Blue & White Cabs

BLUE & WHITE CABS 1047 Pioneer Holding Company of Minnesota d/b/a Blue & White Cabs and Guild of Taxi Drivers and Associated Workers, Local 3025, Brotherhood of Railway, Airline and Steamship Clerks, Freight Handlers, Express and Station Employ ees, AFL-CIO Pioneer Holding Company of Minnesota d/b/a Blue & White Cabs and Blue & White Service Cor poration and Guild of Taxi Drivers and Associ ated Workers, Local 3025, Brotherhood of Rail way, Airline and Steamship Clerks, Freight Handlers, Express and Station Employees, AFL-CIO Cases 18-CA-7822 and 18-CA- 8006 December 13 1988 DECISION AND ORDER BY CHAIRMAN STEPHENS AND MEMBERS JOHANSEN AND HIGGINS On September 19 1984 and February 8, 1985 Administrative Law Judge William F Jacobs issued the attached decision and erratum respec tively The General Counsel filed exceptions and a supporting brief and the Respondent Blue and White Service Corporation filed an answering brief to the General Counsels exceptions 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, and conclusions as modified below, but not to adopt the recommended Order The judge dismissed the complaint in its entirety finding that Respondent Service (Service) is not the alter ego of or the successor to Respondent Pioneer (Pioneer), and that Respondent (collective ly Pioneer and Service) did not violate Section 8(a)(5) and (1) of the Act by the following acts de manding that the new collective bargaining agree ment include a provision restricting the Union s representation unilaterally refusing to submit and then delaying remittance of union dues unilaterally operating a committee to arbitrate cabdriver dis putes, unilaterally transferring unit work to super visors, canceling the employees health insurance plan retroactively , without notice to the Union de manding that the Union agree to separate contracts for Pioneer and Service covering unit employees and placing conditions on its acceptance of the Union s unconditional offer to return strikers to work We adopt the judges findings in all re spects' except that we find merit in the General Counsels exceptions to the judges dismissal of the consolidated complaint allegation concerning the retroactive termination of the employees health in surance plan 1 The facts concerning the relationship between Respondent Pioneer and Respondent Service are as follows Respondent Pioneer was incorporated in 1965 as a holding company to own and operate Blue and White Taxi Company cabs Pioneer owned the cabs and employed and supervised the cabdrivers Lee Sherman and David Barnhard Pio neer s president and vice president respectively, owned minority shares of Pioneers stock Lee Sherman s grandfather and great uncle were Pio neer s majority shareholders In 1976 the Union organized certain employees including drivers and dispatchers, and the parties negotiated a contract That same year Pioneer began experiencing financial problems and sought to change its operations by leasing cabs instead of continuing the employer/employee relationship Although the contract permitted the leasing of cabs a city ordinance prohibited leasing and the city council refused to change the law without labor's consent The Union opposed any such change in the law In April 1982 as its financial problems mounted Pioneer formed Service as a nonprofit corporation to provide telephone answering radio dispatching advertising recordkeeping maintenance and relat ed services to taxicab owners Initially Sherman and Barnhart were the sole directors of Service and Pioneers shareholders owned Services stock The reorganization plan envisioned that Pioneer and its shareholders would sell their cabs to new owners along with one share of Service stock per cab 2 Ultimately Service would own no cabs but 1 In finding that Respondent Service is not the successor to Respond ent Pioneer we do not rely on the judge s findings of separate ownership since separate ownership is inherent in any successorship finding We agree with the judge that Service did not violate Sec 8(a)(5) and (1) by creating the Longhood Committee to arbitrate disputes among cabdnv ers However we do so for different reasons The judge found that be cause the parties bargained to impasse over the creation of the Commit tee its creation was lawful We note that the Longhood Committee was created solely to arbitrate problems concerning Service s cab owners and/or their drivers Because we find that Service is neither the alter ego of nor the successor to Pioneer and because Service does not have a separate bargaining relationship with the Union Service was not obhgat ed to bargain with the Union about the creation of the Longhood Com mittee Consequently any discussion of impasse in this regard is irrele vant We also note that even if a bargaining relationship existed between Service and the Union we would still dismiss the complaint allegation because it appears on this record that the cab owners and/or drivers are independent contractors See Checker Cab Co 273 NLRB 1492 (1985) No exceptions were taken to the judge s dismissal of the complaint al legation that the Respondent violated Sec 8(a)(5) and (1) of the Act by transferring unit work to supervisors 2 Pioneer was also to transfer certain assets (dispatching office and garage equipment and its radio) to Service in exchange for a note reflect Continued 291 NLRB No 147 1048 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD would instead provide only the dispatching serv ices described above to the new cab owner/ shareholders Thus Service would be owned by the cab owners and each cabdriver would be re sponsible to the cab owner/shareholder whose cab he drove The Union filed a grievance over Pioneers plan and the case went to arbitration On July 19 1982 the arbitrator issued a decision finding that Pio neer s action did not violate the parties labor agreement3 and that Pioneer was not prevented from selling its business 4 Thereafter Pioneer began selling its assets and Service was formally created In mid August 1982 Pioneer and its shareholder began selling their cabs along with one share of stock in Service Sales continued through May 1983 at which time all but one cab had been sold The General Counsel contends that an alter ego relationship existed between Pioneer and Service at the time the alleged unfair labor practices oc curred We disagree Because that particular period covers only the formative stages of Services exist ence limiting our focus on this transitional stage would ignore the evidence that by the time Serv ice had been fully phased in to carry out its intend ed purpose of providing dispatch and related serv ices to its shareholder/cab owners it was under different ownership and management than Pioneer Thus to restrict consideration of the alter ego issue to Services formation would distort the picture of Services essential identity and purpose Further it is undisputed that Service was openly created in 1982 when Pioneer was still operating and that Service was set up primarily to provide dispatching and related services for independently owned cabs and did not own or operate any cabs (Pioneer pri marily was in the business of operating cabs) It is also undisputed that Service was formed wholly for economic reasons and not for antiunion reasons In this regard Pioneer had been having financial difficulties since 1976 and was on the verge of fi nancial collapse when the owners of Pioneer estab lished Service as a nonprofit corporation with the idea that Pioneer would sell its cabs to independent contractors who in turn would acquire a share of stock in Service for each cab purchased Signifi cantly the sales of Pioneers cabs were not made to the owners of Pioneer or their agents and were mg the purchase price of the assets and enter into a lease arrangement with Service to operate jointly out of Pioneer s premises The record shows that Service did not intend to stay at this address The contract between the parties was due to expire August 15 The arbitrator also predicted that Service would not be the alter ego of or single employer with Pioneer after all the sales and transfers were completed The judge acknowledged that this was merely the arbitrators prediction and that he was not bound by it made at arms length It is also significant that ownership of Service changed with the sale and purchases of Pioneers cabs from the owners of Pioneer to the new owners of its former cabs that Service still owns no cabs and that Service func tions operationally as it has throughout its exist ence to provide dispatching and related services to cab owners and drivers Nor does the fact that Service and Pioneer shared common ownership and management during Services formative period establish an alter ego re lationship between the two companies 5 It is clear that any element of common ownership was tem porary as the owners of Pioneer intended and that they were fully cognizant that controlling interest in Service would pass to the purchasers of Pio neer s cabs as the sales of those vehicles pro gressed This in fact occurred By January 1983 the majority of the stock in Service was owned by per sons other than the owners of Pioneer and by May 1983 the latter retained at best merely a vestige of ownership in Service As for common management of Pioneer and Service that too proved to be transitory In Janu ary 1983 a new seven member board of directors was elected consisting of David Barnhart E Lee Sherman and five new owner/operators By the end of the summer of 1983 Barnhart and Sherman who had served on the original board and had also served as officers and managers of Pioneer ceased holding office and managerial positions with Serv ice Further Services new board of directors had by then taken charge of the operations of Service and had acted independently of the interest of its former managers Thus the new directors had re fused on behalf of Service to sign certain con tracts initially executed by Barnhart and Sherman Moreover Pioneer eventually asked Service to vacate their common premises Finally Services provision of dispatching and related services to Pioneer from on or about Sep tember 26 1982 as well as to its shareholder/cab owners its hiring some of the former dispatching employees of Pioneer and its receipt of legal and other assistance from Pioneer in its formative stages do not establish that Service was formed for a purpose other than that which it was developed to serve and did actually serve nor do they blur the basic differences between the two companies and their separate operations With the exception of the former Pioneer employees 6 these common 5 See Electrical Workers Local 3 (Telecom Plus) 286 NLRB (1987) Eagle Express Co 273 NLRB 501 502 (1984) s We note that these employees became a minority of Services dis patching complement by the time of its evolution into an independently owned company BLUE & WHITE CABS elements were present only temporarily Further Service was compensated for its dispatching serv ices for Pioneer in the same manner as it was by others who used its services And the assistance Pioneer rendered Service at the beginning of its ex istence is insufficient by itself to establish that an alter ego relationship existed at any time Such as sistance as was provided is attributable to the fact that Service at its inception was formed and owned by the owners of Pioneer and managed by officers of the latter Owing to the special relationship that arose from these circumstances which as we have noted were temporary and transitional in nature the startup assistance provided Service by Pioneer does not outweigh the factors showing companies fundamentally different in business purposes and operations 7 Accordingly for the reasons noted above and those set forth by the judge we adopt his finding that Service is not the alter ego of Pioneer 2 The consolidated complaint alleges that Pio neer violated Section 8(a)(5) and (1) by the retroac tive cancellation of the employees health insurance benefits to May 30 1982 8 Pioneers employees had been insured by the New England Life Insurance Company In the spring of 1982 Pioneer was in poor financial condition and behind in its premium payments when it learned that the premiums would be almost doubled That summer Pioneer advised the Union during contract negotiations that it would discontinue the employees health insurance benefits because of its financial condition During negotiations Pioneer proposed managing an IRA for its employees and contributing a nominal monthly sum toward health insurance in exchange for the Unions giving up its demands for contin ued health insurance coverage On September 20 Pioneer gave the Union 10 days to accept its pro posal or it would cease making payments Subsequently Pioneer decided to cancel the policy after learning that if it simply ceased paying the premiums and did not cancel the policy the in surance company could conceivably continue the policy for years and attempt to collect past premi urns By letter dated November 18 Pioneer in formed its employees that it was canceling the in surance policy retroactive to May 30 During negotiations the Union was aware that Pioneer intended to cancel the health insurance however Pioneer never informed the Union that the cancellation would be retroactive and the Union was not advised of the retroactive cancella tion until after it became effective The judge ° Marino Electric 285 NLRB 344 (19 1987) L & J Equipment Co 274 NLRB 20 28 (1985) 8 All dates refer to 1982 unless otherwise stated 1049 found that the decision to cancel the health incur ance program was economically motivated that Pioneer bargained in good faith to impasse and that the claims of all employees were fully paid and thus no employee was adversely affected by Pioneers conduct Accordingly the judge dis missed the allegation The General Counsel while acknowledging that Pioneer was lawfully motivated in terminating the health insurance plan and that Pioneer gave notice to the Union and bargained to impasse in good faith before implementing its plan contends that Pioneers failure to notify the Union of the retroac tive cancellation of the health insurance plan which resulted in employees being without health insurance from May 30 to August 15 is unlawful We find merit in the General Counsels exception An employer may not unilaterally change the terms and conditions of employment of a mandato ry subject of bargaining after the expiration of a contract without giving the union notice and an opportunity to bargain about such changes 9 Here although Pioneer informed the Union of its desire to discontinue the employees health insurance and the parties bargained to impasse over Pioneer s proposal Pioneer never informed the Union of its decision to make the cancellation of the insurance policy retroactive to May 30 thereby leaving em ployees without insurance coverage for 2 1/2 months Although no employee suffered any finan cial harm as a result of the retroactive application of the cancellation that is happenstance and it cannot be gainsaid that Pioneer failed to satisfy its statutory obligation to notify the Union of the ret roactive nature of the termination of the health in surance benefit Therefore we find that by failing to notify the Union that the employees health in surance was canceled retroactively Respondent Pioneer violated Section 8(a)(5) and (1) of the Act 10 3 The Union commenced a strike against Pio neer on August 16 The judge found and we agree that the strike was neither caused nor prolonged by any unfair labor practices and therefore it was at all times an economic strike The judge also found and we agree that Pioneer did not unlawfully impose conditions on its acceptance of the Union s unconditional offer to return the strikers to work See Schmidt Tiago Construction Co 286 NLRB 342 (1987) ° We have not included a make whole remedy section because the judge found and the General Counsel admits that no employee was ad versely affected by the retroactive cancellation We also have not includ ed a provision requiring Pioneer to bargain at the request of the Union with respect to the decision to make the cancellation retroactive in light of our finding that the Respondent lawfully bargained to impasse over its decision to cancel the health insurance benefit 1050 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD On January 7 1983 the Union and Pioneer met at the Federal Mediation and Conciliation Services office Union Representative Say indicated that the Union wanted to find an orderly way of returning to work and suggested that the seniority system be used Pioneers vice president, Barnhart rejected that proposal and stated that the people who went on strike did not have seniority and that he favored those people who worked during the strike and saved the Company Say protested claiming that Barnhart was penalizing strikers for exercising their right to strike and Barnhart admitted the truth of that accusation Later in the meeting that day, the Union present ed Barnhart with a letter stating an unconditional offer on behalf of all strikers to return to work Sometime after the meeting ended, Barnhart phoned Say and stated according to Say that [W]e re going to accept your unconditional offer on two grounds number one you [will] have to on your stationary [sic] write a press release number two [we 11] have to work out a back to work agreement and a signed contract Say re plied that Barnhart was placing conditions on the unconditional offer and rejected Barnhart s re sponse On January 10 Barnhart sent the Union a letter which stated We accept your unconditional offer for all strikers against Pioneer Holding Company of Minnesota to return to work Our acceptance is subject to your execution of a written back to work agreement and your execution of a written contract which we are in the process of preparing That same day the Union filed a charge in Case 18-CA-8006 On January 13 Barnhart phoned Say and said in effect that Pioneer was no longer plac ing conditions on its acceptance of the uncondition al offer and referred specifically to a back to work agreement and a press release Barnhart also stated however that he would not be reinstating strikers because he would not be hiring any employees 11 The judge viewed Barnhart s and Say s discus sions as negotiations for a strike settlement and concluded that Pioneers January 7 demands in eluding the condition placed on the striking em ployees recall rights were lawful The General Counsel continues to argue that the strike was an unfair labor practice strike and there fore the striking employees should have been rein stated on the unconditional offer to return to work The General Counsel also specifically excepts to 11 Pioneer did not recall any striking employees or hire any other em ployees after the strike ended the judge s finding that the Respondent did not un lawfully impose as a condition for rehiring that nonstriking employees have supersenionty 12 We have found that the strike was an economic strike It is well settled that absent legitimate and substantial business justification an employer may not attach conditions to accepting an unconditional offer to return to work on behalf of economic strikers 13 In the instant case the evidence as set forth above reveals that Barnhart s demand that employees be recalled on the basis of shifts worked since August 15 because he favored those employ ees who did not go out on strike preceded the Union s unconditional offer to return to work The record provides no basis for finding that Pioneer insisted on its seniority proposal after the Union made the unconditional offer Further any doubt that the Union might still have entertained con cerning this proposal would likely have been dis pelled by Barnharts statement to Say on January 13 that Pioneer no longer placed conditions on its acceptance of the offer Accordingly we find no merit in the General Counsels exceptions 14 ORDER The National Labor Relations Board orders that the Respondent Pioneer Holding Company of Minnesota Minneapolis Minnesota its officers agents, successors and assigns shall 1 Cease and desist from (a) Refusing to bargain collectively with the Guild of Taxi Drivers and Associated Workers Local 325 Brotherhood of Railway Airline and Steamship Clerks Freight Handlers Express and Station Employees AFL-CIO as the exclusive rep resentative of the employees in the appropriate unit concerning the decision to cancel the employ ees health insurance retroactively (b) In any like or related manner interfering with restraining or coercing employees in the ex 12 The General Counsel has not excepted to the judges finding that the other conditions imposed by Pioneer-a back to work agreement and a union press release-were not unlawful because they were retracted shortly after being made 19 See Lindy s Food Center 232 NLRB 1001 1008 (1977) 14 The General Counsel also contends in her exceptions that Pioneer violated Sec 8(a)(5) of the Act by giving superseniority to replacements and taking away the seniority of striking employees during negotiations At fn 4 of his decision the judge found it unnecessary to make a finding on this issue because this allegation was not made in the consolidated complaint but was made in the General Counsels brief to the judge We will rule on this issue since circumstances surrounding this issue were fully litigated and are referred to in the judge s decision in the paragraphs beginning with On November 9 and A bargaining session was held on November 17 Southwire Co 282 NLRB 916 fn 12 (1987) After a careful examination of these circumstances we find that the General Counsel has failed to demonstrate that Pioneer insisted on such a plan and note that because Pioneer told the Union that it would not hire any new employees or recall strikers it effectively withdrew its proposal See Gehnrich & Gehnrich Inc 258 NLRB 528 fn 2 (1981) BLUE & WHITE CABS ercise of the rights guaranteed them by Section 7 of the Act 2 Take the following affirmative action neces nary to effectuate the policies of the Act (a) Post at its facility in Minneapolis Minnesota copies of the attached notice marked Appen dix 15 Copies of the notice on forms provided by the Regional Director for Region 18 after being signed by the Respondents authorized representa tive shall be posted by the Respondent immediate ly 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 material (b) Notify the Regional Director in writing within 20 days from the date of this Order what steps the Respondent has taken to comply 16 If this Order is enforced by a judgment of a United States court of appeals the words in the notice reading Posted by Order of the Nation al Labor Relations Board shall read Posted Pursuant to a Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board APPENDIX NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government The National Labor Relations Board has found that we violated the National Labor Relations Act and has ordered us to post and abide by this notice WE WILL NOT refuse to bargain collectively in good faith with the Union as the exclusive repre sentative of our employees in the appropriate unit concerning our decision to cancel employees health insurance retroactively 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 PIONEER HOLDING COMPANY OF MINNESOTA Marlin 0 Osthus Esq for the General Counsel Fredrick E Finch Esq of Minneapolis Minnesota for Respondent Pioneer Holding Company Robert J Mdlavetz Esq of Crystal Minnesota for Re spondent Blue & White Service Corporation Richard H Say of Elk River Minnesota for the Charg ing Party DECISION STATEMENT OF THE CASE 1051 WILLIAM F JACOBS Administrative Law Judge This case was tried before me on January 3 4 and 5 1984 at Minneapolis Minnesota The charge in Case 18-CA- 7822 was filed August 13 1982 by Guild of Taxi Driv ers and Associated Workers Local 3025 Brotherhood of Railway Airline and Steamship Clerks Freight Han dlers Express and Station Employees AFL-CIO (the Union) The original charge in Case 18-CA-8006 was filed January 10 1983 and amended January 13 1983 by the Union On September 30 1983 the Acting Re gional Director for Region 18 issued an order revoking approval of and vacating and setting aside settlement agreement in Case 18-CA-7822 dated September 30 1982 and simultaneously issued an order consolidating cases consolidated complaint and notice of hearing in Cases 18-CA-7822 and 18-CA-8006 The consolidated complaint alleges violations of Section 8(a)(1) (3) and (5) of the National Labor Relations Act More particu larly the consolidated complaint alleges that Pioneer Holding Company of Minnesota (Pioneer) established and commenced the operation of Blue & White Service Corporation (Service) as a subordinate instrument to and continuation of Pioneer and thereafter Pioneer and Serv ice operated as alter egos and as a single employer or in the alternative' with Service operating as a successor to Pioneer that Pioneer and Service collectively (Respond ent) refused to bargain collectively and in good faith with the Union as the exclusive collective bargaining representative of Respondents employees by 2 demand ing as a condition of consummating any collective bar gaining agreement that the Union agree to include in such agreement a provision restricting the Union to being the exclusive collective bargaining representative only of its members bargaining to impasse over this demand thereby withdrawing recognition of the Union refusing unilaterally to submit then delaying remittance of union dues to the Union unilaterally terminating its employees health insurance plan unilaterally offering to forward deducted union dues to its employees rather than to the Union unilaterally creating a committee to arbitrate disputes among drivers un laterally transferring unit work to supervisors demanding as a condition of consummating any collective bargaining agreement that the Union agree to separate contracts with Pioneer and Service for employees in the unit thereby withdrawing recognition of the Union as the exclusive collective bar gaining representative of the employees in the unit that the Respondents unfair labor practices caused and pro longed an unfair labor practices strike and that the Union made an unconditional offer on behalf of the stnk ' The names of the Respondents were amended at the hearing 2 Although not alleged in the complaint as a separate violation of Sec 8(a)(1) and (5) counsel for the General Counsel in his brief requested that I find that on or about November 17 1982 Respondent instituted a proposal eliminating seniority earned by sinking employees and giving strike replacements supersenionty In my view under the circumstances present in this case to grant the request would be unjust and would not serve the interests of judicial economy or orderly adjudication Sea ward International 270 NLRB 1034 (1984) 1052 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD ing employees to return to work but that Respondent failed and refused to reinstate the striking employees unless and until the Union agreed to supersenionty for striker replacements to a letter for distribution to the press to a written back to work agreement and to accept a written contract prepared by Respondent Pioneer and Service in their answers 3 denied the commission of any unfair labor practices All parties were represented at the hearing and afford ed full opportunity to be heard and to present evidence and argument Briefs were filed by all parties On the entire record my observation of the demeanor of the witnesses and after giving the consideration to the briefs I make the following FINDINGS OF FACT I THE BUSINESS OF THE RESPONDENT Pioneer a Minnesota corporation with an office and place of business in Minneapolis Minnesota has been at all times material engaged in the furnishing of taxicab transportation and related services During the calendar year ending December 31 1982 Pioneer in the course and conduct of its business operations derived gross rev enues in excess of $500 000 During the same period Pio neer in the course and conduct of its operations pur chased and received at its Minneapolis facilities products goods and materials valued in excess of $50 000 directly from points outside the State of Minnesota Pioneer is an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act Service a Minnesota corporation with an office and place of business in Minneapolis Minnesota has been at all times material engaged in telephone answering radio dispatching maintenance and related services in connec tion with the operation of taxicabs as well as the furnish mg of taxicab transportation Annually Service in the course and conduct of its business operations derives gross revenues in excess of $500 000 and purchases and receives at its Minneapolis facilities products goods and materials valued in excess of $7000 directly from points outside the State of Minnesota Service is an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act II THE LABOR ORGANIZATION INVOLVED The Union is a labor organization within the meaning of Section 2(5) of the Act III THE ALLEGED UNFAIR LABOR PRACTICES A Issues The issues as reflected by the allegations contained in and the amendments to the complaint and the answers there are whether 1 Service is the alter ego of Pioneer and both consti tute a single employer 2 Service is a successor to Pioneer 8 Respondents motions to amend their answers are granted 3 Respondent refused to bargain collectively and in good faith in violation of Section 8(a)(5) and (1) by (a) Demanding as a condition of consummating any collective bargaining agreement that the Union agree to include in such agreement a provision restricting the Union to being the exclusive collective bargaining repre sentative only of its members (b) Bargaining to impasse over this demand thereby withdrawing recognition of the Union (c) Unilaterally refusing to submit then delaying re mittance of union dues to the Union (d) Unilaterally terminating its employees health insur ance plan (e) Unilaterally offering to forward deducted union dues to its employees rather than to the Union (f) Unilaterally creating a committee to arbitrate dis putes among drivers (g) Unilaterally transferring unit work to supervisors (h) Demanding as a condition of consummating any collective bargaining agreement that the Union agree to separate contracts with Pioneer and Service for employ ees in the unit thereby withdrawing recognition of the Union as the exclusive collective bargaining represents tive of the employees in the unit 4 Respondents unfair labor practices caused and pro longed an unfair labor practice strike 5 The Union made an unconditional offer on behalf of the striking employees to return to work but Respondent failed and refused to reinstate the striking employees unless and until the Union agreed to superseniority for striker replacements to a letter for distribution to the press to a written back to work agreement and to accept a written contract prepared by Respondent B Background Pioneer was incorporated as a holding company in 1965 to own4 and operate Blue and White Taxi Compa ny cabs Thereafter it employed and supervised the dnv ers of the cabs it owned as a profit making enterprise In 1972 it moved to the University Avenue address and op erated Blue and White cabs at that location through the period of time during which the alleged unfair labor practices occurred In 1976 the Union organized certain employees of Pio neer including its drivers dispatchers service personnel and janitors A contract was negotiated which among other things granted Pioneer the right to lease its cabs There was however in effect a city ordinance that pre vented Pioneer from doing so and although it and other cab companies lobbied to get the ordinance changed the city council refused to comply with its request unless and until labor agreed The Union was adamantly against any such change and resisted the efforts of the cab com panes to change the law Starting in 1976 Pioneer began to run into financial difficulties Between 1976 and 1981 it lost between $400 000 and $500 000 Because of these losses David Barnhart Pioneers vice president and chief negotiator The cabs were owned for the most part by Pioneer and its stock holders Two or three out of 73 were owned by nonstockholders BLUE & WHITE CABS 1053 approached the bargaining table in 1981 convinced that substantial changes in the Company s operation would have to be made He felt as did the executives of other cab companies also in financial straits that the Company should be permitted to lease its cabs to the drivers rather than to continue the employer/employee relationship and commission structure of the past With this in mind Barnhart told Richard Say the Union s chief negotiator that the Company had to be able to lease its cabs in order to become financially viable and requested that the Union drop its opposition to the hoped for change in the no leasing ordinance Say however refused and insisted on the maintenance of the then current employer/ employee relationship with its commission system With the parties on opposite sides of the leasing ques tion negotiations in the summer of 1981 were both hard and heated Questions concerning raising rates changing the commission structure having the drivers pay for part or all of the gasoline were all raised in hopes of finding a formula satisfactory to both sides but no agreement was reached Finally on September 15 a 1 year agreement was reached and executed covering the period August 15 1981 to August 15 1982 but containing a 90 day re opener provision enabling Pioneer to force the Union back to the bargaining table if the new agreement did not result in a reversal of the Company s financial slide Shortly after the execution of the 1981 contract it became clear to the Company that its financial plight had not been sufficiently ameliorated by that agreement Losses continued to pile up on a monthy basis Pioneer could not pay its creditors It was $30 000 in arrears to Standard Oil and that particular creditor insisted that in order to continue to do business Pioneer would subse quently have to pay cash for its purchases plus $5000 per month on the arrearage until caught up Penzoil and other small creditors refused to do business with Pioneer The Company s attorneys refused to represent it unless it agreed to sign a second mortgage to assure payment of fees Whereas previously Pioneer had been permitted by the Insurance Commissioner of Minnesota to self insure up to $25 000 permission was withdrawn and the Com pany was forced to purchase additional commercial in surance Faced with these financial problems Barnhart once again requested that the Union drop its opposition to the no lease ordinance but was once again refused He there upon announced that he would reopen the contract at the end of 90 days as provided for in the agreement The Union objected that the agreement had not been given a sufficient test period Nevertheless the Company exer cised its option to reopen after 90 days and additional negotiations took place at that time Though Barnhart put forth new proposals for additional changes in the 1981 agreement these were all rejected and the Union s membership subsequently voted to strike if Pioneer im plemented any of its proposed contract changes Faced with the threat of a work stoppage Barnhart agreed to maintain the agreement as it was for the contract year without change realizing however that the Company could not continue to operate permanently under the ex istmg conditions In the winter of 1981-1982 the Yellow Cab Company suffering under similar adverse financial conditions as Pioneer and convert it into a cooperative but nothing came of the proposal C Negotiations Between Pioneer and the Union and the Formation of Service Faced with the above-described financial dilemma Pioneer directed Kent Richey its attorney on April 13 1982 5 to draft Articles of Incorporation of Blue & White Service Corporation the new corporation to be located at the same address as Pioneer with its purpose described as engaging in the business of providing tele phone answering radio dispatching maintenance and re lated services to taxicab owners E Lee Sherman president of Pioneer signed the document as Incorpora tor Three days later Sherman as incorporator of Serv ice named himself and Barnhart as the sole directors of the new company and as such approved and adopted bylaws for the new company which had been drafted by Richey and which vested in the board of directors virtu ally all managerial authority Within the next few days Richey advised the Secun ties Division of the Minnesota Department of Commerce that his firm had acted as legal counsel to Service re garding its incorporation and would so act thereafter with regard to a proposed offer and sale of 75 8 shares of common stock In a second letter to the same agency also dated April 19 Richey explained how Pioneer and its shareholders intended to establish Service which ini tially would be wholly owned by Pioneer shareholders The plan he explained was for Pioneer to transfer cer tarn assets to Service in return for a note from Service reflecting the purchase price of those assets Additional ly Richey advised Service would enter into a lease ar rangement with Pioneer for use of their joint address for business purposes Richey explained that thereafter Serv ice would render the services described in its articles of incorporation to cabs owned by Pioneer and its share holders and to third party cab owners pursuant to a serv ice agreement Because the service agreement would permit cabdrivers to use the name and colors of Service a franchise would be involved and he was therefore sub mitting a franchise application along with other neces sary filing documents Later Richey explained it was in tended that current owners of cabs primarily Pioneer and its shareholders would on an individual basis sell their cabs to new owners along with one share of stock of Service per cab with the idea that eventually all cabs as well as all stock in Service would be under the exclu sive control of the new cab owners as a group Sometime in the spring Pioneer advised the Union it was considering a proposal to sell its taxicabs to mem bers of the public including to its current drivers The Union s response was to file a grievance under the exist ing labor agreement Despite the grievance however Barnhart and Sherman as directors of Service continued with their plans as outlined in Richey s letter to the Se cunties Division to purchase Pioneers cabs and other 5 All dates are in 1982 unless otherwise Indicated 1054 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD assets to lease the premises from Pioneer and to sell stock in Service The vast majority of the 75 8 shares of Service stock was purchased by the Sherman family the sale to be effective as of June 3 On that date the Union sought and obtained a temporary restraining order from the District Court for the State of Minnesota restraining Pioneer from changing the form of its business of owning and operating taxicabs until the issuance by the arbitrator of his decision and award resolving the gnev ance already filed Meanwhile in anticipation of the forthcoming contract negotiations Barnhart on June 18 forwarded to the Union a propsed new labor agreement with an accompa nying list or index of changes In his cover letter Barn hart explained that he had gone through the entire con tract and made the changes that he felt necessary for the continued operation under the employer/employee system Barnhart in rewriting the contract was attempt ing to start all over and get some of the old 'anguage out and some of the more relevant language in He re wrote the entire contract line by line and paragraph by paragraph the way he thought it should be Among the various changes which Barnhart who had had no legal training included was a provision in section lA that The Union shall be the sole representative of its mem bers in collective bargaining with the Employer When the proposed contract was received by the Union it ob jected to the inclusion in the labor agreement of this and other language in section lA Before the first negotiation session was held the arbi tration hearing was conducted on June 28 At the hear ing the Union was provided with all of the relevant doc uments concerning the establishment of Service the sale of taxicabs by Pioneer to Service the issuance of stock etc thus informing the Union precisely of the various efforts being made to change the structure of the buss ness and to alter the existing employer/employee rela tionship At the arbitration hearing Pioneer was repre sented by Attorneys Kent Richey and Robert A Brunig both of the firm 0 Connor & Hannan At the hearing Say had occasion to speak to Richey aoout the labor agreement which Barnhart had forward ed to the Union on June 18 He showed Richey a copy of the document and told him that section lA was an it legal union security clause and in violation of the Nation al Labor Relations Act He told Richey that the Union had the obligation to represent all employees not just members and that the Company should clean up section IA of its proposal Richey after looking at the docu ment stated that he had had nothing to do with drafting the proposal and would talk to Barnhart about it Negotiations toward a new contract began on July 1 with additional sessions being held at uneven intervals thereafter Though the record is not clear as to precisely what was said and done at each of the meeting over the first few collective bargaining sessions the positions of the parties regarding the subjects covered appear to be as follows Paragraph lA Union The Union took the position that the first sen tence of paragraph lA should remain the same as it was in the old agreement The Union shall be the sole representative of all employeese covered by this agreement in collective bargaining with the Employer The Union s interpretation of the cited section was that all employees meant that the Union would follow the letter of the law and represent all employees whether members of the Union or not including employees of Service Pioneer Pioneers position was reflected in the first sen tence of Section IA of Barnhart s June 18 proposal The Union shall be the sole representative of its members' covered by this agreement in collective bar gaining with the Employer During the July 1 bargaining session Say brought up the subject of section IA and told the company repre sentative8 that Pioneers section lA proposal was illegal and that the Company could not compel the Union to agree to it Barnhart explained that the purpose of the members only sentence in section lA concerned the Company s plan to sell its cabs and make the drivers in dependent operators The Company s intention as Barn hart explained it was to have the bargaining agreement reflect that once a person purchased a cab and began op erating it as a business separate from Pioneer that person would not necessarily have the Union as his sole repre sentative He informed Say that sale of the cabs was ne cessitated by Pioneers financial problems and about the time of the first bargaining session or before offered to and in fact did show the Union the Company s books to prove the point that the Company could not operate profitably on a commission basis given the city regulated rates Despite Barnhart s explanation Say insisted that the Union could not accept the members only Ian guage Although he offered no specific alternative Ian guage to solve the Company s problem he told Barnhart that the Union had no intention of representing owner operators and suggested that perhaps the Company could protect itself by inserting new language in section 35 of the existing labor agreement dealing with successors Say insisted that the Union would not accept the members only language repeated that the phraseology was illegal and recommended that the Company obtain the services of an attorney to clean up the language At one of these early meetings Sherman unlike Barnhart stated that he was aware of the problem and that the Company would seek legal advice Following the July 1 bargaining session Barnhart con sulted Richey regarding the language contained in his proposed contract Richey advised him that certain changes would have to be made including deletion of the members only language Subsequently the language a Emphasis added Ibid s The description of the July 1 bargaining session is based primarily on Say s credited testimony BLUE & WHITE CABS 1055 was dropped but according to Barnhart he could not recall if this was before or after the strike On July 19 Arbitrator Thomas P Gallagher issued his decision and award on the grievance filed by the Union which alleged that the Employers proposed plan of fran chising the taxicabs then operated by the Employer would eliminate the work of the bargaining unit and would thus violate the labor agreement between the par ties In his decision the arbitrator specifically stated that he was not deciding whether Pioneers action was a vio lation of the Act only whether it was a violation of the labor agreement He concluded that it was not and that Pioneer was not prevented from selling its business by the contract The arbitrator also determined that after all sales and transfers were completed Service would not be the alter ego of Pioneer nor a single employing enter prise with Pioneer 9 Immediately following the issuance of the arbitrators decision and award Pioneer began selling its assets and in general to effectuate its plan to sell the business Thus on July 27 Lee Sherman as president of both Pic, veer and Service executed a number of documents that resulted in the establishment of Service These consisted of an agreement of sale between the two companies whereby Pioneer sold its dispatching garage and office equipment radio and other assets to Service a security agreement and promissory note a lease whereby Pioneer ]eased the premises where both were located to Service a service agreement describing the rights and obligations flowing to and from Service and the cab owners and the franchise offering circular for prospective franchises Kent Richey representing both Pioneer and Service prepared most all of these documents Following the restructuring on July 27 Service con tinued initially to be managed by Lee Sherman as presi dent and Barnhart as vice president and secretary Both for the time being served as the only two members of the board of directors The intent underlying and the result of the restructur ing and the creation of Service was the establishment of a nonprofit corporation to service the shareholder/cab owners Thus currently 10 Service owns no cabs itself and neither employs nor supervises any drivers Rather each driver is responsible to the particular shareholder/cab owner whose cab he drives The oper ation of Service is financed through service fees paid to it directly by the owners of the cabs The services rendered by Service to its share holder/cab owners are similar to the services previously rendered by Pioneer to its driver employees Thus Serv ice provides a telephone answering and dispatch service for owner/operators and their drivers employs a sales person to obtain business for the cab owners maintains the accounts for charge customers and collects fees from them and from credit card customers and pays drivers after collection takes care of liability insurance advertis Olin Corp 268 NLRB 573 (1984) is not controlling The collateral finding of the arbitrator on the alter ego issue at the June 28 1982 arbi tration was a prediction on his part at a time when all the events ordinar ily to be considered in determining this issue had not yet occurred I am therefore ^iot bound by his decision 10 At the time of the hearing ing costs and recordkeeping and maintains a lost and found department Service also serves as a clearinghouse for drivers It gives city required tests to applicants test drives them interviews them and clears them through the motor ve hicle records Because city ordinances require that cab drivers be insured Service checks about whether appli cants can comply with insurance companies require ments so that cabs can be insured It determines whether applicants have licenses checks drunk driving and acci dent records and makes certain that applicants have maps and can speak English Service maintains applica tion forms at its offices at the University Avenue ad dress A clerical provides such forms to applicants to fill out after which the forms are returned to the clerical who goes through the applicants motor vehicle records The completed form is then reviewed by Services gen eral manager and if the applicant is satisfactorily cleared his application is placed in the file and his name on a list Thereafter any of the shareholder/cab owners can choose to lease a cab to anyone on the list Lessees must be chosen from this list because only individuals on the list have been cleared for insurance purposes The owner/operators need keep no records for Serv ice except for the trip sheets as required by the city These list the starting time of the drivers place of pickup fare and place of dropoff The trip sheet is turned in to Service where it is kept on file for the use of the city if needed Service does not control the drivers It does not keep track of their traffic violations nor enforce standards on driver lessees of the individual cab owners except as re quired by city ordinances Lessees lease cabs directly from the shareholder/cab owners for a fixed amount for a fixed period of time and keep whatever fares they col lect Lessees are free to work as much or as little as they wish They dress as they wish limited only by the re quirements of city ordinances They buy their own gas wherever they want and may or may not wash and vacuum their cabs as they prefer The lease arrangements are usually verbal and are broken at will that is if the arrangement fails to work out the owner simply will not allow the lessee to use the cab again he gets rid of him Though Service does not directly employ drivers it does employ the employees in the dispatchers office These employees are paid by Service and receive such fringe benefits as sick leave and paid vacation They are supervised by the head dispatcher who is an employee of Service Any problems that arise between the drivers and the dispatching personnel are usually worked out be tween themselves and if not then the general manager head dispatcher or board of directors of Service will work out the problem The board of directors meets every week to solve such problems as these and any other problems that might arise As of the time of the hearing there were about 15 dispatch office employees including a janitor The wages of these employees are determined by Service who pays them directly Service also pays workmen s compensation on their behalf but does not do so for the drivers 1056 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD On July 30 another bargaining session took place dunng which once again Barnhart proposed his mem hers only language hoping thereby to keep the Union from claiming that it would represent the purchasers of cabs and their dnvers It did not occur to him that there would be other considerations in the use of such Ian guage He advised Say that what he was trying to do was to keep individuals who bought cabs and their dnv ers from automatically being strapped into a contract with the Union Say replied that the language which Pio neer was proposing was illegal and besides the Union did not intend to bind new cab owners anyway He sug gested that the Company change the language of para graph IA and deal with its concern in paragraph 35 which covers successors He asked if the Company had sought legal advice as he had suggested during the earli er meeting and was told by Sherman that legal advice had in fact been sought that this was still the Compa ny s proposal and that the Union could take it or leave it Sherman added that he wanted to be able to sell his business without the Union s interference In addition to the discussion concerning the members only section the parties on July 30 apparently consid ered Pioneers proposed deletion of section 35 that deal ing with successors and assigns Say voiced opposition to its deletion stating that the Union was there to add to the contract not subtract from it He also expressed concern for protecting employee jobs in the event the cabs were sold and for the Union s right to negotiate thereafter on the driver s behalf Say offered no proposed modification of section 35 to prove that the term successors should not include corporations with different functions than Pioneer Rather he took the position that the Union would regard successor corporations having only some of the functions of Pioneer as still having employees within the unit Barnhart refused to modify his proposal and Say announced that he would take it back to the membership but would recommend rejection Beginning in August Pioneer and its shareholders began selling their cabs one or two at a time and with each cab the purchaser also was issued one share of stock in Service Sales continued through May 1983 by which time all cabs save one had been sold As of August when the first cab was sold the majority of Pio neer stock was owned by the Sherman family Meanwhile on August 2 Say wrote to Sherman as president of Pioneer restating the Union s position Please be advised that it is our position that Sec tion 35 the successors and assigns clause requires you to make as a condition of any sale of a fran chise the collective bargaining agreement between Pioneer Holding Company of Minnesota and the Guild of Taxi Drivers Local 3024 B R A C About the same time the Union held a meeting at which a strike vote was taken after discussion of Pioneers pro posal and a recommendation from Say that the proposal be rejected Say testified that he recommended to the members that they reject the Company s proposed con tract because it contained an illegal union security clause to which the Union should not be a party He also dis cussed with the membership the arbitration section of the contract with which he was dissatisfied and the fact that the Employer planned to eliminate pension benefits and health insurance Finally he noted that the Company had failed to forward to the Union the dues it had deduct ed 11 and advised the membership that this too was a vio lation of the Act The parties met for the next bargaining session on August 6 At this time Say reported to the Pioneer rep resentatives that the membership had turned down the Company s last proposal He told Barnhart and Sherman that in his opinion the reason was the illegal union secu my clause i e members only wording the penalties other than discharge provisions and the economic pack age in general He added that the Union also wanted the dues that Pioneer had deducted and not forwarded The company representatives denied that the members only language was illegal and refused to change the wording As for the other provisions of its proposal the Company briefly offered to revise its position regarding pension benefits and hospitalization but declined to put the revi sions in writing Thereafter there was little discussion at this session about the Company s members only pro posal because according to Barnhart the subject matter fell into the background or faded away Instead the par ties sought to solve the problem of drivers future repre sentation by concentrating on section 35 the successor and assigns provision Barnhart continued to insist that section 35 be deleted while the Union came armed with two sets of proposals one set reflecting demands to be made if Pioneer continued to employ its dnvers de mands made earlier the other reflecting demands to be made if Pioneer sold its cabs as it was apparently intend ing to do Under the latter circumstances according to the Unions written demands section 35 was to be strengthened by the inclusion of the following language Addendum to Sect 35 The employer further agrees that as a condition of any sale of its taxicabs operating under the Blue and White colors utilizing Blue and White dispatch service that any or all prospective buyers shall be bound by all the terms of this agreement On August 10 Pioneer issued a memorandum to its em ployees concerning the content of the August 6 bargain ing session The memorandum advised the employees that a proposed tradeoff discussed at the previous bar gaining session whereby the employees would keep their pension rights and health benefits in return for their paying a larger percentage of the gasoline costs would probably not be acceptable to the drivers because more of them would be adversely affected by the increased costs of fuel than would benefit from the pension and health benefits The memorandum went on to state that the only changes that the Company was proposing at that time was to drop the health insurance and pension plans and to reword some sections of the contract so as to prevent the Union from hindering its sale of cabs The I I Discussed infra BLUE & WHITE CABS 1057 memorandum stated that the Company s primary objec tive was the sale of its business that the sale was pro gressing and that it was hoped that more employees would purchase cabs It closed with a statement that there would be no layoffs during the transition and with the stated hope that there would be no strike A day or two latter Pioneer issued a second memoran dum to its employees entitled WILL THERE BE AN OTHER VOTE referring of course to the employees strike vote of several days before In this memorandum the Company informed its employees that it had been ad vised that the original strike vote would stand that this was unfortunate because it had tried to negotiate an agreement that would preserve business and jobs while [it was] trying to sell the business The memorandum explained that removal of health insurance and pension benefits was necessary in order for the company to con tinue to operate while the cabs were being sold It stated further the changes in wording we have proposed for the new contract simply allows us to sell our cabs with out continuous opposition from the union leaders The memorandum promised to continue to operate as many cabs as possible and voiced the hope that there would be no picket lines to cross On August 13 the Union filed a charge with the Board alleging interrogation and surveillance in violation of Section 8(a)(1) of the Act and a broad nonspecific refus al to bargain in violation of Section 8(a)(1) and (5) which eventually turned out to be based on Pioneers failure to properly handle dues deductions On August 16 the Union struck Pickets carried signs bearing the wording ON STRIKE AGAINST BLUE & WHITE UNFAIR LABOR PRACTICES and simi lar messages Barnhart credibly testified however that at no time prior to the strike did Say or anyone else tell him that the Union would strike to protest Pioneers in clusion in its proposal of the section 1A members only language or because the Company had failed to forward the paid union dues to the Union 12 Rather the Union advised Barnhart that the reasons it was going to strike were because Pioneer was selling its cabs and taking the position that the buyers would not be bound by the con tract and because of economic demands for the dispatch room personnel particularly pension and health insur ance benefits that Pioneer was unable to grant because of its financial problems Because virtually all the drivers honored the picket line and refused to work Pioneer immediately began hiring replacements Barnhart told the replacements that their jobs would be permanent and that they would not be replaced after the strike ended The strike lasted into January 1983 during which period Pioneer continued to sell its cabs and with each cab there was a reduction in vacancies available for any of Pioneers returning driver employees During the strike Pioneer continued to meet and nego tiate with the Union on the average of about once per month At the September 20 bargaining session the rep resentatives of management Barnhart and Sherman pro posed that there be two contracts rather than one the 2 The union dues issue is covered separately infra first between the Union and Service covering dispatch ers order takers gas people and starters the second be tween the Union and Pioneer covering drivers It was explained that two separate contracts were necessary be cause once all the cabs were sold Pioneer would no longer have any employees and Service would employ the above described classifications of employees other than drivers Say agreed to look over the two separate contracts but said he would not be interested in splitting up the bargaining unit as it then existed and really pre ferred one contract On September 23 the first Service stockholder meeting was held Four cabs had been sold 13 by that date and the new owners or part owners and Sherman and Barn hart attended the meeting Negotiations with the Union legal problems the strike and the sale of assets by Pio neer to Service were discussed Charges to be made by Service to the cab owners in the near future to cover ex penses were also discussed and agreed on as was other general business September 25 marked the last day that dispatch room employees were employed by Pioneer and the last day Pioneer operated the dispatching service Up to this time these employees had been supervised by Barnhart and by Bonnie DeSota As of September 26 they were employed by Service Five of the seven rank and file employees i e order takers and dispatchers were retained by Serv ice and three others added All were still supervised by Barnhart and DeSota Similarly the same mechanics14 continued to be employed the same suppliers used and Barnhart continued supervising for Service as he had for Pioneer under an oral agreement The servicing of cabs by Service remained the same as it had been under Pio neer Ultimate control of Service and its operations was in the hands of its stockholders beginning on September 26 but for the time being at least these Service stock holders were still Pioneer people Gradually however the cabs and Service stock changed hands and the new owners took over control of Service Between September 27 and 30 the Union Pioneer and the Regional Director entered into an informal settle ment agreement providing for Pioneer to forward to the Union all dues withheld and to refrain from forwarding or offering to forward directly to employees dues col lected during the life of the 1981 - 1982 collective bar gaining agreement Subsequently Pioneer forwarded the dues to the Union and posted a notice in conformance with the settlement agreement 15 At the regular union membership meeting held Sep tember 28 Say brought to the attention of the members the management proposal that there be two contracts He advised those present that Pioneer was trying to divide the unit up which was potentially illegal He said that there were no solid proposals from the Compa ny therefore there was nothing to vote on The second meeting of Service stockholders took place on October 28 the time and agenda having been drawn up by Barnhart in consultation with Sherman 13 Four others were in the process of being sold 14 The mechanics were represented by another union 15 Expiration of the 60 day posting period occurred December 4 1058 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD Barnhart was at the time personnel manager for Service and had held the same position for Pioneer prior thereto By this time there had been nine cabs sold", and of course nine shares in Service likewise sold Attending the October 28 meeting were nine shareholders besides Barnhart At this meeting union negotiations and court proceedings were discussed Operational matters were discussed freely with suggestions being offered and adopted by those present including the new share holder/cab owners One of the suggestions made by some of the new shareholders was that a committee be set up to arbitrate questions about certain drivers lying about locations and stealing loads It was decided that a committee of five should be organized to be comprised of two owner operators two employee drivers and one member of management Minutes of the meeting reflect full and effective participation of all in attendance On November 9 Barnhart wrote to Say about several contemplated changes First Barnhart proposed chang ing the seniority system to be fair to our new employ ees who have joined us since August 15 1982 (when the strike began) He proposed to base seniority on the number of shifts worked since August 15 Second it would no longer be required that a driver work 13 shifts per month Third day drivers would have to be off the street by 5 p in or perhaps 4 p in to make day shift and night shift more equally profitable Fourth in accord ance with the decision made at the October 28 share holders meeting Barnhart advised Say of the organiza tion of the committee to oversee and arbitrate grievances concerning stealing loads the committee to have power to levy fines Barnhart offered in his letter to meet with Say to discuss the contemplated changes and advised him of his intent to implement the changes before De cember 1 Say interpreted the proposed seniority change as granting seniority only to those who worked after the inception of the strike Before the strike seniority was used for purposes of bidding on shifts days off and dis patch room and garage jobs A bargaining session was held on November 17 Among the matters discussed were the proposed changes described in Barnhar s letter of November 9 and 17 Re garding the seniority question management proposed that striking employees have their seniority begin as of the day they return to work while nonstriking employees be credited with seniority for shifts worked after the strike began as a reward for saving the Company during the strike Say objected to Barnhart s new seniority proposal because it penalized employees for striking in violation of the National Labor Relations Act Say told Barnhart that the Union was adamantly against the Company s new se nionty plan Barnhart replied that he did not owe the strikers anything whereas he did owe the people who crossed the picket line something According to Say the Union tried to get the Company to agree to a back to work agreement based on seniority but the Company took the position that the people who had taken jobs during the strike should keep them and strikers should have a seniority date based on their return date after the strike ended 16 In all there had been by this time 19 sales finalized or pending There was also some discussion concerning the Longhood Committee established previously to deal with drivers stealing fares Although no specific cases had been arbitrated before the November 17 meeting the Union took the position that it was within its province to deal with such problems as it had in the past Barnhart took the position that the new owners and their drivers should have their own committee and would implement the plan as conceived because there would be more owner operators and drivers working for them than for Pioneer and they should be involved in resolving such problems Despite Barnhart s position Say felt and stated that the Union still represented the owners and their drivers Regarding Barnhart s plan to use supervisors in the dispatch room Say asked Barnhart if this was a tempo rary or permanent plan Barnhart replied that it would be permanent that after the strike was settled Barnhart wanted the right to install one or more supervisors in the dispatch room if and when he desired routinely doing bargaining unit work Supervisors had been dispatching however ever since the strike began to replace unit dis patchers who were on strike The Union agreed that this was the Company s right Say who could foresee man agement placing two or three supervisors in the dispatch room at the same time all doing unit work objected strenuously Nevertheless Barnhart insisted that he in tended to implement the plan On November 23 at a union meeting Say discussed the proposed changes with the membership He advised the members that the Company was trying to divide the unit up and that such was illegal He told them that the Company had made no solid proposals so that there was nothing to vote on He said that both the Company s se niority proposal and its formation of the new committee were illegal He said that the Company s sale of cabs and its replacement of dispatch room employees with super visors was virtually eliminating the unit Say testified that at the fall meetings unfair labor practice charges negotiations the members only union security clause hospitalization the Company s failure to forward dues and wage structures were all discussed On November 30 there was a meeting of Service stockholders The meeting was scheduled by Barnhart and Sherman Barnhart drew up the agenda Besides Barnhart and Sherman there were 21 stockholders in at tendance At the meeting Barnhart announced that there were 23 owner operated cabs operating and 7 more with money down Various business problems were discussed including use of the garage cost of repairs and progress in union negotiations Various committees were orga nized to look into obtaining a gas contract and hiring a lawyer to consult concerning a decertification petition The Longhood Committee it was announced had held one meeting and levied one fine Meetings of this com mittee would thereafter be held weekly According to Barnhart by this time the Union had already been noti feed of the existence of the Longhood Committee In late November and December the number of taxi cabs on the street increased Though most of the original drivers were still on strike a number had returned to BLUE & WHITE CABS work while others had been replaced The number of va cancies was reduced as more cabs were sold and strikers replaced On January 6 1983 17 another meeting of Service stockholders was held Twenty four stockholders attend ed According to the minutes of this meeting about half the shares in Service had been sold by this time It was decided therefore to organize a new board of directors to oversee the operations of Service The board was to consist of seven members Sherman Barnhart and five owner operators The term of the board of directors was to be from January 31 1983 until January 31 1984 Election of the new Board was scheduled for January 20 In addition to the reogranization of the board of di rectors other business decisions were made by the stock holders present at this meeting including the decision in favor of an increase in the service fee to be paid to Serv ice and the continuation of a $5 fee per cab for legal fees in connection with union negotiations On January 7 a meeting was held at the office of the Federal Mediation and Conciliation Service In attend ance were Barnhart Sherman Say and Attorney Brunig who had represented the Company during injunction proceedings earlier Brunig advised the Union that he was only interested in the dispatchers and order takers and stated that he would be willing to negotiate a con tract only if and when the Union was able to establish its majority status Say replied that the Union did not have to establish its majority because it already had a majority in the single unit which had existed before the strike and which he was not interested in having divided Brunig then said that he did not represent the drivers and would leave He then did so Barnhart remained behind to dis cuss the drivers with Say After Brunig left Say asked Barnhart if he would ne gotiate a back to work agreement Barnhart replied that he did not know how to do this Say suggested that he simply use tl-e original seniority system Barnhart refused stating that the strikers did not have a seniority system Barnhart refused stating that the strikers did not have se nionty under his system He said that he favored those people who had not gone out on strike and who had saved his Company He complained that the strikers had tried to ruin his Company and therefore had no seniority Say replied that Barnhart could not take that position be cause he was penalizing the strikers for exercising their right Barnhart agreed that that was what he was doing but stated I m committed to those people who didn t strike and came to work for me and I in not ever going to change my mind Later after contacting counsel Say called Brunig again and advised him that the Union s position had not changed that there was just one unit including both drivers and dispatch room employees and the Union represented a majority of employees in that unit Say told Brunig that a recent decertification petition had been dismissed for lack of interest and the unit should not be broken up Brunig replied that Service was a new company with different owners Say insisted that the 17 Subsequently in this subsection all dates are in 1983 unless other wise noted 1059 principals were the same Neither Say nor Brunig changed his position Still later that day Say again talked with Barnhart He handed him a letter signed by the Union s general chair man addressed to Sherman and Barnhart Pioneer Hold ing Company containing an unconditional offer to return to work on behalf of all strikers He also specifically stated that it was an unconditional offer to return to work The meeting then broke up About 5 p in on the same day Say received a phone call from Barnhart who told him that he would accept his unconditional offer to return to work provided the Union would write a press release on its own stationery stating that the strike was over and provided further that the parties could work out a written back to work agreement and a signed contract Say told Barnhart that what he was doing was placing illegal conditions on an unconditional offer to return to work Barnhart replied that there was no other way of getting the employees back to work Say again told Barnhart to obtain legal advice The Company after the unconditional offer to return was made offered to meet with Say and work out a means of calling the strikers back However Barnhart would not consider original seniority as the basis for recall insisting that the only seniority that it would con sider was one based on the number of shifts worked since the strike began Thus no employee who went out on strike would have seniority unless he returned and worked some shifts after August 15 There was then in Say s view no orderly way to get the strikers back to work As it turned out after the unconditional offer to return to work was made Pioneer neither recalled any strikers nor hired any new employees On January 9 Barnhart called Sav and read to him a letter that the Union later received in the mail The letter signed by Barnhart advised the Union that Pio neer accepted the Union s unconditional offer for all stnkersi against Pioneer to return to work subject to the execution by the Union of a written back to work agree ment and a written contract then in the process of prepa ration Say told Barnhart that what he was doing was it legal and asked him if he had checked with his attorney Barnhart replied that he had The following day the Union filed the charge in Case 18-CA-8006 alleging a broad refusal to bargain Also on January 10 Say advised Brunig by letter that his unconditional offer of January 7 included all dispatchers and order takers On January 13 Barnhart called Say and told him that he was no longer insisting on a back to work agreement or a press release as a condition to accepting the Union s unconditional offer to return to work He added howev er that he would not be hiring back any strikers anyway because the Company would not be hiring anybody The same day the Union amended its charge in Case 18-CA- 8006 by adding an 8(a)(3) allegation that Pioneer and Service's had since January 7 discriminated against its striking employees 18 Service was represented at this time by Attorney Robert Brunig Pioneer by Barnhart 1060 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD On January 14 Brunig responded to Say s letter of Jan uary 10 concerning the inclusion of the dispatchers and order takers in the unconditional offer to return to work Brunig stated that although the Union had struck Pio neer no one had ever struck Service 19 Brunig added that none of the dispatchers and order takers who struck Pioneer were ever employees of Service As before he then offered to meet and negotiate with the Union once it demonstrated majority support or to go to an election on a showing of 30 percent support Without a showing of support Bruntg stated Service would not negotiate because to do so would be in his estimation unlawful On January 20 the Service stockholders held another meeting By this time Pioneer held only one third of the stock in Service Nominations for the new board of di rectors were considered Votes were in accordance with the number of shares in Service Five new members all owner operators and shareholders joined Sherman and Barnhart who altogether comprised the seven member board Though shareholders and board of directors con trol of Service had shifted from Pioneer to the new owners Sherman continued on as president and general manager and Barnhart as vice president Barnhart contin ued to supervise the dispatch office employees In addi tion to the election of a new board of directors the meeting of January 20 was taken up with matters of gen eral concern to those present i e licensing and ordi nances The shareholders according to the minutes of the meeting all appear to have been involved in these discussions The Service board of directors met on January 28 with matters of mutual concern to all shareholders/cab owners freely discussed among those present Consider ation was given to permitting outside cab owners who were not shareholders in Service to join Blue & White without becoming shareholders in Service Subsequent meetings of the board were held at which various day to day operational problems were discussed and re solved e g cab repairs driver/owner operator person nel problems licensing requirements dispatch room/ driver problems etc The board of directors appear to have begun about this time to operate as a part of man agement making operational and managerial decisions on an independent basis Pioneer sold its last cab in May 1983 Thereafter Pio neer did not operate Blue & White cabs As of the summer of 1983 the new board of directors decided that certain contracts initially signed by Sherman and Barn hart as the old board of directors were not in the best interest of Service and therefore refused to sign them 20 Service has since been asked to vacate by Pioneer As for Service in midsummer 1983 it added employees to its dispatch room complement for the first time since Janu ary 7 These were individuals who had been driving pre 19 By January 14 40 cabs and 40 shares of stock in Service had been sold Service at this point in time was independently owned Brunig s statement notwithstanding the labor dispute was with Service as well as Pioneer and both were being picketed The wages hours and working conditions of the dispatchers and order takers were in the eyes of the pickets in issue 20 E g repairs on the building leased from Pioneer by Service were to be paid for by Service viously for owner operators Owner operators did not hire any of the striking employees as far as the evidence indicates In August 1983 Barnhart ceased being vice president of Service and ceased being supervisor in the dispatch office One month later Sherman ceased being president and general manager On September 30 the Regional Director for Region 18 issued an Order revoking approval of and vacation and setting aside settlement agreement in Case 18 -CA-7822 on grounds that Respondent had engaged in substantial postsettlement unfair labor practices some of which were of the same type as those encompassed by the set dement agreement As noted the consolidated complaint issued the same date D The Health Insurance Issue Before the spring of 1982 Pioneers employees were insured by the New England Life Insurance Company At that time Pioneer was behind in its payments In May of that year Pioneer was advised that its premiums would thereafter be almost doubled due to the severe loss experienced the previous year which cost the insur ance company money Pioneer fell further behind During the negotiations in the summer Pioneer ad vised the Union that after the expiration of the current contract it would discontinue fringe benefits including health insurance because of its financial condition The Company maintained its position throughout the early negotiations Although according to a company memo randum there was an offer from the Union to have the drivers pay more for gasoline in return for keeping the health insurance and pension plan this tradeoff was never agreed on A second company memorandum to employees issued just before the strike confirmed its in tention to discontinue the health insurance In negotiations following the initiation of the work stoppage there was some discussion of the Union giving up its demand for health insurance in return for the Company s managing an IRA for its employees and con tributing a very nominal monthly sum toward health in surance for them Nothing came of these negotiations and the Company continued to insist on the deletion of the health insurance provision from the contract On September 20 the Company once again put forth its pro posal and announced that if the Union did not accept its proposed agreement by September 30 it would cease paying health insurance as of October 1 In October or November Barnhart was advised by his insurance agent that if Pioneer quit paying premiums it was not necessarily so that the insurance company would automatically cancel its policy Rather it was possible that the insurance company might let matters continue for years then later come back and try to collect for those years claiming that Pioneer never canceled its policy Forewarned of this possibility Pioneer by letter dated November 18 canceled its employees health insur ance retroactive to May 30 Before canceling the policy Barnhart checked into the claims that had been filed be tween May 30 and November 18 to determine whether it would be cheaper to self insure for that period or to BLUE & WHITE CABS 1061 keep the commercial carrier Barnhart found that there had been few claims between May and the expiration of the contract and therefore determined to cancel retroac tively to May 30 Although Barnhart had advised the Union during negotiations that Pioneer intended to cancel the health insurance plan he did not inform it that it would be retroactive nor did he advise it that he had canceled it immediately after doing so Say did not learn of its cancellation until it came to his attention the following January Nevertheless all claims arising be tween May and August 15 were paid by Pioneer E Dues Issues According to contract Pioneer was supposed to deduct dues from employees paychecks on the first payday after the 10th of each month and forward the money to the Union by the end of the month As a matter of practice Say testified frequently Pioneer was a few days late with its remittance of dues and when Say would call to ask where the dues were he would be told by Sherman that he had been busy but would get the money in the following week then did so According to company records in the 17 months January 1981 through May 1982 checks were timely dated only twice Barnhart testified that checks during this period were held back and not forwarded to the Union immediately because the Company was using the money for other corporate purposes and this was because the Company was constantly overdrawn at the bank and frequently had to wait for a certain account receivable to come in before it could cover its check to the Union On occa sions before June 1982 Barnhart admitted to the Union that it was using its funds for operating expenses 2 i In June 1982 dues were deducted but when Say did not receive them by mid July he called Sherman and asked him where they were and when they would be coming Sherman replied that Pioneer was a little short but he would write the Union a check He asked Say to hold the check a few days after which it would be good He said he would let Say know when it would be all right to deposit the check Say agreed but after a week passed and he did not receive June s dues he again called Sherman This time Sherman told Say that Pioneer had had a board meeting and that he had been instructed by the directors to pay priority bills first Say asked Sher man whether he felt the Union was priority Sherman according to Say facetiously and laughingly said Sure of course Say then told Sherman that he had no right to borrow or misappropriate union funds that he was merely an agent whose obligation it was to deduct and forward the dues promptly by the end of the month Sherman replied Well you ve got my position The dues were not forwarded by July 30 Barnhart admitted because the money was being used to pay gas and for other operational expenses On August 6 Say filed a grievance in letter form di rected to Sherman based on Pioneers failure to forward 21 Say denied that he was ever told by Pioneer s management before July 1982 that the dues were being used for operating expenses but ad nutted that he had been told on one occasion that the dues check was being held up until a deposit could be made in the bank the June and July dues He requested a meeting to dis cuss the matter About a week later Barnhart called Say and told him that the Union had two choices either choose an arbitrator to arbitrate the issue or accept the June dues immediately with the understanding that the July dues would be forwarded in a couple of weeks Say chose to accept the June dues which were forwarded and deposited in the Union s bank on August 16 Meanwhile as noted earlier on August 13 the Union filed its charge in Case 18-CA-7822 alleging 8(a)(1) and (5) violations the 8(a)(5) being a broad refusal to bargain without specifics On August 20 Pioneer forwarded the following notice to its employees TO ALL BLUE & WHITE EMPLOYEES As you know our contract with the Guild of Taxi Drivers and Associated Workers expired on August 15 1982 We are no longer obligated to deduct Union Dues from your check However as a convenience to you we have deducted the money as scheduled and are holding it for your instruc tions You may authorize us to forward it to the Union or return it to you Please check one box below sign this form and return it to us [ ] Please forward the money to the Guild Please return the money to me In September 1982 the Regional Director approved a settlement agreement in Case 18 -CA-7822 in which Pio neer agreed to make the Union whole for dues owed to it by Pioneers employees that were collected during the month of August as well as any other dues or fees col lected from these employees by Pioneer and not yet for warded under the terms of the labor agreement Pioneer agreed to post an appropriate notice covering the with holding of dues and containing among other paragraphs the following WE WILL NOT forward or offer to forward to the employees directly any dues which have al ready been collected by the Employer and which were being deducted under continuing authonza tions by said employees up to the expiration date of August 15 1982 under the terms of the collective bargaining agreement Thus the settlement agreement in Case 18-CA-7822 ap pears to have dealt solely with the dues issue On September 30 1983 1 year to the day of the Re gion s approval of the settlement agreement in Case 18- CA-7822 the acting Regional Director issued an Order revoking approval of and vacating and setting aside the settlement agreement on grounds that Since September 30 1982 the Regional Director for Region Eighteen has been apprised of evidence supporting an allegation that Respondent has en gaged in substantial post settlement unfair labor 1062 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD practices some of which were of the same type as those encompassed by the Settlement Agreement After an investigation the undersigned has deter mined that to effectuate the purposes of the Act it is necessary to revoke approval of the Settlement Agreement F Analysis and Conclusions 1 The alter ego issue According to a recent Board decision 22 Absent a disguised continuance the Board generally has found alter ego status only where the two enterprises have substantially identical ownership business purposes management supervision customers operation and equipment In the instant case I find no evidence that Service is a disguised continuance of Pioneer On the contrary the record reflects that the creation of Service was based purely on economic considerations untainted by union animus or a desire to avoid the proscriptions of the Act Moreover the record shows that Pioneer and Service do not have substantially identical ownership Whereas Pio neer is owned by a few shareholders mostly members of the same family Service as it has eventually evolved is owned by approximately 50 separate entities-individ uals partnerships and corporations Whereas the busi ness purpose of Pioneer was to make a profit that of Service is to service the shareholder/cab owners on a nonprofit basis To accomplish its business purposes the former employed both drivers and dispatch office per sonnel while the latter currently employs no drivers but only dispatch room employees paid by means of fees charged to the cab owners for services rendered Where as Pioneers drivers and dispatch room employees were supervised and controlled by Pioneer s management Seri ice s drivers are supervised and controlled by the 50 or so individual cab owners Only the dispatch room em ployees are supervised by Services management As for equipment Service continues to operate the same dis patch room equipment as did Pioneer but unlike Pioneer Service owns no cabs The evidence thus clearly indi cates that the two enterprises are not substantially identi cal in these respects and I find them not to be alter egos 2 The successor issue The Board stated in Spencer Foods 23 The threshold test for the inheritance of bargain ing obligations developed by the Board and ap proved by the Supreme Court in NLRB v Burns Security Service 406 US 272 (1972) is whether there is substantial continuity of the business enter prise The Board s application of this test involves consideration of the totality of the circumstances surrounding the transfer as well as the operations of the original and the purchasing enterprises The fac tors traditionally weighed by the Board include continuity in operation location work force work mg conditions supervision machinery and equip ment methods of production and product Applying these criteria to the instant case I find that Service as it eventually evolved is not a successor to Pioneer Thus Pioneer was originally owned and con trolled by a small group of investors mostly members of the Sherman family whereas Service is owned by ap proximately 50 shareholders who themselves are individ uals partners or corporations Whereas Pioneer was a holding company operating a taxicab business for profit and a dispatching and order taking service in support thereof Service neither owns nor operates any cabs but merely furnishes the dispatching order taking and relat ed services to independent cab owners for specific fees but not for profit Additionally although there was no hiatus in the traditional sense between the time when Pioneer operated its taxicab business and the time when Service fully evolved as an independent business there was a transitional period of several months during which the new controlling entity evolved and Pioneer gradually lost control In other words the instant case is quite dif ferent from one in which company A relinquishes con trol of a going business one day and company B takes over the following day and continues the business just as it was Here as it eventually evolved at the time of the hearing Service has different management supervision and control than Pioneer Whereas Pioneer employed 139 or more drivers and dispatch room employees as of August 15 1982 Service employs just 10 only 7 of whom had previously been employed by Pioneer Though the vast majority of Pioneers unit employees were drivers Service employs no drivers at all only dis patch room employees As for equipment whereas Pio neer operated between 70 and 75 cabs and serviced the public directly Service neither owns nor operates taxi cabs but rather through the use of the dispatching and order taking facilities previously operated by Pioneer services independent taxicab owners and their employ ees In sum I conclude that there is not that continuity in operation within the employing industry requisite to finding Service a successor to Pioneer Consequently Service is not obligated to bargain with the Union con cerning hours wages and working conditions of its em ployees 24 3 Refusal to bargain issue (a) Members only language and impasse As noted Barnhart at the very beginning of negotia tions included in his first proposal dated June 18 the ob jectionable members only language At the various bargaining sessions in July Barnhart explained that the purpose of the members only language was to prevent the Union from forcing the new cab owners into having to join the Union Say replied that he had no intention of forcing the new cab owners into the unit but insisted that the language was still illegal and could not be used He suggested that Pioneers problem be solved by making 22 TE Elevator Corp 268 NLRB 1461 (1984) 23 268 NLRB 1483 (1984) 24 Universal Electric Co 227 NLRB 1790 (1970) Cf Suburban Yellow Taxi Co 249 NLRB 265 (1980) revd 721 F 2d 366 (D C Cir 1983) BLUE & WHITE CABS 1063 changes in section 35 the successor provision This sug gestion was rejected however Pioneer insisting that sec tion 35 be deleted entirely Say in turn argued that he was there to add to the contract not subtract from it He again advised the company representatives to seek legal aid It appears clear from the record that throughout the July negotiations the Union s interest was continuing to represent the drivers after the sale of the cabs and have the contract reflect this objective It is equally clear that Pioneers interest was to complete the sale of its cabs free of contractual encumbrances The use of the objec tionable term members only was only Barnhart s inex perienced attempt at assuring this objective and really had nothing to do with the contract failing to cover Pio neer s nonunion unit employees Thus the members only wording was not the crux of the problem but rather was seized on by Say as a red herring to sup port his later claim that the strike was caused in part by these words and to bolster his argument that the strike was an unfair labor practice strike Granted that Say at the union meeting in early August may have brought up the subject of the members only language along with various other considerations as he testified and later on August 6 reported to Barnhart that the objectionable language was one of several reasons for the member ship s rejection of the contract I credit Barnhart s tests mony that this subject fell into the background and faded away while the parties attempted to resolve the problem of the driver s future representation by concentrating on section 35 the successor and assigns provision Further Barnhart in early August advised the em ployees that his purpose in rewording the contract was to keep the Union from hindering the sale of cabs the rewording having to do with either the members only language or the language in section 35 it is not clear which but dealing quite clearly with the future new cab owners and/or their employees not with any attempt to get the Union to restrict its representation of Pioneer em ployees to union members only to the exclusion of non union employees in the Pioneer unit In short I find that despite the unfortunate wording chosen by Barnhart for inclusion in his contract propos al Pioneer did not demand as a condition of consum mating the collective bargaining agreement that the Union agree to include in such agreement a provision re stncting the Union to being the exclusive collective bar gaining representative only of its members as alleged Moreover I find that impasse was not reached on this issue as alleged Rather negotiations concerning the members only language was abandoned while resolu tion of the problem of the future representation of the new cab owners and their employees was pursued via at tempted changes in the successorship provisions (b) Union dues issue The general rule is that a settlement agreement with which the parties have complied bars subsequent litiga tion of presettlement conduct alleged to constitute unfair labor practices 25 Record evidence indicates that Re spondent in the instant proceeding fully complied with the settlement agreement in Case 18-CA-7822 Conse quently in view of Respondents compliance with the cited settlement agreement and the essentially unrelated nature of the alleged postsettlement violations it appears unnecessary to rescind the settlement agreement in order to effectuate the policies of the Act I shall therefore rec ommend that the agreement be reinstated and the allega tions concerning the dues issue be dismissed (c) Health insurance issue The record clearly indicates that Pioneer was eco nomically in serious trouble since 1981 and that one of its problems in this area was the burden of extremely high health insurance premiums During negotiations in the summer of 1982 Pioneer made its position perfectly clear that at the expiration of the then current contract it would discontinue the health insurance plan Though various tradeoffs were discussed during negotiations prior to the strike Pioneer never changed its position After the strike was initiated the Company advised the Union that as of October 1 Pioneer would cease paying premiums On November 18 it canceled its health insur ance policy retroactive to May 30 I find that the decision to terminate the health insur ance program was economically motivated that the Company negotiated long and hard but in good faith over the issue giving the Union the bargaining opportu nity to which it was entitled under the Act Finally after having bargained to impasse over the matter it imple mented its decision just as it had advised the Union it would In doing so it did not as alleged violate the Act 26 As to the decision of management to cancel the hospi talization plan effective the previous May I find no vio lation because the claims of all employees were fully paid and no employee was adversely affected by the fact that these claims were paid for directly by the Company rather than through the insurance carrier (d) The Longhood committee As of October 28 Service was still in its formative stage with most of its shareholders On that day at a meeting of Services stockholders it vas decided that a five member committee should be formed to handle problems arising out of Services cab owners and/or drivers lying about their location and thus stealing fares from other cab owners or drivers Although Service was still controlled by Pioneer and was not yet an independ ent entity the creation of this committee was clearly in contemplation of the time when Service would be wholly owned by its shareholders as well as during the interim formative period Following the decision to orga nize this committee on November 9 Barnhart advised Say of the decision and offered to meet and discuss the matter with him On November 17 at a regular bargain ing session the organization of the Longhood committee was fully discussed The Union took the position that it 25 Hollywood Roosevelt Hotel Co 235 NLRB 1397 (1978) 26 E I du Pont & Co 268 NLRB 1075 (1984) Industrial Waste Service 268 NLRB 1180 (1984) 1064 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD had always been within the Unions province to handle such matters and should remain its function after the for mation of Service since it would continue to represent the dnvers employed by Service Bankhart took the posi tion that the Union would not represent either the new cab owners/shareholders of Service nor their drivers and that they should have some means themselves of control ling such problems Thus with such completely diver gent views of the situation it is clear that impasse had been reached without hope of reaching any accord mu tually satisfactory to both sides Under these circum stances the subsequent implementation of the plan to or ganize the committee was permissible and not in viola tion of the Act 27 (e) Transferral of unit work to supervisors By letter dated November 17 Barnhart advised the Union of the contemplated use of one or more supervi sors to do the dispatching At the bargaining session held the same day the matter was discussed at length by Barn hart and Say Say objected to the use of supervisors doing unit work but Barnhart insisted on having this right not only during the strike but thereafter as well Thus it is once again clear that the Union was advised in advance of the Company s plan to use supervisors for dispatching after the strike and was given an opportunity to discuss the matter Discussions took place and neither party changed position Thus it can be said that impasse had been reached and the Company could thereafter make the change desired without violating the Act 28 (f) The two contract issue On September 20 when Barnhart and Sherman pro posed separate contracts with the Union one covering Pioneers drivers the other covering Services dispatch ers order takers gas people and starters they correctly explained that once the cabs were sold Pioneer would no longer have any employees and Service would then employ all the above classifications except drivers The Union resisted this proposal on the theory that it would still be representing drivers as well as the other classifi cations of employees after the sale of the cabs Barnhart and Sherman on the other hand suggested the two sepa rate contracts on the theory that Service would be an entirely separate newly created independently operated corporation with no driver employees for whom to bar gain while Pioneer would continue though temporarily to employ only drivers as of September 26 until it com pleted the sale of its cabs In view of the above finding that Service is neither the alter ego nor the successor of Pioneer and therefore has no obligation to recognize and bargain with the Union as the collective bargaining rep resentative of its employees I find also that Barnhart s suggestion of separately negotiated contracts was neither unrealistic nor violative of the Act 29 When on January 7 1983 Brunig representing Serv ice advised the Union that he would negotiate a con tract if the Union was able to establish majority status he did so lawfully because Service was at the time on the verge of becoming or was already independent net ther the alter ego nor the successor of Pioneer and therefore not obligated to bargain with the Union I therefore find no violation here 4 The alleged unfair labor practice strike The strike lasted from August 16 1982 to January 7 1983 Because I have found that Respondent did not commit any unfair labor practices either before or during this period I likewise find that the strike was neither caused by nor prolonged by any unfair labor practices The strike was purely economic in nature and this was so regardless of the Union s claims to the contrary and despite the picket sign language chosen 5 Rehiring and supersenionty issues As of January 7 1983 Service was or was in the process of becoming an entirely separate corporation neither the alter ego nor the successor of Pioneer As such it was not obligated to hire any of Pioneers stnk ing employees Its refusal to do so was not a violation of the Act As for Pioneer Barnhart received an unconditional offer from the Union on January 7 in which the Union offered to have the strikers return to work Later that day Barnhart announced that there would be certain conditions that had to be met before the striking employ ees would be taken back namely that the Union write the press release described above that a back to work agreement be negotiated and that a contract be signed by the parties Still later Barnhart told Say that employ ees would be recalled not on the basis of previously earned seniority but on the basis of shifts worked since August 15 On January 9 Barnhart repeated his contract and seniority conditions in writing and the following day the Union filed its refusal to bargain charge In a recent case30 the Board considered a set of facts similiar to those involved here In that case following an economic strike the Union made an unconditional offer to return to work on behalf of the employees The em ployer in that case agreed to take back the strikers pro vided the Union agree to the employers last contractual proposal and to superseniority for striker replacements already on the job The Union agreed as part of the back to work agreement to these conditions but charges were later filed and complaint issued The administrative law judge relying primarily on and quoting extensively from Erie Resistor3 i reached the following CONCLUSIONS OF LAW 27 Ibid 28 Ibid 29 The General Counsel s reliance on National Fresh Fruit & Vegetable Co 227 NLRB 2014 (1977) revd 565 F 2d 1331 (5th Cir 1978) is mis placed because the cited case and the instant case are clearly distinguish able on the facts 3 By insisting and conditioning reinstate ment of its employees upon acceptance of a final offer whereby their seniority rights were to be im so Gem City Ready Mix Co 270 NLRB 1260 (1984) Si NLRB v Erie Resistor Corp 373 U S 221 (1963) BLUE & WHITE CABS 1065 paired in favor of nonstriking employees Respond ent violated Section 8(a)(1) and (3) of the Act 4 By according preferential seniority for pur poses of retention recall and assignment of daily and weekend overtime work or other employment related conditions to Rodney Douglas Frank Baird and Dick Lockman over other employees for un lawfully discriminatory reasons Respondent violat ed Section 8(a)(1) and (3) of the Act The Board however reversed the administrative law judge stating The policy of the National Labor Relations Act is to encourage the practice and procedure of col lective bargaining as a means of resolving labor dis putes including the encouragement of the negotia tion of strike settlement agreements In furtherance of this public policy the Board long has recognized that statutory rights including even the fundamen tal right to strike can be waived it is clear that the Union with the subse quent concurrence of its membership waived full prestrike seniority on behalf of returning strikers in return for an opportunity to end the strike and return to work Under these circumstances it was satisfactorily demonstrated that awarding top se nionty to the two nonstriking employees and the strike replacement was a lawful implementation of a right clearly understood by all affected to have been created through the collective bargaining process Accordingly we shall dismiss the coin plaint in its entirety Thus applying the law of the cited case to the instant situation it appears to be quite obvious that if in the course of negotiating a strike settlement an employer and a union can arrive at an agreement whereby a union accepts the employers final offer which includes besides economic or contractual provisions also a waiver of se nionty rights clearly the employer does not violate the Act by proposing such an agreement as in the instant case even though it is rejected by the Union 32 For ob viously there cannot be an acceptance without an offer and highly unlikely that there will be a lawful waiver of seniority rights without the same being first proposed Having found that Pioneer s January 7 proposal33 was a lawful attempt to negotiate a strike settlement and having found also that neither Pioneer nor Service have committed any of the other unfair labor practices al leged I recommend that the complaint be dismissed in its entirety CONCLUSIONS OF LAW 1 Respondents are employers engaged in commerce within the meaning of Section 2(2) (6) and (7) of the Act 2 The Union is a labor organization within the mean ing of Section 2(5) of the Act 3 Respondents have not engaged in the unfair labor practices alleged in the complaint [Recommended Order for dismissal omitted from pub lication ] 32 The proposal apparently had little or no actual effect because Pio veer neither recalled its old employees nor hired new ones after the un conditional offer to return to work was made 83 I find Pioneers short lived demands for a back to-work agreement and a union press release concerning the strike s termination as part of the strike settlement to be nonviolative