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National Labor Relations Board v. Babad

decided: March 4, 1986.

NATIONAL LABOR RELATIONS BOARD, PETITIONER,
v.
CHAIM BABAD, BERNARD STEINMETZ AND EMANUEL STEINMETZ, A CO-PARTNERSHIP D/B/A J.R.R. REALTY CO., RESPONDENT



Petition by the National Labor Relations Board for enforcement of its order in Chaim Babad, Bernard Steinmetz and Emanuel Steinmetz, A Co-Partnership d/b/a J.R.R. Realty Co., 273 N.L.R.B. No. 189 (1985). Petition for enforced granted.

Author: Meskill

Before LUMBARD, VAN GRAAFEILAND and MESKILL, Circuit Judges.

MESKILL, Circuit Judge:

The National Labor Relations Board (NLRB or Board) found that respondent J.R.R. Realty Co. (J.R.R.) had violated subsections 8(a)(1), (3) and (5) of the National Labor Relations Act (Act), 29 U.S.C. ยงยง 158(a)(1), (3) and (5) (1982). The Board seeks enforcement of a remedial order requiring J.R.R. to cease and desist from the unfair labor practices, to recognize and bargain with intervenor, Local 32B-32J, Service Employees International Union, AFL-CIO (union), and to offer reinstatement and back pay to the discharged employees.

The petition to enforce the order is granted.

BACKGROUND

This labor dispute concerns events that took place in 1980 and 1981 at an apartment building in Queens, New York. The building was owned by JARU Properties, Inc. and ASCR Realty, Inc. (JARU and ASCR) and was managed by J.A.R. Management Corp (J.A.R.). J.A.R. employed six members of Local 32B-32J to run the building. The collective bargaining agreement between J.A.R. and the union contained a provision which stated that if J.A.R. sold the apartment building, it would require the purchaser to agree in writing to adopt the agreement and to offer employment to all of the employees.

In November 1980, JARU and ASCR entered into a contract to sell the apartment building to Joshua Estates, Inc., a nominee corporation for J.R.R. Realty.*fn1 The sale contract provided that the purchaser would take title "subject to" a variety of specified permitted encumbrances. The collective bargaining agreement with the union was specifically listed as one of the permitted encumbrances and a copy of the agreement was attached to the sale contract. J. App. at 179.

On March 31, 1981, at the title closing, attorney Harry Newman, on behalf of Joshua Estates, and Chaim Babad, on behalf of J.R.R. Realty, executed an assignment of the sale contract to J.R.R. Realty. At the same time, the former owners and J.A.R. specifically assigned the collective bargaining agreement between J.A.R. and the union to J.R.R. Realty. Finally, Joshua Estates and J.R.R. executed an indemnity agreement in which they agreed that title to the building was subject to all obligations of the sellers under the leases, contracts and agreements in effect on the closing date and to hold the sellers harmless from any claims and liabilities arising thereunder. Immediately after the closing, Babad and Newman told the attorney for JARU and ASCR that J.R.R. intended to replace all of the building employees.

On April 1, 1981, the day following the closing, one of J.R.R.'s partners, Chaim Babad, sent a family of five employees to live in and staff the building. That same day, Babad informed the superintendent, an elevator operator and a porter that they were discharged. Babad offered these three employees money to give up their jobs. Only one of the three accepted the offer. On April 2, the other two employees contacted the union. On April 3 union-organized picketing of the building began. Several days later, Babad again tried to induce the superintendent to leave his job and asked the superintended to communicate Babad's offer to the other employees to make a "better deal but [with]out the union." J. App. at 45-47. Picketing continued throughout most of April. Later in the month, Babad and the union tried to settle the dispute. An agreement between J.R.R. and the union was prepared but never signed. Babad continued to negotiate directly with the six employees. By the end of the month all six employees had reached individual settlements with Babad; these settlements were conditioned upon release of all the employees' claims against J.A.R. and J.R.R.

The union filed charges with the NLRBB in April and May of 1981. The union alleged that J.R.R. committed unfair labor practices under subsections 8(a)(1), (3) and (5) of the Act when it refused to recognize and bargain with the union, when it discharged the employees because with the union, when it discharged the employees because of their union membership and when it bypassed the union and negotiated individually with the employees.*fn2 At about the same time, the union filed a notice of intention to arbitrate against J.A.R. and J.R.R. in state court.*fn3

In NLRB proceedings, the ALJ found that J.R.R. had committed an unfair labor practice when anti-union sentiment led it to discharge the predecessor's employees. The ALJ also found that J.R.R. was a successor employer under NLRB v. Burns International Security Services, 406 U.S. 272, 32 L. Ed. 2d 61, 92 S. Ct. 1571 (1972), and thus had an obligation to recognize and bargain with the union. The ALJ concluded that J.R.R. breached that obligation when it bypassed the union and dealt individually with the employees.

A three member panel of the Board affirmed the ALJ's findings, conclusions and rulings. It adopted the ALJ's recommended order with a minor modification not relevant here. The Board now petitions for enforcement of its order. In response, J.R.R. contends that it did not assume the collective bargaining agreement and thus had no duty to bargain with the union or to recognize the union as the representative of the discharged employees. J.R.R. also ...


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