Helrose Bindery, Inc.

National Labor Relations Board - Board DecisionsJun 25, 1973

204 N.L.R.B. 499 (N.L.R.B. 1973)

HELROSE BINDERY, INC. Helrose Bindery, Inc. and Graphic Arts Finishing, Inc. and New York Paper Cutters' and Bookbinders Union No. 119, a/w International Brotherhood of Bookbinders, AFL-CIO and Local 723, Internation- al Brotherhood of Teamsters , Chauffeurs, Ware- housemen and Helpers of America , Party to the Contract. Case 22-CA-5035 June 25, 1973 DECISION AND ORDER BY CHAIRMAN MILLER AND MEMBERS FANNING AND KENNEDY On March 14, 1973, Administrative Law Judge Mil- ton Janus issued the attached Decision in this pro- ceeding. Thereafter, Respondents, the Charging Party, and counsel for the General Counsel filed ex- ceptions to the Administrative Law Judge's Decision and supporting briefs. 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 au- thority in this proceeding to a three-member panel. The Board has considered the record and the at- tached Decision in light of the exceptions and briefs and has decided to affirm the Administrative Law Judge's rulings, findings, conclusions, and recom- mended Order, except as modified herein. At the hearing the General Counsel was allowed to amend the complaint with respect to the layoff of 11 Helrose employees in March 1972.1 The General Counsel alleged that the March layoff violated Sec- tion 8(a)(1) and (3) because it was a part of Respon- dents' scheme to escape the obligations of the contract with Local 119, which was to culminate in the termi- nation of the remaining Helrose employees and the closing of the New York plant in May. The General Counsel further alleged that even if the March layoff was not motivated by Respondents' antiunion scheme, the failure to recall these 11 employees when work became available for them at the new facility in New Jersey in July constituted a separate violation of Section 8(a)(1) and (3) of the Act. The Administrative Law Judge found, and we agree, that there was no evidence tending to connect the March layoff with the May termination of the t The Administrative Law Judge inadvertently indicated that 10 employees were laid off m March . The record indicates and we find that I1 employees were laid off. 499 remaining Helrose employees and the relocation of the Helrose plant to New Jersey. In these circum- stances, and absent any evidence that the March lay- off was for other than economic reasons as asserted by Respondents, the Administrative Law Judge con- cluded that the General Counsel had failed to meet his burden of proof with respect to the alleged discri- minatory nature of the March layoff. As to the allegation that employees laid off in March were entitled to reinstatement and backpay from the date in July when work was available for them at the new facilities in New Jersey, the Adminis- trative Law Judge concluded that because these em- ployees were laid off for nondiscriminatory reasons they were not entitled to the protection of the Act and were left to whatever remedies they might have under Local 119's contract with Helrose. We disagree with the conclusion of the Administrative Law Judge on this latter point. By the terms of Local 119's contract with Helrose, laid-off employees had a right to be recalled in the order of their seniority before the hire of new employ- ees. The Administrative Law Judge correctly conclud- ed that Graphic Arts was nothing more than Helrose's alter ego and thus was bound by the terms of Local 119's contract. After the initial startup period in June, Graphic Arts reached an employee complement equivalent to that employed prior to the March layoff under the Helrose name in New York. Nevertheless, none of the employees laid off in March was recalled. Rather, Respondents offered employment to new- comers whom they could logically expect to be more amenable to Local 723 membership. Having found that the Helrose shutdown was ac- complished for purposes of escaping from the con- tractual obligation with Local 119, it follows that the failure to recall the employees laid off in March was motivated by the same discriminatory consideration. Consequently, we find this conduct violated Section 8(a)(1) and (3). See Buckhorn Hazard Coal Corpora- tion, 194 NLRB 557. THE REMEDY Having found that Respondents unlawfully failed to recall and reinstate the 11 employees laid off in March 1972, we shall order that the violation be re- dressed as set forth in the section entitled "The Reme- dy" of the Administrative Law Judge's Decision. Backpay for these employees is to be based on the date in July 1972 on which work would have been 204 NLRB No. 88 500 DECISIONS OF NATIONAL LABOR RELATIONS BOARD available for each employee in order of his seniority as provided for by the Local 119 contract. ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Rela- tions Board adopts as its Order the recommended Order of the Administrative Law Judge, as modified herein, and hereby orders that Respondents, Helrose Bindery, Inc. and Graphic Arts Finishing, Inc., their officers, agents, successors, and assigns, shall take the action set forth in the Administrative Law Judge's recommended Order, as so modified: 1. Insert the following as paragraph 2(e) and relet- ter existing paragraphs 2(e), (f), and (g) as new para- graphs 2(f), (g), and (h): "(e) Offer immediate employment to P. Zayas, D. McCan, R. Pulgar, I. Velez, R. Lombardo, W. Nieves, M. Perez, H. Velez, F. Signorelli, E. Luciano, and S. Josephy to positions which were available to them on or after July 1, 1972, or, if those jobs no longer exist, to substantially equivalent positions, and make them whole for any loss of earnings they may have suffered by reason of the discrimination against them in the manner set forth in the section entitled `The Reme- dy . 2. Substitute the attached notice for the Adminis- trative Law Judge's notice. 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 with New York Paper Cutters ' and Bookbinders Union No. 119, a/w International Brotherhood of Bookbinders , AFL-CIO, as the exclusive rep- resentative for the employees in the unit which it represented at our plant in New York when it was operated under the name of Helrose Bindery, Inc. WE WILL NOT recognize or contract with Local 723, International Brotherhood of Teamsters, Chauffeurs , Warehousemen and Helpers of America , as a representative of our employees unless and until it has been duly certified by the National Labor Relations Board as such repre- sentative. WE WILL NOT give effect to the contract dated May 17, 1972, between ourselves and Teamsters Local 723 unless and until that Union has been duly certified by the National Labor Relations Board as the bargaining representative of our employees. WE WILL NOT enforce the union-security or checkoff provisions in the contract we entered into on May 17, 1972, with Teamsters Local 723. WE WILL NOT lay off, discharge, or otherwise discriminate against our employees because of their membership in Bookbinders Local 119. WE WILL NOT in any other manner interfere with, restrain, or coerce our employees for exer- cising their rights under Section 7 of the National Labor Relations Act. WE WILL, upon request, bargain with Book- binders Local 119 as the exclusive bargaining representative of our employees for the unit it represents, as to the relocation of our plant from New York City to East Rutherford, New Jersey, and its effect on our employees, and we will ob- serve and honor the contract between ourselves and Bookbinders Local 119 which was entered into on January 1, 1971. WE WILL withdraw and withhold all recogni- tion of Teamsters Local 723 as the bargaining representative of our employees unless it is certi- fied by the National Labor Relations Board. WE WILL reimburse each of our present and former employees who joined Teamsters Local 723 after June 1, 1972, for all their initiation fees and dues which were paid or turned over to that Union. WE WILL offer to the employees listed below full reinstatement to their former positions or, if those positions no longer exist, to substantially equivalent positions, without prejudice to their seniority and other rights, and we will make them whole for any loss of earnings they may have suffered because of our discrimination against them. George Elias J. Ayala Edward Alston Herbert Reid Alberto Carrisquillo Angelo Rivera Amador Carrisquillo Carmelo Velez Emma Gonzalez Jesus Velez William Hussey Marco Velez Ruben Lorenzo William Wilson Samson Pearson Dorothy Zeitz P. Zayas F. Signorelli HELROSE BINDERY , INC. 501 D. McCan E. Luciano R. Pulgar S. Josephy 1. Velez R. Lombardo W. Nieves M. Perez H. Velez HELROSE BINDERY INC. AND GRAPHIC ARTS FINISHING, INC. (Employer) Dated By (Representative) (Title) a union-security clause even before it began operations at the East Rutherford plant. These factual allegations are said to constitute violations of Section 8(a)(1), (2), (3), and (5). Each Respondent filed a separate answer in which it denied its commission of any unfair labor practices. A hearing was held before me in Newark, New Jersey, .3n November 7, 20, 21, and 22, 1972. Briefs have been received from the General Counsel and the Respondents and have been fully considered .2 Upon the entire record in the case, including my observa- tion of the witnesses and their demeanor, I make the follow- ing: FINDINGS OF FACT I THE BUSINESS OF THE RESPONDENTS This is an official notice and must not be defaced by anyone. This notice must remain posted for 60 consecutive days from the date of posting and must not be altered, defaced, or covered by any other material. Any questions concerning this notice or compli- ance with its provisions may be directed to the Board's Office, Federal Building, 16th Floor, 970 Broad Street, Newark, New Jersey 07102, Telephone 201-645-3240. DECISION STATEMENT OF THE CASE MILTON JANUS, Administrative Law Judge: The General Counsel issued his complaint in this proceeding on Septem- ber 21, 1972, after a charge filed on August 1, 1972, by New York Paper Cutters' and Bookbinders Union No. 119 (Bookbinders or Local 119).1 The complaint alleges that the Respondents (Helrose and Graphic) are a single employer conducting a single business enterprise with common own- ership, directors, officers, and agents, which was formerly located in New York City, under the name of Helrose, and is now located in East Rutherford, New Jersey, under the name of Graphic; that Helrose had recognized and bar- gained with Local 119 before it ceased operations at its New York plant about May 15; that it ceased operations there without informing, or bargaining with, Local 119 about its decision and wrongfully discharged all the employees in the bargaining unit at that time; that it then opened the same business in East Rutherford about June 4, under the name of Graphic; and that Graphic recognized and executed a bargaining agreement with Teamsters Local 723, containing All further date references are to 1972 unless another year is specified Helrose is a New York corporation which maintained its principal office and place of business at 401 West 13th Street, New York City, where it was engaged in performing bookbinding, page trimming, folding, and related services. During a recent representative 12-month period, Helrose provided services valued in excess of $50,000, for enterprises located in the State of New York, which, in turn, caused to be manufactured, sold, and distributed products, goods, and materials valued in excess of $50,000 in interstate com- merce to States other than New York. Graphic is a New Jersey corporation which maintains its principal office and place of business at 74-78 Paterson Avenue, East Rutherford, New Jersey, where it is engaged in performing bookbinding, page trimming, folding, and related services. From June through August 1972, a repre- sentative period, Graphic performed services valued in ex- cess of $50,000 of which services valued at $36,000 were provided for firms located in States other than New Jersey. Each Respondent admits, and I find, that it is engaged in commerce within the meaning of the Act.3 II THE LABOR ORGANIZATIONS INVOLVED The Charging Party, Bookbinders Local 119, and the Par- ty to the Contract, Teamsters Local 723, are both labor organizations within the meaning of the Act. 2 On the first day of the hearing, Helrose was represented by Milton Robbins, and Graphic by Burton C Beal Thereafter, Mr Beal represented both Respondents . Their posthearing brief was filed by Irving T. Bergman, who had not made an appearance at the hearing. 3 I will use the terms "Respondent" or "Respondents" when referring to Helrose and Graphic individually or collectively, as seems most appropriate in the context of what I am discussing I do not mean to imply by the use of either term that I have prejudged the case in accord with the contentions of any of the parties 502 DECISIONS OF NATIONAL LABOR RELATIONS BOARD III THE UNFAIR LABOR PRACTICES but was secretly and improperly not considered part of the unit), a close friend of the Vinci family, and two acquain- tances of his who had not been employed at Helrose. As they were working there, an official of Teamsters Local 723, Zingone, happened to pass by, saw or heard the activity inside , stopped , walked in , engaged them in conversation, asked them if they wanted to be represented by his organiza- tion, and was delighted to hear that they did. Then and there they signed authorization cards and, on May 9, Mrs. Vinci and Mrs. Tikijian having been informed of this turn of events entered into an agreement with Local 723, recogniz- ing it as the exclusive bargaining representative of their employees, and binding themselves to negotiate a collective- bargaining agreement within the week . Vinci and Tikijian then met with Zingone and his bargaining committee (Ger- mann and his two friends ) and an agreement was amicably reached, which they recommended to their wives. It con- tained a union -security provision requiring membership in the Union after 30 days and a checkoff of dues clause. The two women approved and signed the agreement on May 17. As of that date, no one else had been employed by Graphic, nor had it yet completed its incorporation in New Jersey. When that matter was completed as of May 30, the machin- ery was ready to be removed from the Helrose plant to the Graphic plant. Production began at Graphic the week end- ing June 7. Meanwhile back at the Helrose plant, two notices were posted about May 10-one, to its employees advising them that they would be laid off as of May 15 for 2 weeks, and, the second, a notice of a marshal's levy and sale. The 2-week layoff was intended, in fact, to be a permanent termination although the employees were not told that. In some way they learned, during the 2-week period, that preparations were underway to move out the machinery, and they did not try to return after May 30. Vinci had told one or two em- ployees that the plant was moving to New Jersey and had tentatively inquired if they would be interested in transfer- ring there. They understood from him that there would be another union, and they did nothing more about checking into prospects for jobs at the new plant. The details of the levy and auction are less clear . Who the judgment creditors were and the dates of their levies were not developed by Respondent. There is in the record a bill of sale , dated May 24, from Alpha Financial Associates (whose letterhead identifies it as an organization which makes loans on machinery and equipment) to Graphic, of all machinery, equipment, fixtures, and inventory on Helrose's premises, as per an attached schedule. Tikijian testified that Alpha had purchased all of Helrose 's physical assets at a public auction held on the Helrose premises sometime between May 10, when the notice was first posted, and May 24, the date of Alpha's resale to Graphic. The amount of the sale from Alpha to Graphic is stated to be $55,700, and Tikijian testified that only a part of that sum was actually paid in cash, with the unstated remainder being evidenced by notes. The sale was made "subject to all valid liens presently of record," referring to chattel mortgages on much of the machinery used by Helrose. Thus, Graphic assumed the obligations of Helrose on these chattel mort- Albert Vinci has been active in the bindery business for many years , operating first as a principal of a firm known as North Atlantic Bindery, and since 1963 under the name of Helrose Bindery . Since 1956 these firms had in turn rec- ognized Local 119 as the majority representative for a pro- duction and maintenance unit . Although not a member of the employers' association which bargained with Local 119 (Printing Industry of Metropolitan New York), Helrose adopted the association contract in a separate agreement with a different expiration date . The latest such agreement between Helrose and the Union was for the 3-year period 1971 through 1973. It provided for a series of wage increas- es, one of which was to become effective as of May 1, 1972. In 1969 , Richard Tikijian purchased a half interest in Helrose from Vinci and became active in sales and promo- tion of new business . Vinci continued to serve as president of the corporation and as manager of production, while Tikijian assumed the office of secretary -treasurer. During the 2 years before it ceased operations , Helrose employed approximately 25 workers . After an initial start- up period , Graphic now employs about the same number. In late March 1972, Helrose discontinued its night shift, laying off about 10 employees . Respondent claims that the reduction in employment was made necessary by its deterio- rating financial condition , while the General Counsel agrues that it was done as part of the scheme to close down operations in New York under the name of Helrose, and to resume the same operation under the name of Graphic in East Rutherford , New Jersey , 12 miles from its former loca- tion. Under the contract between Helrose and Local 119 (G.C. Exh. 2a), the Employer could move his plant to a location less than 20 miles away , but had to offer employment at the new location first to his old workers . The contract also provided that it would apply to the plant at its new location and would be binding on the Employer's successors , trans- ferees , and assigns . The Employer also agreed not to consol- idate , merge , sell, or transfer its business to any other person , firm , or corporation unless the purchasing firm agreed to be bound by the agreement , and unless the conso- lidation would cause no loss of employment to the Employer's work force . Finally, the Employer was required, before entering into any transaction or disposition of the type enumerated above , to give written notice thereof to the Union , and to give written notice of its obligations under the contract to all interested parties to such transaction or dis- position. Sometime before May 9, Tikijian had found a suitable location in East Rutherford , and he and Vinci had con- vinced their wives to invest new capital in what they regard- ed as a new venture , which they then undertook to incorporate . A day or two before May 9, there were three people doing cleanup work preparatory to moving the Hel- rose machinery under the Graphic name. These were David Germann , an employee of Helrose (where he did unit work HELROSE BINDERY, INC. 503 gages, signed notes to Alpha, and paid it an unknown amount of cash.' Vinci and Tikijian testified that their wives had raised the money for their new business venture from savings out of their household allotments, the sale of their interests in other business ventures (some of which they owned with business associates of their husbands), and, in the case of the Vincis, by taking out a second mortgage on their home, which was jointly owned. How much of the capital invested in Graphic by Mrs. Vinci and Mrs. Tikijian came from moneys which either had inherited or had independently earned is unknown, and the most reasonable inference from their status and limited business experience is that the major portion of it was raised from property which they owned jointly with their husbands or was derived from holdings in their names which had been financed by their husbands .5 Helrose effectively concealed its intention to cease opera- tions at its New York plant from Local 119. It gave Local 119 no official notice of its plans, nor did it tell its employees that they were being permanently terminated. Vinci, who was himself a member of Local 119, called it around May 20 and asked for a withdrawal card on the pretext that he was leaving the bindery industry to go into the real estate business.6 Tikijian also claimed that he had sent Local 119 a letter on April 26, pleading the Company's inability to survive under the existing contract and asking for consider- ation. Bennett, an official of Local 119, denied that he or anyone in the local had received such a letter. I credit Ben- nett and find that it was never received, even if it had been sent, which I doubt. In any event, Tikijian's letter does not reveal what must have been the intention of himself and Vinci to relocate the business in the next few weeks. Vinci is in charge of the day-to-day operations, such as scheduling, hiring of employees, and production supervi- sion, at Graphic as he was at Helrose. Tikijian testified that he is less active at Graphic than he was at Helrose, but it appears that no one else at Graphic has taken over his responsibility for increasing sales, which he had at Helrose. Whatever he does for Graphic is of the same nature as what he did for Helrose. Mrs. Vinci continues her work as a machine operator as she did previously, while Mrs. Tikijian still spends most of her time at home as a wife and mother. The two women, now the sole officers and directors of Graphic, sign checks and official papers and are said to be consulted on major policy decisions, but it is their husbands who initiate such policies and recommend them to their wives. The reality of the Graphic operation is as it was at Helrose-Vinci and Tikijian run it for the mutual benefit of themselves and their wives. 4 Respondent failed to comply with the request of the General Counsel to produce a security agreement between Alpha and Graphic which had been at one time attached to the bill of sale and which would have revealed how much cash was involved in the transaction. 5 Mrs Vinci worked both at Helrose and at Graphic as a bindery machine operator, while Mrs Tikijian is a housewife with young children. b A withdrawal card could be granted under the Union's rules only to a member who was leaving the industry. With it, he could retain his accumulat- ed pension and welfare rights in the Union's funds. The major customers of Helrose are still the major cus- tomers of Graphic. After Graphic began full operations it sent out advertising material to old customers and new pros- pects in which it claimed for itself the extensive experience in the bindery trade which Vinci had attained at Helrose. This material also revealed the motivation for the move to East Rutherford-a claim that it could now underbid its competitors in New York (who, unlike itself, still paid the wage rates and benefits required under the Local 119 con- tract). Production at the new plant began about June 4. Some- time later, Bennett of Local 119 learned from one of Helrose's old customers that Vinci was active at the new plant in East Rutherford. Bennett went out there and asked Vinci the identity of the principals operating the plant and whether a Union represented the employees. Vinci refused to tell him. At a later meeting between Vinci, Tikijian, and Bennett , the first two denied that they were the principals of the new firm, but admitted that they were operating under a Teamsters contract which was much more favora- ble to them than was the Local 119 contract. Tikijian also told Bennett that the old firm had closed down in New York and that, if they had to, they would relocate the plant again. At various times from July through September, Vinci contacted a few of the former Helrose employees and asked them to work for Graphic. They understood that, if they did, it would be under the terms of the Teamsters contract and that they would have to join Teamsters under the union-security clause of that agreement. Vinci also claimed that he had asked a truckdriver for a Helrose/Graphic cus- tomer who lived in the same neighborhood with some of the old Helrose employees to tell them to get in touch with him about employment at Graphic. Even if the truckdriver took the request seriously, there is no indication that the former employees considered this as an offer of reinstatement. Contentions of the Parties The General Counsel contends that Helrose and Graphic are a single employer or, stated otherwise but not substan- tively differently, that Graphic is the alter ego of Helrose and that the purported transfers, sales, and investments were nothing more than a calculated attempt to conceal the fact that Graphic is operating a runaway shop. He also contends that the facts establish that Respondent rendered unlawful assistance to Local 723 by granting it recognition and executing a bargaining agreement with it before any employees had been hired; that it discriminated against its employees at Graphic by requiring membership in Local 723 as a condition of employment; that it unlawfully dis- charged the Helrose employees and refused to reinstate them at Graphic because they were members of Local 119; that it failed to bargain with Local 119 concerning its deci- sion to cease operations in New York and refused to bargain with it concerning the effects of that decision on its employ- ees; and that it refused to recognize and bargain with Local 119 as the exclusive representative of its employees at Graphic and refused to honor its collective-bargaining agreement with it. 504 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The Respondent 's basic contentions are that Helrose and Graphic are independent entities , operating at different lo- cations , with different stockholders , officers , and directors; that Helrose was forced out of business by economic pres- sures and financial difficulties ; that legal proceedings were instituted by some of its creditors and its assets were sold at public auction and were purchased by one such creditor; and that, even assuming that Helrose and Graphic were a single employer , Helrose had a right to go out of business, but that it did so with no antiunion motivation . Respondent seems to concede , however, that in such event it failed to bargain about its decision to close down or relocate. Analysis and Conclusions The critical factual issue in this case is whether Helrose discontinued its operations in New York for discriminatory reasons and continued them in East Rutherford as a succes- sor or alter ego under the name of Graphic. The applicable legal principles are clear . It is unlawful for an employer to close down a plant and move it elsewhere in order to deprive his employees of their right to be represented by and to bargain through the union of their choice, and to refuse to bargain with their union over his decision to relocate and its effect on his employees.' Respondents emphasize , in their defense , that Helrose was in financial difficulties and under economic pressures which it could not withstand in New York. No doubt, Hel- rose could have operated more economically or with more profit if it did not have to pay its employees the contractual wage rates and was allowed greater flexibility in fixing hours and other terms of employment. But economic difficulties do not immunize an employer from the consequences of antiunion action . The fact is that Helrose closed down in New York, discharged all its employees , and failed to reveal to their union representative that a business with the same machinery , assets, customers , and operating officials was being reestablished in a plant just 12 miles away. Helrose also argues that its financial difficulties, due to the constraining effect of its contract with Local 119, caused its creditors to close it down and to dispose of its assets. The circumstances surrounding the claims of its creditors, the levy and by whom it was initiated , and the sale of certain of its assets are shrouded in obscurity . All that is known for certain is that a lending institution , Alpha Financial Associ- ates , bought some of Helrose 's assets and resold them to what was then an unincorporated entity for $55,700 of which some undisclosed part was in cash . It is not even known whether other creditors of Helrose (assuming that Alpha was itself a creditor ) were paid in whole or in part, or whether Graphic has assumed Helrose 's unsecured liabil- ities . The money which Mrs. Vinci and Mrs . Tikijian raised came in large measure from assets jointly held with their husbands or traceable to their husbands ' endeavors. It is obvious that if Vinci and Tikijian had wanted to infuse additional capital into Helrose they could have done so 7 Plymouth Industries, Inc, 177 NLRB 607, 611, In 3 from the same sources into which their wives had dipped. Their intention , however , was to leave Helrose an empty shell while transferring its ongoing business to Graphic, in order to escape from its contract with Local 119. I find, based on my previous recital of the facts and my analysis of them , that Helrose and Graphic are a single employer and that Graphic is nothing more than a disguised continu- ance of Helrose and its alter ego.8 The remaining allegations of the complaint are virtually undisputed and uncontested. (a) Beginning May 10 , Helrose discharged its employees represented by Local 119, as part of its scheme to relocate its business at a new location , unencumbered by its existing valid contract with that Union. The equivocal efforts of Vinci to hire some few ex -employees of Helrose for the East Rutherford plant were all conditioned on their forsaking their chosen representative and its contract in favor of Local 723 and its contract . I find that Respondent 's termination of the New York employees in May,9 and the failure to reinstate them at the East Rutherford plant , is a violation of Section 8(a)(1) and (3) since it was the direct consequence of Respondent 's desire to avoid further recognition of Local 119 and to escape the obligations of their contract. As for the employees laid off in March , the answer is not so obvious . If the layoff were solely for economic reasons unrelated to its opposition to Local 119 , it would not be discriminatory nor in violation of the Act. To find a viola- tion as to these employees , it would be necessary to prove that Respondent 's scheme to relocate its plant was already in operation , and that the layoff was part of such scheme. But there is no evidence tending to establish that Helrose had that in mind at the end of March , unless I am ready to assume that the first layoff was coordinated with the one in May. The two were a month and a half apart, and there are no objective circumstances tending to prove that the first was related to the second . I am therefore unable to find that the March layoff was occasioned by the same reasons which prompted the May terminations, and I conclude that the General Counsel has failed to meet his burden of proof on that point. The General Counsel's brief also urges that if I should find, as I just have, that the March layoff was for nondiscn- minatory reasons that I nevertheless hold that the laid-off employees were entitled to reinstatement and backpay from the date, in July, when work would have been available for them at Graphic. I am unable to do so. If they were laid off for nondiscriminatory reasons, they are not entitled to the protection of the Act. If they are entitled to recall under Local 119's contract with Helrose (and Graphic), their rem- edy must be pursuant to the provisions of that contract. (b) Since it was essential to Respondent 's scheme for shutting its operations in New York and resuming them in East Rutherford to operate secretly in order to delude Local 119, Respondent gave the Union no notice of its intention to relocate its business . The Union was thereby deprived of 8 Intergraphtc Corporation ojAmerica, 160 NLRB 1284, and Garwm Corpo- ration, 153 NLRB 664, enfd as modified 347 F 2d 295 (C A D C, 1967) 9 One employee was laid off on the loth, one on the 12th, and the rest on the 15th HELROSE BINDERY, INC. any opportunity to bargain with it about that decision or about the effects of the plant relocation on the Helrose employees. These are clear violations of Section 8(a)(5).1° (c) Just as clear is Respondent's violation of Section 8(a)(2) in granting recognition to Teamsters Local 723 on May 9, and in executing a collective-bargaining agreement with it on May 17. Production was not begun at East Ruth- erford until June 4, and the three volunteers who signed the agreement on May 17 represented no one but themselves. In fact, when Respondent recognized and bargained with Teamsters, it had a valid existing agreement with Local 119 which it was bound to adhere to.l As the agreement with Teamsters contained a union-se- curity provision which did not comply with the proviso to Section 8(a)(3) because Teamsters was not the representa- tive of the employees in the appropriate unit covered by the agreement with Local 119, I find that Respondent's execu- tion of an agreement with it discriminated with respect to the hire and tenure of employees, thereby encouraging membership in Teamsters and discouraging membership in Local 119, in violation of Section 8(a)(l) and (3) of the Act.12 (d) The General Counsel urges in his brief that the facts set out above concerning the relocation of the plant from New York to East Rutherford require findings that the Re- spondent violated Section 8(a)(5) in four separate respects. No extended discussion is needed as to the first two. An employer who contemplates the relocation of his plant must bargain with the recognized representative of his employees on those matters and must also bargain concerning the ef- fects of his decision on the employees at the old plant. As Helrose concealed from its employees and from Local 119 its decision to close down in New York, remove its machin- ery, and relocate its plant in East Rutherford, it accorded Local 119 no opportunity to bargain on either of these matters. In those respects, Section 8(a)(5) was violated. The General Counsel also argues that Helrose and Graphic, as a single employer, must recognize Local 119 as the representative of the employees at the East Rutherford plant and must also honor its existing collective-bargaining agreement with Local 119 until its expiration date at the close of 1973. I agree with him on both points but they cannot be disposed of as summarily as the other 8(a)(5) violations. The East Rutherford plant is 12 miles from the New York plant, within the New York metropolitan area, which is by common repute better served by convenient areawide pub- lic transportation than most big cities. In deciding whether an employer must continue to recognize the bargaining rep- resentative of the old plant employees at the new, the Board has taken into account the distance between the two plants in determining whether a majority of the old plant employ- ees would have transferred to the new. When an employer has met his obligation to bargain with the union representing his employees over the effect on to See fn. 8 11 Harrawood's, Inc., 193 NLRB 1136. 12 Rollins-Purle, Inc., 194 NLRB 709 505 them of a move to a new plant, the Board has held that there is no basis for attributing the failure of the old plant employ- ees to transfer to the new to any unfair labor practices of the employer and has therefore held that the union does not represent the employees of the new plant.13 However, when the Board has found that the employer failed to bargain with the union over the conditions for permitting the old plant employees to transfer to the new, it has held that it is reasonable to infer that a majority of the employees would have transferred but for the employer's violation of Section 8(a)(5), and that the union is entitled to retain its status as majority representative at the new plant.14 In the instant case, the Respondent engaged in much more flagrant conduct than merely refusing to bargain about the effects on its employees of a plant relocation; here, it failed to inform the Union of its intention to move its plant, and in fact moved it secretly to frustrate the con- tinued representation of its employees by the Union and to escape its bargaining obligations. Furthermore, it dis- charged its employees at the old plant and unlawfully assist- ed another Union by recognizing it and granting it a union-security clause despite its lack of a majority. Its ac- tions thereby destroyed any possibility that the Helrose em- ployees would have transferred to East Rutherford if given the choice between some additional travel time or being laid off. But even more applicable to this case than the cases cited in footnote 14 are those in which the facts and viola- tions found are similar to those here-cases which involve what are aptly described as runaway shops. In the cases cited below, the Board has held that the union which repre- sented the employees at the old plant retained its status at the new." Except in Garwin and Rapid Bindery, where en- forcement on this point was denied, the distance between the old and new plants was relatively short. On its facts, this case most closely approximates California Footwear, 114 NLRB 765, and I therefore hold that Respondent must continue to recognize Local 119 as the representative of the unit employees wherever they are employed. The starting point for consideration of the General Counsel's proposition that Graphic is bound to observe the' contract made between Helrose and Local 119 is the Su- preme Court's opinion in N.L.R.B. v. Burns International Security Services, Inc., 406 U.S. 272 (1972). The Court held that a successor employer who takes over an unchanged bargaining unit and hires a majority of the employees al- ready employed there must bargain with the incumbent union, but is not bound to observe the substantive terms of 13 The Pierce Governor Company, Inc, 164 NLRB 97 14 Cooper Thermometer Company, 160 NLRB 1902, and Fraser & Johnston Company, 189 NLRB 142 The Board was reversed by the courts of appeal in both cases on this point , although it was sustained on its finding of a refusal to bargain about the effects of the plant move on the employees See Cooper Thermometer Company v. N L R B, 376 F.2d 684 (C A 2, 1967), and Fraser & Johnston Co v NLRB , 469 F 2d 1259 (C A. 9, 1972) 15 California Footwear Company, 114 NLRB 765, enfd sub nom. N.L R.B. v. Lewis, 246 F 2d 886 (C A. 9, 1957); Garwin Corporation, 153 NLRB 664, enfd as modified sub nom Local 57, International Ladies' Garment Workers' Union, AFL-CIO, 374 F 2d 295 (C A D C., 1967), Rapid Bindery, Inc, 127 NLRB 212, enfd as modified 293 F 2d 170 (C A 2, 1961), and The Hurley Company, Inc, 136 NLRB 551, enfd. 310 F 2d 158 (C.A. 8, 1962) 506 DECISIONS OF NATIONAL LABOR RELATIONS BOARD the contract which the union had negotiated with the prede- cessor employer. A successor employer is generally one who takes over and operates a preexisting business with those already employed there through purchase of the assets, reor- ganization , or merger. It presupposes that the successor and the predecessor were separate and unrelated entities before the transaction which substituted one for the other. In this case , however, the so-called new operation is operated by the same persons and with substantially the same ownership as the old. It is a misconception of the true situation here to regard Graphic as a successor of Helrose. They are one employer, the obverse and reverse of the same coin, and as Helrose was bound to observe and honor its contract with Local 119, its alter ego, Graphic, must do the same. CONCLUSIONS OF LAW 1. The Respondents are a single employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 2. New York Paper Cutters' and Bookbinders Union No. 119, a/w International Brotherhood of Bookbinders, AFL- CIO, and Local 723, International Brotherhood of Team- sters , Chauffeurs, Warehousemen and Helpers of America are labor organizations within the meaning of Section 2(5) of the Act. 3. All skilled employees engaged as manifold commercial binders and operators, assistant operators and apprentices on all types of cutting, stitching, covering, trimming, gather- ing, inserting, folding, collating (straight line, fully automat- ic, single sheet, or web gathering), embossing, and other machines normally used in bindery and finishing opera- tions; also all utility employees in the bindery, finishing, packing, shipping departments and loading platforms, em- ployed at Respondent's plants in New York City and East Rutherford, New Jersey, excluding office clerical employ- ees, professional employees , guards and all supervisors as defined in the Act, constitute a unit appropriate for the purposes of collective bargaining within the meaning of Section 9(b) of the Act. 4. New York Paper Cutters' and Bookbinders Union No. 119, a/w International Brotherhood of Bookbinders, AFL- CIO, was on May 15, 1972, and has been at all times thereaf- ter, the exclusive collective-bargaining representative of Respondent's employees in the appropriate unit, within the meaning of Section 9(a) of the Act. 5. By refusing in April and May 1972 to bargain with Local 119 as to its intentions to relocate its plant from New York to East Rutherford, and as to the effect of such reloca- tion on the employees in the appropriate unit at the Helrose plant, 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 in June 1972, and thereafter, to bargain with Local 119 as the exclusive bargaining representative of the employees in the appropriate unit at East Rutherford, New Jersey, and by refusing to observe and honor the ex- isting collective-bargaining agreement between itself and Local 119, 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 terminating its employees at Helrose on May 10, 1972, and thereafter, Respondent engaged in discrimination to discourage membership in Local 119, thereby engaging in unfair labor practices within the meaning of Section 8(a)(3); by the same conduct it interfered with, restrained, and coerced its employees in the exercise of the rights guar- anteed in Section 7 of the Act, thereby engaging in unfair labor practices within the meaning of Section 8(a)(1). 8. By recognizing Teamsters Local 723 under the circum- stances described above, Respondent has committed unfair labor practices within the meaning of Section 8(a)(2). 9. By including a union-security provision and a dues- checkoff provision in its unlawfully executed contract with Teamsters Local 723, Respondent has committed unfair labor practices within the meaning of Section 8(a)(3) and M. THE REMEDY 1. Having found that Graphic is the alter ego of Helrose, and that both Respondents were involved and participated in the commission of the unfair labor practices, I shall rec- ommend that they be held jointly and severally responsible for effectuation of the remedial provisions of the recom- mended Order. I shall also recommend a cease-and-desist order and the affirmative relief customarily ordered in cases of this nature to rectify the effects of the violations. 2. Respondents shall offer the employees listed below, all of whom were discriminated against as a result of the re- moval of the Helrose (New York City) plant to the Graphic (East Rutherford) plant, reinstatement to their former posi- tions or, if they no longer exist, to substantially equivalent positions at the Graphic plant, without prejudice to their seniority and other rights and privileges, dismissing if neces- sary all employees hired for that plant after June 1, 1972. Further, Respondents shall make whole the employees referred to above for any loss of pay they may have suffered by reason of Respondents' discrimination, by payment to them of a sum of money equal to the amount each would normally have earned from the date he was terminated as a result of the decision to relocate the Helrose plant to the date of a valid offer of reinstatement at Graphic's East Rutherford plant, less his net earnings during such period, to be computed in the manner prescribed in F. W. Wool- worth Company, 90 NLRB 289, plus interest at 6 percent per annum. 3. Respondent will be required to cease and desist from maintaining or giving effect to any collective-bargaining agreement with Teamsters Local 723 covering its employees at its East Rutherford plant, and to withdraw and withhold recognition from that labor organization as the representa- tive of such employees unless and until it is certified by the Board as their bargaining representative. I will also require Respondent to reimburse the dues and initiation fees de- ducted from its employees' wages at the East Rutherford plant pursuant to the illegal agreement entered into with that Union on May 17, 1972. 4. I also recommend that Respondent, upon request, bar- gain collectively with Local 119, as exclusive representative of its employees in the appropriate unit, with regard to its decision to relocate its New York City plant to East Ruther- HELROSE BINDERY, INC. ford and with regard to the effects such relocation has had and may have in the future on those employees. I will also recommend that Respondent observe and honor the con- tract entered into with Local 119 on January 1, 1971, for its full term, and that it bargain, upon request, with that Union for extension, renewal, or modification of that contract at the appropriate time. In view of the nature and extent of the unfair labor prac- tices which Respondent has committed. I shall also order that it cease and desist from interfering in any other manner with the rights of its employees to enjoy the statutory guar- antees of self-organization. Upon the foregoing findings of fact, conclusions of law, and pursuant to Section 10(c) of the Act, I hereby issue the following recommended: 16 ORDER Respondents Helrose Bindery, Inc. and Graphic Arts Finishing, Inc., their officers, agents, successors, and as- signs , shall: 1. Cease and desist from: (a) Refusing to recognize and bargain with New York Paper Cutters' and Bookbinders Union No. 119, a/w Inter- national Brotherhood of Bookbinders, AFL-CIO, as the exclusive bargaining representative of its employees in the following appropriate unit: All skilled employees engaged as manifold commer- cial binders and operators, assistant operators and ap- prentices on all types of cutting, stitching, covering, trimming, gathering, inserting, folding, collating (straight line, fully automatic, single sheet, or web gath- ering), embossing and other machines normally used in bindery and finishing operations; also all utility em- ployees in the bindery, finishing, packing, shipping de- partments and loading platforms, employed at the Employer's plants in New York City and East Ruther- ford, New Jersey, excluding office clerical employees, professional employees, guards and all supervisors as defined in the Act. (b) Recognizing or contracting with Local 723, Interna- tional Brotherhood of Teamsters, Chauffeurs, Warehouse- men and Helpers of America, or any successor thereto, as a representative of their employees for the purpose of collec- tive bargaining with respect to wages, rates of pay, hours of employment, or other terms and conditions of employment, unless and until such labor organization shall have been duly certified by the National Labor Relations Board as exclusive representative of the said employees. (c) Giving effect to the collective-bargaining contract dated May 17, 1972, between Respondent Graphic and Teamsters Local 723, or to any extension, renewal, or modi- fication thereof, unless and until Teamsters Local 723 shall 16 In the event no exceptions are filed as provided by Sec. 102.46 of the Rules and Regulations of the National Labor Relations Board , the findings, conclusions , and recommended Order herein shall , as provided in Sec. 102.48 of the Rules and Regulations , be adopted by the Board and become its findings, conclusions , and Order , and all objections thereto shall be deemed waived for all purposes. 507 have been duly certified by the National Labor Relations Board as the exclusive representative of the Respondent's employees. (d) Encouraging membership in Teamsters Local 723, or discouraging membership in Bookbinders Local 119, by conditioning the hire or tenure of employment, or any term or condition of employment, upon membership in, affilia- tion with, or dues payment to any labor organization, except as authorized in Section 8(a)(3) of the Act, as modified by the Labor-Management Reporting and Disclosure Act of 1959. (e) Discouraging membership in Bookbinders Local 119, or any other labor organization of their employees, by ter- minating the employment of any of their employees discri- minatorily, and by thereafter failing and refusing to reinstate them, or by discriminating in any other manner in regard to their hire and tenure of employment or any term or condition of employment. (f) In any other manner interfering with, restraining, or coercing its employees in the exercise of their rights under Section 7 of the Act. 2. Take the following affirmative action which I find will effectuate the policies of the Act: (a) Upon request, bargain collectively with Bookbinders Local 119, as the statutory representative of the employees in the above-described unit, as to the relocation of its plant from New York City to East Rutherford, New Jersey, and its effect on the employees employed by Helrose, and ob- serve and honor the collective-bargaining agreement en- tered into on January 1, 1971, by Local 119 and Respondent Helrose. (b) Withdraw and withhold all recognition of Teamsters Local 723 as the exclusive representative of their employees for the purpose of collective bargaining unless and until said labor organization has been duly certified by the National Labor Relations Board as the exclusive representative of such employees. (c) Reimburse each of their present and former employ- ees who joined Teamsters Local 723 after June 1, 1972, for all initiation fees, dues, and other moneys, if any, paid or turned over to said labor organization. (d) Offer to the employees listed below full reinstatement to their former positions or, if they no longer exist, to sub- stantially equivalent positions at Respondent's East Ruther- ford plant, without prejudice to their seniority or other rights and privileges, and make them whole in the manner set forth in the section entitled "The Remedy." George Elias J. Ayala Edward Alston Herbert Reid Alberto Carrisquillo Angelo Rivera Amador Carrisquillo Carmelo Velez Emma Gonzalez Jesus Velez William Hussey Marco Velez Ruben Lorenzo William Wilson Samson Pearson Dorothy Zeitz (e) Preserve and, upon request, make available to the Board or its agents, for examination and copying, all payroll records and reports, and all other records necessary to ana- lyze the amount of backpay due, and the right to reinstate- ment. (f) Post at its plant at East Rutherford, New Jersey, co- 508 DECISIONS OF NATIONAL LABOR RELATIONS BOARD pies of the attached notice marked "Appendix." t' Copies of upon receipt thereof, and be maintained for 60 consecutive the notice, on forms provided by the Regional Director for days thereafter, in conspicuous places, including all places Region 22, after being duly signed by authorized represent- where notices to employees are customarily posted. Reason- atives of the Respondents, shall be posted immediately able steps shall be taken by the Respondents to insure that said notices are not altered, defaced, or covered by any n In the event the Board 's Order is enforced by a Judgment of the United other material. States Court of Appeals, the words in the notice reading "Posted by Order (g) Notify the Regional Director for Region 22, in writ- of the National Labor Relations Board" shall read "Posted Pursuant to a ing, within 20 days from the date of this Order, what stepsJudgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board ." Respondents have taken to comply herewith.