Lori-Ann of Miami, Inc.

National Labor Relations Board - Board Decisions

Jun 29, 1962

137 N.L.R.B. 1099 (N.L.R.B. 1962)

LORI-ANN OF MIAMI, INC., ETC. 1099
and therefore used him to notify only the others about their layoff ; and now letting
him go, decided to avoid future trouble by terminating him and his wife permanently.
One may wonder , but whether this favors the General Counsel or the Company,
there is no profit in such speculation . No more than did the General Counsel offer
a theory or explanation supported by the evidence to prove discrimination, has the
Company offered this or any other to show absence of unlawful intent. But
as noted, the burden is on the General Counsel. If there is more than meets the eye
on the record , we may not go beyond that record and the evidence adduced. In
short , the burden is not on the Company to show that it did not discriminate. If it
did yin fact discriminate (on the record before us I would make no positive finding in
its behalf ), that fact has not been shown ; we have a failure of proof.
Similarly, if Vilas and Montero were discharged because they or either of them
urged an employee to strike in support of Guihan on July 20 , as testified to and denied,
this was brought out only to throw light on what Vilas had urged at Guihan's house
the night before, and to show that it was not protected activity . A finding of dis-
charge for that reason would not sustain the allegation of unlawful discrimination.
Sarrain testified that, when he returned for his check on July 28, work on sliding
windows was being done by Americans , not Cubans . It is not clear whether the wit-
ness or the General Counsel here intended to indicate company prejudice against
Cubans. Its employment policy appears to negate any such charge , but in any event
such a charge , so far from proving ,the alleged violation , would provide a contrary
motive, however unworthy in itself.
I do not conceive it to be my duty to anticipate all possible arguments which may
be made to the Board for the first time, no brief or argument p inpointing his claims
having been submitted to me by .the General Counsel, and assuming that the Board
will accept such new arguments . But I have sought to analyze the testimony and the
impressions made by the witnesses as these bear on the recognized positions of the
respective parties. To the extent that new arguments or approaches may be submitted,
the Board will have the record before it; but it will not have the opportunity to re-
late this to the demeanor of the witnesses.
Upon the basis of the above findings of fact , and upon the entire record in the
case, I make the following:
CONCLUSIONS OF LAW
1. The Company is engaged in commerce within the meaning of the Act.
2. United Steelworkers of America, AFL-CIO, is a labor organization within the
meaning of Section 2(5) of the Act.
3. The Company has not engaged in unfair labor practices within the meaning of
Section 8 (a) (3) or (1) of the Act.
RECOMMENDED ORDER
Upon the basis of the foregoing findings of fact and conclusions of law, and upon
the entire record in the case, I recommend that the complaint be dismissed in its
entirety.
Lori-Ann of Miami, Inc., Rose Uniforms , Inc., Rose of Miami,
Inc. and Myron Warshaw and Local 415, International Ladies'
Garment Workers' Union , AFL-CIO. Case No. 12-CA-°027.
June 29, 1962
DECISION AND ORDER
On February 7, 1962, Trial Examiner John P. von Rohr issued his
Intermediate Report in the above-entitled proceeding , finding that
Respondents Lori-Ann of Miami, Inc., and Myron Warshaw had en-
gaged in certain unfair labor practices and recommending that it
cease and desist therefrom and take certain affirmative action, as set
forth in the Intermediate Report attached hereto. The Trial Ex-
aminer also found that the Respondents had not engaged in certain
137 NLRB No. 114.
1100 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
other unfair labor practices and recommended that those allegations
of the complaint be dismissed. Thereafter the General Counsel and
the Charging Party filed exceptions and supporting briefs and the
Respondents filed a reply brief.
Pursuant to the provisions of Section 3 (b) of the National Labor
Relations Act, the Board has delegated its powers in connection with
this case to a three-member panel [Chairman McCulloch and Mem-
bers Leedom and Fanning].
The Board has reviewed the rulings of the Trial Examiner and finds
that no prejudicial error was committed. The rulings are hereby
affirmed. The Board has considered the Intermediate Report, ex-
ceptions, briefs, and the entire record in the case, and hereby adopts
the Trial Examiner's findings, conclusions, and recommendations.'
ORDER
The Board adopts, as its Order, the Recommendations of the Trial
Examiner.
'The Trial Examiner found that Respondents Lori-Ann of Miami, Inc ., and Myron
Warshaw, by failing to notify the Union that they would close the Lori-Ann plant, vio-
lated Section 8(a) (1) and (5) of the Act and recommended that if and when said Re-
spondents resume operations they shall , upon request , bargain with the Union. As no
exceptions have been filed by said Respondents with respect thereto, we adopt this finding
and lecommendat1on p) o Jo? Ina
JNTERMEDIATE REPORT
STATEMENT OF THE CASE
Upon a charge and an amended charge filed on June 2 , 1961, and August 14,
1961, respectively, the General Counsel of the National Labor Relations Board, for
the Regional Director of the Twelfth Region (Tampa, Florida), issued a complaint
and an amendment to the complaint on August 16, 1961 , and September 28, 1961,
respectively, against the Respondents named in the caption , above, alleging that the
Respondents had engaged in and were engaging in certain unfair labor practices
affecting commerce within the meaning of Section 8(a)(1), (3 ), and (5) of the
National Labor Relations Act, as amended, 61 Stat. 136, herein called the Act. The
Respondents ' answer denies the allegations of unlawful conduct alleged in the
complaint , including the amendments thereto.
Pursuant to notice , a hearing was held in Miami, Florida, on November 13, 14,
15, and 16 , 1961, before Trial Examiner John P. von Rohr. All parties were repre-
sented by counsel and were afforded opportunity to adduce evidence, to examine and
cross-examine witnesses , and to file briefs. Briefs filed after the close of the hearing
by the Respondents and the General Counsel have been carefully considered.,
Upon the entire record in this case, and from my observation of the witnesses, I
hereby make the following:
FINDINGS OF FACT AND CONCLUSIONS
1. THE BUSINESS OF THE RESPONDENTS
Respondent Lori-Ann of Miami, Inc.. hereinafter also called Lori-Ann, is a Florida
corporation with its principal plant and place of business located in Miami, Florida,2
i Subsequent to the hearing I also granted a motion by the General Counsel to make
certain corrections in the transcript of this proceeding. The motion containing the cor-
rections has been made a part of the General Counsel's exhibit file.
S As noted hereinafter , Lori-Ann ceased operations and closed its plant on May 12, 1961
However, Lori -Ann has not been dissolved as a corporation and continues to maintain its
corporate identity.
LORI -ANN OF MIAMI, INC., ETC. 1101
where it has been engaged in the performance of services on ladies' dresses and
blouses and in the manufacture of children's uniforms. During the 12-month period
from May 1960 to May 1961, Respondent Lori-Ann shipped products to points
located outside the State of Florida valued in excess of $50,000. I find that Respond-
ent Lori-Ann, at all times material herein, is and has been engaged in commerce
within the meaning of Section 2(6) and (7) of the Act.
Respondent Rose Uniforms, Inc., is a Florida corporation with its principal
office and place of business located in Hialeah, Florida, where it is engaged in the
manufacture of children's school uniforms. During the first 4i months of its
production operations, this being the only period for which commerce data was
available prior to the issuance of the complaint, Respondent Rose Uniforms, Inc.,
received materials shipped to it from outside the State of Florida valued in excess
of $20,000. On the basis of the foregoing, projected over a 1-year period, this
Respondent's out-of-State inflow will exceed $50,000 annually.3 Accordingly, I
find that Respondent Rose Uniforms, Inc., is and has been engaged in commerce
within the meaning of Section 2(6) and (7) of the Act.
II. THE LABOR ORGANIZATION INVOLVED
Local 415, International Ladies' Garment Workers' Union, AFL-CIO, is a labor
organization within the meaning of Section 2(5) of the Act.
HI. THE ALLEGED UNFAIR LABOR PRACTICES
The Issues
The principal allegations of the complaint as they frame the issues herein are
that Respondents Lori-Ann of Miami, Inc., and Myron Warshaw closed their Miami
plant, discharged employees, and moved their production operations to a new plant,
Rose Uniforms, Inc., in Hialeah, Florida, in violation of Section 8(a)(1), (3), and
(5) of the Act; that Rose Uniforms is the alter ego, or alternatively the successor, to
Lori-Ann, and as such is responsible for the unfair labor practices alleged to have
been committed by Lori-Ann and Warshaw; and that Respondent Rose Uniforms,
Inc., independently violated Section 8(a)(1), (3), and (5) of the Act.
A. The facts
1. Background
It might be well to note at the outset that many of the basic facts involved herein
are not in dispute. Accordingly, and having considered all of the evidence, it will
not always be necessary to refer to specific testimony or documentary evidence in
setting forth the facts as they appear below except in those instances where there
is some material conflict.
Lori-Ann of Miami, Inc., was engaged in the manufacture of ladies' blouses and
children's school uniforms at its plant in Miami, Florida, from May 27, 1957, until
May 12, 1961, at which time it closed its plant and ceased all operations. Respondent
Myron Warshaw is the president and general manager of Lori-Ann and together
with his wife owns all of the stock in the Company. Warshaw and his wife are
also this Company's only directors.
On April 7, 1959, Lori-Ann voluntarily recognized the Charging Union herein
as the bargaining agent for all of its nonsupervisory employees (i.e., production
employees) and on that date executed a collective-bargaining agreement with the
Union which was to remain in effect until October 15, 1960, subject to the usual
automatic renewal clause. On April 5, 1961, the parties executed a supplemental
agreement which was to remain in effect to August 31, 1963.
The number of employees employed by Lori-Ann fluctuated from time to time in
accordance with the volume of the Company's business. At the time of the signing
of the supplemental contract on April 5, which was approximately 6 weeks before the
cessation of operations, Lori-Ann employed approximately 41 production employees,
these including 9 employees who had worked for less than 30 days.
In addition to Warshaw, the production employees were chiefly under the super-
vision of Ledya Marroquin, the floorlady. Lori-Ann's bookkeeper, about whom
more will be said, was Ruth Blum.
Respondent Rose of Miami was registered as a business enterprise under Florida's
fictitious name statute in 1958, with Myron Warshaw as president. However, it
has no issued stock and it has never employed any employees. It appears that the
3 The Board has adopted the procedure of projecting available commerce data so as to
encompass a 12-month period. See Marston Corporation, 120 NLRB 76.
1102 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
sole function of this enterprise was related to the label or trade name "Rose of
Miami" under which Lori-Ann manufactured and sold children's school uniforms
during the slack season . Labels bearing the name "Rose" and the impression of
a flower were affixed to all such uniforms.
Before turning to the events which lead to the issues herein , it should be
noted that Lori-Ann principally was engaged in the business of what is known in
the garment industry as a contractor. As distinguished from a manufacturer, a
contractor is one who receives materials (principally cloth) directly from the
wholesaler, performs (according to prearranged specifications) the necessary cut-
ting, trimming, and sewing operations to complete a finished garment, and then
returns the finished garment to the wholesaler. Thus, a contractor has no financial
investment or interest in the raw materials from which the finished product is
made. With the use of his plant and equipment, he simply provides the labor and
know-how to perform the manufacturing operation. On the other hand, a manu-
facturer in the garment industry is one who purchases his own raw materials and
in addition himself performs the necessary finishing operations. A further dif-
ference in these businesses is that whereas a contractor will sell his services to a
wholesaler, a manufacturer will sell his finished product to its own customers.
As noted above, Lori-Ann's principal business was that of a contractor. However,
during the summer months Lori-Ann customarily experienced a slack season insofar
as its contracting operations were concerned. During these seasonal slack periods
Lori-Ann continued in operation by acting as a manufacturer of children's school
uniforms, a product which it sold directly to stores and various children's educational
institutions.
The events about which we are here concerned occurred in the late winter and
spring of 1961 during which time Lori-Ann was engaged in its principal role of con-
tractor. During this period 75 to 85 percent of its total business was devoted to
performing contracting work on blouses for Judy Bond, Inc., a wholesaler located
in New York.
It is undisputed that certain wage and fringe benefits granted to the Union in the
supplemental agreement of April 5, 1961, were acquired only as the result of Judy
Bond's agreement to absorb the cost of such benefits. As will be noted more fully
hereinafter, Judy Bond to some extent participated in the bargaining negotiations
leading to the execution of the supplemental agreement as evidenced by its direct
dealings in New York with the International Ladies' Garment Workers' Union, to
which the Charging Local Union, the party to the supplemental agreement, is an
affiliate.
Of significance to the issues in this case is the fact that neither the original con-
tract nor the supplemental agreement provide for any specific piece rates on the
various piece-rate operations performed by the employees. In this connection, the
contract between the parties provides as follows:
The method of setting piece rates shall be mutually agreed on between the Em-
ployer and the Union. (Article VII, section 4.)
Wherever a dispute arises concerning a piece rate, such dispute shall be ad-
justed in accordance with the grievance procedure provided in this agreA-
ment. . . . (Article VII, section 8.)
The evidence reflects that until the time of the piece-rate dispute noted below, the
Respondent and the Union managed to adjust the piece-rate grievances of indi-
vidual employees amicably and without difficulty.
2. The Union's demand for a piece-rate increase; the closing of Respondent Lori-Ann
In early April 1961, shortly after the signing of the supplemental agreement, the
Union's business agent, Harry Metz, received a complaint from certain of Lori-
Ann's employees to the effect that they were not receiving adequate pay for piece-
rate operations. After looking into the matter, Metz appeared at the plant about
the middle of April 'and presented Warshaw with a price sheet, at the same time re-
questing that Respondent Lori-Ann pay the increased piece rates as specified thereon?
4 The testimony of Warshaw and Metz does not disclose the exact date of this meeting
at the plant. Moreover, both Warshaw and Metz testified that they had more than one
discussion concerning the Union's requested piece-rate increase Beyond this they did not
elaborate It appears, however, that the crucial meeting was that mentioned above where
Metz appeared at the plant and presented the Union's demands in the form of an itemized
price sheet
LORI-ANN OF MIAMI, INC., ETC. 1103
While the record does not disclose the total dollar increase which such wage increase
would cost the Company, the evidence is clear that the increases thus demanded by
the Union and as itemized on the price sheet applied to and included substantially
all of the piece-rate operations which were then being performed in the contracting
operations for Judy Bond. Warshaw replied to the Union's demand by stating that
he was not financially able to absorb any further increase but that he would contact
Judy Bond to see whether the latter company would agree to meet and absorb the
increase. Subsequently, apparently within a day or two, Warshaw telephoned
Theodore L. Marantz, an official of Judy Bond, and advised him of the Union's
latest wage demand. Warshaw was queried several times during the hearing con-
cerning this conversation with Marantz. While his testimony in this regard contained
some minor inconsistencies, my analysis of all the testimony clearly indicates, and
I find, that during this conversation Warshaw sought to ascertain from Marantz if
Judy Bond would absorb the latest union wage demand and that this request was
refused by Marantz.5 Upon this refusal, Warshaw and Marantz agreed that Lori-
Ann would complete the work for Judy Bond which was then being processed in
the machines, but that no further work would be done for Judy Bond. Marantz
further stated that a man would be dispatched from Judy Bond to pick up all the
materials which were not in the machines.
Lori-Ann proceeded to finish the work in the machines and several days later a
Judy Bond employee came to the plant and removed all the remaining materials
In the meantime, and as indicated in footnote 5, supra, Union Representative
Metz also received a telephone call from Marantz of Judy Bond in which Marantz
apprised him of the results of his conversation with Warshaw and advised him of
everything that was taking place.? Metz appeared at the plant a day or two later
and observed the packing of the material not in the machines for return to Judy
Bond. On this occasion Metz spoke to Warshaw who advised him, among other
things, that he would seek to obtain other work from Judy Bond in the form of more
expensive merchandise, but that unless he received other work he might be forced
to close down.8 Metz thereupon volunteered, as he put it, "to see some manu-
facturers in town to see if I could get him some work " It is undisputed that shortly
thereafter Metz' efforts resulted in Lori-Ann's procuring an agreement from McKay
of Miami for the manufacture of 900 dresses.9 This work, together with a few
other odd lots, was completed in the ensuing weeks. Lori-Ann ceased all operations
and terminated its employees on May 12, 1961. Whether the shutdown was for
economic reasons, as Respondent Lori-Ann contends, or whether it basically resulted
from -a desire to avoid bargaining with the Union, as the General Counsel contends,
is a matter reserved for discussion hereinafter.
3. The formation of Respondent Rose Uniforms, Inc.
The president of Respondent Rose Uniforms, Inc., Gerald T. Simon, is an indi-
vidual who prior to the organization of this company was engaged in a variety of
business enterprises. When Simon first met Myron Warshaw in late 1959 or early
5Indeed, Union Agent Metz testified that shortly after this he received a call from
Marantz wherein Marantz told him about his telephone conversation with Warshaw
Metz' testimony concerning what Marantz told him on this occasion in effect substantiates
the testimony of Warshaw's version of this conversation
U In finishing this work for Judy Bond the Lori-Ann employees were paid the increased
piece-work rates which the Union through Metz had requested In this connection
Warshaw testified that "Judy Bond agreed for the purposes of allowing me to finish the
work that had already been strated they allowed . . . a fifty cents a dozen increase over
the prevailing price just on the work that was in the machines to finish because this was
the work that they needed very badly."
There is also some undeveloped testimony by Metz, which was never fully explained,
to the effect that sometime in April 1961, he and Warshaw agreed to certain piece rates,
but that a day or two later Warshaw called him and told him that "he couldn't afford to
pay these rates as he was losing money on that type of an operation " Later in the
testimony Warshaw also testified that on one occasion in April he and Metz agreed to
certain piece-work prices on Judy Bond blouses, but his testimony was interrupted at
this point and he did not elaborate further.
4 Testimony of Metz.
9 While there is a slight variance in the testimony of Metz and Warshaw as to what was
said at this time, I find this to be the substance of their conversation.
U This was a contracting operation where McKay, like Judy Bond, furnished the mate-
rial to Lori-Ann for processing
1104 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
1960 , he and one Ralph Edelstein conducted a real estate business under the firm
name of "Metro Realty, Inc." In addition to participating in the real estate business,
Simon also sold insurance and at the same time acted as sales agent for the American
Industrial Leasing Corporation, the latter a company which leased all types of
industrial machinery. It was his latter position that led to his acquaintance with
Warshaw . Warshaw, about the time mentioned above, was interested in leasing
additional machinery for Lori-Ann.10 Ruth Blum, employed as bookkeeper for
Lori-Ann and secretary to Warshaw , was a personal friend of Simon 's and it was
she who introduced Warshaw to Simon . Simon , upon learning of Warshaw's interest
in leasing machinery for his Miami plant, undertook a credit survey of Warshaw
and Lori-Ann. The survey indicated that neither Warshaw nor Lori-Ann had suffi-
cient credit rating, that rather they were in need of financial assistance . Accordingly,
the transaction never took place. However, as a result of the survey which he had
made, Simon obtained a rather extensive knowledge of Lori-Ann business operations.
Simon testified that thereafter he gave the matter some thought and became par-
ticularly interested in the school uniform phase of Lori-Ann's business." Accord-
ingly, early in 1961 Simon discussed this possibility with his partner, Ralph Edel-
stein , and they eventually decided to set up a business as a sales agency to sell
children's school uniforms. Subsequently, during the months of February, March,
and April, Simon, with Warshaw's permission, spent some time at the Lori-Ann
plant for the purpose of familiarizing himself with the operations.
Rose Uniforms , Inc., hereinafter also called Rose , was incorporated as a Florida
corporation on March 23, 1961. The evidence is clear, and I find, that at this time
Rose was set up for the specific purpose of acting as a sales organization for the sell-
ing of children's school uniforms. From the time of its incorporation to the date
of the hearing its sole officers were comprised of Gerald T. Simon, president, and
Ralph Edelstein, secretary-treasurer. The stock of Rose Uniforms, Inc., is owned by
Simon and Edelstein jointly with their wives.
Shortly after the incorporation of Rose Uniforms in March, Simon sent out sales
brochures to various prospective customers. These brochures, which pictured chil-
dren's uniforms, bore the address of "Rose Uniforms, Inc., 2110 N.W. Miami Ct.,"
which was the same address as the Lori-Ann plant.12 The brochures also bore the
same red rose symbol as that of Rose of Miami, Inc., and other descriptive language
therein stated "Fit . . . a point of pride with Rose of Miami."
At this point in the narration of the facts, a determination must be made as to what,
if any, agreement or understanding existed between Warshaw and Simon pertaining
to Lori-Ann's performing school uniform subcontracting work for Rose Uniforms,
Ine.13 The only testimony of Warshaw concerning this subject was to the effect
that Simon approached him toward the end of April and presented him with the
proposition that Lori-Ann act as a contractor of uniforms for Rose Uniforms, Inc.;
and further that "I lent some encouragement to it, because of what was taking place
with the Lori-Ann business." Simon testified that about the time when he sent out
the Rose Uniform brochures he still was considering the possibility of having certain
other Miami manufacturers act as subcontractor for Rose Uniforms, but that "we
definitely had in mind where we would be able to give Lori-Ann of Miami at least
part of the work or to get them to do part of the work for us." In view of this
latter testimony, coupled with Simon's close association with Warshaw at the plant
during this period, the utilization of the Rose of Miami symbol,, and the listing of
1u This was about the time Lori-Ann first procured its contracting business from Judy
Bond.
11 It will be recalled that Lori-Ann, as a manufacturer, made and sold children's school
uniforms during the off-season summer months.
12 Simon testified that during this period it was convenient for him to receive some of
his mail at the Lori-Ann plant and that be received permission from Warshaw to do so.
13 It is perhaps appropriate at this point to pass some comment upon the credibility of
Simon and Warshaw as witnesses , particularly since many of the events concerning which
they testified were peculiarly within their knowledge. In this connection, it was my
observation that at times both Simon and Warshaw tended to be evasive in answering
questions put to them by the General Counsel who called them as adverse witnesses. Thus,
in certain aspects of their testimony, on cross -examination as well as on direct, I am not
convinced that Simon and Warshaw always disclosed everything they knew to be a fact.
On the other hand, I am convinced that many of the events concerning which they testified
occurred in direct accordance with their testimony In short, I have accepted and relied
upon a substantial part of the testimony of Warshaw and Simon, but not all of it See
the comment of Judge Learned Hand in N.L.R B. v. Universal Camera Corporation, 179
F. 2d 749 (C.A. 2).
LORI-ANN OF MIAMI, INC., ETC. 1105
Lori-Ann's address in the brochures which Simon sent out, the conclusion is in-
escapable, and I find that, at some period between March and early April, Warshaw
and Simon reached an agreement or understanding that Lori-Ann would engage in
the manufacture of children's school uniforms as subcontractor for Rose Uniforms,
Inc.14 The record is silent as to what volume of work was thereby envisioned.
4. Warshaw's affiliation with Rose Uniforms as manager; the leasing of Lori-
Ann machinery to Rose; Rose commences operations
Due to the decision of Warshaw to cease Lori-Ann operations, the above agree-
ment that Lori-Ann act as subcontractor for Rose was never carried out. While
Warshaw did not identify the exact date when he made this decision, the evidence
indicates that the decision to close Lori-Ann was reached just after Warshaw learned
that Judy Bond would not absorb the Union's latest wage demand, which, it will be
recalled, was in the middle of April.
According to Warshaw, Lori-Ann was in severe financial straits at this time
and could not continue in business.15 While the record again is not clear as to the
exact dates of subsequent events, it appears that it was in the latter part of April
that Warshaw, according to his testimony, proposed to Simon that he lease the
Lori-Ann machinery for use in the Rose plant. Simon testified that at this time he was
aware that Warshaw was about to close the Lori-Ann plant.16 Upon receiving
Warshaw's proposal to rent the machinery, it was Simon's testimony that he then
discussed the matter with Edelstein and they decided that Rose would enter into the
manufacturing end of the business. Warshaw's proposal to rent the machinery was
accepted and about the same time Warshaw and Simon reached an agreement that
Warshaw would become the general manager of Rose Uniforms, Inc.17 As far as can
be ascertained from the record, this agreement was reached about the last week of
April. During the remaining 2 or 3 weeks prior to Lori-Ann's closing on May 12,
Warshaw undertook several activities in preparation for his assumption of duties as
manager for Rose. On such activity included his participation in the readying of the
Rose plant for manufacturing operations. The Rose plant is located in Hialeah,
Florida, about 10 miles distant from the former Lori-Ann plant in Miami. Prior to
occupancy, Simon had made arrangements to purchase the plant building from one
Harold Goldfarb, the former owner.18 The building was a new one, its construction
having just neared completion in early May 1961.19 However, certain interior work
remained to be performed before the plant was ready for manufacturing operations.
The evidence -reflects that in the main this consisted of installing the electrical wiring
It is clear that there never was any written agreement between the parties to this
effect.
16 The evidence concerning the financial status of Lori-Ann doling this period is dis-
cussed later in this report
" It might be noted that Simon testified, when first called as an adverse witness by the
General Counsel, that he at this time was aware that Warshaw was having "troubles with
the Union." When his attorney subsequently asked him to explain what he meant by
this, Simon testified, "Well, I knew that the union had come in and asked or demanded
some sort of increase in wages . . . but Mr Warshaw made it plain to me that he
would have a losing proposition with Judy Bond if he had to pay these increases in wages."
17 With respect to his agreement to become manager for Rose, Warshaw testified, "I
don't know just how it came about, whether he asked me or I asked him " As indicated
in footnote 13, supra, Warshaw here was being rather obviously reticent concerning a
matter about which he must have been more aware.
18 The record does not indicate when Simon first agreed to purchase the building from
Goldfarb However, Simon testified that an initial deposit was made with Goldfarb on
or about April 25 or 26. Simon testified that on this occasion he neglected to take a
check with him but that Warshaw, who accompanied him and who on this occasion saw
the new plant for the first time, accommodated by giving him a personal check for a
$500 deposit. This sum was repaid by a Rose Uniform check dated April 27 payable to
Mrs. Warshaw. (Respondent's Exhibit No. 3.)
19 Title to the Rose Uniform plant building was taken in the name of Rimshaw, Inc,
on May 12, 1961 It appears that Rimshaw, Inc., was set up for the specific purpose of
taking title to the building The mortgage deed of May 12 reflects that Simon and
Warshaw signed as president and secretary of this corporation, respectively. Simon
testified that Warshaw was made secretary of Rimshaw, Inc, only as a matter of con-
venience for the signing of the incorporation papers, that he had no financial interest in
or received no remuneration from this corporation Warshaw resigned from this posi-
tion in June or July 1961 and was succeeded by Ralph Edelstein as secretary- treasurer.
649 8 50-63-vol. 137-71
1106 DECISIONS OP NATIONAL LABOR RELATIONS BOARD
and electrical outputs for the sewing and cutting machines. It is undisputed that, in
the early part of May, Warshaw planned this aspect of the plant interior and that
Goldfarb followed his instructions in making these completions?e
In addition to the foregoing, the record discloses that Warshaw also took part in
the solicitation of new business for Rose during the last week or so before the closing
of the Lori-Ann plant. Thus, during this period Warshaw took Simon around and
introduced him to various uniform customers of Lori-Ann. In one instance, on
May 2, Warshaw succeeded in obtaining an order from Belk's Department Store of
Coral Gables for uniform blouses and skirts to be manufactured by Rose Uniforms,
Inc., with delivery dates specified for June, July, and August, 1961.
We turn now to a fuller consideration of the agreement involving the lease of the
Lori-Ann machinery to Rose. The agreement itself was an oral understanding be-
tween Warshaw and Simon. It was never reduced to writing. According to the
uncontroverted testimony of Warshaw it was terminable at the will of either party.
Warshaw asserted throughout his entire testimony that it was not his intention to
abandon the Lori-Ann operation permanently, that his entire association with Rose
Uniforms, at least in the beginning, was on a temporary basis, and that he did not
want to make any commitments which would prevent him, if the opportunity afforded,
from reopening Lori-Ann. Thus, with respect to the at-will terminability of the
lease arrangement, Warshaw testified, "I wanted to be in a position to be able to
pull the machinery out if I ever had such an opportunity" (to reopen Lori-Ann
again).
Of the 33 machines involved in the lease arrangement, all but 2 were small, easily
movable Singer sewing machines, comparable to the type of sewing machine usually
found in homes. The others were light movable cutting machines. Warshaw testi-
fied that all but the cutting machines were purchased as used equipment. He esti-
mated that the machinery would be worth between $1,500 and $2,000 if sold on the
open market.
The lease arrangement fixed the rental paid by Rose at the rate of $500 per month.
For the first several months after Rose began operations the rental checks were made
payable directly to Lori-Ann. However, beginning in August 1961, the rental checks
from Rose were made payable directly to certain Lori-Ann secured creditors who
held the chattel mortgage and various other liens on the machinery.
Warshaw also agreed with Simon that Rose Uniforms be permitted to affix to its
uniforms the same "Rose-of Miami" label which Lori-Ann affixed to the school uni-
forms manufactured by it during the off-season months. While Warshaw did not re-
ceive any compensation therefor, Simon previously had purchased 3,000 or 4,000
such labels from Lori-Ann in contemplation of Rose acting as subcontractor for
Lori-Ann.
The actual moving of the machinery to the Rose plant took place during the
period between May 12 when Lori-Ann shut down and May 15 when Rose com-
menced operations.
Along with Warshaw as manager, other former Lori-Ann nonproduction personnel
to go to work for Rose included Ledya Marroquin, the floorlady, Ruth Blum, the
bookkeeper, and Martin Greenberg, the cutter, each of whom was engaged by Rose in
the same positions they formerly held with Lori-Ann. Simon testified that he hired
these people after having observed them at the Lori-Ann plant and after having dis-
cussed the matter with Warshaw.
Although technically the Rose Uniforms plant opened on May 19, 1961, the first
3 days were devoted to cutting operations in preparation for the actual production of
uniforms by the machine operators. The hiring of the latter employees was left
principally in the hands of Floorlady Ledya Marroquin. Marroquin testified that
at this time she hired girls "as I needed them." As of May 20, Respondent Rose
Uniforms employed 11 production employees, 10 of whom were former Lori-Ann
employees.
5. Actions taken by the Union subsequent to the closing of Lori-Ann
and after the opening of Rose Uniforms
The only testimony concerning any dealings by the Union with Respondent Rose
Uniforms came from Gerald T. Simon when called as an adverse witness by the
20 In describing the specifications for which he was thus responsible, Warshaw testified,
"Well, it was an electrical layout, the placing of the cutting department, the placement
of the machinery, so the operation could be one that could run as economically and effi-
ciently as possible "
LORI-ANN OF MIAMI, INC., ETC. 1107
General Counsel. 21 In addition to the testimony thus adduced, the General Counsel
also introduced in evidence two prior affidavits of Simon 22 Simon's testimony at the
hearing is in conformance with these prior sworn statements. Since Simon's affidavit
is somewhat more detailed than his testimony, the following is quoted therefrom as
the credited account of what occurred between Rose Uniforms and the Union after
the former commenced operations:
On or about May 22 or May 23, I was working on the boiler in our plant when
I looked around and saw Harry Metz in the building talking to some of the
girls. This was during working hours. . . . I went up to him and asked him to
stay away from the girls while they were working. I have seen Mr. Metz
before, a couple of times, at Myron Warshaw's plant-Lori-Ann-but I never
had been introduced or had spoken to Mr. Metz. . I knew Mr. Metz was a
representative of the Union, as Myron Warshaw had mentioned to me that Metz
was the union man. When I told Metz to stay away from the girls, he said "My
dear man, this is a union shop and I have every right to talk to the girls when-
ever I wish." I told him it was not a union shop, and I didn't mean to be im-
polite to him but he'd have to stay out of the shop during business hours. He
said something to the effect that "if you're not a union shop we'll have to get
you a contract."
I made some remark that "you better run downtown and get the contract and
hurry back with it. It's a real good idea. You'd better get it right away." .. .
Metz said that the Union was here to help me. I said something like "just like
they helped Myron (Warshaw) in the past." He said, "Well, Myron shouldn't
have taken in the work at such cheap prices." I told him I didn't know the de-
tails of what had happened at Myron's shop, that was the gist of the conversa-
tion. When I told him he'd better run down and get the contract I said that in
jest and I believe he took it the way I meant it.
Insofar as the record discloses, it appears that Simon had no further contact with
Metz.
The Union started to picket the Rose Uniforms plant on or about May 29, 1961.
The only other contact which Rose Uniforms had with the Union occurred a day or
two later when Simon had a discussion with William Krost, the Union's business
agent, whom he met on the picket line. The following is Simons version as set forth
in his affidavit, which is in conformance with his credited and uncontroverted testi-
mony concerning this meeting and discussion with Krost:
Yesterday afternoon [May 31] I went outside the factory and William Krost,
a union representative called to me and asked me why we couldn't discuss the
whole situation here. I did not know who Krost was at that time. I had
received instructions from my attorney, Mr. Schenerlein, that if the Union rep-
resentatives attempt ito contact me in any way, to tell them to get in touch with
him. My answer to him was for him to get in touch with Mr. Schenerlein.
This was about noontime.
Later in the afternoon, about 3:00 p.m. I was in the plant and Krost who was
outside the plant, motioned through the door for me to come outside. I did so
and he said he thought that there had been a misunderstanding because when
they [the Union] had called Roy [Scbenerlein] he had refused to make an
appointment with them. At this point, Krost said, "Well, why won't you sit
down and talk with us?" I explained to him that I couldn't see any reason to
do so. He said, "You should talk to us because we represent the employees
here." I explained to him that if I was sure that they did actually represent
my employees I'd be very happy so sit down and discuss these matters with him.
I explained to him that essentially I am a salesman and when I go into a firm
or school to get an order, I don't talk to the head of the shipping department,
first I find out who is authorized to give me the order. I told him the same ap-
plied to him and when the Union could show me proof that they are authorized
to represent my employees then we can get together.
a The General Counsel adduced no evidence through Metz or any other union representa-
tive concerning any contact by the Union with Rose Uniforms. Metz' only testimony
concerning this aspect of the case was that on one occasion he visited the Rose Uniforms
plant and spoke to Simon. He did not dispute the testimony of Simon, who had testified
before him, concerning the substance of a conversation he held with Simon shortly after
the opening of Rose Uniforms, as hereinafter related.
2a This testimony, including the statements made in the affidavits, are uncontroverted
and are credited by the Trial Examiner.
1108 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
He said , "Then that means we would have to have an election." I said,
"That's right." He said , "Well, there are many ways to do things and an elec-
tion might take quite a while ." I asked him how long "quite a while" was and
he said , "Sixty days." I just said , "However long it has to take, it has to take,"
but that I would make sure from our end that from our end we would do
everything to expedite an election and I hoped that he might do the same. That
is about the essence of the conversation.
B. Additional facts, analysis, and conclusionary findings
The general legal proposition applicable to an employer's shutdown of a plant or
moving its operations or sale of its business is that such conduct is .valid under the
Act if based upon economic considerations but is illegal if such conduct is based
upon an employer's union animus and a desire to avoid its obligations under the Act 23
The complaint in the instant case alleges, inter alia, that "Respondents Lori-Ann
and Warshaw closed and moved the operations . . . and discharged the employ-
ees . . . because the said employees were represented by the Union and engaged in
other union and concerted activities.. . For the reasons discussed below, I find
and conclude that the preponderance of the evidence does not sustain this allegation
of the complaint.
Perhaps it should be emphasized at the outset of this discussion that I have not
overlooked the secrecy practiced by Warshaw during the last 2 weeks of the Lori-Ann
operation in concealing his intent to close the plant, his arrangement to lease the
machinery, and his agreement to go to work as manager for Rose Uniforms. How-
ever, although such concealment may be one factor to be considered with respect to
motive, the element of concealment is not of itself sufficient to establish an illegal
motive. This is equally true with respect to an employer's past relations with his
bargaining representative. Thus, in the instant case the evidence is clear that Re-
spondent Lori-Ann, who initially recognized the Union on a voluntary basis, in the
past had enjoyed good relations with the Union. There is no evidence whatsoever
that Lori-Ann-or Warshaw-was an "anti-union" employer.24 But again, this is
but one factor to be considered and is not in itself decisive of the motive about which
we are here concerned.
From the facts of the case as heretofore related, it is manifest that the chain of
events which led to the ultimate closing of the Lori-Ann plant began with the
Union's demand for an increase in piece-rate wages. It is in the context of Respond-
ent Lori-Ann's obligation to bargain in good faith with the Union over this matter
that the General Counsel sets forth his hypothesis. Pointing out that under Section
8(d) of the Act the Respondent was not required to yield to the Union's demand, the
thrust of the General Counsel's argument is that in this situation Respondent Lori-Ann
did not meet its bargaining obligations in that rather than to resort to the contract's
grievance and arbitration procedure relative to piece-rate disputes. It precipitatively
"severed business relations with its principal customer, Judy Bond, . and closed
its plant." While this argument is plausible on its surface, it overlooks the unique
factor, not usually present in these cases, that here a third party, Judy Bond, was
intrinsically involved in the wage negotiations between Respondent Lori-Ann and the
Union. In this connection it will be recalled that Judy Bond had agreed to absorb
the Union's wage and other demands prior to the signing of the supplemental agree-
ment and it was upon this basis that these demands were met and the supplemental
agreement signed. Significantly, not only does the evidence reflect that the Union
acquiesced in this procedure, but it is clear that the Union itself participated in
negotiating with Judy Bond toward obtaining the benefits provided for in the supple-
2a Morris and David Yoseph, d/b/a M. Yoseph Bag Company, 128 NLRB 211; Sidele
Fashions, Inc, et at., 133 NLRB 547; N L R.B v Adkins Transfer Company, Inc, 109
NLRB 956, enforcement denied 226 F. 2d 324, 327 (C.A. 6) ; Mount Hope Finishing Com-
pany v. N L.R B., 211 F. 2d 365, 372 (C.A. 4) ; N L.R B. v The Houston Chronicle
Publishing Company, 101 NLRB 1208, enforcement denied 211 F 2d 848 (CA 5) ;
Industrial Fabricating, Inc, et al, 119 NLRB 162, enfd. sub noon N L R B v Fi ank
dfackneish, et at., 272 F. 2d 184 (C.A 6).
21 In the spring of 1961, the Union and Lori-Ann became involved in an arbitration pro-
ceeding which concerned the construction of provisions in their contract pertaining to
certain employer contributions to the Union's health and welfare fund I am unable to
agree with the General Counsel's suggestion that participation in this arbitration pro-
ceeding, which was in the exercise of the rights of both parties, was in some way mani-
fest of a Respondent opposition to the Union
LORI-ANN OF MMIIAZMI, INC., ETC. 1109
mental agreement. The extent of such participation is revealed in the following
letter dated April 4, 1961, from Marantz of Judy Bond to Warshaw: 25
DEAR MYRON: As we discussed in our phone conversation this morning:
The anticipated 21h% severance fund payments that your new contract will
call, should be handled as follows:
According to Charlie Kreindler, vice president, ILGWU, we will pay to the
New York local our regular retirement and severance funds payments. The New
York local will arrange for and pay directly to the Miami office of the ILGWU,
payments to cover the contract terms you will sign. [Emphasis supplied.]
Therefore, there should be no additional cost nor payments due from Lori-
Ann to the ILGWU as a result of these provisions.
I also understand, that as of July ,1, 1962, you will incur a 6% across the board
wage increase. We will have to face that problem at that time.
(Signed) THEODORE L. MARANTZ.
Returning to the Union's demand made in the middle of April 1961, which is here
at issue, we recall Warshaw's uncontradicted testimony of telling Metz that he
could not afford to meet such demand but that he would contact Marantz to see if
Judy Bond would agree to absorb the requested piece-rate increase. Metz not having
denied this testimony or having offered any further explanation with respect thereto,
I think it reasonable to infer, as I do, that on this occasion Metz acquiesced in
Warshaw's proposal that any increase be contingent upon Judy Bond's agreement to
absorb it. This is further borne out by the fact that, according to Metz' own testi-
mony, he received a call from Marantz a short time later in which Marantz advised
him that Judy Bond was taking back its unfinished material from the Lori-Ann
plant 26 Servicing as he did the Lori-Ann plant, Metz inevitably was aware of Lori-
Ann's almost entire dependence on Judy Bond's business to keep it in operation.
Yet, it is apparent that Metz made no attempt to alter or withdraw the Union's de-
mands when he was advised by Marantz that the Judy Bond material was about to
be removed, nor did he raise any objection with Warshaw upon his visit to the Lori-
Ann plant a day or two after his conversation with Marantz, at which time he
observed the packing of the blouse material for return to Judy Bond. Indeed, on this
latter occasion Metz merely advised Warshaw that he would attempt to obtain some
new business for Lori-Ann.
In view of all the foregoing, I am satisfied that Respondent Lori-Ann not only
satisfied its bargaining obligations with the Union over the matter under discussion,
but I find that Warshaw made a very real attempt to meet the Union's demand.
Contrary to the assertion of the General Counsel, the evidence does not sustain
his position that this Respondent seized the occasion of the Union's latest piece-
rate demand to shut down its plant for the purpose of getting out from under he
Union, so to speak. Lori-Ann had but recently executed a supplemental agreement
with the Union. When presented with a new demand only a few weeks later, this
Respondent advised the Union that it would take the matter up with its customer,
Judy Bond, a procedure which had been followed in the past. It in fact then took
this step, but Judy Bond refused to absorb any further increase.27 As will be discussed
below, the evidence does not establish that Lori-Ann itself was financially able to meet
the Union's demand. It is difficult to see what else this Respondent could have done
under the circumstances 28
w As previously indicated, the supplemental agreement was executed on April 5, 1961.
21 This direct communication by Judy Bond with the Union is additionally illustrative
of the extent to which Judy Bond was involved in the bargaining negotiations between
the Union and Lori-Ann.
n In his brief the General Counsel refers to certain testimony of Warshaw concerning
his conversation with Marantz which on its face appears to be self-contradictory with
respect to whether he or Marantz proposed that the Judy Bond material be removed from
the plant. However, having reviewed and considered all of the testimony on this subject,
I am satisfied and I find that in this conversation Warshaw sought to ascertain whether
Judy Bond would absorb the Union's wage demand and that such request was refused by
Marantz Moreover, it was Marantz' refusal to absorb the increase-not whether it was
Warshaw or Marantz who initiated the discussion concerning the removal of the material
from the plant-which is most relevant to the issue at hand
28 The General Counsel also argues that the Respondent should have followed the con-
tract's grievance and arbitration procedure with respect to the adjustment of piece
rates. However, these provisions refer to the "method" of setting piece rates, which was
not at issue here. Moreover, and as indicated above, the Union assented to Warshaw's
handling its piece-rate demand in the manner in which it did, i.e., by presenting the
1110 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
The evidence with respect to Lori-Ann's financial position at the time of the Union's
piece-rate demand can be described at best as being meager. No evidence concerning
its financial status was adduced from its books or records. The sole evidence in this
regard came from Warshaw, who, when asked by his counsel to describe Lori-Ann's
profit-and-loss position, testified as follows: 29 "Well, at the time of Lori-Ann's closing
our liabilities far exceeded our assets. I don't recall the exact figures . but we
owed I would say somewhere in the vicinity of $9,000 or $10,000 and with no liquid
assets at the time to liquidate such obligations."
Fragmentary though this testimony may be toward giving a comprehensive account
of Lori-Ann's financial affairs, the fact remains that this testimony is uncontroverted.30
The only conclusion which I can draw thereform was that Lori-Ann apparently was
operating on a shoestring basis.
The thesis of the General Counsel's argument appears to rest on his apparent
underlying contention that Respondent Lori-An deliberately maneuvered the loss of
Judy Bond as a customer in order to seek an excuse to go out of business, thereby
giving it the opportunity to discharge its employees and to avoid its bargaining obliga-
tions under the Act. As we have seen, the evidence does not sustain this conten-
tion. To the contrary, the evidence instead reflects that Respondent Lori-Ann made a
real but unsuccessful attempt to meet the Union's demand in the manner heretofore
described, but in the process lost the business of Judy Bond, its principal customer.
It will be recalled that Lori-Ann depended upon Judy Bond for 75 to 85 percent
of its business. The evidence is clear that at the time this business was lost there
was not sufficient other work to have made it economically feasible for Lori-Ann to
continue in operation.31 The General Counsel points out, however, that during the
previously discussed telephone conversation between Warshaw and Marantz, an
agreement was reached that Marantz would give Lori-Ann an opportunity to bid on a
better line of blouses, his inference being that the ceasing of operations in the face
of such prospective business is indicative of an alleged illegal motive.32 However, I
am satisfied that since the initial decision to close the plant was not illegally motivated,
it was Respondent's managerial prerogative, if it wished, not to speculate on future
developments.33
In view of all the foregoing, and while the issue is not free from doubt,34 it is
concluded and found that the preponderance of the evidence fails to sustain the
complaint's allegation that Lori-Ann's conduct in ceasing operations and terminating
matter to Judy Bond, which was in accordance with past practice. In any event, the
evidence is clear that at no time did the Union request or suggest that resort be made to
the contract's grievance and arbitration procedure as a device for handling its piece-rate
demand.
It is true , as the General Counsel points out, that in the past Lori-Ann had satis-
factorily negotiated with the Union adjustment of certain piece rates upon the complaint
of employees However, it is clear that these were scattered instances and involved only
a few individual piece-rate operations. These did not, as here, involve a broad demand
t.7 the Union for all, or at least substantially all, of Respondent's piece-rate operations.
29This testimony was received without any objection being made thereto.
25 In crediting Warshaw's uncontroverted testimony concerning Lori-Ann's financial
position, as I do, I regard as significant and have taken into consideration the fact, as
heretofore noted, that various creditors held liens on Lori-Ann's machinery.
Si The evidence reflects that during the period prior to its closing Lori-Ann was per-
forming small odd-lot operations for McKay of Miami and Hargee of Miami However, it
appears that these orders (which constituted but slightly more than 1 percent of Lori-
Ann's business at the time) were completed at the time Lori-Ann ceased its operations.
2 The General Counsel introduced in evidence a letter from Morantz to Warshaw dated
May 17, 1961, in which Morantz submitted sample styles, apparently for the purpose of
obtaining Lori-Ann's bid thereon. However, it is apparent that this letter was received
subsequent to the closing of Lori-Ann's operations.
3s This same conclusion is applicable to whatever prospects there may have been for
off-season uniform business during the coming summer months. As heretofore noted,
although Lori-Ann had previously agreed to act as contractor for Rose, there is no indica-
tion as to whether this would have resulted in any substantial amount of business for
Lori-Ann.
34 Lori-Ann's lease was about to expire on June 1, 1961. In this connection , Warshaw
intimated that his landlord, one Max Weitz, had proposed an increase in rent. However,
Weitz testified that any increase in rent was dependent upon Lori-Ann's taking additional
and expanded space in the Miami plant building . While this exaggeration by Warshaw
does not help the Respondent ' s cause, it is of no great weight toward establishing a
violation.
LORI-ANN OF MIAMI, INC., ETC.
its employees was illegally motivated. On the contrary, I find that the preponderance
of the evidence establishes such action to have been based upon valid economic con-
siderations.
A further allegation of the complaint is that Respondents Lori-Ann and Warshaw
refused to bargain within the meaning of Section 8(a) (5) by closing down its plant
and moving its operations without having given the Union an opportunity to confer
with Respondents with respect to such closing down and removal of the plant. While
the allegations pertaining to the alleged moving or removal of the plant is discussed
hereinafter, I find there is merit to the allegation that the Respondents failed to give
adequate notice to the Union concerning the plant closing and that it thereby violated
Section 8(a) (5) of the Act.
In an affidavit which he submitted to the Board prior to the hearing, Warshaw
stated as follows:
At the beginning of the last week I was in business, Metz was in my office and
I told him that I could not continue to operate under the circumstances we
were in and this was because of economic reasons. We could not continue
manufacturing at a loss. I do not believe I specified to him the day that 3 was
going to stop the operation.
At the hearing Warshaw attempted to stretch the point by insisting that "I did
apprise Mr. Metz of the fact that I was going to close down." Metz categorically
denied that Warshaw ever advised him that Lori-Ann was about to cease opera-
tions. I credit the testimony of Metz here over that of Warshaw. Without dwelling
upon the point, the record is abundantly clear that Warshaw purposefully and secretly
avoided disclosing to the Union any of his plans to close the Lori-Ann plant and go
to work for Simon as manager of Rose Uniforms, Inc. I so find. It is well settled
that the bargaining representative of the employees is at least entitled to notice of
and an opportunity to discuss action which will affect the employees' tenure with the
Company.35 By failing to give such notice, it is found that Respondents Lori-Ann
and Warshaw refused to bargain within the meaning of Section 8(a)(5) of the Act,
thereby also violating Section 8(a) (1) thereof.
It is found that the appropriate bargaining unit of Respondent Lori-Ann consists
of all its production employees, excluding office clerical employees, guards, and
supervisors as defined in the Act. It is also found that the Union represented a ma-
jority of the employees in the appropriate unit and was the collective-bargaining
agent.36
In substance the complaint further alleges that Rose Uniforms, Inc., is the alter ego
or successor of Respondent Lori-Ann; that as such it is responsible for any unfair
labor practices committed by Respondents Lori-Ann and Warshaw; that it inde-
pendently violated Section 8(a) (5) of the Act by refusing to bargain with the Union
upon request as the collective-bargaining agent for the employees in the appropriate
unit; and that it independently violated Section 8(a) (1) and (3) of the Act by fail-
ing and refusing to hire all of the former Lori-Ann employees.
It is to be noted that in his brief and argument the General Counsel principally
urges the alter ego theory, but in the alternative contends that Rose is a successor
to Lori-Ann.
The principal case relied upon by the General Counsel is the Board's decision in
Jack Lewis and Joe Levitan d/bla California Footwear Company.37 However, that
case is in material respects factually distinguishable from the case at bar. In Cali-
fornia Footwear the employer, under a lease arrangement, transferred all of his
manufacturing operations to a corporation (Trina Shoe Co.) owned by one of his
foremen, at the same time agreeing to purchase all of the shoes produced by the
latter corporation. Principal factors relied upon by the Board in its finding that
California was in realty the principal and Trina its alter ego or agent included the
significant fact that California furnished all of Trina's operating capital and that it
maintained control over the latter's payroll funds. Moreover, it is significant to note
that the owner of Trina, one Fellinan, was relegated to the status of a figurehead
3'Brown Truck and Trailer Manufacturing Company, Inc., et at., 106 NLRB 999;
M. Yoseph Bag Company, supra; Svdele Fashions, Inc., supra
w Without burdening this report with a discussion of all the evidence, I find the evi-
dence to establish that as late as April 5, 1961, the date of the signing of the supplemental
agreement, the Union's membership consisted of 18 of Lori-Ann's 32 employees in the
appropriate unit. Moreover, as the General Counsel points out, the current contract
between the Union and Respondent Lori-Ann raised a presumption of majority. The
Respondents adduced no evidence to the contrary. See Shami ock Dairy, Inc, et al,
119 NLRB 998.
37114 NLRB 765, enfd. In part 246 F. 2d 886 (C.A. 9).
1112 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
when Trina took over California 's operations . Thus, we note the following findings of
the Trial Examiner , as adopted by the Board in the California Footwear case:
In reality, the effect of the arrangement was that Fellman lent his corporate
structure to California for the sake of appearance but occupied , himself, a
position akin to that of foreman for California . His functions in supervision,
hiring, laying off, and discharging were no more than might have been per-
formed as a foreman . His signing of payroll checks was a necessary formality
to continue the appearance of a separate business . But Trina operated without
profit and no funds of its own. By advancing funds for Trina 's weekly payroll,
California was in a position to dictate how much should be paid for each em-
ployee, including Fellman and Albert Lewis. It is inconceivable that a presi-
dent and stockholder of an independent corporation , expecting no profit, would
set a salary for Albert Lewis, for the type of services which he performed,
larger than he set for himself.
In the instant case, Warshaw's sole position with Rose Uniforms is that of manager
at a salary which the record does not disclose . He is neither an officer , director,
nor stockholder of the Rose Uniform Company . Moreover , other than to lease his
machinery , Warshaw advanced no funds and has no financial interest in this com-
pany whatsoever . Under these circumstances , and notwithstanding that there here
may exist a few attributes generally associated with an alter ego relationship, I find
there is an absence of the requisite legal criteria to establish Rose Uniforms as the
agent or alter ego of Lori -Ann of Miami. Essentially lacking in this respect, as
disclosed in the facts hereinbefore related, is a showing that Lori-Ann of Miami
exercised any control in the overall functions and business operations of Rose Uni-
forms, Inc., or that the latter was required to give any accounting to the former.38
Although it is true that Warshaw was largely responsible for the Rose manufacturing
operations , it cannot be overlooked that his activities in this respect were performed
as a supervisory employee of the Rose Company . On the other hand, it certainly
cannot be said that Respondent's Rose Uniforms president , Gerald Simon, in any
sense acted as a mere figurehead in the affairs of this company . Not only did Simon
and Vice President Edelstein provide the financial capital for the new enterprise,39
but the evidence reflects that after its inception Simon devoted substantially 100
percent of his time in the active participation of the Rose Uniforms business. In
view of the foregoing , it is found and concluded that the evidence does not establish
Respondent Rose Uniforms , Inc., to be the agent or alter ego of Respondent Lori-
Ann. The same finding and conclusion is also reached with respect to General
Counsel's alternative position that Rose is the successor to Lori-Ann . While again
the situation in this case involves some of the characteristics associated with a suc-
cessor relationship , the factors mitigating against the establishment of a successor-
ship here are in the balance. Thus, a successorship generally envisions the purchase
of the former company's plant , its facilities , and its equipment . This, as we have
seen, was not the case here. Moreover , although remaining a segment of the gar-
ment industry , we have seen that the status of Rose as a manufacturer in contrast
to that of Lori-Ann as a contractor involved a very real and substantial change of
business methods and operations . Finally, in Piasecki Aircraft Corporation, 123
NLRB 348, the Board pointed to certain other factors , most of which are not present
in the instant case, which it deemed essential to the establishment of a successor
relationship . The Trial Examiner 's statement pertaining to these other criteria,
which was adopted by the Board, is as follows:
However , in the cases relied on by the General Counsel and the Union there
was present an identity of parties in both the predecessor and the successor, the
labor organization at the predecessor was certified by the Board less than a
year before the sale of transfer of the plant to a successor , or the successor
continued in the same business at the same location with an assumption of
"An agency may be defined as a contract either express or implied upon a considera-
tion, or a gratuitous undertaking , by which one of the parties confides to the other the
management of some business to be transacted in his name or on his account , and by which
that other assumes to do the business and render an account of it." American Juris-
prudence , vol. 2 at p 13.
'*Although there is no evidence that Edelstein actively participated in the Rose Uni-
form operations , I regard his status to this effect as not materially relevant to or dis-
positive of the issues in this case It might be added that at one time one Sol Alexander
also owned stock in Respondent Rose Uniforms , Inc. (See General Counsel's Exhibit
No. 20 ) It is not clear whether this stock was subsequently sold or transferred to Simon
and Edelstein.
LORI-ANN OF MIAMI, INC., ETC . 1113
liabilities and a transfer of intangibles such as goodwill or a trade name. Here
there was no identity of the parties as between Bellanca and Piasecki, nor was
there a recent certification of the Union. Moreover, although there was a
transfer of the supervisory personnel and much of the work in process, there
was no assumption of liabilities nor was there a transfer of trade name or
goodwill. [Citations to cases in text omitted.] 40
There remains one further comment with respect to the General Counsel's alter
ego or successor theory in this case. Thus, in the background of all the foregoing
discussion , it must be remembered , as heretofore found, that the evidence does not
establish the closing of the Lori-Ann plant to have been illegally motivated. In
California Footwear and other cases cited by the General Counsel, an illegal motive
was found to exist. It was a factor of primary importance in the Board's ultimate
decision in those cases . Furthermore , the cases cited involved a background of union
animus and independent violations of Section 8(a)(1) of the Act. There is no
evidence of antiunion conduct by any of the Respondents in the instant case.
We now turn to a further contention of the General Counsel, which is stated in
his brief as follows:
Assuming Rose is the "successor" to, and not alter ego of, Lori-Ann, it is sub-
mitted that, nevertheless, its refusal to bargain with the Union on the ground
of lack of majority was not in good faith. . . . On May 20, 1961, when Mr.
Harry Metz, the Union's business agent, visited the Hialeah plant and spoke
to Gerald Simon, Rose employed 11 production employees. Of this number, 10
were former Lori-Ann employees and 7 were members of the Union. As
Warshaw and his floorlady, Ledya Marroquin, did the hiring of employees at
Rose and knew of employees' union membership at Lori-Ann, this knowledge
being attributable to Rose, Rose could have no good faith doubt as to the
majority status of the Union on May 20, 1961.
Assuming the General Counsel's statement to be correct, including the assumption
that 10 of the 11 employees were still members of the Union at the time of Metz'
visit to Rose on May 20, 1961, this contention must fall by reason of the fact that
there clearly was no request by the Union to bargain on this occasion. Thus, it will
be recalled that on this occasion Metz merely told Simon that "this is a union shop
and I have every right to talk to the girls," and that "if you're not a union shop we'll
have to get you a contract." To this Simon replied, albeit facetiously, that Metz had
better "run down and get that contract." At this point Metz left the plant. He did
not return. It is well settled that a violation of Section 8(a)(5) cannot be found
unless there is an appropriate request to bargain.41 Evidence of an appropriate
request by the Union here is entirely lacking.42
There remains for consideration a final allegation in the complaint that Respond-
ent Rose Uniforms , Inc., failed and refused to reinstate former Lori-Ann employees
Maria Alvarez, Paulo Lorenzo , Esperia Peron, "and other employees whose names
are known to Respondent" in violation of Section 8(a)(3) of the Act. Maria
Alvarez was chairlady of the Union's price committee at Lori-Ann and Esperia Peron
was a member thereof. One Concepcion Toledo, a former Lori-Ann employee, was
also a member of the price committee . Although not specifically named in the
eo It is true that Rose Uniforms sought to capitalize on whatever good will Warshaw
had previously established Thus, Rose Uniforms managed to obtain business from some
of Lori-Ann's customers-although Simon's affidavit and testimony reflects that even In
the beginning of the Rose operation he personally was able to procure a substantial
amount of new business. The use of the "Rose of Miami " label by Rose Uniforms, and
Warshaw's participation at fashion shows on behalf of Rose Uniforms are also indicative
that Warshaw lent his good will to Rose Uniforms. However, and as indicated above,
use of good will is but one attribute of a successor relationship.
u See David B. Klein, et al ., doing business as Sam Klein & Sons, 127 NLRB 776, and
cases cited therein
v Although the General Counsel does not press the matter, it will be recalled that sub-
sequently, on May 31, 1961, Union Representative William Brost spoke to Simon on the
then established picket line and that he asked Simon "to sit down and talk with us."
Simon replied , in substance , by suggesting that an election be held to ascertain whether
the Union in fact represented a majority of the employees. Whether or not the comment
of Frost can be construed as an appropriate request to bargain, the evidence discloses
that ever since its inception all but one of the Rose Uniforms employees crossed the picket
line. It cannot be said, therefore , that Simon was not acting in good faith when he
proposed an election as proof of the Union's majority.
1114 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
complaint, she also was not hired by Rose. Accordingly, she will be considered in
the category of alleged individual discriminatees.
It will be recalled that Ledya Marroquin, the floorlady of Lori-Ann, was hired
and held the position of floorlady at Rose Uniforms and that it was she who selected
and hired the employee operators for Rose when Rose commenced operations.
Marroquin testified that she did not hire these employees for the following
reasons: Esperia Peron, because "she was slow and talked too much and spent a lot
of time drinking coffee"; Paulo Lorenzo, because she was the "clown of the place,"
that she frequently spent time in clowning antics rather than paying attention to her
work; Maria Alvarez, because she talked too much during work hours; and Con-
cepcion Toledo, because she was a slow worker.
Considering the fact that three of these four employees were members of the
Union's price committee while employed at Lori-Ann, the circumstance of their not
being hired by Respondent Rose Uniforms, Inc., particularly since many of the
others had been so hired, appears highly suspicious. However, the reasons given
by Marroquin for not hiring these employees is unrefuted and unrebutted in the
record. Moreover, there is no evidence that Marroquin was antiunion or that
either Marroquin or Rose Uniforms had engaged in any conduct independently
violative of Section 8(a)(1). As has been often said, suspicion alone is not suffi-
cient to establish the commission of an unfair labor practice; conjecture cannot be
substituted for proof. Accordingly, I find that the preponderance of the evidence
does not show that Respondent Rose Uniforms, Inc., violated Section 8(a)(3) of
the Act by failing to hire these employees.43
It is further alleged that Respondent Rose Uniforms discriminatorily refused to
hire employees Concepcion Toledo, Esperia Peron, and Maria Alvarez when they
applied for work on or about August 30, 1961.
Each of these employees went to the plant pursuant to a telegram which they
had received from Respondent Rose Uniforms advising them to report to work.44
On arriving at the plant,45 they were handed employment applications by Floorlady
Diana Rodriquez. Upon completion of the applications each of these employees
handed the floorlady a document which they had received at the union hall prior
to reporting at the plant. The documents, notarized and bearing the signature of
the respective employee, stated as follows:
The signing of the application blank at Rose Uniforms, Inc., does not in any
manner constitute a waiver of any rights the undersigned may have under the
National Labor Relations Act, as amended, or pursuant to any contract or
agreement which may exist between Rose Uniforms, Inc., and Local 415 of the
International Ladies' Garment Workers' Union 46
[Signature of employee.]
These employees testified that Floorlady Rodriquez went over to another part of the
room with these documents and showed them to Simon. After some discussion with
Simon, which these employees did not hear, the floorlady returned and told them
that "under those conditions" or "with that condition" it was impossible for her
to give them work. Esperia Peron testified, "She told me and I said the same to her.
She said, `With that condition I can't hold you,' and I said, `I can't stay without that
condition either."' These employees thereupon left the plant without being hired.
Concerning this entire matter, Simon testified, "Diana Rodriquez handed me
this paper [referring to the above document] which I glanced at very hurriedly and
I saw something in it that had reference to a contract between the union and ourselves
and I told her that I couldn't read the paper or recognize anything as to what we
were offering without any condition attached and if she came to work here she would
have to come in like the other employees did."
The issue here, it seems to me, is whether these employees made an unconditional
application for work at Rose Uniforms, Inc., pursuant to the offer of jobs which
had been made to them. I am constrained to find that this question must be answered
in the negative. While the document itself is not a model of draftsmanship, it
would seem to clearly impose, as a condition of their employment, an obligation
upon the Respondent Employer to recognize certain "rights" under a contract it
43 See Alamo White Truck Service, Inc., 122 NLRB 1174
"Floorlady Marroquin at this time was not in the employ of Rose Uniforms. She had
left this employment to take a trip to Europe, but subsequently was rehired as floorlady
after an absence of approximately 3 months.
"Although Alvarez and Peron went to the plant together, with Toledo appearing later,
the circumstances as to each with respect to the filing of their applications was substan-
tially alike.
4a The documents also bore an identical Spanish translation.
LORI-ANN OF MIAMI, INC., ETC. 1115
was alleged to have with the Union . Accordingly , and in view of these employees'
conditional application for work, it will be recommended that the complaint's allega-
tion pertaining to alleged discrimination against them be dismissed.
IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE
The activities of the Respondents set forth above, occurring in connection with
the operations of the Respondents set forth in section I, above, have a close, intimate,
and substantial relation to trade, traffic, and commerce among the several States,
and tend to lead to labor disputes burdening and obstructing commerce and the
free flow thereof.
V. THE REMEDY
It having been found that Respondents Lori-Ann of Miami, Inc., and Myron
Warshaw have engaged in unfair labor practices in violation of Section 8(a)(1) and
(5) of the Act, it will be recommended that these Respondents cease and desist
therefrom and take certain affirmative action designed to effectuate the policies of
the Act.
The manner of notifying its employees with respect to the recommended action
is set forth hereinafter in the Recommendations.
Upon the basis of the foregoing findings of fact, and upon the entire record
in the case, I make the following:
CONCLUSIONS OF LAW
1. The Respondents are engaged in commerce and the Union is a labor organiza-
tion, all within the meaning of the Act.
2. The unit appropriate for collective bargaining within the meaning of the Act
and for the purposes of this case consists of all production and maintenance em-
ployees, excluding office clerical employees, guards, and supervisors as defined in
the Act, employed at Respondent's Lori-Ann of Miami, Inc., plant prior to the
closing of said plant.
3. At all relevant times during 1961 and thereafter, the Union has been the
exclusive representative, for the purposes of collective bargaining within the meaning
of Section 9(a) of the Act, of the employees in the aforesaid appropriate unit.
4. By not informing the Union at the time they had so determined in April 1961
that they would close the Lori-Ann of Miami, Inc., plant, the aforesaid Respondents
have committed unfair labor practices within the meaning of Section 8(a) (1) and
(5) of the Act.
5. By terminating the employees at Lori-Ann of Miami , Inc., by the opening and
operating of Rose Uniforms, Inc., and by not hiring all of the former employees of
Lori-Ann of Miami, Inc., the Respondents have not violated Section 8 ( a)(1), (3),
and (5) of the Act.
6. The aforesaid unfair labor practices are unfair labor practices affecting com-
merce within the meaning of Section 2(6) and (7) of the Act,
RECOMMENDATIONS
Upon the basis of the foregoing findings of fact and conclusion of law , and upon
the entire record in this case, it is recommended that the Respondents, Lori-Ann of
Miami, Inc., and Myron Warshaw , their officers, agents, successors , and assigns, shall:
1. Cease and desist from refusing to bargain collectively, upon request, with Local
415, International Ladies' Garment Workers' Union, AFL-CIO, as the exclusive-
bargaining representative of all the employees in the appropriate unit set forth above
who were employed at Lori-Ann of Miami, Inc., plant prior to the closing of the
said plant.
2. Take the following affirmative action which I find will effectuate the policies of
the Act:
(a) If and when Respondent Lori-Ann of Miami , Inc., resumes its operations,
bargain collectively, upon request, with Local 415, International Ladies' Garment
Workers' Union , AFL-CIO, as the exclusive-bargaining representative of all em-
ployees in the aforesaid appropriate unit, and embody any understanding reached in
a signed agreement.
(b) Inasmuch as the posting of a notice customarily required is impossible due to
the present absence of plant facilities , the Respondents shall mail an exact copy of
the notice attached hereto marked "Appendix" 47 to the Union and to each of the
In the event that these recommendations be adopted by the Board , the words "A De-
cision and Order" shall be substituted for the words "The Recommendations of a Trial
1116 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
employees who were terminated by the reason of the closing of the plant . Copies
of said notice , to be furnished by the Regional Director for the Twelfth Region, shall,
after being duly signed by Respondent Myron Warshaw and by an authorized repre-
sentative of Respondent Lori-Ann of Miami, Inc., be mailed immediately after receipt
thereof.
(c) Notify the Regional Director for the Twelfth Region, in writing, within 20
days from the date of the receipt of this Intermediate Report, what steps Respondents
have taken to comply herewith 48
It is also recommended that the complaint , as amended , be dismissed insofar as
it alleges that Respondent Rose Uniforms, Inc., and Rose of Miami , Inc., have en-
gaged in unfair labor practices within the meaning of Section 8(a) (1), (3 ), and (5)
of the Act.
Examiner" In the notice In the further event that the Board 's Order be enforced by a
decree of a United States Court of Appeals , the words "Pursuant to a Decree of the
United States Court of Appeals , Enforcing an Order" shall be substituted for the words
"Pursuant to a Decision and Order."
' In the event that these Recommendations be adopted by the Board , this provision shall
be modified to read: "Notify said Regional Director , in writing , within 10 days from the
date of this Order, what steps the Respondents have taken to comply herewith."
APPENDIX
NOTICE TO ALL EMPLOYEES
Pursuant to the recommendations of a Trial Examiner of the National Labor
Relations Board , and in order to effectuate the policies of the National Labor Rela-
tions Act, we hereby notify our employees that:
WE WILL, if and when we resume operations , upon request , bargain collectively
with Local 419, International Ladies' Garment Workers ' Union, AFL-CIO, as
the exclusive representative of all the employees described in the unit below
with respect to rates of pay, wages , hours of employment , and other terms and
conditions of employment , and, if an understanding is reached , embody such
understanding in a signed agreement . The bargaining unit is:
All production and maintenance employees , excluding office clerical em-
ployees, guards , and supervisors as defined in the Act, who were employed
at the Lori-Ann of Miami, Inc., plant prior to the closing of the said plant.
-----------------------
(MYRON WARSHAW)
LORI-ANN OF MIAMI, INC.,
Employer.
Dated------------------- By-------------------------------------------(Representative ) ( Title)
This notice must remain posted for 60 days from the date hereof , and must not be
altered , defaced , or covered by any other material.
Employees may communicate directly with the Board 's Regional Office, Ross
Building, 112 East Cass Street , Tampa 2, Florida, Telephone Number, 2-4623, if they
have any question concerning this notice or compliance with its provisions.
Local Union 154, International Typographical Union, AFL-CIO
and Ypsilanti Press, Inc . Case No. 7-CP-I6. June 929, 196°2
DECISION AND ORDER
On February 28, 1962, Trial Examiner William F. Scharnikow
issued his Intermediate Report in the above-entitled proceeding, find-
ing that the Respondent had engaged in and was engaging in certain
unfair labor practices and recommending that it cease and desist there-
137 NLRB No. 123.