All State Factors

National Labor Relations Board - Board Decisions

Sep 7, 1973

205 N.L.R.B. 1122 (N.L.R.B. 1973)

1122 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
All State Factors , Secured Party in Possession of
North Park Meat Company and Amalgamated Meat
Cutters & Butcher Workmen of North America, Lo-
cal 229, AFL-CIO. Case 21-CA-10810
September 7, 1973
DECISION AND ORDER
BY MEMBERS JENKINS, KENNEDY, AND PENELLO
On March 30, 1973, Administrative Law Judge
James T. Barker issued the attached Decision in this
proceeding. Thereafter, Respondent and the General
Counsel filed limited exceptions and supporting
briefs.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the Na-
tional Labor Relations Board has delegated its au-
thority in this proceeding to a three-member panel.
The Board has considered the record and the at-
tached Decision in light of the exceptions and briefs
and has decided to affirm the rulings, findings,' and
conclusions of the Administrative Law Judge and to
adopt his recommended Order, as herein modified.'
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor Rela-
tions Board adopts as its Order the recommended
Order of the Administrative Law Judge and hereby
orders that Respondent, All State Factors, Secured
Party in Possession of North Park Meat Company,
San Diego, California, its officers, agents, successors,
and assigns, shall take the action set forth in the said
recommended Order.
' In his Decision the Administrative Law Judge states that the effective
period of the contract between North Park and the Union was from October
1, 1972, until October 1, 1973 As the record shows, the effective date of the
contract began on October 1, 1970. This inadvertance is hereby corrected
2 We note and hereby correct the Administrative Law Judge 's inadvertent
use of the word "for" rather than the word "to" in the first sentence of the
fourth paragraph of that section of his Decision entitled "The Remedy "
DECISION
STATEMENT OF THE CASE
JAMES T. BARKER, Administrative Law Judge: This matter
was heard at San Diego, California, on December 19, 1972,
pursuant to a complaint and notice of hearing issued on
May 12, 1972, by the Acting Regional Director of the Na-
tional Labor Relations Board for Region 21, and an amend-
ment to the complaint issued by the Regional Director of
Region 21 on November 7, 1972. The complaint , as amend-
ed, arose from a charge filed on March 27, 1972, by Amalga-
mated Meat Cutters & Butcher Workmen of North Ameri-
ca, Local 229, AFL-CIO, hereinafter called the Union. The
amended complaint alleges violations of Section 8(a)(1) and
(5) of the National Labor Relations Act, as amended, here-
inafter called the Act. On February 6, 1973, the parties
timely filed briefs with me.
Upon the entire record in this case, and upon my observa-
tion of the witnesses and consideration of the briefs of the
parties, I make the following:
FINDINGS OF FACT
I JURISDICTIONAL FACTS
North Park Meat Company, Inc., hereinafter called
North Park, is a California corporation with a principal
office at San Diego, California. Prior to June 24, 1971,
North Park operated a wholesale and retail meat company
in San Diego.
All State Factors, hereinafter called All State or Respon-
dent, has been at all material times a commercial finance
company engaged in the factoring of accounts receivable. In
July 1970, a factor relationship between All State and North
Park was established and representatives of the respective
parties executed a financing statement filed pursuant to the
California Uniform Commercial Code. The statement was
duly filed with the Secretary of State of the State of Califor-
nia on July 3, 1970. By virtue of the transaction, All State
received a security interest in the entire assets of North
Park, including, inter alia, accounts receivable, inventories,
materials, fixtures, and machinery presently or prospective-
ly to be owned, held, acquired by, or payable to North Park,
then owned and managed by John Delfino.
On June 24, 1971, pursuant to the aforesaid security inter-
est which had remained intact, All State took possession of
the assets of North Park to protect North Park's continued
indebtedness to All State.
During the 12-month period commencing April 1970,
North Park purchased from Swift & Co. beef valued in
excess of $200,000 which had been shipped by Swift directly
from Tolleson, Arizona, to North Park at its San Diego
facility; and during the same period of time North Park
purchased from Swift & Co. pork valued at approximately
$150,000, which pork products were shipped from Sioux
City, Iowa, to San Diego, California. Thereafter, from June
1971 until April 1972, Swift & Co. made sales to All State
of pork valued at approximately $91,000, which pork prod-
ucts were shipped by Swift & Co. from its Sioux City, Iowa,
establishment to the North Park plant location in San Die-
go, California.
During the period July 1970 to September 10, 1971, the
North Park facility was operated as a retail and wholesale
establishment. The wholesale phase of the operation ac-
counted for more than 50 percent of the total volume of
business of North Park.'
Upon the basis of the foregoing, I find that the operations
of North Park and Respondent fall within the discretionary
i The foregoing is based upon a composite of the credited testimony of
Leon Mansfield, Richard Claus, and documentary evidence of record
205 NLRB No. 131
ALL STATE FACTORS 1123
jurisdictional standards of the National Labor Relations
Board, and that it furthers the purposes and policies of the
Act to assert jurisdiction over Respondent herein. Siemons
Mailing Service, 122 NLRB 81; Standard Plumbing and
Heating, Inc., 185 NLRB 444; E. Paturzo, Bro. & Son, Inc.,
114 NLRB 1161.
II THE LABOR ORGANIZATION INVOLVED
Amalgamated Meat Cutters & Butcher Workmen of
North America , Local 229, AFL-CIO, is a labor organiza-
tion within the meaning of Section 2(5) of the Act.
III THE ALLEGED UNFAIR LABOR PRACTICES
A. The Issues
The principal issues in this case are whether Respondent
is a successor employer to North Park , whether Respondent
may be found to have assumed the terms of the North Park
collective-bargaining agreement with the Union to the ex-
tent warranting a finding that , viewed in light of the deci-
sion in N.L.R.B. v. Burns International Security Service, Inc.,
406 U.S. 272 ( 1972), Respondent is bound by the terms of
the collective-bargaining agreement between North Park
and the Union ; and whether Respondent in violation of
Section 8(a)(5) and ( 1) withdrew recognition from the
Union , unilaterally changed to benefits and working condi-
tions of unit employees , and refused to recognize and bar-
gain collectively with the Union as the exclusive bargaining
representative of Respondent's employees concerning the
effects of the March 17, 1972, plant closure upon unit em-
ployees.
B. Pertinent Facts
1. Background facts
At all pertinent times prior to June 24, 1971, John Delfino
owned and managed North Park. As found above and as
discussed more fully below, until September 1971, North
Park engaged in the wholesale and retail meat business at
its San Diego location. In October 1970, John Delfino, on
behalf of North Park, became signatory to a collective-
bargaining agreement between the Union and the Jobbing
Butchers of San Diego County. The agreement, entitled the
Jobber's Agreement, by its terms, was to be effective from
October 1, 1972, to October 1, 1973. The agreement cov-
ered, inter alia , job classifications in the wholesale phase of
North Park's operation in which employees of North Park
were at pertinent times employed. In accordance with the
union-security provisions of the Jobber's Agreement, the
North Park personnel employed in the wholesale operation
were represented by the Union. The agreement provided for
referrals through the Union's hiring hall. It also contained
a schedule of wages, augmented by a cost-of-living clause,
and vacation, health and welfare, and pension benefit provi-
sions.
Article XIV of the agreement, entitled "Change of Own-
ership," provides 2 in pertinent part as follows:
(a) In the event of a change of ownership of the
operation, whether it be voluntary, involuntary, or by
operation of law, the Employer shall immediately pay
off all obligations, including accumulated wages, pro-
rata of earned vacations, sick and accident benefits,
accumulated prior to the date of the change of owner-
ship.
(b) If any owner or Employer hereunder sells, leases,
or transfers his business, or any part thereof, whether
voluntary, involuntary, or by operation of law, it shall
be his obligation to advise the successor, lessee or trans-
feree of the existence of this Agreement and such suc-
cessor, lessee or transferee shall be bound fully by the
terms of this Agreement in effect at the time of the sale,
lease or transfer ; and in the event the seller or transfer-
rer fails to pay his obligations hereunder, shall assume
all obligations of this Agreement in the place and stead
of the Employer signatory thereto the same as if he had
been the owner or Employer from the beginning.
As delineated above, on June 24, 1971, Respondent took
possession of the assets of North Park pursuant to the rights,
obligations, limitations, and procedures governed and con-
trolled by the California Commercial Code which, at section
9504 thereof, provides, inter aha:
(1) A secured party after default may sell, lease, or
otherwise dispose of any or all of the collateral in its
then condition or following any commercially reason-
able preparation or processing .. .
(2) If the security interest secures an indebtedness,
the secured party must account to the debtor for any
surplus, and, unless otherwise agreed, the debtor is lia-
ble for any deficiency. But if the underlying transaction
was a sale of accounts, contract rights, or chattel paper,
the debtor is entitled to any surplus or is liable for any
deficiency only if the security agreement so provides.
(3) A sale or release of collateral may be made by a
unit or in parcels, at wholesale or retail and at any time
and place and on any terms, provided that the secured
party acts in good faith and in a commercially reason-
able manner.
Section 1201.37 of the Uniform Commercial Code pro-
vides:
A security interest means an interest in personal pro-
perty or fixtures which secures payment or perfor-
mance of an obligation . . . the term also includes any
interest of a buyer of accounts, chattel paper or con-
tract rights. .. .
2 On October 30, 1970, John Delfino had executed an interim agreement
which incorporated the terms of a retail distribution agreement about to
expire In substance this agreement with the Union covered terms and condi-
tions of employment of employees working in the retail phase of North Park's
operations The retail distribution agreement contained a change of owner-
ship clause substantively the equivalent of that contained in the Jobber's
Agreement The General Counsel does not contend that All State, the Re-
spondent herein, violated any provisions of the retail agreement
1124 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Upon taking possession of the North Park facility, Re-
spondent posted the following notice on the North Park
premises:
Notice of possession to all interested parties: These
premises and all the assets of North Park Meat Compa-
ny, Incorporated, and John Delfino, are now in the
possession of All State Factors pursuant to the obliga-
tions owed to All State Factors by North Park Meat
Company, Incorporated, and John Delfino and that
security interest is given to secure their obligations.
Authority for this notice refer to UCC-l, file S69079-
500 and 70063262. For further information, contact All
State Factors, 935C Street, San Diego, Richard Claus
at 233-7681.
At all pertinent times after June 24, the notice remained
posted.
At a time proximate to the posting of the notice, Archie
Jacobs, president of Respondent, spoke with some employ-
ees at the North Park premises and informed them that
Delfino "was in financial trouble" and All State was "trying
to help him out."
2. The alleged unlawful conduct
a. The "successorship" facts
When it took possession of the facility, Respondent com-
menced the payment of wages to employees and made ap-
propriate tax and unemployment insurance deductions. The
checks covering wages were drawn upon the All State ac-
count and the remittances made to the government for tax
and insurance deductions were made under the All State tax
number.3
Respondent took possession of North Park on June 24
with no intention to operate North Park as an entity under
its own control and management. No consideration in the
form of a fixed or stipulated sum of money passed between
All State and North Park. Possession was taken in order to
protect Respondent' s interest in the funds which it had
advanced to North Park on accounts receivable. It was
determined that the funds so advanced exceeded by more
than $50,000 the value of North Park's physical assets and
accounts receivable. After it assumed possession of North
Park, Respondent undertook immediate and continuing ef-
forts to obtain a purchaser of the North Park operation
upon the assumption that the enterprise was more valuable
as a going concern than as a liquidated one. Respondent
was unsuccessful in obtaining a buyer for the properties and
business.4
After Respondent assumed possession, John Delfino re-
mained as manager and as the supervisor of the operation.
All State continued to operate under its own business licen-
ses. Frank Cappallo, a representative of Respondent, con-
sulted and advised Delfino on a continuing and recurring
basis throughout the pertinent times subsequent to June 24.
3 The foregoing is based upon the credited testimony of Richard Claus and
Leon Mansfield
4 The foregoing is based upon the credited testimony of Richard Claus
Archie Jacobs, president of All State, and Richard Claus,
secretary-treasurer of All State, maintained continuing
scrutiny of the North Park operations. After June 24, the
operations continued from the same location under the
same trade name and with the same equipment as had been
used by North Park prior to June 24. No modifications were
made in thejob categories employed or utilized in the opera-
tions and the number of personnel remained approximately
the same.5 The duties and the compensation of the employ-
ee complement remained the same as before June 24, and
employees continued to have use of the employee room at
the North Park facility and to receive coffeebreaks.b
b. The Union and Respondent consult
Arthur Meyer, administrative assistant and recording
secretary of the Union, suffered a heart attack in May and
returned to work in July. By virtue of documents received
from San Diego Wholesale Credit Men's Association dated
July 2, 1971, Meyer first learned that Respondent had be-
come "involved" in the operation of North Park? As a
consequence, Meyer initiated a telephone call to Claus and
inquired if All State was operating North Park. Claus an-
swered in the affirmative and Meyer attempted to arrange
a meeting for the purpose of discussing All State's obliga-
tions under the collective-bargaining agreement between
the Union and North Park. In this connection, Meyer in-
formed Claus that the agreement rendered All State respon-
sible as a successor under the contract. Claus was
noncommittal and stated that Jacobs, who was out of the
city at the time of the telephone conversation, would have
to make a determination with respect to that matter. A
meeting was arranged for the following week.
Meyer met with Jacobs and Claus as scheduled. During
the course of the meeting, Meyer pointed out the successor-
ship clause in the Union's collective-bargaining agreement
with North Park, and asserted that Respondent was respon-
sible for fulfilling the terms of the agreement, including the
obligation to pay the wages and the employee benefits.
Meyer also asserted that Respondent was responsible for
the payment of back wages and other obligations which had
accrued with respect to employee benefits under the collec-
tive-bargaining agreement. In this latter regard, Meyer not-
ed that certain contributions to the health and welfare fund
were due and owing and that Conrad Palladino, an employ-
ee, was due vacation benefits for which he had not been
compensated. Additionally, as the meeting progressed,
Meyer attempted to delineate the identity and duties of the
personnel employed in the operation. Respondent took the
position that it was responsible for wages and contributions
only from July 1, and thereafter. No understandings were
5 There appears to have been some turnover in personnel but the small
complement employed by North Park prior to June 24, continued to be
employed at the North Park facility for a substantial period of time after the
June 24 date A large percentage of the original complement continued to be
employed until operations ceased
6 The foregoing is based upon a consideration of the testimony of Richard
Claus, Leon Mansfield, Paul Blair , and Clifford Glass
i The documents in question purport to delineate the details of the creditor
relationship between All State and North Park In the meantime , Ann Long,
office manager of the firm serving as the administrator of the Union's pen-
sion and benefit funds, received a copy of the same notice
ALL STATE FACTORS 1125
reached during the course of the meeting and the parties
agreed to meet at a subsequent time.
Approximately 2 weeks later, Meyer met with Jacobs and
Claus. This meeting, like the earlier one, dealt with the
asserted successorship responsibilities of All State and its
alleged obligation to satisfy delinquencies in payments to
the health and welfare and pension trust funds. Additional-
ly, during the course of the meeting, Meyer established that
all of the nonclerical employees then working in the opera-
tion were union members.
c. Prevailing terms of employment
At the time of the second meeting, Respondent was
adhering to the wage scale contained in the collective-bar-
gaining agreement between the Union and North Park and
was timely making current contributions to the health and
welfare and pension trust funds. Assurances were given
Meyer that Respondent would continue to do so pros-
pectively. However, during the course of the second meet-
ing, no commitment was made by either Jacobs or Claus to
make payments into the described funds covering accruals
prior to July 1, 1971. Meyer did not request Respondent to
sign a collective-bargaining agreement and no commitment
to do so was made.
On September 9, 1971, pursuant to the Union's request,
Respondent compensated Palladino for vacation benefits
which had accrued to him under the collective-bargaining
agreement prior to the time Respondent took possession of
the North Park facility.
In mid-September, 1971, Respondent notified the Union
that its retail operation was being discontinued and that the
personnel employed in the retail phase of the operation
would be transferred to the wholesale division with no loss
of employment. Thereafter, by letter dated September 10,
the administrator was advised by the Union of the discon-
tinuation of the retail operations of North Park and the
transfer of five designated employees to the "jobbing de-
partment." Subsequently, the administrator billed Respon-
dent for contributions due the trust funds under the terms
of the Jobber's Agreement by virtue of the employment of
the five transferred employees. Thereafter, by check dated
January 7, 1972, Respondent remitted appropriate pay-
ments to both trust funds.9 The checks covering the remit-
tance bore an imprint describing All State as "Secured Party
in Possession of North Park Meat Company, Inc."
In the meantime, wage increases which were to become
effective on October 15, 1971, as well as increased contribu-
tions to the health and welfare and pension funds which
were to take place during 1971, had been subjected to the
wage and price freeze which was instituted by the Federal
government under the Economic Stabilization Act of 1970.
In due course, these increases were given clearance by the
8 The foregoing is based upon the testimony of Arthur Meyer considered
in light of the testimony of Richard Claus and Ann Long and documentary
evidence of record I do not credit Meyer's testimony to the extent it may
infer that Respondent agreed to follow all the terms of the existing agree-
ment
9 The parties through consultation made adjustments deemed appropriate
in the billing as originally rendered and the agreed-upon amount was submit-
ted by check of January 7
Government and pursuant to notice the employees received
the retroactive wage increment due them under the collec-
tive-bargaining agreement. Wages were prospectively paid
at the higher contractual rate. Similarly, on February 2,
1972, Respondent remitted appropriate retroactive pay-
ments to the pension trust fund.
The last billing made by the administrator of the trust
funds was one covering the period December 1, 1971, to
February 29, 1972. Respondent made no remittance to the
administrator pursuant to the billing and no further remit-
tances to the trust funds were thereafter made.10
In the interim, Meyer had maintained a weekly contact
with Respondent in an effort to police its adherence to wage
scales and benefit provisions. He made continuing demands
for full observance of wage and benefit standards and dur-
ing the period of time in question undertook discussions
with Respondent relating to vacation pay allegedly due a
former employee, Hicks, whom the Respondent had termi-
nated. Meyer further discussed with Respondent matters
relating to the classification and wage scale paid employee
Blair.' Moreover, during the early part of 1972, Meyer
discussed with Respondent's representatives the possible
layoff of certain of the employees in order to effectuate
needed efficiencies and economies. Meyer objected to the
proposed course of action. Respondent did not follow
through with its plan.
In the meantime, Clifford Glass, a member of the Union,
was employed at the North Park facility through the aus-
pices of the Union. 12
d. The operations cease
On March 15, 1972, Frank Cappallo, Respondent's repre-
sentative at the North Park premises, spoke to employees
and informed them that the premises would be shut down
for a period of time. He informed Glass that he would be
laid off while the plant was closed down for a week to permit
the premises to be remodeled. Thereafter the same af-
ternoon, employees Palladino and Glass informed Meyer of
the scheduled shutdown. Meyer had received conflicting
rumors concerning the nature of the shutdown and was
uncertain whether the plant was to be closed permanently
or for a few days only. He consulted with counsel for the
Union who on March 15 dispatched the following letter to
Respondent:
Please be advised that this office represents Butchers
Local Union 229, the exclusive collective-bargaining
representative of your employees.
At approximately 3:00 p.m. on March 15, 1972, it
came to the attention of Butchers Local 229 that you
intend to close your shop at 5:00 p.m. on Friday,
March 17, 1972, and lay off all employees currently
represented by Butchers Local 229.
On behalf of Butchers Local 229, this office hereby
demands collective bargaining negotiations between
yourselves and Butchers Local 229 with regard to your
The foregoing is based upon the credited testimony of Ann Long and
documentary evidence of record
11 Respondent disclaimed obligations with respect to each of the aforesaid
employees and the issues remained unresolved
The foregoing is based upon the credited testimony of Arthur Meyer.
1126 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
unilateral decision to close the shop and lay off existing
employees. On behalf of Local 229, we further demand
collective bargaining negotiations about the effect of
this decision upon your employees.
These demands are made upon you as a result of
your obligation to bargain in good faith with Butchers
Local 229 since you are, in fact, a successor Employer
to North Park Meat Company.
In order that negotiations may be completed prior to
the closing of your plant on Friday, March 17, it is
urgent that you communicate with this office on or
before 12:00 noon, March 16, 1972, to arrange negotia-
tions.
If you have any questions in this regard, please feel
free to communicate with the undersigned.
The following day, March 16, Meyer went to the premises
of North Park and spoke with Cappallo and Claus. Meyer
was informed that the plant was going to be closed for a few
days for refurbishment and would reopen. Meyer referred
to the Union's letter of the previous day demanding negotia-
tions . He was informed by Cappallo and Claus that there
was nothing to negotiate "at the present time."
Respondent did not comply with the Union's demand as
contained in the letter of March 15. On March 17 the prem-
ises were closed and did not thereafter reopen.
On March 21, 1972, counsel for Respondent wrote in
pertinent part as follows:
Be advised that with reference to your letter of March
15, 1972, All State Factors rejects the demands as set
forth in said letter and further rejects that they are
under any obligation to even recognize any right in
Butchers' local Union 229. All State, therefore, further
rejects the allegation in your correspondence indicating
that Butchers' Local Union 229 is the exclusive bar-
gaining representative of any employee of All State and
further rejects demand to conduct negotiations and
further rejects any demand based upon any alleged
allegation to bargain in finality, rejects any allegation
that All State is the successor-employer of North Park
Meat Company, or to any other company.
Conclusions
The General Counsel contends that Respondent is a suc-
cessor employer to North Park and therefore had the obliga-
tion under Section 8(a)(5) of the Act to recognize and
bargain with the Union as the majority representative of the
employees in the established bargaining unit which contin-
ued to be appropriate after Respondent became North
Park's successor. Included also in the obligation imposed
upon Respondent by the Act, contends the General Coun-
sel, was the duty to bargain in good faith with the Union
before effectuating changes in the existing employee bene-
fits and to have bargained with the Union concerning the
effects upon unit employees of closing down the operation
of the San Diego facility. Further, the General Counsel
asserts that, in the factual circumstances of this case, Re-
spondent must be found to have adopted the collective-
bargaining agreement of its predecessor, North Park, and
that under an appropriate application of the decision in
N.L.R.B. v. Burns International Security Services, Inc., supra,
must therefore be found to have become bound by the terms
of the agreement.
On the other hand, Respondent denies that it was the
successor to North Park, and, in substance, contends that
as a factor it was not an employer in the normal sense but
essentially a foreclosing creditor with the legal obligation to
liquidate the North Park property in a commercially reason-
able manner. Alternatively, Respondent contends that, if it
is found to have been a successor, no obligation to bargain
collectively with the Union arose because no demand for
bargaining was made upon Respondent by the Union until
the North Park operation had been virtually liquidated in
accordance with the obligations devolving upon Respon-
dent under controlling state statutes.
At the outset, I conclude and find that, whatever the
identity of the employer of the employees comprising the
work complement at the North Park facility, the Union at
all material times remained the majority representative.
This status is presumed from the existence of the collective-
bargaining agreement, lawful on its face, to which the
Union, together with North Park, was a signatory.13 No
evidence was offered to cast doubt upon the majority status
of the Union after Respondent emerged as a viable force in
the North Park operation. Additionally, there is indepen-
dent record support for a finding that the composition of the
unit remained virtually unchanged after Respondent en-
tered the picture and that at pertinent times was comprised
of members of the Union.14
Proceeding from this background premise, I find that
upon application of normal successorship criteria Respon-
dent would be found to have been a successor employer to
North Park.15 I reach this conclusion because the record
evidence establishes that following June 24, 1971, when Re-
spondent took possession of North Park, the trade name,
location, nature, employee complement, hours of work, ba-
sic working conditions, equipment, and facilities of the en-
terprise remained virtually unchanged.16 Although the retail
phase of the operation was discontinued some 3 months
after Respondent entered upon the scene in an active capac-
ity, the operation continued, as before , to be one engaged
in the sale of meat products.17
It remains necessary, however, to resolve the merits of
Respondent's contention that the nature of its factor rela-
tionship to North Park relieved it from any collective-bar-
gaining obligation which the Act would normally impose
upon an employer. I find that this case is controlled by the
decision of the Board in Martin White, Jr., Inc., 165 NLRB
520. In the cited case, an executor held a mandate under the
will of the deceased president and sole stockholder of a
13 Barrington Plaza, 185 NLRB 962 , enfd in pertinent part sub nom
N.L R B v. Tragniew, 470 F.2d 669 (C.A. 9, 1972).
14 The appropriate unit, of course , was "all employees of the employer" at
the San Diego , California, facility
15 See Maintenance, Incorporated, 148 NLRB 1299, 1301, Bachrodt Chevro-
let Co, 186 NLRB 1035.
16 John Delfino continued to function in the capacity of principal supervi-
sor, although his former unfettered freedom to make managerial judgments
was, to a degree , limited by the participation of representatives of Respon-
dent in the day-to-day affairs of the enterprise.
17 Cf Atlantic Technical Services Corporation, 202 NLRB No. 13.
ALL STATE FACTORS
corporate entity to sell the capital stock of the deceased and
to liquidate the assets of the corporation within one year
from the deceased's death. In substance, the Board held that
as the legal operator of the corporation the executor had the
obligation to recognize and bargain with the certified in-
cumbent union as the representative of the corporation's
employees. Cogently applicable here was the Board's rejec-
tion of the executor's contention that because of his special
status vis-a-vis the corporation, and because of the immi-
nence of dissolution of the corporation, the bargaining obli-
gation normally assessible against a successor under the Act
should not be imposed. In rejecting this contention it was
stated in the Martin White decision, at page 525 thereof:
Thus, so long as [the Respondent] was maintaining
its corporate existence and the business enterprise, as
was the case here, the Union continued to be the repre-
sentative of its employees, and the operator of the en-
terprise had the obligation to recognize and bargain
with the Union as such representative. And, if dissolu-
tion were to occur so that the employing entity would
continue substantially unchanged, the purchaser would
also be considered a successor and would have the
same bargaining obligation as its predecessor... .
I discern no significant basis for distinguishing the plight
of the Respondent herein from that of the executor in Mar-
tin White. Here, as in Martin White, the enterprise affected
by the changed circumstances continued to operate in a
viable fashion; on a parity with the executor in the cited
case , Respondent herein, through its president and desig-
nated agents, maintained efficacious scrutiny and oversight
of the North Park business operation; and the interests and
rights of the unit employees in a continuity of representa-
tion rights was no less than in Martin White.is
Upon the foregoing considerations, I find that the princi-
ples underlying the decision in Martin White require rejec-
tion of Respondent's contention that the normal
successorship obligations under the Act should not be im-
posed upon it.19 Specifically, I find Respondent was the
successor to North Park with the bargaining obligations
which normally attend that status.
In delineating the extent and basis of this bargaining
obligation, it is essential first to find, however, that, contrary
to the General Counsel, Respondent may not be deemed
under the rationale of the Burns decision to have adopted
the terms of the North Park collective-bargaining agree-
ment . The evidence establishes that, despite the Union's
demands, Respondent pointedly refused to adopt the agree-
ment, in toto, and no written instrument binding Respon-
dent to the contracts' terms was ever executed? Upon an
analysis of the record evidence, viewed in light of the thrust
of the opinion of the Court in Burns, which, as I compre-
is It is revealed in the record , as found, that Respondent sought diligently
to dispose of the North Park business as a going concern and thus anticipated
a continuity of operations also, albeit through a new and different owner.
19 See also Paul Stevens, Receiver of Carolina Scenic Stages , et at., 109
NLRB 86, 97-98 The General Counsel herein is proceeding upon a succes-
sorship theory and does not contend that Respondent became the alter ego
of North Park Accordingly , Stateside Shipyard and Marina, Inc., 178 NLRB
516 cited by the Charging Party is not controlling herein
2d Respondent's defense of the Statute of Frauds is inapposite to the facts
of this case
1127
hend it, counsels utmost restraint in applying an adoption
theory, absent clear and convincing evidence of consent,
either actual or constructive, I am convinced, and find, that
both parties, the Union as well as the Respondent, through
separate but realistic appraisals of the balance of economic
strength, reached a tacit understanding of the terms and
conditions of employment by which the San Diego facility
could and would be manned and operated under
Respondent's direction. Thus, I find that Respondent
adopted as its own the contractual wage scale that had
theretofore been in effect, and agreed, prospectively, to con-
tribute at contractual rates to the health or welfare and
pension funds. These became terms and conditions in prac-
tical and actual terms, through the good offices and active
role of the Union as a viable voice and force acting on
behalf of the employees as a group. For its part, Respondent
applied so much of the North Park contract as was benefi-
cial to it, refusing at the same time to apply other of its terms
and 21 thus achieved stability in manpower, and continuity
in operations, during a critical transitional phase. For its
part, the Union, on behalf of the employees, achieved con-
tinued employment, at contractual wage levels, continued
insurance and pension coverage and time in which to search
the labor market for better job prospects 22 Perhaps the
employees hoped also for continuity of employment should
the plant be purchased by an employer disposed to employ
them. But all concerned knew that Respondent' s time on the
scene was to be limited and a sale, or liquidation of some
variety, was very much in the offing. While the Respondent,
by its conduct, gave tacit, if not explicit, recognition to the
Union, and negotiated with it on a variety of problems
related to the transition, upon the record as a whole, I am
unable to conclude that Respondent may be found to have
observed the North Park agreement to an extent and in a
manner sufficient to have become bound in a constructively
consensual way to the terms of the agreement.
I find nevertheless that under Section 8(d) and Section
8(a)(5) of the Act certain bargaining duties did devolve
upon Respondent by reason of the relationship of the Re-
spondent and the Union to the enterprise. Minimally, these
duties included the obligation to recognize the Union as the
majority representative of the unit of employees which re-
mained intact after Respondent became the successor of
North Park 23 Additionally, this obligation rendered it ne-
cessary for Respondent pursuant to a valid demand of the
nature here made by the Union on March 15 to have bar-
gained in good faith with the union concerning the effects
of the closing of the North Park facility upon unit employ-
ees.24 Nothing in the duty imposed upon Respondent by
state law to liquidate the business property in a commercial-
2i Some vacation benefits were paid Other claims were rejected. I am
unable to conclude that Respondent agreed to include contractual vacation
benefits as a term and condition of employment
22 It is noteworthy that in contending that Respondent was bound to all
of the contract 's terms , the Union did not treaten economic action to support
its demands.
23 See N L R.B v Burns International Security Services, Inc., supra This
obligation had its genesis in the Union's continued and unchallenged majori-
ty status in an appropriate unit employing personnel engaged in the functions
attendant to the operation of the wholesale aspects of the North Park enter-
pnse The absence of Board certification is not grounds for distinguishing
Burns. See Barrington Plaza, supra
24 Transmanne Navigation , 170 NLRB 389.
1128 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
ly reasonable manner precluded Respondent from pursuing
that course; nothing explains the misleading statements
made to employees concerning the purpose and intended
duration of the shutdown. The issuance of advance notice
was clearly in order. None was given.
I conclude and find that by ignoring the Union's March
15 bargaining demand, Respondent, in legal and practical
terms , deprived the Union of its statutory right to recogni-
tion and to negotiate in good faith on the bargainable issue
of the effects of plant closure upon unit employees.
Respondent also failed its bargaining duty by effecting
unilateral changes in benefits which, I find, had become
accepted terms and conditions of employment for the em-
ployees which Respondent had chosen to utilize for contin-
uing the operation of the enterprise 25 Thus, as found, the
record reveals that not only did Respondent apply the wage
scale provided by the collective-bargaining agreement, but,
pursuant to union demand and after consultation it, made
contributions at the contractual rate to the health and wel-
fare and pension trust funds and continued those contribu-
tions on a current basis through November 1972. Having
made remittances to the funds at the behest of the bargain-
ing representative of benefitted unit employees, and being
fully aware that the Union was pressing for the maintenance
of a parity of benefits, it became incumbent upon Respon-
dent to treat with the Union before reaching a unilateral
decision to discontinue the contributions to the trust funds.
No specific prior bargaining demand was necessary for the
right to be consulted was inherent in the nature of the
relationship which had featured both tacit and overt aver-
rals by the Union of recognition rights, recurring consulta-
tion concerning adherence to employment terms,
adjustment of benefits claims pursuant to union demand
and use of the hiring auspices of the Union.26
Upon the basis of the foregoing findings of fact, and upon
the entire record in this case, I make the following:
CONCLUSIONS OF LAW
1. All State Factors, Secured Party in Possession of
North Park Meat Company, and North Park Meat Compa-
ny have been at times pertinent herein employers within the
meaning of Section 2(2) of the Act.
2. All State Factors, Secured Party in Possession of
North Park Meat Company is the successor employer to
North Park Meat Company within the meaning of Section
2(2) of the Act and is an employer engaged in commerce
within the meaning of Section 2(6) and (7) of the Act.
3. Amalgamated Meat Cutters & Butcher Workmen of
North America, Local 299, AFL-CIO , is a labor organiza-
tion within the meaning of Section 2(5) of the Act.
4. All employees employed at the San Diego, California,
facility of Respondent constitute a unit appropriate for the
purposes of collective bargaining within the meaning of
25 Respondent appears to have made no effort to reconstitute or revitalize
the complement of employees and acquiesced in the retention of the comple-
ment virtually unchanged
26 See N L R B v Katz, 369 U S 736 (1962), Smith Cabinet Manufacturing
Companies, Inc, 147 NLRB 1506 See also Howard Johnson Company, 198
NLRB No 98, Good Foods Manufacturing, 200 NLRB No 86
Section 9(b) of the Act.
5. At all times since June 24, 1971, the Union has been
the majority collective bargaining representative of the em-
ployees in the above-described appropriate collective-bar-
gaining unit.
6. On or about October 1, 1970, North Park entered into
a collective-bargaining agreement with the Union whereby
North Park agreed to recognize the Union as the collective-
bargaining representative of all employees employed by it,
and, inter aha, agreed to pay certain wage rates and further
agreed to make contribution to the San Diego and Imperial
Counties Butchers' and Food Employers' Pension and
Health and Welfare Trust Funds pursuant to specified for-
mulae.
7. On and after June 24, 1971, Respondent, by its con-
duct, including acquiescence in the Union's demands,
adopted prevailing contractual wage rates as its own and
agreed to make, and did make submissions of contributions
to the health and welfare and pension trust funds described
above, according to the formulae and the aforesaid con-
tract.
8. On or about January 7, 1972, Respondent unilaterally
discontinued making contributions to the health and wel-
fare and pension trust funds, this in contravention of the
terms which through practice and usage it had established
as terms and conditions of employment of its employees.
9. On or about March 15, 1972, Respondent failed and
refused to comply with the Union's request that it bargain
in good faith with the Union as the collective-bargaining
representative of Respondent's employees, concerning the
effeect of the Respondent's decision to close its business
and lay off unit employees.
10. On March 17, 1972, Respondent, without engaging in
collective bargaining with the Union closed its San Diego,
California, facility and laid off all employees in the collec-
tive-bargaining unit represented by the Union.
11. By failing and refusing since January 7, 1972, to make
contributions to the health and welfare pension trust funds
covering unit employees; by failing to honor the March 15,
1972, request of the Union to engage in collective bargain-
ing with it concerning the effects of its planned March 17,
1972, closure of the plant and layoff of unit personnel; by
effectuating the plant closure and layoff of unit employees
represented by the unit without engaging in collective bar-
gaining with the Union; and by effectively withdrawing
recognition from the Union, the Respondent has engaged in
unfair labor practices within the meaning of Section 8(a)(5)
and (1) of the Act.
12. The aforesaid unfair labor practices are unfair labor
practices affecting commerce within the meaning of Section
2(6) and (7) of the Act.
THE REMEDY
Having found that Respondent has engaged in unfair
labor practices in violation of Section 8(a)(5) and (1) of the
Act, I shall recommend that it cease and desist therefrom
and take certain affirmative action designed to effectuate
the policies of the Act.
Having found that Respondent failed and refused to
comply with the Union's March 15, 1972, demand to bar-
ALL STATE FACTORS 1129
gain concerning the effect upon unit employees of closing
the San Diego facility, and the consequent layoff of unit
employees, I shall order that Respondent cease and desist
from refusing to recognize and bargain collectively with the
Union as the exclusive collective-bargaining representatives
of employees in the unit hereinabove found appropriate,
with respect to the economic effects upon unit employees of
the above-described actions, and, upon request, bargain col-
lectively with the Union with respect to the economic effects
of the plant closure and consequent layoff of unit employ-
ees, and if any understanding is reached, embody such un-
derstanding in a signed agreement.
I shall further order Respondent to make whole all em-
ployees who were laid off by virtue of the unilateral decision
of Respondent to close the plant on March 17, 1972, by
payment to said employees at their normal rates of pay in
effeect on March 15, from 5 days after the date of this
Decision until the occurrence of the earliest of the following
conditions:
(1) The date Respondent bargains for agreement with the
Union on those subjects pertaining to the effects on unit
employees of the closing of the San Diego, California prem-
ises; (2) a bona fide impasse in bargaining; (3) the failure
of the Union to request bargaining within 5 days of this
Decision, or to commence negotiations within 5 days of the
Respondent's notice of its desire to bargain with the Union;
or (4) the subsequent failure of the Union to bargain in good
faith. In no event shall the amounts to be paid the employ-
ees be less than the amounts the employees would have
earned as wages during a 2-week period of employment; nor
shall the sum paid to any of the employees exceed the
amount he would have earned as wages from March 17,
1972, to the date he secured equivalent employment else-
where. See Royal Plating and Polishing Co., Inc., 160 NLRB
990, and Transmarme Navigation, 170 NLRB 389. Said sums
shall be computed in accordance with the formula set forth
in F. W. Woolworth Company, 90 NLRB 289, together with
interest at the rate of 6 percent per annum as rovided in
Isis Plumbing & Heating Co., 138 NLRB 716.2f
I shall further order Respondent to make all contribu-
tions due and owing to the administrator of the San Diego
and Imperial Counties Butchers' and Food Employers' Pen-
sion and Health and Welfare Trust Funds as would be
required by full observance of the formulae it adopted as a
term of employment and which was given application by
Respondent in making remittances to the administrator of
the trust funds, the amount of the remittances here required
to be ascertained in light of individual employee backpay
entitlement as determined through an application of the
make whole provisions above set forth.
27 1 have considered the fact that the employees were at all times aware that
Respondent was a creditor in possession of the business, and I presume
knowledge on the part of the employees of Respondent's intentions to sell
the business as a going enterprise Thus, the employees may well have as-
sumed a known risk in continuing their employment in the face of the
potentialities implicit in the aforesaid circumstance However, considering
the fact that Respondent appears intentionally to have mislead the employees
concerning the purposes of the closure and considering further the absence
of any prior declaration of an impending , imminent shutdown of the opera-
tions, I shall not depart from the remedy applied by the Board in Transmanne
and Royal Plating, cited above
Upon the foregoing findings of fact, conclusion of law,
and the entire record, and pursuant to Section 10(c) of the
Act, I hereby issue the following recommended:
ORDER 28
Respondent, All States Factors, Secured Party in Posses-
sion of North Park Meat Company, its officers, agents,
successors, and assigns, shall:
1. Cease and desist from:
(a) Refusing to bargain, upon request, with Amalgamat-
ed Meat Cutters & Butcher Workmen of North America,
Local 229, AFL-CIO, as the representative of all of its
employees at its San Diego, California facility.
(b) Effecting changes in preexisting employment benefits
and terms and conditions of employment without consult-
ing the statutory representative of its employees.
(c) Withdrawing recognition from, or failing and refus-
ing to recognize, Amalgamated Meat Cutters & Butcher
Workmen of North America, Local 229, AFL-CIO, as the
statutory representative of its employees.
(d) In any like or related manner, interfering with, re-
straining, or coercing its employees in the exercise of their
rights to self-organization, to form, join or assist the above-
named union or any other labor organization, to bargain
collectively through representatives of their own choosing,
and to engage in other concerted activities for the purpose
of collective bargaining or other mutual aid or protection,
or to refrain from any or all such activities.
2. Take the following affirmative action which is deemed
necessary to effectuate the policies of the Act:
(a) Upon request, bargain with the above-named Union
as the exclusive representative of the employees in the unit
defined above with respect to the effect upon unit employ-
ees of the decision to close the San Diego, California, facili-
ty, and reduce to writing any agreement reached as a result
of such bargaining.
(b) In the manner and to the extent set forth in the sec-
tion of this decision entitled "The Remedy" make whole the
employees of the San Diego, California, facility for any loss
of earnings they may have suffered as a result of the closing
of the San Diego, California, facility.
(c) In the manner and to the extent provided in the sec-
tion of this decision entitled "The Remedy" make all re-
quired contributions into the San Diego and Imperial
County Butchers' and Food Employers' Pension , Health
and Welfare Trust Funds.
(d) Preserve and, upon request, make available to the
National Labor Relations Board or its agent , for examina-
tion and copying, all payroll records, social security pay-
ments and records, timecards, personnel records and
reports and all other records necessary or useful in checking
compliance is Ordered.
(e) Mail an exact copy of the notice attached hereto and
28 In the event no exceptions are filed as provided by Section 102.46 of the
Rules and Regulations of the National Labor Relations Board, the findings,
conclusions , and recommended Order herein shall, as provided in Section
102 48 of the Rules and Regulations, be adopted by the Board and become
its findings, conclusions, and order, and all objections thereto shall be
deemed waived for all purposes
1130 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
marked "Appendix" 29 to Amalgamated Meat Cutters &
Butcher Workmen of North America, Local 229, AFL-
CIO, and to all individuals who on March 15, 1972, were
employees under the Act at their San Diego, California,
facility. Copies of said notice, to be furnished by the Re-
gional Director for Region 21, after being duly signed by its
authorized representative, shall be mailed immediately
upon receipt thereof as herein directed.
(f) Notify the Regional Director of the National Labor
Relations Board, in writing, within 20 days from the date of
the receipt of this order, what steps the Respondent has
taken to comply herewith.
APPENDIX
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
WE WILL, upon request, bargain collectively with Am-
algamated Meat Cutters & Butcher Workmen of North
America, Local 229, AFL-CIO, as the majority repre-
sentative of all of our employees at our San Diego,
California, facility, now closed, concerning the effect
upon those employees of our closing of the facility, and
29 In the event that the Board 's Order is enforced by a Judgment of a
United States Court of Appeals, the words in the notice reading "Posted by
Order of the National Labor Relations Board" shall be changed to read
"Posted Pursuant to a Judgment of the United States Court of Appeals
Enforcing an Order of the National Labor Relations Board "
reduce to writing to any agreement reached as a result
of such bargaining.
WE WILL pay those employees who were employed on
March 15, 1972, at the San Diego, California, facility,
their normal wages for a period required by a decision
of an Administrative Law Judge of the National Labor
Relations Board.
WE WILL make all contributions due and owing to the
administrator of the San Diego and Imperial County
Butchers' and Food Employers' Pension and Health
and Welfare Trust Funds as required by a Decision of
an Administrative Law Judge of the National Labor
Relations Board.
Dated By
ALL STATE FACTORS, SECURED
PARTY IN POSSESSION OF NORTH
PARK MEAT COMPANY
(Employer)
(Representative ) (Title)
This is an official notice and must not be defaced by
anyone.
This notice must remain posted for 60 consecutive days
from the date of posting and must not be altered, defaced,
or covered by any other material. Any questions concerning
this notice or compliance with its provisions may be direct-
ed to the Board's Office, Eastern Columbia Building, 849
South Broadway, Los Angeles, California 90014, Telephone
213-688-5229.