Property Resources Corp.

PROPERTY RESOURCES CORP. Property Resources Corporation and Triboro Main- tenance Corp., a subsidiary of Property Re- sources Corporation and Services Employees International Union, Local 32E, AFL-CIO. Cases 2-CA-21321, 2-CA-21617, and 2-CA- 21641 25 September 1987 DECISION AND ORDER BY MEMBERS BABSON, STEPHENS, AND CRACRAFT On 12 January 1987 Administrative Law Judge Harold B. Lawrence issued the attached decision. The Respondent filed exceptions and a supporting brief, and the General Counsel filed an answering 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,2 to modify the remedy,3 and to adopt the recommended Order as modified.4 i The Respondent has excepted to some of the judge's credibility find- ings. The Board's established policy is not to overrule an administrative law judge's credibility resolutions unless the clear preponderance of all the relevant evidence convinces us that they are incorrect. Standard Dry Wall Products, 91 NLRB 544 (1950), enfd. 188 F 2d 362 (3d Cir. 1951). We have carefully examined the record and find no basis for reversing the findings. 2 The judge concluded that the Respondent's failure to call as wit- nesses either Henry Chartier (union president) or Paul Fingerhut (senior vice president of Triboro) regarding Jerome Chatzky's (Respondent's chairman) testimony on the Tnboro employees' alleged rejection of the Respondent's wage offer warranted an inference that had they testified, their testimony would have adversely affected the Respondent's case We disagree with this conclusion., Given that Chartier was the president of the Charging Party Union and that Fingerhut had been fired by the Respondent by the time of the hearing, it was improper to infer that the only reason for the Respond- ent's failure to call those witnesses was a fear that they would truthfully testify in a manner adverse to its version of events. An adverse inference is properly drawn regarding any matter about which a witness is likely to have knowledge if a party fails to call that witness to support its position and the witness may reasonably be assumed to be favorably disposed to the party. McCormick, Evidence at 272 (3d ed. 1984); 2 Wigmore, Evi- dence at 286 (2d ed. 1940), Pur 0 Stl, Inc., 211 NLRB 333, 337 (1974) (inference drawn based on respondent employer's failure to call four of its own managers). It cannot reasonably be assumed that Chartier and Fingerhut were favorably disposed towards the Respondent We never- theless adopt the judge's conclusion that the Triboro employees ratified the collective-bargaining agreement, based on the credited testimony of Peter Martinez and Carlos Martinez 3 In accordance with our decision in New Horizons for the Retarded, 283 1'i4LR13 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 US C. § 6621 Interest on amounts accrued prior to I January 1987 (the effective date of the 1986 amendment to 26 U S.C. § 6621) shall be computed in accordance with FloridbiSteel Corp, 231 NLRB 651 (1977). 4 We will modify the judge's recommended Order to provide for a make whole remedy for the Respondent's refusal to honoi the collective- bargaining agreement reached on I1 September 1985 1105 ORDER The National Labor Relations Board adopts the recommended Order of the administrative law judge as modified below and orders that the Re- spondent, Property Resources Corporation and Triboro Maintenance Corp., a subsidiary of Proper- ty Resources Corporation, New York, New York, its officers, agents, successors, and assigns, shall take the action set forth in the Order as modified. 1. Substitute the following for paragraph 1(c). "(c) In any like or related manner interfering with, restraining, or coercing employees in the ex- ercise of the rights guaranteed them by Section 7 of the Act." 2. Insert the following as paragraph 2(b) and re- letter the subsequent paragraphs. "(b) On execution of the 11 September 1985 col- lective-bargaining agreement, make whole, as pre- scribed in Ogle Protection Service, 183 NLRB 682 (1970), any employees for losses they may have suffered as a result of the Respondent's failure to adhere to the contract since 11 September 1985, with interest, as computed in New Horizons for the Retarded, 283 NLRB 1173,(1987)." 3. Substitute the attached notice for that of the administrative law judge. The judge inadvertently recommended a broad remedial order We correct this error to reflect the narrow cease-and -desist provision con- tained in the notice. 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. Section 7 of the Act gives employees these rights. To organize To form, join, or assist any union To bargain collectively through, representa- tives of their own choice To act together for other mutual aid or pro- tection To choose not to engage in any of these protected concerted activities. WE WILL NOT threaten you with discharge or layoff if you refuse to accept wage rates lower than those negotiated with us by your Union, and WE WILL NOT lay you off under those circum- stances. 285 NLRB No. 137 1106 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 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, if requested by your Union, execute a contract embodying the collective-bargaining agreement that we reached with your Union on 11 September 1985. WE WILL,, on execution of the 1 1 September 1985 collective-bargaining agreement between us and the Union, make the employees in the appro- priate bargaining unit whole for any losses they may have suffered as a result of our failure to honor, abide by, and' apply to unit employees the terms of the agreement, including the wage rate. WE WILL offer Benneth Avila, Ramon Carrillo, Julio Maysonet, Florian Pimental, Benedicto Rivera, and Vishnu Thackurdin immediate and full reinstatement to their former jobs or to equivalent positions and make them whole for all pay and other privileges that they lost while laid off, plus interest, without prejudice to their seniority and other privileges previously enjoyed, and WE WILL remove from our files any references to their lay- offs and advise them in 'writing that this has been done and that evidence of their unlawful layoffs will not be used as a basis of future action against them: PROPERTY RESOURCES CORPORATION AND TRIBORO MAINTENANCE CORP., A SUBSIDIARY OF PROPERTY RE- SOURCES CORPORATION James A. Wasserman, Esq., for the General Counsel. Adin C. Goldberg, Esq. (Spengler, Carlson, Gubar, Brodsky & Frischling), of New York, New York, for the Re- spondent. DECISION STATEMENT OF THE CASE HAROLD B. LAWRENCE, Administrative Law Judge. This consolidated case was heard by me at New York, New York, on 25 and 26 August 1986. The consolidated complaint, issued on 31 July 1986, and based on charges filed against Triboro Maintenance Corp. on 23 October 1985 and on 14 , and 24 April 1986, alleges violations of Section 8(a)(1), (3), and (5) and Section 8(d) of the Na- tional Labor Relations Act (the Act). The General Counsel contends that Triboro Maintenance Corp., a di- vision of Property Resources Corporation , refused to execute a collective-bargaining agreement that it had ne- gotiated with Service Employees International Union, Local 32E, AFL-CIO (the Union) and unlawfully threatened to discharge, and discharged, employees with the object of compelling employees' assent to renegoti- ation of the agreement.' The Employer's defenses are that the person who negotiated the agreement lacked au- thority to do so, that neither side ratified it , and that em- ployees were laid off solely for business reasons,, which did not contravene either the Act or the expired collec- tive-bargaining agreement. The parties were afforded full opportunity to be heard; to call, examine, and cross-examine witnesses; and to in- troduce relevant evidence . Posthearing briefs have been filed by the General Counsel and the Employer. On the entire record, including my observation of the demeanor of the 'witnesses, and after consideration of the briefs filed herein, I make the following FINDINGS OF FACT 1. JURISDICTION There is no issue as to jurisdiction , although the exact legal composition of the employing entities is not alto- gether clear. In its answer , Respondent admitted allega- tions to the effect that "PRC Management Corp." and "Tri-Boro Maintenance Corp." are New York corpora- tions that are wholly owned subsidiaries of Property, Re- sources Corporation, but Jerome Chatzky, the chairman of the board of directors of Respondent, testified that they were unincorporated divisions having no separate legal composition. In any event, it is admitted and I find that at all material times these three entities constituted, and still constitute, a single integrated business enterprise and a single employer within the meaning of the Act and an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act. Respondent also admits, and I accordingly find, that at all material, times the Union was and is a labor organization within the meaning of Section 2(5) of the Act. II, ALLEGED UNFAIR LABOR PRACTICES A. Background2 Jerome Chatzky testified that Property Resources Cor- poration is a construction and development company that builds, owns, and maintains properties. It is a gener- al partner in 19 partnerships that own 19 developments in the Bronx and Manhattan , New York City, comprising 2500 apartments. The properties are maintained and op- erated through the two divisions known as PRC Man- agement Company (PRC Management) and Triboro Maintenance Corp. The rents of these properties are subsidized by the United States Government, acting through the Depart- ment of Housing and Urban Development (HUD). Prop- erty Resources Corporation is required to limit the r On 27 June 1986, the Regional Director for Region 2, made an order severing cases and approving withdrawal of charges of a similar nature that had been brought against PRC Management Company , another divi- sion of Property Resources Corporation 2 The matters narrated in this decision without evidentiary comment are those facts found by me on the basis of admissions in the answer, data contained in the exhibits, stipulations between or concessions by counsel, undisputed or uncontradicted testimony, and, in instances where conflicts in- the testimony did not warrant discussion , the testimony that I have credited PROPERTY RESOURCES CORP amount of rent it charges 'for the apartments so as to make them available to low-income families, in exchange for which HUD makes payments geared to the operating expenses of the properties to ensure a fair profit to the owners and operators. Property Resources Corporation makes annual applications to HUD for increases in the amounts paid to it, which reflect increases in mainte- nance costs that it is not permitted to pass along to the tenants. The applications are required to be supported by detailed information respecting expenditures for the maintenance and operation of the various properties. Triboro and the Union had collective -bargaining agreements covering employees at each of the buildings, all of which were due to expire in August and Septem- ber 1985. Timely request for renegotiation was served by the Union in accordance with the terms of the expiring agreements. Paul Fingerhut, senior vice president of Tri- boro, acknowledged receipt of the request and, after some difficulty in scheduling, began negotiations on 4 September at the Union's offices. Fingerhut was also vice president of PRC Management and acted on behalf of that division in negotiations on the same days negotia- tions were conducted for Triboro. The negotiations took place on 4, 6, and 11 September 1985. On each of these 3 days, the PRC Management contract negotiations were conducted in the morning and the Triboro contract negotiations, covering an agreement for the bargaining unit at 1005-1007 East 163rd Street, were conducted in the afternoon. The Union's practice was to negotiate a contract with each employer covering one of the buildings, which contract then became the ar- chetype for those governing the employees at the other locations. In the present case, the collective-bargaining agreement was negotiated for the address stated and was supposed to extend and modify one that had been in ex- istence, with renewals, since at least 1 September 1979. It was captioned as a contract between the Union and "Tri- boro Maintenance Corp., c/o Donald Spanier, Vice President." B. The Negotiations Peter Martinez, a union business agent, conducted the negotiations for the Union at both the morning and after- noon sessions, accompanied by committees of employees from the respective divisions involved. The management team at all negotiating sessions consisted of Fingerhut, as negotiator, Philip V. Avitabile, supervisor of mainte- nance for Triboro, and Ernest Washington, field director for PRC Management. At the first session, the Union presented proposals re- lating to increased wages, extra holidays, uniforms, length of workweek, coffeebreak, banking conveniences, formation of a credit union, and increases in pension and welfare contributions. At the second meeting, Fingerhut accepted or compromised most of the items. The third meeting resulted in paring down of the Union's. demand for wage increases from $50 weekly for each year of the 3-year contract to weekly increases of $30 for the first 2 years and $25 for the third year. The negotiations concluded on 11 September with identical agreements for the PRC and Triboro employ- ees. Peter Martinez testified that he told Fingerhut that 1107 he would have the contract typed and Fingerhut replied that he should have it made up as soon as possible and he, Fingerhut, would sign it. At that point, Martinez told him that it had to be ratified by the bargaining unit mem- bers. According to his testimony, he met with the PRC Management and Triboro employees at 3:30 p.m. in a community room at the building. Votes were taken by secret ballot, first of the PRC Management employees, who approved their contract and then departed, and then by the approximately 32 Triboro employees, who voted to approve their contract. Both approvals were unanimous. Respondent had an office next door where Fingerhut was waiting. Martinez informed him that the contracts had been approved, whereupon Fingerhut thanked him and stated that he would come to the union offices to sign the contracts. Martinez was accompanied ' by the shop steward. A discrepant version of these events was supplied by Carlos Martinez, a mechanic employed by Triboro. He is now a shop steward, but at the time of the negotiations he attended as a member of the union negotiating com- mittee along with the then shop steward and three other employees. His description of the negotiations does not vary 'markedly from that of Peter Martinez, but his de- scription of the ratification procedure is altogether differ- ent. In his version, Peter Martinez did not attend the ratification meeting; the vote was by show of hands rather than by secret ballot; the Triboro vote was not unanimous, but the contract was approved by a vote of 30 to, 11; and he notified Peter Martinez-immediately of the result by telephone, and it was his understanding that Peter Martinez was going to notify Fingerhut. He testi- fied that many of the Triboro employees objected to ac- ceptance of a contract identical to the PRC Management contract because 'they regarded themselves as more skilled than the porters 'and superintendents employed by PRC 'Management and that they also had objections to other portions of the package. Notwithstanding the discrepancies between the testi- mony of Peter Martinez and Carlos Martinez, their testi- mony is uncontroverted insofar as they assert that the agreements submitted for ratification were the ones that had been negotiated and that the Triboro employees rati- fied the one negotiated on their behalf. There is no evidence that Fingerhut indicated to anyone that he had to obtain Respondent's approval of the agreement. C. Repudiation by Chatzky Jerome Chatzky, chairman of the board of directors of Respondent, testified that he first became aware that ne- gotiations had been conducted with the Union 2 days after they were concluded, when Fingerhut informed him "that he had completed a negotiation package with PRC Management, that he had submitted the same pack- age to Tri-boro but that they had turned him down." Chatzky immediately telephoned the president of the Union, Henry F. Chartier, and met with him the follow- ing Monday (16 September). He claims that, as of that time, he had received no notification of ratification by Triboro employees. Chatzky testified that he explained to 1108 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD Chartier that Fingerhut had negotiated the agreement "without my knowledge and without my approval." Chatzky's testimony respecting Chartier's response makes it plain that Chartier took the position that an agreement had been reached. Chatzky testified that Chartier disclaimed any ability to do anything about the PRC Management contract (the contract of "the man- agement people") because Fingerhut had made an offer that they had accepted, but "he said he didn't want to hurt me and he would give me permission to meet with all the employees and explain my case personally." Char- tier, obviously not conceding that there was no contract, "suggested that I meet with the men and tell them di- rectly what my position was and what the circumstances were, so we did." Some time later, Chatzky had separate meetings with the PRC Management employees and with the Triboro employees, with union representatives in attendance. He tried to explain to them why the terms negotiated could not be met. In essence, he told them that he was limited by the amount of the increase he could negotiate with HUD and that various expenses had gone up that would not necessarily be covered by HUD. Chatzky testified, "I just wanted to renegotiate but upon questioning [by employees who were present] I think I said, all I can pay is 3%." Chatzky claims that he fired Fingerhut for having ex- ceeded his authority in negotiating the agreements, and it is Respondent's basic position that Fingerhut acted with- out either `actual or apparent authority, and that no agreement was reached in any event because the Triboro employees never ratified the agreement. In that regard, I am satisfied that the uncontroverted testimony of Peter Martinez and Carlos Martinez, despite differences in de- tails, establishes that both contracts were ratified by the respective groups of employees. Respondent's contention that no ratification occurred rests on Chatzky's testimony that Chartier and Fingerhut made statements indicating that there had been no acceptance. This hearsay testimo- ny was not corroborated. in any fashion. Neither Chartier nor Fingerhut appeared as a witness, and Respondent, who stood to benefit by their testimony if Chatzky was correct, failed to offer any explanation for its failure to call them. This requires that I infer -that had they been called, their testimony would not have been favorable to Respondent. Colorflo Decorator Products, 228 NLRB 408, 410 (1977), enfd. mem. 582 F.2d 1289 (9th Cir. 1978). See also Bechtel Corp., 141 NLRB 844, 845, 852 (1963); Davis Walker Steel & Wire Corp., 252 NLRB 311 (1980); Team- sters Local 959 (Northland Maintenance), 248 NLRB 693, 698 (1980); Martin Luther King, Sr., Nursing Center, 231 NLRB 15 (1977). As obvious as it is that Chartier believed a contract ex- isted, so is it apparent that, at least at that time, Chatzky and Fingerhut shared that belief. Chatzky readily con- cedes that his objective in speaking directly to Chartier and to the employees was to reopen the negotiations and arrive 'at a new agreement, objectives and actions mani- festly unnecessary unless there was an agreement that \had to be undone. There is no need to renegotiate unless binding commitments already exist. Chatzky testified that Fingerhut was proud of what he had accomplished, be- lieving that he had struck a very good bargain in reduc- ing the Union's demand and his testimony makes it clear that, notwithstanding his care to assert that Fingerhut said the Triboro employees had turned the deal down, he thought Fingerhut had completed negotiation of "a con- tract with the Union" and that Respondent was commit- ted to the expenditure called for in the agreement: Q. When did you first become aware that negoti- ations had taken place? A. Well a day or two after that date [11 Septem- ber 1985] Mr. Fingerhut called me and told me that he had completed a negotiation package with PRC Management, that he had submitted the same pack- age to Triboro but that they had turned him down. Q. Did you discuss with Mr. Fingerhut in that conversation what the terms of the PRC agreement was? A. Yes, I did. . . . he took the position that he had been a hero, that he had negotiated 30, 30 and ,25 because they had asked for 50, 50 and 50 . . . I pointed out to him . . . how dare he spend a mil- lion and a half dollars of the company's money without at least telling us about it. D. Fingerhut's Authority Respondent's contention that Fingerhut lacked actual or apparent authority to negotiate the agreements with the Union, rests solely on Chatzky's testimony to that effect. Chatzky testified that' Fingerhut's function was to run the day-to-day operations of the management and main- tenance companies and that he had no authority to spend more than $500 or take any significant action without consulting the executive committee, which consisted of Chatzky, the company president, the controller, and the executive ,vice president. However, it is unclear from his testimony whether Fingerhut's offense was that he negotiated, or that he ne- gotiated without adequate consultation with his superi- ors, or that he simply reached an agreement with the Union that Chatzky found unacceptable. Chatzky tended to be fuzzy on the point, even to the extent of suggesting insubordination as a reason for firing Fingerhut: Q. Now wasn't Mr. Fingerhut fired because- well, tell us why he was fired. A. Mr. Fingerhut exceeded his authority by ne- gotiating a contract with the union. Q. Well the problem was with the wage in- creases, wasn't it? A. The problem was that he did not tell the exec- utive committee what he was doing nor did he ask for approval of what he was doing nor did he advise anybody in the company what he was doing and therefore he was insubordinate and he was fired. Chatzky had conveyed a different impression to the PRC Management staff on 10 October 1984, when he issued an announcement to them of Fingerhut's appoint- ment as senior vice president "responsible for PRC Man- agement and Tri Boro Maintenance." His memorandum PROPERTY RESOURc cORP. set forth that the purpose of Fingerhut's appointment was to integrate the management and maintenance divi- sions in order to attain a more cohesive operation, im- prove efficiency, "and enable us to expand our capabili- ties beyond our present scope." This memorandum con- veys some idea of what Chatzky had in mind when he hired Fingerhut, and Fmgerhut's activities on assuming his new position seemed to reflect a large measure of re- sponsibility. Fingerhut took over management of both Triboro and PRC Management from Donald Spanier, a vice president who had negotiated and signed collective-bargaining agreements with the Union. Chatzky testified that Span- ier had handled those negotiations directly. He. did not testify to any limitations on Spanier's authority or to any deletion of any portion of Spanier's authority from that which passed to Fingerhut. Indeed, in March 1985 Fingerhut, on the job less than half a year, negotiated a collective-bargaining agreement with Peter Martinez covering the employees who worked at the property known as 1190-1995 Seventh Avenue. In his capacity as senior vice -president, Finger- hut signed an agreement for the period from 5 March 1985 through 4 March 1988, which, among other things, required payment of welfare, pension, and income securi- ty contributions; increased moving expenses; enlarged be- reavement benefits; a prepaid legal service fund and an escrow fund to ensure payment of obligations to employ- ees in the event of sale of the building; and, in addition, augmented, the vacation schedule. Peter Martinez testi- fied that at the time the agreement was negotiated, Fin- gerhut made no statements indicating that he needed the approval of anyone else to enter into the agreement. The Respondent would have us believe, however, that as Fingerhut approached the first anniversary of his ap- pointment his authority diminished. No act or statement by any other officer of Respondent is cited as having ef- fected or demonstrated any reduction in Fingerhut's au- thority. According to Chatzky, only Fingerhut, Avitabile, and Washington were aware of the negotiations respecting the contract in issue. Chatzky, as chairman of the board of directors, and the Company's president, executive vice president, and controller were altogether unaware of the negotiations. In order to credit this assertion by Chatzky, I would have to believe that nothing was said by Finger- hut, Avitabile, and Washington. The last two employees, of course, were not fired. No one seems to have won- dered about the whereabouts of the senior vice president, Avitabile, and Washington during the 3 days of negotia- tions. No one seems to have wondered whether anything was being done about the numerous collective-bargaining agreements whose expiration dates were fast approaching or had already arrived. Not only is Chatzky's testimony improbable, but it clashes with uncontroverted testimony by Peter Martinez that at various times during the negotiations the manage- ment group caucused and left the negotiating room to make telephone calls to their office. Testimony by Avita- bile and Washington would have been helpful on several aspects of this case, but here was a point on which their testimony would have been especially helpful. They 1109 could have confirmed, or denied the making of such tele- phone calls and, if calls had been made, they could have told us whom at headquarters they spoke to. I can only presume that on this point, and any others regarding which they might have testified, their testimony would have been adverse to the Respondent, which failed to call knowledgeable witnesses to the events who were still under its control. See Colorflo Decorator Products, and other cases cited, supra. I conclude, therefore, that the Union reached collec- tive-bargaining agreements with duly authorized repre- sentatives of Respondent. Chatzky's speedy repudiation of the agreements relieved the Union of the necessity of preparing written contracts for Respondent to sign. I find Respondent in violation of Sections 8(a)(5) and 8(d) of the Act. E. Discharge of Six Painters On 14 March 1986, Triboro laid off six union painters: Benneth Avila, Ramon Carrillo, Julio Maysonet, Florian Pimentel, Benedicto Rivera, and Vishnu Thackurdin, without advance consultation with or notice to the Union and allegedly in order to discourage union sup- port and other concerted protected activities. In essence, they refused to accede to Chatzky's wish to renegotiate the collective-bargaining agreement. As' noted, following Chatzky's conference with Chartier in September, a meeting of the employees was arranged at which Chatzky tried to explain to them Respondent's re- lationship with HUD and how it affected his budget, re- quiring him to limit any pay increase to 3 percent. Union officials were present throughout the -meeting. Carlos Martinez testified that the meeting took place "sometime in January or so" and also that it took place a month or two after 11 September. It was attended by 41 employ- ees, who did not understand Chatzky's explanation of how HUD operated. He quoted Chatzky to the effect that Fingerhut had done something he was not supposed to, that he could not pay that kind of money, and that he was offering a weekly increase of $6 for each of the 3 years of the proposed contract terms, or a total of $18 over 3 years. This offer was angrily rejected by the as- sembled employees. Carlos Martinez testified that Chatzky spoke of layoffs: Before he left he says that we have-that he will have to lay off men to be able to come to any con- clusions to the amount of men- Carlos Martinez testified that Chatzky had a second meeting with the employees. He could not recall precise- ly when it occurred, fixing the time variously as "some- time in March," "after the layoffs," and approximately 4 weeks before the layoffs. (On that basis, the General Counsel asserts, in his posthearing brief, that the second meeting took place in February.) Under prodding, Carlos Martinez testified that Chatzky repeated his statement about layoffs: Q. What did Mr. Chatzky say at this meeting? A. He came with the same offer, 6, 6 and 6. He says, I cannot give you anymore and also if you 1110 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD guys don't accept this I cannot sit with you guys anymore. So we disagreed also. We came to no conclusions. Q. When he said, I can't sit with you anymore, was those his words, did he say anything else?. A. No, he said that he won't, sit with us anymore, to any other offer. Q. Did he say anything about any consequences? A. Yes, he mentioned laid off again. Q. What did he say about that? A. He have no alternative but to be laid off. Q. And before the layoffs, did you discuss the layoffs with anyone from management? A. Yes. I had a meeting with Mr. Avitabile and he told me that he see that I don't have any work for these men I have to be laid off the painters. Then he would let me know which was the mens that would go because he had to make a list, check on who has seniority because he had to be based on seniority. The record also establishes that at the close of 1985, bonuses in the aggregate amount of $45,534 were paid to nonunion employees of PRC Management and bonuses in the total amount of $13,848 were paid to nonunion employees of Triboro Maintenance. These were, for the most part, administrative, supervisory, or technical em- ployees, but in the case of Triboro, the recipients includ- ed four dispatchers, a driver, and two stockroom clerks. It has been established that only union members were laid off; that Chatzky warned repeatedly that layoffs would ensue unless the employees consented to renegoti- ate the contract already negotiated by the Union; that the timing was such that the layoffs occurred only when it became apparent that the employees would not re- negotiate; and that, to some extent, the layoffs were a de- parture from the practice that Respondent generally fol- lowed when its finances were tight. That, in substance, is the case presented by the General Counsel, and I find that it is sufficient to establish prima facie that the layoffs were implemented for the reasons alleged by the General Counsel in the complaint. Much of the evidence is to be found in Chatzky's own testimony, discussed below, given in the course of Respondent's attempt to meet the burden of establishing, as a result of the General Coun- sel's showing, that in fact the layoffs were made pursuant to a lawful business objective, as required by Wright Line, 251 NLRB 1083, 1089 (1980), enfd. 662 F.2d 899 (1st Cir. 1981), cert. denied 455 U.S. 989 (1982), ap- proved in NLRB v. Transportation Management Corp., 462 U.S. 393, 403 (1983). Respondent attempted to meet that burden entirely through testimony by Chatzky that failure to obtain in- creased subsidy from the slow-moving HUD necessitated reductions in the operating budgets of PRC Management and Triboro Maintenance. This does not, however, seem always to have been the Respondent's rationale for the layoffs. I have quoted testimony by Carlos Martinez re- specting his conversation with Philip V. Avitabile, the supervisor of maintenance for Triboro/Maintenance, im- mediately prior to the layoffs. Avitabile's statement ("I don't have any work for these men") does not contradict Chatzky's testimony, but adds a new dimension to it. His remarks to the shop steward imply that bargaining unit members had been singled out in a punitive fashion. It is unnecessary to speculate whether when Avitabile received instructions from higher authority to cut staff they gave him an explanation or whether he assigned his own reason for the cuts in the course of his discussion with Carlos Martinez. Whatever happened, I find it pe- culiar that he used the terminology quoted by Martinez at a time when he must have known, in his official ca- pacity, that there was a growing backlog of unpainted apartments. Even assuming that he would not normally discuss company finances with Martinez, it is not reading too much significance into the incident to note that Avi- tabile said nothing about a budgetary reason for the lay- olfs and instead gave a reason that carried an altogether different implication from the reason subsequently given in Chatzky's testimony. And it was an explanation that was patently untrue. The element of retaliation and sin- gling out is apparent. Chatzky's testimony was insufficient to rebut the case made by the General 'Counsel. I credit Chatzky's testi- mony that he entertained a desire to effect budgetary economies. I simply do not believe that it was his only motivation, and I find that the General Counsel has es- tablished by a preponderance of the evidence that had it not been for Respondent's desire to compel a renegoti- ation of the collective-bargaining agreements, the layoffs would not have occurred.- Considered from one point of view, it is impossible to reach any other conclusion, for Chatzky himself told the men that, unless they agreed to accept a 3-percent in- crease, layoffs would result. Respondent's problem herein is that at the time Chatzky was making such state- ments, collective-bargaining agreements had already been fully negotiated between the Union and Respondent's then senior vice president, Paul Fingerhut, and had been ratified by the bargaining unit employees. This case arose essentially because Chatzky did not like the deal Finger- hut had concluded. Chatzky's statements cannot qualify as mere declara- tions of economic prognosis. Chatzky made it abundantly clear in his testimony that funds could usually be made available for purposes that he considered worthwhile. He testified that all the money came out of one bank ac- count, notwithstanding the separate bookkeeping for the various entities involved in his complex operation, -His assertion that money was simply not there to pay paint- ers, when an enormous backlog of painting was coming into existence in violation of municipal law, is in glaring contradiction to approaches admittedly taken in other circumstances. At one point in his testimony he stated, The money that Triboro Maintenance gets, the money that the administrative staff [gets] comes from every available source that PRC has. So that indeed if we decide that we must spend $13,000 in bonuses and there's no money available from a Tri- boro income source, we'll then dust have, if we want to stay in that business, we dust have to turn around and get it from the management company or from the development company or from the con- PROPERTY RESOURCES, CORP. 1111 struction company because those companies are fic- tions, I mean they don't exist as a separate entity. In the course of justifying retention of his' administra- tive staff, Chatzky delivered a lecture on the techniques of cutting costs so as to keep the maintenance operation intact: Well sometimes with all the organization and all the budgets we can't determine what kind of billing will be accomplished by the maintenance company because certain maintenance work must be done in order to keep this a viable project. . . . I might say that I don't want to spend more than $700 an apart- ment on repairs' as a result of our budget, but the situation is such that we must exceed that and we must have these amount of people in order to keep the project viable. So that even if I decide .. . wouldn't it be nice that instead of having fourteen people we could cut corners by having ten people, I might find that I'm unable to do that and keep my fiduciary responsibility as a general partner. And we've decided that we're very, very lean. . . . That's not the same as saying you have 45 mainte- nance people and instead of 45 you might be able to have 40 or 35 or 30, you might still find that you still need 14 administrative people to supervise that kind of operation. . . . if my administrative costs and my operational costs exceed that which I can do on the outside, then I Would have to use outside people. . . . not my own people . . . . If my costs got so high that I wouldn't be competitive with in- dustry standards, then I wouldn't be able to have any of these people. Of course, it is the employer's discretion to decide how to' run its business . I quote Chatzky's testimony, however, to illustrate the apparent contradiction between his asserted reason for the layoffs and his own descrip- tion of how he ran his business. In the testimony just quoted, he showed how resourcefulness enabled Re- spondent to maintain its organization , a matter in which he seemed to lose interest when stubborn union painters were involved. And that in itself was surprising in view of an observation he made in the course of his testimony: Property Resources, in their capacity as general partner and fiduciary, assumed the responsibility for managing and maintaining these properties and keeping them in the kind of state of repair that they are at present, And as a further indication, we have invested thousands and thousands of dollars to keep these projects going although we have no way of getting money back from the government. We're trying. Every year we try. And we try to reduce the amount of money that we have outstanding. Thus, according to Chatzky, "every year" Respondent goes to extraordinary lengths to maintain properties "in the kind of state of repair that they are at present" even when the cost is not recoverable from HUD. This has to be considered in the light of other testimony that he gave to the effect that the entire operation loses $1.5 mil- lion annually on income of $3 million annually. Com- pared with these figures, the amount he saved by laying off the painters is negligible. Compared to the amount saved by laying off the painters, the aggregate amount paid for bonuses in 1985 appears substantial. If the small savings thus accomplished and Respondent's simultane- ous willingness to increase the deficit were the only fac- tors present in this situation, I would be impelled to say that the General Counsel may not substitute his judg- ment for the business judgment of the employer, who would not necessarily be in violation of the Act simply for pursuing means of accomplishing a legitimate busi- ness purpose by methods that in the opinion of the Gen- eral Counsel are wrong, illogical, or ineffective.3 However, when considered together with each other and the other actions and statements of Chatzky, I be- lieve these facts help to form a total picture of unlawful motivation, for they highlight the abandonment of an es- tablished operating principle of the Respondent when the union painters were involved. I am also influenced by the timing of the layoffs. During the period from September 1985 through Febru- ary 1986, during which Chatzky tried to renegotiate the contracts, there were no layoffs. By February 1986 it was clear to him that, despite the threats he had made during this period, he would be unable to reshape the deals that Fingerhut had made. The layoffs followed in March. Finally, there is the fact that only union personnel were laid off, by itself not a conclusive circumstance, but influential when considered together with the other facts to which I have alluded. I conclude, therefore, that Respondent laid off the painters in order to effect economies in its operations and in order to force the Union to agree to renegotiation of the collective-bargaining agreements that the Union had reached with Fingerhut, and that had it not been for the employees' refusal to renegotiate, there would have been no layoffs. Accordingly, Respondent's actions violated Section 8(a)(1) and (3) of the Act. CONCLUSIONS OF LAW 1. Respondent Property Resources Corporation and its divisions, Triboro Maintenance Corp. and PRC Manage- ment Company, at all pertinent times herein, have consti- tuted and now constitute a single integrated business en- terprise, which is an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act. 2. Service Employees International Union, Local 32E, AFL-CIO is a labor organization within the meaning of Section 2(5) of the Act. 3 I attach no significance to the reference to fiduciary duty as such, which in this instance would refer to the general partner 's obligation to preserve and operate the properties and account to the limited partners for the proceeds Deficiencies in maintenance of the properties ', even in violation of municipal ordinance, would not necessarily entail fiduciary violations and, even if they did, fiduciary violations are not necessarily - violative of the Act 1112 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 3. The Union, at all pertinent times, was and continues to be the exclusive representative for the purpose of col- lective bargaining of the maintenance employees em- ployed by Triboro Maintenance Corp. 4. On 11 September 1985 the Union and the Respond- ent arrived at, a collective-bargaining agreement covering the maintenance employees,employed by Triboro Main- tenance Corp. 5. Respondent violated Section 8(a)(1) of the Act by informing employees that layoffs would occur if they re- fused to accept a wage rate lower than a rate that had been negotiated for them by their recognized collective- bargaining representative. 6. Respondent violated Section 8(a)(1), (3), and (5) and Section 8(d) of the Act by laying off six employees on 14 March 1986 and thereafter refusing to reinstate them be- cause they supported the Union and in order to discour- age them from negotiating with respect to terms and conditions of employment' through their recognized col- lective-bargaining representative. 7. Respondent violated Section 8(a)(1) and- (5) and Sec- tion 8(d) of the Act by refusing to sign written contracts embodying the collective-bargaining agreement that Re- spondent had reached with the Union, and by laying off employees without prior -consent of or negotiation with the Union and by doing so with the object of compelling modification of the collective-bargaining agreements it had reached with the Union. 8. The aforesaid unfair labor practices are unfair labor practices affecting commerce within the meaning of Sec- tion 2(6) and (7) of the Act. THE REMEDY Having found that, Respondent engaged in unfair labor practices in violation of Section 8(a)(1), (3), and (5) and Section 8(d) of the Act, I shall recommend that the Re- spondent, be ordered to cease and desist therefrom and to take certain affirmative action designed to effectuate the policies of the Act. I shall recommend that the Respond- ent, on request by the Union, execute written contracts embodying the collective-bargaining agreement that had been negotiated with the Union and that Respondent be directed to offer Benneth Avila, Ramon Carrillo,- Julio Maysonet, Florian Pimentel, Benedicto Rivera, and Vishnu Thackurdin reinstatement to their former posi- tions or, if those positions are not available, to substan- tially equivalent positions, without prejudice to their se- niority rights and privileges, and make them whole for any loss of earnings and other benefits that they may have suffered by reason of their layoffs, with backpay to bey computed in the manner prescribed in F W. Wool- worth Co., 90 NLRB 289 (1950), with interest thereon to be computed in the manner prescribed in Florida Steel Corp., 231 NLRB 651 (1977), and Isis Plumbing Co., 138 NLRB 716 (1962). I further recommend that the Re- spondent be required to expunge from its records any reference to the unlawful layoffs of these employees and provide them with written notice of such expunction and that their unlawful layoffs will not be the basis of any further actions against them. In view of the fact that the covered employees are dis- tributed among some 19 different buildings, I will recom- mend that notice of this determination be posted, among other places, in each of the buildings where they work. I am not unmindful of the fact that considerable time has elapsed' since the collective-bargaining agreements were negotiated. However, as there appears to be no compelling reason to make special provision to extend the duration of the agreements past the dates when they normally would have expired, and no special provision in this regard has been requested, I will recommend that the contracts be prepared and executed without incorpo- ration therein of any special provision extending their ex- piration dates. On these findings of fact and conclusions of law and on' the entire record, I issue the following recommend- ed4 ORDER The Respondent, Property Resources Corporation, and Triboro Maintenance Corp., a subsidiary of Property Resources Corporation, its officers, agents, successors, and assigns, shall 1. Cease and desist from (a) Threatening or informing employees that layoffs will occur if they refuse to accept a wage rate lower than any negotiated on their behalf by their Union. (b) Laying off employees because they support their Union or in furtherance of Respondent's object to dis- courage them from adhering to the provisions of the agreement negotiated with Respondent by the Union. (c) In any other manner interfering with, restraining, or coercing employees in the exercise of the rights guar- anteed them by Section 7 of the Act. 2. Take the following affirmative action necessary to effectuate the policies of the Act. (a) If requested to do so by the Union, execute, with- out delay, contracts embodying the collective-bargaining agreement arrived at between Respondent and the Union on 11 September 1985. (b) Offer Benneth Avila, Ramon Carrillo, Julio May- sonet, Florian Pimentel, Benedicto Rivera, and Vishnu Thackurdin 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 make them whole for any loss of earnings and other benefits suffered as a result of the discrimination against them, in the manner set forth'in the remedy sec- tion of the decision. (c) 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. (d) Remove from their records any reference to the unlawful layoffs of the six employees above named, and 4 If no exceptions are filed as provided by Sec 102 46 of the Board's Rules and Regulations, the findings, conclusions , and recommended Order shall, as provided in Sec 102 48 of the Rules, be adopted by the Board and all objections to them shall be deemed waived for all pur- poses PROPERTY RESOURCES CORP. 1113 notify them in writing that this has been done and that their unlawful layoffs will not be used as a basis of future action against them. (e) Post at each building at which any of the covered employees work and in its offices copies of the attached notice marked "Appendix."5 Copies of the notice, on 5 If this Order is enforced by a judgment of a United States court of appeals, the words in the notice reading "Posted by Order of the Nation- al Labor Relations Board" shall read "Posted Pursuant to a Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board." forms provided by the Regional Director for Region 2, after being signed by the Respondent's authorized repre- sentative, 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 Respondent to ensure that the notices are not altered, defaced, or covered by any other materi- al. (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.