M. Eskin & Son

National Labor Relations Board - Board Decisions

Sep 14, 1964

148 N.L.R.B. 1022 (N.L.R.B. 1964)

1022 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
M. Eskin & Son and William R . Gerics
Confectionery and Tobacco Drivers and Warehousemen 's Union,
Local 805, International Brotherhood of Teamsters , Chauf-
feurs, Warehousemen and Helpers of America and William
R. Gerics. Cases Nos. 22-CA-555 and 20-CB-246. Septem-
ber 14, 1964
SUPPLEMENTAL DECISION AND ORDER
On January 30, 1962, the Board issued a Decision and Order in the
above-entitled cases,' which was enforced, as modified, by the United
States Court of Appeals for the Second Circuit by a decree entered on
March 19, 1963.2 Thereafter, pursuant to an amended backpay speci-
fication and appropriate notice issued by the Regional Director for
Region 22, a hearing was held for the purpose of determining the
amounts of backpay due the discriminat ees.
On May 12, 1964, Trial Examiner Abraham H. Maller issued his
attached Supplemental Decision, in which he recommended that spe-
cific amounts of backpay be awarded to the discriminatees. There-
after, the General Counsel filed exceptions to the Trial Examiner's
Supplemental Decision and a supporting brief, and The Eskin Cor-
poration I and the Respondent Union filed briefs in support of the
Trial Examiner's Supplemental Decision.
Pursuant to the provisions of Section 3 ('b) of the Act, the Board has
delegated its powers in connection with these cases to a three-member
panel [Chairman McCulloch and Members Leedom and Fanning].
The Board has reviewed the rulings made'by the Trial Examiner at
the hearing and finds that no prejudicial error was committed. The
rulings are hereby affirmed. The Board has considered the Supple-
mental Decision, the exceptions and briefs, and the entire record in
these cases, and hereby adopts the findings, conclusions, and recom-
mendations of the Trial Examiner.
ORDER
Pursuant to Section 10(c) of the National Labor Relations Act, as
amended, the Board hereby adopts, as its Order, the Order recom-
' 135 NLRB 666
2312 F. 2d 108 (CA 2)
s As described more fully in the Trial Examiner 's Supplemental Decision , the backpay
proceeding was not brought against M. Eskin & Son, the Respondent in the original pro-
ceeding, but against The Eskin Corporation, who the General Counsel alleged was a suc-
cessor to bI Eskin & Son. The Trial Examiner in his Supplemental Decision found, and
we agree, that The Eskin Corporation was not a successor to \I. Eskin & Son and was
therefore not obligated to remedy the unfair labor practices of M Eskin & Son.
148 NLRB No. 107.
M. ESKIN & SON 1023
mended by the Trial Examiner and orders that Respondent, Con-
fectionery and Tobacco Drivers and Warehousemen's Union, Local
805, International Brotherhood of Teamsters, Chauffeurs, Warehouse-
men and Helpers of America, its officers, agents, representatives, suc-
cessors, and assigns, shall pay backpay in the amounts set forth by the
Trial Examiner in his Supplemental Decision. It is further ordered
that the amended backpay specification shall be dismissed as to The
Eskin Corporation.
TRIAL EXAMINER'S SUPPLEMENTAL DECISION
STATEMENT OF THE CASE
This supplemental proceeding was brought for the purpose of determining the
amounts of backpay due certain employees under a prior Board Decision and
Order.' The instant supplemental proceeding is not brought against M . Eskin &
Son, the Respondent in Case No . 22-CA-555. Instead , it is brought against The
Eskin Corporation which is alleged to be a successor to M. Eskin & Son. The Union
which was the Respondent in Case No. 22-CB-246 is also named as a Respondent
in the instant supplemental proceeding . Hearing was held before Trial Examiner
Abraham H. Mailer in Newark , New Jersey , on November 26, 27, and 29, 1963,
based on the Regional Director 's amended backpay specification , as amended, and
notice of hearing issued October 24 , 1963, and the answers of the Respondents
thereto. All parties were afforded full opportunity to examine and cross -examine
witnesses , to introduce evidence , to present oral argument , and thereafter to file
briefs. Briefs were received from all parties.
Upon consideration of the entire record ,2 including the briefs of the parties, and
upon my observation of each of the witnesses ,3 I make the following:
FINDINGS OF FACT AND CONCLUSIONS OF LAW
1. BACKGROUND
The Board's Decision and Order as modified by the Court of Appeals for the
Second Circuit found that M. Eskin & Son and the Union had each engaged in
unfair labor practices . M. Eskin & Son was ordered to offer reinstatement to
employees Bagen , Smalley, Boley, Bunting, and others not material here, with
backpay. The Board further found that employees Balajthy, Smith, and Kupic
had been denied reinstatement because they did not get clearance from the Union.
The court held that the Union alone was responsible for loss of pay suffered by
these three employees. Both the Board and the court left to the compliance stage
of the proceedings the decision whether the Union had sufficiently purged itself
of responsibility for the failure of these three employees to be reemployed .4
135 NLRB 666, enfd. as modified 312 F. 2d 108 (C A 2).
' On January 14, 1964, I received from counsel for the General Counsel a motion to cor-
rect the official report of proceedings in certain particulars therein specified. No opposi-
tion to such motion has been filed Upon consideration of the motion (which is hereby
received in evidence as Trial Examiner's Exhibit No 1), it is hereby ordered that the
motion be and it Is hereby granted
3 Unless specifically indicated to the contrary, any credibility evaluation I make of the
testimony of any witness appearing before me is based, at least in part, upon his de-
meanor as I observed it at the time the testimony was given Cf Retail Clerks Inter-
national Association, AFL-CIO, Local 219 (National Food Stores, Inc ), 134 NLRB 1680,
1083, footnote 3, Bryan Brothers Packing Company, 129 NLRB 285. To the extent that
I indicate that I do not rely on or reject in part or entirely the testimony of any given
witness, it is my intent thereby to indicate that such part or whole of the testimony, as
the ca,e may be, is discredited by me Jackson Maintenance Corporation, 126 NLRB 115,
117, footnote 1, enfd 283 F 2d 569 (C A. 2).
4 135 NLRB 666, 672, footnote 18; 312 F. 2d 108, 116.
1024 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
H. THE UNION'S ATTEMPT TO TOLL ITS LIABILITY
The original proceeding was an outgrowth of a "wildcat strike" called by 21
dissident members on December 2, 1959. The Board found that although the
strike was an unprotected activity, M. Eskin & Son had on December 11 condoned
the'action of the strikers in a settlement which included the return of the strikers.
On December 16, Plant Manager Jacobs told certain of the strikers, including
Balajthy, 'Smith, and Kupic, that before they could be reinstated they would first
have to obtain clearance from the Union. The men telephoned the Union and were
told to attend a meeting at the Union's office in New York City on the following
day. At this meeting, the union officials informed them that reinstatement was
conditioned on their execution of certain documents, already prepared, which
provided for affirmation of the Union as bargaining agent and of the existing con-
tract; reauthorization of checkoff; withdrawal of the petition and charges filed by
another union on their behalf; and release of the Union from any claims whatso-
ever. Balajthy, Kupic, and Smith refused) to sign these documents.5
On December 18, 1959, Balajthy, Kupic, and Smith sent a joint telegram to
Union Agent Ornstein stating :tlibir• readiness to return to work and requesting to
see the -Union's,: contract with M. Eskin & Son and asking when Ornstein could
come down' and see them: Ornstein replied on the same day by letter which reads
as follows: ' , .
Received your joint telegram. -
Whether or not you go back to work is a matter within the sole discretion of
M. Eskin & Sons. The Union is not standing in the way of your being employed.
,If you desire the Union to file a grievance on your behalf, please come to
our offices so we can expeditiously handle such grievance for you.
You are at liberty at any time to come up to the Union Offices and look at
the contract.
As we understand it, the Company has refused to rehire you because of
your walking out in violation of your contract.
Whether or not the Company will forgive such conduct is a matter which
the company itself must decide.
The Union is not standing in the way of the Company putting you back to
work.
On the same day that the above letter was sent to the employees, the Union
sent the following letter to the Employer:
M. ESKIN & SON,
323 Old Bridge Turnpike,
East Brunswick, New Jersey.
GENTLEMEN: Our Union has no objection to your re-employing Victor
Balajthy[,] Garry N. Kupic and Donald Smith, as you will see from the
enclosed copy of a letter this day sent to them.
Very truly yours,
DANIEL ORNSTEIN, Trustee,
Local 805, I.B. of T.
The General Counsel admitted that the employees involved received the letter
first quoted above. As to the second letter quoted above, in addition to Ornstein's
testimony that he sent it, counsel for The Eskin Corporation stated on the record
that the original had been turned over to him at the start of the instant proceeding.6
On February 8,'1962, following the Board's Decision and Order, the Union again
wrote to each of the three employees as follows:
Our Union does not object to your immediate and full reinstatement by M.
Eskin & Son. M. Eskin & Son has been so advised.
This letter is being sent to you without prejudice to the Union's rights.
5 The Board found, and the court agreed, that the Union violated Section 8(b)(1)(A)
and (2) of the Act in requiring the strikers, as a condition of union clearance for re-
instatement, to submit to the conditions contained in the Union's statement
'General Counsel contends that there is no credible evidence in the record that the
Union's letter to AT Eskin & Son quoted above, was in fact sent to Al. Eskin & Son. He
argues that Ornstein's testimony in this respect is incredible, contradictory, and unworthy
of belief. The testimony upon which the General Counsel relies was adduced on cross-
examination and related to the preparation of the photo copy prepared from the Union's
file copy I am satisfied that Ornstein was confused with regard to the preparation of the
photo copy and that the letter was in fact sent to Al. Eskin & Son as he testified
M. ESKIN & SON 1025
On the same day, the Union sent the following letter to M . Eskin & Son-Wonder--
Chef:
In addition to the letter we sent you on December 18, 1959, at which time
we enclosed a copy of a letter that day sent to Victor Balajthy, Donald Smith,
and Gary N. Kupic, we now again advise you that our Union does not object
to the immediate and full reinstatement of the three above-named persons, as
well as Kenneth Williamson . In other words , our Union does not object to the
immediate and full reinstatement of all four such persons.
This letter is without prejudice to our Union 's rights to take any and all action.
in the courts in connection with the Labor Board 's Decision of January 30, 1962.
III. CONCLUSIONS AS TO THE EXTENT OF THE UNION 'S BACKPAY LIABILITY
The General Counsel contends that the Union 's letter of December 18, 1959, did
not toll the Union's backpay liability for the following reasons: ( 1) the letter was
insufficient because it did not explicitly state (as required by the Trial Examiner's
Recommended Order ), that the Union would not require Balajthy, Smith , and Kupic
to execute the statement previously demanded of them by the Union or to take similar
action as a condition of employment , and (2 ) the record does not show that a copy
of that letter was sent to the Employer , M. Eskin & Son.
I find that the first reason advanced by the General Counsel is without merit. The
Union's letter clearly stated that it was not standing in the way of the reinstatement
of those employees by the Company . Though written more than 2 years before the
Board's Order, the letter was in full compliance with the Order . Admittedly, it was
not in accordance with the Recommended Order of the Trial Examiner which was
issued more than a year after the letter had been written. The Trial Examiner had
recommended inter alia that the Union: '
(1) notify in writing, Respondent Eskin and Williamson , Smith , Kupic and
Balajthy that Respondent Union does not require these men to execute the
aforementioned statement [ regarding their adherence to the Union , etc.] or to.
take similar action as a condition of employment and that it does not otherwise
object to their immediate , full and unconditional employment ... .
While the Board adopted the Trial Examiner 's recommendation generally, it made
a significant change in the language thereof. Thus, in paragraph 112(a), of its
Order, it provided:
Notify, in writing, Respondent Eskin and the employees named in Appendix D,
attached hereto, that Respondent Union does not object to their immediate and
full reinstatement.
Thus, the Board eliminated the words "that Respondent Union does not require these
men to execute the aforementioned statement or to take similar action as a condition
of employment .. " In so doing, the Board substituted for the Trial Examiner's
specific requirement a general statement that the Union does not object to the im-
mediate and full reinstatement of the employees involved.
The General Counsel does not question the controlling effect of the Board's Order.
He argues , instead, that paragraph B2(a), of the Order must be read in conjunction
with paragraph Bl(b), which orders the Union to cease and desist from causing
M. Eskin & Son to require as a condition of employment that the employees revoke
designations of any other labor organization , etc. (language patterned after the state-
ment which the employees had refused to sign). The argument is without merit.
In restricting the Trial Examiner's recommendations as to the notification to be
issued to the employees , the Board made it plain that it intended a simple notification
that "Respondent Union does not object to their immediate and full reinstatement."
In ordering the Union to cease and desist from "[ c]ausing or attempting to cause
Respondent Eskin to require as -a condition of employment that employees revoke
designations of any other labor organization ," etc., the Board was addressing itself to
the Union 's dealings with the Employer . The two portions of the Order dealt with
separate and different matters. Had it been the intention of the Board that the
notification requirement be read in the light of the ' cease-and -desist portion of the
Order, there would have been no reason for the Board to limit the notification re-
quirement as it did. Instead, the Board would have adopted the Trial -Examiner's -
Recommended Order in this respect.
Furthermore , it must be reiterated that the Union 's letter was written immediately
after the strike and long before the Intermediate Report. In such instances, the
Board has tolled a union's liability if the union's notification constitutes compliance_
760-577-65-vol 148-66
1026 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
"with the usual Section 8(b) (2) order" ( Westwood Plumbers, 131 NLRB 562) , even
though it did not comply precisely with the Order issued later. The Westwood
Plumbers case , supra, was a backpay proceeding . In the original proceeding (West-
wood Plumbers, 122 NLRB 726), the Board had issued an Order requiring the Union
to notify the respondent employer, in writing, sending a copy to the employee that it
"withdraws its objection to . [the employee 's] employment . and requests
the employer to offer . . . [the employee] immediate and full reinstatement to his
former or an equivalent position." [Emphasis supplied ] It is significant that the
union's letter did not request the employer to offer the employee immediate and full
reinstatement ( as required by the Order ), but merely stated that the union had no
objection to the reemployment of the employee . Yet, the Board held that such a
letter written , as in the case at bar, before the Board's finding that the union had
violated the Act, constituted compliance and effiectively terminated the union 's back-
pay liability as of the date of such notification . The Board said at page 562:
Where, as here , prior to the Board finding that a union has violated Section
8(b) (2) the union voluntarily notifies both the employer and the employee that
it has no objection to the reemployment of the employee , the Board has held
that such notification constitutes compliance with the usual Section 8(b)(2)
Order and effectively terminates the union 's backpay liability as of the date of
such notification.
The Westwood Plumbers case is controlling here. Accordingly , I find and conclude
that the Union's letter of December 18, 1959 , constituted compliance with the
Board 's Order.
As to the second contention , I have credited the testimony of Ornstein that the
Employer, M. Eskin & Son , was notified on the same day that the Union had no
objection to the employment of the three persons involved . As noted above, this
testimony was corroborated by the statement of counsel for The Eskin Corporation
that the original letter had been turned over to him at the start of the instant
proceeding . Accordingly , I find and conclude that the Employer was so notified
on December 18, 1959. In this connection , it is also significant , as noted by the
court of appeals , that none of the three employees involved made any effort to
contact the Employer when they admittedly received the Union 's letter of Decem-
ber 18. It is patent that , if these employees entertained any doubts whatsoever as
to whether the Union 's letter constituted a withdrawal of its objections to their rein-
statement by the Employer , such doubt could have been effectively resolved had
they presented themselves to the Employer for reinstatement . This they did not do?
I do not regard the subsequent letters of February 8, 1962, sent to the three
employees and to M. Eskin & Son-Wonder Chef as derogating in any way from
the effect of the letters of December 18, 1959. The second set of letters was sent
after the issuance of the Board's Decision and Order in the original proceeding
herein. The fact that the Union sent these letters does not constitute any admission
that the original letters were in any way inadequate . Rather , it constitutes a further
attempt by the Union to toll its liability , in the event that the first letters are for
any reason held to be insufficient to accomplish that purpose
Under the Board's usual policy the Union's backpay liability was tolled 5 days
after its notification of December 18, 1959. Since this was before Christmas, no
Christmas bonus is involved . The amounts due to each of the three employees is
not in dispute. Accordingly , I find and conclude that the Union is liable to Balajthy
in the sum of $123.26; to Kupic $75; and to Smith $70.
IV. THE SALE OF CERTAIN ASSETS OF M. ESKIN & SON TO THE ESKIN CORPORATION
M. Eskin & Son, a New Jersey corporation , was a wholly owned subsidiary of
Continental Vending Machine Corp . ( hereinafter referred to as Continental Vend-
ing) which operated vending machines in various cities throughout the country.
M. Eskin & Son , likewise, was engaged in the operation of vending machines of
various types : cigarette , soda, candy , ice cream , milk, coffee, record players, and
hot foods These machines , which were coin-operated , were placed in various
commercial and industrial establishments and were serviced regularly by employees
of M. Eskin & Son. For operational purposes , M. Eskin & Son maintained some
7 While the reasons for their failure to do so are not material here , it may be that they
did not seek reinstatement because the Union did not withdraw its objections to the re-
employment of Williamson whose discharge because of his failure to join the Union had
been the reason for the strike The court of appeals rejected that portion of the Board's
Order which required the reinstatement and payment of compensation to Williamson
M. ESKIN & SON 1027
cigarette routes, i.e., routes on which the employee serviced and maintained only
cigarette machines, a music box route, and diversified routes on which the route-
man serviced and maintained a combination of various types of machines, including
cigarette machines.
Early in 1960, Continental Vending decided that M. Eskin & Son did not have
a plant large enough to operate an efficient business and determined to build a
new plant at 375 Old Bridge Turnpike. The new plant was three times as large
as the old one which was situated at 323 Old Bridge Turnpike In June 1960,
M Eskin & Son moved into its new premises, and the old building at 325 Old
Bridge Turnpike was put up for sale or lease.
On October 20, 1960, M. Eskin & Son sold part of its cigarette and music routes,
together with the machines on location, and inventory and supplies for servicing
such machines. The purchaser was a newly formed corporation, The Eskin Cor-
poration, one of the Respondents herein, whose sole stockholders were Paul Jacobs,
formerly manager of M. Eskin & Son,8 and Sheldon Abrams who had no previous
connection with M. Eskin & Son, but who had been an assistant sales manager for
Continental Vending.9 Included in the property sold was the same "Eskin" either
by itself or in combination with any word or name, and M. Eskin & Son agreed,
at the earliest possible opportunity, to discontinue its use of the name "M. Eskin &
Son, Inc." 10 The contract also contained a restrictive covenant with regard to the
locations sold. The Eskin Corporation did not assume any of the liabilities of the
seller.
The purchase price was in excess of one million dollars. Approximately one-
third of the purchase price was paid by the purchaser in cash, the remainder was
represented by promissory notes secured by a chattel mortgage. In order to raise
his portion of the downpayment, Paul Jacobs found it necessary to sell his stock
in Continental Vending, which stock was listed on the American Stock Exchange.
The Eskin Corporation also leased from M. Eskin & Son the premises formerly
occupied by the latter at 323 Old Bridge Turnpike. These premises had been
vacant since June 1960. Between 45 and 50 employees were employed by M.
Eskin & Son in September 1960. After the sale of the cigarette and music routes
to The Eskin Corporation, M. Eskin & Son had about 35 employees. The Eskin
Corporation began business with 12 employees who had previously been employed
by M. Eskin & Son.
After the sale of The Eskin Corporation, M. Eskin & Son continued to operate
its diversified routes and in-plant feeding installations. Subsequently, M. Eskin &
Son sold certain of its routes to National Vending Service, Inc., who in turn leased
them to a concern known as Cater-Mat. In February 1961, certain other routes
were sold by M. Eskin & Son to National Equipment Rental, Ltd.
Eventually, the corporate existence of M. Eskin & Son was terminated and its
properties were acquired by the parent corporation, Continental Vending. On
April 8, 1963, the U.S. District Court for the Southern District of New York
appointed a conservator of the assets and properties of Continental Vending. There-
after, on June 12, 1963, the General Counsel entered into a stipulation with the
conservator of Continental Vending (described in said stipulation as "a successor
of M. Eskin & Son") in which it fixed the amount of backpay due from Continental
Vending to employees Boley, Smalley, Bunting, Bagen , and others. The amounts
so fixed covered the liability of Continental Vending to the employees just named
up to October 20, 1960, the date when The Eskin Corporation purchased part of
the assets of M. Eskin & Son.
V. M. ESKIN & SON OFFERS REINSTATEMENT
Following the issuance of the Board's Decision and Order in the original pro-
ceeding, M. Eskin & Son on February 15, 1962, sent the following letter to the
discriminatees
Please be advised that M. Eskin & Son, hereby offers immediate and full
reinstatement to you to the position formerly held by you or to the closest
similar position now carried on in the M. Eskin & Son Company. Should you
8 Paul Jacobs was also a vice president of M Eskin & Son This was in accord with
the policy of Continental Vending, whereby each branch manager was an officer of the
wholly owned subsidiary involved
0 Sheldon Abrams was neither an officer nor a stockholders of Continental Vending
70 Subsequently, M Eskin & Son changed its name to Wonder Chef, Inc , and later to
Continental Cafeterias, Inc.
1028 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
still desire your former job, you are hereby directed to report to work by report-
ing at the office at Old Bridge Turnpike , New Brunswick , New Jersey, on
Wednesday, February 21, 1962, at 9:30 A.M.
This letter is being sent to you without prejudice to any rights that M. Eskin
& Son has.
On March 23, 1962 , it repeated its offer of reinstatement by letter as follows:
Please be advised that as you have previously been informed , M. Eskin & Son
has offered immediate and full reinstatement to you to the position formerly
held by you or to the closest similar position now carried on by M. Eskin & Son.
Should you desire your former job, you shall indicate same by reporting to,
work and being prepared to work commencing 10: 15 A.M. At the office of
Wonder Chef (formerly M. Eskin & Son), 375 Old Bridge Turnpike, South,
River, New Jersey, on Tuesday, March 27th.
Only Bagen accepted the offer of reinstatement and was employed as a cafeteria
attendant trainee at $80 a week . Bunting testified that, when he received the offer
of reinstatement , he was working elsewhere earning $95 a week and therefore rejected
an offer to return at $80 per week ." Bunting also felt that M . Eskin & Son might
still hold some resentment against him for having participated in the strike.
VI. CONCLUSIONS AS TO THE BACKPAY LIABILITY OF THE ESKIN CORPORATION
General Counsel concedes that the transaction by which The Eskin Corporation
acquired certain ofthe assets of M. Eskin & Son was a bona fide transaction . Never-
theless, he contends that The Eskin Corporation was obligated to remedy the unfair
labor practices of M. Eskin & Son by offering reinstatement to employees Bagen,
Boley, Smalley , and Bunting , and failing in this respect , is liable for backpay to these
employees.
The General Counsel's theory as to the liability of The Eskin Corporation to
remedy the unfair labor practices of M. Eskin & Son may be summarized as follows:
When M. Eskin & Son sold its cigarette routes to The Eskin Corporation, it rendered
itself incapable of reinstating the cigarette routemen to the precise jobs which they
had previously held-even though M. Eskin & Son continued to operate diversified
routes and could have reinstated them to servicing these routes . 12 General Counsel
admitted on the record that the job of a routeman on the diversified routes was sub-
stantially equivalent to that of a cigarette routeman . Nevertheless , he argues that
the employees were entitled to reinstatement to the precise jobs they had held when
they were discriminated against , and only when these jobs do not exist may they be
reinstated to substantially equivalent jobs. Since these jobs still existed-although
with a different employer-he contends that the new Company automatically became
saddled with the obligation to reinstate the employees , and failing to do so, became
liable to them for backpay.13
To state the proposition contended for is to reveal its fallacy . While there would
be merit in it if the transfer of the routes were a fraudulent transaction to evade
liability, the fact admittedly is that the purchase of the routes was a bona fide trans-
action for value. Moreover, there is no showing that the transaction rendered the
Employer who had been guilty of the unfair labor practices incapable of making
whole the employees by reinstating them to substantially equivalent positions. M.
Eskin & Son continued as a going concern after the sale of the cigarette routes.
u It appears from the record that if Bagen and Bunting had been reinstated immedi-
ately after the strike, they would have been receiving $96 per week plus commission at
the time'that M' Eskin & Son made its offer of reinstatement discussed above
12 Originally, the General Counrel took the position that Bolev was a cigarette route-
man. During the hearing , the General Counsel orally amended the backpay specification
to allege that Boley was a maintenance man or mechanic Nevertheless, the General
Counsel continued to claim that Boley should have been reinstated by The Eskin Corpo-
ration and that, therefore, the latter was liable to Boley for backpay
13 In support of his theory that the discriminatees are entitled to reinstatement to their
precise jobs where they still exist , rather than to substantially equivalent jobs, the General
Counsel relies upon The Chase National Dank of the City of New Folk, San Juan, Puerto
Rico, Branch, 65 . NLRB 827; J. A. Bentley Lumber Company, 83 NLRB 803; United
States Air Conditioning Corporation, 141 NLRB 1278, and Loren A Decker, d/b/a
Decker Truck Lines, 139 NLRB 65 These cases do not assist the General Counsel None
of them Involved an attempt to impose the obligation to reinstate and liability for back-
pay on a purchaser of a business. '
lvi. ESKIN & SON 1029
Yet, under the General Counsel's theory, M. Eskin & Son was automatically absolved
from backpay liability to these four employees after the sale.14
Furthermore, General Counsel's contention is not based on the facts insofar as
employees Bunting and Boley are concerned. Thus, while Bunting had at one time
been a cigarette routeman, at the time of the strike he was servicing machines at
the Johns-Manville plant. These consisted of three types: cigarette, hot food,
and ice cream. The machines at the Johns-Manville plant were not sold to The
Eskin Corporation, and there is nothing in the record to show that Bunting could
not have been reinstated to his former position of servicing the machines at that
plant.15 It may well be that when Bunting was offered reinstatement by M. Eskin &
Son as a cafeteria attendant trainee, this offer was not to a substantially equivalent
position. But this action does not demonstrate that his former position of servicing
the machines at the Johns-Manville plant was not available. Nor does the fact
that M. Eskin & Son made an invalid offer of reinstatement automatically absolve
it from liability and throw the liability for backpay upon The Eskin Corporation.
With regard to Bunting, the General Counsel failed completely to prove that M.
Eskin & Son could not have reinstated Bunting to his former position or to a sub-
stantially equivalent position.
While Boley had originally been a cigarette routeman, he had also done other
work such as servicing candy vending machines and filling soda machines for a
premix route.16 After he returned from an illness, Boley was used as a maintenance
man in the plant of M. Eskin & Son. This is the work he did at the time of the
strike.17 Again, there is no showing that M. Eskin & Son could not have employed
him in that capacity.
It is true that Smalley and Bagen were cigarette routemen, and it is likewise
true that M. Eskin & Son sold its cigarette routes to The Eskin Corporation in
1960. However, M. Eskin & Son did retain its diversified routes, i.e., routes where
the employees serviced more than one type of machine.18 There is no showing in
the record that a routeman who had previously serviced only cigarette vending
machines could not service other machines on a diversified route. On the contrary,
counsel for the General Counsel has conceded on the record, and I find, that the
job of a routeman on the diversified routes was substantially equivalent to that of a
cigarette routeman.
In sum, the General Counsel has failed to prove that, after the sale to The Eskin
Corporation, these four employees could not have been employed by M. Eskin &
Son in the same position (Bunting and Boley) or in substantially equivalent posi-
tions (Bagen and Smalley) to those held by them at the time of the unfair labor
practices against them.
Wholly apart from the foregoing, an analysis of relevant Board and court decisions
demonstrates that they fail to support the General Counsel's contention that the
bona fide purchase by a third person of a portion of the business of a violator
renders the purchaser liable for reinstatement and backpay to persons discriminated
against by the seller. None of the cases relied on by the General Counsel involved
the sale of only a portion of a business. In none did the seller remain a going
concern, able to remedy the unfair labor practices without recourse to the purchaser.
Moreover, even if these cases were applicable, they do not hold that-absent
special circumstances-a bona fide purchaser may be required to remedy the unfair
labor practices of the seller, other than honoring a Board certification.
General Counsel recognizes that, following the decision of the Court of Appeals
for the Tenth Circuit in the Birdsall-Stockdale case,19 the Board in Symns Grocer
Co., and Idaho Wholesale Grocery Co., 109 NLRB 346, departed from the rule it
had previously laid down in Alexander Milburn Company, 78 NLRB 747. The
Board has said in Symns Grocer Co., et al., supra, at 347-348
34 The General Counsel recognizes that after the issuance of the Board ' s Decision and
Order, M Eskin & Son made an offer of reinstatement to the employees involved, but he
contends that this was not a valid offer as M Eskin & Son did not , have available the
precise jobs which these employees had held , i e , cigarette routemen
1s Indeed , under the General Counsel's theory , Bunting could not have . been reinstated
by The Eskin Corporation , as the latter did not conduct such an operation
16A premix route is one consisting of coin-operated soda vending machines
11 General Counsel , in his brief , refers to Boley as a cigarette machine repairman. There
is nothing in the record to show that Boley' s maintenance work was limited to cigarette
machines
18 Cigarette , candy, ice cream, etc.
39 N L it B. v . Birdsall-Stockdale Motor Company, 208 F. 2d 234.
1030 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
In Alexander Milburn and later cases the Board held that even a bona fide
purchaser of a business is responsible for remedying his predecessor's unfair
labor practices if he buys the business with knowledge of a Board proceeding
against his predecessor on account of such unfair practices, and if he continues
to operate the business with the same supervisory personnel, and without any
discernible change in labor policy.
Having reexamined the legal basis for its determination in the original De-
cision herein that Idaho [the purchaser] was responsible for remedying the un-
fair labor practices of Symns, the Board now believes that it lacks any statutory
authority to make such a determination. Section 10(c) of the Act empowers
the Board to require unfair labor practices to be remedied by ,those persons who
have engaged in such practices. No provision of the Act authorizes the Board
to impose the responsibility for remedying unfair labor practices on persons
who did not engage therein.
Although recognizing the foregoing, the General Counsel directs attention to a
more recent line of cases: Oriole Motor Coach Lines, Inc., t/a Washington Suburban
Lines, 114 NLRB 808; Ugite Gas Incorporated, 126 NLRB 494, N.L.R.B. v. Tempest
Shirt Manufacturing Company, Inc., 285 F. 2d 1 (C.A. 5); N.L R.B. v. Auto Vent-
shade, Inc., 276 F. 2d 303 (C.A. 5). General Counsel argues that in these cases it
was held that,a successorship had occurred despite a bona fide transfer of property
for value received.
The cases relied upon by General Counsel fall into two categories: (1) cases in-
volving a refusal by a purchaser of a business to honor a Board certification, and (2)
cases involving an attempt to compel a purchaser of a business to remedy other un-
fair labor practices committed by the seller. In the first group of cases the Board
has held:
It is well settled that a Board certification must be honored for a reasonable
period of time, normally 1 year in the absence of unusual circumstances. A
change in ownership is not such an unusual circumstance as to affect the force
of the certification. Where the enterprise remains substantially the same, as
here, the obligation to bargain of a prior employer devolves upon his successor
in title. A purchaser in such a situation is a successor employer. [Ugite Gas
Incorporated, 126 NLRB 494, 495. Footnotes omitted.]
This was the rationale applied by the Board in Auto Ventshade, Inc., '123 NLRB
451, 457, and was recognized and applied by the Court of Appeals for the Fifth Cir-
cuit (276 F. 2d 303, at 304) :
Section 8(a) of the Act makes it an unfair labor practice to refuse to bargain
in good faith with the, certified representatives of the employees. N.L.R.B. v.
Fant Milling Co., 1959, 360 U.S. 301, 79 S. Ct. 1179 3L. Ed. 2d 1243. This
obligation to bargain binds a successor employer. A mere change in ownership
is not so unusual a circumstance as to effect the certification. N.L.R.B. v.
Alamo White Truck Service, supra; N.L.R.B. v. Armato, 7 Cir., 1952, 199 F. 2d
800. The crucial question in determining if the certification is binding on the
successor employer is whether the employing industry remains essentially the
same after the transfer of ownership.
Obviously, the foregoing decisions are inapplicable to the case at bar which
does not involve a question as to whether The Eskin Corporation was required to
recognize the certification of the Union?e
20 This distinction was recognized by the General Counsel in the Auto Ventshade case
when it was before the Board. Thus the Trial Examiner in that case observed:
The General ,Counsel and the Union contend that under the foregoing circumstances
the successor employer in "the employing industry" fell heir to an obligation to bar-
gain with the Union, and that questions concerning the bona fides of the transfer
and alter ego, or separate entities, are not involved. They also argue that though
the finding of a °successorship" is not essential, the terns "successor" is one which
has been loosely used, varying widely in denoting different relationships between
transferor and transferee, and that the relationship required, for example, to impose
on a "successor" the duty to remedy unfair labor practices committed by a prede-
cessor is not necessarily the same as when used to indicate the employer's responsi-
bility to bargain with a union which was the representative of the employees who were
employed by the predecessor. [123 NLRB at 456.]
M. ESKIN & SON 1031
In the cases falling in the second category, i.e., those involving unfair labor
practices other than a refusal to honor a certification, the Board and or the court
inquired into the question whether the sale of the business from the unfair labor
practice violator to the new employer was a bona fide transaction. Thus, Washing-
ton Suburban Lines, 114 NLRB 808, involved a sale from Oriole Motor Coach
Lines, Inc., to Thomas Parran, Jr., whose status the Board found "was more that
of an owner than of a mere general manager" of Oriole. (Id., at 809.) The
Board further found: "[F]urthermore, Parran not only performed the duties of
a general manager, he also financed to a substantial extent the operations of Oriole
from his own personal funds." (Id., at 810.) It was for these reasons and the
fact that the unfair labor practices occurred during the pendency of the sale that
the Board in effect held that Parran was not a bona fide purchaser of the business
of Oriole 21 The Court of Appeals for the Fourth Circuit in enforcing the Board's
Order adopted the Board's rationale. N.L.R.B. v. Thomas Parran, Jr., t/a Silver
SpringTransit Company, et al., 237 F. 2d 373.
It is true that the case of N.L.R.B. v. Tempest Shirt Manufacturing Company,
Inc., 285 F. 2d 1 (C.A. 5), lends apparent support to the General Counsel's posi-
tion. In that case, the court relying on its earlier decision,in the Auto Ventshade
case, "it is immaterial that the transfer of Tempest's manufacturing business to
the Pascal Corporation was a bona fide business transaction carried out at `arm's
length"' (285 F. 2d at 4). However, a review of the facts demonstrates that the
court's reliance upon the Auto Ventshade case was inappropriate, and its reference
to the transaction by which the Pascal Corporation acquired the business of the em-
ployer as "a bona fide business transaction carried out at `arm's length' " considered
out of context is misleading.
The Tempest case was a contempt proceeding to compel Robert Pascal, Pascal
Corporation, and others to comply with a court decree. This decree had directed
Tempest Shirt Manufacturing Company, its "officers, agents, successors and assigns"
to reinstate at its plant in Jesup, Georgia, three of its former employees and to
make them whole for loss of pay suffered because of discrimination against them.
The court found that Robert Pascal had for many years engaged in the shirt-making
business in Jesup, Georgia, as president of Sea Island Manufacturing Company, Inc.,
a Georgia corporation. Sea Island was later merged with Kaufman & Seidling, Inc.
A new corporation, Tempest, was then formed and Sea Island was dissolved and
its machinery and fixtures were transferred to Tempest. Tempest was a wholly
owned subsidiary of Kaufman & Seidling, Inc., which later changed its name to
Sea Island Shirts, Inc. All of the stock of Kaufman & Seidling, Inc. (and later of
Sea Island Shirts, Inc.), was owned equally by Kaufman and his wife and by
Pascal and his wife. Tempest continued the manufacturing operations of Sea
Island of Georgia, while Kaufman and Seidling, Inc. (and later Sea Island of New
York), handled the retail and wholesale operations. Personality conflicts developed
between Kaufman and Pascal, as a result of which through a series of complicated
transactions the assets of Tempest were acquired by the Pascal Corporation, a
newly formed company owned by Pascal and his wife. The Pascal Corporation
continued in the manufacturing of shirts at Jesup, Georgia, and Tempest which
had never been formally dissolved became merely a shell without physical or
financial assets.
The court further found that "Robert Pascal's proprietary interest in the plant,
machinery, fixtures and other facilities in Jesup has never substantially changed,
and Pascal has continuously exerted managerial authority." (Id., at 4.) Although
the Pascal Corporation had issued some preferred stock to citizens in Jesup and
Wayne County, Georgia, "these preferred stock owners have no rights to vote;
they have attended no meetings ; they exercise no real -rights of management or
authority." (Ibid.)
21 1t is important to note the Board's caveat with regard to Parran's status as a gen-
eral manager of Oriole The Board said in footnote 4 at page 810•
Our finding here does mean that under any and all circumstances a general man-
ager, merely by virtue of his position, will be deemed to have participated sufficiently
in the unfair labor practices of his employer as to impose a successor's liability upon
him under Symns Grocer rule in the event he thereafter assumes ownership.
Unlike Parran, Jacobs, one of the coowners of The Eskin Corporation, had not financed
the operations of M. Eskin & Son which was a wholly owned subsidiary of Continental
Vending and his position as vice president of Al Eskin & Son was titular in nature.
Moreover, he was not the sole purchaser of the assets sold. Abrams, the other coowner
of the purchaser, had had no previous connection with the operations of M. Eskin & Son.
1032 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
From a recital of the foregoing transaction, which the court took pains to set forth
in great detail, it is apparent that what occurred here was a merger of Pascal's
manufacturing operations at -Jesup with Kaufman & Seidling, Inc., and a subsequent
dissolution of that merger, leaving Robert Pascal in control of the business which had
originally been his, which he had managed and operated before and during the
merger , and which he continued to own and operate after the dissolution of the
merger, albeit in the name of a new corporation. It was in this context that the court
described the transfer of Tempest's manufacturing business to the Pascal Corporation
as a "bona fide business transaction carried out at `arm's length."' The court's state-
ment is correct in the sense that the splitting up of the merged properties was bona
fide and was carried out at arm's length insofar as Pascal's relationship with Kauf-
man was concerned. But it was not a bona fide transaction in the sense of a sale of
the business to pan entirely new and different entity. And the court's reliance on the
Auto Ventshade is clearly inappropriate , since as has been noted above, the holding
in the Auto Ventshade case was in the context of requiring a bona fide purchaser to
honor a certification.22
Before leaving this subject, it is appropriate to note three later decisions. In
Liberty Electronics Corp., et al., 143 NLRB 605, the Board held that the transferee
of a business was successor employer where the transferee had entered into a written
contract with the employer to assume the debts, liabilities, and obligations arising
from the discharge of the strikers and their potential reinstatement. This circum-
stance is absent in the case at bar.
In Gibbs Corporation and Gibbs Shipyards, Inc., 142 NLRB 1204, the Board,
agreed with the Trial Examiner that Gibbs Corporation, the seller, and Shipyards,
the purchaser, were jointly and severally liable for violations which occurred while
Shipyards effectively controlled Gibbs. The Board then added:
In any event, even were we to find that Shipyards was not responsible for these
violations at the time of their commission , we would still require Shipyards, as
successor of Gibbs under all the circumstances, to remedy these violations.
The Board did not enlarge on this statement. However, the General Counsel in
his brief to the court of appeals in that case pointed out the peculiar circumstances
which justified the Board's holding quoted above:
While generally speaking the cases hold that buyer status is not alone enough to
fix responsibility on the buyer, it scarcely follows that -so long as the successor
has the status as buyer, then no other circumstances will suffice as a predicate
for his 'answerability. Stated otherwise, unless there are no circumstances
warranting holding the successor employer responsible for unfair labor practices
of its predecessor, and the cases do not so hold or suggest, then the question to
be answered here, as in any case, would be whether the particular circumstances
of this case justified the Board's holding Shipyards responsible. As we have
already shown, in connection with Point II (supra, pp. 28-36), Shipyards effec-
tively controlled the business between February 14 and April 6, during which
period the bulk of the unfair labor practices took place. Assuming that this
control did not itself suffice to make Shipyards responsible, that does not pre-
clude the use of the elements of control in conjunction with other factors to
make Shipyards responsible as a successor. [General Counsel's brief, pp.
37-38.]
The most recent decision on, the subject of successor employer is the case of
N.L.R.B. v. Herman Brothers Pet Supply, Inc., 325 F. 2d 68 (C.A. 6), where the
'court enforced an order of the Board holding that each of the two transferees of the
business was the alter ego of the employer who had committed the unfair labor
practices. In that case, the court said at page 70:
Respondents do not deny the alleged violations but contend that bona fide
sales have been consummated and that the new owners are not subject to the
zz In Tempest, the court also applied the test of continuity, i.e., "whether the industry
remains essentially the same after the transfer of ownership" (id, at 4). It pointed out
that "in this case . . . there has not been any substantial business change' the same
products are made; the same machinery and equipment are used; the same supervisors
and employees are retained ; by purchase, Pascal has the same accounts receivable ; and
ownership and control of policy remain in the same individuals" (ibid ). These elements
are absent from the instant case, as only a portion of the assets were sold and Continental
Vending remained in control of M. Eskin & Son which continued as a going concern and
retained most of the employees.
SERVICE & MAINTENANCE EMPLOYEES' UNION, NO. 399 1033
Board's order . This contention is correct if there was in fact "a bona fide
discontinuance of a true change of ownership-which would terminate the duty
of reinstatement created by the Board 's order." Southport Petroleum Co.
v. N.L.R.B., 315 U.S. 100, 106, 62 S. Ct. 452, 86 L. Ed. 718. If not , then the
Board 's order should be enforced.
In sum , I conclude that none of the cases discussed above supports the General
Counsel's position that The Eskin Corporation is liable for backpay to the employees
discriminated against by M. Elkin & Son.
I find and conclude that The Elkin Corporation was a bona fide purchaser for value
of part of the business of M. Elkin & Son and did not thereby become a successor of
the latter, liable to remedy the latter's unfair labor practices 23
CONCLUSIONS AND RECOMMENDATIONS
Upon the entire record and in accordance with the foregoing findings, I conclude:
4. That the claimants listed below are entitled to payment by the Union of the
sums listed opposite their names:
Victor Balajthy------------------------------------------ $125.26
Gary Kupic------------ ------------ ----------------- 75.00
Donald Smith------------------------------------------- 70.00
2. None of the claimants is entitled to payment from The Elkin Corporation.
3. The amended backpay specification should be dismissed as to The Elkin
Corporation.
2' I do not , therefore, find it necessary to reach the further defenses raised by The
Eskin Corporation : that the stipulation entered into between the General Counsel and the
conservator of Continental Vending, which established the latter 's liability as a successor
to M. Eskin & Son, constitutes an accord and satisfaction which released any alleged
liability of The Eskin Corporation ; that the General Counsel was guilty of laches in
failing to take earlier action against M. Eskin & Son and, in so failing , prejudiced The
Eskin Corporation ; that earnings of Bunting for hours in excess of 40 hours per week
during their . backpay periods constitute interim earnings which should be deducted from
gross backpay ; and that allowances for unpaid Christmas bonuses should be excluded in
determining the gross backpay.
Service and Maintenance Employees ' Union, Local No. 399, AFL-
CIO and Kai Efron , d/b/a Superior Souvenir Book Company.
Case No. 921-CE-28. September 14, 1964
DECISION AND ORDER
On January 23, 1964, Trial Examiner Henry S. Sahm issued his
Decision in the above-entitled proceeding, finding that the Respond-
ent had not engaged in the unfair labor practices alleged in the com-
plaint, and recommending that the complaint be dismissed in its
entirety, as set forth in the attached Trial Examiner's Decision.
Thereafter, exceptions and a brief were filed by the General Counsel;
the Respondent filed cross-exceptions and a brief.'
Pursuant to the provisions of Section 3 (b) of the National Labor
Relations Act, the National Labor Relations Board has delegated its
powers in connection with this case to a three-member panel [Chair-
man McCulloch and Members Fanning and Brown].
' The Respondent 's request for oral argument is hereby denied , as the record , including
the exceptions , cross-exceptions , and briefs , adequately presents the issues and positions of
the parties.
148 NLRB No. 99.