Cutter Dodge, Inc.

572 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Cutter Dodge, Inc. and ILWU Local 142. Case 37- CA-1879. 14 February 1986 DECISION AND ORDER By MEMBERS DENNIS, JOHANSEN, AND STEPHENS On 28 December 1982 Administrative Law Judge William L. Schmidt issued the attached deci- sion. The Respondent filed exceptions and a sup- porting brief, and the Charging Party filed a memorandum in opposition to the Respondent's ex- ceptions. The National Labor Relations Board has delegat- ed its authority in this proceeding to a three- member panel.The Board has considered the deci- sion and the record in light of the exceptions and brief and has decided to affirm the judge's rulings, findings, 1, and conclusions2 and to adopt the rec- ommended Order. ORDER The National Labor Relations Board adopts the recommended Order of the administrative law judge and orders that the Respondent, Cutter Dodge, Inc., Pearl City, Hawaii, its officers, agents, successors, and assigns, shall take the action set forth in the Order. i The Respondent has excepted to some of the judge's credibility find- ings. The Board's established policy is not to overrule an administrative law judge's credibility resolutions unless the clear preponderance 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 In agreeing with the judge's conclusions, we find that at the time the Union requested recognition, the Respondent employed a substantial and representative complement of its work force, a majority of which had previously worked for the Respondent's predecessor in the appropriate unit. Thomas W. Cestare, Esq., for the General Counsel. Randall Y. C. Ching, Esq. (Gary Y. Shigemura), of Hono- lulu, Hawaii, for the Respondent. Dwight Takamine Esq., with Herbert R Takahashi, of Honolulu, Hawaii, for the Charging Party. DECISION STATEMENT OF THE CASE WILLIAM L. SCHMIDT, Administrative Law Judge. This matter, heard by me on November 4, 1982, at Hon- olulu, Hawaii, is based on a charge filed against Cutter Dodge, Inc. (Respondent) on April 1, 1982, by ILWU Local 142 (Union). The complaint was issued on behalf of the General Counsel by the Regional Director for Region 20 and alleges that the Respondent violated Sec- tion 8(a)(1) and (5) of the National Labor Relations Act. Respondent's timely answer denies commission of the al- leged unfair labor practice. On the entire record, including my observation of the witnesses who appeared before me at the hearing, and my careful consideration of the posthearing briefs filed by the Respondent and the Charging Party, I make the following FINDINGS OF FACT 1. JURISDICTION Respondent, a Hawaii corporation with an office and a place of business located in Pearl City, Hawaii, is en- gaged in the business of selling and servicing automobiles and related products. Based on a projection of its oper- ations since about February 3, 1982, at which time Re- spondent commenced its Pearl City operations, Respond- ent, in the course and conduct of those business oper- ations, will annually derive gross revenues in excess of $500,000. Since commencing its Pearl City operation, Respondent has purchased and received goods and sup- plies valued in excess of $50,000 directly from suppliers located outside the State of Hawaii. Based on the forego- ing, I find that Respondent is, and at all times material has been, an employer engaged in commerce or a busi- ness affecting commerce within the meaning of Section 2(2), (6), and (7) of the Act. H. THE LABOR ORGANIZATION Respondent admits that the Union is, and has been, a labor organization within the meaning of Section 2(5) of the Act, and I so find. - III. THE ALLEGED UNFAIR LABOR PRACTICE A. The Facts The dispute here concerns Respondent's legal obliga- tion to recognize the Union as the collective-bargaining representative of its parts and service department em- ployees after it purchased certain assets and assumed cer- tain obligations of an auto dealership known as Pearl City Chrysler, Plymouth and Dodge (Pearl City). The evidence discloses that the Union was selected in a Board-conducted election as the bargaining representa- tive for a unit comprised essentially of Pearl City's parts, service, and new car prep employees in April 1977. Thereafter, Pearl City and the Union entered into a col- lective-bargaining agreement which was effective by its terms until January 31, 1982.1 In the latter part of 1981, representatives of Pearl City and the Respondent entered into negotiations for the purpose of concluding the sale of Pearl City's auto deal- i The unit reflected in the collective-bargaining agreement is as fol- lows: All fulltime and regular parttime employees , excluding all executives, professional employees, supervisors, automobile salesmen, outside parts salesmen, dispatchers, confidential employees, industrial rela- tions and personnel department employees , watchmen, guards, stu- dents, and office clerical employees. I find the foregoing unit to be appropriate for the purposes of collective bargaining within the meaning of Sec. 9(b) of the Act. 278 NLRB No. 83 CUTTER DODGE, INC. ership to Respondent. These negotiations culminated in a signed buy-sell agreement on January 12, 1982. Under this agreement, Respondent agreed to purchase certain assets of Pearl City and to assume certain lease obliga- tions for a significant portion of the real property used by Pearl City in the conduct of its business operations. In furtherance of this agreement, Respondent was granted a franchise by the Chrysler Corporation to sell Dodge automobiles.2 On January 29, Pearl City closed its doors and on Feb- ruary 3, Respondent's auto dealership commenced busi- ness operations at the former Pearl City premises. Under the buy-sell agreement, Respondent purchased Pearl City's inventory of Dodge autos and a substantial portion of Pearl City's parts inventory. In addition, Respondent hired the managers of the parts and service departments who had been employed by Pearl City and nine of the former Pearl City employees in those departments. How- ever, as Pearl City's inventory of autos had already been prepared for sale, the Respondent had no immediate need for a new car prep operation. As a consequence, Respondent, employed none of Pearl City's new car prep employees.3 Nevertheless, there is no dispute about the fact that a majority of the Respondent's parts and service department employees were former Pearl City employ- ees and that this condition continued to exist until the last week in April when Respondent began a new car prep operation of its own. Likewise, there-is little or no dispute about the fact that the Respondent's operation was little other than a continuation of the Pearl City op- eration minus two lines of automobiles. None of the par- ties contend that Chrysler's "marketing decision" signifi- cantly altered the essential character of the operation. By letter dated February 5, the Union sought to have Respondent recognize it as the bargaining representative for the parts and service department. This letter was re- ceived by Respondent the following day. Geary testified that he never responded in any fashion to the Union's re- quest. Both Geary and Arthur Ogden, Respondent's busi- ness manager, testified that they believed' Respondent was not legally obliged to recognize the Union because it had not been a party to the collective-bargaining agree- ment and, in addition, the agreement had already expired by the time Respondent commenced its operation. As no response had been received from the Respondent, the Union filed the charge in this case on April 1. As noted above, in the latter part of April Respondent commenced its new car prep department. At the heart of Respondent's claim is the assertion by Geary and Ogden that the timing of the beginning of the new car prep op- eration was linked to the Respondent's receipt of autos purchased from Chrysler after it went into business and the need to prepare these autos for sale. However, their assertion in this regard is not consistent with other objec- tive evidence which shows that the Respondent began 2 Pearl City held a franchise to sell Chrysler, Dodge, and Plymouth autos. Respondent General Manager William R. Geary described the de- cision by Chrysler to franchise only a Dodge dealership for Respondent as a "marketing decision" by Chrysler designed to buttress other fran- chises on Oahu, a The evidence discloses that at least two other Pearl City unit em- ployees were not retained. One was a driver and the other was a clerk. 573 receiving autos which it purchased from Chrysler as early as March 30. In addition, Respondent purchased about 25 automobiles "off the dock" prior to its new car prep operations which also required customer prepara- tion. Altogether, Ogden estimated that 30 or 35 autos were purchased by the Respondent which required prep- aration for sale before it employed individuals to perform this work. The prep operations on these autos were per- formed either by independent contractors or Cutter Ford, a related enterprise. Nevertheless, when Respondent decided to do its own new car prep operations, it hired four additional employ- ees over the next 2-month period. Three appear to have been hired between April 23 and 27. None of Respond- ent's new car prep employees had worked for Pearl City. With the addition of these individuals to Respondent's complement of parts and service employees, the former Pearl City employees ceased to constitute a majority of the unit. This condition continued until approximately July 8, when Respondent ceased its new car prep oper- ations for business reasons and employees performing this' work were laid off. Thereafter, Respondent's new car prep services were performed by a Chrysler subsidi- ary on the mainland. Following the layoff of the new car prep employees, a majority of Respondent's part and service staff was once again former Pearl City employees and this condition continued to exist until additional unit employees were laid off for lack of work about 2 weeks prior to the hearing. B. Concluding Findings Because Respondent continued to operate essentially a similar enterprise (an automobile dealership) from the same location serving the same customer area and many of the same customers utilizing several of the same super- visory personnel as its predecessor, Pearl City, Respond- ent meets most of the classical criteria of a successor em- ployer. Miami Industrial Trucks, 221 NLRB 1223 (1975); Alliance Industries, 198 NLRB 646 (1972); Border Steel Rolling Mills, 204 NLRB 814 (1973). If, in addition to the foregoing, it is determined that a majority of Respond- ent's employee complement in the certified or historical- ly recognized unit were drawn from its predecessor's work force, then Respondent would have no basis to doubt the Union's representative status and would be obliged, absent unusual circumstances, to recognize the Union, on request, as -the representative of its employees in the appropriate unit. In making this determination, the Board typically looks. to the union's representative status at the time that it requests recognition. Hudson River Ag- gregates, 246 NLRB 192 (1979); First Food Ventures, 229 NLRB 1228 (1977); Danker Clock Co., 211 NLRB 719 (1974); Spruce-Up Corp., 209 NLRB 194 (1974). Howev- er, courts have held that a labor organization's represent- ative status should be, determined when the successor has employed a "full complement"' of employees in the unit for which the labor organization 'seeks recognition. NLRB v. Burns Security Services, 406 U.S. 272, 294-295 (1972); Pacific Hide & Fur Depot v. NLRB, 553 F.2d 609 (9th Cir. 1977). 574 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The dispute in this case focuses narrowly on the ques- tion about when Respondent employed a "full comple- ment" of employees in the unit for which the Union sought to be recognized, namely, the historical unit in which it was certified in 1977. Following the usual ap- proach taken by the Board, the General Counsel and the Charging Party assert that it is appropriate to examine the Union's represetative status at the time the Union re- quested recognition. By contrast, Respondent believes that it was privileged in refusing to bargain with the Union at that time because it had not yet employed a full complement of unit employees and did not do so until the end of April when it activated. its new car prepara- tion department. Once that department commenced oper- ation, Respondent asserts that the Union lacked "majori- ty" status because a majority of its employees between the last week in April and the first week of July had not previously been employed by Pearl City, its predecessor. In a recent case dealing with this issue, the 10th Cir- cuit observed: The process of identifying a full complement thus involves balancing the objective of insuring maxi- mum employee participation in the selection of a bargaining agent against the goal of permitting em- ployees to be represented as quickly 'as possible. It would be ludicrous to postpone defining a full com- plement until the successor of a small' enterprise has achieved the status of a multibillion dollar interna- tional corporation. But it could also be inappropri- ate to precipitately point to a full complement as ex- isting at the moment a successor assumes operation of an essentially moribund predecessor. NLRB v. Pre-Engineered Building Products, 603 F.2d 134, 136 (10th Cir. 1979). In my judgment it would be inap- propriate to strike the balance involved in the instant case in favor of delaying the determination of the Union's majority status until such time as Respondent commenced its own new car preparation operations. Unlike the situation found in Pacific Hide & Fur, supra, or Pre-Engineered Building Products, supra, Respondent's decision to even utilize a new car preparation depart- ment was clearly a tentative one from the outset. Thus, the objective evidence in this case establishes-contrary to Respondent's assertion-that it had a need for a new car preparation operation substantially before the end of April when it finally decided to hire employees for that purpose. Where, as here, the evidence shows that it began receiving autos it ordered from Chrysler in late March and purchased other autos "off the dock" which required preparation for ' sale before that, it is resonable to infer Respondent was entertaining some doubt even at this time about the efficacy of having its own new car prep department. Moreover, the availability of this serv- ice from outside contractors and another related enter- prise further serves to factually distinguish the circum- stances here from those in the foregoing cases relied on by Respondent. Hence, any conclusion that Respondent had not yet employed a full complement of the employ- ees at the time the Union sought recognition would serve only to deprive already represented employees of the services guaranteed by the Act for an inordinate period. For these reasons, it is concluded on the basis of the record before me that at the time Respondent received the Union's demand for recognition, it had employed all the unit employees it intended to employ for the forseea- ble future and that it was not privileged "in refusing the Union's request at that time. By doing so, Respondent violated Section 8(a)(1) and (5) of the Act. IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The unfair labor practices engaged in by Respondent occurring in connection with its operations described in section I, above, have a close, intimate, and substantial relationship to trade, traffic, and commerce among the several States and tend to lead to labor disputes burden- ing and obstructing commerce and the free flow of com- merce. V. THE REMEDY Having found that Respondent engaged in unfair labor practices within the meaning of Section 8(a)(1) and (5) of the Act, the recommended Order will require Respond- ent to cease and desist and to take such affirmative action as will effectuate the policies of the Act. On the basis of the foregoing, and on the entire record in this case, I make the following CONCLUSIONS OF LAW 1. Respondent is an employer within the meaning of Section 2(2) of the Act and is engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 2. The Union is a labor organizaiton within the mean- ing of Section 2(5) of the Act. 3. Respondent is Pearl City's successor. 4. All full-time and regular part-time employees of Re- spondent excluding all executives, professional employ- ees, supervisors, automobile salesmen, outside parts sales- men, dispatchers, confidential employees, industrial rela- tions and personnel department employees, watchmen, guards, students, and office clerical employees constitute a unit appropriate for collective bargaining. 5. At all material times the Union has represented a majority of the employees in the unit set forth in Conclu- sion of Law 4, above. 6. By failing and refusing to recognize and bargain with the Union as the collective-bargaining representa- tive of the employees in the unit set forth in Conclusion of Law 4, above, Respondent has engaged in, and is en- gaging in, an unfair labor practice within the meaning of Section 8(a)(5) and (1) of the Act. 7. The unfair labor practice engaged in by Respond- ent, as set forth in Conclusion of Law 6, above, affects commerce within the meaning of Section 2(6) and (7) of the Act. CUTTER DODGE, INC. On these findings of fact and conclusions of law and on the entire record, I issue the following recommend- ed4 ORDER The Respondent, Cutter Dodge, Inc., Pearl City, Hawaii, its officers, agents, successors, and assigns, shall 1. Cease and desist from (a) Failing or refusing to recognize ILWU Local 142, as the collective-bargaining representative of its employ- ees in the following appropriate unit: All fulltime and regular parttime employees of Cutter Dodge, Inc.; excluding_ all executives, profes- sional employees, supervisors, automobile salesmen, outside parts salesmen, dispatchers, confidential em- ployees, industrial relations and personnel depart- ment employees, watchmen, guards, students, and office clerical employees. Or failing or refusing to bargain with the labor organiza- tion respecting rates of pay, wages, hours, or other terms or conditions of employment of its employees in the aforesaid appropriate unit. (b) In any like or related manner interfering with, re- straining, or coercing employees in the exercise of their rights to self-organization, to form, join, or assist labor organizations, to bargain collectively through representa- tives of their own choosing, or to engage in other con- certed activities for the purpose of collective bargaining or other mutual aid or protection as guaranteed in Sec- tion 7 of the National Labor Relations Act, or to refrain from any or all such activities, except to the extent that such right may be affected by an agreement requiring membership in a labor organization as a condition of em- ployment in conformity with Section 8(a)(3) of the Act. 2. Take the following affirmative action necessary to effectuate the policies of the Act. (a) On request, bargain with ILWU Local 142, as the collective-bargaining representative of the employees in the aforesaid appropriate unit respecting rates of pay, wages, hours, or other terms or conditions of employ- ment and, if an understanding is reached, embody that understanding in a signed agreement. (b) Post at its premises in Pearl City, Hawaii, copies of the attached notice marked "Appendix."5 Copies of the 4 If no exceptions are filed as provided by Sec 102.46 of the Board's Rules and Regulations, the findings, conclusions, and recommended Order shall, as provided in Sec 102.48 of the Rules, be adopted by the Board and all objections to them shall be deemed waived for all pur- poses. 5 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 Nation- al Labor Relations Board" shall read "Posted Pursuant to a Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board." 575 notice, on forms provided by the Regional Director for Region 20, after being signed by the Respondent's au- thorized representative, shall be posted by the Respond- ent immediately upon receipt and maintained for 60 con- secutive days in conspicuous places including all places where notices to employees are customarily posted. Rea- sonable steps shall be taken by the Respondent to ensure that the notices are not altered, defaced, or covered by any other material. (c) Notify the Regional Director in writing within 20 days from the date of this Order what steps the Re- spondent has taken to comply. APPENDIX NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government After a hearing before an administrative law judge, at which all parties had the opportunity to present evidence and arguments, it has been decided that we have violated the National Labor Relations Act in connection with our failure to recognize and bargain with ILWU Local 142 concerning certain employees in our parts and service departments. We have, therefore, been ordered to post this notice and carry out its terms. WE WILL NOT refuse to recognize or bargain with ILWU LOCAL 142 as your union about your rates of pay, wages, working hours, and other matters connected with your work. WE WILL NOT in any like or related manner interfere with, restrain, or coerce you in the exercise of your rights to self-organization, to form, join, or assist labor organizations, to bargain collectively through representa- tives of their own choosing, or to engage , in other con- certed activities for the purpose of collective bargaining or other mutual aid or protection, as guaranteed in Sec- tion 7 of the National Labor Relations Act, as amended or to refrain from any or all such activities, except to the extent that such right may be affected by an agreement requiring membership in a labor organization as a condi- tion of employment in conformity with Section 8(a)(3) of the Act. WE WILL, if we are asked to do so by ILWU LOCAL 142, recognize and bargain with it as your union about your rates of pay, wages, working hours, and other mat- ters connected with your work . If we come to an agree- ment about any of these things with ILWU LOCAL 142, WE WILL put that agreement in writing and, sign it. CUTTER DODGE, INC.