Hot Bagels & Donuts

National Labor Relations Board - Board Decisions

Aug 10, 1979

244 N.L.R.B. 129 (N.L.R.B. 1979)

HOT BAGELS & DONUTS
Hot Bagels and Donuts of Staten Island, Inc. and Am- ders that tl
boy Baking, Inc. and Bakery and Confectionery Staten Isla
Workers Union of America, Local 3, AFL-CIO and Island, Ne
Local 868, an affiliate of the International Brother- the said re
hood of Teamsters, Chauffeurs, Warehousemen and
Helpers of America, Party to the Contract. Case 29
CA -4734
August 10. 1979
BENJAMIN
SUPPLEMENTAL DECISION AND ORDER Januar 27.
sued a Deci
BY MEMBERS JENKINS, MURPHY. ANI TRUESI)AI.E Hot Bagels
violated Sec
On January 27, 1977, the National Labor Relations tions Act, a
Board issued its Decision and Order in the above- gustne ButJack Brenta
entitled proceeding,' directing Respondent Hot Ba- on Novem
gels and Donuts of Staten Island, Inc., inter alia, to tivities on b,
make whole Carlos Rivera, Augustine Bultron, Carlos Union of A
Saurez, Jack Brentano, and Frank Sorensen for their (1977)). The
losses resulting from unfair labor practices committed discriminate
by Respondent in violation of Section 8(a)(3) and (1) loss of pay t
of the National Labor Relations Act, as amended. in F. W
Thereafter, the Board's Order was enforced by the gether with
United States Court of Appeals for the Second Cir- ance With
cuit., (1962). On
Appeals for
Pursuant to a backpay specification and approprA- ing in full t
ate notice issued by the Regional Director for Region Thereafte
29, a hearing was held on March 14, 1979, before Region 29
Administrative Law Judge Benjamin Schlesinger for hearing in w
the purpose of determining the amount of backpay the discrimi
due the discriminatees. also from A
On April 11, 1979, the Administrative Law Judge ego' and/or
issued the attached Supplemental Decision. There- and severall
after, Respondent Amboy Baking, Inc.. filed excep- judgment of
tions and a supporting brief. was amendi
Pursuant to the provisions of Section 3(b) of the Amboy klle
in BrooklynNational Labor Relations Act, as amended, the Na- neither ansv
tional Labor Relations Board has delegated its au- the hearing.
thority in this proceeding to a three-member panel. briefs: howl
The Board has considered the record and the at- waived filinj
tached Supplemental Decision in light of the excep- argument at
tions and brief and has decided to affirm the rulings,
findings, and conclusions of the Administrative Law
Judge and to adopt his recommended Order.
At the co
~~~~ORDER ~gels had not
granted the
Pursuant to Section 10(c) of the National Labor ment agains
Relations Act, as amended, the National Labor Rela- the dates of
tions Board adopts as its Order the recommended Or- immediately
der of the Administrative Law Judge and hereby or- addition co
set forth in
'227 NLRB 1597 (1977).
N L RB v. Hot Bagels and Donuts of Staten Island. Inc. 77 4112, Octo- The allegati
ber 13, 1977. at the hearing
129
he Respondents. Hot Bagels and Donuts of
nd, Inc.. and Amboy Baking. Inc.. Staten
w York. shall take the action set forth in
commended Order.
SUPPLEMENTAL DEC(ISION
1. PREIIMINARY SIAsi MINI 1
S(tHILSIN1R. Administrative Law Judge: O()n
1977, the National Labor Relations Board is-
sion and Order in which it found, in part, that
and Donuts of Staten Island. Inc. (Hot Bagels)
tion 8(a)(3) and (i) of the National Labor Rela-
s amended, b discharging Carlos Rivera. Au-
ron. and Carlos Suarez on November 18. 1975:
no on November 21. 1975: and Frank Sorensen
er 25, 1975, because of their organizational ac-
ehalf of the Baker, and Confectioner Workers
.merica. Local 3, AFL ('IO0 (227 NLRB 1597
e Board directed that Hot Bagels offer the five
ees reinstatement and make them whole for an)
they may have suffered. in the manner set torth
ioolworrh Compin,. 90 NLRB 289 (1950). to-
6-percent interest per annum thereon in accord-
lsis Plumbing & Heating Co.. 138 NLRB 716
October 13. 1977. the United States Court of
the Second Circuit entered its judgment enforc-
ie Board's Order.
r. on March 17. 1978, the Regional Director for
issued a backpay specification and notice of'
'hich he alleged that there was due and owing to
natees backpay not only from Hot Bagels but
mhov Baking. Inc.. which he alleged is an aller
successor of Hot Bagels and therefore jointl?
I, liable to cmply with the Board order and
fthe court of appeals. The backpav specification
ed on June 9. 1978. On September 27. 1978.
I its answer. and a hearing was held before me
i. New York. on March 14. 1979. Hot Bagels
wered the backpay specification nor appeared at
All parties were afforded the opportunit 3 to file
ever, both Amboy and the General Counsel
gof briefs and requested that I rely on their oral
the conclusion of the hearing.
11. ISSt S ANt) DIS(A'SSION
mmencement of the hearing. because Hot Ba-
t filed an answer to the backpay specification. I
General Counsel's Motion for Summary Judg-
st Hot Bagels for the period commencing with
fthe discharges to the end of December 1976,
before Amboy commenced doing business. In
iunsel for Amboy stipulated that the amounts
the specification. as amended at hearing bx the
on that Ambo 5 is the alter ,.g, ot Hot Bagels ,as ithdr.san
244 NLRB No. 22
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
General Counsel, were accurate in all respects.' The only
disputed issues in this proceeding are: (I) whether Amboy
is the successor to Hot Bagels and, if so. whether it should
be responsible for paying the backpay specified by the Gen-
eral Counsel; and (2) whether the former positions or sub-
stantially equivalent positions of employment existed so
that the discriminatees should have been offered immediate
and full reinstatement by Amboy.
A. The Successorship Issue
Hot Begals ceased doing business during the first week of
December 1976, at which time it employed approximately
16 cashiers, clerks, porters, salespersons, and employees
who made and baked bagels, donuts, cookies, pies. cakes,
and pastries. Hot Bagels had steadily been losing business
and money and became unable to make its monthly install-
ment payments on a loan from the Community National
Bank and Trust Company of New York (herein called the
bank). The bank, having secured its loan by a lien upon all
of the physical assets of Hot Bagels, foreclosed, and at an
auction, the bank was the successful bidder. Approximately
2 weeks later, it contacted Marvin Kalkstein, Hot Bagel's
president, to see whether he would be interested in going
back into business by entering into a lease agreement with
the bank for the assets of Hot Bagels (then owned by the
bank). In that way Kalkstein, who had personally guaran-
teed the loan and was fearful of losing his family home,
which was further collateral for the loan, could remain in
business and pay off the outstanding balance on the still
due loan. Kalkstein agreed, incorporated Amboy at the end
of December 1976, and commenced doing business as Am-
boy on January 3, 1977, on the premises which Hot Bagels
had vacated 3 weeks before, using the same equipment
which Hot Bagels had left behind.
Kalkstein, the sole shareholder and president, vice pres-
ident, and secretary-treasurer of Hot Bagels, who was in
direct control and was personally responsible fbr its opera-
tion, became the sole shareholder of Amboy, was its pres-
ident, and was in direct control of and personally respon-
sible for its operation. Of the approximately 16 employees
of Hot Bagels in early December 1976, at least II were
hired by Amboy at its inception. Among them was Jack
Graziano, formerly a unit employee at Hot Bagels, who had
less seniority and apparently was less skilled then Brentano.
The business conducted by Amboy was substantially the
same as, although smaller than, the business of Hot Bagels,
which for a substantial period of time conducted both a
wholesale and retail operation. The wholesale operation
was principally devoted to the sale of bagels and dough-
nuts. As business decreased during 1976, five of the six re-
tail stores which Kalkstein owned, either solely or in part-
nership with others, were closed or Kalkstein sold out to his
2 Upon review of the record, I find that there was a 3-week hiatus between
the closing of Hot Bagels and the opening of Amboy. Since no work was
available to the discriminatees for that time period, and because the essence
of a backpay proceeding is an attempt to place the discriminatees in the
same position as if they had not been discriminated against. I conclude that
they would not have worked for those 3 weeks. Accordingly. in my findings
of fact, I have reduced the amount of backpay due and owing and amend my
grant of summary judgment against Hot Bagels accordingly.
partners. Simultaneously, the wholesale operation of Hot
Bagels collapsed. and by the time that the bank foreclosed.
Hot Bagels' business was exclusively a retail business. Am-
boy, too, was solely a retail operation, continuing to bake
(albeit on a smaller scale) the same kinds of bagels. pies.
doughnuts. cookies, pies. cakes, and pastries as were previ-
ously offered by Hot Bagels to its customers. Amboy also
sold dairy goods, a variety of meats, delicacy fish, salads,
potato chips and pretzels. sodas and juices. and breads all
sold by Hot Bagels before its doors were closed.
The Board stated in Miami Industrial ruck.s, Inc., and
Bobcat of Dayt'on, Inc., 221 NLRB 1223, 1224 (1975). that:
"The keystone in determining successorship is whether
there is substantial continuity of the employing industry ...
the Board looks to several factors [in this regard] .... These
factors include whether there is substantial continuity in
operations, location, work force, working conditions, super-
vision, machinery, equipment, methods of production.
product, and services." Having examined these factors. I
conclude not only that there is substantial continuity of the
employing industry but also that the operation of Amboy,
as Kalkstein candidly admitted, was in early January 1977
identical to that of Hot Bagels only 3 weeks before. If a
customer had entered Amboy's retail establishment on
January 3. 1977 ("when we reopened," testified Kalkstein).
I doubt very much that he would have recognized any dill
ference between the operation of the store prior to the fore-
closure and after Amboy commenced doing business.
Amboy argues, however, that about 6 months after it
began its business, it changed its operation: that it no
longer makes bagels from beginning to end, but buys bagels
already preformed but not precooked; that it purchases
rather than makes its doughnuts: that it now is engaged in
catering affairs: that it makes all of its salads on the prem-
ises rather than buying premade salads, as Hot Bagels did:
that it is now kosher; and that it now offers a greater variety
of delicacies to its customers. I do not believe that these
later changes are relevant to the issue of whether Amboy
should be bound for the obligations of Hot Bagels. which is
no longer in existence. There has been a gap of time be-
tween Hot Bagels and Amboy of approximately 3 weeks.
and the relevant issue is whether that gap is sufficiently
narrow to be bridged, linking the obligations of Hot Bagels
to Amboy. If the obligation of the successor to assume the
obligations of its predecessor is firmly established in law, as
I believe it is, a successor delicatessen is no less obligated as
a successor merely because it later sells Heinz products
rather than Del Monte. The successorship relationship does
not rise or tall on the critical analysis of whether a salami is
kosher or Genoese. Fundamentally, Amboy was and is a
delicatessen, specializing in donuts and bagels; that is ex-
actly the same business as Hot Bagels conducted. Since I 11
of 16 former employees of Hot Bagels were rehired by Am-
boy, there is a substantial continuity of employees and the
Supreme Court's and the Board's successorship concept has
clearly been satisfied. N.L.R.B. v. William J. Burns. The
International Detective Agency, Inc., 406 U.S. 272 (1972):
TKB International Corporation r/a Hendricks-Miller Tpo-
graphic Company, 240 NLRB 1082 (1979).
Having found that Amboy is a successor to Hot Bagels.
the question is whether it ought to be held responsible for
the obligations of Hot Bagels under the Board's prior deci-
130
HOT BAGELS & DONUTS
sion. The normal rule is that a successor, who purchases the
property of another with the knowledge of the existence of
a violation of the Act, is responsible to assume the obliga-
tions of its predecessor or transferor. Golden State Bottling
Company, Inc.. formerly Pepsi-Cola Bottling Compan' of
Sacramento v. N.L.R.B.. 414 U.S. 168 (1973); Perma Vinrl
Corporation, Dade Plastics Co. and United States Pipe and
Foundry Company, 164 NLRB 968 (1967). Amboy argues
that, because it did not purchase the assets of Hot Bagels, it
should not be found to have assumed the backpay obliga-
tions and responsibilities of Hot Bagels. The argument has
no merit. The finding of a successor relationship is not
grounded upon a purchase per se. See, for example,
N.L.R.B. v. Burns International, etc., supra, Merchants
Home Delivery Services, Incorporated. 230 NLRB 290
(1977). In any event, Hot Bagels owned and had continuing
use of its equipment, which was security for an outstanding
loan to the bank. After the bank foreclosed, the bank then
owned the equipment; however, by reason of the leaseback
of the equipment, Amboy had full use of the equipment and
merely paid as rental, installments to pay the outstanding
loan balance. The bank agreed that, upon Amboy's pay-
ment of the entire amount of the loan, the equipment would
revert to Amboy's ownership. As a result. when Amboy
started its business, it essentially assumed the very obliga-
tion that was formally Hot Bagels', with the resulting own-
ership of Hot Bagels' machinery and equipment, free and
clear. Admittedly, there is a distinction between leasing
equipment and owning it, however secured. However, in
this case, it is a distinction without a difference, especially
for the purposes of determining a successor relationship. I
conclude that Amboy is bound by the provisions of the
Board's Order and the court's judgment and that it is re-
sponsible for the backpay due and owing to the discrimi-
natees.
B. The Right To Reinstatement
Although I have held that the later change of Amboy's
operations is not relevant to the issue of its successorship
status, it becomes relevant to the issue of whether the
changes of the operations of Amboy were such that the jobs
formerly held by the discriminatees, or even substantially
equivalent positions, no longer existed. If they did not. Am-
boy is not responsible for offering reinstatement to the dis-
criminatees. At the close of the hearing General Counsel
conceded that, because Amboy's bagel production was so
minimal that it could be handled solely by Kalkstein, the
former positions of Bultron, a kettleman, and Rivera, solely
a bagel baker, no longer existed nor was there similarly
substantial employment available for them. However, Am-
boy employed persons who performed the services of por-
ters; that was Suarez' job. Amboy continued to make
doughnuts; Sorensen was an accomplished drier and fin-
isher. Brentano was skilled in all of the jobs at Hot Bagels
and clearly could have filled any of Amboy's employment
positions, had they been offered. Further, Brentano was a
highly skilled bagel and doughnut baker, which is exactly
what Jack Graziano was hired to do. Graziano remained in
the employment of Amboy until the beginning of 1978 as
an all-round employees who had a special knowledge of
doughnut baking. Therefore, Amboy was clearly required
to offer reinstatement to Suarez, Sorensen (until only Feb-
ruary 1978), and Brentano, and its liability to them contin-
ues.
On the basis of the foregoing rulings and the entire rec-
ord. and my observation of the demeanor of the witnesses, I
make the following:
FINDINGS OF FACT AND CON(II.'SI(ONS OF LAW
1. The backpay periods involved are as follows:
Carlos Rivera
Carlos Suarez
Augustine Bultron
Jack Brentano
Frank Sorensen
11/18/75 -12/31/76
11/18/75 12/31/78
11/18/75-12/31/76
11/21/75 12/31/78
11/25/75 2/78
2. The measure of gross pay which would have been
earned by each discriminatee is his weekly rate of pa,, as set
forth below computed on a calendar quarterly basis:
Carlos Rivera $150
Carlos Suarez 150
Augustine Bultron 150
Jack Brentano 330
Frank Sorenson 196
3. On the basis of the foregoing, and the concessions of
the Regional Director in the backpay specification ith re-
gard to the interim earnings of each discriminatee. I con-
clude that the obligation to make the discriminatees whole
in accordance with the Board's Order shall be fulfilled h
paying them the amount set forth in the recommended Or-
der attached as Appendix.
4. Amboy Baking, Inc., which commenced doing busi-
ness on January 3. 1977. is the successor of Hot Bagels and
Donuts of Staten Island, Inc., and is responsible in full for
the amount of backpay due and owing hereunder. Hot Ba-
gels and Donuts of Staten Island, Inc., is responsiblejointl
with Amhboy Baking, Inc.. for that portion of the hackpaN
period ending with the tenth week of the fourth quarter of
1976.
On the basis of the foregoing findings and conclusions. I
make the following recommended:
ORDER3
Hot Bagels and Donuts of Staten Island, Inc.. and Am-
boy Baking, Inc.. and their officers, agents, successors. and
assigns, shall jointly and severally pay and be responsible
for backpay to Carlos Rivera in the sum of $8,135.12. Au-
gustine Bultron in the sum of $8,250. Carlos Suarez in the
sum of $7.286.75, Jack Brentano in the sum of $11,566.92.
and Frank Sorensen in the sum of $199.21: and Ambov
Baking. Inc.. and its officers, agents. successors. and assigns,
shall also pay and be responsible for backpay to Carlos
Suarez in the additional sum of $13.836, and Jack Brentano
in the additional sum of $14,516.98. with interest on all
sums of 6 percent per annum in accordance with Istv
Plumbing & Heating Co.. 138 NLRB 716 (1962), less FICA
and state. local, and Federal income taxes which are re-
quired to be deducted.
In the event no exceptions are filed as provided by Sec. 10246 oi the
Rules and Regulations of the National Labor Relations Board. he findings.
conclusions, and recommended Order herein shall. as provided in Sec 102 48
of the Rules and Regulations. be adopted h the Board and become its
findings, conclusions. and Order, and all objections thereto shall be deemed
waived for ail purposes.
131
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Carlos Rivera:
Calendar Quarter
1975- 4Q (6 wks.)
1976- 1Q
2Q
3Q
4Q (10 wks.)
Augustine Bultron:
1975- 4Q (6 wks.)
1976- 1Q
2Q
3Q
4Q (10 wks.)
APPENDIX
Gross Backpay
$ 900
1,950
1,950
1,950
,500
$ 900
1,950
1,950
1,950
1,500
Earnings Interim
$ 75.53
39.53
0
0
0
0
0
0
0
0
Backpay Net
$ 824.47
910.65
1,950.00
1,950.00
1,500.00
$ 8,135.12
$ 900.00
1,950.00
1,950.00
1,950.00
1,500.00
$ 8,250.00
Carlos Suarez:
1975- 4Q (6 wks.)
1976- 1Q
2Q
3Q
4Q (10 wks.)
1977- 1Q
2Q
3Q
4Q
1978- 1Q
2Q
3Q
4Q
$ 900
1,950
1,950
1,950
1,500
1,950
1,950
1,950
1,950
1,950
1,950
1,950
1,950
$ 458.70
0
0
0
404.55
976.62
887.38
0
0
0
0
0
0
$ 441.30
1,950.00
1,950.00
1,950.00
1,095.45
973.38
1,062.62
1,950.00
1,950.00
1,950.00
1,950.00
1,950.00
1,950.00
$21,122.75
Jack Brentano:
1975- 4Q (6 wks.)
1Q
2Q
3Q
4Q (10 wks.)
1977- 1Q
2Q
3Q
4Q
$1,650
4,290
4,290
4,290
3,300
$ 4,290
4,290
4,290
4,290
$ 345.21
712.43
2,668.11
1,395.75
1,131.58
$ 2,589.26
2,646.76
2,100.00
2,100.00
$ 1,304.79
3,577.57
1,621.89
2,894.25
2,168.42
$ 1,700.74
1,643.24
2,190.00
2,190.00
1978- 1Q
2Q
3Q
4Q
1,515.00
1,690.00
1,850.00
1,738.00
$26,083.90
4,290
4,290
4,290
4,290
2,775.00
2,600.00
2,440.00
2,552.00
132