ON APPLICATION FOR ENFORCEMENT AND PETITION FOR REVIEW OF AN ORDER OF THE NATIONAL LABOR RELATIONS BOARD
and Boyle,*fn* Senior District Judge.
Luis F. Padilla for Horizons Hotel Corporation.
David Habenstreit, Attorney, National Labor Relations Board, with whom Frederick L. Feinstein, General Counsel, Linda Sher, Acting Associate General Counsel, Aileen A. Armstrong, Deputy Associate General Counsel, and Linda Dreeben, Supervisory Attorney, were on brief for National Labor Relations Board.
BOYLE, Senior District Judge. This case presents issues concerning a final order of the National Labor Relations Board (the Board) which concluded that Horizons Hotel Corporation d/b/a Carib Inn of San Juan (Horizons) engaged in unfair labor practices in violation of Section(s) 8(a)(1), (3), and (5) of the National Labor Relations Act (the Act), 29 U.S.C. Section(s) 158(a)(1), (3), (5). The claims of unfair labor practices arose in part from the conduct of a bankruptcy trustee who was in possession of the hotel at the time Horizons purchased it. The Board petitions us under Section(s) 10(e) of the Act, 29 U.S.C. Section(s) 160(e), to enforce its order, which adopted with modification the opinion and recommended order of the administrative law judge (ALJ). 312 N.L.R.B. No. 200 (Nov. 22, 1993). Horizons petitions us under Section(s) 10(f) of the Act, 29 U.S.C. Section(s) 160(f), to review and vacate the Board's order, asserting the following: the Board lacked jurisdiction to act in this case; the conclusions of the ALJ and the Board are contrary to law; and the factual determinations of the ALJ, adopted by the Board, are not supported by substantial evidence. We conclude that the Board's order adopting the ALJ's opinion and proposed order is without error and is to be enforced as it stands. See 29 U.S.C. Section(s) 160(e), (f).
I. STANDARD OF REVIEW
The appropriate standard of review is provided in Section(s) 10(e) of the Act, 29 U.S.C. Section(s) 160(e): "The findings of the Board with respect to questions of fact if supported by substantial evidence on the record considered as a whole shall be conclusive." Thus, a finding of the Board that the Act has been violated is upheld "as long as the finding is supported by substantial evidence . . . even if we would have reached a different conclusion." 3-E Co., Inc. v. NLRB, 26 F.3d 1, 3 (1st Cir. 1994)(citing 29 U.S.C. Section(s) 160(e)). In reviewing a Board decision, great weight is afforded the credibility determinations of the ALJ, as he or she had the opportunity to observe the witnesses testify, see id.; Holyoke Visiting Nurses Ass'n v. NLRB, 11 F.3d 302, 308 (1st Cir. 1993); therefore, credibility determinations are disturbed only where it is apparent that the ALJ "overstepped the bounds of reason." 3-E Co., Inc., 26 F.3d at 3; Holyoke Visiting Nurses Ass'n, 11 F.3d at 308 (citing NLRB v. American Spring Bed Mfg. Co., 670 F.2d 1236, 1242 (1st Cir. 1982)).
The record supports the ALJ's finding of the following facts, adopted by the Board. See 3-E Co., Inc., 26 F.3d at 2 (citing Cumberland Farms, Inc. v. NLRB, 984 F.2d 556, 558 (1st Cir. 1993)).
A. Hotel in Bankruptcy: November 1981 - May 14, 1986
In 1981, the Carib Inn hotel and casino in San Juan, Puerto Rico, was owned by the Carib Inn of San Juan Corporation (Carib Inn Corporation). In November 1981, Carib Inn Corporation filed a petition for bankruptcy in the U.S. Bankruptcy Court for the District of Puerto Rico under chapter 11 of Title 11, 11 U.S.C. Section(s) 1101, et seq. The chapter 11 proceeding was converted to a chapter 7, 11 U.S.C. Section(s) 701 et seq., proceeding in November 1985. On November 21, 1985, the Bankruptcy Court appointed H‚ctor Rodr¡guez-Estrada (Rodr¡guez) trustee under 29 U.S.C. Section(s) 1104. As trustee, Rodr¡guez was ordered to liquidate the assets of the bankruptcy estate.
At all relevant times, employees of the hotel's service and casino units1 were represented by Uni¢n de Trabajadores de la Industria Gastron¢mica de Puerto Rico, Local 610, Hotel Employees and Restaurant Employees International Union, AFL-CIO (the Union). The serviceand casino-unit employees were employed under the terms of a collective bargaining agreement.2
In November or December 1985, Horizons considered the prospect of purchasing the Carib Inn. Horizons submitted a bid for the bankruptcy estate in February 1986. Prior to the bid, Horizons's president, Benito Fern ndez, spent time at the hotel, investigating its operation and its physical grounds. At some point, Fern ndez began to occupy an office at the hotel. The office was located next to that of Rodr¡guez. Fern ndez and Rodr¡guez shared a secretary.
On April 3, Rodr¡guez met with Ileana Qui¤ones, general manager of Professional Employment Center (PEC), a local employment agency. At the meeting, Rodr¡guez told Qui¤ones that PEC's services were needed because the hotel was operating under new management which sought to hire new employees. He asked her if there was a possibility that employees hired through PEC would be union workers. She responded that they would not. Rodr¡guez told Qui¤ones that he would consider retaining PEC if she could guarantee him that there would be no risk of a union at the hotel. He requested that Qui¤ones indicate in writing that there was no possibility of a union presence.
The following day, April 4, 1986, Qui¤ones sent a letter to Rodr¡guez. The letter was addressed as follows: "Sr. H‚ctor M. Rodr¡guez-Estrada[,] Horizons Hotel" -- Qui¤ones was of the belief that Rodr¡guez was employed as a manager of Horizons. A summary of the items discussed at the previous day's meeting was included with the letter. The first item listed was as follows: "1. There is no possibility for a Union." On May 12 or 13, 1986, Frankie Rosado-Garc¡a (Rosado), a waiter in one of the hotel's restaurants, and a union steward, while on duty, served the Union's president, who was seated at a table. After Rosado waited on him, Rodr¡guez, who was present in the restaurant, approached Rosado, and said: "[A-ha] . . . you betrayed me." Rosado later went to Rodr¡guez' office to question him about the comment. Rodr¡guez asked Rosado if the Union's president had come "to stop the hotel." He then told Rosado that if the Union continued to bother him, he would fire all union employees. On another occasion in May, Rodr¡guez told Rosado that the Union was not backing the hotel employees. He said that the Union had failed to collect from the Federal court money owed to the employees. He further stated that there was no union in Puerto Rico that would defend the employees.
B. Sale of the Hotel: May 14, 1986 - May 31, 1986
On May 14, 1986, a deed was executed whereby Horizons purchased the Carib Inn from Rodr¡guez. The deed provided that possession of the hotel property would be turned over to Horizons on May 31, 1986.
On May 19, 1986, Rodr¡guez hired Juan Rafael G¢mez (G¢mez) as resident manager. That day, Rodr¡guez circulated a memorandum (May 19 memorandum) announcing the same. Fern ndez had signed the memorandum, expressly indicating his approval of G¢mez' hiring.
On May 21, 1986, Rodr¡guez circulated a memorandum (May 21 memorandum) to all employees of the Carib Inn, notifying them that Horizons would assume control of the hotel on June 1, 1986, and that all employees would be terminated on May 31, 1986. The memorandum advised the employees that they could apply for positions with Horizons by submitting applications at a recruiting office set up by Horizons in a nearby condominium. The recruiting office would accept applications for two days only.
Later that day, May 21, F‚lix Ram¡rez, the Union's general steward, and Valent¡n Hern ndez, the Union's secretary and treasurer, went to Rodr¡guez' office to discuss with him the memorandum. Rodr¡guez threatened not to meet with them. He told them that he didn't have to talk with them because they no longer represented the hotel's employees. He stated: "[T]he Union is out," and "Horizons has nothing to do with the Union." Rodr¡guez finally agreed to meet with them, however, after Hern ndez threatened to report his conduct to the Secretary of Labor for the Commonwealth of Puerto Rico. During the meeting, however, Rodr¡guez told Ram¡rez and Hern ndez that they should discuss with G¢mez any concerns they may have concerning hotel administration.
Prior to the May 21 memorandum, PEC had begun soliciting applications for positions at the hotel. Qui¤ones understood that PEC was to be responsible for hiring Horizons's new employees. It advertised in a local newspaper and collected applications and relevant information on potential employees. It conducted interviews and informed Rodr¡guez of appealing candidates. Rodr¡guez, however, advised Qui¤ones that PEC would do no independent hiring, but rather would hire only those individuals whom it was instructed to hire.
Horizons's recruiting program, announced in the May 21 memorandum, was carried out. A representative of PEC was present throughout. Several days after the program, Rodr¡guez provided G¢mez a list of individuals to interview. Interviews were thereafter conducted at the hotel. A representative of PEC was present during the interviews. Not one employee of the Carib Inn was interviewed. At one point, Rodr¡guez told a Carib Inn employee that he had been authorized to hire new employees for Horizons.
C. Transfer of Control: June 1, 1986
On June 1, 1986, Horizons assumed possession of the hotel property. Since that date, Horizons has continued the business operations previously conducted by Rodr¡guez as trustee, and by the Carib Inn Corporation, using substantially the same facilities and equipment, and providing the same services, with the exception of the casino, which ceased operation on June 23, 1986.
After the transfer of possession, no service-unit employees previously employed at the hotel were employed by Horizons, with the exception of several former unit employees hired in a supervisory or managerial capacity. See 312 N.L.R.B. No. 200 n.2. Fourteen of Horizons's twenty-four casino unit employees, however, were previously employed at the hotel. At no time did Horizons negotiate or enter into a bargaining agreement with the Union.
On June 1, 1986, Horizons hired Rodr¡guez as a consultant. He later became Horizons's general manager.
The Bankruptcy Court confirmed the sale of the Carib Inn to Horizons by order dated June 6, 1986.
D. The Present Action
The Union pursued claims against Horizons in August 1986. The Board issued a complaint and notice of hearing on September 30, 1987; an amended complaint and notice of hearing was issued on December 21, 1987. The amended complaint includes the following allegations: that Horizons interfered with, restrained, and coerced employees in the exercise of their rights in violation of Section(s) 8(a)(1) of the Act, 29 U.S.C. 158(a)(1), by creating the impression of surveillance of employees' union activities, threatening employees with discharge because of their union activities, and attempting to denigrate the Union in the eyes of employees; that Horizons refused to hire former service unit employees in violation of Section(s) 8(a)(3) of the Act, 29 U.S.C. Section(s) 8(a)(3); and that Horizons refused to bargain collectively with representatives of the Union in violation of Section(s) 8(a)(5) of the Act, 29 U.S.C. Section(s) 158(a)(5). The amended complaint alleges that much of the improper conduct was carried out by Rodr¡guez, acting as an agent of Horizons.
An ALJ conducted hearings on various dates from March 1989 through March 1991. The decision and proposed order issued on January 15, 1993. The ALJ concluded that Horizons violated Section(s) 8(a)(1), (3), and (5) of the Act, 29 U.S.C. Section(s) 158(a)(1), (3), (5). The Board, with modification, adopted the ALJ's rulings, findings, and conclusions. In re: Horizons Hotel Corp., et al, 312 N.L.R.B. No. 200 (Nov. 22, 1993). It amended the ALJ's proposed remedy and order, and ordered the following: that Horizons cease and desist from engaging in unfair labor practices; that it offer positions of employment to the 65 former hotel employees who were not hired by Horizons in violation of the Act; that it bargain collectively with the Union on request; that, on request, it cancel any changes in employment conditions which may have been instituted since it purchased the Carib Inn; that, in the event the casino resumes operation, it bargain with the Union concerning casino employees, and it offer positions to those identified former casino employees who were not hired; and that it preserve records and publish notice of the order.
Both the Board and Horizons petition this Court to act. The Board petitions us to enter an order enforcing its order. Horizons petitions us to review and vacate the Board's opinion and order. As grounds, Horizons asserts that exclusive jurisdiction over this matter lies with the bankruptcy court, because much of the allegedly improper conduct was committed by a bankruptcy trustee. Horizons further asserts that as a matter of law it cannot be held accountable for any improper conduct of Rodr¡guez, the bankruptcy trustee. Finally, Horizons argues that there is insufficient evidence to support the findings that Rodr¡guez was an agent of Horizons, and that Horizons violated Section(s) 8(a)(1), (3), and (5) of the Act, 29 U.S.C. Section(s) 158(a)(1), (3), (5).
We examine the issues.
Horizons asserts that, because this action concerns conduct of a bankruptcy trustee, it is within the exclusive jurisdiction of the bankruptcy court. In so arguing, it characterizes the present action as a "suit against the trustee." Horizons's argument is without merit. The issue was determined in In re: Carib-Inn of San Juan Corp., 905 F.2d 561 (1st Cir. 1990), a related action commenced by Horizons in the bankruptcy court to enjoin the Board from pursuing the present case. In Carib-Inn, we concluded that the Board had exclusive jurisdiction to determine the merits of the present case, as "[t]he [Board's] complaint . . . is directed solely at Horizons and seeks no remedy against the bankruptcy estate." Id. at 562. The cases cited by Horizons are inapposite. See Baron v. Barbour, 104 U.S. 126, 128, 131 (1881)(court of the District of Columbia has no jurisdiction to entertain suit against receiver appointed by a court of the State of Virginia without leave of the appointing court); Leonard v. Vrooman, 383 F.2d 556, 560 (9th Cir. 1967), cert. denied, 390 U.S. 925 (1968)(bankruptcy court has no jurisdiction to enjoin state action against trustee in bankruptcy for illegally seizing and possessing plaintiff's real property); Vass v. Conron Bros. Co., 59 F.2d 969, 970 (2d Cir. 1932)(bankruptcy court may enjoin action in state court against receiver in bankruptcy where not commenced with leave of the appointing court); In re: Campbell, 13 B.R. 974, 976 (D.Idaho 1981)(permission of the bankruptcy court is a prerequisite for state-court action against trustee in bankruptcy for acts done within his authority as trustee). Each concerns an action against a trustee or receiver in bankruptcy; the present case is not an action against the trustee in bankruptcy, Rodr¡guez, but rather against the purchaser of a bankruptcy estate, Horizons.
The Board acted within its jurisdiction under Section(s) 10 of the Act, 29 U.S.C. Section(s) 160, in pursuing the present claims, and under Section(s) 10(e) and (f), 29 U.S.C. Section(s) 160(e), (f), this Court has jurisdiction "of the proceeding and the question determined therein," and has the power "to make and enter a decree enforcing, modifying, and enforcing as so modified, or setting aside in whole or in part the order of the Board."
A. Rodr¡guez As Agent of Horizons
Horizons presents two objections to the ALJ's determination, adopted by the Board, that Rodr¡guez, the trustee in bankruptcy, acted as agent for Horizons prior to June 1, 1986, the date on which possession of the Carib Inn was transferred to Horizons. First, Horizons argues that as a matter of law, as purchaser of a bankruptcy estate it cannot be held accountable for the conduct of the bankruptcy trustee, Rodr¡guez, which occurred prior to the transfer of the estate. Second, it argues that the finding that Rodr¡guez was acting as agent for Horizons is not supported by substantial evidence.
The Act guarantees employees the right "to self-organize, to form, join, or assist labor organizations, to bargain collectively . . . and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection." 29 U.S.C. 157. The Act precludes employers from conducting unfair labor practices, as that term is defined in Section(s) 8 of the Act, 29 U.S.C. Section(s) 158. Employers may be liable for the unfair labor practices of their agents. See International Ass'n of Machinists v. NLRB, 311 U.S. 72, 80 (1940); 3- Co., Inc., 26 F.3d at 3-4; NLRB v. Uni¢n Nacional de Trabajadores, 540 F.2d 1, 8-9 (1st Cir. 1976), cert. denied, 429 U.S. 1039 (1977). Agents for whose unlawful conduct employers are responsible need not be employees. See Cagle's, Inc. v. NLRB, 588 F.2d 943, 947-49 (5th Cir. 1979); Uni¢n Nacional, 540 F.2d at 8-9.
An employer need not have actually authorized or subsequently ratified the conduct of its agent for it to be liable. 29 U.S.C. 152(13). Rather, an employer is liable for the unlawful conduct of its agent when, under all the circumstances, employees could reasonably believe that the agent was acting for and on behalf of management. See American Press, Inc. v. NLRB, 833 F.2d 621, 625 (6th Cir. 1987)(citation omitted); Uni¢n Nacional, 540 F.2d at 8-9.
Horizons contends that as a matter of law, a trustee in bankruptcy cannot be deemed an agent of the purchaser of the estate for whose unlawful conduct the purchase is liable. Horizons argues that the trustee's duties to the bankruptcy estate, and the transfer of the property "free and clear" of encumbrances, preclude the possibility. Horizons points to no authority whatever to support its contention. We find its argument unpersuasive. That Rodr¡guez may have been duty bound to act for the benefit of the bankruptcy estate is irrelevant and has no bearing on whether he acted on behalf of Horizons. Cf. Cagle's, Inc., 588 F.2d at 947 (private employer liable for the conduct of city chamber of commerce director). The fact that Horizons purchased the hotel "free and clear" of liens and encumbrances and that it did not expressly assume liability for the conduct of any prior owner of the estate is also irrelevant. See In Re: Carib Inn, 905 F.2d at 563-64. Horizons is not here being held responsible simply for the conduct or liability of a prior owner; it is being held responsible for its own unlawful acts, which were carried out through its agent, Rodr¡guez, who happened to control the property prior to the transfer of its possession to Horizons.
Horizons next argues that the finding that Rodr¡guez acted as its agent is not supported by substantial evidence. On the record before us, we are satisfied that the ALJ's determination, adopted by the Board, that Rodr¡guez acted as agent for Horizons is supported by substantial evidence. Rodr¡guez occupied an office in the hotel next to that of Fern ndez, Horizons's president, and the two shared a secretary; Rodr¡guez solicited the services of PEC, an employment agency, to recruit employees for Horizons; the May 19 memorandum indicated that Rodr¡guez acted with the approval of Fern ndez when he hired G¢mez as resident manager; Rodr¡guez announced to union representatives that Horizons "has nothing to do with the Union"; he told an employee that he was responsible for determining whom Horizons would hire; and he provided to G¢mez a list of applicants to interview for positions with Horizons. On the basis of these facts, it is clear that employees of the Carib Inn could reasonably have believed that Rodr¡guez was acting for and on behalf of Horizons. Furthermore, Horizons never disavowed Rodr¡guez' conduct; On the contrary, Horizons hired Rodr¡guez after possession of the hotel was transferred on June 1.
Substantial evidence on the record as a whole supports the ALJ's finding, adopted by the Board, that Rodr¡guez was acting as an agent of Horizons prior to the transfer of the Carib Inn on June 1. See 3-E Co., Inc., 26 F.3d at 3.
B. Violations of the Act
1. Section 8(a)(1), 29 U.S.C. Section(s) 158(a)(1)
The Board determined that certain statements of Rodr¡guez, attributable to Horizons, violated Section(s) 8(a)(1) of the Act, 29 U.S.C. 158(a)(1). Horizons asserts that the finding is not supported by substantial evidence.
Section 8(a)(1) of the Act, 29 U.S.C. Section(s) 158(a), provides that it is an unfair labor practice for an employer to "interfere with, restrain, or coerce" employees in the exercise of their rights guaranteed by the Act. "An employer violates Section(s) 8(a)(1) by coercively interrogating employees about their union activities or sentiments, or about the activities or sentiments of others, and by either directly or indirectly threatening employees." 3-E Co., Inc., 26 F.3d at 3 (citing Cumberland Farms, Inc., 984 F.2d at 559; NLRB v. Otis Hospital, 545 F.2d 252, 256 (1st Cir. 1976)). When examining assertedly violative conduct, courts must be mindful that "[i]t is the coercive tendency of employer statements, not their actual effect, that constitutes a violation of the Act." NLRB v. Marine Optical, Inc., 671 F.2d 11, 18 (1st Cir. 1982)(citations omitted). The Board's inference of coercive tendency will not be disturbed if reasonable, even if susceptible of an alternative interpretation. Id. (citations omitted).
The Board's determination that Horizons violated Section(s) 8(a)(1) of the Act, 29 U.S.C. Section(s) 158(a)(1), is supported by substantial evidence and stands without error. Rodr¡guez told a hotel employee, Rosado, that he (Rosado) had betrayed him by talking to the Union's president; he then questioned Rosado about his conversation. Thereafter, he told Rosado that all hotel employees would be fired if the Union continued to bother him. These statements are reasonably interpreted as coercive interrogation and direct threats. Considered in context, the statements could reasonably have interfered with or coerced hotel employees in the exercise of their organizational rights. See 3-E Co., Inc., 26 F.3d at 3; Cumberland Farms, Inc., 984 F.2d at 559.
2. Sections 8(a)(3) and (1), 29 U.S.C. Section(s) 158(a)(1), (3)
The Board, in adopting the findings of the ALJ, found that Horizons's refusal to hire all but several of the hotel's former service-unit employees violated Section(s) 8(a)(3) and (1) of the Act, 29 U.S.C. Section(s) 158(a)(1), (3). Horizons argues that this determination is not supported by substantial evidence, and is therefore erroneous.
Section 8(a)(3) of the Act, 29 U.S.C. Section(s) 158(a)(3), declares that it is an unfair labor practice for an employer "by discrimination in regard to hire or tenure of employment . . . to encourage or discourage membership in any labor organization." Where an employer violates Section(s) 8(a)(3) of the Act, 29 U.S.C. Section(s) 8(a)(3), by discriminating in its hiring practices to discourage a union presence, it necessarily violates Section(s) 8(a)(1) of the Act, 29 U.S.C. Section(s) 8(a)(1), which disallows employers to "interfere with, restrain, or coerce" employees in the exercise of their organizational rights. See, e.g., American Press, Inc., 833 F.2d at 624; NLRB v. Horizon Air Services, Inc., 761 F.2d 22, 26-28 (1st Cir. 1985); Kallman v. NLRB, 640 F.2d 1094, 1100 (9th Cir. 1981).
Generally, a successor employer has the right to operate its business as it wishes. See Elastic Nut Shop Div. of Harvard Ind. v. NLRB, 921 F.2d 1275, 1279 (D.C. Cir. 1990)(citing NLRB v. Burns International Security Services, Inc., 406 U.S. 272, 287-88 (1972)). Within this prerogative is the successor's freedom to hire its own work force: "'nothing in the federal labor laws "requires that an employer . . . who purchases the assets of a business be obligated to hire all of the employees of the predecessor . . . ."'" Id. (quoting Howard Johnson Co. v. Detroit Local Executive Board, 417 U.S. 249, 261 (1974)(citation omitted)). The successor employer may not, however, discriminate against union employees in its hiring. See Fall River Dyeing & Finishing Corp. v. NLRB, 482 U.S. 27, 40 (1987)(citations omitted).
Thus, where a successor employer refuses to hire its predecessor's employees because of their union affiliation, it may violate Section(s) 8(a)(3), 29 U.S.C. Section(s) 158(a)(3). The test is as follows: If it is proved that the former employees' protected conduct was a substantial or motivating factor for the successor's refusal to hire, the refusal to hire violates Section(s) 8(a)(3), 29 U.S.C. 158(a)(3), unless the successor proves by a preponderance of the evidence that it "would have taken the same action for wholly permissible reasons." NLRB v. Transportation Management Corp., 462 U.S. 393, 399 (1983). See also Elastic Stop Nut Div. of Harvard Ind., 921 F.2d at 1280; Horizon Air Services, Inc., 761 F.2d at 27. "[I]f the employer [refuses to hire] an employee for having engaged in union activities and has no other basis for the discharge, or if the reasons that [it] proffers are pretextual, the employer commits an unfair labor practice." Transportation Management Corp., 462 U.S. at 398.
In the present case, the Board determined that the General Counsel sustained its burden of proving that the hotel's former serviceunit employees' union affiliation was the substantial or motivating factor in Horizons's refusal to hire them. This determination is supported by substantial evidence: Rodr¡guez, Horizons's agent, indicated to Qui¤ones that Horizons would utilize PEC's services only on the condition that there be no risk of a union at the hotel; Qui¤ones responded with a letter confirming that "[t]here is no possibility for a Union"; Rodr¡guez told a Carib Inn union employee that all union employees would be fired if the Union continued to bother him; Rodr¡guez told union leaders that "Horizons has nothing to do with the Union"; not one union-affiliated former employee who submitted an application with Horizons was interviewed; with the exception of several individuals who were offered supervisory or managerial positions, no former service-unit employees were hired by Horizons.
The Board disqualified as a pretext Horizons's proffered lawful reason for refusing to hire the former employees. This determination also is supported by substantial evidence. Horizons asserted at the administrative proceedings that the former employees were not hired because many of them were not needed, and because they were not competent employees. Fern ndez testified that the former employee's unfitness was determined after he personally observed them, and that their incompetence is evidenced by the fact that the hotel had gone into bankruptcy. The Board, adopting the ALJ's findings, discredited Fern ndez' testimony and rejected Horizons's proffered justification, noting that Horizons submitted no evidence tending to prove that Fern ndez personally observed each former employee, and that it failed to prove its contention that the service employees caused the hotel's bankruptcy. The Board concluded that Horizons's retention of PEC for recruiting services, and its solicitation of applications from former service-unit employees, was conduct intended as a smoke screen to conceal its scheme to keep the Union out of the Carib Inn. Again, this conclusion is well supported by substantial evidence.
The Board, in adopting the ALJ's findings, concluded that Horizons violated Section(s) 8(a)(3) and (1) of the Act, 29 U.S.C. Section(s) 8(a)(1), (3). This determination is supported by substantial evidence and stands without error.
3. Sections 8(a)(5) and (1), 29 U.S.C. Section(s) 158(a)(1), (5)
The Board determined, in adopting the findings of the ALJ, that Horizons violated Section(s) 8(a)(5) and (1) of the Act, 29 U.S.C. 8(a)(1), (5), by refusing to bargain collectively with the Union, which represented employees of the service and casino units. Horizons asserts that this finding is in error, unsupported by substantial evidence.
Section 8(a)(5) of the Act, 29 U.S.C. Section(s) 158(a)(5), provides that it is an unfair labor practice for an employer "to refuse to bargain collectively with the representatives of his employees." Where an employer violates Section(s) 8(a)(5) of the Act, 29 U.S.C. Section(s) 8(a)(5), by refusing to bargain collectively, it necessarily violates Section(s) 8(a)(1) of the Act, 29 U.S.C. Section(s) 8(a)(1), which disallows employers to "interfere with, restrain, or coerce" employees in the exercise of their organizational rights. See, e.g., Fall River Dyeing & Finishing Corp., 482 U.S. at 34 & n.2. Under Section(s) 8(a)(5), 29 U.S.C. Section(s) 158(a)(5), "an employer is obligated to bargain with the union representing its predecessor's employees if: (1) the new employer is a 'successor' to the old . . . and (2) a majority of the successor's employees previously were employed by the predecessor." Asseo v. Centro M‚dico Del Turabo, 900 F.2d 445, 450-51 (1st Cir. 1990)(citing Fall River Dying & Finishing Corp., 482 U.S. at 43-52). If these two criteria are satisfied, "a rebuttable presumption of majority status arises, leading to a consequent duty to bargain in good faith." Id. at 451.
Where a successor employer's unlawful hiring practices preclude the possibility of a majority status in its work force, however, the successor violates the Act by refusing to bargain collectively with the union that had represented the predecessor's employees. Elastic Stop Nut Div. of Harvard Ind., 921 F.2d at 1282. Thus, with regard to the former union employees of the hotel's service unit, our affirmance of the Board's determination that Horizons violated Section(s) 8(a)(3) of the Act, 29 U.S.C. Section(s) 158(a)(3), by refusing to hire them because of their union affiliation compels affirmance of the determination that Horizons violated Section(s) 8(a)(5), 29 U.S.C. Section(s) 158(a)(5), as a duty to bargain with the employees' union representatives arose from the violation of Section(s) 8(a)(3). See Elastic Stop Nut Div. of Harvard Ind., 921 F.2d at 1282.
With regard to the hotel's casino-unit employees, the Board's finding of a violation of Section(s) 8(a)(5), 29 U.S.C. Section(s) 158(a)(5), is supported by substantial evidence. The Board, in adopting the ALJ's findings, found that the casino continued operations after transfer of possession of the hotel to Horizons on June 1, and that Horizons operated the casino through June 23, 1986. The Board determined that, with respect to casino operations, Horizons was a successor employer. Fourteen of Horizons's twenty-four casino-unit employees were former union employees of the hotel's casino unit.
The fact that greater than one-half of the employees in Horizons's casino unit had been union employees of Horizons's predecessor raises a rebuttable presumption that there existed in the casino unit a "majority status." See Asseo, 900 F.2d at 450-51. Horizons does not assert that it was able to overcome this presumption. Horizons therefore had a duty to bargain with representatives of the former casino-unit employees. Its failure to do so violated Section(s) 8(a)(5) and (1) of the Act, 29 U.S.C. Section(s) 158(a)(1), (5).
C. The Board's Order
Horizons argues that the portion of the Board's order requiring it to "cancel, on request by the Union, any changes in wages and benefits that [Horizons] made when it began operations" is "inappropriate." After a review of the record, we conclude that the Board's order was a reasonable remedy fashioned to address Horizons's violations of Section(s) 8(a)(1), (3) and (5) of the Act, 29 U.S.C. 158(a)(1), (3), (5). See Horizon Air Services, Inc., 761 F.2d at 32-33 (citations omitted)("We respect the Board's special competence and expertise in fashioning remedies. And, where the Board's design is planned out with due regard to supportable findings, sensible reasoning, and an accurate view of the governing law, there is no room for judicial intervention.").
The ALJ's findings, adopted by the Board, are supported by substantial evidence on the record as a whole and stand without error. Horizons's request for review is denied, and the Board's request for enforcement of its order is granted.
* Of the District of Rhode Island, sitting by designation.
1. For a list of the employment positions within the service and casino units, see ALJ's Decision and Proposed Order, appended to In re: Horizons Hotel Corp., et al, 312 N.L.R.B. No. 200 (Nov. 22, 1993).
2. On March 20, 1986, Rodr¡guez terminated the collective bargaining agreement pursuant to 11 U.S.C. Section(s) 365. The propriety of this action is not in question.