
USCA1 Opinion

	






                            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-

