United Telegraph Workers, AFL-CIO v. N.L.R.B.

• Decision Date: 24 February 1978
• Docket Number: P,No. 76-1505,AFL-CI,76-1505
• Citation: 187 U.S.App.D.C. 231,571 F.2d 665
• Parties: 97 L.R.R.M. (BNA) 2962, 187 U.S.App.D.C. 231, 83 Lab.Cas. P 10,392 UNITED TELEGRAPH WORKERS,etitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent, Western Union Telegraph Company and Western Union Corporation et al., Intervenors.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 665

571 F.2d 665

97 L.R.R.M. (BNA) 2962, 187 U.S.App.D.C. 231,

83 Lab.Cas. P 10,392

UNITED TELEGRAPH WORKERS, AFL-CIO, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent Western Union Telegraph Company and Western Union Corporation et al., Intervenors.

No. 76-1505.

United States Court of Appeals District of Columbia Circuit.

Argued June 1, 1977.

Decided Feb. 24, 1978.

Isaac N. Groner, Washington, D. C., with whom Neal M. Sher, Washington, D. C., was on the brief, for petitioner.

Richard B. Bader, Atty., N. L. R. B., Washington, D. C., with whom John S. Irving, Gen. Counsel, Carl L. Taylor, Associate Gen. Counsel, Elliott Moore, Deputy Associate Gen. Counsel and Robert G. Sewell, Atty., N. L. R. B., Washington, D. C., were on the brief, for respondent.

Thomas M. Healy, New York City, was on the brief, for intervenor, The Western Union Telegraph Co.

Thomas L. Morrissey, Newark, N.J., was on the brief for intervenors, Western Union Corp., et al.

Before BAZELON, Chief Judge, and TAMM and WILKEY, Circuit Judges.

Opinion for the Court filed by WILKEY, Circuit Judge.

Dissenting opinion filed by BAZELON, Chief Judge.

WILKEY, Circuit Judge:

This case presents the question of the collective bargaining obligations of a group of interrelated corporations. The United Telegraph Workers (the Union) long have been the collective bargaining representative of employees of Western Union Telegraph Co. (Telegraph). During 1969-73, Telegraph reorganized itself into a parent holding company and five subsidiaries. Telegraph, the common carrier, became the major subsidiary; its various non-FCC-regulated operations were spun off into four other subsidiaries. Following this corporate reorganization, the Union demanded that it be recognized as the collective bargaining representative, not only of the employees of Telegraph, but also of the employees of the parent and four other subsidiary corporations. These corporations refused to recognize the Union. The Union filed an unfair labor practice charge with the National Labor Relations Board, asserting that the six corporations constituted a "single employer" for purposes of collective bargaining, and that these corporations (excepting Telegraph) had unlawfully refused to recognize and bargain with it in violation of § 8(a)(1) and (5) of the National Labor Relations Act. ¹ Reversing the Administrative Law Judge (ALJ), a divided panel of the Board found that each corporation was a "separate and independent entity," and that the six corporations therefore did not constitute a "single employer"; accordingly, it held that Telegraph's bargaining obligations "had no application" to the parent or four other subsidiaries, and dismissed the complaint. ² The Board's findings were amply supported by substantial evidence in the record, and we affirm on the basis of its opinion. We write briefly to address the suggestions aired by our dissenting colleague.

As in other areas of the law, corporations normally are treated as separate entities under the Labor Act. The Board treats multiple corporations as a single employer only when it is established that the nominally separate corporations are in fact operated as a single integrated business enterprise. As explained approvingly by the Supreme Court in 1965, the Board weighs four factors in ascertaining whether several businesses are sufficiently integrated to be treated as one: (1) interrelation of operations; (2) common management; (3) centralized control of labor relations; and (4) common ownership or financial control. ³ After careful consideration of the facts, the Board concluded that of these "four key elements . . . only common ownership is present here." ⁴ Because common ownership is necessarily a feature of any conglomerate organization, and because common ownership is not determinative where common control is not shown, ⁵ the Board held that the Union failed to demonstrate that the six corporations were a single employer.

Our dissenting colleague concedes that the record contains substantial evidence to support the Board's findings that these six corporations were not a single employer. ⁶ He denies, however, that disposition of this case can rest solely on consideration of the elements comprising the "single-employer" test, and would remand to let the Board consider whether the "alter-ego" and "successorship" doctrines are relevant to the circumstances of this case. We disagree.

First, we think that the "single-employer" test adequately disposes of this litigation. In Local 627, IUOE v. NLRB, ⁷ this Court squarely held that the collective bargaining obligations of integrated parent/ subsidiary corporations under NLRA § 8(a)(1) and (5) were to be determined by means of the four-factor "single-employer" test that the Board used here. From the outset the litigation has proceeded on this assumption; from the outset the parties have done no more than dispute as to how facts under the "single-employer" test should be found. ⁸ If there is any doubt that the "single-employer" test is adequate to dispose of this case, it has never been expressed by this Court, by any other court, by any of the parties to this litigation, or by any of the expert decisionmakers who have considered the case thus far.

Second, we think that remand for further consideration would serve no purpose. Remand for consideration of the "alter-ego" doctrine would be redundant, for in ascertaining under the "single-employer" test whether the various corporations have interrelated operations, common management, common ownership, and centralized control of labor relations, the Board plainly made factual findings akin to any it would make under an "alter-ego" rubric. ⁹ Remand for consideration of the "successorship" doctrine would be futile, and unjustifiable in any event. The General Counsel, representing the charging party before the ALJ, stated that the successorship doctrine was inapplicable. ¹⁰ The charged parties agreed that "the doctrine of successorship 'would require radical transformation' to be applicable" here. ¹¹ The ALJ concluded that this case "(did) not involv(e) . . . a successorship situation." ¹² The successorship doctrine was not mentioned by the majority or dissenter on the Board, nor by any party on brief or on oral argument to this Court. There is simply no reason to remand this case to an expert agency for consideration of a theory which both it and all parties before it have at all times agreed is irrelevant.

Our role in this case is to affirm the Board's decision if its decision is supported by substantial evidence in the record. We all agree that the Board's decision is supported by substantial evidence in the record and its decision according is

Affirmed.

BAZELON, Chief Judge, dissenting:

This case concerns the legal principles governing the bargaining obligations of an employer that "spins off" portions of its business to wholly-owned subsidiaries. Relying primarily on our recent decision in Local 627, International Union of Operating Engineers v. NLRB, ¹ the court today upholds the Board's consideration of four criteria common ownership, common management, interrelationship of operations, and centralized control over labor relations. Although these are valid criteria, they do not include all the relevant considerations in cases involving reorganization through "spin offs." Local 627 concerned the bargaining obligations of two competing companies that had intermingled their operations but maintained separate work forces. ² Here, by contrast, the union contends that the employer simply incorporated its existing divisions, and subsequently hired nonunion employees to replace members of the union. Previous Board and court decisions concerning similar problems reveal consideration of other factors, such as (a) whether the reorganization was motivated by an intention to avoid obligations to the union, and (b) whether, from the perspective of the employees, the employing enterprise has remained essentially the same. The Board in this case gave inadequate attention to union animus and none at all to the perspective of the employees. For these reasons I would remand to the Board for further consideration and, if needed, additional proceedings.

I

Our national labor policy has long embraced the principle that, to ensure fairness to employees, the duty of an employer to bargain with a union must sometimes be imposed on another, nominally separate business entity. Such an obligation has been found to exist by the NLRB and the courts in a variety of factual settings.

One such set of circumstances has led to what is referred to as the "alter ego" doctrine. As one commentator has described it, this doctrine applies where "a technical change in employer identity is merely incident to the former employer's attempt to disguise its continuance because of that employer's union animus or an unlawful motive to avoid the commands of national labor laws." ³ In such situations the "new" employer is deemed the alter ego of the former employer and is held responsible for the former employer's labor obligations, since the law views them as the same employer in fact. ⁴

A second such set of circumstances has resulted in what is known as the doctrine of employer "successorship." The sale of an enterprise is perhaps the simplest situation in which successorship might apply. ⁵ The concept has been utilized, however, in a great number of circumstances, as described in the margin, including corporate reorganization. ⁶ In each instance the crucial inquiry is whether, after one employer transfers its assets to another, there nevertheless remains "substantial continuity of identity in the business enterprise" ⁷ from the vantage of the employees. ⁸ Yet another such set of circumstances has given rise to the "single employer" standard, which the Board applied here. The theory underlying this concept is that where several nominally separate businesses...