Saks Fifth Avenue

National Labor Relations Board - Board Decisions

Feb 14, 1980

247 N.L.R.B. 1047 (N.L.R.B. 1980)

SAKS FIFTH AVENUE
Saks & Company d/b/a Saks Fifth Avenue and
Amalgamated Clothing and Textile Workers Union,
Pittsburgh District Joint Board, Local 86, AFL-
CIO-CLC. Case 6-CA-10505
February 14, 1980
DECISION AND ORDER
BY CHAIRMAN FANNING AND MEMBERS JENKINS
AND TRUESDALE
Upon a charge filed by Amalgamated Clothing and
Textile Workers Union, Pittsburgh District Joint
Board, Local 86, AFL-CIO-CLC, hereinafter called
the Union, and an amended charge filed by the Union,
the General Counsel of the National Labor Relations
Board, by the Acting Regional Director for Region 6,
issued a complaint dated May 26, 1978, against Saks
& Company d/b/a Saks Fifth Avenue, hereinafter
called Respondent, alleging that Respondent violated
Section 8(a)(1) and (5) of the Act by failing refusing to
recognize the Union as the exclusive representative of
its employees, refusing to bargain concerning rates of
pay and other terms and conditions of employment,
and by unilaterally changing wages, benefits, hours of
employment, and other terms and conditions of
employment.
Copies of the charge and complaint and notice of
hearing were served on Respondent and the Union.
On June 5, 1978, Respondent filed its answer to the
complaint, denying the commission of any unfair labor
practices. On November 30, 1978, Respondent, the
Union, and the General Counsel filed a motion to
transfer proceeding to the Board. The parties stipulat-
ed that they waived a hearing before an administrative
law judge, the making of findings of fact and conclu-
sions of law in an administrative law judge's decision,
and desired to submit the case for findings of fact,
conclusions of law, and order directly to the Board.
On January 10, 1979, the Board issued an order
granting the motion, approving the stipulation, and
transferring the proceeding to the Board. Thereafter
the General Counsel, Respondent,' and the Union
filed briefs.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the
National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
Upon the basis of the stipulation, the briefs, and the
entire record in this proceeding, the Board makes the
following findings:
' Respondent has requested oral argument. This request is hereby denied as
the record, the exceptions, and briefs adequately present the issues and the
positions of the parties.
247 NLRB No. 128
1. BUSINESS OF THE EMPLOYER
Respondent is a New York corporation, with its
principal office located in New York City, engaged in
the retail sale of clothing, accessories, and other
merchandise in various States, including Pennsylva-
nia. This case concerns Respondent's operations in
Pittsburgh which, until August 10, 1977, were located
on the sixth floor of the Gimbel Brothers, Inc., store,
at Smithfield Street and Sixth Avenues. Since August
20, 1977, Respondent's Pittsburgh store has been
located in a separate building at 513 Smithfield Street.
During the past 12 months, a representative period,
Respondent had a gross volume of business in excess
of $500,000. During this same period, Respondent
purchased goods and materials valued in excess of
$50,000 directly from sources outside the Common-
wealth of Pennsylvania.
The parties stipulated, and we find, that Respon-
dent is engaged in commerce within the meaning of
Section 2(6) and (7) of the Act, and we find that it will
effectuate the purposes of the Act to assert jurisdiction
herein.2
II. THE LABOR ORGANIZATION INVOLVED
Amalgamated Clothing and Textile Workers Union,
Pittsburgh District Joint Board, Local 86, AFL-CIO-
CLC, is a labor organization within the meaning of
Section 2(5) of the Act.
III. THE UNFAIR LABOR PRACTICES
A. Facts
All of the capital stock of Respondent has been
owned by Gimbel Brothers, Inc., hereinafter called
Gimbels, since 1924. Gimbels operates department
stores in several cities, including Pittsburgh, Pennsyl-
vania. Although Gimbels owns the capital stock of
Respondent, the latter operates its stores independent-
ly of Gimbels. Both stores compete with each other
with respect to the sale of certain merchandise
whenever their stores are located in the same city.
Gimbels and Respondent have separate officers, sepa-
rate accounts, and separate labor relations policies.
They also are covered by the same insurance policy
and file consolidated income tax returns. In 1973,
Brown & Williamson, Inc., purchased all of the
outstanding stock of Gimbels and, since 1975, both
the chairman of Respondent and the chairman of
Gimbels report directly to the chief executive officer of
Brown & Williamson Industries, Inc., which is the
Siemons Mailing Service. 122 NLRB 81 (1958).
1047
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
parent company of Brown & Williamson Tobacco
Corp., the present owner of the shares of Gimbels.
From about 1950 until August 10, 1977, Respon-
dent operated its old Pittsburgh store in space located
on the sixth floor of Gimbels' Pittsburgh store
pursuant to a written lease from Gimbels commencing
February 1, 1960, and continuing year to year
thereafter. In addition to the written lease, Respon-
dent subcontracted its alterations work to Gimbels.
The alterations work was performed by Gimbels
employees and Gimbels paid their social security
taxes, unemployment insurance, and workmen's com-
pensation premiums, and made income tax withhold-
ings from these same employees. Respondent paid for
the alterations services by reimbursing Gimbels for the
cost of labor in performing the work. It also paid a fee
for the supervision of Respondent's area of the
alterations workroom by a Gimbels supervisor. A
portion of the fringe benefits of the Gimbels alter-
ations employees working on Respondent's garments,
and of their supervisor, was paid by Respondent as
well. As of August 1, 1977, Respondent employed
about 110 employees at its old Pittsburgh store,
including approximately 60 to 70 selling employees; 5
fitters; and a number of clerical, stock, and adminis-
trative employees, all of whom were hired through
Respondent's personnel department.
Gimbels' alterations employees worked in two
separate work areas. One area was for Gimbels'
alterations, and the other area was for Respondent's
alterations work pursuant to its subcontract with
Gimbels. The alterations department, located on the
13th floor of the store, was divided by a partition
which separated Gimbels' employees working on
Gimbels' alterations from those Gimbels employees
working on Respondent's alterations. As of August
12, 1977, Gimbels employed 18 alterations employees
in Respondent's area, and 10 employees in Gimbels'
area. Although Respondent's workroom, which was
staffed by Gimbels' alterations employees, had been
located next to Respondent's sales area on the sixth
floor, it was moved to the 13th floor prior to 1977 to
make room for Respondent's expansion of its sales
area.
The Gimbels alterations employees in Respondent's
area performed work only on women's clothing,
whereas the alterations employees in the Gimbels' area
performed alterations on clothing for both men and
women. The more experienced Gimbels alterations
employees worked in Respondent's area. Respondent
employed and paid its own full-time fitters who
' Gimbels voluntarily recognized the Union as the exclusive bargaining
representative of its alterations employees sometime in 1937. Gimbels and the
Union have been parties to successive collective-bargaining agreements. the
most recent of which was effective from February 16, 1976, to February 15,
1979, wherein Gimbels recognized the Union as the exclusive bargaining
worked exclusively on the sales floor of the old
Pittsburgh store. They were not allowed to visit
Respondent's alterations area. Approximately three
times a year, there was interchange between the
Gimbels alterations area and Respondent's alterations
area on a temporary basis for a period of 1 week.
The manager of alterations for Gimbels, Vincent
Tartaglia, supervised all alterations employees in both
work areas, interviewed all applicants for all jobs,
recommended prospective candidates to the Gimbels
personnel office for hiring, and was responsible for the
scheduling and disciplining of all alterations work-
room employees.
All of Respondent's alterations work was coordinat-
ed by its manager of alterations, Alfred Gianta, who
relayed information between the fitters on the sales
floor and the alterations employees in Respondent's
area. Gianta spent a large portion of his workday on
Respondent's sales floor. Although Gianta supervised
the fitters and was responsible for the quality of work
done in Respondent's alterations area, he did not have
authority to hire, fire, or discipline employees in
Respondent's alterations area.
On June 15, 1976, Respondent signed a lease for a
retail store facility located at 513 Smithfield Street in
downtown Pittsburgh and, at the same time, notified
Gimbels that it would be closing its operations within
Gimbels' store. After considering several alternatives,
Respondent notified Gimbels by letter dated July 7,
1977, that it would be establishing its own alterations
workroom in its new Pittsburgh store and therefore
would no longer need to use the services of Gimbels'
alterations workroom. In a letter to Respondent's
senior vice president, John Bullis, dated July 15, 1977,
Gimbels' director of labor relations, Richard Mascaro,
asked whether Respondent would consider interview-
ing Gimbels' alterations employees, some of whom
would be displaced as a result of Respondent's
decision, for employment at Respondent's new Pitts-
burgh store. Also, in a telephone call to Bullis in late
July 1977, Mascaro expressed concern about Gimbels'
liability for severance pay under the union contract for
alterations employees and requested Bullis to consider
hiring the displaced Gimbels alterations employees.'
In a letter to Mascaro, dated July 21, 1977, Bullis
stated that Respondent's personnel director, Schmitt,
and manager of alterations, Gianta, would be inter-
viewing applicants on July 27 and 28, 1977, and that
Respondent would be happy to arrange interviews for
the alterations employees in question.
representative of its alterations employees in the Metropolitan Pittsburgh
area. The contract contains union-security and checkoff provisions. It was
negotiated between the Union and the Labor Standards Association, a
mulliemployer association of which Gimbles is a member. The contract also
covers the alterations employees of Kaufman's Department Stores.
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SAKS FIFTH AVENUE
Gimbels, through Mascaro, telephoned the Union's
)usiness representative, Sam Folino, on July 26, 1977,
nd informed him that Gimbels would be closing
Respondent's alterations work area because of the loss
)f Gimbels' subcontract with Respondent. The follow-
ng day, July 27, 1977, Mascaro met with all of the
3imbels alterations employees employed in Respon-
lent's work area to inform them of the closing of that
irea, and at the same time notify these same employ-
-es that they could apply for jobs at Respondent's new
Pittsburgh store and that Gianta would be setting up
ppointments so that they could be interviewed for
obs at the new store. That same day, Mascaro also
;ent out a form letter containing the aforementioned
nterview information to the Gimbels alterations
.mployees who had been employed in Respondent's
vork area, including those employees who were on
iacation or on sick leave at that time.
Applicants for positions as alterations employees at
,espondent's new store were interviewed by Respon-
lent's personnel director, Schmitt, in "late July and
:arly August 1977." The interviews were conducted in
lespondent's personnel office in the old store and
3ianta sat in on some of the interviews. Most of the
firing was completed before Respondent's new store
)pened on August 20, 1977. However, a few Gimbels'
alterations employees employed in Respondent's area
vere on vacation during August and were not inter-
'iewed before Respondent's new store opened. Re-
;pondent hired 16 of the 18 Gimbels alterations
:mployees who worked in Respondent's area to
)erform alterations work at its new store.
On August 2, 1977, Mascaro met with Folino,
inion business representative, and Dropkin, Interna-
ional vice president of the Union and manager of the
Jnion's Pittsburgh Joint Board. Mascaro again in-
ormed the Union that Respondent's area of the
rterations room at Gimbels would be closing and that
'Respondent had been asked to give preference to"
he Gimbels employees who would be displaced
)ecause of the closing. Additionally, Mascaro indicat-
d at the time that the Gimbels alterations employees
;mployed in Respondent's area were already inter-
/iewing with Respondent for jobs at its new Pitts-
urgh store.
Respondent closed its old Pittsburgh store on or
ibout August 10, 1977. On August 12, 1977, Respon-
lent terminated its subcontract with Gimbels concern-
ng alterations work. On that same date, all 18 of
3imbels' alterations employees who had been em-
iloyed in Respondent's area performing alterations on
:lothing sold by Respondent at its old Pittsburgh store
vere removed from Gimbels' payroll.' Gimbels has
' None of the alterations employees employed in the Gimbels' area
,rforming alterations work on clothing sold by Gimbels was laid off at that
ime.
not performed any alterations work for Respondent
since about August 12, 1977.
On August 15, 1977, the 16 Gimbels' alterations
employees, who had formerly performed Respondent's
alterations at Gimbels and had been hired by Respon-
dent, began working at Respondent's new Pittsburgh
store, which was opened on August 20, 1977. In the
new store, the employees in the alterations workroom
are directly supervised by Manager of Alterations
Alfred Gianta and by Assistant Manager of Alter-
ations Anthony Mantella. In addition to the 16
alterations employees who had previously been em-
ployed by Gimbels in Respondent's area at the old
store, there are five fitters who had previously been
employed by Respondent at the old store and had
performed fitting on women's clothing on Respon-
dent's sales floor, one newly employed fitter/tailor
who performed alterations on men's clothing, and one
additional sewer. One of the five fitters retired in
September 1977, and one tailor, who had previously
been employed by Gimbels, resigned in November
1977. During the period From August 15 through
October 31, 1977, Respondent hired one assistant
manager, one fitter/tailor to perform alterations work
on men's clothing, and one sewer to work in its
alterations workroom at the new store. Respondent
has hired no supervisory employee who was previously
employed by Gimbels as a supervisor. Respondent
added a new line of men's and children's clothing at its
new store and found it necessary to expand the
number of employees performing alterations and
fitting work to handle the new line which had not been
sold at the old store. Respondent utilizes the work-
room in the new store solely for alterations to
garments which it sells. Although the alterations
employees work with the same type of equipment and
supplies at Respondent's new store as they did at
Gimbels, the equipment and supplies used by Respon-
dent's alterations employees were purchased by Re-
spondent from sources other than Gimbels.
There was no immediate change in the weekly wage
of the employees hired, but there were changes
unilaterally made in working conditions and fringe
benefits, such as a 37-1/2 rather than a 40-hour
workweek, a different pension plan, paid vacations on
a different basis, and other changes. There is nothing
in the stipulation to indicate that Respondent condi-
tioned the hiring of the former Gimbels employees
upon their acceptance of new terms and conditions of
employment.
Respondent's new store is located in a four-story
building one block from Gimbels. At the time of the
opening of the new store, Respondent employed
approximately 350 employees, including approximate-
i
1049
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
ly 240 selling employees, and the remainder clerical,
stock, and administrative employees. None of these
Saks' employees spend any significant amount of their
working time in the alterations workroom or perform
any of the work performed by the alterations employ-
ees. Except for the fitter/tailors who spend one-third
to one-half of their working time performing fitting
work on the sales floor and the remainder in the
alterations room, the alterations employees spend all
of their working time in the alterations workroom.
Most of the alterations employees formerly em-
ployed by Gimbels work primarily, but not entirely,
on women's garments, performing the same type of
work at Respondent's new store as they formerly did
at Gimbels. Three employees who formerly performed
alterations only on women's garments while employed
at Gimbels now work primarily on men's garments
and have done so since Respondent's new store
opened. However, all of the alterations employees
formerly employed by Gimbels, as well as the sewers
hired since the new store was opened, do alterations
work from time to time on both men's and women's
garments.
On or about July 29, 1977, Henry Dropkin, an
International vice president of the Union and manager
of the Union's Pittsburgh Joint Board, had a telephone
conversation with Respondent's senior vice president,
John Bullis. During the conversation, Dropkin asked
whether Respondent would honor the collective-bar-
gaining agreement between the Labor Standards
Association and the Union. Dropkin also asked
whether Respondent would recognize the Union as the
bargaining representative of its alterations employees
at the new store. Bullis refused to honor both the
collective-bargaining agreement existing between
Gimbels and the Union, which did not expire until
February 15, 1979, and the Union's request for
recognition as the bargaining representative of Re-
spondent's alterations employees at the new store.
There have been no conversations between officials
of the Union and Respondent since July 29, 1977. On
May 26, 1978,' Dropkin sent a letter to Bullis
renewing the Union's continuing request for recogni-
tion as the exclusive representative of the alterations
employees at Respondent's new store and requesting a
meeting with Respondent. On June 1, 1978, Bullis
wrote a letter to Dropkin, which stated that Respon-
dent would bargain with the Union only when it had
been certified as the collective-bargaining representa-
tive for an appropriate unit of employees by the
National Labor Relations Board.
'On May 26, 1978, the complaint and notice of hearing were duly served on
Respondent based on a charge filed August 24, 1977, and amended May 17.
1978.
Miami Industrial Trucks. Inc.. 221 NLRB 1223 (1975), where the Board
recognized a successorship to a portion of the predecessor's operation, to wit.
B. Contentions of the Parties
The General Counsel and the Union contend that
Respondent is a successor to Gimbels with respect to
those alterations employees previously employed by
Gimbels and represented by the Union who were hired
by Respondent at its new Pittsburgh store; that
Respondent has a duty to bargain with the Union as a
successor to Gimbels; that the unit in which the Union
sought recognition is appropriate; and that Respon-
dent violated Section 8(a)(5) and (1) of the Act by
refusing to recognize and bargain with the Union on
and after July 29, 1977. Finally, they contend that
Respondent violated Section 8(a)(5) and (1) of the Act
by unilaterally setting the initial terms and conditions
of employment of the alterations employees at its new
Pittsburgh store, as 16 of the 18 employees previously
employed by Gimbels constituted a majority of Re-
spondent's alterations work force.
Respondent contends that it did not succeed to
Gimbels' obligation to bargain with the Union because
there is no continuity in the business enterprises of
Gimbels and Respondent; Gimbels did not discontin-
ue, nor did Respondent succeed to, any of Gimbel's
business operations; there is no continuity in the work
force of Gimbels and Respondent; and the bargaining
relationship between the Labor Standards Association
and the Union remained unchanged. Respondent also
contends that it is not a successor to Gimbels because
Respondent did not hire a majority of the employees
in the "relevant" bargaining unit at Gimbels that also
includes the alterations employees of another Pitts-
burgh store, May Department Stores Company, Kauf-
man Division, and employees formerly in that unit do
not constitute a majority of the members of the
appropriate unit at Respondent. Finally, Respondent
contends that, since it did not succeed to Gimbels'
obligations to bargain with the Union, it was free to
set the terms and conditions of employment for all its
alterations employees to match those of its employees
nationwide.
In view of the foregoing, Respondent submits that
the Board should dismiss the complaint.
C. Discussion and Conclusion
The Board has held that, in determining successor-
ship, the keystone is whether there is substantial
continuity of the employing industry., Continuity of
the employing industry requires consideration of the
work done, which in this case continues to be
one product line, with the successor continuing to service it for the same
customers employing four service employees. three of whom were employees
of the predecessor. See also Mondow Foods Corporation. 235 NLRB 1080. fn.
8 (1978)
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SAKS FIFTH AVENUE
alterations on clothing sold by Saks, as well as
consideration of the work force, which consists of 16
of the 18 employees formerly employed at the old
workroom operated for Saks by Gimbels, and 2 new
employees who perform alteration work on men's and
children's clothing that Saks now sells in addition to
women's clothing. The actual service rendered and the
methds of producing the service are unchanged.
Gianta, who was formerly responsible for work quality
and priority for Saks when Gimbels' premises were
used and Gimbels was doing the hiring, has become
manager of the alterations department at the new Saks
store. There is no contention that the customers served
now by Saks differ; the new store is only a block from
the former Saks location at Gimbels. In addition, the
hiatus in starting the new Saks operation was brief.'
Based on these established facts we find that Respon-
dent Saks is a successor employer to that portion of
Gimbels' businessz in which employees of Gimbels
performed alterations on women's apparel sold by
Saks while conducting a retail operation on the sixth
floor of Gimbels' store in Pittsburgh.
Saks' contention that it was free to set the terms and
conditions of employment of the 16 former Gimbels
employees it hired is based in part on its contention
that only a unit of all employees at the new store is
appropriate. This is a presumption no longer applica-
ble to department stores." We specifically find no
merit to it in this case where the newly acquired
alterations employees have a history of separate
bargaining while employed by the predecessor. As to
knowledge of union-security coverage and its implica-
tion concerning continued union support by the
employees, the parties stipulated that the contract has
Dorrance J. Benzchawel and Terrence D. Swingen. Copartners d/b/a
Parkwood IGA. 201 NLRB 905, 909 (1973), where the successor's individual
stores commenced operation "with virtually no hiatus." using the predeces-
sor's employees as a majority of the work force.
' See Allied Stores of New York. Inc. d/b/a Stern's Paramus. 150 NLRB
799, 803 (1965). Member Jenkins does not rely on Stern' Paramus
' The Board has recognized the distinct duties and interests of alteration
employees in retail stores similar to Saks. See Arnold Constable Corporation.
150 NLRB 788, 794 (1965). See also Loveman. Joseph and Loeb. Division of
City Stores Company, 147 NLRB 1129, 1131-33 (1964). where a tailor shop, a
ladies alteration workroom employing fitters, and a drapery workroom were
found a skilled, distinct, and homogenous group appropriate for collective
bargaining. Here the Saks alteration employees not only have a community of
work interest. but a history of inclusion in a unit with separate bargaining on
that basis. Accordingly, we find that they, as a distinct portion of that unit to
which Saks is the successor. constitute a unit appropriate for the purposes of
collective bargaining within the meaning of Sec. 9(b) of the Act.
Respondent's reliance on NL.R.B. v. Bausch d Lomb. Inc.. 526 F.2d 817
(2d Cir. 1975). is in our view misplaced. That case involved acquiring the use
of the premises for an entirely different business enterprise with respect to
which there was no continuity. Though the court did not find successorship as
to the boilerroom employees discharged by Bausch & Lomb. or require
bargaining, it ordered reinstatement of the boilerroom employees to their old
jobs and backpay. The court's refusal to find successorship on the ground that
to do so would "impose labor obligations never contemplated by a new
employer" is quite inapplicable here
There were five fitters sought to be included in the alterations department
unit by the Union. At the new Saks location they have the same supervision as
alterations employees. and also daily contact with them. In support of its
a union-security clause and dues-checkoff provision in
article IIl. We note that Saks' refusal to honor the
existing contract or to bargain without certification-
as reflected in its brief-falls short of asserting doubt
of continued employee support for the Union. In fact
its argument merely refers to the voluntary recogni-
tion that occurred initially, some 40 years ago, and the
lack of subsequent election and certification to con-
firm majority status since then. In these circumstances
the Board presumes continued majority status in the
absence of objective evidence to the contrary, a result
which necessarily applies to that portion of the unit to
which Saks has succeeded as the employer."'
Saks also contends that, assuming it is found to be a
successor, even under Burns " a successor is free to set
terms and conditions of employment until a majority
of the new group is hired.' The Supreme Court in
Burns recognized an exception concerning the affirma-
tive duty of an employer to consult with the bargain-
ing representative before setting terms "when it is
perfectly clear that the new employer plans to retain
all of the employees in the unit . .. ."' Given the
admitted corporate subsidiary status of Saks to Gim-
bels" and the alacrity with which Saks arranged
employment "interviews" when advised of Gimbels'
possible liability for severance pay, we conclude that
Saks intended to retain all employees, even though 2
of the 18 were not actually hired. As to those two
employees the stipulation contains no explanation.
Whether they were offered employment and declined
it does not appear. There is also no indication that
Saks conditioned employment of these Gimbels em-
ployees on acceptance of whatever terms were actually
mentioned in the interviews. Paragraph 18 of the
position the Union cites Western Distributing. Inc.. 236 NLRB 1224. 1225
(1978), where a successor hired all of its predecessor's employees to do
substantially the same work they had been doing, they became a majority of
14 in a unit of 25 (the unit found appropriate), and the Board held that all
employees in that department were thus represented by the Union. In this
case, however, fitters have historically been excluded by predecessor Gimbels
because they were directly hired, paid, and supervised by Saks. We shall not
include them because of this historical exclusion. though they could
appropriately be a part of the alterations department unit we find appropriate
"' The Board held in Virginia Sportswerar. Incorporated. 226 NLRB 1296.
1300 (1976). that the presumptions of continuing majority status that are
applicable to the predecessor employer are equally applicable to the successor.
if not overcome by the requisite kind and degree of proof.
' N. L. R.B. v. Burns International Security Services. 406 U S. 272 (1972).
* As we view this case as being within the Burns exception discussed below.
we do not reach this issue, on which then Member Fanning expressed a
separate view in Spruce Up Corporation. 209 NLRB 194 (1974).
" Also, the majority opinion in Spruce Up at 195-Chairman Miller and
Member Jenkins. with Member Kennedy concurring in part-noted that the
right could be forfeited by the new employer's failure to clearly announce
intent to establish a new set of conditions.
" Respondent in its brief states: "Saks and Gimbels are, in terms of
corporate organization, subsidiary and parent, but throughout all the years
relevant to this proceeding have conducted their operations separately and
independent from each other " We note, however, that the stipulation shows
that Gimbels files consolidated income tax returns which include operations
of Respondent, that their physical properties are insured against fire and theft
by the same insurance policies, and that both companies are covered by the
same public liability policies
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DECISIONS OF NATIONAL LABOR RELATIONS BO()ARD
stipulation simply describes in a general way certain
terms and conditions which were applied by Respon-
dent Saks, consistent apparently with terms applied to
its employees nationwide. We note also that there is a
Gimbels-Saks pension plan, differing from that of the
Union under the labor contract for alterations employ-
ees in the Pittsburgh area. This plan was extended by
Saks to the alterations employees affected, without
loss of their starting date at Gimbels, "pursuant to a
long-standing practice governing transfers between the
two companies based on this joint pension plan," as
stipulated in paragraph 18." That policy, in our view,
adds support to the conclusion that it was Respondent
Saks' intent when its workroom at Gimbels closed to
retain all the alterations employees who had been
doing its work."
We find therefore that Respondent violated Section
8(a)(5) and (1) of the Act by unilaterally setting the
initial terms and conditions of employment of the
alterations employees at its new store without bargain-
ing with their recognized representative as requested."
IV. HE REMEDY
Having found that Respondent has engaged in and
is engaging in unfair labor practices within the
meaning of Section 8(a)(5) and (1) of the Act, we shall
order that it cease and desist therefrom and take
certain affirmative action designed to effectuate the
policies of the Act.
CONCI.USIONS OF LAW
1. The Respondent, Saks & Company d/b/a Saks
Fifth Avenue, is an employer engaged in commerce
within the meaning of Section 2(6) and (7) of the Act.
2. Amalgamated Clothing and Textile Workers
Union, Pittsburgh District Joint Board, Local 86,
AFL-CIO-CLC, is a labor organization within the
meaning of Section 2(5) of the Act.
" Cf. Spruce Up Corporation. supra , on the issue of what constitutes clear,
intent to retain a predecessor's employees. a full Board case where then
Member Fanning and Member Penello. in separate opinions, concluded that
the facts fit the Burns exception. In Spruce Up, there had been a hearing at
which testimony was taken concerning the successor's intent. Then-Chairman
Miller and Member Jenkins interpreted it differently. finding no intent to
retain all the emplyees of the predecessor. Member Kennedy would have
dismissed the complaint in its entirety. In the matter before us there is only a
stipulation. and we base our finding of intent to retain all employees on the
Saks-Gimbels corporate relationship, the longstanding practice with respect to
the jint pension plan as applied to transfers of employees between the two
companies, and Saks' immediate compliance with Gimbels' expressed wish to
have these employees given hiring preference by Saks.
" See Ivo If. Denham, et al.. d/b/a he Denham Company. 218 NLRB 30.
31 (1975), where the successor distributed a leaflet on the day of transfer,
guaranteeing a minimum of 30 days' employment and later unilaterally
reduced pay and benefits. The Board found that the duty to bargain matured
upon transfer with intent to retain employees, before the unilateral changes
were made. In that case. involving the sale of an ice cream manufacturing
3. The following employees of Respondent consti-
tute an appropriate unit for the purposes of collective
bargaining within the meaning of Section 9(b) of the
Act:
All full-time and regular part-time alterations
employees, including sewers, tailors, and pressers,
employed by Respondent at its Pittsburgh, Penn-
sylvania, location; excluding all other employees,
the manager of alterations, the assistant manager
of alterations and guards, professional employees,
and other supervisors as defined in the Act.
4. Amalgamated Clothing and Textile Workers
Union, Pittsburgh District Joint Board, Local 86,
AFL-CIO-CLC, has been, and is, the exclusive
representative of all employees in the aforesaid appro-
priate unit for the purposes of collective bargaining
within the meaning of Section 9(a) of the Act.
5. By refusing, on or about July 29, 1977, and at all
times thereafter, to bargain collectively with the
above-named labor organization as the exclusive
representative of all its employees in the previously
described appropriate unit, Respondent has engaged
in, and is engaging in, unfair labor practices within the
meaning of Section 8(a)(5) and (1) of the Act.
6. By unilaterally instituting, on or about August
15, 1977, without prior notice to or consultation with
the Union, certain terms and conditions of employ-
ment affecting employees in the appropriate unit
without first bargaining with the Union, Respondent
has engaged in, and is engaging in, unfair labor
practices within the meaning of Section 8(a)(5) and (1)
of the Act.
7. By the aforesaid conduct, Respondent has inter-
fered with, restrained, and coerced, and is interfering
with, restraining, and coercing, employees in the
exercise of the rights guaranteed them in Section 7 of
the Act, and thereby has engaged in and is engaging in
unfair labor practices within the meaning of Section
8(a)(l) of the Act.
business, there was no hiatus in operations and there were no employee
interviews, facts the Board considered. We do nlot think that the occurrence of
"interviews" here requires a different result. These interviews appear
consistent with Saks' asserted independence of operation as a corporate
subsidiary of Gimbels, but the net result of the interviewing process was to
hire 16 of 18 and leave unexplained the failure to hire 2. This we find
tantamount to intention to hire all 18.
" Member Truesdale in his partial dissent on the issue of finding an 8(aXS)
violation based on Saks' setting initial terms and conditions of employment
differing from those of its "predecessor" Gimbels ignores the true facts of this
case, upon which the summary at the end of fn. 15 of the majority is based. In
the circumstances of this case the "inter iews" Saks conducted-the content
of which is only touched upon in the stipulation-do not make this case
"more akin" to those in Half:Century, Ic., d/h/a Holiday Inn of Niles
Michigan. 241 NLRB 555 (1979). From the employee standpoint, however,
the significant fact is the agreement of the panel that once Respondent Saks
hired 18 of the 20 of those who had worked for Gimbels on Saks' work there
was a bargaining obligation with the emllployees' representative.
1052
SAKS FIFTH AVENUE
8. The aforesaid unfair labor practices are unfair
practices affecting commerce within the meaning of
Section 2(6) and (7) of the Act.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor
Relations Board hereby orders that the Respondent,
Saks & Company d/b/a Saks Fifth Avenue, Pitts-
burgh, Pennsylvania, its officers, agents, successors,
and assigns, shall:
1. Cease and desist from:
(a) Refusing to bargain collectively concerning
pension, vacation, sick leave, wage increases, and
other terms and conditions of employment with
Amalgamated Clothing and Textile Workers Union,
Pittsburgh District Joint Board, Local 86, AFL-CIO-
CLC, as the exclusive bargaining representative of
employees in the previously described appropriate
unit, by failing to recognize the Union as the majority
representative of such employees, and by unilaterally
establishing terms and conditions of employment.
(b) In any like or related manner interfering with,
restraining, or coercing employees in the exercise of
the rights guaranteed them in Section 7 of the Act.
2. Take the following affirmative action which the
Board finds will effectuate the policies of the Act:
(a) Upon request, bargain with the above-named
labor organization as the exclusive representative of all
employees in the aforesaid appropriate unit, with
respect to rates of pay, wages, hours, and other terms
and conditions of employment, and embody in a
signed agreement any understanding reached with the
Union.
(b) Make whole the employees in the appropriate
unit for any wages and/or benefits lost to them by
Respondent's unlawful unilateral conduct.
(c) Post at its principal place of business in
Pittsburgh, Pennsylvania, copies of the attached notice
marked "Appendix."' " Copies of said notice, on forms
provided by the Regional Director for Region 6, after
being duly signed by Respondent's representative,
shall be posted by Respondent immediately upon
receipt thereof, and be maintained by it for 60
consecutive days thereafter, in conspicuous places,
including all places where notices to employees are
customarily posted. Reasonable steps shall be taken by
Respondent to insure that said notices are not altered,
defaced, or covered by any other material.
' In the event that this Order is enforced by a udgmeilt of a United States
Court of Appeals, the words in the notice reading "Posted by Order of the
National Labor Relations Board" shall read "Posted Pursuant to a Judgment
of the United States Court of Appeals Enforcing an Order of the National
Labor Relations Board."
(d) Notify the Regional Director for Region 6, in
writing, within 20 days from the date of this Order,
what steps Respondent has taken to comply herewith.
MEMBER TRUESDALE, dissenting in part:
Although I, like my colleagues, find that Respon-
dent is a successor to Gimbels and therefore violated
Section 8(a)(5) of the Act when it refused to recognize
and bargain with the Union after a majority of
Gimbels' former employees had been hired to work in
Respondent's new store, I do not agree that Respon-
dent further violated Section 8(a)(5) when it set initial
terms and conditions of employment which differed
from those of its predecessor. In my view, the latter
finding is contrary to Board precedent.
Contrary to the opinion expressed in footnote 15, I
do not believe the disagreement in Spruce Up, supra,
was over the employer's intent to retain the predeces-
sor's employees. Rather, four of the five Members who
participated in that decision concluded that the
employer intended to retain the former employees if
they would accept the changed conditions offered by
the new employer. The disagreement centered around
the conclusion of then-Chairman Miller and Member
Jenkins that this conditional intention to hire did not
bring the employer under the Burns exception. In
contrast, then-Member Fanning and Member Penello
believed that this conditional intention to hire brought
the employer within the Burns exception."
The extent of the disagreement in Spruce Up was
further delineated in a later case, United Maintenance
& Manufacturing Co.. Inc., 214 NLRB 529 (1974).
There, it was clear that an offer of employment under
the old contract would not have been accepted by a
majority of the predecessor's employees, because those
employees were on strike in an attempt to change
those terms. Despite the necessity of changing condi-
tions in order to hire a majority of the old employees,
the Spruce Up minority would have found an obliga-
tion on the successor employer's part to bargain over
initial terms. The majority, however, observed that
this result would place the successor in a quandary,
for, if the successor was unable to agree with the union
on terms acceptable to a majority of the old employ-
ees, it might ultimately violate Section 8(a)(2) of the
Act by having bargained with a union that never
achieved majority status. At the same time, if the
successor refused to bargain but ultimately was able to
get a majority of the old employees to work for it
under improved conditions, the successor would have
violated Section 8(a)(5).
" Member Kennedy agreed that the employer in Spruce Up had no initial
duty to bargain. Unlike the other four Members. however, he concluded that a
substantial change in the unit had occurred, and that no bargaining obligation
attached at any time.
1053
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
I am inclined to agree with the Spruce Up majority.
Accordingly, I find that, unless a successor employer
expresses an intent to hire the predecessor's employees
under the preexisting conditions, or unless the succes-
sor purposely misleads employees into believing that
they will continue under the same conditions, no
bargaining obligation attaches until the employer has
hired a majority of its employees from among the
predecessor's work force. Thus, a successor is free to
set its initial terms, but, if it subsequently hires a
majority of the predecessor's employees, it must
bargain thereafter concerning any changes in employ-
ees' working conditions.
In the instant case, I conclude that the General
Counsel has not established that Respondent intended
to retain all of the old employees. In this regard, I note
that Respondent merely invited employees to apply for
positions, and the stipulation is silent concerning
whether Respondent limited its search to employees of
its predecessor. The burden of proof concerning
Respondent's intentions is on the General Counsel,
who must prove that Respondent comes within the
Burns exception, and this burden has not been met
here.
Further, I conclude that Respondent has not been
shown to have led employees to believe that they
would be employed under the same conditions. In my
view, Denham, cited by my colleagues in footnote 16,
is distinguishable. There is no evidence that Respon-
dent promised employees that it would adhere to the
previous terms and conditions of employment, or that
any employees actually began work for Respondent
before Respondent instituted its changes. In contrast,
the employer in Denham did not institute its changes
until the employees had worked for the better part of a
workday. I find the instant facts more akin to those in
Half-Century, Inc., d/b/a Holiday Inn of Niles Michi-
gan, 241 NLRB 555 (1979). Indeed, this case is
somewhat stronger than Holiday Inn, in that here the
employees were put on notice that their jobs did not
carry over, by virtue of the necessity of applying for
jobs as new employees. In Holiday Inn, employees
were told the day before the takeover that a new
owner would assume operation of the facility, and
were told to report to work as usual. When employees
reported to work, they were offered employment
under changed conditions. The Board concluded there
that the employer was free to set its own initial terms
and conditions of employment. This result is consis-
tent with that in Starco Farmers Market, 237 NLRB
373 (1978), and the majority opinion in Spruce Up,
and I shall adhere to this Board precedent.
Notwithstanding these conclusions, I agree with my
colleagues that, although the Union's demand for
recognition was made prematurely (inasmuch as there
is no evidence that Respondent had hired a majority of
its employees from among the old work force by July
19, when the Union made its demand), the demand
was a continuing one and thereby obligated Respon-
dent to recognize and bargain with the Union once
Respondent had hired a majority of its employees
from the Gimbels work force. I am persuaded that
further demands for recognition after July 19 would
have been futile and that Respondent was aware of the
Union's continuing claim to represent a majority of
employees.
Accordingly, I concur with the finding that Respon-
dent was obligated to recognize and bargain with the
Union once Respondent had hired a representative
complement of employees, a majority of whom had
worked for the predecessor. The exact date on which
Respondent's bargaining obligation attached is un-
clear, but can be determined in the compliance stage
of these proceedings.
Finally, unlike my colleagues, I would include the
five fitters in the bargaining unit, notwithstanding
their historical exclusion. That history of exclusion
was based on the fact that, unlike the alterations
employees, the fitters were hired and supervised by
Respondent. The reason for this exclusion no longer
exists now that Respondent has opened its own
alterations unit. In my view, this result is consistent
with the views of a majority of the Board in Spruce
Up, where employees in eight historically excluded
shops were found to be an accretion to 19 shops in the
historic unit, but, due to a division within the Board
on other issues, bargaining was ordered only in the 19-
shop unit. It seems unlikely that the fitters could form
an appropriate separate unit, and their inclusion will
better serve the purposes of the Act.
APPENDIX
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
WE WILL NOT refuse to recognize and bargain
collectively with Amalgamated Clothing and
Textile Workers Union, Pittsburgh District Joint
Board, Local 86, AFL-CIO-CLC, as the exclu-
sive bargaining representative of the employees in
the following appropriate unit:
All full-time and regular part-time alterations
employees, including sewers, tailors, and press-
ers, employed by the Employer at its Pitts-
burgh, Pennsylvania, location; excluding all
other employees, the manager of alterations,
the assistant manager of alterations, and
guards, professional employees, and other su-
pervisors as defined in the Act.
1054
SAKS FIFTH AVENUE
WE WILL NOT establish terms and conditions
of employment for our employees in that unit
without first notifying, consulting, and bargaining
with the above-named Union concerning such
changes.
WE WILL NOT in any like or related manner
interfere with, restrain, or coerce the employees
in the exercise of their right to self-organization,
to form, join, or assist unions, to bargain collec-
tively through representatives of their own choos-
ing, to engage in concerted activities for the
purposes of collective bargaining or other mutual
aid or protection, or to refrain from such activi-
ties, except to the extent that such right may be
affected by an agreement requiring union mem-
bership as a condition of employment, as autho-
rized in Section 8(a)(3) of the Act.
WE WILl., upon request, recognize and bargain
collectively with Amalgamated Clothing and
Textile Workers Union, Pittsburgh District Joint
Board, Local 86, AFL-CIO-CLC, as the exclu-
sive bargaining representative of all employees in
the appropriate unit as found above, with respect
to rates of pay, wages, hours, and other terms and
conditions of employment and, if an understand-
ing is reached, embody such understanding in a
signed agreement.
WE WILL make whole the employees in the
appropriate unit for any wages and/or benefits
that were lost to them by our unlawful unilateral
conduct.
SAKS & COMPANY D/B/A SAKS FIFTH
AVENUE
1055