Howard Johnson, Inc., of New Jersey

National Labor Relations Board - Board Decisions

Feb 26, 1962

135 N.L.R.B. 1260 (N.L.R.B. 1962)

1260 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
and (2) of the Act, I shall recommend that the Respondent notify Pacific and
Engineers , in writing , and serve a copy upon Sands , that the Respondent has no
objection to Sands' employment by Pacific and Engineers individually or in their
capacity as a joint venture . It is further recommended that the Respondent make
Sands whole for any loss of pay he may have suffered as a result of the discrimina-
tion against him . The amount of backpay in'each case shall be computed and paid
in accordance with the Board 's Woolworth formula. F. W. Woolworth Company,
90 NLRB 289. Respondent's backpay liability will terminate 5 days after notifica-
tion of Pacific and Engineers that it has no objection to Sands' employment.
Upon the basis of the foregoing findings of fact and upon the entire record in
the case, I make the following:
CONCLUSIONS OF LAW
1. Pacific and Engineers , individually and as a joint venture , are employers
within the meaning of Section 2(2) of the Act.
2. Pipeline Contractors Association, engaged in collective bargaining for, and the
negotiation of collective -bargaining agreements on behalf of, its members, including
Pacific and Engineers , is an employer within the meaning of Section 2(2) of the Act.
3. The Respondent is a labor organization within the meaning of Section 2(5)
of the Act.
4. By causing the Employer herein to discharge its employee , Lloyd D. Sands, in
violation of Section 8(a)(3) of the Act, Respondent has engaged in and is engaging
in unfair labor practices within the meaning of Section 8(b)(1)(A) and (2) of
the Act.
5. The aforesaid unfair labor practices affect commerce within the meaning of
Section 2(6) and (7) of the Act.
[Recommendations omitted from publication.]
Howard Johnson , Inc., of New Jersey and Howard Johnson Com-
pany and Hotel and Restaurant Employees and Bartenders
Union , Local 4, Hotel and Restaurant Employees and Bar-
tenders International Union , AFL-CIO. Case No. 22-CA-977.
February 26, 1962
DECISION AND ORDER
On December 8, 1961, Trial Examiner Sidney Lindner issued his
Intermediate Report in the above-entitled proceeding, finding that the
Respondent had engaged in and was engaging in certain unfair labor
practices and recommending that it cease and desist therefrom and
take certain affirmative action, as set forth in the Intermediate Report
attached hereto. Thereafter the Respondent filed exceptions to the
Intermediate Report and a supporting brief.
Pursuant to the provisions of Section 3 (b) of the Act, the Board
has delegated its powers in connection with this case to a three-member
panel [Members Rodgers, Fanning, and Brown].
The Board has reviewed the rulings of the Trial Examiner made at
the hearing and finds that no prejudicial error was committed. The
rulings are hereby affirmed. The Board has considered the Intermedi-
ate Report, the exceptions and brief, and the entire record in the case,
and hereby adopts the findings, conclusions, and recommendations of
the Trial Examiner.
135 NLRB No. 128.
HOWARD JOHNSON, INC., OF NEW JERSEY, ETC. 1261
ORDER
Upon the entire record in this case, and pursuant to Section 10(c)
of the National Labor Relations Act, as amended, the National Labor
Relations Board hereby orders that the Respondent, Howard Johnson
Company, its officers, agents, successors, and assigns, shall:
1. Cease and desist from :
(a) Refusing to bargain collectively with Hotel and Restaurant
Employees and Bartenders Union, Local 4, Hotel and Restaurant
Employees and Bartenders International Union, AFL-CIO, as the
exclusive bargaining representative of employees in the appropriate
unit with respect to wages, rates of pay, hours of employment, or other
conditions of employment. The appropriate collective-bargaining
unit is :
All waiters, waitresses, cashiers, counter employees, cooks, porters,
kitchen help, and gift shop employees at the Employer's Milltown
Restaurant 8N, excluding office clerical employees, hostesses,
guards, professional employees, and supervisors as defined in the
Act.
(b) In any like or related manner interfering with, restraining, or
coercing employees in the exercise of the right to self-organization, to
form, labor organizations, to bargain collectively through representa-
tives of their own choosing, and to engage in other concerted activities
for the purpose of collective bargaining or other mutual aid or protec-
tion, or to refrain, from any and all such activities, except to the extent
that such rights may be affected by an agreement requiring member-
ship in a labor organization as authorized in Section 8(a) (3) of the
Act.
2. Take the following affirmative action which the Board finds will
effectuate the policies of the Act : _
(a) Bargain collectively, upon request, with Hotel and Restaurant
Employees and Bartenders Union, Local 4, Hotel and Restaurant Em-
ployees and Bartenders International Union, AFL-CIO, as the exclu-
sive representative of all employees in the aforesaid appropriate unit,
and, if an understanding is reached,.embody such understanding in a
signed agreement.
(b) Post at its Milltown Restaurant 8N copies of the notice attached
hereto marked "Appendix." 1 Copies of said notice, to be furnished
by the Regional Director for the Twenty-second region, shall, after
being duly signed by a representative of the Respondent, be posted
immediately upon receipt thereof, and be maintained by it for 60 con-
secutive days thereafter, in conspicuous places, including all places
1 In the event that this Order is enforced by a decree of a United States Court of
Appeals, there shall be substituted for the words "Pursuant to a Decision and Order" the
words "Pursuant to a Decree of the United States Court of Appeals, Enforcing an Order."
1262 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
where notices to employees are customarily posted. Reasonable steps
shall be taken to insure that said notices are not altered, defaced, or
covered by any other material.
(c) Notify the Regional Director for the Twenty-second Region,
in writing, within 10 days from the date of this Order, what steps
have been taken to comply herewith.
APPENDIX
NOTICE To ALL EMPLOYEES
Pursuant to a Decision and Order of the National Labor Relations
Board, and in order to effectuate the policies of the National Labor
Relations Act, as amended, we hereby notify you that :
WE WILL bargain collectively on request with Hotel and Res-
taurant Employees and Bartenders Union, Local 4, Hotel and
Restaurant Employees and Bartenders International Union,
AFL-CIO, as the exclusive representative of all our employees
in the following appropriate collective-bargaining unit, and, if
an understanding is reached, we will embody such understand-
ing in a signed agreement. The appropriate collective-
bargaining unit is :
All waiters, waitresses, cashiers, counter employees, cooks,
porters, kitchen help, and gift shop employees at our Mill-
town Restaurant 8N, excluding office clerical employees, host-
esses, guards, professional employees, and supervisors as
defined in the Act.
WE WILL NOT in any like or related manner interfere with, re-
strain, or coerce our employees in the exercise of the right to self-
organization, to form labor organizations, to join or assist Hotel
and Restaurant Employees and Bartenders Union, Local 4, Hotel
and Restaurant Employees and Bartenders International Union,
AFL-CIO, or any other labor organization, to bargain collec-
tively through representatives of their own choosing, and to
engage in other concerted activity for the purposes of collective
bargaining or other mutual aid or protection, or to refrain from
any or all such activities, except to the extent that such rights
may be affected by an agreement requiring membership in a
labor organization as authorized in Section 8(a) (3) of the Act.
HOWARD JOHNSON COMPANY,
Employer.
Dated---------------- By-------------------------------------
(Representative ) ( Title)
This notice must remain posted for 60 days from the date hereof,
and must not be altered, defaced, or covered by any other material.
HOWARD JOHNSON, INC., OF NEW JERSEY, ETC. 1263
Employees may communicate directly with the Board's Regional
Office, 614 National Newark Building, 744 Broad Street, Newark 2,
N.J., Tel. No.: MArket 4-6151, if they have any question concerning
this notice or compliance with its provisions.
INTERMEDIATE REPORT AND RECOMMENDED ORDER
STATEMENT OF THE CASE
Upon a charge and amended charge, duly filed by Hotel and Restaurant Em-
ployees and Bartenders Union, Local 4, Hotel and Restaurant Employees and Bar-
tenders International Union, AFL-CIO, herein called the Union, the General
Counsel of the National Labor Relations Board, by the Acting Regional Director
for the Twenty-second Region (Newark, New Jersey), issued a complaint dated
September 8, 1961, against Howard Johnson, Inc, of New Jersey 1 and Howard
Johnson Company, herein called Respondents, alleging that Respondents have en-
gaged in unfair labor practices affecting commerce within the meaning of Section
8(a)(1) and (5) and Section 2(6) and (7) of the National Labor Relations Act,
as amended, 61 Stat. 136 and 73 Stat. 519, herein called the Act. Copies of the
complaint and notice of hearing were duly served upon Respondents, in response
to which Respondents filed separate answers denying the unfair labor practices
alleged.
A hearing was held on October 11 and 12, 1961, at Newark, New Jersey, before
the duly designated Trial Examiner. All parties were represented by counsel at the
hearing and were given full opportunity to examine and cross-examine witnesses and
to introduce evidence bearing on the issues; they were also given opportunity for
oral argument at the close of the hearing and to file briefs and proposed findings
and conclusions of law. Briefs have been received and have been duly considered.
Upon the entire record in the case and upon observation of the demeanor of the
witnesses, I make the following:
FINDINGS OF FACT
1. THE BUSINESS OF THE RESPONDENTS
Howard Johnson, Inc., of New Jersey, referred to variously as Respondent and
New Jersey Corporation, was incorporated in the State of New Jersey on October
26, 1951. On June 30, 1961, the corporation filed with the office of the Secretary
of State of the State of New Jersey, a duly executed and attested consent in writing
to the dissolution of said corporation and a certificate of dissolution of Howard
Johnson, Inc., of New Jersey was thereupon issued.
Howard Johnson, Inc., of New Jersey during its corporate existence operated a
chain of restaurants in the State of New Jersey, including, among others, Restau-
rant 8N on the New Jersey Turnpike, located near the city of Milltown, State of
New Jersey, the only restaurant we are concerned with in this proceeding, where it
sold and distributed food, beverages, and other related products to the general public.
During the year ending June 30, 1961, the New Jersey Corporation in the course
and conduct of its business operations received gross annual revenue in excess of
$500,000. During the same period it purchased and caused to be delivered to its
Milltown Restaurant 8N, food and materials of a value in excess of $50,000 from
States of the United States other than the State of New Jersey.
Howard Johnson Company, a Maryland corporation herein referred to variously
as the Respondent and the Maryland Corporation, was organized under and exists
by virtue of the laws of the State of Maryland. It was incorporated on March 9,
1961. Upon the dissolution of the New Jersey Corporation on June 30, 1961, Mill-
town Restaurant 8N continued to be operated without break in time by the Maryland
Corporation? Since June 30, 1961, the Maryland Corporation in the course and
'The correct name as amended at the hearing , on motion of the General Counsel
' In 1951 the New Jersey Turnpike Authority entered into an agreement providing for
operation of Turnpike restaurants with Howard D Johnson Company, a Massachusetts
corporation, owned and controlled by Howard D. Johnson, his son Howard B. Johnson,
and his daughter Dorothy weeks, whereby the Massachusetts corporation was given the
right to operate the 14 restaurants, including Milltown Restaurant 8N, all located on
the New Jersey Turnpike The agreement contains an assignability clause, which although
it requires prior written permission from the Authority for assignment , precludes un-
1264 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
conduct of its business operations received gross revenue in excess of $500,000. Its
purchases for Milltown Restaurant 8N from June 1961 to September 1961 from
States of the United States other than the State of New Jersey 'exceed $8,000 and
on a projected basis to June 30, 1962, will exceed $50,000. It was stipulated at the
hearing and I find that for the period April 1961 to June 30, 1961, Howard Johnson,
Inc., of New Jersey was engaged in commerce within the meaning of the Act, and
Howard Johnson Company, the Maryland Corporation, was likewise engaged in
commerce within the meaning of the Act for the period June 30, 1961, to the date
of the hearing herein.
II. THE LABOR ORGANIZATION INVOLVED
Hotel and Restaurant Employees and Bartenders Union, Local 4, Hotel and
Restaurant Employees and Bartenders International Union , AFL-CIO, is a labor
organization admitting to membership employees of the Respondents.
III. THE UNFAIR LABOR PRACTICES
A. The corporate structures of Howard Johnson, Inc., of New Jersey and Howard
Johnson Company, a Maryland corporation; the transfer of assets; and the
identity of operation and control of the Respondents
The New Jersey Corporation was incorporated on October 26, 1951. There was
a total of 100 outstanding shares of stock in the New Jersey Corporation owned
as follows: Howard D. Johnson (father), 33 shares; Howard B. Johnson (son),
33 shares; Dorothy Weeks (daughter), 33 shares; and 1 share was owned by an
unnamed secretary.
On March 10, 1961, Howard Johnson Company was organized as a Maryland
corporation.
On May 16, 1961, Howard D. Johnson, Howard B. Johnson, and Dorothy Weeks
transferred all of the outstanding stock of 39 corporations, of which they were the
sole owners, included among which was the New Jersey Corporation, in exchange
for all of the then outstanding shares of common stock and common stock B
(2,200,000) of the Maryland Corporation.
On May 18, there was offered to the public via designated underwriters 660,000
shares of common stock, representing 30 percent of the outstanding voting stock of
the Maryland Corporation. Upon completion of the public offering the Johnsons
and Weeks owned 1,400,000 shares of common stock B and 140,000 shares of com-
mon stock which together represent 70 percent of the outstanding voting stock of
the Maryland Corporation.
The directors and executive officers of the newly organized Maryland Corporation
are Howard D. Johnson, chairman of the board, treasurer, and director; Howard B.
Johnson, president and director; Eugene Durgin, vice president and secretary; 3 John
Wyllie, vice president and treasurer; 4 Merle Perkins, controller; 5 and Directors
Charles Enders, Walter Giblin, and William Martins In addition the Maryland
Corporation set up an executive management committee for the purpose, among
other things, of determining long range operating polices. The chairman of the
committee is Howard B. Johnson and there are five former officers of various
Johnson subsidiaries as well as Durgin and Wyllie included in its membership.
On June 19, 1961, the sole stockholder of the New Jersey Corporation, namely
the Maryland Corporation, by resolution approved a plan whereby the New Jersey
Corporation would be completely liquidated by transferring all its assets subject to
reasonable denial of granting permission to assign to a New Jersey corporation to be
organized by the operator, or to Howard D Johnson individually. In either event the
assignee must be a wholly owned subsidiary under the Massachusetts corporation's regu-
lar management or by Howard D. Johnson individually By an instrument of transfer
dated June 30, 1961, signed by Howard D Johnson, Howard B Johnson, and Dorothy
Weeks, the operation of the Turnpike restaurants was assigned to the Maryland
Corporation
3 Durgin had been since 1956 general counsel and vice president of many of the
Johnson corporations and Its subsidiaries He was vice president and secretary of the
New Jersey Corporation.
A Wyllie had been the principal accounting officer of most of the Johnson subsidiaries
since 1951.
5 Perkins since 1959 has been controller of most of the Johnson subsidiaries.
6 These three directors did not have any prior affiliation with the Johnson corporations
or its subsidiaries.
HOWARD JOHNSON, INC., OF NEW JERSEY, ETC. 1265
its liabilities to the Maryland Corporation. The said resolution was approved
June 21, 1961.
On June 30, 1961, , as heretofore noted, a certificate of dissolution of the New
Jersey Corporation was issued by the Secretary of State of the State of New Jersey.
On the same date, the trustees in dissolution of the New Jersey Corporation trans-
ferred its assets subject to its obligations and liabilities to the Maryland Corporation
in accordance with an "Instrument of Transfer" executed by the Johnsons and Weeks
as trustees in dissolution of the New Jersey Corporation.
Upon the dissolution of the New Jersey Corporation on June 30, 1961, the Mary-
land Corporation continued to operate Milltown Restaurant 8N without any break in
time. There was no closing of Milltown Restaurant 8N for alterations or for any
other reason.
Several witnesses called by the General Counsel who were employees at Milltown
Restaurant 8N before and after June 30, 1961, testified without contradiction that
there has not been any change in the basic operations of Milltown Restaurant 8N
during the entire period of their employment. It is contained in the same building;
it has the same furnishings; the sign on the outside of the building is the same; the
assignments and scheduling of waitresses and counter girls is the same; their uni-
forms are the same; the menus and the food served is the same; with the exception
of a hostess and manager the supervisory staff is the same; the same suppliers con-
tinue to supply Milltown Restaurant 8N; the packaging of food is the same; and
the ice cream flavors are the same. It was also stipulated at the hearing that the
signature "Howard D. Johnson" authorized to sign checks appeared on employees'
payroll checks before and after June 30, 1961.
B. The refusal to bargain
On February 24, 1961, the New Jersey Corporation and the Union entered into
an agreement for consent election approved by the Regional Director for the Twenty-
second Region, which provided for an election to be conducted by the Board on
March 7, 1961, among the employees in Milltown Restaurant 8N in the following
appropriate collective-bargaining unit:
All waiters, waitresses, cashiers, counter employees, cooks, porters, kitchen
help, and gift shop employees at Employer's Milltown, New Jersey (New
Jersey Turnpike 8N) Restaurant but excluding all office clerical employees,
hostesses, guards, professional employees, and supervisors as defined in the Act.
The tally of ballots cast in the election revealed that of approximately 48 eligible
voters, 30 votes were cast for the Union, 14 votes were against the Union, and there
were 2 challenged ballots.
On April 11, the Regional Director for the Twenty-second Region after investiga-
tion found the New Jersey Corporation's objections to conduct affecting the results
of the election lacking merit, overruled them in their entirety, and certified the
Union as the exclusive representative of the employees in the above-described
appropriate unit for the purposes of collective bargaining with respect to rates of
pay, wages, hours of employment, and other conditions of employment.
On May 8 and 23 and June 13, representatives of the Union met with the New
Jersey Corporation's representatives. The Union submitted a typewritten statement
of its demands at the first meeting and the parties thereafter discussed various
aspects of wages, hours , and working conditions.
It was stipulated at the hearing that at the June 13 negotiation meeting, the
Employer's representatives, Attorneys Rufus McDonald and Daniel Steele,? John
Hipson, presently a vice president of the Maryland Corporation and a member of its
executive management committee, but who was at the time of the June 13 meeting
vice president of Howard Johnson, Inc., of New York, a director of two or three
other Howard Johnson subsidiaries, and overseer of the New Jersey Corporation's
activities, and Mr. Cauldon, head supervisor of the New Jersey Corporation's Turn-
pike operation, agreed to make a study of the Union's proposed wage schedule and
statistics attached thereto and present its conclusions to the Union at the following
negotiation session.
4 Steele also attended the May 23 meeting. He testified that since May 8, 1961, he
has been employed by the Maryland Corporation as its labor relations director and labor
counsel on a full-time basis . For 16 years prior he acted as labor consultant for the
Howard Johnson corporations and subsidiaries. He stated he attended the negotiation
meetings with the Union as the representative of Howard D. Johnson, president and
treasurer of the New Jersey Corporation.
634449-62-vol. 135-81
'1266 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
On' July 6, the union representatives met with McDonald, Steele , Hipson, and
Cauldon. At the outset Hipson and Steele told the union representatives* that the
New Jersey Corporation had been liquidated and they therefore were unable to
continue negotiations on behalf of that corporation.8
Arnold Cohen, attorney for the Union, then said that a change in name or in
the corporate structure did not mean anything, and he hoped they would continue
to negotiate. He asked that he be advised within a week or 10 days regarding the
continuation of the negotiations . Hipson and Steele said they did not have authority
from the Maryland Corporation to enter into negotiations and therefore could not
commit themselves to further bargaining sessions.
Steele admitted that at the July 6 session he said he would contact the Maryland
Corporation regarding the Union's request to bargain. He qualified such admission
with the explanation that he was asked by a union representative if he would inquire
from the Maryland Corporation whether it would "recognize them as a successor
in the matter of negotiations , collective bargaining."
Steele testified he did not contact the Maryland Corporation as promised, because
he was otherwise engaged until July 14 on some union matters away from his office,
and since shortly thereafter the Maryland Corporation was notified by the Board
of the Union's charge alleging unfair labor practices, "it negated any further com-
pulsion or requirement or obligation to notify or recognize Local No. 4." When
advised by the Trial Examiner that the filing of the charge did not preclude further
collective bargaining, Steele acknowledged that this was correct, but stated in the
meantime it had come to his attention that the Maryland Corporation was not a
successor employer. No further meetings or bargaining sessions have been held
since July 6.
C. Contentions and conclusions
It is the General Counsel's contention raised at the hearing and as set forth in
his brief that the Maryland Corporation is a successor to the New Jersey Corpora-
tion and bound to recognize and bargain with the Union under the Board certifica-
tion and that both Respondents bargained in bad faith, all in violation of Section
8(a) (5) of the Act.
Since a request to bargain is an essential element and a condition precedent to
an employer's duty to bargain, we will deal first with this contention raised by
Respondent Maryland Corporation. It is settled law that a request for recognition
or to bargain need not follow a prescribed form so long as it is clear from the entire
situation that all essential elements of a valid demand are present.9 I have hereto-
fore found that when the parties met on July 6 and the Union was advised by Hipson
and Steele that they did not have authority from the Maryland Corporation to
enter into negotiations and therefore could not commit themselves to further ne-
gotiation sessions, the Union's attorney noted that a change in name or in corporate
structure did not mean anything and requested that he be advised within a week or
10 days if the negotiations started by the New Jersey Corporation would continue.
In the light of the relationship between Hipson, then a member of the Maryland
Corporation's executive management committee, which was setting policy for the
new corporation, and Steele, its labor counsel, I am convinced that they must have
known from Cohen's remarks that he, on behalf of the Union, was requesting the
Maryland Corporation to bargain. Indeed, Steele admitted that he would contact
the Maryland Corporation regarding the Union's request to bargain. Need the
request to be more specific be, made to one other than the labor counsel? I think
not. In Norwich Dairy Company, Inc., et at., 25 NLRB 1166, 1183, the Board
held that a demand on a president of a predecessor corporation who became presi-
dent of a new corporation which conducted the same business in the' same plant
with the same personnel was a continuing demand to the new corporation. I am
convinced and find from the above and the whole record that on July 6 Respondent
Maryland Corporation was aware that the Union was requesting it to bargain and
continue negotiations, and it therefore follows that its contention that there was
no specific request of it to bargain is without merit or substance.
We turn next to a resolution of the basic question herein, whether Respondent
Maryland Corporation is a successor employer to the New Jersey Corporation and
is therefore under a duty to bargain collectively. within the certification year, with
the Union as the duly certified representative of the employees in the appropriate
8 It was„stiuulated at the hearing that at no time during the prior negotiation meet-
ings did ;the New Jersey Corporation representatives mention the status of the legal entity
of the Maryland Corporation
9 Colony Materials , Inc., 130 NLRB 105 ; N.L R B. v. Barney's Supercenter, Inc., 296
F. 2d 91 (C.A. 3).
HOWARD JOHNSON, INC., 'OF NEW JERSEY, ETC. 1267
unit. The theory of successorship is that the new operator of the business falls
heir to the responsibilities and liabilities, if not privileges, of the original employer
that stem from the certification. The fundamental approach and test is whether
the "employing industry" remains essentially the same in terms of such factors as
location, equipment, personnel,'and mode of operation. It has been firmly estab-
lished by a long line of Board decisions sustained and enforced by courts of appeals
that where the "employing industry" remains essentially the same after a transfer
of legal ownership the certification continues for its normal operative period.10 The
Board in Cruse Motors, Inc., 105 NLRB 242 at 247, stated,
A mere change in ownership of the employment enterprise is not so unusual
a circumstance as to affect the certification. Where the enterprise remains
substantially the same, the obligation to bargain of a prior employer devolves
upon his successor in title. A purchaser in such a situation is a successor
employer... .
Indeed, no contention is made herein that the "employing industry" was not the
same after June 30, when the Maryland Corporation took over the operation of
Milltown Restaurant 8N and continued to operate it without break in time."
I find based on the uncontradicted testimony of the employee witnesses set forth
above, and on Hipson's testimony that "there was no change as far as the girls and
the restaurant is concerned," that Respondent Maryland Corporation took over Mill-
town Restaurant 8N on July 1 and continued to operate it without break in time as a
restaurant, the "employing industry."
But, contends Respondent Maryland Corporation, "we are a `publicly owned'
corporation" as distinguished from the "family owned" New Jersey Corporation with
complete distinction of the membership, duties, responsibilities, and obligations of
the directors and such factors alone are sufficient to establish that we are not a suc-
cessor employer. It contends further that the Maryland Corporation is comprised
of a five-member Board, distinct in identity, the majority of whom had no affiliation
with the New Jersey Corporation and in whom are vested all power of control and
management. As found hereinabove, however, after the public offering of the Mary-
land Corporation stock, the Johnson family 'retained 70 percent of its stock and
thereby retained its control of the Maryland Corporation. Moreover, the prospectus
of the Maryland Corporation, upon which Respondent relies in its brief, also dis-
closes that the Johnson family 12 "immediately after sale of the shares offered
[hereby] will own all of the outstanding Common Stock B and will be in control of
the Company 13 . .. through exercise of such control in the election of directors."
While it is true as Respondent points out in its brief that the board of directors
is comprised of five members, the majority of whom had no affiliation with the New
Jersey Corpoi ation, the record does not bear out its contention that all power of
control and management is vested in the board of directors. I have hereinabove
dealt with control. So far as management is concerned, the prospectus reveals that
it will be handled by a group of eight, which includes executive officers as well as
the five-man board of directors. Howard D. Johnson, in addition to his director's
duties, is chairman of the board and treasurer, Howard B. Johnson is president as well
as director. The other executive officers and the executive management committee
which was set up to determine operating policies is composed solely of former offi-
cials of the Johnson Corporations and its subsidiaries. Thus it appears clear that the
Johnson family by its ownership of 70 percent of the voting stock will not only retain
control of the Maryland Corporation, but by their positions as directors and execu-
tive officers and chairman of the executive management committee will continue to
manage and direct operation of the Maryland Corporation. To recognize and give
effect to Respondent's argument that because 30 percent of its outstanding common
stock is publicly owned it therefore is not a successor employer, would imply that
to N L R B. v. Lunder Shoe Corp , d/b/a Bruce Shoe Corp , 211 F. 2d 284 (C A. 1) ;
N.L R B v. Albert Armato, et al, 199 F. 2d 800 (C A. 7) ; NLRB. v Thomas Parran, Jr,
t/a Silver Spring Transit Company and/or Suburban Transit Company, 237 F. 2d 373
(C A 4) ; N L R.B v Blair Quarries, Inc, 152 F. 2d 25 (C A. 6) ; F G McFarland, et al,
d/b/a McFarland & Hullsnger, 131 NLRB 1068; Colony Materials, Inc., 130 NLRB 105;
Firchau Logging Company, Inc, 126 NLRB 1215; Ugite Gas Incorporated, 126 NLRB
494; Investment Building Cafeteria, 120 NLRB 38
n All restaurants on the New Jersey Turnpike in accordance with the agreement be-
tween the New Jersey Turnpike Authority and the operator must remain open 24 hours
a day
12 Referred to in the prospectus as the selling stockholders.
13 Company is referred to in the prospectus as the Howard Johnson Company, the
Maryland Corporation.
1268 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
the Board should not apply the Act and its precedents to corporations like General
Motors, General Electric, United States Steel, and Columbia Broadcasting System.14
I do not accept this argument.
Another contention raised in its brief is that there was no proof adduced that
Respondent Maryland Corporation assumed any obligation as to the Board's certifi-
cation running to certain classifications of employees of the New Jersey Corporation,
therefore it is not a successor liable under the certification against the seller. There
is no merit to this contention. The short answer is that even if Respondent Maryland
Corporation specifically provided by contract that it did not assume the Board certifi-
cation obligations of the New Jersey Corporation, it could not insulate itself from the
Board's certification, for it is well established that private parties may not by con-
tract void an obligation imposed by a Federal law.15
I find from all of the above and the whole record that Respondent Maryland Cor-
poration is the successor employer to the New Jersey Corporation. In Barker
Automation, Inc., et al., 132 NLRB 794, a New York Corporation, a subsidiary of the
Waterman Pen Company, Ltd., Montreal, Canada, purchased the assets of the Barker
Companies and 30 percent of the purchase price was payable in Waterman Pen
Company stock. This stock is also publicly owned. Following the sale, the corporate
organizations of the Barker Companies were dissolved. The purchasing company
moved to dismiss the petition asserting as grounds that the companies after being
sold in a bona fide transaction were dissolved, were no longer in existence, and that
since the sale, the operation of the plants involved had so changed that the units
described in the Board's decision no longer existed. The Board, denying the motion,
stated, "Where, after a Direction of Election has been issued, the business involved
is sold, but there is no change in any essential attribute of the employment relation-
ship, the direction is to be construed as providing for an election among the employ-
ees of the successor."
Another contention raised by Respondent Maryland Corporation in its brief is
that the appropriate unit certified by the Board has been drastically altered and the
percentages show that it no longer consists of "substantially the same employees"
as alleged in the complaint, therefore the purchaser of a business is not required to
deal with a certified union where the former employees constitute a minority of
present employees of the merged operations. Respondent further notes in its brief
that the number of employees in the unit after it took over increased to 76 and only
34 or 44 percent of the original eligible voters were in the unit on July 2, and on
October 8 there were 27 or 46.5 percent of the original eligible voters out of a unit
then comprising 58. I find no merit in this contention. The changes noted by
Respondent do not impress me as other than minor, particularly since we are dealing
here with the restaurant industry notorious for its turnover and for its seasonal em-
ployment. Even in cases where the changes of personnel in the unit have been larger,
the Board has found that this was not an impediment to the certification carrying over
to the new employer. In Royal Brand Cutlery Company, a Division of Brockelman
Brothers Inc., 122 NLRB 901, the Board ordered a successor employer to bargain
with a certified union for the employees in an appropriate bargaining unit where an
entire warehouse department of 55 employees was retained by the predecessor em-
ployer. The Court of Appeals for the Seventh Circuit, dealing with the problem of
turnover in personnel in N.L.R.B. v. Armato, supra, enforced the Board's order to
bargain against a successor company where its work force had increased during the
time it took over the operation, so that at the time of the refusal to bargain it was
composed of 8 employees who were in the original appropriate bargaining unit and
17 newcomers. In its opinion the court stated:
The very nature of a certification of a union as bargaining agent for a group of
employees impels the conclusion that a mere change ir. employers does not oper-
ate to destroy the effectiveness of the certification. It is an official pronounce-
ment by the Board that a majority of the employees in a given work unit desire
that a particular organization represents them in their dealings with their em-
ployer. There is no reason to believe that the employees will change their atti-
tude merely because the identity of their employer has changed.
Furthermore, the Supreme Court in Ray Brooks v N.L.R.B., 348 U.S. 96, held that
an employer must, absent unusual circumstances,16 honor a Board certification for
a reasonable period, ordinarily 1 year.
14 Involved in cases where the Board asserted jurisdiction
15 J I. Case Company v. N.L.R B , 321 U.S. 332; National Licorice Company v.
N L R.B., 309 U. S. 350.
161 do not find the unusual circumstances set forth in the Court's opinion present in
the instant case.
'HOWARD JOHNSON, IN., OF NEW JERSEY, ETC. 1269
Finally, Respondent Maryland Corporation contends in its brief that since the
New Jersey Turnpike Authority being a body corporate and politic established
pursuant to•chapter 545 of the New Jersey laws of 1948 and under Section 2(2) of
the Act specifically exempted from the Board's jurisdiction as a political subdivision
of the State,, and since it is engaged in the execution of the Authority's functions and
is "an integral part" of the Authority, it is the "alter ego" and likewise is. entitled
legally and equitably to the exemption afforded a political subdivision of the State.
As I interpret the record, particularly the agreement providing .for operation of
Turnpike restaurants, the status of Respondent Maryland Corporation as the suc-
cessor of the New Jersey Corporation is that of an Authority contractor and not
that of an agent of the Authority,. Furthermore, the restaurant employees are hired
and fired and paid by the Respondent Maryland Corporation and under its direction,
control, and supervision, unlike the employees (toll collectors) directly employed by
the Authority in the New Jersey Turnpike Authority case, 33 LRRM 1528, cited in
the brief. In this regard it is interesting to note that the Board has asserted jurisdic
tion in cases involving employees of restaurants on the Indiana Toll-Road, see
Interstate Co., Glass House Restaurants,, Indiana Toll Road, 125 NLRB 101, and the
West Virginia Turnpike, see The Interstate' Company, 118 NLRB 476.17 I find no
merit in this contention.
Accordingly, I find from the foregoing and the record as a whole that the Respond-
ent Maryland Corporation by refusing to bargain` with the Union, on and after
July 6, 1961, has engaged in unfair-labor- practices within the meaning of Section
8(a)(5) of the Act, and by such conduct has"interfered with, restrained, and coerced
its employees in the exercise of the rights guaranteed by Section 7 of the Act within
the 'meaning of Section 8 (a) (1) thereof. ,
Assuming arguendo that the failure of Respondent. New Jersey Corporation to
notify the Union of its pending dissolution and the organization of the Maryland
Corporation, while going through the motions of bargaining, is bad -faith as alleged
in the complaint, it would serve no useful purpose to make a finding with respect
thereto or to prescribe a remedy therefor. As hereinabove found the New Jersey
Corporation was completely and legally dissolved and has disposed of all of its
assets to the Maryland Corporation. The violations herein found can effectively and
best be remedied by ordering Respondent Maryland Corporation to bargain col-
lectively with the Union at its request and with respect to wages, hours, and working
conditions and, if an understanding is reached, embody such understanding in a
signed agreement. It is my opinion that the purpose of the Act will thereby be
sufficiently effectuated.
IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE
The activities of Respondent Maryland Corporation set forth in section III, above,
occurring in connection with its business operations described in section I, above,
have a close, intimate, and substantial relation to trade, traffic, and commerce among
the several States and tend to lead to labor disputes, burdening and obstructing
commerce and the free flow thereof.
V. THE REMEDY
Having found that Respondent Maryland Corporation has engaged in unfair labor
practices, I will recommend that it cease and desist therefrom and that it take certain
affirmative action designed to effectuate the policies of the Act.
It has been found that Respondent Maryland Corporation has refused to bargain
collectively with the Union as the exclusive representative of the employees in the
appropriate unit. I shall therefore recommend that Respondent Maryland Corpo-
ration, upon request, bargain collectively with the Union as such representative and in
the event an understanding is reached, embody such understanding in a signed
agreement.
It will also be recommended that Respondent cease and desist from in any like
or related manner infringing upon the rights of employees guaranteed in Section 7
of the Act.
Upon the basis of the foregoing findings of fact and upon the entire record in
the case the Trial Examiner makes the following:
17 The Indiana Toll Road Commission and the West Virginia Turnpike Commission like
the New Jersey Turnpike Authority were established by net of legislature. See Indiana
Statutes, sections 36-3202, 36-3203; and West Virginia Code of, 1955, article 16A-see-
tions 1659(1) (3).
1270 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
CONCLUSIONS OF LAW
1. Hotel and Restaurant Employees and Bartenders Union , Local 4, Hotel and
Restaurant Employees and Bartenders International Union , AFL-CIO, is a labor
organization within the meaning ' of Section 2(5) of the Act:
2. Howard Johnson Company is an employer within the meaning of Section 2(2)
of the Act.
3. All waiters , waitresses , cashiers , counter employees , cooks , porters, kitchen
help, and gift shop employees employed at Respondent Maryland Corporation's
Milltown , New Jersey (New Jersey Turnpike 8N), restaurant but excluding all office
clerical employees , hostesses , guards, professional employees , and supervisors as
defined in the Act constitute a unit appropriate for the purposes of collective bar-
gaining within the meaning of Section 9(b) of the Act.
4. The above-named labor organization was on April 11, 1961, and at all times
since has been the exclusive collective -bargaining representative of all the employees
in the aforesaid appropriate unit for the purposes of collective bargaining within the
meaning of Section 9(a) of the Act.
5. Respondent Howard Johnson Company from July 6 , 1961 , and at all times
thereafter, by refusing to bargain collectively with the aforesaid labor organization
as the exclusive collective -bargaining representative of all employees in the appro-
priate unit , has engaged in and is engaging in unfair labor practices within the
meaning of Section 8(a) (5) of the Act.
6. By the aforesaid refusal to bargain,' Respondent Howard Johnson Company has
interfered with , restrained , and coerced its employees in the exercise of the rights
guaranteed by-Section 7 of the Act and has thereby engaged in unfair labor prac-
tices within the meaning of Section 8 (a) (1) of the Act.
7. The aforesaid unfair labor practices are unfair labor practices affecting com-
merce within the meaning of Section 2(6) and (7) of the Act.
[Recommendations omitted from publication.]
Bonnar-Vawter, Incorporated and Rockland Printing Specialties
& Paper Products Union, Local 643, a/w International Print-
ing Pressmen & Assistants' Union of North America, AFL.-
CIO. Case No. 1-CA-3896. February 26, 1962
SUPPLEMENTAL DECISION AND ORDER
On September 29, 1960, the Board issued a Decision and Order in
the above-entitled case, finding that the Respondent had discriminated
against certain named employees in violation of Section 8(a) (1) and
(3) of the Act. Thereafter, the Board's Order was enforced by the
United States Court of Appeals for the First Circuit and the decree
was entered on April 26,1961. The decree provided, inter alia, that
the Respondent make whole the employees named therein for any
loss of pay suffered by reason of Respondent's discrimination against
them. On August 1S, 1960, the Regional Director for the First Re-
gion issued backpay, specifications and on September 215, 1961, the
Respondent filed an answer thereto. Upon appropriate notices issued
by Regional Director, a hearing was held before Trial Examiner Phil
Saunders for the purpose of determining the amounts of backpay due
the claimants.
s,On December 8, 1961, the Trial Examiner issued his Supplemental
Intermediate Report, which is attached hereto, in which he found the
135 NLRB No. 125.