Martin J. Barry Co.

National Labor Relations Board - Board Decisions

Jan 31, 1986

278 N.L.R.B. 393 (N.L.R.B. 1986)

MARTIN J BARRY CO. 393
Martin J. Barry Company and Carpenters District
Council and its affiliated Local 974, United
Brotherhood of Carpenters & Joiners of Amer-
ica, AFL-CIO
Riehl Estate Management Co. and Carpenters Dis-
trict Council and its affiliated Local 974, United
Brotherhood of Carpenters & Joiners of Amer-
ica, AFL-CIO. Cases 5-CA-9363 and 5-CA-
11606
31 January 1986
SUPPLEMENTAL DECISION AND
ORDER
BY MEMBERS DENNIS, BABSON, AND
STEPHENS
On 14 January 1981 Administrative Law Judge
Benjamin Schlesinger issued the attached decision.
Respondent Riehl Estate Management Co. (Riehl
Estate) filed exceptions and a supporting brief.
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 brief and has
decided to affirm the judge's rulings, findings, and
conclusions as modified and to adopt the recom-
mended Order as modified.
As set forth more fully in the judge's decision,
Case 5-CA-9363 is the backpay proceeding result-
ing from an earlier Board Decision and Order.' In
the earlier decision, the Board found that Respond-
ent Martin J. Barry Company (Barry), a real estate
management company, had violated Section 8(a)(5)
and (1) of the Act by refusing on 30 March 1978 to
execute and implement a contract setting forth the
terms of a final and binding agreement reached be-
tween it and Carpenters District Council and its af-
filiated Local 974, United Brotherhood of Carpen-
ters & Joiners of America, AFL-CIO (the Union).
The,Board's Order directed Barry and "its officers,
agents, successors, and assigns," to sign and give
effect to the contract between Barry and the Union
and to make the unit employees whole for any
losses suffered by reason of the refusal to give
effect to the contract.
In October 1978, while the unfair labor practice
proceeding in Case 5-CA-9363 was pending before
the Board, Barry announced that it intended to
cease operations on 30 November 1978, and it noti-
fied all its employees that they would be terminat-
ed on that date. In an attempt to salvage Barry's
property management activities, a group of inves-
'Martin J. Barry Co, 241 NLRB 1011 (1979)
tors formed Riehl Estate.2 Riehl Estate hired ap-
proximately 95 percent of Barry's unit employees
and most of Barry's supervisory employees. The
unit employees were hired to work at jobs and
wages similar to those that they had with Barry.
When Barry ceased operations on 30 November
1978, it still had not executed or implemented the
contract it had agreed to on 30 March 1978. On 1
December 1978, without any hiatus, Riehl Estate
commenced operations utilizing a majority of
Barry's former employees to do work similar to
that done by Barry.
On 20 April 1979 the Board issued its decision
finding that Barry had unlawfully refused to exe-
cute its contract with the Union. Thereafter, the
Regional Director issued a notice requiring Riehl
Estate, as a successor to Barry, to show cause why
it should not be required to comply with the af-
firmative remedial provisions of the Board's Order
against Barry. Riehl Estate denied responsibility for
remedying Barry's unfair labor practices, and the
matter was set for a hearing before an administra-
tive law judge.
At the hearing Riehl Estate conceded, and the
judge found, that under NLRB v. Burns Security
Services, 406 U.S. 272 (1972), Riehl Estate was a
successor to Barry and therefore had an obligation
to bargain in good faith with the Union, the collec-
tive-bargaining representative of its predecessor's
employees.3 The judge ' further found that when
Riehl Estate began its operations, it was aware of
Barry's unremedied unfair labor practices. In such
circumstances, the judge concluded that under
Golden State Bottling Co. v. NLRB, 414 U.S. 168
(1973), Riehl Estate was a successor with knowl-
edge of its predecessor's unfair labor practices and
therefore was jointly and severally liable with
Barry to make the unit employees whole for losses
resulting from Barry's refusal to execute the
agreed-upon contract on 30 March 1978 until
Barry ceased operations on 30 November 1978.
The judge further found that, although there was
no precedent for requiring a successor employer to
execute and implement its predecessor's contract
because of the predecessor's unlawful failure to
execute that contract, the mere imposition of back-
2 Although a number of the Respondent's investors had been associat-
ed with Barry, the parties stipulated that Riehl Estate was not an alter
ego of Barry
2 As set forth more fully in the judge's decision, the backpay proceed-
mg, Case 5-CA-9363, was consolidated with the unfair labor practice
proceeding in Case 5-CA-11606 which alleged that Respondent Riehl
Estate had unlawfully refused to bargain with the Union when Respond-
ent Barry' ceased doing business The judge found that, in the absence of
a bargaining demand by the Union, Riehl Estate had not refused to bar-
gain with the Union, and therefore he recommended that the complaint
in Case 5-CA-11606 be dismissed in its entirety No exceptions were filed
to the judge's recommended dismissal of Case 5-CA-11606
278 NLRB No. 56
394 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
pay liability for the period ending with Barry's ces-
sation of business was insufficient to remedy fully
the existing unfair labor practices and restore the
status quo ante. Accordingly, the judge further di-
rected Riehl Estate to execute and implement the
contract agreed to by Barry and to make its em-
ployees whole for its own subsequent failure to
execute and implement that contract from the date
it began operations on 1 December 1978.
In its exceptions, Riehl Estate concedes that it
met the prerequisites for successor liability estab-
lished in Golden State Bottling.4 However, Riehl
Estate vigorously excepts to that portion of the
judge's recommended Order directing it to execute
and implement the contract agreed to by Barry and
the Union and to make its employees whole for
Riehl Estate's failure on 1 December 1978 to exe-
cute and implement the contract. Riehl Estate con-
tends that such portion of the judge's remedy is
overly broad and is contrary to the policies and
purposes of the Act.
We initially note, as did the judge, that under
Burns it is clear that a successor employer does not
have a statutory bargaining obligation to assume its
predecessor's contract with the union. Thus, as
noted by the judge, even if the predecessor Barry
had executed and implemented its contract with
the Union, the successor Riehl Estate would not
necessarily have had an obligation under Burns to
comply with that contract. The judge reasoned,
however, that because Section 10(c) of the Act au-
thorized the Board to take appropriate remedial
action to remedy an unfair labor practice, the ap-
propriate remedial action here included requiring
Riehl Estate, a successor, to adopt and implement
its predecessor's contract.
We disagree. The judge's analysis overlooks the
Supreme Court's, holding in H. K. Porter Co. v.
NLRB, 397 U.S. 99 (1970), that the Board lacks the
remedial authority to impose contractual terms in-
voluntarily on either party to a collective-bargain-
ing agreement. The Court pointed out that under
Section 8(d) of the Act the obligation to engage in
good-faith 'bargaining "does not compel either
party to agree to a proposal or require the making
of a concession." Although acknowledging that
4 In its execeptions , Riehl Estate also makes the broader argument that
because it did not have a contractual relationship with Barry and it did
not purchase any assets from Barry, the principles of Golden State Bot-
tling Co do not apply and therefore it is not obligated to remedy Barry's
unfair labor practices . We find no merit to these contentions because, in
agreement with the judge , we find that the substantially reduced manage-
ment fees charged by Riehl Estate to Henry Knott, the former president
of Barry, effectively constituted a payment by Riehl Estate for Barry's
business Accordingly , we find it unnecessary to consider Riehl Estate's
contentions or the judge 's discussion on whether the principles of Golden
State Bottling Co apply to a successor who had not purchased the assets
or established a contractual privity with the predecessor employer.
Section 8(d) explicitly refers only to a determina-
tion of the parties' bargaining obligations, the
Court found that the same principle implicitly ex-
tends to the Board's Section 10(c) remedial author-
ity. The Court stated:
It would be anomalous indeed to hold that
while §8(d) prohibits the Board from relying
on a refusal to agree as the sole evidence of
bad-faith bargaining , the Act permits the
Board to compel agreement in that same dis-
pute. The Board's remedial powers under §10
of the Act are broad, but they are limited to
carry out the policies of the Act itself. One of
these fundamental policies is freedom of con-
tract. While the parties' freedom of contract is
not absolute under the Act, allowing the
Board to compel agreement when the parties
themselves are unable to agree would violate
the fundamental premise on which the Act is
based-private bargaining under governmental
supervision of the procedure alone, without
any official compulsion over the actual terms
of the contract.5
As noted above, the Supreme Court thereafter
held in Burns that although a successor had the
statutory obligation to bargain with the union that
represented the predecessor's employees, the suc-
cessor had no obligation to assume the predeces-
sor's contract with the union. In so finding, the
Court, quoting from H. K. Porter Co., 6 reaffirmed
its holding that the Board did not have the statuto-
ry authority to compel a party to assume contrac-
tual terms that had not been voluntarily agreed on
in negotiations.
In Golden State Bottling, the Court held that a
successor employer that acquired its predecessor's
operations with the knowledge that the predecessor
had discriminatorily discharged an employee was
jointly and severally liable with the predecessor to
remedy that unfair labor practice. In so holding,
the Court pointed out that the Act contemplated
that the Board would exercise its remedial author-
ity by "striking a balance between the conflicting
legitimate interests of the bona fide successor, the
public, and the affected employee."7 The Court
specifically noted, however, that it was "in no way
qualify[ing] the Burns holdings" that a successor
was not bound by the collective-bargaining agree-
ment agreed to by the union and the predecessor
employer, and it specifically stated that "a purchas-
ing company cannot be obligated to carry out
5 H. K Porter Co, supra at 108, fns omitted
6 Burns, supra at 283 and 287
7 Golden State Bottling Co, 414 U S at 181
MARTIN J. BARRY CO.
under Section 10(c) every outstanding and unsatis-
fied order of the Board."8
The question presented in the instant case is
what particular remedial obligations must Riehl
Estate as a successor employer undertake in order
to remedy fully its predecessor 's unlawful refusal
to execute and implement its contract with the
Union . As indicated above, Riehi Estate has con-
ceded that it is jointly and severally liable with
Barry to make Barry's employees whole for the
wages they lost between 30 March and 30 Novem-
ber, the dates Barry refused to sign the contract
and ceased operations . Moreover , the record estab-
lishes that Respondent Riehi Estate has expressed a
willingness to engage in good-faith, bargaining with
the Union . Such good-faith bargaining supplement-
ed by the joint and several backpay liability of
Barry and Riehl Estate to Barry 's former employ-
ees for the time period between Barry 's failure to
execute ,the contract and Barry's cessation of oper-
ations on 30 November 1978 adequately remedies
Barry's unfair labor practices . In our view, good-
faith bargaining by a successor employer in con-
junction with a make-whole obligation for the
period ' ending with the predecessor 's cessation of
operations is sufficient to convince the unit em-
ployees that the employing enterprise intends to
comply fully with the requirements of the Act and
strikes I an appropriate "balance between the con-
flicting legitimate interests of the bona fide succes-
sor, the public , and the affected employee[s]."9
AMENDED CONCLUSIONS OF LAW
Substitute the following for paragraphs 5 and 6
of the judge's Conclusions of Law:
"5. 1 Respondent Martin J. Barry Company,
which did not appear in opposition to this proceed-
ing, remains fully responsible to make whole all
employees in the above-described bargaining unit
for any losses suffered by reason of its refusal to
give effect to the agreement which it made, but re-
fused to execute, with the Union. That includes the
differences between what Barry paid to its employ-
ees between the effective date of the collective-bar-
gaining agreement and 30 November 1978, the date
that it ceased doing business.
"6. Riehi Estate Management Co. is the succes-
sor to Barry and, accordingly, is to be joined as a
party Respondent to the Board Order against
Barry in Case 5-CA-9363. It is fully responsible to
make Barry's employees whole for any losses re-
sulting from Barry's refusal to bargain collectively.
It is therefore jointly and Severally liable for the
same obligations and backpay as is Barry."
e Id ate 183-184 fn 6.
s Golden State Bottling , supra at 181
ORDER
395
The National Labor Relations Board orders that
the Respondents, Martin J. Barry Company and
Riehl Estate Management Co., Baltimore, Mary-
land, their officers, agents , successors , and assigns,
shall jointly and severally make whole Martin J.
Barry Company's employees for any losses suffered
by reason of the refusal of Martin J. Barry Compa-
ny to give effect to its agreement with Carpenters
District Council and its affiliated Local 974, United
Brotherhood of Carpenters & Joiners of America,
AFL-CIO, from the period 30 March 1978 to 30
November 1978. Such amounts as are due shall be
paid with interest in the manner set forth in the
Board's decision reported at 241 NLRB 1011
(1979), in the section entitled "The Remedy."
IT IS FURTHER ORDERED that the issue concern-
ing the determination of the amount of backpay
due to the employees pursuant to the Board Order
in Case 5-CA-9363 is severed , and jurisdiction
thereof shall be retained by the administrative law
judge for hearing, if necessary, upon application of
any party to this proceeding.
IT IS FURTHER ORDERED that the complaint in
Case 5-CA-11606 is dismissed.
Harvey A. Holzman, Esq., for the General Counsel.
N. Peter Lareau, Esq., and Bruce P. Martin, Esq. (Vena-
ble, Baetjer and Howard), of Baltimore, Maryland, for
the Respondent Riehi Estate Management Co.
DECISION
STATEMENT OF THE CASE
BENJAMIN SCHLESINGER , Administrative Law Judge.
This case is a consolidated backpay and unfair labor
practice proceeding. On April 20, 1979, the National
Labor Relations Board rendered its Decision and Order
(241 NLRB 1011), finding that Respondent Martin J.
Barry Company, which had ceased operations on No-
vember 30, 1978 , engaged in unfair labor practices affect-
ing commerce within the meaning of Section 8(a)(5) and
(1) of the Act by refusing to execute a contract setting
forth the terms of a final and binding agreement reached
between it and Carpenters District Council and its Affili-
ated Local 974, United Brotherhood of Carpenters &
Joiners of America, AFL-CIO, although the Union had
requested Barry to do so. The Board 's Order, requiring
Barry to execute and comply with the terms of the
agreement , has not been complied with.
On October 18, 1979, no doubt because Barry was no
longer in business, the Union filed a charge against Riehi
Estate Management Co. and on May 9, 1980 , a complaint
issued alleging that Riehl Estate was a successor to
Barry and was required to bargain with the Union but
had refused to do so. Further, on July 31, 1980, the Re-
gional Director for Region 5 issued a notice requiring
Riehi Estate to show cause why it should not be re-
396 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
quired to comply with the affirmative remedy provisions
of the Board's Order against Barry, and why the issues
relating to that preceeding and the amount of backpay
due to employees should not be resolved at a formal
hearing to be consolidated with the proceedings on the
unfair labor practice complaint against it. On September
24, 1980, the Regional Director entered an order consoli-
dating the unfair labor practice proceeding and the back-
pay hearing and scheduled the same to be heard on Oc-
tober 30, 1980, at which time such a hearing took place
in Baltimore , Maryland. Barry did not appear; Riehl
Estate denied the allegations of the 8(a)(5) complaint and
denied responsibility, for Barry's violations of the Act.
On consideration of the record in this proceeding, in-
cluding the briefs filed by the General Counsel and Riehl
Estate, and my observation of the demeanor of the wit-
nesses, I make the following
I. JURISDICTION
Riehl Estate is a partnership providing apartment and
shopping center maintenance service at various locations
in the State of Maryland. During the 12 months preced-
ing the issuance of the complaint, a representative
period, Riehl Estate received gross revenues in excess of
$50,000 from its operations. During the same period,
Riehl Estate had combined purchases in interstate com-
merce of materials and supplies valued in excess of
$50,000 from points located outside the State of Mary-
land and from wholesale and manufacturing enterprises
which themselves purchased goods and materials valued
in excess of $50,000 in interstate commerce from points
located outside the State of Maryland. I conclude, as
Riehl Estate admits, that at all material times it is and
had been an employer engaged in commerce and in oper-
ations affecting commerce within the meaning of Section
2(2), (6), and (7) of the Act.
I further find and conclude, as Riehl Estate admits,
that the Union is and has been at all times a labor organi-
zation within the meaning of Section 2(5) of the Act.
II. THE ALLEGED UNFAIR LABOR PRACTICE
A. The Board's Prior Decision
In its prior decision, the Board found that on July 1,
1977, a majority of the employees of Barry designated
the Union as their representative for the purpose of col-
lective bargaining with Barry for the following unit
found appropriate for collective-bargaining purposes
within the meaning of Section 9(b) of the Act:
All full-time and regular part-time maintenance em-
ployees employed by [Barry] at its various apart-
ment and shopping center locations in Maryland;
but excluding clerical employees, guards and super-
visors as defined in the Act.
The Union was certified on July 14, 1977.
Commencing about September 9, 1977, the Union and
Barry held a series of negotiating sessions culminating in
Barry 's submission of its final offer at a meeting held on
December 15 , 1977. About February 24, 1978 , the Union
informed Barry that it had accepted that offer. Barry
agreed to draft a formal collective-bargaining agreement
embodying the terms of its offer and transmitted a formal
contract to the Union about March 30, 1978. On April 3,
1978, John H. Riehl III, Barry's general manager and as-
sistant treasurer, wrote Barry's attorney stating that be-
cause of a petition received from numerous employees,
Barry would not sign the contract. The Union received a
copy of the letter on April 4, 1978.
Based on a stipulated record, the Board found that
since about March 30, 1978, Respondent refused to bar-
gain collectively with the Union as the exclusive repre-
sentative of the employees in the appropriate unit by re-
fusing to execute the agreed-on contract, and that, by
such refusal, Barry had engaged in and was still engag-
ing in unfair labor practices within the meaning of Sec-
tion 8(a)(5) and (1) of the Act. As a remedy, the Board
ordered Barry, if the Union so requested, to sign and
give effect to a written contract embodying the terms of
the agreement reached on February 24, 1978, including
but not limited to the provisions relating to wages and
economic benefits, and to make whole its employees for
any losses suffered by reason of Barry's refusal to give
effect to the agreement.
B. Barry Discontinues Business and Riehl Estate
Commences Business
In early October 1978, Henry J. Knott, Barry's presi-
dent, decided that Barry would no longer engage in
property management activities. He sent letters dated
October 3, 1978, to each of Barry's clients that Barry
would cease doing business as of December 1, 1978; and,
by notice dated November 2, 1978, he notified all em-
ployees of Barry that their employment would be termi-
nated as of November 30, 1978.
Riehl attempted to salvage Barry's property manage-
ment activities and formed a partnership of Riehl Estate
with James F. Knott, the son of Henry J. Knott and
Riehl's brother-in-law. Each contributed his personal
funds towards the capitalization of the new partnership
and became a 30-percent general partner. A 21-percent
limited partnership interest was granted to Lakehurst
Limited Partnership, itself a limited partnership consist-
ing of approximately 60 children (including Riehl's wife)
and grandchildren of Henry J. Knott.' Finally, the re-
maining 19 percent was allocated as a limited partnership
interest to four of Barry's former employees. Three of
them had been Barry's three property managers and re-
tained the same positions with Riehl Estate. The fourth,
Barry's corporate secretary and office manager and
bookkeeper, became Riehl Estate's office manager and
bookkeeper.
During November 1978 Riehl solicited the owners of
the properties then managed by Barry and successfully
obtained all of their property management business for
Riehl Estate and, in addition, secured the consent of
Barry's 15 project superintendents to remain as employ-
ees of Riehl Estate. The managers and superintendents
1 Lakehurst had existed for a number of years and was not specially
organized for its forthcoming share in Riehl Estate The record does not
show whether James F Knott was a partner in Lakehurst
MARTIN J. BARRY CO. 397
were then instructed by Riehl to solicit all Barry's field
employees to apply for employment with Riehl Estate.2
Each field employee submitted an application and was
interviewed by a manager or superintendent, who told
the employee, only if asked, that he or she would be
making at least the minimum wage and in no event no
less than the employee was receiving from Barry.3 The
week before December 1, 1978, approximately 95 per-
cent of Barry's 135 unit employees were hired by Riehl
Estate commencing on December 1, 1978, in the same
capacity they worked for Barry and at the, same wages
they were paid.4
In the interim, the complaint in Case 5-CA-9363 had
issued on May 31, 1478; Barry had denied the commis-
sion of any unfair labor practices in its answer, dated
June 15, 1978; and the parties to that proceeding had, on
November 8, 1978, executed a stipulation agreeing to the
record of that proceeding, waiving a hearing before an
administrative law judge and the issuance of an adminis-
trative law judge's decision, and submitting the case di-
rectly to the National Labor Relations Board for findings
of fact, conclusions of law, and an Order based on the
record.
In the first week of November 1978, Oneal Fowler,
business representative of Local 974, learned from
Robert Hillman, Barry's then-attorney, that Barry was
considering going out of business and that Riehl Estate
was intending to establish a new company. On December
6, 1978, Fowler met with Hillman and Riehl, who ex-
plained that Riehl Estate was going to carry on the same
operations as that previously conducted by Barry, but
with two general partners and five limited partners.
Fowler offered to accept the contract previously negoti-
ated with Barry, as yet unsigned, but he wanted addi-
tional clauses for union security, checkoff, and health,
welfare, and pension contributions. Riehl stated that he
wished to confer with his partners, and the meeting ad-
journed without agreement on a new date for further dis-
cussions. When Fowler did not hear from anybody, he
made calls to Hillman in January and February 1979, and
he wrote Hillman in late February 1979 in an attempt to
set up a meeting. In late March 1979, Hillman informed
Fowler that he was no longer the attorney representing
Riehl Estate.5
Fowler testified that following this advice, he called
Riehl's office at least 10 to 12 times during the entire
month of April and the first week of May and that his
telephone calls were never answered. His receipt of the
Board's Decision and Order against Barry in April and
thereafter a letter from the Region in June 1979 prompt-
2 There is no evidence that Riehl Estate attempted to obtain a work
force by any other means
2 According to one witness, only "several" employees and, according
to another, "quite a few" employees, asked if they would be receiving
more money. It is apparent that not all employees raised any question
about their terms and conditions of employment. Holidays and other ben-
efits were not discussed
4 About three employees had received from Barry a free apartment as
part of their salary When they were offered positions by Riehl Estate,
they were told that they would no longer receive their free apartments
but they would be compensated in wages for the value of their apart-
ments
5 Hillman's retirement as Riehl Estate 's attorney is a curious event.
Riehl testified that Hillman was fired by Barry's general counsel.
ed him to call his attorney, Cosimo C. Abato, to contact
N. Peter Lareau, Riehl Estate's new attorney, to see
whether Riehl Estate would honor the Barry contract or
would give a union-security clause; if so, the Union
would be willing to settle the outstanding obligation of
Barry. Abato contracted Lareau in June or July 1979
and offered a settlement on the basis that Riehl Estate
sign the collective-bargaining agreement which had been
negotiated with Barry and pay the entire amount re-
quested by the NLRB or, in the alternative, that the
Union would consider an amount less than that required
by the Board decision in return for the addition to the
previously negotiated agreement of a union-security and
dues-checkoff provision. Lareau checked with Riehl
Estate and advised Abato that his client was unwilling to
settle the matter on either basis that Abato had suggest-
ed. There has been no further contact between the par-
ties or their representatives since that conversation, con-
ceded to have occurred no later than July 1979.
C. Riehl Estate's Refusal to Bargain
Riehl Estate conceded that for the purposes of NLRB
v. Burns Security Services, 406 U.S. 272 (1972), and
Howard Johnson Co. v. Detroit Local Joint Executive
Board, 417 U.S. 249 (1974), it was a successor to Barry.
Burns was an unfair labor practice proceeding which in-
volved a complaint against a successor for failing to rec-
ognize its predecessor's union and to adopt its agreement
with that union. Burns held that, although a successor
was bound to recognize its predecessor's union and to
bargain with it, the Board was without authority to re-
quire the successor to honor the substantive provisions of
the agreement executed by the precedessor, even though
the successor had hired a majority of the predecessor's
employees. The policies stressed by the Burns Court
were: (1) freedom of contract under Federal labor policy
(as Burns had not expressly or impliedly agreed to
assume the obligations of its predecessor' s agreement);
(2) inhibition of the free flow of capital if new employers
were to be bound by preexisting agreements; and (3)
freedom of the successor to make substantial changes in
the operation of the enterprise. Howard Johnson, a Sec-
tion 301 action, held that the new employer cannot be
compelled to arbitrate obligations to the employees of
the prior employer when there is no substantial continui-
ty of identity in the work force hired and no express or
implied assumption of the agreement to arbitrate.
Because Riehl Estate has conceded that it is a succes-
sor within the meaning of Burns, it is clear that it is obli-
gated to bargain with the Union. Riehl Estate, however,
defends against the 8(a)(5), complaint" against it on the
ground that the complaint is barred by Section 10(b) of
the Act, which required proof that it refused to bargain
within the 6 months preceding the filing of the unfair
labor practice charge.
The instant charge was filed on October 18, 1979. For
the purposes of Section 10(b), the cutoff date is April 18,
6 The basis of the unfair labor practice complaint is solely that Riehl
Estate failed to bargain with the Union. It is not based on Riehl Estate's
failure to assume Barry's agreement, a claim which would be dismissed
on the authority of Burns
398 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
1979. The only acts alleged to have occurred within the
period are unanswered telephone calls from Fowler to
Riehl and the telephone conversations between Abato
and Lareau. I conclude that neither are sufficient to sup-
port the complaint.
First, I do not credit Fowler's testimony regarding the
numerous telephone calls which he allegedly made to
Riehl. I found Fowler's recollections to be, at best, hazy
and imprecise; and, although I found Riehl to be some-
what elusive in other respects, I credit his denial that he
received telephone messages during the latter part of
April, a conclusion supported by a book maintained by
his office indicating all telephone calls made and re-
ceived during that period. The book indicates no calls
from Fowler since March 21, 1979.7
Second, what prompted Abato's call to Lareau in June
or July 1979 was not the refusal of Riehl Estate to bar-
gain with the Union over terms and conditions of em-
ployment of the successor's employees but was the
Union's concern that there had been no compliance with
the Board decision. As a result of that, Fowler requested
Abato to contact Lareau to see whether the entire prob-
lem could be settled. Abato's two conversations with
Lareau, as well as two conversations with the Region's
compliance officer, concerned Abato's attempt to,settle
the unfair labor practice proceeding and did not consti-
tute a demand for bargaining with the Burns successor.
In any event, Riehl Estate did not refuse to consider
Abato's offer. Rather than a refusal to bargain under the
Act, there is present only a proposal by the Union for a
contract and a rejection of that proposal by Riehl Estate.
The Act "does not compel any agreement whatever,"
NLRB v. Jones & Laughlin Steel Corp., 301 U.S. 1, 45
(1937). Accordingly, I find that there was no demand for
bargaining during the 6-month period preceding the
filing of the Union's unfair labor practice charge and that
Riehl Estate did not refuse to bargain with the Union
during that period. I will dismiss Case 5-CA-11606.
III. THE BACKPAY PROCEEDING
Since the Board's decision in Perma Vinyl Corp., 164
NLRB 968 (1967), enforced sub nom. United States Pipe
& Foundry v. NLRB, 398 F.2d 544 (5th Cir. 1968), and
the Supreme Court's decision in Golden State Bottling Co.
v. NLRB, 414 U.S. 168 (1973), the Board has held that a
bona fide successor, who has knowledge of its predeces-
sor's unfair labor practices, is responsible to correct those
unfair labor practices under the authority of Section
10(c) of the Act authorizing the Board "to take such af-
firmative action . . . as will effectuate the policies of this
Act." Golden State involved a successor's responsibility
only to reinstate with backpay employees who were dis-
criminatorily discharged by the predecessor employer.
There is in the message book an entry of Fowler's name at the top
corner of the page for April 25. Although his name was not listed in the
body of the page where messages are usually recorded, no explanation
for his name being on the page was given I am nonetheless persuaded,
because of considerations of demeanor, that Fowler did not call that day
in any event, it is, at best, questionable that an unanswered telephone
call, with the caller leaving only his name and no other message, consti-
tutes a demand for bargaining , the failure to answer constituting, in turn,
a refusal to bargain.
The parties herein have been unable to find any case on
point in which the Board or a Court directly considered
the question whether a predecessor's failure to bargain
under Section 8(a)(5) by refusing to execute an agreed-on
collective-bargaining agreement should be remedied by
the successor. My independent research has been similar-
ly unavailing.
The Supreme Court's analysis in Golden State, howev-
er, is helpful. In discussing Burns, the Court wrote, 414
U.S. at 183-184, that it had held
that the new company had been properly ordered
to bargain with the bargaining representative which
had been certified to the old company, since the
bargaining unit remained essentially unchanged. It
was also held, however, that the new employer was
not bound by the collective-bargaining agreement
agreed to by the union and the predecessor employ-
er, inasmuch as § 8(d) of the Act, as well as the leg-
islative history of the labor laws, reflected a policy
against compelling a party to agree to substantive
contractual obligations. 406 U.S., at 281-284, 291.
Similarly, the Court refused to bind the union, since
it might have made bargaining concessions with the
previous employer which it would 'not necessarily
agree to in negotiations with the successor. Id., at
288.
The Court refused to qualify the Burns holding when
it concluded in Golden State that the successor should be
responsible for the violations of its predecessor. The
Court wrote, 414 U.S. at 184:
When a new employer . . . has acquired substantial
assets of its predecessor and continued, without
interruption or substantial change, the predecessor's
business operations, those employees who have been
retained will understandably view their job situa-
tions as essentially unaltered. Under these circum-
stances, the employees may well perceive the suc-
cessor's failure to remedy the predecessor employ-
er's unfair labor practices arising out of an unlawful
discharge as a continuation of the predecessor's
labor policies. To the extent that the employees' le-
gitimate expectation is that the unfair- labor prac-
tices will be remedied, a successor's failure to do so
may result in labor unrest as the employees engage
in collective activity to force remedial action. Simi-
larly, it the employees identify the new employer's
labor policies with those of the predecessor but do
not take collective action, the successor may benefit
from the unfair labor practices due to a continuing
deterrent effect on union activities.
The Court summed up the important policies served
by its holding the bona fide successor responsible for its
predecessor's violation-"[a]voidance of labor strife, pre-
vention of a deterrent effect on the exercise of rights
guaranteed employees by § 7 of the Act . . . and ptotec-
tion for the victimized employee[s]." 414 U.S. at 185.
Riehl Estate, however, argues, first, that it is not a suc-
cessor under Golden State and, second, if it were to be so
MARTIN J. BARRY CO. 399
bound by the predecessor's collective-bargaining agree-
ment, the "important labor policy [which] opposed sad-
dling the successor employer with the obligations of the
collective bargaining agreement," as spelled out in Burns,
id., would be defeated.
The manner in which Riehl Estate has briefed these
two issues raises a substantial question whether the two
issues are not really one and the same. At the hearing,
Riehl Estate conceded that it was a successor for Burns
purposes-meaning that it was bound to recognize and
bargain with the Union-but refused to concede that it
was a successor for Golden State purposes-arguing, I
had thought, that there were insufficient criteria to hold
that it should be required to remedy the unfair labor
practices of its predecessor. My reading of its brief indi-
cates that its contention has been, in a meaningful fash-
ion, abandoned or, at least, refined to one of whether, as
a successor, it should be required to execute its predeces-
sor's agreement and comply with it.
My conclusion is based on- the following: Riehl Es-
tate's argument begins with a discussion of footnote 9 of
Howard Johnson, 417 U.S. at 262-263, which reads:
[T]he real question in each of these "successorship"
cases is, on the particular facts, what are the legal
obligations of the new employer to the employees
of the former owner of their representative? The
answer to this inquiry requires analysis of the inter-
ests of the new employer and'the employees and of
the policies of the labor laws in light of the facts of
each case and the particular legal obligation which
is at issue, whether it be the duty to recognize and
bargain with the union, the duty to remedy unfair
labor practices, the duty to arbitrate, etc. There is,
and can be, no single definition of "successor"
which is applicable in every legal context. A new
employer, in other words, may be a successor for
some purposes and not for others.
Following this, Riehl Estate argues that the extent of its
obligations must begin with an analysis of Golden State,
particularly whether a successor employer has an affirm-
ative duty to remedy its predecessor's unfair labor prac-
tices, thus implying that it is a successor but questioning
the extent of its obligations. This is followed by its ac-
knowledgment that there is a "substantial continuity" be-
tween its and Barry's "business methods and employee
complement," that it had notice of Barry's unfair labor
practices at the time it started doing business, and that it
had at opportunity to present. evidence on whether it
was Barry's successor.
Under established Board law, that is sufficient to con-
stitute Riehl Estate as a successor. Miami Industrial
Trucks, 221 NLRB 1223, 1224 (1975).8 The only other
question raised by Riehl Estate is whether, because it did
not purchase the assets of Barry, it somehow loses its
successorship status. That is answered by Perma Vinyl
Corp., 164 NLRB at 969 - "It is the employing industry
that is sought to be regulated and brought within the
corrective and remedial provisions of the Act in the in-
terest of industrial peace." - and, more recently, by Hot
Bagels of Staten Island, 244 NLRB 129 (1979), enfd. 622
F.2d 1113 (2d Cir. 1980). In the latter decision, the
Board held that the finding of a successorship relation-
ship is not grounded upon a purchase per se, noting that
Burns did not involve a purchase. The court of appeals,
enforcing, stated (622 F.2d at 1115): "A direct transac-
tion between the violator of the labor laws against whom
an order is originally entered and its eventual successor
against whom it is sought to be enforced is not re-
quired," citing NLRB v. Ethan Allen, Inc., 544 F.2d 742
(4th Cir. 1976), and NLRB v. Zayre Corp., 424 F.2d 1159
(5th Cir. 1970). In fact, because Barry essentially ren-
dered a service-managing property-there were few
material assets for Riehl Estate to purchase. In any
event, under these authorities, I conclude that in a com-
pliance proceeding, Riehl Estate is a successor. If the
Board had required merely the reinstatement of an em-
ployee, with backpay, I conclude that Riehl Estate
would be required to comply with that remedy.
But the real question is whether Riehl Estate, as a suc-
cessor, is bound to comply with all the remedial terms of
the Board Order against Barry, which here required that
it execute and comply with Barry's agreement, when
consideration is given to the Supreme Court's statement
in Golden State, 414 U.S. at 184 fn. 6, that: "A purchas-
ing company cannot be obligated to carry out under
§10(c) every outstanding and unsatisfied order of the
Board:" The easy answer is that the Board Order flows
to Barry and its successors. Because I am bound by
Board law, and because the Order clearly constitutes the
law of the case, Schulte's IGA Foodliner, 241 NLRB 855,
856 (1979), that appropriately should fully dispose of the
matter. However, because the parties have fully litigated
and briefed the issue of the scope of the successor's li-
ability, and there has been no motion made to the Board
for reconsideration of its Order nor did anyone move to
reopen the Board proceeding to introduce proof of
changed circumstances, the matter is ripe for disposition
herein.9
In weighing the policies enunciated in Burns and
Golden State, I conclude that the prevention of the unfair
labor practices is more important in the circumstances of
this case.'O It is clear that Riehl Estate had notice of the
unfair labor practices of Barry. Indeed, Riehl (with Hill-
man, the sole negotiator for Barry) was the prime partic-
ipant in those violations because it was he who, on April
3, 1978, notified the Union that Barry would not sign the
8 Had there been no concession by Riehl Estate in its brief, I would
have found that it was a successor because there is no meaningful and
appreciable difference in the operations, location, work force, working
conditions, supervision, and services of the two business. Indeed, there
was complete continuity of the employing entity from November 30,
1979, when Barry terminated its business, to December 1, when Riehl
Estate started. Barry's supervisors hired Rtehl Estate's employees on
Barry's time. All but perhaps seven or eight of Barry's employees who
were lured by Riehl Estate were employed at the same locations on De-
cember 1, 1979, as they worked on November 30
9 The General Counsel's brief offered alternatives to the remedy or-
dered by the Board. Although one alternative was intriguing, my consid-
eration of it is clearly outside the scope of the Order and, therefore, out-
side the proper scope of my authority
10 The Supreme Court in Burns stated, 406 US at 274. "Resolution
turns to a great extent on the precise facts involved here "
400 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
collective-bargaining agreement. He, too, must have had
notice of the institution of the unfair labor practice pro-
ceeding against Barry and all of the procedures which
resulted in the Board Order. Thus, Riehl Estate's poten-
tial liability for remedying the unfair labor practices was
a matter about which Riehl could have taken steps to
avoid by ensuring that Riehl Estate would not become a
successor in the first instance or by ensuring that Barry's
unfair labor practices had first been remedied. i i But
knowing of the existence of the outstanding complaint
against Barry, Riehl nonetheless proceeded to take ad-
vantage of Barry's work force, including the existing
managers of various properties, by hiring the employees
at the same rate of wages and under the same conditions
as those afforded by Barry, which was doing business in
complete disregard of the collective-bargaining agree-
ment which it was bound to execute.
Recognizing that the parties stipulated that Rieh]
Estate was not the alter ego of Barry, it is nonetheless
important to note, other than ownership, the substantial
identity of the two enterprises. Riehl was the former
general manager of Barry and his principal partner was
the son of the former owner of Barry. In addition, 21
percent of the stock remained in the Knott family, albeit
for the children (including Riehl's wife) and grandchil-
dren of Knott.12 Furthermore, Riehl Estate negotiated
new agreements with all of Barry's former clients, in-
cluding Henry J. Knott and Lakehurst,13 in which Riehl
Estate charged its clients a percentage of monthly rent
collected as a management fee_ All the percentages Rieh]
Estate negotiated were the same as those charged by
Barry, except that the charges were reduced for the
property owned by Henry J. Knott,14 thus giving him
the benefit of his successor's services and constituting, in
a sense, payment for Riehl Estate's assumption from him
of the management company.
From the perspective of the employees, their employ-
ment had changed in little material respects. Their jobs
were the same; their locations were the same; their su-
pervisors were the same. Riehl, still the general manager,
had disavowed the very collective-bargaining agreement
that he had agreed to execute. At no time has there been
any implementation of that contract.
The failure to correct Barry's violation of the Act
must , as a necessary consequence, have deterred the em-
ployees from their union activities. Here, the employees
voted for the Union as their collective-bargaining repre-
sentative, the Union negotiated for them and obtained
Barry's oral agreement setting forth their terms and con-
11 In Golden State, 414 U S at 188 in. 10 the Court stated: "It is appar-
ent that had [the predecessor employer] already reinstated [the employee]
with backpay before the sale of its business, and thereby fully complied
with the Board's order, [the successor employer] would have had no
more obligation to employ him in the continuing business than it had to
employ any of [the predecessor's] other employees "
12 Henry J Knott Jr, who maintained his office at the same location
where Barry and Riehl Estate had their offices, was the partner of Lake-
burst on whom legal notices of Riehl Estate were to be served. The
owner of the office building was Martin Knott, his brother.
13 Only 4 or 5 of the 15 developments serviced by Barry were not
wholly or partly owned by Knott family interests
14 Henry J Knott owned six or more developments. The service fee
charged by Barry on some of those were reduced from 5 percent to 2 or
2-1/2 percent. On another, it was reduced to 1 percent.
ditions of employment, and then Barry refused to sign its
own submitted draft contract. Collective bargaining,
which is at the heart of the Act, was thus thwarted, and
employees could have been reasonably deterred from
again exercising their right to self-organization, guaran-
teed by Section 7 of the Act.
Recognizing that the remedial powers of the Act are
aimed at restoring the status quo that would have been
obtained had not Barry violated the Act,15 and that if
there had been an executed agreement Riehl Estate
would not, under Burns, have been bound by Barry's
agreement, the damage has now been done. Employees,
knowing that their union representation has been for
naught, would be disinclined to seek union assistance
once Riehl Estate began its business. The mere imposi-
tion on Riehl Estate of backpay liability for the period
ending with, Barry's discontinuance of its business would
be of little aid in renewing employee interest in self-orga-
nization, but would permit Barry's violation to continue
almost wholly unremedied and unabated.
If Barry had corrected its actions and complied with
the Board's Order, the employees would have been faced
with Rieh] Estate's offer to reduce their wages and bene-
fits, clearly a different choice than the one they were
given. In this sense, Rieh] Estate has taken advantage of
and benefited from Barry's unfair labor practices; and
Riehl Estate's employees must have continued to be de-
terred from union activities, an effect which the Board's
Order, complied with in its entirety, will hopefully
cure. 16
The Determination of Liability
The Regional Director's order consolidating these pro-
ceedings required that the backpay hearing be held for
the following purposes: (1) to determine whether Riehl
Estate should be joined as party respondent and named
in the Board Order in Case 5-CA-9363; (2) to determine
to what extent Barry and/or Riehl Estate should be re-
quired to comply with the affirmative remedy provisions
of that Board Order; and (3) to determine the amount of
backpay due to the employees pursuant to the Board
Order.
With respect to item three, the parties agreed that
once the issue of successorship and liability were deter-
mined, they would be able to agree upon the amount of
backpay and other terms and conditions necessary to
comply with the prior Board Order. In accordance with
that agreement, they agreed that the issues of successor-
ship and liability would be severed from the instant pro-
ceeding so that the parties might take exceptions to this
decision and that the remaining issues of the amounts re-
quired to comply with the Board Order would be pre-
11 NLRB v. Rutter-Rex Mfg. Co, 396 U.S 258, 263 (1969).
16 Two decisions cited by Riehl Estate to support its position that only
partial relief should be granted are distinguishable: The successor in
Southeastern Envelope Co., 206 NLRB 933 (1973), did not take over and
undertake the work formerly performed by one of its predecessors In
Thomas Engine Corp, 179 NLRB 1029 (1970), enfd. sub nom Auto Work-
ers v. NLRB, 442 F.2d 1180 (9th Cir 1971), the successor did not per-
form substantially the same work as its predecessor so that it could not
be determined whether the discriminatees would have been offered em-
ployment by the successor
MARTIN J. BARRY CO. 401
served by me, for hearing, if necessary, if the parties
were unable to resolve the computations to comply with
the Board Order.
Accordingly, on the basis of the foregoing facts and
the entire record, I issue the following
CONCLUSIONS OF LAW
1. Martin J. Barry Company and Riehl Estate Manage-
ment Co. are each employers engaged in commerce
within the meaning of Section 2(6) and (7) of the Act.
2. Carpenters District Council and its affiliated Local
974, United Brotherhood of Carpenters & Joiners of
America, AFL-CIO, are labor organizations within the
meaning of Section 2(5) of the Act.
3. The following employees of Riehl Estate constitute
a unit appropriate for the purposes of collective bargain-
ing within the meaning of Section 9(b) of the Act:
All full-time and regular part-time maintenance em-
ployees employed by Riehl Estate at its various
apartment and shopping centers locations in Mary-
land; but excluding clerical employees, guards and
supervisors as defined in the Act.
4. Riehl Estate has not violated Section 8(a)(5) and (1)
of the Act.
5. Respondent Martin J. Barry Company, which did
not appear in opposition to this proceeding, remains fully
responsible to make whole all employees in the above-
described bargaining unit for any losses suffered by
reason of its refusal to give effect to the agreement
which it made, but refused to execute, with the Union.
That includes the differences between what Barry paid
to its employees between the effective date of the collec-
tive-bargaining agreement and November 30, 1978, the
date that it ceased doing business. That also includes the
differences between the amounts that Riehl Estate has
paid since December 1, 1978, and continuing to present
and what should have been paid under the terms of the
collective-bargaining agreement.' 7
6. Riehl Estate is the successor to Barry and, accord-
ingly, is to be joined as a party Respondent to the Board
Order against Barry in Case 5-CA-9363. Under Golden
.State, it is fully responsible to make its employees whole
for any losses resulting from Barry's refusal to bargain
collectively. It is therefore jointly and severally liable for
the same obligations and backpay as is Barry. In addi-
tion, Riehl Estate is bound to sign and give effect to the
agreed-on collective-bargaining agreement for the full
term thereof.
[Recommended Order omitted from publication.]
17 All Barry's assets were liquidated and distributed to the Mano S
and Henry J. Knott Foundation, a charitable foundation The relief grant-
ed against Barry, therefore, may be wholly or partially meaningless.