Morton Development Corp.

MORTON DEVELOPMENT CORP 385 Morton Development Corporation and District 1199P, National Union of Hospital and Health Care Employees, AFL-CIO. Case 4-CA-15472 16 December 1987 DECISION AND ORDER BY CHAIRMAN DOTSON AND MEMBERS JOHANSEN AND CRACRAFT On 27 May 1987 Administrative Law Judge Thomas R. Wilks issued the attached decision. The General Counsel filed exceptions and a supporting brief. The Respondent filed a response. The National Labor Relations Board has delegat- ed its authority in this proceeding to a three-, member panel. The Board has considered the decision and the record in light of the exceptions and brief and has decided to affirm' the judge's rulings, findings, and conclusions and to adopt the recommended Order. ORDER The recommended Order of the administrative law judge is adopted and the complaint is dis- missed. MEMBER CRACRAFT, dissenting. I find that the Respondent's obligation to bargain with the Union as the representative of its service and maintenance employees' continued after the Respondent converted its rehabilitation facility for mentally retarded adults to a geriatric nursing facil- ity. In my view the changes in the nature of the i Prior to 27 June 1985 the Respondent, operating under the name Praxis, provided care for mentally retarded adults at its facility in Easton, Pennsylvania On 7 June 1983 the Charging Party Union was certified as the collective-bargaining representative of the Respondent's service and maintenance employees Due to monetary losses, the Respondent entered into a sales agreement to sell its facility, and it closed its business on 27 June 1985 It lawfully terminated its employees The Respondent and the Union engaged in "effects" bargaining and severance pay was paid to those employees for whom alternative employment was not secured Through no fault of the Respondent, the sales agreement "fell through" in August 1985 Thereafter, the Respondent solicited offers from other prospective buyers but was unsuccessful -Subsequently, rather than absorbing the cost of an idle facility, the Respondent decided to reopen as Praxis( Nursing, a geriatric nursing facility The reopening oc- curred on 6 November 1985 The Respondent hired some of its former employees On 15 November 1985 the Union requested recognition as bargaining agent for Praxis Nursing's service and maintenance employees The Respondent refused to recognize the Union The judge noted that there is no suggestion in this case that the Re- spondent acted in bad faith Ultimately, the judge concluded that the Re- spondent, operating as Praxis Nursing, had changed so significantly from its prior operation as to justify its refusal to recognize the Union Under the specific and unique facts of this case, we agree with the judge's con- clusion ' i The Union was certified on 7 June 1983, and the Respondent and the Union were parties to a collective-bargaining agreement effective from 30 March 1984 through 28 March 1985 The unit was comprised of service and maintenance employees , including living unit aides , therapeutic recre- ation aides , transportation aides, occupational therapy aides , diet aides, cooks, maintenance assistants , and housekeeping aides Respondent's business or in the employment condi- tions of the unit wrought by the conversion of op- erations were not the types of changes that would significantly alter the employer-employee relation- ship or the employees' desire for continued repre- sentation. In the end, the Respondent continued to provide residential health care albeit under differ- ent governmental regulations and to a different type resident. Thus, the skills and qualifications of the employees working in the unit, as well as the working conditions under which those employees now operate, are sufficiently similar to warrant a finding that the Respondent's obligation to bargain continued. The Respondent employs in its geriatric oper- ation service and maintenance employees classified as dietary aides, housekeeping aides,, laundry aides, activities aides, nurses aides, and maintenance em- ployees. They are, not highly skilled employees. They clean and maintain the building; they prepare and distribute food to the residents; and they help the residents with bathing, dressing, personal hy- giene, and meals, and escort residents to various treatments they require and activities in which they participate. Unit employees performed these same basic functions when the Respondent operated as a rehabilitation facility for retarded adults. The conversion to a nursing home has required some physical changes in the facility, e.g., installa- tion of new bathrooms and safety devices such as handrails, call bells, additional sprinklers, and alter- ation of therapeutic equipment and room furnish- ings. Change to a geriatric facility has also caused minor changes in the way unit employees carry out their functions. Dietary aides now prepare more specialized diets and trays for residents who re- quire meals in their rooms; the housekeeping aides work around medical equipment; the laundry aides actually launder all materials instead of showing residents how to handle laundry duties; the activi- ties aides and nurses aides work with residents who are frail and less mobile than the former residents and who spend only a small part of their time in programmed activities. These modifications of unit tasks which have re- sulted from the Respondent's change to geriatric operations are insubstantial and require employees to have no greater level of skills than was required when they worked in the rehabilitation operations. To the extent that nurses aides, a new classifica- tion, have medically oriented duties, the fact' re- mains that their primary responsibility is simply to assist registered nurses or licensed practical 287 NLRB No. 41 386 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD nurses.2 The fact that the skills and qualifications required of the service and maintenance employees at the Respondent's geriatric facility are similar to those required at the Respondent's rehabilitation fa- cility is underscored by the Respondent' s actions in soliciting all former employees who had not ob- tained other employment to come to work for the Respondent at, its geriatric center.3 They were given a 2-day training period, followed by on-the- job training. When the Respondent started its oper- ations as a geriatric facility, all its service and maintenance employees had • previously worked in the rehabilitation operations and a majority of the supervisory, managerial, and professional staff had likewise previously worked in the rehabilitation op- erations. Thus, it would appear that even in the Respondent's assessment the skills, requirements, and qualifications of the employees remained the same in spite of the conversion of operations. It seems clear that any changes the Respondent has made in employment conditions and adminis- tration and management to operate as a geriatric fa- cility have not affected substantially its relationship to its employees or the unit employees' view of their jobs and their expectation of continued repre- sentation by the Union.4 I would find that the Re- spondent violated Section 8(a)(5) and (1) when it refused to continue recognizing the Union as repre- sentative of its service and maintenance employees. 2 According to the testimony of the Respondent's vice president, regis- tered nurses are on duty around the clock 3 When it began geriatric operations 6 November 1985, the Respond- ent employed I I former service and maintenance employees and 9 super- visors, managers, and professional employees, 5 of whom had been em- ployed in the rehabilitation operations It had the same employee and su- pervisory complement on 15 November 1985 when the Union demanded recognition for the geriatric service and maintenance employees By 7 February 1986 it had 28 service and maintenance employees, of whom 20 were former employees at the rehabilitation operations 4 Compare Fall River Dyeing Corp v NLRB, 482 U S 27 (1987), in- volving a successor employer Margarita Navarro-Rivera, Esq., for the General Counsel. Julia W. Manning, Esq. and Robert S. Hodavance, Esq. (Morgan, Lewis & Bockius), of Philadelphia, Pennsylva- nia, for the Respondent. bargaining representative of a service and maintenance unit of employees at its geriatric skilled nursing facility in Easton, Pennsylvania,, as it had done when that same facility had previously been operated by Respondent as a rehabilitation residence for the mentally retarded. The Respondent, in its answer, denied the commission of an unfair labor practice and averred that it had no obliga- tion to recognize the Union as representative of the em- ployees employed by the nursing facility inasmuch as it constituted a new business "completely different -from and unrelated" to that of the rehabilitation residence, which as a business had ceased to exist. At the trial the parties were afforded full opportunity to adduce relevant testimonial and documentary evi- dence, stipulation of fact, and to argue orally. The par- ties submitted posttrial briefs about 16 March 1987. On the record as a whole, which includes undisputed evi- dence, and on the written briefs, I make the following FINDINGS OF FACT 1. JURISDICTION Respondent is, and has been at all times material, a corporation duly organized under, and existing by virtue of, the laws of the Commonwealth of Pennsylvania. From November 1979 until 27 June 1985, Respondent was engaged in the business of providing intermediate care for mentally retarded adults at its facility located at 500 Washington Street, Easton, Pennsylvania (Praxis). Since about 6 November 1985 and continuing to the present time, Respondent has been engaged in the busi- ness of providing skilled nursing services at its facility lo- cated at 500 Washington Street, Easton, Pennsylvania (Praxis Nursing Home). Commencing 1 March - 1986, Praxis Nursing Home also provides intermediate nursing care. In the course and conduct of its business operations described above, Respondent annually derives gross rev- enues in excess of $500,000 and purchases and receives materials and supplies valued in excess of $50,000 direct- ly from points located outside the Commonwealth of Pennsylvania. I find that Respondent is, and has been at all times ma- terial, an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act, and a health care institution within the meaning of Section 2(14) of the Act. II. LABOR ORGANIZATION DECISION STATEMENT OF THE CASE THOMAS R. WILKS, Administrative Law Judge. On 3 February 1987 this case was tried before, me at Bethle- hem, Pennsylvania, pursuant to a complaint issued by the Regional Director for Region 4 on 24 July 1986 and an unfair labor practice charge filed by District 1199P, Na- tional Union of Hospital and Health Care Employees, AFL-CIO (the Union) against Morton Development Corporation (Respondent). The complaint alleges that Respondent breached its bargaining obligations under the Act by refusing to continue recognition of the Union as The Union is, and has been at all times material, a labor organization within the meaning of Section 2(5) of the Act. III. UNFAIR LABOR PRACTICE A. The issue Did Respondent's economically motivated closure and conversion of its mentally retarded rehabilitation resi- dence center into a skilled geriatrics nursing home re- lieve it of the obligation of recognizing and bargaining with the historic bargaining agent of the service and maintenance employees, some of whom were rehired on MORTON DEVELOPMENT CORP. 387 the opening of the nursing home? The General Counsel alleges that Respondent merely effectuated superficial changes in the nature of its operations and that its con- tinuance of operations under the same ownership, at the same facility, with essentially the same type of service to patients, in the same type of industry , and with some of the same employees who formed a majority of the unit in the nursing facility at the time of a demand for continued recognition, must necessarily compel an affirmative re- sponse. The Respondent contends that despite its oper- ations at the same building by the same owner/operator, the nursing home is a new business, i.e., a new employ- ing industry that is neither a disguised alter ego continu- ance of the old business , nor a successor employer. B. Facts Undisputed testimony and stipulations reveal the fol- lowi,,ig facts. Respondent operates nursing homes and other health care= facilities in Pennsylvania. One of those facilities, Praxis, located in Easton , opened in 1979 as a state-regu- lated residential training center for severely and pro- foundly mentally retarded adults at the average age of about 40-45 years. More specifically, Praxis was a transi- tional living center that provided rehabilitation and train- ing for a maximum of 60 patients transferred from larger state-operated institutions. Its objective was to prepare its residents for their final entry into the community. State funding provided its sole income source . The resi- dents of Praxis fell into three categories. The vast pre- ponderance or about 80 percent of them were catego- rized as severely impaired with a mental capacity and concomitant behavior of a 3- to 5-year old child. About 10 percent were in the category "profoundly" impaired and they possessed the limited mentality and functioning ability of an infant between 3 to 6 months of age. The remaining category encompassed moderately impaired persons who possessed a mental proficiency and physical behavior of a child between the ages of 6 to 8 years. The Praxis professionals and their support staff were trained and/or experienced in dealing with a variety of behavioral disorders and psychosocial problems incident to adult mental retardation . In compliance with govern- ment regulations, behaviorally oriented policies and pro- cedures were instituted that governed the activities or services that were provided for the residents who were taught and counseled to perform normal daily living functions, e.g., dressing, bed-making, bathing, oral hy- giene. The residents were taught , guided, and monitored in the ways of group social activities in the community. They were taught to use currency, to make purchases, to operate coin machines . They laundered their own clothes in a mock coin-operated laundry in the facility. They were guided to dine in a group family -like setting and partook of the same meal. Prevocational and vocational services were provided in proportion to age equivalence. As much as 14-16 hours of the resident's day were pro- gramed. On 7 June 1983 the Union was certified by the Board as exclusive bargaining agent for about 55 service and maintenance employees in a bargaining unit consisting of living unit aides, therapeutic recreation aides, transporta- tion aides, occupational therapy aides , diet aides, cooks, maintenance assistants , and housekeeping aides. During periods of peak operational capacity that unit encom- passed 65-68 employees, of whom about 35 were "living unit aides." Excluded from the bargaining unit were about 28 supervisors, managers, and professional persons. The excluded classifications encompassed the following: Operation of plant supervisor, housekeeping and laundry supervisor, residential life services director, community services director, two (2) community services assistants, residential services director, six (6) program assistants , health services director, five (5) licensed practical nurses, dietary services direc- tor, vocational services director , vocational services assistant, two (2) certified occupational therapy as- sistants, two (2) special education teachers, an ad- ministrator and a qualified mental retardation pro- fessional who also served as a day care services di- rector. The Praxis residents' activities were programed and conducted under the direction of the appropriate profes- sional employee . The bargaining unit aide served under the supervision of the appropriate professional as a teach- er and guidance counselor for immediate functions, e.g., as in guiding the resident through the step-by-step proc- ess in such simple tasks as dressing, bathing, bed making, room tidying, oral hygiene, as well as in the more com- plicated behavior required in public social activity, e.g., ice skating, roller skating, or movie attendance and in the transportation there and back. Bargaining unit aides were involved in a variety or prevocational, vocational, and academic therepy activi- ties. In the performance of their duties the Praxis unit employees were obliged to possess the skills to cope with residents who manifested a high degree of hyperactivity. The residents were often given to restless and agitated behavior that demanded a type of care that induced a calming effect. From its inception Praxis was subjected to recurrent problems with respect to state reimbursement, the regula- tions of which were not published until 1984 . In conse- quence, there were numerous ongoing negotiations with the state welfare department with respect to reimburse- ment, which Respondent believed resulted in its not re- ceiving full payment for costs involved . Accordingly, in late 1983 or early 1984, Respondent decided to cease providing mental retardation services and elected to con- vert its facility to a skilled nursing home , the operation of which it was much more familiar and comfortable as an operator of other nursing facilities . Simultaneously, it also entertained the alternative prospect of selling the fa- cility immediately on conversion as a nursing home inas- much as it had received several offers of purchase of some of its other nursing homes. Respondent communicated its decision to the appropri- ate state agencies concerned with mental retardation reg- ulation, and to the Sate Department of Health , which is the nursing home licensing authority . At this time Re- spondent was party to a collective-bargaining agreement that was effective from 30 March 1984 until 28 March 388 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1985. Respondent therefore advised the Union and its employees of its intention and kept the Union informed of its actions . Respondent and the Union agreed to an ex- tension of the collective-bargaining agreement to 30 June 1985. Respondent negotiated the impact of the prospec- tive closure pursuant to its obligation under the collec- tive-bargaining agreement, which also provided for sev- erance pay for employees for whom Respondent was unable to find alternative employment on closure of its business. Since late 1984, Respondent had negotiated the sale of Praxis to the Upper Bucks Nursing and Convalescent Center, a division of Quakertown Hospital. On 15 April 1985, a sales agreement was executed with that prospec- tive purchaser. The expected date of sale was to be about 1 July 1985 almost immediately on the expected closure of the Praxis facility . On 27 June 1985, Praxis was closed. On 2 July, Respondent forwarded to the Pennsylvania Department of Health, Division of Long Term Care, notification of a change in ownership. On closure of the Praxis facility, all persons were ter- minated. Several of those terminated were rehired to close out, catalogue, and file all medical records, and to paint and prepare the facility for transfer of its possession as a skilled nursing facility to the purchaser . During July and August, while closed, the purchaser was responsible for the facility's mortgage payments and for the provi- sion of security services . Respondent waited on the pur- chaser to fulfill its promise to purchase . However, it failed to consummate the purchase . On 30 August Re- spondent accordingly abrogated the sales agreement on nonperformance of the purchaser as originally agreed. Throughout September, Respondent unsuccessfully solic- ited sales offers from other prospective buyers. Because of the slow pace of unfruitful sales negotiations, Re- spondent decided that it could not continue to absorb the cost of maintaining an idle building and therefore it de- cided to reopen the facility and to operate it as a skilled nursing home. In late October 1984, Respondent had commenced the necessary licensing application procedure . A state license dated 18 November 1985 was issued to Morton Develop- ment Corporation to operate the Praxis facility as a health facility for a maximum of 91 persons requiring skilled care after necessary physical requirements were met. Structural changes to the facility were effectuated at a cost of about $130,000. The care of mentally retard- ed persons required physical equipment and accommoda- tions that were not useful for a skilled nursing home, and had to be eliminated or modified. The upper floor had maintained a facsimile of self-contained apartments for which the retarded could experience a final transition to near normal living conditions . This and all other thera- peutic equipment incidental only to the rehabilitation of the mentally retarded were eliminated and/or sold. Kitchen facilities, sofa beds, and dining room furniture were sold. Also body exercise equipment unusable by a frail, elderly resident was removed. Equipment was pur- chased and modifications to the building were effected to accommodate geriatric care as required by the state li- censing authority . Handrails were installed . Therapy rooms were redesigned and enlarged . Changes were made to the sprinkler system and to the 'eating, ventila- tion, and air-conditioning . Geriatric nursing equipment was acquired, e.g., wheelchairs, geriatric chairs, oxygen therapy equipment, sterile dressing supplies , tube feeding equipment, etc. Special facilities were IPquired for wheelchair-bound residents. A bedside nurses' call system was required . Second and third floor nurses sta- tions were constructed. A multitude of other modifica- tions were also ordered by state inspecting persons. On 6 November 1985 Respondent reopened the facility and Praxis Nursing Home commenced residential care for a frail, elderly, infirm, and chronically physically ill, "geriatric" population, the majority of whom are be- tween the ages of 70 and 80 years . Subsequently, in March 1986, Praxis Nursing Home was licensed as a skilled nursing facility for a maximum of 61 persons and as an intermediate care facility for 30 patients. In No- vember 1986, a license was issued to authorize skilled care for 61 patients and intermediate care for 49 patients for a maximum population of 110 patients . There are cur- rently some residents 60 years or more of age with pflys- ically debilitating ailments, as well as a few younger per- sons in a drug-abuse caused comatose state. Praxis Nursing, unlike Praxis, is not totally state- funded, but rather is paid directly by 80 percent of its private paying patients, and only 20 percent of patients are cared for at the expense of state or Federal funds at the rates of $50.08 for skilled care and $42.24 for inter- mediate care per patient . Under the state medicaid system, Praxis had been reimbursed at daily rates per resident varying from $88.50 to $95, and its budget, unlike Praxis Nursing, was prospectively determined in negotiation with the State Office of Mental Retardation which in turn submitted its recommendation to the ap- propriate section of the state department of welfare. On commencement of operations, Praxis Nursing em- ployed 11 service and maintenance employees, all of whom had been previously employed by Praxis at its closure, and it employed 9 supervisors , managers, and professionals, 5 of whom had been employed by Praxis. One former service and maintenance employee was sub- sequently hired at Praxis as a supervisor. All persons who had previously worked for Praxis and were known to be unemployed were solicited by Respondent for re- training and reemployment by Praxis Nursing . About 25 percent of the Praxis employees had found other em- ployment. Those hired by Praxis Nursing underwent an initial 2-day training followed by an on-the-job 90-day training period, as a precondition to permanent employ- ment. Praxis Nursing employs service and maintenance em- ployees in the following classifications : dietary aides, housekeeping aides, laundry aides, activities aides, nurses aides, maintenance employees, and cooks. The supervi- sors, managers, and professionals employed are: adminis- trator, dietary services director, dieticians , housekeeping and laundry services director , plant operations director, nursing services director, nurses, health services supervi- sor, and medical records director. Much of Praxis' operations had been effectuated by "committees." Patient progress was reviewed by a be- MORTON DEVELOPMENT CORP 389 havior management committee by which Praxis profes- sionals could ascertain whether patients were receiving appropriate care and guidance toward normal behavior patterns . At Praxis Nursing that committee was eliminat- ed. However, under Praxis Nursing a Utilization Review Committee is composed of doctors who had no relation- ship to the patient and who make an objective review of their physical , medical, and nursing needs and who make recommendations concerning continued residence or dis- charge. A pharmacy committee was continued but the nature and depth of its activities increased . The infec- tions control committee also survived but it also assumed much more extensive operations in the monitoring for in- fections and contagious diseases . There is a far greater emphasis on medical services in Praxis Nursing, due of course to the nature of the patients, a large proportion of whom are convalescent or suffer from illness and physi- cal infirmity. Whereas Praxis was required to maintain one nurse per shift in the facility and employed a maxi- mum of 6 nurses, Praxis Nursing currently employs 15 professional nurses and is in the process of soliciting the employment of more nurses. The nurses aides employed by Praxis Nursing who re- placed the Praxis "living unit aides" provide for patients' .recuperative and basic physical needs, such as bathing, grooming , and dressing . But they are also involved in the monitoring of their physical conditions . They assist nurses in patient admission , transfer, and discharge; the recording of vital signs and measurement and recording of intake and output ; collection of specimen, the chang- ing of dressings , bandages, colostomy bags, 'and drainage bottles; the treatment and examination of patients . Praxis Nursing residents' programed activities are limited to a maximum of 1 hour in the morning and 1 hour in the afternoon and involve passive or very limited patient in- volvement. Praxis Nursing, like Praxis , employs housekeeping and maintenance employees who clean and maintain the premises. It, like Praxis, employs cooks who prepare and serve food, clean the equipment, and purchase and requi- sition supplies. The Praxis Nursing dietary aides, like those employed by Praxis, assist the cook in the prepara- tion and distribution of food . The daily execution of the duties of persons in these classifications was directly and significantly impacted by the change in the nature of the patient resident . As Respondent points out, housekeeping and repair of facilities performed by Praxis employees were much in the nature of cleaning up after a large population of hyperactive small children . Cleaning is simplified and repair work is drastically reduced There is no longer a high incidence of property damage caused by residents' tantrums. The Praxis Nursing housekeeper must clean bedrooms that were in large part cleaned by active Parxis residents as part of behavioral training. Similarly, the Praxis Nursing laundry employees assume total responsibility for laundering , which active Praxis residents were trained to perform by themselves Because half of Praxis Nursing's patients require special diets, a variety of meals must be prepared by the cooks under the direction of a newly hired dietician. The administrator of Praxis Nursing was not previous- ly employed by Praxis. Praxis Nursing now utilizes the services of a medical director for which a position did not exist at Praxis . Although a number of Praxis' super- visory, managerial, or professional positions survived as such under Praxis Nursing, many did not , i.e., resident life services director , community services director, two community services assistants, the residential services di- rector, program ' assistants, the health services director, the vocational services director , the vocational services assistant, the certified occupational therapy assistants, special education teachers, and qualified mental retarda- tion professional who also served as day care services di- rector, which position was also eliminated . Under Praxis Nursing there are three new departments, medical records, social services, and activities, the last of which includes a director , activity aides, and volunteers. Praxis Nursing, unlike Praxis, has a newly hired director of nursing. Praxis Nursing also employs a newly hired health services supervisor. On 15 November 1985 the Union demanded recogni- tion as bargaining agent for Praxis Nursing service and maintenance employees . At that time all 11 service and maintenance employees had been employed by Praxis and had been represented by the Union . Subsequent to that date, the employee complement of Praxis Nursing has risen in proportion to the rise in patient population. On 11 November 1985 there were . six patients in the fa- cility. During the payroll period immediately preceding this trial, there were 75 patients in residence . Respond- ent, although hampered by a shortage of nurses, is in the process of expanding to 110 patients, for which maxi- mum number Praxis Nursing is licensed to accommodate. By 7 February 1986, Praxis employed a total of 20 former unit employees of a total of 28 service and main- tenance employees to accommodate 27 patients. By 7 March 1986, there were only 19 of 39 service and main- tenance employees who were previously employed and as of 23 January 1987,-that number of former employees declined to 14 of a total of 67 unit employees to accom- modate a population of 75 patients , which had in No- vember 1986 reached a high of 90 The proportion of new nonunit persons increased as the total number rose to 24. C. Analysis The General Counsel argues that the issue in this case is the same issue that was resolved in Van's Packing Plant, 211 NLRB 692 (1974). In that case it was found that the employer was not obliged to continue recogni- tion of the union in view of a substantial change in its operations to a retail meat market from a slaughtering and packing plant which resulted in a contraction of a number of employees and job classifications In that case the General Counsel had argued that the employer had operated at the same location with the same employees under the same contractual terms and employment con- ditions and that the change effected was merely a termi- nation of meat packing and slaughtering activities and an expansion of preexisting retail operations. In support of her position in this case , the General Counsel cites as her sole authority Custom Sheet Metal & Service Co., 243 NLRB 1102 (1979). It is asserted that in 390 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD that case "the Board held the Employer's change from building and construction contractor to a manufacturing company did not relieve the Employer from its obliga- tion to recognize and bargain with the Union." The cen- tral issue in that case, however, was whether the em- ployer violated the Act by unilaterally withdrawing from a building and construction multiemployer bargain- ing association and by refusing to execute a subsequent agreement between a union and that association. The em- ployer in that case raised multiple and alternative de- fenses, one of which was the allegation that the charac- ter of its business had changed so extensively from build- ing and construction to manufacturing at the time of its withdrawal from the association that its relationship with the union was no longer protected by Section 8(f) of the Act and thus it would have been a violation of Section 8(b)(2) of the Act for it to execute an agreement with a union without a demonstration of majority status. It was found that although the employer had been engaged pri- marily in building and construction work when it entered its first labor agreement, the nature of its work gradually evolved into that of manufacturing. However, as its busi- ness changed, the employer and the union changed the contract to accommodate the changing business, and by the time of the withdrawal from the association it had al- ready become a manufacturer that had recognized and contracted, with a union that had long since represented those manufacturing employees. The 8(f) related defense was rejected. Thus, the issues in that case and the facts are distinguishable from those raised herein where the Union had not been recognized, nor had represented em- ployees after the change in operations. The General Counsel argues that there was' an insuffi- cient change in Respondent's business to warrant a with- drawal of recognition from the Union. It is asserted that although the daily activities and the treatment of patients changed, the unit employees nonetheless retained "identi- cal responsibilities." It is argued that housekeeping and maintenance employees still are responsible for cleaning, maintaining, and upkeeping the premises, that cooks still prepare and cook food, that dietary aides still assist in the preparation and serving of meals, and that the work of living unit aides is performed by nurses aides 'who assume a mere increase in nursing functions. Thus, it is argued that as did the living unit aides, the nurses aides are responsible for assisting patients in bathing, dressing and grooming skills, and making patient beds. It is similarly argued that the responsibilities of non- unit persons "remained identical with minor changes in job titles." It is further argued that Respondent's solicita- tion of employment of all nonemployed former employ- ees is tacit recognition that their duties for Praxis Nurs- ing would not involve significant changes. With respect to the 4-month hiatus in operations, the General Counsel points out that the decision to assume on itself a nursing home operation occurred "only two months after the closing of Praxis and only within a couple of weeks from the cancellation of the agreement of sale." With respect to the physical plant changes, the General Counsel argues that the changes in the facility were "mainly cosmetic" and that the "addition of hand rails, redesign or enlargement of therapy rooms, the pur- chase of geriatric equipment and furniture were neces- sary to obtain approval from the Commonwealth to con- vert to a geriatric nursing home " There is no explana- tion offered by the General Counsel about why those changes mandated by the State and deemed by the State to be essential Ao the operation of a geriatric nursing home should be construed as "cosmetic." The General Counsel implicitly takes the position that the issue does not involve the question of successorship. From' the General Counsel's viewpoint there is no suc- cession, i e., the owner/operator is the same and the busi- ness remained essentially the same. Therefore the Gener- al Counsel does not address those cases involving succes- sorship evaluation, many of which are cited by Respond- ent, in which analysis is made regarding whether the em- ploying industry, has changed as well as the ownership and ultimate management, i.e., the extent to which the same employees are engaged in the same work tasks for the same kind of enterprise at the same place with the same supervisors, producing the same product for the same customers, etc. Respondent's ratiocination would not preclude a successorship analysis merely because the ownership remains the same. Respondent would view the ownership and management as not decisive or sole factors in 'the determination of whether one business is a successor to another enterprise. Thus its cites Radiant Fashions, 202 NLRB 938 (1973), and Magnolia Manor Nursing Home, 260 NLRB 377, 381-382 (1982), in which the Board looks to a multiplicity of factors in its resolu- tion of the question of whether the employing industry remains the same and thus a new employer is a successor employer, i.e., continuity of the same business operation (hiatus and employee expectation of continued employ- ment or reemployment), continuity of employees, super- visors, job tasks, facilities and equipment, product or service, and customers' or market served. In both cases there was a change in ownership and ultimate manage- ment, i.e., a sale , and purchase. In Radiant the Board found that because of a 3-month hiatus in operation during which employees who had received severance pay and who possessed no expectation of recall and be- cause of the absence of significant continuity in custom- ers and, markets, that there occurred a purchase of assets rather than a purchase of an ongoing business and there- fore no successorship resulted despite the fact that the employees hired by the purchaser in the first 3 months of operations were all former employees who worked in the same altered plant. The Board reiterated its policy that the scrutiny of continuity of the employing industry re- quires an investigation of the "totally of circumstances surrounding the transfer." (See also Blazer Corp, 236 NLRB 103 (1978).) In the Magnolia case, successorship was determined on a finding of continuity in location, equipment, nature of business, number and identity of pa- tients "and level of care and funding." (See also Lemay Caring Centers, 280 NLRB 60 (1986).) Respondent, in its argument that Praxis and Praxis Nursing are discrete and not continuous business or suc- cessor employers, alludes to those factual findings above, which of course stress the differences in the critical areas of evaluation. With respect to employment continuity, it MORTON DEVELOPMENT CORP. 391 argues that such continuity must be measured at the time '"when a demand for bargaining has been made and a representative complement of an employer's work force is on the job.' Aircraft Magnesium, a division of Grico Corp., 265 NLRB 1344, 1345 (1982)." It further asserts that in that case the Board examined the size of the pred- ecessor's work force in evaluating whether the successor had a representative complement of employees when recognition was demanded . As I read its decision, the Board noted the predecessor employment complement and found that the successor employee complement con- tained a majority of former employees through the first 2 weeks after the demand, and observed that a demand for recognition is "continuous and need not be repeated" (ci- tation omitted). It did not deal with the issue of a future anticipated increase in employee complement. Respondent cites Royal Vending Services, 275 NLRB 1222 (1985), in which decision an examination was made by Administrative Law Judge Timothy D. Nelson, adopted by the Board, as to the full complement issue relied on by the Respondent therein who cited NLRB v. Pre-Engineered Building Products, 603 F.2d 134 (10th Cir. 1979), and Pacific Hide & Fur Depot v. NLRB, 533 F.2d 609 (9th Cir. 1977), for the position that the Board must examine whether the employer had reached a full com- plement of employees. Judge Nelson found that the facts in Royal Vending were distinguishable from those relied on by those circuits which had refused enforcement of the Board's orders. Judge Nelson noted that in Pacific Hide a predecessor's employee complement had been drastically cut prior to sale and thereafter steadily en- larged to its old strength within less than 60 days by the purchaser. He observed that in the Pre-Engineered case the new owner acquired only 4 employees compared to a former complement of 41 of an essentially collapsed business. Judge Nelson found that the facts before him did not entail a collapsed operation nor that there would be "materially enlarged operation within the the relative- ly near future." He refused to conclude that the Re- spondent was not in full operation on the demand date because it had hopes of a future expansion . Furthermore, Judge Nelson took cognizance of the more recent Ninth Circuit decision in Premium Foods v. NLRB, 709 F.2d 623 (9th Cir. 1983), in which the court explained that the "full complement" standard which "attempts to define when the makeup of the controlling majority is deter- mined" does not mandate the deferral of an analysis until the conclusion of the employer's hiring of all unit em- ployees, but that it rather requires "striking a balance be- tween the objective of allowing the maximum number of employees a voice in selecting their bargaining represent- ative and the goal of assuring that the employees have representation as quickly as possible." It noted that "even if the successor [to a collapsed predecessor] has plans for expansion , a representative complement is usu- ally present on the date the employer begins produc- tion." The court found that within 1 month of resump- tion of operations the successor had reached the prede- cessor's optimum complement, and that planned expan- sion entailed a 2-year period of time whereas the em- ployee complement remained constant for 5 months. The court was satisfied with the Board's finding that the suc- cessor had employed a substantial and representative complement of employees at the time of recognition demand. In this case I find that Praxis Nursing employed after 3 months of operation a substantial and representative number of employees, of which a majority were former employees, and that Respondent's intent had been to recall as many of the former unit employees who were available and willing to accept its solicitation of reem- ployment. It was not until some point in the fourth month that the proportion of former employees did not continue to rise with the total employment. Accordingly, I do not agree with the Respondent that discontinuity of former employee complement is a decisive factor in this case. The Respondent also cites the factor of hiatus in oper- ations as a significant indicia of an absence of identity of employing industry. Clearly the employees understood that their relationship to Praxis was to be severed by virtue of the negotiations with the Union, the receipt of severance pay, and Praxis' announcement that the facility would be sold to a third party whose employment inten- tions were unknown. That severance of relationship was premised on an explicit condition subsequent , i.e., the sale. But the sale was aborted and that particular condi- tion subsequent was never realized . Moreover, Praxis Nursing, by its prior owner and operator, immediately sought out the former employees and solicited their serv- ices. However, reemployment was also conditioned on a satisfactory conclusion of a period of retraining. Respondent cites no instance in which the Board has explicitly applied the successorship analysis to a factual configuration in which the owner/operator of a business remained the same. In Molded Fiber Glass Body Co., 182 NLRB 400 (1970), an employer closed its plant for eco- nomic reasons during the initial certification year in which the union and employer had failed to reach con- tractual agreement. That employer in good faith intended to sell the business . For bona fide reasons it changed its intent and for lawful nondiscriminatory reasons resumed operations with new employees after the lapse of the cer- tification year and refused the Union's recognition demand . The General Counsel contended that the em- ployer's intent to reopen was realized prior to the lapse of the certification year which therefore should be ex- tended or a presumption be made of majority status. The Board disagreed and found that no bargaining obligation survived. In Hendricks-Miller Typographic Co., 240 NLRB 1082 (1979), the Board took great care to distinguish a succes- sorship situation from that of stock transfer in analyzing whether an employer continued to be a member of a bar- gaining association or stock acquisition. In the former it noted that there was substitution of employers, each having no mutual connection . With respect to stock transfer, it stated there was a difference "in genesis" from successorship because of the continuation of a single legal entity. It noted, however, that the "second- ary characteristics" of a successor are often identical to those of a stock transfer, i.e., continuity in operation, work force, etc. The Board rejected the administrative 392 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD law judge's application of a successorship analysis to the case before it. In Cagle's Inc., 218 NLRB 603, 605 (1975), the Board rejected an alter ego analysis and held that a sounder analysis required application of successorship principles, in a situation involving a business in bankruptcy that ceased to exist as an independent viable business but which reemerged after a year in drastically changed form under new ownership. More pertinent to the facts of this case than a succes- sorship analysis is the alternative issue explicitly raised by the Respondent, i.e., whether Praxis Nursing is the disguised continuation of Praxis. The Board set forth a concise statement of the law with respect to alter ego or single employer status as fol- lows in Airport Bus Service, 273 NLRB 561 (1985): It is well established that in determining whether two or more nominally separate businesses operat- ing simultaneously are sufficiently interrelated so that they may be treated as a single integrated busi- ness enterprise, the Board looks to four principal factors: common management, centralized control of labor relations, interrelation of operations, and common ownership or financial control. No single criterion is controlling, although the first three fac- tors, which reveal the degree of operational integra- tion, are more critical than common ownership. Radio Union v. Broadcast Service, 380 U.S. 225 (1965); Bryar Construction Co., 240 NLRB 102, 104 (1979). Similarly, in making the related, but never- theless distinct, determination of whether a business is the alter ego or "disguised continuance" of its predecessor, the Board will find alter ego status where the record demonstrates "substantially identi- cal" management, business purpose, operation, equipment, supervision, customers, and ownership between the two businesses. Howard Johnson Co. v Hotel & Restaurant Employees, 417 U.S. 249, 259 fn. 5 (1974); Crawford Door Sales Co., 226 NLRB 1144 (1976). Respondent points out that the Board also considers whether "the purpose behind the creation of the alleged alter ego was legitimate or whether, instead, its purpose was to evade responsibilities under the Act." Watt Elec- tric Co., 273 NLRB 655, 658 (1984). (See also cases cited in the analysis in Pinter Bros., 263 NLRB 739 (1982).) In this case there is no suggestion of bad-faith motivation. The General Counsel does not dispute Respondent's argument that mere identity of ownership is not diaposi- tive of this case. The General Counsel, however, does not agree that the owner/operator is engaged in a differ- ent business operation such as cited by Respondent in Co-op Trucking Co., 209 NLRB 829, 830 (1974). (Sepa- rate corporations were involved in that case.) Regardless of what categorical analysis is applied to these facts, the issue is as the General Counsel framed it, did the owner/operator engage in a business sufficiently different or changed to warrant nonrecognition of the Union. I conclude, however, that allusion to the Board's successorship and alter ego analysis is justified in order to evaluate whether the business has changed so signifi- cantly as to have necessarily altered the relationship be- tween the owner/operator and the former employees, and transformed it to one of new employer and new em- ployee. If a new relationship has arisen from a context of a new employment environment in a substantially differ- ent business, then there is no warrant to imply the Union's continuing majority bargaining agent status. Compare Food & Commercial Workers Local 152 (Spencer Food) v. NLRB, 768 F.2d 1463 (D.C. Cir. 1985), in which such analysis was elucidated by the court.) Certain factors appear to strengthen the General Counsel's theory of prosecution, i.e., identity of owner/operator, location of facility, the immediate em- ployment, and the general nature of business, i.e., health care services. I conclude, however, despite those factors, that the business of Praxis Nursing is so significantly dif- ferent from that of Praxis, and was instituted in such a context that the former employer/employee relationship was terminated and that thereafter a fundamentally new relationship was established. The General Counsel's analysis , although initially ar- resting, does not grasp the change in the employment re- lationship. It is true that much of the work tasks re- mained to be of the same general description , i.e., cooks still cooked, maintenance persons still cleaned and re- paired, and aides still aided patients . But the foregoing review of the specific differences in these tasks and obli- gations convinces me that the unit employees did not retain "identical responsibilities." I find that their work task changed so significantly as to render the work envi- ronment essentially changed in accordance with the dras- tic change in the type of patients served. It is totally un- supportable to assert that geriatric care is essentially comparable to care of the mentally retarded . Patients physically debilitated from the ravages of age, disease, or other bodily impairments require a wholly different ap- proach, not only in bodily care but in attitude of those who care for them . The bulk of the bargaining unit were living aides. They are now replaced by nurses aides on whom are thrust additional and different medically ori- ented responsibilities . The similarity of execution of duties by nurses aides to that of the living unit aides is for the most part limited to a very small proportion of patients, i.e., only the most profoundly mentally retarded population would require a comparable type of physical care required by the sedentary , passive geriatic resident. For one population the aide was obliged to induce a tranquilizing counterreaction to its hyperactivity that is completely absent from the other . The former population required work performance calculated to lead , teach, and channel behavior patterns and bodily movements of the physically unimpaired . The latter population is entirely quiescent but not mentally impaired from the evidence in the record. The geriatric population is there to receive physical care and not to be taught how to behave. Praxis provided a learning environment where the care was cal- culated to stimulate behavior. Even the other nonaide bargaining job classification work tasks and the nonunit persons' responsibilities were significantly altered by virtue of the change in the nature MORTON DEVELOPMENT CORP. 393 of the patients and the peculiarly different type of care required by them and the change manifested in the pa- tients' own lifestyle . This is clearly demonstrated in the foregoing factual recital . Thus either the former employ- ees now worked for a different supervisor , or the super- vision of the old supervisors changed significantly in nature and degree. Although the physical structure, i.e., the residence itself, remained the same, the changes to it were not "cosmetic" but were of such significance that if not ef- fectuated, Praxis Nursing would not have been permitted to lawfully operate as a nursing home . I must give defer- ence to the judgment of the Commonwealth of Pennsyl- vania that certain types of physical accommodations are not cosmetic but are necessary to the proper dispensation of nursing care. That is to say, a geriatric population re- quires physical accommodations that are peculiar to the type of care dispensed to it. With respect to the General Counsel 's assertion that the hiatus was not lengthy, it is the effect on the employ- ment expectation that is of critical importance , not the duration itself. The employees understood that their rela- tionship was being severed. In fact severance pay was issued. Many employees obtained other employment. One condition of that severance of relationship was the impending sale which later aborted . However, employees must have been made aware that the business itself would change. Although no new employer assumed con- trol of the business, the unemployed former employees were offered jobs on the condition that they would suc- cessfully undergo a period of retraining. Therefore merely because the former owner/operator of Praxis as- sumed control of the nursing home, it must have been clear to the former employees who had been solicited that reestablishment of the old relationship was not auto- matic. Rather, it must have been apparent that a new em- ployment relationship was being premised on their ability to be trained for new work tasks in a new employment setting where they cared for a different type of patient. Merely because the employer sought out the former em- ployees and was confident that they could be retrained, is not evidence that the tasks were identical as the Gen- eral Counsel suggests. It is evidence, however, of the good faith of the Respondent, which is in fact conceded, that it did not try to avoid appearances of successorship by hiring all new employees. The evidence in the record establishes that the Respondent desired and sought out the former employees, but that not all former employees returned under the proffered new conditions. The record also established that an indeterminate number of former employees were terminated because of their inability to satisfy the training period requirements . Thus it is clear that the employer/employee relationship in Praxis Nurs- ing is a new relationship. Conclusion I am in agreement with the Respondent that Praxis Nursing is a different business that provides a different service to a different kind of client drawn from a differ- ent market, and who employed former Praxis employees under a new employment relationship that precluded any continued obligation to recognize the Union as the as- sumed majority bargaining agent . Accordingly, I recom- mend the following' ORDER The complaint is dismissed. I 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. e