Petition for Writ of Certiorari — International Chemical Co. v. National Labor Relations Board

IN THE

Supreme Court of the United States

October Term 1991

INTERNATIONAL CHEMICAL COMPANY

AND EASTOAK COAL COMPANY,

Petitioners,

V.

NATIONAL LABOR RELATIONS BOARD,

Respondent.

ON PETITION FORA WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE TENTH CIRCUIT

PETITION FOR A WRIT OF CERTIORARI

McCormMIckK, ANDREW & CLARK

A Professional Corporation

Stephen L. Andrew

D. Kevin Ikenberry

Counsel of Record

Suite 100, Tulsa Union Depot

111 East First Street

Tulsa, Oklahoma 74103

(918) 583-1111

Attorneys for International Chemical

Company and Eastoak Coal

Company

QUESTIONS PRESENTED FOR REVIEW

|. What are the elements which must be proven by the

General Counsel for the National Labor Relations Board

(NLRB) to establish a joint employer relationship under

Boire v. Greyhound Corporation, 376 U.S. 473 (1964), for

purpose of establishing who is an employer under the

National Labor Relations Act?

2. Whether, contrary to Atchison, Topeka and Santa Fe

Railroad Company v. Board of Trade, 412 U.S. 800, 808

(1973), the NLRB departed in this case, without explanation,

from its previous formulation of the joint employer theory.

3. Whether the National Labor Relations Board and the

Court of Appeals denied International Chemical Company

(ICC) due process under the law when they found ICC liable

for a violation of the National Labor Relations Act under the

single employer theory when the joint employer theory was

the only one alleged and tried.

4. Whether there is substantial evidence to support the

NLRB’s finding that ICC and Eastoak Coal Company were

joint employers with Hobbs and Oberg Mining Company,

Inc.

TABLE OF CONTENTS

Page

Cieicreenn Cap TG TI civics ceccccvencccauwcesceciacosnsteonesexteacsis |

Seen aE FOI: aiievcneccedintalicdike neces aaacneaee: l

NN OE Gi GI nc nicdosickesecseereerne ee 2

Argument swistnictuowsovespnquiheiosoe'saledlawestnsaleee tea eee

NE NT Tw er A LSE Ne 7

PIII oinsoneiveccctssestesnelaruisonatesmmsi adeno A-1

TABLE OF AUTHORITIES

Cases:

Boire v. Greyhound Corporation,

S70 US: Gro GQ iaikiiccec ee 3.5

Clinton's Ditch Cooperative Co., Inc. v. NLRB,

778 F.2d 132 (2nd Cir. 1985)

cert denied 107 S. Ce. GT CHG ooccccsccccseceeersececestsensecvers 6

Davis v. NLRB,

ew Bs fy Le | nn nen 6

International Shipping Association, Inc.,

297 NLRB No. 172, 134 LRRM (BNA) 1035 (1990) 3,4

Island Creek Coal Company,

ZFS WELTER OSG (IGOD) wins deccicssccen- conse

'Pursuant to Rule 21.1(b), the only parties in the Court of Appeals and

NLRB proceedings which are not disclosed in the caption of this case is

Hobbs and Oberg Mining Company, Inc. and the Oklahoma Coal Miners

Union. There are no parent or subsidiary companies of Petitioners other

than wholly owned subsidiaries.

Cases: (Continued)

Laerco Transportation,

Se I ID cccaccccvesensenxevseseserayscarseocesoeseytenseie 3

Miscellaneous Drivers and Helpers Union

Local No. 610 v. NLRB,

Ce NG | a E 6

NLRB vy. Browning-Ferris Industries

EE CPE, OMB Dicececerescevscscenconstvocoseevestins 4,5

Parklane Hosiery Co., Inc.

203 NLRB 597 (1973)

amended 207 NLRB 999 (1973) ...........ccccceecececeeeeeceeeeees 3

Pulitzer Publishing Company v. NLRB,

618 F.2d 1275 (8th Cir. 1980)

Se RR eS. |) 6

Radio Union Television Broadcast Technicians

Local 1264 v. Broadcast Service,

tT cestansvustnnedncensbancters 3

Sheeran v. American Commercial Lines, Inc.,

ee OEE os ccowesrseucvnavvecenishéverstoencaves 6

TLI, Inc.,

chs vaccnsvasicbvevenensbeveccsnacnsuwenel

Constitution and statutory provisions:

Ne scone clive cisvcacecisevesescvarsesessvareseosesetves?

circa ce sciinuysséstexdcanesesnosev éneeversnneunaa; ya,

a ork jcedneatsvesvtntsvesveenssenniededenenasgoeel

—

IN THE

Supreme Court of the United States

October Term 1991

INTERNATIONAL CHEMICAL COMPANY

AND EASTOAK COAL COMPANY,

Petitioners,

V.

NATIONAL LABOR RELATIONS BOARD,

Respondent.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE TENTH CIRCUIT

CITATION TO DECISIONS BELOW

The National Labor Relations Board’s decision

appears in 197 NLRB No. 85, 133 L.R.R.M. (BNA) 1251

(1990). The Court of Appeals’s decision is an unpublished

Order and Judgment. Both decisions are included in their

entirety in the appendix to this Petition.

STATEMENT OF JURISDICTION

The Order and Judgment of the United States Court

of Appeals for the Tenth Circuit was filed August 14, 1991.

No petition for Rehearing was filed. This Court has

jurisdiction pursuant to 28 U.S.C. §1254(1).

STATEMENT OF THE CASE

The Judgment of the Court of Appeals for which review

is sought enforced an Order of the National Labor Relations

Board (NLRB) pursuant to that Court’s jurisdiction under 29

U.S.C.§ 160(e).

Petitioner Eastoak Coal Company (“ECC”) is the wholly-

owned subsidiary of Petitioner International Chetnical

Company (“ICC”). Since January, 1985, Hobbs and Oberg

Mining Company, Inc. (“Hobbs”) has owned a coal mine in

Porter, Oklahoma. Because Hobbs was not producing coal in

sufficient quantities to meet its commitments pursuant to a

contract with ICC, it contracted with ECC to develop and

manage a strategy for mining the coal more efficiently.

ECC’s representative at the mine was Larry Blevins.

On May 31, 1988, Hobbs, because of severe financial

problems, was forced to close down the mine and lay off all

of its employees: Hobbs, both before and after the closing,

offered to sell the mine to ECC. These offers were rejected.

After approximately four days of negotiations, however,

Hobbs agreed to subcontract its mining operations to ECC.

This assignment relieved Hobbs of all participation in the

mining operation while allowing it to retain ownership of its

mine.

After ECC reopened the mine, the record shows only four

former Hobbs employees applying for work with ECC. Of

those four, only one was denied employment. After it took

over the mine, ECC did not assume Hobbs’s collective

bargaining agreement. The Union also made no bargaining

demand on ECC once ECC became the employer.

The NLRB adopted, with slight modification, — the

decision of the Administrative Law Judge (“ALJ”). That

decision found that ICC and ECC violated the National

Labor Relations Act as follows:

1. Hobbs’s termination of the employees when the mine

was shut down was a violation of 29 U.S.C. §158(a)(3). ICC

2

— A947 se =

and ECC were held liable for those violations on the theory

that they were joint employers with Hobbs when the

termination occurred.

2. ECC and ICC, as joint employers with Hobbs, refused

to recognize and bargain with the Union and repudiated the

collective bargaining agreement after the mine was reopened,

in violation of 28 U.S.C. §158(a)(5) and (1).

3. In violation of 29 U.S.C. §158(a)(3), ICC and ECC

refused to hire two former Hobbs employees after the mine

was reopened.

The Court of Appeals enforced the Order of the NLRB

without modification.

ARGUMENT

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

this Court held that two or more independent legal entities

may both be found to be employers under the National Labor

Relations Act if they “share or co-determine those matters

governing [the] essential terms and_ conditions of

employment” of the employees whose rights under the Act

have been violated. The National Labor Relations Board has

followed this “joint employer” theory. See, e.g., Laerco

Transportation, 269 NLRB 324, 325 (1984); TLI, Inc., 271

NLRB 798 (1984); Island Creek Coal Company, 279 NLRB

858, 863 (1986); and International Shipping Association,

Inc., 297 NLRB No. 172, 134 L.R.R.M. (BNA) 1035 (1990).

Hlowever, when the entities in question are interrelated,

rather than independent, the NLRB, rather than applying the

joint employer theory, has applied a “single employer

theory” based on factors approved by this Court in Radio

Union Television Broadcast Technicians Local 1264 vy.

Broadcast Services, 380 U.S. 255 (1965). These four factors

are (1) functional interrelation of operations; (2) centralized

control of labor relations; (3) common management; and (4)

common ownership or financial control. Parklane Hosiery

3

Co., Inc., 203 NLRB 597, 612 (1973), amended 207 NLRB

999 (1973). The NLRB maintains a clear distinction between

the single employer theory and the joint employer theory.

TLI, Inc., 271 NLRB 798, 802 (1984).

In this case, as the ALJ specifically found, the only

theory alleged and tried in the General Counsel’s case against

ICC and ECC was the joint or theory, not the single

employer theory (ALJ, A-41).2 Nevertheless, the ALJ found

that ICC and ECC were joint employers because of his

conclusion that they were operated as a “single, integrated

enterprise.” (ALJ, A-29) In other words, he found them to be

a “single employer.” See NLRB v. Browning-Ferris

Industries, 691 F.2d 1117, 1122 (3d Cir. 1982), where the

phrase “single integrated enterprise” is used to define “single

employer” Because ICC was only on notice that it was

defending against the joint employer theory, imposing

liability upon it under the single employer theory deprived

ICC of due process under the law.

In formulating the joint employer theory in this case, the

NLRB has also departed, without explanation, from its

previous statement of the theory. As noted in International

Shipping Association, 297 NLRB No. 172 at n.8, the NLRB

once held to the “old theory, which enabled joint employer

status to be found if the alleged joint employer ‘exercised

effective control’ over the working conditions of the

employees.” The Board now requires, however, that before a

joint employment relationship will be found, there must be

proof of actual control over how the work of employees is to

be performed. Island Creek Coal Company, 279 NLRB 858,

863 (1986). Determination of where and when certain tasks

are to be performed is not considered by the NLRB to be

control over matters of employment. /d. In addition,

although a company may be “in overall charge of the

2“ ALJ" refers to the opinion of the Administrative Law Judge which is

included in the appendix of this petition. “A-41”" refers to the page of the

opinion as it appears in the appendix

4

oe

facility,” that fact does not establish that the company is a

joint employer with another company that actually employs

the employees at the facility. International Shipping

Association, 297 NLRB No. 172 (1990).

In this case, however, the NLRB, in adopting the ALJ's

decision, reverted to its old theory without explanation in

holding that ECC’s involvement at the policy level at the

mine prior to its closing, made it a joint employer with Hobbs

and Oberg.? Furthermore, rather than following this Court's

pronouncement in Boire v. Greyhound Corporation that joint

employment is found if two entities “share or co-determine

those matters governing the essential terms and conditions of

employment,” the Board, through the ALJ, held that a

company’s involvement at the policy level which “affects”

the terms and conditions of employment at the plant (as

opposed to controlling how work is to be performed) is

adequate to establish that company as a joint employer.

Specifically, the ALJ held:

Joint employer status is not limited to routine

matters of supervision, but includes the policy

level that controls the mundane affairs of the

pit level. This is implicit in the concept of

meaningfully affecting the terms and

conditions of employment of the workers.

(ALJ, A-46)

Confusion over what constitutes a joint employer exists

not only within the NLRB itself, but also between the Courts

of Appeal. The Third Circuit maintains the NLRB’s usuat

distinction between the joint employer and single employer

theories. NLRB v. Browning-Ferris Industries, 691) V.2d

1117 (3d Cir. 1982). On the other hand, the Eighth Circuit,

3See, e.g., Island Creek Coal Company, 279 NLRB 858 (1986) where

virtually the same facts yielded a result opposite the one reached in this

case.

5

in Pulitzer Publishing Company v. NLRB, 618 F.2d 1275 (8th

Cir. 1980), cert. denied 440 U.S. 875 (1980) and

Miscellaneous Drivers and Helpers Union Local No. 610 v.

NLRB, 624 F.2d 831 (8th Cir. 1980), has imposed a single

employer standard in joint employer situations. The Sixth

and Seventh Circuits have created a hybrid standard for

determining joint or single employment relationship by

merging the standards in Boire and Radio Union Television.

See Davis v. NLRB, 617 F.2d 1264, 1271 (7th Cir.1980);

Sheeran v. American Commercial Lines, Inc., 683 F.2d 970

(6th Cir. 1982). The Second Circuit in Clinton’s Ditch

Cooperative Co., Inc. v. NLRB, 778 F.2d 132, 138 (2d Cir.

1985), cert. denied 107 S.Ct. 67 (1980), has not endorsed

either theory and has articulated five factors of its own for

resolving single and joint employer cases. Because of this

confusion in the circuits and the NLRB, there is a lack of a

well-defined standard to which those charged with unfair

labor practices may look to in defending themselves. In

order to resolve this confusion, this Court should review the

Judgment of the Court of Appeals enforcing the Order of the

NLRB.

6

CONCLUSION

For the reasons set forth above, this Court should grant

this Petition for Writ of Certiorari to the United States court

of Appeals for the Tenth Circuit.

McCormick, ANDREW & CLARK

A Professional Corporation

Stephen L. Andrew

D. Kevin Ikenberry

Counsel of Record

Suite 100, Tulsa Union Depot

111 East First Street

Tulsa, Oklahoma 74103

Attorneys for International Chemical

Company and Eastoak Coal

Company

APPENDIX TO PETITION FOR WRIT OF

CERTIORARI

Filed August 14, 199]

UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

NATIONAL LABOR RELATIONS BOARD,

No. 90-9523

Petitioner, (NLRB No. 16-CA-13286)

-VS-

HOBBS & OBERG MINING COMPANY, INC.,

INTERNATIONAL CHEMICAL COMPANY and

EASTOAK CHEMICAL COMPANY

Respondents.

OKLAHOMA COAL MINERS UNION,

Real Party in Interest.

ORDER AND JUDGMENT*

Before MCKAY and LOGAN, Circuit Judges, and

WINDER, District Judge**

* This order and judgment has no precedential value and

shall not be cited, or used by any court within the Tenth

Circuit, except for the purpose of establishing the doctrines

of the law of the case, res judicata, or collateral estoppel.

10th Cir. R. 36.3.

** The Honorable David K. Winder, United States District

Judge for the District of Utah, sitting by designation.

A-2

CO

This matter is before the court on the application of the

National Labor Relations Board (NLRB) for the enforcement

of its order issued against Hobbs & Oberg Mining Company

(H&O), International Chemical Company (ICC), and Eastoak

Chemical Company (“ECC”), (collectively, ““the

Companies”). The NLRB issued an Order on January 31,

1991 requiring the Companies to cease and desist from unfair

labor practices relating to interfering with, restraining, or

coercing employees in the exercise of their statutory rights.

The Order directs the Companies (1) to bargain with the coal

miners’ Union (on request of the Union); (2) to terminate the

June 4, 1897, contract mining agreement involving work of

the bargaining unit; (3) to offer all bargaining unit employees

terminated on May 31, 1987, immediate and full

reinstatement with full reimbursement for any loss of

earnings; (4) to remove from employees’ files any references

to the employees’ unlawful discharges; and (5) to post an

appropriate notice.

On September 1, 1988 an administrative law judge

(“ALJ”) heard the case and issued an Order which was

substantively the same as the modified Order of the NLRB.

The Companies filed objections to this Order. The NLRB’s

general counsel filed a limited exception to the Order,

objecting to the remedy of the ALJ.

The NLRB, by a three-member panel, affirmed the

decision of the ALJ with a modification in the remedy as

proposed by the general counsel. The NLRB found that

H&O, ICC and ECC were joint employers and that the

Companies violated sections of the National Labor Relations

Act (“Act”), specifically, 29 U.S.C. § 158(a) (3) and (1) and

29 U.S.C. § 158 (a) (S) and (1).

Since January 1985, H&O operated a coal mine in Porter,

Oklahoma. H&O contracted to sell coal to ICC but in late

1986 was unable to supply the tonnage required the contract.

ICC placed its employee, Mr. Blevins, in charge of the mine.

In May 1987, H&O closed the mine and terminated all

A3

In May 1987, H&O closed the mine and terminated ll

employees. The mine reopened under the control of the

Companies. The Companies lowered wages, eliminated

benefits, and did not rehire employees involved in the coal

miners’ Union.

The conclusions of the ALJ were factual determinations

based upon credibility findings. These were affirmed by the

NLRB. This court will not reverse factual determinations

unless they are not supported by substantial evidence in the

record as a whole. Universal Camera Corp. v. NLRB, 340

U.S. 474, 487-88 (1951). The court concludes there is

substantial evidence to support the findings of the ALJ and

the NLRB. The court further agrees with the NLRB’s

finding that the Companies were joint employers within the

meaning of Section 2(2) of the Act, 29 U.S.C. § 152(2).

Thus, we are in accord with the NLRB’s conclusions and

affirm substantially the reasons stated in the orders of the

NLRB and the ALJ.

Entered for the Court

David K. Winder

District Judge

A-4

297 NLRB No. 85

UNITED STATES OF AMERICA

BEFORE THE NATIONAL LABOR RELATIONS BOARD

HOBBS & OBERG MINING COMPANY, INC.,

INTERNATIONAL CHEMICAL COMPANY AND

EASTOAK COAL COMPANY, JOINT EMPLOYERS

and Case 16--CA--13286

OKLAHOMA COAL MINERS UNION

DECISION AND ORDER

On September 1, 1988, Administrative Law Judge

Richard J. Linton issued the attached decision. Respondent

Hobbs & Oberg Mining Company, Inc. (Hobbs) and

Respondents International Chemical Company (ICC) and

Eastoak Coal Company (ECC) filed exceptions and

supporting briefs. The General Counsel filed a limited

exception and a supporting brief and a brief in support of the

judge’s decision.

The National Labor Relations Board has delegated its

authority in this proceeding to a three-member panel.

The Board has considered the decision and the record in

light of the exceptions and briefs and has decided to affirm

the judge’s rulings, findings, ! and conclusions as modified,

IThe Respondents have excepted to some of the judge’s credibility

findings. |The Board's established policy is not to overrule an

administrative law judge’s credibility resolutions unless the clear

A-5

and to adopt the recommended Order as modified.

1. We adopt the judge’s finding that since February 1987

Hobbs, ICC and ECC have acted as joint employers of the

employees in the bargaining unit. In so finding (regarding

the pre-May 3, 1987 period), we note particularly (though not

to the exclusion of other facts noted by the judge) Larry

Blevins’ March 1987 comment to Union President Dean that

Blevins was “running” the job, that “Hobbs and Oberg no

longer have anything to do with the job, they’re out,” and

that if there was any union business to discuss from that time

on, Dean should talk with Blevins; Blevins’s March or April

1987 statement to welder-mechanic Walker, “I’m the boss,

and you do what I tell you ‘» do;” Blevins’s March 1987 role

in resolving the contract dispute with the Union over the

issue of Sunday pay; and Blevins’s March 1987 participation

with James Hobbs and Ron Sisney in unsuccessfully trying to

persuade Walker to convert to a contract welder-mechanic.

We do find it unnecessary, however, to rely on Blevins’s

alleged role in hiring Sisney.

2. We agree with the judge’s finding that ICC is liable as

a joint employer. As noted by the judge, the evidence shows

that ICC, through Vice President Kelley, made the policy

preponderence of all of the relevant evidence convinces us that they are

incorrect. Standard Dry Wall Products, 91 NLRB 544 (1950), enfd. 188

F.2d 362 (3d Cir. 1951). We have carefully examined the record and find

no basis for reversing the findings.

The Respondent ICC and ECC assert that the judge was an advocate

for a preconceived theory of liability and, in essence, demonstrated bias.

After a careful examination of the entire record, we are satisfied that this

claim is without merit.

We agree with General Counsel's limited exception to the judge's

proposed remedy for the Sec. 8(a)(5) violation, and accordingly extend

the period of time for which the employees should be made whole for the

unlawful unilateral changes to include the time from the expiration of

collective-bargaining agreement until the parties negotiate a new

agreement or bargain to a lawful impasse.

A-6

decisions for the ICC companies regarding coal, and

although ECC was the manager under the written agreement

of March 24, 1987, with Hobbs, in practice Kelley directed

the operations so as to serve the interests of ICC, ECC, and

Hobbs. In further support of the judge’s finding that ICC is

liable under an agency theory, we note that although the

complaint refers to ICC and ECC, ICC filed the answer and

signed it ICC; Kelley assigned Blevins, an employee at Inter-

Chem, to work at the mine; Hobbs entered into discussions

with ICC representatives that culminated in the March 24

management agreement with ECC; after the May 31, 1987

closure of the mine, Hobbs’s co-owner, Chulick, met with

ICC representatives and reached agreement that ECC would

operate as a contract miner; and Blevins contacted ICC’s

attorney to get advice over the contract dispute regarding

Sunday pay.

3. Respondents ECC and ICC contend that they were

denied due process because the judge found that the

Respondents were joint employers after the closing of the

mine based on a theory that they assert was not alleged in the

complaint, relying instead on an “unstated theory that the

June 4 contract was a sham.” We reject this contention and

find that the complaint was worded broadly enough to

support the allegation that the June 4, 1987 subcontracting

arrangement was a sham and that the joint employer

relationship continued beyond this date. We note that the

Respondents do not now claim that they were precluded from

presenting exculpatory evidence, nor do they argue that they

would have altered the conduct of their case in any particular.

Although Respondents ECC and ICC now claim that they

had no evidence of the specific basis to find joint employer

after June 4, we note, as did the judge, that Hobbs argued in

its brief to the judge that the June contract mining agreement

is not a sham transaction to avoid the collective-bargaining

agreement or to discriminate against its former employees.

Accordingly, we are fully satisfied that the Respondents

A-7

were not denied due process because of the alleged variance

between the complaint and the judge’s theory for finding

joint employer status after June 4, and that the issue of

whether a joint employer relationship existed after June 4

was fully litigated.

4. We agree with the judge that the Respondents violated

Section 8(a)(3) of the Act by terminating the employees of

the bargaining unit on May 31.3 In so finding, we rely on

the strong circumstantial evidence here to establish unlawful

motivation. In particular, we rely on Blevins’s expressions

of blatant antiunion animus, and Sisney’s increased

displeasure with and condemnation of the collective-

bargaining agreement, its restrictions, and the independence

it gave the bargaining unit, noted by the judge, prior to the

May 31 closing. We find particularly ominous Blevins’s

comments to Stephens in late May that the “company” would

be a lot better off without the Union, and if the men did not

want to work the way he wanted them to, “they’d just close it

down; close the mine and open it up under a different name

and go ahead and dig coal.” Although Kelley denies that

Blevins spoke with him about his frustrations with the

collective-bargaining agreement, the judge discredited

Kelley’s denial of any pre-June discussion or pre-June

agreement for the subcontract, and presumably any talk of

3We also agree that the Respondent violated Sec. 8(a)(5) and (1) of the

Act with respect to refusal to recognize and bargain with the Union and

repudiation of the contract. Respondent Hobbs argues that these actions

should be viewed as a decision to close the mine followed by a

subsequent decision to reopen under ECC’s management. As the judge

correctly reasoned, Otis Elevator Co., 269 NLRB 891 (1984), which

Respondent Hobbs cited as authority for the proposition that these were

entrepreneurial actions that are subject to the mandatory bargaining

abligation, is inapposite when, as here, the actions in question are shown

to have been motivated by union considerations. See, e.g. Mid-South

Bottling Co., 287 NLRB No. 146, slip op. 3 (Feb. 29, 1988), enfd. 876

F.2d 458 (Sth Cir. 1989).

A-8

evading the contract. It is clear that toward the end of May

1987 Chulick approached ICC about Hobbs’s financial

downturn when Kelley turned down Chulick’s offer to buy

Hobbs. It is also clear that Kelley was aware that Hobbs’s

financial situation was reaching the critical stage and one

option Hobbs had was to close. That some discussion about

subcontracting or evading the contract occurred before May

31 is evident from Sisney’s comment to Phillip Thomas on

May 31 that he should fill out an application and that when

the mine reopened it would be “nonunion.” Moreover, we

rely on Blevins’s comments to Dean and Walker after the

mine reopened in June that he had done away with the Union

as he had always wanted to do, and “we’re not going to honor

the contract. Now that I’ve got rid of the Union, I can work

whoever I want or whatever for the same wages.” Based on

the above, we find that the General Counsel made a prima

facie case of an 8(a)(3) violation by laying off and refusing to

hire the employees, and that the Respondent did not meet its

burden of showing that the closing, layoffs, and failure to

rehire certain employees would have occurred even in the

absence of a union. We note here that Hobbs’s co-owner,

Chulick, did not testify and infer that his testimony would

have been adverse to Hobbs’s interest. We find it

unnecessary, however, to rely on the judge’s further

elaboration of what Chulick would have testified to had he

been called to testify.

ORDER

The National Labor Relations Board adopts _ the

recommended Order of the administrative law judge as

modified below and orders that the Respondents Hobbs &

Oberg Mining Company, Inc., International Chemical

Company and Eastoak Coal Company, Porter Oklahoma,

their officers, agents, successors and assigns, shall take the

action set forth in the Order as modified.

A-9

1. Substitute the following for paragraph 2(d).

"(d) Offer all bargaining unit employees terminated on

May 31, 1987, immediate and full reinstatement to their

former jobs, or, if those jobs no longer exist, to substantially

equivalent positions. Do this without prejudice to their

seniority or any other rights or privileges previously enjoyed.

Discharge, if necessary, any employees hired in the interim.

Make the bargaining unit employees whole for any loss of

earnings and other benefits suffered as a result of the

discrimination against them, and as a result of the repudiation

of the collective-bargaining agreement, in the manner set

forth in the Board’s decision modifying the remedy.”

Dated Washington, D.C. January 31, 1990.

James M. Stephens, Chairman

Mary Miller Cracraft, Member

Dennis M. Devaney, Member

(SEAL) NATIONAL LABOR RELATIONS BOARD

A-10

UNITED STATES OF AMERICA

BEFORE THE NATIONAL LABOR RELATIONS BOARD

DIVISION OF JUDGES -

ATLANTA BRANCH OFFICE

HOBBS & OBERG MINING COMPANY, INC.,

INTERNATIONAL CHEMICAL COMPANY, AND

EASTOAK COAL COMPANY, JOINT EMPLOYERS

and Case 16-CA-13286

OKLAHOMA COAL MINERS UNION

Ruth Small, Esq. (NLRB Region 16),

Fort Worth, TX, for the General

Counsel.

Stephen L. Andrew, Esq. and with him

on brief, D. Kevin Ikenberry, Esq.

(McCormick, Andrew & Clark),

Tulsa, OK, for Respondents

International Chemical Company

and Eastoak Coal Company.

R. Michael Lowenbaum, Esq. and with

him on brief, Kenneth E.

Fleischmann, Esq. (Thompson &

Mitchell), St. Louis, MO, for

Respondent Hobbs & Oberg Mining

Company, Inc.

Thomas F. Birmingham, Esq. and David

Weatherford, Esq. (Ungerman,

Conner & Little), Tulsa, OK,

for the Charging Union.

A-10

DECISION

RICHARD J. LINTON, Administrative Law Judge

Statement of the Case

In this joint employer case there are three principal

questions. First, were International Chemical Company

(ICC) and Eastoak Coal Company (ECC) joint employers

with Hobbs & Oberg Mining Company, Inc. (Hobbs) for the

period of March to May 31, 1987. Second, were they such

for the period of June 1987 and beyond following Hobbs’s

termination of the bargaining unit on May 31, 1987 and, in

early June 1987, Hobbs’s subcontracting its coal mining

operation at Porter, Oklahoma to ECC. Third, was the

motive for the May 31 termination and _ subsequent

contracting out legitimate or unlawful. Finding the answer to

be yes as to the first two questions, and that the motive was

unlawful, I order the joint employers to reinstate the

bargaining unit, to make whole the employees, and to

recognize and bargain with the Union.

This case was tried before me in Muskogee, Oklahoma

on March 22-23, 1988 pursuant to the October 30, 1987

complaint issued by the General Counsel of the National

Labor Relations Board through the Regional Director for

Region 16 of the Board.! The complaint is based on a

charge filed September 10, 1987 by Oklahoma Coal Miners

Union (Union or Charging Party) against Hobbs & Oberg

Mining Company, Inc. (Hobbs herein) and Inter-Chem

Company/Eastoak Coal Company (Respondents). The

complaint tracks the format of the charge in naming the

respondent parties. I describe them in more detail later. For

reasons I explain in a moment, I have modified the style of

the case to match the evidence concerning the correct names

l All dates are for 1987 unless otherwise noted.

A-11

of the companies.

In the complaint the General Counsel alleges that the

Respondents, as joint employers, violated Section 8(a)(3) and

(5) of the Act on and after May 31 by withdrawing

recognition from the Union, terminating all unit employees,

temporarily closing the mining operation, and reopening

about a week later as a nonunion operation.

Respondent Hobbs filed a separate answer as did

International Chemical Company (ICC herein). The

complaint names the second respondent as “Inter-Chem

Company/Eastoak Coal Company.” No answer was filed for

that joint name. Nor was an answer filed on behalf of

Eastoak Coal Company (ECC). However, if a joint employer

relationship is established, then service on one of the joint

employers is service as to each. PMS Corporation, 282

NLRB No. 31 fn. 3 (Feb. 3, 1987).

By their answers, Respondents admit certain factual

matters, but they deny violating the Act.

On the entire record, including any observation of the

demeanor of the witnesses, and after due consideration of the

briefs filed by the General Counsel, Hobbs, and (jointly) ICC

and ECC, I make the following:

Findings of Fact

I. JURISDICTION

Hobbs is a Kentucky corporation which mines coal.

During the time in question, Hobbs possessed a permit to

mine coal from a mine near Porter, Oklahoma. During the 12

months ending May 31, 1987, Hobbs purchased and received

at Porter, Oklahoma goods valued in excess of $50,000 from

Oklahoma suppliers. Each of the suppliers purchased goods

in excess of $50,000 direct from outside Oklahoma.

ICC, an Oklahoma corporation, operates as a trader of

A-12

coal and fertilizer products. (2:240-241)? During the 12

months ending May 31, 1987, ICC performed services in

Oklahoma for customers each of whom sold and shipped

goods valued in excess of $50,000 to points outside

Oklahoma. In its answer to the complaint, ICC admits it is

an employer within the meaning of Section 2(2), (6) and (7)

of the Act.

Il. LABOR ORGANIZATION INVOLVED

I find that Oklahoma Coal Miners Union is a labor

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

II. THE ALLEGED UNFAIR LABOR PRACTICES

A. Background

1. Collective-bargaining history

The date is not clear in the record, but at some point in

1985 Hobbs purchased mining permit number 4155 from

Bill’s Coal Mining Company (Bill’s). The permit is to

operate a coal mine at Porter, Oklahoma. A coal purchase

(“marketing”) contract between Hobbs and ICC indicates it

was as early as January 1, 1985 that Hobbs took over. 3

Darrell W. Stephens is a former employee of Hobbs and

was a member of the Union’s bargaining committee when the

collective-bargaining agreement was negotiated. Stephens

> : :

“References to the two-volume transcript of testimony are by volume and

page.

3There are two versions of the coal purchase agreement in evidence. One

(GC Exh. 5) bears the January 1, 1985 date. The other (ICC Exh. 2)

shows January 30. The parties are unable to determine which date is

correct, but the difference is immaterial.

A-13

testified that a 3-year contract (effective from January 1,

1985 through December 31, 1987) between Hobbs and the

Union was negotiated in January 1985 when Hobbs took over

from Bill’s (1:72). However, the document received in

evidence as the collective-bargaining agreement (CBA)

between Hobbs and the Union is for the period of August 9,

1985 to December 31, 1986, and “from year-to-year

thereafter,” unless terminated on notice. The contract

provides that it “shail be binding for a period of three (3)

years” from August 9, 1985 (GC Exh. 6 at 24). Clifton E.

Walker who, along with Terry Dean, signed the CBA for the

Union, dates the event as August 1985 (1:121).

In the CBA between Hobbs and the Union, Hobbs

recognizes the Union as_ the exclusive bargaining

representative for employees in the following unit (GC Exh.

6 at 1):

All production and maintenance

employees employed at the Company's mine

in the United States, excluding all salaried

supervisors, office clerical employees, guards,

and supervisors as defined in the National

Labor Relations Act, as amended.

Complaint paragraph 10 describes the bargaining unit in

essentially the same words, with one exception -- it omits “all

salaried supervisors.” Because a salaried supervisor is not

necessarily a statutory supervisor, I use the description set

forth in the CBA.

In its answer to the complaint, Hobbs admits paragraph

11, which alleges:

11.

Since on or about August 9, 1985, and

A-14

*

at all times material herein, the aforesaid

Union has been the designated exclusive

collective-bargaining representative of the

Unit and since said date the Union has been

recognized as_ such_ representative by

Respondent Hobbs. Such recognition has

been embodied in successive collective-

bargaining agreements, the most recent of

which is effective by its terms for the period

January 1, 1987 until December 31, 1987.

In answer to complaint paragraph 12, Hobbs admits that

at all times since August 9, 1985, the Union, by virtue of

Section 9(a) of the Act, has been and is the exclusive

bargaining representative of the unit for the purposes of

collective bargaining.

Clifton E. Walker worked as a welder and mechanic for ~

Hobbs. (1:121-122) Walker testified there were about 35

employees in the bargaining unit when the mine closed in

May 1987. (1:131) As Union Treasurer Walker (1:122, 131)

and Union Vice President Terry W. Dean (1:154-155)

explain, the Union represents (or represented) only the

employees of Hobbs at the Porter mine. When Hobbs took

over, the Union changed to its current name from the Welch

Coal Miners Union when the mine was operated by Bill’s.

The Welch is a reference to the small town of Welch in

northeastern Oklahoma. (Hobbs Exh. 3)

2. The business firms

Hobbs is owned by James F. Hobbs (who is also

president), Perk Oberg, and John Chulick, the son-in-law of

James Hobbs (2:183). James Hobbs lives in Arizona and

Chulick lives in California (2:187).

Eastoak Coal Company (ECC herein) is a wholly owned

subsidiary of ICC (1:12; 2:259-260). Although ICC is

A-15

commonly known as Inter-Chem (1:145), ICC has a wholly

owned subsidiary named Inter-Chem Coal Company (2:288).

Occasionally in the record, the parties say “Inter-Chem”

when, in fact, they are referring to ICC. In this decision, I

reserve the name “Inter-Chem” for the coal company (Inter-

Chem Coal Company), and not ICC.

Because it is clear that ICC, the parent organization, and

not “Inter-Chem Company” as named in the charge and the

complaint, is the correct name of that alleged joint employer

(with Hobbs and Eastoak being the other two), I have

modified the style of the case to correspond to the undisputed

evidence.

The discrepancy in the names is of some significance. At

paragraph 2(c) of the complaint, footnote 2, the General

Counsel alleges, “hereafter, all references to the Respondent

Inter-Chem also refer to Eastoak Coal Company.” At the

hearing the General Counsel did not move to substitute ICC

for the name of Inter-Chem, nor did she move to separate the

names of Inter-Chem and _ Eastoak Coal Company.

Consistent with the complaint, the General Counsel states

(Brief at 4), “Respondent Inter-Chem as used in the

Complaint and in this brief includes International Chemical

Company and its wholly owned subsidiary, Eastoak Coal

Company.”

As already noted, the complaint alleges a joint employer

relationship, and it is only under the joint employer theory

that liability is alleged. ICC and ECC are not alleged to be a

single employer nor alter egos. ICC argues that even if ECC

committed unfair labor practices, ICC would have no liability

because ICC and ECC “are not considered a single employer

" (Brief at 22.) I address that issue when I begin an

analysis of the allegations, the evidence, and the contentions

of the parties.

Jim D. Kelley is a senior vice president with ICC. Kelley

testified that ICC’s principal business is trading fertilizer

products, and that it also trades coal. Kelley distinguishes

A-16

ICC’s trader status from that of a broker by explaining that as

a trader, ICC actually acquires title to the goods, sometimes

even possession, before selling the goods. ICC also handles

some transactions as a broker. When acting as a broker, ICC

never acquires title to the goods, but simply receives a

commission or fee, for bringing together the buyer and seller

for the sale of the goods. Kelley testified that ICC does not

mine coal (2:240-241, 288).

Kelley testified he runs ICC’s coal division while

Wallace Wells, ICC’s president, operates ICC’s fertilizer

division (2:242). In addition to his senior vice president post

at ICC, Kelley is president of both ECC and Inter-Chem

(2:288).

3. Mining coal at Porter, Oklahoma

a. General mine plans

Porter is a small town a few miles northwest of

Muskogee, in the direction of Tulsa. The mine in question

lies a half-mile or so south of Porter (1:190). The “mine” has

three aspects -- the office area, the pit itself, and the tipple

area where the coal is delivered for shipment. The pit,

known as the “south pit,” is a half-mile to a mile south of the

mine office. A shop is situated adjacent to the office. (1:43,

122; 2:211-212, 224.)

The mine is an open pit, or strip mine, and not an

underground mine (1:43). The coal itself is “soft” coal,

bituminous coal (GC Exh. 5 at 1). The coal has to be

analyzed as to quality of content. One important item among

the contents is the percentages of sulfur. When the sulfur

content exceeds a certain percentage, it is not marketable

(1:180).

A vital factor in a coal-mining operation is the general

mine plan. As Darrell Wayne Stephens explains, it is the

strategy for the best method for getting the coal out of the

A-17

ground4. (1:76-77.) As ICC’s Kelly explains, the type of

equipment used is an important factor. (2:256.) The

equipment used depends on the method chosen. Three

approaches or methods are described in the record. One is

the dragline method. A dragline, as Kelley describes, looks

like a crane with a bucket on the end of the cable. The

dragline operator throws out the bucket. As the operator

pulls the bucket back, the bucket scoops up a load of dirt (or

coal). This method is cost-effective in some situations, but

not when the dragline must be dismantled, moved, and

reassembled frequently. The “overburden” (the dirt and

rocks overlying the coal seam) here is up to 60 feet deep

(2:254-255).

A second method uses bulldozers (dozers) assisted by

scrapers (2:256). A dozer, of course, has a blade on the front

and pushes the material. By contract, a scraper scrapes up

the material and hauls it (2:192, 256). Although the evidence

does not describe a scraper in more detail, it apparently is a

piece of equipment with an operator or driver at the front

driving. Behind the driver the vehicle can open with a

lowered blade. As the vehicle passes over the material to be

moved, the driver lowers the blade, the material is scraped

into the cargo portion, and the driver hauls the load to the

designated unloading spot.

Reversing the equipment mix of the second method, the

third method uses scrapers assisted by dozers (2:256).

4Called as a witness by the General Counsel, Darrell Wayne Stephens,

who was president of the predecessor union in 1983-1984, had worked as

tipple operator at the Porter mine for Bill's, and remained in that position

when Hobbs took over in mid-December 1984. In the contract

negotiations between Hobbs and the Union, the tipple operator position

was removed from the bargaining unit and converted by Hobbs to a

salaried position with supervisory status. (1:55-57, 72,95) Whether

Stephens was a statutory supervisor was not pleaded or litigated and

appears immaterial.

A-18

b. The purchase contract and the management contract

In January 1985, Hobbs, as seller, entered into a Coal

Supply and Joint Marketing Agreement with AMAX Coal

Sales Company (AMAX herein) and ICC, the joint buyer, to

sell the joint buyer bituminous coal from Hobbs’s Porter

mine for the 3-year term of January 1, 1985 through

December 31, 1987.9 (@:243; GC Exh. 5.)

Under the purchase, or marketing, contract, Hobbs had to

supply a minimum of 180,000 tons of coal a year, and the

coal had to meet certain specified standards of quality. The

agreement provided that title to the coal would pass when

delivered into trucks or railcars at the Porter mine (GC Exh. 5

at 1-3). The delivery point is called the tipple areas (2:247).

As Kelley explains, and the contract discloses, Hobbs would

send an invoice to AMAX who sent a copy to ICC who in

turn would pay one half to AMAX. Finally, AMAX paid

Hobbs the invoice amount. ICC would bill the customers to

whom it and AMAX, as joint venturers, sold the coal (2:249).

The contract, a “take-or-pay” contract as Kelley describes

it (2:247), was modified in a couple of respects in June or

July 1986 (ICC Exh. 3), and again by an undated memo (ICC

Exh. 4) which apparently issued in late 1986.

Kelley testified that between January 30, 1985 and

January 1, 1987, he visited the Porter mine many times.©

Initially, Kelley testified, Hobbs employed the dragline

method and then later switched to the dozer/scraper method

5As noted earlier, there are two versions of this marketing, of purchase,

contract in evidence. The first (General Counsel Exh. 5} recites that the

parties entered into the agreement on January 1, 1985, whereas the

second (ICC exh. 2) states it was January 30, 1985. The difference is

immaterial to us, particularly since the stated 3-year term of January |,

1985 to December 31, 1987 is the same in both.

Because the January 30, 1985 version of the marketing contract was

introduced through Kelley (2:2430, it is possible, if January 1, 1985 is the

correct “entered” date of the agreement, that Kelley's first visit was in

January 1985.

A-19

(2:254-255). Darrell Stephens testified that the switch

occurred around November-December 1986 (1:175-76).

Hobbs began experiencing production and _ financial

difficulties in late 1986. Kelley testified that in that time

frame, Hobbs reached a point where it could not supply the

tonnage requirements of the purchase contract. Shipments to

ICC’s customers were sometimes disrupted, and_ the

customers complained to ICC. ICC on occasion had to buy

coal on the open market, frequently at a loss, in order to meet

its commitments. The quality of the coal sometimes fell

below the contract’s specifications (2;250-253).

Aside from switching its method of extracting the coal in

late 1986, as Stephens testified, Hobbs also sought financial

relief from the Union. James Hobbs met with the Union to

discuss modifying the CBA to that end. The meeting was

held at the civic center in Porter in about November 1986

(1:46, 110-111, 116-117). Kelley testified he appeared at the

request of James Hobbs and gave a 10 to 15 minute

presentation to the Union, and its members in attendance, on

the market conditions of the price of coal (2:263- 264).

Kelley testified there was tremendous pressure in the market

to lower the price of coal. The situation was such as to create

some doubt whether the coal could be sold at a profit (2:263).

Whether from market forces or whatever, the late 1986

contract addendum (ICC Exh. 4), which I mentioned earlier,

reduced the coal’s contract price paid to Hobbs from $32 to

$30 a ton. About this same time the November meeting

resulted in a CBA modification, dated December 22, 1986,

and effective for the year beginning January 1, 1987 (1:156-

167; GC Exh. 7). The modification was a_ substantial

concession by the Union. Wage rates appear to have been

reduced by about $2 an hour, the wage classifications were

reduced to four, and two classifications, including the tipple

operator, were removed from the bargaining unit. Vacations

were reduced to one (1) week (employees with 10 or more

years of service had received 3 weeks of paid vacation). Paiu

A-20

holidays were cut from 8 to 4. The pension was eliminated,

as was a “cost of living” increase apparently planned for

1987.

These were not the only changes Hobbs made to increase

production, cut costs, and become more competitive. In late

1986, discussions began between Hobbs and ICC as to what

else could be done. Eventually, Kelley testified, these

discussions culminated

in a management agreement whereby Eastoak (ECC) would

supply much-needed management expertise to Hobbs,

particularly as to the extraction method Hobbs was using at

the Porter mine (2:252-254, 282). A written management

agreement, dated March 24, 1987, and effective to the close

of business on December 31, 1987, is in evidence (GC Exh.

4).

The events I have described so far are generally

undisputed. At this point, however, controversy begins. It

concerns Larry G. Blevins, an employee of Inter-Chem Coal

Company, or Inter-Chem (1:139; 2:234). There is no dispute

that Kelley assigned Blevins to work at the mine (2:234,

Blevins, 2:299, Kelley). There is some discrepancy as to

when Blevins arrived, and there is a major dispute

concerning his status there and concerning whether he made

certain statements at the Porter mine. These disputed matters

I shall address in a moment. The March 24 management

contract (“Coal Mining Management Agreement”) extends to

four legal-sized pages. James F. Hobbs signed for Hobbs and

Kelley for ECC. The contract recites that the intention of the

parties is that ECC will develop a plan of operations, subject

to Hobbs’s approval, and then use its “best efforts” to

implement the plan (Sec. 3(a)). ECC is to exercise such

responsibilities as may be delegated to it by Hobbs (Sec.

3(b)). Within 20 days initially, and from time to time

thereafter, ECC is to furnish Hobbs with suggestions for

operating the mine. “All recommendations relative to labor

shall conform to the collective-bargaining agreement, as

A-2]

“

amended ....” (Sec. 3(c)). The agreement provides that

Hobbs will pay a fee to ECC per ton of coal (Sec. 4). Under

Sec. 7(d), “Capital and Labor,” Hobbs is to provide all

operating capital, labor, materials, equipment, and supplies,

and “Labor policies shall be effective only if approved by

[Hobbs], and shall conform in all respects to the collective-

bargaining agreement, as amended,” between Hobbs and the

Union. Sec. 7(d).

Kelley testified that between March 24 and May 31,

1987, he (for ECC) was the contact with Hobbs. James

Hobbs possibly suffered a heart attack around May, 1987,

although there are few details in the record (1:51; 2:209).

One witness, Terry Wayne Dean, does not recall James

Hobbs’s becoming i!l (1:165). Kelley talked frequently with

Jim Hobbs until the latter became ill and thereafter, to John

Chulick, on production and finances (2:258-259). On

occasion, Blevins would consult directly with James Hobbs

or Chulick (2:221, 236, 299).

Before March, 1987, Kelley testified, Hobbs had its own

mine plan. In March, ECC, with Hobbs’s approval, modified

that plan in ways ECC thought the mining operation could be

made profitable (2:285). The primary modification appears

to have been to change from the dozer/scraper method of

extraction to the third method I described earlier, the

scraper/dozer. Under the former, the dozers were having to

push large quantities of dirt across the pit. With the ground

overlay frequently having a depth of 40 to 45 feet, the dozers

ended up with a considerable uphill push. Kelley testified,

"We saw this [as] being a fatal flaw in the operation and

thought that it could be more effectively handled by scrapers

picking up material and carrying it as opposed to dozers

pushing it.” (2:256.)

Barely a week after Hobbs and ECC executed their

management contract, and for reasons unexplained in the

record, AMAX and ICC dissolved their joint venture. By

written agreement dated April 1 (GC Exh. 5), ICC assumed

A-22

the full role of the buyer under the January 1985 marketing

agreement with Hobbs (2:298-299).

c. The mine closes and reopens

Kelley testified that toward the end of May 1987 the

mining operation began to go “downhill.” Kelley cites

slipping productivity (principally because appropriate

equipment was lacking) and an insufficient cash flow

(2:266). Hobbs (apparently by John Chulick) approached

ICC about the problem and suggested that ICC buy Hobbs.

ICC rejected that suggestion because of the large debt

structure afflicting Hobbs (2:266). Kelley was well aware

that Hobbs’s financial situation was reaching the critical

stage, and that one option Hobbs had was to close the mine

(2:293).

On May 29, Hobbs’s attorney, R. Michael Lowenbaum,

sent a registered letter (Hobbs Exh. 1), addressed to the

"Union President, Welch Coal Miners’ Union of Welch,

Oklahoma, c/o Hobbs & Oberg Mining Company, Inc., P. O.

Box 179, Porter, Oklahoma, 74454.” (2:302.) After an

opening two-line paragraph announcing that the law firm

represents Hobbs, the letter advises:

Please be advised that effective on or about May 31,

1987, the Company will cease production of coal at

the Porter Mine. In connection with the Company’s

ceasing operations, the Company will terminate the

employment of all its employees covered by the

above-captioned collective bargaining agreement as

of May 31, 1987. Representatives of the Company

are and remain ready and willing to meet and confer

with representatives of the Union concerning the

effects of the Company’s decision to cease operation

on your membership.

A-23

The return receipt (Hobbs Exh. 2) reflects that the letter

was delivered to Kelly Bishop on June 1 (2:303). Attorney

Lowenbaum testified he does not know a Kelly Bishop and

that Hobbs informed him that no one by the name had ever

worked for Hobbs (2:304-305).

Terry Wayne Dean became the Union’s president in

February. Dean testified that although he thinks the P. O.

Box 179 address is the address the Union would receive any

mail (he testified the Union’s secretary would know), he does

not recall receiving the letter. Moreover, there was no

bargaining over effects, or any request by the Union to do so,

because the Union’s contract (in his opinion) was still in

effect and there was nothing to bargain about (1:170-172).

The charge and other service documents for the pleadings in

this case show the “P. O. Box 179” in Porter as the mailing

address for Hobbs. Testimony confirms that to be the mine’s

address (2:205, Sisney). The Union gives its address on the

charge as Route 2, Box 166A5, Muskogee, Oklahoma,

74401, and that is the address shown on other service

documents for the pleadings. There is no identification of

Kelly Bishop in the record. I find the evidence to be

insufficient to show that the Union ever received

Lowenbaum’s letter of May 29.

Ronald L. Sisney testified that Jim Hobbs hired him on

March 16 to be superintendent of the Porter mine (2:182-184,

202, 208). Sisney testified that in the last week of May, John

Chulick told him Hobbs was going to stop mining when all

the uncovered coal had been removed. Chulick instructed

Sisney to call him when that point was reached. On Sunday,

May 31, Sisney called Chulick at 2 p.m. and made that

report. Chulick instructed Sisney to park the equipment and

to lay off the employees, including himself (1:188, 191).

Sisney or other Hobbs’s supervisors notified at least some of

the bargaining unit that very day or evening (1:98, 100,

Thomas; 1:119, Armstrong; 1:151, 163, Dean).

On Sunday, May 31, John Chulick telephoned ICC's

A-24

Kelley and informed him of the mine’s closing (2:265, 285,

293). Inter-Chem’s Blevins was notified that same evening

by Ronald L. Sisney (2:233).

That following week, on Monday, June i, Hobbs

(represented by Chulick and attorney Pete Fanchi)

approached ICC about the possibility of continuing the

business venture in some form. Chulick and Fanchi met with

Kelley and Lawrence A. Yeagley. Lasting most of the week, 7

the discussions included proposals by Hobbs, rejected by

ICC, that ECC or Inter-Chem purchase the assets of Hobbs

or, alternatively, make a major cash investment in the

operation. Finally, on Thursday, June 4, the parties agreed

that ECC would operate the Porter mine as a contract miner

for Hobbs (2:267-269, 272, 283, 295). By interlineation on

the first page, and page 8, of the mining contract, ECC’s

status is expressly labeled “contract miner” and “independent

contractor.” (GC Exh. 3.) The term of the agreement runs

from June 4 until all “merchantable” coal has been removed

(GC Exh. 3 at 6). The parties agreed that Hobbs would pay a

base price of $26.38 per ton delivered to the tipple site (GC

Exh. 3 at 2). Of course, as Kelley testified, Hobbs continued

to be obligated under the 1985-1987 joint marketing

agreement (GC Exh. 5) (the purchase contract) to sell coal

from the Porter mine to ICC8. From June 4 forward,

however, Hobbs no longer had any obligation (and perhaps

no right) to mine the coal (2:283).

About a week after the mine closed, or approximately

Sunday, June 7, Kelley, Blevins testified, called Blevins and

informed him that ECC would operate the Porter mine as a

7Kelley testified the meetings extended into Friday or even Saturday

(2:268).

8Kelly actually said “Inter-Chem.” (2:283) We know from Yeagley that

ICC is commonly known as “Inter-Chem” (1:145). Indeed, the marketing

agreement expressly uses "Inter-Chem” to denote ICC (GC Exh. 5. at 1).

In short, Kelley was not referring to Inter-Chem Coal Company at this

point.

A-25

aati

contract miner (2:226-227, 233). During that week, while the

mine was closed and Hobbs and ICC were negotiating,

Blevins resumed his work at Inter-Chem’s mine at Welch,

Oklahoma, and engaged in “several” other activities (2:233,

236). When the Porter mine reopened under ECC, Blevins

was in charge (2:331). Sisney testified that after the mine

reopened under ECC, he reported to Blevins (2:209).

d. Hiring by Eastoak

Terry Wayne Dean was president of the Union during the

spring of 1987, and in that time frame, he operated a scraper

for Respondent (1:148, 152, 159). Clifton E. Walker has

been treasurer of the Union about 6 years. Walker worked as

a welder/mechanic for the Respondent (1:121-122).

In the first part of June, Dean and Walker went to the

Porter mine, made application to work for Eastoak, and

stated that the Union still had a contract. Dean testified he

asked Blevins whether “they” were going to honor the CBA.

Blevins said, "No, we’re not going to honor the contract.

Now that I’ve got rid of the Union, I can work whoever |

want or whatever for the same wages.” As far as he was

concerned, Blevins said, there was no contract with the

Union (1:150, 160).

Walker testified Blevins said he had done away with the

Union as he had always wanted to do. Walker and Dean

asked him what was to be done about the wages and benefits.

Blevins said he was going to pay $9 an hour “across the

board,” that there would be no benefits, and employees

would have no holidays but instead, would have to work

holidays. Walker asked if Blevins was going to hire him

back. Blevins said, "There’s no way that I'd hire you.”

Walker said, “Fine.” Walker did not ask Blevins to explain

because Walker knew the reason. He and Blevins, Walker

testified, had argued. “He didn’t like me and I didn’t like

him.” It was over an incident involving a scraper, Walker

A-26

testified (1:128-131). I describe the scraper incident later

and the subsequent warning Walker refused to accept.

Although Blevins does not deny having a conversation with

Dean and Walker in early June, he does deny the statements

they attribute to him (2:227-228).

Walker testified he was not hired by ECC (1:130). Dean

apparently was not offered a job with Eastoak until Sisney

did so about the last of July or the first of August (1:167-

168). The evidence does not describe the job offered or

reflect whether Dean accepted the offer. Only two of the

General Counsel’s witnesses testified that Eastoak hired them

-- Phillip L. Thomas and Michael J. Armstrong.

Thomas testified he was hired by Eastoak in mid-June and

worked there as a dozer operator until he was laid off in

February, 1988 (1:96-97, 99, 104). When Sisney called

Thomas on May 31 and informed him the mine was closing,

Sisney told Thomas to fill out an application. Sisney added

that the mine would be “nonunion.” (1:98.) Armstrong was

called about 2 weeks after he applied at Eastoak. Initially, he

did not accept because he was already working. About a

month later, he told Blevins he was not happy where he was.

The next morning, Sisney called Armstrong and hired him to

operate a scraper for Eastoak at the Porter mine (1:111-112,

118).

Recall that beginning January 1, by the Union’s

responding to Hobbs’s adverse economic condition, the

wages and benefits under the CBA in effect at Hobts had

been reduced substantially. Operating the Porter mine

nonunion, Eastoak eliminated either some or all benefits and

cut the wages to a flat $9 an hour for all operators. Thomas

testified that “some” benefits were eliminated along with the

union contract (1:101), whereas Armstrong testified that they

did not receive paid holidays and, “We didn’t have any

benefits.” (1:112-113.) By benefits is meant, of course,

payments not required by law, for Armstrong concedes that

Eastoak paid “overtime” (obviously meaning time and one-

A-27

half) after 40 hours of work, but there was no double time on

Sundays, “nothing like that.” (1:112.)

Complaint paragraph 15 alleges that between “about May

31 and June 2, all but approximately four unit employees

filed applications with Respondent Inter-Chem. However,

only about 12 unit employees were rehired by Respondent

Inter-Chem.” Paragraph 17 alleges such conduct was

motivated by union animus. ICC argues that the General

Counsel “apparently abandoned” these allegations (Brief at

24). In her brief, the General Counsel contends (Brief at 8),

"In fact, few of the original crew were rehired, although the

exact number is not known.” I discuss these contentions

later.

B. The Events in Dispute

1. Introduction

Although I have covered a couple of points of disputed

facts, and will resolve the disputes later, most of the

foregoing description summarizes undisputed facts. The

significance the parties attach to those facts are in sharp

contrast, however.

The time frame of the background I have given actually

extends over to the May 31 closing of the mine by Hobbs and

the reopening in early June by Eastoak. The time frame of

the events I now describe begins in February with Kelley's

assignment of Blevins to the Porter mine and extends,

generally, to the mine’s closing on May 31.

We are concerned in this time frame principally with the

presence and actions of Blevins and the question of whether

his words or deeds assist in rendering ICC liable here as a

joint employer with ECC and Hobbs. Most of the facts in

this time frame are disputed. Generally, I credit the General

Counsel’s witnesses over those of ICC. The General

Counsel’s witnesses testified with apparent sincerity and with

A-28

a persuasive demeanor in comparison to the witnesses called

by ICC.

2. Labor relations

Earlier, I described the March 24 management agreement

between Hobbs and ECC (GC Exh. 4). Kelley concedes that

he assigned Blevins from Inter-Chem’s mine in Welch,

Oklahoma to the Porter mine as, in Kelley’s words, “our

representative on site.” (2:269, 299.) By “our,” I find Kelley

meant ICC and its wholly owned subsidiaries. In effect,

Kelley operated the coal division as if ICC, ECC and Inter-

Chem are a single integrated enterprise. Blevins confirms

that Kelley assigned him there (2:234), and that the purpose

was to be an adviser and consultant under the management

agreement (2:220, 235-236). As earlier mentioned, Kelley

testified Blevins reported directly to him, but on occasion

Blevins would speak directly with "Hobbs/Oberg.” (2:299.)

Blevins concedes he visited the Porter mine once in January

and once in February, and he approximates his arrival there,

after assignment by Kelley, as late February or early March.

He testified he does not know whether the management

agreement was written or oral (2:220, 235).

Darrell Wayne Stephens has been a member of the

Union over 9 years. He was president in 1983-1984,

treasurer for 2 years, and on the bargaining committee when

the 1985-1987 contract was negotiated (1:72). Originally a

dragline operator for Bill's at the Porter mine, Stephens was

promoted to tipple operator when Hobbs took over. That

position was removed from the bargaining unit effective

January 1, 1987, and James Hobbs told Stephens he would

have supervisory responsibilities over coal blending, coal

loading, coal sampling, water sampling, parts, and parts

purchasing. Stephens attended supervisory mectings

thereafter (1:56-57).

Stephens credibly testified that Blevins did come to the

A-29

mine in January, and that through February, Blevins appeared

more frequently. Blevins said he was there as an adviser. In

February, Stephens asked James Hobbs about Blevins’s

capacity. President Hobbs told Stephens he should obey the

instructions of Blevins (1:57-58). Union Treasurer Clifton E.

Walker, who worked as a mechanic in the shop adjoining the

mine office, credibly testified that in February, Jim Hobbs

told him Blevins was the general mine superintendent, and

later Blevins told him the same (1:123-124).

Stephens testified that Bill Keele had been the acting

mine superintendent for Hobbs. Jerry Grooms was the pit

boss for Hobbs. In about early March, apparently, Stephens

overheard Blevins tell Grooms he knew a man he thought

would make a better mine superintendent than Keele and

who would be more capable at managing the men (1:86-87).

Stephens’s testimony that Ron Sisney became the mine

superintendent about mid-March coincides with Sisney’s

testimony that Jim Hobbs hired him on March 16 (2:182,

202, 206). Sisney concedes he was referred to Hobbs by

Blevins (2:207). Sisney testified he had checked with Blevins

about 2 weeks earlier seeking work, but Blevins said he had

nothing.? They had a second conversation and_ then,

apparently on a third occasion, Blevins called Sisney and

asked if he would be interested in working for Hobbs.

According to Sisney, he said possibly so, and, on his own,

went to the Porter mine the next moming. President Hobbs

(as it so happens) was in the mine office that day,

interviewed Sisney, and hired him (2:207-208). I find that

James Hobbs was involved merely as a formality to

implement the decision by Blevins to hire Sisney. In effect,

James Hobbs served as little more than Blevins’s agent.

The following day, Tuesday, March 17, Blevins,

Stephens testified, conducted a meeting with the mine’s

supervisors: Mine Superintendent Sisney, Pit Boss Keele,

Stephens testified Sisney visited the mine in late February or early

March (1:59).

A-30

Supervisor Grooms, and Supervisor Stephens. Along with

discussing changes to be made in the pit area, Blevins told

the four that they were not to tell the employees that “Inter-

Chem” was going to“be managing the mine's business. As

far as the employees were concerned, Blevins said, he was

there simply as a representative to make recoinmendations as

an adviser (1:59-60, 81).

Following the management meeting, the employees were

called in for a general meeting. At the general employee

meeting, Blevins introduced Sisney as the new mine

superintendent (1:59-60).

In the Weeks thereafter, Blevins testified, he spent 60

percent to 75 percent of his time at the Porter mine, mostly in

the office, and the rest of his time at Inter-Chem’s mine in

Welch (2:223, 236). Sisney testified he spent about 98

percent of his time at the pit where most of the employees

worked (2:189-190, 211), that he, Keele, and Grooms (the

Hobbs supervisors) are the ones who told the employees

working in the pit what to do and how to do it, and that

Blevins had no authority to tell employees what to do and did

not undertake to do so (2:192-193). Blevins agrees that he

had no such authority, and testified that he never disciplined

any employees at the mine, and that on one occasion, he

recommended to Jim Hobbs and John Chulick that Hobbs

eliminate Stephens’s position and terminate Stephens, they

rejected his recommendation (2:220-221). Sisney testified he

reported daily, usually by telephone, to Jim Hobbs and John

Chulick on matters pertaining to production and finances

(1:186-187, 202). Before June, Sisney testified, Blevins

maintained a desk in the office. After May 31, he maintained

the same desk, same chair, at the same spot (2:209-210).

Stephens credibly testified that Blevins, in March, told

him that he was not needed as much around the tipple area,

that they would not need to crush or blend as much coal, and

instructed him to spend more time at the pit and relieve

Sisney so Sisney could spend more time in the office. A day

A-31

or two later, Sisney discussed with Stephens whether

Stephens thought he could handle the responsibility of Pit

Boss (1:57-58, 83-84). Blevins also had Stephens run

errands for him, including picking up money from ICC in

Tulsa to cover the Hobbs payroll.

Scraper operator Terry Wayne Dean had been laid off

from Hobbs in December 1986 while vice president of the

Union. He returned on recall some time in February. !9

Because the Union’s president had taken a contract job

(outside the unit) with Hobbs, Dean became the Union’s

president (1:148, 152). His first day back, Dean, as union

president, went to the office to check with James Hobbs or

Perk Oberg on a general visit. The only person there was

Blevins, who told Dean that if there was any union business

to discuss from that time on, Dean should talk with Blevins.

“Hobbs and Oberg no longer have anything to do with the

mine, they’re out,” Blevins added. Blevins said he was the

man Dean should see because he was “running” the job

(1:149-150, 166). Blevins denies it (2:228). Dean impressed

me as a more sincere witness, and I credit him over Blevins.

Blevins admits to a limited involvement in a discussion

with the Union over Sunday pay under the CBA. As Dean

(1:150-151) and Walker (1:123-124) explain, in March, the

workers complained they were not being paid double time for

working Sundays. !! Dean and Walker confronted Blevins

over the issue. Blevins said he would check into it. The next

day, a Sunday, Blevins, showing them a copy of the contract,

100n redirect examination Dean testified Sisney was already at the mine

daily when he returned from layoff (1:175-176). It appears, however,

that Sisney was not hired until March 16. Although I credit the substance

of Dean's testimony, he apparently became confused either as to the

month he returned or as to whether Sisney was already there.

I Item (2) of the CBA modifications that went into effect on January |

reads (GC Exh. 7):

Forty (40) hours per week straight time, all hours over forty (40) would

be time and a half with the exception of Sundays which would be double

time.

A-32

said that double time would be paid on Sundays only if 40

hours had already been worked that week. 12

However, Dean testified, the way Respondent was

scheduling hours the affected employees would not reach 40

hours until they worked through Sunday, and therefore, they

would receive only straight time pay for working Sundays

(1:151). Dozer operator Michael J. Armstrong testified that

Blevins, who had come to the pit to explain Respondent’s

position, stated that Respondent had to pay double time on

Sunday only if the affected employee had already worked 40

hours that week. Armstrong places the event in early April

rather than in March (1:110, 115). The contract

modification, quoted earlier, is subject to being interpreted in

a way which supports either the Union or the Company.

Blevins concedes he contacted Inter-Chem’s attorney,

Laurence A. Yeagley, for an interpretation of the CBA,

learned that double time did not have to be paid under these

circumstances, and so reported to Dean.!3 That ended his

involvement, he declares. In fact, Blevins asserts, it was

Sisney who came to him with the Sunday pay question

(2:229, 238). I credit Dean and Walker.

Aside from instructing a supervisor, Stephens, on what to

do and where to work, Blevins also, contrary to his testimony

and that of Sisney, became directly involved with supervising

the employees. Welder and mechanic Walker, the Union’s

treasurer, spent about 75 percent of his time in the shop

adjoining the office and he normally received his work

instructions from Blevins (1:122, 124). On one occasion in

late March or April, Blevins wanted Walker to repair a

broken part of a scraper by welding the part. Walker told

Blevins the part could not be repaired but would have to be

12Dean’s testimony is slightly confused on this point, but it seems clear

that is the thrust of his words, particularly as it matches the other

evidence.

134s earlier noted, Yeagley testified he is vice president and general

counsel for ICC (1:135).

A-33

replaced with a new part. Blevins said he did not want to

spend the money or time getting a new part. Walker again

told Blevins a repair would not work. Blevins terminated the

conversation by telling Walker (1:126): 14

I’m the boss, and you do what I tell you to do.

Walker repaired it, but, as he had predicted, the part

broke almost immediately after the scraper returned to

service in the pit. Respondent thereupon sought to issue

Walker a written reprimand over the incident (1:126-127).

Sisney testified Blevins was not involved, that it was

simply a matter of Walker’s incorrectly repairing a part and

not checking to see if it would work when the scraper was

returned to service. When he sought to hand the warning slip

to Walker, Walker refused to take it (2:199-201). Further

contradicting Walker, Sisney testified Walker spent more

time in the pit, where he performed mechanical work, than he

did in the shop (2:211). Blevins describes the time as a 50/50

split (2:224).

Walker testified that Union President Dean was with him

when, in the office, Sisney and Blevins wanted Walker to

sign a warning which blamed Walker for the part’s breaking.

Walker refused to sign (1:127-238). Dean confirms he

represented Walker (1:150). Walker never filed a grievance

over the matter (1:128, 133, 167), apparently because, as

Dean testified, he never “received” (by physically accepting

in his hand) a warning (1:166). Blevins asserts he never

attempted to give a warning to Walker (2:222, 225).

I credit Walker and Dean over Sisney and Blevins.

However, Walker used the generalized “they” when

describing the actions of Respondent. I find that, although

Blevins acted and spoke as Walker described, it was Sisney

who did the acting and speaking for Respondent when

147 do not credit Blevins’ denial (2:226).

A-34

Respondent thereafter sought to have Walker sign the

warning. Blevins was present in the office on that occasion, I

find, but left the warning for Sisney to handle.

3. Animus

As earlier mentioned, the complaint (paragraphs 15-17,

20) allege that Respondent violated Section 8(a)(3) of the Act

by discharging all unit employees on May 31 and rehiring

about 12 only (of about 35). The evidence is rather skimpy

concerning not only the number of employees rehired in

early June and later, but also concerning the number of

employees who even applied for employment with ECC

when ECC took over in early June.

The record contains evidence either directly reflecting

animus or which the General Counsel apparently contends

supports an inference of animus. Most of the evidence

consists of remarks attributed to Blevins before and after

May 31. Earlier, I summarized the statements which, I

found, Blevins made in early June. I now cover the pre-June

statements attributed to Blevins by Stephens. Blevins denies

making the remarks (2:226). I credit Stephens. Testifying

with “straight eyes,” | Stephens exhibited a more persuasive

demeanor.

As Darrell W. Stephens credibly testified, in the period of

March-May Blevins discussed the CBA with Stephens in

conversations the two held in the office. Blevins would ask

for Stephens’s interpretation of whether Blevins could move

someone from a scraper to a dozer. Blevins would ask

Stephens similar questions relating to hours and operation of

I5In the American Indian Prayer (Red Cloud Indian School, Pine Ridge,

South Dakota), the supplicant, praying to the Great Spirit, “whose voice I

hear in the winds,” humbly asks for wisdom to guide him through life.

He concludes by asking, “Make me always ready to come to you with

clean hands and straight eyes. So when life fades, as the fading sunset,

may my spirit come to you without shame.”

A-35

PYDCCT AVAL ADIL PAD.

equipment (1:61-62). By April Blevins began to express his

opinion about the CBA to Stephens. After asking atout an

article in the CBA, Blevins would cast aside the CBA, saying

that it would be a lot easier to manage the business wthout a

(union) contract. Blevins said it seemed as though the union

contract had restricted the company from operating its

business or managing its people as Blevins thought the

operation should be managed (1:67).

By May, Blevins’s remark to Stephens reflect that

Blevins’s frustration at not having unbridled leeway in

operating the mine had resulted in an attitude that was more

than simply negative. Blevins’s attitude now became

characterized by a threatening overtone. Thus, in late May

Blevins told Stephens that the “company” would be a lot

better off without the Union, and if the men did not want to

work the way he wanted them to, “they’d just close it down;

close the mine and open it up under a different name and go

ahead and dig coal.” (1:68, 70).

Blevins made the close-down reopen threat in

conjunction with a dispute with the Union over the handling

of explosives. Stephens was assigned to do some blasting of

rock. As Stephens had predicted, the Union went to Sisney

and protested that if the blasting was going to be done

regularly then the job should be posted for bidding under the

CBA. Respondent ceased the blasting and resumed digging

with the equipment (1:68-70).

Sisney also increasingly began to condemn the CBA in

May. This was in conjunction with Sisney’s either changing,

or wanting to change (the evidence is less than plethoric), the

shifts and hours of the equipment operators to two shifts of

four days of 10 hours. Apparently, some etmployees

complained (1:87-88). Earlier Sisney also had expressed his

desire not to have to pay double time under the CBA for

Sunday work (1:88, 124). That issue, as we have seen, was

resolved to his and Blevins’s liking when ICC’s general

counsel interpreted the CBA as not requiring double time pay

A-36

BEST AVAILABLE COPY

on Sunday unless the employee had already worked 40 hours

that week.

Sisney’s displeasure with the CBA, its restrictions, and

the independence it gave the bargaining unit is evident from

his failed attempt to change the hours of welder/mechanic,

and union treasurer, Clifton E. Walker. Sisney testified that

he changed the hours of the mechanics. At one point, Sisney

says there were three mechanics (Walker, Olin Johnson, and

a third whose name he could not recall) working a 10-hour

shift beginning at 7 a.m. (1:193-194, 196). Later Sisney gave

the number of mechanics as four, including Ronnie Schoulz,

with Johnson and Schoulz being contract employees, Walker

and the fourth mechanic being members of the bargaining

unit, and the four working two mechanics per shift of four

days (and 10 hours) on and four days off (2:213-214). Sisney

wanted to stagger the starting times (and, thus, the ending

times) in order to provide more maintenance and repair

service for the equipment. Walker, Sisney testified, refused

to change (2:214-215). Presumably, Walker relied on the

CBA or some custom related to the CBA. For classifications,

with more than one shift, the CBA defines the shifts and

hours, with the first shift beginning at 8 a.m. (GC Exh. 6 at

16). It is unclear, therefore, whether Sisney ever

implemented his desired change, at least as to the two

contract mechanics, or whether Walker’s adamant resistance

frustrated Sisney’s ability to implement his plan even as to

the two contract mechanics. Sisney does not give the

approximate date of this incident. Walker does date a group

effort by Jim Hobbs, Blevins, and Sisney to persuade him to

convert to a contract mechanic. Placing this event in March,

Walker testified he declined the invitation (1:131).

4. Financial control

The record contains evidence relating to certain financial

matters. Hobbs contends the evidence does not support a

A-37

finding that ICC had financial control of Hobbs (Brief at 18).

ICC argues that Respondents did not jointly control the

mine’s finances, and that in any event the evidence is

irrelevant because there is no allegation that Hobbs and ICC

(and ECC) constitute a single employer or alter egos (Brief at

20).

Respondents did not object to this evidence as irrelevant,

and it could be argued that all concepts were fully litigated

(tried by implied consent). Nevertheless, the General

Counsel expressly states that only the joint employer concept

is alleged (Brief at 14). I interpret that to mean the General

Counsel disclaims any contention that the concepts of single

employer and alter ego were fully litigated. The General

Counsel asserts that the Government’s allegation, and its

position, is that ICC, "through its agents, exerted sufficient

control over the employees of Respondent Hobbs to

constitute a joint employer with Respondent Hobbs.” (Brief

at 14). Although that position does not seem to answer the

contention of irrelevance ICC raises in its brief, I

nevertheless shall summarize the details quickly.

The first item here involves an $18,000.00 check. There

is no dispute Blevins sent Stephens to ICC’s office in Tulsa

to fetch the check and that Hobbs deposited the check in its

own bank account in Porter. Stephens testified this occurred

in about April and was done, so he was told, that Hobbes

could meet its payroll (1:62-63, 70, 82, 84). On a similar

errand for Blevins, Stephens went to ICC in Tulsa, obtained a

sealed envelope contained a check, carried it to a machine

shop that had repaired an engine block for Hobbs, received

the engine block, and returned with it to the mine (1:62-63,

84-85).

Testifying about both event, Kelley explained that in both

instances the checks represented money owed by ICC to

Hobbs for coal delivered and invoiced. Payment was

expedited (that is, made in advance of the due date under the

contract) merely as a courtesy to Hobbs, and the money was

A-38

not an advance or a loan (2:273-278, 281-282). The General

Counsel argues that Kelley’s explanation does not ring true

because the expedited $18,000 does not match with the

invoices in evidence (Brief at 15). The problem in resolving

this issue is twofold. First, the three invoices in evidence

(GC Exhb.10-12) bear March dates and range in amounts

from about $4,500 to nearly $35,000. The evidence is

insufficient to determine whether these invoices had been

paid or not when the $18,000 check was obtained, whether

ICC’s books reflect the $18,000 was applied to these or

similar invoices, or other accounting details. The same is

even more true as to the engine block Stephens secured.

Kelley’s testimony is rather puzzling on one point. On

direct examination Kelley implied that ICC had expedited

payment of invoices as far back as 1985 (2:279), but on

cross-examination by the General Counsel Kelley

specifically states that early payments were made only after

AMAX dropped out (2:296-297). That, we know, did not

occur until April 1, 1987.

Another financial item concerns road use rental fees.

Darrell McCullough owns some important property at the

mine -- the road from the mine to the tipple area. When

Hobbs fell delinquent in its payments of the rental fees,

McCullough closed the road. That action produced results.

On May 4 Kelley, Yeagley, and Blevins met with

McCullough just west of Porter. They agreed to get

McCullough his money. The next day McCullough received

one half of the money due him in the form of a check from

Hobbs (1:89-94). Kelley did not address this specific

incident. Presumably his testimony that all payments to or

for Hobbs were for underlying debts owed Hobbs applies.

Again, the evidence does not describe ICC’s books and

accounting entries so that the significance of any money

transfer can be evaluated.

5. ICC logo stickers

A-39

The records contains evidence about equipment from the

ICC companies and the first appearance of large (13 inches

by 18 inches) plastic logo stickers placed on the equipment.

The logo apparently is used by any of the ICC companies

(GC Exh. 2; ICC Exh. 1). Because there is evidence that the

equipment was leased to Hobbs (1:138, Yeagley,!© and

because two of the General Counsel’s witnesses testified that

the sticker logos were not placed on the equipment until after

ECC took over in June,!’ find no significance in the

evidence even if in fact a few of the stickers were on

equipment before May 31.

C. Discussion

1. Introduction

Resolution of the issues must be made at two point -- as

of May 31, 1987, and again as of June 4, 1987. As already

mentioned, I have resolved credibility in favor of the General

Counsel’s witnesses. Except where otherwise notes, or

where implicit, I find the disputed facts to accord with the

General Counsel’s evidence. However, that does not

necessarily compel the conclusions the General Counsel

advances.

2. Some legal concepts

16 According to Kelly, Inter-Chem Coal Company had no involvement

with Hobbs other than an emergency lease of some equipment on one

occasion (2:271). The equipment lease Yeagley Briefly mentions is

eqpenentty with ECC.

17Phillip L. Thomas (1:00, 105); Michael J. Armstrong (1:111). The

logo stickers ICC identified here (2:185) bear the name of Inter-Chem

Coal Company (ICC Exh. 1).

A-40

The General Counsel alleges (complaint paragraph 5) and

argues (brief at 14-19) that Hobbs and “Inter-Chem” are joint

employers of the employees of Hobbs. As I have mentioned,

the complaint proceeds against Hobbs and “Inter-Chem

Company/Eastoak Coal Company.” The joinder of the two

names in that fashion could suggest a single employer theory,

but the General Counsel makes clear that the Government is

proceeding only on a joint employer theory. The complaint

also expressly designates the name “Inter-Chem” to refer to

Inter’ Chem Company/Eastoak Coal Company. As we know

from the evidence, the actual corporate identity of “Inter-

Chem Company” is ICC. Eastoak Coal Company (ECC) is a

separate company, although a wholly owned subsidiary of

ICC, and Inter-Chem Coal Company is yet a different

company, although it also is a wholly owned subsidiary of

ICC. I noted earlier, in this decision I have reserved "Inter-

Chem” for Inter-Chem Coal Company, except where I quote

a witness who, in his testimony, indicates he is referring to

ICC.

In its brief ICC refers to the concepts of single employer

and alter ego as well as that of joint employer (brief at 20,

22). The three concepts are distinct from one another.

Marino Electric, 285 NLRB No. 53, JD slip op. at 16 fn. 29

(Aug. 19, 1987). A brief review of the concepts is

appropriate.

The starting point for a clear understanding of the joint

employer and single employer concepts, and _ their

differences, is NLRB v. Browning-Ferris Industries, 691 F.2d

1117 (CA 3, 1982) (herein BFI). As the Court in BFI

explains, a single employer relationship exists where two

nominally separate entities are actually part of a single

integrated enterprise so that, for all purposes, there is in fact

only a single employer. The question is whether the two

firms constitute only one integrated enterprise. BFI at 1122.

It is pertinent to note that while diamonds, deficits, and taxes

may be forever, corporate arrangements need not be.

A-41

Specialty Waste, 269 NLRB 96 (1984) (single employer

status only temporary).

In deciding the singular employer question, the Board

considers four factors, ! none of which, alone, is

controlling, !9 nor need all be present.20 Single employer

status ultimately depends on all the circumstances of the

case,*! and such status is characterized by the absence of the

arm’s “ae relationship found among unintegrated

companies. 2 The fundamental inquiry is whether there

exists overall control of critical matters at the policy level.23

The four factors are:24

1) interrelation of operations,

2) common management,

3) centralized control of labor relations, and

4) common ownership.

In contrast, as the Third Circuit explains in BFI at 1122,

the joint employer concept does not depend on the existence

of a single integrated enterprise. Therefore, the four-factor

standard is inapposite.2> Rather, a finding that companies are

I8BFT at 1122.

19Emsing’s Supermarket, 284 NLRB No. 41, slip op. at 3 (June 18,

1987). a

2014,

21 Image Convention Services, 288 NLRB No. 116, slip op. at 8 (May 24,

1988).

22 BFI, id.: Emsing’s, id.

23Emsing's, id

24Image, id.

2SBFI at 1122; W. W. Grainger, 286 NLRB No. 8, slip op. at 5 (Sept. 30,

1987). But se Clinton's Ditch Coop. v. NLRB, 778 F.2d 132, 120 LRRM

3562 (CA 2, 1985). Although declining in Clinton's Ditch to adopt a

standard applicable to joint employer cases, the Second Circuit weighted

five factors which all relate to labor relations: (1) Hiring and firing, (2)

Discipline, (3) Pay, insurance and records, (4) Supervision, and (5)

Participation in the collective bargaining process. At least two

commentators have difficulty seeing any difference in this from the

A-42

joint employers assumes in the first instance that companies

are what they appear to be -- independent legal entities that

have merely chosen to handle jointly important aspects of

their employer - employee relationship. BFI at 1122.

In joint employer situations, it is a matter of determining

which of two, or whether both, respondents control, in the

capacity of employer, the Jabor relations of a given group of

workers. BFI at 1122-1123. Thus, the joint employer

concept recognizes that the business entitles involved are in

fact, separate, but that they share or codetermine those

matters governing the essential terms and conditions of

employment. BFI at 1123; Chesapeake Foods, 287 NLRB

No. 43, slip op. at 6 (Dec. 16, 1987). W. W. Grainer, 286

NLRB No. 43, slip op. at 6 (Sept. 30, 1987).

To establish joint employer status. there must be a

showing that the alleged joint employer meaningfully affects

matters relating to the employment relationship such as

hiring, firing, discipline, supervision and_ direction.

Chesapeake Foods, id. at 7. But the right of sufficient

control over the labor relations policies of a contractor may

well be a determining factor by itself in concluding that the

owner is in fact an employer of the contractor’s employees.

Cabot Corp., 223 NLRB 1388 (1978), affd. sub nom.

Chemical Workers Local 483 v. NLRB, 561 F.2d 253 (CA

DC. 1977). Finally, the burden of proving joint employer

status is on the General Counsel.

Alter ego status, a separate concept, is mentioned in

passing by one of the parties,and I shall treat it briefly. The

alter ego analysis considers the four factors of the single

employer inquiry and more. The focus of the alter ego

analysis is to determine whether one firm is simply the

disguised continuance of another firm. Marino Electric, 285

NLRB No. 53, JD slip op. at 16-17 (Aug. 19, 1987).

Board's test. W. V. Siebert and N. D. Webb, Joint Employer, Single

Employer, and Alter Ego, 3 The Labor Lawyer 873, 881 (No. 4, Fall

1987, ABA).

A-43

Typically an alter ego is established for the purpose of

evading (through a sham transaction or technical change in

operations ) the original employer’s responsibilities under

the Act, such as it may have under a collective-bargaining

agreement with a union. Marino, id. at 17-18; Watt Electric

Company, 273 NLRB 655, 658 (1984).

3. Analysis

a. The joint employer issue

During the spring of 1987, did ICC and ECC

“meaningfully” affect the employment relationship? I find

the answer to be, yes.

Jim D. Kelley, vice president in charge of ICC‘s coal

operations, is also president of ECC and president of Inter-

Chem Coal Company. Regardless of whether a single

employer status was litigated as to ICC, ECC, and Inter-

Chem, it is clear that ICC, through Kelley, made the policy

decisions for the ICC companies regarding coal. Although

ECC was the manager under the written agreement of March

24 with Hobbs (GC Exh. 4), in practice Kelley directed the

operations so as to serve the interests of ICC as well as the

interest of ECC and Hobbs. In so doing, Kelley assigned

Larry G. Blevins, an employee of Inter-Chem Coal

Company, to serve at the Porter mine. Ostensibly Blevins

went merely to serve as an adviser and consultant. In fact,

however, Blevins went as the general mine superintendent.

James Hobbs and Blevins both said so, and the conduct of all

parties demonstrates that it was so.

For example, in February James Hobbs told Supervisor

Darrell Stephens, to obey the instructions of Blevins. In

March Blevins was instrumental in having James Hobbs hire

Sisney as the mine superintendent. On March 17, the day

after Sisney was hired, Blevins told all supervision, including

Sisney, that “Inter-Chem” was now managing the mine, but

A-44

not to tell the employees that fact (he also informed them of

changes to be made in the pit area). This meeting was

followed immediately by one with the employees at which

Blevins (rather than James Hobbs, Perk Oberg, or John

Chulick) introduced Sisney as the new mine superintendent.

Also in March Blevins reassigned Supervisor Stephens so

that Stephens would spend more time in the pit relieving

Sisney so Sisney could spend more time in the office, and

informed the newly returned Terry W. Dean, now the

Union’s president, that Blevins was “running” the job, that

Hobbs was out, and to see Blevins on any union matter.

Even allowing for some exaggeration or puffing in the “out”

as to Hobbs, it is a fact that none of the three principals of

Hobbs was seen at the mine after march until Chulick arrived

in late May. Kelley, however, testified that he visited the

mine every week, daily in some weeks, to confer with “our

representative” at the site, Larry Blevins, between March and

the end of May (2:269-270).

Blevins personally supervised welder-mechanic Clifton

E. Walker. In either March or April when they disputed

whether a scraper part should be replaced (Walker) or

repaired (Blevins), Blevins told Walker “I’m the boss” and to

repair it. When the repair item failed, as Walker had

predicted, Blevins and Sisney called Walker into the office to

give Walker a written reprimand. Although Walker refused

to accept the document, the significance of the warming

incident is Blevins’ personal involvement in the disciplinary

process. Similarly, in March Blevins participated with James

Hobbs and Sisney when the three unsuccessfully tried to

persuade Walker to convert to a contract welder-mechanic.

Again in March, Blevins personally handled the Sunday

26Recall from Sisney's testimony that it was only the day before that

James Hobbs, at the mine office, hired Sisney. No reason is suggested in

the record as to why James Hobbs, if he in fact was at the mine on March

16, would not have stayed until the next day and introduced Sisney.

A-45

pay matter. After obtaining a favorable (to management)

interpretation of the CBA from Yeagley, ICC’s general

counsel, Blevins notified Dean and the other employees that

there would be no double time pay on Sundays unless they

had already worked 40 hours that week.

On May 4, Blevins was among the ICC group (Kelley,

Yeagley, and Blevins) which met with landowner Darrell

McCullough when McCullough closed the road to the tipple

over nonpayment by Hobbs of the road rental fees. No one

was present from Hobbs, not even Sisney. It is true that this

example, as some of the others, show Blevins more at the

policy or managerial level then at the pit level directly

supervising equipment operators, granting them time off,

approving vacations, and such matters. But that is why he

had Kelley replaced and Sisney brought in. Sisney was

handpicked by Blevins for that function. Blevins served at

the top, just under Kelley. Joint employer status is not

limited to the routine matters of supervision, but includes the

policy level that controls the mundane affairs of the pit level.

This is implicit in the concept of meaningfully affecting the

essential terms and conditions of employment of the workers.

In April Blevins was becoming exasperated with the

Union and began commenting to Supervisor Stephens about

how it would be easier to manage the mine without a CBA.

By late May, Blevins’ frustration with the restriction (in his

view) of the CBA took on an ugly tone. He now threatened

that the “company” would be better off without a union, and

if the men did not want to work the way he wanted them to,

“they” would close down the mine, open up under a different

name, and proceed to dig coal. Kelley denies that Blevins

spoke to him about restrictions of the CBA (2:200). I do not

credit Kelley, and I find that Blevins and Kelley did discuss

such “restrictions.”

I find that Blevins’ threatening attitude was not solely a

spontaneous expression of his personal frustration, but

reflected the views of Kelley and Hobbs’ John Chulick. By

A-46

late May Chulick was the contact person at Hobbs. He came

to the mine in late May, gave Sisney the timing on when to

cease mining, and the first week in June he (with his lawyer)

negotiated the mining contract with ICC. Chulick did not

testify. Drawing an adverse inference from his failure to

testify, I infer that had he testified, and truthfully, he would

have testified that no later than late May he began

discussions with kelley and Blevins about the feasibility of

escaping the CBA by subcontracting the mining to ICC or

one of its wholly owned subsidiaries. Although Kelley

denies any pre-June discussion or pre-June agreement for a

subcontract ( and presumably denies any talk of evading the

CBA), I do not credit his denial (2:291-292). Except for

routine details pertaining to the coal market, Kelley did not

testify with a favorable demeanor, and I do not believe him.

He impressed me not as sincere, but as clever. Sisney also

knew that Respondents planned to reopen nonunion. Thus,

when Sisney called dozer operator Phillip L. Thomas on May

31 to tell him the mine was closed, Sisney invited Thomas to

submit an application when the new company reopened the

mine, and that it would be operated nonunion (1:98-99)

ICC attaches to its brief a copy of Island Creek Coal

Company, 279 NLRB No. 116 (May 7, 1986) in which no

joint employer relationship was found between a coal mine

operator (ICCC) and an independent contractor (ILLMC)

whom ICCC was hired to perform various items of

construction work at the mine site. Missing from that case is

the pervasive control that Blevins exercised at the

management level here. No did ICCC become involved in

incidents of discipline (Walker) or contract administration (

Sunday overtime pay) as did Blevins. Blevins told all

supervision that “Inter-Chem” would be managing the mine.

No similar announcement was made in Island Creek.

Although more of the routine matters of alleged supervision

were involved in Island Creek than here, General Mine

Superintendent Blevins, as I have described, caused Sisney to

A-47

be hired as the mine superintendent to handle those matter. I

shall not list all the differences, but I find Island Creek

substantially different on the facts.

If it can be said that Hobbs retained control and discretion

under the written management agreement over matters

affecting its employees, as Hobbs argues (brief at 8), it also

can be said, and I find, that in fact and practice Hobbs

relinquished the lion’s share of that control to ICC and ECC

from March (February, actually) through May 1987. During

that March-May period, therefore, I find that ICC and ECC

were joint employers with Hobbs of the employees in the

recognized bargaining unit.

As for the period after May 31, the complaint alleges, in

paragraphs 15 and 17, that Respondents were unlawfully

motivated in refusing to rehire a majority of the bargaining

unit in June.

Complaint paragraph 18 alleges that since May 31

“Respondents” have refused to bargain with the Union by

withdrawing recognition from the Union and repudiating the

CBA.

Complaint paragraph 19 alleges that since June 8

"Respondent Inter-Chem” has operated the Porter mine “on

behalf of Respondent Hobbs as a non-union operation” and

has unilaterally changed wages, hours, and terms and

conditions of employment of unit employees by refusing to

give effect to the CBA. Complaint paragraph 21 alleges that

conduct to be a violation of Section 8(a)(5) of the Act.

Hobbs argues that after May 31 its status respecting the

mine is merely that of an “absentee owner” (brief at 18, 28).

With its direct relationship severed from June on, Hobbs

argues, even if it were considered a joint employer up to May

31, that status ceased to exist thereafter because it terminated

its employees on May 31 and thereafter subcontracted the

mining operation to ECC. (Brief at 18, 21.)

Respecting the time frame of June and later, ICC and

ECC argue that the complaint does not specifically allege

A-48

successorship, that any such claim was not litigated, and that

the evidence does not establish such (brief at 25).

In the Government's brief the General Counsel does not

expressly address the period of June and alter. The General

Counsel’s theory of joint responsibility after May 31 by

Hobbs and “Inter-Chem/Eastoak Coal Company” is stated

without expressly addressing the fact Hobbs subcontracted

the mining to ECC beginning June 4.27

Hobbs argues that the June contract mining agreement,

the subcontract, is not a sham transaction to avoid the CBA

or to discriminate against its former employees (brief at 26).

In their brief, ICC and ECC suggest that for them to be liable

they would have to be shown to be a single employer or as an

alter ego was not alleged (brief at 20, 22).

The General Counsel argues joint responsibility by a

theory of agency. Thus, “The Complaint alleges that

Respondent Inter-Chem, through its agents, exerted sufficient

control over the employees of Respondent Hobbs to

constitute a joint employer with Respondent Hobbs.” (Brief

at 14. ) And, “If one company functions as the agent of

another, pursuant to a management agreement, then they are

joint employers if. they share or co-determine matters

governing the terms and conditions of the employees.”

(Brief at 17.) The agency argument is expressed without

distinction as to the time frame, although the reference to the

management agreement clearly pegs it to the March-May

time p eriod. But as the General alleges and argues

responsibility by Hobbs, ICC, and ECC jointly, both before

and after May 31, it is clear that the Government relies on its

agency theory to fix responsibility of all three firms for the

entire time frame of both before and after May 31. The

27 Counsel did not attach a proposed order to the General Counsel's brief.

However, in the notice to employees counsel did attach, the employers

designated to sign reflect the General Counsel's joint employer theory,

with signature lines for both Hobbs and “Inter-Chem/Eastoak Coal

Company ”

A-49

General Counsel cites and relies on cases such as Union

Carbide Building Co., 269 NLRB 144 (1984).

The General Counsel neither expressly alleges nor argues

a sham transaction. In the absence of alleging and arguing a

sham transaction, or single employer or alter ego,~° how

does the government fix liability on all three entities after

May 31 and the June 4 subcontract? The General Counsel's

articulated theory is responsibility as joint employers without

explicit reference to a sham transaction.

The General Counsel’s unstated premise apparently is

that Hobbs remains in the picture because it is still the owner

of the mine permit. Hobbs did not sell the mining permit to

ICC or ECC. Thus, the theory apparently runs, ECC became

the mining contractor as Hobbs’ agent. Even assuming the

agent net snares ECC, what about ICC? ICC argues that

even if ECC is found to be a joint employer with Hobbs, ICC

has no liability because there is no allegation it is a single

employer or alter ego with ECC (brief at

20 fn. 3, 22).

Hobbs views the General Counsel’s position as an

attempt to buttress the joint employer theory by arguing that

Respondents acted in collusion to shut down the mine,

terminate union members, and repudiate the CBA. Hobbs

argues that it acted for non-discriminatory reasons (brief at

22), and contends that the contracting out of the mining

operation was not a sham transaction to evade the CBA or to

discriminate against its employees (brief at 26, 30). Hobbs

contends on brief that it ceased its mining operations and

contracted (subcontracted”) the work to ECC “because of

28 Toward the end of the Government's argument on brief, when liability

is attributed to Respondents for “transference of the mine, discharge of

the employees and subsequent failure and/or refusal to rehire said

employees is violative of the Act” the General Counsel cites McAllister

Brothers, 278 NLRB 601 (1986). In McAllister the Board found the

companies involved to be alter egos and a single employer. Because our

case is premised on liability as joint employers, McAllister is imapposite.

A-50

factors unrelated to labor costs,” citing Otis Elevator

Company2? and Milwaukee Spring Division.29 In any event,

Hobbs argues, even assuming the decision to shut down

turned on labor costs, the Union waived the right to bargain

over the issue by virtue of either language in the contract or

the failure of the Union to request to bargain over the effects

of the decision after being given “proper” notice of that

decision (brief at 28-30).

As to the latter, I find no waiver. The notice was sent too

late to have permitted bargaining before the May 31

terminations, and the credited evidence is that the Union

never received the notice. Moreover, it is ironic that Hobbs

after-the-fact devotes much space and energy in contending

the Sisney was Hobbs’ representative at the Porter mine, yet

Hobbs did not see fit to have Sisney -- the person on the

scene rather than at an office in St. Louis -- notify the Union

representatives of the decision to close the mine and offer to

bargain over the effects.

Hobbs’ contractual waiver argument is based on art. II,

sec 2.3 of the CBA, the “management rights” article (GC

Exh. 6 at 2). Hobbs expressly relies on the language

reserving to itself the sole right to “subcontract work and...

determine the number, scheduling and duration of shifts:

establish, change, modify or abolish materials, processes,

products, equipment and operations, including the right to

terminate, merge, or sell the business or any part thereof; . . .

However, the omitted portion of the subcontracting

clause reads, “subcontract work and arrange for work to be

done outside the plant by others or by other divisions,

departinents or affiliates of the Company; ... .” The full

29269 NLRB 891 (1984) (Otis Elevator II).

30265 NLRB 206 (1982) (finding no waiver by the union of the right to

bargain over a decision to relocate). In Milwaukee Spring II, 269 NLRB

601 (1984), the Board, Member Zimmerman dissenting, reversed

Milwaukee Spring I and dismissed the complaint.

A-S1

clause is ambiguous, for it can be read to mean only portions

of unit work, such as repairs to equipment, not the entire

work of the unit. Even if it plausibly can be read to mean the

entire unit, plausibility does not satisfy the established

requirement that waiver of a statutory right must be clear and

unmistakable. Collateral Control Corporation, 288 NLRB

No. 41, slip. op. at 9, fn. 18 (Mar. 31,1988).

But was Hobbs required to bargain with the Union over

its decision to contract out its mining operation? If the

decision turned on labor costs, apparently so under Otis

Elevator II. Why did Hobbs decide to contract out its mining

operation? Unfortunately, neither James Hobbs, perk Oberg,

nor John Chulick testified. Hobbs, on brief, offers as one

reason (the decision) the poor health of James Hobbs.

Although it appears James Hobbs had a heart attack in the

late spring, there is no evidence he did not recover

sufficiently to oversee the mining, or to testify, if he so

desired. Moreover, even before his heart attack, James

Hobbs stopped visiting the mine after March, leaving the on-

site management and supervision of the mine to Blevins and

Sisney.

There is a lot of indirect evidence that Hobbs was

suffering financially. ICC’s Kelley testified regarding

problems Hobbs was having with cash flow, credit, and

equipment availability. But it appears labor costs were a key

factor in Hobbs’ financial difficulty. With kelley’s help,

James Hobbs persuaded the union, at mid-term of the CBA,

to agree to a substantial labor cost reduction effective

January 1, 1987. The record also reflect that Blevins (and, as

I have found, Kelley and Chulick) wanted to convert the

mining operation into a nonunion venture because he viewed

the CBA as too expensive and restrictive. We also know that

when ECC began hiring in June under the June 4 mining

contract that benefits were eliminated and wages were cut

even further.

If I were to find that Hobbs’ decision to close the mine

A-52

was motivated by economics, and not by a desire to operate

nonunion, I would find that the decision to cease operating its

Porter mine and to subcontract the mining operation to ECC

turned on labor costs -- a matter over which the Union had

substantial control and which was amenable to resolution

through collective bargaining. Hobbs made no attempt to

notify the Union of its decision and to give the

Union the opportunity to bargain about the decision.

The General Counsel’s complaint does not expressly

refer to the subcontracting, nor does the General Counsel’s

brief. Indirectly, however, the Government attacks the

subcontracting. First, the complaint alleges animus

motivated the joint employers to discharge the unit

employees on May 31. Although the usual allegation of a

failure to rehire is missing, the failure to rehire concept

seems to be included in the Government's joint employer

theory of a continuing existence through the joint employer

status, and the General Counsel argues on brief that union

animus motivated the failure to rehire (brief at 18, 19). I

treat the animus allegation in a moment.

The second indirect attack is the allegations that the joint

employers have refused to bargain with the Union since may

31 by withdrawing recognition from the union and

repudiating the CBA (complaint paragraph 18), and since

“June 8” by “Inter-Chem” operating the Porter mine “on

behalf of Respondent Hobbs as a non-union operation and

has unilaterally” changed wages, hours, and terms and

conditions of employment, and has refused to give affect to

the CBA (paragraph 19).

In effect the General Counsel, as Hobbs clearly

recognizes, is relying on an unstated theory that the June 4

subcontract is a sham in order to joint the March-May period

to the June period and to bind Hobbs, ICC, and ECC as joint

employers for the June (and beyond) period as well as the

pre-June period. For it the subcontract were a legitimate,

arm’s length arrangement between Hobbs, as the permit

A-53

owners, and ECC, an independent contract, then neither

Hobbs nor ICC would be a joint employer with ECC after

May 31. Any remedy then would lie only as to Hobbs for

failing to bargain over the decision to subcontract, although

the remedy might include requiring Hobbs to cancel the

subcontract. The question to address now is the animus

issue.

b. The allegation of unlawful motivation

(1) The May 31, 1987 discharge of all unit employees

In view of my findings regarding the motivation of

Blevins, Sisney, and Kelley, with Hobbs being jointly

responsible, I find that indeed the subcontract was a

collusively inspired device to evade the CBA and to get rid

of the Union. All three Respondents participated in this

conspiracy to get rid of the Union and the CBA so that all

three could benefit from the permit granted by the public

(through the State of Oklahoma) to mine the coal.

Because ICC and ECC were joint employers with Hobbs

in the February-May period, all are responsible for the

animus expressed by Blevins. Indeed, I have found that

Blevins’ expressions simply mirror the opinion expressed to

him by Kelley and Chulick. In April-May Blevins expressed

his desire to operate nonunion. I have found that Kelley and

Blevins did recommend to Hobbs (Chulcik) that it contract

out the mining operation to get rid of the Union, and that

Hobbs (Chulcik) adopted the recommendations. I therefore

find that a motivating reason for Respondents’ closing the

mine and terminating the employees was to eliminate the

Union.

I also find that Respondents have not demonstrated they

would have taken this action even in the absence of the

Union and the CBA. Indeed, had Hobbs been free of the

CBA, and free to cut the pay of the operators to $9 an hour

A-54

with no fringe benefits, the evidence just as strongly suggest

s that Hobbs would have continued to operate the mine as it

does that Hobbs would have subcontracted the mining

operation to another in any event. Accordingly, I find that

the three Respondents (Hobbs, ICC, and ECC) violated

Section 8(a)(3) and (1), as alleged in complaint paragraph 16,

by terminating the bargaining unit on May 31, 1987.

Relying on the concept that certain conduct “inherently”

discourages union membership, the General Counsel cites a

case for the proposition that a person is held to intend the

foreseeable consequences of his conduct (brief at 18). If by

“inherently” the General Counsel refers to the principle that

certain conduct is “inherently destructive” of important

employee rights and requires no proof of antiunion motive to

prove a violation of the Act, I find it necessary to pass on the

applicability of that principle here.2! However, in one recent

case the Board did apply that principle when it found that the

purpose of plan closures and reopenings was to evade

obligations under a CBA. Swift Independent Corporation,

289 NLRB No. 51 slip op. at 18 ( June 29, 1988).

(2) The June 1987 failure to rehire

Complaint paragraph 15 alleges that between May 31 and

June 2 all but approximately four unit employees filed

applications “with Respondent Inter-Chem. However, only

about 12 unit employees were rehired by Respondent Inter-

Chem.” Respondents deny the allegation. (Paragraph 17

alleges improper motivation for that action, and paragraph 20

alleges the action to be a violation of Section 8(a)(3) and (1)

of the Act.) The presence of this allegation is somewhat

puzzling given the General Counsel’s joint employer

allegations and theory. That is, the remedy for the unlawful

31 See the Board’s discussion of NLRB v Great Dane Trailers, 388 U.S.

26 (1976), in Century Air Freight, 284 NLRB No. 85 slip op. at 5-8 (June

30, 1987) (a single employer case).

A-55

discharge of the group is to reinstate the group. If

respondents chose to rehire some of the discriminates, that

action does not absolve it of the responsibility to reinstate all.

Nevertheless, I shall discuss the allegation.

The evidence fails to show how many Hobbs’ employees

filed applications with ECC or how many of such applicants

ECC hired. The evidence shows that some applied and that

at least a few were hired. On an individual basis, I find that a

moving reason Blevins did not hire Terry W. Dean and

Clifton E. Walker was their union capacities and expressions.

Blevins did call Dean some 2 months later, but by then the

damage had been done to the Union. Blevins did not testify

as to why he did not hire Dean in June. I find a violation as

to the failure to hire Dean.

As for Walker, it possibly is true, as Walker speculated at

the hearing, that Blevins did not hire him because they had

experienced conflict (1:130-131). However, much of that

conflict arose, I find, from Walker’s reliance on the CBA as

protecting his work schedule. I find the General Counsel’s

evidence to establish a prima facie case. As Respondents

offered no evidence as to why it did not hire Walker,

Respondents, I find did not meet their burden of proof. I

therefore find the failure to hire Walker to violate Section

8(a)(3) and (1) of the Act, as alleged.

Because the mining subcontract is tainted by the

collusion of the three Respondents to defraud the bargaining

unit members of their statutory and contractual rights, the

subcontracting device does not serve to sever the joint

employer relationship. finding, therefore, that the joint

employer relationship remained intact after May 31, I also

find that the joint employers, as alleged, violated Section

8(a)93) and (1) of the Act when they, acting through their

agent ECC, rehired only some of the bargaining unit in June.

As the remedy for the unlawful termination of the entire

bargaining unit encompasses the relief for this violation, no

additional remedy need be ordered.

A-56

c. The refusal to bargain allegations

(1) Complaint paragraph 18

I have found the Respondents conspired to enter a

subcontracting arrangement whereby Hobbs could evade the

CBA and ICC and ECC, as ostensibly good faith independent

contractors, would not be bound by the CBA or have to

recognize the Union. I now find that, since May 31, Hobbs,

ICC, and ECC, as joint employers of the recognized

bargaining unit, have unlawfully refused to recognize and

bargain with the Union by withdrawing recognition from the

Union and repudiating the CBA, all as alleged in complaint

paragraph 18, and all in violation of Section 8(a)(5) ad (1) of

the Act.

(2) Complaint paragraph 19

Complaint paragraph 19 alleges, in effect, that ICC and

ECC, since early June have operated the Porter mine

nonunion as the agent of Hobbs, an have made unilateral

changes.

The evidence supports the allegation. I have found that

the contracting out was a sham, that it was for the illegitimate

purpose of eliminating the Union. The second step in the

conspiracy was to erect a documentary device to insulate the

parties from responsibility for their collusion. By

subcontracting the operation through ICC to ECC, Hobbs

appointed them its joint agent not simply to operate the mine,

but to implement the illegal scheme. Respondents ICC and

ECC moved promptly to make unilateral changes in the wage

rates and benefits the employees had enjoyed under the CBA.

In so doing, the three firms violated Section 8(a)(5) and (1)

of the Act as alleged.

Otis Elevator ii, cited and relied on by Hobbs, does not

A-57

apply because here the subcontracting was unlawfully

motivated. Airport Distributors, 280 NLRB No. 91, JD slip

op. at 26 ( June 30, 1986). In any event the change here did

no effect a fundamental change in the nature of this business.

At all times Hobbs has been the owner of the mining permit.

Before February-March it also operated the mine. From

February-March it technically operated the mine, but under a

management contract which, in practice, gave ECC (and

ICC) the lion’s share of the right to control operations at the

mine. Finally, on May 31 Hobbs took the additional step of

closing this operation as a prelude, I have found to the

subcontracting device.

Hobbs remains in the business of mining coal through its

agent, and joint employers, ICC and ECC. Hobbs did not sell

its mining permit, and it merely leased its equipment to ECC.

Through the sham subcontracting device, Hobbs simply

substituted a second set of employees (those hired by ECC)

fir the first set (the recognized bargaining unit).

I find that ECC began on June 4, 1987 to operate the

Porter mine as the agent of both Hobbs and ICC, and

constituted a joint employer along with Hobbs and ICC in the

clever, but illegal, scheme to defraud the bargaining unit

employees of their statutorily protect rights to union

representation and to the benefits of their CBA?? that the

Respondents, as alleged in complaint paragraph 19, have

unilaterally changed wages, hours, and working conditions

and refused to give effect to the CBA, all in violation of

Section 8(a)(5) and (1) of the Act.

Conclusions of Law

1. Hobbs, ICC and ECC each is an employer within the

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

32”Fortunately for everyone, the plan failed, as Clever Plans do, sooner

or later.” B. Hoff, The tao of Pooh at 37 (1982). -

A-58

2. The Union is a labor organization within the meaning of

Section 2(5) of the Act.

3. The following employees of Respondent Hobbs constitute

a unit appropriate for the purposes of collective bargaining

within the meaning of Section 9(b) of the Act:

All production and maintenance employees employed

at the Company’s mine in the United States,

excluding all salaried supervisors, office clerical

employees, guards, and supervisors as defined in the

Act.

4. At all times since August 9, 1985, the Union has been,

and is, the exclusive representative of all the employees in

the unit described above for the purposes of collective

bargaining within the meaning of Section 9(a) of the Act.

5. Since February 1987 Hobbs, ICC and ECC have

functioned as joint employers and are joint employers of the

employees in the bargaining unit, described above, employed

at Hobbs’ mine at Porter, Oklahoma.

6. By terminating the employees of the bargaining unit,

described above, at Porter, Oklahoma on May 31, 1987,

Hobbs, ICC, and ECC, as joint employers, violated Section

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

7. By refusing to rehire Terry W. Dean and Clifton E.

Walker by mid-june 1987 at the Porter, Oklahoma mine, joint

employers Hobbs, ICC, and ECC violated Section 8(a)(3)

and (1) of the Act.

8. By refusing since May 31, 1987 to recognize and bargain

with the Union as the exclusive collective bargaining

representative of the employees in the bargaining unit at the

A-59

Porter, Oklahoma mine, by withdrawing recognition from the

Union, and by repudiating the collective bargaining

agreement (CBA) of 1987, joint employers Hobbs, ICC, and

ECC have violated Section 8(a)(5) and (1) of the Act.

9. By operating the Porter, Oklahoma mine since June 4,

1987 on behalf of Hobbs as a nonunion operation, and by

thereafter unilaterally changing wages, hours, and terms and

conditions of employment of employees in the bargaining

unit by refusing to give effect to the 1987 CBA, joint

employers Hobbs, ICC, and ECC have violated Section

8(a)(S) and (1) of the Act.

10. The unfair labor practices found affect commerce within

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

The Remedy

Having found that Respondents have engaged in certain

unfair labor practices, I find it necessary to order them to

cease and desist and to take certain affirmative action

designed to effectuate the policies of the Act.

Because the subcontracting arrangement here, as I have

found, was unlawfully motivated, I shall order Respondents

to revoke it, if the Union so requests. I shall order revocation

only at the Union’s request because the Union may prefer to

include that subject in its bargaining with the joint

employers. So long as the joint employer relationship last,

ICC and ECC must recognize and bargain with the Union

regarding wages, hours, and terms and_ conditions of

employment affecting the bargaining unit.23— Hobbs, of

course, remains obligated to recognize and bargain with the

331 all the coal has been mined from the pit involved in this case, and the

joint employers have carried their relationship, and the work of the

bargaining unit, to another pit, then the joint employers’ duty to recognize

and bargain with the Union remains.

A-60

Union even if the joint employer relationship with ICC and

ECC is or has terminated.

Respondent must also offer all bargaining unit employees

terminated on May 31, 1987 at the Porter, Oklahoma>4 mine,

immediate and full reinstatement to their former jobs at the

porter, Oklahoma mine,discharging, if necessary, any other

hired into and holding those positions, or, if their jobs no

longer exist, to substantially equivalent jobs, without

prejudice to their seniority or any other rights or privileges

previously enjoyed, and make them whole for any loss of

earnings and other benefits suffered as a result of the

discrimination against them39, Backpay shall be computed in

the manner established in F. W. Woolworth Co., 90 NLRB

289 (1950), with interest calculated as prescribed in New

Horizons for the Retarded, 283 NLRB No. 181 (May 28,

1987),36 See general Isis Plumbing and Heating Co., 138

NLRB 716 (1962).

Although the CBA expired at the end of 1987, the

employees would have enjoyed certain benefits under the

CBA until its expiration. Respondents therefore must make

whole the bargaining unit employees for the value of the

benefits denied them the last 7 months of 1987. For those

employees who were rehired by ECC, they must be made

whole for the loss of pay and benefits they would have

received under the CBA in the manner set forth in Ogle

341 the joint employers have ceased mining for coal at the Porter,

Oklahoma mine involved here, and have carried their joint employer

relationship, and the work of the bargaining unit to another mine, the

reinstatement obligation attaches at the new location.

35identity of all members of the bargaining unit, and their addresses, are

among the matters which may be determined at the compliance stage.

36Under New Horizons, interest is computed at the “short-term Federal

rate” for the underpayment of taxes as set out in the 1986 amendment to

26 U.S.C. Sec. 66221. Interest accrued before January], 1987 (the

effective date of the amendment) shall be computed as in Florida Steel

Corp., 231 NLRB 651 (1977).

A-61

Protection Service, 183 NLRB 682 (1970).3/ There do not

appear to have been any contractual trust funds. However,

that can be fully determined in compliance. If there are any

such funds, the amounts owed for the contributions not paid

are to be calculated in accordance with Merryweather Optical

Co., 240 NLRB 1213 (1979).

No additional remedial order is needed respecting the

unlawful refusal to rehire Terry Wayne Dean, Clifton E.

Walker, and all members of the bargaining unit in June 1987

because any remedy is subsumed in the order to reinstate

them and to make them whole for their unlawful termination

on May 31, 1987.

On these findings of fact and conclusions of law, and on

the entire record, I issue the following recommended

Order:38

ORDER

Respondents Hobbs, ICC and ECC, their officers, agents,

successors and assigns, shall

1. Cease and desist from

(a) Discharging, refusing to rehire, or otherwise

discriminating against employees because they are

represented by Oklahoma Coal Miners Union (the Union) or

any other labor organization, or because they avail

themselves of the protection afforded by a union or a

collective-bargaining agreement.

370 gle applies only to situations where employees remain employed by

the employer but are not compensated in accordance with the existing

CBA. MIS, 289 NLRB No. 62 slip op. at 6 (June 30, 1988).

381f no exceptions are filed as provided by Sec. 102.46 of the Board's

Rules and Regulations, the findings, conclusions, and recommended

Order shall, as provided in Sec. 102.48 of the Rules, be adopted by the

Board and all objections to them shall be deemed waived for all purposes.

A-62

(b) Subcontracting work of the bargaining unit when the

purpose is to escape from the duty to recognize and bargain

with the Union and to evade the obligations of the collective-

bargaining agreement (CBA).

(c) Refusing to recognize and bargain with the Union as

the exclusive bargaining representative of all the employees

in the unit described below.

(d) Repudiating the CBA and making unilateral changes

in the wages, hours, and terms and conditions of employment

of the employees employed in the bargaining unit described

below. ;

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

restraining or coercing employees in the exercise of the rights

guaranteed them by Section 7 of the Act.

2. Take the following affirmative action necessary to

effectuate the policies of the Act.

(a) On request, Respondent Hobbs must bargain with the

Union as the exclusive representative of the employees in the

following appropriate unit concerning terms and conditions

of employment and, if an understanding is reached, embody

the understanding in a signed agreement. The unit is:

All production and maintenance employees,

employed at the Company’s mine in the United

States, all salaried supervisors, excluding office

clerical employees, guards, and supervisors as defined

in the Act.

(b) So long as a joint employer relationship exists among

Hobbs, ICC and ECC regarding the bargaining unit, then, on

A-63

request, the joint employers must bargain with the Union as

the exclusive representative of the employees in the

appropriate bargaining unit concerning terms and conditions

of employment and, if an understanding is reached, embody

the understanding in a signed agreement.

(c) On request by the Union, terminate the June 4, 1987

contract mining agreement (the subcontract), or any

successor agreement involving work of the bargaining unit.

(d) Offer all bargaining unit employees terminated on

May 31, 1987 immediate and full reinstatement to their

former jobs or, if those jobs no longer exist, to substantially

equivalent positions. Do this without prejudice to their

seniority or any other rights or privileges previously enjoyed.

Discharge, if necessary, any employees hired in the interim.

Make the bargaining unit employees whole for any loss of

earnings and other benefits suffered as a result of the

discrimination against them, and as a result of the repudiation

of the collective-bargaining agreement, in the manner set

forth in the remedy section of the decision.

(e) Remove from their files any reference to the unlawful

discharges and notify the employees in writing that this has

been done and that the discharges will not be used against

them in any way.

(f) Preserve and, on request, make available to the Board

or its agents for examination and copying, all payroll records,

social security payment records, timecards, personnel records

and reports, and all other records necessary to analyze the

amount of backpay due under the terms of this Order.

(g) Post at their Porter, Oklahoma mine, or at any

successor location, copies of the attached notice marked

A-64

" Appendix.”39 Copies of the notice, on forms provided by

the Regional Director for Region 16, after being signed by

the Respondents’ authorized representatives, shall be posted

by the Respondents immediately upon receipt and maintained

for 60 consecutive days in conspicuous places including all

places where notices to employees are customarily posted.

Reasonable steps shall be taken by the Respondents to insure

that the notices are not altered, defaced or covered by any

other material.

(h) Notify the Regional Director in writing within 20 days

from the date of this Order what steps the Respondents have

taken to comply.

Dated Washington, D.C., September 1, 1988.

Richard J. Linton

Administrative Law Judge

SOF this Order is enforced by a Judgment of a United States Court of

Appeals, the words in the notice reading "POSTED BY ORDER OF THE

NATIONAL LABOR RELATIONS BOARD” shall read "POSTED

PURSUANT TO A JUDGMENT OF THE UNITED STATES COURT

OF APPEALS ENFORCING AN ORDER OF THE NATIONAL

LABOR RELATIONS BOARD".

A-65

“APPENDIX”

NOTICE TO EMPLOYEES

POSTED BY ORDER OF THE

NATIONAL LABOR RELATIONS BOARD

AN AGENCY OF THE UNITED STATES GOVERNMENT

The National Labor Relations Board has found that we

violated the National Labor Relations Act and has ordered us

to post and abide by this notice.

Section 7 of the Act gives employees these rights.

To organize

To form, join, or assist any union

To bargain collectively through representatives of

their own

choice

To act together for other mutual aid or protection

To choose not to engage in any of these protected

concerted

activities.

WE WILL NOT fail and refuse to recognize and bargain

with the Oklahoma Coal Miners Union (the Union) as the

exclusive bargaining representative of our joint employees in

the unit described below:

All production and maintenance employees

employed at the Company’s mine in the United

States, excluding all salaried supervisors,

office clerical employees, guards, and

A-66

supervisors as defined in the Act.

WE WILL NOT repudiate any collective-bargaining

agreement (CBA) which covers the employees in_ the

bargaining unit.

WE WILL NOT subcontract work of the bargaining unit

when the purpose is to escape from our duty to recognize and

bargain with the Union and to evade the obligations of the

CBA.

WE WILL NOT make unilateral changes in wages,

hours, and terms and conditions of employment of the

employees employed in the bargaining unit.

WE you for supporting Oklahoma Coal Miners Union or

any other union.

WE WILL NOT in any like or related manner interfere

with, restrain, or coerce you in the exercise of the rights

guaranteed you by Section 7 of the Act.

WE WILL as your joint employers, on request, bargain

with the Union and put in writing and sign any agreement

reached on terms and conditions of employment for you in

the bargaining unit, and Hobbs & Oberg Mining Company,

Inc. will, on request by the Union, bargain as stated.

WE WILL, on request by the Union, terminate the June

4, 1987 contract mining agreement (the subcontract), or any

successor agreement involving work of the bargaining unit.

WE WILL offer all bargaining unit employees terminated

on May 31, 1987 immediate and full reinstatement to their

former jobs or, if those jobs no longer exist, to substantially

equivalent positions. WE WILL do this without prejudice to

A-67

their seniority or any other rights or privileges previously

enjoyed. If necessary to make room for the returning

bargaining unit employees,

WE WILL discharge any employees hired since May 31,

1987.

WE WILL make whole the bargaining unit employees for

any loss of earnings and other benefits resulting from their

discharge, less any net interim earings, and from our

repudiation of the collective-bargaining agreement, plus

interest.

WH WILL notify each of them in writing that we have

removed from our files any reference to his discharge and

that the discharge will not be used against him in any way.

A-68

HOBBS & OBERG MINING COMPANY, INC.

(Employer)

Dated: By:

Representative Title

INTERNATIONAL CHEMICAL COMPANY

(Employer)

Dated: By:

Representative Title

EASTOAK COAL COMPANY

(Employer)

Dated: By:

Representative Title

This is an official notice and must not be defaced by anyone.

This notice must remain posted for 60 consecutive days from

the date of posting and must not be altered, defaced, or

covered by any other material. Any questions concerning

this notice or compliance with its provisions may be directed

to the Board’s office, 819 Taylor Street, Room 8A24, Fort

Worth, Texas 76102-6178. Telephone number (817) 334-

2941.

A-69