Spitzer Akron, Inc.

National Labor Relations Board - Board Decisions

Jan 25, 1974

208 N.L.R.B. 701 (N.L.R.B. 1974)

SPITZER AKRON, INC.
Spitzer Akron, Inc. and Auto Mechanics Local 1363,
District 54 of the International Association of
Machinists and Aerospace Workers, AFL-CIO.
Case 8-CA-6177
January 25, 1974
SUPPLEMENTAL DECISION AND
ORDER
BY MEMBERS FANNING, JENKINS, AND
KENNEDY
On January 26, 1972, the National Labor Relations
Board issued its Decision and Order' in the above-
entitled proceeding, finding that Respondent had
engaged in and was engaging in unfair labor
practices in violation of Section 8(a)(5) and (1) of the
Act and ordering that it cease and desist therefrom
and, upon request, bargain collectively with the Auto
Mechanics Local 1363, District 54 of the Internation-
al Association of Machinists and Aerospace Work-
ers, AFL-CIO, herein referred to as the Union, as
the exclusive representative of all employees in an
appropriate unit. The Board also ordered Respon-
dent, upon request, to cancel any changes of benefits
or working conditions which it made on September
4, 1970, or later, which may have resulted in financial
or other detriment to its employees. Finally, the
Board ordered the Respondent to offer reinstatement
to those strikers to whom it had not heretofore made
an unconditional offer of reinstatement, immediate
and full reinstatement to their former or substantially
equivalent jobs, and to make whole all employees
who went on strike on September 22, 1970, for any
loss of earnings they may have suffered from the
time of their unconditional offer to return to work to
the date that the Respondent offered them reinstate-
ment. In light of the Supreme Court's opinion in
N.L.R.B. v. Burns International Security Services, Inc.,
406 U.S. 272, and N.L.R.B. v. Wayne Convalescence
Center, 465 F.2d 1039 (C.A. 6, 1972) (No. 72-1081),
enforcement of the Board's Order was granted on
November 27, 1972, by the United States Court of
Appeals for the Sixth Circuit. Subsequently, Respon-
dent petitioned the Supreme Court of the United
States for certiorari, and on May 14, 1973, the
Supreme Court granted Respondent's motion, vacat-
ed the court of appeals' judgment, and remanded the
proceeding to that court with instructions to remand
the case to the Board for such further proceedings as
may be appropriate, in the light of Burns Internation-
al Security Services, Inc. v. N.L.R.B., 406 U.S. 272
(1972); FTC v. Sperry & Hutchinson Co., 405 U.S.
233, 245-250 (1972); SEC v. Chenery Corp., 318 U.S.
1 195 NLRB 114.
701
80, 87-88 (1943); Bachrodt Chevrolet Co. v. N. L. R. B.,
411 U.S. 912 (1973); Denham v.N.L.R.B., 411 U.S.
945 (1973).
On August 15, 1973, the United States Court of
Appeals issued an order which remanded the case to
the Board.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the
National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
In its original decision in this case, the Board found
that Respondent had violated Section 8(a)(5) and (1)
of the Act by making unilateral changes of wages
and working conditions of employees in the appro-
priate unit on September 4, 1970, and by thereafter
failing and refusing on request, to recognize, meet,
and bargain with the Union with respect to rates of
pay, wages, hours of employment, and other terms
and conditions of employment of employees in the
unit.
In the light of Burns, the Board adheres to its
findings that Respondent violated Section 8(a)(5) by
making unilateral changes of wages and working
conditions on September 4, 1970, and by refusing on
request to recognize, meet, and bargain with the
Union, as set forth hereinafter.
The Respondent is engaged in the business of retail
and wholesale selling and servicing of automobiles,
parts, and accessories.
In 1964, Local 762 of the Machinists, a predecessor
local of the Charging Union, entered into a multiem-
ployer agreement with certain automobile dealers
including Arnett Chrysler-Plymouth, a predecessor
of East Town Chrysler-Plymouth. Respondent there-
after leased the premises that were occupied by
Arnett Chrysler-Plymouth and East Town Chrysler-
Plymouth.
The collective-bargaining agreement was to expire
in 1967 but was extended to August 31, 1970. East
Town Chrysler-Plymouth was not signatory to the
contract of September 1964, nor to its amendments.
On August 27, 1968, the Union and East Town
Chrysler-Plymouth entered into a separate agree-
ment which also expired on August 31, 1970.
On August 13, 1970, East Town Chrysler-Plymouth
formally terminated said contract by letter to the
Union, and on the same date sent a letter to Chrysler
Corporation terminating its franchise as an official
Chrysler-Plymouth dealer, effective August 22.
In April 1970, representatives of Spitzer manage-
ment began negotiating for the purchase of certain
assets of East Town Chrysler-Plymouth, and these
negotiations were concluded on September 4, 1970, 5
days after the expiration of the bargaining agree-
208 NLRB No. 80
702 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
ment. The negotiations between Spitzer Akron and
East Town or Chrysler Corporation were culminated
on September 4, 1970, and, as part of that agreement,
Spitzer was to pay retroactively to September 1, 1970,
those employees retained. Substantially all of the
employees in the bargaining unit under the previous
contract were retained by Spitzer Akron. At a
meeting with the employees on September 4, 1970,
wage scales and benefits were established by Spitzer
Akron which were greater than the previous rates
paid under the expired contract.
We noted in our original Decision that the
employing industry has been continued by Respon-
dent in essentially the same form and scope as it was
before the transfer of ownership, so that it would
appear prima facie that Respondent legally succeeds
to any bargaining obligation of its predecessor
created by the Act. We then concluded that the
continuity of the employing enterprise was not
substantially disturbed or its nature changed during
its interim operation by Chrysler, which was trying to
operate it as a viable and thus a saleable business,
until such time as Spitzer interests or some other
entrepreneur took it over. Therefore, the Respondent
took over a going business, not a defunct or
liquidated one, and it follows that its bargaining
obligation as a successor-employer continued. Noth-
ing in Burns requires the Board to change these
findings. Accordingly, we affirm them. Additionally,
we affirm our earlier finding that Respondent was
not reasonably justified by objective circumstances
in doubting the Union's majority status on Septem-
ber 14, 1970, and that Respondent further refused on
and after that date to bargain with the Union in
violation of Section 8(a)(5) and (1) of the Act.
In the earlier case, the Board also found that
Respondent violated Section 8(a)(5) of the Act when
it made unilateral changes of wages and certain
working conditions of the employees in the bargain-
ing unit.
In Burns, the Supreme Court held that in the
ordinary situation a successor-employer is free
unilaterally to set initial terms on which it will hire
the employees of a predecessor, since, until the
successor-employer has hired his full complement of
employees, it may not be clear that the union
represents a majority of employees in the unit.
However, the Court also stated that:
[T]here will be instances in which it is perfectly
clear that the new employer plans to retain all of
the employees in the unit and in which it will be
appropriate to have him initially consult with the
employees' bargaining representative before he
fixes terms.
The instant case is one of the type referred to by the
Supreme Court in the above-quoted language.
The evidence indicates that the work force was
hired prior to the announcement of the changes, and
that such changes had not been a part of the initial
terms of rehiring. In operating the dealership,
Respondent has been conducting the same business
(with the exception of the auto body repair and paint
shop) as East Town, using 10 of the 11 men in the
East Town work force. When Del Spitzer visited the
agency early in August 1970, in connection with
family plans for buying the business, he told
mechanic John Hall that the Spitzers planned to buy
the agency, and would need good mechanics. When
Hall suggested that he keep all the East Town
mechanics, Spitzer replied that he had checked on
them, found they were good men, and "I want every
man to stay on the job, and we will carry on as
usual."
On the evening of September 4, 1970, shortly after
Respondent had consummated the purchase of assets
from East Town, John and Del Spitzer assembled
and talked to the employees at the agency. Del
Spitzer explained the family operations in developing
dealer franchises, and said the Spitzers had taken
over the Chrysler-Plymouth franchise here. He
announced that the employees would receive extra
pay in their paychecks coming out that day. He also
described the Spitzer hospital benefit plan, saying it
was better than the plan which the men already had
from the Union; he said Respondent would pay one-
half the hospital insurance premiums, as well as one-
half of their uniform expenses, and would give them
six paid holidays a year, and a week of paid vacation
after a year of service. At the close of his remarks,
Spitzer asked for questions, but there were none from
the men, nor was there any discussion of the Union
or its current benefits. Union Steward Andy Parks
reported the Spitzer remarks at once to Ramnytz,
business agent of the Union, who said he would
contact Respondent about a contract. Ramnytz
visited the agency on September 9, and told Alan
Spitzer, Norman Hamilton, an officer of Spitzer
Management, Inc., and Service Manager Richard
Wolfe that the Union represented the employees and
wanted a contract. Spitzer said that, after his talk
with the men on September 4, he doubted very much
that the East Town employees wanted to "continue
with the Union," and suggested that the Union
should have a Board election, and, if the employees
indicated they wanted the Union, he would be glad
to negotiate a contract with it.
We find that, when Respondent took over the
business on September 4, it had completed hiring its
work force, which consisted of approximately 10
employees, substantially all of whom had formerly
SPITZER AKRON, INC. 703
worked for East Town. Under the teaching of Burns,
Respondent had a bargaining obligation as a
successor to East Town. The Respondent's position
on that date was akin to that of an employer
confronted with a newly selected bargaining repre-
sentative. It was not free thereafter to establish or
change conditions of employment for unit employees
without bargaining with the Union .2
Moreover, from the facts detailed above, it is
apparent that as of September 4, Respondent had
planned to, and had indeed retained substantially all
of the employees in the unit and at such time "it was
appropriate to Y ave him initially consult with the
employees' bargaining representative before he fixes
terms." As noted, the Union'made its first bargaining
demand, when its representative visited the agency
on September 9, stating that the Union represented
the employees and wanted a contract. Thus, it is
clear that Respondent planned to, and did, retain
virtually all of its predecessor's employees in the unit,
and that these employees were' represented by the
Union and constituted a majority of the unit both
before and after the transfer of ownership.
Accordingly, we reaffirm the findings, conclusions,
and remedy provided in our original Decision and
Order.3
2 Ranch-Way, Inc , 203 NLRB No. 118
3 See Bachrodt Chevrolet Co, 205 NLRB No 122