Overnite Transportation Company v. NLRB

• Decision Date: 06 February 1967
• Docket Number: No. 10570,10617.,10570
• Parties: OVERNITE TRANSPORTATION COMPANY, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent. Chauffeurs, Teamsters and Helpers, Union No. 171, Intervenor. TEAMSTERS LOCAL UNION NO. 171, affiliated with the International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.
• Court: U.S. Court of Appeals — Fourth Circuit

372 F.2d 765 (1967)

OVERNITE TRANSPORTATION COMPANY, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.

Chauffeurs, Teamsters and Helpers, Union No. 171, Intervenor.

TEAMSTERS LOCAL UNION NO. 171, affiliated with the International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.

Nos. 10570, 10617.

United States Court of Appeals Fourth Circuit.

Argued November 4, 1966.

Decided February 6, 1967.

J. W. Alexander, Jr., Charlotte, N. C. (Ernest W. Machen, Jr., and Blakeney, Alexander & Machen, Charlotte, N. C., on brief), for petitioner Overnite Transp. Co.

Hugh J. Beins, Washington, D. C., (Michael F. Grdina, Willoughby, Ohio, on brief), for petitioner Teamsters Local Union No. 171.

Gary Green, Atty., N. L. R. B. (Arnold Ordman, Gen. Counsel, Dominick L. Manoli, Associate Gen. Counsel, Marcel Mallet-Prevost, Asst. Gen. Counsel, and Frank H. Itkin, Atty., N. L. R. B., on brief), for respondent.

Before BRYAN, BELL and CRAVEN, Circuit Judges.

CRAVEN, Circuit Judge.

On November 19, 1964, Overnite Transportation Company bought, with approval of the Interstate Commerce Commission,¹ certain operating franchises and physical assets of Rutherford Freight Lines, Inc. Both before and after take-over, the Union² was the exclusive bargaining agent for thirty employees in units at Roanoke and Pulaski, Virginia. Without affording the Union an opportunity to discuss and bargain with respect to changes in rates of pay and other conditions of employment, Overnite immediately (the day of take-over) put into effect its own scale of wages and other benefits then prevailing throughout the Overnite system. The result was to reduce the wages of the former Rutherford employees at Pulaski and Roanoke from $3.05 per hour to $2.60 per hour and to eliminate other more favorable terms and conditions of employment.

There is presented for our decision this question: May the Board lawfully direct Overnite to restore to employees who formerly worked for the selling company the economic benefits that had been maintained by the seller and incorporated in its contract with the Union, notwithstanding that the contract had expired before the sale, and that the purchaser, Overnite, had made known in advance and consistently its unwillingness to maintain such level of employee benefits? We think so on the facts of this case.

The case is before the court upon Overnite's petition to review and set aside the order of the Board, and upon the Board's cross-petition to enforce the order. The Union has intervened in case No. 10,570 and has itself filed a petition in No. 10,617 to review and modify certain portions of the Board's order.

I.

The Union's petition and intervention presents the only fact question sought to be reviewed.³ The Union insists that the labor contract was in effect between Rutherford and the Union on the date of take-over, November 19, 1964. The Trial Examiner and Board found otherwise, holding that the contract expired on August 31, 1964. The Union concedes in its brief that Rutherford "did terminate the contract by letter dated August 27, 1964," but insists that Rutherford agreed to continue the contract in effect as long as it (Rutherford) remained in operation. Our examination of the record discloses that there was imprecise testimony by the president and business representative of Local 171 of the Union to that effect. But his testimony was persuasively contradicted by a letter dated October 28, 1964, to the president of the Local and signed by the president of Rutherford containing the following: "What you say about extension of the old contract is not exactly accurate. What I actually said was that if we continue to operate as Rutherford Freight Lines, Inc., we will not make changes in the rates of pay or insurance coverage before meeting with you again." Credibility and the weighing of evidence is for the Trial Examiner and the Board. Considering the record as a whole, the finding of the Board that the labor contract had expired prior to take-over by Overnite is supported by substantial evidence and will not be disturbed. Universal Camera Corp. v. NLRB, 340 U.S. 474, 71 S.Ct. 456, 95 L.Ed. 456 (1951).

II.

Overnite earnestly urges upon us its own sophisticated version of familiar and traditional common law principles. Compare United Steelworkers of America v. Reliance Universal, Inc., 335 F.2d 891 (3rd Cir. 1964). We agree (indeed, it is not contended otherwise) that Overnite did not voluntarily assume its predecessor's labor obligations when it acquired the business. The obligation of Overnite does not rest upon contract principles.

On March 30, 1964, about six months before Overnite bought out Rutherford, the Supreme Court decided John Wiley & Sons, Inc. v. Livingston, 376 U.S. 543, 84 S.Ct. 909, 11 L.Ed.2d 898 (1964). In that case the Court concluded that "in appropriate circumstances" certain obligations may be imposed upon a new owner of a business by reason of the collective bargaining contract of the preceding owner.

Our case does not come squarely within Wiley because the Rutherford collective bargaining contract had expired prior to take-over.⁴ But what was said in Wiley is not irrelevant: "The objectives of national labor policy, reflected in established principles of federal law, require that the rightful prerogative of owners independently to rearrange their businesses and even eliminate themselves as employers be balanced by some protection to the employees from a sudden change in the employment relationship." Wiley, supra, 376 U.S. at 549, 84 S.Ct. at 914.

In Wiley, the "new" employer was held bound by one of the terms of a collective bargaining contract to which he had never agreed. Wiley reaches beyond the Board's order in this case and, in so doing, strongly supports the more limited successor doctrine developed by the courts of appeal but not as yet expressly declared by the Supreme Court.

It can now be considered settled that if the transfer of assets and employees from one employer to another leaves intact the identity of the employing enterprise, then the former's duty to recognize and bargain with an incumbent union devolves upon the latter as "successor employer." See NLRB v. Downtown Bakery Corp., 330 F.2d 921 (6th Cir. 1964); NLRB v. McFarland, 306 F. 2d 219 (10th Cir. 1962); NLRB v. Auto Ventshade, Inc., 276 F.2d 303 (5th Cir. 1960); NLRB v. Parran, 237 F.2d 373 (4th Cir. 1956); NLRB v. Lunder Shoe Corp., 211 F.2d 284 (1st Cir. 1954); NLRB v. Armato, 199 F.2d 800 (7th Cir. 1952); NLRB v. Blair Quarries, Inc., 152 F.2d 25 (4th Cir. 1945); compare NLRB v. John Stepp's Friendly Ford, Inc., 338 F.2d 833, 835-836 (9th Cir. 1964).

The record shows that Overnite continued Rutherford's business and, with respect to the pertinent Pulaski and Roanoke terminals, made no significant changes in their operation. Overnite offered employment to all of the terminal employees, and they all accepted. The Pulaski and Roanoke drivers, who punched in on a Rutherford time card the morning of November 19, punched out on an Overnite time card that afternoon. The terminal managers and supervisory personnel remained as before. Rutherford's President McInturff, who had bargained with the Union before take-over, bargained thereafter with the Union as "Assistant to the President" of Overnite. In sum, everything was essentially the same at Pulaski and Roanoke after November 19 as it was before the sale, except for the change in ownership.

Clearly, the Board concluded correctly that Overnite was "successor" to Rutherford. As such, Overnite had a duty to bargain on the day of take-over, November 19, 1964, which it did not recognize until eleven days later on November 30. We do not mean to imply that Overnite had on November 19 an affirmative duty to at once seek out the Union to begin bargaining. But, neither was it free to act unilaterally without affording the Union reasonable opportunity to bargain.

We cannot say that Overnite's belated recognition of the Union purged it of refusal to do so eleven days sooner. Overnite's instant unilateral action in violation of its duty to bargain has made it impossible to determine what would have occurred had it moved more slowly.

III.

Section 8(a) (5) of the Labor Act, read together with Section 8(d),⁵ requires an employer to bargain collectively with the representative of his employees "with respect to wages, hours, and other terms and conditions of employment." It is not disputed that Overnite made the wage and economic benefit changes without affording opportunity to the Union to bargain. Such unilateral action by an employer altering existing wage and economic benefits usually violates the statutory command. Considering the record as a whole, there do not appear to be circumstances "excusing or justifying unilateral action." See NLRB v. Katz, 369 U.S. 736, 748, 82 S.Ct. 1107, 8 L.Ed.2d 230 (1962). We think the Board's finding of a Section 8(a) (5) violation is clearly correct.

An 8(a) (5) violation does not necessarily encompass an 8(a) (1) violation. See NLRB v. Katz, 369 U.S. at 742 n. 9, 82 S.Ct. at 1111, 8 L.Ed.2d at 235. But here the manner of action — aside from it being unilateral — supports an inference of an 8(a) (1) violation. When the individual employees were told their new rates of pay and other conditions of employment, the company spokesman said: "As you all know we are not union and we are not planning on being union." We do not hold such a statement per se impermissible, but it colored the conduct, especially in view of this company's history of several previous violations of the Act.⁶

We think the Board's finding of an 8(a) (1) violation is more than simply derivative from the refusal to bargain and is correct.

IV.

There is no need to discuss at length Overnite's reliance upon the Interstate Commerce Commission proceedings to justify its conduct. That by...