Pinewood Care Center, Inc.Download PDFNational Labor Relations Board - Board DecisionsJun 7, 1979242 N.L.R.B. 816 (N.L.R.B. 1979) Copy Citation DECISIONS OF NATIONAL LABOR RELATIONS BOARD Pinewood Care Center, Inc.; Truscan Corporation; Michael E. Lee, Don R. Bybee, Ronald J. Gabriel- sen and Dave Garner, copartners d/b/a Pinewood Properties and Service Employees International Union, Local No. 6, AFL-CIO. Case 19-CA-10162 June 7, 1979 DECISION AND ORDER BY CHAIRMAN FANNING AND MEMBERS JENKINS AND MURPHY On February 9, 1979, Administrative Law Judge Harold A. Kennedy issued the attached Decision in this proceeding. Thereafter, Respondents filed excep- tions and a supporting brief, and the General Counsel submitted a brief in support of the Administrative Law Judge's Decision. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the Na- tional Labor Relations Board has delegated its au- thority in this proceeding to a three-member panel. The Board has considered the record and the at- tached Decision in light of the exceptions and briefs,' and has decided to affirm the rulings, findings,2 and conclusions3 of the Administrative Law Judge and to adopt his recommended Order, as modified herein. In the remedial portion of his Decision, the Admin- istrative Law Judge recommended, inter alia, that Re- spondents Pinewood Care Center, Inc., and Truscan Corporation be ordered to make whole employees in the bargaining unit for any loss of pay or other bene- fits suffered as a result of Respondents' unilateral changes in the hours and insurance coverage of em- ployees. Respondents contend that the application of this portion of the remedy to former employee Min- nie Bomar would be inequitable. Mrs. Bomar died in March 1978, 1 month after the new insurance plan was put into effect by Respondents without bargain- ing with the Union. While the insurance plan in ques- IRespondents have requested oral argument. This request is hereby de- nied, as the record, the exceptions, and the briefs adequately present the issues and the positions of the parties. 2 Respondents have excepted to certain credibility findings made by the Administrative Law Judge. It is the Board's established policy not to over- rule an administrative law judge's resolutions with respect to credibility un- less the clear preponderance of all of the relevant evidence convinces us that the resolutions are incorrect. Standard Dry Wall Products, Inc., 91 NLRB 544 (J)0), enfd. 188 F.2d 362 (3d Cir. 1951). We have carefully examined the record and find no basis for reversing his findings. I As explained in his partial dissent in Spruce Up Corporation, 209 NLRB 194, 203 (1974), a case relied upon by the Administrative Law Judge in the instant case, Chairman Fanning believes that under N. L. R. B. v. Burns Inter- national Security Services, Inc., 406 U.S. 272 (1972), the bargaining obliga- tion of a successor employer commences at the point when an employer manifests an intent to retain the employees of its predecessor, rather than at the point when a successor actually employs a majorityl of its predecessor's employees. See also Charles Starbuck and Diane Starbuck d/b/a Starco Farmers Market, 237 NLRB 373 at fn. 4 (1978). tion increased the cost of insurance to employees and decreased the cost to Respondents, it also provided for life insurance coverage, whereas the prior plan did not. The record reveals that Mrs. Bomar's beneficiary received between $6,000 and $6,500 in life insurance benefits as a result of the unilateral change in insur- ance coverage implemented by Respondents. Accord- ingly, we shall modify the Order proposed by the Ad- ministrative Law Judge and shall specify that the estate of former employee Bomar shall not be reim- bursed for any increase in the cost of insurance in- curred by employee Bomar as a result of Respon- dents' conduct.4 ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Rela- tions Board adopts as its Order the recommended Or- der of the Administrative Law Judge, as modified be- low, and hereby orders that the Respondents, Pinewood Care Center, Inc., and Truscan Corpora- tion, Coeur d'Alene, Idaho, their officers, agents, suc- cessors, and assigns, shall take the action set forth in the said recommended Order, as so modified: 1. Substitute the following for paragraph 2(b): "(b) Make whole the employees in the appropriate unit for any loss of pay or other benefits and for any increase in the cost of insurance benefits that resulted from Respondents' unilateral changes in employees' hours and insurance coverage, with interest computed in the manner specified by the Administrative Law Judge; however, the estate of former employee Min- nie Bomar shall not be reimbursed for any increase in the cost of insurance upon which benefits were subse- quently realized." 2. Substitute the attached notice for that of the Administrative Law Judge. IT IS FURTHER ORDERED that all allegations con- cerning Pinewood Properties be dismissed. ' In addition, inasmuch as the Order proposed by the Administrative Law Judge did not explicitly provide that unit employees be made whole for the increase in insurance costs resulting from the unilateral change in insurance coverage effected by Respondents, we shall modify par. 2(b) of the Order to explicitly require the restitution of those increased costs. APPENDIX NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government WE WILL NOT refuse to bargain with Service Employees International Union, Local No. 6, AFL-CIO, as the exclusive bargaining represent- 242 NLRB No. 86 816 PINEWOOD CARE CENTER, INC. ative of our employees in the following appropri- ate unit: All nurses aides, orderlies, head housekeepers. housekeepers, head laundry employees, laun- dry employees, kitchen employees, helpers, and cooks employed at Pinewood Care Center in Coeur D'Alene, Idaho, but excluding all other employees, registered nurses, licensed practical nurses, office clerical employees, guards, and supervisors, as defined in the Act. WE WILL NOT unilaterally, without consulta- tion with the Union, change work schedules, hours of work, insurance coverage, or other terms and conditions of employment of the em- ployees in the above-described unit. WE WILL NOT in any like or related manner interfere with, restrain, or coerce employees in the exercise of rights guaranteed by Section 7 of the Act. WE WILL bargain collectively upon request with the Union. WE WILL reestablish and continue the Blue Cross insurance coverage for our employees in the above-described unit; and WE WILL continue the work schedules and hours of work and other terms and conditions of employment in effect on December 31, 1977, until such time as we negoti- ate in good faith with the Union to agreement or to impasse. WE WILL make whole the employees in the above-described unit for any loss of pay or bene- fits or increase in the cost of insurance benefits that resulted from our unilateral changes in in- surance and work schedules. TRUSCAN CORPORATION PINEWOOD CARE CENTER, INC. DECISION HAROLD A. KENNEDY, Administrative Law Judge: This proceeding was initiated by a charge filed by Service Em- ployees International Union, Local No. 6, AFL CIO. re- ferred to as the Union, on February 7, 1978.' Following the filing of an amended charge by the Union on March 13, 1978, the Regional Director for Region 19 of the National Labor Relations Board issued a complaint on March 16, 1978, charging Truscan Corporation with violating Section 8(a)(5) and (1) of the National I.abor Relations Act, re- ferred to as the Act, in connection with the operation of a nursing home facility called "Pinewood Care Center" at Coeur d'Alene, Idaho. An answer was thereafter filed, and the case come on for hearing at Spokane, Washington, on May 31, 1978. Following a discussion at the hearing as to I The original charge named D. J. Convalescent Care, Inc. d/b/a Pine- wood Manor as the employer. which persons and firms were properly before the Board and who should be named as Respondents in the proceed- ing, the hearing was adjourned by agreement. An amended complaint, based on a second amended charge filed on June 2, 1978, was issued by the Regional Director on June 15, 1978. An answer to the amended complaint was duly filed. and a hearing was held at Spokane, Washington, on August 16 and 17. 1978. The amended complaint alleges violation of Section 8(a)(5) and (I) of the Act and names the following as Re- spondents: Pinewood Care Center, Inc; Truscan Corpora- tion; and Michael E. Lee, Don R. Bybee, Ronald J. Gabrielsen, and Dave Garner, copartners d/b/a Pinewood Properties. The amended complaint alleges that Respon- dents violated Section 8(a)(1) of the Act as follows: 1. On January 27, 1978, Steve Gilliland, the head regis- tered evening shift nurse, told: (a) a union shop steward to leave the premises of Pinewood Care Center because she was engaging in union activities; and (b) other employees they would receive a warning for discussing union affairs with the shop steward. 2. On January 30. 1978, Mary Malloy, administrator of Pinewood Care Center, issued a written reprimand to a union shop steward for engaging in protected concerted ac- tivities. The amended complaint alleges Respondents violated Section 8(a)(5) of the Act after January 1, 1978. by unilater- ally: (a) altering work schedules and reducing the hours of work of certain employees; and (b) instituting new health and welfare benefits on or about February 1, 1978.2 The response to the amended complaint denies that Respon- dents committed any of the unfair labor practices alleged. The pleadings, stipulations, and undisputed evidence of rec- ord establish the existence of the following facts: 1. D. J. Convalescent Care, Inc.. d/b/a Pinewood Manor Convalescent Center, referred to as "D-J," operated a nurs- ing home facility at Coeur d'Alene. Idaho, for some time prior to December 31, 1977.3 2. Michael E. Lee, Don R. Bybee, Ronald J. Gabrielson. and Dave Garner, copartners d/b/a Pinewood Properties, purchased the nursing home from D-J on December 31, 1977. Such purchase included the personal property of the home and D-J's interest in the 10-year lease of the real property where the home was located. On January 1, 1978, Pinewood Properties sublet the lease of real property to Pinewood Care Center, Inc. Also on January 1, 1978, Pine- wood Properties leased the personal property of the nursing home to Pinewood Care Center. Inc. (G.C. Exh. 7 and 8). 3. Pinewood Care Center, Inc., referred to as "PCCI," is an Oregon corporation. Since on or about December 31. 1977, PCCI has operated the nursing home facility at Coeur d'Alene, Idaho, without interruption in substantially the same manner and with substantially the same job classifica- tions and employees as D-J had prior to that date. 4. On January 1, 1978, PCCI and Truscan Corporation signed a "Management Agreement" whereby Truscan Cor- 2 The complaint alleges that these 8(aXS) violations constituted violations of Sec. (aXI) of the Act as well. The amended complaint also alleges that Respondents violated the Act by discontinuing the deduction of employees' union dues and the payment for annual physical examination of employees, but these charges were withdrawn at the hearing. D J was not named as a Respondent. 817 DECISIONS OF NATIONAL LABOR RELATIONS BOARD poration accepted responsibility for managing the nursing home and for providing it with accounting services.4 5. Truscan Corporation, referred to as "Truscan," is an Oregon corporation with offices at 4335 River Road North. Salem, Oregon. It is admitted that Truscan and PCCI "share some directors, share some officers and have the same offices." Respondent's brief concedes that the "offi- cers, directors and ownership of the Respondent (sic) is ac- curately portrayed in GC-3." General Counsel's Exhibit 3 shows Michael E. Lee and Don R. Bybee as president and executive vice president, respectively, of PCCI, with PCCI being owned by Truscan Enterprises as sole stockholder. Michael E. Lee and D)on R. Bybee are shown, respectively, as president and executive vice president of Truscan Corpo- ration, which is owned by Michael E. Lee as sole stockhold- er. Michael E. Lee is also shown as president and sole stockholder of Truscan Enterprises, Inc., a holding com- pany. Michael E. Lee is a partner of Pinewood Properties, along with Don R. Bybee, Ronald J. Gabrielsen, and David Garner.' 6. It is admitted that Truscan and PCCI are engaged in interstate commerce as defined in the Act. It is also admit- ted that PCCI is a successor employer of D-J. 7. On March II, 1977, the Union was certified as the collective-bargaining agent of the following unit of employ- ees of D J: All nurses aides, orderlies, head housekeepers, house- keepers, head laundry employees, laundry employees, kitchen employees, helpers and cooks employed by the employer at its Coeur D'Alene, Idaho operation, ex- cluding all other employees, registered nurses, licensed practical nurses, office clerical employees, guards and supervisors as defined in the Act.6 4Don Bybee, executive vice president of PCCI and Truscan Corporation, testified that Truscan Corporation performs management services for about 16 other nursing homes and one restaurant. Truscan Enterprises has not been named as a Respondent. Michael E. Lee and Don R. Bybee are also directors of Truscan Enterprises, Inc. Bybee testified that Pinewood Properties has no office or employees, and that its lease of property to PCCI provides the only income to the partnership. Bybee stated that Pinewood Properties is an Idaho partnership with Lee, Bybee, Gabrielsen, and Garner all being "general partners." Gabnelsen and Garner each contributed $50,000 to the partnership, but neither Lee nor Bybee made any financial contribution. PCCI was incorporated on Novem- ber 10, 1977. Truscan Enterprises, Inc. was incorporated in late 1977, and Pinewood Properties was established about the same time, According to Bybee, Truscan Corporation started operation in December 1974. There has been no board meeting of PCCI since its incorporation. 6 Par. 9(a) of the complaint, as revised, describes the appropriate unit as follows: All nurses aides, orderlies, head housekeepers, housekeepers, head laun- dry employees. laundry employees, kitchen employees, helpers and cooks employed at Pinewood Care Center in Coeur d'Alene, Idaho, but excluding all other employees, registered nurses, licensed practical nurses, office clerical employees, guards and supervisors as defined in the Act. Marc Earls, president of Service Employecs International Union, Local 6. headquartered in Seattle, Washington, testified that Local 6 merged with Local 202 of the Service Employees International Union, based in Spokane. Washington. He added: At the time of negotiations of a new agreement there was a decertifica- lion petition filed, an election was held, and the results of the election was a certification of the Service Employees International Union, Local 6, as the bargaining representative. Subsequent to the election results, the employer signed a new collective bargaining agreement ... and that, I believe, became effective March 1, 1977. It was stipulated that in January 1978. there were 58 em- ployees working at the Coeur d'Alene nursing facility--34 as nurse's aides, 5 as laundry workers, 4 in the housekeep- ing department, and 15 in the kitchen. Some employees were part time and some were full time. 8. The Union is a labor organization as defined in the Act. 9. D-J and the Union had signed a collective-bargaining agreement on March 9, 1977. covering the period Decem- ber 1, 1976. to November 30, 1978 (G.C. Exh. 18). The parties later agreed to revise the wage rates effective De- cember 1. 1977 (G.C. Exh. 19). 10. Ralph Chinchurreta and Brent Brocksome visited the Coeur d'Alene nursing facility as representatives of Truscan on or about December 20, 1977 just prior to the change of ownership of the facility. Victor Johnson, the administrator and operator of the D J facility, introduced the two repre- sentatives to most of the staff which had assembled in the dining room. The meeting began shortly after 2 p.m. and lasted 10 to 15 minutes. At the time of the meeting, Chin- churreta was director of operations for Truscan, and Brock- some was regional director of operations. It was explained that Brocksome was responsible for Truscan's operations in Idaho and would be more concerned with the facility's op- erations. At the time of the hearing, Chinchurreta was serv- ing as regional director of Truscan.' I1. On January 6, 1978, attorney Brad Coleman sent a letter to Union Local 6 President Marc Earls at the latter's Seattle, Washington, address advising that his firm repre- sented "Michael E. Lee and Don R. Bybee, the new pur- chasers of Pinewood Convalescent Center" and that they were willing "to immediately begin negotiations for a new union contract" (G.C. Exh. 15). Arrangements were eventu- ally made for a meeting to be held at Truscan offices in Salem, Oregon, on February 27, 1978. The meeting began about 10:15 a.m. and lasted no more than 30 minutes. Lee, Bybee. and Chinchurreta attended the meeting with Earls. Earls indicated that the new owners should observe the terms of the collective-bargaining agreement that the Union and D-J had signed, and Lee indicated a willingness to sign a collective-bargaining agreement similar to one that Trus- A sign up sheet offered in evidence indicates that approximately 50 em- ployees attended the meeting, although the employee witnesses thought less than that number were present. The employees who attended the meeting were led to believe that only the highest positions of the facility would be affected by the change in owner- ship. Laundry worker Irene Waddell testified credibly that Chinchurreta told the staff that it would disregard rumors about changes being made "because things were going to stay as they were." Elsie Johnson, another impressive witness who performed laundry and nurse's aide work, testified that Chin- churreta said that only changes "at the very top" would be made, and that "he expected us to continue as we were." Jessie Stewart, a nurse's aide, remembered Chinchurreta had said that it was a "nice facility" and that "there'd be no changes." The defense testimony of the then administrator, Mary Malloy, and the two Truscan representatives concerning the December 1977 staff meeting was less impressive than the evidence given by the employees. The defense testimony was directed at what was nor said at the meeting. Brocksome was not sure what he had said at the meeting, but he claimed that he had told the employees that "there are bound to be changes." Chinchurreta said he had made no statement about any changes being made. Chinchurreta could not recall what Brocksome had said, but indicated that the practice at such a meeting was not to say that there would be no changes. Malloy stated that she "never heard them say there would be no changes." 818 PINEWOO) CARE CENTER. INC. can had negotiated for another of its facilities. Lee indi- cated that Truscan would make any changes it felt neces- sary before an agreement was made with the Union. Earls asked questions concerning reported changes in working hours and insurance of employees working at the Coeur d'Alene nursing facility. Provisions of the D-J-union con- tract were discussed briefly, and the meeting ended in an unfriendly atmosphere. Truscan officials later sent a pro- posed agreement to Earls, but no agreement was ever reached between the parties. 12. Shortly after the new owners took charge of the nurs- ing facility, changes were made in the terms and conditions of employment without notifying the Union. By January 16, 1978, a number of employees had complained to Union Business Representative Betty Williams, stationed at Spo- kane, Washington, about a reduction in hours. This prompted Williams to file a "blanket grievance" on behalf of the employees at the Coeur d'Alene facility (G.C. Exh. 27). The hours of nurse's aides, "dietary" personnel. em- ployees working in the laundry and in other areas of the nursing home were reduced beginning in January 1978. The Union was advised of further reductions or "modification" of hours on or about February 28, March 10, and April 25 (G.C. Exh. 25, 26, and 27).9 Effective February 1, 1978, the insurance for employees at the nursing facility was changed. Blue Cross coverage, which had been previously in effect, was cancelled, and a new insurance coverage was obtained from "IGA." The new IGA group plan included life insurance and was, in some respects at least, broader than Blue Cross. The premium paid by the employer ($2,400 or 46 percent of the total cost), was reduced, how- ever, and the cost to the employees was increased.'0 Under the Blue Cross plan, the single rate premium had been paid by the employer. The employees were made aware of the change in insurance by a notice posted in late January 1978. 13. The Coeur d'Alene facility suffered a net loss of $8,998 in January 1978, $166 in February, $2,623 in March, $7,153 in April, $10,810 in May, and $11,405 in June.' 'While testifying, Williams gave the names of six employees who had claimed a loss of hours. (Shop Steward Byers said 10 or 15 had spoken to her about the loss of hours.) Williams sought to "discuss the situation" with the Administrator Mary Malloy at the Coeur d'Alene home, but never did so. Union Official Richard MacLeod met with Malloy on or about March 31, 1978, but nothing was resolved. MacLeod, who met with Malloy on that date because of Williams' illness, apparently was not knowledgeable of the issues raised by the grievance, and Malloy was without authority to deal with the Union. I Administrator Malloy said she made the decision, at least initially, to reduce the hours of the staff at the nursing home. She recalled that kitchen personnel were given an opportunity to work in other departments. but some refused to do so. See also the notice posted on February 10, 1978 (Resp. Exh. 3). 10 Darolyn Byers and Irene Waddell testified that each of them had paid $17.71 a month for insurance after the change to the IGA plan was put into effect, but were not charged for the Blue Cross coverage that was provided by D-J. Elsie Johnson said the cost of insurance for herself and her husband went from $29.10 each month under Blue Cross to $66.10 each month under IGA. " Bybee testified that the increase in the minimum wage on January 1, 1978 had some impact on the wage scale at the Coeur d'Alene nursing facil- ity. However, he said it was decided in February to set up a new program of Intermediate Care for the Mentally Retarded, commonly referred to as ICFMR, because of the "low census" (reduced number of patients) and high costs. He indicated heavy costs were incurred to get the program underway, but that most of those costs would be eventually reimbursed by the govern- ment. 14. On or about January 29. 1978. Shop Steward Darl- lyn Byers went to the nursing home shortly after 9 p.m. and left a half an hour or so later.'" She went to the facility after receiving a call from Jessie Stewart. a nurses aide, who complained that a posted work schedule indicated that she (Steward) would he losing 2 days of work." Byers was off duty at the time of her visit and spent virtually all of her time at the facility that evening in the staff room, where employees take breaks, talking with Stewart and other em- ployees. Charge Nurse Steve Gilliland entered the staff room briefly and while there oiced disagreement with Byer's interpretation of the status of the Union's collective- bargaining agreement. Shortly thereafter. Gilliland asked Byers to leave the premises on the basis that she was inter- fering with the work of employees. Gilliland also indicated that Stewart and others would be given warning slips for talking to the shop steward that evening. On JanuarN 30, 1978. Administrator Malloy wrote a letter to Byers making reference to "off duty visitations" on Byers' part on January 25, 1979. The letter indicated that "warning records" would be issued in the future to "staff members who disrupt the work day" (G.C. Exh. 28).'4 The Alleged Unilateral Changes Respondents concede that PCCI is a successor employer of D-J." They do not challenge the appropriateness of the bargaining unit or the fact that the Union enjoys majority status. They of course could hardly do either, as the work force continued intact and operated the nursing home facil- ity just as it had before the change of ownership. The Union had been certified as bargaining representative of the unit on March I 1, 1977. And obviously PCCI was aware of the presence of the Union at or about the time of the take over on January 1, 1978, as the attorney for the principal officers of PCCI, Michael Lee and Don Bybee. informed the Union by letter dated January 6. 1978, that the D-J operation had been purchased and they, as "the new purchasers." were willing "to immediately begin negotiations for a new union contract." The real question raised under the allegations of the complaint relating to the unilateral changes in work conditions is whether a successor employer of D-J was free to make changes in the working conditions without consult- ing with the Union and before undertaking to negotiate a new collective-bargaining agreement. The General Counsel and Respondents rely on the "per- fectly clear" dictum contained in the Supreme Court's deci- sion in N.L.R.B. v. Burns International Security Services. Inc., 406 U.S. 272 (1972). which states: Although a successor employer is ordinarily free to set initial terms on which it will hire the employees of a predecessor, there will be instances in which it is per- 1i Charge Nurse Steve Gilliland made a note that Byers came to the facil- ity at 9:05 and was asked to leave at 9:45 p.m. Other witnesses thought she stayed no more than 30 minutes. ) The 2 days of work were later restored to her. " Malloy testified that she had seen the shop steward in the facility during Byers' off duty hours on January 25, and that the January 30 letter related to that visit and not the later evening visit when Byers met and talked with Jessie Stewart. I5 The responsibility of Truscan and members of the Plnewod Properties partnership is dealt with later in this decision. 819 DECISIONS OF NATIONAL LABOR RELATIONS BOARD fectly clear that the new employer plans to retain all of the employees in the unit and in which it will be appro- priate to have him initially consult with the employees' bargaining representative before he fixes terms. In other situations, however, it may not be clear until the successor employer has hired his full complement of employees that he has a duty to bargain with a union, since it will not be evident until then that the bargain- ing representative represents a majority of the employ- ees in the unit as required by § 9(a) of the Act, 29 U.S.C. § 159(a).' 6 Respondents contend that PCCI, as the successor of D J, was able, under Burns, to establish its "initial terms" of employment at the time of the take over as it was not "per- fectly clear" that all of the employees in the bargaining unit were going to be retained. Thus, Respondents argue, the successor employer was free to cut back or reschedule the hours of employees of the facility and institute a new insur- ance program for them without violating the Act. The diffi- culty with Respondents' position is that the record indicates it was perfectly clear at the outset of the take over that the successor planned to retain all of the employees in the bar- gaining unit on the same basis as they had been previously employed by D-J. Respondents admit in their answer the allegations of the amended complaint (Par. 2(b)) that "[s]ince on or about December 31, 1977, PCCI has been engaged in the operation of Pinewood Care Center without interruption and in substantially the same manner and with substantially the same job classifications and employees as D-J." Truscan Official Brocksome claimed that he in- formed employees at the late December 1977 meeting that there would be changes. But persuasive testimony of em- ployee witnesses who were there convinces me that they were not so advised, and it is apparent that no changes were contemplated by the PCCI and Truscan officials. N.L.R.B. v. Wayne Convalescent Center, Inc., 465 F.2d 1039 (6th Cir. 1972), relied on by Respondents, does give some support to their position. The successor employer in that case had been the holder of a mortgage on a nursing home and, following foreclosure, continued to operate the home without interruption with substantially the same per- sonnel. Within a month or so of the take over, the successor unilaterally granted certain wage increases and changed the rates of pay for vacations, sickness, and overtime. The court held that the new employer was under a duty to bar- gain with the incumbent union, but that the changes in pay were proper under Burns as being "merely the initial terms of employment." The Wayne case is distinguishable from the case at bar, however, and, as the General Counsel's attorney indicates in his brief, the decision has been given limited effect. In Wayne, the successor was not aware of the presence of the union at the time of the take over. Also, the nursing facility in the instant matter may not have been in a financially healthy position at the time of the take over, but it was not "moribund." The later decision of the same court in Spitzer Akron, Inc. v. N.L.R.B., 540 F.2d 841 (6th Cir. 1976) is more persuasive than Wayne. The Spitzer family had consummated the pur- l Burns makes it clear that a successor employer is not bound by the terms of a contract agreed to by the predecessor employer and the Union. chase of an automobile dealership known as East Town Chrysler-Plymouth on September 4, 1970, 5 days after the collective-bargaining agreement between East Town and the incumbent union had expired. At an employees' meet- ing held the same evening, the employees were told that wage scales and benefits would be greater than before. The court noted that the work force was hired before the an- nouncement of the changes in wages and benefits, which were put into effect without consultation with the union, and that a member of the Spitzer family had visited East Town in August before the purchase and had stated that he "[wanted] every man to stay on the job, and ... carry on as usual." Finding the employees to have been "misled by 'tacit inference' into believing they would be retained with- out change in the conditions of employment." the court held that the unilateral changes made on September 4 were unlawful "under the teachings of Burns." The court's rea- soning is instructive [540 F.2d at 844.]: We construe Burns as relating to the timing of the changes-whether they predate or postdate the com- mencement of the duty to bargain. As soon as the duty to bargain arises, the successor company cannot insti- tute changes without consulting with the union. As the Seventh Circuit held in Bachrodr. Once the duty to bargain is triggered, a successor employer's responsibilities are akin to those of an ordinary employer prior to the negotiation of a for- mal labor contract but after a bargaining representa- tive has been selected when he has the duty to bar- gain and, the corollary duty, not to institute changes without consulting the union. 468 F.2d at 969. Under Burns, the successor employer can set the ini- tial terms upon which rehiring is conditional, provided that takes place before the duty to bargain arises. Gen- erally, another successor can set the initial terms uni- laterally' without violating the Act, since prior to the rehiring of his predecessor's employees, which consti- tute the majority of his work force in an appropriate unit, there is no duty to bargain. See Nash, Successor- ship After Burns, 7 Ga.L.Rev. 664, 671 (1973); Pate, The Impact ol' Burns, 7 Ga.L.Rev. 687, 693-694 (1973) [hereinafter cited as Pate]; Note, The Bargaining Obli- gations of Successor Employers, 88 Harv.L.Rev. 759, 778 (1975). The only instance in which the duty to bargain may precede the formal rehiring of employees is where "it is perfectly clear" the otherwise successor plans to retain a sufficient number of the predecessor's employees so that the union's majority status will con- tinue. See Pate, supra at 694: Note, Contract Rights and The Successor Employer, The Impact of Burns Security, 71 Mich.L.Rev. 571, 580 (1973). In Burns, the duty to bargain did not mature until late June, at a time when the successor had hired the requisite complement of his predecessor's employees. The Court, however, rejected the union's challenge to changes in working conditions unilaterally instituted by Burns in July, since they had been incorporated in the initial employment contracts in early June, and thus necessarily predated the duty to bargain. Accord- ingly. these changes were merely initial terms set by the successor. 820 PINEWOOD CARE CENTER. INC. In the present case, when the changes were insti- tuted by the Company on September 4, there already existed a duty to bargain with the incumbent union. Not only was the Company's operational structure and practice the same as it was before the transfer of own- ership, but the Company had hired, prior to instituting the changes, the employees of its predecessor, which constituted the majority of its work force .... Assuming arguendo, that the formal rehiring took place after September 4, it appears, nevertheless, that a duty to bargain existed when the unilateral changes were instituted. The record establishes that it was "per- fectly clear" in early August that the Company in- tended to rehire a sufficient number of employees to maintain the Union's majority status. Del Spitzer in- formed the employees that he "[wanted] every man to stay on the job, and would carry on as usual." Conse- quently, there is sufficient evidence to support a duty to bargain which preceded the formal rehiring of the East Town employees. Moreover, there is nothing to indicate that the employees were aware of the pro- posed changes in early August; accordingly, these changes can not be considered as initial terms of rehir- ing under Burns. See Bachrodt, 468 F.2d at 969. The court in Spitzer went on to explain that its earlier decision in Wayne was not really inconsistent, as there was no duty to bargain at the outset of the take over in Wayne. The Court pointed out that in Wayne the new owners had considered converting the nursing facility to a "bed and board facility," and "it was not 'perfectly clear' that Wayne planned to retain a sufficient number of employees to con- tinue the union's majority status." Thus, according to the Court, the changes in conditions of employment in Wayne were initial terms of employment." The instant case is very similar to Howard Johnson Com- pany, 198 NLRB 763 (1972), and Good Foods Manufactur- ing and Processing Corporation, Chicago Lamb Packers, Inc.-Division, 200 NLRB 623 (1972), in which successor employers planned to retain the employees of their prede- cessors and did so." The Board in Howard Johnson, after "The Court in N.LR.B. v. Ivo H. Denham and Geraldine A. Denham d/bla The Denham Company, 469 F.2d 239 (9th Cir. 1972) also effectively distinguished Wayne on the basis that it did not involve a situation where there was a take over of the predecessor's "workforce intact." The Court in Spitzer noted that the Supreme Court had remanded Denham, as well as the Seventh Circuit's first decision in N.LR.B. v. Bachrodt Chevrolet Co., 468 F.2d 963 (7th Cir. 1972), cited in the above quotation from Spitzer. The Seventh Circuit in Zim's Foodliner, Inc., d/b/a Zim's IGA Foodliner, and S & O, Inc., etc. v. N.LR.B., 495 F.2d 1131 (1974), after noting that its Denham decision had been remanded by the Supreme Court, pointed out that the Supreme Court's language in Burns concerning the "unilateral changes doctrine" should allow an employer who initially accepts pre-exist- ing employment terms to "subsequently have second thoughts about the matter" The Court indicated, however, that the time in which to establish voluntary adoption of initial terms "is quite brief." " The Howard Johnson and Good Foods cases were cited by the Board in its later decision in Spruce Up Corporation, 209 NLRB 194, 195 (1974), in which the Board gave its interpretation of the Supreme Court's "caveat" in Burns: We concede that the precise meaning and application of the Court's caveat is not easy to discern. But any interpretation contrary to that which we are adopting here would be subject to abuse, and would, we believe, encourage employer action contrary to the purposes of this Act and lead to results which we feel sure the Court did not intend to flow noting the Burns' dictum quoted above, held that the suc- cessor employer was not free to change the terms of em- ployment unilaterally. Quoting from the Board's decision: As noted, Respondent's regional manager told the predecessor's employees that their employment would continue after the change in ownership. This retention of all of the employees in the units obligated Respon- dent to bargain with the Unions before it fixed initial wages and terms of employment, and we find that Re- spondent, by failing to do so, violated Section 8(a)(5) and (I) of the Act. See also Virginia Sportswear, Incorporated, 226 NLRB 1296 (1976) and L.A. Beefland, Inc., 232 NLRB 1189 (1977). Quite apart from its contention with respect to the Burns' caveat, Respondents argue the unilateral changes in work schedules, involving a cutback in hours of work from some employees, were permissible under the Act on the basis that any successor could have succeeded to D-J's right under the collective-bargaining agreement with the Union "to transfer, assign or otherwise reallocate the work schedule of employees," subject only to the seniority provisions of the agreement. I do not so read the agreement, which also em- powered D-J to "layoff" employees, as it did not authorize a change in the hours or days of work of employees. In any event, the contract did not authorize a change in employees' insurance coverage. See The Dow Chemical Company, 212 NLRB 333 (1974) although it involved a contract which unquestionably gave the employer less authority than the one between D-J and the Union. from its decision in Burns. For an employer desirous of availing himself of the Burns right to set initial terms would, under any contrary inter- pretation, have to refrain from commenting favorably at all upon em- ployment prospects of old employees for fear he would thereby forfeit his right to unilaterally set initial terms, a right to which the Supreme Court attaches great importance in Burns. And indeed, the more cau- tious employer would probably be well advised not to offer employment to at least some of the old work force under such a decisional precedent. We do not wish-nor do we believe the Court wished-to discourage continuity in employment relationships for such legalistic and artificial considerations. We believe the caveat in Burns, therefore, should be restricted to circumstances in which the new employer has either ac- tively or. by tacit inference, misled employees into believing they would all be retained without change in their wages, hours, or conditions of employment, Icitation omitted] or at least to circumstances where the new employer, unlike the Respondent here, has failed to clearly an- nounce its intent to establish a new set of conditions prior to inviting former employees to accept employment. For these reasons, we find that Fowler's expressions to the old em- ployees were not within the Court's caveat, and we conclude that those expressions did not operate to forfeit his right to set initial terms. The successor employer in Spruce Up had announced in February, before his take over on March 3, of a general willingness to hire the predecessor's employees if they would accept different commission rates. The Board found that a majority had been employed by at least April 14, at which time the successor was obligated to recognize and bargain with the incumbent union. The Board stated recently in Charles Starbuck and Diane Starbuck d/bla Starco Farmers Market, 237 NLRB 373, 374 (1978) that it has consistently followed its Spruce Up interpretation of Burns, adding that "where the offer of different terms was subsequent to the expression of intent to retain the predecessor's employees, the Board has regarded the expression of intent as controlling and has found that the new employer was obligated to bargain with the union before fixing terms." And see Nazareth Regional High School v. N.LR.B., 549 F.2d 873 (2d Cir. 1977) where the Court held that a succes- sor school could initiate new terms of employment where, although it had indicated an intention to retain the whole staff, it mailed out letters to most of the faculty inquiring whether they wished to teach on new terms. 821 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Respondents further contend that the changes in the in- surance and hours of work were not unlawful since the Union never made an "affirmative request" to bargain on the unilateral changes made. It is essential, however, that a union be made aware of unilateral changes before it is called upon to make a request to bargain with respect to them. When the Union learned of the changes that were made, it promptly expressed objections. No waiver oc- curred because the changes were a fail accompli. 9 Finally, Respondents argue that an impasse was reached between the parties on February 27, 1978, and that a suc- cessor employer was thereafter free, under Burns. to negoti- ate new terms and conditions of employment without vio- lating the Act. Thus, Respondents argue, that "even if Respondents had engaged in unfair labor practices by insti- tuting unilateral changes any wrong or damage accruing as a result of these practices were cured by the February 27th meeting." This contention is rejected. While "the new pur- chasers of Pinewood Convalescent Center" indicated in its letter of January 6, 1978, to the Union that they were will- ing to "begin negotiations with the union for a new con- tract," there was never an offer from them to bargain over the changes in hours and employees' insurance program. Any bargaining on February 27 was after the fact, since the unilateral changes had already been put into effect. See Missourian Publishing Company, Inc., 216 NLRB 175 (1975). The unilateral changes violated Section 8(a)(5) and (I) of the Act. The 8(a)(1 }) charges The determination with respect to paragraph 10(a) of the amended complaint relates to credibility. There is no ques- tion about the fact that Shop Steward Byers (whose mar- ried name is "Usrey") and the employees with whom she met in the staff room one evening in late January 1978 were engaged in protected activities so long as the employees were on their break time. While the General Counsel's wit- nesses indicated that they believed that the shop steward stayed at the facility less than 30 minutes and talked only with employees who were on their (15 minute) break time, I am inclined to credit on this point the testimony of Gilli- land who took note of and recorded the time when Byers arrived and left the facility. Significantly, Byers agreed that there could have been only four employees covering five wings at the hospital that evening after 9 p.m. and that three of them could well have been talking to her. Jessie Stewart also acknowledged that there could have been only four employees on duty after 9 p.m. and that there were three with Byers when she (Stewart) left the room. I am not persuaded that all of the employees in the staff room with the shop steward that evening were on break time, even if their reaks were being taken in a staggered manner. The evidence of record does not indicate that Gilliland told Byers that she had to leave the premises of the nursing home "because she was engaging in union activities" as the complaint asserts. Byers herself indicated that she under- 19 In the cases cited in Respondents' brief (pp. 14 17), the Union was aware of the employer's proposed actions. There was clearly no waiver in N.L.R.B. v. Burron-Dixie Corporation, 210 F.2d 199 (0th Cir. 1954). for there was an "implied" request to bargain. stood that she was still free to come to the nursing home and talk to employees while they were off duty. Further, the evidence does not indicate that Gilliland "told other em- ployees that they would be] receiving a warning for dis- cussing union affairs with the shop steward," as alleged. Jessie Stewart, the General Counsel's witness on this issue, testified that Gilliland said he was going to "write us all up . .because Dee was taking up our working time." Para- graph 10(a) of the amended complaint will therefore be dis- missed. Paragraph 10(b) of the amended complaint also was not established by the record and will be dismissed. The Gen- eral Counsel has tied the January 30, 1978, "reprimand" letter of Administrator Malloy to Byers' visit on the evening of January 29. Malloy testified, however, that she wrote the January 30 letter over an entirely separate incident which had occurred in the early afternoon of January 25, 1978- when Byers spent 1-1/2 hours of her off duty time at the facility.20 Malloy did not take exception to Byers talking that day with Lois Neff while she was off duty, but she did object to her speaking with personnel (i.e., Irene Waddell) on duty in the laundry room. The purpose of the January 30 letter, Malloy said, was to let Byers know that there was a new administrator at the facility and that the policies of the prior operator no longer applied. Again, Byers did not understand the letter to mean that she could no longer speak to employees during their off duty time. Responsibility of Truscan and Pinewood Properties Respondents concede that Pinewood Care Center. Inc., is a successor employer of D.J. Convalescent Care, Inc., but assert that it is the "sole employer" of the employees of the Coeur d'Alene nursing home facility. Respondents concede that Truscan is an "agent" for PCCI (as the term is used in the Act), and that Truscan's actions are attributable to PCCI. They contend, however, that Truscan cannot be con- sidered a joint employer with PCCI on the basis that Trus- can does not deal with employees at the nursing home "in its own capacity." Respondents assert that there is no juris- diction over the Pinewood Properties partnership, since it has not been shown to be in commerce. Respondents fur- ther assert that the partnership has no employees, that Lee, the "effective 'owner' of both Pinewood [PCCI] and Trus- can," has only one-fourth interest in the partnership and that the two partners having management positions with PCCI and Truscan-Lee and Bybee do not have voting control of the partnership. As Respondents point out, citing Radio & Television Broadcast Technicians Local Union 1264, International Brotherhood of Electrical Workers, AFL-CIO v. Broadcast Service of Mobile, Inc., 380 U.S. 255 (1965), the controlling criteria for determining "nominally separate business enti- ties to be a single employer" are "interrelation of opera- tions, common management, centralized control of labor relations and common ownership." There is ample proof in 20 Byers obviously thought Malloy's January 30 letter did relate to the visit Byers made the night before, and Gilliland's testimony indicated that there could have been a connection. But Malloy testified credibly that she did not know of Byers' evening visit on January 29 when the January 30 letter was prepared. 822 PINEWOOD ('ARE ('ENER. INC the record on each of' these elements with respect to the relationship between Truscan and PCCI. The day-to-day operations of Truscan and PCCI show that both have been closely interrelated. he two corpora- tions share the same officers. They utilize the same counsel and agent for service. Under the arrangements existing be- tween the two firms, PCCI must reimburse Truscan for ser- vices rendered by the director of nursing and the adminis- trator at the nursing home facility. Expenses of Truscan officials for travel, entertainment, and other "operational field work for the Pinewood Care Center" must he paid for by PCCI. In June 1978, Truscan arranged for the advance of funds so PCCI could meet its payroll. Truscan and PCCI have common management. Through the appointment of a manager, who is empowered to em- ploy others "as may be required" to operate the f'acility. Truscan has the exclusive control over the operations of PCCI. Under its "Management Agreement" with PCCI. Truscan supervises "all bookkeeping, accounting and cleri- cal services, incident to the efficient operations and mainte- nance of the Home." including the maintenance of payroll records. See General Counsel's Exhibit 9 also General Counsel's Exhibit 10. There is centralized control of labor relations between Truscan and PCCI. Truscan has handled all matters relat- ing to labor relations for PCCI. Truscan made it clear to the Union that in connection with its representation of employ- ees in the bargaining unit at the Coeur d'Alene facility, it must deal only with Truscan officials. Finally., Truscan and PCCI have the same ownership: Michael Lee effectively owns both corporations. It is thus clear that a joint employer relationship has existed between Truscan and PCCI. My recommended order will, therefore. run against Truscan and PCCI. See J. J. Gumherg, Co. and Pennle Park South, Inc., 189 NLRB 889 (1971). I find Truscan and PCCI are jointly and severally liable for the unlawful unilateral changes made in the hours and insurance of the employees at the Coeur d'Alene nursing home facility. Pinewood Properties will not be named in the order, however, as the partnership has acted only as a lessor of the property used in operating the nursing home. The business of the partnership is limited to furnishing of prop- erty for the operation of the nursing home facility and, as the General Counsel points out, presumably Lee or Bybee would handle any business problems that Pinewood Prop- erties might have. I am unable to conclude, however, that the partnership has engaged in any conduct that should subject the partners to a cease and desist order.2' THE REMLI)Y Having found that PCCI and Truscan have violated Sec- tion (a)(5) and (1) of the Act by unilaterally changing 21 The cases cited by the General Counsel in support of his argument for holding Pinewood Properties are inapposite. American Theatre Corporation d/bla Pussycat Theatre; et al., 220 NLRB 295 (1975), involved "corporate forms" which did not reflect business realities, but constituted "a single en- terpnse ... for purposes of asserting jurisdiction." In Jackson Manor Nursing Home, Inc., and/or Isaac Mi:rahi dt/b/a Jackson Manor Nursing Home, 194 NLRB 892 (1972), the lessor of the nursing home was held, along with the lessee. as a joint employer because the lessor had the right to participate in collective bargaining and withhold consent to any labor contract reached. work schedules or the hours of work and insurance cover- age of employees at the Coeur d'Alene, Idaho. nursing fa- cility, I shall recommend that they cease and desist there- from and take affirmative action designed to fulfill the policies of the Act. I shall recommend that the two corpora- tions cease and desist from making such unilateral changes in the terms and conditions of employment and that they make whole the employees of the bargaining unit for any loss of pay or benefits that they may have suffered as a result of the unilateral actions, with interest as prescribed in F 1'. I'oolw/orth Companv, 90 NRB 289 (1950): Isis Pluanhing & lHetriing ('o., 138 NL.RB 716 (1962); and Flor- ida Steel Corporatiion, 231 NLRB 651 (1977). Further, I shall recommend that P'CI and Truscan be ordered to cancel such unilateral changes and continue the schedule or number of hours of work, insurance and conditions of em- ployment in effect on December 31, 1977. until such time as said Respondents negotiate in good faith with the Union to agreement or to impasse. C(oN( I tI()tNS ()F LAWV As a result of the foregoing findings of fact, and the whole record. I enter the following conclusions of law: I. Respondents Pinewood Care Center, Inc., and Trus- can Corporation are, singly or jointly, employers engaged in commerce within the meaning of Section 2(2). (). and (7) of the Act. 2. The Union is a labor organization within the meaning of Section 2(5) of the Act. 3. By implementing changes in insurance. work sched- ules and the hours of work of employees at the C'oeur d'Al- ene nursing facility without consulting with the Union, Re- spondents Pinewood ('are C('enter. Inc.. and Truscan Corporation violated Section 8(a)(5) and () of the Act. 4. The aforesaid unfair labor practices affect commerce within the meaning of Section 2(6) and (7) of the Act. 5. No other violations of the Act as alleged were estab- lished. Upon the fregoing findings of' fact, conclusions of law. and the entire record. and pursuant to Section 1O(c) of the Act, I hereby issue the following recommended: ORDER: Respondents Pinewood Care Center, Inc.. and Truscan Corporation, their officers. agents, successors, and assigns, shall: 1. C('ease and desist rom: (a) Refusing to bargain collectively with the Union as the exclusive bargaining representative of employees in the following appropriate unit: All nurses aides, orderlies, head housekeepers, house- keepers, head laundry employees, laundry employees. kitchen employees, helpers, and cooks employed at 22 In the event no exceptions are filed as provided by Sec. 102.46 of the Rules and Regulations of the National Labor Relations Board, the findings. conclusions. and recommended Order herein shall. as provided by Sec 102 48 of the Rules and Regulations. be adopted bh the Board and become its findings, conclusions, and Order. and all objections thereto shall be deemed waived for all purposes. 823 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Pinewood Care Center in Coeur d'Alene, Idaho, but excluding all other employees, registered nurses, li- censed practical nurses, office clerical employees, guards, and supervisors, as defined in the Act. (b) Unilaterally changing work schedules, hours of work, insurance, or other terms and conditions of employment of the employees in the above-described unit without consult- ing with the Union. (c) In any like or related manner interfering with, re- straining, or coercing employees in the exercise of rights guaranteed to them by Section 7 of the Act. 2. Take the following affirmative action which is neces- sary to effectuate the policies of the Act: (a) Cancel the unilateral changes heretofore made in em- ployees' work schedules, hours of work, insurance, or other terms and conditions of employment of the employees in the above-described appropriate unit and continue the hours, insurance, and other terms and conditions of em- ployment in effect on December 31, 1977, until such time as Respondents negotiate in good faith with the Union to agreement or to impasse. (b) Make whole the employees in the appropriate unit for any loss of pay or other benefits that they may have suffered as a result of the unilateral changes in hours and insurance of employees, with interest in the manner pre- scribed in the "Remedy" Section of this Decision. (c) Preserve and, upon request, make available to the Board or its agents, for examination and copying, all pay- roll records, social security payment records, timecards, personnel records and reports, and all other records rel- evant and necessary to a determination of compliance with this Order. (d) Post at their Coeur d'Alene, Idaho, place of business copies of the attached notice marked "Appendix."" Copies of said notice, on forms provided by the Regional Director for Region 19, after being duly signed by Respondents' rep- resentatives, shall be posted by them immediately upon re- ceipt thereof and be maintained by them for 60 consecutive days thereafter, in conspicuous places, including all places where notices to employees customarily are posted. Reason- able steps shall be taken by Respondents to insure that said notices are not altered, defaced, or covered by any other material. (e) Notify the Regional Director for Region 19, in writ- ing, within 20 days from the date of this Order, what steps have been taken to comply herewith. D In the event that 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 National Labor Relations Board" shall read "Posted Pursuant to a Judg- ment of the United States Court of Appeals Enforcing an Order of the Na- tional Labor Relations Board." 824 Copy with citationCopy as parenthetical citation