director wherein in the event that all candidate qualifications being taken as equal, the Lessee shall allow the residency of the candidate in the County of Grundy to become the determining factor for em- ployment of the candidate as Medical Director. Les- see further acknowledges its intention to offer the position of Medical Director to Dr. Peter Roumeliotis on commercially reasonable terms as would be offered to a Medical Director with his qualifications and skills. 1.3 Prior Staff and Employees Lessee acknowledges that Lessee shall employ a policy to give deference to existing staff members prior to seeking outside staff and that in the event that all candidate qualifications being taken as equal, the Lessee shall allow the residency of the candidate in the County of Grundy to become the determining factor for employment of the candidate.7 In addition, during a local Sunday morning radio show hosted in August by Grundy County Board member Dick Steele, Borsellino reiterated that there would be a smooth tran- sition, everything would remain the same, and most staff would 5 I based this finding on the credible testimony of Pamela Loveland and Cynthia Farmer, who attended the board meetings in August. (Tr. 60-61, 93, 154, 198–206.) 6 Borsellino agreed during his testimony that he always intended to live up that agreement. (Tr. 263; GC Exh. 10.) He also conceded that, at the Grundy County board meeting, he was “in the hot seat” and needed to have a happy work force. (Tr. 287.) 7 GC Exh. 10, p. 617. be rehired, except for a few employees with absenteeism prob- lems. He also said that he was not antiunion, but felt that unions gave employees the opportunity to have excessive call-offs.8 B. The Employee Hiring Process On August 22, Westercamp interviewed the nursing home’s department heads. With the exception of the director of nursing, who had resigned, Westercamp hired all of the remaining su- pervisors and asked that they proceed to interview and hire employees. The applications were then provided to nursing home employees from August 22 to 24. At that point, however, Westercamp had not yet determined wages, fringe benefits, or working conditions and the application form was silent on those points. Between August 22 and 31, the nursing home’s employees submitted employment applications and were interviewed by department heads, as well as Alma Woods, Prism’s nursing director at the Amboy Nursing Rehabilitation Center (Amboy nursing home). Westercamp brought in Woods to interview the applicants for nursing department positions.9 The rehired su- pervisors included Lisa Joneson, the dietary department man- ager, John Spiewak, the maintenance, housekeeping, and laun- dry department (maintenance department) manager, and Bar- bara Hoffman, the activities director. At no time during the application and interview stages were employees specifically informed about wages, benefits, or other terms of employment.10 Some employees were, however, in- formed of their wage rates prior to attending orientation. Jone- son’s dietary department employees inquired about the wage rate during their interviews. As a result, Joneson spoke with Westercamp about applicable wage rates on August 26. Westercamp provided Joneson with the information and Jone- son informed her rehired employees the next time she saw them at work—in any event, prior to the orientation sessions. Hoff- man was also informed by Westercamp about the applicable wage rates for activities department employees. She passed that information on to the rehired employees prior to the orientation sessions.11 In addition, Spiewak notified maintenance depart- ment employees of their applicable wage rates prior to Septem- ber 1.12 8 This finding is based on the credible testimony of Cynthia Farmer and Lisa Foland. (Tr. 164, 241–242.) Borsellino conceded doing the radio interview, but provided merely a summary of the interview and a general denial that he did not make any promises regarding the hiring process. That general denial sidestepped and was, therefore, insufficient to refute the specific testimony of Farmer and Foland. (Tr. 283–284.) 9 This finding is based on the credible and fairly consistent testimony of Loveland and Westercamp. (Tr. 61–62, 297–299, 323; GC Exh. 9.) 10 The testimony of the witnesses called by the General Counsel and the Respondent, including Westercamp, was fairly consistent on this point. (Tr. 70, 167, 217, 244–245, 298, 301–302, 310, 349, 363, 365– 366, 368; R. Exh. 2 .) 11 I base this finding on the testimony of credible and unrefuted tes- timony of Westercamp, Joneson, and Hoffman, as it pertains to em- ployees in the dietary and activities departments. (Tr. 303, 349–350, 357, 359.) 12 Spiewak also provided credible and unrefuted testimony regarding the dissemination of wage rate information to maintenance department employees. While it is clear that he told them their wage rates prior to DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1364 Nursing department employees, however, did not have a permanent supervisor as of September 1. As a result, they were not informed of their wage rates until they received their pay- checks on September 21.13 Several CNA’s did try to obtain wage information before then, but were unsuccessful. On Au- gust 27 or 28, Jessica Hoxie and other CNA’s approached Woods. Hoxie asked Woods about the applicable wage rate, but Woods did not know. Hoxie then asked her about benefits. Woods explained that the Amboy nursing home had good bene- fits. Hoxie then asked Woods whether Prism had its own staff. Woods replied that when Prism took over the Amboy nursing home, it kept 80 percent of the staff. Hoxie then asked Woods if they were to come to work on September 1. Woods said “yes.”14 While the Respondent did not convey any wage or benefit- related information to employees during the application and interview stages, several supervisors did inform several CNA’s about their views of the Union. During her interview with Woods on August 22, Lisa Foland, current union president, was asked whether “it be a problem union or non-union.” Foland replied, “no.”15 During her interview with Woods sometime prior to August 31, Pamela Loveland was told “this is a non- union place.” Woods then asked Loveland, who was then the president of the Union, if that would bother her. Loveland, motivated by the desire to be rehired, responded that it would not bother her.16 Around the same time, and after being inter- viewed by Woods on August 23 or 24, Denise Sereno spoke with Suzanne Day, the nursing home’s former social worker and newly appointed administrator.17 Day told her “that there couldn’t possibly be a union because it only represents county employees” and that “for private employees it’s a different matter.”18 By August 31, 94 of the 96 nursing home’s bargaining unit- level employees applied for employment by Prism. Of the 94 that applied, 90 were offered positions. Eighty of the 90 per- sons offered employment accepted the position that was of- September 1, it is unclear whether he told them prior to their attendance at orientation. (Tr. 363, 366.) 13 I base this finding on the credible testimony of Loveland, Hoxie, Foland, and Farmer. (Tr. 76–78, 128, 167, 244.) Teresa Averhart, a nursing supervisor, initially testified that employees learned about their wages before or at the time they were hired. However, her evasive testimony about a pending promotion made her less than credible. In any event, she conceded on cross-examination that nursing staff did not learn their wage rates until after orientation. (Tr. 369–378.) As it turned out, according to Borsellino, everyone who was rehired continued to receive the same wage rate and some received raises. (Tr. 288.) 14 This finding is based on Hoxie’s credible and unrefuted testimony. (Tr. 123–125.) 15 This finding is based on Foland’s credible and unrefuted testi- mony. (Tr. 240, 244; GC Exh. 20.) 16 This finding is based on Loveland’s credible and unrefuted testi- mony, as neither Minor nor Woods testified. (Tr. 64–71; GC Exh. 12.) 17 The parties stipulated that, at all relevant times, Minor and Day acted as statutory supervisors, while Wood acted as a statutory agent of the Respondent. (Jt. Exh. 3.) 18 This finding is based on Sereno’s credible and unrefuted testimony (Tr. 220, 225–226, 253–254.) fered. The rehired employees included Dr. Roumeliotis.19 On August 31, after completing the interviewing and hiring of incumbent nursing home staff, the Respondent then placed employment advertisements in newspapers.20 C. The Orientation Sessions All rehired employees were directed to attend orientation meetings on August 29, 30, and 31. The meetings were con- ducted by Nicole Minucciani, the Respondent’s human re- sources manager. Minucciani read the entire employee hand- book, which included, among other things, sections on em- ployee classifications, hours of work, overtime, shifts, meal times and breaks, performance evaluations and salary increases, sick pay, bereavement leave, family leave, leave of absence, paid holidays, paid vacations, and health insurance. A health benefits specialist also explained the terms of health and dental coverage. The employees acknowledged receipt of the hand- book, as well as a harassment policy, a call-off policy, a resi- dent handling policy, resident abuse and neglect acknowledge- ment, a drug screening policy, and an acknowledgment that the “first paycheck will be distributed once all information neces- sary to complete employee file is completed and checked by the front office.” Employees were also required to choose either a benefit option or a no-benefit option. The benefit option in- cluded the availability of health insurance, paid vacation, paid sick time, paid holiday time, and bereavement pay. The no- benefit option included the availability of health insurance only.21 Each orientation session lasted up to an hour. The employee handbook reflected the following changes in employees’ bene- fits and working conditions: (1) eliminated the evening and weekend shift differentials; (2) changed insurance coverage and applicable copayments and premiums; (3) reduced the number of paid holidays from 13 to 7; (4) changed the number and accrual rate of sick days; (5) reduced breaktime from two 15- minute breaks to two 10-minute breaks; (6) eliminated em- ployee seniority; (7) reduced vacation amounts and accrual rates; (8) changed shift and days-off schedules; (9) changed a paid 30-minute meal period to an unpaid meal period; (10) changed the hourly wages of some employees; (11) eliminated personal leave days; (12) eliminated longevity pay; (13) elimi- nated training pay; (14) eliminated temporary assignment pay; (15) eliminated filling of vacancy and promotional rights; (16) eliminated layoff and recall rights; and (17) eliminated and changed disciplinary procedure and just cause rights. The af- fected terms and conditions of employment were set forth in Articles 7–11 and 16–24 of Grundy County’s collective- 19 Westercamp speculated that approximately 85 nursing home em- ployees were rehired as of September 1, but a tally submitted by Grundy County to the Union, providing information as of August 31, was more reliable. (Tr. 264, 323; GC Exh. 5.) 20 Borsellino conceded that this was the earliest date that the Re- spondent placed newspaper advertisements (Tr. 270–271; GC Exh. 23.) 21 There was no dispute between Minucciani and the employees who testified about the meeting—Loveland, Hoxie, and Sereno—regarding the information conveyed. (Tr. 75, 130–131, 218–219, 246–247, 330; GC Exhs. 8, 13, 16, 19, 21; R. Exh. 1.) MORRIS HEALTHCARE & REHABILITATION CENTER 1365 bargaining agreement (CBA) with the Union.22 D. Negotiations with the Union Effective September 1, the Respondent leased the business of the nursing home and since then has continued to operate the business in basically unchanged form and has hired as a major- ity of its employees individuals who were previously employ- ees of the nursing home.23 Prior to September 1, the Union represented most of the nursing home’s employees pursuant to its CBA with Grundy County. The CBA contained the terms and conditions of em- ployment for the employees in the bargaining unit. It defined included and excluded employees as follows: Included: Licensed Practical Nurse, Certified Nurse Aide or Nurse Aide, Dietary Aide, Cook, Activity Aide, Laundry, Housekeeper, Maintenance Worker, Psych./Soc. Aide, Runner and Support Service Workers. Excluded: Registered Nurse (DON, ADON and Clini- cal Manager), Social Worker, Kitchen Manager, Office Manager, Office Clerical (Receptionist/Administrative Secretary), Ward Clerk, Volunteer Coordinator, Scheduler, Activity Director, and all other managerial, supervisory, and confidential employees, as defined by the Act.24 On August 29, the Union’s regional director, Joseph Bella, sent a letter by facsimile and certified mail to Borsellino re- questing that the Respondent recognize the Union as the bar- gaining representative of the nursing home’s employees and demanded to bargain: By this letter, AFSCME Council 31 hereby requests that Morris Health Care & Rehabilitation Center (Prism Health Care Group, Inc.) formally recognize AFCSME Council 31 as the exclusive representative of its employ- ees effective as of the time and date that Prism becomes the lessee of the Grundy County Home (It is the Union’s understanding that the effective time and date is 12:00 a.m., September 1, 2005). AFSCME Council 31 demands to bargain with Morris Health Care and Rehabilitation Center on all mandatory subjects of bargaining, including, but not limited to wages, hours and working conditions, and issues of impact during the transition phase. Morris Health Care & Rehabilitation Center and Prism are hereby notified that all wages, hours and working con- ditions must be held to status quo ante (status quo as of August 30, 2005) during the bargaining process and until the bargaining process is concluded. Changes in wages, hours of work and working conditions are done at the em- ployer’s peril. The Union will aggressively pursue back wages and back payments of benefits and other damages as remedy should the employer change the status quo prior to the conclusion of bargaining. 22 The changes in these terms and conditions are established in three respects: (1) from a comparison of the CBA and the Respondent’s employee handbook (GC Exhs. 2, 8); (2) the credible testimony of Loveland, Hoxie, Sereno, and Foland (Tr. 84–87, 141–142, 229, 249); and (3) the Respondent’s concession in its brief. (R. Br. at 5–6.) 23 Jt. Exh. 2. 24 The provision referred to the Illinois Labor Relations Act. Under the National Labor Relations Act, Morris Healthcare & Rehabilitation Center, LLC and Prism Health Care Group, Inc. is a “successor employer.” Under the National Labor Relations Board’s successorship doc- trine, if a new employer makes a conscious decision to maintain generally the same business and to hire a major- ity of its employees from its predecessor, the bargaining obligation of section 8(a)(5) of the National Labor Rela- tions Act to negotiate with the majority is activated. See Fall River Dyeing & Finishing Corp. v. NLRB, 482 U.S. 27, 37 (1987); NLRB v. Burns Int’l Sec. Servs., 406 U.S. 272, 278–79 (1972); NLRB v. Joe B. Foods, Inc., 953 F.2d 287, 292 (7th Cir. 1992); see also 29 U.S.C. sec. 158(a)(5). Regarding the instant case, where the successor em- ployer is a private employer and the previous employer is a public employer and the Union has been previously cer- tified under the Illinois Labor Relations Act, the United States Court of Appeals for the Seventh Circuit (Nos. 96– 3594 & 3596–3922, The Lincoln Park Zoological Society v. NLRB and Public Service Employees Union, Local 46), affirmed the successor employer’s obligation to recognize the Union as the exclusive representative and to bargain with it. The Union is available to begin bargaining on immedi- ate impact issues and on a collective bargaining agreement on the following dates: August 31, September 2, 6, 8, 12, 13 and 14, 2005. Please contact me so that we may sched- ule sessions. If you have any questions, you can contact me at 312– 641–6060 x 4374. Thank you in advance for your coopera- tion.25 On August 31, Bella sent another letter to Borsellino, again by facsimile and certified mail, regarding the Union’s pending charges against Grundy County: Pursuant to the National Labor Relations Act and NLRB decisions regarding obligations of successor em- ployers, AFSCME Council 31 hereby informs you that the Union has two unfair labor practice charges pending that have been filed against the Grundy County Home. Under “successorship doctrine” case law under the National La- bor Relations Act, a successor employer is liable for set- tlement and remedy in such cases. I have enclosed copies of the charges the Union has filed against the County Home. If you have any questions concerning these charges, I can be reached at 312–641– 6060 x 4374.26 On September 6, the Respondent’s attorney, John Jeske, Esq., responded to Bella’s letters in writing. He agreed to meet to bargain, but disagreed with the Union’s view regarding the Respondent’s successorship liability: Prism Health Care Group, Inc. (“Prism”) has hired my firm to represent it in all labor and employment matters. As you are aware, Prism is now operating the entity com- 25 GC Exh. 4. 26 GC Exh. 6. DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1366 monly known as the Grundy County Home. At this point in time, it appears to Prism that a significant portion of the employees hired by Prism were represented by your labor organization. Based upon our current knowledge of the employee’s desires, we will agree to meet with you and bargain over the terms and conditions of employment for Prism’s Grundy County Home employees. Be advised that I disagree with your legal conclusions regarding successorship liability and Prism’s exposure concerning alleged unfair labor practices of Grundy County. Please direct all future correspondence and communi- cation through my office. This letter also confirms the face to face meeting scheduled for Tuesday at 9:00 a.m. at the Oak Brook offices of Prism Health Care Group, Inc. 27 Sometime between August 31 and September 6, Bella re- ceived a copy of the employee handbook from an employee who attended one of the orientation sessions, Prior to that time, the Union did not receive any information from the Respondent regarding the terms or conditions of employment of the nursing home employees after it assumed operations on September 1. Discussion A. Coercive Statements by Wood and Day The complaint, at paragraphs VII(a) and (b), alleges that, on or about August 30, Wood and Day, both supervisors within the meaning of Section 2(11), violated Section 8(a)(1) by telling employees that the Respondent would be operating as a nonun- ion shop. It is further alleged that such statements indicated to employees that it would be futile for them to select and/or sup- port the Union as their collective-bargaining representative. The Respondent denied the allegations, including the assertion that Wood and Day acted as supervisors within the meaning of Section 2(11) of the Act. Section 7 of the Act provides, in pertinent part, that “[e]mployees shall have the right to self-organization, to form, join or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargain- ing or other mutual aid or protection, and shall also have the right to refrain from any or all such activities.” An employer who interferes with, restrains, or coerces employees in the ex- ercise of such rights violates Section 8(a)(1). The test does not turn on the employer’s motive or whether the coercion suc- ceeded or failed but, rather, whether the employer engaged in conduct, which it may be reasonably said, tends to interfere with the free exercise of employee rights under the Act. Gissel Packing Co., 395 U.S. 575 (1969); Almet, Inc., 305 NLRB 626 (1991); American Freightways Co., 124 NLRB 146, 147 (1959). The parties stipulated at trial that Wood acted as the Respon- dent’s agent and Day acted as a supervisor when the statements were made. Wood was essentially acting as the nursing direc- tor, interviewed and recommended the hiring of nursing de- partment staff. Day was, at the time she made the coercive 27 GC Exh. 7. statement, the nursing home’s administrator. Although present with counsel throughout the trial, she did not testify. On at least two occasions while interviewing nursing de- partment staff, Woods asked about their views of the Union. On August 22, Woods asked Foland whether “it be a problem un- ion or non-union.” Prior to August 31, Woods told Loveland that the nursing home was “a non-union place” and then asked if that would bother her. Around the same time, Day, the nurs- ing home’s new administrator, told Sereno “that there couldn’t possibly be a union because it only represents county employ- ees” and that “for private employees it’s a different matter.” The statements by Wood and Day conveyed two messages from management. First, the statements strongly imply that the Respondent would look pessimistically upon employee appli- cants who support the Union. Secondly, they communicated the Respondent’s view that it would be futile for employees to support the Union. Under the circumstances, the statements by Wood and Day constituted coercive interrogation. Bristol Nurs- ing Home, 338 NLRB 737, 738–739 (2002); Shamrock Foods Co., 337 NLRB 915, 918 (2002); Concrete Co., 336 NLRB 1311, 1316 (2001); Godsell Contracting, 320 NLRB 871, 873 (1996). B. Section 8(a)(5) and (1) The General Counsel further alleges that the Respondent, af- ter assuming the management and operation of the nursing home on September 1, violated Section 8(a)(5) and (1) of the Act by making the following unilateral changes without giving the Union notice and opportunity to bargain: (1) eliminated the evening and weekend shift differentials; (2) changed insurance benefits, copayments and premiums; (3) reduced the number of paid holidays from 13 to 7; (4) changed the number and accrual rate of sick days; (5) reduced breaktime from two 15-minute breaks to two 10-minute breaks; (6) eliminated employee sen- iority; (7) reduced vacation amounts and accrual rates; (8) changed shift and days-off schedules; (9) changed a paid 30- minute meal period to an unpaid meal period; (10) changed the hourly wages of some employees; (11) eliminated personal leave days; (12) eliminated longevity pay; (13) eliminated training pay; (14) eliminated temporary assignment pay; (15) eliminated filling of vacancy and promotional rights; (16) eliminated layoff and recall rights; and (17) eliminated and changed disciplinary procedure and just cause rights. The Re- spondent concedes that most of these changes occurred when it took over, but asserts that it was free to make such changes as it was not a “perfectly clear” successor within the meaning of NLRB v. Burns Security Services, 406 U.S. 272 (1972). Section 8(a)(5) obligates an employer to bargain with its em- ployees’ representative in good faith regarding “wages, hours and other terms and conditions of employment.” NLRB v. Borg- Warner Corp., 356 U.S. 342 (1958); Fiberboard Corp. v. NLRB, 379 U.S. 203 (1964). As such, an employer must notify and consult with its employees’ chosen union before imposing changes in wages, hours, and conditions of employment. NLRB v. Katz, 369 U.S. 736 (1962); NLRB v. Pinkston-Hollar Con- struction Services, 954 F.2d 306 (5th Cir. 1992). A successor employer, on the other hand, is usually permitted to set the initial terms and conditions of employment when hiring their MORRIS HEALTHCARE & REHABILITATION CENTER 1367 employees. An exception applies where it is “perfectly clear” that The new employer has either actively or, by tacit inference, misled employees into believing they would all be retained without change in their wages, hours or conditions of em- ployment, or at least to circumstances where the new em- ployer, unlike the Respondent here, has failed to clearly an- nounce its intent to establish a new set of conditions prior to inviting former employees to accept employment. Spruce Up Corp., 209 NLRB 194, 195 (1974), enfd. per curiam 529 F.2d 516 (4th Cir. 1975). This principle applies even though the predecessor was, like Grundy County, a public em- ployer. See JMM Operational Services, 316 NLRB 6 (1995). Where a successor employer tends unconditional offers of employment to incumbent employees before announcing sig- nificant changes in terms and conditions of employment, thus leading employees to believe that they would be employed on substantially the same basis as before, the “perfectly clear” exception applies. DuPont Dow Elastomers LLC, 332 NLRB 1071 (2000), enfd. sub nom. DuPont Dow Elastomers LLC v. NLRB, 296 F.3d 495 (6th Cir. 2002). The Board has consis- tently found that an announcement of new terms will not justify a refusal to bargain if, as in this case, the employer has earlier indicated its intent to retain its predecessor’s employees with- out indicating that employment is conditioned on acceptance of new terms. DuPont Dow Elastomers LLC, 332 NLRB at 1074; Planned Building Services, 330 NLRB 791, 801 (2000); Can- teen Co., 317 NLRB 1052, 1052–1053 (1995). In this case, the Respondent indicated its intent to retain its predecessor’s employees without indicating that employment would be conditioned upon their acceptance of new terms. The transfer of the nursing home from a public employer, Grundy County, to the Respondent was a politically sensitive transac- tion that required reassuring public statements by Borsellino, the Respondent’s owner, regarding the future care of the nurs- ing home’s residents and the job security of its employees. At the August 22 Grundy County Board meeting, Borsellino stated the Respondent’s intention to rehire the overwhelming number of the nursing home’s staff, except for a few with absenteeism problems. As a result, the Grundy County Board approved the transfer of the nursing home and a lease agreement to the Re- spondent on the condition that the Respondent’s hiring process defer to the incumbent staff, including senior management and the medical director. Borsellino essentially repeated his re- marks during an interview on a local radio show and added that there would be a smooth transition, everything would remain the same, and most staff would be rehired, except for a few employees with absenteeism problems. Indeed, pursuant to its hiring agreement, the Respondent did not place advertisements in the local media until August 31—after nearly all existing staff had been rehired. It is undisputed that the dietary, maintenance, and activities staff were informed of their wage rates at the time they were hired; none, however, were informed of their fringe benefits. Nursing department employees were interviewed by Woods, but were left in the dark until Minor told them, as she walked through their units one day near the end of August, that they were hired; Minor did not inform them about the terms and conditions of employment. All employees were informed about their fringe benefits during orientation and nursing department employees were informed of their wage rates when they re- ceived their first paycheck 3 weeks later. The fringe benefits package explained at orientation was a change from the terms and conditions set forth in the CBA. None of the rehired em- ployees received a wage reduction and some received higher wage rates. It is also undisputed that, prior to changing such terms and conditions of employment, the Respondent was aware that ex- isting staff were represented by the Union. On August 29 and 31, the Union notified the Respondent in writing of its position that it was a successor employer, demanded to bargain, and asserted that the Respondent was obliged to maintain the exist- ing terms and conditions of employment. The Respondent rec- ognized the Union, but only after changing the terms and condi- tions of employment. Under the circumstances, it was perfectly clear at the time employees were hired that the Union’s major- ity status would continue at the nursing home under the Re- spondent. Thus, the Respondent was obligated to recognize and bargain with the Union prior to changing any of the terms and conditions of employment. Dow Elastomers LLC, 332 NLRB at 1075. Furthermore, because Minor and Day made coercive state- ments, the Respondent is equitably estopped from unilaterally setting the initial terms and conditions of employment. Woods and Minor made the statements to three CNA’s, including Loveland, the former union president, and Foland, the current union president, indicating that support for the Union was a futility and possibly harmful to their hiring prospects. These statements came during the critical hiring period that might otherwise have been subjected to protected concerted activity had employees not been subjected to a combination of coercive statements regarding union activity and uncertainty regarding their terms and conditions of employment. Accordingly, the Respondent shall be required to restore the terms and condi- tions of employment under the CBA until it negotiates a new contract with the Union or negotiates to impasse. The Concrete Co., supra at 1315–1316. See also, Advanced Stretchforming International, 323 NLRB 529, 531 (1997), enfd. in part and remanded for further consideration 233 F.3d 1176 (9th Cir. 2000); U.S. Marine Corp., 293 NLRB 669, 672 (1989). To hold otherwise is tantamount to allowing the Respondent to gain from the uncertainty created by its misconduct. See State Dis- tributing Co., 282 NLRB 1048, 1048–1050 (1987). CONCLUSIONS OF LAW 1. The Respondent is an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act. 2. The Union is a labor organization within the meaning of Section 2(5) of the Act. 3. The following employees in the Respondent’s Morris, Il- linois nursing home facility comprised a duly constituted bar- gaining unit within the meaning of Section 9 of the Act: Included—Licensed Practical Nurse, Certified Nurse Aide or Nurse Aide, Dietary Aide, Cook, Activity Aide, Laundry, Housekeeper, Maintenance Worker, Psych./Soc. Aide, Run- DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1368 ner and Support Service Workers; Excluded—Registered Nurse (DON, ADON and Clinical Manager), Social Worker, Kitchen Manager, Office Manager, Office Clerical (Recep- tionist/Administrative Secretary), Ward Clerk, Volunteer Co- ordinator, Scheduler, Activity Director, and all other manage- rial, supervisory, and confidential employees, as defined by the Act. 4. By (1) telling employees or job applicants that it will op- erate with no union when it was, in fact, obligated to recognize and bargain with the Union for and on behalf of members of the bargaining unit, and (2) asking employees during job interviews about their views of the Union, the Respondent violated Section 8(a)(1) of the Act. 5. By unilaterally changing the wages, benefits, and other terms and conditions of employment for members of the bar- gaining unit without first bargaining with the Union, the Re- spondent engaged in an unfair labor practice within the mean- ing of Section 8(a)(5) and (1) of the Act. 6. These unfair labor practices affect commerce within the meaning of Section 2(6) and (7) of the Act. REMEDY Having found that the Respondent has engaged in certain un- fair labor practices, I find that it must be ordered to cease and desist and to take certain affirmative action designed to effectu- ate the policies of the Act. [Recommended Order omitted from publication.]