N.L.R.B. v. Triumph Curing Center
| Decision Date | 02 March 1978 |
| Docket Number | No. 76-2884,76-2884 |
| Citation | 571 F.2d 462 |
| Parties | 98 L.R.R.M. (BNA) 2047, 83 Lab.Cas. P 10,456 NATIONAL LABOR RELATIONS BOARD, Petitioner, v. TRIUMPH CURING CENTER and M. F. Lee d/b/a Lee's Sewing Company, Inc., Respondents. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Mary K. Schuette (argued), Washington, D. C., for petitioner.
J. Mark Montobbio (argued), of Severson, Werson, Berke & Melchior, San Francisco, Cal., for respondents.
Application For Enforcement Of An Order Of The National Labor Relations Board.
Before BROWNING and HUFSTEDLER, Circuit Judges, and JAMESON, * District Judge.
This case is before the court upon the petition of the National Labor Relations Board (NLRB), pursuant to Section 10(e) of the National Labor Relations Act, 29 U.S.C. § 160(e), for enforcement of its order issued on January 29, 1976, against respondents Triumph Curing Center, Inc. (Triumph) and M. R. Lee, doing business as Lee's Sewing Company (Lee). The Board found that the respondents had engaged in unfair labor practices within the meaning of Sections 8(a)(1) and 8(a)(5) of the National Labor Relations Act and ordered the companies to recognize and bargain with the International Ladies Garment Workers Union (Union) as the authorized representative of the pressing employees working at Lee's plant at 1875 Mission Street, San Francisco. 1 The Board's decision and order is reported at 222 NLRB No. 103.
In its decision and order the Board adopted the findings, conclusions and recommended order of the administrative law judge who presided over a fourteen day hearing held during March and April, 1975. The judge had concluded, inter alia, that (1) Triumph and Lee were an integrated enterprise and joint employer; (2) respondents violated Section 8(a)(1) of the Act by soliciting employees to withdraw from the Union, by offering Triumph employees jobs at Lee if they resigned from the Union, and by assisting employees in procuring their withdrawal from the Union; and (3) respondents violated Sections 8(a)(5) and (1) of the Act by engaging in sham bargaining at the premises of Triumph, by deviously transferring Triumph's operations at Lee, and by denying the Union recognition at Lee after Triumph closed. The Board found also that Triumph employees who engaged in a strike were unfair labor practice strikers and that their misconduct did not require denial of a bargaining order.
We find substantial evidence in the record as a whole to support the Board's findings and conclude that its order must be enforced.
Floyd Andrews is a general contractor in the garment industry in San Francisco. He contracts with manufacturers, which design and market garments, to manufacture their products for them. In turn Andrews arranges with subcontractors to cut, sew, and press the garments.
Until Triumph closed its operations in May, 1974 it was a subcontractor engaged solely in the pressing of new clothing. It was owned by Andrews and his wife. Lee is a subcontractor engaged in cutting, sewing and pressing clothing. Before Triumph closed, Lee was engaged chiefly in sewing. Although Lee is ostensibly a sole proprietorship owned by Marian Lee, as set out below, its operations at 1875 Mission are controlled by Andrews.
Triumph recognized the Union without an election in 1965. They were parties to several collective bargaining agreements, the most recent of which ran from September 1, 1970 to September 1, 1973. In May, 1973, a Union representative, Mattie Jackson, gave Triumph notice that the Union did not want to renew the existing agreement and desired to renegotiate it. Negotiations were delayed while she was engaged in bargaining with another company.
The parties first met on November 13, 1973. Prior to that bargaining session Andrews met with his negotiator, Charles Hom, to review the existing agreement. Andrews was concerned that certain clauses could jeopardize Triumph's business. He feared that the Union would use those clauses to organize his non-union customers and instructed Hom to eliminate the clauses from the new agreement.
After the initial meeting, Jackson encountered difficulties in arranging the second. Andrews said that January would be the earliest time possible. Jackson then proposed December 13, but received no response. As a result, the Union filed an unfair labor practice charge. The charge was subsequently withdrawn after bargaining resumed.
Between January 15 and May 8, 1974, the parties held numerous bargaining sessions, but were unable to reach an agreement, despite the intervention of federal mediators. In particular, they could not agree on the contract clauses which Triumph sought to delete because of its fear that the Union might use "these clauses to organize the non-union customers of Triumph".
On March 29, the employees of Triumph went on strike to protest the company's conduct at the bargaining table. The strike persisted throughout April while the parties continued to negotiate. On April 29, Hom told Jackson that Triumph's future looked "bright". On May 2, he told Jackson that Triumph was considering closing. On May 8, Triumph closed down all operations. Lee opened a pressing operation at its plant at 1875 Mission, and the strikers moved the picket line there. The picket line continued for over a year, although on October 8, 1974, Jackson sent Andrews a letter notifying him that the strike had officially terminated and conveying the offer of all the striking employees to return to work.
1. Whether substantial evidence on the record as a whole supports the Board's finding that Triumph and Lee are a joint employer and single integrated enterprise.
2. Whether substantial evidence on the record as a whole supports the Board's findings that respondents violated Sections 8(a)(1) and 8(a)(5) of the National Labor Relations Act.
3. Whether the Board properly concluded that strike and picket line misconduct by certain Union organizers did not require denial of a bargaining order. 2
The propriety of the Board's findings of unfair labor practices turns upon the threshold question of whether Triumph and Lee were a joint employer and integrated enterprise. Cf. Darlington Manufacturing Co. v. NLRB, 397 F.2d 760, 763 (4 Cir. 1968), cert. denied 393 U.S. 1023, 89 S.Ct. 632, 21 L.Ed.2d 567 (1969). Respondents contend that inasmuch as Triumph and Lee were under separate ownership, operated at separate locations, and had separate payrolls, employees, and working conditions, they were separate business entities. They rely upon Milo Express Inc., 212 NLRB 313 (1974) to support their position.
In Milo Express, the Board found that two trucking companies owned by the same persons were not an integrated enterprise. Respondents argue that because they were not commonly owned this case is even stronger against a finding of an integrated business. In Milo Express, however, except for common ownership, the two trucking companies had no operational relationship. One company operated intrastate, the other interstate. They had separate equipment, management, payrolls and bookkeepers. With limited exceptions, the two companies operated independently, without any intra-company dealings.
In contrast, Triumph and Lee were highly interdependent operations, supervised by Andrews, as integral parts of his garment production operations. Nearly all of Lee's cutting and sewing work at 1875 Mission Street was obtained by Andrews and all of the garments sewn by Lee were pressed by Triumph. The sewn, but unpressed, garments were transported to Triumph in Lee's trucks and then, after pressing, delivered to the marketing company the same way. Andrews was financially responsible for the finished garments produced by his subcontractors and asserted considerable control over their day to day operations. He interviewed prospective employees for Lee, assisted in hiring and firing, and was authorized to sign payroll checks. Although Lee had a plant manager, Al Young, Andrews admitted that he had final supervisory authority and used that authority to direct the work at Lee.
Andrews owned all of the sewing machines at Lee's Mission Street plant. He leased the premises and paid the rent and was not reimbursed by Lee, except for those limited times when Lee was not working on garments for Andrews. No rent was paid for the sewing machines. Andrews summarized his financial control of Lee as follows:
So, in order to control this factory and make sure that I had it when I needed it, I made special arrangements with Lee so that I would have this company locked in. And so therefore, I pay the rent and I own the sewing machines at 1875 Mission Street, which is commonly done in San Francisco by many manufacturers in order to make sure they have the needles.
Although Andrews denies any ownership interest in Lee, a disinterested third party, a customer of Andrews, testified that he held himself out to her as the owner of Lee's operation on Mission Street. Andrews, Triumph and Lee also shared certain key employees. Lee's payroll bookkeeper prepared Triumph's payroll. Another employee did all other bookkeeping for Andrews' general contracting business, Triumph, and Lee, as well as for other businesses owned or controlled by Andrews. Hom, Andrews' labor negotiator was an accountant, who performed services for Triumph and Lee, as well as Andrews. He was paid by Andrews.
Further evidence of an integrated enterprise and joint employer is found in various occurrences incident to the labor negotiations and strike. Before Triumph went on strike, Andrews ordered pressing equipment for Lee's Mission Street plant. The equipment supplier, Charles Catallo, delivered and installed the equipment, but encountered difficulty in obtaining payment. After Catallo threatened to remove the equipment, Lee's manager, Young, referred him to Hom, who directed that payment be made. The checks...
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