Pargament Fidler, Inc.

National Labor Relations Board - Board Decisions

Nov 8, 1968

173 N.L.R.B. 696 (N.L.R.B. 1968)

696 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Pargament Fidler , Inc.; and Pargament Frankel Asso-
ciates , Inc. and Local 815, International Produc-
tion Service & Sales Employees Union. Case
29-CA-1122
November 8, 1968
DECISION AND ORDER
By CHAIRMAN MCCULLOCH AND MEMBERS
FANNING AND BROWN
On June, 20, 1968, Trial Examiner Harry H.
Kuskin issued his Decision in the above-entitled
proceeding, finding that Respondent had not engaged
in the unfair labor practices alleged in the complaint
and recommending dismissal of the complaint in its
entirety, as set forth in the attached Trial Examiner's
Decision. Thereafter, exceptions and supporting briefs
were filed by Respondent and the General Counsel.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the
National Labor Relations Board has delegated its
powers in connection with this case to a three-
member panel.
The Board has reviewed the rulings of the Trial
Examiner made at the hearing and finds that no
prejudicial error was committed. The rulings are
hereby affirmed. The Board has considered the Trial
Examiner's Decision, the exceptions and briefs, and
the entire record in this case, and hereby adopts the
findings, conclusions, and recommendations of the
Trial Examiner with the following modifications.
The Trial Examiner concluded that Pargament
Frankel Associates, Inc., herein referred to as Frankel,
had not refused unlawfully to bargain with the Union
because he found that no demand for recognition had
been made upon Frankel, notwithstanding that the
latter was the successor to Pargament Fidler, Inc.,
herein referred to as Fidler. While we agree with the
Trial Examiner that the complaint should be dis-
missed, we do so because we find that the General
Counsel has not established that Frankel was the
successor to Fidler.'
The Trial Examiner based his finding of successor-
ship on several factors, including, inter alia, the
following: (1) Pargament, Fidler's president, became
the president of Frankel with the same salary and
fringe benefits he received at Fidler; (2) Frankel's
initial staff of supervisors and other personnel was
I Members Fanning and Brown both find that Frankel was not the
successor to Fidler , but Member Brown therefore deems it unnecessary
to determine whether a demand was made upon Frankel for recognition
by virtue of the earlier conversation between the Union and Pargament,
while Member Fanning would additionally find that no proper demand
for recognition was made upon Frankel thereby.
The Chairman does not concur in his colleagues' discussion and legal
conclusions concerning the successorship issue. He would find that
Frankel was the successor of Fidler, but would dismiss the complaint on
the ground that no demand for recognition was made on Frankel.
173 NLRB No. 102
hired from among Fidler's employees, with the same
pay and fringe benefits; (3) Mr. Marvin Frankel, sole
stockholder in Frankel, lent money to Pargament to
wind up Fidler's unfinished business; (4) at the public
auction held pursuant to the foreclosure on a chattel
mortgage lien against Fidler, Mr. Frankel purchased
some of Fidler's equipment; and (5) shortly after the
auction Frankel began producing the same end
products as Fidler and doing business with Fidler's
customers. We find merit in Respondent Frankel's
contention that the Trial Examiner's conclusion as to
successorship is not supported by the record.
In determining whether one employer is a successor
to another, the Board applies the test of whether
there is substantial continuity in the employing
industry. And this, in turn, depends on whether the
enterprise which results is substantially or essentially
the same under the new ownership as before.' On the
basis of the record as a whole, we are satisfied in the
instant case that the resulting enterprise was not
essentially the same and hence it has not been shown
that there was substantial continuity of the "employ-
ing industry."
As more fully set forth by the Trial Examiner, in
1967 Fidler's operations consisted of a silk screen
department, an art department, and a shipping and
packing department, which possessed all necessary
equipment and performed all production work re-
quired for the manufacture of commercial signs,
displays, and posters, except that the printing was
subcontracted. As a result of financial difficulties in
the spring of 1967, Fidler assigned all its accounts
receivable to a factor, who thereafter foreclosed the
chattel mortgage lien on the fixtures and equipment.
Fidler's assets were ordered sold at public auction,
and on August 16 the sale took place.
Mr. Frankel purchased certain of the equipment,
which consisted of only a small part of the assets of
Fidler, and of these, only the silk screens and the
Baum folder (with attachments) might be classed as
machines necessary to the production of Fidler's end
product.' However, those machines were not suf-
ficient for production, standing alone, and Frankel
did not buy other equipment, such as racks utilized in
the silk screen process or any of the printing
equipment other than the folder. The purchases were
moved to the building where Olympic Litho was lo-
cated4 and Frankel began to sell and distribute the
same type of commercial signs, displays, posters, and
related products as had Fidler. However, although
2 West Suburban Transit Lines , Inc, 158 NLRB 794, 797.
3 In addition Frankel purchased cabinets , files, office machines,
lamps, desks, scales , a metal saw , a lift truck , an automobile, and a
station wagon . Such equipment , however, is not necessarily peculiar to
Fidler's business and its use is not particularly helpful in determining
the continuity of the essential nature of the employing enterprise
4 As more fully set forth in the Trial Examiner's Decision, from the
time prior to his dealings with Mr Pargament , Mr. Frankel was engaged
in his own printing business known as Olympic Litho.
PARGAMENT FIDLER
Frankel continued to have its own art department and
shipping and packing facility, it did none of the other
production work itself. The silk screen process was
subcontracted to other firms, with the silk screens
purchased at the auction being used where possible,
while the printing and folding work was done by
Olympic Litho. Further, although Pargament was
named as president of Frankel and managed its
operations, all financial control and final authority to
make decisions concerning Frankel's business was
lodged in Mr. Frankel.
Although Mr. Frankel had come to know Mr.
Pargament shortly before that sale and had entered
into an arrangement whereby a new company would
be set up and would employ Pargament to operate a
business producing the same end product as Fidler
had been making, it is clear that Mr. Frankel was
seeking to enlarge his printing business, that is,
Olympic Litho, and the transfer was a bona fide
business transaction.
With respect to the employee complement, of
Fidler's total staff of 31 persons immediately before
the foreclosure, 23 had been in the bargaining unit. A
total of only 10 went to work for Frankel, of whom 4
had been in the Fidler unit and comprised the unit at
Frankel. These employees were engaged in the art
work and shipping and packing, since all other
functions were being subcontracted to other firms.
Within a few months, 4 of the 10, including one of
the artists in the bargaining unit, had left Frankel's
employ.
Under all the circumstances, we are persuaded that
Frankel is not the successor to Fidler. Although
Frankel was engaged in selling the same end product
as had Fidler and had the same customers,5 its
business was conducted at a different location, in a
different fashion, with a small group of employees
which no longer represented the range of skills
necessary for all phases of the manufacturing process.
While the principal owner of Fidler managed
Frankel's operations, he possessed no ownership or
final control of Frankel. Finally, it is clear that Mr.
Frankel's primary purpose in dealing with Pargament
and purchasing Fidler's equipment was to enhance
and enlarge his printing business.' Thus, Frankel
cannot be said to be either the disguised continuance
of the predecessor' or the unchanged continuation of
Fidler's business under different ownership.'
Accordingly, we find that Frankel did not succeed
to Fidler's obligation to recognize and bargain with
the Union as the representative of the employees, and
we shall dismiss the complaint in its entirety.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor
697
Relations Board hereby orders that the complaint
herein be, and it hereby is, dismissed in its entirety.
5 Pargament answered in the affirmative the question whether at
Frankel he had the same customers as at Fidler , but it does not appear
whether Frankel served only former Fidler customers or secured other
accounts in addition , and there is no indication whether all of Fidler's
customers continued to use Frankel 's services.
6 We see no other significance in the fact that the facilities of
Olympic Litho were made available to Frankel when the newly
purchased equipment was moved to the new location or that Frankel
used the old Fidler forms.
7 Cf Intergraphzc Corporation of America , 160 NLRB 1284.
8 Cf. Webster Wood Industries, Inc and /or West Virginia Woods,
Incorporated, 169 NLRB No . 14 (TXD ), West Suburban Transit Lines,
Inc, supra , at 796-798.
TRIAL EXAMINER'S DECISION
STATEMENT OF THE CASE
HARRY H. KUSKIN, Trial Examiner: This case was heard
at Brooklyn, New York, on March 18, 19, 20, and 21, 1968. A
complaint, which was amended during the hearing, issued
herein on December 29, 1967,' presenting the questions of
whether Pargament Fidler, Inc., herein called Respondent
Fidler, and Pargament Frankel Associates, Inc , herein called
Respondent Frankel, each violated Section 8(a) (5) and (1) of
the Act 2 More particularly, the complaint, as amended, alleges
that Respondent Fidler, in violation of Section 8(a) (1) and
(5), has failed and refused to do the following: (1) to notify,
negotiate and bargain with Local 815, International Pro-
duction Service & Sales Employees Union, herein called the
Union, concerning the relocation of its New York City plant in
Brooklyn, New York, and its continuance of operations as
Respondent Frankel; (2) to negotiate with the Union con-
cerning the effects on the production employees represented
by the Union at Respondent Fidler's New York City plant of
its decision to discontinue its operations at its New York City
plant, among which effects were the payment of severance pay
and vacation pay owing to these employees under the terms
and conditions of an existing collective bargaining agreement
between Respondent Fidler and the Ur,ion; and (3) to transmit
to the Union moneys deducted by it as dues from the wages of
its employees represented by the Union. And, as to Res-
pondent Frankel, the complaint, as amended, alleges that,
although requested by the Union to do so since on or about
August 1, 1967, it has (1) refused to recognize and bargain
with the Union as the collective bargaining representative of its
1 All dates mentioned hereinafter are in 1967, unless otherwise
indicated.
2 The charge herein was filed on October 10, 1967. Both Respond-
ent Fidler and Respondent Frankel deny that the charge was served
upon them Service of the charge was by registered mail and a return
post office receipt of such service is in evidence. Neither Respondent
denies the authenticity of the return receipt. In accordance with Section
11(4) of the Act which provides that "the return post office receipt" of
a charge served by registered mail "shall be proof of service of the
same," I find that the General Counsel has met the service requirements
of the Act and that the above contention of both Respondents is
lacking in merit . See N.L.R.B. v. Arthur J. Wiltse d/bla The Ann Arbor
Press, 188 F 2d 917 (C.A. 6), N.L.R.B. v O Keefe & Merritt Mfg. Co.,
178 F.2d 445 , 447 (C.A. 9 ), see also Section 102.111 of the Board's
Rules and Regulations , Series 8, as amended
698 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
production employees at the Brooklyn, New York plant, a
majority of which employees had been employed by Respon-
dent Fidler at its New York City plant, and (2) failed and
refused to honor and give effect to the above-mentioned
agreement between Respondent Fidler and the Union Respon-
dent Fidler admits that there may be some money due to
"former employees" as severance pay and some money due to
the Union as dues and for employee pensions, payment of
which was not made due to economic conditions; however, it
denies that it engaged in any of the unfair labor practices
alleged herein Respondent Frankel also denies that it engaged
in any of the unfair labor practices alleged herein. And as an
affirmative defense, Respondent Frankel asserts that the Union
never requested recognition as the exclusive bargaining agent
of its employees in an appropriate unit, never represented a
majority of the employees in such a unit, and never demanded
that it recognize the collective bargaining agreement claimed to
have been entered into between the Union and Respondent
Fidler-an agreement which it was under no obligation to
recognize
Upon the entire record, including my observation of the
witnesses, including their demeanor while on the witness stand,
and after due consideration of the briefs of the General
Counsel and Respondent Frankel, I make the following.
FINDINGS OF FACT
I THE BUSINESS OF RESPONDENTS
The complaint, as amended, alleges, and Respondent Fidler
does not deny, that it is a New York corporation, that, at all
times material and until on or about August 16, 1967, it
maintained its principal office and its plant at 307 Canal
Street, New York City, where it was engaged in the manufac-
ture, sale, and distribution of commercial signs, displays,
posters, and related products, dud that during the year ending
August 16, 1967, it sold and distributed from this plant
directly to points outside the State of New York manufactured
products valued in excess of $50,000.
The complaint, as amended, further alleges, and Respon-
dent Frankel does not deny, that it is a New York corporation,
that at all times material and since on or about August 22,
1967, it maintained its principal office and place of business at
116 Nassau Street, Brooklyn, New York, where it is engaged in
the manufacture, sale and distribution of signs, displays,
posters and related products, and that during the period since
on or about August 22, 1967, which is representative of its
annual operations generally, it sold and distributed from this
plant directly to points outside the State of New York
manufactured products valued in excess of $50,000.
I find, upon the foregoing, that Respondent Fidler and
Respondent Frankel are each engaged in commerce within the
meaning of the Act.
II. THE LABOR ORGANIZATION INVOLVED
Local 815, International Production Service & Sales Em-
ployees Union , is, I find, a labor organization within the
meaning of Section 2(5) of the Act.
III. THE ALLEGED UNFAIR LABOR PRACTICES
A. Background3
Respondent Fidler started in business more than 35 years
ago. It has been engaged over the years in the processing of
customer orders for signs, displays, pamphlets, and circulars,
inter aka, from the initial stage through the delivery stage and
has been known in the trade as an integrated shop Its
operations have included (1) a printing department with such
equipment as a printing press, a camera, a plate making
machine and a photostat machine, (2) a silk screen depart-
ment, including a screen shop which made the physical screens,
spray booths and spray equipment, and drying racks-,4 (3) an
art department which did the art work needed for the silk
screens and for the platework to be used in filling customer
printing orders and for the advertisements to be placed in
newspapers by its customers, and (4) a shipping and packing
department. A significant aspect of its business, most of which
was with customers in the dry cleaning industry, involved the
sale of premiums Thus, it would buy such items as glasses,
knives, beachballs, etc., and sell them to its customers for use
as giveaways in connection with circulars or other forms of
publicity ordered by such customers from it.
About 1963, Respondent Fidler stopped doing its own
punting and subcontracted this work, however, the printed
matter was then returned to it for folding. This altered
somewhat Respondent Fidler's status as an integrated shop.
During recent years the regular employee complement has
consisted of between 33 and 40 employees. In addition to
Harry Pargament, who is its president and took an active part
in its day-to-day operations, there were three supervisors,
namely, Glassman, Wolters and Herring, and the head book-
keeper, a Mr. Plimack. Glassman was in charge of purchasing
premiums and of expediting orders in the hands of subcontrac-
tors, and had authority to act independently in these respects,
he was, as Pargament indicated, Pargament's "right hand "
Wolters and Herring were supervisors of production and had
the authority to hire and discharge employees And it would
appear that Plimack functioned as the office manager
B. The Critical Events Which Followed Respondent Fidler's
Business Difficulties In 1967
During April and May of 1967, according to Harry
Pargament, the volume of business went into a decline with the
result that Respondent Fidler was in "very bad" financial
condition and found it necessary, in order to generate working
capital, to assign all of its accounts receivable to Branerton
3 The testimony of all the witnesses herein, including that of Harry
Pargament, who was called by the General Counsel as a witness under
Section 43 (b) of the Federal Rules of Civil Procedure , is, for the most
part , unrefuted. My findings hereinafter are, unless otherwise indicated,
predicated on such unrefuted testimony . In the case of Pargament, his
unrefuted testimony was, at times, uncertain and, at other times,
shifting and inconsistent . I have therefore relied, with respect to him,
upon what I believe to be his credible testimony.
4 The paper signs and displays ordered by customers were often
done by the silk screen method , and, in those instances where printing
was required , the punting press was utilized.
PARGAMENT FIDLER
Company, a factor.' Thereafter, business became progressively
worse and Respondent Fidler was unable to raise additional
moneys to meet the demands of the factor In consequence,
the factor foreclosed his chattel mortgage lien on the fixtures
and equipment of Respondent Fidler, and these fixtures and
equipment were ordered to be sold at public auction The
details of the auction were thereafter advertised by the
auctioneer in the New York Times on August 10, 13, and 15,
and the auction was held on August 16 Among those who
made purchases at the auction was one, Marvin Frankel, who is
the principal and only stockholder in Respondent Frankel, the
other respondent herein. (As appears hereinafter, in greater
detail, on August 10 or 11, about a week before, Frankel had
entered into an agreement with Harry Pargament whereby
provision was made for the creation of Respondent Frankel
and for Harry Pargament to be president thereof and to assume
the principal role in its operation.) Frankel's purchases
consisted of cabinets, files, office machines, lamps, desks,
scales, a metal saw, a Baum folder, including attachments, a lift
truck, the right title and interest in a 1967 Buick Wildcat
automobile and a 1967 Pontiac station wagon, and about 1000
to 1200 silk screens, which screens were sold as a single lot As
will appear hereinafter, the General Counsel attaches some
significance in establishing a violation herein to purchase at the
auction of the two automobiles, the lot of silk screens and the
Baum folder and their use thereafter in connection with
Respondent Frankel's operations at 116 Nassau Street in
Brooklyn. In this connection, it would appear that Frankel did
not buy the racks or other equipment utilized'in the silk screen
process and bought none of the printing department equip-
ment, except the Baum folder
When business volume began to decline, Respondent Fidler
reduced its employee complement somewhat Instead of
regular complement of about 40 employees, Respondent
Fidler had as of the payroll week ending June 14, 31
employees, in all, consisting of 23 employees in the bargaining
unit represented by the Union and 8 nonunit employees 6 As
June and July were vacation months, the actual working force
was substantially less during these months June was also the
month in which Respondent Fidler decided that it could not
continue in business as theretofore. On June 25, it placed an
advertisement in the business opportunity section of the New
5 Apparently, Respondent Fidler had theretofore been assigning
some of its accounts receivable to Branerton.
6 The reduction in force occurred through layoffs and quits.
9 At that time and at all times material herein, Frankel was the sole
stockholder of Olympic Litho, a company engaged mainly in the offset
printing business at 116 Nassau Street Frankel and his wife were
officers and directors of Olympic Litho, and his father was the
treasurer Frankel was seeking printing work for Olympic Litho.
8 By the middle of July, Branerton Company had advised Respond-
ent Fidler that it was going to foreclose the chattel mortgage on the
latter's fixtures and equipment.
9 One item of their discussion , I find, concerned what significance to
any business arrangement was the fact that Respondent Fidler operated
a union shop, whereas Frankel operated a nonunion shop at Olympic
Litho. Pargament testified variously ( 1) that the discussion was limited
to a disclosure by Frankel and him of the union or nonunion status of
their respective businesses and (2) that the discussion was more
comprehensive and involved an inquiry by Frankel as to whether the
Union at Respondent Fidler would have to follow Pargament in any
business arrangement they were to make. As to this matter, Frankel
testified that he did not ask Pargament whether it would be possible to
get his business over without taking on the Union. I am persuaded,
however, from my observation of Pargament and Frankel on the stand,
and from the inherent probabilities of the situation , that the more
comprehensive discussion took place.
699
York Times, saying, "large silk screen shop doing about
one-quarter Million business for sale or merger with responsible
party, Box 3531 Times " According to Harry Pargament, he
"wasn't thinking of going out of business. He was either
thinking of raising some funds or finding a partner or merging
with someone " About the same time , Marvin Frankel was
advertising in a trade magazine "for a broker or someone that
did printing and could use his services "' It is not clear
whether Pargament and Frankel met in consequence of one or
both of these advertisements or through mutual friends.
However, their first contact was on the telephone and this, in
turn, led to a series of meetings beginning in early July and
ending on August 10 or 11
The substantive result of the first such meeting was an
arrangement between Pargament and Frankel to have Olympic
Litho do a printing job for respondent Fidler At subsequent
meetings, Frankel made unsuccessful attempts to obtain more
printing work from Respondent Fidler for Olympic Litho In
addition, there surfaced in the discussions the fact that
Respondent Fidler was in financial trouble and that Pargament
was seeking to make a business arrangement with Frankel and
thereby resolve his financial difficulties.8 Frankel, after ex-
changing information with Pargament as to their respective
operations, eschewed having any part in Respondent Fidler
and indicated that if he was going to put up any money, he
was going to put it into his own business.9 These discussions
eventuated in (1) an agreement between Pargament and
Frankel, dated August 10, which Frankel denominates as "a
sales agreement where I hired Pargament to be a salesman"' 0
and (2) a loan of $2500 from Olympic Litho, of which Frankel
was the sole owner, to Respondent Fidler to be used by the
latter to wind up pending work orders, which loan was secured
by a chattel mortgage dated August 10, on Respondent
Fidler's accounts receivable 1 1
The August 10 "sales agreement " provided, in effect, as
follows.
(1) Frankel, in reliance upon the representations by
Pargament that he has experience in silk screen printing,
premium, display card, display advertising and printing busi-
ness and that he has a large clientele among the users of these
products, was to make an investment and organize a corpora-
tion which was to engage in said business.
10 Pargament fixed the time when he knew that he had arrived at an
understanding with Frankel variously at "about the 8th" of August and
"about a week prior to the time of the auction ," which occurred August
16 Frankel testified, in this connection, that , after the meeting with
Pargament on August 1, Pargament and he had a telephone conversation
in which Pargament appealed for assistance with Respondent Fidler's
financial problems , that he told Pargament that he "would not be
interested in doing anything with Fidler, having any part of it," but that
he would speak to his counsel and see if he could come up with
something , that a meeting was then arranged , and that such meeting
took place on August 10 and the discussions resulted in an agreement
between Pargament and him either that day or the next day.
11 Thereby, Frankel , in effect, assured the continued functioning of
Respondent Fidler until the time of the auction (as appears hereinafter,
Respondent Frankel began operations within several days of the
auction ). While there is testimony by Rutigliano that , sometime before
the auction , Frankel came to Respondent Fidler's shop and gave
Glassman a quantity of brown envelopes of the type used for payroll
purposes , one of which contained Rutigliano's pay for the most recent
payroll period , I am unable to find, in the light of Frankel's denial that
this ever happened and the fact that such a step would have been
inconsistent with the above loan which was intended for use by
Respondent Fidler for payroll purposes , etc , that this incident ever
occurred. Therefore, I do not credit Rutigliano in this respect.
700 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
(2) The corporation to be organized was to be called
Pargament Frankel Associates, Inc., and he, Frankel, was to be
the sole director and stockholder and would elect Pargament as
president, Frankel's wife as secretary, and Frankel's father as
treasurer
(3) When organized, Pargament Frankel Associates, Inc.,
was to assume all rights, benefits and obligations of the
agreement and Pargament was to devote all his knowledge,
skill, experience and working time exclusively to the business
and in the interest of Pargament Frankel Associates, Inc.
(4) The agreement was for a period of one year from
August 14, 1967, and Pargament was to be paid $300 a week
as compensation for his services, which were to include selling
for, supervising and managing, said business, subject to the
control of Frankel who was to have the final say on operations
and policy; in addition to the above weekly compensation,
Pargament was to be furnished with a family plan Blue
Cross-Blue Shield policy and an automobile at the expense of
the business, was to reimbursed for all expenses incurred on
behalf of said business, and was to receive specified sick leave
and vacation benefits.1 2
(5) Unless "the parties gave notice to the other" at least 30
days prior to August 14, 1968, the expiration date of the agree-
ment, of an intention to renew the agreement, the said agree-
ment as well as their relationship to each other was to terminate.
As already indicated, on August 16, Frankel appeared at the
auction sale of Respondent Fidler's fixtures and equipment
which was held on the latter's premises at 307 Canal Street,
New York City, and made the purchases listed above
Thereafter, on August 19, Respondent Frankel began opera-
tions at 116 Nassau Street, Brooklyn. At that time, Olympic
Litho was occupying one half of the seventh floor of the
building and was subleasing the other half to a tenant Due to
the space problem, which was relieved on September 15 or
thereabouts by the vacating of the subleased premises, Re-
spondent Frankel was lodged in the office of Olympic Litho, a
space about 40 feet by 20 feet, which Olympic Litho made
available to it. After the sublessee had vacated, Respondent
Frankel occupied about half of the space so vacated, or about
50 feet by 25 feet, and a partition separating it from Olympic
Litho was erected. The nature of Respondent Frankel's actual
operations and of its employee complement will be discussed
hereinafter.
With respect to the status of Respondent Fidler's operations
just prior to the auction sale of August 16, the record shows
that, around July 21, Pargament called his employees together
and told them that he was closing down the business.' 3 At
that time there were about 23 employees in the unit
represented by the Union During the period from July 21 to
August 16, the actual working force was considerably re-
duced.14 There were about nine unit employees at work for
the payroll period ending August 2; about eight unit employ-
12 Pargament 's salary and fringe benefits under the agreement with
Frankel were virtually the same as the salary and fringe benefits which
he had been enjoying theretofore.
13 In this connection , employee Rutigliano , a layout man, testified
that when he left on his vacation on July 21, he did not expect to be
working for Respondent Fidler thereafter.
14 Some employees , although not actually working, were still in
employee status because they were then on their paid vacations.
15 It would appear that he was on vacation during Respondent
Fidler's last payroll period.
16 Kries and Bachner continued with Respondent Frankel as salaried
employees . The two salesmen on commission at Respondent Fidler did
not continue with Respondent Frankel.
ees at work for the next payroll period ending August 9; and
about six unit employees at work for at least part of the last
payroll period ending August 16. In the last mentioned group
of unit employees were Dennis, Germano, Mangual, Sterneski,
Rogers and Rutigliano. Of these, Sterneski worked through
August 11, Mangual worked 3 days, and Germano, Dennis and
Rutigliano worked a full week. According to Rutigliano, he
was the only one who worked at his trade for that entire week,
the others were packing things, moving things and doing
miscellaneous jobs Among the nonunit employees at work
through the last payroll period were Supervisors Glassman,
Herring, and Wolters, Head Bookkeeper Plimack, and salesmen
Kries and Bachner
It is clear that the initial complement of Respondent
Frankel came from Respondent Fidler's personnel. Thus, the
complement consisted of Rutigliano, the layout man,
Nadeau' S and Sterneski, the artists, Eugene Rogers, the
delivery man, Gloria Spencer, the office girl, Kries and
Bachner, the salesmen,' 6 Fred Wolters, the supervisor, and
Glassman, the general manager. Together with Pargament, the
initial complement totaled 10 and all of them continued doing
the same type of work as at Respondent Fidler 17 With respect
to his transition from employment by Respondent Fidler to
employment by Respondent Frankel, Rutigliano testified, as I
have indicated, that when he left on his vacation on July 21,
he did not expect to be working for Respondent Fidler any
more However, he came back early in August at the insistence
of Glassman, who telephoned him at his home and told him
that Harry Pargament "had found a backer" and that there
would be work for him, whereupon, he returned to work at
307 Canal Street, finished some old orders and worked on
some new orders that drifted in before August 16, and then
sometime shortly thereafter he went over to 116 Nassau Street
and continued doing the same kind of work.' 8 In this
connection, the record shows that Olympic Litho rather than
Respondent Frankel hired Germano after the auction sale, but
that Germano continued doing the same type of work; i.e.,
operating the Baum folder,' 9 the cutter, and the printing
press According to Harry Pargament, Olympic Litho did most
of the printing and folding required by Respondent Frankel on
a reimbursable basis, also according to him, Germano spends
most of his job doing work that originates at Olympic Litho
An analysis of the initial complement of Respondent
Frankel, in light of the above, shows that Respondent Frankel,
like Respondent Fidler (i e since about 1963) did not do its
own printing work; did have an art department, and did have a
shipping and packing facility. Unlike Respondent Fidler, it did
not have a silk screen department with such component parts
as a shop which made the physical screens, spray booths and
spray equipment and drying racks, it did, however, own the
1000 to 1200 silk screens which had theretofore belonged to
Respondent Fidler and which Frankel had purchased at the
17 As of the time of the hearing the employee complement was
smaller due to the fact that Sterneski , Glassman, Kries , and Bachner had
left According to Pargament, the entire work force consisted of two art
department employees,, the delivery man, Supervisor Wolters, and
himself.
18 The record shows that Rutigliano stayed on at 307 Canal Street
for a few days after the date of the auction , because he needed, in
connection with his work , the long work table at Respondent Fidler's
premises which had not yet been moved.
19 This machine was purchased by Frankel at the auction sale and
placed thereafter in the portion of the 7th floor at 116 Nassau Street,
Brooklyn, occupied by Olympic Litho.
PARGAMENT FIDLER 701
auction And whenever there was a need for one of these
screens because a former customer of Respondent Fidler
wanted that screen used on an order placed with Respondent
Frankel, the screen was sent along to the subcontractor to
whom the work was given by Respondent Frankel 2 0 It would
appear also that Respondent Frankel has been taking new
orders from customers requiring the silk screen process and has
then subcontracted the work.
The nature of the business of Respondent Frankel and
Harry Pargament's connection therewith is disclosed, in part,
by General Counsel's Exhibit 10, in evidence. The latter is an
advertisement placed by Respondent Frankel in the "Dry
Cleaners News," a trade newspaper, in December 1967,
reminding the readers "once again" of Harry Pargament's
affiliation with Respondent Frankel and that the latter was
offering a "complete advertising service featuring sales promo-
tions, premiums, displays, printing, silk screen and our own art
staff." The advertisement detailed that this complete service
can provide "circulars, mailers, coupons, price signs, counter
cards, window and truck signs and a host of other attention
getting devices " It is apparent from the above advertisement
that other similar notices had preceded this one. And although
Pargament denied that this was so, his prehearing statement to
a Board agent, which is in evidence as General Counsel's
Exhibit 5, and bears the date of October 25, refutes such
denial. I am cognizant, in this connection, that when
Pargament's attention was called to the sentence therein which
reads, "I sent my customers notice that I was now doing
business as Pargament Frankel," he indicated that he was there
referring to General Counsel's Exhibit 10 However, since
General Counsel's Exhibit 5 antedated this latter exhibit by
about 2 months, it is evident, and I find, that his prehearing
affidavit underscores that fact that the advertisement in the
Dry Cleaners News in December was preceded by other similar
notices to the trade of Pargament's association with Respond-
ent Frankel and of the type of business being conducted by
Respondent Frankel.
The General Counsel introduced considerable testimony to
the effect that, in subcontracting silk screen work, and other
business when needed, to outside vendors, Respondent Frankel
was still using at the time of the hearing herein the same
vendor forms for placing orders with subcontractors as were
used by Respondent Fidler in such situations. As to this,
Pargament explained that, although these vendor forms were
not purchased by Respondent Frankel from Respondent
Fidler, they were used because "[he] didn't want to see all
these order blanks go to waste and [he] didn't feel that it
would be a mark against [Respondent Frankel] for using the
order blanks that were available." In adapting these forms for
use by Respondent Frankel some employees have scratched
out the name "Pargament Fidler Inc." thereon and have
written in "Pargament Frankel Associates, Inc.," while, in the
case of Rutigliano, the only change he has made has been
with respect to the return address to which the completed
order was to be sent As to the latter, the parties stipulated
that, notwithstanding that Rutigliano would send out purchase
orders on forms to two specific subcontractors in the silk
screen business, which forms did not have the words
"Pargament Fidler Inc.," crossed out, the subcontractors
involved would bill Pargament Frankel Associates, Inc , for
their services. That there was no haste to discard these vendors
forms is apparent from the testimony of Marvin Frankel that
he had prepared a new vendor form before the onset of his
protracted illness which kept him away from work from
November 1967 until shortly before the hearing and that a
final form to be printed by Olympic Litho had not as yet been
approved by him. I note, also, in this connection, that
Rutigliano testified, without contradiction, that an interde-
partmental form which had been used by Respondent Fidler
was still being used by Respondent Frankel in processing
orders within its own shop and in ordering work to be done for
it by Olympic Litho.
I have heretofore referred to the fact that Respondent
Frankel occupies the premises on the same floor with Olympic
Litho, separated from the latter by a partition21 and that
Olympic does most of the printing and folding for Respondent
Frankel on a reimbursable basis It is also clear that Respond-
ent Frankel and Olympic Litho share the services of their
respective office help Thus, Olympic Litho's bookkeeper,
identified in the record as Pauline, writes checks occasionally
for Respondent Frankel and checks the latter's bills; she also
directs one, Lillian, Respondent Frankel's part-time book-
keeper, as to what to do.22 Lillian's services, like those of
Pauline, are available to both Olympic Litho and Respondent
Frankel as needed. It would appear that Olympic Litho does
not pay for Lillian's services and Respondent Frankel does not
pay for Pauline's services In addition, Respondent Frankel's
office secretary (Gloria Spencer started in this job, but left
after several weeks and was replaced) occupies the same office
with Olympic Litho's secretarial help In addition to answering
Respondent Frankel's telephone, she also answers Olympic
Litho's telephone, and Pauline of Olympic Litho acts as her
relief on the telephone. 23
C. The Course of Bargaining During 1967 and Prior Thereto
Respondent Fidler has been in collective-bargaining rela-
tionship with the Union, or the Union's predecessor, concern-
ing its production employees for about 15 or 16 years. The
most recent agreement is for a 3-year period ending September
20 Although Frankel testified that, to the best of his knowledge, the
screens have not been so used , he admitted that Pargament would make
the decision as to whether to give a screen to a subcontractor. And
Pargament testified that "There's been maybe one or two occasions we
were able to use some of the screens but mainly we used very few of
them."
21 During the first month or so of Respondent Frankel's existence,
as I have already found, Olympic Litho made available to Respondent
Frankel , for the latter 's operations, its enclosed office which was 40 feet
by 20 feet. Harry Pargament testified , in this connection , that he did
not know whether Respondent Frankel paid rent to Olympic Litho for
these premises.
22 Lillian was hired particularly to take care of Respondent
Frankel 's books and records which are separate and apart from those of
Olympic Litho.
23 It appears that telephone service for Respondent Frankel was not
installed until September 13, the delay having been occasioned , at least
in part, by a strike among telephone installers of the New York
Telephone Company Calls for Respondent Fidler were at first received
at Capital Poster Service, a mail order service company owned by
Pargament , and the caller was given Olympic Litho 's number. Respond-
ent Frankel concedes that, during this period , it gave Olympic Litho's
telephone number to its customers should they wish to make return
calls After the telephone was installed at Respondent Frankel, the
caller was given that telephone number . In this connection , the parties
stipulated that at least since March 13, 1968, upon dialing the telephone
number of Respondent Fidler, the telephone operator of the New York
Telephone Company intercepted the call to say that the number had
been changed , spelling out the number of Respondent Frankel.
702 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
10, 1968, the agreement covers all of Respondent Fidler's
employees engaged in "Production (Art Department-Printing
Depart 24 and Silk Screen Department) and Shipping and
Packing." Among the provisions of this agreement adverted to
herein are a clause setting the normal workweek at 35 hours, a
union-security clause, a pension plan clause, a clause requiring
Respondent Fidler to deduct union dues and initiation fees
from employee wages upon being furnished with employee
authorization therefor, a clause requiring payment of severance
pay to an employee with 5 years or more of service, who leaves
the employ of Respondent Fidler for any reason whatsoever,
and a clause as to the scope of the agreement. As to the latter,
article 2 provides as follows
This agreement shall apply to the establishments now
owned, maintained, operated and/or controlled by the
Employer, and/or any new establishment that the Employer
may own, maintain, operate and/or control at any time
during the term of the agreement.2 5
With particular reference to the last 3 years, or so, the
record shows that the Union struck, upon the expiration of the
prior agreement, for increased wages and fringe benefits, and
over the duration of the work week, with the Union insisting
on the 35-hour work week as theretofore, and Respondent
Fidler wanting a longer work week 26 The Union prevailed on
the duration of the work week and gained a wage increase,
inter alia Since the current agreeement has been in effect,
there have been no walkouts by the Union; however, the
Union has had to approach Respondent Fidler from time to
time because of delinquencies in its payment of pension
monies and in remitting union dues deducted from employees'
wages, and also because of Respondent2 7 Fidler's demands
that the men work overtime 28 In this connection, I credit
Postman's tesitmony, over Pargament's denial, that after the
1965 contract went into effect, Pargament told him he "can't
live with the 35 hour week " I also credit Postman's testimony,
over Pargament's denial, that there were a number of times
when he threatened to "pull a strike" because of delinquencies
in remitting dues and pension monies to the Union and that
Pargament would then assure him that the monies would be
paid and ultimately they were paid 2 9
The last delinquency incident occurred on or about August
1, 1967. Postman testified, in this connection, as follows He
received a telephone call from the shop steward at Respondent
Fidler's to the effect that there was a problem with manage-
ment over vacation pay. He appeared at the plant and met with
Pargament on the matter He was then told by Pargament that
Respondent Fidler was going out of business. 0 At this, he
reminded Pargament of the dues and pension money arrearages
owing to the Union and of the severance pay which would be
due to the employees, and Pargament assured him that he
24 As already found , there was little, if any, printing work
performed by Respondent Fidler during this contract period due to the
fact that it was subcontracting such work and had the printed material
returned to it for folding.
25 By virture of this clause , the agreement was extended by the
parties to a subsidiary business , called "Timely Service ," in which
Pargament had a 50 percent interest , and to the heretofore mentioned
mail order service business, called "Capital Poster Service ," in which
Pargament was the sole owner and principal stockholder . This latter
company had one employee who was covered by the agreement , as mail
orders received from the dry cleaning industry and from others for
signs, posters , circulars , displays etc , were produced by Respondent
Fidler for this company
26 According to Postman , the president of the Union , Respondent
Fidler wanted a 40-hour workweek, according to Pargament , he sought
a 37%: -hour workweek
"would take care" of these matters. He also told Pargament
that there had been "rumblings" that Respondent Fidler "was
closing up and was going to reopen again into another
company." Pargament thereupon denied this and stated that
he was going out of business completely; that everything has
been bad Whereupon, he said, "Harry [Pargament] , I want
you to understand that should you open again, this contract
will follow you" To this, Pargament replied, "that's not the
question I am not going to open up again " He then went to
the plant floor and told the employees that Pargament said
that he was going out of business, but that he would work that
week and that the following week he would have a few people
working and that would be all In connection with the
foregoing, Pargament confirmed the fact that Postman and he
did discuss the various delinquencies at about the time
indicated by Postman, that he told Postman that he was going
out of business, and that he did acknowledge that these
moneys were due However, Pargament denied that he then
said that he would take care of these matters before going out
of business, insisting that he said, "I would like to pay it but at
the moment I am broke and when collections get a little better
I'll try to make it up to him [Postman] ." Since Postman's
testimony that Pargament told him that he "would take care"
of the matter falls short of a commitment by the latter to pay
the monies before he went out of business, and since
Respondent Fidler was, at that time, in financial difficulty, I
am persuaded that Pargament made no such commitment to
Postman and therefore credit Pargament's denial and his
further testimony that he manifested an intention to meet his
obligations when circumstances permitted him to do so
Pargament also denied that Postman ever mentioned anything
during the above conversation about the contract following
him should he go into business again, or that he said to
Postman that he understood that the contract follows the men
I note, however, in this connection, Pargament's testimony
that he understood that if he were to continue his business at
another location under another name, with himself as the main
stockholder, "then the Union was entitled to sign up the
men." In these circumstances, I find that Postman, rather than
Pargament, testified more credibly, and that Postman's state-
ment was in the nature of a reminder of Article 2 in the
existing agreement between Respondent Fidler and the Union.
This conversation marked, for all intents and purposes, the
last contact between Pargament and Postman According to
Postman, he telephoned Pargament Fidler's shop the following
Monday and asked for Pargament, but was told by Plrmack,
the head bookkeeper, that they were out of business and that
Pargament was not there at the time; whereupon, he told
Plimack that he was concerned about the severance pay that
was due to the men and was still unpaid and asked that
27 According to Pargament , pension monies were to be remitted on
a quarterly basis He testified further that dues were collected from
employees at the beginning or at the end of every month The contract
provided that dues were to be remitted to the Union within 15 days
28 According to Postman , the men would refuse to work overtime
because there were "other men" on layoff.
29 Pargament admitted that there were occasional delinquencies by
Respondent Fidler in the payment of union dues and pension monies
before May and June 1967 , and that Postman had, on those occasions,
complained to him concerning such delinquencies
30 Discussions were then in progress between Pargament and
Frankel . However, it is clear from Pargament 's testimony that he did
not indicate anything to Postman about this.
PARGAMENT FIDLER 703
Plimack have Pargament get in touch with him as this was of
utmost importance; and that, except for a telephone call from
Pargament 2 days before he testified herein, he had not heard
from Pargament since that time. Pargament testified, in this
connection, that Pllmack told him only that Postman had
called or was trying to reach him, and that he tried once or
twice to reach Postman on the telephone, without success.
Postman, in turn, denied ever getting any messages from the
switchboard operator at his office saying that Pargament had
called, and added that he made several attempts to reach
Pargament, after his initial call which was taken by Plimack,
but they proved abortive.
It is not contended that the Union ever communicated with
Frankel or anybody at Respondent Frankel and requested that
Respondent Frankel recognize the Union and/or bargain
collectively with the Union Nor is it contended that anyone
from the Union ever communicated to Frankel or to anyone
else at Respondent Frankel a claim that Respondent Frankel
was obligated, by reason of the contract between Pargament
Fidler and the Union, to recognize the Union and to abide by
that contract. It should be pointed out, however, as I have
already found, that Pargament made no mention to Postman in
the August conversation about the discussions he was then
having with Frankel. And, it is Postman's uncontradicted
testimony that he first learned of Pargament's connection with
Frankel and of the existence of Respondent Frankel in
September or October, after the commencement of operations
at 116 Nassau Street in Brooklyn, and that this happened
during the course of proceedings before the New York State
Board of Arbitration over Respondent Fidler's severance pay
arrearages.31
D. The Allegations of the Complaint and Conclusions Thereon
As already noted, the complaint, as amended, alleges a
refusal to bargain against both Respondent Fidler and Re-
spondent Frankel. As to Respondent Fidler, it is alleged (1) to
have failed to notify, negotiate and bargain with the Union,
with which it had a contractual relationship, concerning the
relocation of its New York City plant to a place in Brooklyn,
New York, and concerning its continuance as Respondent
Frankel; (2) to have failed to negotiate with the Union
concerning the effects on unit employees represented by it at
the New York City plant of the decision to discontinue its
operations; and (3) to have failed to transmit to the Union
dues deducted from unit employees' wages in the Union's
behalf. As to Respondent Frankel, it is alleged that, in
disregard of a request to do so, (1) it has refused to recognize
and bargain with the Union as to the production employees at
the above Brooklyn plant; and (2) it has failed and refused to
honor and give effect to the aforementioned agreeme-
between Respondent Fidler and the Union.
salesmen, guards, watchmen, and all supervisors as defined in
Section 2(11) of the Act, did, at all times material, constitute a
unit appropriate for the purpose of collective bargaining within
the meaning of Section 9(b) of the Act. This unit description
conforms in all respects with the unit covered by the 1965
contract between Respondent Fidler and the Union; it also
conforms with Section 9(b) of the Act which states that "a
plant unit" is appropriate. It is clear, therefore, and I find, that
the above unit is appropriate.
The complaint, as amended, further alleges, but Respondent
Frankel denies, that all production employees, including art
department, printing, silk screening, shipping and packing
employees at its Brooklyn plant, exclusive of office clericals,
salesmen, guards, watchmen, and all supervisors as defined in
Section 2(11) of the Act, constitute a unit appropriate for the
purpose of collective bargaining within the meaning of Section
9(b) of the Act. Like the unit found appropriate above, this
unit also conforms with Section 9(b) of the Act which states
that "a plant unit" is appropriate Therefore, I also find here
that the above-described unit of Respondent Frankel is
appropriate
2 The majority issue at Respondent Fidler and
at Respondent Frankel
Although Respondent Fidler denies the majority status of
the Union, it is clear, and I find, that the Union was,
throughout the relevant periods herein, the incumbent union
under a union-security contract with Respondent Fidler which
recognized it as the exclusive collective bargaining agency for
all Respondent Fidler's production employees at the New
York City plant. It also appears that, under this contract, all
unit employees were members of the Union and having their
dues checked off. Accordingly, absent any countervailing
evidence, I find that the Union has, during the times material
herein, represented a majority of the employees in the unit
found appropriate at the New York City plant
There remains the question of the Union's majority status
among the employees in the unit found appropriate at
Respondent Frankel The record shows that Respondent
Frankel staffed its production department in August entirely
with employees from Respondent Fidler's shop but that it
hired only a part of Respondent Fidler's complement. It shows
further, as found above, that the existing union-security
contract between Respondent Fidler and the Union covered
the former's production department and that all unit employ-
ees were members of the Union and were having their dues
checked off to the Union In these circumstances, and in light
of my finding hereinafter that Respondent Frankel is the
successor employer to Respondent Fidler, I find that the
Union continued to be the majority representative of the
employees of Respondent Frankel.3 2
1. The appropriate units
The complaint , as amended , alleges, but Respondent Fidler
denies that all production employees , including art depart-
ment, printing , silk screening , shipping and packing employees
at its New York City plant, exclusive of office clericals,
31 The contract between Respondent Fidler and the Union provided
for the submission of any unresolved claims, disputes, or grievances to
binding arbitration before the New York State Board of Arbitration.
Pargament , although apprised by the New York State Board of
3 Concluding finding as to the alleged refusal
of Respondent Fidler to bargain concerning the effects
The General Counsel contends, in substance, that Respond-
ent Fidler's refusal to bargain concerning the effects of its
decision to go out of business consisted of (1) Pargament's
Arbitration about the proceedings before it, chose not to appear He
testified that he did not attend because he owed the money and "there
was no point in going down there and discussing it "
32 See In tergraphic Corporation of Amenca, 160 NLRB 1284.
704 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
conduct of misleading the Union by assuring Postman that the
unpaid, contractually required severance pay, union dues and
pension monies would be paid before Respondent Fidler went
out of business , and (2) Pargament's denial to Postman that he
was contemplating going into business at a new location, at a
time when he was in the midst of negotiations with Marvin
Frankel regarding the creation of Respondent Frankel, thereby
violating its obligation under the Act to bargain about the
relocation and continuance of operations as Respondent
Frankel. However, as to (1), I have already found that
Pargament's assurance to Postman was not that he would pay
these monies before Respondent Fidler closed down the
business but that he intended to meet these obligations when
circumstances permitted him to do so In view of this, and
since there is no evidence before me as to any differences
between Pargament and Postman as to the amounts due in
respect to these delinquencies'33 and since at no time
thereafter did Postman, or the Union, request negotiations or
discussions as to these delinquencies, asking only for their
payment, I find no predicate for a finding of a violation based
on Respondent Fidler's conduct with respect to these delin-
quencies 3 4
And insofar as (2) above is concerned, the General Counsel
proceeds on the theory, in effect, that what took place here
was not a bona fide going out of business but a relocation of
the business of Respondent Fidler and its continuance as
Respondent Frankel. However, as I find hereinafter that
Respondent Fidler was forced by economic circumstances to
close down its operations, I find no basis for finding that
Respondent Fidler refused to bargain concerning the reloca-
tion and continuance of its operations. It is not contended, nor
does it appear, that the Union sought to negotiate, or discuss,
with Respondent Fidler its stated decision that it was going
out of business.
4. Concluding findings as to the alleged refusal of Respondent
Frankel to bargain with the Union, and to assume and honor
the agreement of Respondent Fidler with the Union
The General Counsel contends that Respondent Frankel is
the alter ego or disguised continuance of Respondent Fidler
and, in any case, is the successor to Respondent Fidler, and
that Respondent Frankel's obligations to bargain and to
assume and honor the agreement of Respondent Fidler with
the Union follow therefrom. The General Counsel contends
further in effect, that while proof of a demand would be
required if Respondent Frankel is found to be a successor, no
such proof would be required if Respondent Frankel is found
33 The Union took only the matter of severance pay before the New
York Board of Arbitration pursuant to the provision under the existing
contract for arbitration of claims, disputes and grievances between the
parties which they cannot resolve within 5 days. The arbitration award
shows that the sole issue before the arbitrator was whether employees
were entitled to severance pay under the contract . I am satisfied from
Postman 's testimony that, in respect to severance pay, his concern was
that it had not been paid, although Pargament had said that he would
"take care " of the matter . It would thus appear that the arbitration, step
was taken in order to effect payment In this connection , the award
made by the arbitrator merely affirmed the applicability of the
above-mentioned provisions of the contract , saying, "those ... em-
ployees ... who by reason of the closing down of the business, were
terminated from the employ of Pargament Fidler, Inc. and provided
they were otherwise eligible shall be paid severance pay in accordance
with the appropriate and applicable provisions of the labor agreement."
to be an alter ego or disguised continuance of Respondent
Fidler; and that, in any event, a demand was made upon
Pargament by Postman on August 1, at a time when Pargament
could be considered an agent of the successor on whom a
demand could then be made
With respect to the General Counsel' s alter ego or
disguised continuance theory, it is apparent from my findings
hereinabove that, except for the smaller production operation
at Respondent Frankel than existed at Respodent Fidler there
were, at the inception of Respondent Frankel's operations, the
following similarities between both of them: Respondent
Frankel had, in its smaller complement, production employ-
ees,3 5 supervisors, salesmen and clerical help, all being from
the ranks of Respondent Fidler, and these employees received
.ne same pay and fringe benefits and continued doing the same
type of work with the same type of machines, it utilized
equipment of Respondent Fidler purchased at the auction
forclosure sale of Respondent Fidler's equipment and assets; it
did business with Respondent Fidler's customers, it utilized
the vendor forms and order forms used by Respondent Fidler;
it used the same truck and the same delivery man as
Respondent Fidler ;36 it had the same individual as president as
did Respondent Fidler and it paid him the same salary and
fringe benefits for performing the same supervisory and
managerial role as theretofore, and it purchased for him at the
auction, for use in making sales calls, the car he was using for
this purpose at Respondent Fidler; and it made the same end
products, as did Respondent Fidler, except that it not only
subcontracted the printing work to subcontractors but had the
folding work done by Olympic Litho, and it also subcon-
tracted the making of silk screens incidental to its poster and
sign business
The foregoing similarities are, however, to be viewed in the
light of the following: Respondent Fidler closed down its
business for economic reasons; Frankel had no connection
whatsoever with Respondent Fidler's financial difficulties and
with the consequent sale of its fixtures and equipment at
auction, such fixtures and equipment of Respondent Fidler as
Frankel purchased were acquired in competitive bidding at
that auction; and, so far as appears , Frankel's arrangement
with Pargament to hire him was entered into by each of them
with his legitimate business considerations in mind and was to
their mutual advantage, e.g. Pargament was to continue doing
for a corporation to be organized by Frankel the same work
and to have the same managerial and supervisory authority as
he had with Respondent Fidler, with no loss of earnings or
fringe benefits, and Frankel, in turn, was to benefit by
Pargament's business know-how and by the fact that Parga-
34 The case of George E Light Boat Storage, Inc., 153 NLRB 1209,
affd. in relevant part in 373 F.2d 762 (C A. 5), relied upon by the
General Counsel is inapposite . There, the Board held that the refusal by
the respondent to continue to make payments to the union's welfare
plan, as required by the contract, which it disavowed, was in derogation
of such contract and was, in effect, a unilateral change of the wages of
the respondent's employees who were the beneficiaries of that plan, and
therefore violative of Section 8 (a) (5) of the Act. Here unlike there,
Respondent Fidler did not disavow its contract with the Union and did
not refuse to pay the monies in consequence of such disavowal , indeed,
Respondent Fidler acknowledged its obligations and promised to try to
resolve its financial difficulties and satisfy these obligations.
35 These were from the art department of Respondent Fidler, and
did, inter alia, hand lettering and pictorial work and pasted type into
position.
36 Except that he divided his time between Respondent Frankel and
Olympic Litho.
PARGAMENT FIDLER 705
merit was the repository of the customer good will of
Respondent Fidler and hence offered some assurance of future
business, including printing business for Olympic Litho. While
it is true (1) that the name "Pargament" was used in the
corporate title of Respondent Frankel just as in the corporate
title of Respondent Fidler;3 7 (2) that Pargament was made
president of Respondent Frankel thus duplicating his office at
Respondent Fidler; and (3) that Pargament's connection with
Respondent Frankel was emphasized in its advertising, 3 8 I
regard these moves as legitimate steps taken to capitalize on
Pargament's past connection with Respondent Fidler and not
as casting any doubt on the genuineness of the contract of hire
between them.3 9 And I view similarly the fact that Pargament
would tell former customers of Respondent Fidler that he had
gone out of business as Pargament Fidler, Inc. and had joined
with Frankel in a new enterprise.
Last, but not least, the similarities must be weighed against
the fact that the record fails to establish by a preponderance of
the evidence that the developments discussed herein were
motivated by a desire to escape the Union and the obligations
under the existing contract 40 In this connection, I draw no
inferences adverse to either Respondent from the fact alluded
to by the General Counsel that neither Pargament nor Frankel
could say definitely how a meeting between them first came
about. Nor do I draw any inference adverse to them from
Pargament's testimony that during the discussions between
Frankel and him, Frankel wanted to know whether the
operation of Respondent Fidler could be taken over without
taking the Union along. For, so far as appears, this was no
more than an exploratory inquiry by Frankel as to what was
involved unionwise if he were, as Pargament suggested, to
make an investment in Respondent Fidler so as to alleviate its
financial difficulties. Moreover, no such arrangement ever came
to pass. Nor do I attach overriding significance, in this
connection, to Pargament's acknowledgement that he never
told the Union of his discussions with Frankel and of the
resulting arrangements. Such conduct is just as consistent with
a good-faith belief by him that these arrangements were of no
legitimate concern to the Union as with a desire on his part to
act surreptitiously vis-a-vis the Union.
In the light of the above and on the entire record in the
case, I find, despite the contrary contention of the General
Counsel, that the credible evidence falls short of establishing
that Respondent Frankel was the alter ego or disguised
continuance of Respondent Fidler 41 Instead, I conclude, and
find, that Respondent Fidler closed down its operations for
legitimate business reasons and not for any union-connected
reasons. However, I do find merit in the General Counsel's
alternative position that Respondent Frankel is the successor
to Respondent Fidler. Thus, it is apparent from the similarities
between the operations of Respondent Fidler and the opera-
tions of Respondent Frankel that the business formerly
conducted by Respondent Fidler was being continued under
the ownership of Respondent Frankel. This was accomplished
by Frankel, the sole stockholder of Respondent Frankel, by
such steps as (1) hiring Pargament to manage and operate a
similar business for Respondent Frankel at another location,
(2) hiring the initial staff of supervisors and other personnel of
Respondent Frankel from among Respondent Fidler's employ-
ees, (3) lending money to Respondent Fidler so it could wind
up unfinished work before the auction sale, (4) purchasing at
auction a considerable amount of Respondent Fidler's equip-
ment for the use of Respondent Frankel, and (5) going into
production as Respondent Frankel shortly after the auction
and producing the same end products as Respondent Fidler It
follows therefrom that Respondent Frankel became the
successor to Respondent Fidler and became bound to acknowl-
edge the bargaining obligation of its predecessor. 42
The alleged bargaining demand upon Respondent Frankel
The General Counsel concedes, and rightly so, that once
Respondent Frankel is found to be a successor of Respondent
37 As heretofore found, Frankel was the sole owner of Respondent
Frankel.
38 Thus , the advertisement of Respondent Frankel to the trade in
the Dry Cleaner News in December 1967, in evidence as General
Counsel 's Exhibit 10 was signed , "Sincerely, Harry Pargament "
39 Frankel admitted that he knew nothing about the silk screen
business and that he devotes less than 4 hours a day to Respondent
Frankel 's business Before his illness , which began around November
and lasted until shortly before the hearing and which precluded his
participation in the business, Frankel would sign the company check,,
after Pargament and Glassman had approved the bills and invoices each
had generated, and while Pargament and Glassman could each make
minor purchases on his own , he had to consult with, and get approval
from, Frankel on major purchases . Frankel also had the final say on
matters of policy.
40 The record herein is devoid of any evidence of any antiunion
conduct by Respondent Fidler prior to the critical developments herein.
41 I find distinguishable the case of Intergraphic Corporation of
America, supra, relied upon by the General Counsel to support a
contrary finding. In that case, Intergraphic , of which one Weidman was
the principal and sole stockholder , went out of business and, on the
next day, a new enterprise , Polygon, of which one Feinberg was the sole
stockholder and president was formed The new corporation was to
conduct the same type of silk screen manufacturing business at another
location with the same customers , machinery, salesmen, and with
Weidman as the general manager. The General Counsel does concede
that , unlike here, Inteigraphic went out of business while unfair labor
practice charges were pending against it, and with a purpose of escaping
its union obligations . However, there are other significant distinguishing
aspects. Among these, I find, are (1) Weidman was the motivating force
in organizing , and in the creation of, Polygon, by leasing space himself
for operating at another location, by surreptitiously moving equipment
from Intergraphic's plant to the new location and by readying the new
plant before the date of incorporation of Polygon , (2) Weidman owned
70 percent of the stock of the new corporation , his family had 15
percent, and Feinberg, the newcomer , had 15 percent , ( 3) Weidman not
only conducted , and was responsible for, the direction of the operations
of Polygon in the same manner as he had done at Intergraphics, which
paralleled what Pargament did at Respondent Frankel , but, unlike
Pargament , he also controlled the operations at the new location, (4)
Weidman acknowledged to the union agent that the Polygon location
was to be his new shop , (5) and, finally , Feinberg intimated during his
testimony that the arrangement which he had entered into with
Weidman was in the nature of a fraud perpetrated on him by Weidman
42 Board and Court cases establish that a successor employer is
bound to acknowledge the bargaining obligations of its predecessor
where, as here, it continues substantially the same operation with the
same employee unit, albeit diminished in size, at the same or at another
location in the vicinity See Northwest Galvanizing Co, 168 NLRB No.
6, and West Suburban Transit Lines , Inc., 158 NLRB 794, 797, and
cases cited therein. See also John Wiley & Sons v. Livingston , 376 U.S.
543, where the Supreme Court of the United States said, in relevant
part, "The objectives of national labor policy , reflected in established
principles of federal law, require that the rightful prerogatives of owners
independently to rearrange their business and even eliminate themselves
as employers be balanced by some protection to the employees from a
sudden change in their employment relationship."
The case of Oil Chemical Workers International Union, Local
4-243, AFL-CIO v. N.L.R.B., 362 F 2d 943 (C.A.D.C.), relied upon
by Respondent Frankel for a contrary result , is distinguishable on its
facts.
706 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Fidler, as here, it must then be established that the Union
made a bargaining demand upon Respondent Frankel, before a
violation of Section 8(a) (5) can be found 43 The General
Counsel points, in this respect, to testimony by Postman, the
president of the Union, that by August 1, during a conversa-
tion with Pargament, he told Pargament that there were
rumors that Pargament was going to reopen again and
admonished him in the following terms. "Harry, I want you to
understand that should you open again, this contract will
follow you " He argues therefrom that this was a bargaining
demand on Respondent Frankel because Pargament and
Frankel had already come to an understanding concerning the
new enterprise and Pargament's high supervisory role therein,
thereby making Harry Pargament the agent of Respondent
Frankel, the successor. However, I cannot subscribe to the
'General Counsel's reading of the so-called bargaining demand.
As I view it, it was predicated upon a relocation of Respondent
Fidler-a situation which, I have found, never came to pass
because Respondent Fidler legitimately closed down its busi-
ness for economic reasons and never reopened Furthermore,
the record fails to support the General Counsel's position that
Pargament and Frankel had already reached an understanding
by August 1 concerning matters which were finalized in their
agreement of August 10 44 Accordingly, as there is no basis in
law or in fact for find; ig that Pargament was by August 1 an
agent of Respondent Frankel, I conclude, and find, apart from
other considerations, that no valid bargaining demand was
made upon Respondent Frankel, the successor to Respondent
Fidler, by August 1. In light of the above, and since I have
43 See Steel City Transport v. N L R.B, 389 F.2d 735 (C.A. 3),
enfg 166 NLRB No. 54, Lon-Ann of Mtamt, Inc, 137 NLRB 1099.
heretofore found that neither the Union nor its representatives
ever communicated with Frankel or anybody at Respondent
Frankel and requested that Respondent Frankel recognize the
Union and/or bargain collectively with the Union, I conclude,
and find, that a necessary prerequisite to a holding that
Respondent Frankel has refused to bargain with the Union has
not been established. Accordingly, I conclude that the allega-
tions of the complaint, as amended, that Respondent Frankel
violated Section 8(a) (5) and (1) of the Act have not been
sustained by the record
Upon the basis of the entire record, I make the following:
1 Respc ndent Fidler and Respondent Frankel are each
employers engaged in commerce within the meaning of Section
2 (6) and (7) of the Act.
2. The Union is a labor organization within the meaning of
Section 2(5) of the Act.
3. Neither Respondent Fidler nor Respondent Frankel has
refused to recognize and/or bargain collectively with the Union
as the exclusive representative of their respective employees in
an appropriate unit in violation of Section 8(a) (5) and (1) of
the Act.
RECOMMENDED ORDER
Upon the basis of the above findings of fact and conclusions
of law, and upon the entire record in the case, it is
recommended that the complaint herein, as amended, be
dismissed.
44 See fn. 10, supra.