Petition — Riverbend Farms, Inc. v. Agricultural Labor Relations Board

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83-1315 FILED

: FEB 8 1984

— No. 83- men a

IN THE

pen Court of the Gnited States

OCTOBER TERM, 1983

RIVERBEND Farms, INc., Petitioner,

AGRICULTURAL LABOR RELATIONS BOARD,

and

UNITED FARM WorKERS OF America, AFL-CIO,

Respondents.

PETITION FOR A WRIT OF CERTIORARI TO

THE SUPREME COURT OF

THE STATE OF CALIFORNIA

Betry SOUTHARD MURPHY

Counsel of Record

EvAN JAY CUTTING

ELIZABETH R. Moore

BAKER & HOSTETLER

818 Connecticut Avenue, N.W.

Washington, D.C. 20036

(202) 861-1500

THOMAS M. GIOVACCHINI

CAMPAGNE AND GIOVACCHINI

Airport Office Center

5110 E. Clinton Way

Suite 117

Fresno, California 93727

(209) 255-1637

Counsel for Petitioner,

RIVERBEND FARMS, INC.

PRESS OF BYRON S. ADAMS PRINTING, INC., WASHINGTON, D.C. (202) 347-8203

QUESTIONS PRESENTED FOR REVIEW

Does a state administrative agency violate a person’s

constitutionally protected due process rights when—

after the close of the evidentiary record and without

giving notice or providing an opportunity to be heard—

the agency:

(a) adds the person as a defendant;

(b) simultaneously inserts into the complaint allega-

tions against the person;

(d) imposes on that person liability for damages

amounting to hundreds of thousands of dollars.

TABLE OF CONTENTS

Page

QUESTIONS PRESENTED FOR REVIEW ................. i

EE ccc cliccecbcbecccecoerccecse iii

EEE AE ee 1

cite wcandutbebsssobeccewes ce ena 2

CONSTITUTIONAL PROVISIONS INVOLVED ..............- 2

ee a ee peseenwoseess 2

REASONS FOR GRANTING THE WRIT .................--- 10

ed. cee btvovenseee 19

APPENDIX

California Supreme Court Opinion, October 17, 1983 la

California Fifth Appellate District Court of Appeal

Opinion, October 25, 1982 ..................005, 38a

California Agricultural Labor Relations Board Deci-

sion and Order, August 17, 1979 ................ 99a

California Agricultural Labor Relations Board, Deci-

sion of Administrative Law Officer, June 13, 1979 125a

Ventura County Municipal Court, Findings of Fact and

in Areneg 4 Law, yee Mt. 5s ce Niivwabesd 18la

Ventura County Municipal Court, Judgment, April 25,

ee ee hc wes waccéusenees 201la

California Supreme Court Order Denying Rehearing,

November 16, 1983 .............. Wied je eonwaaes 208a

California Supreme Court Decree Enforcing The

ALRB Order, November 17, 1983 .............. 209a

Labor Relations Act, California Labor

Sin civubigimictdbcdebabus wd eod 210a

TABLE OF AUTHORITIES

CASES: Page

Federal:

Anderson Nat. Bank v. Luckett, 321 U.S. 233 (1944) . 11

Armstrong v. Manzo, 380 U.S. 545 (1965) ........... 11

Baldwin v. Hale, 68 U.S. (1 Wall.) 223 (1864) ........ 11

Best v. Humboldt Placer Mining Co., 371 U.S. 334(1963) 11

Boddie v. Connecticut, 401 U.S. 371 (1971) ......... 11, 18

Bogart v. Southern Pacific Co., 228 U.S. 137 (1913) .. 18

eee eee eee eee eee eee eee eee ee ee eee ee

Coe v. Armour Fertilizer, 237 U.S. 413 (1915) .. 11, 14, 15

Dews Construction Corp., 246 N.L.R.B. 945 (1979)... 14

FCC v. Pottsville Broadcasting Co., 309 U.S. 134(1940) 12

Fuentes v. Shevin, 407 U.S. 67 (1972) ............. 11, 12

Comms C. Shearer Exhibitors Delivery Serv., 246

-L.R.B. 416 (1979), enforced 636 F.2d 1210 (3rd

ey EE. nc canbah apdaen Daweh ekees pte ekesdoe 14

Grannis v. Ordean, 234 U.S. 385 (1914) ............. 10

Goldberg v. Kelly, 397 U.S. 254 (1970) ............. 11, 12

Greene v. Lindsey, 456 U.S. 444 (1982) .............. 10

Hillside Manor Health Related Facility v. NLRB, 697 ©

F.2d 294 (lst Cir. 1982), enfg 257 N.L.R.B. 981

CEA. 6 Pin otinus dda as dere e chine eee s taean sats 17

Hovey v. Elliot, 167 U.S. 409 (1897) ............655. 11

In re Ruffalo, 390 U.S. 544 (1968) ............ 12, 15, 16

Joint Anti-Fascist Refugee Committee v. McGrath, 341

Se ED anda db cima dene edinvsteeeeas 12, 16

Kwock Jan Fat v. White, 253 U.S. 454 (1920) ........ 12

Londoner v. Denver, 210 U.S. 373 (1908) ............ ll

Louisville & Nashville R. Co. v. Schmidt, 177 U.S. 230

SR ac okt cuba vctcMa nhi inten veiineteas ds 11

Marine Machine Works, Inc. , 248 N.L.R.B. 1081 (1979),

enforced 635 F.2d 522 (5th Cir. 1981) ............

Mathews v. Eldridge, 424 U.S. 319 (1976) .......... 11, 16

Table of Authorities Continued

Page

Morgun v. U.S., 304 U.S. 1 (1988) ................ 11, 12

Mullane v. Central Hanover Bank & Trust Co., 339 U.S.

SUED his pucbueeiawss i codeaie cudeneime concn 11

N.L.R.B. v. Complas Industries, Inc., 714 F.2d 729 (7th

PME os btthnds 0 405.ce banneeeukbe vacdnieeds 16, 17

Whe v. Jordan Bus Co., 380 F.2d 219 (10th Cir.

pieces v. Taylor, 451 U.S. 527 (1981) ............. 11, 13

Opp Cotton Mills v. Administrator of Wage and Hour

Division, 312 U.S. 126 (1941) ................05. 11

Rowen Ee) ih me beimpriet sd sales = 17

Schroeder v. New York, 371 U.S. 208 (1962) ......... 11

Sniadach v. Family Finance Corp, 395 U.S. 337 (1969) 11

Sosna v. Iowa, 419 U.S. 893 (1975) ......... 2. eee eee 13

U.S. v. Illinois Central R. Co., 291 U.S. 457 (1934) 11, 13

Windsor v. McVeigh, 93 U.S. 274 (1976) ........... 11, 13

Wolff v. McDonnell, 418 U.S. 589 (1974) ........... 12, 17

’ Zenith Radio Corp. v. Hazeltine Research, Inc., 395 U.S.

100 (1969) ...... Rape PRA Me PERS PR Ee 14

State:

Highland Ranch v. ral Labor Relations Board,

29 Cal. 3d 848, 6 Cal Rptr. 758 (1981) val ehiae 5

San Clemente Ranch, Ltd. v. ral Labor Rela-

tions Board, 29 Cal. 3d 874, 176 Cal. Rptr. 768(1981) 5

STATUTES:

Federal:

a REED s <a ave aduvddte dn vot¥ah cain 18

Fair Labor Standards Act, 27 U.S.C. § 203(f) (1976) . 3

ay. ARE Tae S.C. § 152(e) (1976 &

National Labor Relations Board iations Act, 60

Table of Authorities Continued

Page

State:

Calif. Health and Saf. Code, § 17980(b) .............. ~

Agricultural Labor Relations Act of 1975, Calif. Labor

RA ROU OO EI on ccc sv cccesuccescess 3, passim

Calif. Lab. Code § 1140.4(c) .............. cece eeeee 7

Se SD IE Baron cucdnseeacedeuned ous 3

Calif. Lab. Code § LISB(D) ... 2... cc ccc cece ccccccecs 5

SE, Ss I TED nintedc sewcccccccdcctccoucess 3

Calif. Lab. Code § 1160 et seg. .............. cece eeee 3

Se CP MEE, coSiccnccccccnccethassucele 12

Calif. Lab. Code § 1160.3 .........ccccccccccees 7, 12, 18

Gee Sy CD UD oon cer acvccdscacccecceceue 7

Miscellaneous:

Uniform Housing code, § 1104(b) ................08. 8

IN THE

Supreme Court of the Gnited States

OCTOBER TERM, 1983

No. 83-

RIVERBEND FarMs, INC., Petitioner,

Vv.

AGRICULTURAL LABOR RELATIONS BOARD,

and

UNITED FARM WoRKERS OF AmERiIcA, AFL-CIO,

Respondents.

PETITION FOR A WRIT OF CERTIORARI TO

THE SUPREME COURT OF

THE STATE OF CALIFORNIA

Petitioner, Riverbend Farms, Inc. (“Riverbend”),

respectfully prays that a writ of certiorari issue for re-

view of the judgment of the Supreme Court of the State of

California, entered in this proceeding October 17, 1983

and the order denying of Riverbend’s timely petition for

rehearing entered November 16, 1983.

OPINIONS BELOW

The opinion of the California Supreme Court (App.,

infra, at 1a) is officially reported at 34 Cal. 3d 743, and

unofficially reported at 195 Cal. Rptr. 651, 670 P.2d 305

(1983). The opinion of the Fifth District Court of Appeal

(App., infra, at 38a) is unpublished. The decision and

order of the California Agricultural Labor Relations

Board (App., infra, at 99a) is unpublished. The Adminis-

‘trative Law Officer’s decision (App., infra, at 125a) is

unpublished.

JURISDICTION

The opinion of the Supreme Court of the State of Cali-

fornia was filed on October 17, 1983. (App., infra, at 1a)

Riverbend’s timely petition for rehearing was denied on

November 16, 1983 (App., infra, at 208a), and judgment

was entered on November 17, 1983 (App., infra, at 209a).

This petition if filed within ninety days of the order deny-

ing the petition for rehearing. This Court’s jurisdiction is

invoked under 28 U.S.C. § 1257(3).

CONSTITUTIONAL PROVISION INVOLVED

Section 1 of the Fourteenth Amendment to the Con-

stitution of the United States provides in part:

No State shall make or enforce any law which shall

abridge the privileges or immunities of citizens of the

United States; nor shall any State deprive any per-

— of life, liberty, or property, without due process

of law....

STATEMENT OF THE CASE

Riverbend Farms, Inc. (“Riverbend”) is a California

corporation engaged in the packing and canning of farm

produce. Rivcom Corporation (“Rivcom”), a wholly-

owned subsidiary of Riverbend,' leases from an uncon-

nected third party and operates Rancho Sespe, a 4300-

acre farm in Ventura County, California. Citrus fruits,

avocados and other agricultural commodities are pro-

duced on the ranch. For many years prior to the events

involved in the present suit, Riverbend had packed and

marketed citrus grown by farmers throughout California,

many in Ventura County. Riverbend obtained

the citrus by providing, at no cost to farmers in Ventura

County and elsewhere in California, the pruning,

' Riverbend has a number of other wholly-owned subsidiaries, and

also owns fifty-one (51) percent of Riverbend Products, Inc., an

orange juice producing and packaging company.

harvesting, and hauling services of Triple M Farms, Inc.

(“Triple M”).

The owner and lessor of Rancho Sespe, Newport Prop-

erties, Inc. (“Newport”), acquired title to the land on

January 16, 1979. Prior to the purchase by Newport and

its lease of the property to Rivcom, National Property

Management System (“NPMS”) operated the ranch. In

May, 1978, while the land was under NPMS’s manage-

ment, the United Farm Workers (“UF W”) won a repre-

sentation election conducted under the auspices of Cali-

fornia’s Agricultural Labor Relations Board (“ALRB”)

and obtained certification as the agricultural employees’

bargaining representative.* From May 1978 through Jan-

? The definition of “employee” for purposes of the National Labor

Relations Act excludes “any individual employed as an agricultural

laborer.” See 29 U.S.C. § 152(e) (1976 & Supp. V). National

Calif. Lab. Code § 1160 et seg. The ALRB, like the NLRB, also

regulates labor representation elections and determination of

priate bargaining units. See Calif. Lab. Code § 1156. The 1B

bound to apply applicable federal precedents under the National

Labor Relations Act. See Calif. Lab. Code § 1148. All California

Labor Code provisions to which this petition makes reference

in the Agpondin attached to tele patition. thup., tafe. at-Stee at

seq.)

“~~

uary 6, 1979, NPMS and UF'W negotiated in good faith

but did not reach a collective bargaining agreement.

Among the provisions in NPMS’s preexisting individ-

ual license agreements with its agricultural workers was

a provision that all resident workers would vacate the

NPMS provided housing within 24 hours after their em-

ployment terminated. On the day of the sale to Newport,

NPMS informed its workers that their employment was

terminated, activating the requirement that the workers

vacate the premises within 24 hours. Rivcom, despite

having no obligation to do so, permitted NPMS’s workers

to remain 30 additional days.’

Upon taking possession of the premises, it was Riv-

com’s intent to use less labor-intensive agricultural tech-

niques than had its predecessor, and to employ Triple M’s

labor services for the remaining tasks. Since Triple M’s

workers did not require the labor housing at Rivcom

Ranch, Rivcom planned to convert the space occupied by

the housing to more productive agricultural uses.

’ Rivcom later commenced unlawful detainer proceedings against

the tenants in Ventura County Municipal Court. Rivcom, Inc. v.

Catarino G. Rangel, et al., Consolidated Case No. MC 1913. The

court found that the laborers’ housing was in substandard condition

before the eviction notice was given, and that the decision to raze the

housing was based not on retaliatory motives, but the prohibitive

cost of rehabilitating the housing. (App., infra, at 188a). The court

entered judgment in Rivcom’s favor, awarding possession of the

premises and unpaid rent (App., infra, at 201a). However, on July 3,

1980, the California Supreme Court issued a stay of all further

Os oes shee exetnanmgany thy maga: Lender ager

(which were at that time on petition for a writ of

seeumetiin tiattes Onsreflaeamy On September 9, 1982,

the California Supreme Court issued another order, indicating that

.its prior stay remained in effect.

—_—

In the days following Rivcom’s taking possession of the

Ranch under the lease, UF'W officials contacted Rivcom’s

president and its attorneys demanding their union’s

recognition, reinstatement of NPMS’s displaced employ-

ees, and immediate bargaining about Rivcom’s operation-

al changes. Rivcom, believing that it was not NPMS’s

successor under the law and that it would be commiting

an unfair labor practice if it recognized the union, declined

to bargain.‘ On January 18, 1979, the UF'W filed unfair

labor practice charges against Rivcom and Riverbend

with the ALRB, under Section 1153 of the California

Labor Code. On February 15, 1979, the ALRB’s General

Counsel (“General Counsel”) issued an unfair labor prac-

tice complaint against both Riverbend and Rivcom, alleg-

ing that Riveom had acted discriminatorily in refusing to

hire, cr bargain with the representative of, NPMS’s em-

ployees. The only allegation against Riverbend was that

it was liable for Rivcom’s actions because it was Rivcom’s

parent corporation.

An Administrative Law Officer (“ALO”) conducted a

pretrial hearing on the unfair labor practices complaint on

March 1, 1979, and held an evidentiary hearing from

March 9, 1979 through April 13, 1979. Riverbend moved

to be dismissed from the complaint at the pretrial hear-

‘The Calif. Lab. Code § 1153(f), unlike the National Labor Rela-

tions Act, makes it an unfair labor practice for an employer “(tjo

recognize, bargain with, or sign a collective bargaining agreement

with any labor organization not certified pursuant to the provisions of

this part.” At the time the bargaining demand was made, the Califor-

nia Supreme Court had not yet decided that this unfair labor practice

has no application in the alleged successorship settings. See San

‘Clemente Ranch, Ltd. v. Agricultural Labor Relations Board, 29

Cal. 3d 874, 176 Cal. Rptr. 768 (1981); Highland Ranch v. Agricul-

tural Labor Relations Board, 29 Cal. 3d 848, 176 Cal. Rptr. 753

(1981).

ing, and on March 9, 1979, before the taking of any evi-

dence, the ALO granted Riverbend’s motion. The ALO

also changed the caption of the case to read “Rivcom

Corporation, a wholly owned subsidiary of Riverbend

Farms, Inc.” (Tr., March 9, 1979, at 5) and the complaint

was further amended so that Rivcom’s name was sub-

stituted for each reference to Riverbend. During the

proceedings that followed, Riverbend, since it was no

longer a party, had no counsel present acting on its

behalf. Nor did Riverbend, since it was no longer a party,

have an opportunity to present any evidence or cross-

examine any witnesses.

On April 13, 1979, the final day of the hearing, after the

close of the evidence, the ALO granted the General Coun-

sel’s motion to amend the complaint so as to add allega-

tions that Riverbend and Rivcom were “joint employers”

for purposes of the unfair labor practice allegations. (Tr.,

April 13, 1979, at 19). Even the original complaint, which

had been dismissed as against Riverbend, had not made

such allegations. The General Counsel’s motion was

granted over the objection of Rivcom’s counsel and with-

out notice to Riverbend. Riverbend was not allowed an

opportunity to oppose the motion or to defend against the

allegation. (Jd.) Rivcom’s counsel specifically stated the

need for additional evidence on the very allegation added

to the complaint (Jd. at 15, lines 4-11).' Yet the ALO

5On April 13, 1979, in response to the ALO’s question whether the

record supported the proposed amendment, Rivcom’s counsel stated:

Transcript of April 13, 1979 Hearing, at 15, lines 4-11.

neither permitted Riverbend an opportunity to object,

nor allowed the record to be reopened for purposes of

- admitting the missing evidence. (Jd.).

On June 13, 1979, the ALO issued a decision holding

that Rivcom committed unfair labor practices, and that

Riverbend, as a “joint employer” with Rivcom, was also

liable. (App., infra, at 125a). The ALO’s decision imposed

upon Riverbend, as a “joint employer,” substantial penal-

ties, including reinstatement, back pay and the California

Labor Code’s “make whole remedy.” Unlike the National

Labor Relations Board, the ALRB has the statutory

authority in refusal to bargain cases to impose contract

terms of its own devising on the parties. This administra-

tively imposed “contract” takes effect as of the date of the

refusal to bargain and lasts through the time that the

parties bargain to a contract or reach a good faith impas-

se. See Calif. Lab. Code § 1160.3 (West 1975 & Supp.

1983). On August 17, 1979, the ALRB, acting through a

four-member panel, affirmed the ALO’s decision.

Riverbend, Rivcom and Triple M‘ separately appealed

the ALRB’s decision to the Fifth District Court of

Appeals.’ On October 25, 1982, the Fifth District Court of

* Triple M appealed as an aggrieved non-party, since the ALRB’s

decision, among other things, found Triple M, even though it was not

a party, to be a labor contractor under Calif. Lab. Code § 1140.4(c),

and ordered Rivcom and Riverbend to terminate their employment

contract with Triple M. Calif. Lab. Code § 1160.8 permits “any

person aggrieved by a final order” to obtain review in a court of

appeal. Triple M sought to have the ALRB’s decision vacated, and to

have a rehearing which would permit Triple M notice and an oppor-

tunity to be heard on the unfair labor practice complaint.

7On February 13, 1980 the Ventura County, California, Division of

Building and Safety and the Environmental Health Department

notified Rivcom that the dwellings in which its predecessors’ employ-

Appeals set the decision aside and remanded the matter

for further proceedings (App., infra, at 86a-92a), includ-

ing determination of “the extent and prejudicial effect of

the infringement upon petitioners’ ability to litigate.”

(Id., at 87a).

The ALRB appealed the Fifth District Court of

Appeals’ decision to the California Supreme Court. On

October 17, 1983, the California Supreme Court reversed

the lower court and upheld the Board’s decision. (App.,

infra, at la).

The California Supreme Court took note of Riverbend’s

argument that it had been denied due process of law:

Riverbend argues that it was unfairly surprised and

denied due process when, without notice on the last

day of the hearing, the [ALRB] general counsel was

allowed to amend the complaint to reinclude River-

bend as a joint employer subject to any remedial

ees were housed (and from which Rivcom sought to have its prede-

cessors employees’ evicted) were dangerous to life, limb and the

property of the occupants.

Riveom and Newport advised the County that they elected to ex-

ercise their option to comply with the County’s notices and orders by

demolishing the structures. Uniform Housing Code, § 1103; Calif.

Health and Saf. Code, § 17980(b). On July 29, 1983, the Second

District Court of Appeals affirmed Rivcom’s and Newport’s right

under the Uniform Housing Code to elect to abandon and destroy the

dangerous structure rather than incur the costs of repair. The

tenants petition for hearing on the Court of Appeal’s decision, filed

with the California Supreme Court on August 31, 1983, is still pend-

ing. Despite Rivcom’s efforts to evict its predecessor's employees

from the condemned and unsafe housing, and despite its efforts to

remove a health and safety hazard on its own property, the housing

order. Riverbend urges the case should be remanded

for a full hearing on its joint-employer status.

(App., infra, at 19a). The court recognized that the ori-

ginal and first amended complaints had named Riverbend

as a respondent and had only asserted that Rivcom was

its wholly owned subsidiary and agent. It further noted

that at no time had there been an allegation that River-

bend and Rivcom were together joint employers. The

California Supreme Court observed:

When the ALO ted Riverbend’s motion to dis-

miss, he ordered Riverbend’s name removed from

the ed ms sg and from its prayer for relief

the clear alone of the ALO’s prehearing order

was to drop Riverbend from the complaint on the

ground that the gga against it were not suffi-

cient to state a claim. . . On the basis of the

ings alone, Riverbend was entitled to believe it had

been dismissed from the proceeding.

(App., infra, at 20a) (emphasis added, citations omitted).

The California Supreme Court went on to observe that it

was “concerned about the timing of the later amend-

ment.” (Id.) (emphasis added).

However, despite its conclusion that Riverbend was

entitled to believe it was dismissed from the proceeding,

and despite its concern about the timing of the later

amendments, the Court concluded that Riverbend was

not denied due process of law.

The court’s holding did not rest on an analysis of pro-

cedural standards mandated by the due process clause of

the Fourteenth Amendment. Instead, the Court based its

decision on the ground that Rivcom’s president (who is

also Riverbend’s president) and Rivcom’s counsel (who

had been Riverbend’s counsel prior to its dismissal from

the action) were present throughout the action. Thus, the

California Supreme Court asswmed that Riverbend had

been represented and able to defend, even though it was

not party to the proceeding. (/d., at 20a-22a).

On November 16, 1983, the California Supreme Court

denied Riverbend’s petition for rehearing raising this

issue. (App., infra, at 208a).

REASONS FOR GRANTING THE WRIT

This case raises the constitutional question of whether

a person who receives no notice of its potential liability

and has no opportunity to present evidence or otherwise

defend itself in state administrative proceedings may

nonetheless be subjected to substantial liability.

As the California Supreme Court itself noted, once the

ALO dismissed Riverbend from the case, Riverbend was

“entitled to believe it had been dismissed from the

proceeding.” (App., infra, at 20a). Not only was it enti-

tled to “believe” it was dismissed, it in fact had been

dismissed from the case. Thus, Riverbend was not a party

to any of the proceedings subsequent to its dismissal, and

could not have known of its potential liability, presented

any evidence on its behalf, or opposed the amendments on

the final day of the ALO’s hearing which alleged for the

first time that it was a joint employer with Rivcom. Such

an outcome not only materially prejudiced Riverbend’s

interests, but also violated the most basic notions of due

process of law—adequate notice and a meaningful oppor-

tunity to be heard.

1. The Fourteenth Amendment to the United States

Constitution provides that a State may not “deprive any

person of life, liberty or property, without due process of

law.” This Court has long held that a “fundamental re-

quisite of due process of law is the opportunity to be

heard.” See, e.g., Greene v. Lindsey, 456 U.S. 444, 449

(1982); Grannis v. Ordean, 234 U.S. 385, 394 (1914). This

fundamental requisite has been the “central meaning of

procedural due process” for “more than a century.”

Fuentes v. Shevin, 407 U.S. 67, 80 (1972). See, .e.g.,

Baldwin v. Hale, 68 U.S. (1 Wall.) 223, 233 (1864) (“[pJar-

ties whose rights are affected are entitled to be heard”);

Windsor v. McVeigh, 93 U.S 274, 277 (1876) (“[w]herever

one is assailed in his person or his property, there he may

defend.”); Hovey v. Elliot, 167 U.S. 409, 417 (1897) (“due

process signifies a right to be heard in one’s defense”).*

Not only must a party be given an opportunity to

defend, but the opportunity must be granted “at a

meaningful time and in a meaningful manner.” Parratt v.

Taylor, 451 U.S. 527, 540 (1981); Armstrong v. Manzo,

380 U.S. 545, 552 (1965).* And in order to assure that the

opportunity is sufficiently meaningful, the opportunity

must be upon “such notice and proceedings as are ade-

quate to safeguard the right for which the constitutional

protection is invoked.” Anderson National Bank v.

Luckett, 321 U.S. 223, 246 (1944). See also Mullane v.

8 See also Goldberg v. Kelly, 397 U.S. 254 (1970); Sniadach v.

Family Finance Corp., 395 U.S. 337 (1969); Armstrong v. Manzo,

380 U.S. 545 (1965); Best v. Humboldt Placer Mining Co., 371 U.S.

334, 338 (1963); Schroeder v. New York, 371 U.S. 208, 212 (1962);

Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306 (1950);

Anderson Nat. Bank v. Luckett, 321 U.S. (1944); Opp Cotton

Mills v. Administrator of Wage and Hour Division, 312 U.S. 126

(1941); Morgan v. U.S., 304 U.S. 1 (1988); U.S. v. [Uinois Central R.

Co., 291 U.S. 457 (1984); Brinkerhoff-Faris Trust & Savings Co. v.

Hill, 281 U.S. 673 (1980); Coe v. Armour Fertilizer, 237 U.S. 413

(1915); Londoner v. Denver, 210 U.S. 373 (1908); Lowiaville & Nash-

ville R. Co. v. Schmidt, 1T7 U.S. 230 (1900).

* See also Mathews v. Eldridge, 424 U.S. 319 (1976); Fuentes v.

Shevin, 407 U.S. 67 (1972); Boddie v. Connecticut, 401 U.S. 371

(1971); Goldberg v. Kelly, 397 U.S. 254 (1970).

Central Hanover Bank & Trust, 339 U.S. 306, 314

(1950)."°

2. Furthermore, “in administrative proceedings of a

quasijudicial character the liberty and property of the

citizen” are entitled to be “protected by the rudimentary

requirements of fair play” which preserve “public confi-

dence in the value and soundness of this important gov-

ernmental process.” Morgan v. U.S., 304 U.S. 1, 14-15

(1938). See also Kwock Jan Fat v. White, 253 U.S. 454,

457-58 (1920). Thus, the requirements of due process

apply to administrative proceedings of a quasi-judicial

character, including state administrative proceedings

such as those under the auspices of the ALRB. See, e.g.,

Goldberg v. Kelly, 397 U.S. 254 (1970)."

The ALO’s hearing in this case had many of the attri-

butes historically associated with judicial proceedings,

including presentation of live testimony, cross-

examination, and oral argument. See generally Calif.

Lab. Code, §§ 1160.2, 1160.3 (West 1975 & Supp. 1983)

The proceeding had “all the essential elements of con-

tested litigation.” Morgan v. U.S., 304 U.S. at 20. At the

close of these quasi-judicial proceedings, during the

course of which Riverbend was not present, allegations

against Riverbend were reintroduced into the Complaint.

The specific allegation at issue, that of Riverbend’s status

as a joint employer with Rivcom, had not appeared previ-

ously in the Complaint. Riverbend contends that imposi-

See Fuentes v. Shevin, 407 U.S. 67 (1972); Joint Anti-Fascist

Refugee Committee v. McGrath, 341 U.S. 123, 170-172 (1961) (Frank-

furter, J., concurring); FCC v. Pottsville Broadcasting Co., 308 U.S.

134 (1940); Morgan v. U.S., 304 U.S. 1 (1988).

"Cf. Wolff v. McDonnell, 418 U.S. 588 (1974); In re Ruffalo, 390

U.S. 544 (1968).

tion of substantial liability following such proceedings

constitutes deprivation of property without provision of

the most fundamental requisites of due process.

3. Nor does this case involve a mere delay of the right

to be heard, see, e.g., Parratt v. Taylor, 451 U.S. 527

(1981); Sosna v. Iowa, 419 U.S. 398, 410 (1975); U.S. v.

Illinois Central R. Co., 291 U.S. 457, 463 (1934), or a case

where a defendant, after timely notice, failed to make an

appearance without justifiable excuse. Windsor v.

McVeigh, 93 U.S. 274, 278 (1876). Riverbend received no

opportunity whatsoever to defend.

As this Court has long held, “no court can adjudicate

directly upon a person’s rights unless such person is

actually or constructively before the court.” Bogart v.

Southern Pacific Co., 228 U.S. 187, 141 (1913). River-

bend was not a party actually or even constructively

before the court—after its dismissal before the introduc-

tion of any evidence, it was not even a party. Yet the

ALRB, based upon a record to which Riverbend made not

contribution (other than successful argument at a pretrial

hearing of a motion to dismiss), subjected Riverbend, ona

theory totally different than that advanced previously, to

the full range of statutory remedies, including the “make

whole” remedy, which is conditioned on a finding of bad

faith. What the ALRB and the California Supreme Court

have done is, in effect, the same thing as if a trial court

adjudicated an individual guilty based on the evidence

developed at a criminal trial in which another individual

was the only defendant.

4. Due process is not satisfied through the mere pre-

sence of the president and counsel of Riverbend’s sub-

sidiary, Riveom, throughout the ALO’s hearing. It is on

this basis that the California Supre«ae Court excused the

ALO’s and the ALRB’s conduct. Kiverbend and Rivcom

are corporate entities with separate legal existence. The

mere fact that one of Rivcom’s officers and its counsel

were present during a legal proceeding is not sufficient to

hold its stockholder—Riverbend—liable. For example,

this Court in Coe v. Armour Fertilizer Works, 237 U.S.

413, 423 (1915), held that a corporation’s judgment credi-

tor could not, after finding itself unable to levy on corpo-

rate debtor’s property, levy upon the property of one of

the corporation’s stockholders for unpaid stock subscrip-

tions. This Court held that the stockholder was entitled,

“upon the most fundamental principles, to a day in court

and a hearing upon such questions as whether. . . he isa

stockbroker and indebted, and other defenses personal to

himself.” Jd. The same principle applies with equal force

here. See also Zenith Radio Corp. v. Hazeltine Research,

Inc., 395 U.S. 100, 110 (1969).*

The California Supreme Court’s affirmance of the

ALRB’s decision against Riverbend suggests that River-

bend’s right to defend against potential liability is satis-

On similar grounds, the NLRB prohibits imposition of derivative

liability, even where the unfair labor practice proceeding establishes

a foundation for findings as to the relationship between the prior and

the present employer, after the unfair labor practice hearings have

been completed; unless the new employer is named as a party and

afforded a full opportunity to litigate its status in that proceeding, it

would not have had its “day in court.” See, e.g., George C. Shearer

Exhibitors Delivery Serv., 246 NLRB 416 (1979), enforced, 636 F.2d

1210 (3d Cir. 1980); Marine Machine Works, Inc., 248 NLRB 1081

(1979), enforced, 635 F.2d 522 (5th Cir. 1981). This policy is applied

even if the principals of the two employers have remained the same

and have testified in the underlying unfair labor practice hearing—

the NLRB holds that the new employer is still entitled to a day in

court, particularly where the principals testified in their capacities as

representatives of the prior employer. Dews Construction Corp., 246

NLRB 945 (1979).

fied through the defense made by a related, but legally

separate and factually distinct party. However, after its

pretrial dismissal, Riverbend was as much a stranger to

the ALO’s proceedings as was the stockholder to the

proceedings in Coe. Riverbend is entitled to its “day in

court” to defend against the substantial liability to which

the allegation added at the close of the proceedings made

it subject.

5. The California Supreme Court, as part of its hold-

ing that Riverbend’s due process rights were not

violated, essentially held that the ALO’s cautionary re-

marks to Rivcom’s counsel of Riverbend’s potential liabil-

ity, and Rivcom’s counsel’s response to the motion to

amend the complaint so as to add allegations of liability

against Riverbend, amounted to notice of Riverbend’s

potential liability and provided Riverbend an opportunity

to defend. (App., infra, at 20a-22a). As was noted above,

such notice and opportunity, given to a separate entity’s

counsel, is irrelevant and legally ineffective; but even if it

were relevant, it could hardly satisfy the constitutional

requirements that the opportunity to defend be at a

meaningful time and in a meaningful manner.

This Court, in Jn re Ruffalo, 390 U.S. 544 (1968), held

that, where an attorney in a state disbarment proceeding

had no notice that his employment of a certain person as

an investigator would be considered a disbarment offense

until after both he and that person had testified at length,

the procedures deprived the attorney of procedural due

process. This Court went on to hold that when the nature

of potential liability changes after proceedings have com-

menced, the allegations “became a trap.” Jd. at 551. How

the attorney would have met the added charge had it been

originally included “no one knows”; but after it was add-

ed, the attorney had “no opportunity to expunge his

earlier statements.” Jd. Indeed, he had been “lulled into a

‘false sense of security’. . . assuring [his liability] under

charges not yet made.” /d. at 550, n.4 (citations omitted).

See also N.L.R.B. v. Complas Industries, Inc., 714 F.2d

729, 733-734 (7th Cir. 1983) (employer denied due process

when unfair labor practice complaint amended to add

additional allegations in the course of unfair labor practice

proceeding).

Riverbend, unlike the attorney in Ruffalo, was not

even a party to the proceeding. The ALO did not advise

Rivcom’s counsel or its president that he considered

Riverbend potentially liable until after Rivcom’s presi-

dent testified. Thus, just as with the attorney in Ruffalo

whose testimony led to additional charges, Rivcom’s

president testified, with Rivcom’s counsel present, whol-

ly unaware that they might have been assuring River-

bend’s liability on allegations not yet made. How the

hearings would have transpired had Riverbend and its

counsel, and Rivecom’s counsel and president, been on

notice of Riverbend’s potential liability, no one knows.

But, as the California Supreme Court noted, “Riverbend

was entitled to believe it had been dismissed from the

proceeding.” (App., infra, at 20a). Thus, the remaining

parties were “lulled” into believing that Riverbend was

not at risk in the proceedings, unwittingly assuring

Riverbend’s liability under charges not yet made.”

‘3 While the proceedings in Ruffalo were of a “quasi-criminal na-

ture,” the court specifically held that the procedural violations noted

in that case “would never pass muster in any normal civil or criminal

litigation.” /d. at 551 (citations omitted). As this Court has previous-

ly held, the “right to be heard before being condemned to suffer

grievous loss of any kind, even though it may not involve the stigma

and hardships of a criminal conviction, is a principle basic to our

society.” Mathews v. Eldridge, 424 U.S. 319, 333 (1976), citing Joint

Anti-Fascist Committee v. McGrath, 341 U.S. 123, 168 (1961)

(Frankfurter, J., concurring).

Thus, the imposition of liability based on prior testi-

mony made without awareness of any such potentiality is

the very antithesis of a meaningful opportunity to

defend." It is the negation of an opportunity to defend,

since the trap has already been sprung, and the imposi-

tion of liability assured through testimony given without

awareness of potential liability.

6. To permit a party the meaningful opportunity to

defend required under the due process clause, the

proceedings must be upon such notice as would alert the

party that his interests are in peril. As this Court held in

Wolff v. McDonnell, 418 U.S. 539, 564 (1974), “[plart of

the function of notice is to give the charged party a chance

to marshall the facts in his defense and to clarify what the

charges are, in fact.” See also N.L.R.B. v. Complas

Industries, Inc., 714 F.2d 729, 733 (7th Cir. 1983)

“The Court of Appeals decisions cited by the California Supreme

Court in support of its holding that Riverbend’s due pro-ess rights

were satisfied are not to the contrary—they are simply irrelevant to

the present case. In each of the cases upon which the California

Supreme Court relied, the holding was based on a finding that the

party asserting due process violations had failed to exploit an oppor-

tunity to defend. See N.L.R.B. v. Jordan Bus Company, 380 F.2d

219, 223 (10th Cir. 1967); Royal Typewriter Co. v. N.L.R.B., 533

F.2d 1030, 1043-1044 (8th Cir. 1976) (“The totality of the circum-

stances . . . demonstrates that any prejudice resulted from Litton’s

failure to avail itself of the opportunity to reopen the case, confront

the witnesses who had testified previously, und offer additional evi-

dence of its own.”); Hillside Manor Health Related Facility v.

N.L.R.B., 697 F.2d 294 (1st Cir. 1982), enf’g 257 N.L.R.B. 981

(1981). Riverbend did not fail to exploit an opportunity to defend—it

was never given an opportunity, since it was not a party to the

. Compare N.L.R.B. v. Complas Industries, Inc., 714

F.2d 729, 733-37 (7th Cir. 1983) (employer denied due process when

unfair labor practice complaint amended to add additional allegations

in the course of unfair labor practice proceedings). ~

(“Adjudication depends upon adverse parties to gather

and present relevant evidence, and to challenge the evi-

dence introduced by the other party. Thus, adequacy of

notice is an essential prerequisite to fair and effective

adjudication.”) Riverbend had no such notice. Indeed, it

could not have been aware that it was even a party until

after the evidence was closed; thus, Riverbend, as a

non-party, was held accountable based on another party’s

marshalling of the facts, made in service to that party’s

interest and in response to other charges. Such a course of

proceeding materially prejudiced Riverbend’s interests

since, as a result of those proceedings, Riverbend is sub-

ject to substantial liability under California Labor Code

§ 1160.3. At a minimum, constitutionally mandated pro-

cedural due process dictates that Riverbend be permitted

to reopen the record and present evidence on issues for

which it may be held liable.

Riverbend respectfully submits that it was not given an

opportunity to defend, at a constitutionally meaningful

time or in a constitutionally meaningful manner. In fact, it

was not given an opportunity to defend at all. Riverbend

therefore has failed to receive the most fundamental

protections guaranteed through the Fourteenth Amend-

ment’s Due Process Clause. This case presents the very

circumstances which should prompt this Court to grant a

writ of certiorari under 28 U.S.C. § 1257(3). Only through

this Court’s action can the primacy of the Constitution’s

due process guarantee be vindicated against improper

state action. As this Court observed in Boddie v. Con-

necticut, 401 U.S. at 375,

(without this guarantee that one may not be de-

prived of his rights, neither liberty nor ideo

without due process of law, the State’s monopoly

over techniques for binding conflict resolution could

hardly be said to be acceptable under our scheme of

things. Only by providing that the social enforce-

ment mechanism must function strictly within these

bounds can we hope to maintain an ordered society

that is also just.

CONCLUSION

For the foregoing reasons, Petitioner, Riverbend

Farms, Inc., respectfully prays that a Writ of Certiorari

be granted.

February, 1984

Respectfully submitted,

BETTY SOUTHARD MURPHY

Counsel of Record

EVAN JAY CUTTING

ELIZABETH R. MOORE

BAKER & HOSTETLER

818 Connecticut Avenue, N.W.

Washington, D.C. 20036

(202) 861-1500

THOMAS M. GIOVACCHINI

CAMPAGNE AND GIOVACCHINI

‘Airport Office Center

5110 E. Clinton Way

Suite 117

Fresno, California 93727

(209) 255-1637

Counsel for Petitioner,

RIVERBEND FARMS, INC.

APPENDIX

Page

California Supreme Court Opinion, October 17, 1983 ..

California Fifth Appellate District Court of Appeal Opin-

es I ce ae neds pineetwsbeccboses 38a

California Agricultural Labor Relations Board Decision

and Sy ES BOD oc nnaceboeseees veces 99a

California Agricultural Labor Relations Board, Decision

of Administrative Law Officer, June 13, 1979 .... 1

Ventura County Municipal Court, Findings of Fact and

Conclusions of Law, April 22, 1980 ..............

— County Municipal Court, Judgment, April 25,

California Supreme Court Order Denying Rehearing,

25a

18la

I AG Gc cnc bes ceethcoanscvoetecs 208a

California one Court Decree Enforcing The ALRB

Order,

Agricultural Labor Relations Act, California Labor Code

(excerpts) (West 1975 & Supp. 1983) ............

WO Eis MD. kickscrvs soesscvecesed 209a

210a

IN THE SUPREME COURT OF THE STATE OF CALIFORNIA

S.F. 24520

RivcoM CORPORATION et al.,

Petitioners,

Vv.

AGRICULTURAL LABOR RELATIONS BOARD,

Respondent;

UNITED FARM WoRKERS OF AMERICA, AFL-CIO,

Real Party in Interest.

SUPREME COURT

FILED

OCT 17 1983

LAURENCE P. GILL, Clerk

Rivcom Corporation (Rivcom), its parent Riverbend Farms,

Inc. (Riverbend), and Triple M., Farms, Inc. (Triple M) peti-

tion for review of a decision of the Agricultural Labor Rela-

tions Board (Board) that the first two companies (collectively

the growers) committed acts prohibited by section 1153, sub-

divisions (a), (c), and (e) of the Agricultural Labor Relations

Act of 1975 (ALRA or Act) (Lab. Code, § 1140 et seq.). The

findings under subdivisions (a) and (c)' are that the growers, as

' Section 1153 provides:

“It shall be an unfair labor practice for an agricultural employer to

do any of the following:

“(a) Tointerfere with, restrain, or coerce agricultural employees

in the exercise of the rights guaranteed in Section 1152.

new operators of a large citrus farm in Ventura County, sought

to avoid unionization by replacing the resident union-affiliated

employees of the farm’s previous owner with nonunion work-

ers, and by evicting the resident employees from their labor-

camp housing. The Board also upheld allegations that the

growers violated subdivision (e) by refusing to bargain in good

faith with the United Farm Workers of America (UFW), the

certified representative of the predecessor employees.’ The

remedy imposed includes broad cease-and-desist and bargain-

ing orders, combined with reinstatement, backpay, and make-

whole relief.

We must decide, among other things, what deference is due

the Board when it infers from circumstantial evidence that

refusal to hire a predecessor’s workers was prompted by a

prohibited antiunion motive. We conclude that substantial evi-

dence on the whole record supports the Board’s decision here.

We also reject the petitioners’ remaining contentions. There-

fore, we enforce the Board’s order.

1. Facts.

Riveom Ranch, formerly known as Rancho Sespe, lies near

Santa Paula in Ventura County. The property includes some

4,300 acres, about 1,500 of which are devoted to its principal

crops, citrus and avocadoes. Between 1973 and January 1979

the ranch was owned by PIC Realty Company (PIC), a sub-

sidiary of Prudential Insurance Co.

“(¢) By discrimination in regard to the hiring or tenure of employ-

ment, or any term or condition of employment, to encourage or

discourage membership in any labor organization. . . .”

All statutory references are to the Labor Code unless otherwise

indicated or apparent.

2 Section 1153 subdivision (e) makes it an unfair labor practice “{t}o

refuse to bargain collectively in good faith with labor organizations

certified pursuant to the provisions of Chapter 5 (commencing with

Section 1156) of this part.”

National Property Management Systems, Inc. (NPMS) su-

pervised farming operations under contract with PIC. NPMS

employed a year-round agricultural workforce living in labor-

camp housing on the premises. The resident employees num-

bered as many as 140. Most had worked on the ranch for a

considerable period, some as long as 10 years. There was

evidence that its recent operations had not been profitable.

On May 9, 1978, the UFW won a representation election

among the ranch workers. The union was certified on May 17 as

the bargaining representative of all agricultural employees of

“Rancho Sespe.”

In the same year, a group of investors began negotiations to

buy the ranch. Newport Properties, Inc. (Newport) was orga-

nized for this purpose. The investors eventually decided to

lease the ranch for farming purposes to Larry Harris, presi-

dent and principal shareholder of Riverbend. That company

operated as a packer and marketer of citrus for many Ventura

County growers. Harris was interested in the ranch primarily

as a source of crops for Riverbend’s packing operation.

Harris testified he toured the property early in January

1979, saw the need for drastic operational changes, and de-

cided that the current workers should not be rehired because

they would resist change. He admitted he became aware

“sometime in 1978” that the UF'W had won an election among

the ranch employees.

On January 16, 1979, PIC sold Rancho Sespe to Paraships

Builders, which immediately conveyed it to Newport. New-

port, in turn, leased the land to Rivcom, a wholly owned

subsidiary of Riverbend. The annual rent was to be at least

equal to Rivcom’s “net profit” from farming operations, up to

$1.675 million.

On the day of the sale, an NPMS official informed the Rancho

Sespe employees that their jobs were terminated. Within the

next two days, Rivcom served 30-day eviction notices on the

workers.’ Rivcom quickly obtained nonunion agricultural em-

ployees from Triple M, a statewide labor supplier with which

Riverbend had a longstanding relationship. The number of

farmworkers hired was far fewer than that NPMS had em-

ployed. None of the former Rancho Sespe workers was con-

sidered for reemployment.

On January 18, Emilio Huerta, a UFW agent, telephoned

Harris’ lawyer, Thomas Campagne. Campagne told Harris

that Huerta had demanded recognition of the union, reinstate-

ment of all the displaced employees, withdrawal of the eviction

notices, and immediate bargaining about operational changes

and a permanent contract. On January 19, the UF'W sent

Rivcom a mailgram containing essentially the same demands;

Rivcom simultaneously received in the mail a copy of unfair

labor practice charges filed with the Board.

Harris testified he was confused about receiving demands

and charges at the same time. He ordered Campagne to re-

spond to Huerta. Campagne’s letter, dated January 19, ad-

dressed the recognition issue only. It urged that the prior

UFW certification was not binding on Rivcom, and that Riv-

com’s recognition of the union might violate subdivision (f) of

section 1153.‘ No mention was made of the hiring and eviction

matters.

On January 31, about 60 former Rancho Sespe employees

walked together to the ranch office. Some carried signs saying

* The “license agreement” between NPMS and its resident work-

ers provided for vacation of the premises within 24 hours after

termination of employment. The growers urge that the extension

granted by the 30-day notices was intended to avert hardship and

demonstrates their good will.

* Under section 1153, subdivision (f), it is an unfair labor practice

for an employer “(t]o recognize, bargain with, or sign a collective-

bargaining agreement with any labor organization not certified pur-

suant to the provisions of this part.”

“We want our jobs.” A delegation went in and asked to speak to

Harris. After a few minutes, a security guard told them Harris

would talk to them outside. The group waited in the rain for

about 30 minutes. A deputy sheriff, Juan Mendez, then re-

quested that they leave the property. The group’s leader,

Jaime Zepeda, asked Mendez, who had experience in labor

relations, to relay a message to Harris. After talking with

Harris, Mendez told the workers Harris did not wish to speak

with them, and they dispersed.°

On February 5, Harris received a letter from the UFW

dated February 1. It recited that “(t]he former employees of

. . » Rancho Sespe,” including some 140 persons named on an

attached list, “hereby apply for employment with Rivcom .

...” The letter made no additional demands. It simply de-

clared that, by making application, the employees “do not

waive ... seniority or other rights.” A second unfair labor

practice charge filed by the UF'W was served on Rivcom the

same day.

2. The Refusal to Hire.

The Board adopted the conclusion of the administrative law

officer (ALO) that the growers violated subdivisions (a) and (c)

of section 1153 when, in order to avoid unionization and collec-

tive bargaining, they replaced the UF W-affiliated former Ran-

cho Sespe employees with nonunion workers. That determina-

tion is attacked on numerous grounds.

Subdivisions (a) and (c) correspond respectively to section

8(a)(1) and (3) of the National Labor Relations Act (NLRA).

(29 U.S.C.A. § 158(a)(1), (3).) As our statute contemplates, we

rely where appropriate on “applicable” NLRA precedent. (See

§ 1148; Highland Ranch v. Agricultural Labor Relations Bd.

5 Mendez testified that the situation was potentially volatile. Ac-

cording to Mendez, Harris seemed apprehensive and said the sher-

iff's department had told him it would be dangerous to confront the

workers.

(1981) 29 Cal.3d 848, 855-856; Agricultural Labor Relations

Bd. v. Superior Court (1976) 16 Cal.3d 392, 412-413.)

It is an unfair labor practice for.an employer “({t]o interfere

with, restrain, or coerce” employees in the exercise of their

organizational rights (ALRA, § 1153, subd. (a); NLRA,

§ 8(a)(1)) or “[b]y discrimination in. . . hiring or tenure, . . . to

... discourage membership in any labor organization.”

ALRA, § 1153, subd. (c); NLRA, § 8(a)(3).) While the owner of

a business has broad power to restructure its operations and

hire his own workers, he violates the Act if he discriminates

against union applicants on the basis of antiunion animus.

(Howard Johnson Co. v. Hotel Employees (1974) 417 U.S. 249,

261-262, and fn. 8; NLRB v. Burns Security Services (1972)

406 U.S. 272, 280-281, fn. 5, 287-288; Phelps Dodge Corp. v.

Labor Board (1941) 313 U.S. 177, 185-186; N.L.R.B. v. Food-

way of E] Paso (5th Cir. 1974) 496 F.2d 117, 119-120.)

The growers do not dispute these settled principles. They

argue, however, that the record here cannot support the

charges.

At the outset, the growers invoke the general rule that an

employer commits no unfair labor practice by rejecting offers

to work which are absolutely conditioned on terms he need not

accept. (See, e.g., Packing House and Indus. Services v.

N.L.R.B. (8th Cir. 1978) 590 F.2d 688, 696; Sawyer Stores,

Inc. (1971) 190 N.L.R.B. 651, 656.) They argue that the Ran-

cho Sespe workers’ attempts to apply through the UF W were

improperly conditioned on demands for union recognition, col-

lective bargaining, and “all-or-none” reinstatement of the dis-

placed employees.

The Board concluded that the UF'W reinstatement applica-

tions were not conditional, since any “demands” were nothing

more than negotiating ploys. It was not clear, said the Board,

that every applicant would really refuse to work unless the

growers agreed to the unwarranted terms.‘

We need not tarry over the Board’s reasoning. Deficient

applications are no legal justification for a refusal to hire if

proper, timely offers to work would also have been rebuffed.

(Packing House and Indus. Services, Inc., supra, 590 F.2d at

pp. 695-696; Piasecki Aircraft Corporation v. N.L.R.B. (3d

Cir. 1960) 280 F.2d 575, 585, cert. den. (1960) 364 U.S. 912;

Macomb Block and Supply, Inc. (1976) 223 N.L.R.B. 1285,

1286, enforcement den. on other grounds (6th Cir. 1978) 570

F.2d 1304; see Kawano, Inc. (1979) 4 A.L.R.B. No. 104, pp.

4-5.)

The growers’ defense to the charge of antiunion motive is

founded on the premise that Harris had already decided before

January 16 not to consider the predecessor's workers, based on

his preference for familiar Triple M personnel and his view that

new employees were needed to implement operational

changes. (See discussion, post.) Indeed, Harris testified that

on both January 18 and February 5, the dates on which the

union “demands” were received, he had no positions available

and no reasonable prospect of any in the foreseeable future.

Hence, the “improper application” argument lacks merit.

The growers next claim the record fails to support a con-

clusion that the refusal to hire was impelled by an antiunion

purpose. We cannot agree.

*The ALO refused to admit in evidence the growers’ exhibit G, a

“declaration” by Attorney Campagne stating the substance of his

January 18 telephone conversation with Huerta. The declaration

suggests that Huerta took a particularly intransigent tone in voicing

the union’s terms. The growers challenge the ALO’s ruling and offer

the declaration for substantive consideration on appeal. However,

they failed to raise the admissibility of the declaration in their formal _

exceptions and brief filed with the Board. Hence, they waived the

point (see Butte View Farms v. Agricultural Labor Relations Bd.

(1979) 95 Cal. App.3d 961, 971), and we do not consider exhibit G for

any purpose.

Of course, we do not reweigh the evidence. If there is a

plausible basis for the Board’s factual decisions, we are not

concerned that contrary findings may seem to us equally

reasonable, or even more so. (See Boreta Enterprises, Inc. v.

Department of Alcoholic Beverage Control (1970) 2 Cal.3d 85,

94; N.L.R.B. v. Holly Bra of California, Inc. (9th Cir. 1969) 405

F.2d 870, 872.) We will uphold the Board’s decision if it is

supported by substantial evidence on the whole record.

(§ 1160.8; Martori Brothers Distributors v. Agricultural Labor

Relations Bd. (1981) 29 Cal.3d 721, 727; Tex-Cal Land Manage-

ment, Inc. v. Agricultural Labor Relations Bd. (1979) 24

Cal.3d 335, 343-346; see Universal Camera Corp. v. Labor Bd.

(1951) 340 U.S. 474, 488.)

Here, as often happens, there was no direct or specific

evidence that the growers’ hiring policy for obtaining agricul-

tural workers was wrongly motivated. No witness testified,

for example, that Harris had vowed to avoid the UF'W by any

and all means. Rather, the Board inferred improper motive

primarily because it did not believe Harris’ alternative ex-

planations of his conduct. Its decision must be sustained if its

grounds for discrediting Hiris were plausible.

As a rule, motive must oe inferred from all the circum-

stances, and the Board’s expertise entitles it to considerable

deference in deciding that question. (E.g., Penasquitos Vil-

lage, Inc. v. N.L.R.B. (9th Cir. 1977) 565 F.2d 1074, 1079;

Royal Packing Co. v. Agricultural Labor Relations Bd. (1980)

101 Cal.App.3d 826, 835-836.) The general counsel has the

burden of establishing bad motive. Yet inferences arising in

law and reason may require an employer to justify his suspi-

cious acts.

For example, NLRB v. Great Dane Trailers (1967) 388 U.S.

Conduct of this kind “carries with it ‘unavoidable consequences

which the employer not only foresaw but which he must have

intended’ and thus bears ‘its own indicia of intent.’ (Citation. ]”

(P. 33.)

In such cases, the Board may find an unfair labor practice

“even if the employer introduces evidence that the conduct was

motivated by business considerations. ... [%]...Thus,...

once it has been proved that the employer has engaged in

discriminatory conduct which could have adversely affected

employee rights ..., the burden is upon the employer to

establish that he was motivated by legitimate objectives. . . .”

(P. 34.) If his business justifications are not “legitimate and

substantial,” such conduct may constitute an unfair labor prac-

tice “without reference to intent.” (NLRB v. Fleetwood Trail-

er Co. (1967) 389 U.S. 375, 380.)

Wholesale replacement of union with nonunion employees

has a manifest and substantial adverse impact on organization-

al rights. (See Phelps Dodge Corp., supra, 313 U.S. 177, 185.)

Arguably, therefore, the Great Dane analysis applies; indeed,

both the Board and the parties have proceeded on the assump-

tion that it should. (See Columbus Janitor Service (1971) 191

N.L.R.B. 902, 910-911; see also Rushton & Mercier

Woodworking Co. (1973) 203 N.L.R.B. 123, 125-126, enforced

(1st Cir. 1974) 502 F.2d 1160, cert. den., 419 U.S. 996.)

Great Dane aside, common sense supports the Board’s argu-

ment that it could infer bad motive from the lack of credibility

in Harris’ explanations. When an employer acquires an enter-

prise soon after a union has won election as bargaining repre-

contativa, tn to benhd talnier Gal adimeataaahanieden:

by hiring new employees, be able to avoid the bargaining

obligations he would otherwise inherit. (See discussion, post.)

He has full power to employ new workers for other reasons.

(Howard Johnson Co., supra, 417 U.S. 249, 261-262, and fn.8;

Burns Security Services, supra, 406 U.S. 272, 280-281, fn. 5,

287-288.) But the Board need not ignore his obvious incentive,

when faced with a recent certification, to use his hiring author-

ity as a means of nipping union problems in the bud.

The antiunion temptation to take such a course is likely to be

much greater than in the case of an individual discharge.

10a

Therefore, when all the reasons a new employer has given for

replacing the union workforce with nonunion employees are

found unconvincing, and the circumstances otherwise permit,

the Board may be entitled to conclude that the true motive is

the prohibited one. (See Foodway of El Paso, supra, 496 F.2d

117, 119-120; Tri State Maintenance Corporation v. N.L.R.B.

(D.C.Cir. 1968) 408 F.2d 171, 174; Shattuck Denn Mining

Corp. v. N.L.R.B. (9th Cir. 1966) 362 F.2d 466, 470; Columbus

Janitor Service, supra, 191 N.L.R.B. 902, 910-911.)

The growers raise no fundamental objection to these princi-

ples. They argue vigorously, however, that the Board had no

grounds to reject Harris’ “uncontradicted” statement of his

legitimate business motives.

We recognize that the Board must accept “uncontradicted

and unimpeached” testimony unless “there is some rational

reason for disbelieving it.” (Martori Brothers, supra, 29 Cal.3d

721, 728.) But an interested witness’ declarations of his in-

nocent purpose are difficult to rebut directly. The Board must

assess their credibility in light of all the facts.’

The growers first rely on Harris’ statement of his estab-

lished preference for employees who had already worked for

7 The growers also object to the Board’s failure to find that antiun-

ion animus was a “but for” cause of Harris’ refusal to hire any prior

workers. (Martori, supra, at p. 730; see Mt. Healthy City Board of

Ed. v. Doyle (1977) 429 U.S. 274, 287; Wright Line (1980) 251

N.L.R.B. 1083, 1089, enforced (1st Cir. 1981) 662 F.2d 899, cer*. den.

(1982) 455 U.S. 989.) The “but for” test, however, applies to so-called

“dual motive” situations in which the Board finds that both innocent

and improper purposes were involved. Here, the Board concluded

that all the innocent motives advanced were pretexts. In effect, it

determined that antiunion animus was the only true cause. (But cf.,

Jackson v. Heller, The Irrelevance of the Wright Line Debate:

Returning to the Realism of Erie Resistor in Unfair Labor Practice

Cases (1983) 77 Nw.U.L.Rev. 737, 757.)

lla

him.* They point to several NLRB decisions suggesting that

employers need not alter customary hiring practices when

taking over new businesses, even if this means wholesale

rejection of a predecessor’s union workers. (E.g., Industrial

Catering Company (1976) 224 N.L.R.B. 972, 978; Crotona

Service Corp. (1972) 200 N.L.R.B. 738, 740-741; Southline

System Services (1972) 198 N.L.R.B. 449, 452.)

The growers contend that a consistent preference for famil-

iar workers over strangers dispels any Great Dane-style in-

ference of antiunion animus. In each of the cases they cite,

however, the NLRB simply credited employer assertions of

good faith under all the circumstances.

For example, in Jndustrial Catering, the NLRB noted the

several months’ time lapse between discontinuance cf cafeteria

services and their resumption under a new concessioner. It

also found convincing the new employer’s argument that his

services differed substantially from the predecessor’s and that

he employed rigid and standardized methods in all his cafeteria

operations. (224 N.L.R.B. at p. 978.)

Evidence that an employer treats union workers just as he

has treated nonunion workers in the past weighs toward a

finding that there was no antiunion discrimination or animus.

(E.g., Pellegrini Bros. Wines, Inc. (1979) 239 N.L.R.B. 1220,

1226.) Yet here the Board concluded from all the evidence that

an innocent preference for familiar workers was not a true

reason for wholesale rejection of the NPMS employees. That

determination must stand if substantially supported. It must

* On appeal, the growers have cited statutes and cases supporting

an employer's right to follow a “bona fide seniority system” which

does not manifest discriminatory intent. (See Civil Rights Act of

1964, tit. VII, § 703(h), 42 U.S.C.A. § 2000e-2(h); Franks v. Bowman

Transportation Co. (1976) 424 U.S. 747, 757.) No such “seniority

system” argument was raised before the Board. We reject it in any

event; there was no evidence of adherence to a system granting

vested seniority rights.

12a

be evaluated in light of all the justifications the growers have

advanced for preferring Triple M crews.

According to Harris ‘is observations at the ranch convinced

him that quick and drastic changes were necessary to turn it

into a profitable farm. He had a longstanding relationship with

Triple M through Riverbend, and it provided a ready pool of

workers familiar with the methods he intended to install.

The growers also assert that here, as in his prior takeovers,

Harris adhered to the “management principle” that a new

operator should not hire his predecessor’s employees, since

they are likely to resist change. Moreover, they say, Harris

wished to reward Triple M employees for their past loyalty; he

had promised one crew that its members would have the first of

any new work in Ventura County.

The Board saw numerous reasons for distrusting Harris’

statement of his motives. First, it noted that evidence of Har-

ris’ past practice in taking over businesses was scarce, and it

concerned much different entities.’ Hence, there was little

basis to conclude that he was acting consistently by preferring

his own workers in this case.

Next, the Board found no logic or prudence in Harris’ un-

tested assumption that the Triple M employees were superior

for his purposes. The NPMS workers were on the premises,

readily available. They had long experience with the ranch’s

operation, while the imported Triple M personnel had none.

Harris himself had never farmed such large acreage. Yet he

never inquired whether any of the NPMS employees had skills

he could use,” and he actively avoided their repeated attempts

to offer themselves for work.

* Harris had previously taken over an 80-employee citrus packing

house and three smaller citrus farms with a total of “perhaps ten

employees.”

sultants.

13a

The Board also concluded, on conflicting evidence, that the

operational changes Harris planned were not substantial.

This, it suggested, undermined his asserted belief that a com-

plete personnel turnover was necessary. Harris testified that

he wished to reduce the labor force, switch from “furrow” to

“drip” irrigation, change from cultivation to herbicides as a

means of weed control, substitute piecework compensation for

hourly wages in harvesting, and alter fruit-picking methods.

However, the Board credited evidence that the irrigation and

weed-control changes were already in progress, using the

NPMS workers, when Harris took over.

Moreover, said the Board, Harris could not have evaluated

the Triple M employees’ skills in these preharvest areas;

Riverbend, as a packer, provided harvesting and pruning serv-

ices for its grower customers but had not been involved in other

cultivation matters.

The growers made much of Rancho Sespe’s outdated prun-

ing methods, but the Board concluded that the changes in-

volved no extensive retraining. It is conceded that some of the

workers hired had no familiarity with Harris’ pruning

techniques.”

The Board noted that, despite Harris’ claims of loyalty to the

Triple M employees, and of their special skills in his tech-

niques, none had worked for Riverbend more than two years.

Many were seasonal only, and some had less than three

months’ experience with Harris.

Under these circumstances, the Board also questioned Har-

ris’ reliance on a “management principle” of avoiding the pre-

decessor’s experienced workers. In the Board’s view, blind

adherence to such a principle was not a prudent alternative to

'! This, of course, suggests Harris really had no plan to confine his

hiring to workers versed in his methods. The same can be said for his

testimony that, after a 30-minute refresher course in pruning, his

veteran workers could “help along” their inexperienced compatriots.

l4a

ascertaining the actual qualifications of a seasoned, already-

present labor pool.”

The growers argue that asserted motives cannot be rejected

simply because they are unreasonable, since the employer can

refuse to hire for any cause, good or bad, other than antiunion

animus. (See, e.g., N.L.R.B. v. Joseph (9th Cir. 1979) 605

F.2d 466, 468; National Labor Relations Board v. McGahey

(5th Cir. 1956) 233 F.2d 406, 412.) However, common sense

suggests that the less logical a motive for business conduct, the

more likely that it did not actually exist.'"* We think the Board

may decide, within reason, whether an employer’s asserted

motives appear so trivial or illogical that they are improbable."

2 Rejecting a similar contention in Columbus Janitor Service, su-

pra, 191 N.L.R.B. 902, the NLRB said: “{tJhe apocryphal character

of such claim is self-evident for the Respondent did not interview a

single Allied employee to ascertain whether he or she possessed bad

habits or whether he or she would adapt to the Respondent’s work

methods, although it knew Allied employees were available for em-

ployment.” (P. 911.)

‘3 The ALO rejected the “management principle” motive as a mat-

ter of law, concluding that it would always justify preferring new

workers over a predecessor’s union employees, to the detriment of

labor policy. The Board did not adopt the ALO’s analysis on this

point. However, it noted that “such a management practice may

conflict with the Act’s policy of encouraging stable labor relations,

and will frequently result in the refusal to hire former employees who

are represented by a union.”

The growers note the statements of two other farm operators

that they would always prefer familiar workers in taking over a new

farm, regardless of the quality of the predecessor employees. By

rejecting their “management principle” defense as unreasonable, the

growers say, the Board improperly disregarded this “uncontradicted

expert testimony.” However, the Board has considerable power in

this nontechnical area to apply its experienced common sense against

the formal evidence. (Cf., Franz v. Board of Medical Quality Assur-

ance (1982) 31 Cal.3d 124, 139-141.)

15a

The Board, like the ALO, was also unpersuaded by Harris’

assertions that he had assured a Triple M crew first chance at

any new farm work in the county. This vaguely stated promise,

the Board reasoned, could not have been a serious factor in

Harris’ plans, since it was made in mid-1978, long before Har-

ris had any idea he would be allowed to pick and pack the

ranch’s fruit. Only later did it become clear that he would have

to take over farming operations in order to obtain the crops.

Moreover, Harris’ testimony was confused as to places,

dates, and number and names of Triple M employees to whom

he spoke, undermining his general credibility and indicating a

lack of warmth and loyalty toward the workers. Indeed, Harris

did not know if any of the workers he addressed had ever

worked for Riverbend.” By the time of the hearing (April 1979)

he had obtained from Triple M many more employees than

were in the “promised” group, including 13 temporary people

who had never worked for him before.'* Again, while contrary

inferences were certainly possible, the Board’s analysis is sup-

portable.

Harris argued that speedy changes were needed to enable

him to meet the “burdensome” rent obligations. The Board

found, however, that few changes had been made in the first

three months of operation. The growers’ rebuttal that little

's The growers point out that Harris did remember several names

and suggest that passage of time between the promise and the

isgaring caused normal memory lapses. But the Board could infer that

Harris was unlikely to forget the details of a commitment so impor-

tant to him. Indeed, it would be necessary to remember the identities

of the promised workers so they would be the first accommodated.

‘6 Petitioners say these were temporary frost-protection workers,

needed until Triple M employees already hired returned from vaca-

tion. But, as the Board notes, favoring even these temporary work-

ers over the former Rancho Sespe personne! suggests that Harris

was more interested in excluding the latter than in preferring people

with whom he had a prior relationship.

l6a

could be done in the winter months actually contradicts their

assertion that the need for speed was a factor in Harris’

determination.

Finally, as the Board noted, the reasons Harris gave for his

actions were often irreconcilable. For example, he explained

his uncooperative attitude toward the UFW as hostility and

“confusion” about its harsh and rigid demands. He testified

that individual inquiries from the NPMS workers were never

received, hinting that they would have been considered. Yet

he also maintained that his employment policies arose from a

prior decision to follow the absolute “management principle”

against hiring a predecessor’s workforce. He conceded, indeed

insisted, that by the time the UF W’s first communication was

received, all hiring had been done, and no positions were or

would be available.

In sum, the Board found Harris’ statement of his business

justifications to be “superficial, unfounded, and contradictory”

under all the circumstances. This, in the Board’s view, left

“only the explanation that [the growers] sought to avoid hiring

employees who had already chosen the UF W as their bargain-

ing representative.”

On the whole record, we see no basis to disturb the Board’s

conclusion. The evidence supports its finding that Harris knew

of the UF W election victory when he agreed to farm the ranch.

Upon taking it over, he moved swiftly to evict the unionized

employees. He provided them no opportunity to apply for

work, never inquired about their qualifications, and stead-

fastly determined that none would be rehired, though they

represented a labor pool with extensive experience in the

ranch’s operations. While hastily assembling his own comple-

ment of workers, he avoided the former employees’ efforts,

both direct and through their union, to plead their case for

reinstatement. His response to the union’s complaints was .

minimal, uncooperative, and evasive. His replacement person-

nel, all newcomers to the ranch, had no union affiliation. On

substantial evidence, the Board concluded that the “innocent”

17a

business reasons advanced for these policies were inconsistent

and incredible.

Such facts may not compel the inference that an employer

acted for antiunion reasons, but they amply support it. (Com-

pare, e.g., Kallmann v. N.L.R.B. (9th Cir. 1981) 640 F.2d

1094, 1099-1100; N.L.R.B. v. Houston Distribution Serv., Inc.

(5th Cir. 1978) 573 F.2d 260, 264, cert. den., 489 U.S. 1047;

Foodway of El Paso, supra, 496 F.2d 117, 119-120; N.L.R.B.

v. New England Tank Industries, Inc. (1st Cir. 1962) 302 F.2d

273, 276, cert. den., 371 U.S. 875; Piasecki Aircraft Corpora-

tion, supra, 280 F.2d 575, 576-585.) Accordingly, the Board’s

determination must be upheld.

3. Evictions.

The Board found that eviction of the Rancho Sespe workers

from the labor camp was a separate violation of section 1153,

subdivisions (a) and (c). When an employee is evicted from

company housing following a discriminatory discharge (or re-

fusal to hire), it may be proper to infer that the eviction was

also discriminatory in purpose. (E.g., Filice Estate Vineyards

(1978) 4 A.L.R.B. No. 81, p. 2; W. T. Carter and Brother(1950)

90 N.L.R.B. 2020, 2025.)

The growers introduced evidence that Harris considered

maintenance of labor housing unduly expensive, wanted the

land for agricultural use, and believed it best to encourage

workers to maintain their own homes. There was, however,

conflicting evidence on the virtues of resident labor. In any

event, the Board reasoned that none of Harris’ asserted

reasons justified the haste with which the eviction notices were

served. While conflicting inferences are possible, we see no

reason to disturb its conclusions.

4. Refusal to Bargain.

The Board found that the growers had violated section 1153,

subdivision (e), by refusing to recognize the UF W and take up

the bargaining obligations of NPMS. A new owner, of course,

Yat

18a

need not recognize the certified bargaining representative of

his predecessor’s employees unless he is a “successor employ-

er.” (See, e.g., Burns Security Services, supra, 406 U.S. 272,

278-279."

The growers note that continuity of the work force is an

essential element of successorship. Since Harris hired no prior

employees, they urge, they cannot be successors. But a new

employer cannot avoid successorship status by a discriminato-

ry refusal to hire the predecessor’s workers. Where such con-

duct has occurred, continuity of the workforce will be pre-

sumed. (E.g., Foodway of El Paso, supra, 496 F.2d 117, 120;

K.B. & J. Young’s Super Markets, Inc. v. N.L.R.B. (9th Cir.

1967) 377 F.2d 463, 466, cert. den., 389 U.S. 841.)

Nevertheless, the growers say, there is need for separate

proof that, absent the discriminatory motive, the new employ-

er would have hired enough of the predecessor’s employees to

establish continuity.” We find no support for such a claim. In

any event, we think any necessary proof is implicit in evidence

that the new employer acted to avoid union obligations.

'7 The growers’ argument that ALRA sections 1153, subdivision (f)

(employer may only bargain with “certified” representative) and

1156 (“certified” representative must be chosen by election in the

“bargaining unit”) abrogate the successorship doctrine was rejected

in San Clemente Ranch, Ltd. v. Agricultural Labor Relations Bd.

(1981) 29 Cal.3d 874, 885, footnote 12. (See also Highland Ranch,

supra, 29 Cal.3d 848, 861-862.) The contention has been abandoned.

‘8 Federal precedent requires for “workforce continuity” that a

majority of the new owner’s employees worked for the predecessor.

(Burns Security Services, supra, 406 U.S. 272, 281; Saks & Co. v.

N.L.R.B. (2d Cir. 1980) 634 F.2d 681, 685.) In San Clemente Ranch,

supra, 29 Cal.3d 847, we held that the fluctuating nature of agricul-

tural employment requires a more flexible approach to workforce

continuity. (P. 891.) The growers suggest the federal rule should

apply here since both the former and current employees are perma-

nent. The issue is moot, however, in discriminatory-refusal-to-hire

cases.

19a

The growers suggest that, even with continuity of labor

force, they were not a successor, since they substantially

altered working conditions, equipment, methods of farming,

and number of permanent employees at the ranch. The Board

found the “essential nature of the business” unchanged; de-

spite the institution of new practices, it continued to grow and

harvest substantially the same crops at the same location.

Successorship analysis seeks to determine whether, after a

transfer of business control, the previously certified bargain-

ing unit remains appropriate in light of employee needs and

expectations. (See Burns Security Services, supra, 406 U.S.

272, 280.) The test, at bottom, is whether it is proper to assume

the previous unit still exists and still is represented by the

union. (N.L.R.B. v. Hudson River Aggregates (2d Cir. 1981)

639 F.2d 865, 869; N.L.R.B. v. Middleboro Fire Apparatus,

Inc. (1st Cir. 1978) 590 F.2d 4, 8.)

In this context, continuity of supervisory personnel, use of

the same machinery and equipment, and retention of individ-

ual employee functions are important but not dispositive. Con-

tinuity of the unit’s workforce, presumed in this case, is the

most crucial factor. (See Hudson River, supra, 639 F.2d 865,

869; Service, Hospital, etc. v. Cleveland Tower Hotel (6th Cir.

1979) 606 F.2d 684, 687; Intern. U. of Elec., Radio & Mach.

Wkrs. v. N.L.R.B. (D.C.Cir. 1979) 604 F.2d 689, 694; San

Clemente Ranch, supra, 29 Cal.3d at p. 891.) The Board did not

err in finding the growers to be successors.

5. Riverbend’s Opportunity to be Heard.

At a prehearing conference, the ALO granted Riverbend’s

motion to be dismissed as a respondent. Riverbend argues that

it was unfairly surprised and denied due process when, without

notice on the last day of hearing, the general counsel was

allowed to amend the complaint to reinclude Riverbend as a

“joint employer” subject to any remedial order. Riverbend

urges the case should be remanded for a full hearing on its

joint-employer status. We disagree.

20a

The original and first amended complaints had named River-

bend as a respondent, asserting that Rivcom was its wholly

owned subsidiary and agent. They also had alleged that joint-

employer status existed between Newport and Riverbend,

and between Newport and Rivcom. However, it was never

recited that Riverbend and Rivcom were directly related as

joint employers.

When the ALO granted Riverbend’s motion to dismiss, he

ordered Riverbend’s name removed from the complaint’s cap-

tion and from its prayer for relief. The original joint-employer

allegations remained in the body of the pleading.

We reject the Board’s contention that these remaining

boilerplate allegations were enough to place Riverbend on

notice after its dismissal that it was potentially liable as a joint

employer. The clear purpose of the ALO’s prehearing order

was to drop Riverbend from the complaint on grounds the

allegations against it were not sufficient to state a claim (see

discussion, post). On the basis of the pleadings alone, River-

bend was entitled to believe it had been dismissed from the

proceeding.

We are concerned about the timing of the later amendment.

However, we conclude that it did not deny Riverbend due

process. Harris is president of both Rivcom and Riverbend,

and he was present throughout the proceedings. So were one

or more members of Campagne’s law firm, which acted on

Riverbend’s behalf throughout.

On the third day of the hearing, Harris was called as an

adverse witness by the general counsel and was examined at

length on the relationship between Riverbend, Rivcom, and

Triple M. After a recess, the ALO broached the question of

Riverbend’s status. He advised Campagne that he had dis-

missed Riverbend because allegations of a parent-subsidiary

relationship, standing alone, were insufficient to saddle that

company with responsibility for Riveom’s unfair practices.

However, he said, “I’d like you to on the record be aware that

in my mind testimony has opened up serious question as to

2la

whether Riverbend . . . may also be an employer, an agricul-

tural employer under the Act.” Campagne responded by

reiterating his argument that Triple M, not Riverbend, em-

ployed the workers used in Rivcom’s farming operation.

On the last day of the hearing, after both sides had rested,

the Board’s counsel sought several amendments to conform to

proof, including a new allegation that Riverbend and Rivcom,

by virtue of their close operational and labor relationship, were

joint employers of the Rivcom workers. Campagne argued on

Riverbend’s behalf that the evidence failed to show joint-

employer status, but he did not complain that amendment of

the complaint in this respect constituted prejudicial surprise to

Riverbend. Contrary to Riverbend’s claim on appeal, he never

asked that the hearing be continued or reopened so Riverbend

could present further evidence on the joint-employer issue."

Indeed, the due process-surprise argument was not raised in

the growers’ joint posthearing brief to the ALO. Though it was

included among the 238 formal exceptions presented to the

Board, the question was not briefed at that level. Nor was it

asserted in the Court of Appeal until oral argument, at which

time that court requested supplemental briefing.

Riverbend still claims it would have litigated the joint-

employer issue more fully had it known it remained potentially

liable. Yet it has never suggested any specific, material new

evidence it would have adduced had the hearing been con-

tinued or reopened.

Amendments to conform to proof are liberally allowed unless

they prejudice the opposing party. (Code Civ. Proc., § 469.)

Since no prejudice is shown from the amendment here, it was

well within the Board’s discretion to allow the amendment and,

'® Campagne did ask the ALO for a continuance so he could produce

additional evidence on the proposed make-whole remedy. (See dis-

cussion post.) But he never mentioned the joint-employer issue as

one he needed more time to meet.

22a

upon finding joint-employer status, to extend its remedial

order to Riverbend. (Royal Typewriter Co. v. N.L.R.B. (8

Cir. 1976) 5383 F.2d 1030, 1043-1044; see also N.L.

Jordan Bus Co. (10th Cir. 1967) 380 F.2d 219, 222-223;

Manor Health Related Facility (1981) 257 N.L.R.B.

985, enforced (1st Cir. 1982) 697 F.2d 294.)

R.B. v.

; Hillside

981, 984-

6. Employer Status.

The growers contend that there is no substantial evidence

that either is the statutory employer of the ranch workers.

They first urge that Triple M is “the” true employer. Labor

contractors, of course, are excluded from employer status by

the ALRA. (§ 1140.4, subd. (c); see discussion, post.). The

growers assert, however, that Triple M functions as a “custom

harvester” and may be deemed an employer.”

The Board found the contrary. It acknowledged that Triple

M had some characteristics of a custom harvester; it provided

equipment and hauling services, set wages, and apparently

had hiring and firing authority.”” However, the Board con-

cluded on conflicting evidence that Harris had primary control

over day-to-day farming operations. Most significantly, it de-

termined that Rivcom and Riverbend, rather than Triple M,

had “the substantial long-term interest in the ongoing agricul-

tural operation” which made it appropriate to fix employer

*” Typically, a custom harvester not only contracts to furnish labor,

but assumes more complete responsibility for harvesting services,

including provision of equipment and hauling. His compensation is

usually an overall contract rate not directly pegged to labor costs. He

generally retains control over hiring, firing, and details of work

management. (See Jack Stowells, Jr. (1977) 3 A.L.R.B. No. 98, pp.

2-3; Napa Valley Vineyards Co. (1977) 3 A.L.R.B. No. 22, pp. 9-11;

Kotchevar Brothers (1976) 2 A.L.R.B. No. 45, pp. 6-7.)

*! The Board found “no evidence” that Harris had power to hire,

fire, or discipline. Actually, though Harris denied it, his resident

Sk er ante par ape ie aden owner of

Triple M, shared that authority.

23a

responsibilities on them. (See Corona College Heights Orange

and Lemon Association (1979) 5 A.L.R.B. No. 15, pp. 11-12.)

We agree. The ALRA expressly excludes both a “farm labor

contractor” and “any [other] person supplying agricultural

workers to an employer” from the otherwise expansive defini-

tion of “agricultural employers” subject to the Act. A farm

operator who “engages” the labor supplier is “deemed the

[statutory] employer for all purposes” of the statute. (§ 1140.4,

subd. (c).)

In these provisions, the ALRA’s drafters directly addressed

the widespread practice of obtaining field workers from in-

termediate suppliers who retain ostensible control over hiring,

firing, wages, and working conditions. The Act sought to

bypass that intermediate employment relationship and to “es-

tablish [an] ‘industrial’ bargaining unit scheme, with collective

bargaining directly between growers and unions.” (Vista

Verde Farms v. Agricultural Labor Relations Bd. (1981) 29

Cal.3d 307, 323.) It also confirmed farm operators’ direct re-

sponsibility for unlawful interference with employees’ organi-

zational rights. ‘Id., at p. 326.)

The Board developed the “custom harvester” distinction in

response to arguments by certain labor suppliers that they

were entirely excluded from statutory responsibility as mere

labor contractors. No decision holds, however, that a custom

harvester is the sole employer of any workers it furnishes. Any

such result would undermine the statutory goal of fixing labor

relations responsibility directly on farm operators. Thus, any

assumption that Triple M acted as a custom harvester at Riv-

com Ranch, and was therefore an employer of the workers

there, does not preclude a finding that Rivcom and Riverbend,

the ranch’s operators, were also employers of those workers

for purposes of the Act. The Board has reached the correct

conclusion.

Riverbend claims there is no basis to conclude it is a “joint

employer” with Rivcom. There was ample evidence, however,

that for labor-relations purposes, Rivcom and Riverbend oper-

24a

ated as a single enterprise. (N.L.R.B. v. Triumph Curing Ctr.

(9th Cir. 1978) 571 F.2d 462, 468; Abatti Farms, Inc. (1977) 3

A.L.R.B. No. 83 (ALO Dec., pp. 10-18).) Harris is principal

owner of Riverbend, which owns Rivcom. For the most part,

the ranch serves as the integrated farming arm of Riverbend’s

marketing operation; Rivcom cultivates citrus which River-

bend harvests, hauls, packs, sells, and ships. Harris makes the

day-to-day management decisions for both entities.“ He

helped select, and he largely directs, the Tnple M workers

used by both Rivcom and Riverbend. There was evidence that

Triple M workers have been transferred back and forth to both

Rivcom and Riverbend payrolls as needed.

Riverbend’s (and Rivcom’s) lack of control over wages and

hours of the Triple M workers is not fatal to a finding of

employer status under the ALRB. That contract labor sup-

pliers have traditionally retained those functions in California

agriculture does not insulate the growers who engage them.

(Abatti Farms, Inc., supra, 3 A.L.R.B. No. 88 (ALO Dec., pp.

10-18; see Vista Verde Farms, supra, 29 Cal.3d 307, 323.) The

Board’s finding of joint-employer status is upheld.”

2 Riverbend says its relationship with Rivcom is no different from

its tie to other “outside growers” for whom it also provides harvest-

ing, hauling, and packing services. That ignores the common own-

ership and management of the two companies, and the evidence that

Riveom was principally intended as a “captive grower” of Riverbend,

an assured source of fruit.

*™ The growers’ opening brief on appeal argued that the case must

be remanded since the Board failed to determine the appropriate

bargaining unit after the change of ownership. (See § 1156.2; cf.,

Peter Kiewit Sons’ Co. (1977) 231 N.L.R.B. 76, 78.) The Board’s

response urged that this, as well as several other contentions, had

been waived because they were not fairly raised in the filed excep-

tions to the ALO’s decision. (See Butte View Farms, supra, 95

Cal. App.3d 961, 971.)

The reply brief submitted by the growers denied waiver as to the

other challenged arguments but did not mention this one. Our own

review of the filed exceptions persuades us the issue was not pre-

25a

7. Triple M’s Interest in the Remedial Order.

The remedial order directs Rivcom and Riverbend to replace

the employees now working at Rivcom Ranch with UFW

workers displaced by the discriminatory refusal to hire. Triple

M was not a party before the Board. In its separate petition for

review (§ 1160.8), Triple M argues that it is directly affected by

the reinstatement requirement, since it is the contractual

source of the current workers who are subject to replacement.

Hence, Triple M suggests, it was an indispensable party; with-

out its participation, the Board lacked jurisdiction to make a

reinstatement order. The contention lacks merit.

Triple M cites NLRA precedent which suggests that the

Board may not interfere with contractual relations between a

party and a nonparty unless the contract arises directly from

an unfair labor practice and is void as a matter of statutory

policy. (Compare, e.g., National Licorice Co. v. Labor Board

(1940) 309 U.S. 350, 363-366, with Edison Co. v. Labor Board

(1938) 305 U.S. 197, 231-239.) Recent NLRB decisions indicate

the Board’s reluctance to order abandonment of an employer’s

current labor-supply contract and reinstitution of another pre-

viously terminated, unless both old and new contractors have

appeared and argued. (Compare Hillside Manor Health Re-

lated Facility, supra, 257 N.L.R.B. 981, 984-985, with Mobil

Oil Corp. (1975) 219 N.L.R.B. 511, 512, enforcement denied on

other grounds, Alaska Roughnecks & Drillers Ass’n v.

N.L.R.B. (9th Cir. 1977) 555 F.2d 732, cert. den. (1978) 434

U.S. 1069.)

served at the administrative level and is therefore waived. We as-

sume it has been abandoned.

In any event, a determination of successorship includes an implicit

finding that the previous bargaining unit remains appropriate. The

Board accepted the ALO’s decision to substitute Rivcum/Riverbend

for NPMS on the prior certification order covering the ranch. There

is no merit to petitioners’ argument that the appropriate unit was not

determined.

26a

As noted, however, our farm labor law expressly discounts

the widespread use of labor contractors by California growers.

It makes the latter the “employers” for “all (labor relations]

purposes” of agricultural workers supplied them by the for-

mer. (§ 1140.4, subd. (c), supra; see Vista Verde Farms, supra,

29 Cal.3d 307, 323-324.)

Any of the ALRB’s remedial powers, including the power to

order direct bargaining between grower and union, are likely

to affect intermediate relationships between growers and con-

tractors, and between contractors and workers. If the con-

tractors were indispensable parties in every such case, the

Board’s power to fashion the remedies contemplated by the

Act would suffer grievous harm.

It follows that a contractor’s interests should not thwart the

Board’s enforcement of labor policy against the grower, whom

the ALRA recognizes as the true employer. (Cf., National

Licorice Co., supra, 309 U.S. at pp. 362-366.) Accordingly, the

general counsel’s failure to include the contractor as a party

does not necessarily deprive the Board of jurisdiction to im-

pose a remedy which may affect the contractor’s relationship

with both grower and workers.

Of course, the contractor may seek to intervene (§ 1160.2)

and denial of intervention might sometimes be an abuse of

discretion. Triple M, however, did not seek to participate in

the proceedings below,” and it makes no serious showing of the

™ Triple M makes the startling assertion that it had no actual notice

of the hearing before the ALO. It has a long, close association with

Harris, Riverbend, and Rivcom, and has always been the source of

the challenged workforce at Rivcom Ranch. Its relationship to Riv-

com and Riverbend, and the status of the employees on its payroll,

were central issues. Juan Batista, Triple M's crew leader at the

ranch, testified at the hearing. We are not persuaded by counsel's

aseertion at oral argument that because Benny Martinez, Triple M’s

owner, was absent from the state during the hearing. Triple M had no

actual knowledge of the proceedings.

27a

interests it deems prejudiced. We conclude that the failure to

include Triple M as a party before the Board does not invalidate

the hiring order.

8. Remedies.

The Board’s remedial order includes a broad cease-and-

desist provision, as well as awards of reinstatement, backpay,

and “make-whole” reparations for the growers’ refusal to bar-

gain with the union. Among other things, the Board ordered

the growers to negotiate with the UF'W and directed them not

to discourage union membership by “attempting to evict, or

evicting” the NPMS workers from housing “provided them as a

condition of their employment by NPMS.””

*% We do not interpret the Board’s order as an absolute command to

maintain the labor camp permanently. The amended complaint

charged and the Board found, among other things, that petitioners

had used the eviction notices as a form of antiunion discrimination

(§ 1153, subds. (a), (c)). The cease-and-desist order is directed only at

evictions in furtherance of the antiunion policy. The Board also

directed petitioners to bargain in good faith with the UF'W. Thus,

while petitioners may not unilaterally alter the “conditions of em-

ployment” by closing the camp, they may, of course, bargain about

the future of employee housing on the ranch.

Rivcom cites a recent United States Supreme Court case, Bill

Johnson's Restaurants, Inc. v. NLRB (May 31, 1983) U.S.

(51 U.S.L. Week 4636), for the proposition that the Board may not

prohibit “retaliatory” unlawful detainer actions. Bill Johnson's holds

that when an employer's suit is well-founded and asserts rights not

preempted by the labor laws, it may not be enjoined as an unfair labor

practice solely on the ground that its motive is to retaliate against

protected activity. (Pp. 4638-4639, and fn. 5.) However, labor stat-

utes and regulations limit an employer's substantive rights under

general law, including his right to exclude others from his property.

(See, e.g., 8. P. Growers Assn. v. Rodriguez (1976) 17 Cal.3d 719,

726-728; Agricultural Labor Relations Bd. v. Superior Court, supra,

16 Cal.3d 392, 419-421.) And where a dispute concerns activities

arguably protected or prohibited by the labor relations statute, the

28a

The growers raise several objections. They first contend

that the backpay award is overbroad, since it extends beyond

actual wages lost to “expenses” and interest. But award of the

costs of seeking or holding interim employment, and of in-

terest, is a well-established NLRB practice. (Southern House-

hold Products (1973) 203 N.L.R.B. 881, 883; Isis Plumbing &

Heating Co. (1962) 188 N.L.R.B. 716, 719-720, enforcement

den. on other grounds (9th Cir. 1963) 322 F.2d 913.)

Citing J.R. Norton Co. v. Agricultural Labor Relations Bd.

(1979) 26 Cal.3d 1, the growers next urge that the Board erred

by ordering them to make the NPMS employees whole for

imputed bargaining losses (see Highland Rdnch, supra, 29

Cal.3d 848, 866, fn. 7), since there was no finding that their

refusal to bargain was in bad faith.

Our statute, unlike the NLRA, expressly empowers the

Board to order the make-whole remedy for an employer’s

bad-faith refusal to bargain. (§ 1160.3.) However, this court

held in J.R. Norton that the remedy may not be used when the

employer commits a “technical” refusal to bargain as the only

means to obtain judicial review of a colorable, good-faith chal-

lenge to union certification. If a sincere but unsuccessful chal-

Board, not the courts, has primary jurisdiction. (See San Diego

Unions v. Garmon (1959) 359 U.S. 236, 244-245; Vargas v. Municipal

Court (1978) 22 Cal.3d 902, 910-913.) An employer has no right to

discharge his resident workers, then commence eviction procedures,

when his purpose is to combat or punish activities protected by the

ALRA. (Vargas, supra, at p. 914; S. P. Growers, supra, at p. 725; see

Code Civ. Proc., § 1161, subd. 1.) As a matter of law, retaliatory suits

of that kind have no “reasonable basis” (compare Bill Johnson's,

supra), and their use is an unfair practice the Board may enjoin.

Moreover, the Board may obviously prohibit an employer’s efforts to

evict employees from housing provided as a “condition of employ-

ment” without first bargaining about the change with the employees’

certified bargaining representative. ($§ 1153, subd. (e), 1155.2,

subd. (a), supra.)

29a

lenge exposed the employer to liability for all gains prompt

bargaining might have produced, said the court, meritorious

challenges, which serve the Act’s purposes, would be deter-

red. (26 Cal.3d at pp. 27-37.)

Here, the Board found on substantial evidence that the

growers attempted to evade the bargaining duties of a succes-

sor by adopting an illegal tactic—purposeful discrimination in

hiring on the basis of union affiliation. In other words, they

acted in bad faith in creating their claim of lack of succes-

sorship. No purpose of the ALRA would be served by insulat-

ing them from responsibility for the losses caused by their

unlawful failure to bargain. No. J.R. Norton remand is neces-

sary.”

The growers also urge that the reinstatement, backpay,

make-whole, and no-eviction orders should not extend to all

the former NPMS employees. Since the record establishes the

ranch’s reduced labor needs, they argue, we must assume

many of the NPMS workers would not have been rehired in any

event. (See, e.g., Castleman & Bates, Inc. (1977) 228

N.L.R.B. 1504, 1507-1508; Rogers Furniture Sales, Inc. (1974)

213 N.L.R.B. 834, 835-836.)”’

*% The growers cite San Clemente Ranch, supra, for the proposi-

tion that J. R. Norton applies to successorship cases as well as those

involving certification. (See 29 Cal.3d 874, 883, fn. 9.) But this case,

unlike San Clemente Ranch, involves charges and findings that the

growers used unlawful means to avoid successorship status. That

establishes the necessary element of bad faith.

In a “request for judicial notice” filed well after oral argument in

this court, Rivcom alerts us to a February 1982 case, N.L.R.B. v.

Sure-Tan, Inc. (7th Cir.) 672 F.2d 592, rehearing denied, 677 F.2d

584, which held that a reinstatement order applied to illegal aliens

granted “voluntary departure” from the United States (see 8

U.S.C.A. § 1254(e)) only if their subsequent return and attempt to

work is lawful under the immigration statutes. Sure-Tan also ruled

that such departed aliens were entitled to backpay only for the period

they would have remained employed and undetected by the INS

30a

The Board recognized that Rivcom’s needs might not accom-

modate all the former NPMS workers. It directed that those

who could not be reinstated immediately be placed on a nondis-

criminatory preferential-hiring list approved by the regional

director. It then fashioned an order compensating losses “sus-

tained by” the employees “as the result” of the refusal to

bargain and “suffered” by “each of the employees ... as a

result of Respondents’ unlawful refusal to hire them, .. .”

Under the circumstances, we construe the order as self-

limited to losses directly arising from the unlawful conduct.

That interpretation excludes those former employees who

would not have been rehired even under a legitimate hiring

policy. The identities of the excluded workers may be deter-

mined at a subsequent compliance hearing. (Kawano, Inc.,

supra, 4A.L.R.B. No. 104, p. 18.)” We caution, however, that

absent the employer’s discriminatory conduct; six months, said the

court, was a “reasonable assumption.” (P. 606.)

Rivcom now claims that the ALO improperly cut off its attempt to

inquire about the alien status of an NPMS employee who testified for

the Board. Noting that certiorari has been granted in Sure-Tan

((March 7, 1983) __ U.S. —— [51 U.S.L.Week 3649]), Rivcom

urges us to postpone our decision in this long-pending matter until

the United States Supreme Court resolves the illegal-alien issue. We

decline to do so. Petitioners never pursued their objection beyond the

ALO hearing. They did not raise it before the Board, and they failed

to call Sure-Tan to the Court of Appeal’s attention in the eight

subsequent months this case remained pending there. They neg-

lected to mention it to us until July 1983, a year and a half after the

Seventh Circuit’s opinion was filed. Under the circumstances, peti-

tioners have waived any claim based on illegal alienage.

% The growers argue that the NPMS payroll records introduced to

establish the identities of the displaced workers do not meet the

“business record” requirements of Evidence Code sections 1271,

1561, and 1562. They suggest that the affidavit of NPMS’ custodian of

records contained insufficient foundational facts to authenticate the

documents. There is no contention that the custodian was required to

3la

the eviction ban remains in place as to all the workers now

living there until the identities of those who are entitled to

reinstatement are determined. (But see discussion post.)”

testify personally. (Compare testimonial requirements of § 1271 with

affidavit requirements of § 1561.)

In the growers’ view, the affidavit fails to state that the records

were prepared in the “ordinary” or “regular” course of business “at or

near the time of the act, condition, or event” ($§ 1271, subds. (a), (b),

1561, subd. (a)(3)) and does not show the “mode of preparation” so as

to establish trustworthiness. (§ 1271, subds. (c), (d).) But the custo-

dian declares that the records were provided in response to a sub-

poena seeking the identities of Rancho Sespe workers “during the

payroll period immediately preceding January 16, 1979. According to

her affidavit, they were prepared in the “normal” course of business

and are “the payroll records used and relied upon by [NPMS] in

paying the employees who worked at Rancho Sespe and ... to

comply with various wage payment laws.” As such, they necessarily

were up-to-date employee records, and NPMS’ reliance on them

amply establishes their trustworthiness. They were properly admit-

ted. (See People v. Williams (1973) 36 Cal.App.3d 262, 274-275.)

*The growers argue that Triple M workers already hired by

January 16 should be deducted from the positions deemed available

on that date for purposes of reinstatement. To the extent this is a

concession that some, but not all, available positions had been filled

by the time the NPMS employees tried to apply for work, it is

inconsistent with assertions elsewhere that all hiring had been com-

pleted on that date. In any event, the Board concluded that Harris’

hiring policies were solely motivated by the desire to avoid unioniza-

tion. Hence, the Board concluded that all jobs on the ranch should be

available to the NPMS discriminatees.

The growers also contend that the NPMS workers waived their

reinstatement and backpay rights by delaying their applications until

after the positions had already been filled. ‘The applications were

timely by any reasonable test. They were made within two days after

Harris’ takeover, despite the failure to provide any application proce-

dure. In any event, they would have been futile even if made in-

stantaneously. There was no waiver.

10. Housing Issues

Finally, the growers seek modification of the no-eviction

provision of the Board’s order in light of outside proceedings

affecting the labor camp. They ask us to take judicial notice of

materials which suggest that in 1980, Ventura County con-

demned the camp as unsafe and uninhabitable and posted

notices warning that occupancy is unlawful.” A June 1980

superior court injunction, which ordered Rivcom and Newport

(owner of the ranch) to make specified repairs, is pending on

appeal.”

The growers have also obtained a Ventura County unlawful

detainer judgment against the labor camp residents. We have

stayed enforcement of the judgment pending resolution of t/1is

action. (See Vargas, supra, 22 Cal.3d at pp. 915-916.)*

The Board’s ban on eviction, the growers urge, conflicts with

the property’s condemned status. They contend that section

1103, subdivision (a) of the Uniform Housing Code permits

them to abate a structural nuisance “immediately dangerous to

life, limb, property, or safety of the public or occupants” by

abandoning rather than repairing it.”

*® According to the notices, the dangerous conditions include sub-

standard gas piping and overflowing sewage from septic tanks.

3! The superior court injunction apparently was intended to make

the camp habitable pending completion of the ALRB proceeding.

® We have, however, permitted appeal to proceed in the Appellate

Department of the Ventura Superior Court.

The growers also sought mandate to compel the county sheriff to

arrest and evict the residents as a consequence of the condemnation.

That effort was unsuccessful, and the sheriff, apparently in deference

to the ALRB order, has declined to remove them.

®The Uniform Housing Code, published by the quasi-official In-

ternational Conference of Building Officials, forms the basis for hous-

ing standards adopted by the state Commission on Housing and

Community Development. (Health & Saf. Code, § 17922, subd.

(ay(2).)

33a

Subdivision (a)(2) of section 1103 only provides that immedi-

ately dangerous premises “shall be ordered vacated.” It grants

no paramount right to let the housing become unsafe in order to.

avoid a duly entered ALRB order preventing discriminatory

evictions. Were we to agree with the growers’ theory,

employer-landlords would have an easy means of evicting

workers who are not wanted because they have exercised

organizational rights. (Cf., Vargas, supra, 22 Cal.3d 902, 915;

S.P. Growers, supra, 17 Cal.3d at p. 725.) Such conduct is

repugnant to the Act and to public policy.

On the other hand, the Board concedes that its order runs

only against the growers and does not prevent the county from

taking actions immediately necessary under state and county

law to protect life and limb. Those actions may include appro-

priately obtained and properly enforced orders to vacate the

camp during an immediate peil to health or safety.

Any such action, however, can have no collateral estoppel or

res judicata effect on the Board’s order. (Vargas, supra, 22

Cal.3d at p. 916.) That order implicitly includes the command

to maintain the housing in habitable condition at least until the

growers reach agreement or good-faith impasse with the union

about its future. (Ante, fn. 24.) In any enforcement proceeding

(see § 1160.8), they may face a heavy burden in showing that an

eviction required by health or safety hazards on the property

was not the result of their efforts to avoid the Board’s

directive.™

* Our comments assume without deciding that the events repre-

sented by the documents the growers offer are true. Hence, there is

no need to take judicial notice of them, and the motion for judicial

notice is denied.

11. Conclusion.

Petitioners’ challenges to the Board’s decision and order lack

merit. Let a decree issue enforcing the order of the Board in

accordance with the views expressed in this opinion.

GRODIN, J.

WE CONCUR:

MOSK, J.

KAUS, J.

BROUSSARD, J.

REYNOSO, J.

*SPENCER, J.

* Assigned by the Chairperson of the Judicial Council.

RIVCOM v. A.L.R.B.

S.F. 24520

DISSENTING OPINION BY RICHARDSON, J.

I respectfully dissent.

My review of the record in this case convinces me that the

Agricultural Labor Relations Board (Board) failed to give

proper credence to the unimpeached and uncontradicted testi-

mony of Larry Harris, president of petitioner Riverbend

Farms. (See Martori Brothers Distributors v. Agricultural

Labor Relations Bd. (1981) 29 Cal.3d 721, 726.) Harris’ testi-

mony demonstrated that petitioners had legitimate and sub-

stantial business justifications for replacing the employees of

the unprofitable predecessor grower, NPMS. Accordingly,

the Board erred in rejecting Harris’ justifications as “superfi-

cial, unfounded and contradictory.” There was absolutely no

evidence that petitioners’ actions were prompted by any anti-

union motive.

I will not repeat the evidentiary facts which disclosed peti-

tioners’ justifications as most of those facts are described in the

majority opinion. Because the factual issues raised herein are

of no legal importance to anyone but the parties to this litiga-

tion, a hearing in this case was improvidently granted, being

unnecessary to secure “uniformity of decision” or to settle

“{mportant questions of law.” (Rule 2%a), Cal. Rules of Court;

see Martori Brothers, supra, at pp. 731-732 [cone. opn. by

Newman, J.].)

I would vacate and set aside the Board’s order. |

RICHARDSON, J.

36a

RIVCOM CORP., et al v. A.L.R.B.

S.F. 24520

COUNSEL FOR PARTIES:

FOR PETITIONERS

RIVCOM CORP. and

RIVER BEND FARMS:

FOR PETITIONER

TRIPLE M FARMS:

FOR RESPONDENT:

FOR REAL PARTIES IN

INTEREST:

Thomas E. Campagne, Esq.

Thomas M. Giovacchini,

Esq.

5110 East Clinton Way,

Suite 207

Fresno, CA 93727

(209) 255-1637

Gerald Lee Tahajian, Esq.

410 Helm Bldg.

Fresno, CA 93721

(209) 486-5620

Manuel M. Madeiros, Esq.

Nancy C. Smith, Esq.

Agricultural Labor

Relations Board

915 Capitol Mall, 3rd Floor

Sacramento, CA 95814

(916) 322-7024

Marco E. Lopez

Carlos M. Alcala

Francis E. Fernandez

Carmen Flores

P.O. Box 30

Keene, CA 93531

(805) 822-5571

Jerome Cohen

Sanford N. Nathan

Tom Dalzell

1182 Market St., Suite 320

San Francisco, CA 94102

(415) 626-5433

37a

Dianna Lyons

United Farm Workers

1201 — 24th St.

Sacramento, CA 95816

(916) 442-1862

38a

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIFTH APPELLATE DISTRICT

5 Civil No. 5121

(ALRB No. 55)

RIvcom CORPORATION et al.,

Petitioners,

Vv.

AGRICULTURAL LABOR RELATIONS BOARD,

Respondent;

UNITED FARM WorRKERS OF AMERICA, AFL-CIO,

Real Party in Interest.

COURT OF APPEAL

FIFTH APPELLATE DISTRICT

FILED

OCT 25 1982

KEVIN A. SWANSON, Clerk

OPINION

Petition for review of order of the Agricultural Labor Rela-

tions Board. Order set aside and matter remanded for further

proceedings.

Thomas E. Campagne, Thomas M. Giovacchini and Gerald

Lee Tahajian for Petitioners.

Ellen Lake, Chief of Litigation, Manuel M. Medeiros, As-

sistant Chief of Litigation, Robert W. Farnsworth, Edwin F.

Lowry and Nancy Smith, Counsel, for Respondent.

39a

Marco E. Lopez, Carlos M. Alcala, Francis E. Fernandez,

Carmen Flores, Jerome Cohen, Sanford N. Nathan, Tom Dal-

zell and Dianna Lyons for Real Party in Interest.

See Dissenting Opinion

We review a decision of the Agricultural Labor Relations

Board (Board) determining that petitioners Rivcom Corpora-

tion (Rivcom) and Riverbend Farms, Inc. (Riverbend), as joint

employers committed unfair labor practices by refusing to

employ the workers of petitioner Rivcom’s predecessor in in-

terest in violation of Labor Code section 1153, subdivisions (a)

and (c),' by evicting the workers from housing located on

Rivcom’s leased farm property in violation of section 1153,

subdivision (a) and (c), and by refusing to recognize and to

bargain with the United Farm Workers (UF'W) as the collec-

tive bargaining representative of the workers in violation of

section 1153, subdivisions (e) and (a).’

The Board affirmed those rulings, findings and conclusions

of the Administrative Law Officer (ALO) which were con-

sistent with its decision and adopted his recommended order as

modified by the Board. The Board pursuant to section 1160.3

ordered that Rivcom and Riverbend cease discouraging mem-

' All statutory references are to the California Labor Code unless

* Labor Code section 1153 provides in pertinent part: “It shall be an

unfair labor practice for an agricultural employer to do any of the

following: [4] (a) To interfere with, restrain, or coerce agricultural

employees in the exercise of the rights guaranteed in section 1152. [4]

employment, or any term or condition of employment, to encourage

or discourage membership in any labor organizaton. (€]. . . [€](e) To

refuse to bargain collectively in good faith with labor organizations

certified pursuant to the provisions of Chapter 5 (commencing with

Section 1156) of this part. [{] (f) To recognize, bargain with, or sign a

collective-bargaining agreement with any labor organization not cer-

tified pursuant to the provisions of this part.”

40a

bership of employees in the UF W or any other labor organiza-

tion by unlawfully refusing to hire the workers formerly em-

ployed by National Property Management Systems (NPMS) or

by evicting those workers from housing at Rivcom Ranch,

cease refusing to meet and bargain collectively in good faith

(§ 1155.2, subd. (a)) with the UFW as the certified exclusive

collective bargaining representative of Rivcom’s agricultural

employees at Rivcom Ranch and cease interfering in any other

manner with agricultural employees in the exercise of their

rights under section 1153. The Board also ordered that certain

affirmative actions be taken, among them to make whole the

agricultural employees for losses in pay and other economic

losses sustained as the result of Rivcom’s refusal to bargain.

FACTS

Rivcom is a wholly owned subsidiary of Riverbend and

leases Rivcom Ranch, formerly known as Rancho Sespe. Larry

R. Harris (Harris) is the president of both Rivcom and River-

bend, and the principal shareholder of Riverbend. Riverbend

is a large citrus packing shed and marketing facility in Fresno

County. For many years, Riverbend had packed and marketed

citrus grown by numerous Ventura County farmers. River-

bend obtained the citrus by providing the Ventura County

farmers with the pruning, harvesting, and hauling services of

Triple M. Farms, Inc. (Triple M), a statewide independent

contractor owned and operated by Benny Martinez.

The Rivcom Ranch near Santa Paula, formerly known as

Rancho Sespe, was owned in 1973 by PIC Realty Corporation

(PIC), which corporation sold the farm to Paraships Builders

(Paraships). Paraships sold the property to Newport Beach

Development Co., Inc. (Newport); Newport leased the proper-

ty to Riveom by document dated January 16, 1979. The 10-year

lease of January 16, together with an agreement dated January

15, provides for a minimum annual cash rent of $1,675,000, but

for no rental payment in any year if a net loss is suffered; if the

net profit is less than the stated rent, the rent is equal to the

profit. Rivcom is required to pay deficiencies in rent of loss

4la

years from income during years in which net profits are sus-

tained in excess of $140,000 over the minimum annual rent. At

the end of the lease, any net loss is paid to Riveom by Newport.

Before January 1979, while the ranch was owned by various

persons or entities, for 35 years it was managed by the same

individual, T. Allen Lombard (Lombard). In May 1978, the

UFW was certified by the ALRB as the bargaining represent-

ative of the agricultural employees of NPMS; however, NPMS

and the UFW did not reach agreement on a bargaining con-

tract.

The ranch historically produced various citrus fruits, avoca-

dos and nuts through the efforts of a resident labor force living

in housing provided by NPMS for a residence rental of $10 a

month; many employees had been working on the property for

10 years.

On January 16, Charles McBride (McBride), a vice president

of NPMS, informed employees on the ranch that the property

had been sold and their jobs were terminated.

Harris, who arrived at the ranch during the afternoon of

January 16, testified that he knew sometime in 1978 through

trade sources that the UF W had won an ALRB election at the

ranch, but that until January 1979 he intended to pack, not

farm, and considered the union’s certification irrelevant. He

did not discuss the matter with Newport, Paraships or the

Board. On January 16, Rivcom delivered to the residences of

the employees notice of termination of rental upon their cessa-

tion of employment by NPMS and gave notice to vacate the

premises by February 16, 1979.’

Harris testified that he toured the property during the

second week in January and knew that drastic changes in ranch

operations were required; on January 10, he decided it would

*On January 25, 1979, Rivcom served written 30-day notice of

termination.

42a

be best not to hire the former employees to prevent resistance

to the anticipated changes in farming practices.

On January 18, 1979, the UF'W filed an unfair labor practice

charge against Rivcom with the ALRB alleging violations of

section 1153, subdivisions (a), (c) and (e). On January 19, 1979,

Emilio Huerta (Huerta), from the Oxnard field office of the

UFW, telephoned Rivcom attorney, Thomas Campagne (Cam-

pagne). The attorney told Harris of Huerta’s following de-

mands: recognition by Rivcom of the UFW, reinstatement of

all former employees, withdrawal of all eviction notices served

on the employees, the immediate commencement of bargaining

for a collective bargaining agreement and the negotiation of all

changes concerning conditions of employment. Huerta also

sent a Western Union mailgram to Rivcom on January 19

containing these demands. On January 19, Harris received the

mailgram from Huerta, and the notice from the Board of the

unfair labor practice charge filed by the UF W; Harris testified

he was confused and directed Campagne to answer Huerta in

writing. On January 19, Campagne sent Huerta a letter which

responded to the demand for union recognition, but did not

mention the hiring or housing issue. The letter stated that the

UFW certification was not binding upon Rivcom and any

recognition by Rivecom of the UF W would constitute a violation

of section 1153, subdivision (f), of the Agricultural Labor Rela-

tions Act (Act). (See fn. 2, p. 2, ante.)

OnJanuary 31, 1982, [sic] some 60 former NPMS employees,

who had worked previously on the property now owned by

Newport and leased by Rivcom, walked to the Rivcom Ranch

office; some carried signs; a delegation of about 5 persons led by

Jaime Zepeda (Zepeda) entered the Rivcom office and asked to

speak with Harris. A secretary said Harris would be available

and asked the group to wait. A few minutes later, a security

officer told them to leave the office, that Harris would speak to

them outside. They waited in the rain for some 30 minutes

before Ventura County Deputy Sheriff Sergeant Juan Mendez

(Mendez) asked the workers to leave Rivcom property. Zepeda

asked Mendez to relay a message to Harris that the people

43a

waiting wanted to talk to Harris about their jobs. Mendez

talked to Harris and then told the group that Harris did not

wish to talk with them. Mendez testified the situation was

potentially volatile and Harris seemed apprehensive. Harris

said he had been told by the sheriff's department it would be

dangerous to talk with the workers.

On February 5, 1979, Harris received a letter from Huerta

seeking employment for 130 named persons and also received a

second unfair labor practice charge which had been filed with

the Board by the UFW.

Harris testified that he hired none of the former NPMS

employees who had worked on the property. None made an

individual application for work.

DISCUSSION

THE BOARD’S DETERMINATION THAT RIVCOM’S

REFUSAL TO HIRE THE PREDECESSOR’S EMPLOYEES

CONSTITUTED AN UNFAIR LABOR PRACTICE

The ALO and the Board both based their decisions that

Rivcom committed unfair labor practices for refusing to hire

and for evicting the former employees under section 1153,

subdivisions (a) and (c) (see fn. 2, ante), upon findings that the

conduct of Rivcom was motivated by antiunion animus. Such

findings are irrelevant unless the basis of their orders was a

violation of section 1153, subdivision (c); neither decision dis-

cussed whether an independent violation of section 1153, sub-

division (a), could be found on this record. Consequently, the

Board’s decision may be affirmed only if there is substantial

evidence to support the following four elements of a section

1153, subdivision (c), violation: that those who sought employ-

ment tendered an unconditional application, that petitioners’

conduct discriminated between union and nonunion employ-

ees, that petitioners’ conduct was motivated by an antiunion

animus in that petitioners’ discriminatory conduct would not

have occurred “but for” the workers’ protected activity, and

44a

that petitioners’ conduct resulted in the encouragement or

discouragement of union membership. (See NLRB v. Great

Dane Trailers, Inc. (1967) 388 U.S. 26.)

Petitioners contend that the record does not support find-

ings that the workers’ employment applications were uncondi-

tional, that Rivcom’s conduct was motivated by antiunion ani-

mus and that but for the workers’ protected activities they

would have been hired.

The Board in its reply brief states: “Under ordinary circum-

stances, an employer must reject or fail to accept an uncondi-

tional application for employment before it will be held re-

sponsible for an illegal refusal to hire” but gives four reasons

why Rivcom’s argument concerning the applications must fail.

We agree with and discuss one of the Board’s arguments.

On February 5, 1979, Rivcom received the following letter

dated February 1, 1979, from Huerta on behalf of the UF W:

_ “The former employees of National Property Manage-

ment Systems dba Reset Sespe, including but not lim-

ited to those workers listed on the endeata six page list,

hereby apply for employment with Rivcom Corporation.

In doing so they do not waive any seniority or other rights

either as employees of National Property ment

Systems dba Rancho Sespe or as employees of Riveom

orporation. Please respond at the above Oxnard address

to this application. Failure to respond to this application

within five ove of the receipt of this letter will be under-

stood as a failure and refusal to rehire these workers.”

A list of approximately 140 names of workers was attached to

the letter.

On its face, the application received on February 5 is not

conditioned upon petitioners’ acceptance of any demands of the

workers which were previously made. Literally construed, the

workers’ refusal to “waive any seniority or other rights” only

means that if the workers have such rights the application for

employment does not waive them. This reference to “seniority

or other rights” does not amount to an assertion that the

workers possess any vested rights which may be asserted

45a

against Rivcom. Therefore, had Rivcom accepted the appli-

cants for employment, such an acceptance by itself would not

have bound Rivcom to respect any later assertion by the work-

ers of additional rights or conditions of their employment. The

February 5, 1979, application therefore constituted an uncon-

ditional application for employment on behalf of the named

employees. We affirm the Board’s determination that an un-

conditional application was made. We find it unnecessary to

review the other contentions of the parties regarding the

requirement of an unconditional application. Therefore, peti-

tioners’ motion to receive exhibit G in evidence is denied.

We next address the question whether the record supports

the Board’s finding that petitioners’ refusal to hire the workers

was motivated by antiunion animus as is required for a viola-

tion of section 1153, subdivision (c). (See Radio Officers v.

Labor Board (1954) 347 U.S. 17, 42-45.)

The basic rule concerning the burden of proving the pre-

sence or absence of antiunion animus are set out in NLRB v.

Great Dane Trailers, Inc., supra, 388 U.S. 26, 35:

“. . . once it has been proved that the employer ee in

discriminatory conduct which could have adversely

affected employee rights to some extent, the burden is

upon the ay ented to establish that he was motivated by

itimate objectives since proof of motivation is most

accessible to him.”

Because petitioners do not challenge in their opening brief

(Utz v. Aureguy (1952) 109 Cal.App.2d 803, 808) that the

refusal to rehire union members is inherently destructive of

employee rights and justifies an inference that Rivcom’s con-

duct was motivated by an impermissible intent (Rushton &

Mercier Woodworking Co. (1973) 203 N.L.R.B. 123), we con-

clude that under the test enunciated in Great Dane Trailers the

burden was upon petitioners to present evidence of legitimate

and substantial reasons for their conduct.

Petitioners presented evidence that their conduct was moti-

vated by several business reasons unrelated to the union acti-

46a

vities of the former employees. In this case the justifications

offered amount to petitioners’ only defense; it is necessary that

the Board properly evaluate the justifications. (Martori

Brothers Distributors v. Agricultural Labor Relations Bd.

(1981) 29 Cal.3d 721; see Wright Line (1980) 251 N.L.R.B.

1083-1084, fn. 5.) The Board rejected all of petitioners’

justifications on the grounds that they were “superficial, un-

founded and contradictory.” (Riveom Corporation and River-

bend Farms, Inc. (1979) 5 A.L.R.B. 17.) The Board’s decision

brought the case within the description in Wright Line, supra,

251 N.L.R.B., pages 1083-1084, wherein the court stated that

the reason advanced by the employer may be termed “pretex-

tual”:

“In modern day labor relations, an employer will rarely, if

ever, — assert that it has disciplined an i

because it detests unions or will not tolerate employees

tected activities. Instead, it

e ing in union or other pro

wil generally advance what it asserts to be a legitimate

business reason for its action. Examination of the evi-

dence may reveal, however, that the asserted justification

is a sham in that the purported rule or circumstance ad-

vanced by the employer did not exist, or was not, in fact,

relied upon. When this occurs, the reason advanced by the

employer may be termed a Since no legitimate

business justification for the discipline exists, there is, by

strict definition, no dual motive.

“The pure dual motive case presents a different situation.

In such cases, the discipline decision involves two factors.

The first is a legitimate business reason. The second

reason, however, is not a legitimate business reason but is

instead the employer’s reaction to its wee i

in union or other activities. This latter motive,

of course, runs afoul of Section 8(a)(3) of the Act. This

po aye rachel, war hen garter ape! ms 7

er’s action requires iry into the role played b

each motive and has spa tet ecnaoeay te

8(a)(3) litigation.” (/bid.)

In reviewing the Board’s evaluations of petitioners’ justifica-

tions, we recognize that employers who take over new busi-

nesses are not required to hire the former employees of their

47a

predecessors. (Howard Johnson Co. v. Hotel Employees

(1974) 417 U.S. 249, 261-262.)

Although the Board may reject the asserted business

justifications on policy grounds (see NLRB v. Great Dane

Trailers, Inc., supra, at pp. 34-35), the authority to reject

business justifications on grounds of unreasonableness is not

unlimited. The Board may not reject a business justification

solely upon the ground that it appears to be unreasonable. (See

N.L.R.B. v. Joseph (9th Cir. 1979) 605 F.2d 466.) The Board

may reject a justification by not crediting the testimony of the

proponent of the justification. (Labor Board v. Walton Mfg.

Co. (1962) 369 U.S. 404; La Jolla Casa deManana v. Hopkins

(1950) 98 Cal. App.2d 339, 345-346.) However, California pro- —

vides by statute that “{e]xcept where additional evidence is

required by statute, the direct evidence of one witness who is

entitled to full credit is sufficient for proof of any fact” (Evid.

Code, § 411) and Labor Code section 1160.2 provides that the

proceedings under the Act “shall, so far as practicable, be

conducted in accordance with the Evidence Code.”

Recently the standard of review of cases under the Act was

summarized in Martori Brothers Distributors v. Agricultural

Labor Relations Bd., supra, 29 Cal.3d 721 as follows:

“Findings of the board with respect to questions of fact are

conclusive if a pty by substantial evidence on the

record considered as a whole. [Citations.] While the ad-

ministrative agency under this test is empowered to re-

solve conflicts in the evidence and to make its own credibil-

ity determination, ‘the test of substantiality must be mea-

net 08 eee Se ee ee gy tm he!

simply isolating evidence which supports board

i other relevant facts of record which rebut or

explain that evidence.’ (Citation. ]

* 7 7

Fie he paneer alls rt ree: ple wn Po 5

tended meaning of uncontradicted unimpeached evi-

dence. [Citation. ]

7 7 +

S eh ax,

dda

“(W]e are satisfied that when a party testifies to favorable

facts, and any contradictory evidence is within ont |

of the op party to produce, a failure to bring f

such evidence will require acceptance of the uncontra-

dicted testimony unless there is some rational basis for

disbelieving it.” (/d., at pp. 727-728.)

Furthermore, this court is not required to respect resolu-

tions of conflicting evidence or credibility determinations

which are based upon inadequate or invalid reasons. (Martori

Brothers Distributors v. Agricultural Labor Relations Bd.,

supra, 29 Cal.3d 721, 730-731; Delco-Remy Div., General

Motors Corp. v. N.L.R.B. (5th Cir. 1979) 596 F.2d 1295, 1303-

1304; N.L.R.B. v. Moore Business Forms, Inc. (5th Cir. 1978)

574 F.2d 835, 843-846; United Insurance Company of America

v. N.L.R.B. (7th Cir. 1966) 371 F.2d 316, 323-325.)

Unless an employer’s testimony is impeached, contradicted

by other testimony or by an inference reasonably deducible

from the facts of the case, or unless it is inherently improbable,

or the trier of fact reasonably rejected the testimony because

of the witness’ demeanor, this court must accept it as true.

Because we hold that the Board erred in rejecting certain of

petitioners’ justifications, we set aside the order and remand

the case for a proper evaluation of those justifications; if upon

reconsideration the justifications are found to be legitimate

and substantial, the Board will determine whether “but for”

the protected activity the former employees would have been

hired by petitioners. (Martori Brothers Distributors v. Agri-

cultural Labor Relations Bd., supra, 29 Cal.3d 721, 731.)

We discuss the various justifications presented by petition-

ers together with the Board’s reasons for rejecting those

justifications.

1. Petitioners assert that their refusal to hire the former

employees can be justified on the theory Rivcom was giving

seniority preference to its own workers. However, petitioners

failed to argue this point before the Board, and under the

general rule (Ernst v. Searle (1933) 218 Cal. 233, 240), petition-

ers cannot adopt a new theory for recovery in the reviewing

court which was not raised in the trial court. (Ward v. Taggart

(1959) 51 Cal.2d 736, 742.)

While there is an exception to the general rule where the

new theory is based upon the same factual circumstances at

issue in the trial court and the adverse party was given an

adequate opportunity to present all the facts relevant to the

new theories (Ward v. Taggart, supra), on this petition peti-

tioners have not met their burden of establishing that they are

entitled to such relief. The argument that petitioners’ actions

were justified on the grounds Rivcom was following a seniority

preference program is waived. (See Jn re Marriage of Fink

(1979) 25 Cal.3d 877, 887-888.)

However, we disagree with the Board’s contention that

because petitioners assert a justification based upon seniority

preference in this court for the first time an inference is created

that petitioners’ conduct was prompted by improper motives.

The seniority justification was asserted as a legal theory by

counsel for petitioners and is consistent with petitioner Harris’

testimony that he preferred Riverbend employees, and con-

sistent with the Board’s factual finding that Rivcom and River-

bend are joint employers. No reasonable inference can be

drawn from petitioners’ citation in this court of different legal

precedents that petitioners assert defenses in bad faith.

Because we hold that petitioners waived the seniority issue,

we need not discuss respondent’s argument that petitioners

failed to exhaust their administrative remedies. On remand,

the seniority issue may be raised by petitioners; we note that

federal precedents provide support on this issue for the legi-

timacy of petitioners’ justification.

2. The Board rejected petitioners’ justification that Harris

acted pursuant to a management principle of never hiring the

former employees of a predecessor because of the difficulties

caused through resistance to changes. Harris testified that:

I)n a situation like this, it’s very hard in implementing

sk das ph aa cae a on cee

‘ of

— =>” YF a ee} +

50a

. And that presented a real problem to me, because

ployees

wold net hove the in the way this lease was

x“ vamaiecon y

so leven demidones ee nll do eat ee at hae

Harris had applied this management principle before to busi-

nesses he had taken over which also had been losing money.

The Board rejected this business justification on the ground

that the decision to apply the principle was not a good decision

because Harris had insufficient information regarding the

workers at the farm to conclude that they would be a source of

resistance to the changes he proposed, and the fact that Harris

applied the management principle in the past to smaller farms

did not justify its application to the Rivcom operation because

it was a larger enterprise.

However, there is no significance in the fact that Harris had

never applied the management principle to a ranch as large as

this one. Furthermore, Harris had inspected the ranch and had

seen the type of farming the workers had done. The changes he

wanted to make were significant, including the elimination of

housing. He therefore had substantial knowledge of the work- .

ers’ experience and to what extent they would have to change.

The elimination of the farm housing itself would make Harris’

expectation of resistance reasonable.

Harris offered the testimony of Dick Richardson, a self-

employed custom farmer, who testified that he had assumed

management of ranches in the past which previously had been

poorly operated, and learned from those experiences that it

was best to have a crew with whom the farmer is familiar and a

crew the farmer can trust to do the job. Richardson’s testi-

mony provides substantial support for the reasonableness of

Harris’ adherence to his management principle in the following

exchange:

If in Ri

oh Sie et raat Re Soret

make in an effort cash ren = vpyg Bet oo

lease(?)

“I would then try to do something to get the valencia trees

down to a height that is readily pickable and meets with

Cal-OSHA’s standards as far as mip ert ick them off

a 16-foot ladder. And I would put ail of the blocks under

non-tillage within a year’s time.

“I have found my own practices, my own opera-

tion, that furrough [sic] irrigation and cultivation are the

most expensive and time-consuming, labor-consuming

techniques used on a farm in this day and age.

“In my own operation, I have taken on several ranches

thet being cult mo yee clirrigated ee

ing vated, sic , excessively

high trees, and have, by — — orchards _

sprinkler irrigation, vation, trimming the

trees, have been able to cut ximately two-thirds of

my labor expense, of m expense, and have

boen abe te out come of may oidhinn enpense

52a

Richardson was hired to farm land by the owners and had the

choice of retaining or not retaining former employees. The

choices he had to make were indistinguishable from those

which confronted Harris, and Richardson’s testimony provides

direct support for the substantiality of the management princi-

ple and stands uncontradicted and unimpeached on the record.

Harris had visited the farm, observed the former employees

during work hours, observed the various farming techniques

which he believed needed changing, discovered the presence of

the labor camps on the property, and reviewed the farm’s

operating statements. Based upon this information, Harris

reasonably could have concluded that the extent of the changes

he would have to make were sufficiently great to make it likely

that there would be problems in getting the former employees

to adjust to the changes. The management principle is given

additional support by the fact that Harris, as manager of

Riverbend, was employing his own workers who were familiar

with some of the changes he intended to make at the farm and

who were of demonstrated efficiency. The only reasonable

conclusion from these circumstances is that the use of River-

bend employees would make his initial operation of the farm

much easier. The Board was not justified in rejecting Harris’

decision to apply his management principle on the grounds of

reasonableness.

The Board also rejected this justification because of two

alleged inconsistencies. First, Harris retained two former su-

pervisors of Rancho Sespe on his payroll as consultants. The

Board apparently reasoned that if the only basis for Harris’

refusal to hire the predecessor employees was because the

ranch was a failing business, there was no reason for Harris to

retain part of the managerial staff. (V.L.R.B. v. Foodway of

El Paso (5th Cir. 1974) 496 F.2d 117.) However, Harris ade-

quately explained why these two former supervisors were

hired; he testified that they were acting as consultants for

Rivcom on a temporary basis to help locate property lines,

irrigation systems, pipelines, wells, easements, etc., until the

transition of the business could be completed. The two former

53a

supervisors did not have any managerial or supervisorial

capacity at the Rivcom ranch. Evidently, the ALO credited

this testimony of Harris. The only reasonable inference which

can be drawn from this record is that Harris’ retention of the

two former supervisors in a consulting capacity, considering

the size of the farm and considering the fact the ALO did not

reject Harris’ explanation, was not inconsistent with his stated

purpose.

The second inconsistency noted by the Board concerned

Harris’ failure to inquire into the qualifications of the former

employees. However, Harris testified that a substantial

reason for not hiring the former employees was that he be-

lieved the changes he intended to make would create resist-

ance among the former employees, and that those changes

would be more effectively accomplished if he used a labor force

with whom he was familiar and had employed in the past. The

testimony of Richardson supports the reasonableness of these

reasons. Harris’ failure to implement a screening process was

also consistent with several of his other stated justifications.

The Board’s rejection of this justification on the ground of

inconsistency is not sustainable.

The Board also stated that the management principle was an

insufficient justification of Harris’ conduct on the grounds of

policy, stating:

“We further note that such a management practice ma

conflict with the Act’s of cisesesnaton chable \dher

relations, and will y result in a refusal to hire

This statement does not reject the sufficiency of the man-

agement as a justification; the statement indicates

that the was not ruling on whether the management

principle conflicts with the Act and cannot support the Board's

rejection of this justification.

The ALO expressly rejected the sufficiency of this justifica-

tion, saying:

Pca ea eer yn ge ey nah nmngn

" 3

54a

ployees because they would resist new ways of doing

things, and that Harris therefore decided to hire his own

long-time loyal employees whom he could trust and

who{m] he had pro full-time employment, are oppo-

site sides of the same coin. The first contention is, by its

nature, irrefutable. But it must be rejected as a defense to

an unfair labor practice charge. If it were to be acce 4

Section 1153(c) would lose much of its force. Any employer

could then decide that it, too, believed in the practice and

therefore had no obligation to consider former employees

because their very status as former —— be

an absolute bar to employment. Such a defense is simply

not substantial e to overcome the well established

labor law principle that all applicants for employment

must be considered in a non-discriminatory manner.

Phelps-Dodge v. NLRB, 313 U.S. 177 (1941). It would

indeed be ironic if experience, rather than being an asset

to an applicant, were to disqualify him from further con-

sideration. A similar defense was summarily rejected in

aa v. Foodway of El Paso, 496 F.2d 117 (5th Cir.,

The Board has the discretion to reject an asserted business

justification “even if the employer introduces evidence that the

conduct was motivated by business considerations.” (Great

Dane Trailers, supra, 388 U.S. 26, 34.)

We disagree with the sufficiency of the ALO’s reason for

rejecting Harris’ justification on policy grounds that such a

justification is irrefutable. A proponent’s assertion of the man-

agement principle as a justification certainly may be rejected

upon the facts of a case. His conduct could be inconsistent with

his stated purpose. (See N.L.R.B. v. Foodway of El Paso,

supra.) The circumstances of a case may be analyzed to deter-

mine whether it is appropriate to apply the management prin-

ciple and the Board may reject the application of the principle if

an employer fails to show that he is going to make substantial

changes in the operation of a business which could be expected

to be met with resistance by former employees. Or, if an

—ee ae management principle in the

past when 4 run

applied the for the first time in taking over

——— ee

55a

operated by union employees, the Board could draw an in-

ference that the employer was asserting the management prin-

ciple as a justification in bad faith and was motivated by an

antiunion animus. Obviously, the assertion by an employer

that his conduct was based upon the management principle is

not the type of defense which is immune from review by the

ALRB.

Applicable NLRB precedents have repeatedly remarked on

the difficulty placed upon a union when it has to prove that an

employer is subjectively motivated by antiunion animus. That

difficulty exists with almost every business justification

asserted by management. If the Board were allowed to reject

the business justification on the ground that it is difficult to

refute, the Board would have the power to reject arbitrarily

any business justification offered to explain employer conduct,

and in turn that rejection by the Board would be unreviewable.

The second reason given in the quoted portion of the ALO’s

decision for rejecting the management principle as a justifica-

tion on policy grounds is that it is not substantial enough to

overcome the principle that applicants should be considered in

a nondiscriminatory manner. This reason refers to the defense

as construed in the preceding sentence, that the management

principle is an abstract defense unrelated to the circumstances

of a case and is unreviewable. But the management principle is

not necessarily irrefutable; the Board may reject the principle

as a justification in cases where no substantial changes are

intended to be made in an organization, where there is no

likelihood that the changes would be met by resistance, or

where other circumstances indicate that the employer is

asserting a principle in bad faith. Also, there is a substantial

basis for the application of the management principle in this

case. The policy reasons given by the ALO for refusing to

accept the application of the management principle as a busi-

ness justification are insufficient to uphold the Board’s

determination.

3. Petitioner Rivcom contends that in hiring an entirely

new work force it followed its established practice when taking

* .

56a

over a new business and urges that the fact that this hiring

pattern was followed tends to negate an inference that peti-

tioners acted with antiunion animus.

The uncontradicted testimony of Harris established that his

past practice when he took over a new business was to fire the

predecessor's employees and hire his own workers to run the

operation; he testified he did this in 1973 when he acquired the

Clovis Citrus Packing Company, in 1976 when he purchased an

80-acre ranch, in 1969 when he purchased a 150-acre ranch, and

in 1977 when he purchased a 40-acre ranch; none of the prede-

cessors’ employees had any union involvement whatsoever in

the above examples. Under NLRA precedent, the fact that an

employer treats union employees no differently from nonunion

employees under similar circumstances tends to establish that

such treatment was not motivated by antiunion animus. (Pel-

legrini Bros. Wines, Inc. (1979) 239 N.L.R.B. 1220.)

Respondent attempts to distinguish the cases cited by peti-

tioners on the ground that the cases involve individual work-

ers; however, the issue is the motivation behind the action of

the employer and not the number of workers affected by the

decision of the employer; also, the cases cited by petitioners

may not be distinguished on the ground that the employers had

a good cause for discharging the workers; while an employee

may be discharged for good cause, bad cause, or no cause, the

relevant question is the motivation of the employer in taking

the action against an employee (Lippincott Industries, Inc. v.

N.L.R.B. (9th Cir. 1981) 661 F.2d 112, 114-115) and not

whether the decision of the employer is a good management

decision. Because the Board and the ALO did not reject Harris’

testimony regarding his past practices on the ground that

Harris was disbelieved, the testimony by Harris must be ac-

cepted as true by this reviewing court. Harris’ testimony con-

cerning his past practices constitutes substantial evidence

which tends to refute the inference that his conduct was moti-

vated by antiunion animus.

4. Petitioner Rivcom asserted at the hearing that it did not

hire the former Rancho Sespe workers because Riverbend’s

57a

employees were better qualified in that they constituted a

skilled, competent work force familiar with petitioners’ opera-

tions. The Board rejected the above justification on the ground

that the workers employed by Rivcom had not worked for

Riverbend for a substantial amount of time, none for more than

two years, and as a second ground for rejecting this justifica-

tion, the Board noted that Rivcom employed 13 people who had

never worked for Riverbend.

The ALO rejected the above justification on the ground that

Rivcom’s new workers had not been employed by Riverbend

for very long and there was inadequate evidence to establish

that Riverbend’s employees were any more skillful than the

former employees of Rancho Sespe.

However, there is uncontradicted evidence in the record to

establish a difference between the methods used by Riverbend

employees and methods used by former Rancho Sespe employ-

ees. One difference is in methods of harvesting, such as use of

forklifts to pick across the rows, each employee working with

his own bin and keeping count of the amount of fruit picked, and

being paid on a piece rate, not an hourly rate. Harris testified

that Rivcom’s method of harvesting in this fashion “can im-

prove efficiency anywhere from 40 to 50 percent.” Robert

Gonzales, a former Rancho Sespe foreman, testified that there

58a

With the exception of temporary laborers, Rivcom’s work-

ers had all worked for Riverbend for a minimum of three

months and a maximum of two years, which is a substantial

amount of time to become familiar with Riverbend’s general

method of conducting farm operations and with Riverbend’s

supervisors. The employment with Riverbend indicated to

Harris that Rivcom’s employees were able to perform

efficiently the general type of work he anticipated would be

performed at the ranch. The only reasonable inferences to be

drawn from these facts are that Harris, as manager of River-

bend, was able to evaluate the past work performance of

Riverbend employees, that those employees were familiar

with Harris’ general methods of work, and that his employees

were more familiar with and more skilled in the harvesting and

pruning methods used by Harris. The record is silent as to

whether Riverbend employees are familiar with other in-

tended changes in methods to be utilized at the farm, including

irrigation techniques, frost protection, weed eradication and

the plans to initiate the cultivation of geraniums, vegetable

row crops and Satsuma oranges. Obviously, petitioner Rivcom

was entitled to select workers on the basis that they were more

familiar with only some of the methods and changes Harris

intended to make at the newly acquired farm.

The Board was in error in determining that Rivcom employ-

ees were not more skillful or familiar with the harvesting and

pruning activities they were to perform at the Rivcom Ranch.

The Board did not err in determining that petitioners failed to

The Board also refused to credit petitioner’s justification

because Rivcom employees had not had long service with

Riverbend; however, with the exception discussed below, all of

Rivcom’s employees had worked for Riverbend for a minimum

of three months; half had worked for Riverbend for more than a

year; this amount of time is substantial in view of the seasonal

nature of the farm work. The only reasonable inference to be

drawn from the record is that Rivcom’s employees were expe-

rienced in Riverbend’s methods of farm work and it must be

concluded that Harris had a substantial opportunity to evalu-

ate the Riverbend workers. The short length of service of some

of Rivcom’s employees with Riverbend does not provide sub-

stantial evidence to support the Board’s rejection of petition-

er’s justification.

As mentioned above, the Board in rejecting petitioners’

justification also noted that Rivcom hired 13 people to work on

the Rivcom ranch who had never worked for Riverbend be-

fore. Harris testified that the 13 inexperienced workers were

temporary help until Riverbend employees became available;

they were hired to help with the prevention of frost damage to

orchards; it was petitioner’s burden to establish that the 13

workers were experienced with the frost prevention techni-

ques which Rivcom utilized and there is no evidence regarding

the experience of the 13 temporary workers. Because petition-

er did not meet the burden of establishing that the temporary

employees were experienced, it must be inferred that they

were inexperienced at frost protection techniques. However,

any inference of improper motive or inconsistency is dissipated

because the application of petitioner’s management rule of not

hiring any workers of its predecessor would eliminate former

Rancho Sespe workers from consideration for temporary em-

ployment irrespective of their qualifications. We conclude that

the hiring of the 13 inexperienced workers does not create an

inference of antiunion animus and does not constitute an in-

consistency which would justify the rejection of petitioner's

justifications.

60a

Respondents argue that the finding in N.L.R.B. v. Houston

Distribution Serv., Inc. (5th Cir. 1978) 573 F.2d 260, wherein

an employer took over a new business and refused to rehire the

former employees of its predecessor, applies to this case. The

NLRB found in the Houston case that the fact that the employ-

er failed to inquire about the qualifications of the former em-

ployees was inconsistent with the employer’s stated purpose of

having only skilled workers in the new business. The case is

distinguishable; here, petitioners had an existing labor force of

their own with which they could farm Rivcom Ranch. As

discussed above, the labor force was familiar with petitioners’

farming methods and operation techniques and could be used

more efficiently in farming the property. There was no need to

hire additional permanent employees. Petitioners in essence

simply transferred their employees from one farm to another.

Since no new hiring occurred, there was no reason to take

applications or screen the former employees of the farm. In

contrast, the employer in the Houston case, supra, did not

have an existing labor force which it transferred to operate the

new business, nor a substantial business justification compara-

ble to that of petitioners, and could not explain away the

inconsistency between its conduct and the stated purposes.

Here, petitioners also had a justification which was consistent ~

with not inquiring into the qualifications of the former employ-

ees of the farm, which is the management principle discussed

above. Even if the refusal to consider former Rancho Sespe

employees was not justified on the grounds of efficiency, it

could be justified pursuant to the management principle.

Therefore, that priaciple explained away any apparent in-

consistency. We conclude that petitioners’ refusal to consider

former employees of Rancho Sespe for employment is not

inconsistent with petitioners’ justifications and did not con-

stitute grounds for rejecting said justifications.

5. The Board rejected petitioners’ contention that the

radical operational changes Harris intended to make required

that Riveom employ workers it knew to be efficient. The Board

held that the changes proposed involved preharvest activities

with which Riverbend employees were unfamiliar and that

6la

Harris was not interested in farming the Rivcom ranch but

only wanted to obtain the fruit products.

There was uncontradicted evidence in the record that in

several areas Harris intended to change substantially the

operating procedures at the farm in terms of degree. Harris

intended to change the irrigation methods from a high water

volume operation using a furrow to a low volume system of

sprinkler and drip. The ALO found that 60 percent of the ranch

used high volume irrigation. The former manager of the farm

testified that he was using low volume irrigation methods to

some degree and converted some acreage each year from high

to low volume, and would have converted more if more work-

ing capital were available. It would seem that Rivcom’s plan

for irrigation did not involve the implementation of an entirely

new system which was completely unknown.

The second area in which petitioner intended to make sub-

stantial changes concerns the use of chemical methods in con-

trolling weeds. The record supports the ALO’s finding that

these techniques were being used on almost 78 percent of the

acreage at Rancho Sespe. Lombard testified thzt the other 22

percent of the acreage required the use of cultivation techni-

ques in order to retard soil erosion. Therefore, Harris’ plan to

implement chemical methods of weed control at the farm was

substantially in effect, but required that a considerable portion

of the acreage be converted.

Rivcom’s pruning and harvesting methods had not been used

before at the ranch. Harris also intended to eliminate the labor

housing and convert that area to farming acreage, to introduce

geranium and vegetable crops, and to pack avocados in the

field instead of transporting them to a packing house.

The only reasonable inference which can be drawn from the

record is that petitioner intended to make substantial changes

at the farm.

The Board’s rejection of petitioner’s justification based on

the extensive changes to be made, on the ground that River-

62a

bend’s employees would be no more efficient at adapting to the

changes than the former workers at Rancho Sespe, has been

discussed above and as concluded before, the Board’s reason is

not supported by the record. Rivcom’s employees had worked

for Riverbend for a minimum of three months and a maximum

of two years; that employment with Riverbend indicated to

Harris that Rivcom’s employees were able to perform

efficiently the type of work he anticipated would be required to

be performed. The only reasonable inference again to be ¢rawn

from these facts is that Harris as manager of Riverbend was

able to evaluate the work performance of the Riverbend em-

ployees. The record shows that Harris’ employees were expe-

rienced in some of the new methods he intended to implement

at the farm and that he believed with some justification that

Riverbend employees were efficient in the farming techniques

he used in general. There was no evidence which tended to

show that Riverbend employees were not as efficient as the

employees who previously had worked on the farm. Harris

knew that the workers formerly employed by his predecessor

were inexperienced with his pruning and harvesting techni-

ques. Harris was unfamiliar with the abilities of the former

workers. To investigate their general abilities in other areas of

farm work would require much time and effort. Also Harris did

not consider the former Rancho Sespe workers because of his

adherence to the management principle that it is best not to

hire the employees of a predecessor. The only reasonable in-

ference which can be drawn on this record is that petitioners’

justification that the changes Harris intended to make at the .

farm necessitated his reliance upon the employees of River-

bend_is valid and is not inconsistent with his conduct.

6. The Board refused to credit Harris’ uncontradicted .

testimony that he promised the Riverbend employees that

they would be given whatever work developed in the Ventura

area. Harris testified that he told a crew of about

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