United States Pipe and Foundry Company v. NLRB

• Decision Date: 23 July 1968
• Docket Number: No. 24837.,24837.
• Citation: 398 F.2d 544
• Parties: UNITED STATES PIPE AND FOUNDRY COMPANY, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.
• Court: U.S. Court of Appeals — Fifth Circuit

398 F.2d 544 (1968)

UNITED STATES PIPE AND FOUNDRY COMPANY, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.

No. 24837.

United States Court of Appeals Fifth Circuit.

July 23, 1968.

John J. Coleman, Jr., A. Henry Gaede, Jr., Birmingham, Ala., for petitioner; Allen Poppleton, Bradley, Arant, Rose & White, Birmingham, Ala., of counsel.

Benj. L. Erdreich, Birmingham, Ala., Michael Gottesman, Washington, D. C., Bernard Kleinman, Chicago, Ill., Elliot Bredhoff, George H. Cohen, Washington, D. C., Jerome Cooper, Birmingham, Ala., for intervenor.

Marcel Mallet-Prevost, Asst. Gen. Counsel, William F. Wachter, Atty., NLRB, Washington, D. C., Arnold Ordman, Gen. Counsel, Dominick L. Manoli, Assoc. Gen. Counsel, Lawrence M. Joseph, Atty., NLRB, for respondent.

Before JOHN R. BROWN, Chief Judge, and BELL, Circuit Judge, and HOOPER, District Judge.

GRIFFIN B. BELL, Circuit Judge:

The novel question presented in this case turns on the breadth of the remedy which the Board may fashion under § 10(c) of the National Labor Relations Act. 29 U.S.C.A. § 160(c).¹

United States Pipe and Foundry Company obligated itself to purchase the assets, including the manufacturing facilities of Perma Vinyl Corporation. Perma Vinyl was engaged in manufacturing plastic pipe in Florida. United States Pipe consummated the purchase and continued the manufacture of plastic pipe in the acquired facilities in the same manner and with substantially the same work force. The president of Perma Vinyl became its plant manager. United States Pipe was then ordered to remedy unfair labor practices committed by Perma Vinyl prior to the acquisition by reinstating four employees who had been discharged by Perma Vinyl.

The acquisition took place in December 1964. In May, 1964 Perma Vinyl was charged with violating §§ 8(a) (1) and 8(a) (3) and (1) of the Act, 29 U.S.C.A. § 158(a) (1) and (3), a complaint was issued on the charges in July 1964, and the matter was heard before a Trial Examiner in September 1964. No decision had been rendered by the Trial Examiner when the Perma Vinyl assets were transferred to United States Pipe in December 1964.

It is undisputed that United States Pipe had notice of the pending unfair practice proceedings prior to the date of closing. It is contended, however, that this notice was not brought home to United States Pipe until after it had obligated itself in November 1964 to go forward with the purchase. There is evidence of record in the form of the testimony of the president of Perma Vinyl which supports the finding of the Board that United States Pipe had ample notice prior to becoming finally obligated to go forward. We thus consider the appeal on the basis of United States Pipe having acquired the assets with notice of the unfair practice proceedings.

The Board issued its order in April 1965 on the decision of the Trial Examiner holding against Perma Vinyl on the original charges. United States Pipe was in no way involved in that proceeding or in the unfair labor practices forming the subject matter of the proceeding. The Board order against Perma Vinyl was not contested and United States Pipe is not claiming the right to contest that decision on the merits. Its complaint arises out of the Board requiring it, as successor to Perma Vinyl, to remedy the derelictions of Perma Vinyl.

In July 1965 United States Pipe was served with notice which in effect required it to show cause why it should not be charged, as Perma Vinyl's successor, with remedying the unfair labor practices including the reinstatement of the four employees. The notice was in the form of a back pay specification hearing. The Trial Examiner, following prior Board decisions, ruled that United States Pipe was not so obligated. See Symns Grocer Co., 109 NLRB 346 (1954). The Board reversed, expressly overruling the Symns case.

United States Pipe petitioned to review and set aside that order of the Board and the Board has cross-petitioned for enforcement of its order. United States Pipe makes two assertions: First, it contends that the Board was without power to enter the order against it; and second, that it was denied due process of law by the Board. We reject both contentions and thereby deny the petition for review and enforce the order of the Board.

We will first consider the due process argument. As we have stated, United States Pipe had notice of the pending unfair practice proceedings against Perma Vinyl. After the entry of the Board order against Perma Vinyl a proceeding was instituted to settle the question of remedies due under that order. That proceeding was brought against United States Pipe and Dade Plastics Co.² United States Pipe received notice of this proceeding and duly answered. A hearing was held before a Trial Examiner and United States Pipe appeared and participated without restriction at the hearing. There is no contention of a denial of due process by virtue of having been deprived of the right to defend the original charges, so that question is not before us. We hold that United States Pipe was not deprived of substantive or procedural due process in the premises. Whether the ruling against it on the merits was incorrect is another question and will be next considered.

In Alexander Milburn Co., 78 NLRB 747 (1948), the Board concluded that a corporation acquiring the business and assets of a respondent in an unfair labor practices proceeding with knowledge of the existence of the pending cause against the respondent was responsible to remedy the unfair labor practices of the predecessor. The order requiring the successor to afford the necessary remedies (reinstatement and back pay), was entered upon reopening the record in the original proceeding after decision. The successor corporation was given notice of the theory of successorship and was afforded an opportunity to be heard. This considered decision was rendered by the Board in the face of the claim that it had no power to pursue the successor corporation. It was noted that the power of the Board is unquestioned in those cases where the successor was a mere disguised continuance of an alter ego of an employer found to have engaged in unfair labor practices. Southport Petroleum Co. v. NLRB, 1942, 315 U.S. 100, 62 S.Ct. 452, 86 L.Ed. 718. The Board pointed to the statement in Le Tourneau Company of Georgia v. NLRB, 5 Cir., 1945, 150 F.2d 1012, that a successor might be bound to remedy unfair labor practices where a whole plant had been assigned. The fact, however, that this statement was dicta was recognized.

The Board concluded that the successor corporation (Black Company), was not an alter ego or a disguised continuance of the original respondent Milburn and that it had not participated in the unfair labor practices. It held, nevertheless, that because the original business was transferred to Black with notice and the employees performed the same work after the transfer as before the same place and under the same terms and conditions of employment, the successor was obligated to remedy the unfair labor practices which had been committed by the predecessor owner. The rationale of this holding was the necessity of mitigating the coercive effects of the predecessor's unfair labor practices on the employees in the exercise of their § 7 rights. 29 U.S.C.A. § 157.

The case of NLRB v. Birdsall-Stockdale Motor Company, 10 Cir., 1952, 208 F.2d 234, 46 A.L.R.2d 587 was then decided. It involved a violation of §§ 8(a) (5) and (1) of the Act, 29 U.S.C.A. § 158(a) (5) and (1), and the court concluded that the successor corporation was not bound to afford the remedies required under the original unfair practice proceeding. The court analogized the situation with the scope of injunctive orders under Rule 65(d), F.R.Civ. P., and concluded that there was not sufficient nexus between the original ...