Stox Restaurant

National Labor Relations Board - Board Decisions

Aug 8, 1968

172 N.L.R.B. 1474 (N.L.R.B. 1968)

1474 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Fahnestock Enterprises , Inc. d/b/a Stox Restaurant
and Local Joint Executive Board of Hotel and
Restaurant Employees and Bartenders - Interna-
tional Union of Long Beach and Orange County.'
Case 21-RM-1342
August 8, 1968
DECISION AND DIRECTION OF ELECTION
BY CHAIRMAN MCCULLOCH AND MEMBERS FANNING
AND BROWN
Upon a petition duly filed under Section 9(c) of
the National Labor Relations Act, as amended, a
hearing was held before Hearing Officer Robert L.
Bernier. Thereafter, the Employer-Petitioner filed a
brief.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the Na-
tional Labor Relations Board has delegated its
powers in connection with this case to a three-
member panel.
The Hearing Officer's rulings made at the hearing
are free from prejudicial error and are hereby af-
firmed.
Upon the entire record in this case, the Board
finds:
1. The Employer-Petitioner is engaged in com-
merce within the meaning of the Act, and it will ef-
fectuate the policies of the Act to assert jurisdiction
herein.
2. The labor organization involved claims to
represent certain employees of the Employer.
3. A question affecting commerce exists con-
cerning the representation of certain employees of
the Employer within the meaning of Section
9(c)(1) and Section 2(6) and (7) of the Act, for
the following reasons:
Petitioner, herein referred to as the Employer,
operates two establishments, known respectively as
Stox Restaurant and Stox Pie Shop at Downey,
California. The Employer's petition, as amended at
the hearing, seeks an election in a unit composed of
employees of both establishments. The Employer
indicated, however, that it was willing to go to an
election in a unit confined to Stox Restaurant em-
ployees if the Board determines that the broader
unit requested is inappropriate.
As amended at the hearing
The undisputed evidence establishes that Fahnestock's status as the
employer of the Stox Restaurant employees remained substantially the
same despite the incorporation of his business The record further shows
that the Petitioner , following incorporation, continued to operate the
restaurant in strict conformity with the terms of the contract which Fah-
nestock, as an individual, executed in July 1963, also that on a number of
occasions subsequent to incorporation the Petitioner , by certain actions
The Union moves the dismissal of the petition on
the ground that it was untimely filed with reference
to the expiration date of a contract dated July 1,
1963, covering the Stox Restaurant employees.
Contrary to the Employer, the Union alleges that
this contract is in effect and will not expire until
January 31, 1971. In the event an election is
directed, the Union claims that the appropriate unit
should encompass only those employees whom it
presently represents at Stox Restaurant.
We consider first the contentions bearing on the
contract-bar issue.
The record shows that Stox Restaurant was
opened on June 26, 1963, by Harry L. Fahnestock,
and that sometime in 1964 the latter transferred
ownership of the business to Fahnestock Enter-
prises, Inc., Petitioner herein , without any change
in operation and with the same employee comple-
ment . Fahnestock was and is president and chief
stockholder of the Petitioner, and his wife is the
only other stockholder.
Since on or about July 15, 1963, the Stox Restau-
rant employees have been continuously covered
under a contract signed by Harry L. Fahnestock
and the Union. That contract was executed on or
about July 1, 1963, shortly after the Stox Restau-
rant was opened , to become effective on July 15,
and to remain effective until February 1, 1968, sub-
ject to an automatic renewal clause . On November
30, 1967, the Employer filed the petition in this
case.
We reject what appears to be the Petitioner's ini-
tial contention that it can in no event be held
bound by the July 1, 1963, contract executed by
Fahenestock as an individual because it did not as a
corporation formally adopt that contract. 22 But we do
find merit in its further contention that the contract
cannot serve as a bar because this petition was filed
before the operative date of the contract's auto-
matic renewal clause and within the 60 to 90 day
period preceding the expiration date of the con-
tract 's initial term , as required by our rules . Deluxe
Metal Furniture Company, 121 NLRB 995, and
Leonard Wholesale Meats, Inc., 136 NLRB 1000.
The Union's claim of contract bar is predicated
upon its contention that it has a continuing contrac-
tual relationship with the Employer governed by a
contract which it negotiated in 1966 with the Long
described below , acceded to Union demands based on the 1963 contract
provisions Moreover . Harry Fahnestock admitted at the hearing that the
Petitioner was in fact bound to the terms of the July 1963 contract We
find, accordingly , for purposes of this proceeding, that the Petitioner is to
he regarded as the alter ego of Harry Fahnestock , is the employer party to
the July I, 1963, contract , and that the terms of that contract were binding
upon it at all times here relevant Cf Shop Rite Foodi, Inc. 162 NLRB
1020
172 NLRB No. 164
STOX RESTAURANT 1475
Beach and Orange County Restaurant Association3
and which does not expire until January 31, 1971.
Although conceding that the Employer is not a
member of the Association , and did not sign the
1966 contract , the Union claims nonetheless that
the terms of the association contract became "auto-
matically " binding upon the Employer by virtue of
certain provisions in the Employer 's 1963 contract.
The merits of the Union 's contract-bar conten-
tions turn on an interpretation of the following
provisions of the Employer 's 1963 contract:
This Agreement , made and entered into this
first day of July 1963, to become effective on
the 15th day of July , 1963, and to remain in
full force and effect from the effective date
until February 1, 1968 , and thereafter under
the terms hereof.... [ Emphasis supplied.]
Section 24-Change of Agreement: (a) It is un-
derstood and agreed by the parties hereto that
during the life of this Agreement, if any more
favorable contractual conditions are granted
by the Union subsequent to the execution of
this Agreement to any other similar establish-
ment , such conditions shall be immediately
available to an Employer signatory to this
Agreement at his option.
(b) It is mutually agreed by the parties hereto
that any changes made during the term of this
Agreement in the collective-bargaining agree-
ment as amended , effective August 15, 1962,
between the Long Beach and Orange County
Restaurant Association and the Local Joint Ex-
ecutive Board of Hotel and Restaurant Em-
ployees and Bartenders International Union of
Long Beach and Orange County as the same
may be amended or extended , shall automati-
cally become a part of this Agreement as of the
effective date of said change . [ Emphasis sup-
plied. ]
Section 34-Term of Agreement : This Agree-
ment shall remain in full force until February
1, 1968, and shall remain in full force in all
respects for another year from February 1,
1968, and for continued successive annual
periods thereafter until a proper notice in writing
of a desired change or termination is given by
either party . [ Emphasis supplied. ]
The relevant portions of the 1962 Restaurant As-
sociation contract , which was in effect when the
above-described contract was executed , read as fol-
lows:
Section 34-Term of Agreement: This Agree-
ment, shall remain in full force and effect and
not subject to revision except as hereinafter
provided for the period August 15, 1962, to and
including January 31, 1968.
Provided, however, that on or before sixty (60)
days prior to February 1, 1964, and or before
sixty (60) days prior to each February 1st
thereafter during the term thereof, either party
may serve written notice upon the other to
Open Section 33 ... only for changes or
modifications of the wage rates and hours of
work and rate of contribution.... [Emphasis
supplied. ]
The facts relating to the negotiations conducted
by the Union and the Restaurant Association pur-
suant to the above-quoted reopening clause of their
1962 agreement are as follows:
In late 1964 and early 1965, the Union and
Restaurant Association conducted negotiations
resulting in an agreement which modified the 1962
contract by increasing wages and improving health,
insurance , and vacation benefits, the modifications
to be effective for the years 1964 and 1965. The
Employer did not participate in these negotiations
and had no knowledge that they were taking place.
After the negotiations were concluded, however,
the Union notified the Employer of the modified
contract terms and the Employer then applied the
improved benefits and increased wage rates.
In the latter part of 1965, the Union again
notified the Restaurant Association that it desired
to renegotiate the master contract's hour and wage
provisions. The ensuing negotiations were
scheduled to begin in February.On December 30,
1965, the Restaurant Association held a meeting to
discuss collective-bargaining strategy. It invited to
the meeting restaurant owners who were not mem-
bers of the Restaurant Association, but who had ex-
ecuted individual contracts with the Union. The
Employer attended this meeting through a
representative, Horace Griffin, but it was neither
invited to nor did it attend any subsequent Restau-
rant Association meetings. At this initial meeting, a
Restaurant Association spokesman, Charles Savitz,
advised those attending that the Union had
proposed certain wage increases and additional
health and welfare benefits. After Griffin and
others voiced objections to some of these
proposals, Savitz stated that if the Restaurant As-
sociation members wished to defy the Union, they
should wait until "the full contract expires, not now
Herein called the Restaurant Association This association is comprised
of approximately 100 restaurants Its primary purpose is to negotiate and
administer the areawide master contract with the Union
1476 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
when we have 2 more years to go under the con-
tract." In the subsequently conducted negotiations,
however, the Restaurant Association agreed not
only to increase wages and grant new benefits, but
also to extend the term of the agreement for an ad-
ditional 3 years beyond its initial expiration date, to
January 3 1, 1971, subject only to a right to reopen
for wages in 1969.
The Employer received a copy of this last-
negotiated Restaurant Association-Union contract
shortly after it had been executed by the parties
thereto, and it thereafter adjusted its wage rates
and other benefits accordingly.
From the foregoing it is clear that the Employer
did not participate in the negotiations between the
Restaurant Association and the Union which
resulted in the extension of the term of their 1962
contract beyond its initial expiration date (January
31, 1968) for an additional 3-year period. It is also
clear that although notified in December 1965 that
negotiations were to be conducted pursuant to the
Restaurant Association's 1962 contract's reopening
clause the Employer was told that the negotiations
would cover only those matters specified in the
contract's reopening clause. In these circumstances,
we could not find the Restaurant Association's ex-
tension of its 1962 agreement with the Union bind-
ing upon the Employer unless it appears from other
evidence that the Employer had explicitly
authorized or consented to be bound by such an ex-
tension.
Section 24(b) of the Employer's 1963 agree-
ment , quoted above, provides the only other
evidence on which the Union relies in claiming that
the Employer had in fact authorized such an exten-
sion. However, in light of other relevant provisions
contained in both the Employer's 1963 contract
and the 1962 Restaurant Association contract, we
are unable to read Section 24(b) as manifesting the
expression of a clear intent by the Employer to
grant the Union a unilateral right to determine the
duration of its contractual relationship with the
Employer. We note, inter alia, that: (a) The Em-
ployer's July 1963 contract explicitly grants it the
right to terminate the agreement as of February 1,
1968, by service of prior timely notice; (b) the
reopening rights afforded to the parties under Sec-
tion 34 of the 1962 Restaurant Association-Union
contract were limited in scope; and (c) the 1962
Restaurant Association-Union contract (as it ex-
isted when the Employer's contract incorporated its
' Contrary to the Union's contention , the Board 's holding in Montgotner%
Ward & Co , 137 NLRB 346, is inapplicable here In that case, the duration
of the effective term of the contract signed by the Employer was not in ie-
sue, and the petition was clearly filed untimely with reference to that con-
tract 's expiration date
provisions by reference) explicitly defined the ef-
fective term of all its provisions as expiring on
January 31, 1968.
In all the foregoing circumstances, and as it
further appears that the Employer's petition filed
on November 30, 1967, preceded the operative
date of the contract's automatic renewal provisions
and otherwise met our requirements of timely filing
where, as here, a contract is involved, we find that
the petition was not filed in contravention of our
contract-bar rules.4 We therefore deny the Union's
motion to dismiss the petition.
We turn next to the unit issues.
As mentioned above, the Employer, in opposition
to the Union, seeks to establish a unit extending in
scope to the Stox Restaurant and Stox Pie Shop
employees. However, the record shows that the
Union has never sought to represent the Stox Pie
Shop employees; that the Pie Shop was acquired by
Harry Fahnestock in 1956 and has been maintained
by him since that date as a distinct and unincor-
porated enterprise; that although Fahnestock has
managed both the Pie Shop and the Restaurant at
all times here relevant under a centralized adminis-
trative system, the day-to-day operations of the two
enterprises are separate; that supervision of each of
the two groups of employees is independent of the
other; and that there is no interchange between the
employees of Stox Restaurant and those of Stox Pie
Shop. In these circumstances, and particularly in
view of the fact that the Union's representation
claim and the history of bargaining have been con-
fined to the Stox Restaurant employees, we find
that for purposes of this proceeding, the ap-
propriate unit herein is one composed only of the
Stox Restaurant employees in the historical con-
tract unit.5
It appears that the July 1963 contract recognized
the Union as the collective-bargaining representa-
tive for the following employees:
Waiters, waitresses, grill men, butchers and
bakers' assistants, cooks' assistants, kitchen
employees, bartenders, bus boys, cashiers, and
hostesses.
Both parties agree, however, that since 1965
hostesses and cashiers have not been covered by
the contract because, at that time, the Employer
described them to the Union as "supervisors" and
the Union therefore agreed to their withdrawal
from the unit.
The Employer now seeks to include these
' Although the Employer has requested a broader unit, it has also in-
dicated its willingness to go to an election in any unit deemed appropriate
by the Board We shall not , therefore , dismiss the petition here Cf A and
M Karagheustan, /nt , 100 NLRB 917, and Underwood Corporation, 101
NLRB 25
STOX RESTAURANT 1477
hostesses and cashiers, alleging that its 1965
designation as "supervisors" did not purport to
define their legal status within the meaning of the
Act, and that in fact they do not possess or exercise
any supervisory authority as defined in Section
2(1 1) of the Act.' The Union, however, opposes
their inclusion , claiming that they are in fact "su-
pervisors," and that, in any event, the Employer is
now estopped from claiming otherwise.
Although the record establishes that the
hostesses and cashiers perform duties which are not
supervisory in nature , we do not agree with the Em-
ployer's contention that they should now be placed
in the traditional bargaining unit . These employees
have been neither covered by the collective-bar-
gaining agreement nor represented by the Union
for the last 3 years because of the parties' agree-
ment to exclude them from the collective-bargain-
ing unit . Moreover, the Union has disclaimed any
interest in representing them. We do not believe in
these circumstances that the inclusion of the
hostesses and cashiers in the historical unit is war-
ranted. We shall, therefore, exclude them from the
overall unit.
4. We find that the following employees of the
Employer's Stox Restaurant constitute a unit ap-
propriate for the purpose of collective bargaining
within the meaning of Section 9(b):
All waitresses, waiters, grill men, butchers and
bakers' assistants, cooks' assistants, kitchen
employees, bartenders, and bus boys.
[Direction of Election' omitted from publica-
tion.]
The Employer's president, *Harry Fahnestock, testified at the hearing
that he wanted to obtain the withdrawal of these employees from the unit
on the ground that they were unable to obtain benefits under the Union's
health and welfare benefit plan because they did not work the number of
hours specified as an eligibility requirement under that plan Once removed
from the bargaining unit, the Employer was able to place these employees
in its private health and welfare plan maintained for nonhargammg unit
employees
r In order to assure that all eliginie voters may have the opportunity to he
informed of the issues in the exercise of their statutory right to vote, all
parties to the election should have access to a list of voters and their ad-
dresses which may he used to communicate with them Elcehuir Un-
det n em Inc, 156 NLRB 1236, N L R B v Wvmmn-Gordon Co, 394 U S
759 Accordingly, it is hereby directed that an election eligibility list, con-
taming the names and addresses of all the eligible voters, must he filed by
the Employer with the Regional Director for Region 21 within 7 days of the
date of this Decision and Direction of Election The Regional Director shall
make the list available to all parties to the election No extension of time to
file this list %hall he granted by the Regional Director except in extraordina-
ry circumstances Failure to comply with this requirement shall be grounds
for setting aside the election whenever proper objections are filed