Court Opinion

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Date Created: 2011-02-07 02:52:44+00
Date Added: 2024-06-11T08:14:18.600385
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UNITED STATES COURT OF APPEALS
                      FOR THE FIRST CIRCUIT
                                           

No. 94-1294

                 NATIONAL LABOR RELATIONS BOARD,

                           Petitioner,

                                v.

                    HORIZONS HOTEL CORPORATION
                   D/B/A CARIB INN OF SAN JUAN,

                           Respondent.

                                           

No. 94-1303

                    HORIZONS HOTEL CORPORATION
                   D/B/A CARIB INN OF SAN JUAN,

                           Petitioner,

                                v.

                 NATIONAL LABOR RELATIONS BOARD,

                           Respondent.

                                           

           ON APPLICATION FOR ENFORCEMENT AND PETITION
                    FOR REVIEW OF AN ORDER OF
                THE NATIONAL LABOR RELATIONS BOARD

                                           

                              Before

                     Torruella, Chief Judge,
                                                     
                 Campbell, Senior Circuit Judge,
                                                         
                and Boyle,* Senior District Judge.
                                                           

                                           
                    
                              

*  Of the District of Rhode Island, sitting by designation.

     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.

                                           

                          March 3, 1995
                                           

                               -2-

          BOYLE,  Senior  District  Judge.   This  case  presents
                    BOYLE,  Senior  District  Judge
                                                   

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     8(a)(1),  (3),  and  (5) of  the

National Labor  Relations Act (the  Act), 29 U.S.C.    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   10(e) of the  Act, 29 U.S.C.   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  

10(f) of  the Act, 29 U.S.C.    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.   160(e), (f).
                            

                      I.  STANDARD OF REVIEW
                                I.  STANDARD OF REVIEW

          The  appropriate standard  of review  is provided  in  

10(e) of the Act, 29 U.S.C.   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

                               -3-

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.    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)).

                         II.  BACKGROUND
                                   II.  BACKGROUND

          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
          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.   1101, et  seq.  The chapter 11  proceeding was converted
                                 

                               -4-

to  a chapter 7, 11 U.S.C.    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.   

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  service-  and  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

                    
                              

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.   365.  The propriety
of this action is not in question.

                               -5-

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

                               -6-

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
          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

                               -7-

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

                               -8-

employee  that he had been  authorized to hire  new employees for

Horizons.

C.  Transfer of Control:  June 1, 1986
          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
          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

                               -9-

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   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   8(a)(3) of the Act, 29  U.S.C.  

8(a)(3); and  that Horizons refused to  bargain collectively with

representatives of the  Union in  violation of    8(a)(5) of  the

Act, 29 U.S.C.    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

   8(a)(1), (3), and (5) of the Act, 29 U.S.C.    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

                               -10-

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   

8(a)(1), (3),  and (5) of the  Act, 29 U.S.C.     158(a)(1), (3),

(5).

          We examine the issues.

                        III.  JURISDICTION
                                  III.  JURISDICTION

          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

                               -11-

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

                               -12-

estate, Horizons.

          The Board acted  within its jurisdiction under    10 of

the  Act, 29 U.S.C.    160, in  pursuing the  present claims, and

under    10(e) and (f),  29 U.S.C.   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."

                               -13-

                          IV.  ANALYSIS
                                    IV.  ANALYSIS

A.  Rodr guez As Agent of Horizons
          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    8 of  the Act, 29 U.S.C.    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
                                                                      

                               -14-

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

                               -15-

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

                               -16-

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
          B.  Violations of the Act
                                   

          1.  Section 8(a)(1), 29 U.S.C.   158(a)(1)
                    1.  Section 8(a)(1), 29 U.S.C.   158(a)(1)

          The   Board  determined  that   certain  statements  of

Rodr guez, attributable  to Horizons,  violated   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.     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  

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

                               -17-

  8(a)(1)  of the  Act, 29  U.S.C.    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.    158(a)(1),
                    2.  Sections  8(a)(3) and (1),  29 U.S.C.    158(a)(1),

(3)
          (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    8(a)(3) and (1) of the

Act,  29 U.S.C.     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.    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    8(a)(3)  of  the Act,  29  U.S.C.

  8(a)(3),  by   discriminating  in  its   hiring  practices   to

                               -18-

discourage a union presence, it necessarily violates   8(a)(1) of

the  Act,  29 U.S.C.     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    8(a)(3), 29  U.S.C.   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

                               -19-

successor's  refusal  to hire,  the  refusal to  hire  violates  

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   service-unit  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

                               -20-

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    8(a)(3) and (1)  of the Act, 29 U.S.C.

   8(a)(1), (3).  This  determination is supported by substantial

evidence and stands without error.

                               -21-

          3.  Sections  8(a)(5) and (1),  29 U.S.C.    158(a)(1),
                    3.  Sections  8(a)(5) and (1),  29 U.S.C.    158(a)(1),

(5)
          (5)

          The Board  determined, in adopting the  findings of the

ALJ, that  Horizons violated     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.    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   8(a)(5) of the Act,  29

U.S.C.     8(a)(5),  by  refusing  to  bargain  collectively,  it

necessarily violates   8(a)(1)  of the Act, 29 U.S.C.    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    8(a)(5), 29  U.S.C.   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

                               -22-

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    8(a)(3)  of the

Act, 29 U.S.C.   158(a)(3), by  refusing to hire them because  of

their  union affiliation compels  affirmance of the determination

that Horizons violated    8(a)(5),  29 U.S.C.    158(a)(5), as  a

duty to  bargain with the employees'  union representatives arose

from the  violation of   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     8(a)(5),  29  U.S.C.   

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

                               -23-

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      8(a)(5) and  (1) of  the  Act, 29  U.S.C.

  158(a)(1), (5).

C.  The Board's Order
          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     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.").

                          V.  CONCLUSION
                                    V.  CONCLUSION

          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.
                                                                 

                               -24-