Premium Foods, Inc. v. N.L.R.B.

• Decision Date: 01 July 1983
• Docket Number: 82-7267,Nos. 82-7176,s. 82-7176
• Citation: 709 F.2d 623
• Parties: 113 L.R.R.M. (BNA) 3261, 98 Lab.Cas. P 10,268 PREMIUM FOODS, INCORPORATED, Petitioner and Cross-Respondent, v. NATIONAL LABOR RELATIONS BOARD, Respondent and Cross-Petitioner.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 623

709 F.2d 623

113 L.R.R.M. (BNA) 3261, 98 Lab.Cas. P 10,268

PREMIUM FOODS, INCORPORATED, Petitioner and Cross-Respondent, v. NATIONAL LABOR RELATIONS BOARD, Respondent and Cross-Petitioner.

Nos. 82-7176, 82-7267.

United States Court of Appeals,

Ninth Circuit.

Argued and Submitted Dec. 9, 1982.

Decided July 1, 1983.

Thomas Bassett, Lukins, Annis, Shine, McKay, Van Marter & Rein, Spokane, Wash., for petitioner and cross-respondent.

John Saperstein, N.L.R.B., Washington, D.C., for respondent and cross-petitioner.

On Petition for Review of an Order of the National Labor Relations Board.

Before CHOY and FLETCHER, Circuit Judges, and MacBRIDE, ^* District Judge.

MacBRIDE, District Judge:

Premium Foods, Inc. (Premium) petitions for review of an order of the National Labor Relations Board (Board), reported at 260 N.L.R.B. No. 92 (1982). The Board ordered Premium to recognize and bargain with United Food & Commercial Workers Local Union No. 1439 (Union). The Board cross-petitions for enforcement of its order. We enforce the Board's order.

FACTS

Swift and Company, a large multi-national corporation with numerous facilities throughout the United States, maintained a plant in Spokane, Washington for many years. The Spokane facility purveyed meat and meat products, cheese, fish, shortening and oils to approximately 230 customers in parts of Washington, Montana, and Idaho. Typically, forty percent of its volume was in retail sales and sixty percent in the food service area. ¹ Swift closed the Spokane facility on August 1, 1980.

Prior to the closure of the Spokane plant, Swift had entered into a collective bargaining agreement with the Union. The bargaining unit was made up of production and maintenance employees, including truckdrivers, at the Spokane plant. During normal operating times, approximately twelve or thirteen employees made up the unit. Prior to closure, the loss of a catering account resulted in a reduction of approximately four employees. At the time that Swift ceased operations, it employed nine employees in five separate job classifications covered by the collective bargaining agreement. ²

Swift's sales unit manager for the Spokane plant was Robert Racicot, a Swift employee since 1964. He had formerly been a Union member, but had taken a withdrawal card from the Union when he became a superintendent in 1974. On June During the last two weeks of Swift's operation, three Swift employees informed Racicot that they were seeking withdrawal cards from the Union, and in mid-August, a fourth employee told him that he had sought a withdrawal card.

30, 1980, at a meeting of Swift employees, Racicot read a letter from Swift announcing that the plant would close on August 1. He then told the workers that he would attempt to organize a new operation to replace Swift. In July, Racicot sent a letter to Swift customers seeking their patronage for the new business.

Premium was formed as a new corporation, with Racicot as president. It sold meat, cheese, and related products, with a strong emphasis on food service items. Although Premium purchased nothing from Swift, ³ it used the same building as Swift, retained the same telephone number, and rented the same in-plant machinery that Swift had used. Premium served the same general geographical area as Swift, although it discontinued operations in Montana. Of Swift's 230 customers, approximately 122 gave their patronage to Premium.

Premium began operations on August 4, 1980, with five operating employees, all former Swift employees, in classifications which had been represented in the Swift operating unit. A sixth former Swift employee, Jerry Anderson, the butcher and gang leader, assisted Racicot in supervising the operation in addition to performing production duties. ⁴ By August 26, despite some turnover, the operating unit had expanded to eight rank-and-file employees, five of whom had been employed by Swift, plus Anderson. The unit remained at this size until January, 1981, when Premium added one full-time and two part-time employees, none of whom had been employed by Swift. Premium had by that time introduced a new food service item.

On August 26, 1980, the Union sent a letter to Roger Purkett, secretary of Premium, and co-owner and manager of Becwar Packing Company, a Spokane meat company. Incorrectly believing that Becwar had purchased the old Swift plant, the Union asked Becwar to bargain. By a letter of September 10, 1980, Purkett responded that Becwar did not own the business operating in the old Swift plant. He stated that the new company, which he did not identify, was not a successor employer to Swift with an obligation to bargain because 1) the management had a good faith doubt that the Union represented a majority of employees, and 2) the new operation had not yet hired a full complement of workers. On September 18, the Union sent a letter to Premium, which replied by referring to Purkett's letter of September 10. No collective bargaining took place.

On October 2, 1980, the Union filed charges with the Board, alleging that Premium had refused to bargain with the certified bargaining representative. The matter was heard by an Administrative Law Judge (ALJ) who found that Premium was a successor to Swift, that Premium had reached a representative complement of workers by the date that the Union requested bargaining, and that Premium did not have an adequate basis for a good faith doubt as to the Union's majority status. The ALJ concluded that Premium violated sections 8(a)(1) and (5) of the National Labor Relations Act, 29 U.S.C. Sec. 158(a)(1) and (5) (1976), by refusing to recognize and bargain with the Union. The Board affirmed the findings and conclusions of the ALJ.

DISCUSSION

A. Standard of Review

An order of the Board must be enforced if the Board's factual findings are supported

                by substantial evidence on the record as a whole, and the Board has correctly applied the law to those facts.   Westwood Import Co. v. NLRB, 681 F.2d 664, 666 (9th Cir.1982);  NLRB v. World Evangelism, Inc., 656 F.2d 1349, 1352 (9th Cir.1981)
                

B. The Successor Employer Issue

A new employer who conducts essentially the same business as the former employer, and who hires former employees of his predecessor as a majority of his work force is considered a successor employer. Westwood Import Co., 681 F.2d at 667; Kallmann v. NLRB, 640 F.2d 1094, 1100 (9th Cir.1981). Where a union has been recognized or certified as the representative of the employees of the predecessor, and the successor hires a majority of his workers from those employees, a presumption arises that the successor's employees also support the union. ⁵ Westwood Import Co., 681 F.2d at 668; Pacific Hide & Fur Depot, Inc. v. NLRB, 553 F.2d 609, 611 (9th Cir.1977). The basic rationale is that a mere change in ownership, without an essential change in working conditions, would not be likely to change employee attitudes toward representation. See NLRB v. Burns International Security Services, Inc., 406 U.S. 272, 278-79, 92 S.Ct. 1571, 1577, 32 L.Ed.2d 61 (1972); NLRB v. Band-Age, Inc., 534 F.2d 1 (1st Cir.1976), cert. denied, 429 U.S. 921, 97 S.Ct. 318, 50 L.Ed.2d 288 (1976).

Premium contends that the scope and nature of its business differs fundamentally from that of Swift. It points out that only sixty percent of the business at Swift's Spokane plant was to food service customers, whereas ninety-eight percent of Premium's sales were in the food service area. There is no evidence, however, that this change in emphasis caused any essential change in the employees' working conditions. Former Swift employees working for Premium did essentially the same jobs following the change in employer. Although Premium introduced a new product line, the employees used the same skills and tools as before. See NLRB v. Middleboro Fire Apparatus, Inc., 590 F.2d 4, 7-8 (1st Cir.1978); NLRB v. Band-Age, Inc., 534 F.2d at 6.

Premium points out that Swift was a large multi-national corporation, and that management decisions emanated from the Chicago office, whereas Premium was a small, locally owned and managed company. Such a change does not prevent the new employer from being a successor where the nature of the employing industry is basically unchanged. See Zim's Foodliner, Inc. v. NLRB, 495 F.2d, 1131, 1142 (7th Cir.) (change in employer from national grocery chain to individual supermarket unlikely to significantly affect employee attitudes), cert. denied, 419 U.S. 838, 95 S.Ct. 66, 42 L.Ed.2d 65 (1974). The Swift bargaining unit had been composed of workers at the Spokane plant only; the change in employers did not affect the size or definition of the unit. Although upper-level management changed, Racicot and Anderson provided some carry-over in supervisory personnel.

Premium's employees performed essentially the same work, in the same plant, with the same equipment as before, under supervisors who were known to them. Thus, substantial evidence supports the finding that there was no essential change in the business that would have affected employee attitudes towards representation.

C. The Full Complement Issue

Premium argues, however, that it is not a successor employer with a duty to bargain because at the time the Union demanded The "full complement" standard has its origin in dictum in NLRB v. Burns International Security Services, Inc., 406 U.S. 272, 92 S.Ct. 1571, 32 L.Ed.2d 61 (1972). The Supreme Court stated that in some situations, "it may not be clear until the successor employer has hired his full complement of employees that he has a duty to bargain with a union, since it will not be evident until then that the bargaining representative represents a majority of the employees in the unit ...." Id. at 295, 92 S.Ct. at 1568. Where a new employer has hired some former employees represented by the union, and some new employees not so represented, the employer's duty to bargain depends on whether a...