Appendix — Houston Distribution Services, Inc. v. National Labor Relations Board

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~ Supr Court Us

Preme Court, U. S..-"\

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| SEP 22 1978

TEMAS nn

‘a APL RC p; i jie TMirny

Supreme Court of the Hnited States

Ocroser Term, 1978

No. ih 7490

Hovsron Disrrisution Services, Inc, anv

Sournwest Warenouse Services, Inc.

Petitioners,

NatronaL Lasorn Revations Boarp,

Respondent.

Davip T. Mappox

1600 Mellie Esperson

Building

Houston, Texas 77002

(713) 224-5771

Counsel for Petitioners

——EE SS.

INDEX

PAGE

Administrative Law Judge’s Decision and Order

DOR TEES Bs, AP OO siimcigecsctastee cr aa ee ee A-1

Board’s Decision and Order

CRPRIEF BE, BREF wikisinistcehsndakincakecsinntiecnr tee A-44

Fifth Circuit’s Decision and Judgment

UME DE, EBVO sui \acsvissenssinieinceiuadecdin nee eae A-48

A-]

Cases No, 23-CA-5448, 23-CA-5497

UNITED STATES OF AMERICA

Bevrore tHe NarioNat Lapor Rextations Boarp

-Drvision oF JupcEs

Houston Disrrisution Services, Inc.

AND SoutHwEst WarEHOUSE SERVICE!

and

Teamsters Freicut, Tank Line &

AUTOMOBILE INDUstrY EMPLOYEES

Locat Union No, 988

Robert L. Penrice, Esq., of Houston,

Texas, for the General Counsel.

David T. Maddoz, Esq., and Robert T.

Sabom, Esq. (Dyche, Wright, Sullivan,

Bailey & King) of Houston, Texas

for the Respondent.

James P, Wolf, Esq., (Dixie, Wolf &

Hall), of Houston, Texas, for the

Charging Party.

DECISION

Statement of the Case

JOEL A. HARMATZ, Administrative Law Judge: This

case was heard in Houston, Texas, on March 8, 9 and 10,

1976, upon an original charge filed on February 4, 1975,

and a consolidated complaint issued on December 22, 1975,?

' The caption appears as amended at the hearing, sua sponte, by

the undersigned to refiect the single employer status of Houston

Distribution Services, Inc., and Southwest Warehouse Service,

which is discussed more fully infra.

2 At the hearing, on request of the General Counsel, I approved

withdrawal of paragraph 12 of the complaint, alleging that

Respondent violated Section 8(a)(1) of the Act by threatening

employees with a loss of benefits and jeopardy of their jobs if

they supported a union, by coercively interrogating employees,

and by creating the impression of surveillance.

A-2

alleging that Respondent violated Section 8(a)(3) and (1)

of the Act by refusing to hire certain named employees

and by discharging others, and violated Section 8(a) (5)

and (1) of the Act by refusing, as a successor employer,

to recognize the Union as exclusive representative of em-

ployees in the appropriate bargaining unit. In its duly

filed answer, Respondent denied that any unfair labor prac-

tices were committed. After close of the hearing, briefs

were filed by the General Counsel, the Charging Party, and

the Respondent.

Upon the entire record in this proceeding, including

my observation of the witnesses while testifying, and after

due consideration of the post-bearing briefs, I make the

following:

Findings of Fact

I. Jurisdiction and the Single

Employer Issue

Houston Distribution Services, Inc., herein called HDS,

is a Texas corporation, with a place of business in Houston,

Texas where it operates a public warehouse referred to

herein as the Spikewood facility. During the 12-month pe-

riod preceding issuance of the complaint, a representative

period, HDS provided warehousing services to Phillips

Petroleum, an employer over which the Board would assert

jurisdiction, exceeding $50,000 in value.

Based upon the foregoing, I find that HDS is, and has

been at all times material herein, an employer engaged in

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

the Act.

At the outset of the hearing, Counsel for the Respondent

submitted a formal motion to dismiss the complaint on

grounds that all matters complained of therein related ex-

clusively to a Texas corporation known as Southwest Ware-

A-3

house Services, Inc,, herein referred to as Southwest, That

motion was denied on the basis of factual representations

by Counsel for the Respondent in support of said motion

Which established that HDS and Southwest were at a mini-

mum, joint venturers or joint employers, and further that

HDS was in fact the alter ego of Southwest. Later, in the

course of the hearing, certain clarifying evidence estab-

lished beyond question that HDS and Southwest constituted

a single-employer within the meaning of the Act.

Thus, in reaffirming my findings in this respect I note

that HDS is a wholly-owned subsidiary of Southwest. Gary

R. Stillwell, the president of HDS and Southwest, owns

all the outstanding stock on Southwest.

The issues in this ease originate with acquisition by HDS

of a warehouse formerly operated by Shippers Transporta-

tion Services, herein referred to as S.T.S. Prior thereto,

HDS had no functional existence; it had been incorporated

by Stillwell in connection with his plans for acquisition of

additional warehouses. Stillwell decided that HDS would

exist as an operating entity, with no rank-and-file em-

ployees. Thus, when HDS assumed control of the Spike-

wood warehouse, it operated under a formal agreement

with Southwest, whereby the latter agreed to provide all

labor and administrative services to HDS, with HDS, in

turn, to compensate Southwest at 125 percent of the total

labor cost.

Daniel L. Barrett was designated by Stillwell to hold

positions as vice president and general manager of HDS.

Barrett interviewed and hired the personnel employed by

Southwest at the Spikewood warehouse. James McGee, who

became assistant warehouse supervisor at Spikewood also

held that position on designation by Stillwell. Barrett had

immediate responsibility for all operations at Spikewood

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and was entrusted with authority necessary to the super-

. > ” 7 2 u

vision, discipline, hiring and discharge of Southwest em

ployees at that location.

Stillwell, himself, also was highly active in the day-to-

day operations of both HDS and Southwest. He reviewed

actions by Barrett in hiring, himself effected discharges

of Southwest employees working at the Spikewood facility,

and consulted regularly with Barrett and McGee concern-

ing operations at that facility. Stillwell namits to active

participation in the management of both Southwest and

HDS and specifically concedes that he would make signifi-

cant decisions affecting the capital or profit and loss posi-

tion with respect to either firm.

From the foregoing it is apparent that HDS and South-

west are subject to common ownership and control, that they

operate under a labor relations policy formulated by —

well, and that they have no separate functional identit)

apart from their integrated role in furthering the public

warehouse interests of Gary Stillwell. Accordingly I re-

affirm my finding that Southwest and HDS constitute a

single-employer within the meaning of the Act and further

conclude that both are merely the alter ego of Gary Still-

well, thereby rendering them jointly responsible for unfair

labor practices found herein. HDS and Southwest are col-

lectively referred to as the Respondent. Since HDS and

Southwest constitute a single employer, there is no merit

in Respondent’s defenses based on the claim that Southwest

rather than HDS was the real party in interest in this

proceeding.

II. The Labor Organization Involved

+

The complaint alleges, the answer, as amended at the

: ‘ woe nh] M4

hearing, admits, and I find that Teamsters Freight, Tank

A “i

Line & Automobile Industry Employees Local Union No.

988 is, and has been at all times material herein, a labor

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

Ill. The Alleged Unfair Labor Practices

A. The Issues

This proceeding arises from Respondent’s acquisition

of a publie warehouse which had been previously manned

by employees represented by Local 988, Upon Respondent’s

assumption of control of the warehouse it declined to recog-

nize and bargain with Local 988. The General Counsel con-

tends that this refusal to bargain violated Section 8(a) (5)

and (1) of the Act, and further asserts that Respondent

engaged in various acts of discrimination to avoid dealing

with the Union. More specifically the issues presented are

set forth chronologically, as follows:

1. Did Respondent violate Section 8(a)(3) and (1) of

the Act in its refusal to hire Andrew Loring, Lawrence

Buckner, R. B. Hammonds, Nehmiah (. Alexander, Eddie

Lee Armstrong, Eugene Plater, Phillip Ware, and Emmett

Lewis, all former employees of S.T.S. warehouse?

2. Was Respondent a successor employer within the

meaning of the Act, so as to have violated Section 8(a) (5)

and (1) by its refusal, upon Local 988’s request, to recog-

nize and bargain with that Union?

3. Did Respondent violate Section 8(a)(3) and (1) of

the Act by discharging employees Clifford Davis, Curtis

Mack, Raymond Mills, and Nathaniel Jones, all former

employees of S.T.S. who were hired by Respondent, but

thereafter terminated on March 4, 1975?

A-6

B. Background

1. Local 988’s bargaining history.

Local 988’s representation of the warehouse employees

at Spikewood evolves from Case 23-RD-212. In that pro-

ceeding the Board certified Local 988 as exclusive bar-

gaining representative for a unit of truckdrivers, helpers

and mechanics employed by Port Houston Transportation

Corporation, Apparently at the time of said certification,

Port Houston Transportation Corporation was not en-

gaged in warehousing and hence the unit involved con-

sisted essentially of truckdrivers, Subsequently, Port Hous-

ton Transportation Corporation was purchased by S.T.S.,

which continued to recognize Local 988 in said unit. In

1972, S.T.S., having augmented its trucking operation by

acquisition of the Spikewood warehouse, in conjunction

with Local 988, voluntarily added two new classifications

to the existing unit; namely, warehousemen and tow motor

operators

In 1973, S.T.S., apparently without bargaining with

Local 988, attempted unilaterally to climinate its direct

involvement in the trucking operation by converting: its

truekdrivers to independent contractors. Such action was

taken by S.T.S. with respect to those drivers who are will-

ing to purchase their trucks. Those who declined were

transferred to warehouse classifications.’ In the interim

8 Local 988 filed unfair labor practice charges based upon the

action of S.T.S. in this regard. Llowever, no complaint was issued

thereon in view of the determination by the General Counsel that

the matters in dispute could best be resolved by arbitration pur-

suant to the Board’s policy set forth in Collyer Insulated Wire,

192 NLRB 837. Accordingly, the matter was submitted to

arbitration, and on May 12, 1975, well after Respondent’s

acquisition of the Spikewood warehouse, arbitrator Charles R.

Milentz issued an award, restoring the truckdriver classification

to the bargaining unit and directing S.T.S. to reinstate in that

position six employees transferred to the warehouse.

A-7

between the conversion of the truckdrivers to independent

contractors, and February 8, 1975, when Respondent ac-

tively began operations at the Spikewood warehouse, the

only employees continuing on active payroll status with

S.T.S., were warchousemen and tow motor operators.

» . eee "I . r

2. Respondent’s Acquisition of the Spikewood Ware-

house

At all times material, the Spikewood warehouse was

owned by J. Weingarten Company. S.T.S. leased those

premises from Weingarten, and in 1974 following financia!

difficulties, and its inability to make timely rental payments,

S.T.S. began negotiating with Gary Stillwell for the sale of

its assets including use of the Spikewood warehouse. Those

negotiations began in October 1974, and resulted in formal

agreement on December 28, 1974.

Upon conclusion of those negotiations, Stillwell was en-

gaged in warehousing operations at a location known as

the Katy Freeway facility. Stillwell conducted that opera-

tion through Respondent Southwest. However, Southwest

was not a party to the agreement which resulted in Still-

well’s acquisition of the Spikewood facility. Instead, S.T.S,

and HDS were the sole parties thereto. Prior to the com-

mencement of operations by Respondent at Spikewood,

HDS and Southwest executed a “management agreement”

whereby Southwest agreed to prov: + various support serv-

ices to HDS ineluding “all labor necessary for the ware-

house storage and handling operations, including super-

visory personnel.” Stillwell retained Daniel Bar.ett to act

as general manager and vice president of HDS and it was

contemplated that James Me@ee, another employee of

Southwest, would be retained as Barrett’s assistant in fur-

nishing immediate supervision to employees at the newly

acquired Spikewood location. On February 1, 1975, Re-

A-8

spondent commenced operation of the Spikewood ware-

house, continuing immediately to honor its responsibilities

for storage and service to customers of S.T.S.

In operating the Spikewood publie warehouse, Respon-

dent, like S.T.S., was responsible for the unloading of

trucks, the storing of goods in their designated places, and,

when stored goods were requested by customers, to locate

and loud goods on trucks for delivery, Respondent had no

responsibility for the hauling of goods beyond the ware-

house premises,

The Spikewood warehouse occupied some 250,000 sq. ft.

The aforedescribed warehousing functions required em-

ployment of tow motor operators and laborers referred to

as warehousemen, Stillwell decided that employees to be

hired in connection with the new warehousing operation

would be drawn from two basie sources, Thus, hiring would

he from among the former employees of S.T.S., on the one

hand, and applicants responding to a newspaper advertise-

iment which appeared in the /ouston Chronicle on Sunday

Mebruary 2, 1975, on the other, The hiring was entrusted to

General Manager Barrett of HDS.

lormer employees of S.T.S. secking work with Respon-

dent were required to file applications beginning on the

morning of February 3.

Barrett, with consent of Stillwell, retained Willie Jack-

son, the former warehouse manager of S.T.S., to act in a

supervisory capacity as an assistant to James McGee. In

addition, Barrett hired nine former employees of 8.T\S.;

namely, Roger Abbs, Warren Abbs, Lincoln Steber, Jesse

Warren, Nathaniel Jones, Raymond Mills, Wilford Davis,

Curtis Mack, and Clyde Davis. Barrett during the first week

of February hired six additional employees who responded

to the newspaper ad. This group consisted of Ronnie Bar-

A -9)

reti, Jerry Carter, Brett Griffin, Mike Rice, Robert Roy,

and Mike Usher, Two additional employees, John Tinkle

and James Willis, were in Southwest's employ at the Katy

Freeway facility when Spikewood was acquired. Robert

Stillwell, the son of Gary Stillwell, is also listed in Respon-

dent’s payroll records as having been employed on a regu-

lar part-time basis commencing during the week of Febru-

ary 3, 1975,

Kight former employees of S.T.S. were not hired by

Barrett, and it is the General Counsel’s contention that in

each instance, Barrett acted on the basis of union-related

considerations, thereby violating Section 8(a)(3) and (1)

of the Aet.

Also on February 3, 1975, Charles I, Brawley, Sr., Local

988’s business agent, having been notified that the ware-

house was under a new management, appeared at Spike-

wood, He conferred with Barrett, asking if Barrett knew

that Local 988 represented the employees at the warchouse

and that the collective-bargaining agreement covering them

was not to expire for 9 months. Barrett replied that such

matters were in the hands of lawyers, that he had no con-

nection with the Union, and that as far as he was concerned

the Union was out, By letter of that date, Brawley again

informed Barrett of Local 988s majority status among the

employees at 8.T.S., requested that Barrett reconsider Re-

spondent’s failure to reemploy all former employees of

S.T.S., and also invited contract discussions at Barrett's

convenience,

On February 4, 1975, Local 988 filed the original unfair

labor practice charge in this proceeding, alleging inter alia

that HDS was a successor to S.T.S. and had failed and re-

fused to bargain, and that HDS had discriminated by re-

fusing to employ certain employees of S.T.S. because of

A-10 ‘

their union representation and activities on behalf of Local

OSS,

Thereafter by letter dated February 13, 1975, over signa-

ture of D. L. Barrett, Local 988 was informed as to the

circumstances under which HDS acquired the Spikewood

warehouse from 8.T.S. and the relationship between HDS

and Southwest. The letter went on to indicate that once

the work force had stabilized, the employees would be free

to determine whether or not they wanted a collective bar-

gaining representative, and if they did want one, to deter-

mine just which union it would be, The letter also indicated

that Respondent would decline to hire all former S.' 5.

employees since such action would not be riage with

its interest determining who were “the best men” for the job.

Subsequently on Mareh 4, 1975, Respondent discharged

four employees who had formerly worked for 8, pie and

who had been hired by Respondent on February 3. Those

discharges are claimed by the General Counsel to have vi0-

lated Section 8(a)(3) and (1), as an extension of Respon-

dent’s unlawful effort to avoid dealing with Local 988.

B. The Refusal To Hire

1. In General

The complaint alleges that the former employees of

S.'T.S. listed below, were denied employment by Respondent,

in violation of Section 8(a)(3):

Andrew Loring Hugene Plater

Lawrence Buckner Phillip W are

R. B. Hammonds Emmett Lewis

Nehemiah C, Alexander Kiddie Lee Armstrong

In this connection, as indicated, Respondent assumed

control and operation of the warehouse on Saturday

February 1, On February 3, a number of former employees

ee ae eee Ee ee Le ae a

A-1]

of S.T.S. went to the Spikewood warehouse. Dan Barrett

and his assistant, James MeGee were present on behalf of

Respondent at that time. The S.TS. employees were given

employment applications, interviewed, and hired or denied

employment by Dan Barrett,

Prior to February 3, Barrett consulted with Stillwell

concerning the staffing of the Spikewood facility, He was

given exclusive responsibility for hiring at Spikewood

warehouse, According to Barrett, his instructions eoneern-

ing the selection of individual employees was general in

that he was simply to retain the people best qualified to

perform all warehouse functions, so that those hired Would

be flexible enough to fit different jobs in the warehouse, If

is the sense of Barrett's testimony that he received no

instructions from Stillwell to hire any specifie individuals,”

Barrett was the only witness available, through whom

Respondent could explain the refusal to hire the alleged

discriminatees. His explanations in each easo and frets rel.

ative to an evaluation thereof are set forth as follows:

*I discredit Stillwell’s testimony that he in fact instructed

Barrett to hire six former employees of 8,'1,8, (Roger Abbs,

Warren Abbs, Lineoln Steber, Jesse Warren, Nathaniel Jonen,

and Raymond Mills). This portion of Stillwell’s testimony is un.

corroborated, and impressed me as a belated effort to neutralize

certain contradictions in Barrett's explanation for his refusal on

February 3 to hire certain alleged discriminatees, Examination

of Barrett's testimony reveals no reference to ny such instrue.

tion, and indeed the tenor of the evidence adduced from him

suggests that the hiring of the six individuals was mecomplished

through exercise of Barrett's independent judgment, My din.

belief of Stillwell is sufficiently strong in this res ect, tO arouse

the general impression, when considered with other aspects of

his testimony, and his general demeanor, that the ent rety of

his actions in connection with acquisition of the Spikewood ware.

house are to be viewed with considerable mistrust,

A-12

Eugene Plater, Barvett testified that he refused to hire

Plater because Plater’s application did “not specifically

indieate warehouse work” and because said application

“indieated that he couldn’t start work on the 4th,” with

Barrett further explaining that he needed people immedi-

ately, Plater’s application explicity states his request for

“any work”, and further indicates that he was available

to begin work on February 4, 1975, Contradicting this ex-

planation for the refusal to hire Plater is the faet that

Respondent hired Raymond Mills despite Mills’ unavail-

ability until February 4, In addition, the newspaper ad

appearing in the Houston Chronicle on Sunday, February

2, simply listed a phone number, without indication where

applications were to be filed in person or at what time, It

isn highly unlikely, that all those hired in response to that

ad could have reported for work any earlier than Plater,

In sum, Barrett's explanation for refusal to hire Plater

WAS UNpersuasive,

Lawrence Buckner, Barrett testified that that he did

not hire Buekner because Buekner did not show up for an

interview, Buekner was not ealled as a witness and in the

clreumatances, ay Barrett's testimony stands uncontradieted

it in evedited,

Mmmett Lewis, Barrett testified that he did not hire

Mimmett Lewis because the latter's application was incom-

plete and indieated that Lewis’ experience was as a truck.

driver, Mmmett Lewis was apparently one of the former

S.T.S, employees who prior to the fall of 1973 served as a

truckdriver, However at that time, Lewis was reclassified

and assigned to warehouse work, Barett admits to knowl-

odge that on February 3, he knew that Lewis had been

employed by S,'T.8,, and that 8.7.8, had no truekdrivers,

Although Barrett denied knowledge that 8,T\8, had pre-

viously converted its truckdrivers and assigned them to

A-18

warehouse work, I discredit him in this respect. I find it

difficult to believe that Barrett was unaware of S.T.S.’s

action with respect to truckdrivers in 1973, and that those

affected by this change remained employed by S.'T.S, in the

warehouse until the latter’s cessation of operations on

January 31, 1975, Barrett’s reasons for refusing to hire

Lewis would have been clarified and refuted through an

interview and from other information at Barrett’s disposal,

and his assigned reasons for rejecting Lewis are unpersua-

SlV@,

Phillip Ware, Barrett claims he refused to hire Ware

because Ware was unavailable for work on February 38 and

because his application was “relatively incomplete insofar

as his work experience was concerned.” As in the case of

Hugeno Plater, I do not believe that Ware was denied em-

ployment because his application recited that he eould

start on February 4, 1975, My views concerning Plater

are equally applicable to Ware in this regard, As for the

assertion that Ware's application was incomplete as to his

prior work experience, since his background would have

been clarified through an interview, omissions on the appli-

cation afford no reasonable explanation for Respondent's

negative appraisal of Ware, In any event Ware's appli-

cation was only slightly loss informative than that of Wil.

ford Davis, who was in fact hired by the Respondent,

Andrew Loring, Barrett testified that he refused to hire

Loring because he applied for a position as a truckdriver,

It is undisputed that Respondent employed no truckdrivers

in any of its operations, On the application completed by

Loring it is plain that the position he sought was that of

a “truckdriver” and there is no indication on the record

that he would have accopted any other job,

A-14

Rh. B. Hammonds, Barrett testified that he did not hire

Hammonds because he applied for a position of “mechanic-

truckdriver.” Barrett also observed that Hammonds did

not list his prior employment experience on his application,

and that the application reveals that Hammonds had been

injured on October 31, 1074, Hammonds confirmed that he

had been injured while employed by S8.T.S, and last worked

on October 81, 1974. He relates that upon learning that

S.T.S, was going out of business, he went to the warehouse

and filled out an application on Tuesday, February 4, Ac

cording to Hammonds, he was not then available for om

ployment but later, on February 18, 1975, he received a

medical release permitting him to work on a light duty

basis, On that date Hammonds had a conversation with

Barrett in which he asked if Respondent would hire him

for light duty, Barrett indieated that he had Hammond's

application and had not decided what to do with it, Tt does

not appear that following said Mebruary 18 conversation,

Hammonds made any further effort to obtain work with

Respondent,

Kiddie Lee Armstrong, At the outset of the hearing,

the complaint was amended to add Eddie Lee Armstrong as

wmnong those ciseriminatorily denied employment hy the

Respondent, Barrett testified that he never received an ape

plication from Armstrong, According to Armatrong, he

ho went to the warehouse on Monday, Mebruary 38, decomp.

nied by Business Agent Brawley, Alexander and Ham

monds, where they met with Barrett, According, to

Armstrong following that meeting, he obtained an applica.

tion from Nehemiah Alexander, filled it in, and turned it

® Business Agent Brawley does menuon that Alexander and Tam.

monds, both of whom were stewards, accompanied him to the

meeting with Barrett, [Lin testimony does not acknowledge Arm.

atrong’s presence,

A-15

over to James McGee. According to Armstrong, this oe-

curred in the presence of Willie Jackson, the former S8.T.S.

warehouse manager who was retained by Respondent. Me-

Gee could not recall having received an application from

Armstrong. Jackson, on the other hand substantiated Arm-

strong, asserting that he observed Eddie Armstrong give

his application to McGee and that he (Jackson) made a

comment about it because there was a dirty smudge on one

side. I did not believe Jackson and Armstrong. Jackson’s

testimony impressed me as tainted by an extreme bias

towards Respondent, growing from circumstances surround-

ing his employment at Spikewood by Respondent, and his

subsequent termination. He seemed too willing to relate in

exaggerated form, whatever testimony would be necessary

to prejudice the position of the Respondent, I also was not

impressed with Armstrong’s demeanor and regarded it as

entirely improbable that Respondent, despite its apparent

retention of all other relevant applications, would have

either misplaced or deliberately withheld that of Arm-

strong. My suspicion as to Armstrong’s claim is supported

by the curiosity that arises from authorization cards solic-

ited by Local 988 on February 3 and 4, 1975. Thus, the ree-

ord includes some 20 signed authorization ecards, all of

which are dated on February 3 or 4, 1974 except that of

Armstrong which is undated. Although on this basis it

might be speculative to assume that Armstrong was not

present when the others signed ei rds, the suspicion raised

is consistent with the unimpressive testimony in support

of his claim. I find that Armstrong did not in fact file an

application at any time on or after February 3, 1975.

Nehemiah Alexander. Barrett was not examined as to

the reason for the failure to hire Alexander. The application

of Alexander recites that “I am injured now” and also in-

dicates that he was unable to work. Alexander did not

testify.

Eos!

Se ORL RA em REA ARN, ee AL

A-16

2. Concluding Findings

The General Counsel contsads that Respondent staffed

the expanding warehousing operation so as to evade any

obligation to bargain with Local 988, by setting a limit on

the number of former S.T.S. employees hired, thereby

precluding this latter group from constituting a majority

of its overall work force. It is claimed that the Respondent

acted upon such an intent in declining to hire Hammonds,

Plater, Alexander, Loring, Buckner, Ware, Lewis and

Armstrong, thereby violating Section 8(a)(3) and (1) of

the Act in their respective cases.®

Respondent, in defense, claims that all applicants for

employment at Southwest were judged by the same stand-

ard, with the failure to hire the alleged discriminatees

reflecting no more than equal application of this standard.

Respondent denies that union animus or discrimination

was involved.

6] find no merit in the Charging Party’s theory that Respondent

denied employment to these eight individuals because they “were

employees that had been the subject of a hotly disputed griev-

ance and impartial arbitration.” The grievance in question re-

lated to the unilateral termination by S.T.S. of its trucking

operation, by an attempted conversion of certain drivers to in-

dependent contractors and reclassification of others to jobs in

the warehouse. Contrary to the Charging Party’s factual

premise, it does not appear that the eight alleged discriminatees

in question here were party to or beneficiaries of that pro-

ceeding. Documented evidence reflects that only five of that

group were reclassified by 8.T.S. in 1973. Specifically named in

the grievance-arbitration proceeding and covered by the award

which subsequently issued were Hammonds, Plater, Alexander,

Armstrong and Ware. There is no evidence that Loring, Buckner

or Lewis were involved. Even assuming that Stillwell had

knowledge of the pending arbitration against S.T.S. on behalf

of the former truckdrivers, I am not convinced that the record

supports an inference that Respondent’s refusal to hire em-

ployees related specifically to their involvement in the pending

arbitration proceeding against S.T.S.

A-17

Contrary to the Respondent, with respect to alleged dis-

criminatees who completed applications and were available

for work during the week of February 3, a reasonable

inference is warranted that they were denied employment

as part of Respondent’s effort to avoid the consequences

of the Board’s successorship doctrine. Thus, Barrett testi-

fied that he sought to hire the most qualified men, who

could perform all warehousing functions, including fork-

lift operation, checking, and loading so as to permit their

flexible utilization throughout the operation. Barrett

stressed the need to hire immediately in order to provide

continuous service to customers and to commence reorgan-

ization of the warehouse which at the time of acquisition

was in a state of disarray. He claims to have had no know!l-

edge of the competence or incompetence of former employ-

ees of S.T.S., and despite the immediate need for employ-

ees, and the recognition that some of the employees would

come from this source, he made no effort to consult with

former officials of S.T.S., or S.T.S. former Warehouse

Manager, Willie Jackson,’ concerning the former employ-

ees of S.TJS. Also of interest is the fact that Barrett’s

testimony indicates that he could hire all or none of the

former §S.T.S. employees. Yet, despite this, Stillwell

assumed that, though fewer employees would be needed

by Respondent than employed by S.T.S., Respondent would

not be able to fill its entire need from that source. Thus, it

7I discredit Barrett’s testimony that he discussed the experience

of all S.T.S. employees with Jackson prior to February 3. This

phase of Barrett’s testimony is frought with contradiction. Pre-

viously Barrett had indicated that he had no background on

S.T.S. people until he received their applications. Subsequently

Barrett indicated that he had no knowledge prior to receipt of

the applications and interviews that 8.T.S.’ former truckdrivers

had been working as warehousemen. Although Jackson was not

the most persuesive witness, in the face of the contradictions in

Barrett’s account, I credit Jackson’s denial that he was consulted

with respect to the competence of S.T.S. employees.

Ree ee SN 2 Ss ee

A-18

was pursuant to Stillwell’s instruction, that the ad appeared

in the Houston Chronicle on Sunday February 2, the day

before applications were received from §.T.S8. employees.*

It is curious, at the least, that this step was taken, even

though either Barrett nor Stillwell had knowledge that

among the S.T.S. work force there were specific individuals

that would not qualify for employment with Respondent.®

Furthermore following completion of the hiring, and

apparently in response to the unfair labor practice charge

previously filed by Local 988, by letter dated April 28,

1975, addressed to Mr. Clayton Corley of the National

Labor Relations Board, Respondent listed employees on its

payroll for the week ending February 7, 1975. The list

named eighteen employees, nine of whom formerly worked

for S.T.S.'!° Thus, Respondent, numerically, had hired

exactly 50% and less than a majority of its expanded work

force from among the former employees of S.T.S.

In an earlier letter, dated February 13, 1975, also to the

NLRB in response to the charge filed in Case No, 23-C.A-

5448, Respondent, in support of its refusal to bargin with

Local 988, states as follows:

2. Regarding the allewed failure of ITDS to bargain

collectively, Southwest (the actual employer) has no

knowledge of the existence of a person or entity rep-

resenting a majority of its employees or a desire on

the part of its employees to bargain collectively or to

he represented by any third party. The prior repre-

sentative status of Teamsters Local No. 988 regarding

“The ad recited as follows: ; a ;

FORKLIFT DRIVERS & WAREHOUSEMEN: immediate

openings, experience preferred, good starting salary. Contact

Mr. Barrett, 675-9235.

* James McGee, Barrett's assistant at Spikewood testified that he

and Barrett, prior to the takeover discussed staffing, and admits

that based on these discussions he assumed that Respondent

would retain practically the entire work force of S.T.S,

10“James Willis” apparently through inadvertence was listed

twice.

A-19

the STS employee unit is not relevant to the situation

regarding the Southwest employees in light of the fact

that less than half of the Southwest employees were

formerly employed by STS, and that Southwest hired

less than half of the employees constituting the former

STS employee unit. The majority of Southwest’s

present work force has no known history of union

affiliation or collective bargaining .epresentation, and

their presence in the work force destroys whatever

union majority may have existed in the ST'S employee

unit prior to the sale. Southwest is not obligated to

bargain with a represeniative of less than a majority

of its employees.

In agreement with the General Counsel I find that it was

not mere coincidence which lay behind Respondent's hiring ,

of less than a majority of former S.T\S. employees. Instead,

I am convinced that this was a by product of a ecaleulated

scheme to avoid any obligation to bargain with the Union.

The former employees of S.T.S. provided a willing and

available source of manpower, which could serve Respon-

dent’s immediate need for qualified warehousemen with

little adjustment and training. Yet, without investigating

the individual abilities of this souree of workers, Respon-

dent elected to advertise for workers in a local newspaper,!!

and denied employment to S.T.S. workers, at the same

___

''S.T.S. operated the Spikewood warehouse with some twenty-five

employees. In conversations prior to the takeover, Stillwell

claims to have suggested to Barrett that the new warehouse

could probably be run with twelve employees. Barrett however

was given discretion to hire any number of individuals as he

felt necessary. No plausible explanation exists for Stillwell’s in-

struction that a newspaper ad be placed, when, aceording to

Stillwell’s own opinion, retention of only half of the S.T.S.

complement would be adequate to fill Respondent’s manpower

needs at the facility.

a TS

A-20

time as it could not be certain as to the results that ad

would bring, in terms of the quality of experience and capa-

M4 q 7 . J 12

bilities of those who would respond.

Also relevant to the assessment of motivation is the in-

eredible nature of Stillwell’s attempt to explain Barrett’s

hiring of six former S.T.S. employees. This unbelievable

shift in testimony impressed me as a further effort to mask

Respondent’s predesign to hire only so many of S.TS. em-

ployees as would be permitted without risking a bargaining

relationship with Local 988.

The ineonsistencies in Barrett’s testimony, the predispo-

sition to avoid hiring exclusively from among 8.T.S. per-

sonnel, together with the unpersuasive explanations given

hy Barrett for his refusal to hire Eugene Plater, Emmett

lewis aud Phillip Ware, strongly suygest that Barrett’s re-

fusal to act affirmatively in their ee was pursuant to

interests other than Respondent’s inimediate need for an

experienced work force. These individuals were a railable

for work no later than Tuesday February 4, and had indi-

cated a desire for any work which Respondent could make

available to them. Though all three had been employed at

certain periods by S.T.S. as truckdrivers, I am convineed

that Barrett knew that S.T.S. had no truckdrivers in its

employ and that they had been working as warehousemen.

Their rejection, without inquiry of S.T.S. officials concern-

12 Barrett concedes that four applicants, who were hired after

responding to the ad were college students with no prior experi-

ence in warehousing. Barrett’s testimony that he hired them

because he thought they would be heipful in the physical inven-

tory of the warehouse struck me as a belated rationalization for

the clear departure from the hiring standards described in his

prior testimony.

A-2]

ing their suitability for employment with Respondent!’ was

not compatible with an objective approach to hiring pur-

suant to uniform standards. In the circumstances the con-

clusion is inescapable that these individuals were denied

employment because of a predesign on Respondent’s part

to decline to hire former S.T\S, employees beyond a number

constituting a majority of its work force. Accordingly as

Respondent’s action in this regard was designed to avoid

bargaining with the Union, T find that Respondent thereby

violated Section 8(a)(3) and (1) of the Act.

It does not follow, however, that this discriminatory mo-

tivation extends to all discriminatees named in the com-

plaint. Despite its illicit scheme, Respondent had no ob-

ligation to hire those seeking specific jobs unavailable in

Respondent’s operation, or those who failed to file an

application, or those who were unfit for immediate employ-

ment. Major elements supporting the inference of unlawful

discrimination in the eases of Plater, Lewis, and Ware,

were Respondent’s immediate need for experienced per-

sonnel to maintain the continuity of public warehouse serv-

ices, their apparent satisfaction of Respondent’s needs, and

the unbelievable reasons advanced by Barrett in denying

them jobs.'* As for the remaining former employees of

8 Testimony offered by Respondent through Richard A. Brown,

apparently an expert in warehouse management and an execu-

tive vice president of J. Weingarten, and Stillwell, which related

to their alleged observation of laxity on the part of alleged S.T.S.

employees during their visits to Spikewood prior to February 1,

1975, favors, rather than detracts from the inference urged by

the General Counsel. Neither Brown nor Stillwell could identify

the individual employees who were the subject of their charges,

and this testimony, if true, enforces the suspicion generated by

Respondent’s failure to investigate the individual S.T.S. em-

ployees, and determining who the lagards were, before engaging

in a hiring procedure which was unlikely to expose any offenders.

14 See e.g. Universal Fuel, Inc., 204 NLRB 26, 28.

A-22

S.T.S., whom the complaint alleges to have been unlawfully

denied employment, the record does not support a finding

that they would have been hired even if union activity were

not a consideration in Respondent’s hiring process. Thus,

based on the credibility finding made above, Eddie Arm-

strong did not file an application.'® Buckner failed to show

up for an interview, and Hammonds and Alexander as of

February 8 were injured and unable to work, and it does

not appear that, at any time following full recovery, they

renewed their effort to obtain employment with Respon-

dent. Lorine insofar as ean be determined from the reeord,

applied solely for a position as “truckdriver,” a job not

available in Respondent’s operation.

In these circumstances I find that Buckner, Armstrong,

Hammonds, Alexander, and Loring, were not employed by

Respondent on or after February 8, 1975, because of reasons

unrelated to Respondent’s unlawful design to restrict hir-

ing of former S.T.S. employees, and aceordingly, I shall

recommend dismissal of the 8(a)(8) and (1) allegations in

their respective cases,

C. The Successorship Issue And

Respondent’s Alleged Refusal to Bargain

On February 1, 1975, S.T.S. and Local 988 were parties

to a collective-bargaining agreement, not scheduled to ex-

15 There is no merit in the General Counsel’s alternate contention

that under NLRB vy. Southern Greyhound Lines, 426 F 2d 1299

(CA 5), and J.R. Sousa & Sons, 210 NLRB 982, 8(a)(3) and

(1) ought be found as to Armstrong notwithstanding his failure

to file an application. Unlike the cited cases, here Respondent’s

unlawful pattern of conduct did not include acts which overtly

reduced the filing of an application to a ritualistie act of

futility. Armstrong’s failure to file an application is more ex-

pressive of a disinterest in employment than a coerced inaction,

and one cannot assume that he would not have been among the

nine S.T.S. employees hired by Respondent even if an applica-

tion had been filed.

ee

A-23

pire until November 1, 1975. S.T.S., in addition to the

Spikewood warchouse, was also engaged in the transporta-

tion business. The unit covered by its contract with Local

988 consisted of truckdrivers, mechanics, tow motor opera-

tors and warehousemen. It will be recalled, however, that

the S.T.S. transport operation since September 1973, was

conducted through independent contractors, with no em-

ployees classified as such on its payroll thereafter. The

elimination of truckdrivers from employ of 8.T.S. was pro-

tested and submitted to arbitration by Loeal 988, with an

award rendered well after the February 1 takeover of

Spikewood by Respondent. Respondent at no time employed

truckdrivers.

Upon acquisition of the Spikewood warehouse, Respon-

dent operated a warehouse of its own, known as the Katy

Freeway Warehouse. Unlike the Spikewood facility, which

primarily housed raw industrial products, the Katy ware-

house handled finished goods and apliances.

Respondent had operated the Katy Warehouse with three

employees, John Tinkle, James Willis and James McGee.

Tinkle and Willis represented the entire rank and file em-

ploye complement, having an employment history with

Respondent as of February 1, 1975. During the first week

of February 1975, Respondent hired nine former employees

of S.T.S. In adition Respondent from outside sources hired

Ronald Barrett, Jerry Carter, Brett Griffin, Mike Rice,

Robert Roy, Mike Usher, and Rob Stillwell.

Immediate supervision of the Spikewood warehouse was

reposed in Daniel Barrett, who was assisted by James Me-

Gee. Willie Jackson, the S.T.S. warehouse manager, was

A-24

retained by Respondent in a supervisory capacity to assist

in the Spikewood operation.’®

Even discounting the three employees found to have been

diseriminatorily denied hire by Respondent,'’ former S.T.S.

employees retained by the latter constituted a majority of

the entire work force in Respondent’s employ during the

first week of February 1975, exclusive of those whom the

Board under a established policy would deem ineligible

to express themselves with respect to any question con-

cerning representation under the Act. Thus, in considering

the degree to which Respondent retained formerly repre-

sented employees from §.T.S., in relation to the balance of

its rank and file work foree, no consideration is to be

ggiven to the employment of James McGee, who at all

times after February 1 served in a supervisory capacity ;

or to Rob Stillwell, the son of Gary Stillwell.!® Thus, of

the seventeen rank and file employees who were on Re-

spondent’s payroll during the first week in February 1975

and who were eligible to express themselves with respect

to any question of representation, nine were formerly

‘© A change in supervision by the purchaser does not negate the

existence of a duty to bargain under the suecessorship doctrine.

Hecker Machine, Inc., 198 NLRB 1114, 1118.

'T In determining whether a duty to bargain exists under the

Board's “successorship doctrine,” former employees of the prior

owner who Were diseriminatorily denied employment by the pur-

chaser, are considered to be employees of the latter. Greengate

Mall, Inc, 209 NLRB 37.

'® Gary Stillwell owns 100% (percent) of the outstanding stock in

Southwest, which, in turn, is the sole owner of HDS. Section

2(3) of the Act specifically excludes from the status of “em-

ployee,” any individual employed by a parent or spouse.” Con-

sistent therewith, the Board in Cerni Motor Sales Inc., 201

NLRB 918, held that children of shareholders in a corporation

having a 50% or greater ownership interest in a closely held

corporation are not regarded as employees within the meaning

of the Act. Accordingly Rob Stillwell is not an employee within

the meaning of the Act.

A-25

employed by 8.T.S. at the Spikewood warehouse. The num-

ber employed by S.T\S. at Spikewood prior to February 1,

1975 does not appear in the record as a conercte figure.

Willie Jackson testified that it was approximately twenty-

five employees. In addition to those actually retained by

Respondent, three others were discriminatorily denied em-

ployment, and, hence, by virtue of Respondent’s unlawful

refusal to hire them, “they were by operation of law its em-

ployees.”!9

Respondent contends that a unit limited to employees at

the Spikewood warehouse would be inappropriate, inasmuch

as employees formerly employed by Respondent, former

employees of S.T.S. and those newly hired from other

sources were integrated into a single warehouse operation

consisting of the Spikewood and Katy Freeway ware-

houses, and those subsequently acquired and operated by

Respondent. In supwort the record establishes that, upon

acquisition of the S.T.S, facility, all employees hired by

Respondent were expected to provide the full range of

warehouse skills, and were subject to assignment to any

‘of Respondent’s facilities, Indeed, of the employees hired

during the week of February 3, 1975, the critical period for

determining Respondent’s obligation to bargain,?° four

19 See J.R. Sousa & Sons, 210 NLRB 982, 984. Former S.T.S. em-

ployees hired by Respondent are not clearly shown to be a

majority of those previously employed by S.T.S. However, this

factor, when attributed to a diminution in the size of the work

force by the new owner, has been held not to preclude a sue-

eet finding. See e.g. Band-Age, Inc., 217 NLRB No. 71,

p. 5-6.

20 Contrary to Respondent’s contention, a successorship determi-

nation, in circumstances, where new ownership occurs without

break in the continuity of operations, must rest upon events

occurring contemporaneous with the takeover, The “suecessor-

ship doctrine” is concerned with whether or not employees are

entitled to continuing representation by an exclusive bargaining

representative. The inquiry, being concerned with a purchaser’s

A-26

(Steber, Mack, Mille and Jerry Carter) were immediately

assigned to the Katy warchouse, The pattern of integration

effected by Respondent in this respect is enforced by testi-

mony of Mack that he worked at three different locations,

and by Mills that he worked at two different locations

during their respective 1-month tenures with Respondent.

It also appears that John Tinkle and Brett Griffin worked

in five and four different locations, respectively. In the

circumstances of this case, however, while noting that

Respondent’s various acts of discrimination might raise

some suspicion as to the genuine nature of the interchange,

I find on balance that Respondent by its own action, upon

acquisition of the Spikewood facility, merged that operation

with the existing Katy warehouse under circumstances re-

sulting in an accretion of the latter with the former.

Wurthermore as in Spruce Up Corporation" the integration

of the Katy Freeway facility “... did not destroy the ap-

propriateness of the... [histerie] ... bargaining unit and

constituted only an expansion of the bargaining unit. . .’’??

Accordingly, I find that, on and after February 3, 1975, the

appropriate bargaining unit herein consisted of:

All warchousemen and tow motor operators em-

ployed at warehouses in Tlouston, Texas managed by

corporations owned and controlled by Gary Stillwell,

excluding office clericals, guards, watchmen and super-

visors within the meaning of the Aet.

immediate obligation to bargain, is not subject to influence

through subseq vent events. It is true that a question concerning

representation or # legitimate withdrawal of recognition may

derive from later events, if in fact the employer is thereby

accorded objective considerations furnishing a reasonably based

doubt of majority. See e.g. Roman Catholic Diocese of Brooklyn,

et al, On the other hand, no such defense is available here, and,

Respondent’s reliance upon subsequent variations in the size

and scope of its work force is deemed immaterial to the succes-

sorship issue.

209 NLRB 194.

“2 Thid p. 196,

-

A-27

On the faets presented here, T find that Respondent was

obligated to recognize and bargain with the Union under

the Board’s “successorship doctrine.” Thus, under estab-

lished Board policy, where a bargaining representative has

heen selected by employees to deal with their employer, a

continuing obligation to deal with that representative is not

subject to defeasance solely on the basis of a change in

ownership. As the Board has stated:

The duty of an employer who has taken over an in-

dustry to honor the employees’ choice of a bargaining

agent is not one that derives from private contract,

nor is it one that necessarily turns upon the acquisition

of assets or other arrangement between employers. It

is a publie obligation arising by operation of the Act.

The critical question is not whether Respondent sue-

ceeded to the [predecessor's] corporate identity or

physical assets, but whether Respondent continued es-

sentially the same operation, with substantially the

same employee unit whose duly certified bargaining

representative was entitled to statutory recognition at

the time Respondent took over.2?

In the instant case, both before and after Respondent’s

acquisition of the Spikewood warehouse, it was a public

warehouse facility in which various industrial products

were stored. Respondent assumed control thereof, without

hiatus and as a going concern, and continued to service

exactly the same customers and to handle exactly the same

products as S.T.S. Former employees of S.T.S. constituted

an immediate majority of Respondent’s work force. In

consequence of the takeover no change occurred in the

overall manpower skills necessary to operation of the

warehouse. Like S.T.S., Respondent was responsible for

the unloading of trucks, the storage of materials in their

designated places, and when delivery was requested by

23 Maintenance, Inc., 148 NURB 1299, 1301.

A-28

customers, to locate the material and to load it on trucks

for delivery, Although Respondent's management tech-

niques and approach to the running of the warehouse

differred from that of S.T.S., the changes were of the

type normally associated with a change of ownership and

failed significantly to reflect any break in the continuity

of the employing enterprise. In these circumstances, I find

that the change in ownership was not er by

circumstances permitting a reasonable assumption

that, as a result of transitional changes, the employees’

desire[s] concerning unionization have likely changed.”**

Accordingly, I find that Respondent by failing to recognize

and bargain with the Union upon request, violated Section

8(a)(5) and (1) of the Aect.*®

D. The Alleged Discriminatory

Discharges

On March 4, 1975, Respondent terminated Wilford Davis,

Curtis Mack, Raymond Mills, and Nathaniel Jones, all

former employees of 8.T.S. The discharges occurred on a

24See Ranchway Inc., 183 NLRB 768, 1169.

25 In the alternative, even if the change in ownership was accompa-

nied by radical changes in operation, sufficient to preclude

application of the suecessorship doctrine, the 8(a) (9) and (1)

violation found herein would nonetheless be justified under

NLRB y. Gissel Packing Co., Ine., 895 U.S. a1) (1969), as that

decision was coustrued by the Board in Trading Port, Tne., 219

NLRB No. 76. Thus, as of February 4, 1975 the I nion held

valid authorization cards signed by nine of Respondent 8 seven

employees. In addition, cards were executed by | later, Lewis,

and Ware, each of whom, has heretofore been found to have

been discriminatorily denied employment by Respondent in

violation of Section 8(a)(3) and (1) of the Act. By virtue of

said discrimination, and Respondent’s subsequent discriminatory

discharge of four additional employees of S.T.S. on March 4,

as shall be found infra, the pervasive nature of Respondent's

tawful efforts to avoid dealing with the Loeal 988, preclude a

fa vy election and hence a bargaining order would be warranted

to best protect th» employees’ rights.

A-29

Tuesday, in the middle of Respondent’s payroll period.

The record fails to disclose that any of the dischargees

engaged in specifie work derelictions or acts of misconduct

at a time proximate to their terminations, which could be

taken as having triggered the action taken against them.

On the other hand, the terminations occurred after Re-

spondent learned that a nnion meeting was to be held that

same week.

By way of defense, it is argued that Respondent had no

knowledge that all four of the dischargees intended to

attend the union meeting, and, further, that all four were

discharged for cause in that they simply did not fit Re-

spondent’s “concept of the type of employees it desired

to hire from the beginning.”

It appears that during the first week of March, a union

meeting had been planned with an NLRB field representa-

tive, apparently as part of the investigation of the then

pending unfair labor practice charges against Respondent.

Of the discharges, there is no evidence that Respondent

had any knowledge or reasenable basis for belief that

Wilford Davis or Curtis Mack intended to attend. Raymond

Mills credibly testified that prior to the meeting, he told

McGee that he could not work on that day because he had

business to attend to. Nathaniel Jones, testified, that pur-

suant to a request of R. B. Hammonds, a union steward,

he informed other employees that the meeting had been

scheduled. Jones denied that he spoke to any representative

of management concerning the meeting. Daniel Barrett, on

direct examination, testified that he did not learn of the

union meeting until after the decision was made to ter-

minate the men. McGee testified on direct examination,

that he did not inform Barrett that employees were going

to attend a union meeting until after the decision was made

to affect the discharges. On cross examination, however,

A-30

when confronted with a pretrial statement given to co-

counsel for the Respondent, Barrett admitted that he

learned of the union meeting on or about February 26,

1975, well prior to the decision to discharge the men. A

similar statement given by MeGee recites as follows “On

February 26 or 27, I was told of the union meeting to be

held on March 4, 1975, by several employees including Mills,

and was told that certain employees could not work past

4:30 that day.” McGee, on cross examination admitted that

shortly after learning of the union meeting, he informed

Parrett to that effect. McGee admits that he knew that Mills

and Jones wished to attend the union meeting.*® The evasive

and contradicting nature of Respondent’s testimony in this

respect, lends support to the inference of discrimination

sought by the General Counsel.

Respondent’s claim that Mills, Jones, and Davis, were

discharged for cause rests upon the testimony of Daniel

Barrett, James MeGee, and Roger Stillwell. The job per-

formance of Curtis Mack, who apparently worked very

little at the Spikewood facility after his hire, and hence was

not within the supervisory authority of Barrett and McGee

~~

vas deseribed on behalf of Respondent by John Tinkle.?

The testimony offered in this respect variously portrays the

dischargees as unwilling to respond to orders, slow and

unable to perform the duties for which they were hired. On

Respondent’s own evidence, it appears that these inade-

quacies were detected shortly after the hire of the dis-

chargees.

However, the continuing dissatisfaction with respect to

the ‘performance of Davis, Mack, Mills, and Jones appar-

j 26 MoGee denied reporting the union meeting to Stillwell. Stillwell

testified that at the end of February, McGee told him of a need

to attend a union meeting. ce

27 John Tinkle was employed by Respondent prior to its acquisition

of the Spikewood warehouse.

A-31

ently was not considered as sufficiently serious to warrant

their termination on an earlier date. The suspicion aroused

by the delay in effecting the discharges, is enforeed by the

fact that Respondent did not tolerate inadequate perform-

ance of all employees hired during the week of February 3,

1975, as it did in the ease of the dischargees. Thus, during

the month cf February, four other individuals at various

times were discharged for cause including former S.T.S.

warehouse manager, Willie Jackson.

Nonetheless, to explain the timing of the discharges,

Stillwell testified, with some corroboration from McGee and

Barrett, that a meeting was held on March 5, attended by

Stillwell, Barrett, MeGee. Said meeting was initiated by

Stillwell because of his concern with the continuing nature

of problems in the warehouse. Stillwell questioned Barrett

and McGee as to why they were still tolerating certain work

inefficiencies, informing them that they were reaching a

30-day period and had made no substantial improvement in

cleaning up the Spikewood operation. Stillwell claims to

have indicated his displeasure with the inability of Barrett

and McGee to clean up the Spikewood operation and to have

instructed MeGee and Barrett that they either get rid of

their unproductive personnel or he would get rid of them.

Respondent’s testimony both as to the timing of the dis-

charges and as to the grounds therefore impressed me as

unworthy of belief. Running throughout Respondent’s evi-

dentiary case was a tendency on the part of its witnesses to

diminish the significance of union activity as a motivating

factor behind various actions by the Respondent in this

case. McGee and Barrett were forced into serious contradic-

tion when confronted with pretrial statements concerning

the acquisition and communication of knowledge of the

union meeting in advance of the discharges. I suspected

firmly that other efforts to suppress Respondent’s concern

A-32

for Local 988’s history of representation were equally with-

out support in fact. I have heretofore discussed the dubious

veracity of Stillwell, who I regarded as a thoroughly in-

credible witness.

In contrast to the testimony offered by Respondent, J

believe that all four terminations were prompted by con-

siderations evident from the credited testimony of Ray-

mond Mills and Nathaniel Jones, that Barrett in discharg-

ing them stated that they were being terminated because

they were not satisfied with their working conditions,?* an

obvious reference by Barrett to his awareness of their con-

tinuing support of Loeal 988.

Considering the entire record, including Respondent's

discriminatory refusal to hire three former 8.T.S employ-

ees in the first week of February 1975, the sudden and

precipitant action in discharging Mills, Jones, Mack, and

Davis in the middle of a pay period and shortly after

acquiring knowledge that a union meeting was to be held,

and Barrett’s implied reference to the continuing interest

of Jones and Mills in represntation by Loeal 988 during

their terminal interviews, I find that Respondent acted

against all four as a further step in its effort to thwart the

-threat of union organization of its warchouse facilities.

Though mindful that Respondent had no knowledge that

Mack and Davis intended to go to the union meeting, I am

convinced that they were included in the group discharge,

either to lend a semblance of legitimacy to Respondent’s

action, or in further attempt to reduce the influence within

‘Barrett did not specifically deny making such a statement.

Saad MeGee claimed to be present at the terminal interview

of Jones and Mills and testified that he could not recall Barrett

having made such a statement, MeGee was a totally unreliable

witness and is discredited. I do not regard the statement

imputed to Barrett by Mills and Jones to be a product of their

imagination and they are credited.

A-33

its work force of former S.T.S. employees. Accordingly I

find that Respondent by discharging these four individuals

on March 4, 1975 further violated Section 8(a)(3) and (1)

of the Act.

Conclusions Of Law

1. Houston Distribution Services, Inc., and Southwest

Warehouse Services, Ine., is an employer engaged in ecom-

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

Act.

2. Teamsters Freight, Tank Line & Automobile Indus-

try Employees Local Union No. 988 is a labor organization

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

3. Respondent violated Section 8(a)(3) and (1) of the

Act by on February 3, 1975 refusing to hire Kugene Plater,

Emmett Lewis, and Phillip Ware, in order to avoid bar:

gaining with the Union, thereby discriminating against

employees in a manner which would discourage union

membership.

+. Respondent violated Section 8(a)(3) and (1) of the

Act by on March 4, 1975 discharging Clifford Davis, Curtis

Mack, Raymond Mills, and Nathaniel Jones, in a further

effort to avoid bargaining with the Union thereby diseri-

minating against employees in a manner discouraging

membership in a labor organization.

5. Respondent violated Section 8(a)(5) and (1) of the

Act, on and after February 3, 1975, by refusing to recognize

and bargain with the Union, upon request, as the duly

designated representative of a majority of its employees

in an appropriate unit. The appropriate bargaining unit, as

found above, consists of :

A-54

All warehousemen and tow motor operators employed

at warehouses in Houston, Texas, managed by cor-

porations owned and controlled by Gary Stillwell, ex-

cluding office clerical employees, guards, watchmen,

and supervisors within the meaning of the Act.

6. The unfair labor practices found herein effect com-

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

Act.

The Remedy

Having found that Respondent engaged in certain unfair

labor practices, I shall recommend that it cease and desist

from engaging in such conduct, and take certain affirmative

action designed to effectuate the policies of the Act. Fur-

thermore, as the unfair labor practices committed by the

Respondent are of a character striking at the core of em-

ployee rights safeguarded by the Act, I will recommend

that it cease and desist from “in other manner” infringing

upon the rights guaranteed employees through Section 7

of the Act.

It has been found that Respondent, in violation of See-

tion 8(a)(3) and (1) of the Act unlawfully refused to hire

Phillip Ware, Emmett Lewis, and Eugene Plater in viola-

tion of Section 8(a)(3) and (1) of the Act, and unlawfully

discharged Clifford Davis, Curtis Mack, Raymond Mills

and Nathaniel Jones. In the ease of those denied employ-

ment, it shall be recommended that Respondent offer them

immediate employment, discharging if necessary any em-

ployee hired after February 3, 1975 from sources other

than S.T.S. As for the discharged employees, it will be

recommended that Respondent offer them immediate re-

instatement to their former positions, or if not available,

to a substantially equivalent position, without prejudice to

their seniority or other rights and privileges. Respondent

shall make whole all of said diseriminatees for any loss

A-35

of pay resulting trom the discrimination against them by

payment of a sum of money equal to the amount they nor-

mally would have earned as wages from the date of the

discrimination against them to the date they are either

offered initial employment or reinstated by Respondent, as

appropriate. Backpay shall be reduced by net interim earn-

ings, and shall be computed on a quarterly basis in the

manner preseribed in F. W. Woolworth Company, 90 NURB

289, and shall include interest at 6 percent per annum as

provided in Isis Plumbing & Heating Company, 138 NLRB

716.

Having found that Respondent violated Seetion S(a) (5)

and (1) of the Act by refusing, upon request, to recownize

and bargain with Local 988 as the exclusive representative

of its employees in the appropriate wnit defined above, 1

shall further recommend that Respondent cease and desist

therefrom, and, upon request, bargain cclleetively with

Local 988 as the exclusive representative of all employees

in the appropriate unit, and, if an understanding is reached,

embody such understanding in a signed agreement.

Upon the basis of the foregoing finding of fact, con-

clusions of law and the entire record in this proceeding,

and pursuant to Section 10(¢) of the Act, L hereby issue

the following recommended ;:2°

*° 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 Regula-

tions, be adopted by the Board and become its findings. con-

clusions, and Order, and all objections thereto shall be ‘dee med

waived for all purposes.

A-36

ORDER

Respondent, Houston Distribution Services, Inc., and

Southwest Warehouse Services, Inc., Houston, Texas, its

officers, agents, successors, and assigns, shall:

1. Cease and desist from

a. Discouraging activity on behalf of a labor organiza-

tion by refusing to hire, discharging, or in any other man-

ner discriminating against an employee in order to avoid

bargaining with a labor organization.

b. Refusing to bargain collectively concerning rates of

pay, wages, hours and other terms and conditions of em-

ployment with Teamsters Freight, Tank Line & Automobile

Industry Employees, Local Union No. 988 as the exclusive

bargaining representative of its employees in the following

appropriate unit:

All warehousemen and tow motor operators employed

at warehouses in Houston, Texas, managed by corpora-

tions owned and controlled by Gary Stillwell, excluding

office clerical employees, guards, watchmen, and super-

visors within the meaning of the Act.

e. In any other manner interfering with, restraining, or

coercing employees in the exercise of rights guaranteed

them in Section 7 of the Act.

2. Take the following affirmative action which is deemed

necessary to effectuate the policies of the Act:

a. Upon request, bargain with the above named labor

organization as the exclusive representative of all em-

ployees in the aforesaid appropriate unit with respect to

rates of pay, wages, hours, and other terms and conditions

of employment, and, if an understanding is reached, embody

such understanding in a signed agreement.

A-37

b. Offer to Phillip Ware, Eugene Plater, Emmett Lewis,

immediate employment, discharging if necessary employees

hired after February 3, 1975, from sources other than S.'.S.,

without prejudice to their seniority or other rights and

privileges, and offer immediate reinstatement to Clifford

Davis, Curtis Mack, Raymond Mills, and Nathaniel Jones,

to their former positions, and if not available, to a sub-

stantially equivalent position, without prejudice to their

seniority or other rights and privileges, and make the afore-

said individuals whole for any loss of earnings they may

have suffered as a result of the unlawful action against them

in the manner set forth in the section of this Decision

entitled “The Remedy.”

e. Preserve and upon request make available to the

Board or its agents, for examination and copying, all pay-

roll records, social security payment records, timecards,

personnel records and reports, and all other records neces-

sary to analyze the amount of backpay due under the terms

of this Order.

d. Post at its places of business located in Houston,

Texas, copies of the attached notice marked “Appendix.”®°

Copies of said notice on forms provided by the Regional

Director for Region 23 after being duly signed by Re-

spondent’s representative, shall be posted by it immediately

upon receipt thereof, and be maintained by it for 60 con-

secutive days thereafter in conspicuous places, including all

places where notices to employees are customarily posted.

30 In the event the Board’s Order is enforced by a Judgment of the

United States Court of Appeals, the words in the notice reading

“POSTED BY ORDER OF THE NATIONAL LABOR RE-

LATIONS BOARD” shall read “POSTED PURSUANT TO A

JUDGMENT OF THE UNITED STATES COURT OF

APPEALS ENFORCING AN ORDER OF THE NATIONAL

LABOR RELATIONS BOARD.”*

A-38

Reasonable steps shall be taken by Respondent to assure

that said notice is not altered, defaced, or covered by any

other material.

e. Notify the Regional Director for Region 23 in writing,

within 20 days from the date of receipt of this Decision,

what steps have been taken to comply herewith.

Dated Washington, D.C.

May 27, 1976

Joel A. Harmatz

Administrative Law Judge

NOTICE TO

EMPLOYEES

POSTED BY ORDER OF THE

NATIONAL LABOR RELATIONS BOARD

AN AGENCY OF THE UNITED STATES GOVERNMENT

After a trial in which all parties were represented by

their attorneys and afforded the opportunity to present

evidence in support of their respective positions, it has

heen found that we have violated the National Labor Rela-

tions act in certain respects, and we have been ordered to

post this notice and to carry out its terms. The National

Labor Relations Act gives you, as employees, certain rights,

including the right:

To engage in self organization;

lo form, join, or help a union;

To bargain collectively through a representative of

your own choosing;

To act together for collective bargaining or other mu-

tual aid or protection; or

To refrain from any and all of these things.

A-39

Accordingly, we give you these assurances.

WE WILL NOT discourage membership in TEAM-

STERS FREIGHT, TANK LINE & AUTOMOBILE IN-

DUSTRY EMPLOYEES LOCAL NO. 988, or any other

labor organization, by refusing to hire, discharging or in

any other manner discriminating aeainst employees in

order to avoid dealing with that Union or any other labor

organization.

WE WILL NOT refuse to bargain with TEAMSTERS

MREIGHT, TANK LINE & AUTOMOBILE INDUSTRY

MMPLOYEES LOCAL UNION NO. 988 as the exclusive

bargaining representative of our employees in the follow-

ing unit:

All warechousemen and tow motor operators employed

at warehouses in Houston, Texas, managed by corpora-

tions owned and controlled by Gary Stillwell, excluding

office clerical employees, guards, watchmen, and super-

visors within the meaning of the Act.

VE WILL NOT in any other manner interfere with, re-

strain or coerce our employees in the exercise of rights

guaranteed them in Section 7 of the Nationel Labor Rela-

tions Act.

WE WILL offer immediate employment to Phillip Ware,

Kugene Plater, and Emmett Lewis, and make them whole

for any loss of pay suffered by reason of our discrimination

against them as provided in the Decision of the Adminis-

trative Law Judge.

WE WILL offer Clifford Davis, Curtis Mack, Raymond

Mills, and Nathaniel Jones, immediate reinstatment to

their former positions, without loss of seniority and other

privileges, and make them whole for any loss of pay sus-

tained by them as a result of our discrimination, as pro-

vided in the Decision of the Administrative Law Judge.

A-40

WE WILL, upon request, bargain collectively and in

good faith with TEAMSTERS FREIGHT, TANK LINE

& AUTOMOBILE INDUSTRY EMPLOYEES LOCAL

UNION NO. 988 as the exclusive representative of the

employees in the above appropriate unit, and embody in a

signed agreement, any understanding reached.

Houston Disrrisvution Services, Inc.

AND SouTHWEST WAREHOUSE SERVICE

(Employer)

ME wiih iiccaaeis

BNE csceloianveiikinisins Seddgh dusaeasareninneninamdiebanadh

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 di-

rected to the Board’s Office, One Allen Center, 500 Dallas

Avenue, Suite 920, Houston, Texas 77002 Telephone (713)

226-4722.

A-41

UNITED STATES OF AMERICA

Berore Tue Nationan Lasor Reiations Boarp

Cases 23-CA-5448 and 23-C:A-5497

Houston Distrisution Services, Ine.

AND SouTHWEsST WAREHOUSE SERVICE

Teamsters FreicHtT, TANK Line &

AvutomMosBILE INpustry EMPpLoyEEs

Loca Unton No. 988

DECISION AND ORDER

On May 27, 1976, Administrative Law Judge Joel A.

Harmatz issued the attached Decision in this proceeding.

Thereafter, the Respondent filed exceptions and a sypport-

ing brief, and the General Counsel filed cross-exceptions

with a supporting brief.

Pursuant to the provisions of Section. 3(b) of the

National Labor Relations Act, as amended, the National

Labor Relations Board has delegated its authority in this

proceeding to a three-member panel.

The Board has considered the record and the attached

Decision in light of the exceptions and briefs and has de-

cided to affirm the rulings, findings,! and conclusions of the

1The Respondent has excepted to certain credibility findings

made by the Administrative Law Judge. It is the Board’s estab-

lished policy not to overrule an Administrative Law Judge’s

resolutions with respect to credibility unless the clear pre-

ponderance of all of the relevant evidence convinces us that the

resolutions are incorrect. Standard Dry Wall Products, Inc., 91

NLRB 544 (1950), enfd. 188 F.2d 362 (C.A. 3, 1951). We have

carefully examined the record and find no basis for reversing

his findings.

A-42

Administrative Law Judge and to adopt his recommended

Order.’

ORDER

Pursuant to Section 10(¢) of the National Labor Rela-

tions Act, as amended, the National Labor Relations Board

adopts as its Order the recommended Order of the Admin-

istrative Law Judge and hereby orders that the Respond-

ent, Houston Distribution Services, Inc. and Southwest

Warehouse Service, Houston, Texas, its officers, agents,

suecessors, and assigns, shall take the action set forth in

the said recommended Order.

Dated, Washington, D.C. January 12, 197

~~)

CEE HEHE EHH HEHEHE HEHEHE EEE HEHH HEHE EEEEE

John A. Penello, Member

wee siaiittensheniiede . ee

NATIONAL LABOR RELATIONS

BOARD

(SEAL)

MEMBER JENKINS, concurring in part and dissenting

in part:

I am in agreement with many of the findings made by

my colleagues. Like my colleagues, I find that after Re-

* We agree with the Administrative Law Judge’s finding that

there is ample evidence in the record to support a finding of

unlawful discrimination in the cases of Plater, Lewis, and Ware.

As to the remaining alleged discriminatees, the record discloses

that they either failed to file an application, sought specific jobs

unavailable at Respondent’s facility, failed to show up for the

employment interview, or were unfit for immediate employment.

Contrary to Member Jenkins, we would not, in these cireum-

stances, find that a failure to hire these employees was dis-

criminatorily motivated.

A-43

spondent acquired the Spikewood warehouse from S.'T.S.,

it embarked upon an illicit scheme designed to insure that

iess than a majority of its work foree would be composed

of former 8.T.S. employees and that the purpose of this

scheme was to avoid the implications of the Board’s sue-

cessorship doctrine and the obligation to reeognize and

bargain with the Union. I also agree with their findings

that Respondent discriminatorily refused to hire former

S.T.S. employees Plater, Lewis, and Ware in furtherance

of this unlawful scheme; that Respondent became the legal

successor to 8.T.S. and, as such, was obligated to recognize

and bargain with the representative of the predecessor’s

employees; and that, thereafter, Respondent unlawfully

discharged employees Davis, Mack, Mills, and Jones as

part of a continuing effort to thwart union organization

among its employees. Where my colleagues and I differ is

over the reasons behind Respondent's failure to hire five

other former 8S.T.S. employees. The majority is of the view

that in the case of each of these individuals the record

evidence will not support a finding that they would have

been hired, but for Respondent's discriminatory practice.

I disagree and would find that they were denied employ-

ment as a result of Respondent’s unlawful scheme, just

as it is the case with former S.T.S. employees Plater,

Lewis, and Ware.

sriefly, the facts show that after actually taking over

the operation of Spikewood facility Respondent evidenced

its intention to select its work force immediately. At the

time, Respondent realized that it would need fewer em-

ployees than the number employed by 8.T.S. and Respon-

dent’s general manager, Barrett, was instructed by his

superior to retain those 8.T.S. employees who were the

best qualified to perform all the warehouse functions.

Barrett had the means at his disposal to carry out this

A-44

instruction. Available to him were the personnel folders

for all of the S.T.S. employees and the advice and counsel

of Willie Jackson, who had served as the warehouse man-

ager for S.T.S. and had been vetained in a supervisory

capacity by Respondent. Barrett candidly admitted, how-

ever, that he had no knowledge of the competence or incom-

petence of the S.T.S. employees and Respondent does not

claim that its failure to hire certain of the S.T.S. employees

was in any instance based upon their work performance

record.

Whether or not Respondent initially intended to fill its

employment needs by hiring the best qualified persons from

the pool of available S.T.S. employees, no one can say.

However, as previously indicated, the record is abundantly

clear that at some point prior to February 3, 1975,’ the

date set by Respondent for receipt of employment applica-

tions, the determination had been made to hire less than a

majority of its work force from among the group of former

S.T.S. employees and thereby avoid the obligation to

bargain with the Union. To implement this plan, Respon-

dent placed an advertisement in “The Houston Chronicle”

on February 2, seeking job applicants and, as a result of

this ad, six employees were hired, four of whom were

college students with no previous warehouse experience.

Respondent also arranged for the transfer of two employ-

ees from another of its facilities and hired the son of the

corporate president as a regular part-time employee. These

nine employees were matched by the hiring of an equal

number of former S.T.S. employees and thus Respondent’s

total work force was equally divided between former S.T.S.

employees and employees hired from other sources.

In such circumstances as these, it seems quite reasonable

to me to infer that the only reason that the eight discrimi-

3 Unless otherwise indicated, all events occurred in 1975.

A-45

natees were not hired was because Respondent had reached

the quota it discriminatorily established. But even if one

considers each alleged discriminatee separately and _at-

tempts to divine what Respondent would have done if it

had not been discriminatorily motivated, I think the result

arrived at is the same, At the outset, it must be pointed out

that on February 3 the Union made application for em-

ployment on behalf of all the former S.T.S. employees and

the offer was subsequently rejected by Respondent on the

patently false ground that the selections were to be made

on the basis of ability. We have also found that the reasons

offered by Respondent to justify its failure to hire em-

ployees Plater, Lewis, and Ware were contrived in an effort

to mask its discriminatory quota system. One might then

_ask, are the reasons offered to support the failure to hire

the other five alleged discriminatees any less contrived? I

think the answer is no, Respondent did not hire S.T.S. em-

ployee Loring allegedly because his application indicated

that he was applying for a position as truckdriver and

Respondent had no plans for the hiring of truckdrivers at

this facility. But Respondent was well aware of the fact

that for the past 2 years Loring had worked as a ware-

houseman and not a truckdriver and, although Respondent

claimed to be looking for qualified personnel, it did not

offer an experienced warehouseman like Loring the oppor-

tunity to perform the very job he had been doing. S.T|S.

employee Buckner’s application form contains the notation

that he failed to report for a job interview and Respondent

claims this is the reason he was not hired. However, there

is no evidence to indicate that Buckner was ever told to

report for an interview. But, even assuming such a failure

on Buckner’s part, it is still difficult to attach such signifi-

cance to the preemployment interview when you compare

3uckner’s situation with that of employee Curtis Mack. On

A-46

February 2, Respondent called Mack, a former 8.T.S, em-

ployee, at his home and told him to report for work the next

day. At the time of this telephone call, Mack had not even

filed a job application, much less been interviewed, yet

Barrett who professed to have no knowledge concerning

the competency of the S.T.S. employees was willing to

offer employment to an individual who had neither formally

applied for employment nor had been interviewed, Former

S.T.S. employees Hammonds and Alexander were not

hired allegedly because they were injured and thus un-

available to begin work, immediately. Yet, at the time they

made application for employment, neither of them was told

that he would not be considered for employment because of

his injuries, and later, when Hammonds was released for

work by his doctor and again sought employment with

Respondent, he was refused with no reason being given

to him. Former S.T.S. employee Eddie Lee Armstrong

did not file an application for employment and, if his

situation were considered separate and apart from that

of the other diseriminatees, this would serve as a plausible

explanation for his not being hired. But Armstrong's

situation can not be considered in a vacuum and when

one considers the facet that the Union had made applica-

tion on behalf of all S.T.S. employees and the lengths

Respondent was willing to go to employ Curtis Mack, the

reason becomes less than persuasive.

Simply stated, onee the evidence establishes, as it does

here, that Respondent's hiring policies were diserimina-

torily motivated, a prima facie ease for finding diserimina-

tion has been made out on behalf of each of the alleged

discriminatees, It is then the Respondent’s burden to

come forward and establish that its failure to hire these

individuals was for reasons totally unconnected with its

discriminatory policies, This is not the ease here, Accord-

A-47

ingly, I would find the violation as to all eight of the

alleged diseriminatees involved here.

Dated, Washington, D.C, January 12, 1977

as9

eee eee eee eee ee eee ee eee eee ee eee eee eee)

Howard Jenkins, Jr., Member

Nationan Lapor Reratrions Boarp

A-48

Nationa Lasor Revations Boarp,

Petitioner,

v.

Hovston Disrrisution Services, Inxc., and

Souruwest WAREHOUSE SERVICE,

Respondents.

No. 77-1486

Unirep States Court or Apprats,

Kiera Crrevrr.

May 19, 1978.

National Labor Relations Board brought action for

enforcement of its order against employer. The Court of

Appeals, Thornberry, Circuit Judge, held that: (1) evi-

dence sustained finding that successor employer’s refusal

to hire three former employees of predecessor was the

result of a plan to avoid dealing with union, and (2) evi-

dence sustained finding that employer, as a successor em-

ployer, violated the Act by refusing to reeognize and

bargai) with union,

Enforeed.

1. Labor Relations Key 517

National Labor Relations Board is without power to

initiate a proceeding without benefit of an underlying

charge; however, the charge when made is not to be strictly

construed. National Labor Relations Act, §10(b) as

amended 29 U.S.C.A. § 160(b).

2. Labor Relations Key 517

Where original charge named actual employer’s wholly

owned subsidiary, but administrative law judge amended

complaint to include actual employer when he discovered

the identity of the actual employer at hearing, the naming

of the correct corporate entity as employer was not so

A-49

completely outside the original charge that National Labor

Relations Board cou'd be said to have initiated the pro-

ceeding of its own motion. National Labor Relations Act,

§10(b) as amended 29 U.S.C.A. § 160(b).

3. Labor Relations Key 559

Proper test to be applied in refusal to hire cases is

whether there is substantial evidence of union animus, not

whether employer’s failure to hire employees was “solely”

because of employees’ affiliation with union. National Labor

Relations Act, §8(a)(1, 5) as amended 29 U.S.C.A,

§ 158(a) (1, 5).

4. Labor Relations Key 559

Evidence in preceeding before National Labor Relations

Board sustained finding that suecessor employer's refusal

to hire three former employees of predecessor was the

result of a plan to avoid dealing with union. National

Labor Relations Act, § 8(a)(1,5) as amended 29 U.S.C.A,

§ 158(a) (1, 5).

5. Labor Relations Key 223

Successor employer is under no obligation to hire from

pool of former employees of predecessor. National Labor

Relations Act, §8(a)(1, 5) as amended 29 U.S.C.A,

§ 158(a) (1, 5).

6. Labor Relations Key 372

Employer may discharge for good cause, bad cause or

no cause at all, without violating the National Labor Rela-

tions Act, as long as his motivation is not antiunion dis.

crimination and discharge is not punitive for legitimate

concentrated activity protected under the Act. National

Labor Relations Act, § 2 et seq. as amended 29 U.S.C.A.

§ 151 et seq.

A-50

7, Labor Relations Key 599

Mere existence of good cause for discharge is not enough

to vitiate National Labor Relations Board’s finding that

discharge was the result of a plan to avoid dealing with

union unless the good reason was a motivating cause of

the discharge. National Labor Relations Act, § 8(a)(1, 3)

as amended 29 U.S.C.A. § 158(a) (1, 3).

8. Labor Relations Key 521

Administrative law judge’s holding that witness’ com-

petency to testify could be based on the color of his skin

constituted an egregious violation of the federal rules,

and Court of Appeals would only decline to refuse enforce-

ment of National Labor Relations Board’s order because

of cumulative nature of witness’ proposed testimony. Ied-

eral Rules of Evidence, rule 601, 28 U.S.C.A.

9. Labor Relations Key 574

Evidence in proceeding before National Labor Relations

Board sustained finding that employer, as a suecessor

employer, violated the National Labor Relations Act by

refusing to recognize and bargain with union. National

Labor Relations Act, §8(a)(5) as amended 29 U.S.C.A.

§ 158(a) (5).

Application for Enforcement of an Order of the National

Labor Relations Board.

Before THORNBERRY, GOLDBERG and CLARK,

Cireuit Judges.

THORNBERRY, Circuit Judge:

This is an application by the National Labor Relations

Board for enforcement of its order issued against Houston

A-51

Distribution Services, Inc. (Ifouston Distribution) and

Southwest Warehouse Services, Ine. (Southwest). The

Board found that the respondent, a single employer con-

sisting of the two companies, violated Sections 8(a)(3)

and (1) of the National Labor Relations Act, 29 U.S.C. §151

et seq., by refusing to hire three employees formerly em-

ployed by its predecessor, Shipper’s Transportation &

Storage, Inc. (Shipper’s), and by discharging four em-

ployees in order to avoid bargaining with the Union.’ The

Board further found that the respondent was a successor

employer and that a majority of its employees in an ap-

propriate unit had designated the Union as their collective

bargaining representative and that the respondent had re-

fused to bargain with the Union in violation of Section

8(a)(5) and (1) of the Act. The Board’s decision and order

is reported at 227 N.L.R.B. No. 152 (1977). We grant

enforcement.

I.

Southwest complains that the Board proceeded against

it without a charging party ever naming Southwest. South-

west contends that the Board’s action is in violation of

29 U.S.C. §160(b) which requires the Board to issue a

complaint pursuant only te a charge made by a charging

party.”

The original charge named Houston Distributing and

the Board issued a complaint against it. At the hearing

before the Administrative Law Judge (ALJ), it was dis-

1 Teamsters Freight, Tank Line and Automobile Industry Em-

ployees Local Union No. 988.

2 Section 10(b) of the Act provides:

Whenever it is charged that any person has engaged in or is

engaging in any such unfair labor practice, the Board...

shall have power to issue... a complaint stating the charges

in that respect...

29 U.S.C. § 160(b).

——

A-52

covered that although the employees thought they worked

for Houston Distribution, the actual employer was South-

west.’ After this became apparent, the ALJ amended the

complaint to include Southwest.

[1] While Southwest does not contend that the ALJ is

without power to amend the complaint, it urges that the

ALJ cannot do so without an underlying charge specifically

naming Southwest. As Southwest correctly points out, the

Board is without power to initiate a proceeding without

benefit of an underlying charge, NLRB v. Indiana &

Michigan Elect. Co., 318 U.S. 9, 63 S.Ct. 394, 87 L.Ed. 579

(1943); NLRB v. Westex Boot & Shoe Co., 190 F.2d 12,

13 (5 Cir. 1951); however, the charge when made is not to

be strictly construed. In Texas Industries, Inc. v. NLRB,

236 F.2d 128, 132 (5 Cir. 1964), we said:

It is established that this section precludes the Board

from issuing a complaint on its own initiative and

that a charge is a prerequisite to the institution of

proceedings before the Board. N.L.R.B. v. Kohler Co.,

7 Cir. 1955, 220 F.2d 3. However, the charge is not a

formal pleading, and its function is not to give notice —

to the respondent of the exact nature of the charges

against him. N.L.R.B. v. Fant Milling Co., 1959, 360

U.S. 301, 79 S.Ct. 1179, 3 L.Ed.2d 1243; Consumers

Power Co. v. N.L.R.B., 6 Cir. 1940, 113 F.2d 38. This

is the function of the complaint. The charge rather,

serves merely to set in motion the. investigatory ma-

chinery of the Board. It is largely for the benefit of

the Board, not the respondent, so that it may intelli-

gently determine whether and to what extent an

investigation is warranted. Consequently, the Board

has considerable leeway to found a complaint on

events other than those specifically set forth in the

charge, the only limitation being that the Board may

not get ‘so completely outside * * * the charge that it

* Houston Distributing was wholly owned by Southwest.

A-53

may be said to be initiating the proceeding on its own

motion * * *” N.L.R.B. v. Kohler Co., supra. See also

N.L.R.B. v. Reliance Steel Products Co., 5 Cir. 1963,

322 F.2d 49; N.L.R.B. v. Raymond Pearson, Inc., 5 Cir.

1957, 243 F.2d 456.

[2] We do not believe that the addition of the correct

corporate entity is so completely outside the original charge

that the Board could be said to have initiated a proceeding

of its own motion. The distinction is between the total

absence of a charge and a charge made, although not

perfect in every particular. Workingmen are not required

to wander the maze of corporate structure.

Il.

The respondent next brings forward the obligatory sub-

stantial evidence point and an objection concerning the

proper test to be applied in refusal to hire cases.

REFUSAL TO HIRE

Gary R. Stillwell is the owner of Southwest which in

turn owns Houston Distribution. Stillwell was in the mov-

ing and storage business until April 1974 at which time

he sold the moving part of his business and remained in

the storage business. He operated Southwest which had two

employees and was non-union. Stillwell was also a con-

sultant for Weingarten Realty which owned Shipper’s.

Weingarten desired to sell its interest in Shipper’s and

Stillwell formed a new company, Houston Distributing,

to take over Shipper’s operation. Shipper’s had approxi-

mately twenty-five employees and all were told that appli-

cations for employment would be available on February 3.

Stillwell also ran a newspaper advertisement seeking quali-

fied employees. Shipper’s former employees were union

members.

Sa

A-o4

Nine former Shipper’s employees were hired by South-

west. Six new employees were also hired. Former Shipper’s

employees Eugene Plater, Emmett Lewis, and Phillip Ware

were not hired. The Board found that these men were not

hired because of union animus.

THE PROPER BURDEN OF PROOF

(3] The respondent urges that the Board used the wrong

standard in ascertaining the burden of proof in refusal to

hire cases. The respondent insists that the only issue which

the Board should have addressed was whether the failure

to hire the three former employees was “solely” because

of their affiliation with the Union. In Howard Johnson Co.,

Inc. vy Hotel Employees, 417 U.S. 249, 94 S.Ct. 2236, 2243

n.&, 41 L.Ed.2d 46 (1974), Mr. Justice Marshall stated,

“Thus, a new owner could not refuse to hire the employees

of his predecessor solely because they were union members

or to avoid having to recognize the union.”

We do not think this comment was an attempt to formu-

late a test for burden of proof in successorship cases.

Rather, this is a clear example of impermissible conduct

on the part of a successor employer. We do not think that

quotation from Howard Johnson addessed the case in which

the employer had both permissible and impermissible mo-

tives in refusing to hire a predecessor’s former employees.

Indeed, after citing with approval two cases, neither of

which adopts a “sole motivation” test, Mr. Justice Marshall

further states, “There is no suggestion in this case that

Howard Johnson in any way discriminated in its hiring

against the former Grisson employees because of their

union membership, activity, or representation.” Jd.

If the Board were to find for the employees only when

union animus is the sole reason for the refusal to hire,

A-99

the Board could seldomly be upheld. We believe that the

Board’s task in these eases is to find substantial evidence

of union animus. NLRB vy. Foodway of El Paso, 496 F.2d

117, 119 (5 Cir. 1974); K. B. € J. Young’s Super Markets v.

NLRB, 377 F.2d 463 (9 Cir.), cert. denied, 389 U.S. 841,

88 S.Ct. 71, 19 L.Ed.2d 105 (1967); Tri State Maintenance

Corp. v. NLRB, 132 U.S.App.D.C. 368, 408 F.2d 171 (1968).

SUBSTANTIAL EVIDENCE

[4] We are persuaded that the Board’s conclusion that

the three former workers were not hired as a result of a

plan to avoid dealing with the Union is supported by

substantial evidence.

[5] While it is plain that Southwest was under no obli-

gation to hire the entire workforce of Shipper’s Tri State,

supra, 132 U.S.App.D.C. at 370, 408 F.2d at 173, or to hire

exclusively from the pool of former workers, we think that

Southwest’s behavior toward this pool gives the Board

adequate reason to hold that Southwest refused to hire the

three employees in furtherance of a plan to avoid bargain-

ing with the Union. First, it is undisputed that Stillwell

was coneerned about the employee quality at Shipper’s

warchouse. Given the twenty-five former workers to choose

from, good business judgment would dictate that Southwest

hire only the best workers from Shipper’s. Nevertheless,

Southwest never inquired about the quality of the workers,

even though such inquiry could have easily been made.

Second, the reasons advanced by Southwest for not hiring

the three men justify the Board in imputing bad motive to

Southwest. Southwest contends that Plater, Lewis, and

Ware were rejected out of hand because they could not

report to work immediately, their applications were either

incomplete, ambiguous about the job sought, or without

indications of previous warehousing experience. Although

*

A-96

their applications disclose that they were all willing to

report for work no later than February 4, others similarly

situated obtained employment from Southwest. The South-

west hiring agent knew that all of the applications were

made by former Shipper’s employees and that Shipper’s

had employed only warehousemen. It is therefore incon-

ceivable that the hiring agent did not know that the poten-

tial employees were all experienced warehousemen regard-

less of any ambiguity in their applications. Furthermore,

the agents made no attempt to question any of the appli-

eants about their job history, skills, or job preference. We

think that the Board was supported by substantial evidence

on the record taken as a whole.

DISCHARGE OF FOUR EMPLOYEES

[6] It is settled that an employer “may discharge for

good cause, bad cause or no cause at all, without violating

the Act, so long as his motivation is not anti union dis-

crimination and the discharge is not punitive for legiti-

mate concentrated activity protected under the Act.” Fire-.

stone Tire and Rubber Co. vy. NLRB, 449 F.2d d11, 513

(5 Cir. 1971).

(7] The proof adduced at the hearing shows that Wil-

ford Davis, Curtis Mack, Raymond Mills, and Nathaniel

Jones were discharged in the middle of a pay period

without any misconduct proximate to their discharge. More

*The Board also points out that Southwest placed a newspaper

advertisement seeking qualified employees. While such an ad-

vertisement, logically, could be a part of an anti-union plan, we

do not think that the newspaper advertisement in itself can

represent anti-unionism, The employer is under no obligation to

hire from the pool of former Shipper’s employees. Certainly, an

employer who is under no obligation to hire from a particular

_ of employees may seek qualified employees from the public

at large.

A-57

telling is the fact that a Union meeting had been scheduled

to follow shortly after the discharges. This timing evi-

dence may give rise to the inference that the discharges

were motivated by anti-unionism. NLRB y. Central Power

& Light Co., 425 F.2d 1318, 1322 (5 Cir. 1970). The re-

spondent points to the fact that it had good cause to fire

the four workers. However, the mere existence of good

cause for the discharge is not enough to vitiate the Board’s

finding unless the good reason was a motivating cause of

the discharge. Central Power & Light Co., supra; NLRB

v. Southeastern Stages, 423 F.2d 878, 879 (5 Cir. 1970).

This court has not adopted the “but for” test for determin-

ing union animus advanced by the First Cireuit in Coletti’s

Furniture, Inc. v. NERB, 550 F.2d 1292 (1 Cir. 1977).

See Federal-Mogul Corp. v. NLRB, 566 F.2d 1245 (5 Cir.

1978).

[8] At this point the respondent objects to what may

be fairly termed a remarkable colloquy between it and the

ALJ. In order to show that some of the discharged em-

ployees were not good employees, the respondent called

srett Griffin to testify before ALJ Joel Harmatz. Griffin

was hired by Southwest as a result of the newspaper

advertisement placed by Southwest. He was termed

throughout this proceeding as a “college student” although

it appears that he was a full time employee of Southwest.

Griffin is a union member, although not a member of the

relevant union in this proceeding and he is white. ‘The

following are excerpts from the colloquy:

JUDGE HARMATZ: I would also note for the

record that Mr. Griffin and Mr. Tremble (phonetic

are Caucasian, and that all of the alleged diserimina-

tees are black people.

MR. MADDOX: For elarification of counsel, what

is the relevance of that point, vour Honor?

A-98

JUDGE HARMATZ: It’s something that suggests

the possibility of bias, to be quite frank. It’s a possibil-

ity. I don’t know whether it exists, but I think that

people, unfortunately, have allowed their subjection to

their conditioning pattern in a community to influence

their judgment as to people who do not particularly

come from their racial background.

it’s one of the factors that I consider this type of

testimony to be strongly prejudicial about, which I am

not going to accept as objective evidence on which I

necessarily would have to make a credibility resolution.

* * + ”

JUDGE HARMATZ: I think this is a matter of

practical knowledge, and it relates to the competency

of this man’s testimony.

It relates to his capacity. It has some relationship

from my perspective of considerations that hear upon

whether testimony is competent, and whether a parti-

cular witness has a capacity to give such testimony.

And I think it is relevant, and I want anybody who

reviews me to take note of that circumstance.

I have to consider the possibility of race influencing

the objectivity of his judgment.

We have done as Judge Harmatz asks and we, as a review-

ing court, have taken note of the fact that Judge Harmatz

has held, among other things, that a witness’ competency

to testify can be based on the color of his skin. We are

amazed,

The National Labor Relations Board is required to con-

duet its proceedings “so far as practicable” in accord with

the federal rules of evidence. 29 C.F.R. §§ 101.10(a), 102.39

(1976). The word “practicable” is not a earte blanche to

ignore the rules of evidence, This is a term with meaning

and substance. There is no conceivable reason why NLRB

A-59

proceedings should not be conducted under the accepted

rules of competency. Rule 601 Federal Rules of Evidence

states:

Every person is competent to be a witness except as

otherwise provided in these rules. However, in civil

actions and proceedings, with respect to an element

of a claim or defense as to which State law supplies

the rule of decision, the competency of a witness shall

he determined in acordance with State law.

See NLRB vy. Decker & Sons, 569 F.2d 357 (5 Cir. 1978).

We find it difficult to countenance such an egregious viola-

tion of the federal rules and only decline to refuse enforce-

ment of the Board’s order because of the cumulative nature

of the proposed testimony.®

III.

[9] Finally, the Board found that the respondent, as a

successor employer, violated Section 8(a)(5) of the Act

by refusing to recognize and bargain with the Union.

Southwest contends that it is not a successor employer

and is therefore not required to bargain with the Union.

Howard Johnson Co vy. Hotel and Restaurant Employees

and Bartenders Int’l Union, 417 U.S. 249, 261-62, 94 S.Ct.

2236, 41 L.Ed.2d 46 (1974); Golden State Bottling Co. v.

NLRB, 414 U.S. 168, 184 n.6, 94 S.Ct. 414, 38 L.Md.2d 388

51t is further worth noting that distinguished historians from

various viewpoints all agree that one of the primary reasons for

the fourteenth amendment was the existence of “Black Codes”

in some states which frequently prohibited blacks from testify-

ing against whites. Agreement is universal that these codes were

unconstitutional and it has long been thought that testimonial

competency cannot be constitutionally based on race. Of course,

the fourteenth amendment is directed at the states, but the same

would hold true in an NLRB proceeding because of the fifth

amendment. Sce R. Berger, Government by Judiciary, 26

(1977); H. Hyman, A More Perfect Union, 420 (Sentry Ed.

1973).

A-60

(1973); Burns Tnternational Security Services, Tne. v.

NVLPB, 406 U.S, 272, 280-81, n, 5, 92 S.Ct. 1571, 82 L.KBd.2d

61 (1972),

The Board argues that Southwest comes within the

suecessorship doetrine because the essential nature of the

business did not change® and more than one-half of South-

west’s employees were union members.

The Board contends that the relevant measuring day

to determine if the company had a majority of Union

members is the initial day of operations. Southwest, on

the other hand, contends that the relevant measuring day

ix after a full complement of employees had been employed

and a shakedown period completed. The respondent urges

either a six or nine week shakedown period. Southwest

relies on the following statement in Burns, supra, 406 U.S.

at 294-95, 92 S.Ct. at 1586:

In other situations, however, it may not be clear until

the successor employer has hired his full complement

of employees that he has a duty to bargain with a union,

since it will not be evident until then that the bargain-

ing representative represents a majority of the em-

ployees in the unit as required by §9(a) of the Act,

29 U.S.C. § 159(a).

In Pacific Hide & Fur Depot, Inc, v. NLRB, 553 F.2d 609

(9 Cir. 1977), the Ninth Cireuit in determining the rela-

vant measuring date for successorship liability examined

this passage from Burns. In rejecting the argument similar

to the one advanced here by the Board, the court found

that in some business situations, the first day of operations

is not the controlling date for determining successorship

liability and that in some cases the full complement of em-

® We agree that the employing industry remained substantially

the same as its predecessor. NLRB vy. Zayre Corp., 424 F.2d

1159, 1162 (5 Cir. 1970).

A-61

ployees is not reached until after a period of business

operations, We believe that the Ninth Circuit has correetly

interpreted this passage from Burns, Practical business

necessity requires that some new employers be given some

time to chanwe the character of the new business. The first

day of operations doves not, in every case, freeze time and

solidify existing relations.

Using the Pacific Ilide approach Southwest argues that

it needed an opportunity to clean, organize and inventory

the new facility as well as integrate the new facility with

the old one before reaching a full complement of employees.

Southwest contends that about sixty days after it took

over operations the shakedown was complete and on that

date since there were seven non-union workers and only

four union workers there was no duty to bargain with the

union.’ Pacific Hide is in point, except for one very im-

portant distinction that the respondent neglects in its cal-

cwations. In Pacific Hide there was no improper refusal

to hire and no improper firings. In the present case three

workers were not hired because of Union bias and four

were fired because of Union bias. As we stated in NLRB vy,

Foodway of El Paso, 496 F.2d 117 (5 Cir. 1974) at 120:

Foodway next contends that substantial evidence fails

to show that the Union represented a majority of the

employees and that it was therefore under no duty to

bargain with the Union. It is manifest that but for

Foodway’s discriminatory refusal to offer employment

to Allied’s unit employees, the Union would have econ-

tinued to enjoy a majority representative status. We

decline to permit an employer to rely upon its own

7In Pacific Hide, the Ninth Circuit found it unnecessary to de-

termine the exact measuring day. Given our disposition of this

case, we too, decline to name an exact measuring day. Our hold-

ing is that the measuring day in every case is not the first day

of operation.

A-62

wrongdoing and thus avoid its legal responsibilities.

See Burns, supra, at 280, 1.5.

Including the seven Union members into the ealeulations,

it is apparent that the Union represented more than one-

half of the respondent’s employees and the respondent has

a duty to bargain with the Union,

ENFORCED.

SS

A-68

UNITED STATES COURT OF APPEALS

For Tue Fiera Crrevrer

No. 77-1486

NationaL Lanor Revarions Boarp,

Petitioner,

v,

Ilousron Disrrinution Services, [yxe., and

SourHwest WAREHOUSE SERVICE,

Respondent.

JUDGMENT

Before: Thornberry, Goldberg and Clark, Circuit Judges.

THIS CAUSE came on to be heard upon an application

of the National Labor Relations Board for the enforcement

of a certain order issued by it against Respondent, Hous-

ton Distribution Services, Inc., and Southwest Warehouse

Service, Houston, Texas, its officers, agents, successors and

assigns on January 12, 1977. The Court heard argument

of respective counsel on November 10, 1977, and has con-

sidered the briefs and transcript of record filed in this

cause. On May 19, 1978, the Court being fully advised in the

premises, handed down its opinion granting enforcement

of the Board’s order.

ON CONSIDERATION WHEREOF, it is hereby or-

dered and adjudged by the United States Court of Appeals

for the Fifth Cireuit that the said order of the National

Labor Relations Board in said proceeding be enforced,

and that Respondent, Houston Distribution Services, Ine.,

and Southwest Warehouse Service, its officers, agents,

suecessors and assigns abide by and perform the directions

of the Board in said order contained.

Costs are taxed against respondent.

E\ntereD: June 26, 1978

Issued As Mandate:

A-64

CERTIFICATE OF SERVICE

I, DAVID T. MADDOX, attorney for Petitioners Hous-

ton Distribution Services, Inc. and Southwest Warehouse

Services, Inc. hereby certify that on this 21st day of Sep-

tember, 1978, I have served three true and correct copies

of the foregoing Appendix on Mr. Elliott Moore, Deputy

Associate General Counsel, National Labor Relations

Board, Office of the General Counsel, Washington, D. C.,

20570 by mailing same through the United States mail to

his address of record, air mail postage prepaid.

OEE H EEE EHH EEE HEHEHE EEE E HEHE EES

DAVID T. MADDOX

i i a