Deering Milliken, Inc. v. Johnston

• Decision Date: 13 October 1961
• Docket Number: No. 8375.,8375.
• Parties: DEERING MILLIKEN, INC., a Corporation, Appellee, v. Reed JOHNSTON, as Regional Director of the National Labor Relations Board, Appellant.
• Court: U.S. Court of Appeals — Fourth Circuit

295 F.2d 856 (1961)

DEERING MILLIKEN, INC., a Corporation, Appellee, v. Reed JOHNSTON, as Regional Director of the National Labor Relations Board, Appellant.

No. 8375.

United States Court of Appeals Fourth Circuit.

Argued June 12, 1961.

Decided October 13, 1961.

James C. Paras, Atty., National Labor Relations Board, Washington, D. C. (Stuart Rothman, Gen. Counsel, Dominick L. Manoli, Associate Gen. Counsel, Marcel Mallet-Prevost, Asst. Gen. Counsel, and Marion L. Griffin, Atty., National Labor Relations Board, Washington, D. C., on brief), for appellant.

John R. Schoemer, Jr., New York City, and Thornton H. Brooks, Greensboro, N. C. (McLendon, Brim, Holderness & Brooks, Greensboro, N. C., and Townley, Updike, Carter & Rodgers, New York City, on brief), for appellee.

Before SOBELOFF, Chief Judge, and HAYNSWORTH and BOREMAN, Circuit Judges.

HAYNSWORTH, Circuit Judge.

This appeal is from an order of the District Court for the Middle District of North Carolina entered upon the application of Deering Milliken, Inc., enjoining the Regional Director of the National Labor Relations Board from proceeding with certain further hearings ordered by the Board. The injunction was predicated upon findings that a second remand order in an unfair labor practice case was in violation of the Board's duty to dispose of the case with reasonable dispatch and was arbitrary and oppressive.

The principal question on appeal is whether the District Court had jurisdiction to enter an injunctive order. We hold it did.

The administrative proceedings began in October 1956 with the filing of a charge against Darlington Manufacturing Company, alleging that Darlington had committed unfair labor practices when it discontinued its operations and went into liquidation. On the basis of this charge, a complaint was issued by the General Counsel and hearings were had starting in January 1957.

In an Intermediate Report, dated April 30, 1957, the Trial Examiner concluded that there was economic reason for the liquidation, but that it was also motivated by a recent election among Darlington's employees held under the supervision of the Board. He recommended an order finding that Darlington had committed unfair labor practices, but recommending also that because of Darlington's cessation of business, there was no reinstatement remedy.¹

During the 1957 hearings the Textile Workers Union of America made an offer to prove that Darlington Manufacturing Company was one of a chain of mills controlled by Deering Milliken & Co., Inc., a New York corporation, Darlington's sales representative. This offer of proof was rejected by the Trial Examiner.

On December 16, 1957, the Board, without passing upon the substantive question as to whether Darlington had committed an unfair labor practice, ordered a remand of the case for the purpose of receiving additional evidence along the lines suggested by the union's offer of proof. A majority of the Board thought that the inclusion of such evidence in the record would be desirable before consideration of the substantive issue. Two members of the Board dissented on the ground that the evidence did not bear on the substantive issue.

Preparatory to the hearings on remand, Deering Milliken & Co., Inc., which had then been made a party to the proceedings, made available for inspection by the General Counsel some 10,000 pages of records and documents, of which the General Counsel selected some 2600 pages for further analysis and possible use. At the further hearings some fourteen witnesses testified. Over 400 pages of exhibits were introduced, and over 2500 pages of testimony were taken. The preparation of one of these exhibits, at the request of the General Counsel of the Board, is alleged to have required nearly 400 man-hours of work by employees of Deering Milliken & Co., Inc.

During the remand hearings, extensive evidence was taken as to the relationship between Deering Milliken & Co., Inc. and Darlington, and there was frequent reference to other corporations alleged by the union to be members of a chain, of which Deering Milliken & Co., Inc. and Darlington were members. The proof showed that individual members of the Milliken family owned in the aggregate a majority of the stock of Deering Milliken & Co., Inc., of Darlington, and of certain other corporations, particularly The Cotwool Manufacturing Corporation, which owned and operated a number of textile manufacturing plants and which had subsidiary corporations owning and operating other textile manufacturing plants. The evidence discloses that the Millikens were not the only stockholders of these corporations, but it clearly establishes that, through ownership of a majority of the stock of each, they, as a group, exercised effective control of each of them. It also clearly establishes the fact, however, that Deering Milliken & Co., Inc. was itself engaged in no manufacturing operations, but was the sales representative of each of the manufacturing corporations controlled by members of the Milliken family through ownership of a majority of the outstanding stock.

At the conclusion of the remand hearings, the General Counsel's representative requested that the record be held open in order that he might review the evidence with his superiors to be certain that enough of the available evidence to support the union's theory of a unitary organization had been offered. The request was granted and the record was held open for the requested period of time, but thereafter the hearings were closed without any effort on the part of the General Counsel or of the union to offer additional or supplemental evidence.

On December 31, 1959, the Trial Examiner filed a Supplemental Intermediate Report. This report examines in detail the relationship between Deering Milliken & Co., Inc. and Darlington. There is also in it much about the relationship of Deering Milliken & Co., Inc. and the other manufacturing corporations.

The Supplemental Intermediate Report concluded with a finding that Deering Milliken & Co., Inc. did not occupy a single employer status with Darlington and recommended dismissal of the complaint as to Deering Milliken & Co., Inc. The Supplemental Intermediate Report contains much language suggesting that, in the opinion of the Trial Examiner, much time and effort had been fruitlessly expended. Among other things, he stated in the report, "We have indeed labored but have brought forth not even a mouse." He expressed the opinion it was not "even remotely possible that employment of former employees of Darlington in the other mills will be directed."

Upon exceptions to the Supplemental Intermediate Report and the briefs of the parties, the case again came before the Board for decision in early 1960, more than two years after its first remand order. Nothing further was done, however, until January 9, 1961, when the union filed a motion to reopen the case and it was again remanded to the Trial Examiner for further hearings, again with two members of the Board dissenting.

The motion for another remand was based upon newspaper articles published in December 1960, which, the motion asserted, contained newly discovered evidence. These articles announced that Deering Milliken, Inc. had appointed a president of each of its three manufacturing divisions, its fine goods division, its worsted division, and its woolen division.² The affidavit accompanying the union's motion suggested that the announcement was inconsistent with the earlier contention of Deering Milliken & Co., Inc. that it was not engaged in manufacturing operations. The apparent inconsistency was emphasized by the fact that the newspaper articles listed the particular mills in each of the three divisions, many of which were referred to in the record made in the hearings on the first remand and which the Trial Examiner had found were not shown to have been controlled by Deering Milliken & Co., Inc.

In opposition to the motion to again reopen the case and remand it for a second time, an affidavit was filed in which it was stated that in June 1960 Deering Milliken & Co., Inc., the New York corporation which had been a party to these proceedings, had been merged into The Cotwool Manufacturing Corporation, a Delaware corporation, and that Cotwool's name had thereupon been changed to Deering Milliken, Inc. The record, of course, shows that Cotwool, controlled by the Milliken family through majority stock ownership, was extensively engaged in the textile manufacturing business in 1956, and the affidavit indicates it was still so engaged in 1960. In opposition to the motion to again reopen the case, it was contended that Cotwool's (now Deering Milliken, Inc.) appointment of executives of its manufacturing divisions was irrelevant to the question of whether the old sales corporation, Deering Milliken & Co., Inc., in 1956 controlled the manufacturing operations and labor policies of the mills for which it acted as sales representative.

Though the case had been then pending for many months before the Board for a decision on the substantive question, whether an unfair labor practice had been committed by Darlington, and though there had been a previous remand leading to prolonged and extensive hearings on the supplemental question of possible remedies in the event an unfair labor practice should be found to have been committed,³ the Board again remanded the case for further hearings and testimony on the supplemental question of possible remedies. The remand is in broad terms, being:

"* * * for the purpose of taking newly discovered testimony and evidence relating to (1) the Deering, Milliken & Co., Inc. press release referred to in the aforesaid Affidavit, (2) the responsibility of Deering, Milliken & Co., Inc., either for the unfair labor practices of Darlington Manufacturing Company or to remedy those unfair labor practices and (3) such further evidence as may be deemed proper and appropriate under the

...