Local Union No. 5741, United Mine Workers of America v. N.L.R.B.

• Court: U.S. Court of Appeals — Sixth Circuit
• Writing for the Court: Before KEITH and NELSON, Circuit Judges, and DUGGAN; DAVID A. NELSON; DUGGAN
• Citation: Local Union No. 5741, United Mine Workers of America v. N.L.R.B., 865 F.2d 733 (6th Cir. 1989)
• Decision Date: 29 March 1989
• Docket Number: 6167,Nos. 87-5962,s. 87-5962
• Parties: 130 L.R.R.M. (BNA) 2273, 57 USLW 2451, 110 Lab.Cas. P 10,920 LOCAL UNION NO. 5741, UNITED MINE WORKERS OF AMERICA, Petitioner, Cross- Respondent, v. NATIONAL LABOR RELATIONS BOARD, Respondent, Cross-Petitioner.

Page 733

865 F.2d 733

130 L.R.R.M. (BNA) 2273, 57 USLW 2451,

110 Lab.Cas. P 10,920

LOCAL UNION NO. 5741, UNITED MINE WORKERS OF AMERICA Petitioner, Cross- Respondent, v. NATIONAL LABOR RELATIONS BOARD, Respondent, Cross-Petitioner.

Nos. 87-5962, 6167.

United States Court of Appeals Sixth Circuit.

Argued Aug. 11, 1988.

Decided Jan. 10, 1989.

Rehearing and Rehearing En Banc Denied March 29, 1989.

James R. Hampton (argued), Hazard, Ky., for petitioner, cross-respondent.

Aileen Armstrong, Deputy Associate Gen. Counsel, N.L.R.B., Aileen A. Armstrong, Peter Winkler, Karen Cordry (argued), Washington, D.C., for respondent, cross-petitioner.

Before KEITH and NELSON, Circuit Judges, and DUGGAN, District Judge. ^*

DAVID A. NELSON, Circuit Judge.

The question for decision in this case is whether the National Labor Relations Board erred in holding that the petitioning United Mine Workers local union is the "successor," for labor law purposes, of another UMW local, now defunct, that had an unsatisfied monetary obligation as a result of having committed an unfair labor practice. Petitioner seeks review of a Board order making it responsible for the other local's debt, and the Board cross-petitions for enforcement. For the reasons stated below, we shall grant the Board's cross-petition for enforcement.

I

The defunct union, Local Union No. 9639 of the United Mine Workers of America, committed an unfair labor practice by causing the discharge of a non-union miner. The NLRB ordered the local to pay the miner his lost earnings. It was stipulated that the amount of Local 9639's liability came to $12,327.65, plus interest.

On August 19, 1982, this court granted enforcement of the NLRB order. About two weeks later Local 9639 filed a petition under Chapter 7 of the Bankruptcy Code, 11 U.S.C. Secs. 701 et seq., expecting to obtain a discharge of its debt to the miner. The Board filed a proof of claim on the miner's behalf, and he was awarded all of Local 9639's monetary assets, about $2100. Local 9639 asked the bankruptcy court for authority to continue to operate, but on September 27, 1982, after learning that the unpaid balance of its debt was not dischargeable, the local withdrew the motion and simply ceased to function. The local ultimately surrendered its charter to the UMW.

Between October 21 and November 9, 1982, every one of the approximately 55 working members of Local 9639 transferred his membership to Local 5741. The latter local had theretofore had approximately 132 active and 356 inactive members. By November 23 approximately 190 of 243 idle or retired members of Local 9639 had also transferred to Local 5741. These transfers resulted from "bathhouse talk" in which individual members of Local 9639 discussed the proximity of Local 5741 to themselves and the mines in which they worked. Nineteen retired members of Local 9639 eventually transferred to other UMW locals.

At the time of the transfers into Local 5741, that local's president knew that the defunct local had been found guilty of an unfair labor practice and had been ordered to pay the discharged miner his lost wages. Local 5741 also knew, through its president, that Local 9639 had ceased to function as a result of the Board-imposed liability. No money or property of Local 9639 was transferred to Local 5741.

Under the constitution of the UMW, no transfer fees were payable by the members of Local 9639. Neither did the transferees have to execute new dues deduction authorization cards on behalf of Local 5741. The employer continued to remit dues to District 30 of the UMW for the Local 9639 members, just as it had done in the past. These remittances were designated for Local 9639 until at least December of 1982, when the secretary-treasurer of District 30 requested that the name of Local 5741 be used. Dues remitted for the defunct local were never returned by District 30. Instead, District 30 kept one-third for itself, remitted one-third to the UMW, and remitted the remainder to Local 5741.

Once the members of Local 9639 had transferred to Local 5741, that local began to act as their collective bargaining representative. Although no officers of Local 9639 became officers of Local 5741, the president of Local 5741 immediately reappointed eight transferees to their old positions on mine and safety committees. It is undisputed that Local 5741 took over representation of Local 9639's former members without any hiatus and that Local 5741 administered on their behalf the same collective bargaining agreement previously administered by Local 9639. Grievances of Local 9639 members arising prior to the transfer were processed by Local 5741.

On December 4, 1985, a regional director of the NLRB ordered that a supplemental hearing be held to determine whether Local 5741 was jointly and severally liable with Local 9639 for the balance of the back pay due the discharged non-union miner. The hearing resulted in a finding that Local 5741 was the successor to Local 9639 for purposes of Local 9639's unsatisfied backpay obligation, and that finding was ultimately adopted by the Board. The Board's findings of fact are conclusive if supported by substantial evidence, 29 U.S.C. Sec. 160(e), and the foregoing facts, which we have adopted from the Board's decisions, are supported by substantial evidence.

II

Congress gave the NLRB authority to determine the remedies for labor organizations' unfair labor practices, to the end that a uniform national policy might be developed and enforced. Garner v. Teamsters, 373 Pa. 19, 94 A.2d 893, aff'd, 346 U.S. 485, 74 S.Ct. 161, 98 L.Ed. 228 (1953). It is the Board's task to devise remedies that effectuate the policies of the Act, Fibreboard Paper Prods. Corp. v. NLRB, 379 U.S. 203, 215-16, 85 S.Ct. 398, 405-06, 13 L.Ed.2d 233 (1964), and a reviewing court must give special respect to the remedies chosen by the Board. NLRB v. Gissel Packing Co., 395 U.S. 575, 612 n. 32, 89 S.Ct. 1918, 1939 n. 32, 23 L.Ed.2d 547 (1969). A remedial order will not be disturbed unless it represents a patent attempt to achieve ends contrary to the Act. Virginia Elec. & Power Co. v. NLRB, 319 U.S. 533, 540, 63 S.Ct. 1214, 1218, 87 L.Ed. 1568 (1943); J.P. Stevens & Co. v. NLRB, 623 F.2d 322, 327 (4th Cir.1980), cert. denied, 449 U.S. 1077, 101 S.Ct. 856, 66 L.Ed.2d 800 (1981).

Permitting a disappearing employer's unfair labor practices to go unremedied contributes to labor unrest, particularly where there is continuity in the employing industry; where there is substantial continuity between enterprises, a successor's failure to remedy its predecessor's unfair labor practices may appear to employees to be a continuation of the predecessor's labor policies. Golden State Bottling Co. v. NLRB, 414 U.S. 168, 184, 94 S.Ct. 414, 425, 38 L.Ed.2d 388 (1973). Similar considerations would seem to apply, mutatis mutandis, where a disappearing local union has committed an unfair labor practice, and there is substantial continuity between that local and one that continues to operate.

The Board's remedial powers under Sec. 10(c) of the Act include the power to order a bona fide successor employer who has not committed an unfair labor practice to reinstate and provide back pay to an employee wrongfully discharged by the predecessor employer. Golden State Bottling Co., 414 U.S. at 175-77, 94 S.Ct. at 420-22. The decision whether to impose such liability involves striking a balance between the conflicting interests of the innocent successor, the public, and the victimized employee, id. at 181, 94 S.Ct. at 423, and the Board is uniquely qualified to make that kind of judgment. The Board is no less qualified to make the similar judgment called for by the facts of this case.

III

The test of successorship, in the employer situation, is whether there is "substantial continuity" between the enterprises. Fall River Dyeing & Finishing Corp. v. NLRB, 482 U.S. 27, 44, 107 S.Ct. 2225, 2236, 96 L.Ed.2d 22 (1987). The successorship question is primarily factual in nature and involves consideration of a number of factors:

"Whether the business of both employers is essentially the same; whether the employees of the new company are doing the same jobs in the same working conditions under the same supervisor; and whether the new entity has the same production process, produces the same products, and basically has the same body of customers."

Id. Such indicia of continuity are all to be fed into the "substantial continuity" calculus, and the presence or absence of a single factor is not determinative. All the circumstances must be evaluated, with particular attention being paid to whether employees who have been retained will view their job situations as substantially unaltered. Id. 107 S.Ct. at 2236-37. The labor law doctrine of successorship is a broad one, and as long as there is continuity in the "employing industry," the public policies of the doctrine will be served by its broad application. Golden State Bottling Co., 414 U.S. at 182 n. 5, 94 S.Ct. at 424 n. 5.

The NLRB first applied its successor liability doctrine to labor organizations, as opposed to employers, in Local Union No. 46, Metallic Lathers (Cement League), 259 N.L.R.B. 70 (1981), enforcement denied in pertinent part, 727 F.2d 234, 237-38 (2d Cir.1984). In Cement League the NLRB concluded that the United Brotherhood of Carpenters, as the successor to the International Lathers, should be responsible for remedying unfair labor practices of the Lathers. 259 N.L.R.B. at 70. The Board noted that the victims of unfair labor practices in a union affiliation context are just as needful of a meaningful remedy as are unfair labor practice victims caught by the transfer of an employing business.

The Court of Appeals for the Second Circuit refused to enforce the imposition of liability upon the Carpenters Union in Cement League. It did so not because it disagreed with the Board's conclusion that the latter union was the Lathers'...