Garden Fashions, Inc.

National Labor Relations Board - Board Decisions

Aug 2, 1977

231 N.L.R.B. 72 (N.L.R.B. 1977)

DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Garden Fashions, Inc., and Timely Sportswear, Inc.;
Kingston Sportswear, Inc; Crystal Sportswear,
Inc.; Bing Fin Chang a/k/a Barry Chang and Ollie
Brabham. Case 2-CA-13104
August 2, 1977
SUPPLEMENTAL DECISION AND
ORDER'
BY MEMBERS JENKINS, MURPHY, AND
WALTHER
On March 17, 1977, Administrative Law Judge
Sidney J. Barban issued the attached Supplemental
Decision in this proceeding. Thereafter, General
Counsel filed exceptions and a supporting brief.
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 brief
and has decided to affirm the rulings, findings, and
conclusions of the Administrative Law Judge and to
adopt his recommended Order, as modified herein.
The Administrative Law Judge failed to grant
General Counsel's Motion for Summary Judgment
against Respondent Crystal Sportswear, Inc., on the
ground that General Counsel conceded on the record
that Crystal Sportswear went out of business before
the backpay specification in this case issued. After
careful consideration of the record, we find merit in
General Counsel's exception to this determination.
The record shows that early in the proceeding
General Counsel stated that Crystal Sportswear, Inc.,
was no longer in existence. It is not clear what
General Counsel intended by this statement. How-
ever, at a subsequent point in the hearing and in his
brief he renewed his Motion for Summary Judgment
against Respondent Crystal. In any event, General
Counsel's factual assertion (not entered into as a
matter of stipulation) was devoid of evidentiary value
and did not prejudice Respondent Crystal (which
made no appearance at the proceeding). According-
ly, since we are in agreement with the Administrative
Law Judge that Crystal Sportswear, Inc., was
properly served by service upon its incorporator and
designated agent, and since Respondent Crystal has
failed to file an answer to the backpay specification,
we shall grant General Counsel's summary judgment
motion.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor
231 NLRB No. 9
Relations Board adopts as its Order the recommend-
ed Order of the Administrative Law Judge, as
modified below, and hereby orders that the Respon-
dents, Garden Fashions, Inc. and Timely Sportswear,
Inc.; Kingston Sportswear, Inc.; Crystal Sportswear,
Inc.; and Bing Fin Chang a/k/a Barry Chang, New
York, New York, their officers, agents, successors,
and assigns, shall take the action set forth in the said
recommended Order, as so modified:
Insert "Crystal Sportswear, Inc." after "Kingston
Sportswear, Inc." and before "Bing Fin Chang a/k/a
Barry Chang" in the Administrative Law Judge's
Supplemental Order.
1 The Board's original Decision and Order is reported at 214 NLRB 766
(1974).
SUPPLEMENTAL DECISION
STATEMENT OF THE CASE
SIDNEY J. BARBAN, Administrative Law Judge: This
matter was heard at New York, New York, on September
20 and October 13, 1976, upon a backpay specification
dated August 18, 1976, as amended at the hearing, issued
pursuant to an Order of the National Labor Relations
Board against Garden Fashions, Inc. and Timely Sports-
wear, Inc., and their officers, agents, successors, and
assigns. (214 NLRB 766)1
In the backpay specification (par. VII), it is alleged that
on or about May 10, 1974, Garden and Timely ceased to
operate their plant at 307 Canal Street, New York City,
and that since that time Crystal Sportswear, Inc., Kingston
Sportswear, Inc., Barry Chang,2 and Morris Youshah at
various times have operated said plant and engaged in
substantially the same business operations, with substan-
tially the same employees and supervisors, as Garden and
Timely had been engaged in.
Answers to the backpay specification were filed by
Chang and Youshah only. During the hearing, General
Counsel made Motions for Summary Judgment (a) as to
Garden, Timely, Kingston, and Crystal on the ground that
these parties did not file answers to the specification and
did not make an appearance at the hearing, and (b) as to
Chang and Youshah on the ground that their answers were
insufficient under the Board's Rules and Regulations. For
reasons discussed hereinafter, General Counsel's motions
were granted as to all parties except Crystal and Youshah.
As has been noted, General Counsel has since withdrawn
his contention that Youshah is subject to the backpay
specification.
I The Board's Order was enforced by the Court of Appeals for the
Second Circuit, which granted the Board's motion for summary entry of
judgment which was filed on July 22, 1976, in Docket 76-4161.
2 The spelling of Chang's name has been corrected in accordance with
his signature on documents in the record. The backpay specification also
named Morris Youshah (name also corrected), but by motion dated
November 11, 1976 (included in the record as ALJ Exh. I), General Counsel
requested that the specification and notice of hearing in this matter as to
Youshah be withdrawn. That motion is hereby granted.
72
GARDEN FASHIONS, INC.
By motion received on January 10, 1977, General
Counsel seeks to amend the backpay specification. This
will be dealt with hereinafter.
Upon the entire record in this case, and after due
consideration of the briefs filed by General Counsel and by
Phillip G. Klein, Esq., who, though he stated an appear-
ance at the hearing only for Youshah and Chang, filed a
brief on behalf of all the above-named Respondents and
Youshah, I make the following:
FINDINGS AND CONCLUSIONS
A. The Problem of Service of Process
From the outset of this case before the Board there has
been a problem with service of process upon the Respon-
dents involved. These Respondents are employers, or
alleged employers, who operate in the Chinatown area of
New York City as contractors in the garment industry,
sewing articles of clothing for manufacturers who cut the
garments and presumably thereafter finish them. The
above-named Charging Party, Brabham, was employed as
a sewing machine operator by Garden and Timely, which
were found by the Board in the prior proceeding in this
matter to "constitute a single integrated business enter-
prise."
1. The prior proceeding
As set forth in the Board's Decision in the prior
proceeding in this matter, the original charge was served on
Respondent Garden by registered mail at the address listed
in its certificate of incorporation, but was returned marked
"moved, left no address." A Board agent thereafter
effected service by delivering a copy of the charge
personally to Chang, apparently at the same address.
Chang advised the agent of the name of the attorney for
Garden and Timely (Phillip G. Klein). On the basis of the
record before it, the Board found that Chang was "a
responsible party in charge of a substantial phase of
Respondents' operations sufficient to be a managing or
general agent for service of process under sec. 4(dX3) of the
Federal Rules of Civil Procedure [citations omitted ]."
A copy of the original complaint was sent by registered
mail to Garden and to the attorney. Neither the complaint
nor the return receipt addressed to Garden was returned.
The Board describes subsequent problems with service as
follows (214 NLRB at 766):
The first amended charge was filed January 4, 1974,
naming Respondent Timely, in addition to Respondent
Garden, as committing the unfair labor practices
alleged above. The scenario set forth above was
reenacted to effect service of this charge, including the
marking of the return envelope "moved, left no
address" and the eventual personal service on Respon-
dents by the Board agent. With minor variations, it was
repeated with each additional document, including the
:I The articles of incorporation of both Garden and Kingston provide
that "The Secretary of State is designated as agent of the corporation upon
whom process against it may be served. The post office address to which the
second amended charge, the amended complaint, and
the instant Motion for Summary Judgment.
Respondents' attorney thereafter had several contacts
and communications with the Board in some of which he
purportedly represented the Respondents and in some of
which he stated that he had not yet been retained. No
answer was filed by Respondents to the complaint. The
Board, inter alia, ordered the Respondents Garden and
Timely and their officers, agents, successors, and assigns,
to reinstate the Charging Party, Brabham, to her former or
substantially equivalent position, and to make her whole
for losses suffered by reason of the discrimination against
her. As noted above, the Board's Order has been enforced
by a judgment of the Court of Appeals for the Second
Circuit.
2. The present proceeding
According to General Counsel's Exhibit 2A, which is
entitled "Affidavit of Service of Backpay Specification and
Notice of Hearing," those documents were served by
postpaid registered mail on August 18, 1976, on Garden,
Kingston, and Chang at 307-309 Canal Street, New York
City,3 and on Phillip G. Klein, Esq., at his office in New
York City. Klein is shown to have been the incorporator of
both Garden and Kingston. Although this "affidavit of
service" was duly signed by "Alfred Sussman," an
apparent agent of the Regional Director of the Board, it is
noted that the document is not verified, as required by the
Board's Rules and Regulations. It also does not have
attached the customary registered return receipts.
General Counsel's Exhibit 2B is a second copy of the
document received as General Counsel's Exhibit 2A, upon
which is written that Gerald H. Moscola, secretary to the
Regional Director, on September 1, 1976, mailed the
backpay specification and notice of hearing by regular mail
to Kingston, Garden, and Chang, "after they came back
from being registered." This again is not verified, but was
confirmed by an oral statement of General Counsel at the
hearing. It is well established that "[o]fficial action by
public officers, including judicial proceedings, are pre-
sumed to have been regularly and legally performed."
McCormick, Handbook of the Law of Evidence, p. 807 (2d
ed., 1972). I therefore find that the Board agents performed
their duties as stated.
However, there is no dispute that Chang and attorney
Klein received service of the Board's process, for Chang
filed an answer to the specification (discussed hereinafter),
which was prepared by Klein, who also appeared at the
hearing on the specification on behalf of Chang. Further,
the record shows and I find that Chang has been regularly
engaged at the 307-309 Canal Street address, up until at
least a week before October 13, 1976, in the same
operations as has been described above, and that these
operations have been continuously carried on at those
Secretary of State shall mail a copy of any process against the corporation
served upon him is 307 Canal Street . .. City and State of New York
10013."
73
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
premises, with substantially the same work force and with
the same people in charge. 4
Attorney Klein confirmed that, at the time of their
incorporation, both Garden and Kingston were located at
307-309 Canal Street in New York City. He first declined
on the basis of attorney-client relationship to state whether
Garden had moved from that location, and then stated that
he knew that both Garden and Kingston had moved, but
declined to adduce evidence in support of that assertion.
With respect to Crystal, its articles of incorporation
provide that service may be made on the secretary of state
of New York who shall serve Phillip G. Klein at his New
York office, Klein being designated to accept such service
for the corporation. However, General Counsel conceded
on the record that Crystal went out of existence before the
specification in this case was issued.
3. Conclusions
From the above, and upon the record as a whole, I find
that the proper place for service upon Garden, Timely, and
Kingston during the times material here was 307-309
Canal Street, New York City, and that proper service on
Crystal, if it had continued in existence, would have been
made upon Klein. I reject Klein's argument that proper
service could have been made only on the secretary of state
who would then mail process to the persons and places to
which the Board mailed process in the first place.
Both Section 11(4) of the Act and Section 102.112 of the
Board's Rules and Regulations provide, inter alia, for
service by registered mail. It is also clear that service of
process may not be avoided by willful refusal to accept
registered mail. The Board, in Pasco Packing Company, 115
NLRB 437, 438 (1956) held that in authorizing service by
registered mail what Congress intended was "that the Post
Office Department tender the registered process to the
addressee," stating further:
Manifestly if Respondent, by its wilful refusal to accept
registered mail, clearly labeled as originating in the
Board's Regional Office, can thwart service of process,
and require the Regional Director to effectuate service
of process by one of the more cumbersome alternative
methods listed in Section 11(4) of the Act, then the
provision authorizing service by registered mail, be-
comes a dead letter with respect to this Respondent and
all other parties who may act accordingly.
To the same effect, see Local Union 49, Sheet Metal
Workers International Association, AFL-CIO, and its Agent,
E.D. Brooks (Driver-Miller Plumbing and Heating Corp.),
124 NLRB 888, 890 (1959). There being no probative
evidence that Garden or Kingston has changed its address
for effectuation of service, I find that service upon Garden
and Kingston was effectuated by mailing process to them
by registered mail at the address designated by them for
service of process. Inasmuch as it has been found that
Garden and Timely constitute a single integrated business
enterprise, service on Garden constitutes service on
Timely. In any event, in view of the Board's finding that
4 The record shows that Chang has leased the premises at 307-311 Canal
St., New York City, in his own name, until December 31, 1977.
Chang constitutes a proper agent for service on Garden
and Timely, service on Chang was sufficient service upon
Garden and Timely in this instance.
I find no service on Crystal because General Counsel
concedes that it went out of existence before the backpay
specification issued.
B. The Motions for Summary Judgment
General Counsel has moved for summary judgment
against Garden, Timely, Kingston, and Crystal on the basis
that they filed no answers to the specification, thus
admitting the allegations, and against Chang on the basis
that his answer does not meet the requirements of the
Board's Rules and Regulations and thus should be
stricken. The Board's Rules and Regulations, Section
102.54 (b) and (c), provide:
(b) Contents of the answer to specification.-The
answer to the specification shall be in writing, the
original being signed and sworn to by the respondent or
by a duly authorized agent with appropriate power of
attorney affixed, and shall contain the post office
address of the respondent. The respondent shall
specifically admit, deny, or explain each and every
allegation of the specification, unless the respondent is
without knowledge, in which case the respondent shall
so state, such statement operating as a denial. Denials
shall fairly meet the substance of the allegations of the
specification denied. When a respondent intends to
deny only a part of an allegation, the respondent shall
specify so much of it as is true and shall deny only the
remainder. As to all matters within the knowledge of
the respondent, including but not limited to the various
factors entering into the computation of gross backpay,
a general denial shall not suffice. As to such matters, if
the respondent disputes either the accuracy of the
figures in the specification or the premises on which
they are based, he shall specifically state the basis for
his disagreement, setting forth in detail his position as
to the applicable premises and furnishing the appropri-
ate supporting figures.
(c) Effect of failure to answer or to plead specifically
and in detail to the specification.-If the respondent fails
to file any answer to the specification within the time
prescribed by this section [15 days from service of
specification] the Board may, either with or without
taking evidence in support of the allegations of the
specification and without notice to the respondent, find
the specification to be true and enter such order as may
be appropriate. If the respondent files an answer to the
specification but fails to deny any allegation of the
specification in the manner required by subsection (b)
of this section, and the failure so to deny is not
adequately explained, such allegation shall be deemed
to be admitted to be true, and may be so found by the
Board without the taking of evidence supporting such
allegation, and the respondent shall be precluded from
introducing any evidence controverting said allegation.
74
GARDEN FASHIONS, INC.
I. Garden, Timely, Kingston, Crystal
Having found no proper service on Crystal, the Motion
for Summary Judgment against Crystal is denied. How-
ever, having found that Garden, Timely, and Kingston
were properly served and that they did not file answers to
the backpay specification as required by the Board's Rules
and Regulations, it is found that each of these Respondents
has thereby admitted the allegations of the specifications,
including the allegations in paragraph VII of the specifica-
tion that Kingston, together with Chang, as a successor to
Garden and Timely, has operated the plant formerly
operated by Garden and Timely at 307 Canal Street, New
York City, engaged in the same business operations as
Garden and Timely, employing substantially the same
supervisors and employees. It is therefore found that
Kingston at times material to this proceeding has been an
agent, successor, and assign within the meaning of the
Board's Order in this case, operating the business, through
the agency of Chang, with knowledge of the unremedied
unfair labor practices of Garden and Timely.
2. Chang
Chang's answer to the backpay specification was a
general objection to the assertion of jurisdiction over him
in this matter and a simple, general, and undetailed denial
of all the allegations of the backpay specification. The
answer was not sworn to nor did it contain the address of
the Respondent as required by the Rules and Regulations.
Chang's attorney, Klein, was advised that this general
denial did not constitute a sufficient answer under the
Rules and Regulations. Upon his assertion that he needed
more time to secure the necessary records from his client
(which records had also been requested by General
Counsel under the terms of the Board's Order), in order to
prepare a proper answer, an adjournment of 22 days was
granted. However, no amended or supplemental answer
was ever filed for Chang, counsel stating that his client had
not supplied him (or General Counsel) with the necessary
records. I find that the answer filed by Chang is not a
sufficient answer under the Rules and Regulations of the
Board, and it is therefore stricken, and the allegations of
the specification, other than paragraph VII, are found to
have been admitted by Chang. I hold that the allegations of
paragraph VII are of a character that may be sufficiently
controverted by a general denial, putting General Counsel
to his proof. However, as previously noted, the record
establishes that Chang has been engaged at 307-309 Canal
Street for Garden and Timely, and continuously thereafter
at the same location in the same business operations with
substantially the same employees and supervisors. Upon
the entire record in this case it is found that Chang at times
material to this matter has been an agent, successor, and
I In the event no exceptions are filed as provided by Sec. 102.46 of the
Rules and Regulations of the National Labor Relations Board, the findings,
conclusions, and recommended Order herein shall, as provided in Sec.
assign within the meaning of the Board's order in this
proceeding with knowledge of the unremedied unfair labor
practices of Garden and Timely.
C. Motion To Reopen the Record To Amend the
Backpay Specification
The backpay specification issued on August 18, 1976,
alleges that the backpay period "is from July 18, 1973, the
date of [Brabham's] discharge, to the present time (and in
futuro, until such time as Respondents make a valid and
proper offer of reinstatement to her)." The specification, as
amended at the hearing, alleged that, from the third
quarter of 1973 through the second quarter of 1976, net
backpay due Brabham under the Board's Order was
$23,010.
On January 10, 1977, a motion was received from
General Counsel to accept into the record an exhibit
setting forth amended computations of backpay due
Brabham for the period from the third quarter 1973
through the second quarter 1976, the same period covered
by the original specification. There is indication that this
motion has been served on Kingston, Garden, Chang,
Klein, and Brabham. No response to the motion has been
received so far as I am aware. The effect of the motion is to
reduce the net backpay due Brabham until July 1, 1976,
from $23,010 to $14,231. In the circumstances there is
obviously no prejudice to the Respondents herein and the
motion is therefore granted. The motion to amend is
hereby marked Administrative Law Judge Exhibit 2, and is
included with the formal papers in this matter.
D. Remedial Order
On the basis of the foregoing findings of fact, conclusions
of law, and the entire record in this proceeding, and
pursuant to Section 10(c) of the Act, I hereby issue the
following recommended:
ORDER5
Respondents Garden Fashions, Inc., Timely Sportswear,
Inc., Kingston Sportswear, Inc., and Bing Fin Chang a/k/a
Barry Chang, and their officers, agents, successors, and
assigns, shall jointly and severally pay to Ollie Brabham for
backpay due until July 1, 1976, under the Board's Order in
this matter, Case 2-CA-13104, the amount of $14,231, with
interest thereon at the rate of 6 percent per annum
computed in accordance with Isis Plumbing & Heating Co.,
138 NLRB 716 (1962), and without prejudice to further
proceedings hereafter to determine backpay due under said
Order from July 1, 1976, until such time as Respondents
make a valid and proper offer of reinstatement to Brabham
in accordance with the Board's Order.
102.48 of the Rules and Regulations, be adopted by the Board and become
its findings, conclusions, and Order, and all objections thereto shall be
deemed waived for all purposes.
75