Davis Van & Storage

National Labor Relations Board - Board DecisionsJun 30, 1975

218 N.L.R.B. 1339 (N.L.R.B. 1975)

DAVIS VAN & STORAGE 1339 Davis Van & Storage ; Great Western Van & Storage Co. and Chauffeurs , Teamsters & Helpers Local No. 150, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America . Case 20-CA-8998 June 30, 1975 DECISION AND ORDER BY MEMBERS JENKINS, KENNEDY, AND PENELLO On April 10, 1975, Administrative Law Judge Russell L. Stevens issued the attached Decision in this proceeding. Thereafter, Respondent filed excep- tions and a supporting brief, and the General Counsel filed an answering brief. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the National Labor Relations Board has delegated its authority in this proceeding to a three-member panel. The Board has considered the record and the attached Decision in light of the exceptions and briefs and has decided to affirm the rulings, findings, and conclusions of the Administrative Law Judge only to the extent consistent herewith. Mary B. Gehring owned two separate, incorpora- ted moving and storage companies, Respondents herein . Davis Van & Storage operated out of Davis, California, and Great Western Van & Storage Co. out of Sacramento. Both were affiliated with Allied Van Lines. Mrs. Gehring was the president of both corporations. She personally managed the Davis operations and employed a separate manager at Great Western. Great Western had a collective- bargaining agreement with the Union. Davis was nonunion and paid lower wages.' In January 1974, the Internal Revenue Service closed Great Western for tax delinquencies. Great Western laid off its employees. Mrs. Gehring met with representatives of the Union to discuss the situation. She told them Great Western would not reopen and that the business would not be sold or transferred. She complained about the work habits of the former employees and about the high costs of operating under the collective-bargaining agreement. In February 1974, Davis applied for and was awarded Great Western's former franchise from Allied Van Lines. At an unspecified time Davis leased part of the premises formerly leased by Great Western , assumed custody of some property in Great Western's storage vaults, and hired some employees to operate the facility, including the former manager of Great Western. Some of the property in storage had been in storage with Allied agents even prior to their having been in the possession of Great Western. The other moving and storage customers Davis obtained at the Sacramento location were apparently obtained through its status as an Allied agent rather than through its relationship to Great Western. For instance, Great Western had shared the business generated by McClellan Air Force Base with another Allied agent. Prior to going out of business, Great Western had lost its share of the McClellan business, presumably because of unsatisfactory performance. When Davis acquired the Allied franchise, it ap- proached the appropriate officials and obtained for itself a share of the Air Force Base business. The Internal Revenue Service auctioned off some of Great Western's equipment in July 1974. Davis bid successfully on five vehicles and used them at the Sacramento facility thereafter. Presumably it had used its own equipment there before the auction. The Administrative Law Judge's findings of viola- tions of Section 8(a)(5), (3), and (1) of the Act are based on his conclusion that Davis continued the business in Sacramento as the alter ego of Great Western. In our view, this conclusion is not warrant- ed. As background, we note that despite the common ownership and similar business operations of Davis and Great Western, there is no evidence that they were operated with such active common control or integration of operations as to have constituted a single enterprise or single employer.2 Therefore the fact that Davis ultimately took over a substantial part of Great Western's operations does not, by itself, make Davis heir to any of Great Western's collec- tive-bargaining obligations.3 Of crucial importance is the fact that in no sense did Mrs. Gehring or Great Western voluntarily transfer Great Western's business to Davis. The closing of Great Western was involuntary. There is no suggestion that it was fraudulent or illusory. Further, the transfer of some of Great Western's former customers, equipment, and lease to Davis was accomplished for the most part as a result of arm's- length transactions. Thus, in its acquisition of the Allied franchise and the clientele that went with it, Davis stood in the shoes of an independent Allied agent, lacking the power to compel such transfer to itself. As an auction bidder on Great Western's 1 Mrs. Gehring and her late husband owned Davis since 1955 and operated it without any union since the mid-1950's They purchased Great Western in 1967 and operated pursuant to agreements with the Union since that year 2 Cf Milo Express, Inc, 212 NLRB 313 (1974). 218 NLRB No. 205 9 We need not decide here under what circumstances such a transfer of obligations would occur if Great Western and Davis were considered to be separate subdivisions of a single employer . See Park/ane Hosiery Co., Inc and Mervyn Roberts d/b/a Park/ane Hosiery, 203 NLRB 597, 611-615 (1973). 1340 DECISIONS OF NATIONAL LABOR RELATIONS BOARD equipment it stood in the shoes of a stranger. Davis informally took over part of Great Western's lease simply by paying the appropriate rent, but there is no evidence that the owner made other than an independent business decision to allow Davis to do so. In short, we do not have a situation where an employer had transferred work out of a unit of represented employees. We do not have before us an employer who was in a position to do so, at least not after Great Western legitimately closed. Therefore, the Administrative Law Judge's findings concerning Respondents' desire to get rid of the Union, and the fact that they may have welcomed the opportunity to do so, lose their significance. The events which resulted in the demise of the bargaining unit were beyond Respondents' control. The partial recaptur- ing of the business by Davis was something within its reach but not necessarily within its grasp. Its securing of the Sacramento operation was contingent on several independent business transactions, the suc- cess of which were not assured in advance. In these circumstances, Davis, although commonly owned with the defunct Great Western, is not its alter ego for collective-bargaining purposes. Consequently it had no obligation to abide by the collective- bargaining agreement between Great Western and the Union, or to seek out the former employees of Great Western and offer them employment. Since Davis never hired, or even indicated any intention of offering employment to, a sufficient number of them so that the Union would have continued as the majority representative of its employees, Davis is not a "successor employer" to Great Western with regard to the latter's bargaining obligation.4 Accordingly, we shall dismiss the complaint in its entirety. ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board orders that the complaint herein be, and it hereby is, dismissed in its entirety. 4 United Maintenance & Manufacturing Co, Inc, 214 NLRB No 31 (1974), The Boeing Company, 214 NLRB No. 32 (1974) DECISION STATEMENT OF THE CASE RUSSELL L. STEVENS, Administrative Law Judge: This matter was heard at Sacramento, California, on February 13, 1975.1 The complaint,2 issued December 12, is based upon an original charge filed February 28 and a first i All dates hereinafter are within 1974, unless stated to be otherwise 2 As amended at the heanng. amended charge filed December 10, by Chauffeurs, Teamsters & Helpers Local No. 150, International Brother- hood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, hereinafter referred to as the Umon (sometimes referred to as Local 150). The complaint alleges that Davis Van & Storage; Great Western Van & Storage Co., hereinafter referred to as Respondents (sometimes separately referred to as Davis and Great Western), violated Section 8(a)(5), (3), and (1) of the National Labor Relations Act, hereinafter referred to as the Act. All parties were given full opportunity to participate, to introduce relevant evidence, to examine and cross-examine witnesses, and to argue orally. Briefs, which have been carefully considered, were filed on behalf of the General Counsel and Respondent. Upon the entire record, and from my observation of the witnesses and their demeanor, I make the following: FINDINGS OF FACT 1. THE BUSINESS OF RESPONDENT At all tunes material herein,3 Respondent Great Western is, and has been, a California corporation engaged in transporting and storing household goods, operating at a facility located in Sacramento, California. During the calendar year preceding January 25, 1974, Respondent Great Western performed services valued in excess of $50,000 for customers, each of whom performed services valued in excess of $50,000 from points located outside the State of California. In the course of its conduct of business during said calendar year Respondent Great Western also provided services valued in excess of $50,000 to the United States Air Force at McClellan Air Force Base.4 At all times material herein Respondent Davis is, and has been, a California corporation engaged in transporting and storing goods, operating at a facility located in Davis, California. During the past year Respondent Davis received gross revenues in excess of $50,000 for transporting goods and supplies in interstate commerce, and received gross revenues in excess of $50,000 from customers, each of whom purchased and received, or sold and delivered, goods and supplies valued in excess of $50,000 from points outside the State of California. I find that Respondents are employers engaged in commerce within the meaning of Section 2(6) and (7) of the Act. U. THE LABOR ORGANIZATION INVOLVED Chauffeurs, Teamsters & Helpers Local No. 150, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, is a labor organization within the meaning of Section 2(5) of the Act. 3 Great Western judicially was declared bankrupt on or about January 6, 1975 4 As stipulated by counsel at hearing DAVIS VAN & STORAGE 1341 III. THE UNFAIR LABOR PRACTICES A. Background Mary B. Gehring (hereinafter Gehring) and her husband purchased all the outstanding stock of Great Western on or about May 5, 1967. Gehring has been the sole shareholder of Great Western since the death of her husband on March 15, 1973. Gehring and her husband began business as Davis Van and Storage , a proprietorship , in 1955 and the business was incorporated September 30, 1969, as Respondent Davis. Gehring has been the sole shareholder in Davis since her husband's death. In January of 1974 Gehring was president of Respon- dents Great Western and Davis, and corporate officers of the two companies were the same individuals (vice president and secretary-treasurer). In January of 1974 Fred Mykleby (hereinafter Mykleby) was manager of Great Western, and Gehring managed the business of Davis. Great Western has had a contract with the Union since prior to 1968,5 and at all times material herein Richard Henry (hereinafter Henry), business agent for the Umon, administered the contract for the Union. The six persons named in the complaints as alleged discriminatees were longtime employees of Great Western until on or about January 22, 1974, and were members of Local 150 on and prior to that date. Respondent Davis is nonunion, and has not had a contract with any union since at least the 1950's. Great Western has been a marginal operation for several years, and frequently has had problems with its Federal taxes. Gehring loaned money to Great Western on three occasions to make payment of delinquent Federal taxes. On January 22, 1974 the Internal Revenue Service closed Great Western after unsuccessful attempts to collect delinquent assessments , and on July 30, 1974, that Agency sold certain equipment of Great Western at auction, to pay the delinquencies . Neither Henry nor any of the aforesaid six employees were notified in advance by Gehring or anyone else that the business would be closed, although some of the six knew the Company's financial condition was not good and there was a sense of impending changes. Mykleby asked some of the six prior to January 22 if they would be willing to go nonunion and continue to work if there were changes . All declined to do so. After Great Western was closed January 22, employment of the six alleged discriminatees was terminated by Great Western. Henry, Tony Santos (organizer for the Union), Mykleby, and Gehring met to discuss the closing of Great Western after the closure. Gehring said the facility would not reopen, and that the business would not be sold or transferred. At that meeting, Gehring complained about the high costs of operation with union employees. After Great Western was closed several events occurred. Mykleby was hired by Gehring to manage Davis' Sacra- mento facility. Some outside employees were hired by 5 Great Western admitted that the employees involved herein, whose employment was terminated , constituted a unit appropriate for collective bargaining. 8 Oscar Liedke was added to the complaint at hearing, without objection by Respondent. Davis after the closing. Great Western's Allied Van and Storage franchise was revoked, and Davis was awarded the franchise after applying therefor. Allied was awarded the McClellan Air Force Base business previously handled by Great Western. Davis assumed Great Western's facility lease , and continues to occupy Great Western's former business area , although it has been reduced from 30,000 to 18,000 square feet. Davis assumed control of items in the Great Western storage area , and Davis bills the customers for storage costs. Three of Great Western's employees applied for work at Davis after Great Western closed: Mykleby, Cotis Childs (hereinafter Childs), and John Halpenny, a salesman . Of the three, only Childs had been a member of Local 150, and he withdrew his membership prior to being hired by Davis. Davis is nonunion, and pays drivers less than Great Western paid. Finally, Davis bid on seven Great Western vehicles sold at auction by IRS in July of 1974, and purchased five of them. No member of Local 150 applied for a job at Davis, nor did Henry ask Gehring to hire any such member. B. Analysis Great Western and Davis are family corporations in the strictest sense . Gehring owns all the outstanding stock in both companies. In view of that fact, and the actions of Davis in assuming Great Western's lease, storage area, business (in part),7 and equipment (in large part, through bid sale), it is quite clear, and it is found, that Davis is the alter ego of Great Western. Bruce E. Kronenberger and Gerbert Schoenbrod d/b/a American Needle and Novelty Co., Kentucky Manufacturing Company and Harrisburg Manufacturing Company, 206 NLRB 534 (1973); Rushton & Mercier Woodworking Co., Inc., and Rand & Co., Inc., 203 NLRB 123 (1973). Testimony shows Gehring's complaints (acknowledged by Gehring) about the high cost of operating a unionized business . She acknowledges her desire to do business without a union ; Davis is nonunion. No move was made by Gehring to notify the Umon of impending closure, nor was the subject discussed with the Union prior to closing. No offer or move was made by Davis to assume Great Western's union contract , or any part thereof. Being the alter ego of Great Western, and continuing to operate a trucking and storing facility at Great Western's former place of business, Davis is obligated to assume Great Western's bargaining agreement with the Union. Helrose Bindery Inc. and Graphic Arts Finishing, Inc., 204 NLRB 499 (1973); Interstate 65 Corporation d/b/a Conti- nental Inn, 186 NLRB 248 (1970).8 The record shows that not only did Great Western fail and refuse to bargain with the Union at any time relative to the closing but, further, Gehring assured the Umon that the facility would not be reopened. Further, Davis did not bargain, or offer to bargain, with the Union when it reopened the business. Davis has ignored the Union and its contract , and has unilaterally changed existing wages and r Operated with nonunion workers from Davis, as acknowledged by Gehring 8 As pointed out in General Counsel's brief, Davis could be found to be a successor of Great Western , and thereby bound by the latter's contract with the Union. 1342 DECISIONS OF NATIONAL LABOR RELATIONS BOARD other rights, terms, and conditions of employment at Great Western. Davis was careful to avoid reemployment of Great Western's experienced employees, and staffed the facility with Davis and outside nonunion employees. Under such circumstances it is clear that Davis violated Section 8(a)(5) and (1) of the Act, and it is so found. Marquis Printing Corporation and Mutual Lithograph Company, 213 NLRB No. 43 (1974). Respondents argue that Davis is not the alter ego or successor of Great Western, since the size of the facilities and the customers of the two are not identical, and only three of Great Western's employees applied for work at Davis. That argument is without merit, since the nature of the business is identical and the only reason the employees involved herein did not apply at Davis is because they knew Davis was nonunion and to work there would jeopardize their union benefits. Gehring made it clear to the employees that she felt Great Western could not prosper as a union business, and there is no doubt but what the changes she made were to divest Great Western of its union affiliation. It may well be, as Gehring testified, that Great Western was a marginal business and that it was closed because of inability to pay its taxes. Had the matter stopped there, no violation of the Act would have been involved. However, much more was done. The business was reopened, and operated by Davis. The only substantial changes were that the Great Western facility was reduced somewhat in size, and its new employees were all nonunion. It was the reopening that gave rise to the violation of the Act, since the former employees had been displaced solely because of their union membership. There is no basis for finding that Gehring was partially or wholly responsible for Great Western's closing ,9 but even assuming that the closing was beyond any control by Gehring, that fact would not protect Davis or Gehring from the consequences of hiring new employees, transferring Davis employees to Great Western, and failing to reemploy the members of the bargaining unit at Great Western. Rushton & Mercier Woodworking Co., Inc., and Rand & Co., Inc., supra. Respondents argue "There is absolutely no evidence to support the contention . . . that respondent Davis has refused to retain or employ any of the six employees... . The evidence . . . shows that none of the employees .. . applied for work to respondent Davis." Respondent also argues that the Union made no request to bargain. These arguments sidestep the facts. First, neither Gehring nor either of Respondents notified the Union that Great Western would close , and Gehring misled the Union after the closing, by stating that Great Western would not be sold, transferred, or reopened. Second, Gehring frequently stated to the Union and to Great Western employees that she could not afford to pay union wages. Third, when Great Western's business was reactivated by Davis, Davis was nonunion and no unit employee was asked to return to work.10 Finally, no question was raised about any Great Western employee's competence or ability to do the work at Great Western or Davis. Under such circumstances, it is obvious that applications to work for Davis at the Great 9 Although it is apparent , based upon her statements to employees and the Union , that she welcomed the opportunity to shift the business from Western facility were not required of the six displaced employees. They were entitled by law to recall, and the Union was entitled to bargaining. American Trailer & Equipment Corp. and its Brunswick Body Works Division, 151 NLRB 867 (1965); Rushton & Mercier, supra. Certainly, in view of Gehring's misrepresentation of the facts, there was no waiver by the employees or the Union of their rights under the contract between Great Western and the Union. As found above, Davis was obligated to recall the former employees of Great Western pursuant to the terms of the collective-bargaining agreement between Great Western and the Union, and failure to do so was inherently destructive of employee interests, in that such action discourages union membership. It is clear from the evidence that failure to recall the Great Western employees was motivated solely by Gehring's desire to nd herself of the Union and its wage and benefit structure. Such action and motivation constitute a violation of Section 8(a)(3) and (1) of the Act. Rushton & Mercier, supra; Foodway of El Paso, a Division of Kimbell Foods, Inc., 201 NLRB 933 (1973); K. B. & J. Young's Super Markets, Inc. v. N. L R. B., 377 F.2d 463 (C.A. 9, 1967), cert. denied 389 U.S. 841. IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of the Respondents set forth in section III, above, occurring in connection with the operations of Respondent described in section I, above, have a close, intimate, and substantial relation to trade, traffic, and commerce among the several States, and tend to lead to labor disputes burdening and obstructing commerce and the free flow of commerce. CONCLUSIONS OF LAW 1. Davis Van & Storage and Great Western Van & Storage Co. are employers engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 2. Chauffeurs, Teamsters & Helpers Local No. 150, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, is a labor organization within the meaning of Section 2(5) of the Act. 3. All drivers and loaders employed at the location formerly occupied by Great Western and now occupied by Davis at Sacramento, California, excluding office clerical employees, guards and supervisors as defined in the Act, constitute a unit appropriate for purposes of collective bargaining within the meaning of Section 9(b) of the Act. 4. At all times relevant herein, the Union, described above, has been, and now is, the representative for the purpose of collective bargaining of the employees in the unit described above, within the meaning of Section 9(a) of the Act. Great Western to Davis. 10 As mentioned above , Childs by then had withdrawn from the Union. DAVIS VAN & STORAGE 1343 5. By laying off Great Western's employees and closing the facility on January 22, 1974,11 by reopening as Davis Van & Storage and thereafter refusing to recognize the Union, by refusing to adopt and comply with the existing collective-bargaining agreement, by refusing to recall laid- off employees of Great Western, and by unilaterally 'changing existing wages and other terms and conditions of employment, all without notice to or bargaining with the Union and all with the purpose of reducing costs by removing the Union as the representative of their employ- ees, Respondents have violated Section 8(a)(3), (5) and (1) of the Act. 6. The aforesaid unfair labor practices are unfair labor practices affecting commerce within the meaning of Section 2(6) and (7) of the Act. THE REMEDY In order to effectuate the policies of the Act, it is necessary that Respondents be ordered to cease and desist from the unfair labor practices found, and to remedy them. Respondents' violations of Section 8(a)(3) require an order that Davis undo the effects of the discrimination against employees of Great Western by restoring, so far as possible, the situation that would have existed but for the unfair labor practices. Golden State Bottling Co., Inc., formerly Pepsi-Cola Bottling Company of Sacramento, v. N.LR.B., 414 U.S. 168 (1973). Accordingly, it is recom- mended that Respondents be ordered to offer immediate reinstatement to those employees in the unit represented by the Union who were laid off on January 22, 25, and 26, as Davis now needs, discharging present employees, if necessary, to make room for them. All remaining employ- ees in the unit represented by the Union who were laid off on or about January 22, 1974, must be placed on a preferential hiring list. Employees to be offered immediate reinstatement, and those to be placed on the preferential hiring list, can be determined in the compliance stage. Further, Respondents must make whole all of the aforesaid employees. The amount due each, as prescribed in F. W. Woolworth Company, 90 NLRB 289 (1950), with interest as prescribed in Isis Plumbing & Heating Co., 138 NLRB 716 (1962), can be determined in the compliance stage pursuant to the criteria set forth above. In view of the nature and extent of the unfair labor practices Respondents have committed , it is recommended that Respondents be ordered to cease and desist from interfering in any manner with the rights of their employees to enjoy the statutory guarantees of self- organization. [Recommended Order omitted from publication.] 1' Employee Mathews testified his last day of employment was January 25, 1974, and employee Musante testified his last day of work was January 26, 1974.