Milton H. Kantor

National Labor Relations Board - Board Decisions

Jun 30, 1969

177 N.L.R.B. 408 (N.L.R.B. 1969)

408 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Milton H . Kantor, Gerald Kantor , Arnold Kantor,
Paul Kantor, as Individuals ; J. A. Steven, Inc.,
d/b/a Bargain Barn Foods ; South Discount Foods,
Inc., d/b/a Goldman 's Discount Foods; and
Dayton Discount Foods , Inc. and Retail Clerks'
Union , Local 1552 , Retail Clerks' International
Association , AFL-CIO and Local 430,
Amalgamated Meat Cutters & Butcher Workmen
of North America, AFL-CIO. Cases
9-CA-4547-1,-2,-3 and 9-CA-4548
June 30, 1969
DECISION AND ORDER
BY CHAIRMAN MCCULLOCH AND MEMBERS
FANNING AND BROWN
On August 9, 1968, Trial Examiner Leo F.
Lightner issued his Decision in the above-entitled
proceeding, finding that Respondents Milton H.
Kantor, Gerald Kantor, Paul Kantor, and South
Discount Foods, Inc., d/b/a Goldman's Discount
Foods,' had engaged in and were engaging in certain
unfair labor practices and recommending that they
cease and desist therefrom and take certain
affirmative action , as set forth in the attached Trial
Examiner's Decision. He further found that the
Respondents had not engaged in certain other unfair
labor practices alleged in the complaint and
recommended that such allegations be dismissed.
Thereafter, the Respondents and Charging Parties
filed exceptions to the Decision and supporting
briefs, and the General Counsel filed limited
exceptions, a supporting brief, and an answering
brief to the Respondents' exceptions, the Charging
Parties filed an answering brief to the Respondents'
exceptions, and the Respondents filed a reply brief
to General Counsel's limited exceptions.
By order dated November 25, 1968, the National
Labor Relations Board remanded the instant
proceeding for the purpose of taking further
evidence with respect to the Trial Examiner's finding
that the four Respondents mentioned above had
violated Section 8(a)(3) and (1) of the National
Labor Relations Act, as amended, by
discriminatorily failing to hire any of the employees
formerly employed by Respondents J. A. Steven,
Inc., d/b/a Bargain Barn Foods, and Dayton
Discount Foods, Inc. On March 12, 1969, Trial
Examiner Lightner issued his Supplemental Decision
reaffirming his finding of violations of Section
8(a)(3) and (1). Thereafter, the Respondents filed
exceptions to the Supplemental Decision and a
supporting brief, and the General Counsel filed a
supplemental brief.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the
National Labor Relations Board has delegated its
'Referred to collectively as Respondents South Discount.
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 briefs, and
the entire record in the case, and hereby adopts the
findings, conclusions," and recommendations of the
Trial Examiner with the following modifications:
We agree with the Trial Examiner's finding that
Respondents South Discount interfered with
employees in the exercise of their right to engage in
concerted activities, in violation of Section 8(a)(1) of
the Act, by causing mass, indiscriminate arrests of
applicants for employment who were picketing in
front of said Respondents' store. We also agree with
his finding that the closing of the Respondent J. A.
Steven's store on November 21, 1967, was
economically motivated and that Respondents'
failure to bargain, at that time and subsequently,
with the Unions which, prior to the closing, had
represented the employees in the store, did not
violate the Act.'
After careful consideration of the record of the
initial hearing in this proceeding and the hearing on
remand, however, we do not agree with the Trial
Examiner's finding that Respondents South
Discount Foods, Inc., and Milton H., Gerald, and
Paul Kantor violated Section 8(a)(3) of the Act by
failing to hire on or after December 6, 1967, any of
the 35 persons who had been employed by
Respondents J. A. Steven, Inc., and Dayton
Discount Foods, Inc., before the store was closed on
November 21, 1967.
As found by the Trial Examiner, the J. A. Steven
- Dayton Discount store (Bargain Barn Foods)
went bankrupt and closed after sustaining prolonged
operating losses. When the Kantors reopened the
store on December 12, 1967, under the corporate
name of South Discount Foods, Inc., they did so
under a new trade name (Goldman's Discount
Foods). The Kantors, under the corporate name of
Dayton Discount Foods, Inc., had managed on a fee
basis since June 1966, but not owned, the prior
store. In managing that store they had operated
under existing collective-bargaining agreements
negotiated in 1964 and 1965 between owner J. A.
Steven, Inc., and the Unions which then represented
the employees. The Trial Examiner found that the
'The Trial Examiner 's Conclusion of Law 5 is that Respondent Dayton
Discount Foods, Inc , violated Sec 8 (a)(5) and (1) of the Act by failing to
notify the Unions of the closing of the store on November 21, 1967. We
disregard this finding as being inadvertent, inasmuch as the Trial Examiner
found that such notification would have been futile and recommended
dismissal of the applicable allegation of the complaint. See section entitled
"Contentions of Parties and Concluding Findings " and last paragraph of
the Recommended Order of the Trial Examiner's Decision
'In agreeing that the Respondents connected with the reopened store
were not "successors" to the business of the old store, we rely on our
finding, infra, that Respondents South Discount 's failure to rehire any
employees of the former store was not unlawfully motivated.
177 NLRB No. 15
SOUTH DISCOUNT FOODS, INC.
Kantors, presumably for the purpose of avoiding an
obligation to bargain with the Unions,
discriminatorily jailed to hire any of the former
employees because they were represented by the
Unions. For proof of discriminatory motivation he
relied on prior cases in which the Kantors and their
corporate counterparts were found by the Board to
have committed unfair labor practices.'
We note at the outset that the Respondents, in
opening the new store, had no affirmative duty to
the employees of the old store, simply by virtue of
their having been employed at the same location and
in a similar enterprise, to consider them or any of
them for employment upon their application.' The
question here is whether the Respondents' failure to
hire any of them was discriminatorily motivated. In
our opinion the General Counsel has not established
such an unlawful motivation by a preponderance of
the evidence.
The employees' requests for reemployment were
made by their Unions, not individually. Instead of
acting upon these requests, made on December 6
and 8 , 1967, the Respondent went to other sources,
such as the Ohio State Employment Service, to
obtain new employees. The reason asserted for
recruiting new employees instead of taking back the
old was that there had been widespread pilferage in
the old store and the Respondents were not anxious
to employ any person who might have been involved
in such pilferage. Respondent introduced 'evidence
that, acting on the suspicion that substantial
pilferage was occurring, in September 1967, the
management instituted changes in the store's
security system and in October began an exhaustive
investigation which resulted in the discharge of some
individuals and the implication of many more, but
that the investigation was not completed at the time
the store closed in November.
It is not seriously disputed that many if not most
of the persons employed at the old store were
implicated in the pilferage to the extent that the
Kantor management had reason to suspect them.
The gist of the relevant evidence is that many of
those interrogated by management, whether
admitting or denying complicity, pointed the finger
of guilt at others. Perhaps further investigation
would have removed the cloud from some of those
accused or would have implicated others." However,
the closing of the store within weeks after the,
preliminary investigation negates any basis for
inferring that the investigation was or should have
been completed prior to the opening of the new
store '
'Ontario Foods, Inc, 144 NLRB 1057, and 149 NLRB 1528,
Priced-Less Discount Foods, Inc., 157 NLRB 1143, and 162 NLRB 872
'Cf. Tri State Maintenance Corporation, 167 NLRB No . 140, enfd as
modified 408 F.2d 171 (C.A.D.C., 1968).
'No employees in the meat department were implicated' in the
investigation , and there was some indication of Respondent 's later
willingness to reemploy them , with some uncertainty , however, as to
whether this was to be in the new store or at other stores under the Kantor
management.
409
What we have here is a situation, where a store
had suffered operating ' losses over a prolonged
period until it was closed for legitimate economic
reasons. Shortly before the store • closed,
management discovered that certain of its employees
had engaged in widespread pilferage, had reason to
suspect that many still unidentified employees were
involved, and had reasonable grounds for concluding
that pilferage was a principal cause of the store's
failure." The General Counsel offered no evidence in
contradiction of the evidence adduced by
Respondents South, Discount in. support, of their
defense. It is perfectly plausible that Respondents
South Discount, upon reopening the new store,
acted upon a desire to commence operations with a
new work force rather than rehire employees who
may have been involved in pilferage at the old store.
In the circumstances, as the record does set forth a
reasonable basis for Respondents' refusal to rehire
the former employees, which is totally unrelated to
union activities, and since the only evidence of
unlawful motivation is that which can be inferred
from Respondent Kantors' unfair labor practices in
other unrelated cases, which is offset by the fact that
the Kantors had dealt amicably with the Unions for
over a year prior to the closing of the Steven store,
we find that the General Counsel has failed to
establish by a preponderance of the evidence that
Respondents' asserted reason for failing to contact
and hire the former employees at the old store was
pretextual. Accordingly, we shall dismiss the
complaint insofar as it alleges a violation of Section
8(a)(3) in this regard.
r
ORDER
Pursuant to Section l0(c)',of the National Labor
Relations Act, as amended, the National Labor
Relations Board, adopts as its Order the
Recommended Order of the Trial Examiner, as
modified herein, and hereby orders that the
Respondents South Discount Foods, Inc., Dayton,
Ohio, its officers, agents; successors, and assigns,
and Milton H. Kantor, Gerald Kantor, and Paul
Kantor, as individuals, shall take the action set forth
in the Trial Examiner's Recommended Order as so
modified:
1. Delete paragraph 1(a) and reletter 1(b) and 1(c)
as 1(a) and 1(b), substituting for "In any other" in
relettered paragraph 1(b), the words "In any like or
related."
'Cf Quick Shop Markets, Inc., 168 NLRB No 30 ,
'The Trial Examiner refers on several occasions to a statement by
Respondents ' counsel at the initial hearing to the effect that Respondents
were not relying on the evidence of pilferage for the. purpose of
disqualifying any discnmmatee from, reinstatement . This statement was
made, however, at a time when counsel had been led to believe that the
issue being litigated was only whether the closing of the old store had been
discnmmatonly motivated In this context , we do.not find this statement
to be inconsistent with the Respondents ' defense to the alleged
discriminatory refusal to hire
410 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
2. Delete paragraphs 2(a) and 2(b) and reletter
2(c) and 2(d) as 2(a) and 2(b).
3. Delete the first and fourth indented paragraphs
of the notice and the "Note."
4. Delete from the first line of the third indented
paragraph of the notice, the words "in any other"
and substitute "in any like or related."
IT IS HEREBY FURTHER ORDERED that the
complaint herein be, and it hereby is, dismissed
insofar as it alleges violations of the Act not found
herein.
MEMBER BROWN, dissenting in part:
Contrary to the majority, I would find that
Respondents South Discount discriminatorily
refused to rehire the 35 employees of Respondent
Steven in violation of Section 8(a)(3). I would
further find that South Discount is a successor to
Respondent Steven, and as such has violated Section
8(a)(5) by refusing to recognize the Unions.
TRIAL EXAMINER'S DECISION
STATEMENT OF THE CASE
LEO F. LIGHTNER , Trial Examiner: This proceeding'
was heard before me in Dayton , Ohio, on April 23, 24,
25, and 26, 1968, on the amended consolidated complaint
of General Counsel , as amended, and the answer, as
amended , of Milton H. Kantor, Gerald Kantor, Arnold
Kantor, Paul Kantor, as individuals , South Discount
Foods , Inc., and Dayton Discount Foods, Inc.,
Respondents.' The complaint alleges violations of Section
8(a)(5), (3 ), and (1) and Section 2(6) and (7) of the Labor
Management Relations Act, 1947, as amended , 61 Stat.
136, herein called the Act . The parties waived oral
argument and briefs filed by the General Counsel and the
Respondent have been carefully considered.
Upon the entire record ,' and from my observation of
the witnesses , I make the following:
Findings and Conclusions
1. THE BUSINESS OF THE VARIOUS RESPONDENTS
It is undisputed that Respondent Steven, an Ohio
corporation, was the sole owner of a retail food store, at
' No appearance was entered for J. A Steven, Inc.
'No answer was filed on behalf of J A Steven , Inc. However, Jack
Gershow , president of J. A. Steven , Inc., appeared as a witness , as more
fully set forth infra
A charge was filed in Case 9-CA-4547, on December 11, 1967; in Case
9-CA-4547-2, on December 14, 1967; in Case 9-CA-4547-3, on December
18, 1967; and an amended charge , in the cases set forth, was filed on April
5, 1968. A charge , in Case 9-CA-4548 , was filed on December 11, 1967, an
amended charge was filed on January 8, 1968 , and a second amended
charge was filed on April 8, 1968 . A consolidated complaint , and an order
consolidating cases, was issued on February 20, 1968 , and an amended
consolidated complaint was issued on April 10, 1968, and it was further
amended , relative to the allegations of paragraphs 6 and 7 during the
hearing herein.
'To avoid an untimely delay in concluding the hearing herein , at a late
hour, the parties agreed to stipulate to the authenticity of a check , marked
TX Exh. 1, and, even though inadvertently omitted from the transcript, a
Court record of a foreclosure proceeding , identified as TX Exhs . 2A, 2B,
and 2C , reserving the right to object to receipt . General Counsel and
counsel for the respective Charging Parties object to receipt of the Court
documents , on the ground of materiality. The objection , I find , not well
taken for reasons explicated infra.
4601 South Dixie Drive, Moraine City, Dayton, Ohio, at
all times, from April 2, 1964, to and including November
22, 1967, where the events which gave rise to the
complaint herein occurred. It is undisputed that during the
year immediately preceding November 1967, a
representative period, Respondent Steven's gross retail
sales were valued in excess of $500,000, that during the
same period, Respondent Steven had an indirect inflow of
goods and materials, in interstate commerce, valued in
excess of $50,000, which were purchased and transported
directly to said store in Dayton, Ohio, from other
enterprises located in the State of Ohio, which, in turn,
had purchased and received said products directly from
points outside the State of Ohio.
Dayton Discount Foods, Inc., is an Ohio corporation,
and at all times material herein, had the following
officers: Milton H. Kantor, president; Gerald Kantor, vice
president and treasurer; Paul Kantor, vice president;
Daniel Rosenthal, secretary; and Allan Gradsky, assistant
secretary, and the following stockholders: Milton H.
Kantor, Gerald Kantor and Paul Kantor, with the first
two named each owning 40 percent and the last named
owning 20 percent.'
It is undisputed that Respondent Dayton Discount,
commencing in June 1966 and continuing until November
21, 1967, under the terms of a management agreement
with Respondent Steven, directed and controlled the
operation of the Retail Store at 4601 South Dixie Drive,
including control of the labor relations policies, as agent
of Respondent Steven.
Respondent South Discount Foods, Inc., d/b/a
Goldman's Discount Foods, was incorporated, under the
laws of Ohio, on December 6, 1967, and began the
operation of a retail food store at 4601 South Dixie Drive,
on December 12, 1967, with the same individuals holding
the same positions, as officers, as those enumerated,
supra, as officers of Dayton Discount, and with the same
individuals holding the same percentage of stock as they
hold in Dayton Discount. It is undisputed that a
projection of the retail sales , based on the experience
commencing December 12, 1967, to the opening of the
hearing herein, in April 1968, reasonably permit a finding
that said sales will exceed $500,000, in value, and that
during the same projected period Respondent South
Discount will have a direct inflow of goods and materials,
in interstate commerce, valued in excess of $50,000.
The complaint alleges and it is undisputed, since no
answer was filed, that Respondent J. A. Steven, Inc.,
d/b/a Bargain Barn Foods, is, and at all times material
was, an employer engaged in commerce and in operations
affecting commerce as defined in Section 2(2), (6), and (7)
of the Act.
The complaint alleges , the answer denies, and I find
that Respondent Dayton Discount, and its officers
Respondents Milton H. Kantor, Gerald Kantor and Paul
Kantor, as individuals, are each an employer within the
meaning of Section 2(2) of the Act, engaged in commerce
and in operations affecting commerce as defined in
Section 2(6) and (7) of the Act.
The complaint alleges, the answer denies, and I find
that Respondent South Discount Foods, Inc., d/b/a
Goldman's Discount Foods, and its officers, Respondents
Milton H. Kantor, Gerald Kantor, and Paul Kantor, as
individuals, are each an employer, engaged in commerce
'The four Kantors, named as individual Respondents , are brothers.
SOUTH DISCOUNT FOODS, INC. 411
and in operations affecting commerce , on and after
December 6, 1967,' as defined in Section 2(2), (6), and (7)
of the Act.
II. THE LABOR ORGANIZATIONS INVOLVED
Retail Clerks ' Union , Local 1552, Retail Clerks'
International Association , AFL-CIO, and Local 430,
Amalgamated Meat Cutters & Butcher Workmen of
North America, AFL-CIO, herein referred to as Clerks
and Meat Cutters, respectively , or Unions, collectively,
are each a labor organization within the meaning of
Section, 2(5) of the Act.
III. THE ALLEGED UNFAIR LABOR PRACTICES
Issues
The issues raised by the pleadings and litigated at the
hearing are: (1), Whether Respondents Steven, Dayton
Discount , and the individual Respondents , commencing
November 21, 1967, when the store closed , failed and
refused to bargain collectively in good faith with the
Union's by: (a), refusing to recognize the Unions; (b),
refusing to meet with the Unions ' representatives ; or (c),
unilaterally eliminating the work of all of the employees,
without prior notice to, our discussion with, the unions, in
contravention of the provisions of Section 8(a)(5) and (1)
of the Act; or (2), whether Respondent South Discount
Foods, and the individual Respondents , failed and refused
to bargain in good faith with the Unions by: (a), refusing,
since on or about December 6, 1967, to discuss the
reinstatement of the employees , terminated without notice
on November 21, 1967; or (b), refusing to employ said
employees , in contravention of the provisions of Section
8(a)(5), (3 ) and (1) of the Act; or (3), by Respondents
Steven , Dayton Discount , and the individual Respondents,
bypassing the Unions and negotiating directly with
employees , on or about November 7, 1967, by requesting
the employees to sign new applications for employment,
without prior notice to, or discussions with , the Unions, in
contravention of the provisions of Section 8(a)(5) and (1)
of the Act; or (4), by Respondents Steven , Dayton
Discount , and the individual Respondents , terminating 36
employees , on November 21, 1967, in contravention of the
provisions of Section 8(a)(3) and (1) of the Act;' or (5), by
Respondent South Discount and the individual
Respondents interferring with , restraining and coercing, its
employees in the exercise of rights guaranteed them in
Section 7 of the Act, by ordering representatives of the
Clerks Union and employees off Respondent ' s premises,
and by having them arrested while they were engaged in
picketing in front of the store of these Respondents, on
the various dates, commencing December 12, 1967, to and
including January 2, 1968, in contravention of the
provisions of Section 8(a)(1) of the Act.
Respondents, except Respondent Steven, by answer,
deny the commission of any unfair labor practices.
Subsidiary questions, in the nature of matters of the
defense, are set forth and considered infra.
Supervisory Personnel
The complaint alleges and the answer denies that
Milton Kantor, Gerald Kantor, Paul Kantor, Arnold
Kantor, Allan Gradsky, and Daniel Rosenthal are
supervisors, within the meaning of Section 2(11) of the
Act, and agents of Respondent's Steven, Dayton Discount
and South Discount. It is undisputed that all of those
named , except Arnold Kantor, were officers of Dayton
Discount and South Discount, as I have found supra. I
have also found, for reasons further explicated infra, that
Dayton Discount was the agent of Respondent Steven, for
the limited period of time indicated. None of those named
participated in the day-to-day operations, except through
other supervisory personnel, as further explicated infra.
Accordingly, I find it unnecessary to find supervisory
capacity, since all, except Arnold Kantor, unquestionably
were agents of all of the corporate Respondents. However,
it is reasonable to infer from the record, as further
explicated infra, that Arnold Kantor was in charge of the
South Discount store, commencing December 6, 1967,
during the preparations for opening, and during the period
of selection of employees, prior to the opening of the store
on December 12, 1967. Accordingly, I find that Arnold
Kantor was a supervisor, of Respondent South Discount,
within the meaning of Section 2(11) of the Act, during that
period of time, and was an agent of South Discount
during that period.
Background
The facts set forth under this subsection are undisputed.
Louis S. Goldman, a Dayton lawyer, is a partner in
LMG Investments, which is the owner of the real estate,
at the location of the food store, at 4601 South Dixie
Drive, and adjacent property. Goldman is also president,
and a substantial stockholder in Goldman's Inc., formerly
Giant Value Distributing Company, Inc., which operates
Goldman's discount stores, and was the leasee of the
shopping area. The shopping area, described in the record
as 4601 South Dixie, appears to be comprised of three
adjacent stores in a single building , identified as
"Goldman's," which Goldman described as a hardware
store, a "Bargain Barn Foods," which Goldman described
as a Goldman trade name, and which is the grocery with
which we are herein concerned, and a doughnut shop. On
the far side of the parking lot, another building is owned
by South Dixie Corporation, inferentially a separate
Goldman enterprise, where a portion is leased to a
furniture operation called "Goldman' s Discount
Furniture," and another portion of which is leased to
Burger-Chef. Goldman acknowledged an effort to create a
'For reasons explicated Infra, I have omitted Respondent Arnold
Kantor . I also defer for detailed consideration and finding , Infra. the
allegations that South Discount and the individual Respondents are the
alter ego, or successor, of Respondent Steven , or Respondent Dayton
Discount.
At the outset of the hearing, General Counsel moved to amend the
complaint to incorporate the names of the 36 alleged discriminatees
However, General Counsel 's list contains only 35 names . Those listed are:
Elsie Aggee, Delilah Alsept , Roger Arwood , Lelia Baker , John W. Blair,
Patti Bowell , Larry Callahan , Jerry Copeland , James Cordray, George
Curtis, Brenda Fritts, Dudley Hammond , Barbara Hardin , William Hill,
Carmella Hines , Sandra Hipsher, Glenda Hollan , Vaughn D. Howard,
Norma Justice , Marie Lewis , Billy Joe Lairemore, Luther H Magill,
Diana McKnight , Lee McKnight , John McCreary , Harkless O'Bryant,
Larry Ogan , Robert Reedy , Thomas Scarbrough , Winford Smith, Nancy
Serbontez , Mary J Stone, Tim Strong, Lucretia C. Thompson, and Mary
Wagers
Kenneth J Pfarrer, National Secretary and Treasurer of the Meat
Cutters Local, identified Baker , Curtis, Hardin, Lee McKnight,
Scarbrough , and Wagers as members of that Union.
Pursuant to my request for clarification, by stipulation , of June 27,
1968, General Counsel and Respondent have acknowledged the accuracy of
G C. Exh 2.
412 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
public impression of a total Goldman operation , which he
characterized as "one stop shopping for their total needs,"
and, inferentially , this applied to other Goldman locations
as well , identified herein as Huber Heights and Gettysburg
Road locations . Goldman is not a Respondent herein.
Goldman asserted that none of the Kantor group' had any
financial interest in any of the Goldman operations, as
officers or stockholders.
Giant Value Distributing Company, subsequently
Goldman ' s Inc ., leased the "Bargain Barn Foods"
location from LMG Investments , and subleased that
portion to Respondent Steven , inferentially on an
unspecified date in 1964.
Jack Gershow is president of Respondent Steven, and a
75 percent stockholder . It is reasonable to infer that his
wife , Annabelle , owned most , if not all, of the remainder.
Steven was incorporated in late 1963 and commenced
operations of the "Bargain Barn Foods " store on April 2,
1964. The store is described as containing a meat
department , dairy department , frozen food department,
produce department and a grocery department. It is
reasonable to infer that it is a supermarket type operation,
with cashiers checking out customers ' purchases . Gershow,
with some assistance from his wife and uncle , managed
the store until May 29 , 1965, at which time he entered
into a management agreement with Great Value
Corporation , a grocery store operator' Under the
agreement , which was terminated approximately a year
later, Great Value had complete management of the store,
including bookkeeping and the signing of checks.
Subsequently , commencing June 12 , 1966, and
continuing to and including November 21, 1967, the last
day the store was open for business under the ownership
of Respondent Steven, the Kantor group managed the
store , under the corporate identity of Dayton Discount
Foods, Inc., under a management agreement with
Gershow and his wife, Annabelle, as more fully set forth
infra.
The record reflects that the Kantor group have, at
various times operated a number of discount grocery
stores, in a variety of locations. Certified Public
Accountant Allan Gradsky , who is also assistant secretary
of many of the Kantor corporations , estimated the total
number of these stores as approximating 14, in December
1967. Included are the following : Ontario Foods, Inc.,
Cincinnati , Ohio; ' Priced-Less Discount Foods, Inc.,
d/b/a Payless, at Springfield, Ohio;" Costless Discount
Foods, at Florence, Kentucky; Milton and Jerry, Inc.,
Springfield, Ohio; Spendless Discount Foods, Toledo,
Ohio; Payless Discount Foods , Evendale , Ohio ; Rink's
Middletown Discount Foods, Middletown , Ohio; Rink's
Discount House, Florence, Kentucky ; and Newport
Discount Foods, Inc., Bellview , Kentucky . In addition, the
Kantor group are at least part owners of a store identified
as GOVCO, in Indianapolis , Indiana . In addition,
inferentially during 1966, Dayton Discount Foods, Inc.,
was incorporated . Respondent Dayton Discount, in
addition to being a party to the management agreement,
relative to the store at 4601 South Dixie Drive, also
operated a store at 2150 North Gettysburg Avenue,
Dayton , Ohio , at Goldman' s Bargain Center, doing
'This term is intended to include Milton H Kantor , Gerald Kantor, and
Paul Kantor , as individuals , who, insofar as this record reveals , were the
sole owners and stockholders of the various Kantor corporations . However,
no financial interest, in the Goldman enterprises , appears to have been held
by other officers of Kantor corporations.
'Not to be confused with Giant Value Distributing Company, a
Goldman enterprise
business under the name of Goldman's Discount Foods,
commencing November 1966. Huber Heights Discount
Foods, Inc., an Ohio corporation, incorporated by the
Kantor group, on unspecified date in 1967, has operated a
supermarket adjacent to Goldman's Discount Store in
Huber Heights, another suburb of Dayton, since October,
1967.
On January 11, 1965, Respondent Steven and the
Clerks entered into a collective -bargaining agreement,
effective from that date through May 26, 1968, with an
automatic renewal clause thereafter. The agreement
contained a valid union security provision. The unit
coverage and other provisions are set forth, or referred to,
infra. On June 10, 1964, Respondent Steven and the Meat
Cutters entered into a collective -bargaining agreement
which, by its terms, was effective from June 1, 1964,
through June 1, 1968, with an automatic renewal
provision. This agreement contains a valid union security
provision. The description of the unit and other provisions
are set forth, or referred to, infra.
Inferentially, in late May or early June 1966, Gershow
prevailed upon Milton H. Kantor to undertake the
management of the "Bargain Barn" store . Others present
at this meeting were Allan Gradsky, a independent CPA,
as well as an officer of various Kantor enterprises, as
described supra, and also formerly an accountant for
Respondent Steven from late 1963 until late 1964, and
again commencing June 1966, Daniel Rosenthal, attorney
for Kantor, as well as an officer of the various Kantor
enterprises, and Jerry Office, attorney for Gershow."
The Management Agreement of June 1966
While the precise date the agreement for management
of the Bargain Barn Store was executed is obscure by its
terms it became effective June 12, 1966. The agreement is
between Respondent Steven and Respondent Dayton
Discount, designated as first and second party,
respectively, with Jack Gershow and Annabelle Gershow
designated as third and fourth parties , respectively. The
agreement provides, inter alias
pp. 1' = Respondent Steven, as "owner and operator" of
a grocery store - , "does hereby employ" Respondent
Dayton Discount - " to manage and operate the
same , hire and fire all personnel, buy and sell
merchandise for the said store, establish its policy,
select suppliers , disperse all monies for payroll and
accounts payable, deposit all monies in a Special
Account to the exclusion of Respondent Steven;
pp. 2 provides for periodic reports, inferentially the
employment of an accountant or auditor, whose services
are chargeable to the Special Account, with copies of
such reports to Respondent Steven and Jack Gershow;
pp. 3 provides for payment out of the Special Account
of the cost of advertising, prior to the opening of
[Respondent Dayton Discounts'] store on Gettysburg
Avenue, with a further payment thereafter, for
advertising, equal to 1 percent of the weekly weekly
'Respondent in cases reported as 144 NLRB 1057 and 149 NLRB 1528,
considered further infra
"Respondent in cases reported at 157 NLRB 1143 and 162 NLRB No
75, considered further infra
"There is confusion in the record in reference to Attorneys Jerry Office,
Senior and Junior, and it is impossible to determine from the record which
of these two is referred to at various points in the testimony. However, I
find this omission of no consequence.
"Pp. indicates numbered paragraph in Agreement
SOUTH DISCOUNT FOODS, INC.
gross sales, with a minimum of $500 per week;
pp. 4 provides that the shareholders of [Respondent
Steven] "by their signatures affixed hereto"" shall not
transfer their stock without the consent of [Respondent
Dayton Discount];"
pp. 5 recites that Respondent Steven is indebted in the
total amount of $375,000, both secured and unsecured,
as of June 12, 1966, for merchandise, fixtures and
equipment, and is operating as a tax option Subchapter
"S" corporation under the Technical Amendments Act
of 1958, Internal Revenue Code, none of which is
assumed by [Respondent Dayton Discount.] In addition,
"it is further agreed between the parties hereto that this
Agreement shall not be construed to be a partnership or
join venture between them or between any affiliated
corporation or business of [Respondent Dayton
Discount], nor can [Jack Gershow] or any stockholders
or officers of [Respondent Steven] in any way
personally obligate [Respondent Dayton Discount] or its
affiliates for any existing or hereafter acquired debts or
obligations of the [Respondent Steven]. The
[Respondent Steven] shall continue for tax purposes as
a Sub-Chapter "S" Corporation until such time as the
[Respondent Dayton Discount] shall determine it shall
be discontinued or until the [Jack and Annabelle
Gershow] shall have used up all available income tax
loss;
pp. 6 provides for a salary of $250 per week for Jack
Gershow, with other specific fringe benefits, as a
consultant, with specific owner-managerial duties to be
assigned by [Respondent Dayton Discount.] Also
provided is "[Jack Gershow], or his designee, shall have
the right to examine and audit at any time the books
and records of [Respondent Steven];
pp. 7 provides that Respondent Dayton Discount will
receive $300 per week for its services to be accrued for
6 months, and dispersed when in the opinion of said
Respondent the same can properly be paid;
pp. 8 provides that when all accounts payable are
reduced to $100,000, profits of Respondent Steven
thereafter shall be distributed "as the law will permit"
equally, in the proportion of one-half to Respondent
Dayton Discount and the other half to Jack and
Annabelle Gershow; jointly. In addition, at such time,
.,all salaries" [inferentially the salary of Jack Gershow
and the management fee of Respondent Dayton
Discount] are to be readjusted and "increased in equal
amounts" between Respondent Dayton Discount and
Jack Gershow, "at the discretion of [Respondent
Dayton Discount]
pp. 9 Fifty percent of all "issued" stock of [Respondent
Steven] is to be placed in escrow with [Respondent
Dayton Discount], with the latter having the option to
demand [transfer] to it or its designee after [Respondent
Steven] shows a profit for six consecutive months. In
addition, [Respondent Dayton Discount] has the option
to terminate the agreement "any time after one year of
operation" and agrees to surrender the fifty percent of
issued stock, if the same had been transferred to
[Respondent Dayton Discount]. It is also provided that
"no additional stock shall be issued by [Respondent
Steven] unless mutually agreed upon by [Respondents
"I find it reasonable to infer, from the signatures , that Jack and
Annabelle Gershow are the sole stockholders of Respondent Steven.
"I find it reasonable to infer this means the consent of the Kantor
group , since corporations can only act through living persons.
413
Steven and Dayton Discount].
pp. 10 Provides that [Respondent Dayton Discount] has
the right to forthwith terminate the agreement if the
"payable" of [Respondent Steven] shall exceed $375,000
"upon immediate audit."
pp. 11 Provides that [Respondent Steven] shall receive
all rebates, discounts. etc.
pp. 12 Provides that if [Respondent Dayton Discount]
or its designee shall acquire the 50 percent of issued
stock, as provided in pp. 9 and [if] said Respondent
subsequently agrees to become a public corporation, in
such event; (a) said [Respondent] has the option of
acquiring all shares of [Respondent Steven], then owned
by Jack and Annabelle Gershow, in exchange for which
the two latter named are to receive the equivalent of
$100,000 in Class A voting stock in [Respondent
Dayton Discount]; (b) upon the exercise of the option
set forth in (a) by [Respondent Dayton Discount] Jack
Gershow is to be retained on a five year contract of
employment, at the salary and other benefits existing at
such time; (c) the option set forth under (a) is
conditioned upon [Respondent Dayton Discount] having
acquired and retaining 50 percent of the "issued" stock
of [Respondent Steven], as provided in pp. 9.
It is reasonable to infer from the record that the
accounts payable were never reduced to $100,000, that
Respondent Steven did not have a profit for six
consecutive months, and that the alternatives and options
enumerated, as applying in such an event, were never
exercised.
Appropriate Units - Clerk's and Meat Cutter's
Majority Status
It appears undisputed and I find the following
employees of Respondent Steven constitute separate units,
each of which is a unit appropriate for the purposes of
collective bargaining within the meaning of Section 9(b) of
the Act:
(a) All retail store employees, excluding meat
department employees, store managers, assistant store
managers , and all professional employees, guards and
supervisors as defined in the Act;
(b) All meat department employees, excluding all
professional employees, guards and supervisors as
defined in the Act, and all other employees.
It is undisputed that the collective bargaining
agreements with the Clerks and Meat Cutters, covering
the described units respectively, each contained a valid
union security provision, in full force and effect
throughout the period of Respondent Dayton Discounts'
operation of the store, and no revocation of authorization
of dues deductions was ever filed by any employee.
Accordingly, I find that the Unions, at all times until
November 22, represented a majority of the employees in
the respective unit.
Kantor's Operation of Steven
It is undisputed that the Kantor group and Kantor
supervisory personnel operated the Steven Store from
June 1966 to and including November 21, 1967. The
degree of participation by Gershow is set forth infra.
In immediate charge of day to day operations there was
a store manager, assistant manager, and an individual in
charge of the night crew. In addition, Kathy Wellman,
bookkeeper, was not a member of the Union. Thomas
414 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Scarbrough, head of the meat department, was a member
of the Meat Cutters, Marie Lewis, head cashier, and,
inferentially, other department heads were members of the
Clerks.
The store managers , in order of service, were Bob
McKay, Jessie Reinhardt, and Delvis Joe Penly." Leonard
Chudy was assistant manager for approximately the last
15 months of the operation of the Steven Store, ending
November 21, having been transferred from Rink's No. 1,
in Cincinnati , by Jerry Stamp. Kenneth Gudgeon, a
supervisor, was night crew leader from September 1966
until January 4, 1967, then, inferentially, worked on the
day shift, until shortly before the closing of the store,
when he resigned.
In addition, the Kantor group employed specialists who
were on the payroll of other Kantor corporations, who
acted as overseers, relative to specific functions, in the day
to day operations of the store, by visiting the store at
various periods of time Arnold Meade, who is described
as a general manager for the Kantor group, and was
identified by Milton H. Kantor as being on the Payless
Discount Food's payroll, personally employed some of the
management personnel and issued instructions, on
occasions, to the store managers and others. Jerry Stamp,
whom Milton Kantor described as being on the payroll of
Payless Foods, would appear at the Steven Store, when
requested by the manager, or by Meade or Morter, when
they had a problem, described by Kantor as "he took care
of merchandising problems, pricing, displays in the store."
Harry Morter related that he acted as a supervisor of the
Steven Store in two separate periods, June, July and
August, 1966, and again from October 1966 until
approximately September, 1967, when he was transferred
to the Huber Heights Store. It was Morter's function to
approve the payment of bills at the Steven store, and he
was an employee of Dayton Discount at that time.
Wineford Oney, described by Milton Kantor as the
produce supervisor, was on the payroll of Spendless
Discount Foods. Robert Ahr, described by Milton Kantor
as the meat supervisor, was on the payroll of Payless
Discount Foods. Kantor acknowledged that he personally
hired Morter and Ahr. It is undisputed that these various
supervisors would appear at the Steven Store on one or
more days each week and, in the instances of Meade,
Morter and Stamp would advise the manager or assistant
manager as to improvements or modifications, while Oney
would consult with the produce supervisor and Ahr would
consult with the meat supervisor.
It is undisputed that, each week, Kathy Wellman, the
bookkeeper, made computations for payroll purposes, in
conformity with the provisions of the collective-bargaining
agreements. These lists were submitted to CPA Gradsky,
who also provided a payroll service. The checks were then
returned to Wellman, for her signature, or, in the absence
of Wellman, the signature of the store manager. Wellman
also computed and forwarded checks covering dues
checkoff, and Union Welfare Fund payments.
"Milton H. Kantor asserted that all three of the named managers were
hired by Arnold Meade McKay's term, as manager , was from June until
September 1966, at which time , inferentially , he was transferred to the
Milton and Jerry store in Springfield , Ohio Reinhardt was manager from
approximately September 1966 until approximately 2 weeks prior to the
closing of the store , on November 21, 1967, when he was separated, as
more fully considered infra While Reinhardt asserted he was hired by
Milton Kantor in November 1964, and started employment in January
1965, at Florence , Kentucky , I find it unnecessary to resolve this conflict
Penly succeeded Reinhardt.
While Gradsky initially denied that he handled the
Labor Relations Policies at the Bargain Barn Store, after
June 1966, or that he contacted the Clerks Union on
behalf of Respondent Dayton Discount, he acknowledged
that he was in touch with the Union relative to
Respondent Steven. Gradsky acknowledged advising
Kenneth V. Mitchell, president of the Clerks Union, in
June 1966, that the provisions of the collective-bargaining
agreement with the Clerks would be complied with,
however, Gradsky asserted that he made this
representation on behalf of Gershow, as distinguished
from Respondent Dayton Discount. Mitchell credibly
related that he wrote a letter to Milton H. Kantor, under
date of June 13, 1966, after talking to Les Swearingen, at
the Bargain Barn Store, the same morning, in which he
demanded continued recognition. Mitchell asserted that he
was advised, by Gradsky, within a week, that there would
be no problem. Mitchell asserted that thereafter most of
the grievances were settled within the store. Mitchell did
obtain Gradsky' s assistance when a Health and Welfare
payment was late in arriving. Mitchell and Gradsky also
agreed that Wellman, bookkeeper, would sign up new
members, by obtaining applications, rather than having
the Union's steward interfere with employees during work
time."
The Events of November 21, 1967 - Creditor's
Meeting - Store Closing
Gershow asserted, and it appears undisputed, that after
the management agreement was entered into Respondent
Dayton Discount did the hiring and firing of employees,
although Gershow did make recommendations 17 Gershow,
who visited the store several days a week, particularly
during October and November 1967, credibly related that
Milton Kantor and Gradsky advised him to "keep his
hands off" when he mentioned conditions of which he did
not approve.
It appears undisputed that, on November 15, a meeting
was held at Milton Kantor's home, with Gershow, his
attorneys Office, Senior and Junior, Rosenthal, Gradsky
and Gerald Kantor. Milton Kantor asserted that it was his
view that the store needed an additional 10 days of credit,
" I find of no consequence reference in the record to picketing, in
October 1967, when the Huber Heights Store opened The picketing was at
that location
I also find it unnecessary to set forth undisputed recitations of Kenneth
J Pfarrer , of the Meatcutters , in which he detailed a cordial relationship
and agreement on problems , in meetings he had with Gradsky, prior to
November 1967
"1 find of no consequence the assertion of Gershow that he was advised
by Glenda Hollan , assistant bookkeeper , that he was not allowed to see the
check book . Gershow acknowledged that he called Gradsky who advised
him to leave the girls alone, and to come to Gradsky ' s office if he wanted
information Gershow placed the time as 6 to 8 months prior to his
testimony , which would be in August or October 1967 1 have found,
supra , the management agreement , pp 2, provided for periodic reports,
and, pp 6, the right to inspection and audit
I do not credit the assertion of Reinhardt , who was discharged as
manager, that Meade instructed him that he should not permit Gershow to
look at any records I similarly do not credit Reinhardt 's assertion that
Wellman advised him that she had been similarly advised , in September
1966, when he became store manager, without identifying the source of
these instructions , or the assertion of Reinhardt that Milton Kantor
similarly instructed him "toward the last few months of this, where things
got to being kind of, you might say a mixed up mess "
I also do not credit the assertion of Reinhardt that "for about 2 months
prior to the time all this happened" the bookkeeping office was closed
"quite a bit" and Reinhardt was "more or less barred from any access,"
thus did not know what Morter was doing
SOUTH DISCOUNT FOODS, INC. 415
which he described as approximately $90,000 , because it
was being put on C . O.D. by many suppliers , and it was
determined that a creditor ' s meeting should be held.'°
Milton Kantor related that Attorney Office suggested
that a pion should be prepared to submit to the creditors.
Thereup4n, Kantor agreed to suspend payment of themanagement fee, of $300 a week , and to limit advertising
cost to $500 a week , explaining this would be reduction in
some weeks of as much as $400 . Kantor then suggested
that Gershow waive his entire salary . Gershow responded
that if he could not draw a salary out of the business he
would close it.19 Kantor then suggested that Gershow
agreed to reduce his salary , to show good faith to the
creditors , and Gershow agreed to give the suggestion his
consideration.
It is undisputed that Attorney Office prepared a notice
of a creditor' s meeting , which was dispatched to all
creditors by Gradsky. The meeting was held at Imperial
House South, Miamisburg , Ohio, on Tuesday, November
21, 1967 , commencing at 11 a.m . Attorney Office and
Gershow were present on behalf of Respondent Steven.
Rosenthal was present on behalf of Respondent Dayton
Discount. Allan Gradsky , inferentially , was present on
behalf of both of these Respondents . Louis Goldman was
among those present as a creditor , and estimated there
were approximately 65 or 70 other creditors present.
Goldman credibly related that Gerald Office explained
that the store had no money to continue operations and
were seeking some type of accomodation with the
creditors , to enable them to keep the business going.
Goldman quoted Rosenthal30 as stating that the Kantor
group were willing to continue management at no fee.
Goldman "thought" Rosenthal also made an offer relative
to free advertising for a limited period of time . Goldman
asserted that Gershow then advised the group as to the
fact that he had spent his life in the business , that he
wanted to keep the business going because this was all he
"The assertions of Kathy Wellman , bookkeeper , and Harry Morter, who
approved payment of bills for a period of months ending in September,
1967, and CPA Gradsky, of the financial condition of the store stand
undisputed . Wellman asserted that, each day , they paid bills which
permitted a discount for prompt payment , on Wednesday they paid
produce bills , on Thursday meat bills, and on Friday grocery bills.
Wellman related that nothing was paid on a substantial deferred account
of A H Perfect Company. Gradsky related the amount due on the Perfect
deferred account was $86,948.28, of which approximately $75,000 was
covered by a security agreement , which covered all of the assets in the
store. The total amount due Perfect , which included a current account,
approximated $130,000. Wellman related that Perfect , which supplied hard
goods, reached a point where they would hold up shipment of current
delivery until they received a check to cover the last week 's delivery.
Wellman asserted on one occasion , which I find it reasonable to infer was
in the fall of 1967, Perfect refused to ship merchandise because she had not
mailed the check, as there was insufficient funds in the bank Wellman
described the condition of the bank account as being that she was I week
ahead of available funds, meaning that she would write checks for accounts
due and then hold them for approximately I week before she had sufficient
funds in the bank to permit her to mail out the payments As a result, a
number of suppliers , in October and November 1967, were insisting on
C O.D. deliveries . Wellman identified Pharma -Spot , Pepsi-Cola, and Mush
& Sons, as included in this group The last named is a produce company.
Pepsi-Cola which had sent a monthly statement, commencing in October
1967, started collecting for the prior week 's delivery and, in November,
went on a strictly C O.D. basis. Wellman described the procedure followed
in paying bills, in July, August , and September , 1967, while Morter was in
charge of these payments , as she would submit to Morter the bills she
thought were most important and advised how much money there was for
payment Morter described the system as they paid the ones that screamed
the loudest.
"The assertion of Gershow that, "I think I might have made that
statement ," I find unimpressive.
knew and he was requesting the creditors to go along with
him to keep the business going. According to Goldman,
an unidentified creditor inquired of Gershow if he was
willing to work for nothing. Gershow responded that he
had to make a living "and the creditors had to go along
with him and he was insisting that they go along with him
to keep the store going."" Goldman asserted, as a result
of these observations of Gershow those in attendance
were reduced from 65 or 70 to approximately 10 or 12,
which apparently encompassed a luncheon recess.
Goldman, asserting that one of the problems was
getting current inventory in order to keep it going, related
that he advised Rosenthal that he would be willing to
guarantee $25,000 of the creditors bills, to keep the store
going, if Rosenthal could get the Kantor group and others
to make similar committments. Rosenthal, according to
Goldman that if Gershow would put a discussion with
Milton Kantor, advised Goldman that if Gershow would
put in a $25,000 guarantee the Kantor group would do the
same . Goldman asserted that Gershow advised that he
could not do anything without discussing it with his
attorney. Thereafter, Gershow advised that his attorney
"forbid him to do it." Goldman asserted that he was
similarly advised by Gershow's attorney. Milton Kantor,
who was not at the meeting, corroborated the assertion of
Goldman relative to Rosenthal having contacted Kantor
and Kantor's response. Rosenthal also advised Kantor, of
the subsequent position of Gershow and Office" Gradsky
corroborated Goldman's description of these events. It is
undisputed that the creditor's meeting terminated without
resolution of the problem.
Allan Gradsky, accountant for Respondent Steven as
well as Respondent Dayton Discount, and other stores
operated by the Kantor group, described the condition of
the Steven operation, in June 1966, at the time Dayton
Discount undertook management of the Steven store, as
one of insolvency. Gradsky asserted there were two
definitions of insolvency, one, when total liabilities exceed
total assets, the other when you are unable to meet
current obligations.
It is undisputed that Gradsky prepared three financial
statements , the first covering the period of 1 year ending
January 1, 1967, which included 5 months of the
operation of the store by Great Value, the second for the
period from January 1, 1967, to August 13, 1967, and the
third for the period from January I to November 5, 1967.
Gradsky asserted these statements were prepared without
auditing prior transactions, that the auditors were not
present during a given inventory, and they did not verify
accounts payable, however, they were prepared from the
books and records of Respondent Steven. Gradsky related
that the total liabilities, on January 1, 1967, were
$511,926.60, of which $259,546.74 were current accounts
payable, as distinguished from deferred accounts, while
current assets were $160,565.13. Common stock
"While Rosenthal was present at the hearing herein, as co-counsel for
the Kantor group , he did not appear as a witness I draw no adverse
inference from this failure, since his testimony, it is reasonable to presume,
would , at most , be corroborative of the recitations of Goldman and
Gradsky, relative to the events of the creditors' meeting.
"Gradsky described Gershow as advising the creditors "This is only your
money, this is my livelihood."
"Gershow 's recitation of these events does not reflect any substantial
variance from the recitation of Goldman. Gershow identified Morgan
Pennington , of Pennington Bread , as the creditor who refused to go along
with the extension of further credit. Gershow asserted that A H Perfect
had indicated a willingness to cooperate if all other creditors were
agreeable
416 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
outstanding was at a stated capital of $10,000, with a
retained earning deficit of $248 ,780.40 . Gradsky explained
the last figure as reflecting the net loss which had been
sustained up until that time . Gradsky described the loss
during the 52 week period as being a total of $116,000. In
comparison, the financial statement of August 13, 1967,
reflects total liabilities of $566,516.27, of which
$333,678.52, are current liabilities, with current assets of
$152,121.53, and a retained earnings deficit of
$318,461 .29, or an increase of $54 ,600 in liabilities and a
decrease of $8400 in assets. However, among the [assets]
receivables , on August 13, is an item of $31,852.63, of
which $21,749.83 represented the amount owed by
Gershow. The statement of November 5, 1967, reflects
total liabilities of $583,932 .67, of which current liabilities
were $297,003.94, with current assets of $138,477.84, and
a retained earnings deficit of $351,176 .85. It is undisputed
that the last statement contained the figures given to the
creditors, by Gradsky, on November 21." Gradsky
characterized the financial condition of Respondent
Steven , as reflected by the November 5, 1967, report as
"unquestionably insolvent."
Gradsky related that he left the site of the creditors'
meeting about 7 or 7:30 p.m., with the representatives of
A. H. Perfect Company, whom he identified as an
attorney named Chapman and an individual named West.
Gradsky related that Perfect 's representatives asserted
they had a security agreement and desired to inspect the
inventory, and requested that Gradsky turn the store over
to them. Gradsky, responding that he had no authority to
comply with the request , called Milton Kantor who, in
turn, suggested that Gradsky call Gershow's attorney,
Office. Office, according to Gradsky, advised that they
should do nothing as Gershow was on his way to the
store. Gradsky, upon relaying this advice to Milton
Kantor, was advised by Kantor, that they should resign
"because they had no more authority in the store."
Kantor then dictated the form of the resignation, which
Gradsky then prepared, and which provided:
Due to the unresolved situation at the creditors' meeting
of today , we hereby terminate our management contract
between J. A. Steven, Inc. therein referred to as first
party and Jack Gershow therein referred to as third
party and Annabelle Gershow therein referred to as
fourth party. We hereby further request immediate
payment for any services rendered or any advertising
provided which has not heretofore been paid.
The document is signed by Dayton Discount Foods, Inc.,
by Allan Gradsky, assistant secretary. Among the
witnesses to the signature , are Arnold Meade and Jerry
Stamp . Milton Kantor corroborated Gradsky, to the
extent to which he was quoted.
It is undisputed that when Gershow arrived at the store,
between 10 and 11 p . m., Gradsky presented him with the
letter of resignation ." When Gershow inquired as to the
location of the cash on hand , Chudy, assistant manager,
obtained and counted the money , inferentially in a safe,
then the amount in each cash register , which was then
turned over to Gershow. At this point Gradsky, and
inferentially Respondent Dayton Discount's other
representatives , left the store.
"Gradsky summarized the net loss during the period from January 1 to
November 5, 1967, as a total of $102,396.45 , which included an increase of
$32,715 17 in the 12-week period between August 13 and November 5
"While Milton Kantor asserted he did not "partake at all in the
discussions that led up to the decision to close the store ," the record is to
the contrary Kantor acknowledged the store closed , " - because they
The following morning, November 22, between 6:30
and 7 a.m., Gershow placed a sign on the door reading
"Grocery store closed until further notice." Gershow
acknowledged that as the employees arrived, that
morning, the door was locked. Gershow related he advised
the employees as they came to the door, that they would
be notified about their pay.36 It is undisputed no notice of
this closing, or the contemplated closing, was given to
either union, and no effort was made by any of the
Respondents to negotiate with the Union relative to the
effect of the closing." Mitchell, Clerk's president, unable
to obtain entrance to the store, on November 22, talked to
Gershow, by telephone, and was advised to call Attorney
Office. Pfarrer, unable to reach either Gershow or Office
by telephone, asserted, since he was leaving the city, he
turned the matter over to the Meat Cutter's attorney.
Thus, no demand for bargaining appears to have been
made by either union to Respondent Dayton Discount or
the individual Respondents, at that time.
Gershow asserted he closed the store because he
recognized that he could not run it without the Kantor
management , asserting that he recognized that Perfect had
a lien on all the merchandise and could have pulled it out
the following day and that the store had been kept open
because the creditors worked with the Kantor group. It is
undisputed that a Petition in Bankruptcy was filed relative
to Respondent Steven."
Events Between Store Closing and Reopening
November 22 to December 6, 1967
Louis Goldman credibly related that the day following
the creditors meeting, on November 22, he was advised by
the manager of Goldman's store, at the South Dixie
location, that the grocery did not open. The same day,
Goldman, after a telephone conversation with Attorney
Office, advised Jack Gershow, by letter, of the
cancellation of the lease of the supermarket at 4601 South
Dixie Drive. It is undisputed that the lease was cancelled
by mutual agreement.
On the same day, November 22, Goldman called Larry
Stein, a realtor, advising him that the grocery was out of
business and they needed a new tenant , as soon as
were in deep debt, and I don't believe any further credit could be
established for that store " It is thus patent that Kantor knew, when he
withdrew, the store could not remain open.
"It is undisputed that the following week , Gershow advised each
employee, by letter , that Perfect had foreclosed on their security
agreement , forcing termination of operations.
"While I find it of little importance, except to the extent that it
corroborates other evidence, the recitation of Kathy Wellman, the
bookkeeper, of the events of November 22, included the following which
appears undisputed Wellman related that Gershow let her into the store
and advised her that they were going to the bank to get the money that she
had deposited the night before . Wellman asserted that she had written
checks to cover everything in the deposit and had mailed out the checks
Wellman had Chudy place a call to Arnold Meade, then related Gershow's
request to Meade Meade responded that he was no longer connected with
Respondent Steven , that Wellman was still so connected, and that
Gershow was still her boss , accordingly Meade could not advise her.
Wellman gave her A .D T card, apparently a means of gaining access to
the store , to Chudy, advising Chudy to advise Gershow that Wellman had
quit
"It is undisputed that A. H. Perfect filed a Petition for Foreclosure of
Security Interest , in the Common Pleas Court of Montgomery County,
Ohio, on November 25, 1967, to which a copy of the security agreement of
July 2, 1964, was attached . A waiver of appearance and consent to a
decree was filed, on behalf of Respondent Steven, on November 27, 1967.
A judgment entry and decree was entered by the Court, on December 4,
1967.
SOUTH DISCOUNT FOODS, INC 417
possible. Goldman explained that the store operated under
Goldman' s trade name and as far as the general public
was concerned they would not know if Goldman' s was in
financial , trouble Accordingly, it was important to
Goldman to get the store reopened, so that it would not
reflect on his various activities."
November 23 was Thanksgiving. Stein credibly related
several steps which he took, in his effort to obtain a
tenant . He caused a "For Lease" sign to be placed on the
store door, inferentially approximately Friday, November
24. He caused an ad to be placed in the Dayton Daily
News, a newspaper of general circulation, for a period of
a week or 10 days, commencing, either November 24, or
Sunday, November 26, which read, "15,000 sq. ft
Supermarket Location available immediately adjoining
large South Dayton Discount store," followed by the
name and telephone number of the Realtor. On Saturday,
November 25, he addressed inquiries to Kroger, A & P,
and Albers, identified as three large grocery chain
operators in the Dayton area. Albers' response was
negative, and A. & P gave,a qualified acknowledgement,
with no follow up
James Sloan, real estate manager for the . Dayton
Division of Kroger, Stein, and Goldman outlined
negotiations which followed, which terminated apparently
without a clear understanding that they were terminated.
Sloan credibly related that on Monday, November 27, he
made an initial inquiry of the terms of the lease,
ownership of the equipment and the inventory, and the
amount involved. Stein responded that the equipment was
owned by Hussman Company and could be purchased
from them, and the inventory was owned by Perfect, a
Fort Wayne supplier, who had a lien. On Thursday,
November 30, Sloan related that Kroger representatives
took an inventory of the equipment, had a commercial
photographer take photographs, and obtained economic
data concerning population and food sales in the area. On
Friday, December 1, Sloan, Boren , a Kroger associate
director of property, from Cincinnati, and Morehead, a
Kroger Dayton Division Construction Engineer, met with
Stein and Goldman. Basic agreement-was reached on the
terms of the lease, subject, however, to Kroger being able
to obtain the inventory on hand at a satisfactory price.
Sloan related that prior to the meeting, and again during
the meeting, he tried to reach agreement with Jordan,
president of Perfect, and sought to obtain the inventory at
approximately 50 percent of its value, without success, as
apparently Perfect was requesting 85 percent: Goldman
related that a suggestion that he should absorb the
difference between what Kroger was willing to pay for the
inventory and the cost of it, resulted in his belief that the
value of leasing the building to Kroger would be lost
Goldman explained this value in terms of obtaining loans,
from Banks, Building & Loan Associations, or Insurance
Companies, based on the long term leases to AAA-1
tenants affording money for additional construction. It is
.patent that the negotiations foundered solely on the
inability of Kroger to arrange a satisfactory purchase
price, for the remaining inventory."
"Goldman caused a new sign to be placed on the store door, which read
"Grocery closed for Remodeling - will open soon "
"I find of no consequence the fact that , inferentially, at the behest of
Mush & Sons, a supplier , Kantor had purchased and removed , to other
Kantor stores , the perishable inventory , including meats, after an
inventory, at which Gershow was present , which was taken on either
Saturday or Sunday , November 25 or 26 Inferentially this reduced the
value of the inventory from approximately .$65,000 to approximately
$50,000
It appears undisputed that, on Sunday, December 3,
Goldman called Milton H. Kantor, at the latter's home to
ascertain if Kantor was interested in undertaking to
operate the store at 4601 South Dixie.30 Kantor, after
indicating that he was not willing to extend his credit by
purchasing the fixtures, • inquired if Goldman would
arrange to purchase the fixtures and rent to them to the
lessee. Goldman indicated a willingness to make such an
arrangement. Kantor indicated that he would discuss
matter with his brothers. On Monday, December 4,
Kantor advised Goldman of a willingness to enter into a
lease, on terms similar to the rental of the Huber-Heights
store, which Kantor had recited from Goldman 3 months
previously, and, in addition, provision to be made for the
rental of the fixtures. Kantor arranged for the purchase of
the remaining inventory, from Mush & Sons, who had
purchased it from Perfect. Kantor's purchase was based
on 75 percent of the value. Kantor related that Rosenthal
was instructed to prepare and file the papers essential for
the establishment of the new corporate entity, Respondent
South Discount.71
'
It is undisputed that Goldman , on Saturday , December 2, by letter,
advised Sloan that Goldman found it i mpossible to work out the inventory
problem , without suffering a financial loss which Goldman was unwilling
to undertake Sloan acknowledged receipt of this letter . However, Sloan, it
appears, continued his efforts to work out the matter of the purchase of
the inventory and obtained authority to increase his offer from 50 percent
to 70 percent Sloan related that he so advised Goldman, on Tuesday,
December 5, and that Goldman responded that he might be interested and
would have a meeting with his brothers and further advise Sloan Sloan
asserted that on Wednesday , December 6, in a telephone conversation,
Goldman advised him that one of Goldman 's relatives had had a heart
attack and that he had not been able'to meet with his brothers , but would
be in touch with Sloan On December 7-Sloan visited the location of the
store, saw delivery trucks unloading meat and grocery products, and not
having heard from Goldman, advised his superiors that the deal was dead
Sloan acknowledged that the last time he had talked to anyone at Perfect
was on Friday, December 1, and thereafter he had been unable to reach
either Jordan or the attorney for the Perfect Company , Tom Chapman.
Goldman 's concern about his "public image" probably explains his
failure to advise Sloan of his negotiations with Kantor , which follow
"I credit Goldman's assertion that this was the first time he approached
Kantor relative to the leasing of this store
"In view of the undisputed evidence that Goldman sought , and almost
succeeded , in obtaining Kroger as a tenant for the 4601 South Dixie
location, I find incredible the inference which might, under different
circumstances , be drawn from the testimony of some of the witnesses for
General Counsel , from which it could be implied that the closing of the
Steven store was a calculated manuever , on the part of the Kantor group,
by reason of union labor costs, and union labor contract conditions, to
divest the employees of union representation , and to permit 'the Kantor
group to become a successor without the impediment of the union labor
agreement In so finding , I place particular reliance on the assertion of
,Goldman that he did not contact Kantor, relative to rental of the South
Dixie location , prior to December 3, 1967 There is not a scintilla of
evidence that Goldman has any financial interest in the Kantor enterprises,
or vice versa
Reference is made particularly to the recitation of Reinhardt ; discharged
store manager, of alleged conversations he had with Morter, commencing
in June 1967 , to the effect that there was talk of closing the store for a
period of time and "they felt that it would take at least 30 days to get rid
of the Union " Reinhardt , after asserting that these conversations, with
Morter, followed telephone conversations between Morter and Gradsky,
acknowledged that he had been excluded from the office, by Morter,
during the telephone conversations I credit Morter's denial of these
alleged conversations I also find Reinhardt 's antipathy , resulting from his
discharge , without explanation, toward the Kantor group, while denied,
was thinly veiled.
I make the same finding , for the same reasons, relative to Reinhardt's
alleged discussions with Morter, in June, July, August , and September,
relative to the fact that a double time provision for Sunday work was due
to go into effect, that Reinhardt , his assistant , the bookkeeper , and the
other employees would be transferred to other stores , at the same rate of
418 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
The Events of December 6, 1967 - Union' s Request
for Employment of Employees
It is undisputed that the Kantor group began
preparations for reopening the South Dixie store on
December 6, 1967, when merchandise was delivered, and,
inferentially, new employees were retained.32
President Mitchell, of the Clerks, was advised by
telephone, by Patti Bowell, on December 6, that they were
taking merchandise into the store and that people were
working in the store. Mitchell, accompanied by Braden,
vice president of the Clerks, and Pfarrer, national
secretary and treasurer of the Meat Cutters, went to the
store and observed a number of people cleaning, and
outside vendors stocking such items as Pepsi -Cola, 7-Up
and Coca-Cola. Mitchell credibly related that he
encountered Jerry Stamp who, in turn, called Arnold
Kantor. Mitchell inquired if the store was going to reopen
and Arnold Kantor advised that it was, but that the time
of opening was up to his brother Milton. Arnold Kantor
then introduced the Union representatives to Arnold
Meade. The union representatives then advised Arnold
Kantor and Arnold Meade of their identity as
representatives of the Unions and inquired why the
employees had not been "called back to work" to help
clean and get the store ready to open. Arnold Kantor
responded that he did not know, that they would have to
talk to his brother Milton. Meade left the meeting, and a
few moments later Pfarrer was called to the telephone.
Pfarrer credibly related that the telephone call was from
Gradsky, who advised Pfarrer that he did not invite
Pfarrer into the store and that unless he left he would be
arrested for trespassing. Pfarrer communicated this
pay, but not as members of the Union, all of which was denied by Morter
In so finding , I have also considered the recitation of Gradsky , from an
analysis of comparative labor costs between several of the Kantors ' stores,
that the labor cost as the 4601 South Dixie store was not out of line with
the labor cost , percentage-wise , of other Kantor stores I find it
unnecessary to set forth the specific figures which appear in the record.
Reinhardt acknowledged there was a meeting of store managers , in June
1967, the purpose of which was consideration of reduction of payroll costs
in all stores , and the consideration of cutbacks in personnel, during the
summer season.
I similarly do not credit Reinhardt 's recitation that, in September 1967,
Morter instructed Reinhardt to make up a list of people who could be
transferred to other stores "without jeopardizing the stores," inferentially
those who were not strongly prounion . It is undisputed that there were
union security agreements in effect How Reinhardt was supposed to
differentiate between nominal members and strong advocates stands
unexplained . Morter denied this conversation and I credit his denial.
Reinhardt , who earlier had testified that the first conversation about
closing the store to get rid of the Union was with Morter, in June, later
attributed such conversations to Milton Kantor and Meade , without giving
the specifics , except to state that it was "around September or October of
1967 - when all the talk started about closing the store " Reinhardt was
thus clearly self-contradictory on timing
Reinhardt , in turn , placed the financial problems of the store as being
due to excessive sales of what are called in the trade " loss leaders "
Reinhardt asserted that, in an unspecified week , they would sell
Pepsi-Cola, which cost 39 cents, at the price of 39 cents, and such items
would represent a total of $14,000 in total grocery sales of $43,000 leaving
a balance of only $29 ,000 with normal gross profits However, Reinhardt
asserted weekly sales increased from an average of $26 ,000 to $32,000, in
September , 1966, to an average of $67,000 or $68 ,000 in October , 1967. 1
find it unnecessary to attempt reconciliation of the last average with the
asserted sale of $43,000 Respondents made no effort to contradict these
assertions of Reinhardt
"The term "new employees" is intended to mean that none of the
employees who had been discharged on November 22, had been recalled, a
fact which is undisputed The number of employees at the new location is
obscure
message to Mitchell, in the presence of Meade. Mitchell
related that they advised Meade that they were union
representatives for that store, that they had a right to be
there to find out what was going on "because of our
members." Meade advised that if they did not leave he
would personally throw them out. Upon being invited to
carry out his threat, Meade asserted he was going to
make a telephone call and, if he was told to throw them
out, he would throw them out. Meade returned and
advised if they did not leave he would call the police.
Thereupon the union representatives left."
It is undisputed that none of the 35 employees,
formerly employed at 4601 South Dixie, have been
employed by Respondent South Discount, at that
location.34
On December 8, 1967, by letter to Milton H. Kantor,
Mitchell called attention to the fact that Kantor had
operated the store at 4601 South Dixie, and had
recognized the Clerks as the exclusive bargaining agent for
the employees, with stated exceptions. The letter noted
that the store was closed without notice to the Union and
the employees terminated, that the Union requested a
meeting , by letter to Gerald Office, which remained
unanswered. The letter then asserted that it appeared that
Kantor was preparing to reopen the store, "without
honoring your obligations to the employees and the
Union." The letter then asserts that the Union holds
Kantor responsible for the failure to negotiate concerning
the closing of the store, and its effect upon the employees,
that Kantor is obligated to continue to recognize the
Union, and the terms of the existing collective bargaining
agreement, and requests the recall of the employees.
On December 19, 1967, Mitchell advised Kantor, by
letter, that he had not received an answer to the letter of
December 8, and again requested recognition of the Union
and restoration of the collective-bargaining agreement.
The letter then notes that when the store was reopened, on
December 12, a whole new complement of employees were
engaged . The letter then asserted that this constituted a
"lock-out" and breach of contract and requested resort to
the dispute procedure provided for in the contract.
On December 19, 1967, Rosenthal, by letter, advised
Mitchell that Respondent South Discount is not a
successor to or in any way connected with the previous
"owners" of the supermarket. The letter then states that
Respondent South Discount has no obligation under the
terms of any collective bargaining agreement the Union
may have had with Respondent Stevens, and was not
required to recognize the Union as the representative of
its employees.
Pfarrer related that he returned to the store, on
December 7, with Asher Bogin , whom he identified as an
attorney for LMG Investments, the landlord. Bogin's
concern was the establishment of a picket line, set forth in
"Neither Arnold Kantor nor Arnold Meade appeared as witnesses, and
the recitation of these events stands undisputed , except to the extent that
Gradsky was quoted
While Gradsky acknowledged discussing the employment of the former
employees at the store location , "shortly after the other store opened,"
with Mitchell, the time and content of the conversation are obscure
Gradsky did not deny the assertions of Pfarrer, relative to the telephone
conversation of December 6.
I find it unnecessary to treat with a meeting between Pfarrer, Gradsky,
and others, under orders of Judge Weinman , of the Common Please Court,
which , was inconclusive , insofar as the questions presented herein are
concerned
"Employment at other locations , and the reasons advanced by
Respondents for failure to employ, are considered infra
SOUTH DISCOUNT FOODS, INC.
more detail infra, which might affect the adjacent
operations. Pfarrer asserted that he had advised Bogin
that they would not remove the pickets until they had
assurance, that the employees would be returned to work.
Bogin accompanied Pfarrer into the store to discuss the
problem with Arnold Kantor. Pfarrer related that Kantor
acknowledged that he was in charge of the store, but
advised that the problem was up to his brother Milton,
and the question would have to be directed to him.
It is undisputed that picketing commenced December 7,
and was continuing at the time of this hearing , as more
fully explicated infra.
Interference, Restraint, and Coercion
1. Employment applications
The complaint alleges that, on or about November 7,
1967, Respondents negotiated directly with employees by
requesting them to sign new applications for employment,
without notice to or discussions with the Unions.
Kathy Wellman, bookkeeper, acknowledged purchasing
employment applications from an office supply house, by
reason of a suggestion of Arnold Meade. Wellman
asserted that Meade advised her that she had "such
crummy payroll records" that she should have the
employees fill out new applications, that this was being
done at the request of the insurance company. Wellman
then explained that when she started work at the store, in
June 1966, a number of the employees were already
employed and their prior applications were in possession
of the predecessor, Great Value. Wellman distributed the
application forms at a department head meeting,
requesting each department head to have the employees
fill out the applications. Wellman acknowledged that there
were a number of objections to filling in the form, with
particular reference to its heading "Application for
Employment," and a statement appearing immediately
above the line for signature which reads:
I authorize investigation of all statements contained in
this application. I understand that misrepresentation or
ommission of facts called for is cause for dismissal.
Further, I understand and agree that my employment is
for no definite period and may, regardless of the date of
payment of my wages and salary, be terminated at any
time without any previous notice.
Wellman asserted, in answer to the objections, that she
advised that the employees could scratch out the
objectionable features, which most of them did.
Mary Rose Wagers was given such an application by
Tom Scarbrough, head of the meat department, a couple
of weeks before the store closed. Wagers related that Lelia
Baker, a meat wrapper, talked to Pfarrer, of the Meat
Cutters, who later advised them to cutoff the heading and
scratch out the objectionable language above the signature
line, before filling in the application. ' Pfarrer related that,
after receiving the call from Baker, he had a discussion
with store manager Reinhardt, who advised him that the
instructions to have form filled out originated with
Gradsky. Pfarrer acknowledged that he was later
informed that the objectionable language was stricken, by
the employees , prior to their signing the applications.
Pfarrer acknowledged that the employees were advised
that the sole purpose of the form was to obtain the
current address and telephone number of each employee.
"While Lelia Baker appeared as a witness she was not questioned
relative to this matter.
419
It thus appears uncontroverted that the sole purpose of
the distribution of the "Application for Employment"
forms was to enable Wellman to obtain up to date
addresses and telephone numbers of the employees.
Accordingly, I will recommend dismissal of the allegations
of paragraph 12(f) of the complaint.
2. Picketing arrests
It is alleged, in the complaint, as amended, that
commencing on or about December 12, 1967, and on
various dates thereafter, including December 29, 30 and
January 2, 1968, Respondents engaged in conduct
violative of Section 8(a)(1), by ordering representatives of
the Clerks and employees off Respondents' premises and
having them arrested while said representatives and
employees were engaged in picketing.
It is undisputed that picketing, on behalf of the
employees represented by both unions, commenced on
December 7, 1967, but at that time was confined to the
four or five entrances to the parking lot, from the
adjacent streets. There is a large parking lot, commonly
used by all the employees and customers of the adjacent
stores as well as the store in question. There is a walk
which runs in front of the main entrance to the "Bargain
Barn Foods," which runs continuously to the adjacent
Goldman's store on one side and a Do-nuts shop which is
adjacent on the other side. There appears to be one
entrance and one exit door to the Food shop, controlled
by treadle's, for automatic opening and closing. It is
undisputed that when the store opened, for customers, on
December 12, the picketing at the entrance to the parking
lot was maintained, with one picket at each entrance, and
in addition, other pickets, with picketing signs took up a
station approximately at the entrance and exit doors.
It is undisputed that three of Respondents' agents, Jack
Cunningham, store manager commencing December 12,
1967, and continuing until later January 1968, Harry
Morter, and Arnold Meade, swore out warrants alleging
trespass, as the result of the picketing, against specific
employees and Clerk's representatives, on various dates
commencing December 11, to and including January 2,
1968.
Warrants were obtained by Meade, all on December
11, resulting in the arrests of employees Fritts, Hines, and
Stone, and also Clerks' President Mitchell. Warrants were
obtained by Morter, all on December 12, resulting in the
arrests of employees Hollan, Justice, and Diana
McKnight. Warrants were obtained by Cunningham, on
December 30, resulting in the arrests of employees Bowell,
Fritts, Howard, and Justice, and also Clerks' President
Mitchell. Warrants were obtained by Cunningham, on
January 2, 1968, resulting in the arrests of employees
Baker, Cordray, Fritts, Hammond, Justice, Magill, Diana
McKnight, Sprague, Stone, Strong, and Wagers, and also
Clerks' Representatives Braden and Van Dam."
In each instance the place of the alleged trespass was
4601 South Dixie Highway, described as Goldman's
parking lot. It is undisputed that, in all cases, the
respective Union posted the essential bond, jury trials
were requested, and all cases were pending at the time of
"The record indicates that two warrants were issued on January 2, for
Magill There were thus 26 warrants in all, against 2 members of the Meat
Cutters, Baker and Wagers , 13 members of the Clerks, and 3 Clerks'
representatives . Three warrants ,, each , were obtained against Fritts and
Justice , and two warrants were obtained against Magill, Diana McKnight,
Stone , and Mitchell.
420 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
the hearing herein.
I turn next to consideration of the Respondents'
evidence relative to misconduct on the picket line, which
purportedly was the underlying cause for the securing of
the warrants, and the evidence by witnesses for the
General Counsel and Charging Parties, to the contrary.
Since Meade did not appear as a witness, there is no
explanation as to the reason he swore out warrants for the
arrest of Mitchell, Fritts, Stone and Hines, all on
December 11, before the store opened, and before there
was any activity involving customers. Morter described
the condition existing on December 12 as the pickets were
"walking in front of the entrance and exit , carrying signs,
waving signs , hollering at the customers , hollering in the
door, stepping on the electric door treadle, hollering in the
store." He identified Jane Stone, Carmen Hines, and
Brenda Fitts, who were present in the court room, as
having engaged in this conduct . Morter asserted that,
when he was accompanying Milton Kantor to breakfast,
Jane Stone called Kantor "a no good Jew and a Kike."
Kantor, corroborated the assertion of Morter, relating
Stone said "something about Kike."37 It is undisputed that
it was Meade, on December 11, not Morter, who obtained
warrants for Fritts, Stone , and Hines . It, thus , must be
concluded that the events described by Morter were
unrelated to the warrants obtained a day previously.
Morter asserted that he swore out warrants for Hollan
and others whom he could not identify. He asserted these
individuals were standing in front of the door , so that the
customers could not get in or get out , standing on the
treadle , causing the doors to open and screaming and
hollering . Morter asserted he asked them not to block the
entrance , but they refused to leave."
Gradsky asserted that as he approached the store on
December 12, Stone, who was standing in front of the
doorway , pushed a picket sign in his face and pushed him
off the sidewalk. Stone denied having engaged in this
conduct. Milton Kantor asserted that as he approached
the store, on December 12, he "knocked so somebody
would open the door" and Patti Bowell advised him "they
won't let you in there, you Christ killing Jew bastard."
Bowell was not called as a witness . The only warrant
sworn out for Bowell was sworn out by Cunningham on
December 30. Gradsky asserted that, on December 12 or
13, he saw Delilah Alsept, in the store , with a special
policeman following her . Gradsky then described the event
as "she went over and swung at him and he took hold of
her and brought her up to the front of the store and held
her for the Moraine police." There is no record of an
arrest of Alsept in this record. Alsept was not called as a
witness . Gradsky asserted that he saw Sandy Hipsher
come in the front door and yell and holler , saw her go
through the store on a couple of occasions , and believed
that it was Hipsher , who, while picketing stood on the
door treadle and hollered into the store , "It takes a dirty
s-o-b to shop in this store ." Hipsher did not appear as a
witness and no warrant was ever obtained for her arrest,
insofar as this record reflects arrests . Since none of these
events, if they did occur, are asserted to have resulted in
the securing of a warrant against the named individual, by
reason of the asserted misconduct, I find it unnecessary to
"While Stone denied seeing Kantor, on December 12, she acknowledged
that she engaged in picketing on that date Since the episode is unrelated
to the warrant issued , I find it unnecessary to resolve the credibility
conflict
"Justice and Diana McKnight were not ipentified by Morter as having
engaged in misconduct , but with Hollan, were the three for whom Morter
obtained warrants , on December 12. Hollan did not appear as a witness
evaluate credibility.
Cunningham, who commenced his employment, at 4601
South Dixie, on December 6, asserted that the picketing
started on December 7. I infer from Cunningham's
testimony that no picketing at the store entrance took
place on Monday, December 11.39 Cunningham asserted
that, on December 13, he observed approximately six
pickets standing on the door treadle, causing the door to
remain open, and it was cold weather. When a customer
attempted to leave the store, by the exit door, they would
stand on the treadle, and cause the customer's cart to run
into the door, which would not open because of the weight
on the outer treadle. Cunningham identified Sandy
Hipsher, Patti Bowell, and Tim Strong as employees
engaged in this conduct. In addition, Cunningham asserted
that Robert Reedy, Delilah Alsept, and Hipsher, went into
the store and hollered such epithets as "bastard, dirty
s-o-b, and dirty scab." Cunningham asserted that Hipsher,
about December 21 addressed an invective, to
Cunningham's wife, who was working in the store,
implying a lack of chastity. Cunningham asserted that
Strong, about December 23 or 24, referred to
Cunningham as "a dirty Jew lover and a dirty scab.' 40
Cunningham acknowledged swearing to the warrants
issued on December 30 and January 2 and asserted that
the named employees were blocking the entrance to the
front of the store, or alternatively using profane language,
and these were the only types of misconduct engaged in,
which motivated Cunningham to obtain the warrants.
Cunningham identified Union Business Agents Braden,
Van Dam, and Mitchell, as also blocking the entrance of
the store. Cunningham asserted that he was advised by the
Chief of Police of Moraine that there was no disorderly
conduct warrant ordinance in Moraine. It was for this
reason that he obtained trespass warrants .41
Contentions of Parties and Concluding Findings
I consider first the allegations of the complaint which
assert the termination of the employees, on November 21,
and the later failure to hire, or rehire, was discriminatorily
motivated.
It is undisputed that Respondent Steven filed a Petition
in Bankruptcy, and went out of business. The Supreme
Court, in the Darlington case," has held that when an
employer closes his entire busihess, even if the liquidation
is motivated by vindictiveness toward the Union, such
action is not an unfair labor practice. Accordingly, I will
recommend dismissal of the allegations which relate to
Respondent Steven.
"Cunningham asserted that the picketing was moved to the entrance to
the store on the day the store opened Cunningham also asserted " I wasn't
there the opening day. I was there the second day " While Cunningham's
observations relative to the opening day was thus obviously hearsay, his
knowledge of the picketing the day prior to the opening does not fall into
the category
"It is patent that no warrants were obtained , by Cunningham, on any
date prior to December 30, and none were obtained, at any time by
anyone, against Hipsher , Alsept, or Reedy While Cunningham asserted
there were acts of vandalism, which took place in the parking lot and in
the store , on various dates in December and January , he was unable to
identify any employee engaging in this misconduct
4'1 do not credit Cunningham's explanation of the reason for his failure
to effect arrests, for alleged misconduct , between December 12 and 29
Cunningham asserted he made numerous calls to the Moraine police, who
refused to make arrests and only "warned the people." Cunningham
asserted he did not sign complaints because the police would not accept
them On December 30, he went to the Kittering Court and signed
affidavits.
"Textile Workers Union of America v. Darlington Manufacturing Co,
380 U.S. 263, 274
SOUTH DISCOUNT FOODS , INC. 421
General Counsel urges that Respondent Dayton
Discount, and the individual Respondents, were joint
employers, with Respondent Steven, of the employees at
the South Dixie store, from June 1966 to November 21,
1967. The liability of the individual Respondents is
considered infra.
The Supreme Court, in the Greyhound case," held that
the question of whether Greyhound possessed sufficient
control over the work of the employees to qualify as a
joint employer - is essentially a factual issue.
Subsequently the Board found that Greyhound and Floors
were joint employers, on the premises of the common
control exercised over the employees."
Factually, General Counsel relies on the management
agreement, between Respondent Steven and Respondent
Dayton Discount, and particularly paragraph 1, thereof,
which, I have found, provides inter alia: That Respondent
Dayton Discount will manage and operate the store, hire
and fire all personnel, and establish the supermarket
policy, all to the exclusion of Respondent Steven. By way
of implementation of this agreement, it is undisputed that
the Kantor group provided not only the supervisors in
direct charge of daily operations, and the store employees,
but also the specialists, on the payroll of other Kantor
corporations, who acted as overseers, relative to specific
functions, in the day-to-day operations of the store, all of
whom were responsible solely to the Kantor group, as
distinguished from Gershow.
Respondents assert that Respondent Dayton Discount
resigned as managing agent, on the evening of November
21, and that the store did not close until November 22,
thus it could not be considered the "employer" of the
Steven employees, since it had severed its connection and
the responsibility had reverted solely to Respondent
Steven. I find no merit in this contention.
It appears undisputed that the normal store hours were
9 a.m. to 9 p.m Gradsky placed the time of resignation of
Respondent Dayton Discount as between 10 and II p.m.,
on November 21. The store did not open for business on
November 22. Thus, the last day it was open it was under
the management and control of Respondent Dayton
Discount and the Kantor group." Accordingly, I Find
Respondent Dayton Discount was a coemployer, with
Respondent Steven, when the Bargain Barn Store ceased
operations, on November 21."
The record, in my view, establishes an economic
motivation for the closing of the store which was
involuntary in nature."
I find no merit in the assertion of General Counsel, in
his brief, that the record establishes that Dayton Discount,
"Boire v Greyhound Corporation. 376 U S 473, 481
"The Greyhound Corporation, etc , 153 NLRB 1488, 1492, enfd 368
F 2d 778 (C A 5). Accord Freda Redmond and Sir James, Inc, 147
NLRB 1025, Hoskins Ready-Mix Concrete, Inc, 161 NLRB 1492, Harvey
Aluminum Incorporated, etc, 147 NLRB 1287
"1 find of no consequence the fact that Gershow , who advised the
employees of the reason underlying the closing , signed the final payroll
checks
"It is patent that the Kantor group knew that Gershow would be unable
to continue operating , in view of the outcome of the creditor ' s meeting and
the action of Perfect, at the time of resignation Milton Kantor
acknowledged Gradsky advised him Perfect was at the store " to foreclose
on their security agreement "
"I find no merit in the assertion of General Counsel that the Kantors
"purposely precipitated" the closing ,"m not extending credit to creditors "
It is not the function of the Board to substitute its judgment on business
decisions
including the Kantors, as a predecessor - joint employer
was motivated to close the supermarket and to terminate
all employees en masse in order to get rid of the Unions
(underlining in brief). If a conspiratorial plan existed, by
prior design, to permit the Kantor group to succeed
Steven, as owners, the advance commitment of Goldman
was an essential. I am quite unable to comprehend why
Goldman would retain Stein, and go through negotiations
with Kroger, merely as a cover. I have credited the
assertion of Goldman that he first contacted Kantor,
relative to this store, on December 2. The conspiracy
concept appears to have been stillborn Accordingly, I will
recommend dismissal of those allegations of paragraph 7,
of the complaint, which relate to motivation for the
termination of the employees
I have found, supra, that, on December 6, Mitchell, of
the Clerks, and Pfarrer, of the Meatcutters, having been
advised that the store was being restocked for reopening,
went to the store, sought out Arnold Kantor who was in
charge, and requested information as to why the members
of their respective units had not been called back to work.
This conversation terminated with the invitation from
Gradsky to either leave or be arrested for trespassing.
Other Kantor specialists identified as being present
included Arnold Meade and Jerry Stamp. Pfarrer,
accompanied by Gogin, returned to the store on December
7, and renewed his request, to Arnold Kantor, that the
Meat Cutter employees be returned to work.
Subsequently, on December 8, Mitchell, by letter to
Milton H. Kantor requested, inter alia , the recall of the
employees. It is undisputed that not one of the 35
employees was hired by Respondent South Discount .„
Respondent advanced no cogent reason for its failure to
employ a single nonmanagement employee, who ceased
working when the store closed. Respondent asserts none
of these employees made application. The establishment of
a picket line, on December 7, by reason of this failure to
hire, as well as the requests of the Union representatives,
are undisputed facts. The law does not require
performance of a vain act.'9 Respondent urges misconduct
on the picket line. These events followed the refusal to
hire and could not be a justification for the blanket
refusal. However, misconduct as it may effect the
appropriate remedy, as to individuals, is considered infra 50
I find significant the absence, and complete void, in the
extensive testimony of Milton Kantor, of any explanation
for Respondent's failure to employ a single applicant.
That the Steven-Dayton Discount employees, as
applicants- for employment by South Discount, were
employees within the meaning of the Act is well
"I find of no consequence the fact that Serbantez has since been
employed at the Gettysburg store , by Respondent Dayton Discount,
commencing April I, 1968 The allusion of Pfarrer to the "disposition of
three of the people we had left," falls in the same category
"i find it unnecessary to treat with the assertion that General Counsel
did not produce evidence of a need for employees when Mitchell's letter of
December 8 was received Such an assertion , with the known turnover in
the grocery business, and in the light . of the demands on December 6, can
only be considered frivolous The same conclusion must apply to
Respondents effort to distinguish between those who were or were not
members of the Clerks on November 21 Respondent South Discount, and
the Kantor group, knew and had the means of knowing the identity and
abilities of each of these employees
"it appears that Respondent has abandoned an extensive effort during
the hearing to show that alleged widespread pilferage was a defense to
failure to hire It is undisputed that those who purportedly engaged in such
conduct were no longer employed on the closing date Respondent made no
effort to prove such misconduct against any of the alleged discriminatees
herein
422 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
established . Phelps Dodge Corp. v. N.L.R.B., 313 U.S.
177, 183-187, 191-192.
In Piasecki" the Board found. Respondent was
determined at all costs to avoid hiring the Bellanca
employees who were associated with the Union, the
employment of whom in large numbers would have
resulted in Respondent 's being saddled with a union
majority and the obligation to bargain.
In the New England Tank case' the Board rejected an
asserted defense that the predecessor's experience of
"unexplained losses" justified a refusal to hire . The court,
in affirming , held the question was whether substantial
evidence supports the finding that antiunion animus was
the motivation, "for it is well settled that an employer
who discriminates against applicants for employment
because of their union membership or activities violates
Section 8(a)(3) and (1) of the Act. " '
Next considered is the evidence relating to motivation.
I have found no unfair labor practice committed by
Respondents in the management of the Steven store, prior
to November 21, 1967. The Supreme Court, in the Bryan
case,s' has held that where occurrences within the 6-month
limitations period in and of themselves may constitute, as
a substantive matter, unfair labor practices , earlier events
may be utilized to shed light on the true character of
matters occurring with the limitations period ; and for that
purpose Section 10(b) does not bar such evidentiary use of
anterior events.
Next set forth are the cases in which the Kantor group
have been found to have engaged in a variety of violations
of the Act.S6 In the Ontario cases, the Board found
Respondents engaged in coercive interrogation and
threats, created the impression of surveillance , made offers
of bribes and promotions to employees if they would
engage in surveillance or vote against the union,
discriminatorily discharged employees and discriminatorily
reduced hours of employment of employees. In the
Priced-Less cases , the Board found Respondents engaged
in coercive interrogation , unlawful promises of benefit,
widespread solicitation of withdrawal of union
authorization cards, and caused the arrest , for trespassing,
of a union business agent engaged in protected activity on
Respondent's parking lot. In the first Priced-Less case the
Board found Respondent "completely rejected the
collective-bargaining principle" and issued a bargaining
order.
The Board, with court approval, has, in numerous
cases, pierced the corporate veil, pursuing alleged bona
fide successors, alter egos, and individuals , in fashioning
an adequate and meaningful remedy, a duty imposed by
Section 10(c) of the Acts` The Supreme Court, in the
Deena Artware cases ' held, inter alla:
"Piaseckl Aircraft Corporation, 123 NLRB 348, 372, enfd. 280 F.2d 575
(C.A. 3), pet. for review denied 316 F.2d 239 (C.A 3), cert. denied 364
U.S. 933 and 375 U. S. 827.
"New England Tank Industries . Inc., 133 NLRB 175, 183, enfd. 302
F.2d 273 (C.A 1), cert, denied 371 U.S. 875.
"Id. at 275. Citations omitted Accord: TI L Sportswear Corporation.
131 NLRB 176, enfd . 302 F.2d 186 (C.A.D C.)
"Local Lodge No 1424 v. N L.R. B. (Bryan Manufacturing Co.). 362
U.S. 411, 416.
"The first two cases involved Ontario Foods, in Cincinnati , with Milton
Kantor as president and Arnold Meade as store manager . These cases are
reported at 144 NLRB 1057, and 149 NLRB 1528. The second two cases
involved Priced-Less Discount Foods, in Springfield, Ohio , and are
reported at 157 NLRB 1143, and 162 NLRB No. 75; in which Gerald
Kantor, coowner , personally , was found to have engaged in some of the
violations.
"E.g., Oriole Motor Coach Lines, Inc., 114 NLRB 808 ; NL.R.B. v.
Whether one corporation is liable for the obligations of
an affiliate turns on other considerations. The insulation
of a stockholder from the debts and obligations of his
corporation is the norm, not the exception. Yet -
"Dominion may be so complete, interference so
obtrusive, that by the general rules of agency the parent
will be a principal and the subsidiary an agent. Where
control is less than this, we are remitted to the tests of
honesty and justice." That is not a complete catalogue.
The several companies may be represented as one.
Apart from that is the question whether in fact the
economic enterprise is one, the corporate forms being
largely paper arrangements that do not reflect the
business realities . One company may in fact be operated
as a division of another; one may be only a shell,
inadequately financed; the affairs of the group may be
so intermingled that no distinct corporate lines are
maintained.
Accordingly, for the reasons set forth, I find the failure
to hire any of the 35 employees, named supra, upon the
request of the union representatives, was discriminatorily
motivated and violative of the provisions of Section
8(a)(3) and (1) of the Act. I further rind the failure to hire
is chargeable to Respondent South Discount and to
Milton H. Kantor, Gerald Kantor and Paul Kantor, the
last three as individuals. Since Arnold Kantor owns no
stock, and his sole involvement was that of a supervisor, I
will recommend dismissal of the complaint as to him.
Next considered are the allegations of conduct violative
of Section 8(a)(5). It is alleged that Respondent Dayton
Discount, by closing the store, on November 21,
eliminated the work of the employees without prior notice
to or discussion with the Unions. Numerous Board and
Court decisions have held that an employer is under a
duty to notify and bargain with the Union on the effects
of a contemplated closing, and unilateral action without
such notice has been held to be violative of Section 8(a)(5)
of the Act." It would appear, however, that since
Respondent Steven was insolvent, and filed a petition in
bankruptcy, such a notice, or bargaining session would be
an exercise in futility. Preferential treatment in
bankruptcy is limited, in this respect, to wages due and
owing, as distinguished from newly created obligations. It
cannot be urged that Respondent Dayton Discount was
under a duty to look elsewhere for funds to meet any
agreed upon solution . I will, for the reasons stated
recommend dismissal of paragraph 12(c) of the
complaint.59
Respondent South Discount, and the individual
Respondents, are alleged to have failed to recognize and
bargain with the Unions , commencing December 6, 1967.
General Counsel urges that Respondent South, and the
Kantors , " if" a bona fide successor had a statutory duty
to recognize and bargain with the Unions.'° Alternatively,
General Counsel urges "the transfer of the business" from
the joint employers, Respondent Dayton Discount and
Stevens, requires a finding that Respondent is not a bona
Tempest Shirt Manufacturing Co., 285 F .2d 1 (C A 5); John Wiley &
Sons. Inc. v . Livingston , 376 U.S. 543 , 549; Perma Vinyl Corporation,
etc, 164 NLRB No. 119; N. L R.B v U.S Air Conditioning Corp., 302
F.2d 280 (C.A. 5); N L.R B v Ozark Hardwood Company . 282 F 2d I
(C A. 8).
"N L R.B v. Deena Artware , Inc., 361 U.S. 398, 402-403
"E.g., Winn-Dixie Stores , Inc, 147 NLRB 788, enfd . in pertinent part
361 F 2d 512 (C.A 5); Town & Country Manufacturing Co., 136 NLRB
1022, enfd 316 F 2d 846 (C .A 5); Pepsi-Cola Bottling Company of
Beckley, Inc., 145 NLRB 785
"
"Cf. Ramada Inns , Inc.. 171 NLRB No. 115.
Citing : Chemrock Corporation , 151 NLRB 1074, 1077-81;
SOUTH DISCOUNT FOODS, INC.
fide successor . The fact is there was no transfer of trade
name or goodwill , or even an alleged purchase between
the predecessor , bankrupt , and the subsequent operator.
While some of the supervisory personnel were transferred
to other Kantor stores , and the specialists continued
normal activity, in other Kantor stores , these facts alone
are insufficient to support a finding of successorship. I
have rejected , supra , General Counsel 's conspiracy
concept . The authorities relied upon are inapposite. I
conclude and find that South Discount is not a successor
to Stevens within the meaning of the Act. Cf. Piasecki
Aircraft Corporation , supra.
Alternatively, General Counsel urges that "shorn of
paper arrangements , paper terminations , and paper
transfers from one corporate sheild to another, South
Discount , including its officers and stockholders, the
Kantors , stands out as an alter ego of Dayton Discount, a
predecessor joint employer ."" While I have found , supra,
that Respondent Dayton Discount was a coemployer, and
the Kantors are chargeable with knowledge thus obtained,
nothing was transferred from Respondent Dayton to
Respondent South . The cases cited are inapposite.
The record is barren as to the number of employees
hired by Respondent South Discount , on and after
December 6. It would appear reasonable to find that the
letters of Mitchell to Milton Kantor , on December 8 and
19, 1967, constituted a request for recognition and
bargaining . No such demand from Pfarrer appears.
However , since I have found that South Discount is not a
successor to Steven , and there is no proof the Unions
represented a majority of the employees , in each
respective appropriate unit, on or after December 6, 1967,
Respondent South Discount was not under an obligation
to recognize or bargain with either union . Piasecki
Aircraft Corporation , supra at 349 ; cf. Ramada Inns,
Inc., supra . Accordingly, I will recommend dismissal of
the allegations of paragraph 12(a), (b) and (d) of the
complaint.
There remains the question of whether the arrests, for
trespassing , constituted interference , restraint, and
coercion.
The Supreme Court, in the Logan Valley case," held
that peaceful picketing of a business enterprise within a
shopping center , where the property is open to the public
generally , and where the picketing is unaccompanied by
either threats or violence , is not subject to the restraint of
state law of trespass . However, the Court observed that
the regulation of the manner in which handbilling, or
picketing , is carried out does not mean that either can be
barred under all circumstances . Id. at 2212 . The Court
also observed that no challenge was made to the portion
of the injunction , issued below , related to "blocking access
by anyone to respondents' premises." Id. at fn. 4.
Respondents , in their brief, urge that the pickets were
engaged in a course of misconduct , interference with
customers and employees , which constituted unprotected
activities.
General Counsel asserts that "irrespective of the
validity of the arrests under state law, "Respondents'
Maintenance Incorporated , 148 NLRB 1299; Johnson Ready Mix Co., 142
NLRB 437.
"Citing . Reynolds Pallet & Box Co. v. N L.R.B., 324 F.2d 833, 835
(C A 6) (sole proprietorship converted to a corporate enterprise ); Garvin
Corporation, et at., 153 NLRB 664, 667 , 680, enfd . 374 F.2d 295
(C.A D.C ), cert. denied 87 S.Ct. 2074 ( runaway shop).
"Amalgamated Food Employees Union v . Logan Valley Plaza , 391 U.S.
308
423
conduct in causing the arrests of union representatives and
members interfered with organizational and concerted
activities 63
The Board has found that decisions of the Supreme
Court have made clear that the Act does not preclude
States from exercising their traditional police power and
injunctive control over unlawful conduct that may be
committed during the course of a strike. Texas
Founderies , Inc., 101 NLRB 1642, 1689.
The Board has found violative of Section 8(a)(1) the
securing of warrants, by officers of a Respondent, who
were without personal knowledge, and who made no effort
to ascertain the presence of the accused at the time of the
alleged offense. The Board concluded that Respondent
was primarily concerned with interfering with and
restraining its employees. The W. T. Raleigh Company,
90 NLRB 1924-1925. Similarly, the Board rejected, as
insufficient to constitute misconduct so flagrant as to
remove the protection of the Act, language attributed to
strikers, underlying Respondents securing arrests for
trespass. New French Benzol Cleaners and Laundry, Inc.,
139 NLRB 1176, 1181-82.
The question to be resolved thus is whether the credible
evidence would support a finding that the individuals
against whom the warrants were obtained were, at that
time, engaging in threats , violence, or blocking of access
to Respondent's store. The question of misconduct barring
usual remedies is properly considered infra, under
Remedy.
I have found that Arnold Meade obtained warrants, on
December 11, resulting in the arrests of Fritts, Hines and
Stone, employees, and Clerk's President Mitchell, for
trespass . Meade did not appear as a witness. It is
undisputed that picketing on the parking lot did not occur
before December 12. Meade, as store manager , personally
engaged in conduct in contravention of the Act, in the
earlier Ontario case, supra . While Morter related asserted
misconduct by Fritts, Hines and Stone, he asserted these
events took place, "The day of the opening," thus, even
assuming credibility, they do not support warrants
obtained the prior day. Morter did not relate any
occurrence on December 11. The same observation applies
to the assertions of Gradsky and Kantor. Thus, no
evidence of misconduct , on December 11, supports the
obtaining of these warrants.
Morter obtained warrants, on December 12, for
employees Hollan, Justice and Diana McKnight." At no
time did Morter identify Justice and Diana McKnight, or
specifically relate the nature of the misconduct in which
they engaged. Thus, no evidence of misconduct by Justice
and Diana McKnight , on December 12, appears to
support the obtaining of those warrants."
While Cunningham obtained five warrants, for four
employees, identified supra, and Clerk's President
Mitchell, on December 29, and 13 warrants, for 11
"Citing: Priced-Less Discount Foods, Inc., supra. (in which Gerald
Kantor caused the arrest , for trespass , of a union organizer who solicted
union authorization cards on Respondent 's parking lot); Bannon Mills,
Inc., 146 N L R B 611, 619-621, 630 (arrest for trespass)
"While Morter asserted he obtained warrants for employees he saw
"walking in front of the entrance and exist, carrying signs, waiving signs,
hollering at customers , hollering in the door , stepping on the door treadle,
hollering in the store, he then identified those involved as Stone, Hines,
Fritts , and Hollan . He incorrectly asserted that he obtained a warrant, that
day, for Fritts.
"Gradsky related alleged misconduct on December 12 or 13 , by Stone,
Alsept, Bowell , and Hipsher . No warrant was ever obtained against Alsept
or Hipsher.
424 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
employees and two Union representatives, on January 2,
1968, much of his recitation of events, as set forth supra,
involved employees assertedly engaging in misconduct on
earlier dates, including a number for whom no warrant
was sought at any time . I find it unnecessary to evaluate
the generalizations of misconduct related by Cunningham,
who obviously failed to adequately identify, in terms of
specifics , a number for whom he obtained warrants.
The total absence of justification by Respondents, for
at least six of the first seven warrants , excluding Hollan, I
find sufficient to conclude , as has the Board in Raleigh,
supra, that Respondents were primarily concerned with
interfering with and restraining their employees, and their
chosen representatives . Such conduct is patently violative
of Section 8(a)(1) of the Act"
IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES
UPON COMMERCE
The activities of the Respondents set forth in section
III, above , occurring in connection with the operations of
the Respondent South Discount Foods described in section
I, above , have a close , intimate , and substantial relation 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.
V. THE REMEDY
Having found that Respondent South Discount Foods,
Inc., and Respondent Milton H. Kantor, Gerald Kantor,
and Paul Kantor , as individuals have engaged in certain
unfair labor practices, I shall recommend that they cease
and desist therefrom and take certain affirmative action
designed to effectuate the policies of the Act.
It has been found that these Respondents
discriminatorily failed to hire, on and after December 6,
1967, the following applicants for employment: Elsie
Aggee, Delilah Alsept, Roger Arwood, Lelia Baker, John
W. Blair, Patti Bowell , Larry Callahan, Jerry Copeland,
James Cordray, George Curtis, Brenda Fritts, Dudley
Hammond , Barbara Hardin , William Hill, Carmella
Hines, Sandra Hipsher, Glenda Hollan, Vaughn D.
Howard, Norma Justice, Marie Lewis, Billy Joe
Lairemore, Luther H. Magill, Diana McKnight, Lee
McKnight, John McCreary, Harkless O'Bryant, Larry
Ogan, Robert Reedy, Thomas Scarbrough, Winford
Smith, Nancy Serbontez, Mary J. Stone, Tim Strong,
Lucretia C. Thompson, and Mary Wagers. Accordingly, I
recommend that Respondents offer, to each of the
individuals named , immediate and full reinstatement to
the former or substantially equivalent position of each, at
4601 South Dixie Drive, without prejudice to the rights
and privileges previously enjoyed , dismissing , if necessary,
other employees hired on or since December 6, 1967.
Respondents shall establish a preferential hiring list if the
number of employees presently employed is less than the
number I have found to have been discriminatorily denied
employment . It is further recommended that these
Respondents make whole each named discriminatee for
any loss of pay suffered , by reason of the discrimination
against each . Said loss of pay shall be based upon
earnings each would normally have earned from
December 6, 1967, or the date thereafter each would have
been hired , until the date each is offered equivalent
"As stated by the Board , in the Priced-Less case , supra , this finding is
without regard to the validity of the arrests under State law.
employment, less the net earnings of each during said
period. Said backpay shall be computed on a quarterly
basis in the manner established by the Board in the F. W.
Woolworth Company, 90 NLRB 289. Interest on backpay
shall be computed in the manner set forth in Isis
Plumbing and Heating Co., Inc., 138 NLRB 716.
In arriving at my recommendations for appropriate
remedy, I have considered the evidence relative to asserted
acts of misconduct by pickets, and prior Board and court
decisions in that area 67
The Board has repeatedly asserted that it does not
condone the use of abusive language , however, it has
recognized that in a strike, where vital economic issues are
at stake, striking employees resent those who cross the
picket line and will express their sentiments in language
not altogether suited to the pleasantries of the drawing
room. Efco Manufacturing, Inc., supra at 266.
The Supreme Court has stated that the right of free
speech cannot be denied by drawing from a trivial rough
incident or a moment of "animal exhuberance" the
conclusion that otherwise peaceful picketing has the taint
of force. Milk Wagon Drivers Union v. Meadowmoor
Dairies, supra at 293.68
The Board has distinguished between behavior of an
individual and the coercion and intimidation of
non-strikers by mass shouting of profanities. Terry Coach
Industries , Inc., supra (TXD).
I find no evidence of threats, participation in physical
violence, or epithets which are in the category of publicly
degrading or humiliating.B9 Accordingly, I find no evidence
which would warrant denial of the customary remedy.
It is also recommended that Respondent South
Discount Foods, Inc., and Respondents Milton H. Kantor,
Gerald Kantor, and Paul Kantor, as individuals, be
ordered to make available to the Board upon request,
payroll and other records to facilitate checking of the
amount of earnings due.
In view of the nature of unfair labor practices
committed, the commission of similar and other unfair
labor practices reasonably may be anticipated. I shall
therefore recommend that these Respondents be ordered
to cease and desist from in any manner infringing upon
rights guaranteed to their employees by Section 7 of the
Act.
Upon the foregoing findings of fact and upon the entire
record in the case, I make the following:
"E g , Efco Manufacturing, Inc, 108 NLRB 245, enfd. 227 F.2d 675
(C.A. 1), Nutone. Inc, 112 NLRB 1153, enfd as modified 243 F 2d 593
(C A.D C.); Milk Wagon Drivers Union v. Meadow-Moor Dairies. 312
U.S 287, Terry Coach Industries . Inc., 166 NLRB No. 76; Longview
Furniture Company, 100 NLRB 301, enfd as modified 206 F 2d 274 (C.A.
4), Supplemental Decision 110 NLRB 1734, Thor Power Tool Company,
148 NLRB 1379, enfd. 351 F 2d 584 (C.A 7); American Tool Works
Company, 116 NLRB 1681, Custom Chair Manufacturing Company, 170
NLRB No. 62 , Corriveau & Routhier Cement Block, Inc., 171 NLRB No.
113.
"Unlike the Master in the Milk Wagon case, I am unable to find that
evidence reflects "intimidation of the customers of plantiff's vendors by the
commission of acts of violence , or in connection with or following a series
of assaults or destruction of property."
"While the reference to Milton Kantor 's religion is reprehensible, it is
comparable to the term "wop b - t - d," classified as "impolite" in
Efco, supra. It is for this reason I have not made a credibility finding as
indicated in fn . 37. The conduct of Hipsher impugning the chastity of
Cunningham ' s wife borders on the impermissible. However, unlike
Marshall , in Nutone, supra, this appears as an isolated incident
SOUTH DISCOUNT FOODS, INC. 425
CONCLUSIONS OF LAW
1. Respondent South Discount Foods , Inc., and
Respondents Milton H. Kantor , Gerald Kantor and Paul
Kantor , as individuals , are engaged in commerce within
the meaning of Section 2(6) and (7) of the Act.
2. Retail Clerks Union , Local 1552, Retail Clerks
International Association , AFL-CIO, and Local 430,
Amalgamated Meat Cutters & Butcher Workmen of
North America , AFL-CIO, are each a labor organization
within the meaning of Section 2 (5) of the Act.
3. By engaging in the conduct set forth in the section
entitled "Interference , Restraint , and Coercion ," to the
extent therein found , these Respondents have engaged in
and are engaging in unfair labor practices within the
meaning of Section 8(a)(1).
4. By discriminating with respect to the hire and tenure
of employment , and terms and conditions of employment,
of the 35 employees named in the Section entitled "The
Remedy ," thereby discouraging the free exercise of rights
guaranteed by Section 7 of the Act and discouraging
membership in and activities on behalf of the
above-named labor organizations , these Respondents have
engaged in and are engaging in unfair labor practices
within the meaning of Section 8(a)(3) and ( 1) of the Act.
5. By failing to give notice to the Unions of the closing
of the store , on November 21, 1967 , Respondent Dayton
Discount Foods Inc., has engaged in unfair labor practices
within the meaning of Section 8(a)(5) and ( 1) of the Act.
6. Respondents South Discount Foods, Inc., Milton H.
Kantor , Gerald Kantor , and Paul Kantor have not
engaged in unfair labor practices within the meaning of
Section 8(a)(5) and ( 1) of the Act, by refusing to
recognize , or to meet for the purpose of bargaining with,
either union , on and after December 6, 1967.
7. 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
Upon the basis of the foregoing findings of fact and
conclusions of law, and upon the entire record of the case,
I recommend that the Respondent , South Discount Foods,
Inc., its officers , agents, successors , and assigns, and
Milton H. Kantor, Gerald Kantor, and Paul Kantor, as
individuals , shall:
1. Cease and desist from:
(a) Discouraging membership in Retail Clerks Union,
Local 1552, Retail Clerks International Association,
AFL-CIO, and Local 430, Amalgamated Meat Cutters &
Butcher Workmen of North America , AFL-CIO, or any
other labor organization of their employees, by refusing to
hire said employees , or in any other manner
discriminating against them in regard to their hire or
tenure of employment , or any term or condition of
employment.
(b) Interfering with, restraining , or coercing its
employees in the exercise of their rights guaranteed in
Section 7 of the Act by ordering representatives of Local
1552 and employees off Respondent 's premises, or having
them arrested while said representatives and employees
were engaged in picketing , in a lawful and peaceful
manner , in front of Respondents ' store.
(c) In any other manner interfering with , restraining, or
coercing employees in the exercise of the right to
self-organization , to form labor organizations , to join or
assist the above-named Unions , or any other labor
organization , to bargain collectively through
representatives of their own choosing , and to engage in
other concerted activities for the purpose of collective
bargaining or other mutual aid or protection, or to refrain
from any and all such activities, except to the extent that
such right may be affected by an agreement requiring
membership in a labor organization as a condition of
employment, as authorized in Section 8(a)(3) of the Act,
as modified by the Labor-Management Reporting and
Disclosure Act of 1959.
2. Take the following affirmative action which it is
found will effectuate the policies of the Act:
(a) Offer to the 35 employees named in the "The
Remedy" immediate and full reinstatement to the former
or substantially equivalent position of each, without
prejudice to the seniority or other rights or privileges
previously enjoyed by each, and make each whole for the
loss of pay each may have suffered by reason of
Respondent ' s discrimination against each in accordance
with the Recommendations set forth in "The Remedy"
herein.
(b) 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 amounts of backpay due
and the rights of employment under the terms of the
Recommended Order herein.
(c) Post at its store at 4601 South Dixie Drive, Moraine
City, Dayton, Ohio, copies of the attached notice marked
"Appendix."" Copies of said notice, to be furnished by
the Regional Director for Region 9, shall, after being
signed by Respondents or their representative, be posted
by the Respondents and maintained by them for 60
consecutive days thereafter, in conspicuous places,
including each of Respondent's bulletin boards.
Reasonable steps shall be taken by the Respondents to
insure that said notices are not altered, defaced, or
covered by any other material.
(d) Notify the Regional Director for Region 9, in
writing, within 20 days from the receipt of this Decision,
what steps the Respondents have taken to comply with the
foregoing Recommended Order. It is further
recommended that unless within 20 days from the date of
the receipt of this Trial Examiner 's Decision, the
Respondents shall notify the said Regional Director, in
writing, that they will comply with the foregoing
Recommended Order," the National Labor Relations
Board issue an Order requiring Respondents to take the
aforesaid action.
IT IS FURTHER RECOMMENDED that the allegations of the
complaint be dismissed as to Arnold Kantor, as an
individual , J. A. Steven , Inc., d/b/a Bargain Barn Foods,
and Dayton Discount Foods, Inc., It is also recommended
that the allegations of paragraphs 7, 12(a), (b), (c), (d),
and (f) be dismissed in their entirety.
"In the event that this Recommended Order is adopted by the Board,
the words "a Decision and Order" shall be substituted for the words "the
Recommended Order of a Trial Examiner" in the notice . In the further
event that the Board's Order is enforced by a decree of a United States
Court of Appeals , the words "a Decree of the United States Court of
Appeals Enforcing an Order" shall be substituted for the words "a
Decision and Order."
"In the event this Recommended Order is adopted by the Board, this
provision shall be modified to read "Notify said Regional Director, in
writing , within 10 days from the date of this Order , what steps the
Respondents have taken to comply therewith.
426 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
APPENDIX
NOTICE TO ALL EMPLOYEES
Pursuant to the Recommended Order of a Trial
Examiner of the National Labor Relations Board and in
order to effectuate the policies of the National Labor
Relations Act, as amended, we hereby notify our
employees that:
WE WILL NOT discourage membership in, or
activities on behalf of, Retail Clerks Union, Local
1552, Retail Clerks International Association,
AFL-CIO, or Local 430, Amalgamated Meat Cutters
& Butcher Workmen of North America, AFL-CIO, or
any other labor organization of our employees, by
refusing to hire said employees , or in any other manner
discriminating against them in regard to their hire or
tenure of employment, or any term or condition of
employment.
WE WILL NOT order union representatives or
employees off our premises, or have them arrested,
while they are engaged in picketing , in a lawful and
peaceful manner.
WE WILL NOT in any other manner interfere with,
restrain , or coerce , our employees in the exercise of the
rights to self-organization , to form labor organizations,
to join or assist the above-named Unions, or any other
labor organization , to bargain collectively through
representatives of their own choosing , and to engage in
other concerted activities for the purpose of collective
bargaining or other mutual aid or protection, or to
refrain from any or all such activities, except to the
extent that such right may be affected by an agreement
requiring membership in a labor organization as a
condition of employment , as authorized in Section
8(a)(3) of the Act, as modified by the
Labor-Management Reporting and Disclosure Act of
1959.
WE WILL offer to Elsie Aggee, Delilah Alsept, Roger
Arwood, Lelia Baker, John W. Blair, Patti Bowell,
Larry Callahan, Jerry Copeland, James Cordray,
George Curtis , Brenda Fritts , Dudley Hammond,
Barbara Hardin , William Hill, Carmella Hines , Sandra
Hipsher, Glenda Hollan, Vaughn D. Howard, Norma
Justice, Marie Lewis, Billy Joe Lairmore, Luther H.
Magill , Diana McKnight , Lee McKnight, John
McCreary, Harkless O'Bryant, Larry Ogan, Robert
Reedy, Thomas Scarbrough, Winford Smith, Nancy
Serbontez, Mary J. Stone, Tim Strong, Lucretia C.
Thompson, and Mary Wagers, immediate and full
reinstatement to the former or substantially equivalent
position of each, at 4601 South Dixie Drive , without
prejudice to the rights and privileges previously enjoyed,
dismissing , if necessary, other employees hired on or
since December 6, 1967, and we will make each of
them whole for any loss of salary or pay suffered as the
result of our discrimination against each.
All employees are free to become , to remain, or to
refrain from becoming or remaining members of a labor
organization of their own choosing.
SOUTH DISCOUNT FOODS,
INC.
(Employer)
Dated By
(Representative) (Title)
MILTON H. KANTOR
GERALD KANTOR
PAUL KANTOR
Note: - Notify the above-named employees if
presently serving in the Armed Forces of the United
States of their rights to full reinstatement upon
application in accordance with the Selective Service Act
and Universal Military Training and Service Act, as
amended, after discharge from the Armed Forces.
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.
If employees have any question concerning this notice
or compliance with its provisions, they may communicate
directly with the Board's Regional Office, 2407 Federal
Office Building, 550 Main Street, Cincinnati, Ohio 45202,
Telephone 684-3663.
TRIAL EXAMINER'S SUPPLEMENTAL
DECISION
STATEMENT OF THE CASE
LEO F. LIGHTNER , Trial Examiner : This proceeding'
was heard before me in Dayton , Ohio , on January 16 and
17, 1969, pursuant to an order of remand issued by the
Board on November 25, 1968 . Full opportunity was
afforded the parties to adduce evidence and to examine
and cross-examine witnesses. Oral argument was waived.
Briefs on behalf of the General Counsel and Respondent
have been carefully considered.
Upon the entire record in the case , ' including my
observation of the witnesses, I make the following:
FINDINGS OF FACT
Background
As noted in my initial Decision,' a consolidated
complaint, and an order consolidating cases, was issued on
February 20, 1968, and an amended consolidated
complaint was issued on April 10 , 1968.°
Incorporating by reference my earlier findings, and
solely for the purpose of brevity, the evidence, in support
of the allegations of the consolidated complaint,
establishes that the Respondents Kantor, except Arnold,
as individuals, are the owners and officers of a corporate
No appearance was entered for J A. Steven, Inc
'In his brief, fn 5, General Counsel requested correction of a
typographical error by the substitution of "ex-employees" for the word
"employees" following the words "eight or ten other ," in record p. 960, I
22 No opposition has been received . The request coincides with the Trial
Examiner 's precise memory The particular statement would not be lucid
without the modification The motion is granted
in addition, I have noted the following names are misspelled, at
numerous places in the record , and the record is corrected accordingly
Judge Weinman appears incorrectly as Wyman , Secretary-Treasurer
Kenneth J . Pfarrer, of Charging Party Meat Cutters, as Farr and Pfarr;
former Assistant Manager Leonard Chudy as Chattie, and Elsie or K
Aggee as Aggie.
'See fn. 2 thereof
'During the earlier hearing, paragraph 7 of the amended consolidated
complaint was amended by the insertion of the identity of 35 individuals
alleged to be discriminatees , see fn 6 of the initial Decision , and paragraph
6 was amended to reflect additional dates on which Respondent allegedly
engaged in the conduct complained of in that paragraph, as set forth in the
section entitled "Picketing arrests" of the initial Decision.
SOUTH DISCOUNT FOODS, INC. 427
entity, identified as Dayton Discount Foods, Inc. Jack
Gershow and Annabelle Gershow were the sole owners,
with the first named as president, of a corporate entity
identified as Respondent J. A. Steven, Inc. These two
groups, operating under their respective corporate entities,
entered into a management agreement, wherein the
Kantor group undertook operating management of a retail
food store, for the period which commenced June 12,
1966, and terminated November 21, 1967. The store in
question, identified under the tradename of Bargain Barn
Foods, was located at 4601 South Dixie Drive, Moraine
City, Dayton, Ohio. The store did not reopen for business
after the Kantor group abrogated, or resigned from, its
management agreement on the evening of November 21,
1967. It is undisputed that a Petition in Bankruptcy was
filed, and Respondent Steven went out of business.
I have found, from undisputed evidence, the existence
of collective-bargaining agreements between the Charging
Party Unions and Respondent Steven, which by their
terms were effective, at least, through May 26, 1.968, as to
the Clerks, and June 1, 1968, as to the Meat Cutters.
Both agreements contained valid union-security provisions
and provision for Union Welfare Fund payments. During
the period of the operation of the store by the Kantor
group,' under the management agreement, the store
bookkeeper, Wellman, forwarded to each respective Union
the amounts due for dues checkoff and Union Welfare
Fund payments. It is thus patent, from this and other
evidence set forth in the initial decision , that these
collective-bargaining agreements remained operative
during the period described. It appears undisputed that 35
employees, in the two units described in the initial
decision, were laid off as a result of the store not
reopening on November 22, 1967. Six of this number
were represented by the Meat Cutters and 29 by the
Clerks.'
I have found, from undisputed evidence, that the
Kantor group, on December 6, 1967, organized a new
corporation, identified as Respondent South Discount
Foods, Inc., d/b/a Goldman's Discount Foods, for the
purpose of operating a retail food store at 4601 South
Dixie Drive.' I have found from undisputed evidence that
preparations for reopening, including stocking operations
by employees, commenced on December 6, 1967, and that
the store in fact reopened on December 12, 1967, and has
remained open ever since.'
I have found, from undisputed evidence, that, on
December 6, President Mitchell and Vice President
Braden of the Clerks, and Pfarrer, National Secretary and
Treasurer of the Meat Cutters, went to the store and
inquired of Arnold Kantor, who was in charge of the
reopening, and Arnold Meade, general manager for the
Kantor group, why the employees, whom they
represented, had not been "called back to work" to help
clean and get the store ready to open. Arnold Kantor,
professing ignorance, referred them to his brother Milton
Kantor. While still in the store, Pfarrer was advised, by
telephone, by Gradsky, that Gradsky did not invite
Pfarrer into the store and that unless he left he would be
arrested for trespassing. Pfarrer communicated this
message to Mitchell, in the presence of Meade. Mitchell
'See fn 7 of the initial Decision.
`See fn. 6 of the initial Decision , which includes identities.
'See the section entitled N . The Business of the Various Respondents"
of initial Decision.
'See the section entitled "The Events of December 6, 1967 - Union's
Request for Employment of Employees" of initial Decision.
advised Meade that they were union representatives for
that store and had a right to be there to find out what was
going on "because of our members."' Picketing
commenced December 7, 1967. Subsequent
correspondence between Respondents and the Clerks, set
forth in the section entitled "The Events of December 6,
1967 - Union's Request for Employment of Employees"
of the initial Decision, is referred to infra. It is undisputed
that not one of the 35 employees who were separated on
November 22, were employed by Respondents thereafter
at the store in question.
The amended consolidated complaint, as amended,
alleged specific violations of Section 8(a)(1), in paragraph
6, and specific violations of Section 8(a)(5), (3), and (1),
as paragraphs 12 and 13. As I understand the Remand
Order this Supplemental Decision is addressed primarily
to the allegations of paragraph 7, 12(e) and 13, together
with those paragraphs which provide such underlying facts
as I have previously found.
The nub of the issue considered herein is contained in
the allegations of paragraph 12(e): Since on or about
December 12, 1967, and at all times thereafter in refusing
to employ said employees who were terminated on
November 21, 1967."
Accordingly, I reaffirm the Findings of Fact,
Conclusions of Law, and Recommended Order contained
in the initial decision, except as hereinafter specifically
modified, and specifically vacate the recommendation of
dismissal of the allegations of paragraph 7 of the
complaint, to the extent such recommendation is
inconsistent with my findings herein.
Paragraph 3 of the amended consolidated complaint
alleges , inter alia , that Respondent South Discount and
the individual Respondent Kantors are alter egos and/or
successors of Respondent Steven and Respondent Dayton
Discount, and the officers of the latter. Having found to
the contrary in my initial decision, for reasons fully
explicated therein, and finding this area to be beyond the
scope of the remand, I find it unnecessary to reexamine
those findings.
The Remand Order
The Board in its Remand Order noted, inter alia, that I
had recommended that the Respondent Kantors and
South Discount offer to the 35 employees identified in
"The Remedy" of the decision "immediate and full
reinstatement to the former or substantially equivalent
position of each, at 4601 South Dixie Drive - ." On the
basis of a representation, by Counsel for Respondents
(except Steven), that Respondents were denied the
opportunity to litigate their defense - and that the
above-described finding by the Trial Examiner involved
what in effect constituted a denial of due process, the
Board ordered , inter alia,
- that the record in the above-entitled proceeding be
reopened and that a hearing be held before Trial
Examiner Leo F. Lightner to give the Respondents full
opportunity to adduce pertinent and material evidence
'See the section entitled "The Events of December 6, 1967 - Union's
Request for Employment of Employees" of initial Decision.
"The assertion of Counse l for Respondent that "Our exceptions went to
the fact that the question of the refusal to hire, the alleged refusal to hire
employees , on December 6th or thereafter , or the 12th, was not an issue in
this case , as framed by the General Counsel , he never put in any evidence
on it, he never sought it as an issue in this case, and there are plenty of
things in the record that show that he did not consider this an issue" is
patently erroneous
428 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
as a defense to the above allegations of the complaint,
and for the admission of such further evidence in this
connection as may be warranted.
Supplementary Evidence
The evidence at the supplementary hearing falls into
two broad categories : (a) alleged evidence of pilferage, by
employees of Steven , warranting a belief, by Respondents,
that none of these employees should be considered for
employment when the store was restaffed for resumption
of business ; and (b) offers of compromise which should be
considered as terminating or tolling the backpay period.
In addition , Respondents assert there were no applications
for employment . The evidence relative to these contentions
is set forth seriatim.
Pilferage
Respondents relied almost exclusively on the testimony
of CPA Allan Gradsky to establish the existence of
pilferage , in the store at 4601 South Dixie, in the year of
1967, with particular emphasis on the period from August
13 to November 5. While Respondent Milton H. Kantor
sought to corroborate some of the assertions of Gradsky,
his testimony in the main related to security measures
adopted during the operation of the Steven store."
In the earlier hearing Kantor" asserted that he obtained
"perishable reports" (identified as covering both meats
and produce) every month and "overall reports"
(including groceries) every 3 months , from Gradsky,
covering the operation of the Steven store . Gradsky,
during the earlier hearing, identified three financial
statements , which he asserted were prepared from the
books and records of Respondent Steven: (a) covering a
1-year period ending January 1, 1967, which included a
partial period, January 1 to June 12, 1966, when the store
was operated by Great Value Corporation; (b) a 32-week
period from January 1 to August 13, 1967; and (c) a
44-week period from January 1 to November 5, 1967,
with a separate computation for the 12-week period from
August 14 to November 5." Gradsky explained these
statements were prepared "without audit ." Gradsky
explained his meaning of the term "without audit" as
being that he did not audit prior transactions , that he was
not present to verify reported inventory and that he did
not verify accounts payable.
"At the supplementary proceeding neither General Counsel nor the
Charging Parties called any witnesses
"Milton Kantor was the only one of the four Kantor brothers to testify
at both the earlier and remand hearings. Reference , where the last name
only is used, thus relates to the statements of President Milton H. Kantor.
"Gradsky was self-contradictory in first asserting no other quarterly
reports were typed , also that there was one "interim" report , he did not
know when, between January I and August 13, 1967 . This interim report
was not offered.
Gradsky 's explanation of his failure to type quarterly reports was: The
other ones were not typed because we never got beyond , actually beyond
trial balance stage , when we took the "first inventory" and I don't recall
when it was . I do remember that the grocery percentage was "exceedingly
low" and we didn 't really believe it. We believed that there might have
been an error in the inventory or in the accounts payable
As will appear infra, the grocery percentage does not appear
"exceedingly low," from the testimony of Kantor , until the last report. It
is implausible that no inventory was taken prior to the August 14 to
November 5, 1967, period . If, as Kantor asserted , inventories were made
quarterly , the "first inventory" was taken in 1966 , and at that time the
grocery percentage was not "exceedingly low "
In essence , Respondent seeks to establish that it had a
reasonable basis for belief of thievery in excessive
amounts, by employees of the Steven-Dayton Discount
"Bargain Barn" store , by reason of the low gross grocery
percentage and statements obtained by Respondent,
largely from former employees , assertedly incriminating a
large number of the alleged discriminatees herein, who
assertedly are identified by classification rather than
individual identity . The recitations of Respondent's
witnesses , inaccuracies , inconsistencies , omissions, and
conflicts follow.
The grocery percentage for the year ending January 1,
1967, was 9.82 percent." While not highlighted in the
testimony, the meat percentage for the same period was
10.15 percent, and the produce percentage was 22.70
percent. In the 32-week period ending August 13, 1967,
the grocery percentage was 7.78 percent, meat 17.00
percent , and produce 28.98 percent . In the 12-week
period, August 14 to November 5, the report indicates
grocery 5.40 percent, meat 18.29 percent, and produce
27.04 percent. The same report contains a summary for
the 44-week period, January 1 to November 5, 1967,
which reflects grocery 7.13 percent, meat 17.36 percent
and produce 28.52 percent.
Kantor , at the initial hearing, acknowledged receiving
the August 13 report on approximately September 1 and
described the grocery percentage as "terrible." Kantor
asserted the average, inferentially for the various Kantor
operations , as being on the order of 9.75 percent to 10
percent , and good as in "the middle twelve ' s." Kantor
described the interim grocery reports, during 1967, as
having reflected "high eight 's and the nine's."" Kantor
described the situation as "acute" when the grocery
percentage got down to the seven ' s. Kantor was uncertain
if it was in late 1966 or early 1967 that "we had people in
the store on surveillance ; we changed A.D.T.;'b we
changed the procedures on checking ." Kantor asserted
they took inventory every 3 months and the first "real bad
inventory" was approximately June 1967. When asked
what he did to correct the situation when the grocery
profit was in the high eight 's, Kantor responded that after
McKay left they changed managers ." This event was in
September 1966j not in 1967.
Kantor asserted , as a result of the August 13 report,
inferentially in early September 1967, "We tightened
security, we went into getting day deliveries," we felt we
had better security on the store in the day; we felt that we
had an inventory leakage; we did everything we could to
stop the flow. We put new security measures in the store;
we tightened up the old security measures."
At the remand hearing , Kantor related that as a result
of the low grocery percentage reflected in the August 13
report , which he received on approximately September 1,
"The term "grocery percentage" as used herein reflects gross income
from the sale of groceries in relation to total grocery sales , in a given
period . It is thus distinguishable from gross or net profits . Salaries and
other expense items are not considered in computing either the gross
income from grocery sales or the percentage set forth.
"At variance , Gradsky asserted "trial balances," in 1967 , preceding the
August 13 report , reflected the grocery percentage as "about the same" as
that report. I find resolution of this conflict unnecessary.
"Described elsewhere in the record as a system permitting specified
employees access to the store during hours when the store was closed.
"I have found, earlier, undisputed, that McKay was tran$erred to
another Kantor store , in Springfield , Ohio, in September 1966, and was
succeeded by Reinhardt , who continued as manager until early November
1967. See fn . 15 of initial decision.
"Discontinuance of the night crew, however , did not occur until late
October , according to Gradsky.
SOUTH DISCOUNT FOODS, INC. 429
he gave instructions to have the A.D.T. system changed so
that reports of every individual entering and leaving the
store , during periods when the store was not normally
open, would be sent directly to his office . He asserted that
an inventory of cigarettes was made nightly and there
were four "volatile" items that they spot-checked each
morning and evening . The "volatile" items were described,
by Kantor , as cigarettes , coffeee, meat items, and canned
ham items that can be turned into cash very quickly.
Gradsky, at the initial hearing , asserted the normal
grocery percentage for Kantor stores was between 10-1/2
and 12 percent." While Gradsky corroborated the
assertions of Kantor as to the security measures taken in
early September, relative to the A.D.T. system, etc.,
during the remand hearing , he also recited improbabilities.
In the initial hearing Gradsky acknowledged that it was
not until October that he first learned of employee
pilferage . In contrast , at the remand hearing , he asserted
that he and Kantor, in September , discussed having the
store closed at night and "we discussed mainly about the
night crew , and what provisions might be taken to prevent
them from stealing ." Inconsistently , thereafter Gradsky
acknowledged that the discontinuance of the night crew
occurred , at the earliest , in late October after an
investigation by Gradsky, more fully set forth infra. Also
inconsistently , Gradsky acknowledged he did not learn of
the alleged pilferage until October.
I turn next to the alleged evidence of thefts , in the 4601
South Dixie store , on which Respondent apparently now
relies, as justification for, assertedly supplying the
"motive" for , its failure to employ any of the 35
employees , formerly employed at that store, all of whom
were laid off when the store failed to open on November
22.
In considering this evidence , at this time, I am not
unmindful of the representations of Respondent 's counsel,
as set forth in part in footnote 31 of the initial decision,
that the sole purpose of injecting the pilferage issue into
the record was to explain the high percentage of grocery
cost in relation to sales, and to meet the inference that the
Kantor group forced Steven out of business . Respondent's
counsel disclaimed any effort to imply that any of the
employees who were discharged , on November 21, were
not hired , or recalled , by reason of any belief of
Respondent that they had engaged in pilferage , or were
"In support of this assertion, Respondent introduced statements covering
six other Kantor stores for varying periods, 12 weeks to 52 weeks, all
ending in 1967 , all of which reflect grocery averages between 9.32 percent
and 12 . 18 percent . All but one of these reports contains the notation
"Prepared without audit."
Queried as to why he did not bring in the reports for the other eight
Kantor stores, Gradsky acknowledged that the reports on these other
stores would "vary up and down" but was uncertain if there were some
which reflected a lower gross grocery percentage than 9.
Since Respondent asserted the principal purpose of the introduction of
these exhibits was to show that labor costs at the " Bargain Barn" store
were not out of line proportionately with other Kantor stores , which were
nonunion , to meet the assertion that Kantor was engaged in a deliberate
effort to put Gershow out of business , so that .Kantor could open a
non-union store at the same location , I find it unnecessary to treat further
with these comparative reports or to evaluate them . I have dismissed, in
my earlier decision , those allegations which relate to a contention that the
closing of the Steven store was other than economic.
I am also not unmindful , in determining that I need not further consider
comparative reports , of the evidence in this record , set forth infra, of
excessive sales of "loss leader" items, and its possible impact on the
showing of low gross grocery sales.
"This fact is corroborated by the assertion of Gershow that it was 3 or 4
weeks before the store closed , on November 21, that he first heard
"anything about thefts."
undesirable as employees for that reason.
Gradsky related that an individual identified as Marvin
Hughes , in October , was caught stealing in another
Kantor store , where he was employed at that time.
Gradsky interviewed him, and recorded the interview on
tapes , with reference to employees stealing in other stores
as well as the Bargain Barn store . Gradsky asserted that
Hughes related that there was widespread theft at the
Bargain Barn store , that many people were involved and
"I believe he submitted a list of some 55 employees that
were involved from time to time ."" According to
Gradsky, Hughes related that the night crew were eating a
great deal of products while on duty, that theft of toffee,
sugar, and many items , were going out the back door,
that many of the cashiers, and other employees, were
involved in groceries going out through the cash registers
at less than their marked value . Gradsky asserted that
Hughes admitted that he had been involved in some theft,
with other people , that they had stolen merchandise and
hauled it to other grocery stores and sold it, and that
Hughes talked in terms of the theft of large quantities of
cigarettes from the discount portion of the store. It is
undisputed that Hughes was not prosecuted.22
Gradsky acknowledged that , during his interview of
Hughes , Gradsky learned that Hughes had been
incarcerated , in Ohio, as a felon, and, while so
incarcerated , Hughes had been transferred to Lima, a
mental hospital for criminally insane . Gradsky described
Hughes as being approximately 27 years of age. The time
and length of Hughes ' incarceration , and the time of his
release, is obscure.
Gradsky asserted that he advised Kantor of the
representations of Hughes , that Kantor suggested that
they pursue the matter with Hughes and other employees.
Gradsky asserted that he spoke to probably 8 or 10
ex-employees and at least 2 employees , during a 3-week
period in October . Gradsky identified the former
employees, whom he had interviewed on tapes , as James
Mulkey , whom Gradsky identified as a supervisor of sorts,
and Gary Watts, whom Gradsky identified as working in
the meat department . Gradsky asserted that as a result of
his investigation both of these employees were discharged.
Neither appears on Respondent 's list of the employees at
the Bargain Barn store in the year of 1967.27
Gradsky identified as among those so interviewed Larry
Gapin, who had quit and was not working at the store at
the time he was interviewed. Capin does not appear on the
list of employees , employed by Respondent at the Bargain
Barn store in 1967. Another former employee whom
Gradsky asserts he interviewed is Joe Mathier, who's
name also does not appear on the list of 1967 employees
at the Bargain Barn store . Gradsky acknowledged that
one former employee, whose name does appear on the list
of employees , Russell Landis, quit before the store closed
and was not discharged . Gradsky did not specify the
nature of the assertions of these various interviewees,
except Hughes . However, without specificity , Gradsky
asserted Hughes ' assertions were corroborated.
Gradsky also interviewed Kenneth Gudgeon, who
appeared as a rebuttal witness for General Counsel in the
"Respondent submitted a list of 54 individuals who were employed, in
various capacities , at the Bargain Barn store , for varying periods, during
the year of 1967. 1 reverse my ruling rejecting this exhibit.
"Hughes did not appear as a witness herein . No explanation was made
of the failure to call any employee witness relative to these alleged thefts.
"While Store Manager Reinhardt related that he discharged two
employees, after listening to some of these tapes , on the instructions of
Meade, he did not identify them by name.
430 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
initial hearing. Gudgeon, who apparently resigned in
October 1967, was in charge of the night crew during the
period from September 1966, until approximately January
4, 1967. Gudgeon acknowledged having resigned after he
was confronted, apparently by Gradsky, of complicity
with Hughes in a particular transaction."
Only Elsie Aggee and Diana McKnight, both cashiers,
of the 35 employees still employed on November 21, were
interviewed, in connection with the investigation of
Gradsky. It is undisputed that Aggee is presently
employed at another store of the Kantor group. There is
not a scintilla of evidence herein that Aggee was in any
way connected with the alleged misconduct. Gradsky, at
the initial hearing, identified McKnight as one employee
who admitted that on two occasions she had checked out
groceries at lower than the indicated price, advising that
she had been instructed to do so by her supervisor,
unidentified. Asked, during the remand hearing, why
McKnight had been permitted to remain in employment
until the closing of the store, Gradsky asserted that they
had not completed their investigation, that they were
sidetracked because of the creditors' meeting , that she was
kept on "so that we could have access to be able to talk
to her at greater length and have her implicate more
people."" Gradsky then acknowledged that McKnight had
not implicated anyone by name, only by job description.
The only other individuals interviewed, in October, by
Gradsky, were Store Manager Reinhardt and Assistant
Store Manager Chudy. Chudy was still employed, at a
different Kantor store, apparently having had no
substantial break in employment, and there appears no
basis for belief that he was in any way involved in any
misconduct which may have existed. While Reinhardt was
summarily dismissed approximately 2 weeks before the
store closed, there is not a scintilla of evidence herein that
Respondent believed that Reinhardt was involved in this
alleged misconduct.
Next set forth are the assertions of Gradsky and
Kantor, as compared to those of Manager Reinhardt, as
to what the tapes, prepared in Gradsky's office, actually
contained.=°
Gradsky was asked, relative to the 35 people who were
continued in employment until the store closed, if they
were implicated on the tapes only by job description, as
distinguished by name. Gradsky responded that Diana
McKnight had implicated people by job description, but
that many of the people he had interrogated had
implicated others on the employment list of 55 (actually
54) including many of the 35 retained in employment.
Gradsky then asserted they were implicated by Marvin
Hughes, and corroborated by "many other witnesses."
Gradsky's explanation was that they were trying to talk to
as many as possible and it was a time consuming job.
Gradsky then asserted that approximately 25, of the
employees who retained employment through November
21 were so implicated. Later, Gradsky acknowledged that
none of the six meat department employees were
implicated.
"At the initial hearing I sustained an objection to a series of questions
and answers , during cross-examination That ruling is vacated, in the light
of the Board 's remand.
"It appears , from Gradsky's recitation , that no one other than Hughes,
was interrogated relative to thefts after October 1967
"There are various representations , in the record, by Respondent's
counsel and Gradsky that listening to the tapes would require between 18
and 25 hours It is undisputed that the tapes were never reduced to typed
form.
According to Gradsky, Milton Kantor listened,
inferentially to some of the tapes, one day. Kantor first
asserted, "The 54 individuals [Respondent's employment
list for the year of 1967] admitted to stealing to the tune
of some $80,000." Queried as to how he obtained
admissions from 54 people when only a relative few had
been interrogated, including only 2 who remained
employed until the store was closed, Kantor then asserted
"Fifty-five people were involved in the thefts."
The assertions of Reinhardt, who also listened to the
tapes, stands in sharp contrast, as follows:
Q. Didn't you tell Mr. Gradsky that you thought
that the theft was not very widespread and it was only a
very minor thing?
A. Possibly I did. I don't recall, but possibly I did.
The only things that I heard - now we're talking
about tapes. I didn't hear anything major ever admitted
on those tapes. Everybody was questioned about
everybody else and it was dust everybody was down
everybody's throat and everybody was trying to put the
blame on somebody else, and those people are no
longer with the Company and there ain't none of them
sitting here as far as that goes.27
I turn next to comparative assertions of Gradsky and
Manager Reinhardt on the reason for the low grocery
profit indicated in the period from September 14 through
November 5, 1967.
Gradsky asserted that the loss in the 12-week period
described, in terms of 5.40 percent gross grocery profit as
compared to 10.50 percent approximated $29,000.
Gradsky asserted that the largest contributing factor was
the theft that was going on in the store. Gradsky asserted
he arrived at this conclusion from his discussions with
"employees" and admissions made by them.
Reinhardt, at variance with Gradsky, asserted that a
large part of the loss was due to excessive sales of "loss
leaders." Reinhardt identified loss leaders as Pepsi-Cola
which cost 39 cents and was sold at cost, in quantities as
high as 1,200 cases a week. Reinhardt asserted that of a
total sales of $43,000, in groceries, as much as $14,000
would be in loss leaders, with a result that normal gross
profits would be obtained only on the remaining $29,000
of sales. Reinhardt asserted that he called these excessive
sales of loss leaders to the attention of Respondent's top
supervisory personnel, including Arnold Meade, Jerry
Stamp and Harry Morter. At the initial hearing, Gradsky
acknowledged the potential impact of excessive sales of
"loss leaders, without comparable sales of profit items."
This record does not establish, and would not support
with evidence of probative value, the relative impact on
profit of the sale of loss leaders or of alleged thefts. I find
resolution unnecessary.
The original testimony of Kantor, at the initial hearing,
stands in sharp contrast to Respondent's present
contentions. It appears in the following form:
Q. Did you know why the store closed?
A. Well, I know it closed because they were in deep
debt and I don't think any further credit could be
established for that store.
This testimony was given on April 23, 1968, the first day
of the hearing, long after the events of October,
November, and December, 1967.
"The reference to those "sitting here" unquestionably refers to the large
number of alleged discriminatees who were present , in the courtroom,
throughout the entire period of the initial hearing , during which this
testimony was given
SOUTH DISCOUNT FOODS, INC. 431
On the fourth day of the initial hearing , seekin - to
obtain clarification of the issues , the Trial Examiner
called to the attention of Respondent ' s counsel the
well-established legal premise that the right of
reemployment can be jeopardized by evidence that an
employee has previously engaged in theft . Respondent's
counsel responded , inter alia, that this evidence was not
put in for the purpose and should not be considered for
the purpose "of not reinstating any particular individual
because they had engaged in that theft . I'm not putting it
in for that purpose nor is it our intention to prove that in
this proceeding ." Respondent 's counsel also asserted, "It
is not put in for the purpose of disqualifying any person
from reinstatement by reason of theft . It is put in solely
for the purpose of explaining the financial predicament of
the Company which eventually led to its demise."
Applications for Employment
Respondents assert there were no applications for
employment by the former employees of Steven -Dayton
Discount , at 4601 South Dixie . I find no merit in this
assertion , for the reasons set forth in the initial Decision,
some of which follow.
I have found , undisputed , the fact that President
Mitchell , of the Clerks , and Pfarrer , National Secretary
and Treasurer of the Meat Cutters , went to the Bargain
Barn store on December 6, and requested of Arnold
Kantor and Arnold Meade that their members , who had
worked previously in that store , be recalled. The union
representatives were advised, by telephone , by Gradsky,
that they were trespassing and that they should leave or
face arrest . 28 As a consequence , picketing commenced the
following day , December 7, and continued after the store
opened on December 12.
Jerry Linch is director of personnel for the Kantor
stores, and asserted familiarity with the procedure
followed in opening new stores . Linch asserted they
selected supervisors and other key employees to help them
open the store and they do hire new employees. He
asserted those who helped get the store open came from
other Kantor stores, and that the overwhelming number of
the employees who opened the store on December 12
came from other Kantor stores.
Linch asserted that , pursuant to the instructions of
Kantor, he proceeded to the 4601 South Dixie store on
December 11, 1967, the day prior to its opening , for the
purpose of accepting applications for such vacancies as
might jevelop . Linch worked at a courtesy booth, which
he described as being in the front portion of the store and
visible to the pickets . Linch acknowledged seeing the
pickets in front of the store on both December 11 and 12.
Linch acknowledged that he contacted the Ohio State
Employment Service , requesting individuals with grocery
experience and that he also called a teacher , who was in
charge of distributing education , identified as Mr.
"See the section entitled "The Events of December 6, etc ." and fn. 33 of
the initial Decision . I find unimpressive and implausible the assertion of
Kantor, at the remand hearing , that he was never advised of this visit of
the union representatives.
I similarly find incredible Kantor 's assertion that Arnold Kantor was in
charge of " retail pricings," without authority to hire Arnold Meade,
whom I have found was described as a general manager for the Kantor
group , see the initial Decision , and who hired store management personnel,
according to Kantor , was present during this discussion.
The union representatives had been directed to Arnold Kantor, as the
individual in charge of the reopening . by Jerry Stamp , a Kantor
management specialist.
Brinkmeyer , to obtain boxboys. Linch acknowledged there
was no publication of a help wanted ad in the Dayton
newspapers and no notice was placed on the window of
the store . It is thus patent that neither the union
representatives nor the employees were advised, by
Respondents , that applications were being obtained and
considered . I so find.
Linch asserted that his instructions from Kantor were
that if he received any applications from anyone who was
formerly employed on the night crew or a cashier that
Linch should telephone Gradsky, to determine whether
such individual had been involved in the thefts.29
Linch acknowledged that when the store opened there
were approximately 35 individuals employed , including
either 6 or 8 in the meat department.30
Gradsky identified , from Respondent ' s records, the
respective classifications of the employees whom I have
found to be discriminatees ." The six meat department
employees are Baker , Curtis, Hardin , Lee McKnight,
Scarbrough and Wagers . The 13 cashiers are Aggee,
Alsept , Bowell , Fritts, Hines , Hipsher , Hollan , Justice,
Lewis, Diana McKnight , Serbontez , Stone and Thompson.
The nine boxboys are Arwood , Blair , Copeland, Cordray,
Hill, Magill , Ogan , Reedy and Strong . The four day
clerks are Larry Callahan, Billy Jo Larimore , Harkless
O'Bryant and John McCreary , the first three were
identified as having been on the night crew . Two produce
department employees are Hammond and Howard.
Winfred Smith was in the dairy department.
It thus appears, and I find , that 35 employees,
inferentially in the number specified in each classification,
were employed at the 4601 South Dixie store at all times
on and after December 12, 1967 . Not one of the named
former employees were included.
Offers of Compromise
Pursuant to the advice of Arnold Kantor , on December
6, that Arnold Kantor did not know why the former
employees had not been "called back to work" to help
clean and get the store ready to open , and that the union
representatives would have to talk to his brother Milton,
as set forth in the initial decision , Mitchell , on December
8, by letter , inter alia , advised Milton Kantor that it
appeared that he was preparing to open the store "without
honoring your obligations to the employees and the
Union ," and requested "the recall" of the employees. I
have also found that , on December 19, Rosenthal, as
attorney for Respondent South Discount , advised
Mitchell, by letter , that Respondent South Discount is not
a successor to the previous "owners" of the supermarket
and has no obligation under the terms of any
collective-bargaining agreement the Union may have had
with Respondent Steven , and was not required to
recognize the Union as the representative of its employees.32
No representation appears as to the reason for failure to
employ.
"Kantor, by way of corroboration , asserted , "I told Mr Linch that if
any of the former employees of the J. A Steven Company, before they
were hired , if they were in the area of checkout girls [cashiers ], and in the
night crew area, that he was to check with Mr. Gradsky, before they were
hired ." As noted , infra , there were 13 cashiers and 3 former night crew
clerks There were 13 others , represented by the Clerks , and 6 meatcutters,
not in the specified classifications , who were denied employment
"I find unimpressive Gradsky's assertion that he did not know, and
could not estimate , the approximate number employed when the store
opened on December 12.
"See the section entitled "The Remedy " of the initial Decision
"See the section entitled "The Events of December 6, etc ." of the initial
Decision
432 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
During the remand hearing, Gradsky asserted that, at
the suggestion of Respondent's counsel, Katz, Gradsky
met with Mitchell, in an effort to bring an end to the
picketing, on approximately December 14," at which time
Mitchell spent 3 or 4 hours listening to the "tapes" which
Gradsky had obtained, as described supra. Gradsky
asserted that Mitchell had reduced his request as to the
number of employees for whom he was seeking
reinstatement to 13. Gradsky asserted, "I said that there
were - some of those people on that list were implicated
in our discussions of the theft , and that certainly the store
did not want to hire anybody that was perhaps, at least
that there was a suspicion that they were involved in a
theft, in their prior job." Gradsky acknowledged that,
thereafter, Mitchell insisted that all of the former
employees should be employed by Respondent South
Discount.
On December 20, at the direction of Judge Weinman,
in connection with the Federal Court proceeding, a
meeting was held between Mitchell , Pfarrer , Kantor,
Goldman, and Gradsky. Gradsky asserted that he advised
Pfarrer that Respondents had no quarrel with the Meat
Cutters Union, that none of the individuals alleged to
have engaged in thievery were members of the Meat
Cutters Union, that Respondents would be happy to hire
these individuals and to execute a contract with the Meat
Cutters. Gradsky acknowledged that the offer, at one
time , unspecified , was that these employees , represented
by the Meat Cutters, would be employed at a different
Kantor store. Queried as to whether an offer had been
made to reemploy them at the Bargain Barn store,
Gradsky responded, "I believe that we did." I am unable
to find, from the recitation of Gradsky , an unconditional
offer of reinstatement.
Gradsky asserted that on December 27, 1967, he made
an unconditional offer, to Pfarrer, to reemploy the six
meat department employees, and that he and Pfarrer
reached "substantial agreement" on the terms of a
collective-bargaining agreement . Gradsky acknowledged
there were a "couple of differences, a couple of question
marks ," so the agreement was not complete . According to
Gradsky, Pfarrer advised him, the following day, that
Pfarrer could not settle separately. While this testimony
stands undisputed , it must be considered in the light of
Gradsky's testimony in the initial hearing , on April 23,
1968, that he was not responsible for labor relations at the
4601 South Dixie store . It must also be considered in the
light of the dubious response of Gradsky when he was
queried as to whether the meatcutters had ever been
offered employment at the 4601 South Dixie store, as
distinguished from other Kantor stores . On the basis of
demeanor , and by reason of numerous conflicts and
transparent exaggerations " in the testimony of Gradsky,
as well as his apparent interest in the outcome of this
case, I do not find his asserted offer to be credible.
"The original charges herein had been riled , by both unions, on
December 11, and served on Respondents on December 12
It is reasonable to infer that State Court action , relative to the picketing,
was pending on December 14.
"As an illustration , Gradsky asserted , at the remand hearing: "I called
Mr. Harter and reported to him that Mr. Mitchell had said that he would
not do anything unless all the people on his list were hired, and that we
could not go along with that because there were certain employees on
there, that we absolutely knew , and had admitted thievery , and he had not
even granted that they should not be hired " (Emphasis supplied.)
It is undisputed that only Aggee and McKnight, of the 35
Gradsky acknowledged that offers to reemploy the
individuals represented by the Clerks was conditioned
upon each taking a lie detector test. In view of Gradsky's
admission that no unconditional offer of employment was
made to Mitchell, I find it unnecessary to consider the
evidence relative to his conversations with Mitchell.
However, his representations as to the events of December
20 stand in sharp contrast to the response of Rosenthal,
dated December 19.
CONTENTIONS OF THE PARTIES AND CONCLUDING
FINDINGS
Pilferage
During the original hearing , in answer to an inquiry of
the Trial Examiner , Respondent 's counsel asserted, inter
alia , " - I am not saying that all thirty-six [thirty -five] of
them were guilty of theft and I am not saying that anyone
in particular was or was not guilty of theft , nor do we
intend to prove in that general term that fact .... And I
suggest it is a proper defense, that if the Company had
evidence of widespread theft , without being able to pin it
to anybody , then that was the motive for not hiring the
employees , if that were the motive , even though they
could not pin it on anybody , and that was the only reason
those people were not hired , then we do not have any
violation of the Act."
At the remand hearing , Respondent's counsel asserted,
inter alia , "We have to - Mr. Trial Examiner , this is
rather complicated , it all fits into a pattern , and we have
to be able to present it , the way that we saw it. Now, it
isn't a question as to whether there was any, and I have
stated this before, and I am stating it now , the defense,
the question of whether alleged by them , whether or not
there was a motive in refusing to hire these people, the
question before the Trial Examiner , is not whether in fact
there was theft , but whether in fact , the Respondents had
reasonable cause to believe that there was theft , and acted
on that , and acted accordingly , based upon the evidence
that they had in front of them , true or untrue. We are not
here to prove theft, we are only proving that we had a
suspicion , a knowledge of theft, that was based on
substantial evidence , at least in our minds it was
substantial, because we are dealing with subjective intent
motive." (Emphasis supplied.)
At the initial hearing, immediately following a
discussion of the defense that the store was closed, on
November 22, by reason of economic conditions , the Trial
Examiner called attention to the fact that the " right of
reemployment ," insofar as an individual discriminatee is
involved, can be jeopardized by reason of theft.
Thereupon , Respondent's counsel advised that the
evidence relative to theft was not being put in for that
purpose "and should not be considered for the purpose of
not reinstating any particular individual because they
engaged in that theft . I'm not putting it in for that
purpose nor is it our intention to prove that in this
proceeding." (Emphasis supplied.)
General Counsel , in his brief, correctly urges that the
evidence purportedly emanating from the interrogations
conducted by Gradsky resulted in the elimination, by
discriminatees, were questioned Aggee is presently employed , by Kantor,
at another store McKnight is alleged to have admitted inaccurate sales
cash register recording . There is no evidence of other admissions.
Respondent 's counsel disclaimed any intent to prove actual implication
of employees, in thefts, set forth infra.
SOUTH DISCOUNT FOODS, INC. 433
discharge of resignation , of all those whom Respondent
had reason to believe were participants in the pilferage,
prior to the closing of the store on November 21. The
only employees , in the list of 35 not employed when the
store was reopened , who were interrogated by Gradsky
were Aggee , since reemployed at another store, and
McKnight . Not a single employee witness was produced
to establish the existence of the fact of pilferage . Rather,
Respondent relied on what is obviously a hearsay
recitation of Gradsky, relative to what Hughes principally,
and others by way of corroboration of Hughes , asserted
by way of accusations . Gradsky did not even take the
trouble to place in the record the identity of the
individuals so accused.J6
I have found that Kantor attributed the closing of the
store solely to the economic condition , and the inability of
Kantor to obtain additional credits , on November 21,
1967, in a vain effort to keep the store operating. When
the union representatives requested the employment of the
discriminatees herein, on December 6, no mention of
thefts appears to have been made by Arnold Kantor,
Arnold Meade, or Gradsky . General Counsel , in his brief,
calls attention to the fact , as I have found , that the
Rosenthal response , of December 19, 1967, to the Union's
request that these individuals be employed , relied solely on
the assertion that Respondent South Discount was not a
successor . No mention is made therein of the present
accusations.
Respondents , in their brief, assert that the Board erred
in ordering a remand , on the premise that General
Counsel did not allege a failure to hire , on or about
December 7, 1967, as a violation of Section 8(a)(3). I find
no merit in this assertion , for the reasons explicated supra
Respondents assert that there is no evidence that the
discriminatees made unconditional applications for
employment , and no evidence that jobs were available. I
find no merit in these contentions, for reasons explicated
supra.
Respondents assert that General Counsel has not
proven a discriminatory motive as the reason for the
failure to hire these employees , and further assert "that
some employees had engaged or were involved in theft."
The most that can be said of the recitation of Gradsky,
insofar as it relates to the 35 discriminatees, is that
McKnight admitted ringing cash register sales, on the
instructions of her unidentified supervisor, at less than the
cost of the merchandise , on two occasions . The balance of
Gradsky' s recitation relates to hearsay accusations , insofar
as these discriminatees may be involved , which,
admittedly , Respondent never sought to verify by further
investigation , or by questioning of the alleged accused.
The purported reason , for this failure , according to
Gradsky, was that their attention turned to the economic
condition of the store , and efforts to obtain additional
credit to keep the store functioning . I have found Gradsky
not to be a credible witness , by reason of the
exaggerations and contradictions which appear in his
recitation , as well as his unimpressive demeanor.
Respondents would substitute an asserted suspicion of
widespread theft as a predicate for a belief that these
discriminatees were , in each instance , unworthy of
consideration for employment . In view of the instructions
which Kantor purportedly gave Linch , it affirmatively
"Gradsky's penchant for exaggeration is demonstrated in his recitation
of his meeting with Harter and Mitchell , on December 20, 1967 Gradsky
asserted Mitchell requested employment of employees "that we absolutely
knew , and had admitted thievery "
appears that at most only 13 cashiers and 3 former night
clerks were included in Respondent' s suspicions.
Respondents have advanced no plausible reason for their
failure to hire any of the other 19 applicants , including the
6 in the meat department.
Respondent ' s effort to attribute the difference between
the low gross grocery percentage , in the last 12-week
period , ending on November 5, 1967, to widespread theft,
does not withstand scrutiny , in the light of the assertions
of Manager Reinhardt , whose undisputed testimony was
that the low gross grocery percentage was in large
measure due to excessive sales of " loss leaders."
Reinhardt asserted that approximately one-third of the
total sales were loss leaders, sold at cost , $ 14,000 in a
total grocery sales of $43 ,000. Respondents have produced
no records to dispute these assertions.
General Counsel asserts, in his brief , that an affirmative
defense must be rejected where there is an absence of
proof to sustain Respondent ' s contentions ." General
Counsel correctly asserts that the failure of Respondents
to produce employee witnesses , or former employee
witnesses, who may have had knowledge of the identity of
individuals involved in thefts, permits an inference that the
testimony of these uncalled individuals might have been
adverse to Respondents , and it was for this reason that
they were not produced."
I find it unnecessary to repeat the findings I have set
forth in the initial decision in the section entitled
"Contentions of Parties and Concluding Findings" which
I reaffirm . In the initial decision I found significant the
absence, and complete void , in the extensive testimony of
Milton Kantor , of any explanation for Respondent's
failure to employ a single applicant . This finding, in the
light of the remand hearing , requires amplification. I find
the assertions of widespread theft , as justification for
failure to hire , as advanced largely by Gradsky and
corroborated by Kantor, are an afterthought and
pretextuous. In so finding, I am not unmindful of the
representations of Respondent ' s counsel , at the initial
hearing , as to the reasons why the admission of this
purported evidence was sought , and the disclaimers that it
was for the purpose of denying anyone a right to
employment.
Respondents , in their brief, assert correctly that a mere
reliance on previous unfair labor practices occurring
beyond the 10(b) period cannot sustain a finding of illegal
motivation . " However , in that case , as set forth in the
section entitled "Contentions of Parties and Concluding
Findings" of the initial decision , I have noted that the
court held that where occurrences within 6-month
limitations period in and of themselves may constitute, as
a substantive matter, unfair labor practices, earlier events
may be utilized to shed light on the true character of
matters occurring within the limitations period; and for
that purpose Section 10(b) does not bar such evidentiary
use of anterior events.
Accordingly , for the reasons set forth , I reaffirm my
earlier finding that the failure to hire any of the 35
employees , named supra , upon the request of the union
representatives , was discriminatorily motivated and
violative of the provisions of Section 8(a)(3) and (1) of the
"Citing: Liberty Coach Company, Inc, 128 NLRB 160, 169-70.
"Citing- International Association of Bridge. Structural, Etc, Local 600
(Bay City Erection Company, Inc), 134 NLRB 301, 306 In. It, expanded
on other grounds 144 NLRB 1049; Vogue-Wright Studios, Inc , 76 NLRB
773, 778
"Citing: Bryant Manufacturing Co v N.L R B, 362 U.S. 411
434 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Act. I also reaffirm my earlier findings as to the identity
of the Respondents chargeable with the failure to hire.
Offers of Compromise
General Counsel urges , correctly , that evidence of
negotiations looking to settlement of the proceedings
before the Board are obviously immaterial to the issues."
The Board has stated that it would give no weight to
evidence of efforts at compromise in deciding whether a
respondent's failure to reinstate employees was
discriminatory , since offers of settlement or compromise
have no probative value as evidence of guilt or liability.
Lexington Telephone Company, 39 NLRB 1130, 1132, fn.
4.
General Counsel urges that the principle that employees
must be offered unconditional reinstatement is well
settled , by numerous Board Decisions , with court
approval .'' Ergo , an offer of employment , to stay the
running of backpay liability , must similarly be
unconditional.
Having found that Respondent has not unconditionally
offered employment at the 4601 South Dixie store, to the
discriminatees, I find it unnecessary to treat with
Respondent's contentions relative to the admissibility of
evidence relative to its efforts to compromise.
THE REMEDY
The recommendations contained in "The Remedy" of
the initial decision reaffirmed, except the second sentence
of the second paragraph . Inadvertently, the term
"reinstatement" was used . The following second sentence
is therefore substituted : Accordingly , I recommend that
"Citing. Ford Motor Company. 23 NLRB 342, 367-368, fn. 45, enfg.
consent decree 122 F.2d 414 (C.A. 8).
"Citing . Eastern Die Company. 142 NLRB 601, 602-603, enfg . 340 F.2d
607 (C.A 1), cert. denied 381 U.S. 591; Ertel Manufacturing Corp. 147
NLRB 312, 333, enfg . 352 F.2d 916 (C.A. 7).
Respondents offer employment , to each of the
discriminatees named , at the same or substantially
equivalent positions at which they would have been
employed had they not been discriminated against,
dismissing , if necessary, to provide employment for those
offered and accepting employment , all employees at 4601
South Dixie Drive , transferred to or hired on or since
December 6, 1967.01
CONCLUSIONS OF LAW
The conclusions of law contained in the initial decision,
at page 35, and more particularly paragraph 4 thereof,
which relates to the matter of this remand , are reaffirmed.
RECOMMENDED ORDER
The Recommended Order of the initial Decision, is
reaffirmed, except paragraph 2(a) is stricken and the
following is substituted:
(a) Offer to the 35 employees named in "The
Remedy" employment , at the same or substantially
equivalent positions at which they would have been
employed had they not been discriminated against, and
make each whole for the loss of pay each may have
suffered by reason of Respondent's discrimination
against each in accordance with the recommendations
set forth in "The Remedy" herein.
"The last indented paragraph of the Appendix , attached to the initial
decision is similarly modified, by striking the words commencing
immediate and full reinstatement, and ending December 6, 1967, and
substituting, in lieu thereof "employment at the same or substantially
equivalent positions at which they would have been employed had they not
been discriminated against , dismissing , if necessary , to provide employment
for those offered and accepting employment , all employees at 4601 South
Dixie Drive , transferred to or hired on or since December 6, 1967.