Fairlawn Care Center

National Labor Relations Board - Board Decisions

Dec 8, 1977

233 N.L.R.B. 1025 (N.L.R.B. 1977)

FAIRLAWN CARE CENTER
Lutheran Homes and Hospitals, Inc. d/b/a Fairlawn
Care Center and Service Employees International
Union, Local No. 49, AFL-CIO. Case 36-CA-
2917
December 8, 1977
DECISION AND ORDER
BY CHAIRMAN FANNING AND MEMBERS
JENKINS AND MURPHY
On April 25, 1977, Administrative Law Judge
Earldean V. S. Robbins issued the attached Decision
in this proceeding. Thereafter, the General Counsel
filed exceptions and a supporting brief, and Respon-
dent filed a brief in support of the Administrative
Law Judge's Decision.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the
National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
The Board has considered the record and the
attached Decision in light of the exceptions and
briefs and has decided to affirm the rulings, findings,
and conclusions of the Administrative Law Judge
only to the extent consistent herewith.
The Administrative Law Judge concluded that
Respondent's admitted refusal to continue to recog-
nize the Union, which had represented its employees
for many years, following the relocation of its facility
to a nearby site was not violative of Section 8(a)(l)
and (5) of the Act as alleged in the complaint. The
General Counsel has filed exceptions to this conclu-
sion. For the following reasons, we find those
exceptions meritorious.
The essential facts and circumstances leading up to
the establishment of the new facility at Gresham on
June 21, 1976,1 are fully and accurately set forth by
the Administrative Law Judge and will not be
repeated here. Based on these facts, she correctly
found that this facility is merely a relocation of
Respondent's previous Foster Road facility known as
the Fairlawn Nursing Home.
Thus, the initial question presented here is whether
or not Respondent and the Union agreed during the
1975 collective-bargaining negotiations that the
contract would apply to the employees at the new
facility. The record with respect to this question
shows that the testimony of Skans, Respondent's
administrator of the Foster Road facility at the time,
and Kelly, the Union's business agent, the sole
parties to the collective-bargaining negotiations in
IAll dates hereafter are in 1976, unless otherwise indicated.
2 Although the Administrative Law Judge discredits Kelly's testimony
that Skans had specifically agreed that the 1976 contract would apply to the
new facility, she generally finds Skans to be a credible witness, concluding
233 NLRB No. 149
1975, is consistent and uncontradicted that they had
discussed the application of the contract to the new
facility and agreed that it would apply. Kelly also
testified that he asked Skans if he had the authority
to make such an agreement and was assured by
Skans that he did, which Skans' testimony also
corroborates.
Despite the state of the record, the Administrative
Law Judge nevertheless discredits Kelly's testimony
and finds that Skans' testimony concerning the
purported agreement was not based on specific
recollection but merely on an assumption. In
reaching her conclusion as to Skans' testimony, the
Administrative Law Judge confuses two distinct
conversations described in his testimony. The first is
his discussion during negotiations with Kelly in
which he testified that he agreed that the contract
would apply to the new facility and told Kelly that he
had the authority from his principals to make that
assurance. The record shows no equivocation or
uncertainty in Skans' testimony about that discus-
sion.
The second conversation dealt with a discussion
Skans had with Gregersen, Respondent's chairman
of the board, prior to his agreement with Kelly
during which Skans sought approval of the new items
to be included in the 1976 contract. While we might
differ with the Administrative Law Judge's conclu-
sion that Skans' testimony does not establish that
Gregersen in fact gave him actual authority to agree
that the new contract would apply to the new
location, we need not decide that question inasmuch
as the record is clear that Skans, who had been the
sole negotiator of several prior contracts with the
Union and had given Kelly his personal assurance
that he had actual authority to make the agreement
in question, had at least apparent authority sufficient
to bind Respondent. The Anaconda Company, 224
NLRB 1041, 1051 (1976).
In addition, contrary to the Administrative Law
Judge, we find that the 1976 collective-bargaining
agreement itself tends to support the fact of an
agreement that it would apply to the new facility
inasmuch as its termination date was the end of the
calandar year even though both parties were aware at
the time of its signing that a mid-year relocation was
all but certain.
We find, therefore, that the preponderance of the
credible evidence2 supports the General Counsel's
contention that the parties had agreed to apply the
1976 contract to the employees at the Gresham
location, that Respondent was thereby obligated to
only that his testimony showed that he had no actual recollection of any side
agreement with Kelly. We find, based on the record as discussed above, that
such a conclusion is unwarranted.
1025
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
recognize and bargain with the Union and to apply
the contract, and that its admitted failure and refusal
to do so constitutes a violation of Section 8(a)(l) and
(5) of the Act.
In dismissing the complaint, the Administrative
Law Judge also rejected the General Counsel's
alternative contention that, even if no agreement had
been made to apply the 1976 contract to the new
facility, the Union nevertheless represented a majori-
ty of Respondent's employees at the time of the
relocation and is therefore obligated to bargain on
that basis alone. While resolution of this issue is not
necessary in light of the result we have reached as to
the establishment of the agreement by the parties to
apply the contract to the new facility, we find, in
agreement with the General Counsel, that the
Administrative Law Judge's determination with
respect to this question is also in error.
The stipulation of the parties provides, and the
Administrative Law Judge found, that, as of June 21,
22 unit employees were transferred 3 to the new
facility and 16 new hires were also working at that
time. Over the course of the following 2 weeks, 10
additional new hires began working on various dates.
Although the stipulation does support the Adminis-
trative Law Judge's further finding that these 10
employees had been given employment commit-
ments prior to June 21, we are unable to agree with
the Administrative Law Judge's comment that it is
not significant that these individuals were not yet
working on that date, and that day should therefore
be counted in determining the size of the unit as of
June 21. It is well established that an employee is not
considered to be in the unit until the date he or she
actually begins working.4 Therefore, inasmuch as
Respondent's obligation to bargain with the Union is
determined as of the time it began its operation at the
new location and is not affected by the subsequent
hiring of additional employees alone,5 we find that as
of the commencement of operations at the new
facility the Union represented at least 22 of the 38
employees in the appropriate unit, which, along with
the preliminary findings of the Administrative Law
Judge establishing the continuity of Respondent's
operations and functions, provides a sufficient
independent predicate for finding that Respondent's
refusal to bargain is in violation of Section 8(a)(l)
and (5) of the Act and we so find.
3 Although some undisclosed number may not have begun actually
working on that date.
4 See Ra-Rich Manufacturing Corp., 120 NLRB 1444, 1447 (1958).
5 W T. Grant Company. 197 NLRB 955 (1972).
6 See, generally, Isis Plumbing & Healing Co., 138 NLRB 716 (1962).
THE REMEDY
Having found that Respondent has engaged in
certain unfair labor practices, we shall order that it
cease and desist therefrom in any like or related
conduct and take certain affirmative action designed
to effectuate the policies of the Act.
Having found that Respondent has refused to
bargain with the Union, we shall order that, upon
request, it bargain collectively with the Union as the
exclusive bargaining representative of the employees
in the unit herein found appropriate at Respondent's
Gresham, Oregon, facility.
Having further found that Respondent's refusal
specifically to apply the terms and conditions of its
1976 collective-bargaining agreement with the Union
to its employees at the Gresham facility, after having
agreed to do so, also violated the Act, we shall order
Respondent to make whole all of its employees for
any losses in wages or other benefits which may have
been occasioned by Respondent's refusal to apply
said collective-bargaining agreement, with interest
thereon to be computed in the manner prescribed in
Florida Steel Corporation, 231 NLRB 651 (1977).6
CONCLUSIONS OF LAW
I. Respondent is an employer engaged in com-
merce within the purview of Section 2(6) and (7) of
the Act.
2. The Union is a labor organization within the
meaning of Section 2(5) of the Act.
3. All nonprofessional employees of Respondent
including janitors, ward maids, practical nurses,
nursing attendants (male and female), window
washers, seamstresses, laundry workers, culinary
workers, and gardeners; excluding office clerical
employees, licensed practical nurses, guards, profes-
sional employees, and supervisors as defined in the
Act, constitute an appropriate unit for the purposes
of collective bargaining.7
4. By refusing on and after June 21, 1976, to
recognize and bargain collectively with the Union as
exclusive representative of the employees in the
appropriate unit herein described and by refusing to
apply the collective-bargaining agreement in effect,
Respondent has engaged in unfair labor practices
within the meaning of Section 8(aX5) and (1) of the
Act.
5. The aforesaid unfair labor practices affect
commerce within the meaning of Section 2(6) and (7)
of the Act.
I Although Respondent refused to admit to the appropriateness of this
unit as alleged in the complaint and the Administrative Law Judge made no
finding as to the appropriate unit, we find the above unit appropriate as the
unit described in the 1976 collective-bargaining agreement between the
parties.
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FAIRLAWN CARE CENTER
APPENDIX
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor
Relations Board hereby orders that the Respondent,
Lutheran Homes and Hospitals, Inc. d/b/a Fairlawn
Care Center, Gresham, Oregon, its officers, agents,
successors, and assigns, shall:
1. Cease and desist from:
(a) Refusing to bargain with Service Employees
International Union, Local No. 49, AFL-CIO, as the
exclusive bargaining representative of employees at
Respondent's Gresham facility in the unit hereina-
bove found appropriate.
(b) In any like or related manner interfering with,
restraining, or coercing employees in the exercise of
their rights under the Act.
2. Take the following affirmative action designed
to effectuate the policies of the Act:
(a) Upon request, bargain collectively with the
above-named Union as the exclusive representative
of the employees in the appropriate unit at the
Gresham facility and embody in a signed agreement
any understanding reached.
(b) Make whole the employees in the appropriate
unit for any losses in wages or other benefits, with
interest computed in the manner described in the
"Remedy," which may have been occasioned by the
refusal to apply the 1976 collective-bargaining
agreement to the employees at the Gresham facility.
(c) Preserve and, upon request, make available to
the Board or its agents, for examination or 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.
(d) Post at its Gresham, Oregon, facility copies of
the attached notice marked "Appendix."8 Copies of
said notice, on forms provided by the Regional
Director for Region 19, after being duly signed by
Respondent's representative, shall be posted by it
immediately upon receipt thereof, and be maintained
by it for 60 consecutive days thereafter, in conspicu-
ous places, including all places where notices to
employees are customarily posted. Reasonable steps
shall be taken by Respondent to insure that said
notices are not altered, defaced, or covered by any
other material.
(e) Notify the Regional Director for Region 19, in
writing, within 20 days from the date of this Order,
what steps Respondent has taken to comply here-
with.
a In the event that 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."
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
After a hearing at which all parties had an opportuni-
ty to present evidence and cross-examine witnesses,
the National Labor Relations Board has found that
we have violated the National Labor Relations Act
and has ordered us to post this notice.
WE WILL recognize and, upon request, bargain
with Service Employees International Union,
Local No. 49, AFL-CIO, as the exclusive collec-
tive-bargaining representative of employees in the
appropriate bargaining unit described below and,
if an understanding is reached, embody it in a
signed written agreement. The bargaining unit is:
All nonprofessional employees, including
janitors, ward maids, practical nurses, nurs-
ing attendants (male and female), window
washers, seamstresses, laundry workers, culi-
nary workers, and gardeners; excluding
office clerical employees, licensed practical
nurses, guards, professional employees, and
supervisors as defined in the Act.
WE WILL make whole our employees for any
losses in wages or other benefits which they may
have suffered because of our refusal to apply the
terms of the 1976 collective-bargaining agreement
with the Union, with interest.
WE WILL NOT by a refusal to bargain or in any
like or related manner interfere with, restrain, or
coerce our employees in the exercise of their
rights under the National Labor Relations Act, as
amended.
LUTHERAN HOMES AND
HOSPITALS, INC. D/B/A
FAIRLAWN CARE CENTER
DECISION
STATEMENT OF THE CASE
EARLDEAN V. S. ROBBINS, Administrative Law Judge:
This matter was heard before me in Portland, Oregon, on
January II through 14, 1977. The original charge was filed
by Service Employees International Union, Local No. 49,
AFL-CIO, herein called the Union, on June 18, 1976, and
served on Respondent on June 22, 1976; and an amended
charge was filed by the Union and served on Respondent
on September 8, 1976. The complaint, which issued on
September 8, 1976, alleges that Respondent violated
ORDER
1027
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Section 8(a)(1) and (5) of the National Labor Relations
Act, as amended.
The basic issue herein is whether Respondent is obligat-
ed to recognize and bargain with the Union and to honor
the contract between the Union and Fairlawn Nursing
Home.
Upon the entire record, including my observation of the
demeanor of the witnesses, and after due consideration of
the posttrial brief filed by Respondent,' and the oral
arguments made by counsel, I make the following:
FINDINGS OF FACT
I. JURISDICTION
Fairlawn Hospital, Inc., is an Oregon nonprofit corpora-
tion wholly owned by Lutheran Homes and Hospitals, Inc.,
an Oregon nonprofit corporation. At all times material
herein, until June 21, 1976, Fairlawn Hospitals, Inc.,
maintained its place of business at 10404 S.E. Foster Road,
Portland, Oregon, where it was engaged in the operation of
a nursing home, herein referred to as the Foster Road
facility.
At all times material herein, since June 21, 1976,
Lutheran Homes and Hospitals, Inc., has maintained a
place of business under the assumed name of Fairlawn
Care Center in Gresham, Oregon, where it is engaged in
the operation of a nursing home, herein referred to as the
Gresham facility.
During the year preceding the issuance of the complaint
herein, Fairlawn Hospital, Inc., and Lutheran Homes and
Hospitals, Inc., d/b/a Fairlawn Care Center, have received
gross revenues in excess of $100,000, a substantial portion
of which was received through federally supported health
care programs. During the same period of time they
received goods valued in excess of $10,000 directly from
points outside the State of Oregon, or from suppliers who
had obtained them directly from points outside the State of
Oregon. It is anticipated that Lutheran Homes and
Hospitals, Inc., d/b/a Fairlawn Care Center, alone over a
1-year period will receive gross revenues in excess of
$100,000, a substantial portion of which will be derived
from federally supported health care programs and during
the same period will receive goods valued in excess of
$10,000 directly from points outside the State of Oregon, or
from suppliers who had obtained them directly from points
outside the State of Oregon.
The complaint alleges, Respondent admits, and I find
that Respondent and Fairlawn Hospital, Inc., has been,
and Respondent is now, at all times material herein, each
an employer within the meaning of Section 2(2) of the Act,
a health care institution within the meaning of Section
2(14) of the Act, and is engaged in commerce within the
meaning of Section 2(6) and (7) of the Act.
t The General Counsel did not file a brief.
2 Lutheran Homes and Hospitals, Inc., has sponsored such projects as
summer camps, workshops, and various senior citizen programs. Its articles
of incorporation state its purpose as being to acquire, own, establish, and
II1. LABOR ORGANIZATION
The complaint alleges, Respondent admits, and I find
that the Union is a labor organization within the meaning
of Section 2(5) of the Act.
111. BACKGROUND
Lutheran Homes and Hospitals, Inc., acquired Fairlawn
Hospital, Inc., in 1955. Both before and after the acquisi-
tion, Fairlawn Hospital, Inc., owned and operated the
medical care facility which is herein referred to as the
Foster Road facility. At the time of acquisition, the facility
was involved in psychiatric care and known as Fairlawn
Hospital. Shortly thereafter, the operation was changed to
that of a convalescent care center and later to a nursing
home. On or about October 1973, pursuant to instructions
from the Health Division of the Oregon State Department
of Human Resources, the name of the Foster Road facility
was changed to Fairlawn Nursing Home so as to reflect the
nature of the operation.
The Foster Road facility was the sole asset of Fairlawn
Hospital, Inc., and prior to 1976 Fairlawn Hospital, Inc.,
was the only operation owned by Lutheran Homes and
Hospitals, Inc.2 On paper, Lutheran Homes and Hospitals,
Inc., and Fairlawn Hospital, Inc., had separate boards of
directors. However, the directors were the same, the board
meetings were held jointly without any attempt to separate
the discussions as pertaining to either of the organizations.
In fact, the testimony reveals that some of the directors
were unaware that they were members of a separate board
for Fairlawn Hospital, Inc. Accountants' reports of
Lutheran Homes and Hospitals, Inc., and Fairlawn
Hospital, Inc., prepared by a firm of certified public
accountants, dated September 30, 1975, describe the two
corporations thusly:
Fairlawn Hospital, Inc. is a not-for-profit long-term
care facility owned by Lutheran Homes and Hospitals,
Inc. The two organizations are governed by the same
board of directors. Lutheran Homes and Hospitals is
organized to deal with the long-range planning for and
utilization of facilities whereas Fairlawn Hospital, Inc.
functions as the operating entity maintaining a leased
facility with 78 intermediate care beds and 25 room and
board beds. The lease terminates June 30, 1976, and
can be extended.
At the time of its acquisition by Lutheran Homes and
Hospitals, Inc., the employees at the Foster Road facility
were represented by the Union and thereafter the Union
and Lutheran Homes and Hospitals, Inc., entered into
successive bargaining agreements, the last of which was
negotiated in December 1975 to be effective from January
I to December 31, 1976. At the time of the 1975
negotiations, Lutheran Homes and Hospitals, Inc., was in
the process of constructing the Gresham facility. It is
undisputed that Lutheran Homes and Hospitals, Inc.,
operate hospitals in the State of Oregon and acquire, own, establish, and
operate Christian institutions and homes in the State of Oregon for the aid.
care, and nurture of the mentally and physically ill or disabled and the aged.
1028
FAIRLAWN CARE CENTER
embarked upon the construction of the Gresham facility as
a result of its determination that it would be economically
unfeasible to bring the physical facilities at Foster Road
into conformance with state requirements for nursing
homes. Thus, the Foster Road facility had been sold and
the proceeds 3 from that sale had been commingled with
funds raised from other sources 4 and used to purchase the
land for the Gresham facility.
IV. THE ALLEGED UNFAIR LABOR PRACTICES
A. Facts
The Gresham facility began operations on June 21,
1976, 5 and the Foster Road facility ceased operations on
that same date. It is undisputed that the Union sought to
apply to the Gresham facility the collective-bargaining
agreement which covered the Foster Road facility. It is also
undisputed that Respondent refused to honor this collec-
tive-bargaining agreement at the Gresham facility and that
it refused to recognize the Union as the collective-bargain-
ing representative of the employees at the Gresham facility
in the unit alleged as appropriate. By letter dated June 10,
Respondent informed the Union:
Due to problems beyond our control we have been
forced to close Fairlawn Nursing Home, 10404 S. E.
Foster Road, Portland, Oregon. The nursing Home is
scheduled to cease operations and go out of business on
or about June 15, 1976. The nursing home license is
being allowed to lapse and the property has been sold.
Upon the termination of the operation of this establish-
ment, we will also be terminating our relationship with
your Union as set forth under the terms and conditions
of the current Labor Agreement between Local No. 49
and Fairlawn Nursing Home.
However, we are prepared to meet and negotiate the
effects the closure may have on bargaining unit
employees you represent, if you should wish to do so.
We will assume no liability under the aforesaid Labor
Agreement after June 15, 1976.
If you have any questions please contact me.
Later Respondent notified the Union that the closing date
would be June 21. The Union protested, to no avail.
During the first week of July, Union Representative Edna
Peterson attempted to visit the Gresham facility under the
contract clause granting union representatives access to the
premises. Admittance was denied.
3 The facility was sold in 1974 for $210,000 and was leased back. The
lease expired June 30, 1976.
4 The September 30 accountants' report shows that $83,551 was
transferred to the general fund of Lutheran Homes and Hospitals, Inc., from
the relocation fund (the assumed name for the fund-raising activity for the
Gresham facility) and $149.178 was transferred from Fairlawn Hospital,
Inc. This constituted the major portion of Respondent's financial resources
of $305,256, of which $228,745 had been used for the land and building
construction for the Gresham facility. The remainder of the S 1-1/2 million
cost of the facility was financed through loans of $1,383,000.
The General Counsel contends that the Gresham facility
is merely a relocation of the Foster Road facility or that
Respondent is an alter ego of or successor to Fairlawn
Hospitals, Inc. Thus, argues the General Counsel, Respon-
dent at the very least is obligated to recognize and bargain
with the Union. Respondent contends that it has no
obligation to recognize and bargain with the Union nor to
honor the collective-bargaining agreement in effect at the
Foster Road facility. It contends that the Gresham facility
has no relationship to the Foster Road facility. The record
indicates otherwise.
The Gresham facility opened on June 21 with 65
patients, 63 of whom transferred from the Foster Road
facility. The Foster Road facility was licensed as a 78-bed
intermediate care center. The Gresham facility was
licensed for 46 skilled-care beds and 56 intermediate-care
beds.6 However, when it first opened, it had no skilled-care
patients and only two patients other than those transferred
from the Foster Road facility.7 The Gresham facility
admitted its first skilled-care patients in July. Initially,
there were only two or three skilled-care patients. In
August probably two or three others were admitted. At the
time of the hearing there were 18 to 20 skilled-care patients
and an additional 21 intermediate-care beds had been
licensed.
The financing of the Gresham facility required approval
by a Federal agency. This was secured with the assistance
of A.E. Brim & Associates, herein called Brim. Brim's
assistance was sought after the unsuccessful fund-raising
drive. Also Oregon State law prohibits the construction and
operation of new nursing home facilities unless a certificate
of need is granted by the State, so Brim assisted in
preparing the application for a certificate of need for the
proposed Gresham facility. The certificate of need which
was granted, as requested in August 1974, recites that the
application requests a certificate of need to relocate and
replace a 120-bed nursing home, known as Fairlawn
Nursing Home. 8
The 1975 annual report of the Foster Road facility filed
with the State as required by law gives the name of the
institution as Fairlawn Nursing Home and Lutheran
Homes and Hospitals, Inc., as the organization conducting
the institution. There is no reference to Fairlawn Hospitals,
Inc. Bed capacity is listed as 78 and percentage of
occupancy as 76.5. The report further notes a planned
expansion to be completed in July and describes the
expansion as a 123-bed facility in Gresham.
In June, by memo from John Loftus, administrator of the
Gresham facility, the employees of Fairlawn Nursing
Home were notified that all employees of Fairlawn
Nursing Home will be accepted for employment at
Fairlawn Care Center and that vacations, tenure, wages,
and sick leave will carry forward for all personnel. All
5 Unless otherwise stated, all dates hereinafter in December will be in
1975 and all other dates will be in 1976.
6 A skilled-care center requires more hours of nursing care per patient
than does an intermediate-care center.
7 There had been about 77 patients at the Foster Road facility also. Some
"patients" who actually required no medical care were not transferred to the
Gresham facility. Instead, room and board accommodations were secured
for them elsewhere.
s Skans testified that the number 120 was a mistake, that the request was
to replace a 78-bed facility and add an additional 46 beds.
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DECISIONS OF NATIONAL LABOR RELATIONS BOARD
employees are to receive termination checks (vacations will
not be paid off but will carry forward and continue as
scheduled) and employees who wish employment at the
Gresham facility must fill out new application forms listing
the original hire date at the Foster Road facility.
Other indicia that Respondent considered the Gresham
facility as a replacement for the Foster Road facility is a
letter dated May 10, 1976, from Skans to the State of
Oregon Department of Human Resources. This letter
states that the Gresham facility which will replace the
Foster Road facility is nearing completion and recites his
understanding that the agreement between the Fairlawn
Nursing Home and the welfare division will be assumed by
the Fairlawn Care Center 9 and that the Fairlawn Care
Center license will take the place of the Fairlawn Nursing
Home license.
The administrator's report to the board for June 21
through July 26, 1976, states that Fairlawn Nursing
Home's general bank account was to be closed out and
transferred to the Fairlawn Care Center's general bank
account. The minutes of Respondent's executive board
meeting on June 15 states that Loftus is to secure bids for
the inventory of the Foster Road facility and further states
that 21 employees held a meeting and voted to keep the
Union and that recommendations should be obtained from
Norman Burr, labor consultant. The minutes of Respon-
dent's board of directors meeting of June 8 states that Paul
Dailey, Respondent's attorney and board member, in-
formed the board that Fairlawn Hospital, Inc.'s, IRS
number will/can be used by Lutheran Homes and
Hospitals, Inc.
The management of the Gresham facility was contracted
to Brim, who hired John Loftus as the administrator. Prior
to June 21, Loftus met with the employees at the Foster
Road facility in implementation of that portion of the
collective-bargaining agreement permitting employees to
transfer to the Gresham facility. All personnel and labor
relations policies at the Gresham facility were established
by Brim and approved by Lutheran Homes and Hospitals,
Inc. Lawrence Gregersen, president of the board of
directors of Lutheran Homes and Hospitals, Inc., testified
that the wage rate was established by Brim but was not
specifically approved by the board.
As of June 21, 22 of the approximately 50 employees in
the bargaining unit at the Foster Road facility transferred
to the Gresham facility. They retained their seniority for
such purposes as vacation. On or before June 21, 26
additional persons were given employment commitments, 1
of whom began work in the bargaining unit on June 3, 1 on
June 16, 1 on June 20, 13 on June 21, 3 on June 23, 1 on
June 25, 1 on June 27, 1 on June 28, 1 on July 3, 2 on July
5, and I on July 6.
A limited amount of equipment and supplies was
transferred from the Foster Road facility to the Gresham
facility. Loftus was given authority to take anything from
Foster Road that he desired. I find that the equipment and
supplies transferred were insignificant. The Gresham
facility was completely equipped under the terms of the
financing.
9 As of July 26, 53 of the 80 patients were welfare patients.
10 There appears to be nothing in the management contract which would
preclude approval of such a provision.
Supervisory personnel were hired by Brim. None of the
supervisory personnel at Foster Road were retained at
Gresham in the positions they held at the Foster Road
facility. Prior to June 21, employees at the Foster Road
facility were utilized in preparing the Gresham facility for
opening to perform such services as making beds. They
were paid by the Foster Road facility. Also Loftus handled
all the unemployment claims of those employees who did
not transfer to the Gresham facility.
The Union did not respond to Respondent's June 10
letter offering to bargain regarding the effect of the closing
of the Foster Road facility. However, some bargaining in
this regard had occurred during the December negotiation
of the 1976 collective-bargaining agreement. Eugene Kelly,
assistant business representative for the Union, and
Williams Skans, administrator of the Foster Road facility,
were the negotiators of this and many previous agreements.
During the 1975 negotiation sessions, they discussed what
they termed the relocation of the Foster Road facility to
Gresham, a distance of about 19 miles.
According to Kelly, on December 2, he asked Skans
when the move would take place. Skans replied that the
target date was around the first of June 1976. Kelly said the
Union wanted a contract that would cover the operation
on Foster Road until it was discontinued and would permit
the employees at the Foster Road facility to transfer to the
Gresham facility when it opened. Skans agreed. Kelly
suggested that, with new facilities, better wages could be
afforded. Skans said he did not know but they would
consider it.
At a negotiation session the following week, according to
Kelly, Skans proposed that they enter into an agreement
for a term of 6 months and then negotiate a new contract
for the new facility. Kelly said that would not be feasible,
particularly with the 90-day notice required under the law
and said that I year would be the shortest contract term the
Union would consider. They finalized a contract which
Skans took back to Board President Gregersen.
According to Skans, he discussed with Gregersen the
wage schedule and the transfer of persons employed at the
Foster Road facility to the Gresham facility. Skans testified
that he and Gregersen discussed the term of the contract
being for I year, but he does not recall exactly what was
said. Skans asked if he should sign the contract. Gregersen
replied, "Yes, you'd better sign the contract because we
don't want a strike out at the new facility." Gregersen
denies giving his approval to the transfer of employees to
Gresham. He states that he told Skans that he had no
authority to approve such a provision because manage-
ment of the Gresham facility had been given to Brim and
that Skans should discuss the matter with Jim Williams of
Brim.1o Skans denies that Gregersen instructed him to seek
approval from Williams. According to him, Gregersen told
him to sign the contract and mail a copy to Williams. I
credit Skans. He impressed me as an honest, forthright
witness. On the other hand, I found Gregersen to be an
evasive witness whose testimony was contradictory.
On December 19, according to Kelly, Skans again
assured Kelly that the nursing home would move to
1030
FAIRLAWN CARE CENTER
Gresham in June. Kelly asked, "The contract will cover
both places?" Skans replied that that was his understand-
ing, that it had been approved.
Kelly prepared the contract and around Christmas took
it to Skans to be signed. According to Kelly, Skans said his
board was considering employing a management company
to administer the new facilities. They again discussed
whether the contract would cover the new facility and
agreed that it would. A signed contract was returned to
Kelly around January 8. The only reference therein to the
new facility was in article IV which reads, inter alia:
All employees who wish to go out to the new Nursing
Home shall be assured of employment at the new
Nursing Home.
The contract names the employer as Fairlawn Nursing
Home. According to Kelly, he asked Skans what the name
of the new facility would be. Skans did not know but
suggested that they would be covered if the name Fairlawn
Nursing Home was used in the contract. Kelly also testified
that he specifically asked Skans if he had authority to
negotiate a collective-bargaining agreement covering the
new facility. Skans said he did.
Skans testified that the board had given him specific
authority to negotiate with the Union, that he is sure that
Kelly asked whether the contract would cover the new
location, and that he agreed that it would. However, he
gives no specifics of this discussion. Rather, he testified:
A. It certainly came up in our discussion that we
were relocating, and that the contract, like I said
before, went to December 31, 1976, so we both felt that
the new place would be under the existing contract.
My reason for expressing this to Mr. Kelly, too, was
conversation with Mr. Gregersen that we were entering
into a negotiation that would extend [to that time.
When asked about the reference to Gregersen, Skans
testified:
A. Well, again, I can't pick words, but I discussed
with Mr. Gregersen the wage schedule that was
proposed, and told him I felt it was acceptable to us
where we were, and we mutually agreed, by this phone
conversation, that it certainly would be a minimum of
what would be expected in the new [location] as far as
arriving at any kind of rates.
I told Mr. Gregersen that I was going to sign the
contract with those terms, and he said, "Go ahead," so
my discussion with Mr. Kelly was with the understand-
ing that the contract was signed for a year, period.
Q. (By Mr. Cubbison) Do you recall whether or not
Mr. Kelly specifically asked you whether or not the
new agreement would extend and cover the new facility
in Gresham? Do you recall him asking you that during
the negotiations?
A. Oh, I'm sure he did.
1I Skans was not questioned in any detail regarding the conversation
with Kelly.
* t
Q. All right, do you recall what, if any, your
response was to Mr. Kelly when he asked you that
question?
A. My response was that it would apply, yes.
On cross-examination, when pressed for specifics of the
conversation, he admitted he had no specific recollection of
such a discussion, that perhaps he was making an
assumption, that he really did not recall other than that he
felt Gregersen understood and knew the contract was going
to be for a year. Later he testified that all he recalled was
"that Gregersen understood the contract was to be for a
year and that it would relate to the new facilities because of
that agreement." 11
Upon a consideration of the totality of Skans' testimony
in this regard and his demeanor on the witness stand
during this portion of his testimony, I am convinced that he
has no actual recollection of any specific agreement that
the collective-bargaining agreement would cover the
Gresham facility. Rather, he assumed that it would,
because the contract term extended through December 31,
1976, and further assumed that this was understood by
everyone concerned. I do not credit Kelly's testimony of a
specific agreement in this regard. If he had been as specific
as he claims in seeking such agreement, and if Skans had in
fact specifically agreed that the contract would cover the
Gresham facility, then it would seem that Kelly would have
included this in his draft of the contract just as he included
the agreement that all employees who so desired could
transfer to Gresham. In all the circumstances, I find that
no specific agreement was reached that the collective-
bargaining agreement would be extended to the Gresham
facility.
B. Conclusions
In the circumstances set forth above, I find that the
opening of the Gresham facility was a mere relocation of
the Foster Road facility, a continuation of that facility in a
new location under a new name.
Section 8(a)(5) of the Act requires that in the case of a
relocation of a facility, the employer is required to bargain
with the representative of its employees at the old facility
as to the effect of the relocation. It is undisputed that
Respondent did so bargain during the 1975 contract
negotiations and in June offered to bargain further. The
Union never responded to this offer. Thus the only issue
herein is whether Respondent was obliged to recognize and
bargain with the Union at the Gresham location and, if so,
whether it was obligated to honor the Foster Road facility
contract. The Board has held that an employer is obligated
to bargain at a new location only in two circumstances: if
the union represents a majority of the employees at the new
plant or, in the absence of majority representation, if the
lack of majority has been caused by the employer's unfair
labor practices. American Can Company, 218 NLRB 102
(1975); Fraser & Johnston Company, 189 NLRB 142 (1971),
1031
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
enfd. in part 469 F.2d 1259 (C.A. 9, 1972); Pierce Governor
Company, Inc., 164 NLRB 97 (1967), enfd. 394 F.2d 757
(C.A.D.C., 1968); Cooper Thermometer Company, 160
NLRB 1902 (1966), enfd. in part 376 F.2d 684 (C.A. 2,
1967).
Here there is no allegation or evidence of any unfair
labor practices affecting majority, so the crucial question is,
did the Union represent a majority of the employees at the
Gresham location. I find that it did not. As of the opening
12 The collective-bargaining agreement covering the Foster Road facility
contains a maintenance-of-membership clause plus a provision that
employees who choose not to join the Union will be required to donate to
United Way, through the Union, a monthly amount equal to union dues.
There is no evidence in the record as to how many of the transferred
employees were union members.
date, June 21, 22 unit employees' 2 had transferred from
the Foster Road facility and 26 new employees had been
hired in the appropriate unit.13 I therefore find that
Respondent was not obligated to recognize and bargain
with the Union at the Gresham facility, and by refusing to
do so did not violate Section 8(aX)(1) and (5) of the Act.
[Recommended Order for dismissal omitted from publi-
cation.]
13 I do not consider it significant, in the circumstances, that some of the
48 unit employees did not actually begin work at the Gresham facility on
June 21.
1032