Savoy Laundry, Inc.

National Labor Relations Board - Board Decisions

May 24, 1962

137 N.L.R.B. 306 (N.L.R.B. 1962)

306 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
APPENDIX
NOTICE TO ALL EMPLOYEES
Pursuant to the Recommendations of a Trial Examiner of the National Labor
Relations Board, and in order to effectuate the policies of the National Labor
Relations Act, we hereby notify our employees that:
WE WILL, if requested to do so by Local 223, of the International Ladies'
Garment Workers' Union, sign and execute forthwith a collective-bargaining
contract with Local 223 incorporating the terms of our previous agreement.
If no such request is made, WE WILL, upon request,, bargain collectively
with Local 223 of the International Ladies' Garment Workers' Union, as the
exclusive representative of our employees in the following appropriate unit with
respect to rates of pay, wages, hours of employment, and other terms and
conditions of employment, and, if an agreement is reached, embody such
agreement in a signed contract. The appropriate unit is:
All production employees at the Waterbury plant, exclusive of office
clerical employees, maintenance employees, professional employees, ship-
ping employees, order pickers, factory clerical employees, guards, and all
supervisors as defined in Section 2(11) of the Act.
WE WILL NOT by refusing to bargain with the collective-bargaining repre-
sentative of, our employees, by repudiating agreements reached in collective
bargaining, or by refusing to sign or execute collective-bargaining contracts on
which agreement has been reached, by engaging in threats of reprisal in em-
ployment, or threats to close or to move the plant, or promises of benefit, or
by making unilateral changes in employment conditions without consulting the
collective-bargaining representative, or in any other manner interfere with',
restrain, or coerce our employees in the exercise of their right to self-organization,
to form labor organizations, to join or assist Local 223 of the International
Ladies' Garment Workers' Union, or any other labor organization, to bargain
collectively through representatives of their own choosing, and to engage in
other concerted activities for the purposes of collective bargaining or other
mutual aid or protection as guaranteed in Section 7 of the Act, or to refrain
from any and all such activities.
All our employees are free to become or remain, or to refrain from becoming
or remaining, members of Local 223 of the International Ladies' Garment Workers'
Union, or any labor organization of their own choice, or to designate such labor
organization. as their collective-bargaining representative.
WATERTOWN UNDERGARMENT CORPORATION,
Employer.
Dated------------------- By-------------------------------------------
(Representative) (Title)
This notice must remain posted for 60 days from the date hereof, and must not be
altered, defaced, or covered by. any other material.
Savoy Laundry, Inc. and Food , Beverage and Express Drivers
Local Union No. 145, International Brotherhood of Teamsters,
Chauffeurs , Warehousemen and Helpers of America . Case No.
2-CA-8082. May 24, 1962
DECISION AND ORDER
On February 7, 1962, Trial Examiner Ramey Donovan issued his
Intermediate Report in the above-entitled proceeding, finding that the
Respondent had engaged in and is engaging in certain unfair labor
practices and recommending that it cease and desist therefrom and
137 NLRB No. 21. ,
SAVOY LAUNDRY, INC, 307
take certain affirmative action, as set forth in the Intermediate Report
attached hereto. Thereafter, the Respondent and the General Counsel
filed exceptions to the Intermediate Report and supporting briefs.
Pursuant to the provisions of Section 3 (b) of the Act, the Board has
delegated its powers in connection with this case to a three-member
panel [Chairman McCulloch and Members Fanning and Brown].
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 Intermedi-
ate Report, the exceptions and the briefs, and the entire record in the
case, and hereby adopts the findings,' conclusions, and recommenda-
tions of the Trial Examiner with the following modifications.
ORDER
Upon the entire record in this case, and pursuant to Section 10(c)
of the National Labor Relations Act, as amended, the National Labor
Relations Board hereby orders that the Respondent, Savoy Laundry,
Inc., Stratford, Connecticut, its officers, agents, successors, and assigns,
shall :
1. Cease and desist from :
(a) Discouraging membership in Food, Beverage and Express
Drivers Local Union No. 145, International Brotherhood of Team-
sters, Chauffeurs, Warehousemen and Helpers of America, or in any
other labor organziation of its employees, by discharging or in any
other manner discriminating in regard to their hire or tenure of em-
ployment or any term or condition of employment.
(b) Granting wage increases to its employees in order to under-
mine the Union's authority and the rights of the employees to bar-
gain through an exclusive bargaining agent.
(c) Refusing to bargain collectively with the above-mentioned
Union as the exclusive representative of all the employees in the fol-
lowing appropriate unit :
All production and maintenance employees at Respondent's Strat-
ford, Connecticut, plant, excluding office clerical employees, profes-
(a) We find merit in the exception of the General Counsel to the finding of the Trial
Examiner that 21 employees were discharged . The record shows that the complaint was
amended at the hearing to include the name of Alice Robinson and to allege that 22 em-
ployees were discriminatorily discharged As the Trial Examiner has found that the
Respondent terminated the employees named in the complaint , and his failure to include
the name of Alice Robinson is an inadvertent omission , we shall include the name of Alice,
Robinson in our Order.
(b) Also, the General Counsel excepted to the Trial Examiner ' s failure to indicate one
the chart in the Intermediate Report that Agnes Fields signed a union card , was on strike„
and was discharged We correct the omission
(c) The General Counsel excepted to the Trial Examiner's failure to include in the
Recommended Order any requirement that Respondent cease and desist from granting uni-
lateral wage increases . As the record supports a finding that the Respondent violated
Section 8 ( a) (5) of the Act by granting unilateral wage increases , we so find and shall
include an appropriate cease-and-desist order
308 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
sional employees , watchmen, guards , drivers, and supervisors as de-
fined in the Act.
(d) In any other manner interfering with, restraining , or coercing
its employees in the exercise of the right of self-organization , to form
labor organizations , to bargain collectively through representatives of
their own choosing , and to engage in any other concerted activities
for the purpose of collective bargaining or other mutual aid or pro-
tection, or to refrain from any and all such activities , except as author-
ized in Section 8(a) (3) of the Act.
2. Take the following affirmative action which the Board finds will
effectuate the policies of the Act :
(a) Take reasonable and businesslike steps to resume its wholesale
shirt operations on a scale comparable or equivalent to such opera-
tions as conducted by Respondent in the period prior to February 20,
1961.
(b) Offer reinstatement to their former or substantially equivalent
jobs, as available , to the following employees:
Lucille Wright Margaret Simpson
Hattie Dawson Easter Mae Byrd
Elaine Anderson Alice Robinson
Jessie Banks Hattie Moore
Agnes Fields Nazie Ree Bobo
Lola Sanders Lola Rodriguez
Eliza Wright Anna Barnes
Betty Lou Thigpen Sherry Tutt
Sarah Fernandes
and make them whole for any loss of pay suffered by reason of the
discrimination against them , from the date of their discharge on
February 23 or 24, 1961 , to the date of the offer of reinstatement or
until such time as each secures, or did secure, substantially equivalent
employment with another employer , less any intermediate earnings.
(c) Create a preferential hiring list containing the names of any
employees above-named for whom there are not sufficient job openings
and, as job openings occur thereafter , offer reinstatement to said em-
ployees to their former or substantially equivalent jobs. The Re-
spondent shall notify the Union and the listed employees of the
establishment of such list.
(d) Make whole Bertha Jones, Rosetta Madison, Elsie Rucker,
Dorothy Teasley, and Ethel Whitley for any loss of pay suffered by
reason of the discrimination against them , from the date of their
discharge on February 23 or 24, 1961 , to the date of their reinstate-
ment, less any intermediate earnings.
(e) Bargain collectively , upon request, with Food, Beverage and
Express Drivers Local Union No. 145, International Brotherhood of
Teamsters , Chauffeurs , Warehousemen and Helpers of America, as
exclusive bargaining representative of its employees , and, if under-
SAVOY LAUNDRY, INC. 309
standing be reached, embody such understanding in a signed
agreement.
(f) Preserve and, upon request, make available to the Board and its
agents, for examination and copying, all payroll records, social se-
curity payment records, timecards, personnel records and reports, and
all other records necessary to determine the amounts of backpay due
under the terms of this Order.
(g) Post at its Stratford, Connecticut, plant, copies of the notice
attached hereto marked "Appendix." 2 Copies of said notice, to be
furnished by the Regional Director for the Second Region, shall,
after being duly signed by Respondent's representative, be posted
immediately upon receipt thereof, and be maintained by it for 60
consecutive days thereafter, in conspicuous places, including all places
where notices to employees are customarily posted. Reasonable steps
shall be taken to insure that said notices are not altered, defaced, or
covered by any other material. Mail copies of said notices, signed by
Respondent's representative, immediately upon receipt thereof to the
Union and to each of the listed employees.
(h) Notify the Regional Director for the Second Region, in writ-
ing, within 10 days from the date of this Order, what steps the
Respondent has taken to comply herewith.
IT IS FURTHER ORDERED that the Board reserves to itself the right
to modify the backpay and reinstatement provisions of this Order, if
made necessary by circumstances not now apparent.
2 In the event that this Order is enforced by a decree of a United States Court of
Appeals , there shall be substituted for the words "Pursuant to a Decision and Order" the
voids "Pursuant to a Decree of the United States Court of Appeals , Enforcing an Order"
APPENDIX
NOTICE TO ALL EMPLOYEES
Pursuant to a Decision and Order of the National Labor Relations
Board, and in order to effectuate the policies of the National Labor
Relations Act, we hereby notify our employees that:
WE WILL NOT discourage membership in Food, Beverage and
Express Drivers Local Union No. 145, International Brotherhood
of Teamsters, Chauffeurs, Warehousemen and Helpers of Amer-
ica, or in any other labor organization of our employees, by dis-
charging or discriminating against them in regard to their hire
and tenure of employment.
WE WILL NOT grant unilateral changes in wages of our employ-
ees without consulating and bargaining in advance with the fore-
going labor organization.
WE WILL NOT in any other manner interfere with, restrain, or co-
erce our employees in the exercise of the right of self-organization,
310 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
to form labor organizations, to join or assist the above-named
Union, 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 as guaranteed in Section 7 of
the Act, or to refrain from any and all such activities, except as
authorized in Section 8(a) (3) of the Act.
WE WILL take reasonable and businesslike steps to resume our
wholesale shirt operations on a scale equivalent or comparable to
such operation prior to February 20, 1961.
WE WILL offer reinstatement to their former or equivalent jobs
as available to the following employees :
Lucille Wright Sarah Fernandes
Agnes Fields Margaret Simpson
Hattie Dawson Sherry Tuft
Elaine Anderson Easter Mae Byrd
Jessie Banks Hattie Moore
Alice Robinson Nazie Ree Bobo
Lola Sanders Lola Rodriguez
Eliza Wright Anna Barnes
Betty Lou Thigpen
WE WILL create a preferential hiring list containing the names of
any employees aforenamed for whom there are not sufficient job
openings and as job openings occur we will offer reinstatement to
these employees to their former or substantially equivalent jobs.
WE WILL make whole the above-named employees for any
loss of pay from the date of their discharge on February 23 or 24,
1961, to the date of the offer of reinstatement, less any intermedi-
ate earnings.
WE WILL make whole the following named employees for any
loss of pay from the date of their discharge on February 23 or 24,
1961, to the date of their reinstatement, less any intermediate
earnings:
Bertha Jones Dorothy Teasley
Rosetta Madison Ethel Whitley
Elsie Rucker
WE WILL make whole for any loss of pay any employee named in
the fourth preceding paragraph, above, for whom no job openings
are available that are the same or substantially equivalent to
their former jobs and who have not been offered reinstatement, by
paying her a sum of money equal to the amount she would nor-
mally have earned as wages from the date of her discharge on
February 23 or 24, 1961, until such time as she secures, or did
secure, substantially equivalent employment with another em-
ployer, less any intermediate earnings.
SAVOY LAUNDRY, INC. 311
WE WILL bargain, upon request, with Food, Beverage and Ex-
press Drivers Local Union No. 145, International Brotherhood of
Teamsters, Chauffeurs, Warehousemen and Helpers of America,
with respect to the unit consisting of all production and main-
tenance employees at our Stratford, Connecticut, plant, excluding
office clerical employees, professional employees, watchmen,
guards, supervisors, and drivers.
SAVOY LAUNDRY, INC.,
Employer.
Dated---------------- By-------------------------------------
(Representative ) ( Title)
This notice must remain posted for 60 days from the date hereof,
and must not be altered, defaced, or covered by any other material.
Employees may communicate directly with the Board' s Regional
Office, 745 Fifth Avenue, New York, New York, Telephone Number
PLaza 1-5500, if they have any question concerning this notice or com-
pliance with its provisions.
INTERMEDIATE REPORT
STATEMENT OF THE CASE
Upon a charge filed on August 4, 1961, by Food, Beverage and Express Drivers
Local Union No. 145, International Brotherhood of Teamsters, Chauffeurs, Ware-
housemen and Helpers of America , herein called the Union, and upon a complaint
issued by the General Counsel of the National Labor Relations Board on September
29, 1961, a hearing was held before Ramey Donovan the duly designated Trial
Examiner , at Stratford , Connecticut , on November 8, 15, 16, and 17, 1961. All
parties were represented at the hearing.
The complaint alleges that all production and maintenance employees of Respond-
ent, employed at its Woodend Road plant in Stratford , Connecticut , exclusive of
office clerical employees , professional employees , watchmen , guards, and super-
visors, constitute an appropriate bargaining unit and that since January 27, 1961,
a majority of employees in said unit have been represented by the Union as their
exclusive bargaining agent. It is alleged that after recognizing the Union as the
exclusive bargaining agent of its employees Respondent shut down and discontinued
its wholesale shirt laundry operations without prior notice to the Union and termi-
nated 22 named employees , 5 of whom Respondent subsequently reinstated. The
terminations and refusals to reinstate are alleged to be attributable to the employees'
union activities . Further allegations are that on described dates Respondent uni-
laterally changed wage rates of various employees in the unit without notice to the
Union. The alleged purpose of the aforedescribed discharges, failure to reinstate,
and unilateral changes in wages was to undermine the Union and to destroy its
majority status Respondent's conduct is alleged to be violative of Section 8(a)(1),
(3),and ( 5) of the Act.
In its answer Respondent denied the aforedescribed allegations in the complaint.
Both the General Counsel and the Respondent filed briefs with the Trial Ex-
aminer and these have been carefully considered.
Upon the entire record, and from my observation of the witnesses , I hereby make
the following:
FINDINGS OF FACT AND LEGAL CONCLUSIONS
7. THE BUSINESS OF THE RESPONDENT
At all relevant and material times Respondent has maintained its principal office
and place of business at Woodend Road in Stratford, Connecticut, where it is en-
gaged in performing wholesale, retail , and related laundry services.
Both in the year 1960 and in the year 1961 Respondent , in the course of its
business , purchased and caused to be transported and delivered to its plant, uni-
312 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
forms, linens, and other goods and materials valued in excess of $50,000 of which
goods and materials valued in excess of $50,000 were transported and delivered
to its plant in interstate commerce directly from States of the United States other
than the State in which it is located, and were transported and delivered to it, and
received from other enterprises, including inter alia Buckley Bros., located in the
State of Connecticut, each of which other enterprises had received the said goods
and materials in interstate commerce directly from States of the United States
other than Connecticut.
Respondent is and has been at all times material herein an employer engaged in
commerce within the meaning of the Act.
H. THE LABOR ORGANIZATION
The Union, aforedescribed, is a labor organization within the meaning of Section
2 (5) of the Act.
III. THE ALLEGED UNFAIR LABOR PRACTICES
The Facts
1. Savoy's operations
Savoy is a family corporation whose sole stockholders and officers are the brothers
Stephen, Rudolph, Orlando and Frank Vazzano. The Vazzano brothers and their
father, Joseph, constitute the board of directors. Savoy's operation is housed in a
one-story building owned by the Vazzano brothers operating as the Vazzano Realty
Corporation.
The record indicates that Savoy has been in business at least 20 years and, in
the period prior to February 20, 1961, Savoy rendered three types of services. These
were: a retail household service that involved house-to-house pickup and delivery
of household laundry, including shirts, underwear, and other family laundry that
Savoy washed and finished as required; there was also a wholesale shirt service
whereby Savoy picked up shirts from drycleaning establishments and hand laundries,
such as Chinese laundries, and washed and finished the shirts for these wholesale
customers. A few of these wholesale shirt accounts were independent laundry
routemen who had their own customers and who had their shirt work performed by
Savoy. Another type of work engaged in by Savoy was a linen supply service
wherein Savoy supplied sheets, towels, aprons, shirts, and work uniforms to restau-
rants, hotels, motels, beauty parlors, barbershops, and factories, delivering the
clean items of apparel, and picking up soiled items and laundering and finishing the
same . Generally, Savoy owned the articles furnished to its linen service customers
but in some instance the customers owned the articles which Savoy laundered
for them.
The Vazzano brothers, aforedescribed, actively manage the entire Savoy operation.
Although one brother may assist in any aspect of the plant operation as the need may
arise, they generally supervise the following types of activities: Stephen manages the
office (located on the premises) and the paper work entailed in the business and he
also functions as a salesman for new accounts; Rudolph testified that he supervises
the production operation, including the receiving room, where all articles coming to
the plant are received; the washroom, where all articles handled by Savoy are
washed; flat work (e.g, sheets); shirt pressing, wrapping, and sorting; he also super-
vises wholesale drivers and retail household drivers; the principal type of produc-
tion work that Rudolph supervises relates to shirts; Orlando is also engaged in the
supervision of production as a cosupervisor or assistant to Rudolph; Frank Vazzano,
assisted by a driver supervisor, supervises and directs the linen supply drivers as well
as inventory and routing.
Without describing in detail the actual production work at Savoy it can be said
that the various work that comes to the plant is received in the receiving room and is
sorted, marked, and recorded by employees; the laundry is placed in receptacles and
is taken to the section of the plant known as the washroom where there are four
washing machines; the laundry is loaded in a washing machine according to weight,
there being no specialization of washing machines as to what is washed therein, i.e.,
there is no machine that washes only household retail shirts as distinguished from any
other type of laundry; after the laundry is washed it is placed in other machines that
damp dry it and thereafter it is sorted and assembled for further processing; all
shirts are pressed on four pressing machine units which. prior to February 20, 1961,
were operated by two three-girl teams of "shirt pressers" and two four-girl teams of
"shirt pressers"; wearing apparel, such as underwear and related articles, is pressed
on a pressing machine operated by a "presser"; flat work is ironed on large flat work
SAVOY LAUNDRY, INC. 313
ironers, also known as mangles; uniforms are pressed on pressers operated by two
"coat pressers"; following the various aforedescribed finishing operations, the articles
are wrapped or packaged and are ultimately delivered to customers by Savoy's
drivers in Savoy trucks.
2. Union organizing
On January 25, 1961, Margaret Simpson, a shirt presser employee of Savoy,
contacted Cleary, secretary-treasurer of the Union, and asked about joining the
Union On January 27 and 28, a total of 27 employees came to the union office
and signed union authorization cards. One more employee signed a card on February
2, 1961.
The morning of January 30, 1961, Byrd, a shirt presser employed by Savoy for
many years, reported for work about 8 a.m. which was approximately 1 hour later
than her regular starting time. Over the years Byrd's record for tardiness had been
bad and when she came in late on January 30, Orlando Vazzano told her that she
was discharged for coming in late.' Stephen Vazzano concurred in the discharge.
When the other girls saw Byrd crying as she came through the plant to pick up her
work clothes they asked her what had happened. Byrd said she had been discharged
for coming in late. Considerable commotion ensued among the female employees
and many of them stopped working as they gathered around Byrd, or Orlando and
Stephen Vazzano. One or both of the Vazzanos told the girls to go back to work or
to get out of the plant. When one girl suggested to Stephen Vazzano that the girls
would resume work if he put Byrd back to work, he spoke to Byrd and endeavored
to have her return to work. She refused to do so. Stephen again told the girls to go
back to work. He stated that he had gone along with a union before but that he
was not going along with it this time.2 Addressing Hattie Moore, one of the shirt
pressers, he told her that she in particular had complained in the past about having
union dues deducted from her pay but Moore denied that this was so. Within about
10 or 15 minutes in the period shortly after 8 a.m., substantially all the employees
who had signed union cards and who had stopped work left the plant and stood
outside. Either on that day or the following morning the plant was picketed
by employees who had been involved in the incidents of January 30 described
hereinabove.3
Having been notified by the employees of the occurrences on January 30, Cleary
and Heanue, a business representative of the Union, came to the Savoy plant on
January 30 They went to the office, identified themselves and a conversation be-
tween Cleary and Stephen Vazzano then ensued Although not in exact agreement
as to everything that was said, the three participants above referred to did not vary
substantially in their versions of what occurred. I find that Cleary said he repre-
sented a majority of the employees and had authorization cards signed by them. He
said in substance that he would like to discuss what had occurred on that day (January
30) Vazzano replied that there was nothing to discuss and that as far as he was
concerned the employees who walked out had quit their jobs. Although asked, by
Cleary, Vazzano refused to name his attorney. The union representatives left after
being unsuccessful in discussing matters with Vazzano or in securing the name of an
attorney with whom they could discuss the situation.
On January 31, 1961, the Union filed an unfair labor practice charge, dated
January 30. against Savoy with the Connecticut State Board of Labor Relations, here-
inafter called the State Board. The charge alleged that Byrd had been discriminato-
rily discharged for union activities and the subsequent events relating to the other
employees on January 30 were also set forth. On February 3, 1961, the Union
filed a petition for certification as collective-bargaining agent of the Savoy employees
with the State Board. The petition was dated February 2. The State Board scheduled
a consolidated hearing on the charge and the petition for February 15, 1961.
'The events of January 30 were described by employee witnesses Margaret Simpson,
Lola Rodriguez, Eliza Wright, Easter Byrd, Sarah Fernandes, and by Stephen Vazzano
I have synthesized the testimony of the various witnesses as to what was said and done
on January 30, adopting and crediting or rejecting various aspects of testimony
2 The reference to a prior union apparently referred to a period some years previously
when another union had represented the Savoy employees
3 More precise information as to the individual employees who had signed cards for the
Union and who participated in the walkout or strike and the employees who did not par-
ticipate is set forth at a later point in this report together with other pertinent data as
to their subsequent employment history.
The January 1961 events are beyond the Section 10(b) period of the August 4, 1961,
charge and are referred to herein simply as background and as part of the overall picture.
314 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
3. Collective bargaining
About February 3, 1961, Cleary received a telephone call from Jacobson who
identified himself as attorney for Savoy. Jacobson asked what the problem was and
Cleary told him it was a matter of representation and that he had signed up a majority
of the employees and wanted recognition as bargaining agent. Jacobson said that he
would talk to the Vazzanos and would be in touch with Cleary.
Immediately before the State Board hearing, scheduled for February 1S, Jacobson
again called Cleary. Jacobson said he thought the matter could be straightened out
if Cleary would meet with him that morning before the hearing. Accordingly, that
morning Cleary and Heanue and another union business representative met with
Jacobson and Stephen Vazzano.
Cleary testified credibly that at the inception of the February 15 meeting Respond-
ent's representatives inquired as to what the Union wanted. Cleary said at that point
he was interested in having the Union recognized as the bargaining agent for the
plant employees. After some discussion of various categories of employees it was
agreed that a card check would be made by Gaspic, an agent of the State Board who
was also the secretary of that agency. Gaspic had entered the meeting sometime
after it had commenced. Cleary produced the authorization cards that he had
previously secured from the employees, together with a list of the names on the
cards. The signed cards were checked by Gaspic and Stephen Vazzano against the
Savoy payroll and W-2 tax forms. Vazzano conceded the authenticity of the cards 4
There was discussion of various categories of employees who worked at Savoy and
the Union stated that it was not interested in the drivers. The four Vazzano brothers
were concededly supervisors and there was also discussion about the possibly super-
visory status of a man who worked in the washroom.
At the February 15 meeting the Union and Savoy entered into and signed an
agreement whereby Savoy recognized the Union as the sole bargaining agent for
shirt pressers, feeders, folders, floor workers, mangler operators, and press opera-
tors; it was provided that Savoy would not discriminate against employees because
of union membership or union activities and would negotiate and sign a contract
with the Union retroactive to February 20, 1961, including a union-security clause.
It was further agreed that all employees would return to work on Monday, Febru-
ary 20, and that all employees, hired on or after January 30 to replace regular em-
ployees, would be dismissed by February 20 .5
By agreement of all concerned the State Board hearing of February 15 was post-
poned indefinitely. It was agreed that the picketing cease and this was carried out.
A further understanding was that Heanue would accompany the returning employees
on February 20 and advise them that they were returning to their old jobs and that
they should cooperate with their employer and harbor no resentment. Cleary and
Stephen Vazzano agreed to begin contract negotiations on the following day,
February 16.
On Thursday and Friday, February 16 and 17, Cleary, Heanue, Jacobson and
Stephen Vazzano, the latter sometimes accompanied by his brother Orlando, and/or
some other brother, negotiated concerning the terms of a contract. Cleary had
brought copies of a contract that the Union had with the Zwerdling Baking Com-
pany and the parties used their respective copies of this contract as a general model
as to format and customary contract provisions Going through the model con-
tract article by article the parties agreed on many provisions; some articles of the
Zwerdling contract were found to be inapplicable to a laundry; other articles were
modified.
By the afternoon of February 17 the Union and the Employer were in agreement
on substantially all contract terms except direct wages and wages had not as yet been
discussed Among the contract provisions that had been discussed and resolved was
that of seniority. In the Zwerdling contract seniority was on a departmental basis.
Cleary testified credibly that during the February 16 and 17 negotiations Stephen
Vazzano opposed departmental seniority, pointing out by way of example that the
shirt pressers were difficult to secure and that they could perform practically any
'The testimony of Cleary , Gaspic, and Vazzano is in substantial agreement regarding
the February 15 meeting
As we have seen , a walkout or strike had taken place on Tannery 30 The strikers
remained away from work from that date until February 20 and picketing of the plant
took place Between January 30 and February 20 Savoy had hired 22 new girls plus
1 girl who had worked for Savoy in the past but who was not working in the period
prior to the strike, plus 2 strikers who had returned after January 30 One girl who had
signed a union card on January 27 or 28 had not struck
SAVOY LAUNDRY, INC. 315
job in the plant if necessary; Vazzano said that the Company wanted overall plant
seniority so that it could retain its shirt pressers during slack periods by placing them
on other work instead of laying them off. Accordingly, the parties had agreed to
have plant rather than departmental seniority. I credit Stephen Vazzano's testimony
that tentative agreement had also been reached during the February 16-17 period
that Savoy would contribute $2.80 per employee to the union welfare fund, ap-
parently depending on the number of days per week that an employee worked 6
Toward the close of the February 17 session, Cleary orally submitted the union
wage demands to the Savoy representatives and it was agreed that Savoy would con-
sider the demands before the next negotiation meeting that was to commence at noon
on the following day, Saturday, February 18.
Stephen Vazzano testified that in the evening of February 17 he and his three
brothers met together. Since all the brothers had not fully participated in the negoti-
ations with the Union, Stephen stated that he brought them up to date concerning
the negotiations. He referred to commitments made on vacations, welfare fund
contributions, and other matters. He stated that the welfare fund involved 7 cents
per hour on the basis of a 40-hour week or a total of $2.80. According to Stephen,
he and his brothers then sat down and made a compilation of how many girls pressed
shirts, how many checked the shirts, how many sorted and wrapped the shirts, and
so forth, and figured out the cost. Stephen testified that the resulting figure showed a
loss. After going over the figures the brothers agreed to discontinue their wholesale
shirt service. Stephen testified that for several years he had been advocating the
discontinuance of wholesale shirt operations. At the hearing he was asked at this
point of his testimony whether at the meeting with his brothers he had also men-
tioned what the wage increase demands were that the Union had made that after-
noon He said that he did but went on to state that the cost compilation made by
himself and his brothers was on the basis of "our present [existing] rate of pay
. . we didn't take into consideration what the demands were, because at the present
rate of pay, we already figured we were losing money." 7
There is a sharp conflict in testimony between the witnesses regarding the Union's
wage demands and as to what was said and done at the February 18, Saturday,
meeting. The existing rates for the shirt pressers, the largest single classification in
the bargaining unit, was 15 cents per hour and 1 cent a shirt for each girl in the
four-girl pressing units and 20 cents per hour and 1 cent a shirt in the three-girl
On this point I have considered Vazzano's testimony and the third from the last sheet
in General Counsel ' s Exhibit No 9 which is a typewritten insert under article 17 and
some penciled notes of Jacobson on the back of the second from last sheet in the afore-
named exhibit
7 As we shall see, Savoy terminated 21 employees on February 23 and 24, and 21
alleged discrinnnatees are named in the instant complaint The Union filed a charge with
the State Board on February 24 alleging "lack of good faith after recognition of the
Union , . . [ and] the discharge of employees . using the above means to circumvent
the Union " The State Board held hearings on the January 30 and February 24 charges
on April 28 and May 5 , 15, and 25, 1981 . At the State Board hearings Savoy was repre-
sented by Burton Jacobson , Esq , and John Clancy, Esq ; Jacobson was a witness for
Savoy in the instant hearing and Clancy was counsel , together with Jacob Mandelbaum,
Esq
The Trial Examiner has taken official notice of testimony of witnesses at the State
Board hearings in considering their testimony at the instant hearing At the instant
hearing the parties specifically agreed to the incorporation into the record of the testi-
mony of Stephen Vazzano and Vines, Savoy's regular accountant Both Stephen Vazzano
and Vines also testified at the instant hearing Cleary and Rudolph Vazzano also testified
at both hearings . Since the entire transcript of hearings before the State Board was
physically a part of General Counsel ' s Exhibits Nos 21 and 24 , I have referred on occa-
sion not only to the testimony of Vines and Stephen Vazzano therein but also to the
testimony of Cleary and Rudolph Vazzano where I believed that they were testifying
accurately . The portions referred to were with reference to the same subject matters as
were present in the instant hearing and the witnesses' testimony was of the same general
tenor at both hearings , the issues regarding business operations being identical Such
portions of the witnesses ' testimony at the State hearing that I have referred to have not
been determinative of my findings and conclusions herein For the most part , the State
Board testimony supplied some supplementary information For instance , in the instant
transcript I found no statement regarding the weight of a shirt as compared with a sheet.
Rudolph Vazzano testified before the State Board regarding the respective weights and
I have used his figures thereon. I have made one passing reference to the fact of Orlando
Vazzano having testified at the State hearing.
316 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
units. Employees in other classifications in the bargaining unit, who were on an
hourly rate, apparently received $1, $1.05, or $1.15 per hour. Cleary testified
that his wage demands did not involve an hourly rate increase for the shirt pressers
but did ask an increase of two-thirds of a cent per shirt in the three-girl units and
one-half a cent per shirt in the four-girl units. For the hourly paid employees
Cleary states that he asked that the rates be raised to $1.171/z, $1.27, and $1.47,
respectively. During the course of discussions on the wage rates on February 18
Cleary testified that the Union dropped its demands and indicated its willingness
to accept one-third of a cent increase for the three-girl shirt units and one-fourth
of a cent increase for the four-girl units and that Cleary informed the company
representatives that he would recommend to the employees that they accept a 10-cent
increase across the board for the hourly paid workers. Cleary states that the
Company offered no increase for the shirt pressers and a 5-cent increase for the
hourly employees. He testified that the Company said nothing about going out of
the wholesale shirt business but admits that Jacobson did tell him at one point that
if the union demands for wage increases were too high his client would close down.8
Stephen Vazzano and Jacobson testified that the Union demanded 30 cents per
hour and 2 cents a shirt in the three-girl units and 25 cents per hour and 11/2 cents
for the four-girl units, plus increases in the hourly rates. It is denied that the Union
lowered its demands. The company witnesses also claim that on February 18 they
informed Cleary of the Savoy decision to discontinue processing wholesale shirts
because Savoy was losing money on this phase of its work. They further assert
that they informed Cleary of their willingness to discuss a contract for the girls
who would not be affected (terminated) by the discontinuance of wholesale shirt
work. According to Vazzano, Jacobson, and D'Amore, the latter being a partner
of Jacobson who was present on February 18, Cleary said he was not interested in
bargaining for such a small number of employees. Admitted by all concerned is
the fact that at the close of the February 18 session Cleary said that the girls who
had gone out on January 30 would report for work on Monday, February 20, pur-
suant to the February 15 agreement, previously described in this report. Stephen
Vazzano states, however, that in this connection he told Cleary that on Monday,
February 20, Savoy was notifying its wholesale shirt customers that it would no
longer handle such business; he also asserts that he told Cleary that the girls working
on wholesale shirts would be laid off by the end of that week.
As a result of my appraisal of the witnesses, and their testimony, I find that the
original union wage demands were as described by Jacobson and Vazzano with
respect to the shirt pressers and as described by Cleary regarding the hourly workers.
The Union's strength was principally among the shirt pressers and as a matter of
bargaining technique, if nothing more, I am unconvinced that Cleary's original
demands for the shirt pressers were as modest as he testified. However, I also
find that when confronted with the Company's refusal to offer any increase for the
shirt pressers, the Union did lower its demands and that the figures testified to by
Cleary were proposed by the Union. I also find that Savoy, having determined
prior to the February 18 session that it would discontinue its wholesale shirt busi-
ness, informed Cleary of this decision on February 18. There was little, if any-
thing, to be gained by not informing the Union of this decision. As a matter of
fact, if there was any possibility that Savoy would continue its entire wholesale shirt
operation it would apparently be on the basis of no-wage increase for the shirt
pressers. In this regard the strongest cudgel of bargaining that the Company could
use would be to advise the Union that it was contemplating the closing of its whole-
sale shirt service. On the other hand, if the decision to discontinue substantially
all wholesale shirt work was firmed up prior to the meeting, about the only reason
for concealment in such circumstances would normally be the employer's fear of an
immediate strike which would affect the employer prior to the target date for closing.
Such a fear was nonexistent in the instant case since the union employees had been
on strike since January 30 and the Employer thereafter had operated with non-
strikers and replacements and was prepared to continue to so operate until it dis-
continued the wholesale shirt work. Also, in view of the fact that the Union
ultimately reduced its demands for the shirt pressers to one-third of a cent increase
8 At the State Board hearing Cleary was asked by counsel for the Union whether there
was "anv discussion concerning the closing down of the shirt business by this Company "
He replied: "No Other than Mr Jacobson saying to me that if the price is too high
these people would close down." He also testified, " I told what the hourly pav work-
ers wanted . . the shirt girls asked for 6 cents per shirt . . . and, of course, this was
just completely out of the question and this was where the discussion took place about
going out of the shirt business. . . .
SAVOY LAUNDRY, INC. 317
for the girls in one group of units and one-fourth of a cent increase in the other
group of units, it is apparent that the Company had shown some rather potent
bargaining cards on February 17. I believe that the retreat on the Union's part was
attributable to the fact that the Company had stated its decision regarding discon-
tinuing wholesale shirts and the terminations of shirt pressers entailed thereby.
In connection with the foregoing, I view the Union's reference on February 17, to
having the strikers report for work on February 20, as due to the fact that (1) the
Company, on February 15, had agreed in writing to do so; (2) there was nothing
to be lost by having the girls rehired; and (3) there was always some possibility that
the Company would not carry through with the announced shutdown, particularly
after its regular employees had returned to work. From Savoy's standpoint also
there was nothing detrimental in rehiring the girls for a few days since it could
perform its work as well or better with them than with those new employees hired
during the strike; and Savoy had previously committed itself to do so.
4. The terminations
All the employees who had gone on strike on January 30 reported back to work
on Monday morning, Februar"" 20 . They were accompanied by Union Business
Representative Heanue 9 As agreed , Savoy, on February 20, discharged the replace-
ments who had been hired during the strike and the strikers resumed their former
work tasks on that same day. From no source did the returned employees hear
anything about an impending shutdown of the wholesale shirt service. On Febru-
ary 20 and 21, Savoy instructed its drivers to inform the various dry cleaners, hand
laundries , and other wholesale shirt customers that Savoy was discontinuing whole-
sale shirt operations and that the customers should take their work elsewhere. This
instruction was carried out. Savoy did not solicit or secure wholesale shirt work
thereafter . However, Savoy continued to do the wholesale shirt work for Avon
Cleaners, an establishment not located on Savoy's premises but which was owned
by Vazzano brothers . Stephen Vazzano also stated that Savoy continued to do
wholesale shirts for Superior Cleaners and Sanitary Cleaners, both organizations
being owned by one individual who also owned two other similar establishments.
According to Stephen , the reason why Savoy continued to do wholesale shirts for
the Superior complex was because of the flatwork it secured from the same source,
"-we felt that we should do his wholesale shirts because of the flatwork "
On February 23 and 24, Thursday and Friday , Savoy terminated the 21 female
employees named in the complaint . Their termination slips read , "Closing whole-
sale shirt department-lack of work ." When Rodriguez , an employee of Savoy for
48 years, received her termination paper she said, "God forgive Steve. . . ."
Frank Vazzano then took Rodriguez aside and , according to Rodriguez ' uncon-
troverted and credible testimony, said , "Lola, believe me, we like all you girls, but
you all just had the wrong union , that union is for truckdrivers , not for laundry."
When Cleary learned that the employees had been terminated he endeavored, with-
out success , to contact Jacobson, Savoy's attorney . The efforts to reach Jacobson
by telephone continued over a period of days but contact was not made.10 As we
have seen the Union filed an additional charge with the State Board, dated
February 24.
The next contact between the parties was brought about as a result of a telephone
call to Cleary in May 1961, from a Teamster Union representative in New York
City. By this means Attorney Mandelbaum of New York was introduced to Cleary,
Cleary met with Mandelbaum and Attorney Kenny on June 7.11 Mandelbaum said
that he would see to it that the Union secured a contract covering not only the plant
employees but also the drivers. At Mandelbaum's request Cleary acquiesced in a
postponement of the then current State Board hearings on the Union's charges. The
parties met again on June 13 . Mandelbaum's concrete offer was a 5-cent raise for
9 One employee, Golumbaski, who had signed a union card, had not gone on strike Two
other signers , Butler and Dawson, engaged in the January 30 strike but returned to work
before February 20.
10 Without being able to fix the time other than the fact that it apparently occurred
sometime between February and April 28, 1961, the latter being the date of the first State
Board hearing, Jacobson said that Cleary did speak to him on the telephone When Cleary
asked for further discussions on the labor problem Jacobson states that he told Cleary
that one of the Vazzanos was in Florida and since the brothers always acted in concert, it
was not feasible to meet.
11 Clancy and Kenny, a Bridgeport law firm, was representing Savoy in the State Board
hearings, apparently in conjunction with Jacobson By June 1961 and in the instant hear-
ing Savoy was represented by Mandelbaum and by Clancy and Kenny.
318 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
the hourly employees , and he showed Cleary some wage rates for drivers in a New
York contract . Cleary rejected the 5-cent proposal , saying that this was the same
proposal previously made by Savoy ; he commented that the drivers ' rates in the
contract produced by Mandelbaum were below the Bridgeport rates and Cleary
said he had a contract in Bridgeport with a "favored nations" clause . Mandelbaum
stated that if the Union rejected his offer he would bring the labor dispute before
the National Labor Relations Board and would defeat the Union in that forum
Thereafter Savoy moved the State Board to dismiss the union charges because of
lack of jurisdiction . Eventually , the Union filed the instant charge with the National
Labor Relations Board on August 4, 1961.
5. Analysis and conclusionary findings
a. Unit and majority
In conjunction with the question of appropriate bargaining unit and majority,
as well as with regard to alleged discriminatory terminations and alleged refusal
to bargain , it is appropriate to view the personnel complement of Savoy on January 30
to February 23, 1961. On the following list, the striker replacements hired
after January 30 were not included since they were all discharged on February 20
and were not in Savoy's employ on February 23 and 24 when the 21 employees
named in the complaint were terminated.12
Name Date of hire Classification
Wright, F ----------------------------- 2/19/60_________ Shirt presser , U-S-D.
Robinson , F--------------------------- 9/20/60--------- Do.
Thigpen , F ---------------------------- 12/15/60________ Do
Fernandez , F-------------------------- 1944__________- Do
Byrd, F 13----------------------------- 1947___________ Do
Moore, F------------------------------ 1/12/59_________ Do
Bobo, F------------------------------- 10/9/5__________ Do
Rodriguez , F-------------------------- 1943___________ Do
Banks, F------------------------------ 12/17/56________ Do
Simpson, F ---------------------------- 5/26/58_________ Do
Barnes , F----------------------------- 1951___________ Do.
Tutt , F------------------------------- 8/10/59--------- Do
Whitley, F---------------------------- 10/10/57________ Do
Jones , F------------------------------- 11/18/57________ Do
Fields, F ----------------------------- 9/3/58__________ Shirt shaker
Butler, F------------------------------ 5/54----------- Shirt wrapper, U-S 14
Presutto , F--------------------------- 1/18/60_________ Shirt wrapper
Teaskey, F---------------------------- 12/23 /57________ Shirt checker, U-S-D.
Anderson, F --------------------------- 9/19/60_________ Do
Sanders, F --------------------------- 9/23/59_________ Do
Wright , F----------------------------- 10/3/60_________ Do
G Miles, F-------------------------- 9/17/56--------- Shirt checker
L. Miles , F---------------------------- 6/10/57_________ Do
Kascal, F ------------------------------ 5/54----------- Shirt wrapper and folder
Golumbaski , F------------------------ 5/17/60_________ Floor girl and coat folder, U 13
Madison, F ---------------------------- 1/6/60---------- Floor girl, U-S-D.
Rucker, F ----------------------------- 5/13/57_ ________ Do
Wallace , F---------------------------- 12/15/58________ Wearing apparel presser, U-S
Bailey , F----------------------------- 4/27/59_________ Folder-ironer, U-S.
Garcia , F----------------------------- 7/15/56__ _______ Do.
i2 The Trial Examiner has used the following symbols on the list of employees, Last
names ire used except when more than one employee bears the same name ; "Al" and "F"
after each name denotes male or female , respectively ; "U" denotes signer of union cai d
on January 27 or 28; " S" denotes a January 30 to February 19 striker, absence of one
or both symbols indicates a nonunion employee and/or a nonstriker , "D" indicates an
employee discharged on February 23 or 24 ; absence of this symbol indicates an employee
who was not discharged
13 This employee was dischai ged for cause on January 30 ; she was offered i einstatonient
a short time thereafter on the same date but refused to return to work at^that time and
was apparently a striker
14 This employee returned to work during the strike and was not discharged.
15 This employee did not strike ; she was not discharged on February 23 or 24.
SAVOY LAUNDRY, INC. 319
Name Date of hire Classification
Long, F------------------------------- 5/17/56_________ Folder-ironer, U-S.
B Vazzano, F 16----------------------- 9/53---------- Office
Parnoff, F----------------------------- 1955___________ Mender and floor girl
Ilagan, M ----------------------------- 1942___________ Driver
Caputo, M ---------------------------- 5/19/54--------- Do
Golumbaski, M_______________________ 3/19/56 _________ Do
IIanlon ---------------- ---------------- 12/10/58-_______ Do
Edwards, M--------------------------- 7/22/60_________ Driver-supervisor
Renzo, M----------------------------- 1/16/61_________ Driver
Diaz, M ------------------------------- 5/14/54_________ Coat presser.
Copeland, M-------------------------- 5/60 ------------ Do
A Poremba, M_______________________ 6/12/54_________ Washroom
J Poremba, M________________________ 1939___________ Do
Ramoh, M---------------------------- 1/7/57__________ Do
Zihala, M ----------------------------- 9/19/60_________ Do
Giardini, M-------------------------- 3/28/60_________ Do
Barr, F-------------------------------- 1946___________ Floor girl
McCarthy, F-------------------------- 9/8/60_-_______ Do
Dawson, F--------------------------- 12/6/60_________ Floor girl, U-S-D 17
Pettway, F---------------------------- 1/17/61_________ Floor girl
Gulia, F------------------------------ ---------------- Temporary worker
R Vazzano, F------------------------- ---------------- Do
On the basis of the evidence I find the appropriate bargaining unit to be all produc-
tion and maintenance employees of Savoy, excluding office clerical employees, pro-
fessional employees, watchmen, guards, supervisors, and drivers The Union stated
and it was understood and agreed to by Savoy on February 15, 1961, that drivers
were not included in the unit. The drivers had evinced no interest in inclusion in
the unit; as contrasted with the inside plant workers, the drivel s spent substantially
all their time away from the plant; unlike the plant workers the drivers were paid
on a commission basis. The drivers were in fact a functionally distinct group.18
The production employees were part of an integrated laundry operation performing
the customary functions and duties of laundry workers. Although the Union's peti-
tion for certification filed with the State Board enumerated substantially all production
and maintenance employee job classifications except washroom workers, I am per-
suaded that the parties understood and agreed that the washroom employees were
included in the unit. When the recognition agreement was executed on February 15,
1961, it used the unit language that was set forth in the Union's petition. However,
Gaspic, agent of the State Board and its secretary, who participated in the February 15
conversations between the Union and Savoy, testified without contradiction that the
parties discussed and intended to include the washroom employees in the unit. He
stated that once the parties had resolved the question of whether one of the washroom
men was or was not a supervisor and had agreed to include him in the unit as a non-
supervisor ". . . there was no question of these people [washroom] being included
within the unit." Further, 100 percent exactitude in unit description language is not
a prerequisite to an otherwise valid request to bargain and minor variations in a unit
are not fatal to an otherwise appropriate unit.19
Within the purview of the foregoing considerations I find that by January 29, 1961,
the Union represented 28 employees in the appropriate unit of 43 employees. 20 Since
the strikers were employees on January 30 I find that the Union represented a major-
ity of the appropriate unit on that date. However, since January 30 was more than 6
months prior to the filing of the charge I consider it unnecessary to make a finding
whether on that date the Union made an appropriate demand for bargaining and
whether Respondent refused to bargain at that time. As of February 15 when Savoy
recognized the Union as the bargaining agent in the appropriatae unit and the strikers
to This employee is a sister of the Vazzanos
17 This employee returned to work during the strike ; she was discharged on Febru
ary 23 or 24
1s Bugle Coat, Apron & Linen Service, Inc, et al, 132 NLRB 1098
19 United Butchers Abattoir, Inc, 123 NLRB 946
20 In addition to the inclusions and exclusions discussed above, I have also excluded from
the unit two temporary employees. Weyerhaeuser Timber Co, 81 NLRB 472, 474-475;
Augusta Chemical Go, 124 NLRi3 1021, 1022; W. P. Fuller & Co, 122 NLRB 814, 816.
320 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
were prepared to return to work and Savoy had agreed to discharge all replacements,
I find that the replacements had been no more than temporary employees; I also find
that the strikers were employees and that the Union represented a majority in the
appropriate unit.21 The status of the Union as collective-bargaining agent continued
thereafter, including the February 20 to 23 period when the strikers were back at
work. Whether or not Savoy fulfilled its legal obligation to bargain with the Union
is intermeshed with the question of the legality of the discontinuance of the bulk of
the wholesale shirt operations and the consequent terminations. These matters will
now be considered.
b. The discontinuance of the bulk of the wholesale shirt business
It was Stephen Vazzano's testimony in the instant hearing, as described above,
that the four Vazzano brothers made computations on paper on the night of Febru-
ary 17 that convinced them that under their prevailing costs of processing wholesale
shirts Savoy was losing money on this aspect of its business; they thereupon either that
night or the following morning determined to close their wholesale shirt operations.
This decision regarding wholesale shirts therefore was made prior to the next meeting
with the Union, scheduled to start at 12 noon on February 18.
For some reason, unexplained, Stephen Vazzano when first testifying in the instant
hearing regarding the important events of February 17 and 18, made no mention
of Vines, Savoy's accountant for 20 years. The evidence adduced before the State
Board and Vines' testimony in both hearings convince me that Vines was consulted
and met with the Vazzanos on the morning of February 18. At that time he went
over the figures produced by the Vazzanos and concurred in the decision that whole-
sale shirt operations were being conducted at a loss and that the operation should be
discontinued 22
With a covering letter of March 7, 1961, Vines sent Savoy a two-page cost compila-
tion showing a loss on the wholesale shirt operation.23 The foregoing constituted
the documentation of Savoy's contention before the Connecticut State Board of Labor
Relations that it had discontinued its wholesale shirt operation and had terminated
employees because of economic reasons.
The reference in Vines' letter to a "time motion study" was explained by Vines at
the State Board hearing. When Vines met with the Vazzanos on the morning of
February 18 they gave him, on pieces of paper, various figures that they had com-
piled relating to the wholesale shirts. Vines said that Rudolph Vazzano had figured
out the normal production of the four shirt pressing units and the cost of the opera-
tion. Rudolph's testimony at the same hearing indicates that on February 17 he had
used direct labor costs and applied it to the number of employees working on shirts
and their production. In any event, this was the time-motion study that Vines testi-
fied he had referred to in his letter.
-As we have seen , one girl who had signed a union card did not strike , two others who
had signed union cards returned to work prior to the end of the strike Although it does
not necessarily follow that the three foregoing employees had repudiated the Union for
collective-bargaining purposes by reason of their aforedescribed actions (e g , stringent
personal economic requirements may have prompted an early return to work), the Union
still represented a majority in the unit if the number of union adherents was reduced
from 28 to 25.
23 Although not called as a witness by Respondent at the instant hearing (he was called
by the General Counsel), Vines was by no means a hostile witness toward his client, Savoy
He also stated that as far as he was aware, he was still the regular accountant of Savoy
23 The letter read as follows:
Recently you requested me to review cost figures that you prepared relating to the
operations of the wholesale shirt department.
As you know, the Company does not maintain cost figures of any of its operations,
nor are the costs in any way allocated to departments A study of the wholesale
shirt department was mentioned by several of the officers three years ago, and again
about a year and a half ago, but never completed because the officers were com-
pelled to do all kinds of work to complete their production and service schedules
Recently, a time motion study was made of the operations of the wholesale shirt
department and the figures which you prepared and which I have examined leads me
to feel that a reasonable attempt was made to ascertain a true picture of the costs
of operating this department.
As a result of this study, and the figures you have submitted, I feel that you are
justified in discontinuing all further operations of the wholesale shirt department
Furthermore , a continuation under its present status or any expanded method would
only result in a greater loss.
SAVOY LAUNDRY, INC. 321
The statement in the Vines' letter, that "A study of the wholesale shirt department"
had been adverted to by several Savoy officers on two occasions in preceding years
but was never completed because the officers were too busy, merits comment.
Vines' testimony on this point consisted of saying that two-unnamed Vazzanos "were
under the impression that there was a loss in earlier years" but another unnamed
Vazzano favored the continuance of the shirt work "so they postponed it and they
said they were busy and so on and so forth. . " 24
Stephen Vazzano, when testifying on direct examination by Respondent's counsel
at the instant hearing, undertook to give a complete account of the decision to dis-
continue wholesale shirts and the reasons therefor. He described how the Vazzanos
met on February 17 and 18 and how the decision to discontinue the aforementioned
operation was reached. He stated that the decision "was a God send because I
have been trying to do it for the last three or four years... .
Q. You mean amongst your brothers . . . you had been insisting for over a
period of three or more years?
A. Yes, sir.
Stephen was later asked:
Q. And amongst the remaining co-owners, were there one or more, one or
more or any who subscribed to your thinking?
A. No.
This witness also testified that on the night of February 17 when the brothers had
computed that wholesale shirts were being handled at a loss he remarked to his
brothers, ". . . you know, every year when I give papa the annual report, he is
always telling us we should make more money . . . maybe this is the answer to his
question."
In appraising all the foregoing evidence, the witnesses, and the record as a whole,
the following observations are in order. The testimony of Vines and his letter of
March 7, 1961, written to and quite apparently at the request of his client, Savoy,
seeks to convey a picture of the discontinuance of wholesale shirts as a normal busi-
ness move. The discontinuance is depicted as having been preceded by a time-motion
study and a history of an uncompleted cost study dating back 3 or 4 years in a
period when the owners were at all times sharply divided in opinion as to the desir-
ability of continuing wholesale shirts. Rudolph Vazzano, one of the owners, inti-
mately close to the entire shirt operation, particularly wholesale shirts, conveys a
picture of some 20 years in the business and an absence of anything unusual by way
of concern on his own part or on the part of anyone else about wholesale shirts.
This witness, in effect, describes the February 17, 1961, cost computation by himself
and his brothers as coming like a bolt from the blue in its revelation that they had
been handling wholesale shirts at a financial loss. Stephen Vazzano's projection is
that he was a lone advocate, over a period of years, for the discontinuance of the
wholesale shirts, presumably for economic reasons; his brother coowners were ap-
parently unaffected by Stephen's economic arguments until February 17, during the
negotiations with the Union.
As I view the evidence, Savoy was a relatively small corporation, family owned
and family managed. Between them the Vazzanos were intimately close to all phases
of the business. This was not a corporate giant with 30 plants scattered throughout
the country, producing a variety of diversified products with thousands of employees.
24At the State Board hearing Stephen Vazzano testified that he (3 years ago and 1i/.,
years ago) had mentioned to Vines his "desire" to make a study of "allocation of costs to
departments" but that such a study was never commenced until the night of February 17
At the hearing the reason given by Stephen for not making the study at an earlier date
was the fact that the brothers were too busy running the laundry business
Rudolph and Orlando Vazzano were the only Vazzanos, except for Stephen, who testified
at the State Board hearings Orlando did not testify regarding the February 17 decision
to discontinue wholesale shirts and his testimony makes no reference to any concern or
interest in a study of wholesale shirt costs by Stephen or anyone else in prior years
Rudolph was thoroughly familiar with the entire shirt operation, including, of course,
wholesale shirts. In his 20 years in the business lie testified that "we" first discovered
that we were losing money on wholesale shirts on the night of February 17 when he and
his brothers made the cost computation. Rudolph makes no mention of any suggested
study of wholesale shirt costs by Stephen or himself or anyone else prior to February 17.
Nor does he refer to any position taken by Stephen in the past regarding the wholesale
shirt business.
649856-63-vol. 137-22
,322 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
In such a large corporation costs and the state of any particular phase of the opera-
tions could only be known by means of a detailed and formal system of cost ac-
,counting. Savoy's owners, I believe, could and did determine rather readily during
the many years of Savoy's operation the state of the financial health of the business
Stated in its most simple form the financial picture was the gross income minus total
costs (everything that had to be paid out, including overhead) which would show
net income. As income-tax payers, if for no other reason, Savoy and the Vazzanos
were obviously aware of these facts.
However, Respondent contends that since Savoy did not maintain its books on a
.cost accounting basis with respect to each type of work that it performed, it did not
know until February 17, 1961, that it was losing money on wholesale shirts. But, in
a matter of hours on the evening of February 17, the four brothers with scrap paper
and pencil were able to make a computation of the income derived from wholesale
shirts, the costs to Savoy in producing such income, and to conclude that they were
losing money on such shirts. The details as to wholesale shirts was no mystery to
the Vazzanos and with such factual details in mind the computation was one of
elementary arithmetic. Aside from the demonstration afforded by the events of the
night of February 17, the Vazzanos' close familiarity with the details of their busi-
ness, including wholesale shirts, is clear when it is borne in mind that the cost ac-
counting reports submitted by two accountants, Vines on March 7, 1961, and Col-
man on November 7, 1961, were primarily based on figures and information supplied
by the Vazzanos to the accountants in oral conversations as well as upon the 1960
income-tax return, rather than upon original records and audits. What the account-
ant did was to set up the figures in a somewhat more elaborate and formalized man-
ner and to use accountancy formats and terminology.
The accuracy of the foregoing conclusion as to the firsthand knowledge of the
Vazzanos regarding wholesale shirt cost factors is borne out if we refer to some of
the items on the report of Colman, a certified public accountant 25 Testimony in the
record shows that Vazzanos, on February 17, knew that Savoy processed and sold
approximately 26 14,000 shirts a week and the approximate percentage of wholesale
shirts; they knew the approxmiate percentage of wholesale and retail shirts; they,
particularly Rudolph and Stephen, knew the labor picture on wholesale shirts-
they knew exactly how many employees pressed the shirts, how many checkers were
employed, how many washed, and how and what they washed and so forth; they
knew the wage rate of every employee working on the shirts; they could add, multiply,
and subtract; in short they knew their wholesale shirt productive labor costs; they
also knew the salary that each Vazzano was receiving; they knew the salary of the
one office employee, their sister, Beatrice; they knew the building rent they were
paying as Savoy to Vazzano Realty, owned by themselves; they were familiar with
utility bills and other expenses; they 27 knew how many trucks they had, the number
's Colman was not Savoy's regular accountant In fact, he had never performed any
work for Savoy prior to November 1961 With regard to the circumstances of his reten-
tion by Respondent, Colman was asked, "Isn't it a fact, Air Colman, that you knew that
the report was being prepared in order to justify the Respondent's contention in this pro-
ceeding that it was justified, on economical grounds, in discontinuing the wholesale shirt
operation 9" And lie answered, "I would say, yes"
,Colman's report will be examined at a later point as to reliability, accuracy, and re-
lated factors Briefly described, it consists of 10 pages, with the following table of con-
tents: "Letter of Transmittal , Exhibit A-Condensed statement of income and profit and
loss for year ended December 31, 1960-by Divisions ; Exhibit B-Statement of Income
and profit and loss-wholesale shirt division ; Schedule 1-Computation of sales-
wholesale shirt division; Schedule 2-Productive labor costs; Schedule 3-Laundry supply
costs . . ; Schedule 4-Packaging supply costs ; Schedule 5-Machinery deprecia-
tion ; Schedule 6-Collection, delivery and sales promotion expenses ; Schedule 7-Rent
expense, Schedule 8-Insurance expense, Schedule 9-Salaries, administrative and
maintenance "
='4 In using the term "approximately" I mean that they, offhand, could not say the exact
number but had an accurate enough idea of the number subsequently used by the
accountants
n Although all the brothers specialized in one or more particular phases of Savoy's
business, they also had a general knowledge and participated in some degree in all phases
of the business. While certain aspects of the business may not have been known precisely
by each brother, they jointly possessed such knowledge Stephen, moreover, the treasurer,
in charge of the office and books and financial affairs, as well as being close to plant pro-
duction and personnel, had a thorough overall knowledge of the business, including labor
costs, sales, prices, material, equipment, and overhead
SAVOY LAUNDRY, INC. 323
of drivers, the earnings of the drivers, the routes, the bills for gas and oil, and so
forth; they knew they had four shirt pressing machines, four washing machines, flat-
work ironers, and so forth; and they knew the cost of the machines and when they
were purchased.
Even without the confirmation supplied by what the Vazzanos were able to do by
way of computation on the night of February 17, it is apparent that they at all times
had, almost at their fingertips, all relevant cost data affecting wholesale shirt opera-
tions. The February 17 computation, although not produced at the hearing, quite
clearly was not confined to totaling sales income and subtracting therefrom only
productive labor costs and a few other simple items. Such a computation would show
a very substantial profit if we use the figures referred to by the Vazzanos in their
testimony and used by their accountants in their reports. In fact, the testimony
of the Vazzanos is that their February 17 computation, when originally made and then
modified on the same night, showed substantial loss figures, both higher than those
subsequently produced by Vines and Colman. The computation, therefore, was
apparently a fairly sophisticated one with allocations for overhead, depreciation, and
so forth. Nor is this surprising. The brothers were businessmen. They had been
in the business about 20 years. Stephen, particularly, as the treasurer, officeman, and
financial manager, had I believe, a very good knowledge of business costs and every-
thing pertaining thereto.
There is no basis for assuming that the Vazzanos acquired for the first time on
February 17 the aforedescribed information and the pertinent ability for determining
the financial status of their wholesale shirt operation. With regard to these matters
of information, knowledge, and ability, the situation was the same on February 17
as it was for many years previous. Nor am I persuaded that prior to February 17
Savoy was unaware of the profit-and-loss picture of its various operations. From
its inception Savoy charged a certain price for shirts, another price for towels, other
prices for each of the articles it laundered, including a specific price for a retail shirt
and another price (18 cents in 1960-61) for a wholesale shirt. Twenty years ago
the prices were not the prices of 1960. During the interval prices were changed
from time to time. There was a reason why the price of wholesale shirts in 1960
was -18 cents and not 17 or 16 or 19 cents. The prices of materials used in the
laundry changed from time to time Costs of machinery and trucks and utility
rates changed from time to time. Wage increases for employees were given over
the years. Decisions were made about whether a wage increase for employees
would or should be given this year or that year and whether it should be 2 cents
or 3 or 5 or 7 cents. These and many other factors were encountered and dealt
with by Savoy over the years. Savoy could not know what it would charge for
various services unless it knew its own costs and expenses; why did it charge 18
cents for wholesale shirts and not 17 or 19; or charge 25 cents for retail shirts and
not 24 or 26. The same is true of wage rates and wage increases and other
matters The Vazzanos, as I have previously pointed out, had the pertinent data,
information, and the arithmetical ability to compute their income, costs, and overhead
and I believe that in running their business, prior to February 17, 1961, they knew
the fiscal picture with regard to wholesale shirts as well as they knew the picture on
their other services.
Moreover, there is the question of what Stephen Vazzano was referring to and
talking about for 3 or 4 years when he was arguing to his brothers that wholesale
shirts should be discontinued. He surely had some reason for his position and he
.surely presented that reason. He did not advocate the discontinuance on the ground
that Savoy made too much money on wholesale shirts or that he was emotionally
or physically allergic to shirts that were processed at a wholesale price as distin-
guished from shirts processed at a retail price. He no doubt spoke as a businessman
and as the financial expert in the family. He either said that we are losing money
on wholesale shirts or that we are not making money on wholesale shirts or that we
are not making enough money on wholesale shirts. It is hard to believe that he
did not have facts and figures to cite in support of his position. If, on the first
occasion , Stephen could not or did not document his position, be had 3 or 4 years
when, as a minority of one, he would logically present a factual financial picture
to support his view and convince his brothers. Mustering the figures, as I have
shown, was well within his competence within a matter of hours. No accountant
was necessary for this arithmetical exercise.
While it cannot be determined from the record exactly what financial picture
,of wholesale shirts Stephen had presented to his brothers in advocating discontinu-
ance over the years, I am convinced that he did present such a dollar and cents pic-
ture. I also believe that it is reasonable to conclude that in view of Stephen's
experience and ability as both the financeman , the businessman, and operating
-official in a 3 to 4-year period, he, in substance, presented as good an income and
324 DECISIONS OF NATIONAL LABOR RELATIONS BOARD,
cost compilation and analysis, orally or on paper, as was presented on February 17.
But why did not Stephen's view as to discontinuance prevail until February 17,
1961? This cannot be answered with certainty. Perhaps it was felt that discon-
tinuance of wholesale shirts would lose other business that was profitable; 28 or
perhaps Stephen's cost picture with regard to eliminating wholesale shirts included
corresponding cuts in managerial salaries such as those of a brother or brothers
who devoted substantial time to wholesale shirts. What we do know, however, is
that Savoy continued its wholesale shirt business over the years and made no plans
for discontinuing it until, on February 17, 1961, it received the wage demands
of the Union.29
Since I believe, as previously stated, that the Vazzanos knew throughout the years
where they stood profit-and-loss wise on wholesale shirts as well as on linen supply
and other aspects, it is apparent that they were prepared to operate and did operate
wholesale shirts on such a basis. I do not believe that Stephen Vazzano and his.
brothers first learned of the wholesale shirt financial picture on February 17. At
this point, before discussing Colman's report, it is my opinion that if the wholesale
shirt picture was as portrayed by Colman, this picture was known in substance, if
not in Colman's detailed format, prior to February 17. If the wholesale shirt picture
was actually more favorable than portrayed by Colman, it, too, was known prior
to February 17. Finally, if the wholesale shirt picture as a matter of cost accounting
was as portrayed by Colman, it was a picture in which the net income of Savoy and
its owners could not be improved by eliminating wholesale shirts and this fact was
known by the Vazzanos.
Before considering the report of Accountant Colman, it may be noted, in con-
nection with some of the conclusions set forth above, that when over 20 employees
struck Savoy on January 30, 1961, and remained on strike until February 20, the
impact was felt particularly with respect to wholesale shirts. For instance, all 14
shirt pressers were among the strikers. Although, as previously stated, I am satis-
fied that the Vazzanos were aware of Savoy's financial picture with respect to whole-
sale shirts, as well as its other operations, no effort was made to close or to taper
off wholesale shirt operations on January 30 and immediately thereafter. This not-
withstanding the fact that Stephen Vazzano testified that on January 30 as far as
Savoy was concerned the employees who had walked out had quit and were no^
longer Savoy's concern. The situation was an obvious one for the discontinuance
of wholesale shirts if Savoy had been and was losing money on the wholesale shirt
operation or if discontinuance would improve the financial situation. Instead,
Savoy went to considerable effort to hire 23 new employees, plus rehiring 2 strikers,
and was in substantially the same position personnelwise as before the strike. During
this period Savoy had taken the position that it had nothing to discuss with the
Union and was apparently unimpressed that the Union was in a position to establish
itself as bargaining agent for the employees.
But, on the morning of the first State Board hearing, February 15, Savoy decided
to meet with the Union. The Union established its status as bargaining agent at
the meeting and Savoy recognized the Union at that meeting. It was agreed that
25 At the time of the hearing Savoy was still doing some wholesale shirts for stores that
also gave them amounts of flat work and this was the reason given at the hearing for the
continuance of some wholesale shirt work
19 The alternative view to my prior discussion of Stephen's advocacy of discontinuance
over the years, is to reject his testimony on this aspect and to conclude that he never made
such proposals In my view this would mean that although Stephen knew the business
status of wholesale shirts, it was such that it never prompted any advocacy of discontinu-
ance until February 17.
Accountant Vines, in testifying before the State Board in May 1961, stated:
. . . Stephen Vazzano frequently raised the point that they are losing money in the
wholesale shirt department. . . .. At another point, Vines was being asked about his
cost study. He said:
This is based upon a study of the wholesale department . . we were concerning
ourselves with the wholesale department . . .
e s s s s s s
Q. Why only wholesale?
A. Because that was the problem child they had
Q How did you know that without making an analysis of the entire shirt
department9
A That was not a question of my referring to figures, I knew it, we discussed it
numerous times It wasn't something that was a method that was just created and'
it went back a number of years.
SAVOY LAUNDRY, INC. 325
a contract would be negotiated and that the strikers would be reinstated and the
replacements terminated. There was no mention of discontinuing any operations.
Savoy, during the next few days, in fact agreed to a 7-cent an hour welfare fund
contribution for each employee, including of course those employees working
primarily on wholesale shirts. Stephen Vazzano, the chief company representative,
was aware of the financial picture of Savoy and of that of each of its operations.
Savoy had been under no obligation to agree to what was, in effect, a 7-cent increase
and I do not believe that it went along with the proposition without reconciling it
with its own financial status. Other Vazzano brothers in addition to Stephen were
participants in the negotiations. The parties, by the late afternoon of February
17, were in substantial agreement on all the terms of a contract, with the exception
of wages. Before the Union presented its wage demands towards the conclusion
of the February 17 meeting, the prospects for a contract appeared excellent. In
fact, it is difficult not to conclude that if the Union had made no wage demands or
possibly if the demands were of a token nature only, a contract would have been
concluded, at least if it is assumed that on February 15 to 17 the parties had been
negotiating in good faith.
As I have found, the initial wage demands of the Union were not inconsequential
and that evening, February 17, the Vazzanos decided that their wholesale shirt
financial picture was such that they would discontinue the operation. This decision
entailed the termination of virtually the entire union strength in the plant.
Since it is my opinion that Savoy was aware of the financial situation with respect
to its wholesale shirt operation prior to February 17 and had continued to operate
this particular activity over the years, the existing financial picture, whatever it was,
was not the determining factor in the discontinuance decision of February 17. The
financial approach was used, I believe, as the justification for a decision to avoid
consummation of a contract with the Union. The Respondent's desire to avoid
having the Union in its plant as a representative of the predominantly female
employees who had joined the Union was apparently due to the previously expressed
belief that the Teamsters Union was not appropriate for production workers in the
laundry business and to the belief that the Union was going to prove itself to be a
costly and troublesome factor in the plant operation. I believe that the Union's
wage demands of February 17, on top of the 7-cent payment to the union welfare
fund, triggered Savoy's thinking along these lines, assuming that prior to that point
Savoy had negotiated in good faith.
(1) Fixed costs and overhead and continuing costs
If we now approach the situation from a different aspect we consider Savoy's
contention that it was losing money in its wholesale shirt operations. The strongest
position of Respondent on this score is Accountant Colman's report of November
1961, postdating the February 17, 1961, decision of Savoy by about 8 months. At
this point, we will assume, arguendo, the accuracy and reliability of the report and
will confine ourselves to considering what conclusions may be validly drawn from
the report.
In this connection, it is my opinion, that our primary concern is not whether or
not as a matter of cost accounting Savoy was losing money on its wholesale shirts.
What is pertinent is whether the elimination of wholesale shirt operations increased
the net income of Savoy, i.e., the family owners of Savoy, or decreased the net
income and whether Savoy may reasonably be assumed to have been aware of such
important ultimate results. If a business eliminates a certain operation or depart-
ment it does not improve its financial position unless it eliminates as many of the
department's cost and overhead factors as possible. If the elimination of a depart-
ment makes possible the sale of the eliminated premises or the cessation of rental
payments on the previously occupied premises there is a saving. This is true if
existing profitable operations are expanded or new profitable operations take the
place of the eliminated operation. This is also true if the salaries of the depart-
ment manager as well as employees are eliminated. But where various items of
overhead and costs are not eliminated by the discontinuance of an operation, the
remaining operations must bear these burdens in addition to their own original
proportion of overhead and costs and net income may not improve or may
deteriorate.
Exhibit B of Colman's report lists production costs of the wholesale shirt opera-
tion. One of the items is machinery depreciation, $6.305.89. The machinery con-
sisted of the following: four pressing units, 90 percent of whose depreciation or
$3,240 was allocated by Colman to wholesale shirts. At the time of the State
Board hearing in May 1961 Savoy still had these four units and there is no evidence
in the instant bearing that this situation had changed Savoy in fact is still using
such units or some of them for its present wholesale shirt business, previously
326 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
described, and for household laundry such as retail shirts and for uniform shirts in
its linen service. Whether fully utilized or not, this machinery's entire yearly depre-
ciation in the amount of $3,600 is now, or should be, under Colman's approach, allo-
cated to Savoy's remaining operations. Colman's report allocates 34.8 percent of
other plant machinery's depreciation, or $3,065.89, to the wholesale shirt division.
With the elimination of the latter, the entire depreciation for this nonshirt machinery,
or $8,810.03, is now borne by the remaining operations.30
A listed production cost for wholesale shirts under the heading of productive labor
is "supervision (50% of one man) $7,000." This, of course, is a reference to one
of the Vazzano brothers (or 25 percent of each of two brothers) who received a salary
of $14,000 each. There is no evidence that any of the owners received a cut of
$7,000 in salary with the expiration of wholesale shirts so this cost is borne by the
remaining operations of Savoy. Another productive labor cost assigned to wholesale
shirts is "2 employees-washing, $7,228." None of the employees employed in
washing at Savoy were terminated when the wholesale shirt operations were dis-
continued and as far as appears they continued to be employed in washroom work.
Their salary therefore is to be allocated to the remaining Savoy operations in the
period after the wholesale shirt termination.
An item listed by Colman under production costs of the wholesale shirt operation
was entitled, "Collection, Delivery & Sales Promotion Expense." Under this appears
truck expense, including depreciation allocated to wholesale shirts in an amount of
34 8 percent, based on sales volume. Since,the depreciation figure is $3,107.29, the
wholesale shirts bear about $1,081. At the time of the May 1961 State Board
hearing Rudolph Vazzano testified that Savoy still owned the wholesale shirt truck
although it was not being used. Therefore, the truck depreciation item had not been
eliminated by May 1961 as a result of the wholesale shirt discontinuance. A further
item under the above cost heading is "Salaries-officer (10% of one man), $1,400"
This reference is to one of the Vazzano brothers, each of whom received a salary
of $14,000. With the elimination of wholesale shirts, it is doubtful, and there is
no contention or evidence to show, that one of the Vazzano's took a $1,400 cut in
salary.
Under "Overhead & Administrative Expenses" Colman lists rent of $10,000, with
35 9 percent, $3,590, allocated to wholesale shirts. With the elimination of whole-
sale shirts the full $10,000 rental expense was borne by the remaining operations 31
Also listed under the above heading as wholesale shirt overhead and expense is,
"Salaries-officer (50% of one employee) $1,560." Since this employee is Beatrice
Vazzano, a sister of the owners, it is unlikely, and there is no evidence to show,
that $1,560 was saved by discontinuing wholesale shirts. The employee's entire
salary of $3,120 remained as overhead upon the remaining business. Another item
allocated to wholesale shirts under "Administrative and Maintenance Salaries" is
$13,441 50, being 34 8 percent (based on sales volume) of such salaries not other-
wise applied. These salaries are those of the Vazzano brothers, plus a $5,025
salary of employee Paremba who is the principal employee in Savoy's laundry
washroom. The $13,441.50 of overhead continued after the discontinuance of
wholesale shirts.
It appears that a total of approximately $41,605 in production costs and overhead
that Colman had charged to wholesale shirts continued as costs and overhead after
the discontinuance of wholesale shirts and thus is borne by the remainder of Savoy's
operations. Taking the figures used by Colman, we find on Exhibit A of his report
the figure of $218,457 as gross income for all Savoy operations excluding wholesale
shirts. The total production costs and overhead of all operations excluding whole-
sale shirts is given as $203,109. All nonwholesale shirt operations are therefore
30 At the May 15, 1961, State Board hearing, Vines was asked the following questions
by the chairman of the State Board*
Q Now, since the abandonment of the shirt operations has the company's business
in other respects increased materially'1
A No, it has not
Q It has remained about static1
A That's right
8' At the May 1961 State Board hearing Rudolph Vazzano was asked
Q Has there been any attempt to rent or sublease any of the areas not in
present use)
A. No, sir.
Q Would it he feasible'
A. You couldn't rent it
SAVOY LAUNDRY, INC. 327
shown by Colman as producing net income of $15,347. However, if we add to
Colman's production costs and overhead for all operations except wholesale shirts
the additional figure of $41,605 (original wholesale shirt costs and overhead that
continued after wholesale shirts were discontinued) we have this picture:
Total production costs and overhead (all operations except wholesale
shirts and not including costs and overhead allocated to wholesale
shirts)--------------------------------------------------- $203,109
Production costs and overhead originally allocated to wholesale shirts
but which continued as costs and overhead for Savoy's remaining
operations after wholesale shirt operation was discontinued------ 41, 605
Total production costs and overhead of Savoy after elimina-
tion of wholesale shirts------------------------------ 244, 714
Gross income of Savoy from operations other than wholesale shirts-- 218, 457
Net loss of Savoy resulting from discontinuance of wholesale
shirt operations------------------------------------- 26, 257
Having assumed, arguendo, that Colman's report showing income from and costs
of wholesale shirts was accurate as to figures used and methods of allocation, we
have nevertheless seen that because of fixed costs and overhead the elimination of
wholesale shirts did not improve but worsened Savoy's financial status. There is,
moreover, no evidence in the record that Savoy's net income improved as a result of
the elimination of wholesale shirts.
We will now examine Colman's report from a different aspect. The accountant,
who did not audit the figures he used, relied upon Savoy's 1960 Federal income tax
return (which had not been prepared by Colman) and information from the
Vazzanos. His report used certain figures and various methods of apportionment
that merit attention. I do not propose to set forth every item that aroused some
question in my mind and where the explanation in conjunction with the record as a
whole was reasonably plausible I have not adverted to it.
(2) Accuracy and reliability aspects of Respondent's financial report
In arriving at the important item of gross income from wholesale shirts, Colman
used 6 selected weeks.32 He averaged the 6 weeks to obtain a weekly average of
shirts processed, and then projected the average for a yearly total. There is no
proof that the selected weeks were representative or otherwise. The only explana-
tion offered for the selection is that in September 1961 when the Board agent was
investigating the charge he apparently asked Stephen Vazzano for shirt price figures
for the last 2 weeks in each quarter going back as far as Savoy's records would
show. Savoy said its record did not go beyond June 1960 and it furnished informa-
tion for the periods above described. During the investigatory stage of a case a
spot check as aforedescribed would be almost routine and would be used with
respect to a wide variety of industries or business It would be unrelated to any
expert knowledge regarding the laundry business
In any event, Colman's report was an undertaking by Savoy to prove that it was
losing money on wholesale shirts and to support its defense to the charge and the
complaint. As a part of that report it was incumbent upon Savoy and its account-
ant to establish what they undertook by convincing evidence 33 Under the method
adopted, an accurate picture of gross income from wholesale shirts required a total
of all wholesale shirts for the year either by a projection of representative weekly or
monthly figures or by adding the figures for every week or month for which records
existed. I cannot determine from what is before me whether or not the weeks used
by Colman were representative weeks.34
,One of the items included by Colman under productive labor charged to wholesale
shirts was "2 employees-washing, $7,228." Prior to the discontinuance of whole-
32 The weeks ending June 24 and 30 ; September 29 and October 6 ; December 24 and 29,
all 1960
33 Questions asked or information requested by the Board agent during the investigatory
stage were not determinative if indeed they were even relevant to Colman's obligation
If the Board agent had asked only for the six highest shirt production weeks, it is un-
likely that Colman would have or would have been obliged to annualise on such a basis
84 Rudolph Vazzano testified that the peak season for shirts is January, February, and'
March, slowing down about May and June, very slow in the summer, and gradually pick-
ing up in September onward.
328 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
sale shirts there were four and one-half men working in the washroom.35 Colman
charged 34.8 percent of John Paremba's salary to wholesale shirts under another
heading, "Administrative & Maintenance Salaries." This left three and one-half men
in the washroom. Under "productive labor," two of these men were charged to
wholesale shirts. Colman did this because this was what Stephen Vazzano told him
was the appropriate allocation. The decision may have been correct but it raises
some question. The washing machines were loaded according to weight although
shirts were apparently not mixed with flatwork. In some respects shirts required more
washroom handling. But Rudolph Vazzano testized before the State Board that an
average of 32,000 pounds of all items went through the washroom per week, of
which about 7,000 pounds were shirts.36 Shirts weighed half a pound. A piece of
flatwork, e.g., a sheet, weighed 1 pound. If we use the average weekly number of
wholesale shirts (13,440) that Colman used in computing wholesale shirt income,
the average weekly weight of wholesale shirts was 6,720 pounds out of 32,000 pounds.
Thus, while wholesale shirts constituted less than 22 percent of the weight of items
washed, the pay of two out of three and one-half men handling the wash was allo-
cated to wholesale shirts.
Machinery depreciation is included among the items constituting wholesale shirt
production costs. Colman charged 90 percent of the four shirt presses' depreciation,
or $3,242, to wholesale shirts. The failure to allocate 100 percent of this item was
attributable to the fact that the shirt presses were also used for retail household shirts
and for linen supply uniform shirts. However, with respect to other machinery that
included flat ironers and presses not used for shirts, Colman charged wholesale shirts
with 34 8 percent of the depreciation or $3,065.
Another approach to the accuracy and reliability of Colman's report is to use his
basic figures and allocations but to apply them to the Savoy operations other than
wholesale shirts. Colman did not make a cost study of any operation other than
wholesale shirts. He had a gross income figure of Savoy from the income-tax return.
He then computed income and cost of wholesale shirts and by subtracting the whole-
sale shirt figures from Savoy's overall income and costs he showed a gross income
and cost figure for the operations other than wholesale shirts.
Savoy's 1960 income-tax return, used by Colman, shows gross income of $335,243.
It also showed:
Cost of Operations
Payroll ------------------------------------------------- $136,819
Supplies-Laundry-------------------------------------- 20,835
Supplies-Linen----------------------------------------- 24,555
Dry Cleaning------------------------------------------- 6,964
Total cost of opers------------------------------------ 189,175
Since Colman's report allocates $60,675 of productive labor payroll to the whole-
sale shirt operation, the linen payroll is properly charged with the balance of the
$136,819 payroll or $76,141.37 Colman allocates a total of $11,545 to wholesale
shirts under laundry and packaging supplies. Since total laundry supplies were
$20,835, the balance of laundry supplies or $9,290 is properly charged to linen.
The entire cost of linen supplies, $24,555, is chargeable to linen. I do not under-
stand the dry cleaning figure of $6,964 since the record in the instant case and in
the State Board shows consistent testimony by Savoy representatives that Savoy did
not do dry cleaning. Avon Cleaners, owned by the Vazzanos, was engaged in dry
cleaning. Whatever the explanation, it is clear that $6,964 was shown as one of
Savoy's operating costs in its income-tax return. This dry cleaning cost is not a
wholesale shirt cost and has not been so used by Colman; it is therefore chargeable
to the other operations of Savoy, referred to herein as linen.
Colman charged all but 10 percent of depreciation on four shirt pressing units to
wholesale shirts. Therefore $360 is chargeable to linen. On the other machinery
Colman charged 34 8 percent to wholesale shirts. Therefore, the balance of the
35 John Paremba, who put the washing formula in the machines set the timing of the
washing machines, etc ; the common labor in the washroom were Rainoli (or Rinauldi)
Zihall; Al Paremba; and Giardini (who spent half his time on nonwashroom duties)
36 Shirts would of course include retail, wholesale, and linen service shirts
37 Rather than continue to use the term "operations other than wholesale shirts," I shall
here, and from this point on, use the term "linen" or "linen operations" as indicating all
Savoy's operations (linen supply and household laundry) except wholesale shirts
SAVOY LAUNDRY, INC. 329
depreciation on other machinery, or $5,700, is chargeable to linen. Colman used the
same percentage allocation regarding machinery repairs and machinery insurance.
The balance chargeable to linen on these two items is approximately $2,850 and
$450, respectively. Under production costs and also under overhead, Colman
charged a total of $4,238 in taxes to wholesale shirts, which was approximately 40
percent of total taxes of $11,134 listed as deductions on Savoy's income-tax return.
The balance chargeable to linen would be $6,896.
Under production costs Colman charged $22,285 to "Collection, Delivery and
Sales Promotion." The last-mentioned schedule consisted of an item "Drivers .. .
$10,125." The record shows six drivers, in Savoy's employ, including a driver-
supervisor, none of whom were discharged on February 23 or 24, 1961. The item
of $10,125 for drivers, charged to wholesale shirts, apparently represents the amount
paid to one or one and one-half or two drivers on wholesale shirts. Since Savoy's
income-tax return apparently included drivers under costs of operations, payroll, I
will not in the present connection charge any drivers to linen. But, on truck expense
($19,646), since Colman charged 34.8 percent to wholesale shirts ($6,836), the
sum of approximately $12,000 is chargeable to linen. Under the same heading
appears "Advertising," of which 34.8 percent is charged to wholesale shirts or $548.
The balance of $1,000 is chargeable to linen. The next item under the heading,
"Salaries-Officer (10 percent of one man), $1,400," applied to wholesale shirts,
is such that under this heading I will not apply a comparable item to linen. It will
be covered under another heading.
Under the same caption of "Collection, Delivery and Sales Promotion," charged to
wholesale shirts are: "Claims-Allowances (50 percent attributable to shirt divi-
sion), $1,585"; this would mean $1,585 is also chargeable to linen; "Sales Promo-
tional (10 percent attributable to shirt division), $737"; this would mean $6,600
chargeable to linen; "Commissions, $616, representing 34.8 allocated to shirts"; this
would mean approximately $1,200 chargeable to linen.
As overhead, Colman allocates $6,797, 35.9 percent of total rent, including heat,
utilities, and maintenance, to wholesale shirts. The balance, $12,200 may be charged
to linen Insurance, other than on machinery and trucks, is allocated to wholesale
shirts on a 34 8 percent basis or $1,531, which would mean $2,900 chargeable to
linen. Stationery, printing, and office expense, on a basis of 50 percent of total, is
charged to wholesale shirts in an amount of $672 which would mean $672, charge-
able to linen. "Salaries, Administrative and Maintenance," are apportioned to
wholesale shirts on a 34.8 basis or $13,441. The total of administrative and main-
tenance salaries was $61,000, $56,000 of which was the salaries of the owners and
the balance was a maintenance salary. Colman deducted from the $61,000 the
amount of $22,400 since he had applied this amount under other headings such as
productive labor supervision, collection, delivery, and sales promotion, and $14,000
for one man 's nonshirt duties. He then applied 34.8 percent of unapplied ad-
ministrative and maintenance salaries to wholesale shirts. Since, up to this point,
I have not applied any administrative and maintenance salaries to linen, it appears
proper to take the total of administrative and maintenance salaries, $61,000, deduct
therefrom $21,481 ($7,000; $1,400; $13,441), charged to wholesale shirts, by Col-
man and charged the balance or $39,159 to linen (all other operations of Savoy.) 38
Also under "Overhead," Colman charges to wholesale shirts, legal and auditing,
$528, and telephone, $783, both charges being allocated to wholesale shirts on a
34.8 percent basis. This would mean approximately $1,500 and $2,200, respectively,
chargeable to linen. Colman charges $398 to wholesale shirts under "Interest."
Since total deduction for interest on the income tax return is $1,146, the balance of
$748 is chargeable to linen.
We have, in the foregoing paragraphs, endeavored to use, for all Savoy operations,
exclusive of wholesale shirts, the same areas of costs, overhead, and theory of
allocation as were used by Colman with respect to wholesale shirts. The result,
when the aforedescribed costs and overhead are totaled, is a figure of approximately
$215,070 (Colman's figure is $203,109) allocated to linen and other services ex-
cluding wholesale shirts. The income, costs, and net income attributed to linen
and other services in Colman's report were the balances derived by substracting,
from Savoy's gross income and total production costs and overhead, as shown on
his income tax return, the wholesale shirt income and wholesale shirt production
cost and overhead as computed by Colman.
38 The item of "payroll" on Savoy's tax return did not include administrative salaries
since the latter item of $56,000 was listed under "Deductions "
:330 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Exhibit A of Respondent 's Exhibit No. 7 (Colman 's report ) show the following: 39
Savoy's
income tax
return
Wholesale
shirts
Linen and
other opera-
tions
Gross income $335,243 $116, 786 $218,457
Total production costs and overhead --------- ---------- 334,574 131, 465 203,109
Net income before Federal income tax------------ 669 (14,679) 15,348
If the amount or $215 , 070, instead of $203,109 , is used for costs and overhead,
,for linen , and other operations , the financial picture, using Colman 's other figures, is
.as follows:
Wholesale
shirts
Linen and
other
Gross income-------------------------------------- $335,243 ($335,243) $116, 786 $218,457
Costs and overhead --------------------------------- 334,574 (346 535) 131,465 215, 070
Net income on tax return --------------------- 669 (*11,292) (14, 679) 3,387
* Net loss.
The above net loss on Savoy's total operations is not compatible with the Federal
income-tax return and is therefore incorrect . Since the only figures that are not open
-to question in the instant proceeding are the income -tax return amounts, it would
appear that the inaccuracy rests wih some of the other figures shown. The gross
income shown for linen in Colman's report is wholly dependent upon the correctness
-of the wholesale shirt gross income shown . The net income shown for linen depends
on the correctness of the gross income for linen. The cost figure used by Colman
for linen ($203,109 ) is dependent upon the correctness of his wholesale shirt cost.
The cost figure for linen of $215 ,070, above , undertakes to be consistent with the
source figures and methods used by Colman in arriving at his wholesale shirt cost.
The importance of the accuracy of the figures for wholesale shirts is of course obvious.
I have previously pointed out areas in Colman 's report that aroused doubts and
uncertainty . Some change in even one of these areas might or might not reveal a
more accurate picture. For instance , if a total of demonstrably representative weeks
showed an average of 14,947 wholesale shirts instead of 13,440 and an average price
of 17 cents instead of 16.7, the gross income of wholesale shirts would be $132,134
instead of $116,786 . This would result in the following picture:
Wholesale
shirts
Linen and
other
Gross income ------------------------------------------- $335,243 $132, 134 $203,109
Costs and overhead ------------------------------------- 334, 574 131,465 203,109
Net income--------------------------------------- 669 669
The foregoing , of course, is not advanced as the correct status of Savoy's operations
but it illustrates that with such changes as those shown or changes in other wholesale
shirt figures in various combinations or in linen figures, a cost picture in harmony with
the income tax net income can result. Considerations of the foregoing type would not
merit attention if the record established convincingly the accuracy of the financial
picture presented by Colman. I claim not expertise in this area or that I know
the financial picture of Savoy, particularly with respect to income and costs of its
wholesale shirts and other operations. But, because I find myself unconvinced that a
reliable picture of Savoy's wholesale shirt operation has been presented by Respond-
ent, I am unable to determine the true state of those operations or to conclude that
the closedown of wholesale shirts was economically motivated. I find , therefore, that
311 have omitted reproducing the odd cents
SAVOY LAUNDRY, INC. 331
Respondent has not established the economic defense advanced as justification for
the discontinuance of the wholesale shirt operation.40
The evidence in the record , including the timing of the shutdown , persuade me that
the wholesale shirt shutdown was a maneuver to defeat the Union . Respondent's
original attitude toward the Union on January 30, 1961, was that Respondent desired
to have no dealings with that organization. When the Union did not "go away"
and when Respondent was faced with a State Board hearing, recognition and negotia-
tions took place. However, when confronted with the union wage demands Respond-
ent apparently once again concluded that the Union was one with whom , it would
not do business.41 The solution used was the shutdown which, I find, constituted a
violation of Section 8(a)(1), (3), and (5) of the Act42 The discharge of the
employees named in the complaint was an inherent part of the illegally motivated
shutdown of the wholesale shirt operations ; by eliminating the union nucleus Respond-
ent not only frustrated the possible consummation of a contract covering such
employees but dealt a lethal blow at the effective strength of the Union in the plant.
The complaint alleges and the record shows that, on February 24, 1961, and at
various dates thereafter Respondent unilaterally changed the wage rates of various
employees without notice to the Union43 It is my opinion that, since the Union was
and continued to be the statutory bargaining agent, it was entitled to be advised by
Respondent of proposed changes in wage rates of employees who were within the
bargaining unit. The Union was also entitled to be told, on February 18, 1961, and
thereafter, that Respondent while ceasing the great bulk of its wholesale shirt work,
would continue to perform such work for certain customers. The Union's failure
to accept the substantial closing of wholesale shirt operations as a bona fide economic
move (as shown by the filing of a new charge) and the failure of Respondent to make
full disclosure that it would still perform some wholesale shirt work, plus the find-
ings herein regarding the wholesale shirt closing, negate attaching determinative
significance to Cleary's remarks on February 18 that (in effect), if the wholesale
shirt employees were being discharged he was not interested in negotiating a contract
for the employees still retained by Savoy.
IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE
The activities of Respondent set forth in section III, above, occurring in con-
nection with the operations of the Respondent 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 thereof.
V. THE REMEDY
Having found that Respondent has engaged in unfair labor practices, I will recom-
mend that it cease and desist therefrom and take certain affirmative action designed
to effectuate the policies of the Act.
Respondent has continued to operate as a functioning business, including the per-
formance of wholesale shirt work. It still retains its plant and equipment and the
only significant difference in operations is as to the amount of wholesale shirt work
solicited and performed. While the amount of Savoy's wholesale shirt work, which is
a customer-service, may not be wholly within Respondent's sole control (as contrasted
with an employer who, instead of repairing its own trucks, has adopted the practice
of having such work performed by an outside garage), I am not persuaded that the
401n addition to the various factors previously discussed there are others that may be
mentioned in passing Savoy still continued to perform some wholesale shirt work after
the purported discontinuance. The reason advanced for this is the assertion that other
work, such as fiatwork, was thereby obtained or retained by a sort of tie-in with whole-
sale shirts It is not clear why, in some degree, the same situation might not prevail
in other instances Finally, no evidence has been presented to show that as a result of
the substantial elimination of wholesale shirt operations, the financial condition of Savoy
has thereby been Improved. For reasons previously discussed, it would appear that the
opposite is true
41 As one of the Savoy owners said to an employee when she and others were being laid
off on February 24, 1961, ". . . you all just had the wrong union, that union is . . . not
for laundry "
42 Respondent, of course, was under no obligation to agree to the Union's wage demands
but it was under an obligation not to undermine the Union while professing it willingness
to bargain further
93 General Counsel's Exhibit No 15 establishes that 13 employees received wage In-
creases at various specified dates commencing February 24, 1961.
332 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
volume of business or available jobs is entirely beyond Respondent's control. Ac-
cordingly, it is recommended that Respondent make reasonable and businesslike
efforts to restore its wholesale shirt operations to substantially the same scope and
volume as prevailed prior to February 23, 1961.
With due regard to the experience and qualifications of the employees named in the
complaint who have not been offered reinstatement, it is recommended that Respond-
ent offer these employees reinstatement to their former or substantially equivalent
jobs, as available, without prejudice to any rights or privileges previously enjoyed.
In the event that there are not sufficient job openings for the said employees, it is
recommended that Respondent create a preferential hiring list, notify the Union
and the employees of such list, and offer to said employees on the list reinstatement
to their former or substantially equivalent jobs, as such are available, without preju-
dice to their rights and privileges previously enjoyed.
With respect to those employees named in the complaint to whom Respondent
has offered or does offer reinstatement to their former or substantially equivalent
jobs, it is recommended that Respondent make them whole for any loss of pay
suffered by reason of the discrimination against them. The employees' net earnings
during the period from the date of their discharge to the date of the offer of rein-
statement shall be deducted from gross backpay in -a manner consistent with Board
policy44
As to those employees named in the complaint for whom, during the 12-month
period commencing from the date of this report, no job openings are available in
Respondent's employ that are the same or substantially equivalent to their former
jobs, with due regard for reasonable standards of qualification, and who have there-
fore not been offered reinstatement, it is recommended that they be made whole for
any loss of pay suffered by reason of the discrimination against them by paying to
each of them a sum of money equal .to the amount she would normally have earned
as wages from the date of the original discharge on February 23 or 24, 1961, until
such time as each secures, or did secure, substantially equivalent employment with
other employers 45
In the event that the Board adopts the foregoing recommendations or in the event
that Respondent undertakes compliance with these recommendations initially, it is
recommended that the Board expressly reserve right to modify the backpay and rem-
statement provisions if made necessary by a change of conditions in the future, and
to make such supplements thereto as may hereafter become necessary in order to
define or clarify their application to a specific set of circumstances not now apparent.
Since the Union represented and represents a majority of the employees in an
appropriate unit that was not confined to employees who were terminated in Febru-
ary 1961 and since any effect that the terminations may have had upon the Union's
strength was due to the illegal conduct of Respondent, it is recommended that Re-
spondent bargain with the Union upon request 46
[Recommendations omitted from publication.]
49 F. W. Woolworth Company, 90 NLRP. 289
's Bonnie Lass Knitting Mills , Inc, 126 NLRB 1396; The R C Mahon Company, 118
NLRB 1537, Steward Hog Rinq Company, Inc, 131 NLRB 310; St. Cloud Foundry &
Machine Company, Inc, 130 NLRB 911.
46 Frank Bros Company v N L R B , 321 U S 702; N L R B. v. Philamon Laboratories,
Inc, 298 F. 2d 176 (C.A. 2).
Westinghouse Electric Corporation (Naval Reactors Facility) I
and Eastern Idaho Metal Trades Council , AFL-CIO, Peti-
tioner. Cases Nos. 19-RC-2956 and 19-RC-2957. May 24, 1962
DECISION AND ORDER
Upon a petition duly filed under Section 9 (c) of the National Labor
Relations Act, a hearing was held before Orville W. Turnbaugh, hear-
1 The name of the Employer appears as amended at the hearing
137 NLRB No 30.