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

> Briefs, arguments, decisions, and more.

URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385010_2178%3A1

## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 1992
- **Citation:** 503 U.S. 959

## Text

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 empl

[Text truncated at 120,000 characters. The full text is on the page linked above.]

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385010_2178%3A1. Public record. Not legal advice.