NLRB v. Miller Trucking Service, Inc., 286-70.

• Decision Date: 17 September 1971
• Docket Number: No. 286-70.,286-70.
• Citation: 445 F.2d 927
• Court: U.S. Court of Appeals — Tenth Circuit
• Parties: NATIONAL LABOR RELATIONS BOARD, Petitioner, v. MILLER TRUCKING SERVICE, INC., and/or Miller Trucking Service, Inc., a Subsidiary of Tulsa Crude Oil Purchasing Company, Respondent.

445 F.2d 927 (1971)

NATIONAL LABOR RELATIONS BOARD, Petitioner, v. MILLER TRUCKING SERVICE, INC., and/or Miller Trucking Service, Inc., a Subsidiary of Tulsa Crude Oil Purchasing Company, Respondent.

No. 286-70.

United States Court of Appeals, Tenth Circuit.

July 23, 1971.

Rehearing Denied September 17, 1971.

Michael Levin, Chicago, Ill., (Arnold Ordman, Gen. Counsel, Dominick L. Manoli, Associate Gen. Counsel, Marcel Mallet-Prevost, Asst. Gen. Counsel, and Elliott Moore, Atty., National Labor Relations Board, on the brief), for petitioner.

William G. Haynes, Topeka, Kan., Eidson, Lewis, Porter & Haynes, Topeka, Kan., on the brief, for respondent.

Before BREITENSTEIN and HILL, Circuit Judges, and LANGLEY, District Judge.

BREITENSTEIN, Circuit Judge.

Efforts by the employees of a small Kansas trucking company to secure union representation have produced some large problems. The National Labor Relations Board has petitioned for the enforcement of its decision and order wherein it held that respondent Miller Trucking Service, Inc., had violated § 8(a) (1) and (5) of the National Labor Relations Act as amended. 29 U.S.C. § 158(a) (1) and (5). The decision and order of the Board are reported at 176 NLRB No. 76. The Company resists enforcement on a variety of grounds.

The Company, a Kansas corporation, was engaged in the intrastate transportation of petroleum products for a number of oil companies, including Derby Refinery Company. It had its principal place of business in Hays, Kansas, and employed nine drivers and one mechanic. Employee Mader secured from Glenn, a business agent for Local 696 of the Teamsters Union, a number of authorization cards which he distributed among other employees. Eight cards were signed and returned to Glenn who thereafter met with seven of the eight signers. On May 19, 1967, Glenn wrote Hilary Miller, the president of the Company, that the Union represented a majority of the employees for the purpose of collective bargaining and stated his readiness to meet with the Company. The subsequent discussions among Hilary Miller and some of the employees will be mentioned in detail later.

Hilary Miller owned or controlled all of the Company stock. Late in 1966, his doctor advised him to slow up and he approached a number of people regarding the sale of the Company. On May 24, 1967, after he had received the Union demand, he began negotiating with Tulsa Crude Oil Purchasing Company for the sale of the Company. The Union filed a petition for a certificate of representation with the Board's regional director in Kansas City, Missouri. The Company received notice on June 1 of a representation hearing to be held on June 15. On June 10, Hilary Miller and Tulsa executed an agreement for the sale of all Company stock to Tulsa. The Company notified the regional director of the sale agreement and moved that the representation hearing be dismissed. The regional director denied the motion but continued the hearing to June 29.

On June 17, Hilary Miller discharged all of the Company employees, explaining that he had sold his interest and giving them one week's severance pay. On the same day the employees were introduced to representatives of Tulsa, received job application forms, and were given written and driving examinations. Six were rehired and four, all of whom had signed Union authorization cards, were not rehired. On June 19, Hilary Miller and his wife transferred all of the Company stock to Tulsa. Under the Tulsa ownership, the Company operated in substantially the same fashion as it had previously, using the same equipment and servicing the same customers.

The Union filed unfair labor practice charges on June 22 against both the Company and Tulsa. The regional director then postponed indefinitely the representation hearing. Later the representation petition was withdrawn and an amended charge was filed against the Company and against the Company as a subsidiary of Tulsa.

After a hearing of the unfair labor practice charges, the trial examiner overruled the Company's objections to Board jurisdiction. On the theory that Hilary Miller was replaced as employer by Tulsa upon the transfer of the stock, he recommended that the complaint be dismissed in its entirety. On the General Counsel's exceptions to the examiner's decision the Board held that "mere change of stock ownership does not absolve a continuing corporation of responsibility under the Act." The Board held that the Company had violated § 8(a) (1) and (5) by interrogation of employees concerning their protected activities and by refusing to recognize or bargain collectively with the Union. It also held that the Company had violated § 8(a) (1) and (5) by unilaterally terminating its employees.

The first problem is jurisdiction. The Company operates only in Kansas. Part of its business is the transportation of crude oil from the tanks of producers to refineries. The general manager of Derby Refinery testified that Derby paid the producers the posted price less the transportation charge and remitted the transportation charges directly to the Company. In 1967, the Company received about $60,000 from Derby Refinery for hauling crude oil from Kansas production sites to Derby's Kansas refineries. Since then, it has continued to earn about $5,000 a month for such services. The Derby manager testified that during the year in question Derby bought at least $4,000,000 worth of crude oil from without Kansas. This testimony was objected to by the Company. The examiner held that the manager was competent to testify and gave the Company an opportunity, which it did not use, to impeach his testimony. In our opinion the testimony was properly received.

The Company argues that it does not come within the Board's self-imposed jurisdictional standards. See National Labor Relations Board v. Marbro Food Service, Inc., 10 Cir., 366 F.2d 477, 478, cert. denied 386 U.S. 912, 87 S.Ct. 862, 17 L.Ed.2d 785, and cases cited in n. 4. The theory is that the transportation service was furnished for the oil producers rather than for Derby and, hence, the record shows no more than local cartage with a de minimis effect on interstate commerce. We are not persuaded. Derby paid the Company about $60,000 annually for such services. Derby purchased about $4,000,000 worth of oil annually from without Kansas. The Company met the Board's indirect outflow standard by furnishing services valued at more than $50,000 annually to Derby which purchased over $50,000 in goods annually from outside of Kansas. Ibid. The Company functions as an essential link in the transportation of petroleum and performs its service for a buyer which is engaged in interstate commerce. The Board was well within its discretion in exercising jurisdiction over the Company.

The next problem relates to the sale by Hilary Miller of all of the stock in the Company to Tulsa. We have no question of going out of business, see Textile Workers Union of America v. Darlington Manufacturing Co., 380 U.S. 263, 85 S.Ct. 994, 13 L.Ed. 2d 827, or of successorship, see Perma Vinyl Corporation, 164 NLRB 968, enforced, United States Pipe and Foundry Co. v. National Labor Relations Board, 5 Cir., 398 F.2d 544. The employing entity at all times was Miller Trucking Service, Inc. The transfer of the corporate stock from Hilary Miller to Tulsa did not change the corporate entity. We agree with the Board that the corporate entity will sometimes be pierced when it is used to evade legal responsibility, but it will not be pierced to protect it against its own wrongdoing. Whatever unfair labor practices might have occurred they were not the result of the sale of the stock but of managerial actions.

The claimed unfair labor practices are (1) improper interrogation of employees, (2) threat of reprisal to one employee, (3) discharge of employees, and (4) failure to bargain. These must be considered both separately and together.

The interrogation of employees by Hilary Miller took place after his receipt...