Barker v. A.D. Conner Inc.
| Citation | 807 F.Supp.2d 707,191 L.R.R.M. (BNA) 2188 |
| Decision Date | 11 July 2011 |
| Docket Number | Case No. 11–cv–2255. |
| Parties | Joseph A BARKER, Regional Director of Region 13 of the National Labor Relations Board, for and on behalf of the National Labor Relations Board, Petitioner, v. A.D. CONNER INC. and Heidenreich Trucking Company, as alter egos, Respondent. |
| Court | U.S. District Court — Northern District of Illinois |
OPINION TEXT STARTS HERE
Steven L. Platt, Pedersen & Houpt, Chicago, IL, for Respondent.
Daniel E. Murphy, Brigid Moira Garrity, Chicago, IL, for Petitioner.
Before the Court is a petition for injunctive relief [4] pursuant to 29 U.S.C. § 160(j) (“10(j)”) 1 filed by the Director of Region 13 for the National Labor Relations Board (“Petitioner”), against Heidenreich Trucking Company, as an alter ego of A.D. Conner Inc. (“Respondent”). For the reasons and in the manner explained below, Petitioner's request for a preliminary injunction is granted.
This lawsuit concerns violations of the federal labor laws that allegedly took place at A.D. Conner Inc. (“Conner”), a fuel hauling company owned by William J. McEnery (“McEnery”). In October 2010, Conner shut down and a number of drivers and a major customer transferred to another (non-unionized) company owned by McEnery, Heidenreich Trucking Company (“Heidenreich”).
On October 15,2 the Truck Drivers, Oil Drivers, Filling Station and Platform Workers Union Local No. 142 (“Local 142”), an affiliate of the International Brotherhood of Teamsters, filed a charge with the National Labor Relations Board (“NLRB” or the “Board”). The same day, the Truck Drivers, Oil Drivers, Filling Station and Platform Workers Union Local No. 705 (“Local 705”) filed an identical charge. Both Unions 3 filed identical amended charges with the Board on January 19, 2011, alleging that Respondent engaged in (and continued to engage in) unfair labor practices within the meaning of Sections 8(a)(1), (3) and (5) of the Act. On January 31, 2011, the Board consolidated the cases involving the Unions.
After a period of investigation, on March 8, 9, and 10, 2011, the parties conducted an administrative hearing before an administrative law judge (“ALJ”) of the NLRB. At the hearing, the ALJ heard testimony from ten witnesses and received a number of documents into evidence. On June 24, 2011 (after the instant petition was fully briefed), the ALJ issued his decision, which Petitioner then filed with the Court [75] (hereinafter “ALJ Decision”). Among other things, the ALJ concluded the following: that (1) Heidenreich and Conner were alter egos of each other; (2) Respondents' conduct in threatening to close its facilities and soliciting employees to decertify their Unions violated Section 8(a)(1) of the Act; (3) Respondents violated Section 8(a)(5) of the Act by dealing directly with union-represented employees; and (4) Respondents violated Section 8(a)(5) of the Act by refusing to bargain with the Unions about the effects of their decision to shut down Conner. The ALJ ordered Respondent to cease and desist in its violations of the Act and ordered Respondent to take a number of affirmative actions, including re-hiring terminated employees, paying employees the wages they formerly received under the Union contracts (plus back-pay), and formally recognizing and bargaining with the Unions.
The following facts are those that are relevant to the instant petition, which requests that the Court enter temporary injunctive relief prior to the Board's ruling in the pending administrative action.4
In 1993, McEnery created The William J. McEnery Revocable Trust (the “Trust”), of which he is the sole trustee. Tr. 584. At some point thereafter, McEnery transferred ownership of his various companies to the Trust. Currently, the Trust is the sole owner of Conner, Heidenreich, Gas City Ltd. (a chain of gas stations/convenience stores), and a number of other companies including WJM Leasing, LLC, McEnery Trucking and Leasing, LLC, and McEnery Enterprises, LLC. Tr. 584–586. McEnery is the president and secretary of all of these entities. Id. None of these entities have any other officers or directors. Id. 585–586. All of the entities engage in business operations that interrelate with Gas City in some fashion.
McEnery incorporated Conner in 1982. Out of all of the companies listed above, only Conner's employees ever belonged to a union. Before it shut down, Conner operated out of two locations, Frankfort, Illinois and Porter, Indiana. The larger location was Conner's headquarters in Frankfort. The employees at the Frankfort location belonged to Local 705, and the employees at the Porter location belonged to Local 142. In 2010, Conner employed 20 drivers in Frankfort and 15 in Porter. Conner's business mainly consisted of hauling gas to stations locally. Tr. 668–69. One of Conner's principal customers was Gas City. Conner's other customers included Jewel, Marathon, Speedway, Shell, and BP Amoco. Tr. 691–92.
McEnery testified that prior to the events in question, he had essentially removed himself from day-to-day operations of any of his entities.6 Instead, David Christopher (“Christopher”), who is McEnery's son-in-law, managed the day-to-day operations at Conner. Tr. 664–65. Christopher's title was vice president of operations at Conner. Tr. 590. Christopher served as the “contact person” for Conner's relations with the Unions and was authorized to sign agreements with the Unions. Tr. 590–91.
An individual named Robert Heidenreich founded Heidenreich in 1986. The McEnery Trust bought Heidenreich in 2005, but Mr. Heidenreich remained involved in managing the business. Management testified that Heidenreich operated nationwide and mainly was in the business of hauling ethanol to and from refineries. Id. However, as discussed below, Heidenreich also hauled gas to local gas stations (namely, Gas City locations) on a regular basis. Heidenreich's business consisted solely of owner-operators; that is, Heidenreich's drivers owned their own trucks and were independent contractors of the company. Heidenreich's drivers never belonged to a union and were not “employees” of the company under the Act. Heidenreich operated out of the same Frankfort location as did Conner. Heidenreich also had a Porter location that was co-located with a Gas City outlet, but it appears that Heidenreich did not share its Porter location with Conner. See infra n. 10.
Robert Heidenreich and Peter Casper managed Heidenreich and were in charge of the company's labor relations. However, both Casper and Mr. Heidenreich reported to McEnery, and McEnery admitted that he “made the ultimate decisions * * * for the company.” Tr. 663; see also Tr. 668. Mr. Heidenreich left the company sometime in the fall of 2010. Tr. 667.
Conner and Heidenreich had some similarities: They had common ownership, both were in the business of hauling petroleum products, and they shared the Frankfort location. . Further, Lofrano testified that drivers for both companies obtained the fuel used to run their trucks from the same fuel tank on the Frankfort property. However, at least while they both were in operation, Conner and Heidenreich maintained separate drivers, equipment, and had a mostly-distinct customer base. Management testified that while Conner mostly hauled gas to local filling stations, apart from making Gas City deliveries, Heidenreich mostly hauled ethanol to and from refineries and operated nationwide.
By 2010, both Gas City and Conner were in financial distress. In February 2010, McEnery wrote a letter to Local 705 in an attempt to engage the Unions in negotiations about their contract. Tr. 807. Around the same time, Christopher met with a representative of Local 705 to discuss Conner's precarious situation and to attempt to obtain concessions. Tr. 807–809; Tr. 489. Christopher kept Local 142 apprised of these discussions through phone calls. Tr. 807–08. 7
In June, Gas City filed for bankruptcy and began procedures to restructure. Gas City lost its line of credit with Bank of America and was forced to shift to a “cash-basis,” meaning that it was only able to pay for Conner's deliveries with cash that it had on hand. See Tr. 835.
On August 5, Christopher sent an e-mail to the Unions with a proposal that included wage reductions and other concessions. See Pet. Ex. 30. Neil Messino (the Union representative for Local 705) testified that on August 19, he and Christopher met to discuss the proposal. At the August 19 meeting, Messino told Christopher that the Union required an independent audit of Conner's financials in order to determine the severity of Respondent's stated economic position and whether Christopher's wage and benefits reduction proposals were fair. Tr. 551–52. The audit was completed within two weeks of that meeting. Id.
There is a heated dispute between the parties about what generally occurred between February and late September. Respondent's position is basically that the Unions stonewalled Conner—while Conner's financial position became more and more precarious, the Unions ignored Conner's pleas for help. Petitioner claims that Conner never gave the Unions an opportunity to assess their position and bargain with management. Regardless, Conner and the Unions did not agree on any concessions or enter into any new contracts during this period. It is unclear whether management and representatives from the Union even spoke to each other between early August and mid-October.
Former Conner drivers Gregory Knorr and David Pippin testified that on September 21, Christopher and McEnery held a meeting with a select group of drivers in the Frankfort facility. Knorr testified that McEnery starting the meeting by saying ...
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