Scotch & Sirloin Restaurant; J&F Enterprises, Inc.

National Labor Relations Board - Board Decisions

Feb 29, 1988

287 N.L.R.B. 1318 (N.L.R.B. 1988)

1318 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
M.B.K., Inc . d/b/a Scotch & Sirloin Restaurant;
J&F Enterprises, Inc. and Culinary Alliance &
Bartenders Local No. 498 , Hotel and Restau-
rant Employees and Bartenders International
Alliance, AFL-CIO.' Cases 31-CA-11628 and
31-CA-11796
29 February 1988
SUPPLEMENTAL DECISION AND
ORDER REMANDING
BY CHAIRMAN STEPHENS AND MEMBERS
JOHANSEN, BABSON , AND CRACRAFT
On 28 March 1984 the National Labor Relations
Board issued a Decision, Order , and Direction of
Second Election in this proceeding,2 in which the
Board , inter alia, ordered the Respondent , M.B.K.,
Inc. d/b/a Scotch & Sirloin Restaurant (M.B.K. or
Scotch & Sirloin), to make whole certain employ-
ees for any loss of earnings suffered as a result of
the Respondent 's unfair labor practices . On 13 June
1985 the United States Court of Appeals for the
Ninth Circuit entered a Judgment enforcing the
Board 's Order .3 A controversy having arisen over
the amount of backpay due under the Board's
Order, as enforced by the court , the Acting Re-
gional Director for Region 31 issued and duly
served on the Respondents , M.B.K. and J&F En-
terprises , Inc. (J&F), a backpay , and an amended
backpay, specification and notice of hearing alleg-
ing the amounts of backpay due the discriminatees
and notifying the Respondents that they must file a
timely answer complying with the Board 's Rules
and Regulations.
On 12 September 1985 the Respondents filed an
answer to the amended backpay specification con-
sisting of unnumbered paragraphs not correspond-
ing to the allegations of the specification. The
answer was neither sworn to by the Respondents
or their attorney , nor are the post office addresses
of the Respondents provided . In the second para-
graph , the answer states that J&F "had nothing at
all to do with the ownership or running of the res-
taurant known as Scotch & Sirloin and had nothing
to do with the employment of the individuals
there ." The third and fourth paragraphs of the
answer state, inter alia, that the Regional Office
"objected" to M.B . K.'s first letter of reinstatement
sent to the discriminatees and therefore M.B.K.
' The case captions in the General Counsel's Motion for Summary
Judgment and in the original backpay specification inadvertently name
the Charging Party as Hospital and Service Employees Union , Local 399,
SEIU , AFL-CIO. We note , however , that the Charging Party was cor-
rectly named in the caption of the amended backpay specification and the
General Counsel 's supplemental motion amending the Motion for Sum-
mary Judgment
' 269 NLRB 436 (1984).
Unpublished.
sent another reinstatement letter but received no
response . The fifth and sixth paragraphs of the
answer state that Scotch & Sirloin was wholly di-
rected by James Font , who died in 1982, and that
since his death the Respondents ' counsel has acted
as president of M.B .K. These paragraphs further
assert that Font left "terrible records," and that it
was impossible for the Respondents ' counsel to de-
termine "who were bartenders and who were not
bartenders" at the time Font was in control of the
business . Finally , in the seventh , eighth, and ninth
paragraphs , the answer asserts that M.B.K. has
been "progressivly [sic] losing money," that
"Chapter 7 bankruptcy is imminent ," and that,
therefore , the instant proceeding is "reasonably
moot" and should be dismissed.
On 1 October 1985 the General Counsel filed di-
rectly with the Board a "Motion to Transfer Case
to and Continue Proceedings Before the Board, to
Strike Respondent 's Answer , and for Summary
Judgment," with exhibits attached . The General
Counsel alleges that the Respondents ' answer fails
to conform to the requirements of Section
102.54(b) and (c) of the Board's Rules and Regula-
tions in that the answer , inter alia: (1) is not sworn
to by the Respondents nor by a duly authorized
agent with appropriate power of attorney affixed,
nor are the post office addresses of the Respond-
ents provided ; (2) fails to specifically admit, deny,
or explain each and every allegation of the specifi-
cation ; (3) fails to fairly meet the substance of the
allegations of the specification denied ; (4) fails to
properly dispute the accuracy of the backpay fig-
ures or the premises on which they are based; and
(5) fails to specifically state the basis for disagree-
ment or set forth in detail any alternative premises
with appropriate supporting figures . The General
Counsel also contends that the answer raises no
issues requiring a hearing on the relationship be-
tween M.B.K. and J&F or on the backpay calcula-
tions. The General Counsel further alleges that the
Respondents are attempting to relitigate matters
previously decided in the underlying unfair labor
practice proceeding , i.e., the identity of the discri-
minatees. Finally, the General Counsel asserts that
the Respondents' purported explanations are irrele-
vant-e .g., financial ability to pay-or otherwise
insufficient to constitute an affirmative defense. Ac-
cordingly, the General Counsel requests that the
answer be stricken for failure to comply with the
Board's Rules and Regulations ; that the last five
paragraphs be stricken as insufficient to raise an af-
firmative defense; and that, pursuant to Section
102.54(c) of the Board 's Rules and Regulations, all
allegations of the backpay specification be deemed
287 NLRB No. 143
SCOTCH & SIRLOIN RESTAURANT
to be admitted as true without the taking of evi-
dence, and that summary judgment be granted.
On 3 October 1985 the Board issued an order
transferring the proceeding to the Board and a
Notice to Show Cause why the General Counsel's
motion should not be granted. The Respondents
failed to file a response. Thereafter, on 19 Novem-
ber 1985 the General Counsel filed with the Board
a supplemental motion amending the Motion for
Summary Judgment, which describes the various
manners of service on the Respondents, e g., on
their attorney and at their mutual principal place of
business, and contends that sufficient service has
been made.
On 21 November 1985 the General Counsel filed
a corrected copy of the supplemental motion
which corrects typographical errors. On 11 March
1986 the General Counsel filed a second corrected
copy of the supplemental motion with exhibits at-
tached which were inadvertently omitted from the
21 November 1985 copy of the supplemental
motion.
On 27 March 1986 the Respondents' counsel
filed an Opposition to Motion for Summary Judg-
ment with a declaration attached. The opposition
contends, pursuant to the declaration, that J&F was
not involved in the restaurant business known as
Scotch & Sirloin and that the Board had obtained a
judgment only against M B K., which was involved
in Chapter 7 bankruptcy proceedings The opposi-
tion also incorporates the Respondents' previous
answer to the amended backpay specification and is
signed by the Respondents' counsel as president of
M.B.K. and of J&F. The declaration, made "under
penalty of perjury within . . . [the] State of Cali-
fornia," relates, inter alia, how the Respondents'
counsel became involved with- M.B.K. and J&F as
their attorney, vice president, and then president.
The declaration further reiterates that J&F had
nothing to do with the ownership or operation of
the Scotch & Sirloin restaurants 4
On the entire record in this case, the Board
makes the following
° The Respondents on 17 November 1986 filed a motion to deny the
General Counsel 's motion for summary judgment and to transfer the case
back to the Regional Director for further development of the facts
Noting that M B K is currently in Chapter 7 bankruptcy proceedings,
the Respondents contend, inter alia , that summary judgment is inappro-
priate , particularly on the issue of J&F 's alleged single employer status
with M B K The Respondents also therefore request that the Board in-
struct the Regional Director to request the Bankruptcy Court to stay its
consideration of the Board 's proof of claim therein until such issues are
decided after a hearing before an administative law judge The General
Counsel filed an opposition to the Respondents ' motion We deny the Re-
spondents ' request to have the Board attempt to stay the Bankruptcy
Court 's consideration of the Board 's proof of claim In light of our deci-
sion herein , it is unnecessary to pass on the remaining portions of the Re-
spondents ' motion
1319
Ruling on the Motion for Summary Judgment
Section 102 54(b) and (c) of the Board' s Rules
and Regulations states:
(b) Contents of the answer to specification -
The answer to the specification shall be in
writing, the original being signed and sworn to
by the respondent or by a duly authorized
agent with appropriate power of attorney af-
fixed, and shall contain the post office address
of the respondent. The respondent shall specif-
ically admit, deny, or explain each and every
allegation of the specification, unless the re-
spondent is without knowledge, in which case
the respondent shall so state, such statement
operating as a denial Denials shall fairly meet
the substance of the allegations of the specifi-
cation denied When a respondent intends to
deny only a part of an allegation, the respond-
ent shall specify so much of it as is true and
shall deny only the remainder. As to all mat-
ters within the knowledge of the respondent,
including but not limited to the various factors
entering into the computation of gross back-
pay, a general denial shall not suffice As to
such matters, if the respondent disputes either
the accuracy of the figures in the specification
or the premises on which they are based, he
shall specifically state the basis for his dis-
agreement , setting forth in detail his position
as to the applicable premises and furnishing
the appropriate supporting figures.
(c) Effects of failure to answer or to plead spe-
cifically and in detail to the specification.-If the
respondent fails to file any answer to the speci-
fication within the time prescribed by this sec-
tion, the Board may, either with or without
taking evidence in support of the allegations of
the specification and without notice to the re-
spondent, find the specification to be true and
enter such order as may be appropriate If the
respondent files an answer to the specification
but fails to deny any allegation of the specifi-
cation in the manner required by subsection
(b) of this section, and the failure so to deny is
not adequately explained, such allegation shall
be deemed to be admitted to be trt'e, and may
be so found by the Board without the taking
of evidence supporting such allegation, and the
respondent shall be precluded from introduc-
ing any evidence controverting said allegation.
The amended backpay specification duly served
on the Respondents states that, pursuant to Section
102.54 of the Board's Rules and Regulations, the
Respondent "shall file an answer to said
Amended Specification within 15 days from the
1320 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
service thereof. To the extent that such answer
fails to deny allegations of the Amended Specifica-
tion in the manner required under the Board's
Rules and Regulations, and the failure to do so is
not adequately explained , such allegations shall be
deemed to be admitted to be true and the Respond-
ent shall be precluded from introducing any evi-
dence controverting them." The requirements of
the rule are set out clearly and unambiguously.
As indicated above, the General Counsel filed a
motion to strike the Respondents' answer in its en-
tirety on the basis of alleged procedural and sub-
stantive deficiencies in the answer. It is clear that
the answer filed 12 September 1985, standing alone,
is procedurally deficient in that it is neither sworn
to by the Respondents or their attorney, nor are
the post office addresses of the Respondents pro-
vided, contrary to the requirements of Section
102.54(b) of the Board's Rules. However, in his op-
position to the General Counsel's motion for sum-
mary judgment, the Respondents' attorney submit-
ted a declaration "expressly made under penalty of
perjury," which effectively cures the procedural
defects of the answer. Thus, by restating in the
declaration the essential contents of the answer and
by stating that he was both the attorney for and
operator of the Respondent corporations, the Re-
spondents' attorney provided the equivalent of a
sworn answer with power of attorney and offered
an adequate explanation of why his address instead
of the Respondents' address would suffice. Under
similar circumstances, the Board has viewed such
an attempt to cure the procedural defects of an ini-
tial answer to a backpay specification as a timely
amended answer. See, e.g., Howard R. Singer Legal
Services, 278 NLRB 902 (1986), and Standard Mate-
rials, 252 NLRB 679, 680 (1980). We further note
that Section 102.121 of the Board's Rules provides:
"The rules and regulations . . . shall be liberally
construed to effectuate the purposes and provisions
of the Act." In the particular circumstances of this
case, therefore, we find that the procedural defects
of the Respondents' answer were cured by the dec-
laration accompanying the Respondents' opposition
to the motion for summary judgment. Accordingly,
we deny the General Counsel's motion to strike the
answer in its entirety for procedural deficiencies.5
S In doing so , however, we emphasize that we will normally strike any
pleading that substantially fails to conform to the Board's procedural
rules . See, e.g., Contractors Excavating, 270 NLRB 1189, 1190 (1984). Ac-
cordingly, had the Respondents not cured the procedural defects of their
answer, we would have, in accord with the General Counsel' s request,
stricken the answer in its entirety This result, however, is arguably in-
consistent with the Board's decision in Victoria Medical Group, 274
NLRB 1006, 1007 (1985), in which the Board found a procedurally defi-
cient answer sufficient to deny the General Counsel' s motion to strike it
in its entirety . To the extent that Victoria Medical is inconsistent with
today's decision, it is overruled. ,
We further find, however, that with one excep-
tion explained below , the answer is substantively
deficient insofar as it contains general denials con-
cerning those compliance matters within the Re-
spondents' knowledge. Only the second through
sixth paragraphs of the answer can in any sense be
construed as denials of the backpay allegations, but
they are not specifically drawn. Aside from the
denial in the second paragraph regarding the al-
leged single-employer status of M.B.K. and J&F,
these denials are insufficient in that they do not
fairly meet the substance of the allegations of the
specification, nor do they reveal any basis for dis-
agreement with the backpay specification' s allega-
tions, or offer or set forth in detail with supporting
figures any alternative premises.6 Additionally, re-
garding the Respondents ' claim in the sixth para-
graph that "Font left terrible records," we note,
inter alia , that the Respondents have failed to state
that they do not have access to payroll or person-
nel records for the relevant periods, nor have they
submitted evidence regarding these matters which
clearly are within the Respondents ' possession and
control.? Moreover, regarding the Respondents'
bare assertion that the instant proceeding is moot
essentially because they are financially unable to
satisfy the backpay order, it is well settled that
"the issue in a backpay proceeding is the amount
due and not whether [the Respondents are] able to
pay."8 Thus, we agree with the General Counsel
that the last four paragraphs of the Respondents'
answer fail to comply with the requirements of
Section 102.54(b) and (c). We therefore grant the
General Counsel's motion to strike these para-
graphs from the answer, and we deem allegations 1
through 9 and 11 of the amended specification to
be admitted as true.
We find, however, that the Respondents ' general
denial of their alleged single -employer status is suf-
ficient to require a hearing. The Board has held
that a general denial of single-employer status is
sufficient to require a hearing when a respondent
named in the compliance proceeding was not made
a party to the unfair labor practice proceeding. El-
dridge Bros. Coal Co., 269 NLRB 536, 537 (1984).
8 Sneva's Rent-A-Car, 270 NLRB 1316, 1317 (1984)
Fugazy Continental Corp, 260 NLRB 1225, 1226 (1982).
Although unclear from the answer, to the extent the Respondents
allege that the "terrible" condition of the records prevents the Respond-
ents' principals from determining "who were bartenders and who were
not bartenders," we note that the underlying proceeding clearly estab-
lishes that discriminatees Replogle , Flaitz , and Sargent were employed as
a bartender, waiter , and waitress, respectively . Thus, to the extent the
Respondents are attempting to do so, these findings may not be relitigat-
ed Schorr Stern Food Corp, 248 NLRB 292, 295 (1980); American Medi-
cal Insurance Co., 235 NLRB 1417, 1418-1419 (1978).
8 Columbia Engineers, 268 NLRB 337 (1983); Star Grocery Co, 245
NLRB 196, 197 (1979).
SCOTCH & SIRLOIN RESTAURANT
As the Board noted in that case, in such circum-
stances there is nothing in the record to support
the single-employer finding and it thus is essential
that a respondent be allowed to present evidence at
a hearing concerning its liability for the unlawful
conduct . We therefore find that the Respondents'
submissions have raised issues warranting a hearing
regarding allegation 10 of the amended backpay
specification.
Accordingly, we shall grant the General Coun-
sel's Motion for Summary Judgment only in part
and shall direct a hearing limited to determining
whether J&F constitutes a single employer with
M.B.K. and thus is also responsible for remedying
the violations found in the underlying unfair labor
practice proceeding . As indicated above, however,
because we have found that the general denials of
the Respondents regarding all other allegations in
the backpay proceeding are insufficient under Sec-
tion 102 . 54(b) and (c) of the Board's Rules, we
deem the Respondents to have admitted all other
allegations to be true.
1321
ORDER
It is ordered that the General Counsel 's motion
to strike the Respondents ' answer to the amended
backpay specification is granted , except with
regard to the allegation concerning the alleged
single-employer status of M.B.K., Inc. d/b/a
Scotch & Sirloin Restaurant ; J&F Enterprises, Inc.
IT IS FURTHER ORDERED that the General Coun-
sel's Motion for Summary Judgment is granted
except with regard to the allegation concerning the
alleged single-employer status of M.B.K. and J&F.
IT IS FURTHER ORDERED that this proceeding is
remanded to the Regional Director for Regional 31
for the purpose of issuing a notice of hearing and
scheduling a hearing before an administrative law
judge for the purpose of taking evidence as to the
alleged single-employer status of M.B.K. and J&F.
The judge shall prepare and serve on the parties a
decision containing findings of fact, conclusions of
law, and recommendations based on all the record
evidence. Following service of the judge's decision
on the parties, the provisions of Section 102.46 of
the Board 's Rules and Regulations shall be applica-
ble.