Royal Vending Services, Ltd.

National Labor Relations Board - Board Decisions

Jul 29, 1985

275 N.L.R.B. 1222 (N.L.R.B. 1985)

1222 DECISIONS OF NATIONAL'LABOR RELATIONS BOARD
Royal Vending Services; Ltd. and Wholesale "Drivers
& Salesmen , Local 848 International Brother-
hood of Teamsters , Chauffeurs , Warehousemen
and Helpers of America. Case 31-CA=13888-2
29 July 1985
DECISION AND ORDER
ORDER
The National Labor Relations Board adopts the
recommended' Order of the, administrative -law
judge and orders that the - Respondent, Royal
Vending Services, Ltd., Los Angeles, California, its
officers, agents, successors, and assigns, shall take
the action set forth in the Order.
BY MEMBERS HUNTER, DENNIS, AND
JOHANSEN
On 27 September 1984 Administrative Law
Judge Timothy D. Nelson issued the attached deci-
sion. The Respondent filed exceptions and a sup-
porting brief, and the General Counsel filed an an-
swering brief. '
The National Labor Relations Board has delegat-
ed its authority in this proceeding to a three-
member panel.
The Board has considered the decision and the
record in light of the exceptions and briefs and has
decided to affirm the judge's rulings, findings, I and
conclusions and to adopt the recommended Order.
i The Respondent has excepted to some of the judge's credibility find-
ings The Board's established policy is not to overrule an administrative
law judge's credibility resolutions unless the clear preponderance of all
the relevant evidence convinces us that they are incorrect Standard Dry
Wall Products, 91 NLRB 544 (1950), enfd 188 F 2d 362 (3d Cir 1951)
We have carefully examined the record and find no basis for reversing
the findings
The judge. relying on Premium Foods v NLRB, 709 F 2d 623 (9th Cir
1983), found that the Respondent failed to establish a reasonable good-
faith doubt of the Union's majority status because the Respondent did not
present evidence which unequivocally indicated that the Union's support
had declined to a minority' In the past, the Board has not required proof
of minority status to establish an employer's good-faith doubt of union
majority status Rather, on expiration of the union's first year following
certification, the Board permits the employer to show either that the
union did not enjoy majority status at the time of the refusal to bargain
or that it had a good-faith and reasonably grounded doubt, based on ob-
jective considerations, for believing that the union had lost its majority
status when it refused to bargain See Terrell Machine Co, 173 NLRB
1480 (1969), Virginia Sportswear, 226 NLRB 1296 (1976), and Bennington
Iron Works, 267 NLRB 1285 (1983) Under either the court's standard or
the Board's standard, the record evidence fails to establish that the Re-
spondent had a sufficient objective basis for a good-faith doubt of the
Union's majority status when it refused to bargain, much less that the
Union's support had declined to a minority Therefore, we find it unnec-
essary to pass on any differences between the test enunciated in Premium
Foods and the one traditionally used by the Board
We agree with the judge's finding that the Respondent did not possess
a good-faith doubt about the Union's majority status when it refused to
bargain with the Union In reaching this determination, the judge reject-
ed the Respondent's claim that employee turnover which occurred under
its predecessor's control gave rise to a good-faith doubt on the part of the
Respondent The judge rejected employee turnover because the Respond-
ent admitted that this- factor was not considered by it to determine union
support among its employees and, alternatively, even if this factor had
been considered, there is a presumption, citing Laystrom Mfg Co, 151
NLRB 1482 (1965), that new employees will continue to support the
Union in the same ratio as did the employees whom they replaced In
adopting the judge's finding that employee turnover during the predeces-
sor's operation should not be considered, we rely solely on his first
reason Accordingly, we do not pass on the judge's alternative reason or
his discussion of Laystrom Mfg Co, appearing at fn 34 of his decision
DECISION
STATEMENT OF THE CASE
TIMOTHY D. NELSON, Administrative Law Judge I
heard this case in trial at Los Angeles, California, on
June 7 and 8, 1984. It arises from an unfair labor practice
charge filed against Royal Vending Services, Ltd. (Re-
spondent) on February 6, 1984, by Wholesale Drivers &
Salesmen, Local 848, International Brotherhood of
Teamsters, Chauffeurs, Warehousemen and Helpers of
America (the Union). The charge was investigated by
the Regional Director for Region 31 of the National
Labor Relations Board (the Board), who thereafter
issued a complaint against Respondent on March 29,
1984. '
The complaint alleges in substance that Respondent
owed, and violated, a duty to recognize and bargain with
the Union as the incumbent exclusive collective bargain-
ing representative of a certain unit of its employees after
Respondent took over the vending machine sales and
service business in January 1984, formerly operated by
Bernard L. Gootkin Enterprises, Inc. (Gootkin), under
circumstances rendering Respondent a legal successor to
Gootkin. Respondent entered a timely answer to the
complaint, admitting that it has refused to recognize and
bargain with the Union, but denying that it had any obli-
gation to do so, based on alternative defenses as follows:
1. Respondent was not a legal successor to Gootkin's
bargaining relationship with the Union; or, even if it oth-
erwise satisfied conventional successorship tests.
2. Respondent had a good-faith doubt that a majority
of employees in the appropriate unit wished to be repre-
sented by the Union.
All parties appeared at trial through counsel. The
General Counsel and Respondent thereafter filed timely
posttrial briefs.
On the entire record in this case and from my observa-
tion of the witnesses, I make the following
FINDINGS OF FACT
1. INTERMEDIATE ANALYSES
The material facts relating to the question whether Re-
spondent was a legal successor to Gootkin's bargaining
relationship with the Union are not disputed, those bear-
ing on the question whether Respondent- had doubt of
the Union's "majority" status sufficient in law to warrant
withdrawal of recognition are only marginally in dispute.
The parties entered into a joint stipulation which con-
275 NLRB No. 173
ROYAL VENDING SERVICES 1223
tams most of the factual material relevant to both issues'
and they supplemented that stipulation with the introduc-
tion of testimonial and documentary evidence. Unless
otherwise indicated, findings below derive either from
the joint stipulation or from the undisputed and credible
testimony of witnesses.
A. Gootkin't Operations and Labor Relations History
Bernard L. Gootkin -Enterprises, Inc, a California cor-
poration, conducted a food, candy, music, and cigarette
vending machine sales and service business under the
name "Royal Vending," operating from a central busi-
ness location on South La Cienega Boulevard in Los An-
geles. It has historically employed between 5 and 12 em-
ployees in the unit involved.
Following a Board-conducted representation election,2
the Union was certified on March 6, 4972, as the exclu-
sive representative, of Gootkin's employees in the follow-,
ing described unit (the unit);
INCLUDED: All truckdrivers, technicians and
salesmen at the Employer's location at 1627 S. La
Clenega Blvd., Los Angeles, California.
EXCLUDED.- All other employees, office cleri-
cal employees;- professional employees, guards and
supervisors as defined in the Act.
Thereafter, Gootkin and the Union were parties 'to a
series of labor agreements, the most recent of which
became effective on July 1, 1980, and which expired, by
its terms, on June 30, 1981.3 On July 12, 1982, however,
Gootkin made this written proposal to the Union:
I propose a delay in contract negotiations .. until
January 1983 and that in the interim we continue on -
the same terms and conditions as set forth in the'
1981 contract.
The Union replied in writing- on July 22, 1982, that it
would accept Gootkin's proposal, subject to Gootkin's
agreement to pay in full by December 31, 1982, all out-
standing health and welfare trust payments due under the
labor agreement and to reimburse employees by that date
for any moneys they had been required to pay-out-of-
pocket for certain described health . care coverage.4
Gootkin subsequently signed that' counterproposal, al-
though the date on which he did so is not evident from
the record '
There is dispute between the witnesses (James Fizz-
noglia, the Union's business representative, and Bernard
Gootkin, Gootkin's owner) about the nature and extent
of communications between those parties in the ensuing
period- before Gootkin sold the business Fizznoglia and
1 The text of that point stipulation is set forth in the attached Appen-
dix -
2 The election was held on February 25; .1972 There were then five
employees in the unit found appropriate
That agreement was terminated when the Union gave Gootkin timely
written notice of termination before its staled expiration date '
4 Gootkin was then in arrears on these trust payments, a status which
he did not cure at any time before he sold the business to Respondent It
was stipulated, however, that Gootkm directly paid any medical and
dental expenses incurred by unit employees
Gootkin agree' that there was a face-to-face meeting at
Fizznoglia's office between them in March 1983 during
which the subject of Gootkin's continuing • health and
welfare trust payment arrearages was a- major subject of
discussion. Beyond that, Fizznoglia claims that he made'
repeated calls to Gootkin on -a monthly basis after March
1983 in which Gootkin' s arrearages in trust payments
continued to be a major complaint., Gootkm denies' that
such additional contacts occurred These' disputes are of
no relevance to the successorship issue and have signifi-
cance, if at all, only in assessing Royal's secondary de-
fense that it entertained, a good-faith doubt of the Union's
representative status once it took over the business. I do
not-find it necessary to resolve them in view of my anal-
yses about each defense set forth elsewhere within.
B. The Nature of the Unit in Question and its
Appropriateness -
The complaint alleges, and the answer denies, that the
bargaining unit as described in the Board's 1972 certifica-
tion is an 'appropriate one. The nature of this apparent
dispute deserves clarification. Respondent does not
appear. directly to challenge the Board's certified unit de-
scription insofar as it applied to Gootkin's operation,
rather, Respondent argues on brief that the certified unit
description is inappropriate in the context of its own op-
eration since, under its own operation, "salesmen" are an
entirely distinct-classification, under separate supervision,
and share no community of interest with its route drivers
and maintenance employees
This dispute has no ultimate significance since the
General Counsel does not contend that Respondent's
successorship obligations include a duty to recognize the
Union in a unit which would include true salesmen;5
rather, the General Counsel maintains only that Re-
spondent inherited an' obligation to recognize the Union
as the representative for the same grouping of employees
which were included in Gootkin's bargaining relationship
with the Union. And, on this latter feature, it appears,
with one immaterial 'exception, that the historically rec-
ognized unit has never encompassed true salesmen, but
only route drivers and repair mechanics. Neither is there
any dispute about the identities of the persons and classi-
fications traditionally encompassed in the bargaining unit
of Gootkin's employees
Thus, Gootkin's most recent labor agreement with the
Union, while referring to the covered group (at art. I) as
"truck drivers, technicians and salesmen," contains limit-
ing' provisions (at art. V) specifying that only "route
drivers" and "maintenance men" are covered. And the
facts show that historically the only persons treated by
the contracting parties as included in the unit were per-
sons who either did "route service" activities (i.e., driv-
ers who' deliver products to customer vending sites, per-
form occasional minor service work on the vending ma-
5 This refers to the distinction, acknowledged by Bernard Gootkin, be-
tween route salesmen, i e , driver-deliverymen (and see fn 6), and persons
who perform outside sales work by soliciting new vending site custom-
ers
1224 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
chines, and collect and tally cash receipts)e or who did
major maintenance and repair service work (i.e., mechan-
ics who drove special service vehicles to customer vend-
ing sites and who were responsible for nonroutine ma-
chine repairs and service).
The only arguable exception to the historical pattern
described above derives from testimony of employee
David Schenk that he performed a combination of out-
side sales and route driving (80 percent "outside sales"
and 20 percent route driving) for a period of years
ending in 1982. Thereafter, however, he reverted to
normal route driving tasks. The record does not specifi-
cally show whether Schenk was treated as a bargaining
unit employee during that pre-1982 period. In any case,
Schenk's exceptional hybrid function during the _ period
described would appear to be irrelevant to the question
of Respondent's successorship obligation; for it is undis-
puted that by the time Respondent. took over the busi-
ness in January 1984, the recognized bargaining unit
again consisted only of route drivers and maintenance/-
repair mechanics.
In short, despite references in the 1972 certification to
the inclusion of salesmen in the unit, and despite the ar-
guable pre-1982 aberation in the case of Schenk, - supra,
the more recent bargaining history reveals that the unit
in question has consisted of route drivers and mainte-
nance repair personnel. Hereafter, references to unit em-
ployees -(including those contained in the parties' stipula-
tion, Appendix A) are references to persons performing
those latter-described functions.7
C. The Sale of the Business to Respondent,-
Circumstances Surrounding Respondent 's Takeover
At some point in 1983 not clearly identified in the
record , Clyde Love, formerly a principal in a rival vend-
ing business called Silco West , began discussions with
Bernard Gootkin for a possible sale of Gootkin to a
group of investors consisting of Clyde Love, his sons
Russell and Jack , and a third party named William
Patton .8 At some --point before the end of December
1983, -Clyde Love and Bernard Gootkin had reached
firm arrangements for, a sale and takeover to take place
on the first business - day in January 1984 As those par-
ties contemplated it, the takeover group would form a
6 Within Gootkin's operation, it was common usage to refer to these
individuals as route salesmen This apparently accounts for the references
to salesmen in the 1972 certification and at art I 'of the labor agreement
7 There being no real dispute that such a unit is appropriate for bar-
gaining purposes, and considering that in any case a historically recog-
nized and contracted-for unit is presumptively appropriate (see, e g ,
Retail Clerks Local 324 (Vincent Drugs), 144 NLRB 1247, 1251 (1963)), 1
conclude that the unit under Gootkin's operation was an appropriate one
Moreover, inasmuch as I find below, that Royal's acquisition of the busi-
ness was not attended by any significant changes in the duties , functions,
and supervision of the route drivers and maintenance/repair persons in-
volved, I conclude that such a unit continued to be appropriate for bar-
gaining purposes under Respondent's operation -
9 Silco West is a large vending machine sales and service business op-
erating throughout California, Colorado, and Arizona Clyde Love was
its cofounder and president for many years Russell Love was also in a
managerial 'capacity By the time that Clyde Love approached Gootkin
about a sale, however, Clyde had been ousted from positions of responsi-
bility within the Silco organization by action of Silco's majority share-
holders
corporation, Royal Vending 'Services, Ltd',9 whose
president and general manager would be Russell Love.
Bernard Gootkin would be retained in a sales capacity
but would have no ownership interest in" that corpora-
tion. Clyde Love would be secretary-treasurer of the
new corporation.
With matters in this posture, Bernard Gootkin and
Clyde Love jointly conducted a meeting with Gootkin's
unit employees on the last Friday in December 1983, i.e.,
on December 30. Brief introductory remarks were made
by Gootkin in which he explained that the Love family
would be taking over the operation on the first business
day of the new year, i.e., January 3, 1984. Clyde Love
then took over the proceedings Clyde Love admittedly
told employees that "at the beginning we would leave
the salary structure the way it was We were not going
to increase or reduce any salaries, that everyone that
signed the application had the right to report,. come to
work the following Tuesday, because Monday was a hol-
iday." Clyde Love also told the assembled employees in
a disputed context that Respondent would be nonunion
after the takeover, and he also clearly indicated that Re-
spondent would not use the same insurance plan as
called for in Gootkin's most recent labor agreement.10
There were then eight employees in the Gootkin unit.
All eight of them were hired by Respondent and they
started work on January 3.11
It was not until January 2 that a purchase agreement
was signed between Gootkin and Respondent, which had
by then reserved a new corporate name, but its articles
of incorporation were not issued until January 9 The
purchase agreement was not received in evidence, there
having been some reluctance on Respondent's part to do
so because of collateral litigation in which it is involved
with Silco (discussed further elsewhere below). It was
stipulated, however, that the transaction involved, inter
alia, Respondent's "purchase . of all assets of Goot-
9 The corporate name was chosen by the takeover group to maintain a
public appearance of "continuity of the [business] name," according to
Clyde Love, noting that Gootkin had always done public business sub
nom "Royal Vending "
10 There are marginal disputes between the testimony of Clyde Love
and that of employee David Schenk about the precise context in which
Love announced an intention to be nonunion and the degree to which he
assured employees that each would continue to be employed under sub-
stantially similar conditions to those prevailing under Gootkin's oper-
ation These disputes do not require a credibility resolution since they do
not affect the question whether Respondent became a legal successor to
Gootkin's bargaining relationship with the Union In setting forth Clyde
Love's version of some of these events, however, I do not intend to
imply that I found him more credible than Schenk His quoted statements
are merely sufficient as admissions on key questions affecting the succes-
sorship issue, as I discuss separately below
l i Clyde Love observed the Gootkin employees present at the Decem-
ber 30 meeting completing the tendered application forms and he admit-
tedly believed that all Gootkin unit employees had signed such forms that
day In fact, however, only six employees completed applications on De-
cember 30 One other former Gootkin unit employee did not do so until
January 4, after he had already begun working for Respondent One
other employee either never completed such an application or it was no
longer in Respondent's files when its records were produced at this trial
It is not disputed, however, that all eight of Gootkin's unit employees
carried over to Respondent's operation Moreover, from Clyde Love's
testimony adverted to above, Clyde Love believed on December 30 that
all eight such employees would be on hand when the business began op-
erations on January 3 under new ownership
ROYAL VENDING SERVICES
kin, including all equipment, all inventory;-other tangible
assets, e g , office equipment, supplies, automobiles, all
intangible assets (including trade names, business names,
goodwill, location agreements and other contracts be-
tween Gootkin and its customers)." In addition, Clyde
Love's testimony reflects that Respondent assumed
Gootkin's liabilities, such as outstanding, suppliers' bills.12
Not all of the purchase moneys called for in the pur-
chase agreement had been paid to Gootkin when this
trial was held and, for this reason, the sale had not then
closed 13 It is undisputed, however, that Respondent's
takeover was complete as soon as it began operations
under its own name on January 3 and Gootkin was rel-
egated to a sales capacity.14
D Summary of Respondent's Operational Changes
Subsequent to the Takeover
Anticipating to some extent the subsequent legal analy-
sis, I simply advert here to the main features associated
with Respondent's, posttakeover operation and the
changes which were wrought after the business changed
hands.
From the standpoint of the unit employees, there has
been little change. They have continued to do either
route service or repair/maintenance work as before, the
only differences being matters of detail, e.g., they are' -
subject to "tighter" supervision and are required to keep
more detailed and regular inventory and other records. 1 s
In addition, Respondent has hired a security guard to
protect drivers when they return to the central facility to
unload inventory and receipts at the end of their work-
day
A major change relied on by Respondent as a ground
for arguing that there was a lack of continuity between
Gootkin's and its own operation is that there was a
period during which Respondent experienced raids on
Gootkin's former customers by Silco, resulting for a
while in a substantial loss of business. The stipulation at-
tached recites the details. As noted above, however, this
business problem has admittedly been stabilized by the
agreement between Silco and Respondent's principals to
the entry of successive temporary restraining orders in
12 Taking this assumption of liabilities into account, and adding addi-
tional cash payments, Respondent paid to Gootkin in January 30 percent
of the total purchase price
13 The purchase agreement contemplated a closing of the deal through
the making of final payments due to Gootkin on April 10, 1984 In the
meantime, there arose lawsuits and conntersuits involving Respondent,
Bernard Gootkin, and members of the Love family on the one hand, and
Silco on the other, all dealing with alleged wrongful raiding and other
trade practices The alleged customer raiding by Silco threatened Re-
spondent's continuing viability (as did the lawsuits) and the closing date
was therefore extended by written agreement between Gootkin and Re-
spondent to May 10 Because those suits had not been resolved as of May
10, Gootkin and Respondent orally agreed to an indefinite extension of
the closing date The business picture has now been stabilized by the
entry of a series of mutually agreed-to temporary restraining orders ap-
plying to all parties in the above-mentioned lawsuits '
14 On a projected basis for the 12-month period commencing January
1, 1984. Respondent will derive gross revenues exceeding $500,000 and
will furnish more than $50,000 worth of goods or services to California
customers whose operations directly affect commerce
15 As Respondent concedes, most of these tightening up features in-
volve more strict enforcement of existing rules and procedures which
were nominally in effect under Gootkm's operation
1225
their - respective lawsuits alleging wrongful trade prac-
tices And there is no dispute that Respondent has con-
tinued to operate- in the same general market area as
Gootkin did, furnishing substantially the same products
as Gootkin did Moreover, the sincerity of Respondent's
overall contention that there has been substantial discon-
tinuity of the-business operation is seriously called 'into
question by a- letter which it authorized Gootkin to mail
'to customers in the midst of the Silco raid period in
which Respondent (through Gootkin) clearly attempted
to portray itself as conducting virtually the same oper-
ation as Gootkin had done. Thus, in a widely distributed
letter to customers dated April 10, 1984, Respondent au-
thorized Gootkin to say:
Dear Valued Customer.
I am writing to, clear up any misapprehension on
your part concerning my association with Royal
Vending.
It has come to my attention that representatives
of a competing company -have been showing
,.Royal's customers a document signed- by the Cali-
fornia Secretary of State concerning Royal .Vend-
ing, Ltd.,- attempting to create. the impression that I
am no longer associated with the business.
That is simply not true, and you should question
the honesty and business ethics of anyone who has
made such a misleading suggestion to you. The true
facts are these:
In January of this, year, I agreed to take in some
new business associates, who together have more
than 100 years' total experience in the vending ma-
chine _ industry, in order to expand Royal's oper-
ations and enable us to serve you better. I am not
leaving, the business To the contrary, along with
.my new-associates, I will continue to play an inte-
gral part in Royal's operations, which will continue
as before. I expect to keep on working with you,
our valued customers, for years to come.
In connection with joining me in business, my
new associates have formed a new corporation of
their own named Royal Vending, Ltd My company
has always been known as "Royal Vending," but
this was only a trade name; its official corporate
name was actually Bernard L. Gootkin Enterprises,
Inc. For official and legal purposes, we are going to
use the name of the new corporation from here on
out, but the company will still be known as
"Royal" and its business will be the same The doc-
ument being passed around by our competitors, on
which my name does not appear, relates only to this
new corporation, Royal Vending, Ltd., whose name
we will be using: It does not, signify, much less
prove, that I have left the business-because I have
not-or that the nature of our business has
changed-it hasn't. Anyone who tells you different-
ly is simply not telling you the truth.
I look foward to seeing you soon and continuing
our fine business relationship in the years to come.
1226 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Another area of change relied on by Respondent, in
advancing 'the contention that there has been discontinu-
ity of operations 'is the fact that Respondent's takeover
plans contemplated a change in central facility location
because Gootkin's location was deemed "too small to
handle the business adequately." While- I regard that fea-
ture as legally insignificant to the successorship question,
for reasons, discussed in analysis elsewhere below, I
record here the pertinent surrounding facts: After the
takeover, Clyde Love-began a search. for a more suitable
facility which would be near the ,geographic center of
the existing operation. Near'the•first of March 1984, Re-
spondent entered, into a '62-month lease for a facility on
North Figueroa Boulevard, located about 12 miles from
the former Gootkin site. It was not until May 1984, how-
ever, that Respondent's operations were in fact moved to
the new leasehold. When the move was effected, every
unit employee then on hand made the move'
Respondent, also made a matter of record that 'its post-
takeover coplement of unit employees has undergone
some degree of turnover and has undergone a net aug-
mentation Thus, the stipulated facts reveal that between
January 13 and May 25, 1984, three unit employees left
Respondent's employ-and' that, between January 16 and
May 7,.1984, -seven unit employees were hired:16 -
E. -The Union Learns of the Sale to Respondent and
Demands Bargaining.
Despite his claims incidentally referred to elsewhere
below that '•Gootkin believed that the Union had disap-
peared from the scene and had in some way abandoned
the • bargaining unit, it is undisputed that Gootkin.had
regularly continued through 'the end of 1983 to transmit
monthly dues to the'Union on behalf of most of his- unit
employees.17 This pattern changed, however, when, in
early. January 1984; Gootkin mailed a standard dues
transmittal form to,the Union containing the notation:
"Royal Vending discontinued •as of December 31, 1983."
When the,Union's business representative, Fizznoglia; re-
ceived this communication, he telephoned Gootkin and
arranged for Gootkin to-meet with him and the Union's
legal counsel later that week • When those parties con-
vened;;Gootkin-informed the Union's agent that he had
sold the busines to-,the-Love group, but refused to dis-
close the details of the'sale^or to produce a copy of the
purchase agreement. -Acting on Gootkin's ; information,
Fizznoglia ' telephoned - Respondent's - general manager
Russell Love, who referred him to -Respondent's- attor-
ney.
Om January 19, '1984, the'Union-mailed'a letter to Rus-
sell Love captioried: "Re.''Negotiating for New Agree-
ment=New Successor," which stated in pertinent part:
18 A closer comparison of the dates of termination and hire of unit em-
ployees in the. period January 3-25, 1984,.suggests that I the unit' had
gradually increased in size to a,maximum-of 14 employees by May 7, but
then shrank back'to-12 when two additional employees severed their em-
ployment on May 7 and 25, respectively So far as this record reveals,
the latter two departing employees were not replaced
17 Six of the eight employees in the unit were having dues thus trans-
mitted by Gootkin- when he sold the business -
In accordance with our current Agreement and
the Labor Management Act of 1947, this letter is to
serve as a remainder [sic] of the Unions terminating
said agreement.
It is our desire to commence negotiations for a
new agreement as soon as possible Please notify
this office of time and place for said meeting for the
above purposes.18
Russell Love referred this communication to his attor-
ney who replied in writing on February 2, stating in per-
tinent part: -
Please be advised Royal Vending Services, Ltd. is
not a party, nor was ever a party, to a collective
bargaining agreement with [the Union].
Subsequent writings mailed to Respondent by the
Union have not been answered and Respondent has ad-
mittedly refused to deal with the Unioh'since then.
II. ANALYSIS AND CONCLUSIONS REGARDING THE
SUCCESSORSHIP ISSUE
A General Legal Setting,, the Parties' Contentions
It is not necessary to elaborate on the variety of con-
siderations which • may come into play in determining
whether an acquirer of a business entity may be deemed
a successor for labor relations purposes. Here it suffices
to observe that when a new employer takes over a for-
merly union-represented business and continues, without
substantial. hiatus in operations, to conduct essentially the
same business, using substantially the same unit employee
complement as that employed by the prior owner, the
new employer normally will be deemed a successor in
the sense of his having inherited his predecessor's duty to
recognize the incumbent union and to bargain with it re-
garding the terms and, conditions of employment govern-
ing the bargaining unit.
Thus, the Court said generally in Wiley (376 U.S. at
549):19
Employees and the union which represents them
ordinarily do not take part in negotiations leading to
a change in corporate ownership. The negotiations
will ordinarily not concern the well-being of the
employees, whose advantage or disadvantage, po-
tentially great, will inevitably be incidental to the
main considerations. The objectives of national
labor policy, reflected in established principles of
federal law, require that the rightful prerogative of
owners independently to rearrange their businesses
and even eliminate themselves as employers be bal-
anced by some protection to the employees from a
sudden change in the employment relationship
And, more substantively, the Court said in Burns (406
U.S. at 279, 281).20 -
18 When this demand was'made, seven of the eight employees in Re-
spondent 's unit were former Gootkin unit employees
11 John Wiley & Sons, v Livingston , 376 U S 543 (1964)
20 NLRB v Burns Security Services, 406 U S 272 (1972)
ROYAL VENDING SERVICES
It has been consistently held that a mere change of
employers or of ownership in'the employing indus-
try is not such an :"unusual circumstance" as to
affect the force of the Board's certification within
the normal operative period if a majority of em-
ployees after the change of ownership or manage-
ment were employed by the preceding employer.
. . . where a bargaining unit remains unchanged
and a majority of the employees hired by the new
employer are represented by a recently certified
bargaining agent2 t there is little basis for faulting
the Board's implementation of the express mandates
of §§ 8(a)(5) and 9(a) by ordering the employer to
bargain with the incumbent union
The Burns Court left no doubt that a labor relations
successor will not normally inherit his predecessor's
labor agreement unless he adopts or tacitly assumes it.
406 U.S. at 281-291. See also, e.g., World Evangelism,
Inc., 248 NLRB 909 (1980), enfd. 656 F.2d _1349 (9th Cir.
1981), Audit Services v. Rolfson, 641 F 2d 757, 763 (9th
Cir. 1981) But there is no contention by the General.
Counsel that Respondent became bound to any labor
agreement which may have bound Gootkin;22 rather, the
gravamen of the complaint is that when Respondent took
over Gootkin's operation and commenced operations 'in
its own name, using every unit employee formerly em-
ployed by Gootkin, it inherited the duty to accord exclu-
sive recognition to the Union as the bargaining agent for
those employees and, on request, to bargain with the
Union concerning future terms and, conditions, under
which they would be-employed. Respondent denies this
contention, of course But in maintaining that position,
Respondent, nevertheless, concedes on brief that if the
proper point for analysis is the January 3, 1984 date on
which it began operations in its own name, "then most of
the factors for finding successorship are present:"
Respondent, nevertheless, contends that it would be
premature to determine the successorship issue by refer-
ence merely to the facts of its operations as they re-
vealed themselves on January 3 and that, for a variety of
reasons discussed below, the question whether or not it
should recognize the Union should be deferred to the
future point when it had begun operating from the new
business location which it eventually intended to secure.
Respondent thus invokes a defensive concept suggested
by the Burns court when it spoke bf circumstances under
which it may not become apparent until the purchaser of
a business has hired a "full complement" whether a•ma--
jority of the unit employees will prove to have been car-
ried over from the prior operation, and it therefore will
21 Although the Court here alluded to the "recent certification" of the
union involved in Burns, it has been repeatedly held that when other fac-
tors favoring treating an employer as a successor are present, it is of no'
significance, as in this case, that the union may not have been "recently"
certified, or even that it may owe its exclusive representative status to
some lawful process other than a Board certification' Stewart Granite En-
terprises, 255 NLRB 569, 572 fn 16 (1981), and 'authorities cited
22 I thus do not decide the disputed question whether Gootkin and the
Union had orally agreed further to "extend" the terms of the 1980-1981
labor agreement beyond the period expressly covered by their written ex-
tension agreement set forth in findings above at sec II,A
1227
not be until the point at which such full complement has
been hired that the question of legal successorship should
be addressed . 406 U. S. at 294-295. -
B. Discussion and Conclusions
At the outset,.I note my agreement with Respondent's
above-quoted concession that unless there were extraor-
dinary features to its operations as they existed on Janu-
ary 3, Respondent plainly would be treated as a legal
successor on that date. Thus, despite Respondent's con-
clusionary_ protestations to the contrary elsewhere, this
record clearly depicts the requisite "continuity" of oper-
ations and of unit employees which are the essential in-
gredients for finding successorship.23 One could point
here simply to the' fact that it was deemed important by
Respondent itself to, continue doing business under the
Royal Vending trade name and to select a corporate
name which borrowed on that trade name . Moreover,
pointing even more clearly to the fact that Respondent's
operation was intended to continue Gootkin's business
was the letter from Gootkin to customers in which, -at
Respondent's authorization, Gootkin went to extraordi-
nary lengths to. reassure customers that the new corpora-
tion was not attended by any changes of substance in
Royal Vending's traditional operation. These features,
coupled with the critically important fact that Respond-
ent began operations with the same eight unit employees
who were employed in the same capacities by Gootkin
on its last day of operations, are more than enough to
reach the conclusion that Respondent was a presumptive
successor to Gootkin's labor relationship with the Union.
The other factors urged by Respondent as leading to a
contrary result (e.g., "tighter" supervision, more rigor-
ously enforced accounting and inventory procedures)
pale into insignificance by comparison with the hall-
marks of continuity in the employing enterprise and in
the, unit employee. complement which this record undis-
putedly shows attended Respondent's takeover.
Accordingly, there was no successorship-disqualify-
ing lack of continuity as between Gootkin's and Re-
spondent's operation of the business. Indeed, setting aside
for the moment the question whether- Respondent em-
ployed the requisite- "full complement " when it began
operations on January 3, this. record would warrant the
conclusion (which I ultimately reach) that Respondent's
labor relations successorship attached even before that
January 3 date. For, when Clyde Love announced to
employees"in the Gootkin unit on December 30 that any
unit employees who applied would be hired in Respond-
ent's operation and when he formed the conclusion on
that day that each such employee wished to continue
working under' Respondent's operation,- this made it
"perfectly clear" within the meaning of the Burn's para-
23 For a recitation of the various factors which the Board has listed as
bearing upon the question whether the requisite "continuity" exists, see,
e g, Stewart Granite Enterprises, supra, 255 NLRB at 572 , But, as noted
therein, the paramdunt test-the one on which virtually all successorship
cases ultimately turn-is whether or not the purported successor's unit
complement is comprised of a-majority of employees who carried over
from the predecessor operation 255 NLRB at 573 fn 19, and authorities
cited
1228 DECISIONS OF NATIONAL. LABOR RELATIONS BOARD
digm24 that his posttakeover complement would be com-
posed entirely of predecessor unit employees. And,
under such "perfectly clear" circumstances, a successor
owes a duty to "initially consult" with the imcumbent
union before changing--any , terms and conditions from
those prevailing under the predecessor operation. Ibid.
See- also, e g , Stewart Granite Enterprises, supra, 255
NLRB at 574.25 . - .
Accordingly, there is ample basis on this record for
presuming that a successor's bargaining duty devolved
on'Respondent as soon as it began operations 'on January
3: I consider next whether' Respondent has demonstrated
grounds adequate to conclude instead that there were•ex-
ti•aordinary circumstances in its takeover which would
justify a deferral of the successorship 'analysis pending
the 'outcome of subsequent events; in short, whether Re-
spondent was entitled, as it" maintains, to a 5-month
"wait-and-see" period, until its 'new operation became-
stabilized in it new location
I note first in this regard that'the record will not sup-
port any direct; numerically oriented claim by Respond-
ent that the eight employees whom it hired'as of January
3 did not 'amount to a-""full complement" within the
meaning of--Burns Admittedly, the identification of a
"full complement" may sometimes ' be a vexing inquiry
and -the precise meaning of the- phrase itself' is one on
which the Board and the courts of appeal have not
always agreed. But what is clear is that this record will
not allow-me to find that the unit 'of eight employees as
it • existed on-January - 3 was an extraordinarily shrunken
one-certainly not in the context-of Gootkin's operation,
and almost as clearly, not even in - the context of Re-
spondent's subsequent operation. Thus, as already noted,
while Respondent, -over the course of its first' 5 months
of-operation, has gradually augmented the unit size, it
has never expanded the unit to a point where it might be
said that the eight employees on hand on January 3 re-
flected a numerical-'minority when compared to the unit
as it existed even 5 months later.
Respondent -cites NLRB ,v. -Pre-Engineered Building
Products, 603. F.2d 134 (10th Cir. 1979), and a case cited
therein, Pacific Hide & Fur Depot v. NLRB, 553 F.2d 609•
(9th Cir. 1977), as purported precedent for its full com-
plement' argument - But the facts here are not readily
analogous to those relied on by the respective circuits in
refusing enforcement of the. Board's underlying succes-
sorship orders. Thus, in Pacific Hide, supra, unlike herein,
the predecessor's.operationShad been, drastically curtailed
immediately before the sale to a new owner. • There were
- 24 Burns, supra,' 406 US at 294-295
25 Because-of this "perfectly clear" feature, it amounts to a form of
bootstrapping for Respondent to rely on the. (in any case, -insubstantial)
changes it may have made in unit employees' conditions of employment
as detracting from the "continuity" feature For such unilateral changes
would be, under Burns, prima facie violative of Respondent's already-per-
fected duty to "initially consult" with the Union before instituting them
Stewart Granite, supra, 255 NLRB at 574' See also, e g, Alondra Nursing
Home, 242 NLRB 595,.598 at fn 12 (1979), enfd 89 LC ¶ 12,157 (9th
Cir ,1980) The complaint does not, however, allege that any such postta-
keover. by Respondent were independent violations of Sec
8(a)(5), and the General Counsel seeks only an order directing Respond-
ent to recognize and bargain collectively with the Union in response to
the Union's written demand dated January 19
seven employees at the beginning of new operations (as
compared Jo 18 in 'the predecessor's normal operation)
and that complement was steadily enlarged by the new
owner within less than 60 days to a total of 19 Similarly,
in remanding to the Board for a .closer examination of
the full complement issue in Pre-Engineered Building
Products, •supra, 26 the Tenth Circuit noted the alleged
successor's contentions that the predecessor employer
had gone completely out of business prior to the takeov-
er, and the new owner had only acquired four employees
(as compared to a total complement as high as 41 before
the predecessor had. deliberately begun to wind down
operations) when the Board held that the new owner
was a successor. In this context, the Tenth Circuit ob-
served that "when, as in this case, the predecessor busi-
ness has essentially collapsed at the time of takeover and a
successor of -necessity' must rebuild both production
demand and work force, it is incumbent upon the NLRB
to examine the available evidence to determine when the
successor employer • has obtained a full complement of
employees." (Emphasis added.) 603 F.2d at 136.
Here, however, Respondent made no showing -suffi-
cient to justify the conclusion that Gootkin's business
had essentially collapsed before the takeover or that its
own operation - on• and immediately after January 3
merely reflected a start-up phase for what would be a
materially- enlarged operation within the relatively near
future.27 And Respondent's brief, while emphasizing the
Ninth Circuit's holding in Pacific Hide, supra, ignores
more recent pronouncements by that circuit which clari-
fy (if there was ever any doubt on this score) that the
expression "full complement" does. not necessarily carry
an implication that one must wait until the successor has
hired all-of the employees it may ultimately intend to use
in its future operation before determining whether a bar-
gaining obligation attaches Thus, in Premium Foods v.
NLRB, 709 F.2d 623 (9th, Cir. 1983), the Ninth Circuit
upheld the Board's finding of successorship, holding that
-the concept of "a "full complement" is equatable with the
notion of a "substantial and representative complement "
709 F 2d at 628:
The analysis by the Ninth Circuit in Premium Foods
reflects a pulling together of a variety of strains in the
law of successorship and contains an especially thorough
26 In the underlying proceeding, the Board had rejected attempts by
the alleged successor in that case to adduce certain evidence bearing on
the full complement 'question The Tenth Circuit remanded the case to
the Board for the taking of the employer's proffered evidence and inti-
mated no view as to the ultimate merits 603 F 2d at 136
27 Clyde Love testified that he has been looking towards the acquisi-
tion of additional vending businesses and that Respondent's purchase of
Gootkm was done with this in mind There was no showing, however,
that any particular additional acquisitions were in the offing when Re-
spondent took over Gootkin And, at the time of this trial, more than 6
months after Respondent's takeover, Respondent still had not taken any
firm steps towards the acquisition of additional vending businesses so far
as this record reveals I am thus unpersuaded by any argument that Re-
spondent was not in full operation on January 3, simply because Re-
spondent hopes at some indefinite future point to operate on a greater
scale than Gootkin ever did In this regard, the comments of the Tenth
Circuit in Pre-Engineered Building Products, supra, are most pertinent "It
would be ludicrous to postpone defining a full complement until the suc-
cessor of a small enterprise had achieved the status of a multibillion
dollar international corporation " 603 F 2d at 136
ROYAL VENDING SERVICES 1229
examination of the legal evolution and significance of the
Burns-inspired notion of a "full complement." Its disposi-
tions of Premium's (i.e., the successor's) defenses also
largely dispose of the similar arguments made by Re-
spondent in support of its central claim that it was enti-
tled to wait and see for more than 5 months after it took
over Gootkin before coming to grips with-the question
whether its unit employees were entitled to continued
union representation. For these reasons, it deserves quo-
tation at some length.28
The "full complement" standard attempts to
define when the makeup of the controlling majority
is to be determined. . The count need not be de-
layed until the employer has completed the hiring
of all employees in the bargaining unit. The deter-
mination of whether a "full complement" exists in-
volves striking a balance between the objective of
allowing the' maximum number of employees a
voice in selecting their bargaining representative
and the goal of assuring that the . employees have
representation as quickly as possible. . .
• In non-successor cases involving the original
• election of a bargaining representative for an ex-
panding unit, the Board has required. a substantial
complement, representative of the skills and types
of employees who will ultimately constitute the
unit, . . The "substantial and representative"
standard embodies-the balance•between- early repre-
sentation and maximum participation that-lies at the
heart of the "full complement" concept. . It: is
thus appropriate to apply the "substantial and-repre-
sentative" standard in. successor employer cases
such as this. - - . -
..In determining whether a substantial and repre-
sentative complement was, present on a given date,
the Board considers whether the job classifications
designated for the operation were filled or substan-
tially filled and whether • the operation was in
normal or substantially normal production
The Board also takes into account the size of the
complement on that date and the time expected to
elapse - before a substantially,- larger complement
would be at work . . as.well as the relative cer-
tainty of the employer's expected expansion . . I . -
If a substantial increase in the size of the employ-
ee complement is expected with reasonable certain-
ty in a relatively short time, a delay in counting.the
majority is appropriate. . .
In the case of a.successor employer, the condi-
tion of the predecessor and the size of its comple-
ment are relevant considerations.. Where ,a successor
takes over a business which has -essentially • col-
lapsed, so that the successor must rebuild both pro-
duction demand and work force, it inay'take,.some
time to achieve a , full complement -. , ., On - the
other hand, where the successortakes over. from a
business in full operation, even if the successor has
plans for expansion, a representative complement is
28 Quotations are from the opinion at 709 F 2d at 628, et seq I have
omitted citations and footnotes The Circuit's analysis of piecedents have
been omitted as well
usually present on the date the new employer
begins production . . .
Here, the ALJ- found that Premium did not
employ a full complement of workers 'when it began
operations on August 4 or in the days -immediately
following. He found, however, that a representative
complement was achieved by August 26, the date
that the Union requested bargaining -
Premium contends that the company was not
able to operate profitably with only nine employees,
including Anderson, and notes that the complement
for Swift in normal times was twelve to thirteen.
Premium argues that Swift was "moribund" and
that more than three weeks were required to rebuild
business. Racicot had plans for expansion, and ex-
pected Premium to take up to two years to reach
full profitable production, with an ultimate comple-
ment of eighteen. Nonetheless, Premium suggests
that an appropriate date for determining the status
of a majority, of its workers would be January 26,
1981, when the workforce, including Anderson,
reached twelve
Premium began operations with five-rank-and-file
employees, plus Anderson. During the first three
weeks of operation, several new workers . -were
hired; others resigned or were fired. By August 26
the workforce had stabilized at eight rank-and-file
employees, plus Anderson. On that date, all of
Swift's job- classifications 'were substantially filled.
Premium was able to continue operations with this
complement for the next five months, until the in-
troduction of a new product required hiring addi-
tional workers.
While Premium did not take over "an on-going
business, continuing its operations essentially un-
changed," .. . neither was Swift "moribund" as
was the predecessor in Pre-Engineered Bldg. Prod-
ucts. Swift served 230 customers at the time it
closed, approximately half `of whom continued to
-patronize Premium. 'There was no significant hiatus
in production. Swift closed on Friday, August 1,
and Premium'started up on Monday, August 4 The
complement on August 26 was the same size as
Swift's complement when it closed, and differed by
only three or four workers from Swift's unit in or-
dinary times.
While Premium's president planned to expand op-
erations, an employer cannot always "delay • its bar-
gaining obligations until it has expanded its business
to the proportions contemplated when it purchased
the enterprise." . . . The time expected to reach the_
planned expanded production was two years, too
.great a time to delay employee representation. On
August.26; ' plans for, future hiring were uncertain,
since additional hiring would depend on. increased
sales. On • that date, Premium was not engaged in
immediate recruiting or hiring -. .. . The number of
employees- in the unit remained constant for the
next five months, and nothing in the record indi-
cates.that the one full-time and two part-time work-
ers added in January, 1981, brought new or differ-
1230 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
ent skills to the unit which would render the previ-
ous complement unrepresentative. -
-There is thus substantial evidence in the record as
a whole to support the finding of the ALJ and the
Board that on August 26 Premium employed a sub-
stantial, and representative complement. Since five
of the eight rank-and-file employees in the bargain-
ing unit on that date were former Swift employees,
such workers formed a majority of Premium's
workforce, and Premium had a duty to bargain
with the Union.
Applying the same considerations set forth in the
Ninth Circuit's analysis in Premium Foods,29 I conclude
that Respondent's complement of eight employees as of,
January 3 was substantial and representative of its in-
tended posttakeover complement. Respondent's showing
that 'there was some turnover in unit employees and a
relatively small and gradual augmentation in the unit size
in the months thereafter was insufficient to demonstrate
that its January 3 complement was unrepresentative.
I deal finally with some lingering aspects of Respond-
ent's claim that it did not acquire a successor's labor rela-
tions obligations as soon as it took over Gootkin's busi-
ness.
Respondent places heavy reliance on the fact that it in-
tended to move its facility as soon as it could find suita-
ble new quarters Apparently recognizing that a subse-
quent plan to move its facility would not, in itself, affect
the question of the fullness (or representativeness) -of its
unit complement as it existed on January 3, Respondent
argues that the likelihood of a future move made it diffi-
cult to assume that its inherited unit work force .would
choose to follow it to the new location. Thus, here, Re-
spondent is not contending that its January 3 comple-
ment was less than full; rather, Respondent raises a doubt
whether, the persons employed on that date would con-
tinue to constitute a majority in its complement after
such a move.
Without passing on the hypothetical question whether
a successor's plans to move its new operation to another
location might, in certain circumstances, be- analogous to
the considerations which influenced the Burns Court • to
pronounce that , a full complement must be on hand
before a successorship bargaining duty will attach, I con-
clude in these circumstances that Respondent's professed
doubt whether its January 3 unit employees would be
willing to follow it to its new location borders on the
specious. Central to that conclusion is the fact that Re-
29 A comparison of the underlying facts in Premium Foods with those
herein will readily disclose that Premium's unsuccessful defense was nev-
ertheless based on even stronger facts than Respondent was able to
muster Among the more obvious examples of this ' Premium did not ac-
quire either the assets or the customer relationships of its predecessor,
Swift Here, Respondent acquired both Gootkin' s assets and customers
and, unlike Premium, it plainly" [took ] over an ongoing business, continu-
ing its operations essentially unchanged." Cf. 709 F 2d at 629. Premium's
stabilized complement after 3 weeks of operations consisted of eight em-
ployees- At the time that-Premium received the union's demand for rec-
ognition, its unit complement of eight employees contained only five who
had previously worked for Swift, a bare majority Here, when the Union
demanded bargaining with Respondent on January 19 the unit comple-
ment of eight employees'still included seven who had been employed in
the Gootkin - unit
spondent did not contemplate'any move of any substan-
tial = distance; for its admitted plan was to find some
other, larger, facility which would still be located cen-
trally within the market area already served by the
Gootkin operation. Given these limits on its plan for any
relocation, it is difficult to accept that there would be
any serious doubt in January about the willingness of its
employees to follow along.30 Moreover, tending to belie
that Respondent possessed any real doubt about whether
its January 3 employees would accept such an eventual
relocation, it is noteworthy that, as far as this record
shows, Respondent made no effort to sound out those
employees on that score before hiring them. On this
record, therefore, the fact that Respondent planned even-
tually to move to another, relatively nearby location at
some indefinite future point did not provide any compel-
ling grounds for licensing it to deny its current unit em-
ployees the right to the services of the incumbent bar-
gaining representative during the interim.
Of equally dubious significance to the question wheth-
er its unit employees were entitled-to union representa-
tion from the moment it became perfectly clear that Re-
spondent would hire all of them intact-from the Gootkin
operation is Respondent's invocation of its later business
reverses, occasioned by Silco's "raid" on Gootkin's tradi-
tional customers. 'Here it would seem sufficient to ob-
serve that business conditions which later proved to
make it more difficult for Respondent to hang on to its
customers than it may have initially predicted do not ob-
viously affect the question whether-it employed - a full
complement within the meaning of Burns at the point
when it took over the operation. Neither is there any
precedent for what appears to be Respondent's implicit
and overly general suggestion that when a new operator
takes over a business in financial- difficulty, he must be
allowed some kind of shakedown period, free of collec-
tive-bargaining encumbrances, until such point as the op-
30 Respondent borrows on inapplicable authority when it cites a Board
election case, Cooper international, 205 NLRB 1057 (1973), in support of
its position in this regard In that case, involving a previously unrepre-
sented bargaining unit, the Board merely declined to conduct an election
on a pending representation petition where the "imminence of the trans-
fer of operations" coupled with a lack of certainty as to how many em-
ployees would be allowed to transfer, or would accept the transfer,
caused the Board to conclude that "no useful purpose would be served
by processing the petition at this time'- 205 NLRB at 1058 While it is
true that the "imminent" relocation contemplated a plant move of only
an 18-mile distance (from one small upstate New York town to another),
the important point is that the Board has wide discretion in determining
when to process an election petition Election cases thus do not provide
much guidance here An arguably more relevant body of cases are those
which deal with the effects on an existing bargaining relationship of a
plant transfer or relocation, where the distance of the relocation is one of
many factors which bear on the outcome See, e g, Cooper Thermometer
Co, 160 NLRB 1902, -1915 (1966) (" in this day and age when it is com-
monplace to spend considerable time traveling to and from work, ap-
proximately 45 minutes of travel time and approximately 27 miles of [ad-
ditional] distance are not so unusual as to be deemed an overriding factor
in appraising [employees' desires- to transfer]) " See also, e g , Frazer &
Johnston Co, 189 NLRB 142, 143 (1971) (relocated plant within same San
Francesco "metropolitan area" and "only 25 miles" from original plant
site), enfd as modified 469 F 2d 1259 (2d Cir 1967) Clearly Respondent
overreaches in suggesting that its plans eventually to move 12 miles to
another location within the city of Los Angeles justified its refusal to bar-
gain with employees at the location which it acquired in January and
from which it continued to operate for another 5 months
ROYAL VENDING SERVICES 1231
eration becomes stabilized from some business stand-
point 31
Accordingly, I conclude that Respondent became a
labor relations successor as soon as it took over Goot-
kin's operation on January 3-indeed , for reasons dis-
cussed above, its bargaining duty attached as of Decem-
ber 30, 1983, the point at which it was perfectly clear to
Respondent that its unit complement would consist of
former Gootkin employees as soon as Respondent were
to begin operations .32
The remaining question , which I now address, is
whether Respondent 's presumptive obligation to recog-
nize the Union by virtue of its succession to the business
was defeated by the existence of objective considerations
which would create a good -faith doubt as to the Union's
status as the majority representative of its employees.
V. THE GOOD-FAITH DOUBT DEFENSE; ANALYSIS,
INCIDENTAL FINDINGS, AND CONCLUSIONS
A. Applicable Legal Tests
It will facilitate analysis and render unnecessary the
entry of extensive additional findings to begin with an
outline of the governing tests for determining whether
Respondent was entitled in the circumstances to deny
the Union's January 19, 1984 request to bargain based on
a claimed doubt of the Union 's continuing majority
status. And, while the cases in this area are numerous, 'it
is sufficient for these purposes to borrow on the Ninth
Circuit 's discussion in Premium Foods, supra, of the tests
to be applied when a good -faith - doubt is raised by a suc-
cessor employer as a defense to the duty to recognize
and bargain with the incumbent union
In Premium Foods, the Ninth Circuit stated (709 F.2d
630, 631):
NLRB v. World Evangelism , Inc., 656 F 2d 1349,
1354 (9th Cir. 1981)
A good faith doubt must be reasonable and sup-
ported by objective considerations .12 NLRB v.
Silver Spur Casino, 623 F.2d 571, 579 (9th Cir.
1980), cert. denied, 451 U.S. 906, 101 S Ct 1973, 68
L.Ed.2d 294 (1981); NLRB v. Cornell of California,
Inc., 577 F.2d 513, 515-16 (9th Cir. 1978). In this
circuit , "the evidence presented to establish reasona-
ble good faith -doubt,- individually or cumulatively,
must unequivocally indicate that union support had
declined to a minority ." Silver Spur Casino, 623 F 2d
at 579 , quoted in N. T. Enloe Memorial Hospital v.
NLRB, 682 F 2d 790, 794 (9th Cir. 1982). 13 Evi-
dence which raises only an ambiguous inference of
loss of majority support is not sufficient Enloe Me-
morial Hospital , 682 F.2d ' at 795 No single equivo-
cal factor is enough to raise a reasonable ' doubt. See
NLRB v. Tahoe Nugget, Inc., 584 F 2d 293, 305 (9th
Cir. 1978), cert. denied , 442 U.S. 921, 99 S.Ct 2847,
61 L.Ed.2d 290 (1979).
Majority . support requires only that a majori-
ty of the unit desires representation by the union.
N. T. Enloe Memorial Hosptial v. NLRB, 682 F.2d at
795. Union support does not require union member-
ship . Sahara-Tahoe Corporation . v. NLRB, 581 F.2d
767, 772 (9th Cir. 1978), cert.- denied, 442 U.S. 917,
99 S.Ct.-2837, 61 L Ed.2d 284 (1979). See NLRB v.
Vegas Vic, Inc., 546 F.2d 828, 829 (9th Cir. 1976),
cert. denied, 434 U.S 818, 98 S .Ct 57, 54 L.Ed.2d
74 (1977); Terrell Machine-Company v. NLRB, 427
F 2d 4088, 1090 (4th Cir.), . cert. denied, 398 U.S
929, 90 S Ct..1821, 26 L.Ed.2d 91 (1970).
Once a union has been certified or recognized, it
enjoys a presumption of continued majority status.
NLRB v. Ejdo, Inc., 631 F.2d 604, 606-07 (9th Cir.
1980) This presumption is irrebuttable for a reason-
able time, usually one year, and is rebuttable there-
after Id, Pioneer Inn Associates v. NLRB, 578 F.2d
835, 838 (9th Cir 1978). A successor employer may
rebut the presumption and refuse to bargain with
the previously-recognized union only if he can
show that the union in fact no longer represents a
majority of the members of the bargaining unit, or
that he has a reasonable good faith doubt of majori-
ty support . NLRB v. Edo, • Inc., 631 F.2d at 607;
3 i Here, Respondent simply leans too heavily on comments made by
the respective circuits in Pre-Engineering Building Products , and Pacific
Hide & Fur, supra , cases which , unlike herein , involved the takeover of
essentially "moribund" business operations whose employee complements
had been drastically reduced in the immediate , pretakeover period The,
Ninth Circuit 's opinion in Premium Foods , supra , adequately distinguishes
those cases from cases of the present type See 709 F 2d at 629-630
32 This conclusion may be only academic, for, as noted . the complaint
does not contend that Respondent has made any unlawful unilateral
changes and the General Counsel has not sought , a restoration of the
status quo ante -the initiation of any changes which Respondent may have
made in unit employees ' terms and conditions of employment as they pre-
vailed under Gootkin Rather , it merely alleges that Respondent violated
its bargaining duty when it refused the Union's January 19, 1984 request
to commence negotiations for a new labor agreement .. -
12 The test for a good faith doubt is an objective one A doubt
must be reasonably based 'on objective evidence regardless of the
employer's subjective belief NLRB v Tahoe Nugget, Inc, 584 F 2d
293, 299-301 & n 25 (9th Cir - 1978), cert denied , 442 U S 921, 99
S Ct 2847 , 61 L Ed 2d 290 ( 1979) In the absence of a decertifica-
tion petition by the employees themselves ,, the preferred course for
an employer with doubts ' about the union's 'majority is to petition
for a new election 'Id' at - 302 See, Zim 's Foodhner, Inc v :NLRB,
495 F 2d 1131, 1139 (7th Cir ), cert denied, 419 U S 838, 95 S Ct
66, 42 L Ed 2d 65 (1974)
13 Compare NLRB v Tahoe Nugget, Inc , 584 F 2d 293 , 304-08
(9th Cir 1978): cert denied , 442 U S 921, 99 S Ct 2847, 61
L Ed 2d 290 (1979) (employee discontent , turnover, union inactivi-
ty, low union membership , financial difficulties of the union, and
bargaining history were insufficient individually and cumulatively,
where none of the evidence was wholly referable to a decline in
union support) with Dalewood Rehabilitation Hospital, Inc V
'NLRB, 566 F 2d 77, 80 (9th Cir 1977) (although individual factors
might have been insufficient, cumulatively they provided an ade-
quate basis - for reasonable doubt)'
B:- The Basis for Respondent 's Claimed Doubt of
Continuing Union Majority; Related Findings
This , is what Respondent states on brief , summarizing
the, factors it assertedly relied on in doubting the Union's
continued majority status.33
33 Respondent refers to itself as "Royal , Vending" in the quoted pas-
sages below - -
1232 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
In this case, Royal Vending possessed an abun-
dance of objective evidence to support its good
faith doubt of the Union's continued majority status.
Royal Vending was informed by Bernard Gootkin
before it purchased Gootkin's assets, and upon the
Union's first contact with Royal Vending, of nu-
merous factors which would lead a reasonable
person to believe that the Union no longer repre-
sented a majority of the employees. Royal Vending
was told that the last collective bargaining agree-
ment had expired in January 1983 and the Union
had made no attempt to negotiate with Gootkin
since -that expiration Further, the Union had not
filed any grievance or unfair labor practice charge
during 1983 concerning the lack of bargaining. In
addition, Gootkin had changed terms and conditions
of employment during 1983 and no unfair labor
practice charge or grievance had been filed over
these changes. Gootkin was no longer making any
contributions to the Union health and welfare fund
and was no longer submitting dues for a substantial
proportion of its employees.
Gootkin told Royal Vending of this history of in-
activity between the Union and the employees it
supposedly represented. Royal Vending additionally
was informed that there had been no Union steward
at Gootkin for several years It was told that the
Union had not visited the employees at the work
site, inspected the work site, or posted any Union
material for years. Bernard Gootkin told Royal
Vending management that the last employee meet-
ing he was aware of was conducted several years
earlier and only one employee had attended. Final-
ly, Royal Vending was_ informed that the Union had
been certified almost 12 years earlier by a margin of
only one vote and that not a single employee who
voted in the election still was employed by Goot-
kin.
This record contains more evidence bearing on the ul-
timate question of Respondent's good-faith doubt of the
Union's majority-none of it supportive of Respondent's
position. (Some facts of central significance to the issue
are recorded elsewhere below) But, at the outset, I must
register my belief that even if the record relied on by
Respondent in its quoted summary assertions were inter-
preted inexactly the favorable terms by Respondent, its
showing fails to satisfy the tests as set forth in the quoted
passages from the Ninth Circuit's opinion in Premium
Foods, supra. Thus, Respondent's showing relies ultimate-
ly on information which it gleaned from Gootkin before
it purchased the business tending to show that the -Union
had been "inactive" in enforcing the prior labor agree-
ment , that it had not vigorously pursued negotiations for
a new agreement with Gootkin after the agreed-upon ex-
tension had assertedly expired at the end of December
1982, that there had been no union steward for some
time, that the Union had been certified in 1972 based on
a one-vote majority, and that, in the succeeding 12 years,
there had been a wholesale turnover in the identities of
the unit employees. Singularly lacking in this showing,
however, is any direct evidence bearing on the proper
central focus in cases , raising good-faith doubt issues;
namely, "objective" evidence which "individually or cu-
mulatively'. . unequivocally indicate[s] that union sup-
port had declined to a minority" NLRB v. Premium
Foods, supra And, while Respondent correctly observes
that the other factors which it cites (union inactivity,
substantial employee turnover,34 etc.) may properly be
considered cumulatively as part of the examination of the
question, Respondent has cited no case in which such in-
direct factors by themselves have been held to justify a
refusal to bargain with the incumbent union . Rather, in
every case cited by Respondent, there was also present
some credible affirmative evidence that substantial num-
bers of employees no longer desired union representa-
tion.35
I would thus reject Respondent's showing based
simply on the absence of any direct evidence that any of
its unit employees did not wish to be represented by the
Union. 3 6
It is thus perhaps superfluous to note that Respond-
ent's showing on the "doubt" issue conspicuously ignores
another set of facts admittedly known to it at the time it
acquired the business; that is, that Gootkin had been reg-
ularly transmitting dues to the Union on behalf of six of
the eight employees who were employed in the unit- at
the time the takeover by Respondent occurred In this
regard, while generally claiming that he was unaware of
any presence by the Union in Gootkin's operation Clyde
Love admittedly engaged in a pre-takeover review -of
34 Respondent will not get far in any claim that the wholesale turnov-
er in that Gootkin unit complement over the 12 years since the Union's
certification gives rise to doubt about the Union's continued majority
support Not only did Russell Love admit that he accorded no weight to
this factor , but there is a recognized presumption that in a "normal" turn-
over situation new unit employees will continue to support the union in
the same ratio as did the employees whom they had replaced Laystrom
Mfg Co, 151 NLRB 1482 (1966), revd on other grounds 359 F 2d 799
(7th Cir 1966) Cf, e g, Arkay Packaging Corp, 227 NLRB 397 (1976),
affd sub nom New York Printing Pressmen v NLRB, 575 F 2d 1045 (2d
Cir 1978), discussed further in the next footnote (such a presumption
"unwarranted and unrealistic " in strike situation attended by the intro-
duction of striker replacements to the unit 227 NLRB at 397-398) Here,
we are presented with only a "normal turnover situation" and the Lays-
trom presumption is thus applicable
35 Respondent cites New York Printing Pressmen v NLRB. 575 F 2d
1045, 1049 (2d Car 1978), as purportedly establishing that "union failure
to police the union-security provision of the contract and general inac-
tivity constitutes sufficient evidence to allow employer to refuse to bar-
gain " This overstates the Second Circuit's holding to a considerable
degree and ignores a variety of unique circumstances present in that case
which are not present here-most notably , that there had been a strike
and the unit employees as to whom the union had not sought to enforce
the union-security provisions were striker replacements 575 F 2d at 1048,
1049
36 It is to the credit of Respondent 's counsel on brief that he ignores
the vague, conclusionary . and hearsay assertion made at one point by
Russell Love that Bernard Gootkin had told him "that there were some
employees there that did not want to be part of the union " When exam-
ined by Respondent 's counsel as to particulars of this communication,
Russell Love could only recall the name of one employee mentioned by
Gootkin in this regard Nothing more specific on the point was ever of-
fered and I was struck by the half-hearted quality of Russell Love's testi-
mony at this juncture I regard it as an unreliable embellishment , particu-
larly where it was offered only after Clyde Love had already testified
exhaustively about the grounds on which Respondent assertedly relied
for its claim of doubt and had failed to link Respondent's refusal to bar-
gain with the Union to any claimed evidence of actual employee dissatis-
faction with the Union
ROYAL VENDING SERVICES
Gootkin's dues transmittal records 'showing that six of
the eight unit employees were then paying dues to the
Union - When considered against this background, Re-
spondent's claimed belief that the Union lacked employ-
ee support simply because it had been "inactive" under
Gootkin's operation takes on a hollow character,
indeed .37,
In summary, Respondent has not, in the circumstances,
established sufficient objective grounds for concluding
that the Union lacked majority support among its unit
employees when it ignored the Union's January 19, 1984
demand for bargaining. I thus find that Respondent vio-
lated Section 8(a)(5) and, derivatively, Section 8(a)(1), of
the Act by refusing to recognize and, on the Union's re-
quest, to bargain collectively with it, as the exclusive
representative of the employees in the unit involved
herein 38,And I shall provide in my recommended Order
that Respondent cease and desist therefrom and immedi-
ately notify the Union in writing that it will recognize
and bargain in good faith with it
Based on the foregoing and on the whole record, I
enter these summaries
CONCLUSIONS OF LAW
1. Respondent is an employer engaged in commerce
within the meaning of Section 2(6) and (7) of the Act.
2. The Union is a labor organization within the mean-
ing of Section 2(5) of the Act.
3. At all times material the Union has been and is now
the exclusive collective-bargaining representative in an
appropriate unit of Respondent's employees, described as
follows'
All route. service drivers and vending machine
maintenance/repair personnel employed by Re-
spondent at its facility at 2810 North Figueroa, Los
Angeles, California; but excluding all other employ-
ees, guards, and supervisors as defined in Section
2(11) of the Act.
4. By refusing to recognize and, on the Union's request
dated January 19, 1984, bargain collectively with the
Union as the' exclusive representative of its employees in
3' The Loves (Clyde and Russell) were scarcely strangers to union re-
lationships When they were principals in the Silco business, their em-
ployees were also represented by the Union and each had had prior deal-
ings with the Union's representative. Fizznoglia, during their tenure at
Silco Clearly, their professed belief that the Union had simply aban-
doned Gootkin's operation and that this, in turn, indicated loss of em-
ployee support, reflects their untoward desire to ignore any evidence to
the contrary, such as evidence that a majority of employees in the Goot-
kin unit were paying dues to the Union Russell Love was admittedly
aware, incidentally, that Gootkin could not lawfully deduct dues from
employees' paychecks and transmit them to the Union without affirma-
tive authorizations from the employees themselves In any case, Respond-
ent's professed ignorance of the Union's presence in Gootkin's operation
does not properly figure in an analysis of the good-faith doubt issue D &
F Super Market, 208 NLRB 891, 892 (1974)
39 My conclusions of law contain a unit description tailored to con-
form to the realities of Respondent's operation (and those of Gootkin's
pretakeover operation as well), in which "salesmen" clearly do not share
any community of interest with the employees now admittedly employed
in the unit, i e , route service drivers and vending machine maintenance/-
repair persons They also refer to the new location at which those em-
ployees work - -
1233
the unit with respect to their wages, hours of work, and
other terms and conditions of employment, Respondent
has engaged in, and is engaging in, unfair labor practices
within the meaning of Section 8(a)(5) and (1) of the Na-
tional Labor Relations Act.
On these findings of fact and conclusions of law and
on the entire record, I issue the following recommend-
ed39
ORDER
The Respondent, Royal Vending Services, Ltd., Los
Angeles, California, its officers, agents, successors, and
assigns, shall
1. Cease and desist from
(a) Refusing to recognize and to bargain collectively in
good faith with the Union as the exclusive representative
of employees in the unit with -respect to those employees'
wages, hours of work, and other terms and conditions of
employment.
(b) In any like or related manner interfering with, re-
straining, or coercing employees in the exercise of the
rights guaranteed them by Section 7 of the Act
• 2. Take the following affirmative action necessary to
effectuate the purposes of the Act.
(a) Immediately notify the Union in writing that it will
and does accord to the Union recognition as the exclu-
sive representative of employees in the unit and that it
will promptly meet and-bargain collectively in good faith
with the Union respecting those employees' wages, hours
of work, and other terms and conditions of their employ-
ment
(b) Honor that commitment by meeting promptly with
the Union, on its request, for purposes of collective bar-
gaining and by 'bargaining in good faith during such
meetings and, on the Union's request, by reducing to
writing and signing any agreement thus reached.
(c) Post the attached notice marked "Appendix B."40
Copies of said notice, on forms to be provided by the
Regional Director for Region 31, shall be signed immedi-
ately by the Respondent's authorized agent and posted
immediately at the Respondent's premises for 60 consec-
utive days including in all places where notices to em-
ployees are customarily posted. Respondent shall take
reasonable steps to ensure that said notices are not al-
tered, defaced, or covered by other material.
(d) Notify the Regional Director in writing within 20
days from the date of this Order what steps the Re-
spondent has taken to comply.
39 If no exceptions are filed as provided by Sec 102 46 of the Board's
Rules and Regulations, the findings, conclusions, and recommended
Order shall, as provided in Sec 102 48 of the Rules, be adopted by the
Board and all objections to them shall be deemed waived for all pur-
poses
40 If this Order is enforced by a Judgment of a United States Court of
Appeals, the words in the notice reading "Posted by Order of the Na-
tional Labor Relations Board" shall read "Posted Pursuant to a Judgment
of the United States Court of Appeals Enforcing an Order of the Nation-
al Labor Relations Board "
1234 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
APPENDIX A
1.(a) On February 25, 1972, an election was held for
certain employees of Bernard L. Gootkin Enterprises,
-Inc., d/b/a Royal Vending (herein called Gootkin).. The
Charging Party "CP" was subsequently certified as the
exclusive collective bargaining representative in the unit
described in the attached certification (herein called the
Unit).
(b) On February 25, 1972, there were five-employees
in the Unit. At all times between February 25, 1972 and
December 31, 1983, there were between five and twelve
employees (inclusive) in the Unit. On -December 31,
1983, there were eight employees in the Unit.
(c) Between February 25, 1972 and December 31,
1983, there was a turnover of between 90 and 100 em-
ployees in the Unit. .
(d) None of the employees in the Unit on February 25,
1972 remained therein, on December 31, 1983
(e) After Respondent entered into the Purchase Agree-
ment to purchase Gootkin's business, on January 2, 1984,
it (Respondent) hired all eight of Gootkin's employees in
the Unit Respondent has since hired one additional em-
ployee in the Unit on each of the following days in 1984•
Jan. 16; Feb. 6,-'Feb. 21, March 11, March 24, April 10
and May 7.' One employee in the Unit, left Respondent's
employ on each of the following dates in 1984: Jan. 13,
May 14 and May 25.
(f) Of the eight employees of Gootkin in the Unit who
.were hired by Respondent on January 2, 1984, six have
remained continuously in the Unit to date, one remained
in. the Unit until January 31, 1984 and -one remained in
the Unit until May 14.- The dates of hire under Gootkin
of the six such employees still in the Unit were as fol-
lows- May '74, Jan. '75; July '77,:Nov. '77, May '79 and
March '83. The date of hire -under Gootkin'-of the em-
ployee who left the Unit on May 14, 1984 is April '73:
(g) On January 19,. 1984, there were eight employees
in the Unit. Seven of these eight were former employees
of Gootkin in the Unit as "of December'31, 1983. -
2 Respondent entered ' into a purchase agreement with
Gootkin for the purchase of Gootkin's vending machine
business on January 2, 1984. The purchase 'agreement
provided, inter alia, for the purchase by Respondent of
all assets of Gootkin, including all equipment, all inven-
tory, other tangible assets (e.g office equipment, sup-
plies, automobiles), all intangible . assets (including trade
names, business names, goodwill , location agreements
and other contracts between Gootkin and its customers).
As of the present date, the purchase by Respondent of
Gootkin has not been closed.
3. When Respondent entered into the Purchase Agree-
ment to purchase Gootkin's vending machine business on
January 2, 1984, it initially occupied the same facility
where Gootkin has been located, located at 1627 S. La
Cienega Avenue, Los Angeles, California. On or about
March 1, 1984,, Respondent leased a facility located at
2810 N. Figueroa, Los Angeles, California. The lease
-was for a term of five years, two months. Respondent
moved to the new location in May, 1984. The Figueroa
location is approximately 12 miles from the La Cienega
location.
4. (a) Dues were'checked off by Gootkin and remitted
to the Union during calendar year 1983 for eight em-
ployees in the Unit. Two of these eight employees left
the Unit in June 1983. The other six of these employees
were employed by Gootkin through the end of 1983 and
were among the employees hired by Respondent when it
entered into the Purchase Agreement to purchase Goot-
kin's business on January 2, 1984 -Of these latter six em-
ployees, two left the Unit on January 13 and -May 14,
1984, respectively. The other four have continued to be
in the Unit to date.
(b) During calendar year 1983, dues were not checked
off by Gootkin nor remitted to the Union for five em-
ployees in the Unit: Two of these employees left the
Unit in February 1983 and a third left in June 1983. The
other two such employees were employed continuously
by Gootkin through December 31, 1983 and have contin-
ued to be in the Unit to date.
5. Gootkin's files do not contain any written record of
any notification to the Union of the termination of em-
ployment of any of its Unit employees in 1983, with the
exception of Joint Exhibits 1, 2 and 3, which are submit-
ted herein
6., During calendar year 1983, Gootkin did not pay any
medical and paid (for three months) dental insurance
payments to the Union trust fund. However, Gootkin did
pay all medical and dental bills of its Unit employees
during this period. -
7. (a) On December 31, 1983, Gootkin had 398 cus-
tomers! All 398 customers initially became customers of
Respondent when Respondent entered into the Purchase
Agreement to purchase Gootkin 's business in January
1984.
(b) From January 1, 1984 through May 31, 1984, 117
of Gootkin's former customers cancelled their relation-
ship. with Respondent. Of these 117, 68 cancelled in
order to commence doing business with Silco West, a
competing vending service company. Of these 117, 3
pulled prior to January 19, 1984; 60 pulled between Janu-
ary 19 and April 13, 1984; 54 pulled after April 13, 1984.
"Pulled" is-defined as the date the -vending machines or
other equipment was removed; accounts usually are can-
celled 3 to 4 weeks before machines are-pulled.
(c) Of the 398 customers of Gootkin as of December
31, 1983, 281 have remained customers of Respondent to
date. -
(d) From January 1, 1984 through May 31, 1984, Re-
spondent gained 102 new customers (not formerly cus-
tomers of Gootkin). It gained four of such new custom-
ers by January 19, 1984, 73 between January 19 and
April 13, 1984 and 21 since April 13, 1984.
(e) Gootkin's gross revenues for December 1983 were
$156,142 79. The average total monthly revenue (based
on 1983 data) that Gootkin derived from the 117 custom-
ers that cancelled during the first-five months of 1984
was $48,075. The average total monthly revenue that
Gootkin derived from the 68 customers (based on 1983
data) that cancelled to do business with Silco during this
period was $30,447. The average total monthly gross
revenue that Respondent has gained from the 102 new
customers it has secured in 1984 is $41,534
ROYAL VENDING SERVICES
8. Gootkin's customers consisted primarily of street
business , (e.g., bars/restaurants) and industrial companies.
Since Respondent entered into the purchase agreement
to purchase Gootkin 's business , its customers have also
consisted of primarily street businesses , (e.g.,
bars/restaurants) and industrial companies . The sort of
products sold in 1984 by Respondent substantially con-
form with the sorts of products sold in 1983 by Gootkin.
9 (a) On September 8, 1983, Clyde Love et al. filed a
lawsuit , Case No. 111049, in the California State Court
of Tulare County against SILCO CORPORATION, et
al , alleging that Defendants were liable in damages for
fraud , infliction of emotional distress , breach of contract
and breach of duty to minority shareholders ; this com-
plaint was amended on April 6 , 1984 to add Russell
Love as a Plaintiff. This action generally relates to al-
leged misconduct by Defendants against Plaintiffs in con-
nection with Plaintiffs ' employment at or business with
Silco.
(b) In March 1984, SILCO CORP ., et al. filed a law-
suit for damages and injunctive relief in the Superior
Court for the State of California, for the County of Los
Angeles, Case No. C491041, against Clyde Love , Russell
Love and Royal Vending, alleging that Defendants were
liable for intentional interference with contractual rela
tions and prospective economic advantages , misappro-
priation of confidential information and trade secrets, and
unfair competition,
(c) On April 11, 1984, Defendants - Cross-Complain-
ants, Clyde Love, Russell Love, Royal Vending Serv-
ices, Ltd., Bernard L: Gootkin Enterprises and Bernard
L. Gootkin filed a cross complaint against Cross-Defend-
ants SILCO, et al., Case No. 491041, for damages and in-
junctive relief, alleging that Cross-Defendants were liable
for sales below cost, loss leader sales , locality discrmina-
tion, declaration of illegality of contracts, breach of con-
fidentiality agreements, misappropriation of confidential
information and trade secrets, 'defamation , intentionally
inducing breach of contract , wrongful interferences with
prospective economic relationships, unfair competition,
and conspiracy
(d) On or about April 13, 1984, the California Superior
Court, for the County of Los Angeles, entered an order
temporarily restraining both Plaintiffs-Cross-Defendants
and Defendants-Cross-Complainants from raiding or oth-
erwise contacting each other's customers. That Tempo-
rary Restraining Order has been extended by stipulation
1235
of the parties every two weeks, and is presently due to
expire - on June 21, 1984.
10. Many of Gootkin's customers had distributed to
them in around April 1984 a document that has been
marked and will be submitted as Joint Exhibit 4.
11. By use of the term "The Unit," Respondent does
not waive its denial of paragraph 6 of the Complaint.
APPENDIX B
NOTICE TO EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
The National Labor Relations Board has found that we
violated the National Labor Relations Act and has or-
dered us to post and abide by this notice.
Section 7 of the Act gives employees the right to
form , join , or assist unions, to bargain collectively with
their employers through representatives freely chosen by
a majority of them , to engage in other group activities
for their mutual aid and protection on the job , and to re-
frain from any or all such activities , except to the extent
that they may be required by a lawful union -security
agreement to fulfill certain financial obligations of union
membership after they have been employed for a certain
grace period (in our industry, 30 days).
• WE WILL NOT refuse to recognize and bargain collec-
tively in good faith with Teamsters Local 848 as the ex-
clusive representative of our employees described above.
WE WILL NOT in any like or related manner interfere
with , restrain , or coerce employees in the exercise of the
rights guaranteed in Section 7 of the Act.
WE WILL immediately notify Teamsters Local 848 in
writing that we-are recognizing them as the representa-
tive of our employees described above and that we will
promptly meet with that Union to bargain in good faith
about those employees' wages, hours of work, and other
terms and conditions of their employment.
WE WILL on requests meet and bargain in good faith
with Teamsters Local 848 - and, if we reach agreement,
and that union requests it, WE WILL L put any such agree-
ment in writing and sign it .
ROYAL VENDING SERVICES, LTD.