Compact Video Services

National Labor Relations Board - Board Decisions

Sep 29, 1995

319 N.L.R.B. 131 (N.L.R.B. 1995)

131
319 NLRB No. 23
COMPACT VIDEO SERVICES
1 We agree that the judge correctly rejected the Respondent’s de-
fense that it was not obligated to provide the Union with
preimplementation notice of the sale of its business and a meaning-
ful opportunity to bargain over the effects of the sale. We find, like
the judge, that the Respondent has not met its burden of demonstrat-
ing ‘‘particularly unusual or emergency circumstances’’ that would
relieve it of the obligation to provide the Union with effective no-
tice. See Willamette Tug & Barge Co., 300 NLRB 282, 283 (1990).
Thus, we find it unnecessary to rely on the judge’s speculative com-
ments concerning actions the parties to the sale might have taken to
accommodate the Union’s legitimate interest in preimplementation
notice and bargaining.
We also find it unnecessary to pass on the judge’s conclusions
with respect to the date on which the duty to provide notice and an
opportunity to bargain attached. Suffice it to say that the Respondent
gave no advance notice of the sale at all. Los Angeles Soap Co., 300
NLRB 289 fn. 1 (1990).
1 All dates below are in 1993 unless I say otherwise.
2 Some clarifying and distancing remarks about the ‘‘sale to ATS’’
deserve immediate mention: As I note below, two of the Respond-
ent’s witnesses, Walston and Sabin, testified, in substance, that the
‘‘ATS’’ entity disappeared under uncertain circumstances and tim-
ing, and was replaced by a corporate entity called ‘‘Four Media
Company.’’ Nevertheless, for simplicity’s sake, and to be consistent
with the parties’ usage, I will use ‘‘ATS’’ throughout this decision
to refer to the buyer/takeover entity. Also in the interest of simplic-
ity, I will refer to the Respondent and CVG mostly in the past tense,
even though Walston testified, in substance, that CVG and its sub-
sidiaries survived the sale and takeover, and emerged with ‘‘limited
partnership interests’’ in the Steinhart-controlled partnership that
now holds all the stock in Four Media Company. Moreover, I take
notice that in ATS Acquisition Corp., Case 31–CA–20235, a separate
prosecution currently being tried before Administrative Law Judge
David G. Heilbrun, ATS is charged with having violated certain
labor relations obligations it allegedly owed to the Union as a suc-
cessor to the Respondent here. Finally, although the parties have liti-
gated and submitted this case to me as if a genuine, arm’s-length
sale to a ‘‘new’’ employer occurred, the Union has noted as follows
in its brief (p. 10, fn. 3):
Throughout this brief, the Union uses the term ‘‘sale’’ in re-
ferring to the transaction advisedly, and without prejudice to its
position that it may be a sham transaction, a claim being pur-
sued in another case.
I, too, have approached this case as if an arm’s-length sale between
strangers were involved, but I do not purport to decide whether that
was the case; nor do I intend in this decision to adjudicate any
claims other than those made in the complaint in this case.
3 The proceedings were interrupted by a subpoena compliance dis-
pute. These are the details: Before the trial began, the General Coun-
sel issued certain subpoenas duces tecum to agents of the Respond-
ent and agents of ATS, calling for production at trial (for the Gen-
eral Counsel’s inspection only) of, inter alia, records comprising the
CVG-ATS sale agreement. The Respondent and ATS thereafter
sought revocation of the subpoenas insofar as they sought such sale-
agreement records (most often referred to in trial colloquy as the
‘‘transaction documents’’). In trial on December 10, with the pro-
duction-revocation dispute by then having been narrowed to the doc-
uments making up the sale agreement, I granted the petition to re-
voke only insofar as the outstanding subpoenas sought portions of
the sale agreement that revealed the salaries under the new ATS
structure of corporate officers, managers, and other ‘‘nonbargaining
unit’’ persons; but I denied the petition to revoke as to all other pa-
pers comprising the sale agreement. Later on December 10, after the
General Counsel’s and the Respondent’s principal witnesses had
concluded their testimony, and with the subpoenaed parties’ compli-
Continued
Compact Video Services, Inc. and International Al-
liance of Theatrical Stage Employees. Case 31–
CA–20104
September 29, 1995
DECISION AND ORDER
BY CHAIRMAN GOULD AND MEMBERS COHEN
AND TRUESDALE
On January 17, 1995, Administrative Law Judge
Timothy D. Nelson issued the attached decision. The
Respondent filed exceptions and a supporting brief.
The General Counsel and Charging Party both filed an-
swering briefs.
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 briefs and has de-
cided to affirm the judge’s rulings, findings, and con-
clusions1 and to adopt the recommended Order.
ORDER
The National Labor Relations Board adopts the rec-
ommended Order of the administrative law judge and
orders that the Respondent, Compact Video Services,
Inc., Burbank, California, its officers, agents, succes-
sors, and assigns, shall take the action set forth in the
Order.
Ann L. Weinman, Esq., for the General Counsel.
Richard W. Kopenhefer, Raymond W. Thomas, and Richard
S. Zuniga, Esqs. (Loeb & Loeb), of Los Angeles, Califor-
nia, for the Respondent, Compact Video Services, Inc.
Ira L. Gottlieb, Esq. (Taylor, Roth, Bush & Geffner), of Bur-
bank, California, for the Charging Party, International Alli-
ance of Theatrical Stage Employees.
DECISION
STATEMENT OF THE CASE
TIMOTHY D. NELSON, Administrative Law Judge. This is
an unfair labor practice prosecution brought in the name of
the Board’s General Counsel by the Regional Director for
Region 31, through a formal complaint he issued on October
1, 1993,1 against the Respondent, Compact Video Services,
Inc., after investigating a charge filed on August 30 by Inter-
national Alliance of Theatrical Stage Employees (the Union).
The prosecution has its origins in the dismissal of the Re-
spondent’s union-represented employees on August 5, as part
of a sale of the Respondent’s parent corporation, CVG, to an
interim takeover entity called ATS, itself formed by an in-
vestment firm, Steinhart.2 I heard the case in Los Angeles,
California, in two trial stages, the first on December 9 and
10, and the second on July 25 and 26, 1994.3
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132 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
ance intentions in doubt, I continued further proceedings to Decem-
ber 28. On December 21, the General Counsel moved to postpone
further proceedings indefinitely, averring that the Respondent was re-
fusing to turn over the transaction documents, and that the General
Counsel intended to begin subpoena enforcement proceedings. I
granted this motion on December 22, further directing that this trial
would resume ‘‘at such time as I may order hereafter, upon the sub-
mission by the General Counsel or any other party of a motion re-
questing the scheduling of resumed proceedings.’’ The General
Counsel initiated subpoena enforcement proceedings on or about
January 31, 1994, before Judge Ronald S. Lew, of the United States
District Court for the Central District of California. On March 15,
1994, Judge Lew issued an order requiring obedience to subpoenas
duces tecum. On May 31, 1994, the General Counsel advised me of
this in a motion to resume hearing, noting that the parties were mu-
tually available on various individual dates in July 1994, and for the
entire week of July 25. On June 3, 1994, I granted the General
Counsel’s motion and ordered the trial to resume on July 25, 1994.
On that latter date, the Respondent made available for the General
Counsel’s inspection only, four bound volumes of ‘‘transaction docu-
ments’’ (containing roughly 2000 pages in total), plus another four
cartons full of incidental paperwork. This disclosure mooted all out-
standing subpoena disputes.
4 Sec. 8(a)(5) makes it unlawful for an employer ‘‘to refuse to bar-
gain collectively with the representatives of his employees . . . .’’
Sec. 8(a)(1) outlaws employer actions and statements that ‘‘interfere
with, restrain, or coerce employees in the exercise of the rights guar-
anteed in Section 7 . . . .’’ Sec. 7 declares pertinently that
‘‘[e]mployees shall have the right to self-organization, to form, join,
or assist labor organizations, to bargain collectively through rep-
resentatives of their own choosing, and to engage in other concerted
activities for the purpose of collective bargaining or other mutual aid
or protection[.]’’
5 Transmarine Navigation Corp., 170 NLRB 389, 390 (1968).
6 More particularly, the Respondent admits, and I find, as follows:
The Union’s charge was filed on August 30 and served on the Re-
spondent on or about August 31. The Respondent is a California cor-
poration. Until on or about August 5, the Respondent maintained an
office and principal place of business in Burbank, California. In an-
nual periods before August 5, the Respondent bought and received
more than $50,000 worth of goods or services from California sellers
or suppliers who, in turn, received such goods in substantially the
same form directly from outside California. I note further that the
Board asserted jurisdiction over the Respondent in a 1987 unit clari-
fication proceeding initiated by the Respondent’s petition. Compact
Video Services, 284 NLRB 117 (1987).
7 Certain errors in the transcript have been noted and corrected.
8 All parties filed helpful briefs on or before October 17, 1994, the
extended deadline.
9 The facts I find below are not materially disputed. Nevertheless,
in most cases below, I will note the sources for my findings, espe-
cially where they involve interpretations or characterizations of the
testimony and exhibits.
10 ‘‘Steinhart’’ is the spelling used in the transcript whenever the
firm or one of its affiliates was referred to by a witness or attorney,
and the same spelling is adopted in all the parties’ briefs. I note,
however, that G.C. Exh. 11, the only exhibit of record mentioning
the firm, uses the spelling, ‘‘Steinhardt.’’
11 There is uncertainty (arising from Walston’s testimony, infra) as
to whether it was August 3 or 4 when the New York parties actually
signed the sale agreement documents. Because the precise timing is
irrelevant, I will assume that it was not until August 4 that the par-
ties had finally signed all the papers comprising the sale agreement.
12 The parties stipulated (Tr. 481:9–21) that, ‘‘with regard to im-
plementation . . . the transaction documents do not provide for any-
thing other than immediate implementation of its [the sale agree-
ment’s] terms, as of the date that it was executed, on August 4,
1993.’’ Despite this, I use ‘‘implemented’’ here in the same sense
that the Board used it in Willamette Tug & Barge Co., 300 NLRB
282 (1990), that is, I intend to ‘‘refer to the actual physical con-
sequences of the sales [sic] decision, i.e., the termination of the en-
terprise and the employees.’’ Id. at fn. 3. And it is for this reason
that I refer to August 5 as the date of ‘‘implementation’’ of the sale.
The complaint alleges in material substance that the Re-
spondent violated Section 8(a)(5) and (1) of the Act4 by (a)
failing ‘‘[s]ince . . . July 22, 1993 . . . to give the Union
timely notice of its decision to sell or transfer its assets, and
. . . by failing and refusing to bargain with the Union about
the effects of its sale or transfer of assets on the Unit em-
ployees,’’ and (b) failing and refusing ‘‘[s]ince . . . July 29,
1993 . . . to furnish the Union with [certain] information,’’
to wit: the ‘‘name and telephone number of the acquiring en-
tity, including all officers,’’ and ‘‘[a]ll contracts relating to
the acquisition.’’ The General Counsel specifically seeks a
Transmarine5 remedy for the Respondent’s alleged failure to
conduct timely ‘‘effects’’ bargaining with the Union; a rem-
edy that would require, inter alia, that the Respondent give
at least 2 weeks’ backpay to each of its terminated bargain-
ing unit employees.
In its answer, as amended at the trial, the Respondent ad-
mits, and I find, that the Union is a ‘‘labor organization’’
within the meaning of Section 2(5) of the Act, that the Re-
spondent is ‘‘an employer engaged in . . . and . . . affecting
commerce within the meaning of Section 2(6) and (7) of the
Act,’’ and that the Board’s jurisdiction is properly invoked
by the complaint.6 The Respondent’s answer denies all al-
leged wrongdoing, however, and avers various affirmative
defenses, most of which are rooted in a common claim that
its behavior was legally privileged by the ‘‘exigencies’’ of
the moment. Alternatively, the Respondent maintains that a
Transmarine remedy is not warranted even if its behavior
violated the Act.
I have studied the whole record,7 including the parties’
posttrial briefs,8 and the authorities they rely on. Based on
that study and other research, and on the findings and analy-
ses set forth below, I have concluded that the Respondent
committed unfair labor practices substantially as alleged in
the complaint, and that a bargaining order with Transmarine
features, joined to an order requiring disclosure of the docu-
ments comprising the sale agreement, is the remedy package
best suited to restore as nearly as possible the status quo
ante.
FINDINGS OF FACT9
I. CENTRAL FACTS IN SUMMARY
In New York City, no later than August 4, an insurance
company (Equitable) and a bank (Security Pacific)—the par-
ties in effective control of the destiny of the Respondent’s
parent corporation, CVG—worked out the final terms of and
signed an agreement with the Steinhart firm10 pursuant to
which Steinhart’s acquisition corporation, ATS, would imme-
diately buy CVG’s assets and take over CVG’s subsidiary
operations, including the Respondent’s postproduction oper-
ations in Burbank, California.11 For purposes of this case, at
least, the sale was ‘‘implemented’’ on August 5, when the
Respondent discontinued operations in its own name and ter-
minated all its employees, and ATS simultaneously took over
the former CVG operations.12
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133COMPACT VIDEO SERVICES
13 Sabin, at Tr. 470, and see Tr. 474:10–14, where Sabin makes
clear that his descriptions referred to CVG’s overall operations, and
not just the Respondent’s.
14 At some point after the 1988 LBO and before the August 1993
sale to ATS, Security Pacific Bank was acquired by Bank of Amer-
ica, which apparently took over the former’s ‘‘term’’ and ‘‘revolving
credit’’ loan arrangements with CVG, and as well its status as senior
secured lienholder. (It was with this in mind that Donlon and others
occasionally referred to CVG’s banker as ‘‘Bank of America,’’ or
‘‘B. of A.’’) For simplicity’s sake, however, and without regard to
the bank ownership realities at any given time, I will use the name
‘‘Security Pacific’’ to refer to CVG’s banker. (Moreover, my pref-
erence for ‘‘Security Pacific’’ is influenced by the following: It ap-
pears from Walston and from two exhibits (R. Exh. 2; G.C. Exh.
11) that an entity called ‘‘Security Pacific Business Credit, Inc.’’
continued to supervise the lending relationship with CVG even after
Bank of America acquired Security Pacific Bank, and that it was
likewise this ‘‘Security Pacific Business Credit, Inc.’’ entity that was
one of the players in the final negotiations in New York for the sale
of CVG to ATS.)
15 Donlon, at Tr. 238:18–20.
16 The parties stipulated in trial on December 9 that a (rather
lengthy and indefinite) unit description contained in par. 6 of the
complaint ‘‘constituted [the] bargaining unit covered by a series of
collective bargaining agreements between Respondent and the Union
since at least 1984, the most recent of which was effective by its
terms from August 1, 1992, through July 31, 1996.’’
17 According to the Respondent’s counsel in opening statement,
there were ‘‘106 bargaining unit employees’’ working for the Re-
spondent in the final week before the sale to ATS. According to the
Union’s Blanchard, the ‘‘average’’ unit complement was ‘‘in the
area of 100 to 120[.]’’
18 Although the Respondent assented to the 1992–1996 contract,
Donlon implied that the contract failed to satisfy the Respondent’s
‘‘goals’’ in the negotiations, which had been ‘‘to get concessions, to
cut company costs because we were facing a very difficult financial
situation.’’
19 In finding that the Union—not one of its locals—was the recog-
nized exclusive representative of the Respondent’s unit employees,
I have considered that the 1992–1996 agreement (Jt. Exh. 1) recites
on its cover page that the ‘‘Agreement’’ is ‘‘between’’ a certain
‘‘Local 695’’ of the Union and the Respondent. I note, however, that
the same agreement recites contrarily on its inside cover page that
the ‘‘Agreement’’ runs ‘‘between’’ the Union itself (identified as
‘‘International Alliance of Theatrical Stage Employees and Moving
Picture Machine Operators of the United States of America’’) and
the Respondent. Moreover, the Union—not Local 695—is identified
as the signatory party. Finally, I note that the parties stipulated on
December 9 (Tr. 9 and 11; emphasis added):
Continued
The Respondent’s employees thus terminated (nearly all of
whom were rehired by ATS), included at least 100 who were
working within a unit covered by a labor agreement between
the Respondent and the Union that was not due to expire
until July 1996. The Union was kept in the dark while nego-
tiations for the sale were pending. Nevertheless, the Union
got wind of the intended sale on July 27, the day after help
wanted ads commissioned by ATS started running in two en-
tertainment industry journals. The Union’s agent began the
same day to try to get further information about the intended
sale from the Respondent’s agents. On July 29, having
learned no more from the Respondent than what had been in
the help wanted ads, the Union delivered to the Respondent
a letter containing a demand for information (including for
‘‘all contracts, requests for proposals, and correspondence re-
lating to the [then-pending] acquisition’’) and a further de-
mand for ‘‘effects bargaining.’’ The Respondent ignored
these demands until after the sale and takeover were faits
accomplis.
II. DETAILS
A. The Respondent’s Relationship to CVG; CVG’s
Operations, its Owners and Principal Secured Creditors
The Respondent was one of three active operating subsidi-
aries of Compact Video Group, Inc. (CVG), a Delaware cor-
poration. CVG’s other two active subsidiaries were Meridian
Studios, Inc. and Image Transform, Inc. These subsidiaries
were arranged and operated by CVG so as to provide ‘‘a ver-
tically integrated post-production facility which services the
TV and movie industry[,] all the way from developing film,
negative, through the telecine process, which was the film-
to-tape transfer, into editing, and performing the sound mix-
ing, and distribution—the status, conversion, distribution, and
then all the way through to where we could do the distribu-
tion by a satellite o[f] product.’’13 The Respondent’s precise
function or functions within this vertically integrated setup is
not certain, but it appears that its employees worked on the
final editing and sound mixing and sound effects for video-
tapes and films submitted by television and motion picture
producers, and also operated the ‘‘antenna farm’’ through
which CVG provided satellite uplink and cable television
transmission services for many of the same customers for
whom it provided postproduction services, including The
Disney channel, one of CVG’s mainstay clients.
CVG’s and the Respondent’s business offices are in Bur-
bank, as are the technical facilities operated by the Respond-
ent. At all material times, John H. Donlon was CVG’s presi-
dent and chief executive officer, and the chairman of its
board of directors, and John Sabin was a vice president of
CVG, and its chief financial officer.
CVG was formed in 1988, when, as Donlon testified, a
predecessor holding corporation was ‘‘taken private’’ in a le-
veraged buyout (LBO). This LBO was financed by two main
parties, Security Pacific Bank (Security Pacific), and The Eq-
uitable Life Assurance Society of the United States (Equi-
table). Security Pacific emerged from the LBO with a
‘‘term’’ loan to CVG, and a separate, ongoing line-of-credit
arrangement with CVG. It also emerged as the holder of the
senior lien on all of CVG’s assets.14 Equitable emerged as
the ‘‘majority shareholder [and] owne[r of] more than 80
percent of [CVG,]’’15 and as a subordinated lender with a
junior lien on CVG’s assets.
B. Labor Relationship; Current Union Contract
For at least a decade before the sale, the Respondent had
continuously recognized and entered into successive labor
agreements with the Union as the exclusive representative of
a unit composed mainly of postproduction equipment opera-
tors and technicians.16 In recent years, 100 to 120 employees
have typically been employed in that unit.17 In June through
November 1992, Donlon and the Union’s international rep-
resentative, Leslie A. Blanchard, bargained for a successor
labor agreement to cover these employees, and eventually,
these parties reached a new contract,18 which became retro-
actively effective to August 1, 1992, and was to run through
July 31, 1996.19
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134 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
the employees of the Respondent in the classifications described
in paragraph 6 of the Complaint constituted a bargaining unit
covered by a series of collective bargaining agreements between
Respondent and the Union since at least 1984, the most recent
of which was effective by its terms from August 1, 1992,
through July 31, 1996.
20 The complaint does not allege that the Respondent owed a duty
to bind ATS to the Respondent’s union contract, and the General
Counsel makes no such claim.[*] The General Counsel, however, re-
lies in part on the art. 35 ‘‘assumption’’ clause to argue that the sale
transaction documents sought by the Union were ‘‘relevant and nec-
essary’’ to the Union’s effective performance of its representative
function.
[*] Since August 5, the Union has been claiming in correspond-
ence with the Respondent’s attorneys that the Respondent owed at
least a contractual duty to require ATS to ‘‘assume and abide by’’
the Respondent’s 1992–1996 contract with the Union. (G.C. Exhs.
3(a), (d), (e), (h), and (m); R. Exh. 8.) And the Union has apparently
filed a court action to compel arbitration of this claim. In addition,
it appears that the Union claimed in its charge in this case that the
Respondent owed a statutory duty to thus ‘‘bind’’ ATS to the 1992–
1996 contract. (G.C. Exh. 3(m), p. 1, par. 1, penultimate sentence.)
If such a statutory claim was part of the Union’s charge, however,
it was apparently dismissed, and therefore I do not propose to ad-
dress any such claim.
21 Art. 14 of this contract (Jt. Exh. 2, pp. 16–18) generally ad-
dresses ‘‘Seniority, Layoffs, Severance, and Recalls;’’ it contains
two references to severance pay in its ‘‘Layoff’’ subsection, and
more specifically defines the formulas for computing the amount of
such pay in its ‘‘Severance Pay’’ subsection. Id. at p. 17-A.
22 Sabin, at Tr. 411, 418.
23 R. Exh. 2.
24 Donlon, at Tr. 221:24–25.
25 By mid-July, according to both Donlon and Sabin, CVG only
had enough cash left to cover its payroll and taxes through the end
of the month, plus a reserve to cover the costs of filing its own
bankruptcy petition under Chapter 11. And according to Sabin, the
only reason CVG had even this much cash available is that Sabin
had ‘‘siphoned-off’’ a recent pair of checks (totaling $113,000) from
The Disney channel and TVN, another main customer, and instead
of sending them to Security Pacific under their ‘‘lock box account’’
arrangement, had ‘‘stashed’’ these checks in his office safe.
26 Donlon, at Tr. 288–294 (referring to an ‘‘infusion’’ on either
August 4 or 5 of about $1 million, and a ‘‘commingling’’ of that
money with CVG money to cover the final CVG payroll). Cf.
Walston, at Tr. 403–406 (referring to a ‘‘loan’’ from ATS to CVG
for such purposes, made as soon as the deal ‘‘closed’’). Cf. Sabin,
at 454–456 (referring to checks for CVG operations and payroll
issued on August 4 from CVG account containing insufficient funds
to cover such checks, but issued ‘‘on the come,’’ based on antici-
pated infusion of ATS funds the same day or the next).
27 Several different names for various ‘‘Steinhart’’ entities appear
in this record. ‘‘Steinhart Management Company, Inc.’’ however, is
the name of the entity that Walston, after reflection, decided that he
had been working for during the sale negotiations.
28 Walston testified, ‘‘We [Steinhart] felt that the strengths of the
two entities together would give us a considerable amount of market
share that would make both enterprises much stronger on a united
basis.’’
Article 35 of the 1992–1996 agreement, which is the ter-
minal article, labeled, ‘‘Application of Agreement’’ states:
‘‘This Agreement shall be binding upon the parties and their
respective successors and assigns.’’ Apart from this provi-
sion, which bears only indirectly on the issues in this case,20
the 1992–1996 contract does not specifically address the par-
ties’ respective rights or obligations in the event of a shut-
down or sale or transfer of the business. However, it contains
provisions for ‘‘severance pay,’’ and although it nowhere de-
fines what circumstances constitute a ‘‘severance,’’ it at least
appears to contemplate ‘‘layoff’’ as a severance pay-trigger-
ing event.21
C. Circumstances of the Sale
Since at least January 31, CVG had been ‘‘in breach of
virtually every financial covenant included in the [Security
Pacific] bank loan agreement,’’ including ‘‘the adjusted net
worth covenant per section 7.10 of the loan agreement.’’22
Nevertheless, Security Pacific had elected through the first
half of 1992 not to pursue its remedies.23 In the first week
of July, however, Security Pacific’s New York financing rep-
resentative invoked these ‘‘events of default’’ and called-in
the term loan to CVG. This was a demand that Security Pa-
cific knew that CVG could not satisfy, because CVG was by
then ‘‘insolvent.’’24 But as Donlon noted, it was a demand
that effectively poised Security Pacific to put CVG into in-
voluntary bankruptcy. Also in the first week of July, Security
Pacific told CVG that, effective July 30, it would cancel its
‘‘revolving credit’’ (receivables financing) arrangement with
CVG, an arrangement that had kept CVG’s operations afloat
until then, but whose July 30 cancellation would effectively
require the Respondent to cease operating on that date.25 (In
fact, this didn’t happen, because, as part of the ultimate deal,
ATS funds were used to cover CVG’s payroll and other op-
erating expenses through August 4.)26
CVG’s financial difficulties had been well known to Secu-
rity Pacific and Equitable for at least 6 months before Secu-
rity Pacific thus pulled the pin in early July. And CVG and
Equitable—presumably Security Pacific, too— had been
searching for a ‘‘white knight’’ to buy CVG’s assets, pay off
at least some of its debts, and keep its operations running.
In late 1992, such a potential rescuer had appeared in the
form of Robert T. Walston, who, on behalf of Steinhart
Management Company, Inc., was looking for ways to invest
funds held in certain individual ‘‘Steinhart Partnerships.’’27
According to Walston, Steinhart’s 1992 interest in buying
CVG was grounded in a broader acquisition and merger plan,
under which Steinhart investors would also buy the assets in
bankruptcy of another postproduction company, AME, and
then combine AME’s and CVG’s former operations.28 With
this broader plan in mind, as Walston testified, Steinhart had
at some point in late 1992 submitted some kind of bid for
CVG to Equitable, which Equitable had initially turned
down. Apparently, however, this was, at most, only a tem-
porary setback, for Walston and Donlon testified that further
negotiations between Steinhart and Equitable and Security
Pacific took place in the ‘‘spring’’ of 1993.
Indeed, by mid-June, Steinhart had gone so far as to sub-
mit a new ‘‘letter of intent’’ to Equitable regarding the pur-
chase of CVG, and had sought and obtained from Security
Pacific a set of financing commitments and concessions to
‘‘facilitate’’ such a sale. And although not all of the details
of the tri-partite arrangement then in contemplation are of
record, many of them can be inferred from a nine-page letter
transmitted on June 16 by a Security Pacific officer in New
York to Walston/Steinhart in New York which mentions a
‘‘letter of intent . . . dated June 3, 1993 among [sic]
Steinhardt [sic] and an affiliate of . . . Equitable[,]’’ and in
which Security Pacific (also called ‘‘the Lender’’ in the let-
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135COMPACT VIDEO SERVICES
29 In this paragraph and the following one, I quote from G.C. Exh.
11.
30 Although we cannot be certain that every detail of this ‘‘con-
templated structuring’’ was observed when the CVG-ATS sale even-
tually occurred, it appears from Walston’s descriptions, infra, that
the deal eventually reached was structured so as to give CVG a
‘‘limited partnership interest’’ in a ‘‘Partnership’’ whose ‘‘general
partner’’ would be a Steinhart-controlled entity.
31 Security Pacific also offered additional financial accommoda-
tions (phrased as ‘‘acknowledg[ments’’ of Steinhart’s own condi-
tions), including such as these: Continued ‘‘funding to [CVG] . . .
through the Closing under the . . . existing revolving credit facility
with CVG’’; and ‘‘deferring . . . through the Closing or July 15
1993 (whichever is earlier)’’ certain ‘‘principal’’ and ‘‘interest’’ pay-
ments due under CVG’s ‘‘indebtedness’’ to Security Pacific’’; and
providing a ‘‘Borrowing Base’’ to the acquiring party of ‘‘at least
$3,000,000 on the date of the Closing.’’
32 Walston testified:
So when the AME transaction went away . . . [w]e had to make
a tough decision: Are we interested in Compact on a stand-alone
basis or not? And I guess it took us about a week or so to say,
maybe we’re interested, but certainly not at the price that we
were [prior to July 16] going to pay for—attribute to Compact’s
assets. We can’t—we can’t justify that kind of value for the
company.
33 Indeed, asked, ‘‘[W]ho was running the [final, New York] nego-
tiations?’’ Donlon replied, ‘‘Equitable, from the company [CVG]
side.’’ (Tr. 237:9–12.)
34 Walston testified that the ‘‘major [issue] was price.’’ Later, he
elaborated that ‘‘[t]here were major disagreements up until the final
hour about the nature of Compact’s unsecured debt, and how that
would be handled, who would be accountable for that. Also major
disagreements about leases, real estate leases, and who would remain
obligated to continue to pay those leases.’’ And he summarized by
saying, ‘‘And so it was just a negotiation up until the day of closing
on a range of issues, all relating to value.’’
35 The exact nature of Equitable’s postsale ‘‘interest’’ in the entity
that acquired CVG—indeed, the entire postsale structure of owner-
ship-is not easy to pin down from Walston’s somewhat vague de-
scriptions (at Tr. 373–374) of these features of the August 5 deal.
Thus, Donlon first referred to Equitable’s ‘‘equity interest’’ in the
takeover corporation, but later explained that Equitable’s interest was
more in the nature of a ‘‘security interest in [CVG’s] only remaining
asset, which is their [CVG’s] limited partnership interest in Tech-
nical Services Partners,’’ the ‘‘only asset of [which] is the stock of
Four Media Company.’’ His explanations suggest, in the aggregate,
that Equitable, as the majority stockholder of CVG, retained some
uncertain share of CVG’s own postsale interest in ‘‘Technical Serv-
ices Partners,’’ which now owns the ‘‘Four Media’’ corporate entity
that now operates the former CVG businesses. (Indeed, there are yet
more structural layers in the postsale arrangement. Thus, Walston
explained that ‘‘Technical Services Partners’’ is itself ‘‘controlled by
a ‘corporate general partner’ called Technical Service Holdings,
Inc.[,]’’ and that the ‘‘corporate general partner’’ is, in turn, ‘‘con-
trolled by the general partners at Steinhart.’’)
ter) responded to Steinhart’s ‘‘request’’ for ‘‘financing . . .
in connection with the acquisition . . . of substantially all of
the assets . . . and the assumption of specified liabilities [in-
cluding certain indebtedness to the Lender] of Compact
[meaning CVG] and its subsidiaries.’’29
Essentially, that letter described what Security Pacific was
prepared to do by way of future financing in the event of
such an acquisition, and the ‘‘financial accommodations’’ it
was prepared to make to ‘‘facilitate’’ that acquisition. And
in the course of doing so it further outlined the ‘‘structure’’
and various other terms for the sale of CVG then in con-
templation, the ‘‘Anticipated Closing Date’’ of which was to
be ‘‘June 30, 1993.’’ Thus, as to the ‘‘Transaction Struc-
ture,’’ Security Pacific’s letter noted that, ‘‘[a]s currently
contemplated . . . the Acquisition will be made by a limited
partnership (the Partnership) . . . formed by [Steinhart] and
[CVG][,]’’ into which CVG would ‘‘contribute’’ its ‘‘Assets
and certain liabilities . . . in return for a 99% limited part-
nership interest in the Partnership[,]’’ and that ‘‘[o]n the
Partnership Formation Date [Steinhart], through a newly-
formed entity (The General Partner), will acquire for cash a
1% general partnership interest in the Partnership.’’30 More-
over, Security Pacific proposed to ‘‘facilitate the acquisition’’
by providing the acquiring entity with up to $10.55 million
in new credit lines, and by agreeing that, ‘‘at closing,’’ it
would ‘‘cancel’’ and ‘‘forgive’’ $4 million of CVG’s ‘‘in-
debtedness to Lender.’’31 And Security Pacific further ‘‘ac-
knowledged’’ that Steinhart’s ‘‘willingness to consummate
the Acquisition [was] subject to . . . conditions,’’ which in-
cluded, inter alia, ‘‘[r]eceipt of all required regulatory ap-
provals, including without limitation, those required from the
FTC and the FCC.’’ Also of interest is Security Pacific’s as-
surance that Steinhart’s acquisition of AME was ‘‘not a pre-
condition to [Security Pacific’s] entering into the financial
transactions contemplated herein.’’
On July 16, Steinhart’s plan to acquire AME was crushed
when Steinhart was outbid at the bankruptcy auction of
AME’s assets. According to Walston, this development
caused Steinhart’s interest in buying CVG to falter, and that
‘‘about a week or so’’ was then consumed as Walston and
his Steinhart associates tried to decide whether to go forward
with a purchase of CVG on a ‘‘stand-alone’’ basis, and if so,
at what price.32 In this regard, although Walston is no more
specific as to the timing and duration of these post-July 16,
in-house deliberations by Steinhart, I infer that Steinhart had
decided to pursue such a stand-alone purchase of CVG by
no later than July 22; for it was on July 22 that Donlon, act-
ing on Walston’s instructions, made arrangements for ‘‘new
. . . video services company’’ help wanted ads to be placed
in two Los Angeles trade journals, as I further describe,
infra.
Thus, apparently not later than July 22, and perhaps before
then, Steinhart, with Walston in charge, began final, inten-
sive negotiations in New York City with Equitable’s and Se-
curity Pacific’s representatives, and their attorneys and ac-
countants. (It is clear from Walston, Donlon, and Sabin that
CVG’s officers or representatives played no role other than
as distant onlookers in these final negotiations, and that they
had long since ceded to Equitable, as the majority owner of
CVG, the responsibility for and the right to make whatever
deal might be made on CVG’s behalf.)33 According to
Walston, in the final days before the deal was concluded,
these negotiations foundered and nearly broke off several
times, over the interrelated issues of ‘‘price’’ (or ‘‘valu-
ation’’) and debt allocation, including how to allocate lease-
hold obligations.34 Walston suggests that these issues were of
critical importance to Equitable, because Equitable would—
and did— retain an ‘‘equity interest’’ in the buyer/takeover
entity, and was therefore concerned that its interest after the
sale not be ‘‘diluted’’ beyond a certain limit,35 and this, in
turn required a lot of analyzing by lawyers and accountants
of the ‘‘dilutive’’ or ‘‘anti-dilutive’’ impact on Equitable’s
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136 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
36 Walston emphasized that the ‘‘price’’ of the sale had to be con-
sidered in terms of ‘‘Equitable’s ongoing ownership interest, how
that interest would be structured.’’ And he further elaborated, ‘‘We
knew that subsequent to the acquisition we would have to put addi-
tional capital into the company. And what would happen if we put
in additional capital? How would that dilute Equitable’s equity inter-
est? What happens if we were able to receive a distribution from the
company? How would that be anti-dilutive to Equitable’s equity po-
sition?’’
37 See generally Tr. 374–381.
38 Walston testified in this regard that Security Pacific ‘‘anticipated
. . . that when we bought AME, we would pay all cash for it. So
they anticipated having a lot of additional collateral added to their
security interest free and clear. So when the Compact-AME com-
bination never occurred, they, then, probably thought . . . . Do we
want to liquidate this thing and try to get our money out of it, or
do we want to try to work out a deal on a stand-alone basis?’’
Walston was clearly speculating, at the least, when he spoke of Se-
curity Pacific’s interest in Steinhart’s successful acquisition of
AME’s bankruptcy assets, and of Security Pacific’s ‘‘probabl[e]’’ in-
house reaction to Steinhart’s losing its bid for AME’s assets on July
16. Indeed, I think he was not being truthful here, for his specula-
tions are wholly at odds with Security Pacific’s June 16 letter to
Walston himself, in which the former acknowledged that Steinhart’s
intended acquisition of AME was ‘‘not a pre-condition to [Security
Pacific’s] entering into the financial transactions contemplated
herein[,]’’ which transactions contemplated, inter alia, that Security
Pacific would swallow $4 million of CVG indebtedness, and would
otherwise make financial accommodations to facilitate the sale.
39 I have in mind particularly, these portions of Walston’s testi-
mony:
And that was part of the problem in the negotiation. Because
it [Equitable] was an entity looking square in the face of losing
their entire $50 million investment, which is, you know, concep-
tually what happened—and wanting more, wanting something;
wanting, you know, up until the final hour before a bankruptcy
filing, trying to get something out of us. And, you know, I have
sympathy for Equitable. No one likes to lose $50 million. But
we couldn’t put ourselves in the position of having it happen to
us. Because we’re going in a new venture, a new company, a
new—a new direction. And nothing that Compact Video did, or
was, had any relevance to our new situation.
JUDGE NELSON: And presumably, The Equitable finally de-
cided that it would get less by a cash sale of the assets, as en-
cumbered as they were?
THE WITNESS: Right. And, in fact—
JUDGE NELSON Than if they went along with your proposal?
THE WITNESS: And, in fact, Security Pacific believed that it
would have gotten less than the face value of its debt. So there
would have been nothing left for Equitable. And Equitable
might have had to be around for years, in the process of a bank-
ruptcy, and deal with future liability, that—you know, who
knows what Equitable would have—
JUDGE NELSON: So they got off clean from a liability stand-
point?
THE WITNESS: Yeah.
40 The Respondent acknowledges (Br. 34) that the ‘‘sales contract
with ATS was not executed until August 3rd or 4th.’’ The indefinite-
ness traces from Walston’s testimony, where he suggests that the
parties had ‘‘signed’’ at least some sale agreement papers on August
3 (and perhaps all of them), but that on August 4, somebody discov-
ered an issue in the wording of something that had previously es-
caped the lawyers’ attention, which triggered further discussions of
valuation issues that were not resolved until August 4.
41 The Respondent (Br. 34) describes the sale agreement as a
‘‘huge and complex document.’’ From my personal observation of
what was presented by the Respondent for the General Counsel’s in-
spection at the July 25 trial session (see fn. [ ]), the Respondent’s
description is an understatement. Of the roughly 2000 pages com-
prising the ultimate ‘‘transaction document,’’ however, only two-
fragments, totaling 7 pages, found their way into this record. The
first is Jt. Exh. 3, a five-page excerpt from the sale agreement deal-
ing with ‘‘assets’’ and ‘‘liabilities’’ of CVG that were to be ‘‘ex-
cluded’’ from the sale and not to be ‘‘assumed’’ by ATS (which ap-
pears to be the entity actually called ‘‘Newco’’ in this excerpt,
which also refers to an entity called the Partnership.) And in this ex-
cerpt, ‘‘any and all rights of [CVG] under the Union contract’’ were
defined as ‘‘Excluded Assets,’’ and ‘‘any obligation or liability relat-
ing to the Union contract or to any grievances . . . or other claims
relating thereto’’ were defined as ‘‘Excluded Liabilities.’’ The other
fragment received into evidence in this case is Jt. Exh. 4, a two-page
schedule included in the sale agreement which sets forth the pay
rates—both before and after the sale— of certain named former bar-
gaining unit employees of the Respondent who were hired by ATS.
It shows that most of them received lower hourly pay rates after they
were rehired by ATS. (Indeed, because the parties stipulated that the
pay rates shown for the employees when they worked for the Re-
spondent fails to include contractual pay raises they had recently re-
ceived, we may infer that all of the employees on the list received
lower hourly pay after they were rehired by ATS.)
42 R. Br. 9.
43 There appears to be no dispute that nearly all of the Respond-
ent’s former employees were rehired by ATS. (Donlon, at Tr. 226;
postsale interest of any given valuation or debt allocation ar-
rangement or other structuring of the deal.36
Walston’s testified, moreover, that both Equitable and Se-
curity Pacific had to be persuaded to accept major losses on
their previous investments in CVG—in Equitable’s case, to
write off $50 million; in Security Pacific’s case, to swallow
$4 million of CVG’s indebtedness.37 While I accept
Walston’s testimony insofar as it suggests he had to work
hard in the final negotiations to get Equitable to accept a $50
million loss, I doubt him when he further suggests that Secu-
rity Pacific was resisting until the end absorbing $4 million
in debt owed by CVG. For as early as June 16, Security Pa-
cific had confirmed to Walston/Steinhart in writing its will-
ingness to ‘‘cancel’’ and ‘‘forgive’’ that amount of CVG’s
indebtedness, in order to ‘‘facilitate’’ the sale of CVG. And
for reasons tracing to the same source, I give no weight to
Walston’s additional assertion that, after Steinhart lost its bid
for AME, this caused Security Pacific to rethink from scratch
its own interest in helping to finance a purchase of CVG
alone.38 In sum, I accept only so much of Walston’s testi-
mony about the final negotiations as suggests that the
‘‘price’’ to Equitable—itself understood in terms of
Equitable’s concern about structuring the sale so as to mini-
mize ‘‘dilution’’ of its postsale interest in the acquiring en-
tity—was the principal issue to be resolved before the deal
could be concluded.39
In any case, as Walston testified, both Equitable and Secu-
rity Pacific became persuaded that Steinhart’s terms were
easier to accept than the alternatives, the bankruptcy of CVG
and the lingering liabilities associated with CVG. And once
the final terms were worked out, the parties were apparently
able to assemble and sign the same day (either on August
3 or August 4)40 an ‘‘agreement’’ package comprised of
roughly 2000 pages of terms and conditions and schedules
and appendices.41 And thus it was that on August 5, simulta-
neous with the Respondent’s dismissal of its employees, ATS
began to run CVG’s former operations, including the Re-
spondent’s,42 using many of the Respondent’s former em-
ployees.43
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137COMPACT VIDEO SERVICES
Blanchard, at Tr. 76; R. Br. 10.) What remains unclear, however, is
whether these rehirees were all put to work immediately, or perhaps
were rehired incrementally. Also unclear is whether ATS hired addi-
tional employees from ‘‘outside’’ to staff the Respondent’s former
operations.
44 R. Br. 7.
45 R. Br. 10. In this regard, although I won’t dwell on the point,
I retain more than a little doubt that CVG’s precarious financial po-
sition was a ‘‘secret’’ to its customers and vendors. Thus, both
Donlon and Sabin testified that CVG had been for many months
‘‘stretching’’ its major suppliers of critical video and film stock and
processing equipment. And Sabin conceded that these vendors would
‘‘know when they’re being stretched.’’ In addition, Donlon admitted
that the Respondent’s (or CVG’s) contract with The Disney channel
for final editing and satellite transmission included ‘‘covenants’’ re-
quiring that the Respondent/CVG maintain a certain ‘‘debt to eq-
uity’’ ratio, and a certain level of ‘‘financial performance,’’ and that
not only did The Disney channel ‘‘have the right to audit as it saw
fit to ascertain whether or not [the] ratios were being met[,]’’ but
‘‘as a matter of fact, they [Disney] did [conduct such audits].’’ And
Sabin further agreed that ‘‘Disney was pretty much in the picture
about where [CVG] stood financially by virtue of those rights.’’
46 Walston instructed Donlon to place these want ads on behalf of
ATS; Donlon assigned the task to Kristi Kleckner, the Respondent’s
(and/or CVG’s) human resources director. Donlon testified that al-
though he ‘‘objected’’ to such a want ad as ‘‘premature,’’ he never-
theless acquiesced, because, ‘‘when your white knight says to do
something, you do it.’’
47 These ads did not identify the ‘‘new . . . company now form-
ing,’’ nor did they give a name to the ‘‘we’’ who were ‘‘accepting
applications.’’ Rather, the ads gave only a Burbank street address
where ‘‘candidates’’ might ‘‘apply,’’ and a fax number through
which they might transmit ‘‘resume[s].’’
III. THE ALLEGED UNFAIR LABOR PRACTICES
The Respondent (indeed, CVG itself) admittedly tried to
(and largely did) keep the existence of these pending sale ne-
gotiations a ‘‘secret’’ from the Union and the bargaining unit
employees.44 But the Respondent claims, in substance, that
this was done not specifically to frustrate the Union’s and the
employees’ interest in having a say about how this sale
would affect them, but rather to ensure that the Respondent’s
(or CVG’s) customers and vendors would not learn of the
impending sale until it was a done deal. Thus, both Donlon
and Sabin testified, in substance, that total secrecy was
deemed important to CVG’s officers and owners because
they feared that if word got out to CVG’s already jittery cus-
tomers and vendors that some kind of sale was in the works,
both would be ‘‘spooked,’’ and the former might ‘‘bolt’’ and
the latter might ‘‘shut you off,’’ especially if the deal were
to collapse for some reason. And for this reason, ostensibly,
the Respondent admittedly gave the Union no ‘‘‘formal’ no-
tice’’ before the sale that such a deal was being actively pur-
sued.45
The secrecy enshrouding the deal, however, began to be
compromised as early as Thursday, July 22, when CVG’s
agent Kleckner, upon Walston’s direction by telephone from
New York to Donlon, placed orders for help wanted adver-
tisements with two entertainment industry journals, the Hol-
lywood Reporter and Daily Variety.46 These ads, which start-
ed to appear in these journals on Monday, July 26, stated in
pertinent part:
POSITIONS AVAILABLE
New state of the art video services company now form-
ing, pending acquisition of the assets of Compact Video
Services, Inc. [and two other named CVG subsidiaries]
on or about August 2nd 1993. We are accepting appli-
cations for all technical and support classifications.47
The Union’s Blanchard learned of these ads on Tuesday,
July 27, through a phone call from a member employed by
the Respondent, who also faxed a copy of the want ad to
Blanchard. Blanchard then placed the first in a series of calls
to the Respondent’s (actually, CVG’s) business offices in
Burbank. At about midday on July 27, Blanchard reached
Human Resources Director Kristi Kleckner by phone, and
‘‘asked her what was going on, what was with this ad?’’
Kleckner replied:
I don’t know anything more than you do. I’ve seen
the ad, but I don’t know anything more than what’s in
the ad.
Over the next few days, Blanchard tried several times to
reach Donlon by phone, but was regularly informed that
Donlon was ‘‘not in.’’ (Donlon admitted that Kleckner had
told him about Blanchard’s first call; he also admitted that
he was ‘‘probably’’ aware, too, that Blanchard had been try-
ing to reach him directly during this period, and that he did
not try to call Blanchard back. Considering the surrounding
circumstances, I have little difficulty finding that Donlon
was, in fact, aware of Blanchard’s calls, and that his failure
to return Blanchard’s calls was quite intentional.)
On July 29, having thus far run into what he called a
‘‘stone wall,’’ Blanchard dispatched a letter to Donlon
through three different media—registered mail, fax, and
hand-delivery to Donlon’s office. In pertinent part, this is
what Blanchard’s letter said:
It has come to the attention of the I.A.T.S.E. that
Compact Video assets are being acquired by an un-
known entity. (See enclosed ad in the Hollywood Re-
porter, dated 7/26/93, p. 24.)
Please state whether this acquisition is contemplated
at this time or expected in the foreseeable future. If so,
please provide the following information:
1. The name, address and telephone number of the
acquiring entity, including all officers.
2. All contracts, requests for proposals, and cor-
respondence relating to the acquisition.
3. Enumerate in detail all assets that may be subject
to the acquisition.
4. State whether you expect Compact Video Serv-
ices, Inc. employees’ terms and conditions of employ-
ment and/or job security to be affected by this trans-
action.
If your answer to No. 4 is anything other than an un-
qualified ‘‘no,’’ please describe all effects you expect
the transaction to have on the employees’ terms and
conditions and on their job security.
The IATSE hereby demands that Compact Video
Services, Inc. bargain over any decision to sell or other-
wise provide assets to any acquiring entity and over the
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138 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
48 Donlon testified that he distributed his own letter to employees
on July 30 because he ‘‘had a reasonable feeling that the transaction
would close,’’ a ‘‘feeling’’ that he implied was informed by his ad-
mitted contacts by telephone with Equitable’s representatives in the
New York negotiations. Given the fact that the distribution of this
letter was coordinated with the same-day distribution of Walston’s
letter, however, I infer that Donlon’s ‘‘feeling’’ that the deal would
close was at least equally influenced by communications from
Walston, the buyer’s representative, who, indeed, must have in-
structed Donlon to distribute both letters simultaneously, much as he
had earlier instructed Donlon to place the want ads in the Hollywood
Reporter and in Daily Variety.
49 This handbook, incorporating a specimen offer of employment,
was received as G.C. Exh. 4.
50 Donlon, at Tr. 252–254, esp. 254:3–6.
effects of any such transactions on any IATSE bargain-
ing unit employees.
Please call the undersigned in response to this letter
by 5:00 p.m. on July 30, 1993.
Donlon did not call Blanchard back or otherwise respond to
this July 29 letter.
On July 30, however, the Respondent’s employees and
those of other CVG subsidiaries received two letters an-
nouncing the intended sale—one from CVG, signed by
Donlon; the other from ATS, signed by Walston.48 In perti-
nent part, Donlon’s letter said this:
Dear employee:
. . . we have reached an agreement in principle to sell
the assets of . . . ‘‘the Compact companies’’ to ATS
Acquisition Corp. . . . The Company cannot continue
in its present form and must be sold. There is no op-
tion. . . . The sale is expected to close the week of
August 2, 1993. After the sale closes, you will no
longer be employed by the Compact companies. Many
of you will receive employment offers from ATS Ac-
quisition Corp. or its subsidiary companies. . . .
I encourage each of you to apply for employment, as
I have, with ATS Acquisition Corp. ATS . . . is ac-
tively considering its staffing needs and will be sending
out offers of employment shortly.
On behalf of the Compact companies, I want to ex-
press my thanks for your service.
Walston’s letter made essentially similar announcements
regarding the ‘‘agreement in principle’’ to buy CVG’s assets
as part of a sale that was ‘‘expected to close the week of
August 2, 1993.’’ He likewise ‘‘encouraged’’ the employees
to submit applications, and advised them that this must be
done by ‘‘no later than Monday August 2, 1993 [Walston’s
emphasis], which is the application deadline.’’ He further ad-
vised employees that ‘‘[t]he ATS application form is avail-
able in [CVG’s] Human Resources [office].’’ And in the
final two paragraphs of his letter, Walston said this:
I expect that ATS will be an exciting and rewarding
place to work. We believe our compensation and bene-
fits package will be competitive. We have worked on
this transaction for many months and have come to un-
derstand that highly motivated employees supported by
continued investment in the business will be critical to
our success.
We have been advised that if a certain number of
you are offered and accept employment, the union
which represented you at the Compact companies may
thereafter have the right to meet with ATS to discuss
a new collective bargaining agreement. In that event,
ATS will certainly satisfy all legal obligations with re-
spect to union negotiations.
Also, on or shortly after August 2, many of the Respond-
ent’s employees received written offers of employment by
ATS, together with a 39-page ‘‘Employee Handbook’’49 de-
scribing their terms and conditions of employment with ATS.
(Donlon, admittedly with the assistance of ‘‘Loeb and
Loeb‘‘—the attorneys for both the Respondent and ATS—
had been working up this handbook for ATS employees for
more than a week before the deal closed and perhaps for as
much as a month before the deal closed.)50
Blanchard soon learned of Donlon’s and Walston’s letters
to employees, and on or about August 2, to ‘‘reassure the
membership,’’ he visited the Respondent’s main Burbank
postproduction facility, which also housed CVG’s office
headquarters and Donlon’s and Kleckner’s offices. Cross-ex-
amined about this by the Respondent’s counsel, Blanchard
admitted that he talked with Kleckner, in her office, and
‘‘asked her for information,’’ but ‘‘was told she didn’t have
any idea,’’ neither ‘‘as to the closing date, [n]or the total ef-
fects.’’ Blanchard further acknowledged, albeit vaguely, that
in later telephone contacts with Kleckner before August 5, he
‘‘may have’’ raised questions about ‘‘severance pay’’ and
other questions about the impact on employees of the sale.
(E.g., ‘‘What happens to their medical benefits . . . their
pension plan?’’) With equal uncertainty, he acknowledged
that Kleckner ‘‘may have’’ replied, as to severance pay, that
the Respondent did not intend to give severance pay ‘‘to em-
ployees who were accepting employment with ATS.’’ So,
too, he recalled that Kleckner ‘‘may have’’ replied, ‘‘I don’t
know,’’ to many questions. He further recalled, more specifi-
cally, that Kleckner told him at least once that he could
‘‘grieve whatever [he] felt was grievable.’’
IV. EPILOGUE
Because both the prosecuting parties and the Respondent
have sought to support their respective claims and defenses
by reference to events occurring after the August 5 sale, I
record the following additional facts relevant to such claims
and defenses:
Pursuant to negotiations with ATS that preceded the sale,
Donlon became the president of ATS, and apparently contin-
ued to be in charge of the former CVG operations, now
being operated under the name ‘‘Four Media Company.’’
Sabin, too, emerged from the sale in roughly the same posi-
tion he had previously occupied with CVG; he became the
senior vice president of ATS/Four Media and its chief finan-
cial officer. Steinhart’s representative in the sale, Walston,
however, became the board chairman and chief executive of
ATS/Four Media.
I have noted that ATS is charged in a separate proceeding
with having violated certain labor relations obligations it al-
legedly owed to the Union as a successor to the Respondent.
On this record, it appears that ATS has declined thus far to
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139COMPACT VIDEO SERVICES
51 In his opening statement, the Respondent’s counsel, Richard
Kopenhefer (who also represents ATS in the successorship case),
averred, inter alia, that ‘‘ATS . . . has now granted recognition to
IATSE in the old Compact Video Services unit.’’ But he imme-
diately seemed to qualify (or even contradict) that representation
when he added that ATS ‘‘has in fact contended that a broader com-
panywide unit comprised of other companies acquired as part of the
same transaction is appropriate; hence the Burns successorship case
pending against ATS.’’ Tr. 30: 24–31: 7. Moreover, pertinent to
Kopenhefer’s averrals, I note that when he wrote (in his capacity as
attorney for ATS) to the Union’s attorney on August 17, Kopenhefer
said as follows:
In light of our conclusion regarding the appropriateness of a sin-
gle company-wide bargaining unit, we have concluded that ATS
is not a Burns-type successor under the National Labor Relations
Act. We must therefore decline your request to recognize IATSE
and bargain with it on the limited basis you propose. [G.C. Exh.
3(g), p. 2 (emphasis added)].
52 R. Exh. 7, p. 1.
53 G.C. Exh. 3(h), p. 2, last paragraph (August 17 union demand);
G.C. Exh. 3(k) (August 25 reiteration of demand, citing reasons); R.
Exh. 7, p. 2, item 4 (Respondent’s September 1 reply, asserting ‘‘no
coherent basis for your [production of sale documents request[,]’’
and therefore, ‘‘we fail to see how we have any statutory duty to
provide sales documents’’; and R. Exh. 8, items 3 through 5
(Union’s September 2 reiteration of demand for ‘‘all documents re-
lated to the assets sale,’’ again citing reasons). So far as this record
shows, the Respondent did not thereafter reply in any fashion to the
Union’s demands for sale documents.
54 Although it is uncertain on this record exactly how much of the
sale agreement was shown to the Union at the direction of the arbi-
trator, the parties stipulated that the papers the Union saw on No-
vember 24 included Jt. Exhs. 3 and 4. (As I have mentioned earlier,
these were: (1) a five-page extract from the sale agreement describ-
ing the ‘‘assets’’ and ‘‘liabilities’’ that CVG retained after the sale
(essentially, all assets and liabilities and obligations under the
‘‘Union contract,’’ and liabilities to employees under CVG’s ‘‘Em-
ployee Benefit Plans’’); and (2) a schedule attached to the agreement
comparing pre- and post-sale pay rates of certain former bargaining
unit employees of the Respondent who were rehired by ATS.
55 R. Exh. 9, p. 1.
56 John Wiley & Sons v. Livingston, 376 U.S. 543 (1964).
57 376 U.S. at 549.
58 Here, I refer to the nearly identical letters from Donlon and
Walston distributed to employees on July 30, announcing the
‘‘agreement in principle’’ regarding the sale, and encouraging the
employees to apply for work with ATS. Moreover, it is clear that
these letters were not intended as ‘‘notice’’ to the Union, but traced
instead from Walston’s apparent judgment by that date that the par-
ties’ interest in maintaining the secrecy of the pending deal had to
be subordinated to ATS’ own, posttakeover interests in having an
experienced cadre of employees to staff the new operation.
recognize the Union as the representative of a unit of em-
ployees limited to those doing work formerly performed in
the Respondent’s operation, but is contending instead that
recognition could only be granted in a combined unit of em-
ployees of all of CVG’s former operations.51
Although the Respondent has offered since at least Sep-
tember 1 to engage, post facto, in ‘‘effects bargaining’’ with
the Union,52 it refused then, and has continued to refuse the
Union’s additional demands since then, to see the sale trans-
action document(s) in their entirety.53 On November 24,
however, in the context of an arbitration of the Union’s
grievance seeking 2 weeks’ severance pay for all of the Re-
spondent’s former bargaining unit employees, the Respondent
disclosed to the Union a small number of transaction docu-
ments that the arbitrator had deemed relevant to that proceed-
ing.54 Moreover, since September 10, the Union has effec-
tively declared its unwillingness to conduct effects bargain-
ing unless or until the Respondent and ATS fulfill certain
conditions, including the disclosure of the sale documents in
their entirety.55
V. ANALYSIS; SUPPLEMENTAL FINDINGS; CONCLUSIONS
OF LAW
A. ‘‘Notice’’ and ‘‘Effects Bargaining’’ Issues
1. Introduction; controlling principles
The facts of this case illustrate rather vividly what the Su-
preme Court was talking about 30 years ago in Wiley,56
where it observed that:
Employees, and the union which represents them, or-
dinarily do not take part in negotiations leading to a
change in corporate ownership. The negotiations will
ordinarily not concern the well being of the employees,
whose advantage or disadvantage, potentially great, will
inevitably be incidental to the main considerations.57
Here, obviously, the Union took no ‘‘part’’ in the sale nego-
tiations; indeed, the Respondent (meaning, practically, CVG)
intentionally kept the Union and the employees in the dark
about the impending sale until late July,58 and thereafter re-
fused the Union’s demands for effects bargaining and for ad-
ditional information relating to the sale. Moreover, it is clear
what were the ‘‘main considerations’’ influencing the behav-
ior in the negotiations of Equitable, CVG’s majority owner,
and Security Pacific, CVG’s lender and senior lienholder—
they were set on salvaging what they could from investments
that apparently had looked much better to them in 1988,
when they financed the LBO, than they did by July 1993,
when their investment asset was headed for bankruptcy. Fi-
nally, as to the ‘‘inevitab[ility]’’ that the ‘‘well-being of em-
ployees’’ will be merely ‘‘incidental’’ to such main consider-
ations, there is not the slightest evidence that any of these
financial institutions (nor the Respondent and CVG, who al-
lowed Equitable to make whatever deal it could with
Steinhart) considered even for a moment the Union’s or the
Respondent’s employees’ rights and interests in such a trans-
action (except in the inverted sense that CVG—meaning Eq-
uitable—agreed that the Union’s and the employees’ rights
and claims under ‘‘the Union contract’’ and under CVG ben-
efit plans would be deemed to be ‘‘liabilities’’ not assumed
by ATS).
The legal issues in this case likewise are anticipated by the
Court’s recognition in Wiley that
[T]he objectives of national labor policy, reflected in
established principles of federal law, require that the
rightful prerogative of owners independently to rear-
range their business and even eliminate themselves as
employers be balanced by some protection to employ-
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140 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
59 Ibid.
60 Walter Pape, Inc., 205 NLRB 719, 720 (1973).
61 Willamette Tug & Barge Co., 300 NLRB 282 (1990).
62 Ibid.
63 Willamette, like this case, involved ‘‘secret’’ negotiations for the
sale of a union-represented employing entity, followed by an imme-
diate transfer of the employing operation as soon as the seller and
buyer had agreed on all the details of the deal and had signed off
on it, resulting in no effective notice to the union nor opportunity
to bargain about the effects of the sale and transfer until after they
were faits accomplis.
64 Id. at 282–283.
65 Ibid; emphasis added.
66 300 NLRB at 283 fn. 5, quoting National Terminal, supra at
465 fn. 1.
67 300 NLRB at 283 fn. 5.
68 On brief (p. 14), the Respondent asserts that it ‘‘satisfied its ob-
ligations under Section 8(a)(5) of the Act when it provided, and the
Union actually received, notice of the sale to ATS nearly a week
prior to its implementation.’’ (See also id. 17–18.) The Respondent
ees from a sudden change in the employment relation-
ship.59
Similar recognitions animate the settled principle that
when an employer decides to sell its business, it owes a duty
to so notify the union representing its employees and give
the union a meaningful opportunity to bargain with the em-
ployer over the effects on those employees of the decision
to sell. First National Maintenance Corp. v. NLRB, 452 U.S.
666, 681–682 (1981); Metropolitan Teletronics, 279 NLRB
957, 959 fn. 14 (1986), enfd. mem. 819 F.2d 1130 (2d Cir.
1987). The rationale for thus striking the ‘‘balance’’ in a
sale-of-business context is succinctly stated in NLRB v. Kirk-
wood Fabricators, 862 F.2d 1303, 1306 (8th Cir. 1988):
While requiring reasonable notice and effects bargain-
ing may make a sale of a business more difficult, the
‘‘ravages of economic dislocation’’ on employees and
their families terminated with no opportunities to plan
their [future] . . . maintains the balance in favor of up-
holding the Board’s determination.
One of the more difficult questions that survived these
precedents, however, was how to reconcile the union’s inter-
est in the earliest possible notice and bargaining opportunity
with the employer’s legitimate business interest in some
cases in keeping under wraps the existence of negotiations
for a sale of the business until the sale agreement is reached.
In at least one case, the Board had suggested that the em-
ployer owed a duty of notice and opportunity for effects bar-
gaining as soon as an ‘‘imminent’’ transfer of the business
was under ‘‘active consideration.’’60 In its 1990 decision in
Willamette Tug & Barge Co.,61 however, the Board revisited
these questions, and among other things, it rejected as ‘‘un-
workable’’ any ‘‘general rule’’ requiring an employer to give
notice and provide an effects bargaining opportunity when
the sale was ‘‘under active consideration,’’ or at any other
time before the ‘‘decision to sell’’ is reached—meaning,
more specifically, when the seller and buyer have
‘‘execut[ed] . . . a binding agreement to sell.’’62 Neverthe-
less, under circumstances that I judge are materially identical
to those in this case,63 the Willamette Board found that the
employer acted ‘‘in derogation of its obligation to notify and
bargain in advance,’’ and ordered a Transmarine remedy.64
It is worth reviewing how the Board arrived at that result,
and I thus quote at length from the Board’s decision:
Although we agree with the Respondent that the de-
cision to sell did not occur until the execution of a
binding agreement to sell, we find a violation in the
Respondent’s failure to provide any meaningful prior
notice to the Union that it was ceasing business and ter-
minating employees. If a seller and a purchaser can be
expected to negotiate about, and draft their agreement
to provide for satisfaction of, various contingencies
such as governmental clearances, so, too, should they
be able to account for the human factor—the employ-
ees’ interest in having their designated representative
notified and given an adequate opportunity to bargain
about the effects of the sale. That circumstances may
compel confidentiality in arriving at a sales agreement
does not obviate the employer’s duty to give pre-imple-
mentation notice to the union to allow time for effects
bargaining, provision for which may be negotiated in
the sales agreement. We do not presume here to advise
corporate negotiators how to accommodate the right of
a union to negotiate the effect of the sale on the em-
ployees it represents. We merely decide that, barring
particularly unusual or emergency circumstances, the
union’s right to discuss with the employer how the im-
pact of the sale on the employees can be ameliorated
must be reckoned with (as must compliance with other
governmental requirements) sufficiently before its ac-
tual implementation so that the union is not confronted
at the bargaining table with a sale that is a fait
accompli. Thus, the Union here was entitled to as much
notice of the closing and termination of employees as
was needed for meaningful bargaining at a meaningful
time. [Citing First National Maintenance Corp. v.
NLRB, supra, and Metropolitan Teletronics, supra.] We
need not decide exactly how many days’ notice would
be required for such a meaningful opportunity; we find
the Respondent’s same day notice clearly insufficient.65
In Willamette, the Board did not try to spell out what
might constitute ‘‘particularly unusual or emergency cir-
cumstances.’’ However, the Board suggested one possibility
when it referred to its decision in National Terminal Bakery
Corp., 190 NLRB 465 (1971). As the Willamette Board
noted, the National Terminal Board had found that the em-
ployer violated notice and bargaining duties when it shut
down its business, but nevertheless ‘‘declined to include a
backpay provision in the remedy because ‘[the employer’s]
decision to close its plant and the effectuation of that deci-
sion occurred almost simultaneously and resulted from press-
ing economic necessity.’’’66 However, as the Board stressed
in not excusing the employer’s behavior in Willamette, ‘‘the
Respondent here, in contrast, has failed to establish a similar
necessity but only that it desired to maximize the sale price
of the assets involved.’’67
2. Application to the facts
In this case, obviously, the Respondent gave no ‘‘pre-im-
plementation notice to the [U]nion to allow time for effects
bargaining.’’68 Neither did the parties in charge of the Re-
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141COMPACT VIDEO SERVICES
appears to be referring to the fact that the Union became aware on
or shortly after July 30 that the Respondent’s employees had re-
ceived letters from Donlon and Walston announcing an ‘‘agreement
in principle’’ to sell CVG in a deal that was ‘‘expected to close the
week of August 2.’’ Contrary to the Respondent, I find that this ‘‘ac-
tual notice’’ (such as it was) served merely to tantalize, but was
wholly meaningless in legal effect. For at the same time these letters
were being distributed to employees, and for the balance of the week
before the sale, the Respondent was stonewalling the Union’s per-
sistent attempts to discover the details and to bargain about the ef-
fects of the impending sale on the unit employees.
69 Willamette teaches that parties to the sale ‘‘can be expected’’ to
‘‘draft their agreement to provide for satisfaction of . . . contin-
gencies such as necessary governmental clearances.’’ In this case,
we need not resort to speculation about what parties can be ‘‘ex-
pected’’ to do when it comes to such ‘‘contingencies’’ as ‘‘govern-
mental clearances.’’ For Security Pacific’s June 16 letter to
Walston/Steinhart had acknowledged that one of Steinhart’s condi-
tions to proceeding with the acquisition was the ‘‘[r]eceipt of all re-
quired regulatory approvals, including without limitation, those re-
quired from the FTC and the FCC[,]’’ and I infer that Steinhart
would not have waived or abandoned its insistence on such ‘‘re-
quired . . . approvals’’ as part of the final deal. (Indeed, if the FTC
and FCC approvals were ‘‘required’’ in the case of such an acquisi-
tion, Steinhart was without power to waive or abandon such condi-
tions.) Moreover, given Walston’s testimonial insistence that it was
not clear until the final negotiations on August 4 that a deal could
be reached, I judge it inconceivable as a practical matter that
Steinhart or ATS had actually ‘‘received’’ by August 4 (or by Au-
gust 5, or by any other nearby point thereafter) any of the ‘‘required
regulatory approvals, including . . . from the FTC and the FCC.’’
In short, I infer not only that such ‘‘regulatory approvals’’ were a
necessary ‘‘condition’’ of the final deal, but also that they were
granted, if at all, only well after the August 5 implementation of the
other particulars of the deal. Thus, to this extent, at least, there were
‘‘delayed implementation’’ features to the deal.
70 At p. 22 of their brief, the Respondent’s attorneys argue that
‘‘delayed implementation’’ of the sale could not have worked be-
cause, by the end of July, the Respondent had ‘‘no money for a pay-
roll, only [for a] bankruptcy [filing].’’ Therefore, they argue, ‘‘CVSI
[the Respondent] could not delay implementation of the sale in order
to satisfy . . . notice obligations under Section 8(a)(5).’’ As I have
noted in my last footnote, however, there was at least one ‘‘delayed
implementation’’ feature of the August 4 deal—the receipt of nec-
essary clearances and approvals from the FTC and the FCC— and
somehow, CVG’s insolvency did not present an obstacle to those de-
layed implementation features.
71 Like the Willamette Board, I ‘‘do not presume here to advise
corporate negotiators how to accommodate the right of a union to
negotiate the effect of the sale on the employees it represents.’’
Rather, I merely point out in this paragraph one of perhaps many
available structures or devices by which the Respondent’s sellers
might have accommodated the Union’s legitimate interest in
preimplementation notice and effects bargaining.
72 As I have noted, supra, in its June 16 letter, Security Pacific had
assured Steinhart that CVG would receive funding necessary to con-
tinue in operation through the ‘‘closing’’ of the sale then in con-
templation, and to defer interest payments on its existing term loan
to CVG to as late as ‘‘July 15.’’ And even though Security Pacific
had announced in early July that it would cut off further funding to
CVG as of July 30, and CVG itself had no funds on hand to operate
after that date, someone other than CVG came up with enough
money to see CVG through until August 5. Clearly, therefore, it was
not inherently impracticable for the parties to have come up with a
Continued
spondent’s future try during the negotiations to ‘‘accommo-
date’’ the Union’s and the employees’ statutory interests with
their own professed interest in keeping the sale negotiations
a secret from the world, such as by negotiating a ‘‘provision
. . . in the[ir] sales agreement’’ that would have allowed
preimplementation notice and bargaining.69 Clearly, there-
fore, the Respondent’s behavior did not conform to its
preimplementation duties to the Union, as defined by Wil-
lamette, and just as clearly, the Respondent may escape li-
ability for a refusal-to-bargain violation under Section 8(a)(5)
only if it can be found that ‘‘particularly unusual or emer-
gency circumstances’’ excused it from those duties.
The Respondent’s ultimate defense is that the ‘‘exigen-
cies’’ of the situation presented the kinds of circumstances
envisioned by Willamette as perhaps excusing an employer
from its preimplementation notice and bargaining duties.
More specifically, the Respondent invokes ‘‘pressing eco-
nomic necessity’’ in a variety of arguments that commonly
stress that CVG faced imminent financial collapse. I ac-
knowledge that the record contains undisputed evidence that
CVG had been living at the sufferance of Security Pacific for
many months before the sale, and that after Security Pacific’s
ultimatums in early July, it faced a certain business shutdown
by the end of July, absent the intervention of a ‘‘white
knight.’’ Nevertheless, as I discuss below, a central problem
with the Respondent’s invoking of CVG’s ‘‘pressing eco-
nomic necessity’’ as a blanket defense to the Respondent’s
duties as defined in Willamette is that it does not follow from
Willamette that CVG ’s financial status is the key to deter-
mining whether the Respondent may be excused from its
preimplementation notice and bargaining duties. Rather, as I
see it, the real question in the light of Willamette’s teachings
is whether CVG’s financial straits somehow made it impos-
sible for the selling party to structure the sale so as to allow
the Respondent to discharge its notice and bargaining duties
to the Union. And it is when I review the record and the Re-
spondent’s arguments on brief with this latter question in
mind that I can find nothing persuasively suggesting that
such a structuring would have been impracticable, much less
impossible.
First, nothing in the Respondent’s presentation suggests
that this particular question of ‘‘structuring’’ was even
brought up during the sale negotiations. And although the
Respondent’s attorneys on brief have advanced their own
suggestions as to why such a structuring could not have
worked, their suggestions again assume that such structuring
was entirely precluded because CVG had no further operat-
ing funds to carry the business through a ‘‘delayed imple-
mentation’’ of the sale.70 Again, I think the main flaw in this
latter argument is the arbitrariness of its central assump-
tion—that CVG’s insolvency operated as a practical bar to
any delayed implementation structure.
As I construe the record, there was nothing—apart from
considerations of direct or indirect impact on the ‘‘sale
price’’ to Equitable—that would have prevented Equitable
(and/or Security Pacific, and/or ATS/Steinhart) from provid-
ing needed funds to maintain the Respondent’s operation
through a period of preimplementation notice and effects bar-
gaining with the Union.71 (These financial institutions were
not themselves shown to have been undergoing any financial
emergency of their own that would have precluded one or
more of them from advancing such funds; all they mutually
lacked, apparently, was any interest in even talking about
structuring their deal in such a way.)72 And on this record,
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142 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
similar device to see the Respondent through a period of
preimplementation notice and bargaining.
73 I am not aware of any post-Willamette case involving the sale
of a business in which the Board has found ‘‘particularly unusual
or emergency circumstances’’ that justified the employer’s failure to
give a union preimplementation notice and an opportunity for effects
bargaining over the sale. For this reason, even if the Respondent had
been able to demonstrate that the seller’s insistence on structuring
of the deal to allow for ‘‘delayed implementation’’ would have been
a ‘‘deal breaker,’’ I cannot be certain that this would have excused
the Respondent from its preimplementation notice and bargaining
obligations. I emphasize, however, that this precise question is not
presented here, because there is nothing in this record showing that
the idea of delayed implementation to accommodate the employees’
and the Union’s rights and interests was even discussed by the par-
ties who made the deal.
74 As I have previously noted, the complaint alleges that, ‘‘[s]ince
. . . July 22, 1993,’’ the Respondent has unlawfully ‘‘failed to give
the Union timely notice of its decision to sell or transfer its assets,
and has failed and refused to bargain with the Union about the ef-
fects of its sale or transfer of assets on the Unit employees.’’ From
her opening statement at trial, amplified on brief, it appears that
General Counsel has fixed on ‘‘July 22’’ as the triggering date for
these purposes because July 22 was the day CVG’s agents, acting
on behalf of ATS, placed orders for help wanted ads in the Holly-
wood Reporter and Daily Variety. And the General Counsel, joined
by the Union, further argues, on brief that with the ‘‘secrecy’’ of
the deal thus compromised on and after July 22, the Respondent no
longer had any legitimate interest in keeping the impending deal a
secret from the Union. However valid these latter points might be,
the most obvious problem with the prosecuting parties’ basic claim
in this regard is that it assumes the existence of a ‘‘decision’’ that
triggered a notice and bargaining duty on a date—July 22— that
clearly preceded the selling and buying parties’ concluding of a
binding buy-sell agreement. And to this extent, the claim ignores
Willamette’s teaching that ‘‘the decision to sell [does] not occur until
the execution of a binding agreement to sell,’’ and its related holding
that it is ‘‘unworkable’’ to impose a notice and bargaining duty at
some pre-‘‘binding agreement’’ point, such as the point at which a
sale decision may be ‘‘under active consideration.’’
75 See also Los Angeles Soap Co., 300 NLRB 289 fn. 1 (1990).
76 In addition, on the general subject of ‘‘relevancy,’’ I note that
the ‘‘relevance’’ of any particular information sought is to be judged
according to a liberal, ‘‘discovery-type’’ standard. Acme Industrial,
supra at 437. See also NLRB v. Truitt Mfg. Co., 351 U.S. 149
(1956).
it appears that if any of the parties to the sale had been will-
ing to provide in some way or other for such additional oper-
ating funding to CVG during a period of ‘‘delayed imple-
mentation,’’ the only part of their deal that might have been
expected to change, perhaps, is that the net ‘‘price’’ Equi-
table was to receive under the deal that was actually made
might have to be reduced or otherwise ‘‘diluted’’ by the
amounts necessary to maintain the Respondent for the notice
and bargaining period. In short, the seller might not have
gotten as much out of the deal as it was able to get by ignor-
ing the employees’ and the Union’s rights and interests. (Of
course, where there is no evidence that the New York nego-
tiators even considered such a possible structuring, we can
never be certain about what such negotiations might have
yielded; but neither would I presume on this record, as the
Respondent would have me do, that such a proposed struc-
turing would have been a ‘‘deal-breaker.’’)73
Thus, here, as in Willamette, we seem to be presented in
the end not with any ‘‘pressing economic necessity’’ on the
part of the beneficial owners of CVG’s equity and assets that
might have made it impossible for the deal to be structured
to permit Respondent to have given the Union
preimplementation notice and opportunity to bargain, but
only with a ‘‘desire’’ on the part of those owners to ‘‘maxi-
mize the sale price of the assets involved.’’ And clearly
under Willamette, this is no defense.
I therefore conclude as a matter of law that when the Re-
spondent failed to give the Union preimplementation notice
and an opportunity to conduct meaningful preimplementation
bargaining over the effects of the sale on its bargaining unit
employees, the Respondent committed unfair labor practices
within the meaning of Section 8(a)(5) and derivatively, Sec-
tion 8(a)(1). In reaching this conclusion, however, I do not
adopt the General Counsel’s contention that in the particular
circumstances of this case, the Respondent owed and violated
a duty to give the Union ‘‘notice’’ of the ‘‘decision’’ to sell
its assets and an opportunity to conduct effects bargaining
thereon, as early as ‘‘July 22.’’ Indeed, I feel constrained by
Willamette to reject any claim that supposes that the Re-
spondent’s duty to give the Union notice and an opportunity
to bargain arose on July 22, or on any other date before the
parties reached a binding buy-sell agreement.74 Rather, con-
sistent with Willamette, I will conclude simply that the Re-
spondent’s failure to give any preimplementation notice or
meaningful opportunity to bargain violated Section 8(a)(5).75
B. Information Disclosure Issues
1. Applicable principles
In Howard University, 290 NLRB 1006 (1988), the Board
summarized the principles and authorities bearing generally
on an employer’s duty under Section 8(a)(5) to disclose in-
formation to a union, as follows:
it is well established that an employer has an obligation
to provide a union with information relevant to its duty
as a representative of the employees. Washington Gas
Light Co., 273 NLRB 116 (1984). This obligation ex-
tends to information required by the union to process
a grievance. NLRB v. Acme Industrial Co., 385 U.S.
432 (1967); Designcraft Jewel Industries, 254 NLRB
791 (1981). The standard for the relevancy of the infor-
mation sought by the union is set forth in W-L Mould-
ing Co., 272 NLRB 1239 (1984), in which the Board,
citing NLRB v. Rockwell-Standard Corp., 410 F.2d 953,
957 (6th Cir. 1969), stated, ‘‘The Board’s only function
in such a situation is in ‘acting upon the probability
that the desired information was relevant, and that it
would be of use to the union in carrying out its statu-
tory duties and responsibilities.’’’76
. . . .
Relevancy, however, is not the sole factor in deciding
whether the information must be produced by the [em-
ployer]. Although the requested information may be rel-
evant, an employer may not be required to produce it
if such production violates confidentiality and privilege.
The [employer’s] claim of confidentiality must be bal-
anced against the Union’s need for relevant information
in pursuit of its role as a representative of the employ-
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143COMPACT VIDEO SERVICES
77 I note that the Union’s July 29 information demand included
‘‘all contracts, requests for proposals, and correspondence relating to
the acquisition,’’ but the complaint refers in this regard only to
‘‘[a]ll contracts relating to the acquisition.’’ Moreover, to the extent
counsel for the General Counsel has been specific in her brief about
what the Union has a right to see, she has focused on the ‘‘sales
agreement’’ or the ‘‘sales contract.’’ (Id. at pp. 9–10.) (The Union’s
brief is likewise focused. Id. at pp. 21–22.) I thus construe it to be
the General Counsel’s position that the Union’s statutory entitlement
to transaction documentation is limited to ‘‘contract’’ documents, but
does not include preliminary ‘‘proposals’’ or ‘‘correspondence . . .
relating to the acquisition.’’
78 313 NLRB at 1269, citing authorities at fn. 16, as follows: St.
Mary’s Foundry, 284 NLRB 221 (1987), enfd. 860 F.2d 679 (6th
Cir. 1988); Barnard Engineering Co., 282 NLRB 617 (1987);
Knappton Maritime Corp., 292 NLRB 236 (1988); NLRB v. New
England Newspapers, 856 F.2d 409 (1st Cir. 1988); Mary Thompson
Hospital v. NLRB, 943 F.2d 741 (7th Cir. 1991); and Chun Cha Fu,
Inc., 305 NLRB 143 (1991).
79 E.g., Live Oak Skilled Care & Manor, 300 NLRB 1040, 1049,
and authorities cited at fn. 20 (1990).
80 251 NLRB at 1226–1227.
81 Thus, the Union’s attorney, Gottlieb, wrote to the Respondent’s
attorney, Kopenhefer, on August 17 (G.C. Exh. 3(h)), reiterating the
Union’s July 29 demand for information, noting that the Respondent
was ‘‘hiding the ball,’’ and that such information would bear on the
claim being maintained by the Union that ATS was a ‘‘successor.’’
And on August 25, again reiterating the Union’s information demand
to another attorney in Kopenhefer’s office, Richard Zuniga, (G.C.
Exh. 3(k)), Gottlieb again reiterated the Union’s request for the
‘‘sales agreement,’’ noting that the Union had filed ‘‘multiple
claims’’ against the Respondent and/or ATS (including by then a
grievance asserting rights under the Art. 35 ‘‘binding on successors
and assigns’’ clause, and other grievances for ‘‘severance pay,’’ and
a lawsuit under the Federal ‘‘WARN Act’’), and arguing, in sub-
stance, that the ‘‘sales agreement’’ was relevant to all those pending
claims. And in Gottlieb’s August 27 letter to Kopenhefer (G.C. Exh.
3(m)), Gottlieb cited the Union’s suspicions that an ‘‘alter ego rela-
tionship’’ may exist between CVG and ATS, and again cited the
pendency of other ‘‘substantial monetary claims against [the Re-
spondent]’’ as reasons which ‘‘clear[ly]’’ made it ‘‘relevant to [the
Union’s] representational rights and obligations’’ to be able to re-
view the ‘‘content of the sales agreement.’’ (Indeed, in that letter,
Gottlieb cited many of the same legal authorities I have cited, supra,
as containing ‘‘applicable principles.’’) See also R. Exh. 8, items 3–
5 (Union’s September 2 reiteration of demand for ‘‘all documents
related to the assets sale,’’ again citing reasons), to which the Re-
spondent has apparently never replied.
ees. Detroit Edison v. NLRB, 440 U.S. 301 (1979). . . .
The party asserting confidentiality has the burden of
proof. McDonnell Douglas Corp., 224 NLRB 881
(1976).
In the light of these teachings, and considering the focus
of the complaint counts relating to the Respondent’s refusal
to satisfy the Union’s July 29 demand for information, we
are presented, finally, with two questions: (1) Were ‘‘the
name and telephone number of the acquiring entity, including
all officers,’’ and ‘‘[a]ll contracts relating to the acquisi-
tion’’77 items of information that were relevant to the
Union’s effective performance of its representative function?;
and (2) Even if such information was relevant to the Union’s
representative needs, was the Union’s interest in such infor-
mation outweighed by substantial claims of confidentiality or
privilege?
Pertinent to issue of the relevancy of the requested infor-
mation—and especially the Union’s demand for ‘‘all con-
tracts relating to the acquisition‘‘—are the discussion and au-
thorities cited in Daniel J. Burk Enterprises, 313 NLRB
1263, 1269 (1994). There, Administrative Law Judge George
Christensen, affirmed by the Board, summarized the state of
the law as follows:
In a number of . . . cases, the Board and reviewing
courts have held an employer who has sold its assets
or business to another employer violates the Act by
failing or refusing to provide the union representing its
employees with a copy of the contract of sale between
the employer and the asset purchaser . . . [which] deci-
sions were grounded on the premise [that such] re-
quested information would enable the union to deter-
mine if the employer and the purchaser were a single
employer . . . or the alter ego or the successor of the
employer, to aid the union in deciding whether to file
an appropriate action against the employer.78
Other authorities not listed by Judge Christensen similarly
stress that a Union has a legitimate interest, as an aspect of
its right to bargain over the effects of a sale, in getting infor-
mation about the sale of a business.79 Thus, in Westwood Im-
port Co., 251 NLRB 1213 (1980), the Board affirmed Judge
Jerrold H. Shapiro’s reasoning and holding, as follows:
One obvious way of seeking to protect the interests
of the employees it represented was for the Union to
find out whether the new owner was a new and distinct
business entity, and, if so, whether it was a successor
employer obligated to recognize and bargain with the
Union. In other words, the Union needed the requested
information to determine whether, after the change of
ownership, the [new] employer was still obligated to
recognize and bargain with the Union as the representa-
tive of the employees in the certified unit. Under the
foregoing circumstances, and since the sale of the busi-
ness vitally affected the employees’ terms and condi-
tions of employment, I am persuaded that information
concerning the sale was relevant to the Union’s duty to
intelligently represent the employees.80
2. Application to the facts
I find that the Union legitimately needed to know ‘‘the
name and telephone number of the acquiring entity, including
all officers,’’ and to examine ‘‘[a]ll contracts relating to the
acquisition.’’ I so find for essentially the same reasons noted
in the foregoing authorities—to help the Union determine, at
the threshold, whether or not the ‘‘sale’’ involved the substi-
tution of a mere alter ego of the Respondent, and/or to help
determine whether or not the sale would involve someone
who owed a successor’s duty to recognize and bargain with
the Union. Indeed, the Union invoked these very reasons—
and others of seemingly equal validity, relating to pending
grievances and a ‘‘WARN Act lawsuit’’—in its persistent
correspondence with the Respondent’s attorneys, after the
Respondent had ignored the Union’s initial demand for such
information on July 29.81 And despite the Union’s persistent
and plausible explanations for needing such information, the
Respondent’s last—and apparently only—specific reply to
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144 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
82 It is true that, on December 9–10, in arguing in support of its
petition to revoke the General Counsel’s subpoenas seeking produc-
tion for the General Counsel’s inspection of the documents compris-
ing the sale agreement, the Respondent’s counsel asserted confiden-
tiality and privilege arguments. (The only items identified by the Re-
spondent’s counsel in this respect were (1) a schedule incorporated
into the sale agreement listing CVG’s ‘‘creditors’’ and the amounts
owed, and (2) salaries of nonbargaining unit employees of ATS. De-
spite my several invitations to counsel to identify a legal ‘‘privi-
lege’’ that would insulate either of those categories of ‘‘transaction
documents’’ from disclosure, however, counsel did not do so. And
he made only the vaguest argument that these categories of docu-
ments fell within a recognized zone of privacy or ‘‘confidentiality.’’)
Moreover, as the record shows, in substantially denying the petition
to revoke I found a ‘‘liberal, discovery standard’’-basis for the ‘‘rel-
evancy’’ of the sale transaction documents to the issues raised by
the complaint and the Respondent’s defenses thereto. And in grant-
ing the petition to revoke so as to shield from the General Counsel’s
inspection only those documents containing salary information of
nonbargaining unit employees of ATS, I noted simply that the Gen-
eral Counsel had failed to persuade me that such information was
relevant to the issues in the case, even under the ‘‘liberal, discovery
standard’’ under which subpoena disclosure disputes are to be ana-
lyzed. And having so ruled, I did not reach the question whether any
of the salary information was shieldable as ‘‘confidential.’’ Neither,
in ruling on the subpoena question, did I purport to decide the quite
separate question of the Union’s statutory right to have viewed the
entire sale agreement, including the ‘‘ATS nonunit salary’’ docu-
ments.
83 As the Board noted in Howard University, supra, ‘‘The party as-
serting confidentiality has the burden of proof. McDonnell Douglas
Corp., 224 NLRB 881 (1976).’’
84 R. Br. 34; emphasis added.
85 On this latter point, the Respondent’s only argument (Br. 34) is
that on November 24, during the severance pay arbitration, the Re-
spondent ‘‘provided the Union with those portions of [the] huge and
complex [sale agreement] document which were germane to the
issues in that case.’’ This disclosure, however, was both too late and
too little. It came 4 months after the Union’s initial demand, and not
in response to that demand, but rather, under order of an arbitrator;
and by the Respondent’s admission, it gave the Union only so much
information about the sale agreement as the arbitrator ruled, after in
camera examination, was ‘‘germane’’ to the severance-pay griev-
ance. Clearly, therefore, this limited disclosure did not respond to the
Union’s legitimate interest in seeing the entire agreement, insofar as
it might illuminate such questions as the possible status of ATS as
an alter ego or disguised continuance of CVG, or the possible status
of ATS as a successor to the Respondent’s labor relationship with
the Union.
these demands was notable for a certain legal obtuseness.
Thus, on September 1, Richard Kopenhefer, writing as the
Respondent’s attorney, told the Union’s attorney, Ira Gott-
lieb, as follows: (R. Exh. 7, p. 2, item 4):
Regarding your demand for production of sale docu-
ments, we still see no coherent legal basis for your re-
quest. Since we had no duty to bargain concerning our
decision to sell the company’s assets, we fail to see
how we have any statutory duty to provide sales docu-
ments.
As the authorities cited in the previous section make clear,
it is quite irrelevant to the question of a union’s rights to in-
formation about a sale of the employing enterprise that the
seller is not legally required to bargain about its ‘‘decision’’
to sell the business. For the employer-seller still must bargain
about the effects of such a decision on unit employees, and
as an incident thereto, it must normally give the union ac-
cess, upon request, to the sale agreement and more generally,
to ‘‘information concerning the sale.’’ And Attorney
Kopenhefer may be presumed to have been aware of these
legal realities, not least because, in a letter to Kopenhefer
dated August 27, Gottlieb had cited many of the same au-
thorities I have previously referred to. Accordingly, it is rea-
sonably clear that the Respondent’s refusal to furnish the sale
agreement was not genuinely grounded in the reason ad-
vanced by Kopenhefer on September 1 for refusing to ‘‘pro-
vide sales documents.’’ Neither, obviously, would such a rea-
son make out a defense to its refusal to produce such docu-
ments.
Significantly, moreover, the Respondent on brief has made
no claim whatsoever that furnishing the Union with the infor-
mation at issue would ‘‘violate confidentiality and privi-
lege.’’82 In the absence of any such claim, and in the light
of the Respondent’s failure to make a record on which such
a claim might be judged,83 I do not propose, sua sponte, to
assess any such potential claims, but will treat them as hav-
ing been waived or abandoned. Finally, I am not persuaded
by the arguments that the Respondent has chosen on brief to
advance in defense of its refusal to disclose the information
at issue. Thus, the main defense to production invoked by the
Respondent is pinned to the (unexceptionable) claim that the
Respondent ‘‘could not furnish the Union with ‘contracts re-
lating to the acquisition’ prior to the sale . . . for a very ob-
vious reason. The sales contract with ATS was not executed
until August 3rd or 4th.’’84 As I acknowledge below, the Re-
spondent’s point is valid, but only insofar as the complaint
alleges that the Respondent owed a duty as early as ‘‘July
29’’ to furnish the Union with the ‘‘contracts relating to the
acquisition.’’ And clearly, this argument can serve as no de-
fense to such production after the binding agreement to sell
was executed.85
Accordingly, I conclude as a matter of law that the Re-
spondent’s refusal to disclose to the Union the information
items identified in the complaint—‘‘the name and telephone
number of the acquiring entity, including all officers,’’ and
‘‘[a]ll contracts relating to the acquisition’’—violated Section
8(a)(5) and derivatively, Section 8(a)(1). Contrary to the
complaint, however, which alleges that the Respondent’s
duty to disclose all such information arose as early as ‘‘July
29,’’ I find that the information thus described could not
exist until the August 3 or 4 date when the sale agreement
was executed. And therefore, I treat the Respondent’s viola-
tion in this respect as having begun on whichever of those
two dates the execution of the agreement actually took place.
THE REMEDY
On the strength of the Board’s same-day decisions in Wil-
lamette, supra, Los Angeles Soap, supra, and Live Oak Con-
valescent Center, supra, I find that a ‘‘Transmarine back-
pay’’ order is required to remedy the Respondent’s unlawful
failure and refusal to give the Union preimplementation no-
tice of the sale, and a meaningful opportunity to bargain, be-
fore the sale was fait accompli, about the effects of the sale
on the employees it represented. Moreover, to remedy the
Respondent’s unlawful withholding of the information in
question, and to ensure that any effects-bargaining con-
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145COMPACT VIDEO SERVICES
86 I note, moreover, that the Respondent made no showing that
might support a claim of post sale ‘‘inability to pay’’ on the Re-
spondent’s part.
87 Particularly unimpressive was the Respondent’s suggestion (Br.
at p. 30) that this case may be distinguished from Willamette and
Live Oak on the ground that in those cases, unlike here, the employ-
ers were ‘‘bad.’’ Neither am I persuaded that it was critical to the
Board’s ordering of a Transmarine remedy in Live Oak that there
the union had certain express contractual rights to presale notice and
effects bargaining. Indeed, I find Live Oak far more striking for the
fact that there, unlike here, it was absolutely clear that ‘‘not a single
employee suffered a penny’s loss of earnings (nor a moment’s loss
of work) as a result of Respondent’s unlawfully unilateral implemen-
tation of its decision to transfer the operation to the successor.’’ (300
NLRB at 1052.) (Also, there, unlike here, the successor had imme-
diately recognized the union when it acquired the enterprise, and had
soon thereafter adopted the predecessor’s labor agreement with the
union. Id. at 1045–1046.) Nevertheless, in holding that ‘‘a
Transmarine backpay remedy is warranted in this case’’ (id. at
1042), the Board appears to have relied on two factors that are like-
wise present in this case: (a) The union had indicated a ‘‘keen inter-
est in, and a quick response to, any indication that the . . . facility
would be sold,’’ and was otherwise diligent in seeking to gain infor-
mation and to conduct effects bargaining before the transfer of the
employing enterprise (id. at 1040–1041); and (b) the respondent-em-
ployer’s unlawful refusals to bargain with the union made it ‘‘not
clear’’ whether or not the union ‘‘might have’’ gained more for the
employees, such as ‘‘severance pay,’’ if ‘‘timely, effects bargaining’’
had been conducted. (Id. at 1040–1042; see especially p. 1042 fn.
9.) And therefore, the Board found it ‘‘reasonable to require that ‘the
employees whose statutory rights were invaded . . . and who may
have suffered losses in consequence thereof, be reimbursed for such
losses,’’ through the device of a ‘‘Transmarine backpay remedy.’’
(Id. at 1042; emphasis added.)
88 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.
templated by the Transmarine order is meaningful, my Order
requires the Respondent immediately to furnish the Union
with the information in question, without need for further re-
quest by the Union, and the backpay feature of my Order
contemplates that the ‘‘backpay period’’ will in no event ter-
minate before the Respondent furnishes the information in
question to the Union, or the Union waives its right to such
information. Also, in addition to the customary notice post-
ing requirement at the Respondent’s own offices or facilities
(which may be pointless if the Respondent no longer has em-
ployees or operations), my Order directs that, unless
ATS/Four Media is itself willing to post the Respondent’s
notices in the facilities and operations it took over from the
Respondent (where many, if not most of the Respondent’s
former employees are now working), the Respondent shall
mail copies of the notices to its former employees at their
last known mailing addresses.
I have considered the Respondent’s arguments in its brief
for withholding a Transmarine remedy, but I remain
unpersuaded by any of them. Thus, to the extent that the Re-
spondent relies on ‘‘financial emergency,’’ I find its argu-
ments no more persuasive in this context than I did when the
same considerations were invoked as defenses to the Re-
spondent’s violations of Section 8(a)(5).86 And I find espe-
cially unconvincing the Respondent’s attempts to distinguish
this case for remedial purposes from Live Oak (or from Wil-
lamette).87 Finally, the Board’s recent decision in Dallas
Times Herald, 315 NLRB 700 (1994), would appear to dis-
pose of points the Respondent raised only indistinctly during
the trial concerning the impact of the WARN Act on the ap-
propriateness of a Transmarine remedy.
On these findings of fact and conclusions of law and on
the entire record, I issue the following recommended88
ORDER
The Respondent, Compact Video Services, Inc., Burbank,
California, its officers, agents, successors, and assigns, shall
1. Cease and desist from
(a) Failing and refusing to give timely notice and to bar-
gain with International Alliance of Theatrical Stage Employ-
ees (IATSE) as the exclusive representative of its employees
in the unit covered by its most recent collective-bargaining
agreement with IATSE, with respect to the effects on its unit
employees of the decision to sell or otherwise transfer its as-
sets and operations covered by the agreement.
(b) Failing or refusing to furnish IATSE with the informa-
tion found here to have been relevant and necessary to
IATSE’s performance of its function as the representative of
unit employees, to wit: The name and telephone number of
the entity that acquired the assets and took over the oper-
ations of the Respondent and its parent, Compact Video
Group, Inc. , and all contracts relating to the acquisition.
(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) Immediately and without precondition furnish to
IATSE the name and telephone number of the entity or enti-
ties that acquired the assets and/or took over the operations
of the Respondent and its parent, Compact Video Group,
Inc., together with all contracts relating to the acquisition and
takeover.
(b) On request, bargain collectively in good faith with
IATSE concerning the effects on its employees in the
IATSE-represented unit of the decision to sell or otherwise
transfer its assets and operations and to terminate the em-
ployees.
(c) Subject to the following specifications and limitations,
pay backpay and interest to the IATSE-represented employ-
ees terminated on or about August 5, 1993, as part of the
acquisition and takeover. Backpay shall be paid at the rate
earned by the unit employees on their last date of employ-
ment with the Respondent; interest is to be computed as pre-
scribed in New Horizons for the Retarded, 283 NLRB 1173
(1987). The backpay period shall commence on the 6th day
after this decision and order is entered and shall continue to
run until the earliest of the following conditions occurs: (1)
The Respondent reaches agreement with IATSE concerning
the effects of the sale on the unit employees; (2) the Re-
spondent and IATSE reach a bona fide impasse in such bar-
gaining unrelated to any failure on the Respondent’s part to
have furnished the information it is separately directed herein
to furnish to IATSE; (3) IATSE, within 5 days after having
been furnished with the information in question, or having
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146 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
89 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.’’
waived its right to such information, fails to request bargain-
ing, or fails to commence negotiations within 5 days of the
Respondent’s own request to bargain; (4) IATSE fails to bar-
gain in good faith. But in no event shall the backpay sum
paid to any of those employees exceed the amount they
would have earned as wages from the date of their termi-
nations by the Respondent to the date they secured equiva-
lent employment elsewhere, or the date on which the Re-
spondent shall have furnished the information in question
and offered to bargain in good faith; provided further, how-
ever, in no event shall the backpay sum be less than such
employees would have earned for a 2-week period at the rate
of their wages when last in the Respondent’s employ.
(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 analyze the
amount of backpay due under the terms of this Order.
(e) Post at its Burbank, California offices and facilities
copies of the attached notice marked ‘‘Appendix.’’89 Copies
of the notice, on forms provided by the Regional Director for
Region 31, after being signed by the Respondent’s authorized
representative, shall be posted by the Respondent imme-
diately 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.
(f) Sign and return to the Regional Director sufficient cop-
ies of the notice for posting by ATS Acquisition Corp., Inc.
and/or Four Media Company, if willing, at all places where
notices to employees are customarily posted.
(g) Absent the willingness of ATS and/or Four Media to
thus post notices, the Respondent shall mail signed copies of
the notices to its employees on its payroll on its last day of
operations, to those employees’ last known addresses.
(h) Notify the Regional Director in writing within 20 days
from the date of this Order what steps the Respondent has
taken to comply.
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 vio-
lated the National Labor Relations Act and has ordered us
to post and abide by this notice.
Section 7 of the Act gives employees these rights.
To organize
To form, join, or assist any union
To bargain collectively through representatives of
their own choice
To act together for other mutual aid or protection
To choose not to engage in any of these protected
concerted activities.
WE WILL NOT fail and refuse to give timely notice to and
bargain with International Alliance of Theatrical Stage Em-
ployees (IATSE) as the exclusive representative of our em-
ployees in the unit covered by our most recent collective-bar-
gaining agreement with IATSE, with respect to the effects on
our unit employees of the decision to sell or otherwise trans-
fer our assets and operations covered by said agreement.
WE WILL NOT fail or refuse to furnish IATSE with the in-
formation found by the Board to have been relevant and nec-
essary to IATSE’s performance of its function as the rep-
resentative of a unit of our employees, to wit: The name and
telephone number of the entity that acquired the assets and
took over the our operations and those of our parent, Com-
pact Video Group, Inc., and all contracts relating to the ac-
quisition.
WE WILL NOT in any like or related manner interfere with,
restrain, or coerce employees in the exercise of the rights
guaranteed them by Section 7 of the Act.
WE WILL immediately and without precondition furnish to
IATSE the name and telephone number of the entity or enti-
ties that acquired the assets and/or took over our operations
and those of Compact Video Group, Inc., together with all
contracts relating to the acquisition and takeover.
WE WILL, on IATSE’s request, bargain collectively in
good faith concerning the effects on our employees in the
IATSE-represented unit of the decision to sell or otherwise
transfer our assets and operations and to terminate our em-
ployees.
WE WILL, subject to certain specifications and limitations
in the Board’s Order, pay backpay and interest to the
IATSE-represented employees we terminated on or about
August 5, 1993, as part of the acquisition and takeover.
COMPACT VIDEO SERVICES, INC.
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