Packing House and Indus. Services, Inc. v. N.L.R.B.
| Decision Date | 21 December 1978 |
| Docket Number | A,Nos. 77-1691,77-1726,P-38,AFL-CI,I,s. 77-1691 |
| Citation | 590 F.2d 688 |
| Parties | 100 L.R.R.M. (BNA) 2356, 85 Lab.Cas. P 11,003 PACKING HOUSE AND INDUSTRIAL SERVICES, INC., Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent, and Localmalgamated Meat Cutters and Butcher Workmen of North America,ntervenor-Respondent. MASON CITY DRESSED BEEF, INC., Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent, and Localmalgamated Meat Cutters and Butcher Workmen of North America,ntervenor-Respondent. |
| Court | U.S. Court of Appeals — Eighth Circuit |
William H. Bruckner, Tate, Bruckner & Sykes, Houston, Tex., and Kenneth R. Carr, Grambling, Mounce, Sims, Galatzan & Harris, El Paso, Tex., for petitioner.
David F. Zorensky, Atty., N. L. R. B., Washington, D. C., for respondent; John S. Irving, Gen. Counsel, John E. Higgins, Jr., Deputy Gen. Counsel, Carl L. Taylor, Associate Gen. Counsel, Elliott Moore, Deputy Associate Gen. Counsel, and Howard E. Perlstein, Atty., N. L. R. B., Washington, D. C., on the brief.
Peggy A. Hillman, Cotton, Watt, Jones, King & Bowlus, Chicago, Ill., for intervenor-respondent, Local P-38, etc.
Before GIBSON, Chief Judge, and LAY, HEANEY, BRIGHT, ROSS, STEPHENSON, HENLEY and McMILLIAN, Circuit Judges.
Mason City Dressed Beef, Inc. (MCDB) and Packing House and Industrial Services, Inc. (PHIS) seek to review and set aside an order of the National Labor Relations Board (the Board). The Board has cross-petitioned for enforcement. 1
The controversy concerns alleged efforts by petitioners, immediately following their takeover of the ownership and management of a Mason City, Iowa, beef slaughtering plant, to employ a new labor force and thereby supplant Local P-38 as the bargaining representative of a unit of approximately eighty-three production and maintenance employees. MCDB, by purchase contract dated January 31, 1976, acquired the plant's assets from Iowa Beef Processors, Inc. (IBP). PHIS, by contract dated February 5, 1976, agreed to operate the plant for MCDB and in connection therewith to hire most of the plant's labor force.
IBP, a large meat packing operation with headquarters in Dakota City, Nebraska, had owned and operated the Mason City plant from 1969 until the time of the sale to MCDB. Labor relations at the plant were governed by successive collective bargaining agreements with Local P-38, the last of which had been executed in August 1974 and was due to expire in January 1977. The impetus for the sale was a civil antitrust consent decree approved by the United States District Court for the Northern District of Iowa on March 23, 1970, under which IBP had undertaken to divest itself of ownership and control of the plant.
Petitioners' efforts to hire a new labor force at the plant were the subject of an unfair labor practices hearing conducted before an administrative law judge. The ALJ concluded that petitioners had committed unfair labor practices in violation of Sections 8(a)(1), (2), (3) and (5) of the National Labor Relations Act, as amended, 29 U.S.C. §§ 158(a)(1), (2), (3) and (5). Specifically, petitioners were found to have: (1) told certain former IBP employees that they would not be rehired because of their union membership and activities, in violation of Section 8(a)(1); (2) assisted the National Industrial Workers Union (NIWU) in obtaining union membership cards and recognized and executed a collective bargaining agreement with NIWU, in violation of Sections 8(a)(2) and (1); (3) refused to rehire the eighty-three former IBP employees in order to discourage their membership in and support for Local P-38, in violation of Sections 8(a)(3) and (1); and (4) refused to recognize and bargain with Local P-38 as the duly designated bargaining representative of the plant's production and maintenance employees, in violation of Sections 8(a)(5) and (1). The ALJ recommended entry of an order requiring petitioners to cease and desist from the practices found to constitute unfair labor practices, to withdraw recognition from NIWU, to offer reinstatement with seniority and backpay to the eighty-three former IBP employees, to recognize and bargain with Local P-38, and to post a specified notice.
The Board modified and disavowed certain of the ALJ's subsidiary findings but agreed that petitioners had committed each of the unfair labor practices listed above. After modifying the contents of the notice required to be posted, the Board adopted the ALJ's recommended remedial order. Mason City Dressed Beef, Inc., 231 NLRB No. 102, 97 LRRM 1215 (1977).
Petitioners challenge each of the Board's unfair labor practice findings as not supported by substantial evidence and not consonant with law. At the center of the challenge is the Section 8(a)(3) finding that petitioners discriminatorily refused to rehire the eighty-three former IBP employees.
A number of additional contentions are also raised. MCDB argues that any unfair labor practices which may have been committed are the sole responsibility of PHIS, and more particularly, that the Board incorrectly held PHIS to be an agent of MCDB. MCDB also challenges the impartiality of the ALJ. PHIS objects to certain evidentiary rulings made by the ALJ.
For the reasons stated herein, we grant enforcement of the Board's order against MCDB and PHIS regarding all but two of the charges. By an evenly divided (4-4) vote this court denies enforcement of the Board's order against MCDB and PHIS regarding the alleged independent violations of Sections 8(a)(1) and 8(a)(5). 2
As the Supreme Court has recognized, resolution of a "successor" employer's labor law obligations to the employees of its predecessor turns to a great extent on the precise facts involved. Howard Johnson Co. v. Detroit Local Joint Exec. Bd., 417 U.S. 249, 256, 94 S.Ct. 2236, 41 L.Ed.2d 46 (1974); NLRB v. Burns International Security Serv., Inc., 406 U.S. 272, 274, 92 S.Ct. 1571, 32 L.Ed.2d 61 (1972). We begin, then, with a summary of the facts as found by the Board.
The story begins in the context of IBP's previously unsuccessful efforts to dispose of the Mason City plant in accordance with the 1970 antitrust decree. Late in 1975, while IBP continued to operate the plant, one Sam W. Davis expressed an interest in acquiring it. Davis organized MCDB, and extensive negotiations resulted in the execution of two contracts between IBP and MCDB on January 31, 1976.
The first contract (the purchase agreement) transferred from IBP to MCDB, effective on closing, the possession of and right to use all of the plant's operating assets and reserved for IBP the legal title to such assets as security for ultimate payment of the $1,750,000 purchase price. No down payment was required, and payment was to be made in monthly installments over a ten-year period.
The second contract (the slaughter agreement) required MCDB to sell and IBP to buy the plant's entire output. Production was limited to cows and fat cattle, and MCDB agreed to use its best efforts to provide IBP with 2,200 to 4,000 carcasses per week. IBP agreed to reimburse MCDB for its costs (defined by the contract) plus $1.50 per head.
At the same time Davis was negotiating the details of the contracts with IBP, he came into contact with Charles Sykes, a labor lawyer who at times had represented IBP and who then represented PHIS. 3 Beginning sometime in January, Davis and Sykes negotiated the terms of a contract whereby PHIS would manage the Mason City plant for MCDB. The contract was executed on February 5.
The MCDB-PHIS contract required PHIS to staff and operate the plant as a beef slaughtering facility. Either party could terminate the agreement on ten days' written notice. MCDB paid PHIS an initial service fee of $25,000 and agreed to compensate PHIS on a weekly basis in an amount equal to PHIS' costs of operation plus $800. "Costs" were defined to include wages and other employee benefits. All employees were to be employed and controlled exclusively by PHIS, with the exception of a few individuals whom MCDB and IBP wished to station on the premises. MCDB retained the responsibility for securing the cattle to be slaughtered.
During January and February both Davis and Sykes discussed labor relations at the plant with Arden Walker, IBP's vice president for industrial relations and its principal spokesman on labor matters. Walker told Sykes that the supervisory staff at the plant was reliable and that some of the production and maintenance employees were valuable while others were not. 4 He noted that the plant had experienced problems with labor relations and absenteeism and that these problems had contributed in part to the unprofitability of the operation under IBP management.
Nothing definite about the sale was communicated to the plant's employees or to Local P-38 until late in January. On or about January 27, Local P-38 obtained information leading it to believe that a transfer of the plant to MCDB was imminent. Various attempts by union officials to discuss the effects of the change in ownership with Davis were unsuccessful. Plant manager Trupe 5 notified all supervisory and clerical employees to report to work as usual on Monday, February 2, and they did so. Early in the week engineers employed by MCDB inspected the plant and reported to Davis that the plant could be remodeled with expenditures of perhaps $500,000. Davis told Sykes that such expenditures were out of the question, and the two of them agreed that the plant should be reopened as soon as possible. Also early in the week Ray Long, a union representative, and other local union officials went to the plant to speak with Trupe. In response to their inquiries, Trupe said he did not owe the former IBP employees anything, ordered those present to leave the premises, told them not to come back and instructed them to keep union members away.
Sykes and Trupe commenced efforts to hire a new labor...
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