Elal Realty Management Inc.

6 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Elal Realty Management Inc. and Local 32B-32J, Service Employees International Union, AFL- CIO. Case 29-CA-10463 31 March 1986 DECISION AND ORDER BY MEMBERS DENNIS, JOHANSEN, AND BABSON On 19 March 1985 Administrative Law Judge Marion C. Ladwig issued the attached decision. The Respondent 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, i and conclusions and to adopt the recommended Order.2 ORDER The National Labor Relations Board adopts the recommended Order of the administrative law judge and orders that the Respondent, Elal Realty Management Inc., Queens, New York, its officers, ' 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 The judge relates that the assignment of the general partnership inter- est, by Murray Glantz , to an as-yet-unincorporated corporation (64-34 102d Street Realty Corp.) was contingent upon Elisha Najjar's "acquiring 'a majority in interest of the limited partners "' More correctly , the as- signment was contingent on the approval of a majority in interest of the limited partners. "[t]his assignment is further made subject to and shall not become effective until it is approved , in writing, by a majority in in- terest of the limited partners of the Partnership " Additionally, in his Conclusions of Law, the judge inadvertently stated that the discharges occurred on 2 April 1983 instead of on 29 April 1983 2 The judge found that the Respondent violated Sec 8(a)(3) and (1) of the Act by discharging employees Jose Rivera, Jorge Melendez, and Fer- nando Melendez The Respondent has excepted , contending, inter alia, that the three men were not its employees . The Respondent argues that because it never employed the three men, it could not have discharged them We affirm the judge's finding that the three men were Elal 's employees and that the Respondent unlawfully discharged them In so doing, we need not pass on whether or not Elal employed these employees between 1 April and 10 April 1983-the period when Elal initially managed the apartment building Rather, we have focused particularly on 29 April 1983-the day that Elal resumed management of the apartment building and the day of the discharges On that day, Rivera and Jorge Melendez both worked full shifts and Charles Shohet, Elal's manager, assigned Rivera additional duties to do that evening Only after these events did Shohet give Rivera and Jorge Melendez their termination letters (Jorge was also given his brother Fernando's letter ) Based on the above, we find that the Respondent employed the three employees on 29 April and subsequently discharged them for unlawful reasons Further, assuming arguendo that the three men were never em- ployed by Elal, we would find that the employees were not hired by the Respondent for discriminatory reasons agents, successors, and assigns, shall take the action set forth in the Order. Amy S. Krieger, Esq., for the General Counsel. Joel Spivak, Esq. (Solotoff & Spivak), of Great Neck, New York, for the Respondent. DECISION STATEMENT OF THE CASE MARION C. LADWIG, Administrative Law Judge. This case was tried in Brooklyn, New York, August 13-14 and October 1, 1984. The charge was filed May 9, 1983,' and amended at the trial, and the complaint was issued June 29. After acquiring an apartment building through the debtor-in-possession in a bankruptcy proceeding, the Company notified the three service employees that their employment was terminated and refused to recognize and bargain with their union. The primary issues are whether the Company, the Respondent, (a) discrimina- torily discharged the employees and (b) unlawfully re- fused to recognize and bargain with the Union in viola- tion of Section 8(a)(1), (3), and (5) of the National Labor Relations Act. On the entire record,2 including my observation of the demeanor of the witnesses, and after consideration of the briefs filed by the General Counsel and the Company, I make the following FINDINGS OF FACT I. JURISDICTION Elal Realty Management Inc., a New York corpora- tion, manages a rental apartment building in Queens, New York, where it annually derives over $500,000 in gross revenues and purchases goods valued over $50,000 directly from outside the State. The Company admits and I find that it is an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act and that the Union, Local 32B-32J, Service Employees International Union, AFL-CIO, is a labor organization within the meaning of Section 2(5) of the Act. H. ALLEGED UNFAIR LABOR PRACTICES A. Acquisition of Bankrupt Business In November 1978 Forest Hills Associates (a limited partnership) acquired a 159-unit apartment building at 64-34 102d Street, Forest Hills, Queens, New York, for the purchase price of $4,250,000. The property was en- cumbered with a first mortgage of $925,000 and a second mortgage of $700,000 requiring monthly payments on principal and interest of $12,946.66. The remaining half of the purchase price ($1,625,000) was covered by a pur- I All dates are in 1983 unless otherwise indicated 2 As corrected by the court reporter, the sentence at p 65, L 9 of the transcript reads "Management does not want any members of the union working here " 279 NLRB No. 2 ELAL REALTY MANAGEMENT chase money mortgage, constituting a third mortgage on the property. (G.C. Exh. 9.) The operation of the business, through various man- agement agents, was not a success . The net income from the apartments was insufficient to make the mortgage payments and other expenses. One of the tenants, Eugene Leon (the regional personnel director for Marriott Cor- poration at JFK International Airport), who impressed me most favorably as a perceptive and sincere witness, credibly testified about how the condition of the building and the services to the tenants were allowed to deterio- rate. He testified that overall the tenants were pleased with the services of the three building service employees, Superintendent Jose "Pepe" Rivera, handyman Fernando "Chu" Melendez, and porter Jorge "Cholo" Melendez. On the other hand, he recounted the "nonservices" of the management. (Tr. 58-59.) He described the leaking of the roof, resulting in damage to apartments and the smell of mildew. (Tr. 70.) There were the recurring problems of boiler breakdowns and no heat in winter, no drinking water available, contractors not taking care of elevators, and contractors not coming in at all. (Tr. 59, 69.) He recalled that "when we would complain let's say to Pepe [Superintendent Rivera, who had been there since 1971], he would say I've asked for the materials, they're not here. I've asked for this machinery, it's not here. I've asked for this plaster or cement, it's not here. I've asked for the painter to come in, it's not here. When we would call, management would hang up the phone on the tenants. . . . In essence, if I may say for the record, the [rent] strikes that we had on two or three oc- casions was not because the crew was not giving us the service, but because management was not providing the necessary equipment for the job to be done." (Tr. 67.) The deficits continued under a rent administrator who was appointed in a court proceeding brought by the ten- ants of the building, and also under a receiver appointed February 26, 1982, in a foreclosure proceeding brought on the $700,000 second mortgage (G.C. Exh. 7). On May 6, 1982, Century Operating Corp., serving under the re- ceiver as managing agent of the building, signed an assent to be bound by the Union's 1982-1985 apartment building agreement (G.C. Exh. 19) for a bargaining unit of building service employees. On November 26, 1982, Forest Hills Associates (the Debtor) filed a voluntary petition for reorganization under Chapter 11 of the Bankruptcy Code. By early Jan- uary 1983 Elisha Najjar had decided to acquire the apartment building through the bankruptcy proceeding. He is the president of both the Respondent Company, Elal Realty Management Inc. (the Company) and the re- lated corporation, 64-34 102d Street Realty Corp. (the Realty Corporation). Acting upon Najjar's behalf, on January 13 an attor- ney for the Debtor filed in the bankruptcy court an "Af- fidavit in Opposition to Application to Appoint a Trust- ee" (Tr. 502, G.C. Exh. 8). The document informed the court that the Debtor intended to seek court authority to substitute Najjar for Murray Glantz as the general part- ner of the Debtor. The document in effect acknowledged that unsatisfactory operation and management had been the cause of the tenant unrest, and that the new manag- 7 ing agent (with the same building service employees) was operating the building to the satisfaction of the ten- ants. The affidavit pointed out that after the filing of the Chapter 11 petition, "the Debtor retained the firm of E. Osborne Smith, Inc. as managing agent to operate the property," that "The Operation of the Building by the Managing Agent has been more than satisfactory for all concerned," and that "The tenants, who prior to the commencement of these proceedings, had been very vocal in their criticism of the Building's operations are now pleased." On February 16, Najjar and Glantz filed an "Assign- ment of General Partnership Interest" in the bankruptcy proceeding, subject to Najjar (through "a corporation to be formed by the name of 102nd Street Realty Corp.") acquiring "a majority in interest of the limited partners" (G.C. Exh. 10). I note that paragraph 6 of the assignment (which Najjar personally signed) specifically refers to the Debtor's "Schedules and Statement of Affairs," a docu- ment filed February 8, listing under "Schedule A-1- Creditors Having Priority" (G.C. Exh. 3), (b) Contributions to employee benefit plans for services rendered within 180 days before filing of petition or cessation of business, if earlier (specify date). Building Service-32B-J-Pension Building Service-32B-J-Health (10/1/82-11/26/82) Total-$696.16 This listing indicates that contributions to the Local 32B-32J's pension and health funds had not been made in October and November 1982 for the building service em- ployees. I also note that the Debtor's November 26-De- cember 31, 1982 "Operating Statement," filed the day before on February 7 (G.C. Exh. 4), lists under "Ex- penses (Accrual Basis)," "Union Health & Pension Funds" in the amount of $654.66. (I discuss below Naj- jar's credibility and his denials of awareness of the Union.) By March 15 (G.C. Exh. 7), Najjar had signed agree- ments to acquire 24 of the 25 limited partnership units. On March 17, the Debtor' s managing agent signed (on behalf of the Debtor as the employer) and mailed to the Union a copy of the "1982 Apartment House Agree- ment" (Tr. 312, G.C. Exhs. 22 and 26) as the Union re- quested March 7 (G.C. Exh. 21), covering the three building service employees. On March 23 Najjar, as president of the Realty Corpo- ration, acting as the Debtor's general partner, signed and filed the Debtor's "Plan of Reorganization" (G.C. Exh. 2). In it, Najjar pointed out that he and Albert Nassim (who is the secretary-treasurer of both the Company and the Realty Corporation) were then the holders of the third mortgage on the property. Najjar classified the claims and interests and stated that the "Class 2" claims, including the priority section 507(a)(4) claims (the claims for contributions to employee benefit plans arising within 180 days before the filing of the petition), were to be paid in full. For implementation of the plan, the docu- ment provided that "The funds necessary for the satisfac- 8 DECISIONS OF NATIONAL LABOR RELATIONS BOARD tion of creditors' claims shall be generated by the Debt- or's General Partner from its funds and from funds gen- erated from the Debtor's operation." On April 28 Glantz, as the retiring general partner of the Debtor, signed a "Certificate of Amendment to Cer- tification of Limited Partnership of Forest Hills Associ- ates" (G.C. Exh. 13), stating that the Realty Corporation had been substituted for 19 limited partners and that the Company had agreed to serve as general partner. He at- tached two documents, each signed by Najjar as presi- dent and dated April 29, consenting that the Company would serve as general partner and the Realty Corpora- tion would serve as a limited partner. B. Initial Management of Building The Company initially began managing the property on April 1, shortly after President Najjar filed the March 23 plan of reorganization in the bankruptcy court. On April 1 Isaac Davis, representing the managing agent, E. Osborne Smith, Inc., informed Superintendent Rivera that Davis had lost his job and said "goodbye and good luck for your new manager." Then Managing Agent Charles Shohet, representing the Company, came in and said, "Pepe, I'm the new manager" for the "new owner." (Tr. 80, 88-89.) Shohet handed Rivera an enve- lope containing copies of a letter to the tenants, to be posted on the bulletin board and placed under the apart- ment doors. The letter, dated April 1 on the Company's stationery, began (G.C. Exh. 14): Please note that as of today Elal Management Realty Corp. will start managing the above proper- ty for the new owners. The letter directed that the rent payments be made to the Company. It was signed by Shohet as managing agent for the Realty Corporation. The Company made no change in the building service crew, retaining Superintendent Rivera, handyman Fer- nando Melendez, and porter Jorge Melendez. It is undis- puted that Shohet (who did not testify) then left, telling Rivera, "I see you next week." (Tr. 81.) Ten days later, however, Davis returned to the build- ing with a letter to the tenants from the Debtor's attor- neys. The letter (G.C. Exh. 15), dated April 11, notified the tenants that "At this time E. Osborne Smith, Inc. continues to manage the property" and advised them to make any unpaid rent payment to that managing agent. When Company President Najjar (the Company's only witness) was called to testify in the Company's defense, he completely ignored the Company's initial management of the building-and the retention of the three building service employees-during the first part of April. He did give undisputed testimony, however, that the Company never made any wage payment to the three employees. (Tr. 525.) I therefore infer that sometime before April 11 the Company realized that its management of the build- ing was premature, that it restored the management of the building to the previous managing agent to await the filing of appropriate documents for bankruptcy court ap- proval of the reorganization plan, and that it did not in the meantime pay the three employees directly for the time it employed them in the management and operation of the building. C. Termination of Union Employees On April 29, when the Company resumed management of the building, it terminated the three building service employees, who it admittedly knew were represented by the Union. (Tr. 476.) The Company had neither criticized their work nor interviewed them for continued employment. Instead, on April 11 and 12 the Company had advertised in the Daily News for a building superintendent-at an undis- closed apartment house (R. Exh. 4). It is undisputed that meanwhile, on April 26 when the Company' s managing agent Shohet returned to the building and had porter Jorge Melendez (with the help of his brother, handyman Fernando Melendez) move over a hundred cans of paint from the gas room to the office, Shohet told Jorge Me- lendez that he liked the way Jorge worked. (Tr. 279, 293.) About 5 or 5:30 p.m., April 29, Managing Agent Shohet went to the building, handed Superintendent Rivera some letters, and said he should place them on the bulletin board and under the tenants' doors (Tr. 96). One letter (G.C. Exh. 16D) was from the Debtor's attor- neys, dated April 28, stating that effective April 29, the Company and the Realty Corporation assumed control of Forest Hills Associates (the Debtor). The other was from the Company, dated April 29 (G.C. Exh. 16A), stating that under a court order, the Company "has been nominated as the new managing agent for Forest Hills Associates." Shohet also gave Rivera, in a sealed envelope, a copy of the letter addressed to the building service employees. Dated April 29 and signed by Shohet for the Company, the letter read (G.C. Exh. 16C): Please be advised that the operation and manage- ment at 64-34 102nd Street is no longer being con- ducted by E. Osborne Smith, Inc. the company which previously engaged your services and there- fore your employment is terminated as of this time. Without informing him that he had already been dis- charged or that he and the two other building service employees had been replaced, Shohet told Rivera that he had to apply for the job and asked him for references. Being shocked at having to make an application after being on the job about 15 years, Rivera responded that he had over 169 references in the building (referring to the tenants). Upon leaving the office, Rivera posted and distributed the letters to the tenants as Shohet had in- structed. (Tr. 97-98.) Shohet then called porter Jorge Melendez into the office and gave him his paycheck and a copy of the sealed termination letter (Tr. 280, G.C. Exh. 17), as well as the paycheck and termination letter for his brother, handyman Fernando Melendez , who was not working that day (Tr. 336, G.C. Exh. 28). Shohet said nothing about Jorge Melendez or his brother apply- ing for the jobs (Tr. 280, 294). About an hour and a half later, Shohet returned with a new superintentent, Doug- ELAL REALTY MANAGEMENT lass Hebert, his wife and child, and with a new handy- man Harold Feder (Tr. 106.). Either that evening or the next morning, April 30, a third letter to the tenants (G.C. Exh. 16B) was posted on the bulletin board. (Tr. 104.) Dated April 29 and signed by Managing Agent Shohet, the letter stated that Hebert and Feder were the superintendent and handyman and advised the tenants that all "necessary maintenance or re- pairs" were to be left at the superintendent's office. Nothing was said in the letter about taking complaints to the managing agent or other company official. Building Superintendent Hebert became the Compa- ny's spokesman in the building. Contrary to the former practice of the managing agents preparing notices to be posted or placed under the tenants' doors, Hebert himself wrote out and posted the notices, signing them first as manager and later as superintendent. (Tr. 53-54) He had numerous conversations with the tenants, interviewed applicants, informed tenant Leon and other tenants that he was hiring Feder, and told Leon at one point that he would fire Feder "if he doesn't shape up." (Tr. 54, 60, 63.) As Leon credibly testified, Hebert informed Leon that Hebert had hired Malik Rafiq to start working as a security guard about the middle of May, and about 2 weeks later informed him that "I'm going to give a job to Eddie as a [relief] security guard 'cause he knows the tenants and the tenants know him, he knows who will be coming into the building" (Tr. 61). (Malik later became a handyman.) (Tr. 458.) About April 30, the day after Hebert and Feder first arrived in the building but before Feder began working as a porter and handyman, tenant Leon observed He- bert's wife sweeping, mopping, and taking out the gar- bage. (Tr. 52-53.) It is undisputed that when Leon com- mented that they "would not be able to cover all the needs of the building," Hebert promised "that he would be hiring some people to do some work for the build- ing." (Tr. 60.) As discussed below, Hebert later failed in his attempt to rehire Jorge Melendez to work as a non- union porter. It is also undisputed that Feder was not a well-round- ed handyman as the terminated Fernando Melendez was (Tr. 334) and that sometimes when Hebert assigned him to make repairs in someone's apartment, he was not qualified to make the repairs. (Tr. 53.) After Jorge Melendez refused to work nonunion, the Company failed to hire either a full-time qualified handy- man or a full-time porter. The result was that from the time the Company took over and replaced the three building service employees, the condition of the building and the services to the tenants greatly deteriorated. As credibly summarized by tenant Leon, "It has never been as bad . as it is at the present time." (Tr. 67-68.) D. Antiunion Motivation and Refusal to Bargain Shortly after the Company took over the management of the apartment building on April 29, the new building superintendent, Hebert, revealed the Company' s antiun- ion motivation for not retaining the three union employ- ees in the bargaining unit. While awaiting a ride to work, tenant Leon saw Hebert, porter Jorge Melendez, and handyman Fernando Melendez in the lobby. As he credi- 9 bly testified, Leon overheard part of a conversation be- tween Hebert and Jorge Melendez. He overheard Melen- dez ask that if Hebert was going to hire someone, why not give his brother and him the job "because we have no problems with the tenants and we've always done our job." Hebert answered, "Hey, guys, I'm sorry, but I can't do anything for you. Management does not want any union people working here." (Tr. 55-56, emphasis added.) Leon later told Hebert the two guys "did a hell of a job here" and that Hebert "may want to take them back," but he did not do so. (Tr. 66.) Hebert did not testify. Porter Jorge Melendez recalled having two conversa- tions with Hebert, on May 3 and 4, about the Union (Tr. 291). He credibly testified that in the first conversation (part of which tenant Leon overheard), Hebert told him, "Jorge, I have many problems in the building. The people are telling me that you work good. And I need you here." Hebert told him, however, that Hebert could not give him any work "because I was in a union," and he responded that he could not work without a union. (Tr. 282, 287.) The next day, Hebert again told Jorge Melendez, "I have many problems in the building" and added that if he wanted, he could return to work, but he "should remember, no union." Jorge Melendez again re- sponded that he could not come back without a union. (Tr. 283-284.) On May 18 the Company received a certified letter from the Union, dated May 11 (G.C. Exh. 24A), enclos- ing a copy of the 1982 Apartment House Agreement that the previous managing agent had signed for the Debtor and returned March 17 to the Union. The letter request- ed the Company either to sign it or begin negotiations for a new collective-bargaining agreement . On May 26, the Company received a second request from the Union, dated May 24 (G.C. Exh. 25A), to begin negotiations for the service employees at the building. The Company failed to respond to either letter. E. Shifting Defenses In its opening statement at the trial, the Company argued that "as a new owner Mr. Najjar treated the em- ployees who were currently there as applicants for em- ployment, interviewed certain employees, also inter- viewed people from the street, made a bona fide decision as to which employees it was going to hire without con- sideration of any union recogni- union status." (Tr. 30.) To the contrary, the evidence is clear that the Company did not treat the three union employees as applicants, but hired replacements and summarily terminated the em- ployees in writing before making any mention of filing an application. When President Najjar was called as the Company's sole defense witness on the last day of the trial (follow- ing a 7-week delay), he presented an inconsistent defense, in effect admitting that he did not regard the three build- ing service employees as applicants. He claimed that after signing the February 16 agreement to acquire Glantz' interest as general partner, when he "was not aware whether there was a union or no union," he decid- ed to start with a clean slate "By discharging all the exist- ing employees" (emphasis added). He claimed that the 10 DECISIONS OF NATIONAL LABOR RELATIONS BOARD decision "was just based upon all the existing documenta- tion that was presented to me with all the litigation papers," which showed that "the problems of the build- ing were numerous." (Tr. 474-476.) I find that this de- fense was wholly fabricated. As found above, a document filed on Najjar's behalf (the January 13 opposition to the appointment of a trust- ee) represented to the bankruptcy court that under the new management (with the same building service em- ployees), the current operation of the building was "more than satisfactory for all concerned," including the tenants. Furthermore, Najjar's claim that he had decided in February to discharge the employees is belied by his retention of all three of them when the Company initial- ly began managing the property on April 1. Najjar had signed and filed the March 23 reorganization plan, but had taken no action to discharge or replace the employ- ees. Moreover, even if Najjar had decided to discharge the three employees after signing the February 16 agreement with Glantz, it appears clear that he was aware that they were covered by the Union's collective-bargaining agree- ment, requiring the payment of health and pension bene- fits. The Debtor's November 26-December 31, 1982 op- erating statement, which was filed February 7, listed "Union Health & Pension Funds" as an accrued expense. Although Najjar denied specifically seeing this document before purchasing the building (Tr. 473), he did not deny seeing the Debtor's February 8 "Schedules and State- ment of Affairs," which was mentioned in paragraph 6 of his February 16 agreement with Glantz. That document lists, under a schedule of priority creditors, unpaid con- tributions to the building service employees' union pen- sion and health funds. (The Debtor's reorganization plan, which Najjar signed and filed March 23, provided that these class 2 claims would be paid in full .) I discredit Najjar's claim that he was not then aware of a union in the building. (From his demeanor on the stand, Najjar appeared willing to give whatever testimony would help the Company's cause.) President Najjar's credibility was further impugned when he changed his testimony on cross -examination. Although he claimed on direct examination that he de- cided in February to start with a clean slate "By dis- charging all the existing employees," (Tr. 474), he denied on cross-examination ever making a decision to discharge the building service employees-apparently after being reminded of this defense in a company counsel objection. (In its answer the Company had denied paragraph 20 of the complaint, which alleged that about April 29 it "dis- charged its employees Jose Rivera, Fernando Melendez and Jorge Melendez." As quoted above, the Company's April 29 letter to the employees stated that the operation and management of the building "is no longer being con- ducted by E. Osborne Smith, Inc. the company which previously engaged your services and therefore your em- ployment is terminated as of this time.") The following occurred on cross-examination: Q. When did you make your decision to dis- charge the discriminatees? A. Mr. Spivak: Objection. Our position is he didn't hire them and he never discharged them. . . . [Tr. 507-508.] Q. Now when did you make the decision that you were going to bring in your own people and discharge the people who were working there under E. Osborne Smith? A. . . . I did not make a decision to discharge somebody whom I never hired to begin with. [Tr. 515.] President Najjar also gave conflicting testimony about when he first learned about a union in the building. After denying on direct examination that he was aware of a union when he decided in February to discharge all the existing employees, he testified he learned before April 29 that there was a union in the building when he visited the building and talked to the managing agent's repre- sentative. (Tr. 476.) But on cross-examination, after deny- ing that he made a decision to discharge the employees (Tr. 515) and claiming, "I decided to get rid of Fernando Melendez [and the other two employees] on April 29th," he testified as follows: Q. When did you first find out that Local 32B, the Union represented these three individuals? A. I think it was after April 29th. [Tr. 518, em- phasis added.] Then when asked if he received the information from the previous managing agent, he first positively denied it, but changed his testimony: Q. Had any E. Osborne Smith agent told you that this Union represented anybody at that build- ing? A. No. I believe that I mentioned that and they mentioned it to me. [Tr. 519, emphasis added.] Thus Najjar corrected his testimony and again admitted that he had talked with the prior managing agent about a union being in the building when he visited the build- ing-presumably before the Company withdrew and the other managing agent temporarily resumed the manage- ment of the building on April 11. The Company does not deny company knowledge of the union representation on April 11 and 12, when it advertised for a new building superintendent. The Company also took shifting positions regarding Superintendent Hebert's status as a supervisor. The Com- pany admitted in its July 3, 1983 answer (G.C. Exh. lE) that Hebert was a supervisor, and the company counsel reaffirmed the admission at the beginning of the trial on August 13, 1984 (Tr. 10). But when President Najjar was called as the Company's sole defense witness on October 1, he belittled Hebert's supervisory status-in apparent response to the credited testimony that Hebert told tenant Leon and other tenants that he was hiring Feder, told Leon that he would fire Feder "if he doesn't shapen up," told Leon that he was hiring two security guards, and offered Jorge Melendez a job as a nonunion porter after telling Melendez that he could not do anything for Melendez or his brother because "Management does not ELAL REALTY MANAGEMENT want any union people working here." Najjar claimed that Hebert had no authority to hire or fire anybody; that "No. Not really" did he have the authority to fire, warn, or send employees home early; and that if one of the employees wanted to leave work early or if there were a problem, Managing Agent Shohet would be con- tacted. (Tr. 485.) Although the April 11 and 12 newspa- per ad was for only a superintendent , Najjar claimed that he had interviewed and hired Supervisor Hebert and handyman Feder at the same time . (Tr. 481, 484.) (Again Najjar appeared on the stand to be willing to give what- ever testimony would help the Company's cause. I dis- credit his claim that he hired Feder and his denial that Hebert had the authority to and did hire employees.) In its brief the Company went further in shifting its position regarding Hebert's supervisory status . Ignoring the earlier admissions that Hebert was a supervisor, the Company contends that "there is absolutely no credible evidence that Hebert was any more than a director of work" and that "His functions were routine and did not require the exercise of independent judgment" (although elsewhere arguing that "Hebert directed the work of the porter/handyman and thus may well have been a minor supervisor"). The Company contends that the linchpin of the argument about Hebert's authority to hire nonunion employees is that Hebert hired Feder, and "This did not happen and is an impossibility on the record." It con- tends that the April 29 letter to the tenants, announcing the employment of Hebert and Feder, shows that Najjar and Managing Agent Shohet had already hired Feder. That letter does show that Hebert and Feder were al- ready hired, as does their arrival in the building that day, but it does not show who had hired them-whether Najjar had hired Feder when Hebert applied in response to an ad for a superintendent (as Najjar claimed in his discredited testimony) or whether Najjar had authorized Hebert to locate and hire a handyman. Tenant Leon first saw Feder in the building on April 29 when Feder ar- rived with Hebert, but he remembered that Feder did not start working at once. Although Leon was evidently in error in recalling that it was a few weeks rather than days before Feder returned to work, he credibly testified that Hebert told him and a number of tenants that he was hiring Feder. (Tr. 52-53, 60-63.) F. Other Defenses Despite President Najjar's admission to the contrary on the last day of the trial, the Company maintains in its brief the contention that it treated the three building service employees "as applicants for employment." Yet, also in its brief, the Company adopts as its position Naj- jar's inconsistent testimony that about February 16 he decided to discharge the three employees. As justifica- tion for the purported discharge decision in February, the Company goes outside the record and asserts in its brief that "There was chaos and confusion in the Build- ing" and "The tenants alleged that the Building was in shambles, that it was not clean, and that repairs were not made"-citing unproved arguments made by its counsel in his opening statement . (Tr. 29.) The Company further contends in its brief that it made no attempt to conceal its hiring of replacements , because 11 it ran a newspaper ad on April 11 and 12 (after tempo- rarily returning the management of the building to the former managing agent) for applicants to run the build- ing. I note, however, that the ad was placed for only a building superintendent and that although the ad was placed in a daily paper, it did not reveal the location of the apartment house. I also note that the brief inadvert- ently misstates the record, asserting that the replacement superintendent "was a general contractor," although Najjar testified that Hebert told him that "his father is a General Contractor" (Tr. 482). The brief does not con- tend that the replacements were better qualified than the terminated employees, and it ignores the undisputed testi- mony that Feder was not a well-rounded, qualified handyman and that Superintendent Hebert had stated that he would fire Feder "if he doesn't shapen up " The Company admitted in its July 3, 1983 answer that Superintendent Hebert was an agent of the Company as well as a supervisor, but the company counsel withdrew the admission of agency at the beginning of the trial after stating that he did not know if Hebert and Managing Agent Shohet were agents (Tr. 9-10). President Najjar denied at the trial that he ever authorized Hebert to speak on behalf of management (Tr. 486) and the Com- pany contends in its brief that the evidence failed to es- tablish that Hebert had actual or apparent authority to speak for it. Other than the antiunion statements that Hebert made to terminated employee Jorge Melendez (overheard in part by tenant Leon), the Company com- pletely ignores the credited evidence that Hebert was the Company's spokesman in the building and belatedly con- tends that "His functions were routine and did not re- quire the exercise of independent judgment" (effectively denying that he was even a supervisor). The Company also contends that "Assuming arguendo that Hebert did, in fact, make the alleged statements , he was merely ex- pressing his own personal opinion." The Company makes no effort to explain the undisputed, credited testimony that Hebert offered to rehire Jorge Melendez as a non- union porter. (Undoubtedly Hebert had been given the authority to hire-unless, of course, the Company direct- ed Hebert to offer to rehire the porter on that basis.) Having concluded from his demeanor on the stand that Najjar was a most untrustworthy witness, I discredit his denial that Hebert was the Company's authorized spokes- man in the building as well as his denial that Hebert had the authority to hire. After weighing all the evidence I find that Superintendent Hebert was speaking on behalf of management when informing Melendez that he and his brother could not be rehired because " Management does not want any union people working here" and when later offering to rehire Jorge Melendez if he would work as a nonunion porter. Finally, after arguing in effect that the new building superintendent was not even a supervisor, the Company contends in a footnote to its brief, without citing any evi- dence, that even if Hebert's antiunion comments were binding on the Company (and if building superintendent Rivera is found to have been discriminatorily dis- charged), "Rivera, whose prior supervisory status cannot be seriously doubted, could not be reinstated to a super- 12 DECISIONS OF NATIONAL LABOR RELATIONS BOARD visory position as a remedy." To the contrary the oppo- site is true; Hebert was a supervisor but Rivera was not. The Company authorized Hebert to hire after deciding to replace not only Rivera but also the handyman and porter. On the other hand, the evidence is clear that Rivera was merely a nonsupervisory leadman both on April 1 when the Company first managed the building and on April 29 when the Company terminated the em- ployees (Tr. 109). If the Company on April 29 had re- tained the three employees as it had done on April 1, there would have been no occasion to assign Rivera au- thority to hire new employees to replace the experienced handyman and porter, who were giving satisfactory serv- ice. Therefore, Rivera was not a supervisor when he was discharged, and any reinstatement would be to the same nonsupervisory position. G. Concluding Findings 1. Discriminatory motivation On January 13, after President Najjar decided to ac- quire the apartment house through the bankruptcy pro- ceeding, a document filed on his behalf in the bankrupt- cy court acknowledged the satisfactory service being performed by the three building service employees. On April 1, 9 days after Najjar filed a reorganization plan, the Company began managing the building , retaining all three of the employees as its own employees. It neither criticized their work nor informed them that they should submit applications for continued employment . On April 11 it temporarily relinquished the management of the building until appropriate documents were filed for bank- ruptcy court approval of the Company' s serving as the general partner of the Debtor and as the new managing agent of the building under the reorganization plan. The Company then adopted a secret hiring procedure to re- place the known union employees with nonunion person- nel. It placed a newspaper ad for a building superintend- ent, without revealing the location of the apartment house. Meanwhile on April 26, several days before the Company resumed the management of the building, its managing agent Shohet returned to the building and in- structed porter Jorge Melendez (with the assistance of handyman Fernando Melendez) to perform the task of moving a stock of paint from one location in the building to another. After the work was finished, Shohet compli- mented porter Melendez for his good work. On April 29 the Company resumed the management of the building as the court-approved general partner of Forest Hills Associates (the debtor-in- possession). Man- aging Agent Shohet again went to the building , assigned Superintendent Rivera the task of posting and distribut- ing notices to the tenants, and then summarily discharged Rivera and the two other union employees before intro- ducing their nonunion replacements . As a replacement for Rivera (who had been the building superintendent since 1971), President Najjar had hired Superintendent Hebert who, in turn, had hired a less-qualified handyman Feder and who began assigning his own wife to work part time as a porter until a full-time porter could be hired. The Company's discriminatory motivation in replacing the union employees was confirmed shortly afterward by Superintendent Hebert , the Company's spokesman in the building. One of the tenants overheard Hebert telling the discharged porter Jorge Melendez that Hebert could not rehire him and his brother Fernando because "Manage- ment does not want any union people working here." The next day Hebert offered the porter job to Jorge Me- lendez if he would return as a nonunion employee. After Melendez refused to work nonunion , the Company failed to hire either a full-time qualified handyman or a full- time porter, and the condition of the building and the services to the tenants greatly deteriorated. The complaint alleges that after initially employing the three building service employees in the same business op- erations, the Company discriminatorily discharged them on April 29, and later refused to rehire Jorge and Fer- nando Melendez because of their union membership and protected concerted activities. I fmd it clear that the General Counsel has made a prima facie showing suffi- cient to support the inference that the employees' union membership was a motivating factor in the Company's decision to discharge them . Wright Line, 251 NLRB 1083, 1089 (1980), enfd. 662 F.2d 899 (1st Cir. 1981), cert. denied 455 U.S. 989 (1982), approved by the Su- preme Court in NLRB v. Transportation Management Corp., 462 U.S. 393 (1983). In its defense, the Company has taken shifting, con- flicting positions. One of its defenses is that on April 29 (when it admittedly knew about the Union ), it terminated the three employees pursuant to a bona fide business de- cision and that the discharge decision was made in Feb- ruary, before the Company learned from the previous managing agent about the Union. Another defense is that it never decided to discharge them and never discharged them, having never hired them to begin with , and that it treated them as applicants for employment. Both these conflicting defenses were obviously fabricated. As found concerning the first defense, (a) the Compa- ny did have knowledge of the Union in February, (b) contrary to the unproved argument in the Company's opening statement that there was "chaos and confusion" in the building at the time, a document filed on President Najjar's behalf acknowledged the employees' satisfactory service, and (c) the Company's retention of the employ- ees when it first managed the building in early April belies Najjar's claim that he had already decided to dis- charge them. I find that the Company did not decide to discharge the employees until about April 11, when it began advertising for a building superintendent at an un- disclosed location. The Company does not deny knowl- edge of the employees' union membership at that time. Concerning the second defense that it treated the three employees as applicants and that it did not discharge or decide to discharge them because it never hired them, the opposite is true. The wording of the July 29 dis- charge letter ("your employment is terminated as of this time") belies the contention that the Company did not discharge them or decide to discharge them. The Com- pany had hired them April 1 when it retained them in its employ several days, before temporarily relinquishing the ELAL REALTY MANAGEMENT management of the building to the prior managing agent. It continued to treat them as its own employees on April 26, when it directed the work of the porter and handy- man, and on April 29 when it instructed the superintend- ent to post and distribute letters to the tenants before handing out the discharge letters, terminating them. It is clear that in the meantime, the Company had decided to discharge them and did not treat them as applicants. Contrary to the contention in its brief that it made no at- tempt to conceal its hiring of employees from them, the Company secretly replaced and summarily discharged them before making any mention of filing an application. Moreover, it is undisputed that replacement handyman Feder was less qualified than Fernando Melendez, that the Company had stated approval of porter Jorge Melen- dez' work, and that the replacement of the experienced employees resulted in a great deterioration in the condi- tion of the building and the services to the tenants. Thus I find (1) that the Company had no bona fide, nondiscriminatory reason for discharging the three union employees, (2) that after retaining them in its employ for several days in early April, it decided to discharge them and replace them with nonunion personnel, and (3) that it adopted a secret hiring procedure to conceal from them its plans and to prevent them from applying for continued employment. Then at the trial, President Najjar (the Company's sole witness) advanced false rea- sons for the Company's actions. It is well established that "normally, when an employer advances a false reason for its actions, it is permissible to infer that the actions are taken for an unlawful reason." Love's Barbeque Restau- rant, 245 NLRB 78, 79 (1979). Under the cirumstances I find that Najjar's untruthful testimony gives rise to the inference that he was attempting to mask his union animus as the real reason for his failure to retain the three experienced union employees. As discussed above under "Other Defenses," the Com- pany contends that Superintendent Hebert would have been merely expressing his personal opinion, without au- thority to speak on its behalf, if he made the "alleged statements" (such as the statement that he could not rehire the Melendez brothers because "Management does not want any union people working here"). As noted, however, the Company makes no effort to explain the undisputed, credited testimony that Hebert also offered to rehire Jorge Melendez as a nonunion porter. I find that either Hebert had been given the authority to hire, or the Company specifically directed him to offer Jorge Melendez reemployment on that basis. In either event, Hebert was speaking on behalf of management. After weighing all the evidence, I find that the Com- pany has failed to rebut the General Counsel's prima facie case by carrying its burden to demonstrate that it would have replaced the union employees even in the absence of their union affiliation. I therefore find that the Company was discriminatorily motivated when it gave the three union employees the April 29 termination no- tices and refused to retain or rehire them because of their union membership, violating Section 8(a)(3) and (1) of the Act. 13 2. Refusal to bargain On March 17 the Debtor, through the previous man- aging agent, renewed recognition of the Union by sign- ing and mailing to the Union a copy of the collective- bargaining agreement covering the three union employ- ees in an appropriate unit of all service employees em- ployed in the building, excluding supervisors. On April 1, when the Company first assumed the management of the building as the managing agent, it retained the three employees without changing their terms or conditions of employment. By April 11, when it temporarily relin- quished the management of the building, the Company had decided-because of union animus as found-to re- place the employees with nonunion personnel while con- cealing from the union employees its secret hiring proce- dure. On April 29 the Company became the court-approved general partner of the Debtor (the limited partnership, Forest Hills Associates) as well as the court-approved managing agent under the reorganization plan in the bankruptcy court. Although the complaint alleges that the Company owns and operates the building, the Gener- al Counsel admitted lack of knowledge at the trial whether title had passed because of pending creditors' claims. I find, however, that even if the Company and the related Realty Corporation had not acquired clear title to the property, the Company on April 29 acquired effectual control and resumed the management of the building. The General Counsel argues that the Company, con- tinuing the same business and using the same facilities, was a successor employer and was obligated to bargain with the Union even though it discriminatorily dis- charged the entire bargaining unit and replaced the union employees with nonunion personnel. She argues that but for the Company's illegal conduct, the Union would have maintained its majority status, and that the Compa- ny should not be permitted to rely on its own wrongdo- ing to avoid its legal responsibility to recognize and bar- gain with the Union concerning the unit employees. The Company argues that "new employer is free not to hire any of the predecessor's employees if it so de- sires" and that this "unfettered right to hire is limited solely by the principle that it is an unfair labor practice under Section 8(a)(3) of the NLRB for an employer to discriminate in hiring or retention of employees on the basis of union membership or activity." I agree. But, as found above, I do not agree that the Company's deci- sions concerning the employees it would hire were bona fide and nondiscriminatory. Neither do I agree that even if the Company's actions violated the Act, a bargaining order would not be appropriate. As held in Howard Johnson Co. v. Hotel & Restaurant Employees, 417 U.S. 249, 262 fn. 8 (1974), an employer has the right not to hire any of the former employees, if it so desires, but Of course, it is an unfair labor practice for an em- ployer to discriminate in hiring or retention of em- ployees on the basis of union membership or activi- ty under Section 8(a)(3) of the NLRA. Thus, a new 14 DECISIONS OF NATIONAL LABOR RELATIONS BOARD owner could not refuse to hire the employees of his predecessor solely because they were union mem- bers or to avoid having to recognize the union. The Court cited K B. J. Young's Super Markets v. NLRB, 377 F.2d 463, 465 (9th Cir. 1967), cert. denied 389 U.S. 841 (1967), which held: Where, as here, the old employees have been wrongfully discharged, their reinstatement is an ap- propriate remedy for the unfair labor practice. With such reinstatement ordered, continuity in the identi- ty of the work force may be presumed to follow and an order to recognize and bargain with the union as representative of the present work force is appropriate. The finding of successorship and the issuance of a bar- gaining order were also approved in NLRB v. Foodway of El Paso, 496 F.2d 117, 120 (5th Cir. 1974), in which the court found that Foodway refused to hire the prede- cessor's employees "because of their membership in the Union . . . to avoid the obligations of a successor em- ployer." The court held: It is manifest that but for Foodway's discriminatory refusal to offer employment to Allied's unit employ- ees, the Union would have continued to enjoy a ma- jority representative status. We decline to permit an employer to rely upon its own wrongdoing and thus avoid its legal responsibilities. A bargaining order was also held appropriate in NLRB v. Hudson River Aggregates, 639 F.2d 865, 871 (2d Cir. 1981), enfg. 246 NLRB 192 (1979): As for the five former Martin Marietta drivers, assured of jobs with HRA but then allegedly dis- criminated against because of their membership in Teamsters Local 445, we uphold the Board's finding of violations of sections 8(a)(1) and (3) [citing Howard Johnson and NLRB v. Bausch & Lomb, 526 F.2d 817, 821-822 (2d Cir. 1975)] as supported by substantial evidence in the record. Had these five drivers been on the job . . . Teamsters Local 445 would have represented a majority of the employ- ees in the unit . . . and therefore HRA also violated sections 8(a)(1) and (5) . . . by refusing to recognize and bargain with Teamsters Local 445. The Board has recently held that "An employer which takes over a business is a `successor' if there is continuity in the employing industry after the change of owner- ship," and that the "key factor in making a successorship determination is whether a majority of the new employ- er's bargaining unit employees were members of the predecessor's unit work force." Airport Bus Service, 273 NLRB 561 at 562 (1984). Here the Company continued the same business in the same building, and it would have continued to employ the same three building serv- ice employees in their same jobs-as it initially did in early April when it first managed the building-except for its decision about April 11, because of union animus, to discriminatorily discharge all the union members and replace them with nonunion personnel. Under these circumstances I find that the Company was a successor employer of the building service em- ployees in the appropriate bargaining unit and that it un- lawfully refused to bargain in violation of Section 8(a)(5) and (1) when it received the Union's bargaining request on May 18 and failed to respond. CONCLUSIONS OF LAW 1. By discharging Fernando Melendez , Jorge Melen- dez, and Jose Rivera April 2, 1983, and by refusing to rehire Fernando and Jorge Melendez because of their union membership, the Company engaged in unfair labor practices affecting commerce within the meaning of Sec- tion 8(a)(3) and (1) and Section 2(6) and (7) of the Act. 2. By refusing to bargain with the Union on and after May 18, 1983, the Company violated Section 8(a)(5) and (1). REMEDY Having found that the Respondent has engaged in cer- tain unfair labor practices, I find it necessary to order it to cease and desist and to take certain affirmative action designed to effectuate the policies of the Act. The Respondent, having discriminatorily discharged three employees, must offer them reinstatement and make them whole for any loss of earnings and other ben- efits, computed on a quarterly basis from date of dis- charge to date of proper offer of reinstatement, less any net interim earnings, as prescribed in F. W. Woolworth Co., 90 NLRB 289 (1950), plus interest as computed in Florida Steel Corp., 231 NLRB 651 (1977). On these findings of fact and conclusions of law and on the entire record, I issue the following recommend- ed3 ORDER The Respondent, Elal Realty Management Inc., Queens, New York, its officers, agents, successors, and assigns, shall 1. Cease and desist from (a) Discharging or otherwise discriminating against any employee for being a member of Local 32B-32J, Service Employees International Union, AFL-CIO or any other union. (b) 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) On request, bargain with the Union as the exclusive representative of the employees in the following appro- priate unit concerning terms and conditions of employ- 3 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 ELAL REALTY MANAGEMENT ment and, if an understanding is reached, embody the un- derstanding in a signed agreement: All service employees employed by Elal Realty Management Inc. at its Forest Hills, New York apartment house, excluding supervisors as defined in the Act. (b) Offer Fernando Melanez, Jorge Melanez, and Jose Rivera immediate and full reinstatement to their former jobs or, if those jobs no longer exist, to substantially equivalent positions, without prejudice to their seniority or any other rights or privileges previously enjoyed, and make them whole for any loss of earnings and other ben- efits suffered as a result of the discrimination against them, in the manner set forth in the remedy section of the decision. (c) Remove from its files any reference to the unlawful discharges and notify the employees in writing that this has been done and that the discharges will not be used against them in any way. (d) Preserve and, on request, make available to the Board or its agents for examination and copying , all pay- roll records, social security payment records, timecards, personnel records and reports, and all other records nec- essary to analyze the amount of backpay due under the terms of this Order. (e) Post at Forest Hills apartment house in Queens, New York, copies of the attached notice marked "Ap- pendix."4 Copies of the notice, on forms provided by the Regional Director for Region 29, after being signed by the Respondent's authorized representative , shall be posted by the Respondent immediately upon receipt and maintained for 60 consecutive days in conspicuous places including all places where notices to employees are cus- tomarily posted. Reasonable steps shall be taken by the Respondent to ensure that the notices are not altered, de- faced, or covered by any other material. 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 " 15 (f) 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 The National Labor Relations Board has found that we violated the National Labor Relations Act and has or- dered us to post and abide by this notice. WE WILL NOT discharge or otherwise discriminate against any of you for being a member of Local 32B- 32J, Service Employees International Union, AFL-CIO or any other 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, on request, bargain with the Union and put in writing and sign any agreement reached on terms and conditions of employment for our employees in the bar- gaining unit: All service employees employed by Elal Realty Management Inc. at its Forest Hills, New York apartment house, excluding supervisors as defined in the Act. WE WILL offer Fernando Melendez , Jorge Melendez, and Jose Rivera immediate and full reinstatement to their former jobs or, if those jobs no longer exist , to substan- tially equivalent positions, without prejudice to their se- niority or any other rights or privileges previously en- joyed and WE WILL make them whole for any loss of earnings and other benefits resulting from their dis- charge, less any net interim earnings , plus interest. WE WILL notify each of them that we have removed from our files any reference to his discharge and that the discharge will not be used against him in any way. ELAL REALTY MANAGEMENT INC.