Market King Inc.

National Labor Relations Board - Board Decisions

Jan 23, 1987

282 N.L.R.B. 876 (N.L.R.B. 1987)

876 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Market King, Incorporated; and William Chu and
United Food and- Commercial Workers Union,
Local 770, chartered by the United Food and
Commercial Workers International Union,
AFL-CIO-CLC. Cases 21-CA-21808 and 21-
CA-22058
23 January 1987
DECISION AND ORDER
BY MEMBERS BABSON, STEPHENS, AND
CRACRAFr
On 13 June 1984 Administrative Law Judge
James S. Jenson issued the attached decision. The
Respondents and the General Counsel filed excep-
tions and supporting briefs, and the General Coun-
sel and the Charging Party' filed briefs in opposi-
tion to the Respondents' exceptions.
The National Labor Relations Board has delegat-
ed its authority in this proceeding to a three-
member panel.
The Board has considered the decision and the
record in light of the exceptions and briefs and has
decided to affirm the judge's rulings, fmdings,2 and
conclusions3 and to adopt the recommended Order
as modified.4
1 We deny the Charging Party's request for an award of reasonable
attorneys' fees and litigation expenses We have reviewed the record, and
we find that the Respondents' defenses are unpersuasive but not patently
frivolous Tudee Products, 194 NLRB 1234 (1972) See also Hotel & Res-
taurant Employees Local 19 (Seasons Restaurant), 277 NLRB 842 (1985);
Super Save, 273 NLRB 20 (1984)
2 The Respondents have excepted to some of the judge's credibility
findings The Board's established policy is not to overrule an admmistra-
tive law judge's credibility resolutions unless the clear preponderance of
all the relevant evidence convinces us that they are incorrect Standard
Dry Wall Products, 91 NLRB 544 (1950), enfd. 188 F 2d 362 (3d Cir
1951). We have carefully examined the record and find no basis for re-
versing the findings
The General Counsel correctly notes that on two occasions the judge
inadvertently stated that Respondent Chu was responsible for incorporat-
ing "Respondent Market Basket" rather than "Respondent Market King."
3 We agree with the judge that Respondent Chu and Respondent
Market King are alter egos. Contrary to the Respondents' contentions,
evidence of unlawful antiunion motive in the creation of a corporation is
relevant, but not essential , to a finding of alter ego status Leslie Oldsmo-
bile, 276 NLRB 1314 (1985) Accord NLRB v. Allcoast Transfer, 121
LRRM 2393 (6th Cir 1986), Goodman Piping Products v NLRB, 741 F 2d
10, 12 (2d Cir 1984). See also J. M. Tanaka Construction v NLRB, 675
F.2d 1029, 1033 (9th Cir 1982) (no single factor controlling in alter ego
analysis) In view of that conclusion, we find it unnecessary to consider
the judge's additional finding that the Respondents constitute a single em-
ployer Because Chu was named as a respondent in the proceeding and is
properly found to be an alter ego of Market King, neither Riley Aeronau-
tics Corp, 178 NLRB 495, 501 (1969), nor Chef Nathan Sez Eat Here, 201
NLRB 343, 344 fn 8 (1973), supports the Respondents' claim that indi-
vidual liability may not be imposed on Chu It is also particularly signifi-
cant that before Market King was incorporated, Chu, as an individual,
negotiated the purchase of the store from Kroger, signed the purchase
and sale agreement, and told some employees that he intended to operate
a nonunion store
4 As discussed infra, we have made certain modifications to the judge's
recommended Order in light of the bankruptcy petition filed by Respond-
ent Market King on 1 July 1983. In the event that the Respondents have
ceased their operation of the store, we shall leave to the compliance stage
of this proceeding the determination whether further modifications to the
1. The judge found that the Respondents violat-
ed Section 8(a)(5) and (1) by refusing to honor and
apply the collective-bargaining agreement in effect
from 27 July 1981 until 29 July 1984 and by unilat-
erally implementing changes in terms and condi-
tions of employment. The judge affirmatively or-
dered the Respondents to honor and apply the
agreement until its expiration date. We agree with
the judge that the Respondents' conduct violated
Section 8(a)(5) and (1), but we shall modify his rec-
ommended Order for the reasons below.
The record establishes that on 1 July 1983 Re-
spondent Chu, acting on behalf of Respondent
Market King, filed with the United States Bank-
ruptcy Court for the Central District of California
a bankruptcy petition under Chapter 11, Title 11,
of the United States Code. In NLRB v. Bildisco &
Bildisco, 465 U.S. 513, 527-534 (1984), the Supreme
Court held that from the filing of a petition in
bankruptcy until formal acceptance, a collective-
bargaining agreement is not an enforceable con-
tract within the meaning of Section 8(d) of the Na-
tional Labor Relations Act. The Court also held
that a debtor-in-possession does not commit an
unfair labor practice by unilaterally rejecting or
modifying a collective-bargaining agreement before
formal rejection is approved by the bankruptcy
court.
In Edward Cooper Painting, 273 NLRB 1870
(1985), where an employer filed a bankruptcy peti-
tion after repudiating its collective-bargaining
agreement, the Board found that Bildisco precluded
an order requiring the employer to comply with
the contract after the date of the filing of the bank-
ruptcy petition. Consistent with Bildisco and
Edward Cooper Painting, we shall modify the
judge's recommended Order to require that Re-
spondent Market King honor and apply the con-
tract until 1 July 1983, the date that it filed its
bankruptcy petition.5
In this connection we note that Respondent Chu
filed the bankruptcy petition on behalf of Respond-
ent Market King. There is no evidence that Re-
spondent Chu filed a bankruptcy petition on his
own behalf, or that he has been brought within the
jurisdiction of the bankruptcy proceeding involving
Respondent Market King. Consequently, in con-
nection with this issue we shall not disturb the
judge's recommended Order as it applies to Re-
remedy are appropriate See generally Behring International, 252 NLRB
354 in 4 (1980)
5 The record does not disclose whether the bankruptcy court permit-
ted rejection of the contract. Consequently, we shall also modify the
judge's recommended Order to provide that liability shall extend to the
contract's termination date if it is determined during a compliance pro-
ceeding that the bankruptcy court did not approve rejection of the con-
tract
282 NLRB No. 123
MARKET KING, INC. 877
spondent Chu. See Edward Coop- er'Painting, supra
at 1870 fn. 8.
2. In her exceptions the General Counsel con-
tends that the judge erred by failing to provide a
make-whole remedy for the unit employees who
have worked for the Respondents since the open-
ing of the facility on 21 October 1982. We find
merit in this exception.
The judge found that the Respondents violated
Section 8(a)(5) and (1) by repudiating the contract
which they had agreed' to assume, and he recom-
mended that they be ordered to honor and apply
that contract. The employees hired by the Re-
spondents were covered by the contract and were
therefore entitled to receive contractual wages and
benefits and to have trust fund contributions made
as provided in the contract. Consequently, we shall
modify the judge's Order to require, that these em-
ployees be made whole for the losses they suffered
as a result of the Respondents' unlawful conduct.
Consistent with our findings above, we shall termi-
nate the remedy with respect to Respondent
Market King as of the date it filed its bankruptcy
petition.6 ' We shall not limit the remedy with re-
spect to Respondent Chu because he as an individ-
ual is ' not involved in the bankruptcy proceeding.
ORDER
The National Labor Relations Board adopts the
recommended Order of the administrative law
judge as modified below and orders that the Re-
spondents, Market King, Incorporated and its alter
ego William Chu, 'Monterey Park, California, their
officers, agents, successors, and assigns, shall take
the action set forth in the; Order as modified.
1. Substitute the following for paragraph 2(b).
"(b) Honor and apply all the terms and condi-
tions of the 27 July 1981 -29 July 1984 collective-
bargaining agreement between the Union and the
Food Employers Council , Inc., except that Re-
spondent Market King 's 'liability under this provi-
sion shall terminate as of 1 July 1983, the date on
which Respondent Market King filed its bankrupt-
cy petition, unless it is determined during a compli-
ance proceeding that the bankruptcy court did not
approve rejection of the collective-bargaining
agreement,, in which case liability shall extend until
the termination date of ' the collective-bargaining
agreement."
2. Insert the following as: paragraphs 2(c) and (d)
and reletter the subsequent paragraphs.
"(c) Make whole the bargaining unit employees
who have worked for the Respondents since the
6 As noted above in fn. 5, liability shall extend to the contract's termi-
nation date if it is determined during a compliance proceeding that the
bankruptcy court did not approve rejection of the contract.
opening of the facility on 21 October 1982, and re-
imburse the funds established under the collective-
bargaining agreement, for any losses suffered as a
result of the Respondents' repudiation of the col-
lective-bargaining agreement, with interest, 7 except
that Respondent Market King's liability under this
provision shall terminate as of 1 July 1983, the date
on which Respondent Market King filed its bank-
ruptcy petition, unless it is determined during a
compliance proceeding that the bankruptcy court
did not approve rejection of the collective-bargain-
ing agreement, in which case liability shall extend
until the termination date of the collective-bargain-
ing agreement.
"(d) Preserve and, on request, make available to
the Board or its agents for examination and copy-
ing, all payroll records, social security payment
records, timecards, personnel records and reports,
and all other records necessary to analyze the
amount of backpay due under the terms of this
Order."
3. Substitute the attached notice for that of the
administrative law judge. '
° Because the provisions of employee benefit fund agreements are vari-
able and complex, the Board does not provide at the adjudicatory stage
of a proceeding for the addition of interest at a fixed rate on unlawfully
withheld fund payments . We leave to the compliance stage the question
of whether the Respondents must pay any additional amounts into the
fringe benefit funds in order to satisfy our "make-whole" remedy. These
additional amounts may be determined, depending on the circumstances
of each case, by reference to the provisions in the documents governing
the funds at issue and, where there are no governing provisions, to evi-
dence of any loss directly attributable to the unlawful withholding action,
which might include the loss of return on investment of the portion of
funds withheld, additional administratrive costs, etc , but not collateral
losses. See Merryweather Optical Co., 240 NLRB 1213 (1979)
With respect to the amounts due the employees for the Respondents'
contractual violations, see Ogle Protection Service, 183 NLRB 682 (1970)
Interest on these amounts shall be computed in accordance with Florida
Steel Corp, 231 NLRB 651 (1977).
APPENDIX
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
The National Labor Relations Board has found
that we violated the National Labor Relations Act
and has ordered us to post and abide by this notice.
WE WILL NOT refuse to recognize and bargain
with United Food and Commercial Workers, Local
770, chartered by the United Food and Commer-
cial Workers International Union, AFL-CIO-CLC
as the exclusive collective-bargaining representative
of our employees in the following appropriate unit:
878 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
All food clerks, bakery, health and beauty
aids, and household hardware clerks , general
merchandise clerks , clerk's helpers, and snack
bar and take -out food department employees
employed by us at our 2201 South Atlantic
Boulevard , Monterey Park, California facility;
excluding all office clerical employees, meat
department employees, janitorial employees,
maintenance employees , professional employ-
ees, guards and supervisors as defined in the
Act. -
WE WILL NOT refuse to honor and apply the
terms and conditions of the 27 July 1981-29 July
1984 collective-bargaining agreement between the
Union ,and the Food Employers Council, Inc.
WE WILL NOT unilaterally change terms and
conditions of employment of our employees.
WE WILL NOT tell employees that we are going
to operate a nonunion facility and not pay union
scale wages.
WE WILL NOT refuse to hire or otherwise dis-
criminate against employees to avoid recognizing
or bargaining with the Union.
WE WILL NOT in any other manner interfere
with, restrain , or coerce employees in the exercise
of the rights guaranteed them by Section 7 of the
Act.
WE WILL immediately recognize and, on request,
bargain collectively with United Food and Com-
mercial Workers Union, Local 770, chartered by
the United Food and Commercial Workers Interna-
tional Union , AFL-CIO-CLC as the exclusive bar-
gaining representative of all our employees in the
above-described appropriate unit.
WE WILL honor and apply all the terms and con-
ditions of the 27 July 1981-29 July 1984 collective-
bargaining agreement between the Union and Food
Employers Council , Inc., except that the liability of
Market King, Incorporated , under that agreement
shall terminate as of 1 July 1983 , the date on which
Market King, Incorporated filed its bankruptcy pe-
tition, unless it is determined during a subsequent
proceeding of the National Labor Relations Board
that the bankruptcy court did not approve rejec-
tion of the collective -bargaining agreement, in
which case liability shall extend until the termina-
tion date of the collective-bargaining agreement.
WE WILL make whole the bargaining unit em-
ployees who have worked for us since we opened
our facility on 21 October 1982, and WE WILL re-
imburse the funds established by the collective-bar-
gaining agreement , for any losses suffered as a
result of out repudiation of the collective -bargain-
ing agreement. Interest shall be computed as pre-
scribed by the National Labor Relations Board.
The liability of Market King , Incorporated under
the collective-bargaining agreement shall terminate
as of 1 July 1983, the date on which Market King,
Incorporated filed its bankruptcy petition, unless it
is determined during a subsequent proceeding of
the National Labor Relations Board that the bank-
ruptcy court did not approve rejection of the col-
lective-bargaining agreement, in which case liabil-
ity shall extend until the termination date of the
collective-bargaining agreement.
WE WILL offer employment and immediate and
full reinstatement to the former employees em-
ployed by The Kroger Co. in Store 113 to their
former jobs or, if those jobs no longer exist, to sub-
stantially equivalent positions, without prejudice to
their seniority or other rights and privileges previ-
ously enjoyed, discharging, if necessary, employees
hired from sources other, than The Kroger Co.,
Store 113, to make room for them, and WE WILL
make them whole for any loss of earnings and
other benefits they may have suffered as a result of
the discrimination against them, with interest.
MARKET KING, INCORPORATED
WILLIAM CHU
Lucy Acevedo, Esq., for the General Counsel.
Donald K Hufstader, Esq., of Santa Ana, California, for
the Respondent.
DECISION
STATEMENT OF THE CASE
JAMES S. JENSON, Administrative Law Judge. This
matter was heard in Los Angeles, California, on July 12
and 13, 1983, pursuant to charges filed on December 7,
1982, and March 14, 1983, and a consolidated complaint
that issued on April 29, 1983. The complaint alleges, in
substance, that Respondents Market King and Chu are
alter egos and a single employer; that Respondents vio-
lated Section 8(a)(5) by refusing to recognize the Union,
by refusing to apply the terms of a collective-bargaining
agreement that was assumed as a successor to The
Kroger Co., and by unilaterally changing terms and con-
ditions of employment; that Respondents violated Sec-
tion 8(a)(3) by refusing to employ former Kroger Co.
employees; and violated Section 8(a)(1) through state-
ments made by Respondents' agents. The Respondents
deny they are alter egos and a single employer; that the
purchase and sale agreement with The Kroger Co. was
valid; that they are the successor employer to The
Kroger Co., or obligated to apply the terms of the col-
lective-bargaining agreement between The Kroger Co.
and the Union; that they unlawfully refused to hire
former Kroger employees or engaged in any other un-
lawful conduct. Respondents further assert that the
Board is without jurisdiction to hear this matter for the
reason that the Respondents are debtors-in-possession
MARKET KING , INC. 879
seeking relief under Chapter 11 of the Bankruptcy Act;I
and that the Board , is without jurisdiction to enforce
either the purchase and sale agreement or the collective-
bargaining agreement . All parties were given full oppor-
tunity to appear , to introduce evidence , to examine and
cross-examine witnesses ; to argue orally and to file ' briefs.
Briefs were filed by both the General Counsel and Re-
spondents and have been carefully considered.
On the entire record in the case, including the briefs of
the parties , and from my observation of the witnesses
and their demeanor , I make the following
FINDINGS OF FACT
1. JURISDICTION
It is alleged, admitted , and found that since about Oc-
tober 21, 1982 ,2 the Respondents have been engaged in
the operation of a retail grocery store in Monterey Park,
California; that ' projected annual gross revenues will
exceed $500,000; that projected annual purchases and re-
ceipt of goods originating outside the State of California
will exceed $50,000; and that the Respondents are an em-
ployer engaged in commerce and in a business affecting
commerce within the meaning of Section 2(6) and (7) of
the Act.
11. THE LABOR ORGANIZATION INVOLVED
It is alleged , admitted , and found that United Food
and Commercial Workers Union, Local 770, chartered
by the United Food and Commercial Workers Interna-
tional Union, AFL-CIO-CLC is a labor organization
within the meaning of Section 2(5) of the Act.
III. THE WITNESSES AND CREDIBILITY RESOLUTIONS
There were 23 witnesses called to testify , during the
trial of this matter. The General Counsel 's witnesses
were: Vernon Williams, David Aldana, Jeffrey Stephens,
Peggy Jo Vernon , Robert Marsh , Joseph Muscolo, Leti-
cia Jaramillo, Yuji Natsume , Roland Eng, Brian Merritt,
Michael Valenzuela , Allen Muroi , Kathleen Lessley, Pa-
tricia Viorel, Gerald Vasquez , and Richard Duncan-all
employed by The Kroger Co. prior to its closing Market
Basket Store 113 on September 11; Thomas Murphy,
vice president and senior counsel for The Kroger Co.;
Dr. James Regalado , an assistant professor of political
science at California State University , Los Angeles;
Walter Chang, a reporter for the Centre Daily News, a
Chinese community newspaper ; Carl N . Carr, director of
the research and collective-bargaining department of the
Union ; and Millard Lowry , director of real estate for
The Kroger Co. The Respondents ' witnesses were: Wil-
liam Chu and William Kwan , president and vice presi-
dent, respectively, of Market King, Inc.
As there are significant conflicts in the testimony, it
has been necessary to make several credibility resolu-
I National Labor Relations Board proceedings against employers who
file voluntary bankruptcy petitions fall within the statutory exemption to
the automatic stay provision contained in the Bankruptcy Code. NLRB Y.
Evans Plumbing Ca , 639 F 2d 291 (5th Cir 1981). See also Mansfield Tire
& Rubber Co., 660 F.2d 1109 (6th Cir. 1981).
2 All dates are in 1982 unless stated otherwise
tions. "'In answering questions posed by the General
Counsel , William Chu was at times vague and evasive,
on occasion he contradicted himself, and in numerous in-
stances his testimony was contradicted by other wit-
nesses. In particular, material portions of his testimony
dealing with his purchase of Store 113 from Kroger,
were not only refuted by other witnesses but, given the
fact that Chu is a licensed real estate broker in the State
of California, defied belief. Further, Chu and Kwan con-
tradicted each other . Having observed the witnesses as
they related their versions of past events , and after re-
viewing the transcript of their testimony , I am convinced
that the testimony given by the General Counsel ''s wit-
nesses was more accurate and reliable. Thus, I do not
credit the testimony of either Chu or Kwan when it is in
conflict with that given by the General Counsel's wit-
nesses.
IV. THE ALLEGED UNFAIR LABOR PRACTICES
A. The Facts
The Kroger Co. is engaged in the operation of a chain
of retail grocery stores. ' Prior to 1983 , it operated ap-
proximately 63 stores in southern California under the
name of Market Basket . The store involved , Store 113, is
located in Monterey Park, California . Through its mem-
bership in the Food Employers' Council, a multieinploy-
er association , Kroger has recognized the Union, along
with a number of other retail clerks locals, for a number
of years as the collective-bargaining representative of its
grocery employees , including those employed in Store
113. The most recent in a series of collective -bargaining
agreements is effective from July 27, 1981 , through July
29, 1984.
During 1982 , Kroger advertised for sale and sold its
Market Basket chain to various, purchasers including
other chain store operators and independent purchasers.
At the time of their sale, all 63 stores were covered by
collective-bargaining agreements with various retail
clerks and other unions . Store 113 's agreement Was with
Local 770. Article XVIII of the agreement, entitled
"Successors and Assigns ," contains the following perti-
nent provisions:
B. NEW OWNER. This Agreement shall be bind-
ing upon the successors and assigns of the parties
hereto. In the event of bona fide sale or transfer of
any -store covered by this Agreement during the
period hereof, the new owner or such transferee
shall be notified of the obligation of this Agreement
and be required to become a party hereto. The
former owner shall be required to meet any and all
monetary benefits that employees have accumulated
under this Agreement.
D. SALE OR TRANSFER
1. In the event of a sale or transfer of a store or
stores, an employee shall be allowed a seven (7) day
period from the date of announcement to the em-
ployees of the sale or transfer during which time he
may determine whether he wishes to stay with the
880 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
seller or whether he wishes to make application for
employment with the new owner or transferee. In
the event the employee chooses to remain with the
seller, such choice shall not be construed as any
guarantee of employment over and beyond the
terms of this Agreement.
2. In the event of a sale or transfer of a store-or
stores, the new owner or transferee shall make
every effort to fill his employment needs in such
store or stores from those employees of the seller or
transferor who were employed in the stores sold or
transferred.
3. Such new owner or transferee, however, shall
not be required to retain in his, employ any of the
employees of the seller or transferor... .
The record shows that in mid-July, Chu contacted Art
Juergens , a Kroger official in Cincinnati, Ohio, regarding
the purchase of two stores, including Store 113. At Juer-
gens' direction, on July 23, Lowry, Kroger's director of
real estate, sent Chu three copies of Kroger's standard
purchase and sale agreement along with a "copy of the
Lease which will, be assigned to you." Lowry also called
Chu and made arrangements to meet him the following
week in Los Angeles. At the meeting, Chu expressed
concern over paragraph 5 of the purchase and sale con-
tract reads:
5. ASSUMPTION OF LIABILITIES
(a) Purchaser shall assume as of the Closing Date,
and perform when due, Seller's obligations arising
after the Closing under the Contracts (Exhibit C)
and the Lease(s) pertaining to the Store(s) pur-
chased.
(b) Seller, as a member of the Southern California
Food Employees' [sic] Council, Inc., is a party to
various labor contracts covering the Store(s) which
are described herein and more particularly de-
scribed below: (See Exhibit E).
Purchaser agrees to become a successor to all of
said applicable contracts and to abide by all rele-
vant terms and conditions thereof including the em-
ployment of Seller's bargaining unit employees in
accordance with said contracts.
Seller will, however, defend and hold Purchaser
harmless for any grievances or claims filed and re-
lating to Purchaser's operations of the involved
Store(s) prior to the Closing. Purchaser shall defend
and hold Seller harmless for any such claims arising
out of its operations subsequent to Closing.
Further, Purchaser agrees to contribute to the
multi-employer pension plan(s) listed on Exhibit F
for these employees who are currently participants
in said plan(s) and who are retained and employed
by Purchaser in accordance with the terms and con-
ditions of the labor agreement(s) listed in Exhibit E.
Purchaser will also provide to each of the plan(s)
listed in Exhibit F for a period of 5-plan years com-
mencing with the first plan year after the date of
this sale, a bond or the equivalent security, either of
which must be acceptable to Seller, in an amount
equal to the greater of. (a) the average annual con-
tribution required to be made by the Seller with re-
spect to the involved operations and plan(s) for the
three (3) plan years preceding the plan year in
which the sale of the operations occurred; (b) the
annual contribution that the Seller was required to
make with respect to the involved operations and
plan(s) for the last plan year before the plan year in
which the sale of the operations occurred.
Seller agrees to be secondarily liable to the de-
scribed plans for any withdrawal liability required
by law to be paid which arises out of Purchaser's
withdrawal from said plan(s) during the said first
five (5) plan years.
Exhibit E reads as follows:
Exhibit E
(LABOR CONTRACTS)
1. Collective bargaining agreement between Food
Employers Council, Inc. and UFCW, Retail Clerks
covering clerks, stockers, box people, and general
merchandise clerks at the stores currently or to be
operated by Seller at the store location(s) which ex-
pires on or about July 29, 1984.
2. Collective bargaining agreement between The
Food Employers Council, Inc. and UFCW, Meat
Cutter Unions covering meat cutters, wrappers and
apprentices at the stores currently or to be operated
by Seller at the store location(s) which expires on
the first Sunday of November, 1982.
3. Collective bargaining agreement between the
Food Employers Council, Inc. and the Bakery &
Confectionery Workers' Union Local 31 or Local
37 covering certain employees of in-store bakeries
currently or to be operated by Seller at the store
location(s) and which expires on February 28, 1985.
According to Lowry, whom I credit, Chu indicated he
did not want to operate a union store primarily because
of the cost. Lowry stated that Kroger could not sell a
store without the assumption-of-liabilities clause because
of a provision in the collective-bargaining agreement
with the Union that required it. He went on to state that
Kroger's labor relations department was trying to sched-
ule a meeting with the Union in Los Angeles in an effort
to gain some type of concession so that independent
store purchasers could have some type of economic
relief from the terms of the Kroger-Union contract.
Lowry suggested that Chu review the documents with
his attorney and, if there were any items he could not
agree to, to cross them out and submit them to Kroger
for its reevaluation.3 Sometime after the first of August,
Chu returned the executed purchase and sale agreement
to Kroger, with the assumption-of-liabilities clauses
crossed out. On either August 17 or 18, Kroger officials
met with the Union in an unsuccessful attempt to gain
relief for the independents from the terms of the con-
tract. Within the next day or two, Lowry called Chu and
informed Chu that "the deal could not go forward with-
3 By this time Chu had decided to purchase only one store
MARKET KING, INC. 881
out the assumption of liabilities clauses." He then substi-
tuted new pages for the ones containing the crossed-out
clauses, and sent the purchase and sale agreement back
to Chu with the agreed-on purchase price of $200,000
written in on page one of the documents. On August 23,
Juergens received a call from Chu. Also present in Juer-
gens' office were Lowry, Fred Warren, Kroger's direc-
tor of labor relations department, and Lynn Gellenbeck
and Murphy, both Kroger attorneys.4 According to
Lowry, whom I credit, Chu stated he was still interested
in the store but was concerned about assuming the union
obligations; that Juergens explained that Kroger was le-
gally obligated to include the assumption-of-liabilities
clause; that Murphy explained in more detail the obliga-
tion to the Union contained in the assumption-of-liabil-
ities clause; and that Warren discussed the details of
Kroger's unsuccessful meeting with the Union to gain
concessions for the independents from the Kroger-Union
contract. According to Lowry, whom I credit, and
whose testimony was corroborated in substantial part by
Murphy, Chu stated that if he had to assume the obliga-
tions to the Union, he felt he was entitled to a concession
or discount from the agreed-on price of $200,000, and
asked if Kroger would reduce the price. After negotiat-
ing back and forth, it was, agreed that Kroger would
reduce the price by $12,500 to $187,500 and Chu would
agree to the assumption-of-liabilities clause. Chu was in-
structed to change the price on the copies of the pur-
chase and sales agreement,, initial 'and date the change,
initial and date pages 2 and 3 of the agreement covering
assumption of liabilities, and return them to Lowry. Chu
agreed to do so and requested that Lowry send him
copies of all union contracts that he would be assuming.
By letter dated August 26, Lowry sent the union con-
tracts, stating in pertinent part that "Kroger had no alter-
native but to insist upon the union contracts being as-
signed with the store." Chu's testimony regarding the
August 23 telephone conversation, which I do not credit,
was to the effect that because he had been promised a
$25,000 reduction in the purchase price if' he purchased
two stores,'he asked if Kroger would give him a $12,500
reduction if he bought only one store; that Juergens
agreed; that Chu stated he could not assume the union
contract; and that Juergens told him there was no prob-
lem and to, go ahead and initial the price change and the
assumption-of-liabilities section that was only a formality.
But for the oral representations, Chu claimed, he would
not have, signed the purchase and sale agreement. As
noted at the outset, I do not credit Chu. He admitted he
has been licensed as a real estate salesman since 1977; he
has been licensed as a real estate broker since 1979; he
had dealt with contracts of purchase and sale in the real
estate business on numerous occasions, having been in-
volved in the purchase and sale of approximately 100
houses; and has owned and disposed of interests in a
cocktail lounge and restaurant. He is also an officer of
Trans-Am,, an investment company. Chu is obviously an
experienced and astute practitioner in the business and
real estate fields. Clearly the quid pro quo for the reduc-
tion in price was Chu's agreement to assume the liabil-
ities' in:- section 5 of the purchase and sale agreement.
Any contention to the contrary is rejected as not worthy
of belief.
The purchase and sale agreement that had been signed
by Chu on August 24 was approved by Kroger's legal
department and signed by Lowry on Kroger's behalf on
August 31.
On September 1, Chu filed articles of incorporation
with the State of California on behalf of Respondent
Market Basket. Chu is the president, a director, and the
majority stockholder. His wife is also a stockholder and
director as is Kwan who is also the vice president. Mrs.
Chu's mother is also a stockholder.5 Chu's real estate
and investment company office is listed as the principal
place of business and' Chu as the agent for process serv-
ice.
A few days prior to September 3, Union Representa-
tive Carr received a telephone call from Ed Gund of
Gund and Krehbiel, consultants to management, who
stated that Chu was interested in purchasing the store
and asked if they could meet and discuss the terms of the
existing collective-bargaining agreement as it would
relate to Chu's taking over the store. Accordingly, a
meeting was held on September 3 in Gund's office.
Present besides Gund, Krehbiel, and Carr were Chu,
Kwan, and two others of Chu's associates.6 Gund stated
that Chu was taking over the store at a considerable in-
vestment and that it was difficult for an independent op-
erator to operate a store of that size and compete with
other stores in the area under the terms of the industry
agreement. Gund indicated that Respondents would like
relief from the present agreement and made several spe-
cific proposals on Chu's behalf. Although Carr did not
agree to the proposals, he expressed a willingness to con-
sider further negotiations. Carr later met with Gund and
discussed a standard ^ form of agreement the Union had
with some independent operators. Another meeting
scheduled for September 8 was canceled by Gund on the
ground Chu had decided against buying the store be-
cause of an inability to operate under the industry agree-
ment. On the same day, however, the Union received a
letter from Kroger stating that Chu had executed a pur-
chase and sale agreement. The record shows that on Sep-
tember 3, Chu had signed escrow instructions. There is
no indication from the document that he was signing on
behalf of the newly formed corporation. On September
9, Warren informed Carr' by telephone that "Chu had
purchased the store as a full successor of the collective
bargaining agreement."
Kroger's last day of operating Store 113 was Septem-
ber 11, at which time all employees were laid off or ter-
minated. Because of litigation between the landlord and
Respondents over the lease, Respondents did- not obtain
possession of the premises until October 11 and (lid not
open for business until October 21.
In both August and prior to the store closure on Sep-
tember 11, Chu and Kwan visited Store 113 on several
occasions. In mid-August, they talked to Richard
5 Chu was inconsistent and evasive regarding his ownership interest.
6 Although Chu was evasive about whether Gund represented hun at
4 Juergens' office is equipped with a speaker phone that was in use the meeting, Respondents' counsel stipulated that he did
882 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Duncan and offered him the' job of store manager, which
was declined, according to Duncan, because he did not
know "the buying aspect of the small store." In response
to his question as to whether the store would "go
union," Duncan was told no, that they could not afford
it. About 2 weeks before Kroger closed the store, clerk's
helper Kathleen Lessley asked Chu if he was planning on
keeping any employees, to which Chu replied, "Yes,
most likely if the Union goes the way we want them to."
About the same time Yuji Natsume, head of the produce
department under Kroger, was called to the backroom
by Chu, Kwan, and David Puncer and asked if he would
like to stay on.7 Pay was discussed and Natsume stated
he was receiving "union scale." Chu informed him they
would operate the store nonunion. Natsume gave Chu
what purported to be his phone number, but which he
admitted may have been the wrong number. After the
store reopened, Natsume went in and was informed that
they had been unable to get hold of him. Natsume in-
formed Chu and Kwan he was going to retire, which he
did on January 1, 1983.
From September 15 to 30, Respondents advertised for
"experienced" employees in a Monterey Park newspaper.
The telephone number listed in the ad was that of Chu's
real estate office. The name of the store or its location
was not listed in the newspaper. Applicants were direct-
ed to ask for Mr. Kwan. Although Chu denied at first on
the witness stand that he had interviewed any applicants
for employment, a pretrial affidavit given the Board
during the investigation of the charges reveals that as ap-
plicants called in response to the newspaper ad, Kwan
referred them to Chu's real estate office for interview,
where in fact Chu interviewed employees for all posi-
tions but janitor on September 15 and 22.8 The fact Chu
interviewed several former Kroger employees was fur-
ther established through their testimony. '
The record shows that in August, Kroger employed
approximately 30 or 31 employees in Store 113, of whom
all but 2' were union members. The Respondents employ
20 to 21 employees. According to Chu, because the Re-
spondents have operated the store with more emphasis
on ethnic foods, Respondents expect all employees to' be
bilingual with ability to speak Spanish or some dialects
of Chinese or Japanese in addition to English. The
record shows that 11 former Kroger employees, all
union members, filed applications for employment with
Respondents, none of whom were hired: Maria Adragna
on September 22; David Aldana on October 13; Renee
Alvarez, Robert Marsh, and Michael Valenzuela on Oc-
tober 14; Terry M. Silver on October 28; Roland Eng,
Leticia Jaramillo and Kathy Lessley on October 19; Pa-
tricia Viorel on October 22; and Brian Merritt on Janu-
ary 26, 1983. Joseph Musculo testified that about a week
after Kroger closed the store, he called the store for
work and was told they were not hiring. Consequently,
he never filed an application. Peggy Jo Vernon called
the store seeking employment and talked to Chu in early
7 Puncer accepted the position of manager initially, but later turned it
down
s Janitors were excluded from the Kroger-Umon collective-bargaming
agreement
October. She testified she identified herself as a former
Market Basket employee and that Chu told her, "I am
going non-union," to which she did not object; that he
said he would pay between $6 and $7 an hour for the
bookkeeping position, which she said was acceptable;
that she asked why he was going nonunion, to which he
replied, "Because I am Chinese.... Chinese ways are
different from American . . . I have a different way of
doing things . . . I want to run the store different."
After indicating the terms were acceptable to her, Chu
told her to file an application and he would consider'her.
A day or two later, when she went in and asked for an
application, she was informed they did not have any.
When Eng, picked up an application on October 18,
Koran told him that all positions were filled with family
and friends and the store would be ' nonunion. When he
returned the application the following day, Kwan again
told him the store was going to be nonunion and would
not pay union wages. Jaramillo testified that when she
filed an application on October 19, Chu asked her if she
knew he was nonunion. Vernon Williams, Jeffrey Ste-
phens, and Tod Amidon went to the store on October 21
to file applications for employment and were told none
were available.
As has been noted, no former Market Basket employ-
ees have been hired by Respondents. On October 21, the
day the store- reopened under the Respondents' owner-
ship as Market King, the former Market Basket employ-
ees commenced picketing the premises and passing out
leaflets protesting Respondents' failure to hire any - of
them and asking that the public shop at a list of union
markets. On November 11, an article about the labor dis-
pute at Market King appeared in a Chinese community
newspaper. Reporter Walter Chang testified that prior to
writing the article, he spoke to a picketer and inter-
viewed Chu several times . According to Chang, whom I
credit, Chu told him that "the reason he didn't'want to
hire the union persons was because that would increase
the cost of his store, because the union wages were too
high for independent grocery store . . . if he hired union
persons, the Union will ask the favor for the employee;
so that means that all the benefit will be to the employee.
So, there will be no benefit and probably they would go
to bankruptcy. . . . [that-the reason he refused to hire
the former Market Basket employees was] because they
are union employees. . . . He said the ex-employee can
apply-can make application, but under the non-union
condition. That means, if he is a non-union worker, he
can come back to work." On November 18, Dr. James
Regalado, an assistant professor of political, science at
California State University, Los Angeles, wrote Chu of
the concern of several of his students, former Market
Basket- employees, over the Respondents' failure to hire
them, and requested to meet with Chu "in the spirit of
open communication and community dialogue." Three or
four days' later in a telephone conversation, Chu declined
Dr. Regalado's offer to mediate the problem. According
to Dr. Regalado, whom I credit, Chu stated that "he had
no "problems with the students applying for jobs . . . he
simply couldn't afford the union, that there were several
problems that he saw with inviting the union in or invit-
MARKET KING , INC. 883
ing any of the union employees in, and namely that he
would be unable to pay various insurance forms or I
guess the unemployment compensation , medical , as well
as the union scale in terms ,of wages . . . that he simply
could not afford the union at this time ." Chu again de-
clined Dr. Regalado's offer to assist in resolving the dis-
pute during a phone conversation in December, during
which Chu stated, "that everybody may lose, but the
union won't win," and that he might be in a position "to
join the union a year down the road ," but at that time it
was a question of survival.
In addition to assuming the collective-bargaining
agreements between Kroger and the Unions , the pur-
chase and sale agreement discloses that Chu purchased
Kroger's inventory, equipment , liquor license, and other
assets. Although Respondents have changed the meat
counter from self-service to customer assisted ,9 and have
expanded the Latino and Oriental food sections in an
effort to cater to those ethnic groups, it is clear from the
record that Market King operates as a full -line supermar-
ket as did Market Basket under Kroger. The record fur-
ther shows that the Union has filed a lawsuit against the
Respondents seeking enforcement of the collective-bar-
gaining agreement, and the Respondents have filed a
lawsuit against Kroger seeking to rescind the purchase
and sale contract . On July 1, 1983 , Respondents filed a
petition under Chapter 11 with the United States Bank-
ruptcy Court for the Central District of California. The
petition was signed by Chu, president. 10
B. Discussion
1. Alter ego issue
The complaint alleges and the Respondents deny that
Chu and Respondent Market King are alter egos and a
single employer within the meaning of the Act. Alter
ego, of course, refers to a situation in which the identify
of two entities is substantially the same or where there
has been a technical change made without any substan-
tial change in ownership or management . Such is the
case here. As the record shows, Chu, as an individual,
first contacted Kroger officials and negotiated for the
purchase of Store 113 ; Chu signed the purchase and sale
agreement on an individual basis, as he did the escrow
agreement; Chu was responsible for the incorporation of
Respondent Market Basket ; he is president, a director,
and the majority stockholder , with additional stock
owned by his wife and mother -in-law ; he was initially
the corporate agent on whom service of process could
be made; his real estate office was listed in the incorpora-
9 Kroger's meat department employees were represented by the Meat
Cutters Union
10 On April 27, 1984 , the General Counsel filed with motion to reopen
record for the purpose of receiving in evidence Respondent Market
King's application to the bankruptcy court to reject the collective-bar-
gaining agreements that it had agreed with Kroger to abide by The Re-
spondent opposed the motion on the ground that bankruptcy pleadings
are not conclusive and binding judicial admissions in this proceeding and
are therefore irrelevant and inadmissible. As receipt of the pleading in the
bankruptcy court would not change the outcome of this proceeding, the
General Counsel's motion is denied . The application of Debtor-in-Posses-
sion Market King , Inc to reject , collective-bargaining agreements has
been marked as Rejected Exhibit I and placed in the rejected exhibit file.
tion papers as the principal place of business for the cor-
poration; the telephone number contained in the newspa-
per ad for , employees was that of Chu's real estate office;
telephone applicants were directed to pick up application
forms at Chu's office; prior to incorporating , Chu inter-
viewed Kroger employees for the position of manager
and produce department head , the latter position being
within the bargaining unit , and stated that the store
would be nonunion; following incorporation, he recon-
firmed that determination ; he is paid a salary by the cor-
poration and spends a substantial part of his day working
at the store; by his conduct and statements , both before
and after incorporating , Chu was perceived to be the
owner; and he was the individual who signed the bank-
ruptcy petition . It is clear that Chu, from the commence-
ment of negotiations for the purchase of the store until
filing the Chapter 11 reorganization petition in the bank-
ruptcy court , was the person in charge and control of all
dealings relating to the purchase , opening , and operation
of the store . Accordingly, it is found that Respondent
Chu and Respondent Market King have been alter egos
and a single employer within the meaning of the Act. In
these circumstances, it is appropriate to hold Chu indi-
vidually responsible , and jointly with the corporation, to
comply with the provisions of the recommended Order
remedying the unfair labor practices found herein. Carpet
City Mechanical Co., 244 NLRB 1031 ' and cases cited at
1034 (1979).
2. Successorship issue
The, complaint alleges and the record shows that the
Union, jointly with its sister Locals 137, 324, 899, 905,
1167, 1222 , 1428 , and 1442 , has been the recognized rep-
resentative of all food clerks, bakery , health and beauty
aids, and household hardware clerks, general merchan-
dise clerks, clerk's helpers, and snack bar and take-out
food department employees employed by members of the
Food Employers Council , Inc. (to which Kroger be-
longed); excluding all office clerical employees, meat de-
partment employees , janitorial employees , guards and su-
pervisors as defined in the Act , and that it is an appropri-
ate unit for collective bargaining purposes ; that the
above-enumerated unions have been recognized by the
Council and its members, including Kroger , and that
such recognition has been embodied in successive collec-
tive-bargaining agreements , the most recent being effec-
tive from July 27, 1981, through July 29 , 1984; that the
collective-bargaining agreement provides that it will be
binding on the successors and assigns of the parties and
that a new owner or transferee shall be notified of the
obligation and required to become a party to it; and that
the new owner or transferee shall make every effort to
fill employment needs from those employed by the seller
or transferor . The record further shows that on August
24, Chu agreed to buy Store 1'13 from Kroger for
$187,500 and that the price was reduced from $200,000
on Chu's specific agreement to accept the "Assumption
of Liabilities" clause, including the agreement "to
become a successor to all [collective -bargaining] con-
tracts and to abide by all relevant terms and conditions
thereof, including the employment of [Kroger's] bargain-
884 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
ing unit employees in accordance with said contract";
that on September 1, Chu filed articles of incorporation
on behalf of Respondent Market Basket; that on Septem-
ber 3, at the instigation of Chu's representative, a meet-
ing was held with Union Representative Carr to discuss
the terms of the existing collective-bargaining agreement;
that a further meeting was scheduled for September 8,
but was canceled on the representation made by Chu's
representative, albeit falsely, that Chu had decided not to
buy the store; that Kroger ceased operating and closed
Store 113 on September 11, at which time all employees
were laid off or terminated; that because of litigation be-
tween the landlord and Respondents over the lease, Re-
spondents did not take possession of the premises until
October 11 and did not open for business until October
21; that a unit of employees encompassing and excluding
the respective classifications found in the multiemployer
unit but limited to those employed by Respondents at
their 2201 South Atlantic Boulevard, Monterey Park,
California facility is appropriate for collective-bargaining
purposes; that Respondent has not employed any em-
ployees formerly employed by Kroger; nor has it applied
the terms of the 1981-1984 collective-bargaining agree-
ment to its employees. It was further established that the
Respondents have unilaterally changed the terms and
conditions of employment of employees in the contrac-
tual unit.
The concept of "successorship" as considered by the
Supreme Court in NLRB v. Burns Security Services, 406
U.S. 272 (1972), contemplates the substitution of one em-
ployer for another, where the predecessor employer
either terminates its existence or otherwise ceases to
have any relationship to the ongoing operations of the
successor employer. Once it has been found that the
"break" between predecessor and successor has oc-
curred, the Board and courts look to other factors to de-
termine to what extent the obligations of the predecessor
devolve on its successor. The keystone in determining
successorship is the degree of continuity between the old
and the new employer's businesses. The Board has stated
that when a new employer "uses substantially the same
facilities and work force to produce the same basic prod-
ucts for essentially the same customers in the same geo-
graphic area," it will be regarded as a successor. Valley
Nitrogen Producers, 207 NLRB 208 (1973). Respondents
have continued to operate a full line supermarket in the
same location, selling substantially the same products to
substantially the same customers; Respondents operate
under the name Market King that is strikingly similar to
Market Basket utilized by Kroger; Respondents pur-
chased all Kroger's equipment; inventory, and other
assets that they have continued to use in the business; the
same classifications of employees are employed to do the
same general duties such as cashiering, stocking, and
maintaining shelves and bagging groceries. With the ex-
ception of the addition of a broader line of ethnic foods
and the conversion of the meat counter from self-service
to employee service, Respondents failed to show any
change occurred in the overall manpower skills neces-
sary to operate the store. In this regard, it is clear that
the meat department employee is not within the unit in-
volved in this proceeding and, in any event, neither that
fact nor the addition of more ethnic foods constitutes a
substantial and material change in the employing indus-
try. Such changes are of a type normally associated with
a change of ownership and fail to reflect any break in
the employing enterprise. Thus, it is clear that all the
factors for finding successorship are present but for the
failure to employ the former Kroger work force. "[I]t is
well settled that successorship will be found in such cir-
cumstances if the new owner fails to hire the predeces-
sor's employees because of 'their affiliation with the
Union." Love's Barbeque Restaurant No. 62, 245 NLRB
78, 79 (1979). As in Love's, the central question is wheth-
er Respondents refused to hire the former employees of
Kroger for antiunion reasons. The credible evidence es-
tablishes beyond any doubt that Respondents' failure and
refusal to hire Kroger's former employees was because
of their union affiliation. The purchase and sale agree-
ment plainly provided that the purchaser assume
Kroger's obligations under the 1981-1984 collective-bar-
gaining agreement. Chu had been given a copy of the
collective-bargaining agreement that plainly states that in
case of a sale or transfer, the new owner shall make
every effort to fill his employment needs from those em-
ployed by the seller. Chu was in the store on a number
of occasions prior to Kroger's closing and had ample op-
portunity to interview Kroger's unionized employees and
inform them of his hiring needs and to obtain telephone
numbers and addresses. There is no evidence of any
effort made by Chu to consult with Kroger's store man-
ager or the employees concerning the availability for em-
ployment of Kroger's employees. Store interviews initiat-
ed by Chu were held only with respect to the position of
store manager and possibly produce department head.
Chu's intent was made clear from the beginning. He told
both Kroger employees Duncan and Natsume in August
that the store would be nonunion. In late August, in re-
sponse to Lessley's question about whether Chu was
planning on keeping the present employees, Chu stated,
"yes, most likely if the union goes the way we want
them to." In early October, he told Vernon that the
store was "going nonunion." On October 18, Kwan told
Eng that all positions had been filled with friends and
family and would be nonunion. The next day, when Eng
submitted an application for employment, Kwan again
stated that the store would be nonunion and not pay
union wages. When Jaramillo applied on October 19,
Chu asked if she knew he would be operating nonunion,
to which she replied affirmatively. This evidence, in each
instance violative of Section 8(a)(1) of the Act, shows
that Chu had no intention of having the Union in the
store. Because the newspaper ad for experienced employ-
ees, which Chu ran from September 15 to 21, did not list
either the store name or its location, it is not surprising
that no former Kroger employees responded. Thus, as in
Love's, it appears the initial interviews, were conducted
"under conditions which virtually ensured that the
former [Kroger] employees would not know of the inter-
views." I attach further significance to the fact that al-
though Respondents advertised for "experienced" work-
ers, not one experienced Kroger applicant has been hired
to replace any of Respondents' initial corps of employees
MARKET KING, INC. 885
who have left for one reason or another. Respondents'
argument that it became necessary to'hire bilingual em-
ployees because it was catering to the area's ethnic popu-
lation is nothing more than an attempt to mask the real
reason for its failure to hire former Kroger employees,
namely, their union affiliation. Examination of the appli-
cation for employment that the Respondents used directs
an applicant not to answer questions regarding the ability
to speak, read, or write foreign languages unless specifi-
cally requested "thereby indicating that the information
is required for a bona fide occupational qualification."
Not one of the applications for employment completed
by former Kroger employees requested that information
nor does the evidence disclose that they were asked if
they were bilingual. On all the foregoing, .it is apparent
that but for the Respondents' unlawful conduct, the
Union's status as the exclusive collective-bargaining rep-
resentative would have survived the Respondents' take-
over of the store. As Respondents are the legal successor
of Kroger with respect to Kroger's bargaining obligation
to the Union, I conclude and find that Respondents vio-
lated Section 8(a)(5) and (1) of the Act by failing and re-
fusing to apply the terms of the 1981-1984 collective-bar-
gaining agreement.' I
In addition, it is found that Respondent violated Sec-
tion 8(a)(5) and (1) by unilaterally, and without the con-
sent of the Union, changing the terms and conditions of
employment of the employees in the unit found appropri-
ate.
The foregoing circumstances compel the conclusion
that the Respondents avoided hiring former Kroger em-
ployees because of their affiliation with the Union. Ac-
cordingly, it is found that the Respondents violated Sec-
tion 8(a)(3) of the Act by failing and refusing to hire the
former Kroger employees.
THE REMEDY
Having found that Respondents have engaged in unfair
labor practices by refusing to honor and abide by the
collective-bargaining agreement executed by its prede-
cessor and the Union; by making unilateral changes in
terms and conditions of employment of the employees in
the appropriate unit; and by discriminatorily failing and
refusing to offer employment to the former employees of
The Kroger Co., I shall recommend that the Respond-
ents cease and desist therefrom and take certain affirma-
tive action designed to effectuate the policies of the Act.
I shall further recommend that the Respondents honor
and abide by the terms and conditions of the July 27,
1981-July 29, 1984 collective-bargaining agreement be-
tween The Kroger Co. and the Union, retroactive to Oc-
tober 11, 1982, the date Respondents took possession of
the store, and offer immediate employment and full rein-
statement of the former Kroger Co. employees to their
former jobs or, if those jobs no longer exist, to substan-
11 "[T]he general rule of corporate liability is that , when a corporation
sells all of its assets to another, the latter is not responsible for the seller's
debts or liabilities , except where ( 1) the purchaser expressly or imphedly
agrees to assume the obligations ; (2) the purchaser is merely a continu-
ation of the selling corporation, or (3) the transaction is entered into to
escape liability ." Golden State Bottling Co. v NLRB, 414 U S 168 at 182
fn 5 (1973)
tially equivalent positions, without prejudice to their se-
niority or other rights and privileges previously enjoyed,
discharging, if necessary, employees hired from sources
other than The Kroger Co. Store 113, to make room for
them, and make them whole for any loss of earnings and
other benefits, they may have suffered due to the discrim-
ination practiced against them, including payments on
behalf of the employees into the welfare, trust and other
funds as may be required under the terms of the above
collective-bargaining agreement, as prescribed in E. W.
Woolworth Co., 90 NLRB 289 (1950), with interest there-
on to be computed in the manner set forth in Florida
Steel Corp., 231 NLRB 651 (1977). See generally Isis
Plumbing Co., 138 NLRB 716 (1962)., In the event there
are insufficient positions available for employment of all
discriminatees, those hot employed immediately will be
placed on a preferential hiring list and offered employ-
ment as openings occur for which they are qualified.
CONCLUSIONS OF LAW
1. Respondent Market King and Respondent Chu are
alter egos and a single employer engaged in commerce
and in a business affecting commerce within the meaning
of Section 2(6) and (7) of the Act.
2. United Food and Commercial Workers Union,
Local 770, chartered by the United Food and Commer-
cial Workers International Union, AFL-CIO-CLC is a
labor organization within the meaning of Section 2(5) of
the Act.
3. All food clerks, bakery, health and beauty aids, and
'household hardware clerks, general merchandise clerks,
clerk's helpers, and snack bar and take-out food depart-
ment employees employed by Respondents at their 2201
South Atlantic Boulevard, Monterey Park, California fa-
cility; excluding all office clerical employees, meat de-
partment employees, janitorial employees, maintenance
employees, professional employees, guards and supervi-
sors as defined in the Act, constitute. a unit appropriate
for the' purposes.' of collective bargaining within the
meaning of Section 9(b) of the Act.
4. At all times material, the Union, jointly with Locals
137, 324, 899, 905, 1167, 1222, 1428, and 1442, Chartered
by the United Food and Commercial Workers Interna-
tional Union, has been the exclusive representative of all
the employees in the above unit for the purposes of col-
lective bargaining within the meaning of Section 9(a) of
the Act.
5. By telling employees that they would operate a non-
union facility and would not pay union scale wages, Re-
spondents violated Section 8(a)(1) of the Act.
6. By failing and refusing to hire the previous employ-
ees of The Kroger Co. Store 113 because of their union
affiliation, Respondents violated Section 8(a)(3) and (1)
of the Act.
7. Respondents are a successor employer to The
Kroger Co., and by disavowing their bargaining obliga-
tion to the Union and by unilaterally changing the terms
and conditions of employment of the employees in the
unit found appropriate, Respondents violated Section
8(a)(5) and (1) of the Act.
886 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
On these findings of fact and conclusions of law and
on the entire record , I issue the following recommend-
ed12
ORDER
Respondent Market King, Incorporated and its alter
ego, Respondent William Chu, Monterey Park, Califor-
nia, their officers, agents, successors, and assigns, shall
1. Cease and desist from
(a) Refusing to recognize and bargain with United
Food and Commerical Workers Union, Local 770, Char-
tered by, the United Food and Commercial Workers
International Union, AFL-CIO-CLC as the exclusive
representative of their employees in the appropriate unit
described above, with respect to wages, hours and other
terms and conditions of employment.
(b) Refusing to honor and apply the terms and condi-
tions of the July 27, 1981-July 29, 1984 collective-bar-
gaining agreement between the Union and the Food Em-
ployers Council, Inc.
(c) Unilaterally changing terms and conditions of em-
ployment of their employees.
(d) Telling employees that they are going to operate a
nonunion facility and not pay union scale wages.
(e) Refusing to hire or otherwise discriminating against
employees to avoid recognizing or bargaining with the
Union.
(f) In any other manner interfering with, restraining or
coercing employees in the exercise of the rights guaran-
teed them by Section 7 of the Act.
2. Take the following affirmative action necessary to
effectuate the policies of the Act.
(a) Immediately recognize and, on request , bargain col-
lectively in good faith with the Union as the exclusive
bargaining representative of all its employees in the ap-
propriate unit.
(b) Honor and apply all the terms and conditions of
the July 27, 1981-July 29, 1984 collective- bargaining
agreement between the Union and the Food Employers
Council, Inc.'
(c) Offer employment and immediate and full reinstate-
ment to the former employees employed by The Kroger
Co. in Store 113 to their former jobs, or, if those jobs no
longer exist, to substantially equivalent positions, without
prejudice to their seniority or other rights and privileges
previously enjoyed, discharging, if necessary, employees
hired from sources other than The Kroger Co. Store
113, to make room for them and make them whole for
any loss of earnings and other benefits they may have
suffered as a result of the discrimination against them, in
the manner set forth in the remedy section of this deci-
sion.
(d) Post at their Monterey Park, California place of
business copies of the attached notice marked "Appen-
dix."13 Copies of the notice, on forms provided by the
Regional Director for Region 21, after being signed by
the Respondents' authorized representative, shall be
posted by the Respondents immediately upon receipt and
maintained for 60 consecutive days in conspicuous places
including all places where notices to employees are cus-
tomarily posted. Reasonable steps shall be taken by the
Respondents to ensure that the notices are not altered,
defaced, or covered by any other material.
(e) Notify the Regional Director in writing within 20
days from the date of this Order what steps the Re-
spondents have taken to comply.
12 If no exceptions are filed as provided by Sec. 102.46 of the Board's
Rules and Regulations, the findings, conclusions, and recommended
Order shall, as provided in Sec. 102.48 of the Rules, be adopted by the
Board and all objections to them shall be deemed waived for all, pur-
poses.
13 If this Order is enforced by a judgment of a United States court of
appeals, the words in the notice reading "Posted by Order of the Nation-
al Labor Relations Board" shall read "Posted Pursuant to a Judgment of
the United States Court of Appeals Enforcing an Order of the National
Labor Relations Board "