Tallakson Ford, Inc.

National Labor Relations Board - Board Decisions

May 17, 1968

171 N.L.R.B. 503 (N.L.R.B. 1968)

TALLAKSON
Tallakson Ford , Inc. and Automobile Drivers &
Demonstrators , Local Union 882 , affiliated with
the International Brotherhood of Teamsters,
Chauffeurs, Warehousemen & Helpers of Amer-
ica, Independent . Case 19-CA-3364
May 17, 1968
DECISION AND ORDER
By CHAIRMAN MCCULLOCH AND MEMBERS FANNING
AND JENKINS
On March 3, 1967, Trial Examiner James T.
Barker issued his Decision in the above-entitled
proceeding, finding that the Respondent had en-
gaged in and was engaging in certain unfair labor
practices and recommending that it cease and de-
sist therefrom and take certain affirmative action,
as set forth in the attached Trial Examiner's Deci-
sion. Thereafter, the Respondent filed exceptions to
the Decision and a supporting brief.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the Na-
tional Labor Relations Board has delegated its
powers in connection with this case to a three-
member panel.
The Board has reviewed the rulings of the Trial
Examiner made at the hearing and finds that no
prejudicial error was committed. The rulings are
hereby affirmed. The Board has considered the
Trial Examiner's Decision, the exceptions and brief,
and the entire record in the case, and hereby
adopts the findings, conclusions, and recommenda-
tions of the Trial Examiner only to the extent con-
sistent herewith.
The complaint alleges in substance that Respon-
dent violated Section 8(a)(1) and (5) of the Act by
refusing to recognize and bargain with the Union as
the representative of its employees; by failing and
refusing to assume and honor the collective-bar-
gaining agreement which was in effect between the
Union and the predecessor company, Howard; by
instituting unilateral changes in wage rates and
benefits applicable to employees in the appropriate
unit; and by negotiating directly with the em-
ployees, thereby bypassing the Union as their exclu-
sive bargaining representative. The complaint also
alleges that Respondent violated Section 8(a)(3) by
discriminating in the hire of employee William
Pearson.
The record discloses that for many years Howard
Motor Company operated a Ford franchise dealer-
' Unless indicated otherwise, all dates refer to 1966
FORD, INC. 503
ship selling automobiles, trucks, and auto parts. At
the same location it operated a service garage. A
block and a half from this principal facility, Howard
also operated a used-car lot. For more than 25
years, through a series of labor agreements,
Howard extended recognition to the Union as the
collective-bargaining representative of a unit of
new- and used-car salesmen.
In 1965 Howard commenced negotiations to sell
its business. As a result of the negotiations, Howard
entered into a buy-sell agreement with Respondent
through which Respondent agreed to purchase the
physical assets, stock of parts, and other trade as-
sets of Howard, but not the accounts receivable or
used-car inventory. Respondent did not assume the
debts, contractual obligations, or liabilities of
Howard. Howard's franchise was terminated by
Ford Motor Company on February 13, 1966.' Ef-
fective February 14, Respondent received a
franchise from Ford to sell Ford automobiles,
trucks, and parts, and commenced operations as a
Ford franchise dealer.
When Howard terminated operations on Februa-
ry 13, it employed approximately 50 employees in
the operation of its service garage, parts depart-
ment, and office facilities. The bargaining unit in-
volved herein consisted of nine salesmen. On
February 14 Respondent commenced business with
all of Howard's approximately 50 nonsales person-
nel, except Howard's office manager, 2 mechanics,
and 1 service employee. Apparently, Respondent
started operations with a staff of about eight
salesmen of whom three had been employed by
Howard. Thus, except for the composition of the
bargaining unit involved herein, the business
remained substantially the same. With regard to the
Union's numerical status in the salesmen's unit, the
parties stipulated that on and after February 14,
1966, the Union represented three or four
salesmen, but did not represent a majority of the
sales personnel employed by Respondent.
In selecting its sales force Respondent met in late
January with Howard. At this meeting, Respondent
was given access to the personnel records and in-
dividual sales production records of each Howard
salesman then employed. Thereafter, Respondent
conducted interviews with a majority of Howard's
salesmen. During these interviews Respondent ex-
plained to each the proposed terms of commissions,
bonuses, and employment. Employees Gehrig and
Bates, who accepted employment with Respondent,
were informed that their compensation or commis-
sion schedule would be modified from that in effect
171 NLRB No. 67
504 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
under the agreement between Howard and the
Union, and Gehrig was further informed that
Respondent would be "nonunion" with respect to
salesmen. The record shows that under Respon-
dent, unlike under Howard, both Gehrig and Bates
received a paid vacation, a Christmas bonus, and
medical insurance, and were provided with a
payroll saving plan. However, Respondent provided
no pension plan for salesmen whereas such a plan
was provided under the agreement between
Howard and the Union. Respondent also modified
the hours of work after commencing operations.
Respondent concedes that it did not consult with
the Union concerning changes in compensation,
pensions, and hours of work.
On February 11, after Howard's general
manager, Richard Deahl, had been engaged for the
same position with Respondent, he told employee
William Pearson, the only alleged 8(a)(3), that he
had arranged for Pearson to go to work with
Respondent. At this time Deahl showed Pearson a
written document containing details of the compen-
sation schedule, hours of work, and fringe benefits
which would be in effect under Respondent Deahl
further informed Pearson that Respondent was not
going to recognize the Union, or operate under
union wages, hours, or working conditions. Pearson
elected not to accept work with Respondent.
On March 29, 1966, the Union informed Respon-
dent that it was bound by Howard's agreement with
the Union, and demanded that Respondent pay
pension premiums required by the contract The
following day Respondent rejected the Union's
claim that it was bound by the contract between
Howard and the Union.
The Trial Examiner held that Respondent was a
successor to Howard, since he concluded that but
for antiunion considerations the composition of the
bargaining unit would have remained substantially
the same. As part of the antiunion considerations,
the Trial Examiner found that Respondent unlaw-
fully conditioned its offer of employment to em-
ployee Pearson in violation of Section 8(a)(3) of
the Act. We find merit in Respondent's exceptions
to these findings.
Among the central factors in a successorship
question is the new employer's relationship to the
old employer's work force.' Here, the parties stipu-
lated that the Union has never represented a
majority of Respondent's sales personnel and the
record further shows that a majority of Respon-
dent's sales employees had never worked for
Howard. Only a minority of Howard's employees in
the appropriate unit continued in the employ of
Respondent, and they were selected solely on the
basis of their past performance without regard to
union considerations. Indeed, the General Counsel
did not even allege a discriminatory motive in
Respondent's selection of a sales force Nor does
the record support the Trial Examiner's finding that
Respondent unlawfully conditioned its offer of em-
ployment to Pearson upon his withdrawal from the
Union. Rather, the evidence indicates that Pearson
was offered employment by Respondent but elected
not to accept only because he feared that he might
lose his pension rights. Accordingly, there is no
basis for the Trial Examiner's conclusion that the
composition of the bargaining unit would have
remained the same, except for the Respondent's
hostility to the Union.
Under the above circumstances, we conclude
that Respondent did not violate the Act as alleged.
Inasmuch as Pearson rejected the offer of employ-
ment for his own reasons, Respondent did not dis-
criminate against him in violation of Section
8(a)(3) and (1) of the Act. And since as a result of
the nondiscriminatory selection of employees by
Respondent, a majority of its employees in the unit
involved had never worked for Howard, Respon-
dent is not a successor as to that unit, and was not
obligated to bargain with the Union, which con-
cededly did not enjoy majority status.' Accordingly,
Respondent did not violate Section 8(a)(5) and (1)
by refusing to bargain with the Union. We shall
therefore dismiss the complaint in its entirety.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor
Relations Board hereby orders that the complaint
herein be, and it hereby is, dismissed in its entirety.
' Cf N L R B v Stepp's Friendly Ford I nc , 338 F 3d 833 (C A 9), enfd
in part 141 NLRB 1065
' In view of our findings herein , we need not pass upon other findings of
the Trial Examiner to which Respondent has excepted
TRIAL EXAMINER'S DECISION
STATEMENT OF THE CASE
JAMES T. BARKER, Trial Examiner: Upon an ini-
tial charge filed on April 7, 1966, and an amended
charge filed on August 5, 1966, by Automobile
Drivers & Demonstrators, Local Union 882, af-
filiated with the International Brotherhood of
Teamsters, Chauffeurs, Warehousemen & Helpers
of America, Independent, hereinafter called the
Union, the Regional Director of the National Labor
2 Thomas Cadillac, Inc, 170 NLRB 884
TALLAKSON
Relations Board for Region 19 , on August 10,
1966, issued a complaint and notice of hearing al-
leging violations of Section 8(a)(1) and ( 5) of the
National Labor Relations Act , as amended,
hereinafter called the Act . Thereafter , on Sep-
tember 21 , 1966, the Regional Director issued an
amendment to the complaint alleging violations of
Section 8 ( a)(1), (3), and ( 5) of the Act.
Pursuant to notice , a hearing was held before me
at Seattle , Washington , on October 19, 1966. All
parties were represented at the hearing and were
afforded full opportunity to be heard , to introduce
relevant evidence , to present oral argument, and to
file briefs with me . The parties waived oral argu-
ment and on December 12 filed briefs with me.
Upon consideration of the entire record and the
briefs of the parties , and upon my observation of
the witnesses , I make the following:
FINDINGS OF FACT
1. THE BUSINESS OF THE RESPONDENT
Tallakson Ford, Inc., is a Delaware corporation
with its principal place of business at 811 N .E. 45th
Street, Seattle, Washington, where it is, and has
been at all times material herein , engaged in the
sale and servicing of automotive vehicles.
Since February 14, 1966,' and at all relevant
times thereafter, the Respondent, in the course and
conduct of its business operations , has purchased
and caused to be transported and delivered to its
place of business in Seattle, Washington, directly
from States of the United States other than the
State of Washington, Ford automotive vehicles,
parts, accessories, and other goods and materials
valued in excess of $100,000. During the same
period, the Respondent realized from its aforesaid
business operations a gross income in excess of
$500,000.
Howard Motor Company, Inc., hereinafter called
Howard, has been at all relevant times a Washing-
ton corporation which, prior to February 14, had its
principal place of business at 811 N.E. 45th Street,
Seattle, Washington, and which prior to February
14 was engaged in the sale and servicing of Ford
automotive vehicles and parts. During the 12-
month period preceding February 14, Howard, in
the course and conduct of its business operations,
purchased and caused to be transported and
delivered to its place of business in Seattle,
Washington, from States in the United States other
than the State of Washington, Ford automotive
vehicles and parts and other goods and materials
valued in excess of $100,000 . During the same
period, Howard provided automotive repair ser-
All dates refer to the calendar year 1966, unless otherwise specifically
noted
Interrelated to the negotiations was the emergence of Respondent as a
corporate entity Roger Tallakson was selected as Respondent 's president
and he now serves in that capacity under a contract of employment with
the dealer development division of Ford Motor Company, which controls
FORD, INC. 505
vices and sold and distributed automotive vehicles,
parts, accessories, and other goods and materials,
realizing therefrom a gross income in excess of
$500,000.
Upon these admitted facts, I find that at all times
material herein the Respondent and Howard have
been employers engaged in commerce within the
meaning of Section 2(2), (6), and (7) of the Act.
II. THE LABOR ORGANIZATION INVOLVED
Automobile Drivers & Demonstrators, Local
Union 882, affiliated with the International
Brotherhood of Teamsters, Chauffeurs,
Warehousemen & Helpers of America, Indepen-
dent, is admitted to be a labor organization within
the meaning of Section 2(5) of the Act, and I so
find.
III. THE UNFAIR LABOR PRACTICES
A. The Issues
The principal issue presented is whether Respon-
dent is the legal successor of Howard, and, as such,
is obligated under the Act to honor the labor agree-
ment between Howard and the Union covering au-
tomobile and truck sales personnel, and to recog-
nize and bargain with the Union concerning the
wages, hours, and terms and conditions of employ-
ment of the salesmen.
Additionally, there is presented the further issues
whether (a) Respondent unlawfully bypassed the
Union and instituted unilateral changes in wages
and benefits of the sales personnel; and (b)
Respondent unlawfully conditioned the employ-
ment of William Pearson upon his withdrawal from
the Union.
B. Pertinent Facts
1. The operations of Howard
For a period of many years Howard Motor Com-
pany, Inc., operated a Ford franchise dealership on
the premises situated at 811 N.E. 45th Street, in
Seattle, Washington, where, during pertinent times,
as found above, Howard sold Ford automobiles,
trucks, and automotive parts. Additionally, at the
811 N.E. 45th Street location it operated a service
garage. Some block and a half from this principal
facility, Howard also operated a used-car lot.
2. Respondent secures franchise
In 1965 Howard commenced negotiations to sell
its business. As a result of the negotiations, Howard
entered into a buy-sell agreement with Respondent2
the preferred or voting stock of Respondent, and which, through Respon-
dent's hoard of directors, has ultimate managerial authority over Respon-
dent's operations From operating profits, Roger Tallakson has the right to
redeem the preferred stock, and ultimately to assume tull ownership of the
franchise
506 DECISIONS OF NATIONAL
through which Respondent agreed to purchase the
physical assets, stock of parts, and other trade as-
sets of Howard, but not the accounts receivable or
used-car inventory of Howard. Under the buy-sell
agreement , Respondent assumed none of the debts,
contractual obligations, or liabilities of Howard.
Through mutual understanding between Howard
and Ford Motor Company, the franchise of Howard
to sell Ford automotive units and parts was ter-
minated, effective February 13, 1966. As a con-
comitant aspect of these transactions, Respondent
received from the Ford Motor Company a franchise
to sell Ford automotive trucks and parts, effective
February 14. There was no transfer directly from
Howard to Respondent of the Howard franchise.
3. Respondent commences operations
On February 14 Respondent commenced opera-
tions as a Ford franchise dealer at the former loca-
tion of Howard situated at 811 N.E. 45th Street in
Seattle. As stipulated by the parties, at all times
since February 14, Respondent has been engaged in
substantially the same operations as those con-
ducted by Howard at said location. Like Howard,
Respondent sells used cars, but, having reached no
agreement with Howard concerning the purchase of
Howard's inventory of used cars, Respondent did
not commence to operate this phase of its business
from the Howard used-car lot. However, Respon-
dent obtained , through lease from a separate lessor,
land contin uous to the 811 N.E. 45th Street
premises . This newly leased area-approximately
one-third the size of the former Howard premises at
811 N.E. 45th Street-was used by Respondent to
expand its service facilities, store new automotive
units, and to operate its used-car facility.
For a period of nearly 3 weeks following Februa-
ry 14, Howard operated its used-car lot, disposing
of its used-car inventory.
4. Howard's collective-bargaining history
a. The employee complement
When it terminated business on February 13,
Howard employed approximately 50 employees in
the operation of its service garage, parts depart-
ment, and office facilities. Similarly, on February
13, Howard employed nine salesmen , including two
used-car salesmen.
b. The collective-bargaining agreements
In effect on February 13 were collective-bargain-
ing agreements between Howard and labor or-
ganizations covering various units of Howard's em-
ployees, including mechanics, painters, lubrication
men, and, of direct significance herein , salesmen.
Although the Union had never been certified by the
Board as the collective-bargaining representative of
LABOR RELATIONS BOARD
Howard 's salesmen , for more than 25 years through
a series of labor agreements , Howard had extended
recognition to the Union as the collective -bargain-
ing representative of all of its retail salesmen of
new- and used-motor vehicles . The latest in this se-
ries of agreements , a 1-year agreement effective
from May 1, 1964 , through April 30, 1965, had, by
its terms , automatically renewed itself through
failure of the parties thereto to serve notice of
modification or termination . The agreement con-
tained provisions governing , inter alia , the compen-
sation , hours of employment , pension , and health
and welfare benefits of employees . It contained also
provisions for grievance and arbitration.
5. Respondent 's labor relations
a. The nonsales personnel
When it commenced operations on February 14,
Respondent continued in its employ all of Howard's
approximately 50 nonsales personnel except
Howard's office manager, 2 mechanics, and a ser-
vice employee. Soon after February 14, however,
the former Howard parts manager and two office
employees were terminated.
b. Tallakson apprised of Howard labor agreements
At a meeting in late January or early February,
Roger Tallakson discussed with Larry Howard, pre-
sident of Howard , the collective -bargaining agree-
ment under which Howard had recognized various
labor organizations. Tallakson was aware, specifi-
cally, of the existence of the collective-bargaining
agreement between Howard and the Union.
c. The demands for recognition
Soon after Respondent commenced operations,
representatives of five labor organizations which
were parties to contracts covering units of
Howard 's employees met with Tallakson and
requested recognition. The Union was not
represented at this meeting. These labor organiza-
tions had contractual relations with the automotive
employers council, a representative of automobile
dealers in the greater Seattle area, of which, in
February, Respondent was not a member.
Discussed at the meeting was Respondent's
willingness to accord recognition to the various
labor organizations represented at the meeting.
This was to be accomplished by Respondent
becoming a member of the automotive council and
by thereafter adopting the existing labor agree-
ments of the council. Tallakson soon thereafter
sought from Respondent's board of directors, and
in March was granted, permission to join the coun-
cil. Respondent thereafter became a member of the
council.
TALLAKSON FORD , INC. 507
The council has no authority on behalf of its
members to consummate agreements with the
Union. Respondent was not approached by the
Union concerning recognition or bargaining, but on
March 29 Respondent received a letter from the
Union calling to Respondent 's attention Respon-
dent's failure to pay pension premiums on behalf of
its employees working under the Union's jurisdic-
tion. Moreover, in its March 29 letter, the Union
contended that the Respondent was bound by the
terms of the agreement between the Union and
Howard, dated June 2, 1964. The Union offered to
meet with Respondent to discuss the issues raised
by its letter.
d. Recognition of Union declined
On March 30, Respondent sent to the Union the
following letter:
Please be advised that Tallakson Ford Inc.
does not have a contract with Local 882 Inter-
national Brotherhood of Teamsters.
Tallakson Ford Inc., being a new Corpora-
tion did not assume any contractual obligations
or liabilities of Howard Motor Company.
6. Changes affected in sales force
a. Sales personnel selected
In the meantime , in late January , Roger Tallak-
son had met with Larry Howard, president of
Howard , and with Howard 's sales manager and
general manager. At this meeting Tallakson was
given access to the personnel records and in-
dividual sales production records of each Howard
salesman then employed. Thereafter, prior to
January 14 , Respondent 's sales manager, Huck
Trudell, conducted interviews with some of the
Howard salesmen . Additionally, an analysis of the
personnel and sales records of each of Howard's
salesmen was made by Tallakson and Trudell.
Together they made a judgment as to the potential
of each of them . Respondent employed four former
Howard salesmen , one of whom did not report to
work until on or about February 21. Three Howard
salesmen were not interviewed , were not offered
employment by Respondent , and were not in
Howard 's employ on February 13 when Howard
ceased operations.
All new and used automobile and truck
salesmen employed by Respondent at its Seat-
tle, Washington automobile and truck sales
establishment, excluding supervisors as defined
in the Act.
c. Modifications affected in compensation and terms
of employment
As found above, coincident to determining their
suitability for employment, Huck Trudell, Respon-
dent 's general sales manager, interviewed six em-
ployees of Howard. These interviews transpired a
few days prior to February 14.
Concerning these interviews, Roger Tallakson
testified:
Q. When you interviewed these prospective
employees or directed that they be inter-
viewed, did you explain to them your proposed
terms of commissions and employment,
bonuses and so on?
A. Yes.
In interviewing Howard employees James Gehrig
and David Bates , Trudell informed them that their
compensation or commission schedule would be
modified from that in effect under the agreement
between Howard and the Union, and he further
told Bates that Bates would receive a paid vacation
and a Christmas bonus. Trudell informed Gehrig
that Respondent would be "non-union" with
respect to salesmen . Both Gehrig and Bates became
employees of Respondent on February 14, and
under Respondent, unlike under Howard, each
received a paid vacation, a Christmas bonus, medi-
cal insurance , and were provided with a payroll sav-
ing plan.'
Additionally, Roger Tallakson credibly testified
that Respondent provided no pension plan for
salesmen , whereas, as found above, one is provided
under the agreement between Howard and the
Union. Tallakson further credibly testified that
soon after commencing operations he modified the
hours of work effective under the union agreement.
He conceded in his testimony that he did not con-
sult with the Union concerning these changes in
pensions and hours of work.
7. The conditional "hire" of William Pearson
a. Terms of continued employment explained
b. The Union's numerical status in the unit
The parties stipulated that on February 14 the
Union represented three or four of Respondent's
sales employees , but did not represent a majority of
employees in the appropriate collective-bargaining
unit wh ich the Respondent concedes is comprised
of.
Roger Tallakson testified that Richard Deahl,
Howard 's general manager , entered Respondent's
employ on February 14 when Respondent com-
menced operations. Deahl had been consulted
earlier with respect to assuming this position and on
or about February 7 indicated his acceptance to
Tallakson.
' A composite of statements in their affidavits , received in evidence by
stipulation of the parties, so establishes
508 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
William Pearson, who had been in Howard's em-
ploy for 27 years, testified that he had conversed
with Deahl prior to the transition of operations, and
requested Deahl to arrange for his continued em-
ployment by Respondent. Thereafter, on February
11, Deahl called Pearson to his office and told
Pearson that he had arranged for Pearson to go to
work with Respondent, and instructed Pearson,
through consultation with the Union, to secure his
pension rights so that he could withdraw from the
Union, take a few days off, and commence work
again in Respondent's employ.
Thereupon Deahl showed Pearson a written
document containing details of the com ensation
schedule, hours of work, and fringe benefits which
would be in effect for salesmen when Respondent
commenced operations. Deahl assured Pearson that
he would "do well" under the arrangement Deahl
further informed Pearson that Respondent was not
going to recognize the Union, or operate under
union wages, hours, or working conditions.
b. Pearson's duties under Howard
Pearson had been employed by Howard as a
used-car salesman In addition to his sales duties, he
was required to oversee the operations of the used-
car lot including the work of the two lot boys. For
these additional duties, he received $200 in excess
of his earned commissions. With respect to his du-
ties at the used-car lot, Pearson testified that he had
no authority to hire or discharge employees without
the permission of Howard. Pearson made prelimi-
nary appraisals of automobiles offered for trade,
but his appraisals were subject to the approval and
modification of the sales manager. Pearson worked
on the lot with another used-car salesman, but had
no authority over him.
c Pearson's pension rights
With respect to his union pension rights, Pearson
testified that he had qualified for a pension, but he
further testified that he "assumed" that if he
withdrew from the Union and was not thereafter
employed by a "union firm," he would not be eligi-
ble for his pension. He testified further that he
desired to continue to be employed after Howard
had ceased business, but that he wanted to protect
his pension interests by working under union condi-
tions. He testified that he elected not to go to work
for Respondent because he feared that he might
lose his pension by doing so.
Conclusions
The General Counsel contends that as the suc-
cessor to Howard Respondent became legally
obligated upon commencing operations to honor
the labor agreement in effect between the Union
and Howard governing the terms and conditions of
employment of automotive salesmen.
Respondent denies that it incurred this obliga-
tion. Initially, it notes that it assumed none of
Howard 's contractual liabilities, and further asserts
that the Union was never certified as the collective-
bargaining representative of Howard 's salesmen.
But additionally , and more significantly , relying
upon the decision in N.L.R.B. v. John Stepp's
Friendly Ford, Inc., 338 F.2d 833 (C.A. 9),
Respondent contends , in essence , that the unit in
which the Union seeks to enforce its rights as col-
lective-bargaining agent is one in which the Union
has not , since the change of ownership, com-
manded majority status, and is one whose composi-
tion had become so substantially modified as of the
date of operational transition as to be, in character,
an entirely new unit.
Contrary to Respondent, it was not relieved of its
obligation to bargain with the Union solely because
it did not assume any of Howard 's contractual lia-
bilities. See Johnson Ready Mix Co , 142 NLRB
437; Chemrock Corporation , 151 NLRB 1074. Nor
is the absence of a Board certification of the Union
a decisive factor in light of the history of bargaining
between Howard and the Union , during which time
the Union was accorded recognition under a con-
tract containing a union -security clause; and in
further light of the validity of that agreement when
Respondent commenced operations See, e g., K B.
& J. Young 's Super Markets , Inc., 157 NLRB 271.
As Respondent continued substantially the same
operations, in the same employing industry , essen-
tially in the same location , selling the same
products, and performing the same services, the
question at issue narrows to that presented in the
Stepp case , namely, whether:
... the new owner may rationally be said in
substance , as to the unit in question , to have
taken over and succeeded to his predecessor's
employees.
From a careful analysis of the Stepp decision,
there emerges a threshold distinction between Stepp
and the case at bar , which , in the ultimate, disposes
of the successorship issue favorably to the General
Counsel.
In Stepp, the court specifically observed that,
with respect to the change in employee personnel
which occurred under the changed ownership,
neither the employer 's good faith nor its desire to
avoid the effect of the outstanding certification was
being challenged . Here, contrary to Stepp, there is
persuasive evidence that antiunion considerations
dictated the selection of personnel to comprise the
unit under Respondent 's ownership.
Thus, from an analysis of the uncontested
evidence of record , there is established a deter-
mination on Respondent's part , reached prior to
the change in ownership , not to recognize the
Union as the representative of its potential sales
force, because it was President Tallakson's inten-
tion not to be bound by union conditions governing
compensation , hours of operation, and fringe
benefits of salesmen . This predetermination is
TALLAKSON FORD, INC.
established by Tallakson himself, who testified at
the hearing:
I didn't want to recognize them [the Union]. I
didn't feel that they were any asset to a
salesman and they governed the hours of open-
ing, and the rest of the dealers in the area were
basically nonunion.
The decision of Respondent to operate under
terms and conditions different from those in effect
under the Howard contract is too clearly revealed
by the record testimony and evidence, as above
found, to require extensive discussion. Suffice to
find, the outline, given the salesmen interviewed of
compensation and benefits to be effective under
Respondent's operation, described terms of em-
ployment so at variance with those in effect under
the Union's agreement, as to render explicit to all
what Trudell verbally communicated to Gehrig and
what Richard Deahl disclosed to William Pearson,'
namely that Respondent was going to operate on a
"nonunion" basis.
In context of these pronouncements, an inference
is wholly warranted that, with respect to the six
Howard salesmen interviewed by Respondent
preparatory to commencing operations, Respon-
dent demanded, at least implicity, their
forebearance from union terms and conditions, as a
condition of their future employment by Respon-
dent.
This is not to find that qualification factors were
given no weight in the selection process. I find they
were. However, these became operative factors
only in the event the interviewee revealed his
willingness to accept employment under the "nonu-
nion" conditions projected by Respondent. Thus,
Respondent effectively, if not explicity, eliminated
from its screening process all candidates, however
qualified, who would agree to work only under
union conditions.
This conclusion is most graphically established
through the experiences of William Pearson,
whom-judging from Tallakson's testimony-the
Respondent found fully employable under its
qualification standards. The record establishes that,
however disguised by verbal nuances, Respondent
offered Pearson employment on the condition that
he withdraw from the Union. I find, contrary to
Respondent, that Pearson declined this offer fully
realizing that it was conditioned in the manner
aforesaid, and out of an overriding trepidation over
the effects of his acceptance upon his pension
rights for which he had so long labored. I fiend that
by so conditioning its offer of employment to Wil-
liam Pearson, Respondent independently violated
Section 8(a)(3) of the Act,5 and, in context of
' I find no warrant for concluding that Pearson was a supervisor of
Howard or was being offered a supervisory job in Respondent's used-car
operations Additionally, I find the record establishes Richard Deahl's
agency relationship to Respondent in offering Pearson employment suffi-
cient, in this respect , to render Respondent accountable for Deahl's state-
ments and actions
509
findings hereinafter made, additionally violated
Section 8(a)(5) of the Act.
In light of the antiunion considerations which
manifestly influenced the Respondent's ultimate
choice of sales personnel, it may not be found, as in
Stepp, that the changed characteristic of the unit
derived from a process of selection based solely
upon objective qualification factors. Rather, this
case is more nearly analogous to the recent deci-
sion of the Board in K. B. & J. Young's Super Mar-
kets, Inc., 157 NLRB 271. In Young, the Board
found a successorship notwithstanding all of the
personnel comprising the unit had been discharged
prior to the company's assumption of ownership. In
Young, as in the instant case, there had been no
certification of the union, and there remained in ef-
fect an unexpired term of the collective-bargaining
agreement between the predecessor employer and
the union seeking recognition. In Young, similar to
the case at bar, the complaint alleged, and the trier of
fact found, independent violations of Section
8(a)(3) flowing from the termination of specific in-
dividuals. However, in Young, unlike the instant
case, the complaint alleged, and the Trial Examiner
therein found that, the entire unit of employees had
been terminated for discriminatory reasons. Con-
cluding that the selection of personnel was accom-
plished in furtherance of the company's desire to
avoid recognizing and bargaining with the union
under the unexpired collective-bargaining agree-
ment, the Board, in Young found that Section
8(a)(1) and (5) of the Act had been violated by the
company's refusal to accord recognition to the
union, and to bargain collectively with it.6
Upon a distillation of the Board's decision in
Young, I conclude and find that, in cases wherein
successorship is in issue, when personnel selections
in an appropriate unit have been predicated upon
antiunion considerations, and when the modified
composition of the unit is the only change of sub-
stance, aside from changed ownership, wrought by
the sale of a business enterprise, the new owner of
the enterprise becomes, in law, a successor with
resultant obligations to recognize and bargain with
the labor organization which had been accorded
recognition under the collective-bargaining agree-
ment of the predecessor company.
In context of the foregoing, I find that Respon-
dent became the legal successor of Howard and
thereby incurred the obligation under the Act to
recognize and bargain collectively with the Union
concerning terms and conditions of employment of
automotive salesmen. Additionally, I find that as
successor to Howard Respondent was obligated
under the Act at all times on and after February 14
Ptastckt Aircraft Corporation, 123 NLRB 348, 372, enfd 280 F 2d 275,
petition for review denied 316 F 2d 239 (C A 3), cert denied 364 U S
933 and 375 U S 827
The Board found it unnecessary to pass upon the question of whether,
as found by the Trial Examiner, the company violated Section 8(a)(5) of
the Act by failing and refusing to honor its predecessor's collective-bar-
gaining agreement
510 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
to honor the collective-bargaining agreement of
Howard. I find no warrant on this record, in light of
Respondent's prior knowledge of the existence of
the agreement and its calculated effort to evade the
agreement's reach and effect, to relieve it of this
duty. Cf. N.L.R.B. v John Stepp's Friendly Ford,
Inc., 338 F.2d 833 (C.A. 9); K. B. & J. Young's
Super Markets, Inc., supra.
Additionally, I find that, without regard to its
obligation to honor the collective-bargaining agree-
ment, and to recognize and bargain with the Union,
the Respondent was obligated under Section
8(a)(1) and (5) of the Act to consult with the
Union concerning intended changes in compensa-
tion and other terms and conditions of employment
before announcing and effectuating them. Chem-
rock Corporation, supra. I find this to be so even
though the decision with respect to these wages and
benefits was made prior to the February 14 change
of ownership and even through the announcement
of these changed benefits was made during inter-
views with Howard employees prior to the time
they entered upon Respondent's payroll. This
obligation derived from the Union's unquestioned
status, at this point in time, as exclusive collective-
bargaining agent of Howard's employees, which
status had its origin in the recognition accorded the
Union under its collective-bargaining agreement
with Howard, which contained a union-security
provision; and from the rights which the salesmen
had as employees of Respondent, as the term "em-
ployees" has been interpreted by the Board. Chem-
rock Corporation, supra, 1078, 1080. I find that by
bypassing and failing to consult with the Union, by
negotiating directly with the employees, and by in-
stituting unilateral changes in the compensation,
benefits, and other terms and conditions of employ-
ment of the salesmen of Howard, Respondent vio-
lated the Act. Chemrock Corporation, supra; see
also Martin Marietta Corporation, United Brick
Division, and Acme Brick Company, 159 NLRB 905.
I additionally find, upon the record before me
revealing a deliberate bypassing of the Union that,
under the Chemrock decision, Section 8(a)(5) and
(1) were jointly and severally violated.
V. THE REMEDY
Having found the Respondent has engaged in and
continues to engage in certain unfair labor prac-
tices, it will be recommended that Respondent
cease and desist therefrom and take certain affir-
mative action designed to effectuate the policies of
the Act.
Having found that commencing on February 14,
1966, Respondent became the legal successor to
Howard and that it thereby became obligated to
honor the terms of the collective-bargaining agree-
ment in effect between the Union and Howard; and
having further found that commencing on February
14, 1966, Respondent failed and refused to do so, I
shall recommend that it honor said agreement' and
that it recognize, and upon request, bargain collec-
tively with the Union as the duly designated collec-
tive-bargaining representative of its sales employees
with respect to wages, hours, and other terms and
conditions of employment, and, if an understanding
is reached, embody such understanding in a signed
agreement.
Make William Pearson whole for any loss of pay
he may have suffered as a result of its refusal on
February 14, 1966, to employ him, by payment to
him of the sum of money which he would have
earned in the employ of Respondent, less his net
earnings, if any, during the period in question. This
backpay shall be computed in accordance with the
formula set forth in F. W. Woolworth Company, 90
NLRB 289, together with interest at the rate of 6
percent per annum , in accordance with the princi-
ple of Isis Plumbing & Heating Co., 138 NLRB 716.
The issues of this proceeding did not directly en-
compass, General Counsel does not seek, and I ac-
cordingly make no recommendation concerning the
employment of, or backpay for, other employees of
Howard who were not employed by Respondent,
effective February 14, 1966. Accordingly, I shall
not recommend they be offered employment nor
recommend the payment of backpay to them. Cf.
Chemrock Corporation, 151 NLRB 1074.
CONCLUSIONS OF LAW
IV. THE EFECT OF THE UNFAIR LABOR PRACTICES
UPON COMMERCE
The activities of the Respondent set forth in sec-
tion III, above, occurring in connection with
Respondent's operations described in section 1,
above, have a close, intimate, and substantial rela-
tionship to trade, traffic, and commerce among the
several States and tend to lead to labor disputes
burdening and obstructing commerce and the free
flow of commerce.
1. Respondent and Howard have been at times
material employers engaged in commerce within
the meaning of Section 2(2), (6), and (7) of the
Act.
2. The Union is a labor organization within the
meaning of Section 2(5) of the Act.
3. All new- and used-automobile and truck
salesmen employed by the Respondent at its Seat-
tle, Washington, automobile and truck sales
establishment, excluding supervisors as defined in
the Act constitute a unit appropriate for the pur-
7 N L R B v Gene Hyde d/b/a Hyde's Super Market, 339 F 2d 568 (C A
9), enfg 145 NLRB 1252, cf Cascade Employers Association, inc. 126
NLRB 1014
TALLAKSON FORD, INC. 511
poses of collective bargaining within the meaning of
Section 9(b) of the Act.
4. At all times material herein, the Union has
been the exclusive bargaining representative of the
employees in the aforesaid unit within the meaning
of Section 9(a) of the Act.
5. By refusing to bargain with the Union, upon
request, concerning the terms and conditions of
employment of salesmen in the aforesaid bargaining
unit; by unilaterally changing wages and other com-
pensation of salesmen in the said unit without prior
notice to, or consultation with, the Union; and by
bypassing the Union and dealing directly with em-
ployees concerning matters properly the subject of
collective bargaining, 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 refusing on and after February 14, 1966,
to honor and apply the Union's collective-bargain-
ing agreement then and thereafter in full force and
effect, the Respondent has engaged in and is engag-
ing in unfair labor practices within the meaning of
Section 8(a)(5) and (1) of the Act.
7. By offering William A. Pearson employment
as a salesman in the collective-bargaining unit
herein found appropriate for the purposes of collec-
tive bargaining, and by conditioning his employ-
ment in said unit upon his withdrawing as a
member of the Union, Respondent engaged in un-
fair labor practices violative of Section 8(a)(1),
(3), and (5) of the Act.
8. The aforesaid unfair labor practices are unfair
labor practices affecting commerce within the
meaning of Section 2(6) and (7) of the Act.
[Recommended Order omitted from publica-
tion. ]