holding, in an NLRA case, that a company may not avoid its obligations under a CBA by a paper liquidation and sale of assets when the transaction is a sham and the owners retained control of the business
How later courts described this case
- holding, in an NLRA case, that a company may not avoid its obligations under a CBA by a paper liquidation and sale of assets when the transaction is a sham and the owners retained control of the business
- stating that an alter ego relationship exists where there is a “purpose to avoid the old employer’s labor obligations”
- ruling that dissolution of company and transfer of assets did not prevent enforcement of a Board order
- noting that the alter ego analysis involves questions of fact
Written by the judges who cited it.
The opinion
*108 Mr. Justice Reed,
dissenting:
The record does not lead me to the conclusion that petitioner has taken any improper steps to secure leave to adduce additional evidence, the matter to which the certiorari was limited by our grant. It is plain that the Circuit Court of Appeals did not act on any such ground. Neither the record on that issue nor the Government’s brief or argument make any such contention. Only after evidence before the Board would it seem proper for a court to form its opinion of that question.
So far as we now know, the petitioner sold its facilities in good faith, after the entry of the Board’s order and prior to its motion to remand, thus divesting itself of all interest or control over its former properties. In that situation it asked a remand to the Board to present before the Board the change of conditions because of which it asked a dismissal of the proceedings. § 10 (e), 49 Stat. 453 . There were two literally unconditional provisions of the order which petitioner, if its allegations are true, could not meet, 2 (a) and (c) :
“2. Take the following affirmative action which the Board finds will effectuate the policies of the Act:
(a) Offer to William Cornish, E. D. Richey, and Earl Gooch immediate and full reinstatement to their former positions, without prejudice to their seniority and other rights and privileges;
(c) Post immediately notices in conspicuous places at its Texas City, Texas, refinery stating that the respondent will cease and desist in the manner aforesaid, and maintain said notices for a period of thirty (30) consecutive days from the date of posting;”
In its brief, respondent, it seems to me, admits the correctness of petitioner’s view. It says:
*109 “In its application to adduce evidence petitioner alleged that by reason of its distribution of assets and discontinuation of business it could not reinstate any employees. Thereafter in its petition for rehearing in the court below and petition for certiorari in this Court, petitioner maintained that it could not do so unless, as it suggested, the order required it to purchase and operate another refinery or otherwise resume business. Properly construed (cf. Federal Trade Commission v. Standard Education Society, 302 U. S. 112, 117-118 ), the order contains no such requirement. Its purpose was to remedy petitioner’s violations of the Act by restoring the status quo as it existed prior to the violations, but only to the extent possible under the circumstances existing at the time of compliance, assuming that the circumstances were not changed through any bad faith on petitioner’s part. See National Labor Relations Board v. Remington Rand, Inc., 97 F. 2d 195, 196-197 (C. C. A. 2). That the men were to be offered reinstatement To their former positions’ is express indication that the reinstatement provision was contingent upon continued operation of the Texas City refinery. This likewise appears to have been true of paragraph 2 (c) of the order requiring the posting of notices 'at its Texas City, Texas, refinery.’ ”
We cannot treat this suggestion as relieving this petitioner of the threat of contempt proceedings. The statement does not consent to the amendment of the order. Bad faith may still be claimed to exist. This should be determined by the Board. Consequently, I am of the opinion that the decree below should be reversed with directions to sustain the motion for a remand unless the Board agrees to eliminate §§ 2 (a) and (c) of the order, in line with the Board’s apparent concession in its brief.
The Chief Justice concurs in this dissent,