Martin J. Barry Co.

MARTIN J BARRY CO. 393 Martin J. Barry Company and Carpenters District Council and its affiliated Local 974, United Brotherhood of Carpenters & Joiners of Amer- ica, AFL-CIO Riehl Estate Management Co. and Carpenters Dis- trict Council and its affiliated Local 974, United Brotherhood of Carpenters & Joiners of Amer- ica, AFL-CIO. Cases 5-CA-9363 and 5-CA- 11606 31 January 1986 SUPPLEMENTAL DECISION AND ORDER BY MEMBERS DENNIS, BABSON, AND STEPHENS On 14 January 1981 Administrative Law Judge Benjamin Schlesinger issued the attached decision. Respondent Riehl Estate Management Co. (Riehl Estate) filed exceptions and a supporting brief. The National Labor Relations Board has delegat- ed 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 brief and has decided to affirm the judge's rulings, findings, and conclusions as modified and to adopt the recom- mended Order as modified. As set forth more fully in the judge's decision, Case 5-CA-9363 is the backpay proceeding result- ing from an earlier Board Decision and Order.' In the earlier decision, the Board found that Respond- ent Martin J. Barry Company (Barry), a real estate management company, had violated Section 8(a)(5) and (1) of the Act by refusing on 30 March 1978 to execute and implement a contract setting forth the terms of a final and binding agreement reached be- tween it and Carpenters District Council and its af- filiated Local 974, United Brotherhood of Carpen- ters & Joiners of America, AFL-CIO (the Union). The,Board's Order directed Barry and "its officers, agents, successors, and assigns," to sign and give effect to the contract between Barry and the Union and to make the unit employees whole for any losses suffered by reason of the refusal to give effect to the contract. In October 1978, while the unfair labor practice proceeding in Case 5-CA-9363 was pending before the Board, Barry announced that it intended to cease operations on 30 November 1978, and it noti- fied all its employees that they would be terminat- ed on that date. In an attempt to salvage Barry's property management activities, a group of inves- 'Martin J. Barry Co, 241 NLRB 1011 (1979) tors formed Riehl Estate.2 Riehl Estate hired ap- proximately 95 percent of Barry's unit employees and most of Barry's supervisory employees. The unit employees were hired to work at jobs and wages similar to those that they had with Barry. When Barry ceased operations on 30 November 1978, it still had not executed or implemented the contract it had agreed to on 30 March 1978. On 1 December 1978, without any hiatus, Riehl Estate commenced operations utilizing a majority of Barry's former employees to do work similar to that done by Barry. On 20 April 1979 the Board issued its decision finding that Barry had unlawfully refused to exe- cute its contract with the Union. Thereafter, the Regional Director issued a notice requiring Riehl Estate, as a successor to Barry, to show cause why it should not be required to comply with the af- firmative remedial provisions of the Board's Order against Barry. Riehl Estate denied responsibility for remedying Barry's unfair labor practices, and the matter was set for a hearing before an administra- tive law judge. At the hearing Riehl Estate conceded, and the judge found, that under NLRB v. Burns Security Services, 406 U.S. 272 (1972), Riehl Estate was a successor to Barry and therefore had an obligation to bargain in good faith with the Union, the collec- tive-bargaining representative of its predecessor's employees.3 The judge ' further found that when Riehl Estate began its operations, it was aware of Barry's unremedied unfair labor practices. In such circumstances, the judge concluded that under Golden State Bottling Co. v. NLRB, 414 U.S. 168 (1973), Riehl Estate was a successor with knowl- edge of its predecessor's unfair labor practices and therefore was jointly and severally liable with Barry to make the unit employees whole for losses resulting from Barry's refusal to execute the agreed-upon contract on 30 March 1978 until Barry ceased operations on 30 November 1978. The judge further found that, although there was no precedent for requiring a successor employer to execute and implement its predecessor's contract because of the predecessor's unlawful failure to execute that contract, the mere imposition of back- 2 Although a number of the Respondent's investors had been associat- ed with Barry, the parties stipulated that Riehl Estate was not an alter ego of Barry 2 As set forth more fully in the judge's decision, the backpay proceed- mg, Case 5-CA-9363, was consolidated with the unfair labor practice proceeding in Case 5-CA-11606 which alleged that Respondent Riehl Estate had unlawfully refused to bargain with the Union when Respond- ent Barry' ceased doing business The judge found that, in the absence of a bargaining demand by the Union, Riehl Estate had not refused to bar- gain with the Union, and therefore he recommended that the complaint in Case 5-CA-11606 be dismissed in its entirety No exceptions were filed to the judge's recommended dismissal of Case 5-CA-11606 278 NLRB No. 56 394 DECISIONS OF NATIONAL LABOR RELATIONS BOARD pay liability for the period ending with Barry's ces- sation of business was insufficient to remedy fully the existing unfair labor practices and restore the status quo ante. Accordingly, the judge further di- rected Riehl Estate to execute and implement the contract agreed to by Barry and to make its em- ployees whole for its own subsequent failure to execute and implement that contract from the date it began operations on 1 December 1978. In its exceptions, Riehl Estate concedes that it met the prerequisites for successor liability estab- lished in Golden State Bottling.4 However, Riehl Estate vigorously excepts to that portion of the judge's recommended Order directing it to execute and implement the contract agreed to by Barry and the Union and to make its employees whole for Riehl Estate's failure on 1 December 1978 to exe- cute and implement the contract. Riehl Estate con- tends that such portion of the judge's remedy is overly broad and is contrary to the policies and purposes of the Act. We initially note, as did the judge, that under Burns it is clear that a successor employer does not have a statutory bargaining obligation to assume its predecessor's contract with the union. Thus, as noted by the judge, even if the predecessor Barry had executed and implemented its contract with the Union, the successor Riehl Estate would not necessarily have had an obligation under Burns to comply with that contract. The judge reasoned, however, that because Section 10(c) of the Act au- thorized the Board to take appropriate remedial action to remedy an unfair labor practice, the ap- propriate remedial action here included requiring Riehl Estate, a successor, to adopt and implement its predecessor's contract. We disagree. The judge's analysis overlooks the Supreme Court's, holding in H. K. Porter Co. v. NLRB, 397 U.S. 99 (1970), that the Board lacks the remedial authority to impose contractual terms in- voluntarily on either party to a collective-bargain- ing agreement. The Court pointed out that under Section 8(d) of the Act the obligation to engage in good-faith 'bargaining "does not compel either party to agree to a proposal or require the making of a concession." Although acknowledging that 4 In its execeptions , Riehl Estate also makes the broader argument that because it did not have a contractual relationship with Barry and it did not purchase any assets from Barry, the principles of Golden State Bot- tling Co do not apply and therefore it is not obligated to remedy Barry's unfair labor practices . We find no merit to these contentions because, in agreement with the judge, we find that the substantially reduced manage- ment fees charged by Riehl Estate to Henry Knott, the former president of Barry, effectively constituted a payment by Riehl Estate for Barry's business Accordingly, we find it unnecessary to consider Riehl Estate's contentions or the judge's discussion on whether the principles of Golden State Bottling Co apply to a successor who had not purchased the assets or established a contractual privity with the predecessor employer. Section 8(d) explicitly refers only to a determina- tion of the parties' bargaining obligations, the Court found that the same principle implicitly ex- tends to the Board's Section 10(c) remedial author- ity. The Court stated: It would be anomalous indeed to hold that while §8(d) prohibits the Board from relying on a refusal to agree as the sole evidence of bad-faith bargaining, the Act permits the Board to compel agreement in that same dis- pute. The Board's remedial powers under §10 of the Act are broad, but they are limited to carry out the policies of the Act itself. One of these fundamental policies is freedom of con- tract. While the parties' freedom of contract is not absolute under the Act, allowing the Board to compel agreement when the parties themselves are unable to agree would violate the fundamental premise on which the Act is based-private bargaining under governmental supervision of the procedure alone, without any official compulsion over the actual terms of the contract.5 As noted above, the Supreme Court thereafter held in Burns that although a successor had the statutory obligation to bargain with the union that represented the predecessor's employees, the suc- cessor had no obligation to assume the predeces- sor's contract with the union. In so finding, the Court, quoting from H. K. Porter Co., 6 reaffirmed its holding that the Board did not have the statuto- ry authority to compel a party to assume contrac- tual terms that had not been voluntarily agreed on in negotiations. In Golden State Bottling, the Court held that a successor employer that acquired its predecessor's operations with the knowledge that the predecessor had discriminatorily discharged an employee was jointly and severally liable with the predecessor to remedy that unfair labor practice. In so holding, the Court pointed out that the Act contemplated that the Board would exercise its remedial author- ity by "striking a balance between the conflicting legitimate interests of the bona fide successor, the public, and the affected employee."7 The Court specifically noted, however, that it was "in no way qualify[ing] the Burns holdings" that a successor was not bound by the collective-bargaining agree- ment agreed to by the union and the predecessor employer, and it specifically stated that "a purchas- ing company cannot be obligated to carry out 5 H. K Porter Co, supra at 108, fns omitted 6 Burns, supra at 283 and 287 7 Golden State Bottling Co, 414 U S at 181 MARTIN J. BARRY CO. under Section 10(c) every outstanding and unsatis- fied order of the Board."8 The question presented in the instant case is what particular remedial obligations must Riehl Estate as a successor employer undertake in order to remedy fully its predecessor's unlawful refusal to execute and implement its contract with the Union. As indicated above, Riehi Estate has con- ceded that it is jointly and severally liable with Barry to make Barry's employees whole for the wages they lost between 30 March and 30 Novem- ber, the dates Barry refused to sign the contract and ceased operations. Moreover, the record estab- lishes that Respondent Riehi Estate has expressed a willingness to engage in good-faith, bargaining with the Union. Such good-faith bargaining supplement- ed by the joint and several backpay liability of Barry and Riehl Estate to Barry's former employ- ees for the time period between Barry 's failure to execute ,the contract and Barry's cessation of oper- ations on 30 November 1978 adequately remedies Barry's unfair labor practices. In our view, good- faith bargaining by a successor employer in con- junction with a make-whole obligation for the period ' ending with the predecessor's cessation of operations is sufficient to convince the unit em- ployees that the employing enterprise intends to comply fully with the requirements of the Act and strikes I an appropriate "balance between the con- flicting legitimate interests of the bona fide succes- sor, the public, and the affected employee[s]."9 AMENDED CONCLUSIONS OF LAW Substitute the following for paragraphs 5 and 6 of the judge's Conclusions of Law: "5. 1 Respondent Martin J. Barry Company, which did not appear in opposition to this proceed- ing, remains fully responsible to make whole all employees in the above-described bargaining unit for any losses suffered by reason of its refusal to give effect to the agreement which it made, but re- fused to execute, with the Union. That includes the differences between what Barry paid to its employ- ees between the effective date of the collective-bar- gaining agreement and 30 November 1978, the date that it ceased doing business. "6. Riehi Estate Management Co. is the succes- sor to Barry and, accordingly, is to be joined as a party Respondent to the Board Order against Barry in Case 5-CA-9363. It is fully responsible to make Barry's employees whole for any losses re- sulting from Barry's refusal to bargain collectively. It is therefore jointly and Severally liable for the same obligations and backpay as is Barry." e Id ate 183-184 fn 6. s Golden State Bottling, supra at 181 ORDER 395 The National Labor Relations Board orders that the Respondents, Martin J. Barry Company and Riehl Estate Management Co., Baltimore, Mary- land, their officers, agents, successors, and assigns, shall jointly and severally make whole Martin J. Barry Company's employees for any losses suffered by reason of the refusal of Martin J. Barry Compa- ny to give effect to its agreement with Carpenters District Council and its affiliated Local 974, United Brotherhood of Carpenters & Joiners of America, AFL-CIO, from the period 30 March 1978 to 30 November 1978. Such amounts as are due shall be paid with interest in the manner set forth in the Board's decision reported at 241 NLRB 1011 (1979), in the section entitled "The Remedy." IT IS FURTHER ORDERED that the issue concern- ing the determination of the amount of backpay due to the employees pursuant to the Board Order in Case 5-CA-9363 is severed, and jurisdiction thereof shall be retained by the administrative law judge for hearing, if necessary, upon application of any party to this proceeding. IT IS FURTHER ORDERED that the complaint in Case 5-CA-11606 is dismissed. Harvey A. Holzman, Esq., for the General Counsel. N. Peter Lareau, Esq., and Bruce P. Martin, Esq. (Vena- ble, Baetjer and Howard), of Baltimore, Maryland, for the Respondent Riehi Estate Management Co. DECISION STATEMENT OF THE CASE BENJAMIN SCHLESINGER, Administrative Law Judge. This case is a consolidated backpay and unfair labor practice proceeding. On April 20, 1979, the National Labor Relations Board rendered its Decision and Order (241 NLRB 1011), finding that Respondent Martin J. Barry Company, which had ceased operations on No- vember 30, 1978, engaged in unfair labor practices affect- ing commerce within the meaning of Section 8(a)(5) and (1) of the Act by refusing to execute a contract setting forth the terms of a final and binding agreement reached between it and Carpenters District Council and its Affili- ated Local 974, United Brotherhood of Carpenters & Joiners of America, AFL-CIO, although the Union had requested Barry to do so. The Board 's Order, requiring Barry to execute and comply with the terms of the agreement, has not been complied with. On October 18, 1979, no doubt because Barry was no longer in business, the Union filed a charge against Riehi Estate Management Co. and on May 9, 1980 , a complaint issued alleging that Riehl Estate was a successor to Barry and was required to bargain with the Union but had refused to do so. Further, on July 31, 1980, the Re- gional Director for Region 5 issued a notice requiring Riehi Estate to show cause why it should not be re- 396 DECISIONS OF NATIONAL LABOR RELATIONS BOARD quired to comply with the affirmative remedy provisions of the Board's Order against Barry, and why the issues relating to that preceeding and the amount of backpay due to employees should not be resolved at a formal hearing to be consolidated with the proceedings on the unfair labor practice complaint against it. On September 24, 1980, the Regional Director entered an order consoli- dating the unfair labor practice proceeding and the back- pay hearing and scheduled the same to be heard on Oc- tober 30, 1980, at which time such a hearing took place in Baltimore, Maryland. Barry did not appear; Riehl Estate denied the allegations of the 8(a)(5) complaint and denied responsibility, for Barry's violations of the Act. On consideration of the record in this proceeding, in- cluding the briefs filed by the General Counsel and Riehl Estate, and my observation of the demeanor of the wit- nesses, I make the following I. JURISDICTION Riehl Estate is a partnership providing apartment and shopping center maintenance service at various locations in the State of Maryland. During the 12 months preced- ing the issuance of the complaint, a representative period, Riehl Estate received gross revenues in excess of $50,000 from its operations. During the same period, Riehl Estate had combined purchases in interstate com- merce of materials and supplies valued in excess of $50,000 from points located outside the State of Mary- land and from wholesale and manufacturing enterprises which themselves purchased goods and materials valued in excess of $50,000 in interstate commerce from points located outside the State of Maryland. I conclude, as Riehl Estate admits, that at all material times it is and had been an employer engaged in commerce and in oper- ations affecting commerce within the meaning of Section 2(2), (6), and (7) of the Act. I further find and conclude, as Riehl Estate admits, that the Union is and has been at all times a labor organi- zation within the meaning of Section 2(5) of the Act. II. THE ALLEGED UNFAIR LABOR PRACTICE A. The Board's Prior Decision In its prior decision, the Board found that on July 1, 1977, a majority of the employees of Barry designated the Union as their representative for the purpose of col- lective bargaining with Barry for the following unit found appropriate for collective-bargaining purposes within the meaning of Section 9(b) of the Act: All full-time and regular part-time maintenance em- ployees employed by [Barry] at its various apart- ment and shopping center locations in Maryland; but excluding clerical employees, guards and super- visors as defined in the Act. The Union was certified on July 14, 1977. Commencing about September 9, 1977, the Union and Barry held a series of negotiating sessions culminating in Barry's submission of its final offer at a meeting held on December 15, 1977. About February 24, 1978, the Union informed Barry that it had accepted that offer. Barry agreed to draft a formal collective-bargaining agreement embodying the terms of its offer and transmitted a formal contract to the Union about March 30, 1978. On April 3, 1978, John H. Riehl III, Barry's general manager and as- sistant treasurer, wrote Barry's attorney stating that be- cause of a petition received from numerous employees, Barry would not sign the contract. The Union received a copy of the letter on April 4, 1978. Based on a stipulated record, the Board found that since about March 30, 1978, Respondent refused to bar- gain collectively with the Union as the exclusive repre- sentative of the employees in the appropriate unit by re- fusing to execute the agreed-on contract, and that, by such refusal, Barry had engaged in and was still engag- ing in unfair labor practices within the meaning of Sec- tion 8(a)(5) and (1) of the Act. As a remedy, the Board ordered Barry, if the Union so requested, to sign and give effect to a written contract embodying the terms of the agreement reached on February 24, 1978, including but not limited to the provisions relating to wages and economic benefits, and to make whole its employees for any losses suffered by reason of Barry's refusal to give effect to the agreement. B. Barry Discontinues Business and Riehl Estate Commences Business In early October 1978, Henry J. Knott, Barry's presi- dent, decided that Barry would no longer engage in property management activities. He sent letters dated October 3, 1978, to each of Barry's clients that Barry would cease doing business as of December 1, 1978; and, by notice dated November 2, 1978, he notified all em- ployees of Barry that their employment would be termi- nated as of November 30, 1978. Riehl attempted to salvage Barry's property manage- ment activities and formed a partnership of Riehl Estate with James F. Knott, the son of Henry J. Knott and Riehl's brother-in-law. Each contributed his personal funds towards the capitalization of the new partnership and became a 30-percent general partner. A 21-percent limited partnership interest was granted to Lakehurst Limited Partnership, itself a limited partnership consist- ing of approximately 60 children (including Riehl's wife) and grandchildren of Henry J. Knott.' Finally, the re- maining 19 percent was allocated as a limited partnership interest to four of Barry's former employees. Three of them had been Barry's three property managers and re- tained the same positions with Riehl Estate. The fourth, Barry's corporate secretary and office manager and bookkeeper, became Riehl Estate's office manager and bookkeeper. During November 1978 Riehl solicited the owners of the properties then managed by Barry and successfully obtained all of their property management business for Riehl Estate and, in addition, secured the consent of Barry's 15 project superintendents to remain as employ- ees of Riehl Estate. The managers and superintendents 1 Lakehurst had existed for a number of years and was not specially organized for its forthcoming share in Riehl Estate The record does not show whether James F Knott was a partner in Lakehurst MARTIN J. BARRY CO. 397 were then instructed by Riehl to solicit all Barry's field employees to apply for employment with Riehl Estate.2 Each field employee submitted an application and was interviewed by a manager or superintendent, who told the employee, only if asked, that he or she would be making at least the minimum wage and in no event no less than the employee was receiving from Barry.3 The week before December 1, 1978, approximately 95 per- cent of Barry's 135 unit employees were hired by Riehl Estate commencing on December 1, 1978, in the same capacity they worked for Barry and at the, same wages they were paid.4 In the interim, the complaint in Case 5-CA-9363 had issued on May 31, 1478; Barry had denied the commis- sion of any unfair labor practices in its answer, dated June 15, 1978; and the parties to that proceeding had, on November 8, 1978, executed a stipulation agreeing to the record of that proceeding, waiving a hearing before an administrative law judge and the issuance of an adminis- trative law judge's decision, and submitting the case di- rectly to the National Labor Relations Board for findings of fact, conclusions of law, and an Order based on the record. In the first week of November 1978, Oneal Fowler, business representative of Local 974, learned from Robert Hillman, Barry's then-attorney, that Barry was considering going out of business and that Riehl Estate was intending to establish a new company. On December 6, 1978, Fowler met with Hillman and Riehl, who ex- plained that Riehl Estate was going to carry on the same operations as that previously conducted by Barry, but with two general partners and five limited partners. Fowler offered to accept the contract previously negoti- ated with Barry, as yet unsigned, but he wanted addi- tional clauses for union security, checkoff, and health, welfare, and pension contributions. Riehl stated that he wished to confer with his partners, and the meeting ad- journed without agreement on a new date for further dis- cussions. When Fowler did not hear from anybody, he made calls to Hillman in January and February 1979, and he wrote Hillman in late February 1979 in an attempt to set up a meeting. In late March 1979, Hillman informed Fowler that he was no longer the attorney representing Riehl Estate.5 Fowler testified that following this advice, he called Riehl's office at least 10 to 12 times during the entire month of April and the first week of May and that his telephone calls were never answered. His receipt of the Board's Decision and Order against Barry in April and thereafter a letter from the Region in June 1979 prompt- 2 There is no evidence that Riehl Estate attempted to obtain a work force by any other means 2 According to one witness, only "several" employees and, according to another, "quite a few" employees, asked if they would be receiving more money. It is apparent that not all employees raised any question about their terms and conditions of employment. Holidays and other ben- efits were not discussed 4 About three employees had received from Barry a free apartment as part of their salary When they were offered positions by Riehl Estate, they were told that they would no longer receive their free apartments but they would be compensated in wages for the value of their apart- ments 5 Hillman's retirement as Riehl Estate's attorney is a curious event. Riehl testified that Hillman was fired by Barry's general counsel. ed him to call his attorney, Cosimo C. Abato, to contact N. Peter Lareau, Riehl Estate's new attorney, to see whether Riehl Estate would honor the Barry contract or would give a union-security clause; if so, the Union would be willing to settle the outstanding obligation of Barry. Abato contracted Lareau in June or July 1979 and offered a settlement on the basis that Riehl Estate sign the collective-bargaining agreement which had been negotiated with Barry and pay the entire amount re- quested by the NLRB or, in the alternative, that the Union would consider an amount less than that required by the Board decision in return for the addition to the previously negotiated agreement of a union-security and dues-checkoff provision. Lareau checked with Riehl Estate and advised Abato that his client was unwilling to settle the matter on either basis that Abato had suggest- ed. There has been no further contact between the par- ties or their representatives since that conversation, con- ceded to have occurred no later than July 1979. C. Riehl Estate's Refusal to Bargain Riehl Estate conceded that for the purposes of NLRB v. Burns Security Services, 406 U.S. 272 (1972), and Howard Johnson Co. v. Detroit Local Joint Executive Board, 417 U.S. 249 (1974), it was a successor to Barry. Burns was an unfair labor practice proceeding which in- volved a complaint against a successor for failing to rec- ognize its predecessor's union and to adopt its agreement with that union. Burns held that, although a successor was bound to recognize its predecessor's union and to bargain with it, the Board was without authority to re- quire the successor to honor the substantive provisions of the agreement executed by the precedessor, even though the successor had hired a majority of the predecessor's employees. The policies stressed by the Burns Court were: (1) freedom of contract under Federal labor policy (as Burns had not expressly or impliedly agreed to assume the obligations of its predecessor' s agreement); (2) inhibition of the free flow of capital if new employers were to be bound by preexisting agreements; and (3) freedom of the successor to make substantial changes in the operation of the enterprise. Howard Johnson, a Sec- tion 301 action, held that the new employer cannot be compelled to arbitrate obligations to the employees of the prior employer when there is no substantial continui- ty of identity in the work force hired and no express or implied assumption of the agreement to arbitrate. Because Riehl Estate has conceded that it is a succes- sor within the meaning of Burns, it is clear that it is obli- gated to bargain with the Union. Riehl Estate, however, defends against the 8(a)(5), complaint" against it on the ground that the complaint is barred by Section 10(b) of the Act, which required proof that it refused to bargain within the 6 months preceding the filing of the unfair labor practice charge. The instant charge was filed on October 18, 1979. For the purposes of Section 10(b), the cutoff date is April 18, 6 The basis of the unfair labor practice complaint is solely that Riehl Estate failed to bargain with the Union. It is not based on Riehl Estate's failure to assume Barry's agreement, a claim which would be dismissed on the authority of Burns 398 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 1979. The only acts alleged to have occurred within the period are unanswered telephone calls from Fowler to Riehl and the telephone conversations between Abato and Lareau. I conclude that neither are sufficient to sup- port the complaint. First, I do not credit Fowler's testimony regarding the numerous telephone calls which he allegedly made to Riehl. I found Fowler's recollections to be, at best, hazy and imprecise; and, although I found Riehl to be some- what elusive in other respects, I credit his denial that he received telephone messages during the latter part of April, a conclusion supported by a book maintained by his office indicating all telephone calls made and re- ceived during that period. The book indicates no calls from Fowler since March 21, 1979.7 Second, what prompted Abato's call to Lareau in June or July 1979 was not the refusal of Riehl Estate to bar- gain with the Union over terms and conditions of em- ployment of the successor's employees but was the Union's concern that there had been no compliance with the Board decision. As a result of that, Fowler requested Abato to contact Lareau to see whether the entire prob- lem could be settled. Abato's two conversations with Lareau, as well as two conversations with the Region's compliance officer, concerned Abato's attempt to,settle the unfair labor practice proceeding and did not consti- tute a demand for bargaining with the Burns successor. In any event, Riehl Estate did not refuse to consider Abato's offer. Rather than a refusal to bargain under the Act, there is present only a proposal by the Union for a contract and a rejection of that proposal by Riehl Estate. The Act "does not compel any agreement whatever," NLRB v. Jones & Laughlin Steel Corp., 301 U.S. 1, 45 (1937). Accordingly, I find that there was no demand for bargaining during the 6-month period preceding the filing of the Union's unfair labor practice charge and that Riehl Estate did not refuse to bargain with the Union during that period. I will dismiss Case 5-CA-11606. III. THE BACKPAY PROCEEDING Since the Board's decision in Perma Vinyl Corp., 164 NLRB 968 (1967), enforced sub nom. United States Pipe & Foundry v. NLRB, 398 F.2d 544 (5th Cir. 1968), and the Supreme Court's decision in Golden State Bottling Co. v. NLRB, 414 U.S. 168 (1973), the Board has held that a bona fide successor, who has knowledge of its predeces- sor's unfair labor practices, is responsible to correct those unfair labor practices under the authority of Section 10(c) of the Act authorizing the Board "to take such af- firmative action . . . as will effectuate the policies of this Act." Golden State involved a successor's responsibility only to reinstate with backpay employees who were dis- criminatorily discharged by the predecessor employer. There is in the message book an entry of Fowler's name at the top corner of the page for April 25. Although his name was not listed in the body of the page where messages are usually recorded, no explanation for his name being on the page was given I am nonetheless persuaded, because of considerations of demeanor, that Fowler did not call that day in any event, it is, at best, questionable that an unanswered telephone call, with the caller leaving only his name and no other message, consti- tutes a demand for bargaining , the failure to answer constituting, in turn, a refusal to bargain. The parties herein have been unable to find any case on point in which the Board or a Court directly considered the question whether a predecessor's failure to bargain under Section 8(a)(5) by refusing to execute an agreed-on collective-bargaining agreement should be remedied by the successor. My independent research has been similar- ly unavailing. The Supreme Court's analysis in Golden State, howev- er, is helpful. In discussing Burns, the Court wrote, 414 U.S. at 183-184, that it had held that the new company had been properly ordered to bargain with the bargaining representative which had been certified to the old company, since the bargaining unit remained essentially unchanged. It was also held, however, that the new employer was not bound by the collective-bargaining agreement agreed to by the union and the predecessor employ- er, inasmuch as § 8(d) of the Act, as well as the leg- islative history of the labor laws, reflected a policy against compelling a party to agree to substantive contractual obligations. 406 U.S., at 281-284, 291. Similarly, the Court refused to bind the union, since it might have made bargaining concessions with the previous employer which it would 'not necessarily agree to in negotiations with the successor. Id., at 288. The Court refused to qualify the Burns holding when it concluded in Golden State that the successor should be responsible for the violations of its predecessor. The Court wrote, 414 U.S. at 184: When a new employer . . . has acquired substantial assets of its predecessor and continued, without interruption or substantial change, the predecessor's business operations, those employees who have been retained will understandably view their job situa- tions as essentially unaltered. Under these circum- stances, the employees may well perceive the suc- cessor's failure to remedy the predecessor employ- er's unfair labor practices arising out of an unlawful discharge as a continuation of the predecessor's labor policies. To the extent that the employees' le- gitimate expectation is that the unfair- labor prac- tices will be remedied, a successor's failure to do so may result in labor unrest as the employees engage in collective activity to force remedial action. Simi- larly, it the employees identify the new employer's labor policies with those of the predecessor but do not take collective action, the successor may benefit from the unfair labor practices due to a continuing deterrent effect on union activities. The Court summed up the important policies served by its holding the bona fide successor responsible for its predecessor's violation-"[a]voidance of labor strife, pre- vention of a deterrent effect on the exercise of rights guaranteed employees by § 7 of the Act . . . and ptotec- tion for the victimized employee[s]." 414 U.S. at 185. Riehl Estate, however, argues, first, that it is not a suc- cessor under Golden State and, second, if it were to be so MARTIN J. BARRY CO. 399 bound by the predecessor's collective-bargaining agree- ment, the "important labor policy [which] opposed sad- dling the successor employer with the obligations of the collective bargaining agreement," as spelled out in Burns, id., would be defeated. The manner in which Riehl Estate has briefed these two issues raises a substantial question whether the two issues are not really one and the same. At the hearing, Riehl Estate conceded that it was a successor for Burns purposes-meaning that it was bound to recognize and bargain with the Union-but refused to concede that it was a successor for Golden State purposes-arguing, I had thought, that there were insufficient criteria to hold that it should be required to remedy the unfair labor practices of its predecessor. My reading of its brief indi- cates that its contention has been, in a meaningful fash- ion, abandoned or, at least, refined to one of whether, as a successor, it should be required to execute its predeces- sor's agreement and comply with it. My conclusion is based on- the following: Riehl Es- tate's argument begins with a discussion of footnote 9 of Howard Johnson, 417 U.S. at 262-263, which reads: [T]he real question in each of these "successorship" cases is, on the particular facts, what are the legal obligations of the new employer to the employees of the former owner of their representative? The answer to this inquiry requires analysis of the inter- ests of the new employer and'the employees and of the policies of the labor laws in light of the facts of each case and the particular legal obligation which is at issue, whether it be the duty to recognize and bargain with the union, the duty to remedy unfair labor practices, the duty to arbitrate, etc. There is, and can be, no single definition of "successor" which is applicable in every legal context. A new employer, in other words, may be a successor for some purposes and not for others. Following this, Riehl Estate argues that the extent of its obligations must begin with an analysis of Golden State, particularly whether a successor employer has an affirm- ative duty to remedy its predecessor's unfair labor prac- tices, thus implying that it is a successor but questioning the extent of its obligations. This is followed by its ac- knowledgment that there is a "substantial continuity" be- tween its and Barry's "business methods and employee complement," that it had notice of Barry's unfair labor practices at the time it started doing business, and that it had at opportunity to present. evidence on whether it was Barry's successor. Under established Board law, that is sufficient to con- stitute Riehl Estate as a successor. Miami Industrial Trucks, 221 NLRB 1223, 1224 (1975).8 The only other question raised by Riehl Estate is whether, because it did not purchase the assets of Barry, it somehow loses its successorship status. That is answered by Perma Vinyl Corp., 164 NLRB at 969 - "It is the employing industry that is sought to be regulated and brought within the corrective and remedial provisions of the Act in the in- terest of industrial peace." - and, more recently, by Hot Bagels of Staten Island, 244 NLRB 129 (1979), enfd. 622 F.2d 1113 (2d Cir. 1980). In the latter decision, the Board held that the finding of a successorship relation- ship is not grounded upon a purchase per se, noting that Burns did not involve a purchase. The court of appeals, enforcing, stated (622 F.2d at 1115): "A direct transac- tion between the violator of the labor laws against whom an order is originally entered and its eventual successor against whom it is sought to be enforced is not re- quired," citing NLRB v. Ethan Allen, Inc., 544 F.2d 742 (4th Cir. 1976), and NLRB v. Zayre Corp., 424 F.2d 1159 (5th Cir. 1970). In fact, because Barry essentially ren- dered a service-managing property-there were few material assets for Riehl Estate to purchase. In any event, under these authorities, I conclude that in a com- pliance proceeding, Riehl Estate is a successor. If the Board had required merely the reinstatement of an em- ployee, with backpay, I conclude that Riehl Estate would be required to comply with that remedy. But the real question is whether Riehl Estate, as a suc- cessor, is bound to comply with all the remedial terms of the Board Order against Barry, which here required that it execute and comply with Barry's agreement, when consideration is given to the Supreme Court's statement in Golden State, 414 U.S. at 184 fn. 6, that: "A purchas- ing company cannot be obligated to carry out under §10(c) every outstanding and unsatisfied order of the Board:" The easy answer is that the Board Order flows to Barry and its successors. Because I am bound by Board law, and because the Order clearly constitutes the law of the case, Schulte's IGA Foodliner, 241 NLRB 855, 856 (1979), that appropriately should fully dispose of the matter. However, because the parties have fully litigated and briefed the issue of the scope of the successor's li- ability, and there has been no motion made to the Board for reconsideration of its Order nor did anyone move to reopen the Board proceeding to introduce proof of changed circumstances, the matter is ripe for disposition herein.9 In weighing the policies enunciated in Burns and Golden State, I conclude that the prevention of the unfair labor practices is more important in the circumstances of this case.'O It is clear that Riehl Estate had notice of the unfair labor practices of Barry. Indeed, Riehl (with Hill- man, the sole negotiator for Barry) was the prime partic- ipant in those violations because it was he who, on April 3, 1978, notified the Union that Barry would not sign the 8 Had there been no concession by Riehl Estate in its brief, I would have found that it was a successor because there is no meaningful and appreciable difference in the operations, location, work force, working conditions, supervision, and services of the two business. Indeed, there was complete continuity of the employing entity from November 30, 1979, when Barry terminated its business, to December 1, when Riehl Estate started. Barry's supervisors hired Rtehl Estate's employees on Barry's time. All but perhaps seven or eight of Barry's employees who were lured by Riehl Estate were employed at the same locations on De- cember 1, 1979, as they worked on November 30 9 The General Counsel's brief offered alternatives to the remedy or- dered by the Board. Although one alternative was intriguing, my consid- eration of it is clearly outside the scope of the Order and, therefore, out- side the proper scope of my authority 10 The Supreme Court in Burns stated, 406 US at 274. "Resolution turns to a great extent on the precise facts involved here " 400 DECISIONS OF NATIONAL LABOR RELATIONS BOARD collective-bargaining agreement. He, too, must have had notice of the institution of the unfair labor practice pro- ceeding against Barry and all of the procedures which resulted in the Board Order. Thus, Riehl Estate's poten- tial liability for remedying the unfair labor practices was a matter about which Riehl could have taken steps to avoid by ensuring that Riehl Estate would not become a successor in the first instance or by ensuring that Barry's unfair labor practices had first been remedied. i i But knowing of the existence of the outstanding complaint against Barry, Riehl nonetheless proceeded to take ad- vantage of Barry's work force, including the existing managers of various properties, by hiring the employees at the same rate of wages and under the same conditions as those afforded by Barry, which was doing business in complete disregard of the collective-bargaining agree- ment which it was bound to execute. Recognizing that the parties stipulated that Rieh] Estate was not the alter ego of Barry, it is nonetheless important to note, other than ownership, the substantial identity of the two enterprises. Riehl was the former general manager of Barry and his principal partner was the son of the former owner of Barry. In addition, 21 percent of the stock remained in the Knott family, albeit for the children (including Riehl's wife) and grandchil- dren of Knott.12 Furthermore, Riehl Estate negotiated new agreements with all of Barry's former clients, in- cluding Henry J. Knott and Lakehurst,13 in which Riehl Estate charged its clients a percentage of monthly rent collected as a management fee_ All the percentages Rieh] Estate negotiated were the same as those charged by Barry, except that the charges were reduced for the property owned by Henry J. Knott,14 thus giving him the benefit of his successor's services and constituting, in a sense, payment for Riehl Estate's assumption from him of the management company. From the perspective of the employees, their employ- ment had changed in little material respects. Their jobs were the same; their locations were the same; their su- pervisors were the same. Riehl, still the general manager, had disavowed the very collective-bargaining agreement that he had agreed to execute. At no time has there been any implementation of that contract. The failure to correct Barry's violation of the Act must, as a necessary consequence, have deterred the em- ployees from their union activities. Here, the employees voted for the Union as their collective-bargaining repre- sentative, the Union negotiated for them and obtained Barry's oral agreement setting forth their terms and con- 11 In Golden State, 414 U S at 188 in. 10 the Court stated: "It is appar- ent that had [the predecessor employer] already reinstated [the employee] with backpay before the sale of its business, and thereby fully complied with the Board's order, [the successor employer] would have had no more obligation to employ him in the continuing business than it had to employ any of [the predecessor's] other employees " 12 Henry J Knott Jr, who maintained his office at the same location where Barry and Riehl Estate had their offices, was the partner of Lake- burst on whom legal notices of Riehl Estate were to be served. The owner of the office building was Martin Knott, his brother. 13 Only 4 or 5 of the 15 developments serviced by Barry were not wholly or partly owned by Knott family interests 14 Henry J Knott owned six or more developments. The service fee charged by Barry on some of those were reduced from 5 percent to 2 or 2-1/2 percent. On another, it was reduced to 1 percent. ditions of employment, and then Barry refused to sign its own submitted draft contract. Collective bargaining, which is at the heart of the Act, was thus thwarted, and employees could have been reasonably deterred from again exercising their right to self-organization, guaran- teed by Section 7 of the Act. Recognizing that the remedial powers of the Act are aimed at restoring the status quo that would have been obtained had not Barry violated the Act,15 and that if there had been an executed agreement Riehl Estate would not, under Burns, have been bound by Barry's agreement, the damage has now been done. Employees, knowing that their union representation has been for naught, would be disinclined to seek union assistance once Riehl Estate began its business. The mere imposi- tion on Riehl Estate of backpay liability for the period ending with, Barry's discontinuance of its business would be of little aid in renewing employee interest in self-orga- nization, but would permit Barry's violation to continue almost wholly unremedied and unabated. If Barry had corrected its actions and complied with the Board's Order, the employees would have been faced with Rieh] Estate's offer to reduce their wages and bene- fits, clearly a different choice than the one they were given. In this sense, Rieh] Estate has taken advantage of and benefited from Barry's unfair labor practices; and Riehl Estate's employees must have continued to be de- terred from union activities, an effect which the Board's Order, complied with in its entirety, will hopefully cure. 16 The Determination of Liability The Regional Director's order consolidating these pro- ceedings required that the backpay hearing be held for the following purposes: (1) to determine whether Riehl Estate should be joined as party respondent and named in the Board Order in Case 5-CA-9363; (2) to determine to what extent Barry and/or Riehl Estate should be re- quired to comply with the affirmative remedy provisions of that Board Order; and (3) to determine the amount of backpay due to the employees pursuant to the Board Order. With respect to item three, the parties agreed that once the issue of successorship and liability were deter- mined, they would be able to agree upon the amount of backpay and other terms and conditions necessary to comply with the prior Board Order. In accordance with that agreement, they agreed that the issues of successor- ship and liability would be severed from the instant pro- ceeding so that the parties might take exceptions to this decision and that the remaining issues of the amounts re- quired to comply with the Board Order would be pre- 11 NLRB v. Rutter-Rex Mfg. Co, 396 U.S 258, 263 (1969). 16 Two decisions cited by Riehl Estate to support its position that only partial relief should be granted are distinguishable: The successor in Southeastern Envelope Co., 206 NLRB 933 (1973), did not take over and undertake the work formerly performed by one of its predecessors In Thomas Engine Corp, 179 NLRB 1029 (1970), enfd. sub nom Auto Work- ers v. NLRB, 442 F.2d 1180 (9th Cir 1971), the successor did not per- form substantially the same work as its predecessor so that it could not be determined whether the discriminatees would have been offered em- ployment by the successor MARTIN J. BARRY CO. 401 served by me, for hearing, if necessary, if the parties were unable to resolve the computations to comply with the Board Order. Accordingly, on the basis of the foregoing facts and the entire record, I issue the following CONCLUSIONS OF LAW 1. Martin J. Barry Company and Riehl Estate Manage- ment Co. are each employers engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 2. Carpenters District Council and its affiliated Local 974, United Brotherhood of Carpenters & Joiners of America, AFL-CIO, are labor organizations within the meaning of Section 2(5) of the Act. 3. The following employees of Riehl Estate constitute a unit appropriate for the purposes of collective bargain- ing within the meaning of Section 9(b) of the Act: All full-time and regular part-time maintenance em- ployees employed by Riehl Estate at its various apartment and shopping centers locations in Mary- land; but excluding clerical employees, guards and supervisors as defined in the Act. 4. Riehl Estate has not violated Section 8(a)(5) and (1) of the Act. 5. Respondent Martin J. Barry Company, which did not appear in opposition to this proceeding, remains fully responsible to make whole all employees in the above- described bargaining unit for any losses suffered by reason of its refusal to give effect to the agreement which it made, but refused to execute, with the Union. That includes the differences between what Barry paid to its employees between the effective date of the collec- tive-bargaining agreement and November 30, 1978, the date that it ceased doing business. That also includes the differences between the amounts that Riehl Estate has paid since December 1, 1978, and continuing to present and what should have been paid under the terms of the collective-bargaining agreement.' 7 6. Riehl Estate is the successor to Barry and, accord- ingly, is to be joined as a party Respondent to the Board Order against Barry in Case 5-CA-9363. Under Golden .State, it is fully responsible to make its employees whole for any losses resulting from Barry's refusal to bargain collectively. It is therefore jointly and severally liable for the same obligations and backpay as is Barry. In addi- tion, Riehl Estate is bound to sign and give effect to the agreed-on collective-bargaining agreement for the full term thereof. [Recommended Order omitted from publication.] 17 All Barry's assets were liquidated and distributed to the Mano S and Henry J. Knott Foundation, a charitable foundation The relief grant- ed against Barry, therefore, may be wholly or partially meaningless.