Loomis Courier Service, Inc. v. N.L.R.B.

• Decision Date: 18 April 1979
• Docket Number: No. 78-1858,78-1858
• Citation: 101 L.R.R.M. 2450,595 F.2d 491
• Parties: 101 L.R.R.M. (BNA) 2450, 86 Lab.Cas. P 11,323 LOOMIS COURIER SERVICE, INC., Plaintiff-Appellant, v. NATIONAL LABOR RELATIONS BOARD, Defendant-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 491

595 F.2d 491

101 L.R.R.M. (BNA) 2450, 86 Lab.Cas. P 11,323

LOOMIS COURIER SERVICE, INC., Plaintiff-Appellant, v. NATIONAL LABOR RELATIONS BOARD, Defendant-Appellee.

No. 78-1858.

United States Court of Appeals, Ninth Circuit.

April 18, 1979.

Mark S. Ross, Lloyd W. Aubry, Atty., San Francisco, Cal., for plaintiff-appellant.

Standau Weinbrecht, Washington, D.C., for defendant-appellee.

Petition for Enforcement of an Order of the National Labor Relations Board.

Before WRIGHT and SNEED, Circuit Judges, and HAUK, ^* District Judge.

EUGENE A. WRIGHT, Circuit Judge.

The National Labor Relations Board (Board), reversing the decision of an administrative law judge (ALJ), found that Loomis Courier Service Inc. (Loomis) had discriminatorily discharged its employees and thereafter treated those employees as "new hires" in violation of §§ 8(a)(1) and 8(a)(3) of the National Labor Relations Act (Act), 29 U.S.C. §§ 158(a)(1) and (3). 235 NLRB No. 60 (1978). Loomis petitioned for review and the Board cross-petitioned for enforcement pursuant to §§ 10(e) and (f) of the Act, 29 U.S.C. §§ 160(e) and (f). We grant the petition for review and deny enforcement of the Board's order.

While the basic dispute in this case is factual, the parties raise several preliminary legal issues concerning the alleged unfair labor practice. Only the facts pertinent to resolving these issues are presented here.

Loomis is engaged in transporting checks, business documents, and records throughout California. It operates through branch offices grouped in northern and southern regions, the northern region consisting of branch offices in Salinas, San Jose, San Francisco, Sacramento, Manteca, and Fresno. Each branch has a collective bargaining agreement with a local of the International Brotherhood of Teamsters.

The Manteca branch had been having financial difficulties due to the low population density of the surrounding area and underbidding non-union competitors. ¹ Loomis repeatedly emphasized the branch's economic problems during the negotiating sessions held on October 8, November 5, 6, 12, 1975, and January 20, 1976. The possibility of closure was discussed during several of these meetings.

The employees rejected the company's proposals on December 13 and again on January 21. Robert Balk, Loomis' General Manager, closed the branch effective 3:15 p. m. on January 22. The company removed its furniture and records, terminated all employees, and sublet part of the building. It set up temporary offices in a motel 35 miles west of Manteca and outside the geographical jurisdiction of Local 439. From that location Loomis continued to supply Picketing at the Manteca branch began almost immediately and spread to the Fresno and Sacramento branches by January 26. Loomis resumed discussions with the union on January 27 and February 5. ² The employees rejected revised company offers on January 28 and February 13. On February 19 the parties reached a final agreement. The drivers returned to work March 3 and were treated as new hires without accumulated seniority, sick leave, or vacation benefits.

courier service to its interstate customers in the Manteca branch area.

When the former employees learned that Loomis was treating them as new hires, they filed grievances with the board of adjustments, a grievance resolving committee provided in the new contract. The committee was unable to resolve the dispute. The union filed an unfair labor practice charge on April 6. Amended charges were filed May 24 and June 23 and a complaint entered June 30, 1976.

After a hearing on November 3 to 5, the ALJ dismissed the General Counsel's complaint, finding that: 1) Loomis did not unlawfully threaten to close its Manteca branch office; 2) it closed the office solely for economic reasons without discriminatory antiunion motivation; 3) it intended that the closure be final and permanent; and 4) the dispute regarding seniority benefits should be resolved by the parties under the arbitration provision of their current contract.

The Board affirmed the ALJ's first finding but reversed the others. Characterizing Loomis' conduct as a lockout, the Board held that the permanent discharge of the work force was inherently destructive of employee rights and therefore constituted a per se violation of the Act.

The role of this court in reviewing the Board's order is to determine whether its decision is a proper application of the law ³ and is supported by substantial evidence on the record as a whole. ⁴

I. APPLICATION OF THE LAW

In NLRB v. Great Dane Trailers, Inc., 388 U.S. 26, 87 S.Ct. 1792, 18 L.Ed.2d 1027, the Supreme Court established two standards for evaluating employer conduct under § 8(a)(3): ⁵

First, if it can reasonably be concluded that the employer's discriminatory conduct was "inherently destructive" of important employee rights, no proof of an antiunion motivation is needed and the Board can find an unfair labor practice even if the employer introduces evidence that the conduct was motivated by business considerations. Second, if the adverse effect of the discriminatory conduct on employee rights is "comparatively slight," an antiunion motivation must be proved to sustain the charge If the employer has come forward with evidence of Id. at 34, 87 S.Ct. at 1798.

legitimate and substantial business justifications for the conduct.

Finding a § 8(a)(3) violation normally requires an affirmative showing that the employer's discriminatory conduct was motivated by an antiunion purpose. Great Dane, 388 U.S. at 33, 87 S.Ct. 1792; Portland Willamette Co., Inc. v. NLRB, 534 F.2d 1331, 1334 (9th Cir. 1976). But when the employer's conduct is characterized as "inherently destructive," "unlawful motivation is presumed to exist." Western Exterminator Co. v. NLRB, 565 F.2d 1114, 1118 n. 3 (9th Cir. 1977). See also NLRB v. Tahoe Nugget, Inc.,584 F.2d 293, 300 n. 24 (9th Cir. 1978); NLRB v. Triumph Curing Center,571 F.2d 462, 474 (9th Cir. 1978); Kaiser Engineers v. NLRB, 538 F.2d 1379, 1386 (9th Cir. 1976); Portland Willamette, 534 F.2d at 1334; Signal Oil & Gas Co. v. NLRB, 390 F.2d 338, 343-44 (9th Cir. 1968).

The phrase "inherently destructive" is not easily defined and cases finding violations under this standard are relatively rare. See, e. g., NLRB v. Ayer Lar Sanitarium, 436 F.2d 45, 50 (9th Cir. 1970). It is generally acknowledged, however, that "actions creating visible and continuing obstacles to the future exercise of employee rights" are inherently destructive. Portland Willamette, 534 F.2d at 1334. Cf. American Ship Building Co. v. NLRB, 380 U.S. 300, 309, 85 S.Ct. 955, 13 L.Ed.2d 855 (1965); Textile Workers Union of America v. Darlington Manufacturing Co., 380 U.S. 263, 269 n. 10, 85 S.Ct. 994, 13 L.Ed.2d 827 (1965); NLRB v. Erie Resistor Corp., 373 U.S. 221, 83 S.Ct. 1139, 10 L.Ed.2d 308 (1963); Radio Officers' Union v. NLRB, 347 U.S. 17, 45-46, 74 S.Ct. 323, 98 L.Ed. 455 (1954).

The Board found that Loomis

terminated its Manteca employees in order to exert extreme pressure on them in support of its bargaining position and continued to serve its customers after advertising for and securing a number of new employees as replacements. By taking the drastic action of discharging its employees for a coercive purpose, (Loomis) unlawfully exceeded the limits of permissible conduct which allow employers to continue to operate with replacements without disturbing the employees (sic) status of their regular work force. (Loomis') resort to the severe sanction of a lockout (in these circumstances) constituted conduct which was inherently destructive of their rights and designed to frustrate collective bargaining.

It appears from the above that the Board has based its conclusion of inherently destructive conduct on a factual finding that Loomis closed for an unlawful purpose. If so, its legal conclusion must rise or fall with the validity of its factual finding.

Thus, we are left with the crucial issue whether the Board's conclusion that Loomis conducted a lockout for a coercive purpose is supported by substantial evidence on the record as a whole. Accordingly, we turn to the Board's factual findings.

II. FINDINGS OF FACT

A. Standard of Review When the Board and the ALJ Disagree.

The standard of review does not change simply because the Board has disagreed with the ALJ. NLRB v. Warren L. Rose Castings, Inc., 587 F.2d 1005, 1008 (9th Cir. 1978). "We must still start with the finding made by the Board and accept it if it is supported by substantial evidence." NLRB v. Pacific Grinding Wheel, Inc., 572 F.2d 1343, 1347 (9th Cir. 1978).

The Board is free to draw its own inference from all the circumstances, if drawn from credited testimony, and need not accept self-serving declarations of intent, even if they are uncontradicted. Id.; Penasquitos Village Inc. v. NLRB, 565 F.2d 1074 (9th Cir. 1974).

When credibility is at issue, as it is here, the ALJ's conclusions " assume added importance because (he) 'has the responsibility of evaluating the credibility of witnesses and the weight to be given their The relative deference to be given each tribunal when the Board and ALJ disagree on the facts ⁷ is well defined in our decision in Penasquitos. There we articulated two important principles: 1) a reviewing court will not sustain a factual finding which rests solely on discredited evidence; and 2) even when there is independent, credited evidence of the Board's decision, a reviewing court will scrutinize the Board's findings of fact more critically if they contradict the ALJ's factual conclusions than if they accord with the ALJ's findings. Penasquitos, 565 F.2d at 1076-78. See Universal Camera Corp. v. NLRB, 340 U.S. at 488, 71 S.Ct. at 464 (the "substantiality of evidence (in support of the Board's decision) must take into account whatever in the record fairly detracts from its weight."); Polynesian Cultural Center, Inc. v. NLRB, 582 F.2d 467, 475 (9th Cir. 1978);...