Live Oak Skilled Care & Manor

National Labor Relations Board - Board Decisions

Dec 28, 1990

300 N.L.R.B. 1040 (N.L.R.B. 1990)

1040
300 NLRB No. 141
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
1 No exceptions were filed to the judge’s findings that the Respondent vio-
lated Sec. 8(a)(5) and (1) or that these unfair labor practice charges should
not be deferred to the parties’ contractual grievance-arbitration procedure.
2 In Transmarine, the Board ordered an employer that had unlawfully re-
fused to bargain over the effects of its plant closure decision to, inter alia, pay
unit employees at their normal rate of pay beginning 5 days after the Board’s
decision until the first of four events: (1) an effects bargaining agreement was
reached; (2) a bona fide bargaining impasse was reached; (3) the union failed
to timely request or commence bargaining; or (4) the union failed to bargain
in good faith. Id. The Board further specified that ‘‘in no event shall this sum
be less than these employees would have earned for a 2-week period at the
rate of their normal wages when last in the Respondent’s employ.’’ Id.
3 Because the Union had a contractual entitlement to this degree of advance
notice, and because no exceptions have been taken to the finding that the Re-
spondent violated Sec. 8(a)(5) and (1) by failing to give notice in advance of
the decision to transfer, we are not presented with the issue decided in Los
Angeles Soap Co., 300 NLRB 289 (1990), and Willamette Tug & Barge Co.,
300 NLRB 282 (1990), concerning notice requirements for the purposes of
bargaining over the effects of a sale.
Santa Cruz Convalescent Hospital, Inc., d/b/a Live
Oak Skilled Care & Manor and Hospital and
Health Care Workers Union, Local 250, Serv-
ice Employees International Union, AFL–CIO.
Case 32–CA–9933
December 28, 1990
DECISION AND ORDER
BY CHAIRMAN STEPHENS AND MEMBERS
CRACRAFT AND DEVANEY
On August 9, 1989, Administrative Law Judge Tim-
othy D. Nelson issued the attached decision. The Act-
ing General Counsel and Charging Party filed excep-
tions and supporting briefs.
The National Labor Relations Board has delegated
its authority in this proceeding to a three-member
panel.
The Board has considered the decision and record in
light of the exceptions and briefs and has decided to
affirm the judge’s findings,1 and conclusions and to
adopt the recommended Order, as modified.
AMENDED REMEDY
The judge found that the Respondent violated Sec-
tion 8(a)(5) and (1) by failing to timely notify the
Union of its decision to transfer its Santa Cruz con-
valescent hospital to Live Oak Care Center, Inc.
(LOCC), by failing to provide the Union with re-
quested information, and by refusing the Union’s re-
quests to bargain over the effects of its transfer deci-
sion. To remedy these violations, the judge ordered the
Respondent to cease and desist from engaging in its
unlawful conduct, provide the Union with requested in-
formation, and engage in effects bargaining. Contrary
to the Acting General Counsel’s and Charging Party’s
requests, however, the judge did not additionally re-
quire the Respondent to provide unit employees with
backpay as provided in Transmarine Navigation Corp.,
170 NLRB 389, 390 (1968).2 The judge found this
backpay remedy unwarranted because he concluded
that the unit employees had suffered no palpable loss
as a result of the Respondent’s unfair labor practices
and that the Union would not have secured additional
benefits had timely effects bargaining occurred.
The Acting General Counsel and Charging Party ex-
cept, arguing that the judge erroneously found that em-
ployees did not suffer loss and that the Union would
not have obtained benefits for employees through time-
ly bargaining. Additionally, they contend that the
Transmarine remedy should be imposed, regardless of
loss, because otherwise the Board’s order will be to-
tally devoid of economic consequences for the Re-
spondent.
For purposes of this case we need not decide wheth-
er the remedy providing for a minimum of 2 weeks’
backpay in Transmarine is warranted for all effects
bargaining violations, regardless of loss. We do, how-
ever, agree with the General Counsel and the Charging
Party that backpay is appropriate here, because we find
that the Union might have secured additional benefits
for employees had the Respondent engaged in timely
effects bargaining. Thus, the contract required the Re-
spondent to provide the Union with advance notice of
any decision to transfer the Santa Cruz facility,3 and
the Union demonstrated that it promptly would have
sought effects bargaining over specific issues had this
contractual requirement been met. Furthermore, as ex-
plained below, we do not agree with the judge’s af-
firmative finding that the employees suffered no finan-
cial losses as a result of the transfer of ownership that
might have been compensated for through timely bar-
gaining with the Respondent.
The underlying facts are fully set forth in the
judge’s decision. Briefly, the 1987–1988 collective-
bargaining agreement between the Respondent and the
Union included a ‘‘successor clause’’ explicitly requir-
ing the Respondent to (1) provide at least 30 days’ ad-
vance, written notice of any decision to sell, lease,
transfer, or assign the Santa Cruz facility; and (2) bar-
gain over the effects of its decision. Under this provi-
sion, the Union was contractually ensured an oppor-
tunity to present its effects bargaining demands at a
time when the Respondent was still in need of the unit
employees’ services, and before the ‘‘collective
strength of the employees’ bargaining unit had been
dissipated.’’ Transmarine, supra. Moreover, the con-
tractual notice requirement afforded the Union the op-
portunity to engage in meaningful effects bargaining
and, indeed, secure employee benefits, while some
measure of balanced bargaining power remained.
On the record before us, it is clear that the Union
would have expeditiously sought effects bargaining
had the contractual notice requirement been satisfied.
From the first rumors of a sale, the Union dem-
onstrated a keen interest in, and quick response to, any
indication that the Santa Cruz facility would be sold.
1041LIVE OAK SKILLED CARE & MANOR
4 All dates are in 1988 unless noted.
5 Despite the Union’s repeated inquiries, the Respondent engaged in pro-
tracted negotiations to transfer the Santa Cruz facility to LOCC without noti-
fying the Union of a prospective sale. It also affirmatively misled the Union,
and attempted to prevent further inquiries, by representing that it would com-
ply with the contractual notice requirements if a transaction occurred. Instead,
the Respondent transferred the Santa Cruz facility to LOCC without affording
the Union any notice or opportunity for meaningful bargaining. In these cir-
cumstances, it was the Respondent’s deception and lack of timely notice that
prevented negotiations precisely at the time when they most likely would have
resulted in an agreement on effects bargaining. Royal Plating & Polishing Co.,
160 NLRB 990, 997 (1966).
6 Under the 1987–1988 contract, employees earned vacation and sick leave
and could accrue leave within certain limits. Employees could maintain 20
days of earned sick leave at any time and use accumulated vacation pay in
the year after it was earned. Employees who stopped working for the Respond-
ent were entitled to cash payments for accrued vacation pay.
7 Repeated efforts to pinpoint the Respondent’s accrued leave liability have
been unsuccessful. When the Union visited the Santa Cruz facility in Novem-
ber or December to review payroll records for accrued vacation and sick leave
information, it abandoned its search after it was unable to locate the relevant
information. When the Union later questioned LOCC about accrued leave in
December and January 1989, LOCC said it did not know the extent of the
Respondent’s liability. At the hearing, LOCC Owner Anderson testified that
he has the Respondent’s leave records but, that they do not include accrued
vacation and sick leave information. Finally, the individual who recorded leave
information for the Respondent is not in LOCC’s employ.
8 Under the contract, employees’ leave accumulated from their anniversary
dates. Because, at the time of the hearing, only 3 months had elapsed since
LOCC’s October 1 takeover of the Santa Cruz facility, a considerable portion
of the year remained during which accrued leave claims potentially could be
made.
9 The judge found that the Union would not have pressed for severance pay
in effects bargaining because no employee was terminated, no benefit was lost,
and because the Union had not pursued a severance pay demand in a com-
parable bargaining situation. We cannot agree that this issue can be decided
with any certainty. First, as discussed, supra, it is not clear that employees suf-
fered no loss. In addition, the Union’s previous posture in bargaining is not
determinative of what it would have sought in effects bargaining with the Re-
spondent. For example, if the Union had believed it commanded sufficient le-
verage, in timely, effects bargaining with the Respondent it might have pressed
for cash payments for employees. Indeed, the likelihood of that demand, and
its possible success, had some foundation in this case. The Respondent had
long operated the Santa Cruz facility at a loss and admittedly was very inter-
ested in transferring the facility. Rather than jeopardize a transaction to LOCC,
Continued
When the Respondent encouraged it to settle a griev-
ance in August 1988,4 saying that ‘‘there may possibly
be a prospective buyer for the facility,’’ the Union im-
mediately pressed for more information. When the Re-
spondent replied that no details were available, and
that the Union would be notified when and if a sale
occurred, the Union nonetheless asked the Respond-
ent’s administrator if the sale rumors were true. Even
after the administrator denied that any sale was
planned, the Union made additional inquiries in late
August or September. The Respondent refused to dis-
cuss the inquiries, stating that the Union would be no-
tified of any transaction, as provided in the collective-
bargaining agreement.5 Finally, on October 3, when
the Union belatedly learned of the transfer from
LOCC, it immediately wrote the Respondent request-
ing detailed information and proposing prompt effects
bargaining on a number of specific issues.
One issue which the Union promptly pursued was
employee accrued leave benefits.6 When the Union
learned that LOCC had taken over the convalescent
hospital, it immediately asked the Respondent whether
employees had been paid for accumulated vacation
leave, and requested bargaining over the ‘‘cash pay out
and/or transfer of sick leave accrued.’’ Neither request
was heeded. Nor was it clear that employees retained
accrued leave benefits after the sale. Thus, when the
Union asked the Respondent during the week of Octo-
ber 3 whether accrued vacation pay would be included
in employees’ final paychecks, it was told it would
not. Although the Respondent informed the Union that
LOCC had agreed to assume its accrued leave liability,
it did so on the basis of the September 30, ‘‘Manage-
ment Agreement’’ which the Union knew made no
mention of LOCC responsibility for accrued vacation
pay. And, although LOCC assured the Union and em-
ployees that terms and conditions of employment
would remain unchanged, except for a wage increase,
it admittedly would not commit itself to assuming the
Respondent’s accrued leave obligations. LOCC merely
told employees that it would ‘‘recognize seniority and
. . . pay vacation and sick pay to the extent that we
would do it.’’ Likewise, LOCC informed the Union
that it was willing to make some accrued payments but
would not assume the Respondent’s obligation because
it did not know the extent of the liability.
The judge acknowledged that there was confusion
over the accrued pay issue, but concluded that employ-
ees had suffered no loss because LOCC had entered
into a ‘‘gentlemen’s agreement’’ to assume the Re-
spondent’s accrued pay liability and because LOCC
had honored all claims for accrued leave. We do not
agree that these facts establish that no loss occurred.
First, the ‘‘gentlemen’s agreement,’’ which was
never disclosed to the Union, was expressly premised
on the Respondent’s assurances to LOCC that its ac-
crued leave liability did not exceed a specific dollar
figure. The Respondent’s actual obligation has not
been established, however, and, for that reason, LOCC
will not commit itself to the liability.7 And, although
the judge correctly noted that LOCC has honored ac-
crued leave claims, approximately 9 months remained
after the hearing for accrued leave requests to be
made.8 Therefore, it is not certain that employees’ ac-
crued leave benefits remained the same under LOCC.
Even assuming that they were unchanged, given the
confusion over the accrued leave issue, and the
Union’s demonstrated interest and diligence in pur-
suing this subject, it is likely that the Union would
have pressed for bargaining over this issue. Moreover,
armed with employee support and the bargaining
strength available only in timely, effects bargaining,
the Union indeed might have negotiated additional
benefits for employees.
In addition to requesting bargaining on accrued
leave on October 3, the Union made similar requests
concerning, inter alia, severance pay,9 pending griev-
1042 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
the Respondent might have granted employees severance pay or some other
requested benefit.
10 Although the judge acknowledged that the Union might want to bargain
with the Respondent over the issues of grievance resolution and overtime
claims, he stated that these issues were ‘‘unrelated to the takeover,’’ and
‘‘only loosely termable as ‘effects bargaining’ issues.’’ The judge said that be-
cause these issues turned on the underlying legal merits of the claims, and not
on the give-and-take of negotiations, the Transmarine backpay remedy is not
warranted. We disagree.
Unions reasonably may view effects bargaining as the forum for resolving
any outstanding claims against employers. Particularly where, as here, the con-
tract mandates notice well in advance of any transaction, unions logically
might attempt to resolve remaining issues while some semblance of balanced
bargaining power exists. They would also seek such resolutions in cases in
which they would cease to be unit representatives after the transfer of owner-
ship. That these issues, if unresolved in effects bargaining, may proceed
through the contractual grievance procedure or another legal forum, and be re-
solved on their merits, does not warrant a different result.
ances, and payment of ‘‘all wages and benefits due.’’
On the issue of grievances, the record establishes that
the Union and the Respondent previously settled a
grievance involving employee Jane Johnson. The set-
tlement provided that disciplinary references would be
removed from Johnson’s file and that Johnson would
receive a cash payment. On November 8, in apparent
response to the Union’s information request, the Re-
spondent informed the Union that it had instructed
LOCC to purge Johnson’s file. It is not clear whether
LOCC did purge the file. Moreover, the Union asserts
that Johnson has not been paid and the Respondent
cannot establish otherwise. Under timely effects bar-
gaining, the Johnson grievance, and any other out-
standing grievances, might well have been satisfac-
torily resolved.
Finally, the Union claims that after it demanded in-
formation and effects bargaining, it learned that the
Respondent may have required kitchen employees to
work more than 40 hours a week without receiving
overtime pay. The Union said it did not inform the Re-
spondent of this claim because it needed the timecards
and payroll records it requested on October 3 to evalu-
ate the situation. Had the contractual notice require-
ment been satisfied, and the requested information
timely provided, this situation likewise might have
been resolved in effects bargaining.10
In sum, based on the particular facts in this case, in-
cluding the contractual advance-notice requirement and
the Union’s demonstrated diligence in promptly re-
questing information and bargaining on specific, unre-
solved issues, we find that the Union, indeed, might
have secured employee benefits had timely, effects
bargaining occurred. It is clear that the Respondent af-
firmatively misled the Union and withheld information
concerning its decision to transfer its facility, thereby
deterring the Union from bargaining over the effects of
the transfer on the employees. NLRB v. Transmarine
Navigation Corp., 380 F.2d 933, 940 (9th Cir. 1967).
Now, 2 years after the Respondent’s cessation of busi-
ness, ‘‘the Union can hardly hope to obtain the same
benefits from bargaining that might have helped ease
the unit employees’ transition into their employment
with their new employer had ‘effects’ bargaining taken
place at the time required by law.’’ Signal Commu-
nications, 284 NLRB 423, 428 (1987). Under these
circumstances, it is reasonable to require that ‘‘the em-
ployees whose statutory rights were invaded by reason
of the Respondent’s unlawful . . . action, and who
may have suffered losses in consequence thereof, be
reimbursed for such losses until such time as the Re-
spondent remedies its violation by doing what it
should have done in the first place.’’ Royal Plating &
Polishing Co., 160 NLRB 990, 999 (1966), quoting
Winn-Dixie Stores, 147 NLRB 788, 792 (1964), enfd.
in relevant part 361 F.2d 512 (5th Cir. 1966). Accord-
ingly, we find that the Transmarine backpay remedy is
warranted in this case.
ORDER
The National Labor Relations Board adopts the rec-
ommended Order of the administrative law judge as
modified below and orders that the Respondent, Santa
Cruz Convalescent Hospital, Inc., d/b/a Live Oak
Skilled Care & Manor, Santa Cruz, California, its offi-
cers, agents, successors, and assigns, shall take the ac-
tion set forth in the Order as modified.
1. Insert the following for paragraph 1.
‘‘1. Cease and desist from
‘‘(a) Failing or refusing to give timely notice to and
bargaining with Hospital and Health Care Workers
Union, Local 250, Service Employees International
Union, AFL–CIO, as the exclusive representative of its
employees in the appropriate unit set forth below, with
respect to the effects on its unit employees of its deci-
sion to sell or otherwise transfer its interest in Live
Oak Skilled Care & Manor. The appropriate unit is:
All full-time and regular part-time certified nurs-
ing assistants, cooks, nurses aides, housekeepers,
janitors, laundry employees, kitchen helpers, ac-
tivity aides, and maintenance employees employed
by the Respondent at its Santa Cruz, California
facility; excluding registered nurses, licensed vo-
cational nurses, volunteer coordinators, training
coordinators, clerical employees, administrative
employees, watchmen, guards, and supervisors as
defined in the Act.
‘‘(b) Failing or refusing, on request, to furnish the
Union with information relevant and necessary to the
Union’s fulfillment of its functions as your exclusive
collective-bargaining representative.
‘‘(c) In any like or related manner interfering with,
restraining, or coercing employees in the exercise of
the rights guaranteed them by Section 7 of the Act.’’
2. Insert the following as paragraph 2(c) and reletter
the subsequent paragraphs.
1043LIVE OAK SKILLED CARE & MANOR
‘‘(c) Pay limited backpay to the unit employees in
the manner set forth in the amended remedy section of
this decision.’’
3. Substitute the attached notice for that of the ad-
ministrative law judge.
APPENDIX
NOTICE TO EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
The National Labor Relations Board has found that we
violated the National Labor Relations Act and has or-
dered us to post and abide by this notice.
WE WILL NOT fail or refuse to give timely notice to
and bargain with Hospital and Health Care Workers
Union, Local 250, Service Employees International
Union, AFL–CIO, as the exclusive representative of
our employees in the appropriate unit set forth below,
with respect to the effects on our unit employees of
our decision to sell or otherwise transfer our interest
in Live Oak Skilled Care & Manor. The appropriate
unit is:
All full-time and regular part-time certified nurs-
ing assistants, cooks, nurses aides, housekeepers,
janitors, laundry employees, kitchen helpers, ac-
tivity aides, and maintenance employees employed
at our Santa Cruz, California facility; excluding
registered nurses, licensed vocational nurses, vol-
unteer coordinators, training coordinators, clerical
employees, administrative employees, watchmen,
guards, and supervisors as defined in the Act.
WE WILL NOT fail or refuse, on request, to furnish
the Union with information relevant and necessary to
the Union’s fulfillment of its function as your exclu-
sive collective-bargaining representative.
WE WILL NOT in any like or related manner restrain
or coerce you in the exercise of the rights guaranteed
you by Section 7 of the Act.
WE WILL, on request, furnish the Union with infor-
mation relevant and necessary to the Union’s function
as your exclusive collective-bargaining representative.
WE WILL, on request, meet and bargain collectively
in good faith with the Union concerning the effects on
unit employees of our decision to sell or otherwise
transfer our interest in Live Oak Skilled Care & Manor
and, if any understanding is reached, WE WILL embody
it in a signed agreement.
WE WILL pay employees in the appropriate bar-
gaining unit who were employed by us limited back-
pay, plus interest, as required by the National Labor
Relations Board.
SANTA CRUZ CONVALESCENT HOSPITAL,
INC., D/B/A LIVE OAK SKILLED CARE &
MANOR
Valerie Hardy-Mahoney, Esq., for the General Counsel.
Thomas Gosselin, Esq. (trial) and Stephen D. Pahl, Esq.
(brief) (Tarkington, O’Connor & O’Neill), of San Jose,
California, for the Respondent.
Paul D. Supton, Esq. (brief only) (Van Bourg, Weinberg,
Roger & Rosenfeld), of San Francisco, California, for the
Charging Party Union.
DECISION
STATEMENT OF THE CASE
TIMOTHY D. NELSON, Administrative Law Judge. I heard
this 8(a)(5) case in trial at Santa Cruz, California, on January
27, 1989. It arose when the above-named Union filed unfair
labor practice charges against the above-named Respondent
on October 13, 1988 (all dates are in 1988 unless I specify
otherwise). After investigating those charges, the Regional
Director for Region 32 issued a complaint and notice of
hearing against Respondent on November 25.
The complaint alleges in substance that Respondent unlaw-
fully failed and refused to bargain in good faith with the
Union when, on September 30 Respondent ‘‘ceased oper-
ations and terminated employees’’ without giving ‘‘advance
notice’’ to the Union, when Respondent later refused the
Union’s October 3 mailed request ‘‘to engage in negotiations
concerning the effects’’ of that September 30 action, and also
‘‘refuse[d] . . . to furnish’’ the Union with information, also
demanded in its October 3 letter, which was ‘‘relevant and
necessary’’ to the Union’s representative role.
Respondent’s answer admits jurisdictional facts and that
the Union, a statutory labor organization, was the exclusive
collective-bargaining representative of a certain unit of em-
ployees as defined in the parties’ labor agreement, but denies
all wrongdoing.
Ruling on Motion for Deferral
At trial, Respondent for the first time moved for deferral
of this case to the grievance-arbitration system provided in
the labor agreement. The parties were not prepared to argue
the issue. I withheld ruling and directed that litigation pro-
ceed on the merits, subject to reconsideration of the motion
in the light of a more complete factual record and the par-
ties’ more careful briefing of the deferral issue.
As is more fully set forth in findings, below, this case
does not involve the ‘‘termination’’ or shutting-down of an
employing enterprise; rather, it involves Respondent’s sale
and transfer of its leasehold and management rights in an on-
going business enterprise to a new business entity, i.e., a
form of ‘‘successorship.’’ In this context, Respondent notes
that its labor agreement with the Union contains at Section
25 a ‘‘SUCCESSOR CLAUSE’’ which states:
1044 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
1 See also Olin Corp., 268 NLRB 573 (1984).
2 Cf. United Technologies II, supra, In that case (274 NLRB at 504), the
Board found the respondent’s deferral request timely, noting that the respond-
ent had raised deferral in its answer, and contrasted that case with other cases
in which deferral requests were treated as untimely because they had been
raised for the first time in posthearing briefs or in exceptions to the Board
from the judge’s decision.
In the event this facility is to be sold, assigned, leased,
or transferred, the facility will notify the Union, in writ-
ing, at least 30 calendar days prior to such action. Such
notice shall include the name and address of the pro-
spective new owner, assignee, lessee, or transferee. The
employer agrees thereafter to bargain over the effects of
the transaction.
Respondent’s motion implicates the general policies ex-
pressed by Board majorities in such leading cases as Collyer
Insulated Wire, 192 NLRB 837 (1971) and United Tech-
nologies Corp., 268 NLRB 557 (1984), as further elaborated
in United Technologies Corp., 274 NLRB 504 (1985)
(United Technologies II).1 These much-debated policies
clearly rest on a judgment that the public interest is normally
best served by encouraging parties to labor disputes—even
those involving violations of Federal law—to resolve those
disputes by resort to arbitration mechanisms provided in their
collective-bargaining agreements. Applying these policies in
a given case is often a challenging task, however, because
of the variety of pronouncements by the Board on the subject
and the uniqueness of each new case in which deferral con-
tentions are raised. And, as I discuss below, when deferral
motions are raised for the first time at trial, it becomes dou-
bly difficult to address them.
Here, I would deny the deferral motion on two inde-
pendent grounds. First, although I am aware of no clearly
supportive precedent, I would find Respondent’s deferral mo-
tion untimely.2 While, as noted, United Technologies II
seemingly finds deferral motions timely if raised in an an-
swer to the complaint, but untimely if raised for the first
time on posttrial briefs, the Board has not squarely decided
whether deferral motions are timely if raised at trial. I think
the general subject of timeliness of deferral motions deserves
renewed consideration by the Board, and I thus suggest
below some reasons for holding respondents to a duty to
raise deferral at an earlier point even than the Board cur-
rently permits, and cetainly at some point before the parties
and the judge arrive for a trail on the merits.
As already noted, Respondent did not indicate an intention
to plead for deferral until the trial opened. By this time, the
Charging Party and the General Counsel (and Respondent)
had already fully prepared to litigate the case on its statutory
merits and the Government had gone to considerable expense
to furnish a judge and court reporter for a trial on the merits.
And it is hard to see why it would be necessary to vindicate
the policies underlying the Board’s deferral doctrine to per-
mit a respondent to wait that long to raise the issue for the
first time. It would impose no obvious burden on a respond-
ent to require it to invoke deferral at some earlier point—
no later than by the the time its answer to the complaint is
due, and arguably, such earlier still, for example, shortly
after the filing of the original charge. Seemingly, too, the ex-
pense to the taxpayers inherent in processing these cases
would be reduced to the extent deferral motions were re-
quired to be filed at some point earlier than the date the par-
ties arrive on site for a merits trial.
As a practical matter, it is easiest to inquire into the ‘‘mer-
its’’ of a deferral request during the investigative stage, at
some point before a full-blown investigation and determina-
tion by the Office of the General Counsel of the substantive
merit of the charge itself. At that preliminary stage, first of
all, it is relatively easy informally to determine the overall
factual contours of the case, to examine the relevant collec-
tive-bargaining agreement, and, if necessary, to do the exact-
ing legal research often necessary to sort out from the con-
fusing array of Board law the worthiness for deferral of any
given case. Cases determined to be deferrable would not re-
quire the typically more detailed investigation required into
the merits of the alleged violation. By contrast, when such
contentions are raised for the first time at a trial, judgments
about the deferrability of a case require improvisation, usu-
ally an informal and potentially lengthy ‘‘bench inquiry’’
into the underlying facts and the contentions of the parties.
This necessarily eats into trial time, often imperiling the
schedule which the judge and counsel had relied on to con-
clude a trial on the merits without the need for a return trip.
And, especially, where, as here, trials are conducted at a site
which does not provide ready access to a labor law library,
and where the party opposing deferral and the judge have no
prior notice that the contention will be raised, it is often in-
evitable that the judge hearing the motion will be forced to
‘‘defer’’ ruling on the deferral motion and to direct that the
merits litigation go forward, even if, after more leisurely con-
sideration of the facts and review of the relevant precedents,
the judge might determine that the case is properly deferrable
(just as the General Counsel, through the Regional Director,
might have done, with far less intervening expense and di-
version of resources, had the matter been raised in a more
timely fashion, i.e., before embarking on a detailed investiga-
tion into the statutory merits and before issuing a complaint
and summoning a judge to hear those merits).
Thus it is at least arguable that once the General Counsel’s
office has invested money and staff resources in a ‘‘full’’
merits investigation and has then prepared for full litigation
before a judge, the current policy which generally encourages
the ‘‘private’’ resolution of labor disputes should yield to an-
other compelling public interest—that these merits be deter-
mined promptly and with finality in the Board forum which
Congress has provided, rather than being belatedly shunted
aside to a private disputes-resolution system which may or
may not dispose of the statutory issue with finality. In any
case, the problems of waste of resources, procedural confu-
sion, and delay are compounded by permitting respondents to
wait until a merits trial has opened (or perhaps has been un-
derway for some considerable length of time) to raise an
issue which could just as easily have been raised well before
trial.
Second, I find in any case that deferral is inappropriate
where it is alleged that, as part of its overall refusal to bar-
gain, Respondent refused to furnish the Union with informa-
tion relevant to its collective-bargaining function. It is argu-
able, in the light of the above-quoted ‘‘Successor Clause’’ in
the parties’ contract, that Respondent’s alleged refusal to
give timely notice and to engage in timely and meaningful
effects-bargaining is susceptible of resolution in an arbitral
forum and is thus presumptively deferrable. But this case
1045LIVE OAK SKILLED CARE & MANOR
3 See generally United Technologies II, supra, 274 NLRB at 505, where the
Board stated that ‘‘[the original United Technologies case] did not vary the
law concerning 8(a)(5) allegations involving an employer’s refusal to furnish
information requested by an exclusive collective-bargaining representative[,]’’
citing General Dynamics Corp., 270 NLRB 839 (1984), which in turn relies
on General Dynamics Corp., 268 NLRB 1432 fn. 2 (1984), and authorities
cited. See also, International Harvester Co., 241 NLRB 600 (1979).
4 E.g., American Commercial Lines, 291 NLRB 1066, 1068 (1988), and
cases cited.
5 The exhibit file containing Respondent’s exhibits erroneously includes R.
Exh. 1, which I rejected at trial, directing that it be placed in a ‘‘rejected ex-
hibit file.’’ This is a purported ‘‘Declaration of [Respondent’s attorney] Ste-
phen D. Pahl Related to Notice Provided to Local 250.’’ The exhibit is plainly
hearsay; it does not qualify under any of the hearsay exception provided in
Rule 804, Federal Rules of Evidence. The representation of Respondent’s trial
counsel that attorney Pahl was ‘‘unavailable’’ due to ‘‘other business commit-
ments’’ was not enough to show that he was ‘‘unavailable’’ within the mean-
ing of Rule 804(a); neither was his declaration receivable under the ‘‘catch-
all’’ provisions of Rule 804(b)(5), particularly where Respondent failed to pro-
vide opposing parties with a ‘‘Fair opportunity to prepare to meet it,’’ by fail-
ing to give notice of an intention to offer the declaration until the trail started.
Accordingly, I have given that exhibit no consideration.
6 The material facts are not in dispute. The testimony of each witness is har-
monious with that of all others on common points and is further harmonious
with the documentary record. Accordingly, in quoting or paraphrasing the tes-
timony of any witness named below, I intend to adopt that testimony as my
own finding on the point.
7 From all accounts, Respondent had been operating the facility at a loss for
some time and was anxious to locate a buyer.
8 At trial, counsel for Respondent stated that, ‘‘the management agreement
is simply an artifice to comply with the State regulatory bodies on operation
of a health care facility until Mr. Anderson, the new owner, could get a li-
cense.’’
9 Contrary to the complaint, there is no direct evidence that Respondent ever
took any formal steps to ‘‘terminate’’ employees prior to the takeover, nor
even told the before the fact that they would be going on to a new company’s
payroll. The most the record shows is that, on the evening of September 30,
one or more employees somehow knew (and so informed the Union’s agent,
Lasky), that the hospital had been ‘‘sold,’’ and that the employees could all
stay on, with a 10-cent raise.
10 Anderson was represented in the takeover negotiations by Attorney Ste-
phen Pahl, who previously had represented Respondent in certain labor rela-
tions and grievance-handling matters with the Union Attorney Pahl also rep-
Continued
also involves an alleged refusal on Respondent’s part to fur-
nish the Union with information associated with Respond-
ent’s transfer of the enterprise to the new owner, and the
Board generally will not defer alleged refusals to furnish in-
formation to arbitration because of the inherent delays, pro-
cedural confusions, and the prospect for ‘‘two-tiered arbitra-
tion,’’ involved in deferral of such ‘‘information’’ cases.3
And especially where, as here, the refusal-to-furnish informa-
tion question is ‘‘intertwined’’ with, or has an ‘‘intricate re-
lationship’’ with the alleged refusals to engage in timely or
meaningful effects-bargaining, partial deferral of the latter
issues, while litigating the merits of only the information
issues of this dispute would clearly seem inappropriate.4
Accordingly, I deny Respondent’s motion to defer.
On the entire record,5 my observations of the witnesses as
they testified, and my assessments of the inherent prob-
abilities, I make the following
FINDINGS OF FACT6
A. The Transfer of the Operation and its Impact on
Employees
Respondent is a corporation which, under a sublease of the
premises, formerly operated a 240-bed convalescent hospital
in Santa Cruz, California, under the business name ‘‘Live
Oak Skilled Care & Manor.’’ It typically employed 80 to 90
unlicensed care-support, janitorial, and food-service employ-
ees who were represented by the Union under a labor agree-
ment effective from October 16, 1987, through November 1,
1988. The agreement contains, inter alia, the ‘‘Successor
Clause’’ quoted earlier.
Starting in late February or early March, Respondent’s
agents and Kenneth Anderson began what proved to be pro-
tracted negotiations for the takeover of the Santa Cruz facil-
ity by a corporation set up by Anderson for that purpose,
Live Oak Care Center, Inc.7 From the start, the negotiations
contemplated that Anderson’s corporation would assume Re-
spondent’s sublease and operate under Respondent’s State of
California license until it could become licensed in its own
name. The negotiations became attenuated largely because
the holder of the master lease (or ‘‘master sublease’’—the
record is contradictory), Hillhaven Corp., of Tacoma, Wash-
ington, imposed many obstacles to its approving Anderson’s
corporation as an assignee of the sublease—its principal con-
cern, according to Anderson, being protection of its interest
in collecting on certain amounts it believed were owing from
Respondent.
On September 30, after a round of concluding meetings
and conferences by telephone with Hillhaven which had
begun on September 20, Respondent and Anderson’s cor-
poration finally signed two documents, a ‘‘Management
Agreement,’’ and an ‘‘Assignment of Lease.’’ Counterparts
of those agreements were signed the same day by Hillhaven.
Pursuant to those instruments, Anderson’s corporation
began operating the hospital on October 1. Under the terms
of the management agreement, however, Respondent was de-
picted as the ‘‘Owner,’’ and Anderson’s corporation was des-
ignated as the ‘‘Manager,’’ ‘‘employ[ed] . . . to manage the
Facility for the Owner’s account’’ under certain specified
terms and conditions. The witnesses to the transaction who
testified (Robert Stotts, for Respondent, and Anderson, for
the takeover corporation) explain that the device of a ‘‘Man-
agement Agreement’’ was used, consistent with industry
practice, as an ‘‘interim’’ arrangement until Anderson’s cor-
poration could obtain its own hospital operating license from
the State of California.8
As all parties agree, regardless of the device, or its accept-
ability under state licensing laws, Anderson’s corporation as-
sumed full control on October 1. In the process, it retained
all of the former bargaining unit employees, without hiatus
in their employment, and with assurances that their former
terms and conditions of employment would not change, ex-
cept that employees would all get a 10-cent hourly raise.9 In
the circumstances, Anderson’s corporation plainly became
the ‘‘successor employer,’’ as that term is understood in
labor relations law, and I shall hereafter refer to it as the
‘‘successor.’’
This was a status the successor recognized during the ne-
gotiations leading to the October 1 takeover. Thus Anderson
testified that he had agreed with Respondent that the suc-
cessor would retain the bargaining unit intact, and had fur-
ther acknowledged the obligation to recognize the Union
upon takeover (indeed, Pahl, as the successor’s attorney in
that instance, had told Anderson that, upon taking over, it
was his responsibility to notify the Union, and the employ-
ees, that the new corporation had taken over).10
1046 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
resented Respondent in the conference calls immediately preceding this trial,
and he signed Respondent’s posttrial brief.
11 Stotts says that Anderson saw the issues of ‘‘accrued’’ vacation and sick
leave entitlement as ‘‘no problem,’’ once Stotts assured Anderson that the ‘‘li-
ability,’’ liquidated to a dollar amount, would be less than $14,000. It is not
clear from Anderson’s testimony whether Anderson ever voiced any specific
reservations about this during the pretakeover negotiations, but he testified
that, subjectively, he was not prepared to be confronted with mass demands
for immediate vacation time off which would leave him with a staffing prob-
lem, and that this concern made him reluctant to make a blanket commitment
on the subject. He further testified, however, that as long as employees’ re-
quests for accrued leave were ‘‘spread out over a period of time,’’ he was
prepared to accept their ‘‘accrued’’ rights in this respect. It also appears from
Anderson’s testimony that when pressed on this point by various employees,
including during a group meeting after the takeover, Anderson tried to avoid
making any blanket commitment while simultaneously seeking to assure the
employees in general terms that their prior ‘‘seniority’’ would be
‘‘recognize[d]’’ and that the successor would ‘‘pay vacation and sick pay to
the extent that we would do it.’’
Anderson also told the Union’s agent, Patty Lasky, when
she approached him on or about October 7 that he would
recognize the Union as the employees’ bargaining agent and
that no prior terms or conditions had been changed, except
for the 10-cent raise. Those parties then entered into negotia-
tions. On November 7, they signed an agreement in which
the successor agreed to ‘‘adopt’’ Respondent’s ‘‘current [sic]
Collective Bargaining Agreement,’’ and to extend its term
‘‘until February 1, 1989,’’ with further provision that any
agreement thereafter reached would be retroactive to Novem-
ber 1, the scheduled (and already elapsed) terminal date of
Respondent’s agreement with the Union.
If there were any potential ambiguity of understanding
about the effects of the takeover on unit employees between
Respondent and the successor (or between both employers
and the Union, in later, inconclusive, discussions on the
point) it related to the successor’s willingness to credit em-
ployees with unused vacation and sick leave accrued while
in Respondent’s employ. On or about September 20, Ander-
son had admittedly made a ‘‘gentlemen’s agreement’’ with
Stotts—after receiving assurances about prior practices and
likely amounts in question—that the successor would ‘‘as-
sume responsibility’’ for vacation and sick leave time ‘‘ac-
crued’’ by employees while in Respondent’s service.11
There is no evidence, since the takeover, that the successor
has refused any employees’ leave request requiring credit for
prior unused leave under Respondent’s operation; the
Union’s agent, Lasky, states the Union is not aware of any
such instances Anderson asserts without contradiction that, in
fact, the successor has honored all leave requests submitted
to date, including leave requests which credit employees for
unused leave under Respondent. Indeed, as Lasky now ad-
mits, evidence that the successor was honoring previously ac-
crued and unused leave time was implicit in at least one em-
ployee’s pay and leave records reviewed by Lasky during
visits to the facility in November and December. As a prac-
tical matter, the issue now appears to be moot because leave
requests, in fact, have been ‘‘spread out,’’ and because the
labor agreement requires employees to ‘‘use or lose’’ accu-
mulated leave within a year.
The evidence detailed elsewhere below shows that, until
October 3, when it received a letter dated September 29 from
the successor advising of the ‘‘change of ownership,’’ the
Union had received only inconclusive and contradictory in-
formation from Respondent’s agents about the possibility of
a takeover, and nothing about its potential timing, nor the
identity of the putative new ‘‘owner,’’ nor the potential im-
pact on employees of any such transaction.
B.‘‘Notice’’ to the Union; the Union’s Efforts to
Bargain and to Obtain Information
I here detail the evidence bearing on ‘‘notice’’ to the
Union, what the Union did once it received clear notice on
October 3, and what Respondent did and did not do in re-
sponse to the Union’s subsequent efforts to gain information
and bargain about the ‘‘effects’’ of the transition.
According to the Union’s agent, Timothy McCormick, the
first hint of a possible takeover came around the ‘‘beginning
of August,’’ when McCormick called Respondent’s labor re-
lations attorney, Pahl, to discuss a certain outstanding griev-
ance scheduled for arbitration. (By that point McCormick
had been replaced, or was about to be replaced, by Lasky,
as the agent to service the Union’s relationship with Re-
spondent, but McCormick was apparently trying himself to
dispose of ‘‘old’’ business in calling Pahl). In the course of
attempting to settle the grievance, Pahl told McCormick that
‘‘it was probably in the interest of the Union to settle this
because there may possibly be a prospective buyer for the fa-
cility.’’ Apparently during this conversation also, as McCor-
mick later elaborated, McCormick asked Pahl for the ‘‘iden-
tity’’ of the ‘‘buyer,’’ but Pahl demurred, saying he could
not provide any ‘‘details’’ and that ‘‘when and if it became
effective that [the Union] would be notified.’’ McCormick
told Pahl that in such event McCormick would not be the
person to notify, because of his changed responsibilities.
At some point shortly thereafter, McCormick told Lasky
what Pahl had told him, and, as Lasky recalled it, ‘‘Some-
times toward the late summer months or so,’’ Lasky went to
the hospital and asked Respondent’s administrator, Charlene
Henion, whether there was ‘‘any truth to the rumor that the
facility is being sold?’’ Henion replied, ‘‘Not that I know
of,’’ but agreed to make inquiries and report back to Lasky
on the subject. A few days later, Henion called Lasky back
and said that the facility was not being sold, adding, how-
ever, that businesses are ‘‘always on the market for a price.’’
McCormick recalls that in late August or early September,
he called Pahl to report that Henion had denied to Lasky that
the facility was being ‘‘sold.’’ Pahl replied that McCormick’s
disclosure to Lasky and Lasky’s conversations with Henion
had created a ‘‘major flap.’’ McCormick did not press Pahl
for any clearer statement of the status of or details sur-
rounding any sale negotiations but only repeated that he was
not the agent to deal with if any sale ‘‘became formal or ac-
tually pending’’ and that he had ‘‘every expectation’’ that
Pahl would notify Lasky, in writing, ‘‘as called for in the
contract.’’ Pahl said he would ‘‘comply with that,’’ and that
he was ‘‘aware of both the statute and the contract provi-
sions.’’ At some later point (Lasky states it was in mid-Sep-
tember), Lasky herself called Pahl, and asked him if ‘‘the fa-
cility was being sold.’’ He replied that he ‘‘was not going
to discuss it’’ with her. He made some reference to problems
she had created when she ‘‘had been asking about it at the
facility,’’ but stated that, ‘‘in the event of the transaction,
they will notify [the Union] per the . . . collective bar-
gaining agreement.’’
McCormick had one additional telephone contact with
Pahl in late September, devoted exclusively to concluding a
grievance settlement. McCormick did not raise the subject of
1047LIVE OAK SKILLED CARE & MANOR
12 Lasky states that Respondent had previously told the Union that
Petermann was its agent for labor relations matters, and Respondent affirmed
at trial that he was so acting in the period in question.
13 Again I note that the Union’s concerns were still (quite understandably)
generalized—even at this point—and traceable more to the fact that its agents
had not to date received detailed information from Respondent about the spe-
cific terms of the transition than to any particular evidence that employees had
suffered specific losses or harm to their accustomed terms and conditions of
employment. Indeed, by then, Lasky had already met with Anderson for the
successor and had received generalized assurances from him that the successor
Continued
the pending ‘‘sale’’; neither did Pahl. As found earlier, the
Union’s next notice on the subject came when Lasky went
to the facility on the night of September 30 and learned from
an employee that the new company would be taking over the
next day, and would be giving a 10-cent raise. And, learning
nothing more during the intervening weekend, the Union’s
next notice came when Lasky received the successor’s own
‘‘notice’’ letter on October 3.
When Lasky received the successor’s notice letter, she was
admittedly ‘‘nervous’’ over the Union’s lack of information
about the transition, but also admittedly lacked at that time
any specific basis for believing that any employee had suf-
fered actual injury in the process. As a consequence, she
drafted a broad set of demands—what she termed the
Union’s ‘‘standard letter’’ in such circumstances—and
mailed it certified to Conrad Petermann, who, apparently
through his own service company, Sun Pacific, acted in some
agency capacity for Respondent in the management and ac-
counting associated with the hospital, including in maintain-
ing payroll records and issuing pay checks.12 She also mailed
a copy to Attorney Pahl on the same date. This is the mate-
rial text of Lasky’s October 3 letter:
In order to bargain over the effects that the sale of Live
Oak Skilled Care and Manor have on the employees at
this facility, please prepare the following information
for the Union as soon as possible:
(1) An up to date list of employees (as of the effec-
tive date of the transfer) with the following informa-
tion:
(a) Date of hire (and seniority date reflecting full se-
niority with the hospital)
(b) Sick leave accrual
(c) Vacation accrual and amount paid for vacation if
applicable
(d) Address
(e) Classification.
(2) Name and address of the Workers’ Compensation
carrier and the names of any employees who have filed
a Workers’ Compensation claim during Sun Pacific’s
operation of the facility.
(3) Copies of all sale agreements and/or interim
Management Agreements pertaining to the sale and/or
transfer of the facility.
(4) To the extent necessary to assure that all wages
and benefits have been paid, please have copies of all
payroll records available for review.
The following issues need to be discussed and resolved
at our meetings:
(1) Severance pay.
(2) Continuation and/or transfer of Health Insurance
coverage.
(3) Transfer rights to other facilities.
(4) Payment of all wages and benefits due.
(5) Cash payout and/or transfer of sick leave ac-
crued.
(6) Agreement as to the disposition of employee per-
sonnel and health records.
(7) Disposition of all pending grievances.
(8) Compliance with applicable minimum wage regu-
lations.
The Union reserves the right to make proposals with re-
gard to these and any other appropriate issues through-
out these negotiations. We are also open to discussing
other pertinent issues which you might suggest.
We would like to meet on Monday, October 10, 1988
at a mutually agreeable location. Call me at 408/287–
3030 to confirm.
Also on October 3, Lasky telephoned Petermann directly,
complaining that Respondent had not given the prescribed
30-day notice nor engaged in the ‘‘effects’’ bargaining con-
templated in section 25 of the labor agreement, the ‘‘Suc-
cessor Clause’’ quoted earlier. Lasky asked for a meeting to
bargain over those effects, and the two then agreed to meet
on October 17.
Within a day or two, Lasky reviewed public records main-
tained by the state licensing agency for the hospital, where
she found an unsigned copy of the September 30 manage-
ment agreement. Later that week, concerned by ‘‘rumors that
there could be some problems with the paychecks that were
due to arrive from Sun Pacific,’’ Lasky telephoned
Petermann and raised the subject. She took the opportunity
to ask if Respondent planned to include ‘‘accrued vacation’’
on employees’ ‘‘final’’ paycheck Petermann said, ‘‘No,’’
later elaborating that the ‘‘new people would assume that li-
ability.’’ Petermann said that this was covered by the man-
agement agreement and Lasky replied that she had reviewed
a copy in the state records and saw no such reference,
whereupon Petermann said that it ‘‘might be covered under
some other document.’’ Lasky then said that the Union
would ‘‘be needing to have that document, also’’
On October 11 or 12 Petermann called Lasky, saying that
he didn’t feel it necessary to meet with the Union on October
17, and asking whether they couldn’t instead ‘‘deal with
these issues over the telephone’’ Lasky said, ‘‘No,’’ that she
‘‘felt we needed to sit down and deal with these things, plus
we had information we had requested from him that we
needed to receive.’’ On October 12, Lasky wrote a followup
letter to Petermann, with copies to Pahl and Stotts. In sub-
stance, her letter protested Petermann’s unwillingness to meet
on October 17, reminded him that Respondent had failed to
honor the contract’s 30-day notice requirement and that the
contract required Respondent to engage in ‘‘effects’’ bar-
gaining, and offered to meet for that purpose on October 17,
19, or 20. Her letter stated also that Petermann’s currently
expressed refusal to meet on October 17 was ‘‘posing undue
hardship on our members,’’ and that it was ‘‘the Union’s po-
sition that there are several critical issues that need to be re-
solved in a timely manner.’’13
1048 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
would recognize and bargain with the Union and would maintain all estab-
lished terms and conditions, excepting the 10-cent hourly wage increase. In
fact, it was not until a ‘‘few weeks’’ after the takeover—Lasky admits it was
after October 12—that Lasky had a discussion with at least one employee
which caused her to wonder whether (unrelated to the transition) Respondent
had not violated the union contract or wage and hour laws by paying only
straight-time pay for as long as a year previously to kitchen employees who
may have worked more than 40 hours within a calendar week. The Union has
never subsequently raised this specific question with Respondent.
14 As all parties agree, the Union’s former agent, McCormick, and Respond-
ent’s attorney, Pahl, had previously settled a grievance (unrelated to the transi-
tion) over a citation and related discipline issued by Respondent against John-
ston; the settlement included purging the citation from her file and paying her
an undisputed sum certain reflecting ‘‘backpay’’ due to Johnston. It appears
from Petermann’s letter (although Lasky did not affirmatively recall this) that
Lasky bad somehow previously brought the general question of Respondent’s
compliance with the Johnston grievance settlement to Petermann’s attention.
Lasky herself later came to believe that Respondent had not yet paid Johnston
the agreed backpay sum. Respondent has never taken the position that it does
not owe Johnston the amount in question. (At trial, when the question arose,
no one representing Respondent could state with certainty whether the pay-
ment bad been made. Nor is it evident from the record that the Union had
ever asked Respondent, prior to this trial, whether it had paid Jobnston, or in-
tends to pay her). Whether or not Jobnston has, in fact, been paid, is irrelevant
to the complaint and to tbe General Counsel’s requested remedy.
15 Stotts could not recall in what particulars the ‘‘agreement in principle’’
varied from the ultimate management agreement signed on September 30. An-
derson, after having his memory prodded by a pretrial affidavit, could only
recall that Hillhaven continued, after September 20, to hold out in some un-
clear way for assurances that, by assigning the sublease to the successor, it
was not forfeiting any claims it might have against Respondent (or Stotts, per-
sonally) for any outstanding moneys it believed it was owed. It is not obvious
from the instruments signed on September 30 that this concern was specifi-
cally addressed even in those final writings. Exactly what happened between
September 20 and 30 to assuage Hillhaven’s concern—or whether it simply
On November 8, Petermann wrote to Lasky, apparently in
partial response to her October 3 demands for information,
stating,
The Workman’s Compensation carrier through Octo-
ber 1, 1988 was State Fund Policy Number 1014235–
87 2
The accrued vacation and sick pay through October
1, 1988 [he apparently meant the records associated
with those items] is maintained at the facility. Ms. Shir-
ley Lacey is in charge.
We are sending a copy of this letter to Ms. Lacey
and asking her to make sure that Jane Johnston’s per-
sonnel file is expunged of the citation.14
On November 11 Lasky wrote to Petermann, copy to
Stotts, stating, ‘‘The Union is hereby reiterating its demand
to bargain over the impact of the transition . . . .’’ And, re-
ferring to ‘‘information’’ the Union bad requested in ‘‘pre-
vious correspondence,’’ Lasky ‘‘insist[ed] that this informa-
tion be provided and that [Respondent] meet no later than
November 23, 1988.’’
Receiving no further answer from Respondent, Lasky vis-
ited the facility in ‘‘November’’ or ‘‘December’’ and, as-
sisted by an agent of the successor, attempted to review the
locally-maintained ‘‘payroll records,’’ including pay and
leave statements. These were ‘‘raw’’ records, i e., locally
completed forms and sheets which had been used to generate
all the information required by Respondent’s computerized
payroll and accounting service (Sun Pacific). These had been
retained intact in the facility, pursuant to state regulations,
but they had been stored in cartons and boxes, apparently
somewhat haphazardly, and (as Anderson admits), the ones
that Lasky tried to review had been incompletely prepared by
Respondent’s former local payroll clerk. It is not clear how
much time or effort was invested by Lasky, assisted by the
successor’s agent, who was unfamiliar with the records or
their current organizational scheme, before Lasky finally
abandoned her review. Respondent’s agent Stotts admits that
much or all of the same information would have been avail-
able from Respondent’s (i.e., Sun Pacific’s) payroll and ac-
counting data base, maintained on floppy computer disks at
Sun Pacific’s Los Angeles area headquarters.
Absent any evidence to the contrary, I presume—and
therefore find—that Respondent could itself have furnished
information responsive to the ‘‘payroll records’’ and other
related requests contained in Lasky’s October 3 letter to
Peter ann, and could have done so with relatively little ex-
penditure of time or expense. Similarly, I will presume that
the records which could have been printed out from Sun
Pacific’s data base would have been a far more manageable,
comprehensive, and authoritative source of the information
requested by the Union than the raw records which the suc-
cessor had acquired but were still packed in cartons.
ANALYSIS; SUPPLEMENTAL FINDINGS,
CONCLUSIONS OF LAW
For reasons set forth next, I find that Respondent has com-
mitted unfair labor practices substantially as alleged in the
couplaint.
The Union was presumptively entitled to notice—before
the fact—that Respondent intended to transfer the employing
operation to a new operator. Fast Food Merchandisers, 291
NLRB 897 (1988). (‘‘The failure to provide advance notice
and an opportunity to bargain clearly violated Section 8(a)(5)
and (1) of the Act.’’) See also Metropolitan Teletronics
Corp., 279 NLRB 957–959 (1986), enfd. 819 F.2d 1130 (2d
Cir. 1987). Respondent has shown no good reason why it
could not have given the Union enough advance notice to
peruit ‘‘meaningful’’ effects bargaining prior to the succes-
sor’s takeover.
Respondent makes much on brief of the fact that the deal
was in doubt at any given time up to and including the Sep-
tember 30 date it was concluded. There is some evidence to
support Respondent’s point, but I believe Respondent has ex-
aggerated the extent of Respondent’s actual ‘‘doubt’’ about
the prospects for a successful conclusion, particularly in the
roughly 2-week period immediately preceding the transition.
Thus, as early as September 20, if not earlier, Respondent
and the successor had believed that they had an agreement,
subject to its being approved and signed by Hillhaven On
that date, they had each signed off on an ‘‘agreement in prin-
ciple,’’ which Hillhaven itself had drafted and presented for
their approval. This instrument was ‘‘almost identical’’ (testi-
mony of Respondent’s agent, Robert Stotts) to the September
30 ‘‘Management Agreement.’’ Because there is no specific
contrary evidence, I will presume that the management
agreement signed on September 30 did not reflect any mate-
rial changes from the September 20 ‘‘agreement in prin-
ciple.’’ More specifically, I will presume that the provision
in the management agreement calling for the successor’s as-
sumption of the operation on October 1 had been part of the
September 20 ‘‘agreement in principle.’’15 Thus, Respondent
1049LIVE OAK SKILLED CARE & MANOR
took an additional 10 days for Hillhaven’s executive to sign the already pre-
sented paperwork—are matters which remain unclear on this record.
16 Walter Pape, Inc., 205 NLRB 719, 720 (1973).
17 Metropolitan Teletronics, supra, 279 NLRB at 959.
18 In canceling the previously scheduled October 17 meeting, Petermann
asked Lasky about the possibility of merely discussing the matters over the
telephone, and Lasky refused, insisting on a face-to-face session, aided by the
information the Union had sought. Petermann’s implied offer to bargain over
the telephone did not discharge Respondent’s obligation, particularly where the
Union needed information in order to prepare for bargaining and where Re-
spondent had failed to furnish payroll records and other information responsive
to the Union’s October 3 request. Collective bargaining is best accomplished
in face-to-face meetings (e.g., Alle Arecibo Corp., 264 NLRB 1267, 1273
(1982)), and would have been impossible to conduct by telephone in the ab-
sence of the information which Respondent persistently refused to disclose to
the Union. Moreover, Respondent has offered no reason why a face-to-face
meeting in Santa Cruz—‘‘at the plant where the controversy is in progress’’—
would have been impossible or unduly burdensome. Tower Books, 273 NLRB
671, 672 citing NLRB v. P. Lorillard Co., 117 F.2d 921, 924 (6th Cir. 1941).
19 I refer here to the basic unit employment data requested in items 1(a)
through (e), and 4 of the Union’s October 3 request. See generally, Detroit
Edison Co. v. NLRB, 440 U.S. 301, 303 (1979). As to names and addresses
of unit employees, see, e.g., Georgetown Holiday Inn, 235 NLRB 485, 486
(1978) (‘‘well settled that names and addresses . . . like wage data, are pre-
sumptively relevant either during contract negotiations or during the term of
the agreement. Hence no showing of particularized need . . . necessary’’). See
also Harco Laboratories, 271 NLRB 1397, 1398 (1984) (‘‘trend of Board law
to place less and less emphasis on a showing of alternate means of commu-
nication and more on the duty to furnish relevant information’’). Cf. Leland
Stanford Junior University, 262 NLRB 136 fn. 1 (1982). (Union has burden
of establishing ‘‘relevance’’ of demand for temporary employees’ addresses.)
20 I refer here to all other items reguested by the Union in the October 3
letter. Especially as to item 4, seeking copies of ‘‘sales agreements and/or in-
terim Management Agreements,’’ I note that a successor violates Sec. 8(a)(5)
by refusing to furnish the union with documents and other data relevant to
the successorship transaction Fremont Ford Sales, 289 NLRB 1296, (1988).
Similarly, the Board holds a predecessor to a duty to furnish the union with
details relating to a proposed or completed sale. E.g., Westwood Import Co.,
251 NLRB 1213, 1226–1227 (1980). See also, e.g., Washington Star Co., 273
NLRB 391, 396 (1984); RBH Dispersions, 286 NLRB 1185 (1987).
21 I refer here to the (unsigned) purported copy of the September 30 man-
agement agreement which Lasky found in the records of the state licensing
authorities in the first week of October, and to the ‘‘raw’’ records under the
successor’s control which Lasky made an effort to inspect at the facility in
November or December.
22 And see Harco Laboratories, supra, emphasizing ‘‘trend’’ favoring disclo-
sure by employer possessing presumptively relevant information without re-
gard to ‘‘alternative means’’ of gaining same.
was not excused from its duty to notify the Union in advance
simply because the transaction did not become ‘‘final’’ until
the eve of actual takeover. It was enough that, for months
prior to the takeover, Respondent had been giving ‘‘active
consideration’’ to an ‘‘imminent’’ transfer of the business.16
Moreover, at least 10 days prior to the takeover, Respondent
had reached an ‘‘agreement in principle’’ substantially em-
bodying all the terms for the takeover, including the takeover
date. Respondent has offered no reason why it could not
have notified the Union on September 20, at which time
there were no apparent further obstacles to a conclusion of
the deal, since Respondent and the succesor had signed off
on the very terms that Hillhaven had tendered and was im-
plicitly prepared to approve.
Respondent at one time appeared to take the position that
the Union did, in fact, receive advance notice through Pahl
and thereby waived any rights to conduct effects bargaining
prior to the takeover. I detect no such present claim in its
brief. In any case I find otherwise. Pahl’s statement at the
‘‘beginning of August’’ to McCormick about a ‘‘possibl[e]
buyer’’ was too vague to put the Union on notice of the re-
ality—that serious negotiations with a specific ‘‘buyer’’ had
been going on for months between and among Respondent,
Anderson, and Hillhaven. And Pahl’s simultaneous refusal,
on McCormick’s request, to disclose these details, of which
he was fully aware, made it a near futility for the Union for-
mally to demand ‘‘effects’’ bargaining at that early stage. So,
too, Pahl’s similar refusal, in the face of Lasky’s followup
inquiries to him, after Henion had ‘‘checked’’ the matter and
had represented that the facility was not being ‘‘sold.’’
Moreover, by denying, through Henion, that there was a
‘‘buyer’’ in the wings, Respondent gave false or misleading
information clearly intended to discourage any further inquir-
ies from the Union and to ‘‘conceal its decision’’ from the
Union.17 Finally, Pahl’s repeated promises to comply with
Respondent’s contractual and statutory duties to notify and
bargain with the Union would further tend to mislead the
Union into believing that a takeover of the facility was still
remote, speculative, and not presently worth seeking to bar-
gain about. In all the circumstances, it vas wholly excusable
that the Union did not demand effects bargaining until it re-
ceived formal notice on October 3 that the transaction was
a fait accompli. Respondent’s prior behavior, whenever the
subject was raised or pressed by the Union made it futile to
make such a demand.
I thus conclude that by failing and refusing to provide the
Union with advance notice of the contemplated takeover
transaction, indeed by concealing those plans, Respondent
denied the Union a meaningful opportunity to bargain over
the effects of that transaction on unit employees and thereby
failed and refused to bargain collectively in good faith within
the meaning of Section 8(a)(5) and (1).
Once the Union received (belated) notice of the fait
accompli and demanded such bargaining, Respondent plainly
failed to honor the Union’s persistent requests to meet for
that purpose.18 In so refusing to meet, Respondent independ-
ently failed and refused to bargain in good faith within the
meaning of Section 8(a)(5) and (1).
The information sought by the Union in its October 3 re-
quest, although potentially extensive, was either ‘‘presump-
tively relevant’’ to its representative function,19 or was
shown to be necessary for the Union to determine whether
or not Respondent was in compliance with its agreement, or
was otherwise specifically relevant to potential concerns re-
lating to the ‘‘effects’’ on unit employees of the
successorship.20 Respondent has not specifically contested
the relevancy or the Union’s need for any of the requested
information; neither has it argued that it would have been un-
duly burdensome to produce it. And it is no defense that the
Union may have been able by alternative means to discover
some of the information sought in its generalized ‘‘standard’’
request of October 3.21 Where the same information was
under Respondent’s control, and was in more manageable,
authoritative, and easily retrievable form, it was Respond-
ent’s obligation promptly to furnish those records, and not
simply to direct the Union to another, more awkward, or less
reliable, potential source.22
By substantially defaulting on its duty to furnish informa-
tion, Respondent independently failed and refused to bargain
in good faith with the Union and thereby violated Section
8(a)(5) and (1).
1050 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
23 Transmarine Navigation Corp., 170 NLRB 389 (1968); see also Royal
Plating & Polishing Co., 160 NLRB 990 (1966), containing rationale invoked
in Transmarine.
THE REMEDY
The record repeatedly shows that this case was not settled,
but went to trial, because the General Counsel and Charging
Party insisted that the remedy for the alleged violations must
include, in addition to Respondent’s furnishing of the re-
quested information and bargaining over the effects of the
successorship, a minimum 2-weeks’ ‘‘backpay’’ payment to
each unit employee. It is this feature of the complaint pro-
ceedings which Respondent most vigorously resists. The
prosecuting parties (I shall hereafter refer solely to the Gen-
eral Counsel, whose position on the point is indistinguishable
from that of the Charging Party) justify this latter demand as
a ‘‘standard’’ remedy, authorized by the ‘‘Transmarine’’ line
of cases,23 as a means of restoring to the Union some meas-
ure of the ‘‘bargaining strength’’ it would have held if Re-
spondent had given it appropriate advance notice and a
meaningful opportunity to bargain over effects prior to the
transfer of operations to the successor.
At various points throughout this proceeding, I questioned
the appropriateness of such a remedy where, from all appear-
ances, and despite Respondent’s alleged failure to comply
with its statutory obligations, employees in the unit did not,
in fact, suffer any palpable ‘‘loss’’ which might have been
avoided had Respondent complied with its notice and bar-
gaining obligations. Put another way, I questioned whether,
as a practical matter, an order directing Respondent to cease
and desist and to furnish the requested information and to
bargain with the Union over any lingering questions would
not adequately remedy the alleged violations. With these
doubts in mind, I invited the General Counsel not only to ad-
dress these questions in trial colloquy, but also to litigate any
facts bearing on the question of actual losses to unit employ-
ees occasioned by Respondent’s unilaterally acted-upon deci-
sion to transfer the operation to a new ‘‘owner.’’ I similarly
requested the General Counsel to speak to these questions on
brief.
At trial, counsel for the General Counsel averred that such
actual ‘‘loss’’ had occurred, and made some effort to prove
this. On brief, however, without conceding that employees
sustained no actual losses, she has not attempted to address
the point further, except so indirectly and inconclusively that
the claim of actual ‘‘loss’’ has lost much of its steam. Suf-
fice it to state that the General Counsel no longer directly
argues that Respondent’s unlawful practices caused harm to
employees’ pocketbooks, to their eligibility for benefits, or to
their accustomed working conditions—facts which, if shown,
would more obviously trigger a duty on the wrongdoer’s part
to ‘‘make them whole’’ by paying them ‘‘backpay.’’ The
General Counsel’s failure to link the requested ‘‘backpay’’
remedy to any showing of actual ‘‘loss’’ is not surprising,
given the absence of any such specific evidence in the record
and the presence of evidence generally indicating that no
such actual ‘‘losses’’ were incurred by anyone. But, in fair-
ness to counsel for the General Counsel, her principal pros-
ecutorial contention throughout these proceedings, and espe-
cially at the briefing stage, appears to be that a showing of
actual loss is not necessary for a Transmarine remedy, that
the remedy must be imposed without regard to the actual in-
jury suffered by unit employees in any particular transaction,
and must be imposed simply because to do otherwise would
allow Respondent to ‘‘reap the benefits of its unlawful con-
duct’’ and would ‘‘deprive’’ the Union of the ‘‘bargaining
strength’’ it might have possessed if Respondent had entered
into effects bargaining before the successorship transaction
was a fait accompli.
For reasons more fully explicated elsewhere below, I re-
main unpersuaded by any of the General Counsel’s inconclu-
sive efforts to demonstrate that Respondent’s unfair practices
caused employees to ‘‘lose’’ anything tangible, as distin-
guished from the more abstract ‘‘harm’’ which Respondent’s
actions worked on their right to bargain collectively with
their employer, which latter harm could be presumably cured
by directing that such bargaining now take place. But, as I
further acknowledge, the General Counsel’s claim that a
showing of actual ‘‘loss’’ to employees’ pocketbooks is not
necessary to a Transmarine ‘‘backpay’’ remedy is not pat-
ently frivolous; it finds some indirect support in the standard
formulation of the Transmarine remedy, which, in its ulti-
mate proviso (see below), does not appear to allow for any
deduction of ‘‘interim earnings’’ from the ‘‘minimum two-
weeks’ backpay’’ contemplated by such orders. Ultimately,
however, I do not read the cases as going so far as to say
that actual ‘‘loss’’ is irrelevant to the imposition of such a
remedy. And, ultimately, I shall judge that to impose a
‘‘backpay’’ remedy in these unique circumstances is neither
required by the precedents nor would it bear any reasonable
relationship to the actual damage to employees’ rights occa-
sioned by Respondent’s misconduct. Rather, as I shall con-
clude, the General Counsel’s remedial demands for a min-
imum of 2-weeks’ ‘‘backpay’’ reflect, in my opinion, an un-
reasoning, rigid, and mechanical application of Transmarine
and progeny, one not obviously contemplated by those au-
thorities, and one which, if applied in these circumstances,
would be merely punitive.
I start by identifying what a Transmarine remedy con-
templates, the ordinary fact context in which it is granted,
and the express and implicit assumptions made by the Board
in granting it.
As usually formulated, the Transmarine remedy is so com-
plex that it does not admit of ready understanding. Thus, it
typically provides that a respondent shall (my emphasis),
bargain with the Union about the effects on its employ-
ees of the shutdown, and to pay these employees
amounts at the rate of their normal wages when last in
the Respondent’s employ from 5 days after the date of
this Decision until the occurrence of the earliest of the
following conditions: (1) the date the Respondent bar-
gains to agreement; (2) a bona fide impasse in bargain-
ing; (3) the failure of the Union to request bargaining
within 5 days of this Decision, or to commence nego-
tiations within 5 days of the Respondent’s notice of its
desire to bargain with the Union; or (4) the subsequent
failure of the Union to bargain in good faith; but in no
event shall the sum paid to any of these employees ex-
ceed the amount he would have earned as wages from
[the shutdown date] to the time he secured equivalent
employment elsewhere, or the date when Respondent
offers to bargain, whichever occurs sooner; provided,
however, that in no event shall this sum be less than
1051LIVE OAK SKILLED CARE & MANOR
24 And see, e.g., Van’s Packing Plant, 211 NLRB 692 fn. 3 (1974), charac-
terizing the remedy as a ‘‘guarantee of at least 2 weeks’ backpay.’’
25 My emphasis. This formulation has made a standard appearance in Board
cases starting with Transmarine itself (170 NLRB at 390) and has persisted
in virtually unchanged form in the Board’s more recent applications of
Transmarine. See, e.g., Metropolitan Teletronics, supra, 279 NLRB at 961; Al-
dine Mfg. Co., 275 NLRB No. 217 (summary judgment; Aug. 27, 1985); J-
B Enterprises, 237 NLRB 383 (1978). It is, moreover, a formulation adopted
by Judge Shapiro in a decision (adopted by the Board) in a recent case on
which the General Counsel relies heavily, Signal Communications (cited and
discussed in main text below).
26 E.g., Cross Co., 274 NLRB 392 fn. 1 (1985).
27 Judge Shapiro’s decision in Signal was adopted by the Board with mini-
mal comment, none of it pertinent to the issue under discussion.
28 Id. at 428 fn. 15. I note in this regard that the hourly rate losses suffered
by those four employees would, over time, easily match, and then exceed, the
minimum ‘‘two weeks’ pay’’ remedy for them which the Board ordered to
‘‘make them whole for the losses they suffered.’’
29 Id. at 428.
30 Id. at 426. I note in this regard that Judge Shapiro elsewhere appears to
have treated the continuing assembly and installation work performed by these
seven employees as having been work which was not SEI’s; thus he found
that the unit composition had changed after SEI’s appearance in that ‘‘SEI
only employed SCI’s electronics technicians.’’ Ibid. and see fn. 14.) Thus, un-
like herein, the successor in Signal failed to ‘‘employ’’ more than half of the
predecessor’s pretakeover work force; manifestly, therefore, jobs were ‘‘lost’’
as a consequence of SCI’s disappearance from the business and SEI’s continu-
ance of a certain portion of it thereafter. Moreover, it is not clear from the
record whether the ‘‘general contractor,’’ who took over paying wages and
benefits to the seven installation and assembly employees, paid them the same
wages and conferred the same benefits they would have received under the
Union’s contract with SCI.
31 Id. at 428.
these employees would have earned for a 2-week period
at the rate of their normal wages when last in the Re-
spondents’ employ.
Perhaps because of its complexity, because any bargaining
which may result from such a remedy is likely to be perfunc-
tory and quickly brought to a lawful impasse, and because
the only thing which appears to be certain about it is that,
in its last proviso, employees are guaranteed an indestructible
minimum right to 2-weeks’ ‘‘backpay,’’ it is understandable
that the General Counsel has customarily referred to the
Transmarine remedy as a ‘‘standard 2-weeks’ backpay’’
remedy.24
The General Counsel overlooks one feature of the
Transmarine remedy as typically applied by the Board—that
the Board customarily rationalizes its imposition of a ‘‘lim-
ited backpay requirement’’ on two grounds, that it is ‘‘de-
signed both to make employees whole for losses suffered as
a result of the violations and to recreate in some practicable
manner a situation in which the parties’ bargaining position
is not entirely devoid of economic consequences’’ for the
Respondent.25 This is no accident; the paradigm Transmarine
remedy situation, as regularly characterized by the Board, in-
volves (my emphasis) ‘‘an employer’s failure to bargain over
the effects of its decision to shut down its operations.’’26
And where a true ‘‘shutdown’’ occurs, this necessarily in-
volves actual ‘‘losses’’ to the employees, lost jobs being only
the most obvious consequence.
It would be too simple, however, to conclude that a
Transmarine remedy is only appropriate where an employing
operation has completely ‘‘shut down’’ or where employees’
jobs with the employing entity have been ‘‘lost.’’ Thus, the
General Counsel points to Signal Communications, 284
NLRB 423 (1987), as an example of a case in which the em-
ploying entity (or a part of it, at least) continued intact under
the operation of a ‘‘successor.’’ Moreover, in Signal, four of
the former unit employees were hired by the successor, with-
out hiatus, and were nevertheless beneficiaries of a
Transmarine inspired ‘‘minimum 2-weeks backpay rem-
edy.’’27 While there are distinguishing features in Signal,
discussed below, which in my judgment make that case an
unreliable guide to the disposition of this case, I do not deem
it irrational for the General Counsel to infer from the above-
mentioned feature of Signal that the question of ‘‘actual
loss’’ is irrelevant to the considerations which inform the
Transmarine remedy. I do not think that this is a necessary
or inevitable reading of Signal, however, for the following
reasons:
Signal’s facts are complex, and in many respects obviously
distinguishable from the facts of this case. Thus, Signal in-
volved a predecessor, SCI, which, without notice or bar-
gaining with the union, terminated operations in its own
name and formally discharged four unit electronics techni-
cians on October 15. The next day, however, a successor,
SEI, composed of several former SCI principals, commenced
operations and reemployed those technicians, although at a
reduced rate of pay amounting to $2 per hour for three of
them and 60 cents per hour for the fourth. In this regard,
Judge Shapiro specifically found that these ‘‘four unit
enployees . . . did not secure equivalent or substantially
equivalent employment by going to work for . . . SEI in
view of [the hourly pay rate ‘‘losses’’ which they ‘‘suf-
fered’’].28 And later, in reiterating this finding, Judge Sha-
piro further suggested that the four electronics technicians
were employed by the successor ‘‘perhaps with reduced
fringe benefits.’’29 In addition, although SEI also took over
responsibility for SCI’s work at a different project, which
employed an additional seven former SCI unit installation
and assembly employees, SEI ‘‘ceased to pay [them] their
wages or other benefits, which, for the remainder of their
employment, were paid by the project’s general con-
tractor.’’30 Finally, and in distinct contrast to this case, SEI,
found to have been a labor relations successor to SCI, not-
withstanding its contrary claims, refused to recognize the
union or to bargain collectively with it as the representative
of its new work force.
I confess that I remain in doubt about Judge Shapiro’s pre-
cise reasoning for recommending an order ‘‘requiring . . .
SCI to pay backpay to its [four electronics technician] unit
enployees in a manner similar [my emphasis] to that required
in Transmarine.’’ It is true, as the General Counsel stresses,
that Judge Shapiro ‘‘disagree[d]’’ with SCI’s objection that
‘‘since the terminated unit employees obtained employment
with the successor employer immediately, . . . the
Transmarine backpay remedy is impermissibly punative [sic]
as the terminated employees were not adversely affected by
the closure of SCI’s facility’’31 What is not clear, however,
is whether Judge Shapiro ‘‘disagree[d]’’ with SCI’s claim
that employees were not ‘‘adversely affected,’’ or rather,
whether Judge Shapiro would have found a Transmarine
remedy appropriate even if there had been no ‘‘adverse’’ ef-
fect. In my view, Judge Shapiro’s decision as a whole favors
the former interpretation. Thus, as noted, there was plain evi-
dence, which Judge Shapiro found worthy of specific com-
ment, that the four electronics technicians ‘‘suffered’’ actual
‘‘losses’’ when their hourly pay rates were reduced by the
successors. And, as noted, those losses could easily have ex-
1052 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
32 Without purporting to liquidate the actual amount involved in such a rem-
edy herein, it can be seen that in a unit of 80–90 employees earning $4.28
and $5.88 per hour, the required backpay amount would easily be within the
range of $30,000, and very possibly much more while the ‘‘substantiality’’ of
the backpay imposition on a respondent may properly be given little weight
where the losses suffered by employees are likewise substantial, surely it is
relevant, as part of the Board’s determination of remedies, to weigh the rel-
ative imposition on a respondent of a given remedy against the demonstrable
losses suffered by employees due to the respondent’s unfair practices.
33 Admittedly, the significance of this language is clouded by the Board’s
other apparent rationale for declining to order a Transmarine remedy in
Raskin, that the plant had been shut down due to an (apparently unforeseen)
‘‘emergency’’ and that it would thus have been impossible for the employer
to have given prior notice or to have bargained in advance over the effects
of the shutdown.
34 Lasky substantially acknowledged that, while a demand to bargain about
‘‘severance pay’’ was included as part of her ‘‘standard’’ letter mailed to Re-
spondent on October 3, it was not an item likely to have been pressed if the
Union had been advised that the unit would remain intact, without loss in pay
or benefits. In fact, as Lasky admitted, in the only prior instance where an
employer signatory had transferred its operating rights in a health care facility
to a new owner, the ‘‘standard demand’’ for ‘‘severance pay’’ was dropped—
indeed it never emerged at the bargaining table—once the Union learned that
no employees would be terminated or suffer lowered pay and that the suc-
cessor would recognize the Union.
35 Lasky admitted that the issue of cash-for-accrued leave had never even
been raised by the Union in her prior experience in bargaining over other
health-care successorships where employees were retained as a unit.
ceeded the minimum 2-weeks’ backpay which Judge Sha-
piro’s order contemplated for them. In any case, as further
justification for a Transmarine remedy, Judge Shapiro ex-
plained that ‘‘The limited backpay remedy herein takes into
account the changed circumstances since the closing, and two
weeks of backpay for four employees represents an insub-
stantial amount [my emphasis] when viewed in the context
of SCI’s $4 million lawsuit against Kings [sic] County.’’
This passage seems only to reinforce the view that a
Transmarine remedy is not to be inflexibly or woodenly ap-
plied, without regard to actual losses suffered by employees
or the consequences to the respondent of imposing it.32
With the foregoing considerations in mind, I do not find
in Signal any plain support for the General Counsel’s view
that actual losses are irrelevant to the imposition of a
Transmarine remedy. Moreover, in focusing on Signal, the
General Counsel has failed to note at least one other
‘‘successorship’’ case, Raskin Packing Co., 246 NLRB 78
(1979), in which the Board appears to have relied in part on
the absence of proof of any actual losses to employees in de-
ciding not to impose a Transmarine remedy. Thus (id. at 80),
the Board stated, ‘‘Additionally, in view of the fact that the
new purchaser has offered the former Raskin employees em-
ployment, it is unnecessary to order the traditional [i.e.,
Transmarine backpay] remedies.’’33
To the extent doubt remains about the Board’s view of the
specific issue under discussion, I cannot ignore a more fun-
damental and general admonition expressed by the Board on
the subject of remedies, one which clearly warns against the
mechanical or inflexible imposition of a supposed ‘‘stand-
ard’’ remedy. Thus, in Cities Service Oil Co., 158 NLRB
1204, 1207 (1966), the Board stated:
In devising all our affirmative orders, . . . we bear in
mind that the remedy should be appropriate to the par-
ticular situation requiring redress, and should be tem-
pered by practical considerations.
And it is with such considerations in mind that I now return
to the facts of this case, with particular attention to the ques-
tion whether employees herein suffered any actual losses
which could only be remedied by a Transmarine ‘‘backpay’’
order, as opposed to an order directing Respondent to cease
and desist, to furnish information, and to bargain in good
faith.
First, I restate the obvious; not a single employee suffered
a penny’s loss of actual earnings (nor a moment’s loss of
work) as a result of Respondent’s unlawfully unilateral im-
plementation of its decision to transfer the operation to the
successor. This makes it odd at the outset to speak of the
need for ‘‘backpay’’ to remedy this feature of Respondent’s
misconduct. Neither did employees, in fact, lose any tradi-
tional benefits, not even credit for their previously accrued
vacation and sick leave, despite some ambiguity in the suc-
cessor’s position when pressed on this point early on after
the takeover.
As noted, counsel for the General Counsel does not di-
rectly dispute these judgments on brief. At most, in remarks
at trial, she suggested that the Union might have been able,
had Respondent allowed effects bargaining to take place in
advance, to secure Respondent’s agreement to give employ-
ees additional cash benefits or rights in connection with their
contemplated ‘‘termination.’’ Thus, the General Counsel sug-
gested that the Union, armed with the ‘‘bargaining strength’’
available to it prior to the takeover, might have successfully
demanded ‘‘severance pay’’ for the employees Respondent
intended to ‘‘terminate,’’ or might have successfully de-
manded that employees receive a ‘‘cash payment’’ reflecting
their ‘‘accrued’’ (unused) vacation time, or might have nego-
tiated ‘‘transfer rights’’ to another of Respondent’s oper-
ations for those ‘‘terminated’’ employees.
I am mindful, as the General Counsel has been quick to
point out when confronted with the frailties of these claims
on this factual record, that we should be reluctant to engage
in ‘‘speculation’’ about what timely, good-faith bargaining
might have secured for the employees, particularly where any
‘‘doubt’’ on that score is traceable to Respondent’s failure to
allow such bargaining to take place at a meaningful time.
Thus, I intend in no way to take issue with the familiar prin-
ciple that it is the wrongdoer, and not those wronged against,
who must bear the burden of any doubts occasioned by its
own failure to conform to the law. But here, the record af-
fords no basis for reasonable ‘‘doubt’’ on any of those ques-
tions, and it is thus not merely ‘‘speculative’’ to judge that
the Union would not even have pressed any such demands,
had Respondent timely and candidly disclosed the details of
its arrangements with the successor. Thus, ‘‘severance pay’’
for unit employees under circumstances where Respondent
and the successor had made arrangements that there would
be no ‘‘severance’’ of their employment, nor interruption in
their work, nor diminition of their wages, would almost cer-
tainly never have been demanded by the Union, much less
granted by Respondent, if the Union had been made aware
in advance of those arrangements.34 Similarly, there was not
any likelihood that the Union would have made any demand
for liquidated pay to compensate for ‘‘accrued’’ leave rights
if Respondent had disclosed in advance of the takeover that
(as far as it knew from its ‘‘gentlemen’s agreement’’ on the
subject with Anderson) the successor intended to credit em-
ployees for accumulated leave rights.35 And, even though the
1053LIVE OAK SKILLED CARE & MANOR
36 Should the successor be unwilling to allow its premises to be used for
the posting of such a notice, Respondent shall mail copies of the notices to
the unit employees on its payroll immediately before the successor’s takeover
Cf. Raskin Packing Co., supra, 246 NLRB at 80.
37 If no exceptions are filed as provided by Sec. 102.46 of the Board’s Rules
and Regulations, the findings, conclusions, and recommended Order shall, as
provided in Sec. 102.48 of the Rules, be adopted by the Board and all objec-
tions to them shall be deemed waived for all purposes.
Union alluded to a desire to bargain with Respondent over
‘‘transfer rights’’ in its October 3 ‘‘standard’’ letter to Re-
spondent, it is ludicrous for the General Counsel to suggest
that such ‘‘rights’’ would have been a live subject for bar-
gaining where (a) employees were not, in fact, being ‘‘termi-
nated’’ from employment with the ongoing employing entity,
(b) no employee apparently had any interest, in fact, in such
a ‘‘transfer’’ in lieu of staying on at the accustomed work-
place, and (c) the only other facility in which this Respond-
ent (or its principals) had any arguable ownership interest
was near Fresno, in California’s Central Valley, roughly 150
miles of hard driving from Santa Cruz, on the Pacific Coast.
Accordingly, the Union’s October 3 demand to engage in
‘‘effects’’ bargaining over such issues as ‘‘severance pay,’’
pay for ‘‘accrued’’ leave entitlements, or ‘‘transfer rights,’’
cannot be taken as a sign that these demands would have
been pressed at the bargaining table, had Respondent timely
notified the Union of its intentions, disclosed in advance its
arrangements with the successor, and engaged in good-faith
discussion before the takeover concerning the actual impact
on unit employees. To the contrary, the Union’s generalized
demands in its October 3 letter were made precisely because
the Union lacked the information and assurances from Re-
spondent it needed to formulate a more specific agenda for
effects bargaining. And, in summary, to the extent that the
requested 2-weeks’ ‘‘backpay’’ remedy is urged as necessary
to restore employees to the position they might have occu-
pied had Respondent engaged in timely effects bargaining
with the Union, it has been shown with reasonable certainty
that timely effects bargaining could not have enhanced the
entitlements actually received by the employees in connec-
tion with the takeover of the facility.
This is not to suggest that there would be nothing to ‘‘bar-
gain’’ about if the Union were now to engage in bargaining
with Respondent over the impact of Respondent’s quitting
the scene. Clearly, Respondent’s withdrawal as an employer
of the unit employees leaves lingering questions which the
Union may responsibly insist that Respondent must meet to
discuss. Thus, to cite some obvious examples invoked at var-
ious points in these proceedings by the General Counsel or
the Union, the Union has not yet received enough informa-
tion to know whether Respondent violated the contract or
governing wage and hour laws in compensating certain em-
ployees at straighttime pay rates; and, assertedly, the Union
has doubt that Respondent in fact has paid Jane Johnston the
agreed-on sum associated with the settlement of the griev-
ance over her disciplinary citation. Manifestly, the Union has
a right to the information it sought on October 3 to deter-
mine whether further grievance or enforcement actions must
take place, and Respondent’s failure to produce such infor-
mation has made it difficult to determine whether further ac-
tions or discussions on those points would be worthwhile.
But the central point here is that such issues do not stem
from Respondent’s failure to give timely notice of the suc-
cessor’s takeover; they were unrelated to the takeover, and
they are matters which are only loosely termable as ‘‘effects
bargaining’’ issues. Indeed, the matters specifically raised on
this record would appear to depend for their resolution not
so much on the give-and-take of collective bargaining as on
the underlying facts, easily determinable by reference to Re-
spondent’s records, once Respondent discloses them. And, to
that extent, it does not reguire a Transmarine ‘‘backpay’’
order to restore ‘‘bargaining strength’’ to the Union to
achieve a resolution of them. The Union’s power to resolve
such issues never depended on any such ‘‘strength’’; it al-
ways depended solely on the underlying facts and the legal
merit of any contractual or statutory claims which the Union
might make once it was given access to those facts.
I thus repeat that, unlike all Transmarine cases cited by
the General Counsel, including Signal, supra, in this case the
General Counsel has failed to identify any ‘‘adverse’’ effect
on unit employees occasioned by the successorship, and has
further failed to demonstrate any reasonable possibility that
the Union might have gained concessions from Respondent
which would enhance the wages, benefits, or other employ-
ment conditions which the employees did receive in connec-
tion with the successorship. In the circumstances, the General
Counsel’s regular invocation of the notion of ‘‘lost bar-
gaining strength’’ amounts to hollow rhetoric, an insufficient
basis on which to pin the General Counsel’s demand for a
Transmarine ‘‘backpay’’ remedy.
I thus decline to recommend such a remedy and shall in-
stead recommend that Respondent be ordered to cease and
desist from the unfair labor practices found above, to furnish,
on the Union’s demand, the information requested in its Oc-
tober 3 letter, to meet promptly, on the Union’s request, to
bargain collectively in good faith with the Union with re-
spect to all mandatory bargaining subjects, and to sign and
post at the Santa Cruz hospital facility, the successor being
willing, an appropriate notice.36
On these findings of fact and conclusions of law and on
the entire record, I issue the following recommended37
ORDER
The Respondent, Santa Cruz Convalescent Hospital, Inc.,
d/b/a Live Oak Skilled Care & Manor, Santa Cruz, Cali-
fornia, its officers, agents, successors, and assigns, shall
1. Cease and desist from failing and refusing to give the
Union timely advance notice of its decision to assign its
rights to the operation of the hospital facility in question to
another operator, from failing and refusing to furnish to the
Union the information it requested on October 3, 1989, and
from failing and refusing to meet and bargain collectively in
good faith with the Union about any and all mandatory sub-
jects of collective bargaining associated with that transfer of
operations or associated with Respondent’s own compliance
with its collective-bargaining agreement with the Union, or
in any like or related manner interfering with, restraining, or
coercing euployees in the exercise of the rights guaranteed
them by Section 7 of the Act.
2. Take the following affirmative action necessary to ef-
fectuate the policies of the Act.
(a) On the Union’s request, promptly furnish the Union
with the information sought in its October 3, 1988 letter de-
manding the same.
1054 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
38 If this Order is enforced by a judgment of a United States court of ap-
peals, the words in the notice reading ‘‘Posted by Order of the National Labor
Relations Board’’ shall read ‘‘Posted Pursuant to a Judgment of the United
States Court of Appeals Enforcing an Order of the National Labor Relations
Board.’’
(b) On the Union’s request, promptly meet with the Union
at regular intervals and bargain collectively in good faith
with respect to any and all mandatory subjects of bargaining
and, if an agreement is reached on any such subjects, reduce
the same to writing, and sign it.
(c) Sign copies of the attached notice marked ‘‘Appen-
dix.’’38 Copies of the notice, on forms provided by the Re-
gional Director for Region 32, after being signed by the Re-
spondent’s authorized representative, shall be posted by the
successor here, Live Oak Care Center, Inc., at the Santa Cruz
Hospital facility, if the said successor is willing, for 60 con-
secutive days in conspicuous places including all places
where notices to employees are customarily posted. If the
said successor is not willing to post these notices, Respond-
ent shall mail signed copies of the same individually to each
bargaining unit employee employed by Respondent as of
September 30, 1988.
(d) Notify the Regional Director in writing within 20 days
from the date of this Order what steps the Respondent has
taken to comply.