Petition — Carvel Co. v. National Labor Relations Board

“ Supreme Court, U.S "

FILED

1 = NOV 25 1977

MICHAEL RODAK, JR., CLERK

IN THE SUPREME COURT OF THE UNITED STATES

October Term, 1977

‘ No. WT -FT44

THE CARVEL COMPANY,

Petitioner

VS.

THE NATIONAL LABOR RELATIONS BOARD,

Respondent

PETITION FOR WRIT OF CERTIORARI

To the Supreme Court of the United States

Leonard Kopelman,

Counsel for Petitioner

10 Post Office Square

Boston, MA 02109

(617)482-4515

INDEX

Page

Opinions Below ...ccccccccccccccccccvccees l

JUTISGICTION ..cccccccccccccccscccccccccces |

Question Presented ...cccceccvcesecccceees 2

Statement of the Case ...ceseeecccccesesees 2

Reasons for Granting This Writ ....-eeeeeeeees 6

CONCLUSION ..ccccccccccccvcccccccscveseces 9

APPENdix .cccecccccvceccccecessesessseces

Chronological List of Relevant

Docket Entries ....ceeeceeeeeees cove |

Opinion of the Administrative

Law Judge ...eeeees ccccccccccccccee 2

Opinion of the National Labor

Relations Board ....ceeeccesceccesees 19

Opinion of the First Circuit

Court of Appeals ....ceeeceeececccees 32

TABLE OF CASES

Cooks, Waiters and Waitresses, Local 327

131 NLRB 198 (1961) ...cceeececccceees ccce 758

Retail Associates, Inc.

120 NLRB 388, 41 LRRM 1502 (1958) ........ 7

-™

IN THE SUPREME COURT OF THE UNITED STATES

October Term, 1977

NO.

THE CARVEL COMPANY, Petitioner

vs.

THE NATIONAL LABOR RELATIONS BOARD, Respondent

PETITION FOR WRIT OF CERTIORARI TO THE

SUPREME COURT OF THE UNITED STATES

To the Honorable, the Chief Justice and Associate

Justices of the Supreme Court of the United States.

The Carvel Company, the petitioner herein, prays

that a writ of certiorari issue to review the judgment of

the First Circuit Court of Appeals entered in the above-

entitled case on September 1, 1977.

OPINIONS BELOW

The opinion of the Administrative Law Judge,

which is unreported, is printed in the Appendix hereto,

infra, page 2.

The opinion of the Nationa! Labor Relations Board

was reported at 226 N.IL.R.B. No. 18, 93 L.R.R.M. 1157

(1976), and is printed in the Appendix hereto, infra, page 19.

The opinion of the First Circuit Court of Appeals

is, as yet, unreported (see The Carvel Company v. The

National Labor Relations Board, Civil No. 76-1490) (Ist

Cir., filed September 1, 1977) and is printed in the

Appendix hereto, infra, page 32.

JURISDICTION

The jurisdiction of the Court is invoked under Title

28 United States Code, Section 1254.

eli

QUESTIONS PRESENTED

Was the withdrawal of the employer, The Carvel

Company, from a multi-employer bargaining unit timely

so that the employer was not bound by a subsequent

collective bargaining agreement?

STATEMENT OF THE CASE

The case was initially heard by Administrative Law

Judge Melvin J. Wells. The basis for federal jurisdiction

before Judge Wells was Title 29 United States Code,

Section 160.

On April 21, 1976, Administrative Law Judge

Melvin J. Wells issued a decision (app. 2 ) in this

proceeding in which he found that the petitioner, The

Carvel Company, had timely withdrawn from a multi-

employer bargaining association and was not obligated to

sign that contract ultimately negotiated between the

association and the union. General Counsel appealed this

decision to the National Labor Relations Board.

On September 23, 1976, the National Labor

Relations Board rendered a decision and order (app. 19 )

whereby it found that The Carvel Company's withdrawal

from the association was not timely and that The Carvel

Company must comply with its order.

On September 1, 1977, the First Circuit Court of

Appeals upheld the decision and order of the National

Labor Relations Board (app. 32 ).

The petitioner had for many years been a member

of the Pipefitting Contractors Association, Inc. of Maine

(Association), a multi-employer bargaining unit. As such

the petitioner has been a party to a series of contracts

with the Plumbers, Steamfitters and Metal Trades Local

321, AFL-CIO (Union). As The Carvel Company decided

that it wanted to permanently and sincerely embark on

its own bargaining with the Union, it withdrew from the

Association.

The 1973 two-year contract between the

Association and the Union provided that it was to

continue in effect until April 20, 1975. However, "If

either party desires a change in this agreement after

April 30, 1975, they shall notify the other party on or

before February 1, 1975, and both parties shall meet

within 15 days to discuss same." Absent such notice the

contract automatically renewed itself for another year.

On February I11, 1975 the Union sent the

Association a letter (set out in full in the Administrative

Law Judge's Decision, app. 4 and 5 ) stating that the

membership had voted to reopen negotiations and

included a list of the Union's "tentative proposals."

On February 14, 1975 the Association replied and

acknowledged receipt of the Union's letter (set out in full

in the Administrative Law Judge's Decision, app. 5 and

6 ) and stated that this exchange of letters served as the

initial negotiation which the contract requires to take

place prior to February 15, 1975. Also the letter stated

that the Union would be contacted "in order to set a firm

date for the next meeting for bargaining purposes." No

prior meeting ever took place.

On February 27, 1975 the president of The Carvel

Company wrote to the Association and unequivocally

resigned by stating in his first full paragraph, "with much

regret I am submitting my resignation from _ the

Pipefitting Contractors Association." On March 5, 1975

the president of the Association accepted The Carvel

Company's resignation and informed The Carvel

Company that it would not be represented by the

Association.

On March 10, 1975 the Association following its

long-standing practice sent to the Union its list of the

current membership. The petitioner was not on this list.

The Business Agent of the Union acknowledged receiving

this list and noticed the omission of The Carvel Company

and called the president of The Carvel Company, Mr.

Richard Carvel, who then informed the Business Agent of

the withdrawal personally.

The first meeting and the first negotiations

between the Association and the Union actually took

place on April 9, 1975, approximately one month after

The Carvel Company gave written notice of its

withdrawal and the Union received it. In fact, the

Business Agent of the Union, the General Counsel's first

witness, stated in his answers at the trial before the

Administrative Law Judge:

Q. Is it my understanding that the first negotiating

meeting between the parties was held on April 9, 1975 at

the Holiday Inn in Lewiston?

A. Yes.

Q. Is it true that the reasons why negotiations took

place at that date and not earlier was that there was

little plumbing work at the time; you wished to have

more pressure to bear and wait until there was a lot

more plumbing work?

A. True.

Q. Is it correct in the first 10 days of March you

received a list that was dated March 5, of all the

Association members?

A. Yes.

Q. Isn't it Afact that The Carvel Company was not

on that list?

A. Yes.

Q. Isn't it true also that at the first meeting of

April 9, 1975 you were informed by the Association's

bargaining committee that The Carvel Company had

withdrawn from its membership in the Association?

A. Yes.

In fact, nothing was accomplished at even the first

meeting on April 9, 1975 as the Union wanted a one-year

contract and the Association wanted another two-year

contract. This key item was not even requested in the

Union's first letter.

Another member of the negotiating team for the

Union admits that the first negotiating session took place

around April 9, 1975 at Lewiston, Maine. No one stated

otherwise.

On April 30, 1975 the contract with the Association

expired and no new agreement was ratified. Whereupon

the Union went on strike about May 5, 1975 until May 31,

1975 when a new agreement was ratified. During the

period April-May 1975, the Business Agent of the Union

on many occasions negotiated with The Carvel Company

as a "non-member" as can be seen from his answers to

questions.

A. It's my firm recollection that every time I

talked with Mr. Carvel I asked him to sign the contract.

Q. At some point around the strike didn't you try

to negotiate with Mr. Carvel and ask him to sign a letter

of intent?

A. Yes, I did.

Q. Did you ask him if you could get together with

him and try to continue to negotiate the situation?

A. I don't believe I asked him during the strike.

Q. Somewhere in that intermediate period of time,

either before or after?

A. I think it was after.

Q. As a result of seeing the ad did you call Mr.

Carvel again in order to negotiate some sort of deal?

A. I attempted to call him Tuesday | believe. |!

couldn't reach him, I think it was Friday I reached him by

phone.

Q. And you tried to negotiate and discuss this with

him?

A. I did.

REASONS FOR GRANTING THIS WRIT

The question of when an employer should be

permitted to withdraw from a multi-employer bargaining

ie

unit is of crucial importance to labor relations in the

United States.

The initial decision of an employer to join a multi-

employer bargaining unit is a voluntary one. The

decision is based in part on the employer's ability to

withdraw from the unit when he feels that it no longer

serves the desired purpose.

Balanced against this ability to withdraw from the

unit is the need for stability in the bargaining process.

The employer should have sufficient freedom to

withdraw from the unit so that it will not be discouraged

from joining such units, while at the same time, limits

must be imposed upon withdrawing at any time in order

to foster stability in the bargaining process.

The N.U.R.B. first clearly enunciated their rule for

withdrawal from a bargaining unit in dictum in the case

of Retail Associates, Inc. 120 NLRB 388, 41 LRRM 1502

(1958). It was clear in this case that negotiations had

continued for a significant length of time and a

withdrawal by the employer would cause a substantial

disruption in the bargaining process. The Board thus

formulated the rule in their dictum that an employer

could freely withdraw at any time before the start of

actual negotiations.

However, the Board has never defined what it

meant by actual negotiations. A review of the cases by

the Board found that the determination of the timeliness

of withdrawal lacked any consistency and was applied on

an ad hoc basis, Cooks, Waiters and Waitresses Union,

Local 327, 131 NLRB 198 (1961). It is the contention of

the petitioner that the Board erred in finding that it

failed to withdraw before the start of negotiations.

Further, even if one could construe the facts to hold that

negotiations had begun, this would constitute a per se

application of the Retail Associates rule and be to the

detriment of labor relations in the United States.

Petitioner feels it is essential for this Court to

grant a writ of certiorari in this case in order to finally

determine the standards for employer withdrawal from

multi-employer bargaining units. Numerous cases have

been argued in the various courts in connection with the

issue of timely withdrawal. It is believed that if this

Court were to hear this case it would enunciate a

standard that would be clear and thereby foster labor

relations and prevent the massive litigation that has

occurred around this issue.

The petitioner believes that the per se rule

established by the National Labor Relations Board will

discourage employers from participating in multi-

employer bargaining units and will injure labor relations

in the United States. Such a result and without a public

hearing indicates that the Board abused its discretion as

an administrative body. It is, therefore, the petitioner's

request that this Court establish a definitive rule in this

area with proper consideration given to its affect on

American labor relations.

CONCLUSION

For the foregoing reasons, this petition for a writ

of certiorari should be granted.

Respectfully submitted,

: . y

a Lenere hy Lepore

Leonard Kopelman,

Counsel for Petitioner

10 Post Office Square

Boston, MA 02109

(617)482-4515

IN THE SUPREME COURT OF THE UNITED STATES

October Term, 1977

No.

THE CARVEL COMPANY,

Petitioner

vs.

THE NATIONAL LABOR RELATIONS BOARD,

Respondent

APPENDIX

Leonard Kopelman,

Counsel for Petitioner

10 Post Office Square

Boston, MA 02109

(617)482-4515

CHRONOLOGICAL LIST

OF RELEVANT DOCKET ENTRIES

In the Matter of: The Carvel Company

6.25.75

8. 8.75

9. 3.75

9.25.75

9.25.75

11.18.75

11.25.75

12.10.75

12.12.75

4.21.76

5.27.76

5.28.76

9.23.76

Charge filed

Amended Charge filed

Complaint and Notice of Hearing, dated

Answer of C and D Plumbing and Heating

Company, received

Petitioner's Answer, received

Order Rescheduling Hearing, dated

Order Rescheduling Place of Hearing,

dated

Hearing opened

Hearing closed

Administrative Law Judge's Decision issued

General Counsel's Exceptions to Decision

of the Administrative Law Judge, received

Petitioner's Exception, received

Decision and Order issued by the National

Labor Relations Board

ohn

JID-249-76

Portland, ME

UNITED STATES OF AMERICA

BEFORE THE NATIONAL LABOR RELATIONS BOARD

DIVISION OF JUDGES

WASHINGTON, D. C.

THE CARVEL COMPANY AND

C AND D PLUMBING AND HEATING

COMPANY

and Case No. 1-CA-10,813

PLUMBERS, STEAMFITTERS AND

METAL TRADES, LOCAL 321, AFL-CIO

S. Anthony DiCiero, Esq., for

the Genera! Counsel.

Leonard Kopelman, Esq., Boston,

MA, for the Respondent.

James L. McLaughlin, Brewer,

ME, for the Charging Party.

DECISION

Statement of the Case

MELVIN J. WELLES, Administrative Law Judge:

This case was heard at Bangor, Maine, on December 10,

11 and 12, 1975, pursuant to charges filed June 25, 1975,

and amended August 8, 1975, and a complaint issued

September 5, 1975, alleging violations of Section 8(a)(1),

(3) and (5) of the Act. The General Counsel and the

Respondent have filed briefs.

Upon the entire record in the case, including my

observation of the witnesses, I make the following:

Findings of Fact

I. The Business of the Employer and the

Labor Organization Involved

Carvel Corporation is a Maine corporation, with its

principal office and place of business at Portland, Maine,

and does business as a plumbing contractor. In the

course of its business operations, it receives goods and

materials valued in excess of $50,000 directly from

points outside the State of Maine. I find, as Carve!

admits, that it is an employer engaged in commerce

within the meaning of Section 2(6) and (7) of the Act. C

& D Plumbing and Heating Company, herein called C &

D, also a Maine corporation engaged in the piumbing

contractor business, and also having its principal office

in Portland, Maine, is alleged to be engaged in a common

business enterprise with Carvel, and to be a

"continuation and/or alter ego of Carvel." For reasons

that will become apparent subsequently, I make no

finding in this respect, but assume, for purposes of

resolving the issues in this case, that C & D, which is

admittedly wholly owned by Richard Carvel, who owns

the Carvel Company, is under Carvel's. control.

Plumbers, Steamfitters and Metal Trades, Loca! 321,

AFL-CIO, herein called Local 321, is a labor organization

within the meaning of Section 2(5) of the Act.

Il. The Alleged Unfair

Labor Practices

A. The Facts

Respondent Carvel has been a member of the

Pipefitting Contractors Association, Inc., of Maine,

h

herein called the Association, for many years, and as

such a member of a multiemployer bargaining unit and

party to a series of contracts with Local 321. The 1973

contract between the Association and Local 321 provided

that it was to continue in effect until April 30, 1975, but

that "if either party desires a change in this agreement

After April 30, 1975, they shall notify the other party on

or before Feb. 1, 1975, and both parties shall meet within

fifteen days to discuss same." The contract goes on to

state that absent such notice, the contract automatically

renews itself for another year.

On February 11, Union President James McLaughlin

wrote to the Association as follows: 1/

At a Notified Meeting of U.A. Jocal #321,

Bangor, Me. it was voted by majority to re-open

contract negotiations with your organization. The

following tentative proposals were presented for

negotiation, with no changes proposed in the body

of the contract.

Wages - $1.65 per hour increase

Vacation - 5% of negotiated wage

Travel - 22¢ per mile & by employee vehicle 25¢

per mile

Per Diem - $15.00 per day

Apprentice Fund - to 5¢ per hour

1/ Although the letter was addressed to one Omer

Ouelette, as President of the Association, Ouelette

was no longer President, Earl D. Reed had

succeeded him. However, Reed responded to the

Union's letter, so the "error" was of no

consequence. Quelette was, on February 11,

chairman of the’ Association's bargaining

committee.

die

In a conversation with Earle Reed, we agreed

that in lieu of a called meeting at this time, it

would suffice primarily to set forth in a letter, the

desired changes in the contract. We have, by the

way, composed a contract for Supplemental

Housing, Refrigeration etc. for your consideration

and study. We think it will be an asset to our

organization to institute such a contract in this

particular area.

We are ready at any time to sit down with

you and discuss the issues as presented. The

members of our negotiating team are as follows:

David Savage, Local President

Michael Crawford, Appr. Comm.

Everett Pellon, member

Merle Boyer, Local Vice President

Timothy Jacques, member )

Lawrence Hogan, Fin. Sec. )

James McLaughlin, Bus. Agent

alternate

Respectfully yours,

James McLaughlin, B. A.

U. A. Local #321

The Association, on February 14, wrote back as follows:

This acknowledges receipt of your letter

dated February 11, 1975, which listed your

tentative proposals for changes in the present

contract, and which enciosed a copy of your

proposed Supplemental Agreement for Residential

Housing and similar work.

This also confirms our understanding that this

exchange of letters serves as the initial negotiation

which the contract requires to take place prior to

February 15th.

Your tentative proposals will be presented to

our Committee, and we will contact you in order to

set a firm date for the next meeting for bargaining

purposes.

The Chairman ot our Bargaining Committee

is Roger Ouellette, and the member in your area is

Ken Nelson of Paul A. Lawrence. In order to make

it easier for you, any communication with Ken will

serve as a communication with the Association and

vice versa.

Very truly yours,

Earle D. Reed

President

On February 27, Richard Carvel wrote to Reed,

submitting the resignation of Carvel Company from the

Association, which letter was acknowledged, and the

resignation accepted, on March 5, by President Earle

Reed. On March 10, Reed wrote to Local 321,

forwarding a list of the current members of the

Association. Carvel was not on this list, nor was C & D

or any other company affiliated with Carvel in any way.

McLaughlin acknowledged having received this letter,

and noticing the omission of Carvel from the list of

members. He then, a day or two later, called Richard

Carvel, asked him why his company was not on the list,

and was told that the Company was no longer affiliated

with the Association, but that he would "pay the wages,

fringes, and so forth, but he wouldn't sign a contract with

the union."

The first actual meeting between the Association

and Local 321 for the purpose of negotiating a new

agreement took place April 9. McLaughlin testified that

the first session took place that late because there was

little plumbing work earlier, and he wanted to be able to

bring more pressure to bear at a time when plumbing

work was up. After the contract expired, and with no

new contract then having been agreed upon, Local 321

went on strike, the strike beginning about May 5. The

five employees working for Carvel at an Addison, Maine

elementary school job where the general contractor was

Nickerson & O'Day went out on strike, along with all

other Local 321 members in the entire area. These five

employees were Edward Pellon, David Savage, George

Armstrong, Richard Faulkner, and Everett Pellon. The

strike lasted until about May 31, when the membership

ratified a new contract.

Work continued on the Addison school project, as

no other craft went on strike. After May 5, Richard

Carvel made a number of inquiries of McLaughlin, and

also spoke to employees Ed Pellon and Everett Pellon,

concerning when the strike might be over. He was told a

number of times that ratification of the contract was

"expected" soon. About the middie of May, Richard

Carvel specifically told Robert Chase, treasurer of

Nickerson & O'Day, that the strike was expected to end

in a matter of a few days, and the men would go back to

work at once.

According to Carvel, about the third week of the

strike, when Chase told Carvel he could not want any

longer, Carvel asked Chase to “hold out for another

week." Chase's testimony does not precisely confirm

Carvel's. Chase did testify that Carvel, at that time,

told him "that the strike would be expected to end in a

matter of a few days at the most and that the men would

be back to work immediately," but when asked "Was your

company asked to keep Carvel Company on?" he replied

"I really don't think we were asked to, specifically, but

we had no intentions of doing otherwise until maybe

about the 20th, when it became obvious that things still

hadn't ended and it was still going on, and we were

getting more and more in a bind for some work down

there, that we finally decided that we've got to try to do

something else." It is clear that the import of Carvel

telling Chase that the strike would be over soon and the

men would be back immediately was that Carvel wanted

to keep the work for Carvel Company. As Chase put it

in his testimony, he was "not taking that (the prediction

that the strike would end soon) for an answer any more.

It just wasn't a good enough answer for us."

It was about May 20 or so that Chase began

"aggressively" to seek a replacement for Carvel, because

of penalty clauses in its contract, and because of its

"reputation," which would be affected if the project were

not finished on time. Chase spoke with Richard Carvel,

and with Carvel's general superintendent, Walter

Butchart, asking if they knew anyone Nickerson & O'Day

could get to do the job, and also talked with several

other plumbing contractors in the area. The others

(Maynard Lane and Robert Morin) both told Chase they

already had too much work to do. Richard Carvel

suggested that C & D could do the work, telling Chase

that Dow (President of C & D) had been a superintendent

for Carvel at one time, and that he knew Dow to be a

reliable person, but not telling Chase that he (Richard

Carvel) owned C & D.

About May 27, Everett Pellon, one of Carvel's

employees, who was also on Local 321's negotiating

committee, told Carvel that he thought the contract

would be ratified the following Saturday. Also on

Tuesday, May 27, Carvel called employee Ed Pellon, and

asked Pellon to use his influence to get the members of

Local 321 to ratify the contract at a union meeting the

next night, telling Pellon “we have to get back on that

job."

In fact the contract was ratified at a Local 321

meeting on Saturday, May 31. Ed Pellon told Richard

Carvel on Sunday, June 1, of the ratification, but Carvel

said that the job had been "taken away from us," that a

"nonunion job contractor will be on the job site in the

morning." Carvel also told Pellon to "secure the job." In

the meantime, about May 27, Byron Dow had received a

call from Chase asking him whether he would be

interested in taking over and completing the Addison job.

Dow went to Chase's office, and after looking over the

blueprints, told Chase that C & D would go up and do the

job. At Dow's request, Chase, on May 28, sent a letter to

C & D, referring to the Addison job, and stating:

Because of the inability of the Carvel

Company to man this job, Nickerson & O'Day is

taking over the Plumbing and Piping labor on this

project and reassigning this labor to C &

Plumbing and Heating Company as of this date.

C & D Plumbing & Heating will requisition

monthly the value of work performed during the

past month such requisitions to be submitted

directly to us. We, in turn, will backcharge these

items against Carvel Company on a net basis.

If there are any questions, please call the

writer at any time.

Monday morning, June 2, Carvel's employees came

to the job, having been directed to do so by the Union's

business agent. Ed Pellon spoke with Chase about 10:45

a.m. or so to inquire about "what was going on."

According to Pellon, Chase said that he wished Pellon

had told him on Friday. (Obviously, he could not have

told him definitely, as the contract was not ratified until

Saturday.) Shortly afterward, one of Nickerson & O'Day's

officials told the Carvel employees they were no longer

on the job. The employees then left the job, and the next

day C & D employees took over. According to Chase, he

told Ed Pellon, when the latter said that the men were

back at work, "I'm sorry. The middle of last week we

-10-

decided that something else was going to happen and you

are going to have to pick up your tools and leave."

In addition to the above facts, there was

considerable evidence introduced at the _ hearing

concerning the relationship between Carvel Company and

C & D Company, as well as evidence concerning a "Carco

Company," and its connection with the other two

companies. As noted above, Carvel does own both

Carvel Company and C & D Company, and for purposes

of deciding this case, | am assuming he completely

controls both companies. The evidence concerning Carco

is not, in my opinion, germane to the issues herein as

they have developed.

The evidence also shows that Richard Carvel

offered the men who had worked on the Addison job for

Carvel Company work on other Carvel Company jobs.

The two employees who testified, Everett and Ed Pellon,

confirmed this. In fact, Everett Pellon did go to work at

Brewer, Maine, for Carvel. He was subsequently, he

testified, pulled off the job by the Union's business agent

because the Union did not have a signed contract with

Carvel. Ed Pellon was offered a "supervisory" job with

Carvel.

B. Discussion

1. The alleged refusal to bargain

The General Counsel's theory of the refusal to

bargain allegation, as stated at the hearing and in his

brief, is to the effect that "negotiations" for a new

ie.

contract between the Association and Local 321 began on

February 15, so that Carvel Company's withdrawal from

the Association on February 27, was untimely under the

Board's Retail Associates (120 NLRB 388) rule.

Respondent claims that "negotiations" within the

meaning of Retail Associates did not occur until the first

meeting between the parties, which occurred April 9, so

that Carvel’s February 27 withdrawal from _ the

Association, when coupled with the Union's admitted

knowledge, by about March 10, of such withdrawal, was

prior to bargaining negotiations and therefore effective

and timely. In Retail Associates, the Board set forth the

"rule" in the following dictum:

We would accordingly refuse to permit the

withdrawal of an employer or a union from a duly

established multiemployer bargaining unit, except

upon adequate written notice given prior to the

date set by the contract for modification, or to the

agreed-upon date to begin the multiemployer

negotiations. Where actual bargaining negotiations

based on the existing multiemployer unit have

begun, we would not permit, except on mutual

consent, an abandonment of the unit upon which

each side has comitted itself to the other, absent

unusual circumstances.

The rule as stated suggests that the contract's

provisions, as well as "actual bargaining negotiations,"

are significant to a determination of whether a

withdrawal is timely. A careful review of subsequent

cases involving the Retail Associates rule does not reveal

any where a withdrawal was viewed as untimely when

made prior to the start of actual bargaining negotiations,

oid.

although no case has been found defining those words. In

the light of the Genera! Counsel's theory here, and the

lack of any definitive authority other than the Retail

Associates dictum for viewing either the contract's

automatic renewal date (February | here), or the date

set by the contract for negotiations (February 15 here) as

cutoff date for effective withdrawal, | am constrained to

find no violation of Section 8{a)(5) in this case. The

Union itself was late in seeking modification of the

contract herein; despite the February | contract date, it

did not write the Association until February il. The

Association's reply, on February 14, stated, as set forth

above, that the "exchange of letters serves as the initial

negotiation which the contract requires to take place

prior to February 15th." In the circumstances, Carvel

would have had every right to believe, with the passing

of the February | date, that the old contract was

automatically renewed. Had it been, and had Carvel

then refused to sign it for its renewal year, there would

have been a clear violation, not affected by the

subsequent (to the contract's presumed renewal)

withdrawal by Carvel from the Association. But here,

the Union and the Association were each, in effect,

waiving the contract's provisions with respect to the date

for modifying the contract and negotiating a new

contract.

In these circumstances, in my view, the only

operative date against which to determine the timeliness

-13-

of a withdrawal from the Association must be the date

on which actual negotiations began, and that date is

April 9. I cannot view the statement in the Association's

letter that the letters themselves constituted

"negotiations" as really being negotiations within the

meaning of the Board's rule. Accordingly, Carvel was

not obliged to sign the contract ultimately negotiated

between Local 321 and the Association, having

effectively withdrawn from the Association and the

multiemployer unit on February 27.

The General Counsel's brief states that "Even

assuming that Carvel had the right and did in fact make

a timely withdrawal from the Association, it is still

obligated to bargain with the Union. The record is clear

that even in this regard, Carvel has stated that it would

only pay the wages and fringe benefits but would not

agree to any other matters. On this point alone, a

bargaining order is appropriate.” It was not my

understanding at the hearing that the General Counsel

was litigating this theory, which is not the theory of the

complaint. Nor is it clear on the record that there was

any refusal by Carvel to negotiate individually with the

Union. The statement by Carvel referred to in the

General Counsel's brief was not in a context of

"individual negotiations," but rather in terms of what

Carvel would go along with in terms of the agreement

reached between the Association (of which Carvel was no

longer a member) and Local 321. Manifestly, the "issue"

-14-

suggested by the Genera! Counsel in this respect was not

in any sense "fully litigated." Accordingly, | make no

findings in this regard.

2. The alleged 8(a)(3) violations

The General Counsel's theory of the alleged

discriminatory discharge allegations respecting Carvel's

five employees is that Richard Carvel "orchestrated"

Nickerson & O'Day's "fears" that the Union's strike would

not be over for a long time; that the penalty clause of

Nickerson & O'Day's contract would be invoked against

it, and that Carvel had nothing to lose by Nickerson &

O'Day's "decision," as the contract went to C & D, wholly

owned by Richard Carvel, so that the "only losers" would

be the Union and the five union member-employees. The

General Counsel contends that Carvel, during the week

preceding Local! 321's ratification of the contract and the

consequent end of the strike, deliberately withheld from

Nickerson & O'Day's representatives the knowledge he

(Carvel) had that the contract would soon be ratified,

"knowledge" he had obtained from Ed Pellon, Everett

Pellon and James McLaughlin.

It is true that during the last few days, Richard

Carvel might well have done more to persuade Chase, of

Nickerson & O'Day, not to take the work away from

Carvel Company. It is also true that perhaps Richard

Carvel had no great incentive at this point to try to undo

the assignment of the work to C & D, for he did own C &

D. Neither of these facts, however, demonstrates that

15.

Richard Carvel's motivation was at any stage invidious,

that he took, or refrained from taking, any action for the

purpose of ridding himself of "union" employees. Carvel

had been receiving assurances all along that the strike

would end "soon." He had attempted, successfully, to

persuade Chase not to take steps to replace Carvel

Company when Chase questioned him about the duration

of the strike. He had even, as late as Tuesday, May 27,

tried to get Everett Pellon to push through a union

ratification of the contract on the very next day,

although he already knew that Chase had made plans to

replace Carvel Company, and that the replacement

would likely be C & D. Earlier, of course, Richard

Carvel had every reason to keep assuring Chase, as he

did, that the strike would soon be over, for earlier, there

was no way of knowing that Carvel's company, C & D,

would get the job.

Indeed, Chase's testimony demonstrates that but

for their being too busy, one or the other of two

plumbing contractors Chase contacted when he became

convinced that the ending of the strike was too

unpredictable to continue without a plumbing contractor

on the job, would have received the work formerly done

by Carvel Company employees. Furthermore, Carvel

offered all Carvel Company employees at Addison jobs at

other Carvel locations, again demonstrating that there

was no "animus" toward these union members. Perhaps,

although this is entirely speculative, had Richard Carvel

-16-

transmitted to Nickerson & O'Day the latest "prediction"

from the Pellons as to the imminent end of the strike,

Chase might have kept Carvel Company on the job

despite the commitment to C & 1D. But he also, and

based on his testimony this seems more probable, might

have regarded these "predictions" as no different from

the earlier predictions, and that this was no longer "a

good answer." Carvel may well by this time, as

Suggested by the General Counsel, have felt an

indifference because he personally had "nothing to lose."

2/ This still would not make Nickerson & O'Day's action

that of Carvel.

In sum, the record as a whole does not permit the

finding that Carvel discriminatorily discharged its

employees. The General Counsel has not demonstrated

that Carvel was responsible for the men losing their jobs

at the Addison project, nor has the Genera! Counsel

demonstrated (assuming arguendo) Carvel's

"responsibility" by "inaction" any unlawful motivation on

Carvel's part. For all the foregoing reasons, I conclude

that the General Counsel has not established a violation

of Section 8(a)(3) of the Act.

27 ~The Company argues to the contrary in its brief;

that Carvel did have "something to lose." I make

no finding one way or the other, I am merely

assuming the General Counsel's position in this

respect to be the case in order to consider his

argument in its best posture.

-]7-

Conclusions of Law

Respondent has not engaged in any conduct

violative of the Act.

Upon the foregoing findings of fact, conclusions of

law, and the entire record, and pursuant to Section 10(c)

of the Act, I hereby issue the following recommended:

3/

ORDER

The complaint is dismissed in its entirely.

Dated at Washington, D. C.

Melvin J. Welles

Administrative Law Judge

3) In the event no exceptions are filed as provided by

Section 102.46 of the Rules and Regulations of the

National Labor Relations Board, the findings,

conclusions, and recommended Order herein shall,

as provided in Section 102.48 of the Rules and

Regulations, be adopted by the Board and become

its findings, conclusions, and order, and ail

objections thereto shall be deemed waived for all

purposes.

-18-

226 NLRB No. 18 MFIPW

D--1637

Portland, Maine

UNITED STATES OF AMERICA

BEFORE THE NATIONAL LABOR RELATIONS BOARD

THE CARVEL COMPANY AND C AND

D PLUMBING AND HEATING COMPANY

and Case 1-CA-10813

PLUMBERS, STEAMFITTERS AND METAL

TRADES, LOCAL 321, AFL-CIO

DECISION AND ORDER

On April 21, 1976, Administrative Law Judge

Melvin J. Welles issued the attached Decision in this

proceeding. Thereafter, Respondent filed an exception

and a brief in support of the Administrative Law Judge's

Decision and the single exception, and the General

Counsel filed exceptions and a supporting brief.

The Board has considered the record and the

attached Decisionin light of the exceptions and briefs

and has decided to affirm the rulings, findings,

conclusions, and recommendations of the Administrative

Law Judge only to the extent consistent herewith.

1. The complaint alleges that Respondent Carvel

Company, herein called Carvel, and Respondent C and D

Plumbing and Heating Company, herein called C and D,

constitute a single employer under the Act; that Carvel

violated Section 8(a)(5) of the Act by its refusal to sign

the 1975 collective-bargaining agreement negotiated

-19-

between the Union and a multiemployer association, and

by substituting C and D as the plumbing contractor on

the Addison, Maine, construction site for the purpose of

avoiding its bargaining obligation with the Union; and

that Carvel violated Section 8(a)(3) of the Act by

discriminatorily discharging its employees working on the

Addison project. .

For the purposes of his Decision, the

Administrative Law Judge assumed that Carvel and C

and D constitute a single employer, but nevertheless

concluded that no violation of the Act had been

established. Therefore, he recommended dismissal of the

complaint in its entirety without making a specific

finding on the single employer issue. As set forth infra,

we find, contrary to the Administrative Law Judge, that

Carvel's refusal to sign the _ collective-bargaining

agreement was violative of Section 8(a)(5) because its

withdrawal from multiemployer bargaining was not

timely. Thus, our disposition of the case requires us to

pass on the single employer question in order to

determine whether both Carvel and C and D are

obligated to sign the agreement. For the reasons set

torth below, we find that Carvel and C and D are

separate employers under the Act.

Richard Carvel, president of Carvel Company,

owns 90 percent of the outstanding Carvel stock, while

his sister owns the remaining 10 percent. Richard Carvel

also owns all of the stock of C and D. Thus, the record

establishes common ownership, but that factor is not

-20-

determinative in the absence of common control of labor

relations policies. 1 Furthermore, "such common

control must be actual or active, as distinguished from

2/

interrelation of operations and common management.

potential control." Other factors to be considered are

The record reveals that C and D is a separate legal

entity with separate bank and payroll accounts, and

separate lines of credit. Management of C and D is

vested in Byron Dow who is president, treasurer, and

general manager. Regarding labor relations policies, the

record shows that C and D employees are hired by Dow

or a foreman under his control, while Carvel employees

are hired by Carvel foremen. Dow controls the day-to-

day labor relations of C and D. In addition, there are no

joint employees of Carvel and C and D, and there is no

temporary interchange of employees. Thus there are

different job estimators and job superintendents for each

company.

Although both companies do business as plumbing

contractors, they submit separate job bids and do not

compete for the same jobs. Carvel's contracts involve a

higher dollar volume than those of C and D. Carvel has

an employee complement of 30 to 50; C and D has only 9.

On the basis of the foregoing and the record as a

whole, we find that Richard Carvel, by virtue of his

I7 Gerace Construction, Inc. and Helger Construction

Company, Inc., 193 NLRB 645 (1971).

2/ Id.

-2l-

status as sole stockholder, has potential control over C

and D's operations, but that actual control over labor

relations policies and day-to-day operations lies with C

and D's president, Byron Dow. Accordingly, we conclude

that Carvel and C and D constitute separate employers

under the Act.

2. The Administrative Law Judge found that

Carvel's withdrawal from the multiemployer bargaining

unit was timely and effective under the Board's Retain

3/

Associates rule, — and therefore Carvel did not violate

Section 8(a)(5) of the Act by refusing to sign the contract

ultimately negotiated. We disagree.

In sum, the facts are as follows. For many years,

Carvel has been a member of the Pipefitting Contractors

Association, Inc., of Maine, herein called the

Association, and, as such, a member of the

multiemployer bargaining unit and party to a series of

contracts with the Union. The 1973 contract between

the Association and the Union provided that it was to

continue in effect until April 30, 1975, 4/ but that "(i)f

either party desires a change in this agreement after

April 30, 1975 they shall notify the other party on or

before Feb. 1, 1975 and both parties shall meet within

fifteen days to discuss same." Absent such notice, the

contract automatically renewed itself for another year.

Prior to the February | automatic renewal date,

37‘ Retail Associates, Inc., 120 NLRB 388, 395 (1958).

4/ All dates herein are in 1975 unless otherwise

indicated.

22.

Union President James McLaughlin orally advised the

Association that the Union wished to reopen contract

negotiations. On February 11, the Union sent the

Association a letter whose terms are fully set forth in

the Administrative Law Judge's Decision. In brief, this

letter stated that the membership had voted to reopen

negotiations and included a list of the Union's tentative

proposals. In reference to the earlier. oral

communication with the Association, the Union stated

that it was “agreed that in lieu of a called meeting at

this time, it would suffice primarily to set forth in a

letter, the desired changes in the contract."

The Association replied on February 14,

acknowledging receipt of the Union's tentative proposals

and stating that "this exchange of letters serves as the

initial (sic) negotiation which the contract requires to

take place prior to February 15th." In closing, the letter

stated that the Union would be contacted "in order to set

a firm date for the next meeting for bargaining

purposes."

On February 27, the resignation of Carvel Company

was submitted to the Association, and on March 5 the

resignation was accepted. Shortly thereafter, the Union

was informed of Carvel's withdrawal from the

Association. The first actual meeting between the

Association and the Union for the purpose of negotiating

a new agreement occurred on April 9.

After the contract expired, and with no new

contract having been agreed upon, the Union commenced

-23-

a strike beginning about May 5. The strike lasted until

May 31 when the membership ratified a new agreement,

effective from May 1, 1975, to April 30, 1977. Carvel

has refused to sign the new contract negotiated by the

Association and the Union. While there is some

testimony in therecord that Carvel stated that it would

"pay the wages, fringes and so forth," there is no

evidence that it has done so or has implemented the

other terms and conditions of the agreement.

In Retail Associates, supra, the Board set forth the

rules governing the withdrawal of an employer or a union

from multiemployer bargaining. An employer may

withdraw without the union's consent prior to the start of

bargaining by giving unequivocal notice of the intent to

abandon the multiemployer unit and to _ pursue

negotiations on an individual employer basis. However,

once negotiations have actually begun, withdrawal can

only be effectuated on the basis of "mutual consent" or

"unusual circumstances."

We disagree with the Administrative Law Judge's

finding that "negotiations" within the meaning of the

Board's rule did not begin until the parties' first meeting

on April 9, and that therefore Carvel's withdrawal was

timely and effective. Here, prior to the February |

renewal date, the Union orally informed the Association

of its intent to reopen the contract, and subsequently

submitted a list of its bargaining proposals. On February

14, the Association informed the Union that it had

received those proposals and acknowledged that the

-24-

process of reopening the contract had begun. Under

these circumstances, to hold, as did the Administrative

Law Judge, that Carvel's subsequent withdrawal was

timely, even though it occurred after the disclosure to

the Association of the Union's bargaining demands, would

be contrary to the purpose of the Retail Associates rule

of “fostering and maintaining stability in bargaining

5/

relationships." = For, an employer would thus be

permitted to withdraw "in the hope of obtaining, through

separate negotiations, more favorable contract terms

than those which are foreshadowed" by the Union's

proposals. 6/ The rule, however, is designed precisely to

prevent such a "disruption of the multiemployer group

via a race for bargaining leverage." 2/

In view of the foregoing, we conclude that

"negotiations" within the meaning of the Retail

Associates rule commenced at the latest on February 14,

Carvel's subsequent withdrawal from multiemployer

bargaining was untimely, and therefore Carvel violated

Section 8(a)(5) and (1) of the Act by its refusal to adopt

the agreement reached between the Association and the

5] 120 NLRB at 393.

6/ Mor Paskesz, 171 NLRB 116, 118 (1968), enfd. 405

F.2d 1201 (C.A. 2, 1969).

7/ Id.

-25-

Union. 8/ As we have found that Carvel and C and D are

separate employers under the Act, the obligation to sign

the contract negotiated between the Union and the

Association lies only with Carvel, and we shall order that

it take such action.

3. For the reasons set forth in his Decision, we

agree with the Administrative Law Judge's dismissal of

the complaint allegation that Respondent Carvel violated

Section 8(a)(3) of the Act by discriminatorily discharging

its employees working on the Addison, Maine,

construction site. In addition, as we have found that

Carvel and C and D are separate employers, we shall

dismiss the complaint insofar as it alleges that Carvel

unlawfully substituted C and D as the plumbing

8/ We find no merit in Respondent's contention that

7 the Union consented to Carvel's withdrawal. The

Union's failure to immediately object to the

withdrawal, standing alone, is insufficient to

establish acquiescence. See N.L.R.B. v. John J.

Corbett Press, Inc., 401 F.2d 673, 675 (C.A. 2,

1968), enfg. 163 NLRB 154 (1967). Although in a

letter dated’ June 9 the Union inquired as to

whether Carvel wished to sign the contract as a

"non member," the letter specifically reserved the

"right of either party to exercise their rights in the

event of failure to reach an agreement."

Furthermore, the Union never abandoned its

insistence that Carvel accept the Association

contract and at no time did the Union indicate to

Carvel a willingness to negotiate terms different

from those agreed upon with the Association. See

I C. Refrigeration Service, Inc., 200 NLRB 687,

690 (1972). For those reasons, Respondent's

reliance on Atlas Sheet Metal Workers, Inc., 148

NLRB 27 (1964), is clearly misplaced.

-26-

contractor on the Addison project in order to avoid

Carvel's bargaining obligation with the Union.

Conclusions of Law

1. Carvel and C ar’ 5) are separate employers

within the meaning of Section 2(2) of the Act.

2. Respondent Carvel is engaged in commerce

within the meaning of Section 2(6) and (7) of the Act.

3. The Union is a labor organization within the

meaning of Section 2(5) of the Act.

4. The Union is, and has been at al! material times,

the exclusive bargaining representative of the employees

of Respondent Carvel in the following appropriate unit:

All journeymen and apprentices of the plumbing

and pipefitting industry employed by members of

the Association; excluding all other employees,

guards, and supervisors as defined in the Act.

5. By its refusal to adopt the agreement reached

between the Association and the Union, and by its refusal

to give effect to the terms and conditions contained

therein, Respondent engaged in and is engaging in unfair

labor practices within the meaning of Section 8(a)(5) and

(1) of the Act.

6. The aforesaid unfair labor practices affect

commerce within the meaning of Section 2(6) and (7) of

the Act.

The Remedy

Having found that Respondent Carvel has engaged

in certain unfair labor practices, we shall order it to

cease and desist therefrom and take certain affirmative

action that we find necessary to effectuate the policies

-27-

of the Act.

ORDER

Pursuant to Section 10(c) of the National Labor

Relations Act, as amended, the National Labor Relations

Board hereby orders that the Respondent, The Carvel

Company, Portland, Maine, its officers, agents,

successors, and assigns, shall:

1. Cease and desist from:

(a) Refusing to bargain collectively with Plumbers,

Steamfitters and Metal Trades, Local 321, AFL-CIO, as

the exclusive bargaining representative of its employees

in the appropriate unit described herein.

(b) Refusing to sign and to implement the 1975-77

contract between the Union and the Pipefitting

Contractors Association, Inc., of Maine with respect to

its employees in the appropriate unit described herein.

(c) In any like or related manner interfering with,

restraining, or coercing employees in the exercise of

their rights under the National Labor Relations Act, as

amended.

2. Take the following affirmative action which will

effectuate the policies of the Act:

(a) Forthwith sign and implement the 1975-77

contract between the Union and the Association insofar

as it applies to employees of Respondent in the described

unit, and give retroactive effect thereto from its

effective date in 1975.

(b) Make whole its employees in the aforesaid

bargaining unit for any loss of pay or other employment

-28-

benefits they may have suffered by reason of

Respondent's refusal to sign and to implement the

aforesaid collective-bargaining agreement between the

Union and the Association. Backpay is to be computed in

a manner consistent with Board policy as set forth in F.

W. Woolworth Company, 90 NLRB 289 (1950), with

interest thereon at the rate of 6 percent per annum as

set forth in Isis Plumbing & Heating Co., 138 NLRB 716

(1962).

(c) Preserve and, upon request, make available to

the Board or its agents, for examination and copying, all

payroll records, social security payment records,

timecards, personnel records and reports, and all other

records necessary to analyze the amount of backpay due

under the terms of this Order.

(d) Post at its place of business in Portland, Maine,

copies of the attached notice marked "Appendix." 9/

Copies of said notice, on forms provided by the Regional

Director for Region 1, after being duly signed by

Respondent's representative, shall be posted by

Respondent immediately upon receipt thereof, and be

maintained by it for 60 consecutive days thereafter, in

conspicuous places, including all places where notices to

397 In the event that this Order is enforced by a

Judgment of a United States Court of Appeals, the

words in the notice reading "POSTED BY ORDER

OF THE NATIONAL LABOR RELATIONS BOARD"

shall read "POSTED PURSUANT TO A JUDGMENT

OF THE UNITED STATES COURT OF APPEALS

ENFORCING AN ORDER OF THE NATIONAL

LABOR RELATIONS BOARD."

-29-

employees are customarily posted. Reasonable steps

shall be taken by Responder to insure that said notices

are not altered, defaced, or covered by any other

material.

(e) Notify the Regional Director for Region 1, in

writing, within 20 days from the date of this Order, what

steps the Respondent has taken to comply herewith.

IT IS FURTHER ORDERED that the complaint be,

and it hereby is, dismissed insofar as it alleges violations

not found herein.

Dated, Washington, D. C. September 23, 1976.

Betty Southard Murphy, Chairman

John H. Fanning, Member

Howard Jenkins, Jr., Member

John A. Penello, Member

Peter D. Walther, Member

NATIONAL LABOR RELATIONS BOARD

(SEAL)

-30-

APPENDIX

NOTICE TO EMPLOYEES

Posted by Order of the

National Labor Relations Board

An Agency of the Unitéd States Government

WE WILL NOT refuse to bargain with Plumbers,

Steamfitters and Metal Trades, Local 321, AFL-CIO, by

refusing to sign and to implement the 1975-77 contract

between the Union and the Pipefitting Contractors

Association, Inc., of Maine.

WE WILL NOT in any like or related manner

interfere with, restrain, or coerce our employees in the

exercise of their rights under the National Labor

Relations Act, as amended.

WE WILL forthwith sign and implement the 1975-77

contract between the Union and the Association and give

retroactive effect thereto, from its effective date in

1975.

WE WILL make whole our employees in the

bargaining unit for any loss of pay or other employment

benefits they may have suffered by reason of our refusal

to sign and to implement the aforesaid collective-

bargaining agreement between the Union and the

Association.

THE CARVEL COMPANY

(Employer)

Dated By

(Representative) (Title)

This is an official notice and must not be defaced

by anyone.

This notice must remain posted for 60 consecutive

days from the date of posting and must not be altered,

defaced, or covered by any other material. Any

questions concerning this notice or compliance with its

provisions may be directed to the Board's Office,

Keystone Building, 12th Floor, 99 High Street, Boston,

Massachusetts 02110, Telephone 617-223-3348.

-3|-

United States Court of Appeals

for the First Circuit

No. 76-1490

: THE CARVEL COMPANY,

PETITIONER,

v.

NATIONAL LABOR RELATIONS BOARD,

RESPONDENT.

ON PETITION FOR REVIEW AND CROSS-APPLICATION FOR

ENFORCEMENT OF AN ORDER OF THE NATIONAL LABOR

RELATIONS BOARD

Berore Corrin, Chief Judge,

CaMPBELL, Circuit Judge, and

Doo.ina, District Judge*

Leonard Kopelman for petitioner.

Joscph Novelli, Attorney, with whom John S. Irving, Geueral Counsel, John

E. Higgins, Jr., Deputy General Counsel, Carl L. Taylor, Associate General

Counsel, Elhott Moore, Deputy Associate General Counsel, and Robert Sewell,

Attorney, were on brief, for respondent.

September 1, 1977

Doorine, District Judge. The Carvel Company petitions

to set aside an order of the National Labor Relations Board

which required Carvel forthwith to sign and implement the

1975-1977 contract negotiated between Local No. 321 of

the Plumbers, Steamfitters and Metal Trades, AFT.-CIO,

. and the Pipefitting Contractors Association, Ine., of Maine,

and the Board cross-petitions for enforcement of the order.

* Of the Eastern District of New York, sitting by designation.

-32~-

CARVEL CO, V. NLKB

The Board based its order on its finding that Carvel’s with-

drawal from the multiemployer bargaining that emanated

in the contract took place only after negotiations had com-

menced, that the withdrawal was therefore untimely, and

that, in consequence, Carvel’s refusal to adopt the contract

reached hetween the Pipefitting Contractors Association

and Local No, 321 was an unfair labor practice under Sec-

tion 8(a)(5) and (1) of the National Labor Relations Act,

as amended, 29 U.S.C. 158 (a)(5) and (1). Carvel contends

that negotiations did not in fact commence until over a

month after it submitted its resignation from the Pipe-

fitting Contractors Association, that the Board misinter-

preted and misapplied the rule limiting the cmployer’s

power to withdraw from multiemployer bargaining, and

that, even if its withdrawal was untimely, a later impasse

in the multiemployer bargaining, and the Local’s condona-

tion of the withdrawal, relieved Carvel of the consequences

of its untimely withdrawal. The appeal would test the

boundaries of the Board’s ‘‘Retail Associates doctrine’’

(1958 120 NILRB 388).

Petitioner Carvel had for many years been a member of

the Pipefitting Contractors Association, and that Associa-

tion liad for about twenty years negotiated contracts for

its membership with Local 321. The two year contract be-

tween the Association (representing Carvel among other

member firms) and Local 321 covering the 1973-1975 period

provided

“THIS AGREEMENT... is to continue through

the period from May 1, 1973 to April 30, 1975. If either

party desires a change in this agreement after April

30, 1975 they shall notify the other party on or before

Feb, 1, 1975 and both parties shall meet within fifteen

days to discuss same.

BEST COPY AVAILABLE i

OPINION OF TIIE COURT

“Tf no such notice is given, the Agreement shall re-

iain in effect until April 30, 1976 and shall remain in

effect on a year to year basis thereafter until such

notification is made.”’

The contract provided that Local 321 was recognized as

the sole and exclusive agency and representative of the em-

ployees covered by the contract for collective bargaining

purposes, and that the Association was recognized as the

sole and exclusive bargaining agent for all ‘‘mployers

of the members of Local No. 321.”’

The business manager of Local 321 telephoned the presi-

dent of the Association before Febrvary 1, 1975, and in-

quired (for he had not handled earlier negotiations) about

the normal procedure for initiating negotiations. Informed

that it was done by letter, Local 321 on February 11, 1975,

sent a letter to ‘he Association advising that the Local had

voted to reopen contract negotiations, and tentatively pro-

posing a wage increase of $1.65 an hour and other changes

in contract terms. The letter continued:

‘‘In a conversation with Earle Reed [the president

of the Association], we agreed that in lieu of a called

meeting at this time, it would suffice primarily to set

forth in a letter, the desired changes in the contract....

‘‘We are ready at any time to sit down with you and

discuss the issues as presented.’’

It appears that before February 1st the Local’s business

manager had filed ‘‘the appropriate papers with the Federal

mediation and State mediation Boards.’’ The Association

answered the Local’s letter on February 14, 1975, saying,

“This acknowledges receipt of your letter dated

February 11, 1975, which listed your tentative pro-

posals for changes in the present contract... .

-34-

CARVEL CO, UV. NLRB

‘This also confirms our understanding that this ex-

change of letters serves as the initial negotiation which

the contract requires to take place prior to February

15th.

‘Your tentative proposals will be presented to our

Committee, and we will contact you in order to set a

firm date for the next meeting for bargaining pur-

poses.”’

On February 27, 1975, Carvel wrote the president of the

Association stating that

‘‘With much regret, I am submitting my resignation

from the Pipe Fitting Contractors Association ... .

‘*. . . This decision is not the result of any pressure

from cither fellow contractors or any of the Locals, but

rather a decision of my own choosing.’’

On March Sth the Association acknowledged receipt of

Carvel’s letter

‘*. . . containing your resignation from this Associa-

tion, which is hereby accepted with regret.

‘Following a regularly scheduled meeting to be held

on March 7th, the Association will furnish the three

Maine U.A.Locals with a current listing of Associa-

tion members, as required by our Jabor contracts with

the Locals. As a result of your resignation your name

will not appear on this listing, and you will not be

represented by the Association in future bargaining

with these three Locals.’’

The Association sent the current membership roster of the

Association, dated March 5, 1975, to Local 321 on March

10, 1975; Carvel was not listed as a member. Shortly after

receiving the list the Local’s business manager asked

Carvel’s president why Carvel’s name was not listed, and

-35-

OPINION OF THE COURT

he was told that Carvel was no longer affiliated with the

Association but that Carvel would pay the wages, fringes

and so forth, but would not sign a contract with the Union.

The first face-to-face mecting between the Association

and Local 321 took place on April 9, 1975. (Asked whether

‘*the urst negotiating meeting between the parties was held

on April 9, 1975"’ the Local’s business manager ineautiously

answered, ‘*Yes.’’) The evidence was that the Local de-

ferred the meeting until the pressure of ‘‘a lot more plumb-

ing work’ could be brought to bear on the employers. At

the first meeting the Union insisted on a one year contract

and the Association on a two year contract. Whien this had

heen brought out, the examination of the business agent,

by Carvel’s counsel, continued,

‘*Q There was an impasse, wasn’t there?

A Yes.”’

Three sessions were held in April without reaching any

agreement, and on May 6th the membership of Local 321

turned down the Association’s offer and voted to strike.

The strike continued until May 31st, when the membership

of Local $21 ratified a new contract for the two year period

May 1, 1975, to April 30, 1977. That contract followed two

further negotiation sessions during May. During the strike

period the Local’s business manager asked Carvel to sign

such a letter-of-intent as non-members of the Association

sien to give assurance that they will conform to the multi-

employer contract retroactively to its effective date. Carvel

declined to sign such a letter. Efforts were made after the

~trike to reach some agreement with Carve) but the evi-

dence, far from clear, does not indicate that Carvel songht

or took advantage of any tendered opportunity to arrive at

an individual contract with Local 321.

The unfair labor practice charge was filed on June 23,

1975, amended August 7, 1975, went to hearing in December

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CARVEL CO, UV, NLRB

1975, and on April 21, 1976, the Administrative Law Judge

recommended dismissal of the complaint on the ground

that, despite the dictum in Retail Associates that with

drawal of an employer or a union from a duly established

multiemployer bargaining unit was not permissible (138

NLRB at 895)

J except upon adequate written notice given prior

to the date set by the contract for modification, or to

the agreed-upon date to begin the multicmployer nego-

tintions’’,

no later Board decision had held untunely a withdrawal

before the start of actual bargaining negotiations. The

Board rejected the Administrative Law Judge’s recom-

mendation. The Board did not rely on the dictum in Petal

Associates. Rather it stated the rule in this language:

‘An employer may withdraw without the union’s con-

sent prior to the start of bargaining by giving unequiv-

veal notice of the intent to abandon the multiemployer

unit and to pursve negotiations on an individual em-

ployer basis. However, once negotiations have actually

begun, withdrawal can only be effectuated on the basis

of ‘mutual consent’ or ‘unusual circuinstances.’ ”’

It found on the evidence that ‘‘negotiations’’ within the

meaning of the Retail Assoctates rule commenced at latest

on February 14th. In rejecting the Administrative Law

Judge’s reading of the faets, the Board, after summarizing

the facts throngh the date of the Association’s February

14th acknowledgement ‘‘that the process of reopening the

contract had begun,” said,

‘*Under these cireumstances, to hold. . . that Carvel’s

subsequent withdrawal was timely, even though it oe-

curred afier the disclosure to the Association of the

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OPINION OF THE COURT

Union’s bargaining demands, would be contrary to the

Retail Associates rule of ‘fostering and maintaining

stability in bargaining relationships." For, an em-

ployer would thus be permitted to withdraw ‘in the

hope of obtaining, through separate neyotiations, more

favorable contract terms than those which are fore-

shadowed’ by the Union's proposals.° The rule, how-

ever, is designed precisely to prevent such a ‘disrup-

tion of the multiemployer group via a race for bargain-

ing leverage.”’? [The citations are to Retail Assveci-

ates 120 NLRB at 393 and to Mor Paskesz, 1968, 171

NLRB 116, 118, enf’d., 2d Cir. 1969, 405 F.2d 1201.)

Retail Associates arose out of a union’s use after months

of negotiation of the tactie of picketing one of three cm-

ployers in a multiemployer unit as a means of inducing

all three employers to agree to a contract and the union’s

later attempt to withdraw from multiemployer bargaining

without the employers’ consent. The Board’s decision did

not enunciate a new principle but it did elaborate its ex-

pression. Tt invoked the decision in NLRB v. Truck Drivers

Local Union No. 449 (‘‘Buffalo Linen’’) 1957, 353 U.S. 87,

as establishing the employer’s right, under certain circum-

stances to preserve the integrity of association bargaining.

Buffalo Linen was a case in which the members of an

association locked out their employees when the union

struck and picketed the plant of one employer in further-

anee of effort to bring the multicmployer bargaining to a

conelusion. The Court reversed a holding that the lockout

was an unfair labor practice, reinstating the Board’s hold-

ing that the lockout was defensive and privileged rather

than retaliatory and unlawful. The Court emphasized by

reference to the legislative history that the Congress in-

tended the Board to continue its established administrative

practice of certifying multiemployer units and to leave to

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CARVEL CO. UV. NLRB

the Board's specialized judgment the inevitable questions

concerning multieomployer bargaining that were bound to

arise. Noting the tension between employees’ right to

strike and employers’ interest in measures of self bal the

Court said (353 U.S. at 96-97) :

‘“Confliet may arise, for example, between the right

to strike and the interest of small employers in ne

serving multiemployer bargaining as a mennn of har-

gaining on an equal basis with a large nnion and avoid-*

ing the competitive disadvantages resulting from non-

uniform contractual terms. The ultimate problem is

the balancing of the conflicting legitimate interests

The function of striking that balance to effectuate .

tional Jabor policy is often a difficult and delicate

responsibility which the Congress committed primarily

to the National Labor Relations Board, subject. to

limited judicial review. )

“The Court of Appeals recognized that the National

Labor Relations Board has legitimately balanced con-

flicting interests by permitting lockouts where eco-

nomic hardship was shown. The court erred, however

in too narrowly confining the exercise of Board eee.

tion to the cases of eronomie hardship.”

While general enforceability was not dircetly in issue. the

Supreme Court in NLRB v. Strong, 1969, 393 US. 387

$09, when passing on the power of the Board to order am

employer to pay fringe benefits agreed to in the multi-

employer contract as well as back pay, observed that it was

not disputed that the employer “withdrew from the .

Association too late to eseape the binding force of the

agreement it had negotiated for him, supplanting previous

agreements which had been negotiated in the same wav”’

nor was it disputed that the employer's failure to sign the

39.

OPINION OF THE COURT

azrcement was an unfair labor practice. Board orders re-

lieving against plainly belated attempts to withdraw from

wulticmployer units during or at the close of negotiations

are numevous. Sce, eg., NLAB v, Sheridan Cre ations, Inc.,

94] Cir, 1966, 257 F.2d 245; Universal Insulation Corp. v.

VEER, Oo Cie, 1966, 361 F.2d 406; NLRB v. Tulsa Metal

iWurks, Ine., 10th Cir. 1966, 367 F.2d 55; NLRB v. Spun-

Det eat 2d Cir, 1967, 385 F.2d 379, 382; NLRB v. John

J. Corbett Press, Inc., 24 Cir. 1968, 401 F.2d 673; NLRB v,

Py hess, 2 Cir, 1969, $05 F.2d 1201; NLRB v. Johnson

Sheet Metal, Inc., 10th Cir. 1971, 442 F.2d 1056. Reta

'. weiates treats the principle as one applying Loth to the

con and to cach employer in the multicmployer unit.

ach winployer and the union are alike free to withdraw

frow nom at er nployer bargaining by giving timely and un-

mruivecal notice ofsintention to do so. See, e.g., Detrott

x, wespaper Publishers Assn v, NLRB, 6th Cir. 1967, 372

4] 369: Publishers Assn of New York City v. NLRB,

“| Cir, 1266, 364 F.2d 293. But, in the absence of unusual

vouustanees, the beginning of the negotiation ends the

br oat ‘o withdraw,

Mi onplieation of the Retail Associates rule over the

oot 4 diendes bas given it sufficient precision of formu-

lation to leave action under it unembarrassed by uncertainty

and iuiegivings about possibly vagarious administrative

applications, No more is necessary to operate safely in its

do pain of operation than advertence to the notice dates in

to ourremt tea canny agreement. Freedom of action is

‘dled so long as it is unequivocal and timely. The

ti) dss cates rule is, none the less, an administrative

as tyaet intended to serve policy aims, stability in indus-

sal polations and fairness in negotiation. As the cases

‘yh cist, siultionployer bargaining rests on the reality of the

copant of the vaton and of each employer, but the Retad

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CARVEL CO, U. NLRB

Associates rule as formulated and applied makes clear

that it is the real consent given at the outset that is meant,

and once given at the outset of the negotiations, it cannot

be withdrawn except in unusual circumstances, That is not

familiar contract law but is a legitimate adininistrative rule

in nplementation of Section 8(a)(1), (5) and (b)(3) in the

context of multiemployer bargaining.

It is true, as Carvel argues, that no reported decision

appears to have placed the beginning point of negotiation

at so carly a point. But it is not possible to say that the

evidence does not support the decision that the parties had

pened their negotiations. The contract was reopened for

negotiation as required by the terms of the 1973-1975 con-

tract. Loca] 321 stated its position with completeness, and,

while it prudently charaeterized its proposals as ‘‘tenta-

tive proposals presented for negotiation,’’ the Association

undertook to present them to its Committee. No more could,

expectably, be accomplished by a first meeting, and the

parties agreed that their letters would serve as thie initial

negotiation required by the contract. Carvel, acting through

the Association, was a party to the letter exchange and to

that agreement on its significance. If Carvel would have

had it otherwise, it had only to notify the Association and

Local 321 before the contract date, for when those dates

came and Loca] 321 and the Association acted, contract

negotiations were under way. So, certainly, the Board was

free to find, for with it lay the task of defining, within

reason, what shonld mark the beginning of negotiations

for purposes of applying the Retail Associates rule.

The challenging critiqne of NLRB v. Sheridan Creations,

Inc., supra, in NLZRB v. Field € Sons, Inc., 1st Cir. 1972, 462

F.2d 748, 749-750, was not necessary to the decision. Field

attempted to withdraw from the multicmployer unit after

his only unionized employees quit his employ and left the

-4j-

OPINION OF THE COURT

area; the Board argued for compelling Field to sign the

multiemployer agreement regardless of the reason for the

refusal to sign and regardless of good faith and lack of

adverse effect upon the bargaining process. The court sug-

gested that an employer should be free to withdraw so long

as no commitments have been made ‘‘at least absent some

showing of detriment or bad faith.”’ The court noted as a

singular comparison that the Board had ruled that a union

member, though contract bound to his union, may withdraw

from the union with impunity during a strike even though

he voted for the strike. But the Supreme Court, while

holding that supervening strike hardships authorize the

member to resign if there are no express limitations on

members’ rights to resign, has left open the question of the

extent to which the contractual relationship of union to

member may curtail the freedom to resign. NLRB v.

Granite State Joint Board, 1972, 409 U.S. 213, 217-218.

Congress has, moreover, entrusted to the Board’s expertise,

at least ‘‘subject to limited judicial review”’, formulation

of rules in this area. See Buffalo Linen, supra, at 96. This

rule is an ‘‘essential ingredient of [the Board’s} efforts

to achieve peaceful Jabor relations.’’ NLRB v. Beck En-

graving Co., Inc., 522 F.2d 475, 480 (3d Cir. 1975). Cer-

tainly as applied to Carvel in this case, the Board’s rule is

not an abuse of its discretion. Carvel has not brought

forward any justification for its action.

Carvel argues that bargaining had reached an impasse

that justified its withdrawal. Fairmount Foods Co. v.

NLRB, &th Cir. 1972, 471 F.2d 1170, 1172-1173; NLRB v.

Beck Engraving Co., Ine., supra, Carvel’s attempted with-

drawal, however, was not oceasioned by any condition of

impasse, and, moreover, there is no evidence to support

the assertion. The business manager’s assent to the idea

that there was an ‘‘impasse’’ referred only to the fact that

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CARVEL CO. UV. NLRB

at the first of three April bargaining sessions the parties

had not agreed on the duration of the new contract.

he Board found the facts against Carvel’s contention

that Local 321 consented to Carvel’s withdrawal and nego-

tiated with it on an individual basis. The evidence amply

supports the Board’s findings in these respects. The evi-

dence supports only the conclusion that Local 321 preserved

contact with Carvel and probed for Carvel’s ultimate pur-

pose and intention. °

Tt is argned that the Association and Local 321 did not

follow the strict language of the 1973-1975 contract in re-

opening the contract and substituting the letter exchange

for a face to face meeting. The contention is not available.

The Association acted for Carvel, certainly until February

97th or March 5th. The Association’s agreement to reopen

the contract and to substitute the exchange of letters for a

face to face meeting was action taken in Carvel’s behalf.

The convenient informality with which the Association and

Local 321 proceeded through the first stage of negotiation

disappointed no fair expectation of Carvel, and it adhered

to the substance of the contract clause.

Petition for review denied.

Cross petition for enforcement granted.

Adm. Office, U.S. Courts - Addison C. Getchell, Inc. Tagal Printers Boston

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