NLRB v. Jackson Farmers, Inc.

• Decision Date: 27 March 1972
• Docket Number: No. 71-1376.,71-1376.
• Citation: 457 F.2d 516
• Court: U.S. Court of Appeals — Tenth Circuit
• Parties: NATIONAL LABOR RELATIONS BOARD, Petitioner, v. JACKSON FARMERS, INC. (Formerly Known as Farmers Union Cooperative Business Association), Respondent.

457 F.2d 516 (1972)

NATIONAL LABOR RELATIONS BOARD, Petitioner, v.JACKSON FARMERS, INC. (Formerly Known as Farmers Union Cooperative Business Association), Respondent.

No. 71-1376.

United States Court of Appeals, Tenth Circuit.

March 27, 1972.

Steven C. Kahn, Atty., N. L. R. B. (Peter G. Nash, Gen. Counsel, Dominick L. Manoli, Associate Gen. Counsel, Marcel Mallet-Prevost, Asst. Gen. Counsel, Elliott Moore, Atty., N. L. R. B., with him on brief), for petitioner.

William G. Haynes, of Eidson, Lewis, Porter & Haynes, Topeka, Kan., for respondent.

Before SETH and BARRETT, Circuit Judges, and MECHEM, District Judge.

SETH, Circuit Judge.

This case is before the court upon application of the National Labor Relations Board for enforcement of its order entered after a finding that the respondent failed to negotiate with the American Federation of Grainmillers, AFL-CIO, regarding the discontinuation of its small trucking operation, and the "contracting out" of the work.

Jackson Farmers, Inc., is a Kansas corporation which operates grain elevators, a feed mill, a petroleum bulk plant and service stations, a fertilizer plant, and a store with various outlets in Kansas.The discharged employee, Mr. Jacob Schuetz, had been in Farmers' employ as their only full-time truck driver for over ten years when it was decided to discontinue the company's over-the-road trucking operation, and substitute a contractor.There were some other part-time drivers as part of the operation was seasonal.When the decision was made, the company did not recognize the union, although certified by the Board, and action seeking enforcement of the Board's certification order over the objection of the company was pending in this court.It was so enforced sub nom.NLRB v. Jackson Farmers, Inc., 432 F.2d 1042(10th Cir.), cert. den.401 U.S. 955, 91 S.Ct. 974, 28 L. Ed.2d 238.

The Board asserts that Farmers violated subsections 8(a)(1) and (5) of the Act by unilaterally abolishing a unit position and subcontracting the unit work without bargaining with the union.Farmers argues that it was economically motivated in subcontracting the work and that it also offered Mr. Schuetz a substantially equivalent job which he refused.The Board ordered that Farmers restore its one-man trucking operation and reinstate Schuetz with retroactive pay, finding that it had violated sections 8(a)(1) and (5).The company at the time of the hearing had retained two of its original three trucks.It had sold an antiquated one.

Fibreboard Paper Products Corp. v. NLRB, 379 U.S. 203, 85 S.Ct. 398, 13 L. Ed.2d 233(1964), is the significant decision in the determination of this appeal.There the union initially filed unfair labor practices charges against the company, alleging violations of sections 8(a)(1), (3) and (5).The Board decided that the company's motive in contracting out its maintenance work was economic rather than anti-union, but nevertheless found a violation under section 8(a)(5) based upon a doctrine initially promulgated in Town & Country Mfg. Co. v. NLRB, 136 N.L.R.B. 1022, enforcement granted, 316 F.2d 846(5th Cir.).The Board's decision so reached was upheld by the Supreme Court in the Fibreboard decision.Also decided in 1963 was NLRB v. Adams Dairy, Inc., 322 F.2d 553(8th Cir.), which held that a dairy having no discriminatory motivation in replacing its driver-salesmen with independent contractors did not violate section 8(a)(5) by not first negotiating with the union.The Supreme Court granted certiorari, vacated the decision, and remanded for reconsideration "in light of Fibreboard . . . ."Instead of changing its position, however, the appellate court in Adams II held that its original decision was correct on the ground that much more was involved than the mere substitution of one set of employees for another.Thus the Circuit Court, in upholding the original result, determined that a basic operational change did occur in the dairy, namely, the liquidation of that aspect of the business affected by the decision, and this was sufficient to distinguish Fibreboard.

The cases following Fibreboard and Adams Dairy have determined the issue by deciding whether a basic change in the operation of the employer's business has come about with the contracting out, thus contrasting the two principal cases.SeeNLRB v. King Radio Corp., 416 F.2d 569(10th Cir.);NLRB v. Thompson Transport Co., 406 F.2d 698(10th Cir.);NLRB v. United Nuclear Corp., 381 F.2d 972(10th Cir.);NLRB v. Johnson, 368 F.2d 549(9th Cir.);NLRB v. Drapery Mfg. Co., 425 F.2d 1026(8th Cir.);NLRB v. Northwestern Publishing Co., 343 F.2d 521(7th Cir.).

This court in its decisions cited above has held, as did the court in Office & Professional Emp. Int. Union, Local 425, v. NLRB, 136 U.S.App.D.C. 12, 419 F.2d 314, that the duty to bargain is by no means universal in instances of "contracting out," and we repeat the caveat.See especially NLRB v. King Radio Corp., supra.

Here there was only one position involved, but it was clearly part of the representative unit.The contractor who replaced the discharged employee...