M. Yoseph Bag Co.

National Labor Relations Board - Board Decisions

Nov 26, 1962

139 N.L.R.B. 1310 (N.L.R.B. 1962)

1310 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Morris and David Yoseph , d/b/a M . Yoseph Bag Company 1 and
District 65, Retail , Wholesale and Department Store Union,
AFL--CI0.2 Case No. 4-CA-1593. November 26, 196
SUPPLEMENTAL DECISION AND ORDER
On July 21, 1960 , the Board issued its Decision and Order in the
above -entitled case 2 in which it was found , inter alia, that District 65
represented a majority of the employees in Yoseph 's plant; that rather
than bargain with District 65, the Respondent gave the employees a
choice between rejecting District 65 in favor of a "Philadelphia union"
in which case the operation would continue , or remaining with District
65 in which event the plant would be shut down , the employees dis-
charged, and the business sold; that immediately upon being informed
that the employees elected to remain with District 65, Yoseph did in
fact decide to close the plant and discharge the employees , and ulti-
mately did close the plant and sell the business to Girard Bag Com-
pany 4 of nearby Philadelphia in consideration for a one-third interest
(evaluated at $46,000 ) in Girard Inc. The foregoing conduct was
found to constitute violations of Section 8(a) (1), (3 ), and (5) of the
Act.
Thereafter , the Board petitioned the United States Court of Ap-
peals for the Third Circuit for enforcement of its Order, and District
65 petitioned that court for review and modification of the Board's
Order.
On September 18, 1961, the court rendered its decision in this mat-
ter e and remanded the case, without prejudice to the parties, specifi-
cally directing the Board to determine : ( 1) on or about what date the
decision was made that Yoseph completely and permanently should
go out of business ; ( 2) the date on which Yoseph did, in fact, go out
of business ; and (3 ) what importance , if any, the Board attaches to
the fact that the business of Yoseph was taken over by Girard Bag
Company, a corporation of which David Yoseph is a director , officer,
and substantial stockholder.
1 Hereinafter referred to as Yoseph , or Respondent.
2 Hereinafter referred to as District 65.
a 128 NLRB 211
Girard Bag Company ( herein called Girard-Partnership ) was a Pennsylvania partner-
ship consisting of Maurice Wolf and Harry Gillick engaged partly in the same function
as the Respondent and partly in "brokerage " of burlap bags on a nationwide scale. An
element in the transfer of Yoseph 's assets and business to Girard was the dissolution of
Girard-Partnership and the formation of Girard Bag Company , Incorporated ( herein
called Girard Inc.), a Pennsylvania corporation consisting of Wolf, Gillick , and David
Yoseph, each of whom owned one-third of the stock in Girard Inc, and each of whom
apparently exercised equal control over the business . Where it is unclear whether refer-
ence should be to Girard-Partnership , Girard Inc ., or both, the simple title Girard will
be used.
6 294 F. 2d 364 (C.A. 3).
139 NLRB No. 108.
M. YOSEPH BAG COMPANY 1311
Thereafter, on December 8, 1961, the Executive Secretary, by di-
rection of the Board , reopened the record and remanded the proceeding
to the Regional Director for a further hearing before a Trial
Examiner.
On March 26, 1962, Trial Examiner Arthur E. Reyman issued his
Supplemental Intermediate Report in the above -entitled proceeding
making certain findings concerning the three questions posed by the
court, and recommending a remedy at variance with the Board orig-
inal disposition of the case as set forth in the attached Intermediate
Report. Thereafter the Respondent filed exceptions to the Intermedi-
ate Report and a brief in support thereof.
The Board has reviewed the rulings of the Trial Examiner made
at the supplemental hearing and finds that no prejudicial error was
committed . The rulings are hereby affirmed. The Board has con-
sidered the Supplemental Intermediate Report, the exceptions and
brief and the entire record in this case , and hereby adopts the findings,
conclusions , and recommendations of the Trial Examiner insofar as
they are consistent with the Supplemental Decision herein.
The facts as clarified at the supplemental hearing are , briefly, as
follows : District 65 first demanded recognition on July 11 , 1957, as-
serting a majority status which was never questioned . Yoseph (at
the original hearing) and Wolf ( at the supplemental hearing ) claimed
that an oral agreement was reached on July 15 for Respondent to sell
its business to Girard . Wolf also testified that on that date he in-
structed his attorney to contact Yoseph 's attorney in order to organize
Girard Inc. The choice of rejecting District 65 or having the plant
closed and the business sold, was offered by Yoseph to his employees
on July 19. On July 19 the employees chose to remain in District 65,
and immediately upon being so informed Yoseph in fact shut down
the plant and ceased processing bags on that date.
Wolf testified that approximately 2 weeks after the alleged July 15
agreement , the principals and attorneys met and discussed details of
the transfer of Yoseph's assets and the formation of Girard Inc. The
certification of incorporation for Girard Inc. was filed in Pennsylvania
on August 15, and the assets of Yoseph were sold to Girard Inc. by
bill of sale in New Jersey on August 17. The latter document is the
only written evidence of the sale of Respondent 's assets or of the
dissolution of the Yoseph partnership.
1. On the basis of the foregoing facts, the Trial Examiner found
that Yoseph's decision to go out of business completely and perma-
nently was made on the day approximately 2 weeks after the alleged
July 15 tentative oral agreement between Yoseph and the Girard part-
ners, when the interested parties and their attorneys met and worked
out the details of the transaction by which Yoseph's assets were trans-
1312 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
ferred to Girard, and Girard Inc. was organized.' We agree with his
findings and conclusion in this regard.
In the Board's original Decision and Order it was found that the
decision was reached by Yoseph ". . . on July 19 (if indeed then)
..."' It is clear on the record that Yoseph did not cease function-
ing entirely upon discharging his employees on July 19 (which fact,
together with the date of the bill of sale, persuaded the Board to ap-
pend the parenthetical "if indeed then" to its finding) 8 The supple-
mental hearing also makes obvious, as pointed out by the Trial
Examiner, the fact that the details, indeed the very heart of the
agreement by which Yoseph would cease functioning and enter into
a new enterprise with Wolf and Gillick, were not established until
the meeting some 2 weeks later. Before that meeting, which was not
alluded to at the original hearing, Yoseph could not know with any
degree of precision just what cost would result from the decision to
go out of business completely and permanently, what benefits would
be derived therefrom, and what responsibilities, liabilities, and emol-
uments would be forthcoming from such a change. We agree with our
dissenting colleague that the closing down of a business cannot be
accomplished in a single moment or by a single act. Indeed, our find-
ings herein are that the shutdown by Respondent required over 2
weeks after the decision was made. But our dissenting Member would
have us impute an instantaneous decision to take that step at the very
moment an intention to do so was announced, without allowing for
any resolution by the Respondent of the consideration which would be
forthcoming for the tangible assets and good will of the business thus
being relinquished,' and would have us find that the Respondent's
9 The Trial Examiner sets that date as on or about July 30, 1957 , a wholly reasonable
presumption which in any event does not prejudice the Respondent.
4128 NLRB 211 at p. 217.
8 Thus, Yoseph , who was engaged in the reconditioning and sale of used feed bags, con-
tinued at least to pick up used bags ( the raw material of its operation ) after July 19.
It was thereby performing a basic portion of its normal functions. The continuing accumu-
lation of raw materials , i.e., used bags, is entirely inconsistent with a liquidation or any
fixed intention not to resume operations under any circumstances . It is interesting to
note, in this connection , that on July 15 Yoseph told one of his drivers , Randolph Allen,
"I know that you joined that union , but with or without the union would you still con-
tinue buying bags for me? I am going to close the plant down and if I can have the
two drivers . . . I would have the union licked."
9 It is asserted in the dissent that ". . . other avenues of disposing of the business re-
mained open to the Respondent, any one of which would have been consistent with its
prior decision to cease functioning as a business entity." However, the record is barren
of any suggestion as to what those avenues were or that any steps had been taken to
explore them . In the absence of such evidence , it is clear that other avenues were also
open to Respondent which were equally consistent with an uncertain state of mind and
are inconsistent with a decision to close permanently . For example, it is obvious that
until the bill of sale was executed Yoseph could have resumed operations if at any time
he concluded that District 65 was a ghost of the past, or he could have reduced his opera-
tion ( as indeed he did for about 1 month following July 19) and permanently limit the
business to the pickup and delivery of bags. Yoseph 's statement of July 15 to driver
Randolph Allen , quoted in footnote 8, above, merits noting in connection with this dis-
cussion of the possibilities.
M. YOSEPH BAG COMPANY 1313
commercial life ceased at the very moment that such intention was
expressed.
It is unrealistic to think that a final decision of this nature would
be made before all facets of the transaction were clear. Accordingly,
we agree with the Trial Examiner's conclusion that the decision was
made on or about July 30, 1957, when the above-mentioned meeting
took place.
2. The Trial Examiner also found that Yoseph did, in fact, go out
of business on August 15, 1957, the day the corporate certification for
Girard Inc. was filed. We do not agree.
The filing of the corporate certification on August 15 might well, in
the absence of other evidence, serve as the birth date for Girard Inc.
But we see no persuasive reason to adopt it as the date of the demise
of the Yoseph partnership, in view of what we conceive to be far more
probative evidence, i.e., the date of the bill of sale by which Yoseph's
assets were sold to Girard Inc. We do not agree with the Trial Ex-
aminer that the filing of the corporate certification conclusively shows
either that the Respondent became defunct as of that date, or that
such filing automatically terminated the existence of Yoseph. It is
obvious that Respondent could, and in our view did, remain in business
as part of the same economic community with Girard Inc. until some
action was taken terminating the partnership between David and
Morris Yoseph which was in fact Yoseph Bag Company.10 That
action was taken on August 17, 1957, when the assets of Yoseph Bag
Company were sold by the aforementioned bill of sale, whereupon
Respondent was no longer capable of carrying on the functions for
which it was designed. Such a conclusion is not only well supported
by the facts of this case, but also is compatible with basic principles
of the law of partnership.ll Therefore, we find that Yoseph did, in
fact, go out of business on August 17,1957.
3. The Trial Examiner concluded, in answer to the third question
posed by the court, that the transaction by which Girard Inc. took
over the business of the Respondent was such as to require a finding
10 We agree with our dissenting colleague that there is a distinction between the date of
a business entity's legal demise and the date its commercial life ends. We point out that
there is a further distinction between a decision to end the commercial life and the actual
termination thereof Contrary to the implication of the dissenting opinion, the cessation
of commercial life occurs when the business ceases to perform any of its functions, not
when it begins to wind up its operations . Here, we find that the Respondent partially
ceased operating on July 19, when it discharged the employees . It ceased its commercial
life when it stopped picking up bags, which activity continued for about 1 month after
July 19. It ceased to exist for commercial purposes on August 17, when the bill of sale
was signed . And it was at about this time that it ceased purchasing used bags and thus
ended its commercial life. Thus the cessation of existence and of commercial life occurred
here at about the same time. But Respondent 's legal life continued thereafter under
New Jersey law for the purposes of assessing rights, duties , and obligations incurred
during the period preceding August 17 when it was still operating. Contrary to the
statement of our dissenting colleague, we have not, in this case , predicated any findings
on the statutory continuance of its legal life and have looked only to the commercial
aspect of the Respondent.
u See 68 CJS Partnership § 344-346.
1314 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
that Yoseph's motivation and actions were violative of the Act, and
that the relationship between Girard-Partnership, David Yoseph, and
Yoseph Bag Company, while close and intimate, was not such as to
permit a finding that Girard Inc. was the alter ego of Respondent.12
With these findings we agree. However, he further found that a con-
clusive presumption arises that Girard-Partnership had knowledge of
Yoseph's intent to evade bargaining with District 65 and to evade any
liability which may have accrued by reason of the violations committed
on July 19. He therefore concluded" that Girard Inc. `... should
be required to accept responsibility for the reemployment of the dis-
criminatees." [Emphasis supplied.] We do not agree.
The question before us is whether or not Girard Inc. may also be
found to be liable for Yoseph's violations. We think not. We can
perceive no basis for the Trial Examiner's finding that a conclusive
presumption arises that Girard-Partnership had knowledge of Yo-
seph's intent to violate the Act. Yoseph was never a partner, officer,
or agent of Girard-Partnership, and only achieved a status whereby
his knowledge would be imputable to Wolf and Gillick when Girard
Inc. was formed, almost 1 month after the shutdown of the plant and
discharge of the employees. Thus, there is no apparent legal theory
upon which to establish such a presumption. Rejecting the "conclu-
sive presumption," the record is devoid of evidence to show knowledge
by Wolf and Gillick of Yoseph's intent to evade liability by the trans-
action which resulted in Girard Inc. taking over the assets and business
of the Respondent. As there is no basis for concluding that Girard
Inc. was other than a good-faith purchaser dealing at arms' length,
we do not believe that the facts of this case would warrant assessing
such a liability against Girard Inc. in the absence of such a showing
of knowledge.14 Accordingly, we find that while the transfer and
relationship in question are significant as a part of the process by
which the Respondent violated the Act, they are, in our opinion, not
controlling insofar as the remedy is concerned.
ORDER
The Board does not adopt the "Recommended Order" of the Trial
Examiner. Rather, we hereby reaffirm the Order 15 contained in our
L No exception was taken to this finding.
is The Trial Examiner phrased this in the form of a suggestion rather than that of a
recommendation , and it should be noted that such a provision is not included in the
"Remedy" section of his Intermediate Report. Thus , in substance , we are not reversing
the Trial Examiner but merely rejecting his suggestion
14 N.L R.B. v. Birdsall -Stockdale Motor Company, 208 F. 2d 234 (C A 10) ; Symns
Grocer Co ., et al ., 109 NLRB 346.
15As we construe the remand as going only to the question of Girard Inc.'s potential
liability , we do not reach the question of the expanded backpay remedy recommended by
the Trial Examiner as not being within the scope of the remand Therefore we reaffirm
the Board 's original Order in this respect . Member Fanning adheres to the broader
remedy set forth in his partial dissenting opinion to the Board's original Order
M. YOSEPH BAG COMPANY 1315
original Decision and Order 18 with the following modification to
conform that Order to the facts as found herein. Paragraph 2 (b)
shall be amended to read :
(b) Make whole those individuals found discriminated against
for any loss they may have suffered by reason of the discrimina-
tion against them from the date of their discharge (July 19, 1957)
until the date on which the Respondent, in fact, went out of
business (August 17, 1957).
MEMBER RODGERS, dissenting :
The Third Circuit Court of Appeals remanded this case to the Board
for the purpose of ascertaining the answers to three specific questions."
Accordingly, the hearing was reopened and a Supplemental Intermedi-
ate Report was issued. The matter is once again before the Board
for decision.
My colleagues in this opinion have determined that (1) the Respond-
ent determined to go out of business on or about July 30, 1957, and
(2) the Respondent did not in fact go out of business until August 17,
1957. I disagree with both determinations.18
As to my colleagues' first conclusion, it is clear from the record that
the Respondent announced its intention to close down and did in fact
close down on July 19, 1957. Whatever limited activity may have
occurred following that date can reasonably be construed as nothing
more than a cleanup operation necessary to the orderly liquidation of
the business. Certainly it cannot be said that Respondent's normal
business operations continued after that date, nor is there any evidence,
verbal or otherwise, indicating any intention to resume operations.
The closing down of a business cannot be accomplished in a single
moment or by a single act. Nothing short of a sudden and complete
abandonment of a property could satisfy so harsh a standard as my
colleagues are imposing.
Moreover, I do not deem relevant, much less controlling, the date
on which the agreement to sell the business was consummated. This
date may well be significant in establishing whether there was or was
not an agreement to sell. But it is not, in my opinion, relevant to
the Respondent's state of mind on July 19, 1957, when it announced
its intention to and did in fact close down the plant. Nor is there
11128 NLRB at 219-221.
17 The court remanded the case for the Board : ( 1) to determine the date the decision
was made that the Company "completely and permanently should go out of business" ;
(2) to determine the date on which the Company did , in fact, go out of business, (3) to
indicate what importance , if any, the Board attaches to the fact that the business of the
Company was taken over by Girard Bag Company, a corporation of which David Yoseph
is a director , officer, and substantial stockholder.
is I agree with the majority 's finding with respect to the third question posed, that no
liability should attach to Girard Inc
672010-63-vol . 139-84
1316 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
any evidence that the Respondent vacillated between selling the busi-
ness and reopening it. The transaction under discussion was not con-
ditional ; if it collapsed, other avenues of disposing of the business
remained open to the Respondent, any one of which would have been
consistent with its prior decision to cease functioning as a business
entity. In short, I believe the agreement in question did determine
the final disposition of the closed-down business, but it is over-reaching
to say that the decision to close down, already made and acted on,
did not come into being until the terms of an agreement to sell were
agreed upon.
Now as to their second conclusion, it seems to me that my colleagues
have set forth not the date when the Respondent went out of business,
but have set forth the date upon which the Respondent Company
was declared legally dead. There is a difference 19 It is true, as the
majority points out, that as of that date (August 17, 1957), the Re-
spondent "was no longer capable of carrying on the functions for
which it was designed." Indeed, it could not, for it had ceased to
exist. But, in my opinion, the court did not ask us to determine the
date of the legal demise of the Respondent; it asked us, I believe, to
determine the date the Respondent did in fact "go out of business,"
in the everyday sense of that term.
Since, as I have previously indicated, whatever activity took place
at and around the Respondent's property after July 19, 1957, could
well and reasonably be construed as activity essential to the orderly
liquidation of its affairs, and since the Respondent did not perform
"the functions for which it was designed" after that date, I would
find that the Respondent effectively went out of business on July 19,
1957, and has been out of business continually since that date.
Based on the foregoing, I would reaffirm my holding in the origi-
nal decision in this case.20
19 The laws in a number of States ( for example , South Carolina ) extend the legal life
of a business entity for a period of time after it has gone out of business , i.e., after its
commercial life has ended . See Darlington Manufacturing Company, et at., 139 NLRB
241, footnotes 19, 21 To apply this test would, in my opinion, result in finding that
an entity continued in business until it was legally dead , whereas in fact it may well have
been out of business in the commercial sense for a year or more.
20 For a more detailed discussion of this aspect of the problem , see my dissent in
Darlington Manufacturing Company , et at, supra.
SUPPLEMENTAL INTERMEDIATE REPORT
On July 21, 1960, the National Labor Relations Board issued a Decision and
Order in the above-entitled proceeding, 128 NLRB 21 (Chairman Leedom and
Member Bean in agreement, Members Jenkins and Fanning concurring in part and
dissenting in part, Member Rodgers dissenting). Thereafter, the Board sought
enforcement of its Order and the parties filed petitions for review. On September
18, 1961, the United States Court of Appeals for the Third Circuit remanded the
case to the Board with directions to clarify its findings. The court specifically
directed the Board to: (1) determine on or about what date the decision was made
that the Respondent Company completely and permanently should go out of business;
(2) determine the date on which the Respondent Company did, in fact, go out of
business; and (3) investigate the nature of the transaction by which Girard Bag
M. YOSEPH BAG COMPANY 1317
Company took over the business of the Respondent Company and the relationship be-
tween Girard Bag Company, David Yoseph, and M. Yoseph Bag Co. On Decem-
ber 8, 1961, the Board caused an Order to be entered herein opening the record
and ordering that a further hearing be held before a Trial Examiner for the purpose
of adducing additional evidence on the issues enumerated by the court, as set forth
above, further ordering that the proceeding be remanded to the Regional Director
for the Fourth Region for the purpose of arranging such further hearing and to
issue notice thereof, and further ordering that upon the conclusion of the supple-
mental hearing, the Trial Examiner prepare and serve upon the parties a Supple-
mental Intermediate Report containing findings of fact upon the evidence received
pursuant to the provisions of the Order, and conclusions of law, and recommendations.
Pursuant to notice of supplemental hearing and order rescheduling supplemental
hearing, the matter came on to be heard before the Trial Examiner Arthur E.
Reyman at Philadelphia, Pennsylvania, on February 13, 1962. At the hearing, each
party was represented by counsel and was afforded full opportunity to offer and
produce additional evidence on the issues enumerated by the court, as set forth above.
Upon the entire record, including the testimony of witnesses who testified at the
supplemental hearing, and from my observation of the witnesses , I make the
following:
1. FINDINGS OF FACT
Maurice H. Wolf, a witness called by the Respondent Company, is secretary-
treasurer of Girard Bag Company, Incorporated. He, Harry Gillick, and David
Yoseph are the only stockholders and each holds an equal number of shares of the
stock comprising the total shares of the corporation.
A certificate of incorporation of Girard Bag Company, Incorporated, was filed
pursuant to the laws of the Commonwealth of Pennsylvania on August 15, 1957.
A bill of sale covering the transfer of assets from M. Yoseph Bag Co., a partnership,
to Girard Bag Company, Incorporated, was executed and impliedly delivered on
August 17, 1957. According to Wolf, two of the three stockholders of the corpora-
tion constitute a quorum for the taking of any action other than routine concerning
the business of the corporation.' Prior to the formation of the corporation, Wolf
and Harry Gillick traded as a partnership under the name of Girard Bag Company
and had been so engaged in business for approximately 11 years. It was the policy
of this partnership not only to process bags but, quoting Wolf, "to go out in the field
to smaller dealers , or any type of a dealer that handles bags , and buy up his
merchandise and resell it in carload or trailer load lots through the country and out
of the country."
Wolf testified that on Monday night, July 15, 1957, he met with David Yoseph
at the latter 's home and on that evening a verbal agreement was made that he,
Gillick, and Yoseph would form a corporation which would take over the business
of M. Yoseph Bag Company; that he instructed his attorney to consult with the at-
torney for Mr. Yoseph and proceed to draw the documents necessary to form a
corporation; that approximately 2 weeks later, the principals met with their attorneys
and discussed details necessary to be decided concerning the transfer of assets of
Yoseph to a corporation and the formation of a corporation.
David Yoseph, a witness called by the Charging Party, testified that he did not
recall that he at any time before August 15 discussed the Union and its demands
with either Wolf or Gillick, although both before and after July 11, when he first
met with the union representatives, he was concerned about the economic aspects
of his business because he was spending less money for merchandise and it was
costing him more to process the bags; that after the Union presented itself to him,
1 The Board has found , and the court has agreed , that the July 15 date is not sig-
nificant in respect to the first time a decision was made to go out of business but that
M Yoseph Bag Co. was in fact in business at least until July 19 . Further reviewing the
findings of the Board , it Is clear that Yoseph was In business on July 19, he on the morn-
ing of that day having spoken to his assembled employees and in the afternoon having,
as the Board found and the court agreed, refused to bargain collectively in good faith
upon the offer of Romadell Jones, the union representative, to enter into negotiations
looking forward to agreement on wage rates. Obviously, then, Yoseph had not made up
his mind definitely to terminate the business of the Yoseph partnership as of late after-
noon on July 19. Accepting the fact of this meeting as related by Wolf and his testimony
that he and his partner and Yoseph had instructed their attorneys to prepare or start
the preparation of necessary corporate papers, that in itself does not show a final determi-
nation by Yoseph to transfer the assets of his partnership to a corporation . There was
no meeting of the minds at this point.
1318 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
it created a factor in his consideration as to whether or not he would act on the
suggestion of Wolf to form a corporation.
According to David Yoseph, the dissolution of the partnership of M. Yoseph
Bag Company was accomplished on August 15, or on August 17, the date of the
bill of sale of the assets of that partnership to the corporation.
Vernal Soltau and Walter Romadell Jones, witnesses called by the General Coun-
sel, each testified that during the week of July 22 and thereafter for approximately
1 month he observed trucks going out in the morning from the Yoseph plant and
returning and being unloaded from 4:30 to 5 p.m. in the afternoon. Both witnesses
said that they did not observe the processing of bags during this period. Soltau
testified that his observations of activity at the Yoseph establishment were for 5
days a week for this approximate month. Jones, for a least 1 week and from time
to time thereafter during that month said that he noticed trucks going out in the
morning and coming back at night and when they came back they would be loaded;
that occasionally he would follow a truck and could see bags being picked up from
customers (farmers), leave one customer and go to another, and return to the bag
plant for unloading in the evening.
Upon the transfer of the assets of the Yoseph partnership to the corporation, the
customer list of the partnership was transferred as goodwill to the corporation.2
After the transfer of his duties from Yoseph Bag to Girard Bag Company, In-
corporated, David Yoseph performed more or less the same functions as he per-
formed as a partner of the former business. He and the other owners were engaged
in buying bags, the processing of bags, overseeing plant operations, and the moving
of merchandise through sales. He estimated that about one-third of the accounts
of customers of the partnership became accounts of the corporation, that customers
he had serviced previously he continued to service for the corporation if he was
there when transactions were made, just as he serviced other customers of the corpora-
tion. I think it fair to say that, the business of the corporation being of the same
nature as the business of the dissolved partnership, his duties and responsibilities as
an employee and as an officer or director of the corporation were substantially the
same as his duties had been as a member of the partnership. Certainly Yoseph
did not have the final authority or full authority with respect to the making of
decisions for the corporation, in view of the testimony of Wolf, impliedly supported
by that of Yoseph, that the three stockholders of the corporation had equal duties
and responsibilities and insofar as definitive or affirmative action by the corporation
is concerned, two of the three partners have the final say or, putting it the other way,
no one stockholder has as a matter of right the authority to control the actions
or business activities of the corporation other than performing the customary, usual
and routine duties associated with the running of the business from day to day.
Concluding Findings
1. I find that the Respondent Company's decision to completely and permanently
go out of business was on the day approximately 2 weeks after July 15, when the
oral agreement was made to form a corporation. This would be the time when
the interested parties and their attorneys met for the purpose of working out the
details of the transfer of the assets of M. Yoseph Bag Company, the partnership,
to a new corporation, and their then agreement as to detail imparted to their at-
torneys. The precise date could not be fixed by Wolf so I therefore find that the
date of the decision was on or about July 30, 1957. In so finding, I have considered
the Board's finding that Yoseph's decision to close the plant was not announced until
he was informed of the employees' choice to continue being represented by District
65, and that the Respondent's alleged economic justification for its conduct con-
stituted a pretext to obscure its real motivation, which was to evade dealing with
the Union. The continuing activity at the bag plant, at least during the week of
July 22 and thereafter, is indicative of one or both of two probabilities: (1) that
Yoseph intended to close his plant and go out of business, or (2) to negotiate fur-
ther with Wolf and Gillick and if no satisfactory agreement could be made with
them, then to close his plant. The circumstances of the case do not permit a find-
ing that Yoseph immediately decided to completely and permanently go out of busi-
2 Although a stipulation between counsel says that the transfer of goodwill was not
covered by the transfer of assets of Yoseph to the corporation, the testimony of David
Yoseph that the list of Yoseph's accounts constituted goodwill is more acceptable to me,
when it is considered that both Yoseph and Wolf said in effect that the union situation
had no bearing on the decision to sell or the actual termination of the partnership.
M. YOSEPH BAG COMPANY 1319
ness at the very time he laid off or discriminatorily discharged his employees on
July 19.
2. I find that the Respondent, M. Yoseph Bag Company, did, in fact, go out of
business on August 15, 1957, the day the corporate certificate for Girard Bag Com-
pany, Incorporated, was filed. The Respondent was engaged in some kind of
activity during and following the negotiations between Yoseph, Wolf, and Gillick.
However, on August 15, the Respondent became finally defunct as a business, as is
conclusively shown by the filing of the corporate certificate. The Girard Bag Com-
pany, Incorporated, was not a de facto corporation actively engaged in business in
the interim between about July 30 and August 15 is evidenced by the fact that the
transfer of assets from the partnership to the corporation was not effectuated until
the execution and implied delivery of the bill of sale on August 17, 1957.
3. I find that the nature of the transaction by which Girard Bag Company took
over the business of the Respondent Company, in the circumstances, could not have
been based on an absolute right of the Respondent to go out of business for any
reason. On the contrary, the whole of the circumstances, including the engaging
in by the Respondent of unfair labor practices on and prior to July 19, clearly show
the nature of the transaction to be such as to require a finding that the motivation
for the disposition of Yoseph assets by the Respondent was to defeat and evade
the efforts of his employees to bargain collectively through a representative of their
own choosing; and further, the professed ignorance of Wolf and Gillick regarding
the organizational activities of the Union and the concerted activities of the employees
of Yoseph is no excuse for the attempted evasion of such liability as may have
accrued against Yoseph by reason of the Respondent Company's unlawful activities.
The nature of the transaction on its face shows apparent legality of action; factually,
the nature of the transaction was evasive insofar as the rights of employees under
Section 7 of the Act were concerned. I find further that the relationship between
Girard Bag Company, David Yoseph, and M. Yoseph Bag Company because of
the nature of the transaction, was intimate and close and on the whole record a
conclusive presumption arises that Girard Bag Company (the partnership of Wolf
and Gillick) had knowledge of the intent of Yoseph to, among other things, evade
bona fide collective bargaining with the Union and any liability which might have
accrued against him by reason of the discriminatory layoffs or discharges of July 19 3
Therefore, I further find that Girard Bag Company, Incorporated, by taking over
the business of M. Yoseph Bag Company, and by continuing the business of Girard
Bag Company, a partnership, is and has been engaged in commerce within the
meaning of the Act .4
II. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE
Those activities of the Respondent Company set forth in section I, above, occur-
ring in connection with the operations of the Company as set forth in the Decision
and Order of the Board issued July 21, 1960, 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 of
commerce.
III. THE REMEDY
Having found that the Respondent Company has engaged in certain unfair labor
practices, it shall be recommended that it be ordered to cease and desist therefrom
and take certain affirmative action which it is found, is necessary to effectuate the
3I do not overlook the argument of counsel for the Respondent that Yoseph Bag Com-
pany was engaged in the business of bag brokerage, as distinguished from the recondition-
ing and the sale of bags. He says that "Mr. Yoseph's amalgamation into this organization
simply gave them an inside man, one who could control the production and the processing
of bags, while they themselves could devote themselves to the operation of selling on a
wider scale." However, this argument is directed to the nature of the business of the
corporation, and not to the nature of the transaction.
'i Certainly, Girard Bag Company, Incorporated, cannot be found to be the alter ego of
the Respondent. There existed, though, through the relationship between Girard Bag
Company and M. Yoseph Bag Company, a situation where properly the corporation should
be required to accept responsibility for the reemployment of the discriminatees Cf.
N L R.B v. Aluminum Tubular Corp. et al., 299 F. 2d 575 ( affirming in part 130 NLRB
1306). and cases cited
1320 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
policies of the Act and to restore insofar as possible the status quo existing prior
to the commission of the unfair labor practices.
It shall further be recommended that the Respondent Company be ordered to
make whole each employee discriminatorily laid off or discharged on July 19, 1957,
for any loss of pay he may have suffered by reason of the Respondent's discrimina-
tion, by payment to him of a sum of money equal to the amount he would normally
have earned from the date he was terminated until the date he has obtained sub-
stantially equivalent employment with another employer or, in the event such sub-
stantially equivalent employment has not or cannot be obtained, until the date of
an offer of employment made to him by the Girard Bag Company, Incorporated, less
his net earnings during such period, to be computed on a quarterly basis in the manner
established in F. W. Woolworth Co., 90 NLRB 289; and each such employee shall
also be reimbursed for any expenses justifiably incurred in the seeking of employment .5
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. Morris Yoseph 6 and David Yoseph doing business as M. Yoseph Bag Com-
pany (Respondent) at the times material herein, was engaged in commerce within
the meaning of the Act.
2. Girard Bag Company, Incorporated, is a Pennsylvania corporation and is and
has been since August 15, 1957, engaged in commerce within the meaning of the Act.
3. District 65, Retail, Wholesale and Department Store Union, AFL-CIO, is
a labor organization within the meaning of the Act.
4. On July 11, 1957, and at all times since, the Union aforesaid has been the
exclusive representative of all the employees in an appropriate unit of the Respond-
ent's employees for the purposes of collective bargaining within the meaning of
Section 9(a) of the Act.
The unit of the Respondent's employees appropriate for collective bargaining
is and has been:
All production and maintenance employees, including truckdrivers, of the Re-
spondent excluding office clerical employees, guards, and supervisors as defined in
the Act.
5. By discriminating in regard to the hire and tenure of employment of employees
by closing its plant and discharging its employees on July 19, 1957, the Respondent
has discouraged membership in a labor organization and by such discrimination and
by interfering with, restraining, and coercing employees in the exercise of the rights
guaranteed in Section 7 of the Act, as hereinabove found, the Respondent has engaged
in and is engaging in unfair labor practices within the meaning of Section 8(a)(3)
of the Act and Section 8 (a) (1) thereof.
6. By refusing, on and after July 19, 1957, to bargain collectively with the afore-
said Union as the exclusive representative of the employees, in the aforesaid ap-
propriate unit, the Respondent has engaged in and is engaging in an unfair labor
practice within the meaning of Section 8(a) (5) of the Act.
7. By interrogating the employees, threatening to deprive them of overtime and
in fact doing so, threatening individual employees that the plant would be closed,
and threatening assembled employees, on July 19, 1957, that the plant would be
closed if they did not renounce their chosen representative, the Respondent engaged
in and is engaging in unfair labor practices within the meaning of Section 8(a)(1)
of the Act.
8. The aforesaid unfair labor practices are unfair labor practices affecting com-
merce within the meaning of Section 2(6) and (7) of the Act.
[Recommendations omitted from publication.]
6 As the record reflects, the activities of the Yoseph partnership as such long since
ended. The Charging Party has suggested that because the Respondent has been found
to have engaged In unfair labor practices before its dissolution, the Board may properly
order It to resume business at its Bridgeton plant and offer reinstatement to the dis-
criminatees at that location. In the absence of compelling authority, aside from feasibility,
I do not believe that the Act empowers the Board to make such an order.
0 Morris Yoseph died on October 5, 1958, during the pendency of litigation herein, prior
to the Issuance of the Decision and Order of the Board on July 21, 1960.