Roy Spa, LLC

National Labor Relations Board - Board Decisions

Jul 27, 2017

365 NLRB No. 114 (N.L.R.B. 2017)

365 NLRB No. 114
NOTICE: This opinion is subject to formal revision before publication in the
bound volumes of NLRB decisions. Readers are requested to notify the Ex-
ecutive Secretary, National Labor Relations Board, Washington, D.C.
20570, of any typographical or other formal errors so that corrections can
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Roy Spa, LLC and International Brotherhood of
Teamsters, Local 2. Case 19–CA–083329
July 27, 2017
SECOND SUPPLEMENTAL DECISION AND ORDER
BY CHAIRMAN MISCIMARRA AND MEMBERS
PEARCE AND MCFERRAN
On July 12, 2016, Chief Administrative Law Judge
Robert A. Giannasi issued the attached supplemental
decision.1 The Applicant filed exceptions and a support-
ing brief, the General Counsel filed an answering brief,
and the Applicant filed a reply.2
The National Labor Relations Board has considered
the decision and the record in light of the exceptions and
briefs and has decided to affirm the judge’s rulings, find-
ings, and conclusions and to adopt the recommended
Order.3
ORDER
The recommended Order of the administrative law
judge is adopted and the application of Roy Spa, LLC,
for attorneys’ fees and expenses under the Equal Access
to Justice Act is denied.
Dated, Washington, D.C. July 27, 2017
______________________________________
Mark Gaston Pearce, Member
______________________________________
Lauren McFerran, Member
(SEAL) NATIONAL LABOR RELATIONS BOARD

1 The judge issued an errata on July 20, 2016.
2 The Applicant’s request for oral argument is denied as the record
and the briefs adequately present the issues and the positions of the
parties.
3 Our dissenting colleague agrees that the General Counsel’s position
as a whole in the underlying case was substantially justified, and that
the EAJA application at issue would properly be dismissed on the mer-
its. He nevertheless dissents from dismissal on the ground that the
judge, in his view, abused his discretion by excusing the General Coun-
sel’s untimely filing of his motions for extension of time and to dismiss
the EAJA claim. The Board, however, fully addressed the issues pre-
sented by those filings in Roy Spa, LLC, 363 NLRB No. 183 (2016).
Member McFerran did not participate in that decision, but, applying the
decision as the law of this case, she agrees to deny the Respondent’s
application.
CHAIRMAN MISCIMARRA, dissenting.
This case, which arises under the Equal Access to Jus-
tice Act (EAJA),1 has a somewhat complicated procedur-
al history. The complaint alleged that Roy Spa, LLC (the
Respondent in the original case, and presently the Appli-
cant seeking a recovery of attorneys’ fees and expenses
under EAJA) was a legal successor to predecessor Old
Fashioned Barber with respect to its operations at Malm-
strom Air Force Base in Montana. The complaint further
alleged that Roy Spa, as a legal successor, violated Sec-
tion 8(a)(5) and (1) of the National Labor Relations Act
by making certain unilateral changes in employees’
terms and conditions of employment without giving the
Union notice and an opportunity to request bargaining.
Administrative Law Judge Michael A. Marcionese dis-
missed the complaint on the basis that the Board lacked
jurisdiction over Roy Spa. Because he held that the
Board lacked jurisdiction, Judge Marcionese did not
reach the merits of the alleged unfair labor practices
(ULPs) attributed to Roy Spa.
Here is where this case, procedurally, gets more com-
plicated.
Complication #1: After the case was dismissed, Roy
Spa filed an EAJA application, and the EAJA application
was referred to Judge Marcionese.
Complication #2: The General Counsel filed an un-
timely motion to dismiss the EAJA application, after
filing an untimely motion for an extension of time to file
the (untimely) motion to dismiss; the judge granted the
extension of time and accepted the General Counsel’s
untimely motion to dismiss.
Complication #3: In his supplemental decision, Judge
Marcionese granted the General Counsel’s untimely mo-
tion to dismiss the EAJA application. According to
Judge Marcionese, the General Counsel’s position that
the Board had jurisdiction, though incorrect, was sub-
stantially justified. However, Judge Marcionese did not
address whether the ULP allegations were also substan-
tially justified (i.e., Roy Spa’s alleged violations of Sec-
tion 8(a)(5) and (1) based on its alleged status as a “suc-
cessor”).
Complication #4: The Board then reviewed Judge
Marcionese’s rulings. The Board majority agreed with
Judge Marcionese that the General Counsel’s incorrect
position regarding the existence of NLRB jurisdiction
was nonetheless substantially justified, but the majority
concluded that the General Counsel’s motion to dismiss

1 5 U.S.C. § 504 et seq. EAJA entitles certain prevailing parties
(other than the government) in litigation before a Federal agency to an
award of attorneys’ fees and expenses unless the position of the agency
was substantially justified or special circumstances make an award
unjust.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD2
could not be granted without an additional finding that
the ULP allegations were also substantially justified.
Roy Spa, LLC, 363 NLRB No. 183, slip op. at 4–5 (2016)
(Roy Spa I). Accordingly, the majority remanded the
case so this additional question could be resolved in the
first instance by the judge. Id., slip op. at 5. However,
regarding the untimeliness of the General Counsel’s mo-
tion to dismiss (and the untimeliness of the General
Counsel’s request for an extension of time to file the mo-
tion to dismiss), the Board majority upheld the judge’s
rulings in favor of the General Counsel, and the majority
also allowed the General Counsel to file an answer to the
EAJA application. Id., slip op. at 2–4, 5 fn. 17. At
times, I have favored leniency when parties fail to com-
ply with Board-imposed deadlines; but for the reasons
explained in my dissenting opinion, id., slip op. at 5–8, I
dissented from the acceptance of the General Counsel’s
untimely motion to dismiss and the untimely request for
an extension of time to file the motion to dismiss, as well
as from the decision to allow the General Counsel to file
an untimely answer.
Complication #5: On remand, Administrative Law
Judge Robert A. Giannasi answered the question that
Judge Marcionese had left unaddressed—namely, wheth-
er there was substantial justification for the allegations
that Roy Spa was a legal successor and had violated Sec-
tion 8(a)(5) and (1). Judge Giannasi concluded that both
allegations were substantially justified. In fact, he found
that “the violations would probably have been estab-
lished had the General Counsel succeeded on the juris-
dictional issue.” Therefore, Judge Giannasi held that the
General Counsel’s complaint as a whole (i.e., as to both
jurisdiction and the ULP allegations) was substantially
justified, even though the case against Roy Spa was dis-
missed for lack of jurisdiction. Accordingly, Judge
Giannasi dismissed Roy Spa’s EAJA application.
At present, the Board has before it only complication
number 5: Judge Giannasi’s ruling that the General
Counsel’s successor and ULP allegations against Roy
Spa were substantially justified, warranting dismissal of
the EAJA application. As to these issues, my colleagues
agree with Judge Giannasi, and were I to consider the
current record before the Board, so would I.2
Although I would agree that the General Counsel’s po-
sition regarding Roy Spa’s alleged successor status is
substantially justified, I believe Judge Giannasi overstat-
ed the strength of the General Counsel’s case on the mer-

2 I would also agree that the General Counsel’s position regarding
the existence of Board jurisdiction was substantially justified for the
reasons stated by Judge Marcionese in his supplemental decision, even
though Judge Marcionese ultimately found that jurisdiction did not
exist.
its as to Roy Spa’s alleged successor status, which is the
basis for the alleged violations of Section 8(a)(5) and (1).
The record creates a reasonable question whether Roy
Spa had a substantial and representative complement of
employees and was engaged in normal operations on
September 1, 2011, the date the General Counsel alleges
that Roy Spa’s duty to bargain as a successor attached.
Both of these requirements must be satisfied before Roy
Spa had an obligation to engage in bargaining with the
predecessor’s union. See Fall River Dyeing & Finishing
Corp. v. NLRB, 482 U.S. 27, 49 (1987); Premium Foods
Inc. v. NLRB, 709 F.2d 623, 628 (9th Cir. 1983). The
evidence shows that, as of September 1, 2011, Roy Spa
had concrete plans to make substantial changes in its
operations approximately 10 months later, and numerous
Board and court cases indicate that a planned expansion
can raise difficult questions about whether the alleged
successor has a substantial and representative comple-
ment of employees engaged in normal operations. See,
e.g., Galis Equipment Company, Inc., 194 NLRB 799
(1972); Pre-Engineered Building Products, Inc., 228
NLRB 841 (1977), enf. denied 603 F.2d 134 (10th Cir.
1979); Jeffries Lithograph Co., 265 NLRB 1499 (1982),
enfd. 752 F.2d 459 (9th Cir. 1985). When evaluating an
EAJA application, the Board does not decide the merits
of the case, and the General Counsel’s pursuit of the liti-
gation—even if the case is ultimately dismissed—is sub-
stantially justified “if a reasonable person could think it
correct, that is, if it has a reasonable basis in law and
fact.” Pierce v. Underwood, 487 U.S. 552, 566 fn. 2
(1988). Based on the current record, I would agree that
the General Counsel’s position as a whole, including his
theory that Roy Spa was liable as a successor employer,
was substantially justified under this standard. However,
I believe the Board cannot fairly conclude, without
reaching and deciding the merits, that “the violations
would probably have been established.”
Nevertheless, for the reasons stated in my dissent in
Roy Spa I, I continue to believe that no reasonable basis
supports the acceptance of the General Counsel’s un-
timely motion to dismiss the EAJA application, the Gen-
eral Counsel’s untimely motion for an extension of time
to file the untimely motion to dismiss, and the General
Counsel’s untimely answer to the EAJA application. See
Roy Spa I, supra, slip op. at 5–8 (Member Miscimarra,
dissenting). My colleagues adhere to the Board’s prior
decision excusing the General Counsel’s untimely filings
and thereby perpetuate Judge Marcionese’s erroneous
rationale for excusing the General Counsel’s flagrant
ROY SPA, LLC 3
disregard of applicable deadlines.3 In my view, the Gen-
eral Counsel’s untimely filings in this matter cannot rea-
sonably be excused.4 Accordingly, I believe the Board
should have stricken the General Counsel’s motion to
dismiss, not permitted the General Counsel to file an
answer to the EAJA application, and directed the judge
to resolve the pending EAJA issues based on the record
minus these untimely filings. Because I believe that the
Board cannot disentangle its disposition of Roy Spa’s
EAJA application from the acceptance of the General
Counsel’s untimely EAJA submissions, I dissent from
the dismissal of the EAJA application.
Dated, Washington, D.C. July 27, 2017
______________________________________
Philip A. Miscimarra, Chairman
NATIONAL LABOR RELATIONS BOARD
Ryan Connolly, Esq., for the General Counsel.
Michael Avakian, Esq., for the Respondent.
Timothy McKittrick, Esq., for the Charging Party.
SUPPLEMENTAL DECISION AND ORDER
[Equal Access to Justice Act]
ROBERT A. GIANNASI, Administrative Law Judge. This case
deals with an Equal Access to Justice (EAJA) application filed
by Respondent after the dismissal of an unfair labor practice
complaint against it. The case comes to me on remand from the
Board to make a determination whether the General Counsel
had “substantial justification” to issue and litigate the underly-
ing complaint, which alleged that Respondent, as a successor

3 Member McFerran did not participate in Roy Spa I. She adheres to
it as the law of the case.
4 As explained in my dissent in Roy Spa I:
Roy Spa timely filed its EAJA application on September 12, 2013.
The deadline for the General Counsel to file an answer to the applica-
tion or a motion to dismiss it was extended as a result of the Govern-
ment shutdown to November 4. On November 20—more than 2
weeks past the deadline—the General Counsel requested an extension
of time to file a motion to dismiss. In his request, the General Counsel
claimed that the deadline for filing a motion to dismiss was December
10—more than 5 weeks past the correct deadline—and stated, as the
sole grounds for the request, that “[g]iven my current work load I do
not anticipate being able to complete the Motion to Dismiss until the
requested date.”
Roy Spa I, supra, slip op. at 5 (Member Miscimarra, dissenting) (footnotes
omitted). Thus, the motion to dismiss was untimely, the motion for an
extension of time to file the motion to dismiss was untimely, and the Gen-
eral Counsel’s vague reference to his “current work load” was patently
insufficient to show good cause based on excusable neglect. I believed and
continue to believe that Judge Marcionese’s decision to grant the General
Counsel’s untimely motions constituted an abuse of discretion for the rea-
sons explained in the text and in my prior dissent in Roy Spa I, supra, slip
op. at 5–8.
employer, made unilateral changes in the terms and conditions
of employment of union-represented employees, in violation of
Section 8(a)(5) and (1) of the Act. See 363 NLRB No. 183
(2016).1 After the remand, at the direction of the Board, the
General Counsel filed an answer to the Respondent’s applica-
tion for fees and the Respondent filed a reply, in accordance
with Sections 102.150–153 of the Board’s Rules and Regula-
tions. The issue whether the substantive allegations in the
complaint were substantially justified is thus joined for my
determination.
The Underlying Decision
On June 28, 2013, after a 2-day hearing, Judge Michael Mar-
cionese issued his decision dismissing the General Counsel’s
complaint alleging that Respondent, as a successor employer
obligated to bargain with the Charging Party Union (hereafter,
the Union), made unilateral changes to the commission rates of
employees and unilaterally enforced a previously dormant em-
ployee dress code, in violation of Section 8(a)(5) and (1) of the
Act. Most of the decision dealt with whether the Board had
jurisdiction over Respondent’s operations—a question the
judge decided in the negative, thus resulting in a dismissal of
the complaint on that ground. The judge nevertheless briefly
discussed the substantive allegations of the complaint, ultimate-
ly stating that he “need not determine whether [the Respond-
ent’s conduct] violated the Act because the Board does not
have jurisdiction in this matter.”
The judge’s decision sets forth the following facts and dis-
cussion relevant to the substantive allegations of the complaint:
The Respondent is a Virginia limited liability corpora-
tion headquartered in Centreville, Virginia, that operates
barber shops or hair care facilities at several military bases
in the United States, including the one at Malmstrom Air
Force Base in Montana, which is involved in this proceed-
ing. Joyce Cayli and her husband, Hasan Cayli, are mem-
bers, i.e., owners of the LLC and admitted agents of the
Respondent. On July 12, 2011,2 the Respondent was
awarded the contract to provide hair care services at
Malmstrom by Army and Air Force Exchange Services
(AAFES), a private nonprofit entity that runs base ex-
changes for the Department of Defense.3 The previous
operator, the Old Fashioned Barber, had notified AAFES
in June that it wanted to terminate its contract because the
barber shop at Malmstrom was not profitable. The Re-

1 In its decision, the Board ruled that the General Counsel was sub-
stantially justified in asserting jurisdiction over the Respondent, despite
the administrative law judge’s dismissal of the complaint on the ground
that there was no jurisdiction over the Respondent. The remand was
based on the judge’s failure to consider whether the remainder of the
case—the substantive complaint allegations—was substantially justi-
fied. The remand came to me because Judge Michael Marcionese, who
handled the underlying proceeding and issued the initial EAJA ruling,
retired and thus was unavailable to handle the remand.
2 All dates are in 2011, unless otherwise indicated.
3 The base exchanges are classified as “non-appropriated fund activi-
ties,” meaning that no taxpaper dollars are used. AAFES is essentially
self-funded, using the revenue from services provided and products
sold at the exchange to fund the operation.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD4
spondent commenced operations at Malmstrom on Sep-
tember 1 under a 5-year contract.
* * * *
. . . . The Respondent’s facility at Malmstrom is located with-
in the designated security area of the base with limited access
to the general public. When Respondent began operations,
and for the first 10 months at least, the overwhelming majori-
ty of its customers were male members of the military seeking
what is commonly referred to as a “regulation” or “military”
haircut. Beginning in July 2012, when the Respondent moved
its shop to a new base exchange building, it was transformed
from a barber shop to a “family hair care salon” with the goal
of expanding its customer base to include more women. This
change was specifically required by the Respondent’s contract
with AAFES. In order to facilitate this change, the contract al-
so required for the first time that all of the Respondent’s em-
ployees at Malmstrom have a cosmetology license. Such a li-
cense is broader than the barber’s license that several of the
predecessor’s employees held and allows the licensee to work
with chemicals, e.g., for hair coloring and permanents. These
are services that are not typically performed for male mem-
bers of the military.
The record evidence also shows that, while located on
a secure military base, the general public does have lim-
ited access to the Respondent’s facility. A visitor to the
base must show identification, and be subject to search at
the gate. There is a museum located on the base that the
public is invited to visit and school groups often tour the
base. The record does not show whether the Respondent
has ever provided services to any member of the general
public. It appears that the Respondent’s customer base is
still limited to members of the military, their dependents,
contractors working on base and retired military who live
in the area. Census records show that approximately 3500
people live on the base, approximately 56 percent of
whom are male.
The evidence also shows that, while the Respondent
operates the only hair care facility, or barber shop, on
base, there are a number of barber shops and salons in the
Great Falls vicinity, including one, the Eastside Barber
Shop, located just outside one of the gates. It is undisputed
that a haircut at the Eastside Barber Shop costs about $1
less than one at the Respondent’s onbase facility. While it
may be more convenient for base residents to get a haircut
at the Respondent’s facility on base, nothing precludes a
service member or other potential on base customer from
utilizing these other businesses off base.
* * * *
. . . . As previously noted, the previous contractor operating
the barber shop at Malmstrom was the Old Fashioned Barber.
The Union had a collective-bargaining agreement with that
employer which expired on May 5, 2010. On June 30, 2011,
after the Union had received notice from AAFES that the Old
Fashioned Barber had terminated its contract to operate the
shop, effective August 31, 2011, the Union executed a new
collective-bargaining agreement for the term May 6, 2011,
through May 5, 2013. The Union did not provide AAFES
with a copy of this new agreement until July 7, 2011, after the
bid solicitation period for a new contractor to take over the
operation had closed. The bid solicitation and the bid submit-
ted by the Respondent were based on there being no collec-
tive-bargaining agreement in place.
There is no dispute that the Union’s business repre-
sentative, Max Hallfrisch, and Cayli, the Respondent’s
owner and agent, had several communications, written and
oral from August 2011, through November 2011, in which
Hallfrisch attempted to have the Respondent adopt the col-
lective bargaining it had negotiated with the Old Fash-
ioned Barber. It is clear that the Respondent never agreed.
While these communications were cordial, and included
discussion of several work issues, the Respondent never
agreed to recognize the Union as the 9(a) representative of
its employees at Malmstrom.
The record evidence also shows that, when the Re-
spondent took over the barber shop at Malmstrom, it re-
tained all of the employees previously employed by the
Old Fashioned Barber, 4 continued to operate the business
at the same location serving the same customers, utilizing
the same equipment, without any hiatus. However, the
record also shows that in July 2012, as envisioned by its
contract with AAFES, the Respondent moved to a new lo-
cation, changed the type of services performed from a bar-
ber shop to a full service salon, and change[d] the custom-
er base to increase the number of women for whom it pro-
vided hairstyling services. The employee complement also
changed between September and July 2012. By the time of
the conversion, only three unit employees remained. The
other two, who did not have cosmetology licenses, left
their employment. The Respondent increased its comple-
ment to nine employees, all with cosmetology licenses. In
addition, pursuant to the terms of its contract with AAFES,
the Respondent changed its hours of operation when it
moved to the new location. The Respondent was now open
7 days a week, including Sundays, a day that it had previ-
ously been closed.
While the evidence would suggest a general refusal to
recognize and bargain with the Union, the complaint only
alleges a refusal to bargain regarding two discrete subjects,
i.e., the change in commission rate and the adoption of a
dress code.5 This may very well be due to the fact that any
such general refusal to recognize and bargain occurred
more than 6 months before the Union filed its charge on
June 18, 2012. In any event, the evidence does show that
the Respondent did not notify the Union in advance before

4 [fn. 5 in original] There were five unit employees and two supervi-
sors working in the Malmstrom barber shop on September 1 who all
previously worked for the Old Fashioned Barber.
5 [fn. 6 in original] While alleged as a change, the record indicates
that AAFES always had a dress code for its concessionaire’s employ-
ees. The dress code may not have been enforced when the Old Fash-
ioned Barber had the concession.
ROY SPA, LLC 5
it changed the commission rate and began to enforce the
existing dress code. I need not determine whether this
conduct violated the Act because the Board does not have
jurisdiction in this matter.
The EAJA Application
No exceptions were filed to Judge Marcionese’s decision so
it became the final decision of the Board. Respondent thereaf-
ter filed an EAJA application to recover its litigation fees. The
General Counsel filed a motion to dismiss and the matter was
referred to Judge Marcionese, who denied the application solely
on the jurisdictional issue. As indicated above, that denial was
upheld by the Board, which remanded for findings on the sub-
stantive allegations; the General Counsel thereafter filed an
answer to the EAJA application and the Respondent filed a
reply.
The Applicable Law
“EAJA entitles a prevailing party in an agency adversary ad-
judication to an award of attorney fees unless the agency’s
position was ‘substantially justified . . . on the basis of the ad-
ministrative record, as a whole . . . .’” Glesby Wholesale, Inc.,
340 NLRB 1059, 1060 (2003). Allegations are “substantially
justified” when “the evidence is ‘what a reasonable mind might
accept as adequate to support a conclusion’—i.e., where ‘rea-
sonable people could differ’ on whether the allegation should
be litigated.’” Glesby Wholesale, cited above, 340 NLRB at
1060, quoting Pierce v. Underwood, 487 U.S. 552 (1987) and
citing other authorities. “This standard is not as demanding as
‘justified to a high degree’ or ‘substantial probability of prevail-
ing.’” Ibid, again quoting and citing authorities. As the Su-
preme Court has made clear, an agency’s position can be justi-
fied “even if it is not correct . . . if a reasonable person could
think it correct, that is, if it has a reasonable basis in law and
fact.” Pierce v. Underwood, cited above, 487 U.S. at 566 fn. 2.
I turn now to the applicable law concerning the substantive
allegations of the complaint—that Respondent was a successor
employer required to bargain with the incumbent union that
represented the employees of the predecessor and that it there-
after made unlawful unilateral changes by changing the em-
ployee commission rate and enforcing a dress code rule. It is
clear that an employer who has a bargaining obligation may not
make unilateral changes in the terms and conditions of em-
ployment of employees represented by a union—mandatory
subjects of bargaining—without first providing their bargain-
ing representative notice and an opportunity to bargain over the
changes. NLRB v. Katz, 369 U.S. 736 (1962). An employer
who takes over the operations of a predecessor employer whose
employees are represented by a union is deemed a successor to
the bargaining obligation of the predecessor if there is a “sub-
stantial continuity” in the employing enterprise. The focus of
that inquiry is whether, from the perspective of the employees,
their jobs changed or remained “essentially the same.” Im-
portant factors in the inquiry—which is a factual one—include
whether a majority of the predecessor’s employees have been
retained by the successor doing the same jobs under the same
supervisors; and whether the business of both entities is the
same, with the same customers. Fall River Dyeing & Finishing
Corp. v. NLRB, 482 U.S. 27, 41–44 (1987). See also Cadillac
Asphalt Paving Co., 349 NLRB 6, 9 (2007). Such a bargaining
obligation is based on presumptions of majority status that at-
tach to an existing bargaining agreement or relationship be-
tween the predecessor and the incumbent union. Fall River,
482 U.S. at 37–40. One such presumption is based on volun-
tary recognition and the existence of a bargaining agreement
(Auciello Iron Works, Inc. v. NLRB, 517 U.S. 781, 786–787
(1996)), which may only be rebutted by a showing of loss of
majority in fact. Levitz Furniture Co., 333 NLRB 717 (2001).6
It is also well established that a successorship bargaining ob-
ligation is measured “at the time the bargaining obligation at-
taches.” Thus, changes that occur later are “irrelevant” to the
determination of successorship status. Cadillac Asphalt, cited
above, 349 NLRB at 9.
The General Counsel was Substantially Justified
As Judge Marcionese stated in his original decision, the facts
on the substantive complaint issues are not in dispute. Re-
spondent took over the operations of the Old Fashioned Barber
and hired all its former employees, as well as their supervisors.
It continued the same hair cutting business at the same location,
servicing the same customers, for at least 10 months after the
takeover. The employees did the same jobs they did before the
takeover. There was no break in service, and, indeed, Re-
spondent dealt with the Union to a certain degree, although it
declined to adopt the old contract or formally recognize the
Union. The evidence is thus overwhelming that, at the time of
the takeover, there was a substantial continuity of the enter-
prise, certainly from the standpoint of the employees. Accord-
ingly, although the Respondent was not obligated to apply the
existing contract to the employees, it was a successor under the
applicable authorities discussed above, and it had the resulting
obligation to bargain with the Union.
Nor does Respondent dispute that it failed to notify the Un-
ion or give it an opportunity to bargain before making changes
to employee commission rates and enforcing dress code rules,
which are clearly mandatory subjects of bargaining. The
changes and dress code enforcement were established by the
uncontradicted testimony of two employee witnesses, the only
employee witnesses who testified in the trial. Tr. 116–117,
154–157. Even though the changes were made at about the
time of the move to the new location, the successorship bar-
gaining obligation had attached 10 months before and was still
in existence. Before Judge Marcionese, Respondent did not
assert that the employees had rejected the Union; nor did it
present evidence to overcome the Union’s presumption of ma-
jority support. Thus, here again, the facts and the law support
the General Counsel’s theory of violation.
In these circumstances, the General Counsel was not only
substantially justified in alleging and litigating the bargaining
violations in the complaint, but, as Judge Marcionese seemed to

6 In Fall River, cited above, the Supreme Court made it clear that the
successor is not bound to apply the terms of the predecessor’s bargain-
ing agreement and may set initial terms on which it will hire the prede-
cessor’s employees. Nor is it under any obligation to hire the predeces-
sor’s employees, although it must not discriminate against union em-
ployees in its hiring. 482 U.S. at 41.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD6
suggest in his decision, the violations would probably have
been established had the General Counsel succeeded on the
jurisdictional issue. He noted that the evidence “would suggest
a general refusal to bargain,” thus implicitly recognizing a suc-
cessorship obligation. He also noted that the evidence showed
that Respondent “did not notify the Union in advance before it
changed the commission rate and began to enforce the existing
dress code.”7 My independent analysis of the evidence con-
firms these views. Thus, I have no difficulty in denying the
Respondent’s EAJA application.
Respondent’s EAJA reply (EAJA R. 12–13) repeats its chal-
lenge to the successorship allegation in its post hearing brief to
Judge Marcionese (Br. 57), because its intended new business
focus included more women customers and required licensed
cosmetologists rather than barbers (Br. 57). But that alleged
new focus was not effectuated until Respondent’s move to its
new location 10 months after its takeover from the predecessor.
And it is clear, as a matter of law, that successorship is meas-
ured at the time of the takeover, as shown above. At that point,
Respondent was free not to hire the predecessor’s employees
and to set the initial terms under which it would employ them.
Respondent did not avail itself of this opportunity. It not only
hired all of the old employees and their supervisors, but, ac-
cording to the uncontradicted testimony of the only two em-
ployees who testified, their working conditions remained the
same. Indeed, as Judge Marcionese found, things remained the
same for 10 months until Respondent moved to its new loca-
tion. Moreover, assuming that whatever changes took place at
the new location could be considered, it is hard to see how add-
ing more women customers and requiring cosmetology licenses
would alter the continuity of the enterprise to defeat the bar-
gaining rights of the incumbent union. But even if these
changes could somehow have resulted in a decision favorable
to Respondent, this would not render the General Counsel’s
case without substantial justification.
In its EAJA reply (EAJA R. 14–18), Respondent also repeats
a contention made in its brief to Judge Marcionese (Br. 60–
64)—that its successorship bargaining obligation would not
attach, if at all, until it employed a “representative comple-
ment” of employees, which, in its view, did not take place until
it moved its location and employed a total of 9 employees. It is
unclear when exactly it hired new employees after the takeover,
but Respondent asserted that, when it moved to its new loca-
tion, it employed 9 people, which presumably included supervi-
sors. At the time of the takeover, Respondent kept the 5 em-
ployees of the predecessor, plus their 2 supervisors. Assuming
the 9 employees it employed at the new location included 2
supervisors, this would mean that Respondent added a net of 2
employees thereafter, hardly a significant increase from the

7 Contrary to Respondent’s suggestion (EAJA R. 19–20), Judge
Marcionese did not absolve it of liability for the unilateral dress code
change. While he acknowledged that there was an existing dress code,
he also noted that it “may not have been enforced” under the predeces-
sor; and he specifically stated that the Respondent did not notify the
Union before it “began to enforce the existing dress code.” This was
certainly a change in employment conditions and it is certainly enough
to show that the General Counsel had a substantial justification for that
allegation.
complement at the time of the takeover. Moreover, R. Exh. 27,
which lists the employees on the payroll in August of 2012,
seems to indicate that a significant number of them did not
work full-time hours. But, here again, even assuming some
support for the Respondent’s position on representative com-
plement, the General Counsel’s contrary position was not with-
out substantial justification.
Finally, in its EAJA reply (EAJA R. 21–26 ), Respondent re-
peats an assertion made in its brief to Judge Marcionese (Br.
52–55) to the effect that it had a viable defense to the substan-
tive complaint allegations under Section 10(b) of the Act. That
assertion is without merit, but, in any event, it does not show
that the General Counsel lacked a substantial justification for
the complaint allegations. As Judge Marcionese recognized,
the complaint does not allege a general refusal to bargain. It
only alleges a refusal to bargain “regarding two discrete sub-
jects, i.e, the change in commission rate and the adoption of a
dress code.” Thus, the only unfair labor practice allegations in
this case involved the unilateral changes made after the facility
was moved, and the charge was filed well within the statutory 6
month period for those allegations. Respondent focuses on the
General Counsel’s contention that a successorship obligation
was established at time of the takeover, which it asserts was
beyond the 6 month period. But the complaint made no allega-
tions of unfair labor practices at that point. In relying on the
successorship bargaining obligation that began at the time of
the takeover and continued thereafter, the General Counsel was
presenting background evidence to show the existing bargain-
ing obligation that required Respondent to notify the Union and
offer to bargain about the unilateral changes. As the Supreme
Court has recognized, Section 10(b) is a statute of limitations,
not an evidentiary bar, and “earlier events may be utilized to
shed light on the true character of matters occurring within the
limitations period.” Machinists Lodge 1424 (Bryan Mfg. Co.)
v. NLRB, 362 U.S. 411, 416–417.8
On these findings of fact and conclusions of law, and, on the
entire record, I issue the following recommended9

8 It is, of course, of no consequence that the original charge, while
using general language, focused primarily on the successorship bar-
gaining obligation, not the unilateral changes. As the Supreme Court
has stated, a charge is not the same as a pleading in a private lawsuit. It
simply sets in motion the machinery of an inquiry. Thus, it is well
settled that a complaint may allege other matters related to and growing
out of the charged conduct. NLRB v. Fant Milling Co., 360 U.S. 300,
307–309 (1959) (original charge alleged general bargaining obligation,
which was dismissed, but complaint later properly issued on subsequent
unilateral changes).
9 The General Counsel’s answer to the EAJA application also dis-
putes the amount of the fees and expenses sought by Respondent,
which was augmented by a supplemental declaration filed at the time it
filed its reply. I do not reach this issue because, since the General
Counsel’s case was substantially justified, no fees and expenses are
awarded.
ROY SPA, LLC 7
ORDER
The EAJA application for fees and expenses filed by Re-
spondent is denied.10
Dated, Washington, D.C., July 12, 2016.

10 If no exceptions are filed, as provided by Sec. 102.46 of the
Board’s Rules and Regulations, the findings, conclusions, and recom-
mended order shall, as provided in Sec. 102.48 of the Rules, be adopted
by the Board and all objections to them shall be waived for all purpos-
es.