Ramada Inns, Inc.

National Labor Relations Board - Board Decisions

Jun 5, 1968

171 N.L.R.B. 1060 (N.L.R.B. 1968)

1060 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Ramada Inns, Inc. and Culinary Workers, Barten-
ders & Hotel Service Employees , Local 535,
AFL-CIO
Victor Maalouf and Lee Sigloch d/b/a Ramada Inn
and Culinary Workers , Bartenders & Hotel Ser-
vice Employees , Local 535, AFL-CIO. Cases
21-CA-6933 and 21-CA-7115
June 5,1968
DECISION AND ORDER
On March 3, 1967, Trial Examiner George
Christensen issued his Decision in the above-enti-
tled consolidated proceeding, finding that the
Respondents, Ramada Inns, Inc., herein called
Ramada, and Victor Maalouf, herein called
Maalouf , had engaged in and were engaging in cer-
tain unfair labor practices and recommending that
they cease and desist thereform and take certain af-
firmative action, as set forth in the attached Trial
Examiner 's Decision . Thereafter, the Respondents
filed exceptions, and the General Counsel filed
cross -exceptions , to the Trial Examiner 's Decision
and briefs in support thereof,
The Board has reviewed the rulings of the Trial
Examiner made at the hearing and finds that no
prejudicial error was committed. The rulings are
hereby affirmed. The Board has considered the
Trial Examiner's Decision, the exceptions, the
cross-exceptions, the briefs, and the entire record
in the case ,' and hereby adopts the findings, con-
clusions, and recommendations of the Trial Ex-
aminer only to the extent consistent herewith.
During the month of July 1965 a motel-restau-
rant commenced operations in Riverside , Califor-
nia, under the name of Ramada Inn. The enterprise
was owned by a partnership (not involved herein)
which was a franchisee of the Respondent Ramada,
a national motel chain. Ramada had agreed to
operate the restaurant under a 5-year lease agree-
ment, beginning on the date it would commence
operations. Ramada commenced operations on July
15, 1965. On June 22, 1965, Ramada had notified
the partnership that it wished to cancel the
leasehold, but was persuaded to refrain until
another operator could be found. Subsequently, the
partnership leased the entire premises, including
the motel and restaurant, to Sigloch who accepted
and continued the partnership's lease of the restau-
rant to Ramada.
On July 22, 1965, the Union, Culinary Workers,
Bartenders & Hotel Service Employees, Local 535,
AFL-CIO, had valid authorization cards from 15 of
the 29 restaurant employees. On that day it in-
formed Fields , Ramada 's Riverside manager , that it
represented a majority of the restaurant employees
and that it desired an agreement with Ramada
covering them. Fields stated his belief that he
lacked authority to deal with the Union, but said he
would contact Ramada's Phoenix headquarters
concerning the matter.
On August 3 the Union again contacted Fields,
who, at this time, stated that the Union would have
to deal directly with the Phoenix office. He advised
the Union that questions had been raised about the
scope of the unit, and, since Ramada operated
other restaurants in the area, it wanted to be cer-
tain that the unit was limited to the Riverside
restaurant. As instructed by Fields, therefore, the
Union contacted Thiel, Fields' supervisor at
Phoenix, who, in turn, directed it to contact
Lindgren , Ramada 's house counsel.
When Lindgren was reached by telephone on
August 4, he told the Union that he knew of the
proposed agreement but that "it involved an issue
of company policy and would have to be submitted
to Ramada's Board of Directors." Thereafter, on
August 10, the Union again called Lindgren who in-
formed it that Ramada's board had not yet acted,
but agreed that the Union should send him a copy
of its proposed contract containing the exact terms
desired by the Union. He advised the Union to con-
tact him again in a week.
On August 16, while Lindgren was on vacation,
the Union sent four executed copies of the
proposed contract to Ramada with a cover letter,
which read:
We have authorization for representation from
(18) eighteen of your employees from your
Food and Beverage Department at the Ramada
Inn in Riverside, California. A majority of
these employees are members of Culinary
Workers and Bartenders Local #535,
August 20, 4 days later, the Union contacted
Thiel, but Thiel advised it to call back when
Lindgren returned, since only Lindgren could han-
dle the matter. Thus on August 3 1, the Union again
called Lindgren. He informed it that he had
received the agreements but that the Ramada board
had taken no action concerning them. When
questioned about the agreements, Lindgren replied
that he "found nothing clearly objectionable in the
contract," but since he was currently operating
' Respondent Maalouf has requested oral argument Because. in our
opinion, the exceptions, the cross-exceptions , the briefs , and the entire
record adequately set forth the issues and positions of the parties, the
request for oral argument is hereby denied
171 NLRB No. 115
RAMADA INNS, INC. 1061
under a busy schedule, he urged the Union to con-
tact him at a later date.
Thereafter, on September 13 and 17, the Union
contacted Lindgren, who merely stated that
Ramada 's board had not acted . During the Sep-
tember 17 conversation the Union threatened to
file unfair labor practice charges, and Lindgren
then informed it that Ramada was in the process of
setting up a personnel department which would
handle labor relations, which was outside his realm.
The Union filed charges with the Board on Sep-
tember 30.
Ramada, by letter to the Regional Office on Oc-
tober 28, informed the Board that because it was
anticipating divestiture of the Riverside operation,
it felt it would be "improper and unfair to all con-
cerned" for it to negotiate with any unions on a
long-term basis. However, the Union did not
receive notice of Ramada's intention to terminate
its operation of the restaurant until Ramada's
December 16, 1965, answer to the complaint
herein.
Ramada relinquished possession of the restaurant
on January 5, 1966, and Respondent Maalouf
began operations the following day pursuant to a
sublease agreement with Sigloch . Maalouf carried
over 21 of the 28 employees on Ramada's January
5 payroll, and replaced the other 7 with new em-
ployees. Only 6 of these 21 former Ramada em-
ployees, however, had executed authorization cards
for the Union.
The Union contacted Maalouf on January 20 and
February 10, 1966, and informed him about its
preexisting dispute with Ramada and sought confir-
mation that he was the new owner and operator of
the restaurant . Maalouf denied that he was. After
learning from another source that Maalouf was the
owner and operator, the Union on March 3 sent
Maalouf a letter asserting its majority status and de-
manding recognition . Maalouf made no reply and
the Union filed charges against Maalouf on March
10, 1966.
Thereafter, on May 18, 1966, Maalouf admitted
ownership of the restaurant . During this meeting
and several subsequent meetings Maalouf discussed
the Union's standard contract and health and wel-
fare programs, but on June 17, he discontinued
talks until the resolution by the Board of the
Union's charges.
We find, in agreement with the Trial Examiner,
but for different reasons , that Ramada violated Sec-
tion 8(a)(5) of the Act; we disagree with his finding
that Maalouf violated the Act.
A. Ramada: We find in agreement with the Trial
Examiner that the Union represented a majority of
the employees in the appropriate unit of Ramada's
Riverside restaurant on and after July 22, 1965. As
set forth above, the Union approached Ramada on
a number of occasions on and after that date, and
formally requested recognition on July 22 and Au-
gust 16, 1965. Fields, asserting that he did not have
authority to deal with the Union, directed it to
Ramada's head office in Phoenix. Lindgren never
specifically discussed terms and conditions of em-
ployment or matters embodied in the contract, but,
rather, continued to state that the entire matter was
a policy question which could only be decided by
Ramada 's board of directors, and finally informed
the Union that labor relations were "really outside
his realm ." On the basis of the foregoing, we find,
in agreement with Ramada, and contrary to the
Trial Examiner, that Ramada failed and refused to
recognize the Union. We find no merit, however, in
Ramada's contention that its refusal to extend
recognition was lawful.
When confronted with the Union's repeated de-
mands for recognition and bargaining, Ramada
never questioned the Union's status as the majority
representative of Ramada's employees, but engaged
in dilatory tactics over a period of several months
during which authority to treat with the Union was
shifted from agent to agent. Moreover, as the Trial
Examiner found, Ramada never had any intention
of bargaining with the Union, for the asserted
reason that it considered its operation of this
restaurant to be temporary. However, the statutory
duty to bargain cannot be excused, even temporari-
ly, on the ground of such economic uncertainty.' In
any event, Ramada 's lack of good faith is further
demonstrated by its failure to inform the Union of
its position in this respect. Accordingly, we find
that Ramada , by its conduct, as heretofore
described, failed and refused to recognize and bar-
gain with the Union in good faith, in violation of
Section 8(a)(5) and (1) of the Act.
As Ramada is no longer in business at the River-
side location, we shall order, as the only ap-
propriate remedy in the circumstances, that
Ramada , if it ever again resumes operations at this
location, bargain with the union which represents a
majority of its employees, and mail copies of a
notice to that effect to its former restaurant em-
ployees.
B. Maalouf: When Maalouf assumed control of
the restaurant on January 6, 1966, he was, as found
by the Trial Examiner, a bona fide purchaser, with
no knowledge of Ramada's obligation to bargain or
its violation of the Act. There had been a substan-
tial turnover of employees since July 22, 1965,
when the Union had made its bargaining demand
8 Sec Butler Cheunical Ca.. 116 NLRB 1041,1054
1062 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
on Ramada . Of Ramada's 28 employees in the ap-
propriate unit immediately before Maalouf's
takeover, only 9 had been employed on July 22,
1965. Maalouf hired 21 of Ramada's employees,
replaced 7, and subsequently added others as he
enlarged the staff.
Ramada's prior unlawful refusal to bargain can-
not, of course, be attributed to Maalouf. The Board
has never held that an unfair labor practice
devolves upon a bona fide purchaser of a business
simply by reason of successorship, and we are
aware of no principle that would justify such a
holding. As the Trial Examiner in effect recognized,
the issue with respect to Maalouf is whether
Maalouf separately and independently violated Sec-
tion 8(a)(5). The Trial Examiner found that he did,
by failing and refusing to honor in good faith the
Union's bargaining request which was directed to
him on March 3, 1966. We have already noted that
we disagree with that finding. We set out our
reasons below.
The law is-clear that an employer, irrespective of
his motivations, does not violate Section 8(a)(5) by
failing and refusing to bargain with a union if in fact
the union at the time of the recognition demand
does not represent a majority of the employees in
the appropriate unit. In the instant case , the Union
at no time proferred to Maalouf proof in any form
of its asserted representative status . The only
evidence of union designations submitted at the
hearing related to the Union's majority card show-
ing on July 22, 1965, when it made its bargaining
demand on Ramada. So far as the evidence affirma-
tively shows on March 3, 1966, some 7 months
later, when the Union made its bargaining demand
on Maalouf, it was the specifically designated agent
of no more than 6 employees in the unit which then
numbered in excess of 28 employees.
The Trial Examiner nevertheless found that the
Union enjoyed majority status on and after March
3, 1966. He reasoned that since Maalouf had suc-
ceeded to Ramada's enterprise as a going business,
the Union's majority which was shown to have ex-
isted among Ramada's employees on July 22, 1965,
must be presumed to have continued through the
date of the Union's demand on Maalouf, in the
absence of affirmative rebutting proof by Maalouf
that Maalouf's employees in the unit no longer
desired representation. We disagree. The burden
was on the General Counsel to establish majority
status at the time of Maalouf's alleged refusal to
Sec, e g , C'elanew Corp, 95 NLRB 664.
We do not read the record as supporting a finding that Ramada ever ac-
tually recognized the Union as a bargaining agent and reject the Trial Ex-
aminer 's finding to the contrary It is clear in any event that the Union did
not occupy a recognized status as an incumbent union at the time of
bargain, not on Maalouf to prove its absence. The
Board's presumption principles3 relied upon by the
General Counsel, which dispense with the normal
requirement of independent affirmative proof of
majority as of the time of a bargaining demand, are
not properly applicable to a case of this sort. They
have been limited to situations where the refusal to
bargain is with a Board certified union or with an
incumbent union which has theretofore achieved a
bargaining status evidenced by a collective-bargain-
ing agreement, or, at least, by prior recognition.' In
the instant case, the Union at no time occupied cer-
tified or incumbent status, either prior to or after
Maalouf's takeover, and was therefore not entitled
to the benefit of that legal presumption. We do not
suggest that the restricted scope of the Board's pre-
sumption principles preclude in initial organization
cases the drawing of an inference of continuing
majority, if justified by other circumstances. But we
think it clear that in this case such an inference is
not reasonably warranted under usual evidentiary
standards. The lapse of time between the Union's
July 22, 1965, demonstration of a majority and its
March 3, 1966, bargaining demand on Maalouf,
and the intervening substantial turnover of em-
ployees clearly negate such an inference.
Nor is the Union's claim that Maalouf indepen-
dently violated Section 8(a)(5) aided by our find-
ing that Ramada had unlawfully refused to bargain
with it prior to the transfer to Maalouf. It is true
that if Ramada had continued the operation of the
restaurant it would now be required to remedy its
own violation by bargaining with the Union. But
this neither supplies the proof found wanting in
Maalouf's case, that the Union in fact commanded
majority support when Maalouf was asked to bar-
gain, nor justifies us on the basis of such a hindsight
view in branding Maalouf as an unfair labor prac-
tice violator. We have already emphasized that
Maalouf was unaware of the Union's representation
claim or of its unfair labor practice charge against
Ramada when he took over the business. Although
he did become aware of this before the bargaining
demand was made on him, he even then had no
way of knowing, pending the outcome of this case,
whether the charge was a meritorious one. If,
without proof of current majority, Maalouf had ac-
ceded to the Union's bargaining demand, and it had
later turned out that the Union's charge lacked
merit, his action would have had the effect both of
forcing the Union without proper justification upon
Maalouf's takeover on January 6, 1966 The Union's charge, alleging that
Ramada had unlawfully refused to recognize and bargain with it , was filed
on September 30, 1965, and the complaint on that charge issued on
December 7, 1965
RAMADA INNS, INC. 1063
a nonconsenting majority; and of subjecting him to
an unfair labor practice charge for interfering with
the majority 's right to refrain from self-organiza-
tion. See International Ladies' Garment Workers'
Union [ Bernhard-Altmann Texas Corp.] v. N.L.R.B.,
366 U.S. 731. To adopt the approach urged upon
us by our dissenting colleagues would be to require
one in Maalouf's position , though acting in the best
of faith , to risk committing an unfair labor practice
whatever course he takes . In a case such as this,
where a successor employer has acquired a business
with no knowledge of alleged prior unfair labor
practices , we do not think he may be fairly held to
have assumed that risk.
Accordingly , as we find that the Union failed to
establish its status as a majority representative, we
conclude that Maalouf did not violate Section
8(a)(5) and ( I) by his failure and refusal to bargain
with the Union. We recognize that our finding that
Maalouf did not himself violate Section 8(a)(5)
does not per se foreclose a finding that he, as the
successor of Ramada , should nevertheless be held
responsible for remedying Ramada's unfair labor
practice , if necessary to effectuate the policies of
the Act.5 However, we do not consider such
a remedial order appropriate in the particular cir-
cumstances of this case-bearing in mind (a) that
Maalouf was a remote purchaser with no
knowledge of Ramada 's unfair labor practice when
he acquired the business; (b) that there was a sub-
stantial turnover in the employee complement
between the time Ramada's employees designated
the Union and the time of Maalouf 's successorship;
and (c ) that there is no evidence in this case of any
independent unfair labor practices from which it
might be inferred that a fair election cannot be held
among Maalouf 's present employees to allow them
to determine for themselves whether or not they
desire to be represented by the Union.
It follows that the complaint against Maalouf
should be dismissed in all respects.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor
Relations Board hereby orders that the Respon-
dent , Ramada Inns, Inc ., Riverside , California, its
officers , agents, successors , and assigns, shall:
1. Cease and desist from:
(a) Refusing to recognize and bargain collective-
ly concerning rates of pay, wages, hours, and other
terms and conditions of employment with any
union which represents a majority of the restaurant
employees at the Riverside, California, location, if
it ever again resumes operations at this location.
(b) In any like or related manner, interfering
with, restraining, or coercing its employees in the
exercise of rights guaranteed by Section 7 of the
Act.
2. Take the following affirmative action which is
necessary to effectuate the policies of the Act.
(a) Upon request, if it ever again resumes opera-
tions at the Riverside, California, location, bargain
collectively in good faith with any union which
represents a majority of the restaurant employees in
an appropriate unit , concerning rates of pay , wages,
hours of employment, and other conditions of em-
ployment , and, if an understanding is reached, em-
body such understanding in a signed agreement.
(b) Mail a copy of the attached notice marked
"Appendix"6 to each of its employees employed at
the restaurant in Riverside , California , between
July 22, 1965, and January 5, 1966. Copies of said
notice , on forms provided by the Regional Director
for Region 21, shall, after being duly signed by
Respondent, be mailed immediately upon receipt
thereof.
(c) Notify the aforesaid Regional Director, in
writing , within 10 days from the date of this Order,
what steps have been taken to comply herewith.
IT IS FURTHER ORDERED that the complaint against
the Respondent, Victor Maalouf, be, and it hereby
is, dismissed in its entirety.
MEMBER FANNING, concurring in part and dissent-
ing in part:
I agree with the majority's conclusion that
Respondent Ramada violated Section 8(a)(5) of
the Act. However, I disagree with the finding that
Ramada never recognized the Union as its em-
ployees' bargaining representative. The record is
clear, as the Trial Examiner found, that neither
Manager Fields, whom the Union first contacted on
July 22, 1965, nor his superior, Thiel, nor Labor
Attorney Lindgren raised any question at any time
with respect to the Union's status as the authorized
representative of Respondent's employees. Indeed,
Lindgren himself testified that he found nothing
"clearly objectionable" in the terms of the contract
forwarded to him by the Union at his request. The
"policy question," which Lindgren finally con-
sidered a matter for Ramada's board of directors,
was not one of recognition, but the actual signing of
^ Cf Pernia Vinvi Curlmrauon, Dade Plasm % Co and United State% Pipe
and Foundry Coin puny , 164 NLRB 968
" In the event that this Order is enforced by a decree of a United States
Court of Appeals , there shall he substituted for the words "a Decision and
Order" the words " a Decree of the United States Court of Appeals Enforc-
ing an Order -
1064 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
the contract , after months of delay and procrastina-
tion. As Respondent frankly admitted , this delay
and the outright refusal "to negotiate" with the
Union was due solely to the impending transfer of
the business from Ramada to Maalouf and a desire
on the part of Ramada not to bind its successor to a
union contract. Under these circumstances, it
seems to me unrealistic to conclude , as the majority
does , that Ramada 's violation of Section 8(a)(5)
consists of an initial refusal to recognize the Union
rather than a refusal to enter into good -faith bar-
gaining for the purpose of negotiating and execut-
ing a collective - bargaining agreement , as found by
the Trial Examiner.
I must also disagree with the majority 's unusual
conclusion that Maalouf , the successor to Ramada,
did not violate Section 8(a)(5) in any respect and,
moreover , is under no obligation to remedy
Ramada 's unfair labor practices.
The majority concedes , as it must, that in succes-
sorship cases there is a rebuttable legal presump-
tion that the Union 's majority status continues until
disproved . The majority argues , however , that the
Union in the instant case is not entitled to such a
presumption . This is so, according to the majority,
because the Union did not occupy a certified or "in-
cumbent status." With respect to certification, the
critical question , in my opinion , relates to the
Union's actual majority status rather than the
method by which such status was acquired. The
rule is too well established to require citation of
authority that employees are free to select a Union
to represent them either by means of a Board elec-
tion or some other valid procedure . With respect to
the nature of its incumbent status , obviously if
Ramada had fulfilled its statutory obligation to bar-
gain in good faith there would have been enough
recognition to satisfy even the majority's standard
and, in all probability , a contract. Lindgren testified
that the Union 's suggested contract was basically
acceptable . Clearly , the majority's reliance upon
these factors in finding the normal rules of succes-
sorship inapplicable to Maalouf rewards Ramada
and Maalouf for the former 's intransigence and il-
legal conduct and accomplishes Ramada's express
purpose in refusing to negotiate with the Union.
This harsh and restrictive interpretation of the law
is qualified by a somewhat ambiguous suggestion
that the presumption of continuing majority in ini-
tial organization cases may be warranted "if
justified by other circumstances " not present in the
instant case . In this case the majority stresses the
negative circumstance that there was a lapse of
time when the Union demonstrated its majority on
July 22, 1965, and its bargaining demand on
Maalouf on March 3 , 1966. But the majority is per-
fectly willing to presume and, indeed , insists on the
presumption that the Union had a majority on
January 5, 1966 . If the presumption was valid in
January why should it not be valid a few months
later in March ? This question is all the more per-
tinent in the light of Maalouf 's deliberate
misrepresentation that he was not the owner of the
business when the Union on January 20 and
February 10 attempted to determine whether or not
he was Ramada 's successor . It was not until May
18, after the Union had secured unquestionable
proof of his ownership and filed charges with the
Board , that Maalouf finally admitted to the Board
and the Union that he was , in fact , the employer of
his employees. During this period of deceitful and
dilatory tactics Maalouf did not question the
Union 's majority . Thereafter , he actually entered
into negotiations with the Union and discussed the
terms and conditions of its health and welfare pro-
grams and standard contract . He discontinued
meeting with the Union pending the results of the
unfair labor practice hearing . If these circum-
stances are not enough to warrant application of
the legal theory of continuing majority when the
predecessor employer has unlawfully prevented the
Union from achieving certification or contractual
status, I do not know what the "other circumstan-
ces" are to which the majority refers . On this
record it seems somewhat incongruous to conclude
that Maalouf is a bona fide successor " acting in the
best of faith ." If he were , indeed, acting in good
faith several legitimate courses were open to him
when the Union apprised him of Ramada 's unfair
labor practices and queried him about his owner-
ship of the business . First , he would have been
truthful about his status . Second, he might have
questioned whether the Union still represented a
majority of his employees and either filed an RM
petition or insisted that the Union file an RC peti-
tion . Maalouf did neither . He stalled ; he dissem-
bled; he stopped negotiations in the hope that he
would escape bargaining entirely as a consequence
of this proceeding . I do not think it is sufficient to
say, as the majority does , that certain , unstated
"circumstances " would permit application of the
normal legal presumption in situations of this kind
without indicating in any way what those circum-
stances might be or how employees , who have
selected a Union to represent them, can protect
themselves from attempts by their employer and his
successor to deny them the fruits of collective bar-
gaining.
Having found that Maalouf is not in violation of
Section 8(a)(5) of the Act, the majority concludes
further that the principles of the Perma Vinyl Cor-
poration case , supra, do not require that Maalouf,
RAMADA INNS, INC. 1065
as a successor , remedy the unfair labor practices of
Ramada . Again , the majority relies upon the finding
that there is no evidence that Maalouf knew on
January 6 of Ramada's unfair labor practices, that
there was a turnover of employees, adding that
there is no evidence of "independent unfair labor
practices " from which it can be inferred that a fair
election is not now possible. In the Perma Vinyl
case the Board held:
When a new employer is substituted in the em-
ploying industry there has been no real change
in the employing industry insofar as the victims
of past unfair labor practices are concerned, or
the need for remedying those unfair labor
practices. Appropriate steps must still be taken
if the effects of the unfair labor practices are to
be erased and all employees reassured of their
statutory rights. And it is the successor who
has taken over control of the business who is
generally in the best position to remedy such
unfair labor practices most effectively.
In my opinion, this rationable is particularly ap-
plicable to the instant case . Maalouf knew , at least
on January 10, 1966, of Ramada's unfair labor
practices, at the very time he was denying owner-
ship of the business . While there may have been a
turnover of employees, clearly the long and suc-
cessful efforts of Ramada and Maalouf to avoid
good - faith bargaining diminished , if it did not
destroy, the Union's standing among the em-
ployees. Under these circumstances, and in view of
the Board's recent efforts to strengthen the remedi-
al processes of the Board, I would order Maalouf to
bargain with the Union , upon request.
MEMBER BROWN , dissenting in part:
I agree with my colleagues that Ramada violated
Section 8(a)(5) by failing to bargain in good faith
with the Union as majority representative of
Ramada's employees. However , I dissent from their
conclusion that Maalouf owed no bargaining
obligation to the Union and therefore did not also
violate Section 8(a)(5) of the Act. Without any
hiatus whatsoever, Maalouf took over most of
Ramada's employees, these employees constituting
the majority of Maalouf's employee complement,
and it continued the same business operations per-
formed by Ramada. Clearly, the "employing enter-
prise "' has remained the same and Maalouf is
Ramada 's successor in every sense . This "employ-
ing enterprise " has frustrated the bargaining rights
of the affected employees and, by dismissing this
complaint against Maalouf, my colleagues now per-
mit this unlawful conduct to succeed.
Where one employer succeeds to another's em-
ployees and operations and continues operating as
before, the unitary concept underlying such succes-
sorship status is that the "employing enterprise"
may not be fragmented respecting its obligation
under the Act. "It is the employing industry that is
sought to be regulated and brought within the cor-
rective and remedial provisions of the Act in the in-
terest of industrial peace." N.L.R.B. v. Colten, d/b/a
Kiddie Karer Mfg. Co., 105 F.2d 179, 183 (C.A. 6).
Thus the Board recently observed in this connec-
tion that "When a new employer is substituted in
the employing industry there has been no real
change in the employing industry insofar as the vic-
tims of past unfair labor practices are concerned, or
the need for remedying those unfair labor practices.
Appropriate steps must still be taken if the effects
of the unfair labor practices are to be erased and all
employees reassured of their statutory rights. And it
is the successor who has taken over control of the
business who is generally in the best position to
remedy such unfair labor practices most effective-
ly." Perma Vinyl Corporation, Dade Plastics Co. and
United States Pipe and Foundry Company, 164
NLRB 968.
The employing enterprise in this case having vio-
lated Section 8(a)(5), I would presume the con-
tinued majority status of the employees' bargaining
representative at least until the employees are af-
forded a reasonable opportunity, heretofore denied
them, to vindicate their bargaining rights under the
Act.' Until such time, in my opinion, the erosion of
the Union's majority status is irrelevant in the cir-
cumstances of this case.
I would find that Maalouf violated the Act as al-
leged and issue an appropriate bargaining order.
MEMBER ZAGORIA, dissenting in part:
I would not find a violation of Section 8(a)(5) in
this case.
In recent decisions`' the Board affirmed that the
burden of producing evidence of an employer's bad
faith is upon the General Counsel. In my opinion,
that burden was not met in this case. The Board
majority finds that Ramada's failure to recognize
the Union was in bad faith,"' based almost entirely
on Ramada's failure to respond to the Union's de-
mand during the 2 months from the time the de-
' Sec Oieimit' 1,anspauation Cinnpati % N L R B. 372 F 2d 765, 768
(C.A 4), and cases cited therein , K. B &J Young's Super Markets, Inc v
N L R B, 177 F 2d 461 (C A 9), cf Noma I'unl ('uipaianon. Dade
Plaito, C'o. and United 1uuFi Pipe and Found, i Cminipant, 164 NLRB 968
" Franks Bioi C'oinpain % N L R B .321 U S 702,703-705
9H & W Construction Co., Inc, 161 NLRB 852, Aaron Brothers
Company of California, 158 NLRB 1077; John P. Serpa, Inc., 155
NLRB 99, reversed and remanded 376 F.2d 186 (C.A 9)
"' I agree %%ith the malor:t that Ramada .it no time e\tended recognition
to the Union
1066 DECISIONS OF NATIONAL
mand was made until the date the Union filed un-
fair labor practice charges. In short, its proof lies in
Ramada's inaction . I do not believe this is enough.
During that entire period the Board 's election
processes were available upon the filing of a peti-
tion. There is no indication that Ramada had re-
jected the principle of collective bargaining . It com-
mitted no unfair labor practices, nor is there
evidence that it acted in any way to undermine the
Union, dissipate its support among the employees,
or otherwise render a fair and free election impossi-
ble. To require Ramada, in the circumstances, to
take immediate affirmative action to respond to the
Union's demand or be found guilty of bad faith, as
the majority does, in my view is contrary to the pol-
icies of the Act. I would, therefore, find that a pre-
ponderance of the evidence fails to establish that
Ramada refused to bargain in good faith in viola-
tion of Section 8(a)(5).
As I would find that Ramada did not violate the
Act, I would a fortiori find, without reaching the
successorship issue , that Maalouf did not violate
Section 8(a)(5) by refusing to bargaining with the
Union, which, as far as the evidence shows, never
represented a majority of his employees.
Accordingly, I would dismiss the complaint in its
entirety.
APPENDIX
NOTICE TO ALL EMPLOYEES
Pursuant to an order of the National Labor Rela-
tions Board and in order to effectuate the policies
of the National Labor Relations Act, as amended,
we hereby notify our employees that:
WE WILL NOT refuse to bargain collectively
with any union which represents a majority of
the restaurant employees in an appropriate
unit concerning rates of pay, wages, hours of
employment, and other conditions of employ-
ment, if we ever again resume operations of
the restaurant, Ramada Inn, located in River-
side, California.
WE WILL NOT in any like or related manner
interfere with, restrain, or coerce our em-
ployees in the exercise of rights guaranteed by
Section 7 of the Act.
RAMADA INNS, INC.
(Employer)
Dated By
(Representative ) (Title)
LABOR RELATIONS BOARD
This notice must remain posted for 60 consecu-
tive days from the date of posting and must not be
altered, defaced, or covered by any other material.
If employees have any question concerning this
notice or compliance with its provisions, they may
communicate directly with the Board' s Regional
Office, Eastern Columbia Building , 849 South
Broadway, Los Angeles, California 90014,
Telephone 688-2200.
TRIAL EXAMINER 'S DECISION
STATEMENT OF THE CASE
GEORGE CHRISTENSEN, Trial Examiner: On June
9, 1966, a consolidated amended complaint' issued
alleging violation of Section 8(a)(1) and (5) of the
National Labor Relations Act, as amended
(hereafter the Act), by Respondents Ramada Inns,
Inc. (hereafter Ramada), Victor Maalouf (hereafter
Maalouf), and Lee Sigloch, d/b/a Ramada Inn
(hereafter Sigloch).2 The Respondents denied the
commission of any unfair labor practices. Hearing
was held on July 1 1 and August 23, and 24, 1966,
at Los Angeles, California. All parties appeared by
counsel and were afforded full opportunity to ad-
duce evidence, examine and cross-examine wit-
nesses , present argument, and submit briefs.' Based
upon a review of the entire record, observation of
the witnesses, and perusal of the briefs, I make the
following:
1. FINDINGS
A. Jurisdiction (Ramada)"
Respondent Ramada, a Delaware corporation
with its executive offices in Phoenix, Arizona, is-
sues franchises to and operates restaurants and
motels throughout the United States. In the con-
duct of its business it annually sells to customers
food and beverages valued in excess of $500,000,
purchases and causes to be transported across state
lines to its restaurants food, beverages, and sup-
plies valued in excess of $50,000. Respondent
Ramada concedes, and the Trial Examiner finds,
that Ramada at all times material herein has been
and is an employer engaged in commerce and in a
'The Charging Part) (hereafter the Union) tiled a refusal-to-hargain
charge against Ramada in Case 2l-CA-6913 on September 30, 1965 and
a complaint based upon that charge issued on December 7 1965 On
March Ill, 1966, the Union filed a similar charge against Ma,douf and
Sigloch as successors to Ramada in Case2 I-CA-7l 15
1 Immediately following completion of the presentation of his case-in-
chief, the General Counsel moved to strike from the consolidated com-
plaint all allegations charging Sigloch with the commission of any unfair
labor practices, in recognition of the fact he had not presented an)
esidence in support of such allegations The motion %as granted Ac-
cordingly, no findings shall he entered thereupon
Bricts %%ere filed b) the General Counsel and Maalouf
At this point findings shall he made with respect to Ramada only
RAMADA INNS, INC.
business affecting commerce within the meaning of
Section 2 ( 2), (6), and (7) of the Act.
B. Labor Organization
A business representative of the Union, Thomas
Jones , testified without contradition that the Union
accepted and accepts employees of restaurants and
cocktail lounges in the Riverside , California, area
into membership and engaged and engages in col-
lective bargaining on their behalf with their em-
ployers for the aim and purpose of improving their
wages, hours, and conditions of employment. I find
that the Union at all times material has been and is
a labor organization within the meaning of Section
2(5) of the Act.
C. The Unfair Labor Practices ( Ramada)
1. Background and issues
In the month of June 1965 a motel-restaurant
commenced operation in Riverside, California,
under the name of Ramada Inn, located at 8th
Street and the Freeway (at the intersection of
Highways 395 and 60). The motel-restaurant was
owned and built by a partnership known first as Lit-
tle-Mac and later as Dee-Mac, composed of Walter
L. McCubbin and Olin H. and Delia F. Little. The
partnership owned and operated other motel-
restaurants under the Ramada name pursuant to
franchise agreements with Ramada and such
franchise agreement was extended to cover the
newly completed motel-restaurant at Riverside
(hereafter Ramada-Riverside).
Prior to completion of Ramada-Riverside, Mc-
Cubbin on behalf of the partnership executed a 5-
year lease agreement with Ramada dated Sep-
tember 25, 1964, wherein Ramada leased those
portions of Ramada-Riverside identified as the cof-
feeshop, dining room, restaurant, kitchen, cocktail
lounge or bar, banquet room, and other food and
beverage facilities for the purpose of operating
same. The lease was to commence on the date
Ramada began operation of the leased facilities.
This agreement was executed by Ramada to aid Lit-
tle-Mac in its construction and mortgage financing.
On June 22, 1965, Ramada prepared a communi-
cation to McCubbin wherein it notified McCubbin
it was canceling the leasehold on the ground
Sigloch, who had assumed operation of the motel
section of Ramada-Riverside on or about June 15,
1965, had refused to comply with that portion of
the lease agreement granting Ramada exclusive use
of the banquet room. In a subsequent telephone
conversation with McCubbin however, McCubbin
prevailed upon Ramada to refrain from cancella-
tion until he could secure another operator.
On July 15, 1965, Ramada commenced opera-
tion of the dining, cocktail, and banquet facilities at
Ramada-Riverside.
1067
On July 28, 1965, McCubbin, on behalf of Little-
Mac, executed a 20-year lease agreement with Lee
A. and Norma J. Sigloch, wherein Sigloch leased
the entire premises , including both the motel and
the restaurant facilities. Sigloch accepted and con-
tinued Little-Mac's lease of the restaurant and re-
lated facilities to Ramada.
Ramada commenced its operations at Ramada-
Riverside with 34 employees; however, between
July 15 and July 22, 1965, 5 employees (James
Henson, Dorothy Rogato, Louis Rogato, Learned
Thema, and Floyd Wilson) left its employ , leaving
29 employees as of July 22, 1965. Another em-
ployee (Dennis Jirsooda) left the next day, July 23,
1965, and 2 more (Jack Olsen and Mike
Reinemund) left the following day, July 24, 1965,
leaving 26 employees on the payroll as of July 3 1,
1965.
The Union commenced its organizational drive
among Ramada's employees at Ramada-Riverside
on July 14, 1965, when the employees reported for
instructions (one day prior to the opening of the
restaurant facilities). The Union collected 15
authorization cards from the 26 employees who
remained in the employ of Ramada at Ramada-
Riverside through July 31, 1965. Respondent
Ramada conceded the validity of the signatures on
the authorization cards on the basis of its com-
parison of the card signatures with signatures by the
same employees on the Company's W-4 forms as to
all signatures but Mary Kearney (kearney's W-4
form was not available). However, Union Business
Representative Coggins' testimony that he per-
sonally secured Mary Kearney's signature on the
date shown on the card was uncontradicted.
While the validity of the signatures on the 15
authorization cards is not challenged, it is argued
that the authorization cards of Helen Grabinski,
Peggy Gren, and Tulu Demetrulius were not signed
on the dates which appear on the cards but a later
date; in the case of Grabinski and Gren, not on July
20 and 21, 1965, respectively, but rather sometime
in August 1965; in the case of Demetrulius, not on
July 14, 1965, but rather sometime between July 23
and 31, 1965.
Respondent Ramada moved at the close of the
General Counsel's presentation of his case-in-chief
to dismiss the complaint against Ramada on the
ground the Union did not represent a majority of its
employees in an appropriate unit on July 22, 1965,
the date the Union made its first request for recog-
nition, which motion was denied on the ground the
Union's request for recognition was a continuing
request and thus, even assuming the Union did not
represent a majority on July 22, 1965, it shortly
thereafter acquired the necessary majority in the
declining work force. Respondent Maalouf renews
this contention in its brief.
Numerous direct and telephone conversations
occurred between representatives of Ramada and
the Union between July 22 and September 30,
1068 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
X1965, upon which the General Counsel relies as
proof of Ramada's recognition of the Union's status
as exclusive collective-bargaining agent of a majori-
ty of its Ramada-Riverside employees in an ap-
propriate unit; Ramada denies both that at any time
it so recognized the Union and that at any time it
failed to bargain in good faith.
A second issue is, assuming the Union was the
duly selected agent of a majority of Ramada's em-
ployees in an appropriate unit at Ramada-River-
side, did Ramada so recognize the Union. Making
the same assumption just set forth, a third issue is
whether or not Ramada failed or refused to bargain
in good faith with the Union concerning the wages,
hours , and working conditions of its employees in
the unit.
2. The unit
Ramada hired 34 employees between July 14 and
31, 1965, and also assigned one of its employees,
.Richard Fields, to act as "Food and Beverage
Manager ." Fields testified , and Ramada conceded,
that he was in sole and complete charge of
Ramada 's operations at Ramada-Riverside , and that
the 34-man work force was under his direction, su-
pervision , and control. Fields further testified that
the work force ( and subsequent replacements or
additions ) consisted of employees in the classifica-
tions of chef, cook, dishwasher , waitress , busboy,
hostess, cashier , hostess-cashier , and bartender.
On July 7, 1965 (prior to the hire of any em-
ployees or commencement of operations at
Ramada-Riverside by Ramada), Thomas S. Jones, a
business agent for the Union, contacted Fields and
offered to supply employees for the Ramada-River-
side operation through the union hiring hall. On
July 8 (still prior to any hire or operations) Jones
and Vada Perrigo, the Union's secretary-treasurer,
met with Fields, supplied him with a copy of the
Union's standard contract, and discussed the con-
tract terms. On July 14 Jones and another union
business agent , Jay Coggins, met again with Fields
and his immediate superior in the Ramada or-
ganization, and again the Union's standard contract
was discussed. On July 14 Ramada had most of its
employees assembled to receive instructions and on
July 15 it commenced operations. On July 22 Jones
informed Fields that "we were sure of our position
and that we had our authorization cards signed and
that we would like to make an agreement with the
coffee shop Ramada Inns." Fields demurred on the
ground he did not believe he had the necessary
authority to sign an agreement. On August 3 Fields
informed Jones he definitely did not have authority
to negotiate any agreement and referred Jones to
George Thiel at the Phoenix office. Jones called
Thiel and was referred to Ramada's house counsel,
William Lindgren. Lindgren advised Jones he knew
of the proposed contract but that it would have to
be acted upon by the Board. A further call by Jones
to Lindgren produced no new information, except
that Lindgren agreed with Jones' suggestion that
Jones send him a copy of the exact agreement the
Union wanted Ramada to sign.
On August 16 the Union's secretary-treasurer
sent a letter to Lindgren which recited, inter alia:
As per your telephone conversation with my
Business Representative Mr. Tom Jones on the
afternoon of August 10, 1965, I am herewith
enclosing (4) four copies of our agreement
which we have signed and are submitting for
your execution. It will be necessary for you to
return two (2) of the signed copies for our
files.
We have authorization for representation from
(18) eighteen of your employees from your
Food and Beverage Department at the Ramada
Inn in Riverside, California. A majority of
these employees are members of Culinary
Workers and Bartenders Local #535.
The contracts enclosed with the August 16 letter
were identical to the contract furnished to Fields
and discussed with Craig (and with which Lindgren
indicated familiarity on August 3) insofar as all
contained a provision that "The Employer hereby
recognizes the Union as the sole collective bargain-
ing agent for all his employees employed in the
classifications listed in Exhibit A attached hereto
and by this reference incorporated herein"; and an
Attachment "A" containing, inter alia, a listing of
the job classification enumerated by Fields as em-
ployed by Ramada at Ramada-Riverside between
July 15 and 31, 1965, and subsequently within the
food and beverage department of Ramada at
Ramada-Riverside.
Based upon the foregoing I find that on July 22,
1965, and at all times subsequent, the Union was
requesting recognition as the exclusive collective-
bargaining agent of all employees of the food and
beverage department of Ramada employed at
Ramada-Riverside in the classifications heretofore
enumerated (chef, cook, bartender, busboy,
waitress , hostess, cashier , hostess -cashier , and dish-
washer), and excluding all supervisors and others as
defined in the Act. I further find that the group of
employees requested constitutes a unit appropriate
for purposes of collective bargaining within the
meaning of Section 9(b) of the Act.
3. The Union's majority
As heretofore noted, there is no challenge to the
validity of the signatures of all 15 employees sub-
mitted in support of the Union's claim of majority
representation. The sole challenge is to the dates of
execution of 3 of the 15 cards.
The card of Demetrulius is dated July 14, 1965.
Business Representative Coggins testified he
secured the signed and dated card from Demetru-
lius at the Ramada-Riverside coffeeshop on July 14,
1965. Respondent witness Jane Belk testified that
RAMADA INNS, INC.
Demetrulius was not working on July 14, 1965, that
Demetrulius replaced Ann Parkinson , who worked
3 days, and that Demetrulius therefore started work
"the following Monday, after we opened , or the fol-
lowing week." Belk would thus place Demetrulius'
initial employment date at Monday , July 19, 1965.
The card of Grabinski is dated July 20, 1965.
The card of Gren is dated July 21, 1965 . Coggins
testified he received the signed and dated cards
from Grabinski and Gren on the dates indicated at
the Ramada -Riverside coffeeshop . Belk testified
that immediately prior to the date Louis and
Dorothy Rogato left Ramada 's employment she in-
formed Coggins that she had not been able to get
the signatures of Grabinski and Gren to union
authorization cards, and he replied he would talk to
them . She fixed this conversation as occurring in
early August , on the ground a buffet was not
started until early August and the Rogatos were still
employed there when the buffet was set up.
The payroll records for the period of July 14-3 1,
1965, and a stipulation between Ramada and the
General Counsel disclose , however, that the
Rogatos left the employ of Ramada on July 21,
1965.
A union record maintained in the regular course
of business at the Union 's business office listing the
names of the Ramada -Riverside employees who
had signed union authorization cards , which Cog-
gins consulted and upon which he relied prior to his
(July 22 , 1965 ) request for recognition , contained
the names of Demetrulius , Grabinski, and Gren. An
examination of the signatures and dates on the
three cards in question disclose that in each case
the two entries appear in the same hand.
Based upon the foregoing , it is my finding that
Coggins' testimony shall be and is credited and it is
my further finding that the cards of Demetrulius,
Grabinski , and Gren were executed prior to July
22, 1965, the date upon which the Union made its
first request for recognition.
As set forth heretofore, on July 22, 1965,
Ramada employed 29 employees in the unit sought
by the Union ; since I have found that on that date
the Union had in its possession valid authorization
cards executed by 15 of those 29 employees, I
further find that on July 22, 1965, the Union
represented a majority of the employees in the unit.
Even if one were to credit Belk's testimony that
she informed Coggins shortly before the Rogatos
left Ramada 's employ that she was unable to secure
the signatures of Grabinski and Gren , since it is
stipulated that the Rogatos left Ramada's employ-
ment on July 21 and the cards in question are dated
July 20 and 21, respectively, it appears that such
conversation would have occurred prior to July 21
and that Coggins acted upon it and succeeded in
securing the signatures on the dates which appear
on the respective cards.
Discounting Demetrulius ' card , this would mean
that the Union did not have a majority in the unit
1069
on July 22 , 1965. However , the unit declined to 26
employees by July 2 4, but still included the 14 em-
ployees ( not counting Demetrulius ) who had ex-
ecuted valid authorization cards . It is thus clear that,
inasmuch as the Union continued in its assertion of
majority representation of Ramada 's food and
beverage department employees at Ramada -River-
side and its demand for recognition as their collec-
tive-bargaining representative subsequent to July
22 (witness its August 16 letter set out heretofore
and oral conversations set forth elsewhere in this
report ), certainly by July 24 the Union represented
a majority (14) of the 26 employees in the unit, and
I so find . See Sylgab Steel & Wire Corp., 162 NLRB
303.
4. Recognition and refusal to bargain
It is clear from the evidence that at no time sub-
sequent to the Union 's initial request for recogni-
tion and bargaining did Ramada question the
Union 's majority or the appropriateness of the unit
sought ; on the contrary , it appears that Ramada
throughtout the period of its operation of the
Ramada-Riverside restaurant by its overt conduct
conveyed to the Union that it accepted the Union's
majority status , the appropriateness of the unit, and
the terms of the Union 's contract proposal , but that
all the time it conveyed this impression it actually
intended to refrain from entering into any binding
commitments.
This deliberate and planned program clearly
emerges upon an examination in chronological
sequence of the exchanges between the parties dur-
ing Ramada 's operation of Ramada -Riverside (July
15, 1965-January 5, 1966).
On July 7 , 1965, Jones of the Union contacted
Fields ( Ramada's manager of Ramada -Riverside),
advised Fields that the Union 's dispatching service
was available to him if he desired employees and
asked for an appointment to discuss union condi-
tions in the area . They made an appointment for
the following day.
On July 8, Jones and Secretary-Treasurer Perrigo
of the Union met with Fields and explained to
Fields the health and welfare program of the Union,
gave him a copy of the Union 's standard agreement
for the area and discussed its terms . Perrigo asked
Fields if he could execute an agreement with the
Union and was informed by Fields that he would
need a letter of authorization from Ramada's
headquarters , which he would obtain.
Ramada commenced operations of its Ramada-
Riverside location on July 15 but had its employees
present for instructions on July 14 . On July 14
Jones and Coggins of the Union contacted Fields
and his superior, Bernard Craig ( regional super-
visor for Ramada), at Ramada-Riverside. Jones and
Coggins discussed the terms of the standard agree-
ment with Fields and Craig . During the course of
the discussion , Craig informed the union represent-
1070 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
atives that Fields did not have authority to negotiate
the agreement and that "this would have to come
from Phoenix."
On July 22 Jones informed Fields that the Union
represented a majority of Ramada 's employees at
Ramada -Riverside and stated the Union desired an
agreement with Ramada covering them . Fields
responded that he did not have any authority to
sign an agreement and asked that Jones return in a
week and Fields would have more information for
him.
On August 3 Jones returned and asked Fields if
he had any information on the agreement . Fields
stated it would have to be negotiated with Phoenix.
Fields advised Jones that questions had been raised
concerning the scope of coverage of the agree-
ment-that Ramada operated restaurants at Palm
Springs and Indio, California (which would be
within the jurisdictional area covered by the
Union ), that the three houses operated differently,
and that Ramada wanted to be sure the agreement
would be limited to Ramada -Riverside . Fields then
gave Jones the address and phone number of
George Thiel in Phoenix ( Thiel was the superior of
both Fields and Craig in Ramada's food and
beverage department ). That same day, Jones
telephoned Thiel . 5 Thiel told Jones to contact
Ramada 's house counsel at Phoenix , William
Lindgren, that Lindgren handled labor negotiations.
Jones testified that on August 4 he reached
Lindgren on the telephone , recited his various con-
versations with Fields and Thiel , asked Lindgren if
he was familiar with the agreement the Union had
furnished Fields on July 8, and that Lindgren
replied that he knew of the agreement but that it in-
volved an issue of company policy and would have
to be submitted to Ramada 's board of directors the
following Monday ( when a meeting had been
scheduled ) and suggested Jones call him back the
middle of the following week . Jones further
testified that he did call back on August 10 and was
informed by Lindgren that the board had not taken
up the issue , that Lindgren then requested that the
Union send him an agreement containing the exact
terms desired by the Union and said that in about a
week he would have some information for Jones.
Jones also testified that Lindgren informed him
Ramada was only interested in negotiating concern-
ing the Ramada-Riverside location , and no others,
which he accepted.
Lindgren testified that in the first conversation he
merely informed Jones that he did not know
anything about Ramada-Riverside and would check
his file , but verified that in his second conversation
with Jones about a week later (August 6 ) he told
Jones that Ramada-Riverside was not one of
Ramada 's customary operations, that Ramada was
operating Ramada-Riverside as an accommodation
to McCubbin (of Dee-Mac), a franchise of Ramada
at several locations, that he was not sure Ramada
was the proper party to deal with the Union under
those circumstances, and that it would require a
management policy decision by Ramada's board of
directors at its meeting scheduled shortly
thereafter. Lindgren conceded that he asked the
Union to forward its proposed agreement, but
stated this was at the suggestion of the Union and
that he agreed "because the contract itself may be
pertinent toward resolving the matter."
Following his August 10 conversation with Jones
and prior to leaving on vacation about August 14,
Lindgren attempted to secure a decision from
Ramada's management but was unable to secure
one because of their inability to get in touch with
McCubbin to find out how they stood with McCub-
bin. Lindgren returned from his vacation approxi-
mately August 30.
In the interim (on August 16), the Union sent
four executed copies of its proposed agreement
covering Ramada's employees in the Ramada-
Riverside unit with a cover letter reasserting its
claim of majority representation in the unit and
requesting that Ramada in turn sign the agreements
and return two of them to the Union, retaining the
other two for its files.
On August 18 the Union received a letter from
Ramada stating that Lindgren was on vacation and
would communicate upon his return.
On August 20 Jones called Thiel and asked if
anyone other than Lindgren could continue
negotiations. Thiel replied that only Lindgren could
handle the matter.
Jones testified that on August 31 he telephoned
Lindgren and asked him whether he had received
the agreements; that Lindgren replied he had; that
Jones asked whether any action had been taken on
the agreements; that Lindgren said no, there had
not been any action taken; that Jones asked if
Lindgren had any objections to any particulars of
the agreements; that Lindgren replied no, he did
not; and that Lindgren closed by saying he had a
very busy schedule and suggested that Jones con-
tact him in a few weeks. Lindgren verified that he
told Jones that "I found nothing clearly objectiona-
ble in the contract," that he had just returned from
vacation and was snowed under, and that he sug-
gested that Jones contact him at a later date.
Jones next called Lindgren on September 13. In
the interim, Lindgren stated that someone within
Ramada had talked to McCubbin and McCubbin
had advised Ramada that he had secured a party to
take over the restaurant operation at Ramada-
Riverside and McCubbin expected he would con-
"The Union produced telephone bills which verified that Jones placed
calls to Ramada 's Phoenix office on this and the dates subsequently
discussed in this report Jones testified concerning the telephone conversa-
tions from memoranda he prepared from notes taken in conjunction with
each conversation
RAMADA INNS, INC.
summate the transaction within the next week or
two.
Jones testified that on September 13 Lindgren
simply reiterated that he had been very busy, that
no action had been taken yet, and suggested a later
call. Lindgren, on the other hand, testified that he
advised Jones the circumstances regarding McCub-
bin and that, because of the uncertainty of their
tenure at Ramada-Riverside, Ramada was unable to
resolve anything with the Union, that it just did not
seem to him that Ramada should be doing any
negotiating when its operation at Ramada-Riverside
undoubtedly would terminate in the near future.
Lindgren further testified that Ramada had contem-
plated entry into a contract with the Union limited
to the duration of Ramada's continued operation of
Ramada-Riverside, but that this idea was aban-
doned because it might bind Ramada's successor.
Jones denied that Lindgren at any time men-
tioned the possibility or probability that Ramada
would cease operations at Ramada-Riverside either
to him or any other representative of the Union. He
testified that he called Lindgren again on Sep-
tember 17 threatening to file unfair labor practices
and Lindgren then informed him that Ramada was
in the process of setting up a personnel department
which would handle labor relations, that this field
of labor relations was really outside his realm.
Jones testified that Lindgren at no time subsequent
called the Union.
Lindgren on the other hand testified he called
Perrigo on about September 20 and told her that
"we still had not been able to determine the per-
manency of our tenancy in Riverside, and as a
result, we simply were not in a position to resolve
or to deal in any definite way with the Union."
On September 30 the Union filed charges of
refusal to bargain against Ramada.
On October 28 Lindgren sent a letter to the Re-
gional Office stating, inter alia, that:
We took over operation of the restaurant in
question strictly as an accommodation to the
hotel owner and only on a temporary basis
until the owner had time to work out a sale of
the premises. . . Because of the anticipated
divestiture, we have felt it would be improper
and unfair to all concerned for us to negotiate
with any parties on a long-term basis, including
any unions ....
Jones testified the Union received its first intima-
tion that Ramada was terminating its Ramada-
Riverside operation upon its receipt of Ramada's
December 16, 1965, answer to the complaint issued
on its September 30 charge (complaint issued
December 7, 1965), that he then investigated with
the liquor licensing authorities to verify the change,
"The issue of whether Ramada violated Section 8(a)(5) and (I) of the
Act by failing to notify and bargain with the Union concerning the
economic impact on the employees of Ramada's divestiture of the business
was neither alleged nor litigated in the proceeding, so no findings shall be
made thereon
1071
but found the liquor license was still registered to
McCubbin; and that the Union was unable to con-
firm the allegation of a change in the operator of
Ramada-Riverside until Fields informed Jones on
or about January 2, 1966,6 that Victor Maalouf was
taking over the operation shortly thereafter
(Maalouf assumed control on January 6).
The testimony of Ramada's chief witness,
Lindgren, establishes that throughout the period
July 22-September 30, 1965, Ramada at no time
disputed the Union's majority representative status
in the unit , that Ramada discussed and clarified the
Union's contract proposals, that Ramada informed
the Union it had no objection to the terms of those
proposals (which included a recognition provision),
and that Ramada went through all the commonly
accepted procedures for recognition and bargaining
save one-execution of the contract if found
nonobjectionable as to terms-because of its inten-
tion throughout to withhold that final act in order
to avoid binding its successor.
Lindgren's testimony discloses that he was
Ramada's sole agent for the purpose of dealing with
the Union; that he did not question' the Union's as-
sertion of majority representative status in the unit
of Ramada's food and beverage department em-
ployees at Ramada-Riverside (excluding Fields and
the musician, an independent contractor); that he
agreed with the proposal that the Union send him
its complete contract offer covering the wages,
hours, and working conditions of the employees in
the unit; that he clarified that the recognition provi-
sion would be limited in coverage to Ramada-
Riverside and would not extend to Ramada-Indio
and Ramada-Palm Springs; that he informed the
Union that he did not have any objections to the
terms of the contract offer; that he considered the
idea of amending the duration provision to limit it
to the period of time Ramada continued to operate
Ramada-Riverside but abandoned the idea because
Ramada had the fixed intention throughout not to
execute the contract inasmuch as Ramada intended
to divest itself of the operation and did not wish to
bind its successor.
Thus Lindgren corroborated most of the material
aspects of the testimony of Jones, the Union's prin-
cipal spokesman, with regard to the exchanges
between them. In one material aspect, however,
Lindgren differed with Jones-Lindgren testified
that Ramada assumed the Ramada-Riverside opera-
tion as an accommodation to McCubbin and only
on a temporary basis until another operator could
be found, that in the course of their conversations
he advised the Union of this and of Ramada's ex-
pected divestiture and short tenure; Jones testified
that Ramada never so advised the Union and that
' Contrary to Ramada's assertions the Union was not under any duty af-
firmatively to demonstrate its majority status in the unit in the absence of
any challenge thereto by Ramada (N L R B v Trunft of California, /nc
211 F 2d 206 , 2 10 (C A 9))
1072 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
the first notice the Union received concerning the
change in ownership and operation came from
Fields on about January 2, 1966, about 3 days be-
fore the actual transfer.
Ramada's leasehold was for a 5-year term;
Ramada purchased and installed a considerable in-
ventory, hired a full staff of employees, assigned a
manager , contracted for a musician, and com-
menced full operation of a restaurant and cocktail
lounge in July 1965; Lindgren's conversations with
Jones took place in August and September 1965;
Sigloch, not McCubbin, located another operator,
entered into a sublease agreement with him in late
December 1965 and agreed therein to give the new
operator possession as soon after January 1, 1966,
as Ramada could be removed; Sigloch purchased
Ramada's inventory and subsequently sold it to
Maalouf.
Ramada's motive for its nondisclosure to the
Union of its intention to divest itself of the business
as soon as possible after commencing same and ef-
forts so to do may readily be inferred from the un-
contradicted facts set forth heretofore-to lull the
Union into believing Ramada was bargaining in a
good-faith effort to achieve a contract satisfactory
to both (and to which Lindgren said he had "no ob-
jections"), with the objective of persuading the
Union to forbear from taking direct economic ac-
tion (such as striking or picketing) and thereby in-
flicting economic losses upon Ramada in its opera-
tion. There is no question the Union did desist from
such action and that the Union reasonably believed
that Lindgren was bargaining with it in good faith
to the end of establishing a mutually satisfactory
relationship and agreement.
On the basis of the foregoing, I discredit
Lindgren's testimony that he advised the Union that
Ramada was merely accommodating McCubbin on
a temporary basis and expected shortly to divest it-
self of the business and credit the testimony of
Jones that the Union did not receive notice of the
change in ownership until so informed by Fields on
or about January 2, 1966.
Even though Ramada expected its tenure at
Ramada - Riverside to be short, the fact an employer
so believes does not relieve him of the duty to bar-
gain with the representative of a majority of his em-
ployees in an appropriate unit upon request
therefor while he is still operating the business (cf.
Minute Maid Corporation, 124 NLRB 355,
358-359). The duty does not vary in proportion
with the expected tenure of the business, but is con-
stant.
I find on the basis of the foregoing that between
July 22 and September 17, 1965, Ramada did
recognize and bargain with the duly selected
representative of a majority of its employees in an
appropriate unit concerning their wages, hours, and
conditions of employment, but that Ramada did not
bargain in good faith with respect thereto and
thereby violated Section 8(a)(5) and (1) of the
Act.
D. The Unfair Labor Practices (Maalouf)"
1. Background and issues
On December 29, 1965, Maalouf and Sigloch ex-
ecuted a sublease agreement wherein Maalouf was
to assume possession and operation of the premises
and business occupied and operated by Ramada as
soon after January 1, 1966, as possession could be
obtained. That same date Little-Mac approved the
Sigloch-Maalouf sublease and agreed to honor the
sublease in the event the Little-Mac-Sigloch lease
covering the entire premises were to cancel or
otherwise terminate. Sigloch, Little-Mac, and
Ramada mutually agreed to cancel the Little-Mac-
Ramada leasehold, Ramada relinquished possession
of the premises on January 5, 1966, and Maalouf
assumed possession and operation on January 6,
1966.
While Maalouf has occupied the premises and
operated the business formerly occupied and
operated by Ramada continuously since January 6,
1966, between January 6 and May 18 he
represented to the Union and to the Regional Of-
fice of the Board that he was only the manager and
not the owner and operator of the business.
On January 20 and February 10, 1966, the Union
contacted Maalouf, informed him of the Union's
preexisting dispute with Ramada, and sought con-
firmation from Maalouf that he was the new owner
and operator of the business. Maalouf denied that
he was the owner and operator. Shortly after the
February 10 meeting, the Union received informa-
tion from the Bank of America that Maalouf was
the owner and operator of the business pursuant to
the Sigloch-Maalouf sublease, which was in escrow
there. Based upon this information, on March 3 the
Union addressed a letter to Maalouf asserting its
continued majority representation in the unit,
requesting continued recognition as such majority
representative and requesting collective bargaining
concerning the wages, hours, and working condi-
tions of the unit employees. Maalouf made no
reply. Uncertain of the actual ownership (Maalouf
at one stage told the Union he was only a manager
of the business for Sigloch), on March 10 the Union
filed refusal-to-bargain charges against Maalouf and
Sigloch.
At a subsequent May 18 contact with the Union,
Maalouf conceded that he was the actual owner
and operator of the business" and entered into
Findings under this heading shall be confined to Maalouf acquired cnvenship in late April and a liquor license in early May, and
Maalout testified that he denied his ownership prior to May 19 because then felt free to disclose his ownership (between January and May he sold
he could not procure a liquor license until he attained U S. citizenship, he liquor on the strength of McCubbm's liquor license)
RAMADA INNS, INC.
discussions with the Union of the terms and condi-
tions of its health and welfare program and stan-
dard contract . He met with the Union several times
thereafter, but in June 1966 ceased to meet with
the Union and ignored its requests for further
meetings.
Jones testified that during their several discus-
sions Maalouf never raised any question concerning
the Union's majority status . Maalouf testified that
he questioned Jones' statement that the Union
represented a majority of his employees.
Maalouf argues that he is not Ramada's successor
and therefore is not subject to any duty to bargain
with the Union under the Act; Maalouf also argues
that the volume of his business does not meet the
minimum jurisdictional standards for restaurant-
cocktail lounge establishments and therefore the
Board should not assert jurisdiction over him;
finally, he argues that he has not failed or refused
to bargain with "a duly authorized representative of
a majority of the employees in an appropriate
unit."
The issues with regard to Maalouf thus are
threefold: (I) is Maalouf a "successor" of Ramada
within the meaning of Section 8(a)(5) and (I) of
the Act; (2) shall or should the Board assert ju-
risdiction over Maalouf; and (3) did Maalouf fail or
refuse to bargain with the representative of a
majority of his employees in an appropriate unit.
The successor, refusal to bargain, and jurisdic-
tional issues shall be discussed in that order.
2. Maalouf as Ramada's successor
Maalouf contends that substantial changes in unit
personnel occurred when and after he took over
the business from Ramada, that there was no inter-
related management between him and Ramada and
therefore he is not a successor to Ramada within
the meaning and application of that term under
Section 8(a)(5) and (I) of the Act.
On January 6, 1966, Maalouf carried over 21 of
the 28 employees on Ramada's January 1-5 pa roll
and replaced the other 7 with new employees.' All
of Maalouf's 28 employees were in the same job
classifications and were performing the same work
previously performed for Ramada. Maalouf as-
sumed Field 's role of sole manager of the business.
There was no hiatus in the operation of the business
and no change in the name of the restaurant and
cocktail lounge nor in the type of business con-
ducted-the sale of food and beverages. Maalouf
continued to use the silverware , dishes , linens,
kitchen utensils, check pads, etc., previously used
by Ramada, purchased and used up Ramada's food
"' The question of w hether Maalours replacement of seven Ramada em-
ployees without notice to or discussion with the Union violated the Act was
neither alleged nor litigated so no findings shall he entered with regard
thereto In any event , Maalouf's testimony that he had no know ledge of the
Union's preexisting dispute with Ramada until January 20 is uncon-
tradicted
1073
and beverage inventory. While Maalouf added
some kitchen and bar equipment, converted one of
the banquet rooms to a dining room, added a dance
floor in the cocktail lounge , and employed two ad-
ditional musicians (as independent contractors), he
continued the same basic business-the sale of food
and beverages-with the name work and work
force.
The courts have on several occasions considered
the question of whether facts such as these make
the person who assumes the operation of a business
from a predecessor a "successor" for purposes of
Section 8(a)(5) of the Act and have defined the
standard to be applied as follows:
It is the employing industry that is sought to be
regulated and brought within the corrective
and remedial previsions of the Act in the in-
terest of industrial peace. [N.L.R.B. v. Hoppes
Manufacturing Company, 170 F.2d 962, 964
(C.A. 6)]; [The] crucial question ... is
whether the employing industry remains essen-
tially the same after the transfer of ownership.
[N.L.R.B. v. Auto Ventshade, Inc., 276 F.2d
303 (C.A. 5)]. In deciding this question we
necessarily deal in terms of succession of em-
ployment, and not succession of employers,
i.e., in terms of the continued nature of the
employment rather than the source of such
employment. [N.L.R.B. v. McFarland &
Hullinger, 306 F. 2d 219, 220 (C.A. 10).
To similar effect, N.L.R.B. v. Albert Armato and
Wire & Sheet Metal Specialty Co., 199 F.2d 800
(C.A. 7) and N.L.R.B. v. Arthur J. Colten d/b/a Kid-
die Kover Manuafacturing Company, 105 F.2d 179
(C.A. 6).
The Board has ruled in similar fashion."
Maalouf occupied the premises formerly occu-
pied by Ramada; he utilized the same dishware, sil-
verware , linens , tables, kitchen and bar equipment;
he purchased and used Ramada's food and
beverage inventory; he used the same check pads;
he assumed personal management of the business
from Fields, Ramada's manager. His work force
carried over unchanged in work and nature-chef,
cooks, dishwashers, bartenders, hostesses, cashiers,
hostess-cashiers , waitresses, and busboys. While the
"manager " changed, this was simply a change from
a paid manager to management by the owner him-
self. Maalouf continued the same business under
the same name.
On these facts, the employing industry remained
unchanged by the transfer, and I so find.
Maalouf next argues that under the decided
cases, a successor is not under a duty to bargain
with a union under Section 8(a)(5) and (I) of the
" Martin Marietta Corporation & At me Bni d ( o , 159 NLRB 905, Chent-
roid Corp , 151 NLRB 1074, Maintenance, he , 148 NLRB 1299. Roldid,
be , 145 NLRB 1236, Jo/union Read% Mit Co , 142 NLRB 437, Dow ntouun
Baden Corp , 139 NLRB 1352
1074 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Act unless the union either has been certified by
the Board as the exclusive representative of his
predecessor's employees in the unit or was party to
a contract with the predecessor. Counsel correctly
points out that this has been the situation in many
decided cases on this subject.
I do not believe the doctrine established by the
"successor" cases is inapplicable to this case simply
because the Union's majority was not established
either by a Board certification or by a contract with
the predecessor.
Maalouf took a calculated risk. If his contention
that the Union did not represent a majority of
Ramada's employees in the unit were sustained at
the hearing in this case , he could not be placed
under any duty as Ramada's "successor" to bargain
with the Union. He recognized the gamble he was
taking, for on June 17, 1966, his counsel rejected
the Union's request for continued bargaining with
the comment that "there wasn't any particular
reason to meet until the results of this hearing."
(Emphasis supplied.) Maalouf did indeed make his
strongest attack (both at the hearing and in his
brief) on the Union's claim that it represented a
majority of Ramada's employees in the unit.
The attack failed; I heretofore have entered my
finding that the Union did represent a majority of
Ramada's employees in the unit and thus this
defense by Maalouf falls, particularly where, as
here, I have entered the further finding that
Ramada recognized the Union as the representative
of a majority of its employees in the unit and bar-
gained with the Union concerning their wages,
hours, and working conditions, albeit that Ramada
did not so bargain in good faith.
Maalouf further argues that , assuming the Union
did represent a majority of Ramada's employees in
the unit, by the time Maalouf took over the busi-
ness , the Union no longer represented a majority
and therefore Maalouf was not under any "succes-
sor" duty to bargain.
The record discloses that between January 1 and
5, 1966, Ramada had 28 employees in the unit. Of
those 28, 9 had been employed since the Union's
initial request for recognition (July 22, 1965). Of
those nine, eight had executed valid union
authorization cards. Maalouf commenced his
operation of the business on January 6, 1966. His
initial unit work force number 28; 21 were carry-
overs from Ramada, and 7 were new hires. Of the
21 former Ramada employees, 612 had executed
authorization cards for the Union. The unit has sub-
sequently expanded. From these facts, Maalouf
would have me find that the Union at no time
represented a majority of Maaloufs employees in
the unit and therefore Maalouf was not under any
duty to bargain with it.
While the facts just recited disclose that there has
been substantial employee turnover within the unit,
without more, they neither prove the Union did not
have the support of a majority of the unit em-
ployees on January 6, 1966, nor the contrary.
This raises the question of whether the absence
of affirmative proof by the Union of its continued
majority status in the unit at any time subsequent to
January 6, 1966, relieves Maalouf of any duty to
bargain with the Union as Ramada's successor in
interest.
The Board has long adhered to the position that
once a union's majority in an appropriate unit has
been established, a presumption arises that such
majority status continues until it is shown to have
ceased. Whittier Mills Company, Inc., 15 NLRB
457, enfd. 111 F.2d 474 (C.A. 5); Old King Cole,
Inc., 119 NLRB 837, enfd. 260 F.2d 530 (C.A. 6).
The Board further has held that such presumption
is rebuttable; i.e., if an employer establishes that
after a reasonable period of time since the union's
achievement of majority representative status in the
unit (1 year after certification, in cases where the
Board has investigated and certified the union's
majority status)'3 he has a good-faith doubt of the
union 's continued majority (and proves by substan-
tial evidence of record he had valid ground for en-
tertaining such good-faith doubt prior to voicing
same ), and communicates such doubt to the union
as his reason for refusing further to bargain with it
pending proof of its continued majority, the em-
ployer's duty to bargain ceases unless and until
such majority is satisfactorily demonstrated
(Celanese Corp., 95 NLRB 664; Southerland Tenn.
Co., Inc., 102 NLRB 1178; Carter Machine and Tool
Co., 133 NLRB 247; Downtown Baking Corp.,
supra; Johnson Ready Mix Co., supra; Chemrock
Corp., supra; Martin Marietta Corp., supra). The
cited cases further hold that the mere fact changes
have occurred in the employee complement does
not destroy the presumption of the union's con-
tinued majority status in the absence of the raising
of a good-faith doubt by the employer with the
union under the conditions just set forth.
Findings have been entered heretofore that the
Union achieved majority status in a unit consisting
of Ramada's food and beverage employees on July
22, 1965, and that Ramada at no time subsequent
during its tenure (to January 5, 1966) challenged
the Union's majority status in the unit but rather,
on the contrary, accepted the Union's majority
representative status, recognized and bargained
with it (albeit in bad faith). Ramada at no time ex-
pressed to the Union any doubt as to its majority
nor produced any evidence upon which to base
such doubt. It would hardly have been reasonable
for Ramada so to do in any event, considering it
'Y One of these hit (Belk ) testified for Maalout and against the Union at
the hearing
11 Rai Brook%v NLRB.348U S 96.
RAMADA INNS , INC. 1075
relinquished operation of the business only a little
more than 5 months after the Union acquired and
asserted its majority status . I therefore find that the
presumption of the Union 's continued majority
status continued unchallenged from July 22
through January 5, 1966 . To hold otherwise would
permit Ramada to benefit from its own misconduct
( Franks Bros . Company v. N.L.R . B. 321 U . S. 702).
As to Maalouf, commencing on January 20, 1966
(when the Union first contacted him to confirm his
ownership of the business and to apprise him of its
labor dispute with his predecessor ), continuing
through the Union 's March 3, 1966 , notice of con-
tinued majority status and requests for continued
recognition and bargaining , and continuing on
through May 18, 1966 , Maalouf simply denied he
was the owner and operator of the business and on
this ground failed and refused to deal with the
Union.
Between May 18 and June 13 , 1966, Maalouf
corroborated the testimony of two representatives
of the Union that he met with them , discussed the
terms of the Union's health and welfare program
and the terms of the following provisions of its
standard contract: union security , employee re-
ferral , wages, meals, uniforms, and equal pay for
women ; with Maalouf raising questions and objec-
tions with regard to the union security , meals,
uniforms, and equal pay provisions.
Maalouf further testified, however, that between
May 18 and June 13, 1966, he asked the two union
representatives if the Union represented a majority
of his employees in the unit and was informed that
the Union represented a majority of the employees
in the unit when Ramada had the operation; and
that he then asked them how he would know
whether that was true and was assured that it was.
In response to a question from his counsel , Maalouf
further stated that as of August 24, 1966 (the date
of his testimony ), he was of the opinion that the
Union did not represent a majority of his employees
in the unit.
Maalouf also testified that he told the union
representatives that a number of the employees
(eight or nine ) told him they would quit if forced to
join the Union and that he consistently objected
through all the meetings to the inclusion of the
union -security ( union shop ) provision, which would
require those employees to become and remain
members of the Union , that he wanted to "give
them freedom to do what they want to do, and
some of the people want union , I am going to sign"
but that "they [ the union representatives] won't
take that paragraph."
The two union representatives denied that
Maalouf at any time questioned that the Union
represented a majority of the employees in the unit
during the time the restaurant was owned and
operated by Ramada and by Maalouf ( the Union's
statement of its continued majority representative
status in the unit and request for continued recogni-
tion and bargaining was set forth in the Union's for-
mal letter to Maalouf dated March 3 , 1966) but
confirmed that Maalouf consistently conditioned
his acceptance of the proposed contract on exclu-
sion of the union -security provision.
Even were one to credit the Maalouf statements
just set forth which were contradicted by the union
representatives ' testimony , it must first be noted
that they were made over 2 months after Maalouf
received the Union 's formal claim of continued
majority status and request for continued recogni-
tion and bargaining , and after the period ( January
20 to May 18 , 1966) during which Maalouf evaded
the Union on the basis of his false assertion that he
was not the owner and operator of the business.
In the case of Johnson Ready Mix, supra, the
Board stated at page 442:
We have found ... that the failure to bargain
occurred on June 11 . Consequently , it is im-
material and irrelevant to the issue herein that
a month after the refusal the Union stated it
was undertaking to organize the employees.
We therefore find no merit in this contention.
[Emphasis supplied.]
The Board thus held that an employer 's professed
good -faith doubt of a union 's majority representa-
tive status shall be disregarded when such professed
doubt was raised subsequent to the date he failed or
refused to bargain with the Union.
Maalouf received the Union 's formal claim of
continued majority representative status and
request for continued recognition and bargaining
on March 5 , 1966. By his admission , he ignored the
request and continued to evade the Union on the
basis of his false representation that he was not the
owner and operator of the business until he secured
his liquor license in early May 1966 . The earliest
date he could have professed his alleged doubt was
when he finally admitted his ownership and opera-
tion and commenced discussions of the Union's
proposed contract , on and after May 18, 1966.
It is clear then that the date of Maalouf 's initial
failure or refusal to recognize and bargain with the
Union based upon its claim of continued majority
status predates the first time he allegedly could
have raised any question concerning the Union's
majority . The rationale of the case just cited thus
renders such question irrelevant and immaterial as
to Maalouf 's duty to bargain , since that duty arose
and was evaded over 2 months earlier.
Even assuming, arguendo , the late raising of the
question were effective to extinguish the duty, the
language Maalouf allegedly employed does not ap-
pear to rise to the stature of a questioning based
upon substantial evidence of record sufficient to
establish a reasonable basis for doubting the
Union 's majority in the unit at the time he raised
such question ( which is a necessary prerequisite to
the validity of the professed good-faith doubt.
Downtown Bakery Corp., 139 NLRB 1352, 1355.)
353-177 0,- 72 - 69
1076 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Maalouf testified as follows (on August 24,
1966):
Q. In your opinion, sir, do they [the Union]
represent a majority of your employees as
presently constituted?
A. No.
At another point Maalouf testified that when his
employees saw him meeting with the Union's
representatives in May and June 1966, "8 or 9" of
his more than 28 employees said they would quit if
they had to join the Union.
With regard to the earlier statement, Maalouf ex-
pressed an opinion concerning the Union's majority
status in the unit as of the date the testimony was
given (August 24, 1966); with regard to the latter,
it appears that he based his alleged doubt on ex-
pressions from less than 28 percent of the unit.
The foregoing analysis discloses that Maalouf
failed to rebut the presumption of the Union's con-
tinued majority status in the unit commencing in
July 1965, through the date of Maalouf's failure to
respond to the Union 's initial claim of continued
majority status and request for continued recogni-
tion and bargaining ( March 7, 1966 ) and sub-
sequently ( particularly where , as here , as late as
June 1966 Maalouf indicated his willingness to
enter into a contract with the Union provided it
would drop its request for a union shop).
The Supreme Court has stated that "bargaining
relationship once rightfully established must be per-
mitted to exist and function for a reasonable period
in which it can be given a fair chance to succeed.
After such a reasonable period the Board may, in a
proper proceeding and upon a proper showing, take
steps in recognition of changed situations which
might make appropriate changed bargaining rela-
tionships." Franks Bros. Company v. N.L.R.B., 321
U.S. 702, 705-706.
Through the period since a majority of the em-
ployees in the unit with which we are here con-
cerned designated the Union as their representative
for the purpose of bargaining with their Employer
with regard to their wages, hours, and working con-
ditions , such purpose has been successively
thwarted by their original Employer and his succes-
sor. Much less a "reasonable time," at no time has
the Union been afforded a fair chance by either
Ramada or Maalouf to carry out its designated
function.
On the basis of the above, I find that Maalouf is
Ramada 's "successor " in interest in the business
within the meaning and application of that term
under Section 8(a)(5) and (I) of the Act and
further finds that Maalouf was under a continuing
duty to bargain with the Union at all times sub-
sequent to March 7, 1966.
3. The unit and the Union 's majority
On March 3 the Union informed Maalouf by
letter of its continuing assertion of majority
representative status in a unit consisting of "the
culinary employees employed at Ramada Inn," and
requested continued recognition as the bargaining
representative of "all culinary workers employed by
the Ramada Inn Restaurant."
At the time of the request and since , this in-
cluded all of Maalouf 's employees at Ramada, since
Maalouf himself took over the managerial role for-
merly performed by Fields for Ramada (except the
musicians, who were independent contractors).
Maalouf during his discussions with the Union
between May 18 and June 14, 1966, with regard to
the wages, hours, and working conditions of the
employees raised a question with regard to the
chef 's pay scale ( set out as "open ") in the standard
contract , but raised no questions concerning the
identity or unit coverage either of the chef or the
other classifications set forth in the contract and
employed by him (chefs, cooks, dishwashers,
waitresses, hostesses, cashiers , hostess-cashiers,
busboys, and bartenders).
I find that a unit consisting of all culinary em-
ployees employed by Maalouf at Ramada-River-
side , including all chefs, cooks, dishwashers,
waitresses , hostesses , cashiers , hostess-cashiers,
busboys , and bartenders , excluding the owner-
manager , musicians , and all others , is an ap-
propriate unit under Section 9 of the Act; that said
unit is identical to the unit of Ramada's food and
beverage employees employed at Ramada-River-
side prior to January 6, 1966; and that it shall be
presumed on the basis of the findings and discus-
sion set forth heretofore that the Union has
represented a majority of the employees in said unit
continuously since January 6, 1966.
4. The refusal to bargain
As set forth heretofore, when the Union con-
tacted Maalouf on January 20 and February 10,
1966, the conversation was limited to notice to
Maalouf of its preexisting dispute with Ramada and
an inquiry into whether Maalouf was the owner and
operator of the business. Maalouf disclaimed
knowledge of the former and denied the latter.
Since in both instances the Union neither asserted
its continuing majority representative status in the
unit nor requested recognition and bargaining,
Maalouf cannot be said to have refused to bargain
with it on either of those dates.
However, not long after the February 10 conver-
sation, the Union was informed by the Bank of
America (where the sublease agreement between
Sigloch and Maalouf was being held in escrow) that
Maalouf was the owner and operator of the busi-
ness. Based upon that knowledge, the Union
dispatched a letter to Maalouf on March 3, 1966,
setting forth its claim of continued majority
representative status in the unit dating from the
period of Ramada's operations and requesting con-
tinued recognition and collective bargaining.
RAMADA INNS, INC.
Maalouf received the letter on March 5 but neither
acknowledged nor replied to it. The Union filed
refusal-to-bargain charges against Maalouf on
March 10.
On March 28 Maalouf addressed a reply to a
request from the Board 's Regional Office for his
position regarding the charges wherein he stated
that just at the time he expected to assume owner-
ship and operation from Ramada it was discovered
that he , an alien , could not secure a liquor license
and so, to assure continuity of the restaurant's
operation, he simply assumed its management for
Lee Sigloch, the actual owner, and would continue
in that capacity until he achieved citizenship status.
In actuality, by his own testimony, all during the
time from January 6, 1966, he considered and con-
ducted himself as the actual owner and operator of
the business.
Maalouf did not change his position and admit
his real status until the Union renewed its March 3
claim and requests on May 18, 1966, after it
became public knowledge that Maalouf was the
true owner and operator of the business by virtue of
the posting of his liquor license at the premises.14
Based upon the foregoing I find that by failing to
respond after his March 5, 1966, receipt of the
Union's formal notice of majority status and
request for recognition and bargaining and persist-
ing through March 28, 1966, and until May 18,
1966, in refusing to comply with such request on
the ground he was not the proper party with which
to bargain, Maalouf, from March 5, 1966, on, failed
and refused to bargain in good faith and thereby
violated Section 8(a)(5) and (I) of the Act.
It remains to be determined whether Maalouf
rectified his unlawful conduct by his subsequent
negotiations with the Union between May 18 and
June 13, 1966. While Maalouf did meet and discuss
the terms of the Union's proposed contract and
health and welfare program, he failed to attend a
meeting he himself scheduled for June 16, 1966, at
which meeting he had promised to inform the
Union if he would sign a contract with the Union,
made no explanation therefor, failed to answer the
Union's subsequent (June 17, 1966) letter re-
questing that negotiations be resumed, and re-
jected (by his attorney) the Union's August 18
request for renewed negotiations with the statement
that there was no point to any further meetings un-
less and until it was determined by the Board that
Maalouf was under legal obligation to bargain with
the Union.
Based upon the above, I find that Maalouf at all
times since March 5, 1966, has failed and refused
to bargain with the Union in good faith and thereby
has continued to violate Section 8(5) and (1) of the
Act.
5. Jurisdiction (Maalouf)
1077
Maalouf points out that the projected annual
return to his business at Ramada-Riverside will not
total $500,000 and argues that since the Board has
established $500,000 as the minimum standard for
its assertion of jurisdiction over restaurants, the
case against him should be dismissed.
The General Counsel would add either the gross
annual return to Sigloch's motel operation at
Ramada-Riverside or the gross annual return to
another restaurant owned and operated by Maalouf
known as Zandy's Restaurant to satisfy the
$500,000 standard.
The parties stipulated that during the period
January 6 to May 31, 1966, Maalouf's gross dollar
revenues at Ramada-Riverside were $160,610.23.
Maalouf conceded in his answer to the consolidated
complaint that his gross annual dollar revenue from
Zandy's Restaurant is approximately $120,000. It
was further stipulated by the parties that during the
10-month period ending May 31, 1966, Sigloch's
gross revenue from rentals, vending machines, and
the like in his operation of the motel totaled
$208,053.02.
Projecting Maalouf's revenue at Ramada-River-
side over the approximately 5-month period and
Sigloch's motel revenue over the 10-month to 12-
month periods, it appears that their gross dollar
revenues over a 12-month period would be
$385,464 and $249,663, respectively.
Adding Maalouf's projected Ramada-Riverside
annual income either to his Zandy's Restaurant
estimated annual average income or to Sigloch's
projected Ramada-Riverside annual income would
result in a total in excess of $500,000, the Board's
minimum jurisdictional standard for restaurants-
$505,464 for Ramada-Riverside restaurant-bar and
Zandy's Restaurant combined; $635,127 for
Ramada-Riverside motel, restaurant, and bar com-
bined.
In the recent case of Sands Motor Hotel, 162
NLRB 863, the Board adopted the recommenda-
tions of Trial Examiner Miller that jurisdiction be
asserted over the Sands Motor Hotel, a partnership,
despite the fact the motel 's annual revenue only
totaled $326,700, because the $227,150 annual in-
come of the Sands Restaurant, Inc., a lessee occupi-
er of part of the premises, might properly be com-
bined with the hotel income to satisfy the standard.
The Trial Examiner quoted Trade Winds Motor
Hotel & Restaurant, 140 NLRB 567, with approval.
The General Counsel relies on those cases here.
In both the cases cited above, it was recognized
that the restaurant and the motel were separate
business entities without any common ownership,
direction, or control. However, it was noted that
the two businesses were conducted under the same
11 Prior to this time Maulouf sold alcoholic beverages under a liquor
license issued to McCuhhin
1078 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
roof and name, their patrons used the same parking
facilities, they were not identified to the public as
separate entities, they used the same telephone
system, the hotel guests in considerable numbers
charged their meals to their hotel bills, the restau-
rant and bar received considerable patronage from
the hotel guests, the restaurant provided room ser-
vice to the hotel guests, the telephone directory and
advertising brochures advertised the hotel, restau-
rant, and bar facilities as a single entity, and the
signs on the premises referred only to one entity.
In this case , all the factors recited above are
present. In addition, it is noted that customers and
suppliers enter and leave the restaurant and hotel
facilities through the same entrances and exits, a
common waiting room is utilized by both restaurant
and hotel patrons , there are entrances to the bar
and restaurant facilities from the hotel lobby, and
that Maalouf is required to operate the restaurant 7
days a week, 24 hours a day, as a convenience to
the hotel guests.
I find this case factually indistinguishable from
Sands and therefore find that for purposes of ju-
risdiction , the Ramada -Riverside motel and restau-
rant operations are functionally integrated and in-
terdependent to the degree that their combined an-
nual revenues may be properly utilized for the pur-
pose of satisfying the Board 's jurisdictional stan-
dards.
Inasmuch as the combined annual revenue of
Ramada-Riverside 's restaurant and motel exceed
$500,000, I find that it will effectuate the purposes
of the Act to assert jurisdiction over Maalouf in this
case.
I note that the jurisdictional standard asserted is
a discretionary standard and far exceeds the
Board's statutory jurisdiction, which extends to the
full reach of the commerce powers. I thus further
find that in any event the effect of Maalouf's unfair
labor practices heretofore determined have a sub-
stantial and adverse effect upon interstate com-
merce and it will effectuate the purposes of the Act
to assert jurisdiction herein.
11. THE REMEDY
A. Ramada
Because of its expected short tenure and belief
that were it to sign the Union's proposed contract it
might bind its successor, Ramada avoided execu-
tion of the contract offered by the Union. But for
this consideration (undisclosed to the Union),
Ramada, in Lindgren's words, had "no objections"
to the terms of the offered contract.
Section 8(d) of the Act defines the obligation im-
posed by Section 8(a)(5) as including "the execu-
tion of a written contract incorporating any agree-
ment reached if requested by either Party." In cases
16 Local 60, Carpenters I Mec /tauu l Handling Si steal, I v N LRB , 365
US 651,657
when a union and employer do not have any dif-
ferences remaining between them over the terms
and conditions of a collective-bargaining contract
covering the wages, hours, and conditions of em-
ployment of employees of such employer within a
unit wherein such union represents a majority, but
the employer nevertheless fails, refuses, or avoids
executing a contract at the union's request embody-
ing such terms and conditions, the Board in exer-
cise of its remedial powers and duty to "take meas-
ures designed to recreate the conditions and rela-
tionship that would have been had there been no
unfair labor practice"15 has ordered such employer
to reimburse the employees for the loss of any
benefits which would have accrued to them under
such contract, with 6 percent per annum interest
thereon.1e
Courts of equity have arrived at a similar result,
finding implied in fact contracts, implied in law
contracts, or applying the doctrines of promissory
estoppel or restitution and unjust enrichment. Such
doctrines were applied to aid one who either did
perform an act or did forebear from performance
of an act in reasonable reliance upon belief induced
by the conduct of another that the latter would
render good-faith performance of a duty either
voluntarily assumed or imposed by operation of law
(see American Jurisprudence, Contracts- Restitu-
tion and Unjust Enrichment; and cases cited).
Lindgren by his course of conduct throughout
the period of his conversations with Jones overtly
displayed all the normal indicia associated with a
contract negotiation in good faith to the point that
on August 31, 1965, he stated that he had no objec-
tions to the contract offered and executed by the
Union.
Under these circumstances, the purposes of the
Act and equity will best be served by devising a
remedy similar to that which would result from
finding that an implied contract was formed
between Ramada and the Union on August 31,
1965 (when Lindgren stated Ramada had no objec-
tions to the Union's contract offer), for the benefit
of the employees in the unit, with the terms and
conditions of the offered contract the terms and
conditions of such implied contract. All the
requisite elements are present -an offer by the
Union, an apparent (implied) acceptance by con-
duct of Ramada, consideration in the form of
forebearance by the Union from acts which it was
legally entitled to perform and which, if performed,
would interrupt commerce and cause economic loss
to Ramada, plus reasonable reliance by the Union
on its belief that Ramada was properly discharging
its legal duty under Section 8(a)(5) of the Act to
bargain in good faith for a contract and execute
same when agreement was reached on its terms.
I shall recommend that Ramada be ordered by
the Board to reimburse all its employees in the unit
16 Schdl Steel Products, Inc, 161 NLRB 939; Coletti Color Prints,
Inc., 159NLRB 1593.
RAMADA INNS, INC. 1079
heretofore found appropriate for any losses they
have suffered to the extent that any of the benefits
they actually received from Ramada were less than
the benefits they would have received under the
contract executed and offered by the Union on Au-
gust 16 , 1965, and to which Lindgren stated he had
no objections on August 31, 1965. The period for
the calculation of such losses shall commence on
August 31, 1965, and terminate on January 5, 1966
(when Ramada ceased its operations), and shall be
computed on the basis of calendar quarters in ac-
cordance with the method prescribed in F. W.
Woolworth Company, 90 NLRB 289. Interest at the
rate of 6 percent per annum shall be added and
shall be computed in the manner set forth in Isis
Plumbing & Heating Co., 138 NLRB 716.
B. Maalouf
Maalouf did not take the business with
knowledge of Ramada's unfair labor practices; he
was a remote purchaser and not an ally or sham
successor of Ramada. He did not reach agreement
with the Union at any time concerning the wages,
hours, and conditions of employment of the em-
ployees in the unit. However, it has been found that
Maalouf did fail or refuse to bargain in good faith
with the Union.
In view of the foregoing, in my judgment the pur-
poses of the Act will best be served by issuance of a
standard order in cases of this type requiring
Maalouf to bargain with the Union at its request
and, if an understanding is reached , to embody
such understanding in a signed agreement, and to
post appropriate notices.
fecting commerce within the meaning of Section
2(2), (6), and (7) of the Act.
2. The Union is a labor organization within the
meaning of Section 2(5) of the Act.
3. All food and beverage or culinary employees
employed at the Ramada Inns restaurant and
cocktail lounge located at Riverside, California, in-
cluding all chefs, cooks, dishwashers, hostesses,
cashiers , hostess-cashiers, waitresses, busboys, and
bartenders, and excluding all managers , musicians,
and others, constitute a unit appropriate for collec-
tive bargaining within the meaning of Section 9 of
the Act.
4. The Union at all times since July 22, 1965,
has represented a majority of the employees in the
aforesaid unit.
5. Respondent Ramada failed and refused to
bargain with the Union in good faith from July 22,
1965, to January 5, 1966, and thereby violated Sec-
tion 8(a)(5) and (I) of the Act.
6. Respondent Maalouf has failed and refused to
bargain with the Union in good faith since March 5,
1966, continues so to refuse and thereby violated
and continues to violate Section 8(a)(5) and (1) of
the Act.
7. The activities of Respondents Ramada and
Maalouf occurring in connection with their busi-
ness operations set forth above have a close, inti-
mate , and substantial relations to trade, traffic, and
commerce among the several States, and, absent
correction, will lead to labor disputes burdening
and obstructing commerce and the free flow
thereof.
CONCLUSIONS OF LAW
1. Respondents Ramada and Maalouf are em-
ployers engaged in commerce or in a business af-
[Recommended Order omitted from publica-
tion. ]