Travelodge Corp.

National Labor Relations Board - Board Decisions

May 7, 1970

182 N.L.R.B. 370 (N.L.R.B. 1970)

370 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Travelodge Corporation ; National Motel Locations, Inc.;
Lie, Gie Hoat and Lie , Njo Lian Hiap, husband and
wife as joint tenants ; Gordan D. Pearson and Evelyn
W. Pearson , husband and wife, d /b/a Mission Valley
Travelodge and Local Joint Executive Board of Culinary
Alliance and Hotel Service Employees Union Local 402,
and Waiters & Bartenders Union Local 500. Case
21-CA-7694
May 7, 1970
DECISION AND ORDER
BY CHAIRMAN MCCULLOCH AND MEMBERS FANNING,
BROWN, AND JENKINS
Or. April 22, 1968, Trial Examiner James R. Heming-
way issued his Decision in the above-entitled proceeding,
finding that the Respondents had not engaged in any
unfair labor practices, and recommending that the com-
plaint be dismissed in its entirety, as set forth in the
attached Trial Examiner's Decision. Thereafter, the Gen-
eral Counsel and Charging Party each filed exceptions
to the Trial Examiner's Decision and supporting briefs.
The Respondents then filed an answering brief.
On January 31, 1969, the National Labor Relations
Board, having determined that the instant case raised
issues of substantial importance in the administration
of the National Labor Relations Act, as amended,
ordered that this case be consolidated with three others'
for the purpose of oral argument before the Board
on March 12, 1969. The parties were given permission
to file further briefs. Subsequently, on February 19,
1969, the Board extended the date of the oral argument
to April 23, 1969.
The Board also invited certain interested parties to
file briefs amici curiae and to participate in oral argument.
Briefs were filed by The Chamber of Commerce of
the United States; American Federation of Labor and
Congress of Industrial Organizations; International
Union, United Automobile, Aerospace and Agricultural
Implement Workers; the International Brotherhood of
Teamsters, Chauffeurs, Warehousemen & Helpers of
America; and the National Federation of Independent
Unions. The Chamber of Commerce of the United States;
the International Brotherhood of Teamsters, Chauffeurs,
Warehousemen & Helpers of America, and the National
Federation of Independent Unions did not choose to
participate in the argument. The National Association
of Manufacturers declined either to file a brief or partici-
pate in the argument.
The Board has considered the Trial Examiner's Deci-
sion, the exceptions and briefs, the oral arguments,
and the entire record in this case, and hereby adopts
the findings, conclusions, and recommendations of the
Trial Examiner only to the extent consistent with the
following:
' Kota Division of Dura Corporation , 182 NLRB No 51, Hackney
Iron & Steel Co 182 NLRB No 53; and The William J Burns Internation-
al Detective Agency 182 NLRB No 50
The business enterprise currently involved herein is
a motel known as Mission Valley Travelodge. In 1961,
the Charging Parties, collectively referred to as the
Union, entered into a collective-bargaining agreement
with the Restaurant-Hotel Employer's Council of San
Diego (herein the Association) which was scheduled
to terminate on November 1, 1969. In 1963, Del Webb
became the leasehold owner and operator of the motel,
operating under the name Del Webb's Hiway House.
On September 1, 1963, Del Webb's Hiway House entered
into a contract with the Union which was similar to
the Association contract. On May 13, 1964, Del Webb's
Hiway House joined the Association and agreed to
be bound by the association-union contract.
In October 1966, Del Webb's leased its interest in
Hiway House to Respondent National Motel Locations
Inc., which on October 19, 1966, assigned its leasehold
interest to a joint venture composed of Respondent
National, Respondents Pearsons and a Mr. and Mrs.
Miller. This joint venture operated as Hiway House
Hotel and, on October 21, 1966, it agreed to abide
by the association-union contract. It is not clear whether
Hiway House Hotel actually joined the Association.
When Hiway House Hotel took over the operation
of the motel, it also operated an adjoining restaurant,
bar, and coffee shop, as had Del Webb. The restaurant,
bar, and coffee shop were included under the collective-
bargaining agreement. On November 23, 1966, the food
and beverage operations were subleased to A. A. Stadt-
miller. On December 29, 1966, Respondent National
notified the Union that the food and beverage operations
would be terminated on December 31. Apparently
because of this combination of events the Trial Examiner
concluded that Stadtmiller's interest in the restaurant,
bar, and coffee shop ceased as of December 31, 1966.
Although there is evidence suggesting that all restaurant
employees were, in fact, terminated as of December
31, 1966, the record reveals that Stadtmiller was opera-
ting the restaurant, bar, and coffee shop as of the time
of the hearing herein. It is unclear as to whether the
food and beverage operations ever ceased for any period
of time. Moreover, the Union does not now claim the
employees of the restaurant, bar, and coffee shop and,
at the hearing, it declined to stipulate as to whether
it has continued to represent these employees.
On January 25, 1967, the standard Travelodge joint
venture agreement involved herein as executed. The
agreement designates Respondent Travelodge as the
party of the first part and provides it with a 25 percent
interest in the motel now known as Mission Valley
Travelodge. Respondent National has a 371 percent
interest, the Respondents Pearsons have 121h percent
(National and the Pearsons constituted two of the three
partners in the old joint venture and held a 50 percent
interest therein) and Respondents Mr. and Mrs. Lie,
the resident managers of Mission Valley Travelodge,
own the remaining 25 percent. Mr. and Mrs. Lie also
receive 10 percent of the adjusted room rental receipts
and their living quarters for their services as managers.
On February 1, 1967, Respondent National assigned
182 NLRB No. 52
TRAVELODGE CORP.
its leasehold interest in the restaurant, bar, and
coffeeshop to Mission Valley Travelodge.
The record indicates the following with regard to
the number of employees involved in the various trans-
fers. As of December 30, 1966, the combined motel
and food and beverage operations had a total of 16
employees in categories then claimed by the Union.
On December 31, eight employees (all presumably
involved in the food and beverage operations) were
laid off. When Mr. Lie assumed control of the motel
operations on January 25, 1967, the record suggests
that there were 12 persons then employed in categories
claimed by the Union. However, the Trial Examiner
found that there were only seven employees involved
in the motel takeover. In this regard, the record indicates
that the number of maids employed may fluctuate daily
depending upon the number of occupied motel rooms.
For the 4 months immediately following its inception,
the new joint venture undertook substantial remodeling
and built an addition to the motel. The motel remained
open continuously, albeit at a curtailed level of opera-
tions (70 percent closed the first month, 50 percent
the second, etc.).
In the interim, on February 3, 1967, Travelodge
received, pursuant to the association-union contract,
the Union's remittance form for its insurance fund.
Travelodge returned the form with a notation to the
effect that no contract existed between Mission Valley
Travelodge and any union. A subsequent union request
that Travelodge honor the contract was refused with
a denial by Travelodge that it had any contractual obliga-
tion. The 8(a)(5) and (1) allegations giving rise to this
proceeding resulted.
Here, the Charging Parties propose that the Respond-
ents honor a collective-bargaining agreement under cir-
cumstances far different from those involved in our
companion opinion in Burns.' The Union seeks to bind
the Respondents to a contract which was executed for
an 8-year duration with a multiemployer group. The
Respondents have never sought or been offered member-
ship in the Association. The association-union contract,
when originally applied, covered both motel and food
and beverage employees. Now, the restaurant, bar, and
coffee shop are operated independently of the motel,
which has itself undergone substantial alterations and
renovations. Furthermore, it is not clear whether the
food and beverage operations were ever terminated for
any period of time or whether the Union has continued
to represent the employees of the restaurant, bar and
coffee shop. The record is further confused regarding
the number of employees actually involved when the
Respondents assumed operational control of the motel.
Under all of the circumstances of this case we cannot
find, as in Burns, that there has been that degree of
continuity in the employing enterprise which would
require that the Respondents honor the collective-bar-
gaining agreement in issue . Thus, in refusing to make
the payments demanded by the Union herein, Respond-
R The William J Burns International Detective Agency, supra
371
ents have not in any manner violated Section 8(a)(5)
and (1) of the Act.
As we have found that Respondents have not violated
Section 8(a)(5) of the Act, as alleged in the complaint,
we shall dismiss the complaint in its entirety.
ORDER
Pursuant to Section 10(c) of the National Labor Rela-
tions Act, as amended, the National Labor Relations
Board hereby orders that the complaint be, and it hereby
is, dismissed.
TRIAL EXAMINER ' S DECISION
STATEMENT OF THE CASE
JAMES R. HEMINGWAY, Trial Examiner: Upon a
charge and amended charge filed on August 1, 1967,
and on November 9, 1967, respectively, by Local Joint
Executive Board of Culinary Alliance and Hotel Service
Employees Union Local 402, and Waiters & Bartenders
Union Local 500, herein called the Union, against the
persons named in the caption above, herein called
Respondents, a complaint issued on November 30, 1967,
alleging that Respondent had engaged in and was engag-
ing in unfair labor practices affecting commerce within
the meaning of Section 8(a)(5) and (1) of the National
Labor Relations Act, as amended, herein called the
Act. On December 14, 1967, the General Counsel issued
an amendment to the complaint. Respondents' answer,
filed on January 5, 1968, denied the Board's jurisdiction
and denied the alleged unfair labor practices.
Pursuant to notice, a hearing was held at San Diego,
California, on February 27, 1968, before me.
At the close of the hearing, the parties were given
time to file briefs, and this time was subsequently extend-
ed to March 27, 1968, at which time briefs were received
from all parties. All have been considered.'
From my observation of the witness and upon the
entire record in the case, I make the following:
FINDINGS OF FACT
1. THE BUSINESS OF RESPONDENTS
The persons named as Respondents in the caption
of this case, on January 25, 1967, executed a standard
' [Certain errors in the transcript have been noted and corrected ]
On April 2, 1967, the undersigned received a motion from the General
Counsel to correct the transcript by adding ( 1) a stipulation and (2)
a question by General Counsel's counsel and an answer thereto by
the witness , Lie Counsel for Respondents and Counsel for the Union
both consented to the additions Since all parties concur in the stipulation,
I accept it, but I find it unnecessary to amend the transcript in order
to receive it As to the second addition desired , since the General
Counsel does not state the portion of the transcript where such question
and answer were omitted by the Reporter , I deduce that the question
and answer were not actually put and given at the hearing but that
all parties are agreed that the question , if put , would have been answered
by the witness , Lie, as shown in the motion I shall, therefore , accept
this as a stipulation (since all agree to the additions) without making
any physical change in the transcript
372 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
TraveLodge joint .venture agreement to operate a nonre-
sidential motel in San Diego , California , under the name
of Mission Valley TraveLodge . During the 12-month
period commencing April 1 , 1967, and projected to March
31, 1968 , the Respondent derived gross revenue in an
amount estimated as between $340,000 and $350,000.
The complaint alleges, but the answer denies, that
Respondent , during the same period of time, would
purchase or would have purchased , materials valued
in excess of of $50 ,000 which were or would be shipped
from points outside the State of California either directly
to Respondent or directly to various firms located within
the State of California , which in turn would ship the
same materials to Respondent . The General Counsel
did not offer any proof of this allegation but rested
on the allegation (admitted in the Respondent ' s answer)
that TraveLodge Corporation (herein called TraveL-
odge), a California Corporation , engaged in the business
of owning and operating motels, licensing individual
motel operators to hold themselves out as operators
of TraveLodge motels, and forming joint ventures to
operate TraveLodge motels throughout the United States
and Canada ,2 annually derived a gross revenue in excess
of $500,000 and derived revenue in excess of $50,000
from operations outside the State of California. The
Respondent has purchased all of its supplies , with minor
exceptions , from Balboa Supply Company, a subsidiary
of TraveLodge.
If TraveLodge's total operations are taken into
account , the commerce figures under the Board ' s formula
for determining whether or not to take jurisdiction would
easily be reached . But if the commerce data is to be
limited to the Mission Valley TraveLodge , the General
Counsel has failed to adduce sufficient evidence to satisfy
the Board ' s dollar requirements . Under the joint venture
agreement , TraveLodge has a 25 percent interest in
the Mission Valley TraveLodge . Another 25 percent
interest is owned by husband and wife Lie , who are
given the management rights, while 12th percent is owned
by another husband and wife team , the Pearsons, and
37th percent is owned by National Motel Locations,
Inc., a New York corporation, herein called National.
No commerce data was offered concerning National.
Although TraveLodge has only a one-fourth interest,
it calls itself "first party" in the joint venture agreement.
The remaining joint venturers combined are called sec-
ond party , and the agreement gives the first party an
equal voice in the conduct of the business subject to
stated delegated duties regarding maintenance and opera-
tion . Although , by the joint venture agreement, the
second party has a right to hire , at the expense of
the joint venture , employees or independent contractors
needed to maintain the motel in a clean , sanitary , orderly,
and neat condition , the hire of other employees (even
though at the expense of the second party) is subject
to approval of TraveLodge . TraveLodge has the right
to inspect the motel at all resonable times and, upon
Y The joint venture agreement shows that the name TraveLodge
is registered not only in the United States and Canada but also in
Mexico
written notice, to assume active management without
compensation for 5 days in any 3-month period. The
second party is required to cooperate with owners and
managers of other TraveLodge inns with regard to com-
mon problems and policies and to abide by the operating
policy decisions of a majority of the area representatives
in their coordinating committee meetings. Management
rights belong to those owning not less than 50 percent
interest , but in the event of a sale by second party
of less than their full interest , TraveLodge has the
right to designate who shall manage the motel, occupy
the manager ' s quarters , and receive compensation for
managing the inn . Management rights do not pass to
the personal representative of the second party. In the
event that rights of second party pass to a , personal
representative or in the event of a sale of less than
a 50 percent interest by second parties, TraveLodge
has the right to designate who shall manage the motel.
The second party is required to account to TraveLodge
daily for receipts , disbursements , cash on hand and
in bank deposits . All account books are kept at TraveL-
odge ' s accounting department at El Cajon , California.
A guest at any TraveLodge may telephone free any
other TraveLodge for a reservation . Because of the
degree of control reserved to TraveLodge and because
the Mission Valley TraveLodge is held out to the public
as one of a chain of TraveLodge motels, I find that
commerce of Respondents ' motel should be considered
in conjunction with that of TraveLodge' s generally.
Hence , I find that TraveLodge and the other Respondents
herein are a single employer within the meaning of
Section 2(2) of the Act and, inasmuch as the commerce
facts concerning TraveLodge 'alone suffice to meet the
Board ' s commerce standards , I find that the Board has
jurisdiction and that it will effectuate the policies of
the Act to assert jurisdiction in this case.3
II. THE LABOR ORGANIZATION INVOLVED
Local Joint Executive Board of San Diego (herein
called the, Union) comprises Waiters and Bartenders
Union Local No. 500 (herein called Local 500) and
Culinary Alliance and Hotel Service Employees Union
Local No. 402 (herein called Local 402). The Union,
in 1961, entered into a collective-bargaining agreement
with Restaurant-Hotel Employers' Council of San Diego,
Inc. (herein called the Association) on, behalf of its
members for a term ending November 1, 1969. This
agreement covered, in addition to others, all motel
employees (housekeeping, service, and maintenance)
except employees at the front desk. The Union is a
labor organization admitting to membership employees
of Respondent
8 Pacific Hosts, Inc-Padre Trails Motel Corp , 156 NLRB 1467,
Horizon House , etc , 151 NLRB 766
TRAVELODGE CORP.
III. UNFAIR LABOR PRACTICES
A. The Union's Relation to Respondent's Predecessors
In 1963, 2 years after the Union signed its agreement
with the Association, Del Webb, operating a chain of
seven to nine motor hotels, became the leasehold owner
and operator of the motel location here involved, and
it was operated under the name of Del Webb's Hiway
House. On September 1, 1963, Del Webb's Hiway House
entered into a collective-bargaining agreement similar
to that of the Association. Thereafter Del Webb's Hiway
House became a member of the Association and on
May 13, 1964, the Association gave the Union notice
that Del Webb's Hiway House had joined the Associa-
tion. By the terms of the contract, this automatically
brought Del Webb's Hiway House under the Union-
Association collective-bargaining agreement, an agree-
ment which contained a union-shop clause. In October
1966, Del Webb's leased its interest in the Hiway House
motel location to Respondent National, who on October
19, 1966, assigned its leasehold interest so acquired
to a joint venture composed of National, the Respondent
Pearsons, and Robert and Victoria Miller, husband and
wife. This joint venture called itself Hiway House Hotel.
On the same day, October 21, 1966 (according to a
stipulation received at the hearing), Hiway House Hotel
agreed to abide by the terms of the agreement between
the Union and the Association, under which Del Webb's
Hiway House operated. It does not appear whether
or not Hiway House Hotel was a member of the Associa-
tion. The agreement of Hiway House Hotel to a abide
by the terms of the Association contract is evidenced
by a letter written by the Union to "Mr. Kaneb" in
care of Hiway House Motel and confirmed by the signa-
ture of E. J Kaneb, who signed "Hi-Way House."
According io a stipulation received after the close of
the hearing, Edward Kaneb was, during the time that
Hiway House Hotel operated the motel, an official of
Respondent National.
When Hiway House Hotel first took over the operation
of the motel, it operated it in conjunction with an
adjoining coffee shop, restaurant, and bar, as had Del
Webb. The Association contract covered employees of
those operations as well as employees of the motel
proper. On November 23, 1966, Hiway House Hotel
subleased the coffee shop, restaurant, and bar to a
man named A. A. Stadtmiller. There is no evidence
as to whether or not Stadtmiller assumed the obligations
of the Union's contract. On December 29, 1966, National
wrote to San Diego Bartenders and Culinary Workers
Union, Local 402 (one of the two unions making up
the Joint Board) stating that because National was losing
large sums of money in the operation of the restaurant,
the restaurant would be permanently closed on December
31, 1966, and that National planned no more food or
beverage operations after that date. Seven employees
were terminated on that date. Stadtmiller's interest
apparently died at the same time. The motel employees
continued to be employed by Hiway House Hotel until
January 25, 1967.
B. Respondents' as Successors
373
On the latter date, January 25, 1967, the joint venture
agreement between the individual Respondents was exe-
cuted, and the joint venture known as Hiway House
Hotel was dissolved. National, on February 1, 1967,
assigned its leasehold interest in the motel to the new
joint venture, known as Mission Valley TraveLodge.
The two Lies were designated managers of the Mission
Valley TraveLodge in the joint venture agreement. In
addition to their return on their 25 percent interest
in the joint venture, the Lies receive 10 percent of
the adjusted room rental receipts and the manager's
quarters for their services as managers.
Lie (when used in the singular meaning the husband)
notified the motel employees, seven in number, that
they were terminated but that he was rehiring them.
All obligations to the employees were paid by Hiway
House Hotel up to the date Mission Valley TraveLodge
took over, the books of that joint venture were closed
and were sent to National's home office at Rochester,
New York.
The new joint venture borrowed about $116,000 from
a bank and set about the renovation of the motel.
In all, it spent close to $150,000 in painting inside
and out; installing all new furniture and furnishings;
landscaping, including installation of a lawn sprinkler
system; the building of a two-story addition (the lower
floor of which became the managers' apartment); the
addition of a swimming pool and new telephone equip-
ment . During the period of renovation, the motel was
70 percent closed for one month and then gradually
was opened. At the end of the second month, about
50 percent was closed. The renovations took about
4 months to complete. During this period, the motel
employed only as many employees as were needed
to keep up the curtailed operations.4
C. Union's Demand for Performance and Respondents'
Refusal
On February 3, 1967, the Union's remittance form
for its insurance fund' was received by Respondent
TraveLodge. Cliff Emery of TraveLodge returned the
form with a memorandum saying that "there does not
exist a union contract between the Mission Valley Tra-
veLodge and any union." This reply was referred by
the Union to its lawyer, who, on March 2, 1967, wrote
to Emery at El Cajon, stating:
Please be advised that as the successor to Mr.
Edward A. [J.?] Kaneb, as the employer signatory
to the current collective-bargaining agreement cov-
ering San Diego Hiway House, 1201 Camino del
Although the motel was partially open to the public, it was only
80 to 90 percent occupied
' This is a list of employees of the employer, their social security
numbers, number of shifts worked during the past month, hiring date
of new employees, and termination dates of any terminated Under
the Association contract with the Union, a certain amount of money
per employee-shift worked was obliged to be remitted to the Union's
health and welfare insurance fund
374 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Rio," San Diego , California , you are bound to per-
form that contract according to its terms for its
duration.
Your failure to complete the remittance forms
pursuant to the trust provisions of that contract
is a violation thereof.
Our client and this office -on its behalf will enforce
its agreement with you as a successor employer
according to its terms.
You can avoid the expense of appropriate
enforcement action by notifying the undersigned
of your prompt compliance.
Emery referred the foregoing letter to Allan Frostrom,
resident counsel of TraveLodge, who replied:
To the best of our knowledge there is no collec-
tive bargaining agreement in force with regard to
the TraveLodge at 1201 West Hotel Circle, San
Diego. All employees were terminated , and while
some were rehired , I do not know how many.
The motel is known as the Mission Valley TraveL-
odge and is owned and operated under the terms
of a standard TraveLodge Joint Venture Agreement.
Since we have entered into no contract with
Culinary Local. 402 or the Bartenders Local 500,
nor any other union, we must take exception to
your letter.
D. The Appropriate Unit, and the Union's Majority
Therein
The General Counsel has not argued the unit question
except to allege that a unit limited to the motel employ,
ees, excluding those at the front desk, is appropriate.7
The complaint also alleges that Respondent is a successor
to National. The General Counsel's theory is, therefore,
that the contract was binding on the successor and
that there was a refusal to abide by the terms of the
contract-not on the theory , of a request and refusal
to bargain for a new agreement . The description of
the unit and of the Union 's majority therein appear
to be offered to conform to the traditional pattern in
cases under Section 8(a)(5) of the Act, although it is
the failure to abide by the contract that is alleged to
be the refusal to bargain . Yet, it is difficult here to
find any conformance to the normal pattern . The unit
alleged is a unit of all employees of all members of
the, Association, but now it is argued that a unit of
Respondents' motel employees is appropriate.
The insurance form which was returned by Emery
to the Union was not introduced in evidence . I assume
that it was not addressed to TraveLodge but to Hiway
House, inasmuch as it must have covered the month
of January 1967, when Hiway House was still operating
h If that had been the name of the street earlier, it had not been
used since 1964 or before The address was 1201 W Hotel Circle
The unit alleged by the complaint to be appropriate was
All employees coming under the jurisdiction of the Union , including
kitchen and stockroom employees, lunch and dining room employ-
ees, fountain and stand employees , cafeteria employees , bartenders
and cocktail lounge employees , bartenders , special short shifts,
housekeeping and service department employees and motel em-
ployees
the motel . Hence, that form would not have been a
request to the Respondents to bargain . The complaint
alleges a request to bargain on March 2, 1967. But
the letter written by the Union ' s counsel to TraveLodge
on March 2, 1967, cannot be deemed to be a request
to bargain . It was a demand for compliance with the
terms of its contract with Hiway House , not a request
otherwise to bargain with the Union. Nor was this
letter treated by the General Counsel as a request to
bargain in the conventional pattern ,, because if the
Union' s letter of March 2, 1967, had been the request
relied on, and if the reply of TraveLodge, dated March
6, 1967, were to be taken as the refusal to bargain,
then it would have been incumbant on the General
Counsel to prove the Union' s majority on March 6,
1967. No attempt was made to do so . The General
Counsel relied entirely on a presumption of continued
majority and on the assumption that a successor is
bound ipso facto by the contract entered into by the
predecessor . No alter ego theory was relied on in the
pleading although , in the briefs of the General Counsel
and the Union, the identity of two of the four Respond-
ents with the owners and operators of the previous
joint venture were pointed up.
I do not have much doubt that Respondents were
successors to Hiway House Hotel , the previous joint
venture . Although a great deal of money was spent
on improving the property, the essential nature of the
business continued with only a partial interruption, and
the employees retained by Respondents' continued to
perform the same duties.'
Although I incline to the view that a presumption
of continued majority should be indulged in only where
a union establishes its majority properly in the first
instance , either by Board certification or by a bona
fide card check (facts which are now shown here),
this may no longer be an open question. It has been
held that a presumption of majority arises from a prior
recognition and collective bargaining by a predecessor
without proof that the recognition was based on the
employees ' choice.10 This is not to say, however, that,
if the facts show affirmatively that a union-shop contract
was imposed on employees who did not choose to
be represented by a union, the mere existence of a
contract would give rise to a presumption of majority.
And if a union -shop contract is effected merely by
the fact that an employer joins an association of employ-
ers who has agreed that new members would become
bound by the contract , the coercion of the new member's
employees to join the union under a union-shop clause,
can, in my opinion , be justified , if at all, only on
the basis that the new member's employees are absorbed
" The ritual of discharge and immediate rehire does not alter the
fact of continuation of the employment relationship.
9 Maintenance Incorporated, 148 'NLRB 1299, Valleydale Packers,
Inc., of Bristol,' 162 NLRB 1486
10 Shamrock Dairy, Inc , 124 NLRB 494 The Board presumed the
legality of the recognition and of the contract , because otherwise the
predecessor would have been guilty of an unfair labor practice. This
might be called a presumption of continued majority based on a presump-
tion of legality of recognition See also Valleydale Packers, Inc , of
Bristol , 162 NLRB 1486
TRAVELODGE CORP 375
into a larger existing unit where there is already contract
coverage
Before Del Webb's Hiway House Hotel, Inc , joined
the Association, it had already executed a union-shop
contract with the Union for employees coming under
the jurisdiction of both locals of the Union This contract
had an expiration date of November 1, 1966, with an
automatic renewal clause unless terminated on 60 days'
notice prior to that date The General Counsel and
the Union do not, however, make any contention that
that contract was still in existence When Del Webb's
Hiway House Hotel, Inc , joined the Association in
1964, the Association contract apparently was recognized
as superseding the original agreement , and it was the
Association contract to which Webb's successor, Hiway
House, agreed to be bound, although that successor
was not shown to be a member of the Association
At the time when the successor Hiway House contract-
ed separately with the Union, it was, in effect, carving
its employees out of the unit of employees of all Associa-
tion employers and establishing a separate unit of its
individual employees in its restaurant, coffee shop, bar,
and motel Again, its employees had imposed on them
a union-shop contract with no opportunity to make
the choice of representative for themselves My personal
feeling in the matter is that this would be a good time
to give the employees a chance to express themselves
However, I find, for reasons hereinafter stated, that
it is unnecessary to pass on the appropriateness of
the smaller unit or on the question of the Union's
majority either
E Refusal to Bargain
This is not a case where the successor is called
upon to remedy an unfair labor practice of his predeces-
sor The predecessor is not alleged to have committed
any unfair labor practice Nor is it a case of a refusal
to negotiate a new contract The complaint is that
Respondents, as successor to an employer who had
entered into a contract with the Union, are automatically
bound by that contract by virtue of their successorship
In support of this theory, the General Counsel and
the Union, in their briefs, rely on John Wiley & Sons
v Livingston, 376 U S 543, and Wackenhut Corporation
v Plant Guards, 332 F 2d 954 (C A 9), which followed
Wiley
Neither of these cases arose as an unfair labor practice
case, however Both were concerned with the survival
of arbitration rights The Union also cites Webster Wood
Industries, Inc , 169 NLRB 67 In that case, a union
had been certified by the Board and had commenced
negotiations but had not reached a contract The Board
found a duty on the part of the successor to continue
to bargain collectively with the union That case is
not like this, therefore, where the Union in claiming
only that Respondents failed to perform a contract
entered into by their predecessors The Union also cites
Valleydale Packers, Inc , of Bristol, 162 NLRB 1486
Although the issue was there raised as to whether or
not a successor was bound by its predecessor's collec
tive-bargaining agreement, the Trial Examiner did not
decide the issue in his Decision issued on December
15, 1965, but referred that issue to the Board The
Board decided on February 7, 1967, that in view of
the expiration of the contract on March 6, 1967, "no
useful purpose would be served in determining the
Respondent's liabilities, if any, under its predecessor's
collective-bargaining agreement in this case " In a later
case, Glen Goulding dl bl a Fed-Mart, 165 NLRB 202,
the Trial Examiner was presented with this issue, and
in this case he decided that the Respondent was bound
by his predecessor's collective-bargaining agreement
The Board in that case said, "While we agree with
and adopt the Trial Examiner's findings with respect
to Respondent's duty to bargain we are unwilling
on the instant record to hold that the successor employ-
er's statutory duty to bargain obligation extends beyond
the fundamental duty to recognize and bargain in good
faith with the labor organization that has been designated
by the predecessor's employees " The Board went on
to state that there were uncertainties in that case that
the contract had been entered into through arms length
bargaining, and, since the contract had been signed
only 13 days before the successor took over the business,
the contract did not appear to have been implemented
That there is no precedent for the proposition that
a successor is bound by virtue of being a successor
to give effect to a collective-bargaining agreement entered
into between the predecessor and the employees' collec-
tive-bargaining representative just by virtue of successor-
ship to the business is clear, but even in cases where
the issue has heretofore been raised there was a charge
of refusal to bargain aside from the refusal to give
effect to the contract
I find a distinction between an alleged breach by
Respondents of a contract made by their predecessor
and a breach of a statutory duty to bargain The former
is based solely on the contract and successor relationship
The latter is based on a statutory duty to meet with
the Union and to negotiate a collective bargaining agree-
ment
The Board has been given no authority to enforce
contracts as such If the Union has a contract with
the Respondents at all, a forum is provided in the
Federal District Courts under Section 301 of the Act,
or in a State court In Charles Dowd Box Co v Courtney,
368 U S 502, the Court said, with reference to the
history of Section 301 of the Act
The bill which the Senate originally passed
contained a provision making a breach of a collec-
tive-bargaining agreement an unfair labor practice
subject to the jurisdiction of the National Labor
Relations Board, S 1126, 80th Cong , 1st Sess ,
§§8(a)(6) 8(b)(5) as well as a provision conferring
jurisdiction upon the Federal Courts over suits
for violation of collective -bargaining agreements
In conference, however, it was decided to make
collective-bargaining agreements enforceable only
in the courts `Once parties have made a collective-
bargaining contract,' the conference report stated,
`The enforcement of that contract should be left
376 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
to the usual processes of the laws and not to the outcome of the case I find that there is involved
the National Labor Relations Board ' H R Conf here only an alleged breach of contract and not a refusal
Rep No 510, 80th Cong , 1st Sess , p 42 to bargain within the meaning of Section 8(a)(5) of
the Act
The additional circumstance that a successor to he Upon the foregoing considerations , I recommend that
employer contractor is involved is not enough to alter the complaint be dismissed in its entirety