Opposition Brief — U. S. Marine Corp. v. National Labor Relations Board

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No. 91-1006 _/ YAN 22

1992

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IN THE

Supreme Court of the United States

OCTOBER TERM, 1991

U. S. MARINE CORPORATION AND

BAYLINER MARINE CORPORATION,

. Petitioners,

NATIONAL LABOR RELATIONS BOARD AND

INTERNATIONAL UNION, ALLIED INDUSTRIAL WORKERS

OF AMERICA, AFL-CIO,

Respondents.

On Petition for a Writ of Certiorari to the

United States Court of Appeals

for the Seventh Circuit

RESPONDENT INTERNATIONAL UNION,

ALLIED INDUSTRIAL WORKERS OF AMERICA,

AFL-CIO, AND ITS AFFILIATED LOCAL LOCAL 879,

ALLIED INDUSTRIAL WORKERS OF AMERICA’S

BRIEF IN OPPOSITION

KENNETH R. LOEBEL

Counsel of Record

PREVIANT, GOLDBERG, UELMEN,

GRATZ, MILLER & BRUEGGEMAN, S.C.

1155 N. RiverCenter Dr.

Suite 202

P. O. Box 12993

Milwaukee, WI 53212

(414) 271-4500

Attorneys for Respondents

International Union, Allied

Industrial Workers of America,

AFL-CIO and its affiliated local,

Local 879, Allied Industrial Workers

of America

WILSON - Epes PRINTING Co.. Inc. - 789-0096 - WASHINGTON, D.C. 20001

® SS oo

LIST OF PARTIES

In addition to the International Union, Allied Indus-

trial Workers of America, AFL-CIO, which is listed in

the caption, Local 879, Allied Industrial Workers of

America, which is an affiliated local of the International

Union, Allied Industria] Workers of America, AFL-CIO,

was also a party to those proceedings had before the

Court of Appeals.

The International Union, Allied Industrial Workers of

America, AFL-C1O and its affiliated local, Local 879,

Allied Industrial Workers of America, will hereinafter

be referred to together as the “Union”.

TABLE OF CONTENTS

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TABLE OF AUTHORITIES ...0002002000....2cccceee eee ceeeeee ee

COUNTER STATEMENT OF THE CASE...................

REASONS FOR DENYING THE WRIT ......................

Il.

AN EMPLOYER’S REFUSAL TO HIRE THE

EMPLOYEES EMPLOYED BY THE PREDE-

CESSOR AS PART OF A SCHEME TO

EVADE ACQUIRING A BARGAINING OB-

LIGATION UNDER BURNS IS UNLAWFUL

UNDER § 8(a) (3) OF THE ACT AND THE

COURT OF APPEALS DECISION HOLDING

THAT THERE WAS SUBSTANTIAL EVI-

DENCE ON THE RECORD TO SUPPORT

THE BOARD’S CONCLUSION WAS

dais acks cavivaasalicniiseicnsoiioesdetonscinpacer

THE BOARD’S RESTORATION OF THE

STATUS QUO ANTE REMEDY WAS NOT

INCONSISTENT WITH “BURNS”; WAS

NOT PUNITIVE; AND THE COURT OF

APPEALS’ DECISION ENFORCING THE

BOARD’S REMEDIAL ORDER APPLIED

THE PROPER STANDARD FOR REVIEW

AND WAS NOT IN CONFLICT WITH DECI-

SIONS OF OTHER CIRCUITS |...

Neen a rccusternerepnuwoensiovecetuseni

(iii)

Page

TABLE OF AUTHORITIES

Cases Page

Ballou Birch Co. v. NLRB, 798 F.2d 339 (8th Cir.

BRED <eniesissseacsendinnsscestincadseadleaiaeipelaamiardnlaane nice iSite 15

Bigelow v. RKO Radio Pictures, 327 U. S. 261

2 | EE ne Renee TE Le ee Seema: ae 20

Birch Run Welding and Fabricating Inc. v. NLRB,

761 F.2d 1175 (8th Cir. 1985) —....202022220 ee. 15

Fall River Dying & Finishing Corp. v. NLRB, 482

SN I I cckicdeccarpssvadinntnscedieAccesndvcnnesiornnsiicens 16, 18

Fibreboard Corp. v. NLRB, 879 U.S. 203 (1964)... 17

Food Handlers v. Valmac, 528 F.2d 217 (8th Cir.

DARI Se oS ae ed ee 21

Franks Bros Co. v. NLRB, 482 U.S. 27 (1987)....... 16

Golden State Bottling Co. v. NLRB, 414 U.S. 168

BOAR A ANAS SONI ST i ia We ae eee 14

Halo-Krome Co. v. NLRB, —— F.2d ——, 138

sr 6 Eb. ) rel ocean eee eee 14

Howard Johnson Co. v. Hotei Empioyees, 417 U.S.

SRY IIE ict icine eccice-etocanindenobastibsnpetiaiatdbctntertaeanies 18, 17

Laborers Trust Fund v. Advanced Concrete, 484

Aa I dab ceaileet ni sabceniacabhoibeedesctibiss 13,17

Local 879 AIW, et al. v. Chrysler Marine Corp.,

et al., Civil Action 83-C-1983 _.....0002..00ooo ee... 3

Local 879, AIW v. Chrysler, 819 F.2d 786 (7th Cir.

| 5 RORGIRRCENC Eee SERN ae Pee Me Fes We ee ee 3

M.S.F. Industries Inc. v. NLRB, 568 F.2d 166

I Ce ig a 15

Majestic Molded Products Inc. v. NLRB, 330 F.2d

RN I Te UID aireccencinstidccicdecnictienietonsacecpetnnensuiens 15

NLRB v. Burns Int'l Security Services, 406 U.S.

Se VR a 13, 16, 17

NLRB v. C & C Plywood, 385 U.S. 421 (1967) .... 16

NLRB v. Katz, 36 U.S. 736 (1962) ..........0...0000000... 19

NLRB v. Transportation Management Corp., 462

es RG ERO RE Soe ey Ae Se 14

H. K. Porter Co. v. NLRB, 397 U.S. 99 (1970) .... 18

Riggs v. Palmer, 115 N.Y. 506, 511-512, 22 N.E.

I calls Fishes os cenaacacneaceciinmasamananentasaincs 20

Simon & Schuster, Inc. v. Members of New York

State Crime Victims Board, US. , 60

ie SS Fy Ls __ | cana enne omen 20

TABLE OF AUTHORITIES—Continued

Page

Spruce Up Corp., 209 NLRB 194 (1974), enfce’d,

529 F.2d 516 (4th Cir. 1975) -.....02002222 ee... 18

Story Parchment Co. v. Patterson Parchment.

Paper Co., 282 U.S. 555 (1981) -..........................- 20

Thorp Sales Corp. v. Gyuro Grading Co., 111

aE SI IIE so cseiicesonciccintteertnnsddccedtndiseniecnaninonteasss 20

Virginia Electric & P. Co. v. NLRB, 319 US. 533.. 18

Universal Camera Corp. v. NLRB, 340 U.S. 474

II os sicsibicihsitessiceditanniaceicandaacaasaaan cetera 14

Other Authorities

Section 8(a) (3) (5) and (1) 20.22.22... passim

I oi a aenuacaaiioniael passim

Paradigms Lost, John L. Casti..........0...0.............-------- 20

IN THE

Siyreme Court of the United States

OCTOBER TERM, 1991

No. 91-1006

U. S. MARINE CORPORATION AND

BAYLINER MARINE CORPORATION,

* Petitioners,

NATIONAL LABOR RELATIONS BOARD AND

INTERNATIONAL UNION, ALLIED INDUSTRIAL WORKERS

OF AMERICA, AFL-CIO,

Respondents.

On Petition for a Writ of Certiorari to the

United States Court of Appeals

for the Seventh Circuit

RESPONDENT INTERNATIONAL UNION,

ALLIED INDUSTRIAL WORKERS OF AMERICA,

AFL-CIO, AND ITS AFFILIATED LOCAL LOCAL 879,

ALLIED INDUSTRIAL WORKERS OF AMERICA’S

BRIEF IN OPPOSITION

The Respondent Union respectfully requests that this

Court deny the petition for a writ of certiorari filed on

behalf of U. S. Marine Corporation and Bayliner Marine

Corporation (hereinafter referred to together as “U. S.

Marine”)! to review the judgment of the Seventh Circuit

1U.§8. Marine in its Rule 29.1 Statement has pointed out that at

the present time Brunswick Corporation (“Brunswick’’) has ac-

quired all the shares of U. S. Marine and Bayliner Marine. It

should be noted that it was in the latter part of 1986 that Brunswick

had acquired all the shares of Bayliner and U. S. Marine from the

prior four common shareholders (App. 100a) and has exercised

reported at 944 F.2d 1305 (7th Cir. Sept. 25, 1991)

(en banc).

COUNTER STATEMENT OF THE CASE

The petition of U. S. Marine tends to overlook or omit

record evidence; how the National Labor Relations Board

(Board) had analyzed that evidence; and the standard

that was applied by the Court of Appeals in reviewing

the Board’s findings and conclusions relative to that rec-

ord evidence.

What the record discloses is that on October 19, 1983,

Orin Edson,’ the then Chairman of Bayliner, had written

Chrysler and asserted, “. .. Our entire goal is to purchase

an ongoing business ... Bayliner Marine Corporation or

its assignee, would agree to purchase all the assets of the

Chrysler Marine Corporation...” (GC 103).% (em-

phasis added)

On December 7, 1983, James W. Hoag, Bayliner’s Vice-

President for Administration and an attorney, reported

to Hartford, Wisconsin and on behalf of U. S. Marine

was responsible for the hiring of the employees to be

employed at the Hartford plant after the sales/purchase

agreement with Chrysler was consummated (ALJ at App.,

101la-102a).

On December 18, 1983 Hoag along with Chrysler rep-

resentatives, met with the Union’s representatives and

control over the plant located in Hartford, Wisconsin. In April

1991 it was announced by Brunswick that the decision to close the

Hartford, Wisconsin plant had been made and it is undisputed that

by no later than January 31, 1992 such plant will be totally closed

and the few employees left will also be let go.

2 Orin Edson was one of the only four shareholders who-owned

both Bayliner and U. S. Marine (App. 100a).

3 The Union will refer to references from U. S. Marine’s Petition

as (“Employer’s Pet. p. ———”); to the decision of the Administra-

tive Law Judge as (“ALJ at App. ——’’); to the decision of the

Board as (“Board at App. ——’’) ; to General Counsel's exhibits as

“GC ——”); and to employer exhibits as (Emp. Exh. ——’”’).

Hoag informed the Union’s representatives that Bayliner

did not intend to recognize the Union and that he was

not interested in having a union represent the employees,

and that he was too busy to deal with the Union at that

time (ALJ at App. 114a).

On December 28, 1983, Hoag provided Chrysler with

his sworn affidavit that Chrysler then presented to the

U. S. District Court for the Eastern District of Wisconsin

in the matter of Local 879 AIW, et al. v. Chrysler Marine

Corp., et al., Civil Action 83-C-1983 and wherein Hoag

swore “... That Bayliner... (d/b/a U. S. Marine) ...

expects to have a representative complement of employees

hired in early January of 1984... He [Hoag] further

believes that their [Chrysler employees] prior work expe-

rience will be advantageous in securing employment with

Bayliner as it should reflect the qualification it seeks .. .”

(GC Exh. 12).*

On January 13, 1984 Chrysler closed its doors (ALJ

at App. 100a). At the time Chrysler closed the Hartford

plant it had employed approximately 262 employees in the

bargaining unit represented by the Union (ALJ at App.

110a).

Hoag established the procedures that were to be fol-

lowed for the interviewing of those applicants who sought

to be employed by U. S. Marine at the Hartford plant

and it was Hoag that made the decisions as to who would

be hired and who would not be hired (ALJ at App. 112a).

On January 23, 1984 U. S. Marine commenced produc-

tion at the Hartford plant with 219 employees, all of

4The Union had obtained a “Boy’s Market” preliminary injunc-

tion pending the results of arbitration against Chrysler, but Chrys-

ler obtained a stay within days from the Court of Appeals (App.

5a). Also see Local 879, AIW v. Chrysler, 819 F.2d 786, 787 (7th

Cir. 1987). It wasn’t until after the Court of Appeals decision in

Chrysler in May 1987, over three years after U. S. Marine took

over, that the former Chrysler employees received the fruits from

the Union’s success in the arbitration against Chrysler.

whom had been former Chrysler employes. (ALJ at App.

112a-1138a).

On January 25, 1984 the Union requested U. S. Marine

to recognize it and to provide the Union with certain

information. When the Union received no response, it

filed the ULP charges in 30-CA-8206 on February 2,

1984. (ALJ at App. 114a-115a).

U. S. Marine continued to hire employees after the

Union filed the ULP charge but no further former Chrys-

ler employees were hired (ALJ at App. 113a). There

were 34 former Chrysler employees who had applied for

employment, all of whom had between 10 years and 31

years of service with Chrysler (Board at App. 68a n.4)

and who possessed the skills, abilities, and versatility and

other work related characteristics comparable to those 223

former Chrysler employees who had been hired. None of

the 34 former Chrysler employes not hired was ever given

any reason by Hoag or anyone else as to why he or she

had been rejected (ALJ at App. 127a and see Tr. 1298-

1300).

On February 8, 1984, U. S. Marine wrote to Region 30

of the NLRB in response to the Union’s ULP charge in

Case No. 30-CA-8206 and then claimed, “. . . that the

time to review the employment status to determine suc-

cessorship is when a representative complement has been

hired and not before .. .” (GC Exh. 66).°

On February 17, 1984 U. 8. Marine again wrote to

Region 30 of the NLRB and asserted, “. . . Based on

production forecasts prepared in January, Employer ex-

pects that 460 production and maintenance workers will

be employed in June 1984. This forecast was prepared

on the basis of information from Employer’s marketing

and manufacturing departments...

5In Hoag’s earlier sworn affidavit provided to the district court

in the Chrysler case Hoag had represented under oath “That Bay-

liner... (d/b/a U. S. Marine) ... expects to have a representative

complement of employees hired in early January of 1984...” (GC

Exh. 12).

“There are approximately 35 open applications from

former Chrysler employees. It is very unlikely when the

complement of 460 is reached a majority will have been

former Chrysler employees ... If the work force at the

appropriate time consists of a majority of former Chrys-

ler employees, then the question of successorship for rec-

ognition must be addressed .. .” (GC Exh. 43) (emphasis

added).

On February 28, 1984, the General Counsel of the

NLRB caused to be issued a complaint in 30-CA-8206

alleging that U. S. Marine was violating § 8(a) (5) and

(1) by failing to recognize the Union. On March 2, 1984,

U. S. Marine filed an answer denying that it had any

obligation to recognize the Union and to begin to bargain

collectively with the Union as the exclusive bargaining

representative of the employees.

On April 13, 1984, the Board petitioned the U. S. Dis-

trict Court for the Eastern District of Wisconsin for in-

terim relief as provided for under § 10(j) of the Act while

the proceedings were pending before the administrative

agency. Hoag in another affidavit dated April 27, 1984

(GC Exh. 43) and submitted to the district court in op-

position to the Board’s seeking interim relief under

$ 10(j), represented therein that U. S. Marine’s employ-

ment projections evidenced that there would be 460 em-

ployees employed in June 1984.

Hoag did not disclose to the Board or to the District

Court that U. S. Marine then had two employment pro-

jections in its possession prepared on February 15, 1984

and April 4, 1984 evidencing that the number of em-

ployees employed in June 1984 would not exceed 396 (GC

Exh. 35 and 38; also see App. 9a n.6).

The employment projection prepared by Hoag some-

time in January 1984 to show 460 was later found by the

ALJ to have been, “. . . false and designed to deceive the

Board and the Courts...” (ALJ at App. 133a) The

Board affirmed such finding (Board at App. 64a-65a).

On May 10, 1984 the district court granted the Board’s

petition under § 10(j) and caused to be issued an injunc-

tion enjoining U. S. Marine from refusing to recognize

the Union during the pendency of the administrative pro-

ceedings that were still to be had before the NLRB.

U. S. Marine did not take any appeal from the District

Court’s 10(j) injunction and pursuant to that injunction

U.S. Marine began to meet with the Union.*®

In response to the Union’s request to know what rea-

sons existed as to why U. S. Marine had not hired any of

the 34 former Chrysler employees while continuing to hire

other individuals Hoag informed the Union “that the hir-

ing was done by Bayliner managers and staff who were

totally unfamiliar with the history and personnel conflicts

of the former Chrysler organization.” (Emp. Exh. 24).’

Between January 23, 1984 and July 2, 1984, which is

the date the Union filed the unfair labor practice charge

alleging the 34 8(a)(8)’s, U. S. Marine had hired ap-

proximately 102 additional employees none of whom had

been formerly employed by Chrysler (GC Exh. 41g).

On October 1, 1984 the Union filed an additional unfair

labor practice charge wherein it alleged that U. S. Marine

® James Hoag was U. S. Marine’s principal representative in the

bargaining meetings that were had as a result of the issuance of

the § 10(j) injunction by the District Court. U. S. Marine did not

withdraw its answer to the General Counsel’s outstanding complaint

and it continued to deny that it was a successor to Chrysler.

In addition, U. S. Marine continued to hold Safety and Progress

Committee meetings whereby it continued to deal directly with the

employees and for which it was found in contempt (App. 10a).

7 Subsequently at the hearings had before the ALJ, Mr. Hoag

testified that in fact he had met with three former Chrysler execu-

tives and had each of these three individuals rate all the former

Chrysler employees on a scale of one to three. The ALJ found that

“Hoag then considered all this information and made the decisions

on those who would be hired, and those who would not, without

further consultation with the interviewers, the former Chrysler

officials, or anyone else .. .” (ALJ at App. 112a)

did not confer in good faith in an effort to reach any

agreement.

The NLRB’s General Counsel caused complaints to be

issued relative to each of the two additional unfair labor

practice charges the Union had filed in addition to the

complaint issued in the original charge. On September 16,

1985, the hearings before the ALJ were opened involving

all three complaints that had been issued and these hear-

ings consumed some nine (9) days and 1,887 pages of

transcript as well as over 150 total exhibits.

Notwithstanding that U. S. Marine’s principal repre-

sentative Mr. Hoag, an attorney, had earlier provided a

sworn affidavit to the District Court wherein he had iden-

tified that it was “... Bayliner... (d/b/a U. S. Marine)

[that] expects to have a representative complement of

employees hired...” (GC 12), U. S. Marine nonetheless

denied the allegation that Bayliner and U. S. Marine con-

stituted a single employer. U. S. Marine also persisted

in its denial that it had violated the Act by having failed

to recognize the Union when the Union had first requested

it to do so in January 1984 even though by September 16,

1985, U. S. Marine knew that the number of employees

employed by it at the Hartford plant had never reached

the 460 figure in June of 1984 that Hoag had falsely pro-

jected and that in fact the number of former Chrysler

employees employed by it had always constituted a ma-

jority of U. S. Marine’s work force (Board at App. 64a-

65a) .8

On August 22, 1986 the ALJ issued his decision and

found, amongst other things, “. . . that the manpower

figures computed by Hoag were false and designed to de-

ceive the Board and the Courts on a theory that full em-

SU. S. Marine also even denied that the bargaining unit was

appropriate and the ALJ later held, “. . . I find in these instances

that Respondents’ Answers are not based upon real issues of fact

or law, are frivolous and are designed to prolong and extend these

proceedings ...” (ALJ at App. 125a n.26).

ployment at the 460 level would not be attained until

June...” (ALJ at App. 133a); and that U. S. Marine

had violated § 8(a)(5) and (1) in numerous respects

(ALJ at App. 148a-151a).

The ALJ did not, however, conclude that U. S. Marine’s

failure to have hired the 34 former Chrysler employees

violated § 8(a)(3) or (1) of the Act. (ALJ at App.

133a)

U. S. Marine filed exceptions to the ALJ’s decision and

in those exceptions it persisted in claiming that U. S.

Marine and Bayliner were not a single employer, and it

also excepted “to any remedy in light of the fact that no

unfair labor practices were committed...”

Both the Union and General Counsel had taken excep-

tions to the ALJ’s decision and each had also filed answer-

ing briefs to the exceptions taken by U. S. Marine, U. S.

Marine, however, filed no answering brief to the excep-

tions taken by either the Union or General Counsel even

though both the Union and General Counsel were seeking

additional relief including a restoration of the status quo

ante remedy (Board at App. 61a).

On April 17, 1989, the Board issued its decision and

order and affirmed the ALJ’s findings that the manpower

figures concocted by Hoag had been false and designed to

deceive the Board and the courts (Board at App. 64a-

65a), and that U. S. Marine and Bayliner constituted a

single employer (Board at App. 62a) and that U. S.

Marine had violated § 8(a) (5) and (1) of the Act in the

various ways as determined by the ALJ (Board at App.

62a).

In addition, however, the Board, contrary to the ALJ,

concluded that U. S. Marine’s failure to have hired the

34 former Chrysler employees did violate § 8a) (3) and

(1) of the Act because as the Board explained, “. . Once

Hoag decided that 460 would be the false projection, it

became imperative that he hire fewer than 231 former

Chrysler employees, or the 460 figure became meaningless

as a defense to the Union’s recognition claim. Thus, the

sham inflation of the full-compliment projection and the

decision to stop rehiring former Chrysler employees once

their number had reached 223 are complementary aspects

of the same scheme sought to be carried out by U. S.

Marine... .” (App. 66a; Board at App. 66a; emphasis

added).

The Board’s order required U. S. Marine, amongst

other things, to offer employment to and make whole those

34 former Chrysler employees that had applied for em-

ployment, but had not been hired nor provided any reason

by U. S. Marine as to why any of them had not been

hired. (Board at App. 78a-79a)

In addition, the Board’s order® required that U. S.

Marine,

2. Take the following affirmative action necessary

to effectuate the policies of the Act... (c) On re-

quest of the Union, rescind any departures from

terms and conditions of employment that existed im-

mediately before the Respondent’s take over from

Chrysler Corporation of the Hartford, Wisconsin

operations, retroactively restoring preexisting terms

and conditions of employment, including wage rates

and benefit plans, and make the employees whole by

remitting all wages and benefits that would have

been paid absent such unilateral changes from Jan-

uary 23, 1984 until they regotiate in good faith with

the Union to agreement or to impasse...

(Board at App. 77a).

U. S. Marine then petitioned the Seventh Circuit to re-

view the Board’s order only insofar as the Board’s order

® One member dissented to the restoration of the status quo ante

remedy sua sponte on due process grounds namely that such remedy

had not been alleged in the complaint (Board App. 80a-85a). U. S.

Marine makes no claim that the Court of Appeals rejection of that

due process argument was improper (see App. 39a-42a).

had held that U. S. Marine had violated § 8(a) (3) and

(1) by failing to hire the 34 former Chrysler employees

and insofar as the Board’s remedial order required U. S.

Marine to restore the status quo ante that had existed

immediately prior to U. S. Marine’s take over.’°

U. S. Marine no longer challenged the ALJ’s conclu-

sions, as affirmed by the Board, that:

(1) U. S. Marine Crporation and Bayliner consti-

tuted a single employer,

(2) U. S. Marine was a successor employer to

Chrysler,

(3) U. S. Marine violated section 8(a) (5) and (1)

of the Act by

(a) refusing to recognize and furnish certain

information to the Union,

(b) failing to bargain in good faith with the

Union,

terms and conditions of employment,"

(d) bargaining individually with employees,

and

(e) establishing and bargaining with an em-

ployer-dominated labor organization (the

Safety and Progress Committee).

(App. 17a-18a).

Judge Ripple writing for the majority of the Seventh

Circuit did observe, however, that in analyzing the Board’s

1 The Union also petitioned the Seventh Circuit to review the

Board’s order insofar as the Board had failed to provide additional

remedies requested by the Union. The Seventh Circuit denied the

Union’s petition (App. 43a-5la).

11 The Unilateral changes referred to were those that U. S. Marine

put into effect after it met with the Union but reached no bona fide

impasse (ALJ App. 148a-150a).

order that “We also note that these uncontested violations

‘do not disappear by not being mentioned in a brief. They

remain, lending their aroma to the context in which the

[remaining] issues are considered citation omitted] ...”

(App. 18a)

On September 25, 1991, the en bane Court of Appeals

issued its decision enforcing in full the Board’s order. The

decision was unanimous that there was substantial evi-

dence on the record as a whole to support the Board’s con-

clusion that U. S. Marine’s failure to have hired the 34

former Chrysler employees violated § 8(a) (3) and (1) of

the Act (App. 28a-29a; 51a-52a).

As to the Board’s remedial order that required U. S.

Marine to restore the status quo ante (App. 77a) the vote

was 6-5 to enforce the Board’s order. The majority opin-

ion by Judge Ripple held the Board’s remedy in the cir-

cumstances of this particular case was within the Board’s

statutory authority under $10(c) because

. . . The Board’s order is designed to prevent U. S.

Marine from taking advantage of its wrongdoing

to the detriment of the employees. The Board pre-

sumes tha‘, but for the unlawful practice, substan-

tially all of the employees would have been retained

and the employer would be obliged to consult with

the Union before setting new terms. Because of this

obligation to bargain with the Union, restoration of

the previously existing employment terms, the status

quo ante, is an appropriate remedy...

(App. 38a)

The dissenting opinion by Judge Easterbrook, was

grounded on the premise that even a new owner that seeks

by unlawful means, including unlawfully refusing to hire

employees of the predecessor for no reason other than to

evade acquiring the obligations of a “successor” under the

Act nonetheless still retains the absolute right to establish

whatever initial terms and conditions of employment that

it chooses and the Board’s order was not a remedy but was

a penalty and should not be enforced. (App. 5la-52a)

REASONS FOR DENYING THE WRIT

U. S. Marine’s petition for certiorari claims that the

Seventh Circuit’s judgment gives rise to two questions

that are both worthy of review by this Court.

The Union suggests that in regards to the alleged issue

of “Whether the Board and the Court of Appeals mis-

allocated the statutory burden of proof by ordering U. S.

Marine to hire the remaining 34 former Chrysler work-

ers...” (U.S. Marine Petition at i) that such “issue’’,

regardless of how artfully phrased, does not justify this

Court’s review of what at its core, simply involves a ques-

tion of weighing the evidence in the record to determine

whether or not there was substantial evidence in the

record as a whole to support the Board’s conclusion that

U.S. Marine’s failure to have hired the 34 former Chrysler

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

The issue concerning whether the Board has the statu-

tory authority under Section 10(c) to order any successor

employer to ever restore the terms and conditions of the

predecessor employer is of more substance, particularly

in view of Judge Easterbrook’s dissenting opinion. The

Union nonetheless would in the circumstances of this par-

ticular case and in view of the current situation involving

the closing of the Hartford plant, respectfully submit that

U. S. Marine’s petition should be denied in toto. The

Seventh Circuit’s judgment enforcing the Board’s order,

given the specific facts and circumstances that were found

to exist does not create a conflict with the other circuits;

and a restoration of the status quo ante is not a penalty

but is a type of remedy that is available to the Board un-

der § 10(c) of the Act.

The Union would emphasize that the Board’s restora-

tion of the status quo ante remedy in the context of a

successorship case is inextricably interrelated with and

arises from its findiny that U. S. Marine had violated

both $ 8(a) (5) and (3). (App. 72a) The Court of Ap-

peals judgment enforcing the Board’s order was likewise

premised on the fact that U. S. Marine had violated

$ 8(a) (5) and (3). [“The remedy ordered in this case

is based on the established principles applicable to suc-

cessors who discriminate in order to avoid a bargaining

obligation ...”] (App. 40a)

I. AN EMPLOYER’S REFUSAL TO HIRE THE EM-

PLOYEES EMPLOYED BY THE PREDECESSOR

AS PART OF A SCHEME TO EVADE ACQUIRING

A BARGAINING OBLIGATION UNDER BURNS IS

UNLAWFUL UNDER § 8(a)(3) OF THE ACT AND

THE COURT OF APPEALS DECISION HOLDING

THAT THERE WAS SUBSTANTIAL EVIDENCE

ON THE RECORD TO SUPPORT THE BOARD'S

CONCLUSION WAS PROPER.

In Howard Johnson Co. v. Hotel Employees, 417 U.S.

249, 262 n.8 (1974) this Court made clear that “... [A]

new owner could not refuse to hire the employees of his

predecessor solely because they were union members or

to avoid having to recognize the union .... ” (emphasis

added) and citing NLRB v. Burns Int'l Security Services,

406 U.S. 272, 280-81, n.6.""

All eleven judges of the Seventh Circuit have agreed

that both the Board’s findings and conclusion relative to

U.S. Marine’s failure to hire the 34 former Chrysler em-

12 Howard Johnson involved a case arising under 301 LMRA

where the union representing the emplovees of the predecessor em-

ployer had sought to require the new owner to arbitrate the issue

of the new owner’s failure to have hired the predecessor's emplovees.

This Court noted “. . . There is no suggestion in this case that

Howard Johnson in any way discriminated in its hiring against the

former Grissom employees...” 417 U.S. at 262 n.8.

The question of whether a new owner has a legal duty to recog-

nize the union that represented the predecessor employees as the

successor to the predecessor employer appears to be one that should

be resolved, in the event there is a dispute, under the NILRA and

not under §301 LMRA. Cf. Laborers Trust Fund v. Advanced

Concrete, 484 U.S. 539, 544 n. 6 (1988).

ployees violated § 8(a) (3) and (1) was supported by sub-

stantial evidence on the record as a whole. (App. 19a-

29a).

This Court has long recognized that “Whether on the

record as a whole there is substantial evidence to support

agency findings is a question which Congress has placed

in the keeping of the Courts of Appeals. This Court will

intervene only in what ought to be the rare instance when

the standard appears to have been misapprehended or

grossly misapplied.” Universal Camera Corp. v. NLRB,

340 U.S. 474, 491 (1951). Also see Golden State Bottling

Co. v. NLRB, 414 U.S. 168, 172-173 (1973).

~. S. Marine doesn’t argue that the court of appeals

decision does not comport with the Universal Camera

standard, but instead argues that this Court’s decision in

NLRB v. Transportation Management Corp., 462 U.S.

393 (1983) has made Universal Camera irrelevant.

This Court in Transportation Management upheld the

Board’s position regarding a dual motive type case where

the Board had found that the employer had violated

§ 8(a) (8) and (1) by having discharged an individual

employee because he had engaged in protected union ac-

tivities. As the Court held, “... It is thus clear that the

Board’s finding that Santillo would not have been fired

if the employer had not had an anti-union animus was

‘supported by substantial evidence on the record consid-

ered as a whole’ .. .” 462 U.S. at 405."

Transportation Management did not involve the refusal

to hire a number of the predecessor’s employees by a new

13 UJ, S. Marine’s reliance on Halo-Krome Co. v. NLRB, —— F.2d

——, 188 LRRM 2661 (1991) (Emp. Pet. 28-29) is wholly mis-

placed. In Halo-Krome Co. the Second Circuit did apply the same

Universal Camera standard as did the Seventh Circuit. The Seventh

Circuit after review of all the evidence concluded that the Board’s

inference that the 34 former Chrysler employees were not hired in

ordr to evade a hargaining obligation was reasonable and supported

by the substantial evidence (App. 28a).

owner not because of any of their own individual union

activities but in order to ‘simply permit the new owner

to evade becoming a successor employer under the Act.

It was not necessary in the circumstances presented

here for the General Counsel to show that it was the par-

ticular union activities of each of the 34 that caused Hoag

to not hire each of them because it was U. S. Marine’s

seeking to evade a bargaining obligation as the successor

to Chrysler that caused it to not hire the 34, see Ballou

Birch Co. v. NLRB, 798 F.2d 339, 342 (8th Cir. 1986).

Also see Birch Run Welding and Fabricating Inc. v.

NLRB, 761 F.2d 1175, 1179-80 (8th Cir. 1985); M.S.F.

Industries Inc. v. NLRB, 568 F.2d 166, 176 (10th Cir.

1977) ; Majestic Molded Products Inc. v. NLRB, 330 F.2d

608, 606 (2nd Cir. 1964).

U. S. Marine has failed to demonstrate any legitimate

reason as to why this Court should grant its petition for

certiorari on the issue of whether there was substantial

evidence to support the Board’s conclusion that U. S.

Marine’s failure to hiré the 34 former Chrysler employ-

ees was to evade becoming a successor and the Union

would respectfully request that this Court deny any re-

view of that issue.

II. THE BOARD’S RESTORATION OF THE STATUS

QUO ANTE REMEDY WAS NOT INCONSISTENT

WITH “BURNS”; WAS NOT PUNITIVE; AND THE

COURT OF APPEALS’ DECISION ENFORCING

THE BOARD’S REMEDIAL ORDER APPLIED THE

PROPER STANDARD FOR REVIEW AND WAS

NOT IN CONFLICT WITH DECISIONS OF OTHER

CIRCUITS.

It has to be borne in mind that conduct of the kind

engaged in by Hoag on behalf of U. S. Marine doesn’t

simply exist in a vacuum or that U. S. Marine doesn’t

really intend to accrue benefits to itself by engaging in

such conduct. U. S. Marine knew when it had Hoag

embark on the scheme it did that “{I]n the labor field,

as in few others, time is crucially important in obtaining

relief...” NLRB v. C & C Plywood, 385 U.S. 421, 430

(1967). U.S. Marine was also aware that by unlawfully

withholding recognition this “disrupts the employees’

morale, deters their organization activities, and discour-

ages their membership in unions. . .” Franks Bros. Co.

v. NLRB, 482 U.S. 27, 49-50 (1987), cited approvingly

in Fall River Dying & Finishing Corp. v. NLRB, 482

U.S. 27, 49-50 (1987).

Fall River Dying is important in that it is a “succes-

sorship” case and therein this Court fleshed out what it

had earlier held in NLRB v. Burns Int’l Security Serv-

ices Inc., 406 U.S. 272 (1972).

The Board here has grounded its authority to provide

for a status quo ante remedy in a successorship situation

from this Court’s recognition in Burns that there may be

exceptional situations where a new owner could be obli-

gated to consult with the union over the initial terms and

conditions of employment. Burns, 406 U.S. at 294-295

(also see App. 70a-71la).

Fall River Dying adhered to the view, earlier expressed

in Burns, that there could exist “the exceptional situa-

tion . . . in which a successor should consult with the

union before setting these [initial] terms and conditions,

from the standard situation in which a successor could

set its own terms free of the union’s involvement .. .”

482 U.S. at 47 n.14."

Judge Easterbrook’s dissent, however, recognizes no

such “exceptional situation” that would ever justify the

Board’s status quo ante remedy. According to Judge

144In both Burns and Fall River Dying, the employer’s in those

cases did not unlawfully fail to hire the predecessor’s employees in

order to evade having to bargain with the union that had repre-

sented the predecessor’s work force. Indeed, in Fall River Dying

the employer there had continued to hire the predecessor’semployees

even after the union’s premature recognition demand and it thereby

acquired a bargaining obligation 482 U.S. at 52-54.

Easterbrook, the status quo ante remedy in a successor

case would always constitute a penalty and a new owner

must always have the absolute right to establish the

initial terms and conditions."

This Court has rejected arguments similar to those

raised by U. S. Marine and as advanced in the dissenting

opinion. No one doubts that employers have the right to

subcontract work. However, where the employees are

represented by a union if the employer unilaterally exer-

cises that right to subcontract without first having af-

forded the union an opportunity to discuss such a deci-

sion, the employer will be deemed in substance for purposes

of a remedy to have forfeited such right, Fibreboard

Corp. v. NLRB, 379 U.S. 203, 214-217 (1964).

This Court in Fibreboard rejected the argument that

because the employer could “effect cost savings ... by

contracting the work out ... [that] there is no need to

attempt to achieve similar economies through negotia-

tions ... or to provide them [employees] with an oppor-

tunity to negotiate a mutually acceptable alternative.”

Fibreboard Corp., 379 U.S. at 214. In rejecting such

argument this Court’s decision acknowledged, “. . . [A]]-

though it is not possible to say whether a satisfactory

solution could be reached, national labor policy is founded

upon the congressional determination that the chances are

good enough to warrant subjecting such issues to the

process of collective negotiations.” bid.

Because a new owner has the power in substance to

determine by its hiring policies whether or not it will

become a “successor” under the Burns/Howard Johnson/

Tf the new owner retains the predecessor work force and ini-

tially retains the predecessor's terms and conditions but subsequently

unilaterally changes those terms and conditions without having con-

sulted with the union, such conduct would violate § 8(a)(5) and the

Board’s remedy would require the restoration of the status quo ante,

see Advanced Concrete supra, 484 U.S. at 544 n.6. Therefore an

“exceptional situation” under Burns must include a situation other

than one that would already be covered by the Act.

Fall River Dying holdings, such a new owner when act-

ing lawfully in regards to the hiring of employees retains

the right to unilaterally establish the initial terms and

conditions of employment; see Spruce Up Corp., 209

NLRB 194 (1974), enfe’d, 529 F.2d 516 (4th Cir. 1975) .'®

Where the new owner is found to have implemented an

unlawful hiring policy in order to evade fulfilling the

legal duties of a successor then, according to the Board,

that in essence presents an “exceptional situation, not a

standard situation, where the new owner should consult

with the union before setting the initial terms and condi-

tions...” Fall River Dying, 482 U.S. at 47 n.14.

If a new owner is found to have brought itself by its

conduct into “the exceptional situation” but hadn’t con-

sulted with the union before setting the initial terms and

conditions then it is only through § 10(c) of the Act that

the Board can restore that “exceptional situation” to what

it should’ve been. Therefore an order such as provided by

the Board in this case is one, “. . . which deprives an em-

ployer of advantages accruing from a particular method

of subverting the Act, [and] is a permissible method of

effectuating the statutory policy...” Virginia Electric

& P. Co. v. NLRB, 319 U.S. 533, 540-541.

In H. K. Porter Co. v. NLRB, 397 U.S. 99 (1970) this

Court held that a particular remedy that had been pro-

vided by the Board, i.e., requiring the employer there to

agree to grant a check-off authorization, was not enforce-

able. However, that portion of the Board’s order was

deemed not enforceable, not because it was deemed to be

16This Court took note of the Board’s Spruce Up decision in

Fall River Dying, 482 U.S. at 46 n.12 but only in regards to the

fact that the Board had adopted the position that work force con-

tinuity for successorship cases was determined by whether a ma-

jority of the new owner’s employees were those of the predecessor.

Where a majority of the new owner’s employees had been employed

by the predecessor then the new owner according to the Board, is

the successor and obligated to recognize the union.

a “penalty”, but because this Court held that the Board’s

remedial authority under § 10(c) of the Act was limited

by the same considerations that led Congress to enact

§ 8(d). 397 U.S. at 107.

U. S. Marine does not contend nor does the dissenting

opinion argue that the considerations that led Congress

to enact § 8(d) deprive the Board of the remedial author-

ity in an “exceptional situation” arising in what might

be described as a quintessential successor case’ from

ordering a new owner/successor to restore the terms and

conditions of the predecessor where the new owner could

be deemed to have had the obligation to discuss with the

union the initial terms and conditions.

Judge Easterbrook asserted that “an obligation to ‘con-

sult’ does not imply an obligation to use the old terms un-

less the union agrees to different ones...” (App. 54a).

This court in NLRB v. Katz, 36 U.S. 736, 745 n.12

(1962), however, held that there is a substantial differ-

ence between the employer who engages in “consultation”

first with the union and then acts, and the employer who

unilaterally acts without consultation with the union. In

the case of the former, the employer is free to act after

consultation, but in the case of the latter, the employer

commits an unfair labor practice and will be required as

part of the remedy to restore the status quo ante, see

Fibreboard, supra. In other words, a new owner’s obliga-

17Tt is interesting to compare what occurred when the owners of

U. S. Marine acquired the ‘assets’ from Chrysler and how that

impacted on the employees working at the Hartford plant with what

occurred when the four owners of U. S. Marine’s shares sold all the

shares to Brunswick and how that impacted on the employees then

working at the Hartford plant. In the latter case work went on

just as before but in the former there was a one week shutdown and

then work proceeded just as before except the employees were not

permitted to be represented by the Union; 34 former Chrysler em-

ployees no longer were working and didn’t know why the new

owners had unilaterally established certain new terms and condi-

tions for the employees working at the Hartford plant.

tion to discuss the initial terms before unilaterally estab-

lishing new terms and conditions does not mean that after

having had discussed same with the union that it isn’t

thereafter free to unilaterally put into effect such changes

even though the union might not agree.

The dissenting opinion also appears to reject the “‘un-

certainty” principle (App. 59a). However, in law as in

physies,'* there is an “uncertainty” principle and that is

used by courts as a matter of public policy and provides

that “|T]he most elementary conception of justice and

public policy requires that the wrongdoer shall bear the

risk of uncertainty which his own wrongdoing has

created...” Bigelow v. RKO Radio Pictures, 327 U.S. 251,

264-265 (1946). Also see Story Parchment Co. v. Patter-

son Parchment Paper Co., 282 U.S. 555, 563 (1931) ;

Thorp Sales Corp. v. Gyuro Grading Co., 111 Wis.2d 432,

441 (1983).

To permit U. S. Marine to retain such advantages ac-

cruing to it from the particular methods it used to sub-

vert the Act would be to in essence permit the wrongdoer

to profit by its own fraud and wrongdoing and to encour-

age that which the Act forbids. It had been recognized

that “|N]o one shall be permitted to profit by his own

fraud, or to take advantage of his own wrongdoing, or to

found any claim upon his own inequity, .. .” Riggs v.

Palmer, 115 N.Y. 506, 511-512, 22 N.E. 188, 190 (1889)

cited approvingly in Simon & Schuster, Inc. v. Members

of New York State Crime Victims Board, US.

60 U.S.L.W. 4029, 4033 (1991).

When wrongdoer employers are permitted to retain the

profits from their own unlawful conduct to evade com-

pliance with the NLRA, the ones then who are “penalized”

are not only the employees of the employer, but also the

employers who chose to observe the rule of law even

though they may incur costs for them to do so.

18 See Paradigms Lost, John L. Casti pp. 459-453 for discussion

of Werner Heisenberg’s uncertainty principle as used in physics.

In Food Handlers v. Valmac, 528 F.2d 217-218 (8th

Cir. 1975), the Eighth Circuit observed how the employer

there “. . . fashioned this unbelievably strange situation

out of what Shakespeare would call ‘a quick sand of

deceit’. . .”’ and that, “... Any reduction [in the remedy

provided to the union by the arbitrator] would be in-

consistent with the policy of the National Labor Rela-

tions Act because it would encourage the very conduct

the Act sought to discourage—‘bad faith’ bargaining...”

It also observed “Oh, what a tangled web we weave

when first we practice to deceive [citing Scott, Marmion,

Conto VI, st. 17] .. .”

The Union submits, and with all due respect to Judge

Easterbrook, that if American industry and their rep-

resentatives in order to survive have to deliberately en-

gage in the unlawful conduct of the kind that Hoag

engaged in on behalf of U.S. Marine in order to survive

and compete against other employers that, then this

country is truly in very serious trouble.

Lastly the Union would note that this case is al-

ready eight years old and the plant will be closed as

of January 31, 1992. As far as any future bargaining

obligation that might have been required under the

Board’s order, that question is now for all practical

matters moot with the cessation of business at the Hart-

ford, Wisconsin plant effective January 31, 1992 and

with the few remaining employees all having been laid

off.

In such circumstances and because the Seventh Cir-

cuit’s decision is not at odds with the holdings of this

Court or really create a conflict with the other Circuits,

the Union believes that these practical reasons should

be weighed in the calculus of this Court as to whether

U.S. Marine’s petition should be granted.

CONCLUSION

For all the foregoing reasons, the Respondent Unions

respectfully submit that the Petition for a Writ of

Certiorari should be denied in its entirety.

Dated this — day of January, 1992.

Respectfully submitted,