Hijos de Ricardo Vela, Inc.

National Labor Relations Board - Board Decisions

Nov 22, 1972

200 N.L.R.B. 379 (N.L.R.B. 1972)

HIJOS DE RICARDO VELA, INC. 379
Hijos de Ricardo Vela, Inc. and Vela Distributing
Corp. and Congreso de Uniones Industriales de
Puerto Rico . Case 24-CA-3062
November 22, 1972
DECISION AND ORDER
BY MEMBERS FANNING, KENNEDY, AND
PENELLO
On April 19, 1972, Administrative Law Judge'
Harry R. Hinkes issued the attached Decision in this
proceeding. Thereafter, Respondent filed exceptions
and the General Counsel filed exceptions and a 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 found, and we
agree, that Respondent violated Section 8(a)(5) and
(1) of the Act by refusing to enter into bargaining
negotiations with the newly certified Union and by
thereafter subcontracting its radio and stereo repair
work without affording the Union an opportunity to
bargain over the subcontracting of said work.
However, we do not agree with the Administrative
Law Judge's conclusion that Respondent engaged in
further 8(a)(5) and (1) violations by negotiating
directly with employees Ramon Soto, Luis Negron,
Miguel Perez, and William Diaz concerning the
subcontracting of repair work to them and offering
them inducements to leave its employment and
become independent contractors. Such a conclusion
would be inconsistent with the testimony credited by
the Administrative Law Judge which shows that
these employees decided on their own initiative,
without inducement by Respondent, to leave Re-
spondent's employ to go into business for themselves.
While Respondent agreed to sell parts on credit to
Diaz and to the company formed by Negron, Soto,
and Perez, Respondent explains that selling parts on
credit ". . . is part of our business . . . Because our
business is to sell and we sell on credit "2 Respon-
dent also sold shop testing equipment to the latter
company because Soto and Negron were the only
1 The title of "Trial Examiner" was changed to "Administrative Law
Judge" effective August 19, 1972.
2 The Administrative Law Judge found that "the purchase of parts and
equipment by Soto, Negron and Perez and the acceptance of financial aid
by Diaz were bona fide and voluntary "
a If the sale of company repair equipment was "unprecedented, as our
dissenting colleague asserts, it was only because, as Respondent explained,
mechanics who repaired stereos and radios in the
shop and, with their departure, Respondent had no
further need for the equipment.3 Thereafter, it
subcontracted stereo and radio repair work to this
company consistent with its established practice of
referring repair work to outside independent service
companies. Considering all the circumstances attend-
ing the departure of Soto, Luis Negron, Perez, and
Diaz, we do not believe that a finding of a violation
of the Act can be based thereon.
Because of the departure of the repair mechanics,
insufficient work was available for helpers and
drivers Hector Rodriguez, Justo Rivera, Angel
Negron, and Efrain Rivera. As a consequence, they
were laid off by Respondent. In these circumstances,
we find that no valid basis exists for requiring
Respondent to reinstate those employees with back-
pay as recommended by the Administrative Law
Judge.
Nor can we find that the outside stereo mechanic
Carmen Rosado was terminated because he refused
Respondent's offer, allegedly made to frustrate the
Union, to become a subcontractor on July 15.
Rosado was not terminated until August 15. By then
Luis Negron and Soto, the only mechanics who
performed the more complicated shop work on
stereos and radios, had left; Rosado had never
worked for Respondent as an inside repair man; and
even assuming his qualifications for such work,4
there was no equipment left in the shop for its
performance. Respondent decided to discontinue
stereo and radio repair work which had dwindled to
Rosado's outside service calls and, in consequence
thereof, Rosado was terminated.
The Administrative Law Judge himself has de-
scribed the events leading to Rosado's termination as
follows: "Thereafter [following the departure of Luis
Negron and Soto], although Respondent continued
its repair services on television, its radio and stereo
repair services were discontinued, since the employ-
ees doing such work at the shop, Soto and Negron,
had left the employ of the Respondent and the
Respondent's test equipment for such work was also
gone." This is precisely our understanding of the
record and we cannot find any logic in the conclu-
sion that Rosado's termination was occasioned by his
refusal to accept subcontracting work. Respondent's
prior unfair labor practices are, of course, a relevant
factor in this case, but the evidence which bears most
directly upon Rosado's termination persuades us that
this was the first occasion when the mechanics using the equipment had
resigned and could not be replaced by qualified mechanics
4 Though testifying to having earned a diploma in transistors from the
Lincoln Institute in Connecticut, Rosado further testified , "I have never
spoken to him [Respondent 's president , Vela] and he has never asked me"
about this and that "I don't know if they were aware of it "
200 NLRB No. 43
380 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
his employment ended when, for the reasons given
above, Respondent abandoned repair work on
stereos and radios.
However, having found that the Respondent has
engaged in certain of the unfair labor practices
alleged herein, we shall order that it cease and desist
therefrom, and from like or related conduct, and that
it take certain affirmative action which we find will
effectuate the policies of the Act in the circumstances
of this case.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor
Relations Board hereby orders that Respondent,
Hijos de Ricardo Vela, Inc., and Vela Distributing
Corp., its officers, agents, successors and assigns,
shall:
1. Cease and desist from:
(a) Refusing to bargain collectively concerning
rates of pay, wages, hours, and other terms and
conditions of employment with Congreso de Uniones
Industriales de Puerto Rico, upon request, as the
exclusive bargaining representative of its employees
in the following appropriate unit:
All employees of Respondent including shop and
field TV and radio technicians, the driver-helpers,
and the shop stockroom and shop spare parts
stockroom clerk and shop helper, but excluding
all other employees, office clerical employees,
sales personnel, guards and supervisors as defined
in the Act.
(b) Unilaterally eliminating a department in the
shop and subcontracting work without prior notifica-
tion to and bargaining with the Union.
(c) In any like or related manner interfering with,
restraining, or coercing its employees in the exercise
of their right to self-organization, to form labor
organizations, to join or assist the Union or any other
labor organization, to bargain collectively through
representatives of their own choosing for the purpose
of collective bargaining or other mutual aid or
protection or to refrain from any or all such
activities.
2. Take the following affirmative action which
the Board finds will effectuate the policies of the Act:
(a) Upon request, bargain collectively with Congre-
so de Uniones Industriales de Puerto Rico as the
exclusive representative of the employees in the
appropriate unit described above with respect to
rates of pay, wages, hours of employment, and other
terms and conditions of employment and, if an
understanding is reached, embody such understand-
ing in a signed agreement.
(b) Post at its place of business, Bayamon, Puerto
Rico, copies of the attached notice marked "Appen-
dix" in both English and Spanish.5 Copies of said
notice, on forms provided by the Regional Director
for Region 24, after being duly signed by the
Respondent's representative, shall be posted by
Respondent immediately upon receipt thereof, and
be maintained by it for 60 consecutive days thereaf-
ter, in conspicuous places, including all places where
notices to employees are customarily posted. Reason-
able steps shall be taken by the Respondent to insure
that said notices are not altered, defaced, or covered
by any other material.
(c) Notify the Regional Director for Region 24, in
writing, within 20 days from the date of this Order,
what steps the Respondent has taken to comply
herewith.
IT IS HEREBY FURTHER ORDERED that the complaint
be, and it hereby is, dismissed insofar as it alleges
violations of the Act not found herein.
MEMBER FANNING, concurring in part and dissenting
in part:
My colleagues properly find in agreement with the
Administrative Law Judge that Respondent violated
Section 8(a)(5) and (1) of the Act by refusing to
bargain with the Union and subcontracting its radio
and stereo repair work without affording the Union
an opportunity to bargain thereon prior to taking
said unilateral action. Contrary to my colleagues, I
would also find that Respondent engaged in further
8(a)(5) and (1) conduct and that the remedy should
not be limited to Respondent's unlawful refusal to
enter into negotiations with the Union.
On February 5, 1971,6 a few months prior to the
events involved in the instant case, Respondent
discharged all 14 repair shop employees who struck
to protest Respondent's failure to act on their
complaints about working conditions. As indicated
by the Administrative Law Judge, the Board in a
recent proceeding7 found that the discharges contra-
vened Section 8(a)(3) and (1) of the Act because
Respondent desired to penalize the employees for
their union membership and protected activity in
engaging in a work stoppage.
The Union won a representation election on May 4
and was certified for a unit composed of all
employees of Respondent including shop and field
radio and TV technicians, shop clerks and helpers,
and driver-helpers. Despite the Union's bargaining
request on May 7 and thereafter, Respondent refused
5 In the event that this Order is enforced by a Judgment of a United National Labor Relations Board"
States Court of Appeals , the words in the notice reading "Posted by Order 6 Unless otherwise specified the dates herein refer to 1971.
of the National Labor Relations Board" shall read "Posted pursuant to a 194 NLRB No. 62.
Judgment of the United States Court of Appeals enforcing an Order of the
HIJOS DE RICARDO VELA, INC. 381
to enter into negotiations for a contract. As stated
above, it is the unanimous opinion of the panel that
this conduct of Respondent violated Section 8(a)(5)
and (1) of the Act.
During the month of May, employees Ramon Soto
and Luis Negron, the two radio and stereo shop
employees, and Miguel Perez, a driver, discussed the
possibility of quitting Respondent to form their own
repair business. In early June, Negron talked to
Respondent's president, Ricardo Vela, about leaving
the Company and asked if he, Soto, and Perez, could
buy the testing equipment they were using as
employees of Respondent. Vela, who conceded that
he had never before sold any of the Company's
equipment, agreed to grant them credit for the
purchase of the equipment valued at $225.8 In
addition, Vela presented them with a set of tools.
On June I1 or 12, Soto, Negron, and Perez
tendered their resignations which were typed by a
friend of Perez.9 Vela then assisted in moving the
equipment to a nearby location occupied by the new
company, which for about a month was a partner-
ship and was incorporated early in July as Ramilu
Electronic, Inc'0
The certificate of incorporation states that the
"minimum amount of capital with which the corpo-
ration shall commence operation is $1000." Yet, as
noted above, Ramilu resorted to a credit arrange-
ment with Respondent to obtain the basic equip-
ment.li Although Soto, Negron, and Perez were
ostensibly operating as a separate and independent
business entity, Respondent nevertheless assumed
the credit risk for all service work done by them by
continuing to collect from individual customers and
then paying Ramilu for the repair work.
Prior to the departure of Soto and Negron on June
12, Rosado, who was Respondent's outside stereo
mechanic, did whatever repair work was feasible at
the customers' homes and those stereos that needed
attention at the shop were brought in by Rosado for
repair by Soto and Negron. Subsequent to June 12,
Perez came to the shop to pick up the unrepaired
stereos for repair by Soto and Negron at their new
place of business. However, on July 15, Vela told
Rosado that if he "wanted to work on his own, Vela
would give [him] five services a day at $10 each,"
which would total as much as $300 a week. Vela also
offered Rosado "economic aid" to enable him to
operate his own business. When Rosado did not
accept the offer from Vela, the latter discharged him
on August 5.
I agree with the Administrative Law Judge that the
& Vela also extended credit to them in connection with the sale of
replacement parts in the amount of approximately $700
9 According to the uncontradicted testimony of employee Camilo
Rosado, Perez was Vela's "personal chauffeur."
discharge was unlawful because it was occasioned by
Rosado's refusal to become a subcontractor for Vela.
My colleagues fail to take cognizance of the fact that,
during the two months following the departure of
Soto and Negron, the outside stereo work was still
being performed by Rosado while Soto and Negron
continued to handle the repair work they had
previously performed at Respondent's shop. More-
over, Vela's offer to subcontract' outside service calls
to Rosado would have involved no change in the
existing distribution of the radio and stereo work
except for the proposed shift in Rosado's role from
employee to independent contractor.
In significant contrast to Rosado, who balked at
Respondent's proposal that he leave Respondent's
employ, employee William Diaz, an outside TV
mechanic, "voluntarily" left when Respondent made
it possible and attractive to do so by providing Diaz
with the financial assistance to go into his own
business.
As a result of the departures of these key
employees, which were "expedited" or forced by
Respondent, the need for drivers diminished and
Hector Rodriguez, Justo Rivera, Angel Negron, and
Efrain Rivera were laid off. Although their termina-
tion was not found by the Administrative Law Judge
to be a violation of the Act, I agree with him that the
loss of their jobs should be remedied because it
stemmed from Respondent's unlawful conduct in
derogation of the Union.
It is clear from the foregoing that "Respondent,
which demonstrated its antiunion bias by unlawfully
discharging all of its employees on February 5,
continued to engage in discriminatory conduct by
unlawfully refusing to meet or bargain with the
Union; by subcontracting work without prior notifi-
cation to the Union and without affording the latter
an opportunity to bargain over the elimination of the
radio and stereo repair department; by expediting
and assisting in the departure of Soto, Negron, Perez,
and Diaz through the provision of financial and
other assistance; and by discharging employee
Rosado for not agreeing to become a subcontractor
of Respondent. Although Soto, Perez, and Negron
testified that they left Respondent's employ "volun-
tarily," the credited testimony of Negron reveals that
they did not decide to do so until they consulted Vela
with whom they arranged for an unprecedented sale
of equipment, financial assistance, and a continua-
tion of their performance of repair work for
10 Perez was designated as resident agent in charge of Ranulu's principal
office.
" Soto, Negron, and Perez testified that they did not know how much
their new business associates contributed to Ramilu.
382 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Respondent, with the latter retaining total responsi-
bility for collection of service fees from customers.12
That Respondent was determined to "decimate" the
Union's ranks is graphically shown by its harsh
treatment of Rosado who proved to be less tractable
than the other employees by resisting Vela's offer of
financial aid and weekly earnings of $300 if he would
do the very same work as before as an independent
contractor rather than as an employee.
As Respondent's entire course of conduct was
clearly designed to weaken the Union and reduce the
size of the unit for which it was certified, I am of the
opinion that the only effective and meaningful
remedy is to order the restoration of the status quo
ante. Accordingly, I agree with the General Counsel
that Respondent should be required "to return to its
former mode of operation by reestablishing the radio
and stereo repair services in the shop." 13 In this
connection, I would require the reinstatement with
backpay of Rosado as well as the four employees
who were laid off by Respondent. I would also order
Respondent to reinstate Soto, Negron, Perez, and
Diaz who left Respondent only after they were given
the requisite financial and other assistance which
helped bring about the shrinkage of the unit that
suited Respondent's discriminatory purpose of frus-
trating the Union.
12 It is noteworthy that Vela 's personal chauffeur furnished Soto and
Negron with aid in preparing their resignations and as "Resident Agent" of
Ramilu appeared to be the central figure in organizing the new company.
13 C H Sprague & Sons Co., 175 NLRB 378; 379, Larry Barns Chevrolet
Company, 174 NLRB 818, 822.
APPENDIX
NOTICE TO EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
WE WILL NOT refuse to bargain collectively
concerning rates of pay, wages, hours, and other
terms and conditions of employment, with Con-
greso de Unions Industriales de Puerto Rico as
the exclusive representative of the employees in
the bargaining unit described below.
WE WILL NOT unilaterally eliminate a depart-
ment in the shop and subcontract work without
prior notification to and bargaining with the
Union.
WE WILL NOT in any like or related manner
interfere with, restrain, or coerce our employees
in the exercise of their rights to self-organization,
to bargain collectively through representatives of
their own choosing for the purposes of collective
bargaining or other mutual aid or protection, or
to refrain from any or all such activities.
WE WILL, upon request, bargain collectively
with the above-named Union as the exclusive
representative of all employees in the bargaining
unit described below, with respect to rates of pay,
wages, hours, and other terms and conditions of
employment and, if an understanding is reached,
embody such understanding in a signed agree-
ment. The bargaining unit is:
All employees including shop and field TV
and radio technicians , driver-helpers, shop
stockroom and shop spare parts stockroom
clerk and shop helper, but excluding all
other employees, office clerical employees,
sales personnel , guards, and supervisors as
defined in the Act.
HIJOS DE RICARDO
VELA, INC. AND VELA
DISTRIBUTING CORP.
(Employer)
Dated By
(Representative) (Title)
This is an official notice and must not be defaced
by anyone.
This notice must remain posted for 60 consecutive
days from the date of posting and must not be
altered, defaced, or covered by any other material.
Any questions concerning this notice or compli-
ance with its provisions may be directed to the
Board's Office, Pan Am Building, Seventh Floor P.
0. Box UU, 255 Ponce de Leon Avenue, Hato Rey,
Puerto Rico 00919, Telephone 809-765-0404.
TRIAL EXAMINER'S DECISION
STATEMENT OF THE CASE
HARRY R . HINKES, Trial Examiner: On August 10, 1971,
Congreso de Uniones Industriales de Puerto Rico, herein-
after referred to as the Union , filed a charge against Hijos
de Ricardo Vela, Inc., and Vela Distributing Corp.,
hereinafter referred to as the Respondent or Employer,
charging the commission of unfair labor practices, which
charge was served on the Respondent on the same date. An
amended charge was filed by the Union on September 24,
1971, and served on the Respondent on the same date.
Pursuant to these charges, a complaint was issued by the
Acting Regional Director for Region 24 on October 6,
1971, alleging that the Respondent , in violation of Section
8(a)(1) and (5) of the Act, had refused the Union's request
to bargain despite its certification by said Regional
Director as the exclusive collective -bargaining representa-
tive of the employees in the appropriate unit and had
unilaterally and without prior notice to the Union
subcontracted some of its work , inducing some of the unit
employees to perform services for the Respondent as
mdependent contractors , and had terminated some of its
HIJOS DE RICARDO VELA, INC. 383
unit employees either as a result of the contracting out of
its repair services to said independent contractors or as a
result of the employees' refusal to work as an independent
contractor.
By answer duly filed Respondent denied the complaint's
allegation that Hijos de Ricardo Vela, Inc., and Vela
Distributing Corp., constitute a single employer. With
respect to the complaint's allegation that the employees of
the two companies constitute an appropriate unit for the
purpose of collective bargaining, Respondent's answer
denied all references to Vela Distributing Corp. Finally,
Respondent by its answer, while admitting the certification
of the Union as the representative of the appropriate unit
for the purposes of collective bargaining with the Respon-
dent, denied refusing to bargain with the Union or
instigating the subcontracting of some of its work to unit
employees whom it induced to leave Respondent's employ
and become independent contractors. By way of affirma-
tive defenses, Respondent alleged that it had subcontracted
its services for many years and that its termination of unit
employees was a result of their inability to do the work
assigned or 'lack of work occasioned by the departure of
some of its employees for whom the terminated employees
acted as helpers. By a subsequent amended answer,
Respondent denied the legality of the certification issued
by the Regional Director, alleging said certification to be
void and illegal.
A hearing was held before me in Hato Rey, Puerto Rico,
on November, 17, and 19, 1971, and January 25, 26, and 27,
1972, at which all parties were represented and were
afforded an opportunity to examine witnesses and adduce
relevant evidence. Briefs have been received from counsel
for the General Counsel and counsel for the Respondent
and have been given careful consideration.
Upon the entire record including' my evaluation of the
demeanor of the witnesses as they testified, I make the
following:
FINDINGS OF FACT
A. Jurisdiction
The complaint alleges, Respondent's answer admits, and
I find that Hijos de Ricardo Vela, Inc., is a corporation of
the Commonwealth of Puerto Rico, engaged in operating a
retail department store at Bayamon, Puerto Rico. During
the year 1970, it purchased and had shipped to its place of
business in Bayamon, Puerto Rico, from points located
outside of Puerto Rico, household goods, electrical
appliances, and other merchandise valued in excess of
$50,000. During the same period, it had a gross income of
over $500,000.
The complaint further alleges but Respondent's answer
denies that:
Vela Distributing Corp., is a corporate affiliate of Hijos
de Ricardo Vela, Inc It is the exclusive distributor of
Zenith Company radio and television products on the
island of Puerto Rico. It also acts as the radio and TV
repair servicing arm of Hijos de Ricardo Vela, Inc.
During the year 1970 it purchased and had shipped to
its place of business in Bayamon, P.R. from points
located outside of Puerto Rico radios, TV sets, and
other electronic products valued at in excess of $50,000.
Hijos de Ricardo Vela, Inc. and Vela Distributing
Corp. operate as a single integrated family type
enterprise with common operational and labor rela-
tions controls. For the purposes of this proceeding said
corporations constitute a single employer of the
employees involved herein. Respondent is now and has
been at all times material herein an employer engaged
in commerce within the meaning of Section 2(6) and (7)
of the Act.
In a proceeding involving the same parties, Case 24-CA-
2982, the Trial Examiner in a decision dated August 19,
1971, concluded that:
... the two corporations are, with respect to the
employees here involved, highly integrated operations
with a common labor relations policy, that they
constitute a single employer for the purposes of this
proceeding, that the respondent is an employer en-
gaged in commerce within the meaning of Section 2(6)
and (7) of the Act, and that it will effectuate the
purposes of the Act to assert jurisdiction herein.
[Citations omitted.]
By decision dated November 30, 1971, the National Labor
Relations Board affirmed the Trial Examiner's rulings,
findings, and conclusions (194 NLRB No. 62). The
decision of the Board involving the same parties to this
proceeding and the same period of time is conclusive and
binding upon me. Whether or not it is res judicata to the
Board's reconsideration of the issue need not be decided in
this decision. In that connection, however, I note that the
matter was litigated in the related representation case
reported in Case 24-RC-4290 and adjudicated therein by
the Regional Director in his Decision and Direction of
Election dated March 25, 1971. The request for review by
the employer was denied by the Board. Moreover, the
documentary evidence submitted by counsel for the
General Counsel in this proceeding corroborates the single
employer relationship of the two corporations. I refer to
the General Counsel's Exhibits 11 and 12 where letterheads
of both corporations were used in submitting Excelsior
lists.
I conclude, therefore, that the two corporations are
highly integrated operations with a common labor relations
policy, that they constitute a single employer for the
purposes of this proceeding, that the Respondent is an
employer engaged in commerce within the meaning of
Section 2(6) and (7) of the Act and that it will effectuate
the purposes of the Act to assert jurisdiction herein.
The complaint alleges, Respondent's answer admits and
I find that the Union is and at all times material herein has
been a labor organization within the meaning of Section
2(5) of the Act.
B. Refusal To Bargain
In the representation case, the Union was certified on
May 12, 1971, after having won the election which was
held on May 4, 1971. On May 18, 1971, the Union wrote
Leroy Vela, president of Vela Distributing Corp., asking to
meet to commence negotiations on May 27, 1971.On May
26, however, counsel for Respondent advised the Union,
"In view of certain conflicts of fact and law in the
384 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
representation case, we are unable at present to enter into
negotiations with the organization you represent." No
representative for the Respondent appeared at the request-
ed meeting and no proposed contract was submitted by the
Union prior to or subsequent to the scheduled meeting. On
or about August 5, 1971, the Union once again requested a
meeting to commence negotiations . The counsel for
Respondent replied, "Due to reasons set forth in our
correspondence we cannot attend meeting," referring,
apparently, to his earlier communication of May 26.
Counsel for the Respondent asserts that the "conflicts of
fact and law" refer to the representation proceeding
wherein the Regional Director "illegally held both Respon-
dents herein constituted a `single employer '; and included
nonsupervisory employees with a supervisor in the appro-
priate unit." He argues that "by not allowing an attack on
the representation proceeding the Trial Examiner effective-
ly bars the Board from considering the merits of Respon-
dent's defense in a controversial proceeding ." I do not
agree . Counsel for Respondent misconceives the role of the
Trial Examiner. I cannot bar the Board from doing
anything. I am subordinate to the Board and am bound by
its rulings. Here the Board has ruled that the two
corporations constitute a single employer. I cannot depart
from that ruling as explained earlier. Similarly, the Board
in adopting the decision of the Trial Examiner at 194
NLRB No. 62 found that the alleged supervisor in the
appropriate unit was not a supervisor but an employee
within the meaning of the Act, and I am bound by that
determination as well. Respondent was given every
opportunity to contest these allegations in the proceeding
before that Trial Examiner. There is no justification for
permitting Respondent a second "bite at the apple," but,
even if there were, I am not the one to allow it. The Board
may, if it wishes, reconsider its earlier ruling. I am bound
by it.
Accordingly, I conclude that the Respondent by failing
and refusing to commence negotiations with the Union
after repeated requests violated Section 8(a)(5) of the Act
which obligates it to bargain collectively with the repre-
sentative of his employees.
C. The Subcontracting
In May 1971, Ramon Soto, Miguel Perez, and Luis
Negron discussed the possibility of leaving the employ of
the Respondent to form their own electronic repair
business. According to both Soto and Perez, these plans
were not discussed with the Respondent's officials.
According to Luis Negron, however, whose testimony I
credit, he talked to Leroy Vela about leaving the Company
and asked Vela if he, Soto, and Perez could buy the
equipment they used while working at the Respondent.
About a week after Negron's inquiry of Vela, or about
June 11 or 12, 1971, the three employees left the employ of
the Respondent and opened up their own electronic repair
shop, calling it Spark Electronic Company. The name of
the Company was subsequently changed to Ramilu
Electronic, Inc., said name being taken from the first two
letters of the first names of the three incorporaters, Ramon
Soto, Miguel Perez, and Luis Negron. Contemporaneous
with the departure of these three employees from the
employ of the Company, Respondent sold some $900
worth of testing equipment and parts to the three
employees , extending credit for the purchase . The goods
thus sold were moved from the premises of the Respondent
to the premises of the new company. Thereafter, although
Respondent continued its repair services on television, its
radio and stereo repair services were discontinued, since
the employees doing such work at the shop, Soto and
Negron, had left the employ of the Respondent and the
Respondent's test equipment for such work was also gone.
Leroy Vela testified that his test equipment for radios
and stereos was sold by him inasmuch as the employees
using that equipment , Soto and Negron, had resigned. He
also admitted that he sold the equipment and parts to them
on credit . Further, he testified that he sent work to these
employees after they left the employ of the Respondent,
but that this practice was like the Company's established
practice of referring some of its work to outside independ-
ent service companies. Soto testified that when the new
company did work referred to them by the Respondent it
was paid by the Respondent and not by the customer.
Respondent introduced the testimony of several independ-
ent service repairmen whom it used for referral work. One,
Daniel Blanco, testified that when he got a call from the
Respondent to do some service work he was paid by the
Respondent on work that was still covered by the
warranty . On nonwarranty work , however, he collected
directly from the customer and not from the Respondent.
Similarly, independent servicemen Nazario and Irizarry
testified to the same payment practice . It should be noted
that this practice was not the same as the practice used
with the three employees who left the Respondent's employ
in June. For them, payment came from the Respondent
whether or not the set was under warranty. Thus,
Respondent assumed the credit risk for all service work
done by these former employees. I note that Ramon
Batista, an employee of the Respondent , testified that these
three former employees kept any payments they received.
He did not deny, however, that the independent contrac-
tors, Blanco, Nazario, and Irizarry, did their own collec-
tions whereas the Respondent made collections which it
turned over to the three former employees for work they
did.
In sum , therefore , I find that Respondent expedited and
assisted in the departure of Soto, Negron , and Perez by
selling them parts and equipment on credit and by
undertaking the credit risk for the work they performed on
service calls referred to them , unlike its practice with other
independent contractors to whom it did not subcontract all
of its radio and stereo work nor sell used equipment on
credit nor assume the credit risk on work referred by the
Respondent to be done by them.
Anibal Rivera was employed by the Respondent as an
outside TV repairman, but quit on June 23, 1971, because
the three former employees who had formed the Ramilu
Electronic Company offered him a job. Respondent had
employed one Justo Rivera as Anibal's driver. Justo Rivera
also left the Respondent 's employ on June 23, when Anibal
left the Respondent 's employ. According to the uncontrad-
icted testimony of Leroy Vela, Anibal voluntarily quit and
I so find.
HIJOS DE RICARDO VELA, INC. 385
William Diaz was employed by the Respondent as an
outside TV repairman , using Hector Rodriguez as his
driver. Diaz spoke to Leroy Vela about resigning to work
on his own. He quit on July 7, 1971, after Vela had
extended him several hundred dollars of credit for parts
and had arranged for Diaz' use of a company truck by
assuming the monthly payments due thereon. Diaz
returned the truck to the Company after 2 months of use at
which time he understood that the Respondent' s contract
on the truck was terminating. With the departure of Diaz,
the services of driver Rodriguez became unnecessary and
Respondent terminated his employment on July 21.
Angel Negron, employed as a driver by the Respondent,
assisted outside TV mechanics Torres and Diaz. Angel
Negron also left the employ of the Respondent on July 21.
Leroy Vela testified that Angel Negron was a substitute
driver when there were five or six mechanics "on the
street." With the departure of outside mechanics Anibal
Rivera and William Diaz as well as Luis Negron and
Ramon Soto, whose activities also involved Angel Ne-
gron's services, there was insufficient work left for Angel
Negron. The record, however, is unclear as to whether
Angel Negron voluntarily left the employ of the Respon-
dent or whether he was laid off by reason of lack of work.
The complaint alleges that Angel Negron was laid off, but
that allegation of the complaint has been denied in the
Respondent's answer. The testimony of Angel Negron
merely refers to the termination of his employment without
specifying whether he was laid off or whether he quit. At
one point, however, he testified that another employee,
Hector Rodriguez, "had his employment terminated" on
the same date. This passing reference to what might be
deemed to be an involuntary termination, however, might
be entitled to little weight were it not for the language of
the brief filed by counsel for the Respondent. In it he
states:
Upon Anibal Rivera's resignation there is no work
for his driver and consequently he [Justo] is terminated
[sic] from employment. The same situation happens
with Hector Luis Rodriguez and Angel Rafael Negron
(back up driver) whose employment is terminated upon
the resignation of Mr. William Diaz.
I conclude, therefore, Angel Negron as well as Justo Rivera
and Hector Rodriguez were laid off when, upon the
resignations of mechanics Anibal Rivera, Luis Negron,
Ramon Soto, and William Diaz, their services were no
longer needed.
Efrain Rivera was employed by the Respondent. His
work involved the receiving of television sets and radios as
they were delivered to the Respondent's shop, recording
the reception of television sets in a logbook and delivering
the work to the appropriate repairman. Efrain testified that
in mid&June on a Monday morning when he arrived at
work he found the bench on which the radio and stereo
work was tested and fixed to be bare of testing equipment
and the two radio repairmen, Soto and Luis Negron,
absent, although he had seen Soto on the job the previous
Friday, Thereafter, according to Efrain, no stereos and
radios were repaired at Respondent's shop, but were
delivered to Ramilu where Efrain also saw Soto. According
to Efrain, such sets had never been sent out unrepaired by
the Respondent before. On September 29, Leroy Vela
called Efrain to the office , gave him his check and told him
that he was laid off because there was no work for him.
The lack of work was apparently true , inasmuch as Ramon
Soto and Luis Negron had left the employ of the
Respondent in June and only one other inside mechanic
(Nazario), who worked on TV's, remained to require the
work of Efrain in logging and delivering.
Summarizing, I find that prior to the certification of the
Union, Respondent employed three inside mechanics,
Soto, Luis Negron , and Nazario . For work on sets that
were not brought into the shop Respondent employed
Anibal Rivera, William Diaz, Cruz, Tones, and Camilo
Rosado. As drivers, Respondent employed Angel Negron,
Hector Rodriguez, Miguel Perez , and Justo Rivera. In
addition , Respondent employed Efrain Rivera as a
receiving clerk inside the shop. After the Union was
certified, Respondent sold its radio testing equipment as
well as many parts to Ramon Soto , Luis Negron, and
Miguel Perez, who quit to form a company of their own.
Thereafter, all the radio and stereo work received by the
Respondent at its shop was sent to this new firm , who did
the work and collected from the Respondent. The only
inside mechanic left in the employ of the Respondent was
Nazario, who worked on TV's. In addition, outside
mechanics Anibal Rivera and William Diaz left the
Respondent's employ in June and July. These men were
TV mechanics and, although I have found that Anibal
Rivera left voluntarily , there being no evidence of any
inducements for his leaving being offered by the Respon-
dent, William Diaz, who left voluntarily, did so only after
Respondent had extended him several hundred dollars of
credit and had arranged the use of a company truck for
him. With the departure of mechanics Soto , Negron,,Diaz,
and Anibal Rivera, leaving only Nazario, Cruz, Rosado,
and Torres, Respondent 's need for drivers diminished.
Accordingly, Respondent laid off Hector Rodriguez, Justo
Rivera, and Angel Negron . In addition, Respondent laid
off his receiving clerk , Efrain Rivera.
D. The Discharge of Camilo Rosado
The complaint alleges that Camilo Rosado, a unit
employee, was discharged by the Respondent when he
refused to leave the Respondent's employ to work on his
own or as an employee of Ramilu , the company that had
been formed by the three former employees of the
Respondent. Rosado worked for the Respondent prior to
1967, Between 1967 and 1969 , he was employed elsewhere
as a stereo mechanic . In 1969, he was offered reemploy-
ment by Respondent when Ramon Batista, an assistant to
Leroy Vela, called him. Rosada accepted and returned to
work for Respondent as an outside stereo mechanic in
1969. He was Respondent 's only outside stereo mechanic
and drove his own truck. Rosado testified that on Monday,
June 14, Soto and Luis Negron did not show up for work at
the shop and the testing equipment for the repair of stereos
was missing. He had seen the testing equipment at the
shop, as well as Soto and Negron, the previous week.
Thereafter, he saw Miguel Perez visit the Respondent's
shop to get equipment there and saw the Respondent's
testing equipment at the Ramilu shop.
386 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Rosado testified that the stereos that he could not fix at
the customers' homes would be brought in by him to the
Respondent's shop to be repaired by the inside mechanics,
Ramon Soto or Luis Negron. With the departure of these
two men, however, stereos that were brought in by Rosado
because he could not fix them outside were turned over to
Miguel Perez on the following day. Such stereos would be
repaired at Spark (later Ramilu) and returned to the
Respondent with an invoice from Spark. They would then
be delivered to the customer by Rosado. Indeed, all of the
sets returned by Rosado to the customer from the
Respondent's shop after June 14 bore an invoice from
Spark.
Rosado further testified that on July 15, Leroy Vela told
him that if he wanted to work on his own, Vela would give
him five services a day at $10 each, which would give
Rosado earnings of up to $300 a week. Vela also offered
Rosado "economic aid." Rosado made no response.
On August 5, Leroy Vela told Rosado that he had
decided to close up the stereophonic shop, gave Rosado
severance pay, and laid him off. According to Rosado,
there had never been any complaint by management
concerning his work or his experience. Indeed, early in
1971 his weekly salary of $62 was raised to $72.
Leroy Vela admitted discharging Rosado in August
1971. He testified, however, that Rosado was discharged
because he was not able to repair sets in the shop and the
work that he had picked up for repairs had been repaired
by the two inside stereo mechanics, Negron and Soto, who
had left the employ of the Respondent. Vela admitted that
he never tried Rosado in the shop, but claimed that
Rosado had told him he could not repair transistors.
Indeed, Leroy Vela testified that Rosado merely changed
the needle on a stereo or changed the knob. This claim of
Rosado's incompetence, however, is questionable. When
Rosado was hired by the Respondent in 1969, he had been
working at a furniture shop doing radio repair. Vela did
not explain why Rosado was hired that time if, indeed,
Rosado was not competent, except to say that Rosado was
hired "out of sympathy." His only comment was that
Ramon Batista, his assistant, had no authority to ask
Rosado to come to work. Batista, himself, when testifying,
did not contradict Rosado's testimony to the effect that he,
Batista, had asked Rosado to come back to work in 1969
after consulting with Leroy Vela, nor did Batista corrobo-
rate Vela's testimony to the effect that he had no authority
to recall Rosado. Vela also explained that the $10 wage
increase given Rosado in early 1971 came about because
Rosado, who had had a driver for his outside stereo repair
work, lost that driver and undertook to do the driving
himself. When Rosado refused to do both the driving and
the repair work for the same salary, Vela gave him the pay
increase and I credit this version of the event.
With respect to Vela's charge of Rosado's incompetence,
I note, however, that Rosado denied Vela asking him about
his qualifications. Rosado's claim of competence in the
field of stereo repair is further strengthened by his
testimony of having earned a diploma in transistors from
the Lincoln Institute in Connecticut. Rosado further
testified, credibly in my opinion, that the reason he
brought the sets into the shop for repair was because the
necessary work would take too much time at the home of
the customers or because the complaint involved intermit-
tent irregularities in the performance of the set. After the
inside stereo mechanics , Soto and Negron , left the employ
of the Respondent and the testing equipment they used
was removed and sent to Ramilu , Rosado, lacking the
necessary equipment , could not make any stereo repairs at
the shop. Although TV mechanic Nazario had some
equipment at the shop, some of which Rosado could have
used on the stereos, he was unable to use that equipment
because Nazario was always using it.
In short , although counsel for the Respondent argues
that Rosado 's discharge was necessary in view of his
limited knowledge and training, I credit Rosado 's testimo-
ny to the effect that he was able to make such repairs and
made such repairs and that his inability to do such work at
the Respondent 's shop when Soto and Negron left was due
to the lack of testing equipment which had been sold to the
departing employees. On the contrary , I find that his
discharge was occasioned by his refusal to accept subcon-
tracting work from Leroy Vela as Soto, Negron, and Perez
had, and despite Vela's assurances of a large number of
service calls from Vela.
F. Concluding Findings
Although Respondent had established a practice of
referring some of its work to independent contractors, such
referrals were made by the Respondent without any
assumption by the Respondent of the credit risk involved.
Moreover, these independent contractors made their own
charges for their work and collected payment from the
customers themselves . Almost immediately after the Union
had been certified for the employees of the Respondent,
however, Respondent induced several of its employees to
leave the employ of the Respondent, extending them credit
for parts and equipment they needed and arranging for the
referral of repair work brought into Respondent 's shop to
these new contractors, assuming the responsibility for
collection of the charges for work done by them and
assuming all credit asks . Similarly, Respondent encour-
aged and induced William Diaz to leave the employ by
offering him certain financial assistance to do so. With the
departure of these mechanics and the resignation of
another mechanic [Anibal Rivera ], Respondent found its
need for helpers or drivers diminished . Accordingly , it laid
off a number of its drivers and helpers. Respondent finally
ceased doing its own radio repair work when in August
1971 it discharged Camilo Rosado for refusing to become
an independent subcontractor on such work . Bearing in
mind the union animus of the Respondent as found in the
earlier proceeding (194 NLRB No. 62) where Respondent
discharged employees for engaging in union activities, I
cannot help but conclude that Respondent's subcontract-
ing action here was designed to decimate the ranks of the
Union and emasculate its strength.
CONCLUSIONS OF LAW
1. Hijos de Ricardo Vela, Inc., and Vela Distributing
Corp., for the purposes of this proceeding, constitute a
HIJOS DE RICARDO VELA, INC. 387
single employer, engaged in commerce within the meaning
of Section 2(6) and (7) of the Act.
2. Congreso de Uniones Industriales de Puerto Rico is
a labor organization with the meaning of Section 2(5) of
the Act.
3. By refusing to enter into bargaining negotiations
with the Union in May and August 1971, after the Union
had been certified by the Board, Respondent violated
Section 8(a)(5) and (1) of the Act.
4. By negotiating directly with its employees, Ramon
Soto, Luis Negron, and Miguel Perez, concerning the
subcontracting of repair work to them and offering them
inducements for leaving the employ of the Respondent to
become independent contractors, Respondent violated
Section 8(a)(5) of the Act. Its similar negotiations with
employee William Diaz, together with offers of financial
aid, were also in violation of Section 8(a)(5) and (1) of the
Act.
5. By discharging employee Camilo Rosado because he
refused to negotiate directly with the Respondent to accept
subcontracted work Respondent violated Section 8(a)(5)
and (1) of the Act.
6. Respondent's layoff of employees Hector Rodriguez,
Justo Rivera, Angel Negron, and Efrain Rivera was for
lack of work. Such lack of work, however, was brought
about by Respondent's violations of Section 8(a)(5) of the
Act when it negotiated with individual employees to
subcontract some of its work and subcontracted some of its
work, particularly its radio repair work, to such employees.
The layoff of the four individuals noted above, therefore,
was a direct consequence of Respondent's violation of
Section 8(a)(5) of the Act as well.
THE REMEDY
Having found that the Respondent has engaged in
certain unfair labor practices in violation of Section 8(a)(1)
and (5) of the Act, I shall recommend that Respondent
cease and desist therefrom and from in any other manner
infringing upon its employees' Section 7 rights, and that it
take certain affirmative action designed to effectuate the
policies of the Act.
Respondent's negotiations and arrangements for the
subcontracting of some of its repair work was conducted,
not through the certified union, but with the individual
employees themselves. An employer, however, is obligated
to bargain with a union when he contemplates making a
unilateral decision about a mandatory subject of bargain-
ing.' Terms and conditions of employment are a mandato-
ry subject of bargaining and the contracting out of work
performed by members of the bargaining unit might be
appropriately called a condition of employment. The
Board has explained this duty in Westinghouse Electric
Corp., 150 NLRB 1574:
An Employer's duty to give a union prior notice and an
opportunity to bargain normally arises where the
employer proposes to take action which will effect
some change in existing employment terms or condi-
tions within the range of mandatory bargaining. In the
' Fibreboard Paper Products Corp., v. N L R B, 379 U S. 203.
2 Ozark Trailers, Inc, 161 NLRB 561.
Fibreboard line of cases , where the Board has found
unilateral contracting out of unit work to be violative
of Section 8(a)(5) and (1), it has invariably appeared
that the contracting out involved a departure from
previously established operating practices, effected a
change in conditions of employment , or resulted in a
significant impairment of job tenure , employment
security, or reasonably anticipated work opportunities
for those in the bargaining unit.
An employer may not evade this duty by concealing his
intention from the Union and later asserting that the
Union failed to request information with respect to the
decision .2 Whether the employer would have to bargain
about the decision to subcontract as well as the effect of
the subcontracting may have been in doubt heretofore.
However, in the Board's decision in Summit Tooling Co.,
195 NLRB No. 91, where the Board found that the
Respondent had closed down certain of its operations
without bargaining with the Union or notifying the Union,
the Respondent was found to have violated Section 8(a)(5)
of the Act in failing to give notice to the Union. The
Respondent, however, was not compelled to bargain with
the Union concerning the decision to close, the Board
stating that "Practical considerations dictate against our
ordering the Respondent to reestablish its Summit opera-
tions." Even were I to find, therefore , that Vela had shut
down its radio repair business , it would appear that it was
under no obligation to bargain with the Union concerning
the decision to close those operations , but only to notify
the Union . Actually, however , I find that Respondent's
action here did not constitute a partial shutdown of its
business . Although it discontinued its repairing of radios at
the shop , Respondent continued to accept such business
merely to send the work out to its subcontractors. In
essence , therefore, it was still in the same radio repair
business as far as the public was concerned . Its actions,
therefore, were clearly that of a subcontract rather than a
partial closing. As a subcontracting decision , precedents
dictate that the Respondent was under an obligation to
bargain about the decision itself and its effect on the unit
employees . In the Westinghouse decision, supra, the Board
found that the Company had not violated the Act in its
subcontracting decision . It noted, however, that the
decision to subcontract was:
[M]otivated solely by economic considerations; that it
comported with the traditional methods by which the
the Respondent conducted its business operations; that
it did not during the period here in question vary
significantly in kind or degree from what had been
customary under past established practice ; that it had
no demonstrable adverse impact on employees of the
unit; and that the Union had the opportunity to
bargain about changes in existing subcontracting
practices at general negotiating meetings.
Here none of these considerations were present . The record
is bare of any suggestion that Respondent's decision to
subcontract was motivated by economic considerations.
The Respondent 's decision to subcontract to its former
employees was totally unlike its subcontracting arrange-
388 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
ments with other independent service companies. The
subcontracting decision did adversely affect a number of
the employees resulting in their loss of jobs and, finally, the
Union had no opportunity to bargain about the changes in
the subcontracting practices at negotiating meetings. The
Board 's Westinghouse decision is not dispositive of this
case.
The usual remedy applied to an employer who has
violated his statutory duty to bargain about a decision to
subcontract unit work is restoration of the status quo ante.
This remedy will be applied even where the subcontracting
decision was made without union animus.3 Here, however,
Respondent has offered no explanation for its decision to
subcontract. It may not be unreasonable to infer that its
decision, made shortly after the Union had been certified
as the bargaining agent for the employees, was motivated
by the employer's unhappiness with the result. Moreover,
Respondent's union animus cannot be overlooked in view
of the decision of the Trial Examiner in the earlier unfair
labor practice proceeding (194 NLRB No. 62) where it was
found that the Respondent had discharged employees for
engaging in union activities.
It does not follow, however, that an order requiring
Respondent to resume his radio repair business as
heretofore would be warranted. In Gladwin Industries, Inc.,
183 NLRB No. 36, the Board affirmed the rulings of the
Trial Examiner, who found:
The transaction between Respondent and Evans
[Respondent's employee turned subcontractor] consti-
tuted a bona fide sale with legal title to the machines
vesting in Evans. Following the purchase, which was
entirely voluntary on Evan's part and which was
prompted by economic considerations, he transported
the machines to his home and became a private
enterpreneur. I believe it would be unduly punitive to
Evans, by an affirmative order such as the General
Counsel suggests , to wrest these devices from Evans'
control solely to correct Respondent's wrongdoing. I
shall, therefore, not recommend that the engraving
machines be returned to Respondent, nor shall I
otherwise forthwith order that the engraving depart-
ment be reestablished. However, I have found that the
elimination of this department was accomplished
unilaterally by Respondent and that the Union had a
statutory right to prior consultation. Accordingly, I
shall recommend that Respondent be ordered to
bargain with the Union concerning the revitalization of
the engraving department to refrain from any such
unilateral action in the future.
Here, too, the purchase of parts and equipment by Soto,
Negron, and Perez and the acceptance of financial aid by
Diaz were bona fide and voluntary. I shall, therefore, not
order the return of such parts and equipment to the
Respondent nor order the reestablishment of its radio
repair business. It should be sufficient to order Respondent
to bargain with the Union concerning the revitalization of
its radio repair business and to refrain from any such
unilateral action in the future.
However, effectuation of the policies of the Act does
require that Respondent be directed now to remedy the
violation found by offering to bargain not only about the
effects on the employees of the changes made in the
summer of 1971, but also about the restoration of the status
quo ante. It must be presumed that the laid-off helpers and
drivers would have continued as helpers and drivers at
least until Respondent had fulfilled its bargaining obliga-
tion by negotiating to a bona fide impasse . Effectuation of
the Act's policies , therefore, further requires that the
employees whose statutory rights were violated by reason
of Respondent's unlawful unilateral action and who have
suffered loss in consequence thereof, be reimbursed for
such losses until such time as Respondent remedies its
violations.
Accordingly, I shall order that the Respondent make
whole the employees who worked as drivers or clerks for
any loss of pay they may have suffered as a result of
Respondent's unfair labor practices. The liability for such
backpay shall cease upon the occurrence of any of the
following conditions : ( 1) reaching mutual agreement with
the Union relating to the subject which Respondent is
herein required to bargain about ; (2) bargaining to a bona
fide impasse ; (3) the failure of the Union to commence
negotiations within 5 days of the receipt of Respondent's
notice of its desire to bargain with the Union; or (4) the
failure of the Union to bargain thereafter in good faith. Of
course, if Respondent decides to resume the status quo ante
with the employees once again doing radio repair work, its
liability will cease as of that date . Backpay shall be based
upon the earnings which affected employees would
normally have received absent the changes, less any net
interim earnings and shall be computed on a quarterly
basis with interest thereon.4
As respects the discharge of Camilo Rosado, I have
found that his discharge was motivated by Respondent's
failure to have him agree to subcontracting work. In
Shamrock Dairy, Inc., 124 NLRB 494, a similar situation
occurred, six drivers refusing to deal with the Respondent
on an individual basis and being discharged by the
employer for that reason . Board Members Jenkins and
Fanning favored the reinstatement of such employees with
backpay as a remedy for the 8(a)(5) violation of the
employer, even though the Respondent may not have
violated Section 8(a)(3), finding further that the drivers lost
their jobs as a direct consequence of the Respondent's
failure confer with the Union. I shall, accordingly, order
Respondent to offer Rosado immediate reinstatement to
his former job, or equivalent, and make him whole for any
losses sustained by him as a result of the Respondent's
unlawful discharge, in the same manner as set forth earlier
for the helpers.
[Recommended Order omitted from publication.]
3 Fibreboard Paper Products, supra
4 Unit Drop Forge Division, 171 NLRB 600.