Rite Style Fashions

1134 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Michele Rena, and its alter ego, Rite Style Mer- chandising, Inc., t/a Rite Style Fashions and Local 130, International Ladies' Garment Workers Union, AFL-CIO. Case 22-CA- 11612 30 June 1986 DECISION AND ORDER By CHAIRMAN DOTSON AND MEMBERS BABSON AND STEPHENS Upon a charge filed on 6 May 1982, a first amended charge filed on 17 May 1982, by the Union, Local 130, International Ladies' Garment Workers Union, the General Counsel of the Na- tional Labor Relations Board issued a complaint against the Respondent Michele Rena, and its alter ego, Rite Style Merchandising, Inc., t/a Rite Style Fashions, alleging that it has violated Section 8(a)(5), (3), and (1) of the National Labor Relations Act. Although properly served copies of the charge and complaint, the Respondent has failed to file an answer to the complaint. It did inform the General Counsel that it had filed a bankruptcy peti- tion, which the Respondent claimed should auto- matically stay this unfair labor practice proceeding. On 22 December 1982 the General Counsel filed a Motion for Summary Judgment. On 6 January 1983 the Board issued an order transferring the proceeding to the Board and a Notice to Show Cause why the motion should not be granted. The Respondent filed no response. The allegations in the motion are therefore undisputed. The National Labor Relations Board has delegat- ed its authority in this proceeding to a three- member panel. Ruling on Motion for Summary Judgment Section 102.20 of the Board's Rules and Regula- tions provides that the allegations in the complaint shall be deemed admitted if an answer is not filed within 10 days from service of the complaint, unless good cause is shown. The complaint states that unless an answer is filed within 10 days of service, "all of the allegations in the complaint shall be deemed to be admitted to be true and shall be so found by the Board." Further, the undisputed allegations in the Motion for Summary Judgment disclose that the Respondent failed to file an answer despite a telephone call and letter from the General Counsel in addition to service of the com- plaint. The only response submitted by the Re- spondent in connection with the complaint took the form of a letter from the Respondent's attor- ney. This letter indicated that the Respondent had filed a Chapter 11 bankruptcy reorganization peti- tion on 30 August 1982, and that it was the Re- spondent's position that all actions pending against the debtor were stayed pursuant to 11 U.S.C. § 362. The letter concluded that the Respondent would consequently not be filing an answer to the complaint. The Respondent's financial condition does not constitute good cause for its failure to file a timely answer within the meaning of Section 102.20 of the Board's Rules and Regulations. Evans Express Co., 232 NLRB 655 (1977); Monroe Furniture Co., 231 NLRB 143 (1977). In addition, it is well established as a matter of law that Board unfair labor practice proceedings are exempt from the automatic stay provisions of Federal bankruptcy law. E.g., Phoe- nix Co., 274 NLRB 995 (1985). Consequently, we reject the Respondent's attempt to invoke its bank- ruptcy petition as a defense to its failure to file an answer to the complaint. In accord with the rule set forth above, and in the absence of a showing of good cause for failure to file a timely answer, the allegations of the com- plaint are deemed to be admitted and are so found by the Board, and the General Counsel's Motion for Summary Judgment is granted. On the entire record, the Board makes the fol- lowing FINDINGS OF FACT I. JURISDICTION Michele Rena and Rite Style are corporations duly organized under and existing by virtue of the laws of the State of New Jersey. At all material times until about 31 March 1982, Michele Rena maintained its principal place of business at 37 Wall Street, Red Bank, New Jersey, where it engaged in the business of manufacturing ladies' garments and related products and services. About 1 April 1982, Rite Style was established by Michele Rena as a subordinate instrument to and a disguised continuation of Michele Rena. At all material times since that date, the two corpora- tions have maintained a principal place of business at 30 Bridge Avenue, Red Bank, New Jersey, where they have engaged in the business of manu- facturing ladies' garments and related products and services. Michele Rena and Rite Style are, and have been at all times material here, affiliated busi- ness enterprises with common ownership and offi- cers, integrated operations, and common labor rela- tions policies and therefore constitute a single inte- grated business enterprise. We find that Michele Rena and Rite Style, hereafter referred to collec- tively as the Respondent, are a single employer for the purposes of the Act. 280 NLRB No. 72 RITE STYLE FASHIONS The Respondent has, during the 12 months pre- ceding issuance of the complaint, which period is representative of its operations at all times material here, performed services valued in excess of $50,000 for various enterprises located in States other than the State of New Jersey. In addition, the Respondent has, during the above period, per- formed services valued in excess of $50,000 for var- ious enterprises located within the State of New Jersey, each of which is directly engaged in inter- state commerce. We find that the Respondent is an employer en- gaged in commerce within the meaning of Section 2(6) and (7) of the Act. We further find that the Union is a labor organization within the meaning of Section 2(5) of the Act. H. THE UNFAIR LABOR PRACTICES A. The 8(a)(5) and (1) Violations The following employees of the Respondent con- stitute a unit appropriate for collective-bargaining purposes within the meaning of Section 9(b) of the Act: All employees employed by Respondent at its Wall Street and Bridge Avenue, Red Bank, New Jersey plants in the following crafts, in- cluding cutters, graders, and markers; sample- makers; examiners; factory floor workers; op- erators; machine pressers, finishers, and press- ers, but excluding all other employees, guards and supervisors as defined in the Act. The Respondent is, and at all material times has been, an employer-member of an employer' s asso- ciation named the American Cloak and Suit Manu- facturers Association, Inc. (the Association). The Respondent has delegated to the Association the authority to bargain collectively on its behalf with respect to the employees in the unit described above. At all times material here, the Union has been the designated exclusive collective-bargaining representative of the Respondent's employees in the unit described above. The Respondent has rec- ognized the Union as such until about 15 March 1982, and has embodied such recognition in succes- sive collective-bargaining agreements, the most recent of which was effective by its terms for the period 1 June 1979 through 31 May 1982. This last collective-bargaining agreement contained provi- sions requiring the Respondent to make contribu- tions on behalf of its employees to: the Health and Welfare Fund of Joint Board of Coat, Suit and Allied Garment Workers Union; the I.L.G.W.U. National Retirement Fund; and the I.L.G.W.U. Health Services Plan (the Benefit Funds). 1135 About January 1982 the Respondent, without notice to or agreement by the Union, unilaterally ceased making contractual contributions to the Benefit Funds. Further, about 15 March 1982, the Respondent withdrew recognition of the Union as the exclusive collective-bargaining representative of its unit employees. Since that date, the Respond- ent has repudiated the agreement and, acting through its agents, has bypassed the Union and dealt directly with its employees concerning rates of pay, hours of work, and other terms and condi- tions of employment. We find that the Respondent has violated Section 8(a)(5) and (1) of the Act by unilaterally ceasing contributions to the Benefit Funds, withdrawing recognition of the Union, re- pudiating the collective-bargaining agreement, and bypassing the Union in dealing directly with unit employees concerning rates of pay, hours, or other terms and conditions of employment. B. The 8(a)(3) and (1) Violations About 22 April 1982 the Respondent discharged its employee Rose Migliaccio. The Respondent en- gaged in the above-described conduct in order to discourage its employees from engaging in union and other concerted protected activities. We find that by this conduct the Respondent has discrimi- nated in regard to terms and conditions of employ- ment of its employees, thereby discouraging mem- bership in the Union, in violation of Section 8(a)(3) and (1) of the Act. C. The 8(a)(1) Violations About 16 March 1982 the Respondent's agent, Nicholas Allegretta,' instructed its employees not to engage in activities on behalf of the Union or to give assistance to the Union. About 22 April 1982 Allegretta threatened Bridge Avenue plant employ- ees with discharge if they engaged in activities on behalf of or gave any assistance or support to the Union. We find that by this conduct the Respond- ent has interfered with, restrained, and coerced em- ployees in the exercise of their Section 7 rights, in violation of Section 8(a)(1) of the Act. III. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of the Respondent, set forth in sec- tion II, above, occurring in connection with its op- erations described in section I, above, have a close, intimate, and substantial relationship to trade, traf- fic, and commerce among the several States and tend to lead to labor disputes burdening and ob- 1 Nicholas Allegretta is plant manager of Rite Style and president of Michele Rena 1136 DECISIONS OF NATIONAL LABOR RELATIONS BOARD structing commerce and the free flow of com- merce. CONCLUSIONS OF LAW 1. Michele Rena, and its alter ego, Rite Style Merchandising, Inc., t/a Rite Style Fashions is an employer engaged in commerce within the mean- ing of Section 2(6) and (7) of the Act. 2. Local 130, International Ladies' Garment Workers Union, AFL-CIO is a labor organization within the meaning of Section 2(5) of the Act. 3. All employees employed by the Respondent at its Wall Street and Bridge Avenue, Red Bank, New Jersey plants in the following crafts, includ- ing cutters, graders, and markers; samplemakers; examiners; factory floor workers; operators; ma- chine pressers, finishers, and pressers, but excluding all other employees, guards and supervisors as de- fined in the Act constitute a unit appropriate for the purposes of collective-bargaining within the meaning of Section 9(b) of the Act. 4. At all times material here, the Union has been and now is the exclusive representative of all em- ployees in the aforesaid unit for the purposes of collective bargaining within the meaning of Section 9(a) of the Act. 5. By unilaterally ceasing contractually required payments to employee benefit funds, by withdraw- ing recognition of the Union, by repudiating a col- lective-bargaining agreement during its term, and by bypassing the Union in dealing directly with employees in the bargaining unit represented by the Union, the Respondent has engaged in unfair labor practices within the meaning of Section 8(a)(5) of the Act. 6. By discriminatorily discharging employee Rose Migliaccio to discourage employees from en- gaging in union and other protected concerted ac- tivities, the Respondent has violated Section 8(a)(3) of the Act. 7. By the acts described in section II, A, B, and C above, the Respondent has interfered with, re- strained, and coerced employees in the exercise of the rights guaranteed in Section 7 of the Act, and thereby has engaged in unfair labor practices within the meaning of Section 8(a)(1) of the Act. 8. The aforesaid unfair labor practices are unfair labor practices affecting commerce within the meaning of Section 2(6) and (7) of the Act. REMEDY Having found that the Respondent has engaged in and is engaging in unfair labor practices within the meaning of Section 8(a)(5), (3), and (1) of the Act, we shall order that it cease and desist and take certain affirmative action designed to effectuate the policies of the Act. Such affirmative action shall include ordering the Respondent, on request, to meet and bargain with the Union as the exclusive representative of its employees. The Respondent shall also be re- quired to offer Rose Migliaccio reinstatement to the position she held prior to her unlawful termina- tion or, if such position no longer exists, to a sub- stantially equivalent position, without prejudice to her seniority or other rights and privileges. We shall also order the Respondent to make Rose Mig- liaccio whole for any loss of earnings she may have suffered because of the discrimination against her, to be computed in accordance with the formula ap- proved in F. W. Woolworth Co., 90 NLRB 289 (1950), with interest to be computed in the manner prescribed in Florida Steel Corp., 231 NLRB 651 (1977). Additionally, we shall order the Respond- ent to restore the status quo ante by paying to the Benefit Funds any moneys unlawfully withheld from about January until 30 August 1982,2 the date of the filing of the bankruptcy petition, and to make its employees whole, plus interest, as comput- ed in Ogle Protection Service, 183 NLRB 682 (1970), for losses suffered on and after 15 March until 30 August 1982 by virtue of the Respondent's repudi- ation of the contract and its direct dealing with employees concerning wages, hours, and other conditions of employment.3 ORDER The National Labor Relations Board orders that the Respondent, Michele Rena, and its alter ego, Rite Style Merchandising, Inc., t/a Rite Style Fashions, Red Bank, New Jersey, its officers, agents, successors, and assigns, shall 1. Cease and desist from (a) Refusing to bargain collectively concerning rates of pay, wages, hours, and other terms and conditions of employment with Local 130, Interna- 2 Because the provisions of employee benefit fund agreements are van- able and complex, the Board does not provide for interest at a fixed rate in the adjudicatory stage of proceedings We leave to compliance pro- ceedings the question of how much interest the Respondent must pay into the Benefit Funds in order to satisfy our "make-whole" remedy See Merryweather Optical Co, 240 NLRB 1213, 1216 fn 7 (1979) s The Respondent normally would be obligated to comply with the terms and conditions of employment specified in the collective-barganung agreement even after its 31 May 1982 expiration . Under NLRB v Bildisco & Bildisco, 465 U S. 513 (1984), however, the Respondent would not have violated Sec. 8(a)(5) and (1) of the Act by ceasing to observe ex- pired contract terms after the filing of a bankruptcy petition. Goldstein Co, 274 NLRB 682, 684 7 fn. 5 (1985) As this case arose and the Re- spondent filed its petition in 1982, the Bildisco holding is controlling, rather than the Bankruptcy Amendments and Federal Judgeship Act of 1984, Pub. L 98-353, 98 Stat 333 (1984) Consequently , we have limited the Respondent's make-whole liability for its 8(a)(5) violations to the pre- petition period Its backpay liability for the unlawful discharge of Rose Migliaccio continues without limitation after the filing of the petition. RITE STYLE FASHIONS tional Ladies' Garment Workers Union, AFL-CIO, as the exclusive bargaining representative of its em- ployees in the following appropriate unit: All employees employed by Respondent at its Wall Street and Bridge Avenue, Red Bank, New Jersey plants in the following crafts, in- cluding cutters, graders, and markers; sample- makers; examiners; factory floor workers; op- erators; machine pressers, finishers, and press- ers, but excluding all other employees, guards and supervisors as defined in the Act. (b) Refusing to bargain collectively with the Union by unilaterally failing and refusing to make required benefit fund payments on behalf of its unit employees to: the Health and Welfare Fund of Joint Board of Coat, Suit and Allied Garment Workers Union; the I.L.G.W.U. National Retire- ment Fund; and the I.L.G.W.U. Health Services Plan. (c) Refusing to bargain collectively with the Union by repudiating its collective-bargaining agreement with that labor organization, and by by- passing the Union and dealing directly with unit employees about rates of pay, wages, hours, and other terms and conditions of employment. (d) Discharging employees because of their membership in, support of, or activities on behalf of the above-named labor organization, or any other labor organization. (e) Instructing employees not to engage in union or protected concerted activities and threatening to discharge employees who engage in union or other protected concerted activities. (f) In any like or related manner interfering with, restraining, or coercing employees in the exercise of the rights guaranteed them by Section 7 of the Act. 2. Take the following affirmative action neces- sary to effectuate the policies of the Act. (a) On request, bargain with the above-named labor organization as the exclusive representative of all employees in the aforesaid appropriate unit with respect to rates of pay, wages, hours, and other terms and conditions of employment and, if an understanding is reached, embody such under- standing in a signed agreement. (b) Make whole the unit employees' Benefit Funds for any contributions that were due but un- lawfully withheld in and after January to 30 August 1982 and, if applicable, make whole any of its employees for any loss of benefits or expendi- tures incurred by them by reason of any discontin- ued payment to such funds during this period. (c) Make employees whole for losses suffered from on and after 15 March 1982 by virtue of the 1137 Respondent's repudiation of the contract and direct dealing with employees. (d) Offer Rose Migliaccio immediate and full re- instatement to her former job or, if that job no longer exists, to a substantially equivalent position, without prejudice to her seniority or any other rights or privileges previously enjoyed, and make her whole for any loss of earnings and other bene- fits suffered as a result of the discrimination against her, in the manner set forth in the remedy section of the decision. (e) Remove any reference in its personnel records to the unlawful discriminatory discharge of Rose Migliaccio and notify her in writing that this has been done and that evidence of such unlawful discipline will not be used against her in future per- sonnel actions. (f) Preserve and, on request, make available to the Board or its agents for examination and copy- ing all payroll records, social security payment records, timecards, personnel records and reports, and all other records necessary to analyze the amount of backpay and restoration to the Benefit Funds due under the terms of this Order. (g) Post at its in Wall Street and Bridge Avenue, Red Bank, New Jersey facilities copies of the at- tached notice marked "Appendix."4 Copies of the notice, on forms provided by the Regional Direc- tor for Region 22, after being signed by the Re- spondent's authorized representative, shall be posted by the Respondent immediately upon re- ceipt and maintained for 60 consecutive days in conspicuous places including all places where no- tices to employees are customarily posted. Reason- able steps shall be taken by the Respondent to ensure that the notices are not altered, defaced, or covered by any other material. (h) Notify the Regional Director in writing within 20 days from the date of this Order what steps the Respondent has taken to comply. 4 If this Order is enforced by a judgment of a United States court of appeals, the words in the notice reading "Posted by Order of the 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." 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 ordered us to post and abide by this notice. 1138 DECISIONS OF NATIONAL LABOR RELATIONS BOARD WE WILL NOT refuse to bargain collectively con- cerning rates of pay, wages, hours, and other terms and conditions of employment with Local 130, International Ladies' Garment Workers Union, AFL-CIO, as the exclusive representative of the employees in the following bargaining unit: All employees employed by us at our Wall Street and Bridge Avenue, Red Bank, New Jersey plants in the following crafts, including cutters, graders, and markers; samplemakers; examiners; factory floor workers; operators, machine pressers, finishers, and pressers, but excluding all other employees , guards and su- pervisors as defined in the Act. WE WILL NOT refuse to bargain collectively with the Union by unilaterally failing and refusing to make required benefit fund payments on behalf of our unit employees to: the Health and Welfare Fund of Joint Board of Coat, Suit and Allied Gar- ment Workers Union; the I.L.G.W.U. National Re- tirement Fund; and the I.L.G.W.U. Health Serv- ices Plan. WE WILL NOT refuse to bargain collectively with the Union by repudiating our collective-bargaining agreement with that labor organization and by by- passing the Union and dealing directly with our unit employees about rates of pay, wages, hours, and other terms and conditions of employment. WE WILL NOT discharge our employees because of their membership in, support of, or activities on behalf of the above-named labor organization or any other labor organization. WE WILL NOT instruct our employees not to engage in union or protected concerted activities and threaten to discharge employees who engage in union or protected concerted activities. WE WILL NOT in any like or related manner interfere with, restrain, or coerce our employees in the exercise of the rights guaranteed them by Sec- tion 7 of the Act. WE WILL, on request, bargain with the above- named Union, as the exclusive representative of all employees in the bargaining unit described above, with respect to rates of pay, wages, hours, and other terms and conditions of employment and, if an understanding is reached, embody such under- standing in a signed agreement. WE WILL make whole the unit employees' Bene- fit Funds for any contributions due but unlawfully withheld by us from about January to 30 August 1982 and, if applicable, make whole any of our em- ployees for any loss of benefits or expenditures in- curred by them by reason of any discontinued pay- ment to such funds during this period. WE WILL make employees whole for losses suf- fered from about 15 March to 30 August 1982 by virtue of our repudiation of the contract and direct dealing with employees. WE WILL offer Rose Migliaccio immediate and full reinstatement to her former job or, if that job no longer exists, to a substantially equivalent posi- tion, without prejudice to her seniority or any other rights or privileges previously enjoyed and WE WILL make her whole for any loss of earnings and other benefits resulting from her discharge, less any net interim earnings, plus interest. WE WILL remove any reference in our personnel records to the unlawful discriminatory discharge of Rose Migliaccio and we will notify her in writing that this has been done and that the evidence of such unlawful discipline will not be used against her in future personnel actions. MICHELE RENA, AND ITS ALTER EGO, RITE STYLE MERCHANDISING, INC., T/A RITE STYLE FASHIONS