Medical Towers Ltd.

MEDICAL TOWERS LTD. Medical Towers Limited and Service Employees International Union, Local 36, AFL-CIO. Case 4-CA-16068 23 September 1987 DECISION AND ORDER BY MEMBERS BABSON, STEPHENS, AND CRACRAFT On 26 May 1987 Administrative Law Judge Martin J. Linsky issued the attached decision. The Respondent filed exceptions, and the General Counsel filed an answering brief, cross-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 briefs and has decided to affirm the judge's rulings, findings, I and conclusions as modified2 and to adopt the recom- mended Order as modified.3 i In accordance with our decision in New Horizons for the Retarded, 283 NLRB 1173 (1987), interest on and after 1 January 1987 shall be computed at the "short-term Federal rate" for the underpayment of taxes as set out in the 1986 amendment to 26 U S.C § 6621 Interest on amounts accrued prior to 1 January 1987 (1he effective date of the 1986 amendment to 26 US C § 6621) shall be computed in accordance with Florida Steel Corp, 231 NLRB 651 (1977) The Respondent contends that the judge failed to address the signifi- cance of Union Attorney Browning's use in her 8 August 1986 letter to the Respondent of the term "tentative" in reference to the 27 June 1986 agreement. We find that the preponderance of the evidence establishes that the parties had reached final agreement at the 27 June 1986 negotia- tion session and the use of the word "tentative" in a letter demanding immediate execution, sent by the Union's attorney 6 weeks later, is insuf- ficidnt to negate the finding that a final and binding agreement had been reached 2 In his conclusions of taw the judge inadvertently failed to state that the Respondent violated Sec 8(d) of the Act as well as Sec 8(a)(5) and (l) by refusing to execute and honor a written agreement embodying the terms and conditions of employment agreed to with the Union 27 June 1986. The judge stated in fn 6 of his decision that it was unnecessary to reach the issue of whether the failure of the Respondent to communicate with the Union after 27 June 1986 was an unfair labor practice, but he added, "of course, it was " However, the complaint alleges that the Re- spondent violated Sec 8(a)(5) and (1) and Sec. 8(d) of the Act by failing to'respond since about 30 June 1986 to the Union's request that the Re- spondent execute a written contract embodying the agreement We find that the Respondent violated Sec 8(a)(5) and (I) and Sec 8(d) of the Act by this conduct Embossing Printers, 268 NLRB 710, 722 (1984), enfd, mem 742 F 2d 1456 (6th Cir 1984), Accordingly, we shall issue an amended Conclusions of Law to include these modifications s We amend the judge's recommended Order to provide that the com- putation of backpay due employees as a result of the Respondent's illegal refusal to sign and abide by the collective-bargaining agreement shall not be on a quarterly basis as provided in F W. Woolworth Co, 90 NLRB 280 (1950) Instead, backpay shall be computed as provided in Ogle Pro- tection Service, 183 NLRB 682 (1970), enfd 444 F.2d 502 (6th Cir 1971) (See also Pete O'Dell & Sons Steel, 277 NLRB 1348 fn. 1 (1985).) To cor- rect this and provide for other modifications, we shall amend the judge's recommended Order and shall issue a new notice. 1011 CONCLUSIONS OF LAW 1. The Respondent is an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act. 2. The Union is a labor organization within the meaning of Section 2(5) of the Act. 3. By refusing to execute and honor a written agreement embodying terms and conditions of em- ployment agreed to with the Union on 27 June 1986, the Respondent violated Section 8(a)(5) and (1) and Section 8(d) of the Act. 4. By failing to respond since about 30 June 1986 to the Union's request that the Respondent execute a written contract embodying terms and conditions of employment agreed to with the Union on 27 June 1986, the Respondent violated Section 8(a)(5) and (1) and Section 8(d) of the Act. 5. The foregoing unfair labor practices affect commerce within the meaning of Section 2(6) and (7) of the Act. ORDER The National Labor Relations Board adopts the recommended Order of the administrative law judge as _ modified below and orders that the Re- spondent, Medical Towers Limited,-Philadelphia, Pennsylvania, its officers, agents, successors, and assigns, shall take the action set forth in the Order as modified. 1. Insert the following as paragraph 1(b) and re- letter the subsequent paragraph. "(b) Failing to respond since about 30 June 1986 to the Union's request that the Respondent execute the written contract embodying the agreement reached by the Respondent and the Union on 27 June 1986." 2. Substitute the following for paragraph 2(b). "(b) Upon execution of the aforesaid agreement give retroactive effect to the provisions thereof and make whole the employees, with interest, for any losses they may have suffered by reason of the Re- spondent's failure to sign and effectuate all terms of the agreement. Backpay shall be computed in the manner prescribed in Ogle Protection Service, 183 NLRB 682 (1970), enfd. 444 F.2d 502 (6th Cir. 1971), with interest to be computed in the manner prescribed in New Horizons for the Retarded, 283 NLRB 1173 (1987)." 3. Substitute the attached notice for that of the administrative law judge. 285 NLRB No. 123 1012 DECISIONS 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. WE WILL NOT fail or refuse to execute a collec- tive-bargaining agreement agreed to between us and Service Employees International Union, Local 36, AFL-CIO. WE WILL NOT fail or refuse to respond to the 'Union's request that we execute a written contract embodying the terms and conditions of employ- ment agreed to between us and the Union on 2;7 June 1986. WE WILL NOT in any like or related manner interfere with, restrain, or coerce you in the exer- cise of the rights guaranteed you by Section 7 of the Act. WE WILL execute the contract agreed to be- tween us and the Union on 27 June 1986. WE WILL give retroactive effect, to 27 June 1986, to the'terms and conditions of employment of the contract and WE WILL make our employees whole for any losses they may have suffered by reason of our failure to execute the above contract, with interest. On the entire record in this case, to include posthear- ing briefs submitted by the General Counsel and Re- spondent, i and on my observation of the demeanor of the witnesses, I make the following FINDINGS OF FACT 1. JURISDICTION Medical Towers Limited is, and has been at all times material, a Pennsylvania limited partnership comprised,of a general partner, Hewlett Realty Corp., a Pennsylvania corporation, and two limited partners, Hewlett Realty Corp. and Sovereign Equities, Inc., also a Pennsylvania corporation. Respondent is, and has been at all times ma- terial, engaged in the ownership and operation of an office building located at 255 S. 17th Street, Philadel- phia, Pennsylyania, known as the Medical Towers Build- ing. Respondent's main office is located at 1601 Walnut Street, Philadelphia, Pennsylvania. During the past year, in the course and conduct of its business operations described above, Respondent re- ceived gross revenues in excess of $100,000 of which in excess of $25,000 was received from retail enterprises, whose annual gross sales exceed $500,000 and who annu- ally receive goods valued at more than $3000 from out- side the Comonwealth of Pennsylvania. I find and Respondent admits that it is now, and has been at all times material, an employer engaged in com- merce within the' meaning of Section 2(2), (6), and (7) of the Act. II. LABOR ORGANIZATION INVOLVED Respondent admits and I find that SEIU, Local 36, AFL-CIO is a labor organization within the meaning of Section 2(5) of the Act. MEDICAL TOWERS LIMITED David Faye, Esq., for the General Counsel. Kenneth S. Siegel, Esq., of Philadelphia, Pennsylvania, for the Respondent. Bruce Endy, Esq., of Philadelphia, Pennsylvania, for the Charging Party. DECISION STATEMENT OF THE CASE MARTIN J. LINSKY, Administrative Law Judge. On 4 September 1986 SEIU Local 36 (the Charging Party or the Union) filed a charge against Medical Towers Limit- ed (Respondent). On 31 October 1986 the National Labor Relations Board, by the Acting Regional Director for Region 4, issued a complaint alleging that Respondent violated Sections 8(a)(1) and (5) and 8(d) of the National Labor Relations Act (the Act), by failing to bargain in good faith with the Union and by refusing to execute a written collective-bargaining agreement it had reached with the Union. Respondent filed and answer in which it denied that it violated the Act in any way. A hearing was held in Philadelphia, Pennsylvania, on 25 February 1987. III. THE ALLEGED UNFAIR LABOR PRACTICES Respondent owns a building located at 255 S. 17th Street, Philadelphia, Pennsylvania, which is known as the Medical Towers Building. The Union, since at least 1974, has represented the cleaning and janitorial employ- ees who work in that building. For many years the Union has been a party to various collective-bargaining agreements covering the employees of the Medical Towers Building. The last such collec-, tive-bargaining agreement expired on 31 October 1984 and was between the Union and Building Operators Labor Relations, Inc. (BOLR), a multiemployer associa- tion. Respondent is no longer a member of BOLR and bar- gained separately beginning in January 1986 with the Union for a successor collective-bargaining agreement to cover the employees who are employed at the Medical Towers Building.2 1 The General Counsel's motion to strike Respondent's brief as untime- ly, is denied Respondent's counsel represents, and I believe him, that its brief was mailed on 1 April 1987, when it should have been mailed no later than 31 March 1987 to be timely filed It was untimely However, in the absence of any prejudice to any of the parties being shown or even alleged I exercise my discretion and deny the motion to strike 2 The charge indicates the unit consists of 15 employees, while testimo- ny at the hearing indicated only 6 employees are in the unit MEDICAL, TOWERS LTD. 1013 There were a total of five negotiating sessions. The dates of the negotiating sessions were 15 and 29 January, 3 and 6 February, and 27 June 1986, Representing the Union at all five sessions were Mar- garet Browning, an attorney, Brenda Brisbane, secretary- treasurer for the Union, and two employees who worked at the building, Doris Clark and Mildred Sanders. Browning, Brisbane, and Sanders all testified at the hear- ing as witnesses for the General Counsel. I was most im- pressed with their demeanor and found all three women to be highly credible witnesses based on demeanor and the inherent reasonableness and probability of their testi- mony. Representing Respondent at the first four negotiating sessions were Ross Van Denbergh , an attorney, and An- thony Orapallo, Respondent's director of operations. Only Orapallo represented Respondent at the fifth and last negotiating session. Orapallo testified at the hearing, but Van Denbergh did not. Based on demeanor, I credit the testimony of Orapallo only to the-extent that it is-not contradicted by the testimony of the witnesses for the General Counsel. Where there is conflict I credit the General Counsel's witnesses-Browning, Brisband, and Sanders and not Orapallo. At the first four negotiating sessions , Ross Van Den- bergh was the chief spokesperson for Respondent. Ora- pallo was the chief spokesperson for Respondent at the last session where he was alone. Margaret Browning was the chief spokesperson for the Union at all five negotiat- ing sessions. At the end of the fourth negotiating session on 6 ,Feb- ruary 1986, the only issue left unresolved was the issue of job classifications. Respondent wanted the job classifi- cations at the Medical Towers Building to be the same as the job classifications at the Medical Arts Building, which is another building in Philadelphia where the jani- torial and cleaning employees are represented by the Union and where Orapallo had signed a collective-bar- gaining agreement on behalf of the owners of that build- ing,, namely, Sheldon Equities, Inc. and Medical Arts' Realty Corporation. The chief executive officer for the owners of both the Medical Towers Building and the Medical Arts Building is Allan Pullman. The Union, on the other hand, wanted the job classifications at the Medical Towers Building to be the same as those in its contract with BOLR, which had expired on 31 October 1984. Between the fourth negotiating session on 6 February 1986 and the fifth negotiating session on 27 June 1986, Margaret Browning received a letter, dated 14 May 1986, from attorney Ross Van Denbergh advising her that he was no longer presenting Respondent and that she should "please deal with [Orapallo] directly in the future." This letter would indicate to anyone that the chief spokesperson would be Orapallo. In addition , Orapallo, to the knowledge of Browning, had full authority to ne- gotiate and did negotiate and sign collective-bargaining agreements with the Union involving two other buildings in Philadelphia-the Medical Arts Building referred to above and the Pullman Industrial Center. All three build- ings are owned by entities headed by Allan Pullman. Browning also knew that in connection with an unfair practice case for which testimony was taken on 18 June 1984 that Allan Pullman testified that Orapallo had virtu- ally limitless authority regarding collective bargaining and labor relations at the Pullman Industrial Center. In light of all the above it is inconceivable that the Union would think Orapallo was without authority to enter into a binding collective-bargaining agreement with the Union covering the employees at the Medical Towers Building. At the meeting on 27 June 1986 Orapallo appeared alone for Respondent . Browning reviewed what had oc- curred in the negotiations up to that point and pointed out that the parties' only area of disagreement was job classification. Orapallo than made two new demands-that only one- half of the - employees, rather than all the employees, which had been previously agreed to , could take Martin Luther King's birthday as a personal day and Respond- ent wanted to insert a clause permitting subcontracting by Respondent. Respondent also presses its demand on the job classification issue-this time saying do away with the cleaner/security two positions and create a lobby attendant position . The Union agreed to Respond- ent's demand that no more than one-half of the unit take Dr. King's birthday as a personal day, got Respondent to withdraw its demand on subcontracting, and struck a compromise with Respondent on the job classifications issue, namely, create a new lobby attendant position and keep all the other job classifications the same as in the expired BOLR contract. The last issue was the pay rate for the lobby attendant and after some proposals were made back and forth, Respondent and the Union agreed that the lobby attendant would start at $6 per hour and get the 20-cent-an-hour increase in November 1986 that the other employees were to get.3 At this point all issues were resolved and the parties had a complete agreement on all issues. Browning then went down a list of items in her notes and, as she ticked each of them off, she and Orapallo concurred that agreement had been reached on each item. Browning then said, "do we have a total agreement on everything" or "does that wrap it up," or words to that effect, and Orapallo ' replied, "yes , that does it," or words to that effect. At this point the parties had a con- tract that, at the 'request of either, would have to be re- duced to writing and signed. Browning said she wanted to prepare a written memo- randum of understanding, and get it signed before Ora- pallo left her office. At this point Orapallo for the first time said that he had to take it back to Allan Pullman for his approval. Orapallo had never said this during the five negotiating sessions, nor had Van Denbergh ever said it at the four negotiating sessions he attended . Browning, with good reason, was disgusted to hear him say this.4 3 It had previously been agreed that the other employees would get a 25-cent-an-hour raise immediately on the reaching of an agreement. 4 Orapallo claims that Browning acknowledged twice at the beginning of the 27 June 1986 negotiating session that she understood that Orapallo would have to get Pullman's approval for any agreement Neither Bris- bane nor Sanders ever heard her say this Browning specifically denies saying it I believe her and not Orapallo 1014 DECISIONS OF THE NATIONAL LABOR_ RELATIONS BOARD Orapallo then left Browning's office where all five nego- tiating sessions had taken place. Browning prepared a four-.page written memorandum of understanding and had it sent by messenger to Orapal- lo's office the next business day, Monday, 30 June 1986, with a cover letter asking him to sign the agreement and return it to, her. The memorandum of understanding in- corporated by specific reference portions of the contract involving the Medical Arts Building and the expired BOLR contract and constituted a complete collective- bargaining agreement. Browning called Orapallo on 2 or 3 July 1986, but he was out and never got back to her. Orapallo claims that he tried to return her call and left a message at Browning's office for her to call him. This is possible but suffice it to say she never got this message. In any event they did not,speak about the memorandum of understanding. Orapallo at no time returned the memorandum as acceptable and signed or returned it as unacceptable, in whole or in part, for one reason or an- other. In fact, he claimed at the, hearing that he never got it. He simply never got back to her on it. He never contracted her to let her know whether Pullman either approved or disapproved of the proposals in -the memo- randum of understanding. In fact, he did not testify that he even presented it to Pullman for his review. Browning wrote to Orapallo on 8 August 1986, re- ferred to the memorandum of understanding, and asked him to contact her so that the contract could be execut- ed. He did not. On 23 August 1987 Browning wrote to Orapallo once again and stated in this letter that she had not heard from him, and if she did not hear from him in 5 days she would bring unfair labor practice charges against Respondent. She did not hear from him although he claims he called her and she was not in. On 4 Septem- ber 1986 a charge,, on behalf of the Union, was filed in the Board's Regional Office in Philadelphia. Section 7 of the Act gives employees certain rights under Federal law. Section 7 provides that: Employees shall have the right to self-organiza- tion, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted ac- tivities for the purpose of collective bargaining or other mutual aid or protection, and shall, also have the right 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 employment as au- thorized in Section 8(a)(3). Section 8(a)(1) and 5 provides as follows: It shall be, an unfair labor practice for an employ- er- (1) To interfere with, restrain, or coerce employ- ees in the exercise of the rights guaranteed in Sec- tion 7; . . . (5) to refuse to bargain collectively with the representatives of his employees, subject to the provisions of Section 9(a). Section 8(d) provides, in part, as follows: (d) For the purposes of this section, to bargain collectively is the performance of the mutual obliga- tion of the employer and the representative of the employees to meet at reasonable times and confer in good faith with respect to wages, hours, and other terms and conditions of employment, or the negotia- tion of an agreement or any question arising there- under, and the execution of a written contract incor- porating any agreement reached if requested by either party, but such obligation does not compel either party to agree to a proposal or require the making of a concession. [Emphasis added.] I It is clear that the parties had reached complete agree- ment for a contract on 27 June 1986 immediately prior to Orapallo saying for the very first time that he needed to get Pullman's approval., Orapallo was clothed with ap- parent full authority to negotiate and agree to a contract. If he lacked full authority to enter into a contract, it was incumbent on him to say so right away but he did not. Accordingly, the Union can legally demand that the con- tract terms agreed to be reduced to writing and signed by the parties and can demand that its terms be effective as of 27 June 1986 as agreed to by the parties.5 The law is clear that an agent is deemed to have apparent author- ity to bind his principal in the absence of clear notice to the contrary and the principal bears the consequences of the failure to timely advise that the agent lacks authority. University of Bridgeport, 229 NLRB 1074, 1082 (1977). The bottom line is that the principal is stuck with the contract. The remedy for Respondent's refusal to execute the contract it agreed to is to require it to execute the con- tract and make unit members whole for any losses they may have suffered by reason of Respondent's failure to execute the contract and apply its terms. Maury's Fluo- rescent, 226 NLRB 1290, 1293-1294 (1976). Respondent violated the Act when it failed to execute the memorandum of understanding, which embodied the agreement reached between Respondent and the Union at the last negotiating session on 27 June 1986. Respond- ent added insult to injury by not even returning phone calls or answering letters about the memorandum of un- derstanding. If, in fact, Orapallo lacked authority, he did not even let the Union know what Pullman's position was on the Union's proposals. I can, only conclude that Orapallo, had full authority to sign the memorandum of understanding, but chose not to for reasons best known to- him and/or Allan Pullman. Pullman was not I present at the hearing and obviously did not testify. His absence was not explained. Therefore, we are left with a record where the principal never tells us what authority he vested in his agent nor what his position is regarding the proposals that were allegedly submitted to him for ap- proval. a 5 On 27 June 1986 employee and shop steward Mildred Sanders se- cured ratification of the agreement from the other members of the unit 6 It is not necessary for me to reach the issue of whether the failure of Respondent to communicate with the Union after 27 June 1986 was an unfair labor practice But, of course, it was Embossing Printers, 268 NLRB 710, 722 (1984) MEDICAL TOWERS LTD. 1015 CONCLUSIONS OF LAW ' 1. Respondent is an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act. 2. The Union is a labor organization within,meaning of Section 2(5) of the Act. - 3. By refusing to execute and honor a written agree- ment embodying terms and conditions of employment agreed to with the Union or 27 June 1986, Respondent violated Section 8(a)(1) and (5) of the Act. 4. The foregoing unfair labor practice affects com- merce within the meaning of Section 2(6) of the Act. On these findings of fact and conclusions of law and on the entire record, I issue the following recommend- ed7 ORDER The Respondent, Medical Towers Limited, Philadel- phia, Pennsylvania, its officers, agents, successors, and assigns, shall 1. Cease and desist from (a) Refusing to bargain in good faith and to execute and honor collective-bargaining agreements concluded by it with SEIU, Local 36, AFL-CIO or any other labor organization. (b) In any like or related manner coercing, restraining, or interfering with the rights accorded employees by Section 7 of the Act. 2. Take the following action necessary to effectuate the policies of the Act. (a) Forthwith execute the collective-bargaining agree- ment consummated by Respondent and the Union on 27 June 1986. (b) On execution of the aforesaid agreement, give ret- roactive effect to the provisions thereof and make whole the employees, with interest, for any losses they may have suffered by reason of Respondent's failure to sign and effectuate all terms of the agreement. Backpay should be computed in the manner prescribed in F. W. Woolworth Co., 90 NLRB 289 (1950), with interest as set forth in Florida Steel Corp., 231 NLRB 651 (1977). See, generally, Isis Plumbing Co., 133 NLRB 716 (1962). (c) Preserve and, on request, make available to the Board or its agents, for examination and copying, all payroll records, social security payment records, times- cards, personnel records and reports, and all other records necessary to analyze the amount of backpay due under the terms of this recommended Order. (d) Post at its facility in Philadelphia, Pennsylvania, copies of the attached notice marked "Appendix."$ Copies of the notice, on forms provided by the Regional Director for Region 4, after being signed by the Re- spondent'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 customarily posted. Reasonable steps shall be taken by the Respond- ent to ensure that the notices are not altered, defaced, or covered by any other material. (e) Notify the Regional Director in writing within 20 days from the date of this Order what steps have been taken to comply. For the purpose of determining or se- curing compliance with this Order, the Board, or any of its duly authorized representatives, may obtain discovery from Respondent, its officers, agents, successors, or as- signs, or any other person having knowledge concerning any compliance matter, in the manner provided by the Federal Rules of Civil Procedure. Such discovery shall be conducted under the supervision of the United States court of appeals enforcing this Order and may be had on any matter reasonably related to compliance with this Order, as enforced by the court. 7 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. 8 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 "