JG Roy & Sons Co. v. National Labor Relations Bd.

• Decision Date: 27 January 1958
• Docket Number: No. 5282.,5282.
• Citation: 251 F.2d 771
• Parties: J. G. ROY & SONS COMPANY, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.
• Court: U.S. Court of Appeals — First Circuit

251 F.2d 771 (1958)

J. G. ROY & SONS COMPANY, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.

No. 5282.

United States Court of Appeals First Circuit.

January 27, 1958.

Lawrence M. Kearns, Boston, Mass., with whom Arthur M. Marshall, Springfield, Mass., and Morgan, Brown & Kearns, Boston, Mass., were on brief, for petitioner.

Norton J. Come, Attorney, Washington, D. C., with whom Jerome D. Fenton, General Counsel, Stephen Leonard, Associate General Counsel, and Marcel Mallet-Prevost, Asst. General Counsel, Washington, D. C., were on brief, for respondent.

Before MAGRUDER, Chief Judge, and WOODBURY and HARTIGAN, Circuit Judges.

HARTIGAN, Circuit Judge.

This is a petition for review under Section 10(f) of the National Labor Relations Act, as amended (61 Stat. 148 (1947), 29 U.S.C.A. § 160(f)) filed by J. G. Roy and Sons Company (hereinafter called Roy Construction) of an order of the National Labor Relations Board. This order dismissed Roy Construction's complaint charging the United Brotherhood of Carpenters and Joiners of America, AFL-CIO, Carpenters' District Council of Springfield, Massachusetts, AFL-CIO (both hereinafter referred to as the Union) and their agents with having violated Section 8(b) (4) (A) and (B) of the National Labor Relations Act.¹

The alleged unfair labor practices arose from a strike called by the Union which resulted in the withdrawal of its members from the site of the Chicopee Housing Project where they had been employed by the petitioner, Roy Construction. The Union's agent told George Roy, president of Roy Construction, that the strike was called because Roy Construction was using non-union lumber in violation of its contract with the Union and because Roy Construction had continued to purchase this non-union lumber from J. G. Roy Lumber Company (hereinafter called Roy Lumber).

The main issue before us is whether the Board was correct in deciding that Roy Construction was so allied with Roy Lumber that Roy Construction could not be classified as a neutral employer wholly unconcerned in the dispute between the Union and Roy Lumber and, therefore, not coming within the Congressional purpose in Sec. 8(b) (4) (A) and (B) of protecting innocent third party employers in a labor dispute.

Roy Construction is a Massachusetts corporation with its offices in Springfield, Massachusetts, the stock of which is owned in equal shares by the five Roy brothers, George, Joseph, Edmund, Fred and Leo. The five brothers also constitute the board of directors of this corporation, of which Joseph is president and George is treasurer and clerk. Roy Lumber, which is a Massachusetts corporation engaged in the sale and distribution of lumber and building supplies and has its offices in Chicopee, Massachusetts, about three miles from the offices of Roy Construction, is also owned in equal shares by the five brothers except for two of the 497 shares of outstanding stock which are owned by Roy Construction. Edmund Roy is president of Roy Lumber and Fred is treasurer and clerk, and the board of directors consists of Joseph, George, Edmund and Fred.

It was stipulated that each brother has received the same total amount of income from these two corporations and from two other corporations not involved in this case in each of the past five years although each brother did not receive the same compensation from each company.

However, despite this common ownership and the division of total profits from all the Roy enterprises equally among the brothers, the Board concedes that there appears to be no substantial evidence of past interference by the officers of one corporation in the affairs of the other. There was no evidence that the annual directors' meetings were other than the perfunctory ones required by state law. The instances of inter-relations between the actual operations of Roy Lumber and Roy Construction were inconsequential. The trial examiner found that the companies had separate offices and records; that they had no supervisors or employees in common; that they did not transfer personnel from one to the other and each did its own hiring and firing. He expressly found that their labor relations policies were formulated independently. Other relevant findings made were that Roy Construction purchased only about 5% of Roy Lumber's annual sales and that while Roy Construction annually purchased about $400,000 worth of building materials of the type sold by Roy Lumber, only about $85,000 worth was purchased from Roy Lumber. In 1955 Roy Lumber's total sales amounted to over $1,700,000 and Roy Construction's total purchases to almost $1,350,000.

It was found that Roy Construction purchased all its millwork requirements from Roy Lumber but there was no evidence presented to refute the petitioner's explanation that Roy Lumber was the only available supplier of suitable millwork in the area.

From the above evidence the trial examiner concluded that Roy Construction was not an innocent neutral third party so as to be entitled to the protection of § 8(b) (4) (A) and (B). The Board, with one member entering a vigorous dissent, upheld the trial examiner's finding that Roy Construction was not a neutral or wholly unconcerned employer, stating first that Roy Lumber and Roy Construction were engaged in a "straight line operation" in that Roy Lumber was Roy Construction's sole source of supply of millwork lumber and, secondly, the businesses of the primary employer, Roy Lumber, and the secondary employer, Roy Construction, were commonly owned and controlled "as set forth in the Intermediate Report."

The Board's "straight line operation" doctrine is derived from its own decision in National Union of Marine Cooks and Stewards (Irwin-Lyons Lumber Co.), 87 N.L.R.B. 54 (1949). In that case the primary employer was engaged in logging operations while the secondary employer transported all of the logs from the primary employer's logging site to its sawmill. Both employers were commonly owned, and, unlike the instant case, the president and active operating head of both companies was the same man. The secondary employer's operations were an absolutely essential and integral part of the primary employer's enterprise. In contrast to this, Roy Construction's purchases of millwork from Roy Lumber constitute a very small part of the total sales and purchases of both companies and were not part of a "unified production effort." To characterize the Roy Construction and Roy Lumber Companies as a "straight line operation" because of this purchase of millwork would be a strained interpretation of the facts in order that they might fit within the doctrine adopted by the Board in the Irwin-Lyons case. See Alpert v. United Brotherhood of Carpenters, etc., D.C.Mass.1956, 143 F.Supp. 371 (wherein a temporary injunction was granted against the Union upon request of the regional director of the Board under authority of Sec. 10(1) of the Act in earlier proceedings in this case).

The Board's second basis for designating the petitioner as an "ally" of Roy Lumber is derived from the finding of common ownership and control "as set forth in the...