Local No. 627, Intern. Union of Operating Engineers, AFL-CIO v. N.L.R.B.

• Decision Date: 08 September 1975
• Docket Number: No. 73-2277,AFL-CI,P,73-2277
• Citation: 171 U.S.App.D.C. 102,518 F.2d 1040
• Parties: 90 L.R.R.M. (BNA) 2321, 171 U.S.App.D.C. 102, 77 Lab.Cas. P 11,072 LOCAL NO. 627, INTERNATIONAL UNION OF OPERATING ENGINEERS,etitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent, South Prairie Construction Company and Peter Kiewit Sons' Company, Intervenors.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 1040

518 F.2d 1040

90 L.R.R.M. (BNA) 2321, 171 U.S.App.D.C. 102,

77 Lab.Cas. P 11,072

LOCAL NO. 627, INTERNATIONAL UNION OF OPERATING ENGINEERS AFL-CIO, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent South Prairie Construction Company and Peter Kiewit Sons' Company, Intervenors.

No. 73-2277.

United States Court of Appeals District of Columbia Circuit.

Argued Feb. 24, 1975.

Decided Sept. 8, 1975.

Laurence Gold, Washington, D. C., for petitioner. J. Albert Woll, Washington, D. C., was on the brief for petitioner.

Margery Lieber, Atty., N. L. R. B., with whom John S. Irving, Deputy Gen. Counsel, Patrick Hardin, Associate Gen. Counsel, Elliott Moore, Deputy Associate Gen. Counsel and William H. DuRoss, III, Atty., N. L. R. B., were on the brief for respondent.

Edward E. Soule, Oklahoma City, Okl., was on the brief for intervenor South Prairie Construction Co.

Robert H. Doyle, Omaha, Neb., entered an appearance for intervenor Peter Kiewit Sons' Co.

Before TAMM and LEVENTHAL, Circuit Judges, and MILLER, ^* Judge, United States Court of Customs and Patent Appeals.

Opinion for the Court filed by Judge MILLER.

MILLER, Judge:

Petitioner seeks review of the order of the National Labor Relations Board dismissing a section 8(a)(1) and (5) (29 U.S.C. § 158(a)(1) and (5)) ¹ complaint issued September 6, 1972, against respondents Peter Kiewit Sons' Co. ("Kiewit") and South Prairie Construction Co. ("South Prairie"). The Board reversed the Administrative Law Judge ("ALJ") and found that Kiewit and South Prairie had no obligation to recognize petitioner, Local 627, as the bargaining representative of the employees of South Prairie or to extend the terms of Local 627's agreement with Kiewit to South Prairie's employees. The key issue is whether, for purposes of the National Labor Relations Act, Kiewit and South Prairie are separate employers, as determined by the Board, or a "single employer," as determined by the ALJ. We vacate the order and remand the case.

In deciding the key issue adversely to Local 627, the Board did not point to any of the findings of fact made by the ALJ with which it disagreed. Rather, it appears that the Board's disagreement with the conclusions drawn by the ALJ from these facts as they bear on the "single employer" issue constituted the basis for the Board's reversal.

Background

Respondents are wholly-owned operating subsidiaries of Peter Kiewit Sons', Inc. ("Kiewit, Inc.") All are Nebraska corporations. Kiewit and Kiewit, Inc., have their main offices in Omaha. South Prairie's main office is in Oklahoma City, although the members of its board of directors live in Omaha, have the same set of offices in Omaha as Kiewit, and share with Kiewit the use of Kiewit, Inc.'s telephone switchboard. Kiewit, Inc. performs accounting services for both Kiewit and South Prairie, and paychecks for both Kiewit and South Prairie are made out in Omaha on the same pay machine. Kiewit and South Prairie have separate accounting records, bank accounts, offices in Oklahoma, telephone numbers, supervisors, and office staffs. Neither has subcontracted work to the other. Each submits separate job bids. Each has a different dollar maximum fixed by the Oklahoma State Highway Department for work that it may undertake. Although the Board observed that each has separate officers, the ALJ noted that Kiewit's controller was South Prairie's president until March 1, 1972, that South Prairie's former vice president is Kiewit's executive vice president and a member of its board of directors, and that South Prairie's former secretary is Kiewit's secretary.

For many years, Kiewit was engaged in construction work, including heavy and highway construction in Oklahoma. J. N. Darveau was its long-time area manager for Oklahoma and represented it during the negotiations which culminated in the involved agreement with Local 627. This agreement was effective between July 1970 and June 1973 and included union shop and hiring hall provisions. It was at least the third in a series of agreements that had been in effect since 1960 covering heavy and highway construction. Local 627 has represented Kiewit's employees continuously since 1960.

Kiewit was the only highway contractor in Oklahoma to have a signed agreement with a union, and its wage costs were higher than those of its competitors. ² As stated by the Board, because of the disparity in costs from those of its competitors, Kiewit, Inc., decided ³ that South Prairie, a nonunion contractor engaged for many years in heavy and highway construction work outside Oklahoma, should be activated in Oklahoma to compete on equal terms with nonunion contractors. ⁴ On November 29, 1971, South Prairie filed an application to do business in Oklahoma, receiving its certificate of authority on December 10. In January or February of the following year it submitted a financial statement to the State Highway Department as required of contractors desiring to qualify for the Department's work, and on or about February 25, 1972, it began doing business as a highway contractor.

Darveau became South Prairie's president on March 1, 1972, at which time South Prairie took over the Oklahoma City office and an adjacent storage yard which had been occupied by Kiewit when Darveau was its area manager. (Kiewit changed its office to a construction trailer, but had moved to another office at the time of the hearing before the ALJ on October 11 and 12, 1972.) Myron Blume, an engineer estimator for Kiewit, became South Prairie's assistant secretary and assisted Darveau in the preparation of bids as he had while working for Kiewit. The material engineer and the secretary to Darveau while he was with Kiewit became employees of South Prairie in the same capacities, as did the superintendent in charge of the storage yard. By the time of the hearing before the ALJ, a majority of South Prairie's supervisory staff had been supervisors for Kiewit. Most of this group transferred without any break in employment; and normally they continued to serve in the same capacity, to receive the same salaries, and to be covered by the same insurance plan. There was no hiring by Kiewit of supervisors who had worked for South Prairie.

The ALJ pointed to an instance when a Kiewit employee performed work for South Prairie but was paid by Kiewit. In June 1972, Gerald Kitchin, the truck mechanic foreman for Kiewit at "the Will Rogers Airport job," asked mechanic Kenneth Bolding, also employed by Kiewit at that job, about working in South Prairie's Oklahoma City yard. Bolding replied that he did not want to go because he would lose his health and welfare benefits, "that being a non-union company." A few days later, Kitchin told Bolding that "we have it worked out to where you will go ahead and be paid through this office at the airport." Bolding then reported to South Prairie's Oklahoma City yard where he worked for a month constructing a "steel inserter" with the assistance of South Prairie's equipment supervisor and a South Prairie mechanic. While working on this equipment, Bolding was paid at his old union rate by Kiewit checks. As a result of this activity, about $5,000 (representing labor and material) was transferred from Kiewit to South Prairie's account. ⁵

The ALJ described another incident. When Kiewit had no more need for a "batch plant" crew at "the Nowata job," the concrete foreman told the crew to go to South Prairie's Tulsa paving job. Three members of the crew drove directly to the Tulsa paving job and began work at about the same rate of pay, without applying therefor and without any break in employment.

Between January 1 and November 23, 1971, the date South Prairie filed to do business in Oklahoma, Kiewit bid on thirty-five Oklahoma State Highway Department jobs and was low on four, the last of which was obtained on November 23. ⁶ Between February 25 and June 23, 1972, South Prairie bid on four State Highway Department jobs (representing five to ten percent of the work offered by the Department), and on June 20, 1972, it bid on four of the five jobs let by the Oklahoma Turnpike Authority. None of these bids was successful. Between November 23, 1971, and July 23, 1972, Kiewit submitted no bids for State Highway Department jobs. ⁷ Between July 23 and October 1, 1972, Kiewit bid on three Highway Department jobs, but received none. During the same period, South Prairie bid on three different Highway Department jobs and received one, which the ALJ termed "one of the largest in Highway Department history." At the time of the hearing on October 11 and 12, 1972, South Prairie had not yet begun work on this job (which the ALJ found could be performed by Kiewit), but during the time it had been in business in Oklahoma it had performed work on several Oklahoma jobs as a subcontractor.

Commencing in March 1972, Local 627's business agent, Ellis, complained to Kiewit's Coyne and South Prairie's Darveau that Kiewit had brought South Prairie into Oklahoma to start bidding on highway work. Coyne disclaimed knowledge "of any part of it," although he had actually participated in the decision of Kiewit, Inc.'s board of directors to bring South Prairie into Oklahoma. Ellis sought unsuccessfully to have Kiewit and South Prairie agree to apply the Union's agreement with Kiewit to South Prairie's work. On June 20, 1972, the day South Prairie bid on four Turnpike Authority jobs, Local 627 filed the charge that led to the proceedings below.

Guidelines for "Single Employer" Status

In Radio Union v. Broadcast Service of Mobile, Inc., 380 U.S. 255, 85 S.Ct. 876, 13 L.Ed.2d 789 (1965), the Supreme Court, in a per curiam opinion affirming a "single employer" holding below, said:

The controlling criteria, set out and elaborated in Board decisions, are interrelation of operations, common management, centralized control of labor relations and common ownership.

The Court cited several NLRB decisions including one affirmed in ...