NLRB v. WL Rives Company

• Decision Date: 13 February 1964
• Docket Number: No. 19845.,19845.
• Citation: 328 F.2d 464
• Parties: NATIONAL LABOR RELATIONS BOARD, Petitioner, v. W. L. RIVES COMPANY and W-M Corporation, Respondent.
• Court: U.S. Court of Appeals — Fifth Circuit

328 F.2d 464 (1964)

NATIONAL LABOR RELATIONS BOARD, Petitioner, v. W. L. RIVES COMPANY and W-M Corporation, Respondent.

No. 19845.

United States Court of Appeals Fifth Circuit.

February 13, 1964.

Marcel Mallet-Prevost, Asst. Gen. Counsel, N.L.R.B., Dominick L. Manoli, Associate Gen. Counsel, N.L.R.B., Janet G. Kohn, Atty., N.L.R.B., Washington, D. C., for petitioner.

O. R. T. Bowden, Robert E. Sheridan, Jacksonville, Fla., for respondent.

Before RIVES, LEWIS,^* and BELL, Circuit Judges.

RIVES, Circuit Judge.

This case is before the Court upon petition of the National Labor Relations Board pursuant to section 10(e) of the National Labor Relations Act, 29 U.S. C.A. § 160(e), for enforcement of its order¹ finding W. L. Rives Company and W-M Corporation to have committed unfair labor practices in violation of sections 8(a) (2), (3), (5) and (1) of the Act, as amended, 29 U.S.C.A. §§ 158(a) (2), (3), (5) and (1).

The controversy stems from a jurisdictional dispute which relates back to 1957 and which was the subject of this Court's opinion in N. L. R. B. v. W. L. Rives Co., 5 Cir. 1961, 288 F.2d 511. A full statement of the events occurring in 1957 and 1958 may be found in that opinion. The operations of the W. L. Rives Company (hereinafter "Rives Company") in 1957 were succinctly described as follows:

"Rives manufactures and fabricates to order corrosion resistant pipe and fittings, principally of stainless steel for installation in industrial machinery. When the product is finally a part of the industrial machine, it will have gone through three principal phases: (1) the manufacture or fabricating of the parts (includes pipe, tubing, elbows, T\'s and S\'s); (2) fitting or assembly of these parts together in a shop; and (3) installation of this `fitted\' equipment into the machine at the final job-site. Rives did not perform step (3). It regularly did steps (1) and (2)." 288 F.2d at 512.

As to the performance of step (3), the dominant union was the United Association of Pipe Fitters² (hereinafter, "UA"):

"This Union included the separate crafts which customarily performed step (2) operations and others which did step (3). It was not, however, concerned with step (1) the initial manufacture or fabrication. But throughout a major segment of the construction industry, it had imposed an absolute requirement that its members would not perform the step (3) final installation unless the step (2) shop assembly work had also been performed by its members. This requirement could only be surmounted if the union would `accept\' or give its approval to material not bearing the UA label." 288 F.2d at 513.

As a result, instructions received by the Rives Company for submitting bids frequently stipulated that the pre-fitted material supplied must conform to UA requirements. Prior to November 1957, Rives Company was able to secure clearance as needed from the local UA representative. However, a Board election in November 1957 resulted in certification of Sheet Metal Workers³ (hereafter, "SMW") as exclusive bargaining representative of all production employees of Rives Company. There was no hostility by Rives Company to SMW, UA, or to trade unionism generally.

In the Spring of 1958, after obtaining an assurance of UA clearance from the local union representative, Rives Company bid successfully on a substantial subcontract and thereafter purchased $90,000 worth of materials for the job and became obligated for a $7,000 nonperformance penalty. Suddenly UA's national headquarters withdrew clearance. When the Company's efforts to acquire this clearance failed, it arranged to subcontract the step (2) fitting work to a UA employer, a possible solution which had already been discussed with SMW representatives during contract negotiations then in process. Rives Company announced this arrangement to a meeting of its employees and assured them that their jobs would not be affected. Nevertheless, concern for their jobs not allayed, the Rives Company employees struck when the independent contractor's UA men appeared in the Rives Company plant, a portion of which had been set aside for their use. An unfair labor practice complaint was filed, and the Board held that Rives Company had violated sections 8(a) (1), (3) and (5) of the Act.

By its prior opinion this Court denied enforcement of the Board's order. It was held that there was no section 8(a) (5) refusal to bargain because the likelihood of subcontracting as the only way out was discussed with the SMW on several occasions and, although there was no impasse, the action was taken "to meet a pressing crisis that affected the immediate and overpowering financial interests of these employees and Rives, the Employer." 288 F.2d at 515. It was held that there was no violation of sections 8(a) (3) or (1) because the actions of the Company in no way disparaged its employees and because, in all reasonable likelihood, the conduct neither encouraged nor discouraged union membership.

Unfortunately, Rives Company's problems were not over. Throughout 1959 and most of 1960, the Company was unable to bid successfully on contracts requiring UA approval because it could not obtain such clearance. Facing possible financial crisis, Walter L. Rives, President of W. L. Rives Company, conceived of a method whereby he could offer UA-approved products: Mr. and Mrs. Rives, who were majority stockholders in W. L. Rives Company, were also majority stockholders in W-M Corporation. W-M, having been in existence since 1955, owned the land on which the Rives Company plant was located. Mr. Rives proposed that W-M build a UA fit-up shop next door to the Rives Company plant. W-M would bid on those contracts requiring UA approval; it would then subcontract the step (1) manufacturing to Rives Company, but do the step (2) fitting itself.

In August 1960, Mr. Rives met with a representative of UA Local 234 and discussed his plans for the W-M plant. On August 16, W-M Corporation executed a license agreement with UA entitling it to use the UA label on pipe assembled at the new plant, provided that W-M would sign a collective bargaining contract with UA. Construction on the W-M plant began in September; and on September 16, while the building was still going up and before any employees had been hired, W-M through President Rives entered into a collective bargaining agreement with UA Local 234 recognizing that union as exclusive bargaining agent. Also in September, SMW began bargaining with Rives Company about proposed modifications in its bargaining contract, which was to expire on September 30. Throughout these bargaining sessions, SMW was not informed of the purpose of the new plant nor of the negotiations, license agreement, or contract between W-M and UA. Finally, around October 19, about the time production began in the new plant, SMW was informally notified of the contract with UA.⁴ A strike vote was taken on October 20, and on October 27 an unfair labor practice charge was filed by SMW, and almost the entire work force of the Rives Company plant went out on strike. Although the bargaining sessions continued, there was no discussion as to the problem of the new plant, and on November 10, 1960 agreement was reached on the modifications of the SMW contract. However, on that date most of the strikers were notified that they had been replaced and discharged. The strike was never officially terminated.

The Trial Examiner found that the respondents had not engaged in any unfair labor practices.⁵ Nevertheless, the Board found that the respondents violated sections 8(a) (5), (3), (2) and (1) of the Act. Treating W. L. Rives Company and W-M Corporation as a single employer,⁶ the Board held that the prehire agreement with UA Local 234 violated sections 8(a) (2) and (1) of the Act; that the failure to give notice and opportunity to bargain violated section 8(a) (5); that respondents' conduct was discriminatory, had the foreseeable effect of discouraging membership in SMW and encouraging membership in UA Local 234, and was in derogation of the representative status of SMW, thus violating section 8(a) (3) and (1); and that the strikers were unfair labor practice strikers so that their discharge violated section 8(a) (3).

We are of the opinion that for the purposes of effectuating the policies of the National Labor Relations Act it was not error for the Board to treat W. L. Rives Company and W-M Corporation as a single employer.⁷

Respondent⁸ admits that the exclusive recognition of UA as bargaining representative at the new plant without majority representation and prior to the hiring of employees violated sections 8(a) (2) and (1) of the Act unless the exemption contained in section 8(f) applies. See International Ladies' Garment Workers' Union v. N. L. R. B., 1961, 366 U.S. 731, 738, 81 S.Ct. 1603, 6 L.Ed.2d 762; Dixie Bedding Manufacturing Co. v. N. L. R. B., 5 Cir. 1959, 268 F.2d 901, 905. Section 8(f), 29 U.S.C.A. § 158(f), was added by section 705(a) of the Labor-Management Reporting and Disclosure Act of 1959, and provides that an employer "engaged primarily in the building and construction industry" may make an agreement with a union covering employees who will be engaged in that industry, even though the majority status of the union has not been established in accordance with section 9. As of this time, so far as we are advised, no court has determined the scope of the "building and construction industry" referred to in section 8(f). We are of the opinion that Congress did not intend to include in the exemption those employers who manufacture and assemble products which are subsequently installed by others at the construction site.⁹ Although the Trial Examiner found that the prehire agreement violated the Act, he stated it would neither accomplish anything nor effectuate the policy of the Act to set aside the contract and withhold UA recognition until the union is certified. We hold that it was correct for the...