Babbitt Engineering & MacHinery v. Agricultural Labor Relations Bd.

• Citation: 199 Cal.Rptr. 445,152 Cal.App.3d 310
• Decision Date: 23 February 1984
• Docket Number: R,AFL-CI
• Court: California Court of Appeals
• Parties: BABBITT ENGINEERING & MACHINERY, INC., et al., Petitioners, v. AGRICULTURAL LABOR RELATIONS BOARD, Respondent; UNITED FARM WORKERS OF AMERICA,eal Party in Interest. Civ. 26773.

Page 445

199 Cal.Rptr. 445

152 Cal.App.3d 310

BABBITT ENGINEERING & MACHINERY, INC., et al., Petitioners, v. AGRICULTURAL LABOR RELATIONS BOARD, Respondent;

UNITED FARM WORKERS OF AMERICA, AFL-CIO, Real Party in Interest.

Civ. 26773.

Court of Appeal, Fourth District, Division 1, California.

Feb. 23, 1984.

Hearing Denied May 16, 1984.

John D. Collins, Christopher J. Martin and Luce, Forward, Hamilton & Scripps, Los Angeles, for petitioners.

Manuel M. Medeiros and Ruth Rokeach, Sacramento, for respondent.

No appearance for real party in interest.

STANIFORTH, Associate Justice.

Babbitt Engineering & Machinery, Inc. (Babbitt), seeks review of a final order of the Agricultural Labor Relations Board (ALRB or Board) affirming the administrative law officer's (ALO) findings that Babbitt and San Marcos Greenhouses, Inc. (San Marcos) ¹ had violated the Agricultural Labor While Babbitt has objected to a number of the ALRB's findings, the threshold issue concerns the propriety of the ALRB's determination that Babbitt was the "successor employer" to Lewis and in such capacity violated state labor law and was guilty of unfair labor practices.

Relations Act (ALRA) (Lab.Code, § 1141 et seq.) by (1) refusing to bargain with the United Farm Workers of America AFL-CIO (UFW or the Union), (2) engaging in a discriminatory campaign to refuse employment to former employees of Lewis Gardens, Inc. (Lewis) and (3) discriminatorily terminating three employees who had worked for Lewis. Based upon these findings the Board ordered a number of specific remedies, including payment of back wages to the affected employees. The unfair labor practices were alleged to have been committed by Babbitt after purchasing a nursery business from Lewis on January 21, 1979. Shortly before the sale of the nursery to Babbitt the UFW had won a decisive victory by unanimous vote in a representation election held among Lewis' employees.

FACTS

In September 1978, the ALRB had conducted an election among Lewis' agricultural workers. At that election by unanimous vote the employees designated the UFW as their representative. Thereafter, on January 18, 1979, the ALRB certified the UFW as the exclusive bargaining representative of Lewis' employees. Lewis had owned this business for many years. Lewis specializing in azaleas also raised and sold a variety of greenhouse plants. By the fall of 1978 Lewis' business was in bad economic circumstances. While the employees had numbered 46 in March 1970, by late 1978 there remained only a skeleton crew of 6 employees, all members of the Union.

Babbitt is a corporation engaged in consulting and design for heavy tube mills. The corporate stock is owned by Charles Babbitt (Mr. Babbitt). On January 21, 1979 (three days after the ALRB certification of the UFW), Babbitt entered into a sale-purchase agreement with Lewis whereby Babbitt acquired all of Lewis' common stock. Mrs. Babbitt became president of Lewis, Mr. Babbitt vice-president and a third person secretary. These same three persons were also the officers of Babbitt.

By this agreement Babbitt acquired all assets of both Lewis' Whittier and Vista locations and the land at the Vista location. Babbitt purchased Lewis with the intent to continue the business as a nursery operation. Upon sale six Lewis employees remaining on the payroll continued in their jobs. The nature of the operation remained essentially unchanged. Mrs. Babbitt managed the nursery business, continued azaleas as the major product line even after she discovered they were diseased. She paid the employees on Lewis' payroll checks until September 1979.

By letter dated January 24 the newly certified UFW wrote Lewis requesting bargaining. Donald Lewis (Mr. Lewis) received this letter and before January 29 showed it to Mrs. Babbitt. Mrs. Babbitt said she was not interested in discussing the union situation. A few days later Mrs. Babbitt flew to San Francisco to consult with the law firm of Bronson, Bronson and McKinnon on this labor matter. She had been advised by Mr. Lewis she should answer the UFW's request to bargain. Pursuant to legal advice received, Mr. Lewis drafted and sent a letter (dated Feb. 9) to the UFW informing it the business had been sold and the purchaser was seeking guidance concerning the UFW's request to bargain. Immediately after her trip to San Francisco, Mrs. Babbitt instructed Raul Vega, the person to whom she had delegated hiring authority, to stop hiring. Before her trip Vega had informed her the former Lewis employees were inquiring about reemployment. Shortly after the trip to On February 16, approximately two weeks after the sale, the UFW wrote directly to Mrs. Babbitt asserting Babbitt was the successor employer to Lewis and demanded to bargain. Following receipt of this letter Mrs. Babbitt again sought and obtained legal advice. Based upon the advice received she sent a letter (dated March 9) stating--without citation of reason--she was not the successor employer and therefore would not bargain. Mrs. Babbitt also made statements about her predicament with the Union. She told one employee that with respect to the Union she had "inherited a bag of worms." On another occasion she received a telephone call about the Union and commented to the caller "Things are really fucked up around here, and I'm going to get to the bottom of this."

San Francisco she fired Vega and commenced hiring herself.

In the months of February and March approximately 20 former Lewis employees inquired about reemployment. ² Of the 19 new employees Mrs. Babbitt hired in February and March, only 3 were former Lewis employees; two, the Gastellums, had worked long before the Union election and the third, Larry Montano, was a supervisor. In this factual context the UFW initiated proceeding by filing charges on February 22, March 21 and 28 and June 7, 1979, alleging violations of the ALRA. After the adverse decision by the Board, Babbitt filed this petition for review pursuant to Labor Code section 1160.8.

DISCUSSION

Fundamental to a determination of Babbitt's contention it did not engage in an illegal discriminatory campaign to hire or to fire former Lewis employees is the threshold question of the duties and obligations under the ALRA, incurred by Babbitt upon purchasing and undertaking the agricultural operations of Lewis. The administrative law officer examined the circumstances surrounding the change in the ownership and Babbitt's business operations at Lewis and concluded Babbitt was a "successor employer" to Lewis. The Board approved the ALO findings and held Babbitt succeeded to Lewis' obligations to recognize and bargain with the UFW, the Union that had just been officially certified as the exclusive bargaining representative at Lewis.

The California Supreme Court in San Clemente Ranch, Ltd. v. Agricultural Labor Relations Bd., 29 Cal.3d 874, 863-892, 176 Cal.Rptr. 768, 633 P.2d 964, spelled out with particularity the governing law concerning when a purchaser of an agricultural operation shall be deemed a "successor employer" and thereby obligated to recognize and bargain with the Union. (See also Rivcom Corp. v. Agricultural Labor Relations Bd., 34 Cal.3d 743, 764-765, 195 Cal.Rptr. 651, 670 P.2d 305.) Controlling California cases rely upon federal judicial and administrative National Labor Relations Board (NLRB) decisions in obedience to the Labor Code directive (§ 1148) to "follow applicable [NLRB] precedents." (See N.L.R.B. v. Burns International Security Services, Inc., 406 U.S. 272, 92 S.Ct. 1571, 32 L.Ed.2d 61 and Howard Johnson Co., Inc. v. Detroit Loc. Jt. Ex. Bd., etc., 417 U.S. 249, 94 S.Ct. 2236, 41 L.Ed.2d 46.

I THE FEDERAL PRECEDENTS

Neither the California act (ALRA) nor the federal act (National Labor Relations Act (NLRA)) contain any specific statutory provision dealing with the successorship issue. ³ The cases decided under the NLRA No single mechanical formula has been devised for determining whether an employer has succeeded to the bargaining obligations of its predecessor. The Supreme Court in Howard Johnson Co., Inc. v. Detroit Loc. Jt. Ex. Bd., etc., supra, 417 U.S. 249, 256, 94 S.Ct. 2236, 2240, 41 L.Ed.2d 46, explained:

                however, [152 Cal.App.3d 320] have come to recognize the fundamental purposes of the act require the purchaser of a business to, in some circumstances, assume the statutory obligations of its predecessor.  (See National Labor Relations Board v. Colten (6th Cir.1939) 105 F.2d 179.)   Since Colten, federal authorities have recognized the fundamental purposes of the NLRB required a new employing entity assume the statutory obligations of a predecessor employer in a great variety of circumstances beyond the technical changeover of ownership involved in Colten. 4  Successor liabilities have been imposed as a matter of law where the new employer purchased the entire business of the predecessor.  (N.L.R.B. v. McFarland (10th Cir.1962) 306 F.2d 219) or where the new employer acquires a part or all of the assets of its predecessor.  (N.L.R.B. v. Interstate 65 Corporation (6th Cir.1971) 453 F.2d 269.)   And even where the new employer has not acquired any of the predecessor's assets but simply hired a majority or a substantial number of the employees of the predecessor bargaining unit, i.e., has taken over the workforce only, successorship employer obligations have been imposed.  (N.L.R.B. v. Burns International Security Services, Inc., supra, 406 U.S. 272, 92 S.Ct. 1571, 32 L.Ed.2d 61.)
                

"[W]e must necessarily proceed cautiously, in the traditional case-by-case approach of the common law. Particularly in light of the difficulty of the successorship question, the myriad factual circumstances and legal contexts in which it can arise, and the absence of congressional guidance as to its resolution, emphasis on the facts of each case as it arises is especially appropriate."

A number of factors, however, have come to be recognized as guideposts for...