Petition for Writ of Certiorari — Emeryville Trucking, Inc. v. National Labor Relations Board

In the

Supreme Court of the Anited States

OcTOBER TERM, 1988

EMERYVILLE TRUCKING, INC.,

Petitioner,

Vs

NATIONAL LABOR RELATIONS BOARD,

Respondent.

PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF

APPEALS FOR THE THIRD CIRCUIT

STUART A. WILLIAMS

ECKERT SEAMANS CHERIN

& MELLOTT

600 Grant Street, 42nd Floor

Pittsburgh, PA 15219

(412) 566-6000

Counsel of Record

ee

i

QUESTIONS PRESENTED

I. Joint Employer—National Labor Relations Act

A. Whether the agent which supervises its principal’s

employees in a manner compelled by the principal and for

the benefit of the principal may be found to be a joint

employer of the principal’s employees.

B. If so, whether the General Counsel for the National

Labor Relations Board may execute a settlement agree-

ment with the principal which imposes primary liability

for unfair labor practices committed by the joint employer

solely upon the agent.

II. Burden of Proof—Unfair Labor Practices—National

Labor Relations Act

A. Whether, absent any evidence of discriminatory

anti-union motivation for a business decision, the burden

may be placed on the employer to prove that the timing of

the decision was not accelerated by the employer’s prior

unfair labor practice.

ll

LIST OF PARTIES AND RULE 28.1 LIST

The parties to the proceedings below were the peti-

tioner, Emeryville Trucking, Inc., and the respondent,

National Labor Relations Board.

Petitioner Emeryville Trucking, Inc. discloses the fol-

lowing corporate affiliates:

1. Team Transport, Inc.

2. Team Brokerage Services, Inc.

3. Emeryville Trucking Co.

4. Rezzetano Investments

The Respondent before this Court is the National

Labor Relations Board.

ill

TABLE OF CONTENTS

Page

LIST OF PARTIES AND RULE 28.1 LIST ......... ll

eo 4 wk scuba ds essecces l

A l

as 2

areameeees OT Pett CASE .. ww... ccc ccc ccees 2

REASONS FOR GRANTING THE WRIT.......... 7

I. The Joint Employer Issue................. 7

A. The Third Circuit’s application of the

joint employer concept to the agent of

the admitted employer extends the defi-

nition of “employer” beyond the limits

of the National Labor Relations Act

and is inconsistent with the decisions

of this Court and other Courts of

Appeals..... Cod RA Rae RS Wk’ 6-500 oa 7

B. The decision below that the Board’s

General Counsel may execute a settle-

ment agreement with one joint

employer and impose total primary lia-

bility upon the second joint employer

raises important and unresolved

aes Nees i he aS eae 13

iv

Il. The Burden of Proof Issue ...............- 21

A. The Third Circuit’s decision concerning

cancellation of the second round of

leases and the agency agreement is

inconsistent with Section 10(c) of the

Act and conflicts with decisions of this

Court and other Courts of Appeals. ..... 21

e¢ Shi 8 Per ere rrr re eee 28

APPENDIX (under separate cover) ........-.+-++-: la

Vv

TABLE OF AUTHORITIES

CASES

Page

Ace Doran Hauling & Rigging Co. v. N.L.R.B., 462

fe. f 4st gy rere ner 10

Alladin Indus., 147 N.L.R.B. 1391 (1964)............ 11

Boire v. Greyhound Corp., 376 U.S. 473 (1964)........ 7

Drapery Mfg. Co., 166 N.L.R.B. 805 (1967).......... 18

Howell and Von Schaak & Co., 95 N.L.R.B. 1028

CREE 6d. cedon Adee 11-12

Huntington Hospital, Inc., 229 N.L.R.B. 253 (1977). ..12

Kaylor v. Crown Zellerbach, Inc., 643 F.2d 1362 (9th

Ges ad knacendneenesidise bate ae 9

Laerco Transportation and Warehouse, 269 N.L.R.B.

SOS e Sera mere Ga Rn NC C8 ye eae )

N.L.R.B. v. Babcock & Wilcox, 351 U.S. 105 (1956). . .14

N.L.R.B. v. Houston Chronicle Pub. Co., 211 F.2d

ee ee Se ES onc ubcus kee weeadennd 27-28

N.L.R.B. v. Lassing, 284 F.2d 781 (6th Cir. 1960) . .25-26

N.L.R.B. v. Rapid Bindery, Inc., 293 F.2d 170 (2d

CAP GREE ecbes Ne esce datas ssc eee, 24-25

N.L.R.B. v. Schroeder, 726 F.2d 967 (3d Cir. 1984) ...11

N.L.R.B. v. Transportation Management Corp., 462

ha DOPE ce bb bd ecdeacuneeeuaeesn dt 22

N.L.R.B. v. United Food and Commercial Worker

Union, Local 23, 484 U.S. __, 98 L.Ed. 2d 429

Ey fy Sa a eee par Ie mE oI. Guy sl A pegs 14

Ref-Chem Co., 169 N.L.R.B. 376 (1968), enf't denied

on other grounds 418 F.2d 127 (Sth Cir. 1969)... .17

vi

Teamsters and Auto Truck Drivers, 253 N.L.R.B.

632 (1980) 0... cc ccccccccccccccccccccsscncees u

United States Steel Corp., 270 N.L.R.B. 1318 (1984) ...9

Universal Camera Corp. v. N.L.R.B., 340 U.S. 474

(19S1) ..ccccccccccccccccccccccsccccccsesess 14

Wright Line, a Division of Wright Line, 251

N.L.R.B. 1083 (1980), enf'd on other grounds

662 F.2d 899 (ist Cir. 1981), cert. denied 455

U.S. 989 (1982)... . cece cece cence teen eeees 22

MISCELLANEOUS

N.L.R.B. Casehandling Manual, § 10130.4.......---- 20

N_L.R.B. Casehandling Manual, § 10635 .....----++: 20

l

OPINIONS BELOW

The memorandum opinion of the United States Court

of Appeals for the Third Circuit (Mansmann, J.) has not

been reported. It is reprinted in the appendix hereto, p.

91a, infra.

The supplemental decision and order of the National

Labor Relations Board is reported at 285 N.L.R.B. No.

132, and is reprinted in the appendix hereto, p. 76a, injra.

The decision and order of the National Labor Relations

Board is reported at 278 N.L.R.B. No. 153, and is

reprinted in the appendix hereto, p. 38a, infra.

JURISDICTION

Invoking its jurisdiction under 29 U.S.C. § 160, the

respondent National Labor Relations Board (“Board’’)

issued a complaint alleging that the petitioner Emeryville

Trucking, Inc. (“Emeryville”) “and/or” Helms Express

had committed unfair labor practices within the meaning

of the National Labor Relations Act, 29 U.S.C. § 151, et

seq. (“Act’).' On March 24, 1986, the Board issued a Deci-

sion and Order, finding certain violations of the Act. See p.

38a, infra. On September 24, 1987, the Board issued a

Supplemental Decision and Order, finding additional vio-

lations of the Act. See p. 76a, infra.

On the Board’s application for enforcement and

Emeryville’s cross-application for review, the Third Cir-

cuit on May 11, 1988, entered a judgment and an opinion

‘As will be discussed infra, Helms Express was subsequently dis-

missed from the case as a result of a settlement agreement with counsel

for the Board’s General Counsel.

2

enforcing the Board’s Decision and Order, as supple-

mented. See p. 91a, infra. Emeryville’s petition for rehear-

ing or rehearing in banc was denied by the Third Circuit

on June 9, 1988. See p. 96a, infra.

The jurisdiction of this Court to review the judgment

of the Third Circuit is invoked under 28 U.S.C. § 1254(1).

STATUTE INVOLVED

29 U.S.C. § 151 et seq. National Labor Relations Act.

[The full text of the National Labor Relations Act is

reprinted in the appendix hereto, p. la, infra.]

STATEMENT OF THE CASE

Background

Emeryville owns a fleet of tractor-trailer vehicles that

it leases to various common carriers for use in the freight

hauling business. Beginning in 1979, Emeryville leased its

fleet of trucks to the Astro Division of Helms Express.

Each tractor-trailer unit was covered by a separate written

equipment lease which stated:

The equipment which is the subject of this Lease shall

be driven by an employee of [Helms Express] at all

times that it is in the service of [Helms

Express]... {Helms Express] expressly reserves the

right to control the manner, means, and details of, and

by which the driver of such leased Equipment per-

forms his services, as well as the ends to be

accomplished.

Accordingly, Helms Express hired and employed the driv-

ers of the leased equipment.

In addition to the equipment leases, Emeryville and

Helms Express entered an agency agreement. Among other

3

things, Emeryville agreed, as an agent of Helms Express, to

manage the Helms Express freight terminal located at War-

rendale, Pennsylvania. The agency agreement required

Emeryville:

To comply with all the rules, policies, and procedures

from time-to-time established by {Helms Express]

including, but not limited to, the control of drivers’

logs, the verification of hours of service, and inspec-

tion of vehicles.

~*~ * &*

To advance to drivers not more than the percentage of

revenue and/or other maximum amount as (Helms)

may from time-to-time prescribe.

*-_ * *

[T]o make no commitment. .. to any driver applicant

regarding employment without the express prior

approval of [Helms Express].

The agency agreement was terminable by either party at

any time.

Terms and conditions of employment for the Helms

Express drivers, who were members of Teamsters Local

Union No. 800, were governed by the National Master

Freight Agreement (“NMFA”). Helms Express negotiated

and signed the NMFA. Emeryville neither negotiated nor

signed the NMFA. Prior to the instant case, grievances

arising under the NMFA were filed with, processed by, and

defended by Helms Express.

Emeryville, as agent of Helms Express, performed

ministerial tasks related to the Helms Express drivers.

Thus, Emeryville dispatched drivers as provided in the

NMFA; distributed Helms Express payroll checks; issued

ne anaaaaanreiaaareaaeaia anemia ds tii

4

monies for sick and vacation days as provided in the

NMFA from a fund created by Helms Express; and,

accepted employment applications and hired probationary

employees subject to the final approval of Helms Express.

The Emeryville-Helms Express Relationship

In 1980-81, the business relationship between Emery-

ville and Helms Express deteriorated significantly. Among

other things, Helms Express announced (and then

rescinded) a decision to close a freight terminal at Gary,

Indiana, which Emeryville managed pursuant to the

agency agreement; opened a second freight terminal at

Gary, Indiana in violation of the agency agreement and in

competition with the Emeryville-managed terminal; uni-

laterally and without purported justification withheld three

percent of the lease payments due to Emeryville pursuant

to the equipment leases; and, deducted from the equip-

ment lease payments due to Emeryville the amount of two

grievance awards owed by Helms Express pursuant to the

NMFA.

In an effort to resolve the differences between Emery-

ville and Helms Express, Emeryville agreed to permit

Helms Express to operate the second Gary freight termi-

nal. In exchange, Helms Express agreed to pay Emeryville

a one percent commission on the second terminal’s reve-

nues and guaranteed that the second terminal would not

solicit existing customers of the Emeryville-managed ter-

minal. Helms Express reneged on both of these promises

and refused to execute a written agreement embodying

them.

5

The Packer Grievance and the

First Round of Lease Cancellations

In early 1981, Helms Express employee Melvin

Packer (‘Packer’) filed a grievance with Helms Express

alleging a violation of the NMFA. Specifically, Packer pro-

tested that the Emeryville dispatcher acting as Helms

Express’ agent at the Warrendale terminal directed him to

““dead-head”’ (operate his tractor-trailer without a load on

board) from Detroit, Michigan to Warrendale.

Packer successfully pursued his grievance under the

NMFA. However, Helms Express refused to pay the

award, referring Packer to Emeryville. When Packer

appeared at Emeryville on September 14, 1981, Emery-

ville, frustrated with its treatment at the hands of Helms,

cancelled the leases of the equipment driven by Packer and

the drivers junior to Packer. Two weeks later, Helms

Express laid off these drivers.

The Agency Agreement Cancellation

and the Second Round of Lease Cancellations

Foliowing the first round of lease cancellations on Sep-

tember 14, 1981, Emeryville anticipated a response from

Helms Express with respect to the numerous problems in

their relationship. To the contrary, no response was

received. On September 24, 1981, Emeryville cancelled the

agency agreement and all remaining equipment leases.

Helms Express acknowledged the cancellations without

protest and notified its drivers of their layoff.

Based upon the foregoing, the Board initially con-

cluded that the agency agreement and the second round of

equipment leases were lawfully cancelled by Emeryville as

an independent business decision. The Board specifically

found that Emeryville ceased doing business with Helms

6

because Helms “‘was paying no attention” to Emeryville’s

continuing complaints about their business relationship.

The Board stated that the second round of cancellations

was separate from the first round and would have occurred

regardless of the Packer grievance. See p. 70a, infra.

In its Supplemental Decision and Order, however, the

Board reversed its field and concluded that the second

round of cancellations also violated Section 8(a)(3) and (1)

of the Act. The Board found that the first round of cancel-

lations “accelerated” the second, stating:

While [Emeryville’s] relationship with Helms had

become frayed even before the Packer grievance, there

is nothing to indicate that absent the discriminatory

14 September layoffs, [Emeryville] would not have

continued the balance of the Helms leases to term. In

these circumstances, we find the General Counsel has

established that Emeryville terminated the balance of

the truck leases with Helms on 30 September as a

result of the unlawful 14 September layoffs. Such con-

duct, which caused the layoff of 30 additional drivers,

must be found to violate Section 8(a)(3) and (1) of the

Act, unless it can be shown that an independent inter-

vening event caused the second round of

cancellations.

See p. 79a-80a, infra.

In reaching its decision, the Board further stated:

[W]e do not disturb the judge’s finding, which we pre-

viously adopted, that the record fails to show any spe-

cific discriminatory motivation for the second round

of cancellations. No such evidence is necessary where

it has been established, as in this case, that an action

adversely affecting employees’ terms and conditions of

employment came about as a result of unlawful acts,

———

7

rather than as a result of completely independent law-

ful events.

See. p. 82a, infra.

Yet the Board added:

In the compliance stage of this proceeding, [Emery-

ville] is free to introduce evidence establishing that

factors other than the Packer grievance would have

resulted in an earlier termination of some or all of the

discriminatees and thereby mitigate its backpay

liability.

See p. 83a, infra.

REASONS FOR GRANTING THE WRIT

I. The Joint Employer Issue

A. The Third Circuit’s application of the joint

employer concept to the agent of the admitted

employer extends the definition of “employer”

beyond the limits of the National Labor Relations

Act and is inconsistent with decisions of this

Court and other Courts of Appeals.

In Boire v. Greyhound Corp., 376 U. S. 473 (1964), a

general contractor, Greyhound, operated a number of bus

terminals. Greyhound engaged a subcontractor, Floors,

Inc., to provide cleaning services at the terminals.

Although Floors, Inc. hired, paid, disciplined, transferred,

promoted, and discharged the cleaning employees, Grey-

hound took part in setting up work schedules, determining

staffing levels, and supervising day-to-day activities. A

union filed a petition seeking to represent the cleaning

employees at the terminals, alleging that Greyhound and

Floors, Inc. were joint employers.

a eaiieeaieieaeenaeiaminasl

8

This Court framed the issue as follows:

Whether Greyhound ... possessed sufficient control

over the work of the employees to qualify as a joint

employer with Floors... .

376 U. S. at 481. The Court concluded that Greyhound’s

status as a joint employer was “essentially a factual issue.”

Id.

The rationale supporting the imposition of joint

employer status on the general contractor under the facts

of Boire v. Greyhound is sound. The general contractor

possesses a clear choice. If the general contractor wishes, it

may retain a true independent contractor and leave that

independent contractor wholly to its own discretion with

respect to the control and direction of its own employees.

In that case, the general contractor insulates itself from

whatever liability may arise from the unfair labor practices

committed by the subcontractor.

If, conversely, the general contractor elects to partici-

pate in the control and direction of the subcontractor’s

employees, the general contractor cannot later disclaim

responsibility for unfair labor practices committed against

those employees. Having opted to become a “partner” in

the direction and control of a group of employees, the

general contractor becomes liable for any unfair labor prac-

tices committed by the “partnership.” A contrary result

would permit the general contractor to place itself in the

best of all worlds—possessed of the authority to control

and direct employees but insulated from liability for its

actions by the presence of a nominally “independent”

subcontractor.

The joint employer analysis, however, becomes funda-

mentally flawed when transplanted from the factual setting

9

of Boire v. Greyhound to the reversed factual setting of this

case. Here, Helms Express, the principal, is analogous to

the general contractor and Emeryville, the agent, is analo-

gous to the subcontractor. The principal/general contractor

in this case accepted and performed, rather than sought to

avoid, the obligations of the employer. Helms Express was

the signatory to the NMFA and determined the labor rela-

tions policies applicable to its own employees. Pursuant to

the agency agreement, Emeryville was compelled to

observe the policies dictated by Helms Express. The mini-

mal discretion exercised by Emeryville fell far short of that

exercised in many cases where the Board and the courts

have declined to find joint employer status. Laerco Trans-

portation and Warehouse, 269 N.L.R.B. 324 (1984); Team-

sters and Auto Truck Drivers, 253 N.L.R.B. 632 (1980);

United States Steel Corp., 270 N.L.R.B. 1318 (1984).

An examination of the decisions of the Courts of

Appeals reveals that the joint employer analysis simply has

no place in factual contexts analagous to this case. In

Kaylor v. Crown Zellerbach, Inc., 643 F.2d 1362 (9th Cir.

1981), a warehouse operator leased trucks with drivers

from a trucking company. The warehouse operator pos-

sessed “‘full control over the dispatch, routing, and use of

its trucks and the hours of service of the drivers”. 643 F.2d

at 1365 (emphasis added). The trucking company, how-

ever, employed the drivers pursuant to a collective bar-

gaining agreement and remained solely responsible for

wages and benefits. Jd.

The Ninth Circuit flatly rejected the contention that

the warehouse operator was a joint employer of the driv-

ers. The court stated:

10

The business relationship of [the warehouse operator]

and [the trucking company] were close and intercon-

nected. But appellants produced no evidence of joint

ownership or control of the two companies. Although

[the warehouse operator] necessarily directed the driv-

ers to some extent, the trucking company was in con-

trol of their wages, benefits, and working conditions.

On this record, no issue is raised that [the warehouse

company] and [the trucking company] were joint

employers of the drivers.

643 F.2d at 1368.

Similarly, in Ace Doran Hauling & Rigging Co. v.

N.L.R.B., 462 F.2d 190 (6th Cir. 1972), the Sixth Circuit

held that drivers of equipment leased by the owner to a

terminal operator were employed solely by the owner-les-

sor, who hired, fired, and compensated the drivers. As the

court stated, “[a]ny other result would greatly expand the

meaning of the term ‘employee’ under the Act, an expan-

sion which Congress explicitly inhibited in [the 1947 Taft-

Hartley amendments]”. 462 F.2d at 194.

Further, the Third Circuit failed to recognize the sig-

nificant practical difficulties its decision creates for the

steel hauling sector of the trucking industry or any other

industry where principal-agent relationships are common.

Common carriers such as Helms Express are ill-equipped

to manage their own terminal operations without the assis-

tance of agents such as Emeryville. The effect of the Third

Circuit’s decision will be to deter potential agents from

accepting such assignments rather than expose themselves

to joint employer liability for the actions of the principal.

In lieu of the Third’s Circuit’s misplaced reliance on

joint employer principles, a proper analysis of this case

begins with the language of Section 2(2) of the Act, which

11

provides that “(t)he term ‘employer’ includes any person

acting as an agent of an employer, directly or indi-

rectly...” 29 U.S.C. § 152(2). In interpreting Section 2(2),

the Board has long held that an employer is liable for the

acts of an individual agent acting under the employer’s

apparent authority, even if such acts are contrary to the

employer’s instructions. The individual agent in such cases

is, in effect, the employer for purposes of fixing liability.

Alladin Indus., 147 N.L.R.B. 1391 (1964).

In N.L.R.B. v. Schroeder, 726 F.2d 967 (3d Cir. 1984),

the Third Circuit addressed the importance of the agency

concept to the statutory scheme enacted by Congress. As

the court noted, the plain language of the statute renders

“employer” status critical to the determination of Section

8(a) violations. The court found this proposition especially

compelling where, as in the instant case, the contractual

employer is a party to a collective bargaining agreement,

stating:

In general the party with whom the employee has

reached a labor agreement, be it an individual or a

corporation, does not (or cannot) speak individually.

Instead, it speaks through specific persons. The NLRA

recognizes this obvious fact by defining an

“employer” in Section 2(2) as including agents, direct

and indirect, of the employer.

726 F.2d at 970.

Relevant Board decisions demonstrate that, in situa-

tions analogous to the instant case, it is the principal alone

and not the agent that is the statutory “employer.” In the

early case of Howell and Van Schaak & Co., 95 N.L.R.B.

1028 (1951), owners of various commercial buildings

entered into agency contracts with real estate management

companies. The agency contracts, which were terminable

12

at will, provided that the management companies would

receive a percentage of gross rent collected in compensa-

tion for the services provided. Although actual hiring and

firing of the employees was handled by the management

companies, veto power over those decisions was retained

by the building owners. The Board found:

It is clear that such authority as [the management

companies] have over the employees involved herein

stems solely from the respective contracts of agency

which may be terminated at will. In view of the fact

that the essential right of control over matters funda-

mental to the employment relationship is retained by

the building owners and is exercised by [the manage-

ment companies] only at the will of such owners, we

find that... the building owners are the Employers.

95 N.L.R.B. at 1029. See also Huntington Hospital, Inc.,

229 N.L.R.B. 253 (1977).

In examining the facts of this case, it is plain that the

acts of Emeryville which the Board found to be indicative

of joint employer status are nothing more than the mani-

festation of Emeryville’s role as Helms Express’ agent. In

fact, the agents in Howell and Huntington Hospital exer-

cised far greater authority than Emeryville was found to

have exercised in this case. Pursuant to the Helms Express-

Emeryville agency agreement, Emeryville dispatched

Helms Express’ employees as required by the NMFA, to

which only Helms Express was a party; advanced expense

money; administered sick day and vacation funds and

made payments from the funds in accordance with Helms

Express’ obligations under the NMFA; and, received

employment applications and hired drivers subject to

13

Helms Express’ approval. In the performance of these obli-

gations, Emeryville operated under policies established by

Helms Express.

Most significantly, the record is devoid of any evi-

dence that Emeryville’s performance of its agency obliga-

tions did not inure to the exclusive benefit of Helms

Express. Each and every one of Emeryville’s duties might

have been as easily performed by individual supervisors,

managers, or other agents employed by Helms Express.

The fact that Helms Express elected to operate its business

and discharge its responsibilities under its collective bar-

gaining agreement with the union through the employment

of a corporate agent cannot alter the fact that Helms

Express at all times remained the sole employer of its

employees under Section 2(2) of the Act.

B. The decision below that the Board’s General

Counsel may execute a settlement agreement with

one joint employer and impose total primary lia-

bility upon the second joint employer raises

important and unresolved problems.

On December 3, 1984, after commencement of the

hearing on this complaint, the Administrative Law Judge

(“ALS*’) approved a settlement agreement between counsel

for the Board’s General Counsel and Helms Express. The

settlement agreement provided that Helms Express would

be secondarily liable for damages resulting from the first

round of lease cancellations on September 17, 1981, but

that Helms Express’ liability would not extend beyond the

cancellation of the Emeryville-Helms Express Agency

agreement on September 30, 1981.

Emeryville strenuously objected to the General Coun-

sel-Helms Express settlement agreement at the hearing

14

before the ALJ and at all relevant stages of the proceeding

thereafter. Nevertheless, neither the Board nor the Third

Circuit addressed these objections.

This Court recently reiterated that, once the hearing

on the complaint begins, a nonconsenting party may chal-

lenge the settlement before the ALJ, and an appeal of the

ALJ’s determination is available before the Board. Judicial

review of the Board’s decision is authorized by Section

10(f) of the Act. N.L.R.B. v. United Food and Commercial

Workers Union, Local 23, 484 U.S. ——, 98 L.Ed. 2d 429

(1987).

Pursuant to Section 10(f), a reviewing court must set

aside a Board decision “when it cannot conscientiously

find that the evidence supporting that decision is substan- |

tial, when viewed in the light that the record in its entirety |

furnishes, including the body of evidence opposed to the |

Board’s view.” Universal Camera Corp. v. N.L.R.B., 340

U.S. 474, 488 (1951). Review of the Board’s application of

legal precepts to the facts is plenary. N.L.R.B. v. Babcock &

Wilcox, 351 U.S. 105 (1956).

With respect to the facts of this case, the overwhelm-

ing evidence shows that the purpose of Helms Express’

Outrageous conduct was to eliminate Emeryville as the

agent of Helms Express. In so doing, Helms Express ridded

itself of its obligations under the National Master Freight

Agreement, a collective bargaining agreement which

Helms Express negotiated and signed and by which it was

bound. By approving the settlement agreement between

Helms Express and the General Counsel, the Board and

the Third Circuit foreclosed imposition of liability upon

the true wrongdoers.

Ee

15

Overwhelming and unrebutted evidence of Helms

Express’ union animus was never discussed by the Board

or the Third Circuit. This evidence included the following:

When Packer first applied for a position with Helms

Express, he was fired by Helms Express before his

thirty-day probationary period expired. A Helms

Express manager stated that this was due to Packer's

union activities. It was only after Packer’s successful

prosecution of a grievance, with Emeryville’s support,

that Packer became a permanent Helms Express

driver.

When another prospective employee applied for a

position with Helms Express, he too was fired before

his thirty-day probationary period expired. A Helms

Express manager stated that, like Packer, this person

was fired because of his union activities.

After Roy Haggard took over the operation of the

Astro Division, he stated that drivers who were mem-

bers of Local 800 would no longer be hired to drive

trucks leased to Helms Express and idle trucks would

only be operated under non-union contracts.

In late 1980, after Emeryville had ordered twenty-five

new trucks, Helms Express refused to permit Emery-

ville to lease them to Helms Express because union

drivers would have to be hired to drive them. Emery-

ville subsequently leased the trucks to another War-

rendale-based carner, which found enough business to

keep the trucks running.

In violation of the National Master Freight Agree-

ment, Helms Express opened a non-union terminal in

Beaver Falls, Pennsylvania.

16

¢ Haggard’s predecessor as head of the Astro Division

was reassigned to run Gemini, a non-union contract

carrier that Helms Express established secretly.

* Helms Express’ parent, Ryder Truck Lines, acquired a

non-union company which directly competed with the

Astro Division. In 1982, after the closure of the Astro

Division was complete, the Helms-Astro agents were

retained by the I.U.-Ryder non-union operations.

Le Ne ee ete sb ar el er etl

POM Aw hm

¢ After the Astro Division shutdown, an officer of

Helms Express stated that Haggard had been brought

in for the sole purpose of closing the Astro Division.

* On September 14, 1981, there were idle trucks leased |

to Helms Express by a fleet owner whose trucks were

domiciled at the Warrendale terminal. These trucks

were idle because of Haggard’s orders that no more :

union drivers from Local 800 be hired. Helms Express

knew these trucks were available and that Packer and

four others were laid off.

As the undisputed facts show, Helms Express almost

certainly committed its own primary, independent viola-

tions of the Act by not transferring laid off drivers to other

trucks and by refusing to pay the Packer grievance. By

approving the settlement agreement, the Board deprived

Emeryville of the opportunity to prove that another party

was primarily liable for any harm suffered by the affected

drivers.

Further, as the record makes clear, Helms Express as

principal actually condoned its agent Emeryville’s conduct.

In the face of the cancellation of two rounds of equipment

leases and the agency agreement, Helms Express offered no

reaction but to accept Emeryville’s actions. Had Helms

Express wished, it could have forbidden Emeryville from

taking actions which supposedly forced Helms Express to

ne A.

———

17

lay off its drivers. For it was Helms Express, not Emery-

ville, which had the right to fire the drivers in question, a

right contained in its labor agreement. Helms Express’

total passivity was merely a convenient way to end the

Emeryville relationship, an outcome Helms Express had

instigated for approximately nine months.

With respect to the law, neither the Board nor the

Third Circuit cites a single case for the startling proposi-

tion that the General Counsel may settle with one joint

employer and impose total primary liability for unfair

labor practices on another. Counsel for the petitioner is

aware of no such authority. This void indicates how radi-

cally the present case departs from the Board's traditional

practice and procedure and from basic standards of

fairness.

The law which does exist in this area supports the

conclusion opposite that reached, without discussion, by

the Third Circuit and the Board. In Ref-Chem Co., 169

N.L.R.B. 376 (1968), enft. denied on other grounds, 418

F.2d 127 (Sth Cir. 1969), the Board found a manufacturer

to be a joint employer with a contractor hired to do work

on the manufacturer's premises. The union representing

the contractor’s employees filed a timely charge against the

contractor alleging a violation of Section 8(a)(5) and (1) of

the Act. Subsequently, and more than six months after the

alleged unlawful act, the charge was amended to include

the manufacturer as a respondent. The manufacturer urged

the Board that Section 10(b) of the Act mandated dismissal

of the charge against it. The Board disagreed, holding:

(The manufacturer’s] liability under the Act cannot be

considered separate and apart from that of [the con-

tractor]. As joint employer, each is responsible for the

conduct of the other and whatever unlawful practices

Ee

ee ere eee ne

18

are engaged in by the one must be deemed to have

been committed by both... . [T]he nature of the joint

employer relationship is such that the charge against

[contractor] also constituted a charge against [manu-

facturer] for any unfair labor practices found against

its co-employer.

169 N.L.R.B. at 380.

In an analogous case involving “‘single employer” con-

cepts, the Board reversed the decision of an Administra-

tive Law Judge imposing unfair labor practice liability on

only one of the employers jointly and severally liable. In

Drapery Mfg. Co., 166 N.L.R.B. 805 (1967), two compa-

nies were found to have violated Section 8(a)(1), (3), and

(5) of the Act. The Board held:

In our opinion this limitation of affirmative responsi-

bility to only one of the Respondents results in an

order entirely inadequate to remedy the joint unfair

labor practices which have been committed. Accord-

ingly we shall amend the order so that it will be appli-

cable to [both companies].

166 N.L.R.B. at 805.

Thus, Ref-Chem and Drapery Mfg. suggest that settle-

ment with one joint employer is tantamount to settlement

with all. Because the complaint against Helms Express was

dismissed, the complaint against Emeryville must likewise

be dismissed.

Alternatively, if the complaint against Emeryville is

not to be dismissed, a new hearing must be granted with

Helms Express as co-respondent. The inequity of proceed-

ing against one joint employer while not proceeding

against the other is even more obvious in this case than in

Ref-Chem. Unlike Ref-Chem—where, at least, the

19

employer which was party to the labor agreement was ini-

tially charged—the admitted employer and party to the

labor agreement here is released. The unfairness to Emery-

ville is manifest. As a result of the settlement and the

Board’s Order, Emeryville was primarily liable to all of the

Helms Express employees for 15 months. Emeryville’s co-

employer, Helms Express, was secondarily liable to a frac-

tion of the Helms Express employees for 2 weeks. Emery-

ville’s basic rights to contribution and indemnity from its

co-employer cannot be so easily defeated at the whim of

the General Counsel.

Finally, the settlement approved by the Board and the

Third Circuit in this case fails to satisfy even the Board’s

own procedural guidelines. It is plain that the Board’s

Casehandling Manual makes no provisions whatever for

settlement with only one joint employer, although settle-

ment procedures in a variety of other situations are set

forth in great detail. This fact further illustrates the unprec-

edented and unauthorized nature of the General Counsel’s

actions in this case.

The Casehandling Manual does provide procedures

for settlement of parallel violations of Section 8(a)(3) (by

an employer) and Section 8(b)(2) (by a union). While the

company and the union are not “joint” parties in the sense

of the joint employer situation, the Board’s 8(a)(3)—

8(b)(2) procedures do provide guidance concerning the

requisites of a fair settlement. The Casehandling Manual

provides:

Joint and Several Liability: In companion 8(a)(3) and

8(b)(2) cases growing out of the same acts of discrimi-

nation, the stipulated order may require the employer

20

respondent and the union respondent jointly and sev-

erally to make whole the discriminatees. The stipula-

tions should generally not attempt to apportion the

liability between the employer and the union....

Where one party is willing to settle, but the other

respondent insists upon trial of the case, a settlement

agreement may be taken from the party who is willing

to settle. Appropriate provisions should be inserted in

the agreement, however, to assure that the respondent

or respondents signing the stipulation will bear only

its or their proportionate share of the backpay liability

unless efforts to obtain payment of the remaining por-

tion of the backpay from the other respondent or

respondents should fail.

N.L.R.B. Casehandling Manual § 10130.4 (emphasis

supplied).

With respect to compliance with such settlements, the

Casehandling Manual further provides:

Joint and Several Liability: Where the backpay liabil-

ity of a respondent employer and a respondent union

in a companion CA-CB case is joint and several, a//

reasonable measures should be taken by the compli-

ance officer to assure that the liability is in fact borne

equally by the employer and the union.

x * *

In cases where all respondents indicate a desire to

settle (the word “settle” is used herein to cover com-

pliance as weli), each should pay its equal share.

N.L.R.B. Casehandling Manual § 10636 (emphasis

supplied).

Thus, even assuming that settlement with one joint

employer was proper, the terms of the General Counsel-

21

Helms Express settlement simply cannot satisfy even the

Board’s own guidelines. Rather than the fifty-fifty split

contemplated by Section 10130.4, the General Counsel

elected to apportion 100% of liability to Emeryville, with

Helms’ Express only secondarily liable for a tiny fraction

of the total amount. Absolutely no attempt was made by

the Board to see that Helms Express paid its “proportion-

ate share” or “‘equal share.”

Nor was this a case where Emeryville “insisted upon

trial of the case.” Emeryville was never given an opportu-

nity to settle, at least not on the terms presented to Helms

Express.’

In sum, because the issues surrounding settlement

with one joint employer and imposition of total primary

liability upon the second joint employer raise important

problems not addressed by this Court or the Courts of

Appeals, petitioner respectfully suggests that certiorari

should be granted.

II. The Burden of Proof Issue

A. The Third Circuit’s decision concerning cancella-

tion of the second round of leases and the agency

agreement is inconsistent with Section 10(c) of the

Act and conflicts with decisions of this Court and

other Courts of Appeals. |

The resolution of unfair labor practice charges arising

under Section 8(a) (3) of the Act involving so-called “dual

motive” discharge or discipline—that is, discharge or dis-

cipline in which the decision to discharge or discipline an

employee may be motivated by opposition to protected

2Of course, the General Counsel could not offer precisely the same

deal to Emeryville as it did to Heims Express lest both alleged joint

wrongdoers be secondarily liable.

22

activity or by legitimate business reasons, or both—is gov-

erned by the legal standard set forth in Wright Line, a

Division of Wright Line, 251 N.L.R.B. 1083 (1980), enfd

on other grounds, 662 F.2d 899 (1st Cir. 1981), cert. denied,

455 U.S. 989 (1982). The Board’s Wright Line analysis was

approved by this Court in N.L.R.B. v. Transportation

Management Corp., 462 U.S. 393 (1983).

Under the Wright Line test, the General Counsel must

initially make out a prima facie showing of discriminatory

discharge by supporting the inference that protected con-

duct was “a motivating factor” in the employee’s decision.

Only if the General Counsel establishes a prima facie case,

the burden shifts to the employer to show that the dis-

charge or discipline would have occurred even in the

absence of the protected activity. Wright Line, supra at

1089.

The ALJ expressly analyzed whether activity pro-

tected by the Act motivated Emeryville to cancel the sec-

ond round of truck leases and the agency agreement. As a

result of that analysis, the ALJ found no violation of Sec-

tion 8(a)(3) and (1) of the Act:

[O]nce Emeryville discriminatorily cancelled the first

round of leases, the second round of leases and the

agency agreement were cancelled as an independent

business decision ...[O]n the second round of lease

cancellations, Emeryville threw in the towel on Helms

because Helms was paying no attention. I see it as a

business decision that is separate from the first round

of cancellations and that “would have taken place

even in the absence of the protected conduct”. Wright

Line, supra, 251 NLRB at 1089. Other than surmise

that the timing of the second round of the cancella-

tions ten days later was to thwart a Packer grievance

23

or had other anti-union animus, there is no record

support for finding that the second round was not

done out of frustration with Helms, which had made

no effort to reconcile the differences on which Emery-

ville had been seeking redress since July. Once the

Packer grievance triggered the first round of cancella-

tions, there is no knowing when the second round

would have come, if at all.

See p. 70a, infra (emphasis added).

However, the Board’s supplemental decision, enforced

by the Third Circuit, held that the second round of cancel-

lations was “‘accelerated”’ by the first:

While [Emeryville’s] relationship with Helms had

become frayed even before the Packer grievance, there

is nothing to indicate that absent the discriminatory

14 September layoffs, [Emeryville] would not have

continued the balance of the Helms leases to term. In

these circumstances, we find the General Counsel has

established that [Emeryville] terminated the balance

of the truck leases with Helms on 30 September as a

result of the unlawful 14 September layoffs. Such con-

duct... must be found to violate Section 8(a)(3) and

(1) of the Act, unless it can be shown that an indepen-

dent intervening event caused the second round of

cancellations.

See p. 79a-80a, infra (emphasis added).

This analysis is directly contrary to the mandate of

Section 10(c) of the Act, which requires that each indepen-

dent unfair labor practice be proven by “a preponderance

of the testimony taken by the Board.” 29 U.S.C. § 160. The

decisions of the Third Circuit and the Board literally oblit-

erate the Wright Line-Transportation Management

24

requirement of the prima facie case of unlawful discrimi-

nation. Based upon a finding of one unfair labor practice—

the first round of cancellations—the Third Circuit and the

Board inferred a prima facie case in a second independent

complaint. Under the Third Circuit’s reasoning, prior vio-

lations by an employer relieve the General Counsel of the

burden of establishing a prima facie case for future viola-

tions, imposing upon the employer the burden of disprov-

ing the charges.

To the contrary, the prima facie case requirement is

neither relaxed nor excused by the fact that the timing of

the employer’s decision, and not the decision itself, is

alleged to be unlawful. The burden is on the General

Counsel in this case to prove that the second round of

cancellations was accelerated. It is not Emeryville’s burden

to show that, but for an earlier unfair labor practice found

by the Board, the cancellations would not have occurred

later.

In the absence of clear evidence of anti-union animus,

the Courts of Appeals simply refuse to find that a lawful

business decision was accelerated. In fact, even if such

evidence is present, some Courts of Appeals have declined

to adopt the theory that a lawful decision, even if acceler-

ated, constitutes an independent unfair labor practice. An

examination of these cases is instructive in the instant

matter.

In N.L.R.B. v. Rapid Bindery, Inc., 293 F.2d 170 (2d

Cir. 1961), the employer demonstrated lawful reasons,

including inadequate facilities, high costs, and frequent

employee turnover, necessitating the closure of its existing

plant and relocation to new quarters. Prior to a final deci-

sion to relocate, however, an election was conducted and a

union was certified as collective bargaining representative

25

at the existing plant. Approximately one month later, the

employer completed the move. The Board found that the

employer’s decision violated Section 8(a)(3) and (1)

because it was accelerated by the union activity. 293 F.2d

173-74.

The Second Circuit denied enforcement. It held:

In those situations where a change or discontinuance

of business operations is dictated by sound financial

or economic reasons the courts have refused to find

that § 8(a)(3) has been violated even though the

employer action may have been accelerated by the

union activity ... It is our view that the record before

us does not support the inference drawn from it by the

Board that Rapid’s move was motivated by the desire

to avoid its obligations to Union. All of the evidence

points to motivation for sound business reasons.

Though there may have been animosity between

Union and Rapid, animosity furnishes no basis for the

inference that this was the preponderant motive for

the move when convincing evidence was received

demonstrating business necessity. The decided cases

do not condemn an employer who considers his rela-

tionship with his plant’s union as only one part of the

broad economic picture he must survey when he is

faced with determining the desirability of making

changes in his operations.

293 F.2d at 174-75.

In N.L.R.B. v. Lassing, 284 F.2d 781 (6th Cir. 1960),

cert. denied, 366 U.S. 909 (1961), the employer studied its

method of delivering gas with its own employees. The

employer determined that such delivery should be per-

formed by common carrier in the event that any excess

costs were incurred. At that time the employer knew that

26

its truck licenses expired on a certain date and that deliv-

ery services would not be continued beyond that date.

Prior to the final decision, a union requested recognition

and a meeting for purposes of collective bargaining. The

day prior to the first scheduled meeting, the employer

announced that delivery would thereafter be performed by

common carrier, and the drivers were laid off. The Board

found that the employer violated Section 8(a)(3) and (i) by

accelerating the proposed change in operations on account

of union activity. 284 F.2d 782-83.

The Sixth circuit denied enforcement. After reiterating

that a change in operations motivated by financial or eco-

nomic reasons is not an unfair labor practice, the court

concluded:

Fundamentally, the change was made because of rea-

sonably anticipated increased costs, regardless of

whether this increased cost was caused by the advent

of the Union or by some other factor entering into the

picture. This did not constitute discrimination against

the three employees with respect to their tenure of

employment because of membership in the Union,

within the provisions of Section 8(a)(1) and (3) of the

Act.

284 F.2d at 783.

Significantly, the burden in Lassing remained with the

General Counsel to prove that the layoff was, in fact, accel-

erated; the court refused to require the employer, as the

Beard did in the instant case, to prove that the layoff

would not have occurred later (for example, on the date of

the license expiration) absent any union activity. The

Lassing result is sound for two reasons. First, it comports

with Section 10(c) of the Act, 29 U.S.C. § 160(c), which

requires that each unfair labor practice be proven by a

27

preponderance of the evidence. Second, it comports with

the fundamental premise that it is virtually impossible to

prove a negative proposition; by requiring an employer to

conciusively show that, for whatever reason, something

would not have happened, the Board requires proof no

employer can ever provide.

Finally, in N.L.R.B. v. Houston Chronicle Pub. Co.,

211 F.2d 848 (Sth Cir. 1954), the employer terminated its

newspaper delivery employees and established a network

of independent contractors to deliver newspapers. The

Board found that, although economically motivated, the

conversion was accelerated on account of the employees’

concerted activity. 211 F.2d 851.

The Fifth Circuit denied enforcement, holding:

We do not think that, because the respondent acceler-

ated the change-over in order to avoid anticipated

union interference, it necessarily follows that the origi-

nal decision to change was to defeat union organiza-

tional efforts. It is the motive for the decision to

change-over that is material to this controversy rather

than the motive for accelerating the change-over.

211 F.2d 854.

Further the court addressed the particular sensitivity

of reconciling lawful, economically-motivated business

changes with the mandates of the Act. In a passage equally

pertinent to the instant case, the court stated:

When the Board could as reasonably infer a proper

motive as an unlawful one, substantial evidence has

not proved the respondent to be guilty of an unfair

labor practice. Motives are notoriously susceptible of

being misunderstood and hard to prove or to dis-

prove. If an ordinary act of business management can

28

be set aside by the board as being improperly moti-

vated, then indeed our system of free enterprise, the

only system under which either labor or management

would have any rights, is on its way out, unless the

Board’s action is scrupulously restricted to cases

where its findings are supported by substantial evi-

dence, that is evidence possessed of genuine sub-

stance. In our opinion, this is not such a case.

211 F.2d 854-55 (footnote omitted).

As all of the preceding cases make clear, this case

requires an independent showing, based upon a preponder-

ance of the evidence, that the cancellations of the second

round of leases and the agency agreement were unlawfully

accelerated. Because the General Counsel failed to pro-

duce, and the Administrative Law Judge, the Board, and

the Third Circuit failed to find, such evidence, Emery-

ville’s actions were lawful.

CONCLUSION

For these various reasons, this petition for certiorari

should be granted.

Respectfully submitted,

Stuart A. WILLIAMS

ECKERT SEAMANS CHERIN & MELLOTT

600 Grant Street

Pittsburgh, Pennsylvania 15219

(412) 566-6000

Counsel of Record

September 7, 1988

29

No.

In the

Supreme Court of the United States

OctToser TERM, 1988

EMERYVILLE TRUCKING, INC...

Petitioner,

Vv.

NATIONAL LABOR RELATIONS BOARD,

| Respondent.

CERTIFICATE OF SERVICE

1, Stuart A. Williams, a member of the Bar of this

Court, hereby certify that on the 7th day of September,

1988, three copies of the Petition for Writ of Certiorari in

the above-entitled case were mailed, first class postage pre-

paid, to Aileen A. Armstrong, Deputy Associate General

Counsel, National Labor Relations Board, office of the

General Counsel, Washington, D.C. 20570. I further cer-

tify that all parties required to be served have been served.

2 A A «I — <P

STUART A. WILLIAMS

ECKERT SEAMANS CHERIN & MELLOTT

600 Grant Street

. Pittsburgh, Pennsylvania 15219

(412) 566-6000

Counsel of Record