LOCAL UNION NO. 391, INTERNATIONAL BROTHERHOOD OF TEAMSTERS, ETC., PETITIONER,
v.
NATIONAL LABOR RELATIONS BOARD, RESPONDENT, CHATTANOOGA DIVISION, VULCAN MATERIALS CO., INTERVENOR

D.C. Cir. | 1976-06-23
No. 74-1167
Before MacKINNON and ROBB, Circuit Judges, and CHRISTENSEN, Senior District Judge for the District of Utah., Before BAZELON, Chief Judge, and WRIGHT, McGOWAN, TAMM, LEVEN-THAL, ROBINSON, MacKINNON, ROBB and WILKEY, Circuit Judges.
543 F.2d 1373 United States Court of Appeals for the District of Columbia (1976) Positive Treatment
Cited by 2 cases

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Holding

The court held that substantial evidence supported the National Labor Relations Board's finding that two divisions of Vulcan Materials Company were separate 'persons' under the National Labor Relations Act, thus making the Union's picketing of one division during a dispute with the other an illegal secondary boycott.


Facts & Procedural History

The Union had a labor dispute with Mideast Division of Vulcan Materials Company and picketed its premises. Subsequently, the Union picketed Chattanoog…

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Opinion of the Court
PER CURIAM: PER CURIAM.

PER CURIAM.

The suggestion of petitioner for rehearing en banc having been transmitted to the full Court and no Judge having requested a vote thereon, it is ORDERED by the Court en bane that petitioner’s aforesaid suggestion for rehearing en banc is denied.

STATEMENT OF CHIEF JUDGE BAZELON, IN WHICH JUDGE WRIGHT JOINS, AS TO WHY HE VOTED TO DENY REHEARING EN BANC.

Although, for the reasons outlined below, I am troubled by the Board’s opinion in this case and by the panel’s affirmance of it, I vote to deny a rehearing en banc. I do so largely because I am hopeful that the Supreme Court’s consideration of Enterprise Assn. v. NLRB, 172 U.S.App.D.C. 225, 521 F. 2d 885 (1975) (en banc) (hereinafter Enterprise Ass’n), cert. granted, 424 U.S. 908, 96 S.Ct. 1101, 47 L.Ed.2d 311, will provide some guidance on the issues that I find troubling. Moreover, I am not convinced that this case rises to the level of “exceptional importance” required by Fed.R.App. Pro. Rule 35, both because no practical consequences would flow from a reversal of the Board’s decision, and because the panel’s opinion here is a relatively narrow one, closely tied to the facts of this particular case.1

While this case is therefore not an appropriate one for consideration by the full court, I do wish to highlight some of the problems raised by the Board’s decision. In National Woodwork Manufacturers Ass’n. v. NLRB, 386 U.S. 612, 87 S.Ct. 1250, 18 L.Ed.2d 357 (1967) (hereinafter National Woodwork) the Supreme Court held that, in order to distinguish protected primary activity from illegal secondary activity, the Board must engage in a probing inquiry into “all the surrounding circumstances” of the case before it. Id. at 644, 87 S.Ct. 1250. The Board’s opinion here appears to fall far short of that standard. Instead of the wide-ranging, flexible inquiry required by National Woodwork, the Board has applied an essentially per se rule, of the sort repéatedly rejected by this court, most recently in Enterprise Ass’n, supra, at 905.

The petitioner, Local 391, International Brotherhood of Teamsters (the Union) represents construction employees at one unincorporated division (Mideast) of the Vulcan Materials Company (Vulcan). At issue here is the Union’s asserted right to extend its lawful picketing of that division to a second unincorporated division (Chattanooga) of the same company. The NLRB found that these two divisions constitute separate “persons” for the purposes of § 8(b)(4)(B) of the National Labor Relations Act, 29 U.S.C. § 158(b)(4)(B), and that the Union’s action in extending its picketing from one division to the other was therefore an illegal secondary boycott.

The rule upon which the Board rests its decision is deceptively simple: “[Sjeparate corporate divisions are separate ‘persons,’ if neither the division nor the parent exercises actual or active, as opposed to merely potential, control over the everyday operations or labor relations of the other.” App. at 5 (emphasis added). Although the Trial Examiner (whose opinion was adopted by the Board) mentioned a number of other facts contained in the record tending to support his conclusion that the divisions were largely autonomous, it is clear that, for him, it was the lack of day-to-day control of the divisions’ labor relations which was dispositive:

I have heretofore found that Vulcan did not maintain actual or active control of the labor relations policies of either Chattanooga or Mideast. I therefore conclude that, on the facts here presented, Chattanooga was an unoffending employer and a Statutory “person” during the course of Respondent’s dispute with Mideast. Accordingly, I conclude that, by picketing Chattanooga on and after October 20, Respondent violated Section 8(b)(4)(B) of the Act. (App. at 10).

The extent of Vulcan’s control over the labor relations policies of Mideast and Chattanooga was certainly a relevant factor to be considered by the Board in determining whether those two divisions constituted separate “persons.” But it was not the only relevant factor. See Local No. 627, International Union of Operating Engineers v. NLRB, 171 U.S.App.D.C. 102, 107, 518 F. 2d 1040, 1045 (1975), aff’d on this point, 425 U.S. 800, 805, 96 S.Ct. 1842, 1844, 48 L.Ed.2d 382, 386 (1976). As has frequently been pointed out, the purpose of § 8(b)(4)(B) is “to prohibit coercive union activity that is directly exerted against an ‘unconcerned’ or ‘neutral’ employer, drawn by the union’s activities into ‘disputes not his own.’ ” Enterprise Ass’n, supra, at 894, quoting National Woodwork, supra. In assessing the “neutrality” of a supposedly “secondary” employer, there is no single factor or criterion upon which the Board may rely. “In the final analysis, . the question of neutrality cannot be answered by the application of a set of verbal formulae.” Vulcan Materials Co. v. United Steelworkers of America, 430 F. 2d 446, 451 (5th Cir. 1970), cert. denied, 401 U.S. 963, 91 S.Ct. 974, 28 L.Ed.2d 247 (1971). What is called for is “a realistic, common sense evaluation of neutrality,” not “a technical exercise in the intricacies of corporate structure . .” NLRB v. Local 810, Steel, Metals, Alloys, and Hardware Fabricators, 460 F. 2d 1, 6 (2d Cir. 1972).

Certainly a “common-sense” evaluation of the “neutrality” of a corporation vis-a-vis its own divisions must include some consideration of the extent to which the corporation is — or appears to be — able and willing to support its divisions (financially and otherwise), if they should become involved in protracted labor disputes. A division which can count on this sort of real or apparent backstopping from its corporate headquarters will obviously have greater bargaining strength than a division which truly stands alone. While the importance of this consideration would seem to be self-evident, neither the Board’s opinion nor the panel’s even makes reference to it.2

Because of the Board’s failure to take this consideration into account, its analysis of the participation of two corporate officials (Whitten and Majors) in the divisions’ labor negotiations seems to be somewhat beside the point. In the Board’s view, the role played by these two officials was at the “crux” of this case. App. at 8. Thus, it was the Board’s finding that Whitten and Majors participated in the negotiations only at the invitation of the divisional presidents and that “they served simply in an advisory capacity during bargaining sessions” which led the Board to conclude that “Vulcan did not exercise a centralized control of the labor relations of its divisions.” App. at 8-9. And, as noted supra, it was because of this lack of “centralized control” that the Board found the divisions to be separate “persons.” This analysis completely overlooks the other, potentially more important questions raised by the activities of Whitten and Majors — viz., whether the corporation, by allowing its officials to participate in divisional negotiations, was able to obtain a tactical advantage against the union, which might reasonably have concluded from their presence that it was facing the full economic might of the corporation; and whether the divisions, by inviting the participation of the corporate officials and by heeding their advice, was able to insure itself of corporate support in any ensuing labor disputes. These questions seem far more relevant to the ultimate issue of “neutrality” than the largely formal questions upon which the Board and the panel focused.3

Section 8(b)(4)(B) has been described as an accommodation between the “dual congressional objectives of preserving the right of labor organizations to bring pressure to bear on offending employers in primary labor disputes and of shielding unoffending employers and others from pressures in controversies not their own.”4 (1951). This accommodation is an uneasy one, which requires the Board, and the courts, to engage in “the drawing of lines more nice than obvious . . . .”5 But however difficult this task may be, the Board cannot properly fulfill its responsibilities by relying on mechanical tests and per se rules, which “subvert [] the congressional purpose by focusing on only one among many potentially relevant factors.” Enterprise Ass’n, supra at 905.

. The two cases upon which the panel relies, American Fed. of Television and Radio Artists v. NLRB, 149 U.S.App.D.C. 272, 462 F. 2d 887 (1972), and Los Angeles Newspaper Guild, Local 69 v. NLRB, 443 F. 2d 1173 (9th Cir. 1971), enfg. 185 N.L.R.B. No. 25 (1970), cert. denied, 404 U.S. 1018, 92 S.Ct. 681, 30 L.Ed.2d 666 (1972), are similarly narrow. Indeed, one of the more troubling aspects of this case is the Board’s apparent eagerness to derive from these two narrow holdings a broad, generally applicable per se rule.

. The panel notes that the “independence” of the Vulcan divisions appears to be “genuine” and that “[a] specious intra-corporate arrangement, contrived to take advantage of the protection of the secondary boycott provisions of the Act, obviously would stand on a different footing.” Slip op. at 8. While I am not convinced that the Board’s inquiry here was sufficiently thorough to uncover a “specious intracorporate arrangement,” that is not really the source of my concern. Rather, I am concerned that the kind of corporate backstopping I have described may enable even genuinely “independent” divisions to enhance their bargaining positions significantly.

. Compare the recent opinion of the Eighth Circuit in Royal Typewriter Co. v. NLRB, 533 F. 2d 1030 (8th Cir., 1976). In that case the Board had determined that Litton Industries, along with its wholly owned subsidiary Litton Business Systems, and the latter’s unincorporated Royal Products Division all constituted a “single employer” for the purpose of assessing responsibility for certain unfair labor practices. The Court affirmed, and provided the following guidance on the standards which should govern “single employer” determinations:

In assessing the appropriateness of single employer treatment, the fact that day-to-day labor matters are handled at the local level is not controlling. A more critical test is whether the controlling company possessed the present and apparent means to exercise its count in matters of labor negotiations by its divisions or subsidiaries and whether its course of conduct encouraged or permitted the local negotiators to so represent the situation to union negotiators for the purpose of achieving a tactical or strategic objective. The presence of Irwin [Litton’s director of labor relations] when some . representations were made gave additional credibility to the statements. We do not think that a conglomerate can act in negotiations as a single employer and then expect to avoid the consequences if unfair labor practice charges result from such conduct.

At 1043 (citations omitted).

See also American Federation of Television and Radio Artists — Baltimore Local, 185 NLRB No. 26, at 594 (1970) (Member Brown dissenting).

. National Woodwork, supra, 386 U.S. at 626-7, 87 S.Ct. at 1259, quoting NLRB v. Denver Bldg. and Constr. Trades Council, 341 U.S. 675, 692, 71 S.Ct. 943, 95 L.Ed. 1284 (1951).

. National Woodwork, supra, 386 U.S. at 645, 87 S.Ct. at 1268, quoting Local 761, Electrical Workers v. Labor Board, 366 U.S. 667, 674, 81 S.Ct. 1285, 6 L.Ed.2d 592 (1961).


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