Russom v. Sears, Roebuck & Co.

• Decision Date: 25 June 1976
• Docket Number: No. 75-524C(4).,75-524C(4).
• Citation: 415 F. Supp. 792
• Parties: Alfred RUSSOM et al., Plaintiffs, v. SEARS, ROEBUCK AND COMPANY, a corporation, et al., Defendants.
• Court: U.S. District Court — Eastern District of Missouri

415 F. Supp. 792

Alfred RUSSOM et al., Plaintiffs, v. SEARS, ROEBUCK AND COMPANY, a corporation, et al., Defendants.

No. 75-524C(4).

United States District Court, E. D. Missouri, E. D.

June 25, 1976.

COPYRIGHT MATERIAL OMITTED

Stan Platke, Taylor, Eichner, Hollander & Platke, Toby Hollander, St. Louis, Mo., for plaintiffs.

Harry H. Craig and Norman W. Armbruster, Robert G. Burridge, Anderson, Gilbert, Wolfort, Allen & Bierman, St. Louis, Mo., Lederer, Fox & Grove, Chicago, Ill., Donald J. Spero, Skokie, Ill., for defendants.

MEMORANDUM

NANGLE, District Judge.

Plaintiffs brought suit, pursuant to § 301 of the Labor Management Relations Act, 29 U.S.C. § 185, alleging that defendant Sears, Roebuck & Company breached a collective bargaining agreement; that defendant Local 610 refused to accept grievances; and that all three defendants conspired to deprive plaintiffs of certain rights.

The case was tried before the Court without a jury. The Court having considered the pleadings, the testimony of the witnesses, the documents in evidence, the stipulations of the parties, and being otherwise fully advised in the premises, hereby makes the following findings of fact and conclusions of law as required by Rule 52, Federal Rules of Civil Procedure:

FINDINGS OF FACT

1. Plaintiffs are all presently service employees of defendant Sears, Roebuck & Company. Prior to October 1, 1974 plaintiffs were all employees of Dependable Appliance Service, Inc. DAS.

2. Defendant Sears, Roebuck & Company is a corporation engaged in a retail sales business which includes in part the sale and service of home appliances.

3. Defendant Local 688, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America is a labor organization within the meaning of the Labor Management Relations Act, 29 U.S.C. § 151 et seq. and is the exclusive bargaining agent of service employees of Sears, Roebuck & Company.

4. Defendant Local 610, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America is a labor organization within the meaning of the Labor Management Relations Act, 29 U.S.C. § 151 et seq. and was the exclusive bargaining agent of the employees of DAS.

5. In 1956 DAS was formed for the purpose of providing service work for existing companies. DAS was organized before any service work was secured. Throughout its existence, DAS did substantially all of its business with Sears, Roebuck & Company. Sears trained DAS's initial workforce and from time to time throughout DAS's existence, its employees received additional training from Sears. There was no charge to DAS for this training.

6. Originally there was an hourly billing rate in existence between DAS and Sears. This changed, however, to a cost-plus system in which all cost items were passed on to Sears.

7. DAS employees were not paid by a check from Sears. Credible evidence established that Sears did not participate in labor negotiations between DAS and Local 610, nor did Sears ever sign any contract entered into by Local 610 and DAS. The evidence fails to establish that any employee of Sears was an officer or director of DAS or that any employee of DAS was an officer or director of Sears. Sears did not own stock in DAS, nor did DAS own stock in Sears. DAS maintained its employee records, which were never shown to Sears. DAS was in charge of the wages, hours and fringe benefits of its employees. DAS provided its employees liability and workmen's compensation insurance. DAS had control over the hiring and firing of its employees.

8. DAS employees did receive a 10% discount at Sears and in addition, were included in certain employee contests. DAS employees, in response to service calls, went to the homes of persons who had Sears appliances in need of repair. DAS employees greeted customers with "Sears Calling" and, if the customers were not home, left a Sears "Not-Home" tag.

9. DAS employees wore a Sears "Authorized Service" patch on their uniforms. DAS trucks bore a Sears logo and slogan and were painted in Sears "fleet colors". The trucks also bore the name of DAS.

10. In late 1970, Sears desired to hire two service employees itself, to be assigned to in-house repairs. An agreement was reached permitting Sears to hire the two employees, who were represented by Local 688 and were covered by a supplemental addendum to the collective bargaining agreement between Local 688 and Sears. After the two men were hired and the collective bargaining agreement was supplemented, in early 1971, DAS employees objected to Local 688 representing any service or repair men. After the President of the Joint Council of Teamsters # 13 was contacted, it was determined that rightful jurisdiction belonged to Local 610. Accordingly, Sears agreed to terminate the employment of the two individuals. These two individuals were subsequently hired by DAS. The addendum, covering service employees, however, remained in effect.

11. On September 9, 1974 a meeting was held at which it was announced that DAS would be going out of business. The decision was reached solely by John O. Baumler, the president of DAS, because of Mr. Baumler's age and health. It was indicated that Sears would offer employment to the DAS employees. There is some evidence that the successor clause in the DAS-Local 610 collective bargaining agreement was discussed, with the union indicating that the addendum clause in the Sears-Local 688 agreement precluded application of the successor clause in the DAS-Local 610 agreement. There was also evidence that some DAS employees, specifically plaintiff Roach, tried to file a grievance. Local 610, however, indicated that it could accept no grievances.

12. At a subsequent meeting on September 23, 1974, representatives from Local 688 were present. Local 688 informed the DAS employees that they would have to join Local 688 if they wanted to be represented by a union while employed at Sears. A majority of the DAS employees signed Local 688 authorization cards.

13. On October 1, 1974, Sears offered employment to substantially all of the ex-DAS employees. These offers were accepted nearly unanimously.

14. Sears purchased some, but not all, of DAS's assets.

15. When DAS went out of business, the employees received severance checks. None of the plaintiffs have offered to return the same to Sears.

16. While DAS was in existence, and in accordance with the DAS-Local 610 collective bargaining agreement, DAS made payments on behalf of its employees to the Teamsters Pension Fund. The DAS employees' rights in said fund were not to vest until 1978. Accordingly, when DAS terminated its business, the DAS employees, and plaintiffs, lost their rights in said pension.

17. Local 688 and Sears had a number of bargaining sessions concerning the newly hired DAS employees from October 3, 1974 through February 13, 1975. The proposed contract was presented to the service employees (ex-DAS employees) at a meeting on February 13, 1975. The entire proposed contract was read to the employees. A majority voted by secret ballot to accept the contract, although there was testimony that some employees felt pressured into accepting the proposed contract. The contract, which was approved, did not provide for continued contributions by Sears to the Teamsters Pension Fund, (Sears has never contributed to such a pension fund), nor were the ex-DAS employees given seniority status from the date of their employment with DAS for benefit purposes.

CONCLUSIONS OF LAW

This Court has serious reservations concerning its alleged jurisdiction herein. Plaintiffs are proceeding on the basis of § 301 of the Labor Management Relations Act, 29 U.S.C. § 185. In view of these concerns, the Court will analyze its jurisdiction in relation to each of the theories on which plaintiffs have proceeded herein.

As to plaintiffs' allegations of conspiracy, the Court concludes the jurisdiction is clearly lacking. Abrams v. Carrier Corporation, 434 F.2d 1234 (2nd Cir. 1970), cert. denied, 401 U.S. 1009, 91 S.Ct. 1253, 28 L.Ed.2d 545 (1971); Woody v. Sterling Aluminum Products, Incorporated, 365 F.2d 448, 456 (8th Cir. 1966), cert. denied, 386 U.S. 957, 87 S.Ct. 1026, 18 L.Ed.2d 105 (1967).

The Court, however, concludes that jurisdiction may exist to determine whether or not Sears and DAS were co-employers, the theory upon which plaintiffs have proceeded. Cf., Baker v. Fleet Maintenance, Incorporated, 409 F.2d 551 (7th Cir. 1969). But see, Morris, The Developing Labor Law 767 (1971) ("The Board has the duty of determining whether the relationship between certain parties constitutes an employer-employee relationship . . ."); Motor Coach Employees v. Lockridge, 403 U.S. 274, 91 S.Ct. 1909, 29 L.Ed.2d 473 (§ 301 jurisdiction exists as to claimed breaches of the duty of fair representation and other breaches grounded in the collective bargaining agreement itself). It is plaintiffs' contention that Sears, as a co-employer, should be bound by the substantive terms of the DAS-Local 610 collective bargaining agreement once DAS ceased doing business. The evidence establishes, however, that Sears can not be considered a co-employer with DAS.

The doctrine of co-employer originated with the National Labor Relations Board in the context of determining whether the Board would exercise jurisdiction over the particular dispute. See Radio & Television Broadcast Technicians Local Union 1264, International Brotherhood of Electrical Workers, AFL-CIO v. Broadcast Service of Mobile, Inc., 380 U.S. 255, 256, 85 S.Ct. 876, 13 L.Ed.2d 789 (1965); Sakrete of Northern California, Inc. v. National Labor Relations Board, 332 F.2d 902 (9th Cir. 1964), cert. denied, 379 U.S. 961, 85 S.Ct. 649, 13 L.Ed.2d 556 (1965). The criteria employed to determine if two employers are in fact to be considered as co-employers include the following:

1. Interrelation of operations;

2. Centralized control of labor relations;

3. Common management; and

4.

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