NLRB v. George E. Light Boat Storage, Inc.

Decision Date23 March 1967
Docket NumberNo. 22962.,22962.
PartiesNATIONAL LABOR RELATIONS BOARD, Petitioner, v. GEORGE E. LIGHT BOAT STORAGE, INC., Respondent.
CourtU.S. Court of Appeals — Fifth Circuit

COPYRIGHT MATERIAL OMITTED

Marcel Mallet-Prevost, Asst. Gen. Counsel, Richard S. Rodin, Atty., NLRB, Arnold Ordman, Gen. Counsel, Dominick L. Manoli, Assoc. Gen. Counsel, Gary Green, Atty., NLRB, Washington, D. C., for petitioner.

Robert R. Breaker, LaPorte, Tex., for respondent.

Before WISDOM, BELL, and AINSWORTH, Circuit Judges.

WISDOM, Circuit Judge:

The National Labor Relations Board seeks a decree enforcing its order of July 2, 1965, against the George E. Light Boat Storage Company.1 There is substantial evidence in the record to support the Board's determination that the Company violated sections 8(a) (1), 8(a) (3), and 8(a) (5) of the Labor-Management Relations Act, 29 U.S.C. §§ 158(a) (1), 158 (a) (3), and 158(a) (5). The principal question concerns the scope of the remedy.

In 1962 the Company had an extensive business transporting men and equipment between the Texas mainland and offshore oil rigs. March 1, 1962, after a Board certification proceeding, George E. Light, president and majority owner of the Company, and representatives of the Inland Boatmen's Union2 executed a collective bargaining agreement. The contract was for two years, and from year to year thereafter, subject to reopening after one year on the subject of wages only. The agreement provided for extension beyond the 1964 termination date:

This agreement shall continue in effect from year to year following February 28, 1964, or succeeding anniversary dates, and provided further, the parties may mutually agree in writing upon an extension of the Agreement to avoid such termination.

In 1963, during the term of the contract, Light's business suffered a severe slump. After discussing the Company's position with the Union, and after obtaining the Union's consent, the Company made certain temporary changes in the wages and hours provisions of the contract. The Company was to restore the original contract terms when its business returned to normal.

By an exchange of letters in February, 1964, the parties agreed to extend the contract for one year, and the Company agreed to increase its contribution to the Seafarers' Welfare Fund from $1.75 to $1.95 per employee per day. In August 1964 the Company stopped making payments into the Fund. President Light explained that the Company was short of funds but would be able to resume fulfilling its contractual obligations if certain "relief drivers" were eliminated. October 1, 1964, the president of the Company called the employees together and informed them that he was changing their working conditions. He made substantial unilateral changes in wages and hours, embodying these in individual agreements with the employees. The same day, the Company discharged Fred Tischhauser and John Odom, two crew boat operators who had been active in support of the Union. Despite the Union's protests the Company refused to rescind its action. Thereafter, the Company refused to abide by any terms of the Union contract. In December 1964, the Union informed the Company that it was giving sixty days' notice pursuant to reopening the contract on its expiration date, February 28, 1965. When the Company still refused to act, the Union filed the present unfair labor charges.

I.

The company contends that Tischhauser and Odom were discharged for cause and, as is usual in such a case as this, presents evidence supporting its position. The Board however is free to draw the conflicting inference that the discharge violated sections 8(a) (1) and 8(a) (3) when there is also substantial evidence that the discharges resulted from union animus. NLRB v. Longhorn Transfer Serv., Inc., 5 Cir.1965, 346 F. 2d 1003; Ken-Lee, Inc. v. NLRB, 5 Cir. 1962, 311 F.2d 608; NLRB v. Linda Jo Shoe Co., 5 Cir.1962, 307 F.2d 355; NLRB v. Hudson Pulp & Paper Corp., 5 Cir.1960, 273 F.2d 660; Edward G. Budd Mfg. Co. v. NLRB, 3 Cir.1943, 138 F.2d 86, cert. denied, 1944, 321 U.S. 778, 64 S.Ct. 619, 88 L.Ed. 1071.3

Here the evidence points strongly to the two employees' having been discharged because of their union activity. The record discloses numerous occasions on which the management had warned the employees to tone down or cease their activities. Tischhauser and Odom were discharged the same day the Company repudiated the union contract. The incidents on which the Company allegedly based the discharges occurred months before the actual firings.

To remedy these violations of sections 8(a) (1) and (3), the Board ordered the Company to offer to reinstate the two employees, and to pay them backpay according to the formula of F. W. Woolworth, 1950, 90 N.L.R.B. 289. This was an appropriate order, which we enforce. See Labor-Management Relations Act, § 10(c), 29 U.S.C. § 160(c).

The Board further ordered the Company to pay interest on these backpay awards according to the doctrine the Board adopted in Isis Plumbing & Heating Co., 1962, 138 N.L.R.B. 716, enforcement denied on other grounds, 9 Cir. 1963, 322 F.2d 913. Although this Court has not yet passed on the inclusion of interest in backpay awards, the six circuits which have dealt with the question have allowed interest.4 We agree with the other Courts of Appeals, and therefore enforce this part of the Board's order.

II.

The Board found that the Company by repudiating the union contract,5 executing agreements with individual employees,6 and making unilateral changes in wages and hours,7 had violated section 8(a) (5)'s mandate to bargain in good faith with the certified representative of its employees. The Company's defense is that according to Texas law the contract was invalid since the corporation's board of directors had not ratified it. In support of its view the Company presents a judgment of the Texas Court of Civil Appeals, based on this reasoning, denying the Seafarers' Welfare Fund recovery against the Company on the contract. The argument is without substance. State law does not determine the validity of a contract in proceedings such as these. See Local 174, Teamsters, Chauffeurs, etc. v. Lucas Flour Co., 1962, 369 U.S. 95, 82 S.Ct. 571, 7 L.Ed.2d 593; Textile Workers Union of America v. Lincoln Mills, 1957, 353 U.S. 448, 77 S.Ct. 912, 1 L.Ed. 2d 972; Lozano Enterprises, Inc. v. NLRB, 9 Cir. 1964, 327 F.2d 814; Rabouin v. NLRB, 2 Cir. 1952, 195 F.2d 906.

Federal law will not permit such nice formalities to shield the Company from the consequences of its repudiation of the contract. In 1963 when the Company asked the Union for a temporary modification in the terms of the contract, it acted as if it were bound by the contract. During the renewal negotiations in 1964 there was no hint that the Company believed the contract was invalid. We will not allow the Company to lull the Union into a sense of security and then when the time comes for performance assert the invalidity of the contract. For the purposes of these proceedings the contract must be considered valid. The Company's repudiation and accompanying actions therefore constituted a failure to bargain in good faith in violation of section 8(a) (5). See cases cited in notes 5, 6, and 7, supra.

To remedy the Company's various violations of section 8(a) (5) the Trial Examiner recommended that the Board order the Company to cease and desist from repudiating the contract, granting unilateral wage increases, dealing directly with the employees, and otherwise failing to bargain with the Union. He further recommended that the Company be ordered to cancel individual contracts, to meet and bargain with the Union at its request, to reimburse all its employees "who have worked overtime during the existence of the above mentioned contract" at the contract rate, and to

"Reactivate, acknowledge the validity of, and abide by the terms of the collective-bargaining contract entered into by Respondent and the Union and effective on March 1, 1962, as modified by the parties since then and as the parties may further modify the same, until such contract expires or is terminated." 153 N.L.R.B. at 1222.

The Trial Examiner felt that the Company's discontinuance of payments to the welfare fund constituted a breach of contract remediable only by a court. 153 N.L.R.B. at 1219. The Board, however, disagreed, and ordered the Company to "pay into the Seafarers' Welfare Fund such sums as would have been paid into said Fund absent the illegal changes in wages." 153 N.L.R.B. at 1210.

A. We deal first with the Board's orders to cease and desist from the various violations of section 8(a) (5), and its affirmative orders to bargain upon request of the Union, to embody any agreement reached through such bargaining in a written agreement, and to cancel the individual contracts. All these are common remedies for violation of section 8(a) (5) and are within the scope of the Board's authority. San Antonio Mach. & Supply Corp. v. NLRB, 5 Cir. 1966, 363 F.2d 633 (order to bargain and sign agreement); J. I. Case Co. v. NLRB, 1944, 321 U.S. 332, 64 S.Ct. 576, 88 L.Ed. 762 (cancellation of individual contracts); Medo Photo Supply Corp. v. NLRB, 1944, 321 U.S. 678, 64 S.Ct. 830, 88 L.Ed. 1007 (cease and desist from granting unilateral wage increases). We therefore enforce these portions of the Board's order.

B. The unusual provisions of the Board's order in this case are those directing the Company to reactivate and abide by the contract, and to pay back overtime and back welfare payments for all its employees according to the contract. The first question is whether the Board has authority to enter such orders "enforcing" a contract. We hold that in circumstances such as these the Board does have such authority. The second question is whether such orders may apply to periods beyond the expiration of the contract. We hold, limiting our decision to the...

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