Chun Cha Fu, Inc.

National Labor Relations Board - Board Decisions

Sep 30, 1991

305 N.L.R.B. 143 (N.L.R.B. 1991)

143
305 NLRB No. 18
CHUN CHA FU, INC.
1 In adopting the judge’s finding that the Respondent violated Sec.
8(a)(5) of the Act by refusing to bargain over the effects of its deci-
sion to cease operations, we note that his analysis is consistent with
Willamette Tug & Barge Co., 300 NLRB 282 (1990).
The collective-bargaining agreement between the Respondent and
the Union was executed on October 10, 1988, not October 1, as
found by the judge.
2 All remedial reimbursements to employees shall be made with in-
terest as prescribed in New Horizons for the Retarded, 283 NLRB
1173 (1987).
3 We correct the judge’s inadvertent error with respect to the date
of the Union’s letter requesting information. We also conform the
‘‘in any like or related manner’’ provision with the corresponding
provision in the Order.
Chun Cha Fu, Inc. and 318 Restaurant Workers
Union. Case 2–CA–24245
September 30, 1991
DECISION AND ORDER
BY CHAIRMAN STEPHENS AND MEMBERS OVIATT
AND RAUDABAUGH
On June 11, 1991, Administrative Law Judge How-
ard Edelman issued the attached decision. The Re-
spondent filed exceptions and a supporting brief.
The National Labor Relations Board has delegated
its authority in this proceeding to a three-member
panel.
The Board has considered the decision and the
record in light of the exceptions and brief and has de-
cided to affirm the judge’s rulings, findings,1 and con-
clusions, to modify his remedy,2 and to adopt his rec-
ommended Order.
ORDER
The National Labor Relations Board adopts the rec-
ommended Order of the administrative law judge and
orders that the Respondent, Chun Cha Fu, Inc., New
York, New York, its officers, agents, successors, and
assigns, shall take the action set forth in the Order, ex-
cept that the attached notice is substituted for that of
the administrative law judge.3
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 or-
dered us to post and abide by this notice.
WE WILL NOT fail or refuse to timely notify and bar-
gain with Local 318 Restaurant Workers Union, as the
exclusive bargaining agent of our regular full-time and
regular part-time waiters and busboys, concerning the
effects of the sale of our business on the unit employ-
ees.
WE WILL NOT refuse to furnish the Union with the
information requested by it in its April 12, 1990 letter.
WE WILL NOT in any like or related manner interfere
with, restrain, or coerce you in the exercise of the
rights guaranteed you by Section 7 of the Act.
WE WILL, on request, bargain in good faith with the
Union as the exclusive bargaining representative of the
unit employees specified above with respect to the ef-
fect on our employees of our decision to terminate our
operation in New York, New York, and, if an under-
standing is reached, embody it in a signed agreement.
WE WILL furnish the Union with the information re-
quested by it in its April 12, 1990 letter to us.
WE WILL pay to the terminated unit employees their
normal wages for the period specified by the National
Labor Relations Board.
CHUN CHA FU, INC.
Suzanne K. Sullivan, Esq., for the General Counsel.
Abraham Lebenkoff, Esq. (Lebenkoff and Coven), for the Re-
spondent.
DECISION
STATEMENT OF THE CASE
HOWARD EDELMAN, Administrative Law Judge. This trial
was heard before me on December 18, 1990, in New York,
New York.
On March 28, 1990, 318 Restaurant Workers Union (the
Union) filed a charge against Chun Cha Fu, Inc. (Respond-
ent). An amended charge was thereafter filed on April 17,
1990. On July 31, 1990, Region 2, of the National Labor Re-
lations Board issued a complaint against Respondent, alleg-
ing that Respondent failed to offer to the Union an oppor-
tunity to bargain concerning the effects of its decision to
close its facility, and thereafter failed to provide the Union
with information requested by the Union concerning the sale
of Respondent’s facility, in violation of Section 8(a)(1) and
(5) of the Act.
Briefs were filed by counsel for the General Counsel and
counsel for Respondent. On consideration of the briefs, the
entire record, and my observation of the demeanor of the
witnesses, I make the following
FINDINGS OF FACT
Respondent is a New York corporation, engaged in the op-
eration of a restaurant in New York, New York. During the
normal course of Respondent’s operations, Respondent annu-
ally derived gross revenues in excess of $500,000, and pur-
chased and received at its restaurant goods and materials val-
ued at in excess of $5000 from business operations located
in the State of New York, which received such goods and
materials directly from firms located outside the State of
New York.
144 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
1 Counsel for Respondent denied the jurisdictional allegations al-
leged in the complaint. Counsel for the General Counsel contended
jurisdiction could be taken based upon a stipulation of commerce by
Respondent in a March 23, 1988 representation petition (Case 2–
RC–20377) filed by the Union against Respondent which resulted in
a Decision and Direction of Election. During the trial of this case,
Respondent did not submit any evidence that it does not meet the
Board’s jurisdictional standard described above. Accordingly, I con-
clude that Respondent’s stipulation of commerce in the representa-
tion case is sufficient to establish jurisdiction in the instant case. Su-
perior Industries, 295 NLRB 320 (1989); John Bogwell Farms, 192
NLRB 547 (1971).
I find Respondent is an employer engaged in commerce
within the meaning of Section 2(2), (6), and (7) of the Act.1
On October 1, 1988, Respondent and the Union executed
a collective-bargaining agreement which stated, inter alia,
that Respondent recognized the Union as the sole representa-
tive for all full-time and regular part-time dining room em-
ployees, including waiters and busboys and excluding all
kitchen employees, office clericals, captains, managers,
guards, and supervisors.
Article 33 of the agreement provided:
[I]n the event that the Employer intends to sell or other-
wise transfer the establishment or establishments cov-
ered by this Agreement, the Employer agrees that not
less than ninety (90) days prior thereto, it will inform
the Union in writing thereof, together with the name
and address of the purchaser or transferee . . . . The
Employer further agrees that it shall be a condition of
the sale and inserted into any Agreement of sale that
this contract and all of its obligations thereof shall be
binding upon any purchaser or transferee.
In September 1989, Shu-Tah Lee, Respondent’s owner,
testified that he told Union Representative Dennis Law that
he hoped to sell the restaurant or get a new lease. Law re-
sponded, ‘‘Whether you sell or close, pay anything what the
contract it say.’’ This would appear to be a reference to sev-
erance and other contractual benefits due to employees in the
event of sale or closure. At the time of such conversation
there were no prospective buyers looking at the restaurant.
In November 1989, Lee commenced serious negotiations
for the sale of his restaurant. Lee did not contact the Union
when these negotiations began.
On January 31, 1990, a purchase agreement for the sale
of Respondent’s restaurant was finalized.
On the evening of January 31, the employees were notified
by Lee of the sale and that the restaurant would close as of
that night. Respondent closed its facility on February 1. No
notice of the negotiations for the sale was given to any union
official by Respondent at any time. Respondent’s counsel
stated at the time of trial of this case that Respondent did
not give the union notice of the sale negotiations because it
feared an employee walkout, and possibility that the sale
might fall through. The Union eventually received notice of
the sale from the employees terminated by Respondent as a
result of the restaurant’s closure.
Following Respondent’s closure, the unit employees were
paid vacation and severance pay as provided for in the par-
ties’ collective-bargaining agreement.
On April 12, 1990, Union Representative Law sent Re-
spondent a letter by regular and certified mail requesting the
following information:
[A]ny and all documents, including but not limited to,
memoranda, agreements and correspondence which re-
late to the sale or transfer of Chun Cha Fu Restaurant,
Inc., or any of its assets.
Respondent denied receipt of such letter and has failed to
supply the Union with any of the information requested.
Analysis and Conclusions
In various circumstances, an employer is required to bar-
gain over the effects of a decision to sell his business. In
Kirkwood Fabricators, 285 NLRB 33 (1987), enfd. 862 F.2d
1303 (8th Cir. 1988), a strikingly similar case, the Board, af-
firming the administrative law judge found the employer vio-
lated Section 8(a)(1) and (5) by failing to notify the Union
of its decision to sell and thus failing to offer the Union an
opportunity to bargain over the effects of such sale. In Kirk-
wood, as in the instant case, the employer deliberately re-
fused to notify the Union of such pending sale because he
was afraid that the Union might ‘‘queer the deal’’ and if
news leaked out he would lose his employees. Respondent,
in the instant case admittedly refused to notify the Union for
substantially the same reason. The administrative law judge
in Kirkwood concluded, in finding an unlawful refusal to bar-
gain, that ‘‘Respondent’s secrecy, its presentation of a fait
accompli sale, its failure to ever notify the Union of its deci-
sion, much less timely notify . . . are the crux of the viola-
tion’’ Id. at 36. The same reasoning applies with equal force
in the instant case. Respondent, by its willful concealment of
its sale negotiations from the Union precluded meaningful
bargaining over the effects of its decision to sell the res-
taurant. In this circumstance a subsequent request to bargain
would be academic and unnecessary. Id. at 36; John R.
Crowley & Bros., 297 NLRB 770 (1990).
Accordingly, I conclude that by its conduct described
above, Respondent violated 8(a)(1) and (5) of the Act by
failing to notify the Union of the sale of its business and bar-
gain in good faith concerning the affects of such sale.
Respondent contends the Union waived its right to receive
notice and to request bargaining over the effects. Such con-
tention is based upon the September 1989 conversation be-
tween Respondent owner Lee and Union Representative Law
during which Lee told Law he hoped to sell the restaurant,
and Law replied, ‘‘Whether you sell or close pay anything
what the contract it say.’’
I conclude Law’s response to Lee was intended to convey
to Lee Respondent’s contractual obligations to the unit em-
ployees with respect to severance and vacation pay. It was
not intended as a waiver of its contractual bargaining rights
under article 33 of their collective-bargaining agreement.
Moreover, at the time of this conversation Respondent was
not engaged in any sale negotiations. Respondent’s sales ne-
gotiations with the eventual buyer did not commence until at
least November 1989. The Supreme Court has held that a
union’s waiver of statutory rights must be ‘‘clear and unmis-
takable.’’ Metropolitan Edison Co. v NLRB, 460 U.S. 693,
708 (1983). Accordingly, I find Respondent’s contention of
waiver by the Union is without merit.
145CHUN CHA FU, INC.
2 Respondent impliedly, but not directly, denies receipt of the
Union’s April 12 letter which was sent by regular and certified mail.
The Board recognized that proof of mailing by certified mail with
the proper address and postage raises a rebuttable presumption of ad-
dressee’s receipt of the letter in the ordinary course of delivery of
such mail. Communications Workers Local 9201 (Pacific Northwest
Bell), 275 NLRB 1529 (1985). Respondent, by its implied denial,
has not met its burden of rebutting the presumption that this letter
was duly delivered to the addressee. E. B. Manning & Son, 281
NLRB 1124 (1986). Therefore, I find such letter was received by
Respondent.
3 If no exceptions are filed as provided by Sec. 102.46 of the
Board’s Rules and Regulations, the findings, conclusions, and rec-
ommended Order shall, as provided in Sec. 102.48 of the Rules, be
adopted by the Board and all objections to them shall be deemed
waived for all purposes.
On April 12, 1990, the Union sent Respondent a letter re-
questing all documents relating to the sale of Respondent’s
restaurant.2
It is well settled that an employer must provide a union
with requested information that is relevant to the union’s
function as the collective-bargaining representative of the
unit employees. NLRB v. Acme Industrial Co., 385 U.S. 432
(1967).
The documents requested are clearly relevant to the
Union’s function as the unit employees’ collective-bargaining
representative. They relate to the sale of Respondent’s busi-
ness and have a direct effect upon the unit employees.
Accordingly, I conclude that Respondent, by failing to
provide the Union with the information requested, addition-
ally violated Section 8(a)(1) and (5) of the Act.
CONCLUSIONS OF LAW
1. Respondent is an employer engaged in commerce within
the meaning of Section 2(2), (6), and (7) of the Act.
2. The Union is a labor organization within the meaning
of Section 2(5) of the Act, and the exclusive collective-bar-
gaining representative of all Respondent’s regular full-time
and regular part-time waiters and busboys.
3. By refusing to timely notify and bargain in good faith
with the Union about the effects of closing its business and
terminating its employees, Respondent has engaged in unfair
labor practices within the meaning of Section 8(a)(1) and (5)
of the Act.
4. By refusing to furnish the Union with the information
requested concerning the sale of Respondent’s restaurant as
set forth in the Union’s April 12, 1990 letter, Respondent has
engaged in unfair labor practices within the meaning of Sec-
tion 8(a)(1) and (5) of the Act.
5. The aforesaid unfair labor practices affect 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 within the meaning of Section 8(a)(5) and (1) of the
Act, I shall recommend that it be ordered to cease and desist
therefrom and to take certain affirmative action designed to
effectuate the purposes of the Act.
Because Respondent has no place of business to post a no-
tice to employees regarding violations and remedy, I shall
recommend that Respondent be ordered to mail signed copies
of the notice to the Union and to all Respondent’s unit em-
ployees employed by Respondent as of January 31, 1990.
Benchmark Industries, 269 NLRB 1096, 1099 (1984).
As a result of Respondent’s unlawful failure to bargain
about the effects of its cessation of operations, the terminated
employees have been denied an opportunity to bargain
through their collective-bargaining representatives at a time
when Respondent might still have been in need of their serv-
ices, and a measure of balanced bargaining power existed.
Meaningful bargaining cannot be assured until some measure
of economic strength is restored to the Union. A bargaining
order alone, therefore, cannot serve as an adequate remedy
for the unfair labor practice committed.
Accordingly, I shall recommend that, in order to effectuate
the purposes of the Act, Respondent bargain with the Union
concerning the effects on its employees of the closing of its
operations, and shall order a limited backpay requirement de-
signed both to make whole the unit employees for losses suf-
fered as a result of such violation, Transmarine Navigation
Corp., 170 NLRB 389 (1968). Thus, Respondent shall pay
unit employees backpay at the rate of their normal wages
when last in Respondent’s employ from 5 days after the date
of the Board’s Order until the occurrence of the earliest of
the following conditions: (1) the date Respondent bargains to
agreement with the Union on those subjects pertaining to the
effects of the closing of Respondent’s operations on its em-
ployees; (2) a bona fide impasse in bargaining; (3) the failure
of the Union to request bargaining within 5 days of the
Board’s Order, or to commence negotiations within 5 days
of Respondent’s notice of their desire to bargain with the
Union; or (4) the subsequent failure of the Union to bargain
in good faith; but in no event shall the sum to any of these
employees exceed the amount he or she would have earned
as wages from January 31, 1990, the date Respondent termi-
nated operations, to the time he or she secured equivalent
employment elsewhere, or the date on which Respondent
shall have offered to bargain, whichever occurs sooner; pro-
vided, however, that in no event shall this sum be less than
these employees would have earned for a 2-week period at
the normal rate of their normal wages when last in Respond-
ent’s employ. Interest on all such sums shall be paid in the
manner prescribed in Florida Steel Corp., 231 NLRB 651
(1977). See generally Isis Plumbing Co., 138 NLRB 716
(1962).
I shall also recommend that Respondent provide the Union
with the information requested by it in its April 12, 1990 let-
ter to Respondent.
On these findings of fact and conclusions of law and on
the entire record, I issue the following recommended3
ORDER
The Respondent, Chun Cha Fu, Inc., New York, New
York, its officers, agents, successors, and assigns, shall
1. Cease and desist from
(a) Failing and refusing to timely notify and bargain with
Local 318 Restaurant Workers Union as the exclusive bar-
gaining agent of its regular full-time and regular part-time
waiters and busboys concerning the effects of the sale of its
business upon the unit employees.
(b) Refusing to furnish the Union with the information re-
quested by the Union in its April 12, 1990 letter, described
above.
146 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
4 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
National 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.’’
(c) In any like or related manner interfering with, restrain-
ing, or coercing employees in the exercise of the rights guar-
anteed them by Section 7 of the Act.
2. Take the following affirmative action necessary to ef-
fectuate the policies of the Act.
(a) Pay the terminated unit employees their normal wages
for the period set forth in the remedy section of this decision.
(b) Furnish the Union with the information requested by
the Union in its April 12, 1990 letter to Respondent.
(c) On request, bargain in good faith with the Union as
the exclusive bargaining representative of the unit employees
specified above with respect to the effect on its employees
of the decision to terminate its operations in New York, New
York, and, if any understanding is reached, embody it in a
signed agreement.
(d) Preserve and, on request, make available to the Board
or its agents, for examination and copying, all payroll
records, social security payment records, timecards, personnel
records and reports, and all other records necessary to ana-
lyze the amount of backpay due under the terms of this
Order.
(e) Mail in exact copy of the attached notice marked ‘‘Ap-
pendix’’4 to the Union and to all employees employed by
Respondent on January 31, 1990. Copies of said notice, on
forms provided by the Regional Director for Region 2, after
being duly signed by their authorized representative, shall be
mailed immediately on receipt thereof, as herein directed.
(f) Notify the Regional Director in writing within 20 days
from the date of this Order what steps have been taken to
comply.