Texas World Service Co., Inc. v. N.L.R.B.

• Decision Date: 18 April 1991
• Docket Number: 90-4047,Nos. 89-4892,s. 89-4892
• Parties: 137 L.R.R.M. (BNA) 2412, 118 Lab.Cas. P 10,695 TEXAS WORLD SERVICE CO., INC., d/b/a World Service Company, Petitioner-Cross-Respondent, v. NATIONAL LABOR RELATIONS BOARD, Respondent-Cross-Petitioner. NATIONAL LABOR RELATIONS BOARD, Petitioner, v. Song Ae LIM d/b/a Lucky Service Co., Respondent.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1426

928 F.2d 1426

137 L.R.R.M. (BNA) 2412, 118 Lab.Cas. P 10,695

TEXAS WORLD SERVICE CO., INC., d/b/a World Service Company, Petitioner-Cross-Respondent, v. NATIONAL LABOR RELATIONS BOARD, Respondent-Cross-Petitioner.

NATIONAL LABOR RELATIONS BOARD, Petitioner, v. Song Ae LIM d/b/a Lucky Service Co., Respondent.

Nos. 89-4892, 90-4047.

United States Court of Appeals, Fifth Circuit.

April 18, 1991.

James S. Horwitz, Houston, Tex., for Texas World Service Co., Inc.

Patrick W. Jordan, Keck, Mahin Cate, San Francisco, Cal., for Song Ae Lim.

Robert F. Mace, Linda J. Dreeben, and Aileen Armstrong, Deputy Associate Gen. Counsel, N.L.R.B., Washington, D.C., for N.L.R.B.

Robert H. Miller, Regional Director, N.L.R.B., San Francisco, Cal., for other interested parties.

On petition for review and cross-application for enforcement of an order of the national labor relations board.

Before GARWOOD and WIENER, Circuit Judges, and VELA ^*, District Judge.

WIENER, Circuit Judge:

In this consolidated appeal of two complex, fact-intensive labor law cases, this court must consider, inter alia, the reversal by the National Labor Relations Board (Board or NLRB) of the finding by the Administrative Law Judge (ALJ) in his lengthy, detailed and well-reasoned Decision that no joint employer relationship existed between a contractor and a subcontractor. Finding that the Board had substantial evidence to support its position, we affirm its findings and grant enforcement of the Board's order.

I FACTS AND FINDINGS

Texas World Service Company, Inc. d/b/a World Service Company (World), a janitorial contractor whose principal place of business is Houston, Texas, conducts business nationwide, often subcontracting work to other firms which use their own employees. Shik Sony is World's president and owner. Gregory Choo, during the time relevant to this dispute, represented himself to the public as World's vice-president. Clyde Mayhew was responsible for World's day-to-day operations.

In early 1982, World contracted to perform janitorial work for several airlines at San Francisco International Airport (SFO). World subcontracted the SFO work to Whitewood Oriental Maintenance Company (Whitewood), which Charles Yoon owned and operated. Over a year later, on October 3, 1983, ¹ World notified Whitewood in writing that it was cancelling the SFO contract effective November 15th. On November 17th, World replaced Whitewood with Lucky Service Company (Lucky), which Song Ae Lim owns and operates.

Lim had formed Lucky in March. Choo had guaranteed a loan which Lim acquired in order to establish her business. In that same month Lim, on behalf of Lucky, approached Local 77 about entering into a collective bargaining agreement to cover janitorial employees whom Lucky might hire within Local 77's geographical jurisdiction. Lucky and Local 77 entered into such an agreement on April 28th. In July or August, Lucky and Local 77 signed a successor agreement retroactively effective from May 1st of that year until May 1, 1986. Lim entered into these agreements anticipating that she would eventually secure a subcontract from World to perform janitorial work at SFO.

Only when Lucky replaced Whitewood on November 17th did Lucky for the first time hire employees and begin janitorial operations. On that day Lim offered employment to all of Whitewood's janitors willing to work under Lucky's "Rules and Regulations of Personal Conduct." Only two declined employment. On November 21st, Lim and Local 77 signed a revised version of the agreement. The only changes were the effective date, changed to December 1st, and the exclusion of members of Lim's family from insurance coverage. On November 28th, Lim changed the hours of the night-shift workers. On December 1st, she instituted the terms and conditions of the agreement with Local 77.

Earlier, in July of 1983, a Whitewood janitor had begun an organizational campaign in support of Local 77. Although he presented signed authorization cards to Local 77, that local never filed a representation petition with the Board. The same janitor next collected signed authorization cards for Local 87 which on September 22nd filed a representation petition.

Whitewood's owner Yoon notified Sony that Local 87 had filed a petition. Sony directed Choo and Lim to handle the representation election and instructed Yoon to follow their directions. Sony also hired labor relations consultant Kenneth White, directing him to coordinate election strategy with Choo and Lim. Sony directed Yoon to follow White's directions too.

On November 10th the Board conducted an election in a unit of Whitewood's janitors. Nine votes were cast for the union and seven votes were cast against it. Four other ballots were challenged. After a hearing on the challenged ballots and on Whitewood's objections, Local 87 was certified in March 1984 as the exclusive bargaining representative of the janitors.

After Lucky replaced Whitewood in November, Local 87 contacted Choo requesting that Lucky bargain with it. Choo refused. After Local 87 was certified on March 29, 1984, it unavailingly repeated the request in both that and the following month.

In April, 1985, the ALJ held a ten-day hearing on the consolidated complaint which the Board had issued against the companies after Local 87 and several janitors had filed charges against them. In November, 1985, the ALJ issued his decision, ninety pages of which he devoted to his findings. Over three years later, in 1989, the Board issued its Decision and Order, 292 NLRB No. 130 (1989), in which it disagreed with some of the ALJ's findings.

The Board found that (1) World and Lucky as joint employers had violated sections 8(a)(5) and (1) of the National Labor Relations Act (NLRA), 29 U.S.C. Sec. 158(a)(5) and (1), by refusing to recognize and bargain with Service Employees International Union, Local 87; by recognizing, entering into, and maintaining a collective bargaining agreement with another local of the same international, Local 77; and by unilaterally changing the employees' terms and conditions of employment; (2) World and Lucky had violated sections 8(a)(2) and (1) of the Act, 29 U.S.C. Sec. 158(a)(2) and (1), by recognizing and executing a collective bargaining agreement with Local 77 when it did not represent a majority of the bargaining unit employees; (3) World had violated sections 8(a)(3) and (1) of the Act, 29 U.S.C. Sec. 158(a)(3) and (1), by replacing Whitewood as subcontractor with Lucky in an attempt to deprive unit employees of their right to representation by their selected representative, Local 87; (4) World had violated Section In case number 89-4892, World petitioned the court for review of the Board's Decision and Order, which found that World had engaged in unfair labor practices. The Board cross-applied for enforcement of its order. In case number 90-4047, the Board petitioned for enforcement of a portion of the same order against Lucky.

8(a)(1) of the Act, 29 U.S.C. Sec. 158(a)(1), by coercively interrogating employees concerning their union sympathies; and (5) World and Lucky had violated section 8(a)(1) by promising employees better terms and conditions of employment if they did not support Local 87 and by threatening that those employees would lose their jobs if they did support it.

This appeal concerns only some of the disagreements between the Board and the ALJ. The issues here are (1) the Board's finding that Lucky was a joint employer with World and not, as the ALJ found, a successor employer to it; (2) the Board's finding that World discriminatorily changed subcontractors to avoid recognizing and bargaining with Local 87, thereby violating sections 8(a)(3) and (1); and (3) the Board's rejection of the companies' position that prosecution of the section 8(a)(2) charge--bargaining with Local 77 when it did not represent a majority of the janitors--is barred, because it is not closely related to a timely filed section 8(a)(5) charge and because the unfair labor practice upon which the charge was based did not occur during the six months before filing and service of the charge--as section 10(b), 29 U.S.C. Sec. 160(b), requires.

World and Lucky resist enforcement of the Board's order, arguing that when the record is considered as a whole, it does not contain substantial evidence to support the order.

II STANDARD OF REVIEW

In reviewing the Board's decisions, this court determines, on the basis of the record taken as a whole, whether substantial evidence supports the Board's findings. ² Universal Camera Corp. v. NLRB, 340 U.S. 474, 71 S.Ct. 456, 95 L.Ed. 456 (1951). Long present by virtue of legislative mandate in many administrative statutes, the substantial evidence standard sounds simple enough. But for appellate courts charged with reviewing the decisions of administrative tribunals, applying that standard has proved to be a veritable will-o'-the-wisp. The Supreme Court has stated that substantial evidence is "more than a mere scintilla. It means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Id. at 477, 71 S.Ct. at 459 (quoting Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 217, 83 L.Ed. 126 (1938)). Substantial evidence "must be enough to justify, if the trial went to a jury, a refusal to direct a verdict when the conclusion sought to be drawn from it is one of fact for the jury." Id. (quoting NLRB v. Columbian Enameling & Stamping Co., 306 U.S. 292, 300, 59 S.Ct. 501, 505, 83 L.Ed. 660 (1939)). The deference accorded the Board's findings of fact is, thus, considerable. See 2 S. Childress & M. Davis, Standards of Review, Sec. 15.1 (1986); R. Pierce, S. Shapiro, & P. Verkuil, Administrative Law and Process, Sec. 7.3.1 (1985). ³

Nevertheless, when, as in the instant case, the Board disagrees with the ALJ's findings, this court examines the evidence and findings of the Board more critically than it would have...