Uncle John's Pancake House

National Labor Relations Board - Board Decisions

Sep 27, 1977

232 N.L.R.B. 438 (N.L.R.B. 1977)

DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Uncle John's Pancake House and Hotel, Motel,
Restaurant Employees and Bartenders Union,
Local 19, AFL-CIO. Case 20-CA-12304
September 27, 1977
DECISION AND ORDER
BY CHAIRMAN FANNING AND MEMBERS
JENKINS AND MURPHY
Upon a charge filed on December 29, 1976, by
Hotel, Motel, Restaurant Employees and Bartenders
Union, Local 19, AFL-CIO, herein called the Union,
and duly served on Uncle John's Pancake House,
herein called the Respondent, the General Counsel
of the National Labor Relations Board, by the
Regional Director for Region 20, issued a complaint
and notice of hearing on March 7, 1977, against
Respondent, alleging that Respondent had engaged
in and was engaging in unfair labor practices
affecting commerce within the meaning of Section
8(a)(1) and (5) and Section 2(6) and (7) of the
National Labor Relations Act, as amended, by
refusing the request to bargain with the Union as the
exclusive bargaining representative of the employees
at its Santa Clara, California, restaurant concerning
the effects of the sale of that facility. Copies of the
charge, complaint, and notice of hearing before an
Administrative Law Judge were duly served on the
parties to this proceeding. Respondent failed to file
an answer to the complaint.
On June 6, 1977, counsel for the General Counsel
filed directly with the Board a Motion for Summary
Judgment. Subsequently, on June 16, 1977, the Board
issued an order transferring the proceeding to the
Board and a Notice To Show Cause why the General
Counsel's Motion for Summary Judgment should not
be granted. Respondent filed its response to the
Notice To Show Cause on June 30, 1977, and,
subsequently the General Counsel filed his reply to
Respondent's response to Notice To Show Cause.
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 entire record in this proceeding, the Board
makes the following:
Ruling on the Motion for Summary Judgment
Section 102.20 of the Board's Rules and Regula-
tions provides:
Respondent contended that such evidence would show that, prior to
the filing of the charge, Respondent had agreed to meet with the Union
concerning the sale.
232 NLRB No. 77
The respondent shall, within 10 days from the
service of the complaint, file an answer thereto.
The respondent shall specifically admit, deny, or
explain each of the facts alleged in the complaint,
unless the respondent is without knowledge, in
which case the respondent shall so state, such
statement operating as a denial. All allegations in
the complaint, if no answer is filed, or any
allegation in the complaint not specifically denied
or explained in an answer filed, unless the
respondent shall state in the answer that he is
without knowledge, shall be deemed to be
admitted to be true and shall be so found by the
Board, unless good cause to the contrary is
shown.
The complaint and notice of hearing served on
Respondent specifically stated that unless an answer
to the complaint was filed within 10 days of service
thereof "all of the allegations in the Complaint shall
be deemed to be admitted to be true and may be so
found by the Board." Further, according to the
allegations of the Motion for Summary Judgment, on
April 22, 1977, counsel for the General Counsel, by
telephone and by letter attached to the Motion for
Summary Judgment as Appendix 4, advised Respon-
dent that an answer had not been received, requested
that an answer be promptly filed, and advised that, in
the event an answer was not filed by close of business
on May 16, 1977, he would seek summary judgment.
In its response to the Notice To Show Cause,
Respondent contended that the Motion for Summary
Judgment should be denied because (I) Respon-
dent's representative had not been notified of the
filing of the charge or of the issuance of the
complaint until the time for filing an answer had
elapsed and the General Counsel had refused to
consider evidence ' submitted by Respondent's repre-
sentative after the time for filing an answer had
elapsed, and (2) thereafter the General Counsel had
rejected Respondent's offer to enter into an informal
settlement agreement providing for bargaining con-
cerning the effects of the sale because it contained no
backpay remedy.2 In his reply the General Counsel
contends that (1) although it is uncontroverted that
the charge and complaint were served on Respon-
dent, Respondent's representative was not served
because the Regional Office was not informed that
Respondent had a representative until June 2, 1977,
more than 2 months after an answer was due; (2)
Respondent participated in settlement negotiations
but filed no answer to the complaint; and (3) Board
2 Respondent contends that the insistence on inclusion of a backpay
remedy was improper because the complaint does not allege that
Respondent discharged employees as a result of the sale.
438
UNCLE JOHN'S PANCAKE HOUSE
precedent requires a backpay provision to remedy
the allegations herein. 3 Attached to the General
Counsel's reply, and uncontroverted by Respondent,
are the following letters: (1) from Respondent's
representative to the Regional Office, delivered on
June 2, 1977, in which the executive director of an
employers' association identified himself as Respon-
dent's representative and stated that he had notified
the Union of Respondent's willingness to bargain;
and (2) from Respondent's representative to the
Union dated January 24, 1977, stating that the letter
was in regard to the charge against Respondent, that
he was Respondent's representative, and that he was
ready to negotiate regarding the sale. The conten-
tions advanced by Respondent do not constitute
good cause within the meaning of Section 102.20 of
the Board's Rules and Regulations and we agree with
the General Counsel that summary judgment based
on Respondent's failure to file an answer is warrant-
ed.
Regarding service on Respondent's representative,
the response does not explain why Respondent's
representative did not identify himself to the Region-
al Office until June 1977, more than 2 months after
the answer was due, especially in light of his
uncontroverted letter to the Union which indicates
that he was aware of the charge less than a month
after it was filed. 4 Further, it is undisputed that the
charge and complaint were served on Respondent,
and the response does not explain Respondent's
failure to contact the Regional Office regarding the
filing of an answer. Finally, we find Respondent's
contentions concerning the unsuccessful informal
settlement negotiations to be immaterial, since an
offer of settlement does not excuse the obligation to
file a timely answer.5
Accordingly, no good cause for failure to file an
answer having been shown, in accordance with the
rule set forth above, the allegations of the complaint
are deemed admitted and are found to be true and
we shall grant the Motion for Summary Judgment.
On the basis of the entire record, the Board makes
the following:
: The General Counsel cites Walter Pape, 205 NLRB 719 (1973), and
cases cited therein.
4 We likewise find that the General Counsel has not abused his authority
under Sec. 3(d) of the Act in refusing to consider evidence, submitted by
Respondent's representative after the time for filing an answer had elapsed,
to establish Respondent's willingness to bargain prior to the filing of the
charge. Since it would appear that this evidence consisted of the letters
delivered to the Regional Office on June 2, 1977, we note that these letters
do not support Respondent's assertion that it agreed to bargain prior to the
filing of the charge on December 29, 1976. but merely establish Respon-
FINDINGS OF FACT
I. THE BUSINESS OF THE RESPONDENT
Respondent is, and at all times material herein has
been, a sole proprietorship operating restaurants in
California, including one in Hayward, California,
and the one involved in this proceeding, which it
formerly operated in Santa Clara, California. During
the past year Respondent received gross revenues in
excess of $500,000 and purchased goods valued at
more than $50,000 which originated outside the State
of California.
We find, on the basis of the foregoing, that
Respondent is, and has been at all times material
herein, an employer engaged in commerce within the
meaning of Section 2(6) and (7) of the Act, and that
it will effectuate the policies of the Act to assert
jurisdiction herein.
II. THE LABOR ORGANIZATION INVOLVED
Hotel, Motel, Restaurant Employees and Bartend-
ers Union, Local 19, AFL-CIO, is a labor organiza-
tion within the meaning of Section 2(5) of the Act.
III. THE UNFAIR LABOR PRACTICES
A. The Representative Status of the Union
The following employees of Respondent constitute
a unit appropriate for collective-bargaining purposes
with the meaning of Section 9(b) of the Act:
All employees employed by Respondent
at its 1680 El Camino Real facility, exclud-
ing all office clericals, guards and supervi-
sors as defined in the Act.
Since on or about September 20, 1975, Respondent
and the Union have been parties to a collective-
bargaining agreement covering the terms and condi-
tions of employment of the aforesaid appropriate
unit of employees and having an expiration date of
June 1, 1977.
B. The Request To Bargain and Respondent's
Refusal
On or about November 24, 1976, Respondent sold
its facility at 1680 El Camino Real, Santa Clara,
dent's willingness to bargain on January 24, 1977, 2 months after the sale on
November 24, 1976, and nearly 2 months after the Union's request and
Respondent's refusal to bargain on December 1, 1976, which resulted in the
filing of the charge on December 29, 1976.
5 Teamsters Local 676, affiliated with The International Brotherhood of
Teamsters, Chauffeurs, Warehousemen and Helpers of America (De Simone
Cadallac Co.), 230 NLRB 729, fn. 1 (1977). Furthermore, the Regional
Director's refusal to approve Respondent's offer of settlement was, as set
forth in the Remedy section below, in accordance with Board precedent.
439
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
California. On or about December 1, 1976, Local 19
requested that Respondent meet and bargain collec-
tively with it concerning the effects of the sale of its
Santa Clara facility and, on the same date, Respon-
dent refused to do so.
Accordingly, we find that on December 1, 1976,
Respondent refused to bargain collectively with the
Union as the exclusive representative of the employ-
ees in the appropriate unit, and that, by such refusal,
Respondent has engaged in unfair labor practices
within the meaning of Section 8(aX5) and (1) of the
Act.
IV. THE EFFECT OF THE UNFAIR LABOR
PRACTICES UPON COMMERCE
The activities of Respondent set forth in section
III, above, occurring in connection with its opera-
tions described in section I, above, have a close,
intimate, and substantial relationship 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 com-
merce.
V. THE 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,
upon request, bargain collectively with the Union as
the exclusive representative of all employees in the
appropriate unit, and, if an understanding is reached,
embody such understanding in a signed agreement.
As a result of Respondent's unlawful failure to
bargain about the effects of the sale of its Santa
Clara, California, restaurant, unit employees have
been denied an opportunity to bargain through their
collective-bargaining representative at a time when
Respondent was still in need of their services and a
measure of balanced bargaining power existed.
Meaningful bargaining cannot be assured until some
measure of economic strength is restored to the
Union. A bargaining order alone, therefore, cannot
serve as an adequate remedy for the unfair labor
practices committed.6
r In contending in par. 6 of its response that the General Counsel's
refusal to accept an informal settlement of this proceeding without a
backpay provision was improper because a backpay remedy is "overbroad
where the complaint does not allege that Respondent discharged bargaining
unit employees upon the sale of its business." Respondent too narrowly
views the purpose of the kind of backpay remedy set forth in Transmarine
Navigation Corporation and its Subsidiary, International Terminals, Inc., 170
NLRB 389 (1968). Such a backpay remedy is intended not only to
compensate for backpay determined to be owing, if any, but also to restore
economic strength to the Union in order to assure meaningful bargaining.
I Despite his dissent in Transmarine, Member Jenkins notes that the
Accordingly, we deem it necessary, in order to
effectuate the purposes of the Act, to require
Respondent to bargain with the Union concerning
the effects of the sale on its employees, and we shall
accompany our order with a limited backpay
requirement designed both to make whole the
employees for losses, if any, suffered as a result of the
violation and to recreate in some practicable manner
a situation in which the Union's bargaining position
is not entirely devoid of economic consequences for
Respondent. We shall do so in this case by requiring
Respondent to pay backpay to its employees in a
manner similar to that required in Transmarine,
supra,7 Interstate Tool Co., Inc.,8 and Walter Pape.9
Thus, Respondent shall pay employees backpay at
the rate of their normal wages when last in
Respondent's employ from 5 days after the date of
this Decision and Order until the occurrence of the
earliest of the following conditions: (1) the date
Respondent bargains to agreement with the Union
on those subjects pertaining to the effects of the sale
on its employees; (2) a bona fide impasse in
bargaining; (3) the failure of the Union to request
bargaining within 5 days of this Decision, or to
commence negotiations within 5 days of Respon-
dent's notice of its desire to bargain with the Union;
or (4) the subsequent failure of the Union to bargain
in good faith; but in no event shall the sum paid to
any of these employees exceed the amount he would
have earned as wages from the date of the sale to the
time he secured equivalent employment, or the date
on which Respondent shall have offered to bargain,
whichever occurs sooner; provided, however, that in
no event shall this sum be less than these employees
would have earned for a 2-week period at the rate of
their normal wages when last in Respondent's
employ. Backpay shall be based upon earnings which
the terminated employees would normally have
received during the applicable period, less any net
interim earnings, and shall be computed on a
quarterly basis in the manner set forth in F W.
Woolworth Company, 90 NLRB 289 (1950), together
with interest as provided in Isis Plumbing & Heating
Co., 138 NLRB 716 (1962), and Florida Steel
Corporation. 10
The Board, upon the basis of the foregoing facts
and the entire record, makes the following:
remedy there has been accepted by the courts and the Board and, since
some type of remedy for the misconduct is needed, he is therefore willing to
join in the Decision here.
8 177 NLRB 686 (1969).
9 205 NLRB 719 (1973).
10 In accordance with our decision in Florida Steel Corporation, 231
NLRB 651 (1977), we shall apply the current 7-percent rate for penods prior
to August 25, 1977, in which the "adjusted prime interest rate" as used by
the Internal Revenue Service in calculating interest on tax payments was at
least 7 percent.
440
UNCLE JOHN'S PANCAKE HOUSE
CONCLUSIONS OF LAW
i. Uncle John's Pancake House is an employer
engaged in commerce within the meaning of Section
2(6) and (7) of the Act.
2. Hotel, Motel, Restaurant Employees and
Bartenders Union, Local 19, AFL-CIO, is a labor
organization within the meaning of Section 2(5) of
the Act.
3. All employees employed by Respondent at its
1680 El Camino Real facility, excluding all office
clericals, guards and supervisors as defined in the
Act constitute a unit appropriate for the purpose of
collective bargaining within the meaning of Section
9(b) of the Act.
4. Since September 20, 1975, the above-named
labor organization has been and now is the exclusive
representative of all employees in the aforesaid
appropriate unit for the purpose of collective
bargaining within the meaning of Section 9(a) of the
Act.
5. By refusing on or about December 1, 1976, and
at all times thereafter, to bargain collectively with the
above-named labor organization as the exclusive
bargaining representative concerning the effects on
unit employees of the contract termination, Respon-
dent has engaged in and is engaging in unfair labor
practices within the meaning of Section 8(a)(5) of the
Act.
6. By the aforesaid refusal to bargain, Respon-
dent has interfered with, restrained, and coerced, and
is interfering with, restraining, and coercing, employ-
ees in the exercise of the rights guaranteed to 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)(1) of the Act.
7. The aforesaid unfair labor practices are unfair
labor practices affecting commerce within the mean-
ing 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,
Uncle John's Pancake House, Santa Clara, Califor-
nia, its officers, agents, successors, and assigns, shall:
1. Cease and desist from:
(a) Refusing to bargain collectively with Hotel,
Motel, Restaurant Employees and Bartenders
Union, Local 19, AFL-CIO, concerning the effects
of the sale of its Santa Clara facility on employees in
the following appropriate unit:
All employees employed by Respondent at
its 1680 El Camino Real facility, excluding
all office clericals, guards and supervisors as
defined in the Act.
(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 the effects on employees of the sale of its
Santa Clara facility, and reduce to writing any
agreement reached as a result of such bargaining.
(b) Reimburse employees in the manner set forth in
the Remedy section of this Decision and Order.
(c) Preserve and, upon request, make available to
the Board or its agents, for examination and copying,
all payroll records, social security payment records,
timecards, personnel records and reports, and all
other records necessary to analyze the amount of
backpay due under the terms of this Order.
(d) Mail a copy of the attached notice marked
"Appendix"" to the Hotel, Motel, Restaurant
Employees and Bartenders Union, Local 19, AFL-
CIO, and to all the employees who were employed at
its Santa Clara facility on the date of the sale of that
facility. Copies of said notice, on forms provided by
the Regional Director for Region 20, 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 Respon-
dent to insure that said notices are not altered,
defaced, or covered by any other material.
(e) Notify the Regional Director for Region 20, in
writing, within 20 days from the date of this Order,
what steps have been taken to comply herewith.
" In the event that this Order is enforced by a Judgment of a United
States Court of Appeals, the words in the notice reading "Posted by Order
of the 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."
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 bargain collectively with
Hotel, Motel, Restaurant Employees and Bar-
tenders Union, Local 19, AFL-CIO, concerning
441
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
the effects of the sale of its Santa Clara facility on
employees in the following appropriate unit:
All employees employed by Respondent
at its 1680 El Camino Real facility, exclud-
ing all office clericals, guards and supervi-
sors as defined in the Act.
WE WILL NOT in any like or related manner
interfere with, restrain, or coerce our employees
in the exercise of the rights guaranteed them by
Section 7 of the Act.
WE WILL, upon request, bargain with the
above-named labor organization as the exclusive
representative of all employees in the aforesaid
appropriate unit with respect to the effects on
employees of the sale of its Santa Clara facility,
and reduce to writing any agreement reached as a
result of such bargaining.
WE WILL reimburse employees in the manner
set forth in the Remedy section of the Board's
Decision and Order.
UNCLE JOHN'S PANCAKE
HOUSE
442